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Carillon Mutual Funds

 

Prospectus


March 1, 2019

 

Go Paperless with eDelivery - visit carillontower.com/eDelivery

 

These securities have not been approved or disapproved by the Securities and Exchange Commission (“Commission”), nor has the Commission passed upon the accuracy or adequacy of the Funds’ Prospectus. Any representation to the contrary is a criminal offense.

 

Equity Funds Class A Class C Class I Class Y

Class R-3

Class R-5

Class R-6

Carillon ClariVest Capital Appreciation Fund HRCPX HRCCX HRCIX HRCYX HRCLX HRCMX HRCUX
Carillon ClariVest International Stock Fund EISAX EISDX EISIX EISYX EISRX EISSX EISVX
Carillon Cougar Tactical Allocation Fund ETAFX ETDFX ETIFX ETYFX ETRFX ETSFX ETUFX
Carillon Eagle Growth & Income Fund HRCVX HIGCX HIGJX HIGYX HIGRX HIGSX HIGUX
Carillon Eagle Mid Cap Growth Fund HAGAX HAGCX HAGIX HRAYX HAREX HARSX HRAUX
Carillon Eagle Small Cap Growth Fund HRSCX HSCCX HSIIX HSRYX HSRRX HSRSX HSRUX
Carillon Scout International Fund CSIGX CSIHX UMBWX CSIZX CSIQX CSIUX CSIWX
Carillon Scout Mid Cap Fund CSMEX CSMFX UMBMX CSMZX CSMRX CSMSX CSMUX
Carillon Scout Small Cap Fund CSSAX CSSJX UMBHX CSSWX CSSQX CSSSX CSSVX
Fixed Income Funds Class A Class C Class I Class Y

Class R-3

Class R-5

Class R-6

Carillon Reams Core Bond Fund CRCBX CRCDX SCCIX SCCYX CRCQX CRCSX CRCUX
Carillon Reams Core Plus Bond Fund SCPDX SCPEX SCPZX SCPYX SCPUX SCPVX SCPWX
Carillon Reams Unconstrained Bond Fund SUBDX SUBEX SUBFX SUBYX SUBRX SUBSX SUBTX

 

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Funds’ shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from a Fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.

 

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from a Fund or your financial intermediary electronically by going to carillontower.com/eDelivery.

 

You may elect to receive all future reports in paper free of charge. You can inform a Fund that you wish to continue receiving paper copies of your shareholder reports by calling 800.421.4184, or you may directly inform your financial intermediary of your wish. A notice that will be mailed to you each time a report is posted will also include instructions for informing a Fund that you wish to continue receiving paper copies of your shareholder reports. Your election to receive reports in paper from a Fund will apply to all Funds held with the Carillon Mutual Funds or your financial intermediary, as applicable.

 

These securities have not been approved or disapproved by the Securities and Exchange Commission (“Commission”), nor has the Commission passed upon the accuracy or adequacy of the Funds’ Prospectus. Any representation to the contrary is a criminal offense.


Table of Contents

 

Summaries

 

Carillon ClariVest Capital Appreciation Fund 1
Carillon ClariVest International Stock Fund 5
Carillon Cougar Tactical Allocation Fund 10
Carillon Eagle Growth & Income Fund 16
Carillon Eagle Mid Cap Growth Fund 20
Carillon Eagle Small Cap Growth Fund 24
Carillon Scout International Fund 28
Carillon Scout Mid Cap Fund 33
Carillon Scout Small Cap Fund 38
Carillon Reams Core Bond Fund 43
Carillon Reams Core Plus Bond Fund 49
Carillon Reams Unconstrained Bond Fund 55

 

More Information About the Funds

 

Additional Information About the Funds 61
Additional Information Regarding Investment Strategies 61
Additional Information About Principal Risk Factors 68
Investment Adviser 77
Sub-advisers 78
Portfolio Managers 79
Distributor 82
Rule 12b-1 Distribution Plan 82
Payments to Financial Intermediaries 82
Choosing a Share Class 83
Class A Shares 83
Sales Charge Reductions 84
Class C Shares 87
Application of CDSC 87
Reinstatement Privilege 88
Class I Shares 88
Class Y Shares 88
Class R-3, R-5 and R-6 Shares 89
How to Invest 89
How To Sell Your Investment 91
How To Exchange Your Shares 92
Valuing Your Shares 93
Doing Business with the Funds 94
Dividends, Other  Distributions and Taxes 96
Description of Indices 99
Fund Symbols, CUSIPs and Codes 100
Financial Highlights 102
For More Information 110


Carillon Mutual Funds

Summary of carillon clarivest capital appreciation fund | 3.1.2019



Investment objective | The Carillon ClariVest Capital Appreciation Fund (“Capital Appreciation Fund” or the “fund”) seeks long-term capital appreciation.

 

Fees and expenses of the fund | The tables that follow describe the fees and expenses that you may pay if you buy and hold shares of the Capital Appreciation Fund. You may qualify for sales discounts if you and your family invest, or agree to invest in the future, at least $25,000 in the Class A shares of the Carillon Family of Funds. More information about these and other discounts is available from your financial professional, on page 82 of the fund’s Prospectus and on page 44 of the fund’s Statement of Additional Information. Although the fund does not impose any sales charge on Class I shares, you may pay a commission to your broker on your purchases and sales of those shares, which is not reflected in the tables or Example below.

 

Shareholder fees

(fees paid directly from your investment):

Class

A

Class

C

Class

I

Class
Y

Class

R-3

Class

R-5

Class

R-6

Maximum Sales Charge Imposed on Purchases (as a % of offering price) 4.75% None None None None None None
Maximum Deferred Sales Charge (as a % of original purchase price or redemption proceeds, whichever is lower) None (a) 1.00% (a) None None None None None
Redemption Fee None None None None None None None

 

Annual fund operating expenses

(expenses that you pay each year as a percentage of the value of your investment):

Class

A

Class

C

Class

I

Class

Y

Class

R-3

Class

R-5

Class

R-6

Management Fees 0.60% 0.60% 0.60% 0.60% 0.60% 0.60% 0.60%
Distribution and Service (12b-1) Fees 0.25% 1.00% 0.00% 0.25% 0.50% 0.00% 0.00%
Other Expenses 0.27% 0.29%(b) 0.28% 0.70% 0.37% 0.26% 0.19%
Total Annual Fund Operating Expenses 1.12% 1.89% 0.88% 1.55% 1.47% 0.86% 0.79%
Fee Waiver and/or Expense Reimbursement (c) (0.12)% (0.14)% (0.18)% (0.55)% (0.22)% (0.16)% (0.19)%
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement 1.00% 1.75% 0.70% 1.00% 1.25% 0.70% 0.60%

 

(a) If you purchased $1,000,000 or more of Class A shares of a Carillon mutual fund that were not otherwise eligible for a sales charge waiver and sell the shares within 18 months from the date of purchase, you may pay up to a 1% contingent deferred sales charge at the time of sale. If you sell Class C shares less than one year after purchase, you will pay a 1% CDSC at the time of sale.

(b) Other expenses have been restated to reflect the current administrative services fee rate.

(c) Carillon Tower Advisers, Inc. (“Carillon”) has contractually agreed to waive its investment advisory fee and/or reimburse certain expenses of the fund to the extent that: annual operating expenses of each class exceed a percentage of that class’ average daily net assets through February 29, 2020 as follows: Class A – 1.00%, Class C – 1.75%, Class I – 0.70%, Class Y – 1.00%, Class R-3 – 1.25%, Class R-5 – 0.70%, and Class R-6 – 0.60%. This expense limitation excludes interest, taxes, brokerage commissions, costs relating to investments in other investment companies (acquired fund fees and expenses), dividends, and extraordinary expenses. The contractual fee waiver can be changed only with the approval of a majority of the fund’s Board of Trustees. Any reimbursement of fund expenses or reduction in Carillon’s investment advisory fees is subject to reimbursement by the fund within the following two fiscal years, if overall expenses fall below the lesser of its then current expense cap or the expense cap in effect at the time of the fee reimbursement.

 

Expense example | This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the fund’s operating expenses remain the same, except that the example reflects the fee waiver/expense reimbursement arrangement for each share class through February 29, 2020. Although your actual costs may be higher or lower, based on these assumptions your costs would be:


carillontower.com | 1


Carillon Mutual Funds

Summary of carillon clarivest capital appreciation fund | 3.1.2019



Share Class Year 1 Year 3 Year 5 Year 10
Class A $572 $803 $1,052 $1,763
Class C $278 $580 $1,008 $2,200
Class I $72 $263 $470 $1,068
Class Y $102 $436 $793 $1,799
Class R-3 $127 $443 $782 $1,739
Class R-5 $72 $258 $461 $1,046
Class R-6 $61 $233 $420 $960

 

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 fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the fund’s performance. During the most recent fiscal year, the fund’s portfolio turnover rate was 45% of the average value of its portfolio.

 

Principal investment strategies | During normal market conditions, the Capital Appreciation Fund seeks to achieve its objective by investing at least 65% of its net assets in common stocks of companies that have the potential for attractive long-term growth in earnings, cash flow and total worth of the company. In addition, the portfolio management team prefers to purchase stocks that appear to be underpriced in relation to the company’s long-term growth fundamentals. The strategy of the fund’s portfolio management team is based upon systematic analysis of fundamental and technical factors, significantly aided by a quantitative process. The fund typically invests in the stocks of large- and mid-capitalization companies, but may invest in the stocks of companies of any size without regard to market capitalization. Although the portfolio management team generally does not emphasize investment in any particular investment sector or industry, the fund may invest a significant portion of its assets in the securities of companies in the information technology sector at any given time. The fund may sell securities when they no longer meet the portfolio management team’s investment criteria.

 

Principal risks | The greatest risk of investing in the fund is that you could lose money. The fund invests primarily in common stocks whose values increase and decrease in response to the activities of the companies that issued such stocks, general market conditions and/or economic conditions. As a result, the fund’s net asset value (“NAV”) also increases and decreases. An investment in the fund is not a deposit with a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Investments in this fund are subject to the following primary risks, which are described in alphabetical order and not in order of importance or potential exposure:

 

•Equity securities are subject to stock market risk.


Common stock. The value of a company’s common stock may fall as a result of factors affecting the company, companies in the same industry or sector, or the financial markets overall. Common stock generally is subordinate to preferred stock upon the liquidation or bankruptcy of the issuing company;


•Growth stock risk is the risk of a lack of earnings increase or lack of dividend yield;


•Mid-cap company risk arises because mid-cap companies may have narrower commercial markets, limited managerial and financial resources, more volatile performance, and less liquid stock, compared to larger, more established companies;


•Quantitative strategy risk is the risk that the success of the fund’s investment strategy may depend in part on the effectiveness of the sub-adviser’s quantitative tools for screening securities. These strategies may incorporate factors that are not predictive of a security’s value. Additionally, a previously successful strategy may become outdated or inaccurate, possibly resulting in losses;


•Sector risk is the risk associated with the fund holding a core portfolio of stocks invested in similar businesses, all of which could be affected by the same economic or market conditions.


Information technology sector risk is the risk that products of information technology companies may face rapid product obsolescence due to technological developments and frequent new product introduction, unpredictable changes in growth rates and competition for the services of qualified personnel. Failure to introduce new products, develop and maintain a loyal customer base or achieve general market acceptance for their products could have a material adverse effect on a company’s business. Companies in the information technology sector are heavily dependent on intellectual property and the loss of patent, copyright and trademark protections may adversely affect the profitability of these companies; and


•Stock market risk is the risk of broad stock market decline or volatility or a decline in particular holdings in response to adverse issuer, political, regulatory, market, economic or other developments, public perceptions concerning these developments, and adverse investor sentiment.


2 | carillontower.com


Carillon Mutual Funds

Summary of carillon clarivest capital appreciation fund | 3.1.2019



Performance | The bar chart that follows illustrates annual fund returns for the periods ended December 31. The table that follows compares the fund’s returns for various periods with benchmark returns. This information is intended to give you some indication of the risk of investing in the fund by demonstrating how its returns have varied over time. The bar chart shows the fund’s Class I share performance from one year to another. Each of the fund’s share classes is invested in the same portfolio of securities, and the annual returns would have differed only to the extent that the classes do not have the same sales charges and expenses. The fund’s past performance (before and after taxes) is not necessarily an indication of how the fund will perform in the future. To obtain more current performance data as of the most recent month-end, please visit our website at carillontower.com.

 

 

 

During 10 year period Return Quarter Ended
(Class I shares):    
Best Quarter 22.27% June 30, 2009
Worst Quarter (17.24)% December 31, 2018

 

Average annual total returns

(for the periods ended December 31, 2018):

 

Fund return (after deduction of sales charges and expenses)

 

Share Class

Inception

Date

1-yr 5-yr 10-yr

Lifetime

(if less than

10 yrs)

Class I – Before Taxes 3/21/06 (6.93)% 9.68% 15.29%  
After Taxes on Distributions   (9.03)% 7.21% 13.70%  
After Taxes on Distributions and Sale of Fund Shares   (2.66)% 7.37% 12.74%  
Class A – Before Taxes 12/12/85 (11.60)% 8.30% 14.37%  
Class C – Before Taxes 4/3/95 (7.89)% 8.52% 14.07%  
Class Y – Before Taxes 11/20/17 (7.21)%     (4.44)%
Class R-3 – Before Taxes 9/12/07 (7.42)% 9.01% 14.59%  
Class R-5 – Before Taxes 10/2/06 (6.92)% 9.67% 15.30%  
Class R-6 – Before Taxes 7/31/15 (6.83)%     7.38%


carillontower.com | 3

Carillon Mutual Funds

Summary of carillon clarivest capital appreciation fund | 3.1.2019



Index (reflects no deduction for fees, expenses or taxes) 1-yr 5-yr 10-yr

Lifetime

(From the inception date of Class Y Shares)

Lifetime

(From the inception date of Class R-6 Shares)

Russell 1000® Growth Index (Lifetime period is measured from the inception date of Class I shares) -1.51% 10.40% 15.29% 1.17% 9.17%

 

After-tax returns are calculated using the historically 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. After-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements, such as a 401(k) plan or individual retirement account (“IRA”). After-tax returns are shown for Class I only and after-tax returns for Class A, Class C, Class Y, Class R-3, Class R-5, and Class R-6 will vary. The return after taxes on distributions and sale of fund shares may exceed the return before taxes due to an assumed tax benefit from any losses on a sale of fund shares at the end of the measurement period.

 

Investment Adviser | Carillon Tower Advisers, Inc. is the fund’s investment adviser.

 

Sub-adviser | ClariVest Asset Management LLC (“ClariVest”) serves as the sub-adviser to the fund.

 

Portfolio Managers | David J. Pavan, CFA®, C. Frank Feng, Ph.D., Ed Wagner, CFA®, and Todd N. Wolter, CFA® are Portfolio Co-Managers of the fund. Mr. Pavan, Dr. Feng, Mr. Wagner and Mr. Wolter are jointly and primarily responsible for the day-to-day management of the fund. Messrs. Pavan, Feng, and Wagner have been Portfolio Co-Managers of the fund since 2013. Mr. Wolter has served as the fund’s Portfolio Co-Manager since February 2019.

 

Purchase and sale of fund shares | You may purchase, redeem, or exchange Class A, C, I and Y shares of the fund on any business day through your financial intermediary, by mail at Carillon Family of Funds, c/o U.S. Bank Global Fund Services, P.O. Box 701, Milwaukee, WI 53201-0701 (for regular mail) or 615 East Michigan Street, Third Floor, Milwaukee, WI, 53202 (for overnight service), or by telephone (800.421.4184). In Class A and Class C shares, the minimum purchase amount is $1,000 for regular accounts, $500 for retirement accounts and $50 through a periodic investment program, with a minimum subsequent investment plan of $50 per month. In Class Y shares, the minimum purchase amount is $1,000 for regular accounts, $100 for retirement accounts and $100 through a periodic investment program, with a minimum subsequent investment plan of $50 per month. For individual investors, the minimum initial purchase for Class I shares is $10,000, while fee-based plan sponsors set their own minimum requirements. Class R-3, Class R-5 and Class R-6 shares can only be purchased through a participating retirement plan and the minimum initial purchase for Class R-3, Class R-5 and Class R-6 shares is set by the plan administrator.

 

Tax information | The dividends you receive from the fund will be taxed as ordinary income or net capital gain (i.e., the excess of net long-term capital gain over net short-term capital loss) unless you are investing through a tax-deferred arrangement, such as a 401(k) plan or an IRA, in which case you may be subject to federal income tax on withdrawals from the arrangement.

 

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 and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the fund over another investment. Ask your salesperson or visit your financial intermediary’s website for more information.


4 | carillontower.com


Carillon Mutual Funds 

Summary of carillon clarivest international stock fund | 3.1.2019



Investment objective | The Carillon ClariVest International Stock Fund (“International Stock Fund” or the “fund”) seeks capital appreciation.

 

Fees and expenses of the fund | The tables that follow describe the fees and expenses that you may pay if you buy and hold shares of the International Stock Fund. You may qualify for sales discounts if you and your family invest, or agree to invest in the future, at least $25,000 in the Class A shares of the Carillon Family of Funds. More information about these and other discounts is available from your financial professional, on page 82 of the fund’s Prospectus and on page 44 of the fund’s Statement of Additional Information. Although the fund does not impose any sales charge on Class I shares, you may pay a commission to your broker on your purchases and sales of those shares, which is not reflected in the tables or Example below.

 

Shareholder fees

(fees paid directly from your investment):

Class

A

Class

C

Class

I

Class Y

Class

R-3

Class

R-5

Class

R-6

Maximum Sales Charge Imposed on Purchases (as a % of offering price) 4.75% None None None None None None
Maximum Deferred Sales Charge (as a % of original purchase price or redemption proceeds, whichever is lower) None (a) 1.00% (a) None None None None None
Redemption Fee None None None None None None None

 

Annual fund operating expenses

(expenses that you pay each year as a percentage of the value of your investment):

Class

A

Class

C

Class

I

Class

Y

Class

R-3

Class

R-5

Class

R-6

Management Fees 0.70% 0.70% 0.70% 0.70% 0.70% 0.70% 0.70%
Distribution and Service (12b-1) Fees 0.25% 1.00% 0.00% 0.25% 0.50% 0.00% 0.00%
Other Expenses (b) 1.90% 1.98% 1.89% 2.64% 1.97% 3.96% 2.11%
Total Annual Fund Operating Expenses 2.85% 3.68% 2.59% 3.59% 3.17% 4.66%(b) 2.81%
Fee Waiver and/or Expense Reimbursement (c) (1.40)% (1.48)% (1.44)% (2.14)% (1.47)% (3.51)% (1.76)%
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement 1.45% 2.20% 1.15% 1.45% 1.70% 1.15% 1.05%

 

(a) If you purchased $1,000,000 or more of Class A shares of a Carillon mutual fund that were not otherwise eligible for a sales charge waiver and sell the shares within 18 months from the date of purchase, you may pay up to a 1% contingent deferred sales charge at the time of sale. If you sell Class C shares less than one year after purchase, you will pay a 1% CDSC at the time of sale.

(b) Other Expenses may include Acquired Fund Fees and Expenses of up to 0.01%. Accordingly, the Total Annual Fund Operating Expenses may not correlate to the ratio of expenses to average net assets provided in the fund’s Financial Highlights table, which reflects the operating expenses of the fund and does not include Acquired Fund Fees and Expenses.

