N-CSR 1 d461762dncsr.htm TIAA-CREF FUNDS ANNUAL REPORT TIAA-CREF Funds Annual Report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT

INVESTMENT COMPANIES

Investment Company Act file number File No. 811-09301

TIAA-CREF FUNDS

(Exact Name of Registrant as specified in charter)

730 Third Avenue, New York, New York 10017-3206

(Address of Principal Executive Offices) (Zip code)

Diana R. Gonzalez, Esq.

TIAA-CREF Funds

8500 Andrew Carnegie Blvd.

Charlotte, North Carolina 28262-8500

(Name and address of agent for service)

Registrant’s telephone number, including area code: 704-595-1000

Date of fiscal year end: March 31

Date of reporting period: March 31, 2023


Item 1. Reports to Stockholders.


Fixed-Income
Funds
TIAA-CREF
Annual
Report
TIAA-CREF
Funds
March
31,
2023
Fund
name
Institutional
Class
Advisor
Class
Premier
Class
Retirement
Class
Retail
Class
Class
W
8.1
Bond
Index
Fund
TBIIX
TBIAX
TBIPX
TBIRX
TBILX
TBIWX
8.2
Core
Bond
Fund
TIBDX
TIBHX
TIDPX
TIDRX
TIORX
TBBWX
8.3
Core
Impact
Bond
Fund
TSBIX
TSBHX
TSBPX
TSBBX
TSBRX
8.4
Core
Plus
Bond
Fund
TIBFX
TCBHX
TBPPX
TCBRX
TCBPX
TCBWX
8.5
5–15
Year
Laddered
Tax-Exempt
Bond
Fund
TITIX
TIXHX
TIXRX
8.6
Green
Bond
Fund
TGRNX
TGRKX
TGRLX
TGRMX
TGROX
8.7
High-Yield
Fund
TIHYX
TIHHX
TIHPX
TIHRX
TIYRX
TIHWX
8.8
Inflation-Linked
Bond
Fund
TIILX
TIIHX
TIKPX
TIKRX
TCILX
TIIWX
8.9
Short
Duration
Impact
Bond
Fund
TSDJX
TSDHX
TSDFX
TSDDX
TSDBX
9.01
Short-Term
Bond
Fund
TISIX
TCTHX
TSTPX
TISRX
TCTRX
TCTWX
9.1
Short-Term
Bond
Index
Fund
TNSHX
TTBHX
TPSHX
TESHX
TRSHX
TTBWX
9.2
Money
Market
Fund
TCIXX
TMHXX
TPPXX
TIEXX
TIRXX
Table
of
Contents
Letter
to
Investors
3
Market
Monitor
5
About
the
Funds’
Benchmarks
6
Portfolio
Managers’
Comments
7
Fund
Performance
16
Expense
Examples
40
Report
of
Independent
Registered
Public
Accounting
Firm
45
Portfolios
of
Investments
46
Statement
of
Assets
and
Liabilities
368
Statement
of
Operations
372
Statement
of
Changes
in
Net
Assets
374
Financial
Highlights
378
Notes
to
Financial
Statements
402
Important
Tax
Information
420
Additional
Fund
Information
422
Trustees
and
Officers
423
Approval
of
Investment
Management
Agreement
426
Liquidity
Risk
Management
Program
434
How
to
Reach
Us
Inside
back
cover
3
Letter
to
Investors
Brad
Finkle
For
the
twelve
months
ended
March
31,
2023,
the
U.S.
bond
market
produced
mixed
results.
The
economy
stumbled
early,
but
it
quickly
recovered
despite
persistent
inflation
and
rising
interest
rates.
For
the
period,
two
major
fixed-income
sectors
recorded
gains,
while
others
lost
ground.
Four
of
the
eleven
TIAA-CREF
Fixed-Income
Funds
advanced,
and
the
Money
Market
Fund
posted
a
gain.
The
broad
U.S.
bond
market,
as
measured
by
the
Bloomberg
U.S.
Aggregate
Bond
Index,
returned
−4.8%
for
the
period.
Institutional
Class
returns
for
three
of
the
eleven
fixed-income
funds
outperformed
the
returns
of
their
respective
benchmarks.
Please
see
page
6
for
benchmark
definitions.
The
Money
Market
Fund
outperformed
the
iMoneyNet
Money
Fund
Averages™—All
Government.
Three
of
the
eight
remaining
funds—the
Core
Bond
Fund,
the
Inflation-Linked
Bond
Fund
and
the
Short-Term
Bond
Index
Fund—just
slightly
trailed
their
benchmarks.
Bond
performance
was
mixed
while
economy
rebounded
The
U.S.
economy
contracted
early
in
the
period
but
soon
began
to
grow
again,
in
large
part
due
to
an
exceptionally
strong
labor
market
and
solid
consumer
spending.
The
unemployment
rate
remained
at
near
50-year
lows.
Rising
prices
continued
to
be
problematic
for
the
economy.
However,
despite
continuing
to
rise,
the
annualized
rate
of
inflation
slowed
over
the
twelve
months.
The
Federal
Reserve
responded
aggressively
to
the
inflation
threat
by
raising
the
federal
funds
target
rate
multiple
times
during
the
period,
to
4.75%–5.00%.
Policymakers
indicated
that
further
action
was
possible.
Oil
prices
were
volatile
but
ended
the
period
lower.
Though
the
overall
fixed-income
market
produced
mixed
results,
each
of
its
major
sectors
lost
ground
during
the
first
half
of
the
period
before
advancing
in
the
final
six
months.
The
same
pattern
applied
to
the
Bloomberg
U.S.
Aggregate
Bond
Index.
For
the
entire
twelve-month
period,
municipal
bonds
produced
the
strongest
gain,
while
shorter-term
bonds
also
generated
a
positive
return.
U.S.
inflation-
protected
securities
and
high-yield
bonds
both
declined.
Four
TIAA-CREF
Fixed-Income
Funds
gained
in
an
uneven
period
Four
