Westcore Plus Bond Fund

Fixed Income

Style: Intermediate-Term Bond Retail Class: WTIBX Institutional Class: WIIBX

Investment Strategy

The Westcore Plus Bond Fund invests primarily in investment-quality bonds of varying maturities.

To identify attractive investments for the portfolio, we look for corporate bonds and mortgage- and asset-backed securities of mostly investment-grade ratings. We thoroughly analyze each security and choose only those we believe offer solid fundamentals and long-term stability. The result is a portfolio designed to provide our shareholders monthly income and a long-term rate of return consistent with preservation of capital.

This Fund is available in both the retail and institutional class.

Management Team

We believe that an emphasis on income and security selection rather than market timing of interest rates is the best way to consistently deliver strong risk-adjusted returns for our clients. – Kenneth A. Harris, CFA

Kenneth A. Harris, CFA

Kenneth A. Harris, CFA

Partner, Director of Fixed Income Portfolio Management, Portfolio Manager

Troy A. Johnson, CFA

Troy A. Johnson, CFA

Partner, Director of Fixed Income Research, Portfolio Manager, Credit Research Analyst

Fund Information & Investment Minimums

Retail Class Institutional Class2
Ticker WTIBX WIIBX
CUSIP 957904675 957904485
Inception Date 6/1/1988 9/28/2007
Distribution Frequency Monthly Monthly
Minimum to open a new regular account: $2,500 $250,000
Minimum to open a new retirement, education1 or UGMA/UTMA account: $1,000 $250,000
Minimum to open an Automatic Investment Plan Account: $1,000 $250,000
Automatic Investments: $25/month per Fund -
Minimum to add to any type of account: $25 -
Retail Class
Ticker WTIBX
CUSIP 957904675
Inception Date 6/1/1988
Minimum to open a new regular account: $2,500
Minimum to open a new retirement, education1 or UGMA/UTMA account: $1,000
Minimum to open an Automatic Investment Plan Account: $1,000
Automatic Investments: $25/month per Fund
Minimum to add to any type of account: $25
Institutional Class2
Ticker WIIBX
CUSIP 957904485
Inception Date 9/28/2007
To open a new regular account: $250,000
To open a new retirement, education1 or UGMA/UTMA account: $250,000
To open an Automatic Investment Plan Account: $250,000
The Westcore Flexible Income and Plus Bond Funds are subject to additional risk in that they may invest in high-yield/high-risk bonds and may be subject to greater levels of liquidity risk. Additionally, investing in bonds entails interest rate risk and credit risk.

The risk profile spectrum provides an approximate illustration of the relative volatility of the Westcore Family of Funds determined by using each fund’s 5-year annualized standard deviation as of 12/31/17. If the fund’s retail class has less than five years of operations as of that date, the standard deviation of the fund’s Morningstar category is used instead. Standard deviation is a statistical measure of the historical volatility of a fund, which we believe can assist in classifying a fund within a risk spectrum. The placement on the risk spectrum (Low to High) is based on the comparison of each Fund’s standard deviation measure, as described above, in relation to the universe of funds with a 5-year standard deviation measure as obtained from a third-party fund database. We believe those measures are accurate but have not independently verified them. Please refer to the prospectus for each fund’s specific risks. Also a fund’s measure of volatility is subject to change without notice as market or economic conditions change, and such changes may include significant and nonrecurring volatility events. Historical volatility is not necessarily indicative of future volatility and there is no guarantee that in any time period any one fund will be more or less volatile than any other fund.

