UC Bond Fund

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					                                                      UC Bond Fund

Investment Objective: The Fund seeks to maximize interest income returns, while protect-
ing principal, in order to provide a safe low-risk investment, with attractive and stable returns.

Quick Stats                1 Year Return (06/30/2011)       4.34%
                           NAV (06/30/2011)              $226.95                               Average Annual Total Returns
                           Investment Category      Fixed Income                                           as of 06/30/2011
                           Net Assets ($M)                   $984
                           Inception              January 1, 1978          Returns (%)                     1 Year                        5 Years 10 Years
                                                                           Bond Fund                        4.34                          6.60    6.10
                                                                           Policy Benchmark                 3.90                          6.52    5.75
The Bond Fund is part of the UC Retirement Savings                         Taxable Bond Funds Median*       5.67                          6.08    5.33
Program’s Core Funds, which include a full range of asset                  Inflation (Consumer Price Index) 3.56                          2.16    2.41
classes designed to help meet participant needs. Participants
in the Program should consider their unique needs and                    For the 10-year period ending June 30, 2011, the UC Bond Fund return is
                                                                         among the top 34% of all taxable bond funds in the Morningstar universe.
goals, along with any savings held outside of the Program,
when building an appropriately diversified asset allocation              * Source: Morningstar, Inc. Although gathered from reliable sources, data completeness, and
                                                                         accuracy cannot be guaranteed.
of funds.

                                                                                                          How We Invest
  Ten-Year Performance of a $100 Monthly Investment
      in the Bond Fund and the Policy Benchmark*                         The Treasurer’s Office manages the Bond Fund according
           Total Deposits: $12,000       Years Ended June 30             to policies established by The Regents of the University of
           2011 Ending Values                                            California.
$20,000
                     Policy Benchmark $16,019                            The Fund utilizes extensive analysis of economic and political
 15,000
                     Bond Fund   $16,186                                 factors using a “top-down” approach and fundamental,
                                                                         “bottom-up” analysis for individual security selection. It
 10,000
                                                                         maintains a diversified portfolio primarily of high-quality
                                                                         debt securities. The Fund seeks to be fully invested at all
  5,000
                                                                         times, although a modest cash level may exist until invested.
                                                                         The Bond Fund is managed by Senior Managing Director
     0                                                                   Randy Wedding and Senior Portfolio Managers Linda Fried,
          01   02   03    04      05    06      07   08   09   10   11   David Schroeder, Satish Swamy, and Alice Yee.


                                                                                                       Fees and Expenses
                            Risks to You
                                                                         Investor expenses are targeted to be 0.15% (or $1.50 per
Risks include interest-rate risk, market risk, credit risk,              $1,000 invested) of the Fund’s average market value per
foreign security risk, and prepayment risk. A decrease in                year, assessed on a daily basis (1/365th per day invested).
interest rates usually causes an increase in value of bonds.             These expenses are not billed to participants, but are
An increase, or the expectation of an increase in interest               netted against the investment experience of the fund.
rates generally causes a decrease in the value of bonds.                 These expenses are comprised of approximately 0.03%
The Bond Fund may be appropriate for investors interested                for investment management, 0.02% for investor education
in a fixed-income vehicle that seeks to maximize long-                   and 0.10% for administration (including accounting, audit,
term investment returns through a diversified portfolio                  legal, custodial and recordkeeping services). The total
of intermediate-term debt securities. The Bond Fund may                  administrative expenses are estimated and could actually be
not be appropriate for investors with short time horizons                higher or lower in some periods. Since actual administrative
or those uncomfortable with fluctuations in market value                 expenses are netted against investment experience, if actual
or a changing interest-rate environment.                                 administrative expenses are higher than estimated, the
                                                                         effective expense ratio for participants will increase; if actual
For more information on risk, see the “Investment Risk Factor            expenses are lower than estimated, the effective expense ratio
Guide,” available at http://www.ucfocusonyourfuture.com/                 will decrease. There are no front-end or deferred-sales loads
plan-investments/core-funds.php.                                         or other marketing expenses.
                                                           UC Bond Fund continued

                                  Maturities                                                                             Ratings
                               as of 06/30/2011                                                                   as of 06/30/2011
The maturity of bonds in the Fund can be an important                               Credit ratings are an indication of a company’s ability to repay
determinant of its performance in different interest rate cycles.                   its borrowings when due. Higher quality bonds generally offer
Although the average maturity of the Fund is currently similar                      lower yields than lower quality bonds. The yield offered on
to its benchmark, the Fund managers diversify maturities in                         a bond relative to its quality rating is one important factor
order to mitigate risk and capture attractive spreads along the                     portfolio managers use in selecting securities for the Fund.
yield curve.
            20+ years                                                                                             BB        B
              36%                                                                                   BBB           2%       6%
                                                                                                    13%

         15-20
         years                                                                                A                                                      AAA
          1%                                                                                 16%                                                     58%
                                                              <10 years
             10-15                                              61%
             years
               2%                                                                                    AA
                                                                                                     5%
                                   Sectors
                               as of 06/30/2011
                                                                                                                 Month-End Values
The Fund’s sector weightings (the types of individual securities)
are shown below. The Fund’s managers’ decide on the allocations                                    most recent 12 months ending 06/30/2011
to the broad sectors based on the macroeconomic outlook.                                                   July 2010                     220.05355
                                                                  Core                                     August 2010                   222.89392
         Core
                                                                  Gov't
       Collateral 1                                                                                        September 2010                223.26966
                                                                  30%
         47%                                                                                               October 2010                  224.22152
                                                                                                           November 2010                 223.49085
                                                                                                           December 2010                 220.97037
                                                                                                           January 2011                  221.58380
                                                              Core
                                                                                                           February 2011                 221.44280
                                                              Credit
                                                              23%                                          March 2011                    221.70609
1
                                                                                                           April 2011                    224.71318
  Core Collateral: “Securtized Investments” equivalent to the Barclays Aggregate
Fixed Income benchmark, which includes investments in residential mortgage-backed                          May 2011                      227.70768
securities, asset-backed securities, and commercial mortgage-backed securities.                            June 2011                     226.95482

                         Asset Class Overview
                                                                                                          Year-by-Year Performance
                               as of 06/30/2011                                                               by Calendar Year
Fixed-income investments include government securities,                                                    Percentage (%) change in value
                                                                                      30.0
mortgage-backed securities, and corporate bonds. The portfolio
managers allocate exposures to these broad sectors based on                           25.0
their relative return projections.
                                                                                      20.0
The average duration of the Fund is targeted not to vary from
that of the Barclays Capital U.S. Aggregate Bond Index by more                        15.0
                                                                                                   12.0
than +/- 20%. The portfolio maintains an average credit of A (or                                                                                     8.5
                                                                                      10.0
equivalent) or better. No more than 10% of the Fund may be                                   7.5                                         6.8               7.0
invested in non-U.S.-dollar-denominated securities. No more                            5.0                 4.4     4.4     2.7     4.5
                                                                                                                                               2.7
than 10% of the Fund may be invested in below-investment
grade securities.                                                                      0.0
                                                                                             01     02     03      04      05      06    07    08    09    10


Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.
The information contained herein regarding the UC Funds has has been provided by the University of California Office of the Treasurer and is solely
the responsibility of the University of California Office of the Treasurer.

				
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