How did the Fund perform last year?

The Bond Fund had a lower-than-benchmark duration for most of the year. We favored mortgage-backed securities (MBS) and asset-backed securities (ABS). We overweighted credit risk and illiquidity risk to capture the yield premium. The Fund’s institutional shares outperformed the benchmark. The Fund’s lower duration for most of the year, and an underweight to government sectors were positives. Exposure to shorter-dated ABS with higher spreads helped bolster the yield.

The largest contributor was exposure to ABS and to agency MBS. Our underweight to Treasuries also contributed. Our exposure to longer duration in Treasuries detracted from performance. The short duration nature of our non-agency MBS holdings detracted as yields rose more sharply on the short end of the yield curve on expectations of multiple Fed rate hikes. We are keeping duration in line with the index for now. We continue to favor being overweight credit vs government, and exposure to illiquidity risk. A meaningful move above 5% for 10-year U.S. Treasuries would spur us to add duration. Markets remain highly liquid, reducing the cost of illiquidity exposure.

 Fund Statistics

Top 10 Holdings

(as a % of Net Assets) 

How did the Fund perform last year?

The Bond Fund had a lower-than-benchmark duration for most of the year. We favored mortgage-backed securities (MBS) and asset-backed securities (ABS). We overweighted credit risk and illiquidity risk to capture the yield premium. The Fund’s institutional shares outperformed the benchmark. The Fund’s lower duration for most of the year, and an underweight to government sectors were positives. Exposure to shorter-dated ABS with higher spreads helped bolster the yield.

The largest contributor was exposure to ABS and to agency MBS. Our underweight to Treasuries also contributed. Our exposure to longer duration in Treasuries detracted from performance. The short duration nature of our non-agency MBS holdings detracted as yields rose more sharply on the short end of the yield curve on expectations of multiple Fed rate hikes. We are keeping duration in line with the index for now. We continue to favor being overweight credit vs government, and exposure to illiquidity risk. A meaningful move above 5% for 10-year U.S. Treasuries would spur us to add duration. Markets remain highly liquid, reducing the cost of illiquidity exposure.

 Fund Statistics

Top 10 Holdings

(as a % of Net Assets) 

How did the Fund perform last year?

The Bond Fund had a lower-than-benchmark duration for most of the year. We favored mortgage-backed securities (MBS) and asset-backed securities (ABS). We overweighted credit risk and illiquidity risk to capture the yield premium. The Fund’s institutional shares outperformed the benchmark. The Fund’s lower duration for most of the year, and an underweight to government sectors were positives. Exposure to shorter-dated ABS with higher spreads helped bolster the yield.

The largest contributor was exposure to ABS and to agency MBS. Our underweight to Treasuries also contributed. Our exposure to longer duration in Treasuries detracted from performance. The short duration nature of our non-agency MBS holdings detracted as yields rose more sharply on the short end of the yield curve on expectations of multiple Fed rate hikes. We are keeping duration in line with the index for now. We continue to favor being overweight credit vs government, and exposure to illiquidity risk. A meaningful move above 5% for 10-year U.S. Treasuries would spur us to add duration. Markets remain highly liquid, reducing the cost of illiquidity exposure.

 Fund Statistics

Top 10 Holdings

(as a % of Net Assets) 

How did the Fund perform last year?

During the second quarter of 2026, we became more focused on liquidity and rolling short-term maturities as market dynamics led to increasing yields. We allowed weighted average maturity to decrease naturally. As pressure increased on the Federal Reserve to raise its policy rate, we lowered our overall portfolio duration. The Select shares of our Government Securities Money Market Fund were ranked 43rd percentile by Lipper for the final three months of the period while the Administrative shares of our U.S. Treasury Fund were ranked 86th percentile. Instead of extending duration late in that quarter, we invested in repurchase agreements to position the funds to quickly take advantage of any rate hike. We increased SEC yield by 9 and 5 basis points, respectively, by well-timed adjustments in yield curve positions. Interest rate cuts were priced into the market early in 2026. Purchases made during that period created a slight yield drag. Three more interest rate hikes are priced into the market through 2027, but we still think it is early to extend duration. We are positioned shorter, with more flexibility, than peers.

Credit Rating

(as a % of Net Assets) 

Portfolio Composition

(as a % of Net Assets)

Material Fund Changes

There were no material fund changes during the reporting period.

What were the Fund's costs for the last year?

(based on a $10,000 investment)

 Fund Statistics

Top 10 Holdings

(as a % of Net Assets) 

How did the Fund perform last year?

