1290 Funds
 
Prospectus
This Prospectus describes the Funds listed below. Each Fund has its own investment objective and strategies that are designed to meet different investment goals. This Prospectus contains information you should know before investing. Please read this Prospectus carefully before investing and keep it for future reference. 
Fund+
Share Class (Ticker)
1290 Diversified Bond Fund
Class A (TNUAX); Class T (TNUCX)*; Class I (TNUIX); Class R (TNURX)
1290 Essex Small Cap Growth Fund
Class A (ESCFX); Class T (ESCHX)*; Class I (ESCJX); Class R (ESCKX)
1290 GAMCO Small/Mid Cap Value Fund
Class A (TNVAX); Class T (TNVCX)*; Class I (TNVIX); Class R (TNVRX)
1290 High Yield Bond Fund
Class A (TNHAX); Class T (TNHCX)*; Class I (TNHIX); Class R (TNHRX)
1290 Loomis Sayles Multi-Asset Income Fund**
Class A (TNXAX); Class T (TNXCX)*; Class I (TNVDX); Class R (TNYRX)
1290 Multi-Alternative Strategies Fund
Class A (TNMAX); Class T (TNMCX)*; Class I (TNMIX); Class R (TNMRX)
1290 SmartBeta Equity Fund
Class A (TNBAX); Class T (TNBCX)*; Class I (TNBIX); Class R (TNBRX)
+
The Funds’ shares are not offered for sale in all states.
*
Class T shares currently are not offered for sale.
**
Effective August 19, 2022, 1290 DoubleLine Dynamic Allocation Fund was renamed 1290 Loomis Sayles Multi-Asset Income Fund.
 
March 1, 2023
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 Prospectus. Any representation to the contrary is a criminal offense.
1290 Funds® is a registered service mark of Equitable Investment Management Group, LLC, New York, NY 10104.
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Table of Contents 1
1. About the Funds
1290 Diversified Bond Fund  — Class A (TNUAX), Class T (TNUCX), Class I (TNUIX) and Class R (TNURX) Shares
Investment Objective: Seeks to maximize total return consisting of income and capital appreciation.
Fees and Expenses of the Fund
The following table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table and example below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in 1290 Funds’ funds. More information about these and other discounts is available from your financial professional and in the “How Sales Charges are Calculated” and “Ways to Reduce or Eliminate Sales Charges” sections of the Fund’s Prospectus, and the “Purchase, Redemption and Pricing of Shares” section of the Fund’s Statement of Additional Information.  
 Shareholder Fees
 (fees paid directly from your investment)
 
1290 Diversified Bond Fund
Class A
Shares
Class T
Shares
Class I
Shares
Class R
Shares
Maximum sales charge (load) imposed on purchases (as a percentage of offering price)
4.50%
2.50%
None
None
Maximum contingent deferred sales charge (load) (as a percentage of original purchase price or redemption
proceeds, whichever is lower)
1.00%1
None
None
None
Maximum account fee (deducted from accounts with a balance of less than $1,000)
$25
$25
$25
$25
1 On shares purchased without an initial sales charge and redeemed within 12 months of purchase.  
 Annual Fund Operating Expenses
 (expenses that you pay each year as a percentage of the value of your investment)
 
1290 Diversified Bond Fund
Class A
Shares
Class T
Shares
Class I
Shares
Class R
Shares
Management Fee
0.60%
0.60%
0.60%
0.60%
Distribution and/or Service Fees (12b-1 fees)
0.25%
0.25%
0.00%
0.50%
Other Expenses
0.35%
0.35%1
0.35%
0.36%
Total Annual Fund Operating Expenses
1.20%
1.20%
0.95%
1.46%
Fee Waiver and/or Expense Reimbursement2
(0.45)%
(0.45)%
(0.45)%
(0.46)%
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement
0.75%
0.75%
0.50%
1.00%
1
Based on estimated amounts for the current fiscal year.
2
Pursuant to a contract, Equitable Investment Management, LLC (the “Adviser”) has agreed to make payments or waive its and its affiliates' management, administrative and other fees to limit the expenses of the Fund through April 30, 2024 (unless the Board of Trustees consents to an earlier revision or termination of this arrangement) (“Expense Limitation Arrangement”) so that the annual operating expenses of the Fund (exclusive of taxes, interest, brokerage commissions, capitalized expenses (other than offering costs), fees and expenses of other investment companies in which the Fund invests, 12b-1 fees, dividend and interest expenses on securities sold short, and extraordinary expenses not incurred in the ordinary course of the Fund’s business) do not exceed an annual rate of average daily net assets of 0.50% for Class A shares, Class T shares, Class I shares, and Class R shares of the Fund. The Expense Limitation Arrangement may be terminated by the Adviser at any time after April 30, 2024. The Adviser may be reimbursed the amount of any such payments or waivers in the future provided that the payments or waivers are reimbursed within three years of the payments or waivers being recorded and the Fund’s expense ratio, after the reimbursement is taken into account, does not exceed the Fund’s expense cap at the time of the waiver or the Fund’s expense cap at the time of the reimbursement, whichever is lower. The total annual fund operating expense ratios after fee waiver and/or expense reimbursement for Class A shares, Class T shares, and Class R shares, as shown in the table, are higher than the Fund’s expense cap because these ratios include 12b-1 fees and certain other expenses, as noted above, that are excluded from the Expense Limitation Arrangement.
Example
This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds. The Example assumes that you invest $10,000 in the Fund for the periods indicated, that your investment has a 5% return each year, that the Fund's operating expenses remain the same and that the Expense Limitation Arrangement is not renewed.
2 1290 Diversified Bond Fund
Although your actual costs may be higher or lower, based on these assumptions, whether you redeem or hold your shares, your costs would be: 
 
1 Year
3 Years
5 Years
10 Years
Class A Shares
$523
$771
$1,039
$1,801
Class T Shares
$325
$578
$851
$1,629
Class I Shares
$51
$258
$482
$1,125
Class R Shares
$102
$417
$754
$1,707
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the Example, affect the Fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 244% of the average value of its portfolio.
Investments, Risks, and Performance
Principal Investment Strategy
Under normal circumstances, the Fund invests at least 80% of its net assets, plus borrowings for investment purposes, in a diversified portfolio of U.S. and foreign bonds or other debt securities of varying maturities and other instruments that provide investment exposure to such debt securities, including forwards or derivatives such as options, futures contracts or swap agreements.
Under normal circumstances, the Fund invests primarily in a diversified mix of U.S. dollar-denominated investment grade fixed income securities, particularly U.S. government, corporate and mortgage-backed securities. The Fund may invest in securities of any maturity. Under normal circumstances, it is expected that the average portfolio duration of the Fund will be within 5 years of the duration of the benchmark. As of December 31, 2022, the average duration of the benchmark, the Bloomberg U.S. Aggregate Bond Index, was 6.32 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, which may increase the volatility of the security’s value and may lead to losses. As a separate measure, there is no limit on the weighted average maturity of the Fund’s fixed income portfolio.
Brandywine Global Investment Management, LLC (“Brandywine Global” or the “Sub-Adviser”) employs a value approach toward fixed income investing and evaluates the relative attractiveness among corporate, mortgage and U.S. government securities, and also may invest in non-dollar-denominated issues. The Sub-Adviser relies upon value measures to guide its decisions regarding sector, security and country selection, such as the relative attractiveness of the extra yield offered by securities other than those issued by the U.S. Treasury. The Sub-Adviser also measures various types of risk by monitoring interest rates, inflation, the shape of the yield curve, credit risk, prepayment risk, risks relating to conditions in different countries, and currency valuations.
The Fund may invest in securities denominated in foreign currencies and in U.S. dollar-denominated securities of foreign issuers, including securities and instruments that are economically tied to emerging market countries. The Fund will normally limit its foreign currency exposure (from non-U.S. dollar-denominated securities or currencies) to 40% of its total assets (this limitation does not apply to investment grade sovereign debt denominated in the local currency with less than 1 year remaining to maturity).
The portfolio managers intend to maintain an average weighted portfolio quality of BBB- or better, whether composed of rated securities or unrated securities deemed by the portfolio managers to be of comparable quality. The Fund may invest in both investment grade securities and high yield securities (“junk bonds”) subject to a maximum of 40% of its total assets in securities rated below investment grade by Standard & Poor’s Global Ratings (“S&P”), Fitch, Inc. (“Fitch”), or Moody’s Investors Service, Inc. (”Moody’s”) or, if unrated, determined by the Fund’s investment adviser, Equitable Investment Management, LLC (the “Adviser”), or the Sub-Adviser to be of comparable quality. The below investment grade securities in which the Fund invests are generally rated at least CC by S&P or Fitch or at least Ca by Moody’s or, if unrated, determined by the Adviser or the Sub-Adviser to be of comparable quality. The Fund may continue to hold securities that are downgraded below these ratings subsequent to purchase. The Fund does not normally invest in securities that are in default or have defaulted with respect to the payment of interest or repayment of principal, but may do so depending on market or other
1290 Diversified Bond Fund 3
conditions. The Fund may have exposure to securities rated below CC or Ca, or to securities that are in default or have defaulted, through its investments in certain derivatives described below.
The Fund may invest, without limitation, in forwards and derivative instruments such as options, futures contracts, structured securities or swap agreements (including total return swaps, credit default swaps and interest rate swaps), and in mortgage- and asset-backed securities, subject to applicable law and any other restrictions described in the Fund’s prospectus or Statement of Additional Information. Derivatives may be used for various investment purposes, including to hedge portfolio risk, to gain exposure or to short individual securities, to earn income and enhance return, and to manage duration. The Fund’s investments in derivatives may involve the use of leverage because the Fund is not required to invest the full market value of the contract upon entering into the contract but participates in gains and losses on the full contract price. The use of derivatives also may involve the use of leverage because the heightened price sensitivity of some derivatives to market changes may magnify the Fund’s gain or loss.
The Fund may enter into foreign currency exchange transactions to hedge against currency exposure in its portfolio. The Fund may enter into forward currency exchange contracts and other currency derivatives, such as swaps, options and futures, to shift its investment exposure from one currency into another. This may include shifting exposure from U.S. dollars to a foreign currency, or from one foreign currency to another foreign currency. This type of strategy, sometimes known as a “crosshedge,” will tend to reduce or eliminate exposure to the currency that is sold, and increase exposure to the currency that is purchased, much as if the Fund had sold a security denominated in one currency and purchased an equivalent security denominated in another. Cross-hedges are intended to protect against losses resulting from a decline in the value of the hedged currency, but will cause the Fund to assume the risk of fluctuations in the value of the currency it purchases, and may also limit any potential gain that might result should the value of such hedged currency increase.
The Fund may purchase or sell securities on a when-issued, delayed delivery, or forward commitment basis. The Fund may seek to obtain market exposure to the securities in which it primarily invests by entering into a series of purchase and sale contracts (such as contracts for derivative instruments) or by using other investment techniques (such as buy backs or dollar rolls). The Fund may invest in privately placed and restricted securities, collateralized loan obligations, inflation-indexed bonds, bank loans, and loan participations and assignments. The Fund may also invest in zero coupon and pay-in-kind securities. The Fund may engage in active and frequent trading to achieve its investment objective.
Principal Risks
An investment in the Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The value of your investment may fall, sometimes sharply, and you could lose money by investing in the Fund. There can be no assurance that the Fund will achieve its investment objective.
The following risks can negatively affect the Fund’s performance. The most significant risks as of the date of this Prospectus are presented first, followed by additional principal risks in alphabetical order.
Market Risk —  The Fund is subject to the risk that the securities markets will move down, sometimes rapidly and unpredictably, based on overall economic conditions and other factors, which may negatively affect Fund performance. Securities markets also may experience long periods of decline in value. The value of a security may decline due to factors that are specifically related to a particular company, as well as general market conditions, such as real or perceived adverse economic or political conditions, inflation rates and/or investor expectations concerning such rates, changes in interest rates, recessions, or adverse investor sentiment generally. During a general downturn in the securities markets, multiple asset classes may decline in value simultaneously. Changes in the financial condition of a single issuer can impact a market as a whole.
Geopolitical events, including terrorism, tensions, war or other open conflicts between nations, or political or economic dysfunction within some nations that are global economic powers or major producers of oil, may lead to overall instability in world economies and markets generally and have led, and may in the future lead, to increased market volatility and may have adverse long-term effects. World markets, or those in a particular region, may all react in similar fashion to important economic, political or other developments. Events such as environmental and natural disasters or other catastrophes, public health crises (such as epidemics and pandemics), social unrest, and cybersecurity incidents, and governments’ reactions to such events, could cause uncertainty in the markets and may adversely affect the performance of the global economy. Impacts from climate change may include significant risks to global financial assets and economic growth. The extent and duration of such events and resulting market disruptions could be substantial and could magnify the impact of other risks to the Fund. The value and liquidity of the Fund’s investments may be negatively affected by developments in other countries and regions, whether or not the Fund invests in securities of issuers located in or with significant exposure to the countries or regions directly affected.
4 1290 Diversified Bond Fund
The U.S. Federal Reserve (“Fed”) has invested or otherwise made available substantial amounts of money to keep credit flowing through short-term money markets and has signaled that it will continue to adjust its operations as appropriate to support short-term money markets. Amid these efforts, concerns about the markets’ dependence on the Fed’s provision of liquidity have grown. Policy changes by the U.S. government and/or the Fed and political events within the United States may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree. A downgrade of the ratings of U.S. government debt obligations, or concerns about the U.S. government’s credit quality in general, could have a substantial negative effect on the U.S. and global economies. High public debt in the United States and other countries creates ongoing systemic and market risks and policymaking uncertainty.
In addition, markets and market participants are increasingly reliant on information data systems. Inaccurate data, 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.
Credit Risk —  The Fund is subject to the risk that the issuer or guarantor of a fixed income security, or the counterparty to a transaction, is unable or unwilling, or is perceived as unable or unwilling, to make timely interest or principal payments or otherwise honor its obligations, or defaults completely, which may cause the Fund's holdings to lose value. The downgrade of a security’s credit rating may decrease its value. Lower credit quality also may lead to greater volatility in the price of a security and may negatively affect a security’s liquidity. The credit quality of a security can deteriorate suddenly and rapidly. The Fund may experience a significant or complete loss on a fixed income security or a transaction.
Interest Rate Risk —  Changes in interest rates may affect the yield, liquidity and value of investments in income producing or debt securities. Changes in interest rates also may affect the value of other securities. When interest rates rise, the value of the Fund's debt securities generally declines. Conversely, when interest rates decline, the value of the Fund's debt securities generally rises. Typically, the longer the maturity or duration of a debt security, the greater the effect a change in interest rates could have on the security’s price. Thus, the sensitivity of the Fund's debt securities to interest rate risk will increase the greater the duration of those securities. A significant or rapid rise in interest rates could result in losses to the Fund.
Investment Grade Securities Risk —  Securities rated in the lower investment grade rating categories (e.g., BBB or Baa) are considered investment grade securities, but may have more risk than higher rated obligations because they are regarded as having only an adequate capacity to pay principal and interest, are considered to lack outstanding investment characteristics, and may possess certain speculative characteristics.
Non-Investment Grade Securities Risk —  Bonds rated below BBB by Standard & Poor’s Global Ratings or Fitch Ratings, Ltd., or below Baa by Moody’s Investors Service, Inc. (or, if unrated, determined by the investment manager to be of comparable quality) are speculative in nature and are subject to additional risk factors such as increased possibility of default, illiquidity of the security, and changes in value based on changes in interest rates. Non-investment grade bonds, sometimes referred to as “junk bonds,” are usually issued by companies without long track records of sales and earnings, or by those companies with questionable credit strength. The creditworthiness of issuers of non-investment grade debt securities may be more complex to analyze than that of issuers of investment grade debt securities, and reliance on credit ratings may present additional risks.
Derivatives Risk —  The Fund's investments in derivatives may rise or fall in value more rapidly than other investments and may reduce the Fund's returns and increase the volatility of the Fund's net asset value. Investing in derivatives involves investment techniques and risk analyses different from, and risks in some respects greater than, those associated with investing in more traditional investments, such as stocks and bonds. Derivatives may be leveraged such that a small investment can have a significant impact on the Fund's exposure to stock market values, interest rates, or other investments. As a result, a relatively small price movement in a derivatives contract may cause an immediate and substantial loss, and the Fund could lose more than the amount it invested. Some derivatives can have the potential for unlimited losses. In addition, it may be difficult or impossible for the Fund to purchase or sell certain derivatives in sufficient amounts to achieve the desired level of exposure, or to terminate or offset existing arrangements, which may result in a loss or may be costly to the Fund. Some derivatives are more sensitive to market price fluctuations and to interest rate changes than other investments. Derivatives may not behave as anticipated by the Fund, and derivatives strategies that are successful under certain market conditions may be less successful or unsuccessful under other market conditions. The Fund also may be exposed to losses if the counterparty in the transaction is unable or unwilling to fulfill its contractual obligation. In certain cases, the Fund may be hindered or delayed in exercising remedies against or closing out derivatives with a counterparty, resulting in additional losses. Derivatives also may be subject to the risk of mispricing or improper valuation, and valuation may be more difficult in times of market turmoil. Changes to the regulation of derivatives markets and mutual funds’ use of derivatives may impact the Fund's ability to maintain its investments in derivatives, make derivatives more costly, limit their availability, adversely affect their value or performance, or otherwise disrupt markets.
1290 Diversified Bond Fund 5
Leveraging Risk —  When the Fund leverages its holdings, the value of an investment in the Fund will be more volatile and all other risks will tend to be compounded. Investments that create leverage can result in losses to the Fund that exceed the amount originally invested and may accelerate the rate of losses (some of which may be sudden or substantial). For certain investments that create leverage, relatively small market fluctuations can result in large changes in the value of such investments. There can be no assurance that the Fund's use of any leverage will be successful.
U.S. Government Securities Risk —  Although the Fund may hold securities that carry U.S. government guarantees, these guarantees do not extend to shares of the Fund itself and do not guarantee the market prices of the securities. Securities issued by the U.S. Treasury or other agencies and instrumentalities of the U.S. government may decline in value as a result of, among other things, changes in interest rates, political events in the United States, international developments, including strained relations with foreign countries, and changes in the credit rating of, or investor perceptions regarding the creditworthiness of, the U.S. government. Furthermore, not all securities issued by the U.S. government and its agencies and instrumentalities are backed by the full faith and credit of the U.S. Treasury. Securities not backed by the full faith and credit of the U.S. Treasury involve greater credit risk than investments in other types of U.S. government securities.
Foreign Securities Risk —  Investments in foreign securities involve risks in addition to those associated with investments in U.S. securities. Foreign markets may be less liquid, more volatile and subject to less government supervision and regulation than U.S. markets, and it may take more time to clear and settle trades involving foreign securities, which could negatively impact the Fund's investments and cause it to lose money. Security values also may be negatively affected by changes in the exchange rates between the U.S. dollar and foreign currencies. Differences between U.S. and foreign legal, political and economic systems, regulatory regimes and market practices, as well as trade barriers and other protectionist trade policies (including those of the United States), governmental instability, war, or other political or economic actions, also may adversely impact security values. Foreign securities are also subject to the risks associated with the potential imposition of economic or other sanctions against a particular foreign country, its nationals, businesses or industries. World markets, or those in a particular region, may all react in similar fashion to important economic, political or other developments. Events and evolving conditions in certain economies or markets may alter the risks associated with investments tied to countries or regions that historically were perceived as comparatively stable and make such investments riskier and more volatile. Regardless of where a company is organized or its stock is traded, its performance may be significantly affected by events in regions from which it derives its profits or in which it conducts significant operations.
Currency Risk —  Investments that are denominated in or that provide exposure to foreign currencies are subject to the risk that those currencies will decline in value relative to the U.S. dollar. Any such decline may erode or reverse any potential gains from an investment in securities denominated in foreign currency or may widen existing loss. In the case of hedging positions, there is the risk that the U.S. dollar will decline in value relative to the currency being hedged. Currency rates may fluctuate significantly over short periods of time.
Emerging Markets Risk —  The risks associated with investments in emerging market countries often are significant, and vary from jurisdiction to jurisdiction and company to company. Investments in emerging market countries are more susceptible to loss than investments in more developed foreign countries and may present market, credit, currency, liquidity, legal, political, technical and other risks different from, or greater than, the risks of investing in more developed foreign countries. Emerging market countries may be more likely to experience rapid and significant adverse developments in their political or economic structures, intervene in financial markets, restrict foreign investments, impose high withholding or other taxes on foreign investments, impose restrictive exchange control regulations, or nationalize or expropriate the assets of private companies, which may have negative impacts on transaction costs, market price, investment returns and the legal rights and remedies available to the Fund. In addition, the securities markets of emerging market countries generally are smaller, less liquid and more volatile than those of more developed foreign countries, and emerging market countries often have less uniformity in regulatory, accounting, auditing and financial reporting requirements or standards, which may impact the availability and quality of information about issuers, and less reliable clearance and settlement, registration and custodial procedures. Emerging market countries also may be subject to high inflation and rapid currency devaluations, and currency-hedging techniques may be unavailable in certain emerging market countries. In addition, some emerging market countries may be heavily dependent on international trade, which can materially affect their securities markets. Securities of issuers traded on foreign exchanges may be suspended. The likelihood of such suspensions may be higher for securities of issuers in emerging market countries than in countries with more developed markets.
European Economic Risk —  The economies of European Union (“EU”) member countries and their trading partners, as well as the broader global economy, may be adversely affected by changes in the euro’s exchange rate, changes in EU or governmental regulations on trade, geopolitical tensions or conflicts, and the threat of default or an actual default by an EU member country on its sovereign debt, which could negatively impact the Fund's investments and cause it to lose money. Recent events in Europe may continue to impact the economies of every European country and their economic partners. Russia’s military invasion of Ukraine in February 2022, the resulting responses by the United States and other countries, and
6 1290 Diversified Bond Fund
the potential for wider conflict have had, and could continue to have, severe adverse effects on regional and global economies and could further increase volatility and uncertainty in the financial markets. In addition, until the full economic effects of the United Kingdom's withdrawal from the EU, commonly referred to as “Brexit,” become clearer, there remains a risk that Brexit may negatively impact the Fund's investments and cause it to lose money. Any further withdrawals from the EU could cause additional market disruption globally.
Geographic Concentration Risk —  To the extent the Fund invests a significant portion of its assets in securities of companies domiciled, or exercising the predominant part of their economic activity, in one country or geographic region, it assumes the risk that economic, political, social and environmental conditions in that particular country or region will have a significant impact on the Fund’s investment performance and that the Fund’s performance will be more volatile than the performance of more geographically diversified funds. In addition, the risks associated with investing in a narrowly defined geographic area are generally more pronounced with respect to investments in emerging market countries.
Hedging Risk —  If the Fund takes a hedging position (such as long or short positions) in a particular currency, security, or bond market, it will lose money if the currency, security, or bond market appreciates in value, or an expected credit event fails to occur. Any efforts at buying or selling currencies could result in significant losses for the Fund.
Liquidity Risk —  From time to time, there may be little or no active trading market for a particular investment in which the Fund may invest or is invested. In such a market, the value of such an investment and the Fund's share price may fall dramatically. Illiquid investments may be difficult or impossible to sell or purchase at an advantageous time or price or in sufficient amounts to achieve the Fund's desired level of exposure. To meet redemption requests during periods of illiquidity, the Fund may be forced to dispose of investments at unfavorable times or prices and/or under unfavorable conditions, which may result in a loss or may be costly to the Fund. Investments that are illiquid or that trade in lower volumes may be more difficult to value. The Fund also may not receive its proceeds from the sale of certain investments for an extended period of time. Certain investments that were liquid when purchased may later become illiquid, sometimes abruptly, particularly in times of overall economic distress or adverse investor perception. An inability to sell a portfolio position can adversely affect the Fund's value or prevent the Fund from being able to take advantage of other investment opportunities. During periods of market stress, an investment or even an entire market segment may become illiquid, sometimes abruptly, which can adversely affect the Fund's ability to limit losses. In addition, a reduction in the ability or willingness of dealers and other institutional investors to make a market in certain securities may result in decreased liquidity in certain markets.
Portfolio Management Risk —  The Fund is subject to the risk that strategies used by an investment manager and its securities selections fail to produce the intended results. An investment manager’s judgments or decisions about the quality, relative yield or value of, or market trends affecting, a particular security or issuer, industry, sector, region or market segment, or about the economy or interest rates, may be incorrect or otherwise may not produce the intended results, which may result in losses to the Fund. In addition, many processes used in Fund management, including security selection, rely, in whole or in part, on the use of various technologies. The Fund may suffer losses if there are imperfections, errors or limitations in the quantitative, analytic or other tools, resources, information and data used, or the analyses employed or relied on, by an investment manager, or if such tools, resources, information or data are used incorrectly, fail to produce the desired results, or otherwise do not work as intended. There can be no assurance that the use of these technologies will result in effective investment decisions for the Fund.
Cash Management Risk —  Upon entering into certain derivatives contracts, such as futures contracts, and to maintain open positions in certain derivatives contracts, the Fund may be required to post collateral for the contract, the amount of which may vary. In addition, the Fund may maintain cash and cash equivalent positions as part of the Fund's strategy in order to take advantage of investment opportunities as they arise, to manage the Fund's market exposure and for other portfolio management purposes. As such, the Fund may maintain cash balances, which may be significant, with counterparties such as the 1290 Funds' custodian or its affiliates. Maintaining larger cash and cash equivalent positions could negatively affect the Fund's performance due to missed investment opportunities and may also subject the Fund to additional risks, such as increased credit risk with respect to the custodian bank holding the assets and the risk that a counterparty may be unable or unwilling to honor its obligations.
Collateralized Loan Obligations Risk —  Investments in collateralized loan obligations (“CLOs”) involve many of the same risks associated with investments in debt securities and asset-backed securities including interest rate risk, credit risk, liquidity risk, prepayment and extension risk, and valuation risk. The risks of an investment in a CLO also depend largely on the quality and type of the collateral and the class or “tranche” of the CLO in which the Fund invests. Normally, CLOs are privately offered and sold, and thus are not registered under the securities laws. As a result, investments in CLOs may be characterized by the Fund as illiquid securities; however, an active dealer market, or other relevant measures of liquidity, may exist for CLOs allowing a CLO potentially to be deemed liquid under the Fund's liquidity policies. Additionally, CLOs carry risks, including, but not limited to: (a) the possibility that distributions from collateral securities will not be adequate to make interest or other payments; (b) the risk that the collateral securities may decline in value or quality or be downgraded or go into default, particularly during periods of economic downturn; (c) the possibility that the Fund may invest in CLOs that are subordinate to other classes; (d) the risk that the manager of the CLOs may perform poorly; and (e) the
1290 Diversified Bond Fund 7
risk that the complex structure of CLOs may produce disputes with the issuer or unexpected investment results. CLOs also can be difficult to value and may be highly leveraged (which could make them highly volatile), and the use of CLOs may result in losses to the Fund.
Dollar Roll and Sale-Buyback Transactions Risk —  Dollar roll and sale-buyback transactions may increase the Fund's volatility and may be viewed as a form of leverage. There is also a risk that the counterparty will be unable or unwilling to complete the transaction as scheduled, which may result in losses to the Fund.
Futures Contract Risk —  The primary risks associated with the use of futures contracts are (a) the imperfect correlation between the change in market value of the instruments held by the Fund and the price of the futures contract; (b) liquidity risks, including the possible absence of a liquid secondary market for a futures contract and the resulting inability to close a futures contract when desired; (c) losses (potentially unlimited) caused by unanticipated market movements; (d) an investment manager’s inability to predict correctly the direction of securities prices, interest rates, currency exchange rates and other economic factors; (e) the possibility that a counterparty, clearing member or clearinghouse will default in the performance of its obligations; (f) if the Fund has insufficient cash, it may have to sell securities from its portfolio to meet daily variation margin requirements, and the Fund may have to sell securities at a time when it may be disadvantageous to do so; and (g) transaction costs associated with investments in futures contracts may be significant, which could cause or increase losses or reduce gains. Futures contracts are also subject to the same risks as the underlying investments to which they provide exposure. In addition, futures contracts may subject the Fund to leveraging risk.
Inflation-Indexed Bonds Risk —  Inflation-indexed bonds are fixed income securities whose principal value is periodically adjusted according to inflation. The value of inflation-indexed bonds is expected to change in response to changes in real interest rates. Real interest rates represent nominal (stated) interest rates reduced by the expected impact of inflation. In general, inflation-indexed bonds, including Treasury inflation-indexed securities, decline in value when real interest rates rise and rise in value when real interest rates decline. In certain interest rate environments, such as when real interest rates are rising faster than nominal interest rates, inflation-indexed bonds may experience greater losses than other fixed income securities with similar durations. Interest payments on inflation-indexed debt securities can be unpredictable and may vary as the principal and/or interest is adjusted for inflation. In periods of deflation, the Fund may have no income at all from such investments.
Loan Risk —  A bank loan represents an interest in a loan or other direct indebtedness that entitles the acquirer of such interest to payments of interest, principal and/or other amounts due under the structure of the loan. Loan interests are subject to liquidity risk, prepayment risk, extension risk, the risk of subordination to other creditors, restrictions on resale, and the lack of a regular trading market and publicly available information. Loan interests may be difficult to value and may have extended trade settlement periods. As a result, the proceeds from the sale of a loan may not be available to make additional investments or to meet redemption obligations until potentially a substantial period after the sale of the loan. The extended trade settlement periods could force the Fund to liquidate other securities to meet redemptions and may present a risk that the Fund may incur losses in order to timely honor redemptions. There is a risk that the value of any collateral securing a loan in which the Fund has an interest may decline and that the collateral may not be sufficient to cover the amount owed on the loan. In the event the borrower defaults, the Fund's access to the collateral may be limited or delayed by bankruptcy or other insolvency laws. Loans may not be considered “securities,” and purchasers, such as the Fund, therefore may not have the benefit of the anti-fraud protections of the federal securities laws. To the extent that the Fund invests in loan participations and assignments, it is subject to the risk that the financial institution acting as agent for all interests in a loan might fail financially. It is also possible that the Fund could be held liable, or may be called upon to fulfill other obligations, as a co-lender.
Mortgage-Related and Other Asset-Backed Securities Risk —  Declines in the credit quality of and defaults by the issuers of mortgage-related and other asset-backed securities or instability in the markets for such securities may decrease the value of such securities, which could result in losses to the Fund, and may reduce the liquidity of such securities and make such securities more difficult to purchase or sell at an advantageous time and price. In addition, borrowers may default on the obligations that underlie mortgage-related and other asset-backed securities. The risk of defaults by borrowers generally is greater during times of rising interest rates and/or unemployment rates. The impairment (or loss) of the value of collateral or other assets underlying mortgage-related and other asset-backed securities will result in a reduction in the value of the securities. Certain collateral may be difficult to locate in the event of default, or may be lost, and recoveries of depreciated or damaged collateral may not fully cover payments due on such collateral. Asset-backed securities may not have the benefit of a security interest in collateral comparable to that of mortgage assets, resulting in additional credit risk.
In addition, certain mortgage-related and other asset-backed securities may include securities backed by pools of loans made to “subprime” borrowers or borrowers with blemished credit histories. The risk of defaults by borrowers is generally higher in the case of asset or mortgage pools that include subprime assets or mortgages, and the liquidity and value of subprime mortgages and non-investment grade mortgage-backed securities that are not guaranteed by Ginnie Mae, Fannie Mae, and Freddie Mac could change dramatically over time.
8 1290 Diversified Bond Fund
Furthermore, mortgage-related and other asset-backed securities typically provide the issuer with the right to prepay the security prior to maturity. During periods of rising interest rates, the rate of prepayments tends to decrease because borrowers are less likely to prepay debt (such as mortgage debt or automobile loans). Slower than expected payments can extend the average lives of mortgage-related and other asset-backed securities, and this may “lock in” a below market interest rate and increase the security’s duration and interest rate sensitivity, which may increase the volatility of the security’s value and may lead to losses. During periods of falling interest rates, the rate of prepayments tends to increase because borrowers are more likely to pay off debt and refinance at the lower interest rates then available. Unscheduled prepayments shorten the average lives of mortgage-related and other asset-backed securities and may result in the Fund’s having to reinvest the proceeds of the prepayments at lower interest rates, thereby reducing the Fund’s income.
Portfolio Turnover Risk —  High portfolio turnover (generally, turnover in excess of 100% in any given fiscal year) may result in increased transaction costs to the Fund, which may result in higher fund expenses and lower total return.
Prepayment Risk and Extension Risk —  Prepayment risk is the risk that the issuer of a security held by the Fund may pay off principal more quickly than originally anticipated. This may occur when interest rates fall. The Fund may have to reinvest the proceeds in an investment offering a lower yield, may not benefit from any increase in value that might otherwise result from declining interest rates and may lose any premium it paid to acquire the security. Extension risk is the risk that the issuer of a security held by the Fund may pay off principal more slowly than originally anticipated. This may occur when interest rates rise. The Fund may be prevented from reinvesting the proceeds it would have received at a given time in an investment offering a higher yield.
Privately Placed and Other Restricted Securities Risk —  Restricted securities, which include privately placed securities, are securities that cannot be offered for public resale unless registered under the applicable securities laws or that have a contractual restriction that prohibits or limits their resale. Difficulty in selling securities may result in a loss or be costly to the Fund. The risk that securities may not be sold for the price at which the Fund is carrying them is greater with respect to restricted securities than it is with respect to registered securities. The illiquidity of the market, as well as the lack of publicly available information regarding these securities, also may make it difficult to determine a fair value for certain securities for purposes of computing the Fund's net asset value.
Redemption Risk —  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 heightened during periods of declining or illiquid markets. Heavy redemptions could hurt the Fund's performance.
Market developments and other factors, including a general rise in interest rates, have 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. The market-making capacity of dealers has been reduced in recent years, in part as a result of structural changes, such as fewer proprietary trading desks at broker-dealers and increased regulatory capital requirements. In addition, significant securities market disruptions related to the coronavirus disease (COVID-19) pandemic have led to dislocation in the market for a variety of fixed income securities (including, without limitation, commercial paper, corporate debt securities, certificates of deposit, asset-backed debt securities and municipal obligations), which has decreased liquidity and sharply reduced returns in certain cases. Increased redemptions from mutual funds that hold large amounts of fixed income securities, 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.
Sector Risk —  From time to time, based on market or economic conditions, the Fund may have significant positions in one or more sectors of the market. To the extent the Fund invests more heavily in particular sectors, its performance will be especially sensitive to developments that significantly affect those sectors. Individual sectors may be more volatile, and may perform differently, than the broader market. The industries that constitute a sector may all react in the same way to economic, political or regulatory events.
Variable and Floating Rate Securities Risk —  The market prices of securities with variable and floating interest rates are generally less sensitive to interest rate changes than are the market prices of securities with fixed interest rates. Variable and floating rate securities may decline in value if market interest rates or interest rates paid by such securities do not move as expected. Conversely, variable and floating rate securities will not generally rise in value if market interest rates decline. Certain types of floating rate securities may be subject to greater liquidity risk than other debt securities.
When-Issued and Delayed Delivery Securities and Forward Commitments Risk —  When-issued and delayed delivery securities and forward commitments involve the risk that the security the Fund commits to purchase will decline in value prior to its delivery. This risk is in addition to the risk that the Fund's other assets will decline in value. Therefore, these transactions can have a leverage-like effect on the Fund and increase the Fund's overall investment exposure. There also is the risk that the security will not be issued or that the other party to the transaction will fail to complete the sale or purchase of the security. If this occurs, the Fund may lose the opportunity to purchase or sell the security at the agreed upon price and may forgo any gain in the security’s price.
1290 Diversified Bond Fund 9
Zero Coupon and Pay-in-Kind Securities Risk —  Zero coupon and pay-in-kind securities are debt securities that do not make periodic cash interest payments. Zero coupon securities are issued at a significant discount from their face value. Zero coupon and pay-in-kind securities tend to be subject to greater fluctuations in market value in response to changing interest rates than securities of comparable maturities that pay interest periodically and in cash.
Risk/Return Bar Chart and Table
The bar chart and table below provide some indication of the risks of investing in the Fund by showing changes in the Fund's performance from year to year and by showing how the Fund's average annual total returns for the past one-year, five-year and since inception periods through December 31, 2022, compared to the returns of a broad-based securities market index. The return of the broad-based securities market index (and any additional comparative index) shown for the since inception period below is the return of the index since the inception of the share class with the longest history. Past performance (before and after taxes) is not an indication of future performance.
Performance information for the periods prior to June 15, 2018, is that of the Fund when it followed a different investment objective and different principal investment strategies, and had different Sub-Advisers.
The performance results shown in the bar chart do not reflect any sales charges or account fees, which would reduce the performance results. Class T shares of the Fund have not commenced operations. Performance information for Class T shares will be available after Class T shares have been in operation for one full calendar year.  
 Calendar Year Annual Total Returns — Class I
  
Best quarter (% and time period)
10.33%
2020 2nd Quarter
Worst quarter (% and time period)
-7.83%
2022 2nd Quarter
  
 Average Annual Total Returns
 
 
One
Year
Five
Years
Since
Inception
Inception
Date
1290 Diversified Bond Fund - Class I
Return Before Taxes
-12.53%
2.44%
2.54%
07/06/2015
1290 Diversified Bond Fund - Class I
Return After Taxes on Distributions
-13.68%
0.68%
0.94%
07/06/2015
1290 Diversified Bond Fund - Class I
Return After Taxes on Distributions and Sale of Fund Shares
-7.38%
1.21%
1.30%
07/06/2015
1290 Diversified Bond Fund - Class A
Return Before Taxes
-16.70%
1.26%
1.67%
07/06/2015
1290 Diversified Bond Fund - Class R
Return Before Taxes
-13.04%
1.93%
2.02%
07/06/2015
Bloomberg U.S. Aggregate Bond Index (reflects no deduction for fees, expenses, or taxes)
-13.01%
0.02%
0.88%
 
After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs). The returns after taxes on distributions and sale of Fund shares may be higher than other returns for the same period due to an assumed tax benefit from any losses on a
10 1290 Diversified Bond Fund
sale of Fund shares at the end of the measurement period. After-tax returns are shown only for Class I shares. After-tax returns for other Classes may vary.
Who Manages the Fund
Investment Adviser: Equitable Investment Management, LLC (the “Adviser”)
Portfolio Managers:  The members of the team that are jointly and primarily responsible for the selection, monitoring and oversight of the Fund’s Sub-Adviser are: 
Name
Title
Date Began
Managing
the Fund
Kenneth T. Kozlowski, CFP®, CLU, ChFC
Executive Vice President and Chief Investment
Officer of the Adviser
July 2015
Alwi Chan, CFA®
Senior Vice President and Deputy Chief
Investment Officer of the Adviser
July 2015
Sub-Adviser: Brandywine Global Investment Management, LLC (“Brandywine Global”)
Portfolio Managers:  The individuals jointly and primarily responsible for the securities selection, research and trading for the Fund are: 
Name
Title
Date Began
Managing
the Fund
Anujeet Sareen, CFA®
Portfolio Manager of Brandywine Global
June 2018
Tracy Chen, CFA®, CAIA
Portfolio Manager of Brandywine Global
June 2018
Brian L. Kloss, JD, CPA
Portfolio Manager and Head of High Yield of
Brandywine Global
March 2020
The Adviser is responsible for overseeing Sub-Advisers and recommending their hiring, termination and replacement to the Board of Trustees. The Adviser has been granted relief by the Securities and Exchange Commission to hire, terminate and replace Sub-Advisers and amend sub-advisory agreements subject to the approval of the Board of Trustees and without obtaining shareholder approval. However, the Adviser may not enter into a sub-advisory agreement on behalf of the Fund with an “affiliated person” of the Adviser unless the sub-advisory agreement is approved by the Fund's shareholders. The relief does not extend to any increase in the advisory fee paid by the Fund to the Adviser; any such increase would be subject to shareholder approval.
Purchase and Redemption of Fund Shares
You may purchase and redeem shares of the Fund each day the New York Stock Exchange is open for trading at the Fund’s net asset value determined after receipt of your request in good order, subject to any applicable sales charge. All share classes are currently not offered for sale in all states. Initial purchases must be effected through your financial intermediary. Subsequently, you may purchase or redeem shares either by having your financial intermediary process your purchase or redemption, or by telephone (1-888-310-0416), by overnight mail (1290 Funds, c/o SS&C GIDS, Inc., 430 W. 7th Street, Suite 219166, Kansas City, MO 64105-1407), or by mail (1290 Funds, PO Box 219166, Kansas City, MO 64121-9166). All redemption requests will be processed and payment with respect thereto will normally be made within seven days after receipt of your request in good order.
The initial and subsequent minimums for purchasing shares of the Fund generally are as follows, although the Fund may reduce or waive the minimums in some cases: 
 
Class A
Class T
Class I
Class R
Minimum Initial Investment
$1,000 for all accounts
except:
• $500 for certain fee-based
programs.
$1,000 for all accounts
except:
• $500 for certain fee-based
programs.
• $1,000,000 for certain
institutions and individuals.
• $1,000 for certain
employees (or their
No minimum
1290 Diversified Bond Fund 11
 
Class A
Class T
Class I
Class R
 
• $500, if establishing an
Automatic Bank Draft Plan.
• $250 minimum for
purchases by accounts
through eligible financial
intermediary platforms
that have entered into
selling or service
agreements with the
Distributor and that are
eligible to purchase
Class A shares without a
sales charge.
• No minimum for certain
employer-sponsored
retirement plans and
certain wrap fee based
programs.
• $500, if establishing an
Automatic Bank Draft Plan.
• No minimum for certain
employer-sponsored
retirement plans and
certain wrap fee based
programs.
immediate family
members) of Equitable
Holdings, Inc. or its
subsidiaries.
• Class I shares are available
to clients of registered
investment advisers who
have $250,000 invested in
the Fund.
• No minimum investment
for a wrap account client
of an eligible broker-dealer
or a client of a fee-based
planner that is unaffiliated
with a broker-dealer, or a
client of an investment
adviser, trustee,
administrator or institution
acting in a similar capacity
that invests in the Fund
through a retirement plan
where the administrator or
service provider of such
retirement plan has
entered into a services
agreement with the Fund’s
distributor and/or
investment adviser.
 
Minimum Additional
Investment
$50 for all accounts
$50 for all accounts
No subsequent minimum
No subsequent minimum
Your financial intermediary may impose different investment minimums.
Tax Information
The Fund’s dividends and other distributions generally will be subject to federal income tax as ordinary income or long-term capital gains, unless you are a tax-exempt investor or are investing through a retirement plan or account; in the latter case, you may be subject to that tax upon withdrawal from the plan or account.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase shares of the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of Fund shares, shareholder services and other purposes. These payments create a conflict of interest by influencing the broker-dealer or other intermediary and your investment professional to recommend the Fund over another investment. Ask your financial adviser or visit your financial intermediary’s website for more information.
12 1290 Diversified Bond Fund
1290 Essex Small Cap Growth Fund  — Class A (ESCFX), Class T (ESCHX), Class I (ESCJX) and Class R (ESCKX) Shares
Investment Objective: Seeks long-term growth of capital.
Fees and Expenses of the Fund
The following table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table and example below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in 1290 Funds’ funds. More information about these and other discounts is available from your financial professional and in the “How Sales Charges are Calculated” and “Ways to Reduce or Eliminate Sales Charges” sections of the Fund’s Prospectus, and the “Purchase, Redemption and Pricing of Shares” section of the Fund’s Statement of Additional Information.  
 Shareholder Fees
 (fees paid directly from your investment)
 
1290 Essex Small Cap Growth Fund
Class A
Shares
Class T
Shares
Class I
Shares
Class R
Shares
Maximum sales charge (load) imposed on purchases (as a percentage of offering price)
5.50%
2.50%
None
None
Maximum contingent deferred sales charge (load) (as a percentage of original purchase price or redemption
proceeds, whichever is lower)
1.00%1
None
None
None
Maximum account fee (deducted from accounts with a balance of less than $1,000)
$25
$25
$25
$25
1 On shares purchased without an initial sales charge and redeemed within 12 months of purchase.  
 Annual Fund Operating Expenses
 (expenses that you pay each year as a percentage of the value of your investment)
 
1290 Essex Small Cap Growth Fund
Class A
Shares
Class T
Shares
Class I
Shares
Class R
Shares
Management Fee
0.75%
0.75%
0.75%
0.75%
Distribution and/or Service Fees (12b-1 fees)
0.25%
0.25%
0.00%
0.50%
Other Expenses1
4.74%
4.70%
4.70%
4.70%
Total Annual Fund Operating Expenses
5.74%
5.70%
5.45%
5.95%
Fee Waiver and/or Expense Reimbursement2
(4.61)%
(4.57)%
(4.57)%
(4.57)%
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement
1.13%
1.13%
0.88%
1.38%
1
Based on estimated amounts for the current fiscal year.
2
Pursuant to a contract, Equitable Investment Management, LLC (the “Adviser”) has agreed to make payments or waive its and its affiliates’ management, administrative and other fees to limit the expenses of the Fund through April 30, 2024 (unless the Board of Trustees consents to an earlier revision or termination of this arrangement) (“Expense Limitation Arrangement”) so that the annual operating expenses of the Fund (exclusive of taxes, interest, brokerage commissions, capitalized expenses (other than offering costs), fees and expenses of other investment companies in which the Fund invests, 12b-1 fees, dividend and interest expenses on securities sold short, and extraordinary expenses not incurred in the ordinary course of the Fund’s business) do not exceed an annual rate of average daily net assets of 0.88% for Class A shares, Class T shares, Class I shares, and Class R shares of the Fund. The Expense Limitation Arrangement may be terminated by the Adviser at any time after April 30, 2024. The Adviser may be reimbursed the amount of any such payments or waivers in the future provided that the payments or waivers are reimbursed within three years of the payments or waivers being recorded and the Fund’s expense ratio, after the reimbursement is taken into account, does not exceed the Fund’s expense cap at the time of the waiver or the Fund’s expense cap at the time of the reimbursement, whichever is lower. The total annual fund operating expense ratios after fee waiver and/or expense reimbursement for Class A shares, Class T shares, and Class R shares, as shown in the table, are higher than the Fund’s expense cap because these ratios include 12b-1 fees and certain other expenses, as noted above, that are excluded from the Expense Limitation Arrangement.
Example
This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds. The Example assumes that you invest $10,000 in the Fund for the periods indicated, that your investment has a 5% return each year, that the Fund's operating expenses remain the same and that the Expense Limitation Arrangement is not renewed.
1290 Essex Small Cap Growth Fund 13
Although your actual costs may be higher or lower, based on these assumptions, whether you redeem or hold your shares, your costs would be: 
 
1 Year
3 Years
Class A Shares
$659
$1,777
Class T Shares
$362
$1,509
Class I Shares
$90
$1,220
Class R Shares
$140
$1,362
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the Example, affect the Fund's performance. During the period July 11, 2022 (commencement of operations) through October 31, 2022, the Fund’s portfolio turnover rate was 29% of the average value of its portfolio.
Investments, Risks, and Performance
Principal Investment Strategy
Under normal circumstances, the Fund invests at least 80% of its net assets, plus borrowings for investment purposes, in equity securities of small- and micro-capitalization companies (or other financial instruments that derive their value from the securities of such companies). For the Fund, a company is considered to be a “small-capitalization” company if, at the time of purchase, its market capitalization is less than or equal to the market capitalization of the largest company included within the Russell 2000® Growth Index. As of December 31, 2022, the market capitalization of the largest company included in the Russell 2000® Growth Index was approximately $8.05 billion. This capitalization range will change over time. The Fund’s investments include U.S. micro-cap companies, which, at the time of purchase, have capitalizations that place them among the smallest 5% of companies listed on U.S. exchanges. Although the Sub-Adviser seeks to diversify the Fund’s investments across industries and sectors, the Fund’s assets may, from time to time, be over-weighted or under-weighted to certain industries and sectors relative to its benchmark index, and the Fund may from time to time invest a substantial portion of its assets in one or a limited number of sectors. The Fund’s investments may include common and preferred stocks, rights and warrants to purchase common stocks, convertible securities or real estate investment trusts. The Fund may invest up to 15% of its assets in foreign securities, including securities of companies based in developing countries and depositary receipts of foreign-based companies. The Fund may purchase put and call options on equity indexes and put and call options on exchange-traded funds tracking certain equity indexes to gain broad market exposure or for hedging purposes.
The Sub-Adviser applies fundamental investment research techniques when deciding which stocks to buy or sell for the Fund, and typically:
•  Selects companies that demonstrate accelerating growth in earnings and revenues that the Sub-Adviser believes are undervalued given their financial strength.
•  Invests in companies from any sector of the market based on fundamental research and analysis of various characteristics.
•  Reviews and evaluates a company’s financial statements, sales and expense trends, earnings estimates, market position, and industry outlook.
•  Values a company against its history, industry, and the market to identify a relatively undervalued stock as compared to its potential growth.
•  Seeks to diversify investments across companies in different phases of growth and that have a variety of catalysts for growth, to help manage risk. Such catalysts may include a new technology, product or service, an increase in market share, an improving industry, a change in management or a corporate restructuring.
The Fund may engage in active and frequent trading to achieve its investment objective. The Fund may sell all or a portion of a position in a security when the Sub-Adviser believes that a catalyst for growth is realized or adequate value is achieved, when the Sub-Adviser identifies a better investment opportunity, to minimize potential risks, to address a deterioration of
14 1290 Essex Small Cap Growth Fund
fundamentals, a change in management or operating strategy or the failure of a catalyst to develop, or for other investment reasons which the Sub-Adviser deems appropriate.
While the Fund’s overall portfolio will focus on small- and micro-capitalization companies, the Sub-Adviser may decide to keep a company’s stock if it has appreciated beyond the market capitalization of the largest company included in the Russell 2000® Growth Index, as described above.
Principal Risks
An investment in the Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The value of your investment may fall, sometimes sharply, and you could lose money by investing in the Fund. There can be no assurance that the Fund will achieve its investment objective.
The following risks can negatively affect the Fund’s performance. The most significant risks as of the date of this Prospectus are presented first, followed by additional principal risks in alphabetical order.
Market Risk —  The Fund is subject to the risk that the securities markets will move down, sometimes rapidly and unpredictably, based on overall economic conditions and other factors, which may negatively affect Fund performance. Securities markets also may experience long periods of decline in value. The value of a security may decline due to factors that are specifically related to a particular company, as well as general market conditions, such as real or perceived adverse economic or political conditions, inflation rates and/or investor expectations concerning such rates, changes in interest rates, recessions, or adverse investor sentiment generally. During a general downturn in the securities markets, multiple asset classes may decline in value simultaneously. Changes in the financial condition of a single issuer can impact a market as a whole.
Geopolitical events, including terrorism, tensions, war or other open conflicts between nations, or political or economic dysfunction within some nations that are global economic powers or major producers of oil, may lead to overall instability in world economies and markets generally and have led, and may in the future lead, to increased market volatility and may have adverse long-term effects. World markets, or those in a particular region, may all react in similar fashion to important economic, political or other developments. Events such as environmental and natural disasters or other catastrophes, public health crises (such as epidemics and pandemics), social unrest, and cybersecurity incidents, and governments’ reactions to such events, could cause uncertainty in the markets and may adversely affect the performance of the global economy. Impacts from climate change may include significant risks to global financial assets and economic growth. The extent and duration of such events and resulting market disruptions could be substantial and could magnify the impact of other risks to the Fund. The value and liquidity of the Fund’s investments may be negatively affected by developments in other countries and regions, whether or not the Fund invests in securities of issuers located in or with significant exposure to the countries or regions directly affected.
The U.S. Federal Reserve (“Fed”) has invested or otherwise made available substantial amounts of money to keep credit flowing through short-term money markets and has signaled that it will continue to adjust its operations as appropriate to support short-term money markets. Amid these efforts, concerns about the markets’ dependence on the Fed’s provision of liquidity have grown. Policy changes by the U.S. government and/or the Fed and political events within the United States may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree. A downgrade of the ratings of U.S. government debt obligations, or concerns about the U.S. government’s credit quality in general, could have a substantial negative effect on the U.S. and global economies. High public debt in the United States and other countries creates ongoing systemic and market risks and policymaking uncertainty.
In addition, markets and market participants are increasingly reliant on information data systems. Inaccurate data, 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.
Equity Risk —  In general, the values of stocks and other equity securities fluctuate, and sometimes widely fluctuate, in response to changes in a company’s financial condition as well as general market, economic and political conditions and other factors. The Fund may experience a significant or complete loss on its investment in an equity security. In addition, common stock prices may be particularly sensitive to rising interest rates, which increase borrowing costs and the costs of capital.
Small-Cap and Micro-Cap Company Risk —  Small-cap and micro-cap companies carry additional risks because the operating histories of these companies tend to be more limited, their earnings and revenues less predictable (and some companies may be experiencing significant losses), and their share prices more volatile than those of larger, more established companies. The shares of smaller companies tend to trade less frequently than those of larger, more established companies, which can adversely affect the pricing of these securities and the Fund’s ability to purchase or sell these securities. In general, these risks are greater for micro-cap companies than for small-cap companies.
1290 Essex Small Cap Growth Fund 15
Investment Style Risk —  The Fund may use a particular style or set of styles — in this case, a “growth” style — to select investments. A particular style may be out of favor or may not produce the best results over short or longer time periods. Growth stocks may be more sensitive to changes in current or expected earnings than the prices of other stocks. Growth investing also is subject to the risk that the stock price of one or more companies will fall or will fail to appreciate as anticipated by the Fund, regardless of movements in the securities market. Growth stocks also tend to be more volatile than value stocks, so in a declining market their prices may decrease more than value stocks in general. Growth stocks also may increase the volatility of the Fund’s share price.
Sector Risk —  From time to time, based on market or economic conditions, the Fund may have significant positions in one or more sectors of the market. To the extent the Fund invests more heavily in particular sectors, its performance will be especially sensitive to developments that significantly affect those sectors. Individual sectors may be more volatile, and may perform differently, than the broader market. The industries that constitute a sector may all react in the same way to economic, political or regulatory events.
Portfolio Management Risk —  The Fund is subject to the risk that strategies used by an investment manager and its securities selections fail to produce the intended results. An investment manager’s judgments or decisions about the quality, relative yield or value of, or market trends affecting, a particular security or issuer, industry, sector, region or market segment, or about the economy or interest rates, may be incorrect or otherwise may not produce the intended results, which may result in losses to the Fund. In addition, many processes used in Fund management, including security selection, rely, in whole or in part, on the use of various technologies. The Fund may suffer losses if there are imperfections, errors or limitations in the quantitative, analytic or other tools, resources, information and data used, or the analyses employed or relied on, by an investment manager, or if such tools, resources, information or data are used incorrectly, fail to produce the desired results, or otherwise do not work as intended. There can be no assurance that the use of these technologies will result in effective investment decisions for the Fund.
New Fund Risk —  The Fund is newly or recently established and has limited operating history. The Fund may not be successful in implementing its investment strategy, and there can be no assurance that the Fund will grow to or maintain an economically viable size, which could result in the Fund being liquidated at any time without shareholder approval and at a time that may not be favorable for all shareholders. Until the Fund is fully capitalized, it may be unable to pursue its investment objective or execute its principal investment strategies.
Convertible Securities Risk —  A convertible security is a form of hybrid security; that is, a security with both debt and equity characteristics. The value of a convertible security fluctuates in relation to changes in interest rates and the credit quality of the issuer and also fluctuates in relation to changes in the price of the underlying common stock. A convertible security may be subject to redemption at the option of the issuer at a price established in the convertible security’s governing instrument, which may be less than the current market price of the security. If a convertible security held by the Fund is called for redemption, the Fund will be required to permit the issuer to redeem the security, convert it into underlying common stock or sell it to a third party. Convertible securities are subject to equity risk, interest rate risk and credit risk and are often lower-quality securities. Lower quality may lead to greater volatility in the price of a security and may negatively affect a security’s liquidity. Since it derives a portion of its value from the common stock into which it may be converted, a convertible security is also subject to the same types of market and issuer-specific risks that apply to the underlying common stock.
Derivatives Risk —  The Fund's investments in derivatives may rise or fall in value more rapidly than other investments and may reduce the Fund's returns and increase the volatility of the Fund's net asset value. Investing in derivatives involves investment techniques and risk analyses different from, and risks in some respects greater than, those associated with investing in more traditional investments, such as stocks and bonds. Derivatives may be leveraged such that a small investment can have a significant impact on the Fund's exposure to stock market values, interest rates, or other investments. As a result, a relatively small price movement in a derivatives contract may cause an immediate and substantial loss, and the Fund could lose more than the amount it invested. Some derivatives can have the potential for unlimited losses. In addition, it may be difficult or impossible for the Fund to purchase or sell certain derivatives in sufficient amounts to achieve the desired level of exposure, or to terminate or offset existing arrangements, which may result in a loss or may be costly to the Fund. Some derivatives are more sensitive to market price fluctuations and to interest rate changes than other investments. Derivatives may not behave as anticipated by the Fund, and derivatives strategies that are successful under certain market conditions may be less successful or unsuccessful under other market conditions. The Fund also may be exposed to losses if the counterparty in the transaction is unable or unwilling to fulfill its contractual obligation. In certain cases, the Fund may be hindered or delayed in exercising remedies against or closing out derivatives with a counterparty, resulting in additional losses. Derivatives also may be subject to the risk of mispricing or improper valuation, and valuation may be more difficult in times of market turmoil. Changes to the regulation of derivatives markets and mutual funds’ use of derivatives may impact the Fund's ability to maintain its investments in derivatives, make derivatives more costly, limit their availability, adversely affect their value or performance, or otherwise disrupt markets.
Foreign Securities Risk —  Investments in foreign securities, including depositary receipts, involve risks in addition to those associated with investments in U.S. securities. Foreign markets may be less liquid, more volatile and subject to less government supervision
16 1290 Essex Small Cap Growth Fund
and regulation than U.S. markets, and it may take more time to clear and settle trades involving foreign securities, which could negatively impact the Fund's investments and cause it to lose money. Security values also may be negatively affected by changes in the exchange rates between the U.S. dollar and foreign currencies. Differences between U.S. and foreign legal, political and economic systems, regulatory regimes and market practices, as well as trade barriers and other protectionist trade policies (including those of the United States), governmental instability, war, or other political or economic actions, also may adversely impact security values. Foreign securities are also subject to the risks associated with the potential imposition of economic or other sanctions against a particular foreign country, its nationals, businesses or industries. World markets, or those in a particular region, may all react in similar fashion to important economic, political or other developments. Events and evolving conditions in certain economies or markets may alter the risks associated with investments tied to countries or regions that historically were perceived as comparatively stable and make such investments riskier and more volatile. Regardless of where a company is organized or its stock is traded, its performance may be significantly affected by events in regions from which it derives its profits or in which it conducts significant operations.
Emerging Markets Risk —  The risks associated with investments in emerging market countries often are significant, and vary from jurisdiction to jurisdiction and company to company. Investments in emerging market countries are more susceptible to loss than investments in more developed foreign countries and may present market, credit, currency, liquidity, legal, political, technical and other risks different from, or greater than, the risks of investing in more developed foreign countries. Emerging market countries may be more likely to experience rapid and significant adverse developments in their political or economic structures, intervene in financial markets, restrict foreign investments, impose high withholding or other taxes on foreign investments, impose restrictive exchange control regulations, or nationalize or expropriate the assets of private companies, which may have negative impacts on transaction costs, market price, investment returns and the legal rights and remedies available to the Fund. In addition, the securities markets of emerging market countries generally are smaller, less liquid and more volatile than those of more developed foreign countries, and emerging market countries often have less uniformity in regulatory, accounting, auditing and financial reporting requirements or standards, which may impact the availability and quality of information about issuers, and less reliable clearance and settlement, registration and custodial procedures. Emerging market countries also may be subject to high inflation and rapid currency devaluations, and currency-hedging techniques may be unavailable in certain emerging market countries. In addition, some emerging market countries may be heavily dependent on international trade, which can materially affect their securities markets. Securities of issuers traded on foreign exchanges may be suspended. The likelihood of such suspensions may be higher for securities of issuers in emerging market countries than in countries with more developed markets.
Large Transaction Risk —  A significant percentage of the Fund’s shares may be owned or controlled by the Adviser and its affiliates, other funds advised by the Adviser (including funds of funds), or other large shareholders. Accordingly, the Fund is subject to the potential for large-scale inflows and outflows as a result of purchases and redemptions of its shares by such shareholders. These inflows and outflows could negatively affect the Fund’s net asset value and performance.
Portfolio Turnover Risk —  High portfolio turnover (generally, turnover in excess of 100% in any given fiscal year) may result in increased transaction costs to the Fund, which may result in higher fund expenses and lower total return.
Preferred Stock Risk —  Preferred stock is subject to many of the risks associated with debt securities, including interest rate risk. Unlike interest payments on debt securities, dividends on preferred stock are generally payable at the discretion of the issuer’s board of directors. Preferred shareholders may have certain rights if dividends are not paid but generally have no legal recourse against the issuer. Shareholders may suffer a loss of value if dividends are not paid. In certain situations an issuer may call or redeem its preferred stock or convert it to common stock. The market prices of preferred stocks are generally more sensitive to actual or perceived changes in the issuer’s financial condition or prospects than are the prices of debt securities.
Real Estate Investing Risk —  Real estate-related investments may decline in value as a result of factors affecting the overall real estate industry. Real estate is a cyclical business, highly sensitive to supply and demand, general and local economic developments and characterized by intense competition and periodic overbuilding. Real estate income and values also may be greatly affected by demographic trends, such as population shifts or changing tastes and values. For example, the coronavirus disease (COVID-19) pandemic has impacted certain real estate sectors by accelerating the trend towards online shopping and remote-working environments. Losses may occur from casualty or condemnation, and government actions, such as tax law changes, zoning law changes, regulatory limitations on rents, or environmental regulations, also may have a major impact on real estate. The availability of mortgages and changes in interest rates may also affect real estate values. Changing interest rates and credit quality requirements also will affect the cash flow of real estate companies and their ability to meet capital needs. In addition, global climate change may have an adverse effect on property and security values and may exacerbate the risks of natural disasters.
Real estate investment trusts (“REITs”) generally invest directly in real estate (equity REITs), in mortgages secured by interests in real estate (mortgage REITs) or in some combination of the two (hybrid REITs). Investing in REITs exposes investors to the risks of owning real estate directly, as well as to risks that relate specifically to the way in which REITs are organized and operated. Equity REITs may
1290 Essex Small Cap Growth Fund 17
be affected by changes in the value of the underlying property owned by the REIT, while mortgage REITs may be affected by the quality of any credit extended. Equity and mortgage REITs are also subject to heavy cash flow dependency, defaults by borrowers, and self-liquidations. The risk of defaults is generally higher in the case of mortgage pools that include subprime mortgages involving borrowers with blemished credit histories.
Operating REITs requires specialized management skills, and a portfolio that invests in REITs indirectly bears REIT management and administration expenses along with the direct expenses of the portfolio. Individual REITs may own a limited number of properties and may concentrate in a particular region or property type. Domestic REITs also must satisfy specific Internal Revenue Code requirements to qualify for the tax-free pass-through of net investment income and net realized gains distributed to shareholders. Failure to meet these requirements may have adverse consequences on the Fund. In addition, even the larger REITs in the industry tend to be small- to medium-sized companies in relation to the equity markets as a whole. Moreover, shares of REITs may trade less frequently and, therefore, are subject to more erratic price movements than securities of larger issuers.
Risk/Return Bar Chart and Table
Performance information will be available in the Prospectus after the Fund has been in operation for one full calendar year.
Who Manages the Fund
Investment Adviser: Equitable Investment Management, LLC (the “Adviser”)
Portfolio Managers:  The members of the team that are jointly and primarily responsible for the selection, monitoring and oversight of the Fund’s Sub-Adviser are: 
Name
Title
Date Began
Managing
the Fund
Kenneth T. Kozlowski, CFP®, CLU, ChFC
Executive Vice President and Chief Investment
Officer of the Adviser
July 2022
Alwi Chan, CFA®
Senior Vice President and Deputy Chief
Investment Officer of the Adviser
July 2022
Sub-Adviser: Essex Investment Management Company, LLC (“Essex”)
Portfolio Manager:  The individual primarily responsible for the securities selection, research and trading for the Fund is: 
Name
Title
Date Began
Managing
the Fund
Nancy Prial, CFA®
Co-Chief Executive Officer and Senior Portfolio
Manager of Essex
July 2022
The Adviser is responsible for overseeing Sub-Advisers and recommending their hiring, termination and replacement to the Board of Trustees. The Adviser has been granted relief by the Securities and Exchange Commission to hire, terminate and replace Sub-Advisers and amend sub-advisory agreements subject to the approval of the Board of Trustees and without obtaining shareholder approval. However, the Adviser may not enter into a sub-advisory agreement on behalf of the Fund with an “affiliated person” of the Adviser unless the sub-advisory agreement is approved by the Fund's shareholders. The relief does not extend to any increase in the advisory fee paid by the Fund to the Adviser; any such increase would be subject to shareholder approval.
Purchase and Redemption of Fund Shares
You may purchase and redeem shares of the Fund each day the New York Stock Exchange is open for trading at the Fund’s net asset value determined after receipt of your request in good order, subject to any applicable sales charge. All share classes are currently not offered for sale in all states. Initial purchases must be effected through your financial intermediary. Subsequently, you may purchase or redeem shares either by having your financial intermediary process your purchase or redemption, or by telephone (1-888-310-0416), by overnight mail (1290 Funds, c/o SS&C GIDS, Inc., 430 W. 7th Street, Suite 219166, Kansas City, MO 64105-1407), or by mail (1290 Funds, PO Box 219166, Kansas City, MO 64121-9166). All
18 1290 Essex Small Cap Growth Fund
redemption requests will be processed and payment with respect thereto will normally be made within seven days after receipt of your request in good order.
The initial and subsequent minimums for purchasing shares of the Fund generally are as follows, although the Fund may reduce or waive the minimums in some cases: 
 
Class A
Class T
Class I
Class R
Minimum Initial Investment
$1,000 for all accounts
except:
• $500 for certain fee-based
programs.
• $500, if establishing an
Automatic Bank Draft Plan.
• $250 minimum for
purchases by accounts
through eligible financial
intermediary platforms
that have entered into
selling or service
agreements with the
Distributor and that are
eligible to purchase
Class A shares without a
sales charge.
• No minimum for certain
employer-sponsored
retirement plans and
certain wrap fee based
programs.
$1,000 for all accounts
except:
• $500 for certain fee-based
programs.
• $500, if establishing an
Automatic Bank Draft Plan.
• No minimum for certain
employer-sponsored
retirement plans and
certain wrap fee based
programs.
• $1,000,000 for certain
institutions and individuals.
• $1,000 for certain
employees (or their
immediate family
members) of Equitable
Holdings, Inc. or its
subsidiaries.
• Class I shares are available
to clients of registered
investment advisers who
have $250,000 invested in
the Fund.
• No minimum investment
for a wrap account client
of an eligible broker-dealer
or a client of a fee-based
planner that is unaffiliated
with a broker-dealer, or a
client of an investment
adviser, trustee,
administrator or institution
acting in a similar capacity
that invests in the Fund
through a retirement plan
where the administrator or
service provider of such
retirement plan has
entered into a services
agreement with the Fund’s
distributor and/or
investment adviser.
No minimum
Minimum Additional
Investment
$50 for all accounts
$50 for all accounts
No subsequent minimum
No subsequent minimum
Your financial intermediary may impose different investment minimums.
Tax Information
The Fund’s dividends and other distributions generally will be subject to federal income tax as ordinary income or long-term capital gains, unless you are a tax-exempt investor or are investing through a retirement plan or account; in the latter case, you may be subject to that tax upon withdrawal from the plan or account.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase shares of the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of Fund shares, shareholder services and other purposes. These payments create a conflict of interest by influencing the broker-dealer or other intermediary and your investment professional to recommend the Fund over another investment. Ask your financial adviser or visit your financial intermediary’s website for more information.
1290 Essex Small Cap Growth Fund 19
1290 GAMCO Small/Mid Cap Value Fund  — Class A (TNVAX), Class T (TNVCX), Class I (TNVIX) and Class R (TNVRX) Shares
Investment Objective: Seeks to maximize capital appreciation.
Fees and Expenses of the Fund
The following table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table and example below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in 1290 Funds’ funds. More information about these and other discounts is available from your financial professional and in the “How Sales Charges are Calculated” and “Ways to Reduce or Eliminate Sales Charges” sections of the Fund’s Prospectus, and the “Purchase, Redemption and Pricing of Shares” section of the Fund’s Statement of Additional Information.  
 Shareholder Fees
 (fees paid directly from your investment)
 
1290 GAMCO Small/Mid Cap Value Fund
Class A
Shares
Class T
Shares
Class I
Shares
Class R
Shares
Maximum sales charge (load) imposed on purchases (as a percentage of offering price)
5.50%
2.50%
None
None
Maximum contingent deferred sales charge (load) (as a percentage of original purchase price or redemption
proceeds, whichever is lower)
1.00%1
None
None
None
Maximum account fee (deducted from accounts with a balance of less than $1,000)
$25
$25
$25
$25
1 On shares purchased without an initial sales charge and redeemed within 12 months of purchase.  
 Annual Fund Operating Expenses
 (expenses that you pay each year as a percentage of the value of your investment)
 
1290 GAMCO Small/Mid Cap Value Fund
Class A
Shares
Class T
Shares
Class I
Shares
Class R
Shares
Management Fee
0.75%
0.75%
0.75%
0.75%
Distribution and/or Service Fees (12b-1 fees)
0.25%
0.25%
0.00%
0.50%
Other Expenses
0.51%
0.51%
0.50%
0.51%
Total Annual Fund Operating Expenses
1.51%
1.51%
1.25%
1.76%
Fee Waiver and/or Expense Reimbursement1,2
(0.31)%
(0.31)%
(0.30)%
(0.31)%
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement
1.20%
1.20%
0.95%
1.45%
1
Pursuant to a contract, Equitable Investment Management, LLC (the “Adviser”) has agreed to make payments or waive its and its affiliates’ management, administrative and other fees to limit the expenses of the Fund through April 30, 2024 (unless the Board of Trustees consents to an earlier revision or termination of this arrangement) (“Expense Limitation Arrangement”) so that the annual operating expenses (including Acquired Fund Fees and Expenses) of the Fund (exclusive of taxes, interest, brokerage commissions, capitalized expenses (other than offering costs), 12b-1 fees, dividend and interest expenses on securities sold short, and extraordinary expenses not incurred in the ordinary course of the Fund’s business) do not exceed an annual rate of average daily net assets of 0.95% for Class A shares, Class T shares, Class I shares, and Class R shares of the Fund. The Expense Limitation Arrangement may be terminated by the Adviser at any time after April 30, 2024. The Adviser may be reimbursed the amount of any such payments or waivers in the future provided that the payments or waivers are reimbursed within three years of the payments or waivers being recorded and the Fund’s expense ratio, after the reimbursement is taken into account, does not exceed the Fund’s expense cap at the time of the waiver or the Fund’s expense cap at the time of the reimbursement, whichever is lower. The total annual fund operating expense ratios after fee waiver and/or expense reimbursement for Class A shares, Class T shares, and Class R shares, as shown in the table, are higher than the Fund’s expense cap because these ratios include 12b-1 fees and certain other expenses, as noted above, that are excluded from the Expense Limitation Arrangement.
2
Fee Waiver and/or Expense Reimbursement information has been restated to reflect the current Expense Limitation Arrangement.
Example
This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds. The Example assumes that you invest $10,000 in the Fund for the periods indicated, that your investment has a 5% return each year, that the Fund's operating expenses remain the same and that the Expense Limitation Arrangement is not renewed.
20 1290 GAMCO Small/Mid Cap Value Fund
Although your actual costs may be higher or lower, based on these assumptions, whether you redeem or hold your shares, your costs would be: 
 
