Eagle ESG-Focused Corporate Bond
Overview

The Eagle ESG-Focused Corporate Bond portfolio relies on the expertise of a professional, experienced fixed income team to seek corporate bond issuers that make positive environmental, social, and governance contributions. The portfolio objectives are stable income and total returns. With a combined 100-plus years of experience, the portfolio managers and analysts provide a wealth of bond expertise and have a track record of successfully managing fixed income through all market environments.

Investment Process

• Top-down look at interest-rate trends and economic data
• In-depth bottom-up credit research
• Seek to identify bonds underappreciated by the market with stable-to-improving credit profiles
• Construct well-diversified portfolios that also exhibit positive environmental, social, and governance attributes

ESG Integration

• Integrated at every level of investment process
• Qualitative and quantitative evaluation approach
• Evaluates the credit obligor as a whole for sustainable business practices rather than focus on a bond’s “use of proceeds”
• No industry excluded as a whole; seek best in class companies using material factors for each industry

Sell discipline

• Both ESG analysis and fundamental credit research factor into overall assessment before a sell decision

Eagle ESG-Focused Municipal Bond
Overview

The Eagle ESG-Focused Municipal Bond portfolio relies on the expertise of a professional, experienced fixed-income team to seek municipal bond issuers that make positive environmental, social, and governance contributions. The portfolio objectives are stable income and total returns. With a combined 100-plus years of experience, the portfolio managers and analysts provide a wealth of bond expertise and have a track record of successfully managing fixed income through all market environments.

Investment Process

• Analyze macroeconomic environment, supply and demand factors, credit conditions, yield curve and interest rate environment
• Seek opportunities that are not yet recognized by the market
• Utilize proprietary credit research to identify issuers with stable-to-improving credit profiles

ESG Integration

• Integrated at every level of investment process
• Because of the limited universe of data from municipalities and external sources, we implement a bottom-up analysis to find obligors who are progressing in line with our objectives
• Evaluates the credit obligor as a whole for sustainable business practices rather than focus on a bond’s “use of proceeds”
• No sectors excluded as a whole; seek high quality issuers if we determine the municipality is implementing positive business decisions in a sustainable manner
• Sector-specific ESG rating models to evaluate municipalities

Sell discipline

The portfolio management team maintains the right to hold positions that have dropped out of the ESG threshold for a maximum of 12 months as we engage with management to determine if they are attempting to improve the score.

Eagle ESG-Focused Tactical Fixed Income
Overview

The Eagle ESG-Focused Tactical Fixed Income portfolio relies on the expertise of a professional, experienced fixed income team to seek corporate and municipal bond issuers that make positive environmental, social, and governance contributions. The portfolio objectives are stable income and total returns. With a combined 100-plus years of experience, the portfolio managers and analysts provide a wealth of bond expertise and have a track record of successfully managing bond portfolios through all market environments.

Investment Process

• Evaluate taxable and tax-free markets based on tax-equivalent yield and the current municipal yield to U.S. Treasury yield ratio
• Higher municipal bond tax-equivalent yields and municipal yield to U.S. Treasury yield ratios call for higher allocation to tax-free bonds
• Allocation of taxable and tax-free bonds based on relative value across respective sectors
• Analyze various sectors on supply/demand basis
• Evaluate yield curve of the tax-free market in relation to yield curve of the taxable market as well as within each of the markets. Extend when yield curve is steeper and shorten when yield curve is flat
• Determine relative value on an issuer basis
• Normal cash level: less than 10 percent
• Diversification through sectors, issuers, credit ratings, and bond structures

ESG Integration

• Integrated at every level of investment process
• Qualitative and quantitative evaluation approach
• Evaluates the credit obligor as a whole for sustainable business practices rather than focus on a bond’s “use of proceeds”
• No sectors excluded as a whole; seek high quality issuers using material factors for each industry
• Because of the limited universe of data from municipalities and external sources, we implement a bottom-up analysis to find obligors who are progressing in line with our objectives
• Sector-specific ESG rating models to evaluate municipalities

