International Opportunity Bond Fund

Class - A

OVERVIEW

Fund Objective


The Fund seeks to provide a high level of current income, with capital appreciation as a secondary goal.

Sub-Advisor Background


Allianz Global Investors U.S. LLC (Allianz) and its affiliates have clients around the world, from pension funds, large and small, to blue-chip multinationals, from charitable foundations to families, individuals and their advisers. Its parent company, Allianz SE, was founded in 1890, boasting more than 125 years of asset management expertise to its name. Allianz offers a wide range of fixed-income investments, including global and single-country strategies; developed- and emerging-market investments; systematic strategies; high-yield and convertible strategies. Allianz's global fixed income capability has been further strengthened in 2016 by the acquisition of Rogge Global Partners, the UK-based global fixed-income specialist.

Tickers & Cusips


Ticker DAIOX
Cusip 265458463
Share Class A-Shares
Fund Code 317

Fund Information


Dividend Frequency Monthly
Capital Gains Paid December*
Fund Inception 11/1/2013
FISCAL Year-End October
* If applicable

Risk Tolerance Spectrum


LOWER RISKHIGHER RISK

Minimum Investments


For Class A shares, the initial minimum investment amount for regular accounts is $5,000, and for tax-deferred accounts is $2,000. The minimum subsequent investment is $100. An account fee of $15 annually will be charged for all non-retirement accounts with a balance below $2,500. The account fee will not be charged if the balance falls below $2,500 due solely to depreciation of the investment. The fee will be waived if you have multiple accounts and your total investment amount is $50,000 or more.

The minimum can also be waived by the Adviser for shareholders investing through a wrap program or similar arrangement.

PRICE/PERFORMANCE

Price & YTD Total Return (12/12/2018)


Net Asset Value (NAV): NAV Change: NAV Percentage Change:
$8.87 $0.02 0.23 %
Net Asset Value (NAV): $8.87
NAV Change: $0.02
NAV Percentage Change: 0.23 %
YTD Return at NAV:
-6.14 %
YTD Return at NAV: -6.14 %

Performance Inception Date (As of 11/1/2013)


Most recent
month-end (as of 11/30/2018)
1 Yr 3 Yr 5 Yr 10 Yrs Since
Inception
Fund Performance -6.45 % 1.04 % -2.05 % -2.09 %
Fund Performance
with Maximum Sales Charge
-10.71 % -0.51 % -2.95 % -2.98 %
Average Annual
Total Return (as of 9/30/2018)
1 Yr 3 Yr 5 Yr 10 Yrs Since
Inception
Fund Performance -3.53 % 0.99 % -1.81 %
Fund Performance
with Maximum Sales Charge
-7.88 % -0.56 % -2.72 %
Most recent
month-end (as of 11/30/2018)
Fund
Performance
1 Yr -6.45 %
3 Yr 1.04 %
5 Yr -2.05 %
10 Yrs
Since Inception -2.09 %
Most recent
month-end (as of 11/30/2018)
Fund Performance
with Maximum Sales Charge
1 Yr -10.71 %
3 Yr -0.51 %
5 Yr -2.95 %
10 Yrs
Since Inception -2.98 %
Average Annual Total Return
(as of 9/30/2018)
Fund
Performance
1 Yr -3.53 %
3 Yr 0.99 %
5 Yr
10 Yrs
Since Inception -1.81 %
Average Annual Total Return
(as of 9/30/2018)
Fund Performance
with Maximum Sales Charge
1 Yr -7.88 %
3 Yr -0.56 %
5 Yr
10 Yrs
Since Inception -2.72 %
Per prospectus dated 2/28/2018
Expense Ratio: 1.79 %
Maximum Front-End Load: 4.50 %
Per prospectus dated 2/28/2018
Expense Ratio:
1.79 %
Maximum Front-End Load:
4.50 %
As of 11/30/2018
Annualized 30 Day SEC Yield at NAV: 0.00 %
As of 11/30/2018
Annualized 30 Day SEC Yield at NAV:
0.00 %

Prices and returns quoted represent past results and are no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, so your shares, when redeemed, may be worth more or less than their original cost.