During the second quarter of 2026, we became more focused on liquidity and rolling short-term maturities as market dynamics led to increasing yields. We allowed weighted average maturity to decrease naturally. As pressure increased on the Federal Reserve to raise its policy rate, we lowered our overall portfolio duration. The Select shares of our Government Securities Money Market Fund were ranked 43rd percentile by Lipper for the final three months of the period while the Administrative shares of our U.S. Treasury Fund were ranked 86th percentile. Instead of extending duration late in that quarter, we invested in repurchase agreements to position the funds to quickly take advantage of any rate hike. We increased SEC yield by 9 and 5 basis points, respectively, by well-timed adjustments in yield curve positions. Interest rate cuts were priced into the market early in 2026. Purchases made during that period created a slight yield drag. Three more interest rate hikes are priced into the market through 2027, but we still think it is early to extend duration. We are positioned shorter, with more flexibility, than peers.

Credit Rating

(as a % of Net Assets) 

Portfolio Composition

(as a % of Net Assets)

Material Fund Changes

There were no material fund changes during the reporting period.

What were the Fund's costs for the last year?

(based on a $10,000 investment)

 Fund Statistics

Top 10 Holdings

(as a % of Net Assets) 

How did the Fund perform last year?

Our options overlay balances risk and reward. The Fund’s put options lower volatility relative to the broader market while our disciplined approach to call writing helps preserve upside capture during rallies. The Fund underperformed its benchmark by more than 700 basis points. The Fund tends to underweight the low-yielding information technology (IT) sector because of our mandate to generate meaningful dividend income. This detracted, particularly during the second quarter of 2026, when IT stocks returned more than 40%, vastly outperforming the S&P 500 Index and our benchmark.

Performance benefited from stock picking in the IT and consumer discretionary sectors, while stock picking in the energy, communication services, and financials sectors detracted. We believe markets and the economy are at a crossroads. Longer term, the AI capital expenditure supercycle should continue to support economic growth, particularly in the U.S. In the near term, however, a major risk looms as oil prices and general inflation trend higher as a result of the war in Iran. As such, the Fund’s positioning reflects a relatively neutral outlook.

 Fund Statistics

Top 10 Holdings

(as a % of Net Assets) 

How did the Fund perform last year?

Our options overlay balances risk and reward. The Fund’s put options lower volatility relative to the broader market while our disciplined approach to call writing helps preserve upside capture during rallies. The Fund underperformed its benchmark by more than 700 basis points. The Fund tends to underweight the low-yielding information technology (IT) sector because of our mandate to generate meaningful dividend income. This detracted, particularly during the second quarter of 2026, when IT stocks returned more than 40%, vastly outperforming the S&P 500 Index and our benchmark.

Performance benefited from stock picking in the IT and consumer discretionary sectors, while stock picking in the energy, communication services, and financials sectors detracted. We believe markets and the economy are at a crossroads. Longer term, the AI capital expenditure supercycle should continue to support economic growth, particularly in the U.S. In the near term, however, a major risk looms as oil prices and general inflation trend higher as a result of the war in Iran. As such, the Fund’s positioning reflects a relatively neutral outlook.

 Fund Statistics

Top 10 Holdings

(as a % of Net Assets) 

How did the Fund perform last year?

Our options overlay balances risk and reward. The Fund’s put options lower volatility relative to the broader market while our disciplined approach to call writing helps preserve upside capture during rallies. The Fund underperformed its benchmark by more than 700 basis points. The Fund tends to underweight the low-yielding information technology (IT) sector because of our mandate to generate meaningful dividend income. This detracted, particularly during the second quarter of 2026, when IT stocks returned more than 40%, vastly outperforming the S&P 500 Index and our benchmark.

Performance benefited from stock picking in the IT and consumer discretionary sectors, while stock picking in the energy, communication services, and financials sectors detracted. We believe markets and the economy are at a crossroads. Longer term, the AI capital expenditure supercycle should continue to support economic growth, particularly in the U.S. In the near term, however, a major risk looms as oil prices and general inflation trend higher as a result of the war in Iran. As such, the Fund’s positioning reflects a relatively neutral outlook.

 Fund Statistics

Top 10 Holdings

(as a % of Net Assets) 

How did the Fund perform last year?

The Fund’s duration was slightly higher than its benchmark for most of the year, allowing it to drift naturally toward a lower target rather than through active shifts. We favored mortgage-backed securities (MBS) and asset-backed securities (ABS) over U.S. Treasuries and agencies. The goal was to capture excess yield on widened spreads in mortgage and securitized markets. The Fund outperformed its benchmark. The main contributor was sector allocation, specifically an underweight to government securities plus an overweight to MBS and ABS. Spreads on agency MBS tightened significantly during the year. However, longer-than-benchmark portfolio duration, particularly longer-dated Treasuries, detracted from performance as markets began to anticipate higher rates.

This strategy’s focus is to avoid adding duration. Being close to the benchmark is acceptable, combined with allowing for duration to drift lower naturally over time. We continue to hold overweights toward securitized products as we see more room for spreads there to tighten. We’re watching corporate credit exposure as we seek opportunities to add exposure.

 Fund Statistics

Top 10 Holdings

(as a % of Net Assets) 

How did the Fund perform last year?

