# EDGAR Filing Document

**Accession Number:** 0000889284
**File Stem:** 0001398344-23-001722
**Filing Date:** 2023-2
**Character Count:** 23066
**Document Hash:** a2e801083fd2d768bd8981d2c44dcbad
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001398344-23-001722.hdr.sgml**: 20230201

**ACCESSION NUMBER**: 0001398344-23-001722

**CONFORMED SUBMISSION TYPE**: 497K

**PUBLIC DOCUMENT COUNT**: 3

**FILED AS OF DATE**: 20230201

**DATE AS OF CHANGE**: 20230201

**EFFECTIVENESS DATE**: 20230201

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** STERLING CAPITAL FUNDS
- **CENTRAL INDEX KEY:** 0000889284
- **IRS NUMBER:** 043331055
- **STATE OF INCORPORATION:** MA
- **FISCAL YEAR END:** 0930

**FILING VALUES:**
- **FORM TYPE:** 497K
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 033-49098
- **FILM NUMBER:** 23575611

**BUSINESS ADDRESS:**
- **STREET 1:** 3605 GLENWOOD AVENUE
- **STREET 2:** SUITE 100
- **CITY:** RALEIGH
- **STATE:** NC
- **ZIP:** 27612
- **BUSINESS PHONE:** 8002281872

**MAIL ADDRESS:**
- **STREET 1:** 3605 GLENWOOD AVENUE
- **STREET 2:** SUITE 100
- **CITY:** RALEIGH
- **STATE:** NC
- **ZIP:** 27612

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** BB&T FUNDS /
- **DATE OF NAME CHANGE:** 20010419

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** BB&T MUTUAL FUNDS GROUP
- **DATE OF NAME CHANGE:** 19920929

## Series and Classes Contracts Data

### Sterling Capital Quality Income Fund (Series ID: S000033167)

| Class ID   | Class Name          | Ticker Symbol   |
|:---|:---|:---|
| C000123273 | Institutional Class | SCSPX           |

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| |
|:---|
| **Summary Prospectus** February 1, 2023 |
| Sterling Capital Quality Income Fund <br>**Institutional Shares SCSPX** |
| Before you invest, you may want to review the Fund's Prospectus, which contains information about the Fund and its risks. The Fund's Prospectus and Statement of Additional Information, both dated February 1, 2023, are incorporated by reference into this Summary Prospectus. You can find the Fund's Prospectus and other information about the Fund online at www.sterlingcapitalfunds.com/funds. You can also get this information at no cost by calling 1-800-228-1872 or by sending an e-mail request to fundinfo@sterling-capital.com. |

---

**Investment Objective** 

The Fund seeks to maximize total return.

**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.

&nbsp;&nbsp;**Shareholder Fees** (fees paid directly from your investment) <br>

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| | |
|:---|:---|
|  | **Institutional <br> Shares**  |
| &nbsp;&nbsp;Maximum Sales Charge (load) on Purchases (as a % of offering price)  |  |
| &nbsp;&nbsp;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)  |  |
| &nbsp;&nbsp;Redemption Fee  |  |

---

&nbsp;&nbsp;**Annual Fund Operating Expenses** (expenses that you pay each year as a percentage of the value of your investment)<br>

---

| | |
|:---|:---|
|  | **Institutional <br> Shares**  |
| &nbsp;&nbsp;Management Fees | 0.35% |
| &nbsp;&nbsp;Distribution and Service (12b-1) Fees | 0.00% |
| &nbsp;&nbsp;Other Expenses | 0.26% |
| &nbsp;&nbsp;Total Annual Fund Operating Expenses | 0.61% |
| &nbsp;&nbsp;&nbsp;&nbsp;Fee Waiver or Expense Reimbursement<sup>(1)</sup> | -0.04% |
| &nbsp;&nbsp;Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement<sup>(1)</sup> | 0.57% |

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<sup>(1)</sup> The Fund's adviser has contractually agreed to limit the management fees paid by the Fund to 0.31% for the period from February 1, 2023 through January 31, 2024. This contractual limitation may be terminated during this period only by the Fund's Board of Trustees, and will automatically terminate upon termination of the Investment Advisory Agreement between the Fund and Sterling Capital Management LLC ("Sterling Capital").

