Thornburg Investment Income Builder Fund – 4th Quarter Update 2025

Thornburg Investment Income Builder Fund – 4th Quarter Update 2025

Adam Sparkman: Good afternoon, and welcome to the Thornburg Investment Income Builder quarterly update call. My name is Adam Sparkman, and I am a client portfolio manager with Thornburg Investment Management. A few housekeeping items before we get started. At this time, all participants are in a listen only mode. However, you can ask questions at any time by submitting them through WebEx or emailing us at questions@thornburg.com.

This webcast is being recorded and a replay will be available in a few days. You can access today’s presentation slides by clicking on the three dots at the bottom of the WebEx screen, and clicking content. For those on the call today who may be less familiar with Thornburg, we are an investment manager based in Santa Fe, New Mexico, overseeing approximately $55 billion of assets across a suite of actively managed equity, fixed income and multi-asset solutions.

I’d like to quickly introduce our speakers today. Brian McMahon, portfolio manager, vice chairman and chief investment strategist for Thornburg, along with our head of equities, Matt Burdett, and our head of fixed income, Christian Hoffmann. With that, let me turn it over to you, Brian.

Brian McMahon: Okay. Thank you, Adam. And, thank you to everyone listening to this call.

Whether it’s now or later, we’re going to go through a slide deck to support our remarks on this call. So, I’d just like to start with, slide number two of the deck, which outlines, some key macroeconomic issues at the moment. And I’ll start by just saying that really, most forecasts of future global and U.S. real GDP growth were revised modestly higher during 2025.

So, forecasts of GDP growth for this year 2026 and next year, 2027, both revised modestly higher. Despite all of the, anxiety last year. Along with that, consensus published, forecasts of equity market analysts call for the S&P 500 index earnings to grow by at least 10% per year this year and next year, and most non-U.S. equity market portfolios are also expecting above average year-over-year earnings growth.

And, anticipating that virtually all global equity markets posted above 10% returns in local currencies last year. And for US dollar-based investors, foreign currency appreciation added another 5 to 15% to that. I will point out that non-U.S. investors invested in US dollar assets, suffered a headwind last year, say roughly 10% to their, total returns.

So, kind of a flip of the way it had been in some prior years. Until now, inflation rates have been close enough to targets to allow central bankers, really globally, a lot more latitude for pay, increased attention to, supporting employment versus only fighting inflation. The US unemployment rate, which averaged 3.9% over the last three years, is now at 4.6%.

So, it’s tough to criticize the fed for paying more attention to that. The fed funds rate, which was 5.33% from July of 2023 till September of 2024, is now 3.63%. And it’s expected to decline further. The timing, is uncertain, is data dependent. But I think it’s relatively certain that we’re going to get some declines.

Investor perceptions about the degree of fed independence will matter. And we got a little, episode of that over the weekend. I’ll turn now to slide number three, which is a reminder of the mission, of Thornburg Investment Income Builder, where we now have 23 years under our belt. We seek to provide attractive income. Attractive yield today. Grow the dividend over time and long-term capital appreciation. And I’ll just point out, in 2025, our ordinary dividend was $1.27. That was up about 2.6% year over year. Our full dividend, including long term capital gains, was $1.93. And that was up 29% year over year. We started in 2003. First full year dividend was $0.50.

So, the growth box gets ticked, over time. We expect that we would have long term capital appreciation with the growing income stream. And we’ve had that, we kicked off in, late 2002 at $11.94 a share, and we ended last year at $32.92 a share. We had, appreciation of $7.41 a share in, 2025.

So, so we’re taking the boxes there. The next slide, number four, is just an overview of the equity portfolio allocation shifts, over the last eight quarters. And what you see is modest increases in, weightings in financials, communications services and industrials. And basically, the pay for there was, reductions in health care and energy sector allocations, some of that is performance, driven. The next slide, number five is just a review of portfolio characteristics. Maybe, most importantly, foreign equity, just over 60% of the portfolio as of the end of December. Fixed income, about 15%, including cash. So, those, equity characteristics, are summarized, on the right side of that slide, which shows a trailing one-year PE average, weighted average period’s just over 15 times and a forward estimate of just over 14 times.

