# EDGAR Filing Document

**Accession Number:** 0001420040
**File Stem:** 0001580642-23-000561
**Filing Date:** 2023-1
**Character Count:** 25383
**Document Hash:** 851a35ee2d94bacc3a9256a409f50668
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001580642-23-000561.hdr.sgml**: 20230131

**ACCESSION NUMBER**: 0001580642-23-000561

**CONFORMED SUBMISSION TYPE**: 497

**PUBLIC DOCUMENT COUNT**: 14

**FILED AS OF DATE**: 20230131

**DATE AS OF CHANGE**: 20230131

**EFFECTIVENESS DATE**: 20230131

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Dunham Funds
- **CENTRAL INDEX KEY:** 0001420040
- **IRS NUMBER:** 000000000

**FILING VALUES:**
- **FORM TYPE:** 497
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-147999
- **FILM NUMBER:** 23572285

**BUSINESS ADDRESS:**
- **STREET 1:** 10251 VISTA SORRENTO PARKWAY
- **STREET 2:** SUITE 200
- **CITY:** SAN DIEGO
- **STATE:** CA
- **ZIP:** 92121
- **BUSINESS PHONE:** 858-964-0500

**MAIL ADDRESS:**
- **STREET 1:** 10251 VISTA SORRENTO PARKWAY
- **STREET 2:** SUITE 200
- **CITY:** SAN DIEGO
- **STATE:** CA
- **ZIP:** 92121

## Series and Classes Contracts Data

### Dunham Dynamic Macro Fund (Series ID: S000028743)

---

|  |  |  |
|:---|:---|:---|
| Class Name                        | Ticker Symbol | Class ID   |
| Dunham Dynamic Macro Fund Class A | DAAVX         | C000087895 |
| Dunham Dynamic Macro Fund Class C | DCAVX         | C000087896 |
| Dunham Dynamic Macro Fund Class N | DNAVX         | C000087897 |

---

## Series and Classes Contracts Data

### Dunham Dynamic Macro Fund (Series ID: S000028743)

| Class ID   | Class Name                        | Ticker Symbol   |
|:---|:---|:---|
| C000087895 | Dunham Dynamic Macro Fund Class A | DAAVX           |
| C000087896 | Dunham Dynamic Macro Fund Class C | DCAVX           |
| C000087897 | Dunham Dynamic Macro Fund Class N | DNAVX           |

?xml version="1.0" encoding="utf-8"?

**DUNHAM FUNDS**

**Dunham Dynamic Macro Fund**

**Class A (DAAVX) \| Class C (DCAVX) \| Class N (DNAVX)**

**Supplement dated January 31, 2023 to the Statutory Prospectus (the "Prospectus") dated March 1, 2022, as amended June 29, 2022, and the Summary Prospectus dated March 1, 2022, as amended June 29, 2022**

**This Supplement updates and supersedes any contrary information contained in the Prospectus and Summary Prospectus.**

Effective February 1, 2023, Vontobel Asset Management, Inc. ("Vontobel" or "Sub-Adviser") replaces Newton Investment Management North America, LLC ("NIMNA") as sub-adviser to the Dunham Dynamic Macro Fund (the "Fund").

*Reference is made to the section entitled "Fees and Expenses of the Fund" beginning on page 37 of the Prospectus and page 1 of the Summary Prospectus. The tables describing the expenses of the Fund are deleted in their entirety and replaced with the following:*

**Fees and Expenses of the Fund:**

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A shares if you and your family invest, or agree to invest in the future, at least $50,000 in the Fund. More information about these and other discounts is available from your financial professional and in **How to Purchase Shares** on page 89 of the Fund's Prospectus and in **How to Buy and Sell Shares** on page 88 of the Fund's Statement of Additional Information.

---

| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp; **Shareholder Fees**<br> **(fees paid directly from your investment)** | &nbsp;&nbsp;**Class A** | &nbsp;&nbsp;**Class C** | **Class N** |
| &nbsp;&nbsp; Maximum Sales Charge (Load) Imposed on Purchases<br> (as a % of offering price) | &nbsp;&nbsp;5.75% |  |  |
| &nbsp;&nbsp; Maximum Deferred Sales Charge (Load)<br> (as a % of the of the original purchase price for purchases of $1 million or more) | &nbsp;&nbsp;0.75% |  |  |
| &nbsp;&nbsp; Maximum Sales Charge (Load) Imposed<br> on Reinvested Dividends and other Distributions |  |  |  |
| &nbsp;&nbsp;Redemption Fee |  |  |  |
| &nbsp;&nbsp;Exchange Fee |  |  |  |

