VIT Flexible Bond Portfolio

25 Years of Fundamental Fixed Income Investing
NAV As of 08/16/19 $13.07

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Fund Facts

Details Yields Morningstar (As of 07/31/19)
09/13/93 Inception Date
$594.70M Total Net Assets (As of 07/31/19)
GROSS 0.86%
NET 0.86%
Annual Expense Ratio
(As of fiscal year end 12/31/18)
2.86% Distribution Yield at NAV
(As of 06/30/19)
30 Day SEC Yield (As of 07/31/19)
With Waivers 2.32%
Without Waivers 2.07%
Semiannually Distribution Frequency
Performance (As of 08/16/19)
-0.08% 1 Day Return %
8.64% YTD Return
Category
Intermediate Core-Plus Bond
HIGH LIMITED
HIGH MODERATE
HIGH EXTENSIVE
MEDIUM LIMITED
MEDIUM MODERATE
MEDIUM EXTENSIVE
LOW LIMITED
LOW MODERATE
LOW EXTENSIVE
Fixed Income Style Box *
Important Morningstar Information

Overview

Client Commitment

This dynamic core bond portfolio leverages a bottom-up, fundamentally driven investment process designed to generate risk-adjusted outperformance and capital preservation. Throughout its 25 year history, the Portfolio has utilized an active and flexible approach to manage across a variety of market and rate cycles.

Why Invest in the Portfolio

    Dynamic Core Bond Holding

  1. By emphasizing risk-adjusted returns and capital preservation, the portfolio can serve as a foundation for a fixed income portfolio. The strategy uses a bottom-up, fundamentally driven investment process that seeks to identify the best opportunities across fixed income sectors, including up to 35% high-yield.
  2. Integrated Research

  3. Partnership and fluid communication between fixed income and equity analysts promote idea generation. Credit research emphasizes free cash flow generation, quality of management and security valuation.
  4. Sophisticated Risk Management

  5. Our proprietary fixed income portfolio and risk-management system, Quantum Global, is integrated into the investment process at each step. We identify and measure the sources of risk in the portfolio at multiple levels to confirm that the portfolio is positioned as intended.

Featured Insights

Performance

RETURNS

(As of 06/30/2019)
(As of 07/31/2019)
Inception: Sep 13, 1993 3M YTD 1YR 3YR 5YR 10YR Since Inception
VIT Flexible Bond Portfolio – SS Shares 2.95% 6.14% 6.73% 1.99% 2.16% 4.43% 5.93%
Bloomberg Barclays U.S. Aggregate Bond Index 3.08% 6.11% 7.87% 2.31% 2.95% 3.90% 5.15%
Inception: Sep 13, 1993 3M YTD 1YR 3YR 5YR 10YR Since Inception
VIT Flexible Bond Portfolio – SS Shares 3.35% 6.56% 7.06% 1.89% 2.34% 4.17% 5.93%
Bloomberg Barclays U.S. Aggregate Bond Index 3.28% 6.35% 8.08% 2.17% 3.05% 3.75% 5.14%
Returns quoted are past performance and do not guarantee future results; current performance may be lower or higher. Investment returns and principal value will vary; there may be a gain or loss when shares are sold.
View Fees and Expenses
Performance for Service Shares that includes periods prior to 12/31/99 reflects the performance of Institutional Shares, adjusted to reflect the expenses of Service Shares.

MORNINGSTAR PERCENTILE

(As of 06/30/2019)
(As of 07/31/2019)
1 YR 3 YR 5 YR 10 YR SINCE INCEPTION
Percentile Ranking (%) 78 92 87 70 11
Intermediate Core-Plus Bond Category
Rank/Count
498/631 537/589 454/533 339/473 13/196
1 YR 3 YR 5 YR 10 YR SINCE INCEPTION
Percentile Ranking (%) 72 89 85 70 11
Intermediate Core-Plus Bond Category
Rank/Count
475/639 527/595 448/541 343/477 12/199

CALENDAR YEAR PERFORMANCE

GROWTH OF A $10,000 HYPOTHETICAL INVESTMENT

Source: Morningstar, Inc.
This graph compares fund performance to that of the fund’s Morningstar category average and benchmark(s).

