Income Fund

Investment Objective

Current Income

Morningstar Category
Short-Term Bond

Fund Characteristics

The Income Fund seeks to invest primarily in fixed income securities rated A- or higher, including up to 10% in securities rated BBB. The Fund’s duration tends to be consistent with a short-term bond fund.

Investment Approach

  • Investment philosophy emphasizes shifts among various sectors of the debt market, subject to the quality constraints of the portfolio. Invests in bonds diversified across market sectors.
  • Utilizes a five-step investment process that focuses on key factors in relation to the Fund’s benchmark, including relative duration, maximizing cash flow, yield curve positioning, sector allocation and security selection.
  • The Fund’s duration is actively managed based on perceived trends in interest rates versus the Bloomberg Barclays Capital Intermediate Government /Credit Bond Index.

Why Consider This Fund?

  • Seeks to provide competitive returns while maintaining a short-term duration and emphasizing higher-quality instruments (90% of the portfolio is comprised of securities rated "BBB" or higher).
  • Seeks diversified alpha sources, which include corporate, mortgage-backed, asset-backed, and Treasury securities
  • Focuses on outperforming its benchmark through a security selection process that adheres to a time-tested, disciplined approach
  • Managed by an experienced, tenured team that has been in place since 2006

The Fund’s returns will vary, and you could lose money by investing in the Fund.  As interest rates rise, bond prices will fall and bond funds become more volatile. The Fund is subject to credit risk. The Fund’s net asset value and total return may be adversely affected by the inability of the issuers of the Fund’s securities to make interest payments or payment at maturity. The Fund’s investments in obligations issued or guaranteed by U.S.  Government agencies or instrumentalities may not be backed by the full faith and credit of the United States and may differ in the degree of support provided by the U.S. Government. The Fund is also subject to interest rate and foreign investments risk. Foreign investments often involve additional risks, including political instability, differences in financial reporting standards and less stringent regulation of securities markets. Rule 144A securities are not registered for resale in the general securities market and may be classified as illiquid. It may not be possible to sell or otherwise dispose of illiquid securities both at the price and within a time period deemed desirable by the Fund.   Investments with longer maturities, which typically provide higher yields than securities with shorter maturities, may subject the Fund to increased price changes resulting from market yield fluctuations. The Fund’s investments in collateralized mortgage obligations are subject to prepayment and extension risk. Prepayment of high interest rate mortgage-backed securities during times of declining interest rates will tend to lower the return of the Fund and may even result in losses to the Fund if the prepaid securities were acquired at a premium. Slower prepayments during periods of rising interest rates may increase the duration of the Fund’s mortgage-backed securities and asset-backed securities and reduce their value.