1 Year
3 Years
5 Years
10 Years
Class A Shares
$666
$972
$1,301
$2,227
Class T Shares
$369
$686
$1,024
$1,981
Class I Shares
$97
$367
$657
$1,485
Class R Shares
$148
$524
$925
$2,048
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the Example, affect the Fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 27% of the average value of its portfolio.
Investments, Risks, and Performance
Principal Investment Strategy
Under normal circumstances, the Fund invests at least 80% of its net assets, plus borrowings for investment purposes, in securities of small- and mid-capitalization companies. For the Fund, small-capitalization companies generally are companies with a market capitalization less than $3 billion at the time of investment, and mid-capitalization companies generally are companies with a market capitalization between $3 billion and $12 billion at the time of investment.
The Fund invests primarily in common stocks, but it also may invest in other securities that GAMCO Asset Management Inc. (“GAMCO” or the “Sub-Adviser”) believes provide opportunities for capital growth, such as preferred stocks and warrants. The Fund also may invest up to 20% of its net assets in foreign securities.
GAMCO utilizes a value-oriented investment style that emphasizes companies deemed to be currently underpriced according to certain financial measurements, which may include price-to-earnings and price-to-book ratios. The Sub-Adviser utilizes a process of fundamental analysis that involves researching and evaluating individual companies for potential investment by the Fund. The Sub-Adviser uses a proprietary research technique to determine which stocks have a market price that is less than the “private market value” or what an informed investor would pay for the company. This approach will often lead the Fund to focus on “strong companies” in out-of-favor sectors or out-of-favor companies exhibiting a catalyst for change. The Sub-Adviser may sell a security for a variety of reasons, such as because it becomes overvalued or shows deteriorating fundamentals.
Principal Risks
An investment in the Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The value of your investment may fall, sometimes sharply, and you could lose money by investing in the Fund. There can be no assurance that the Fund will achieve its investment objective.
The following risks can negatively affect the Fund’s performance. The most significant risks as of the date of this Prospectus are presented first, followed by additional principal risks in alphabetical order.
Market Risk —  The Fund is subject to the risk that the securities markets will move down, sometimes rapidly and unpredictably, based on overall economic conditions and other factors, which may negatively affect Fund performance. Securities markets also may experience long periods of decline in value. The value of a security may decline due to factors that are specifically related to a particular company, as well as general market conditions, such as real or perceived adverse economic or political conditions, inflation rates and/or investor expectations concerning such rates, changes in interest rates, recessions, or adverse investor sentiment generally. During a general downturn in the securities markets, multiple asset classes may decline in value simultaneously. Changes in the financial condition of a single issuer can impact a market as a whole.
Geopolitical events, including terrorism, tensions, war or other open conflicts between nations, or political or economic dysfunction within some nations that are global economic powers or major producers of oil, may lead to overall instability in world economies and markets generally and have led, and may in the future lead, to increased market volatility and may have adverse long-term effects. World markets, or those in a particular region, may all react in similar fashion to important economic, political or other
1290 GAMCO Small/Mid Cap Value Fund 21
developments. Events such as environmental and natural disasters or other catastrophes, public health crises (such as epidemics and pandemics), social unrest, and cybersecurity incidents, and governments’ reactions to such events, could cause uncertainty in the markets and may adversely affect the performance of the global economy. Impacts from climate change may include significant risks to global financial assets and economic growth. The extent and duration of such events and resulting market disruptions could be substantial and could magnify the impact of other risks to the Fund. The value and liquidity of the Fund’s investments may be negatively affected by developments in other countries and regions, whether or not the Fund invests in securities of issuers located in or with significant exposure to the countries or regions directly affected.
The U.S. Federal Reserve (“Fed”) has invested or otherwise made available substantial amounts of money to keep credit flowing through short-term money markets and has signaled that it will continue to adjust its operations as appropriate to support short-term money markets. Amid these efforts, concerns about the markets’ dependence on the Fed’s provision of liquidity have grown. Policy changes by the U.S. government and/or the Fed and political events within the United States may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree. A downgrade of the ratings of U.S. government debt obligations, or concerns about the U.S. government’s credit quality in general, could have a substantial negative effect on the U.S. and global economies. High public debt in the United States and other countries creates ongoing systemic and market risks and policymaking uncertainty.
In addition, markets and market participants are increasingly reliant on information data systems. Inaccurate data, 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.
Equity Risk —  In general, the values of stocks and other equity securities fluctuate, and sometimes widely fluctuate, in response to changes in a company’s financial condition as well as general market, economic and political conditions and other factors. The Fund may experience a significant or complete loss on its investment in an equity security. In addition, common stock prices may be particularly sensitive to rising interest rates, which increase borrowing costs and the costs of capital.
Mid-Cap and Small-Cap Company Risk —  Mid-cap and small-cap companies carry additional risks because the operating histories of these companies tend to be more limited, their earnings and revenues less predictable (and some companies may be experiencing significant losses), and their share prices more volatile than those of larger, more established companies, all of which can negatively affect their value. In general, these risks are greater for small-cap companies than for mid-cap companies.
Investment Style Risk —  The Fund may use a particular style or set of styles — in this case, a “value” style — to select investments. A particular style may be out of favor or may not produce the best results over short or longer time periods. Value stocks are subject to the risks that, notwithstanding that a stock is selling at a discount to its perceived true worth, the stock’s full value may never be fully recognized or realized by the market, or its price may go down. In addition, there is the risk that a stock judged to be undervalued may actually have been appropriately priced at the time of investment.
Sector Risk —  From time to time, based on market or economic conditions, the Fund may have significant positions in one or more sectors of the market. To the extent the Fund invests more heavily in particular sectors, its performance will be especially sensitive to developments that significantly affect those sectors. Individual sectors may be more volatile, and may perform differently, than the broader market. The industries that constitute a sector may all react in the same way to economic, political or regulatory events.
Portfolio Management Risk —  The Fund is subject to the risk that strategies used by an investment manager and its securities selections fail to produce the intended results. An investment manager’s judgments or decisions about the quality, relative yield or value of, or market trends affecting, a particular security or issuer, industry, sector, region or market segment, or about the economy or interest rates, may be incorrect or otherwise may not produce the intended results, which may result in losses to the Fund. In addition, many processes used in Fund management, including security selection, rely, in whole or in part, on the use of various technologies. The Fund may suffer losses if there are imperfections, errors or limitations in the quantitative, analytic or other tools, resources, information and data used, or the analyses employed or relied on, by an investment manager, or if such tools, resources, information or data are used incorrectly, fail to produce the desired results, or otherwise do not work as intended. There can be no assurance that the use of these technologies will result in effective investment decisions for the Fund.
Foreign Securities Risk —  Investments in foreign securities involve risks in addition to those associated with investments in U.S. securities. Foreign markets may be less liquid, more volatile and subject to less government supervision and regulation than U.S. markets, and it may take more time to clear and settle trades involving foreign securities, which could negatively impact the Fund's investments and cause it to lose money. Security values also may be negatively affected by changes in the exchange rates between the U.S. dollar and foreign currencies. Differences between U.S. and foreign legal, political and economic systems, regulatory regimes and market practices, as well as trade barriers and other protectionist trade policies (including those of the United States), governmental instability, war, or other political or economic actions, also may adversely impact security values. Foreign securities are also subject to the risks associated with the potential imposition of economic or other sanctions against a particular foreign country,
22 1290 GAMCO Small/Mid Cap Value Fund
its nationals, businesses or industries. World markets, or those in a particular region, may all react in similar fashion to important economic, political or other developments. Events and evolving conditions in certain economies or markets may alter the risks associated with investments tied to countries or regions that historically were perceived as comparatively stable and make such investments riskier and more volatile. Regardless of where a company is organized or its stock is traded, its performance may be significantly affected by events in regions from which it derives its profits or in which it conducts significant operations.
Currency Risk —  Investments that are denominated in or that provide exposure to foreign currencies are subject to the risk that those currencies will decline in value relative to the U.S. dollar. Any such decline may erode or reverse any potential gains from an investment in securities denominated in foreign currency or may widen existing loss. In the case of hedging positions, there is the risk that the U.S. dollar will decline in value relative to the currency being hedged. Currency rates may fluctuate significantly over short periods of time.
Preferred Stock Risk —  Preferred stock is subject to many of the risks associated with debt securities, including interest rate risk. Unlike interest payments on debt securities, dividends on preferred stock are generally payable at the discretion of the issuer’s board of directors. Preferred shareholders may have certain rights if dividends are not paid but generally have no legal recourse against the issuer. Shareholders may suffer a loss of value if dividends are not paid. In certain situations an issuer may call or redeem its preferred stock or convert it to common stock. The market prices of preferred stocks are generally more sensitive to actual or perceived changes in the issuer’s financial condition or prospects than are the prices of debt securities.
Risk/Return Bar Chart and Table
The bar chart and table below provide some indication of the risks of investing in the Fund by showing changes in the Fund's performance from year to year and by showing how the Fund's average annual total returns for the past one-year, five-year and since inception periods through December 31, 2022, compared to the returns of a broad-based securities market index. The return of the broad-based securities market index (and any additional comparative index) shown for the since inception period below is the return of the index since the inception of the share class with the longest history. Past performance (before and after taxes) is not an indication of future performance.
The performance results shown in the bar chart do not reflect any sales charges or account fees, which would reduce the performance results.
The performance of Class T shares for periods prior to March 1, 2017 has been adjusted to reflect the current sales charges applicable to Class T shares.  
 Calendar Year Annual Total Returns — Class I
  
Best quarter (% and time period)
28.43%
2020 4th Quarter
Worst quarter (% and time period)
-34.81%
2020 1st Quarter
1290 GAMCO Small/Mid Cap Value Fund 23
  
 Average Annual Total Returns
 
 
One
Year
Five
Years
Since
Inception
Inception
Date
1290 GAMCO Small/Mid Cap Value Fund - Class I
Return Before Taxes
-11.37%
4.28%
7.15%
11/12/2014
1290 GAMCO Small/Mid Cap Value Fund - Class I
Return After Taxes on Distributions
-11.91%
3.45%
6.22%
11/12/2014
1290 GAMCO Small/Mid Cap Value Fund - Class I
Return After Taxes on Distributions and Sale of Fund Shares
-6.39%
3.13%
5.38%
11/12/2014
1290 GAMCO Small/Mid Cap Value Fund - Class A
Return Before Taxes
-16.46%
2.85%
6.15%
11/12/2014
1290 GAMCO Small/Mid Cap Value Fund - Class R
Return Before Taxes
-11.83%
3.76%
6.62%
11/12/2014
1290 GAMCO Small/Mid Cap Value Fund - Class T
Return Before Taxes
-13.63%
3.75%
6.81%
11/12/2014
Russell 2500® Value Index (reflects no deduction for fees, expenses, or taxes)
-13.08%
4.75%
6.41%
 
After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs). The returns after taxes on distributions and sale of Fund shares may be higher than other returns for the same period due to an assumed tax benefit from any losses on a sale of Fund shares at the end of the measurement period. After-tax returns are shown only for Class I shares. After-tax returns for other Classes may vary.
Who Manages the Fund
Investment Adviser: Equitable Investment Management, LLC (the “Adviser”)
Portfolio Managers:  The members of the team that are jointly and primarily responsible for the selection, monitoring and oversight of the Fund’s Sub-Adviser are: 
Name
Title
Date Began
Managing
the Fund
Kenneth T. Kozlowski, CFP®, CLU, ChFC
Executive Vice President and Chief Investment
Officer of the Adviser
November 2014
Alwi Chan, CFA®
Senior Vice President and Deputy Chief
Investment Officer of the Adviser
November 2014
Sub-Adviser: GAMCO Asset Management, Inc. (“GAMCO”)
Portfolio Manager:  The individual primarily responsible for the securities selection, research and trading for the Fund is: 
Name
Title
Date Began
Managing
the Fund
Mario J. Gabelli
Chief Executive Officer and Chief Investment
Officer of Value Portfolios of GAMCO
November 2014
The Adviser is responsible for overseeing Sub-Advisers and recommending their hiring, termination and replacement to the Board of Trustees. The Adviser has been granted relief by the Securities and Exchange Commission to hire, terminate and replace Sub-Advisers and amend sub-advisory agreements subject to the approval of the Board of Trustees and without obtaining shareholder approval. However, the Adviser may not enter into a sub-advisory agreement on behalf of the Fund with an “affiliated person” of the Adviser unless the sub-advisory agreement is approved by the Fund's shareholders. The relief does not extend to any increase in the advisory fee paid by the Fund to the Adviser; any such increase would be subject to shareholder approval.
24 1290 GAMCO Small/Mid Cap Value Fund
Purchase and Redemption of Fund Shares
You may purchase and redeem shares of the Fund each day the New York Stock Exchange is open for trading at the Fund’s net asset value determined after receipt of your request in good order, subject to any applicable sales charge. All share classes are currently not offered for sale in all states. Initial purchases must be effected through your financial intermediary. Subsequently, you may purchase or redeem shares either by having your financial intermediary process your purchase or redemption, or by telephone (1-888-310-0416), by overnight mail (1290 Funds, c/o SS&C GIDS, Inc., 430 W. 7th Street, Suite 219166, Kansas City, MO 64105-1407), or by mail (1290 Funds, PO Box 219166, Kansas City, MO 64121-9166). All redemption requests will be processed and payment with respect thereto will normally be made within seven days after receipt of your request in good order.
The initial and subsequent minimums for purchasing shares of the Fund generally are as follows, although the Fund may reduce or waive the minimums in some cases: 
 
Class A
Class T
Class I
Class R
Minimum Initial Investment
$1,000 for all accounts
except:
• $500 for certain fee-based
programs.
• $500, if establishing an
Automatic Bank Draft Plan.
• $250 minimum for
purchases by accounts
through eligible financial
intermediary platforms
that have entered into
selling or service
agreements with the
Distributor and that are
eligible to purchase
Class A shares without a
sales charge.
• No minimum for certain
employer-sponsored
retirement plans and
certain wrap fee based
programs.
$1,000 for all accounts
except:
• $500 for certain fee-based
programs.
• $500, if establishing an
Automatic Bank Draft Plan.
• No minimum for certain
employer-sponsored
retirement plans and
certain wrap fee based
programs.
• $1,000,000 for certain
institutions and individuals.
• $1,000 for certain
employees (or their
immediate family
members) of Equitable
Holdings, Inc. or its
subsidiaries.
• Class I shares are available
to clients of registered
investment advisers who
have $250,000 invested in
the Fund.
• No minimum investment
for a wrap account client
of an eligible broker-dealer
or a client of a fee-based
planner that is unaffiliated
with a broker-dealer, or a
client of an investment
adviser, trustee,
administrator or institution
acting in a similar capacity
that invests in the Fund
through a retirement plan
where the administrator or
service provider of such
retirement plan has
entered into a services
agreement with the Fund’s
distributor and/or
investment adviser.
No minimum
Minimum Additional
Investment
$50 for all accounts
$50 for all accounts
No subsequent minimum
No subsequent minimum
Your financial intermediary may impose different investment minimums.
Tax Information
The Fund’s dividends and other distributions generally will be subject to federal income tax as ordinary income or long-term capital gains, unless you are a tax-exempt investor or are investing through a retirement plan or account; in the latter case, you may be subject to that tax upon withdrawal from the plan or account.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase shares of the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of Fund shares, shareholder services and other purposes. These payments create a conflict of interest by influencing the broker-dealer or other intermediary and your investment
1290 GAMCO Small/Mid Cap Value Fund 25
professional to recommend the Fund over another investment. Ask your financial adviser or visit your financial intermediary’s website for more information.
26 1290 GAMCO Small/Mid Cap Value Fund
1290 High Yield Bond Fund  — Class A (TNHAX), Class T (TNHCX), Class I (TNHIX) and Class R (TNHRX) Shares
Investment Objective: Seeks to maximize current income.
Fees and Expenses of the Fund
The following table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table and example below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in 1290 Funds’ funds. More information about these and other discounts is available from your financial professional and in the “How Sales Charges are Calculated” and “Ways to Reduce or Eliminate Sales Charges” sections of the Fund’s Prospectus, and the “Purchase, Redemption and Pricing of Shares” section of the Fund’s Statement of Additional Information.  
 Shareholder Fees
 (fees paid directly from your investment)
 
1290 High Yield Bond Fund
Class A
Shares
Class T
Shares
Class I
Shares
Class R
Shares
Maximum sales charge (load) imposed on purchases (as a percentage of offering price)
4.50%
2.50%
None
None
Maximum contingent deferred sales charge (load) (as a percentage of original purchase price or redemption
proceeds, whichever is lower)
1.00%1
None
None
None
Maximum account fee (deducted from accounts with a balance of less than $1,000)
$25
$25
$25
$25
1 On shares purchased without an initial sales charge and redeemed within 12 months of purchase.  
 Annual Fund Operating Expenses
 (expenses that you pay each year as a percentage of the value of your investment)
 
1290 High Yield Bond Fund
Class A
Shares
Class T
Shares
Class I
Shares
Class R
Shares
Management Fee
0.60%
0.60%
0.60%
0.60%
Distribution and/or Service Fees (12b-1 fees)
0.25%
0.25%
0.00%
0.50%
Other Expenses
0.58%
0.58%
0.58%
0.57%
Total Annual Fund Operating Expenses
1.43%
1.43%
1.18%
1.67%
Fee Waiver and/or Expense Reimbursement1
(0.43)%
(0.43)%
(0.43)%
(0.42)%
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement
1.00%
1.00%
0.75%
1.25%
1
Pursuant to a contract, Equitable Investment Management, LLC (the “Adviser”) has agreed to make payments or waive its and its affiliates’ management, administrative and other fees to limit the expenses of the Fund through April 30, 2024 (unless the Board of Trustees consents to an earlier revision or termination of this arrangement) (“Expense Limitation Arrangement”) so that the annual operating expenses of the Fund (exclusive of taxes, interest, brokerage commissions, capitalized expenses (other than offering costs), fees and expenses of other investment companies in which the Fund invests, 12b-1 fees, dividend and interest expenses on securities sold short, and extraordinary expenses not incurred in the ordinary course of the Fund’s business) do not exceed an annual rate of average daily net assets of 0.75% for Class A shares, Class T shares, Class I shares, and Class R shares of the Fund. The Expense Limitation Arrangement may be terminated by the Adviser at any time after April 30, 2024. The Adviser may be reimbursed the amount of any such payments or waivers in the future provided that the payments or waivers are reimbursed within three years of the payments or waivers being recorded and the Fund’s expense ratio, after the reimbursement is taken into account, does not exceed the Fund’s expense cap at the time of the waiver or the Fund’s expense cap at the time of the reimbursement, whichever is lower. The total annual fund operating expense ratios after fee waiver and/or expense reimbursement for Class A shares, Class T shares, and Class R shares, as shown in the table, are higher than the Fund’s expense cap because these ratios include 12b-1 fees and certain other expenses, as noted above, that are excluded from the Expense Limitation Arrangement.
Example
This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds. The Example assumes that you invest $10,000 in the Fund for the periods indicated, that your investment has a 5% return each year, that the Fund's operating expenses remain the same and that the Expense Limitation Arrangement is not renewed. Although your actual costs may be higher or lower, based on these assumptions, whether you redeem or hold your shares, your costs would be: 
 
1 Year
3 Years
5 Years
10 Years
Class A Shares
$547
$842
$1,157
$2,051
1290 High Yield Bond Fund 27
 
1 Year
3 Years
5 Years
10 Years
Class T Shares
$349
$650
$972
$1,884
Class I Shares
$77
$332
$608
$1,394
Class R Shares
$127
$486
$868
$1,941
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the Example, affect the Fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 43% of the average value of its portfolio.
Investments, Risks, and Performance
Principal Investment Strategy
Under normal circumstances, the Fund invests at least 80% of its net assets, plus borrowings for investment purposes, in a broad range of high-yield, below investment-grade bonds. For purposes of this investment policy, a debt security is considered a “bond.” Debt securities represent an issuer’s obligation to repay a loan of money that generally pays interest to the holder. Bank loans, bonds, loan participations, notes and debentures are examples of debt securities. It is expected that the Fund will invest primarily in high-yield corporate bonds as well as floating rate loans, and participations in and assignments of loans. Securities below investment grade include those securities that at the time of purchase are rated Ba1 or lower by Moody’s Investors Service, Inc. (“Moody’s”), or BB+ or lower by Fitch Ratings Ltd. (“Fitch”) or by Standard & Poor’s Global Ratings (“S&P”) or, if unrated, deemed to be of comparable quality by the Fund’s investment adviser, Equitable Investment Management, LLC (the ”Adviser”), or the Fund’s sub-adviser, AXA Investment Managers US Inc. (“AXA IM” or the “Sub-Adviser”). The below investment grade securities in which the Fund invests are generally rated at least Ca by Moody’s or at least CC by Fitch or S&P or, if unrated, deemed to be of comparable quality by the Adviser or the Sub-Adviser. The Fund may continue to hold securities that are downgraded below these ratings subsequent to purchase. The Fund does not normally invest in securities that are in default or have defaulted with respect to the payment of interest or repayment of principal, but may do so depending on market or other conditions. The Fund may invest in debt securities issued by companies of any size. The Fund may invest up to 25% of its net assets in debt securities of issuers located outside the United States, including emerging markets issuers and U.S. dollar-denominated securities of non-U.S. issuers. The Fund may invest in privately placed and restricted securities (including 144A bonds).
The Fund may invest in securities of any maturity because AXA IM places greater emphasis on credit risk in selecting securities than either maturity or duration. Certain debt instruments in which the Fund may invest may be structured as pay-in-kind securities. The Fund may invest up to 15% of its net assets in illiquid securities.
Principal Risks
An investment in the Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The value of your investment may fall, sometimes sharply, and you could lose money by investing in the Fund. There can be no assurance that the Fund will achieve its investment objective.
The following risks can negatively affect the Fund’s performance. The most significant risks as of the date of this Prospectus are presented first, followed by additional principal risks in alphabetical order.
Market Risk —  The Fund is subject to the risk that the securities markets will move down, sometimes rapidly and unpredictably, based on overall economic conditions and other factors, which may negatively affect Fund performance. Securities markets also may experience long periods of decline in value. The value of a security may decline due to factors that are specifically related to a particular company, as well as general market conditions, such as real or perceived adverse economic or political conditions, inflation rates and/or investor expectations concerning such rates, changes in interest rates, recessions, or adverse investor sentiment generally. During a general downturn in the securities markets, multiple asset classes may decline in value simultaneously. Changes in the financial condition of a single issuer can impact a market as a whole.
Geopolitical events, including terrorism, tensions, war or other open conflicts between nations, or political or economic dysfunction within some nations that are global economic powers or major producers of oil, may lead to overall instability in world economies and markets generally and have led, and may in the future lead, to increased market volatility and may have adverse long-term
28 1290 High Yield Bond Fund
effects. World markets, or those in a particular region, may all react in similar fashion to important economic, political or other developments. Events such as environmental and natural disasters or other catastrophes, public health crises (such as epidemics and pandemics), social unrest, and cybersecurity incidents, and governments’ reactions to such events, could cause uncertainty in the markets and may adversely affect the performance of the global economy. Impacts from climate change may include significant risks to global financial assets and economic growth. The extent and duration of such events and resulting market disruptions could be substantial and could magnify the impact of other risks to the Fund. The value and liquidity of the Fund’s investments may be negatively affected by developments in other countries and regions, whether or not the Fund invests in securities of issuers located in or with significant exposure to the countries or regions directly affected.
The U.S. Federal Reserve (“Fed”) has invested or otherwise made available substantial amounts of money to keep credit flowing through short-term money markets and has signaled that it will continue to adjust its operations as appropriate to support short-term money markets. Amid these efforts, concerns about the markets’ dependence on the Fed’s provision of liquidity have grown. Policy changes by the U.S. government and/or the Fed and political events within the United States may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree. A downgrade of the ratings of U.S. government debt obligations, or concerns about the U.S. government’s credit quality in general, could have a substantial negative effect on the U.S. and global economies. High public debt in the United States and other countries creates ongoing systemic and market risks and policymaking uncertainty.
In addition, markets and market participants are increasingly reliant on information data systems. Inaccurate data, 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.
Non-Investment Grade Securities Risk —  Bonds rated below BBB by Standard & Poor’s Global Ratings or Fitch Ratings, Ltd., or below Baa by Moody’s Investors Service, Inc. (or, if unrated, determined by the investment manager to be of comparable quality) are speculative in nature and are subject to additional risk factors such as increased possibility of default, illiquidity of the security, and changes in value based on changes in interest rates. Non-investment grade bonds, sometimes referred to as “junk bonds,” are usually issued by companies without long track records of sales and earnings, or by those companies with questionable credit strength. The creditworthiness of issuers of non-investment grade debt securities may be more complex to analyze than that of issuers of investment grade debt securities, and reliance on credit ratings may present additional risks.
Credit Risk —  The Fund is subject to the risk that the issuer or guarantor of a fixed income security, or the counterparty to a transaction, is unable or unwilling, or is perceived as unable or unwilling, to make timely interest or principal payments or otherwise honor its obligations, or defaults completely, which may cause the Fund's holdings to lose value. The downgrade of a security’s credit rating may decrease its value. Lower credit quality also may lead to greater volatility in the price of a security and may negatively affect a security’s liquidity. The credit quality of a security can deteriorate suddenly and rapidly. The Fund may experience a significant or complete loss on a fixed income security or a transaction.
Interest Rate Risk —  Changes in interest rates may affect the yield, liquidity and value of investments in income producing or debt securities. Changes in interest rates also may affect the value of other securities. When interest rates rise, the value of the Fund's debt securities generally declines. Conversely, when interest rates decline, the value of the Fund's debt securities generally rises. Typically, the longer the maturity or duration of a debt security, the greater the effect a change in interest rates could have on the security’s price. Thus, the sensitivity of the Fund's debt securities to interest rate risk will increase the greater the duration of those securities. A significant or rapid rise in interest rates could result in losses to the Fund.
Liquidity Risk —  From time to time, there may be little or no active trading market for a particular investment in which the Fund may invest or is invested. In such a market, the value of such an investment and the Fund's share price may fall dramatically. Illiquid investments may be difficult or impossible to sell or purchase at an advantageous time or price or in sufficient amounts to achieve the Fund's desired level of exposure. To meet redemption requests during periods of illiquidity, the Fund may be forced to dispose of investments at unfavorable times or prices and/or under unfavorable conditions, which may result in a loss or may be costly to the Fund. Investments that are illiquid or that trade in lower volumes may be more difficult to value. The Fund also may not receive its proceeds from the sale of certain investments for an extended period of time. Certain investments that were liquid when purchased may later become illiquid, sometimes abruptly, particularly in times of overall economic distress or adverse investor perception. An inability to sell a portfolio position can adversely affect the Fund's value or prevent the Fund from being able to take advantage of other investment opportunities. During periods of market stress, an investment or even an entire market segment may become illiquid, sometimes abruptly, which can adversely affect the Fund's ability to limit losses. In addition, a reduction in the ability or willingness of dealers and other institutional investors to make a market in certain securities may result in decreased liquidity in certain markets.
Sector Risk —  From time to time, based on market or economic conditions, the Fund may have significant positions in one or more sectors of the market. To the extent the Fund invests more heavily in particular sectors, its performance will be especially sensitive
1290 High Yield Bond Fund 29
to developments that significantly affect those sectors. Individual sectors may be more volatile, and may perform differently, than the broader market. The industries that constitute a sector may all react in the same way to economic, political or regulatory events.
Loan Risk —  A bank loan represents an interest in a loan or other direct indebtedness that entitles the acquirer of such interest to payments of interest, principal and/or other amounts due under the structure of the loan. Loan interests are subject to liquidity risk, prepayment risk, extension risk, the risk of subordination to other creditors, restrictions on resale, and the lack of a regular trading market and publicly available information. Loan interests may be difficult to value and may have extended trade settlement periods. As a result, the proceeds from the sale of a loan may not be available to make additional investments or to meet redemption obligations until potentially a substantial period after the sale of the loan. The extended trade settlement periods could force the Fund to liquidate other securities to meet redemptions and may present a risk that the Fund may incur losses in order to timely honor redemptions. There is a risk that the value of any collateral securing a loan in which the Fund has an interest may decline and that the collateral may not be sufficient to cover the amount owed on the loan. In the event the borrower defaults, the Fund's access to the collateral may be limited or delayed by bankruptcy or other insolvency laws. Loans may not be considered “securities,” and purchasers, such as the Fund, therefore may not have the benefit of the anti-fraud protections of the federal securities laws. To the extent that the Fund invests in loan participations and assignments, it is subject to the risk that the financial institution acting as agent for all interests in a loan might fail financially. It is also possible that the Fund could be held liable, or may be called upon to fulfill other obligations, as a co-lender.
Portfolio Management Risk —  The Fund is subject to the risk that strategies used by an investment manager and its securities selections fail to produce the intended results. An investment manager’s judgments or decisions about the quality, relative yield or value of, or market trends affecting, a particular security or issuer, industry, sector, region or market segment, or about the economy or interest rates, may be incorrect or otherwise may not produce the intended results, which may result in losses to the Fund. In addition, many processes used in Fund management, including security selection, rely, in whole or in part, on the use of various technologies. The Fund may suffer losses if there are imperfections, errors or limitations in the quantitative, analytic or other tools, resources, information and data used, or the analyses employed or relied on, by an investment manager, or if such tools, resources, information or data are used incorrectly, fail to produce the desired results, or otherwise do not work as intended. There can be no assurance that the use of these technologies will result in effective investment decisions for the Fund.
Foreign Securities Risk —  Investments in foreign securities involve risks in addition to those associated with investments in U.S. securities. Foreign markets may be less liquid, more volatile and subject to less government supervision and regulation than U.S. markets, and it may take more time to clear and settle trades involving foreign securities, which could negatively impact the Fund's investments and cause it to lose money. Security values also may be negatively affected by changes in the exchange rates between the U.S. dollar and foreign currencies. Differences between U.S. and foreign legal, political and economic systems, regulatory regimes and market practices, as well as trade barriers and other protectionist trade policies (including those of the United States), governmental instability, war, or other political or economic actions, also may adversely impact security values. Foreign securities are also subject to the risks associated with the potential imposition of economic or other sanctions against a particular foreign country, its nationals, businesses or industries. World markets, or those in a particular region, may all react in similar fashion to important economic, political or other developments. Events and evolving conditions in certain economies or markets may alter the risks associated with investments tied to countries or regions that historically were perceived as comparatively stable and make such investments riskier and more volatile. Regardless of where a company is organized or its stock is traded, its performance may be significantly affected by events in regions from which it derives its profits or in which it conducts significant operations.
Currency Risk —  Investments that are denominated in or that provide exposure to foreign currencies are subject to the risk that those currencies will decline in value relative to the U.S. dollar. Any such decline may erode or reverse any potential gains from an investment in securities denominated in foreign currency or may widen existing loss. In the case of hedging positions, there is the risk that the U.S. dollar will decline in value relative to the currency being hedged. Currency rates may fluctuate significantly over short periods of time.
Emerging Markets Risk —  The risks associated with investments in emerging market countries often are significant, and vary from jurisdiction to jurisdiction and company to company. Investments in emerging market countries are more susceptible to loss than investments in more developed foreign countries and may present market, credit, currency, liquidity, legal, political, technical and other risks different from, or greater than, the risks of investing in more developed foreign countries. Emerging market countries may be more likely to experience rapid and significant adverse developments in their political or economic structures, intervene in financial markets, restrict foreign investments, impose high withholding or other taxes on foreign investments, impose restrictive exchange control regulations, or nationalize or expropriate the assets of private companies, which may have negative impacts on transaction costs, market price, investment returns and the legal rights and remedies available to the Fund. In addition, the securities markets of emerging market countries generally are smaller, less liquid and more volatile than those of more developed foreign countries, and emerging market countries often have less uniformity in regulatory, accounting, auditing and financial reporting requirements or standards, which may impact the availability and
30 1290 High Yield Bond Fund
quality of information about issuers, and less reliable clearance and settlement, registration and custodial procedures. Emerging market countries also may be subject to high inflation and rapid currency devaluations, and currency-hedging techniques may be unavailable in certain emerging market countries. In addition, some emerging market countries may be heavily dependent on international trade, which can materially affect their securities markets. Securities of issuers traded on foreign exchanges may be suspended. The likelihood of such suspensions may be higher for securities of issuers in emerging market countries than in countries with more developed markets.
European Economic Risk —  The economies of European Union (“EU”) member countries and their trading partners, as well as the broader global economy, may be adversely affected by changes in the euro’s exchange rate, changes in EU or governmental regulations on trade, geopolitical tensions or conflicts, and the threat of default or an actual default by an EU member country on its sovereign debt, which could negatively impact the Fund's investments and cause it to lose money. Recent events in Europe may continue to impact the economies of every European country and their economic partners. Russia’s military invasion of Ukraine in February 2022, the resulting responses by the United States and other countries, and the potential for wider conflict have had, and could continue to have, severe adverse effects on regional and global economies and could further increase volatility and uncertainty in the financial markets. In addition, until the full economic effects of the United Kingdom's withdrawal from the EU, commonly referred to as “Brexit,” become clearer, there remains a risk that Brexit may negatively impact the Fund's investments and cause it to lose money. Any further withdrawals from the EU could cause additional market disruption globally.
Investment Grade Securities Risk —  Securities rated in the lower investment grade rating categories (e.g., BBB or Baa) are considered investment grade securities, but may have more risk than higher rated obligations because they are regarded as having only an adequate capacity to pay principal and interest, are considered to lack outstanding investment characteristics, and may possess certain speculative characteristics.
Large Transaction Risk —  A significant percentage of the Fund’s shares may be owned or controlled by the Adviser and its affiliates, other Funds advised by the Adviser (including funds of funds), or other large shareholders. Accordingly, the Fund is subject to the potential for large-scale inflows and outflows as a result of purchases and redemptions of its shares by such shareholders. These inflows and outflows could negatively affect the Fund’s net asset value and performance.
Leveraging Risk —  When the Fund leverages its holdings, the value of an investment in the Fund will be more volatile and all other risks will tend to be compounded. Investments that create leverage can result in losses to the Fund that exceed the amount originally invested and may accelerate the rate of losses (some of which may be sudden or substantial). For certain investments that create leverage, relatively small market fluctuations can result in large changes in the value of such investments. There can be no assurance that the Fund's use of any leverage will be successful.
Prepayment Risk and Extension Risk —  Prepayment risk is the risk that the issuer of a security held by the Fund may pay off principal more quickly than originally anticipated. This may occur when interest rates fall. The Fund may have to reinvest the proceeds in an investment offering a lower yield, may not benefit from any increase in value that might otherwise result from declining interest rates and may lose any premium it paid to acquire the security. Extension risk is the risk that the issuer of a security held by the Fund may pay off principal more slowly than originally anticipated. This may occur when interest rates rise. The Fund may be prevented from reinvesting the proceeds it would have received at a given time in an investment offering a higher yield.
Privately Placed and Other Restricted Securities Risk —  Restricted securities, which include privately placed securities, are securities that cannot be offered for public resale unless registered under the applicable securities laws or that have a contractual restriction that prohibits or limits their resale. Before they are registered, such securities may be sold only in a privately negotiated transaction or pursuant to an exemption from registration. Difficulty in selling securities may result in a loss or be costly to the Fund. Rule 144A is designed to facilitate efficient trading among institutional investors by permitting the sale of certain unregistered securities to qualified institutional buyers. To the extent restricted securities held by the Fund qualify under Rule 144A and an institutional market develops for those securities, the Fund likely will be able to dispose of the securities without registering them. To the extent that institutional buyers become, for a time, uninterested in purchasing these securities, investing in Rule 144A securities could increase the level of the Fund’s illiquidity. The Adviser or Sub-Adviser may determine that certain securities qualified for trading under Rule 144A are liquid. Where registration of a security is required, the Fund may be obligated to pay all or part of the registration expenses, and a considerable period may elapse between the time the Fund desires to sell (and therefore decides to seek registration of) the security, and the time the Fund may be permitted to sell the security under an effective registration statement. If, during such a period, adverse market conditions were to develop, the Fund might obtain a less favorable price than prevailed when it desired to sell. The risk that securities may not be sold for the price at which the Fund is carrying them is greater with respect to restricted securities than it is with respect to registered securities. The illiquidity of the market, as well as the lack of publicly available information regarding these securities, also may make it difficult to determine a fair value for certain securities for purposes of computing the Fund's net asset value.
1290 High Yield Bond Fund 31
Redemption Risk —  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 heightened during periods of declining or illiquid markets. Heavy redemptions could hurt the Fund's performance.
Market developments and other factors, including a general rise in interest rates, have 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. The market-making capacity of dealers has been reduced in recent years, in part as a result of structural changes, such as fewer proprietary trading desks at broker-dealers and increased regulatory capital requirements. In addition, significant securities market disruptions related to the coronavirus disease (COVID-19) pandemic have led to dislocation in the market for a variety of fixed income securities (including, without limitation, commercial paper, corporate debt securities, certificates of deposit, asset-backed debt securities and municipal obligations), which has decreased liquidity and sharply reduced returns in certain cases. Increased redemptions from mutual funds that hold large amounts of fixed income securities, 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.
Zero Coupon and Pay-in-Kind Securities Risk —  Zero coupon and pay-in-kind securities are debt securities that do not make periodic cash interest payments. Zero coupon securities are issued at a significant discount from their face value. Zero coupon and pay-in-kind securities tend to be subject to greater fluctuations in market value in response to changing interest rates than securities of comparable maturities that pay interest periodically and in cash.
Risk/Return Bar Chart and Table
The bar chart and table below provide some indication of the risks of investing in the Fund by showing changes in the Fund's performance from year to year and by showing how the Fund's average annual total returns for the past one-year, five-year and since inception periods through December 31, 2022, compared to the returns of a broad-based securities market index. The return of the broad-based securities market index (and any additional comparative index) shown for the since inception period below is the return of the index since the inception of the share class with the longest history. Past performance (before and after taxes) is not an indication of future performance.
The performance results shown in the bar chart do not reflect any sales charges or account fees, which would reduce the performance results.
The performance of Class T shares for periods prior to March 1, 2017 has been adjusted to reflect the current sales charges applicable to Class T shares.  
 Calendar Year Annual Total Returns — Class I
  
Best quarter (% and time period)
8.99%
2020 2nd Quarter
Worst quarter (% and time period)
-10.18%
2020 1st Quarter
32 1290 High Yield Bond Fund
  
 Average Annual Total Returns
 
 
One
Year
Five
Years
Since
Inception
Inception
Date
1290 High Yield Bond Fund - Class I
Return Before Taxes
-9.49%
2.19%
3.01%
11/12/2014
1290 High Yield Bond Fund - Class I
Return After Taxes on Distributions
-11.54%
-0.03%
0.54%
11/12/2014
1290 High Yield Bond Fund - Class I
Return After Taxes on Distributions and Sale of Fund Shares
-5.60%
0.76%
1.20%
11/12/2014
1290 High Yield Bond Fund - Class A
Return Before Taxes
-13.83%
0.99%
2.16%
11/12/2014
1290 High Yield Bond Fund - Class R
Return Before Taxes
-9.96%
1.68%
2.49%
11/12/2014
1290 High Yield Bond Fund - Class T
Return Before Taxes
-11.78%
1.67%
2.69%
11/12/2014
ICE BofA US High Yield Index (reflects no deduction for fees, expenses, or taxes)
-11.17%
2.13%
3.38%
 
After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs). The returns after taxes on distributions and sale of Fund shares may be higher than other returns for the same period due to an assumed tax benefit from any losses on a sale of Fund shares at the end of the measurement period. After-tax returns are shown only for Class I shares. After-tax returns for other Classes may vary.
Who Manages the Fund
Investment Adviser: Equitable Investment Management, LLC (the “Adviser”)
Portfolio Managers:  The members of the team that are jointly and primarily responsible for the selection, monitoring and oversight of the Fund’s Sub-Adviser are: 
Name
Title
Date Began
Managing
the Fund
Kenneth T. Kozlowski, CFP®, CLU, ChFC
Executive Vice President and Chief Investment
Officer of the Adviser
November 2014
Alwi Chan, CFA®
Senior Vice President and Deputy Chief
Investment Officer of the Adviser
November 2014
Sub-Adviser: AXA Investment Managers US Inc. (“AXA IM”)
Portfolio Managers:  The individuals primarily responsible for the securities selection, research and trading for the Fund are: 
Name
Title
Date Began
Managing
the Fund
Michael Graham, CFA®
Head of U.S. High Yield and
Senior U.S. High Yield Portfolio Manager at AXA
IM
August 2021
Robert Houle, CFA®
Senior U.S. High Yield Portfolio Manager at AXA
IM
March 2018
The Adviser is responsible for overseeing Sub-Advisers and recommending their hiring, termination and replacement to the Board of Trustees. The Adviser has been granted relief by the Securities and Exchange Commission to hire, terminate and replace Sub-Advisers and amend sub-advisory agreements subject to the approval of the Board of Trustees and without obtaining shareholder approval. However, the Adviser may not enter into a sub-advisory agreement on behalf of the Fund
1290 High Yield Bond Fund 33
with an “affiliated person” of the Adviser unless the sub-advisory agreement is approved by the Fund's shareholders. The relief does not extend to any increase in the advisory fee paid by the Fund to the Adviser; any such increase would be subject to shareholder approval.
Purchase and Redemption of Fund Shares
You may purchase and redeem shares of the Fund each day the New York Stock Exchange is open for trading at the Fund’s net asset value determined after receipt of your request in good order, subject to any applicable sales charge. All share classes are currently not offered for sale in all states. Initial purchases must be effected through your financial intermediary. Subsequently, you may purchase or redeem shares either by having your financial intermediary process your purchase or redemption, or by telephone (1-888-310-0416), by overnight mail (1290 Funds, c/o SS&C GIDS, Inc., 430 W. 7th Street, Suite 219166, Kansas City, MO 64105-1407), or by mail (1290 Funds, PO Box 219166, Kansas City, MO 64121-9166). All redemption requests will be processed and payment with respect thereto will normally be made within seven days after receipt of your request in good order.
The initial and subsequent minimums for purchasing shares of the Fund generally are as follows, although the Fund may reduce or waive the minimums in some cases: 
 
Class A
Class T
Class I
Class R
Minimum Initial Investment
$1,000 for all accounts
except:
• $500 for certain fee-based
programs.
• $500, if establishing an
Automatic Bank Draft Plan.
• $250 minimum for
purchases by accounts
through eligible financial
intermediary platforms
that have entered into
selling or service
agreements with the
Distributor and that are
eligible to purchase
Class A shares without a
sales charge.
• No minimum for certain
employer-sponsored
retirement plans and
certain wrap fee based
programs.
$1,000 for all accounts
except:
• $500 for certain fee-based
programs.
• $500, if establishing an
Automatic Bank Draft Plan.
• No minimum for certain
employer-sponsored
retirement plans and
certain wrap fee based
programs.
• $1,000,000 for certain
institutions and individuals.
• $1,000 for certain
employees (or their
immediate family
members) of Equitable
Holdings, Inc. or its
subsidiaries.
• Class I shares are available
to clients of registered
investment advisers who
have $250,000 invested in
the Fund.
• No minimum investment
for a wrap account client
of an eligible broker-dealer
or a client of a fee-based
planner that is unaffiliated
with a broker-dealer, or a
client of an investment
adviser, trustee,
administrator or institution
acting in a similar capacity
that invests in the Fund
through a retirement plan
where the administrator or
service provider of such
retirement plan has
entered into a services
agreement with the Fund’s
distributor and/or
investment adviser.
No minimum
Minimum Additional
Investment
$50 for all accounts
$50 for all accounts
No subsequent minimum
No subsequent minimum
Your financial intermediary may impose different investment minimums.
Tax Information
The Fund’s dividends and other distributions generally will be subject to federal income tax as ordinary income or long-term capital gains, unless you are a tax-exempt investor or are investing through a retirement plan or account; in the latter case, you may be subject to that tax upon withdrawal from the plan or account.
34 1290 High Yield Bond Fund
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase shares of the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of Fund shares, shareholder services and other purposes. These payments create a conflict of interest by influencing the broker-dealer or other intermediary and your investment professional to recommend the Fund over another investment. Ask your financial adviser or visit your financial intermediary’s website for more information.
1290 High Yield Bond Fund 35
1290 Loomis Sayles Multi-Asset Income Fund1  — Class A (TNXAX), Class T (TNXCX), Class I (TNVDX) and Class R (TNYRX) Shares
Investment Objective: Seeks to provide income and total return through principally investing in income generating securities and investments.
Fees and Expenses of the Fund
The following table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table and example below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in 1290 Funds’ funds. More information about these and other discounts is available from your financial professional and in the “How Sales Charges are Calculated” and “Ways to Reduce or Eliminate Sales Charges” sections of the Fund’s Prospectus, and the “Purchase, Redemption and Pricing of Shares” section of the Fund’s Statement of Additional Information.  
 Shareholder Fees
 (fees paid directly from your investment)
 
1290 Loomis Sayles Multi-Asset Income Fund
Class A
Shares
Class T
Shares
Class I
Shares
Class R
Shares
Maximum sales charge (load) imposed on purchases (as a percentage of offering price)
4.50%
2.50%
None
None
Maximum contingent deferred sales charge (load) (as a percentage of original purchase price or redemption
proceeds, whichever is lower)
1.00%1
None
None
None
Maximum account fee (deducted from accounts with a balance of less than $1,000)
$25
$25
$25
$25
1 On shares purchased without an initial sales charge and redeemed within 12 months of purchase.  
 Annual Fund Operating Expenses
 (expenses that you pay each year as a percentage of the value of your investment)
 
1290 Loomis Sayles Multi-Asset Income Fund
Class A
Shares
Class T
Shares
Class I
Shares
Class R
Shares
Management Fee1
0.65%
0.65%
0.65%
0.65%
Distribution and/or Service Fees (12b-1 fees)
0.25%
0.25%
0.00%
0.50%
Other Expenses
0.70%
0.67%2
0.67%
0.70%
Acquired Fund Fees and Expenses
0.04%
0.04%2
0.04%
0.04%
Total Annual Fund Operating Expenses
1.64%
1.61%
1.36%
1.89%
Fee Waiver and/or Expense Reimbursement3,4
(0.55)%
(0.52)%
(0.52)%
(0.55)%
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement
1.09%
1.09%
0.84%
1.34%
1
Management Fee has been restated to reflect the current fee.
2
Based on estimated amounts for the current fiscal year.
3
Pursuant to a contract, Equitable Investment Management, LLC (the “Adviser”) has agreed to make payments or waive its and its affiliates’ management, administrative and other fees to limit the expenses of the Fund through April 30, 2024 (unless the Board of Trustees consents to an earlier revision or termination of this arrangement) (“Expense Limitation Arrangement”) so that the annual operating expenses of the Fund (exclusive of taxes, interest, brokerage commissions, capitalized expenses (other than offering costs), fees and expenses of other investment companies in which the Fund invests, 12b-1 fees, dividend and interest expenses on securities sold short, and extraordinary expenses not incurred in the ordinary course of the Fund’s business) do not exceed an annual rate of average daily net assets of 0.80% for Class A shares, Class T shares, Class I shares, and Class R shares of the Fund. The Expense Limitation Arrangement may be terminated by the Adviser at any time after April 30, 2024. The Adviser may be reimbursed the amount of any such payments or waivers in the future provided that the payments or waivers are reimbursed within three years of the payments or waivers being recorded and the Fund’s expense ratio, after the reimbursement is taken into account, does not exceed the Fund’s expense cap at the time of the waiver or the Fund’s expense cap at the time of the reimbursement, whichever is lower. The total annual fund operating expense ratios after fee waiver and/or expense reimbursement for Class A shares, Class T shares, and Class R shares, as shown in the table, are higher than the Fund’s expense cap because these ratios include 12b-1 fees and certain other expenses, as noted above, that are excluded from the Expense Limitation Arrangement.
4
Fee Waiver and/or Expense Reimbursement information has been restated to reflect the current Expense Limitation Arrangement.
Example
This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds. The Example assumes that you invest $10,000 in the Fund for the periods indicated, that your investment has a 5% return each
1
Effective August 19, 2022, 1290 DoubleLine Dynamic Allocation Fund was renamed 1290 Loomis Sayles Multi-Asset Income Fund.
36 1290 Loomis Sayles Multi-Asset Income Fund
year, that the Fund's operating expenses remain the same and that the Expense Limitation Arrangement is not renewed. Although your actual costs may be higher or lower, based on these assumptions, whether you redeem or hold your shares, your costs would be: 
 
1 Year
3 Years
5 Years
10 Years
Class A Shares
$556
$893
$1,252
$2,262
Class T Shares
$358
$696
$1,056
$2,071
Class I Shares
$86
$379
$695
$1,590
Class R Shares
$136
$541
$970
$2,167
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the Example, affect the Fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 255% of the average value of its portfolio.
Investments, Risks, and Performance
Principal Investment Strategy
Under normal circumstances, the Fund invests in a diversified range of income generating equity and fixed income securities and other financial instruments, including derivatives, which provide investment exposure to such securities. The Fund employs a dynamic asset allocation strategy under which it shifts its allocations among global equity and fixed income asset classes. The Fund also utilizes call option strategies to generate income. The Fund’s equity allocation will typically range from 25% to 70% of the Fund’s net assets, and its fixed income allocation will typically range from 20% to 75% of the Fund’s net assets, although the Fund may invest up to 100% of its total assets in either equity or fixed income securities. The Fund allocates its assets among asset classes and market sectors based upon the Sub-Adviser’s evaluation of global economic conditions and risk premiums of income producing asset classes (that is, the expected return to be received from investing in income producing asset classes that carry greater risk). The Fund’s asset allocation changes will be based on an assessment of relative valuation; stages of an economic cycle, which include downturn, credit repair, recovery and expansion/late cycle; economic regimes; short- and long-term macroeconomic themes; and sector fundamentals. The Fund may gain or adjust exposure to each asset class through investments in individual securities or through other instruments, including derivatives. The Fund may invest in companies of any size and may invest without limit in foreign securities, including emerging market securities. In selecting investments for the Fund, the Sub-Adviser considers factors including, but not limited to, top-down macroeconomic conditions and developments as well as bottom-up security selection.
The Fund’s use of call option strategies (also called “covered call” or “buy write” strategies) under which the Fund writes (sells) call options or index based options on equity securities held in the Fund’s portfolio is intended to generate additional returns for the Fund from the option premium. The Sub-Adviser also believes that selling call options on a portion of the Fund’s equity securities may reduce volatility and downside risk; however, the use of call option strategies also may reduce capital appreciation. The Fund may write call options with an aggregate notional exposure in the range of 0-50% of the Fund’s net assets, with a typical range of exposure of 10% to 30% of the Fund’s net assets. The Fund may buy or sell call options on major equity indices as well as individual stocks in the Fund’s portfolio. For index call writing the Fund will replicate the index through purchase of individual securities and then write an index call option. To replicate the index, the Sub-Adviser may use full replication, or “sampling” techniques under which the Fund invests in a representative sample of the securities included in the index rather than buying all of the securities included in the index.
When the Fund writes a call option on an index, it agrees (in return for receipt of the option premium) to pay the option holder, upon exercise of the option prior to or upon expiration, the difference between the exercise price and price of the index if the index price is above the exercise price at the time of exercise or expiration. When a call option’s exercise price is higher than the price of the index, the call option is “out of the money.” By selling options that are out of the money, the Fund seeks to profit from the sales price of the options while capitalizing on the general tendency of options that are out of the money at the time of sale to expire without value and without being exercised by the holder. The Fund determines whether an option is “out of the money” based on the probability that it will expire worthless based on implied market pricing. The Fund writes only “covered” call options (that is, calls against positions in the Fund).
1290 Loomis Sayles Multi-Asset Income Fund 37
Equity Allocation —  The Fund’s equity allocation will consist primarily of equity securities, including, but not limited to, common stocks, preferred stocks, securities convertible into common or preferred stocks, and real estate investment trusts (“REITS”). The Fund’s equity allocation will typically range from approximately 25% to 70% of the Fund’s net assets, excluding the call option strategies. The Fund may also invest in publicly-traded master limited partnerships (“MLPs”), including MLPs that are not taxed as regular corporations for U.S. federal income tax purposes. The Sub-Adviser seeks to identify equity securities that it believes offer attractive income and total return.
Fixed Income Allocation —  The Fund’s fixed income allocation will consist primarily of fixed income securities, including, but not limited to, foreign and domestic corporate obligations, fixed income securities issued by corporations and governments in foreign countries including emerging markets issuers, bank loans, commercial and residential mortgage-backed securities, asset-backed securities, collateralized loan obligations, floating or variable rate obligations, and securities issued or guaranteed by the U.S. government, its agencies, instrumentalities, or sponsored corporations. The Fund’s fixed income allocation will typically range from approximately 20% to 75% of the Fund’s net assets. The Fund typically expects to invest approximately 10% to 40% of its net assets in investment grade securities, 10% to 60% of its net assets in non-investment grade securities, and up to 40% of its net assets in any of the following: bank loans, securitized instruments such as commercial and residential mortgage-backed securities, asset-backed securities, and collateralized loan obligations, floating or variable rate obligations, or emerging market debt. The Sub-Adviser seeks to identify fixed income securities that it believes offer attractive income and total return.
The Fund may invest in fixed income securities of any maturity or credit quality, including below investment grade securities (commonly known as “junk bonds”). Securities rated below investment grade include those that, at the time of investment, are rated Ba1 or lower by Moody’s Investors Service, Inc. or BB+ or lower by Fitch Ratings Ltd. or Standard & Poor’s Global Ratings or the equivalent by any other nationally recognized statistical rating organization, or, if unrated, determined by the Sub-Adviser to be of comparable quality. The Fund may invest in mortgage-backed or other asset-backed securities of any credit rating or credit quality. The Fund may invest in privately placed and restricted securities (including 144A bonds). The Fund does not normally invest in securities that are in default or have defaulted with respect to the payment of interest or repayment of principal, but may do so depending on market or other conditions. The Fund may continue to hold securities that go into default.
Under normal market conditions, the weighted average effective duration of the Fund's fixed income allocation is expected to range from zero to seven years. Duration is a measure of the expected life of a fixed income security that is used to determine the sensitivity of a security’s price to changes in interest rates. Effective duration is a measure of the duration of the Fund's fixed income portfolio adjusted for the anticipated effect of interest rate changes on prepayment rates. The effective duration of the Fund's fixed income investments may be longer than its target in stressed market conditions and vary materially from its target, from time to time, and there is no assurance that the duration of the Fund's fixed income investments will meet its target. The longer a security’s duration, the more sensitive it will be to changes in interest rates, which may increase the volatility of the security’s value and may lead to losses.
Other Investments —  The Fund will principally use derivatives in employing its call option strategies. In addition, in implementing its dynamic allocation investment strategy, the Fund may invest in derivatives, including futures, forwards, swaps and other instruments, rather than investing directly in equity or fixed income securities. The Fund may also use derivatives for purposes of managing foreign currency, interest rate or credit risk. The Fund's investments in derivatives may involve the use of leverage because the Fund is not required to invest the full market value of the contract upon entering into the contract but participates in gains and losses on the full contract price. In addition, the Fund's investments in derivatives may involve the use of leverage because the heightened price sensitivity of some derivatives to market changes may magnify the Fund's gain or loss. It is not generally expected, however, that the Fund will be leveraged by borrowing money for investment purposes.
The Fund also may invest in exchange-traded funds in seeking to carry out its investment strategies, including its call option strategies.
The Fund's holdings may be frequently adjusted to reflect the Sub-Adviser’s assessment of changing risks, which could result in high portfolio turnover.
Principal Risks
An investment in the Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The value of your investment may fall, sometimes sharply, and you could lose money by investing in the Fund. There can be no assurance that the Fund will achieve its investment objective.
The following risks can negatively affect the Fund’s performance. The most significant risks as of the date of this Prospectus are presented first, followed by additional principal risks in alphabetical order.
Market Risk —  The Fund is subject to the risk that the securities markets will move down, sometimes rapidly and unpredictably, based on overall economic conditions and other factors, which may negatively affect Fund performance. Securities markets also
38 1290 Loomis Sayles Multi-Asset Income Fund
may experience long periods of decline in value. The value of a security may decline due to factors that are specifically related to a particular company, as well as general market conditions, such as real or perceived adverse economic or political conditions, inflation rates and/or investor expectations concerning such rates, changes in interest rates, recessions, or adverse investor sentiment generally. During a general downturn in the securities markets, multiple asset classes may decline in value simultaneously. Changes in the financial condition of a single issuer can impact a market as a whole.
Geopolitical events, including terrorism, tensions, war or other open conflicts between nations, or political or economic dysfunction within some nations that are global economic powers or major producers of oil, may lead to overall instability in world economies and markets generally and have led, and may in the future lead, to increased market volatility and may have adverse long-term effects. World markets, or those in a particular region, may all react in similar fashion to important economic, political or other developments. Events such as environmental and natural disasters or other catastrophes, public health crises (such as epidemics and pandemics), social unrest, and cybersecurity incidents, and governments’ reactions to such events, could cause uncertainty in the markets and may adversely affect the performance of the global economy. Impacts from climate change may include significant risks to global financial assets and economic growth. The extent and duration of such events and resulting market disruptions could be substantial and could magnify the impact of other risks to the Fund. The value and liquidity of the Fund’s investments may be negatively affected by developments in other countries and regions, whether or not the Fund invests in securities of issuers located in or with significant exposure to the countries or regions directly affected.
The U.S. Federal Reserve (“Fed”) has invested or otherwise made available substantial amounts of money to keep credit flowing through short-term money markets and has signaled that it will continue to adjust its operations as appropriate to support short-term money markets. Amid these efforts, concerns about the markets’ dependence on the Fed’s provision of liquidity have grown. Policy changes by the U.S. government and/or the Fed and political events within the United States may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree. A downgrade of the ratings of U.S. government debt obligations, or concerns about the U.S. government’s credit quality in general, could have a substantial negative effect on the U.S. and global economies. High public debt in the United States and other countries creates ongoing systemic and market risks and policymaking uncertainty.
In addition, markets and market participants are increasingly reliant on information data systems. Inaccurate data, 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.
Asset Allocation Risk —  The Fund’s investment performance depends upon how its assets are allocated across various asset classes and how its assets are invested within those asset classes. Some asset classes and investments may perform below expectations or the securities markets generally over short and extended periods. The allocation strategies used and the allocation and investment decisions made could cause the Fund to lose value and may not produce the desired results.
Equity Risk —  In general, the values of stocks and other equity securities fluctuate, and sometimes widely fluctuate, in response to changes in a company’s financial condition as well as general market, economic and political conditions and other factors. The Fund may experience a significant or complete loss on its investment in an equity security. In addition, common stock prices may be particularly sensitive to rising interest rates, which increase borrowing costs and the costs of capital.
Large-Cap Company Risk —  Larger more established companies may be unable to respond quickly to new competitive challenges such as changes in technology and consumer tastes, which may lead to a decline in their market price. Many larger companies also may not be able to attain the high growth rate of successful smaller companies, especially during extended periods of economic expansion.
Mid-Cap, Small-Cap and Micro-Cap Company Risk —  Mid-cap, small-cap and micro-cap companies carry additional risks because the operating histories of these companies tend to be more limited, their earnings and revenues less predictable (and some companies may be experiencing significant losses), and their share prices more volatile than those of larger, more established companies, all of which can negatively affect their value. In general, these risks are greater for small-cap and micro-cap companies than for mid-cap companies.
Investment Grade Securities Risk —  Securities rated in the lower investment grade rating categories (e.g., BBB or Baa) are considered investment grade securities, but may have more risk than higher rated obligations because they are regarded as having only an adequate capacity to pay principal and interest, are considered to lack outstanding investment characteristics, and may possess certain speculative characteristics.
Non-Investment Grade Securities Risk —  Bonds rated below BBB by Standard & Poor’s Global Ratings or Fitch Ratings, Ltd., or below Baa by Moody’s Investors Service, Inc. (or, if unrated, determined by the investment manager to be of comparable quality) are speculative in nature and are subject to additional risk factors such as increased possibility of default, illiquidity of the security,
1290 Loomis Sayles Multi-Asset Income Fund 39
and changes in value based on changes in interest rates. Non-investment grade bonds, sometimes referred to as “junk bonds,” are usually issued by companies without long track records of sales and earnings, or by those companies with questionable credit strength. The creditworthiness of issuers of non-investment grade debt securities may be more complex to analyze than that of issuers of investment grade debt securities, and reliance on credit ratings may present additional risks.
Credit Risk —  The Fund is subject to the risk that the issuer or guarantor of a fixed income security, or the counterparty to a transaction, is unable or unwilling, or is perceived as unable or unwilling, to make timely interest or principal payments or otherwise honor its obligations, or defaults completely, which may cause the Fund's holdings to lose value. The downgrade of a security’s credit rating may decrease its value. Lower credit quality also may lead to greater volatility in the price of a security and may negatively affect a security’s liquidity. The credit quality of a security can deteriorate suddenly and rapidly. The Fund may experience a significant or complete loss on a fixed income security or a transaction.
Interest Rate Risk —  Changes in interest rates may affect the yield, liquidity and value of investments in income producing or debt securities. Changes in interest rates also may affect the value of other securities. When interest rates rise, the value of the Fund's debt securities generally declines. Conversely, when interest rates decline, the value of the Fund's debt securities generally rises. Typically, the longer the maturity or duration of a debt security, the greater the effect a change in interest rates could have on the security’s price. Thus, the sensitivity of the Fund's debt securities to interest rate risk will increase the greater the duration of those securities. A significant or rapid rise in interest rates could result in losses to the Fund.
U.S. Government Securities Risk —  Although the Fund may hold securities that carry U.S. government guarantees, these guarantees do not extend to shares of the Fund itself and do not guarantee the market prices of the securities. Securities issued by the U.S. Treasury or other agencies and instrumentalities of the U.S. government may decline in value as a result of, among other things, changes in interest rates, political events in the United States, international developments, including strained relations with foreign countries, and changes in the credit rating of, or investor perceptions regarding the creditworthiness of, the U.S. government. Furthermore, not all securities issued by the U.S. government and its agencies and instrumentalities are backed by the full faith and credit of the U.S. Treasury. Securities not backed by the full faith and credit of the U.S. Treasury involve greater credit risk than investments in other types of U.S. government securities.
Options Risk —  The use of options involves investment strategies and risks different from those associated with ordinary portfolio securities transactions. The prices of options are volatile and are influenced by, among other things, actual and anticipated changes in the value of the underlying reference asset. When the Fund writes a covered call option, it assumes the risk that it will have to sell the underlying security at an exercise price that may be lower than the market price of the security, and it gives up the opportunity to profit from a price increase in the underlying security above the exercise price. If a call option that the Fund has written is exercised, the Fund will experience a gain or loss from the sale of the underlying security. If a call option that the Fund has written expires unexercised, the Fund will experience a gain in the amount of the premium it received; however, that gain may be offset by a decline in the market value of the underlying security during the option period. When the Fund writes a call option on an index, it gives up the opportunity to profit from an increase in the market value of the index above the exercise price. A securities index fluctuates with changes in the market values of the securities included in the index. The effectiveness of writing securities index options will depend upon the extent to which price movements in the Fund’s investment portfolio correlate with price movements of the securities index.
Derivatives Risk —  The Fund's investments in derivatives may rise or fall in value more rapidly than other investments and may reduce the Fund's returns and increase the volatility of the Fund's net asset value. Investing in derivatives involves investment techniques and risk analyses different from, and risks in some respects greater than, those associated with investing in more traditional investments, such as stocks and bonds. Derivatives may be leveraged such that a small investment can have a significant impact on the Fund's exposure to stock market values, interest rates, or other investments. As a result, a relatively small price movement in a derivatives contract may cause an immediate and substantial loss, and the Fund could lose more than the amount it invested. Some derivatives can have the potential for unlimited losses. In addition, it may be difficult or impossible for the Fund to purchase or sell certain derivatives in sufficient amounts to achieve the desired level of exposure, or to terminate or offset existing arrangements, which may result in a loss or may be costly to the Fund. Some derivatives are more sensitive to market price fluctuations and to interest rate changes than other investments. Derivatives may not behave as anticipated by the Fund, and derivatives strategies that are successful under certain market conditions may be less successful or unsuccessful under other market conditions. The Fund also may be exposed to losses if the counterparty in the transaction is unable or unwilling to fulfill its contractual obligation. In certain cases, the Fund may be hindered or delayed in exercising remedies against or closing out derivatives with a counterparty, resulting in additional losses. Derivatives also may be subject to the risk of mispricing or improper valuation, and valuation may be more difficult in times of market turmoil. Changes to the regulation of derivatives markets and mutual funds’ use of derivatives may impact the Fund's ability to maintain its investments in derivatives, make derivatives more costly, limit their availability, adversely affect their value or performance, or otherwise disrupt markets.
40 1290 Loomis Sayles Multi-Asset Income Fund
Newly Repositioned Fund Risk —  The Fund may not be successful in implementing its investment strategy, and there can be no assurance that the Fund will grow to or maintain an economically viable size, which could result in the Fund being liquidated at any time without shareholder approval and at a time that may not be favorable for all shareholders.
Foreign Securities Risk —  Investments in foreign securities, including depositary receipts, involve risks in addition to those associated with investments in U.S. securities. Foreign markets may be less liquid, more volatile and subject to less government supervision and regulation than U.S. markets, and it may take more time to clear and settle trades involving foreign securities, which could negatively impact the Fund's investments and cause it to lose money. Security values also may be negatively affected by changes in the exchange rates between the U.S. dollar and foreign currencies. Differences between U.S. and foreign legal, political and economic systems, regulatory regimes and market practices, as well as trade barriers and other protectionist trade policies (including those of the United States), governmental instability, war, or other political or economic actions, also may adversely impact security values. Foreign securities are also subject to the risks associated with the potential imposition of economic or other sanctions against a particular foreign country, its nationals, businesses or industries. World markets, or those in a particular region, may all react in similar fashion to important economic, political or other developments. Events and evolving conditions in certain economies or markets may alter the risks associated with investments tied to countries or regions that historically were perceived as comparatively stable and make such investments riskier and more volatile. Regardless of where a company is organized or its stock is traded, its performance may be significantly affected by events in regions from which it derives its profits or in which it conducts significant operations.
Currency Risk —  Investments that are denominated in or that provide exposure to foreign currencies are subject to the risk that those currencies will decline in value relative to the U.S. dollar. Any such decline may erode or reverse any potential gains from an investment in securities denominated in foreign currency or may widen existing loss. In the case of hedging positions, there is the risk that the U.S. dollar will decline in value relative to the currency being hedged. Currency rates may fluctuate significantly over short periods of time.
Emerging Markets Risk —  The risks associated with investments in emerging market countries often are significant, and vary from jurisdiction to jurisdiction and company to company. Investments in emerging market countries are more susceptible to loss than investments in more developed foreign countries and may present market, credit, currency, liquidity, legal, political, technical and other risks different from, or greater than, the risks of investing in more developed foreign countries. Emerging market countries may be more likely to experience rapid and significant adverse developments in their political or economic structures, intervene in financial markets, restrict foreign investments, impose high withholding or other taxes on foreign investments, impose restrictive exchange control regulations, or nationalize or expropriate the assets of private companies, which may have negative impacts on transaction costs, market price, investment returns and the legal rights and remedies available to the Fund. In addition, the securities markets of emerging market countries generally are smaller, less liquid and more volatile than those of more developed foreign countries, and emerging market countries often have less uniformity in regulatory, accounting, auditing and financial reporting requirements or standards, which may impact the availability and quality of information about issuers, and less reliable clearance and settlement, registration and custodial procedures. Emerging market countries also may be subject to high inflation and rapid currency devaluations, and currency-hedging techniques may be unavailable in certain emerging market countries. In addition, some emerging market countries may be heavily dependent on international trade, which can materially affect their securities markets. Securities of issuers traded on foreign exchanges may be suspended. The likelihood of such suspensions may be higher for securities of issuers in emerging market countries than in countries with more developed markets.
Collateralized Loan Obligations Risk —  Investments in collateralized loan obligations (“CLOs”) involve many of the same risks associated with investments in debt securities and asset-backed securities including interest rate risk, credit risk, liquidity risk, prepayment and extension risk, and valuation risk. The risks of an investment in a CLO also depend largely on the quality and type of the collateral and the class or “tranche” of the CLO in which the Fund invests. Normally, CLOs are privately offered and sold, and thus are not registered under the securities laws. As a result, investments in CLOs may be characterized by the Fund as illiquid securities; however, an active dealer market, or other relevant measures of liquidity, may exist for CLOs allowing a CLO potentially to be deemed liquid under the Fund's liquidity policies. Additionally, CLOs carry risks, including, but not limited to: (a) the possibility that distributions from collateral securities will not be adequate to make interest or other payments; (b) the risk that the collateral securities may decline in value or quality or be downgraded or go into default, particularly during periods of economic downturn; (c) the possibility that the Fund may invest in CLOs that are subordinate to other classes; (d) the risk that the manager of the CLOs may perform poorly; and (e) the risk that the complex structure of CLOs may produce disputes with the issuer or unexpected investment results. CLOs also can be difficult to value and may be highly leveraged (which could make them highly volatile), and the use of CLOs may result in losses to the Fund.
Convertible Securities Risk —  A convertible security is a form of hybrid security; that is, a security with both debt and equity characteristics. The value of a convertible security fluctuates in relation to changes in interest rates and the credit quality of the issuer and also fluctuates in relation to changes in the price of the underlying common stock. A convertible security may be subject to
1290 Loomis Sayles Multi-Asset Income Fund 41
redemption at the option of the issuer at a price established in the convertible security’s governing instrument, which may be less than the current market price of the security. If a convertible security held by the Fund is called for redemption, the Fund will be required to permit the issuer to redeem the security, convert it into underlying common stock or sell it to a third party. Convertible securities are subject to equity risk, interest rate risk and credit risk and are often lower-quality securities. Lower quality may lead to greater volatility in the price of a security and may negatively affect a security’s liquidity. Since it derives a portion of its value from the common stock into which it may be converted, a convertible security is also subject to the same types of market and issuer-specific risks that apply to the underlying common stock.
ETFs Risk —  The Fund’s shareholders will indirectly bear fees and expenses paid by the ETFs in which it invests, in addition to the Fund’s direct fees and expenses. The cost of investing in the Fund, therefore, may be higher than the cost of investing in a mutual fund that invests directly in individual stocks and bonds. In addition, the Fund’s net asset value will be subject to fluctuations in the market values of the ETFs in which it invests. The Fund is also subject to the risks associated with the securities or other investments in which the ETFs invest, and the ability of the Fund to meet its investment objective will directly depend on the ability of the ETFs to meet their investment objectives. A passively managed (or index-based) ETF’s performance may not match that of the index it seeks to track. An actively managed ETF’s performance will reflect its manager’s ability to make investment decisions that are suited to achieving the ETF’s investment objective. Furthermore, it is possible that an active trading market for an ETF may not develop or be maintained, in which case the liquidity and value of the Fund’s investment in the ETF could be substantially and adversely affected. The extent to which the investment performance and risks associated with the Fund correlate to those of a particular ETF will depend upon the extent to which the Fund’s assets are allocated from time to time for investment in the ETF, which will vary.
Investment Style Risk —  The Fund may use a particular style or set of styles — in this case, both “growth” and “value” styles — to select investments. Those styles may be out of favor or may not produce the best results over short or longer time periods. Growth stocks may be more sensitive to changes in current or expected earnings than the prices of other stocks. Growth investing also is subject to the risk that the stock price of one or more companies will fall or will fail to appreciate as anticipated by the Fund, regardless of movements in the securities market. Growth stocks also tend to be more volatile than value stocks, so in a declining market their prices may decrease more than value stocks in general. Growth stocks also may increase the volatility of the Fund's share price. Value stocks are subject to the risks that, notwithstanding that a stock is selling at a discount to its perceived true worth, the stock’s full value may never be fully recognized or realized by the market, or its price may go down. In addition, there is the risk that a stock judged to be undervalued may actually have been appropriately priced at the time of investment.
Large Transaction Risk —  A significant percentage of the Fund’s shares may be owned or controlled by the Adviser and its affiliates, other Funds advised by the Adviser (including funds of funds), or other large shareholders. Accordingly, the Fund is subject to the potential for large-scale inflows and outflows as a result of purchases and redemptions of its shares by such shareholders. These inflows and outflows could negatively affect the Fund’s net asset value and performance.
Leveraging Risk —  When the Fund leverages its holdings, the value of an investment in the Fund will be more volatile and all other risks will tend to be compounded. Investments that create leverage can result in losses to the Fund that exceed the amount originally invested and may accelerate the rate of losses (some of which may be sudden or substantial). For certain investments that create leverage, relatively small market fluctuations can result in large changes in the value of such investments. There can be no assurance that the Fund's use of any leverage will be successful.
Liquidity Risk —  From time to time, there may be little or no active trading market for a particular investment in which the Fund may invest or is invested. In such a market, the value of such an investment and the Fund's share price may fall dramatically. Illiquid investments may be difficult or impossible to sell or purchase at an advantageous time or price or in sufficient amounts to achieve the Fund's desired level of exposure. To meet redemption requests during periods of illiquidity, the Fund may be forced to dispose of investments at unfavorable times or prices and/or under unfavorable conditions, which may result in a loss or may be costly to the Fund. Investments that are illiquid or that trade in lower volumes may be more difficult to value. The Fund also may not receive its proceeds from the sale of certain investments for an extended period of time. Certain investments that were liquid when purchased may later become illiquid, sometimes abruptly, particularly in times of overall economic distress or adverse investor perception. An inability to sell a portfolio position can adversely affect the Fund's value or prevent the Fund from being able to take advantage of other investment opportunities. During periods of market stress, an investment or even an entire market segment may become illiquid, sometimes abruptly, which can adversely affect the Fund's ability to limit losses. In addition, a reduction in the ability or willingness of dealers and other institutional investors to make a market in certain securities may result in decreased liquidity in certain markets.
Loan Risk —  A bank loan represents an interest in a loan or other direct indebtedness that entitles the acquirer of such interest to payments of interest, principal and/or other amounts due under the structure of the loan. Loan interests are subject to liquidity risk, prepayment risk, extension risk, the risk of subordination to other creditors, restrictions on resale, and the lack of a regular trading market and publicly available information. Loan interests may be difficult to value and may have extended trade settlement periods. As a result, the proceeds from the sale of a loan may not be available to make additional investments or to meet redemption obligations
42 1290 Loomis Sayles Multi-Asset Income Fund
until potentially a substantial period after the sale of the loan. The extended trade settlement periods could force the Fund to liquidate other securities to meet redemptions and may present a risk that the Fund may incur losses in order to timely honor redemptions. There is a risk that the value of any collateral securing a loan in which the Fund has an interest may decline and that the collateral may not be sufficient to cover the amount owed on the loan. In the event the borrower defaults, the Fund's access to the collateral may be limited or delayed by bankruptcy or other insolvency laws. Loans may not be considered “securities,” and purchasers, such as the Fund, therefore may not have the benefit of the anti-fraud protections of the federal securities laws. To the extent that the Fund invests in loan participations and assignments, it is subject to the risk that the financial institution acting as agent for all interests in a loan might fail financially. It is also possible that the Fund could be held liable, or may be called upon to fulfill other obligations, as a co-lender.
Master Limited Partnership Risk —  Investing in MLPs involves certain risks related to investing in the underlying assets of the MLPs and risks associated with pooled investment vehicles. MLPs holding credit-related investments are subject to interest rate risk and the risk of default on payment obligations by debt issuers. MLPs that concentrate in a particular industry or a particular geographic region are subject to risks associated with such industry or region. Investments held by MLPs may be relatively illiquid, limiting the MLPs’ ability to vary their portfolios promptly in response to changes in economic or other conditions. MLPs may have limited financial resources, their securities may trade infrequently and in limited volume, and they may be subject to more abrupt or erratic price movements than securities of larger or more broadly based companies, and may be difficult to value. Distributions from an MLP may consist in part of a return of the amount originally invested, which would not be taxable to the extent the distributions do not exceed the investor’s adjusted basis in its MLP interest. These reductions in the Fund’s adjusted tax basis in the MLP securities will increase the amount of gain (or decrease the amount of loss) recognized by the Fund on a subsequent sale of the securities.
Mortgage-Related and Other Asset-Backed Securities Risk —  Declines in the credit quality of and defaults by the issuers of mortgage-related and other asset-backed securities or instability in the markets for such securities may decrease the value of such securities, which could result in losses to the Fund, and may reduce the liquidity of such securities and make such securities more difficult to purchase or sell at an advantageous time and price. In addition, borrowers may default on the obligations that underlie mortgage-related and other asset-backed securities. The risk of defaults by borrowers generally is greater during times of rising interest rates and/or unemployment rates. The impairment (or loss) of the value of collateral or other assets underlying mortgage-related and other asset-backed securities will result in a reduction in the value of the securities. Certain collateral may be difficult to locate in the event of default, or may be lost, and recoveries of depreciated or damaged collateral may not fully cover payments due on such collateral. Asset-backed securities may not have the benefit of a security interest in collateral comparable to that of mortgage assets, resulting in additional credit risk.
In addition, certain mortgage-related and other asset-backed securities may include securities backed by pools of loans made to “subprime” borrowers or borrowers with blemished credit histories. The risk of defaults by borrowers is generally higher in the case of asset or mortgage pools that include subprime assets or mortgages, and the liquidity and value of subprime mortgages and non-investment grade mortgage-backed securities that are not guaranteed by Ginnie Mae, Fannie Mae, and Freddie Mac could change dramatically over time.
Furthermore, mortgage-related and other asset-backed securities typically provide the issuer with the right to prepay the security prior to maturity. During periods of rising interest rates, the rate of prepayments tends to decrease because borrowers are less likely to prepay debt (such as mortgage debt or automobile loans). Slower than expected payments can extend the average lives of mortgage-related and other asset-backed securities, and this may “lock in” a below market interest rate and increase the security’s duration and interest rate sensitivity, which may increase the volatility of the security’s value and may lead to losses. During periods of falling interest rates, the rate of prepayments tends to increase because borrowers are more likely to pay off debt and refinance at the lower interest rates then available. Unscheduled prepayments shorten the average lives of mortgage-related and other asset-backed securities and may result in the Fund’s having to reinvest the proceeds of the prepayments at lower interest rates, thereby reducing the Fund’s income.
Portfolio Management Risk —  The Fund is subject to the risk that strategies used by an investment manager and its securities selections fail to produce the intended results. An investment manager’s judgments or decisions about the quality, relative yield or value of, or market trends affecting, a particular security or issuer, industry, sector, region or market segment, or about the economy or interest rates, may be incorrect or otherwise may not produce the intended results, which may result in losses to the Fund. In addition, many processes used in Fund management, including security selection, rely, in whole or in part, on the use of various technologies. The Fund may suffer losses if there are imperfections, errors or limitations in the quantitative, analytic or other tools, resources, information and data used, or the analyses employed or relied on, by an investment manager, or if such tools, resources, information or data are used incorrectly, fail to produce the desired results, or otherwise do not work as intended. There can be no assurance that the use of these technologies will result in effective investment decisions for the Fund.
1290 Loomis Sayles Multi-Asset Income Fund 43
Portfolio Turnover Risk —  High portfolio turnover (generally, turnover in excess of 100% in any given fiscal year) may result in increased transaction costs to the Fund, which may result in higher fund expenses and lower total return.
Preferred Stock Risk —  Preferred stock is subject to many of the risks associated with debt securities, including interest rate risk. Unlike interest payments on debt securities, dividends on preferred stock are generally payable at the discretion of the issuer’s board of directors. Preferred shareholders may have certain rights if dividends are not paid but generally have no legal recourse against the issuer. Shareholders may suffer a loss of value if dividends are not paid. In certain situations an issuer may call or redeem its preferred stock or convert it to common stock. The market prices of preferred stocks are generally more sensitive to actual or perceived changes in the issuer’s financial condition or prospects than are the prices of debt securities.
Prepayment Risk and Extension Risk —  Prepayment risk is the risk that the issuer of a security held by the Fund may pay off principal more quickly than originally anticipated. This may occur when interest rates fall. The Fund may have to reinvest the proceeds in an investment offering a lower yield, may not benefit from any increase in value that might otherwise result from declining interest rates and may lose any premium it paid to acquire the security. Extension risk is the risk that the issuer of a security held by the Fund may pay off principal more slowly than originally anticipated. This may occur when interest rates rise. The Fund may be prevented from reinvesting the proceeds it would have received at a given time in an investment offering a higher yield.
Privately Placed and Other Restricted Securities Risk —  Restricted securities, which include privately placed securities, are securities that cannot be offered for public resale unless registered under the applicable securities laws or that have a contractual restriction that prohibits or limits their resale. Before they are registered, such securities may be sold only in a privately negotiated transaction or pursuant to an exemption from registration. Difficulty in selling securities may result in a loss or be costly to the Fund. Rule 144A is designed to facilitate efficient trading among institutional investors by permitting the sale of certain unregistered securities to qualified institutional buyers. To the extent restricted securities held by the Fund qualify under Rule 144A and an institutional market develops for those securities, the Fund likely will be able to dispose of the securities without registering them. To the extent that institutional buyers become, for a time, uninterested in purchasing these securities, investing in Rule 144A securities could increase the level of the Fund’s illiquidity. The Adviser or Sub-Adviser may determine that certain securities qualified for trading under Rule 144A are liquid. Where registration of a security is required, the Fund may be obligated to pay all or part of the registration expenses, and a considerable period may elapse between the time the Fund desires to sell (and therefore decides to seek registration of) the security, and the time the Fund may be permitted to sell the security under an effective registration statement. If, during such a period, adverse market conditions were to develop, the Fund might obtain a less favorable price than prevailed when it desired to sell. The risk that securities may not be sold for the price at which the Fund is carrying them is greater with respect to restricted securities than it is with respect to registered securities. The illiquidity of the market, as well as the lack of publicly available information regarding these securities, also may make it difficult to determine a fair value for certain securities for purposes of computing the Fund’s net asset value.
Real Estate Investing Risk —  Real estate-related investments may decline in value as a result of factors affecting the overall real estate industry. Real estate is a cyclical business, highly sensitive to supply and demand, general and local economic developments and characterized by intense competition and periodic overbuilding. Real estate income and values also may be greatly affected by demographic trends, such as population shifts or changing tastes and values. For example, the coronavirus disease (COVID-19) pandemic has impacted certain real estate sectors by accelerating the trend towards online shopping and remote-working environments. Losses may occur from casualty or condemnation, and government actions, such as tax law changes, zoning law changes, regulatory limitations on rents, or environmental regulations, also may have a major impact on real estate. The availability of mortgages and changes in interest rates may also affect real estate values. Changing interest rates and credit quality requirements also will affect the cash flow of real estate companies and their ability to meet capital needs. In addition, global climate change may have an adverse effect on property and security values and may exacerbate the risks of natural disasters.
Real estate investment trusts (“REITs”) generally invest directly in real estate (equity REITs), in mortgages secured by interests in real estate (mortgage REITs) or in some combination of the two (hybrid REITs). Investing in REITs exposes investors to the risks of owning real estate directly, as well as to risks that relate specifically to the way in which REITs are organized and operated. Equity REITs may be affected by changes in the value of the underlying property owned by the REIT, while mortgage REITs may be affected by the quality of any credit extended. Equity and mortgage REITs are also subject to heavy cash flow dependency, defaults by borrowers, and self-liquidations.
Operating REITs requires specialized management skills, and a portfolio that invests in REITs indirectly bears REIT management and administration expenses along with the direct expenses of the portfolio. Individual REITs may own a limited number of properties and may concentrate in a particular region or property type. Domestic REITs also must satisfy specific Internal Revenue Code requirements to qualify for the tax-free pass-through of net investment income and net realized gains distributed to shareholders. Failure to meet these requirements may have adverse consequences on the Fund. In addition, even the larger REITs in the industry
44 1290 Loomis Sayles Multi-Asset Income Fund
tend to be small- to medium-sized companies in relation to the equity markets as a whole. Moreover, shares of REITs may trade less frequently and, therefore, are subject to more erratic price movements than securities of larger issuers.
Redemption Risk —  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 heightened during periods of declining or illiquid markets. Heavy redemptions could hurt the Fund's performance.
Market developments and other factors, including a general rise in interest rates, have 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. The market-making capacity of dealers has been reduced in recent years, in part as a result of structural changes, such as fewer proprietary trading desks at broker-dealers and increased regulatory capital requirements. In addition, significant securities market disruptions related to the coronavirus disease (COVID-19) pandemic have led to dislocation in the market for a variety of fixed income securities (including, without limitation, commercial paper, corporate debt securities, certificates of deposit, asset-backed debt securities and municipal obligations), which has decreased liquidity and sharply reduced returns in certain cases. Increased redemptions from mutual funds that hold large amounts of fixed income securities, 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.
Sector Risk —  From time to time, based on market or economic conditions, the Fund may have significant positions in one or more sectors of the market. To the extent the Fund invests more heavily in particular sectors, its performance will be especially sensitive to developments that significantly affect those sectors. Individual sectors may be more volatile, and may perform differently, than the broader market. The industries that constitute a sector may all react in the same way to economic, political or regulatory events.
Risk/Return Bar Chart and Table
The bar chart and table below provide some indication of the risks of investing in the Fund by showing changes in the Fund's performance from year to year and by showing how the Fund's average annual total returns for the past one-year, five-year and since inception periods through December 31, 2022, compared to the returns of a broad-based securities market index. The return of the broad-based securities market index (and any additional comparative index) shown for the since inception period below is the return of the index since the inception of the share class with the longest history. The additional broad-based securities market indexes and the hypothetical composite index show how the Fund’s performance compared with the returns of other asset classes in which the Fund invests. Past performance (before and after taxes) is not an indication of future performance.
Performance information for the periods prior to August 19, 2022, is that of the Fund when it followed a different investment objective and different principal investment strategy, and was managed by a different Sub-Adviser. If the Fund had historically been managed using its current investment strategy, the performance of the Fund would have been different.
The performance results shown in the bar chart do not reflect any sales charges or account fees, which would reduce the performance results. Class T shares of the Fund have not commenced operations. Performance information for Class T shares will be available after Class T shares have been in operation for one full calendar year.  
 Calendar Year Annual Total Returns — Class I
  
