COLLEGE PLANNING | ESTATE PLANNING | INVESTING | PORTFOLIO SPOTLIGHT | REAL ESTATE | RETIREMENT | TAX PLANNING
Allspring Core Plus Bond Fund
TICKER ASSETS
WIPIX $ 5.5 billion
PERFORMANCE YTD 1 yr . 3 yr . 5 yr . 10 yr . 15 yr . -1.08 % 2.36 % -2.85 % 1.87 % 2.75 % 4.16 %
TOP 5 HOLDINGS Ginnie Mae II Pool , 6.00 , 1-22-2054 ; U . S . Treasurys , 5.43 , 1-23-2024 ; Federal Home Loan Mortgage Corporation ( FHLMC ) 30-year Pool # si2032 , 2.50 , 6-1-2051 ; U . S . Treasurys , 0.01 , 2-6-2024 ; U . S . Treasurys , 4.88 , 11-30-2025
CONTACT INFO
800-222-8222 • allspringglobal . com
BOND SECTOR ALLOCATION ( As a % of portfolio ) Securitization 46 % U . S . Corp . Investment Grade 25 % U . S . Treasury & Agency 13 % U . S . High-Yield Bond 4 % Emerging Markets Bond 3 % Global Government Bond 3 % European Corp . Invest . Grade 2 % European High Yield Bond 2 % Foreign Currency 2 %
Performance and asset numbers as of 2 / 8 / 24 . Holdings as of 12 / 31 / 23 . Performance figures are for the Institutional class shares . Sources : Allspring and Morningstar .
Riding The Curve In Fixed Income
The Allspring Core Plus Bond Fund is positioned to take advantage of the changing interest rate environment . By Jeff Schlegel
THE PAST 15 OR SO YEARS HAVEN ’ T BEEN KIND TO bond investors seeking income . For starters , coupon rates across much of the U . S . bond market dwindled significantly after the Federal Reserve slashed its target federal funds rate to near zero percent to help revive the economy following the financial crisis .
Then came the annus horribilis that was 2022 , as the Fed began to aggressively raise its target rate to squelch rampant inflation . The target rate ’ s direction influences other interest rate movements , and when bond yields rise the price of existing bonds fall . That resulted in the worst year on record for U . S . bonds when the Bloomberg U . S . Aggregate Bond Index dropped 13 %. That followed a year when the index fell 1.5 %.
Conventional wisdom holds that bonds are a portfolio diversifier that supposedly zig when equities zag . However , in 2022 both stocks and bonds zagged . Or to be blunt , they both stank . Along with the bond market ’ s historic pratfall , the S & P 500 ( excluding dividends ) sank more than 19 %.
“ We acknowledge that in 2022 there was a high correlation between asset classes , and fixed income was disappointing in that when equity markets sell off you look to fixed income as a ballast ,” says Janet Rilling , a portfolio manager at the Allspring Core Plus Bond Fund since 2008 . “ But you have to look at what caused the selloff , and it was largely related to rates and the Fed hiking rates .”
That was then and this is now . After bond prices rallied strongly in last year ’ s fourth quarter , in large part thanks to a Fed policy pivot toward expected rate cuts in 2024 , the fixed-income landscape looks more appealing in terms of current yields and , if rates do fall , potential price appreciation on existing bonds .
“ When you look at where yields are today versus a historical basis , we think yields are attractive ,” says Rilling , who heads the Plus Fixed Income team at Allspring Global Investments . She notes that the yield on the 10-year Treasury , which had dipped below 1 % in 2020 , recently exceeded 4 %. “ There is yield available , and that ’ s from the highest-quality part of the market . You
MARCH 2024 | FINANCIAL ADVISOR MAGAZINE | 45