CFA is a trademark owned by CFA Institute.
Please see the prospectus for more detailed information regarding investment minimums. The Funds reserve the right to change the amount of these minimums from time to time or to waive them in whole or in part, including the right to waive the Institutional Class minimums, if in the Advisor’s sole opinion, the investor has adequate intent and availability of assets to reach a future level of investment in the Fund that is equal to or greater than the minimum.
1A description of the retirement and education accounts available for investment in the Westcore Funds may be found in the SAI for the Funds. Please call 800.392.CORE (2673) to request a free copy of the SAI or click here to download.
2 The minimum investment in the Institutional Class shares is $250,000. Investors generally may meet the minimum investment amount by aggregating multiple accounts with common ownership within the Fund. Common ownership includes individual and joint accounts as well as accounts where an investor has beneficial ownership through acting as a custodian for a minor account or as a beneficiary to a trust account. In addition, Institutional Class accounts offered through a financial intermediary may meet the $250,000 minimum investment amount by aggregating multiple accounts within the Fund, however each separate account must meet a minimum investment requirement of $10,000. Exceptions to the Institutional Class minimums may apply for qualified requirement plans and other account types with lower or no networking and/or omnibus fees charged to the Funds.
Past performance is no guarantee of future results.
Source: Lipper, Inc. The Best Fixed Income—Small Fund Group award is granted to the fund family with the lowest average decile ranking for Consistent Return over the 3-year period. To qualify, a fund family must have at least three fixed income funds and less than $63.5 billion in assets under management for 2016. Westcore Funds Funds ranked 1 out of 74 eligible companies for 2016.
From Thomson Reuters Lipper Awards, ©2017 Thomson Reuters. All rights reserved. Used by permission and protected by the Copyright Laws of the United States. The printing, copying, redistribution, or retransmission of this Content without express written permission is prohibited.
Lipper, a wholly owned subsidiary of Thomson Reuters, is a leading global provider of mutual fund information and analysis to fund companies, financial intermediaries and media organizations.
The Morningstar Rating for funds, or “star rating”, is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed end funds, and separate accounts) with at least a three-year history. Exchange–traded funds and open ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-,five-,and 10 year (if applicable) Morningstar Rating metrics. The weights are 100% three-year rating for 36-59 months of total returns, 60% five year rating/40% three-year rating for 60-119 months of total returns, and 50% 10 year rating/30% five-year rating/20% three year rating for 120 or more months of total returns. While the 10 year overall rating formula seems to give the most weight to the 10 year period, the most recent three–year period actually has the greatest impact because it is included in all three rating periods.
© 2017 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

Investment Team

Kenneth A. Harris, CFA
Kenneth A. Harris, CFA

Partner, Director of Fixed Income Portfolio Management, Portfolio Manager

2000 to Present: Denver Investments
1985 to 1999: Blue Cross and Blue Shield of Colorado, Treasurer
Education:

BBA – University of Arizona; MBA – University of Colorado at Denver
Member of CFA Institute and CFA Society Colorado

Troy A. Johnson, CFA
Troy A. Johnson, CFA

Partner, Director of Fixed Income Research, Portfolio Manager, Credit Research Analyst

2007 to Present: Denver Investments
2002 to 2007: Quixote Capital Management, Portfolio Manager and Analyst
1993 to 2002: Invesco Funds Group, Inc., Senior Fixed Income Analyst
Education:

BS – Montana State University; MS – University of Wisconsin
Member of CFA Institute and CFA Society of Colorado

Nicholas J. Foley
Nicholas J. Foley

Vice President, Portfolio Manager, Municipal Credit Analyst/Trader

2012 to Present: Denver Investments
2010 to 2011: Bank of the West/BNP Paribas Group, Associate Portfolio Manager and Lead Fixed Income Trader
2009 to 2010: Janus Capital Group, Financial Analyst
2004 to 2008: Washington Mutual Bank, Senior Analyst
Education:

BA - Gonzaga University

Darren G. Hewitson, CFA
Darren G. Hewitson, CFA

Partner, Portfolio Manager

2008 to Present: Denver Investments
2008: 180 Connect, Accountant
2007: Munro & Noble Solicitors and Estate Agents, Accountant
Education:

BAcc – University of Glasgow, Scotland
Member of CFA Institute and CFA Society Colorado

Steven G. Kindred, CFA, CPA
Steven G. Kindred, CFA, CPA

Vice President, Credit Research Analyst

2009 to Present: Denver Investments
2008 to 2009: Janus Capital Group, Equity Research Analyst
2007: Wasatch Advisors, Equity Analyst Intern
2003 to 2006: Deloitte & Touche LLP, Senior Auditor
Education:

BS and MAcc – Utah State University; MBA - Dartmouth College
Member of CFA Institute and CFA Society Colorado