of
the
TIAA-CREF
Fixed-Income
Funds
registered
positive
results
for
the
twelve-
month
period.
Performance
for
the
Institutional
Class
ranged
from
−5.5%
for
the
Core
Impact
Bond
Fund
to
0.7%
for
the
Short-Term
Bond
Fund.
In
a
market
that
generally
favored
shorter-term
securities,
the
Money
Market
Fund
returned
2.6%,
beating
the
2.4%
return
of
the
iMoneyNet
Money
Fund
Averages™—All
Government.
The
Short-Term
Bond
Fund
rose
0.7%,
and
the
Short
Duration
Impact
Bond
Fund
advanced
0.4%,
both
outpacing
their
shared
benchmark,
the
Bloomberg
1–3
Year
Government/Credit
Bond
Index.
The
Short-Term
Bond
Index
Fund
modestly
trailed
the
same
benchmark
with
a
gain
of
0.2%.
The
5–15
Year
Laddered
Tax-Exempt
Bond
Fund
advanced
0.1%
but
lagged
the
Bloomberg
10-Year
Municipal
Bond
Index.
The
High-Yield
Fund
returned
−2.9%
but
outperformed
its
benchmark,
the
ICE
BofA
BB-B
U.S.
Cash
Pay
High
Yield
Constrained
Index.
The
Inflation-Linked
Bond
Fund
returned
−3.0%,
slightly
lagging
the
Bloomberg
U.S.
Treasury
Inflation
Protected
Securities
(TIPS)
1–10
Year
Index.
The
Green
Bond
Fund
returned
−4.7%
and
trailed
its
benchmark,
the
Bloomberg
MSCI
U.S.
Green
Bond
Index.
The
Core
Bond
Fund
and
the
Bond
Index
Fund
each
returned
−4.9%
and
lagged
their
shared
benchmark,
the
Bloomberg
U.S.
Aggregate
Bond
Index.
The
Core
Plus
Bond
Fund
returned
−5.0%,
and
the
Core
Impact
Bond
Fund
returned
−5.5%—both
trailing
the
same
benchmark.
A
detailed
overview
of
the
fixed-income
markets
during
the
period
appears
in
our
Market
Monitor
on
page
5.
A
discussion
of
each
fund
and
its
relative
performance
begins
on
page
7.
Letter
to
Investors
4
Keeping
long-term
goals
in
mind
Investing
for
the
future
is
a
long
journey,
with
many
twists
and
turns
along
the
way.
Financial
markets
are
affected
by
risks
and
opportunities
that
change
with
time,
and
sometimes
markets
respond
to
short-term
events
in
an
unpredictable
manner.
Today,
investors
are
focused
on
inflation,
rising
interest
rates
and
pressure
in
the
banking
industry.
In
the
future,
no
doubt
some
other
set
of
circumstances
will
take
center
stage.
Some
may
feel
a
temptation
to
react
to
these
shifts
as
they
develop.
But
it
has
long
been
our
opinion
that
investors
who
stick
with
a
thoughtful,
long-term
financial
plan
are
best
positioned
to
achieve
their
investment
goals.
We
believe
that
professionally
managed,
well-diversified
portfolios,
including
fixed-income
mutual
funds,
may
help
investors
do
just
that.
Of
course,
diversification
cannot
guarantee
against
market
losses.
Please
visit
TIAA.org
for
more
information
on
asset
class
performance.
If
you
have
further
questions
or
need
assistance
with
your
TIAA-CREF
fixed-income
portfolio,
we
suggest
you
contact
your
financial
advisor
or
call
a
TIAA
financial
consultant
at
800-842-2252.
We
would
be
happy
to
help
you.
Brad
Finkle
Principal
Executive
Officer
and
President
of
the
TIAA-CREF
Funds
and
TIAA-CREF
Life
Funds
Market
Monitor
5
Bonds
produced
mixed
returns
amid
rising
interest
rates,
inflation
concerns
Fixed-income
markets
generated
mixed
results
for
the
twelve-month
period
as
the
economy
got
off
to
a
slow
start
but
later
regained
its
footing.
The
uncertainty
in
both
the
markets
and
economy
stemmed
from
ongoing
concerns
over
inflation,
rising
interest
rates
and
the
possibility
of
a
recession.
While
price
increases
remained
worrisome
throughout
the
period,
the
rate
of
inflation
slowed.
The
Federal
Reserve
responded
to
inflation
concerns
by
raising
interest
rates
eight
times
over
the
twelve
months.
Meanwhile,
the
economy
generally
benefited
from
continued
strength
in
the
labor
market
and
solid
consumer
spending
levels.
Investment-grade
fixed-rate
bonds,
as
represented
by
the
Bloomberg
U.S.
Aggregate
Bond
Index,
returned
−4.8%
for
the
twelve-month
period.
Among
major
fixed-income
market
segments,
municipal
bonds,
as
measured
by
the
Bloomberg
10–Year
Municipal
Bond
Index,
gained
2.4%
for
the
period.
Short-term
bonds,
as
represented
by
the
Bloomberg
U.S.
1–3
Year
Government/Credit
Bond
Index,
advanced
0.3%.
The
Bloomberg
U.S.
Treasury
Inflation
Protected
Securities
(TIPS)
1–10
Year
Index
returned
−2.9%,
while
U.S.
high-yield
bonds,
as
measured
by
the
ICE
BofA
BB-B
U.S.
Cash
Pay
High
Yield
Constrained
Index,
returned
−3.0%.
All
major
segments
of
the
bond
market
declined
in
the
first
half
of
the
period
but
gained
ground
during
the
second
half.
Economy
shifted
to
growth
after