(c) Carillon Tower Advisers, Inc. (“Carillon”) has contractually agreed to waive its investment advisory fee and/or reimburse certain expenses of the fund to the extent that annual operating expenses of each class exceed a percentage of that class’ average daily net assets through February 29, 2020 as follows: Class A – 1.45%, Class C – 2.20%, Class I – 1.15%, Class Y – 1.45%, Class R-3 - 1.70%, Class R-5 – 1.15%, and Class R-6 – 1.05%. This expense limitation excludes interest, taxes, brokerage commissions, costs relating to investments in other investment companies (acquired fund fees and expenses), dividends, and extraordinary expenses. The contractual fee waiver can be changed only with the approval of a majority of the fund’s Board of Trustees. Any reimbursement of fund expenses or reduction in Carillon’s investment advisory fees is subject to reimbursement by the fund within the following two fiscal years, if overall expenses fall below the lesser of its then current expense cap or the expense cap in effect at the time of the fee reimbursement.


carillontower.com | 5


Carillon Mutual Funds

Summary of carillon clarivest international stock fund | 3.1.2019



Expense example | This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the fund’s operating expenses remain the same, except that the example reflects the fee waiver/expense reimbursement arrangement for each share class through February 29, 2020. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

 

Share Class Year 1 Year 3 Year 5 Year 10
Class A $616 $1,190 $1,789 $3,404
Class C $323 $990 $1,777 $3,837
Class I $117 $668 $1,246 $2,817
Class Y $148 $902 $1,677 $3,713
Class R-3 $173 $840 $1,531 $3,374
Class R-5 $117 $1,088 $2,066 $4,540
Class R-6 $107 $704 $1,328 $3,010

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 fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the fund’s performance. During the most recent fiscal year, the fund’s portfolio turnover rate was 49% of the average value of its portfolio.

 

Principal investment strategies | The International Stock Fund invests, under normal market conditions, at least 80% of its net assets (plus the amount of any borrowings for investment purposes) in equity securities of companies economically tied to countries outside of the U.S. Equity securities include common and preferred stocks, warrants or rights exercisable into common or preferred stock, convertible preferred stock, American Depositary Receipts (“ADRs”), Global Depositary Receipts (“GDRs”) and European Depositary Receipts (“EDRs”). Issuers considered to be economically tied to countries outside of the U.S. include, without limitation: (1) an issuer organized under the laws of or maintaining a principal office or principal place(s) of business outside of the U.S.; (2) an issuer of securities that are principally traded in one or more markets outside the U.S.; (3) an issuer that derives or is currently expected to derive 50% or more of its total sales, revenues, profits, earnings, growth, or another measure of economic activity from, the production or sale of goods or performance of services or making of investments or other economic activity in, outside of the U.S., or that maintains or is currently expected to maintain 50% or more of its employees, assets, investments, operations, or other business activity outside of the U.S.; (4) a governmental or quasi-governmental entity of a country outside of the U.S.; or (5) any other issuer that the sub-adviser believes may expose the fund’s assets to the economic fortunes and risks of a country or countries outside of the U.S. The fund typically does not invest in issuers located in emerging market countries. The fund’s benchmark is the MSCI EAFE® Index which measures large- and mid-cap equity performance across 21 of 23 developed countries, excluding the U.S. and Canada.

 

In selecting securities for the fund, the sub-adviser utilizes quantitative tools to implement a “bottom-up,” fundamentally based, investment process. The sub-adviser constructs a portfolio that seeks to maximize expected return, subject to constraints designed to meet long-run expected active risk goals.

 

The fund may invest in exchange-traded funds (“ETFs”) in order to equitize cash positions, seek exposure to certain markets or market sectors and to hedge against certain market movements. The fund may sell securities when they no longer meet the portfolio managers’ investment criteria and/or to take advantage of more attractive investment opportunities.

 

Principal risks | The greatest risk of investing in the fund is that you could lose money. The fund invests primarily in common stocks whose values increase and decrease in response to the activities of the companies that issued such stocks, general market conditions and/or economic conditions. As a result, the fund’s net asset value (“NAV”) may also increase or decrease. An investment in the fund is not a deposit with a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Investments in this fund are subject to the following primary risks, which are described in alphabetical order and not in order of importance or potential exposure:

 

• Equity securities are subject to stock market risk.

 

Common stock. The value of a company’s common stock may fall as a result of factors affecting the company, companies in the same industry or sector, or the financial markets overall. Common stock generally is subordinate to preferred stock upon the liquidation or bankruptcy of the issuing company;


Preferred stock and convertible preferred stock. Preferred stocks and convertible preferred stocks are sensitive to movements in interest rates. Preferred stocks and convertible preferred stocks may be less liquid than common stocks and, unlike common stocks, participation in the growth of an issuer may be limited. Distributions on preferred stocks and convertible preferred stocks generally are payable at the discretion of an issuer


6 | carillontower.com


Carillon Mutual Funds

Summary of carillon clarivest international stock fund | 3.1.2019



and after required payments to bond holders;

 

Depositary receipts. Investing in depositary receipts entails substantially the same risks as direct investment in foreign securities;

 

Rights and warrants. Rights and warrants do not carry dividend or voting rights with respect to the underlying securities or any rights in the assets of the issuer, and a right or a warrant ceases to have value if it is not exercised prior to its expiration date;

 

•Foreign security risks, which are potential risks not associated with U.S. investments, include, but are not limited to: (1) currency exchange rate fluctuations, (2) political and financial instability, (3) less liquidity, (4) lack of uniform accounting, auditing and financial reporting standards, (5) increased volatility, (6) less government regulation and supervision of foreign stock exchanges, brokers and listed companies, and (7) delays in transaction settlement in some foreign markets.  The risks associated with investments in governmental or quasi-governmental entities of a foreign country are heightened by the potential for unexpected governmental change and inadequate government oversight. Foreign security risk may also apply to ADRs, GDRs and EDRs;


•Growth stock risk is the risk of a lack of earnings increase or lack of dividend yield;

•Liquidity risk is the possibility that, during times of widespread market turbulence, trading activity in certain securities may be significantly hampered, which may reduce the returns of the fund because it may be unable to sell the

securities at an advantageous price or time. Market prices for such securties may be volatile;


•Market timing risk arises because certain types of securities in which the fund invests, including foreign securities, could cause the fund to be at greater risk of market timing activities by fund shareholders;


•Investing in other investment companies, including ETFs, carries with it the risk that, by investing in another investment company, the fund will be exposed to the risks of the types of investments in which the investment company invests. The fund and its shareholders will indirectly bear the fund’s proportionate share of the fees and expenses paid by shareholders of the other investment company, in addition to the fees and expenses fund shareholders directly bear in connection with the fund’s own operations. ETF shares may trade at a premium or discount to their net asset value. An ETF that tracks an index may not precisely replicate the returns of its benchmark index;

•Quantitative strategy risk is the risk that the success of the fund’s investment strategy may depend in part on the effectiveness of the sub-adviser’s quantitative tools for screening securities. These strategies may incorporate factors that are not predictive of a security’s value. Additionally, a previously successful strategy may become outdated or inaccurate, possibly resulting in losses; and


•Stock market risk is the risk of broad stock market decline or volatility or a decline in particular holdings in response to adverse issuer, political, regulatory, market, economic or other developments, public perceptions concerning these developments, and adverse investor sentiment.

 

Performance | The bar chart that follows illustrates annual fund returns for the periods ended December 31. The table that follows compares the fund’s returns for various periods with benchmark returns. This information is intended to give you some indication of the risk of investing in the fund by demonstrating how its returns have varied over time. The bar chart shows the fund’s Class I share performance from one year to another. The fund’s past performance (before and after taxes) is not necessarily an indication of how the fund will perform in the future. To obtain more current performance data as of the most recent month-end, please visit our website at carillontower.com.

  


During performance period Return Quarter Ended
(Class I shares):    
 Best Quarter 8.01% March 31, 2015
Worst Quarter (15.62)% December 31, 2018

 

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Carillon Mutual Funds

Summary of carillon clarivest international stock fund | 3.1.2019


 

Average annual total returns

(for the periods ended December 31, 2018):

 

Fund return (after deduction of sales charges and expenses)

 

Share Class

Inception

Date

1-yr 5-yr

Lifetime

(if less than

10 yrs)

Class I –Before Taxes 2/28/13

(17.85)%

0.88%

3.75%

After Taxes on Distributions   (18.20)% 0.15% 3.03%
After Taxes on Distributions and Sale of Fund Shares   (10.32)% 0.56% 2.81%
Class A – Before Taxes 2/28/13 (21.98)% (0.50)% 2.47%
Class C – Before Taxes 2/28/13 (18.75)% (0.31)% 2.51%
Class Y – Before Taxes 11/20/17 (18.15)%   (14.01)%
Class R-3 – Before Taxes 2/28/13 (18.31)% 0.30% 3.15%
Class R-5 – Before Taxes 2/28/13 (17.89)% 0.85% 3.72%
Class R-6 – Before Taxes 2/28/13 (17.79)% 0.98% 3.84%

 

Index (reflects no deduction for fees, expenses or taxes) 1-yr 5-yr

Lifetime

(From the inception date of Class Y Shares)

Lifetime

(From Inception Date of Class A, Class C, Class I, Class R-3, Class R-5 and Class R-6 Shares)

MSCI EAFE® Index

(13.79)% 0.53% (9.92)% 3.31%

 

After-tax returns are calculated using the historically 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. After-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements, such as a 401(k) plan or individual retirement account (“IRA”). After-tax returns are shown for Class I only and after-tax returns for Class A, Class C, Class Y, Class R-3, Class R-5, and Class R-6 will vary. The return after taxes on distributions and sale of fund shares may exceed the return before taxes due to an assumed tax benefit from any losses on a sale of fund shares at the end of the measurement period.


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Carillon Mutual Funds

Summary of carillon clarivest international stock fund | 3.1.2019



Investment Adviser | Carillon Tower Advisers, Inc. is the fund’s investment adviser.

 

Sub-adviser | ClariVest Asset Management LLC (“ClariVest”) serves as the sub-adviser to the fund.

 

Portfolio Managers | David R. Vaughn, CFA®, Alex Turner, CFA®, and Priyanshu Mutreja, CFA®, are Portfolio Managers of the fund and are jointly and primarily responsible for the day-to-day management of the fund – Mr. Vaughn since its inception, Mr. Turner since 2015, and Mr. Mutreja since 2017.

 

Purchase and sale of fund shares | You may purchase, redeem, or exchange Class A, C, I and Y shares of the fund on any business day through your financial intermediary, by mail at Carillon Family of Funds, c/o U.S. Bank Global Fund Services, P.O. Box 701, Milwaukee, WI 53201-0701 (for regular mail) or 615 East Michigan Street, Third Floor, Milwaukee, WI, 53202 (for overnight service), or by telephone (800.421.4184). In Class A and Class C shares, the minimum purchase amount is $1,000 for regular accounts, $500 for retirement accounts and $50 through a periodic investment program, with a minimum subsequent investment plan of $50 per month. In Class Y shares, the minimum purchase amount is $1,000 for regular accounts, $100 for retirement accounts and $100 through a periodic investment program, with a minimum subsequent investment plan of $50 per month. For individual investors, the minimum initial purchase for Class I shares is $10,000, while fee-based plan sponsors set their own minimum requirements. Class R-3, Class R-5 and Class R-6 shares can only be purchased through a participating retirement plan and the minimum initial purchase for Class R-3, Class R-5 and Class R-6 shares is set by the plan administrator.

 

Tax information | The dividends you receive from the fund will be taxed as ordinary income or net capital gain (i.e., the excess of net long-term capital gain over net short-term capital loss) unless you are investing through a tax-deferred arrangement, such as a 401(k) plan or an IRA, in which case you may be subject to federal income tax on withdrawals from the arrangement.

 

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 and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the fund over another investment. Ask your salesperson or visit your financial intermediary’s website for more information.


carillontower.com | 9

 

Carillon Mutual Funds
SUMMARY OF CARILLON COUGAR TACTICAL ALLOCATION FUND  |  3.1.2019
 
Investment objective | The Carillon Cougar Tactical Allocation Fund (“Tactical Allocation Fund” or the “fund”) seeks long-term capital appreciation.
 
Fees and expenses of the fund | The tables that follow describe the fees and expenses that you may pay if you buy and hold shares of the Tactical Allocation Fund. You may qualify for sales discounts if you and your family invest, or agree to invest in the future, at least $25,000 in the Class A shares of the Carillon Family of Funds. More information about these and other discounts is available from your financial professional, on page 82 of the fund’s Prospectus and on page 44 of the fund’s Statement of Additional Information. Although the fund does not impose any sales charge on Class I shares, you may pay a commission to your broker on your purchases and sales of those shares, which is not reflected in the tables or Example below.
 
Shareholder fees
(fees paid directly from your investment):
Class
A
Class
C
Class
I
Class
Y
Class
R-3
Class
R-5
Class
R-6
Maximum Sales Charge Imposed on Purchases (as a % of offering price)
4.75%
None
None
None
None
None
None
Maximum Deferred Sales Charge (as a % of original purchase price or redemption proceeds, whichever is lower)
None (a)
1.00% (a)
None
None
None
None
None
Redemption Fee
None
None
None
None
None
None
None
 
Annual fund operating expenses
(expenses that you pay each year as a percentage of the value of your investment):
Class
A
Class
C
Class
I
Class
Y
Class
R-3
Class
R-5
Class
R-6
Management Fees
0.57%
0.57%
0.57%
0.57%
0.57%
0.57%
0.57%
Distribution and Service (12b-1) Fees
0.25%
1.00%
0.00%
0.25%
0.50%
0.00%
0.00%
Other Expenses
1.80%
1.83%
1.85%
2.50%
2.42%
2.03%
2.35%
Acquired Fund Fees and Expenses
0.08%
0.08%
0.08%
0.08%
0.08%
0.08%
0.08%
Total Annual Fund Operating Expenses (b)
2.70%
3.48%
2.50%
3.40%
3.57%
2.68%
3.00%
Fee Waiver and/or Expense Reimbursement (c)
(1.45)%
(1.48)%
(1.55)%
(2.15)%
(2.07)%
(1.73)%
(2.15)%
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement
1.25%
2.00%
0.95%
1.25%
1.50%
0.95%
0.85%
(a) If you purchased $1,000,000 or more of Class A shares of an Carillon mutual fund that were not otherwise eligible for a sales charge waiver and sell the shares within 18 months from the date of purchase, you may pay up to a 1% contingent deferred sales charge at the time of sale. If you sell Class C shares less than one year after purchase, you will pay a 1% CDSC at the time of sale.
(b) The Total Annual Fund Operating Expenses do not correlate to the ratio of expenses to average net assets provided in the fund’s Financial Highlights table, which reflects the operating expenses of the fund and does not include Acquired Fund Fees and Expenses.
(c) Carillon Tower Advisers, Inc. (“Carillon”) has contractually agreed to waive its investment advisory fee and/or reimburse certain expenses of the fund to the extent that: annual operating expenses of each class exceed a percentage of that class’ average daily net assets through February 29, 2020 as follows: Class A - 1.17%, Class C – 1.92%, Class I - 0.87%, Class Y – 1.17%, Class R-3 - 1.42%, Class R-5 – 0.87%, and Class R-6 – 0.77%. This expense limitation excludes interest, taxes, brokerage commissions, costs relating to investments in other investment companies (acquired fund fees and expenses), dividends, and extraordinary expenses. The contractual fee waiver can be changed only with the approval of a majority of the fund’s Board of Trustees. Any reimbursement of fund expenses or reduction in Carillon’s investment advisory fees is subject to reimbursement by the fund within the following two fiscal years, if overall expenses fall below the lesser of its then current expense cap or the expense cap in effect at the time of the fund reimbursement.
 
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Carillon Mutual Funds
SUMMARY OF CARILLON COUGAR TACTICAL ALLOCATION FUND | 3. 1. 2019

Expense example | This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the fund’s operating expenses remain the same, except that the example reflects the fee waiver/expense reimbursement arrangement for each share class through February 29, 2020. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
 
Share Class
Year 1
Year 3
Year 5
Year 10
Class A
$596
$1,142
$1,714
$3,261
Class C
$303
$931
$1,681
$3,658
Class I
$97
$630
$1,191
$2,719
Class Y
$127
$844
$1,584
$3,540
Class R-3
$153
$902
$1,673
$3,700
Class R-5
$97
$668
$1,265
$2,885
Class R-6
$87
$724
$1,387
$3,165

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 fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the fund’s performance. During the most recent fiscal year, the fund’s portfolio turnover rate was 88% of the average value of its portfolio.
 
Principal investment strategies | The fund is a “fund of funds” that seeks to achieve its investment objective by investing its assets primarily in exchange-traded funds (“ETFs”) (“underlying funds”).
 
During normal market conditions, the assets of the Tactical Allocation Fund are allocated among the equity, fixed income, and commodities asset classes through investments in a combination of underlying funds. The allocation of the fund’s assets among underlying funds is based on each underlying fund’s predominant asset class. Each underlying fund, in turn, invests in the equity securities of issuers in the U.S. and in foreign developed and emerging markets that are listed on U.S. exchanges and fixed-income securities and/or commodities, including:
 
common and preferred stocks of all market capitalizations, security types (e.g., convertible securities, real estate investment trusts (“REITs”), rights, warrants and depositary receipts) and investment types (e.g., value and growth) in global markets;
fixed-income securities of any maturity and credit quality, including high yield securities (commonly referred to as “junk bonds”), convertible debt, investment grade corporate bonds, municipal bonds, and both domestic and foreign sovereign debt bonds; and mortgage-backed securities, which are securities that are created by pooling mortgages, and asset-backed securities, which are securities that are created from the pooling non-mortgage assets, such as credit card receivables, home equity loans, student loans and auto-loans; and
commodities, which principally are expected to be gold.
 
The sub-adviser retains discretion to invest the fund’s assets directly in securities and may do so for certain asset classes or investment types if, among other reasons, it is determined that investing in an ETF for that type of investment is not feasible due to, for example, regulatory limitations with respect to an investment in an unaffiliated exchange-traded fund.
 
The sub-adviser employs a proprietary process to forecast broad trends in the U.S. and global economies, which informs the sub-adviser’s selection of underlying funds and the fund’s asset allocation. The sub-adviser uses statistical models to establish the impact such economic trends may have on the asset classes in which the underlying funds may invest. The sub-adviser seeks to minimize downside risk. Accordingly, the sub-adviser seeks an allocation that will provide the highest possible returns consistent with a low level of downside risk.
 
The fund’s overall asset allocation is not fixed and may change significantly over time as the sub-adviser reallocates portions of the portfolio in response to changes in the U.S. and global economies and in various investment markets. The sub-adviser may engage in frequent buying and selling of portfolio securities to pursue the fund’s investment objective. The fund typically will hold a small number of underlying funds.
 
Principal risks | The greatest risk of investing in this fund is that you could lose money. The underlying funds may invest in common stocks whose values increase and decrease in response to the activities of the companies that issued such stocks, general market conditions and/or economic conditions. In addition, the underlying funds may invest in debt securities whose values may be affected by changing interest rates and by changes in the effective maturities and credit ratings of these securities. For example, the values of debt securities generally will decline when interest rates rise and increase when interest rates fall. As a result, the fund’s net asset value (“NAV”) also increases and decreases. The fund is subject to the risks associated with the underlying funds’ investments.  Accordingly, in this section, the term “fund” may include the fund, an underlying fund, or both.  An investment in the fund is
 
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Carillon Mutual Funds
SUMMARY OF CARILLON COUGAR TACTICAL ALLOCATION FUND  |  3.1.2019

 
not a deposit with a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Investments in this fund are subject to the following primary risks, which are described in alphabetical order and not in order of importance or potential exposure:
 
Call risk is the possibility that, as interest rates decline, issuers of callable bonds may call fixed income securities with high interest rates prior to their maturity dates, which may force an underlying fund to invest the unanticipated proceeds at lower interest rates, resulting in a decline in the fund’s income;
 
Commodities risk is the risk that investments in commodities, such as gold, or in commodity-linked instruments, will subject an underlying fund’s portfolio to volatility that may also deviate from price movements in equity and fixed income securities. Commodities and commodities-linked investments are subject to substantial price fluctuations over short periods of time and may be affected by unpredictable economic, political and environmental events. There may be an imperfect correlation between the value of such investments and the underlying assets. Investments in these types of instruments may subject the fund to additional expenses;
 
Credit risk arises if an issuer of a fixed income security is unable to meet its financial obligations or goes bankrupt;
 
Credit ratings risk is the risk associated with the fact that ratings by nationally recognized rating agencies generally represent the agencies’ opinion of the credit quality of an issuer and may prove to be inaccurate;
 
Emerging markets are generally smaller, less developed, less liquid and more volatile than the securities markets of the U.S. and other developed markets. There are also risks of: greater political uncertainties; an economy’s dependence on revenues from particular commodities or on international aid or development assistance; currency transfer restrictions; a limited number of potential buyers for such securities; and delays and disruptions in securities settlement procedures.  When investing in emerging markets, the risks of investing in foreign securities are heightened;
 
Equity securities are subject to stock market risk.
 