William S. Oh, CFA, FRM
William S. Oh, CFA, FRM

Vice President, Securitized Debt Analyst/Trader

2012 to Present: Denver Investments
2010 to 2011: Nationwide Insurance, Finance Leadership Rotation Program
2009 to 2010: AEGON USA Investment Management, Corporate Credit Strategy Intern
2004 to 2008: One West Bank (Formerly Indymac Bank), Assistant Vice President, Buy-Side MBS & Whole Loan Trader
2002 to 2004: Bear Stearns Residential Mortgage, Business Development Analyst
2001 to 2002: Wells Fargo Bank, Premier Banking Officer and Trust Account Manager
Education:

BA – Claremont McKenna College; MBA – The University of Chicago
Member of CFA Institute and CFA Society Colorado

Daniel T. Schniedwind, CFA
Daniel T. Schniedwind, CFA

Vice President, Credit Research Analyst

2014 to Present: Denver Investments
2011 to 2014: AMI Asset Management, Credit Analyst
2010 to 2011: Mars Hill Partners, Analyst
2009: Oppenheimer & Co., Sales and Trading Intern
Education:

BA – Whittier College; MS – Indiana University
Member of CFA Institute and CFA Society of Colorado

Gregory M. Shea, CFA
Gregory M. Shea, CFA

Partner, Portfolio Manager, Credit Research Analyst

2008 to Present: Denver Investments
2004 to 2008: Lehman Brothers Asset Management, High Yield Credit Analyst
2003 to 2004: Banc of America Securities, Investment Banking Analyst
2001 to 2003: Bank of America, Bank Credit Analyst
Education:

BS & MSBA – Washington University
Member of CFA Institute and CFA Society Colorado

Daofu (Nick) Yu, CFA
Daofu (Nick) Yu, CFA

Vice President, Credit Research Analyst

2016 to Present: Denver Investments
2013 to 2016: Great West Financial, Credit Analyst/Portfolio Manager
2012 to 2013: Western Union, Foreign Exchange Trader
2011 to 2012: D.A. Davidson and Company, Research Associate
2006 to 2009: Oppenheimer Funds, Business Analyst-Operations
Education:

BS – University of Colorado; MS and MBA - University of Colorado at Denver
Member of CFA Institute and CFA Society Colorado

Drew D. Conrad, CFA
Drew D. Conrad, CFA

Vice President, Fixed Income Trader

2010 to Present: Denver Investments
2006 to 2008: SCM Advisors, High Yield and Leveraged Loan Trader and Analyst
2001 to 2006: AIG Investment Management, Fixed Income Analyst and High Yield Trader
Education:

BA – Rice University
Member of CFA Institute and CFA Society Colorado

Nicole J. Foote
Nicole J. Foote

Fixed Income Portfolio Administrator

2015 to Present: Denver Investments
2009 to 2014: Shenkman Capital Management, Client Service Associate, Portfolio Administrator
2008 to 2009: GE Asset Management, Trade Operations Specialist
2008: Evaluation Associates, Performance Analyst
2004 to 2008: Clayton Holdings, Senior Operations Analyst
Education:

BS – Colorado State University; MBA – University of Connecticut

CFA is a trademark owned by CFA Institute.
Greg M. Shea, CFA is a registered representative of ALPS Distributors, Inc.
The portfolio managers Westcore Plus Bond Fund are Kenneth A. Harris, CFA and Troy A. Johnson, CFA.

The risk profile spectrum provides an approximate illustration of the relative volatility of the Westcore Family of Funds determined by using each fund’s 5-year annualized standard deviation as of 12/31/17. If the fund’s retail class has less than five years of operations as of that date, the standard deviation of the fund’s Morningstar category is used instead. Standard deviation is a statistical measure of the historical volatility of a fund, which we believe can assist in classifying a fund within a risk spectrum. The placement on the risk spectrum (Low to High) is based on the comparison of each Fund’s standard deviation measure, as described above, in relation to the universe of funds with a 5-year standard deviation measure as obtained from a third-party fund database. We believe those measures are accurate but have not independently verified them. Please refer to the prospectus for each fund’s specific risks. Also a fund’s measure of volatility is subject to change without notice as market or economic conditions change, and such changes may include significant and nonrecurring volatility events. Historical volatility is not necessarily indicative of future volatility and there is no guarantee that in any time period any one fund will be more or less volatile than any other fund.

