Diversified Income Bond Fund

Investment involves risk. Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy.

Overview

Strategy

Fund Summary

We seek to add value primarily through sector allocation, currency selection, duration management, and security selection. Our approach is based on proprietary fundamental research and relative value analysis. There is a strong emphasis on risk management practices and portfolio diversification to manage the overall risk profile. The promotion of environmental and/or social characteristics is achieved through the fund's commitment to maintain at least 10% of the value of its portfolio invested in Sustainable Investments, as defined by the SFDR. Additionally, we apply a proprietary responsible screen (exclusion list). The manager is not constrained by the fund’s benchmark, which is used for performance comparison purposes only.

Performance - Net of Fees

Past performance is not a reliable indicator of future performance.

31-Oct-2023 - Kenneth Orchard, Portfolio Manager,

Global fixed income markets, as measured by the Bloomberg Global Aggregate Index hedged to US dollars, posted negative total returns in October. Led by Australia and the US, global sovereign yields rose broadly, but there was some disparity with eurozone yields falling across most maturities. The portfolio generated flat total returns in October. Our short positions in the 5-, 10-, and 30-year portions of the US Treasury curve aided performance as Treasury yields rose notably in intermediate and longer maturities. Exposure to euro-denominated investment-grade corporate bonds also helped as it was one of the only sectors to generate positive absolute returns during the month. However, our exposure to investment-grade and high yield corporate bonds denominated in US dollar significantly weighed on results as rising US Treasury yields held back total returns for corporate credit.

31-Oct-2023 - Kenneth Orchard, Portfolio Manager,

The portfolio added to agency mortgage-backed securities (MBS) after an upgrade to the sector outlook, as MBS spreads have remained wide. We believe that valuations look attractive, and spreads have the potential to tighten on a moderation in interest rate volatility. We also added to global investment-grade corporate bonds and global high yield. The investment team has a more sanguine near-term outlook on credit, which could benefit from increased demand for attractive yields.

31-Oct-2023 - Kenneth Orchard, Portfolio Manager,

We added to duration in October by increasing duration in the US as US Treasuries have sold off meaningfully in recent months. We believe real yields are approaching fair value in the US, and the likelihood of an imminent recession in the US is further diminished. We also added duration in the eurozone.

31-Oct-2023 - Kenneth Orchard, Portfolio Manager,

In currencies, we added to the US dollar while closing our short position in the euro and moving to a long position by the end of the month. We closed a short position in the Chilean peso after the currency has underperformed its peers in Latin America. China may increase stimulus to support economic growth, and the resulting increased demand for Chile’s chief exports could support the peso. In turn, we opened a short Chinese yuan position, which could benefit from local interest rate cuts.

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Risks

Typical Investor