slow
start
Real
gross
domestic
product,
which
measures
the
value
of
all
goods
and
services
produced
in
the
United
States,
contracted
at
an
annualized
rate
of
0.6%
during
the
second
quarter
of
2022.
But
GDP
soon
shifted
to
a
growth
pattern,
expanding
by
3.2%
in
the
third
quarter
and
2.6%
during
the
final
three
months
of
2022.
The
U.S.
unemployment
rate
declined
slightly
from
3.6%
in
April
2022
to
3.5%
in
March
2023,
hovering
at
historically
low
levels.
The
economy
added
more
than
four
million
new
jobs
over
the
twelve
months.
Core
inflation,
which
includes
all
items
except
food
and
energy,
rose
5.6%
for
the
twelve
months
ended
March
31,
2023.
The
period
began
with
an
annualized
inflation
rate
of
6.2%.
Oil
prices,
influenced
by
the
war
in
Ukraine
and
other
supply
constraints,
were
volatile
but
ended
lower.
The
price
of
West
Texas
Intermediate
crude
oil
began
the
period
at
$99
per
barrel,
peaked
at
nearly
$122
in
June
of
2022,
then
fell
just
below
$76
on
March
31,
2023.
The
broad
U.S.
stock
market,
as
measured
by
the
Russell
3000®
Index,
returned
−8.6%
for
the
twelve
months.
Stock
prices
declined
sharply
through
September
2022
but
recovered
over
the
final
six
months
of
the
period.
Yields
on
U.S.
Treasuries
of
all
maturities
rose
during
the
period,
with
increases
most
pronounced
among
shorter
maturities.
Fed
raised
rates
eight
times
The
Fed
acted
decisively
to
address
inflation
risks,
raising
the
federal
funds
target
rate
eight
times
during
the
period.
Those
moves
increased
the
key
short-term
interest-rate
measure
to
4.75%–5.00%,
and
policymakers
indicated
that
further
increases
may
be
necessary
to
return
inflation
rates
to
long-term
targets.
The
Fed
also
said
it
intended
to
continue
reducing
its
holdings
of
bonds
and
other
assets
purchased
previously
to
boost
the
economy.
Major
foreign
central
banks
also
raised
interest
rates
to
address
global
inflationary
pressure.
The
European
Central
Bank
increased
its
suite
of
benchmark
interest
rates
from
near-zero
levels
to
3.00%–3.75%
in
a
series
of
actions.
The
Bank
of
England
raised
its
benchmark
interest
rate
several
times
during
the
period,
increasing
the
rate
from
0.75%
to
4.25%.
Bond
sector
returns
varied
Performance
for
the
twelve
months
ended
March
31,
2023
Source:
Municipals:
Bloomberg
10-Year
Municipal
Bond
Index;
Short
term:
Bloomberg
U.S.
1–3
Year
Government/Credit
Index;
Inflation
protected:
Bloomberg
U.S.
TIPS
1–10
Years
Index;
Corporate
high
yield:
ICE
BofA
BB-B
U.S.
Cash
Pay
High
Yield
Constrained
Index;
Investment
grade:
Bloomberg
U.S.
Aggregate
Bond
Index.
As
of
March
31,
2023.
About
the
Funds’
Benchmarks
6
Bloomberg
U.S.
Aggregate
Bond
Index:
An
index
designed
to
measure
the
performance
of
the
USD-denominated,
fixed-rate,
U.S.
investment
grade
taxable
bond
market.
The
index
includes
Treasuries,
government-related
and
corporate
securities,
mortgage-backed
securities
(MBS),
asset-backed
securities
(ABS)
and
commercial
mortgage-backed
securities
(CMBS).
Index
returns
assume
reinvestment
of
distributions,
but
do
not
reflect
any
applicable
sales
charges
or
management
fees.
Bloomberg
U.S.
1–3
Year
Government/Credit
Bond
Index:
An
index
designed
to
measure
the
performance
of
U.S.
Treasury
and
agency
securities
and
corporate
bonds
with
1-
to
3-year
maturities.
ICE
BofA
BB-B
U.S.
Cash
Pay
High
Yield
Constrained
Index:
An
index
that
contains
all
securities
in
the
ICE
BofA
U.S.
Cash
Pay
High
Yield
Constrained
Index
that
are
rated
BB1
through
B3,
based
on
an
average
of
Moody’s,
S&P
and
Fitch,
but
caps
issuer
exposure
at
2%.
Index
returns
assume
reinvestment
of
distributions,
but
do
not
reflect
any
applicable
sales
charges
or
management
fees.
Bloomberg
10-Year
Municipal
Bond
Index:
An
index
designed
to
measure
the
performance
of
intermediate-
and
longer-term
tax-exempt
bonds.
Bonds
in
the
index
must
be
rated
investment
grade
(Baa3/BBB-
or
higher),
have
an
outstanding
par
value
of
at
least
$7
million
and
be
issued
as
part
of
a
transaction
of
at
least
$75
million.
Bloomberg
U.S.
Treasury
Inflation
Protected
Securities
(TIPS)
1–10
Year
Index:
An
index
designed
to
measure
the
performance
of
fixed-income
securities
with
maturities
between
1
and
10
years
that
are
adjusted
for
inflation,
as
measured
by
the
Consumer
Price
Index
for
All
Urban
Consumers
(CPI-U).
Bloomberg
MSCI
U.S.
Green
Bond
Index:
An
index
designed
to
measure
the
performance
of
USD-denominated
fixed
income
