Objective
Preserve capital while providing current income in excess of cash market yields with moderate emphasis on capital appreciation.
Strategy
Focuses on sector allocation and security selection, coupled with a top-down macroeconomic risk management process; aimed at minimizing downside risk while maximizing income potential.
| Fund Facts | |
|---|---|
| Asset Manager |
|
| Benchmark | Bloomberg Barclays 1-3 Year Treasury Index |
| Fund Inception Date | January 1, 1985 |
| Mimimum Investment | No minimum investment required |
| Expense Ratio | 0.34% |
Additional Facts
The Fund’s benchmark was changed to the Barclays Capital 1-3 Year Treasury Index effective July 1, 2016. The benchmark performance shown reflects the linked performance of the following benchmarks for each applicable period: ML 1-3 Yr Treasury Index effective 7/1/01; ML 1-5 Yr G/C Index effective 4/1/98; 50% LB Intermediate Government /50% LB 1-3 Yr Government effective 5/1/96; LB 1-3 Yr Government in prior periods.
Annual Average Total Returns
(%) as of 12/31/2018
| Trailing | 3 Months | 1 Year | 3 Years | 5 Years | 10 Years |
|---|---|---|---|---|---|
| CUIT Short Bond Fund | 0.71 | 1.41 | 1.7 | 1.46 | 2.4 |
| Bloomberg Barclays 1-3 Year Treasury Index** | 1.31 | 1.56 | 0.95 | 0.80 | 0.95 |
| Calendar Year | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 |
|---|---|---|---|---|---|---|
| CUIT Short Bond Fund | 1.41 | 1.71 | 1.99 | 0.81 | 1.37 | 0.84 |
| Bloomberg Barclays 1-3 Year Treasury Index** | 1.56 | 0.42 | 0.86 | 0.54 | 0.62 | 0.36 |
** Effective July 1, 2016, the benchmark for the CUIT Short Bond Fund (SBF) was changed to the Bloomberg Barclays 1-3 Year Treasury Index. For periods prior to July 1, 2016, the applicable benchmarks were: ML 1-3 Yr Treasury Index effective 7/1/01; ML 1-5 Yr G/C Index effective 4/1/98; 50% LB Intermediate Government /50% LB 1-3 Yr Government effective 5/1/96; LB 1-3 Yr Government in prior periods. The benchmark performance shown for SBF in this presentation reflects the linked performance of these benchmarks for each applicable period.
| Statistics | Fund | Index |
|---|---|---|
| Average Maturity (Yrs) | 2.28 | 1.92 |
| Effective Duration (Yrs) | 1.77 | 1.86 |
| Average Quality | AA- | TSY |
| Yield-to-Maturity | 3.49% | 2.52% |
| Current Yield | 3.06% | 2.07% |
| # of Securities | 191 | 99 |
| Fund Size | $332.90MM | |
| Effective Duration | Fund | Index |
|---|---|---|
| < 1 Year | 33.6 | 3.8 |
| 1 - 3 Years | 47.8 | 96.2 |
| 3 - 5 Years | 15.5 | 0.0 |
| 5 - 7 Years | 2.8 | 0.0 |
| 7 - 10 Years | 0.3 | 0.0 |
| 10 - 20 Years | 0.0 | 0.0 |
| > 20 Years | 0.0 | 0.0 |
| Market Sector Analysis | Fund | Index |
|---|---|---|
| Treasury and Gov’t Related | 31.0 | 100.0 |
| Corporate | 36.2 | 0.0 |
| MBS | 3.1 | 0.0 |
| CMBS | 9.9 | 0.0 |
| ABS | 19.1 | 0.0 |
| Cash | 0.8 | 0.0 |
| Credit Quality | Fund | Index |
|---|---|---|
| AAA | 57.6 | 100.0 |
| AA | 6.7 | 0.0 |
| A | 15.7 | 0.0 |
| BBB | 15.2 | 0.0 |
| Below BBB | 4.0 | 0.0 |
| Cash | 0.8 | 0.0 |
| Risk Metrics | Fund (5 YR) |
Index (5 YR) |
|---|---|---|
| Standard Deviation | 0.7 | 0.8 |
| Tracking Error | 0.4 | 0.0 |
| Sharpe Ratio | 1.8 | 0.3 |
| Information Ratio | 2.2 | N/A |
| Upside Capture | 124.3 | 100.0 |
| Downside Capture | 4.7 | 100.0 |
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Q4 2018 Performance Review
12-Month Review
- The Fund’s shorter than benchmark duration (1.8 vs. 1.9) contributed ~ 20 bps of the Fund’s outperformance as the Federal Reserve increased shortterm rates for the fourth time in 2018.
- Over the trailing period, the yield curve steepened on the front end which contributed ~ 17bps of value add to the fund.
- Sector exposure was the main detractor (-14 bps) as Financials, CMBS and ABS exposure weakened results for the period.
- Security selection was essentially neutral for the trailing twelve months.
3-Month Review
- The Federal Reserve increased the fed funds target range to 2.25-2.50% based on confidence in U.S. economic growth. The rate change came despite financial market worries and political pressure to suspend rate increases.
- In a reversal from the previous quarter, the Fund’s shorter duration (1.8 vs. 1.9) detracted from results (-7bps) as capital markets experienced record levels of volatility
- Yield curve positioning contributed ~ 10 bps as rates rose on the front end of the curve.
- Sector exposure was the main detractor during the period (-53 bps) as investors led a flight to quality across most spread sectors. In particular,
Industrials, Financials, CMBS and MBS reduced returns as for the period. - Security selection was neutral for the trailing period.
Current Positioning
- The Fund’s effective duration remains shorter relative to benchmark (1.8 years vs 1.9 years) as the sub-adviser remains cautious about expectations of future Federal Funds increases in 2019.
- Given the defensive posture of the Fund, the sub-adviser is focused on maintaining relative yield advantage by adding to higher quality issues in Industrials and Financial sectors.
- In the securitized sector, the sub-adviser continues to favor the relative value attractiveness of ABS and CMBS as both sectors tend to have more stable cash flows.
- The sub-adviser remains constructive on select high-yield exposures within industrials. Exposure hovered at approximately 4.0% of the Fund’s total assets. However, the sub-advisor will continue to seek opportunities given the recent spread widening towards the end of 2018.
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Fund Fact Sheet
PDF