BNY Mellon Core Plus Fund

Investor Summary

The BNY Mellon Core Plus Fund is managed by experienced portfolio managers from Insight North America LLC, led by James DiChiaro as Senior Portfolio Manager since August 2019, Scott Zaleski, CFA as Senior Portfolio Manager since November 2023, and Brendan Murphy, CFA as Head of Fixed Income North America since February 2024. The fund commenced operations on February 2, 2018, and is part of BNY Mellon Absolute Insight Funds, Inc. The management team brings extensive fixed-income expertise with a focus on proprietary credit research and multi-sector allocation strategies. The fund offers multiple share classes (A, C, I, Y) with different fee structures and distribution channels. As of January 2026, the fund manages $2.6 billion in assets across 697 securities with a portfolio turnover rate of 111.76%. The management approach emphasizes deliberate sector allocation and security selection rather than duration timing.

Fund Strategy

The BNY Mellon Core Plus Fund seeks high total return consistent with preservation of capital through a diversified portfolio of fixed-income securities of U.S. and foreign issuers. The fund normally invests primarily in fixed-income securities rated investment grade or comparable quality, with up to 25% in below investment grade bonds. The portfolio maintains an average effective duration between three and eight years. Insight North America LLC employs proprietary credit research focusing on sector and security selection, assessing value across duration and yield curve, credit and sector strategy, and security selection. The core plus strategy invests deliberately across the full range of credit markets and is designed to be the backbone of fixed income allocation. The strategy implements Insight's Units of Risk approach to scale multi-sector fixed income allocations in a precise and deliberate manner. The investment approach has achieved top quartile performance with alpha historically dominated by sector and security selection across multiple sectors.

ANNUALIZED SINCE INCEPTION	QUARTERLY	YTD
2.37%	1.33%	1%

Executive Summary

The BNY Mellon Core Plus Fund returned 1.39% for Q2 2026, outperforming the Bloomberg U.S. Aggregate Bond Index's 0.67% return. Performance was driven by allocations to high yield corporate bonds, convertible securities, and emerging market debt, along with overweight exposures to energy and utility sectors that benefited from rising commodity prices. Security selection in bank and utility hybrid securities further enhanced returns. Duration positioning modestly detracted as the Fed pivoted hawkish under new Chair Kevin Warsh, with nine members projecting at least one rate hike by year-end. Inflation accelerated to 4.2% headline CPI driven by Iran War-related energy price increases. The manager reduced corporate credit exposure toward quarter-end as valuations became less compelling, while increasing allocations to utility hybrids, agency MBS, and esoteric ABS. Looking forward, the manager expects 2% GDP growth underpinned by AI infrastructure investment and anticipates the Fed will hold rates steady despite market pricing for hikes. The fund sees selective opportunities in AI-related tech sector credit issuance and maintains longer duration positioning. Rising dispersion reinforces the importance of active security selection and relative value focus.

Core Thesis

The BNY Mellon Core Plus Fund maintains a constructive outlook on fixed income, expecting the Fed to hold rates steady despite market pricing for hikes, which creates value opportunities. The fund is positioned with overweight allocations to corporate credit, utility hybrids, and agency MBS/ABS, while maintaining longer duration than the benchmark. The manager sees selective opportunities in AI-related tech sector credit issuance and expects U.S. GDP growth near 2% driven by digital and AI infrastructure investment.

Forward Outlook

The manager's central case is that U.S. GDP growth will be close to 2% both in 2026 and 2027, underpinned by the ongoing surge in digital and AI infrastructure development. They expect the Fed will leave rates unchanged, despite market pricing reflecting potential hikes, viewing this as a potential mispricing that reflects value in fixed income exposure. In U.S. credit, all-in yields remain elevated and are expected to continue to drive demand. The manager sees opportunities to add exposure selectively to AI-related issuance, favoring U.S. dollar tech sector issuance where market depth provides greater ability to absorb high degrees of issuance. Rising dispersion reinforces the importance of disciplined active management, careful security selection, and a focus on relative value.

