During the first quarter, the iMGP Dolan McEniry Corporate Bond Fund had a return of 0.45% versus the Bloomberg U.S. Intermediate Credit benchmark return of 0.20%.
Performance quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the funds may be lower or higher than the performance quoted. Short term performance is not a good indication of the fund’s future performance and should not be the sole basis for investing in the fund.To obtain standardized performance of the funds, and performance as of the most recently completed calendar month, please visit www.imgpfunds.com. There are contractual fee waivers in effect through 4/30/2025. In the absence of such waivers, total return would be reduced.
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Market Review
During the first quarter of 2024, mixed returns were seen in fixed income and equity indices. The Federal Open Market Committee left the Federal Funds Rate unchanged at 5.25-5.50%. Economic and inflationary data continues to be strong causing market participants to adjust their expectations regarding the timing of potential interest rate reductions by the Federal Reserve. Dolan McEniry will continue to monitor markets for any opportunities that may arise.
During the quarter, Treasury rates increased, and the curve remained inverted as the 10-year U.S. Treasury yield increased from 3.88% to 4.20%, the 5-year yield increased from 3.85% to 4.21% and the 2-year yield increased from 4.25% to 4.62%.
Per Bloomberg data, spreads of corporate investment grade tightened 9 basis points during the quarter to an average option adjusted spread (“OAS”) of +90 basis points. The OAS of the Bloomberg Corporate High Yield Index tightened 24 basis points to +299 basis points at quarter end.
On a relative basis, the iMGP Dolan McEniry Corporate Bond Fund outperformed the Bloomberg U.S. Credit Intermediate Index by 25 basis points. The Fund’s outperformance was driven by the Fund’s overexposure to and outperformance in both the corporate investment grade and high yield sectors. The yield curve positioning and duration had a minimal effect on relative performance versus the benchmark.
Outlook and Strategy
Dolan McEniry believes that client portfolios are positioned to provide reasonable absolute and relative returns going forward. Dolan McEniry’s core competence is credit analysis, and we focus on a company’s ability to generate generous amounts of free cash flow over time in relation to its indebtedness. Prudent Investment and risk mitigation are of primary importance as we continue to search for undervalued fixed income securities. As of March 31st, the iMGP Dolan McEniry Corporate Bond Fund had a +26 basis point yield premium and similar duration versus the Bloomberg U.S Intermediate Credit. We believe these stats will allow the portfolio to perform well versus the benchmarks over time.
Portfolio Statistics as of 3/31/24
| 3/31/24 Stats | iM Dolan McEniry Corporate Bond Fund | Bloomberg U.S. Intermediate Credit |
| Yield to Worst | 5.41% | 5.15% |
| Yield to Maturity | 5.42% | 5.15% |
| Effective Duration | 3.69 years | 3.99 years |
| Average Coupon | 4.34% | 3.80% |
Attribution Commentary
Yield Curve and Duration: The yield curve positioning and duration had a minimal effect on the performance versus the benchmark.
Commentary:
During the quarter, the iMGP Dolan McEniry Corporate Bond Fund outperformed the Bloomberg U.S. Credit Intermediate Index by 25 basis points. The Fund’s outperformance was driven by the fund’s overexposure to and outperformance in both the corporate investment-grade and high-yield sectors.
Security Selection
| Top Performers | Bottom Performers |
| Qurate Retail Inc. | Fiserv Inc. |
| Davita Inc. | Teledyne Inc. |
| Bloomin Brands Inc. | SBA Communications Corp. |