Past performance is no guarantee of future results.
Source: Lipper, Inc. The Best Fixed Income—Small Fund Group award is granted to the fund family with the lowest average decile ranking for Consistent Return over the 3-year period. To qualify, a fund family must have at least three fixed income funds and less than $63.5 billion in assets under management for 2016. Westcore Funds Funds ranked 1 out of 74 eligible companies for 2016.
From Thomson Reuters Lipper Awards, ©2017 Thomson Reuters. All rights reserved. Used by permission and protected by the Copyright Laws of the United States. The printing, copying, redistribution, or retransmission of this Content without express written permission is prohibited.
Lipper, a wholly owned subsidiary of Thomson Reuters, is a leading global provider of mutual fund information and analysis to fund companies, financial intermediaries and media organizations.
The Morningstar Rating for funds, or “star rating”, is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed end funds, and separate accounts) with at least a three-year history. Exchange–traded funds and open ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-,five-,and 10 year (if applicable) Morningstar Rating metrics. The weights are 100% three-year rating for 36-59 months of total returns, 60% five year rating/40% three-year rating for 60-119 months of total returns, and 50% 10 year rating/30% five-year rating/20% three year rating for 120 or more months of total returns. While the 10 year overall rating formula seems to give the most weight to the 10 year period, the most recent three–year period actually has the greatest impact because it is included in all three rating periods.
© 2017 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

View Performance as of:
Month-End   Quarter-End
  Monthly Returns (%)
Periods Ended: 1/31/2018
Annualized Returns (%)
Periods Ended: 1/31/2018
1 Month 3 Months YTD 1 Year 3 Years 5 Years 10 Years Since Inception
Westcore Plus Bond Fund -0.94 -0.30 -0.94 3.17 1.84 2.52 3.89 6.00
Westcore Plus Bond Fund Institutional -0.91 -0.26 -0.91 3.36 2.00 2.67 4.03 6.05
Bloomberg Barclays U.S. Aggregate Bond Index -1.15 -0.83 -1.15 2.15 1.14 2.01 3.71 6.31
  Monthly Returns (%)
Periods Ended: 12/31/2017
Annualized Returns (%)
Periods Ended: 12/31/2017
1 Month 3 Months YTD 1 Year 3 Years 5 Years 10 Years Since Inception
Westcore Plus Bond Fund 0.54 0.82 4.74 4.74 2.83 2.61 4.15 6.05
Westcore Plus Bond Fund Institutional 0.46 0.85 4.81 4.81 3.00 2.77 4.29 6.10
Bloomberg Barclays U.S. Aggregate Bond Index 0.46 0.39 3.54 3.54 2.24 2.10 4.01 6.37
Westcore Plus Bond Fund
Monthly Returns(%) as of 1/31/2018
1 Month -0.94
3 Months -0.30
YTD -0.94
Annualized Returns(%) as of 1/31/2018
1 Year 3.17
3 Years 1.84
5 Years 2.52
10 Years 3.89
Since Inception 6.00
Westcore Plus Bond Fund Institutional
Monthly Returns(%) as of 1/31/2018
1 Month -0.91
3 Months -0.26
YTD -0.91
Annualized Returns(%) as of 1/31/2018
1 Year 3.36
3 Years 2.00
5 Years 2.67
10 Years 4.03
Since Inception 6.05
Bloomberg Barclays U.S. Aggregate Bond Index
Monthly Returns(%) as of1/31/2018
1 Month -1.15
3 Months -0.83
YTD -1.15
Annualized Returns(%) as of 1/31/2018
1 Year 2.15
3 Years 1.14
5 Years 2.01
10 Years 3.71
Since Inception 6.31
Westcore Plus Bond Fund
Monthly Returns(%) as of 12/31/2017
1 Month 0.54
3 Months 0.82
YTD 4.74
Annualized Returns(%) as of12/31/2017
1 Year 4.74
3 Years 2.83
5 Years 2.61
10 Years 4.15
Since Inception 6.05
Westcore Plus Bond Fund Institutional
Monthly Returns(%) as of 12/31/2017
1 Month 0.46
3 Months 0.85
YTD 4.81
Annualized Returns(%) as of 12/31/2017
1 Year 4.81
3 Years 3.00
5 Years 2.77
10 Years 4.29
Since Inception 6.10
Bloomberg Barclays U.S. Aggregate Bond Index
Monthly Returns(%) as of 12/31/2017
1 Month 0.46
3 Months 0.39
YTD 3.54
Annualized Returns(%) as of 12/31/2017
1 Year 3.54
3 Years 2.24
5 Years 2.10
10 Years 4.01
Since Inception 6.37
Retail Class Annual Expense Ratio -- Gross: 0.78%, Net: 0.55%
Institutional Class Annual Expense Ratio -- Gross: 0.56%, Net: 0.38%