Common stock.  The value of a company’s common stock may fall as a result of factors affecting the company, companies in the same industry or sector, or the financial markets overall. Common stock generally is subordinate to preferred stock upon the liquidation or bankruptcy of the issuing company;
 
Preferred stock.  Preferred stocks are sensitive to movements in interest rates. Preferred stocks may be less liquid than common stocks and, unlike common stocks, participation in the growth of an issuer may be limited. Distributions on preferred stocks generally are payable at the discretion of an issuer and after required payments to bond holders;
 
Convertible securities.  Convertible securities are subject to the risk that the credit standing of the issuer may have an effect on the convertible securities’ investment value. Convertible securities also are sensitive to movements in interest rates;
 
REITs.  Investments in REITs are subject to the risks associated with investing in the real estate industry such as adverse developments affecting the real estate industry and real property values;
 
Rights and warrants.  Rights and warrants do not carry dividend or voting rights with respect to the underlying securities or any rights in the assets of the issuer, and a right or a warrant ceases to have value if it is not exercised prior to its expiration date;
 
Depositary receipts.  Investing in depositary receipts entails substantially the same risks as direct investment in foreign securities;
 
Fixed income market risk is the risk that market conditions or other events that impact fixed income issuers, including adverse issuer, political, regulatory, market, economic or other developments that may cause broad changes in market value, public perceptions concerning these developments, and adverse investor sentiment, will have an adverse effect on the underlying funds. Events in the fixed income markets may lead to periods of volatility, unusual liquidity issues and, in some cases, credit downgrades and increased likelihood of default. Such events may cause the value of securities owned by the underlying funds to go up or down, sometimes rapidly or unpredictably, and may lead to increased redemptions, which could cause the underlying funds to experience a loss when selling securities to meet redemption requests by shareholders;
 
Focused holdings risk is the risk of a fund holding a core portfolio of securities of fewer companies than other diversified funds, which means that the increase or decrease of the value of a single investment may have a greater impact on the fund’s NAV and total return when compared to other diversified funds;
 
Foreign security risks, which are potential risks not associated with U.S. investments, include, but are not limited to: (1) currency exchange rate fluctuations, (2) political and financial instability, (3) less liquidity, (4) lack of uniform accounting, auditing and financial reporting standards, (5) increased volatility, (6) less government regulation and supervision of foreign stock exchanges, brokers and listed companies, and (7) delays in transaction settlement in some foreign markets. Foreign security risk may also apply to ADRs, GDRs and EDRs;
 
Fund of funds risk is the risk that, absent an available exemption, the fund’s investments in other investment companies, including ETFs, will be subject to limitations under the Investment Company Act of 1940, as amended (“1940 Act”), and the rules thereunder. Because the fund’s investments are concentrated in underlying funds, and the fund’s performance is directly related to the performance of such underlying funds, the ability of the fund to
 
12 | carillontower.com
Carillon Mutual Funds
SUMMARY OF CARILLON COUGAR TACTICAL ALLOCATION FUND | 3. 1. 2019
 
achieve its investment objective is directly related to the ability of the underlying funds to meet their investment objectives. The investment techniques and risk analysis used by the fund’s and the underlying funds’ portfolio managers may not produce the desired results;
Growth stock risk is the risk of a lack of earnings increase or lack of dividend yield;
 
High-yield security risk results from investments in below investment grade bonds, which have a greater risk of loss, are susceptible to rising interest rates and have greater volatility. Investments in high-yield securities (commonly referred to as “junk bonds”) are inherently speculative;
 
Inflation risk is the risk that high rates of inflation or changes in the market’s inflation expectations may adversely affect the market value of inflation-sensitive securities;
 
Interest rate risk is the risk that the value of a fund’s investments in fixed income securities will fall when interest rates rise. The Federal Reserve raised the federal funds rate several times since December 2015 and may continue to increase rates in the future.  Interest rates may rise, perhaps significantly and/or rapidly, potentially resulting in substantial losses to the underlying funds. The effect of increasing interest rates is more pronounced for any intermediate- or longer-term fixed income obligations owned by an underlying fund;
 
Liquidity risk is the possibility that, during times of widespread market turbulence, trading activity in certain securities may be significantly hampered, which may reduce the returns of the underlying funds because they may be unable to sell the securities at an advantageous price or time or may be forced to sell certain investments at unfavorable prices to meet redemption requests or other cash needs. Market prices for such securities may be volatile;
 
Market risk is the risk of broad securities market decline or volatility or a decline in particular holdings in response to adverse issuer, political, regulatory, market, economic or other developments, public perceptions concerning these developments, and adverse investor sentiment;
 
Market timing risk arises because certain types of securities in which the underlying funds invest, including small-cap securities, could cause the underlying funds to be at greater risk of market timing activities by fund shareholders;
 
Mid-cap company risk arises because mid-cap companies may have narrower commercial markets, limited managerial and financial resources, more volatile performance, and less liquid stock, compared to larger, more established companies;
 
Mortgage- and asset-backed security risk, which is possible in an unstable or depressed housing market, arises from the potential for mortgage failure, premature repayment of principal, or a delay in the repayment of principal;
 
Municipal securities risk is the possibility that a municipal security’s value, interest payments or repayment of principal could be affected by economic, legislative or political changes. Municipal securities are also subject to potential volatility in the municipal market and the fund’s share price, yield and total return may fluctuate in response to municipal bond market movements;
 
Investing in other investment companies, including ETFs, carries with it the risk that, by investing in another investment company, the fund will be exposed to the risks of the types of investments in which the investment company invests.  The fund and its shareholders will indirectly bear the fund’s proportionate share of the fees and expenses paid by shareholders of the other investment company, in addition to the fees and expenses fund shareholders directly bear in connection with the fund’s own operations. ETF shares may trade at a premium or discount to their NAV. An ETF that tracks an index may not precisely replicate the returns of its benchmark index;
 
Portfolio turnover risk is the risk that performance may be adversely affected by a high rate of portfolio turnover, which generally leads to greater transaction costs;
 
Redemption risk is, with respect to the underlying funds’ fixed income investments, the risk that, due to a rise in interest rates or other changing government policies that may cause investors to move out of fixed income securities on a large scale, the underlying funds may experience periods of heavy redemptions that could cause the underlying funds to sell assets at inopportune times or at a loss or depressed value;
 
Small-cap company risk arises because small-cap companies may have less liquid stock, a more volatile share price, a limited product or service base, narrower commercial markets and limited access to capital, compared to larger, more established companies;
 
U.S. government securities and government-sponsored enterprises risk arises because a security backed by the U.S. Treasury or the full faith and credit of the United States is guaranteed by the applicable entity only as to the timely payment of interest and principal when held to maturity. The market prices for such securities are not guaranteed and will fluctuate. Securities held by an underlying fund that are issued by government-sponsored enterprises, such as the Federal National Mortgage Association (‘'Fannie Mae''), the Federal Home Loan Mortgage Corporation (''Freddie Mac''), Federal Home Loan Banks, Federal Farm Credit Banks, and the Tennessee Valley Authority are not guaranteed by the U.S. Treasury and are not backed by the full faith and credit of the U.S. Government. U.S. Government securities and securities of government sponsored enterprises are also subject to credit risk, interest rate risk and market risk; and
 
Value stock risk arises from the possibility that a stock’s intrinsic value may not be fully realized by the market.
 
Performance | The bar chart that follows illustrates annual fund returns for the periods ended December 31. The table that follows compares the fund’s returns for various periods with benchmark returns. This information is intended to give you some indication of the risk of investing in the fund by demonstrating how its returns have varied over time. The bar chart shows the fund’s Class I share performance during the fund’s first full calendar year of operations. Each of the fund’s share classes is invested in the same portfolio of securities, and the annual returns would have differed only to the extent that the classes do not have the same sales charges and expenses. The fund’s past performance (before and after taxes) is not necessarily an indication of how the fund will perform in the future. To obtain more current performance data as of the most recent month-end, please visit our website at carillontower.com.
 
carillontower.com | 13

Carillon Mutual Funds
SUMMARY OF CARILLON COUGAR TACTICAL ALLOCATION FUND  |  3.1.2019

 
 
During performance period
Return
Quarter Ended
(Class I shares):
   
Best Quarter
4.82%
September 30, 2018
Worst Quarter
(12.08)%
December 31, 2018

Average annual total returns
(for the periods ended December 31, 2018):

Fund return (after deduction of sales charges and expenses)
 
Share Class
Inception Date 1-yr Lifetime (if less than 10 yrs)
Class I – Before Taxes
12/31/15 (7.15)% 2.59%
After Taxes on Distributions
 
(8.19)%
1.80%
After Taxes on Distributions and Sale of Fund Shares
 
(3.67)%
1.83%
Class A – Before Taxes
12/31/15
(11.83)%
0.66%
Class C – Before Taxes
12/31/15
(8.07)%
1.53%
Class Y – Before Taxes
11/20/17
(7.40)%
(4.63)%
Class R-3 – Before Taxes
12/31/15
(7.62)%
2.07%
Class R-5 – Before Taxes
12/31/15
(7.18)%
2.61%
Class R-6 – Before Taxes
12/31/15
(7.01)%
2.72%
 
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Carillon Mutual Funds
SUMMARY OF CARILLON COUGAR TACTICAL ALLOCATION FUND | 3. 1. 2019

 
Index (reflects no deduction for fees, expenses or taxes)
1-yr
Lifetime
(From Inception
Date of Class Y Shares)
Lifetime
(From Inception Date of Class A, Class C, Class I, Class R-3, Class R-5 and Class R-6 Shares)
60% Bloomberg Barclays U.S. Aggregate Bond Index/40% MSCI ACWI Index
 (3.63)%
(1.92)%
 4.01%

After-tax returns are calculated using the historically 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. After-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements, such as a 401(k) plan or individual retirement account (“IRA”). After-tax returns are shown for Class I only and after-tax returns for Class A, Class C, Class Y, Class R-3, Class R-5, and Class R-6 will vary. The return after taxes on distributions and sale of fund shares may exceed the return before taxes due to an assumed tax benefit from any losses on a sale of fund shares at the end of the measurement period.
 
Investment Adviser | Carillon Tower Advisers, Inc. is the fund’s investment adviser.
 
Sub-adviser | Cougar Global Investments Limited (“Cougar Global”) serves as the sub-adviser to the fund.
 
Portfolio Manager | Abdullah Sheikh, FSA, MAAA, is primarily responsible for the day-to-day management of the fund.  Mr. Sheikh has been Portfolio Manager of the fund since April 2018.
 
Purchase and sale of fund shares | You may purchase, redeem, or exchange Class A, C, I and Y shares of the fund on any business day through your financial intermediary, by mail at Carillon Family of Funds, c/o U.S. Bank Global Fund Services, P.O. Box 701, Milwaukee, WI 53201-0701 (for regular mail) or 615 East Michigan Street, Third Floor, Milwaukee, WI, 53202 (for overnight service), or by telephone (800.421.4184). In Class A and Class C shares, the minimum purchase amount is $1,000 for regular accounts, $500 for retirement accounts and $50 through a periodic investment program, with a minimum subsequent investment plan of $50 per month.  In Class Y shares, the minimum purchase amount is $1,000 for regular accounts, $100 for retirement accounts and $100 through a periodic investment program, with a minimum subsequent investment plan of $50 per month.  For individual investors, the minimum initial purchase for Class I shares is $10,000, while fee-based plan sponsors set their own minimum requirements.  Class R-3, Class R-5 and Class R-6 shares can only be purchased through a participating retirement plan and the minimum initial purchase for Class R-3, Class R-5 and Class R-6 shares is set by the plan administrator.
 
Tax information | The dividends you receive from the fund will be taxed as ordinary income or net capital gain (i.e., the excess of net long-term capital gain over net short-term capital loss) unless you are investing through a tax-deferred arrangement, such as a 401(k) plan or an IRA, in which case you may be subject to federal income tax on withdrawals from the arrangement.
 
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 and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the fund over another investment. Ask your salesperson or visit your financial intermediary’s website for more information.
 
carillontower.com | 15

Carillon Mutual Funds
SUMMARY OF CARILLON EAGLE GROWTH & INCOME FUND  |  3.1.2019

 
Investment objective | The Carillon Eagle Growth & Income Fund (“Growth & Income Fund” or the “fund”) primarily seeks long-term capital appreciation and, secondarily, seeks current income.
 
Fees and expenses of the fund | The tables that follow describe the fees and expenses that you may pay if you buy and hold shares of the Growth & Income Fund. You may qualify for sales discounts if you and your family invest, or agree to invest in the future, at least $25,000 in the Class A shares of the Carillon Family of Funds. More information about these and other discounts is available from your financial professional, on page 82 of the fund’s Prospectus and on page 44 of the fund’s Statement of Additional Information. Although the fund does not impose any sales charge on Class I shares, you may pay a commission to your broker on your purchases and sales of those shares, which is not reflected in the tables or Example below.

Shareholder fees
(fees paid directly from your investment): 
Class
A
Class
C
Class
I
Class
Y
Class
R-3
Class
R-5
Class
R-6
Maximum Sales Charge Imposed on Purchases (as a % of offering price)
4.75%
None
None
None
None
None
None
Maximum Deferred Sales Charge (as a % of original purchase price or redemption proceeds, whichever is lower)
None (a)
1.00% (a)
None
None
None
None
None
Redemption Fee
None
None
None
None
None
None
None

Annual fund operating expenses
(expenses that you pay each year as a percentage of the value of your investment):
Class
A
Class
C
Class
I
Class
Y
Class
R-3
Class
R-5
Class
R-6
Management Fees
0.47%
0.47%
0.47%
0.47%
0.47%
0.47%
0.47%
Distribution and Service (12b-1) Fees
0.25%
1.00%
0.00%
0.25%
0.50%
0.00%
0.00%
Other Expenses
0.25%(b)
0.26%
0.25%
0.71%
0.33%(b)
0.31%
0.17%
Total Annual Fund Operating Expenses
0.97%
1.73%
0.72%
1.43%
1.30%
0.78%
0.64%
Fee Waiver and/or Expense Reimbursement (c)
0.00%
0.00%
0.00%
(0.18)%
0.00%
0.00%
0.00%
Total Annual Fund Operating Expenses After
0.97%
1.73%
0.72%
1.25%
1.30%
0.78%
0.64%
 
(a) If you purchased $1,000,000 or more of Class A shares of a Carillon mutual fund that were not otherwise eligible for a sales charge waiver and sell the shares within 18 months from the date of purchase, you may pay up to a 1% contingent deferred sales charge at the time of sale. If you sell Class C shares less than one year after purchase, you will pay a 1% CDSC at the time of sale.
(b) Other expenses have been restated to reflect the current administrative services fee rate.
(c) Carillon Tower Advisers, Inc. (“Carillon”) has contractually agreed to waive its investment advisory fee and/or reimburse certain expenses of the fund to the extent that: annual operating expenses of each class exceed a percentage of that class’ average daily net assets through February 29, 2020 as follows: Class A - 1.25%, Class C – 2.00%, Class I - 0.95%, Class Y – 1.25%, Class R-3 - 1.50%, Class R-5 – 0.95%, and Class R-6 – 0.85%. This expense limitation excludes interest, taxes, brokerage commissions, costs relating to investments in other investment companies (acquired fund fees and expenses), dividends, and extraordinary expenses. The contractual fee waiver can be changed only with the approval of a majority of the fund’s Board of Trustees. Any reimbursement of fund expenses or reduction in Carillon’s investment advisory fees is subject to reimbursement by the fund within the following two fiscal years, if overall expenses fall below the lesser of its then current expense cap or the expense cap in effect at the time of the fund reimbursement.
 
Expense example | This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the fund’s operating expenses remain the same, except that the example reflects the fee waiver/expense reimbursement arrangement for each share class through February 29, 2020. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
 
16 | carillontower.com

Carillon Mutual Funds
SUMMARY OF CARILLON EAGLE GROWTH & INCOME FUND  |  3.1.2019

 
Share Class
Year 1
Year 3
Year 5
Year 10
Class A
$569
$769
$986
$1,608
Class C
$276
$545
$939
$2,041
Class I
$74
$230
$401
$894
Class Y
$127
$435
$765
$1,698
Class R-3
$132
$412
$713
$1,568
Class R-5
$80
$249
$433
$966
Class R-6
$65
$205
$357
$798

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 fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the fund’s performance. During the most recent fiscal year, the fund’s portfolio turnover rate was 10% of the average value of its portfolio.
 
Principal investment strategies | During normal market conditions, the Growth & Income Fund seeks to achieve its objective by investing primarily in domestic equity securities (predominantly common stocks) that the portfolio managers believe are high-quality, financially strong companies that pay above-market dividends, have cash resources (i.e. free cash flow) and a history of raising dividends. The portfolio managers select companies based in part upon their belief that those companies have the following characteristics: (1) yield or dividend growth at or above the S&P 500 Index; (2) potential for growth; and (3) stock price below its estimated intrinsic value. The fund generally sells securities when their price appreciations reach or exceed sustainable levels, a company’s fundamentals deteriorate, or a more attractive investment opportunity develops. Equity securities purchased by the fund typically include common stocks, convertible securities, preferred stocks, and real estate investment trusts (“REITs”). In addition, the fund generally invests in mid- and large-capitalization companies that are diversified across different industries and sectors. From time to time, the fund’s portfolio may include the stocks of fewer companies than other diversified funds.

The fund also may own a variety of other securities that, in the opinion of the fund’s portfolio managers, offer prospects for meeting the fund’s investment goals. These securities include equity securities of companies economically tied to countries outside of the U.S.
 
Principal risks | The greatest risk of investing in the fund is that you could lose money. The fund invests primarily in common stocks whose values increase and decrease in response to the activities of the companies that issued such stocks, general market conditions and/or economic conditions. As a result, the fund’s net asset value (“NAV”) also increases and decreases. An investment in the fund is not a deposit with a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Investments in this fund are subject to the following primary risks, which are described in alphabetical order and not in order of importance or potential exposure:
 
Equity securities are subject to stock market risk.
 
Common stock.  The value of a company's common stock may fall as a result of factors affecting the company, companies in the same industry or sector, or the financial markets overall. Common stock generally is subordinate to preferred stock upon the liquidation or bankruptcy of the issuing company;
 
Preferred stock.  Preferred stocks are sensitive to movements in interest rates. Preferred stocks may be less liquid than common stocks and, unlike common stocks, participation in the growth of an issuer may be limited. Distributions on preferred stocks generally are payable at the discretion of an issuer and after required payments to bond holders;
 
Convertible securities.  Convertible securities are subject to the risk that the credit standing of the issuer may have an effect on the convertible securities’ investment value. Convertible securities also are sensitive to movements in interest rates;
 
REITs.  Investments in REITs are subject to the risks associated with investing in the real estate industry such as adverse developments affecting the real estate industry and real property values;
 
Dividend-Paying Stocks.  Securities of companies that have historically paid a high dividend yield may reduce or discontinue their dividends, reducing the yield of the Fund. Low priced securities in the fund may be more susceptible to these risks. Past dividend payments are not a guarantee of future dividend payments. Also, the market return of high dividend yield securities, in certain market conditions, may perform worse than other investment strategies or the overall stock market.
 
carillontower.com | 17

Carillon Mutual Funds
SUMMARY OF CARILLON EAGLE GROWTH & INCOME FUND   |   3 . 1 . 2 0 1 9

 

•Focused holdings risk is the risk of a fund holding a core portfolio of securities of fewer companies than other diversified funds, which means that the increase or decrease of the value of a single investment may have a greater impact on the fund’s NAV and total return when compared to other diversified funds;

 

•Foreign security risks, which are potential risks not associated with U.S. investments, include, but are not limited to: (1) currency exchange rate fluctuations, (2) political and financial instability, (3) less liquidity, (4) lack of uniform accounting, auditing and financial reporting standards, (5) increased volatility, (6) less government regulation and supervision of foreign stock exchanges, brokers and listed companies, and (7) delays in transaction settlement in some foreign markets. Foreign security risk may also apply to ADRs, GDRs and EDRs;

 

•Growth stock risk is the risk of a lack of earnings increase or lack of dividend yield;

 

•Mid-cap company risk arises because mid-cap companies may have narrower commercial markets, limited managerial and financial resources, more volatile performance, and less liquid stock, compared to larger, more established companies;

 

•Stock market risk is the risk of broad stock market decline or volatility or a decline in particular holdings in response to adverse issuer, political, regulatory, market, economic or other developments, public perceptions concerning these developments, and adverse investor sentiment.