Distribution


Date $/Share Type
12/27/2017 $0.01 Long-Term Capital Gain
12/28/2016 $0.09 Long-Term Capital Gain
12/31/2015 $0.00 Dividend
11/28/2014 $0.00 Dividend
10/31/2014 $0.01 Dividend
8/29/2014 $0.00 Dividend
7/31/2014 $0.00 Dividend
6/30/2014 $0.01 Dividend
5/30/2014 $0.00 Dividend
4/30/2014 $0.00 Dividend
3/31/2014 $0.00 Dividend
2/28/2014 $0.00 Dividend
1/31/2014 $0.00 Dividend
12/31/2013 $0.01 Dividend
11/29/2013 $0.00 Dividend

Year-End Distribution


Mutual funds typically distribute taxable capital gains to shareholders each December. Click below to view the year-end distribution factors (per share) for the Dunham Funds.

HOLDINGS

Top 10 Holdings (As of 10/31/2018)


Security % of Net Assets
Japan Gov't 20-Yr 2.10% 12/27 6.98 %
JAPAN- 64 (20 YEAR ISSUE) 1.90% 9/23 5.94 %
Bonos Y Oblig Del Estado 1.15% 7/20 2.84 %
Japan 20 Year Issue 1.70% 9/33 2.44 %
Deutschland Bundesrepublik 4.75% 7/34 2.33 %
France (Govt Of) 0.75% 5/28 2.02 %
Westpac Banking Corp 0.38% 3/23 1.99 %
Euro 1.99 %
Bonos Y Oblig Del Estado 4.00% 4/20 1.97 %
Japan 10 Year Issue 0.80% 9/22 1.94 %

Fund Sector Allocation (As of 10/31/2018)


Japan (20.84%)
United Kingdom (13.61%)
Spain (11.85%)
France (11.47%)
Netherlands (8.05%)
Italy (6%)
Germany (4.74%)
Australia (3.54%)
Canada (2.67%)
Belgium (2.67%)
Foreign Exchange Contracts (2.65%)
Ireland (1.55%)
Switzerland (1.55%)
Denmark (1.11%)
Jersey (1.03%)
Other (6.67%)

Investors should consider the investment objectives, risk factors, charges, and expenses of the Dunham Funds carefully before investing. This and other important information is contained in the Dunham Funds’ summary prospectus and/or prospectus, which may be obtained by contacting your financial advisor, or by calling toll free (800) 442‐4358. Please read prospectus materials carefully before investing or sending money. Investing involves risk, including possible loss of principal.

Dunham Funds are distributed by Dunham & Associates Investment Counsel, Inc., a Registered Investment Adviser and Broker/Dealer. Member FINRA / SIPC.

Returns for Class A Shares include the maximum sales charge (5.75% for equity funds and 4.50% for fixed income funds). Net Asset Value (NAV) returns exclude these charges, which would have reduced returns.

Average annual total return is the annual compound return for the indicated period. It reflects the change in share price and the reinvestment of all dividends and capital gains. Returns for periods of less than one year are cumulative total returns.

Call or Redemption Risk - As interest rates decline, issuers of high-yield bonds may exercise redemption or call provisions. This may force the Fund to redeem higher yielding securities and replace them with lower yielding securities with a similar risk profile. This could result in a decreased return.

Changing Fixed Income Market Conditions Risk - During periods of sustained rising rates, fixed income risks will be amplified. If the U.S. Federal Reserve’s Federal Open Market Committee (“FOMC”) raises the federal funds interest rate target, interest rates across the U.S. financial system may rise. However, the magnitude of rate changes across maturities and borrower sectors is uncertain. Rising rates tend to decrease liquidity, increase trading costs, and increase volatility, all of which make portfolio management more difficult and costly to the Fund and its shareholders. Additionally, default risk increases when issuers borrow at higher rates. Prolonged declines in the Fund’s share price may lead to increased redemption requests by shareholders. To meet redemption requests, the Fund may have to sell securities in times of overall market turmoil, lower liquidity and declining prices. Generally, each of these changing market conditions risks may cause the Fund’s share price to fluctuate or decline more than other types of investments.