Calendar Year Returns (%)

2017 2016 2015 2014 2013 2012 2011 2010 2009 2008
Westcore Plus Bond Fund 4.74 3.82 0.01 5.90 -1.23 5.67 7.55 7.22 10.42 -1.86
Westcore Plus Bond Fund Institutional 4.81 4.01 0.23 6.02 -1.05 5.74 7.81 7.25 10.56 -1.77
Bloomberg Barclays U.S. Aggregate Bond Index 3.54 2.65 0.55 5.97 -2.02 4.22 7.84 6.54 5.93 5.24
Westcore Plus Bond Fund
2017 4.74
2016 3.82
2015 0.01
2014 5.90
2013 -1.23
2012 5.67
2011 7.55
2010 7.22
2009 10.42
2008 -1.86
Westcore Plus Bond Fund Institutional
2017 4.81
2016 4.01
2015 0.23
2014 6.02
2013 -1.05
2012 5.74
2011 7.81
2010 7.25
2009 10.56
2008 -1.77
Bloomberg Barclays U.S. Aggregate Bond Index
2017 3.54
2016 2.65
2015 0.55
2014 5.97
2013 -2.02
2012 4.22
2011 7.84
2010 6.54
2009 5.93
2008 5.24

 

 

The Westcore Flexible Income and Plus Bond Funds are subject to additional risk in that they may invest in high-yield/high-risk bonds and may be subject to greater levels of liquidity risk. Additionally, investing in bonds entails interest rate risk and credit risk.
Performance data quoted represents past performance and does not guarantee future results. Performance information for the institutional class shares prior to their inception is based on the performance of the retail class. Current performance may be lower or higher than the performance quoted. To obtain current performance as of the most recent month-end, please call 800.392.CORE(2673). Average annual total returns reflect the reinvestment of dividends, capital gains distributions, all fee waivers and expense reimbursements. If imposed, the fee would reduce the performance quoted. Investment return and principal value will vary, and shares, when redeemed, may be worth more or less than their original cost. Westcore fund shares are not insured by the FDIC, the Federal Reserve Board or any other agency and are subject to investment risk.
Denver Investments (the “Adviser”) has contractually agreed to waive certain investment advisory and/or administration fees and/or to reimburse other expenses from April 30, 2017 until at least April 30, 2018. The first waiver/reimbursement applies so that the ratio of expenses to average net assets, as reported in the Fund’s financial statements, will be no more than a fixed percentage for the Fund’s Retail Class for such period. Please see the Fund’s Prospectus for more information. The second waiver/reimbursement applies so that Fund level Other Expenses (as defined in the Fund’s financial statements) for the Institutional Class will be in the same proportion as the Retail Class waivers/reimbursements. The third waiver/reimbursement applies so that the institutional class-specific Other Expenses are reimbursed. The Adviser has contractually agreed to waive/reimburse all of these class-specific Other Expenses, but only to the extent that the difference between the net Institutional Class and net Retail Class expense ratios, after applying the waiver/reimbursement, does not exceed 25 basis points. These agreements may not be terminated or modified prior to April 30, 2018 without the approval of the Board of Trustees.
All indices are unmanaged and investors cannot invest directly in an index. View index descriptions.
Bloomberg Barclays is the source and owner of the Bloomberg Barclays Index data. See Terms of Use for additional disclosure.

The risk profile spectrum provides an approximate illustration of the relative volatility of the Westcore Family of Funds determined by using each fund’s 5-year annualized standard deviation as of 12/31/17. If the fund’s retail class has less than five years of operations as of that date, the standard deviation of the fund’s Morningstar category is used instead. Standard deviation is a statistical measure of the historical volatility of a fund, which we believe can assist in classifying a fund within a risk spectrum. The placement on the risk spectrum (Low to High) is based on the comparison of each Fund’s standard deviation measure, as described above, in relation to the universe of funds with a 5-year standard deviation measure as obtained from a third-party fund database. We believe those measures are accurate but have not independently verified them. Please refer to the prospectus for each fund’s specific risks. Also a fund’s measure of volatility is subject to change without notice as market or economic conditions change, and such changes may include significant and nonrecurring volatility events. Historical volatility is not necessarily indicative of future volatility and there is no guarantee that in any time period any one fund will be more or less volatile than any other fund.

