Hedged Income Fund Commentary
The U.S. stock market was volatile but flat during the third quarter, as the S&P 500 Index rallied 6% during July and August but declined almost as much during September. Slowing economic growth concerns, especially on the heels of tightening regulation in China, joined U.S. policy risks (fiscal cliff, potential tax legislation, and a debt ceiling showdown) at the top of investors’ minds. Additionally, the 10-year U.S. Treasury note’s yield increased more than 20 basis points (0.20%) during the final week of September as markets continue to try to understand how transitory existing inflationary data are.
Positioning the Hedged Income Fund
Portfolio composition is subject to change.
We believe the current early-to-mid cycle state of the economy argues for continuing to own cyclical stocks over defensive ones. Although the rate of positive change for economic data has likely peaked with the anniversary of the U.S. COVID-19 recovery, we believe data can remain highly positive for the near future. At the same time, we have become more constructive on health care stocks. We believe investors may turn to health care companies as a source of stable growth in an environment where uncertainties abound in the technology sector.
Why Should Investors Consider Investing in This Fund?
With interest rates being kept historically low, income is harder for investors to come by. This Fund offers a low-volatility solution with some exposure to the equity market. As a result, it provides the opportunity to earn income without a great deal of exposure to risk.
An investor should consider a fund’s investment objectives, risks and charges and expenses carefully before investing or sending money This and other important information about an investment company can be found in the fund’s prospectus. To obtain a Cavanal Hill Funds prospectus or summary prospectus, please call 800-762-7085 or visit us at www.cavanalhillfunds.com. Please read it carefully before investing.
The S&P 500 Index is regarded as a gauge of the U.S. equities market. This index includes 500 leading companies in leading industries of the U.S. economy. Although the S&P 500 focuses on the large-cap segment of the market, with approximately 75% coverage of U.S. equities, it is also an ideal proxy for the total market. This index is unmanaged and does not reflect the deduction of the expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund’s performance reflects the deduction of fees for these services, but does not reflect he deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Investors cannot invest directly in an index.
Not FDIC Insured | No Guarantee | May Lose Value