Prospectus

 

February 1, 2023

 

EQUITY FUNDS

   

STERLING CAPITAL BEHAVIORAL LARGE CAP VALUE EQUITY FUND

A SHARES: BBTGX

C SHARES: BCVCX

STERLING CAPITAL MID VALUE FUND

A SHARES: OVEAX

C SHARES: OVECX

STERLING CAPITAL BEHAVIORAL SMALL CAP VALUE EQUITY FUND

A SHARES: SPSAX

C SHARES: SPSDX

STERLING CAPITAL SPECIAL OPPORTUNITIES FUND

A SHARES: BOPAX

C SHARES: BOPCX

STERLING CAPITAL EQUITY INCOME FUND

A SHARES: BAEIX

C SHARES: BCEGX

STERLING CAPITAL BEHAVIORAL INTERNATIONAL EQUITY FUND

A SHARES: SBIAX

C SHARES: SBIDX

STERLING CAPITAL MID CAP RELATIVE VALUE FUND

A SHARES: STRLX

C SHARES: STRNX

STERLING CAPITAL REAL ESTATE FUND

A SHARES: STMMX

C SHARES: STMOX

STERLING CAPITAL SMALL CAP VALUE FUND

A SHARES: STSNX

C SHARES: STSOX

STERLING CAPITAL SMID OPPORTUNITIES FUND

A SHARES: SMDPX

C SHARES: SMDQX

BOND FUNDS

   

TAXABLE BOND FUNDS

   

STERLING CAPITAL ULTRA SHORT BOND FUND

A SHARES: BUSRX

 

STERLING CAPITAL SHORT DURATION BOND FUND

A SHARES: BSGAX

C SHARES: BBSCX

STERLING CAPITAL INTERMEDIATE U.S. GOVERNMENT FUND

A SHARES: BGVAX

C SHARES: BIUCX

STERLING CAPITAL TOTAL RETURN BOND FUND

A SHARES: BICAX

C SHARES: BICCX

STERLING CAPITAL LONG DURATION CORPORATE BOND FUND

A SHARES: SCCMX

C SHARES: SCCNX

STERLING CAPITAL QUALITY INCOME FUND

A SHARES: SCSSX

C SHARES: SCSTX

TAX-FREE BOND FUNDS

   

STERLING CAPITAL NORTH CAROLINA INTERMEDIATE TAX-FREE FUND

A SHARES: BNCAX

C SHARES: BBNCX

STERLING CAPITAL SOUTH CAROLINA INTERMEDIATE TAX-FREE FUND

A SHARES: BASCX

C SHARES: BSCCX

STERLING CAPITAL VIRGINIA INTERMEDIATE TAX-FREE FUND

A SHARES: BVAAX

C SHARES: BVACX

STERLING CAPITAL WEST VIRGINIA INTERMEDIATE TAX-FREE FUND

A SHARES: BWVAX

C SHARES: BWVCX

 

Class A Shares
Class C Shares

 

Questions?

 

Call 1-800-228-1872
or your investment representative.

 

The U.S. Securities and Exchange Commission has not approved or disapproved the shares described in this Prospectus or determined whether this Prospectus is accurate or complete. Anyone who tells you otherwise is committing a crime.

 

 

   

Sterling Capital Funds

 

Table of Contents

 

     
 

Fund Summaries

Carefully review this important section, which summarizes each Fund’s objectives, fees, principal investment strategies and risks, past performance, management, how to buy and sell fund shares, tax information and payments to broker-dealers.  

Equity Funds

 

4

Behavioral Large Cap Value Equity Fund

 

10

Mid Value Fund

 

15

Behavioral Small Cap Value Equity Fund

 

21

Special Opportunities Fund

 

27

Equity Income Fund

 

32

Behavioral International Equity Fund

 

38

Mid Cap Relative Value Fund

 

43

Real Estate Fund

 

48

Small Cap Value Fund

 

53

SMID Opportunities Fund

   

Bond Funds

 

59

Ultra Short Bond Fund

 

66

Short Duration Bond Fund

 

74

Intermediate U.S. Government Fund

 

80

Total Return Bond Fund

 

87

Long Duration Corporate Bond Fund

 

94

Quality Income Fund

 

101

North Carolina Intermediate Tax-Free Fund

 

107

South Carolina Intermediate Tax-Free Fund

 

113

Virginia Intermediate Tax-Free Fund

 

119

West Virginia Intermediate Tax-Free Fund

 

Additional Investment Strategies and Risks

Review this section for additional information on investment strategies and their risks.  

Equity Funds

 

125

Behavioral Large Cap Value Equity Fund

 

125

Mid Value Fund

 

125

Behavioral Small Cap Value Equity Fund

 

125

Special Opportunities Fund

 

125

Equity Income Fund

 

125

Behavioral International Equity Fund

 

125

Mid Cap Relative Value Fund

 

125

Real Estate Fund

 

125

Small Cap Value Fund

 

125

SMID Opportunities Fund

   

Bond Funds

 

125

Ultra Short Bond Fund

 

125

Short Duration Bond Fund

 

125

Intermediate U.S. Government Fund

 

125

Total Return Bond Fund

 

125

Long Duration Corporate Bond Fund

 

125

Quality Income Fund

 

125

North Carolina Intermediate Tax-Free Fund

 

125

South Carolina Intermediate Tax-Free Fund

 

125

Virginia Intermediate Tax-Free Fund

 

125

West Virginia Intermediate Tax-Free Fund

 

128

Investment Practices

 

130

Additional Information about the Funds’ Investments

 

134

Investment Risks

 

2

 

 

   

Sterling Capital Funds

Table of Contents

 

 

Fund Management

Review this section for details on the people and organizations who oversee the Funds.    

143

The Investment Adviser

 

144

Portfolio Managers

 

146

The Administrator and Underwriter

 

Shareholder Information

Review this section for details on how shares are valued, how to purchase, sell and exchange shares, related charges and payments of dividends and distributions.    
 

148

Choosing a Share Class

 

149

Pricing of Fund Shares

 

150

Purchasing and Adding to Your Shares

 

154

Selling Your Shares

 

156

General Policies on Selling Shares

 

158

Distribution Arrangements/Sales Charges

 

161

Distribution and Shareholder Service (12b-1) Fees

 

163

Exchanging Your Shares

 

164

Cost Basis Reporting

 

164

Market Timing Policies

 

164

Dividends, Distributions and Taxes

 

166

Additional Information About the Funds

 

Other Information About the Funds

     
 

170

Financial Highlights

 

Appendix

     
 

186

Appendix

3

 

 

 

Sterling Capital Behavioral Large Cap Value Equity Fund

 

Summary

 

 

Class A Shares BBTGX

Class C Shares BCVCX

 

 

BBTGX Class A Shares

BCVCX Class C Shares

Investment Objective

 

The Fund seeks maximum long-term total return, by investing primarily in equity securities of large companies.

 

Fee Table

 

This table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts or waivers if you and your family invest, or agree to invest in the future, at least $50,000 in the Sterling Capital Funds. More information about these and other sales charge discounts and waivers is available from your financial intermediary, in “Distribution Arrangements/Sales Charges” on page 158 of the Fund’s prospectus, in the Appendix: Sales Charge Discounts and Waivers Available from Certain Financial Intermediaries (the “Appendix”) and in “Sales Charges” on page 53 of the Fund’s Statement of Additional Information (“SAI”).

 

Shareholder Fees (fees paid directly from your investment)

 

 

Class A
Shares

Class C
Shares

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

5.75%

None

Maximum Deferred Sales Charge (load) (as a % of the lesser of the cost of your shares or their net asset value at the time of redemption)

None

1.00%

Redemption Fee

None

None

 

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

 

Class A
Shares

Class C
Shares

Management Fees

0.45%

0.45%

Distribution and Service (12b-1) Fees

0.25%

1.00%

Other Expenses

0.33%

0.33%

Total Annual Fund Operating Expenses

1.03%

1.78%

 

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:

 

 

1
Year

3
Years

5
Years

10
Years

Class A Shares

$674

$884

$1,111

$1,762

Class C Shares

$181

$560

$964

$1,897

 

4

 

 

 

Sterling Capital Behavioral Large Cap Value Equity Fund

Summary

 

 

You would pay the following expenses if you did not redeem your shares:

 

 

1
Year

3
Years

5
Years

10
Years

Class A Shares

$674

$884

$1,111

$1,762

Class C Shares

$181

$560

$964

$1,897

 

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 125.15% of the average value of its portfolio.

 

Strategy, Risks and Performance

 

Principal Strategy

 

To pursue its investment objective, the Fund invests, under normal circumstances, at least 80% of its net assets plus borrowings for investment purposes in the equity securities of large companies. Large companies are defined as companies with market capitalizations within the range of those companies in the Standard & Poor’s 500® Index (“S&P 500® Index”) at the time of purchase. As of December 31, 2022, the smallest company in the S&P 500® Index had a market capitalization of $4 billion and the largest company had a market capitalization of $2.1 trillion. Under normal market conditions, the Fund primarily invests in U.S. traded equity securities. The term “U.S. traded equity securities” refers to domestically traded U.S. common stocks (including securities of real estate investment trusts (“REITs”) and exchange-traded funds (“ETFs”)) and U.S. traded equity stocks of foreign companies. The Fund may invest in securities of middle capitalization companies.

 

Sterling Capital Management LLC (“Sterling Capital”) applies “behavioral finance” principles in the construction of the Fund’s portfolio. Behavioral finance theorizes that investment decisions are often influenced by biases, heuristics (i.e., experienced-based techniques for decision making) and emotion, and that investors can be predictable (and, at times, irrational) in their decision making. These emotionally charged investment decisions can lead to stock price anomalies that create opportunities in the marketplace. Sterling Capital seeks to capitalize on these behaviorally driven market anomalies by employing a disciplined investment process. In implementing behavioral finance principles, Sterling Capital ranks companies in the Fund’s investment universe based on a number of factors that it believes can be indicators of under- or over-valuation of a security by the market, such as valuation (e.g., seeking to invest in companies that Sterling Capital believes are undervalued), price momentum (e.g., identifying securities that Sterling Capital believes will experience sustained positive price momentum) and earnings revisions (e.g., identifying and capitalizing on what Sterling Capital believes are under-reactions by the market to positive earnings revisions). Sterling Capital also takes into account such factors as market capitalization, country exposure, and sector exposure to construct a diversified portfolio. Sterling Capital considers selling a security when the security’s ranking becomes less attractive and/or in light of liquidity, sector exposure, country exposure or diversification considerations.

 

5

 

 

 

Sterling Capital Behavioral Large Cap Value Equity Fund

Summary

 

 

Principal Risks

 

All investments carry a certain amount of risk and the Fund cannot guarantee that it will achieve its investment objective. An investment in the Fund is not a deposit or obligation of any bank, is not endorsed or guaranteed by any bank and is not insured by the Federal Deposit Insurance Corporation (“FDIC”) or any other government agency. You may lose money by investing in the Fund. Below are the principal risks of investing in the Fund.

 

Market Risk: The possibility that the Fund’s stock holdings will decline in price because of a broad stock market decline. Markets generally move in cycles, with periods of rising prices followed by periods of falling prices. The value of your investment will tend to increase or decrease in response to these movements.

