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Summary
- The fund posted returns of 2.15% (Institutional shares) for the third quarter of 2025.
- Structured products, emerging market debt, and agency mortgage-backed securities (MBS) contributed to performance.
- During the quarter, duration (interest rate sensitivity) moved to a neutral position and was focused on the “belly” and long end of the yield curve.
- The fund’s underweight allocation to 10-year U.S. Treasuries was th…
Summary
- The fund posted returns of 2.15% (Institutional shares) for the third quarter of 2025.
- Structured products, emerging market debt, and agency mortgage-backed securities (MBS) contributed to performance.
- During the quarter, duration (interest rate sensitivity) moved to a neutral position and was focused on the “belly” and long end of the yield curve.
- The fund’s underweight allocation to 10-year U.S. Treasuries was the largest detractor, with the “belly” of the yield curve rallying.
- We tactically rotated across spread sectors as we continued to look for attractive, high-quality sources of income.
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- The fund posted returns of 2.15% (Institutional shares) and 2.09% (Investor A shares, without sales charge) for the third quarter of 2025.
- Structured products, emerging market debt, and agency mortgage-backed securities (MBS) contributed to
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Quick Insights
Overweight securitized products and emerging market debt boosted returns, while underweight U.S. Treasuries and investment grade credit detracted due to tightening spreads.
The fund is at neutral duration (5.87 years), emphasizing the ‘belly’ and long end, expecting the yield curve to flatten as terminal rates settle below market pricing.
BFMCX is tactically rotating among high-quality spread sectors, reducing U.S. rates-steepening bias, and seeking attractive income sources while remaining selective in emerging market debt.