&nbsp;&nbsp;**Example**<br>

This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same, except for the expiration of the current contractual expense limitation on January 31, 2024. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 <br> Year**  | **3 <br> Years**  | **5 <br> Years**  | **10 <br> Years**  |
| &nbsp;&nbsp;**Institutional Shares**  | $58 | $191 | $336 | $758 |

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&nbsp;&nbsp;**Portfolio Turnover**<br>

The Fund pays transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 35.18% 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 a diversified portfolio of securitized obligations of any kind (including asset-backed securities, commercial mortgage-backed securities and collateralized mortgage obligations). The Fund will invest in securities that are investment grade (*i.e.*, rated at the time of purchase in one of the four highest rating categories by a nationally recognized statistical rating organization, or determined by the portfolio manager to be of comparable quality).

As part of its investment strategy, the Fund may engage in mortgage dollar roll transactions, under which the Fund sells a mortgage-backed security to a dealer and simultaneously contracts to repurchase a security that is substantially similar in type, coupon and maturity, on a specified future date. Such investments will not exceed 25% of the Fund's total assets. Mortgage dollar roll transactions may create investment leverage.

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| | | |
|:---|:---|:---|
| **Summary Prospectus** | 1 of 4 | **Sterling Capital Quality Income Fund** |

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The Fund also will invest in securities issued or guaranteed by the U.S. government or its agencies and instrumentalities (such as, for example, the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Government National Mortgage Association (Ginnie Mae)); corporate debt securities, including corporate bonds, notes and debentures; preferred stock; and debt securities that are sold in private placement transactions between their issuers and their purchasers and that are neither listed on an exchange or traded over the counter.

In managing the portfolio, the portfolio manager uses a "top down" investment management approach focusing on interest rate risk, allocation among sectors, credit risk, and individual securities selection. The portfolio manager focuses on macro trends in the economy to establish a duration target that reflects the outlook for the future direction of interest rates. For yield curve management, in addition to the trend in interest rates, other factors such as future inflation expectations, supply factors, and future interest rate expectations are considered. Sector weightings are driven by a combination of the portfolio manager's macro view on interest rates and volatility as well as relative spread analysis (a comparison of current and historical valuation relationships between various sectors). Utilizing fundamental analysis the portfolio manager then selects individual securities consistent with the target by looking for the best relative values within particular sectors. The analysis includes an attempt to understand the structure and embedded features of potential securities. Features that are analyzed include puts, calls, sinking fund requirements (scheduled early retirements of the specific debt instrument), prepayment and extension risk, and individual company financial data for potential corporate holdings. Scenario analysis is the primary tool employed for these assessments. The Fund's average duration is expected to be within 1.5 years of the duration of the Bloomberg U.S. Mortgage Backed Securities Index.

The portfolio manager may consider selling a security owned by the Fund to reduce exposure to a particular sector, if the portfolio manager sees a deterioration in the underlying fundamentals of an issuer or if the actions of the issuer violate the investment thesis of owning the security (or, in another words, the original reasoning for purchasing the security), when the portfolio managers finds other attractive securities that the portfolio manager believes are less expensive and offer relatively greater income or growth potential, and in response to macro level adjustments to duration and yield curve contributions (which are changes made to portfolio duration or yield curve positioning due to changes in the portfolio manager's macroeconomic outlook).

The Fund may invest in certain types of derivative instruments for hedging and investment purposes. Although the Fund may invest in derivatives of any kind, the Fund currently expects to invest in futures contracts to gain efficient investment exposures as an alternative to cash investments or to hedge against portfolio exposures, and credit default swaps, interest rate swaps, inverse floater securities, and interest-only and principal-only securities to gain indirect exposure to interest rates, issuers, currencies, or market sectors, or to hedge against portfolio exposures.