So, significant discount to, overall market averages. And those discounts are kind of in line with where we’ve been most of the last 20 years. The next slide, number six is just a review of our top ten equity holding as of December 31. That’s 39% of portfolio assets as of that date. And I’ll just point out, of those top ten, if I look back six years to the pre-COVID period, seven of those seven of those names were in the portfolio, not all in the top ten, at that time, but, mostly in the top 20 at that time. So, we have, adjusted, the weightings a fair amount in line with, value changes, and perceived income changes.

But this is not a high turnover portfolio. Slide number, seven is the next ten equity holdings accounted for, 7, or 20% of the, portfolio as of December 31st. So, with that, the next, ten slides are reviews of, some individual summary descriptions of our top ten holdings as of December 31.

And those kind of speak for themselves, I would say. One thing that I would like to point out, particularly in light of the fact that I mentioned seven of our current top ten, we held, as of the end of 2019. And if you look at the graph, we’ll just start with Orange on slide number eight. You see that that, share price went from, just over 13, to, nine and a half relatively quickly. When Covid set in in February and March of 2020, with actually very little change to the underlying business. And that’s part of the reason that we like to go back and show, from December of 2019, Mr. Market will move stock prices a lot.

And frankly, often a lot more than the underlying fundamentals of a business warrant. And you’ll see, similar, characteristics on virtually all of the other, top ten slides, for example, Taiwan Semiconductor, which just announced bang up earnings, last night was down 26%, in March of 2020 over the prior month. Citigroup is down 56%.

Slide number ten. So and on and on and on. Broadcom, which has been in our top ten for years, was down 48% in six weeks. So, this is just to, to note that, there are speed bumps along the way, but, when we have solid companies with solid positions in their industries paying customers and good cash flow, when Mr. Market, knocks the share price, that gives you some pretty good opportunities.

If you’re following the actual results of the businesses closely, like we do. And, so, with that, I’ll turn it over to Matt Burdett to finish the comments.

Matt Burdett: Okay. Thanks, Brian. Thanks, everyone for joining. So, I’ll start on slide 18. This is just to give you a sense of, the distribution of growth rates, within the equity portfolio around dividend growth. You know, Brian, just highlighted, you know, some of the top ten stocks, and mentioned that ability and willingness, to pay a dividend. We like it when they grow the dividend. And as you can see here, 77% of the equity portfolio, we have the dividends growing. And the underlying basis for these companies, 24% of them, 10% or more, 34%, 5 to 10%, and then 19%, 0 to 5%. 7% were flat, 16% were lower dividends. We did have a couple of companies that we’ve known for a number of a number of years that normally pay, Q4 dividends that push them into Q1 of this year. So, we’ll be able to capture those, in this first quarter of 26. Advancing to the next slide, 19, this is just to give you give everyone a sense of the types of returns. The investment income builder has delivered at different, fed funds rate levels. And so, what you can see on the table is at 3% or higher fed funds rate. And right now, it’s 360 effective fed funds rate. When it’s 3% or higher, we tend to outperform our blended benchmark by a reasonable number.

And that’s what the 578 basis points is on an annualized basis. And then versus the MSCI world is about 250 basis points. 1 to 3% range. That’s 24 quarters of frequency. We still outperform, but by a smaller amount and then less than 1%, which this really captures the QE era. That’s where we modestly outperform the blended index but did underperform the MSCI world during that time.

So, if you look at interest rate, market swaps, they’re, they’re expecting as we enter January of 27, the effective fed funds rate to be about 3.16. But that moves around a lot. That’s just where it is today. And as, we’ll see how the economy develops and other things. But that’s, that’s kind of where we’re at right now.

Slide 20 shows, some selected market portfolio returns, for different calendar years. The big takeaway here is generally a very strong return, across markets and even stronger returns in international stocks because of the dollar, depreciation that Brian had mentioned earlier. And I guess it’s, it’s one other notable thing is to say that, you know, we always talk about diversification within a portfolio. And for many years post global financial crisis that was not didn’t really pay off very much. 2025 was a year. I think what that really, really shined. So strong returns across the board. I would highlight, a couple of things the Euro appreciated 13 a little over 13% versus the dollar in 2025. So that certainly helped.

