Fixed Income Fund

The student-managed Fixed Income Fund provides a hands-on learning experience in which students seek to achieve risk-adjusted returns that equal or exceed the returns on the Fund’s benchmark index. Students involved in the program work in conjunction with Professor Kevin Maloney to maintain a well-diversified portfolio consisting of investment grade fixed income investments, initially valued at $500,000.

LONG-TERM OBJECTIVE AND BENCHMARK

The Fund seeks returns, considering both income and price appreciation, in excess of its Benchmark, the ETF with the ticker symbol AGG, while maintaining a volatility less than 120% of that of its Benchmark. This ETF tracks the Bloomberg Barclays Aggregate Index. That index consists primarily of U.S. Government Treasury and Agency notes and bonds, investment grade corporate bonds issued by U.S. corporations, and Agency Mortgage-Backed Securities. Those three sectors account for approximately 94% of the asset value in the index. Commercial Mortgage Backed Securities, Asset Backed Securities, taxable municipal securities, and US dollar denominated issues of other sovereign and supranational issuers account for the remainder of the assets in that index. The precise characteristics and composition of this index varies through time. Its characteristics and risks can and will be monitored through the Bloomberg terminals available for use by the students in the program. The Benchmark was chosen due to its wide diversification, and its common usage as a benchmark for both active and fixed income portfolios. It is expected that the tracking error of the portfolio versus this benchmark, defined as the
annualized standard deviation of excess returns, will be kept below 2%.

Other fixed income indices may be used from time to time to evaluate performance of portions of the Fund, such as individual fixed income sectors, and used in performance attribution analysis.

ALL GRAPHS AND TABLES, AS OF NOVEMBER 30, 2024

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