securities
issued
to
fund
projects
with
direct
environmental
benefits.
Index
returns
assume
reinvestment
of
distributions,
but
do
not
reflect
any
applicable
sales
charges
or
management
fees.
You
cannot
invest
directly
in
any
index.
Index
returns
do
not
include
a
deduction
for
fees
or
expenses.
For
additional
details
about
the
benchmark
indexes,
please
read
the
funds’
latest
prospectus.
Source:
Bloomberg
Index
Services
Limited.
BLOOMBERG®
is
a
trademark
and
service
mark
of
Bloomberg
Finance
L.P.
and
its
affiliates
(collectively,
“Bloomberg”).
Bloomberg
or
Bloomberg’s
licensors
own
all
proprietary
rights
in
the
Bloomberg
Indices.
Bloomberg
neither
approves
nor
endorses
this
material,
nor
guarantees
the
accuracy
or
completeness
of
any
information
herein,
nor
makes
any
warranty,
express
or
implied,
as
to
the
results
to
be
obtained
therefrom
and,
to
the
maximum
extent
allowed
by
law,
neither
shall
have
any
liability
or
responsibility
for
injury
or
damages
arising
in
connection
therewith.
Source:
ICE
Data
Indices,
LLC
(“ICE
DATA”),
is
used
with
permission.
ICE
DATA,
ITS
AFFILIATES
AND
THEIR
RESPECTIVE
THIRD
PARTY
SUPPLIERS
DISCLAIM
ANY
AND
ALL
WARRANTIES
AND
REPRESENTATIONS,
EXPRESS
AND/OR
IMPLIED,
INCLUDING
ANY
WARRANTIES
OF
MERCHANTABILITY
OR
FITNESS
FOR
A
PARTICULAR
PURPOSE
OR
USE,
INCLUDING
THE
INDICES,
INDEX
DATA
AND
ANY
DATA
INCLUDED
IN,
RELATED
TO,
OR
DERIVED
THEREFROM.
NEITHER
ICE
DATA,
ITS
AFFILIATES
NOR
THEIR
RESPECTIVE
THIRD
PARTY
PROVIDERS
SHALL
BE
SUBJECT
TO
ANY
DAMAGES
OR
LIABILITY
WITH
RESPECT
TO
THE
ADEQUACY,
ACCURACY,
TIMELINESS
OR
COMPLETENESS
OF
THE
INDICES
OR
THE
INDEX
DATA
OR
ANY
COMPONENT
THEREOF,
AND
THE
INDICES
AND
INDEX
DATA
AND
ALL
COMPONENTS
THEREOF
ARE
PROVIDED
ON
AN
“AS
IS”
BASIS
AND
YOUR
USE
IS
AT
YOUR
OWN
RISK.
ICE
DATA,
ITS
AFFILIATES
AND
THEIR
RESPECTIVE
THIRD
PARTY
SUPPLIERS
DO
NOT
SPONSOR,
ENDORSE,
OR
RECOMMEND
TIAA-CREF
FUNDS,
OR
ANY
OF
ITS
PRODUCTS
OR
SERVICES.
Portfolio
Managers’
Comments
7
Bond
Index
Fund
Performance
for
the
twelve
months
ended
March
31,
2023
The
Bond
Index
Fund returned
-4.91%
for
the
Institutional
Class,
compared
with
the
-4.78% return
of
its
benchmark,
the
Bloomberg
U.S.
Aggregate
Bond
Index.
The
performance
table
shows
returns
for
all
share
classes
of
the
Fund.
Economy
expanded
as
interest
rates
rose
The
U.S.
economy
expanded
in
2022,
despite
ongoing
concerns
regarding
inflation
and
rising
interest
rates.
Real
gross
domestic
product,
which
measures
the
value
of
all
goods
and
services
produced
in
the
United
States,
increased
at
an
annualized
rate
of
2.6%
during
the
fourth
quarter
of
last
year,
according
to
the
government’s
“third”
estimate.
The
unemployment
rate
remained
relatively
stable
and
settled
at
3.5%
in
March
2023.
Core
inflation,
which
measures
all
items
except
food
and
energy,
rose
5.6%
over
the
twelve
months
ended
March
2023.
Crude
oil
prices
were
volatile
but
declined
from
$99
to
$76
per
barrel
during
the
period.
The
Federal
Reserve
responded
to
the
economic
impact
of
higher
inflation
by
raising
the
federal
funds
target
rate
eight
times
during
the
twelve-month
period,
increasing
the
key
short-term
interest-rate
measure
to
4.75%–5.00%.
At
the
March
2023
meeting,
the
Fed
reiterated
that
policymakers
remained
“highly
attentive”
to
inflation
risks.
The
major
segments
of
the
fixed-income
market
posted
mixed
results
for
the
period,
dampened
by
a
rise
in
U.S.
Treasury
yields
across
all
maturities.
The
Bloomberg
U.S.
Aggregate
Bond
Index,
a
broad
measure
of
the
U.S.
investment-grade
fixed-
rate
bond
market,
declined
most.
High-yield
bonds
and
U.S.
Treasury
inflation-protected
securities
(TIPS)
recorded
smaller
setbacks.
Municipal
and
short-term
bonds
both
gained
ground.
Most
sectors
in
the
benchmark
declined
Most
sectors
in
the
Bloomberg
U.S.
Aggregate
Bond
Index
posted
negative
returns
for
the
twelve
months.
U.S.
Treasuries,
the
largest
sector
with
a
weighting
of
40.5%,
returned
−4.5%,
outperforming
the
index.
Mortgage-backed
securities
(MBS),
the
second-largest
sector
accounting
for
27.3%
of
the
index’s
total
market
capitalization
on
March
31,
2023,
returned
−5.0%.
Corporate
bonds—the
third-largest
sector
at
24.3%—experienced
a
more
sizeable
decline
of
−5.6%.
Among
smaller
sectors
in
the
benchmark,
asset-backed
securities
were
the
best-performing
sector
in
the
index,
advancing
0.4%,
followed
by
government
agency
securities,
which
returned
−1.6%,
and