 

•Value stock risk arises from the possibility that a stock’s intrinsic value may not be fully realized by the market.

 

Performance | The bar chart that follows illustrates annual fund returns for the periods ended December 31. The table that follows compares the fund’s returns for various periods with benchmark returns. This information is intended to give you some indication of the risk of investing in the fund by demonstrating how its returns have varied over time. The bar chart shows the fund’s Class A share performance from one year to another. Each of the fund’s share classes is invested in the same portfolio of securities, and the annual returns would have differed only to the extent that the classes do not have the same sales charges and expenses. The fund’s past performance (before and after taxes) is not necessarily an indication of how the fund will perform in the future. To obtain more current performance data as of the most recent month-end, please visit our website at carillontower.com.

 

 

During 10 year period Return Quarter Ended
(Class A shares):    
Best Quarter 23.28% June 30, 2009
Worst Quarter (11.94)% September 30, 2011

 

The returns in the preceding bar chart and table do not reflect sales charges. If the sales charges were reflected, the returns would be lower than those shown.

 

Average annual total returns (for the periods ended December 31, 2018):

 

Fund return (after deduction of sales charges and expenses)

 

Share Class

Inception

Date

1-yr 5-yr 10-yr

Lifetime

(if less than

10 yrs)

Class A – Before Taxes 12/15/86 (6.50)% 5.99% 11.28%  
After Taxes on Distributions   (8.59)% 4.78% 10.29%  
After Taxes on Distributions and Sale of Fund Shares   (2.37)% 4.60% 9.29%  
 
18    |   carillontower.com 

Carillon Mutual Funds
SUMMARY OF CARILLON EAGLE GROWTH & INCOME FUN D   |   3.1.2019

 
Class C – Before Taxes 4/3/95 (2.62)% 6.21% 10.99%  
Class I – Before Taxes 3/18/09 (1.64)% 7.31%   13.85%
Class Y – Before Taxes 11/20/17 (2.18)%     2.82%
Class R-3 – Before Taxes 9/30/09 (2.19)% 6.65%   9.68%
Class R-5 – Before Taxes 12/28/09 (1.65)% 7.20%   10.16%
Class R-6 – Before Taxes 8/15/11 (1.51)% 7.36%   11.46%
 
Index (reflects no deduction for fees, expenses or taxes) 1-yr 5-yr 10-yr

Lifetime

(From Inception Date of Class I Shares)

Lifetime

(From Inception Date of Class Y Shares)

Lifetime

(From Inception Date of Class R-3 Shares)

Lifetime

(From Inception Date of Class R-5 Shares)

Lifetime

(From Inception Date of Class R-6 Shares)

S&P 500® Index

 

(4.38)% 8.49% 13.12% 14.84% (0.71)% 12.10% 11.58% 12.80%
                 

After-tax returns are calculated using the historically 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. After-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements, such as a 401(k) plan or individual retirement account (“IRA”). After-tax returns are shown for Class A only and after-tax returns for Class C, Class I, Class Y, Class R-3, Class R-5, and Class R-6 will vary. The return after taxes on distributions and sale of fund shares may exceed the return before taxes due to an assumed tax benefit from any losses on a sale of fund shares at the end of the measurement period.

 

Investment Adviser | Carillon Tower Advisers, Inc. is the fund’s investment adviser.

 

Sub-adviser | Eagle Asset Management, Inc. serves as the sub-adviser to the fund.

 

Portfolio Managers | Edmund Cowart, CFA®, David Blount, CFA®, CPA, and Harald Hvideberg, CFA®, are Portfolio Managers of the fund and are jointly and primarily responsible for the day-to-day management of the fund. Messrs. Cowart and Blount have been Portfolio Managers of the fund since 2011. Mr. Hvideberg has served as the fund’s Portfolio Manager since 2014.

 

Purchase and sale of fund shares | You may purchase, redeem, or exchange Class A, C, I and Y shares of the fund on any business day through your financial intermediary, by mail at Carillon Family of Funds, c/o U.S.

 

Bank Global Fund Services, P.O. Box 701, Milwaukee, WI 53201-0701 (for regular mail) or 615 East Michigan Street, Third Floor, Milwaukee, WI, 53202 (for overnight service), or by telephone (800.421.4184). In Class A and Class C shares, the minimum purchase amount is $1,000 for regular accounts, $500 for retirement accounts and $50 through a periodic investment program, with a minimum subsequent investment plan of $50 per month. In Class Y shares, the minimum purchase amount is $1,000 for regular accounts, $100 for retirement accounts and $100 through a periodic investment program, with a minimum subsequent investment plan of $50 per month. For individual investors, the minimum initial purchase for Class I shares is $10,000, while fee-based plan sponsors set their own minimum requirements. Class R-3, Class R-5 and Class R-6 shares can only be purchased through a participating retirement plan and the minimum initial purchase for Class R-3, Class R-5 and Class R-6 shares is set by the plan administrator.

 

Tax information | The dividends you receive from the fund will be taxed as ordinary income or net capital gain (i.e., the excess of net long-term capital gain over net short-term capital loss) unless you are investing through a tax-deferred arrangement, such as a 401(k) plan or an IRA, in which case you may be subject to federal income tax on withdrawals from the arrangement.

 

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 and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the fund over another investment. Ask your salesperson or visit your financial intermediary’s website for more information.

carillontower.com   |   19


Carillon Mutual Funds
SUMMARY OF CARILLON EAGLE MID CAP GROWTH FUND   |   3 . 1 . 2 0 1 9

 

Investment objective | The Carillon Eagle Mid Cap Growth Fund (“Mid Cap Growth Fund” or the “fund”) seeks long-term capital appreciation.

 

Fees and expenses of the fund | The tables that follow describe the fees and expenses that you may pay if you buy and hold shares of the Mid Cap Growth Fund. You may qualify for sales discounts if you and your family invest, or agree to invest in the future, at least $25,000 in the Class A shares of the Carillon Family of Funds. More information about these and other discounts is available from your financial professional, on page 82 of the fund’s Prospectus and on page 44 of the fund’s Statement of Additional Information. Although the fund does not impose any sales charge on Class I shares, you may pay a commission to your broker on your purchases and sales of those shares, which is not reflected in the tables or Example below.

 

Shareholder fees

(fees paid directly from your investment):

Class

A

Class

C

Class

I

Class
Y

Class R-3

 

Class R-5

 

Class R-6

 

Maximum Sales Charge Imposed on Purchases (as a % of offering price) 4.75% None None None None None None
Maximum Deferred Sales Charge (as a % of original purchase price or redemption proceeds, whichever is lower) None (a) 1.00% (a) None None None None None
Redemption Fee None None None None None None None

 

Annual fund operating expenses

(expenses that you pay each year as a percentage of the value of your investment):

Class

A

Class

C

Class

I

Class

Y

Class

R-3

Class

R-5

Class

R-6

Management Fees 0.52% 0.52% 0.52% 0.52% 0.52% 0.52% 0.52%
Distribution and Service (12b-1) Fees 0.25% 1.00% 0.00% 0.25% 0.50% 0.00% 0.00%
Other Expenses 0.27%(b) 0.22% 0.23% 0.36% 0.30% 0.23% 0.14%
Total Annual Fund Operating Expenses 1.04% 1.74% 0.75% 1.13% 1.32% 0.75% 0.66%

 

(a) If you purchased $1,000,000 or more of Class A shares of a Carillon mutual fund that were not otherwise eligible for a sales charge waiver and sell the shares within 18 months from the date of purchase, you may pay up to a 1% contingent deferred sales charge at the time of sale. If you sell Class C shares less than one year after purchase, you will pay a 1% CDSC at the time of sale.

(b) Other expenses have been restated to reflect the current administrative services fee rate.

 

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

 

Share Class Year 1 Year 3 Year 5 Year 10
Class A $576 $790 $1,022 $1,686
Class C $277 $548 $944 $2,052
Class I $77 $240 $417 $930
Class Y $115 $359 $622 $1,375
Class R-3 $134 $418 $723 $1,590
Class R-5 $77 $240 $417 $930
Class R-6 $67 $211 $368 $822

 

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 fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the fund’s performance. During the most recent fiscal year, the fund’s

 

20    |   carillontower.com


Carillon Mutual Funds
SUMMARY OF CARILLON EAGLE MID CAP GROWTH FUND   |   3 . 1 . 2 0 1 9

 portfolio turnover rate was 44% of the average value of its portfolio.

 

Principal investment strategies | During normal market conditions, the Mid Cap Growth Fund seeks to achieve its objective by investing at least 80% of its net assets (plus the amount of any borrowings for investment purposes) in the equity securities of mid-capitalization companies. The fund’s portfolio managers consider mid-capitalization companies to be those companies that, at the time of initial purchase, have market capitalizations greater than $1 billion and equal to or less than the largest company in the Russell Midcap® Growth Index during the most recent 12-month period (approximately $ 42.0 billion during the 12-month period ended December 31, 2018).

 

The fund will invest primarily in the equity securities of companies that the portfolio managers believe have the potential for above-average earnings or sales growth, reasonable valuations and acceptable debt levels. Such stocks can typically have high price-to-earnings ratios. Equity securities include common and preferred stock, warrants or rights exercisable into common or preferred stock and high-quality convertible securities. Although the portfolio managers generally do not emphasize investment in any particular investment sector or industry, the fund may invest a significant portion of its assets in the securities of companies in the information technology sector at any given time. The fund will generally sell when the stock has met the portfolio managers’ target price, the investment is no longer valid, a better investment opportunity has arisen or if the investment reaches a value more than 5% of the fund’s net assets. At times, the fund may hold securities of small-capitalization companies.

 

Principal risks | The greatest risk of investing in the fund is that you could lose money. The fund invests primarily in common stocks whose values increase and decrease in response to the activities of the companies that issued such stocks, general market conditions and/or economic conditions. As a result, the fund’s net asset value (“NAV”) also increases and decreases. An investment in the fund is not a deposit with a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Investments in this fund are subject to the following primary risks, which are described in alphabetical order and not in order of importance or potential exposure:

 

•Equity securities are subject to stock market risk.

 

Common stock. The value of a company's common stock may fall as a result of factors affecting the company, companies in the same industry or sector, or the financial markets overall. Common stock generally is subordinate to preferred stock upon the liquidation or bankruptcy of the issuing company;

 

Preferred stock. Preferred stocks are sensitive to movements in interest rates. Preferred stocks may be less liquid than common stocks and, unlike common stocks, participation in the growth of an issuer may be limited. Distributions on preferred stocks generally are payable at the discretion of an issuer and after required payments to bond holders;

 

Convertible securities. Convertible securities are subject to the risk that the credit standing of the issuer may have an effect on the convertible securities’ investment value. Convertible securities also are sensitive to movements in interest rates;

 

Rights and warrants. Rights and warrants do not carry dividend or voting rights with respect to the underlying securities or any rights in the assets of the issuer, and a right or a warrant ceases to have value if it is not exercised prior to its expiration date;

 

•Growth stock risk is the risk of a lack of earnings increase or lack of dividend yield;

 

•Mid-cap company risk arises because mid-cap companies may have narrower commercial markets, limited managerial and financial resources, more volatile performance, and less liquid stock, compared to larger, more established companies;

 

•Sector risk is the risk associated with the fund holding a core portfolio of stocks invested in similar businesses, all of which could be affected by the same economic or market conditions.

 

Information technology sector risk is the risk that products of information technology companies may face rapid product obsolescence due to technological developments and frequent new product introduction, unpredictable changes in growth rates and competition for the services of qualified personnel. Failure to introduce new products, develop and maintain a loyal customer base or achieve general market acceptance for their products could have a material adverse effect on a company's business. Companies in the information technology sector are heavily dependent on intellectual property and the loss of patent, copyright and trademark protections may adversely affect the profitability of these companies;

 

•Small-cap company risk arises because small-cap companies may have less liquid stock, a more volatile share price, a limited product or service base, narrower commercial markets and limited access to capital, compared to larger, more established companies; and

 

•Stock market risk is the risk of broad stock market decline or volatility or a decline in particular holdings in response to adverse issuer, political, regulatory, market, economic or other developments, public perceptions concerning these developments, and adverse investor sentiment.

 

carillontower.com   |   21


Carillon Mutual Funds
SUMMARY OF CARILLON EAGLE MID CAP GROWTH FUND   |   3 . 1 . 2 0 1 9

 

Performance | The bar chart that follows illustrates annual fund returns for the periods ended December 31. The table that follows compares the fund’s returns for various periods with benchmark returns. This information is intended to give you some indication of the risk of investing in the fund by demonstrating how its returns have varied over time. The bar chart shows the fund’s Class I share performance from one year to another. Each of the fund’s share classes is invested in the same portfolio of securities, and the annual returns would have differed only to the extent that the classes do not have the same sales charges and expenses. The fund’s past performance (before and after taxes) is not necessarily an indication of how the fund will perform in the future. To obtain more current performance data as of the most recent month-end, please visit our website at carillontower.com.

 

 

 

During 10 year period Return Quarter Ended
(Class I shares):    
Best Quarter 18.46% December 31, 2010
Worst Quarter (21.73)% September 30, 2011

Average annual total returns (for the periods ended December 31, 2018):

 

Fund return (after deduction of sales charges and expenses)

 

Share Class

Inception

Date

1-yr 5-yr 10-yr

Lifetime

(if less than 10 yrs)

Class I –Before Taxes 6/21/06 (6.09)% 8.13% 14.79%  
After Taxes on Distributions   (7.22)% 7.20% 14.11%  
After Taxes on Distributions and Sale of Fund Shares   (2.70)% 6.32% 14.46%  
Class A – Before Taxes 8/20/98 (10.84)% 6.73% 13.83%  
Class C – Before Taxes 8/20/98 (7.03)% 7.01% 13.57%  
Class Y – Before Taxes 11/20/17 (6.49)%     (5.49)%
Class R-3 – Before Taxes 1/12/09 (6.63)% 7.48%   14.37%
Class R-5 – Before Taxes 12/28/09 (6.10)% 8.10%   12.08%
Class R-6 – Before Taxes 8/15/11 (6.01)% 8.24%   12.26%
 
22    |   carillontower.com 

 
 
Carillon Mutual Funds
SUMMARY OF CARILLON EAGLE MID CAP GROWTH FUND   |   3 . 1 . 2 0 1 9

 

Index (reflects no deduction for fees, expenses or taxes) 1-yr 5-yr 10-yr

Lifetime

(From Inception Date of Class Y Shares)

Lifetime

(From Inception Date of Class R-3 Shares)

Lifetime (From Inception Date of Class R-5 Shares) Lifetime (From Inception Date of Class R-6 Shares) Lifetime (From Inception Date of Class R-6 Shares) Lifetime (From Inception Date of Class R-6 Shares)

Russell Midcap® Growth Index

(4.75)% 7.42% 15.12% (2.17)% 15.32% 11.90% 11.77%

 

After-tax returns are calculated using the historically 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. After-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements, such as a 401(k) plan or individual retirement account (“IRA”). After-tax returns are shown for Class I only and after-tax returns for Class A, Class C, Class Y, Class R-3, Class R-5, and Class R-6 will vary. The return after taxes on distributions and sale of fund shares may exceed the return before taxes due to an assumed tax benefit from any losses on a sale of fund shares at the end of the measurement period.

 

Investment Adviser | Carillon Tower Advisers, Inc. is the fund’s investment adviser.

 

Sub-adviser | Eagle Asset Management, Inc. serves as the sub-adviser to the fund.

 

Portfolio Managers | Bert L. Boksen, CFA®, and Eric Mintz, CFA®, are Portfolio Managers of the fund and are jointly and primarily responsible for all aspects of the fund’s management. Mr. Boksen has managed the fund since its inception and Mr. Mintz has managed the fund since 2011. Christopher Sassouni, D.M.D., has served as Assistant Portfolio Manager of the fund since 2006.

 

Purchase and sale of fund shares | You may purchase, redeem, or exchange Class A, C, I and Y shares of the fund on any business day through your financial intermediary, by mail at Carillon Family of Funds, c/o U.S. Bank Global Fund Services, P.O. Box 701, Milwaukee, WI 53201-0701 (for regular mail) or 615 East Michigan Street, Third Floor, Milwaukee, WI, 53202 (for overnight service), or by telephone (800.421.4184). In Class A and Class C shares, the minimum purchase amount is $1,000 for regular accounts, $500 for retirement accounts and $50 through a periodic investment program, with a minimum subsequent investment plan of $50 per month. In Class Y shares, the minimum purchase amount is $1,000 for regular accounts, $100 for retirement accounts and $100 through a periodic investment program, with a minimum subsequent investment plan of $50 per month. For individual investors, the minimum initial purchase for Class I shares is $ 10,000, while fee-based plan sponsors set their own minimum requirements. Class R-3, Class R-5 and Class R-6 shares can only be purchased through a participating retirement plan and the minimum initial purchase for Class R-3, Class R-5 and Class R-6 shares is set by the plan administrator.

 

Tax information | The dividends you receive from the fund will be taxed as ordinary income or net capital gain (i.e., the excess of net long-term capital gain over net short-term capital loss) unless you are investing through a tax-deferred arrangement, such as a 401(k) plan or an IRA, in which case you may be subject to federal income tax on withdrawals from the arrangement.

 

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 and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the fund over another investment. Ask your salesperson or visit your financial intermediary’s website for more information.

 

carillontower.com   |   23


Carillon Mutual Funds
Summary of carillon eagle small cap growth fund | 3.1.2019



Investment objective | The Carillon Eagle Small Cap Growth Fund (“Small Cap Growth Fund” or the “fund”) seeks long-term capital appreciation.

 

Fees and expenses of the fund | The tables that follow describe the fees and expenses that you may pay if you buy and hold shares of the Small Cap Growth Fund. You may qualify for sales discounts if you and your family invest, or agree to invest in the future, at least $25,000 in the Class A shares of the Carillon Family of Funds. More information about these and other discounts is available from your financial professional, on page 82 of the fund’s Prospectus and on page 44 of the fund’s Statement of Additional Information. Although the fund does not impose any sales charge on Class I shares, you may pay a commission to your broker on your purchases and sales of those shares, which is not reflected in the tables or Example below.

 

Shareholder fees

(fees paid directly from your investment):

Class

A

Class

C

Class

I

Class
Y

Class

R-3

Class

R-5

Class

R-6

Maximum Sales Charge Imposed on Purchases (as a % of offering price) 4.75% None None None None None None
Maximum Deferred Sales Charge (as a % of original purchase price or redemption proceeds, whichever is lower) None (a) 1.00% (a) None None None None None
Redemption Fee None None None None None None None

 

Annual fund operating expenses

(expenses that you pay each year as a percentage of the value of your investment):

Class

A

Class

C

Class

I

Class

Y

Class

R-3

Class

R-5

Class

R-6

Management Fees 0.51% 0.51% 0.51% 0.51% 0.51% 0.51% 0.51%
Distribution and Service (12b-1) Fees 0.25% 1.00% 0.00% 0.25% 0.50% 0.00% 0.00%
Other Expenses 0.28%(b) 0.23%(b) 0.24% 0.36% 0.31% 0.24% 0.14%
Total Annual Fund Operating Expenses 1.04% 1.74% 0.75% 1.12% 1.32% 0.75% 0.65%

 

(a) If you purchased $1,000,000 or more of Class A shares of an Carillon mutual fund that were not otherwise eligible for a sales charge waiver and sell the shares within 18 months from the date of purchase, you may pay up to a 1% contingent deferred sales charge at the time of sale. If you sell Class C shares less than one year after purchase, you will pay a 1% CDSC at the time of sale.