 

Investment Style Risk: The possibility that a market segment on which this Fund focuses — large cap stocks, value stocks and momentum stocks — will underperform other kinds of investments or market averages. A value stock may decrease in price or may not increase in price as anticipated by the portfolio manager if other investors fail to recognize the company’s value or the factors that the portfolio manager believes will cause the stock price to increase do not occur. A stock owned primarily for its momentum characteristics may start to underperform abruptly. In addition, the Fund’s focus on behavioral finance principles may cause the Fund to underperform funds that do not employ a behavioral finance strategy. There can be no guarantee that the factors that the Fund’s investment adviser considers in selecting stocks, and the weight that the adviser puts on each factor, will be effective in identifying and capitalizing on stock price anomalies.

 

Company-Specific Risk: The possibility that a particular stock may lose value due to factors specific to the company itself, including deterioration of its fundamental characteristics, an occurrence of adverse events at the company, or a downturn in its business prospects.

 

Mid Capitalization Company Risk: Investments in middle capitalization companies may be riskier, more volatile and more vulnerable to economic, market and industry changes than investments in larger, more established companies. As a result, share price changes may be more sudden or erratic than the prices of other equity securities, especially over the short term.

 

Real Estate-Related Investment and REIT Risk: Real estate-related investments may decline in value as a result of factors affecting the real estate industry. Risks associated with investments in securities of companies in the real estate industry include decline in the value of the underlying real estate, default, prepayment, changes in value resulting from changes in interest rates and demand for real and rental property, and the management skill and creditworthiness of REIT issuers. The Fund will indirectly bear its proportionate share of expenses, including management fees, paid by each REIT in which the Fund invests.

 

ETF Risk: The risks associated with investing in ETFs include the risks of owning the underlying securities the ETF is designed to track. Lack of liquidity in an ETF could result in the ETF being more volatile than the underlying portfolio of securities. When the Fund invests in an ETF, in addition to directly bearing expenses associated with its own operations, the Fund will bear a pro rata portion of the ETF’s expenses. As a result, it may be more costly to own an ETF than owning the underlying portfolio of securities directly.

 

Active Trading Risk: The Fund may trade securities actively, which could increase its transaction costs (thereby lowering its performance) and may increase the amount of taxes that a shareholder pays, by increasing the amount of the Fund’s realized capital gains and increasing the portion of the Fund’s realized capital gains that are short-term capital gains.

 

6

 

 

 

 

Sterling Capital Behavioral Large Cap Value Equity Fund

Summary

 

 

Operational and Technology Risk: Cyber-attacks, disruptions, or failures that affect the Fund’s service providers, counterparties, market participants, or issuers of securities held by the Fund may adversely affect the Fund and its shareholders, including by causing losses for the Fund or impairing Fund operations.

 

Focused Investment Risk: Investments focused in asset classes, countries, regions, sectors, industries, or issuers that are subject to the same or similar risk factors and investments whose prices are closely correlated are subject to greater overall risk than investments that are more diversified or whose prices are not as closely correlated.

 

Management Risk: The risk that an investment technique used by the Fund’s portfolio manager may fail to produce the intended result.

 

For more information about the Fund’s risks, please see the “Additional Investment Strategies and Risks” section in this Prospectus.

 

Performance

 

The following bar chart and table provide some indication of the risks of investing in the Fund. The bar chart shows changes in the Fund’s performance from year to year for Class A Shares. The table shows how the Fund’s average annual returns for 1, 5 and 10 years compared with those of a broad measure of market performance. The Fund’s past performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. Updated performance information is available at no cost by visiting www.sterlingcapitalfunds.com or by calling 1-800-228-1872.

 

Sales charges are not reflected in the bar chart, and if those charges were included, returns would be less than those shown.

 

Class A Shares Annual Total Returns for years ended 12/31

 

 

 

Best quarter:

14.68%

03/31/2021

Worst quarter:

-26.66%

03/31/2020

 

7

 

 

 

 

Sterling Capital Behavioral Large Cap Value Equity Fund

Summary

 

 

Average Annual Total Returns as of December 31, 2022

 

 

1
Year

5
Years

10
Years

Class A Shares

     

Return Before Taxes

-11.14%

4.13%

8.67%

Return After Taxes on Distributions

-11.51%

3.10%

7.92%

Return After Taxes on Distributions and Sale of Fund Shares

-6.33%

3.02%

6.93%

       

Class C Shares

-6.42%

4.59%

8.50%

Russell 1000® Value Index

     

(reflects no deductions for fees, expenses, or taxes)

-7.54%

6.67%

10.29%

Bloomberg US 1000 Value Index

     

(reflects no deductions for fees, expenses, or taxes)

-2.51%

7.58%

11.07%

Russell 1000® Value Index (reflects no deductions for fees, expenses, or taxes)

Bloomberg US 1000 Value Index (reflects no deductions for fees, expenses, or taxes)

 

After-tax returns are shown only for Class A Shares and are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-advantaged arrangements such as 401(k) plans or individual retirement accounts. After-tax returns for Class C Shares will vary.

 

Management

 

 

Investment Adviser

Sterling Capital Management LLC

 

Portfolio Managers

Robert W. Bridges, CFA
Senior Managing Director, CIO and Head of Equity of Sterling Capital and Co-Portfolio Manager
Since August 2013

 

Robert O. Weller, CFA
Executive Director of Sterling Capital and Co-Portfolio Manager
Since August 2013

 

Purchase and Sale of Fund Shares

 

Account Type

Minimum
Initial
Investment

Minimum
Subsequent
Investment

Regular Account

$ 1,000

$ 0

Automatic Investment Plan

$ 25

$ 25

 

You may buy or sell Class A Shares and Class C Shares on any business day by contacting your financial representative or contacting the Fund (i) by mail at Sterling Capital Funds, P.O. Box 9762, Providence, RI 02940-9762 (after February 16, 2023, please address mail to Sterling Capital Funds P.O. Box 534465, Pittsburgh, PA 15253-4465); or (ii) by telephone at 1-800-228-1872. In addition, Class A Shares and Class C Shares are available for purchase at www.sterlingcapitalfunds.com.

 

8

 

 

 

Sterling Capital Behavioral Large Cap Value Equity Fund

Summary

 

 

Tax Information

 

The Fund normally distributes its net investment income and net realized capital gains, if any, to shareholders. These distributions are generally taxable to you as ordinary income or capital gains, unless you are investing through a tax-advantaged arrangement, such as a 401(k) plan (which may be taxable upon withdrawal) or an individual retirement account (which may be taxable upon withdrawal).

 

Payments to Broker-Dealers and Other Financial Intermediaries

 

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

 

9

 

 

 

Sterling Capital Mid Value Fund

 

Summary

 

 

Class A Shares OVEAX

Class C Shares OVECX

 

 

OVEAX Class A Shares

OVECX Class C Shares

Russell Midcap® Value Index (reflects no deductions for fees, expenses, or taxes)

Bloomberg US Mid Cap Value Index (reflects no deductions for fees, expenses, or taxes)

Investment Objective

 

The Fund seeks long-term growth of capital by investing the Fund’s assets primarily in equity securities of companies that are considered to be undervalued.

 

Fee Table

 

This table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts or waivers if you and your family invest, or agree to invest in the future, at least $50,000 in the Sterling Capital Funds. More information about these and other sales charge discounts and waivers is available from your financial intermediary, in “Distribution Arrangements/Sales Charges” on page 158 of the Fund’s prospectus, in the Appendix: Sales Charge Discounts and Waivers Available from Certain Financial Intermediaries (the “Appendix”) and in “Sales Charges” on page 53 of the Fund’s Statement of Additional Information (“SAI”).

 

Shareholder Fees (fees paid directly from your investment)

 

 

Class A
Shares

Class C
Shares

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

5.75%

None

Maximum Deferred Sales Charge (load) (as a % of the lesser of the cost of your shares or their net asset value at the time of redemption)

None

1.00%

Redemption Fee

None

None

 

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

 

Class A
Shares

Class C
Shares

Management Fees

0.60%

0.60%

Distribution and Service (12b-1) Fees

0.25%

1.00%

Other Expenses

0.28%

0.28%

Total Annual Fund Operating Expenses

1.13%

1.88%

 

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:

 

 

1
Year

3
Years

5
Years

10
Years

Class A Shares

$684

$913

$1,161

$1,871

Class C Shares

$191

$591

$1,016

$2,005

 

10

 

 

 

Sterling Capital Mid Value Fund

Summary

 

 

You would pay the following expenses if you did not redeem your shares:

 

 

1
Year

3
Years

5
Years

10
Years

Class A Shares

$684

$913

$1,161

$1,871

Class C Shares

$191

$591

$1,016

$2,005

 

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 29.05% of the average value of its portfolio.

 

Strategy, Risks and Performance

 

Principal Strategy

 

To pursue its investment objective, the Fund will invest, under normal circumstances, at least 80% of its net assets plus borrowings for investment purposes in the securities of middle capitalization companies. Middle capitalization companies are defined as companies with market capitalizations within the range of those companies in the Russell Midcap® Index at the time of purchase. As of December 31, 2022, the capitalization range of the Russell Midcap® Index was between $306 million and $53 billion. Under normal market conditions, the Fund primarily invests in domestically traded U.S. common stocks, U.S. traded common stocks of foreign companies (including stocks of issuers located in emerging markets), and American Depositary Receipts (“ADRs”). The Fund may have exposure to emerging markets through its investments in ADRs. The Fund may invest in securities of small and large capitalization companies.

 

In managing the Fund, the portfolio manager attempts to diversify across different economic sectors, selecting those stocks that he believes are undervalued. In choosing individual stocks, the portfolio manager considers both quantitative and qualitative factors to examine the fundamental characteristics of a particular company. Quantitative analysis focuses on businesses with strong cash flow, high return on invested capital, and on attractive growth prospects. Qualitative characteristics the portfolio manager looks for include companies with a sustainable competitive advantage, a favorable industry structure and a strong management team focused on creating shareholder value. The portfolio manager may consider selling a stock owned by the Fund when the stock price exceeds the portfolio manager’s estimate of fair value, key fundamentals change or the expected level of progress cannot be demonstrated. The Fund may reduce its position in a particular stock if the stock represents a disproportionately large position within the Fund’s portfolio, or more attractive investment alternatives are identified. The portfolio manager may consider environmental, social and governance (“ESG”) factors as part of the investment process.

 

Principal Risks

 

All investments carry a certain amount of risk and the Fund cannot guarantee that it will achieve its investment objective. An investment in the Fund is not a deposit or obligation of any bank, is not endorsed or guaranteed by any bank and is not insured by the Federal Deposit Insurance Corporation (“FDIC”) or any other government agency. You may lose money by investing in the Fund. Below are the principal risks of investing in the Fund.

 

11

 

 

 

 

Sterling Capital Mid Value Fund

Summary

 

 

Market Risk: The possibility that the Fund’s stock holdings will decline in price because of a broad stock market decline. Markets generally move in cycles, with periods of rising prices followed by periods of falling prices. The value of your investment will tend to increase or decrease in response to these movements.

 

Investment Style Risk: The possibility that the market segment on which this Fund focuses — mid cap value stocks — will underperform other kinds of investments or market averages. A value stock may decrease in price or may not increase in price as anticipated by the portfolio manager if other investors fail to recognize the company’s value or the factors that the portfolio manager believes will cause the stock price to increase do not occur.

 

Small Capitalization Company Risk: Investing in smaller, lesser-known companies involves greater risk than investing in those that are more established. A small company’s financial well-being may, for example, depend heavily on just a few products or services. In addition, small company stocks tend to trade less frequently and in lesser quantities, and their market prices often fluctuate more, than those of larger firms.

