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Ultra Short Bond Fund

Mutual Funds

Ultra Short Bond Fund


Fund Managers

Photo of Mark  Montgomery

Mark Montgomery, CFA®

Photo of Byron  Mims

Byron Mims, CFA®

Photo of Jeffrey  Ormsby

Jeffrey Ormsby, CFA®

Overview

A
Shares

BUSRX

Inception
Date

11.30.2012

Investment
Min.

$1,000

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.

Philosophy & Process

To pursue its investment objective, the Fund invests, under normal circumstances, at least 80% of its net assets plus borrowings for investment purposes in fixed income securities (bonds). The Fund will maintain an average duration of 18 months or less and the average maturity is expected to be between zero and 24 months.

In managing the portfolio, the portfolio manager uses a "top down" investment management approach focusing on allocation among sectors, credit risk, and individual securities selection. The portfolio manager focuses on macro trends in the economy to establish a duration target that reflects the outlook for the future direction of interest rates. For yield curve management, in addition to the trend in interest rates, other factors such as future inflation expectations, supply factors, and future interest rate expectations are considered. Sector weightings are driven by a combination of the portfolio manager's macro view on interest rates and volatility as well as relative spread analysis. Utilizing fundamental analysis the portfolio manager then selects individual securities consistent with the target by looking for the best relative values within particular sectors. The analysis includes an attempt to understand the structure and embedded features of potential securities. Features that are analyzed include puts, calls, sinking fund requirements, prepayment and extension risk, and individual company financial data for potential corporate holdings. Scenario analysis is the primary tool employed for these assessments.

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; mortgage-backed and asset-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. The Fund invests in securities issued or guaranteed by the U.S. government or its agencies. These guarantees do not apply to the Fund. Investments in municipal obligations may be subject to more risk depending on economic, political and other conditions within the state and municipality. The Fund may trade securities actively, which could increase its transaction costs thereby lowering its performance.

Fund Facts

Term Class A Shares Class I Shares
Ticker BUSRXBUSIX
Inception Date 11.30.201211.30.2012
Investment Min. $1,000$1,000,000
Subsequent Investment Min.2 N/AN/A
Max. Up Front Sales Charge N/AN/A
Max. Deferred Sales Charge N/AN/A

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

Ultra Short Bond Fund

Management

View professional designations disclosures

Photo of Mark  Montgomery

Mark Montgomery, CFA®

Co-Portfolio Manager

Photo of Byron  Mims

Byron Mims, CFA®

Co-Portfolio Manager

Photo of Jeffrey  Ormsby

Jeffrey Ormsby, CFA®

Co-Portfolio Manager

Performance

Fund Performance as of 03.31.2025

Term QTR YTD 1 Year 3 Years 5 Years 10 Years Since Inception
A Shares with 0.50% Sales Charge 1.47% 3.21% 5.81% 2.89% 2.36% 1.75% 1.53%
A Shares without Sales Charge 1.11% 1.11% 5.34% 4.41% 3.14% 2.08% 1.73%
Institutional Shares 1.18% 1.18% 5.60% 4.64% 3.38% 2.34% 1.98%
Lipper Ultra-Short Obligations Median 1.18% 1.18% 5.45% 4.47% 3.14% 2.16% N/A

The total expense ratios for Class A and I Shares are 0.67% and 0.42%, respectively.

The Advisor has contractually agreed to limit certain fees paid by the Fund from 02.01.2025-01.31.2026. 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 Ultra Short 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 11.30.2012. The inception date for Class Inst'l Shares is 11.30.2012. The performance shown reflects the reinvestment of all dividend and capital gains distributions. Performance is annualized for periods greater than one year.

Characteristics

Quality Breakdown as of 03.31.2025

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 Breakdown as of 03.31.2025

Name Value
1.5-2.0 Years 2.93
2.0+ Years 3.19

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

Summary Statistics as of 03.31.2025

Name Value
0.0-0.5 Year 51.35%
0.5-1.0 Year 29.86%
1.0-1.5 Year 12.67%
Number of Holdings 121
Average Life 0.88 Years
Effective Duration 0.53 Years
Annual Turnover 69%

