The Fund invests primarily in investment-grade securities and employs tactical shifts in sector allocation, interest rate/yield curve risk and credit quality, attempting to capture return across credit, interest rate and volatility cycles.
- Investment-grade, U.S. dollar-based, absolute return-oriented strategy
- Ability to manage and hedge duration based on market conditions
- Portfolio construction and rebalancing are driven by investment decisions, not benchmark changes
- Expert portfolio management team has extensive experience investing in corporate, securitized and interest rate products
- Adviser is majority-owned by its employees
- $5,000 initial investment for regular accounts
- $1,500 initial investment for IRA or other tax-deferred accounts
- $100 for subsequent investments
Quarter-End Performance (as of 3/31/19) (%)
|1 MONTH||QTD||YTD||1 YEAR||3 YEAR||5 YEAR||7 YEAR||10 YEAR||
|Bloomberg Barclays U.S. Aggregate Bond Index||1.92||2.94||2.94||4.48||-||-||-||-||2.88|
|OSTRX||Bloomberg Barclays U.S. Aggregate Bond Index|
Gross/Net expense ratio as of 3/31/2018: 0.71%/0.76%. The Adviser has contractually agreed to waive certain fees through June 30, 2019. The net expense ratio is applicable to investors. The net expense ratio is higher than the gross expense ratio based on recoupment of previously waived fees.
Performance data quoted represent past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be higher or lower than the performance quoted.
Rates of return for periods greater than one year are annualized.
We believe the fixed income universe is replete with risk-reward asymmetries that can create tremendous investment opportunities across a variety of asset classes. The investment grade universe in particular has the benefit of offering high quality credit exposure and deep, liquid markets. We use a top down strategy to drive our positioning and in-depth, fundamental research to identify our holdings.
First, we develop our macroeconomic view, which guides our desired interest rate targets and curve exposures. This view is based on a systematic assessment of market factors including central bank policies, economic data, asset flows and market technicals. As part of this process, we estimate how policy shifts may impact these data, and how in turn such changes may affect Treasury and swap yields. We then assess how various fixed income asset classes are likely to perform, in both absolute and relative terms, before arriving at our target allocation to each. We seek to capitalize on the relatively low correlations between these asset classes – in particular between mortgages and corporates – to harness diversification benefits.
Once our target allocations are established, we incorporate deep fundamental analyses on securities that would create the portfolio. In mortgages, for instance, alpha can be generated by coupling a solid understanding of prepayment behavior of collateral with the specific cash flow structure that can extract the most value. For corporate bonds, we can perform cross-sectional analysis of industries and ratings, as well as fundamental analysis of individual issuers, to identify securities that offer compelling value relative to their risk. On a limited basis, we may also invest opportunistically in other asset classes when they appear more compelling from a risk/reward standpoint than our core areas of investment.
Over time, our goal is for the portfolio’s investments to reflect a combination of assets with reduced correlations and attractive return profiles while still meeting our interest rate and duration targets. We seek to deliver compelling absolute returns by adjusting these rate and curve exposures, varying our sector weights based on economic and market cycles, and continually assessing the valuations of our individual holdings.
Vice President & Senior Portfolio ManagerView Bio
Vice President & Senior Portfolio Manager
Eddy Vataru graduated from California Institute of Technology (B.S. Chemistry & Economics) and from Olin Business School at Washington University in St. Louis (M.B.A.). Mr. Vataru holds the Chartered Financial Analyst designation.
Prior to joining Osterweis Capital Management in 2016, Mr. Vataru worked in senior management positions at Incapture, LLC and Citadel, LLC. Before that he spent over 11 years at BlackRock (formerly Barclays Global Investors), where his last position was as Managing Director and Head of U.S. Rates and Mortgages. While in this role, BGI worked with the U.S. Treasury in implementing its Agency MBS Purchase Program, buying mortgages for the U.S. government from 2008-2009.
Mr. Vataru is a principal of the firm and the lead Portfolio Manager for the total return fixed income strategy. He is also a Portfolio Manager for the flexible balanced strategy.
Portfolio ManagerView Bio
John Sheehan graduated from Georgetown University (B.A. Economics). Mr. Sheehan holds the Chartered Financial Analyst designation.
Prior to joining Osterweis Capital Management in 2018, Mr. Sheehan spent more than 20 years working at Citigroup, first as Managing Director responsible for Investment Grade Syndicate in New York City, where he advised issuers on accessing funding in the corporate bond market. Later at Citigroup, he was Managing Director in charge of West Coast Investment Grade Sales in San Francisco, where he covered several of the largest U.S. investment grade credit investors.
Mr. Sheehan is a Portfolio Manager for the total return fixed income strategy. He is also a Portfolio Manager for the flexible balanced strategy.
Portfolio ManagerView Bio
Daniel Oh graduated from Columbia University (B.A. Economics/Political Science) and from the Stephen M. Ross School of Business at the University of Michigan (M.B.A.).
Prior to joining Osterweis Capital Management in 2018, Mr. Oh was a Director of Fixed Income Portfolio Management at Estabrook Capital Management in New York City. Before that he was at Merrill Lynch & Co. as an Associate in Prime/Alt-a-Non-Agency Mortgage Trading. Prior to that he held positions at Seneca Financial Group and Morgan Stanley.
Mr. Oh is a Portfolio Manager for the total return fixed income strategy. He is also a Portfolio Manager for the flexible balanced strategy.
The Adviser has contractually agreed to waive certain fees through December 31, 2018.
The Osterweis Funds are available by prospectus only. The Funds’ investment objectives, risks, charges and expenses must be considered carefully before investing. The summary and statutory prospectuses contain this and other important information about the Funds. You may obtain a summary or statutory prospectus by calling toll free at (866) 236-0050, or by visiting www.osterweis.com/statpro. Please read the prospectus carefully before investing to ensure the Fund is appropriate for your goals and risk tolerance.
Mutual fund investing involves risk. Principal loss is possible.
The Osterweis Total Return Fund may invest in fixed income securities which are subject to credit, default, extension, interest rate and prepayment risks. It may also make investments in derivatives that may involve certain costs and risks such as liquidity, interest rate, market, credit, management and the risk that a position could not be closed when most advantageous. The Fund may invest in in debt securities that are un-rated or rated below investment grade. Lower-rated securities may present an increased possibility of default, price volatility or illiquidity compared to higher-rated securities. Investments in foreign and emerging market securities involve greater volatility and political, economic and currency risks and differences in accounting methods. These risks may increase for emerging markets. Leverage may cause the effect of an increase or decrease in the value of the portfolio securities to be magnified and the fund to be more volatile than if leverage was not used. Investments in preferred securities have an inverse relationship with changes in the prevailing interest rate. Investments in Asset Backed and Mortgage Backed Securities include additional risks that investors should be aware of such as credit risk, prepayment risk, possible illiquidity and default, as well as increased susceptibility to adverse economic developments. It may also make investments in derivatives that may involve certain costs and risks such as liquidity, interest rate, market, credit, management and the risk that a position could not be closed when most advantageous. The Fund may invest in municipal securities which are subject to the risk of default.
While the fund is no-load, management fees and other expenses still apply. Please refer to the prospectus for more information.
Osterweis Capital Management is the adviser to the Osterweis Funds, which are distributed by Quasar Distributors, LLC.