Summary Prospectus
July 31, 2013
ING GNMA Income Fund
|
Class
/ Ticker
|
A/
LEXNX;
B/
LEXBX;
C/
LEGNX;
I/
LEINX;
W/
IGMWX
|
Before you invest, you may want to review the Fund’s Prospectus, which contains more information about the Fund and its risks.
For free paper or electronic copies of the Prospectus and other Fund information (including the Statement of Additional Information and most recent financial report to shareholders), go to www.INGFunds.com/literature; email a request to
Literature_request@INGFunds.com; call 1-800-992-0180; or ask your salesperson, financial intermediary, or retirement plan administrator. The Fund’s Prospectus and Statement of Additional Information, each dated July 31, 2013, and the audited
financial statements on pages 16-45 of the Fund’s shareholder report dated March 31, 2013 are incorporated into this Summary Prospectus by reference and may be obtained free of charge at the website, phone number, or e-mail address noted
above.
INVESTMENT OBJECTIVE
The Fund seeks a high level of current income consistent with liquidity and safety of principal through investment primarily in
Government National Mortgage Association (“GNMA”) mortgage-backed securities (also known as GNMA Certificates) that are guaranteed as to the timely payment of principal and interest by the U.S. government.
FEES AND EXPENSES OF THE FUND
These tables describe the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge
discounts if you and your family invest, or agree to invest in the future, at least $100,000 in ING Funds. More information about these and other discounts is available from your financial professional and in the discussion in the Sales Charges
section of the Prospectus (page 45) or the Statement of Additional Information (page 157).
Shareholder Fees
Fees paid directly from your investment
|
|
|
Class
|
Maximum sales charge (load) as a % of offering price
|
Maximum deferred sales charge as a % of purchase or sales price, whichever is less
|
|
A
|
2.50
|
None
1
|
|
B
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None
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5.00
|
|
C
|
None
|
1.00
|
|
I
|
None
|
None
|
|
W
|
None
|
None
|
Annual Fund Operating Expenses
Expenses you pay each year as a % of the value of your investment
|
|
|
Class
|
|
A
|
B
|
C
|
I
|
W
|
|
Management Fees
|
%
|
0.47
|
0.47
|
0.47
|
0.47
|
0.47
|
|
Distribution and/or Shareholder Services (12b-1) Fees
|
%
|
0.25
|
1.00
|
1.00
|
None
|
None
|
|
Administrative Services Fees
|
%
|
0.10
|
0.10
|
0.10
|
0.10
|
0.10
|
|
Other Expenses
|
%
|
0.08
|
0.08
|
0.08
|
0.06
|
0.08
|
|
Total Annual Fund Operating Expenses
|
%
|
0.90
|
1.65
|
1.65
|
0.63
|
0.65
|
|
Waivers and Reimbursements
2
|
%
|
None
|
None
|
None
|
None
|
None
|
|
Total Annual Fund Operating Expenses after Waivers and Reimbursements
|
%
|
0.90
|
1.65
|
1.65
|
0.63
|
0.65
|
|
1
|
A contingent deferred sales charge of 1.00% is assessed on certain redemptions of Class A shares made within 18 months after purchase where no initial sales charge was paid at the time of purchase as part
of an investment of $1 million or more.
|
|
2
|
The adviser is contractually obligated to limit expenses to 0.97%, 1.72%, 1.72%, 0.67%, and 0.72% for Class A, Class B, Class C, Class I, and Class W shares, respectively, through August 1, 2014; the
obligation does not extend to interest, taxes, brokerage commissions, extraordinary expenses, and Acquired Fund Fees and Expenses. The obligation will automatically renew for one-year terms unless it is terminated by the Fund or the adviser upon
written notice within 90 days of the end of the current term or upon termination of the management agreement and is subject to possible recoupment by the adviser within three years.
|
The Examples are intended to help you compare the cost of investing in shares of the Fund with the costs of investing in other mutual funds. The Examples assume that you invest $10,000 in the Fund for the time periods indicated. The Examples
show costs if you sold (redeemed) your shares at the end of the period or continued to hold them. The Examples also assume that your investment had 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:
|
Class
|
Share Status
|
|
1 Yr
|
3 Yrs
|
5 Yrs
|
10 Yrs
|
|
A
|
Sold or Held
|
$
|
340
|
530
|
736
|
1,330
|
|
B
|
Sold
|
$
|
668
|
820
|
1,097
|
1,754
|
|
|
Held
|
$
|
168
|
520
|
897
|
1,754
|
|
C
|
Sold
|
$
|
268
|
520
|
897
|
1,955
|
|
|
Held
|
$
|
168
|
520
|
897
|
1,955
|
|
I
|
Sold or Held
|
$
|
64
|
202
|
351
|
786
|
|
W
|
Sold or Held
|
$
|
66
|
208
|
362
|
810
|
|
|
1 of 4
|
The Examples reflect applicable
expense limitation agreements and/or waivers in effect, if any, for the one-year period and the first year of the three-, five-, and ten-year periods.