Credit Risk - Issuers of fixed-income securities may default on interest and principal payments due to the Fund. Generally, securities with lower debt ratings have speculative characteristics and have greater risk the issuer will default on its obligation. Fixed-income securities rated in the fourth classification by Moody’s (Baa) and S&P (BBB) may have some speculative characteristics and changes in economic conditions or other circumstances are more likely to lead to a weakened capacity of those issuers to make principal or interest payments, as compared to issuers of more highly rated securities. High-yield fixed-income securities (also known as “junk bonds”) are considered speculative with respect to the issuer’s capacity to pay interest and repay principal in accordance with the terms of the obligations. This means that, compared to issuers of higher rated securities, issuers of medium and lower rated securities are less likely to have the capacity to pay interest and repay principal when due in the event of adverse business, financial or economic conditions and/or may be in default or not current in the payment of interest or principal. The market values of medium- and lower-rated securities tend to be more sensitive to company-specific developments and changes in economic conditions than higher-rated securities. The companies that issue these securities often are highly leveraged, and their ability to service their debt obligations during an economic downturn or periods of rising interest rates may be impaired. In addition, these companies may not have access to more traditional methods of financing, and may be unable to repay debt at maturity by refinancing. The risk of loss due to default in payment of interest or principal by these issuers is significantly greater than with higher-rated securities because medium- and lower-rated securities generally are unsecured and subordinated to senior debt. Default, or the market’s perception that an issuer is likely to default, could reduce the value and liquidity of securities held by the Fund, thereby reducing the value of your investment in Fund shares. In addition, default may cause the Fund to incur expenses in seeking recovery of principal or interest on its portfolio holdings.

Currency Risk - Adverse changes in currency exchange rates (relative to the U.S. dollar) may erode or reverse any potential gains from a Fund’s investments denominated in a foreign currency or may widen existing losses. Exchange rate movements are volatile and it may not be possible to effectively hedge the currency risks of many countries. Currency market risk results from the price movement of foreign currency values in response to shifting market supply and demand. Interest rate risk arises whenever a country changes its stated interest rate target associated with its currency. Country risk arises because virtually every country has interfered with international transactions in its currency. Interference has taken the form of regulation of the local exchange market, restrictions on foreign investment by residents or limits on inflows of investment funds from abroad. Restrictions on the exchange market or on international transactions are intended to affect the level or movement of the exchange rate. This risk could include the country re-issuing a new currency, effectively making the “old” currency worthless.

Derivatives Risk - Derivatives are used to limit risk in the Fund or to enhance investment return and have a return tied to a formula based upon an interest rate, index, price of a security, currency exchange rate or other measurement. Derivatives involve special risks, including: (1) the risk that interest rates, securities prices and currency markets will not move in the direction that a portfolio manager anticipates; (2) imperfect correlation between the price of derivative instruments and movements in the prices of the securities, interest rates or currencies being hedged; (3) the fact that skills needed to use these strategies are different than those needed to select portfolio securities; (4) the possible absence of a liquid secondary market for any particular instrument and possible exchange imposed price fluctuation limits, either of which may make it difficult or impossible to close out a position when desired; (5) the risk that adverse price movements in an instrument can result in a loss substantially greater than the Fund's initial investment in that instrument (in some cases, the potential loss is unlimited); (6) particularly in the case of privately-negotiated instruments, the risk that the counterparty will not perform its obligations, or that penalties could be incurred for positions held less than the required minimum holding period; and (7) the inability to close out certain hedged positions to avoid adverse tax consequences. In addition, the use of derivatives for non-hedging purposes (that is, to seek to increase total return) is considered a speculative practice and may present an even greater risk of loss than when used for hedging purposes. Swap agreements are two-party contracts entered into for periods ranging from a few weeks to more than one year. In a standard “swap” transaction, two parties agree to exchange the returns (or differentials in rates of return) earned or realized on particular predetermined investments or instruments, which can be adjusted for an interest factor. Swap agreements involve the risk that the party with whom the Fund has entered into the swap will default on its obligation to pay the Fund and the risk that the Fund will not be able to meet its obligations to pay the other party to the agreement. When a Sub-Adviser uses margin, leverage, short sales or financial derivatives, such as options, futures and forward contracts, an investment in the Fund may be more volatile than investments in other mutual funds. Derivatives may also be embedded in securities such convertibles which typically include a call option on the issuer's common stock. Although the intention is to use such derivatives to minimize risk to the Fund, as well as for speculative purposes, there is the possibility that derivative strategies will not be used or that ineffective implementation of derivative strategies or unusual market conditions could result in significant losses to the Fund. Over the counter derivatives, such as swaps, are also subject to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation.