Date	Letter	Tickers	Keywords	Pitches	Quick Takes
Jul 23 2026	2026 Q2	-	AI, credit, energy, Federal Reserve, fixed income, inflation, rates	-	BNY Mellon Core Plus Fund outperformed in Q2 2026 on high yield, convertibles, and energy/utility sector positioning despite Fed hawkish pivot under new Chair Warsh. Manager trimmed corporate credit as valuations compressed but added utility hybrids and MBS/ABS. Expects Fed holds rates despite market pricing hikes, creating fixed income value. Sees selective AI infrastructure credit opportunities. Maintains longer duration and overweight credit positioning targeting 2% GDP growth.
Apr 21 2026	2026 Q1	-	credit, duration, energy, Fed policy, fixed income, inflation	-	BNY Mellon Core Plus underperformed in Q1 2026 as Iran war drove oil above $100 and forced Fed to revise inflation forecasts higher. Duration positioning hurt performance while ABS and CLO overweights helped. Manager increased credit exposure on improved valuations and expects Fed to look through energy inflation if contained.
Jan 23 2026	2025 Q4	-	AI, credit, duration, Federal Reserve, fixed income, rates	-	BNY Mellon Core Plus Fund delivered solid Q4 performance through effective duration management and credit positioning. With the Fed cutting rates 50bp and strong corporate fundamentals supporting credit markets, the fund maintains overweight exposure across investment grade and high yield while positioning for continued economic growth supported by AI-related capital investment.
Oct 21 2025	2025 Q3	SPY	Bonds, credit, duration, Fed, fixed income, rates, Yield	-	BNY Mellon Core Plus outperformed in Q3 2025 as the Fed delivered its first rate cut since December. Credit strategy drove returns with spreads tightening across investment grade and high yield. The manager maintains overweight credit positioning, viewing the combination of Fed easing and slowing but positive economic growth as compelling for fixed income markets.
Jul 20 2025	2025 Q2	-	Bonds, credit, Fed policy, fixed income, rates, Trade Policy	-	BNY Mellon Core Plus outperformed on credit strategy as Fed cut rates 25bp with more cuts expected. Portfolio maintains overweight credit allocation across investment grade and high yield. Manager sees value in US fixed income, particularly front-end, and expects slowing but positive growth to benefit credit markets despite ongoing trade tensions and government shutdown uncertainty.
Mar 31 2025	2025 Q1	-	Bonds, credit, duration, Fed policy, fixed income, tariffs	-	BNY Mellon Core Plus underperformed due to credit overweights amid tariff-driven market uncertainty. Trump administration policies sparked inflation concerns and Fed forecast revisions. The fund tactically increased credit exposure while maintaining cautious optimism on investment grade bonds, expecting political volatility to create opportunities for active managers through elevated issuance and spread repricing.
Dec 31 2024	2024 Q4	-	Corporate Bonds, credit, duration, Fed policy, fixed income, inflation	-	BNY Mellon Core Plus underperformed in Q4 as duration positioning hurt amid rising Treasury yields post-election. The team pivoted from risk reduction to credit expansion based on improved growth outlook, adding high yield and securitized assets. They expect continued but slower Fed easing with corporate fundamentals remaining strong despite anticipating heavy investment grade supply in early 2025.
Jun 30 2024	2024 Q2	-	credit, duration, Fed policy, fixed income, inflation, rates	-	BNY Mellon Core Plus outperformed in Q2 through credit selection and duration positioning. The fund reduced investment grade exposure due to tight valuations while increasing high yield allocation for better yields. With Fed cuts expected starting September and economic moderation beginning, the strategy focuses on security selection while rotating into more attractive MBS and ABS sectors.

