Mutual Funds
Ultra Short Bond Fund
Fund Managers
Mark Montgomery, CFA®
Byron Mims, CFA®
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.
| Term | Class A Shares | Class I Shares |
|---|---|---|
| Ticker | BUSRX | BUSIX |
| Inception Date | 11.30.2012 | 11.30.2012 |
| Investment Min. | $1,000 | $1,000,000 |
| Subsequent Investment Min.2 | N/A | N/A |
| Max. Up Front Sales Charge | N/A | N/A |
| Max. Deferred Sales Charge | N/A | 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 0.50% Sales Charge | 1.24% | 2.61% | 5.76% | 2.71% | 2.26% | 1.69% | 1.49% |
| A Shares without Sales Charge | 1.24% | 2.61% | 5.76% | 2.71% | 2.26% | 1.69% | 1.49% |
| Institutional Shares | 1.31% | 2.74% | 6.03% | 2.93% | 2.51% | 1.94% | 1.74% |
| Lipper Ultra-Short Obligations Median | 1.35% | 2.82% | 6.07% | 2.85% | 2.29% | 1.82% | N/A |
The total expense ratios for Class A and I Shares are 0.68% and 0.43%, respectively.
The Advisor has contractually agreed to limit certain fees paid by the Fund from 02.01.2024-01.31.2025. 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 06.30.2024
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.
| Name | Value |
|---|---|
| <0.5 Yr. | 66.73 |
| 0.5-1 Yr. | 21.05 |
| 1-1.5 Yr. | 7.69 |
| 1.5-2 Yr. | 4.53 |
Current and future portfolio holdings are subject to change and risk. Based on Market Value of securities.
| Name | Value |
|---|---|
| Number of Holdings | 113 |
| Average Life | 0.59 Years |
| Effective Duration | 0.53 Years |
| Annual Turnover | 45% |
| Composition | Fund | Index |
|---|---|---|
| Corporate | 32.5% | 0.0% |
| Financial Institutions | 14.0% | 0.0% |
| Industrial | 13.1% | 0.0% |
| Utility | 5.4% | 0.0% |
| Securitized | 38.5% | 0.0% |
| ABS | 26.7% | 0.0% |
| CMBS | 8.8% | 0.0% |
| CMO | 2.9% | 0.0% |
| Treasury | 26.4% | 100.0% |
| Treasury | 26.4% | 100.0% |
| Cash | 2.6% | 0.0% |
| Cash | 2.6% | 0.0% |
| # | Company Name | Value |
|---|---|---|
| 1 | U.S. Treasury 0.0% 09-Jul-2024 | 23.64% |
| 2 | U.S. Treasury 0.0% 06-Aug-2024 | 2.69% |
| 3 | Hertz Series 2021-1 1.21% 25-Dec-2025 | 1.47% |
| 4 | Enterprise Series 2022-1 3.27% 20-Jan-2028 | 1.44% |
| 5 | Avis (Aesop) LLC 2.36% 20-Mar-2026 | 1.26% |
| 6 | Onemain Financial 2022-3 5.94% 15-May-2034 | 1.22% |
| 7 | Chesapeake Funding LLC 5.52% 15-May-2036 | 1.18% |
| 8 | Americredit 2024-1 5.75% 18-Feb-2028 | 1.08% |
| 9 | Fannie Mae REMICs | 1.07% |
| 10 | Morgan Stanley 0.864% 21-Oct-2025 | 1.07% |
Current and future portfolio holdings are subject to change and risk. Based on Market Value of securities.
Growth of $10,000 as of 06.30.2024
The Growth of $10,000 is hypothetical based upon the performance of net A Shares at NAV for the period ended 06.30.2024. It includes the reinvestment of dividends and capital gains.
Distribution
| Month | Class A Shares | Class Inst'l Shares |
|---|---|---|
| July 2024 | $0.0369 | $0.0393 |
| June 2024 | $0.0369 | $0.0389 |
| May 2024 | $0.0391 | $0.0412 |
| April 2024 | $0.0349 | $0.0369 |
| March 2024 | $0.0372 | $0.0393 |
| February 2024 | $0.0346 | $0.0366 |
| January 2024 | $0.0389 | $0.0410 |
| December 2023 | $0.0377 | $0.0397 |
| November 2023 | $0.0362 | $0.0382 |
| October 2023 | $0.0369 | $0.0389 |
| September 2023 | $0.0361 | $0.0381 |
| Share Class | Without Waivers | With Waivers |
|---|---|---|
| Class A | 4.37% | 4.52% |
| Class I | 4.64% | 4.80% |
Ultra Short Bond Fund
Materials
Fixed Income Funds
Insights
09.04.2024 • Charles Wittmann, CFA®
The Lead - Dividend Opportunities
- As we enter September, it appears the Federal Reserve is prepared to lower the federal funds rate at their September 18, 2024 meeting. - Historically, dividend payers have outperformed non-dividend payers after the first cut. - One may question if historically it has been better to own high yielders versus dividend growers, and if it has been better to own slower or faster dividend growers. We address these topics in this month’s piece.
08.29.2024
Guardian Capital buys Sterling Capital Management from Truist
(pionline.com) Guardian Capital, a wholly owned subsidiary of Guardian Capital Group, will acquire investment manager Sterling Capital Management from Truist Financial.
08.27.2024 • Andrew DiZio, CFA®
Higher Interest Rates & REITs - Looking Ahead at Lower New Supply
The market has spent much of the last two years fixated on the negative effects of rising rates on Real Estate Investment Trust (REIT) share prices. What has received less attention is the slowdown in new developments of commercial and multifamily real estate due to higher interest rates and the potential for higher rents in coming years should consistent demand growth be unmet by new supply. We believe publicly-traded REITs, which derive much of their earnings growth from existing real estate rather than new development, are overlooked future beneficiaries of this construction slowdown.
08.13.2024
James Kerin, CFA®, Michael McVicker
Energy prepayment (prepay) bonds enable municipal utilities to lock into a discounted price on a long-term supply of energy, most commonly natural gas or electricity. Issued by special purpose authorities, bonds are structured with far-dated final maturities but shorter-dated mandatory tenders that are backed by the obligation of a bank or insurance company, known as the guarantor, to ensure that it occurs in order to return principal to bondholders. As a result, prepay bonds are ultimately a corporate credit exposure in the tax-exempt market. The final maturity matches the term of the energy supply contract and improves the bond’s market discount tax treatment, while the shorter-dated tender serves to optimize borrowing costs within the transaction.
08.01.2024 • Charles Wittmann, CFA®
- Low quality and risk performed well in the first half of 2024. - As a result of more tepid inflation data supporting a potential reduction in the federal funds rate, we believe the market began anticipating that lower rates may aid companies that need stress relief from the higher interest payments placed on their businesses. - Evidence of this stress can be seen in how companies in the S&P 500 Index began reducing the growth rate of dividends they pay their shareholders as cash flows become more difficult to generate. - We believe quality companies that increase rather than decrease their dividends and signal their financial strength through short- and long-term environments may be a formula for client success.
08.01.2024 • Andrew Richman, CTFA
“Better Balance” Increases the Odds for a September Cut
Andy Richman's update on the July Federal Open Market Committee meeting.
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