Past performance is no guarantee of future results.
Source: Lipper, Inc. The Best Fixed Income—Small Fund Group award is granted to the fund family with the lowest average decile ranking for Consistent Return over the 3-year period. To qualify, a fund family must have at least three fixed income funds and less than $63.5 billion in assets under management for 2016. Westcore Funds Funds ranked 1 out of 74 eligible companies for 2016.
From Thomson Reuters Lipper Awards, ©2017 Thomson Reuters. All rights reserved. Used by permission and protected by the Copyright Laws of the United States. The printing, copying, redistribution, or retransmission of this Content without express written permission is prohibited.
Lipper, a wholly owned subsidiary of Thomson Reuters, is a leading global provider of mutual fund information and analysis to fund companies, financial intermediaries and media organizations.
The Morningstar Rating for funds, or “star rating”, is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed end funds, and separate accounts) with at least a three-year history. Exchange–traded funds and open ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-,five-,and 10 year (if applicable) Morningstar Rating metrics. The weights are 100% three-year rating for 36-59 months of total returns, 60% five year rating/40% three-year rating for 60-119 months of total returns, and 50% 10 year rating/30% five-year rating/20% three year rating for 120 or more months of total returns. While the 10 year overall rating formula seems to give the most weight to the 10 year period, the most recent three–year period actually has the greatest impact because it is included in all three rating periods.
© 2017 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

 

Manager Commentary as of 12/31/2017

 

Market Overview

As was widely expected, the Federal Reserve raised short-term interest rates in December. This was the third increase in 2017 and the fifth in this rate hiking cycle, which began in December 2015. History informs us that during Federal Reserve rate hiking cycles, the yield curve typically flattens, as short-term and long-term interest rates compress. That is exactly what happened this time around. The ten-year U.S. Treasury rate was virtually unchanged in 2017, while the thirty-year U.S. Treasury rate declined by 32 basis points (0.32%) during the year. The Federal Reserve continues to express expectations that economic growth will lead to labor market tightening, then to wage increases, and ultimately to rising inflation, as fulfillment of its extraordinary easing measures over the last nine years since the Great Recession. The bond market seems to have a much different view, with expectations of only modest growth and low inflation continuing for several years. The combination of an assertive Federal Reserve raising rates pre-emptively to head off the forecasted rise in inflation, while inflation remains persistently low has, in our view, been the driving force keeping long-term rates lower than many have been forecasting over the last several years. 

In this environment of solid corporate profits, modestly positive economic growth, and low inflation corporate bonds, mortgage backed securities, equities, and other risk assets have all performed extremely well over the entire year, including the fourth quarter.

Fund Performance

The Westcore Plus Bond Fund’s return of 0.82% for the fourth quarter exceeded the 0.39% return of its benchmark, the Bloomberg Barclays U.S. Aggregate Bond Index. The Fund benefited from the positive income effect of its typical heavier weighting of sectors which offer yield in excess of Treasuries (spread), such as corporate, taxable municipal, and securitized bonds. While the “spread” sectors also generally benefited from tightening through the quarter, the Fund’s maintenance of exposure to longer maturity corporate and taxable municipal securities particularly enhanced its performance due to their longer duration characteristics and the flattening of the yield curve teamed with this tightening. Our effort to maintain the Fund’s enhanced yield, while limiting volatility within the portfolio through targeting shorter duration securities with higher yields, was not as beneficial as the Fund’s longer duration exposure.