Date

Letter

Tickers

Keywords

Pitches

Quick Takes

Jul 23 2026

2026 Q2

AI, credit, energy, Federal Reserve, fixed income, inflation, rates

BNY Mellon Core Plus Fund outperformed in Q2 2026 on high yield, convertibles, and energy/utility sector positioning despite Fed hawkish pivot under new Chair Warsh. Manager trimmed corporate credit as valuations compressed but added utility hybrids and MBS/ABS. Expects Fed holds rates despite market pricing hikes, creating fixed income value. Sees selective AI infrastructure credit opportunities. Maintains longer duration and overweight credit positioning targeting 2% GDP growth.

Apr 21 2026

2026 Q1

credit, duration, energy, Fed policy, fixed income, inflation

BNY Mellon Core Plus underperformed in Q1 2026 as Iran war drove oil above $100 and forced Fed to revise inflation forecasts higher. Duration positioning hurt performance while ABS and CLO overweights helped. Manager increased credit exposure on improved valuations and expects Fed to look through energy inflation if contained.

Jan 23 2026

2025 Q4

AI, credit, duration, Federal Reserve, fixed income, rates

BNY Mellon Core Plus Fund delivered solid Q4 performance through effective duration management and credit positioning. With the Fed cutting rates 50bp and strong corporate fundamentals supporting credit markets, the fund maintains overweight exposure across investment grade and high yield while positioning for continued economic growth supported by AI-related capital investment.

Oct 21 2025

2025 Q3

SPY

Bonds, credit, duration, Fed, fixed income, rates, Yield

BNY Mellon Core Plus outperformed in Q3 2025 as the Fed delivered its first rate cut since December. Credit strategy drove returns with spreads tightening across investment grade and high yield. The manager maintains overweight credit positioning, viewing the combination of Fed easing and slowing but positive economic growth as compelling for fixed income markets.

Jul 20 2025

2025 Q2

Bonds, credit, Fed policy, fixed income, rates, Trade Policy

BNY Mellon Core Plus outperformed on credit strategy as Fed cut rates 25bp with more cuts expected. Portfolio maintains overweight credit allocation across investment grade and high yield. Manager sees value in US fixed income, particularly front-end, and expects slowing but positive growth to benefit credit markets despite ongoing trade tensions and government shutdown uncertainty.

Mar 31 2025

2025 Q1

Bonds, credit, duration, Fed policy, fixed income, tariffs

BNY Mellon Core Plus underperformed due to credit overweights amid tariff-driven market uncertainty. Trump administration policies sparked inflation concerns and Fed forecast revisions. The fund tactically increased credit exposure while maintaining cautious optimism on investment grade bonds, expecting political volatility to create opportunities for active managers through elevated issuance and spread repricing.

Dec 31 2024

2024 Q4

Corporate Bonds, credit, duration, Fed policy, fixed income, inflation

BNY Mellon Core Plus underperformed in Q4 as duration positioning hurt amid rising Treasury yields post-election. The team pivoted from risk reduction to credit expansion based on improved growth outlook, adding high yield and securitized assets. They expect continued but slower Fed easing with corporate fundamentals remaining strong despite anticipating heavy investment grade supply in early 2025.

Jun 30 2024

2024 Q2

credit, duration, Fed policy, fixed income, inflation, rates

BNY Mellon Core Plus outperformed in Q2 through credit selection and duration positioning. The fund reduced investment grade exposure due to tight valuations while increasing high yield allocation for better yields. With Fed cuts expected starting September and economic moderation beginning, the strategy focuses on security selection while rotating into more attractive MBS and ABS sectors.