 

Mid Capitalization Company Risk: Investments in middle capitalization companies may be riskier, more volatile and more vulnerable to economic, market and industry changes than investments in larger, more established companies. As a result, share price changes may be more sudden or erratic than the prices of other equity securities, especially over the short term.

 

Company-Specific Risk: The possibility that a particular stock may lose value due to factors specific to the company itself, including deterioration of its fundamental characteristics, an occurrence of adverse events at the company, or a downturn in its business prospects.

 

Foreign Investment Risk: Foreign securities involve risks not typically associated with investing in U.S. securities. Foreign securities may be adversely affected by various factors, including currency fluctuations and social, economic or political instability.

 

Emerging Markets Risk: The risks associated with foreign investments (see “Foreign Investment Risk” above) are particularly pronounced in connection with investments in emerging markets.

 

Operational and Technology Risk: Cyber-attacks, disruptions, or failures that affect the Fund’s service providers, counterparties, market participants, or issuers of securities held by the Fund may adversely affect the Fund and its shareholders, including by causing losses for the Fund or impairing Fund operations.

 

Focused Investment Risk: Investments focused in asset classes, countries, regions, sectors, industries, or issuers that are subject to the same or similar risk factors and investments whose prices are closely correlated are subject to greater overall risk than investments that are more diversified or whose prices are not as closely correlated.

 

Management Risk: The risk that an investment technique used by the Fund’s portfolio manager may fail to produce the intended result.

 

For more information about the Fund’s risks, please see the “Additional Investment Strategies and Risks” section in this Prospectus.

 

12

 

 

 

Sterling Capital Mid Value Fund

Summary

 

 

Performance

 

The following bar chart and table provide some indication of the risks of investing in the Fund. The bar chart shows changes in the Fund’s performance from year to year for Class A Shares. The table shows how the Fund’s average annual returns for 1, 5 and 10 years compared with those of a broad measure of market performance. The Fund’s past performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. Updated performance information is available at no cost by visiting www.sterlingcapitalfunds.com or by calling 1-800-228-1872.

 

Sales charges are not reflected in the bar chart, and if those charges were included, returns would be less than those shown.

 

Class A Shares Annual Total Returns for years ended 12/31

 

 

 

Best quarter:

24.41%

12/31/2020

Worst quarter:

-32.75%

03/31/2020

 

Average Annual Total Returns as of December 31, 2022

 

 

1
Year

5
Years

10
Years

Class A Shares

     

Return Before Taxes

-17.72%

2.80%

8.59%

Return After Taxes on Distributions

-20.88%

0.39%

6.31%

Return After Taxes on Distributions and Sale of Fund Shares

-8.19%

1.87%

6.56%

       

Class C Shares

-13.35%

3.26%

8.42%

Russell Midcap® Value Index

     

(reflects no deductions for fees, expenses, or taxes)

-12.03%

5.72%

10.11%

Bloomberg US Mid Cap Value Index

     

(reflects no deductions for fees, expenses, or taxes)

-7.08%

7.02%

11.32%

 

13

 

 

 

Sterling Capital Mid Value Fund

Summary

 

 

After-tax returns are shown only for Class A Shares and are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-advantaged arrangements such as 401(k) plans or individual retirement accounts. After-tax returns for Class C Shares will vary.

 

Management

 

 

Investment Adviser

Sterling Capital Management LLC (“Sterling Capital”)

 

Portfolio Managers

Patrick W. Rau, CFA
Managing Director of Sterling Capital and Co-Portfolio Manager
Since February 2021

 

William C. Smith, CFA
Executive Director of Sterling Capital and Co-Portfolio Manager
Since August 2021
(formerly Associate Portfolio Manager from February 2021 - August 2021)

 

Lee D. Houser, CFA
Executive Director of Sterling Capital and Associate Portfolio Manager
Since February 2021

 

Purchase and Sale of Fund Shares

 

Account Type

Minimum
Initial
Investment

Minimum
Subsequent
Investment

Regular Account

$ 1,000

$ 0

Automatic Investment Plan

$ 25

$ 25

 

You may buy or sell Class A Shares and Class C Shares on any business day by contacting your financial representative or contacting the Fund (i) by mail at Sterling Capital Funds, P.O. Box 9762, Providence, RI 02940-9762 (after February 16, 2023, please address mail to Sterling Capital Funds P.O. Box 534465, Pittsburgh, PA 15253-4465); or (ii) by telephone at 1-800-228-1872. In addition, Class A Shares and Class C Shares are available for purchase at www.sterlingcapitalfunds.com.

 

Tax Information

 

The Fund normally distributes its net investment income and net realized capital gains, if any, to shareholders. These distributions are generally taxable to you as ordinary income or capital gains, unless you are investing through a tax-advantaged arrangement, such as a 401(k) plan (which may be taxable upon withdrawal) or an individual retirement account (which may be taxable upon withdrawal).

 

Payments to Broker-Dealers and Other Financial Intermediaries

 

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

 

14

 

 

 

Sterling Capital Behavioral Small Cap Value Equity Fund

 

Summary

 

 

Class A Shares SPSAX

Class C Shares SPSDX

 

 

SPSAX Class A Shares

SPSDX Class C Shares

Russell 2000® Value Index (reflects no deductions for fees, expenses, or taxes)

Bloomberg US 2000 Value Index (reflects no deductions for fees, expenses, or taxes)

Investment Objective

 

The Fund seeks maximum long-term total return, by investing primarily in equity securities of small capitalization companies.

 

Fee Table

 

This table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts or waivers if you and your family invest, or agree to invest in the future, at least $50,000 in the Sterling Capital Funds. More information about these and other sales charge discounts and waivers is available from your financial intermediary, in “Distribution Arrangements/Sales Charges” on page 158 of the Fund’s prospectus, in the Appendix: Sales Charge Discounts and Waivers Available from Certain Financial Intermediaries (the “Appendix”) and in “Sales Charges” on page 53 of the Fund’s Statement of Additional Information (“SAI”).

 

Shareholder Fees (fees paid directly from your investment)

 

 

Class A
Shares

Class C
Shares

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

5.75%

None

Maximum Deferred Sales Charge (load) (as a % of the lesser of the cost of your shares or their net asset value at the time of redemption)

None

1.00%

Redemption Fee

None

None

 

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

 

Class A
Shares

Class C
Shares

Management Fees

0.60%

0.60%

Distribution and Service (12b-1) Fees

0.25%

1.00%

Other Expenses

0.25%

0.25%

Total Annual Fund Operating Expenses

1.10%

1.85%

 

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:

 

 

1
Year

3
Years

5
Years

10
Years

Class A Shares

$681

$905

$1,146

$1,838

Class C Shares

$188

$582

$1,001

$1,973

 

15

 

 

 

Sterling Capital Behavioral Small Cap Value Equity Fund

Summary

 

 

You would pay the following expenses if you did not redeem your shares:

 

 

1
Year

3
Years

5
Years

10
Years

Class A Shares

$681

$905

$1,146

$1,838

Class C Shares

$188

$582

$1,001

$1,973

 

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 70.82% of the average value of its portfolio.

 

Strategy, Risks and Performance

 

Principal Strategy

 

To pursue its investment objective, the Fund invests, under normal circumstances, at least 80% of its net assets plus borrowings for investment purposes in the equity securities of small capitalization companies. Small capitalization companies are defined as companies with market capitalizations within the range of those companies in the Russell 2000® Index at the time of purchase. As of December 31, 2022, the smallest company in the Russell 2000® Index had a market capitalization of $6.1 million and the largest company had a market capitalization of $7.9 billion. The Fund invests primarily in U.S. traded equity securities of small capitalization companies. The term “U.S. traded equity securities” refers to domestically traded U.S. common stocks (including securities of real estate investment trusts (“REITs”) and exchange-traded funds (“ETFs”)), and U.S. traded equity stocks of foreign companies. The Fund may invest in securities of middle and large capitalization companies.

 

Sterling Capital Management LLC (“Sterling Capital”) applies “behavioral finance” principles in the construction of the Fund’s portfolio. Behavioral finance theorizes that investment decisions are often influenced by biases, heuristics (i.e., experienced-based techniques for decision making) and emotion, and that investors can be predictable (and, at times, irrational) in their decision making. These emotionally charged investment decisions can lead to stock price anomalies that create opportunities in the marketplace. Sterling Capital seeks to capitalize on these behaviorally driven market anomalies by employing a disciplined investment process. In implementing behavioral finance principles, Sterling Capital ranks companies in the Fund’s investment universe based on a number of factors that it believes can be indicators of under- or over-valuation of a security by the market, such as valuation (e.g., seeking to invest in companies that Sterling Capital believes are undervalued), price momentum (e.g., identifying securities that Sterling Capital believes will experience sustained positive price momentum) and earnings revisions (e.g., identifying and capitalizing on what Sterling Capital believes are under-reactions by the market to positive earnings revisions). Sterling Capital also takes into account such factors as market capitalization, country exposure, and sector exposure to construct a diversified portfolio. Sterling Capital considers selling a security when the security’s ranking becomes less attractive and/or in light of liquidity, sector exposure, country exposure or diversification considerations.

 

16

 

 

 

Sterling Capital Behavioral Small Cap Value Equity Fund

Summary

 

 

Principal Risks

 

All investments carry a certain amount of risk and the Fund cannot guarantee that it will achieve its investment objective. An investment in the Fund is not a deposit or obligation of any bank, is not endorsed or guaranteed by any bank and is not insured by the Federal Deposit Insurance Corporation (“FDIC”) or any other government agency. You may lose money by investing in the Fund. Below are the principal risks of investing in the Fund.

 

Market Risk: The possibility that the Fund’s stock holdings will decline in price because of a broad stock market decline. Markets generally move in cycles, with periods of rising prices followed by periods of falling prices. The value of your investment will tend to increase or decrease in response to these movements.

 

Small Capitalization Company Risk: Investing in smaller, lesser-known companies involves greater risk than investing in those that are more established. A small company’s financial well-being may, for example, depend heavily on just a few products or services. In addition, small company stocks tend to trade less frequently and in lesser quantities, and their market prices often fluctuate more, than those of larger firms.

 

Investment Style Risk: The possibility that a market segment on which this Fund focuses — small company stocks, value stocks and momentum stocks — will underperform other kinds of investments or market averages. A value stock may decrease in price or may not increase in price as anticipated by the portfolio manager if other investors fail to recognize the company’s value or the factors that the portfolio manager believes will cause the stock price to increase do not occur. A stock owned primarily for its momentum characteristics may start to underperform abruptly. In addition, the Fund’s focus on behavioral finance principles may cause the Fund to underperform funds that do not employ a behavioral finance strategy. There can be no guarantee that the factors that the Fund’s investment adviser considers in selecting stocks, and the weight that the adviser puts on each factor, will be effective in identifying and capitalizing on stock price anomalies.

 

Company-Specific Risk: The possibility that a particular stock may lose value due to factors specific to the company itself, including deterioration of its fundamental characteristics, an occurrence of adverse events at the company, or a downturn in its business prospects.

 

Mid Capitalization Company Risk: Investments in middle capitalization companies may be riskier, more volatile and more vulnerable to economic, market and industry changes than investments in larger, more established companies. As a result, share price changes may be more sudden or erratic than the prices of other equity securities, especially over the short term.