 

(b) Other expenses have been restated to reflect the current administrative services fee rate.

 

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

 

Share Class Year 1 Year 3 Year 5 Year 10
Class A $576 $790 $1,022 $1,686
Class C $277 $548 $944 $2,052
Class I $77 $240 $417 $930
Class Y $114 $356 $617 $1,363
Class R-3 $134 $418 $723 $1,590
Class R-5 $77 $240 $417 $930
Class R-6 $66 $208 $362 $810
 
 24    |   carillontower.com 

Carillon Mutual Funds
Summary of carillon eagle small cap growth fund | 3.1.2019

 

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 fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the fund’s performance. During the most recent fiscal year, the fund’s portfolio turnover rate was 35% of the average value of its portfolio.

 

Principal investment strategies | During normal market conditions, the Small Cap Growth Fund seeks to achieve its objective by investing at least 80% of its net assets (plus the amount of any borrowings for investment purposes) in the stocks of small-capitalization companies. The fund’s portfolio managers consider small-capitalization companies to be those companies that, at the time of initial purchase, have a market capitalization equal to or less than the largest company in the Russell 2000® Growth Index during the most recent 12-month period (approximately $16.7 billion during the 12-month period ended December 31, 2018).

 

When making their investment decisions, the portfolio managers generally focus on investing in the securities of companies that the portfolio managers believe have accelerating earnings growth rates, reasonable valuations (typically with a price-to-earnings ratio of no more than the earnings growth rate), strong management that participates in the ownership of the company, reasonable debt levels and/or a high or expanding return on equity. Although the portfolio managers generally do not emphasize investment in any particular investment sector or industry, the fund may invest a significant portion of its assets in the securities of companies in the health care sector at any given time. The fund may also purchase, or obtain exposure to, securities in initial public offerings (“IPOs”). The fund will sell securities when they no longer meet the portfolio managers’ investment criteria.

 

Principal risks | The greatest risk of investing in this fund is that you could lose money. The fund invests primarily in common stocks whose values increase and decrease in response to the activities of the companies that issued such stocks, general market conditions and/or economic conditions. As a result, the fund’s net asset value (“NAV”) also increases and decreases. An investment in the fund is not a deposit with a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Investments in this fund are subject to the following primary risks, which are described in alphabetical order and not in order of importance or potential exposure:

 

•Equity securities are subject to stock market risk.

 

Common stock. The value of a company's common stock may fall as a result of factors affecting the company, companies in the same industry or sector, or the financial markets overall. Common stock generally is subordinate to preferred stock upon the liquidation or bankruptcy of the issuing company;

 

•Growth stock risk is the risk of a lack of earnings increase or lack of dividend yield;

 

• Initial public offerings risk arises because the market value of shares sold in an IPO may fluctuate considerably due to factors such as the absence of a prior public market, unseasoned trading, the small number of shares available for trading and limited information about the issuer;

 

•Market timing risk arises because certain types of securities in which the fund invests, including small-cap securities, could cause the fund to be at greater risk of market timing activities by fund shareholders;

 

•Mid-cap company risk arises because mid-cap companies may have narrower commercial markets, limited managerial and financial resources, more volatile performance, and less liquid stock, compared to larger, more established companies;

 

•Sector risk is the risk associated with the fund holding a core portfolio of stocks invested in similar businesses, all of which could be affected by the same economic or market conditions;

 

The health care sector may be affected by government regulations and government health care programs, restrictions on government reimbursement for medical expenses, increases or decreases in the cost of medical products and services and product liability claims, among other factors. Many health care products and services may be subject to regulatory approvals. The process of obtaining such approvals may be long and costly, and delays in or failure to receive such approvals may negatively impact the business of such companies. Additional or more stringent laws and regulations enacted in the future could have a material adverse effect on such companies in the health care sector;

 

•Small-cap company risk arises because small-cap companies may have less liquid stock, a more volatile share price, a limited product or service base, narrower commercial markets and limited access to capital, compared to larger, more established companies;

 

•Stock market risk is the risk of broad stock market decline or volatility or a decline in particular holdings in response to adverse issuer, political, regulatory, market, economic or other developments, public perceptions concerning these developments, and adverse investor sentiment; and

 

Performance | The bar chart that follows illustrates annual fund returns for the periods ended December 31. The table that follows compares the fund’s returns for various periods with benchmark returns. This information is intended to give you some indication of the risk of investing in the fund by demonstrating how its returns have varied over time. The bar chart shows the fund’s Class I share performance from one year to another. Each of the fund’s share classes is invested in the same portfolio of securities, and the annual returns would have differed only to the extent that the classes do not have the same sales charges and expenses. The fund’s past performance (before and after taxes) is not necessarily an indication of how the fund will perform in the future. To obtain more current performance data as of the most recent month-end, please visit our website at carillontower.com.

 

carillontower.com   |   25


Carillon Mutual Funds
Summary of carillon eagle small cap growth fund | 3.1.2019



 

During 10 year period Return Quarter Ended
(Class I shares):    
Best Quarter 20.19% June 30, 2009
Worst Quarter (21.92)% September 30, 2011

 

Average annual total returns (for the periods ended December 31, 2018):

 

Fund return (after deduction of sales charges and expenses)

 

Share Class

Inception

Date

1-yr 5-yr 10-yr

Lifetime

(if less than

10 yrs)

Class I –Before Taxes 6/27/06 (10.17)% 5.08% 13.52%  
After Taxes on Distributions   (14.49)% 2.71% 12.20%  
After Taxes on Distributions and Sale of Fund Shares   3.12% 3.83% 11.32%  
Class A – Before Taxes 5/7/93 (14.66)% 3.73% 12.61%  
Class C – Before Taxes 4/3/95 (11.05)% 4.01% 12.35%  
Class Y – Before Taxes 11/20/17 (10.57)%     (7.66)%
Class R-3 – Before Taxes 9/19/06 (10.68)% 4.46% 12.89%  
Class R-5 – Before Taxes 10/2/06 (10.16)% 5.10% 13.56%  
Class R-6 – Before Taxes 8/15/11 (10.06)% 5.21%   9.98%

 

26    |   carillontower.com 


Carillon Mutual Funds
Summary of carillon eagle small cap growth fund | 3.1.2019

 
Index (reflects no deduction for fees, expenses or taxes) 1-yr 5-yr 10-yr

Lifetime

(From the Inception Date of Class Y Shares)

Lifetime

(From the Inception Date of Class R-6 Shares)

Russell 2000® Growth Index

 

(9.31)% 5.13% 13.52% (6.22)% 11.02%

 

After-tax returns are calculated using the historically 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. After-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements, such as a 401(k) plan or individual retirement account (“IRA”). After-tax returns are shown for Class I only and after-tax returns for Class A, Class C, Class Y, Class R-3, Class R-5, and Class R-6 will vary. The return after taxes on distributions and sale of fund shares may exceed the return before taxes due to an assumed tax benefit from any losses on a sale of fund shares at the end of the measurement period.

 

Investment Adviser | Carillon Tower Advisers, Inc. is the fund’s investment adviser.

 

Sub-adviser | Eagle Asset Management, Inc. serves as the sub-adviser to the fund.

 

Portfolio Managers | Bert L. Boksen, CFA®, and Eric Mintz, CFA®, are Portfolio Managers of the fund and are jointly and primarily responsible for all aspects of the fund’s management. Mr. Boksen has managed the fund since 1995 and Mr. Mintz has managed the fund since 2011. Christopher Sassouni, D.M.D., has served as Assistant Portfolio Manager of the fund since 2015.

 

Purchase and sale of fund shares | You may purchase, redeem, or exchange Class A, C, I and Y shares of the fund on any business day through your financial intermediary, by mail at Carillon Family of Funds, c/o U.S. Bank Global Fund Services, P.O. Box 701, Milwaukee, WI 53201-0701 (for regular mail) or 615 East Michigan Street, Third Floor, Milwaukee, WI, 53202 (for overnight service), or by telephone (800.421.4184). In Class A and Class C shares, the minimum purchase amount is $1,000 for regular accounts, $500 for retirement accounts and $50 through a periodic investment program, with a minimum subsequent investment plan of $50 per month. In Class Y shares, the minimum purchase amount is $1,000 for regular accounts, $100 for retirement accounts and $100 through a periodic investment program, with a minimum subsequent investment plan of $50 per month. For individual investors, the minimum initial purchase for Class I shares is $10,000, while fee-based plan sponsors set their own minimum requirements. Class R-3, Class R-5 and Class R-6 shares can only be purchased through a participating retirement plan and the minimum initial purchase for Class R-3, Class R-5 and Class R-6 shares is set by the plan administrator.

 

Tax information | The dividends you receive from the fund will be taxed as ordinary income or net capital gain (i.e., the excess of net long-term capital gain over net short-term capital loss) unless you are investing through a tax-deferred arrangement, such as a 401(k) plan or an IRA, in which case you may be subject to federal income tax on withdrawals from the arrangement.

 

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 and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the fund over another investment. Ask your salesperson or visit your financial intermediary’s website for more information.

 

carillontower.com   |   27

Carillon Mutual Funds

Summary of carillon scout international fund | 3.1.2019


 

Investment objective | The Carillon Scout International Fund (“International Fund” or the “fund”) seeks long-term growth of capital and income.

 

Fees and expenses of the fund | The tables that follow describe the fees and expenses that you may pay if you buy and hold shares of the International Fund. You may qualify for sales discounts if you and your family invest, or agree to invest in the future, at least $25,000 in the Class A shares of the Carillon Family of Funds. More information about these and other discounts is available from your financial professional, on page 82 of the fund’s Prospectus and on page 44 of the fund’s Statement of Additional Information. Although the fund does not impose any sales charge on Class I shares, you may pay a commission to your broker on your purchases and sales of those shares, which is not reflected in the tables or Example below.

 

Shareholder fees

 (fees paid directly from your investment):

Class

A

Class

C

Class

I

Class

Y

Class

R-3

Class

R-5

Class

R-6

Maximum Sales Charge Imposed on Purchases (as a % of offering price) 4.75% None None None None None None
Maximum Deferred Sales Charge (as a % of original purchase price or redemption proceeds, whichever is lower) None (a) 1.00% (a) None None None None None
Redemption Fee None None None None None None None

 

Annual fund operating expenses

(expenses that you pay each year as a percentage of the value of your investment):

 Class

A

 Class

Class

 Class

Y

Class

R-3 

Class

R-5 

 Class

R-6

Management Fees 0.80% 0.80% 0.80% 0.80% 0.80% 0.80% 0.80%
Distribution and Service (12b-1) Fees 0.25% 1.00% 0.00% 0.25% 0.50% 0.00% 0.00%
Other Expenses 0.26% 0.43% 0.27%(b) 1.11% 0.86% 0.86% 0.19%
Total Annual Fund Operating Expenses 1.31% 2.23% 1.07% 2.16% 2.16% 1.66% 0.99%
Fee Waiver and/or Expense Reimbursement (c) 0.00% (0.03)% 0.00% (0.71)% (0.46)% (0.51)% 0.00%
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement 1.31% 2.20% 1.07% 1.45% 1.70% 1.15% 0.99%

 

(a) If you purchased $1,000,000 or more of Class A shares of a Carillon mutual fund that were not otherwise eligible for a sales charge waiver and sell the shares within 18 months from the date of purchase, you may pay up to a 1% contingent deferred sales charge at the time of sale. If you sell Class C shares less than one year after purchase, you will pay a 1% CDSC at the time of sale.

(b) Other Expenses have been restated to reflect the fee rates that became effective upon the reorganization of the fund on November 20, 2017.

(c) Carillon Tower Advisers, Inc. (“Carillon”) has contractually agreed to waive its investment advisory fee and/or reimburse certain expenses of the fund to the extent that: annual operating expenses of each class exceed a percentage of that class’ average daily net assets through February 29, 2020 as follows: Class A – 1.45%, Class C – 2.20%, Class I – 1.15%, Class Y – 1.45%, Class R-3 - 1.70%, Class R-5 – 1.15%, and Class R-6 – 1.05%. This expense limitation excludes interest, taxes, brokerage commissions, costs relating to investments in other investment companies (acquired fund fees and expenses), dividends, and extraordinary expenses. The contractual fee waiver can be changed only with the approval of a majority of the fund’s Board of Trustees. Any reimbursement of fund expenses or reduction in Carillon’s investment advisory fees is subject to reimbursement by the fund within the following two fiscal years, if overall expenses fall below the lesser of its then current expense cap or the expense cap in effect at the time of the fee reimbursement.

 

Expense example | This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the fund’s operating expenses remain the same, except that the example reflects the fee waiver/expense reimbursement arrangement for each share class through February 29, 2020. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

 

Share Class Year 1 Year 3 Year 5 Year 10
Class A $602 $870 $1,159 $1,979
Class C $323 $694 $1,192 $2,562

 


28 | Carillontower.com


Carillon Mutual Funds

Summary of carillon scout international fund | 3.1.2019




 

Class I $109 $340 $590 $1,306
Class Y $148 $608 $1,094 $2,437
Class R-3 $173 $632 $1,117 $2,457
Class R-5 $117 $474 $854 $1,923
Class R-6 $101 $315 $547 $1,213

 

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 fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the fund’s performance. During the most recent fiscal year, the fund’s portfolio turnover rate was 13% of the average value of its portfolio.

 

Principal investment strategies | The fund normally pursues its objectives by investing in a diversified portfolio consisting primarily of equity securities of established companies either located outside the United States or whose primary business is carried on outside the United States.  The equity securities in which the fund invests include common stocks, depositary receipts, preferred stocks, convertible securities, and warrants and other rights.  The fund normally invests at least 80% of its net assets in equity securities as described above.

 

In selecting securities for the fund, the portfolio management team primarily performs fundamental “bottom-up” analysis to uncover companies that best fit its investment criteria. This includes evaluation of a company’s cash flow, financial strength, profitability, and potential or actual catalysts that could positively impact share prices.  The fund primarily seeks to invest in securities of seasoned companies that are known for the quality and acceptance of their products or services.

 

The portfolio management team also considers geopolitical and macroeconomic issues.  In addition, the fund may invest in a company domiciled in the United States if more than 50% of the company’s assets, personnel, sales or earnings are located outside the United States and therefore the company’s primary business is carried on outside the United States.

 

The portfolio management team believes that the intrinsic worth and consequent value of the stock of most well-managed and successful companies does not usually change rapidly, even though wide variations in the price may occur. Accordingly, long-term positions in stocks will normally be taken and maintained while the companies’ record and prospects continue to meet with the portfolio management team’s approval.

 

The fund intends to diversify investments among industries and among a number of countries throughout the world. In addition, the fund may invest a substantial portion of its assets (more than 25%) in one or more countries if economic and business conditions warrant such investment. The fund will invest no more than 20% of its net assets in investments in developing countries or emerging markets.

 

The fund may also invest a portion of its net assets (up to 20%) in high-grade fixed income securities or other investments that may provide income, including cash and money market securities. In such cases, the fund will resume investing primarily in equity securities when conditions warrant.

 

The fund intends to hold some cash, short-term debt obligations, government securities or other high-quality investments for reserves to cover redemptions and unanticipated expenses. There may be times, however, when the fund attempts to respond to adverse market, economic, political or other conditions by investing a higher percentage of its assets in cash or in those types of money market investments for temporary defensive purposes. During those times, the fund may not be able to pursue its investment objective or follow its principal investment strategies and, instead, will focus on preserving your investment.

 

Principal risks | The greatest risk of investing in the fund is that you could lose money. The fund invests primarily in common stocks whose values increase and decrease in response to the activities of the companies that issued such stocks, general market conditions and/or economic conditions. As a result, the fund’s net asset value (“NAV”) may also increase or decrease. An investment in the fund is not a deposit with a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Investments in this fund are subject to the following primary risks, which are described in alphabetical order and not in order of importance or potential exposure:

 

Emerging markets are generally smaller, less developed, less liquid and more volatile than the securities markets of the U.S. and other developed markets. There are also risks of: greater political uncertainties; an economy's dependence on revenues from particular commodities or on international aid or development assistance; currency transfer restrictions; a limited number of potential buyers for such securities; and delays and disruptions in securities settlement procedures. When investing in emerging markets, the risks of investing in foreign securities are heightened;

 

Equity securities are subject to stock market risk.

 

Common stock. The value of a company's common stock may fall as a result of factors affecting the company, companies in the same

carillontower.com | 29

Carillon Mutual Funds

Summary of carillon scout international fund | 3.1.2019




 

industry or sector, or the financial markets overall. Common stock generally is subordinate to preferred stock upon the liquidation or bankruptcy of the issuing company;

 

Preferred stock. Preferred stocks are sensitive to movements in interest rates. Preferred stocks may be less liquid than common stocks and, unlike common stocks, participation in the growth of an issuer may be limited. Distributions on preferred stocks generally are payable at the discretion of an issuer and after required payments to bond holders;

 

Convertible securities. Convertible securities are subject to the risk that the credit standing of the issuer may have an effect on the convertible securities’ investment value. Convertible securities also are sensitive to movements in interest rates;

 

Depositary receipts. Investing in depositary receipts entails substantially the same risks as direct investment in foreign securities;

 

Rights and warrants. Rights and warrants do not carry dividend or voting rights with respect to the underlying securities or any rights in the assets of the issuer, and a right or a warrant ceases to have value if it is not exercised prior to its expiration date;

 

Foreign security risks, which are potential risks not associated with U.S. investments, include, but are not limited to: (1) currency exchange rate fluctuations, (2) political and financial instability, (3) less liquidity, (4) lack of uniform accounting, auditing and financial reporting standards, (5) increased volatility, (6) less government regulation and supervision of foreign stock exchanges, brokers and listed companies, and (7) delays in transaction settlement in some foreign markets. Foreign security risk may also apply to ADRs, GDRs and EDRs;

 

Growth stock risk is the risk of a lack of earnings increase or lack of dividend yield;

 

Liquidity risk is the possibility that, during times of widespread market turbulence, trading activity in certain securities may be significantly hampered, which may reduce the returns of the fund because it may be unable to sell the securities at an advantageous price or time; Market prices for such securities may be volatile;

 

Market timing risk arises because certain types of securities in which the fund invests, including small-cap securities, could cause the fund to be at greater risk of market timing activities by fund shareholders;

 

Stock market risk is the risk of broad stock market decline or volatility or a decline in particular holdings in response to adverse issuer, political, regulatory, market, economic or other developments, public perceptions concerning these developments, and adverse investor sentiment; and

 

Value stock risk arises from the possibility that a stock’s intrinsic value may not be fully realized by the market.

 

Performance | The bar chart that follows illustrates annual fund returns for the periods ended December 31. The table that follows compares the fund’s returns for various periods with benchmark returns. This information is intended to give you some indication of the risk of investing in the fund by demonstrating how its returns have varied over time. The bar chart shows the fund’s Class I share performance from one year to another. The Class I shares of the fund have adopted the performance history and financial statements of the Institutional Class shares of the fund’s predecessor. Each of the fund’s share classes is invested in the same portfolio of securities, and the annual returns would have differed only to the extent that the classes do not have the same sales charges and expenses. The fund’s past performance (before and after taxes) is not necessarily an indication of how the fund will perform in the future. To obtain more current performance data as of the most recent month-end, please visit our website at carillontower.com.