Best quarter (% and time period)
14.08%
2020 2nd Quarter
Worst quarter (% and time period)
-11.75%
2022 2nd Quarter
1290 Loomis Sayles Multi-Asset Income Fund 45
  
 Average Annual Total Returns
 
 
One
Year
Five
Years
Since
Inception
Inception
Date
1290 Loomis Sayles Multi-Asset Income Fund - Class I
Return Before Taxes
-8.50%
5.43%
6.52%
03/07/2016
1290 Loomis Sayles Multi-Asset Income Fund - Class I
Return After Taxes on Distributions
-9.89%
3.12%
4.30%
03/07/2016
1290 Loomis Sayles Multi-Asset Income Fund - Class I
Return After Taxes on Distributions and Sale of Fund Shares
-4.74%
3.46%
4.36%
03/07/2016
1290 Loomis Sayles Multi-Asset Income Fund - Class A
Return Before Taxes
-13.77%
3.98%
5.38%
03/07/2016
1290 Loomis Sayles Multi-Asset Income Fund - Class R
Return Before Taxes
-8.98%
4.88%
5.98%
03/07/2016
1290 Multi-Asset Income Index1 (reflects no deduction for fees, expenses, or taxes)
-10.36%
2.38%
4.28%
 
Bloomberg U.S. Aggregate Bond Index (reflects no deduction for fees, expenses, or taxes)
-13.01%
0.02%
0.66%
 
MSCI World High Dividend Yield Index2 (reflects no deduction for fees, expenses or taxes except
foreign withholding taxes)
-4.74%
4.66%
7.20%
 
Cboe S&P 500 BuyWrite IndexSM (reflects no deduction for fees, expenses, or taxes)
-11.37%
2.73%
5.11%
 
Bloomberg U.S. Corporate High Yield Index (reflects no deduction for fees, expenses, or taxes)
-11.19%
2.31%
4.91%
 
60% S&P 500® Index/40% Bloomberg U.S. Aggregate Bond Index1 (reflects no deduction for
fees, expenses, or taxes)
-15.79%
5.96%
7.67%
 
S&P 500® Index (reflects no deduction for fees, expenses, or taxes)
-18.11%
9.42%
12.07%
 
Bloomberg U.S. Aggregate Bond Index (reflects no deduction for fees, expenses, or taxes)
-13.01%
0.02%
0.66%
 
1
Effective August 19, 2022, the hypothetical composite index against which the Fund measures its performance, a blend of the S&P 500® Index (60%) and the Bloomberg U.S. Aggregate Bond Index (40%), was replaced with the 1290 Multi-Asset Income Index, which is a hypothetical composite index comprising a blend of the Bloomberg U.S. Aggregate Bond Index (30%); the MSCI World High Dividend Yield Index (20%); the Cboe S&P 500 BuyWrite IndexSM (20%); and the Bloomberg U.S. Corporate High Yield Index (30%). The MSCI World High Dividend Yield Index is net of withholding taxes for dividend payments. The Adviser believes this benchmark is more relevant to the Fund’s investment strategy and better reflects the markets in which the Fund invests.
2
The MSCI World High Dividend Yield Index is net of withholding taxes for dividend payments.
After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs). The returns after taxes on distributions and sale of Fund shares may be higher than other returns for the same period due to an assumed tax benefit from any losses on a sale of Fund shares at the end of the measurement period. After-tax returns are shown only for Class I shares. After-tax returns for other Classes may vary.
Who Manages the Fund
Investment Adviser: Equitable Investment Management, LLC (the “Adviser”)
Portfolio Managers:  The members of the team that are jointly and primarily responsible for the selection, monitoring and oversight of the Fund’s Sub-Adviser are: 
Name
Title
Date Began
Managing
the Fund
Kenneth T. Kozlowski, CFP®, CLU, ChFC
Executive Vice President and Chief Investment
Officer of the Adviser
March 2016
Alwi Chan, CFA®
Senior Vice President and Deputy Chief
Investment Officer of the Adviser
March 2016
46 1290 Loomis Sayles Multi-Asset Income Fund
Sub-Adviser: Loomis, Sayles & Company, L.P. (“Loomis Sayles”)
Portfolio Managers:  The individuals jointly and primarily responsible for the securities selection, research and trading for the Fund are: 
Name
Title
Date Began
Managing
the Fund
Elaine Kan, CFA
Vice President, Portfolio Manager of Loomis
Sayles
August 2022
Kevin Kearns
Vice President, Portfolio Manager & Head of
Alpha Strategies of Loomis Sayles
August 2022
Vivek Garg, CFA
Vice President, Portfolio Manager of Loomis
Sayles
August 2022
The Adviser is responsible for overseeing Sub-Advisers and recommending their hiring, termination and replacement to the Board of Trustees. The Adviser has been granted relief by the Securities and Exchange Commission to hire, terminate and replace Sub-Advisers and amend sub-advisory agreements subject to the approval of the Board of Trustees and without obtaining shareholder approval. However, the Adviser may not enter into a sub-advisory agreement on behalf of the Fund with an “affiliated person” of the Adviser unless the sub-advisory agreement is approved by the Fund's shareholders. The relief does not extend to any increase in the advisory fee paid by the Fund to the Adviser; any such increase would be subject to shareholder approval.
Purchase and Redemption of Fund Shares
You may purchase and redeem shares of the Fund each day the New York Stock Exchange is open for trading at the Fund’s net asset value determined after receipt of your request in good order, subject to any applicable sales charge. All share classes are currently not offered for sale in all states. Initial purchases must be effected through your financial intermediary. Subsequently, you may purchase or redeem shares either by having your financial intermediary process your purchase or redemption, or by telephone (1-888-310-0416), by overnight mail (1290 Funds, c/o SS&C GIDS, Inc., 430 W. 7th Street, Suite 219166, Kansas City, MO 64105-1407), or by mail (1290 Funds, PO Box 219166, Kansas City, MO 64121-9166). All redemption requests will be processed and payment with respect thereto will normally be made within seven days after receipt of your request in good order.
The initial and subsequent minimums for purchasing shares of the Fund generally are as follows, although the Fund may reduce or waive the minimums in some cases: 
 
Class A
Class T
Class I
Class R
Minimum Initial Investment
$1,000 for all accounts
except:
• $500 for certain fee-based
programs.
• $500, if establishing an
Automatic Bank Draft Plan.
• $250 minimum for
purchases by accounts
through eligible financial
intermediary platforms
that have entered into
selling or service
agreements with the
Distributor and that are
eligible to purchase
Class A shares without a
sales charge.
• No minimum for certain
employer-sponsored
retirement plans and
certain wrap fee based
programs.
$1,000 for all accounts
except:
• $500 for certain fee-based
programs.
• $500, if establishing an
Automatic Bank Draft Plan.
• No minimum for certain
employer-sponsored
retirement plans and
certain wrap fee based
programs.
• $1,000,000 for certain
institutions and individuals.
• $1,000 for certain
employees (or their
immediate family
members) of Equitable
Holdings, Inc. or its
subsidiaries.
• Class I shares are available
to clients of registered
investment advisers who
have $250,000 invested in
the Fund.
• No minimum investment
for a wrap account client
of an eligible broker-dealer
or a client of a fee-based
planner that is unaffiliated
with a broker-dealer, or a
client of an investment
adviser, trustee,
administrator or institution
acting in a similar capacity
No minimum
1290 Loomis Sayles Multi-Asset Income Fund 47
 
Class A
Class T
Class I
Class R
 
 
 
that invests in the Fund
through a retirement plan
where the administrator or
service provider of such
retirement plan has
entered into a services
agreement with the Fund’s
distributor and/or
investment adviser.
 
Minimum Additional
Investment
$50 for all accounts
$50 for all accounts
No subsequent minimum
No subsequent minimum
Your financial intermediary may impose different investment minimums.
Tax Information
The Fund’s dividends and other distributions generally will be subject to federal income tax as ordinary income or long-term capital gains, unless you are a tax-exempt investor or are investing through a retirement plan or account; in the latter case, you may be subject to that tax upon withdrawal from the plan or account.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase shares of the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of Fund shares, shareholder services and other purposes. These payments create a conflict of interest by influencing the broker-dealer or other intermediary and your investment professional to recommend the Fund over another investment. Ask your financial adviser or visit your financial intermediary’s website for more information.
48 1290 Loomis Sayles Multi-Asset Income Fund
1290 Multi-Alternative Strategies Fund  — Class A (TNMAX), Class T (TNMCX), Class I (TNMIX) and Class R (TNMRX) Shares
Investment Objective: Seeks long-term growth of capital.
Fees and Expenses of the Fund
The following table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table and example below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in 1290 Funds’ funds. More information about these and other discounts is available from your financial professional and in the “How Sales Charges are Calculated” and “Ways to Reduce or Eliminate Sales Charges” sections of the Fund’s Prospectus, and the “Purchase, Redemption and Pricing of Shares” section of the Fund’s Statement of Additional Information.  
 Shareholder Fees
 (fees paid directly from your investment)
 
1290 Multi-Alternative Strategies Fund
Class A
Shares
Class T
Shares
Class I
Shares
Class R
Shares
Maximum sales charge (load) imposed on purchases (as a percentage of offering price)
5.50%
2.50%
None
None
Maximum contingent deferred sales charge (load) (as a percentage of original purchase price or redemption
proceeds, whichever is lower)
1.00%1
None
None
None
Maximum account fee (deducted from accounts with a balance of less than $1,000)
$25
$25
$25
$25
1 On shares purchased without an initial sales charge and redeemed within 12 months of purchase.  
 Annual Fund Operating Expenses
 (expenses that you pay each year as a percentage of the value of your investment)
 
1290 Multi-Alternative Strategies Fund
Class A
Shares
Class T
Shares
Class I
Shares
Class R
Shares
Management Fee
0.50%
0.50%
0.50%
0.50%
Distribution and/or Service Fees (12b-1 fees)
0.25%
0.25%
0.00%
0.50%
Other Expenses
1.11%
1.11%1
1.11%
1.11%
Acquired Fund Fees and Expenses
0.45%
0.45%1
0.45%
0.45%
Total Annual Fund Operating Expenses
2.31%
2.31%
2.06%
2.56%
Fee Waiver and/or Expense Reimbursement2
(0.76)%
(0.76)%
(0.76)%
(0.76)%
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement
1.55%
1.55%
1.30%
1.80%
1
Based on estimated amounts for the current fiscal year.
2
Pursuant to a contract, Equitable Investment Management, LLC (the “Adviser”) has agreed to make payments or waive its and its affiliates’ management, administrative and other fees to limit the expenses of the Fund through April 30, 2024 (unless the Board of Trustees consents to an earlier revision or termination of this arrangement) (“Expense Limitation Arrangement”) so that the annual operating expenses of the Fund (exclusive of taxes, interest, brokerage commissions, capitalized expenses (other than offering costs), fees and expenses of other investment companies in which the Fund invests, 12b-1 fees, dividend and interest expenses on securities sold short, and extraordinary expenses not incurred in the ordinary course of the Fund’s business) do not exceed an annual rate of average daily net assets of 0.85% for Class A shares, Class T shares, Class I shares, and Class R shares of the Fund. The Expense Limitation Arrangement may be terminated by the Adviser at any time after April 30, 2024. The Adviser may be reimbursed the amount of any such payments or waivers in the future provided that the payments or waivers are reimbursed within three years of the payments or waivers being recorded and the Fund’s expense ratio, after the reimbursement is taken into account, does not exceed the Fund’s expense cap at the time of the waiver or the Fund’s expense cap at the time of the reimbursement, whichever is lower. The total annual fund operating expense ratios after fee waiver and/or expense reimbursement for Class A shares, Class T shares, Class I shares, and Class R shares, as shown in the table, are higher than the Fund’s expense cap because these ratios include 12b-1 fees, as applicable, fees and expenses of other investment companies in which the Fund invests, and certain other expenses, as noted above, that are excluded from the Expense Limitation Arrangement.
Example
This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds. The Example assumes that you invest $10,000 in the Fund for the periods indicated, that your investment has a 5% return each year, that the Fund's operating expenses remain the same and that the Expense Limitation Arrangement is not renewed.
1290 Multi-Alternative Strategies Fund 49
Although your actual costs may be higher or lower, based on these assumptions, whether you redeem or hold your shares, your costs would be: 
 
1 Year
3 Years
5 Years
10 Years
Class A Shares
$699
$1,163
$1,652
$2,995
Class T Shares
$404
$882
$1,387
$2,773
Class I Shares
$132
$572
$1,038
$2,329
Class R Shares
$183
$724
$1,292
$2,838
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the Example, affect the Fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 26% of the average value of its portfolio.
Investments, Risks, and Performance
Principal Investment Strategy
The Fund pursues its investment objective by investing in exchange-traded securities of other investment companies or investment vehicles (“Underlying ETFs”) comprising various asset categories and strategies. Under normal market conditions, the Fund allocates substantially all of its assets to Underlying ETFs that invest primarily in non-traditional (alternative) asset categories and strategies. The Fund seeks to invest its assets among the Underlying ETFs to achieve a diversified exposure across multiple alternative asset categories and strategies. The Fund’s weightings in these alternative asset categories and strategies are determined by Equitable Investment Management, LLC (the “Adviser”), the Fund’s investment adviser. In considering the weightings to be allocated to each alternative asset category and strategy, the Adviser may consider, among other things, momentum factors to determine the relative attractiveness of each asset category and strategy. Momentum is the tendency of investments to exhibit persistence in their performance. When momentum deteriorates, the Adviser may reduce the Fund’s exposure to a particular asset category or strategy.
The alternative asset categories and strategies of the Underlying ETFs in which the Fund may invest are as follows: 
Commodities
Long/Short Equity
Convertible Securities
Managed Futures
Event Driven
Real Return
Global Real Estate
 
The percentage of the Fund’s assets exposed to an alternative asset category or strategy will vary from time to time, and the Fund may not invest in all of the alternative asset categories or strategies listed. In addition, the Adviser may allocate the Fund’s assets to additional alternative asset categories and strategies in the future.
Alternative investments are alternatives to traditional equity (stocks) or fixed income (bonds and cash) investments. Alternative investments have the potential to enhance portfolio diversification and reduce overall portfolio volatility because these investments may not have a strong correlation (relationship) to one another or to traditional market indexes. Alternative investments use a different approach to investing than do traditional investments. This approach may involve, for example, holding both long and short positions in securities or using derivatives or hedging strategies. Many alternative investment strategies are designed to help reduce the role of overall market direction in determining return.
The Underlying ETFs are investment companies or other investment vehicles whose shares are listed and traded on U.S. stock exchanges or otherwise traded in the over-the-counter market and may be purchased and sold throughout the trading day based on their market price. Generally, an Underlying ETF seeks to track a securities or commodity index or a basket of securities or commodities that an “index provider” (such as Standard & Poor’s, Dow Jones, Russell or Morgan Stanley Capital International) selects as representative of a market, market segment, industry sector, country or geographic region. An index-based Underlying ETF generally holds the same stocks, bonds or other assets as the index it seeks to track (or it may
50 1290 Multi-Alternative Strategies Fund
hold a representative sample of such securities or assets). Accordingly, an index-based Underlying ETF is designed so that its performance, before fees and expenses, will correspond with that of the index it seeks to track. Underlying ETFs also may be actively managed.
The Adviser selects the Underlying ETFs in which to invest the Fund’s assets. In selecting Underlying ETFs, the Adviser will utilize a proprietary investment process that may take into consideration a number of factors including, as appropriate and applicable, fund performance, management team, investment style, correlations, asset class exposure, industry classification, benchmark, risk adjusted return, volatility, expense ratio, asset size and portfolio turnover. For purposes of asset class and asset category target allocations, where an Underlying ETF could be assigned to more than one asset category, the Adviser may, in its discretion, assign an Underlying ETF to one or more asset categories.
For purposes of complying with the Fund’s investment policies, the Adviser will identify Underlying ETFs in which to invest by reference to such Underlying ETFs’ investment policies at the time of investment. An Underlying ETF that changes its investment policies subsequent to the time of the Fund’s investment may continue to be considered an appropriate investment for purposes of the policy. The Adviser may add new Underlying ETFs or replace or eliminate existing Underlying ETFs without notice or shareholder approval. The Underlying ETFs have been selected to represent a reasonable spectrum of investment options for the Fund. The Adviser may sell the Fund’s holdings for a variety of reasons, including to invest in an Underlying ETF believed to offer superior investment opportunities. The Fund may hold cash or invest in short-term paper and other short-term investments (instead of allocating investments to an Underlying ETF) as deemed appropriate by the Adviser.
Principal Risks
An investment in the Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The value of your investment may fall, sometimes sharply, and you could lose money by investing in the Fund. There can be no assurance that the Fund will achieve its investment objective.
The Fund is also subject to the risks associated with the Underlying ETFs’ investments; please see the “Information Regarding the Underlying ETFs” section of the Fund’s Prospectus, and the Prospectuses and Statements of Additional Information for the Underlying ETFs for additional information about these risks.
The following risks can negatively affect the Fund’s performance. The most significant risks as of the date of this Prospectus are presented first, followed by additional principal risks in alphabetical order. In this section, the term “Fund” may include the Fund, an Underlying ETF, or both.
Market Risk —  The Fund is subject to the risk that the securities markets will move down, sometimes rapidly and unpredictably, based on overall economic conditions and other factors, which may negatively affect Fund performance. Securities markets also may experience long periods of decline in value. The value of a security may decline due to factors that are specifically related to a particular company, as well as general market conditions, such as real or perceived adverse economic or political conditions, inflation rates and/or investor expectations concerning such rates, changes in interest rates, recessions, or adverse investor sentiment generally. During a general downturn in the securities markets, multiple asset classes may decline in value simultaneously. Changes in the financial condition of a single issuer can impact a market as a whole.
Geopolitical events, including terrorism, tensions, war or other open conflicts between nations, or political or economic dysfunction within some nations that are global economic powers or major producers of oil, may lead to overall instability in world economies and markets generally and have led, and may in the future lead, to increased market volatility and may have adverse long-term effects. World markets, or those in a particular region, may all react in similar fashion to important economic, political or other developments. Events such as environmental and natural disasters or other catastrophes, public health crises (such as epidemics and pandemics), social unrest, and cybersecurity incidents, and governments’ reactions to such events, could cause uncertainty in the markets and may adversely affect the performance of the global economy. Impacts from climate change may include significant risks to global financial assets and economic growth. The extent and duration of such events and resulting market disruptions could be substantial and could magnify the impact of other risks to the Fund. The value and liquidity of the Fund’s investments may be negatively affected by developments in other countries and regions, whether or not the Fund invests in securities of issuers located in or with significant exposure to the countries or regions directly affected.
The U.S. Federal Reserve (“Fed”) has invested or otherwise made available substantial amounts of money to keep credit flowing through short-term money markets and has signaled that it will continue to adjust its operations as appropriate to support short-term money markets. Amid these efforts, concerns about the markets’ dependence on the Fed’s provision of liquidity have grown. Policy changes by the U.S. government and/or the Fed and political events within the United States may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree.
1290 Multi-Alternative Strategies Fund 51
A downgrade of the ratings of U.S. government debt obligations, or concerns about the U.S. government’s credit quality in general, could have a substantial negative effect on the U.S. and global economies. High public debt in the United States and other countries creates ongoing systemic and market risks and policymaking uncertainty.
In addition, markets and market participants are increasingly reliant on information data systems. Inaccurate data, 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.
Alternative Investment Risk —  To the extent the Fund invests in Underlying ETFs that invest in alternative investments, it will be subject to the risks associated with such investments. Alternative investments may involve a different approach to investing than do traditional investments (such as equity or fixed income investments) and the performance of alternative investments is not expected to correlate closely with more traditional investments; however, it is possible that alternative investments will decline in value along with equity or fixed income markets, or both, or that they may not otherwise perform as expected. Alternative investments may have different characteristics and risks than do traditional investments, can be highly volatile, may be less liquid, particularly in periods of stress, and may be more complex and less transparent than traditional investments. Alternative investments also may have more complicated tax considerations than traditional investments, which could involve investment structures subject to income tax that could adversely impact the return to shareholders. The use of alternative investments may not achieve the desired effect and may result in losses to the Fund.
Equity Risk —  In general, the values of stocks and other equity securities fluctuate, and sometimes widely fluctuate, in response to changes in a company’s financial condition as well as general market, economic and political conditions and other factors. The Fund may experience a significant or complete loss on its investment in an equity security. In addition, common stock prices may be particularly sensitive to rising interest rates, which increase borrowing costs and the costs of capital.
Commodity Risk —  Exposure to the commodities markets may subject the Fund to greater volatility than investments in traditional securities, and changes in those markets may cause the Fund's holdings to lose value. The commodities markets may fluctuate widely based on a variety of factors including changes in overall market movements, resource availability, domestic and foreign political and economic events and policies, trade policies and tariffs, war, acts of terrorism, changes in exchange rates, domestic or foreign interest rates or inflation rates and/or investor expectations concerning such rates, and trading activities in commodities. The prices of various commodities may also be affected by factors such as drought, floods and weather, pandemics, livestock disease, embargoes, tariffs and countermeasures, and regulatory developments. The prices of commodities can also fluctuate widely due to supply and demand disruptions in major producing or consuming regions. Certain commodities may be produced in a limited number of countries and may be controlled by a small number of producers. As a result, political, economic and supply-related events in such countries could have a disproportionate impact on the prices of such commodities. Securities of companies that are dependent on a single commodity, or are concentrated in a single commodity sector, may exhibit even higher volatility attributable to commodity prices. No active trading market may exist for certain commodities investments, which may impair the ability of the Fund to sell or realize the full value of such investments in the event of the need to liquidate such investments.
Momentum Risk —  Momentum entails investing more in securities that have recently had higher total returns and investing less in securities that have recently had lower total returns. These securities may be more volatile than a broad cross-section of securities, and momentum may be an indicator that a security’s price is peaking. Momentum can turn quickly, and utilizing momentum as a factor in the investment analysis process can cause significant variation from other types of investment strategies. The Fund may experience significant losses if a security’s momentum stops, turns or otherwise behaves differently than predicted.
Inflation-Indexed Bonds Risk —  Inflation-indexed bonds are fixed income securities whose principal value is periodically adjusted according to inflation. The value of inflation-indexed bonds is expected to change in response to changes in real interest rates. Real interest rates represent nominal (stated) interest rates reduced by the expected impact of inflation. In general, inflation-indexed bonds, including Treasury inflation-indexed securities, decline in value when real interest rates rise and rise in value when real interest rates decline. In certain interest rate environments, such as when real interest rates are rising faster than nominal interest rates, inflation-indexed bonds may experience greater losses than other fixed income securities with similar durations. Interest payments on inflation-indexed debt securities can be unpredictable and may vary as the principal and/or interest is adjusted for inflation. In periods of deflation, the Fund may have no income at all from such investments.
Liquidity Risk —  From time to time, there may be little or no active trading market for a particular investment in which the Fund may invest or is invested. In such a market, the value of such an investment and the Fund's share price may fall dramatically. Illiquid investments may be difficult or impossible to sell or purchase at an advantageous time or price or in sufficient amounts to achieve the Fund's desired level of exposure. To meet redemption requests during periods of illiquidity, the Fund may be forced to dispose of investments at unfavorable times or prices and/or under unfavorable conditions, which may result in a loss or may be costly to the Fund. Investments that are illiquid or that trade in lower volumes may be more difficult to value. The Fund also may not receive
52 1290 Multi-Alternative Strategies Fund
its proceeds from the sale of certain investments for an extended period of time. Certain investments that were liquid when purchased may later become illiquid, sometimes abruptly, particularly in times of overall economic distress or adverse investor perception. An inability to sell a portfolio position can adversely affect the Fund's value or prevent the Fund from being able to take advantage of other investment opportunities. During periods of market stress, an investment or even an entire market segment may become illiquid, sometimes abruptly, which can adversely affect the Fund's ability to limit losses. In addition, a reduction in the ability or willingness of dealers and other institutional investors to make a market in certain securities may result in decreased liquidity in certain markets.
Risks Related to Investments in Underlying ETFs —  The Fund's shareholders will indirectly bear the fees and expenses paid by the Underlying ETFs in which it invests, in addition to the Fund's direct fees and expenses. The cost of investing in the Fund, therefore, may be higher than the cost of investing in a mutual fund that invests directly in individual stocks and bonds. The Fund's performance depends upon a favorable allocation by the Adviser among the Underlying ETFs, as well as the ability of the Underlying ETFs to generate favorable performance. The Underlying ETFs’ investment programs may not be complementary, which could adversely affect the Fund's performance. The Fund's net asset value is subject to fluctuations in the market values of the Underlying ETFs in which it invests. The Fund is also subject to the risks associated with the securities or other investments in which the Underlying ETFs invest, and the ability of the Fund to meet its investment objective will directly depend on the ability of the Underlying ETFs to meet their respective investment objectives. The Fund and the Underlying ETFs are subject to certain general investment risks, including market risk, asset class risk, issuer-specific risk, investment style risk, portfolio management risk, and regulatory risk. In addition, to the extent the Fund invests in Underlying ETFs that invest in equity securities, fixed income securities, and/or foreign securities, the Fund is subject to the risks associated with investing in such securities. A passively managed (or index-based) ETF’s performance may not match that of the index it seeks to track. An actively managed ETF’s performance will reflect its manager’s ability to make investment decisions that are suited to achieving the ETF’s investment objective. Furthermore, it is possible that an active trading market for an Underlying ETF may not develop or be maintained, in which case the liquidity and value of the Fund's investment in the Underlying ETF could be substantially and adversely affected. The extent to which the investment performance and risks associated with the Fund correlate to those of a particular Underlying ETF will depend upon the extent to which the Fund's assets are allocated from time to time for investment in the Underlying ETF, which will vary.
Short Position Risk —  The Fund may engage in short sales and may enter into derivative contracts that have a similar economic effect (e.g., taking a short position in a futures contract). The Fund will incur a loss as a result of a short position if the price of the asset sold short increases between the date of the short position sale and the date on which an offsetting position is purchased. Short positions may be considered speculative transactions and involve special risks that could cause or increase losses or reduce gains, including greater reliance on the investment adviser’s ability to accurately anticipate the future value of a security or instrument, higher transaction costs, and imperfect correlation between the actual and desired level of exposure. Short sales, at least theoretically, present a risk of unlimited loss on an individual security basis, particularly in cases where the Fund is unable, for whatever reason, to close out its short position, because the Fund may be required to buy the security sold short at a time when the security has appreciated in value, and there is potentially no limit to the amount of such appreciation. In addition, by investing the proceeds received from selling securities short, the Fund could be deemed to be employing a form of leverage, in that it amplifies changes in the Fund’s net asset value because it increases the Fund’s exposure to the market and may increase losses and the volatility of returns. Market or other factors may prevent the Fund from closing out a short position at the most desirable time or at a favorable price.
Portfolio Management Risk —  The Fund is subject to the risk that strategies used by an investment manager and its securities selections fail to produce the intended results. An investment manager’s judgments or decisions about the quality, relative yield or value of, or market trends affecting, a particular security or issuer, industry, sector, region or market segment, or about the economy or interest rates, may be incorrect or otherwise may not produce the intended results, which may result in losses to the Fund. In addition, many processes used in Fund management, including security selection, rely, in whole or in part, on the use of various technologies. The Fund may suffer losses if there are imperfections, errors or limitations in the quantitative, analytic or other tools, resources, information and data used, or the analyses employed or relied on, by an investment manager, or if such tools, resources, information or data are used incorrectly, fail to produce the desired results, or otherwise do not work as intended. There can be no assurance that the use of these technologies will result in effective investment decisions for the Fund.
Credit Risk —  The Fund is subject to the risk that the issuer or guarantor of a fixed income security, or the counterparty to a transaction, is unable or unwilling, or is perceived as unable or unwilling, to make timely interest or principal payments or otherwise honor its obligations, or defaults completely, which may cause the Fund's holdings to lose value. The downgrade of a security’s credit rating may decrease its value. Lower credit quality also may lead to greater volatility in the price of a security and may negatively affect a security’s liquidity. The credit quality of a security can deteriorate suddenly and rapidly. The Fund may experience a significant or complete loss on a fixed income security or a transaction.
Interest Rate Risk —  Changes in interest rates may affect the yield, liquidity and value of investments in income producing or debt securities. Changes in interest rates also may affect the value of other securities. When interest rates rise, the value of the Fund's debt securities generally declines. Conversely, when interest rates decline, the value of the Fund's debt securities generally rises.
1290 Multi-Alternative Strategies Fund 53
Typically, the longer the maturity or duration of a debt security, the greater the effect a change in interest rates could have on the security’s price. Thus, the sensitivity of the Fund's debt securities to interest rate risk will increase the greater the duration of those securities. A significant or rapid rise in interest rates could result in losses to the Fund.
Convertible Securities Risk —  A convertible security is a form of hybrid security; that is, a security with both debt and equity characteristics. The value of a convertible security fluctuates in relation to changes in interest rates and the credit quality of the issuer and also fluctuates in relation to changes in the price of the underlying common stock. A convertible security may be subject to redemption at the option of the issuer at a price established in the convertible security’s governing instrument, which may be less than the current market price of the security. If a convertible security held by the Fund is called for redemption, the Fund will be required to permit the issuer to redeem the security, convert it into underlying common stock or sell it to a third party. Convertible securities are subject to equity risk, interest rate risk and credit risk and are often lower-quality securities. Lower quality may lead to greater volatility in the price of a security and may negatively affect a security’s liquidity. Since it derives a portion of its value from the common stock into which it may be converted, a convertible security is also subject to the same types of market and issuer-specific risks that apply to the underlying common stock.
Counterparty Risk —  The Fund may sustain a loss as a result of the insolvency or bankruptcy of, or other non-compliance or non-performance by, another party to a transaction.
Derivatives Risk —  The Fund's investments in derivatives may rise or fall in value more rapidly than other investments and may reduce the Fund's returns and increase the volatility of the Fund's net asset value. Investing in derivatives involves investment techniques and risk analyses different from, and risks in some respects greater than, those associated with investing in more traditional investments, such as stocks and bonds. Derivatives may be leveraged such that a small investment can have a significant impact on the Fund's exposure to stock market values, interest rates, or other investments. As a result, a relatively small price movement in a derivatives contract may cause an immediate and substantial loss, and the Fund could lose more than the amount it invested. Some derivatives can have the potential for unlimited losses. In addition, it may be difficult or impossible for the Fund to purchase or sell certain derivatives in sufficient amounts to achieve the desired level of exposure, or to terminate or offset existing arrangements, which may result in a loss or may be costly to the Fund. Some derivatives are more sensitive to market price fluctuations and to interest rate changes than other investments. Derivatives may not behave as anticipated by the Fund, and derivatives strategies that are successful under certain market conditions may be less successful or unsuccessful under other market conditions. The Fund also may be exposed to losses if the counterparty in the transaction is unable or unwilling to fulfill its contractual obligation. In certain cases, the Fund may be hindered or delayed in exercising remedies against or closing out derivatives with a counterparty, resulting in additional losses. Derivatives also may be subject to the risk of mispricing or improper valuation, and valuation may be more difficult in times of market turmoil. Changes to the regulation of derivatives markets and mutual funds’ use of derivatives may impact the Fund's ability to maintain its investments in derivatives, make derivatives more costly, limit their availability, adversely affect their value or performance, or otherwise disrupt markets.
Foreign Securities Risk —  Investments in foreign securities involve risks in addition to those associated with investments in U.S. securities. Foreign markets may be less liquid, more volatile and subject to less government supervision and regulation than U.S. markets, and it may take more time to clear and settle trades involving foreign securities, which could negatively impact the Fund's investments and cause it to lose money. Security values also may be negatively affected by changes in the exchange rates between the U.S. dollar and foreign currencies. Differences between U.S. and foreign legal, political and economic systems, regulatory regimes and market practices, as well as trade barriers and other protectionist trade policies (including those of the United States), governmental instability, war, or other political or economic actions, also may adversely impact security values. Foreign securities are also subject to the risks associated with the potential imposition of economic or other sanctions against a particular foreign country, its nationals, businesses or industries. World markets, or those in a particular region, may all react in similar fashion to important economic, political or other developments. Events and evolving conditions in certain economies or markets may alter the risks associated with investments tied to countries or regions that historically were perceived as comparatively stable and make such investments riskier and more volatile. Regardless of where a company is organized or its stock is traded, its performance may be significantly affected by events in regions from which it derives its profits or in which it conducts significant operations.
Currency Risk —  Investments that are denominated in or that provide exposure to foreign currencies are subject to the risk that those currencies will decline in value relative to the U.S. dollar. Any such decline may erode or reverse any potential gains from an investment in securities denominated in foreign currency or may widen existing loss. In the case of hedging positions, there is the risk that the U.S. dollar will decline in value relative to the currency being hedged. Currency rates may fluctuate significantly over short periods of time.
Emerging Markets Risk —  The risks associated with investments in emerging market countries often are significant, and vary from jurisdiction to jurisdiction and company to company. Investments in emerging market countries are more susceptible to loss than investments in more developed foreign countries and may present market, credit, currency, liquidity, legal, political,
54 1290 Multi-Alternative Strategies Fund
technical and other risks different from, or greater than, the risks of investing in more developed foreign countries. Emerging market countries may be more likely to experience rapid and significant adverse developments in their political or economic structures, intervene in financial markets, restrict foreign investments, impose high withholding or other taxes on foreign investments, impose restrictive exchange control regulations, or nationalize or expropriate the assets of private companies, which may have negative impacts on transaction costs, market price, investment returns and the legal rights and remedies available to the Fund. In addition, the securities markets of emerging market countries generally are smaller, less liquid and more volatile than those of more developed foreign countries, and emerging market countries often have less uniformity in regulatory, accounting, auditing and financial reporting requirements or standards, which may impact the availability and quality of information about issuers, and less reliable clearance and settlement, registration and custodial procedures. Emerging market countries also may be subject to high inflation and rapid currency devaluations, and currency-hedging techniques may be unavailable in certain emerging market countries. In addition, some emerging market countries may be heavily dependent on international trade, which can materially affect their securities markets. Securities of issuers traded on foreign exchanges may be suspended. The likelihood of such suspensions may be higher for securities of issuers in emerging market countries than in countries with more developed markets.
Futures Contract Risk —  The primary risks associated with the use of futures contracts are (a) the imperfect correlation between the change in market value of the instruments held by the Fund and the price of the futures contract; (b) liquidity risks, including the possible absence of a liquid secondary market for a futures contract and the resulting inability to close a futures contract when desired; (c) losses (potentially unlimited) caused by unanticipated market movements; (d) an investment manager’s inability to predict correctly the direction of securities prices, interest rates, currency exchange rates and other economic factors; (e) the possibility that a counterparty, clearing member or clearinghouse will default in the performance of its obligations; (f) if the Fund has insufficient cash, it may have to sell securities from its portfolio to meet daily variation margin requirements, and the Fund may have to sell securities at a time when it may be disadvantageous to do so; and (g) transaction costs associated with investments in futures contracts may be significant, which could cause or increase losses or reduce gains. Futures contracts are also subject to the same risks as the underlying investments to which they provide exposure. In addition, futures contracts may subject the Fund to leveraging risk.
Investment Grade Securities Risk —  Securities rated in the lower investment grade rating categories (e.g., BBB or Baa) are considered investment grade securities, but may have more risk than higher rated obligations because they are regarded as having only an adequate capacity to pay principal and interest, are considered to lack outstanding investment characteristics, and may possess certain speculative characteristics.
Large-Cap Company Risk —  Larger more established companies may be unable to respond quickly to new competitive challenges such as changes in technology and consumer tastes, which may lead to a decline in their market price. Many larger companies also may not be able to attain the high growth rate of successful smaller companies, especially during extended periods of economic expansion.
Large Transaction Risk —  A significant percentage of the Fund’s shares may be owned or controlled by the Adviser and its affiliates or other large shareholders. Accordingly, the Fund is subject to the potential for large-scale inflows and outflows as a result of purchases and redemptions of its shares by such shareholders. These inflows and outflows could negatively affect the Fund’s net asset value and performance.
Leveraging Risk —  When the Fund leverages its holdings, the value of an investment in the Fund will be more volatile and all other risks will tend to be compounded. Investments that create leverage can result in losses to the Fund that exceed the amount originally invested and may accelerate the rate of losses (some of which may be sudden or substantial). For certain investments that create leverage, relatively small market fluctuations can result in large changes in the value of such investments. There can be no assurance that the Fund's use of any leverage will be successful.
Mid-Cap and Small-Cap Company Risk —  Mid-cap and small-cap companies carry additional risks because the operating histories of these companies tend to be more limited, their earnings and revenues less predictable (and some companies may be experiencing significant losses), and their share prices more volatile than those of larger, more established companies, all of which can negatively affect their value. In general, these risks are greater for small-cap companies than for mid-cap companies.
Non-Investment Grade Securities Risk —  Bonds rated below BBB by Standard & Poor’s Global Ratings or Fitch Ratings, Ltd., or below Baa by Moody’s Investors Service, Inc. (or, if unrated, determined by the investment manager to be of comparable quality) are speculative in nature and are subject to additional risk factors such as increased possibility of default, illiquidity of the security, and changes in value based on changes in interest rates. Non-investment grade bonds, sometimes referred to as “junk bonds,” are usually issued by companies without long track records of sales and earnings, or by those companies with questionable credit strength. The creditworthiness of issuers of non-investment grade debt securities may be more complex to analyze than that of issuers of investment grade debt securities, and reliance on credit ratings may present additional risks.
1290 Multi-Alternative Strategies Fund 55
Prepayment Risk and Extension Risk —  Prepayment risk is the risk that the issuer of a security held by the Fund may pay off principal more quickly than originally anticipated. This may occur when interest rates fall. The Fund may have to reinvest the proceeds in an investment offering a lower yield, may not benefit from any increase in value that might otherwise result from declining interest rates and may lose any premium it paid to acquire the security. Extension risk is the risk that the issuer of a security held by the Fund may pay off principal more slowly than originally anticipated. This may occur when interest rates rise. The Fund may be prevented from reinvesting the proceeds it would have received at a given time in an investment offering a higher yield.
Real Estate Investing Risk —  Real estate-related investments may decline in value as a result of factors affecting the overall real estate industry. Real estate is a cyclical business, highly sensitive to supply and demand, general and local economic developments and characterized by intense competition and periodic overbuilding. Real estate income and values also may be greatly affected by demographic trends, such as population shifts or changing tastes and values. Losses may occur from casualty or condemnation, and government actions, such as tax law changes, zoning law changes, regulatory limitations on rents, or environmental regulations, also may have a major impact on real estate. The availability of mortgages and changes in interest rates may also affect real estate values. Changing interest rates and credit quality requirements also will affect the cash flow of real estate companies and their ability to meet capital needs. In addition, global climate change may have an adverse effect on property and security values.
Real estate investment trusts (“REITs”) generally invest directly in real estate (equity REITs), in mortgages secured by interests in real estate (mortgage REITs) or in some combination of the two (hybrid REITs). Investing in REITs exposes investors to the risks of owning real estate directly, as well as to risks that relate specifically to the way in which REITs are organized and operated. Equity REITs may be affected by changes in the value of the underlying property owned by the REIT, while mortgage REITs may be affected by the quality of any credit extended. Equity and mortgage REITs are also subject to heavy cash flow dependency, defaults by borrowers, and self-liquidations. The risk of defaults is generally higher in the case of mortgage pools that include subprime mortgages involving borrowers with blemished credit histories.
Operating REITs requires specialized management skills, and a portfolio that invests in REITs indirectly bears REIT management and administration expenses along with the direct expenses of the portfolio. Individual REITs may own a limited number of properties and may concentrate in a particular region or property type. Domestic REITs also must satisfy specific Internal Revenue Code requirements to qualify for the tax-free pass-through of net investment income and net realized gains distributed to shareholders. Failure to meet these requirements may have adverse consequences on the Fund. In addition, even the larger REITs in the industry tend to be small- to medium-sized companies in relation to the equity markets as a whole. Moreover, shares of REITs may trade less frequently and, therefore, are subject to more erratic price movements than securities of larger issuers.
Special Situations Risk —  The Fund may seek to benefit from “special situations,” such as mergers, consolidations, bankruptcies, liquidations, reorganizations, restructurings, tender or exchange offers or other unusual events expected to affect a particular issuer. In general, securities of companies which are the subject of a tender or exchange offer or a merger, consolidation, bankruptcy, liquidation, reorganization or restructuring proposal sell at a premium to their historic market price immediately prior to the announcement of the transaction. However, it is possible that the value of securities of a company involved in such a transaction will not rise and in fact may fall, in which case the Fund would lose money. It is also possible that the transaction may not be completed as anticipated or may take an excessive amount of time to be completed, in which case the Fund may not realize any premium on its investment and could lose money if the value of the securities declines during the Fund’s holding period. In some circumstances, the securities purchased may be illiquid making it difficult for the Fund to dispose of them at an advantageous price.
Risk/Return Bar Chart and Table
The bar chart and table below provide some indication of the risks of investing in the Fund by showing changes in the Fund's performance from year to year and by showing how the Fund's average annual total returns for the past one-year, five-year and since inception periods through December 31, 2022, compared to the returns of a broad-based securities market index. The return of the broad-based securities market index (and any additional comparative index) shown for the since inception period below is the return of the index since the inception of the share class with the longest history. Past performance (before and after taxes) is not an indication of future performance.
The performance results shown in the bar chart do not reflect any sales charges or account fees, which would reduce the performance results. Class T shares of the Fund have not commenced operations. Performance information for Class T shares will be available after Class T shares have been in operation for one full calendar year.
56 1290 Multi-Alternative Strategies Fund
  
 Calendar Year Annual Total Returns — Class I
  
Best quarter (% and time period)
7.35%
2020 4th Quarter
Worst quarter (% and time period)
-12.27%
2020 1st Quarter
  
 Average Annual Total Returns
 
 
One
Year
Five
Years
Since
Inception
Inception
Date
1290 Multi-Alternative Strategies Fund - Class I
Return Before Taxes
-11.19%
-0.20%
0.51%
07/06/2015
1290 Multi-Alternative Strategies Fund - Class I
Return After Taxes on Distributions
-12.17%
-1.30%
-0.33%
07/06/2015
1290 Multi-Alternative Strategies Fund - Class I
Return After Taxes on Distributions and Sale of Fund Shares
-6.61%
-0.41%
0.17%
07/06/2015
1290 Multi-Alternative Strategies Fund - Class A
Return Before Taxes
-16.21%
-1.57%
-0.47%
07/06/2015
1290 Multi-Alternative Strategies Fund - Class R
Return Before Taxes
-11.49%
-0.69%
0.03%
07/06/2015
ICE BofA US 3-Month Treasury Bill Index (reflects no deduction for fees, expenses, or taxes)
1.47%
1.27%
1.01%
 
After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs). The returns after taxes on distributions and sale of Fund shares may be higher than other returns for the same period due to an assumed tax benefit from any losses on a sale of Fund shares at the end of the measurement period. After-tax returns are shown only for Class I shares. After-tax returns for other Classes may vary.
1290 Multi-Alternative Strategies Fund 57
Who Manages the Fund
Investment Adviser: Equitable Investment Management, LLC (the “Adviser”)
Portfolio Managers:  The members of the team that are jointly and primarily responsible for the selection of investments in Underlying ETFs for the Fund are: 
Name
Title
Date Began
Managing
the Fund
Kenneth T. Kozlowski, CFP®, CLU, ChFC
Executive Vice President and Chief Investment
Officer of the Adviser
July 2015
Alwi Chan, CFA®
Senior Vice President and Deputy Chief
Investment Officer of the Adviser
July 2015
Xavier Poutas, CFA®
Vice President and Assistant Portfolio Manager
of the Adviser
July 2015
Miao Hu, CFA®
Vice President and Assistant Portfolio Manager
of the Adviser
April 2016
Kevin McCarthy
Vice President and Assistant Portfolio Manager
of the Adviser
March 2019
Purchase and Redemption of Fund Shares
You may purchase and redeem shares of the Fund each day the New York Stock Exchange is open for trading at the Fund’s net asset value determined after receipt of your request in good order, subject to any applicable sales charge. All share classes are currently not offered for sale in all states. Initial purchases must be effected through your financial intermediary. Subsequently, you may purchase or redeem shares either by having your financial intermediary process your purchase or redemption, or by telephone (1-888-310-0416), by overnight mail (1290 Funds, c/o SS&C GIDS, Inc., 430 W. 7th Street, Suite 219166, Kansas City, MO 64105-1407), or by mail (1290 Funds, PO Box 219166, Kansas City, MO 64121-9166). All redemption requests will be processed and payment with respect thereto will normally be made within seven days after receipt of your request in good order.
The initial and subsequent minimums for purchasing shares of the Fund generally are as follows, although the Fund may reduce or waive the minimums in some cases: 
 
Class A
Class T
Class I
Class R
Minimum Initial Investment
$1,000 for all accounts
except:
• $500 for certain fee-based
programs.
• $500, if establishing an
Automatic Bank Draft Plan.
• $250 minimum for
purchases by accounts
through eligible financial
intermediary platforms
that have entered into
selling or service
agreements with the
Distributor and that are
eligible to purchase
Class A shares without a
sales charge.
• No minimum for certain
employer-sponsored
retirement plans and
certain wrap fee based
programs.
$1,000 for all accounts
except:
• $500 for certain fee-based
programs.
• $500, if establishing an
Automatic Bank Draft Plan.
• No minimum for certain
employer-sponsored
retirement plans and
certain wrap fee based
programs.
• $1,000,000 for certain
institutions and individuals.
• $1,000 for certain
employees (or their
immediate family
members) of Equitable
Holdings, Inc. or its
subsidiaries.
• Class I shares are available
to clients of registered
investment advisers who
have $250,000 invested in
the Fund.
• No minimum investment
for a wrap account client
of an eligible broker-dealer
or a client of a fee-based
planner that is unaffiliated
with a broker-dealer, or a
client of an investment
adviser, trustee,
administrator or institution
acting in a similar capacity
that invests in the Fund
through a retirement plan
No minimum
58 1290 Multi-Alternative Strategies Fund
 
Class A
Class T
Class I
Class R
 
 
 
where the administrator or
service provider of such
retirement plan has
entered into a services
agreement with the Fund’s
distributor and/or
investment adviser.
 