QUARTER	THEMES	TAGS
2026 Q2	AI AI-related capex needs drove continued high credit supply. AI-related issuance has been one of the major market developments, with relentless issuance increasing market concentrations and widening tech sector spreads. The manager sees opportunities to add exposure selectively, favoring U.S. dollar tech sector issuance where market depth provides greater ability to absorb high degrees of issuance.	Infrastructure Capex Credit Technology
	Energy Headline inflation reflected higher energy prices relating to the Iran War. Overweight exposures to the energy sector benefited from rising commodity prices. Gains were selectively realized within the energy sector following strong performance driven by higher commodity prices.	Commodity Prices Iran War Inflation
	Rates The FOMC pivoted from dovish to slightly hawkish during Q2. Kevin Warsh's debut as Fed chair showed nine members estimated at least one hike by end of 2026. Front-end U.S. Treasury yields rose as markets shifted from debating timing of cuts to pricing a meaningful probability of hikes. The manager expects the Fed will leave rates unchanged despite market pricing reflecting potential hikes, viewing this mispricing as value in fixed income.	Federal Reserve Monetary Policy Treasury Yields Interest Rates
	Credit Credit spreads narrowed significantly despite continued high supply. All-in yields remain elevated and the manager expects them to continue to drive demand. The strategy maintained overweight allocations to corporate credit, including both investment grade and high yield securities, for most of the quarter, though exposure was reduced toward quarter-end as valuations became less compelling.	Corporate Bonds High Yield Investment Grade Spreads
	Inflation Headline CPI accelerated from 2.4% to 4.2% year-over-year, driven by higher energy prices relating to the Iran War. Headline PCE rose from 2.8% to 4.2% year-over-year. Core CPI rose from 2.5% to 2.9% and core PCE rose from 3% to 3.4%. Elevated commodity prices contributed to renewed inflation concerns.	CPI PCE Energy Prices Commodity Prices
2026 Q1	Oil Iran war began causing global oil price shock with WTI crude spiking above $100 per barrel. Disruptions to Strait of Hormuz shipping impacted ~20% of global oil supplies. Average US gasoline prices rose from ~$3 to ~$4 per gallon.	Oil Energy Geopolitical
	Inflation FOMC revised year-end inflation forecasts higher due to oil price shock. Headline CPI at 2.4% and core CPI at 2.5% year-over-year in February, not yet reflecting higher energy prices. Fed expected to look through energy price inflation if second round impacts contained.	Inflation Fed Energy
	Rates FOMC kept rates on hold after three consecutive cuts in 2025. Markets moved to price only 62% chance of rate cut by July 2027 due to escalating conflict. Treasury yields rose over the period, particularly at front end as investors priced out probability of rate cuts.	Rates Fed Treasury
2025 Q4	Pharmaceuticals Health care holdings including pharmaceutical and biotechnology companies added meaningfully to returns. Holdings such as Roche, Novartis, and Ionis Pharmaceuticals benefited from new drug approvals, steady and growing earnings, and business models that continue to generate cash through a wide range of economic conditions.	Pharmaceuticals Biotechnology Healthcare
	Technology Selected technology-related companies contributed for the quarter, particularly established franchises such as Samsung Electronics and Alphabet. While the shares of both companies soared upward in price during the year, they remain reasonably valued relative to their near-term growth prospects.	Technology Samsung Alphabet
	Defense Spending Defense-related holdings such as BAE Systems and Rheinmetall had been standout performers for much of the year but fell back in Q4. While these businesses currently benefit from secular growth in defense spending around the world, share prices have moved ahead of underlying fundamentals, and positions have been modestly trimmed.	Defense BAE Systems Rheinmetall
	Industrials Industrials were mixed and faced a modest headwind. CNH Industrial detracted across the Funds, reflecting investors' continued concerns about the downturn of the Ag cycle and its impact on end-market demand. CNH remains significantly undervalued and positions are being added opportunistically.	Industrials CNH Industrial Agriculture
	Valuations High, if not excessive, valuations across most asset categories, particularly publicly traded US equities. The gap in valuation between US and non-US equities still remains quite significant and should serve well going forward given the non-US-centric postures of fund portfolios.	Valuations US Equities International
	AI Market enthusiasm is likely some combination of benign economic conditions and new era thinking, most likely excitement around the prospects for artificial intelligence and its ability to dramatically impact productivity. However, even the most profound technological revolutions aren't one-way streets to prosperity.	AI Artificial Intelligence Productivity
