Yield Advantage Opportunistic Core

Q2 2021 | June 30, 2021

Annualized Returns (%) 

QTD YTD 1 Year 3 Years 5 Years 7 Years 10 Years Since Inception1
Gross of fees 2.50 -0.5 2.43 5.87 3.72 3.70 3.94 4.39
Net of fees 2.47 -0.58 2.28 5.71 3.55 3.53 3.76 4.19
Benchmark 1.83 -1.60 -0.33 5.34 3.03 3.28 3.39 4.03
1 Inception Date: June 30, 2003 2 Benchmark: Bloomberg Barclays Aggregate Index

Characteristics

Portfolio Weight
Average Duration 6.16
Weighted Average Life 7.81
Average YTM 1.87
Average YTW 1.73
Average Weighted Coupon 2.77
Average Quality (Moody’s) A1

Sector Weights (%)

Portfolio Weight Benchmark Weight

Cash 0.54 0.00
U.S. Treasury 15.34 37.26
Govt-Related 6.73 1.45
Corporate Credit 52.27 30.59
Securitized 25.11 30.69

Duration Distribution (%)

Portfolio Weight Benchmark Weight
0-1 Year 9.57 0.00
1-3 Years 23.33 24.47
3-5 Years 19.99 28.96
Over 5 Years 47.11 46.57

Distinguishing Attributes

  • Significantly enhanced credit diversification
  • Focused on directional changes in the price of risk
  • 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 Opportunistic Core 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® Opportunistic Core strategy is a yield maximizing total return bond strategy with primary investment objectives of current income and capital preservation. A secondary investment objective is long-term capital appreciation. The Strategy invests at least 85% of its debt exposure around securities within the Bloomberg Barclays Aggregate benchmark.

Investment Strategy

The strategy goal is to deliver long-term results that maximize yield’s contribution to total return within a risk-aware framework. This includes a cyclical/trend assessment of granular economic data in concert with a fundamental assessment of risk premia. The strategy’s differentiated exposure includes index securities as well as out of index exposure such as high yield, FRNs, TIPS and other market opportunities.

All portfolios are managed within a diversified, risk-adjusted framework. Client driven risk parameters dictate our non-index exposure.

Portfolio Facts

Benchmark Bloomberg Barclays U.S. Aggregate Index
Inception 06/30/2003
Total Product Assets $1,898mm
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 Internal Dispersion (%) Composite Assets ($mm) Total Firm Assets ($mm)
2020 8.93 8.77 7.51 3.85 3.35 6 0.36 1,460 12,493
2019 8.53 8.37 8.72 2.63 2.87 7 0.06 1,383 5,411
2018 -0.44 -0.61 0.01 2.54 2.84 Five or fewer N/A 1,077 4,026
2017 4.10 3.90 3.54 2.59 2.78 7 0.03 1,102 6,817
2016 4.34 4.15 2.65 2.85 2.98 Five or fewer N/A 759 6,249
2015 0.23 0.05 0.55 2.94 2.88 Five or fewer N/A 629 5,577
2014 5.59 5.41 5.97 2.84 2.63 Five or fewer N/A 699 2,542
2013 -1.59 -1.78 -2.03 2.84 2.75 Five or fewer N/A 661 2,731
2012 6.42 6.23 4.22 2.35 2.42 6 0.09 719 3,425
2011 7.62 7.44 7.84 3.02 2.82 6 0.09 638 3,441
Composite inception date: June 30, 2003 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 Opportunistic Core Composite contains fully discretionary core fixed income accounts with increased credit exposure and mortgage-backed and asset-backed securities and is measured against the Bloomberg Barclays U.S. Aggregate Bond Index. The product typically has 75-150 holdings with duration ranging from 88 to 112% of the prospective index and a predicted tracking error of 0.75 to 1.50%. The Yield Advantage Opportunistic Core Composite was created June 30, 2003.

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. Prior to June 30, 2004, net of fee performance was calculated using a dollar-weighted average fee. Policies for valuing investments, calculating performance, and preparing GIPS reports are available upon request.

The management fee schedule is as follows: First $50mm: 30 bps; Next $25mm: 28 bps; Next $25mm: 25 bps; Over $100mm: 20 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.

Portfolio Management

Tina Byles Williams

Chief Investment Officer & Lead Portfolio Manager

Thomas Quinn, CFA

Managing Director, Sr. Portfolio Manager, Tactical & Multi-Manager Strategies

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 Philosophy

We believe that a carefully constructed portfolio of small, entrepreneurial managers can outperform its benchmark and large AUM peers on a risk adjusted basis over a full market cycle, without taking on uncompensated levels of active risk. This strategy is defined by exposure to undiscovered, high conviction Non-U.S. equity managers, who we
are delivering to clients in customizable solutions.

Portfolio Facts

Inception date 10/1/2008
Assets in strategy $1,898mm
Woman or diverse owned managers 40-60%
Target active share >75
Benchmark MSCI ACWI Ex-US Net
Min. investment $25mm
Vehicles available Separately managed