Limited Term Income Fund - Overview - Thornburg Investment Management

SEEKING INCOME FROM HIGH-QUALITY U.S. DOLLAR-DENOMINATED BONDS

Thornburg Limited Term Income Fund is a flexible, actively managed, core portfolio of high-quality U.S. dollar-denominated bonds. This centerpiece investment-grade portfolio seeks a reasonable level of income and lower volatility than some peers, without overextending in the pursuit of yield.

“The fund is designed to look for the best opportunities available in the context of a high quality, laddered portfolio. We strive to bring as much income as is consistent with lower volatility and our focus on balancing risk with reward.”

— Jason Brady

A HIGH-QUALITY CORE PORTFOLIO

In this portfolio, issuer credit quality generally is high, as the fund invests at least 65% of its net assets in debt obligations rated A or higher by a nationally recognized statistical rating organization, or if no credit rating is available, those we judge to be of equivalent quality. When purchased, all bonds must be investment grade quality.

FLEXIBILITY

While Limited Term Income is structured as a 10-year ladder, we enjoy the flexibility to invest wherever we see the most value. Analysts and portfolio managers are expected to be conversant across a wide range of asset classes and geographies.

LOWER VOLATILITY

The fund is a 10-year laddered portfolio, managed with an eye toward mitigated volatility. As markets are inherently volatile, some price movement is expected. But through careful credit research and portfolio construction, we seek to mute price change.

SEEKING REASONABLE INCOME

Many “core” investment-grade bond funds seek to enhance yield by extending duration, lowering credit quality, and even through the use of leverage. While the fund is flexible in pursuit of its goals, we keep things reasonable. We want a reasonable level of income commensurate with a moderate level of risk; we won’t assume undue risk in pursuit of a few extra basis points.

AN ACTIVELY MANAGED LADDER

Laddering involves building a portfolio of staggered maturities so that a portion will mature each year. Money from maturing bonds provides an organic source of cash flow and is typically reinvested in longer-maturity bonds within the range of the ladder. For this fund, the ladder ranges from zero to 10 years.

BEST FIXED INCOME FUND FAMILY

2012 Lipper Fund Award 2012 – The firm ranked #1 out of 41 eligible firms in Lipper Inc.’s fixed income large firm universe for the three-year period ended 11/30/11.

2008 – The firm ranked #1 out of 41 eligible firms in Lipper Inc.’s fixed income large firm universe for the three-year period ended 12/31/07.

The Lipper Fund Awards program honors funds that have excelled in delivering consistently strong risk-adjusted performance, calculated with dividends reinvested and without sales charges, relative to peers. The Lipper Fund Awards program recognizes fund families with high average scores for all funds within a particular asset class or overall. Fund family awards are issued for the three-year period only. Thornburg did not win the awards for any years other than those listed above. Lipper’s Large Company universe was comprised of fund families with more than $40 billion in total net assets for the 2012 award and more than $28 billion for the 2008 award. Only fund families with at least five bond funds were eligible for the Fund Family Award.

Related Resources

Finding Relative Value in Volatile Credit Markets

September 21, 2020

Commentary: Income and U.S. Government Bond Funds

2nd Quarter 2020

As we march forward into the second half of 2020, we’ll remain focused on our guiding tenet: only take risk when you are getting paid to do so. In action, this means staying nimble, focusing on horizon risks, appropriately managing liquidity and most importantly remaining humble.

The Fed’s “Not Thinking” Singular Focus

June 11, 2020

Charles Roth

Supporting the beaten-down labor market is the Federal Reserve’s “major focus,” not inflation nor risk asset prices. Doing “whatever we can and for as long as it takes.”

Steering your portfolio clear of the silo trap

June 1, 2020

Why a generalist research approach can triumph over siloed team structures.

Economic Perspectives: Out Of The Frying Pan Into The Fire?

May 19, 2020

Thornburg’s Co-head of Investments Jeff Klingelhofer discusses what competing forces within the U.S. economy and unprecedented fiscal/monetary policy stimulus mean for investors.