2025 Q3	Rates The Federal Reserve delivered a 25bp rate cut to 4%-4.25% range, marking the first cut since December. The Fed's dot plot reflected two additional rate cuts by year-end. US fixed income offers value particularly at the front of the curve with rate cuts now back on the Fed's agenda.	Fed Rate cuts Monetary policy Yield curve Duration
	Credit Credit strategy was the primary driver of outperformance with investment grade credit spreads narrowing by 9bp and high yield spreads narrowing by 23bp. Credit market fundamentals look robust with defaults expected to remain historically benign. The portfolio maintained an overweight allocation to credit across investment grade, high yield, and emerging market corporates.	Investment grade High yield Credit spreads Corporate bonds Defaults
	Inflation Inflation remained above-target with headline CPI rising from 2.4% to 2.9% and core CPI rising from 2.9% to 3.1%. Inflation was notable in food, shelter and supercore categories. Tariff inflation was evident in small categories like televisions, sewing machines and jewelry.	CPI PCE Core inflation Tariffs Above-target
2025 Q2	Rates The Federal Reserve delivered a 25bp rate cut to 4%-4.25% range, marking the first cut since December. The Fed's dot plot reflected two additional rate cuts by year-end. US fixed income offers value particularly at the front of the curve with rate cuts now back on the Fed's agenda.	Fed Monetary Policy Yield Curve Duration Treasury
	Credit Credit strategy was the primary driver of outperformance with investment grade credit spreads narrowing 9bp and high yield spreads narrowing 23bp. Credit market fundamentals look robust with defaults expected to remain historically benign. The portfolio maintained an overweight allocation to credit across investment grade, high yield, and emerging market corporates.	Investment Grade High Yield Spreads Corporate Bonds Credit Risk
	Trade Policy The White House announced new tariff rates due to take effect in early August, with some similar to April's Liberation Day announcement while others on Canada, Mexico and Brazil were more severe. New 25% tariffs on India were announced as retaliation for purchasing Russian oil. Tariff inflation was evident in small categories like televisions, sewing machines and jewelry.	Tariffs Trade War Protectionism Import Duties Trade Relations
2025 Q1	Trade Policy The Trump administration implemented significant tariff policies including 25% tariffs on Canada and Mexico, 10% tariffs on China, and 25% blanket tariffs on steel and aluminum. These policies created market uncertainty and are expected by economists to result in higher near-term inflation and drag on growth.	Tariffs USMCA Inflation Growth Policy
	Rates The Federal Reserve slowed quantitative tightening, reducing Treasury roll-offs from $25bn to $5bn per month. The Fed projected higher inflation forecasts at 2.7-2.8% and lower GDP growth at 1.7% for 2025, with tariffs being a major factor in these revisions.	Fed QT Inflation GDP Monetary
	Credit Stress Investment grade and high yield credit markets delivered negative excess returns during the quarter, with the Bloomberg US Corporate Investment Grade index at -0.85% and High Yield at -1.13% excess returns. The fund's overweight to credit was the primary detractor from performance.	Credit Spreads Investment Grade High Yield Corporate
2024 Q4	Credit The fund increased credit exposure after the election due to improved economic growth outlook. Investment grade credit spreads narrowed by 8bp with excess returns of 82bp. High yield markets narrowed by 12bp for 1.2% excess returns.	Investment Grade High Yield Spreads Credit Risk Corporate Bonds
	Rates The Fed cut rates by 25bp twice to 4.25-4.5% range. Treasury yields rose up to 83bp, fully disinverting the yield curve. The fund removed long duration positioning early in the quarter as rate cut expectations diminished.	Fed Funds Duration Yield Curve Treasury Rate Cuts
	Inflation CPI rose from 2.5% to 2.7% and PCE from 2.3% to 2.4%. Core measures also increased but sticky services categories showed improvement. The Fed raised 2025 inflation projections to 2.5% from 2.1%.	CPI PCE Core Inflation Services Fed Projections
2024 Q2	Credit Investment grade credit continues to offer yields comparable to long-term equity returns despite spreads tightening to average levels. The fund reduced IG exposure during the quarter due to valuations near historical ranges but sees opportunities to add back on weakness. High yield benefits from strong technicals with supply dominated by refinancing and outstripped by demand.	Investment Grade High Yield Spreads Credit Risk Yields
	Rates Fed expected to begin cutting rates in September with further reductions to 4.5% over the next year. Short-term Treasury yields likely to fall more than longer-dated yields, with two-year rates heading to 3.85% and 10-year yields declining to 4%. Duration positioning added to performance through overweight to US duration.	Fed Policy Rate Cuts Treasury Yields Duration Monetary Policy
	Inflation Inflation data was mixed during the quarter with headline CPI declining from 3.5% to 3.3% but core CPI finishing lower at 3.4%. The fund expects inflation to slowly moderate further, averaging 3.1% in 2024 and 2.3% in 2025. A short position in UK inflation was additive to performance.	CPI Core Inflation PCE Disinflation Price Pressures