A couple other markets that are that are not international markets that are not on this page. So, Korea, as measured by the MSCI world or the MSCI Korea Index, was up 96% in local and 100% in dollars in calendar year 2025. Spain was up 78% and 86% in dollars. So, these were, very strong year, return years.

And as you know, we look forward, you know, I guess the other point I would make is, you know, the S&P 500 2026 estimated earnings, PE is about 22.5 times the ACWI ex-U.S. as a proxy for international markets is about 15.6 times. And this portfolio, the Thornburg Investment Income Builder, is 14.2 times. It’s like 21 looks at investment performance for the income builder. It was it was a strong quarter, in Q4, delivering 6.75% return that exceeded our blended benchmark by a little over 400 basis points. And then for the calendar year, really a very strong return for the year. I think it’s, the second best return ever, at 36.9%.

And the relative return of 19.3, I believe is the highest ever in the history, of the fund. So, a pretty good year overall for returns. Slide 22, shows the quarterly returns, since inception. And I guess what I would just highlight here is there’s 92 periods. As Brian highlighted earlier, and 68 of those, or a 74% frequency were positive returns, over the 23 years of the fund’s existence. So, 23, is a reminder to everyone. You know, the credit markets and bond markets have been relatively, calm recently. But we like to remind people, what we believe is a very unique feature of the Thornburg Investment Income Builder, and that’s to have dynamic asset allocation. Right. And what this chart is showing you in the dark blue line is, is the income builders’ cash and fixed income allocation.

And the dashed blue and orange lines are U.S. and European high yield, yield-to-worse. And that’s what the y axis on the right side is showing. And then the left y-axis is the percent portfolio in fixed income and cash. And what you can see here is it’s a pretty simple picture we tend to follow, where the interesting yields are, you buy bonds when the returns offered are comparable to that of equities. Right. And that’s what we’ve consistently done over time. Today high yield option adjusted spreads 2.6%. So not so great yield to worst is 6.6%. The 25 year averages is 8%. So it gives you a sense, eventually we’ll get a shot to add more bonds. But right now, this is the picture as it stands. Advancing to the next slide 24.

This is showing the quarterly distributions. For the quarter. The dividend was $0.42. That’s flat year on year. For the trailing 12 months, as Brian mentioned, it was 2.6%. And if you bring in the, the capital gain distribution of 66.2 cents, the total dividend year on year was up 29.5%.

Turning to slide 25. Just kind of highlighting here. The yield, you know, this is an income solution. We believe we’re competing not only with other equity income funds, but bond funds and other balanced funds. And what you can see here is the gray bars are the yield on the income builder fund. The orange line is the U.S., corporate bond index. The light blue line is our blended index yield. And then in black is CPI. So, what you can see here is a cross across time periods. We’re above 4%. And then I would also highlight, you know, Brian had mentioned earlier, what the three goals are. Compelling yield, which I think the slide here shows. And also the dividend CAGR through this time is about 4.1%, complemented by about 450 basis points per annum of price appreciation. So, advancing now to slide 26 and really trying to bring home the point, about what the mission of this strategy is and how it can be useful, for you in your in your clients. This is what we call our report card slides.

So, this first one is the hypothetical $100,000 investment, in the a-shares, of the Thornburg Investment Income Builder Fund at inception. And in this scenario, this individual, has taken the dividends in cash every quarter and spent them on whatever they wanted. Right. So, no reinvestment of the dividends. And what you see here is if you, you know, fast forward, to the end of calendar year 25, the growth and income is the total dividends received is $196,170.

So nearly two times your original. This person’s original investment. And while collecting those dividends, the capital has grown from $100,000, to $303,260. So and so a, you know, a tripling of the original, original investment. The other thing to point out, the power of a growing dividend over time is the concept of yield on cost.