**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.

**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.

**Credit Risk:** The possibility that an issuer cannot make timely interest and principal payments on its debt securities such as bonds. The lower a security's rating, the greater its credit risk. Changes in actual or perceived creditworthiness may occur quickly.

**Income Risk:** The possibility that the Fund's income will decline due to a decrease in interest rates. Income risk is generally higher for shorter-term bonds and lower for longer-term bonds.

**Fixed Income Market Risk:** Fixed income securities markets may, in response to governmental intervention, economic or market developments (including potentially a reduction in the number of broker-dealers willing to engage in market-making activity), or other factors, experience periods of increased volatility and reduced liquidity.

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

**Liquidity Risk:** The possibility that certain securities or derivatives may be difficult or impossible to sell at the time and the price that would normally prevail in the market. The seller may have to lower the price, sell other securities instead or forego an investment opportunity, any of which could have a negative effect on Fund management or performance.

**Estimated Maturity Risk:** The possibility that an underlying security holder will exercise its right to pay principal on an obligation earlier or later than expected. This may happen when there is a rise or fall in interest rates. These events may shorten or lengthen the duration (*i.e.*, interest rate sensitivity) and potentially reduce the value of these securities.

**Prepayment/Call Risk:** When mortgages and other obligations are prepaid and when securities are called, the Fund may have to reinvest in securities with a lower yield or fail to recover additional amounts (*i.e.*, premiums) paid for securities with higher interest rates, resulting in an unexpected capital loss. Call risk is the possibility that, during periods of declining interest rates, a bond issuer will "call" — or repay — higher-yielding bonds before their stated maturity date. In both cases, investors receive their principal back and are typically forced to reinvest it in bonds that pay lower interest rates.

**U.S. Government Securities Risk:** The Fund invests in securities issued or guaranteed by the U.S. government or its agencies or instrumentalities (such as Fannie Mae or Freddie Mac securities). Although U.S. government securities issued directly by the U.S. government are guaranteed by the U.S. Treasury, other U.S. government securities issued by an agency or instrumentality of the U.S. government may not be. No assurance can be given that the U.S. government would provide financial support to its agencies and instrumentalities if not required to do so by law.

**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.

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| | | |
|:---|:---|:---|
| **Summary Prospectus** | 2 of 4 | **Sterling Capital Quality Income Fund** |

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**Derivatives Risk:** The possibility that the Fund will suffer a loss from its use of derivatives. The primary risk with many derivatives is that they can amplify a gain or loss, potentially earning or losing substantially more money than the actual cost of the derivative instrument. It is possible that the Fund's liquid assets may be insufficient to support its obligations under its derivatives positions. The Fund's use of derivatives such as futures transactions and swap transactions involves other risks, such as the credit risk relating to the other party to a derivative contract (which is heightened for over-the-counter swaps and other derivatives as compared to centrally cleared derivatives), the risk of difficulties in pricing and valuation, and the risk that changes in the value of a derivative may not correlate perfectly with relevant assets, rates or indices. There is also the risk that the Fund may be unable to terminate or sell a derivatives position at an advantageous time or price.

**Mortgage-Backed and Asset-Backed Securities Risk:** Mortgage-backed and other asset-backed securities may be particularly sensitive to changes in prevailing interest rates. Rising interest rates tend to extend the duration of mortgage-backed securities, making them more sensitive to changes in interest rates, and may reduce the market value of the securities. Mortgage-backed securities are also subject to pre-payment risk. Due to their often complicated structures, various mortgage-backed and asset-backed securities may be difficult to value and may constitute illiquid securities. Furthermore, debtors may be entitled to the protection of a number of state and federal consumer protection credit laws with respect to these securities, which may give the debtor the right to avoid or reduce payment.

**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.

**Private Placement Risk:** Privately issued securities are restricted securities that are not publicly traded, and may be less liquid than those that are publicly traded. Accordingly, the Fund may not be able to redeem or resell its interests in a privately issued security at an advantageous time or at an advantageous price which may result in a loss to the Fund.