Minimum Additional
Investment
$50 for all accounts
$50 for all accounts
No subsequent minimum
No subsequent minimum
Your financial intermediary may impose different investment minimums.
Tax Information
The Fund’s dividends and other distributions generally will be subject to federal income tax as ordinary income or long-term capital gains, unless you are a tax-exempt investor or are investing through a retirement plan or account; in the latter case, you may be subject to that tax upon withdrawal from the plan or account.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase shares of the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of Fund shares, shareholder services and other purposes. These payments create a conflict of interest by influencing the broker-dealer or other intermediary and your investment professional to recommend the Fund over another investment. Ask your financial adviser or visit your financial intermediary’s website for more information.
1290 Multi-Alternative Strategies Fund 59
1290 SmartBeta Equity Fund  — Class A (TNBAX), Class T (TNBCX), Class I (TNBIX) and Class R (TNBRX) Shares
Investment Objective: Seeks to achieve long-term capital appreciation.
Fees and Expenses of the Fund
The following table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table and example below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in 1290 Funds’ funds. More information about these and other discounts is available from your financial professional and in the “How Sales Charges are Calculated” and “Ways to Reduce or Eliminate Sales Charges” sections of the Fund’s Prospectus, and the “Purchase, Redemption and Pricing of Shares” section of the Fund’s Statement of Additional Information.  
 Shareholder Fees
 (fees paid directly from your investment)
 
1290 SmartBeta Equity Fund
Class A
Shares
Class T
Shares
Class I
Shares
Class R
Shares
Maximum sales charge (load) imposed on purchases (as a percentage of offering price)
5.50%
2.50%
None
None
Maximum contingent deferred sales charge (load) (as a percentage of original purchase price or redemption
proceeds, whichever is lower)
1.00%1
None
None
None
Maximum account fee (deducted from accounts with a balance of less than $1,000)
$25
$25
$25
$25
1 On shares purchased without an initial sales charge and redeemed within 12 months of purchase.  
 Annual Fund Operating Expenses
 (expenses that you pay each year as a percentage of the value of your investment)
 
1290 SmartBeta Equity Fund
Class A
Shares
Class T
Shares
Class I
Shares
Class R
Shares
Management Fee
0.70%
0.70%
0.70%
0.70%
Distribution and/or Service Fees (12b-1 fees)
0.25%
0.25%
0.00%
0.50%
Other Expenses
0.47%
0.47%
0.47%
0.48%
Total Annual Fund Operating Expenses
1.42%
1.42%
1.17%
1.68%
Fee Waiver and/or Expense Reimbursement1
(0.32)%
(0.32)%
(0.32)%
(0.33)%
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement
1.10%
1.10%
0.85%
1.35%
1
Pursuant to a contract, Equitable Investment Management, LLC (the “Adviser”) has agreed to make payments or waive its and its affiliates’ management, administrative and other fees to limit the expenses of the Fund through April 30, 2024 (unless the Board of Trustees consents to an earlier revision or termination of this arrangement) (“Expense Limitation Arrangement”) so that the annual operating expenses of the Fund (exclusive of taxes, interest, brokerage commissions, capitalized expenses (other than offering costs), fees and expenses of other investment companies in which the Fund invests, 12b-1 fees, dividend and interest expenses on securities sold short, and extraordinary expenses not incurred in the ordinary course of the Fund’s business) do not exceed an annual rate of average daily net assets of 0.85% for Class A shares, Class T shares, Class I shares, and Class R shares of the Fund. The Expense Limitation Arrangement may be terminated by the Adviser at any time after April 30, 2024. The Adviser may be reimbursed the amount of any such payments or waivers in the future provided that the payments or waivers are reimbursed within three years of the payments or waivers being recorded and the Fund’s expense ratio, after the reimbursement is taken into account, does not exceed the Fund’s expense cap at the time of the waiver or the Fund’s expense cap at the time of the reimbursement, whichever is lower. The total annual fund operating expense ratios after fee waiver and/or expense reimbursement for Class A shares, Class T shares, and Class R shares, as shown in the table, are higher than the Fund’s expense cap because these ratios include 12b-1 fees and certain other expenses, as noted above, that are excluded from the Expense Limitation Arrangement.
Example
This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds. The Example assumes that you invest $10,000 in the Fund for the periods indicated, that your investment has a 5% return each year, that the Fund's operating expenses remain the same and that the Expense Limitation Arrangement is not renewed. Although your actual costs may be higher or lower, based on these assumptions, whether you redeem or hold your shares, your costs would be: 
 
1 Year
3 Years
5 Years
10 Years
Class A Shares
$656
$945
$1,255
$2,132
60 1290 SmartBeta Equity Fund
 
1 Year
3 Years
5 Years
10 Years
Class T Shares
$359
$657
$977
$1,883
Class I Shares
$87
$340
$613
$1,392
Class R Shares
$137
$497
$882
$1,959
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the Example, affect the Fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 38% of the average value of its portfolio.
Investments, Risks, and Performance
Principal Investment Strategy
Under normal market conditions, the Fund invests at least 80% of its net assets, plus borrowings for investment purposes, in equity securities. The Fund invests primarily in equity securities of U.S. companies and foreign companies in developed markets.
The Fund may invest in large-, mid- and small-capitalization companies and will be broadly diversified across companies and industries. Equity securities in which the Fund may invest include common stocks, preferred stocks, warrants, American Depositary Receipts and similar instruments.
AXA Investment Managers US Inc. (the “Sub-Adviser”) believes that investing in equity markets using a traditional indexing approach exposes an investor to general market risk, including concentration in the largest capitalization securities in the applicable index, volatility and unpredictable earnings that, over a market cycle, do not necessarily provide optimal returns. In the Sub-Adviser’s view, market return, or “beta,” can be achieved with less exposure to general market risk. The Sub-Adviser’s SmartBeta Equity strategy seeks to achieve, over a full market cycle, above-market returns with less volatility compared to the equity markets as a whole. Generally, a full market cycle consists of a period of increasing stock prices and strong performance (a bull market) followed by a period of weak performance and falling prices (a bear market), and a return to a bull market.
The Sub-Adviser’s strategy differs from a traditional indexing approach under which a fund generally invests in all or a representative sample of the securities in the applicable index and weights those securities according to their market capitalization weightings. In constructing the Fund’s portfolio, the Sub-Adviser begins with a universe of global developed market equity securities. The Sub-Adviser then uses computer-aided quantitative analysis to identify securities for investment. This is accomplished through the application of proprietary filters that interact to analyze individual issuer data for risk factors that may include, but are not limited to, lower earnings quality, higher price volatility, speculation and distress. Those securities that pass the filters are assigned a preliminary weighting in the Fund. The Sub-Adviser next applies a proprietary diversification methodology that is designed to produce a weighting scheme that reduces concentration risk by applying a greater level of diversification to the largest securities (by market capitalization) that progressively lessens with smaller capitalization companies. The Sub-Adviser also integrates Environmental, Social and Governance (“ESG”) considerations into its portfolio construction process that seeks to optimize the ESG portfolio while substantially retaining the desired risk/return thereof. In constructing the portfolio, the Sub-Adviser evaluates each company and considers various ESG factors, including a company’s environmental impact, carbon footprint and water intensity, and assesses the potential impact of corporate controversies. The Sub-Adviser may apply this investment selection process to invest in emerging market equity securities. The Sub-Adviser may sell a security for a variety of reasons, such as if its fundamentals no longer meet the Sub-Adviser’s criteria, to secure gains, limit losses, or redeploy assets into securities believed to offer superior investment opportunities.
Principal Risks
An investment in the Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The value of your investment may fall, sometimes sharply, and you could lose money by investing in the Fund. There can be no assurance that the Fund will achieve its investment objective.
The following risks can negatively affect the Fund’s performance. The most significant risks as of the date of this Prospectus are presented first, followed by additional principal risks in alphabetical order.
1290 SmartBeta Equity Fund 61
Market Risk —  The Fund is subject to the risk that the securities markets will move down, sometimes rapidly and unpredictably, based on overall economic conditions and other factors, which may negatively affect Fund performance. Securities markets also may experience long periods of decline in value. The value of a security may decline due to factors that are specifically related to a particular company, as well as general market conditions, such as real or perceived adverse economic or political conditions, inflation rates and/or investor expectations concerning such rates, changes in interest rates, recessions, or adverse investor sentiment generally. During a general downturn in the securities markets, multiple asset classes may decline in value simultaneously. Changes in the financial condition of a single issuer can impact a market as a whole.
Geopolitical events, including terrorism, tensions, war or other open conflicts between nations, or political or economic dysfunction within some nations that are global economic powers or major producers of oil, may lead to overall instability in world economies and markets generally and have led, and may in the future lead, to increased market volatility and may have adverse long-term effects. World markets, or those in a particular region, may all react in similar fashion to important economic, political or other developments. Events such as environmental and natural disasters or other catastrophes, public health crises (such as epidemics and pandemics), social unrest, and cybersecurity incidents, and governments’ reactions to such events, could cause uncertainty in the markets and may adversely affect the performance of the global economy. Impacts from climate change may include significant risks to global financial assets and economic growth. The extent and duration of such events and resulting market disruptions could be substantial and could magnify the impact of other risks to the Fund. The value and liquidity of the Fund’s investments may be negatively affected by developments in other countries and regions, whether or not the Fund invests in securities of issuers located in or with significant exposure to the countries or regions directly affected.
The U.S. Federal Reserve (“Fed”) has invested or otherwise made available substantial amounts of money to keep credit flowing through short-term money markets and has signaled that it will continue to adjust its operations as appropriate to support short-term money markets. Amid these efforts, concerns about the markets’ dependence on the Fed’s provision of liquidity have grown. Policy changes by the U.S. government and/or the Fed and political events within the United States may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree. A downgrade of the ratings of U.S. government debt obligations, or concerns about the U.S. government’s credit quality in general, could have a substantial negative effect on the U.S. and global economies. High public debt in the United States and other countries creates ongoing systemic and market risks and policymaking uncertainty.
In addition, markets and market participants are increasingly reliant on information data systems. Inaccurate data, 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.
Equity Risk —  In general, the values of stocks and other equity securities fluctuate, and sometimes widely fluctuate, in response to changes in a company’s financial condition as well as general market, economic and political conditions and other factors. The Fund may experience a significant or complete loss on its investment in an equity security. In addition, common stock prices may be particularly sensitive to rising interest rates, which increase borrowing costs and the costs of capital.
Large-Cap Company Risk —  Larger more established companies may be unable to respond quickly to new competitive challenges such as changes in technology and consumer tastes, which may lead to a decline in their market price. Many larger companies also may not be able to attain the high growth rate of successful smaller companies, especially during extended periods of economic expansion.
Mid-Cap and Small-Cap Company Risk —  Mid-cap and small-cap companies carry additional risks because the operating histories of these companies tend to be more limited, their earnings and revenues less predictable (and some companies may be experiencing significant losses), and their share prices more volatile than those of larger, more established companies, all of which can negatively affect their value. In general, these risks are greater for small-cap companies than for mid-cap companies.
Quantitative Investing Risk —  The success of the Fund's investment strategy depends largely on the effectiveness of the Fund's quantitative model for screening securities for investment by the Fund. The portfolio of securities selected using quantitative analysis may underperform the market as a whole or a portfolio of securities selected using a different investment approach, such as fundamental analysis. The factors used in quantitative analysis and the emphasis placed on those factors may not be predictive of a security’s value. In addition, factors that affect a security’s value can change over time and these changes may not be reflected in the quantitative model. Data for some companies may be less available and/or less current than data for other companies. There may also be errors in the computer code for the quantitative model or in the model itself, or issues relating to the computer systems used to screen securities. The Fund's securities selection can be adversely affected if it relies on erroneous or outdated data or flawed models or computer systems. As a result, the Fund may have a lower return than if it were managed using a fundamental analysis or an index-based strategy that did not incorporate quantitative analysis.
62 1290 SmartBeta Equity Fund
Investment Strategy Risk —  The market may reward certain investment characteristics for a period of time and not others. The returns for a specific investment characteristic may vary significantly relative to other characteristics and may increase or decrease significantly during different phases of a market cycle. A Fund comprised of stocks intended to reduce exposure to uncompensated risk may not necessarily be less sensitive to a change in the broad market price level and may not accurately estimate the risk/return outcome of stocks. Fund investments may exhibit higher volatility than expected or underperform the markets. The Fund's strategy may result in the Fund underperforming the general securities markets, particularly during periods of strong positive market performance.
Portfolio Management Risk —  The Fund is subject to the risk that strategies used by an investment manager and its securities selections fail to produce the intended results. An investment manager’s judgments or decisions about the quality, relative yield or value of, or market trends affecting, a particular security or issuer, industry, sector, region or market segment, or about the economy or interest rates, may be incorrect or otherwise may not produce the intended results, which may result in losses to the Fund. In addition, many processes used in Fund management, including security selection, rely, in whole or in part, on the use of various technologies. The Fund may suffer losses if there are imperfections, errors or limitations in the quantitative, analytic or other tools, resources, information and data used, or the analyses employed or relied on, by an investment manager, or if such tools, resources, information or data are used incorrectly, fail to produce the desired results, or otherwise do not work as intended. There can be no assurance that the use of these technologies will result in effective investment decisions for the Fund.
ESG Considerations Risk —  Consideration of ESG factors in the investment process may limit the types and number of investment opportunities available to the Fund, and therefore carries the risk that, under certain market conditions, the Fund may underperform funds that do not consider ESG factors. The integration of ESG considerations may affect the Fund's exposure to certain sectors or types of investments and may impact the Fund's relative investment performance depending on whether such sectors or investments are in or out of favor in the market. Furthermore, ESG criteria are not uniformly defined, and the Fund's ESG criteria may differ from those used by other funds. A company’s ESG performance or the Sub-Adviser’s assessment of a company’s ESG performance may change over time, which could cause the Fund temporarily to hold securities that do not comply with the Fund's ESG investment principles. Information or data used in evaluating a company may not be complete, accurate, or readily available, which could cause the Sub-Adviser to incorrectly assess a company’s ESG performance. Successful application of the Fund's ESG considerations will depend on the Sub-Adviser’s skill in properly identifying and analyzing material ESG issues. Further, the regulatory landscape for ESG investing in the United States is evolving, and future rules or regulations may require the Fund to change its investment process.
Foreign Securities Risk —  Investments in foreign securities, including depositary receipts, involve risks in addition to those associated with investments in U.S. securities. Foreign markets may be less liquid, more volatile and subject to less government supervision and regulation than U.S. markets, and it may take more time to clear and settle trades involving foreign securities, which could negatively impact the Fund's investments and cause it to lose money. Security values also may be negatively affected by changes in the exchange rates between the U.S. dollar and foreign currencies. Differences between U.S. and foreign legal, political and economic systems, regulatory regimes and market practices, as well as trade barriers and other protectionist trade policies (including those of the United States), governmental instability, war, or other political or economic actions, also may adversely impact security values. Foreign securities are also subject to the risks associated with the potential imposition of economic or other sanctions against a particular foreign country, its nationals, businesses or industries. World markets, or those in a particular region, may all react in similar fashion to important economic, political or other developments. Events and evolving conditions in certain economies or markets may alter the risks associated with investments tied to countries or regions that historically were perceived as comparatively stable and make such investments riskier and more volatile. Regardless of where a company is organized or its stock is traded, its performance may be significantly affected by events in regions from which it derives its profits or in which it conducts significant operations.
Currency Risk —  Investments that are denominated in or that provide exposure to foreign currencies are subject to the risk that those currencies will decline in value relative to the U.S. dollar. Any such decline may erode or reverse any potential gains from an investment in securities denominated in foreign currency or may widen existing loss. In the case of hedging positions, there is the risk that the U.S. dollar will decline in value relative to the currency being hedged. Currency rates may fluctuate significantly over short periods of time.
Emerging Markets Risk —  The risks associated with investments in emerging market countries often are significant, and vary from jurisdiction to jurisdiction and company to company. Investments in emerging market countries are more susceptible to loss than investments in more developed foreign countries and may present market, credit, currency, liquidity, legal, political, technical and other risks different from, or greater than, the risks of investing in more developed foreign countries. Emerging market countries may be more likely to experience rapid and significant adverse developments in their political or economic structures, intervene in financial markets, restrict foreign investments, impose high withholding or other taxes on foreign investments, impose restrictive exchange control regulations, or nationalize or expropriate the assets of private companies, which may have negative impacts on transaction costs, market price, investment returns and the legal rights and remedies available to the Fund. In addition, the securities markets of emerging market countries generally are smaller, less liquid and
1290 SmartBeta Equity Fund 63
more volatile than those of more developed foreign countries, and emerging market countries often have less uniformity in regulatory, accounting, auditing and financial reporting requirements or standards, which may impact the availability and quality of information about issuers, and less reliable clearance and settlement, registration and custodial procedures. Emerging market countries also may be subject to high inflation and rapid currency devaluations, and currency-hedging techniques may be unavailable in certain emerging market countries. In addition, some emerging market countries may be heavily dependent on international trade, which can materially affect their securities markets. Securities of issuers traded on foreign exchanges may be suspended. The likelihood of such suspensions may be higher for securities of issuers in emerging market countries than in countries with more developed markets.
European Economic Risk —  The economies of European Union (“EU”) member countries and their trading partners, as well as the broader global economy, may be adversely affected by changes in the euro’s exchange rate, changes in EU or governmental regulations on trade, geopolitical tensions or conflicts, and the threat of default or an actual default by an EU member country on its sovereign debt, which could negatively impact the Fund's investments and cause it to lose money. Recent events in Europe may continue to impact the economies of every European country and their economic partners. Russia’s military invasion of Ukraine in February 2022, the resulting responses by the United States and other countries, and the potential for wider conflict have had, and could continue to have, severe adverse effects on regional and global economies and could further increase volatility and uncertainty in the financial markets. In addition, until the full economic effects of the United Kingdom's withdrawal from the EU, commonly referred to as “Brexit,” become clearer, there remains a risk that Brexit may negatively impact the Fund's investments and cause it to lose money. Any further withdrawals from the EU could cause additional market disruption globally.
Geographic Concentration Risk —  To the extent the Fund invests a significant portion of its assets in securities of companies domiciled, or exercising the predominant part of their economic activity, in one country or geographic region, it assumes the risk that economic, political, social and environmental conditions in that particular country or region will have a significant impact on the Fund’s investment performance and that the Fund’s performance will be more volatile than the performance of more geographically diversified funds. In addition, the risks associated with investing in a narrowly defined geographic area are generally more pronounced with respect to investments in emerging market countries.
Sector Risk —  From time to time, based on market or economic conditions, the Fund may have significant positions in one or more sectors of the market. To the extent the Fund invests more heavily in particular sectors, its performance will be especially sensitive to developments that significantly affect those sectors. Individual sectors may be more volatile, and may perform differently, than the broader market. The industries that constitute a sector may all react in the same way to economic, political or regulatory events.
Risk/Return Bar Chart and Table
The bar chart and table below provide some indication of the risks of investing in the Fund by showing changes in the Fund's performance from year to year and by showing how the Fund's average annual total returns for the past one-year, five-year and since inception periods through December 31, 2022, compared to the returns of a broad-based securities market index. The return of the broad-based securities market index (and any additional comparative index) shown for the since inception period below is the return of the index since the inception of the share class with the longest history. Past performance (before and after taxes) is not an indication of future performance.
Prior to January 1, 2018, the Fund did not integrate ESG filters into its portfolio construction process.
The performance results shown in the bar chart do not reflect any sales charges or account fees, which would reduce the performance results.
64 1290 SmartBeta Equity Fund
The performance of Class T shares for periods prior to March 1, 2017 has been adjusted to reflect the current sales charges applicable to Class T shares.  
 Calendar Year Annual Total Returns — Class I
  
Best quarter (% and time period)
15.36%
2020 2nd Quarter
Worst quarter (% and time period)
-18.34%
2020 1st Quarter
  
 Average Annual Total Returns
 
 
One
Year
Five
Years
Since
Inception
Inception
Date
1290 SmartBeta Equity Fund - Class I
Return Before Taxes
-14.43%
6.86%
7.66%
11/12/2014
1290 SmartBeta Equity Fund - Class I
Return After Taxes on Distributions
-14.79%
5.75%
6.64%
11/12/2014
1290 SmartBeta Equity Fund - Class I
Return After Taxes on Distributions and Sale of Fund Shares
-8.54%
5.08%
5.78%
11/12/2014
1290 SmartBeta Equity Fund - Class A
Return Before Taxes
-19.35%
5.39%
6.65%
11/12/2014
1290 SmartBeta Equity Fund - Class R
Return Before Taxes
-14.83%
6.32%
7.13%
11/12/2014
1290 SmartBeta Equity Fund - Class T
Return Before Taxes
-16.64%
6.32%
7.32%
11/12/2014
MSCI World (Net) Index (reflects no deduction for fees, expenses, or taxes, except foreign
withholding taxes)
-18.14%
6.14%
7.16%
 
After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs). The returns after taxes on distributions and sale of Fund shares may be higher than other returns for the same period due to an assumed tax benefit from any losses on a sale of Fund shares at the end of the measurement period. After-tax returns are shown only for Class I shares. After-tax returns for other Classes may vary.
1290 SmartBeta Equity Fund 65
Who Manages the Fund
Investment Adviser: Equitable Investment Management, LLC (the “Adviser”)
Portfolio Managers:  The members of the team that are jointly and primarily responsible for the selection, monitoring and oversight of the Fund’s Sub-Adviser are: 
Name
Title
Date Began
Managing
the Fund
Kenneth T. Kozlowski, CFP®, CLU, ChFC
Executive Vice President and Chief Investment
Officer of the Adviser
November 2014
Alwi Chan, CFA®
Senior Vice President and Deputy Chief
Investment Officer of the Adviser
November 2014
Sub-Adviser: AXA Investment Managers US Inc. (“AXA IM” or the “Sub-Adviser”) 
Portfolio Managers:  The members of the team primarily responsible for the securities selection, research and trading for the Fund are: 
Name
Title
Date Began
Managing
the Fund
Gideon Smith, CFA®
Head of Equity QI at AXA IM
November 2014
Cameron Gray
Head of Portfolio Implementation of Equity QI
at AXA IM
November 2014
Ram Rasaratnam, CFA®
Chief Investment Officer of Equity QI at AXA IM
March 2021
Jonathan White
Head of Investment Strategy & Sustainability at
AXA IM
March 2023
The Adviser is responsible for overseeing Sub-Advisers and recommending their hiring, termination and replacement to the Board of Trustees. The Adviser has been granted relief by the Securities and Exchange Commission to hire, terminate and replace Sub-Advisers and amend sub-advisory agreements subject to the approval of the Board of Trustees and without obtaining shareholder approval. However, the Adviser may not enter into a sub-advisory agreement on behalf of the Fund with an “affiliated person” of the Adviser unless the sub-advisory agreement is approved by the Fund's shareholders. The relief does not extend to any increase in the advisory fee paid by the Fund to the Adviser; any such increase would be subject to shareholder approval.
Purchase and Redemption of Fund Shares
You may purchase and redeem shares of the Fund each day the New York Stock Exchange is open for trading at the Fund’s net asset value determined after receipt of your request in good order, subject to any applicable sales charge. All share classes are currently not offered for sale in all states. Initial purchases must be effected through your financial intermediary. Subsequently, you may purchase or redeem shares either by having your financial intermediary process your purchase or redemption, or by telephone (1-888-310-0416), by overnight mail (1290 Funds, c/o SS&C GIDS, Inc., 430 W. 7th Street, Suite 219166, Kansas City, MO 64105-1407), or by mail (1290 Funds, PO Box 219166, Kansas City, MO 64121-9166). All redemption requests will be processed and payment with respect thereto will normally be made within seven days after receipt of your request in good order.
The initial and subsequent minimums for purchasing shares of the Fund generally are as follows, although the Fund may reduce or waive the minimums in some cases: 
 
Class A
Class T
Class I
Class R
Minimum Initial Investment
$1,000 for all accounts
except:
• $500 for certain fee-based
programs.
$1,000 for all accounts
except:
• $500 for certain fee-based
programs.
• $1,000,000 for certain
institutions and individuals.
• $1,000 for certain
employees (or their
No minimum
66 1290 SmartBeta Equity Fund
 
Class A
Class T
Class I
Class R
 
• $500, if establishing an
Automatic Bank Draft Plan.
• $250 minimum for
purchases by accounts
through eligible financial
intermediary platforms
that have entered into
selling or service
agreements with the
Distributor and that are
eligible to purchase
Class A shares without a
sales charge.
• No minimum for certain
employer-sponsored
retirement plans and
certain wrap fee based
programs.
• $500, if establishing an
Automatic Bank Draft Plan.
• No minimum for certain
employer-sponsored
retirement plans and
certain wrap fee based
programs.
immediate family
members) of Equitable
Holdings, Inc. or its
subsidiaries.
• Class I shares are available
to clients of registered
investment advisers who
have $250,000 invested in
the Fund.
• No minimum investment
for a wrap account client
of an eligible broker-dealer
or a client of a fee-based
planner that is unaffiliated
with a broker-dealer, or a
client of an investment
adviser, trustee,
administrator or institution
acting in a similar capacity
that invests in the Fund
through a retirement plan
where the administrator or
service provider of such
retirement plan has
entered into a services
agreement with the Fund’s
distributor and/or
investment adviser.
 
Minimum Additional
Investment
$50 for all accounts
$50 for all accounts
No subsequent minimum
No subsequent minimum
Your financial intermediary may impose different investment minimums.
Tax Information
The Fund’s dividends and other distributions generally will be subject to federal income tax as ordinary income or long-term capital gains, unless you are a tax-exempt investor or are investing through a retirement plan or account; in the latter case, you may be subject to that tax upon withdrawal from the plan or account.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase shares of the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of Fund shares, shareholder services and other purposes. These payments create a conflict of interest by influencing the broker-dealer or other intermediary and your investment professional to recommend the Fund over another investment. Ask your financial adviser or visit your financial intermediary’s website for more information.
1290 SmartBeta Equity Fund 67
2. More information on fees and expenses
Advisory Fees
Effective January 1, 2023, each Fund pays a fee to Equitable Investment Management, LLC (the “Adviser”) for advisory services. Prior to January 1, 2023, Equitable Investment Management Group, LLC (“EIM”), an affiliate of the Adviser, served as the investment adviser to each Fund and, accordingly, the advisory fees shown in the table below were paid to EIM. The table below shows the annual rate of the advisory fees (as a percentage of a Fund's average daily net assets) that EIM received during the fiscal year ended October 31, 2022, for providing advisory services to each of the Funds and the rate of advisory fees waived by EIM during the fiscal year in accordance with the provisions of the Expense Limitation Agreement (including voluntary waivers, if any), as described below, with respect to the Funds.
Advisory Fees Paid by the Funds for the Fiscal Year Ended October 31, 2022 
 
Annual Rate
Received
Rate of Fees Waived and
Expenses Reimbursed
Fund
All Classes
Class A
Class T
Class I
Class R
1290 Diversified Bond Fund
0.60%
0.45%
N/A
0.45%
0.46%
1290 GAMCO Small/Mid Cap Value Fund
0.75%
0.30%
0.30%
0.29%
0.30%
1290 High Yield Bond Fund
0.60%
0.43%
0.43%
0.43%
0.42%
1290 Loomis Sayles Multi-Asset Income Fund
0.73%
0.54%
N/A
0.51%
0.54%
1290 Multi-Alternative Strategies Fund
0.50%
0.76%
N/A
0.76%
0.76%
1290 SmartBeta Equity Fund
0.70%
0.32%
0.32%
0.32%
0.33%
 
The contractual rate of the advisory fee (as an annual percentage of the Fund’s average daily net assets) payable by the 1290 Essex Small Cap Growth Fund, which has not operated for a full fiscal year, is shown in the following table: 
Fund
First
$1 Billion
Next
$1 Billion
Next
$3 Billion
Next
$5 Billion
Thereafter
1290 Essex Small Cap Growth Fund
0.750%
0.700%
0.675%
0.650%
0.625%
 
Effective August 19, 2022, the contractual rate of the advisory fee (as a percentage of the Fund’s average daily net assets) payable by the 1290 Loomis Sayles Multi-Asset Income Fund changed to the contractual fee rate shown in the following table: 
Fund
First
$1 Billion
Next
$1 Billion
Next
$3 Billion
Next
$5 Billion
Thereafter
1290 Loomis Sayles Multi-Asset Income Fund
0.650%
0.600%
0.575%
0.550%
0.525%
 
The Sub-Advisers are paid by the Adviser. Changes to the sub-advisory fees may be negotiated, which could result in an increase or decrease in the amount of the advisory fee retained by the Adviser, without shareholder approval. 
A discussion of the basis for the decision by the Board of Trustees to approve the investment advisory and sub-advisory, as applicable, agreements with respect to the Funds is available in the 1290 Funds' Semi-Annual Report to Shareholders for the period ended April 30, 2022, and the 1290 Funds' Annual Report to Shareholders for the period ended October 31, 2022.
Administration Fees
The Adviser also serves as the administrator of the Funds. The administrative services provided to the Funds by the Adviser include, among others, coordination of 1290 Funds’ audit, financial statements and tax returns; expense management and budgeting; legal administrative services and compliance monitoring; portfolio accounting services, including daily net asset value accounting; operational risk management; and assistance with the administration of 1290 Funds’ proxy voting policies and procedures and anti-money laundering program. For administrative services, in addition to the advisory fee, each Fund pays the Adviser an asset-based administration fee of 0.15% of the average daily net assets of the Fund. The asset-based
68 More information on fees and expenses
administration fee is calculated and billed monthly, and subject to an annual minimum of $30,000 per Fund or $30,000 for each allocated portion (or sleeve) of a Fund, as applicable.
Expense Limitation Agreement
In the interest of limiting the expenses of each Fund through April 30, 2024 (unless the Board of Trustees consents to an earlier revision or termination of this arrangement), the Adviser has entered into an expense limitation agreement with 1290 Funds with respect to the Funds (“Expense Limitation Agreement”). Pursuant to the Expense Limitation Agreement, the Adviser has agreed to make payments or waive its and its affiliates’ management, administrative and other fees to limit the expenses of the Funds listed below so that the annual operating expenses of each Fund (other than interest, taxes, brokerage commissions, 12b-1 fees, dividend and interest expenses on securities sold short, other expenditures that are capitalized in accordance with generally accepted accounting principles (other than offering costs), other extraordinary expenses not incurred in the ordinary course of each Fund’s business and, except for certain Funds as indicated below, fees and expenses of other investment companies in which a Fund may invest), as a percentage of average daily net assets, do not exceed the respective expense ratios in the following table. The expense ratios in the table do not include 12b-1 fees and certain other expenses noted above. Accordingly, the effective expense limits are higher for Class A, Class T and Class R shares, as shown in the Funds’ fee tables.
Expense Limitation Provisions 
 
Total Annual Operating Expenses Limited to
(% of average daily net assets, excluding 12b-1
fees and certain other expenses noted above)
Funds
Class A
Class T
Class I
Class R
1290 Diversified Bond Fund
0.50%
0.50%
0.50%
0.50%
1290 Essex Small Cap Growth Fund
0.88%
0.88%
0.88%
0.88%
1290 GAMCO Small/Mid Cap Value Fund*, **
0.95%
0.95%
0.95%
0.95%
1290 High Yield Bond Fund
0.75%
0.75%
0.75%
0.75%
1290 Loomis Sayles Multi-Asset Income Fund***
0.80%
0.80%
0.80%
0.80%
1290 Multi-Alternative Strategies Fund
0.85%
0.85%
0.85%
0.85%
1290 SmartBeta Equity Fund
0.85%
0.85%
0.85%
0.85%
 
