Mutual Funds
Quality Income Fund
Fund Managers
Michael Sun, CFA®
Jeffrey Ormsby, CFA®
Byron Mims, CFA®
Overview
A
Shares
SCSSX
Inception
Date
02.01.2013
Investment
Min.
$1,000
Subsequent
Investment Min.1
N/A
Max. Up Front
Sales Charge
2%
Max. Deferred
Sales Charge
N/A
1If subsequent investments are made as part of an AIP, the minimum is $25.
Philosophy & Process
In managing the Fund, the portfolio management team employs a multi-faceted approach to generate excess return and uses a combination of top-down and bottom-up analysis, quantitative vs. qualitative analysis and fundamentals vs. valuation. There is a strong emphasis on risk management and an adherence to certain core investment beliefs:
- "If you cannot measure it, you cannot manage it."
- Avoid unintended exposures
- Average duration around 2 to 5 years with focus on high quality and risk management
- Participate in longer term trends - don't buy on short-term trends or try to time what is going on in the market
- Attempts to achieve risk-adjusted performance over time
Investment Considerations
The Fund is subject to the same risks as the underlying bonds in the portfolio such as credit, prepayment, call and interest rate risk. As interest rates rise the value of bond prices will decline. The Fund may invest in more aggressive investments such as foreign securities which may expose the Fund to currency and exchange rate fluctuations; derivatives (futures and swaps); mortgage-backed securities sensitive to interest rates and high yield debt (also known as junk bonds), all of which may cause greater volatility and less liquidity. Derivatives may be more sensitive to changes in market conditions and may amplify risks.
| Term | Class A Shares | Class C Shares | Class I Shares |
|---|---|---|---|
| Ticker | SCSSX | SCSTX | SCSPX |
| Inception Date | 02.01.2013 | 02.01.2013 | 02.01.2013 |
| Investment Min. | $1,000 | $1,000 | $1,000,000 |
| Subsequent Investment Min.2 | N/A | N/A | N/A |
| Max. Up Front Sales Charge | 2% | N/A | N/A |
| Max. Deferred Sales Charge | N/A | 1% | N/A |
2If subsequent investments are made as part of an AIP, the minimum is $25.
Co-Portfolio Manager
Co-Portfolio Manager
Co-Portfolio Manager
Performance
| Term | QTR | YTD | 1 Year | 3 Years | 5 Years | 10 Years | Since Inception |
|---|---|---|---|---|---|---|---|
| A Shares with 2.00% Sales Charge | 2.37% | 2.70% | 8.62% | -1.04% | 0.11% | 1.56% | 1.54% |
| A Shares without Sales Charge | 4.44% | 4.76% | 10.77% | -0.39% | 0.52% | 1.77% | 1.72% |
| Institutional Shares | 4.62% | 4.95% | 11.04% | -0.13% | 0.77% | 2.02% | 2.29% |
| Lipper U.S. Mortgage Median | 5.32% | 5.16% | 12.24% | -1.20% | 0.06% | 1.32% | N/A |
The total expense ratios for Class A, C and I Shares are 0.82%, 1.57% and 0.57%, respectively.
The Advisor has contractually agreed to limit certain fees paid by the Fund from 02.01.2024-01.31.2025. Performance would have been lower without limitations in effect.
Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please visit the performance summary.
The performance of the Sterling Capital Quality Income Fund reflects the deduction of fees for value-added services associated with a mutual fund, such as investment management and fund accounting fees. The inception date for Class A Shares is 02.01.2013. The inception date for Class C Shares is 02.01.2013. The inception date for Class Inst'l Shares is 02.01.2013. The performance shown reflects the reinvestment of all dividend and capital gains distributions. Performance is annualized for periods greater than one year.
Performance for Class A Shares and Institutional Shares for periods prior to inception on 02.01.2013 is based on performance of Class S Shares of the Fund which were re-designated as Institutional Shares as of 02.01.2013. Class A Shares and Institutional Shares of the Fund would have substantially similar performance because the Shares are invested in the same portfolio of securities and the performance would differ only to the extent that the Classes have different expenses.
Characteristics
Quality Breakdown as of 09.30.2024
Credit quality ratings using Moody's rating symbols reflect the credit quality of the underlying bonds in the fund portfolio and not of the Fund itself. Moody's assigns a range of ratings from AAA being the highest quality to C being the lowest rated class of bonds. Securities not rated by Moody's may be rated by S&P, Fitch or if no agency rating is available, the Fund will assign a rating of not rated. Bond quality ratings are subject to change.
| Name | Value |
|---|---|
| 0-1 Yr. | 5.81 |
| 1-2 Yr. | 7.87 |
| 2-3 Yr. | 5.78 |
| 3-4 Yr. | 15.97 |
| 4-5 Yr. | 10.07 |
| 5-6 Yr. | 17.53 |
| 6-7 Yr. | 16.66 |
| 7-8 Yr. | 4.59 |
| 8-9 Yr. | 5.42 |
| 9-10 Yr. | 0.49 |
| 10+ Yr. | 9.81 |
Current and future portfolio holdings are subject to change and risk. Based on Market Value of securities.