**Mortgage Dollar Roll Risk:** The use of mortgage dollar rolls is a speculative technique involving leverage, and can have an economic effect similar to borrowing money for investment purposes. Mortgage dollar roll transactions involve the risk that the market value of the securities the Fund is required to purchase may decline below the agreed upon repurchase price of those securities. If the broker/dealer to whom the Fund sells securities becomes insolvent, the Fund's right to purchase or repurchase securities may be restricted. Successful use of mortgage dollar rolls may depend upon the ability to correctly predict interest rates and prepayments. These transactions may increase the Fund's portfolio turnover rate.

**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.

**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 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.*

&nbsp;&nbsp;**Institutional Shares Annual Total Returns for years ended 12/31<sup>(1)</sup>**<br>

![](fp0081483-44_qif3.jpg)

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| | | |
|:---|:---|:---|
| Best quarter:  | 2.41% | 06/30/2019 |
| Worst quarter:  | -3.99% | 03/31/2022 |

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&nbsp;&nbsp;**Average Annual Total Returns** as of December 31, 2022<br>

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| | | | |
|:---|:---|:---|:---|
|  | **1 <br> Year**  | **5 <br> Years**  | **10<br> Years** |
| &nbsp;&nbsp;**Institutional Shares<sup>(1)</sup>** |  |  |  |
| &nbsp;&nbsp;Return Before Taxes  | -9.03% | 0.29% | 1.28% |
| &nbsp;&nbsp;Return After Taxes on Distributions  | -9.87% | -0.76% | 0.11% |
| &nbsp;&nbsp;Return After Taxes on Distributions and Sale of Fund Shares  | -5.33% | -0.19% | 0.47% |
| &nbsp;&nbsp;**Bloomberg U.S. Mortgage Backed Securities Index** |  |  |  |
| &nbsp;&nbsp;(reflects no deductions for fees, expenses, or taxes)  | -11.81% | -0.53% | 0.74% |

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<sup>(1)</sup> Performance of Institutional Shares for periods prior to February 1, 2013 is based on the performance of Class S Shares of the Fund which were redesignated as Institutional Shares as of February 1, 2013.

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. After-tax returns

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| | | |
|:---|:---|:---|
| **Summary Prospectus** | 3 of 4 | **Sterling Capital Quality Income Fund** |

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are not relevant to investors who hold their Fund shares through tax-advantaged arrangements such as 401(k) plans or individual retirement accounts.

**Management** 

**Investment Adviser** 

Sterling Capital Management LLC

**Portfolio Managers** 

Michael Z. Sun, CFA<br> Executive Director of Sterling Capital and Co-Portfolio Manager<br> Since February 2014

Jeffrey D. Ormsby, CFA<br> Executive Director of Sterling Capital and Co-Portfolio Manager<br> Since February 2016

Byron G. Mims, CFA<br> Executive Director of Sterling Capital and Co-Portfolio Manager<br> Since February 2016

**Purchase and Sale of Fund Shares**

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**Account Type**  | **Minimum <br> Initial <br> Investment\*** | **Minimum <br> Subsequent <br> Investment**  |
| &nbsp;&nbsp;Regular Account | $1000000  | $0  |
| &nbsp;&nbsp;Automatic Investment Plan | $1000000 | $25 |

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\* Investors purchasing shares through Truist Bank, its affiliates or other financial service providers or intermediaries approved by the Fund and other investors approved by the Fund are not subject to a minimum initial investment requirement.

You may buy or sell Institutional Shares of the Fund through procedures established by the Fund in connection with the requirements of fiduciary, advisory, agency, custodial and other similar accounts maintained by or on behalf of customers of Truist Bank or one of its affiliates or other financial service providers or intermediaries approved by the Fund. These parties are responsible for transmitting orders by close of business. Institutional Shares are available for purchase on any business day when the New York Stock Exchange (the NYSE) is open for regular trading. Please contact your investment representative or institution or the Funds directly at 1-800-228-1872 for more information regarding purchasing, redeeming and exchanging shares. In addition, Institutional 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.

QI-I-0223

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| | | |
|:---|:---|:---|
| **Summary Prospectus** | 4 of 4 | **Sterling Capital Quality Income Fund** |

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