In a volatile period, the Fund generated positive total returns but underperformed the Barclays U.S. Aggregate Bond Index on a relative basis.
We remain defensively positioned, with our investment-grade and below investment-grade corporate credit allocation close to the lowest levels since the financial crisis.
Underperformance was largely attributable to our slightly lower duration position and out-of-index high-yield exposure.
We expect elevated volatility given slowing global growth, uncertain U.S. monetary policy, new bond issuance and elevated shareholder-friendly activity.