|
Portfolio Turnover
% of average value of portfolio
|
|
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 transactions costs and may mean higher taxes if you are
investing in a taxable account. These costs, which are not reflected in Annual Fund Operating Expenses or in the Expense Examples, affect the Fund’s performance.
During the most recent fiscal year, the Fund’s portfolio turnover rate was 352% of the average value of its portfolio.
PRINCIPAL INVESTMENT STRATEGIES
Under normal market conditions, the Fund invests at least 80% of its net assets (plus borrowings for investment purposes) in GNMA
Certificates. The Fund will provide shareholders with at least 60 days’ prior notice of any change in this investment policy. The Fund may purchase or sell GNMA certificates on a delayed delivery or forward commitment basis through the
“to-be-announced” (“TBA”) market. With TBA transactions, the particular securities to be delivered are not identified at the trade date but the delivered securities must meet specified terms and standards. The remaining
assets of the Fund will be invested in other securities issued or guaranteed by the U.S. government, including U.S. Treasury securities, and securities issued by other agencies and instrumentalities of the U.S. government. The Fund may also invest
in repurchase agreements secured by securities issued or guaranteed by the U.S. government, GNMA Certificates, and securities issued by other agencies and instrumentalities of the U.S. government.
The Fund may invest in debt securities of any maturity, although the sub-adviser (“Sub-Adviser”) expects to invest in
securities with effective maturities in excess of one year.
Please refer to the Statement of Additional
Information for a complete description of GNMA Certificates and Modified Pass Through GNMA Certificates. The Fund intends to use the proceeds from principal payments to purchase additional GNMA Certificates or other U.S. government guaranteed
securities.
The Fund may invest in futures, including U.S. Treasury futures, to manage the duration of the Fund.
Duration is the most commonly used measure of risk in fixed-income investment as it incorporates multiple features of the fixed-income instrument (
e.g
., yield, coupon, maturity, etc.) into one number. Duration is a measure of sensitivity
of the price of a fixed-income instrument to a change in interest rates. Duration is a weighted average of the times that interest payments and the final return of principal are received. The weights are the amounts of the payments discounted by the
yield-to-maturity of the fixed-income instrument. Duration is expressed as a number of years. The bigger the duration number, the greater the interest-rate risk or reward for the fixed-income instrument prices. For example, the price of a bond with
an average duration of five years would be expected to fall approximately 5% if interest rates rose by one percentage point. Conversely, the price of a bond with an average duration of five years would be expected to rise approximately 5% if
interest rates drop by one percentage point.
The Fund may invest in other investment companies, including
exchange-traded funds, to the extent permitted under the Investment Company Act of 1940, as amended, and the rules, regulations, and exemptive orders thereunder (“1940 Act”).
The Sub-Adviser may sell securities for a variety of reasons, such as to secure gains, limit losses, or redeploy assets into
opportunities believed to be more promising, among others.
The Fund may lend portfolio securities on a short-term
or long-term basis, up to 33
1
/
3
% of its total assets.
PRINCIPAL RISKS
You could lose money on an investment in the Fund. Any of the following risks, among others, could affect Fund performance or cause the
Fund to lose money or to underperform market averages of other funds.
Credit
Prices of bonds and other debt instruments can fall if the issuer’s actual or perceived financial health deteriorates, whether
because of broad economic or issuer-specific reasons. In certain cases, the issuer could be late in paying interest or principal, or could fail to pay altogether.
Derivative Instruments
Derivative instruments are subject to a number of risks, including the risk of changes in the market price of the underlying securities, credit risk with respect to the counterparty, risk of loss due to changes in interest rates and
liquidity risk. The use of certain derivatives may also have a leveraging effect which may increase the volatility of the Fund and reduce its returns. Derivatives may not perform as expected, so the Fund may not realize the intended benefits. When
used for hedging, the change in value of a derivative may not correlate as expected with the currency, security or other risk being hedged. In addition, given their complexity, derivatives expose the Fund to the risk of improper
valuation.
