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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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"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."
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.
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