Short-Term Government Securities Fund
Investment Objective and Strategy
Is this fund a good choice for me?
The Short-Term Government Securities Fund may be appropriate if you’re seeking a little more interest income from your savings than you’d earn in a traditional savings account. You’re also comfortable with potential fluctuations in your account based on the performance of the underlying bonds.
Investment objective and strategy
The fund seeks a high level of current income from investments in securities backed by the full faith and credit of the U.S. government. These investments include: U.S. Treasuries, securities issued by U.S. government agencies, and other securities whose principal and interest payments are guaranteed by the U.S. government. The average maturity of the portfolio, under normal circumstances, is expected to be three years or less.
|Inception||May 01, 1995|
|Benchmark||ICE BofA 1-5 Year U.S. Treasury Index|
|Fee Structure||No Load|
|Expense Ratio||0.80% (Net 0.75%) (12/31/2022)|
|Median Expense Ratio for Peer Group||0.91% (12/31/2022)|
|Fee Waiver||Contractual through 4/30/2024|
|30-Day SEC Yield||3.54% (8/31/2023)|
The expense ratio shows the percentage of fund assets deducted annually to cover operating costs. Fund expense ratios shown here do not include acquired fund fees and expenses. If applicable, these additional costs are disclosed in the prospectus. The net expense ratio is the expense ratio minus the portion of expenses waived or reimbursed. Please see the current prospectus for additional details. The peer ratio is according to Morningstar Direct, based on each fund’s Morningstar classification.
Homestead Advisers has contractually agreed, through at least April 30, 2024, to limit the Fund’s operating expenses to an amount not to exceed 0.75% of the Fund’s average daily net assets. Operating expenses exclude interest; taxes; brokerage commissions; other expenditures that are capitalized in accordance with generally accepted accounting principles; other extraordinary expenses not incurred in the ordinary course of the Fund’s business; and acquired fund fees and expenses such as the fees and expenses associated with an investment in (i) an investment company or (ii) any company that would be an investment company under Section 3(a) of the Investment Company Act of 1940, as amended (the “1940 Act”), but for the exceptions to that definition provided for in Sections 3(c)(1) and 3(c)(7) of the 1940 Act. This waiver agreement will terminate immediately upon termination of the Fund’s Management Agreement and may be terminated by the Fund upon 60 days’ notice.
As of 6/30/2023
Calendar-Year Total Returns
The total returns shown above represent past performance, which does not guarantee future results. Investment return and principal value of an investment will fluctuate. An investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be higher or lower than the performance data quoted. For performance data current to the most recent month-end, call 800.258.3030 or visit homesteadfunds.com.
Fund total returns include changes in principal value and reinvested dividends, income and capital gain distributions.
Debt securities are subject to interest rate risk, credit risk, extension risk, income risk, issuer risk and market risk. The value of U.S. government securities can decrease due to changes in interest rates or changes to the financial condition or credit rating of the U.S. government. Investments in asset-backed and mortgage-backed securities are also subject to prepayment risk as well as increased susceptibility to adverse economic developments. High-yield, lower-rated, securities involve greater risk than higher-rated securities.
The ICE BofA 1-5 Year U.S. Treasury Index measures the performance of short-term U.S. Treasury securities. Indices are unmanaged, and investors cannot invest directly in an index. Unless otherwise noted, performance of indices does not account for any fees, commissions or other expenses that would be incurred. Returns do not include reinvested dividends.
Growth of $10,000
The line chart is a comparison of the change in value of a $10,000 investment in the fund and the ICE BofA 1-5 Year U.S. Treasury Index over a 10-year period. The chart represents past performance, which is no guarantee of future results. Current performance may be higher or lower than that shown above. Returns and the principal value of your investment will fluctuate such that shares, when redeemed, may be worth more or less than their original cost. The fund’s average annual total returns are net of any fee waivers and reimbursements. Returns do not reflect taxes that the shareholder may pay on fund distributions or the redemption of fund shares.
For the month ending 06/30/2023
*Overall, out of 87 funds, according to risk-adjusted return
|Classification||Short U.S. Government|
1Overall, out of 6,270 funds, according to historical loss avoidance
The Lipper Rating for Preservation is a fund that has demonstrated a superior ability to preserve capital in a variety of markets when compared with other funds in its asset class as of month ending 6/30/23. The Lipper ratings are subject to change every month and are based on an equal-weighted average of percentile ranks for the Preservation metrics over three-year, five-year, 10-year and Overall periods. The highest 20% of funds in each peer group are named Lipper Leader or a score of 5, the next 20% receive a score of 4, the middle 20% are scored 3, the next 20% are scored 2, and the lowest 20 are scored 1. Homestead Short-Term Government Securities Fund, in Lipper’s Short US Government Funds classification, received a rating of 5 for the following periods (number of funds rated in parentheses): Preservation: Three-Year (6,270 funds), Five-Year (5,744 funds), 10-Year (4,061 funds) and Overall (6,270 funds). Lipper ratings are not intended to predict future results, and Lipper does not guarantee the accuracy of this information. More information is available at lipperleaders.com.
Morningstar rated this fund, in Morningstar’s short government category, 3 stars for the Overall period out of 87 funds, 3 stars for the 10-year period out of 73 funds, 3 stars for the five-year period out of 84 funds and 3 stars for the three-year period out of 87 funds for performance month ending 6/30/23. The Morningstar Rating for funds, or “star rating,” is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-ended funds and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-year, five-year, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.
©2023 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. Ratings are updated regularly. More information is available at morningstar.com.
Share Price History
As of 09/29/2023
The chart plots daily share prices for the last 10 years. The interactive calendar will retrieve the share price for any business day since the fund's inception.
As of 6/30/2023
As of 6/30/2023
|Number of Holdings||78|
|Weighted Average Maturity||2.72 years|
Income and/or capital gains distributions for this fund, if any, are listed in the table below for the current and previous calendar year. Mutual funds are required to pass through to their shareholders substantially all of the interest income and capital gains earned by the fund during the year. These distributions are paid on a regular schedule as shown in the table below.
2023 Earnings Distribution
|Distribution Type||Record Date||Declaration Date||$/Per Share|
2022 Earnings Distribution
|Distribution Type||Record Date||Declaration Date||$/Per Share|
The record date is the date on which you must be a shareholder in order to receive a portion of the fund’s distribution.
The declaration date, typically the business day after the record date, is the date the amount of the distribution is announced and deducted from fund assets. On this day, the amount of the distribution is deducted from fund assets and calculated as a per share amount to be passed through to shareholders. The fund’s share price will decline by the amount of the distribution (plus or minus any share price change related to market activity). The following business day, shareholders will see their portion of the distribution posted to their account as either a cash dividend or dividend reinvestment.
Debt securities are subject to interest rate risk, credit risk, extension risk, income risk, issuer risk and market risk. The value of U.S. government securities can decrease due to changes in interest rates or changes to the financial condition or credit rating of the U.S. government. Investments in asset-backed and mortgage-backed securities are also subject to prepayment risk as well as increased susceptibility to adverse economic developments. High-yield, lower-rated securities involve greater risk than higher-rated securities.