commercial
mortgage-backed
securities
(CMBS),
which
returned
−3.9%.
Fund
underperformed
its
benchmark
The
Fund
trailed
its
benchmark
for
the
twelve-month
period.
The
Fund’s
return
includes
a
deduction
for
expenses,
while
the
benchmark’s
does
not.
The
Fund
seeks
to
maintain
the
overall
characteristics
of
its
benchmark.
The
Fund’s
managers
invest
in
the
same
sectors
that
are
included
in
the
benchmark
and
closely
match
the
benchmark’s
weightings
and
maturities.
During
the
period,
this
portfolio
had
sector
returns
that
were
similar
to
its
benchmark,
enabling
it
to
resemble
the
index’s
performance.
Throughout
the
period,
the
Fund’s
managers
kept
the
Fund’s
duration—a
measure
of
its
sensitivity
to
interest-rate
changes—close
to
that
of
its
benchmark.
This
strategy
helped
the
Fund’s
risk
and
reward
characteristics
to
more
closely
resemble
those
of
its
benchmark.
Core
Bond
Fund
Performance
for
the
twelve
months
ended
March
31,
2023
The
Core
Bond
Fund returned
-4.86%
for
the
Institutional
Class,
compared
with
the
-4.78% return
of
its
benchmark,
the
Bloomberg
U.S.
Aggregate
Bond
Index.
The
performance
table
shows
returns
for
all
share
classes
of
the
Fund.
Economy
expanded
as
interest
rates
rose
The
U.S.
economy
expanded
in
2022,
despite
ongoing
concerns
regarding
inflation
and
rising
interest
rates.
Real
gross
domestic
product,
which
measures
the
value
of
all
goods
and
services
produced
in
the
United
States,
increased
at
an
annualized
rate
of
2.6%
during
the
fourth
quarter
of
last
year,
according
to
the
government’s
“third”
estimate.
The
unemployment
rate
remained
relatively
stable
and
settled
at
3.5%
in
March
2023.
Core
inflation,
which
measures
all
items
except
food
and
energy,
rose
5.6%
over
the
twelve
months
ended
March
2023.
Crude
oil
prices
were
volatile
but
declined
from
$99
to
$76
per
barrel
during
the
period.
The
Federal
Reserve
responded
to
the
economic
impact
of
higher
inflation
by
raising
the
federal
funds
target
rate
eight
times
during
the
twelve-month
period,
increasing
the
key
short-term
interest-rate
measure
to
4.75%–5.00%.
At
the
March
2023
meeting,
the
Fed
reiterated
that
policymakers
remained
“highly
attentive”
to
inflation
risks.
Portfolio
Managers’
Comments
(continued)
8
The
major
segments
of
the
fixed-income
market
posted
mixed
results
for
the
period,
dampened
by
a
rise
in
U.S.
Treasury
yields
across
all
maturities.
The
Bloomberg
U.S.
Aggregate
Bond
Index,
a
broad
measure
of
the
U.S.
investment-grade
fixed-
rate
bond
market,
declined
most.
High-yield
bonds
and
U.S.
Treasury
inflation-protected
securities
(TIPS)
recorded
smaller
setbacks.
Municipal
and
short-term
bonds
both
gained
ground.
Most
sectors
in
the
benchmark
declined
Most
sectors
in
the
Bloomberg
U.S.
Aggregate
Bond
Index
posted
negative
returns
for
the
twelve
months.
U.S.
Treasuries,
the
largest
sector
with
a
weighting
of
40.5%,
returned
−4.5%,
outperforming
the
index.
Mortgage-backed
securities
(MBS),
the
second-largest
sector
accounting
for
27.3%
of
the
index’s
total
market
capitalization
on
March
31,
2023,
returned
−5.0%.
Corporate
bonds—the
third-largest
sector
at
24.3%—experienced
a
more
sizeable
decline
of
−5.6%.
Among
smaller
sectors
in
the
benchmark,
asset-backed
securities
were
the
best-performing
sector
in
the
index,
advancing
0.4%,
followed
by
government
agency
securities,
which
returned
−1.6%,
and
commercial
mortgage-backed
securities
(CMBS),
which
returned
−3.9%.
Fund
trailed
its
benchmark
The
Fund
trailed
its
benchmark
for
the
twelve-month
period.
An
overweight
position
in
corporate
bonds—including
small
allocations
to
emerging-markets
and
high-yield
corporates—detracted
most
from
the
Fund’s
relative
return.
An
overweight
allocation
to
CMBS
also
detracted,
as
did
a
small
out-of-benchmark
position
in
municipal
bonds.
Conversely,
the
Fund’s
holdings
in
the
MBS
sector
contributed
most
to
its
relative
performance.
Yield
curve
positioning—
how
the
Fund
was
invested
across
different
bond
maturities—across
the
portfolio,
and
especially
in
the
MBS
and
U.S.
Treasury
sectors,
was
also
beneficial.
Core
Impact
Bond
Fund
Performance
for
the
twelve
months
ended
March
31,
2023
The
Core
Impact
Bond
Fund returned
-5.54%
for
the
Institutional
Class,
compared
with
the
-4.78% return
of
its
benchmark,
the
Bloomberg
U.S.
Aggregate
Bond
Index.
The
performance
table
shows
returns
for
all
share
classes
of
the
Fund.
Economy
expanded
as
interest
rates
rose