Emerging Markets Risk - In addition to the risks generally associated with investing in foreign securities, countries with emerging markets also may have relatively unstable governments, social and legal systems that do not protect shareholders, economies based on only a few industries, and securities markets that trade a small number of issues.

Foreign Investing Risk - Investing in foreign companies or ETFs which invest in foreign companies, may involve more risks than investing in U.S. companies. These risks can increase the potential for losses in the Fund and may include, among others, currency devaluations, currency risks (fluctuations in currency exchange rates), country risks (political, diplomatic, regional conflicts, terrorism, war, social and economic instability and policies that have the effect of limiting or restricting foreign investment or the movement of assets), different trading practices, less government supervision, less publicly available information, limited trading markets and greater volatility. Additionally, investments in securities denominated in foreign currencies are subject to the risk that those currencies will decline in value relative to the U.S. dollar. A decline in the value of foreign currencies relative to the U.S. dollar will reduce the value of securities held by the Fund and denominated in those currencies.

Interest Rate Risk - Debt securities have varying levels of sensitivity to changes in interest rates. In general, the price of a debt security may fall when interest rates rise. Securities with longer maturities may be more sensitive to interest rate changes. Certain corporate bonds and mortgage-backed securities may be significantly affected by changes in interest rates. Some mortgage-backed securities may have a structure that makes their reaction to interest rates and other factors difficult to predict, making their value highly volatile. Because zero coupon securities do not make interest payments, they are considered more volatile than bonds making periodic payments. When interest rates rise, zero coupon securities fall more sharply than interest paying bonds. However, zero coupon securities rise more rapidly in value when interest rates drop.

Liquidity Risk - The markets for high-yield, convertible and certain lightly traded equity securities (particularly small cap issues) are often not as liquid as markets for higher-rated securities or large cap equity securities. For example, relatively few market makers characterize the secondary markets for high-yield debt securities, and the trading volume for high-yield debt securities is generally lower than that for higher-rated securities. Accordingly, these secondary markets (generally or for a particular security) could contract under real or perceived adverse market or economic conditions. These factors may have an adverse effect on the Fund’s ability to dispose of particular portfolio investments and may limit the ability of the Fund to obtain accurate market quotations for purposes of valuing securities and calculating net asset value. Less liquid secondary markets also may affect the Fund’s ability to sell securities at their fair value. The Fund may invest in illiquid securities, which are more difficult to value and to sell at fair value. If the secondary markets for lightly-traded securities contract due to adverse economic conditions or for other reasons, certain liquid securities in the Fund’s portfolio may become illiquid, and the proportion of the Fund’s assets invested in illiquid securities may increase. Smaller, unseasoned companies (those with less than a three-year operating history) and recently-formed public companies may not have established products, experienced management, or an earnings history. As a result, their stocks may lack liquidity. Investments in foreign securities may lack liquidity due to heightened exposure to potentially adverse local, political, and economic developments such as war, political instability, hyperinflation, currency devaluations, and overdependence on particular industries. In addition, government interference in markets such as nationalization and exchange controls, expropriation of assets, or imposition of punitive taxes may result in a lack of liquidity. Possible problems arising from accounting, disclosure, settlement, and regulatory practices and legal rights that differ from U.S. standards might reduce liquidity. The chance that fluctuations in foreign exchange rates will decrease the investment’s value (favorable changes can increase its value) will also impact liquidity. These risks are heightened for investments in developing countries.

