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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Brandes Core Plus Fixed Income Fund 2026 Q3 Investor Letter | Buyside Digest

Back to Fund Profile (Brandes Core Plus Fixed Income Fund)

Primary Source Intelligence • Q3 2026 Letter Analysis

Brandes Core Plus Fixed Income Fund Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, Brandes Core Plus Fixed Income Fund. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

QTD-3.01%

YTD-2.01%

Annualized+2.9%

Positioning StanceCAUTIOUS

GeographyUS

Digest Analysis

Quick Take

"Defensively positioned with duration 6% shorter than benchmark and high Treasury reserves, selectively adding project finance credit while waiting for tight corporate spreads to widen."

Executive Summary

During the third quarter of 2026, the Brandes Core Plus Fixed Income Fund declined -3.01% net of fees (Class I Shares), outperforming its benchmark, the Bloomberg U.S. Aggregate Bond Index, which fell -3.51%. Year-to-date, the Fund delivered a -2.01% return net of fees, outpacing the benchmark by 90 basis points. Relative outperformance was driven by an underweight position in underperforming agency mortgage-backed securities, favorable corporate credit selection, and term structure positioning, maintaining portfolio duration at approximately 94% of the benchmark (6% shorter) while holding 52.74% of assets in U.S. Treasuries. The fixed income environment was characterized by a severe bond market rout as benchmark Treasury yields jumped to multi-decade highs. Macro headwinds included persistent inflation above central bank targets, substantial federal fiscal deficits, massive corporate capital borrowing to finance artificial intelligence infrastructure, and policy tightening under Federal Reserve Chairman Kevin Warsh. The manager contends that higher yields reflect a healthy normalization following fifteen years of central-bank-suppressed rates rather than an aberration. Portfolio activity remained measured given tight credit spreads. The strategy initiated new debt holdings in Amazon, Oracle, and Sopaipilla Investor LLC—a project finance data center bond supported by Meta credit guarantees—while tendering out of Baxter International and seeing Ford Motor Credit mature. Top corporate positive contributors included Gray Media, Sabre Global, and Organon, partially offset by detractions from US Bank and American National Group.

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Institutional Meta Strategy

Meta Strategy Gauges

Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.

Signal Matrix

Market Conviction

65%

CautiousHigh

Moderate (65%)

The manager maintains a targeted, disciplined strategy with 52.74% concentrated in U.S. Treasuries and sizable specific credits such as Organon and Sopaipilla data center debt. Conviction is moderated by a defensive posture that intentionally avoids aggressive credit risk due to rich market valuations.

Growth Outlook

45%

BearishBullish

Neutral (45%)

The outlook is balanced to cautious; while absolute yields have restored a healthy income buffer, corporate and mortgage spreads remain uncomfortably tight and vulnerable to repricing.

Risk Appetite

30%

DefensiveAggressive

Defensive (30%)

Risk appetite is restrained, evidenced by managing fund duration at 94% of the benchmark, underweighting agency MBS, and maintaining more than half the portfolio in Treasuries.

Capital Deployment

40%

De-riskingDeploying

Net Neutral (40%)

Capital deployment was modest as new bond purchases in Amazon, Oracle, and Sopaipilla were counterbalanced by an exit in Baxter International and the maturity of Ford Motor Credit paper.

Forward Guidance

50%

CautiousExpansionary

Neutral (50%)

Guidance is focused on patience and preserving dry powder, intending to redeploy Treasury reserves into corporate credit only after market volatility causes spreads to widen attractively.

Language Signal

40%

BearishBullish

Balanced (40%)

Language skews cautious with references to bond market routs, hot-mess fiscal situations, and expensive spreads, partially balanced by positive commentary on attractive all-in yields.

Perceived Risk

75%

Low RiskElevated

Elevated Risk (75%)

Perceived environment risk is elevated due to persistent above-target inflation, federal deficit spending, aggressive Fed rate hikes, and corporate supply indigestion from AI infrastructure funding.

Opportunity Density

35%

ScarceAbundant

Selective (35%)

Opportunity density is constrained because corporate bonds are not cheap and spreads hover at decades-tight levels, forcing the team to be highly selective in new issues like Amazon and Meta project debt.

Time Horizon

70%

Short-TermLong-Term

Decade+ (70%)

The manager emphasizes full multi-year interest rate cycles by benchmarking current conditions against 15-year pre-GFC historical averages and participating in 2048 project debt maturities.