The
U.S.
economy
expanded
in
2022,
despite
ongoing
concerns
regarding
inflation
and
rising
interest
rates.
Real
gross
domestic
product,
which
measures
the
value
of
all
goods
and
services
produced
in
the
United
States,
increased
at
an
annualized
rate
of
2.6%
during
the
fourth
quarter
of
last
year,
according
to
the
government’s
“third”
estimate.
The
unemployment
rate
remained
relatively
stable
and
settled
at
3.5%
in
March
2023.
Core
inflation,
which
measures
all
items
except
food
and
energy,
rose
5.6%
over
the
twelve
months
ended
March
2023.
Crude
oil
prices
were
volatile
but
declined
from
$99
to
$76
per
barrel
during
the
period.
The
Federal
Reserve
responded
to
the
economic
impact
of
higher
inflation
by
raising
the
federal
funds
target
rate
eight
times
during
the
twelve-month
period,
increasing
the
key
short-term
interest-rate
measure
to
4.75%–5.00%.
At
the
March
2023
meeting,
the
Fed
reiterated
that
policymakers
remained
“highly
attentive”
to
inflation
risks.
The
major
segments
of
the
fixed-income
market
posted
mixed
results
for
the
period,
dampened
by
a
rise
in
U.S.
Treasury
yields
across
all
maturities.
The
Bloomberg
U.S.
Aggregate
Bond
Index,
a
broad
measure
of
the
U.S.
investment-grade
fixed-
rate
bond
market,
declined
most.
High-yield
bonds
and
U.S.
Treasury
inflation-protected
securities
(TIPS)
recorded
smaller
setbacks.
Municipal
and
short-term
bonds
both
gained
ground.
Most
sectors
in
the
benchmark
declined
Most
sectors
in
the
Bloomberg
U.S.
Aggregate
Bond
Index
posted
negative
returns
for
the
twelve
months.
U.S.
Treasuries,
the
largest
sector
with
a
weighting
of
40.5%,
returned
−4.5%,
outperforming
the
index.
Mortgage-backed
securities
(MBS),
the
second-largest
sector
accounting
for
27.3%
of
the
index’s
total
market
capitalization
on
March
31,
2023,
returned
−5.0%.
Corporate
bonds—the
third-largest
sector
at
24.3%—experienced
a
more
sizeable
decline
of
−5.6%.
Among
smaller
sectors
in
the
benchmark,
asset-backed
securities
were
the
best-performing
sector
in
the
index,
advancing
0.4%,
followed
by
government
agency
securities,
which
returned
−1.6%,
and
commercial
mortgage-backed
securities
(CMBS),
which
returned
−3.9%.
Fund
underperformed
its
benchmark
The
Fund
trailed
its
benchmark
for
the
twelve-month
period.
An
overweight
position
in
corporate
bonds—including
small
allocations
to
emerging-markets
and
high-yield
corporates—detracted
most
from
the
Fund’s
relative
return.
An
out-of-
benchmark
position
in
municipal
bonds
also
detracted,
as
did
overweight
allocations
to
the
CMBS
and
government
credit
sectors.
9
Portfolio
Managers’
Comments
Conversely,
the
Fund’s
holdings
in
the
MBS
and
Treasury
sectors
contributed
most
to
its
relative
performance.
Yield
curve
positioning—how
the
Fund
was
invested
across
different
bond
maturities—across
the
portfolio,
and
especially
among
MBS
and
U.S.
Treasuries,
was
also
beneficial.
Core
Plus
Bond
Fund
Performance
for
the
twelve
months
ended
March
31,
2023
The
Core
Plus
Bond
Fund returned
-5.02%
for
the
Institutional
Class,
compared
with
the
-4.78% return
of
its
benchmark,
the
Bloomberg
U.S.
Aggregate
Bond
Index.
The
performance
table
shows
returns
for
all
share
classes
of
the
Fund.
Economy
expanded
as
interest
rates
rose
The
U.S.
economy
expanded
in
2022,
despite
ongoing
concerns
regarding
inflation
and
rising
interest
rates.
Real
gross
domestic
product,
which
measures
the
value
of
all
goods
and
services
produced
in
the
United
States,
increased
at
an
annualized
rate
of
2.6%
during
the
fourth
quarter
of
last
year,
according
to
the
government’s
“third”
estimate.
The
unemployment
rate
remained
relatively
stable
and
settled
at
3.5%
in
March
2023.
Core
inflation,
which
measures
all
items
except
food
and
energy,
rose
5.6%
over
the
twelve
months
ended
March
2023.
Crude
oil
prices
were
volatile
but
declined
from
$99
to
$76
per
barrel
during
the
period.
The
Federal
Reserve
responded
to
the
economic
impact
of
higher
inflation
by
raising
the
federal
funds
target
rate
eight
times
during
the
twelve-month
period,
increasing
the
key
short-term
interest-rate
measure
to
4.75%–5.00%.
At
the
March
2023
meeting,
the
Fed
reiterated
that
policymakers
remained
“highly
attentive”
to
inflation
risks.
The
major
segments
of
the
fixed-income
market
posted
mixed
results
for
the
period,
dampened
by
a
rise
in
U.S.
Treasury
yields
across
all
maturities.
The
Bloomberg
U.S.
Aggregate
Bond
Index,
a
broad