 

 


30 | Carillontower.com


Carillon Mutual Funds

Summary of carillon scout international fund | 3.1.2019




 

During 10 year period Return Quarter Ended
(Class I shares):    
Best Quarter 21.57% September 30, 2009
Worst Quarter (20.84)% September 30, 2011

 

Average annual total returns (for the periods ended December 31, 2018):


Fund return (after deduction of sales charges and expenses)

 

Share Class

Inception

Date

1-yr 5-yr 10-yr

Lifetime  

(if less than

10 yrs)

 

Class I – Before Taxes 9/14/1993 (16.89)% 0.02% 6.32%  
After Taxes on Distributions   (19.04)% (3.52)% 4.37%  
After Taxes on Distributions and Sale of Fund Shares   (8.47)% 0.17% 5.30%  
Class A – Before Taxes 11/20/17 (21.10)%     (17.95)%
Class C – Before Taxes 11/20/17 (17.80)%     (14.94)%
Class Y – Before Taxes 11/20/17 (17.22)%     (14.33)%
Class R-3 – Before Taxes 11/20/17 (17.44)%     (14.56)%
Class R-5 – Before Taxes 11/20/17 (16.99)%     (14.10)%
Class R-6 – Before Taxes 11/20/17 (16.89)%     (14.00)%

 

Index (reflects no deduction for fees, expenses or taxes) 1-yr 5-yr 10-yr

Lifetime

(From Inception Date of Class A, Class C, Class Y, Class R-3, Class R-5 and Class R-6 Shares)

 

MSCI EAFE Index 13.79% 0.53% 6.32% (9.92)%

 

After-tax returns are calculated using the historically 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. After-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements, such as a 401(k) plan or individual retirement account (“IRA”). After-tax returns are shown for Class I only and after-tax returns for Class A, Class C, Class Y, Class R-3, Class R-5, and Class R-6 will vary. The return after taxes on distributions and sale of fund shares may exceed the return before taxes due to an assumed tax benefit from any losses on a sale of fund shares at the end of the measurement period.

 

carillontower.com | 31


Carillon Mutual Funds

Summary of carillon scout international fund | 3.1.2019


 

Investment Adviser | Carillon Tower Advisers, Inc. is the fund’s investment adviser.

 

Sub-adviser | Scout Investments, Inc. serves as the sub-adviser to the fund.

Portfolio Managers | Michael D. Stack, CFA®, has served as the Lead Portfolio Manager of the fund and Angel M. Lupercio has served as Portfolio Co-Manager of the fund since its inception in 2017. Messrs. Stack and Lupercio are jointly and primarily responsible for the day-to-day management of the fund. Mr. Stack was Assistant Portfolio Manager of the fund’s predecessor from February 2006 through December 2007; Portfolio Co-Manager of the fund’s predecessor from April 2012 through March 2014; Co-Lead Portfolio Manager of the fund’s predecessor from March 2014 through December 2014; and Lead Portfolio Manager of the fund’s predecessor from 2015 to 2017. Mr. Lupercio served as Portfolio Co-Manager of the fund’s predecessor from 2015 to 2017.

 

Purchase and sale of fund shares | You may purchase, redeem, or exchange Class A, C, I and Y shares of the fund on any business day through your financial intermediary, by mail at Carillon Family of Funds, c/o U.S. Bank Global Fund Services, P.O. Box 701, Milwaukee, WI 53201-0701 (for regular mail) or 615 East Michigan Street, Third Floor, Milwaukee, WI, 53202 (for overnight service), or by telephone (800.421.4184). In Class A and Class C shares, the minimum purchase amount is $1,000 for regular accounts, $500 for retirement accounts and $50 through a periodic investment program, with a minimum subsequent investment plan of $50 per month. In Class Y shares, the minimum purchase amount is $1,000 for regular accounts, $100 for retirement accounts and $100 through a periodic investment program, with a minimum subsequent investment plan of $50 per month. For individual investors, the minimum initial purchase for Class I shares is $10,000, while fee-based plan sponsors set their own minimum requirements. Class R-3, Class R-5 and Class R-6 shares can only be purchased through a participating retirement plan and the minimum initial purchase for Class R-3, Class R-5 and Class R-6 shares is set by the plan administrator.

 

Tax information | The dividends you receive from the fund will be taxed as ordinary income or net capital gain (i.e., the excess of net long-term capital gain over net short-term capital loss) unless you are investing through a tax-deferred arrangement, such as a 401(k) plan or an IRA, in which case you may be subject to federal income tax on withdrawals from the arrangement.

 

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 and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the fund over another investment. Ask your salesperson or visit your financial intermediary’s website for more information.

 


32 | Carillontower.com


 Carillon Mutual Funds

Summary of carillon scout mid cap fund | 3.1.2019


 

Investment objective | The Carillon Scout Mid Cap Fund (“Mid Cap Fund” or the “fund”) seeks long-term growth of capital.

 

Fees and expenses of the fund | The tables that follow describe the fees and expenses that you may pay if you buy and hold shares of the Mid Cap Fund. You may qualify for sales discounts if you and your family invest, or agree to invest in the future, at least $25,000 in the Class A shares of the Carillon Family of Funds. More information about these and other discounts is available from your financial professional, on page 82 of the fund’s Prospectus and on page 44 of the fund’s Statement of Additional Information. Although the fund does not impose any sales charge on Class I shares, you may pay a commission to your broker on your purchases and sales of those shares, which is not reflected in the tables or Example below.

 

Shareholder fees

(fees paid directly from your investment):

Class

A

Class

C

Class

I

Class

Y

Class

R-3

Class

R-5

Class

R-6

Maximum Sales Charge Imposed on Purchases (as a % of offering price) 4.75% None None None None None None
Maximum Deferred Sales Charge (as a % of original purchase price or redemption proceeds, whichever is lower) None (a) 1.00% (a) None None None None None
Redemption Fee None None None None None None None
             
 

Annual fund operating expenses

(expenses that you pay each year as a percentage of the value of your investment):

Class

A

Class

C

Class

I

Class

Y

Class

R-3

Class

R-5

Class

R-6

Management Fees 0.75% 0.75% 0.75% 0.75% 0.75% 0.75% 0.75%
Distribution and Service (12b-1) Fees 0.25% 1.00% 0.00% 0.25% 0.50% 0.00% 0.00%
Other Expenses 0.19% 0.19% 0.23%(b) 0.19% 0.19% 0.24% 0.15%
Total Annual Fund Operating Expenses 1.19% 1.94% 0.98% 1.19% 1.44% 0.99% 0.90%
               

(a) If you purchased $1,000,000 or more of Class A shares of a Carillon mutual fund that were not otherwise eligible for a sales charge waiver and sell the shares within 18 months from the date of purchase, you may pay up to a 1% contingent deferred sales charge at the time of sale. If you sell Class C shares less than one year after purchase, you will pay a 1% CDSC at the time of sale. 

(b) Other Expenses have been restated to reflect the fee rates that became effective upon the reorganization of the fund on November 20, 2017.

 

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

 

Share Class Year 1 Year 3 Year 5 Year 10
Class A $591 $835 $1,098 $1,850
Class C $297 $609 $1,047 $2,264
Class I $100 $312 $542 $1,201
Class Y $121 $378 $654 $1,443
Class R-3 $147 $456 $787 $1,724
Class R-5 $101 $315 $547 $1,213
Class R-6 $92 $287 $498 $1,108

 

carillontower.com | 33


Carillon Mutual Funds

SUMMARY OF CARILLON SCOUT MID CAP FUND | 3.1.2019


 

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 fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the fund’s performance. During the most recent fiscal year, the fund’s portfolio turnover rate was 106% of the average value of its portfolio.

 

Principal investment strategies | The fund pursues its objective by investing primarily in common stocks of mid cap companies. Under normal circumstances, at least 80% of the fund’s net assets will be invested in mid cap equity securities. The fund’s portfolio managers consider mid-capitalization companies to be those companies that, at the time of initial purchase, have market capitalizations greater than $1 billion and equal to or less than the largest company in the Russell Midcap® Index during the most recent 12-month period (approximately $41.9 billion during the 12-month period ended December 31, 2018). The fund maintains a portfolio of investments diversified across companies and economic sectors.

 

The equity securities in which the fund invests include common stocks, depositary receipts, preferred stocks, convertible securities, warrants and other rights, and real estate investment trusts (“REITs”). The fund normally invests in a diversified portfolio of equity securities.  The portfolio management team seeks to invest in the securities of companies that are expected to benefit from macroeconomic or company-specific factors, and that are attractively priced relative to their fundamentals. In making investment decisions, the portfolio management team may consider fundamental factors such as cash flow, financial strength, profitability, statistical valuation measures, potential or actual catalysts that could move the share price, accounting practices, management quality, risk factors such as litigation, the estimated fair value of the company, general economic and industry conditions, and additional information as appropriate.

 

The fund will invest primarily in securities of U.S. companies, but may invest up to 20% of the portfolio in foreign companies, including those located in developing countries or emerging markets; American Depositary Receipts (“ADRs”) or Global Depositary Receipts (“GDRs”). At times, the fund may hold securities of small capitalization companies.

 

The fund intends to hold some cash, short-term debt obligations, government securities or other high-quality investments for reserves to cover redemptions and unanticipated expenses. There may be times, however, when the fund attempts to respond to adverse market, economic, political or other conditions by investing a higher percentage of its assets in cash or in those types of money market investments for temporary defensive purposes. During those times, the fund may not be able to pursue its investment objective or follow its principal investment strategies and, instead, will focus on preserving your investment.

 

Principal risks | The greatest risk of investing in the fund is that you could lose money. The fund invests primarily in common stocks whose values increase and decrease in response to the activities of the companies that issued such stocks, general market conditions and/or economic conditions. As a result, the fund’s net asset value (“NAV”) may also increase or decrease. An investment in the fund is not a deposit with a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Investments in this fund are subject to the following primary risks, which are described in alphabetical order and not in order of importance or potential exposure:

 

Emerging markets are generally smaller, less developed, less liquid and more volatile than the securities markets of the U.S. and other developed markets. There are also risks of: greater political uncertainties; an economy's dependence on revenues from particular commodities or on international aid or development assistance; currency transfer restrictions; a limited number of potential buyers for such securities; and delays and disruptions in securities settlement procedures. When investing in emerging markets, the risks of investing in foreign securities are heightened;

 

Equity securities are subject to stock market risk.

Common stock. The value of a company's common stock may fall as a result of factors affecting the company, companies in the same industry or sector, or the financial markets overall. Common stock generally is subordinate to preferred stock upon the liquidation or bankruptcy of the issuing company;

 

Preferred stock. Preferred stocks are sensitive to movements in interest rates. Preferred stocks may be less liquid than common stocks and, unlike common stocks, participation in the growth of an issuer may be limited. Distributions on preferred stocks generally are payable at the discretion of an issuer and after required payments to bond holders;

 

Convertible securities. Convertible securities are subject to the risk that the credit standing of the issuer may have an effect on the convertible securities’ investment value. Convertible securities also are sensitive to movements in interest rates;

 

Depositary receipts. Investing in depositary receipts entails substantially the same risks as direct investment in foreign securities;

 

REITs. Investments in REITs are subject to the risks associated with investing in the real estate industry such as adverse developments affecting the real estate industry and real property values;

 


34 | Carillontower.com


Carillon Mutual Funds

Summary of carillon scout mid cap fund | 3.1.2019


 

Rights and warrants. Rights and warrants do not carry dividend or voting rights with respect to the underlying securities or any rights in the assets of the issuer, and a right or a warrant ceases to have value if it is not exercised prior to its expiration date;

 

Foreign security risks, which are potential risks not associated with U.S. investments, include, but are not limited to: (1) currency exchange rate fluctuations, (2) political and financial instability, (3) less liquidity, (4) lack of uniform accounting, auditing and financial reporting standards, (5) increased volatility, (6) less government regulation and supervision of foreign stock exchanges, brokers and listed companies, and (7) delays in transaction settlement in some foreign markets. Foreign security risk may also apply to ADRs, GDRs and EDRs;

 

Growth stock risk is the risk of a lack of earnings increase or lack of dividend yield;
 
Mid-cap company risk arises because mid-cap companies may have narrower commercial markets, limited managerial and financial resources, more volatile performance, and less liquid stock, compared to larger, more established companies;

 

Portfolio turnover risk is the risk that performance may be adversely affected by a high rate of portfolio turnover, which generally leads to greater transaction costs;

 

Small-cap company risk arises because small-cap companies may have less liquid stock, a more volatile share price, a limited product or service base, narrower commercial markets and limited access to capital, compared to larger, more established companies;

 

Stock market risk is the risk of broad stock market decline or volatility or a decline in particular holdings in response to adverse issuer, political, regulatory, market, economic or other developments, public perceptions concerning these developments, and adverse investor sentiment; and

 

Value stock risk arises from the possibility that a stock’s intrinsic value may not be fully realized by the market.

 

Performance | The bar chart that follows illustrates annual fund returns for the periods ended December 31. The table that follows compares the fund’s returns for various periods with benchmark returns. This information is intended to give you some indication of the risk of investing in the fund by demonstrating how its returns have varied over time. The bar chart shows the fund’s Class I share performance from one year to another. The Class I shares of the fund have adopted the performance history and financial statements of the Institutional Class shares of the fund’s predecessor. Each of the fund’s share classes is invested in the same portfolio of securities, and the annual returns would have differed only to the extent that the classes do not have the same sales charges and expenses. The fund’s past performance (before and after taxes) is not necessarily an indication of how the fund will perform in the future. To obtain more current performance data as of the most recent month-end, please visit our website at carillontower.com.

 

 


carillontower.com | 35

 


Carillon Mutual Funds

Summary of carillon scout mid cap fund | 3.1.2019


 
During 10 year period Return Quarter Ended
(Class I shares):    
Best Quarter 23.59% June 30, 2009
Worst Quarter (16.83)% December 31, 2018

Average annual total returns (for the periods ended December 31, 2018):

 

Fund return (after deduction of sales charges and expenses)

 

Share Class

Inception

Date

1-yr 5-yr 10-yr

Lifetime 

(if less than

10 yrs)

 

Class I – Before Taxes 10/31/2006 (9.74)% 6.93% 14.85%  
After Taxes on Distributions   (11.37)% 4.61% 13.12%  
After Taxes on Distributions and Sale of Fund Shares   (4.63)% 5.05% 12.18%  
Class A – Before Taxes 11/20/17 (14.26)%     (11.42)%
Class C – Before Taxes 11/20/17 (10.62)%     (8.10)%
Class Y – Before Taxes 11/20/17 (9.96)%     (7.44)%
Class R-3 – Before Taxes 11/20/17 (10.25)%     (7.75)%
Class R-5 – Before Taxes 11/20/17 (10.00)%     (7.47)%
Class R-6 – Before Taxes 11/20/17 (9.71)%     (7.19)%

 

Index (reflects no deduction for fees, expenses or taxes) 1-yr 5-yr 10-yr

Lifetime 

(From Inception Date of Class A, Class C, Class Y, Class R-3, Class R-5 and Class R-6 Shares)

 

Russell Midcap® Index (9.06)% 6.26% 14.03% (5.53)%
         

After-tax returns are calculated using the historically 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. After-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements, such as a 401(k) plan or individual retirement account (“IRA”). After-tax returns are shown for Class I only and after-tax returns for Class A, Class C, Class Y, Class R-3, Class R-5, and Class R-6 will vary. The return after taxes on distributions and sale of fund shares may exceed the return before taxes due to an assumed tax benefit from any losses on a sale of fund shares at the end of the measurement period. 


36 | Carillontower.com


Carillon Mutual Funds

Summary of carillon scout mid cap fund | 3.1.2019


 

Investment Adviser | Carillon Tower Advisers, Inc. is the fund’s investment adviser.

 

Sub-adviser | Scout Investments, Inc. serves as the sub-adviser to the fund.


Portfolio Managers | G. Patrick Dunkerley, CFA®, has served as the Lead Portfolio Manager of the fund and Derek M. Smashey, CFA®, John A. Indellicate II, CFA® and Jason J. Votruba, CFA®, have served as Portfolio Co-Managers of the fund since its inception in 2017. Messrs. Dunkerley, Smashey, Indellicate and Votruba are jointly and primarily responsible for the day-to-day management of the fund. Mr. Dunkerley served as Lead Portfolio Manager of the fund’s predecessor and Mr. Smashey served as Portfolio Co-Manager of the fund’s predecessor from its inception in 2006 to 2017. Messrs. Indellicate and Votruba served as Portfolio Co-Managers of the fund’s predecessor from 2011 and 2013, respectively, to 2017. 

Purchase and sale of fund shares | You may purchase, redeem, or exchange Class A, C, I and Y shares of the fund on any business day through your financial intermediary, by mail at Carillon Family of Funds, c/o U.S. Bank Global Fund Services, P.O. Box 701, Milwaukee, WI 53201-0701 (for regular mail) or 615 East Michigan Street, Third Floor, Milwaukee, WI, 53202 (for overnight service), or by telephone (800.421.4184). In Class A and Class C shares, the minimum purchase amount is $1,000 for regular accounts, $500 for retirement accounts and $50 through a periodic investment program, with a minimum subsequent investment plan of $50 per month. In Class Y shares, the minimum purchase amount is $1,000 for regular accounts, $100 for retirement accounts and $100 through a periodic investment program, with a minimum subsequent investment plan of $50 per month. For individual investors, the minimum initial purchase for Class I shares is $10,000, while fee-based plan sponsors set their own minimum requirements. Class R-3, Class R-5 and Class R-6 shares can only be purchased through a participating retirement plan and the minimum initial purchase for Class R-3, Class R-5 and Class R-6 shares is set by the plan administrator.

 

Tax information | The dividends you receive from the fund will be taxed as ordinary income or net capital gain (i.e., the excess of net long-term capital gain over net short-term capital loss) unless you are investing through a tax-deferred arrangement, such as a 401(k) plan or an IRA, in which case you may be subject to federal income tax on withdrawals from the arrangement.

 

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 and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the fund over another investment. Ask your salesperson or visit your financial intermediary’s website for more information.


carillontower.com | 37

Carillon Mutual Funds
SUMMARY OF CARILLON SCOUT SMALL CAP FUND | 3.1.2019
 

Investment objective | The Carillon Scout Small Cap Fund (“Small Cap Fund” or the “fund”) seeks long-term growth of capital.

 

Fees and expenses of the fund | The tables that follow describe the fees and expenses that you may pay if you buy and hold shares of the Small Cap Fund. You may qualify for sales discounts if you and your family invest, or agree to invest in the future, at least $25,000 in the Class A shares of the Carillon Family of Funds. More information about these and other discounts is available from your financial professional, on page 82 of the fund’s Prospectus and on page 44 of the fund’s Statement of Additional Information. Although the fund does not impose any sales charge on Class I shares, you may pay a commission to your broker on your purchases and sales of those shares, which is not reflected in the tables or Example below.

Shareholder fees
(fees paid directly from your investment):
Class A
Class C
Class I
Class Y
Class R-3
Class R-5
Class R-6
Maximum Sales Charge Imposed on Purchases (as a % of offering price)
4.75%
None
None
None
None
None
None
Maximum Deferred Sales Charge (as a % of original purchase price or redemption proceeds, whichever is lower)
None (a)
1.00% (a)
None
None
None
None
None
Redemption Fee
None
None
None
None
None
None
None


Annual fund operating expenses
(expenses that you pay each year as a percentage of the value of your investment):
Class A Class C Class I Class Y Class R-3 Class R-5 Class R-6

Management Fees (a)

0.60%

0.60%

0.60%

0.60%

0.60%

0.60%

0.60%

Distribution and Service (12b-1) Fees

0.25%

1.00%

0.00%

0.25%

0.50%

0.00%

0.00%

Other Expenses

0.38%

0.37%

0.32%(b)

  0.74%

0.57%

0.72%

0.26%

Total Annual Fund Operating Expenses

1.23%

1.97%

0.92%

1.59%

1.67%

1.32%

0.86%

Fee Waiver and/or Expense Reimbursement or Recoupment (c)

0.00%

0.00%

0.00%

(0.34)%

(0.17)%

(0.37)%

(0.01)%

Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement or Recoupment

1.23%

1.97%

0.92%

1.25%

1.50%

0.95%

0.85%


(a)
Management Fees have been restated to reflect current fees.
(b)Other Expenses have been restated to reflect the fee rates that became effective upon the reorganization of the fund on November 20, 2017.  

(c) Carillon Tower Advisers, Inc. (“Carillon”) has contractually agreed to waive its investment advisory fee and/or reimburse certain expenses of the fund to the extent that: annual operating expenses of each class exceed a percentage of that class’ average daily net assets through February 29, 2020 as follows: Class A – 1.25%, Class C – 2.00%, Class I – 0.95%, Class Y – 1.25%, Class R-3 - 1.50%, Class R-5 – 0.95%, and Class R-6 – 0.85%. This expense limitation excludes interest, taxes, brokerage commissions, costs relating to investments in other investment companies (acquired fund fees and expenses), dividends, and extraordinary expenses. The contractual fee waiver can be changed only with the approval of a majority of the fund’s Board of Trustees. Any reimbursement of fund expenses or reduction in Carillon’s investment advisory fees is subject to reimbursement by the fund within the following two fiscal years, if overall expenses fall below the lesser of its then current expense cap or the expense cap in effect at the time of the fee reimbursement or the time of the recoupment.