Interest Rate
With bonds and other fixed rate debt instruments, a rise in interest rates generally causes values to fall; conversely, values generally
rise as interest rates fall. The higher the credit quality of the instrument, and the longer its maturity or duration, the more sensitive it is likely to be to interest rate risk. In the case of inverse securities, the interest rate generally will
decrease when the market rate of interest to which the inverse security is indexed decreases. As of the date of this Prospectus, interest rates in the United States are at or near historic lows, which may increase the Fund’s exposure to risks
associated with rising interest rates.
Liquidity
If a security is illiquid, the Fund might be unable to sell the security at a time when the Fund’s manager might wish to sell, and
the security could have the effect of decreasing the overall level of the Fund’s liquidity. Further, the lack of an established secondary market may make it more difficult to value illiquid securities, which could vary from the amount the Fund
could realize upon disposition. The Fund may make investments that
|
Summary Prospectus
|
2 of 4
|
ING GNMA Income Fund
|
become less liquid in response to market
developments or adverse investor perception. The Fund could lose money if it cannot sell a security at the time and price that would be most beneficial to the Fund.
Mortgage- and/or Asset-Backed Securities
Defaults on or the low credit quality or liquidity of the underlying assets of the asset-backed (including mortgage-backed) securities held by the
Fund may impair the value of the securities. There may be limitations on the enforceability of any security interest granted with respect to those underlying assets. These securities also present a higher degree of prepayment and extension risk and
interest rate risk than do other types of fixed-income securities.
Other Investment Companies
The main risk of investing in other investment companies, including exchange-traded funds, is the risk that the value of the securities
underlying an investment company might decrease. Because the Fund may invest in other investment companies, you will pay a proportionate share of the expenses of those other investment companies (including management fees, administration fees, and
custodial fees) in addition to the expenses of the Fund.
Prepayment and Extension
Prepayment risk is the risk that principal on mortgages or other loan obligations underlying a security may be repaid prior to the stated
maturity date, which may reduce the market value of the security and the anticipated yield-to-maturity. Extension risk is the risk that an issuer will exercise its right to repay principal on an obligation held by the Fund later than expected, which
may decrease the value of the obligation and prevent the Fund from investing expected repayment proceeds in securities paying yields higher than the yields paid by the securities that were expected to be repaid.
Repurchase Agreements
In the event that the other party to a repurchase agreement defaults on its obligations, the Fund would generally seek to sell the underlying security serving as collateral for the repurchase agreement. However, the Fund may encounter
delay and incur costs before being able to sell the security. Such a delay may involve loss of interest or a decline in price of the security, which could result in a loss for the Fund. In addition, if the Fund is characterized by a court as an
unsecured creditor, it would be at risk of losing some or all of the principal and interest involved in the transaction.
Securities Lending
Securities lending involves two primary risks: “investment risk” and “borrower default risk.” Investment risk is the risk that the Fund will lose money from the investment of the cash collateral received from the
borrower. Borrower default risk is the risk that the Fund will lose money due to the failure of a borrower to return a borrowed security in a timely manner.
U.S. Government Securities and Obligations
U.S. government securities are obligations of, or guaranteed by, the U.S. government, its agencies or government-sponsored enterprises.
U.S. government securities are subject to market and interest rate risk, and may be subject to varying degrees of credit risk.
When Issued and Delayed Delivery Securities and Forward Commitments
When issued securities, delayed delivery securities and forward commitments involve the risk that the security the Fund buys will lose
value prior to its delivery. There also is the risk that the security will not be issued or that the other party will not meet its obligation. If this occurs, the Fund loses both the investment opportunity for the assets it set aside to pay for the
security and any gain in the security’s price.
An investment in the Fund is not a bank deposit and is
not insured or guaranteed by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other government agency.
PERFORMANCE INFORMATION
The following information is intended to help you understand the risks of investing in the Fund. The following bar chart shows the
changes in the Fund’s performance from year to year, and the table compares the Fund’s performance to the performance of a broad-based securities market index/indices for the same period. The Fund’s performance information reflects
applicable fee waivers and/or expense limitations in effect during the period presented. Absent such fee waivers/expense limitations, if any, performance would have been lower. The bar chart shows the performance of the Fund’s Class A shares.
Sales charges are not reflected in the bar chart. If they were, returns would be less than those shown. However, the table includes all applicable fees and sales charges. Other class shares’ performance would be higher or lower than Class A
shares’ performance because of the higher or lower expenses paid by Class A shares. The Fund’s past performance (before and after taxes) is no guarantee of future results.