You can see in the little box there the trailing 12-month dividend of $10,856. Well, if you take your original $100,000 investment, that’s a 10.9% yield on original cost. And just kind of highlights how the growth of a dividend can be a very attractive yield vehicle. Over time, advancing to slide 27. This is the same, you know, same scenario, $100,000 original investment at inception.

The difference here is that perhaps this individual is working, does not need the dividend distributions, so they are reinvesting them over time. And what you see here is they started with 8,375 shares. It’s now 27,461 shares that they own. So, over that time, the cumulative dividends are nearly, $370,000 in cumulative dividends. That were used to buy back more shares.

The capital went from 100,000 to 534,145. Total account value. Is over $900,000 over this time. So, it’s basically, you know, a pretty powerful way to build wealth. By letting the dividends grow and then reinvest in the shares over time to do the same. Yield on cost analysis. Let’s assume that this person has decided they want to take the dividends.

Now they’re ready to retire. And so those 27,461 shares. Times the trailing dividend of 127 that was mentioned earlier is 34,875. Right. So, you do the math. Same math. That’s a 34. 9% yield on original cost. Once someone starts to collect those dividends. So this is really what we’re trying to do. You know, it’s not sexy.

I think it’s blocking and tackling. It’s being good. Good value investors and finding those companies that have that ability and willingness to pay dividends. And the last slide, slide 28 that I will, remind everyone of is the importance of dividend to long term returns. We have a table of the S&P 500 here that segments by decade the average annual price appreciation component.

The average annual income component, the sum of the two is the total return. And then on the far right, it’s the income divided by that total return. The big picture dividends are roughly half of your total return. If you go back far enough. However, there are periods when dividends, are less important in periods when they’re extremely important.

So, if you if you look now at the current decade we’re in, we’re halfway through it, 2021 through 2025. The average price appreciation has been 12.7%. The income component, only 1.7%. Total return of 14.4%, which is a pretty high return on average, income being 11.5% of that total return. So, not terribly important. But you look at other decades, and you see that dividends are greater than 100% of return. I will say one stat, I saw from, Apollo, their economist chief economist put out a stat. So, for the S&P 500 since January 1st of 2021, the market cap gain of the top ten stocks in the S&P 500 represented 55% of that total market cap growth. So that that would be the price component. So very concentrated price returns. And we just like to highlight this to help, everyone kind of think through where your total return is going to come from. And this vantage point, I think helps there. So with that, I’ll turn it back to you. Adam.

Adam Sparkman: All right. Thanks, Matt. Thanks, Brian, for the color. We’ve got several questions coming in. Matt, maybe before we kind of dive into the portfolio macro, I’ll start with one for you. That’s really more about, the wrapper. One of the attendees notes that historically, the fund has been very tax efficient, but wants to know about, the potential for, Income builder ETF moving forward. If it’s something we’ve thought about. So any color there from you?

Matt Burdett: Yeah, sure. Good question. I will say I think we have been very tax-efficient over time. Now, the ETF structure, you have there are different considerations that we, you know, we have to manage. We are thinking about it. We obviously we want it to be, a differentiated and complementary, product relative to the mutual fund.

So, you know, we’re doing more work around it. We recognize that some people prefer that wrapper. But that’s about all I can say on it right now.

Adam Sparkman: All right. Thanks, Matt. Maybe turning to fixed income. Christian, you know, one of the things that I imagine many people have seen in the news this week is, about the DOJ investigation into Chairman Powell. What are your thoughts on that? And are you concerned?

Christian Hoffmann: I mean, I think I’ve been concerned for, you know, over 12 months is almost from day one or actually even, I think pre, you know, pre-aking office that, you know, the fed has been under attack and this has really been the, you know, the latest weaponization of, you know, different form of government, you know, against the Fed.

I think, I think broadly markets and, and people are, you know, happy to see, you know, Powell kind of stand firm and resilient and to see, you know, a lot of people really kind of stand up and say, hey, you know, we stand. We stand with Powell. We stand with central bank independence, not just for the US, but, you know, broadly is, is a global ideal.