---

---

| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp; **Annual Fund Operating Expenses**<br> **(expenses that you pay each year as a** <br> **percentage of the value of your investment)** |  |  |  |
| &nbsp;&nbsp;Management Fees <sup>(1)</sup> | &nbsp;&nbsp;1.25% | &nbsp;&nbsp;1.25% | &nbsp;&nbsp;1.25% |
| &nbsp;&nbsp;Distribution and/or Service (12b-1) Fees | &nbsp;&nbsp;0.25% | &nbsp;&nbsp;1.00% | &nbsp;&nbsp;0.00% |
| &nbsp;&nbsp;Other Expenses: | &nbsp;&nbsp;0.53% | &nbsp;&nbsp;0.53% | &nbsp;&nbsp;0.53% |
| &nbsp;&nbsp;Acquired Fund Fees and Expenses<sup>(2)</sup> | &nbsp;&nbsp;0.08% | &nbsp;&nbsp;0.08% | &nbsp;&nbsp;0.08% |
| &nbsp;&nbsp;Total Annual Fund Operating Expenses | &nbsp;&nbsp;2.11% | &nbsp;&nbsp;2.86% | &nbsp;&nbsp;1.86% |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Management Fees have been restated to reflect a new Sub-Advisory agreement
that is effective February 1, 2023. The Management fees assume the Sub-Adviser's base fee. Actual Sub-Advisory fees may be higher
or lower depending on Fund performance. The new Sub-Advisory fee is a fulcrum fee with a base or fulcrum of 60 bps (0.60%) and can range
from 0.25% to 0.95%, based on the Fund's performance relative to the Dow Jones Moderately Aggressive Portfolio Index., the Fund's
benchmark.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Acquired Fund Fees and Expenses are the indirect costs of investing in other
investment companies. The operating expenses in this fee table may not correlate to the expense ratio in the Fund's financial highlights
because the financial statements include only the direct operating expenses incurred by the Fund, not the indirect costs of investing
in other investment companies.

*The table under the sub-heading "Example" that describes the costs of investing in shares of the Fund on page 37 of the Prospectus and page 1 of the Summary Prospectus is deleted in its entirety and replaced with the following:*

---

| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;**<u>Class</u>** | &nbsp;&nbsp;**<u>1 Year</u>** | &nbsp;&nbsp;**<u>3 Years</u>** | &nbsp;&nbsp;**<u>5 Years</u>** | &nbsp;&nbsp;**<u>10 Years</u>** |
| &nbsp;&nbsp;Class A | &nbsp;&nbsp;$786 | &nbsp;&nbsp;$1226 | &nbsp;&nbsp;$1692 | &nbsp;&nbsp;$2973 |
| &nbsp;&nbsp;Class C | &nbsp;&nbsp;$299 | &nbsp;&nbsp;$915 | &nbsp;&nbsp;$1557 | &nbsp;&nbsp;$3280 |
| &nbsp;&nbsp;Class N | &nbsp;&nbsp;$199 | &nbsp;&nbsp;$615 | $1057 | &nbsp;&nbsp;$2285 |

---

*The information under the heading "Principal Investment Strategies" beginning on page 37 and 62 of the Prospectus and on page 2 of the Summary Prospectus is deleted in its entirety and replaced with the following:*

 

**Principal Investment Strategies:** 

The Sub-Adviser's macro asset allocation strategy is based primarily on the active management of the fund's exposure to market risk in different asset classes and seeks to take advantage of opportunities arising from the variability of risk premia over time. The Fund's Sub-Adviser seeks to achieve the total return component of the Fund's investment objective by using a dynamic macro asset allocation strategy. The Fund may invest in or seek exposure to a wide range of asset classes including, without limitation, (i) equity (of any market capitalization), (ii) fixed-income (including all grades and maturities of domestic and foreign credit (including emerging markets) (iii) commodities, (iv) real estate investment trusts ("REITs") and (v) currencies. The Sub-Adviser's strategy seeks long and short exposure in these various asset classes and currencies.

The Fund may take long positions indirectly through exchange-traded funds ("ETFs"), exchange-traded notes ("ETNs") and derivative instruments such as, but not limited to, commodity linked notes, futures, swaps, options and currency forward contracts. The Fund may take short positions indirectly through ETFs or ETNs, and derivative instruments (listed above) that are intended to provide inverse exposure to a particular asset class or currency. Long positions and short positions may be intended to enhance expected return, reduce expected risk or both. The Sub-Adviser expects the Fund's net long exposure to typically be between 75% and 125%, but it may range from 0% to 200%. The Fund's net exposure in equity is between -100% and 100%, in bonds between -100% and 200%, and in commodities between -50 and 75%.