 

Real Estate-Related Investment and REIT Risk: Real estate-related investments may decline in value as a result of factors affecting the real estate industry. Risks associated with investments in securities of companies in the real estate industry include decline in the value of the underlying real estate, default, prepayment, changes in value resulting from changes in interest rates and demand for real and rental property, and the management skill and creditworthiness of REIT issuers. The Fund will indirectly bear its proportionate share of expenses, including management fees, paid by each REIT in which the Fund invests.

 

ETF Risk: The risks associated with investing in ETFs include the risks of owning the underlying securities the ETF is designed to track. Lack of liquidity in an ETF could result in the ETF being more volatile than the underlying portfolio of securities. When the Fund invests in an ETF, in addition to directly bearing expenses associated with its own operations, the Fund will bear a pro rata portion of the ETF’s expenses. As a result, it may be more costly to own an ETF than owning the underlying portfolio of securities directly.

 

17

 

 

 

 

Sterling Capital Behavioral Small Cap Value Equity Fund

Summary

 

 

Active Trading Risk: The Fund may trade securities actively, which could increase its transaction costs (thereby lowering its performance) and may increase the amount of taxes that a shareholder pays, by increasing the amount of the Fund’s realized capital gains and increasing the portion of the Fund’s realized capital gains that are short-term capital gains.

 

Operational and Technology Risk: Cyber-attacks, disruptions, or failures that affect the Fund’s service providers, counterparties, market participants, or issuers of securities held by the Fund may adversely affect the Fund and its shareholders, including by causing losses for the Fund or impairing Fund operations.

 

Focused Investment Risk: Investments focused in asset classes, countries, regions, sectors, industries, or issuers that are subject to the same or similar risk factors and investments whose prices are closely correlated are subject to greater overall risk than investments that are more diversified or whose prices are not as closely correlated.

 

Management Risk: The risk that an investment technique used by the Fund’s portfolio manager may fail to produce the intended result.

 

For more information about the Fund’s risks, please see the “Additional Investment Strategies and Risks” section in this Prospectus.

 

Performance

 

The following bar chart and table provide some indication of the risks of investing in the Fund. The bar chart shows changes in the Fund’s performance from year to year for Class A Shares. The table shows how the Fund’s average annual returns for 1, 5 and 10 years compared with those of a broad measure of market performance. The Fund’s past performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. Updated performance information is available at no cost by visiting www.sterlingcapitalfunds.com or by calling 1-800-228-1872.

 

Sales charges are not reflected in the bar chart, and if those charges were included, returns would be less than those shown.

 

18

 

 

 

Sterling Capital Behavioral Small Cap Value Equity Fund

Summary

 

 

Class A Shares Annual Total Returns for years ended 12/31

 

 

 

Best quarter:

25.10%

03/31/2021

Worst quarter:

-38.86%

03/31/2020

 

Average Annual Total Returns as of December 31, 2022

 

 

1
Year

5
Years

10
Years

Class A Shares

     

Return Before Taxes

-16.43%

2.44%

7.84%

Return After Taxes on Distributions

-18.04%

1.14%

6.48%

Return After Taxes on Distributions and Sale of Fund Shares

-8.41%

1.74%

6.04%

       

Class C Shares

-11.99%

2.88%

7.67%

Russell 2000® Value Index

     

(reflects no deductions for fees, expenses, or taxes)

-14.48%

4.13%

8.48%

Bloomberg US 2000 Value Index

     

(reflects no deductions for fees, expenses, or taxes)

-11.70%

5.19%

9.77%

 

After-tax returns are shown only for Class A Shares and are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-advantaged arrangements such as 401(k) plans or individual retirement accounts. After-tax returns for Class C Shares will vary.

 

 

19

 

 

 

Sterling Capital Behavioral Small Cap Value Equity Fund

Summary

 

 

Management

 

 

Investment Adviser

Sterling Capital Management LLC

 

Portfolio Managers

Robert W. Bridges, CFA
Senior Managing Director, CIO and Head of Equity of Sterling Capital and Co-Portfolio Manager
Since June 2013

 

Robert O. Weller, CFA
Executive Director of Sterling Capital and Co-Portfolio Manager
Since June 2013

 

Purchase and Sale of Fund Shares

 

Account Type

Minimum
Initial
Investment

Minimum
Subsequent
Investment

Regular Account

$ 1,000

$ 0

Automatic Investment Plan

$ 25

$ 25

 

You may buy or sell Class A Shares and Class C Shares on any business day by contacting your financial representative or contacting the Fund (i) by mail at Sterling Capital Funds, P.O. Box 9762, Providence, RI 02940-9762 (after February 16, 2023, please address mail to Sterling Capital Funds P.O. Box 534465, Pittsburgh, PA 15253-4465); or (ii) by telephone at 1-800-228-1872. In addition, Class A Shares and Class C Shares are available for purchase at www.sterlingcapitalfunds.com.

 

Tax Information

 

The Fund normally distributes its net investment income and net realized capital gains, if any, to shareholders. These distributions are generally taxable to you as ordinary income or capital gains, unless you are investing through a tax-advantaged arrangement, such as a 401(k) plan (which may be taxable upon withdrawal) or an individual retirement account (which may be taxable upon withdrawal).

 

Payments to Broker-Dealers and Other Financial Intermediaries

 

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

 

20

 

 

 

Sterling Capital Special Opportunities Fund

 

Summary

 

 

Class A Shares BOPAX

Class C Shares BOPCX

 

 

BOPAX Class A Shares

BOPCX Class C Shares

Russell 3000® Index (reflects no deductions for fees, expenses, or taxes)

Bloomberg US 3000 Index (reflects no deductions for fees, expenses, or taxes)

Investment Objective

 

The Fund seeks long-term capital appreciation.

 

Fee Table

 

This table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts or waivers if you and your family invest, or agree to invest in the future, at least $50,000 in the Sterling Capital Funds. More information about these and other sales charge discounts and waivers is available from your financial intermediary, in “Distribution Arrangements/Sales Charges” on page 158 of the Fund’s prospectus, in the Appendix: Sales Charge Discounts and Waivers Available from Certain Financial Intermediaries (the “Appendix”) and in “Sales Charges” on page 53 of the Fund’s Statement of Additional Information (“SAI”).

 

Shareholder Fees (fees paid directly from your investment)

 

 

Class A
Shares

Class C
Shares

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

5.75%

None

Maximum Deferred Sales Charge (load) (as a % of the lesser of the cost of your shares or their net asset value at the time of redemption)

None

1.00%

Redemption Fee

None

None

 

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

 

Class A
Shares

Class C
Shares

Management Fees

0.65%

0.65%

Distribution and Service (12b-1) Fees

0.25%

1.00%

Other Expenses

0.24%

0.24%

Total Annual Fund Operating Expenses

1.14%

1.89%

 

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:

 

 

1
Year

3
Years

5
Years

10
Years

Class A Shares

$685

$916

$1,167

$1,881

Class C Shares

$192

$594

$1,021

$2,016

 

21

 

 

 

Sterling Capital Special Opportunities Fund

Summary

 

 

You would pay the following expenses if you did not redeem your shares:

 

 

1
Year

3
Years

5
Years

10
Years

Class A Shares

$685

$916

$1,167

$1,881

Class C Shares

$192

$594

$1,021

$2,016

 

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 28.06% of the average value of its portfolio.

 

Strategy, Risks and Performance

 

Principal Strategy

 

To pursue its investment objective, the Fund will invest, under normal circumstances, at least 80% of its net assets plus borrowings for investment purposes in equity securities. The securities may include common stock, preferred stock, warrants, American Depositary Receipts (“ADRs”), or debt instruments that are convertible to common stock. The Fund invests, under normal market conditions, primarily in domestically traded U.S. common stocks and U.S. traded equity stocks of foreign companies, including ADRs. The Fund uses a multi-style approach, meaning that it not only invests across different capitalization levels but may target both value- and growth-oriented companies.

 

The portfolio manager looks for companies experiencing above-average revenue and profit growth as well as out-of-favor stocks that may be depressed due to what the portfolio manager believes to be temporary economic circumstances. In choosing individual stocks, the portfolio manager then performs a fundamental analysis to examine the valuation, growth and momentum characteristics of a particular issuer. The portfolio manager may consider environmental, social and governance (“ESG”) factors as part of the investment process.

 

The portfolio manager may consider selling a stock owned by the Fund for a variety of reasons including but not limited to: when the factors that induced the portfolio manager to buy the stock have changed, the company faces earnings growth risk or has issued substantial new debt, or to reduce the Fund’s position in a particular stock if the stock represents a disproportionately large position within the Fund’s portfolio.

 

In addition, the Fund may engage in writing covered call options on securities to generate income from premiums received in connection with the option. A call option gives the buyer the right to buy, and obligates the option seller to sell a security at a specified price. Generally, a written call option is covered if a fund owns the security or instrument underlying the call or has an absolute right to acquire that security or instrument without additional cash consideration. When the Fund writes a covered call option on a security, the Fund limits its opportunity to profit from an increase in the market price of the security above the exercise price of the option. The Fund will not write a covered call option if, as a result, the aggregate fair value of all portfolio securities covering call options exceeds 50% of the fair value of its net assets.

 

22

 

 

 

Sterling Capital Special Opportunities Fund

Summary

 

 

Principal Risks

 

All investments carry a certain amount of risk and the Fund cannot guarantee that it will achieve its investment objective. An investment in the Fund is not a deposit or obligation of any bank, is not endorsed or guaranteed by any bank and is not insured by the Federal Deposit Insurance Corporation (“FDIC”) or any other government agency. You may lose money by investing in the Fund. Below are the principal risks of investing in the Fund.

 

Market Risk: The possibility that the Fund’s stock holdings will decline in price because of a broad stock market decline. Markets generally move in cycles, with periods of rising prices followed by periods of falling prices. The value of your investment will tend to increase or decrease in response to these movements.

 

Interest Rate Risk: The possibility that the value of the Fund’s investments will decline due to an increase in interest rates. Interest rate risk is generally higher for longer-term debt instruments and lower for shorter-term debt instruments.

 

Investment Style Risk: The possibility that the market segment on which this Fund is primarily invested in, whether growth or value; large-, mid- or small-cap; could underperform other kinds of investments or market averages that include style-focused investments.

 

Small Capitalization Company Risk: Investing in smaller, lesser-known companies involves greater risk than investing in those that are more established. A small company’s financial well-being may, for example, depend heavily on just a few products or services. In addition, small company stocks tend to trade less frequently and in lesser quantities, and their market prices often fluctuate more, than those of larger firms.

 

Mid Capitalization Company Risk: Investments in middle capitalization companies may be riskier, more volatile and more vulnerable to economic, market and industry changes than investments in larger, more established companies. As a result, share price changes may be more sudden or erratic than the prices of other equity securities, especially over the short term.

 

Company-Specific Risk: The possibility that a particular stock may lose value due to factors specific to the company itself, including deterioration of its fundamental characteristics, an occurrence of adverse events at the company, or a downturn in its business prospects.

 

Foreign Investment Risk: Foreign securities involve risks not typically associated with investing in U.S. securities. Foreign securities may be adversely affected by various factors, including currency fluctuations and social, economic or political instability.

 

Counterparty Risk: The possibility that a counterparty to a contract will default or otherwise become unable to honor a financial obligation.

 

Options Risk: There are significant differences between the securities and options markets that could result in an imperfect correlation between these markets, causing an options transaction not to achieve its objectives. A decision as to whether, when and how to use options involves the exercise of skill and judgment, and even a well conceived transaction may be unsuccessful to some degree because of market behavior or unexpected events. There can be no assurance that a liquid secondary market will exist for any particular option at a particular time; as a result, it may be costly to liquidate options. There is also no assurance that a liquid market will exist for any particular option contract on an exchange.