The Fund’s duration was slightly higher than its benchmark for most of the year, allowing it to drift naturally toward a lower target rather than through active shifts. We favored mortgage-backed securities (MBS) and asset-backed securities (ABS) over U.S. Treasuries and agencies. The goal was to capture excess yield on widened spreads in mortgage and securitized markets. The Fund outperformed its benchmark. The main contributor was sector allocation, specifically an underweight to government securities plus an overweight to MBS and ABS. Spreads on agency MBS tightened significantly during the year. However, longer-than-benchmark portfolio duration, particularly longer-dated Treasuries, detracted from performance as markets began to anticipate higher rates.

This strategy’s focus is to avoid adding duration. Being close to the benchmark is acceptable, combined with allowing for duration to drift lower naturally over time. We continue to hold overweights toward securitized products as we see more room for spreads there to tighten. We’re watching corporate credit exposure as we seek opportunities to add exposure.

 Fund Statistics

Top 10 Holdings

(as a % of Net Assets) 

How did the Fund perform last year?

The Fund’s duration was slightly higher than its benchmark for most of the year, allowing it to drift naturally toward a lower target rather than through active shifts. We favored mortgage-backed securities (MBS) and asset-backed securities (ABS) over U.S. Treasuries and agencies. The goal was to capture excess yield on widened spreads in mortgage and securitized markets. The Fund outperformed its benchmark. The main contributor was sector allocation, specifically an underweight to government securities plus an overweight to MBS and ABS. Spreads on agency MBS tightened significantly during the year. However, longer-than-benchmark portfolio duration, particularly longer-dated Treasuries, detracted from performance as markets began to anticipate higher rates.

This strategy’s focus is to avoid adding duration. Being close to the benchmark is acceptable, combined with allowing for duration to drift lower naturally over time. We continue to hold overweights toward securitized products as we see more room for spreads there to tighten. We’re watching corporate credit exposure as we seek opportunities to add exposure.

 Fund Statistics

Top 10 Holdings

(as a % of Net Assets) 

How did the Fund perform last year?

We started the period with slightly higher-than-benchmark duration. As the year progressed, we targeted toward a neutral duration. We increased exposure to mortgage-backed securities as credit spreads tightened and we relied on the emerging market debt (EMD) and high yield sectors for additional return. The Fund outperformed the benchmark. Major contributors were the high yield and EMD sectors, whose returns were much higher than the core sectors.

High yield and EMD showed significant spread tightening, leading to major price increases. Both sectors contain large exposure to energy securities, which gained from global price increases. EMD benefited from more capital-friendly governments. The Treasury sector experienced significant volatility and was hurt by its long duration positioning. The U.S. economy remains strong, supported by a stable labor market, while inflation is unlikely to ease soon. Rising federal debt and debt-service costs will require greater Treasury issuance, pointing to higher interest rates. Accordingly, the Fund will maintain a slightly shorter duration while retaining exposure to risk sectors.

 Fund Statistics

Top 10 Holdings

(as a % of Net Assets) 

How did the Fund perform last year?

We started the period with slightly higher-than-benchmark duration. As the year progressed, we targeted toward a neutral duration. We increased exposure to mortgage-backed securities as credit spreads tightened and we relied on the emerging market debt (EMD) and high yield sectors for additional return. The Fund outperformed the benchmark. Major contributors were the high yield and EMD sectors, whose returns were much higher than the core sectors.

High yield and EMD showed significant spread tightening, leading to major price increases. Both sectors contain large exposure to energy securities, which gained from global price increases. EMD benefited from more capital-friendly governments. The Treasury sector experienced significant volatility and was hurt by its long duration positioning. The U.S. economy remains strong, supported by a stable labor market, while inflation is unlikely to ease soon. Rising federal debt and debt-service costs will require greater Treasury issuance, pointing to higher interest rates. Accordingly, the Fund will maintain a slightly shorter duration while retaining exposure to risk sectors.

 Fund Statistics

Top 10 Holdings

(as a % of Net Assets) 

How did the Fund perform last year?

We started the period with slightly higher-than-benchmark duration. As the year progressed, we targeted toward a neutral duration. We increased exposure to mortgage-backed securities as credit spreads tightened and we relied on the emerging market debt (EMD) and high yield sectors for additional return. The Fund outperformed the benchmark. Major contributors were the high yield and EMD sectors, whose returns were much higher than the core sectors.

High yield and EMD showed significant spread tightening, leading to major price increases. Both sectors contain large exposure to energy securities, which gained from global price increases. EMD benefited from more capital-friendly governments. The Treasury sector experienced significant volatility and was hurt by its long duration positioning. The U.S. economy remains strong, supported by a stable labor market, while inflation is unlikely to ease soon. Rising federal debt and debt-service costs will require greater Treasury issuance, pointing to higher interest rates. Accordingly, the Fund will maintain a slightly shorter duration while retaining exposure to risk sectors.

 Fund Statistics