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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

I
Shares

BUSIX

Inception
Date

11.30.2012

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.

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 06.30.2024

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 N/A N/A N/A N/A N/A N/A N/A

The gross expense ratios for Class A and I Shares are 0.81% and 0.53%, respectively. The net expense ratios for Class A and I Shares are 0.56% and 0.28%, respectively.

The Advisor has contractually agreed to limit certain fees paid by the Fund from 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 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.

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 Breakdown as of 03.31.2024

Name Value
0-0.5 Yr. 52.08
0.5-1 Yr. 37.36
1-1.5 Yr. 7.27
1.5-2 Yr. 2.88
2+ Yr. 0.41

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 113
Average Life 0.59 Years
Effective Duration 0.53 Years
Annual Turnover 53%

Portfolio Composition as of 03.31.2024

Composition Fund Index
Corporate 55.6% 0.0%
     Financial Institutions 24.0% 0.0%
     Industrial 21.7% 0.0%
     Utility 9.9% 0.0%
Securitized 38.3% 0.0%
     ABS 22.1% 0.0%
     CMBS 11.6% 0.0%
     CMO 4.7% 0.0%
Treasury 3.6% 100.0%
     Treasury 3.6% 100.0%
Cash 2.5% 0.0%
     Cash 2.5% 0.0%

Top Ten Holdings as of 03.31.2024

# Company Name Value
1 U.S. Treasury 0.0% 07-May-2024 3.59%
2 Hertz Vehicle Financing Iii Series 2021-1 1.21% 25-Dec-2025 1.94%
3 Enterprise Fleet Financing Series 2022-1 3.27% 20-Jan-2028 1.92%
4 Fannie Mae Remics 1.74%
5 Avis Budget Rental Car Llc 2.36% 20-Mar-2026 1.68%
6 Onemain Financial Issuance Trust 2022-3 5.94% 15-May-2034 1.64%
7 Wells Fargo & Company 0.805% 19-May-2025 1.44%
8 Morgan Stanley 0.864% 21-Oct-2025 1.41%
9 Wells Fargo Commercial Mortgage Trust 2014-Lc18 3.405% 17-Dec-2047 1.39%
10 Ford Credit Auto Owner Trust 2020-Rev1 2.04% 15-Aug-2031 1.39%

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 Inst'l Shares
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
August 2023 $0.0345 $0.0365
July 2023 $0.0323 $0.0344

30-Day SEC Yield as of 05.31.2024

Share Class Without Waivers With Waivers
Class A 4.35% 4.51%
Class I 4.57% 4.74%

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

preview of document

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%.

preview of document

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.

Contact

Learn more about Sterling Capital solutions and services.

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The Morningstar Rating™ for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

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