Futures are typically based on, though are not limited to, equity indexes, government bonds, commodities and currencies. Swaps are typically related to – without limitations commodities and commodity indexes. Options would typically be on, though are not limited to, equity indexes, equity index futures, government bonds, government bond futures and currencies.

The Fund has no geographic or other limits on the allocation of its assets among asset classes.

The Sub-Adviser seeks to achieve the capital preservation component of the Fund's investment objective during down markets through broad diversification across different asset classes in combination with dynamic management of risk premia and dynamic risk management including (1) shifting allocation between asset classes, (2) short positions on equities, (3) allocation to government bonds and (4) allocation to cash equivalents.

Risk premia (i.e., excess returns above the risk-free rate) represent the long-term compensation of an investor for the assumption of market risk in different asset classes. The Sub-Adviser's goal is to identify when risk premia are particularly attractive, actively shift between asset classes, between long or short positions, as well as allocations to cash.

The Sub-Adviser generally purchases a security when its model identifies that its risk-reward profile is relatively more attractive than other opportunities. The Sub-Adviser generally sells a security when its model identifies that the relative attractiveness deteriorates or risk associated with the security increases significantly. In addition, the Sub-Adviser may sell a security if better investment opportunities emerge elsewhere.

The Fund may also engage in securities lending.

 

*Reference is made to the section entitled "Principal Investment Risks" beginning on page 38 of the Prospectus and on page 3 of the Summary Prospectus. The risks listed under this section are deleted in their entirely and revised to read as follows:*

 

*Asset Allocation Risk –* In allocating the Fund's assets, the Sub-Adviser may favor markets or asset classes that perform poorly relative to other markets and asset classes. The Sub-Adviser's investment analysis, its selection of investments, and its assessment of the risk/return potential of asset classes and markets may not produce the intended results and/or can lead to an investment focus that results in the Fund underperforming other funds with similar investment strategies and/or underperforming the markets in which the Fund invests.

*Stock Market Risk –* Stock markets can be volatile. In other words, the prices of stocks can fall rapidly in response to developments affecting a specific company or industry, or to changing economic, political or market conditions. The Fund's investments may decline in value if the stock markets perform poorly.

*Interest Rate Risk –* In general, the price of a debt security falls when interest rates rise. Debt securities have varying levels of sensitivity to changes in interest rates. Securities with longer maturities may be more sensitive to interest rate changes.

*Commodity Risk –* Investing in the commodities markets may subject the Fund to greater volatility than investments in traditional securities. Commodity prices may be influenced by unfavorable weather, animal and plant disease, geologic and environmental factors as well as changes in government regulation such as tariffs, embargoes or burdensome production rules and restrictions.

*Structured Note Risk –* Structured notes involve tracking risk, issuer default risk and may involve leverage risk.

*Derivatives Risk –* Financial derivatives, such as futures, swaps, options and currency forward contracts, may not produce the desired investment results because they are not perfect substitutes for the underlying securities, indices or currencies from which they are derived. Derivatives may also create leverage which will amplify the effect on the Fund, which may produce significant losses. 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.

*Leveraging Risk –* Using derivatives can create leverage, which can magnify the Fund's potential for gain or loss and, therefore, amplify the effects of market volatility on the Fund's share price.

*Currency Risk –* Adverse changes in currency exchange rates (relative to the U.S. dollar) may erode or reverse any potential gains from the 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.

*U.S. Government Securities Risk* – The risk that U.S. Government securities in the Fund's portfolio will be subject to price fluctuations, or that an agency or instrumentality will default on an obligation not backed by the full faith and credit of the United States.

*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. 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.

*Foreign Investing Risk –* Investments in foreign countries are subject to currency risk and country-specific risks such as political, diplomatic, regional conflicts, terrorism, war, social and economic instability, and policies that have the effect of decreasing the value of foreign securities. Foreign countries may be subject to different trading settlement practices, less government supervision, less publicly available information, limited trading markets and greater volatility than U.S. investments.

*ETF Risk –* ETFs are subject to investment advisory and other expenses, which will be indirectly paid by the Fund. As a result, the cost of investing in the Fund will be higher than the cost of investing directly in ETFs and may be higher than other mutual funds that invest exclusively in common stocks. The ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and the market value of ETF shares may differ from their net asset value.

ETFs are subject to specific risks, depending on the nature of the fund. For instance, investing in inverse ETFs is similar to holding various short positions, or using a combination of advanced investment strategies to profit from falling prices. When the value of ETFs held by the Fund decline, the value of your investment in the Fund declines.

