For the quarter, the Fund posted a total return of 0.37%, versus a return of 0.07% for the benchmark. The primary positive contributor to relative performance was income generated from the Funds investments in corporate credits, which remain in high demand along a sufficiently steep yield curve. The floating-rate bonds in the portfolio cushioned price volatility as intended.
Investors will be monitoring the same data points as the Fed, particularly employment growth and inflation readings, for signs that the economy has recovered sufficiently for short-term rates to rise. A surprise on either front could bring back the volatility that has so far been a source of opportunity for ultra-short fixed-income investors.
If you're seeking an investment that may generate higher yields than money market funds with less volatility than short duration bond funds, this Fund may be appropriate for you. The Fund is intended for investors with an investment horizon of at least one year who are seeking to move a portion of their money market fund assets.
The Fund is not a money market fund, which maintains a $1.00 NAV, and the Fund's share price will fluctuate with its returns.
- Seek to yield more than a money market fund with potential for capital appreciation.
- Strive to maintain a 6-18 month average maturity, under normal circumstances, with a maximum security maturity of three years.
- Manage Fund in an effort to have an average portfolio quality of A or better, with all securities to be investment grade.