Fixed Income Fund Launch – Union College Student Investment Fund

The Union College Student Investment Fund (SIF) is excited to announce the launch of its first-ever Fixed Income Fund. The SIF was established in 1986 through the gift of Heinz and Ruthe Eppler to give Union students “the opportunity to gain experience in … the management of an investment portfolio.” During its nearly 40-year history, the fund invested primarily in equities. Starting on April 1, 2025, SIF will incorporate a Fixed Income fund to be paired with an already successful Long Only Equity fund.. The initial allocation to the Fixed Income fund is $100,000 out for a total SIF value of about $1,000,000.

Having separate equity and fixed income accounts within the SIF will create new learning opportunities including the management of fixed income assets. This includes using fixed income metrics such as yield, duration, credit spreads, as well as heightened consideration of macroeconomic factors like inflation and interest rates as key drivers of bond prices. In addition, the launch represents a strategic step in portfolio diversification, balancing equity holdings with fixed income investments to achieve capital preservation, predictable returns, and higher risk-adjusted performance.

Investment Objective

The objective of the fund is to outperform the Bloomberg U.S. Aggregate Bond Index on a risk-adjusted basis. Known as “the Agg”, the index “measures the investment grade, US dollar denominated, fixed-rate taxable bond market.” It is widely regarded as a standard for fixed income portfolios, provides a comparable mix of treasuries, corporates, and securitized credit. For practical purposes we will compare our performance and allocations to either the AGG – a BlackRock ETF tracking the index, or BND – a Vanguard ETF that tracks the index.

Principal Investment Strategy

Our investment strategy will focus on the following characteristics relative to the benchmark:

Credit Quality: We anticipate that our fixed income portfolio will maintain an average credit quality consistent with the benchmark. Outperformance will be pursued mainly through security selection, incorporating higher-yielding bonds where appropriate to enhance returns. In addition, when our assessment of risk in the fixed market differs from that of the market we plan to either lower or increase the average credit quality relative to the benchmark.
Duration: We anticipate that our fixed income portfolio will generally maintain average duration in line with the average duration of the benchmark. However, when our assessment of the future direction of interest rates differs from that of the market, we plan to either lengthen or shorten the duration of our portfolio relative to the benchmark.
Sector composition: We anticipate that our fixed income portfolio will generally match the sector composition of the benchmark, i.e. around 44% Treasuries, 20% government mortgage-backed, 26% corporate bonds, 10% other, including commercial asset-backed.

Investment Managers:
Andrew Keaveney ‘26