Performance

April proved to be a volatile month for U.S. Treasuries, as “Liberation Day” jolted markets into recognizing the gravity of the President’s push to overhaul global trade. Initially, Treasuries rallied, with 10-year yields dropping below 3.90%—their lowest level since before the election—as investors sought safety. However, momentum quickly reversed, and yields surged to 4.5% before ending the month at 4.16%. The uncertainty surrounding the new tariffs weighed on risk sentiment, driving credit spreads wider. As a result, the Fund declined by 0.6%* in April.   March inflation data delivered a mixed message for fixed income markets. Headline CPI fell 0.1% month-over-month, driven by a 6.3% drop in gasoline prices, but food prices rose 0.4%, and core CPI—excluding food and energy—still increased 0.1% on the month and 2.8% year-over-year, reflecting persistent underlying inflation. Meanwhile, PPI declined 0.4%, indicating easing pressure at the producer level. Both the ISM Manufacturing and Services PMIs declined, pointing to a slowdown in business activity. Job openings also fell to 7.57 million, below expectations. However, nonfarm payrolls surprised to the upside with a 228k gain (vs 140k expected), though the unemployment rate ticked up slightly. Despite the strong headline payroll number, underlying factors suggest temporary strength — including weather-related rebounds, resumed government grants, and pre-tariff hiring. Overall, the labor market appears healthy, and the Fed may be in no rush to intervene following the market selloff driven by Trump’s new tariff policies. We made no new trades in April, apart from processing a minor redemption. Our current investment strategy remains focused on keeping the Fund fully invested. As of the end of the month, the Fund maintained an average duration of 5.4 years and an average yield-to-maturity of 7.15%. * Net performance, B1 shares.