Core Fixed Income

For the Period Ending: 06/30/2016



In the Core Fixed Income style we invest in securities with a duration of 80% - 120% of the benchmark index. The Core Fixed Income style applies a disciplined approach in five key areas of active portfolio management. These areas are used in an effort to provide competitive returns with lower risk (listed below in order of their relative contribution to the investment process):
  • Sector selection
  • Security selection
  • Yield curve analysis
  • Duration
  • Diversification

Value is added through sector emphasis and individual issue selection based on our outlook for the economic environment, interest rate trends, industry fundamentals and the features of individual securities.

We believe that the extensive use of spread products, i.e. corporates, mortgages and agencies, the avoidance of long term securities and their increased downside risk (when deemed appropriate), relatively low turnover, and a belief in diversification as a risk reducing tool all add value in our effort to increase returns and lower risk.

Duration 80%-120% of index
Average Quality A+

Minimum Assets Accepted: $3 million


Total Returns


Total Returns1,2,3 Annualized
  YTD3 1 Year 3 Years 5 Years 10 Years
Core - Gross1 6.32% 7.17% 3.84% 3.65% 5.28%
Core - Net1 6.04% 6.61% 3.45% 3.29% 4.95%
Barclays U.S. Aggregate Bond Index2 5.31% 6.00% 4.06% 3.76% 5.13%

Calendar Year Returns


Calendar Year Returns 1,2,3,4
  Core Fixed Income
Gross1
Core Fixed Income
Net1
Barclays U.S. Aggregate
Bond Index2
2Q164
2.80%
2.66%
2.21%
YTD3
6.32%
6.04%
5.31%
2015
0.89%
0.47%
0.55%
2014
4.11%
3.80%
5.97%
2013
-2.12%
-2.41%
-2.02%
2012
4.02%
3.70%
4.22%
2011
7.83%
7.51%
7.84%
2010
5.90%
5.59%
6.54%
2009
4.74%
4.43%
5.93%
2008
9.23%
8.90%
5.24%
2007
8.01%
7.69%
6.97%
2006
4.24%
3.92%
4.33%

Past performance is no guarantee of future results. Returns are presented on a dollar-weighted basis and may be impacted by ongoing market volatility. Please inquire for more current performance information.

1 The Core Fixed Income composite consists of portfolios seeking to provide current income consistent with preservation of capital. The portfolios primarily invest in U.S. investment-grade debt securities which include corporate debt securities, U.S. government securities, mortgage-backed and other asset-backed securities. Portfolios within this composite may invest in debt securities with varying maturities and can invest in securities of companies of any size issued by companies in a variety of sectors and industries and reflect portfolio duration and structure characteristics that are benchmarked to the Barclays U.S. Aggregate Bond Index. The Core Fixed Income composite was created March 28, 2005. The performance presentation is in U.S. dollars.

Effective July 1, 2015 the composite definition/description was revised in order to provide further clarity of the composite’s investment strategy.

Core Fixed Income composite is comprised of 9 accounts that had $1,932.8 million in total assets as of 6/30/16. • Returns reflect the reinvestment of all dividends and other earnings. Portfolio returns are net of all foreign reclaimable and nonreclaimable withholding taxes, if applicable. Withholding taxes are recognized on an accrual basis or cash basis depending on client and/or account type. Additional information regarding treatment of withholding taxes is available upon request. Returns shown gross of fees reflect the deduction of commissions paid, but are gross of all other expenses. Net-of-fees returns are calculated by deducting the highest applicable advisory fee from the monthly gross composite return. The actual fees paid by a client may vary based on assets under management and other factors. A client’s return will be reduced by investment management fees and other expenses incurred in the management of a client’s account. Investment advisory fees are described in Part 2 of the ADV. Investment returns and the actual value of each client account will fluctuate, and at any given time an account could be worth more or less than the amount invested. • The benchmark selected for the composite is intended to provide a method to compare the composite’s performance to an index including securities that are generally similar to those that are included in the composite. However, composite holdings (and, accordingly, risk and volatility) may differ significantly from the securities tracked by its benchmark.

2 Benchmark returns have been taken from published sources.

3 As of June 30, 2016.

4 Actual composite return from April 1, 2016 through June 30, 2016.

5 Data regarding sector diversification reflects current ownership information only and is not intended to represent any past, present or future investment recommendation. Sector weightings are as of 7/1/16.


CoreFixedIncomeSD

Past performance is no guarantee of future results. Returns are presented on a dollar-weighted basis and may be impacted by ongoing market volatility. Please inquire for more current performance information.

1 The Core Fixed Income composite consists of portfolios seeking to provide current income consistent with preservation of capital. The portfolios primarily invest in U.S. investment-grade debt securities which include corporate debt securities, U.S. government securities, mortgage-backed and other asset-backed securities. Portfolios within this composite may invest in debt securities with varying maturities and can invest in securities of companies of any size issued by companies in a variety of sectors and industries and reflect portfolio duration and structure characteristics that are benchmarked to the Barclays U.S. Aggregate Bond Index. The Core Fixed Income composite was created March 28, 2005. The performance presentation is in U.S. dollars.