RETURNS-BASED STATISTICS

(As of 07/31/19 INST SHARES)

RISK / REWARD
VS. BLOOMBERG BARCLAYS U.S. AGGREGATE BOND INDEX

3 YEAR 5 YEAR
Information Ratio -0.06 -0.60
Alpha 0.22 -0.09
Tracking Error 0.76 0.75
Beta 0.88 0.88
R-Squared (%) 94.12 93.75

UP AND DOWN MARKET CAPTURE (%)
VS. BLOOMBERG BARCLAYS U.S. AGGREGATE BOND INDEX

3 YEAR 5 YEAR
Up Capture Ratio 89.02 86.92
Down Capture Ratio 82.96 89.45

STANDARD DEVIATION

3 YEAR 5 YEAR
VIT Flexible Bond Portfolio 2.73 2.67
Bloomberg Barclays U.S. Aggregate Bond Index 3.02 2.93

SHARPE RATIO

3 YEAR 5 YEAR
VIT Flexible Bond Portfolio 0.26 0.64
Bloomberg Barclays U.S. Aggregate Bond Index 0.25 0.74

ANNUAL FEES & EXPENSES

(As of Fiscal Year End, 12/31/18)

SERVICE SHARES
Management Fees 0.50%
12b-1 Fees 0.25%
Other Expenses 0.11%
Total Gross Expenses 0.86%
Waivers 0.00%
Total Net Expenses 0.86%
Net expense ratios reflect the expense waiver, if any, contractually agreed to through 5/1/20.

Characteristics

Index represents the Bloomberg Barclays U.S. Aggregate Bond Index.

TOP HOLDINGS

(As of 07/31/2019)

% of Portfolio
United States Treasury Note/Bond, 2.88%, 05/15/49 3.12
United States Treasury Note/Bond, 2.00%, 05/31/24 2.33
United States Treasury Note/Bond, 2.62%, 02/15/29 1.97
United States Treasury Note/Bond, 2.38%, 05/15/29 1.89
United States Treasury Note/Bond, 2.38%, 02/29/24 1.46
United States Treasury Note/Bond, 3.00%, 02/15/49 1.29
Ginnie Mae, 5.00%, 08/21/19 0.90
United States Treasury Note/Bond, 1.75%, 06/30/24 0.85
Ginnie Mae, 4.50%, 08/21/19 0.84
United States Treasury Note/Bond, 3.00%, 02/15/48 0.82
TOTAL 15.47

PORTFOLIO CHARACTERISTICS

(As of 07/31/19)

PORTFOLIO INDEX
Number of Holdings
Debt Issues
471
10590
Portfolio Turnover Rate
(1-year trailing)
194.16%
-
Weighted Average Maturity
(years)
9.16
12.88
Effective Duration
(years)
6.09
5.66

DEVELOPED VS. EMERGING MARKET

(As of 07/31/19)

% OF PORTFOLIO % OF INDEX
U.S. 97.82 91.76
Non-U.S. Developed 1.82 5.25
Non-U.S. Emerging 0.08 1.61
Cash & Equivalents 0.28 -

CREDIT QUALITY OF FIXED INCOME HOLDINGS

(As of 07/31/19)

% OF PORTFOLIO % OF INDEX
Aaa 21.49 72.04
Aa 28.23 3.45
A 6.80 10.73
Baa 32.40 13.78
Ba 9.44 -
B 1.36 -
Bond credit quality ratings provided by Barclays and reflect the middle rating received from Moody's, Standard & Poor's and Fitch, where all three agencies have provided a rating. If only two agencies rate a security, the lowest rating is used. If only one agency rates a security, that rating is used. Ratings are measured on a scale that ranges from Aaa (highest) to D (lowest).

SECTOR ALLOCATION

(As of 07/31/19)

% OF PORTFOLIO % OF INDEX
Credit-Investment Grade 35.23 25.12
MBS 27.57 26.78
Treasuries 19.13 39.81
Credit-High Yield 10.35 -
ABS 3.28 0.46
CMO 2.78 -
CMBS 1.16 2.00
Bank Loans 0.22 -
Cash & Equivalents 0.28 -

MATURITY BREAKDOWN OF FIXED INCOME HOLDINGS

(As of 07/31/19)

% OF PORTFOLIO % OF INDEX
< 1 yr 1.97 0.81
1 - 3 yrs 8.99 20.91
3 - 5 yrs 22.56 14.80
5 - 7 yrs 25.27 10.29
7 - 10 yrs 24.94 10.26
10 - 20 yrs 2.53 7.75
> 20 yrs 13.09 35.18
N/A 0.37 -

REGIONAL ALLOCATION

(As of 07/31/19)

% OF PORTFOLIO % OF INDEX
North America 98.33 92.93
Europe 1.23 3.31
Asia/Pacific Ex Japan 0.08 0.74
Africa/Mideast 0.08 0.05
Cash & Equivalents 0.28 -

Commentary & Literature

2Q19 Portfolio Commentary Highlights

  • As the Fed’s pivot to a more accommodative stance evolved into potential rate cuts in 2019, both Treasuries and corporate credit performed well in the second quarter.
  • The Fund captured a significant portion of the period’s upside, but ultimately underperformed its benchmark.
  • Macro uncertainties, including slower global growth and trade tensions, will likely lead to more accommodative monetary policy from the Fed and other developed world central banks.

Read The Full Commentary