*ETN Risk –* ETNs are securities that combine aspects of a bond and an ETF. ETN returns are based upon the performance of a market index or other reference asset less fees, and can be held to maturity as a debt security. ETNs are traded on a securities exchange. Their value is based on their reference index or strategy and the credit quality of the issuer. Because ETNs are debt instruments of the issuer of the ETN, they are subject to the credit risk of the issuer. ETNs are also subject to the risk that they may trade at a premium or discount to value attributable to their reference index. When the Fund invests in an ETN, shareholders of the Fund bear their proportionate share of the ETN's fees and expenses, as well as their share of the Fund's fees and expenses. There may also not be an active trading market available for some ETNs. Additionally, trading of ETNs may be halted and ETNs may be delisted by the listing exchange.

*Emerging Markets Risk –* Emerging market countries may have relatively unstable governments, weaker economies, and less-developed legal systems which do not protect securities holders. Emerging market economies may be based on only a few industries and security issuers may be more susceptible to economic weakness and more likely to default. Emerging market securities also tend to be less liquid.

*Money Market/Short-Term Securities Risk –* To the extent the Fund holds cash or invests in money market or short-term securities, the Fund may be less likely to achieve its investment objective. In addition, it is possible that the Fund's investments in these instruments could lose money.

*Long-Term Maturities/Durations Risk* – Fixed income securities with longer maturities or durations may be subject to greater price fluctuations due to interest rate, tax law, and general market changes than securities with shorter maturities or durations.

*Portfolio Turnover Risk* – The frequency of a Fund's transactions will vary from year to year. Increased portfolio turnover may result in higher brokerage commissions, dealer mark-ups and other transaction costs and may result in taxable capital gains. Higher costs associated with increased portfolio turnover may offset gains in a Fund's performance.

*Credit Risk –* Issuers of debt securities may suffer from a reduced ability to repay their interest and principal obligations. They may even default on interest and/or principal payments due to the Fund. An increase in credit risk or a default will cause the value of Fund debt securities to decline. Issuers with lower credit quality are more susceptible to economic or industry downturns and are more likely to default.

*Natural Disaster/Epidemic Risk* – Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis, and other severe weather-related phenomena generally, and widespread disease and illness, including pandemics and epidemics (such as the novel coronavirus), have been and can be highly disruptive to economies and markets.

*Liquidity Risk –* Some securities may have few market-makers and low trading volume, which tend to increase transaction costs and may make it impossible for the Fund to dispose of a security position at all or at a price which represents current or fair market value.

*Management Risk –* The Fund is subject to management risk because it is an actively managed investment portfolio. The Sub-Adviser will apply its investment techniques and risk analyses in making investment decisions for the Fund, 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.

*Securities Lending Risk* – The risk of securities lending is that the financial institution that borrows securities from the Fund could go bankrupt or otherwise default on its commitment under the securities lending agreement and the Fund might not be able to recover the loaned securities or their value.

*The information under the sub-headings "Sub-Adviser" and "Sub-Adviser Portfolio Managers" located on page 41 of the Prospectus and page 6 of the Summary Prospectus is deleted in its entirety and replaced with the following:*

Sub-Adviser: Vontobel Asset Management, Inc. ("Vontobel" or the "Sub-Adviser").

Sub-Adviser Portfolio Managers: Tim Stehle and Robert Borenich have had primary responsibility for the day-to-day management of the Fund since February 2023. Mr. Stehle is Portfolio Manager of VAMUS where he has worked since 2016. Mr. Borenich is Senior Portfolio Manager of VAMUS where he has worked since 2012.

*The information under the heading "Dunham Dynamic Macro Fund" beginning on page 85 of the Prospectus is deleted in its entirety and replaced with the following:* 

 

Vontobel Asset Management, Inc. ("Vontobel"), located at 1540 Broadway, 38th Floor, New York, New York 10036, serves as Sub-Adviser to the Dunham Dynamic Macro Fund. Vontobel offers investment management services to pension plans, mutual funds and other institutional investors, and had approximately $24.1 billion in assets under management as of December 31, 2022.

Vontobel will seek the advice and assistance of its non-U.S. affiliates within Vontobel Asset Management in providing investment supervisory services to its U.S. clients (in such capacity, "Participating Affiliates"). Vontobel may, in its discretion, delegate all or a portion of its advisory or other functions (including placing trades on behalf of clients) to any Participating Affiliate. The employees of such Participating Affiliates may provide portfolio management, research, financial analysis, order placement, and other services to Vontobel's U.S. clients. Such employees will be acting as "associated person" of the Registrant in providing such services under the direct supervision and oversight of Vontobel. Vontobel remains responsible for the advice and services provided and clients will not pay additional investment advisory fees as a result of such advice and services being rendered by such associated persons, absent

disclosure and express client consent. Vontobel has agreements in place with its Participating Affiliates, which is structured in accordance with a series of SEC no-action relief letters mandating that Participating Affiliates remain subject to the regulatory supervision of both Vontobel and the SEC in certain respects.

