Commonfund Introduces New Core Bond Fund for Higher Education
Multi-strategy, Multi-manager style Fund Opens with Assets of $100M
WILTON, CT, May 6, 2002 — Commonfund, one of the nation's leading managers of investment funds for nonprofit institutions, announced today the introduction of its new Core Bond Fund (CBF). Created in response to market demand, the new CBF is an actively managed core fixed income vehicle for investors seeking an approach that adds value relative to the Lehman Aggregate Index while controlling portfolio volatility. This fund has a targeted tracking error of 0.25 - 0.75% to the Lehman index and seeks to outperform the broad U.S. market by 50 to 75 basis points*. It opened on March 1, 2002 with assets of $100M.
"We are pleased to offer a new core fixed income strategy for colleges and universities that are interested in a more traditional approach to fixed income and reducing the risk profile of their bond portfolios, as they have increased allocations to equities and alternative investments," said MaryEllen Beaudreault, Senior Vice President, Commonfund Asset Management Company. "The Core Bond Fund fills this need with an active management style that seeks to reduce interest rate risk and invests solely in high quality U.S. securities."
CBF will focus on domestic investment grade debt securities of Baa/BBB or better, and utilize sector rotation, undervalued security selection and yield curve position to add value. Its duration is designed to be relatively neutral to the broad market, and is not anticipated that the fund will use significant duration shifts or interest rate anticipation strategies. CBF offers diversification by allocating assets among three managers: Western Asset Management Company (40%), BlackRock Financial Management (30%), and Reams Asset Management (30%).
Western Asset Management Company manages close to $90 billion and focuses on adding value through duration, yield curve sector, and security selection. BlackRock is a duration-neutral, sector rotation manager with expertise in the mortgage sector and manages about $200 billion. Reams Asset Management has about $12 billion under management, and specializes in adding value through duration management and security selection.
About Commonfund
Founded in 1971, Commonfund is devoted to enhancing the financial resources of educational and other select nonprofit institutions including endowments, foundations and healthcare organizations through superior fund management, investment advice, treasury operations and e-procurement services. Directly or through its subsidiaries, Commonfund Capital, Commonfund Treasury, Commonfund Realty, and Commonfund Asset Management Company, Commonfund manages approximately $29 billion for more than 1,500 member educational institutions, foundations, healthcare and other nonprofit institutions, representing one of the largest pools of educational endowment and operating funds in the world. In response to the growing needs of nonprofit institutions, Commonfund, together with its subsidiary companion organizations, offers more than 45 different endowment investment programs including funds for the management of short- and intermediate-term operating cash reserves. All securities are distributed through Commonfund Securities, Inc.
* There can be no assurance that these objectives will be achieved.