*
For purposes of calculating the maximum annual operating expense limit, the fees and expenses of other investment companies in which the Fund invests are included in annual operating expenses.
**
Effective March 1, 2022.
***
Effective August 19, 2022.
The Adviser may be reimbursed the amount of any such payments or waivers in the future provided that the payments or waivers are reimbursed within three years of the payments or waivers being recorded and the Fund’s expense ratio, after the reimbursement is taken into account, does not exceed the Fund’s expense cap at the time of the waiver or the Fund’s expense cap at the time of the reimbursement, whichever is lower. If the actual expense ratio is less than the expense cap and the Adviser has recouped any eligible previous payments or waivers made, the Fund will be charged such lower expenses. The Adviser’s selection of Underlying ETFs may positively or negatively impact its obligations under the Expense Limitation Agreement and its ability to recoup previous payments or waivers made under the Expense Limitation Agreement.
Payments or waivers will increase returns and yield, and reimbursement of payments or waivers will decrease returns and yields.
The annual operating expenses of each Fund, as disclosed in this Prospectus, do not reflect any fees and expenses that are imposed by sponsors of products that offer a Fund as an underlying investment option, such as retirement plans and/or variable life insurance contracts and variable annuity certificates and contracts. Such fees and expenses would increase a Fund’s overall fees and expenses, and would not be subject to the expense caps described above, thereby reducing the Fund’s returns.
More information on fees and expenses 69
3. More information on strategies and risks
Strategies
Changes in Investment Objectives and Principal Investment Strategies
As described in this Prospectus, each Fund has its own investment objective, policies and strategies. There is no assurance that a Fund will achieve its investment objective. The investment objective of each Fund may be changed without shareholder approval. Except as otherwise noted, the investment policies and strategies of a Fund are not fundamental policies and may be changed without a shareholder vote. In addition, to the extent a Fund is new or is undergoing a transition (such as a reorganization or rebalancing, or experiences large inflows or outflows) or takes a temporary defensive position, it may not be pursuing its investment objective or executing its principal investment strategies.
The 1290 Diversified Bond Fund seeks to maximize total return consisting of income and capital appreciation. The 1290 Essex Small Cap Growth Fund seeks long-term growth of capital. The 1290 GAMCO Small/Mid Cap Value Fund seeks to maximize capital appreciation. The 1290 High Yield Bond Fund seeks to maximize current income. The 1290 Loomis Sayles Multi-Asset Income Fund seeks to provide income and total return through principally investing in income generating securities and investments. The 1290 Multi-Alternative Strategies Fund seeks long-term growth of capital. The 1290 SmartBeta Equity Fund seeks to achieve long-term capital appreciation.
80% Policies
The 1290 Diversified Bond Fund has a non-fundamental investment policy that, under normal circumstances, it will invest at least 80% of its net assets, plus borrowings for investment purposes, in a diversified portfolio of U.S. and foreign bonds or other debt securities of varying maturities and other instruments that provide investment exposure to such debt securities, including forwards or derivatives such as options, futures contracts or swap agreements. The 1290 Essex Small Cap Growth Fund has a non-fundamental investment policy that, under normal circumstances, it will invest at least 80% of its net assets, plus borrowings for investment purposes, in equity securities of small- and micro-capitalization companies (or other financial instruments that derive their value from the securities of such companies). The 1290 GAMCO Small/Mid Cap Value Fund has a non-fundamental investment policy that, under normal circumstances, it will invest at least 80% of its net assets, plus borrowings for investment purposes, in securities of small- and mid-capitalization companies. The 1290 High Yield Bond Fund has a non-fundamental investment policy that, under normal circumstances, it will invest at least 80% of its net assets, plus borrowings for investment purposes, in a broad range of high-yield, below investment-grade bonds. The 1290 SmartBeta Equity Fund has a non-fundamental investment policy that, under normal market conditions, it will invest at least 80% of its net assets, plus borrowings for investment purposes, in equity securities. Each such policy is subject to change only upon at least sixty (60) days’ prior notice to shareholders of the affected Fund. As applicable, to the extent a Fund invests in securities of other investment companies or investment vehicles (such as exchange-traded funds), it takes into consideration the investment policies of such investment companies and investment vehicles at the time of investment in determining compliance with its 80% policy. The 80% investment requirement is applied at the time a Fund invests its assets. If, subsequent to an investment by a Fund, this requirement is no longer met, the Fund’s future investments will be made in a manner consistent with bringing the Fund into compliance with this requirement. In addition, in appropriate circumstances, synthetic investments may count toward the 80% minimum if they have economic characteristics similar to the other investments included in the 80% policy. In addition, a Fund may specify a market capitalization range for acquiring portfolio securities. If a security that is within the range at the time of purchase later appreciates or depreciates in value outside the range, which may happen due to market fluctuation, the Fund may continue to hold the security. However, this change in market capitalization could affect the Fund’s flexibility in making additional investments in securities of the applicable issuer, and the continued investment in securities of the issuer could cause the Fund to be subject to additional risks, such as those associated with holding securities of larger or smaller capitalization companies, as the case may be.
Each Sub-Adviser has complete discretion to select portfolio securities for its Fund’s assets (or portion thereof), subject to the Fund’s investment objective, restrictions and policies and other parameters that may be developed from time to time by the Adviser. In selecting investments, the Sub-Advisers use their proprietary investment strategies, which are summarized above in the section “About the Funds — Investments, Risks, and Performance” for each Fund.
Underlying ETFs
The 1290 Multi-Alternative Strategies Fund invests primarily in securities issued by the Underlying ETFs. Accordingly, the Fund’s performance depends upon a favorable allocation by the Adviser among the Underlying ETFs as well as the ability of the Underlying
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ETFs to generate favorable performance. ETFs are investment companies or other investment vehicles whose shares are listed and traded on U.S. stock exchanges or otherwise traded in the over-the-counter market and may be purchased and sold throughout the trading day based on their market price. Generally, an index-based ETF seeks to track a securities index or a basket of securities that an “index provider” (such as Standard & Poor’s, Dow Jones, Russell or Morgan Stanley Capital International) selects as representative of a market, market segment, industry sector, country or geographic region. An index-based ETF generally holds the same stocks or bonds as the index it seeks to track (or it may hold a representative sample of such securities). Accordingly, an index-based ETF is designed so that its performance, before fees and expenses, will correspond with that of the index it seeks to track. ETFs also may be actively managed. By investing in a Fund that invests in ETFs, you will indirectly bear fees and expenses charged by the ETFs in which the Fund invests in addition to the Fund’s direct fees and expenses.
You may be able to realize lower aggregate expenses by investing directly in the Underlying ETFs of the Fund instead of in the Fund itself. An investor who chooses to invest directly in the Underlying ETFs would not receive the asset allocation and rebalancing services provided by the Adviser.
Generally, the Fund’s investments in Underlying ETFs are subject to statutory limitations in the Investment Company Act of 1940, as amended (“1940 Act”), which prohibit the acquisition of shares of other investment companies in excess of certain limits. However, there are regulatory exemptions from these restrictions under the 1940 Act on which the Fund may rely to invest in Underlying ETFs in excess of these limits, subject to certain conditions.
The table below lists the Underlying ETFs in which the Fund currently may invest. The list of Underlying ETFs may change from time to time at the discretion of the Adviser without notice or shareholder approval. The Fund will not necessarily invest in every Underlying ETF at one time. Additional information regarding the Underlying ETFs is included in their current prospectuses.
1290 Multi-Alternative Strategies Fund  
Commodities
Invesco DB Agriculture Fund
Invesco DB Commodity Index
Tracking Fund
Invesco DB Energy Fund
Invesco DB Gold Fund
Invesco DB Precious Metals Fund
iShares® GSCI Commodity Dynamic Roll
Strategy ETF
Invesco Optimum Yield Diversified
Commodity Strategy No K-1 ETF
Convertible Securities
SPDR® Bloomberg Convertible
Securities ETF
iShares® Convertible Bond ETF
Global Real Estate
iShares® Core U.S. REIT ETF
Vanguard Global ex-U.S. Real Estate ETF
Managed Futures
WisdomTree® Managed Futures
Strategy Fund
iMGP DBi Managed Futures Strategy ETF
Event Driven
IQ Merger Arbitrage ETF
ProShares Merger ETF
Real Return
iShares® TIPS Bond ETF
Vanguard Short-Term Inflation-Protected
Securities ETF
Long/Short Equity
ProShares Long Online/Short Stores ETF
JPMorgan Equity Premium Income ETF
Additional Information about the Investment Strategies
The following provides additional information regarding the principal investment strategies discussed in the “About the Funds — Investments, Risks, and Performance — Principal Investment Strategy” section for each Fund, and information about additional investment strategies that a Fund may employ in pursuing its investment objective. The Funds also may make other types of investments to the extent permitted by applicable law. For further information about investment strategies, please see the 1290 Funds' Statement of Additional Information (“SAI”).
Alternative Investments —  Under normal market conditions, the 1290 Multi-Alternative Strategies Fund allocates substantially all of its assets to Underlying ETFs that invest primarily in alternative asset categories and strategies. Alternative investments are alternatives to traditional equity (stocks) or fixed income (bonds and cash) investments. Alternative investments have the potential to enhance portfolio diversification and reduce overall portfolio volatility because these investments may not have a strong correlation (relationship) to one another or to traditional market indexes. Alternative investments use a different approach to investing than do traditional investments. This approach may involve, for example, seeking excess returns that are not tied to traditional investment benchmarks (e.g., real return strategies); taking both long and short positions on securities believed to be significantly under- or
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over-priced (e.g., long/short equity); taking both long and short positions in futures contracts (e.g., managed futures); seeking to benefit from price movements caused by anticipated corporate events, such as mergers, acquisitions, or other special situations (e.g., event driven); or using derivatives or hedging strategies. Many alternative investment strategies are designed to help reduce the role of overall market direction in determining return.
Bank Loans —  A Fund may invest in bank loans. A bank loan represents an interest in a loan or other direct indebtedness that entitles the acquirer of such interest to payments of interest, principal and/or other amounts due under the structure of the loan. A Fund may acquire a bank loan through a participation interest, which gives the Fund the right to receive payments of principal, interest and/or other amounts only from the lender selling the participation interest and only when the lender receives the payments from the borrower, or through an assignment in which the Fund succeeds to the rights of the assigning lender and becomes a lender under the loan agreement. Bank loans are typically borrowers’ senior debt obligations and, as such, are considered to hold a senior position in the borrower’s capital structure. The senior capital structure position generally gives the holders of bank loans a priority claim on some or all of the borrower’s assets in the event of a default. In many situations, the assets or cash flow of the borrowing corporation, partnership or other business entity may serve as collateral for the bank loan. Bank loans may be issued in connection with acquisitions, refinancings and recapitalizations.
Cash Management —  A Fund may invest its uninvested cash in high-quality, short-term debt securities, including repurchase agreements and high-quality money market instruments, and also may invest its uninvested cash in money market funds, including money market funds managed by the Adviser. To the extent a Fund invests in a money market fund, it generally is not subject to the limits placed on investments in other investment companies, as discussed in “Securities of Other Investment Companies.” Generally, these securities offer less potential for gains than other types of securities.
Convertible Securities —  A Fund may invest in convertible securities, including both convertible debt and convertible preferred stock. A convertible security is generally a bond, preferred stock or other security that may be converted within a specified period of time and at a pre-stated price or formula into the common stock of the same or a different issuer. A convertible security entitles the holder to receive interest paid or accrued on debt or the dividend paid on preferred stock until the convertible security matures or is redeemed, converted or exchanged. Convertible securities have unique investment characteristics in that they generally: (1) have higher yields than common stocks, but lower yields than comparable nonconvertible securities; (2) are less subject to fluctuation in value than the underlying stock because they have fixed income characteristics; and (3) provide the potential for capital appreciation if the market price of the underlying common stock increases.
Currency —  A Fund may enter into foreign currency transactions for hedging and non-hedging purposes on a spot (i.e., cash) basis or through the use of derivatives. A forward foreign currency exchange contract (“forward contract”) is a type of derivative that involves an obligation to purchase or sell a specific currency at a future date, which may be any fixed number of days from the date of the contract agreed upon by the parties, at a price set at the time of the contract. These contracts are principally traded in the interbank market conducted directly between currency traders (usually large, commercial banks) and their customers. A forward contract generally has no margin deposit requirement and no commissions are charged at any stage for trades. Foreign currency transactions may be used to protect a Fund's foreign securities from adverse currency movements relative to the U.S. dollar, as well as to gain exposure to currencies and markets expected to increase or decrease in value relative to other currencies or securities. The value of these foreign currency transactions depends on, and will vary based on fluctuations in, the value of the underlying currency relative to the U.S. dollar.
If a particular currency is expected to decrease in value relative to another currency, a Fund may sell the currency expected to decrease and purchase a currency that is expected to increase against the currency sold. A Fund's cross hedging transactions may involve currencies in which the Fund's holdings are denominated. However, a Fund is not required to own securities in the particular currency being purchased or sold.
Derivatives —  A Fund may use “derivative” instruments to hedge its portfolio against market, economic, currency, issuer and other risks, to gain or manage exposure to the markets, sectors and securities in which the Fund may invest and to other economic factors that affect the Fund's performance (such as interest rate movements), to increase total return or income, to reduce transaction costs, to manage cash, and for other portfolio management purposes. In general terms, a derivative instrument is an investment contract the value of which is linked to (or is derived from), in whole or in part, the value of an underlying asset, reference rate or index (e.g., stocks, bonds, commodities, currencies, interest rates and market indexes). Futures and options contracts (including futures and options on individual securities and equity and bond market indexes and options on futures contracts), swaps (including interest rate swaps, total return swaps, currency swaps and credit default swaps) and forward contracts, and structured securities, including forward currency contracts, are examples of derivatives in which a Fund may invest. A Fund that engages in derivatives transactions may maintain a significant percentage of its assets in cash and cash equivalent instruments, which may serve as margin or collateral for the Fund's obligations under derivative transactions.
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Equity Securities —  A Fund may invest in equity securities. Equity securities may be bought on stock exchanges or in the over-the-counter market. Equity securities generally include common stock, preferred stock, warrants, securities convertible into common stock, securities of other investment companies and securities of real estate investment trusts.
Exchange Traded Funds (“ETFs”) —  A Fund may invest in ETFs. ETFs are investment companies or other investment vehicles whose shares are listed and traded on U.S. stock exchanges or otherwise traded in the over-the-counter market and may be purchased and sold throughout the trading day based on their market price. Generally, an index-based ETF seeks to track a securities index or a basket of securities that an “index provider” (such as Standard & Poor’s, Dow Jones, Russell or Morgan Stanley Capital International) selects as representative of a market, market segment, industry sector, country or geographic region. An index-based ETF generally holds the same stocks or bonds as the index it seeks to track (or it may hold a representative sample of such securities). Accordingly, an index-based ETF is designed so that its performance, before fees and expenses, will correspond with that of the index it seeks to track. ETFs also may be actively managed. By investing in a Fund that invests in ETFs, you will indirectly bear fees and expenses charged by the ETFs in which the Fund invests in addition to the Fund’s direct fees and expenses.
Generally, a Fund’s investments in other investment companies are subject to statutory limitations in the Investment Company Act of 1940, as amended (“1940 Act”), including in certain circumstances a prohibition against acquiring shares of another investment company if, immediately after such acquisition, the Fund (i) would hold more than 3% of such other investment company’s total outstanding shares, (ii) would have invested more than 5% of its total assets in such other investment company, or (iii) would have invested more than 10% of its total assets in investment companies in the aggregate. However, there are regulatory exemptions from these restrictions under the 1940 Act on which a Fund may rely to invest in ETFs in excess of these limits, subject to certain conditions.
Fixed Income Securities —  A Fund may invest in short- and long-term fixed income securities in pursuing its investment objective and for other fund management purposes, such as to manage cash. Fixed income securities are debt securities such as bonds, notes, debentures and commercial paper. Domestic and foreign governments, banks and companies raise cash by issuing or selling debt securities to investors. Most debt securities pay fixed or adjustable rates of interest at regular intervals until they mature, at which point investors receive their principal back.
Foreign Securities — A Fund may invest in foreign securities. Generally, foreign securities are issued by companies organized outside the U.S. or by foreign governments or international organizations, are traded primarily in markets outside the U.S., and are denominated in a foreign currency. Foreign securities may include securities of issuers in developing countries or emerging markets. In addition, foreign securities may include depositary receipts of foreign companies. American Depositary Receipts are receipts typically issued by an American bank or trust company that evidence underlying securities issued by a foreign corporation. European Depositary Receipts (issued in Europe) and Global Depositary Receipts (issued throughout the world) each evidence a similar ownership arrangement. Depositary receipts also may be convertible into securities of foreign issuers. These securities may not necessarily be denominated in the same currency as the securities into which they may be converted.
Futures —  A Fund may purchase or sell futures contracts on individual securities or securities indexes. In purchasing a futures contract, the buyer agrees to purchase a specified underlying instrument at a specified future date. In selling a futures contract, the seller agrees to sell a specified underlying instrument at a specified future date. The price at which the purchase and sale will take place is fixed when the buyer and seller enter into the contract. Futures can be held until their delivery dates, or can be closed out before then if a liquid market is available. The value of a futures contract tends to increase and decrease in tandem with the value of its underlying instrument. Therefore, purchasing futures contracts will tend to increase a Fund’s exposure to positive and negative price fluctuations in the underlying instrument, much as if it had purchased the underlying instrument directly. When a Fund sells a futures contract, by contrast, the value of its futures position will tend to move in a direction contrary to the market. Selling futures contracts, therefore, will tend to offset both positive and negative market price changes, much as if the underlying instrument had been sold. Futures contracts in which a Fund may invest are highly standardized contracts that typically trade on futures exchanges.
The use of futures contracts and similar instruments may be deemed to involve the use of leverage because a Fund is not required to invest the full market value of the futures contract upon entering into the contract. Instead, a Fund, upon entering into a futures contract (and to maintain its open position in a futures contract), is required to post collateral for the contract, known as “initial margin” and “variation margin,” the amount of which may vary but which generally equals a relatively small percentage (e.g., less than 5%) of the value of the contract being traded.
Illiquid Investments —  Each Fund may invest up to 15% of its net assets in illiquid investments. Illiquid investment means any investment the Fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
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Inflation-Indexed Bonds —  A Fund may invest in inflation-indexed bonds. Inflation-indexed bonds (other than municipal inflation-indexed bonds and certain corporate inflation-indexed bonds, which are more fully described below) are fixed income securities whose principal value is periodically adjusted according to the rate of inflation. The U.S. Treasury Department uses the Consumer Price Index for Urban Consumers as the inflation measure for Treasury inflation-indexed bonds. Inflation-indexed bonds issued by a foreign government are generally adjusted to reflect a comparable inflation-index, calculated by that government. If the index measuring inflation falls, the principal value of inflation-indexed bonds (other than municipal inflation-indexed bonds and certain corporate inflation-indexed bonds) will be adjusted downward, and consequently the interest payable on these securities (calculated with respect to a smaller principal amount) will be reduced. Repayment of the original bond principal upon maturity (as adjusted for inflation) is guaranteed in the case of U.S. Treasury Department inflation-indexed bonds. For bonds that do not provide a similar guarantee, the adjusted principal value of the bond repaid at maturity may be less than the original principal.
With regard to municipal inflation-indexed bonds and certain corporate inflation-indexed bonds, the inflation adjustment is reflected in the semi-annual coupon payment. As a result, the principal value of municipal inflation-indexed bonds and such corporate inflation-indexed bonds does not adjust according to the rate of inflation. The value of inflation-indexed bonds is expected to change in response to changes in real interest rates. Real interest rates are tied to the relationship between nominal interest rates and the rate of inflation. If nominal interest rates increase at a faster rate than inflation, real interest rates may rise, leading to a decrease in value of inflation-indexed bonds. Any increase in the principal amount of an inflation-indexed bond is considered ordinary income in the taxable year of the increase to an investing Fund, which generally must distribute the amount of that income for federal income tax purposes even though it does not receive the increased principal until maturity.
Because market convention for bonds is to use nominal yields to measure duration, duration for real return bonds, which are based on real yields, are converted to nominal durations through a conversion factor. The resulting nominal duration typically can range from 20% and 90% of the respective real duration. All security holdings will be measured in effective (nominal) duration terms. Similarly, the effective duration of the relevant index (e.g., the Bloomberg World Government Inflation-Linked Index (hedged)) will be calculated using the same conversion factors.
Initial Public Offerings (“IPOs”) —  A Fund may participate in the IPO market. An IPO is the first sale of stock by a company to the public. Companies offering an IPO are sometimes new or young companies or sometimes companies that have been around for many years but are deciding to go public.
Inverse Floaters —  A Fund may invest in inverse floaters. Inverse floaters are securities that have coupon rates that vary inversely at a multiple of a designated floating rate, such as the Secured Overnight Financing Rate or an alternative reference rate. Any rise in the reference rate of an inverse floater (as a consequence of an increase in interest rates) causes a drop in the coupon rate, while any drop in the reference rate of an inverse floater causes an increase in the coupon rate.
Investment Grade Securities —  A Fund may invest in investment grade debt securities. Investment grade securities are rated in one of the four highest rating categories by Moody’s, S&P or Fitch, comparably rated by another rating agency or, if unrated, determined by the Adviser or the applicable Sub-Adviser to be of comparable quality.
Loan Participations and Assignments —  A Fund may invest in loan participations and assignments. These investments are typically secured or unsecured fixed or floating rate loans arranged through private negotiations between a borrowing corporation, government or other entity and one or more financial institutions, and may be in the form of participations in loans or assignments of all or a portion of loans from third parties.
Mortgage- and Asset-Backed Securities —  A Fund may invest in mortgage- and asset-backed securities. A mortgage-backed security may be an obligation of the issuer backed by a mortgage or pool of mortgages or a direct interest in an underlying pool of mortgages. Some mortgage-backed securities make payments of both principal and interest at a variety of intervals; others make semiannual interest payments at a predetermined rate and repay principal at maturity (like a typical bond). Mortgage-backed securities are based on different types of mortgages, including those on commercial real estate or residential properties.
Asset-backed securities have structural characteristics similar to mortgage-backed securities. However, the underlying assets are not first lien mortgage loans or interests therein but include assets such as motor vehicle installment sales contracts, other installment sales contracts, home equity loans, leases of various types of real and personal property and receivables from revolving credit (credit card) agreements. Such assets are securitized through the use of trusts or special purpose corporations. Payments or distributions of principal and interest may be guaranteed up to a certain amount and for a certain time period by a letter of credit or pool insurance policy issued by a financial institution unaffiliated with the issuer, or other credit enhancements may be present.
Non-Investment Grade Securities —  A Fund may invest in securities rated below investment grade (i.e., BB or lower by S&P or Fitch, Ba or lower by Moody’s or deemed to be of comparable quality by the Adviser or a Sub-Adviser), sometimes referred to as
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“junk bonds”. Junk bonds are usually issued by companies without long track records of sales and earnings or by those companies with questionable credit strength.
Options —  A Fund may write and purchase put and call options, including exchange-traded or over-the-counter put and call options on securities indices and put and call options on ETFs tracking certain securities indices, for hedging and non-hedging purposes and for the purpose of achieving its objective. In general, options give the purchaser the right, but not the obligation, to buy or sell in the future an asset at a predetermined price during the term of the option. A securities index option and an ETF option are option contracts whose values are based on the value of a securities index at some future point in time. A securities index fluctuates with changes in the market values of the securities included in the index. The effectiveness of purchasing or writing securities index options will depend upon the extent to which price movements in a Fund’s investment portfolio correlate with price movements of the securities index. By writing (selling) a call option, a Fund forgoes, in exchange for the premium less the commission, the opportunity to profit during the option period from an increase in the market value of an index above the exercise price. By writing (selling) a put option, a Fund, in exchange for the net premium received, accepts the risk of a decline in the market value of the index below the exercise price.
Portfolio Turnover —  The Funds do not restrict the frequency of trading to limit expenses. A Fund may engage in active and frequent trading of portfolio securities to achieve its investment objective. A portfolio turnover rate of 100%, for example, is equivalent to a Fund buying and selling all of its portfolio securities once during the course of a given fiscal year. Sales of securities through frequent trading may result in realization of taxable capital gain, including short-term capital gain that will generally be taxable to shareholders as ordinary income and may adversely affect a Fund’s after-tax returns and its performance.
Preferred Stocks —  A Fund may invest in preferred stocks. Although preferred stocks represent a partial ownership interest in a company, preferred stocks generally do not carry voting rights and have economic characteristics similar to fixed-income securities. Preferred stocks generally are issued with a fixed par value and pay dividends based on a percentage of that par value at a fixed or variable rate. Preferred stocks often have a liquidation value that generally equals the original purchase price of the preferred stock at the date of issuance.
Real Estate Investment Trusts (REITs) —  A Fund may invest in REITs, which are pooled vehicles that invest primarily in income-producing real estate or loans related to real estate and are defined by the federal tax law. A REIT is not subject to federal corporate income tax, provided it complies with a number of Internal Revenue Code requirements, including distributing a significant portion of its net income to its shareholders. Various other countries have also adopted REIT-like structures that receive comparable tax treatment, provided certain requirements are met.
Securities of Other Investment Companies —  A Fund may invest in the securities of other investment companies to the extent permitted by applicable law. Generally, a Fund's investments in other investment companies are subject to statutory limitations in the 1940 Act, including in certain circumstances a prohibition against acquiring shares of another investment company if, immediately after such acquisition, the Fund (i) would hold more than 3% of such other investment company’s total outstanding shares, (ii) would have invested more than 5% of its total assets in such other investment company, or (iii) would have invested more than 10% of its total assets in investment companies in the aggregate. However, there are statutory and regulatory exemptions from these restrictions under the 1940 Act on which a Fund may rely to invest in other investment companies in excess of these limits, subject to certain conditions. Other investment companies in which a Fund may invest include ETFs, as discussed in “Exchange-Traded Funds (“ETFs”)”.
Short Sales —  A Fund may engage in short sales and may enter into derivative contracts that have a similar economic effect (e.g., taking a short position in a futures contract). A “short sale” is the sale by a Fund of a security that has been borrowed from a third party on the expectation that the market price will drop. If the price of the security drops, a Fund will make a profit by purchasing the security in the open market at a price lower than the price at which it sold the security. If the price of the security rises, a Fund may have to cover short positions at a higher price than the short sale price, resulting in a loss.
Swaps —  A Fund may engage in swap transactions. Swap contracts are derivatives in the form of a contract or other similar instrument that is an agreement to exchange the return generated by one instrument for the return generated by another instrument. The payment streams are calculated by reference to a specified security or index and agreed upon notional amount. The term “specified index” includes, but is not limited to, currencies, fixed interest rates, prices and total return on interest rate indices, fixed income indices, total return on equity securities, stock indices and commodity indices (as well as amounts derived from arithmetic operations on these indices).
Temporary Defensive Investments —  For temporary defensive purposes in response to adverse market, economic, political or other conditions, each Fund may invest, without limit, in cash, money market instruments or high quality, short-term debt securities, including repurchase agreements. To the extent a Fund is invested in these instruments, the Fund will not be pursuing its principal investment strategies and may not achieve its investment objective.
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U.S. Government Securities —  A Fund may invest in U.S. government securities, which include direct obligations of the U.S. Treasury (such as Treasury bills, notes or bonds) and obligations issued or guaranteed as to principal and interest (but not as to market value) by the U.S. government or its agencies or instrumentalities. U.S. government securities include mortgage- and asset-backed securities issued or guaranteed by government agencies or government-sponsored enterprises. Other U.S. government securities may be backed by the full faith and credit of the U.S. government or supported primarily or solely by the creditworthiness of the government-related issuer or, in the case of mortgage-backed securities, by pools of assets.
When-Issued Securities, Delayed Delivery Securities and Forward Commitments —  A Fund may purchase or sell securities that it is entitled to receive on a when issued basis. A Fund may also purchase or sell securities on a delayed delivery basis or through a forward commitment (including on a “TBA” (to be announced) basis). These transactions involve the purchase or sale of securities by a Fund at an established price with payment and delivery taking place in the future. A Fund enters into these transactions to obtain what is considered an advantageous price to the Fund at the time of entering into the transaction.
Zero Coupon and Pay-in-Kind Securities —  A Fund may invest in zero coupon and pay-in-kind securities. Zero coupon securities are debt securities that do not pay regular interest at regular intervals, but are issued at a discount from face value. The discount approximates the total amount of interest the security will accrue from the date of issuance to maturity. Pay-in-kind securities normally give the issuer an option to pay cash at a coupon payment date or to give the holder of the security a similar security with the same coupon rate and a face value equal to the amount of the coupon payment that would have been made. Convertible securities, corporate debt securities, mortgage- and asset-backed securities, U.S. government securities, foreign securities and other types of debt instruments may be structured as zero coupon or pay-in-kind securities.
Risks
Risk is the chance that you will lose money on your investment or that it will not earn as much as you expect. In general, the greater the risk, the more money your investment can earn for you and the more you can lose. Like other investment companies, the value of each Fund's shares may be affected by the Fund's investment objective(s), principal investment strategies and particular risk factors. Each Fund follows a distinct set of investment strategies. Consequently, each Fund may be subject to different risks. Some of the risks of investing in the Funds are discussed below, including the principal risks of the Funds as discussed in “About the Funds — Investments, Risks, and Performance — Principal Risks.” However, other factors may also affect a Fund's investment results. There is no assurance that a Fund will achieve its investment objective(s) or that it will not lose value. For further information about investment risks, please see the 1290 Funds’ SAI.
To the extent a Fund invests in Underlying ETFs that invest primarily in certain types of securities or other instruments (such as equity securities and other equity instruments, fixed income securities and other fixed income instruments, foreign securities, or alternative investments), the performance of the Fund will be subject to the risks of investing in such securities or other instruments. The Underlying ETFs have principal investment strategies that come with inherent risks. Certain Underlying ETFs may emphasize different market sectors. Some of the risks, including principal risks of investing in the Underlying ETFs, are discussed below. An Underlying ETF may be subject to certain additional risks as discussed in its prospectus. More information about the Underlying ETFs is available in their respective prospectuses. To the extent a Fund invests in Underlying ETFs, the return on your investment will be based on the risks and rewards of the Underlying ETFs’ investments. In this section, the term “Fund” may include a Fund, an Underlying ETF, or both..
Principal Investment Risks
As indicated in “About the Funds — Investments, Risks, and Performance — Principal Risks,”  a Fund may be subject to the following principal risks. The risks, which are described in alphabetical order and not in order of perceived importance or potential exposure, can negatively affect a Fund's performance.
Alternative Investment Risk —  To the extent a Fund invests in Underlying ETFs that invest in alternative investments, it will be subject to the risks associated with such investments. Alternative investments may involve a different approach to investing than do traditional investments (stocks, bonds, and cash) and the performance of alternative investments is not expected to correlate closely with more traditional investments; however, it is possible that alternative investments will decline in value along with equity or fixed income markets, or both, or that they may not otherwise perform as expected. Alternative investments can be highly volatile, are often less liquid, particularly in periods of stress, and are generally more complex and less transparent than traditional investments. Alternative investments also may have more complicated tax considerations than traditional investments, which could involve investment structures subject to income tax that could adversely impact the return to shareholders. In addition, the performance of alternative investments may be more dependent on the Adviser’s experience and skill than the performance of traditional investments. The use of alternative investments may not achieve the desired effect and may result in losses to a Fund.
Asset Allocation Risk —  The investment performance of an allocation Fund depends upon how its assets are allocated across various asset classes and how its assets are invested within those asset classes. Some asset classes and investments may perform
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below expectations or the securities markets generally over short and extended periods. The allocation strategies used and the allocation and investment decisions made could cause a Fund to lose value, may not produce the desired results, or may cause a Fund’s results to lag relevant benchmarks or other funds with similar investment objectives. For example, weighting equity securities too heavily during a period of stock market decline may result in a failure to preserve capital. Conversely, weighting debt securities too heavily during a period of stock market appreciation may result in lower total return. In addition, the allocation and investment decisions made may not be timely relative to market, economic or other developments. Moreover, if a Fund has set limitations on the amount of assets that normally may be allocated to each asset class, the Fund will have less flexibility in its investment strategy than funds that are not subject to such limitations.
Cash Management Risk —  Upon entering into certain derivatives contracts, such as futures contracts, and to maintain open positions in certain derivatives contracts, a Fund may be required to post collateral for the contract, the amount of which may vary. In addition, a Fund may maintain cash and cash equivalent positions as part of the Fund's strategy in order to take advantage of investment opportunities as they arise, to manage the Fund's market exposure and for other portfolio management purposes. As such, a Fund may maintain cash balances, including foreign currency balances, which may be significant, with counterparties such as the 1290 Funds' custodian or its affiliates. Maintaining larger cash and cash equivalent positions could negatively affect a Fund's performance due to missed investment opportunities and may also subject a Fund to additional risks, such as increased credit risk with respect to the custodian bank holding the assets and the risk that a counterparty may be unable or unwilling to honor its obligations, and costs, such as any fees imposed for large cash balances.
Collateralized Loan Obligations Risk —  Investments in collateralized loan obligations (“CLOs”) involve many of the same risks associated with investments in debt securities and asset-backed securities, including interest rate risk, credit risk, liquidity risk, prepayment and extension risk, and valuation risk. The risks of an investment in a CLO also depend largely on the quality and type of the collateral and the class or “tranche” of the CLO in which a Fund invests. An investment in a junior tranche is subject to a greater risk of depreciation or loss than an investment in a more senior tranche. Normally, CLOs are privately offered and sold, and thus are not registered under the securities laws. As a result, investments in CLOs may be characterized by a Fund as illiquid securities; however, an active dealer market, or other relevant measures of liquidity, may exist for CLOs allowing a CLO potentially to be deemed liquid under a Fund’s liquidity policies. Additionally, CLOs carry risks including, but not limited to: (a) the possibility that distributions from collateral securities will not be adequate to make interest or other payments; (b) the risk that the collateral securities may decline in value or quality or be downgraded or go into default, particularly during periods of economic downturn; (c) the possibility that a Fund may invest in CLOs that are subordinate to other classes; (d) the risk that the manager of the CLOs may perform poorly; and (e) the risk that complex structure of CLOs may produce disputes with the issuer or unexpected investment results. CLOs also can be difficult to value and may be highly leveraged (which could make them highly volatile), and the use of CLOs may result in losses to a Fund.
Commodity Risk —  Exposure to the commodities markets, or a particular sector of the commodities markets, may subject a Fund to greater volatility than investments in traditional securities, and changes in those markets may cause the Fund’s holdings to lose value. The commodities markets may fluctuate widely based on a variety of factors including changes in overall market movements, resource availability, domestic and foreign political and economic events and policies, trade policies and tariffs, war, acts of terrorism, changes in exchange rates, domestic or foreign interest rates or inflation rates and/or investor expectations concerning such rates, and trading activities in commodities. The frequency, duration and magnitude of such changes cannot be predicted. The prices of various commodities may also be affected by factors such as drought, floods and weather, pandemics, livestock disease, embargoes, tariffs and countermeasures, and regulatory developments. The prices of commodities can also fluctuate widely due to supply and demand disruptions in major producing or consuming regions. Certain commodities may be produced in a limited number of countries and may be controlled by a small number of producers. As a result, political, economic and supply-related events in such countries could have a disproportionate impact on the prices of such commodities. Securities of companies that are dependent on a single commodity, or are concentrated in a single commodity sector, may exhibit even higher volatility attributable to commodity prices. No active trading market may exist for certain commodities investments, which may impair the ability of a Fund to sell or realize the full value of such investments in the event of the need to liquidate such investments. In addition, adverse market conditions may impair the liquidity of commodities investments.
Because the value of a commodity-linked derivative instrument typically is based upon the price movements of a physical commodity, the value of a commodity-linked derivative instrument may be affected by changes in overall market movements, commodity price volatility, commodity index volatility, changes in interest rates, or factors affecting a particular industry or commodity. The value of these instruments will rise or fall in response to changes in the underlying commodity or related index of investment. Some commodity-linked investments are issued by companies in the financial services sector, including the banking, brokerage and insurance sectors. As a result, events affecting issuers in the financial services sector may adversely affect a Fund’s performance. Although investments in commodities may move in different directions than traditional equity securities and debt instruments, when the value of those traditional investments is declining due to adverse economic conditions, there is no guarantee that commodities will perform
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in that manner, and at certain times the price movements of commodity-linked investments have been parallel to those of traditional equity securities and debt instruments.
Convertible Securities Risk —  A convertible security is a form of hybrid security; that is, a security with both debt and equity characteristics. The value of a convertible security fluctuates in relation to changes in interest rates and the credit quality of the issuer and also fluctuates in relation to changes in the price of the underlying common stock. A convertible security tends to perform more like a stock when the underlying stock price is high relative to the conversion price (because more of the security’s value resides in the option to convert) and more like a debt security when the underlying stock price is low relative to the conversion price (because the option to convert is less valuable). Because its value can be influenced by many different factors, a convertible security generally is not as sensitive to interest rate changes as a similar non-convertible debt security, and generally has less potential for gain or loss than the underlying stock. A convertible security may be subject to redemption at the option of the issuer at a price established in the convertible security’s governing instrument, which may be less than the current market price of the security. If a convertible security held by a Fund is called for redemption, the Fund will be required to permit the issuer to redeem the security, convert it into underlying common stock or sell it to a third party. Investments by a Fund in convertible debt securities may not be subject to any ratings restrictions, but a Fund’s investment manager will consider ratings, and any changes to ratings, in its determination of whether the Fund should invest in and/or continue to hold the securities. Convertible securities are subject to equity risk, interest rate risk, and credit risk and are often lower-quality securities. Lower quality may lead to greater volatility in the price of a security and may negatively affect a security’s liquidity. Since it derives a portion of its value from the common stock into which it may be converted, a convertible security is also subject to the same types of market and issuer-specific risks that apply to the underlying common stock. To the extent a Fund invests in convertible securities issued by small- or mid-cap companies, it also will be subject to the risks of investing in these companies. The securities of small- and mid-cap companies are often more volatile and less liquid than the securities of larger companies. Convertible securities are normally “junior” securities, which means an issuer usually must pay interest on its non-convertible debt securities before it can make payments on its convertible securities. If an issuer stops making interest or principal payments, these securities may become worthless and a Fund could lose its entire investment. In the event of a liquidation of the issuing company, holders of convertible securities may be paid before the company’s common stock holders but after holders of any senior debt obligations of the company. To the extent a Fund invests in securities that may be considered “enhanced” convertible securities, some or all of these risks may be more pronounced.
Counterparty Risk —  A Fund may sustain a loss as a result of the insolvency or bankruptcy of, or other non-compliance or non-performance by, another party to a transaction.
Credit Risk —  A Fund is subject to the risk that the issuer or the guarantor (or other obligor, such as a party providing insurance or other credit enhancement) of a fixed income security, or the counterparty to a derivatives contract, repurchase agreement, loan of portfolio securities or other transaction, is unable or unwilling, or is perceived (whether by market participants, ratings agencies, pricing services or otherwise) as unable or unwilling, to make timely interest and/or principal payments or otherwise honor its obligations, or defaults completely, which may cause the Fund’s holdings to lose value. Securities are subject to varying degrees of credit risk, which are often reflected in their credit ratings. Generally, the longer the maturity and the lower the credit quality of a security, the more sensitive it is to credit risk. Higher credit ratings correspond to lower perceived credit risk, and lower credit ratings correspond to higher perceived credit risk. However, rating agencies may fail to make timely changes to credit ratings in response to subsequent events and a credit rating may become stale in that it fails to reflect changes in an issuer’s financial condition. Credit ratings also may be influenced by conflicts of interest. Credit ratings represent a rating agency’s opinion regarding the quality of a security and are not a guaranty of quality. Credit ratings do not protect against a decline in the value of a security. The downgrade of a security’s credit rating may decrease its value. Lower credit quality also may lead to greater volatility in the price of a security and may negatively affect a security’s liquidity. The credit quality of a security can deteriorate suddenly and rapidly. A Fund may experience a significant or complete loss on a fixed income security or a transaction. When a fixed income security is not rated, an investment manager may have to assess the risk of the security itself. In addition, legislation and regulations to reform rating agencies could adversely impact a Fund’s investments or investment process.
Derivatives Risk —  A derivative instrument is generally an investment contract the value of which depends upon (or is derived from), in whole or in part, the value of an underlying asset, reference rate, index or event (e.g., stocks, bonds, commodities, currencies, interest rates and market indexes). A Fund's investments in derivatives may rise or fall in value more rapidly than other investments and may reduce the Fund's returns and increase the volatility of the Fund's net asset value. Examples of derivative instruments include, among others, forward contracts, futures contracts, options contracts, options on futures contracts, and swaps. Particular derivative instruments that a Fund may use are described under “Investments, Risks, and Performance — Principal Investment Strategy” in this Prospectus. The following provides a more general discussion of important risk factors (e.g., counterparty and credit risk, leveraging risk, liquidity risk, management risk, market and interest rate risk, valuation risk, and other risks) relating to all derivative instruments that a Fund may use. A discussion of additional risks associated with particular derivative instruments follows the general discussion,
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and particular derivative instruments are discussed in more detail under “Additional Investment Strategies and Risks” in the Statement of Additional Information.
Counterparty and Credit Risk —  A Fund may be exposed to losses if the counterparty in the transaction is unable or unwilling to fulfill its contractual obligation. Counterparty risk may arise because of market activities and developments, the counterparty’s financial condition (including financial difficulties, bankruptcy, or insolvency), or other reasons. To the extent a Fund has significant exposure to a single counterparty or small group of counterparties, this risk will be particularly pronounced. In addition, derivatives traded over-the-counter that are uncleared do not benefit from the protections provided by exchanges and central counterparties (derivatives clearing organizations and clearing corporations) in the event that a counterparty is unable or unwilling to fulfill its contractual obligation. Such uncleared over-the-counter derivatives therefore involve greater counterparty and credit risk and may be more difficult to value than exchange-traded derivatives that are cleared by a central counterparty.
Leveraging Risk —  Derivatives may be leveraged such that a small investment can have a significant impact on a Fund’s exposure to stock market values, interest rates, currency exchange rates or other investments. As a result, a relatively small price movement in a derivatives contract may cause an immediate and substantial loss or gain, and a Fund could lose more than the amount it invested. A Fund may experience leveraging risk in connection with investments in derivatives because its investments in derivatives may be small relative to the investment exposure assumed, leaving more assets to be invested in other investments. Such investments may have the effect of leveraging a Fund because the Fund may experience gains or losses not only on its investments in derivatives, but also on the investments purchased with the remainder of the assets. If the value of a Fund’s investments in derivatives is increasing, this could be offset by declining values of the Fund’s other investments. Conversely, it is possible that a rise in the value of a Fund’s non-derivative investments could be offset by a decline in the value of the Fund’s investments in derivatives. In either scenario, a Fund may experience losses. In a market where the value of a Fund’s investments in derivatives is declining and the value of its other investments is declining, the Fund may experience substantial losses. Some derivatives can have the potential for unlimited losses, regardless of the size of the initial investment.
Liquidity Risk —  It may be difficult or impossible for a Fund to purchase or sell certain derivatives in sufficient amounts to achieve the desired level of exposure, which may result in a loss or may be costly to the Fund. In addition, the possible lack of a liquid secondary market for certain derivatives, and the resulting inability of a Fund to sell or otherwise close out a derivatives position, could expose the Fund to losses and could make such derivatives more difficult for the Fund to value accurately.
Management Risk —  Derivative products are highly specialized instruments. Investing in derivatives involves investment techniques and risk analyses different from, and risks in some respects greater than, those associated with investing in more traditional investments, such as stocks and bonds. The use of a derivative requires an understanding not only of the underlying asset, reference rate, index or event, but also of the derivative itself, without the benefit of observing the performance of the derivative under all possible market conditions.
Market and Interest Rate Risk —  Some derivatives are more sensitive to market price fluctuations and to interest rate changes than other investments. The successful use of derivatives will usually depend on the Adviser’s or a Sub-Adviser's ability to accurately forecast movements in the market relating to the underlying asset, reference rate, index or event. If the Adviser or a Sub-Adviser does not predict correctly the direction of asset prices, interest rates and other economic factors, a Fund’s derivatives positions could lose value. Derivatives may not behave as anticipated by a Fund, especially in abnormal market conditions. Derivatives strategies that are successful under certain market conditions may be less successful or unsuccessful under other market conditions. While some derivatives strategies can reduce the risk of loss, they can also reduce the opportunity for gain or result in losses by offsetting favorable price movements in other Fund investments.
Valuation Risk —  Derivatives also may be subject to the risk of mispricing or improper valuation, and valuation may be more difficult in times of market turmoil. Improper valuations can result in increased cash payment requirements to counterparties or a loss of value to a Fund. Changes in the value of a derivative may not correlate perfectly, or at all, with the underlying asset, reference rate or index.
Other Risks —  Derivatives also may be subject to risks related to potential operational issues, including documentation issues, settlement issues, systems failures, inadequate controls, and human error, as well as legal risks, such as insufficient documentation, the lack of capacity or authority of a counterparty to execute or settle a transaction, or the legality or enforceability of a contract.
When a derivative is used as a hedge against a position that a Fund holds, any loss generated by the derivative should generally be offset by gains on the hedged instrument, and vice versa. While hedging can reduce or eliminate losses, it also can reduce or eliminate gains. Hedges are sometimes subject to imperfect matching between the derivative and the hedged investment,
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and there can be no assurance that a Fund's hedging transactions will be effective. Also, suitable derivative transactions may not be available in all circumstances, and there can be no assurance that a Fund will engage in derivative transactions to reduce exposure to other risks when that might be beneficial or that, if used, such strategies will be successful.
When a Fund uses derivatives, it will likely be required to provide margin or collateral; these practices are intended to satisfy contractual undertakings and regulatory requirements and will not prevent the Fund from incurring losses on derivatives. The need to provide margin or collateral could limit a Fund's ability to pursue other opportunities as they arise. Derivatives that have margin requirements involve the risk that if a Fund has insufficient cash or eligible margin securities to meet daily variation margin requirements, it may have to sell securities or other instruments from its portfolio at a time when it may be disadvantageous to do so. Derivatives also may involve fees, commissions, or other costs that may reduce a Fund's gains or exacerbate its losses from the derivatives.
The federal income tax treatment of a derivative may not be as favorable as a direct investment in an underlying asset and may adversely affect the timing, character and amount of income a Fund realizes from its investments. In addition, certain derivatives are subject to mark-to-market or straddle provisions of the Internal Revenue Code. The federal income tax treatment of certain derivatives, such as swaps, is unsettled and may be subject to future legislation, regulation or administrative pronouncements issued by the Internal Revenue Service.
Legislative and regulatory developments may limit the availability of certain derivatives, may reduce the attractiveness or increase the cost of derivatives, and may otherwise adversely impact the performance and value of derivatives. Legislative and regulatory developments also may change the way in which a Fund itself is regulated. Such developments may impact a Fund's ability to invest, or remain invested, in certain derivatives, adversely affect a Fund's ability to achieve its investment objective, and adversely affect a Fund's efficiency in implementing its investment strategies. Complying with new requirements also may increase the cost of a Fund's investments and the cost of implementing a Fund's investment program and related operations, which could adversely affect a Fund and its investors. For example, the SEC has adopted new requirements and restrictions governing registered funds’ (including the Funds') use of derivatives (“Rule 18f-4”). The Funds have implemented policies and procedures to comply with Rule 18f-4. Unless a Fund limits its derivatives exposure to 10% or less of its net assets and qualifies as a ‘‘limited derivatives user’’ under Rule 18f-4, the rule, among other things, requires that the Fund establish a derivatives risk management program, comply with certain value-at-risk based leverage limits, appoint a derivatives risk manager, and provide additional disclosure both publicly and to the SEC regarding its derivatives positions. If a Fund qualifies as a limited derivatives user, Rule 18f-4 requires the Fund to implement policies and procedures reasonably designed to manage its derivatives risk. The requirements of Rule 18f-4 are intended to reduce derivatives risk, but they may not work as intended. Analyses, judgments and decisions made in connection with administering the derivatives risk management program may be incorrect or otherwise may not produce the desired results. In addition, changes in market conditions, which may occur rapidly and unpredictably, may adversely affect the administration of the program.
A discussion of additional risks associated with particular derivative instruments follows:
Forward Contract Risk —  There are no limits on daily price fluctuations of forward contracts. Changes in foreign exchange regulations by governmental authorities might limit the trading of forward contracts on currencies. There have been periods during which certain counterparties have refused to continue to quote prices for forward contracts or have quoted prices with an unusually wide spread (i.e., the difference between the price at which the counterparty is prepared to buy and the price at which it is prepared to sell).
Futures Contract Risk —  There can be no assurance that a liquid market will exist for any particular futures contract at any particular time. Exchanges may establish daily price fluctuation limits for futures contracts and may halt trading if a contract’s price moves upward or downward more than the limit in a given day. On volatile trading days when the price fluctuation limit is reached or a trading halt is imposed, it may be impossible to enter into new positions or close out existing positions. If the market for a contract is not liquid because of price fluctuation limits or other market conditions, it could prevent prompt liquidation of unfavorable positions, and potentially could require a Fund to continue to hold a position until delivery or expiration regardless of changes in its value. As a result, a Fund’s access to other assets held to cover its futures positions could also be impaired.
Options Contract Risk —  There can be no guarantee that the use of options will increase a Fund's return or income. By writing (selling) a put option, a Fund takes on the risk of a decline in the value of the underlying instrument, including the possibility of a loss up to the entire strike price of the option it sells, but without the corresponding opportunity to benefit from a potential increase in the value of the underlying instrument. When a Fund writes a put option, it assumes the risk that it must purchase the underlying instrument at a strike price that may be higher than the market price of the instrument. If there is a broad market decline and a Fund is not able to close out its written put options, it may result in substantial losses to the Fund.
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By writing (selling) a call option, a Fund assumes the risk that it must sell the underlying instrument at a strike price that may be lower than the market price of the instrument. In the case of an uncovered call option, there is a risk of unlimited loss. When an uncovered call is exercised, a Fund must purchase the underlying instrument to meet its call obligations and the necessary instrument may be unavailable for purchase. Additionally, volatility in the market for equity securities, which has been dramatically increased recently for certain stocks, can meaningfully increase the risk of loss associated with options. When a Fund writes a covered call option, it gives up the opportunity to profit from a price increase in the underlying instrument above the strike price. If a call option that a Fund has written is exercised, the Fund will experience a gain or loss from the sale of the underlying instrument, depending on the price at which the Fund purchased the instrument and the strike price of the option. A Fund will receive a premium from writing options, but the premium received may not be sufficient to offset any losses sustained from exercised options. If a call option that a Fund has written expires unexercised, the Fund will experience a gain in the amount of the premium if received; however, that gain may be offset by a decline in the market value of the underlying instrument during the option period. If an option that a Fund has purchased is never exercised or closed out, the Fund will lose the amount of the premium it paid and the use of those funds.
Swaps Risk —  Swap transactions generally do not involve delivery of reference instruments or payment of the notional amount of the contract. Accordingly, the risk of loss with respect to swaps generally is limited to the net amount of payments that a Fund is contractually obligated to make or, in the case of the other party to a swap defaulting, the net amount of payments that a Fund is contractually entitled to receive. As a seller of a credit default swap, a Fund effectively adds economic leverage because, in addition to its total net assets, the Fund is subject to investment exposure on the entire notional amount of the contract. See “Leveraging Risk” above. Additionally, holding a position in a credit default swap could result in losses if a Fund does not correctly evaluate the creditworthiness of the company on which the credit default swap is based. Some swaps are now executed through an organized exchange or regulated facility and cleared through a regulated clearing organization. The absence of an organized exchange or market for certain swap transactions may result in difficulties in trading and valuation, especially in the event of market disruptions. The use of an organized exchange or market for swap transactions is expected to result in swaps being easier to trade or value, but this may not always be the case.
Dollar Roll and Sale-Buyback Transactions Risk —  Dollar roll and sale-buyback transactions may increase a Fund's volatility and may be viewed as a form of leverage. There is also a risk that the counterparty will be unable or unwilling to complete the transaction as scheduled, which may result in losses to a Fund.
Equity Risk —  In general, the values of stocks and other equity securities fluctuate, and sometimes widely fluctuate, in response to changes in a company’s financial condition as well as general market, economic and political conditions and other factors. Stock markets tend to run in cycles, with periods when stock prices generally go up and periods when stock prices generally go down. However, stock markets also can move up and down rapidly and unpredictably. Equity securities generally have greater price volatility than fixed-income securities. A Fund may experience a significant or complete loss on its investment in an equity security. In addition, common stock prices may be particularly sensitive to rising interest rates, which increase borrowing costs and the costs of capital.
ESG Considerations Risk —  Consideration of environmental, social and governance (“ESG”) factors in the investment process may limit the types and number of investment opportunities available to a Fund, and therefore carries the risk that, under certain market conditions, the Fund may underperform funds that do not consider ESG factors or use a different methodology to identify and/or integrate ESG factors. The integration of ESG considerations may affect a Fund's exposure to certain sectors or types of investments and may impact a Fund's relative investment performance depending on whether such sectors or investments are in or out of favor in the market. Furthermore, ESG criteria are not uniformly defined, and a Fund’s ESG criteria may differ from those used by other funds. A company’s ESG performance or the Sub-Adviser’s assessment of a company’s ESG performance may change over time, which could cause a Fund temporarily to hold securities that do not comply with the Fund's ESG investment principles. Information or data used in evaluating a company may not be complete, accurate, or readily available, which could cause the Sub-Adviser to incorrectly assess a company’s ESG performance. Socially responsible norms differ by region, and an issuer’s ESG practices or the Sub-Adviser’s assessment of an issuer’s ESG practices may change over time. Successful application of a Fund's ESG considerations will depend on the Sub-Adviser’s skill in properly identifying and analyzing material ESG issues, and there can be no assurance that the considerations or techniques employed will be successful. While the Sub-Adviser views ESG considerations as having the potential to contribute to a Fund's long-term performance, there is no guarantee that such results will be achieved. There is also a risk that a Fund could have indirect exposure (through, including but not limited to, derivatives and investments in other investment companies) to issuers that do not meet the relevant ESG criteria used by the Fund. In addition, investors may differ in their views of what constitutes positive or negative ESG characteristics of a security. ESG investing is qualitative and subjective by nature, and there is no guarantee that the factors utilized by the Sub-Adviser or any judgment exercised by the Sub-Adviser will reflect the opinions of any particular investor, and the factors utilized by the Sub-Adviser may differ from the factors that any particular investor considers relevant in evaluating an issuer’s ESG practices. Further, the regulatory landscape for ESG investing in the United States is evolving, and future rules or regulations may require a Fund to change its investment process.
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Exchange-Traded Funds Risk —  A Fund’s shareholders will indirectly bear fees and expenses paid by the ETFs in which it invests, in addition to the Fund’s direct fees and expenses. The cost of investing in a Fund, therefore, may be higher than the cost of investing in a mutual fund that invests directly in individual stocks and bonds. In addition, a Fund’s net asset value will be subject to fluctuations in the market values of the ETFs in which it invests. A Fund is also subject to the risks associated with the securities or other investments in which the ETFs invest, and the ability of the Fund to meet its investment objective will directly depend on the ability of the ETFs to meet their investment objectives. The extent to which the investment performance and risks associated with a Fund correlate to those of a particular ETF will depend upon the extent to which the Fund’s assets are allocated from time to time for investment in the ETF, which will vary. A Fund does not control the investments of the ETFs, which may have different investment objectives and may engage in investment strategies that the Fund would not engage in directly. The ETFs may change their investment objectives or policies without the approval of a Fund. If that were to occur, the Fund might be forced to sell its investment in an ETF at a time and price that is unfavorable to the Fund.
In addition, many ETFs invest in securities included in, or representative of, underlying indexes regardless of investment merit or market trends and, therefore, these ETFs do not change their investment strategies to respond to changes in the economy, which means that such an ETF may be particularly susceptible to a general decline in the market segment relating to the relevant index. Imperfect correlation between an ETF’s securities and those in the index it seeks to track, rounding of prices, changes to the indices and regulatory policies may cause an ETF’s performance not to match the performance of its index. An ETF’s use of a representative sampling approach will result in its holding a smaller number of securities than are in the index it seeks to track. As a result, an adverse development respecting an issuer of securities held by the ETF could result in a greater decline in net asset value than would be the case if the ETF held all of the securities in the index. To the extent the assets in the ETF are smaller, these risks will be greater. No ETF fully replicates its index, and an ETF may hold securities not included in its index. Therefore, there is a risk that the investment strategy of the ETF manager may not produce the intended results.
Moreover, there is the risk that an ETF may value certain securities at a price higher than the price at which it can sell them. Secondary market trading in shares of ETFs may be halted by a national securities exchange because of market conditions or for other reasons. In addition, trading in these shares is subject to trading halts caused by extraordinary market volatility pursuant to “circuit breaker” rules. There can be no assurance that the requirements necessary to maintain the listing of the shares will continue to be met or will remain unchanged. In addition, although ETFs are listed for trading on national securities exchanges, certain foreign exchanges and in over-the-counter markets, there can be no assurance that an active trading market for such shares will develop or be maintained, in which case the liquidity and value of a Fund’s investment in the ETFs could be substantially and adversely affected. In addition, because ETFs are traded on these exchanges and in these markets, the purchase and sale of their shares involve transaction fees and commissions. The market price of an ETF may be different from the net asset value of such ETF (i.e., an ETF may trade at a discount or premium to its net asset value). The performance of a Fund that invests in such an ETF could be adversely impacted.
Foreign Securities Risk —  Investments in foreign securities, including depositary receipts, involve risks not associated with, or more prevalent than those that may be associated with, investments in U.S. securities. The economies of certain foreign markets may not compare favorably with the economy of the United States with respect to such issues as growth of gross national product, reinvestment of capital, resources and balance of payments position. Over a given period of time, foreign securities may underperform U.S. securities — sometimes for years. A Fund could also underperform if it invests in countries or regions whose economic performance falls short. Foreign markets may be less liquid, more volatile and subject to less government supervision and regulation than U.S. markets, and it may take more time to clear and settle trades involving foreign securities. Security values also may be negatively affected by changes in the exchange rates between the U.S. dollar and foreign currencies. Differences between U.S. and foreign legal, political and economic systems, regulatory regimes and market practices, as well as trade barriers and other protectionist trade policies (including those of the United States), governmental instability, war or other political or economic actions or factors, also may adversely impact security values. Foreign securities are also subject to the risks associated with the potential imposition of economic or other sanctions against a particular foreign country, its nationals, businesses or industries. The costs of buying and selling foreign securities, including taxes, brokerage and custody costs, generally are higher than the costs of buying and selling domestic securities. World markets, or those in a particular region, may all react in similar fashion to important economic, political or other developments. Events and evolving conditions in certain economies or markets may alter the risks associated with investments tied to countries or regions that historically were perceived as comparatively stable and make such investments riskier and more volatile. In addition, securities issued by U.S. entities with substantial foreign operations or holdings can involve risks relating to conditions in foreign countries. Regardless of where a company is organized or its stock is traded, its performance may be significantly affected by events in regions from which it derives its profits or in which it conducts significant operations.
Currency Risk —  Investments in foreign currencies and in securities that trade in, or receive revenues in, or in derivatives that provide exposure to foreign currencies are subject to the risk that those currencies will decline in value relative to the U.S. dollar. Any such decline may erode or reverse any potential gains from an investment in securities denominated in foreign currency or may widen existing loss. To the extent a Fund invests or hedges based on the perceived relationship between two currencies,
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there is a risk that the correlation between those currencies may not behave as anticipated. Currency rates may fluctuate significantly over short periods of time and can be affected unpredictably by a number of factors, including changes in interest rates; intervention (or the failure to intervene) by U.S. or foreign governments, central banks or supranational entities; investor perception of a country’s economy; or the imposition of currency controls or other political developments in the United States or abroad. Currency exchange rates may fluctuate in response to factors external to a country’s economy, which makes the forecasting of currency market movements extremely difficult. Currency risk may be particularly high to the extent that a Fund invests in foreign securities or currencies that are economically tied to emerging market countries.
Depositary Receipts Risk —  Investments in depositary receipts (including American Depositary Receipts, European Depositary Receipts and Global Depositary Receipts) involve many of the same risks associated with investing directly in foreign securities, including the economic and political risks associated with the underlying issuer’s country. In addition, the underlying issuers of certain depositary receipts, particularly unsponsored or unregistered depositary receipts, are under no obligation to distribute shareholder communications to the holders of such receipts or to pass through to them any voting rights with respect to the deposited securities. A Fund may therefore receive less timely information or have less control than if it invested directly in the foreign issuer. Depositary receipts are subject to the risk of fluctuation in the currency exchange rate if, as is often the case, the underlying foreign securities are denominated in foreign currency, and there may be an imperfect correlation between the market value of depositary receipts and the underlying foreign securities. Certain countries may limit the ability to convert a depositary receipt into the underlying foreign security and vice versa, which may cause the securities of the foreign company to trade at a discount or premium to the market price of the related depositary receipts. In some cases, if a Fund, as the holder of a depositary receipt, is compelled to convert the depositary receipt into the underlying foreign security but is unable successfully to complete the conversion, the depositary receipt could be rendered worthless and the Fund could lose its entire investment.
Emerging Markets Risk —  Emerging market countries generally are located in Asia, the Middle East, Eastern Europe, Central and South America, and Africa. There are greater risks and uncertainties involved in investing in emerging market countries and/or their securities markets, and investments in these countries and/or markets are more susceptible to loss than investments in developed countries and/or markets. Investments in these countries and/or markets may present market, credit, currency, liquidity, legal, political, technical and other risks different from, or greater than, the risks of investing in developed countries. For instance, these countries may be more likely than developed countries to experience rapid and significant adverse developments in their political, economic or social structures or intervene in or manipulate financial markets. Some emerging market countries restrict foreign investments, impose high withholding or other taxes on foreign investments, impose restrictive exchange control regulations, or may nationalize or expropriate the assets of private companies. Therefore, a Fund may be limited in its ability to make direct or additional investments in an emerging market country or could lose the entire value of its investment in the affected market. Such restrictions also may have negative impacts on transaction costs, market price, and investment returns. The U.S. government also may impose restrictions on the ability of U.S. investors to hold and/or acquire securities of certain companies in emerging market countries, which may adversely impact a Fund.
In addition, companies in emerging market countries may be newly organized, smaller and less seasoned, and the securities markets of emerging market countries generally are smaller, less liquid and more volatile than those of developed countries. Shareholder claims and legal remedies that are common in the United States may be difficult or impossible to pursue in many emerging market countries. In addition, due to jurisdictional limitations, matters of comity and various other factors, U.S. authorities may be limited in their ability to bring enforcement actions against non-U.S. companies and non-U.S. persons in certain emerging market countries. Emerging market countries often have less uniformity in (or may lack) regulatory, accounting, auditing and financial reporting requirements or standards, which may impact the availability and quality of information about issuers; less reliable clearance and settlement procedures, which may be unable to keep pace with the volume of securities transactions or otherwise make it difficult to engage in such transactions; and less reliable registration and custodial procedures, which could result in ownership registration being completely lost. There are generally higher commission rates on foreign portfolio transactions, transfer taxes, and higher custodial costs. A Fund may not know the identity of trading counterparties, which may increase the possibility of the Fund not receiving payment or delivery of securities in a transaction. Emerging market countries also may be subject to high inflation and rapid currency devaluations, and currency-hedging techniques may be unavailable in certain emerging market countries. In addition, some emerging market countries may be heavily dependent on international trade, which can materially affect their securities markets. Certain emerging market countries are among the largest debtors to commercial banks and foreign governments. At times, certain emerging market countries have declared moratoria on the payment of principal and interest on external debt. Certain emerging market countries have experienced difficulties in servicing their sovereign debt on a timely basis, which has led to defaults and the restructuring of certain indebtedness. Investments in frontier markets may be subject to greater levels of these risks than investments in more developed and traditional emerging markets.
European Economic Risk —  The European Union’s (the “EU”) Economic and Monetary Union requires member countries to comply with restrictions on interest rates, deficits, debt levels, and inflation rates, and other factors, each of which may significantly
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impact every European country and their economic partners. The economies of EU member countries and their trading partners may be adversely affected by changes in the exchange rate of the euro (the common currency of the EU), changes in EU or governmental regulations on trade and other areas, geopolitical tensions or conflicts, and the threat of default or an actual default by an EU member country on its sovereign debt, which could negatively impact a Fund’s investments and cause it to lose money. In recent years, the European financial markets have been negatively impacted by concerns relating to rising government debt levels and national unemployment; possible default on or restructuring of sovereign debt in several European countries; and economic downturns. Responses to financial problems by European governments, central banks and others, including austerity measures and reforms, may not produce the desired results, may result in social unrest and may limit future growth and economic recovery or have other unintended consequences. A European country’s default or debt restructuring would adversely affect the holders of the country’s debt and sellers of credit default swaps linked to the country’s creditworthiness and could negatively impact global markets more generally.
Recent events in Europe may adversely affect the euro’s exchange rate and value and may continue to impact the economies of every European country and their economic partners. Russia’s military invasion of Ukraine in February 2022, the resulting responses by the United States and other countries, and the potential for wider conflict have had, and could continue to have, severe adverse effects on regional and global economies and could further increase volatility and uncertainty in the financial markets. For example, exports in Eastern Europe have been disrupted for certain key commodities, pushing commodity prices to record highs, and energy prices in Europe have increased significantly. In addition, uncertainties regarding the viability of the EU have impacted and may continue to impact regional and global markets. Withdrawals from the EU (or the possibility of such withdrawals or the dissolution of the EU) could cause additional and significant market disruption and introduce new legal and regulatory uncertainties. The full impact of the United Kingdom’s (“UK”) withdrawal from the EU, commonly referred to as “Brexit”, and the nature of the future relationship between the UK and the EU remain unclear. The effects of Brexit on the UK and EU economies could be significant, resulting in negative impacts, such as business and trade disruptions, increased volatility and illiquidity, and potentially lower economic growth of markets in the UK and the EU. Until the full economic effects of Brexit become clearer, there remains a risk that Brexit may negatively impact a Fund’s investments and cause it to lose money. Further, the national politics of European countries have been unpredictable and subject to influence by disruptive political groups and ideologies. European governments may be subject to change and European countries may experience social and political unrest. Unanticipated or sudden political or social developments may result in sudden and significant investment losses.
Geographic Concentration Risk —  To the extent that a Fund invests a significant portion of its assets in securities of companies domiciled, or exercising the predominant part of their economic activity, in one country or geographic region, the Fund assumes the risk that economic, political, social and environmental conditions in that particular country or region will have a significant impact on the Fund’s investment performance and that the Fund’s performance will be more volatile than the performance of more geographically diversified funds. From time to time, a small number of companies and industries may represent a large portion of the market in a particular country or region, and these companies and industries can be sensitive to adverse economic, political, social, currency, or regulatory developments. In addition, certain areas are prone to natural disasters such as earthquakes, volcanoes, fires, droughts or tsunamis and are economically sensitive to environmental events. The risks associated with investing in a narrowly defined geographic area also are generally more pronounced with respect to investments in emerging market countries.
International Fair Value Pricing Risk —  A Fund that invests in foreign securities is subject to the risk that its share price may be exposed to arbitrage attempts by investors seeking to capitalize on differences in the values of foreign securities trading on foreign exchanges that may close before the time the Fund's net asset value is determined. If such arbitrage attempts are successful, the Fund's net asset value might be diluted. A Fund's use of fair value pricing in certain circumstances may help deter such arbitrage activities. The effect of such fair value pricing is that foreign securities may not be priced on the basis of quotations from the primary foreign securities market in which they are traded, but rather may be priced using more subjective methods, known as fair value pricing. As such, it is possible that fair value may differ materially from the value realized on a sale of a foreign security. It is also possible that the use of fair value pricing will limit a Fund's ability to implement its investment strategy (e.g., reduce the volatility of the Fund's share price) or achieve its investment objective.
Regulatory Risk —  Less information may be available about foreign companies. In general, foreign companies are not subject to uniform accounting, auditing and financial reporting standards or to other regulatory practices and requirements as are U.S. companies. Many foreign governments do not supervise and regulate stock exchanges, brokers and the sale of securities to the same extent as does the United States and may not have laws to protect investors that are comparable to U.S. securities laws. In addition, some countries may have legal systems that may make it difficult for a Fund to vote proxies, exercise shareholder rights, and pursue legal remedies with respect to its foreign investments.
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Settlement Risk —  Settlement and clearance procedures in certain foreign markets differ significantly from those in the United States. Foreign settlement and clearance procedures and trade regulations also may involve certain risks (such as delays in payment for or delivery of securities) not typically associated with the settlement of U.S. investments. At times, settlements in certain foreign countries have not kept pace with the number of securities transactions. These problems may make it difficult for a Fund to carry out transactions. If a Fund cannot settle or is delayed in settling a purchase of securities, it may miss attractive investment opportunities and certain of its assets may be uninvested with no return earned thereon for some period. If a Fund cannot settle or is delayed in settling a sale of securities, it may lose money if the value of the security then declines or, if it has contracted to sell the security to another party, the Fund could be liable for any losses incurred.
Trade Suspensions Risk —  Securities of issuers traded on foreign exchanges may be suspended, either by the issuers themselves, by an exchange, or by governmental authorities. The likelihood of such suspensions may be higher for securities of issuers in emerging or less-developed market countries than in countries with more developed markets. Suspensions may last for significant periods of time, during which trading in the securities and in instruments that reference the securities, such as derivative instruments, may be halted. In the event that a Fund holds material positions in such suspended securities or instruments, the Fund’s ability to liquidate its positions may be compromised and the Fund could incur significant losses. Trade suspensions, or other restrictions on trading, and market closures could lead to affected securities being valued at zero.
Hedging Risk —  If a Fund takes a hedging position (such as long or short positions) in a particular currency, security, or bond market, it will lose money if the currency, security, or bond market appreciates in value, or an expected credit event fails to occur. Any efforts at buying or selling currencies could result in significant losses for a Fund. Further, foreign currency transactions that are intended to hedge the currency risk associated with investing in foreign securities and protect against the risk of loss that would result from a decline in the value of the hedged currency may also limit any potential gain that might result should the value of such currency increase.
Inflation-Indexed Bonds Risk —  Inflation-indexed bonds are fixed income securities whose principal value is periodically adjusted according to inflation. The value of inflation-indexed bonds is expected to change in response to changes in real interest rates. Real interest rates represent nominal (stated) interest rates reduced by the expected impact of inflation. In general, inflation-indexed bonds, including Treasury inflation-indexed securities, decline in value when real interest rates rise and rise in value when real interest rates decline. In certain interest rate environments, such as when real interest rates are rising faster than nominal interest rates, inflation-indexed bonds may experience greater losses than other fixed income securities with similar durations. Interest payments on inflation-indexed debt securities can be unpredictable and may vary as the principal and/or interest is adjusted for inflation. In periods of deflation, a Fund may have no income at all from such investments. The principal value of an investment in a Fund is not protected or otherwise guaranteed by the value of the Fund’s investments in inflation-indexed debt securities.
Interest Rate Risk —  Changes in interest rates may affect the yield, liquidity and value of investments in income producing or debt securities. Changes in interest rates also may affect the value of other securities. When interest rates rise, the value of a Fund’s debt securities generally declines. Conversely, when interest rates decline, the value of a Fund’s debt securities generally rises. Typically, the longer the maturity (i.e., the term of a debt security) or duration (i.e., a measure of the sensitivity of a debt security to changes in market interest rates, based on the entire cash flow associated with the security) of a debt security, the greater the effect a change in interest rates could have on the security’s price. For example, if a debt security has a duration of five years and interest rates increase by 1%, the debt security’s price typically would be expected to decline by approximately 5%. Thus, the sensitivity of a Fund’s debt securities to interest rate risk will increase the greater the duration of those securities. Greater sensitivity to changes in interest rates may increase the volatility of a debt security’s value and may lead to losses. Interest rate changes can be sudden and unpredictable, and are influenced by a number of factors, including government policy, monetary policy, inflation rates and/or investor expectations concerning such rates, perceptions of risk, and supply and demand of bonds. Changes in government monetary policy, including changes in federal tax policy or changes in a central bank’s implementation of specific policy goals, may have a substantial and immediate impact on interest rates. However, there can be no guarantee that any particular government or central bank policy will be continued, discontinued or changed, or that any such policy will have the desired effect on interest rates. Short-term and long-term interest rates, and interest rates in different countries, do not necessarily move in the same direction or by the same amount.
Interest rates were unusually low in recent years in the United States and abroad; however, due to concerns regarding high inflation in many sectors of the U.S. and global economies, the U.S. Federal Reserve and many foreign governments and monetary authorities have raised interest rates and implemented other policy initiatives in an effort to control inflation, and they may continue to do so. It is difficult to predict accurately the pace at which central banks or monetary authorities may increase interest rates or the timing, frequency, or magnitude of any such further increases, and the evaluation of macro-economic and other conditions could cause a change in approach in the future. Rising interest rates may present a greater risk than has historically been the case due to the effect of government fiscal and monetary policy initiatives and potential market reaction to those initiatives. As such, fixed-income and related markets may continue to experience heightened levels of interest rate volatility. A significant or rapid rise in interest rates could result in losses, which could be substantial, to a Fund.
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During periods of very low interest rates, which occur from time to time due to market forces or actions of governments and/or their central banks, a Fund may be subject to a greater risk of principal decline from rising interest rates. Certain countries have experienced negative interest rates on certain fixed-income instruments. Very low or negative interest rates may magnify interest rate risk by, among other things, reducing or eliminating interest income and causing declines in the value of investments in income producing or debt securities. 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 a Fund is exposed to such interest rates.
Investment Grade Securities Risk —  Debt securities generally are rated by national bond ratings agencies. A Fund considers securities to be investment grade if they are rated BBB or higher by S&P or Fitch, or Baa or higher by Moody’s, or, if unrated, determined by the investment manager to be of comparable quality. Securities rated in the lower investment grade rating categories (e.g., BBB or Baa) are considered investment grade securities, but may have more risk than higher rated obligations because they are regarded as having only an adequate capacity to pay principal and interest, are considered to lack outstanding investment characteristics, and may possess certain speculative characteristics.
Investment Strategy Risk —  The market may reward certain investment characteristics for a period of time and not others. The returns for a specific investment characteristic may vary significantly relative to other characteristics and may increase or decrease significantly during different phases of a market cycle. A Fund comprised of stocks intended to reduce exposure to uncompensated risk may not necessarily be less sensitive to a change in the broad market price level and may not accurately estimate the risk/return outcome of stocks. Fund investments may exhibit higher volatility than expected or underperform the markets. A Fund’s strategy may result in the Fund underperforming the general securities markets, particularly during periods of strong positive market performance.
Investment Style Risk —  A Fund may use a particular style or set of styles — for example, growth or value investing styles — to select investments. Those styles may be out of favor or may not produce the best results over short or longer time periods.
Growth investing generally focuses on companies that, due to their strong earnings and revenue potential, offer above-average prospects for capital growth, with less emphasis on dividend income. Earnings predictability and confidence in earnings forecasts are an important part of the selection process. As a result, the price of growth stocks may be more sensitive to changes in current or expected earnings than the prices of other stocks. A Fund using this approach generally seeks out companies experiencing some or all of the following: high sales growth, high unit growth, high or improving returns on assets and equity, and a strong balance sheet. Such a Fund also prefers companies with a competitive advantage such as unique management, marketing or research and development. Growth investing also is subject to the risk that the stock price of one or more companies will fall or will fail to appreciate as anticipated by the Fund, regardless of movements in the securities market. Growth stocks tend to be more volatile than value stocks, so in a declining market their prices may decrease more than value stocks in general. Growth stocks also may increase the volatility of the Fund’s share price.
Value investing attempts to identify strong companies selling at a discount from their perceived true worth. A Fund using this approach generally selects stocks at prices that, in its view, are temporarily low relative to the company’s earnings, assets, cash flow and dividends. Value investing is subject to the risk that a stock’s full value may never be fully recognized or realized by the market, or its price may go down. In addition, there is the risk that a stock judged to be undervalued may actually have been appropriately priced or overvalued at the time of investment. Value investing generally emphasizes companies that, considering their assets and earnings history, are attractively priced and may provide dividend income.
Large-Cap Company Risk —  Larger more established companies may be unable to respond quickly to new competitive challenges such as changes in technology and consumer tastes, which may lead to a decline in their market price. Many larger companies also may not be able to attain the high growth rate of successful smaller companies, especially during extended periods of economic expansion. Investing more heavily in one market capitalization category (large, medium or small) carries the risk that due to market conditions that category may be out of favor with investors.
Large Transaction Risk —  A significant percentage of a Fund's shares may be owned or controlled by the Adviser and its affiliates, other funds advised by the Adviser (including funds of funds), or other large shareholders. Accordingly, a Fund is subject to the potential for large-scale inflows and outflows as a result of purchases and redemptions of its shares by such shareholders. These inflows and outflows may be frequent and could negatively affect a Fund's net asset value and performance, and could cause a Fund to purchase or sell securities at a time when it would not normally do so. It would be particularly disadvantageous for a Fund if it experiences outflows and needs to sell securities at a time of volatility in the markets, when values could be falling. These inflows and outflows also could negatively affect a Fund's ability to meet shareholder redemption requests or could limit a Fund's ability to pay redemption proceeds within the time period stated in its prospectus because of unusual market conditions, an unusually high volume of redemption requests, or other reasons. During periods of declining or illiquid markets, the Adviser or its affiliates also may be subject to conflicts of interest in selecting Fund shares for redemption and in deciding whether and when to redeem such shares. In addition, these
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inflows and outflows could increase a Fund's brokerage or other transaction costs, and large-scale outflows could cause a Fund's actual expenses to increase, or could result in a Fund's current expenses being allocated over a smaller asset base, which, depending on any applicable expense caps, could lead to an increase in the Fund's expense ratio.
Leveraging Risk —  When a Fund leverages its holdings, the value of an investment in that Fund will be more volatile and all other risks will tend to be compounded. Investments that create leverage can result in losses to a Fund that exceed the amount originally invested and may accelerate the rate of losses (some of which may be sudden or substantial). For certain investments that create leverage, or have embedded leverage, relatively small market fluctuations can result in large changes in the value of such investments. In addition, the costs that a Fund pays to engage in these practices are additional costs borne by the Fund and could reduce or eliminate any net investment profits. Unless the profits from engaging in these practices exceed the costs of engaging in these practices, the use of leverage will diminish the investment performance of a Fund compared with what it would have been had the Fund not used leverage. There can be no assurance that a Fund’s use of any leverage will be successful.
Liquidity Risk —  From time to time, there may be little or no active trading market for a particular investment in which a Fund may invest or is invested due to a variety of circumstances, including but not limited to deterioration in the financial condition of an issuer or issuers in a particular industry or market segment, periods of economic and market stress, changes in investor perceptions regarding an issuer or industry, periods of market volatility that trigger market circuit breakers that halt trading in securities or close markets entirely, planned market closures, shortened trading hours, extended market holidays, and other reasons. In such a market, the value of such investments and a Fund’s share price may fall dramatically. Illiquid investments may be difficult or impossible to sell or purchase at an advantageous time or price or in sufficient amounts to achieve a Fund’s desired level of exposure. To meet redemption requests during periods of illiquidity, a Fund may be forced to dispose of investments at unfavorable times or prices and/or under unfavorable conditions, which may result in a loss or may be costly to the Fund. Judgment plays a greater role in valuing illiquid investments than investments with more active markets, and there is a greater risk that the investments may not be sold for the price at which a Fund is carrying them. A Fund also may not receive its proceeds from the sale of certain investments for an extended period of time. Certain investments that were liquid when purchased may later become illiquid, sometimes abruptly, particularly in times of overall economic distress or adverse investor perception. In addition, the trading market for certain investments may become illiquid under adverse market or economic conditions independent of any specific adverse changes in the conditions of a particular issuer. An inability to sell a portfolio position can adversely affect a Fund’s value or prevent a Fund from being able to take advantage of other investment opportunities. Market participants attempting to sell the same or a similar investment at the same time as a Fund could decrease the liquidity of such an investment, especially during periods of market stress. During periods of market stress, an investment or even an entire market segment may become illiquid, sometimes abruptly, which can adversely affect a Fund’s ability to limit losses. In addition, a reduction in the ability or willingness of dealers and other institutional investors to make a market in certain securities may result in decreased liquidity in certain markets.
The SEC has instituted various requirements for open-end funds, including the Funds, to establish, and the Funds have established, a program to manage liquidity risks. These requirements are intended to reduce liquidity risk, but they may not work as intended. Analyses, judgments and decisions made in connection with administering the liquidity risk management program may be incorrect or otherwise may not produce the desired results. In addition, changes in market conditions, which may occur rapidly and unpredictably, may adversely affect the administration of the program. Changes related to the requirements may increase a Fund’s expenses, may negatively affect a Fund’s yield and return potential, and may not reduce a Fund’s liquidity risk.
Additional legislative or regulatory actions to address perceived liquidity or other issues in markets generally, or in particular markets such as the fixed income securities markets, may alter or impair a Fund’s ability to pursue its investment objectives or utilize certain investment strategies and techniques.
Loan Risk —  A bank loan represents an interest in a loan or other direct indebtedness that entitles the acquirer of such interest to payments of interest, principal and/or other amounts due under the structure of the loan. Loan interests are subject to liquidity risk, prepayment risk, extension risk, the risk of subordination to other creditors, restrictions on resale, and the lack of a regular trading market and publicly available information. Loan interests may be difficult to value and may have extended trade settlement periods (bank loans may have trade settlement periods that extend beyond seven days). As a result, the proceeds from the sale of a loan may not be available to make additional investments or to meet redemption obligations until potentially a substantial period after the sale of the loan. The extended trade settlement periods could force a Fund to liquidate other securities to meet redemptions and may present a risk that the Fund may incur losses in order to timely honor redemptions.
A Fund’s investments in loans are subject to the risk that the Fund will not receive payment of interest, principal and other amounts due in connection with these investments and will depend primarily on the financial condition of the borrower. Fully secured loans offer a Fund more protection than unsecured loans in the event of nonpayment of scheduled interest or principal, although there is no assurance that the liquidation of a secured loan’s collateral would satisfy the borrower’s obligation or that the collateral could be readily liquidated. In addition, a Fund’s access to collateral may be limited by bankruptcy or other insolvency laws. In the event
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of a default, a Fund may not recover its principal, may experience a substantial delay in recovering its investment and may not receive interest during the delay. Unsecured loans are subject to a greater risk of default than secured loans, especially during periods of deteriorating economic conditions. Unsecured loans also have a greater risk of nonpayment in the event of a default than secured loans since there is no recourse for the lender to collateral. Loans in which a Fund may invest may be made to finance highly leveraged corporate transactions. The highly leveraged capital structure of the borrowers in such transactions may make such loans especially vulnerable to adverse changes in economic or market conditions. In addition, loan interests may be unrated, and a Fund’s Sub-Adviser may be required to rely exclusively on its own analysis of the borrower in determining whether to acquire, or to continue to hold, a loan. Loans may not be considered “securities,” and purchasers, such as a Fund, therefore may not have the benefit of the anti-fraud protections of the federal securities laws.
Loan agreements, which set forth the terms of a loan and the obligations of the borrower and lender, contain certain covenants that mandate or prohibit certain borrower actions, including financial covenants (or “maintenance covenants”) that dictate certain minimum and maximum financial performance levels. Certain types of loans contain fewer maintenance covenants than traditional loans (or no maintenance covenants at all) and may not include terms that permit the lender to monitor the financial performance of the borrower and declare an event of default if certain criteria are breached. This may hinder a Fund’s ability to reprice credit risk associated with the borrower and reduce a Fund’s ability to restructure a problematic loan and mitigate potential loss. As a result, a Fund’s exposure to losses on these types of loans may be increased, especially during a downturn in the credit cycle.
A Fund may acquire a loan interest by obtaining an assignment of all or a portion of the interests in a particular loan that are held by an original lender or a prior assignee. As an assignee, a Fund normally will succeed to all rights and obligations of its assignor with respect to the portion of the loan that is being assigned. However, the rights and obligations acquired by the purchaser of a loan assignment may differ from, and be more limited than, those held by the original lenders or the assignor. A Fund may also purchase a participation in a loan interest that is held by another party. When a Fund’s loan interest is a participation, the Fund may have less control over the exercise of remedies than the party selling the participation interest, and the Fund normally would not have any direct rights against the borrower. It is possible that a Fund could be held liable, or may be called upon to fulfill other obligations, with respect to loans in which it receives an assignment in whole or in part, or in which it owns a participation. The potential for such liability is greater for an assignee than for a participant.
Market Risk —  A Fund is subject to the risk that the securities markets will move down, sometimes rapidly and unpredictably, based on overall economic conditions and other factors, which may negatively affect Fund performance. Securities markets also may experience long periods of decline in value. The value of a security may decline due to factors that are specifically related to a particular company, as well as general market conditions that are not specifically related to a particular company, such as real or perceived adverse economic or political conditions, changes in the general outlook for corporate earnings, inflation rates and/or investor expectations concerning such rates, changes in interest rates or currency rates, recessions, global demand for particular products or resources, lack of liquidity in the markets, or adverse investor sentiment generally. In some cases, for example, the stock prices of individual companies have been negatively impacted even though there may be little or no apparent degradation in the financial condition or prospects of the issuers. The value of a security may also decline due to factors that affect a particular industry or industries, such as tariffs, labor shortages or increased production costs and competitive conditions within an industry.
Equity securities generally have greater price volatility than fixed income securities, although under certain market conditions fixed income securities may have comparable or greater price volatility. During a general downturn in the securities markets, multiple asset classes may decline in value simultaneously. Adverse market conditions may be prolonged and may not have the same impact on all types of securities. Changes in value may be temporary or may last for extended periods. Changes in the financial condition of (or other event affecting) a single issuer can impact a market as a whole. A Fund may experience a substantial or complete loss on any individual security. Even when securities markets perform well, there is no assurance that the investments held by a Fund will increase in value along with the broader market. Market factors, such as the demand for particular portfolio securities, may cause the price of certain portfolio securities to fall while the prices of other securities rise or remain unchanged. Historical patterns of correlation among asset classes may break down in unanticipated ways during times of high volatility, disrupting investment programs and potentially causing losses. Additionally, market speculation focused on profiting from fluctuations in the value of one or more securities or asset classes over a short period of time may result in large-scale and sudden purchases and sales of those securities or asset classes, which can significantly affect the value of those securities and asset classes as well as the market more broadly in unexpected ways, and cause significant share price volatility and losses for a Fund.
Global economies and financial markets are highly interconnected, which increases the possibility that conditions in one country or region or events affecting a single or small number of issuers might adversely impact issuers in a different country or region. World markets, or those in a particular region, may all react in similar fashion to important economic, political or other developments. Events such as environmental, natural or man-made disasters or other catastrophes, public health crises (such as epidemics and pandemics), social unrest, widespread and prolonged power outages, and cybersecurity incidents, and governments’ reactions (or failure to react) to such events, could cause uncertainty in the markets and may adversely affect the performance of the global economy.
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Geopolitical and other events, including terrorism, tensions, war or other open conflicts between nations, or political or economic dysfunction within some nations that are global economic powers or major producers of oil, may lead to overall instability in world economies and markets generally and have led, and may in the future lead, to increased market volatility and may have adverse long-term effects. As a result, the value and liquidity of a Fund’s investments may be negatively affected by developments in other countries and regions, whether or not the Fund invests in securities of issuers located in or with significant exposure to the countries or regions directly affected. Events and evolving conditions in certain economies or markets may alter the risks associated with investments tied to countries or regions that historically were perceived as comparatively stable and make such investments riskier and more volatile. Moreover, systemic market dislocations of the kind that occurred during the global financial crisis that began in 2008, if repeated, would be highly disruptive to economies and markets, adversely affecting individual companies and industries, securities markets, interest rates, credit ratings, inflation, investor sentiment, and other factors affecting the value of a Fund’s investments.
Impacts from climate change may include significant risks to global financial assets and economic growth. Certain issuers, industries and regions may be adversely affected by the impacts of climate change, including on the demand for and the development of goods and services and related production costs, and the impacts of legislation, regulation and international accords related to climate change, as well as any indirect consequences of regulation or business trends driven by climate change.
In addition, the U.S. Federal Reserve (“Fed”) has invested or otherwise made available substantial amounts of money to keep credit flowing through short-term money markets and has signaled that it will continue to adjust its operations as appropriate to support short-term money markets. Amid these efforts, concerns about the markets’ dependence on the Fed’s provision of liquidity have grown.
Policy changes by the U.S. government and/or the Fed and political events within the United States may affect investor and consumer confidence and may increase uncertainty in or impair the operation of the U.S. or other securities markets, perhaps suddenly and to a significant degree.
In addition, markets and market-participants are increasingly reliant on both publicly available and proprietary information data systems. Inaccurate data, 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 a Fund being, among other things, unable to buy or sell certain securities or financial instruments or accurately price its investments.
Master Limited Partnership Risk —  Investing in MLPs involves certain risks related to investing in the underlying assets of the MLPs and risks associated with pooled investment vehicles. MLPs holding credit-related investments are subject to interest rate risk and the risk of default on payment obligations by debt issuers. MLPs that concentrate in a particular industry or a particular geographic region are subject to risks associated with such industry or region. Investments held by MLPs may be relatively illiquid, limiting the MLPs’ ability to vary their portfolios promptly in response to changes in economic or other conditions. MLPs may have limited financial resources, their securities may trade infrequently and in limited volume, and they may be subject to more abrupt or erratic price movements than securities of larger or more broadly based companies, and may be difficult to value. MLPs involve certain other risks, including risks related to limited control and voting rights on matters affecting MLPs, risks related to potential conflicts of interest between an MLP and the MLP's general partner, cash flow risks, and risks related to the general partner's right to require unit-holders to sell their common units at an undesirable time or price. Distributions from an MLP may consist in part of a return of the amount originally invested, which would not be taxable to the extent the distributions do not exceed the investor’s adjusted basis in its MLP interest. These reductions in a Fund’s adjusted tax basis in the MLP securities will increase the amount of gain (or decrease the amount of loss) recognized by the Fund on a subsequent sale of the securities.
Much of the benefit a Fund derives from its investment in equity securities of MLPs is a result of MLPs generally being treated as partnerships for U.S. federal income tax purposes. A change in current tax law, or a change in the business of a given MLP, could result in an MLP being treated as a corporation for U.S. federal income tax purposes and subject to corporate level tax on its income, and could reduce the amount of cash available for distribution by the MLP to its unit holders, such as a Fund. If an MLP were classified as a corporation for federal income tax purposes, the MLP may incur significant federal and state tax liability, likely causing a reduction in the value of the Fund’s shares.
The risks of investing in an MLP generally include those inherent in investing in a partnership as opposed to a corporation. For example, state law governing partnerships is often less restrictive than state law governing corporations. Accordingly, there may be fewer protections afforded investors in an MLP than investors in a corporation. Although unit holders of an MLP are generally limited in their liability, similar to a corporation’s shareholders, creditors typically have the right to seek the return of distributions made to unit holders if the liability in question arose before the distributions were paid. This liability may stay attached to a unit holder even after it sells its units.
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Mid-Cap, Small-Cap and Micro-Cap Company Risk —  A Fund’s investments in mid-, small- and micro-cap companies may involve greater risks than investments in larger, more established issuers because they generally are more vulnerable than larger companies to adverse business or economic developments, which can negatively affect their value. Such companies generally have narrower product lines, more limited financial and management resources and more limited markets for their securities as compared with larger companies. Their securities may be less well-known and trade less frequently and in limited volume compared with the securities of larger, more established companies. As a result, the value of such securities may be more volatile than the value of securities of larger companies, and the Fund may experience difficulty in purchasing or selling such securities at the desired time and price or in the desired amount. Mid-, small- and micro-cap companies also are typically subject to greater changes in earnings and business prospects than larger companies. Consequently, the prices of mid-, small- and micro-cap company securities tend to rise and fall in value more frequently than the prices of securities of larger companies. Although investing in mid-, small- and micro-cap companies offers potential for above-average returns, the companies may not succeed and the value of their securities could decline significantly. In general, these risks are greater for small- and micro-cap companies than for mid-cap companies. Investing more heavily in one market capitalization category (large, medium or small) carries the risk that due to market conditions that category may be out of favor with investors.
Momentum Risk —  Momentum entails investing more in securities that have recently had higher total returns and investing less in securities that have recently had lower total returns. These securities may be more volatile than a broad cross-section of securities, and momentum may be an indicator that a security’s price is peaking. Momentum can turn quickly, and utilizing momentum as a factor in the investment analysis process can cause significant variation from other types of investment strategies. A Fund may experience significant losses if a security’s momentum stops, turns or otherwise behaves differently than predicted.
Mortgage-Related and Other Asset-Backed Securities Risk —  Investments in mortgage-related and other asset-backed securities are subject to credit risk, liquidity risk, the risk of default, interest rate risk, and prepayment and extension risk, sometimes to a greater extent than various other types of fixed income investments. Declines in the credit quality of and defaults by the issuers of mortgage-related and other asset-backed securities may decrease the value of such securities, which could result in losses to a Fund, and may reduce the liquidity of such securities and make such securities more difficult to purchase or sell at an advantageous time and price. In addition, borrowers may default on the obligations that underlie mortgage-related and other asset-backed securities. The risk of defaults by borrowers generally is greater during times of rising interest rates and/or unemployment rates. The impairment (or loss) of the value of collateral or other assets underlying mortgage-related and other asset-backed securities will result in a reduction in the value of the securities. Certain collateral may be difficult to locate in the event of default, or may be lost, and recoveries of depreciated or damaged collateral may not fully cover payments due on such collateral. Asset-backed securities may not have the benefit of a security interest in collateral comparable to that of mortgage assets, resulting in additional credit risk. In addition, even when there is no default or threat of default, instability in the markets for mortgage-related and other asset-backed securities may reduce (at times, significantly) the liquidity of such securities. As a result, the value of such securities may decrease and a Fund may incur greater losses on the sale of such securities than under more stable market conditions. Furthermore, instability and illiquidity in the market for lower-rated mortgage-related and other asset-backed securities may affect the overall market for such securities, thereby impacting the liquidity and value of higher-rated securities.
If a Fund purchases mortgage-related or other asset-backed securities that are “subordinated” to other interests in the same pool, the Fund, as a holder of those securities, may receive payments only after the pool’s obligations to other investors have been satisfied. For example, an unexpectedly high rate of defaults on the mortgages held by a mortgage pool may limit substantially the pool’s ability to make payments of principal or interest to the Fund as a holder of such subordinated securities, reducing the values of those securities or in some cases rendering them worthless. In addition, certain mortgage-related and other asset-backed securities may include securities backed by pools of loans made to “subprime” borrowers or borrowers with blemished credit histories. The underwriting standards for subprime loans may be lower and more flexible than the standards generally used by lenders for borrowers with non-blemished credit histories with regard to the borrowers’ credit standing and repayment ability. Borrowers who qualify generally have impaired credit histories, which may include a record of major derogatory credit items such as outstanding judgments or prior bankruptcies. In addition, they may not have the documentation required to qualify for a standard loan. As a result, the loans in the pool are likely to experience rates of delinquency, foreclosure, and bankruptcy that are higher, and that may be substantially higher, than those experienced by loans underwritten in a more traditional manner. In addition, changes in the values of the assets underlying the loans (if any), as well as changes in interest rates, may have a greater effect on the delinquency, foreclosure, bankruptcy, and loss experience of the loans in the pool than on loans originated in a more traditional manner. The risk of defaults by borrowers is generally higher in the case of asset or mortgage pools that include subprime assets or mortgages, and the liquidity and value of subprime mortgages and non-investment grade mortgage-backed securities that are not guaranteed by Ginnie Mae, Fannie Mae, and Freddie Mac could change dramatically over time.
Payment of interest and repayment of principal, the schedule for which varies based on the terms of the loan, may be largely dependent upon the cash flows generated by the assets backing the securities and, in certain cases, supported by various forms of insurance
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or guarantees, including letters of credit, surety bonds, or other credit or liquidity enhancements. There can be no assurance that insurers or guarantors can meet their obligations under the insurance policies or guarantee arrangements. Furthermore, mortgage-related and other asset-backed securities typically provide the issuer with the right to prepay the security prior to maturity. During periods of rising interest rates, the rate of prepayments tends to decrease because borrowers are less likely to prepay debt (such as mortgage debt or automobile loans). Slower than expected payments can extend the average lives of mortgage-related and other asset-backed securities, and this may lock in a below market interest rate and increase the security’s duration and interest rate sensitivity, which may increase the volatility of the security’s value and may lead to losses. During periods of falling interest rates, the rate of prepayments tends to increase because borrowers are more likely to pay off debt and refinance at the lower interest rates then available. Unscheduled prepayments shorten the average lives of mortgage-related and other asset-backed securities and may result in the Fund’s having to reinvest the proceeds of the prepayments at lower interest rates. Unscheduled prepayments also would limit the potential for capital appreciation on these securities and may make them less effective than other fixed income securities as a means of “locking in” long-term interest rates, thereby reducing the Fund’s income. Prepayment rates are difficult to predict, and the potential impact of prepayments on the value of a mortgage-related or other asset-backed security depends on the terms of the instrument and can result in significant volatility.
Privately issued mortgage-related and other asset-backed securities may be subject to heightened liquidity risk. During periods of market stress or high redemptions, a Fund may be forced to sell these securities at significantly reduced prices, resulting in losses. Liquid privately issued mortgaged-related and other asset-backed securities can become illiquid during periods of market stress. Privately issued mortgage-related securities are not subject to the same underwriting standards for the underlying mortgages that are applicable to those mortgage-related securities that have U.S. government or government-sponsored enterprise (“GSE”) guarantees. As a result, the mortgage loans underlying privately issued mortgage-related securities may, and frequently do, have less favorable collateral, credit risk, liquidity risk, or other underwriting characteristics than U.S. government or GSE mortgage-related securities.
Mortgage-backed securities issued in the form of collateralized mortgage obligations (“CMOs”) are collateralized by mortgage loans or mortgage pass-through securities. In periods of supply and demand imbalances in the market for CMOs or in periods of sharp interest rate movements, the prices of CMOs may fluctuate to a greater extent than would be expected from interest rate movements alone. CMOs and other mortgage-backed securities may be structured similarly to collateralized debt obligations and may be subject to similar risks.
New Fund Risk —  The 1290 Essex Small Cap Growth Fund is newly or recently established and has limited operating history. The Fund’s performance may not represent how the Fund is expected to or may perform in the long-term and the Fund may not be successful in implementing its investment strategy. Fund performance may be lower or higher during this “ramp-up” period, and may also be more volatile, than would be the case after the Fund is fully invested. In addition, investment positions may have a disproportionate impact (negative or positive) on performance in new funds. There can be no assurance that the Fund will grow to or maintain an economically viable size, which could result in the Fund being liquidated at any time without shareholder approval and at a time that may not be favorable for all shareholders.
Newly Repositioned Fund Risk —  The 1290 Loomis Sayles Multi-Asset Income Fund is newly repositioned and may not be successful in implementing its investment strategy, and there can be no assurance that the Fund will grow to or maintain an economically viable size, which could result in the Fund being liquidated at any time without shareholder approval and at a time that may not be favorable for all shareholders.
Non-Investment Grade Securities Risk —  Bonds rated below BBB by S&P or Fitch, or below Baa by Moody’s or, if unrated, determined by the investment manager to be of comparable quality, are speculative in nature, involve greater risk of default by the issuing entity and may be subject to greater market fluctuations than higher rated fixed income securities. Non-investment grade bonds, sometimes referred to as “junk bonds,” are usually issued by companies without long track records of sales and earnings, or by those companies with questionable credit strength. The creditworthiness of issuers of non-investment grade debt securities may be more complex to analyze than that of issuers of investment grade debt securities, and the reliance on credit ratings may present additional risks. The retail secondary market for these “junk bonds” may be less liquid than that of higher rated securities and adverse conditions could make it difficult at times to sell certain securities or could result in lower prices than those used in calculating a Fund’s net asset value. A Fund investing in “junk bonds” may also be subject to greater credit risk because it may invest in debt securities issued in connection with corporate restructuring by highly leveraged issuers or in debt securities not current in the payment of interest or principal or in default. If the issuer of a security is in default with respect to interest or principal payments, a Fund may lose its entire investment. The credit rating of a below investment grade security does not necessarily address its market value risk and may not reflect its actual credit risk. Ratings and market value may change from time to time, positively or negatively, to reflect new developments regarding the issuer. Because of the risks involved in investing in below investment grade securities, an investment in a Fund that invests substantially in such securities should be considered speculative.
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Portfolio Management Risk —  A Fund is subject to the risk that strategies used by an investment manager and its securities selections fail to produce the intended results. An investment manager’s judgments or decisions about the quality, relative yield or value of, or market trends affecting, a particular security or issuer, industry, sector, region or market segment, or about the economy or interest rates, may be incorrect or otherwise may not produce the intended results, which may result in losses to a Fund. In addition, many processes used in Fund management, including security selection, rely, in whole or in part, on the use of various technologies, some of which are created or maintained by an investment manager or its affiliates and some of which are created or maintained by third parties. A Fund may suffer losses if there are imperfections, errors or limitations in the quantitative, analytic or other tools, resources, information and data used, or the analyses employed or relied on, by an investment manager, or if such tools, resources, information or data are used incorrectly, fail to produce the desired results, or otherwise do not work as intended. Imperfections, errors or limitations may go undetected for long periods of time or may never be detected, which could adversely affect decision making for a Fund, as well as a Fund’s operations or performance, and may result in, among other things, the execution of unanticipated trades, the failure to execute anticipated trades, the failure to properly gather and organize available data and/or the failure to take certain hedging or risk-reducing actions. There can be no assurance that the use of these technologies will result in effective investment decisions for a Fund.
Portfolio Turnover Risk —  High portfolio turnover (generally, turnover in excess of 100% in any given fiscal year) may result in increased transaction costs to a Fund, which may result in higher fund expenses and lower total return and may generate a greater amount of capital gain distributions to Fund shareholders than if the Fund had low portfolio turnover. A Fund that adopts new investment objectives or policies or portfolio management strategies, has a new or an additional Sub-Adviser, and/or undergoes a reorganization with another Fund may experience substantially increased portfolio turnover due to the differences between the Fund's previous and current investment objectives and policies and portfolio management strategies.
Preferred Stock Risk —  Preferred stock is subject to many of the risks associated with debt securities, including interest rate risk. Unlike interest payments on debt securities, dividends on preferred stock are generally payable at the discretion of the issuer’s board of directors. Preferred shareholders may have certain rights if dividends are not paid but generally have no legal recourse against the issuer. Shareholders may suffer a loss of value if dividends are not paid. In certain situations an issuer may call or redeem its preferred stock or convert it to common stock. The market prices of preferred stocks are generally more sensitive to actual or perceived changes in the issuer’s financial condition or prospects than are the prices of debt securities. Preferred stock also may be less liquid than common stock. To the extent that a Fund invests a substantial portion of its assets in convertible preferred stocks, declining common stock values may also cause the value of the Fund’s investments to decline.
Prepayment Risk and Extension Risk —  Prepayment risk is the risk that the issuer of a security held by a Fund may pay off principal more quickly than originally anticipated, and the Fund may have to reinvest the proceeds in an investment offering a lower yield, may not benefit from any increase in value that might otherwise result from declining interest rates and may lose any premium it paid to acquire the security. Falling interest rates generally result in quicker payoffs as borrowers are motivated to pay off debt and refinance at new lower rates. Extension risk is the risk that the issuer of a security held by a Fund may pay off principal more slowly than originally anticipated. Rising interest rates generally result in slower payoffs, which effectively increase the duration of certain debt securities and heighten interest rate risk. Additionally, a Fund may be prevented from reinvesting the proceeds it would have received at a given time in an investment offering a higher yield.
Privately Placed and Other Restricted Securities Risk —  Restricted securities, which include privately placed securities, are securities that cannot be offered for public resale unless registered under the applicable securities laws or that have a contractual restriction that prohibits or limits their resale. Before they are registered, such securities may be sold only in a privately negotiated transaction or pursuant to an exemption from registration. Difficulty in selling securities may result in a loss or be costly to a Fund. Rule 144A is designed to facilitate efficient trading among institutional investors by permitting the sale of certain unregistered securities to qualified institutional buyers. To the extent restricted securities held by a Fund qualify under Rule 144A and an institutional market develops for those securities, the Fund likely will be able to dispose of the securities without registering them. To the extent that institutional buyers become, for a time, uninterested in purchasing these securities, investing in Rule 144A securities could increase the level of a Fund’s illiquidity. The Adviser or Sub-Adviser may determine that certain securities qualified for trading under Rule 144A are liquid. Where registration of a security is required, a Fund may be obligated to pay all or part of the registration expenses, and a considerable period may elapse between the time the Fund desires to sell (and therefore decides to seek registration of) the security, and the time the Fund may be permitted to sell the security under an effective registration statement. If, during such a period, adverse market conditions were to develop, a Fund might obtain a less favorable price than prevailed when it desired to sell. The risk that securities may not be sold for the price at which a Fund is carrying them is greater with respect to restricted securities than it is with respect to registered securities. The illiquidity of the market, as well as the lack of publicly available information regarding these securities, also may make it difficult to determine a fair value for certain securities for purposes of computing a Fund’s net asset value.
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Quantitative Investing Risk —  A portfolio of securities selected using quantitative analysis may underperform the market as a whole or a portfolio of securities selected using a different investment approach, such as fundamental analysis. The factors used in quantitative analysis and the emphasis placed on those factors may not be predictive of a security’s value. In addition, factors that affect a security’s value can change over time and these changes may not be reflected in the quantitative model. The performance of a quantitative model depends upon the quality of its design and effective execution under actual market conditions. Even a well-designed quantitative model cannot be expected to perform well in all market conditions or across all time intervals. Data for some companies, particularly for non-U.S. companies, may be less available and/or less current than data for other companies. There may also be errors in the computer code for the quantitative model or in the model itself, or issues relating to the computer systems used to screen securities. A Fund’s securities selection can be adversely affected if it relies on erroneous or outdated data or flawed models or computer systems. As a result, a Fund may have a lower return than if the Fund were managed using a fundamental analysis or an index-based strategy that did not incorporate quantitative analysis. There can be no assurance that a quantitative model used in managing a Fund will perform as anticipated or enable the Fund to achieve its investment objective.
Real Estate Investing Risk —  Real estate-related investments may decline in value as a result of factors affecting the overall real estate industry. Real estate is a cyclical business, highly sensitive to supply and demand, general and local economic developments and characterized by intense competition and periodic overbuilding. Real estate income and values also may be greatly affected by demographic trends, such as population shifts or changing tastes and values. For example, the COVID-19 pandemic has impacted certain real estate sectors by accelerating the trend towards online shopping and remote-working environments. Losses may occur from casualty or condemnation, and government actions, such as tax law changes, zoning law changes, regulatory limitations on rents, or environmental regulations, also may have a major impact on real estate. The availability of mortgages and changes in interest rates may also affect real estate values. Changing interest rates and credit quality requirements also will affect the cash flow of real estate companies and their ability to meet capital needs. In addition, global climate change may have an adverse effect on property and security values and may exacerbate the risks of natural disasters.
Real estate investment trusts (“REITs”) generally invest directly in real estate (equity REITs), in mortgages secured by interests in real estate (mortgage REITs) or in some combination of the two (hybrid REITs). Investing in REITs exposes investors to the risks of owning real estate directly, as well as to risks that relate specifically to the way in which REITs are organized and operated. Equity REITs may be affected by changes in the value of the underlying property owned by the REIT, while mortgage REITs may be affected by the quality of any credit extended. Equity and mortgage REITs are also subject to heavy cash flow dependency, defaults by borrowers, and self-liquidations. The risk of defaults is generally higher in the case of mortgage pools that include subprime mortgages involving borrowers with blemished credit histories. The liquidity and value of subprime mortgages and non-investment grade mortgage-backed securities that are not guaranteed by Ginnie Mae, Fannie Mae, and Freddie Mac could change dramatically over time.
Operating REITs requires specialized management skills, and a Fund that invests in REITs indirectly bears REIT management and administration expenses along with the direct expenses of the Fund. Individual REITs may own a limited number of properties and may concentrate in a particular region or property type. Domestic REITs also must satisfy specific Internal Revenue Code requirements in order to qualify for the tax-free pass-through of net investment income and net realized gains distributed to shareholders. Failure to meet these requirements may have adverse consequences on an investing Fund. Similar treatment may also apply to REIT-like entities under the laws of the countries in which they were formed. In addition, even the larger REITs in the industry tend to be small- to medium-sized companies in relation to the equity markets as a whole. Moreover, shares of REITs may trade less frequently and, therefore, are subject to more erratic price movements than securities of larger issuers.
Redemption Risk —  A Fund may experience periods of heavy redemptions that could cause the Fund to sell assets at inopportune times, which could have a negative impact on the Fund's overall liquidity, or at a loss or depressed value. Redemption risk is heightened during periods of declining or illiquid markets. Redemption risk also is greater to the extent that one or more investors control a large percentage of investments in a Fund, have short investment horizons, or have unpredictable cash flow needs. Heavy redemptions could hurt a Fund's performance and increase transaction costs.
Market developments and other factors, including a general rise in interest rates, have 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. The market-making capacity of dealers has been reduced in recent years, in part as a result of structural changes, such as fewer proprietary trading desks at broker-dealers and increased regulatory capital requirements. In addition, significant securities market disruptions related to the COVID-19 pandemic have led to dislocation in the market for a variety of fixed income securities (including, without limitation, commercial paper, corporate debt securities, certificates of deposit, asset-backed debt securities and municipal obligations), which has decreased liquidity and sharply reduced returns in certain cases. Increased redemptions from mutual funds that hold large amounts of fixed income securities, 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.
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Risks Related to Investments in Underlying ETFs —  A Fund that invests in Underlying ETFs (i.e., operates under a “fund of funds” arrangement) will indirectly bear fees and expenses paid by those Underlying ETFs, in addition to the Fund’s direct fees and expenses. The cost of investing in the Fund, therefore, may be higher than the cost of investing in a mutual fund that invests directly in individual stocks and bonds. The Fund’s performance depends upon a favorable allocation by the Adviser among the Underlying ETFs, as well as the ability of the Underlying ETFs to generate favorable performance. The Underlying ETFs’ investment programs may not be complementary, which could adversely affect a Fund’s performance. In addition, the Fund’s net asset value is subject to fluctuations in the market values of the Underlying ETFs in which it invests. The Fund is also subject to the risks associated with the securities or other investments in which the Underlying ETFs invest, and the ability of the Fund to meet its investment objective will directly depend on the ability of the Underlying ETFs to meet their respective investment objectives. In addition, because each Underlying ETF is managed independently, the same security may be held by different Underlying ETFs, or may be acquired for one portfolio at a time when another portfolio deems it appropriate to dispose of the security, resulting in higher indirect expenses without accomplishing any net investment result. The extent to which the investment performance and risks associated with the Fund correlate to those of a particular Underlying ETF will depend upon the extent to which the Fund’s assets are allocated from time to time for investment in the Underlying ETF, which will vary. A Fund does not control the investments of the Underlying ETFs, which may have different investment objectives and may engage in investment strategies that the Fund would not engage in directly. The Underlying ETFs may change their investment objectives or policies without the approval of a Fund. If that were to occur, the Fund might be forced to sell its investment in an Underlying ETF at a time and price that is unfavorable to the Fund.
In addition, many ETFs invest in securities included in, or representative of, underlying indexes regardless of investment merit or market trends and, therefore, these ETFs do not change their investment strategies to respond to changes in the economy, which means that such an Underlying ETF may be particularly susceptible to a general decline in the market segment relating to the relevant index. Imperfect correlation between an Underlying ETF’s securities and those in the index it seeks to track, rounding of prices, changes to the indices and regulatory policies may cause an Underlying ETF’s performance not to match the performance of its index. An Underlying ETF’s use of a representative sampling approach will result in its holding a smaller number of securities than are in the index it seeks to track. As a result, an adverse development respecting an issuer of securities held by the Underlying ETF could result in a greater decline in net asset value than would be the case if the Underlying ETF held all of the securities in the index. To the extent the assets in the Underlying ETF are smaller, these risks will be greater. No ETF fully replicates its index, and an Underlying ETF may hold securities not included in its index. Therefore, there is a risk that the investment strategy of the Underlying ETF manager may not produce the intended results.
Moreover, there is the risk that an Underlying ETF may value certain securities at a price higher than the price at which it can sell them. Secondary market trading in shares of Underlying ETFs may be halted by a national securities exchange because of market conditions or for other reasons. In addition, trading in these shares is subject to trading halts caused by extraordinary market volatility pursuant to “circuit breaker” rules. There can be no assurance that the requirements necessary to maintain the listing of the shares will continue to be met or will remain unchanged. In addition, although ETFs are listed for trading on national securities exchanges, certain foreign exchanges and in over-the-counter markets, there can be no assurance that an active trading market for such shares will develop or be maintained, in which case the liquidity and value of a Fund’s investment in the Underlying ETFs could be substantially and adversely affected. In addition, because Underlying ETFs are traded on these exchanges and in these markets, the purchase and sale of their shares involve transaction fees and commissions. The market price of an Underlying ETF may be different from the net asset value of such ETF (i.e., an Underlying ETF may trade at a discount or premium to its net asset value). The performance of a Fund that invests in such an ETF could be adversely impacted.
In addition, new regulations relating to “fund of funds” arrangements may impact a Fund’s or an Underlying ETF’s ability to achieve its investment objective, impact a Fund’s or an Underlying ETF’s investment policies or strategies, adversely affect a Fund’s or an Underlying ETF’s efficiency in implementing its investment strategies, increase operating costs, and/or adversely affect a Fund’s or an Underlying ETF’s performance.
Sector Risk —  To the extent a Fund invests more heavily in one sector, industry, or sub-sector of the market, its performance will be especially sensitive to developments that significantly affect that sector, industry, or sub-sector. An individual sector, industry, or sub-sector of the market may be more volatile, and may perform differently, than the broader market. The industries that constitute a sector may all react in the same way to economic, political or regulatory events. A Fund’s performance could also be affected if the sector, industry, or sub-sector does not perform as expected. Alternatively, the lack of exposure to one or more sectors or industries may adversely affect performance.
Short Position Risk —  A Fund may engage in short sales and may enter into derivative contracts that have a similar economic effect (e.g., taking a short position in a futures contract). A Fund will incur a loss as a result of a short position if the price of the asset sold short increases between the date of the short position sale and the date on which an offsetting position is purchased. Short positions may be considered speculative transactions and involve special risks that could cause or increase losses or reduce gains. Short sales involve greater reliance on an investment adviser’s ability to accurately anticipate the future value of a security or instrument,
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higher transaction costs, and imperfect correlation between the actual and desired level of exposure. Short sales, at least theoretically, present a risk of unlimited loss on an individual security basis, particularly in cases where a Fund is unable, for whatever reason, to close out its short position, because the Fund may be required to buy the security sold short at a time when the security has appreciated in value, and there is potentially no limit to the amount of such appreciation. Volatility in the market for equity securities, which has been dramatically increased recently for certain stocks, can meaningfully increase the risk of loss associated with short sales. In addition, by investing the proceeds received from selling securities short, a Fund could be deemed to be employing a form of leverage, which creates special risks. A Fund’s long positions could decline in value at the same time that the value of the short positions increase, thereby increasing the Fund’s overall potential for loss more than it would be without the use of leverage. Market or other factors may prevent a Fund from closing out a short position at the most desirable time or at a favorable price. In addition, a lender of securities may request, or market conditions may dictate, that securities sold short be returned to the lender on short notice. If this happens, the Fund may have to buy the securities sold short at an unfavorable price, which will potentially reduce or eliminate any gain or cause a loss to the Fund. When a Fund is selling a security short, it must maintain a segregated account of cash or high-grade securities equal to the margin requirement. As a result, a Fund may maintain high levels of cash or other liquid assets (such as U.S. Treasury bills, money market accounts, repurchase agreements, certificates of deposit, high quality commercial paper and long equity positions) or may utilize the collateral obtained from securities lending for this cash. The need to maintain cash or other liquid assets in segregated accounts could limit a Fund’s ability to pursue other opportunities as they arise.
Special Situations Risk —  A Fund may seek to benefit from “special situations,” such as acquisitions, mergers, consolidations, bankruptcies, liquidations, reorganizations, restructurings, tender or exchange offers or other unusual events expected to affect a particular issuer. In general, securities of companies which are the subject of a tender or exchange offer or an acquisition, merger, consolidation, bankruptcy, liquidation, reorganization or restructuring proposal sell at a premium to their historic market price immediately prior to the announcement of the transaction. However, it is possible that the value of securities of a company involved in such a transaction will not rise and in fact may fall, in which case a Fund would lose money. It is also possible that a Sub-Adviser’s assessment that a particular company is likely to be acquired or acquired during a specific time frame may be incorrect, in which case a Fund may not realize any premium on its investment and could lose money if the value of the securities declines during the Fund’s holding period. A Fund’s return also could be adversely impacted to the extent that a Sub-Adviser’s strategies fail to identify companies for investment by the Fund that become the subject of a merger or similar transaction that results in an increase in the value of the securities of those companies. Moreover, publicly announced mergers and similar types of transactions may be renegotiated or terminated, in which case a Fund may lose money. In addition, if a transaction takes a longer time to close than a Sub-Adviser originally anticipated, a Fund may realize a lower-than-expected rate of return. In some circumstances, the securities purchased may be illiquid making it difficult for the Fund to dispose of them at an advantageous price.
U.S. Government Securities Risk —  Although a Fund may hold securities that carry U.S. government guarantees, these guarantees do not extend to shares of the Fund itself and do not guarantee the market prices of the securities. Securities issued by the U.S. Treasury or other agencies and instrumentalities of the U.S. government may decline in value as a result of, among other things, changes in interest rates, political events in the United States, international developments, including strained relations with foreign countries, and changes in the credit rating of, or investor perceptions regarding the creditworthiness of, the U.S. government. Furthermore, not all securities issued by the U.S. government and its agencies and instrumentalities are backed by the full faith and credit of the U.S. Treasury. Some are backed by the issuer’s right to borrow from the U.S. Treasury, while others are backed only by the credit of the issuing agency or instrumentality. Securities not backed by the full faith and credit of the U.S. Treasury involve greater credit risk than investments in other types of U.S. government securities. The maximum potential liability of the issuers of some U.S. government securities may greatly exceed their current resources, including their legal right to support from the U.S. Treasury. It is possible that these issuers will not have the funds to meet their payment obligations in the future. Increases or decreases in the demand for U.S. government securities may occur at any time and may result in increased volatility in the values of those securities.
Variable and Floating Rate Securities Risk —  The market prices of securities with variable and floating interest rates are generally less sensitive to interest rate changes than are the market prices of securities with fixed interest rates. Variable and floating rate securities may decline in value if market interest rates or interest rates paid by such securities do not move as expected. Conversely, variable and floating rate securities will not generally rise in value if market interest rates decline. Certain types of floating rate securities, such as interests in bank loans, may be subject to greater liquidity risk than other debt securities.
Certain variable and floating rate securities have an interest rate floor feature, which prevents the interest rate payable by the security from dropping below a specified level as compared to a reference interest rate (the “reference rate”). Such a floor protects a Fund from losses resulting from a decrease in the reference rate below the specified level. However, if the reference rate is below the floor, there will be a lag between a rise in the reference rate and a rise in the interest rate payable by the security, and a Fund may not benefit from increasing interest rates for a significant period of time. Rates on certain variable rate securities typically reset only periodically. As a result, changes in prevailing interest rates, particularly sudden and significant changes, can cause some fluctuations in a Fund’s value to the extent that it invests in variable rate securities.
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When-Issued and Delayed Delivery Securities and Forward Commitments Risk —  When-issued and delayed delivery securities and forward commitments involve the risk that the security a Fund commits to purchase will decline in value prior to its delivery. This risk is in addition to the risk that a Fund’s other assets will decline in value. Therefore, these transactions can have a leverage-like effect on a Fund and increase a Fund’s overall investment exposure. There also is the risk that the security will not be issued or that the other party to the transaction will fail to complete the sale or purchase of the security. If this occurs, a Fund may lose the opportunity to purchase or sell the security at the agreed upon price and may forgo any gain in the security’s price. These transactions also may cause a Fund to liquidate positions when it may not be advantageous to do so, in order to satisfy its purchase obligations.
Zero Coupon and Pay-in-Kind Securities Risk —  Zero coupon and pay-in-kind securities are debt securities that do not make periodic cash interest payments. Zero coupon securities are issued at a significant discount from their face value. Zero coupon and pay-in-kind securities tend to be subject to greater fluctuations in market value in response to changing interest rates than securities of comparable maturities that pay interest periodically and in cash. There is a risk that zero coupon securities may not keep pace with inflation.
General Investment Risks
Each Fund is subject to the following general risks. The risks, which are described in alphabetical order and not in order of perceived importance or potential exposure, can negatively affect a Fund's performance.
Asset Class Risk —  A Fund is subject to the risk that the returns from the asset classes, or types of securities, in which it invests will underperform the general securities markets or different asset classes. Different asset classes tend to go through cycles of outperformance and underperformance in comparison to each other and to the general securities markets.
Cybersecurity and Operational Risk —  A Fund and its service providers, and shareholders’ ability to transact with a Fund, may be negatively impacted due to operational risks arising from, among other problems, human errors, systems and technology disruptions or failures, or cybersecurity incidents. Cybersecurity incidents may allow an unauthorized party to gain access to Fund assets, customer data, or proprietary information, or cause a Fund or its service providers, as well as securities trading venues and their service providers, to suffer data corruption or lose operational functionality. Cybersecurity incidents can result from deliberate attacks (e.g., malicious software coding, ransomware, or “hacking”) or unintentional events (e.g., inadvertent release of confidential information, including by a Fund or its service providers). Recently, geopolitical tensions may have increased the scale and sophistication of deliberate attacks, particularly those from nation-states or from entities with nation-state backing. A cybersecurity incident could, among other things, result in the loss or theft of customer data or funds, customers or employees being unable to access electronic systems (“denial of services”), loss or theft of proprietary information or corporate data, physical damage to a computer or network system, or remediation costs associated with system repairs. Any of these results could have a substantial adverse impact on a Fund and its shareholders.
The occurrence of any of these problems could result in a loss of information, the inability to process Fund transactions or calculate a Fund's net asset value, violations of applicable privacy and other laws, regulatory scrutiny, penalties, fines, reputational damage, additional compliance costs or other consequences, any of which could have a material adverse effect on a Fund or its shareholders. The Adviser, through its monitoring and oversight of Fund service providers, seeks to determine that service providers take appropriate precautions to avoid and mitigate risks that could lead to such problems. However, it is not possible for the Adviser or Fund service providers to identify all of the cybersecurity or other operational risks that may affect a Fund or to develop processes and controls to completely eliminate or mitigate their occurrence or effects. Technology is continuously changing, and new ways to carry out cyber attacks are always developing.
Among other situations, disruptions (for example, pandemics or health crises) or other developments that cause prolonged periods of remote work or significant employee absences at a Fund's service providers could impact the ability to conduct the Fund's operations. Most issuers in which a Fund invests are heavily dependent on computers for data storage and operations and require ready access to the internet to conduct their businesses. Thus, cybersecurity incidents could also affect issuers of securities in which a Fund invests, leading to significant loss of value. A Fund may incur substantial costs to prevent or address cybersecurity incidents in the future.
Issuer-Specific Risk —  The value of an individual security or particular type of security can be more volatile than the market as a whole and can perform differently from the market as a whole. The value of a security may decline for a number of reasons which directly relate to the issuer, such as poor management performance; reduced demand for the issuer’s goods or services; investigations or other controversies related to the issuer; strategic initiatives such as mergers, acquisitions or dispositions and the market response to any such initiatives; and the historical and prospective earnings of the issuer and the value of its assets. Certain unanticipated events, such as litigation or natural disasters, can have a dramatic adverse effect on the value of an issuer’s securities. A change in the financial condition of a single issuer may affect securities markets as a whole.
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Recent Market Conditions Risk —  U.S. and international markets have experienced significant volatility in recent months and years. As a result of such volatility, investment returns may fluctuate significantly. Global economies and financial markets are highly interconnected, which increases the possibility that conditions in one country or region might adversely impact issuers in a different country or region.
Interest rates were unusually low in recent years in the United States and abroad, but the interest rate environment changed dramatically in 2022 as interest rates moved significantly higher. Aggressive stimulus measures in 2020 and 2021, rising demand for goods and services, tight labor markets, and supply chain disruptions contributed to a surge of inflation in many sectors of the U.S. and global economies. Due to concerns regarding high inflation, the U.S. Federal Reserve (“Fed”) and many foreign governments and monetary authorities have raised interest rates and implemented other policy initiatives in an effort to control inflation, and they may continue to do so. It is difficult to predict accurately the pace at which central banks or monetary authorities may increase interest rates or the timing, frequency, or magnitude of any such further increases, and the evaluation of macro-economic and other conditions could cause a change in approach in the future. Rising interest rates may present a greater risk than has historically been the case due to the effect of government fiscal and monetary policy initiatives and potential market reaction to those initiatives. As such, fixed-income and related markets may continue to experience heightened levels of interest rate volatility. Inflation risk is the uncertainty over the future real value (after inflation) of an investment. A Fund’s investments may not keep pace with inflation, and the value of an investment in a Fund may be eroded over time by inflation. Changes in government or central bank policies could negatively affect the value and liquidity of a Fund’s investments and cause it to lose money, and there can be no assurance that the initiatives undertaken by governments and central banks will be successful.
The Fed’s or foreign central banks’ actions may result in an economic slowdown in the United States and abroad. There are concerns that monetary policy may provide less support should economic growth slow. An economic slowdown may negatively affect national and global economies, as well as national and global securities and commodities markets, and may continue for an extended period of time and have unforeseen impacts. Any deterioration in economic fundamentals may increase the risk of default or insolvency of particular companies, negatively impact market values, increase market volatility, cause credit spreads to widen, and reduce liquidity.
Russia’s military invasion of Ukraine in February 2022, the resulting responses by the United States and other countries, and the potential for wider conflict have had, and could continue to have, severe adverse effects on regional and global economies and could further increase volatility and uncertainty in the financial markets. The United States and other countries have imposed broad-ranging economic sanctions on Russia and certain Russian individuals, banking entities and corporations as a response to its invasion of Ukraine. The United States and other countries have also imposed economic sanctions on Belarus and may impose sanctions on other countries that provide military or economic support to Russia. These sanctions, as well as any other economic consequences related to the invasion, such as additional sanctions, boycotts or changes in consumer or purchaser preferences or cyberattacks on governments, companies or individuals, may further decrease the value and liquidity of certain Russian securities and securities of issuers in other countries that are subject to economic sanctions related to the invasion. To the extent that a Fund has exposure to Russian investments or investments in countries affected by the invasion, the Fund’s ability to price, buy, sell, receive or deliver such investments may be impaired. In addition, any exposure that a Fund may have to counterparties in Russia or in countries affected by the invasion could negatively impact the Fund’s investments. The extent and duration of military actions and the repercussions of such actions (including any retaliatory actions or countermeasures that may be taken by those subject to sanctions) are impossible to predict. These events have resulted in, and could continue to result in, significant market disruptions, including in certain industries or sectors such as the oil and natural gas markets, and may further strain global supply chains and negatively affect inflation and global growth. These and any related events could significantly impact a Fund’s performance and the value of an investment in a Fund beyond any direct exposure a Fund may have to Russian issuers or issuers in other countries affected by the invasion.
Certain illnesses spread rapidly and have the potential to significantly and adversely affect the global economy and have material adverse impacts on a Fund. The impact of the novel coronavirus (COVID-19) pandemic caused significant volatility and severe losses in global financial markets. The COVID-19 pandemic and efforts to contain its spread resulted, and may continue to result, in significant disruptions to business operations, supply chains and customer activity, higher default rates, widespread business closures and layoffs, travel restrictions and border closings, extended quarantines and stay-at-home orders, event and service cancellations, labor shortages, and significant challenges in healthcare service preparation and delivery, as well as general concern, uncertainty and social unrest. Other outbreaks of infectious diseases or other public health issues that may arise in the future may have similar or worse effects. The impact of any outbreak may last for an extended period of time.
Public health crises caused by outbreaks of infectious diseases or other public health issues, such as the COVID-19 pandemic, may exacerbate other pre-existing economic, political, and social tensions and risks, disrupt market conditions and operations and economies around the world, and negatively affect market performance and the value of investments in individual companies in significant and unforeseen ways. The impact of infectious diseases may be greater in countries that do not move effectively to control
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them or that have limited access to or popular uptake of vaccines, which may occur because of a lack of health care or economic resources or for political or other reasons.
Additionally, public health crises caused by outbreaks of infectious diseases or other public health issues, such as the COVID-19 pandemic, could impair the information technology and other operational systems upon which the Adviser relies, and could otherwise disrupt the ability of a Fund’s service providers to perform essential tasks. Such impacts could impair a Fund’s ability to maintain operational standards (including with respect to satisfying redemption requests), disrupt the operations of a Fund’s service providers, and negatively impact a Fund’s performance.
High public debt in the United States and other countries creates ongoing systemic and market risks and policymaking uncertainty, and there has been a significant increase in the amount of debt due to the economic effects of the COVID-19 pandemic and ensuing economic relief and public health measures. Economic, political and other developments may result in a further increase in the amount of public debt, including in the United States. The long-term consequences of high public debt are not known, but high levels of public debt may negatively affect economic conditions and the value of markets, sectors and companies in which a Fund invests.
Political and diplomatic events within the United States, including a contentious domestic political environment, changes in political party control of one or more branches of the U.S. government, the U.S. government’s inability at times to agree on a long-term budget and deficit reduction plan, the threat of a U.S. government shutdown, and disagreements over, or threats not to increase, the U.S. government’s borrowing limit (or “debt ceiling”), as well as political and diplomatic events abroad, may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree. A downgrade of the ratings of U.S. government debt obligations, or concerns about the U.S. government’s credit quality in general, could have a substantial negative effect on the U.S. and global economies. Moreover, although the U.S. government has honored its credit obligations, there remains a possibility that the United States could default on its obligations. The consequences of such an unprecedented event are impossible to predict, but it is likely that a default by the United States would be highly disruptive to the U.S. and global securities markets and could significantly impair the value of the Funds’ investments.
Slowing global economic growth, the rise in protectionist trade policies, and changes to some major international trade agreements could affect the economies of many countries in ways that cannot necessarily be foreseen at the present time. For example, the full impact of the United Kingdom’s (“UK”) withdrawal from the European Union (the “EU”), commonly referred to as “Brexit,” and the nature of the future relationship between the UK and the EU remain unclear. The effects of Brexit on the UK and EU economies and the broader global economy could be significant, resulting in negative impacts, such as business and trade disruptions, increased volatility and illiquidity, and potentially lower economic growth of markets in the UK, the EU and globally, which could negatively impact the value of a Fund’s investments. The United States has developed increasingly strained relations with a number of foreign countries. If relations with certain countries deteriorate, it could adversely affect U.S. issuers as well as non-U.S. issuers that rely on the United States for trade. Financial markets in the United States and China have been sensitive to the outlook for resolving ongoing U.S.-China trade disputes, a trend that may continue in the future.
In addition, global climate change may have an adverse effect on property and security values. A rise in sea levels, an increase in powerful storms and/or an increase in flooding could cause coastal properties to lose value or become unmarketable altogether. Economists warn that, unlike previous declines in the real estate market, properties in affected coastal zones may never recover their value. Large wildfires have devastated, and in the future may devastate, entire communities and may be very costly to any business found to be responsible for the fire or conducting operations in affected areas. Regulatory changes and divestment movements in the United States and abroad tied to concerns about climate change could adversely affect the value of certain land and the viability of industries whose activities or products are seen as accelerating climate change. Losses related to climate change could adversely affect corporate borrowers and mortgage lenders, the value of mortgage-backed securities, the bonds of municipalities that depend on tax revenues and tourist dollars generated by such properties, and insurers of the property and/or of corporate, municipal or mortgage-backed securities. Because property and security values are driven largely by buyers’ perceptions, it is difficult to know the time period over which these effects might unfold.
All of these risks may have a material adverse effect on the performance and financial condition of the companies and other issuers in which a Fund invests, and on the overall performance of a Fund.
Regulatory Risk —  Each Fund is subject to extensive laws and regulations that govern its operations. Each Fund is subject to regulation by the Securities and Exchange Commission (“SEC”) and is also subject to regulations imposed by other governmental regulatory authorities and self-regulatory organizations. Similarly, the businesses and other issuers of the securities and other instruments in which a Fund invests are also subject to considerable regulation. These laws and regulations are subject to change. Extensive regulation or a change in existing laws or regulations may have unpredictable and unintended effects and may materially impact a Fund, a security, business, sector or market. For example, extensive regulation or a change in existing laws or regulations made by the government or a regulatory body may limit or preclude a Fund’s ability to achieve its investment objective, impact a Fund’s investment
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policies or strategies, adversely affect a Fund’s efficiency in implementing its investment strategies, reduce the attractiveness or increase the cost of an investment, and/or adversely affect a Fund’s performance. A Fund also may incur additional costs to comply with any new requirements as well as to monitor for compliance with any new requirements going forward. A Fund also may be adversely affected by changes in the interpretation or enforcement of existing laws or regulations.
Risk Management —  The Adviser and Sub-Advisers undertake certain analyses with the intention of identifying particular types of risks and reducing a Fund’s exposure to them. However, risk is an essential part of investing, and the degree of return an investor might expect is often tied to the degree of risk the investor is willing to accept. By its very nature, risk involves exposure to the possibility of adverse events. Accordingly, no risk management program can eliminate a Fund’s exposure to such events; at best, it can only reduce the possibility that the Fund will be affected by adverse events, and especially those risks that are not intrinsic to the Fund’s investment program. While the prospectus describes material risk factors associated with a Fund’s investment program, there is no assurance that as a particular situation unfolds in the markets, the Adviser or a Sub-Adviser will identify all of the risks that might affect the Fund, rate their probability or potential magnitude correctly, or be able to take appropriate measures to reduce the Fund’s exposure to them. Measures taken with the intention of decreasing exposure to identified risks might have the unintended effect of increasing exposure to other risks.
Valuation Risk —  The price at which a Fund sells any particular investment may differ from the Fund’s valuation of the investment. Such differences could be significant, particularly for illiquid securities and securities that trade in relatively thin markets and/or markets that experience extreme volatility. If market or other conditions make it difficult to value some investments, SEC rules and applicable accounting protocols may require a Fund to value these investments using more subjective methods, such as fair value methodologies. Using fair value methodologies to price investments may result in a value that is different from an investment’s most recent closing price and from the prices used by other mutual funds to calculate their net asset values. An investment’s valuation may differ depending on the method used for determining value. Investors who purchase or redeem Fund shares on days when the Fund is holding fair-valued securities may receive fewer or more shares, or lower or higher redemption proceeds, than they would have received if the Fund had not held fair-valued securities or had used a different valuation methodology. The value of foreign securities, certain futures and fixed income securities, and currencies may be materially affected by events after the close of the markets on which they are traded but before a Fund determines its net asset value. A Fund may use pricing services to provide values for certain securities, and there is no assurance that a Fund will be able to sell an investment at the price established by such pricing services. Different pricing services use different valuation methodologies, potentially resulting in different values for the same investments. As a result, if a Fund were to change pricing services, or if a pricing service were to change its valuation methodology, the value of the Fund’s investments could be impacted. A Fund’s ability to value its investments in an accurate and timely manner may be impacted by technological issues and/or errors by third party service providers, such as pricing services or accounting agents.
Additional Information about Risks
Additional information that may be associated with a Fund's principal risks but that may not be principal to a Fund's investment strategies follows. The risks, which are described in alphabetical order and not in order of perceived importance or potential exposure, can negatively affect a Fund's performance.
Banking Industry Sector Risk —  To the extent a Fund invests in the banking industry, it is exposed to the risks generally associated with such industry, including interest rate risk, credit risk and the risk that regulatory developments relating to the banking industry may affect its investment. The value of a Fund’s shares could experience significantly greater volatility than the value of shares of funds investing more broadly.
Concentration Risk —  If an Underlying ETF concentrates, or invests a higher percentage of its assets, in the securities of a particular issuer or issuers in a particular country, group of countries, region, market, industry, group of industries, sector or asset class, that Underlying ETF may be adversely affected by the performance of those securities, may be subject to increased price volatility, and may be more susceptible to adverse economic, market, political or regulatory occurrences affecting that issuer or issuers, country, group of countries, region, market, industry, group of industries, sector or asset class.
Distressed Companies Risk —  A Fund may invest in distressed debt securities, including loans, bonds and notes, many of which are not publicly traded and may involve a substantial degree of risk. Debt obligations of distressed companies typically are unrated, lower-rated or close to default. Distressed debt securities include securities of companies that are in financial distress and that may be in or about to enter bankruptcy. In certain periods, there may be little or no liquidity in the markets for these securities. In addition, the prices of such securities may be subject to periods of abrupt and erratic market movements and above-average price volatility. It may be difficult to obtain financial information regarding the financial condition of a borrower or issuer, and its financial condition may change rapidly. It may be more difficult to value such securities and the spread between the bid and asked prices of such securities may be greater than expected. A Fund may lose a substantial portion or all of its investment in such securities or it may be required to accept cash, securities or other property with a value less than the Fund’s original investment. Defaulted debt securities involve
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risks such as the possibility of complete loss of the investment where the issuer does not restructure to enable it to resume principal and interest payments. If the issuer of a security held by a Fund defaults, the Fund may experience a significant or complete loss on the security. Securities tend to lose much of their value before the issuer defaults. A Fund may incur additional expenses to the extent it is required to seek recovery upon a default in the payment of principal or interest on its portfolio holdings.
Dividend Risk —  Dividends received on common stocks are not fixed but are paid at the discretion of an issuer’s board of directors. There is no guarantee that the companies in which a Fund invests will pay dividends in the future or that dividends, if paid, will remain at current levels or increase over time. Securities that pay dividends may be sensitive to changes in interest rates, and as interest rates rise, the prices of such securities may fall. A sharp rise in interest rates, an economic downturn, or other market or company-specific developments, could result in a company’s decision to decrease or eliminate a dividend.
Financial Services Sector Risk —  To the extent a Fund invests in the financial services sector, the value of the Fund’s shares may be particularly vulnerable to factors affecting that sector, such as the availability and cost of capital funds, changes in interest rates, the rate of corporate and consumer debt defaults, extensive government regulation and price competition. The value of a Fund’s shares could experience significantly greater volatility than the value of shares of funds investing more broadly.
Industrials Sector Risk —  The value of securities issued by companies in the industrials sector may be adversely affected by supply and demand changes related to their specific products or services and industrials sector products in general. The products of manufacturing companies may face obsolescence due to rapid technological developments and frequent new product introduction. Global events and changes in government regulations, economic conditions and exchange rates may adversely affect the performance of companies in the industrials sector. Companies in the industrials sector may be adversely affected by liability for environmental damage and product liability claims. The industrials sector may also be adversely affected by changes or trends in commodity prices, which may be influenced by unpredictable factors. Companies in the industrials sector, particularly aerospace and defense companies, may also be adversely affected by government spending policies because companies in this sector tend to rely to a significant extent on government demand for their products and services. Any of these factors could result in a material adverse impact on a Fund’s securities and the performance of a Fund.
Information Technology Sector Risk —  Investment risks associated with investing in the information technology sector include, in addition to other risks, the intense competition to which information technology companies may be subject; the dramatic and often unpredictable changes in growth rates and competition for qualified personnel among information technology companies; effects on profitability from being heavily dependent on patent and intellectual property rights and the loss or impairment of those rights; rapid product obsolescence due to technological developments and frequent new product introduction; general economic conditions; and government regulation. Any of these factors could result in a material adverse impact on a Fund’s securities and the performance of a Fund.
Infrastructure Sector Risk —  Companies in the infrastructure sector may be subject to a variety of factors that could adversely affect their business or operations, including high interest costs in connection with capital construction programs, high degrees of leverage, costs associated with governmental, environmental and other regulations, the effects of economic slowdowns, increased competition from other providers of services, uncertainties concerning costs, the level of government spending on infrastructure projects, the effects of natural disasters, and other factors. Infrastructure companies may be adversely affected by commodity price volatility, changes in exchange rates, import controls, depletion of resources, technological developments, and labor relations. There is also the risk that corruption may negatively affect publicly funded infrastructure projects, especially in emerging markets, resulting in delays and cost overruns.
Infrastructure issuers can be significantly affected by government spending policies because companies involved in this industry rely to a significant extent on U.S. and other government demand for their products. In addition, infrastructure companies may be adversely affected by government regulation or world events (e.g., expropriation, nationalization, confiscation of assets and property or the imposition of restrictions on foreign investments and repatriation of capital, military coups, social or labor unrest, or violence) in the regions in which the companies operate. Infrastructure companies may have significant capital investments in, or engage in transactions involving, emerging market countries, which may heighten these risks. In addition, the failure of an infrastructure company to carry adequate insurance or to operate its assets appropriately could lead to significant losses. Infrastructure companies may be adversely affected by environmental clean-up costs and catastrophic events such as earthquakes, hurricanes, fires and terrorist acts. Infrastructure-related securities may be issued by companies that are highly leveraged, less creditworthy or financially distressed. These investments are considered to be speculative and are subject to greater risk of loss, greater sensitivity to interest rate and economic changes, valuation difficulties, and potential illiquidity. The value of a Fund’s shares could experience significantly greater volatility than the value of shares of funds investing more broadly.
Initial Public Offering (“IPO”) Risk —  Securities issued in IPOs are subject to many of the same risks as investing in companies with smaller market capitalizations. Securities issued in IPOs have no trading history, and information about the companies may
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be available for very limited periods. Prior to an IPO, there is no public market for an issuer’s securities, and there can be no assurance that an active trading market will develop or be sustained following the IPO. In addition, the prices of securities sold in IPOs may be highly volatile. Therefore, a Fund may hold IPO shares for a very short period of time. At times, a Fund may not be able to invest in securities issued in IPOs, or invest to the extent desired, if, for example, only a small portion of the securities being offered in an IPO are made available to the Fund. In addition, under certain market conditions, a relatively small number of companies may issue securities in IPOs. Similarly, as the number of funds to which IPO securities are allocated increases, the number of securities allocated to any one fund may decrease. To the extent a Fund with a small asset base invests in IPOs, a significant portion of its returns may be attributable to its investments in IPOs, which have a magnified impact on Funds with small asset bases. The impact of IPOs on such a Fund's performance will likely decrease as the Fund's asset size increases, which could reduce the Fund's returns. There is no guarantee that as such a Fund's assets grow it will continue to experience substantially similar performance by investing in profitable IPOs.
Inverse Floaters Risk —  Inverse floaters are securities with a floating or variable rate of interest (i.e., the rate of interest varies with changes in specified market rates or indices, such as the prime rate, or at specified intervals). Inverse floaters have interest rates that tend to move in the opposite direction as the specified market rates or indices and may exhibit substantially greater price volatility than fixed rate obligations having similar credit quality, redemption provisions and maturity. Any increase in the reference rate of an inverse floater (as a consequence of an increase in interest rates) causes a drop in the coupon rate, while any drop in the reference rate of an inverse floater causes an increase in the coupon rate. Inverse floaters generally will underperform the market for fixed rate securities in a rising interest rate environment. Inverse floaters typically involve leverage, which can magnify a Fund's losses; accordingly, the holder of an inverse floater could lose more than its principal investment.
LIBOR Risk —  Trillions of dollars’ worth of financial products and contracts around the world, including some of the Funds' investments, utilize the London Interbank Offered Rate (or “LIBOR”) as the reference or benchmark rate for variable interest rate calculations. LIBOR is produced daily by averaging the rates reported by a number of banks. LIBOR may be a significant factor in determining a Fund’s payment obligations under a derivative investment, the cost of financing to a Fund, or an investment’s value or return to a Fund, and may be used in other ways that affect a Fund’s investment performance. The publication of various LIBOR settings either has been, or is in the process of being, discontinued. Most maturities and currencies of LIBOR were phased out at the end of 2021, with the remaining ones to be phased out on June 30, 2023.
The Secured Overnight Financing Rate (“SOFR”) has been selected by a committee established by the Board of Governors of the Federal Reserve System and the Federal Reserve Bank of New York to replace LIBOR as a reference or benchmark rate in the United States. Other countries have undertaken similar initiatives to identify replacement reference or benchmark rates in their respective markets. However, there are obstacles to converting certain existing investments and transactions to a new reference or benchmark rate, as well as risks associated with using a new reference or benchmark rate with respect to new investments and transactions. The transition process, or a failure to transition properly, might lead to increased volatility and illiquidity in markets that currently rely on the LIBOR to determine interest rates, a reduction in the values of some LIBOR-based investments, and reduced effectiveness of certain hedging strategies, which may adversely affect a Fund’s performance or net asset value. While some LIBOR-based instruments may contemplate a scenario where LIBOR becomes unreliable or is no longer available by providing for an alternative rate-setting methodology, not all may have such provisions and there may be significant uncertainty regarding the effectiveness of any such alternative methodologies. Since the usefulness of LIBOR as a benchmark could deteriorate during the transition period, these effects could occur prior to LIBOR ceasing to be published. In addition, the SOFR or other alternative reference or benchmark rate may be an ineffective substitute with respect to an existing or new investment or transaction, resulting in prolonged adverse market conditions for a Fund, which could negatively affect the Fund’s performance and/or net asset value.
SOFR is a broad measure of the cost of borrowing cash overnight collateralized by U.S. Treasury securities and has been published by the Federal Reserve Bank of New York since April 2018. The Federal Reserve Bank of New York also has been publishing historical indicative Secured Overnight Financing Rates from 2014. Historical changes or trends in SOFR may not be reliable as indicators of future changes in SOFR. The composition and characteristics of SOFR are not the same as those of LIBOR, and SOFR is fundamentally different from LIBOR because (1) SOFR is a secured rate, while LIBOR is an unsecured rate, and (2) SOFR is an overnight rate, while LIBOR is a forward-looking rate that represents interbank funding over different maturities. As a result, there can be no assurance that SOFR will perform in the same way as LIBOR would have at any time, including, without limitation, as a result of changes in interest and yield rates in the market, market volatility, or global or regional economic, financial, political, regulatory, judicial or other events. In addition, there can be no assurance that “Term SOFR,” which would be available for different maturities, develops and can be implemented under current documentation as a successor to LIBOR or currently-available SOFR methodologies.
Additionally, daily changes in SOFR have, on occasion, been more volatile than daily changes in other benchmark or market rates, such as LIBOR. The return on and value of an investment in notes or other investments linked to SOFR may fluctuate more than the value of investments that are linked to less volatile rates. In addition, the volatility of SOFR has reflected the underlying volatility of the overnight U.S. Treasury repo market. The Federal Reserve Bank of New York has at times conducted operations in the overnight
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U.S. Treasury repo market in order to help maintain the federal funds rate within a target range. There can be no assurance that the Federal Reserve Bank of New York will continue to conduct such operations in the future, and the duration and extent of any such operations is inherently uncertain. The effect of any such operations, or of the cessation of such operations to the extent they are commenced, is uncertain and could result in losses to a Fund.
SOFR is published by the Federal Reserve Bank of New York based on data that it receives from various sources. There can be no guarantee, particularly given its relatively recent introduction, that SOFR will not be discontinued or fundamentally altered in a manner that is materially adverse to the interests of investors in a Fund. If the manner in which SOFR is calculated is changed, that change may result in a reduction in the amount of interest payable on a Fund’s investments and the trading prices of those investments. In addition, the Federal Reserve Bank of New York may withdraw, modify or amend published SOFR data in its sole discretion and without notice. The interest rate for any interest period typically will not be adjusted for any modifications or amendments to SOFR data that may be published after the interest rate for that interest period has been determined.
Since SOFR is a relatively new reference rate, a Fund’s investments in debt securities and other instruments linked to SOFR may not have an established trading market, and an established trading market may never develop or may not be very liquid. Market terms for instruments linked to SOFR, such as the spread over the base rate reflected in interest rate provisions or the manner of compounding the base rate, may evolve over time, and trading prices for such instruments may be lower than those of later-issued SOFR-based debt instruments as a result. Similarly, if SOFR does not prove to be widely used, the trading price of investments linked to SOFR may be lower than those of investments linked to reference rates that are more widely used. A Fund may not be able to sell the investments at all or may not be able to sell them at prices that will provide a yield comparable to similar investments that have a developed secondary market, and may consequently suffer from increased pricing volatility and market risk.
Listed Private Equity Company Risk —  Listed private equity companies include publicly traded vehicles whose purpose is to invest in privately held companies. Generally, little public information exists for privately held companies, and there is a risk that investors may not be able to make a fully informed investment decision. Investing in less mature privately held companies involves greater risk than investing in well-established, publicly-traded companies.
Money Market Risk —  Although a money market fund is designed to be a relatively low risk investment, it is not free of risk. Despite the short maturities and high credit quality of a money market fund’s investments, increases in interest rates and deteriorations in the credit quality of the instruments the money market fund has purchased may reduce the money market fund’s yield and can cause the price of a money market security to decrease. In addition, a money market fund is subject to the risk that the value of an investment may be eroded over time by inflation. In the event that any money market fund that seeks to maintain a stable $1.00 net asset value fails to maintain a stable net asset value (or if there is a perceived threat that a money market fund is likely to fail to maintain a stable net asset value), money market funds in general could face increased redemption pressures, which could jeopardize the stability of their net asset values. Certain money market funds have in the past failed to maintain stable $1.00 net asset values, and there can be no assurance that such failures and resulting redemption pressures will not occur in the future. A low- or negative-interest rate environment may prevent a money market fund from providing a positive yield, and could negatively impact a money market fund’s ability to maintain a stable $1.00 net asset value per share.
Certain money market funds are institutional money market funds, which means that the net asset value of the fund’s shares will “float”. A money market fund with a floating net asset value does not maintain a stable $1.00 net asset value per share; rather, its net asset value will fluctuate with changes in the values of the securities in which the fund invests. Shares sold utilizing a floating net asset value may be worth more or less than their original purchase price. An institutional money market fund may impose a fee upon the redemption of fund shares or may temporarily suspend the ability to redeem shares if the fund’s liquidity falls below required minimums because of market conditions or other factors.
Money market funds are subject to specific rules that affect the manner in which these funds are structured and operated. These rules are subject to change. A change in these rules may impact a money market fund’s expenses, operations, returns, liquidity and continued viability.
Municipal Securities Risk —  Municipal securities risks include the inability of the issuer to repay the obligation, the relative lack of information about certain issuers of municipal securities, and the possibility of future legislative changes which could affect the market for and value of municipal securities.
Natural Resources Sector Risk —  The profitability of companies in the natural resources sector can be adversely affected by worldwide energy prices and other world events, limits on and the success of exploration projects, and production spending. Companies in the natural resources sector also could be adversely affected by commodity price volatility, changes in exchange rates, interest rates or inflation rates and/or investor expectations concerning such rates, changes in the supply of, or the demand for, natural resources, climate change, imposition of import controls, government regulation and intervention, civil conflict, economic conditions, increased competition, technological developments, and labor relations. In addition, companies in the natural resources sector may be subject
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to the risks generally associated with extraction of natural resources, such as the risks of mining and oil drilling, and the risks of the hazards associated with natural resources, such as natural or man-made disasters, fire, drought, liability for environmental damage claims, and increased regulatory and environmental costs. Prices of precious metals and of precious metal related securities have historically been very volatile due to various economic, financial, social and political factors and may adversely affect the financial condition of companies involved with precious metals. The value of a Fund’s shares could experience significantly greater volatility than the value of shares of funds investing more broadly.
Repurchase Agreements Risk —  Repurchase agreements carry certain risks, including risks that are not associated with direct investments in securities. If a seller under a repurchase agreement were to default on the agreement and be unable to repurchase the security subject to the repurchase agreement, a Fund would look to the collateral underlying the seller’s repurchase agreement, including the securities or other obligations subject to the repurchase agreement, for satisfaction of the seller’s obligation to the Fund. A Fund’s right to liquidate the securities or other obligations subject to the repurchase agreement in the event of a default by the seller could involve certain costs and delays and, to the extent that proceeds from any sale upon a default of the obligation to repurchase are less than the repurchase price (e.g., due to transactions costs or a decline in the value of the collateral), the Fund could suffer a loss. In addition, if bankruptcy proceedings are commenced with respect to the seller, realization of the collateral may be delayed or limited and a loss may be incurred.
Risks of Investing in Other Investment Companies —  A Fund that invests in other investment companies will indirectly bear fees and expenses paid by those investment companies, in addition to the Fund’s direct fees and expenses. The cost of investing in the Fund, therefore, may be higher than the cost of investing in a mutual fund that invests directly in individual stocks and bonds. In addition, the Fund’s net asset value is subject to fluctuations in the net asset values of the other investment companies in which it invests. The Fund is also subject to the risks associated with the securities or other investments in which the other investment companies invest, and the ability of the Fund to meet its investment objective will depend, to a significant degree, on the ability of the other investment companies to meet their respective investment objectives. The extent to which the investment performance and risks associated with the Fund correlate to those of a particular investment company will depend upon the extent to which the Fund’s assets are allocated from time to time for investment in the investment company, which will vary. A Fund does not control the investments of the other investment companies, which may have different investment objectives and may engage in investment strategies that the Fund would not engage in directly. The other investment companies may change their investment objectives or policies without the approval of a Fund. If that were to occur, the Fund might be forced to withdraw its investment from the investment company at a time and price that is unfavorable to the Fund.
Securities Lending Risk —  A Fund may lend its portfolio securities to brokers, dealers, and other financial institutions to seek income. Generally, any such loan of portfolio securities will be continuously secured by collateral at least equal to the value of the security loaned. Such collateral will be in the form of cash, marketable securities issued or guaranteed by the U.S. government or its agencies, or a standby letter of credit issued by qualified banks. A Fund could lose money on its investment of cash collateral. To the extent that portfolio securities acquired with such collateral have decreased in value, it may result in a Fund realizing a loss at a time when it would not otherwise do so. As such, securities lending may introduce leverage into a Fund. The risks of lending portfolio securities, as with other extensions of secured credit, also consist of possible delay in receiving additional collateral (to cover an increase in the market value of the loaned securities or a decrease in the value of any securities collateral) or in the recovery of the loaned securities or possible loss of rights in the collateral should the borrower fail financially. There is a risk that a borrower may default on its obligations to return loaned securities. Securities loans are subject to termination by a Fund (lender) or a borrower at any time. If a Fund terminates a securities loan, it will forego any income on the loan after the termination. Loans will be made only to firms deemed by the Adviser to be of good standing and approved by the Board and will not be made unless, in the judgment of the Adviser, the consideration to be earned from such loans would justify the risk. In addition, securities on loan may not be voted by a Fund, and there is a risk that a Fund may not be able to recall loaned securities in sufficient time to vote on material proxy matters.
Sub-Adviser Selection Risk —  A Fund is subject to the risk that the Adviser’s process for selecting or replacing a Sub-Adviser and its decision to select or replace a Sub-Adviser does not produce the intended results.
In addition, the Adviser is subject to certain conflicts of interest in connection with recommending the appointment and continued service of Sub-Advisers. If the Adviser is affiliated with a Sub-Adviser, the Adviser will benefit not only from the net advisory fee the Adviser retains, but also from the sub-advisory fees paid by the Adviser to the affiliated Sub-Adviser. Since the Adviser pays fees to the Sub-Advisers from the advisory fees that it earns from the Funds, any increase or decrease in the sub-advisory fees negotiated with proposed or current Sub-Advisers will result in a corresponding decrease or increase, respectively, in the amount of the advisory fees retained by the Adviser. The Adviser or its affiliates also have distribution relationships with certain Sub-Advisers or their affiliates under which the Sub-Advisers or their affiliates distribute or support the distribution of investment products issued or sold by the Adviser or its affiliates, which could financially benefit the Adviser and its affiliates or provide an incentive to the Adviser in selecting one Sub-Adviser over another. In addition, the Adviser’s and/ or its affiliates’ other existing or potential business relationships, including with Sub-Advisers and/or their affiliates, or other financial or personal relationships, could influence the Adviser’s selection and retention
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or termination of Sub-Advisers. When recommending the appointment or continued service of a Sub-Adviser, consistent with its fiduciary duties, the Adviser relies primarily on the qualitative and quantitative factors described in detail in the Prospectus.
Tax Risk —  A Fund is subject to the risk that the tax treatment of swap agreements and other derivative instruments, such as commodity-linked derivative instruments, including commodity index-linked notes and commodity options, futures, and options on futures, may be affected by future regulatory or legislative changes that could affect whether income from such investments is “qualifying income” under Subchapter M of the Internal Revenue Code, or otherwise affect the character, timing and/or amount of a Fund’s taxable income or gains and distributions.
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Benchmarks
The performance of each Fund that has annual returns for at least one calendar year, as shown in the section “About the Funds”, is compared to that of a broad-based securities market index and/or a blended index. Each Fund's annualized rates of return are net of: (i) its investment management fees; and (ii) its other expenses.
A Fund's investment performance will change over time with the value of its underlying investments, and recent performance may differ significantly from performance for the time periods shown in this Prospectus.
Broad-based securities market indexes are unmanaged and are not subject to fees and expenses typically associated with managed investment company portfolios. Investments cannot be made directly in a broad-based securities market index. Comparisons with these benchmarks, therefore, are of limited use. They are included because they are widely known and may help you to understand the universe of securities from which a Fund is likely to select its holdings.
1290 Multi-Asset Income Index  is a hypothetical combination of unmanaged indexes. The composite or “blended” index combines the total return of the MSCI World High Dividend Yield Index at a weighting of 20%, the Cboe S&P 500 BuyWrite IndexSM at a weighing of 20%, the Bloomberg U.S. Corporate High Yield Index at a weighting of 30% and the Bloomberg U.S. Aggregate Bond Index at a weighting of 30%.
60% S&P 500® Index/40% Bloomberg U.S. Aggregate Bond Index  is a hypothetical combination of unmanaged indexes. The composite or “blended” index combines the total return of the S&P 500® Index at a weighting of 60% and the Bloomberg U.S. Aggregate Bond Index at a weighting of 40%.
Cboe S&P 500 BuyWrite IndexSM  is a benchmark index designed to track the performance of a hypothetical buy-write strategy on the S&P 500 Index®. The index is a passive total return index based on (1) buying an S&P 500 stock index portfolio, and (2) “writing” (or selling) the near-term S&P 500 Index (SPXSM) “covered” call option, generally on the third Friday of each month. The SPX call written will have about one month remaining to expiration, with an exercise price just above the prevailing index level (i.e., slightly out of the money). The SPX call is held until its expiration and cash settled, at which time a new one-month, near-the-money call is written.
ICE BofA 3-Month U.S. Treasury Bill Index  measures the returns of negotiable debt obligations issued by the U.S. government and backed by its full faith and credit, having a maturity of three months.
ICE BofA U.S. High Yield Index  tracks the performance of US dollar denominated below investment grade corporate debt publicly issued in the US domestic market. Qualifying securities must have a below investment grade rating (based on an average of Moody’s Investors Service, Inc., Standard & Poor’s Financial Services, LLC and Fitch, Inc.), at least 18 months to final maturity at the time of issuance, at least one year remaining term to final maturity as of the rebalancing date, a fixed coupon schedule and a minimum amount outstanding of $250 million. It is market capitalization weighted.
Bloomberg U.S. Aggregate Bond Index  covers the U.S. dollar denominated investment-grade, fixed-rate, taxable bond market of securities. The index includes bonds from the Treasury, government-related and corporate securities, agency fixed rate and hybrid adjustable mortgage pass through securities, asset-backed securities and commercial mortgage-based securities.
Bloomberg U.S. Corporate High Yield Index  measures the USD-denominated, high yield, fixed-rate corporate bond market. Securities are classified as high yield if the middle rating of Moody’s, Fitch and S&P is Ba1/BB+/BB+ or below. Bonds from issuers with an emerging markets country of risk, based on the indices’ EM country definition, are excluded. The Bloomberg U.S. Corporate High Yield Index is a component of the US Universal and Global High Yield Indices.
MSCI World High Dividend Yield Index  is based on the MSCI World Index, its parent index, and includes large and mid-cap stocks across 23 Developed Markets countries. The index is designed to reflect the performance of equities in the parent index (excluding REITs) with higher dividend income and quality characteristics than average dividend yields that are both sustainable and persistent. The index also applies quality screens and reviews 12-month past performance to omit stocks with potentially deteriorating fundamentals that could force them to cut or reduce dividends.
Morgan Stanley Capital International (MSCI) World (Net) Index  is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. The index consists of 23 developed market country indexes.
Russell 2000® Growth Index  The Russell 2000® Growth Index measures the performance of the small-cap growth segment of the US equity universe. It includes those Russell 2000 companies with relatively higher price-to-book ratios, higher I/B/E/S forecast medium term (2 year) growth and higher sales per share historical growth (5 years).
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Russell 2500™ Value Index  measures the performance of those Russell 2500TM Index companies with lower price-to-book ratios and lower forecasted growth values. It is market capitalization-weighted.
Russell 2500™ Index  measures the performance of approximately 2,500 of the smallest companies in the Russell 3000® Index. It is market capitalization-weighted.
Russell 3000® Index  measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market. It is market capitalization-weighted.
Standard & Poor’s 500® Composite Price Index (S&P 500® Index)  is a weighted index of common stocks of 500 leading companies in leading industries of the U.S. economy, capturing 75% coverage of U.S. equities. The index is capitalization-weighted, thereby giving greater weight to companies with the largest market capitalizations.
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Information Regarding the Underlying ETFs
The following is additional information regarding the Underlying ETFs in which the 1290 Multi-Alternative Strategies Fund currently may invest, including investment objectives, principal investment strategies and principal investment risks identified by the Underlying ETFs. If you would like more information about the Underlying ETFs, their Prospectuses and Statements of Additional Information are available by contacting your financial professional. The information below is derived from disclosures contained in each Underlying ETF's Prospectus. The Adviser makes no representations regarding the accuracy or completeness of this information. The Adviser may add new Underlying ETFs or replace existing Underlying ETFs without notice or shareholder approval. The Adviser's selection of Underlying ETFs may have a positive or negative impact on its revenues and/or profits. 
ETF
Investment
Objective
Principal
Investment Strategy
Principal
Investment Risks
Commodities
Invesco DB Agriculture
Fund
Seeks to track changes,
whether positive or
negative, in the level of
the DBIQ Diversified
Agriculture Index Excess
ReturnTM (the “Index”)
over time, plus the
excess, if any, of the
sum of the Fund’s
Treasury Income,
Money Market Income
and T-Bill ETF Income,
over the expenses of
the Fund.
The Fund pursues its investment
objective by investing in a portfolio
of exchange-traded futures on
Corn, Soybeans, Wheat, Kansas
City Wheat, Sugar, Cocoa, Coffee,
Cotton, Live Cattle, Feeder Cattle,
and Lean Hogs (“Index
Commodities”). The Index is
composed of notional amounts of
each of these Index Commodities.
The Fund trades futures contracts
on the Index Commodities (“Index
Contracts”) that are subject to
position limits under regulations of
the CFTC or futures exchange
rules, as applicable. Invesco Capital
Management LLC (“Managing
Owner”) may determine to invest
in other futures contracts if at any
time it is impractical or inefficient
to gain full or partial exposure to
an Index Commodity through the
use of Index Contracts. These
other futures contracts may or may
not be based on an Index
Commodity. When they are not,
the Managing Owner may seek to
select futures contracts that it
reasonably believes tend to exhibit
trading prices that correlate with
an Index Contract. As the Fund
approaches or reaches position
limits with respect to an Index
Commodity, the Fund may
commence investing in Index
Contracts that reference other
Index Commodities. In those
circumstances, the Fund may also
trade in futures contracts based on
commodities other than Index
Commodities that the Managing
Owner reasonably believes tend to
exhibit trading prices that correlate
with an Index Contract.
• Market Risks
• Futures Risks
• Index Risks
• Regulatory Risks
• Tax Risks
• General Risks
• Not a Registered Investment
Company
Invesco DB Commodity
Index Tracking Fund
Seeks to track changes,
whether positive or
negative, in the level of
the DBIQ Optimum
The Fund pursues its investment
objective by investing in a portfolio
of exchange-traded futures on
Light Sweet Crude Oil (WTI),
• Risks Related to Investing in Oil
Markets
• Market Risks
• Futures Risks
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ETF
Investment
Objective
Principal
Investment Strategy
Principal
Investment Risks
 