QUARTER

THEMES

AI

AI-related capex needs drove continued high credit supply. AI-related issuance has been one of the major market developments, with relentless issuance increasing market concentrations and widening tech sector spreads. The manager sees opportunities to add exposure selectively, favoring U.S. dollar tech sector issuance where market depth provides greater ability to absorb high degrees of issuance.

Infrastructure Capex Credit Technology

Energy

Headline inflation reflected higher energy prices relating to the Iran War. Overweight exposures to the energy sector benefited from rising commodity prices. Gains were selectively realized within the energy sector following strong performance driven by higher commodity prices.

Commodity Prices Iran War Inflation

Rates

The FOMC pivoted from dovish to slightly hawkish during Q2. Kevin Warsh's debut as Fed chair showed nine members estimated at least one hike by end of 2026. Front-end U.S. Treasury yields rose as markets shifted from debating timing of cuts to pricing a meaningful probability of hikes. The manager expects the Fed will leave rates unchanged despite market pricing reflecting potential hikes, viewing this mispricing as value in fixed income.

Federal Reserve Monetary Policy Treasury Yields Interest Rates

Credit

Credit spreads narrowed significantly despite continued high supply. All-in yields remain elevated and the manager expects them to continue to drive demand. The strategy maintained overweight allocations to corporate credit, including both investment grade and high yield securities, for most of the quarter, though exposure was reduced toward quarter-end as valuations became less compelling.

Corporate Bonds High Yield Investment Grade Spreads

Inflation

Headline CPI accelerated from 2.4% to 4.2% year-over-year, driven by higher energy prices relating to the Iran War. Headline PCE rose from 2.8% to 4.2% year-over-year. Core CPI rose from 2.5% to 2.9% and core PCE rose from 3% to 3.4%. Elevated commodity prices contributed to renewed inflation concerns.

CPI PCE Energy Prices Commodity Prices

2026 Q1

Oil

Iran war began causing global oil price shock with WTI crude spiking above $100 per barrel. Disruptions to Strait of Hormuz shipping impacted ~20% of global oil supplies. Average US gasoline prices rose from ~$3 to ~$4 per gallon.

Oil Energy Geopolitical

Inflation

FOMC revised year-end inflation forecasts higher due to oil price shock. Headline CPI at 2.4% and core CPI at 2.5% year-over-year in February, not yet reflecting higher energy prices. Fed expected to look through energy price inflation if second round impacts contained.

Inflation Fed Energy

Rates

FOMC kept rates on hold after three consecutive cuts in 2025. Markets moved to price only 62% chance of rate cut by July 2027 due to escalating conflict. Treasury yields rose over the period, particularly at front end as investors priced out probability of rate cuts.