It’s probably the interesting part of that is, is the market reaction, which was pretty, pretty subdued to nonexistent. And again, I think this is because again, this is, you know, 12 months where we’ve seen the bark has tended to be worse than the bite. But we’re also just becoming, I think, very, very desensitized to this. You know, it’s very possible that we have seen the last interest rate adjustment, you know, of Powell’s career, which is, you know, as, as chair, which is something interesting to think about.

And, you know, I think a lot of us are looking, you know to an announcement, you know, that could happen any day or, you know, certainly in coming weeks of, you know, what the future of that institution will look like. You know, I think I think 2 or 3 calls ago, we talked about the, the Super Bowl of the Kevin’s, and that still looks like what we have, you know, on tap.

I certainly have a preference for, for one versus the other. But certainly, you know, could have seen something, you know, much worse, could have seen, you know, Caligula’s horses, the, you know, the potential successor. But nothing is a done deal. So, something I think we’re, you know, paying close attention to, you know, and equally watching.

Adam Sparkman: All right. Thanks, Christian. Brian, we have a few questions on, some of the securities in the portfolio. I wanted to start with one around the Zegona. One of our callers notes that Zegona is listed as the 11th largest holding in the portfolio. But doesn’t look like it paid a dividend in 2025 and wants a little bit of color on, what makes it a compelling inclusion in this portfolio?

Brian McMahon: Yeah, that’s a good question. I, appreciate that. That would leap out at someone. So, the gonna is a bit the, exception that proves the rule. It did not pay a dividend. And calendar 2025 or calendar 2024 when, when existing Zedona took over the, the old, Vodafone Espana. They assumed control of that in June of 2024.

But we knew when we initially invested in Zegona in November of 2023, from sitting down with management, what their business plan was and, it seemed credible, that they were going to be able to run Vodafone Espana better than, Vodafone had been running it. We kind of liked their ideas. And, to cut to the chase, we, paid, 1.5 English pounds for our investment in, Zegona on a per share. Back in, late 2023, we just got a dividend of 1.62, British pounds per share. So, we’ve now gotten that, and we got that, in early January just a few days ago. So, we’ve now gotten, dividend that’s larger than our initial investment 26 months ago. And along with that, the share price is ten times what we paid for it.

26 months ago. So, it just is a pretty good example of if robots were running this portfolio, and only looking back at data, they wouldn’t have seen what we saw. Which was, a management with a plan, that they could explain to us, and that we could, analyze ourselves and make judgments about. And we ended up with, with a very good investment, and we think it can continue to produce income. Not necessarily at the same, level of 1.62 pounds per share, but, we don’t we don’t need that to have a really good income investment. So, yeah, I appreciate that. That would leap off the page to someone.

Adam Sparkman: All right. Thanks, Brian. Matt,  2025 was obviously a really good year for the fund, as you noted. And but we have a question here about what you learned, during the year and how you think that it will help you improve performance going forward, especially regarding the global macro, as Christian noted, being quite different than in previous years.

Matt Burdett: Yeah. Look, I think, you know, this this is you have to be humble in this, in this job and, and always appreciate that, that there’s a lot of unknowns and, you know, so therefore when you when you have an investment, you have to consider the unknowns, into the price, potential prices that a security can, can go to.

So, look, I mean, there’s 2025, as I mentioned, was a year where diversification really shined and came through, and I think was a reminder to a lot of people that, diversity, diversification in a portfolio matters. And, you know, look, the, the macro geopolitical backdrop is pretty wild, right? And so, what we try and do is, is focus our time on individual companies that we can analyze. Right. And we could come up with scenarios and therefore prices at which, we can arrive at reasonable risk rewards. So, we’re always learning, right? You never stop learning this job, which is one of the things that’s really cool about it. So, I guess no specific lesson in 2025, but just the fact that, you know, being balanced, diversified, it really helps. And it’s probably going to matter a lot going forward.

Adam Sparkman: All right. Maybe shifting back to fixed income, we saw obviously a lot of AI related CapEx this year. Christian, is that AI-related debt issuance that we saw in 2025 create risks for fixed income markets.