 

23

 

 

 

 

Sterling Capital Special Opportunities Fund

Summary

 

 

Preferred Stock Risk: Preferred stock represents an interest in a company that generally entitles the holder to receive, in preference to the holders of common stock, dividends and a fixed share of the proceeds resulting from a liquidation of the company. Preferred stocks are generally subordinated in right of payment to all debt obligations and creditors of the issuer.

 

Operational and Technology Risk: Cyber-attacks, disruptions, or failures that affect the Fund’s service providers, counterparties, market participants, or issuers of securities held by the Fund may adversely affect the Fund and its shareholders, including by causing losses for the Fund or impairing Fund operations.

 

Focused Investment Risk: Investments focused in asset classes, countries, regions, sectors, industries, or issuers that are subject to the same or similar risk factors and investments whose prices are closely correlated are subject to greater overall risk than investments that are more diversified or whose prices are not as closely correlated.

 

Management Risk: The risk that an investment technique used by the Fund’s portfolio manager may fail to produce the intended result.

 

For more information about the Fund’s risks, please see the “Additional Investment Strategies and Risks” section in this Prospectus.

 

Performance

 

The following bar chart and table provide some indication of the risks of investing in the Fund. The bar chart shows changes in the Fund’s performance from year to year for Class A Shares. The table shows how the Fund’s average annual returns for 1, 5 and 10 years compared with those of a broad measure of market performance. The Fund’s past performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. Updated performance information is available at no cost by visiting www.sterlingcapitalfunds.com or by calling 1-800-228-1872.

 

Sales charges are not reflected in the bar chart, and if those charges were included, returns would be less than those shown.

 

Class A Shares Annual Total Returns for years ended 12/31

 

 

 

Best quarter:

21.42%

06/30/2020

Worst quarter:

-27.26%

03/31/2020

 

24

 

 

 

 

Sterling Capital Special Opportunities Fund

Summary

 

 

Average Annual Total Returns as of December 31, 2022

 

 

1
Year

5
Years

10
Years

Class A Shares

     

Return Before Taxes

-24.79%

5.75%

10.13%

Return After Taxes on Distributions

-26.16%

4.04%

8.21%

Return After Taxes on Distributions and Sale of Fund Shares

-13.66%

4.48%

7.97%

       

Class C Shares

-20.81%

6.21%

9.96%

Russell 3000® Index

     

(reflects no deductions for fees, expenses, or taxes)

-19.21%

8.79%

12.13%

Bloomberg US 3000 Index

     

(reflects no deductions for fees, expenses, or taxes)

-19.62%

8.75%

12.12%

 

After-tax returns are shown only for Class A Shares and are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-advantaged arrangements such as 401(k) plans or individual retirement accounts. After-tax returns for Class C Shares will vary.

 

Management

 

 

Investment Adviser

Sterling Capital Management LLC (“Sterling Capital”)

 

Portfolio Managers

Joshua L. Haggerty, CFA
Executive Director of Sterling Capital and Co-Portfolio Manager
Since July 2021
(formerly Associate Portfolio Manager from February 2016 - July 2021)

 

Daniel A. Morrall
Executive Director of Sterling Capital and Co-Portfolio Manager
Since December 2021
(formerly Associate Portfolio Manager from July 2021 - December 2021)

 

Purchase and Sale of Fund Shares

 

Account Type

Minimum
Initial
Investment

Minimum
Subsequent
Investment

Regular Account

$ 1,000

$ 0

Automatic Investment Plan

$ 25

$ 25

 

 

25

 

 

 

Sterling Capital Special Opportunities Fund

Summary

 

 

You may buy or sell Class A Shares and Class C Shares on any business day by contacting your financial representative or contacting the Fund (i) by mail at Sterling Capital Funds, P.O. Box 9762, Providence, RI 02940-9762 (after February 16, 2023, please address mail to Sterling Capital Funds P.O. Box 534465, Pittsburgh, PA 15253-4465); or (ii) by telephone at 1-800-228-1872. In addition, Class A Shares and Class C Shares are available for purchase at www.sterlingcapitalfunds.com.

 

Tax Information

 

The Fund normally distributes its net investment income and net realized capital gains, if any, to shareholders. These distributions are generally taxable to you as ordinary income or capital gains, unless you are investing through a tax-advantaged arrangement, such as a 401(k) plan (which may be taxable upon withdrawal) or an individual retirement account (which may be taxable upon withdrawal).

 

Payments to Broker-Dealers and Other Financial Intermediaries

 

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

 

26

 

 

 

Sterling Capital Equity Income Fund

 

Summary

 

 

Class A Shares BAEIX

Class C Shares BCEGX

 

 

BAEIX Class A Shares

BCEGX Class C Shares

Russell 1000® Value Index (reflects no deductions for fees, expenses, or taxes)

Bloomberg US 1000 Value Index (reflects no deductions for fees, expenses, or taxes)

Investment Objective

 

The Fund seeks capital growth and current income.

 

Fee Table

 

This table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts or waivers if you and your family invest, or agree to invest in the future, at least $50,000 in the Sterling Capital Funds. More information about these and other sales charge discounts and waivers is available from your financial intermediary, in “Distribution Arrangements/Sales Charges” on page 158 of the Fund’s prospectus, in the Appendix: Sales Charge Discounts and Waivers Available from Certain Financial Intermediaries (the “Appendix”) and in “Sales Charges” on page 53 of the Fund’s Statement of Additional Information (“SAI”).

 

Shareholder Fees (fees paid directly from your investment)

 

 

Class A
Shares

Class C
Shares

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

5.75%

None

Maximum Deferred Sales Charge (load) (as a % of the lesser of the cost of your shares or their net asset value at the time of redemption)

None

1.00%

Redemption Fee

None

None

 

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

 

Class A
Shares

Class C
Shares

Management Fees

0.55%

0.55%

Distribution and Service (12b-1) Fees

0.25%

1.00%

Other Expenses

0.24%

0.24%

Total Annual Fund Operating Expenses

1.04%

1.79%

 

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:

 

 

1
Year

3
Years

5
Years

10
Years

Class A Shares

$675

$887

$1,116

$1,773

Class C Shares

$182

$563

$970

$1,908

 

27

 

 

 

Sterling Capital Equity Income Fund

Summary

 

 

You would pay the following expenses if you did not redeem your shares:

 

 

1
Year

3
Years

5
Years

10
Years

Class A Shares

$675

$887

$1,116

$1,773

Class C Shares

$182

$563

$970

$1,908

 

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 31.23% of the average value of its portfolio.

 

Strategy, Risks and Performance

 

Principal Strategy

 

To pursue its investment objective, the Fund will invest, under normal circumstances, at least 80% of its net assets plus borrowings for investment purposes in equity securities. The Fund invests, under normal market conditions, primarily in dividend-paying equity securities, in particular common stocks of companies with a history of increasing dividends. The Fund may also invest in U.S. traded common stocks of foreign companies, including American Depositary Receipts. Because yield is a consideration in selecting securities, the Fund may purchase stocks of companies that are out of favor in the financial community and, therefore, are selling below what the portfolio manager believes to be their long-term investment value. The portfolio manager may consider environmental, social and governance (“ESG”) factors as part of the investment process. The Fund may invest in securities of issuers of any capitalization range.

 

The portfolio manager may consider selling a stock owned by the Fund when the factors that induced the portfolio manager to buy the stock have changed, the portfolio manager anticipates a negative change in the company’s dividend policy, or to reduce the Fund’s position in a particular stock if the stock represents a disproportionately large position within the Fund’s portfolio.

 

 

28

 

 

 

Sterling Capital Equity Income Fund

Summary

 

 

Principal Risks

 

All investments carry a certain amount of risk and the Fund cannot guarantee that it will achieve its investment objective. An investment in the Fund is not a deposit or obligation of any bank, is not endorsed or guaranteed by any bank and is not insured by the Federal Deposit Insurance Corporation (“FDIC”) or any other government agency. You may lose money by investing in the Fund. Below are the principal risks of investing in the Fund.

 

Market Risk: The possibility that the Fund’s stock holdings will decline in price because of a broad stock market decline. Markets generally move in cycles, with periods of rising prices followed by periods of falling prices. The value of your investment will tend to increase or decrease in response to these movements.

 

Investment Style Risk: The possibility that the market segment on which this Fund focuses — income-producing equities — will underperform other kinds of investments or market averages.

 

Company-Specific Risk: The possibility that a particular stock may lose value due to factors specific to the company itself, including deterioration of its fundamental characteristics, an occurrence of adverse events at the company, or a downturn in its business prospects.

 

Foreign Investment Risk: Foreign securities involve risks not typically associated with investing in U.S. securities. Foreign securities may be adversely affected by various factors, including currency fluctuations and social, economic or political instability.

 

Counterparty Risk: The possibility that a counterparty to a contract will default or otherwise become unable to honor a financial obligation.

 

Dividend Risk: Companies that issue dividend-yielding securities are not required to continue to pay dividends on such securities. Therefore, there is the possibility that such companies could reduce or eliminate the payment of dividends in the future.

 

Mid Capitalization Company Risk: Investments in middle capitalization companies may be riskier, more volatile and more vulnerable to economic, market and industry changes than investments in larger, more established companies. As a result, share price changes may be more sudden or erratic than the prices of other equity securities, especially over the short term.

 

Operational and Technology Risk: Cyber-attacks, disruptions, or failures that affect the Fund’s service providers, counterparties, market participants, or issuers of securities held by the Fund may adversely affect the Fund and its shareholders, including by causing losses for the Fund or impairing Fund operations.

 

Management Risk: The risk that an investment technique used by the Fund’s portfolio manager may fail to produce the intended result.

 

For more information about the Fund’s risks, please see the “Additional Investment Strategies and Risks” section in this Prospectus.

 

 

29

 

 

 

Sterling Capital Equity Income Fund

Summary

 

 

Performance

 

The following bar chart and table provide some indication of the risks of investing in the Fund. The bar chart shows changes in the Fund’s performance from year to year for Class A Shares. The table shows how the Fund’s average annual returns for 1, 5 and 10 years compared with those of a broad measure of market performance. The Fund’s past performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. Updated performance information is available at no cost by visiting www.sterlingcapitalfunds.com or by calling 1-800-228-1872.

 

Sales charges are not reflected in the bar chart, and if those charges were included, returns would be less than those shown.

 

Class A Shares Annual Total Returns for years ended 12/31

 

 

 

Best quarter:

18.92%

06/30/2020

Worst quarter:

-25.32%

03/31/2020

 

Average Annual Total Returns as of December 31, 2022

 

 

1
Year

5
Years

10
Years

Class A Shares

     

Return Before Taxes

-8.93%

9.31%

10.46%

Return After Taxes on Distributions

-10.61%

7.91%

8.98%

Return After Taxes on Distributions and Sale of Fund Shares

-4.12%

7.13%

8.21%

       

Class C Shares

-4.13%

9.79%

10.29%

Russell 1000® Value Index

     

(reflects no deductions for fees, expenses, or taxes)

-7.54%

6.67%

10.29%

Bloomberg US 1000 Value Index

     

(reflects no deductions for fees, expenses, or taxes)

-2.51%

7.58%

11.07%

 

30

 

 

 

Sterling Capital Equity Income Fund

Summary

 

 

After-tax returns are shown only for Class A Shares and are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-advantaged arrangements such as 401(k) plans or individual retirement accounts. After-tax returns for Class C Shares will vary.