**Tim Stehle**

*Portfolio Manager*

Tim Stehle is a portfolio manager within the Vescore Boutique managing quantitatively oriented equities and multi asset portfolios. In 2017 he moved to portfolio management. Prior to that, he implemented Vescore's quantitative strategies as a trader within the Trading & Execution team. He joined Vontobel in 2016.

**Robert Borenich**

*Senior Portfolio Manager*

Robert Borenich is senior portfolio manager within the Vescore Boutique in Zurich. In his role, he is responsible for the management of multi asset portfolios and absolute return mandates. From 2007 to 2011, he was portfolio manager at Vontobel Asset Management's Vienna branch, where he managed portfolios of Austrian key account clients, partially by applying a capital protection approach. He joined Vontobel in 2012.

\*\*\*

If you have any questions, please contact the Fund at (888) 3DUNHAM (338-6426).

**Investors Should Retain This Supplement For Future Reference**

**DUNHAM FUNDS**

**Dunham Dynamic Macro Fund**

**Class A (DAAVX) \| Class C (DCAVX) \| Class N (DNAVX)**

**Supplement dated January 31, 2023 to the Statement of Additional Information dated March 1, 2022, as amended June 29, 2022 (the "SAI")** 

**This Supplement updates and supersedes any contrary information contained in the SAI.**

Effective February 1, 2023, Vontobel Asset Management, Inc. ("Vontobel" or "Sub-Adviser") replaces Newton Investment Management North America, LLC ("NIMNA") as sub-adviser to the Dunham Dynamic Macro Fund (the "Fund").

*Reference is made to the section entitled "Portfolio Managers" beginning on page 65 of the SAI. The table under this section is amended to delete in its entirety the information for James Stavena and Torrey Zaches, CFA pertaining to the Dunham Dynamic Macro Fund, and to add the following information that is provided as of October 31, 2022:*

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;**Portfolio Managers/ Portfolio(s) Managed** | &nbsp;&nbsp;**Registered Investment Company Accounts** | &nbsp;&nbsp; **Assets Managed**<br> **($ Millions)** | &nbsp;&nbsp;**Pooled Investment Vehicle Accounts** | &nbsp;&nbsp; **Assets Managed** <br> **($ Millions)** | &nbsp;&nbsp;**Other Accounts** | &nbsp;&nbsp; **Assets Managed** <br> **($ Millions)** | &nbsp;&nbsp; **Total Assets Managed** <br> **($ Millions)** |
| &nbsp;&nbsp; Tim Stehle<br> Vontobel Asset Management, Inc.<br> Dunham Dynamic Macro Fund | &nbsp;&nbsp;0 | &nbsp;&nbsp;$0 | &nbsp;&nbsp;7 | &nbsp;&nbsp;$471.5 | &nbsp;&nbsp;2 | &nbsp;&nbsp;$235.1 | &nbsp;&nbsp;$706.6 |
| &nbsp;&nbsp; Robert Borenich<br> Vontobel Asset Management, Inc<br> Dunham Dynamic Macro Fund | &nbsp;&nbsp;0 | &nbsp;&nbsp;$0 | &nbsp;&nbsp;1 | &nbsp;&nbsp;$126.1 | &nbsp;&nbsp;6 | &nbsp;&nbsp;$345.4 | &nbsp;&nbsp;$471.5 |

---

*Reference is made to the section entitled "Ownership of Securities" beginning on page 83 of the SAI. The table under this section is amended to delete in its entirety the information for James Stavena and Torrey Zaches, CFA pertaining to the Dunham Dynamic Macro Fund, and to add the following information that is provided as of October 31, 2022:*

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**Portfolio Manager** | &nbsp;&nbsp;**Portfolio Managed** | &nbsp;&nbsp;**Dollar Range of Equity Securities Beneficially Owned** |
| &nbsp;&nbsp;Tim Stehle | &nbsp;&nbsp;Dunham Dynamic Macro Fund | &nbsp;&nbsp;None |
| &nbsp;&nbsp;Robert Borenich | &nbsp;&nbsp;Dunham Dynamic Macro Fund | &nbsp;&nbsp;None |

---

\*\*\*

If you have any questions, please contact the Fund at (888) 3DUNHAM (338-6426).

**Investors Should Retain This Supplement For Future Reference**