Yield Advantage Differentiated Income
Q3 2021 | September 30, 2021
Annualized Returns (%)
|QTD||YTD||1 Year||3 Years||5 Years||7 Years||10 Years||Since Inception1|
|Gross of fees||1.94||8.86||16.31||7.70||5.51||5.11||5.34||6.41|
|Net of fees||1.89||8.71||16.10||7.50||5.32||4.90||5.12||5.90|
|1 Inception Date: September 30, 1991 2 Benchmark: Bloomberg Barclays U.S. Aggregate Index|
|Weighted Average Life||9.99|
|Average Weighted Coupon||3.64|
|Average Quality (Moody’s)||A+|
Sector Weights (%)
|Portfolio Weight||Benchmark Weight|
Duration Distribution (%)
|Portfolio Weight||Benchmark Weight|
|Over 5 Years||50.2||53.8|
- Significantly enhanced credit diversification
- Enhanced income derived from optionality, curve relationships and issue size (illiquidity premium)
- Wisdom of experienced investment team
- Corporate culture built on client service and diversity
Charles L. Curry, Jr.
Director, Portfolio Manager, U.S. Fixed Income
Xponance® is a multistrategy investment firm offering strategies across equity and fixed income. We are independent and employee owned by women and diverse professionals, whose common passion is to do the right thing for our clients and each other. Xponance® is the successor firm representing the integration of two great legacy firms, FIS Group, Inc. and Piedmont Investment Advisors, LLC
The Differentiated Income product is a total return strategy that strives to achieve strong income yield and potential long-term capital appreciation.
Compared to traditional investment grade strategies, this product seeks to maximize risk-adjusted return via investment grade securities. Significant yield advantage is achieved through bespoke credit, smaller size securitized deals as well as securities with embedded options. Securities utilized include IG corporates, FRNs, CLOs, Agency step-up/range accruals as well as MBS/CMBS. Structure vs Credit risk is contemplated given the nature of these securities.
The strategy is sector agnostic and portfolios are constructed from a fundamental/ quantitative framework in concert with an overall macro protocol that underpins all the Yield Advantage products.
|Benchmark||Bloomberg Barclays U.S. Aggregate Index|
|Total Product Assets||$405mm|
|Vehicle(s) available||Separately managed|
Annualized Disclosure Presentation
|Annualized Performance Results (%)||3-Yr Annualized Ex-Post Standard Deviation (%)|
|Year End||Composite Gross TWR||Composite Net TWR||Benchmark1||Composite Gross||Benchmark1||Number of Portfolios||Composite Assets ($mm)||Total Firm Assets ($mm)|
|2020||4.53||4.33||7.51||8.38||3.35||Five or Fewer||376||12,493|
|2019||9.34||9.13||8.72||1.84||2.87||Five or Fewer||364||5,411|
|2018||-0.39||-0.57||0.01||1.95||2.84||Five or Fewer||329||4,026|
|2017||5.15||4.97||3.54||2.10||2.78||Five or Fewer||302||6,817|
|2016||6.74||6.49||2.65||2.52||2.98||Five or Fewer||200||6,249|
|2015||0.10||-0.15||0.55||2.90||2.88||Five or Fewer||188||N/A|
|2014||9.28||9.01||5.97||2.75||2.63||Five or Fewer||181||N/A|
|2013||1.16||0.92||-2.03||2.69||2.71||Five or Fewer||219||N/A|
|2012||10.36||10.10||4.22||2.25||2.38||Five or Fewer||217||N/A|
|2011||4.78||4.56||7.84||3.37||2.78||Five or Fewer||151||N/A|
|Composite inception date: October 31, 1991. 1 Benchmark: Bloomberg Barclays U.S. Aggregate Index
Xponance,® Inc. (“Xponance®”) claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Xponance® has been independently verified for the periods from November 1, 1998 through December 31, 2020. The verification report is available upon request.
A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm’s policies and procedures related to composite and pooled fund maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm-wide basis. Verification does not provide assurance on the accuracy of any specific performance report.
GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein.
On August 31, 2018, FIS Group, Inc. (“FIS Group”) acquired Piedmont Investment Advisors, Inc.’s (“PIA”) predecessor, Piedmont Investment Advisors, LLC. Xponance®, Inc. (“Xponance®”) is an independent, registered investment adviser and is the successor registrant under the Investment Advisers Act of 1940 (the “Advisers Act”) to both FIS Group and its wholly-owned subsidiary, PIA. Pursuant to a corporate rebranding and consolidation strategy, Xponance® was established effective April 1, 2020, to leverage the long histories of its predecessor entities in providing customized investment management products to institutional clients. FIS Group (through its former subsidiaries, Fiduciary Investment Solutions, Inc. and FIS Funds Management, Inc.) managed assets since 1996 and PIA (through its former affiliate Piedmont Investment Advisors, LLC) began managing assets in 2000. The firm maintains a list of composite descriptions and limited pool fund(s) descriptions, which is available upon request.
Total firm assets presented through, and including, Calendar Year 2019 represent total firm assets for PIA, prior to April 1, 2020, this composite was managed by legacy firm PIA. Total firm assets presented post April 1, 2020 represent the total firm assets of Xponance®.
Yield Advantage Differentiated Income Composite contains all fee paying and non-fee-paying portfolios managed according to its investment strategy on a fully discretionary basis. The Composite consists of investment quality securities where credit risk is minimized through an emphasis on treasuries, agencies, high quality corporates, asset-backed and mortgage-backed securities and is measured against the Bloomberg Barclays US Aggregate Index. The Tactical Fixed Income Composite was created on September 30, 1991.
Performance presented prior to 10/01/16 occurred while the Portfolio Management Team was affiliated with a prior firm where the members of the Portfolio Management Team were the only individuals respon- sible for selecting the securities to buy and sell.
Results are based on fully discretionary accounts under management, including those accounts no longer with the firm. Past performance is not indicative of future results. The composite maintains a significant cash flow policy. A significant cash flow has been defined as any client requested cash withdrawal where we must execute trades to generate the requested cash. We will remove the cash from the account the day we raise the cash; therefore, significant cash flows out of an account will be treated as a temporary account and the member account will remain in the composite.
The U.S. Dollar is the currency used to express performance. Returns are presented gross and net of management fees and include the reinvestment of all income. Net of fee performance was calculated using actual management fees. Policies for valuing investments, calculating performance, and preparing GIPS reports are available upon request. The management fee schedule for the composite is as follows: First $50mm: 35 bps; Next $25mm: 30 bps; Next $25mm: 28 bps; Over $100mm: 25 bps
Fees are charged to clients on a quarterly basis. Fees are calculated as a percentage of assets under management and vary based upon the type of product and the total amount of assets under management. The percentage fee is expressed in terms of basis points (“BPS”) for our products. One hundred basis points equal 1%. All fees are negotiable.
Effective September 1, 2019 Composite name was changed from Yield Advantage Tactical Income to Yield Advantage Differentiated Income
The three-year annualized standard deviation measures the variability of the composite gross returns and the benchmark returns over the preceding 36-month period.
Internal dispersion presented is an equal-weighted standard deviation of annual gross returns of those portfolios that were in the composite for the entire year. For those years when less than six portfolios were included in the composite for the full year, no dispersion measure is presented.