 

Expense example | This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the fund’s operating expenses remain the same, except that the example reflects the fee waiver/expense reimbursement arrangement for each share class through February 29, 2020. Although your actual costs may be higher or lower, based on these assumptions your costs would be:


Share Class
Year 1
Year 3
Year 5
Year 10
Class A
$594
$847
$1,119
$1,893
Class C
$300
$618
$1,062
$2,296
Class I
$97
$303
$525
$1,166

38 | carillontower.com

Carillon Mutual Funds
SUMMARY OF CARILLON SCOUT SMALL CAP FUND | 3.1.2019


Class Y

$127

$467

$829

$1,850

Class R-3

$153

$508

$887

$1,952

Class R-5

$97

$378

$679

$1,537

Class R-6

$87

$273

$476

$1,060

 

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 fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the fund’s performance. During the most recent fiscal year, the fund’s portfolio turnover rate was 22% of the average value of its portfolio.

 

Principal investment strategies | The fund pursues its objective by investing, under normal circumstances, at least 80% of its net assets in equity securities (mostly common stocks) of small cap companies located anywhere in the United States. The fund’s portfolio managers consider small-capitalization companies to be those companies that, at the time of initial purchase, have a market capitalization equal to or less than the largest company in the Russell 2000® Growth Index during the most recent 12-month period (approximately $16.7 billion during the 12-month period ended December 31, 2018).

 

The equity securities in which the fund invests include common stocks, depositary receipts, preferred stocks, convertible securities, warrants and other rights, and real estate investment trusts (“REITs”).  Although the portfolio management team will search for investments across a large number of sectors, from time to time, based on economic conditions, the fund may have significant positions in particular sectors.

 

The fund normally invests in a diversified portfolio of equity securities that are selected based upon the portfolio management team’s perception of their above-average potential for long-term growth of capital. The portfolio management team searches for companies that it believes are well positioned to benefit from the emergence of long-term catalysts for growth.  The identified growth catalysts are long-term and secular (i.e., exhibiting relatively consistent expansion over a long period).  Following the identification of well-positioned companies, the portfolio management team estimates the fair value of each candidate by assessing: margin structure, growth rate, debt level and other measures which it believes influence relative stock valuations. The overall company analysis includes the assessment of the liquidity of each security, sustainability of profit margins, barriers to entry, company management and free cash flow.

 

The fund will invest primarily in securities of U.S. companies, but may invest up to 10% of the portfolio in foreign companies, including those located in developing countries or emerging markets; American Depositary Receipts (“ADRs”) or Global Depositary Receipts (“GDRs”). Although the portfolio managers generally do not emphasize investment in any particular investment sector or industry, the fund may invest a significant portion of its assets in the securities of companies in the health care sector at any given time.

 

The fund intends to hold some cash, short-term debt obligations, government securities or other high-quality investments for reserves to cover redemptions and unanticipated expenses. There may be times, however, when the fund attempts to respond to adverse market, economic, political or other conditions by investing a higher percentage of its assets in cash or in those types of money market investments for temporary defensive purposes. During those times, the fund may not be able to pursue its investment objective or follow its principal investment strategies and, instead, will focus on preserving your investment.

 

Principal risks | The greatest risk of investing in the fund is that you could lose money. The fund invests primarily in common stocks whose values increase and decrease in response to the activities of the companies that issued such stocks, general market conditions and/or economic conditions. As a result, the fund’s net asset value (“NAV”) may also increase or decrease. An investment in the fund is not a deposit with a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Investments in this fund are subject to the following primary risks, which are described in alphabetical order and not in order of importance or potential exposure:

 

Emerging markets are generally smaller, less developed, less liquid and more volatile than the securities markets of the U.S. and other developed markets. There are also risks of: greater political uncertainties; an economy's dependence on revenues from particular commodities or on international aid or development assistance; currency transfer restrictions; a limited number of potential buyers for such securities; and delays and disruptions in securities settlement procedures. When investing in emerging markets, the risks of investing in foreign securities are heightened;

 

Equity securities are subject to stock market risk.

 

Common stock. The value of a company's common stock may fall as a result of factors affecting the company, companies in the same industry or sector, or the financial markets overall. Common stock generally is subordinate to preferred stock upon the liquidation or bankruptcy of the issuing company;

 

Preferred stock. Preferred stocks are sensitive to movements in interest rates. Preferred stocks may be less liquid than common stocks and,

 

carillontower.com | 39



Carillon Mutual Funds
SUMMARY OF CARILLON SCOUT SMALL CAP FUND | 3.1.2019

unlike common stocks, participation in the growth of an issuer may be limited. Distributions on preferred stocks generally are payable at the discretion of an issuer and after required payments to bond holders;

 

Convertible securities. Convertible securities are subject to the risk that the credit standing of the issuer may have an effect on the convertible securities’ investment value. Convertible securities also are sensitive to movements in interest rates;

 

Depositary receipts. Investing in depositary receipts entails substantially the same risks as direct investment in foreign securities;

 

REITs. Investments in REITs are subject to the risks associated with investing in the real estate industry such as adverse developments affecting the real estate industry and real property values;

 

Rights and warrants. Rights and warrants do not carry dividend or voting rights with respect to the underlying securities or any rights in the assets of the issuer, and a right or a warrant ceases to have value if it is not exercised prior to its expiration date;


Focused holdings risk is the risk of a fund holding a core portfolio of securities of fewer companies than other diversified funds, which means that the increase or decrease of the value of a single investment may have a greater impact on the fund’s NAV and total return when compared to other diversified funds;

 

Foreign security risks, which are potential risks not associated with U.S. investments, include, but are not limited to: (1) currency exchange rate fluctuations, (2) political and financial instability, (3) less liquidity, (4) lack of uniform accounting, auditing and financial reporting standards, (5) increased volatility, (6) less government regulation and supervision of foreign stock exchanges, brokers and listed companies, and (7) delays in transaction settlement in some foreign markets. Foreign security risk may also apply to ADRs, GDRs and EDRs;

 

Growth stock risk is the risk of a lack of earnings increase or lack of dividend yield;

 

Market timing risk arises because certain types of securities in which the fund invests, including foreign securities, could cause the fund to be at greater risk of market timing activities by fund shareholders;

 

Mid-cap company risk arises because mid-cap companies may have narrower commercial markets, limited managerial and financial resources, more volatile performance, and less liquid stock, compared to larger, more established companies;

 

Sector risk is the risk associated with the fund holding a core portfolio of stocks invested in similar businesses, all of which could be affected by the same economic or market conditions;

 

The health care sector may be affected by government regulations and government health care programs, restrictions on government reimbursement for medical expenses, increases or decreases in the cost of medical products and services and product liability claims, among other factors. Many health care products and services may be subject to regulatory approvals. The process of obtaining such approvals may be long and costly, and delays in or failure to receive such approvals may negatively impact the business of such companies. Additional or more stringent laws and regulations enacted in the future could have a material adverse effect on such companies in the health care sector;

 

Small-cap company risk arises because small-cap companies may have less liquid stock, a more volatile share price, a limited product or service base, narrower commercial markets and limited access to capital, compared to larger, more established companies;

 

Stock market risk is the risk of broad stock market decline or volatility or a decline in particular holdings in response to adverse issuer, political, regulatory, market, economic or other developments, public perceptions concerning these developments, and adverse investor sentiment; and

 

Value stock risk arises from the possibility that a stock’s intrinsic value may not be fully realized by the market.

 

Performance | The bar chart that follows illustrates annual fund returns for the periods ended December 31. The table that follows compares the fund’s returns for various periods with benchmark returns. This information is intended to give you some indication of the risk of investing in the fund by demonstrating how its returns have varied over time. The bar chart shows the fund’s Class I share performance from one year to another. The Class I shares of the fund have adopted the performance history and financial statements of the Institutional Class shares of the fund’s predecessor. Each of the fund’s share classes is invested in the same portfolio of securities, and the annual returns would have differed only to the extent that the classes do not have the same sales charges and expenses. The fund’s past performance (before and after taxes) is not necessarily an indication of how the fund will perform in the future. To obtain more current performance data as of the most recent month-end, please visit our website at carillontower.com.

 

40 | carillontower.com

Carillon Mutual Funds
SUMMARY OF CARILLON SCOUT SMALL CAP FUND | 3.1.2019



During 10 year period Return Quarter Ended
(Class I shares):    
Best Quarter 17.53% December 31, 2010
Worst Quarter (23.46)% September 30, 2011


Average annual total returns
(for the periods ended December 31, 2018):

 

Fund return (after deduction of sales charges and expenses)



Share Class

Inception Date

1-yr 5-yr 10-yr

Lifetime

(if less than

10 yrs)

Class I – Before Taxes 7/2/01 (5.13)% 8.35% 13.01%  
After Taxes on Distributions   (6.77)% 6.51% 12.04%  
After Taxes on Distributions and Sale of Fund Shares   (1.51)% 6.44% 10.86%  
Class A – Before Taxes 11/20/17 (9.88)%     (6.16)%
Class C – Before Taxes 11/20/17 (6.10)%     (2.68)%
Class Y – Before Taxes 11/20/17 (5.43)%     (1.99)%
Class R-3 – Before Taxes 11/20/17 (5.65)%     (2.23)%
Class R-5 – Before Taxes 11/20/17 (5.13)%     (1.69)%
Class R-6 – Before Taxes 11/20/17 (5.02)%     (1.58)%

Index (reflects no deduction for fees, expenses or taxes) 1-yr 5-yr 10-yr

Lifetime

(From Inception Date of

Class A, Class C, Class

Y, Class R-3, Class R-5

and Class R-6 Shares)

Russell 2000 Growth Index (9.31)% 5.13% 13.52% (6.22)%
 

carillontower.com | 41

 

Carillon Mutual Funds
SUMMARY OF CARILLON SCOUT SMALL CAP FUND | 3.1.2019


After-tax returns are calculated using the historically 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. After-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements, such as a 401(k) plan or individual retirement account (“IRA”). After-tax returns are shown for Class I only and after-tax returns for Class A, Class C, Class Y, Class R-3, Class R-5, and Class R-6 will vary. The return after taxes on distributions and sale of fund shares may exceed the return before taxes due to an assumed tax benefit from any losses on a sale of fund shares at the end of the measurement period.

 

Investment Adviser | Carillon Tower Advisers, Inc. is the fund’s investment adviser.

 

Sub-adviser | Scout Investments, Inc. serves as the sub-adviser to the fund.

 

Portfolio Managers | James R. McBride, CFA®, has served as the Lead Portfolio Manager of the fund and Timothy L. Miller, CFA® has served as Portfolio Co-Manager of the fund since its inception in 2017. Messrs. McBride and Miller are jointly and primarily responsible for the day-to-day management of the fund. Mr. McBride was Portfolio Co-Manager of the fund’s predecessor from 2010 through 2015 and served as Lead Portfolio Manager of the fund’s predecessor from 2015 to 2017. Mr. Miller served as Portfolio Co-Manager of the fund’s predecessor from 2013 to 2017.

 

Purchase and sale of fund shares | You may purchase, redeem, or exchange Class A, C, I and Y shares of the fund on any business day through your financial intermediary, by mail at Carillon Family of Funds, c/o U.S. Bank Global Fund Services, P.O. Box 701, Milwaukee, WI 53201-0701 (for regular mail) or 615 East Michigan Street, Third Floor, Milwaukee, WI, 53202 (for overnight service), or by telephone (800.421.4184). In Class A and Class C shares, the minimum purchase amount is $1,000 for regular accounts, $500 for retirement accounts and $50 through a periodic investment program, with a minimum subsequent investment plan of $50 per month. In Class Y shares, the minimum purchase amount is $1,000 for regular accounts, $100 for retirement accounts and $100 through a periodic investment program, with a minimum subsequent investment plan of $50 per month. For individual investors, the minimum initial purchase for Class I shares is $10,000, while fee-based plan sponsors set their own minimum requirements. Class R-3, Class R-5 and Class R-6 shares can only be purchased through a participating retirement plan and the minimum initial purchase for Class R-3, Class R-5 and Class R-6 shares is set by the plan administrator.

 

Tax information | The dividends you receive from the fund will be taxed as ordinary income or net capital gain (i.e., the excess of net long-term capital gain over net short-term capital loss) unless you are investing through a tax-deferred arrangement, such as a 401(k) plan or an IRA, in which case you may be subject to federal income tax on withdrawals from the arrangement.

 

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 and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the fund over another investment. Ask your salesperson or visit your financial intermediary’s website for more information.

 
42 | carillontower.com


Carillon Mutual Funds

Summary of Carillon Reams Core Bond Fund | 3.1.2019




 

Investment objective | The Carillon Reams Core Bond Fund (“Core Bond Fund” or the “fund”) seeks a high level of total return consistent with the preservation of capital.

 

Fees and expenses of the fund | The tables that follow describe the fees and expenses that you may pay if you buy and hold shares of the Core Bond Fund. You may qualify for sales discounts if you and your family invest, or agree to invest in the future, at least $25,000 in the Class A shares of the Carillon Family of Funds. More information about these and other discounts is available from your financial professional, on page 82 of the fund’s Prospectus and on page 44 of the fund’s Statement of Additional Information. Although the fund does not impose any sales charge on Class I shares, you may pay a commission to your broker on your purchases and sales of those shares, which is not reflected in the tables or Example below.

 

Shareholder fees (fees paid directly from your investment):

Class

A

Class
C

Class
I

Class
Y

Class
R-3

Class
R-5

Class
R-6

Maximum Sales Charge Imposed on Purchases (as a % of offering price)

3.75%

None

None

None

None

None

None

Maximum Deferred Sales Charge (as a % of original purchase price or redemption proceeds, whichever is lower)

None (a)

1.00% (a)

None

None

None

None

None

Redemption Fee

None

None

None

None

None

None

None


Annual fund operating expenses
(expenses that you pay each year as a percentage of the value of your investment):
Class
A
Class
C
Class
I
Class
Y
Class
R-3
Class
R-5
Class
R-6
Management Fees
0.40%
0.40%
0.40%
0.40%
0.40%
0.40%
0.40%
Distribution and Service (12b-1) Fees
0.25%
1.00%
0.00%
0.25%
0.50%
0.00%
0.00%
Other Expenses
0.51%
0.59%
0.47%
0.54%
1.12%
1.12%
1.12%
Total Annual Fund Operating Expenses
1.16%
1.99%
0.87%
1.19%
2.02%
1.52%
1.52%
Fee Waiver and/or Expense Reimbursement (b)
(0.36)%
(0.44)%
(0.47)%
(0.39)%
(0.97)%
(1.02)%
(1.12)%
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement
0.80%
1.55%
0.40%
0.80%
1.05%
0.50%
0.40%

(a) If you purchased $1,000,000 or more of Class A shares of a Carillon mutual fund that were not otherwise eligible for a sales charge waiver and sell the shares within 18 months from the date of purchase, you may pay up to a 1% contingent deferred sales charge at the time of sale. If you sell Class C shares less than one year after purchase, you will pay a 1% CDSC at the time of sale.

(b) Carillon Tower Advisers, Inc. (“Carillon”) has contractually agreed to waive its investment advisory fee and/or reimburse certain expenses of the fund to the extent that: annual operating expenses of each class exceed a percentage of that class’ average daily net assets through February 29, 2020 as follows: Class A – 0.80%, Class C – 1.55%, Class I – 0.40%, Class Y – 0.80%, Class R-3 - 1.05%, Class R-5 – 0.50%, and Class R-6 – 0.40%. This expense limitation excludes interest, taxes, brokerage commissions, costs relating to investments in other investment companies (acquired fund fees and expenses), dividends, and extraordinary expenses. The contractual fee waiver can be changed only with the approval of a majority of the fund’s Board of Trustees. Any reimbursement of fund expenses or reduction in Carillon’s investment advisory fees is subject to reimbursement by the fund within the following two fiscal years, if overall expenses fall below the lesser of its then current expense cap or the expense cap in effect at the time of the fee reimbursement.

 

Expense example | This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the fund’s operating expenses remain the same, except that the example reflects the fee waiver/expense reimbursement arrangement for each share class through February 29, 2020. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

 

carillontower.com | 43


Carillon Mutual Funds

Summary of Carillon Reams Core Bond Fund | 3.1.2019



Share Class Year 1 Year 3 Year 5
Year 10
Class A $454 $695 $956 $1,700
Class C $258 $582 $1,032 $2,281
Class I $41 $231 $436 $1,029
Class Y $82 $339 $617 $1,409
Class R-3 $107 $540 $998 $2,270
Class R-5 $51 $380 $732 $1,725
Class R-6 $41 $370 $723 $1,717

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 fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the fund’s performance. During the most recent fiscal year, the fund’s portfolio turnover rate was 278% of the average value of its portfolio.

 

Principal investment strategies | Under normal circumstances, the fund invests at least 80% of its net assets in bonds of varying maturities, including mortgage- and asset-backed securities.  The bonds in which the fund may invest also include other fixed income instruments such as debt securities, to-be-announced securities and other similar instruments issued by various U.S. and non-U.S. public- or private-sector entities.

 

The fund invests primarily in investment grade securities.  Investment grade securities include securities rated in one of the four highest rating categories by a nationally recognized statistical rating organization, such as BBB- or higher by Standard & Poor’s Financial Services LLC (“S&P®”).  In addition, the fund may purchase or sell securities on a when-issued, delayed delivery or forward commitment basis.  All securities will be U.S. dollar denominated although they may be securities of foreign issuers. Mortgage-backed securities are pools of mortgage loans that are assembled as securities for sale to investors by various governmental, government-related and private organizations. Asset-backed securities are securities that are secured or “backed” by pools of various types of assets, such as automobile loans, consumer loans, credit cards and equipment leases, on which cash payments are due at fixed intervals over set periods of time.

 

The fund may invest in derivative instruments, such as futures contracts (including interest rate, bond, U.S. Treasury and fixed income index futures contracts) and credit default swap agreements subject to applicable law and any other restrictions described in the fund’s Prospectus or Statement of Additional Information (“SAI”).  The fund’s investment in credit default swap agreements may include both single-name credit default swap agreements and credit default swap index products, such as CDX index products.  The use of these derivative transactions may allow the fund to obtain net long or short exposures to select interest rates, countries, durations or credit risks. These derivatives may be used to enhance Fund returns, increase liquidity, manage the duration of the fund’s portfolio and/or gain exposure to certain instruments or markets (i.e., the corporate bond market) in a more efficient or less expensive way. The credit default swap agreements that the fund invests in may provide exposure to an index of securities representative of the entire investment grade market. Derivative instruments that provide exposure to bonds may be used to satisfy the fund’s 80% investment policy.

 

The portfolio management team attempts to maximize total return over a long-term horizon through opportunistic investing in a broad array of eligible securities.  The investment process combines top-down interest rate management with bottom-up fixed income security selection, focusing on undervalued issues in the fixed income market.  The portfolio management team first establishes the portfolio’s duration, or interest rate sensitivity.  The portfolio management team determines whether the fixed income market is under- or over-priced by comparing current real interest rates (the nominal rates on U.S. Treasury securities less the investment adviser’s estimate of inflation) to historical real interest rates.  If the current real interest rate is higher than historical norms, the market is considered undervalued and the portfolio management team will manage the portfolio with a duration greater than the benchmark.  Duration is a measure used to determine the sensitivity of a security’s price to changes in interest rates.  The longer a security’s duration, the more sensitive it will be to changes in interest rates.  If the current real interest rate is less than historical norms, the market is considered overvalued and the portfolio management team will run a defensive portfolio by managing the portfolio with a duration less than the benchmark.  The portfolio management team normally structures the fund so that the overall portfolio has a duration of between two and seven years based on market conditions.  For purposes of calculating the fund’s portfolio duration, the fund includes the effect of the derivative instruments held by the fund.

