Details about investment offerings
Welcome to OneAmerica Funds, Inc.
OneAmerica Funds, Inc.
A Message From the Fund President
Welcome to the OneAmerica® Funds website. OneAmerica Funds, Inc. has been in operation since 1989 and currently offers four portfolios: Value, Investment Grade Bond, Asset Director and Socially Responsive. This website includes financial information, prospectuses and annual reports for each portfolio as well as insights from each portfolio's investment managers. I trust that you will find this information useful as you review your investments.
After posting three consecutive years of double digit returns and six consecutive years of positive returns, the S&P 500 index posted a negative price return and modest positive total return of 1.4 percent including dividends in 2015. All major U.S. stock indices experienced corrections (defined as a decline of ten percent or more) during the third quarter of 2015 before recovering to end the year relatively flat. Volatility finally re-entered the markets after several years of relative calm induced by the Federal Reserve’s quantitative easing program.
Long-term Treasury yields ended the year slightly higher than when the year began. Globally, developed country government bond yields were volatile during 2015 and many set new all-time lows. U.S. government bond yields continue to exceed those of most other developed countries. Credit spreads widened in 2015 with lower quality bonds generally underperforming higher quality bonds. This can be attributed to a number of factors including weak economic data globally and slowing global growth, geopolitical concerns, a stronger U.S. dollar, and significant declines in global commodities prices.
Markets have become increasingly concerned about weak growth throughout the developed world, with China being of greatest concern as it is now the world’s second largest economy. In addition, the Federal Reserve followed through on its plans to begin normalizing monetary policy by raising short-term interest rates by 25 basis points in December. The Fed did this while other major economies continue to pursue stimulative policies. This policy divergence has caused meaningful swings in currencies and commodities. Many commodities – most notably oil – have collapsed in value over the last eighteen months.
While a number of concerns continue to trouble investors, the U.S. economy has maintained a two percent growth trajectory. The unemployment rate continues to decline which has been the relative bright spot in terms of economic data. Inflation is well in check and in fact deflation is occurring in some segments of the economy. Other economic data has not indicated that this recovery is strengthening materially. In fact, recent data indicates that we may experience still slower growth and low inflation throughout 2016. Stock and bond markets have been priced for a sustained period of stable but sub-trend global growth. Any set-backs to these assumptions would likely create challenges for the markets, but with challenges come opportunities.
An Overview of OneAmerica Funds, Inc. Performance
OneAmerica Funds, Inc. is now comprised of four portfolios, due to the December liquidation of the Money Market Portfolio, each with a different directive. The Value Portfolio is an equity portfolio utilizing a multicap, value approach. The Investment Grade Bond Portfolio focuses primarily on intermediate investment grade bonds. The Asset Director Portfolio is a managed portfolio investing in stocks, bonds and cash based on our outlook for these various asset classes. And finally, the Socially Responsive Portfolio typically invests in financially strong companies that also adhere to specific moral beliefs.
Investment performance for each portfolio in OneAmerica Funds, Inc. for 2015 has been listed below.
|Portfolio||Class O||Advisor Class|
|Investment Grade Bond Portfolio||0.2%||(0.1%)|
|Asset Director Portfolio||(2.8%)||(3.1%)|
|Socially Responsive Portfolio||(5.0%)||(5.3%)|
Performance numbers for the OneAmerica portfolios are net of investment advisory fees and other expenses paid by each portfolio, but do not reflect specified contract charges and mortality and expense risk charges.
As always, I am grateful for the confidence you have placed in us and for continuing to invest in OneAmerica Funds, Inc.
John C. Mason
OneAmerica Funds, Inc.
February 12, 2016
The views expressed in this commentary are those of the author as of February 12, 2016 and are subject to change based on market conditions and other factors. These views should not be construed as a recommendation to buy, sell, or hold any specific security and are subject to change at any time.
Investing involves risk which includes potential loss of principal. Past performance is not a guarantee of future results. Investing in international markets involves risks not associated with investing solely in the U.S., such as currency fluctuation, potential political and diplomatic instability, liquidity risks, and differences in accounting, taxes, and regulations.
Money market funds are not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other federal government agency. Although they seek to preserve the value of your investment at $1.00 per share, it’s possible to lose money by investing in money market funds.