Outlook and Positioning

The recent passage of tax reduction legislation has us reassessing our forecast. We believe there will likely be a slight increase in growth over the next two to three years as the impact of corporate tax cuts has the potential for expanded business capital investment and wage increases being passed on to workers. The Federal Reserve’s reaction will be the key to managing the current extended recovery cycle. Growth created by tax reductions may well be offset by an increase in interest rates if the Federal Reserve follows through on its planned rate expectations. We will be watching closely to monitor the balance between expansive fiscal policies and tightening monetary policies and the resultant impact to growth and inflation. An overly aggressive Federal Reserve, which is not our forecast, could well short circuit the recovery that would otherwise become the longest in U.S. history eclipsing the 1991-2001 expansion of 120 months. On the other hand, if the Federal Reserve doesn’t react quickly enough to any growth spurt that leads to inflation, we could finally see the rise in rates that has been so widely, and wrongly, anticipated.

U.S. fixed income securities continue to look attractive versus those available elsewhere in today’s global marketplace, particularly the significantly lower, and even negative rates, offered in European and Japanese bond markets. We have constructed the Fund with overweighted positions in shorter maturity “spread” sectors offering what we believe are good yield opportunities and durations that are slightly shorter than their benchmarks, reflecting the low interest rate environment. We currently have maintained exposure to longer maturity Treasuries that we believe are likely to perform well as the yield curve flattens further in this rate hiking cycle. This positioning is intended to capture higher income levels while also being slightly more protective if we do see modest interest rate increases. Recognizing that we are late in an already extended credit cycle, we have positioned the Fund with overweighted positions in carefully selected income-producing securities, including mortgage-backed securities and corporate and municipal bonds. These tactics are designed to enable performance over multiple interest rate and economic scenarios. We have increased our focus on quality and liquidity to mitigate negative credit events and market dislocations that could adversely impact the Fund. We believe our rigorous credit selection process is particularly valuable at this point in the credit cycle when it is critically important to assess valuations, as well as differentiate creditworthiness and long-term stability, of each of our holdings. While we are concerned about increased volatility and the recent rise in short-term rates, we are still not convinced the market is quickly headed to significantly higher long-term interest rates.

 

 

The Westcore Flexible Income and Plus Bond Funds are subject to additional risk in that they may invest in high-yield/high-risk bonds and may be subject to greater levels of liquidity risk. Additionally, investing in bonds entails interest rate risk and credit risk.
The performance data quoted represents past performance and does not guarantee future results. Current performance may be lower or higher than the performance data quoted. Investment return and principal value will vary, and shares, when redeemed, may be worth more or less than their original cost. To obtain current performance as of the most recent month-end, please call 800.392.CORE (2673) or visit the Performance tab.
The Manager Commentaries contain certain forward-looking statements about the factors that may affect the performance of the Funds in the future. These statements are based on Fund management’s predictions and expectations concerning certain future events and their expected impact on the Funds, such as performance of the economy as a whole and of specific industry sectors, changes in the levels of interest rates, the impact of developing world events, and other factors that may influence the future performance of the Funds. Management believes these forward-looking statements to be reasonable, although they are inherently uncertain and difficult to predict. Actual events may cause adjustments in portfolio management strategies from those currently expected to be employed.
All indices are unmanaged and investors cannot invest directly in an index. View index descriptions.

The risk profile spectrum provides an approximate illustration of the relative volatility of the Westcore Family of Funds determined by using each fund’s 5-year annualized standard deviation as of 12/31/17. If the fund’s retail class has less than five years of operations as of that date, the standard deviation of the fund’s Morningstar category is used instead. Standard deviation is a statistical measure of the historical volatility of a fund, which we believe can assist in classifying a fund within a risk spectrum. The placement on the risk spectrum (Low to High) is based on the comparison of each Fund’s standard deviation measure, as described above, in relation to the universe of funds with a 5-year standard deviation measure as obtained from a third-party fund database. We believe those measures are accurate but have not independently verified them. Please refer to the prospectus for each fund’s specific risks. Also a fund’s measure of volatility is subject to change without notice as market or economic conditions change, and such changes may include significant and nonrecurring volatility events. Historical volatility is not necessarily indicative of future volatility and there is no guarantee that in any time period any one fund will be more or less volatile than any other fund.