Portfolio Composition as of 03.31.2025

Composition Fund Index
Corporate 42.2% 0.0%
    Financial Institutions 26.1% 0.0%
    Industrial 13.8% 0.0%
    Utility 2.2% 0.0%
Government Related 0.6% 0.0%
    Local Authority 0.6% 0.0%
Securitized 52.1% 0.0%
    ABS 33.1% 0.0%
    ARM 0.8% 0.0%
    CLO 2.7% 0.0%
    CMBS 14.5% 0.0%
    CMO 1.0% 0.0%
Treasury 3.0% 100.0%
    Treasury 3.0% 100.0%
Cash 2.2% 0.0%
    Cash 2.2% 0.0%

Top Ten Holdings as of 03.31.2025

# Company Name Value
1 Enterprise Ser. 2022-1 3.27% 20-Jan-2028 1.98%
2 U.S. Treasury 0.0% 01-Apr-2025 1.82%
3 Wells Fargo & Co. 3.908% 25-Apr-2026 1.48%
4 CSAIL 2015-C4 CMT 3.808% 18-Nov-2048 1.45%
5 Citigroup CMT 2016-P3 3.063% 16-Apr-2049 1.44%
6 OCP CLO 2014-5 Ltd 1.40%
7 OneMain Fin. 2022-3 5.94% 15-May-2034 1.35%
8 Tricon Residential SRF1 5.4% 18-Mar-2030 1.35%
9 Lloyds PLC 4.582% 10-Dec-2025 1.34%
10 Avis 2020-2 2.02% 20-Feb-2027 1.34%

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

Growth of $10,000 as of 03.31.2025

The Growth of $10,000 is hypothetical based upon the performance of net A Shares at NAV for the period ended 03.31.2025. It includes the reinvestment of dividends and capital gains.

Distribution

Monthly Dividend Distribution as of 04.30.2025

Month Class A Shares Class Inst'l Shares
April 2025 $0.0317 $0.0338
March 2025 $0.0340 $0.0362
February 2025 $0.0321 $0.0340
January 2025 $0.0332 $0.0353
December 2024 $0.0349 $0.0370
July 2024 $0.0369 $0.0393
June 2024 $0.0369 $0.0389
May 2024 $0.0391 $0.0412

30-Day SEC Yield as of 04.30.2025

Share Class Without Waivers With Waivers
Class A 4.04% 4.18%
Class I 4.29% 4.43%

Fixed Income Funds

Insights

05.07.2025 • Charles Wittmann, CFA®

The Lead - Follow the Money

- We believe the inputs that create the ability for a company to pay dividends is of critical importance, especially if the economic environment becomes challenging.
- Starting in the later part of 2024, aggregate Bloomberg estimated earnings for the S&P 500® Index began to moderate then decline.
- While dividend payout ratios have improved, we would note that the rate of the market’s dividend growth has fallen almost 50%, to mid-single digits, since 2022.
- We believe more tempered growth expectations and companies signaling greater caution by moderating their commitment to return cash to shareholders via dividends is our sign to remain vigilant on the fundamental sources that generate dividend growth.

04.03.2025 • Charles Wittmann, CFA®

The Lead - Resilient Quality

- Economic sectors associated with value stocks, such as industrials and financials, have seen their quality measurements improve.
- With slowing economic growth and persistent inflation leading to “stagflation” concerns, what type of equity investments tend to shine?
- We show how quality companies that pay dividends and repurchase their shares have differentiated themselves in similar periods.

03.21.2025 • Andrew Richman, CTFA

Fed Lowers Growth Outlook But Raises Inflation Expectations

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

03.07.2025 • Charles Wittmann, CFA®

The Lead - Raising the Bar

- For the past two years, investors have experienced a powerful price momentum-driven market.
- Price momentum supported by earnings revisions typically have a tight relationship coming out of a recession, but 2024 was different.
- We explore the recent inverse relationship between momentum and dividend payers over this month and the past year.

preview of document

02.28.2025

Sterling Capital Equity Announcement

Today Sterling Capital Management LLC announced the firm has made the difficult decision to close the Mid Cap Fundamental Value investment strategy.

02.04.2025 • Charles Wittmann, CFA®

The Lead - Looking for More

- This month, our discussions with clients involved their search for fast dividend growers in the value space.
- We analyze the fastest dividend growers in the large cap value universe and ask if they are really growing their dividends or just reinstating them.
- We note how we look for both dividend growth and differentiated securities that combine attractive elements of growth, yield, and risk-adjusted returns.

Contact

Learn more about Sterling Capital solutions and services.

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