During the second quarter, the iMGP Dolan McEniry Corporate Bond Fund had a return of 0.66% versus the Bloomberg U.S. Intermediate Credit benchmark return of 0.73%.
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.
For standardized performance click here: https://imgpfunds.com/im-dolan-mceniry-corporate-bond-fund/
Market Review
During the second quarter, positive returns were seen in many fixed income and equity indices. The Federal Open Market Committee chose to leave the target range for the federal funds rate unchanged at 5.25%-5.50% during the quarter. Economic data softened during the quarter, but the Committee mentioned that they do not plan to lower the target range until they are more confident that inflation is moving steadily toward 2%. Overall, credit quality remains strong. 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 4.20% to 4.40%, the 5-year yield increased from 4.21% to 4.38% and the 2 year yield increased from 4.62% to 4.76%.
Per Bloomberg data, the spread of the Bloomberg Barclays Corporate Investment Grade Index widened 4 basis points during the month to an average option adjusted spread (“OAS”) of +94 basis points. The OAS of the Bloomberg Corporate High Yield Index widened 10 basis points to +309 basis points at month end.
On a relative basis, the iMGP Dolan McEniry Corporate Bond Fund underperformed the Bloomberg U.S. Credit Intermediate Index by 7 basis points. The fund’s underperformance was driven by the fund’s performance in the corporate high yield sector. 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 they focus on a company’s ability to generate generous amounts of free cash flow over time in relation to its indebtedness. Investment safety and risk mitigation are of primary importance as they continue to search for undervalued fixed income securities. As of June 30th, the iMGP Dolan McEniry Corporate Bond Fund had a +24 basis point yield premium and similar duration versus the Bloomberg U.S Intermediate Credit. Dolan McEniry believe these stats will allow the portfolio to perform well versus the benchmarks over time.
Portfolio Statistics as of 6/30/24
| 6/30/24 Stats | iM Dolan McEniry Corporate Bond Fund | Bloomberg U.S. Intermediate Credit |
| Yield to Worst | 5.53% | 5.29% |
| Yield to Maturity | 5.54% | 5.30% |
| Effective Duration | 3.75 years | 4.01 years |
| Average Coupon | 4.39% | 3.91% |
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 underperformed the Bloomberg U.S. Credit Intermediate Index by 7 basis points. As noted above, the fund’s underperformance was driven by the fund’s performance in the corporate high-yield sector.
Security Selection
| Top Performers | Bottom Performers |
| Davita Inc | Bloomin Brands Inc. |
| Qorvo Inc. | Warner Bros Discovery Inc. |
| SBA Communications Corp. | Qurate Retail Inc. |
