October 15th, 2013

Income Review

Cumberland Income Fund 3rd Quarter 2013 Review and Outlook

The Cumberland Income Fund gained +1.1% during the third quarter of 2013 compared to the gain of +0.1% posted by the DEX Universe Bond Index during the same period. The Fund has gained +2.8% year to date and +4.0% year over year, while the DEX has declined -1.6% yearto date and -1.3% year over year. The bond market’s heightened volatility that began last quarter spilled over into Q3 in earnest as interest rates continued on an upward trajectory. The Fund was able to dampen much of the volatility by continuing to keep duration (bond price sensitivity to interest rate movements) low, maintaining the weighting in floating rate notes (FRNs) relatively high (23% of the Fund), and ensuring that the portfolio remained diversified by holding securities that offer attractive risk / reward characteristics, in our view.