| Name | Value |
|---|---|
| Number of Holdings | 214 |
| Average Life | 6.86 Years |
| Effective Duration | 5.30 Years |
| Annual Turnover | 10% |
| Composition | Fund | Index |
|---|---|---|
| Government Related | 0.6% | 0.0% |
| Agency | 0.6% | 0.0% |
| Securitized | 92.6% | 100.0% |
| MBS | 39.1% | 0.0% |
| ABS | 10.6% | 0.0% |
| CMBS | 18.6% | 0.0% |
| CMO | 24.3% | 0.0% |
| Treasury | 3.9% | 0.0% |
| Treasury | 3.9% | 0.0% |
| Cash | 3.0% | 0.0% |
| Cash | 3.0% | 0.0% |
| # | Company Name | Value |
|---|---|---|
| 1 | U.S. Treasury 2.375% 15-Feb-2042 | 2.35% |
| 2 | Fhlmc 30yr Pool#zt0541 4.000% 01-jun-2048 | 1.93% |
| 3 | Fhlmc 30Yr Pool Zt0541 4.000% 01-Jun-2048 | 1.67% |
| 4 | Fannie Mae Remics | 1.56% |
| 5 | U.S. Treasury 1.875% 15-nov-2051 | 1.54% |
| 6 | Fnma 30Yr Pool Fs6616 6.000% 01-Jun-2053 | 1.50% |
| 7 | Fhlmc 30Yr Pool Sd3223 6.000% 01-Jul-2053 | 1.47% |
| 8 | Fnma 30Yr Pool Ca6097 3.500% 01-Jun-2050 | 1.47% |
| 9 | Avis Budget Rental Car Funding (Aesop) Llc 5.49% 20-Jun-2029 | 1.46% |
| 10 | Fhlmc 30yr PoolRa5921 2.500% 01-sep-2051 | 1.46% |
Current and future portfolio holdings are subject to change and risk. Based on Market Value of securities.
Growth of $10,000 as of 09.30.2024
The Growth of $10,000 is hypothetical based upon the performance of net A Shares at NAV for the period ended 09.30.2024. It includes the reinvestment of dividends and capital gains.
Distribution
| Month | Class A Shares | Class C Shares | Class Inst'l Shares |
|---|---|---|---|
| July 2024 | $0.0244 | $0.0195 | $0.0263 |
| June 2024 | $0.0246 | $0.0195 | $0.0263 |
| May 2024 | $0.0245 | $0.0192 | $0.0263 |
| April 2024 | $0.0243 | $0.0193 | $0.0260 |
| March 2024 | $0.0244 | $0.0192 | $0.0263 |
| February 2024 | $0.0242 | $0.0192 | $0.0259 |
| January 2024 | $0.0235 | $0.0182 | $0.0254 |
| December 2023 | $0.0232 | $0.0181 | $0.0251 |
| Share Class | Without Waivers | With Waivers |
|---|---|---|
| Class A | 3.70% | 3.75% |
| Class C | 3.11% | 3.16% |
| Class I | 4.02% | 4.07% |
Quality Income Fund
Materials
Fixed Income Funds
Insights
12.20.2024 • Andrew Richman, CTFA
Andy Richman's update on the December Federal Open Market Committee meeting.
12.17.2024 • Peter Brown, CFA®
Video - Sterling Capital's Fixed Income Philosophy
Sterling Capital specializes in fixed income investing, and today we’re looking at the team’s philosophy with Pete Brown, Managing Director and Head of Investment-Grade Credit. Watch and gain valuable insights as Pete reveals their fixed income philosophy, emphasis on risk-management and team-managed approach.
12.12.2024 • Orton Chen, CFA®
Meet Orton Chen, Chief Investment Officer for Sterling Capital's Private Client Group
Sterling Capital is pleased to share a closer look at Orton Chen, Chief Investment Officer for our Private Client Group. In this spotlight, he shares his professional experience and advice, and the one rule he would make if he could. It’s great to have you on our team, Ort! Thank you for everything you do, and for sharing this with us.
12.10.2024 • Charles Wittmann, CFA®
- Over the past 12 months, our benchmark, the Russell 1000® Value Index, is up +29.5% as of November 30, 2024. If this year-over-year gain holds, it may be the best year for the Russell 1000 Value in over a decade. - What is interesting to us is that the return thus far in 2024 has been concentrated in the largest holdings in the index. - Where do we stand in terms of overall valuation for the index where these top companies reside? - We provide an update and observations.
11.22.2024 • Shane Burke
Meet Shane Burke, Sterling Capital Advisory Solutions Portfolio Manager
Sterling Capital is pleased to share a closer look at Shane Burke, our Advisory Solutions Portfolio Manager. In this spotlight, he shares his professional experience and advice, and his hidden talent. It’s great to have you on our team, Shane! Thank you for everything you do, and for sharing this with us.
11.18.2024 • Andrew Richman, CTFA
Fed Begins to Ease... Rates Rise?
Andy Richman's update on the November Federal Open Market Committee meeting.
Contact
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