Sell discipline

• Both ESG analysis and fundamental credit research factor into overall assessment before a sell decision
• The portfolio management team maintains the right to hold positions that have dropped out of the ESG threshold for a maximum of 12 months as we engage with management to determine if they are attempting to improve the score

Portfolio Characteristics (as of February 28, 2025)

Risk Information
Risks associated with Fixed Income investing: many investors consider bonds to be “risk free” investment vehicles. Historically, bonds have indeed provided less volatility and less risk of loss of capital than has equity investing. However, there are many factors that may affect the risk and return profile of a fixed-income portfolio. The two most prominent factors are interest-rate movements and the creditworthiness of the bond issuer. Bonds issued by the U.S. government have significantly less risk of default than those issued by corporations and municipalities (see footnotes 3 and 5 below for a discussion of the risk associated with high-yield bonds and convertible securities). However, the overall return on government bonds tends to be less than these other types of fixed-income securities. Investors should pay careful attention to the types of fixed-income securities that comprise their portfolio, and remember that, as with all investments, there is the risk of the loss of capital.

The investment strategy will include only holdings deemed consistent with the applicable Environmental Social Governance (ESG) guidelines. As a result, the universe of investments available to the strategy will be more limited than strategies not applying such guidelines, which may cause it to perform differently than similar strategies that do not have such a policy.

Not every investment opportunity will meet all of the stringent investment criteria mentioned to the same degree. Trade-offs must be made, which is where experience and judgment play a key role. Accounts are invested at the discretion of the portfolio manager and may take up to 60 days to become fully invested.

Be sure to consider your financial needs, goals, and risk tolerance before making any investment decisions. Eagle does not provide legal, tax, or accounting advice. Any statement contained in this communication concerning U.S. tax matters was not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code. Before making any investment decisions, you should obtain your own independent tax and legal advice based on your particular circumstances.

BLOOMBERG, BLOOMBERG INDICES and Bloomberg Fixed Income Indices (the “Indices”) are trademarks or service marks of Bloomberg Finance L.P. Bloomberg Finance L.P. and its affiliates, including Bloomberg Index Services Limited, the administrator of the Indices (collectively, “Bloomberg”) or Bloomberg's licensors own all proprietary rights in the Indices. Bloomberg does not guarantee the timeliness, accuracy or completeness of any data or information relating to the Indices.

Definitions
Duration - is a measure of the average life of a bond, weighting each repayment by the time until it will be made and reflecting the fact that money flows in the near future are more valuable than the same money flows at a later date. Duration indicates how changes in interest rates will affect the price of a bond (or bond portfolio). The longer the duration of a bond, the greater the extent to which its price is affected by interest rate changes. As such, duration is used as a measure of risk for bond portfolios.

Average duration - is represented by effective duration for our taxable portfolios because it takes into consideration the embedded options and fluctuations in cash flows for structured products like mortgage-backed securities and asset-backed securities; Modified adjusted duration is used as average duration in our tax-advantaged portfolios since the calculation takes into account call options which are common in the municipal market.

Maturity - The date on which a loan or bond comes due and is to be paid off.

Yield-to-Worst - The lowest possible yield that can be received on a bond assuming no default. Yield-to-worst is calculated on all possible call dates and makes worst-case scenario assumptions on the issue by calculating the returns that would be received if provisions, including prepayment, call, or sinking fund, are used by the issuer. The yield-to-worst will be the lowest of yield-to-maturity or yield-to-call (if the bond has prepayment provisions); yield-to-worst may be the same as yield-to-maturity, but never higher. 

Index Definitions
The benchmark for Eagle ESG Focused Tactical Fixed Income accounts is a blend of 50 percent Bloomberg 10 Year Municipal Bond Index and 50 percent Bloomberg Intermediate Corp Index. The Bloomberg 10 Year Municipal Bond Index is the 10 Year (8-12) component of the Municipal Bond index. The Bloomberg Municipal Bond Index is a rules-based, market-value-weighted index engineered for the long-term tax-exempt bond market. The Bloomberg Intermediate Corp Index consists of publicly issued U.S. corporate and specified foreign debentures and secured notes that meet the specified maturity, liquidity, and quality requirements. To qualify, bonds must be SEC-registered. Indices are unmanaged and one cannot invest directly in the index.