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 | -2.16% | -2.16% | 0.28% | -2.50% | -0.09% | 1.28% | 1.59% |
| A Shares without Sales Charge | -0.20% | -0.20% | 2.30% | -1.83% | 0.31% | 1.48% | 1.75% |
| Institutional Shares | -0.14% | -0.14% | 2.67% | -1.58% | 0.56% | 1.74% | 1.98% |
| Lipper U.S. Mortgage Median | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
The gross expense ratios for Class A, C and I Shares are 0.88%, 1.63% and 0.63%, respectively. The net expense ratios for Class A, C and I Shares are 0.84%, 1.59% and 0.59%, respectively.
The Advisor has contractually agreed to limit certain fees paid by the Fund from February 1, 2021 through January 31, 2022. 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 Securitized Opportunities 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. Performance for Class A Shares, Class C Shares and Institutional Shares for periods prior to inception on February 1, 2013 is based on performance of Class S Shares of the Fund which were re-designated as Institutional Shares as of February 1, 2013. Class A Shares, Class C 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. The performance shown reflects the reinvestment of all dividend and capital gains distributions.
Characteristics
Quality Breakdown as of 12.31.2023
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. | 7.0 |
| 1-2 Yr. | 6.0 |
| 2-3 Yr. | 13.0 |
| 3-5 Yr. | 21.0 |
| 5-10 Yr. | 44.0 |
| 10+ Yr. | 6.0 |
Current and future portfolio holdings are subject to change and risk. Based on Market Value of securities.
| Name | Value |
|---|---|
| Number of Holdings | 232 |
| Average Life | 7.02 Years |
| Effective Duration | 5.03 Years |
| Annual Turnover | 20% |
| Composition | Fund | Index |
|---|---|---|
| Government Related | 0.5% | 0.0% |
| Agency | 0.5% | 0.0% |
| Securitized | 93.2% | 100.0% |
| MBS | 0.5% | 0.0% |
| ABS | 15.5% | 0.0% |
| CMBS | 18.2% | 0.0% |
| CMO | 23.5% | 0.0% |
| MBS Passthrough | 35.5% | 100.0% |
| Treasury | 5.3% | 0.0% |
| Treasury | 5.3% | 0.0% |
| [Cash] | 1.0% | 0.0% |
| [Cash] | 1.0% | 0.0% |
| # | Company Name | Value |
|---|---|---|
| 1 | U.S. Treasury 2.375% 15-Feb-2042 | 1.97% |
| 2 | Fhlmc 30Yr Pool#Sd3223 6.000% 01-Jul-2053 | 1.53% |
| 3 | Fnma, Series 2017-42, Class Hl | 1.51% |
| 4 | Onemain Direct Auto Trust 2023-1 5.41% 14-Nov-2029 | 1.49% |
| 5 | Avis Budget Rental Car (Aesop) Llc 5.49% 20-Jun-2029 | 1.42% |
| 6 | Fhlmc 30Yr Pool#Sd2952 4.500% 01-May-2053 | 1.40% |
| 7 | U.S. Treasury 0.625% 15-May-2030 | 1.39% |
| 8 | Fnma 30Yr Pool#Fs1976 4.000% 01-Aug-2051 | 1.34% |
| 9 | Hertz Vehicle Financing 2021-2 1.68% 25-Dec-2027 | 1.32% |
| 10 | Fhlmc 30Yr Pool#Sd1515 4.500% 01-Aug-2052 | 1.25% |
Current and future portfolio holdings are subject to change and risk. Based on Market Value of securities.
Growth of $10,000 as of 12.31.2023
The Growth of $10,000 is hypothetical based upon the performance of net A Shares at NAV for the period ended 12.31.2023. It includes the reinvestment of dividends and capital gains.
Distribution
| Month | Class A Shares | Class C Shares | Class Inst'l Shares |
|---|---|---|---|
| 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 |
| November 2023 | $0.0230 | $0.0183 | $0.0248 |
| October 2023 | $0.0229 | $0.0187 | $0.0247 |
| September 2023 | $0.0221 | $0.0173 | $0.0239 |
| August 2023 | $0.0220 | $0.0163 | $0.0239 |
| July 2023 | $0.0216 | $0.0158 | $0.0234 |
| June 2023 | $0.0213 | $0.0161 | $0.0232 |
| May 2023 | $0.0208 | $0.0154 | $0.0228 |
| April 2023 | $0.0202 | $0.0151 | $0.0221 |
| Share Class | Without Waivers | With Waivers |
|---|---|---|
| Class A | 3.26% | 3.31% |
| Class C | 2.55% | 2.60% |
| Class I | 3.58% | 3.63% |
Quality Income Fund
Materials
Fixed Income Funds
Insights
04.04.2024 • Charles Wittmann, CFA®
The Lead - "Seeking Advantaged Economies of Scale"
- One important advantage we seek in large capitalization stocks is having dominant market shares that provide economies of scale. - Economies of scale may make a company more profitable and earn higher returns on its capital than its competitors. - We believe it is possible to identify companies that gain scale, market share, and returns at the expense of competitors. - As we have stated for close to two decades as part of our investment philosophy, we believe size usually translates into cost advantages in production, marketing, and research and development expenditures that can be re-invested back into the business, making such advantages sustainable.
03.05.2024 • Charles Wittmann, CFA®
The Lead - "Advantaged Market Share"
- What makes an advantaged company? - In our view, one notable characteristic of an advantaged company is growing its market share. - Simply put, we believe companies with greater market share are more profitable. - We seek to field a portfolio of advantaged companies with strong and potentially growing market shares to position our clients to win.
03.01.2024
4Q23 Equity Income SMA Review and Outlook
The 4Q23 Equity Income SMA Review and Outlook reviews performance, holdings, and dividend growth within the strategy.
03.01.2024 • Shane Burke
The Federal Reserve During an Election Year - March 2024
2024 is expected to be one of the biggest election years in history, with more than 60 countries representing approximately half of the world’s population heading to the polls. The year will include multi-day legislative elections in India (the largest population in the world), Indonesia’s presidential election (the world’s largest single-day vote), and the globally-anticipated U.S. presidential election.
02.06.2024 • Charles Wittmann, CFA®
- By utilizing our investment process and our investment team, we believe we can build portfolios different from the benchmark and provide an opportunity to generate returns above the benchmark over time. - Ironically, many passive indexes make active bets themselves. In 2023, the S&P 500 Dividend Aristocrats suffered its worst performance relative to the S&P 500® Index since 1999. - We’ve believed for over 20 years that portfolio managers with material amounts of their net worth invested alongside clients incentivizes portfolio diversification and active adjustments, rather than a static index where there is no vested interest. Our mission is to generate above-average returns with below-average risk over time.
02.02.2024
Sterling Capital Management LLC to be acquired by Guardian Capital Group Limited
We are delighted to announce that Guardian Capital Group Limited has reached an agreement under which Guardian’s wholly-owned subsidiary Guardian Capital LLC will acquire Sterling Capital from Truist. Post-closing, Sterling Capital will become an independently-operated subsidiary of Guardian.
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