Yield Diversified
Commodity Index
Excess ReturnTM (the
“Index”) over time, plus
the excess, if any, of the
sum of the Fund’s
Treasury Income,
Money Market Income
and T-Bill ETF Income,
over the expenses of
the Fund.
Heating Oil, RBOB Gasoline,
Natural Gas, Brent Crude, Gold,
Silver, Aluminum, Zinc, Copper
Grade A, Corn, Wheat, Soybeans,
and Sugar (“Index Commodities”).
The Index is composed of notional
amounts of each of these Index
Commodities. The notional
amounts of the Index Commodities
included in the Index are broadly
in proportion to historical levels of
the world’s production and
supplies of the Index Commodities.
The Fund trades futures contracts
on the Index Commodities (“Index
Contracts”) that are subject to
position limits under regulations of
the CFTC or futures exchange
rules, as applicable. Invesco Capital
Management LLC (“Managing
Owner”) may determine to invest
in other futures contracts if at any
time it is impractical or inefficient
to gain full or partial exposure to
an Index Commodity through the
use of Index Contracts. These
other futures contracts may or may
not be based on an Index
Commodity. When they are not,
the Managing Owner may seek to
select futures contracts that it
reasonably believes tend to exhibit
trading prices that correlate with
an Index Contract. As the Fund
approaches or reaches position
limits with respect to an Index
Commodity, the Fund may
commence investing in Index
Contracts that reference other
Index Commodities. In those
circumstances, the Fund may also
trade in futures contracts based on
commodities other than Index
Commodities that the Managing
Owner reasonably believes tend to
exhibit trading prices that correlate
with an Index Contract.
• Index Risks
• Regulatory Risks
• Tax Risks
• General Risks
• Not a Registered Investment
Company
Invesco DB Energy Fund
Seeks to track changes,
whether positive or
negative, in the level of
the DBIQ Optimum
Yield Energy Index
Excess ReturnTM (the
“Index”) over time, plus
the excess, if any, of the
sum of the Fund’s
Treasury Income,
Money Market Income
and T-Bill ETF Income,
The Fund pursues its investment
objective by investing in a portfolio
of exchange-traded futures on
Light, Sweet Crude Oil (WTI);
Heating Oil; Brent Crude Oil; RBOB
Gasoline and Natural Gas (“Index
Commodities”). The Index is
intended to reflect the changes in
market value of the energy sector.
The Index is composed of the
notional amount of the underlying
Index Commodities. The Fund
• Risks Related to Investing in Oil
Markets
• Market Risks
• Futures Risk
• Index Risks
• Regulatory Risks
• Tax Risks
• General Risks
• Not a Registered Investment
Company
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ETF
Investment
Objective
Principal
Investment Strategy
Principal
Investment Risks
 
over the expenses of
the Fund.
trades futures contracts on the
Index Commodities (“Index
Contracts”) that are subject to
position limits under regulations of
the CFTC or futures exchange
rules, as applicable. Invesco Capital
Management LLC (“Managing
Owner”) may determine to invest
in other futures contracts if at any
time it is impractical or inefficient
to gain full or partial exposure to
the Index Commodities through
the use of Index Contracts. These
other futures contracts may or may
not be based on the Index
Commodities. When they are not,
the Managing Owner may seek to
select futures contracts that it
reasonably believes tend to exhibit
trading prices that correlate with
an Index Contract. As the Fund
approaches or reaches position
limits with respect to an Index
Commodity, the Fund may
commence investing in Index
Contracts that reference other
Index Commodities. In those
circumstances, the Fund may also
trade in futures contracts based on
commodities other than Index
Commodities that the Managing
Owner reasonably believes tend to
exhibit trading prices that correlate
with an Index Contract.
 
Invesco DB Gold Fund
Seeks to track changes,
whether positive or
negative, in the level of
the DBIQ Optimum
Yield Gold Index Excess
Return™ (the “Index”)
over time, plus the
excess, if any, of the
sum of the Fund’s
Treasury Income,
Money Market Income
and T-Bill ETF Income,
over the expenses of
the Fund.
The Fund pursues its investment
objective by investing in a portfolio
of exchange-traded futures on
gold (“Index Commodity”). The
Index is intended to reflect the
changes in market value of gold.
The Index is composed of the
notional amount of the underlying
Index Commodity. The Fund trades
futures contracts on the Index
Commodity (“Index Contracts”)
that are subject to position limits
under regulations of the CFTC or
futures exchange rules, as
applicable. Invesco Capital
Management LLC (“Managing
Owner”) may determine to invest
in other futures contracts if at any
time it is impractical or inefficient
to gain full or partial exposure to
the Index Commodity through the
use of Index Contracts. These
other futures contracts may or may
not be based on the Index
Commodity. When they are not,
• Market Risks
• Futures Risk
• Index Risks
• Regulatory Risks
• Tax Risks
• General Risks
• Not a Registered Investment
Company
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ETF
Investment
Objective
Principal
Investment Strategy
Principal
Investment Risks
 
 
the Managing Owner seeks to
select futures contracts that it
reasonably believes tend to exhibit
trading prices that correlate with
an Index Contract.
 
Invesco DB Precious
Metals Fund
Seeks to track changes,
whether positive or
negative, in the level of
the DBIQ Optimum
Yield Precious Metals
Index Excess Return™
(the “Index”) over time,
plus the excess, if any,
of the sum of the Fund’s
Treasury Income,
Money Market Income
and T-Bill ETF Income,
over the expenses of
the Fund.
The Fund pursues its investment
objective by investing in a portfolio
of exchange-traded futures on
gold and silver (“Index
Commodities”). The Index is
intended to reflect the changes in
market value of the precious
metals sector. The Index is
composed of the notional amount
of the underlying Index
Commodities. The Fund trades
futures contracts on the Index
Commodities (“Index Contracts”)
that are subject to position limits
under regulations of the CFTC or
futures exchange rules, as
applicable. Invesco Capital
Management LLC (“Managing
Owner ”) may determine to invest
in other futures contracts if at any
time it is impractical or inefficient
to gain full or partial exposure to
an Index Commodity through the
use of Index Contracts. These
other futures contracts may or may
not be based on the Index
Commodities. When they are not,
the Managing Owner may seek to
select futures contracts that it
reasonably believes tend to exhibit
trading prices that correlate with
an Index Contract. As the Fund
approaches or reaches position
limits with respect to an Index
Commodity, the Fund may
commence investing in Index
Contracts that reference other
Index Commodities. In those
circumstances, the Fund may also
trade in futures contracts based on
commodities other than Index
Commodities that the Managing
Owner reasonably believes tend to
exhibit trading prices that correlate
with an Index Contract.
• Market Risks
• Futures Risk
• Index Risks
• Regulatory Risks
• Tax Risks
• General Risks
• Not a Registered Investment
Company
iShares® GSCI Commodity
Dynamic Roll Strategy ETF
Seeks to track the
investment results of an
index composed of a
broad range of
commodity exposures
with enhanced roll
selection, on a total
return basis.
The Fund seeks to track the
investment results of the S&P GSCI
Dynamic Roll (USD) Total Return
Index (the “Underlying Index”),
which measures the performance
of futures contracts such as
aluminum, Brent crude oil, cocoa,
coffee, copper, corn, cotton, gas
oil, feeder cattle, gold, heating oil,
• Asset Class Risk
• Authorized Participant
Concentration Risk
• Cash Management Risk
• Commodity-Linked Derivatives Risk
• Commodity Regulatory Risk
• Commodity Risk
• Concentration Risk
• Counterparty Risk
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Investment Strategy
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Investment Risks
 
 
lean hogs, lead, live cattle, natural
gas, nickel, silver, soybeans, sugar,
unleaded gasoline, wheat, West
Texas Intermediate crude oil and
zinc. In seeking to achieve its
objective, the Fund may invest in a
combination of exchange-traded
commodity futures contracts,
exchange-traded options on
commodity-related futures
contracts and exchange-cleared
commodity related swaps
(together, “Commodity-Linked
Investments”), thereby obtaining
exposure to the commodities
markets. Commodity-Linked
Investments may also include
exchange-cleared swaps on
commodities and exchange-traded
options on futures that provide
exposure to the investment returns
of the commodities markets,
without investing directly in
physical commodities. Investing in
Commodity-Linked Investments
may have a leveraging effect on
the Fund. The Fund will seek to
gain exposure to
Commodity-Linked Investments by
investing through a wholly-owned
subsidiary organized in the
Cayman Islands (the “Subsidiary”).
The Subsidiary is advised by the
Fund's adviser and has the same
investment objective as the Fund.
The Fund’s adviser uses a “passive”
or indexing approach to try to
achieve the Fund’s investment
objective. The Fund’s adviser uses
a representative sampling indexing
strategy to manage the Fund.
• Credit Risk
• Cybersecurity Risk
• Derivatives Risk
• Energy Sector Risk
• European Economic Risk
• Futures Contract Risk
• Geographic Risk
• Illiquid Investments Risk
• Index-Related Risk
• Infectious Illness Risk
• Interest Rate Risk
• Issuer Risk
• Management Risk
• Market Risk
• Market Trading Risk
• Metals and Mining Industry Risk
• Money Market Instruments Risk
• National Closed Market Trading Risk
• Non-U.S. Issuers Risk
• North America Economic Risk
• Operational Risk
• Passive Investment Risk
• Reliance on Trading Partners Risk
• Risk of Investing in Agriculture and
Livestock
• Risk of Investing in Developed
Countries
• Risk of Investing in the United States
• Risk of Swap Agreements
• Structural Risk
• Subsidiary Risk
• Tax Risk
• Tracking Error Risk
• Valuation Risk
Invesco Optimum Yield
Diversified Commodity
Strategy No K-1 ETF
Seeks long-term capital
appreciation.
The Fund is an actively managed
ETF that seeks to achieve its
investment objective by investing
in a combination of financial
instruments that are economically
linked to the world’s most heavily
traded commodities. Under normal
circumstances, the Fund invests,
either directly or through a
wholly-owned subsidiary, in a
combination of four categories of
investments: i) exchange-traded
futures contracts on underlying
commodities (“Commodities
Futures”); (ii) other instruments
whose value is derived from or
linked to price movements of
underlying physical commodities,
• Authorized Participant
Concentration Risk
• Cash Transaction Risk
• Clearing Broker Risk
• Collateral Securities Risk
• Commodity Pool Risk
• Commodity-Linked Derivatives Risk
• Commodity-Linked Notes Risk
• Counterparty Risk
• Derivatives Risk
• Futures Contracts Risk
• Gap Risk
• Interest Rate Risk
• Investments in Investment
Companies Risk
• Issuer-Specific Risk
• Leverage Risk
• Liquidity Risk
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ETF
Investment
Objective
Principal
Investment Strategy
Principal
Investment Risks
 
 
represented by exchange-traded
futures contracts on commodity
indices, commodity-linked notes,
exchange-traded options on
Commodities Futures, swaps on
commodities and
commodity-related forward
contracts (collectively, these are
“Commodity-Linked Instruments”);
and (iii) cash, cash-like instruments
or high-quality securities
(collectively, “Collateral”).
• Management Risk
• Market Risk
• Market Trading Risk
• Operational Risk
• Options Risk
• Pooled Investment Vehicle Risk
• Sector Concentration Risk
• Shares May Trade at Prices Different
than NAV
• Subsidiary Investment Risk
• Swap Agreements Risk
• Tax Risk
• Valuation Risk
Convertible Securities
SPDR® Bloomberg
Convertible Securities ETF
Seeks to provide
investment results that,
before fees and
expenses, correspond
generally to the price
and yield performance
of an index that tracks
United States
convertible securities
markets.
Under normal market conditions,
the Fund generally invests
substantially all, but at least 80%,
of its total assets in the securities
comprising the Bloomberg U.S.
Convertible Liquid Bond Index
(“Index”) and in securities that the
Fund’s adviser determines have
economic characteristics that are
substantially identical to the
economic characteristics of the
securities that comprise the Index.
In addition, in seeking to track the
Index, the Fund may invest in debt
securities that are not included in
the Index, cash and cash
equivalents or money market
instruments, such as repurchase
agreements and money market
funds (including money market
funds advised by the Fund’s
adviser). In seeking to track the
Index, the Fund’s assets may be
concentrated in an industry or
group of industries, but only to the
extent that the Index concentrates
in a particular industry or group of
industries. The Index is designed to
represent the market of U.S.
convertible securities, such as
convertible bonds and convertible
preferred stock.
• Below Investment-Grade Securities
Risk
• Call/Prepayment Risk
• Convertible Securities Risk
• Credit Risk
• Debt Securities Risk
• Extension Risk
• Fluctuation of Net Asset Value, Share
Premiums and Discounts Risk
• Income Risk
• Indexing Strategy/Index Tracking
Risk
• Interest Rate Risk
• Liquidity Risk
• Market Risk
• Non-U.S. Securities Risk
• Preferred Stock Risk
• Reinvestment Risk
• Restricted Securities Risk
• Settlement Risk
• Technology Sector Risk
• Unconstrained Sector Risk
• Valuation Risk
iShares® Convertible
Bond ETF
Seeks to track the
investment results of an
index composed of U.S.
dollar-denominated
convertible securities,
specifically cash pay
bonds, with outstanding
issue sizes greater than
$250 million.
The Fund seeks to track the
investment results of the
Bloomberg U.S. Convertible Cash
Pay Bond ˃$250MM Index (the
“Underlying Index”). The
Underlying Index is a subset of the
Bloomberg U.S. Convertibles: Cash
Pay Bonds Index, which is one of
the four classes of the Bloomberg
U.S. Convertibles Index (i.e., cash
pay, zero coupon, preferred and
mandatory convertible bonds) and
• Agency Debt Risk
• Asset Class Risk
• Authorized Participant
Concentration Risk
• Calculation Methodology Risk
• Call Risk
• Communication Services Sector Risk
• Concentration Risk
• Consumer Cyclical Industry Risk
• Convertible Securities Risk
• Credit Risk
• Cybersecurity Risk
112 More information on strategies and risks
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Objective
Principal
Investment Strategy
Principal
Investment Risks
 
 
measures the performance of the
U.S. dollar-denominated
convertibles market. The
Underlying Index is market
capitalization-weighted and
consists of only cash pay
convertible bonds. The Fund will
invest at least 80% of its assets in
the component securities of the
Underlying Index, and the Fund
will invest at least 90% of its assets
in fixed income securities of the
types included in the Underlying
Index that the Fund’s Adviser
believes will help the Fund track
the Underlying Index. The Fund will
invest no more than 10% of its
assets in futures, options and
swaps contracts that the Fund’s
Adviser believes will help the Fund
track the Underlying Index as well
as in fixed income securities other
than the types included in the
Underlying Index, but which the
Fund’s Adviser believes will help
the Fund track the Underlying
Index. The Fund seeks to track the
investment results of the
Underlying Index before fees and
expenses of the Fund. The Fund’s
adviser uses a “passive” or
indexing approach to try to
achieve the Fund’s investment
objective. The Fund’s adviser uses
a representative sampling indexing
strategy to manage the Fund. The
Fund may lend securities
representing up to one-third of the
value of the Fund’s total assets
(including the value of any
collateral received).
• High Yield Securities Risk
• Illiquid Investment Risk
• Income Risk
• Index-Related Risk
• Infectious Illness Risk
• Interest Rate Risk
• Issuer Risk
• Management Risk
• Market Risk
• Market Trading Risk
• Operational Risk
• Passive Investment Risk
• Privately-Issued Securities Risk
• Risk of Investing in the United States
• Securities Lending Risk
• Technology Sector Risk
• Tracking Error Risk
Event Driven
IQ Merger Arbitrage ETF
Seeks investment results
that correspond (before
fees and expenses)
generally to the price
and yield performance
of its underlying index,
the IQ Merger Arbitrage
Index (the “Index”).
The Fund employs a “passive
management” — or indexing —
investment approach designed to
track the performance of the
Index. The Index seeks to employ a
systematic investment process
designed to identify opportunities
in companies whose equity
securities trade in developed
markets, including the U.S., and
which are involved in announced
mergers, acquisitions and other
buyout-related transactions. In
addition, the Index includes short
exposure to the U.S. and non-U.S.
equity markets. The Fund invests,
under normal circumstances, at
• Authorized Participant
Concentration Risk
• Counterparty Risk
• Currency Risk
• Cyber Security Risk
• Debt Securities Risk
• Derivatives Risk
• Equity Securities Risk
• Focused Investment Risk
• Foreign Securities Risk
• Foreign Securities Valuation Risk
• Index Risk
• Interest Rate Risk
• Issuer Risk
• Liquidity Risk
• Market Risk
• Merger Arbitrage Risk
More information on strategies and risks 113
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Investment
Objective
Principal
Investment Strategy
Principal
Investment Risks
 
 
least 80% of its net assets, plus the
amount of any borrowings for
investment purposes, in the
investments included in the Index.
• Money Market/Short-Term Securities
Risk
• Non-Diversified Risk
• Operational Risk
• Passive Management Risk
• Portfolio Turnover Risk
• Secondary Market Trading Risk
• Short Sales Risk
• Small- and/or Mid-Capitalization
Companies Risk
• Swap Agreements Risk
• Trading Price Risk
• Valuation Risk
ProShares Merger ETF
Seeks investment
results, before fees and
expenses, that track the
performance of the S&P
Merger Arbitrage Index
(the “Index”).
The Fund is designed to track the
performance of the Index and
provide exposure to a global
merger arbitrage strategy. The
Index, and by extension the Fund,
seeks to produce consistent,
positive returns in virtually all
market environments, although
there are no assurances it will
achieve this result. A global merger
arbitrage strategy seeks to capture
the spread between the price at
which the stock of a company
(each such company, a “Target”)
trades after a proposed acquisition
of such Target is announced and
the value (cash plus stock) that the
acquiring company (the “Acquirer”)
has proposed to pay for the stock
of the Target (a “Spread”). To
obtain exposure to the Index, the
Fund takes long positions in shares
of the Target. The Fund also takes
short positions in shares of the
Acquirer when the deal involves an
exchange of the Acquirer’s stock.
Under normal circumstances, the
Fund will invest at least 80% of its
total assets in component
securities of the Index.
• Risks Associated with the Use of
Derivatives
• Concentration and Focused
Investing Risk
• Correlation Risk
• Counterparty Risk
• Early Close/Late Close/Trading Halt
Risk
• Equity and Market Risk
• Foreign Investments Risk
• Index Performance Risk
• Liquidity Risk
• Long/Short Risk
• Market Price Variance Risk
• Non-Diversification Risk
• Portfolio Turnover Risk
• Risks Related to Foreign Currencies
and the Fund’s Currency Hedging
Strategy
• Risks Related to the Merger
Arbitrage Strategy
• Short Sale Exposure Risk
• Tax Risk
• Small- and Mid-Cap Company
Investment Risk
• Valuation Risk
Global Real Estate
iShares® Core U.S. REIT
ETF
Seeks to track the
investment results of an
index composed of U.S.
real estate equities.
The Fund seeks to track the
investment results of the FTSE
Nareit Equity REITs Index (the
“Underlying Index”), which
measures the performance of U.S.
listed equity real estate investment
trusts (“REITs”), excluding
infrastructure REITs, mortgage
REITs, and timber REITs. The Fund
generally will invest at least 80% of
its assets in the component
securities of its Underlying Index
and in investments that have
economic characteristics that are
• Asset Class Risk
• Authorized Participant
Concentration Risk
• Concentration Risk
• Cybersecurity Risk
• Dividend-Paying Stock Risk
• Equity Securities Risk
• Index-Related Risk
• Infectious Illness Risk
• Issuer Risk
• Management Risk
• Market Risk
• Market Trading Risk
• Operational Risk
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Investment Risks
 
 
substantially identical to the
component securities of its
Underlying Index (i.e., depositary
receipts representing securities of
the Underlying Index) and may
invest up to 20% of its assets in
certain futures, options and swap
contracts, cash and cash
equivalents, including shares of
money market funds advised by
the Fund’s adviser or its affiliates,
as well as in securities not included
in the Underlying Index, but which
the Fund’s adviser believes will help
the Fund track the Underlying
Index. The Fund seeks to track the
investment results of the
Underlying Index before fees and
expenses of the Fund. The Fund’s
adviser uses a “passive” or
indexing approach to try to
achieve the Fund’s investment
objective. The Fund’s adviser uses
a representative sampling indexing
strategy to manage the Fund. The
Fund may lend securities
representing up to one-third of the
value of the Fund’s total assets
(including the value of any
collateral received).
• Passive Investment Risk
• Real Estate Investment Risk
• Risk of Investing in the United States
• Securities Lending Risk
• Tracking Error Risk
Vanguard Global ex-U.S.
Real Estate ETF
Seeks to track the
performance of a
benchmark index that
measures the
investment return of
international real estate
stocks.
The Fund employs an indexing
investment approach designed to
track the performance of the S&P
Global ex-U.S. Property Index (the
“Index”), a float-adjusted,
market-capitalization weighted
index that measures the equity
market performance of
international real estate stocks in
both developed and emerging
markets. The Index is composed of
stocks of publicly traded equity real
estate investment trusts (known as
REITs) and certain real estate
management and development
companies (REMDs). The Fund
attempts to replicate the Index by
investing all, or substantially all, of
its assets in the stocks that make
up the Index, holding each stock in
approximately the same
proportion as its weighting in the
Index.
• Industry Concentration Risk
• Investment Style Risk
• Stock Market Risk
• Country/Regional Risk
• Currency Risk
• Derivatives Risk
• Risk that the market price of the
Fund's ETF shares and the net asset
value of those shares will differ
significantly
• Risk that an active trading market for
the Fund's ETF shares may not be
maintained
• Risk that trading in the Fund's ETF
shares may be halted
Long/Short Equity
ProShares Long
Online/Short Stores ETF
Seeks investment
results, before fees and
expenses, that track the
performance of the
The Fund invests in financial
instruments that ProShare Advisors
believes, in combination, should
track the performance of the
• Risks Associated with the Use of
Derivatives
• Correlation Risk
• Counterparty Risk
More information on strategies and risks 115
ETF
Investment
Objective
Principal
Investment Strategy
Principal
Investment Risks
 
ProShares Long
Online/Short Stores
Index (the “Index”)
Index. The Index consists of long
positions in the online retailers
included in the ProShares Online
Retail Index (the “Online Index”)
and short positions in the “bricks
and mortar” retailers included in
the Solactive-ProShares Bricks and
Mortar Retail Store Index (the
“Retail Store Index”). The Fund and
Index are designed to help
investors take advantage of both
sides of the retail industry’s
transformation by combining full
(100%) long exposure to online
retailers with a partial (50%) short
position to retailers that depend
on physical stores. Under normal
circumstances, the Fund will invest
at least 80% of its total assets in
the component securities of the
Online Index. The Fund intends to
obtain short exposure to the
positions in the Retail Store Index
by investing in derivatives.
• Short Sale Exposure Risk
• Long/Short Risk
• Internet Companies Risk
• Online Retail Companies Risk
• Retailing Industry Risk
• Equity and Market Risk
• Foreign Investment Risk/Emerging
Markets Risk
• Concentration and Focused
Investing
• Geographic Concentration Risk
• Large-Cap Company Investment
Risk
• Non-Diversification Risk
• Market Price Variance Risk
• Liquidity Risk
• Portfolio Turnover Risk
• Tax Risk
• Valuation Risk
• Self-Indexing Performance Risk
• Early Close/Late Close/Trading Halt
Risk
JPMorgan Equity
Premium Income ETF
Seeks current income
while maintaining
prospects for capital
appreciation.
The Fund seeks to achieve its
objective by (1) creating an actively
man- aged portfolio of equity
securities comprised significantly of
those included in the Fund’s
primary benchmark, the Standard
& Poor’s 500 Total Return Index
(S&P 500 Index) and (2) through
equity-linked notes (“ELNs”), selling
call options with exposure to the
S&P 500 Index. The resulting Fund
is designed to provide investors
with performance that captures a
majority of the returns associated
with the S&P 500 Index, while
exposing investors to lower
volatility than the S&P 500 Index
and also providing incremental
income. The Fund is managed in a
way that seeks, under normal
circumstances, to provide monthly
distributions at a relatively stable
level. Under normal circumstances,
the Fund invests at least 80% of its
net assets plus the amount of
borrowings for investment
purposes in equity securities. In
order to generate income, the
Fund may invest up to 20% of its
net assets in ELNs.
• Equity Market Risk
• General Market Risk
• Strategy Risk
• Equity-Linked Notes Risk
• Covered Call Strategy Risk
• Large Cap Company Risk
• Smaller Company Risk
• Industry and Sector Focus Risk
• High Portfolio Turnover Risk
• ETF Shares Trading Risk
• Authorized Participant
Concentration Risk
Managed Futures
WisdomTree® Managed
Futures Strategy Fund
Seeks to provide
investors with positive
The Fund is an actively managed
exchange traded fund (“ETF”) that
• Futures Contracts Risk
• Commodity Risk
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total returns in rising or
falling markets.
seeks to achieve positive total
returns in rising or falling markets
that are not directly correlated to
broad market equity or fixed
income returns. The Fund is
managed using a quantitative,
rules-based strategy designed to
capture rising and falling price
trends in the commodity, currency,
equity, and U.S. Treasury futures
markets through long and short
positions on U.S. listed futures
contracts. The Fund may also
invest up to 5% of its net assets in
bitcoin futures contracts. The Fund
will only invest in cash-settled
bitcoin futures traded on the
Chicago Mercantile Exchange,
which is a futures exchange
registered with the Commodity
Futures Trading Commission. The
Fund may also hold financial
futures contracts on developed
and emerging markets currencies
as well as on 10-year U.S. Treasury
notes and 30-year U.S. Treasury
bonds. The Fund will invest, under
normal circumstances, at least 80%
of its net assets, plus the amount
of any borrowings for investment
purposes, in “managed futures.”
For these purposes, “managed
futures” are investments in
equity-linked, commodity-linked,
currency-linked and
financial-linked instruments, as well
as U.S. government securities and
money market instruments, that
taken together have economic
characteristics similar or equivalent
to those of the listed equity,
commodity, currency and financial
futures contracts described in the
Fund’s prospectus.
• Investment Risk
• Market Risk
• Shares of the Fund May Trade at
Prices Other Than NAV
• Active Management Risk
• Cash Redemption Risk
• Counterparty and Issuer Credit Risk
• Currency Exchange Rate Risk
• Cybersecurity Risk
• Derivatives Risk
• Foreign Securities Risk
• Interest Rate Risk
• Issuer-Specific Risk
• Liquidity Risk
• Models and Data Risk
• Non-Diversification Risk
• Portfolio Turnover Risk
• Repurchase Agreement Risk
• Short Sales Risk
• Subsidiary Investment Risk
• Tax Risk
• Volatility Risk
iMGP DBi Managed
Futures Strategy ETF
Seeks long-term capital
appreciation.
The Fund is a non-diversified,
actively-managed
exchange-traded fund that seeks
to achieve its objective by: (i)
investing its assets pursuant to a
managed futures strategy; (ii)
allocating up to 20% of its total
assets in its wholly-owned
subsidiary, which is advised by the
Fund’s sub-advisor, and will comply
with the Fund’s investment
objective and investment policies;
and (iii) investing directly in select
debt instruments for cash
management and other purposes.
• Managed Futures Strategy Risk
• Futures Contracts Risk
• General Market Risk; Recent Market
Events Risk
• Derivatives Risk
• Commodities Risk
• Equity Securities Risk
• Currency Risk
• Credit Risk
• ETF Risk
• Leverage Risk
• Debt Securities and Fixed-Income
Risk
• Interest Rate Risk
• Management Risk
More information on strategies and risks 117
ETF
Investment
Objective
Principal
Investment Strategy
Principal
Investment Risks
 
 
The Fund’s managed futures
strategy employs long and short
positions in derivatives, primarily
futures contracts and forward
contracts, across the broad asset
classes of equities, fixed income,
currencies and, through the
subsidiary, commodities. Fund
positions in those contracts are
determined based on a
proprietary, quantitative model –
the Dynamic Beta Engine – that
seeks to identify the main drivers
of performance by approximating
the current asset allocation of a
selected pool of the largest
commodity trading advisor hedge
funds (“CTA hedge funds”), which
are hedge funds that use futures
or forward contracts to achieve
their investment objectives. The
Dynamic Beta Engine analyzes
recent (i.e., trailing 60-day)
performance of CTA hedge funds
in order to identify a portfolio of
liquid financial instruments that
closely reflects the estimated
current asset allocation of the
selected pool of CTA hedge funds,
with the goal of simulating the
performance, but not the
underlying positions, of those
funds. Based on this analysis, the
Fund will invest in an optimized
portfolio of long and short
positions in domestically-traded,
liquid derivative contracts.
• Models and Data Risk
• Non-Diversified Fund Risk
• Government Securities and Agency
Risk
• Liquidity Risk
• Short Position Risk
• Subsidiary Risk
• Forward Contracts Risk
• Tax Risk
• Inflation Risk
• Operational Risk
• Regulatory Risk
Real Return
iShares® TIPS Bond ETF
Seeks to track the
investment results of an
index composed of
inflation-protected U.S.
Treasury bonds.
The Fund seeks to track the
investment results of the ICE US
Treasury Inflation Linked Bond
Index (“Index”), which tracks the
performance of inflation-protected
public obligations of the U.S.
Treasury, commonly known as
“TIPS,” that have a remaining
maturity of more than one year.
TIPS are securities issued by the
U.S. Treasury that are designed to
provide inflation protection to
investors. The Fund will invest at
least 80% of its assets in the
component securities of the Index,
and at least 90% of its assets in
U.S. Treasury securities that the
Fund’s adviser believes will help the
Fund track the Index. The Fund will
invest no more than 10% of its
assets in futures, options and swap
• Asset Class Risk
• Authorized Participant
Concentration Risk
• Concentration Risk
• Cybersecurity Risk
• Income Risk
• Index-Related Risk
• Infectious Illness Risk
• Interest Rate Risk
• Management Risk
• Market Risk
• Market Trading Risk
• Operational Risk
• Passive Investment Risk
• Risk of Investing in the United States
• Securities Lending Risk
• Tracking Error Risk
• U.S. Treasury Obligations Risk
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Objective
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Investment Strategy
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Investment Risks
 
 
contracts that the Fund’s adviser
believes will help the Fund track
the Index. . The Fund seeks to track
the investment results of the Index
before fees and expenses of the
Fund. The Fund’s adviser uses a
“passive” or indexing approach to
try to achieve the Fund’s
investment objective. The Fund’s
adviser uses a representative
sampling indexing strategy to
manage the Fund. The Fund may
lend securities representing up to
one-third of the value of the Fund’s
total assets (including the value of
the collateral received).
 