Lower-Rated Securities Risk - Securities rated below investment-grade, sometimes called “high-yield” or “junk” bonds, generally have more credit risk than higher-rated securities. Companies issuing high-yield fixed-income securities are not as strong financially as those issuing securities with higher credit ratings. These companies are more likely to encounter financial difficulties and are more vulnerable to changes in the economy, such as a recession or a sustained period of rising interest rates, which could affect their ability to make interest and principal payments. If an issuer stops making interest and/or principal payments, payments on the securities may never resume. These securities may be worthless and the Fund could lose its entire investment.

Management Risk - Each Fund is subject to management risk because it is an actively managed investment portfolio. The Sub-Adviser’s judgments about the attractiveness and potential appreciation of a security, whether selected under a “value”, “growth” or other investment style, may prove to be inaccurate and may not produce the desired results. The Adviser and Sub-Adviser will apply its investment techniques and risk analyses in making investment decisions for the Funds, but there is no guarantee that its decisions will produce the intended result. The successful use of hedging and risk management techniques may be adversely affected by imperfect correlation between movements in the price of the hedging vehicles and the securities being hedged.

Non-Diversification Risk - A Fund that is a non-diversified investment company means that more of the Fund’s assets may be invested in the securities of a single issuer than a diversified investment company. This may make the value of the Fund’s shares more susceptible to certain risk than shares of a diversified investment company. As a non-diversified fund, the Fund has a greater potential to realize losses upon the occurrence of adverse events affecting a particular issuer.

Risk of Investing in Japan - Japan may be subject to political, economic, nuclear, and labor risks, among others. Any of these risks, individually or in the aggregate, can impact an investment made in Japan. • Economic Risk. The growth of Japan’s economy has recently lagged that of its Asian neighbors and other major developed economies. Since the year 2000, Japan’s economic growth rate has remained relatively low, and it may remain low in the future. The Japanese economy is heavily dependent on international trade and has been adversely affected by trade tariffs, other protectionist measures, competition from emerging economies and the economic conditions of its trading partners. Japan is also heavily dependent on oil imports, and higher commodity prices could therefore have a negative impact on the Japanese economy. • Political Risk. Historically, Japan has had unpredictable national politics and may experience frequent political turnover. Future political developments may lead to changes in policy that might adversely affect the Fund’s investments. In addition, China has become an important trading partner with Japan. Japan’s political relationship with China, however, has become strained. Should political tension increase, it could adversely affect the Japanese economy and destabilize the region as a whole. • Large Government Debt Risk. The Japanese economy faces several concerns, including a financial system with large levels of nonperforming loans, over-leveraged corporate balance sheets, extensive cross-ownership by major corporations, a changing corporate governance structure, and large government deficits. These issues may cause a slowdown of the Japanese economy. • Currency Risk. The Japanese yen has fluctuated widely at times and any increase in its value may cause a decline in exports that could weaken the Japanese economy. The Japanese government has, in the past, intervened in the currency markets to attempt to maintain or reduce the value of the yen. Japanese intervention in the currency markets could cause the value of the yen to fluctuate sharply and unpredictably and could cause losses to investors. • Nuclear Energy Risk. The nuclear power plant catastrophe in Japan in March 2011 may have long-term effects on the Japanese economy and its nuclear energy industry, the extent of which are currently unknown. • Labor Risk. Japan has an aging workforce and has experienced a significant population decline in recent years. Japan’s labor market appears to be undergoing fundamental structural changes, as a labor market traditionally accustomed to lifetime employment adjusts to meet the need for increased labor mobility, which may adversely affect Japan’s economic competitiveness.

Structured Note Risk - The Fund may seek investment exposure to sectors through structured notes that may be exchange traded or may trade in the over the counter market. These notes are typically issued by banks or brokerage firms, and have interest and/or principal payments which are linked to changes in the price level of certain assets or to the price performance of certain indices. The value of a structured note will be influenced by time to maturity, level of supply and demand for this type of note, interest rate and market volatility, changes in the issuer’s credit quality rating, and economic, legal, political, or events that affect the industry. In addition, there may be a lag between a change in the value of the underlying reference asset and the value of the structured note. Structured notes may also be subject to counterparty risk. The Fund may also be exposed to increased transaction costs when it seeks to sell such notes in the secondary market.