Summary

• In 1Q26 the Limited Term Income Portfolio (I share class) returned 0.35%, 37 basis points ahead of the Bloomberg Intermediate U.S. Government/Credit Index.
• The Portfolio's security selection in AAA and BBB issues resulted in net positive contributions of 7 basis points each.
• The Portfolio maintained an average duration of 3.29 versus 3.71 for the index to navigate rising rates tied to geopolitical conflict.
• During the early stages of the Middle East conflict, high yield spreads compressed to historically tight levels, reaching approximately 250 basis points over Treasuries in mid-January.
• The strategy emphasizes generating durable income while maintaining a cautious stance toward lower-quality credit, favoring high-quality carry and securitized assets over spread-dependent returns.

Market Review

The U.S. financial landscape in March 2026 was shaped by heightened geopolitical volatility, most notably the escalation of conflict in the Middle East. The war involving Iran and the resulting disruption to global energy markets