measure
of
the
U.S.
investment-grade
fixed-
rate
bond
market,
declined
most.
High-yield
bonds
and
U.S.
Treasury
inflation-protected
securities
(TIPS)
recorded
smaller
setbacks.
Municipal
and
short-term
bonds
both
gained
ground.
Most
sectors
in
the
benchmark
declined
Most
sectors
in
the
Bloomberg
U.S.
Aggregate
Bond
Index
posted
negative
returns
for
the
twelve
months.
U.S.
Treasuries,
the
largest
sector
with
a
weighting
of
40.5%,
returned
−4.5%,
outperforming
the
index.
Mortgage-backed
securities
(MBS),
the
second-largest
sector
accounting
for
27.3%
of
the
index’s
total
market
capitalization
on
March
31,
2023,
returned
−5.0%.
Corporate
bonds—the
third-largest
sector
at
24.3%—experienced
a
more
sizeable
decline
of
−5.6%.
Among
smaller
sectors
in
the
benchmark,
asset-backed
securities
were
the
best-performing
sector
in
the
index,
advancing
0.4%,
followed
by
government
agency
securities,
which
returned
−1.6%,
and
commercial
mortgage-backed
securities
(CMBS),
which
returned
−3.9%.
Fund
underperformed
its
benchmark
The
Fund
trailed
its
benchmark
for
the
twelve-month
period.
An
overweight
position
in
corporate
bonds—including
small
allocations
to
emerging-markets
and
high-yield
corporates—detracted
most
from
the
Fund’s
relative
return.
Overweight
allocations
to
CMBS
and
asset-backed
securities
also
detracted,
as
did
a
small
out-of-benchmark
position
in
municipal
bonds.
Conversely,
the
Fund’s
holdings
in
the
MBS
sector
contributed
most
to
its
relative
performance.
Yield
curve
positioning—
how
the
Fund
was
invested
across
different
bond
maturities—across
the
portfolio,
and
especially
in
the
MBS
and
U.S.
Treasury
sectors,
was
also
beneficial.
5–15
Year
Laddered
Tax-Exempt
Bond
Fund
Performance
for
the
twelve
months
ended
March
31,
2023
The
5–15
Year
Laddered
Tax-Exempt
Bond
Fund returned
0.05%
for
the
Institutional
Class,
compared
with
the
2.38% return
of
its
benchmark,
the
Bloomberg
10-Year
Municipal
Bond
Index.
The
performance
table
shows
returns
for
all
share
classes
of
the
Fund.
Economy
expanded
as
interest
rates
rose
The
U.S.
economy
expanded
in
2022,
despite
ongoing
concerns
regarding
inflation
and
rising
interest
rates.
Real
gross
domestic
product,
which
measures
the
value
of
all
goods
and
services
produced
in
the
United
States,
increased
at
an
annualized
rate
of
2.6%
during
the
fourth
quarter
of
last
year,
according
to
the
government’s
“third”
estimate.
The
unemployment
rate
remained
relatively
stable
and
settled
at
3.5%
in
March
2023.
Core
inflation,
which
measures
all
items
except
food
and
energy,
rose
5.6%
over
the
twelve
months
ended
March
2023.
Crude
oil
prices
were
volatile
but
declined
from
$99
to
$76
per
barrel
during
the
period.
Portfolio
Managers’
Comments
(continued)
10
The
Federal
Reserve
responded
to
the
economic
impact
of
higher
inflation
by
raising
the
federal
funds
target
rate
eight
times
during
the
twelve-month
period,
increasing
the
key
short-term
interest-rate
measure
to
4.75%–5.00%.
At
the
March
2023
meeting,
the
Fed
reiterated
that
policymakers
remained
“highly
attentive”
to
inflation
risks.
The
major
segments
of
the
fixed-income
market
posted
mixed
results
for
the
period,
dampened
by
a
rise
in
U.S.
Treasury
yields
across
all
maturities.
The
Bloomberg
U.S.
Aggregate
Bond
Index,
a
broad
measure
of
the
U.S.
investment-grade
fixed-
rate
bond
market,
declined
most.
High-yield
bonds
and
U.S.
Treasury
inflation-protected
securities
(TIPS)
recorded
smaller
setbacks.
Municipal
and
short-term
bonds
both
gained
ground.
Nearly
all
sectors
produced
gains
Eleven
of
the
twelve
sectors
in
the
Bloomberg
10-Year
Municipal
Bond
Index
generated
positive
returns
for
the
twelve
months.
The
solid
waste/resource
recovery
sector
performed
best
with
a
return
of
3.1%.
The
leasing
sector
followed
with
a
gain
of
3.0%,
while
the
special
tax
sector
returned
2.9%.
State
general
obligations
(GOs),
the
benchmark’s
largest
sector
accounting
for
17.9%
of
the
index’s
total
market
capitalization
on
March
31,
2023,
gained
2.8%.
The
next
two
largest
sectors,
transportation
and
local
GOs,
advanced
2.6%
and
2.4%,
respectively.
The
worst
performing
sector
was
industrial
revenue
bonds
with
a
return
of
−1.8%.
As
of
March
31,
2023,
higher-rated
10-year
AAA
municipal
bonds
yielded
2.26%,
compared
with
a
3.48%
yield
on
the
10-
year
U.S.
Treasury
bond.
New
municipal
issuance
during
the
twelve-month
period
was
$362.8
billion,
down
from
$471.5
