Yield Advantage Limited Duration

Q2 2021 | June 30, 2021

Annualized Returns (%) 

QTD YTD 1 Year 3 Years 5 Years 7 Years 10 Years Since Inception1
Gross of fees 0.60 0.20 2.20 3.22 2.35 2.12 2.00 2.04
Net of fees 0.58 0.15 2.10 3.12 2.25 2.03 1.90 1.94
Benchmark 0.06 0.04 0.54 2.99 1.90 1.71 1.53 1.57
1 Inception Date: June 30, 2010 2 Benchmark: Bank of America Merrill Lynch 1-3 Year US Corporate & Government Index

Characteristics

Portfolio Weight
Average Duration 1.98
Weighted Average Life 2.44
Average YTM 0.90
Average YTW 0.82
Average Weighted Coupon 2.07
Average Quality (Moody’s) A2

Sector Weights (%)

Portfolio Weight Benchmark Weight

Cash 3.07 0.00
U.S. Treasury 6.61 68.54
Govt-Related 10.30 2.47
Corporate Credit 72.91 28.99
Securitized 7.10 0.00

Duration Distribution (%)

Portfolio Weight Benchmark Weight
0-1 Year 25.94 3.34
1-3 Years 48.57 96.66
3-5 Years 24.04 0.00

Distinguishing Attributes

  • Significantly enhanced credit diversification
  • Seeks to only own credits that are readily marketable
  • Wisdom of experienced investment team
  • Corporate culture built on client service and diversity
Total product assets shown above may include accounts that are not reflected in the GIPS® report below. Portfolio characteristics are subject to change, and current holdings may differ. Past performance is not an indication of future results. GIPS-compliant performance information for the firm’s strategies and products are available upon request at info@xponance.com. A GIPS report is found at the end of this presentation. Statistics shown above are supplemental information to the GIPS report at the end of this presentation. Results represent preliminary data which is subject to change. For further performance data, please see the Xponance® Yield Advantage Limited Duration disclosures below.

Portfolio Management

Charles L. Curry, Jr

Managing Director, Sr. Portfolio Manager, U.S. Fixed Income

Noel McElreath, CFA

Director, Portfolio Manager, U.S. Fixed Income

About Xponance®

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

Investment Objective

The Xponance® Limited Duration strategy will invest in a well-diversified liquid portfolio of high-quality fixed income instruments with an average maturity of less than three years. The Strategy will seek to preserve capital and to generate a positive absolute return while following a prudent fundamental credit research strategy.

Investment Strategy

The limited duration strategy is typically a laddered, credit intensive portfolio that significantly underweights treasury securities that in turn reflects a consistent yield advantage relative to the benchmark. The strategy has low turnover and reflects a goal of realizing the incremental purchased yield to maturity. The relatively short average life dampens mark to market volatility and effectively lets book yield win.

Portfolio Facts

Benchmark Bank of America Merrill Lynch 1-3 Year US Corporate & Government Index
Inception 6/30/2010
Total Product Assets $131mm
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 3.64 3.54 3.34 2.12 0.94 Five or fewer 115 12,493
2019 4.47 4.36 4.07 0.72 0.89 Five or fewer 111 5,411
2018 1.69 1.59 1.64 0.75 0.79 Five or fewer 107 4,026
2017 1.63 1.54 0.85 0.74 0.71 Five or fewer 64 6,817
2016 2.58 2.48 1.28 0.79 0.73 Five or fewer 63 6,249
2015 0.54 0.46 0.67 0.75 0.57 Five or fewer 61 5,577
2014 1.29 1.17 0.80 0.81 0.49 Five or fewer 61 2,542
2013 1.03 0.93 0.70 0.85 0.54 Five or fewer 60 2,731
2012 2.95 2.83 1.48 N/A N/A Five or fewer 47 3,425
2011 1.27 1.17 1.56 N/A N/A Five or fewer 46 3,441
Composite inception date: June 30, 2010. 1 Benchmark: Bank of America Merrill Lynch 1-3 Year US Corporate & Government Index 2 Results shown for the year 2010 represent partial period performance from July 1, 2010 through December 31, 2010.

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 Limited Duration Composite contains fully discretionary core fixed income accounts with a one to five-year maturity horizon and is measured against the Bank of America Merrill Lynch 1-3 Year U.S. Corporate/ Government Bond Index. The product typically has 80-100 holdings with duration ranging from 90 to 110% of the prospective index and a predicted tracking error of 0.25 to 0.50%. The Yield Advantage Limited Duration Composite was created June 30, 2010.

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 is as follows: First $50mm: 13 bps; Next $25mm: 10 bps; Next $25mm: 10 bps; Over $100mm: 8 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 terms of basis points (“BPS”) for our products. One hundred basis points equal 1%. All fees are negotiable.

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.