Vanguard Short-Term
Inflation-Protected
Securities ETF
The Fund seeks to track
the performance of a
benchmark index that
measures the
investment return of
inflation-protected
public obligations of the
U.S. Treasury with
remaining maturities of
less than 5 years.
The Fund employs an indexing
investment approach designed to
track the performance of the
Bloomberg U.S. Treasury
Inflation-Protected Securities (TIPS)
0-5 Year Index (the “Index”). The
Index is a
market-capitalization-weighted
index that includes all
inflation-protected public
obligations issued by the U.S.
Treasury with remaining maturities
of less than 5 years. The Fund
attempts to replicate the target
index by investing all, or
substantially all, of its assets in the
securities that make up the Index,
holding each security in
approximately the same
proportion as its weighting in the
Index. The Fund maintains a
dollar-weighted average maturity
consistent with that of the Index.
• Income Fluctuations Risk
• Real Interest Rate Risk
• Risk that the market price of the
Fund's ETF shares and the net asset
value of those shares will differ
significantly
• Risk that an active trading market for
the Fund's ETF shares may not be
maintained
• Risk that trading in the Fund's ETF
shares may be halted
More information on strategies and risks 119
4. Management of the Funds
This section gives you information on 1290 Funds, the Adviser and the Sub-Advisers for the Funds.
1290 Funds
1290 Funds is organized as a Delaware statutory trust and is registered with the SEC as an open-end management investment company. 1290 Funds’ Board of Trustees is responsible for the overall management of 1290 Funds and the Funds. 1290 Funds issues shares of beneficial interest that are currently divided among sixteen (16) funds. This Prospectus describes seven (7) Funds of the Trust, each of which has authorized Class A, Class T, Class I and Class R shares. The Funds currently do not offer Class T shares. All share classes are currently not offered for sale in all states. Each Fund has its own investment objective, investment strategies and risks, which have been previously described in this Prospectus.
The 1290 Funds’ Board of Trustees oversees generally the operations of the Funds. 1290 Funds enters into contractual arrangements with various parties, including among others, the Adviser, Sub-Advisers, custodian, transfer agent, and accountants, who provide services to the Funds. Shareholders are not parties to any such contractual arrangements and those contractual arrangements are not intended to create in any shareholder any right to enforce them directly against the service providers or to seek any remedy under them directly against the service providers.
This Prospectus provides information concerning the Funds that you should consider in determining whether to purchase Fund shares. Neither this Prospectus nor the Statement of Additional Information is intended, or should be read, to be or create an agreement or contract between the 1290 Funds or a Fund and any investor, or to create any rights in any shareholder or other person other than any rights under federal or state law that may not be waived.
The Adviser
Equitable Investment Management, LLC is located at 1290 Avenue of the Americas, New York, New York 10104, and is the investment adviser to each Fund. The Adviser is registered with the SEC as an investment adviser under the Investment Advisers Act of 1940, as amended. The Adviser currently claims an exclusion (under Commodity Futures Trading Commission Rule 4.5) from registration as a commodity pool operator with respect to each Fund. The Adviser is an indirect, wholly-owned subsidiary of Equitable Holdings, Inc. (“Equitable Holdings”), which is a publicly-owned company. The Adviser is recently organized and has been registered with the SEC as an investment adviser since August 2022. The Adviser began serving as the investment adviser to each Fund on January 1, 2023. Prior to January 1, 2023, EIM, an affiliate of the Adviser, served as the investment adviser to each Fund. As of December 31, 2022, EIM had approximately $105.0 billion in assets under management. EIM is a wholly-owned subsidiary of Equitable Financial Life Insurance Company (“Equitable Financial”), which is an indirect, wholly-owned subsidiary of Equitable Holdings. EIM serves as the investment adviser to mutual funds and other pooled investment vehicles. 1290 Funds is part of a fund complex that includes EQ Advisors Trust and EQ Premier VIP Trust, for which EIM serves as the investment adviser.
The Adviser provides or oversees the provision of all investment advisory, portfolio management and administrative services to the Funds. The Adviser has supervisory responsibility for the management and investment of each Fund’s assets and develops the investment objectives and investment policies for the Funds. The Adviser also has full discretion to make all determinations with respect to the investment of a Fund’s assets that are not then managed by a Sub-Adviser. As further discussed below, with respect to each sub-advised Fund, the Adviser’s management responsibilities include the selection and monitoring of Sub-Advisers.
With respect to the 1290 Multi-Alternative Strategies Fund, in addition to its managerial responsibilities, the Adviser is responsible for determining the asset allocation for the Fund and will periodically establish specific percentage targets for each asset category and strategy in which the Fund invests. In addition, the Adviser will identify the specific Underlying ETFs to be held by the Fund.
The Adviser is responsible for overseeing Sub-Advisers and recommending their hiring, termination and replacement to the Board of Trustees.
The Adviser selects Sub-Advisers to manage a Fund’s assets by utilizing a due diligence process covering a number of key factors which include, but are not limited to, the Sub-Adviser’s reputation, organizational stability, investment personnel, long-term performance, investment philosophy and style and correlation with other Sub-Advisers, if any, retained for other allocated portions of the Fund.
120 Management of the Funds
The Adviser plays an active role in monitoring each Fund and Sub-Adviser, as applicable, and uses portfolio analytics systems to strengthen its evaluation of performance, style, risk levels, diversification and other criteria. The Adviser also monitors each Sub-Adviser’s portfolio management team to determine whether its investment activities remain consistent with a Fund’s investment style and objectives.
Beyond performance analysis, the Adviser monitors significant changes that may impact a Sub-Adviser’s overall business. The Adviser monitors continuity in each Sub-Adviser’s operations and changes in investment personnel and senior management. The Adviser performs due diligence reviews with each Sub-Adviser no less frequently than annually.
The Adviser obtains detailed, comprehensive information concerning Fund and Sub-Adviser performance and Fund operations that is used to supervise and monitor the Sub-Advisers and Fund operations. The Adviser has a team responsible for conducting ongoing investment reviews with each Sub-Adviser and for developing the criteria by which Fund performance is measured.
The Adviser selects Sub-Advisers from a pool of candidates, including its affiliates, to manage a Fund. The Adviser may hire, terminate and replace Sub-Advisers and amend sub-advisory agreements subject to the approval of 1290 Funds’ Board of Trustees. The Adviser also may allocate a Fund’s assets to additional Sub-Advisers subject to the approval of 1290 Funds’ Board of Trustees and has discretion to allocate a Fund’s assets among its current Sub-Advisers. The Adviser recommends Sub-Advisers for a Fund to 1290 Funds’ Board of Trustees based upon its continuing quantitative and qualitative evaluation of each Sub-Adviser’s skills in managing assets pursuant to specific investment styles and strategies. Short-term investment performance, by itself, is not a significant factor in selecting or terminating a Sub-Adviser, and the Adviser does not expect to recommend frequent changes of Sub-Advisers.
If the Adviser hires, terminates or replaces a Sub-Adviser to a Fund or adjusts the asset allocation among Sub-Advisers to a Fund, the affected Fund may experience a period of transition during which the securities held in the Fund may be repositioned in connection with the change in Sub-Adviser. A Fund may not pursue its principal investment strategies during such a transition period and may incur increased brokerage commissions and other transaction costs in connection with the change. Generally, transitions may be implemented before or after the effective date of a new Sub-Adviser’s appointment as a sub-adviser to a Fund, and may be completed in several days to several weeks, depending on the particular circumstances of the transition. In addition, the past performance of a Fund is not an indication of future performance. This may be particularly true for any Fund that has undergone Sub-Adviser changes and/or changes to the investment objective or policies of the Fund.
A committee of Adviser investment personnel is primarily responsible for the selection, monitoring and oversight of each Fund’s Sub-Adviser.
Kenneth T. Kozlowski, CFP®, ChFC, CLU  has served as Executive Vice President and Chief Investment Officer of the Adviser since June 2022, as Executive Vice President and Chief Investment Officer of EIM since June 2012, and as Signatory Officer of Equitable Financial since November 2021. He has been an employee of Equitable Financial since 1999.
Alwi Chan, CFA®  has served as Senior Vice President and Deputy Chief Investment Officer of the Adviser since December 2022, and as Senior Vice President and Deputy Chief Investment Officer of EIM since June 2012. He has been an employee of Equitable Financial since 1999.
The Adviser, rather than a Sub-Adviser, manages the 1290 Multi-Alternative Strategies Fund. In addition to Messrs. Kozlowski and Chan, the following investment personnel of the Adviser constitute the committee of the Adviser that is primarily responsible for the selection of the investments in Underlying ETFs for the 1290 Multi-Alternative Strategies Fund:
Xavier Poutas, CFA®  has served as an Assistant Portfolio Manager of the Adviser since January 2023 and as a Vice President of the Adviser since December 2022, and as an Assistant Portfolio Manager of EIM since May 2011 and as a Vice President of EIM since June 2016. He joined EIM in October 2004 as a Fund Administrator and was involved in the implementation of the asset allocation strategy for the funds of funds. He has been an employee of Equitable Financial since August 2002.
Miao Hu, CFA®  has served as an Assistant Portfolio Manager of the Adviser since January 2023 and as a Vice President of the Adviser since December 2022, and as an Assistant Portfolio Manager of EIM since May 2016 and as a Vice President of EIM since June 2016. She has served as a Director of Portfolio Analytics since December 2014. She has been an employee of Equitable Financial since November 2013.
Kevin McCarthy  has served as an Assistant Portfolio Manager of the Adviser since January 2023 and as a Vice President of the Adviser since June 2022, and as an Assistant Portfolio Manager of EIM since December 2018 and as a Vice President of EIM since July 2022. He is a manager of the asset allocation strategy for the funds of funds. He has been an employee of Equitable Financial since August 2015.
Management of the Funds 121
Information about the portfolio managers’ compensation, other accounts they manage and their ownership of securities of the Funds is available in the Trust’s SAI.
The Adviser has been granted relief from the SEC that permits the Adviser, subject to the approval of 1290 Funds’ Board of Trustees, to hire, terminate and replace Sub-Advisers and to amend the sub-advisory agreements between the Adviser and the Sub-Advisers without obtaining shareholder approval. If a new Sub-Adviser is retained for a Fund, shareholders will receive notice of such action. However, the Adviser may not enter into a sub-advisory agreement on behalf of a Fund with an “affiliated person” of the Adviser (as that term is defined in the 1940 Act) (“Affiliated Sub-Adviser”), such as AllianceBernstein L.P., unless the sub-advisory agreement with the Affiliated Sub-Adviser, including compensation, is also approved by the affected Fund’s shareholders. The relief does not extend to any increase in the advisory fee paid by a Fund to the Adviser; any such increase would be subject to the approval of the affected Fund's shareholders.
The Sub-Advisers
For certain Funds, investments are selected by a Sub-Adviser. The following describes each sub-advised Fund's Sub-Advisers and portfolio managers and each portfolio manager’s business experience. Information about the portfolio managers’ compensation, other accounts they manage and their ownership of securities of the Funds is available in 1290 Funds' SAI. Each Sub-Adviser is subject to the oversight of the Adviser.
AXA Investment Managers US Inc.  (“AXA IM”), 100 West Putnam Ave., 3rd Floor, Greenwich, Connecticut 06830, serves as the Sub-Adviser to the 1290 SmartBeta Equity Fund and the 1290 High Yield Bond Fund. AXA IM is an indirect wholly-owned subsidiary of AXA Investment Managers, S.A., which is a wholly-owned subsidiary of the AXA Group. As of December 31, 2022, AXA IM had approximately $85.9 billion in assets under management.
Gideon Smith, CFA®, Cameron Gray, Ram Rasaratnam, CFA®, and Jonathan White  are jointly and primarily responsible for the investment decisions for the 1290 SmartBeta Equity Fund.
Gideon Smith, CFA®  is Head of AXA IM’s Equity QI expertise. Mr. Smith is responsible for the implementation of all of Equity QI’s investment strategies as well as advanced research and innovation. Since joining AXA IM in 1998, he has held a number of positions including Deputy Chief Investment Officer, Director of Client Services and Head of Strategy Engineering for Europe.
Cameron Gray  is Head of Portfolio Implementation of AXA IM’s Equity QI expertise and currently manages Sustainable Equity strategies and also is a key contributor to integral projects on investment process and design. Mr. Gray joined AXA IM in 2007 as a portfolio manager.
Ram Rasaratnam, CFA®  is Chief Investment Officer of AXA IM’s Equity QI expertise and is responsible for the oversight of all of Equity QI’s investment strategies and client outcomes. Mr. Rasaratnam joined AXA IM in 2006 as a Research Associate and was one of the key architects of the Sustainable Equity investment strategy.
Jonathan White  is Head of Investment Strategy & Sustainability and is responsible for managing and developing AXA IM’s quantitative equity investment strategies. Mr. White joined AXA IM in 2007.
Robert Houle, CFA® and Michael Graham, CFA®  are jointly and primarily responsible for the investment decisions for the 1290 High Yield Bond Fund.
Robert Houle, CFA®  is a Senior U.S. High Yield Portfolio Manager at AXA IM. Prior to joining AXA IM in 2005 as a U.S. high yield analyst, Mr. Houle was a trader at Lehman Brothers.
Michael Graham, CFA®  is Head of U.S. High Yield and a Senior U.S. High Yield Portfolio Manager at AXA IM. Since joining AXA IM in 2007, Mr. Graham has held various leadership roles within the U.S. High Yield team.
Brandywine Global Investment Management, LLC  (“Brandywine Global”), 1735 Market Street, Philadelphia, Pennsylvania 19103, serves as the Sub-Adviser to the 1290 Diversified Bond Fund. Brandywine Global acts as adviser or subadviser to individuals, public funds, corporations, pension and profit sharing plans, Taft-Hartley Plans, endowments and foundations, as well as to investment company portfolios. As of December 31, 2022, Brandywine Global’s total assets under management were approximately $55.44 billion.
Anujeet Sareen, CFA®  is a portfolio manager for Brandywine Global’s global fixed income and related strategies. Prior to joining Brandywine Global in 2016, Mr. Sareen was employed at Wellington Management since 1994 where he served as a managing director of global fixed income and a global macro strategist, as well as Chair of the Currency Strategy Group.
122 Management of the Funds
Tracy Chen, CFA®, CAIA  is a portfolio manager and head of Structured Credit for Brandywine Global. Tracy is responsible for conducting credit analysis on mortgage-backed securities (MBS) with special emphasis on collateralized mortgage obligations (CMOs), collateralized loan obligations (CLOs) and other structured products. She also monitors and analyzes the investment merits of global corporate debt issues. She joined the firm in August 2008. Prior to joining Brandywine Global, she was with UBS Investment Bank as director of the fixed income valuation group (2006-2008), GMAC Mortgage Group as a mortgage pricing analyst (2003-2006), Deloitte Consulting as a senior corporate strategy consultant (2001-2003), and J&A Securities Ltd. in Shenzhen, China, as an international corporate finance associate (1995-1999).
Brian L. Kloss, JD, CPA  is a portfolio manager on the Global Fixed Income team. He joined Brandywine Global in December 2009, bringing with him over 10 years of high yield and distressed debt experience. Previously, Brian was co-portfolio manager at Dreman Value Management, LLC (2007-2009); high yield analyst/trader at Gartmore Global Investments (2002-2007); high yield and equity portfolio manager and general analyst at Penn Capital Management, Ltd. (2000-2002); an analyst with The Concord Advisory Group, Ltd. (1998-2000); and an international tax consultant with Deloitte & Touche LLP (1995-1998). Brian earned his J.D. from Villanova School of Law and graduated summa cum laude with B.S. in Accounting from University of Scranton. He is also a member of the New Jersey and Pennsylvania Bar and is a Pennsylvania Certified Public Accountant.
Essex Investment Management Company, LLC  (“Essex”), 125 High Street, Suite 1803, Boston, Massachusetts 02110, serves as the Sub-Adviser to the 1290 Essex Small Cap Growth Fund. Essex generally provides investment management services on a discretionary basis to institutional clients, such as employee benefits plans, endowment funds, foundations, religious organizations, and mutual funds. Essex also provides investment management services to individuals (private clients), limited partnerships and limited liability companies. As of December 31, 2022, Essex had approximately $618.38 million in discretionary assets under management and approximately $8.68 million in non-discretionary assets under management.
Nancy Prial, CFA®  is the Co-Chief Executive Officer and Senior Portfolio Manager of Essex. Nancy is the portfolio manager for the micro, small, and SMID growth strategies. Prior to joining Essex in 2005, Nancy spent six years at Burridge Growth Partners as the Chief Investment Officer and Senior Vice President responsible for the SMID and Small Cap Growth Strategies. The Essex Small Cap Growth Strategy was launched and developed by Nancy in 2001 while at Burridge. Previously, Nancy spent four years as a Senior Vice President and Senior Portfolio Manager at American Century Investors where her responsibilities included leading the team that managed the Heritage Fund. Nancy began her career at Frontier Capital Management in 1984 where she served as both a fundamental analyst and portfolio manager in the small and mid-cap area. Nancy earned a B.S. in Electrical Engineering and a B.A. in Mathematics from Bucknell University and an M.B.A. from Harvard Business School.
GAMCO Asset Management Inc.  (“GAMCO”), One Corporate Center, Rye, New York 10580, serves as the Sub-Adviser to the 1290 GAMCO Small/Mid Cap Value Fund. As of December 31, 2022, total assets under management for all clients were $29.3 billion.
Mario J. Gabelli  serves as the Chief Executive Officer and Chief Investment Officer of Value Portfolios at GAMCO and is responsible for the day-to-day management of the 1290 GAMCO Small/Mid Cap Value Fund. He has over 50 years’ experience in the investment industry.
Loomis, Sayles & Company, L.P.  (“Loomis Sayles”), located at One Financial Center, Boston, MA 02111, is a Delaware limited partnership. Loomis Sayles’ general partner, Loomis, Sayles & Company, Inc., is directly owned by Natixis Investment Managers, LLC (“Natixis LLC”). Natixis LLC is an indirect subsidiary of Natixis Investment Managers, an international asset management group based in Paris, France, that is in turn owned by Natixis, a French investment banking and financial services firm. Natixis is wholly-owned by BPCE, France’s second largest banking group. BPCE is owned by banks comprising two autonomous and complementary retail banking networks consisting of the Caisse d’Epargne regional savings banks and the Banque Populaire regional cooperative banks. The registered address of Natixis is 30, avenue Pierre Mendès France, 75013 Paris, France. The registered address of BPCE is 50, avenue Pierre Mendès France, 75013 Paris, France. As of December 31, 2022, Loomis Sayles’ total assets under management were approximately $282.1 billion.
Elaine Kan, CFA®, Kevin P. Kearns, and Vivek Garg, CFA®  are jointly and primarily responsible for the investment decisions for the 1290 Loomis Sayles Multi-Asset Income Fund.
Elaine Kan, CFA  is a Vice President, Portfolio Manager and Rate & Currency Strategist for the Fixed Income Group at Loomis Sayles. In addition to co-managing the Loomis Sayles Inflation Protected Securities Fund, Elaine is responsible for implementing interest rates and currency derivatives strategies for the Alpha Strategies Group, as well as providing support to other products across the Fixed Income Group. She joined Loomis Sayles in 2011 from Convexity Capital Management Co., where she was a portfolio analyst. Previously, Elaine was a fixed income analyst at Harvard Management Company. She began her investment
Management of the Funds 123
industry career in 1997, working in the financial engineering group at Bank of Boston. Elaine earned a BS in engineering, a BS in finance and a master’s degree in electrical engineering from the Massachusetts Institute of Technology.
Kevin P. Kearns  is a Vice President and Portfolio Manager at Loomis Sayles. As the leader of the Alpha Strategies Group, he co-manages the Loomis Sayles Multi-Asset Credit and Income strategies and Custom strategies, as well as the Loomis Sayles Inflation Protected Securities Fund. Kevin has 36 years of investment industry experience and joined Loomis Sayles in 2007. Previously, he was director of derivatives, quantitative analysis and risk management at Boldwater Capital Management where he was responsible for development and implementation of a credit-focused relative value hedge fund. Kevin managed derivative based strategies focused on capital structure arbitrage, event driven and relative value strategies. He also spent 14 years with Fleet Boston as managing director and group head of credit derivatives. Kevin earned an undergraduate degree in physics from Bridgewater State University and an MBA from Bryant University, and holds a certificate in Machine Learning from Cornell University.
Vivek Garg, CFA  is a Vice President and Portfolio Manager at Loomis Sayles. He is responsible for managing various equity strategies for the Alpha Strategies Group. In addition, he is the lead convertible bonds and equity option strategist for the platform. Vivek has over 15 years of investment industry experience. He joined Loomis Sayles in 2013 from New York Life Investment Management, where he was a Vice President responsible for quantitative research and portfolio management for global equity portfolios. Vivek began his career at Intel Corporation where he was a Senior Software Engineer and Project Leader. He earned an undergraduate degree in Computer Engineering from Pune University and an MBA from Duke University, The Fuqua School of Business.
Conflicts of Interest
The Adviser currently serves as the investment adviser and the administrator for the Trust. EIM, an affiliate of the Adviser, currently serves as the investment adviser for two other investment companies that are registered under the 1940 Act (i.e., EQ Advisors Trust and EQ Premier VIP Trust), and as the investment adviser for two private investment trusts that are exempt from such registration. The Adviser currently serves as the administrator for EQ Advisors Trust and EQ Premier VIP Trust. The Adviser and its affiliates (including EIM, Equitable Financial, Equitable Distributors, LLC, Equitable Holdings and AllianceBernstein L.P.) and their respective managers, partners, directors, trustees, officers, and employees (collectively, for purposes of this Conflicts of Interest discussion, “Affiliates”) are insurance and related financial services companies engaged in life insurance, property and casualty insurance and reinsurance activities, as well as asset management, investment banking, securities trading, brokerage, real estate and other financial services activities, providing a broad range of services to a substantial and diverse client base. The broad range of activities, services, and interests of the Adviser and its Affiliates gives rise to actual, potential and/or perceived conflicts of interest, and may introduce certain investment or transactional restrictions, that could disadvantage the Funds and their shareholders.
Certain actual and potential conflicts of interest are discussed below and elsewhere in this Prospectus, and a further discussion of conflicts of interest appears in the SAI. Investors should carefully review these discussions. These discussions are not, and are not intended to be, a complete discussion of all of the actual and potential conflicts of interest that may arise. Additional or unanticipated conflicts of interest may arise from time to time in the ordinary course of the Adviser’s and its Affiliates’ various businesses. The Adviser and the Trust have adopted practices, policies and procedures that are intended to identify, monitor, and mitigate conflicts of interest. These practices, policies and procedures include, among others, information barriers, codes of ethics, pre-clearance and reporting of securities transactions by certain persons, and the use of independent persons to review certain types of transactions. There is no assurance, however, that these practices, policies and procedures will be effective, and these practices, policies and procedures also may limit the Funds’ investment activities and affect their performance.
Certain Conflicts Related to Fees and Compensation
The Adviser and certain of its Affiliates provide services including investment advisory, administration, shareholder servicing, and distribution support services to the Funds and earn fees from these relationships with the Funds. The Adviser and its Affiliates face conflicts of interest when the Funds select affiliated service providers because the Adviser and its Affiliates receive greater compensation when they are used. Although these fees are generally based on asset levels, the fees are not directly contingent on Fund performance and the Adviser and its Affiliates would still receive significant compensation from the Funds even if shareholders lose money. In addition, the Adviser and certain of its Affiliates manage or advise funds or accounts, including the Funds, with different fee rates and/or fee structures. Differences in fee arrangements may create an incentive for the Adviser and/or its Affiliates to favor higher-fee funds or accounts.
A Fund may be included in investment models developed by EIM for use by clients and financial advisors. To the extent clients invest in these investment models and increase the assets under management of a Fund, the amount of the advisory fee paid by the
124 Management of the Funds
Fund to the Adviser may also increase. In addition, the liquidity of a Fund may be impacted by purchases and redemptions of the Fund by model-driven investment portfolios.
Certain Conflicts Related to the Adviser and its Affiliates Acting in Multiple Commercial Capacities
The Adviser and/or one or more Affiliates act or may act in various commercial capacities, including as investment manager, investment adviser, administrator, investor, commodity pool operator, underwriter, distributor, transfer agent, insurance company, investment banker, research provider, market maker, trader, lender, agent or principal, and may have direct and indirect interests in securities, commodities, currencies, derivatives and other instruments in which the Funds may directly or indirectly invest. Thus, it is likely that the Funds will have business relationships with and will invest in, engage in transactions with, make voting decisions with respect to, or obtain services from entities with which the Adviser and/or an Affiliate has developed or is trying to develop business relationships or in which the Adviser and/or an Affiliate has significant investments or other interests. For example, the Adviser may have an incentive to hire as a Sub-Adviser or other service provider an entity with which the Adviser or one or more Affiliates have, or would like to have, significant or other business dealings or arrangements. In addition, when Affiliates act in various commercial capacities in relation to the Funds, the Affiliates may take commercial steps in their own interests, which may have an adverse effect on the Funds.
Certain Conflicts Related to the Use of Sub-Advisers
The Adviser is subject to certain conflicts of interest in connection with recommending the appointment and continued service of Sub-Advisers. Since the Adviser pays fees to the Sub-Advisers from the advisory fees that it earns from the Funds, any increase or decrease in the sub-advisory fees negotiated with proposed or current Sub-Advisers will result in a corresponding decrease or increase, respectively, in the amount of the advisory fees retained by the Adviser. If the Adviser is affiliated with a Sub-Adviser, the Adviser will benefit not only from the net advisory fee the Adviser retains, but also from the sub-advisory fee paid by the Adviser to the affiliated Sub-Adviser. The Adviser or its Affiliates also may have distribution relationships with certain Sub-Advisers or their affiliates under which the Sub-Advisers or their affiliates distribute or support the distribution of investment products issued or sold by the Adviser or its Affiliates, which could financially benefit the Adviser and its Affiliates or provide an incentive to the Adviser in selecting one Sub-Adviser over another or a disincentive for the Adviser to recommend the termination of such Sub-Advisers. In addition, the Adviser’s and/or its Affiliates’ other existing or potential business relationships (e.g., distribution, sub-administration, or custody arrangements), including with Sub-Advisers and/or their affiliates, or other financial or personal relationships or investments or other interests, could influence the Adviser’s selection and retention or termination of Sub-Advisers as well as sub-advisory or other fee negotiations.
The Adviser may allocate a Fund's assets among multiple Sub-Advisers. While the Adviser seeks to allocate a Fund's assets among the Fund's Sub-Advisers in a manner that it believes is consistent with achieving the Fund's investment objective(s), the Adviser is subject to conflicts of interest in allocating the Fund's assets among Sub-Advisers, including affiliated Sub-Advisers, if any, because the Adviser pays different fees to the Sub-Advisers and due to other factors that could impact the Adviser’s and/or its Affiliates’ revenues and/or profits.
The aggregation of assets of multiple Funds or other funds or accounts for purposes of calculating breakpoints in sub-advisory fees may create an incentive for the Adviser to select Sub-Advisers where the selection may serve to lower a sub-advisory fee and possibly increase the advisory fee retained by the Adviser or may provide a disincentive for the Adviser to recommend the termination of a Sub-Adviser from a Fund if the termination may cause the sub-advisory fee payable by the Adviser to increase on a Fund or other fund or account that aggregates its assets with the Fund. The aggregation of assets, or the potential to aggregate assets, also may influence the Adviser’s and/or its Affiliates’ sub-advisory or other fee negotiations.
The Adviser is a fiduciary for the shareholders of the Funds and must put their interests ahead of its own interests (or the interests of its Affiliates). When recommending the appointment or continued service of a Sub-Adviser, consistent with its fiduciary duties, the Adviser relies primarily on the qualitative and quantitative factors described in detail in this Prospectus.
Furthermore, the range of activities, services, and interests of a Sub-Adviser may give rise to actual, potential and/or perceived conflicts of interest that could disadvantage the Fund that it sub-advises and the Fund's shareholders. In addition, a Sub-Adviser’s portfolio managers may manage multiple funds and accounts for multiple clients. In addition to one or more Funds, these funds and accounts may include, for example, other mutual funds, separate accounts, collective trusts, and offshore funds. Managing multiple funds and accounts may give rise to actual or potential conflicts of interest, including, for example, conflicts among investment strategies, conflicts in the allocation of limited investment opportunities, and conflicts in the aggregation and allocation of securities trades. In addition, a Sub-Adviser’s portfolio managers may manage or advise funds or accounts with different fee rates and/or fee structures, including performance-based fee arrangements. Differences in fee arrangements may create an incentive for a portfolio manager to favor higher-fee funds or accounts. Each Sub-Adviser has adopted practices, policies and procedures that are intended to identify, monitor, and mitigate conflicts of interest. There is no assurance, however, that a Sub-Adviser’s practices, policies and procedures will be effective, and a Sub-Adviser’s practices, policies and procedures also may limit the investment activities of the
Management of the Funds 125
Fund that it sub-advises and affect the Fund's performance. Please see the Funds' Statement of Additional Information for a further discussion of Sub-Adviser conflicts of interest.
Certain Conflicts Related to the Funds of Funds Structure
The Adviser’s selection of Underlying ETFs may have a positive or negative impact on its (or its Affiliates’) revenues and/or profits. The Adviser’s and/or its Affiliates’ other existing or potential business relationships (e.g., distribution, sub-administration, or custody arrangements), including with investment advisers to Underlying ETFs, or other financial or personal relationships, could influence the Adviser’s selection of Underlying ETFs. Consistent with its fiduciary duties, the Adviser seeks to implement each Fund’s investment program in a manner that is in the best interest of that Fund and that is consistent with its investment objective, policies, and strategies.
Sales Incentives and Certain Related Conflicts Arising from the Adviser’s and its Affiliates’ Financial and Other Relationships with Financial Intermediaries
Sales incentives and certain related conflicts arising from the Adviser’s and its Affiliates’ financial and other relationships with financial intermediaries are described in the sections entitled “Payments to Broker-Dealers and Other Financial Intermediaries” and “Compensation to Financial Intermediaries.”
126 Management of the Funds
5. Investing in the Funds
Choosing a Share Class
1290 Funds consist of the following four classes of shares of the Funds: Class A, Class T, Class I and Class R shares. The Funds are not designed for market-timers (see the section entitled “Buying, selling, exchanging and converting shares — Purchase and Redemption Restrictions on Market-Timers and Active Traders”). Each class of shares has different costs associated with buying, selling and holding fund shares. Your broker or other financial professional can assist you in selecting which class of shares best meets your needs based on such factors as the size of your investment and the length of time you intend to hold your shares. All share classes are currently not offered for sale in all states.
The table below summarizes the key features of each class of shares. They are described in more detail below. The Funds currently do not offer Class T shares.
Share Classes at a Glance 
 
Class A
Class T
Class I
Class R
Availability
Generally available
through financial
intermediaries.
Generally available
through financial
intermediaries.
Limited to certain
investors, including:
• Certain
Institutional
investors.
• Certain
employer-sponsored
retirement plans.
• Participants in
certain programs
sponsored by the
Adviser or its
affiliates or other
financial
intermediaries.
• Life insurance
company separate
accounts using the
investment to
fund benefits for
variable annuity
contracts for
which the Funds
are an investment
option.
• Certain employees
of the Adviser or
its affiliates.
Available only to
certain
employer-sponsored
retirement plans.
Corporate
retirement accounts
such as 401(K) and
403(b) plans.
Investing in the Funds 127
 
Class A
Class T
Class I
Class R
Minimum
Investment
$1,000 for all
accounts except:
• $500 for certain
fee-based
programs.
• $500, if
establishing an
Automatic Bank
Draft Plan.
• $250 minimum for
purchases by
accounts through
eligible financial
intermediary
platforms that
have entered into
selling or service
agreements with
the Distributor
and that are
eligible to
purchase Class A
shares without a
sales charge.
• No minimums for
certain
employer-sponsored
retirement plans
and certain wrap
fee based
programs.
$1,000 for all
accounts except:
• $500 for certain
fee-based
programs.
• $500, if
establishing an
Automatic Bank
Draft Plan.
• No minimums for
certain
employer-sponsored
retirement plans
and certain wrap
fee based
programs.
• $1,000,000 for
certain institutions
and individuals.
• $1,000 for certain
employees (or
their immediate
family members)
of Equitable
Holdings, Inc. or
its subsidiaries.
• Class I Shares are
available to clients
of registered
investment
advisers who have
$250,000 invested
in the Fund.
• No minimum
investment for a
wrap account
client of an eligible
broker-dealer or a
client of a
fee-based planner
that is unaffiliated
with a
broker-dealer, or a
client of an
investment
adviser, trustee,
administrator or
institution acting
in a similar
capacity that
invests in a Fund
through a
retirement plan
where the
administrator or
service provider of
such retirement
plan has entered
into a services
agreement with
the Fund’s
distributor and/or
investment
adviser.
No minimum.
Initial Sales
Charge?
Yes. Payable at the
time of purchase.
Lower sales charges
are available for
larger investments.
Yes. Payable at the
time of purchase.
No. Entire purchase
price is invested in
shares of the Fund.
No. Entire purchase
price is invested in
shares of the Fund.
128 Investing in the Funds
 
Class A
Class T
Class I
Class R
Contingent
Deferred Sales
Charge (“CDSC”)?
Yes. (On shares
purchased without
an initial sales
charge and
redeemed within 12
months of
purchase.)
No.
No.
No.
Distribution and
Service (12b-1)
Fees?
Yes. 0.25%
distribution and
service fee.
Yes. 0.25%
distribution and
service fee.
No.
Yes. 0.50%
distribution and
service fee.
Advantage
Makes sense for
investors who are
eligible to have the
sales charge
reduced or
eliminated or who
have a long-term
investment horizon
because there are
low ongoing
distribution and
service (12b-1) fees.
Makes sense for
investors who are
making an
investment of
$250,000 or less
because of the
lower up-front sales
load or who have a
long-term
investment horizon
because there are
low ongoing
distribution and
service (12b-1) fees.
No up-front sales
charge so you start
off owning more
shares. No
distribution or
service fees.
No up-front sales
charge so you start
off owning more
shares.
Disadvantage
You pay a sales
charge up-front,
and therefore you
start off owning
fewer shares.
You pay a sales
charge up-front,
and therefore you
start off owning
fewer shares.
Limited availability.
You pay ongoing
distribution and
service (12b-1) fees
each year you own
Class R Shares,
which means that
over the long term
you can expect
higher total fees per
share than Class A
Shares and, as a
result, lower total
performance.
Investing in the Funds 129
6. How sales charges are calculated
Class A Shares
The price that you pay when you buy Class A shares (the “offering price”) is their net asset value plus a sales charge (sometimes called a “front-end sales charge”), which varies depending upon the size of your purchase. No initial sales charge applies to Class A shares you receive through reinvestment of dividends or other distributions. 
Class A Sales Charge for 1290 Essex Small Cap Growth Fund, 1290 GAMCO Small/Mid Cap Value Fund, 1290
SmartBeta Equity Fund, and 1290 Multi-Alternative Strategies Fund
Your Investment*
As a % of
Offering Price
As a % of
Your Investment
Dealer Discount or
Agency Fee as a %
of Offering Price**
$0 to $49,999
5.50%
5.82%
5.00%
$50,000 to $99,999
4.75%
4.99%
4.25%
$100,000 to $249,999
3.75%
3.90%
3.25%
$250,000 to $499,999
2.75%
2.83%
2.50%
$500,000 to $999,999
2.00%
2.04%
1.75%
$1,000,000 and up
None
None
1.00% of the first $2.99
million;
0.75% of amounts from
$3-4.99 million;
0.50% of amounts in excess
of $5 million
 
Class A Sales Charge for 1290 High Yield Bond Fund, 1290 Diversified Bond Fund and 1290 Loomis Sayles
Multi-Asset Income Fund
Your Investment*
As a % of
Offering Price
As a % of
Your Investment
Dealer Discount or
Agency Fee as a %
of Offering Price**
$0 to $99,999
4.50%
4.71%
4.00%
$100,000 to $249,999
3.50%
3.63%
3.00%
$250,000 to $499,999
2.50%
2.56%
2.25%
$500,000 to $999,999
1.75%
1.78%
1.50%
$1,000,000 and up
None
None
1.00% of the first $2.99
million;
0.75% of amounts from
$3-4.99 million;
0.50% of amounts in excess
of $5 million
*
In determining the amount of your investment and the applicable sales charge, we will include all shares you are currently purchasing in all of the Funds. For more information on reducing or eliminating sales charges, please see “Ways to Reduce or Eliminate Sales Charges.”
**
The distributor will compensate dealers in connection with purchases of Class A shares. From time to time, the distributor may hold special promotions for specified periods during which the distributor may reallow dealers up to the full sales charges shown above. In addition, the distributor may provide to all qualifying dealers, from its own profits and resources, additional compensation, as described below in the section entitled “Compensation to Financial Intermediaries.”
Class A Contingent Deferred Sales Charge.  Class A shares may be subject to a 1.00% CDSC if they are purchased without an initial sales charge and redeemed within a 12-month “holding period” measured from the beginning of the calendar month in which they were purchased. That sales charge will be calculated on the lesser of the original net asset value of the redeemed shares at the time of purchase or the aggregate net asset value of the redeemed shares at the time of redemption.
Class A shares are also subject to a distribution and service fee of 0.25% per year.
130 How sales charges are calculated
Class T Shares
The price that you pay when you buy Class T shares (the “offering price”) is their net asset value plus a sales charge (sometimes called a “front-end sales charge”), which varies depending on the size of your purchase. Class T shares are also subject to a distribution and service fee of 0.25% per year. No initial sales charge applies to Class T shares you receive through reinvestment of dividends or other distributions. 
Class T Sales Charge for each Fund
Your Investment
As a % of
Offering Price
As a % of
Your Investment
Dealer Discount or
Agency Fee as a %
of Offering Price
$0-$249,999
2.50%
2.56%
2.50%
$250,000-$499,999
2.00%
2.04%
2.00%
$500,000-$999,999
1.50%
1.52%
1.50%
$1,000,000 and up
1.00%
1.01%
1.00%
Class I Shares
Investors who purchase Class I shares do not pay sales charges. The ongoing expenses for Class I shares are the lowest of all the classes because there are no ongoing distribution and service (12b-1) fees. Class I shares are sold at net asset value and have no sales charge. The minimum investment amount for purchasing Class I shares generally is $1 million. Only specific types of investors can purchase Class I shares. You may be eligible to purchase Class I shares if you:
•  Are a corporation, bank, savings institution, trust company, insurance company, pension fund, employee benefit plan, professional firm, trust, estate or educational, religious or charitable organization;
•  Are an investment company registered under the 1940 Act (not subject to $1 million minimum investment amount);
•  Are an employee of Equitable Holdings, Inc. or its subsidiaries or an immediate family member of such employee (subject to $1,000 minimum investment amount);
•  Are a wrap account client of an eligible broker-dealer or a client of a fee-based planner that is unaffiliated with a broker/ dealer (not subject to $1 million minimum investment amount);
•  Are a present or former trustee of 1290 Funds or a spouse or minor child of any such trustee or any trust, Individual Retirement Account (“IRA”) or retirement plan account for the benefit of any such person or relative or the estate of any such person or relative (not subject to $1 million minimum investment amount); or
•  Are a financial institutional buyer.
Class R Shares
Class R Shares are available only to certain employer-sponsored retirement plans, including corporate retirement accounts such as 401(k) and 403(b) plans. For this purpose, employer-sponsored retirement plans do not include SEP IRAs, SIMPLE IRAs or SARSEPs. If you buy Class R Shares, you will pay neither an initial sales charge nor a CDSC. However, Class R Shares are subject to a distribution and service fee of 0.50% per year. Because these fees are paid out of the Fund’s assets on an ongoing basis, over time these fees increase the cost of your investment and may cost you more than paying other types of sales charges.
The distributor currently pays the annual Class R Shares distribution and service fee to dealers as an ongoing concession and as a shareholder servicing fee, respectively, on a monthly basis.
Compensation to Financial Intermediaries
ALPS Distributors, Inc. (“ALPS”) serves as the distributor for the Class A, Class T, Class I and Class R shares of the Funds offered by this Prospectus. ALPS is registered as a broker-dealer under the Securities Exchange Act of 1934, as amended, and is a member of the Financial Industry Regulatory Authority (“FINRA”). 
1290 Funds has adopted Distribution Plans pursuant to Rule 12b-1 under the 1940 Act for Class A, Class T and Class R shares. Under the Distribution Plans, each Fund is authorized to pay ALPS a maximum annual fee of 0.25%, 0.25% and 0.50% of each Fund’s average daily net assets attributable to Class A, Class T and Class R shares, respectively. These fees are paid to
How sales charges are calculated 131
compensate ALPS for rendering services and bearing expenses in connection with activities primarily intended to result in the sale of shares and/or providing services to shareholders of each class. Activities and services contemplated under the Distribution Plans include printing and mailing of fund prospectuses, statements of additional information (including any supplements thereto) and shareholder reports, compensation to financial intermediaries and broker-dealers, holding seminars and sales meetings with wholesale and retail sales personnel assigned to promote the distribution of shares and maintaining shareholder accounts. Because the fees authorized under the Distribution Plans are paid out of the Funds’ assets on an ongoing basis, over time, the fees for Class A, Class T and Class R shares will increase your cost of investing and may cost you more than other types of charges.
In addition to the sales charges paid by investors and the distribution and service fees paid by the Funds, the distributor or the Adviser (and their respective affiliates) make payments out of their own resources to provide additional compensation to selling brokers and other persons, including affiliates, who sell shares of the Funds (collectively, “Brokers”) and/or provide certain services. Such payments, which are sometimes referred to as “revenue sharing,” may be calculated by reference to the gross sales price of shares sold by such persons, the net asset value of shares held by the customers of such persons, the number of accounts that invest in the Funds serviced by such persons, or otherwise.
The additional payments to such Brokers are negotiated based on a number of factors including, but not limited to, reputation in the industry, ability to attract and retain assets, target markets, customer relationships and quality of service. No one factor is determinative of the type or amount of additional compensation to be provided. The amount of these payments, as determined from time to time by the Adviser (or any of its affiliates) or the distributor in its sole discretion, may be different for different Brokers. These additional payments are made by the Adviser, the distributor or their respective affiliates and do not increase the amount paid by you or the Funds as shown under the heading “Fees and Expenses of the Fund” in the Fund Summaries.
Such payments are intended to provide additional compensation to Brokers for various services provided with respect to shares of the Funds, including, without limitation, providing periodic and ongoing education and training of Broker personnel regarding the Funds; disseminating to Broker personnel information and product marketing materials regarding the Funds; explaining to investors the features and characteristics of the Funds; conducting due diligence regarding the Funds; providing reasonable access to sales meetings, sales representatives and management representatives of the Broker; granting reasonable access to the Broker’s financial advisors and consultants; and furnishing marketing support and other services. Additional compensation also may include non-cash compensation, financial assistance to Brokers in connection with conferences, seminars for the public and advertising campaigns, technical and systems support and reimbursement of ticket charges (fees that a Broker firm charges its representatives for effecting transactions in Fund shares) and other similar charges. The distributor, the Adviser or their respective affiliates may make other payments or allow other promotional incentives to Brokers to the extent permitted by SEC and FINRA rules and by other applicable laws and regulations.
In some instances, these incentives may be made available only to Brokers whose representatives have sold or may sell a significant number of shares. The Brokers receiving additional payments include those that may recommend that their clients consider or select a Fund of 1290 Funds for investment purposes, including those that may include one or more Funds of 1290 Funds on a “preferred” or “recommended” list of mutual funds. These payments create an incentive for a Broker firm or its representatives to recommend or offer shares of Funds of 1290 Funds to its customers over shares of other funds. In addition, these payments may result in greater access by the Adviser, the distributor or their respective affiliates to, without limitation, the Broker, its representatives, advisors and consultants and sales meetings, than other funds which do not make such payments or which make lower such payments.
In addition to the Broker compensation described above, the Funds, the Adviser (or any of its affiliates) and/or the distributor may pay fees to the Brokers and their affiliated persons for maintaining Fund share balances and/or for subaccounting, administrative or transaction processing services related to the maintenance of accounts for retirement and benefit plans and other omnibus accounts (“subaccounting fees”). Such subaccounting fees paid by the Funds would otherwise be paid to the Funds’ transfer agent and generally are designed to be equal to or less than the fees the Funds would pay to their transfer agent for similar services, but in certain circumstances the subaccounting fees may be higher due to differences in the services being provided or other factors. Because these subaccounting fees are directly related to the number of accounts and assets for which the Brokers provide services, the fees will increase with the success of the Brokers’ sales activities.
The Funds’ portfolio transactions are not used as a form of sales-related compensation to Brokers that promote or sell shares of the Funds and the promotion or sale of such shares is not considered as a factor in the selection of broker-dealers to execute the Funds’ portfolio transactions. The Adviser and the Sub-Advisers place each Fund’s portfolio transactions with broker-dealer firms based on the firm’s ability to provide the best net results from the transaction to the Fund. To the extent
132 How sales charges are calculated
that the Adviser or a Sub-Adviser determines that a Broker can provide a Fund with the best net results, the Adviser or the Sub-Adviser may place the Fund’s portfolio transactions with the Broker even though it sells or has sold shares of the Fund.
You can find further information in the 1290 Funds’ SAI about the payments made by the distributor, the Adviser, or their respective affiliates and the services provided by your Broker. You can also ask your Broker about any payments it receives from the distributor, the Adviser, or their respective affiliates (and any conflicts of interest that such payments may create) and any services your Broker provides, as well as about fees and/or commissions it charges. Your Broker may charge you fees or commissions in addition to those disclosed in this Prospectus. Brokers may categorize and disclose these arrangements to their clients and to members of the public in a manner different from the disclosures in this Prospectus and the 1290 Funds’ SAI.
How sales charges are calculated 133
7. Ways to reduce or eliminate sales charges
Ways to Reduce or Eliminate Sales Charges
You may qualify for a reduction or waiver of the sales charge on Class A shares. If you think you qualify for any of the sales charge waivers described below, you or your financial advisor may need to notify and/or provide certain documentation to us. You or your financial advisor also will need to notify us of the existence of other accounts in which there are holdings eligible to be aggregated to meet certain sales load breakpoints. Information you may need to provide to us includes:
•  Information or records regarding shares of the Funds held in all accounts at any financial intermediary;
•  Information or records regarding shares of the Funds held in any account at any financial intermediary by immediate family of the shareholder; and/or
•  Any other information that may be necessary for us to determine your eligibility for a reduction or waiver of a sales charge.
Reducing Sales Charges — Class A Shares Only
There are a number of ways you can lower your sales charges on Class A shares, including:
•  Letter of Intent — You may be entitled to a reduced sales charge if you execute a Letter of Intent to purchase Class A shares at the public offering price within a period of 13 months. Your discount will be determined based on the schedule in the table that appears above in the section entitled “How Sales Charges are Calculated — Class A Shares.” The minimum initial investment under a Letter of Intent is 5% of the amount stated in the Letter of Intent. Class A shares purchased with the first 5% of such amount will be held in escrow (while remaining registered in your name) to secure payment of the higher sales charge that would apply to the shares actually purchased if the full amount stated is not purchased, and such escrowed shares will be involuntarily redeemed to pay the additional sales charge, if necessary. When the full amount has been purchased, the escrow will be released. If you wish to enter into a Letter of Intent, you should complete the appropriate portion of the new account application. At your request, purchases made during the previous 90 days may be included.
•  Rights of Accumulation — You are entitled to a reduced sales charge on additional purchases of Class A shares of a Fund if the value of your existing aggregate holdings at the time of the additional purchase, calculated at the then applicable net asset value per share or the initial purchase price, plus any additional investments, less any redemptions, whichever is higher, plus the amount of the additional purchase equals $50,000 or more. Your discount will be determined based on the schedule in the section entitled “How Sales Charges are Calculated — Class A Shares.” For purposes of determining the discount, we will aggregate holdings of Fund shares of your spouse, immediate family or accounts you control, whether as a single investor or trustee, provided that you notify us of the applicable accounts at the time of your additional investment by providing us with appropriate documentation, including the account numbers for all accounts that you are seeking to aggregate.
Eliminating Sales Charges and the CDSC — Class A Shares Only
Class A shares may be offered without a front-end sales charge or a CDSC to the following individuals and institutions:
•  Any government entity that is prohibited from paying a sales charge or commission to purchase mutual fund shares;
•  Representatives and employees, or their immediate family members, of broker-dealers and other intermediaries that have entered into selling or service arrangements with the distributor;
•  Financial institutions and other financial institutions’ trust departments for funds over which they exercise exclusive discretionary investment authority and which are held in fiduciary, agency, advisory, custodial or similar capacity;
•  Direct referrals by the Adviser’s employees;
•  Clients of fee-based/fee-only financial advisors; and
•  Purchases by accounts through eligible financial intermediary platforms that have entered into selling or service agreements with the Distributor.*
* The Distributor has entered into an agreement with LPL Financial’s Mutual Fund Only Platform.
134 Ways to reduce or eliminate sales charges
The CDSC will not apply to Class A shares for which the selling dealer is not permitted to receive a sales load or redemption fee imposed on a shareholder with whom such dealer has a fiduciary relationship in accordance with provisions of ERISA and regulations thereunder (for example, a broker providing brokerage services to a retirement plan), provided that the dealer agrees to the following reimbursement arrangement with the distributor: in the event of a redemption of Class A shares sold without a front-end sales load within 12 months of purchase, the selling dealer will reimburse the distributor for the amount of commission paid, less the amount of the distribution fee with respect to such shares. If the dealer agrees to this reimbursement arrangement, no CDSC will be imposed with respect to Class A shares purchased for $1,000,000 or more. Currently, each dealer has agreed to this reimbursement arrangement.
Eliminating the CDSC
As long as we are notified at the time you sell, the CDSC for Class A shares also may generally be eliminated in the following cases:
•  The liquidation of a shareholder’s account if the aggregate net asset value of shares held in the account is less than the required minimum;
•  Redemptions through a systematic withdrawal plan;
•  Redemptions of shares of a shareholder (including a registered joint owner) who has died or has become totally disabled (as evidenced by a determination by the Social Security Administration);
•  Redemptions made pursuant to any IRA systematic withdrawal based on the shareholder’s life expectancy in accordance with the requirements of the Code, including substantially equal periodic payments described in Code section 72 prior to age 59½ and required minimum distributions after age 72; or
•  Required minimum distributions from an IRA.
•  Shares or amounts representing increases in the value of an account above the net cost of the investment due to increases in the net asset value per share.
•  Shares acquired by exchange from any Fund of the 1290 Funds where the exchanged shares would not have been subject to a CDSC upon redemption.
•  Exchanges to purchase shares of another Fund of the 1290 Funds (although a CDSC will be imposed on shares (when redeemed) of the acquired fund purchased by exchange of shares subject to a CDSC).
Reinstatement Privilege
If you redeem Class A or Class T shares of a Fund on which you paid an initial sales charge or are charged a CDSC upon redemption, you will be eligible for a reinstatement privilege if you reinvest the proceeds in shares of the same class of the same or another Fund of 1290 Funds (equal to all or a portion of the redemption amount) within 60 days of redemption. This right may be exercised once a year and within 60 days of the redemption, provided that the share class of the Fund is currently open to new investors or the shareholder has a current account in that closed Fund. Shares will be purchased at the net asset value calculated at the close of trading on the day the request is received. To exercise this privilege, the Fund must receive written notification from the shareholder of record or the financial intermediary of record, at the time of purchase. Investors should consult a tax adviser concerning the tax consequences of exercising this reinstatement privilege.
If you think you may be eligible for a sales charge elimination or reduction, contact your financial professional or 1290 Funds. For more information about sales charges, reductions, and waivers, see the SAI or visit the 1290 Funds’ website at www.1290Funds.com, which includes hyperlinks to facilitate access to this information.
Ways to reduce or eliminate sales charges 135
8. It’s easy to open an account
To open an account with 1290 Funds
1. Read the Prospectus carefully.
2. Determine how much you wish to invest. The following chart shows the investment minimums for various types of accounts. 
Type of Account
Minimum to
Open an
Account*
Minimum for
Subsequent
Investments*
Individual Retail Accounts
$1,000
$50
Individual Retirement Accounts (IRAs)
$500
$50
Automatic Bank Draft Plan**
$500
$50
Accounts through eligible financial intermediary platforms that have entered into selling or service agreements with
the Distributor and that are eligible to purchase Class A shares without a sales charge.
$250
$50
Accounts established in a wrap program with which 1290 Funds, the Adviser or the distributor has an agreement.
$500***
$50***
Corporate retirement accounts, such as 401(k) and 403(b) plans
No minimum
requirement.
No minimum
requirement.
*
Does not apply to Class I shares.
**
The Funds offer an automatic bank draft plan with a minimum initial investment of $500 through which a Fund will, following the initial investment, deduct $50 or more on a monthly basis from the investor’s demand deposit account to invest directly in the Funds’ Class A or Class T shares.
***
No minimum requirement for certain wrap fee based programs.
3. (a) Call your broker or other financial professional who can assist you in all the steps necessary to open an account; or
(b) Complete the appropriate part of the account application, carefully following the instructions. If you have any questions, please call your financial professional or 1290 Funds at 1-888-310-0416. For more information on 1290 Funds investment programs, refer to the section entitled “Additional Information — Additional Investor Services” in the Prospectus.
4. Use the following sections as your guide for purchasing shares.
1290 Funds generally will not permit prospective investors with non-U.S. addresses to establish accounts. U.S. citizens with APO/FPO addresses or addresses in the United States (including its territories) and resident aliens with U.S. addresses are permitted to establish accounts with 1290 Funds.
To conform to regulations under the USA PATRIOT Act of 2001, 1290 Funds is required to obtain, verify, and record information that identifies each person who opens an account. A new account application includes your name, street address, date of birth and other identification information. The regulations require completion of this information before an account is opened, and you may also be requested to provide other identification documents. In addition, the Funds may confirm your identity through the use of identity verification reports provided by consumer reporting agencies. Your personal information will be treated with the utmost confidentiality. If you fail to provide the required information or provide inaccurate information, this may lead to a delay in the processing of your account application and investment. If the Funds cannot complete the identification process, your investment and the application may be returned.
A Fund will deduct a $25 annual fee from accounts with a balance of less than $1,000. This does not apply to Automatic Bank Draft Plan Accounts or IRAs.
Each Fund reserves the right to close any Fund account whose balance drops to $500 or less due to redemption activity. If an account is closed, its shares will be sold at the NAV on the day the account is closed. A shareholder will be given at least 60 days’ notice before a Fund closes an account with a balance of $500 or less so that the shareholder has an opportunity to increase the account balance.
136 It’s easy to open an account
9. Buying, selling, exchanging and converting shares
Buying Shares 
Opening an Account
Adding to an Account
Through Your Broker or other Financial Professional
Call your broker or other financial professional. Your broker
or other financial professional can assist you in all the steps
necessary to buy shares.
Call your broker or other financial professional.
By Telephone
Call 1-888-310-0416 and speak with one of our
representatives. 1290 Funds has the right to reject any
telephone request for any reason.
By Mail
Payment for shares must be made with a check in U.S.
dollars drawn from a U.S. financial institution, payable to
“1290 Funds.” Cash, third party checks, “starter” checks,
traveler’s checks, credit cards, credit card checks or money
orders will not be accepted.
Fill out detachable investment slip from an account
statement. If no slip is available, include with the check a
letter specifying the fund name, your class of shares, your
account number and the registered account name(s).
Mail the check with your completed investment slip or letter
to:
By Regular mail:
1290 Funds
PO Box 219166
Kansas City, MO 64121-9166
By Overnight Mail:
1290 Funds
c/o SS&C GIDS, Inc.
430 W. 7th Street, Suite 219166
Kansas City, MO 64105-1407
Automatic Investing Through Automatic Clearing House (“ACH”)
Please call 1-888-310-0416 and request a Shareholder
Maintenance Form or download from the 1290 Funds
website. Use the form to add ACH instructions to your
account. A medallion guarantee may be required to add this
privilege.
Your bank account may be debited monthly for automatic
investment into one or more of the funds for each class. Not
available for Class I shares.
Buying, selling, exchanging and converting shares 137
Selling Shares
The Funds typically expect to meet redemption requests by paying out proceeds from cash or cash equivalent portfolio holdings, or by selling portfolio holdings. In stressed market conditions, redemption methods may include redeeming in kind. 
Through Your Broker or other Financial Professional
• Call your broker or other financial professional. Your broker or other financial professional can assist you in all the steps
necessary to sell shares. Your broker or financial professional may charge you for its services.
By Mail
• Write a letter to request a redemption specifying the name of the fund, the class of shares, your account number, the
exact registered account name(s), the number of shares or the dollar amount to be redeemed and the method by which
you wish to receive your proceeds. Additional materials may be required (see section entitled “Selling Shares in Writing”
and, in particular, the information regarding medallion guarantees).
• The request must be signed by all of the owners of the shares including the capacity in which they are signing, if
appropriate. Mail your request to:
  1290 Funds
  PO Box 219166
  Kansas City, MO 64121-9166
• Your proceeds (less any applicable CDSC) will be delivered by the method you choose. If you choose to have your
proceeds delivered by mail, they will generally be mailed to you on the business day after the request is received. You
may also choose to redeem by wire or via the ACH system to your bank (see below). Your bank may charge you a fee.
• The minimum amount that may be redeemed by check is $500.
By Wire
• Fill out the “Telephone Exchange Privilege and/or Telephone Redemption Privilege” and “Bank Account of Record”
sections on your account application.
• Call 1-888-310-0416, visit www.1290Funds.com or indicate in your redemption request letter that you wish to have your
proceeds wired to your bank.
• If you submit a written request, your proceeds may be wired to the bank currently on file. If written instructions are to
send the wire to any other bank, or redemption proceeds are greater than $50,000, a medallion guarantee is required.
On a telephone request, your proceeds may be wired only to a bank previously designated by you in writing. To change
the name of the single designated bank account to receive wire redemption proceeds, you must send a written request
with signature(s) guaranteed to 1290 Funds.
• Proceeds (less any applicable CDSC) will generally be wired on the next business day. A wire fee (currently $15) will be
deducted from the proceeds. Your bank may charge you a fee.
• The minimum amount that may be redeemed by wire is $1,000.
By Systematic Withdrawal Plan
• Please refer to the section entitled “Additional Investor Services” or call 1-888-310-0416 or your financial professional for
more information.
• Because withdrawal payments may have tax consequences, you should consult your tax adviser before establishing such a
plan.
138 Buying, selling, exchanging and converting shares
By Telephone
• If you have authorized this service, you may redeem your shares by telephone by calling 1-888-310-0416.
• If you make a telephone redemption request, you must furnish the name and address of record of the registered owner,
the account number and taxpayer identification number (“TIN”), the amount to be redeemed, and the name of the per-
son making the request.
• Checks for telephone redemptions will be issued only to the registered shareowner(s) and mailed to the last address of
record or exchanged into another Fund of 1290 Funds. All telephone redemption instructions are recorded and are
limited to requests of $50,000 or less. If you have previously linked your bank account to your Fund account, you can
have the proceeds sent via the ACH system to your bank.
• Proceeds (less any applicable CDSC) will generally be sent on the next business day. Your bank may charge you a fee.
• The minimum amount that may be redeemed by check is $500.
Participate in the Bank Purchase and Redemption Plan
• You may initiate an ACH Purchase or Redemption directly to a bank account when you have established proper
instructions, including all applicable bank information, on the account. Your bank may charge you a fee.
Selling Shares in Writing
To redeem your shares in writing, all owners of the shares must sign the redemption request in the exact names in which the shares are registered and indicate any special capacity in which they are signing. If a written request to sell is required, a letter of instruction signed by the authorized owner is necessary. In certain situations a medallion guarantee or additional documentation may be required.
A Medallion Guarantee is necessary if:
•  Total redemption proceeds exceed $50,000;
•  A proceeds check for any amount is mailed to an address other than the address of record or not sent to the registered owner(s);
•  Wire instructions indicate that wire proceeds should be sent to a bank other than the bank currently on file; or
•  Your address has changed within the past 30 days.
A Medallion Guarantee can be obtained from one of the following sources:
•  A financial professional or securities dealer;
•  A federal savings bank, cooperative or other type of bank;
•  A savings and loan or other thrift institution;
•  A credit union;
•  A securities exchange or clearing agency.
The table shows account types for which additional documentation may be necessary. Please call your financial professional or 1290 Funds regarding requirements for other account types. 
Seller (Account Type)
Requirements for Written Requests
Individual, joint, sole proprietorship, Uniform Transfers to
Minors Act / Uniform Gifts to Minors Act
• The signatures on the letter must include all persons
authorized to sign, including title, if applicable.
• Medallion Guarantee, if applicable (see above).
Corporate or association accounts
• The signatures on the letter must include all trustees
authorized to sign, including title.
Owners or trustees of trust accounts
• The signatures on the letter must include all trustees
authorized to sign, including title.
Buying, selling, exchanging and converting shares 139
Seller (Account Type)
Requirements for Written Requests
 