Rates Fed Treasury

2025 Q4

Pharmaceuticals

Health care holdings including pharmaceutical and biotechnology companies added meaningfully to returns. Holdings such as Roche, Novartis, and Ionis Pharmaceuticals benefited from new drug approvals, steady and growing earnings, and business models that continue to generate cash through a wide range of economic conditions.

Pharmaceuticals Biotechnology Healthcare

Technology

Selected technology-related companies contributed for the quarter, particularly established franchises such as Samsung Electronics and Alphabet. While the shares of both companies soared upward in price during the year, they remain reasonably valued relative to their near-term growth prospects.

Technology Samsung Alphabet

Defense Spending

Defense-related holdings such as BAE Systems and Rheinmetall had been standout performers for much of the year but fell back in Q4. While these businesses currently benefit from secular growth in defense spending around the world, share prices have moved ahead of underlying fundamentals, and positions have been modestly trimmed.

Defense BAE Systems Rheinmetall

Industrials

Industrials were mixed and faced a modest headwind. CNH Industrial detracted across the Funds, reflecting investors' continued concerns about the downturn of the Ag cycle and its impact on end-market demand. CNH remains significantly undervalued and positions are being added opportunistically.

Industrials CNH Industrial Agriculture

Valuations

High, if not excessive, valuations across most asset categories, particularly publicly traded US equities. The gap in valuation between US and non-US equities still remains quite significant and should serve well going forward given the non-US-centric postures of fund portfolios.

Valuations US Equities International

AI

Market enthusiasm is likely some combination of benign economic conditions and new era thinking, most likely excitement around the prospects for artificial intelligence and its ability to dramatically impact productivity. However, even the most profound technological revolutions aren't one-way streets to prosperity.

AI Artificial Intelligence Productivity

2025 Q3

Rates

The Federal Reserve delivered a 25bp rate cut to 4%-4.25% range, marking the first cut since December. The Fed's dot plot reflected two additional rate cuts by year-end. US fixed income offers value particularly at the front of the curve with rate cuts now back on the Fed's agenda.

Fed Rate cuts Monetary policy Yield curve Duration

Credit

Credit strategy was the primary driver of outperformance with investment grade credit spreads narrowing by 9bp and high yield spreads narrowing by 23bp. Credit market fundamentals look robust with defaults expected to remain historically benign. The portfolio maintained an overweight allocation to credit across investment grade, high yield, and emerging market corporates.

Investment grade High yield Credit spreads Corporate bonds Defaults

Inflation

Inflation remained above-target with headline CPI rising from 2.4% to 2.9% and core CPI rising from 2.9% to 3.1%. Inflation was notable in food, shelter and supercore categories. Tariff inflation was evident in small categories like televisions, sewing machines and jewelry.

CPI PCE Core inflation Tariffs Above-target

2025 Q2

Rates

Fed Monetary Policy Yield Curve Duration Treasury

Credit

Credit strategy was the primary driver of outperformance with investment grade credit spreads narrowing 9bp and high yield spreads narrowing 23bp. Credit market fundamentals look robust with defaults expected to remain historically benign. The portfolio maintained an overweight allocation to credit across investment grade, high yield, and emerging market corporates.

Investment Grade High Yield Spreads Corporate Bonds Credit Risk

Trade Policy

The White House announced new tariff rates due to take effect in early August, with some similar to April's Liberation Day announcement while others on Canada, Mexico and Brazil were more severe. New 25% tariffs on India were announced as retaliation for purchasing Russian oil. Tariff inflation was evident in small categories like televisions, sewing machines and jewelry.

Tariffs Trade War Protectionism Import Duties Trade Relations

2025 Q1

Trade Policy

The Trump administration implemented significant tariff policies including 25% tariffs on Canada and Mexico, 10% tariffs on China, and 25% blanket tariffs on steel and aluminum. These policies created market uncertainty and are expected by economists to result in higher near-term inflation and drag on growth.

