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Neuberger Berman Equity Income C NBHCX

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Morningstar’s Analysis

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Neuberger Berman Equity Income Gets New Prospectus Benchmark; Ratings Unchanged

Analyst Note

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On April 1, 2022, Neuberger Berman Equity Income switched its prospectus benchmark to the Russell 1000 Value Index from the S&P 500. This better reflects the strategy's value orientation; indeed, the Russell 1000 Value is the index for the large-value Morningstar Category, the strategy's long-standing home. The Russell 1000 Value also more closely approximates the strategy's sector exposures. For example, its 8% net technology stake in February 2022 was well below the S&P 500's 26% but not far from the Russell 1000 Value's 9%. The Russell index's expected dividend yield was higher than the S&P's--2.2% vs. 1.5%--but this strategy bested both at nearly 3.0%. Yet, investors shouldn't expect significant portfolio changes here, given that the managers don't tie their portfolio closely to their official benchmark. Thus, the strategy's Morningstar Analyst Ratings remain in place.

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