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The Fund trailed its Barclays Capital U.S. Aggregate Bond benchmark for the quarter. Generally, performance during the quarter was
relatively weak for riskier assets, such as corporate bonds, and stronger for less risky assets, such as U.S. Treasuries. Concerns over
sovereign debt levels in Greece and other European countries, the oil spill in the Gulf of Mexico, and the financial reform legislation
were among the factors that had a negative impact on the pricing of risk assets. In contrast, Treasury yields fell (and prices rose)
substantially during the quarter. The yield on the Ten-Year Treasury Note, which was just under 4% in early April, closed the quarter
below 3%.
During the quarter, the Fund was overweight in corporate securities and underweight in U.S. Treasuries relative to its benchmark.
That positioning was the largest negative contributor to relative performance for the quarter, due largely to overweight positions in
banks and high-yield bonds. Additionally, the Fund had a small ownership position in Anadarko Petroleum (0.9% of the Fund), an
entity with a non-operating ownership interest in the oil rig that exploded on April 20 and led to the oil spill in the Gulf of Mexico.
The Anadarko holding contributed an estimated 25 basis points (0.25 percentage point) of underperformance during the quarter.
Looking forward, despite the struggles of the second quarter, the Fund is maintaining its strategic positioning, focusing on
overweights in the senior debt of the larger, money center banking institutions, older vintage commercial mortgage-backed securities
and subordinated automobile backed asset-backed securities (ABS). Additionally, due to valuation considerations, the Fund has begun
to increase its U.S. agency mortgage positioning and decrease its senior ABS holdings.
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Past performance does not guarantee future results. The Fund's investment objectives, risks, charges and expenses must be considered carefully before investing. The prospectus and summary prospectus contain this and other important information about the Fund. To obtain a prospectus and summary prospectus, click here. Read the prospectus and summary prospectuses carefully before investing.
RISKS: Bond Funds will tend to experience smaller fluctuations in value than stock funds. However, investors in any bond fund should anticipate fluctuations in price, especially for longer-term issues and in environments of rising interest rates. A significant portion of the Fund is invested in mortgage-backed securities, which are subject to higher prepayment risk than corporate bonds and notes, particularly in periods of declining interest rates. The Fund also invests in Yankee securities (i.e., dollar-denominated securities of foreign issuers), which involve additional risks due to foreign economic and political conditions, and differences in financial reporting standards.
The Barclays Capital U.S. Aggregate Bond Index is a market-value-weighted index designed to measure the U.S. investment-grade, fixed-rate bond market, which includes publicly issued, fixed-rate, non-convertible, dollar-denominated, taxable U.S. government, corporate, mortgage pass-through and asset-backed securities rated investment grade or higher. You cannot invest directly in an index, securities in the Fund will not match those in an index, and performance of the Fund will differ. Although reinvestment of dividend and interest payments is assumed, no expenses are netted against an index’s returns.
Credit ratings are issued by credit rating agencies and reflect the agency's assessment of the risk of a bond based on the issuer's capacity to meet its financial commitment on the bond. Ratings range from AAA (highest credit quality) to D (in default).
Munder Funds are distributed by Funds Distributor, LLC 07/10
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Edward D. Goard, CFA
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| Co-Chief Investment Officer, Fixed Income and Senior Portfolio Manager |
| BS in International Finance from San Francisco State University. |
Joined Munder Capital Management in 2007
| Years of Experience:17 |
| Focus:As Co-Chief Investment Officer of Fixed Income, Ed focuses on overseeing the management and monitoring of our core fixed income strategies. Additionally, Ed manages multi-sector fixed income portfolios. He joined Munder Capital in 2007 with expert knowledge of the mortgage-backed securities market. Previously, Ed was with Barclays Global Investors (BGI) with direct responsibility for managing $40 billion of fixed income investments and a team of portfolio managers. At BGI, he was a Principal, the Head of Interest Rate and Mortgage Strategy, and Senior Portfolio Manager where he helped develop and implement several multi-sector core and core-plus fixed income strategies. Additionally, he served as a member of the fixed income investment committee providing expertise in sector allocation, mortgage, and interest rate strategy. He has 16 years of capital markets and portfolio management experience and earned a B.S. in International Finance from San Francisco State University. Ed is a CFA® charterholder and a member of the CFA Institute. |
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Michael J. Krushena, CFA
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| Senior Portfolio Manager |
| BA in Economics from the University of Michigan |
| MBA in Finance from the University of Michigan |
Joined Munder Capital Management in 2000
| Years of Experience:15 |
| Focus:Responsible for managing fixed income and cash portfolios and trades asset-backed and corporate bonds. Also co-manages the Munder Bond Fund. |
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| Munder Funds distributed by Funds Distributor, LLC. |
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