 

Management

 

 

Investment Adviser

Sterling Capital Management LLC (“Sterling Capital”)

 

Portfolio Managers

Charles J. Wittmann, CFA
Executive Director of Sterling Capital and Co-Portfolio Manager
Since December 2021
(formerly Associate Portfolio Manager from July 2021 - December 2021)

 

Jeremy M. Lopez, CFA
Executive Director of Sterling Capital and Co-Portfolio Manager
Since November 2022

 

Purchase and Sale of Fund Shares

 

Account Type

Minimum
Initial
Investment

Minimum
Subsequent
Investment

Regular Account

$ 1,000

$ 0

Automatic Investment Plan

$ 25

$ 25

 

You may buy or sell Class A Shares and Class C Shares on any business day by contacting your financial representative or contacting the Fund (i) by mail at Sterling Capital Funds, P.O. Box 9762, Providence, RI 02940-9762 (after February 16, 2023, please address mail to Sterling Capital Funds P.O. Box 534465, Pittsburgh, PA 15253-4465); or (ii) by telephone at 1-800-228-1872. In addition, Class A Shares and Class C Shares are available for purchase at www.sterlingcapitalfunds.com.

 

Tax Information

 

The Fund normally distributes its net investment income and net realized capital gains, if any, to shareholders. These distributions are generally taxable to you as ordinary income or capital gains, unless you are investing through a tax-advantaged arrangement, such as a 401(k) plan (which may be taxable upon withdrawal) or an individual retirement account (which may be taxable upon withdrawal).

 

Payments to Broker-Dealers and Other Financial Intermediaries

 

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

 

31

 

 

 

Sterling Capital Behavioral International Equity Fund

 

Summary

 

 

Class A Shares SBIAX

Class C Shares SBIDX

 

 

SBIAX Class A Shares

SBIDX Class C Shares

Bloomberg Developed Markets ex North America Large & Mid Cap Index (reflects no deductions for fees, expenses, or taxes)

MSCI EAFE® Net Index (reflects no deductions for fees, expenses, or taxes)

Investment Objective

 

The Fund seeks maximum long-term total return, by investing primarily in international developed market equity securities.

 

Fee Table

 

This table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts or waivers if you and your family invest, or agree to invest in the future, at least $50,000 in the Sterling Capital Funds. More information about these and other sales charge discounts and waivers is available from your financial intermediary, in “Distribution Arrangements/Sales Charges” on page 158 of the Fund’s prospectus, in the Appendix: Sales Charge Discounts and Waivers Available from Certain Financial Intermediaries (the “Appendix”) and in “Sales Charges” on page 53 of the Fund’s Statement of Additional Information (“SAI”).

 

Shareholder Fees (fees paid directly from your investment)

 

 

Class A
Shares

Class C
Shares

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

5.75%

None

Maximum Deferred Sales Charge (load) (as a % of the lesser of the cost of your shares or their net asset value at the time of redemption)

None

1.00%

Redemption Fee

None

None

 

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

 

Class A
Shares

Class C
Shares

Management Fees

0.40%

0.40%

Distribution and Service (12b-1) Fees

0.25%

1.00%

Other Expenses

0.27%

0.27%

Total Annual Fund Operating Expenses

0.92%

1.67%

 

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:

 

 

1
Year

3
Years

5
Years

10
Years

Class A Shares

$663

$851

$1,055

$1,641

Class C Shares

$170

$526

$907

$1,777

 

 

32

 

 

 

Sterling Capital Behavioral International Equity Fund

Summary

 

 

You would pay the following expenses if you did not redeem your shares:

 

 

1
Year

3
Years

5
Years

10
Years

Class A Shares

$663

$851

$1,055

$1,641

Class C Shares

$170

$526

$907

$1,777

 

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 103.20% of the average value of its portfolio.

 

Strategy, Risks and Performance

 

Principal Strategy

 

To pursue its investment objective, the Fund will invest, under normal circumstances, at least 80% of its net assets plus borrowings for investment purposes in equity securities of foreign (non-U.S.) companies. Under normal market conditions, the Fund primarily invests in “developed market” equity securities, which encompasses markets included in the Bloomberg Developed Markets ex North America Large & Mid Cap Index and other markets with similar characteristics (e.g., sustained economic development, sufficient liquidity for listed companies and accessible markets). The Fund also may invest in securities of real estate investment trusts (“REITs”) and exchange-traded funds (“ETFs”). The Fund may invest in securities of issuers of any capitalization range.

 

Sterling Capital Management LLC (“Sterling Capital”) applies “behavioral finance” principles in the construction of the Fund’s portfolio. Behavioral finance theorizes that investment decisions are often influenced by biases, heuristics (i.e., experienced-based techniques for decision making) and emotion, and that investors can be predictable (and, at times, irrational) in their decision making. These emotionally charged investment decisions can lead to stock price anomalies that create opportunities in the marketplace. Sterling Capital seeks to capitalize on these behaviorally driven market anomalies by employing a disciplined investment process. In implementing behavioral finance principles, Sterling Capital ranks companies in the Fund’s investment universe based on a number of factors that it believes can be indicators of under- or over-valuation of a security by the market, such as valuation (e.g., seeking to invest in companies that Sterling Capital believes are undervalued), price momentum (e.g., identifying securities that Sterling Capital believes will experience sustained positive price momentum) and earnings revisions (e.g., identifying and capitalizing on what Sterling Capital believes are under-reactions by the market to positive earnings revisions). Sterling Capital also takes into account such factors as market capitalization, country exposure, and sector exposure to construct a diversified portfolio. Sterling Capital considers selling a security when the security’s ranking becomes less attractive and/or in light of liquidity, sector exposure, country exposure or diversification considerations.

 

Principal Risks

 

All investments carry a certain amount of risk and the Fund cannot guarantee that it will achieve its investment objective. An investment in the Fund is not a deposit or obligation of any bank, is not endorsed or guaranteed by any bank and is not insured by the Federal Deposit Insurance Corporation (“FDIC”) or any other government agency. You may lose money by investing in the Fund. Below are the principal risks of investing in the Fund.

 

33

 

 

 

 

Sterling Capital Behavioral International Equity Fund

Summary

 

 

Foreign Investment Risk: Foreign securities involve risks not typically associated with investing in U.S. securities. The market prices of many foreign securities fluctuate more than those of U.S. securities. Foreign securities may be adversely affected by various factors, including custody and trade settlement practices, higher transaction costs, application of non-U.S. taxes, lower liquidity and stability compared to U.S. markets, currency fluctuations and social, economic or political instability.

 

Foreign Currency Transaction Risk: Fluctuations in exchange rates can adversely affect the market value of foreign currency holdings and investments denominated in foreign currencies.

 

Market Risk: The possibility that the Fund’s stock holdings will decline in price because of a broad stock market decline. Markets generally move in cycles, with periods of rising prices followed by periods of falling prices. The value of your investment will tend to increase or decrease in response to these movements.

 

Investment Style Risk: The possibility that a market segment on which this Fund focuses — foreign stocks, value stocks and momentum stocks — will underperform other kinds of investments or market averages. In addition, the Fund’s focus on behavioral finance principles may cause the Fund to underperform funds that do not employ a behavioral finance strategy. There can be no guarantee that the factors that the Fund’s investment adviser considers in selecting stocks, and the weight that the adviser puts on each factor, will be effective in identifying and capitalizing on stock price anomalies.

 

Company-Specific Risk: The possibility that a particular stock may lose value due to factors specific to the company itself, including deterioration of its fundamental characteristics, an occurrence of adverse events at the company, or a downturn in its business prospects.

 

Real Estate-Related Investment and REIT Risk: Real estate-related investments may decline in value as a result of factors affecting the real estate industry. Risks associated with investments in securities of companies in the real estate industry include decline in the value of the underlying real estate, default, prepayment, changes in value resulting from changes in interest rates and demand for real and rental property, and the management skill and creditworthiness of REIT issuers. The Fund will indirectly bear its proportionate share of expenses, including management fees, paid by each REIT in which the Fund invests.

 

ETF Risk: The risks associated with investing in ETFs include the risks of owning the underlying securities the ETF is designed to track. Lack of liquidity in an ETF could result in the ETF being more volatile than the underlying portfolio of securities. When the Fund invests in an ETF, in addition to directly bearing expenses associated with its own operations, the Fund will bear a pro rata portion of the ETF’s expenses. As a result, it may be more costly to own an ETF than owning the underlying portfolio of securities directly.

 

Mid Capitalization Company Risk: Investments in middle capitalization companies may be riskier, more volatile and more vulnerable to economic, market and industry changes than investments in larger, more established companies. As a result, share price changes may be more sudden or erratic than the prices of other equity securities, especially over the short term.

 

Small Capitalization Company Risk: Investing in smaller, lesser-known companies involves greater risk than investing in those that are more established. A small company’s financial well-being may, for example, depend heavily on just a few products or services. In addition, small company stocks tend to trade less frequently and in lesser quantities, and their market prices fluctuate more, than those of larger firms.

 

34

 

 

 

 

Sterling Capital Behavioral International Equity Fund

Summary

 

 

Active Trading Risk: The Fund may trade securities actively, which could increase its transaction costs (thereby lowering its performance) and may increase the amount of taxes that a shareholder pays, by increasing the amount of the Fund’s realized capital gains and increasing the portion of the Fund’s realized capital gains that are short-term capital gains.

 

Operational and Technology Risk: Cyber-attacks, disruptions, or failures that affect the Fund’s service providers, counterparties, market participants, or issuers of securities held by the Fund may adversely affect the Fund and its shareholders, including by causing losses for the Fund or impairing Fund operations.

 

Focused Investment Risk: Investments focused in asset classes, countries, regions, sectors, industries, or issuers that are subject to the same or similar risk factors and investments whose prices are closely correlated are subject to greater overall risk than investments that are more diversified or whose prices are not as closely correlated.

 

Management Risk: The risk that an investment technique used by the Fund’s portfolio manager may fail to produce the intended result.

 

For more information about the Fund’s risks, please see the “Additional Investment Strategies and Risks” section in this Prospectus.

 

Performance

 

The following bar chart and table provide some indication of the risks of investing in the Fund. The bar chart shows the annual total return for the Fund. The table shows how the Fund’s average annual returns for 1 and 5 years and since the Fund’s inception compared with those of a broad measure of market performance. The Fund’s past performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. Updated performance information is available at no cost by visiting www.sterlingcapitalfunds.com or by calling 1-800-228-1872.

 

Sales charges are not reflected in the bar chart, and if those charges were included, returns would be less than those shown.

 

Class A Shares Annual Total Returns for years ended 12/31

 

 

 

Best quarter:

19.90%

12/31/2022

Worst quarter:

-29.62%

03/31/2020

 

35

 

 

 

 

Sterling Capital Behavioral International Equity Fund

Summary

 

 

Average Annual Total Returns as of December 31, 2022

 

 

1
Year

5
Years

Since
Inception

Class A Shares

   

(11/28/14)

Return Before Taxes

-15.66%

-4.16%

0.27%

Return After Taxes on Distributions

-16.01%

-4.90%

-0.43%

Return After Taxes on Distributions and Sale of Fund Shares

-8.64%

-2.95%

0.31%

     

(11/28/14)

Class C Shares

-11.18%

-3.73%

0.26%

Bloomberg Developed Markets ex North America Large & Mid Cap Index(1)

   

(11/30/14)

(reflects no deductions for fees, expenses, or taxes)

-13.84%

2.08%

3.86%

MSCI EAFE® Net Index

   

(11/30/14)

(reflects no deductions for fees, expenses, or taxes)

-14.45%

1.54%

3.35%

 

(1)

Effective February 1, 2023, the primary benchmark for the Fund changed from the MSCI EAFE® Net Index to the Bloomberg Developed Markets ex North America Large & Mid Cap Index (the “New Benchmark”), as the New Benchmark was determined to be a more appropriate broad-based index for comparison purposes.