billion
for
the
prior
twelve
months,
from
April
1,
2021,
through
March
31,
2022.
Fund
underperformed
its
benchmark
The
Fund
trailed
its
benchmark
for
the
period.
An
underweight
position
in
the
state
GO
sector
detracted
most,
followed
by
Fund
holdings
in
the
special
tax,
water
and
sewer,
local
GO
and
health
care
sectors.
The
Fund’s
overall
yield
curve
positioning—how
the
Fund
was
invested
across
different
bond
maturities—also
hurt
its
relative
return.
On
the
positive
side,
Fund
holdings
in
the
industrial
revenue
sector
enhanced
the
Fund’s
relative
performance.
Green
Bond
Fund
Performance
for
the
twelve
months
ended
March
31,
2023
The
Green
Bond
Fund returned
-4.70%
for
the
Institutional
Class,
compared
with
the
-4.11% return
of
its
benchmark,
the
Bloomberg
MSCI
U.S.
Green
Bond
Index.
The
performance
table
shows
returns
for
all
share
classes
of
the
Fund.
Economy
expanded
as
interest
rates
rose
The
U.S.
economy
expanded
in
2022,
despite
ongoing
concerns
regarding
inflation
and
rising
interest
rates.
Real
gross
domestic
product,
which
measures
the
value
of
all
goods
and
services
produced
in
the
United
States,
increased
at
an
annualized
rate
of
2.6%
during
the
fourth
quarter
of
last
year,
according
to
the
government’s
“third”
estimate.
The
unemployment
rate
remained
relatively
stable
and
settled
at
3.5%
in
March
2023.
Core
inflation,
which
measures
all
items
except
food
and
energy,
rose
5.6%
over
the
twelve
months
ended
March
2023.
Crude
oil
prices
were
volatile
but
declined
from
$99
to
$76
per
barrel
during
the
period.
The
Federal
Reserve
responded
to
the
economic
impact
of
higher
inflation
by
raising
the
federal
funds
target
rate
eight
times
during
the
twelve-month
period,
increasing
the
key
short-term
interest-rate
measure
to
4.75%–5.00%.
At
the
March
2023
meeting,
the
Fed
reiterated
that
policymakers
remained
“highly
attentive”
to
inflation
risks.
The
major
segments
of
the
fixed-income
market
posted
mixed
results
for
the
period,
dampened
by
a
rise
in
U.S.
Treasury
yields
across
all
maturities.
The
Bloomberg
U.S.
Aggregate
Bond
Index,
a
broad
measure
of
the
U.S.
investment-grade
fixed-
rate
bond
market,
declined
most.
High-yield
bonds
and
U.S.
Treasury
inflation-protected
securities
(TIPS)
recorded
smaller
setbacks.
Municipal
and
short-term
bonds
both
gained
ground.
All
benchmark
sectors
declined
All
of
the
sectors
in
the
Bloomberg
MSCI
U.S.
Green
Bond
Index
posted
negative
returns
for
the
twelve
months.
Corporate
bonds,
the
largest
sector
in
the
index
with
a
weighting
of
60.2%
on
March
31,
2023,
trailed
the
benchmark
with
a
return
of
–5.4%.
Government
agency
bonds,
the
index’s
second
largest
sector
with
a
weighting
of
20.3%,
and
government
credit
securities,
the
benchmark’s
third-largest
sector
at
18.5%,
both
outpaced
the
index,
returning
–1.8%
and
–2.6%,
respectively.
Commercial
mortgage-backed
securities
(CMBS),
which
represented
just
0.3%
of
the
index,
returned
−1.8%.
11
Portfolio
Managers’
Comments
Fund
underperformed
its
benchmark
The
Fund
trailed
its
benchmark
for
the
twelve-month
period.
The
Fund’s
security
selection
and
overweight
position
in
CMBS,
along
with
an
out-of-benchmark
allocation
to
asset-backed
securities,
detracted
most
from
its
relative
performance
versus
the
index.
An
underweight
position
in
government
agency
bonds
also
hurt
the
Fund’s
relative
return.
On
the
positive
side,
the
Fund’s
overall
yield
curve
positioning—how
the
Fund
was
invested
across
different
bond
maturities—as
well
as
its
underweight
positions
in
corporate
bonds
and
government
credit
securities,
made
positive
contributions
to
its
relative
performance.
Out-of-benchmark
allocations
to
municipal
bonds
and
Treasuries
were
also
beneficial.
High-Yield
Fund
Performance
for
the
twelve
months
ended
March
31,
2023
The
High-Yield
Fund returned
-2.94%
for
the
Institutional
Class,
compared
with
the
-2.98% return
of
its
benchmark,
the
ICE
BofA
BB-B
U.S.
Cash
Pay
High
Yield
Constrained
Index.
The
performance
table
shows
returns
for
all
share
classes
of
the
Fund.
Economy
expanded
as
interest
rates
rose
The
U.S.
economy
expanded
in
2022,
despite
ongoing
concerns
regarding
inflation
and
rising
interest
rates.
Real
gross
domestic
product,
which
measures
the
value
of
all
goods
and
services
produced
in
the
United
States,
increased
at
an
annualized
rate
of
2.6%
during
the
fourth
quarter
of
last
year,
according
to
the
government’s
“third”
estimate.