Past performance is no guarantee of future results.
Source: Lipper, Inc. The Best Fixed Income—Small Fund Group award is granted to the fund family with the lowest average decile ranking for Consistent Return over the 3-year period. To qualify, a fund family must have at least three fixed income funds and less than $63.5 billion in assets under management for 2016. Westcore Funds Funds ranked 1 out of 74 eligible companies for 2016.
From Thomson Reuters Lipper Awards, ©2017 Thomson Reuters. All rights reserved. Used by permission and protected by the Copyright Laws of the United States. The printing, copying, redistribution, or retransmission of this Content without express written permission is prohibited.
Lipper, a wholly owned subsidiary of Thomson Reuters, is a leading global provider of mutual fund information and analysis to fund companies, financial intermediaries and media organizations.
The Morningstar Rating for funds, or “star rating”, is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed end funds, and separate accounts) with at least a three-year history. Exchange–traded funds and open ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-,five-,and 10 year (if applicable) Morningstar Rating metrics. The weights are 100% three-year rating for 36-59 months of total returns, 60% five year rating/40% three-year rating for 60-119 months of total returns, and 50% 10 year rating/30% five-year rating/20% three year rating for 120 or more months of total returns. While the 10 year overall rating formula seems to give the most weight to the 10 year period, the most recent three–year period actually has the greatest impact because it is included in all three rating periods.
© 2017 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

 

 

Distributions

The Westcore Plus Bond Fund pays income distributions monthly and capital gains distributions at least annually, generally in December.

To view the Fund’s most recent distributions click here.

To view historical distribution information for all of the Westcore Funds click here.

 

Past performance does not guarantee future results.
A fund’s income from dividends and interest and any net realized short-term capital gains are paid to shareholders as income dividends. A fund realizes capital gains whenever it sells securities for a higher price than it paid for them. Net realized long-term gains are paid to shareholders as capital gain dividends. A dividend will reduce the net asset value of a fund share by the amount of the dividend on the ex-dividend date. View the prospectus for more information.

The risk profile spectrum provides an approximate illustration of the relative volatility of the Westcore Family of Funds determined by using each fund’s 5-year annualized standard deviation as of 12/31/17. If the fund’s retail class has less than five years of operations as of that date, the standard deviation of the fund’s Morningstar category is used instead. Standard deviation is a statistical measure of the historical volatility of a fund, which we believe can assist in classifying a fund within a risk spectrum. The placement on the risk spectrum (Low to High) is based on the comparison of each Fund’s standard deviation measure, as described above, in relation to the universe of funds with a 5-year standard deviation measure as obtained from a third-party fund database. We believe those measures are accurate but have not independently verified them. Please refer to the prospectus for each fund’s specific risks. Also a fund’s measure of volatility is subject to change without notice as market or economic conditions change, and such changes may include significant and nonrecurring volatility events. Historical volatility is not necessarily indicative of future volatility and there is no guarantee that in any time period any one fund will be more or less volatile than any other fund.

Source: Lipper, Inc. The Best Fixed Income—Small Fund Group award is granted to the fund family with the lowest average decile ranking for Consistent Return over the 3-year period. To qualify, a fund family must have at least three fixed income funds and less than $63.5 billion in assets under management for 2016. Westcore Funds Funds ranked 1 out of 74 eligible companies for 2016.
From Thomson Reuters Lipper Awards, ©2017 Thomson Reuters. All rights reserved. Used by permission and protected by the Copyright Laws of the United States. The printing, copying, redistribution, or retransmission of this Content without express written permission is prohibited.
Lipper, a wholly owned subsidiary of Thomson Reuters, is a leading global provider of mutual fund information and analysis to fund companies, financial intermediaries and media organizations.
The Morningstar Rating for funds, or “star rating”, is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed end funds, and separate accounts) with at least a three-year history. Exchange–traded funds and open ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-,five-,and 10 year (if applicable) Morningstar Rating metrics. The weights are 100% three-year rating for 36-59 months of total returns, 60% five year rating/40% three-year rating for 60-119 months of total returns, and 50% 10 year rating/30% five-year rating/20% three year rating for 120 or more months of total returns. While the 10 year overall rating formula seems to give the most weight to the 10 year period, the most recent three–year period actually has the greatest impact because it is included in all three rating periods.
© 2017 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
4-star Morningstar Overall Rating out of 847 Intermediate-Term Bond Funds based upon risk adjusted returns as of 12/31/2017.
View all Ratings

Risk Profile

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Changes at the Fed: A Focus on Monetary Policy

Westcore Funds’ Fixed Income team discusses implications of the Fed’s monetary policy and what changes we should expect from the recently announced Fed Chair.

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