Christian Hoffmann: So there’s an old adage that, you know, fixed income markets lead equity markets. And certainly that’s sometimes true as it relates to AI. It’s kind of interesting AI being the dominant driver of US equity markets for a number of years now, I think, you know, three plus and really just kind of entered the chat last year in fixed income markets with, you know what, most folks would pay good over 200 billion of AI-related issuance in the investment grade market.

So is that a cause for concern? You know, how are we thinking about it? And, you know, I think people also look at historic analogs. So, you know, this is not, you know, when energy and, you know, share related issuance became, became a substantial portion, you know, of the high yield index. You know, this is also pretty dissimilar from when you had, you know, speculative, you know, telecom build out, you know, the late 90s and early aughts, you know, where there was were highly leveraged entities that, you know, weren’t producing cash flow, that, you know, four out of five of the hyperscalers as, as they’re known are, you know, A or double A-rated credits. And much has been made of the widening on the back of that issuance. But that is from extremely tight levels to slightly less tight levels. And those entities trade from 20 to 30 basis points of spread. So almost nothing to do, 50 basis points of spread, which is, you know, just slightly more than almost nothing. Oracle stands out, you know, is the outlier, you know, of the five. And that’s a little more interesting in a different story. But broadly again this isn’t speculative build out where we don’t have cash flows to support the underlying business. And it isn’t really something we’ve seen in the high yield market to date. It’s pretty de minimis levels now that that could change.

So, the two big impacts and things that I would call out are one, that amount of issuance does have the ability to push spreads wider in the investment grade market. You know I think we would welcome that. And, you know, be happy to take, you know, more compensation on the back of supply. And instead of, you know, fundamentals.

And then broadly, I think the bigger risk is how people feel about AI at large. So again, if the sentiment changes broadly in equity markets and you see de-risking, you see capital in motion. You know, I think we all know that in a risk off event, you see that really flow through all markets not limited, you know, just to equity or debt.

But you know, more and more in bad markets, you know, the data of global markets and asset classes, you know, approaches one. So that that’s the thing. You know, I’m most concerned about. You know, that could change. But that’s how we see the field right now, you know, as it relates to a tool and productivity and you know, how it’s going to impact the global economy. I think, you know, there’s a lot to be excited about.

Adam Sparkman: All right. Thanks, Christian. Brian, maybe to shift back to, a couple other telecommunications names in the portfolio, another caller noticed that, AT&T and Vodafone both, looking at the shift at the top ten, top 20 holdings have negative five year dividend growth. And just wanted some context on how you think about those names and, and their fit in the portfolio where obviously dividend growth is a major consideration.

Brian McMahon: Yeah, sure. The caller is correct. There is negative growth. And we kind of highlight that, I’ll take them in turn. But both of these companies are significant restructurings in recent years. So, as I think back and over the 23-year history of investment income builder, between 2002 and 2015 or so, we owned AT&T almost the whole time. And the dividend yield is usually around six, six something. And, the share price bounced around, from the high 20s to the high 30s. From time to time, they made to, tragic acquisitions.

One DirectTV and the other Warner. And they paid about 150 billion for those maybe 160 pay. And I forget. Exactly. But then they levered up their balance sheet and, and we were out of AT&T, for a number of years. We saw risks to the, dividend and the share price went down from the mid 30s to the mid-teens.

And they cut their dividend, by, I think 40 some percent. Two years ago, a little over two years ago, we, we visited AT&T. Literally, I visited AT&T in Dallas and spent a couple days there, with some other analysts. And that was after they had started to refocus on the core business and, so looking forward, you can see on that, on that chart on slide nine, if you want to look at slide nine, what’s happened to the share price of AT&T since late, 2023.

