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Fund Overview
Investment Objective
The William Blair Low Duration Fund seeks to maximize total return by investing in a diversified portfolio of investment grade low duration debt securities.
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Fund Characteristics
Duration: The Fund’s weighted average effective duration is expected to be between 0.5 to 2 years.
Maturity Range: The Fund’s average maturity range is expected to be generally less than 2 years.
Credit Quality: The Fund will invest primarily in investment grade securities rated single A or higher.
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Investment Approach
The Fund seeks to outperform the total return of the Merrill Lynch 1-Year U.S. Treasury Note Index (the Fund’s “benchmark”) through an actively managed diversified portfolio of securities. The Fund’s Portfolio Managers will emphasize individual security selection, as well as shifts in the Fund’s portfolio among market sectors. In addition, the Managers will also actively manage the Fund’s average duration relative to the Benchmark.
- Primary emphasis on quality, liquidity and diversification.
- The broad sectors represented in the portfolio will include corporate debt securities issued by domestic and foreign companies, mortgage-backed securities and asset-backed securities.
- The Fund will invest exclusively in investment grade securities rated in the highest three categories at time of purchase by at least one of the following three nationally recognized statistical rating organizations: Fitch Ratings, Moody’s Investors Service, Inc. and Standard & Poor’s, a division of The McGraw-Hill Companies, Inc.
What Makes this Fund Different?
- The William Blair Fixed Income Team seeks to exploit the inefficiencies in the bond market by utilizing a disciplined investment approach. The total return strategy is built around experienced sector specialists, who apply a bottom-up fundamental analysis portfolio management methodology.
- The two primary performance factors are security selection and sector weights. To a lesser extent, top-down analysis, duration and yield curve positioning are incorporated with their style.
- Sector specialists are responsible for the bond holdings in their sector. Sector specialists are ultimately looking for the best relative performance opportunities on a risk-adjusted basis. These specialists are supported by the resources of the fixed income platform and William Blair’s Investment Management division.
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The Fund’s investments in mortgage-backed securities are subject to prepayment risk. Prepayment of high interest rate mortgage-backed securities during times of declining interest rates will tend to lower the return of the Fund and may even result in losses if the prepaid securities were acquired at a premium.
To the extent the Fund invests in short-term U.S. dollar-denominated foreign money market instruments, investing in foreign securities may involve a greater degree of risk than investing in domestic securities due to the possibility of, but not limited to, less publicly available information, more volatile markets, less securities regulation, less favorable tax provisions, war and expropriation.
As interest rates rise, bond prices will fall and bond funds become more volatile.
Investment return, principal value, and yields of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost.
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