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Short Duration Bond Fund

Mutual Funds

Short Duration Bond Fund


Fund Managers

Photo of Mark  Montgomery

Mark Montgomery, CFA®

Photo of Peter  Brown

Peter Brown, CFA®

Overview

R6
Shares

SHTRX

Inception
Date

02.01.2021

Investment
Min.

N/A

Subsequent
Investment Min.1

N/A

Max. Up Front
Sales Charge

N/A

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 between 1-3 years with focus on high quality and risk management
  • Have flexibility in creating higher yielding total return portfolio while reducing interest rate sensitivity, protecting principal and allowing for return potential
  • 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.

Fund Facts

Term Class A Shares Class C Shares Class I Shares Class R6 Shares
Ticker BSGAXBBSCXBBSGXSHTRX
Inception Date 11.30.199202.01.201211.30.199202.01.2021
Investment Min. $1,000$1,000$1,000,000N/A
Subsequent Investment Min.2 N/AN/AN/AN/A
Max. Up Front Sales Charge 2%N/AN/AN/A
Max. Deferred Sales Charge N/A1%N/AN/A

2If subsequent investments are made as part of an AIP, the minimum is $25.

Short Duration Bond Fund

Management

View professional designations disclosures

Photo of Mark  Montgomery

Mark Montgomery, CFA®

Co-Portfolio Manager

Photo of Peter  Brown

Peter Brown, CFA®

Co-Portfolio Manager

Performance

Fund Performance as of 06.30.2024

Term QTR YTD 1 Year 3 Years 5 Years 10 Years Since Inception
A Shares with 2.00% Sales Charge -0.94% -0.04% 3.70% 0.41% 1.34% 1.40% 3.05%
A Shares without Sales Charge 1.09% 2.01% 5.86% 1.10% 1.76% 1.61% 3.12%
Institutional Shares 1.03% 2.01% 6.12% 1.30% 1.99% 1.86% 3.36%
Lipper Short Investment Grade Median N/A N/A N/A N/A N/A N/A N/A

The total expense ratios for Class A, C, and I Shares are 0.67%, 1.42% and 0.42%, respectively. The gross expense ratio for Class R6 Shares is 0.42%. The net expense ratio for Class R6 Shares is 0.33%.

The Fund Administrator, Sterling Capital Management LLC, has contractually agreed to waive its administrative fees, pay Fund operating expenses, and/or reimburse the Fund .09% of the Class R6 average daily net assets for the period 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 Short Duration Bond 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 11.30.1992. The inception date for Class C Shares is 02.01.2012. The inception date for Class Inst'l Shares is 11.30.1992. The inception date for Class R6 Shares is 02.01.2021. Performance for Class C Shares for periods prior to inception is based on the performance of Class A Shares of the Fund. The performance shown reflects the reinvestment of all dividend and capital gains distributions.

Characteristics

Quality Breakdown as of 03.31.2024

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.

Effective Duration as of 03.31.2024

Name Value
0-1 Yr. 17.00
1-2 Yr. 39.10
2-3 Yr. 42.20
3-5 Yr. 1.70

Current and future portfolio holdings are subject to change and risk. Based on Market Value of securities.

Summary Statistics as of 03.31.2024

Name Value
Number of Holdings 126
Average Life 1.93 Years
Effective Duration 1.71 Years
Annual Turnover 58%

Portfolio Composition as of 03.31.2024

Composition Fund Index
Corporate 63.7% 26.6%
     Financial Institutions 29.3% 13.0%
     Industrial 26.7% 12.2%
     Utility 7.8% 1.4%
Government Related 1.7% 5.4%
     Agency 0.0% 4.9%
     Local Authority 1.7% 0.6%
Securitized 32.3% 0.0%
     ABS 20.5% 0.0%
     CMBS 8.4% 0.0%
     CMO 3.4% 0.0%
Treasury 1.1% 68.0%
     Treasury 1.1% 28.0%
Cash 1.2% 0.0%
     Cash 1.2% 0.0%

Top Ten Holdings as of 03.31.2024

# Company Name Value
1 World Omni Select Auto Trust 2023-A 5.65% 17-Jul-2028 2.56%
2 Enterprise Fleet Financing 2023-1 Llc 5.42% 20-Oct-2029 2.16%
3 Hertz Vehicle Financing Iii Series 2021-2 1.68% 25-Dec-2027 2.14%
4 Morgan Stanley BoA Merrill Lynch Trust 2014-C18 3.923% 18-Oct-2047 2.02%
5 Onemain Direct Auto Receivables Trust 2019-1 3.63% 14-Sep-2027 1.93%
6 Santander Drive Auto Receivabl 5.23% 15-Dec-2028 1.54%
7 Syn Card Issua Tr 2023-1 5.54% 15-Jul-2029 1.49%
8 Sales Tax Securitization Corp Ill 4.558% 01-Jan-2026 1.47%
9 Onemain Financial Issuance Trust 2022-3 5.94% 15-May-2034 1.28%
10 Ford Credit Auto Owner Trust 2020-Rev2 1.06% 15-Apr-2033 1.28%

Current and future portfolio holdings are subject to change and risk. Based on Market Value of securities.