Effective July 1, 2015 the composite definition/description was revised in order to provide further clarity of the composite’s investment strategy.

Core Fixed Income composite is comprised of 9 accounts that had $1,932.8 million in total assets as of 6/30/16. • Returns reflect the reinvestment of all dividends and other earnings. Portfolio returns are net of all foreign reclaimable and nonreclaimable withholding taxes, if applicable. Withholding taxes are recognized on an accrual basis or cash basis depending on client and/or account type. Additional information regarding treatment of withholding taxes is available upon request. Returns shown gross of fees reflect the deduction of commissions paid, but are gross of all other expenses. Net-of-fees returns are calculated by deducting the highest applicable advisory fee from the monthly gross composite return. The actual fees paid by a client may vary based on assets under management and other factors. A client’s return will be reduced by investment management fees and other expenses incurred in the management of a client’s account. Investment advisory fees are described in Part 2 of the ADV. Investment returns and the actual value of each client account will fluctuate, and at any given time an account could be worth more or less than the amount invested. • The benchmark selected for the composite is intended to provide a method to compare the composite’s performance to an index including securities that are generally similar to those that are included in the composite. However, composite holdings (and, accordingly, risk and volatility) may differ significantly from the securities tracked by its benchmark.

2 Benchmark returns have been taken from published sources.

3 As of June 30, 2016.

4 Actual composite return from April 1, 2016 through June 30, 2016.

5 Data regarding sector diversification reflects current ownership information only and is not intended to represent any past, present or future investment recommendation. Sector weightings are as of 7/1/16.


Susan K. Regan   Susan K. Regan
  Vice President, Portfolio Manager

Ms. Regan is portfolio manager of the firm’s fixed income institutional accounts and Limited-Term Bond mutual funds. She has served in this role since May 2015, and as co-portfolio manager since 2014. She assumed assistant portfolio manager responsibilities in 2010. She joined the firm as a fixed income investment analyst and trader in 2007.

Prior to joining Waddell & Reed in 2007, Ms. Regan was a vice president and fixed income trading manager for Commerce Bank.

Ms. Regan earned a BA in Economics and an MA in Economics from the University of Missouri at Columbia.


Sabrina K. Saxer   Sabrina K. Saxer
  Vice President, Assistant Portfolio Manager

Ms. Saxer is assistant portfolio manager and specializes in taxable fixed income and credit research. She has served in this role since May 2015. She held assistant portfolio manager responsibilities for the firm’s money market funds from 2008 to 2015. She joined the firm as a fixed income investment analyst in 1998, working primarily on money market credit analysis and money market trading.

Prior to joining Waddell & Reed in 1998, Ms. Saxer was affiliated with investment banker George K. Baum & Company as an assistant vice president of accounting.

Ms. Saxer earned a BS in Accounting from the Henry W. Bloch School of Business and Public Administration, University of Missouri at Kansas City.  

Past performance is no guarantee of future results. Returns are presented on a dollar-weighted basis and may be impacted by ongoing market volatility. Please inquire for more current performance information.

1 The Core Fixed Income composite consists of portfolios seeking to provide current income consistent with preservation of capital. The portfolios primarily invest in U.S. investment-grade debt securities which include corporate debt securities, U.S. government securities, mortgage-backed and other asset-backed securities. Portfolios within this composite may invest in debt securities with varying maturities and can invest in securities of companies of any size issued by companies in a variety of sectors and industries and reflect portfolio duration and structure characteristics that are benchmarked to the Barclays U.S. Aggregate Bond Index. The Core Fixed Income composite was created March 28, 2005. The performance presentation is in U.S. dollars.

Effective July 1, 2015 the composite definition/description was revised in order to provide further clarity of the composite’s investment strategy.

Core Fixed Income composite is comprised of 9 accounts that had $1,932.8 million in total assets as of 6/30/16. • Returns reflect the reinvestment of all dividends and other earnings. Portfolio returns are net of all foreign reclaimable and nonreclaimable withholding taxes, if applicable. Withholding taxes are recognized on an accrual basis or cash basis depending on client and/or account type. Additional information regarding treatment of withholding taxes is available upon request. Returns shown gross of fees reflect the deduction of commissions paid, but are gross of all other expenses. Net-of-fees returns are calculated by deducting the highest applicable advisory fee from the monthly gross composite return. The actual fees paid by a client may vary based on assets under management and other factors. A client’s return will be reduced by investment management fees and other expenses incurred in the management of a client’s account. Investment advisory fees are described in Part 2 of the ADV. Investment returns and the actual value of each client account will fluctuate, and at any given time an account could be worth more or less than the amount invested. • The benchmark selected for the composite is intended to provide a method to compare the composite’s performance to an index including securities that are generally similar to those that are included in the composite. However, composite holdings (and, accordingly, risk and volatility) may differ significantly from the securities tracked by its benchmark

2 Benchmark returns have been taken from published sources.

3 As of June 30, 2016.

4 Actual composite return from April 1, 2016 through June 30, 2016.

5 Data regarding sector diversification reflects current ownership information only and is not intended to represent any past, present or future investment recommendation. Sector weightings are as of 7/1/16.