Effective February 1, 2023, the primary benchmark for the Fund changed from the MSCI EAFE® Net Index to the Bloomberg Developed Markets ex North America Large & Mid Cap Index (the “New Benchmark”), as the New Benchmark was determined to be a more appropriate broad-based index for comparison purposes.

 

After-tax returns are shown only for Class A Shares and are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-advantaged arrangements such as 401(k) plans or individual retirement accounts. After-tax returns for Class C Shares will vary.

 

Management

 

 

Investment Adviser

 

Sterling Capital Management LLC

 

Portfolio Managers

Robert W. Bridges, CFA
Senior Managing Director, CIO and Head of Equity of Sterling Capital and Co-Portfolio Manager
Since inception

 

Robert O. Weller, CFA
Executive Director of Sterling Capital and Co-Portfolio Manager
Since inception

 

Purchase and Sale of Fund Shares

 

Account Type

Minimum
Initial
Investment

Minimum
Subsequent
Investment

Regular Account

$ 1,000

$ 0

Automatic Investment Plan

$ 25

$ 25

 

36

 

 

 

Sterling Capital Behavioral International Equity Fund

Summary

 

 

You may buy or sell Class A Shares and Class C Shares on any business day by contacting your financial representative or contacting the Fund (i) by mail at Sterling Capital Funds, P.O. Box 9762, Providence, RI 02940-9762 (after February 16, 2023, please address mail to Sterling Capital Funds P.O. Box 534465, Pittsburgh, PA 15253-4465); or (ii) by telephone at 1-800-228-1872. In addition, Class A Shares and Class C Shares are available for purchase at www.sterlingcapitalfunds.com.

 

Tax Information

 

The Fund normally distributes its net investment income and net realized capital gains, if any, to shareholders. These distributions are generally taxable to you as ordinary income or capital gains, unless you are investing through a tax-advantaged arrangement, such as a 401(k) plan (which may be taxable upon withdrawal) or an individual retirement account (which may be taxable upon withdrawal).

 

Payments to Broker-Dealers and Other Financial Intermediaries

 

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

 

37

 

 

 

Sterling Capital Mid Cap Relative Value Fund

 

Summary

 

 

Class A Shares STRLX

Class C Shares STRNX

 

 

STRLX Class A Shares

STRNX Class C Shares

Russell Midcap® Value Index (reflects no deductions for fees, expenses, or taxes)

Bloomberg US Mid Cap Value Index (reflects no deductions for fees, expenses, or taxes)

Investment Objective

 

The Fund seeks long-term capital appreciation.

 

Fee Table

 

This table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts or waivers if you and your family invest, or agree to invest in the future, at least $50,000 in the Sterling Capital Funds. More information about these and other sales charge discounts and waivers is available from your financial intermediary, in “Distribution Arrangements/Sales Charges” on page 158 of the Fund’s prospectus, in the Appendix: Sales Charge Discounts and Waivers Available from Certain Financial Intermediaries (the “Appendix”) and in “Sales Charges” on page 53 of the Fund’s Statement of Additional Information (“SAI”).

 

Shareholder Fees (fees paid directly from your investment)

 

 

Class A
Shares

Class C
Shares

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

5.75%

None

Maximum Deferred Sales Charge (load) (as a % of the lesser of the cost of your shares or their net asset value at the time of redemption)

None

1.00%

Redemption Fee

None

None

 

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

 

Class A
Shares

Class C
Shares

Management Fees

0.60%

0.60%

Distribution and Service (12b-1) Fees

0.25%

1.00%

Other Expenses

0.24%

0.24%

Total Annual Fund Operating Expenses

1.09%

1.84%

 

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:

 

 

1
Year

3
Years

5
Years

10
Years

Class A Shares

$680

$902

$1,141

$1,827

Class C Shares

$187

$579

$995

$1,962

 

38

 

 

 

Sterling Capital Mid Cap Relative Value Fund

Summary

 

 

You would pay the following expenses if you did not redeem your shares:

 

 

1
Year

3
Years

5
Years

10
Years

Class A Shares

$680

$902

$1,141

$1,827

Class C Shares

$187

$579

$995

$1,962

 

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 7.94% of the average value of its portfolio.

 

Strategy, Risks and Performance

 

Principal Strategy

 

To pursue its investment objective, the Fund will invest, under normal circumstances, at least 80% of its net assets in a diversified portfolio of common stock and securities convertible into common stock of mid capitalization (“mid cap”) companies. Mid cap stocks are defined as those companies with public stock market capitalizations within the range of the market capitalization of companies constituting the Russell Midcap® Index at the time of investment. As of December 31, 2022, the capitalization range of the Russell Midcap® Index was between $306 million and $53 billion. The market capitalization of the companies in the Fund’s portfolio and the Russell Midcap® Index changes over time; the Fund will not automatically sell or cease to purchase stock of a company it already owns solely because the company’s market capitalization grows or falls outside these ranges. The Fund may also invest in real estate investment trusts (“REITs”), including mortgage REITs, and other real estate-related securities.

 

Sterling Capital Management LLC (“Sterling Capital”) believes that undervalued companies with good earnings prospects have superior appreciation potential with reasonable levels of risk. Quantitatively, Sterling Capital focuses on a stock’s fundamental valuation relative to its peers. Sterling Capital considers additional quantitative measures, such as earnings momentum and relative price strength. Qualitatively, Sterling Capital seeks to identify business catalysts which will serve to drive future earnings growth, increase investor interest and expand valuation.

 

Principal Risks

 

All investments carry a certain amount of risk and the Fund cannot guarantee that it will achieve its investment objective. An investment in the Fund is not a deposit or obligation of any bank, is not endorsed or guaranteed by any bank and is not insured by the Federal Deposit Insurance Corporation (“FDIC”) or any other government agency. You may lose money by investing in the Fund. Below are the principal risks of investing in the Fund.

 

Market Risk: The possibility that the Fund’s stock holdings will decline in price because of a broad stock market decline. Markets generally move in cycles, with periods of rising prices followed by periods of falling prices. The value of your investment will tend to increase or decrease in response to these movements.

 

Mid Capitalization Company Risk: Investments in middle capitalization companies may be riskier, more volatile and more vulnerable to economic, market and industry changes than investments in larger, more established companies. As a result, share price changes may be more sudden or erratic than the prices of other equity securities, especially over the short term.

 

39

 

 

 

 

Sterling Capital Mid Cap Relative Value Fund

Summary

 

 

Real Estate-Related Investment and REIT Risk: Real estate-related investments may decline in value as a result of factors affecting the real estate industry. Risks associated with investments in securities of companies in the real estate industry include decline in the value of the underlying real estate, default, prepayment, changes in value resulting from changes in interest rates and demand for real and rental property, and the management skill and creditworthiness of REIT issuers. The Fund will indirectly bear its proportionate share of expenses, including management fees, paid by each REIT in which the Fund invests.

 

Convertible Securities Risk: Convertible securities are securities that may be converted or exchanged into shares of an underlying stock or other asset at a stated exchange ratio or predetermined price. The market value of convertible securities tends to decline as interest rates increase and may be affected by changes in the price of the underlying security.

 

Investment Style Risk: The possibility that the market segment on which this Fund focuses — mid cap value stocks — will underperform other kinds of investments or market averages. A value stock may decrease in price or may not increase in price as anticipated by the portfolio manager if other investors fail to recognize the company’s value or the factors that the portfolio manager believes will cause the stock price to increase do not occur.

 

Company-Specific Risk: The possibility that a particular stock may lose value due to factors specific to the company itself, including deterioration of its fundamental characteristics, an occurrence of adverse events at the company, or a downturn in its business prospects.

 

Operational and Technology Risk: Cyber-attacks, disruptions, or failures that affect the Fund’s service providers, counterparties, market participants, or issuers of securities held by the Fund may adversely affect the Fund and its shareholders, including by causing losses for the Fund or impairing Fund operations.

 

Focused Investment Risk: Investments focused in asset classes, countries, regions, sectors, industries, or issuers that are subject to the same or similar risk factors and investments whose prices are closely correlated are subject to greater overall risk than investments that are more diversified or whose prices are not as closely correlated.

 

Management Risk: The risk that an investment technique used by the Fund’s portfolio manager may fail to produce the intended result.

 

For more information about the Fund’s risks, please see the “Additional Investment Strategies and Risks” section in this Prospectus.

 

40

 

 

 

Sterling Capital Mid Cap Relative Value Fund

Summary

 

 

Performance

 

The following bar chart and table provide some indication of the risks of investing in the Fund. The bar chart shows changes in the Fund’s performance from year to year. The table shows how the Fund’s average annual returns for 1, 5 and 10 years compared with those of two broad measures of market performance. The Fund’s past performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. Updated performance information is available at no cost by visiting www.sterlingcapitalfunds.com or by calling 1-800-228-1872.

 

Sales charges are not reflected in the bar chart, and if those charges were included, returns would be less than those shown.

 

Class A Shares Annual Total Returns for years ended 12/31(1)

 

 

 

Best quarter:

18.29%

12/31/2020

Worst quarter:

-29.13%

03/31/2020

 

Average Annual Total Returns as of December 31, 2022

 

 

1
Year

5
Years

10
Years

Class A Shares(1)

     

Return Before Taxes

-16.28%

3.36%

8.79%

Return After Taxes on Distributions

-19.28%

1.64%

7.68%

Return After Taxes on Distributions and Sale of Fund Shares

-7.45%

2.53%

7.11%

       

Class C Shares(1)

-11.74%

3.89%

8.90%

Russell Midcap® Value Index

     

(reflects no deductions for fees, expenses, or taxes)

-12.03%

5.72%

10.11%

Bloomberg US Mid Cap Value Index

     

(reflects no deductions for fees, expenses, or taxes)

-7.08%

7.02%

11.32%

 

(1) Performance for Class A Shares and Class C Shares for periods prior to inception on November 16, 2015 is based on the performance of the shares of the Fund’s predecessor, the Stratton Mid Cap Value Fund (the “Predecessor Fund”), which transferred all of its assets and liabilities to the Fund pursuant to a reorganization.

 

41

 

 

 

Sterling Capital Mid Cap Relative Value Fund

Summary

 

 

After-tax returns are shown only for Class A Shares and are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-advantaged arrangements such as 401(k) plans or individual retirement accounts. After-tax returns for Class C Shares will vary.

 

Management

 

 

Investment Adviser

Sterling Capital Management LLC

 

Portfolio Managers

Shawn M. Gallagher, CFA
Executive Director of Sterling Capital and Co-Portfolio Manager
Since November 2015

 

Andrew T. DiZio, CFA
Executive Director of Sterling Capital and Co-Portfolio Manager
Since August 2021
(formerly Associate Portfolio Manager from November 2015 - August 2021)

 

Purchase and Sale of Fund Shares

 

Account Type

Minimum
Initial
Investment

Minimum
Subsequent
Investment

Regular Account

$ 1,000

$ 0

Automatic Investment Plan

$ 25

$ 25

 

You may buy or sell Class A Shares and Class C Shares on any business day by contacting your financial representative or contacting the Fund (i) by mail at Sterling Capital Funds, P.O. Box 9762, Providence, RI 02940-9762 (after February 16, 2023, please address mail to Sterling Capital Funds P.O. Box 534465, Pittsburgh, PA 15253-4465); or (ii) by telephone at 1-800-228-1872. In addition, Class A Shares and Class C Shares are available for purchase at www.sterlingcapitalfunds.com.