Growth of $10,000 as of 03.31.2024

The Growth of $10,000 is hypothetical based upon the performance of net A Shares at NAV for the period ended 03.31.2024. It includes the reinvestment of dividends and capital gains.

Distribution

Monthly Dividend Distribution as of 06.30.2024

Month Class A Shares Class C Shares Class Inst'l Shares Class R6 Shares
June 2024 $0.0296 $0.0244 $0.0312 $0.0319
May 2024 $0.0318 $0.0265 $0.0335 $0.0342
April 2024 $0.0286 $0.0235 $0.0302 $0.0309
March 2024 $0.0295 $0.0242 $0.0310 $0.0319
February 2024 $0.0275 $0.0226 $0.0291 $0.0298
January 2024 $0.0281 $0.0229 $0.0298 $0.0305
December 2023 $0.0348 $0.0296 $0.0365 $0.0372
November 2023 $0.0257 $0.0208 $0.0274 $0.0280
October 2023 $0.0242 $0.0190 $0.0259 $0.0265
September 2023 $0.0236 $0.0186 $0.0253 $0.0259
August 2023 $0.0231 $0.0179 $0.0249 $0.0255
July 2023 $0.0225 $0.0173 $0.0242 $0.0249

30-Day SEC Yield as of 05.31.2024

Share Class Without Waivers With Waivers
Class A 4.61% 4.68%
Class C 3.95% 4.03%
Class I 4.96% 5.04%
Class R6 4.96% 4.98%

Fixed Income Funds

Insights

07.03.2024 • Charles Wittmann, CFA®

The Lead - "Going for Gold"

- Economic indicators such as gross domestic product and the Institute for Supply Management Manufacturing Index recently showed slowing growth, while the Consumer Price Index remains stubbornly above the Federal Reserve’s target rate. Concerns over slowing economic growth amidst higher inflation, also known as stagflation, have emerged. - In such a scenario, we would note that quality and cash deployment (dividends and share buybacks) shine in a slow growth, higher inflation environment. - The problem recently is that the slowing economy has led to a slowdown in cash returned to shareholders in the form of dividends and share buybacks by the market. - We believe in the importance of preparation for potential uphill climbs as well as the value in finding investments that raise their cash returns to shareholders.

07.02.2024

Sterling Capital Management LLC joins Guardian Capital Group Limited

Sterling Capital Management LLC announced today the completion of its acquisition by Guardian Capital LLC, a wholly-owned subsidiary of global asset manager Guardian Capital Group Limited.

07.02.2024

Sterling Capital joins Guardian Capital Group Limited

“We are thrilled to announce the completion of Sterling’s acquisition by Guardian Capital Group, a global asset manager. We are also thankful to join an organization that shares our culture and values in protecting our clients’ assets - and we are truly excited for our bright future together!” – Scott Haenni, Sr. Managing Director & CEO at Sterling Capital Management

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06.27.2024 • Jeffrey Ormsby, CFA®

Fixed Income and Federal Reserve Rate Cuts: How Should We Expect Fixed Income to Perform?

As one would expect, in most historical periods where interest rates were declining, fixed income total return has been good, with investors capturing the coupon income as well as benefiting from the increase in prices as rates fall. Looking at the history of the Bloomberg Aggregate Bond Index since 1988, in the previous five Federal Reserve (Fed) rate-cutting cycles, the index posted annualized returns averaging north of 8%.

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06.13.2024 • Andrew Richman, CTFA

When It Comes to Fed Policy, Follow the Data, Not the Dots

Andy Richman's update on the June Federal Open Market Committee meeting.

06.05.2024 • Charles Wittmann, CFA®

The Lead - "An Indicator of Business Confidence"

- Several notable companies have elected to inaugurate a quarterly dividend this year, while 47 companies in the U.S. stopped paying dividends during the COVID-19 crisis and have yet to reinstitute one. Why? - We would suggest it comes down to the ability to pay an ever-increasing dividend alongside their confidence in their business’s future. - In the current period of fewer dividend initiations, slower dividend growth in the market, and household names cutting their dividends, we believe there are several lessons to learn.

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