ACTIVE INCOME

A research-driven approach to pursue current income

Explore income funds

We build funds by thinking about the ultimate source of income:

Rates

Interest-rate risk (also called term structure risk) is a bond’s sensitivity to changes in the level, slope, and shape of interest rates.

Credit

Credit risk is the possibility a borrower may fail to make payments to investors.

Prepayment

Prepayment risk involves borrowers paying off debt early, typically in a falling-rate environment, which reduces the number of payments and amount of interest received by investors.

Liquidity

Liquidity risk refers to the relative difficulty of trading a security in a reasonable amount of time.

We believe attractive opportunities exist outside of the index

The Bloomberg Barclays U.S. Aggregate Bond Index is a benchmark for many bond funds, but our active teams believe many sectors in the index have high interest-rate risk and unattractive total return potential. Our analysts look outside the index for better fixed-income investment opportunities.

The economy and interest rates

March 2021

Analyst Onsel Emre, Ph.D., a member of the Macro & Sovereign Credit Team, explains today's inflation dynamics and the post-pandemic recovery in different parts of the world.


Update on Income Fund and Diversified Income Trust

March 2021

Michael Salm, Co-CIO of Fixed Income, describes these multi-sector funds and their active interest-rate strategies as the economy reopens.

We can find diverse opportunities because we have a team with diverse experience

Over 80 fixed income professionals analyze investments across specialized teams

  • Credit Research
  • Corporate & Tax-exempt Credit
  • Macro & Sovereign Credit
  • Short Term Liquid Markets
  • Structured Credit
  • Portfolio Construction
  • Risk Management

We offer funds with different benchmarks and portfolio construction approaches

Funds YIELDS
30-day SEC yields
as of 04/30/21
INTEREST RATE RISK
Average effective duration
as of 03/31/21
Overall Morningstar RatingTM
as of 03/31/21
Diversified Income Trust 3.77% -0.63 yrs. (out of 270 in category)
Floating Rate Income Fund 2.47% 0.10 yrs. (out of 232 in category)
Global Income Trust 1.96% with subsidy
1.68% without subsidy
5.46 yrs. (out of 181 in category)
High Yield Fund 3.44% 3.23 yrs. (out of 630 in category)
Income Fund 2.40% with subsidy
2.29% without subsidy
5.14 yrs. (out of 540 in category)
Short Duration Bond Fund 1.33% 1.79 yrs. (out of 516 in category)

Duration measures the sensitivity of bond prices to interest-rate changes. A negative duration indicates that a security or fund may be poised to increase in value when interest rates increase. For correlation, numbers less than 1 indicate a diminishing correlation. The maximum correlation is 1 and the minimum is 0, with values between 0 and -1 indicating negative correlation.

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-end 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-, five-, and ten-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36 to 59 months of total returns, 60% five-year rating/40% three-year rating for 60 to 119 months of total returns, and 50% ten-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the ten-year overall star rating formula seems to give the most weight to the ten-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods. Ratings do not take into account the effects of sales charges and loads.