 

Tax Information

 

The Fund normally distributes its net investment income and net realized capital gains, if any, to shareholders. These distributions are generally taxable to you as ordinary income or capital gains, unless you are investing through a tax-advantaged arrangement, such as a 401(k) plan (which may be taxable upon withdrawal) or an individual retirement account (which may be taxable upon withdrawal).

 

Payments to Broker-Dealers and Other Financial Intermediaries

 

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

 

42

 

 

 

Sterling Capital Real Estate Fund

 

Summary

 

 

Class A Shares STMMX

Class C Shares STMOX

 

 

STMMX Class A Shares

STMOX Class C Shares

FTSE NAREIT All Equity REITs Index (reflects no deductions for fees, expenses, or taxes)

S&P 500® Index (reflects no deductions for fees, expenses, or taxes)

Bloomberg US 3000 REIT Index (reflects no deductions for fees, expenses, or taxes)

Investment Objective

 

The Fund seeks total return through investment in real estate securities.

 

Fee Table

 

This table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts or waivers if you and your family invest, or agree to invest in the future, at least $50,000 in the Sterling Capital Funds. More information about these and other sales charge discounts and waivers is available from your financial intermediary, in “Distribution Arrangements/Sales Charges” on page 158 of the Fund’s prospectus, in the Appendix: Sales Charge Discounts and Waivers Available from Certain Financial Intermediaries (the “Appendix”) and in “Sales Charges” on page 53 of the Fund’s Statement of Additional Information (“SAI”).

 

Shareholder Fees (fees paid directly from your investment)

 

 

Class A
Shares

Class C
Shares

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

5.75%

None

Maximum Deferred Sales Charge (load) (as a % of the lesser of the cost of your shares or their net asset value at the time of redemption)

None

1.00%

Redemption Fee

None

None

 

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)

 

 

Class A
Shares

Class C
Shares

Management Fees

0.58%

0.58%

Distribution and Service (12b-1) Fees

0.25%

1.00%

Other Expenses

0.25%

0.25%

Total Annual Fund Operating Expenses

1.08%

1.83%

 

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:

 

 

1
Year

3
Years

5
Years

10
Years

Class A Shares

$679

$899

$1,136

$1,816

Class C Shares

$186

$576

$990

$1,951

 

43

 

 

 

Sterling Capital Real Estate Fund

Summary

 

 

You would pay the following expenses if you did not redeem your shares:

 

 

1
Year

3
Years

5
Years

10
Years

Class A Shares

$679

$899

$1,136

$1,816

Class C Shares

$186

$576

$990

$1,951

 

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 12.58% of the average value of its portfolio.

 

Strategy, Risks and Performance

 

Principal Strategy

 

To pursue its investment objective, the Fund will invest, under normal circumstances, at least 80% of its net assets in securities of real estate and real estate-related companies, or in companies which own significant real estate assets at the time of purchase (“real estate companies”) including real estate investment trusts (“REITs”). A real estate company derives at least 50% of its revenue from the ownership, construction, financing, management or sale of commercial, industrial, or residential real estate, or has at least 50% of its assets in such real estate. REITs are companies that own interests in real estate or in real estate related loans or other interests, and their revenue primarily consists of rent derived from owned, income producing real estate properties and capital gains from the sale of such properties. The Fund will invest more than 25% of its assets in REITs, including mortgage REITs and other real estate-related securities. The Fund may invest in equity securities including, without limitation, preferred stocks, convertible securities, limited liability companies and similar enterprises. The Fund may also invest in securities of foreign issuers which meet the same criteria for investment as domestic companies, or sponsored and unsponsored depositary receipts for such securities. In pursuing total return, the Fund will emphasize both capital appreciation and current income.

 

Principal Risks

 

All investments carry a certain amount of risk and the Fund cannot guarantee that it will achieve its investment objective. An investment in the Fund is not a deposit or obligation of any bank, is not endorsed or guaranteed by any bank and is not insured by the Federal Deposit Insurance Corporation (“FDIC”) or any other government agency. You may lose money by investing in the Fund. Below are the principal risks of investing in the Fund.

 

Market Risk: The possibility that the Fund’s stock holdings will decline in price because of a broad stock market decline. Markets generally move in cycles, with periods of rising prices followed by periods of falling prices. The value of your investment will tend to increase or decrease in response to these movements.

 

Concentration Risk: The risk that the Fund’s concentration in REITs and other real estate-related securities may produce a greater risk of loss than a more diversified mutual fund.

 

44

 

 

 

 

Sterling Capital Real Estate Fund

Summary

 

 

Real Estate-Related Investment and REIT Risk: Real estate-related investments may decline in value as a result of factors affecting the real estate industry. Risks associated with investments in securities of companies in the real estate industry include decline in the value of the underlying real estate, default, prepayment, changes in value resulting from changes in interest rates and demand for real and rental property, and the management skill and creditworthiness of REIT issuers. The Fund will indirectly bear its proportionate share of expenses, including management fees, paid by each REIT in which the Fund invests.

 

Small Capitalization Company Risk: Investing in smaller, lesser-known companies involves greater risk than investing in those that are more established. A small company’s financial well-being may, for example, depend heavily on just a few products or services. In addition, small company stocks tend to trade less frequently and in lesser quantities, and their market prices often fluctuate more, than those of larger firms.

 

Foreign Investment Risk: Foreign securities involve risks not typically associated with investing in U.S. securities. Foreign securities may be adversely affected by various factors, including currency fluctuations and social, economic or political instability.

 

Convertible Securities Risk: Convertible securities are securities that may be converted or exchanged into shares of an underlying stock or other asset at a stated exchange ratio or predetermined price. The market value of convertible securities tends to decline as interest rates increase and may be affected by changes in the price of the underlying security.

 

Company-Specific Risk: The possibility that a particular stock may lose value due to factors specific to the company itself, including deterioration of its fundamental characteristics, an occurrence of adverse events at the company, or a downturn in its business prospects.

 

Operational and Technology Risk: Cyber-attacks, disruptions, or failures that affect the Fund’s service providers, counterparties, market participants, or issuers of securities held by the Fund may adversely affect the Fund and its shareholders, including by causing losses for the Fund or impairing Fund operations.

 

Focused Investment Risk: Investments focused in asset classes, countries, regions, sectors, industries, or issuers that are subject to the same or similar risk factors and investments whose prices are closely correlated are subject to greater overall risk than investments that are more diversified or whose prices are not as closely correlated.

 

Management Risk: The risk that an investment technique used by the Fund’s portfolio manager may fail to produce the intended result.

 

For more information about the Fund’s risks, please see the “Additional Investment Strategies and Risks” section in this Prospectus.

 

Performance

 

The following bar chart and table provide some indication of the risks of investing in the Fund. The bar chart shows changes in the Fund’s performance from year to year. The table shows how the Fund’s average annual returns for 1, 5 and 10 years compared with those of two broad measures of market performance. The Fund’s past performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. Updated performance information is available at no cost by visiting www.sterlingcapitalfunds.com or by calling 1-800-228-1872.

 

Sales charges are not reflected in the bar chart, and if those charges were included, returns would be less than those shown.

 

45

 

 

 

Sterling Capital Real Estate Fund

Summary

 

 

Class A Shares Annual Total Returns for years ended 12/31(1)

 

 

 

Best quarter:

15.72%

03/31/2019

Worst quarter:

-20.97%

03/31/2020

 

Average Annual Total Returns as of December 31, 2022

 

 

1
Year

5
Years

10
Years

Class A Shares(1)

     

Return Before Taxes

-30.57%

3.13%

6.32%

Return After Taxes on Distributions

-31.92%

1.45%

4.66%

Return After Taxes on Distributions and Sale of Fund Shares

-17.34%

2.17%

4.63%

       

Class C Shares(1)

-26.88%

3.59%

6.39%

FTSE NAREIT All Equity REITs Index(2)

     

(reflects no deductions for fees, expenses, or taxes)

-24.95%

4.43%

7.10%

S&P 500® Index

     

(reflects no deductions for fees, expenses, or taxes)

-18.11%

9.42%

12.56%

Bloomberg US 3000 REIT Index

     

(reflects no deductions for fees, expenses, or taxes)

-25.08%

4.45%

 

 

(1) Performance for Class A Shares and Class C Shares for periods prior to inception on November 16, 2015 is based on the performance of the shares of the Fund’s predecessor, the Stratton Real Estate Fund (the “Predecessor Fund”), which transferred all of its assets and liabilities to the Fund pursuant to a reorganization.

 

(2) Returns for the FTSE Nareit All Equity REITs Index are included to show how the Fund’s performance compared with the returns of all publicly traded REITs that invest predominantly in the equity ownership of real estate and the index is designed to reflect the performance of all publicly traded equity REITs as a whole.

 

46

 

 

 

Sterling Capital Real Estate Fund

Summary

 

 

After-tax returns are shown only for Class A Shares and are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-advantaged arrangements such as 401(k) plans or individual retirement accounts. After-tax returns for Class C Shares will vary.

 

Management

 

 

Investment Adviser

Sterling Capital Management LLC (“Sterling Capital”)

 

Portfolio Managers

Andrew T. DiZio, CFA
Executive Director of Sterling Capital and Co-Portfolio Manager
Since November 2015

 

Shawn M. Gallagher, CFA
Executive Director of Sterling Capital and Co-Portfolio Manager
Since August 2021
(formerly Associate Portfolio Manager from November 2015 - August 2021)

 

Purchase and Sale of Fund Shares

 

Account Type

Minimum
Initial
Investment

Minimum
Subsequent
Investment

Regular Account

$ 1,000

$ 0

Automatic Investment Plan

$ 25

$ 25

 

You may buy or sell Class A Shares and Class C Shares on any business day by contacting your financial representative or contacting the Fund (i) by mail at Sterling Capital Funds, P.O. Box 9762, Providence, RI 02940-9762 (after February 16, 2023, please address mail to Sterling Capital Funds P.O. Box 534465, Pittsburgh, PA 15253-4465); or (ii) by telephone at 1-800-228-1872. In addition, Class A Shares and Class C Shares are available for purchase at www.sterlingcapitalfunds.com.

 

Tax Information

 

The Fund normally distributes its net investment income and net realized capital gains, if any, to shareholders. These distributions are generally taxable to you as ordinary income or capital gains, unless you are investing through a tax-advantaged arrangement, such as a 401(k) plan (which may be taxable upon withdrawal) or an individual retirement account (which may be taxable upon withdrawal).

 

Payments to Broker-Dealers and Other Financial Intermediaries

 

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

 

47

 

 

 

Sterling Capital Small Cap Value Fund

 

Summary

 

 

Class A Shares STSNX

Class C Shares STSOX

 

 

STSNX Class A Shares

STSOX Class C Shares

Russell 2000® Value Index (reflects no deductions for fees, expenses, or taxes)

Bloomberg US 2000 Value Index (reflects no deductions for fees, expenses, or taxes)

Investment Objective

 </