most segments of the U.S. fixed-incomemarkets delivered modest first-quarter returns. Barclays Aggregate Bond Index, a broad
measure of investment-grade corporate and government bonds, returned 0.30%.Securitized bonds and Treasury Inflation Protected Securities(TIPS)returned 0.74% and0.86%, respectively, as measured by the Barclays Securitized Index and the Barclays
TIPS Index. By contrast, high-yield and emerging market bonds posted gains of 5.05%and 4.86%, respectively, as measured by the BofA MerrillLynchHigh Yield Cash PayIndex and the JPMorgan Emerging Bond Index. U.S. Treasury returns were negative, as
the yield on the bellwether 10-year Treasury shop rose from 1.89% to 2.23% over the period.Contributors and detractors — equity portion of the portfolio
Contributors: The equity portion of the portfolio maintained an overweight to information technology,
as well as an underweight to utilities and consumer discretionary. The overweight totechnology was a contributor to performance,aswasthunderweight to utilities. The
underweight to consumer discretionary had little effect.
Stock selection within financials
and information technology contributed to performance, while selection within utilities
detracted.> In information technology, top holding Apple was, once again, the strongest contributor.
Te company had record holiday sales, as demand for iPads, iPhones and Macs
continued to reach new highs and, later in the period, the company raised its earnings
guidance ahead of a new iPad product launch announcement. The stock also received a
boost when plans to initiate a dividend and share repurchase program commencing later
this year were announced. Skyworks Solutions, which we purchased toward the end of
last year, also benefited from the success of the new iPad, where two of its chips are
present.