2026 July Portfolio Commentary

During July, the Bramshill Income Performance Strategy returned -1.74%, bringing year-to-date performance to -0.76%. Fixed income markets sold off broadly during the month as treasury yields moved higher across the curve, driving negative returns across most US fixed income sectors.

Benchmark ETFs, TLT (Treasuries) and LQD (IG Corporates), were down -4.47% and -2.24%, respectively for the month. The move in yields was driven primarily by a resurgence in inflation concerns as brent oil prices climbed from approximately $65 to $80 per barrel coinciding with dovish Federal Reserve commentary. Credit spreads also widened modestly amid the backup in rates, with the moves more pronounced in lower-quality credit. We are seeing pressure on credit spreads from hyperscaler issuance at the higher end of the credit spectrum, and from lower end high yield names which are facing potential refinancing risk. During the month, we meaningfully reduced our high yield corporate exposure from approximately 8% to 3% of the Strategy through sales of a high yield ETF position, reflecting our continued caution around lower-quality credit at a time when spreads, in our view, no longer adequately compensate for the risk of a growth slowdown. Within investment grade credit, we modestly reduced exposure from 50% to 49% of the portfolio. We added to existing positions in ETR, KKR, and CG baby bonds, which was offset by sales in MU 3.477% '51 which had rallied significantly. We added to ENBCN and AEP junior subordinated bonds, which cheapened during the July selloff, and modestly added to short-duration CITI and BAC paper. In preferred securities, we maintained a stable allocation of approximately 12%, adding modestly to a MS preferred position as it weakened alongside the broader index. Our long-duration U.S. Treasury allocation remained stable at approximately 19% of the portfolio. Within this allocation, in an effort to capture more upside should yields decline, we shifted some exposure into low-coupon, low-dollar-price treasuries trading in the $40s, which offer higher convexity and beta to rate moves. Municipal exposure remained largely unchanged at approximately 1%, with a small addition to a municipal closed-end fund following the selloff in rates and munis. Cash and short-term Treasury balances increased meaningfully from approximately 10% to 16% of the portfolio as we opted to raise liquidity and dry powder following the reduction in high yield exposure and amid a more challenging environment for credit. Looking ahead, we believe the recent backup in yields has created more attractive investments across several asset classes such as BDCs, $25 Preferreds, and select cross over corporate credit. We remain focused on redeploying capital selectively into high conviction opportunities while maintaining a disciplined, risk-aware approach to income generation, liquidity, and downside protection. With IG yields in the 6% - 7% range, we are seeing opportunities and believe this is an attractive entry point for our Strategy at this time. For a more complete discussion of the risks of a growth slowdown, please see our Quarterly Webinar Replay (here).