• If the names of the trustees are not registered on the
account, include a copy of the trust document certified
within the past 60 days.
• Medallion Guarantee, if applicable (see above).
Power of Attorney (POA)
• The signatures on the letter must include the attorney-
in-fact, indicating such title.
• Medallion guarantee, if applicable (see above).
• Certified copy of the POA document stating it is still in full
force and effect, specifying the exact fund and account
number, and certified within 60 days of receipt of
instructions.*
Qualified retirement benefit plans
• The signatures on the letter must include all trustees
authorized to sign, including title.
• Medallion Guarantee, if applicable (see above).
IRAs
• Additional documentation and distribution forms required.
*
Certification may be made on court documents by the court, usually certified by the clerk of court. POA certification may be made by a commercial bank, broker/member of a domestic stock exchange or practicing attorney.
1290 Funds may suspend the right of redemption for any period or postpone payment for more than seven days when the New York Stock Exchange is closed (other than a weekend or holiday), or when trading is restricted by the SEC or the SEC declares that an emergency exists. Redemptions may also be suspended and payments may be postponed for more than seven days during other periods permitted by the SEC. A Fund may pay the redemption price in whole or part by a distribution in kind of readily marketable securities in lieu of cash or may take up to seven days to pay a redemption request in order to raise capital, when it is detrimental for the Fund to make cash payments as determined in the sole discretion of the Adviser. Securities distributed in kind are subject to market risk until sold and shareholders may incur brokerage or other costs and taxable capital gains when converting those securities to cash.
Exchanging and Converting Shares
How to Exchange Shares
Shares of any class of each Fund generally may be exchanged for shares of the same class of any other Fund without paying a sales charge or a CDSC. Shares of any class of each Fund also may be acquired in exchange for shares of the same class of any other Fund without paying a sales charge or a CDSC. You may make exchanges only between identically registered accounts (name(s), address, and TIN).
If an exchange results in opening a new account, you are subject to the applicable minimum investment requirement. All exchanges also are subject to the eligibility requirements of the Fund into which you are exchanging. The exchange privilege may be exercised only in those states where shares of a Fund may be legally sold. The Funds may also discontinue or modify the exchange privilege on a prospective basis at any time upon notice to shareholders in accordance with applicable law. For federal income tax purposes, an exchange of Fund shares for shares of another Fund is treated as a sale of the former on which gain or loss may be recognized.
How to Convert Shares
Shares of one class of a Fund may be converted into shares of another class of the same Fund, provided you meet the eligibility requirements for investing in the share class into which you are converting. A share class conversion has no effect on the dollar value of your investment in a Fund at the time of the conversion. However, the number of shares you own after the conversion may be greater than or less than the number of shares you owned before the conversion, depending on the net asset values of the two share classes. A conversion between share classes of the same Fund is a nontaxable event. Shares subject to a CDSC at the time of the requested conversion are not eligible for conversion. Each Fund reserves the right to refuse any conversion request.
If a shareholder no longer meets the eligibility requirements for the shareholder’s current share class, a Fund may, upon notice to the shareholder, convert the shareholder into a share class of the same Fund for which the shareholder is eligible. 
140 Buying, selling, exchanging and converting shares
Through Your Broker or other Financial Professional
Call your broker or other financial professional. Your broker or other financial professional can assist you in all the steps
necessary to exchange or convert shares. Your broker or financial professional may charge you for its services.
By Mail
Write a letter to request an exchange specifying the name of the fund from which you are exchanging, the registered
account name(s) and address, the account number, the dollar amount or number of shares to be exchanged and the fund
into which you are exchanging.
The request must be signed by all of the owners of the shares including the capacity in which they are signing, if
appropriate.
Mail your request to:
1290 Funds
PO Box 219166
Kansas City, MO 64121-9166
By Telephone
If you have authorized this service, you may exchange by telephone by calling 1-888-310-0416.
If you make a telephone exchange request, you must furnish the name of the fund from which you are exchanging, the
name and address of record of the registered owner, the account number and TIN, the dollar amount or number of shares
to be exchanged, the fund into which you are exchanging, and the name of the person making the request.
By Website
Log into your account portfolio and select “View Account” for the fund from which you would like to make the exchange.
On the next screen, choose “Fund Exchange.” Instructions on the following Exchange Request page will guide you through
the final process. Previously outlined exchange guidelines apply to any online exchanges.
Transactions Through Financial Intermediaries
The Funds have authorized one or more brokers to receive on their behalf purchase and redemption orders. Such brokers are authorized to designate other intermediaries to receive purchase and redemption orders on a Fund’s behalf. A Fund will be deemed to have received a purchase or redemption order when an authorized broker or, if applicable, a broker’s authorized designee, receives the order. Customer orders will be priced at a Fund’s net asset value next computed after they are received by an authorized broker or the broker’s authorized designee. Investors may be charged a fee if they effect transactions through an intermediary, broker or agent.
Restrictions on Buying, Selling and Exchanging Shares
Purchase and Exchange Restrictions
The Funds reserve the right to suspend or change the terms of purchasing or exchanging shares.
Purchase and Redemption Restrictions on Market-Timers and Active Traders
The Trust, on behalf of each Fund, believes that it is in the best interests of its long-term shareholders to discourage the frequent purchases and redemptions or exchanges (sometimes referred to collectively as “trading activity”) of Fund shares. If you intend to trade frequently and/or use market timing investment strategies, you should not purchase these Funds.
Frequent trading of Fund shares, including market timing and other program trading or short-term trading strategies, may be disruptive to the Funds. Excessive trading activity may adversely affect Fund performance and the interests of long-term shareholders by, among other things, requiring the Fund to maintain larger amounts of cash or to liquidate portfolio holdings at a disadvantageous time or price. For example, when market timing occurs, a Fund may have to sell its holdings to have the cash necessary to redeem the market timer’s shares. This can happen when it is not advantageous to sell any securities, so the Fund’s performance may be hurt. When large dollar amounts are involved, market timing can also make it difficult to use long-term investment strategies because a Fund cannot predict how much cash it will have to invest, and the Fund’s portfolio management team may have to allocate a significant amount of assets to cash and other short-term investments or sell investments, rather than maintaining investments selected to achieve the Fund’s investment objective. In addition, disruptive trading activity of Fund shares may impede efficient portfolio management and impose increased transaction costs, such as brokerage and tax costs, by requiring the portfolio manager to effect more frequent purchases and sales of portfolio securities. Similarly, a Fund may bear increased administrative costs as a result of the asset level and investment volatility that accompanies patterns of excessive or short-term trading.
Buying, selling, exchanging and converting shares 141
In addition, Funds that invest a significant portion of their assets in foreign securities tend to be subject to the risks associated with market timing and short-term trading strategies to a greater extent than funds that do not. Securities trading in overseas markets present time zone arbitrage opportunities when events affecting portfolio securities values occur after the close of the overseas market but prior to the close of the U.S. market. This short-term arbitrage activity can reduce the return received by long-term shareholders. The Funds will seek to minimize these opportunities by using fair value pricing, as described in “How fund shares are priced” below.
A Fund that invests in securities that are, or may be, restricted, unlisted, traded infrequently, thinly traded, or relatively illiquid also may be vulnerable to market timing and short-term trading strategies. Traders using such strategies may seek to take advantage of a possible differential between the last available market prices for one or more of those relatively illiquid securities that are used to calculate the value of the Fund’s shares and the latest indications of market values for those securities. For example, high yield securities may present opportunities for short-term trading strategies because the market for such securities may be less liquid than the market for higher quality bonds which could result in pricing inefficiencies. One of the objectives of the Trust’s fair value pricing procedures, as described in “How fund shares are priced” below, is to minimize the possibilities of this type of arbitrage; however, there can be no assurance that the Trust’s valuation procedures will be successful in eliminating it.
The Trust’s Board of Trustees has adopted certain policies and procedures discussed below to discourage what it considers to be disruptive trading activity. The Trust and the Funds discourage frequent trading of Fund shares by Fund shareholders and will not make special arrangements to accommodate such transactions in Fund shares. As a general matter, the Trust and each Fund reserve the right to reject any purchase or exchange that they believe, in their sole discretion is disruptive (or potentially disruptive) to the management of the Fund.
Through the Trust’s transfer agent, the Trust, the Adviser or their designees perform ongoing monitoring of shareholder trading in shares of the Funds in order to try and identify shareholder trading patterns that suggest an ongoing short-term or disruptive trading strategy. If shareholder trading patterns identified by the Trust, the Adviser or their designees through monitoring leads the Trust, the Adviser or their designees to reasonably conclude that such trading may be detrimental to a Fund, then the transfer agent, on behalf of the Trust and the Funds may, among other things, reject any specific purchase or exchange order and temporarily or permanently bar future purchases into the Fund. If a Fund rejects a shareholder’s purchase or exchange order, the shareholder will not be able to execute that transaction, and the Fund will not be responsible for any losses that the shareholder may suffer.
In considering a shareholder’s trading patterns, the Trust may consider, among other factors, the shareholder’s trading history both directly and, if known, through financial intermediaries, in a Fund and in another Fund of the Trust, or in accounts under common control or ownership. In order to reduce disruptive trading activity, the Trust, the Adviser or their designees may consider a number of factors, including monitoring the frequency of trading activity, and the size of purchases and exchanges in relation to portfolio assets in the Fund.
Frequent Trading Through Financial Intermediaries.  A Fund shareholder is subject to this policy whether the shareholder invests in the Fund directly or through a financial intermediary, which includes, but is not limited to, broker dealers, banks, trust companies, insurance company products (such as an annuity contract), investment advisers, or administrators or trustees of an IRS recognized tax deferred savings plan (such as a 401(k) retirement plan and a 529 college savings plan).
Some financial intermediaries maintain master accounts with a Fund on behalf of their customers (“omnibus accounts”). Certain accounts, such as omnibus accounts, include multiple investors and such accounts typically provide a Fund with net purchase or redemption and exchange requests on any given day where purchases, redemptions and exchanges of shares are netted against one another and the identity of individual purchasers, redeemers and exchangers whose orders are aggregated may not be known by the Fund. While the Trust, the Adviser or their designees monitor for market timing activity, they may be unable to identify such activities because the netting effect in omnibus and other types of intermediary accounts often makes it more difficult to locate and eliminate market timers from a Fund. The Trust, the Adviser or their designees will have the ability, pursuant to certain information sharing agreements with financial intermediaries, to request information from financial intermediaries concerning trades placed in omnibus accounts, in order to attempt to monitor trades that are placed by the underlying shareholders of these omnibus accounts. If the Trust, the Adviser and their designees identify omnibus account level trading patterns that have the potential to be detrimental to the Funds, they may, in their sole discretion, request from the financial intermediary information concerning the trading activity of its customers. Based upon their review of the information, if the Trust, the Adviser or their designees determine that the trading activity of any customer may be detrimental to the Funds, they may in their sole discretion, request the financial intermediary to, among other things, restrict or limit further trading in the Funds by that customer. Identification of market timers also may be limited by operational systems and technical limitations.
142 Buying, selling, exchanging and converting shares
The above policies and procedures with respect to frequent activity of Fund shares also apply to retirement plan participants.
The Trust generally does not consider trading activity by any “fund of funds” advised by the Adviser or EIM or trading activity associated with approved asset allocation programs to be disruptive trading activity.
The Trust’s policies and procedures seek to discourage what it considers to be disruptive trading activity. The Trust seeks to apply its policies and procedures to all shareholders uniformly. It should be recognized, however, that such procedures are subject to limitations:
•  There is no assurance that the methods described above will prevent market timing or other trading that may be deemed abusive. The Trust’s procedures do not eliminate the possibility that disruptive trading activity, including market timing, will occur or that Fund performance will be affected by such activity.
•  The design of such policies and procedures involves inherently subjective judgments, which the Trust, the Adviser or their designees seek to make in a fair and reasonable manner consistent with the interests of all shareholders.
•  The limits on the ability to monitor certain potentially disruptive trading activity means that some shareholders may be treated differently than others, resulting in the risk that some shareholders may be able to engage in frequent trading activity while others will bear the effect of that frequent trading activity.
Consistent with seeking to discourage potentially disruptive trading activity, the Adviser, or a designee thereof or the Trust also may, in its sole discretion and without further notice, change what it considers potentially disruptive trading activity and its monitoring procedures and thresholds, as well as change its procedures to restrict this activity.
Selling Restrictions
The table below describes restrictions in place on selling shares of any Fund described in this Prospectus. 
Restriction
Situation
• The Fund may suspend the right of redemption or
postpone payment for more than 7 days:
• When the New York Stock Exchange is closed (other than a
weekend/holiday).
• When trading is restricted by the SEC.
• When the SEC declares that an emergency exists.
• Any other period permitted by the SEC.
• Each Fund reserves the right to suspend account services
or refuse transaction requests:
• With a notice of dispute between registered owners.
• With suspicion/evidence of a fraudulent act.
• A Fund may pay the redemption price in whole or part by
a distribution in kind of readily marketable securities in lieu
of cash or may take up to 7 days to pay a redemption
request in order to raise capital:
• When it is detrimental for a fund to make cash payments
as determined in the sole discretion of the Adviser.
• Securities distributed in kind are subject to market risk until
sold, and shareholders may incur brokerage or other costs
and realize capital gains when converting those securities
to cash.
• A Fund may withhold redemption proceeds until the check
or funds have cleared:
• When redemptions are made within 10 calendar days of
purchase by check of the shares being redeemed.
Buying, selling, exchanging and converting shares 143
10. How fund shares are priced
“Net asset value” is the price of one share of a Fund without a sales charge, and is calculated each business day using the following formula: 
Net asset value =
Total market value of securities
+
Cash and other assets
-
Liabilities
Number of outstanding shares
The net asset value of Fund shares is determined according to this schedule:
•  A share’s net asset value is normally determined each day the New York Stock Exchange (“Exchange”) is open for trading as of 4:00 p.m. Eastern time. In the event of an emergency or other disruption in trading on the Exchange, a share’s price would still normally be determined as of 4:00 p.m. Eastern Time.
•  The price for purchasing or redeeming a share will be based upon the net asset value next calculated after an order is received and accepted by a Fund or its designated agent.
•  A Fund heavily invested in foreign securities may have net asset value changes on days when shares cannot be purchased or sold because foreign securities sometimes trade on days when a Fund’s shares are not priced.
Generally, portfolio securities are valued as follows:
Equity securities (including securities issued by ETFs) —  last quoted sale price or official closing price or, if there is no sale or official closing price, latest available bid price provided by a pricing service.
Debt securities —  valued on the basis of prices provided by an approved pricing service; however, when the prices of the securities cannot be obtained from an approved pricing service, such securities are generally valued at a bid price estimated by a broker.
Convertible bonds and unlisted convertible preferred stocks —  valued at prices obtained from a pricing service for such instruments or, if a pricing service price is not available, at bid prices obtained from one or more of the major dealers in such bonds or stocks. Convertible bonds may be matrix-priced based upon the conversion value to the underlying common stocks and market premiums.
Securities traded on foreign exchanges —  most recent sales or bid price on the foreign exchange or market, unless a significant event or circumstance occurs after the close of that market or exchange that will materially affect its value. In that case, the security will be valued using fair value methods by the Adviser at the close of regular trading on the Exchange. Foreign currency is converted into U.S. dollar equivalent daily at current exchange rates.
Options —  for exchange traded options, last sales price or, if not available, the bid price. Options not traded on an exchange or not actively traded are valued according to fair value methods.
Futures —  last settlement price or, if there is no sale, latest available bid price.
Investment company securities —  shares of open-end mutual funds (other than ETFs) held by a Fund will be valued at the net asset value of the shares of such funds as described in such funds’ prospectuses.
Repurchase agreements and reverse repurchase agreements —  valued at original cost (par) plus accrued interest. Other pricing methods such as amortized cost may be utilized depending on the features of the instrument.
Swaps —  centrally cleared swaps are priced using the value determined by the central counterparty at the end of the day, which price may be provided by an approved pricing service. With respect to over-the-counter swaps and centrally cleared swaps where the central counterparty price is unavailable, a price provided by an approved pricing service will be used.
Pursuant to applicable law, the Board of Trustees of 1290 Funds has designated the Adviser as the Funds' valuation designee. As the Funds' valuation designee, and subject to the Board’s oversight, the Adviser is responsible for determining in good faith the fair value of Fund investments for which market quotations are not readily available or are believed by the Adviser to be unreliable. In these circumstances, a Fund may use a fair value estimate made according to methods the Adviser has approved in the good-faith belief that the resulting valuation will reflect the fair value of the security. For example, a security whose trading has been halted during the trading day may be fair valued based on the available information at the time of the close of the trading market. Similarly, securities for which there is no ready market (e.g., securities of certain small capitalization issuers, high yield securities, and securities of certain issuers located in emerging markets) also may be fair valued. Some methods for valuing these securities may include: fundamental
144 How fund shares are priced
analysis (earnings multiple, etc.), matrix pricing, discounts from market prices of similar securities, or discounts applied due to the nature and duration of restrictions on the disposition of the securities. In addition, if events or circumstances affecting the values of portfolio securities occur between the closing of their principal markets and the time a Fund’s net asset value is determined, such as with respect to foreign securities trading on foreign exchanges that may close before the time the Fund's net asset value is determined, the Adviser may ascertain a fair value for such securities when it deems that the event or circumstance would materially affect such Fund's net asset value. Such events or circumstances may be company specific, such as an earning reports, country or region specific, such as a natural disaster, or global in nature. Such events or circumstances also may include price movements in the U.S. securities markets.
The effect of fair value pricing is that securities may not be priced on the basis of quotations from the primary market in which they are traded, but rather may be priced by a fair valuation method established by the Adviser that relies on other available pricing inputs. As such, fair value pricing is based on subjective judgments and it is possible that the fair valuations reached may differ materially from the value realized on a sale and from the prices used by other registered funds to calculate their net asset values. The fair value pricing policy is intended to assure that a Fund's net asset value fairly reflects security values as of the time of pricing. Also, fair value pricing of a Fund's securities can help to protect the Fund by reducing arbitrage opportunities available to short-term traders, but there is no assurance that fair value pricing will completely prevent dilution of the Fund's net asset value by such traders.
For an explanation of the circumstances under which the Underlying ETFs will use fair value pricing and the effects of using fair value pricing, see the Underlying ETFs’ prospectuses and statements of additional information.
How fund shares are priced 145
11. Dividends and other distributions and tax consequences
Dividends and other Distributions
Each of the 1290 Essex Small Cap Growth Fund, 1290 GAMCO Small/Mid Cap Value Fund, 1290 Multi-Alternative Strategies Fund and 1290 SmartBeta Equity Fund will distribute all or substantially all of its net investment income and net realized capital gains, if any, at least annually or more frequently as determined to be appropriate by the Adviser. Each of the 1290 Diversified Bond Fund, 1290 High Yield Bond Fund and 1290 Loomis Sayles Multi-Asset Income Fund will distribute all or substantially all of its net investment income and net realized capital gains, if any, at least monthly. A Fund may also pay a special distribution at the end of a calendar year to comply with federal tax requirements.
Dividends distributed by a Fund may be reinvested automatically in shares of the distributing class of that Fund at their net asset value without a sales charge or may be taken in cash. If you would like to receive distributions in cash, contact your financial professional, financial intermediary or the Funds. The Funds anticipate, although they cannot predict with any certainty, that a significant amount of their distributions, if any, will consist of net capital gains.
Tax Consequences
For federal income tax purposes, each Fund has elected and intends to continue to qualify for taxation as a regulated investment company (a “RIC”) under the Code.
You will pay federal income tax on dividends from a Fund whether you receive them in cash or reinvest them in additional shares. If you redeem Fund shares or exchange them for shares of another Fund, you will be treated as having sold the Fund shares, and any gain on the transaction will be subject to federal income tax.
Any dividends you receive from a Fund attributable to its net investment income, the excess of its net short-term capital gain over net long-term capital loss and its net gains and losses from certain foreign currency transactions, if any, will be taxed to you as ordinary income. However, a Fund’s distributions to individuals and certain other non-corporate shareholders (each, an “individual shareholder”) of certain dividend income it receives, consisting of dividends received from U.S. corporations and certain foreign corporations (“qualified dividend income”), and net capital gain (i.e., the excess of net long-term capital gain over net short-term capital loss) are subject to federal income tax at reduced rates, specifically, 15% for an individual shareholder with no more than $492,300 of taxable income ($553,850 if married filing jointly) and 20% for those with taxable income exceeding those respective amounts (which apply for 2023 and will be adjusted for inflation annually thereafter). Distributions of net capital gains will be taxable to you at different rates depending on how long the Fund held the assets the sale of which generated the gains, not how long you held your Fund shares.
An individual is required to pay a 3.8% federal tax on the lesser of (1) the individual’s “net investment income,” which generally will include dividends and other distributions a Fund pays and gains recognized from the redemption or exchange of Fund shares, or (2) the excess of the individual’s “modified adjusted gross income” over $200,000 for single taxpayers ($250,000 for married persons filing jointly). This tax is in addition to any other taxes due on that income. A similar tax applies to estates and trusts. Shareholders should consult their own tax advisers regarding the effect, if any, this tax may have on their investment in Fund shares.
Each Fund must withhold and remit to the U.S. Treasury Department 24% of dividends, other taxable distributions, and redemption proceeds (regardless of whether you realize a gain or loss) otherwise payable to any individual shareholder who fails to certify that the TIN furnished to the Fund is correct or who furnishes an incorrect TIN (together with the withholding described in the next sentence, “backup withholding”). Withholding at that rate also is required from each Fund’s dividends and other taxable distributions otherwise payable to such a shareholder who (1) is subject to backup withholding for failure to report the receipt of interest or dividend income properly or (2) fails to certify to the Fund that he or she is not subject to backup withholding or that it is a corporation or other exempt recipient. Backup withholding is not an additional tax, and any amounts so withheld may be credited against a shareholder’s federal income tax liability or refunded.
A Fund shareholder who wants to use a method for determining his or her basis in Fund shares other than the average basis method (which is the Funds’ default method) must elect to do so in writing, which may be electronic. Each Fund, or its administrative agent, must report to the IRS and furnish to its shareholders the basis information for Fund shares that are redeemed or exchanged. See the “Taxation” section in the 1290 Funds’ SAI for a description of the rules regarding that election and each Fund’s reporting obligation.
Dividends a Fund pays to a nonresident alien individual, foreign corporation or partnership, or foreign trust or estate (each, a “foreign shareholder”), with certain exceptions, generally will be subject to a federal withholding tax of 30% (or lower treaty rate). Two categories of dividends, however, “short-term capital gain dividends” and “interest-related dividends,” a Fund pays to foreign shareholders (with
146 Dividends and other distributions and tax consequences
certain exceptions) and reports in writing to its shareholders are exempt from that tax. See the “Taxation” section in the SAI for details regarding that exemption.
Under the Foreign Account Tax Compliance Act (“FATCA”), “foreign financial institutions” (“FFIs”) and “non-financial foreign entities” (“NFFEs”) that are Fund shareholders may be subject to a generally nonrefundable 30% withholding tax on income dividends each Fund pays. As discussed more fully in the section of the SAI entitled “Taxation,” the FATCA withholding tax generally can be avoided (a) by an FFI, if it reports certain information regarding direct and indirect ownership of financial accounts U.S. persons hold with the FFI, and (b) by an NFFE, if it certifies its status as such and, in certain circumstances, reports information regarding substantial U.S. owners to the withholding agent (which may be a Fund), which may, in turn, report that information to the IRS. Moreover, the U.S. Treasury Department has negotiated intergovernmental agreements (“IGAs”) with certain countries and is in various stages of negotiations with other foreign countries with respect to one or more alternative approaches to implement FATCA; entities in those countries may be required to comply with the terms of the IGA instead of U.S. Treasury Department regulations.
Dividends and interest a Fund receives, and gains it realizes, on foreign securities may be subject to income, withholding, or other taxes imposed by foreign countries and U.S. possessions that would reduce the yield and/or total return on its investments. Tax conventions between certain countries and the United States may reduce or eliminate those taxes, however, and many foreign countries do not impose taxes on capital gains in respect of investments by foreign investors.
Dividends and other distributions and tax consequences 147
12. Additional information
Additional Investor Services
Automatic Bank Draft Plan
An Automatic Bank Draft Plan is available for investors who wish to purchase Class A or Class T shares of one or more of the Funds in amounts of $50 or more on a regular basis by having the amount of the investment automatically deducted from the investor’s checking account. The minimum initial investment for this Plan is $500. Forms authorizing this service are available from 1290 Funds. For more information on how to join the Automatic Bank Draft Plan, please refer to the section entitled “Buying Shares.”
Automatic Reinvestment Plan
Dividends and other distributions may be automatically reinvested in the same class of shares without a sales charge.
Dividend Diversification Program
This program allows you to have all dividends and any other distributions automatically invested in shares of the same class of another Fund, subject to the eligibility requirements of that other Fund and to state securities law requirements. Shares will be purchased at the selected Fund’s net asset value without a front-end sales charge or CDSC on the dividend record date. Before establishing a Dividend Diversification Program into any other Fund, please carefully read the relevant information about it in the Prospectus.
Systematic Withdrawal Plan
If you have at least $10,000 in your account, you may participate in a systematic withdrawal plan. Under this plan, you may arrange quarterly, semi-annual or annual automatic withdrawals of at least $500 from any Fund. The proceeds of each withdrawal will be mailed to you or as you otherwise direct in writing. The $10,000 minimum account size is not applicable to IRAs. 1290 Funds processes sales through a systematic withdrawal plan on the 15th day of the month or the following business day if the 15th is not a business day. Any income or capital gain dividends will be automatically reinvested at net asset value. A sufficient number of full and fractional shares will be redeemed to make the designated payment. Depending upon the size of the payments requested and fluctuations in the net asset value of the shares redeemed, sales for the purpose of making such payments may reduce or even exhaust the account. You should not purchase Class A shares while participating in a systematic withdrawal plan because you may be redeeming shares upon which a sales charge was already paid unless you purchased shares at net asset value. A Fund will not knowingly permit additional investments of less than $2,000 if you are making systematic withdrawals at the same time. A Fund will waive the CDSC on redemptions of shares made pursuant to a systematic withdrawal plan if the proceeds do not exceed 10% annually of the net asset value of the account. A Fund may amend the terms of the systematic withdrawal plan on 30 days’ notice. You or 1290 Funds may terminate the plan at any time.
Automatic Bank Purchase Plan
If you have your bank account linked to your 1290 Funds account, you can call 1-888-310-0416 prior to 4:00 p.m. Eastern Standard Time and purchase shares at that day’s closing price. The money will be taken from your bank account within one to five days.
1290 Funds — Related Web Site
Visit www.1290Funds.com to review your account balance and recent transactions, to view daily prices and performance information.
Transactions Through Processing Organizations
You may purchase or sell shares through an organization that provides recordkeeping and consulting services to 401(k) plans or other employee benefit plans or other omnibus accounts (“Processing Organization”). Processing Organizations may charge you a fee for this service and may require different minimum initial and subsequent investments than 1290 Funds. Processing Organizations may also impose other charges or restrictions different from those applicable to shareholders who invest in the Funds directly. A Processing Organization, rather than its customers, may be the shareholder of record of your shares. 1290 Funds is not responsible for the failure of any Processing Organization to carry out its obligations to its customers. Certain Processing Organizations may receive compensation from the Adviser or its affiliates and certain Processing Organizations may receive compensation from 1290 Funds for shareholder recordkeeping and similar services. One of the Processing Organizations through which shares of the Funds will be sold or redeemed is Equitable Advisors, LLC, a member of FINRA/the Securities Investor Protection Corporation and an investment adviser registered with the SEC. Equitable Advisors, LLC is an affiliate of the Funds, EIM and the Adviser.
148 Additional information
13. Financial highlights
The financial highlights table is intended to help you understand the financial performance for each Fund's Class A, Class T, Class I, and Class R shares, as applicable. The financial information in each table below is for the past five (5) years (or, if shorter, the period of the Fund's operations) and has been derived from the Fund’s financial statements, which have been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm. PricewaterhouseCoopers LLP’s report on each Fund's financial statements as of October 31, 2022 and the financial statements themselves appear in the 1290 Funds' Annual Report.
Certain information reflects financial results for a single Fund share. The total returns in the tables represent the rate that a shareholder would have earned (or lost) on an investment in a Fund (assuming reinvestment of all dividends and other distributions). The information should be read in conjunction with the financial statements contained in the 1290 Funds' Annual Report which are incorporated by reference into the 1290 Funds' SAI and are available upon request.
1290 Diversified Bond Fund 
 
Year Ended October 31,
Class A
2022
2021
2020
2019
2018
Net asset value, beginning of year
$10.70
$10.68
$10.34
$9.52
$10.12
Income (loss) from investment operations:
 
 
 
 
 
Net investment income (loss)(e)
0.27
0.29
0.39
0.41**
0.26
Net realized and unrealized gain (loss)
(2.41)
0.44
0.43
0.80
(0.40)
Total from investment operations
(2.14)
0.73
0.82
1.21
(0.14)
Less distributions:
 
 
 
 
 
Dividends from net investment income
(0.23)
(0.47)
(0.15)
(0.39)
(0.43)
Distributions from net realized gains
—
(0.22)
(0.33)
—
—
Return of capital
—
(0.02)
—
—
(0.03)
Total dividends and distributions
(0.23)
(0.71)
(0.48)
(0.39)
(0.46)
Net asset value, end of year
$8.33
$10.70
$10.68
$10.34
$9.52
Total return
(20.39)%
6.73%
8.32%
12.97%
(1.44)%
Ratios/Supplemental Data:
 
 
 
 
 
Net assets, end of year (000’s)
$6,608
$8,550
$7,796
$3,848
$190
Ratio of expenses to average net assets:
 
 
 
 
 
After waivers and reimbursements(f)
0.75%
0.75%
0.75%
0.75%
1.05%
Before waivers and reimbursements(f)
1.20%
1.22%
1.42%
1.55%
1.85%
Ratio of net investment income (loss) to average net assets:
 
 
 
 
 
After waivers and reimbursements(f)
2.75%
2.62%
3.76%*
4.00%**
2.63%
Before waivers and reimbursements(f)
2.31%
2.15%
3.09%*
3.19%**
1.83%
Portfolio turnover rate^
244%
165%
200%
194%
139%***
Financial highlights 149
 
 
Year Ended October 31,
Class I
2022
2021
2020
2019
2018
Net asset value, beginning of year
$10.72
$10.71
$10.37
$9.53
$10.13
Income (loss) from investment operations:
 
 
 
 
 
Net investment income (loss)(e)
0.30
0.31
0.41
0.42**
0.27
Net realized and unrealized gain (loss)
(2.42)
0.43
0.41
0.84
(0.38)
Total from investment operations
(2.12)
0.74
0.82
1.26
(0.11)
Less distributions:
 
 
 
 
 
Dividends from net investment income
(0.24)
(0.49)
(0.15)
(0.42)
(0.46)
Distributions from net realized gains
—
(0.22)
(0.33)
—
—
Return of capital
—
(0.02)
—
—
(0.03)
Total dividends and distributions
(0.24)
(0.73)
(0.48)
(0.42)
(0.49)
Net asset value, end of year
$8.36
$10.72
$10.71
$10.37
$9.53
Total return
(20.18)%
6.85%
8.34%
13.43%
(1.19)%
Ratios/Supplemental Data:
 
 
 
 
 
Net assets, end of year (000’s)
$578,149
$673,625
$169,409
$81,249
$30,590
Ratio of expenses to average net assets:
 
 
 
 
 
After waivers and reimbursements(f)
0.50%
0.50%
0.50%
0.50%
0.91%
Before waivers and reimbursements(f)
0.95%
0.96%
1.17%
1.34%
1.54%
Ratio of net investment income (loss) to average net assets:
 
 
 
 
 
After waivers and reimbursements(f)
3.04%
2.79%
3.95%*
4.12%**
2.70%
Before waivers and reimbursements(f)
2.59%
2.33%
3.28%*
3.28%**
2.06%
Portfolio turnover rate^
244%
165%
200%
194%
139%***
 
 
Year Ended October 31,
Class R
2022
2021
2020
2019
2018
Net asset value, beginning of year
$10.64
$10.63
$10.34
$9.51
$10.11
Income (loss) from investment operations:
 
 
 
 
 
Net investment income (loss)(e)
0.26
0.25
0.35*
0.35**
0.23
Net realized and unrealized gain (loss)
(2.42)
0.45
0.41
0.85
(0.39)
Total from investment operations
(2.16)
0.70
0.76
1.20
(0.16)
Less distributions:
 
 
 
 
 
Dividends from net investment income
(0.21)
(0.45)
(0.14)
(0.37)
(0.41)
Distributions from net realized gains
—
(0.22)
(0.33)
—
—
Return of capital
—
(0.02)
—
—
(0.03)
Total dividends and distributions
(0.21)
(0.69)
(0.47)
(0.37)
(0.44)
Net asset value, end of year
$8.27
$10.64
$10.63
$10.34
$9.51
Total return
(20.60)%
6.44%
7.77%
12.84%
(1.69)%
Ratios/Supplemental Data:
 
 
 
 
 
Net assets, end of year (000’s)
$1,808
$1,264
$298
$145
$96
Ratio of expenses to average net assets:
 
 
 
 
 
After waivers and reimbursements(f)
1.00%
1.00%
1.00%
1.00%
1.32%
Before waivers and reimbursements(f)
1.46%
1.47%
1.67%
1.88%
2.09%
Ratio of net investment income (loss) to average net assets:
 
 
 
 
 
After waivers and reimbursements(f)
2.68%
2.24%
3.43%*
3.51%**
2.34%
Before waivers and reimbursements(f)
2.22%
1.77%
2.75%*
2.63%**
1.57%
Portfolio turnover rate^
244%
165%
200%
194%
139%***
*
Includes accretion, interest and inflation adjustments on Argentine TIPS Bonds. Without this income, the per share income for each class would have been $0.08 lower and the ratios for each class would have been 0.73% lower.
**
Includes accretion, interest and inflation adjustments on Argentine TIPS Bonds. Without this income, the per share income for each class would have been $0.07 lower and the ratios for each class would have been 0.65% lower.
***
The portfolio turnover rate calculation includes purchases and sales made as a result of the replacement of the sub-adviser. Excluding such transactions, the portfolio turnover rate would have been 64%.
^
Portfolio turnover rate excludes derivatives, if any.
150 Financial highlights
†
The amount shown for a share outstanding throughout the period does not accord with the aggregate net income and/or gain on investments for that period because of the timing of sales and repurchases of the Fund shares in relation to fluctuating market value of the investments in the Fund.
(e)
Net investment income (loss) per share is based on average shares outstanding.
(f)
Expenses do not include the expenses of the underlying funds (“indirect expenses”), if applicable.
Financial highlights 151
1290 Essex Small Cap Growth Fund 
Class A
July 11, 2022* to
October 31, 2022
Net asset value, beginning of period
$10.00
Income (loss) from investment operations:
 
Net investment income (loss)(e)(x)
(0.02)
Net realized and unrealized gain (loss)
0.57
Total from investment operations
0.55
Net asset value, end of period
$10.55
Total return(b)
5.50%
Ratios/Supplemental Data:
 
Net assets, end of period (000’s)
$125
Ratio of expenses to average net assets:
 
After waivers and reimbursements(a)(f)
1.13%
Before waivers and reimbursements(a)(f)
6.32%
Ratio of net investment income (loss) to average net assets:
 
After waivers and reimbursements(a)(f)(x)
(0.61)%(l)
Before waivers and reimbursements(a)(f)(x)
(5.80)%(l)
Portfolio turnover rate^
29%(z)
 
Class I
July 11, 2022* to
October 31, 2022
Net asset value, beginning of period
$10.00
Income (loss) from investment operations:
 
Net investment income (loss)(e)(x)
(0.01)
Net realized and unrealized gain (loss)
0.57
Total from investment operations
0.56
Net asset value, end of period
$10.56
Total return(b)
5.60%
Ratios/Supplemental Data:
 
Net assets, end of period (000’s)
$10,350
Ratio of expenses to average net assets:
 
After waivers and reimbursements(a)(f)
0.88%
Before waivers and reimbursements(a)(f)
6.03%
Ratio of net investment income (loss) to average net assets:
 
After waivers and reimbursements(a)(f)(x)
(0.35)%(l)
Before waivers and reimbursements(a)(f)(x)
(5.50)%(l)
Portfolio turnover rate^
29%(z)
152 Financial highlights
 
Class R
July 11, 2022* to
October 31, 2022
Net asset value, beginning of period
$10.00
Income (loss) from investment operations:
 
Net investment income (loss)(e)(x)
(0.03)
Net realized and unrealized gain (loss)
0.57
Total from investment operations
0.54
Net asset value, end of period
$10.54
Total return (b)
5.40%
Ratios/Supplemental Data:
 
Net assets, end of period (000’s)
$105
Ratio of expenses to average net assets:
 
After waivers and reimbursements(a)(f)
1.38%
Before waivers and reimbursements(a)(f)
6.53%
Ratio of net investment income (loss) to average net assets:
 
After waivers and reimbursements(a)(f)(x)
(0.85)%(l)
Before waivers and reimbursements(a)(f)(x)
(6.00)%(l)
Portfolio turnover rate^
29%(z)
*
Commencement of operations.
^
Portfolio turnover rate excludes derivatives, if any.
(a)
Ratios for periods less than one year are annualized. Certain non-recurring expenses incurred by the Fund are not annualized for periods less than one year.
(b)
Total returns for periods less than one year are not annualized.
(e)
Net investment income (loss) per share is based on average shares outstanding.
(f)
Expenses do not include the expenses of the underlying funds (“indirect expenses”), if applicable.
(l)
The annualized ratio of net investment income to average net assets may not be indicative of operating results for a full year.
(x)
Recognition of net investment income is affected by the timing of dividend declarations by the underlying funds in which the Fund invests.
(z)
Portfolio turnover rate for periods less than one year is not annualized.
Financial highlights 153
1290 GAMCO Small/Mid Cap Value Fund 
 
Year Ended October 31,
Class A
2022
2021
2020
2019
2018
Net asset value, beginning of year
$17.19
$11.41
$12.46
$12.33
$12.83
Income (loss) from investment operations:
 
 
 
 
 
Net investment income (loss)(e)
0.06
0.09(2)
0.04(1)
0.05
0.03
Net realized and unrealized gain (loss)
(1.82)
5.73
(0.90)
0.22
(0.25)
Total from investment operations
(1.76)
5.82
(0.86)
0.27
(0.22)
Less distributions:
 
 
 
 
 
Dividends from net investment income
(0.26)
(0.04)
(0.04)
(0.02)
(0.03)
Distributions from net realized gains
(0.86)
—
(0.15)
(0.12)
(0.25)
Total dividends and distributions
(1.12)
(0.04)
(0.19)
(0.14)
(0.28)
Net asset value, end of year
$14.31
$17.19
$11.41
$12.46
$12.33
Total return
(10.93)%
51.10%
(7.04)%
2.29%
(1.84)%
Ratios/Supplemental Data:
 
 
 
 
 
Net assets, end of year (000’s)
$5,134
$5,904
$3,400
$3,896
$3,599
Ratio of expenses to average net assets:
 
 
 
 
 
After waivers(f)
1.21%(j)
1.24%(k)
1.25%(k)
1.24%(k)
1.24%(k)
Before waivers(f)
1.51%
1.42%
1.58%
1.66%
1.79%
Ratio of net investment income (loss) to average net assets:
 
 
 
 
 
After waivers(f)
0.42%
0.55%(bb)
0.40%(aa)
0.39%
0.26%
Before waivers(f)
0.13%
0.37%(bb)
0.07%(aa)
(0.03)%
(0.28)%
Portfolio turnover rate^
27%
35%
19%
37%
49%
 
 
Year Ended October 31,
Class I
2022
2021
2020
2019
2018
Net asset value, beginning of year
$17.24
$11.43
$12.49
$12.36
$12.86
Income (loss) from investment operations:
 
 
 
 
 
Net investment income (loss)(e)
0.10
0.13(2)
0.07(1)
0.08
0.07
Net realized and unrealized gain (loss)
(1.84)
5.75
(0.91)
0.23
(0.26)
Total from investment operations
(1.74)
5.88
(0.84)
0.31
(0.19)
Less distributions:
 
 
 
 
 
Dividends from net investment income
(0.29)
(0.07)
(0.07)
(0.06)
(0.06)
Distributions from net realized gains
(0.86)
—
(0.15)
(0.12)
(0.25)
Total dividends and distributions
(1.15)
(0.07)
(0.22)
(0.18)
(0.31)
Net asset value, end of year
$14.35
$17.24
$11.43
$12.49
$12.36
Total return
(10.74)%
51.57%
(6.88)%
2.57%
(1.60)%
Ratios/Supplemental Data:
 
 
 
 
 
Net assets, end of year (000’s)
$109,572
$145,394
$84,537
$95,601
$86,815
Ratio of expenses to average net assets:
 
 
 
 
 
After waivers(f)
0.96%(j)
0.99%(k)
1.00%(k)
0.99%(k)
0.99%(k)
Before waivers(f)
1.25%
1.17%
1.33%
1.41%
1.51%
Ratio of net investment income (loss) to average net assets:
 
 
 
 
 
After waivers(f)
0.68%
0.76%(bb)
0.64%(aa)
0.64%
0.54%
Before waivers(f)
0.40%
0.59%(bb)
0.31%(aa)
0.22%
0.03%
Portfolio turnover rate^
27%
35%
19%
37%
49%
154 Financial highlights
 
 
Year Ended October 31,
Class R
2022
2021
2020
2019
2018
Net asset value, beginning of year
$17.07
$11.33
$12.38
$12.26
$12.76
Income (loss) from investment operations:
 
 
 
 
 
Net investment income (loss)(e)
0.03
0.05(2)
0.02(1)
0.02
—##
Net realized and unrealized gain (loss)
(1.82)
5.70
(0.91)
0.22
(0.25)
Total from investment operations
(1.79)
5.75
(0.89)
0.24
(0.25)
Less distributions:
 
 
 
 
 
Dividends from net investment income
(0.22)
(0.01)
(0.01)
—
—
Distributions from net realized gains
(0.86)
—
(0.15)
(0.12)
(0.25)
Total dividends and distributions
(1.08)
(0.01)
(0.16)
(0.12)
(0.25)
Net asset value, end of year
$14.20
$17.07
$11.33
$12.38
$12.26
Total return
(11.17)%
50.80%
(7.31)%
2.02%
(2.07)%
Ratios/Supplemental Data:
 
 
 
 
 
Net assets, end of year (000’s)
$1,022
$1,096
$685
$912
$801
Ratio of expenses to average net assets:
 
 
 
 
 
After waivers(f)
1.46%(j)
1.49%(k)
1.50%(k)
1.49%(k)
1.49%(k)
Before waivers(f)
1.76%
1.67%
1.83%
1.91%
2.05%
Ratio of net investment income (loss) to average net assets:
 
 
 
 
 
After waivers(f)
0.17%
0.28%(bb)
0.15%(g)
0.14%
0.02%
Before waivers(f)
(0.12)%
0.11%(bb)
(0.19)%(g)
(0.28)%
(0.54)%
Portfolio turnover rate^
27%
35%
19%
37%
49%
Financial highlights 155
 
 
Year Ended October 31,
Class T**
2022
2021
2020
2019
2018
Net asset value, beginning of year
$17.24
$11.43
$12.49
$12.36
$12.86
Income (loss) from investment operations:
 
 
 
 
 
Net investment income (loss)(e)
0.11
0.13(2)
0.07(1)
0.08
0.07
Net realized and unrealized gain (loss)
(1.85)
5.75
(0.91)
0.23
(0.26)
Total from investment operations
(1.74)
5.88
(0.84)
0.31
(0.19)
Less distributions:
 
 
 
 
 
Dividends from net investment income
(0.29)
(0.07)
(0.07)
(0.06)
(0.06)
Distributions from net realized gains
(0.86)
—
(0.15)
(0.12)
(0.25)
Total dividends and distributions
(1.15)
(0.07)
(0.22)
(0.18)
(0.31)
Net asset value, end of year
$14.35
$17.24
$11.43
$12.49
$12.36
Total return
(10.74)%
51.57%
(6.88)%
2.57%
(1.60)%
Ratios/Supplemental Data:
 
 
 
 
 
Net assets, end of year (000’s)
$146
$176
$116
$127
$126
Ratio of expenses to average net assets:
 
 
 
 
 
After waivers(f)
0.96%(j)
0.99%(k)
1.00%(k)
0.99%(k)
0.99%(k)
Before waivers(f)
1.51%
1.42%
1.58%
1.66%
1.80%
Ratio of net investment income (loss) to average net assets:
 
 
 
 
 
After waivers(f)
0.74%
0.79%(bb)
0.64%(aa)
0.64%
0.50%
Before waivers(f)
0.19%
0.37%(bb)
0.06%(aa)
(0.02)%
(0.31)%
Portfolio turnover rate^
27%
35%
19%
37%
49%
**
Class T shares currently are not offered for sale. Class T shares were formerly known as Class C Shares.
(1)
Includes income resulting from a special dividend. Without this dividend, the per share income amounts would be $0.04, $0.06, $0.01 and $0.06 for Class A, Class I, Class R and Class T, respectively.
##
Per share amount is less than $0.005.
(2)
Includes income resulting from a special dividend. Without this dividend, the per share income amounts would be $0.02, $0.05, $(0.02) and $0.06 for Class A, Class I, Class R and Class T, respectively.
^
Portfolio turnover rate excludes derivatives, if any.
(e)
Net investment income (loss) per share is based on average shares outstanding.
(f)
Expenses do not include the expenses of the underlying funds (“indirect expenses”), if applicable.
(j)
Including direct and indirect expenses, the net expense ratio after waivers would be 1.21% for Class A, 0.96% for Class I, 1.46% for Class R and 0.96% for Class T.
(k)
Including direct and indirect expenses, the net expense ratio after waivers would be 1.25% for Class A, 1.00% for Class I, 1.50% for Class R and 1.00% for Class T.
(aa)
Includes income resulting from a special dividend. Without this dividend, the ratios for each class would have been 0.09 lower.
(bb)
Includes income resulting from a special dividend. Without this dividend, the ratios for each class would have been 0.43 lower.
156 Financial highlights
1290 High Yield Bond Fund 
 
Year Ended October 31,
Class A
2022
2021
2020
2019
2018
Net asset value, beginning of year
$9.24
$9.01
$9.06
$8.93
$9.33
Income (loss) from investment operations:
 
 
 
 
 
Net investment income (loss)(e)
0.40
0.39
0.44
0.47
0.48
Net realized and unrealized gain (loss)
(1.27)
0.26
(0.03)
0.14
(0.40)
Total from investment operations
(0.87)
0.65
0.41
0.61
0.08
Less distributions:
 
 
 
 
 
Dividends from net investment income
(0.40)
(0.42)
(0.46)
(0.47)
(0.48)
Return of capital
(0.02)
—#
—
(0.01)
—
Total dividends and distributions
(0.42)
(0.42)
(0.46)
(0.48)
(0.48)
Net asset value, end of year
$7.95
$9.24
$9.01
$9.06
$8.93
Total return
(9.60)%
7.27%
4.72%
6.97%
0.86%
Ratios/Supplemental Data:
 
 
 
 
 
Net assets, end of year (000’s)
$1,844
$2,145
$2,115
$1,623
$2,500
Ratio of expenses to average net assets:
 
 
 
 
 
After waivers and reimbursements(f)
1.00%
1.00%
1.00%
1.00%
1.04%
Before waivers and reimbursements(f)
1.43%
1.44%
1.68%
1.79%
1.77%
Ratio of net investment income (loss) to average net assets:
 
 
 
 
 
After waivers and reimbursements(f)
4.61%
4.24%
4.97%
5.27%
5.20%
Before waivers and reimbursements(f)
4.18%
3.80%
4.29%
4.48%
4.47%
Portfolio turnover rate^
43%
39%
59%
54%
45%
 
 
Year Ended October 31,
Class I
2022
2021
2020
2019
2018
Net asset value, beginning of year
$9.25
$9.01
$9.06
$8.94
$9.34
Income (loss) from investment operations:
 
 
 
 
 
Net investment income (loss)(e)
0.42
0.42
0.47
0.50
0.50
Net realized and unrealized gain (loss)
(1.28)
0.26
(0.04)
0.12
(0.40)
Total from investment operations
(0.86)
0.68
0.43
0.62
0.10
Less distributions:
 
 
 
 
 
Dividends from net investment income
(0.42)
(0.44)
(0.48)
(0.49)
(0.50)
Return of capital
(0.02)
—#
—
(0.01)
—
Total dividends and distributions
(0.44)
(0.44)
(0.48)
(0.50)
(0.50)
Net asset value, end of year
$7.95
$9.25
$9.01
$9.06
$8.94
Total return
(9.47)%
7.65%
4.98%
7.12%
1.09%
Ratios/Supplemental Data:
 
 
 
 
 
Net assets, end of year (000’s)
$53,821
$66,473
$42,159
$35,453
$30,386
Ratio of expenses to average net assets:
 
 
 
 
 
After waivers and reimbursements(f)
0.75%
0.75%
0.75%
0.75%
0.80%
Before waivers and reimbursements(f)
1.18%
1.18%
1.43%
1.53%
1.52%
Ratio of net investment income (loss) to average net assets:
 
 
 
 
 
After waivers and reimbursements(f)
4.84%
4.47%
5.22%
5.50%
5.47%
Before waivers and reimbursements(f)
4.42%
4.04%
4.54%
4.71%
4.74%
Portfolio turnover rate^
43%
39%
59%
54%
45%
Financial highlights 157
 
 
Year Ended October 31,
Class R
2022
2021
2020
2019
2018
Net asset value, beginning of year
$9.23
$9.00
$9.05
$8.93
$9.33
Income (loss) from investment operations:
 
 
 
 
 
Net investment income (loss)(e)
0.37
0.37
0.42
0.45
0.45
Net realized and unrealized gain (loss)
(1.25)
0.25
(0.03)
0.13
(0.39)
Total from investment operations
(0.88)
0.62
0.39
0.58
0.06
Less distributions:
 
 
 
 
 
Dividends from net investment income
(0.38)
(0.39)
(0.44)
(0.45)
(0.46)
Return of capital
(0.02)
—#
—
(0.01)
—
Total dividends and distributions
(0.40)
(0.39)
(0.44)
(0.46)
(0.46)
Net asset value, end of year
$7.95
$9.23
$9.00
$9.05
$8.93
Total return
(9.72)%
7.01%
4.46%
6.59%
0.63%
Ratios/Supplemental Data:
 
 
 
 
 
Net assets, end of year (000’s)
$375
$708
$638
$307
$287
Ratio of expenses to average net assets:
 
 
 
 
 
After waivers and reimbursements(f)
1.25%
1.25%
1.25%
1.25%
1.30%
Before waivers and reimbursements(f)
1.67%
1.69%
1.92%
2.03%
2.02%
Ratio of net investment income (loss) to average net assets:
 
 
 
 
 
After waivers and reimbursements(f)
4.29%
3.98%
4.69%
5.00%
4.96%
Before waivers and reimbursements(f)
3.87%
3.54%
4.01%
4.22%
4.23%
Portfolio turnover rate^
43%
39%
59%
54%
45%
 
 
Year Ended October 31,
Class T**
2022
2021
2020
2019
2018
Net asset value, beginning of year
$9.24
$9.01
$9.06
$8.93
$9.33
Income (loss) from investment operations:
 
 
 
 
 
Net investment income (loss)(e)
0.42
0.42
0.47
0.50
0.50
Net realized and unrealized gain (loss)
(1.27)
0.25
(0.04)
0.13
(0.40)
Total from investment operations
(0.85)
0.67
0.43
0.63
0.10
Less distributions:
 
 
 
 
 
Dividends from net investment income
(0.42)
(0.44)
(0.48)
(0.49)
(0.50)
Return of capital
(0.02)
—#
—
(0.01)
—
Total dividends and distributions
(0.44)
(0.44)
(0.48)
(0.50)
(0.50)
Net asset value, end of year
$7.95
$9.24
$9.01
$9.06
$8.93
Total return
(9.37)%
7.53%
4.98%
7.24%
1.09%
Ratios/Supplemental Data:
 
 
 
 
 
Net assets, end of year (000’s)
$113
$131
$128
$129
$127
Ratio of expenses to average net assets:
 
 
 
 
 
After waivers and reimbursements(f)
0.75%
0.75%
0.75%
0.75%
0.80%
Before waivers and reimbursements(f)
1.43%
1.44%
1.68%
1.78%
1.77%
Ratio of net investment income (loss) to average net assets:
 
 
 
 
 
After waivers and reimbursements(f)
4.86%
4.49%
5.23%
5.50%
5.46%
Before waivers and reimbursements(f)
4.18%
3.80%
4.30%
4.47%
4.49%
Portfolio turnover rate^
43%
39%
59%
54%
45%
**
Class T shares currently are not offered for sale. Class T shares were formerly known as Class C Shares.
#
Per share amount is less than $0.005.
^
Portfolio turnover rate excludes derivatives, if any.
(e)
Net investment income (loss) per share is based on average shares outstanding.
(f)
Expenses do not include the expenses of the underlying funds (“indirect expenses”), if applicable.
158 Financial highlights
1290 Loomis Sayles Multi-Asset Income Fund 
 
Year Ended October 31,
Class A
2022
2021
2020
2019
2018
Net asset value, beginning of year
$12.54
$11.47
$11.23
$10.61
$11.25
Income (loss) from investment operations:
 
 
 
 
 
Net investment income (loss)(e)(x)
0.16
0.07
0.12
0.18
0.15
Net realized and unrealized gain (loss)
(1.46)
1.91
0.70
0.91
(0.01)
Total from investment operations
(1.30)
1.98
0.82
1.09
0.14
Less distributions:
 
 
 
 
 
Dividends from net investment income
(0.24)
(0.12)
(0.18)
(0.17)
(0.13)
Distributions from net realized gains
(1.06)
(0.79)
(0.40)
(0.30)
(0.65)
Total dividends and distributions
(1.30)
(0.91)
(0.58)
(0.47)
(0.78)
Net asset value, end of year
$9.94
$12.54
$11.47
$11.23
$10.61
Total return
(11.35)%
18.12%
7.64%
10.73%
1.19%
Ratios/Supplemental Data:
 
 
 
 
 
Net assets, end of year (000’s)
$4,469
$5,104
$3,520
$2,081
$2,440
Ratio of expenses to average net assets:
 
 
 
 
 
After waivers(f)
1.14%(j)
1.16%(k)
1.16%(k)
1.15%(k)
1.20%(m)
Before waivers(f)
1.68%
1.48%
1.61%
1.67%
1.66%
Ratio of net investment income (loss) to average net assets:
 
 
 
 
 
After waivers(f)(x)
1.52%
0.59%
1.05%
1.70%
1.39%
Before waivers(f)(x)
0.98%
0.28%
0.60%
1.19%
0.93%
Portfolio turnover rate^
255%*
106%
131%
63%
79%
 
 
Year Ended October 31,
Class I
2022
2021
2020
2019
2018
Net asset value, beginning of year
$12.57
$11.49
$11.25
$10.63
$11.27
Income (loss) from investment operations:
 
 
 
 
 
Net investment income (loss)(e)(x)
0.18
0.10
0.15
0.21
0.18
Net realized and unrealized gain (loss)
(1.45)
1.92
0.70
0.91
(0.01)
Total from investment operations
(1.27)
2.02
0.85
1.12
0.17
Less distributions:
 
 
 
 
 
Dividends from net investment income
(0.29)
(0.15)
(0.21)
(0.20)
(0.16)
Distributions from net realized gains
(1.06)
(0.79)
(0.40)
(0.30)
(0.65)
Total dividends and distributions
(1.35)
(0.94)
(0.61)
(0.50)
(0.81)
Net asset value, end of year
$9.95
$12.57
$11.49
$11.25
$10.63
Total return
(11.10)%
18.47%
7.89%
11.00%
1.44%
Ratios/Supplemental Data:
 
 
 
 
 
Net assets, end of year (000’s)
$46,354
$70,007
$62,303
$59,997
$57,126
Ratio of expenses to average net assets:
 
 
 
 
 
After waivers(f)
0.89%(j)
0.91%(k)
0.91%(k)
0.90%(k)
0.95%(m)
Before waivers(f)
1.40%
1.23%
1.36%
1.42%
1.41%
Ratio of net investment income (loss) to average net assets:
 
 
 
 
 
After waivers(f)(x)
1.66%
0.85%
1.35%
1.95%
1.62%
Before waivers(f)(x)
1.15%
0.53%
0.89%
1.43%
1.16%
Portfolio turnover rate^
255%*
106%
131%
63%
79%
Financial highlights 159
 
 
Year Ended October 31,
Class R
2022
2021
2020
2019
2018
Net asset value, beginning of year
$12.51
$11.44
$11.21
$10.59
$11.23
Income (loss) from investment operations:
 
 
 
 
 
Net investment income (loss)(e)(x)
0.13
0.04
0.09
0.15
0.12
Net realized and unrealized gain (loss)
(1.45)
1.92
0.70
0.91
(0.01)
Total from investment operations
(1.32)
1.96
0.79
1.06
0.11
Less distributions:
 
 
 
 
 
Dividends from net investment income
(0.19)
(0.10)
(0.16)
(0.14)
(0.10)
Distributions from net realized gains
(1.06)
(0.79)
(0.40)
(0.30)
(0.65)
Total dividends and distributions
(1.25)
(0.89)
(0.56)
(0.44)
(0.75)
Net asset value, end of year
$9.94
$12.51
$11.44
$11.21
$10.59
Total return
(11.52)%
17.87%
7.30%
10.46%
0.93%
Ratios/Supplemental Data:
 
 
 
 
 
Net assets, end of year (000’s)
$168
$199
$179
$168
$156
Ratio of expenses to average net assets:
 
 
 
 
 
After waivers(f)
1.39%(j)
1.41%(k)
1.41%(k)
1.40%(k)
1.45%(m)
Before waivers(f)
1.93%
1.73%
1.86%
1.92%
1.91%
Ratio of net investment income (loss) to average net assets:
 
 
 
 
 
After waivers(f)(x)
1.26%
0.35%
0.84%
1.44%
1.13%
Before waivers(f)(x)
0.72%
0.03%
0.39%
0.93%
0.67%
Portfolio turnover rate^
255%*
106%
131%
63%
79%
*
The portfolio turnover rate calculation includes purchases and sales made as a result of the replacement of the sub-adviser.
^
Portfolio turnover rate excludes derivatives, if any.
(e)
Net investment income (loss) per share is based on average shares outstanding.
(f)
Expenses do not include the expenses of the underlying funds (“indirect expenses”), if applicable.
(j)
Including direct and indirect expenses, the net expense ratio after waivers would be 1.17% for Class A, 0.92% for Class I and 1.42% for Class R.
(k)
Including direct and indirect expenses, the net expense ratio after waivers would be 1.20% for Class A, 0.95% for Class I and 1.45% for Class R.
(m)
Including direct and indirect expenses, the net expense ratio after waivers would be 1.25% for Class A, 1.00% for Class I and 1.50% for Class R.
(x)
Recognition of net investment income is affected by the timing of dividend declarations by the underlying funds in which the Fund invests.
160 Financial highlights
1290 Multi-Alternative Strategies Fund 
 
Year Ended October 31,
Class A
2022
2021
2020
2019
2018
Net asset value, beginning of year
$11.27
$9.92
$10.32
$10.02
$10.21
Income (loss) from investment operations:
 
 
 
 
 
Net investment income (loss)(e)(x)
0.15
0.26
0.10
0.11
0.04
Net realized and unrealized gain (loss)
(1.65)
1.15
(0.30)
0.28
(0.19)
Total from investment operations
(1.50)
1.41
(0.20)
0.39
(0.15)
Less distributions:
 
 
 
 
 
Dividends from net investment income
(0.16)
(0.06)
(0.20)
(0.04)
—
Distributions from net realized gains
(0.87)
—
—
(0.05)
(0.04)
Total dividends and distributions
(1.03)
(0.06)
(0.20)
(0.09)
(0.04)
Net asset value, end of year
$8.74
$11.27
$9.92
$10.32
$10.02
Total return
(14.28)%
14.24%
(2.01)%
3.98%
(1.49)%
Ratios/Supplemental Data:
 
 
 
 
 
Net assets, end of year (000’s)
$440
$670
$556
$627
$827
Ratio of expenses to average net assets:
 
 
 
 
 
After waivers and reimbursements(f)
1.10%
1.13%(j)
1.06%***(k)
1.07%**(m)
1.03%(n)
Before waivers and reimbursements(f)
1.86%
1.78%
1.97%
1.89%
1.79%
Ratio of net investment income (loss) to average net assets:
 
 
 
 
 
After waivers and reimbursements(f)
1.55%
2.34%(x)
1.03%(x)
1.12%(x)
0.39%(x)
Before waivers and reimbursements(f)
0.79%
1.69%(x)
0.12%(x)
0.30%(x)
(0.37)%(x)
Portfolio turnover rate^
26%
66%
15%
8%
5%
 
Class I
Year Ended October 31,
2022
2021
2020
2019
2018
Net asset value, beginning of year
$11.29
$9.94
$10.34
$10.04
$10.23
Income (loss) from investment operations:
 
 
 
 
 
Net investment income (loss)(e)(x)
0.17
0.27
0.13
0.13
0.07
Net realized and unrealized gain (loss)
(1.64)
1.16
(0.31)
0.29
(0.20)
Total from investment operations
(1.47)
1.43
(0.18)
0.42
(0.13)
Less distributions:
 
 
 
 
 
Dividends from net investment income
(0.19)
(0.08)
(0.22)
(0.07)
(0.02)
Distributions from net realized gains
(0.87)
—
—
(0.05)
(0.04)
Total dividends and distributions
(1.06)
(0.08)
(0.22)
(0.12)
(0.06)
Net asset value, end of year
$8.76
$11.29
$9.94
$10.34
$10.04
Total return
(14.04)%
14.48%
(1.76)%
4.25%
(1.25)%
Ratios/Supplemental Data:
 
 
 
 
 
Net assets, end of year (000’s)
$12,070
$16,054
$13,776
$17,783
$18,151
Ratio of expenses to average net assets:
 
 
 
 
 
After waivers and reimbursements(f)
0.85%
0.88%(j)
0.81%***(k)
0.82%**(m)
0.78%(n)
Before waivers and reimbursements(f)
1.61%
1.53%
1.71%
1.63%
1.54%
Ratio of net investment income (loss) to average net assets:
 
 
 
 
 
After waivers and reimbursements(f)
1.75%
2.45%(x)
1.36%(x)
1.32%(x)
0.66%(x)
Before waivers and reimbursements(f)
0.99%
1.80%(x)
0.46%(x)
0.50%(x)
(0.11)%(x)
Portfolio turnover rate^
26%
66%
15%
8%
5%
Financial highlights 161
 
Class R
Year Ended October 31,
2022
2021
2020
2019
2018
Net asset value, beginning of year
$11.21
$9.87
$10.27
$9.97
$10.19
Income (loss) from investment operations:
 
 
 
 
 
Net investment income (loss)(e)(x)
0.12
0.21
0.06
0.08
0.03
Net realized and unrealized gain (loss)
(1.62)
1.16
(0.29)
0.29
(0.21)
Total from investment operations
(1.50)
1.37
(0.23)
0.37
(0.18)
Less distributions:
 
 
 
 
 
Dividends from net investment income
(0.14)
(0.03)
(0.17)
(0.02)
—
Distributions from net realized gains
(0.87)
—
—
(0.05)
(0.04)
Total dividends and distributions
(1.01)
(0.03)
(0.17)
(0.07)
(0.04)
Net asset value, end of year
$8.70
$11.21
$9.87
$10.27
$9.97
Total return
(14.39)%
13.95%
(2.27)%
3.74%
(1.79)%
Ratios/Supplemental Data:
 
 
 
 
 
Net assets, end of year (000’s)
$131
$187
$136
$116
$105
Ratio of expenses to average net assets:
 
 
 
 
 
After waivers and reimbursements(f)
1.35%
1.38%(j)
1.31%***(k)
1.32%**(m)
1.26%(n)
Before waivers and reimbursements(f)
2.11%
2.03%
2.23%
2.13%
2.02%
Ratio of net investment income (loss) to average net assets:
 
 
 
 
 
After waivers and reimbursements(f)
1.25%
1.96%(x)
0.65%(x)
0.78%(x)
0.27%(x)
Before waivers and reimbursements(f)
0.48%
1.31%(x)
(0.26)%(x)
(0.04)%(x)
(0.49)%(x)
Portfolio turnover rate^
26%
66%
15%
8%
5%
**
Includes Tax expense of 0.04%.
***
Includes Tax expense of 0.01%.
^
Portfolio turnover rate excludes derivatives, if any.
(e)
Net investment income (loss) per share is based on average shares outstanding.
(f)
Expenses do not include the expenses of the underlying funds (“indirect expenses”), if applicable.
(j)
Including direct and indirect expenses, the net expense ratio after waivers and reimbursements would be 1.60% for Class A, 1.35% for Class I and 1.85% for Class R.
(k)
Including direct and indirect expenses, the net expense ratio after waivers and reimbursements would be 1.66% for Class A, 1.41% for Class I and 1.91% for Class R.
(m)
Including direct and indirect expenses, the net expense ratio after waivers and reimbursements would be 1.69% for Class A, 1.44% for Class I and 1.94% for Class R.
(n)
Including direct and indirect expenses, the net expense ratio after waivers and reimbursements would be 1.65% for Class A, 1.40% for Class I and 1.90% for Class R.
(x)
Recognition of net investment income is affected by the timing of dividend declarations by the underlying funds in which the Fund invests.
162 Financial highlights
1290 SmartBeta Equity Fund 
 
Year Ended October 31,
Class A
2022
2021
2020
2019
2018
Net asset value, beginning of year
$17.61
$13.34
$13.34
$12.09
$12.23
Income (loss) from investment operations:
 
 
 
 
 
Net investment income (loss)(e)
0.15
0.14
0.14
0.15
0.15
Net realized and unrealized gain (loss)
(2.37)
4.29
0.14
1.67
0.06
Total from investment operations
(2.22)
4.43
0.28
1.82
0.21
Less distributions:
 
 
 
 
 
Dividends from net investment income
(0.13)
(0.08)
(0.13)
(0.14)
(0.15)
Distributions from net realized gains
(1.11)
(0.08)
(0.15)
(0.43)
(0.20)
Total dividends and distributions
(1.24)
(0.16)
(0.28)
(0.57)
(0.35)
Net asset value, end of year
$14.15
$17.61
$13.34
$13.34
$12.09
Total return
(13.73)%
33.49%
2.07%
15.81%
1.64%
Ratios/Supplemental Data:
 
 
 
 
 
Net assets, end of year (000’s)
$4,888
$4,978
$3,278
$2,014
$1,123
Ratio of expenses to average net assets:
 
 
 
 
 
After waivers and reimbursements(f)
1.10%
1.10%
1.14%
1.15%
1.15%
Before waivers and reimbursements(f)
1.42%
1.48%
1.83%
2.26%
2.42%
Ratio of net investment income (loss) to average net assets:
 
 
 
 
 
After waivers and reimbursements(f)
0.96%
0.89%
1.04%
1.19%
1.21%
Before waivers and reimbursements(f)
0.64%
0.51%
0.35%
0.08%
(0.06)%
Portfolio turnover rate ^
38%
59%
42%
31%
49%
 
 
Year Ended October 31,
Class I
2022
2021
2020
2019
2018
Net asset value, beginning of year
$17.66
$13.37
$13.37
$12.11
$12.25
Income (loss) from investment operations:
 
 
 
 
 
Net investment income (loss)(e)
0.19
0.19
0.17
0.19
0.18
Net realized and unrealized gain (loss)
(2.38)
4.29
0.14
1.67
0.06
Total from investment operations
(2.19)
4.48
0.31
1.86
0.24
Less distributions:
 
 
 
 
 
Dividends from net investment income
(0.17)
(0.11)
(0.16)
(0.17)
(0.18)
Distributions from net realized gains
(1.11)
(0.08)
(0.15)
(0.43)
(0.20)
Total dividends and distributions
(1.28)
(0.19)
(0.31)
(0.60)
(0.38)
Net asset value, end of year
$14.19
$17.66
$13.37
$13.37
$12.11
Total return
(13.56)%
33.87%
2.30%
16.16%
1.86%
Ratios/Supplemental Data:
 
 
 
 
 
Net assets, end of year (000’s)
$150,789
$124,320
$46,777
$23,959
$16,340
Ratio of expenses to average net assets:
 
 
 
 
 
After waivers and reimbursements(f)
0.85%
0.85%
0.89%
0.90%
0.90%
Before waivers and reimbursements(f)
1.17%
1.23%
1.58%
2.02%
2.16%
Ratio of net investment income (loss) to average net assets:
 
 
 
 
 
After waivers and reimbursements(f)
1.23%
1.16%
1.27%
1.49%
1.47%
Before waivers and reimbursements(f)
0.90%
0.78%
0.58%
0.37%
0.21%
Portfolio turnover rate ^
38%
59%
42%
31%
49%
Financial highlights 163
 
 
Year Ended October 31,
Class R
2022
2021
2020
2019
2018
Net asset value, beginning of year
$17.56
$13.30
$13.31
$12.06
$12.20
Income (loss) from investment operations:
 
 
 
 
 
Net investment income (loss)(e)
0.11
0.10
0.10
0.12
0.12
Net realized and unrealized gain (loss)
(2.37)
4.29
0.14
1.67
0.06
Total from investment operations
(2.26)
4.39
0.24
1.79
0.18
Less distributions:
 
 
 
 
 
Dividends from net investment income
(0.09)
(0.05)
(0.10)
(0.11)
(0.12)
Distributions from net realized gains
(1.11)
(0.08)
(0.15)
(0.43)
(0.20)
Total dividends and distributions
(1.20)
(0.13)
(0.25)
(0.54)
(0.32)
Net asset value, end of year
$14.10
$17.56
$13.30
$13.31
$12.06
Total return
(13.97)%
33.21%
1.75%
15.55%
1.39%
Ratios/Supplemental Data:
 
 
 
 
 
Net assets, end of year (000’s)
$1,381
$936
$236
$151
$136
Ratio of expenses to average net assets:
 
 
 
 
 
After waivers and reimbursements(f)
1.35%
1.35%
1.39%
1.40%
1.40%
Before waivers and reimbursements(f)
1.68%
1.73%
2.09%
2.52%
2.66%
Ratio of net investment income (loss) to average net assets:
 
 
 
 
 
After waivers and reimbursements(f)
0.72%
0.64%
0.77%
1.00%
0.98%
Before waivers and reimbursements(f)
0.40%
0.26%
0.07%
(0.12)%
(0.29)%
Portfolio turnover rate ^
38%
59%
42%
31%
49%
 
 
Year Ended October 31,
Class T**
2022
2021
2020
2019
2018
Net asset value, beginning of year
$17.65
$13.37
$13.37
$12.11
$12.25
Income (loss) from investment operations:
 
 
 
 
 
Net investment income (loss)(e)
0.18
0.18
0.17
0.19
0.18
Net realized and unrealized gain (loss)
(2.36)
4.29
0.14
1.67
0.06
Total from investment operations
(2.18)
4.47
0.31
1.86
0.24
Less distributions:
 
 
 
 
 
Dividends from net investment income
(0.17)
(0.11)
(0.16)
(0.17)
(0.18)
Distributions from net realized gains
(1.11)
(0.08)
(0.15)
(0.43)
(0.20)
Total dividends and distributions
(1.28)
(0.19)
(0.31)
(0.60)
(0.38)
Net asset value, end of year
$14.19
$17.65
$13.37
$13.37
$12.11
Total return
(13.51)%
33.79%
2.30%
16.16%
1.86%
Ratios/Supplemental Data:
 
 
 
 
 
Net assets, end of year (000’s)
$147
$182
$138
$138
$125
Ratio of expenses to average net assets:
 
 
 
 
 
After waivers and reimbursements(f)
0.85%
0.85%
0.90%
0.90%
0.90%
Before waivers and reimbursements(f)
1.42%
1.48%
1.84%
2.27%
2.41%
Ratio of net investment income (loss) to average net assets:
 
 
 
 
 
After waivers and reimbursements(f)
1.20%
1.14%
1.28%
1.50%
1.47%
Before waivers and reimbursements(f)
0.63%
0.50%
0.33%
0.13%
(0.04)%
Portfolio turnover rate^
38%
59%
42%
31%
49%
**
Class T shares currently are not offered for sale. Class T shares were formerly known as Class C Shares.
^
Portfolio turnover rate excludes derivatives, if any.
(e)
Net investment income (loss) per share is based on average shares outstanding.
(f)
Expenses do not include the expenses of the underlying funds (“indirect expenses”), if applicable.
164 Financial highlights
If you would like more information about the Funds, the following documents (including a copy of this Prospectus) are available at 1290 Funds' website: www.1290Funds.com, free of charge.
Annual and Semi-Annual Reports  —  Include more information about the Funds' investments and performance. The reports usually include performance information, a discussion of market conditions and the investment strategies that significantly affected the Funds' performance during the last fiscal year.
Statement of Additional Information (SAI)  —  Provides more detailed information about the Funds, has been filed with the SEC and is incorporated into this Prospectus by reference.
Portfolio Holdings Disclosure  —  A description of the Funds' policies and procedures with respect to the disclosure of their portfolio securities holdings is available in the Funds' SAI, which is available on the Funds' website.
To order a free copy of the Funds' SAI and/or Annual and Semi-Annual Reports, request other information about a Fund, or make shareholder inquiries, contact your financial professional, or the Funds at:
1290 Funds
1290 Avenue of the Americas
New York, New York 10104
Telephone: 1-888-310-0416
Hours: 8:30 a.m. to 5:30 p.m (Eastern Time)
on any business day
Your financial professional or 1290 Funds will also be happy to answer your questions or to provide any additional information that you may require.
Reports and other information about the Funds are available on the EDGAR database on the SEC’s Internet site at:
http://www.sec.gov
Investors may also obtain copies of this information, after paying a duplicating fee, by electronic request at the following E-mail address: [email protected]
“Equitable” is the brand name of Equitable Holdings, Inc. and its family of companies, including Equitable Financial Life Insurance Company (NY, NY), Equitable Advisors, LLC and Equitable Distributors, LLC. The obligations of Equitable Financial Life Insurance Company are backed solely by their claims-paying ability.
© 2023 Equitable Financial Life Insurance Company. All rights reserved.
1290 Avenue of the Americas, New York, NY 10104
(212) 554-1234
1290 Funds
(Investment Company Act File No. 811-22959)
Mutual Funds: • Are Not a Deposit of Any Bank • Are Not FDIC Insured • Are Not Insured by Any Federal Government Agency • Are Not Guaranteed by Any Bank or Savings Association • May Go Down in Value
Equitable Financial Life Insurance Company (NY, NY)