Madison Core Bond Fund R6 (MBORX)

Overview

The investment strategy focuses on maximizing the appeal of bonds by committing at least 80% of its net assets, along with any borrowings intended for investment purposes, into this asset class. Aiming to deliver stable current income while minimizing share price fluctuations, the strategy puts an emphasis on high-grade securities. A significant measure adopted is the maintenance of an intermediate average portfolio duration, typically spanning between 3 to 7 years. This tactful approach aspires to align the portfolio's duration within a range of 85-115% of the market benchmark's duration. The benchmark in reference for this alignment is the Bloomberg U.S. Aggregate Bond Index, which is recognized for its comprehensive coverage of the U.S. bond market. The guiding principles of this approach are designed to offer investors a blend of stability in income with managed exposure to interest rate movements and credit risk.

Products and Services

• Investment in Bonds

In pursuit of its objectives, the fund dedicates a minimum of 80% of its net assets to investments in bonds. This encompasses a wide spectrum of debt securities, including government, corporate, and municipal bonds, among others. By focusing on bonds, the fund seeks to leverage the inherent safety and income-producing potential of these instruments. This strategy is geared towards generating stable income for its investors, while striving to maintain the purchasing power of their capital over time.

• Emphasis on Investment Grade Securities

A core tenet of the fund's investment philosophy is the emphasis on investment grade securities. These are bonds rated at the higher end of the credit rating spectrum, indicating lower credit risk. By prioritizing investments in these higher-quality debts, the fund aims to reduce the risk of default and thus protect the invested capital. This strategy is instrumental in ensuring a relatively stable income flow to the fund's investors, contributing to the overall objective of minimizing volatility in share prices.

• Intermediate Portfolio Duration Management

The fund employs a strategic approach to managing its portfolio duration, typically maintaining an average duration of 3 to 7 years. This intermediate duration positioning is fundamental in balancing the fund's exposure to interest rate risks. By calibrating the portfolio's duration to be within 85-115% of the Bloomberg U.S. Aggregate Bond Index's duration, the fund seeks an optimal balance. This deliberate alignment enables the fund to mitigate potential negative impacts of interest rate fluctuations on the portfolio's value, while still participating in the benefits of market movements.