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Total Return Bond Fund

Mutual Funds

Total Return Bond Fund


Fund Managers

Photo of Mark  Montgomery

Mark Montgomery, CFA®

Photo of Peter  Brown

Peter Brown, CFA®

Overview

R6
Shares

STRDX

Inception
Date

02.01.2018

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 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 09.30.2023

Term QTR YTD 1 Year 3 Years 5 Years 10 Years Since Inception
A Shares with 2.00% Sales Charge -5.12% -2.96% -1.64% -5.62% -0.17% 1.17% 3.72%
A Shares without Sales Charge -3.17% -0.95% 0.41% -4.98% 0.23% 1.37% 3.80%
Institutional Shares -3.10% -0.76% 0.78% -4.74% 0.51% 1.62% 4.06%
Lipper Core Bond Median -3.08% -0.92% 0.76% -5.13% 0.08% 1.12% 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 09.30.2023

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.

Effective Duration as of 09.30.2023

Name Value
0-1 Yr. 5.0
1-2 Yr. 5.0
2-3 Yr. 10.0
3-5 Yr. 20.0
5-10 Yr. 45.0
10+ Yr. 13.0

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

Summary Statistics as of 09.30.2023

Name Value
Number of Holdings 336
Average Life 9.00 Years
Effective Duration 6.24 Years
Annual Turnover 52%

Portfolio Composition as of 09.30.2023

Composition Fund Index
Corporate 24.3% 24.7%
    Financial Institutions 9.4% 8.3%
    Industrial 12.0% 14.3%
    Utility 2.8% 2.1%
Government Related 5.7% 5.1%
    Agency 0.8% 1.9%
    Local Authority 4.9% 0.8%
Securitized 52.9% 28.9%
    ABS 10.7% 0.5%
    CMBS 12.5% 1.7%
    CMO 2.3% 0.0%
    MBS Passthrough 27.4% 26.6%
Treasury 16.5% 41.3%
    Treasury 16.5% 41.3%
Cash 0.6% 0.0%
    Cash 0.6% 0.0%

Top Ten Holdings as of 09.30.2023

# Company Name Value
1 U.S. Treasury 4.125% 15-Nov-2032 9.02%
2 U.S. Treasury 2.5% 15-Feb-2045 4.62%
3 U.S. Treasury 1.375% 15-Aug-2050 1.91%
4 OneMain Financial 2021-1 1.55% 16-JUN-2036 1.79%
5 Hertz III SERIES 2021-2 1.68% 25-DEC-2027 1.37%
6 FNMA 30Y #FS1475 3.500% 01-Apr-2052 1.29%
7 OneMain Direct 2023-1 5.41% 14-NOV-2029 1.27%
8 FHLMC 30Y #SD3107 4.000% 01-Mar-2053 1.08%
9 FREDDIE MAC REMICS 1.02%
10 FNMA 30Y #FS1185 3.500% 01-Apr-2052 1.01%

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

Growth of $10,000 as of 09.30.2023

The Growth of $10,000 is hypothetical based upon the performance of net A Shares at NAV for the period ended 09.30.2023. It includes the reinvestment of dividends and capital gains.

Distribution

Monthly Dividend Distribution as of 11.30.2023

Month Class A Shares Class C Shares Class Inst'l Shares Class R6 Shares
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
April 2023 $0.0235 $0.0178 $0.0255 $0.0263
March 2023 $0.0238 $0.0179 $0.0257 $0.0265
February 2023 $0.0218 $0.0164 $0.0236 $0.0243
January 2023 $0.0220 $0.0161 $0.0240 $0.0248
December 2022 $0.0219 $0.0160 $0.0239 $0.0247

30-Day SEC Yield as of 10.31.2023

Share Class Without Waivers With Waivers
Class A 4.30% 4.35%
Class C 3.64% 3.68%
Class I 4.61% 4.65%
Class R6 4.64% 4.70%

Fixed Income Funds

Insights

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12.01.2023

Sterling Capital Announces Liquidation of the Diverse Multi-Manager Active ETF

Sterling Capital Announces Liquidation of the Diverse Multi-Manager Active ETF

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11.29.2023 • Robert Brown, CFA®

High Yield - The Incredible Shrinking Asset Class and the Imminent Fall of the Zombies

The high-yield bond market has been having a relatively good 2023 as technicals remain firm and the feared recession has so far failed to materialize. Through mid-November, the ICE BofA U.S. High Yield Index has generated 7.8% total return year to date and a 6.4% return in excess of duration matched Treasuries. We see a mixed picture for the asset class ahead as all in yields remain attractive, while challenges are increasing as a maturity wall looms.

11.28.2023 • Charles Wittmann, CFA®

The Lead - "Pursuing Sustainable Success"

- As investors, we want our clients to have sustained success, and that means investing in dividend-paying stocks that have a capacity to pay attractive and sustainably-growing dividends. - In the current market environment, we believe those companies are becoming increasingly scarce. - Declining dividend payments in the Energy sector have been a key contributor to the overall decline in S&P 500 dividend growth and we discuss the challenges. - We prefer companies that have rising cash flows that provide more sustainable dividend growth that may position our clients for sustained success.

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11.02.2023 • Andrew Richman, CTFA

No Surprises from the Fed

Markets breathed a sigh of relief following this week's FOMC meeting as the current fed funds rate remained unchanged. Senior Fixed Income Specialist Andy Richman, CTFA, shares his views.

10.31.2023 • Charles Wittmann, CFA®

The Lead - "Balance Sheet Season"

- Rising interest costs are causing companies that fund their businesses through borrowing to reassess their priorities. - By investing in quality companies that we feel generate higher-than-average returns on capital, we believe they have more control over their business and do not depend on excessive debt to fund it. - Dividend payers themselves offer evidence of financial strength and financial health by demonstrating the ability to reward their shareholders with cash proceeds from their business each quarter. - Historically, this is why dividend payers tend to outperform later in an interest rate tightening cycle, as seen in the chart above.

10.03.2023 • Charles Wittmann, CFA®

The Lead - "Rising Tide"

- In a period of rising interest costs, wages, and energy costs, double-digit dividend growers have outperformed in 2023. - The largest dividend growers are also outpacing high dividend yielders in 2023. - Higher dividend growers are being rewarded in part for their ability to return more cash to their shareholders than slower growth peers. - We believe owning quality companies that earn returns on capital well above their cost of capital have the potential do well in this new environment.

Contact

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