 

The investment adviser then considers sector exposures.  Sector exposure decisions are made on both a top-down and bottom-up basis.  A bottom-

 

44 | carillontower.com

Carillon Mutual Funds

Summary of Carillon Reams Core Bond Fund | 3.1.2019



up issue selection process is the major determinant of sector exposure, as the availability of attractive securities in each sector determines their underweighting or overweighting in the Fund subject to sector exposure constraints.  However, for the more generic holdings in the Fund, such as agency notes and pass-through mortgage backed securities, top-down considerations will drive the sector allocation process on the basis of overall measurements of sector value such as yield spreads or price levels.

 

Once the investment adviser has determined an overall market strategy, the investment adviser selects the most attractive fixed income securities for the Fund. The portfolio managers screen hundreds of securities to determine how each will perform in various interest rate environments. The portfolio managers construct these scenarios by considering the outlook for interest rates, fundamental credit analysis and option-adjusted spread analysis. The portfolio managers compare these investment opportunities and assemble the Fund’s portfolio from the best available values. The investment adviser constantly monitors the expected returns of the securities in the Fund versus those available in the market and of other securities the investment adviser is considering for purchase. The investment adviser’s strategy is to replace securities that it feels are approaching fair market value with those that, according to its analysis, are significantly undervalued. As a result of this strategy, the fund’s portfolio turnover rate will vary from year to year depending on market conditions and the fund may engage in frequent and active trading.

 

Principal risks | The greatest risk of investing in the fund is that you could lose money. The values of most debt securities held by the fund may be affected by changing interest rates and by changes in the effective maturities and credit ratings of these securities. For example, the values of debt securities in the fund’s portfolio generally will decline when interest rates rise and increase when interest rates fall. As a result, the fund’s net asset value (“NAV”) may also increase or decrease. An investment in the fund is not a deposit with a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Investments in this fund are subject to the following primary risks, which are described in alphabetical order and not in order of importance or potential exposure:

 


Credit risk arises if an issuer of a fixed income security is unable to meet its financial obligations or goes bankrupt;

 


Credit ratings risk is the risk associated with the fact that ratings by nationally recognized rating agencies generally represent the agencies’ opinion of the credit quality of an issuer and may prove to be inaccurate;

 

Derivatives, such as swap agreements (including credit default swaps and credit default swap index products), options, futures contracts or currency forwards, may involve greater risks than if the fund invested in the reference obligation directly. These instruments are subject to general market risks, liquidity risks, interest rate risks, and credit risks. Derivatives also present the risk that the other party to the transaction will fail to perform. Derivatives also involve an increased risk of mispricing or improper valuation of the derivative instrument, and imperfect correlation between the value of the derivative and the underlying instrument so that the fund may not realize the intended benefits. When used for hedging, changes in the value of the derivative may also not correlate perfectly with the underlying asset, rate or index. Derivatives can cause the fund to participate in losses (as well as gains) in an amount that significantly exceeds the fund’s initial investment. The derivatives market may be subject to additional regulations in the future;

 

Fixed income market risk is the risk that market conditions or other events that impact fixed income issuers, including adverse issuer, political, regulatory, market, economic or other developments that may cause broad changes in market value, public perceptions concerning these developments, and adverse investor sentiment, will have an adverse effect on the fund. Events in the fixed income markets may lead to periods of volatility, unusual liquidity issues and, in some cases, credit downgrades and increased likelihood of default. Such events may cause the value of securities owned by the fund to go up or down, sometimes rapidly or unpredictably, and may lead to increased redemptions, which could cause the fund to experience a loss when selling securities to meet redemption requests by shareholders;

 

Foreign security risks, which are potential risks not associated with U.S. investments, include, but are not limited to: (1) currency exchange rate fluctuations, (2) political and financial instability, (3) less liquidity, (4) lack of uniform accounting, auditing and financial reporting standards, (5) increased volatility, (6) less government regulation and supervision of foreign stock exchanges, brokers and listed companies, and (7) delays in transaction settlement in some foreign markets. The risks associated with investments in governmental or quasi-governmental entities of a foreign country are heightened by the potential for unexpected governmental change and inadequate government oversight. Foreign security risk may also apply to ADRs, GDRs and EDRs;

 

Income risk is the risk that the fund’s income could decline due to falling market interest rates. In a falling interest rate environment, the fund may be required to invest its assets in lower-yielding securities;

 

Interest rate risk is the risk that the value of a fund’s investments in fixed income securities will fall when interest rates rise. The Federal Reserve raised the federal funds rate several times since December 2015 and may continue to increase rates in the future. Interest rates may rise, perhaps significantly and/or rapidly, potentially resulting in substantial losses to the fund. The effect of increasing interest rates is more pronounced for any intermediate- or longer-term fixed income obligations owned by the fund. For example, if a bond has a duration of seven years, a 1% increase in interest rates could be expected to result in a 7% decrease in the value of the bond;

 

Issuer risk is the risk that the value of a security may decline for a reason directly related to the issuer, such as management performance, financial leverage and reduced demand for the issuer’s goods or services;

 

Leverage risk is the risk that the use of financial instruments to increase potential returns, including the use of when-issued, delayed delivery or forward

 

carillontower.com | 45

 

Carillon Mutual Funds

Summary of Carillon Reams Core Bond Fund | 3.1.2019


commitment transactions, and derivatives used for investment (non-hedging) purposes, may cause the fund to be more volatile than if it had not been leveraged. The use of leverage may also accelerate the velocity of losses and can result in losses to the fund that exceed the amount originally invested;

 

Liquidity risk is the possibility that, during times of widespread market turbulence, trading activity in certain securities may be significantly hampered, which may reduce the returns of the fund because it may be unable to sell the securities at an advantageous price or time. Market prices for such securities may be volatile;

 

Maturity risk is the risk associated with the fact that the fund will invest in fixed income securities of varying maturities. A fixed income security’s maturity is one indication of the interest rate exposure of a security. Generally, the longer a fixed income security’s maturity, the greater the risk. Conversely, the shorter a fixed income security’s maturity, the lower the risk;

 

Mortgage- and asset-backed security risk, which is possible in an unstable or depressed housing market, arises from the potential for mortgage failure, premature repayment of principal, or a delay in the repayment of principal. In a to-be-announced (“TBA”) mortgage-backed transaction, the fund and the seller agree upon the issuer, interest rate and terms of the underlying mortgages. However, the seller does not identify the specific underlying mortgages until it issues the security. TBA mortgage-backed securities increase interest rate risks because the underlying mortgages may be less favorable than anticipated by the fund;

 

Portfolio turnover risk is the risk that performance may be adversely affected by a high rate of portfolio turnover, which generally leads to greater transaction costs;

 

Redemption risk is the risk that, due to a rise in interest rates or other changing government policies that may cause investors to move out of fixed income securities on a large scale, 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; and

 

Valuation risk arises because the securities held by the fund are generally priced by an independent pricing service and may also be priced using dealer quotes or fair valuation methodologies in accordance with valuation procedures adopted by the fund’s Board. The prices provided by the independent pricing service or dealers or the fair valuations may be different from the prices used by other mutual funds or from the prices at which securities are actually bought and sold.

 

Performance | The bar chart that follows illustrates annual fund returns for the periods ended December 31. The table that follows compares the fund’s returns for various periods with benchmark returns. This information is intended to give you some indication of the risk of investing in the fund by demonstrating how its returns have varied over time. The bar chart shows the fund’s Class I share performance from one year to another. The Class I and Class Y shares of the fund have adopted the performance history and financial statements of the Institutional Class and Class Y shares, respectively, of the fund’s predecessor. Each of the fund’s share classes is invested in the same portfolio of securities, and the annual returns would have differed only to the extent that the classes do not have the same sales charges and expenses. The fund’s past performance (before and after taxes) is not necessarily an indication of how the fund will perform in the future. To obtain more current performance data as of the most recent month-end, please visit our website at carillontower.com.

 

 

46 | carillontower.com

Carillon Mutual Funds

Summary of Carillon Reams Core Bond Fund | 3.1.2019



During 10 year period
Return
Quarter Ended
(Class I shares):
   
Best Quarter
20.71%
June 30, 2009
Worst Quarter
(2.95)%
December 31, 2016


Average annual total returns  
(for the periods ended December 31, 2018):

 

Fund return (after deduction of sales charges and expenses) 


Share Class
Inception
Date
1-yr
5-yr
10-yr
Lifetime
(if less than
10 yrs)
Class I – Before Taxes
2/23/2001
1.24%
2.05%
5.65%
 
After Taxes on Distributions
 
0.30%
1.12%
4.43%
 
After Taxes on Distributions and Sale of Fund Shares
 
0.72%
1.15%
3.97%
 
Class A – Before Taxes
11/20/17
(2.84)%
   
(2.34)%
Class C – Before Taxes
11/20/17
0.16%
   
0.29%
Class Y – Before Taxes
4/21/11
0.92%
1.66%
2.47%
Class R-3 – Before Taxes
11/20/17
0.67%
   
0.81%
Class R-5 – Before Taxes
11/20/17
1.23%
   
1.36%
Class R-6 – Before Taxes
11/20/17
1.33%
   
1.47%

 

carillontower.com | 47


Carillon Mutual Funds

Summary of Carillon Reams Core Bond Fund | 3.1.2019



Index (reflects no deduction for fees, expenses or taxes)
1-yr
5-yr
10-yr
Lifetime
(From Inception Date of Class A, Class C, Class R-3, Class R-5 and Class R-6 Shares)
Lifetime
(Since Inception Date of Class Y Shares)
Bloomberg Barclays U.S. Aggregate Bond Index
0.01%
2.52%
3.48%
0.36%
2.77%


After-tax returns are calculated using the historically 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. After-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements, such as a 401(k) plan or individual retirement account (“IRA”). After-tax returns are shown for Class I only and after-tax returns for Class A, Class C, Class Y, Class R-3, Class R-5, and Class R-6 will vary. The return after taxes on distributions and sale of fund shares may exceed the return before taxes due to an assumed tax benefit from any losses on a sale of fund shares at the end of the measurement period.

 

Investment Adviser | Carillon Tower Advisers, Inc. is the fund’s investment adviser.

 

Sub-adviser | Scout Investments, Inc., through its Reams Asset Management division, serves as the sub-adviser to the fund.

 

Portfolio Managers | Mark M. Egan, CFA®, has served as the Lead Portfolio Manager of the fund and Thomas M. Fink, CFA®, Todd C. Thompson, CFA®, Stephen T. Vincent, CFA® and Clark W. Holland, CFA®, have served as Portfolio Co-Managers of the fund since the fund’s inception in 2017. Jason J. Hoyer, CFA®, has served as Portfolio Co-Manager of the fund since April 2018. Messrs. Egan, Fink, Thompson, Vincent, Holland and Hoyer are jointly and primarily responsible for the day-to-day management of the fund. Mr. Egan served as the Lead Portfolio Manager of the fund’s predecessor and Messrs. Fink and Thompson served as Portfolio Co-Managers of the fund’s predecessor from its inception in 2001 to 2017. Messrs. Vincent and Holland served as Portfolio Co-Managers of the fund’s predecessor from 2009 and 2014, respectively, to 2017.

 

Purchase and sale of fund shares | You may purchase, redeem, or exchange Class A, C, I and Y shares of the fund on any business day through your financial intermediary, by mail at Carillon Family of Funds, c/o U.S. Bank Global Fund Services, P.O. Box 701, Milwaukee, WI 53201-0701 (for regular mail) or 615 East Michigan Street, Third Floor, Milwaukee, WI, 53202 (for overnight service), or by telephone (800.421.4184). In Class A and Class C shares, the minimum purchase amount is $1,000 for regular accounts, $500 for retirement accounts and $50 through a periodic investment program, with a minimum subsequent investment plan of $50 per month. In Class Y shares, the minimum purchase amount is $1,000 for regular accounts, $100 for retirement accounts and $100 through a periodic investment program, with a minimum subsequent investment plan of $50 per month. For individual investors, the minimum initial purchase for Class I shares is $10,000, while fee-based plan sponsors set their own minimum requirements. Class R-3, Class R-5 and Class R-6 shares can only be purchased through a participating retirement plan and the minimum initial purchase for Class R-3, Class R-5 and Class R-6 shares is set by the plan administrator.

 

Tax information | The dividends you receive from the fund will be taxed as ordinary income or net capital gain (i.e., the excess of net long-term capital gain over net short-term capital loss) unless you are investing through a tax-deferred arrangement, such as a 401(k) plan or an IRA, in which case you may be subject to federal income tax on withdrawals from the arrangement.

 

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 and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the fund over another investment. Ask your salesperson or visit your financial intermediary’s website for more information.

 

48 | carillontower.com



 

Carillon Mutual Funds
SUMMARY OF CARILLON REAMS CORE PLUS BOND FUND | 3. 1. 2019

 

Investment objective | The Carillon Reams Core Plus Bond Fund (“Core Plus Bond Fund” or the “fund”) seeks a high level of total return consistent with the preservation of capital.

 

Fees and expenses of the fund | The tables that follow describe the fees and expenses that you may pay if you buy and hold shares of the Core Plus Bond Fund. You may qualify for sales discounts if you and your family invest, or agree to invest in the future, at least $25,000 in the Class A shares of the Carillon Family of Funds. More information about these and other discounts is available from your financial professional, on page 82 of the fund’s Prospectus and on page 44 of the fund’s Statement of Additional Information. Although the fund does not impose any sales charge on Class I shares, you may pay a commission to your broker on your purchases and sales of those shares, which is not reflected in the tables or Example below.

 

Shareholder fees  

(fees paid directly from your investment):  

Class
A
  

Class  

C  

Class

  I  

Class Y

Class  

R-3  

Class  

R-5  

Class  

R-6  

Maximum Sales Charge Imposed on Purchases (as a % of offering price) 3.75% None None None None None None
Maximum Deferred Sales Charge (as a % of original purchase price or redemption proceeds, whichever is lower)
None (a) 1.00% (a) None None None None None
Redemption Fee None None None None None None None

  

Annual fund operating expenses 

(expenses that you pay each year as a percentage of the value of your investment):

Class  

A  

Class  

C  

Class  

I  

Class  

Y  

Class  

R-3  

Class  

R-5  

Class  

R-6  

Management Fees 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% 0.40%
Distribution and Service (12b-1) Fees 0.25% 1.00% 0.00% 0.25% 0.50% 0.00% 0.00%
Other Expenses 0.32% 0.45% 0.20% 0.30% (b) 0.87% 0.87% 0.87%
Total Annual Fund Operating Expenses 0.97% 1.85% 0.60% 0.95% 1.77% 1.27% 1.27%
Fee Waiver and/or Expense Reimbursement (c) (0.17)% (0.30)% (0.20)% (0.15)% (0.72)% (0.77)% (0.87)%
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement 0.80% 1.55% 0.40% 0.80% 1.05% 0.50% 0.40%

(a) If you purchased $1,000,000 or more of Class A shares of a Carillon mutual fund that were not otherwise eligible for a sales charge waiver and sell the shares within 18 months from the date of purchase, you may pay up to a 1% contingent deferred sales charge at the time of sale. If you sell Class C shares less than one year after purchase, you will pay a 1% CDSC at the time of sale.

(b) Other Expenses have been restated to reflect the fee rates that became effective upon the reorganization of the fund on November 20, 2017.  

(c) Carillon Tower Advisers, Inc. (“Carillon”) has contractually agreed to waive its investment advisory fee and/or reimburse certain expenses of the fund to the extent that: annual operating expenses of each class exceed a percentage of that class’ average daily net assets through February 29, 2020 as follows: Class A – 0.80%, Class C – 1.55%, Class I – 0.40%, Class Y – 0.80%, Class R-3 - 1.05%, Class R-5 – 0.50%, and Class R-6 – 0.40%. This expense limitation excludes interest, taxes, brokerage commissions, costs relating to investments in other investment companies (acquired fund fees and expenses), dividends, and extraordinary expenses. The contractual fee waiver can be changed only with the approval of a majority of the fund’s Board of Trustees. Any reimbursement of fund expenses or reduction in Carillon’s investment advisory fees is subject to reimbursement by the fund within the following two fiscal years, if overall expenses fall below the lesser of its then current expense cap or the expense cap in effect at the time of the fee reimbursement.

 

Expense example | This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the fund’s operating expenses remain the same, except that the example reflects the fee waiver/expense reimbursement arrangement for each share class through February 29, 2020. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

 

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Carillon Mutual Funds
SUMMARY OF CARILLON REAMS CORE PLUS BOND FUND | 3. 1. 2019
Share Class Year 1 Year 3 Year 5 Year 10
Class A $454 $656 $875 $1,505
Class C $258 $553 $973 $2,145
Class I $41 $172 $315 $731
Class Y $82 $288 $511 $1,153
Class R-3 $107 $487 $892 $2,024
Class R-5 $51 $327 $623 $1,466
Class R-6 $41 $317 $613 $1,457

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 fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the fund’s performance. During the most recent fiscal year, the fund’s portfolio turnover rate was 292% of the average value of its portfolio.

 

Principal investment strategies | Under normal circumstances, the fund invests at least 80% of its net assets in bonds of varying maturities, including mortgage- and asset-backed securities.  The bonds in which the Fund may invest also include other fixed income instruments such as debt securities, to-be-announced securities and other similar instruments issued by various U.S. and non-U.S. public- or private-sector entities.  The fund invests primarily in investment grade securities, but may also invest up to 25% of its assets in non-investment grade securities, also known as high yield securities or “junk” bonds.  Investment grade securities include securities rated in one of the four highest rating categories by a nationally recognized statistical rating organization, such as BBB- or higher by Standard & Poor’s Financial Services LLC (“S&P®”).  In addition, the fund may purchase or sell securities on a when-issued, delayed delivery or forward commitment basis.  Securities will generally be U.S. dollar denominated although they may be securities of foreign issuers.  The fund may also invest in securities denominated in foreign currencies.  Mortgage-backed securities are pools of mortgage loans that are assembled as securities for sale to investors by various governmental, government-related and private organizations. Asset-backed securities are securities that are secured or “backed” by pools of various types of assets, such as automobile loans, consumer loans, credit cards and equipment leases, on which cash payments are due at fixed intervals over set periods of time.

 

The Fund may invest in derivative instruments, such as options, futures contracts (including interest rate, bond, U.S. Treasury and fixed income index futures contracts), currency forwards and swap agreements (including credit default swaps) subject to applicable law and any other restrictions described in the fund’s Prospectus or Statement of Additional Information (“SAI”).  The fund’s investment in credit default swap agreements may include both single-name credit default swap agreements and credit default swap index products, such as CDX index products. The use of these derivative transactions may allow the Fund to obtain net long or short exposures to select currencies, interest rates, countries, durations or credit risks. These derivatives may be used to enhance fund returns, increase liquidity, manage the duration of the fund’s portfolio and/or gain exposure to certain instruments or markets (i.e., the corporate bond market) in a more efficient or less expensive way. The credit default swap agreements that the fund invests in may provide exposure to an index of securities representative of the entire investment grade and high yield fixed income markets, which can include underlying issuers rated as low as CCC by S&P®. Derivative instruments that provide exposure to bonds may be used to satisfy the fund’s 80% investment policy.

 

The portfolio management team attempts to maximize total return over a long-term horizon through opportunistic investing in a broad array of eligible securities.  The investment process combines top-down interest rate management with bottom-up fixed income security selection, focusing on undervalued issues in the fixed income market.  The portfolio management team first establishes the portfolio’s duration, or interest rate sensitivity. The portfolio management team determines whether the fixed income market is under- or over-priced by comparing current real interest rates (the nominal rates on U.S. Treasury securities less the investment adviser’s estimate of inflation) to historical real interest rates. If the current real interest rate is higher than historical norms, the market is considered undervalued and the portfolio management team will manage the portfolio with a duration greater than the benchmark.  Duration is a measure used to determine the sensitivity of a security’s price to changes in interest rates. The longer a security’s duration, the more sensitive it will be to changes in interest rates.  If the current real interest rate is less than historical norms, the market is considered overvalued and the portfolio management team will run a defensive portfolio by managing the portfolio with a duration less than the benchmark.  The portfolio management team normally structures the fund so that the overall portfolio has a duration of between two and seven years based on market