Tariffs USMCA Inflation Growth Policy

Rates

The Federal Reserve slowed quantitative tightening, reducing Treasury roll-offs from $25bn to $5bn per month. The Fed projected higher inflation forecasts at 2.7-2.8% and lower GDP growth at 1.7% for 2025, with tariffs being a major factor in these revisions.

Fed QT Inflation GDP Monetary

Credit Stress

Investment grade and high yield credit markets delivered negative excess returns during the quarter, with the Bloomberg US Corporate Investment Grade index at -0.85% and High Yield at -1.13% excess returns. The fund's overweight to credit was the primary detractor from performance.

Credit Spreads Investment Grade High Yield Corporate

2024 Q4

Credit

The fund increased credit exposure after the election due to improved economic growth outlook. Investment grade credit spreads narrowed by 8bp with excess returns of 82bp. High yield markets narrowed by 12bp for 1.2% excess returns.

Investment Grade High Yield Spreads Credit Risk Corporate Bonds

Rates

The Fed cut rates by 25bp twice to 4.25-4.5% range. Treasury yields rose up to 83bp, fully disinverting the yield curve. The fund removed long duration positioning early in the quarter as rate cut expectations diminished.

Fed Funds Duration Yield Curve Treasury Rate Cuts

Inflation

CPI rose from 2.5% to 2.7% and PCE from 2.3% to 2.4%. Core measures also increased but sticky services categories showed improvement. The Fed raised 2025 inflation projections to 2.5% from 2.1%.

CPI PCE Core Inflation Services Fed Projections

2024 Q2

Credit

Investment grade credit continues to offer yields comparable to long-term equity returns despite spreads tightening to average levels. The fund reduced IG exposure during the quarter due to valuations near historical ranges but sees opportunities to add back on weakness. High yield benefits from strong technicals with supply dominated by refinancing and outstripped by demand.

Investment Grade High Yield Spreads Credit Risk Yields

Rates

Fed expected to begin cutting rates in September with further reductions to 4.5% over the next year. Short-term Treasury yields likely to fall more than longer-dated yields, with two-year rates heading to 3.85% and 10-year yields declining to 4%. Duration positioning added to performance through overweight to US duration.

Fed Policy Rate Cuts Treasury Yields Duration Monetary Policy

Inflation

Inflation data was mixed during the quarter with headline CPI declining from 3.5% to 3.3% but core CPI finishing lower at 3.4%. The fund expects inflation to slowly moderate further, averaging 3.1% in 2024 and 2.3% in 2025. A short position in UK inflation was additive to performance.

CPI Core Inflation PCE Disinflation Price Pressures

Date	Pitch Type	Author	Ticker	Company	Industry	Sub Industry	Bull / Bear	Exchange	Keywords	Action
No Elevator Pitches found

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Investment Summary

Investor Summary

Fund Strategy

FUND PERFORMANCE AS OF 30th June 2026

Investor Letters

Latest Executive Summary:

Executive Summary

Core Thesis

Forward Outlook

Investment Themes

AI

Energy

Rates

Credit

Inflation

Oil

Inflation

Rates

Pharmaceuticals

Technology

Defense Spending

Industrials

Valuations

AI

Rates

Credit

Inflation

Rates

Credit

Trade Policy

Trade Policy

Rates

Credit Stress

Credit

Rates

Inflation

Credit

Rates

Inflation

Investor Pitches

Current Portfolio as of ( 30th June 2026 )

Key Risks identified by Manager:

Key catalysts include:

Portfolio Implications

Ticker Commentary

Brendan Murphy Top Holdings

Recent Buys (13F)

Recent Sells (13F)

13F Sector Summary

Portfolio Distribution

Latest 13D & 13G Filings

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BNY Mellon Core Plus Fund