And it’s gone up, even though it’s dipped recently on fears of a price war in US mobile. But we think they’re in a better place now. They’re much, much more focused on, on the core connectivity business and particularly now more than replacing the old legacy, DSL lines with, fiber lines. So, even though the dividend isn’t growing now, we think that there should be room to, to grow the dividend. They’ve achieved their, their leverage target. And, they have a lot of very attractively priced long-term debt outstanding that they are going to want to repay. So, so that’s AT&T. Vodafone sold two of its subsidiaries. We just mentioned one. They sold, Vodafone Espana. So, Spain and they sold Italy. And so, it’s a more focused, company now. They have, been a consolidator in the UK, which is, a good market for them. And, it may be a chance for them to, either benefit from or be a consolidator in Germany, which is still the largest market. So, it’s a better balance sheet. They have cut the dividend with restructuring. But we think the prospects for them to begin to grow the dividend with a better balance sheet and a better portfolio of businesses looks pretty good, right now.

Adam Sparkman: All right, Matt, we, have a question noting that the cash level on the fund has been a little bit higher than historical over the back half of the year. Any thoughts on, what driven that higher cash level and what kind of environment or opportunities that might prompt you to put a little bit of that cash to work?

Matt Burdett: Yeah, sure. It has been higher, than normal, I guess. I guess a couple of things. One, we can get a reasonable yield on the cash now. Still just given where rates are, or short rates are. And so, you know, we’re not given up a whole lot by doing that. If this were back in the 0% interest rate environment, that would be a lot different.

So that’s just point one, you know, look, we like having a little bit of cash in this kind of market. Honestly, if you looked across many Thornburg funds, you’d find reasonably higher cash levels than normal. It’s good to have some dry powder. I think we had a couple bonds called in 2025. You know, that that contributed a little bit. And, you know, as I mentioned earlier, you know, we’ll get a shot in credit at some point. So, it’s nice it’s nice to have a little bit of, of cash on hand. And we’re always balancing that level with, you know, against the opportunities that present to us, at the stock or bond level individually. And we’ll keep doing that in 2026.

Adam Sparkman: All right, Brian, maybe we’ll wrap with one last question here. With us companies more focused on buybacks and European companies more focused on dividends, to what extent do you factor in net buybacks as part of your analysis of income?

Brian McMahon: Yeah, we do factor it in. Basically, companies that are doing buybacks, there are just fewer straws in the drink, looking down the road, on how big a sip are we going to get? A year from now, two years from now, three years from now, five years from now. So, we do pay a lot of, attention to that.

And you’ll see that manifested in the dividends and the dividend growth rates. So, a number of our, companies have been, buying back shares. If I look at our, our top holdings, I could say, Citigroup, would be in that category. AT&T has just started buybacks, Total Energies, was buying back to almost, 2% for semiannual period. They paired that back a little bit. But, it’s, we like we like both. We like, dividends and buybacks. I think for tax reasons, sometimes, US companies tend to tilt it more heavily in favor of buybacks and less, in favor of dividends. But eventually that should mean higher dividends down the line.

Adam Sparkman: All right. Well, why don’t we leave it there for today? I’d like to thank everybody for being on the call, and we appreciate all the questions and making it as interactive as it was. As always, please feel free to reach out with any follow up questions. We’re all happy to make ourselves available and, share more about the fund and our thoughts on 2026. Thank you.

Important Information

For investment professional use only.

The views expressed are subject to change and do not necessarily reflect the views of Thornburg Investment Management, Inc. This information should not be relied upon as a recommendation or investment advice and is not intended to predict the performance of any investment or market.

There is no guarantee that the Fund will meet its investment objectives.

Neither the payment of, or increase in, dividends is guaranteed.

Investments carry risks, including possible loss of principal. Additional risks may be associated with investments outside the United States, especially in emerging markets, including currency fluctuations, illiquidity, volatility, and political and economic risks. Investments in small- and mid-capitalization companies may increase the risk of greater price fluctuations. Portfolios investing in bonds have the same interest rate, inflation, and credit risks that are associated with the underlying bonds. The value of bonds will fluctuate relative to changes in interest rates, decreasing when interest rates rise. Investments in the Fund are not FDIC insured, nor are they bank deposits or guaranteed by a bank or any other entity.

Before investing, carefully consider the Fund’s investment goals, risks, charges, and expenses. For a prospectus or summary prospectus containing this and other information, contact your financial advisor or visit thornburg.com. Read them carefully before investing.

Thornburg mutual funds are distributed by Thornburg Securities LLC.