For the most recent performance figures, go to
www.INGFunds.com/literature or call 1-800-992-0180.
Calendar Year Total Returns Class A
(as of December 31 of each year)
|
|
Best quarter: 4th, 2008, 3.94% and Worst quarter: 2nd, 2004, (1.64)%
The Fund’s Class A shares’ year-to-date total return as of June 30, 2013: (2.16)%
|
Summary Prospectus
|
3 of 4
|
ING GNMA Income Fund
|
Average Annual Total Returns%
(for the periods ended December 31, 2012)
|
|
|
|
|
1 Yr
|
5 Yrs
|
10 Yrs
(or since
inception)
|
Inception
Date
|
|
Class A
before taxes
|
%
|
0.35
|
5.11
|
4.14
|
08/17/73
|
|
After tax on distributions
|
%
|
(1.10)
|
3.59
|
2.50
|
—
|
|
After tax on distributions with sale
|
%
|
0.21
|
3.47
|
2.54
|
—
|
|
Barclays GNMA Index
1
|
%
|
2.42
|
6.03
|
5.21
|
—
|
|
Class B
before taxes
|
%
|
(2.84)
|
4.52
|
3.87
|
10/06/00
|
|
Barclays GNMA Index
1
|
%
|
2.42
|
6.03
|
5.21
|
—
|
|
Class C
before taxes
|
%
|
1.15
|
4.86
|
3.87
|
10/13/00
|
|
Barclays GNMA Index
1
|
%
|
2.42
|
6.03
|
5.21
|
—
|
|
Class I
before taxes
|
%
|
3.15
|
5.96
|
4.96
|
01/07/02
|
|
Barclays GNMA Index
1
|
%
|
2.42
|
6.03
|
5.21
|
—
|
|
Class W
before taxes
|
%
|
3.12
|
5.93
|
6.06
|
12/17/07
|
|
Barclays GNMA Index
1
|
%
|
2.42
|
6.03
|
6.03
2
|
—
|
|
1
|
The index returns do not reflect deductions for fees, expenses, or taxes.
|
|
2
|
Reflects index performance since the date closest to the Class’ inception for which data is available.
|
After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the
impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement accounts. In some cases the after-tax returns may exceed the return before taxes due to an assumed tax benefit from any losses on a sale of Fund shares at the end of the measurement period.
After-tax returns are shown for Class A shares only. After-tax returns for other classes will vary.
PORTFOLIO MANAGEMENT
|
Investment Adviser
|
Sub-Adviser
|
|
ING Investments, LLC
|
ING Investment Management Co. LLC
|
|
Portfolio Managers
|
|
|
Jeff Dutra
|
Justin McWhorter
|
|
Portfolio Manager (since 05/09)
|
Portfolio Manager (since 05/09)
|
|
Peter Guan
|
|
|
Portfolio Manager (since 05/09)
|
|
PURCHASE AND SALE OF FUND SHARES
Shares of the Fund may be purchased or sold on any business day (normally any day when the New York Stock Exchange is open). You can
buy or sell shares of the Fund through a broker-dealer or other financial intermediary; by visiting our website at www.INGInvestment.com; by writing to us at ING Funds, 7337 East Doubletree Ranch Road, Suite 100, Scottsdale, Arizona 85258; or by
calling us at 1-800-992-0180.
|
Minimum Initial Investment
$ by share class
|
|
|
Class
|
|
A, C
|
I
|
W
|
|
Non-retirement accounts
|
$
|
1,000
|
250,000
|
1,000
|
|
Retirement accounts
|
$
|
250
|
250,000
|
1,000
|
|
Certain omnibus accounts
|
$
|
250
|
—
|
—
|
|
Pre-Authorized Investment Plan
|
$
|
1,000
|
—
|
—
|
There
are no minimums for additional investments except that the Pre-Authorized Investment Plan requires a monthly investment of at least $100.
TAX INFORMATION
The Fund’s distributions are generally taxable to you as ordinary income, capital gains, or a combination of the two,
unless you are investing through a tax-deferred arrangement, such as a 401(k) plan or an individual retirement account. If you are investing through a tax-deferred arrangement, you may be taxed upon withdrawals from that arrangement.
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/or its related
companies may pay the intermediary for the sale of Fund shares and/or related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another
investment. Ask your salesperson or visit your financial intermediary’s website for more information.
|
Summary Prospectus
|
4 of 4
|
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