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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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"FPA New Income Fund returned 1.76% in Q3 2025 by taking a highly defensive stance, completely avoiding expensive lower-rated credit and shifting capital into cash and longer-duration, high-quality Treasuries."
In Q3 2025, FPA New Income Fund delivered a return of 1.76%. Portfolio Manager Abhijeet Patwardhan highlights a highly expensive market environment where fixed income spreads are near all-time lows (Bloomberg U.S. Aggregate Bond Index spread at the zero percentile). Consequently, the fund completely avoided credit investments (rated BBB or lower), allowing its credit exposure to decline to 3.8%. Instead, the fund deployed capital into cash and equivalents (increasing to 7.1%) and longer-duration, High Quality bonds (such as U.S. Treasuries, which increased to 17.1% of the portfolio) that passed the fund's 100 bps duration stress test. This conservative posture is designed to deliver resilient risk-adjusted returns and downside protection against potential spread widening or market volatility.
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Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.
Market Conviction
High-conviction positioning: FPA New Income Fund returned 1.76% in Q3 2025 by taking a highly defensive stance, completely avoiding expensive lower-rated credit and shifting capital into cash and longer-durati...
Growth Outlook
Market outlook remains low conviction: FPA New Income Fund returned 1.76% in Q3 2025 by taking a highly defensive stance, completely avoiding expensive lower-rated credit and shifting capital into cash and longer-durati...
Risk Appetite
Risk appetite posture is low conviction: FPA New Income Fund returned 1.76% in Q3 2025 by taking a highly defensive stance, completely avoiding expensive lower-rated credit and shifting capital into cash and longer-durati...
Capital Deployment
Manager actively deployed capital into high-conviction opportunities. FPA New Income Fund returned 1.76% in Q3 2025 by taking a highly defensive stance, completely avoiding expensive lower-rated credit and shifting capital into cash and longer-durati...
Forward Guidance
Forward guidance signal: FPA New Income Fund returned 1.76% in Q3 2025 by taking a highly defensive stance, completely avoiding expensive lower-rated credit and shifting capital into cash and longer-durati...
Language Signal
Tone analysis indicates low conviction language: FPA New Income Fund returned 1.76% in Q3 2025 by taking a highly defensive stance, completely avoiding expensive lower-rated credit and shifting capital into cash and longer-durati...
Perceived Risk
Perceived risk level is evaluated as high conviction. FPA New Income Fund returned 1.76% in Q3 2025 by taking a highly defensive stance, completely avoiding expensive lower-rated credit and shifting capital into cash and longer-durati...
Opportunity Density
Opportunity density index indicates low conviction actionable entry points. FPA New Income Fund returned 1.76% in Q3 2025 by taking a highly defensive stance, completely avoiding expensive lower-rated credit and shifting capital into cash and longer-durati...
Time Horizon
Investment time horizon reflects a above average conviction orientation. FPA New Income Fund returned 1.76% in Q3 2025 by taking a highly defensive stance, completely avoiding expensive lower-rated credit and shifting capital into cash and longer-durati...
