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Total Return Bond Fund

Mutual Funds

Total Return Bond Fund

Overall Morningstar Rating™
Morningstar Category: Intermediate-Term Bond

4 Star Overall Rating

Based on risk-adjusted BIBTX returns among 430 funds as of 04.30.2024.

Overview

I
Shares

BIBTX

Inception
Date

12.02.1999

Investment
Min.

$1,000,000

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.

For the period ended 12.31.2023 (BIBTX)

Winner of an IBD Best U.S. Taxable Bond Fund Award

An IBD Best U.S. Taxable Bond Fund Award is awarded to all funds in the Morningstar Fund universe that are at least at least 10 years old and that outperformed the Bloomberg U.S. Aggregate Bond Index for the trailing one-, three-, five-, and ten-year time periods.

IBD uses the following methodology each year to compile the IBD Best Mutual Funds report: Using data provided by Morningstar, IBD looks at all the mutual funds with at least a 10-year track record. From this, the total number of eligible funds are determined. Eligible funds are those open at least 10 years. The winning funds are only those that outperform their benchmark for the past one, three, five, and 10 years. Morningstar rankings are not used in the methodology. Morningstar’s data does not factor in sales charges or waivers. All investments carry a certain degree of risk, including possible loss of principal. All returns are as of Dec. 31, 2023.

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 5 to 7 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.

Fund Facts

Term Class A Shares Class C Shares Class I Shares Class R6 Shares
Ticker BICAXBICCXBIBTXSTRDX
Inception Date 12.02.199902.01.200112.02.199902.01.2018
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.

Total Return 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 03.31.2024

Term QTR YTD 1 Year 3 Years 5 Years 10 Years Since Inception
A Shares with 2.00% Sales Charge -2.45% -2.45% 0.19% -3.19% 0.23% 1.48% 3.90%
A Shares without Sales Charge -0.48% -0.48% 2.22% -2.55% 0.63% 1.68% 3.98%
Institutional Shares -0.41% -0.41% 2.37% -2.34% 0.88% 1.93% 4.23%
Lipper Core Bond Median 6.77% 5.76% 5.76% -3.44% 1.18% 1.77% N/A

The total expense ratios for Class A, C and I Shares are 0.70%, 1.45% and 0.45%, respectively. The gross expense ratio for Class R6 Shares is 0.45%. The net expense ratio for Class R6 Shares is 0.35%.

The Fund Administrator, Sterling Capital Management LLC, has contractually agreed to waive its administrative fees, pay Fund operating expenses, and/or reimburse the Fund .10% 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 Total Return 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 12.02.1999. The inception date for Class C Shares is 02.01.2001. The inception date for Class Inst'l Shares is 12.02.1999. The inception date for Class R6 Shares is 02.01.2018. The performance of Class C Shares is adjusted to reflect the 1% contingent deferred sales charge. 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. 3.50
1-2 Yr. 3.40
2-3 Yr. 11.80
3-5 Yr. 22.00
5-10 Yr. 46.70
10+ Yr. 12.60

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 383
Average Life 8.84 Years
Effective Duration 6.19 Years
Annual Turnover 53%

Portfolio Composition as of 03.31.2024

Composition Fund Index
Corporate 28.6% 25.6%
     Financial Institutions 12.3% 8.5%
     Industrial 13.2% 14.8%
     Utility 3.1% 2.3%
Government Related 3.8% 2.5%
     Agency 0.6% 1.7%
     Local Authority 3.2% 0.8%
Securitized 49.4% 28.7%
     MBS 0.4% 0.0%
     ABS 8.8% 0.5%
     CMBS 10.0% 1.6%
     CMO 3.4% 0.0%
     MBS Passthrough 26.9% 26.6%
Treasury 17.8% 43.2%
     Treasury 17.8% 43.2%
Cash 0.4% 0.0%
     Cash 0.4% 0.0%

Top Ten Holdings as of 03.31.2024

# Company Name Value
1 U.S. Treasury 4.125% 15-Nov-2032 10.89%
2 U.S. Treasury 2.5% 15-Feb-2045 4.38%
3 Fnma 30Yr Pool#Cb7124 6.000% 01-Sep-2053 1.43%
4 Onemain Financial Issuance Trust 2021-1 1.55% 16-Jun-2036 1.30%
5 U.S. Treasury 4.0% 15-Feb-2034 1.16%
6 Fnma 30Yr Pool#Fs4929 5.000% 01-May-2053 1.15%
7 Fhlmc 30Yr Pool#Sd2774 5.500% 01-Mar-2053 1.13%
8 Hertz Vehicle Financing Iii Series 2021-2 1.68% 25-Dec-2027 0.99%
9 Fnma 30Yr Pool#Fs1475 3.500% 01-Apr-2052 0.91%
10 Onemain Direct Auto Receivables Trust 2023-1 5.41% 14-Nov-2029 0.90%

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 04.30.2024

Month Class A Shares Class C Shares Class Inst'l Shares Class R6 Shares
April 2024 $0.0291 $0.0236 $0.0311 $0.0323
March 2024 $0.0291 $0.0233 $0.0311 $0.0319
February 2024 $0.0277 $0.0222 $0.0295 $0.0303
January 2024 $0.0284 $0.0225 $0.0303 $0.0311
December 2023 $0.0279 $0.0221 $0.0299 $0.0307
November 2023 $0.0275 $0.0220 $0.0293 $0.0301
October 2023 $0.0278 $0.0223 $0.0297 $0.0304
September 2023 $0.0262 $0.0207 $0.0281 $0.0288
August 2023 $0.0267 $0.0209 $0.0286 $0.0294
July 2023 $0.0259 $0.0201 $0.0279 $0.0286
June 2023 $0.0246 $0.0190 $0.0266 $0.0274
May 2023 $0.0247 $0.0187 $0.0267 $0.0274

30-Day SEC Yield as of 03.31.2024

Share Class Without Waivers With Waivers
Class A 3.93% 3.96%
Class C 3.27% 3.29%
Class I 4.26% 4.29%
Class R6 4.26% 4.34%

Fixed Income Funds

Insights

05.07.2024 • Charles Wittmann, CFA®

The Lead - "Dividends for Offense and Defense"

- What could be a catalyst for dividend yielding equities in 2024? - We discuss three considerations: inexpensive valuations relative to history; valuations for dividend yield versus growth; and how both have a history of performing well after positive economic surprises. - Why do dividend payers perform well as the economy surprises to the upside? We provide several possible reasons.

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.

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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®

The Lead - "Actively Aware"

- 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.

Contact

Learn more about Sterling Capital solutions and services.

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