Fixed Income Renaissance: Why $74 Million in Bond Exposure Signals Portfolio Strategy Shift

The Strategic Rebalancing Behind Oregon Advisory Firm’s Move

When Oregon-based von Borstel & Associates boosted its Dimensional Global Core Plus Fixed Income ETF (DFGP) holdings by 97,269 shares in the third quarter, it wasn’t a casual portfolio adjustment. According to SEC filings disclosed on November 13, the firm expanded its position from roughly 1.24 million to 1.34 million shares—a $5.75 million increase that now represents $74.09 million in fixed income exposure, or 11.36% of total 13F reportable assets.

This move reflects a broader shift in how sophisticated investors are thinking about bonds. After years of underperformance during the low-rate environment, advisors are recognizing that fixed income can once again serve its fundamental purpose: generating reliable cash flows and dampening portfolio volatility.

Understanding the Fixed Income Allocation

Do bonds pay dividends? Technically, bonds pay interest rather than dividends, but the income mechanics matter more than semantics. DFGP, with its 3.4% yield and $2.06 billion in assets under management, provides exactly the kind of income generation many portfolios have lacked. The fund’s 6% one-year total return demonstrates that fixed income can deliver meaningful gains while distributing regular income to investors.

The expanded position now sits as the firm’s second-largest holding, trailing only its $133.53 million stake in the Dimensional Core Equity ETF (DFAC). This allocation architecture—approximately 20% equities and 11% fixed income across the fund’s major holdings—suggests a deliberate rebalancing rather than a speculative trade.

What Makes This Bond Strategy Different

DFGP employs a “core plus” approach, combining investment-grade debt securities with strategically selected lower-rated bonds to enhance yield potential. Rather than concentrating risk, the fund disperses exposure across more than 1,300 holdings globally, blending U.S. and foreign debt instruments. The net expense ratio sits at just 0.22%, keeping the cost of this diversified access remarkably low.

The fund’s duration of under seven years positions it for intermediate rate sensitivity—offering income upside without aggressive duration risk. With a yield to maturity exceeding 5.5%, investors gain meaningful cash flow without making directional bets on where rates are headed.

Portfolio Composition After the Filing:

• DFAC (Core Equity): $133.53 million (20.2% of AUM)
• DFGP (Fixed Income): $74.09 million (11.2% of AUM)
• DFIC (International Core Equity): $45.49 million (6.9% of AUM)
• DUHP (High Yield): $26.78 million (4.0% of AUM)
• DFSV (Emerging Markets Small Cap): $25.95 million (3.9% of AUM)

Why Advisors Are Rotating Into Fixed Income

The relative underperformance of bonds—DFGP gained roughly 2% over the past year versus the S&P 500’s 17% surge—might seem like a reason to stay underweight. Instead, it signals an opportunity. After equity markets’ volatility and uncertainty around future rate trajectories, advisors are recognizing that fixed income provides portfolio ballast.

This isn’t a speculative credit bet or a market-timing call. Rather, it represents structural allocation—bonds sitting alongside equity ETFs as permanent portfolio components, not cyclical replacements. The systematic nature of Dimensional’s approach, which spreads risk across thousands of holdings and combines credit quality levels, appeals to institutional managers seeking defensible diversification.

Key Takeaway

The $74.09 million expansion in fixed income exposure demonstrates that sophisticated advisors view bonds as functional portfolio infrastructure once again. With bonds capable of delivering income (via interest payments and distributions), reasonable total returns, and proven volatility reduction, the von Borstel & Associates move represents a return to fundamental portfolio balance—not a speculative trade chasing headlines.