High Quality Bond Fund
An A-or-better bond fund that actively manages all fixed income risks.
Investment Strategy
The Fund seeks to obtain the highest total investment return within the policy limitations of (1) investing in bonds and money market instruments rated A or better, and (2) maintaining a dollar-weighted average maturity of ten years or less. The Fund invests in a broad range of corporate debt securities, U.S. Government and its agency's debt securities, and money market instruments, and intends to maintain an overall portfolio quality rating of A by Standard & Poor’s and/or A2 by Moody’s.
Portfolio Management
Why Madison High Quality Bond Fund
- Active management of interest rate risk (duration range of 75-125% of the benchmark), yield curve, sector, and security selection decisions.
- Focus on downside risk management to provide an uncorrelated fixture in an asset allocation.
- A-rated bonds or better (no BBBs), with no exposure to collateralized debt or international bonds.
Key Highlights (As of Friday December 20, 2024)
Class Y | Class I |
|
NAV |
10.40 | 10.47 |
Change($) |
0.02 | 0.02 |
YTD(%) |
2.69% | 2.75% |
Ticker |
MIIBX | MIIRX |
Inception Date |
05/01/00 | 02/28/22 |
Expense Ratio |
0.50 | 0.41 |
|
Morningstar Overall Among 514 Short-Term Bond funds |
A
Average quality rating2
3.37%
30-day SEC Yield1,3
57
holdings1
$61M
net assets1
Commentary
Economic data during the third quarter of 2024 lent support to the Fed’s case for declining inflationary pressures and stable economic activity. With evidence of continued progress towards their stated goals, the Federal Open Market Committee (FOMC) acted to reduce the Fed Funds rate at their September 18th meeting. This rate reduction initiated the long-awaited policy easing hinted at by Chairman Powell just over a year ago when the FOMC ‘pivoted’ policy direction.
Performance
Average annual returns, %
Portfolio Highlights
Top Ten Fund Holdings (As of 11/30/24)
US TREASURY N/B |
4.46% |
US TREASURY N/B |
3.87% |
US TREASURY N/B |
4.28% |
US TREASURY N/B |
3.46% |
FANNIE MAE |
4.02% |
US TREASURY N/B |
3.46% |
US TREASURY N/B |
3.89% |
US TREASURY N/B |
3.44% |
US TREASURY N/B |
3.87% |
US TREASURY N/B |
3.40% |
Documents and Other Information
| Fact sheet | |
| Investment Strategy letter | |
| Summary Prospectus | |
| Complete Holdings | |
| Tax Center |
The Morningstar Rating™ for funds, or “star rating”, is calculated for funds 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 fund’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of funds in each 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 fund is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics, and may not indicate positive performance. Ratings may vary by share class.
1 Data as of September 30, 2024.
2 The average quality rating is not the result of an assessment of the credit quality of the Fund’s portfolio by a Nationally Recognized Statistical Rating Agency (NRSRO) or any other independent entity. Credit quality ratings on underlying securities of the Fund are received from one or more NRSRO (e.g., S&P, Moody’s, Fitch, etc.) and converted to the equivalent major rating category commonly utilized by more than one NRSRO. Bonds backed by U.S. Government or agency securities are given an implied rating equal to the rating of such securities. Ratings and portfolio credit quality may change over time.
3 SEC 30-day yield represents net investment income earned by a fund over a 30-day period, expressed as an annual percentage rate based on the fund’s share price at the end of the 30-day period. It is calculated based on the standardized formula set forth by the SEC.
Performance quoted represents past performance. Past performance does not guarantee and is not a reliable indicator of future results. Investment returns and principal values will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than that shown.
Net Asset Value (NAV) is the amount per share you would receive if you sold shares that day. Change refers to the amount (in dollar terms) that the value of the share price changed from the previous day’s close of trading. The Year-to-date (YTD) return is the net change in the value of the fund’s share price (in percentage terms) at NAV from January 1 to the current date shown above. Expense ratios are as of each fund’s most recent prospectus. For more detailed information on performance, including returns for the most recent month-end or quarter-end, view Performance.
Investment returns assume all distributions are reinvested and reflect all applicable fees and expenses. Benchmark index returns assume all distributions are reinvested. Indexes are unmanaged and, therefore, have no fees. Investors cannot invest directly in an index.
Investment returns reflect fee waivers without which they would have been lower and net expenses higher. The investment adviser waived 0.10% of its annual management fee from August 7, 2020 through February 27, 2022.
An investment in the Fund is subject to risk and there can be no assurance the Fund will achieve its investment objective. The risks associated with an investment in the Fund can increase during times of significant market volatility. The principal risks of investing in the Fund include interest rate risk, call risk, risk of default, and liquidity risk. Mutual funds that invest in bonds are subject to certain risks including interest rate risk, credit risk, and inflation risk. As interest rates rise, the prices of bonds fall. Long-term bonds are more exposed to interest-rate risk than short-term bonds. More detailed information regarding these risks can be found in the Fund’s prospectus.
Bloomberg U.S. Intermediate Government Credit A+ Bond Index measures the performance of U.S. dollar denominated U.S. Treasuries, government related and investment grade U.S. corporate securities with quality ratings of A3/A- or better and maturities between one and 10 years.
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