Active Income

Global Income Trust (Class Y)  (PGGYX)

Seeking attractive bond investments across world markets since 1987

Global Income Trust received an  Overall Morningstar Rating  of  

Q1 2020 | Global Income Trust Q&A

  • Extreme market volatility in March created a challenging backdrop for the fund during the first quarter.
  • Holdings in mortgage and corporate credit weighed on the fund’s quarterly results. On the plus side, active-currency strategies aided performance.
  • Despite the economic uncertainty of the coronavirus pandemic, newly attractive valuations should yield compelling investment opportunities when markets stabilize.

How did the fund perform for the three months ended March 31, 2020?

The fund’s class Y shares returned -5.30%, trailing the -0.33% result of the benchmark Bloomberg Barclays Global Aggregate Bond Index.

What was the market environment like during the first quarter of 2020?

After a relatively quiet first two months of the new year, the market environment changed dramatically in March. Rapidly growing concerns about the economic impact of a coronavirus outbreak sparked a global sell-off in risk assets. The sharp turn in sentiment reverberated across markets, as global equities fell, developed-market government-bond yields declined, and credit spreads widened. A dispute between Russia and Saudi Arabia over oil production levels further unnerved investors. Due to heightened oil market uncertainty, U.S. crude prices dropped more than 66% during the quarter to $20.48 per barrel on March 31. The rapid decline in oil prices added considerable pressure across corporate supply chains.

An escalating economic crisis elicited unprecedented measures from policy makers. The Trump administration signed a $2 trillion stimulus package into law — the largest economic relief package in U.S. history. The U.S. Federal Reserve rapidly unveiled six new lending facilities designed to help corporations facing a cash flow crisis avoid defaulting on their debt. These programs also provide support for money market funds and commercial debt markets. Dozens of other central banks across Europe, Asia, and elsewhere also announced emergency stimulus measures. The markets that were the most direct targets of these policies stabilized during the final week of the quarter. Investors were hopeful that massive government stimulus programs would help reduce the severity and duration of an economic recession.

A flight to safety pushed the yields on U.S. Treasuries lower. The benchmark 10-year Treasury yield plunged to a closing low of 0.54% on March 9 and ended the quarter at 0.70%, after beginning the year at 1.88%. The spreads on investment-grade bonds, or the risk premiums investors demand to hold these securities rather than U.S. Treasuries, widened to levels not seen since the financial crisis.

Which holdings and strategies hampered relative performance?

Mortgage-credit investments were the biggest detractor versus the benchmark this period. Our exposure to commercial mortgage-backed securities [CMBS] — both cash bonds and synthetic exposure to the BBB-rated tranche within CMBX — performed poorly as spreads widened substantially. [Bond prices fall as spreads widen and rise as spreads tighten.] CMBX is an index that references a basket of CMBS issued in a particular year. Investors became increasingly concerned that the escalating coronavirus could severely impact cash flows in various segments of the market, particularly retail and lodging.

In the residential mortgage market, our positions in agency credit-risk transfers securities [CRTs] struggled amid growing uncertainty about the effect of mortgage-payment forbearance on CRT cash flows.

Our corporate-credit holdings also worked against performance this quarter. As market sentiment soured, spreads on investment-grade and high-yield bonds widened substantially.

The fund’s interest-rate and yield-curve positioning further dampened relative performance. The portfolio’s duration in the United States was below that of the benchmark, giving it relatively less interest-rate sensitivity in an environment of declining rates. Model-driven global rate strategies — in which we sought to exploit rate differentials and yield-curve structures across various countries — also detracted on a relative basis.

Emerging-market debt was another notable detractor, primarily positions in Mexico, the Dominican Republic, and Brazil. The sector declined along with other risk assets.

Lastly, strategies targeting prepayment risk dampened performance versus the benchmark. Lower interest rates and indiscriminate selling by investors proved to be material headwinds for our positions in agency interest-only collateralized mortgage obligations [IO CMOs] and inverse IO securities. The negative result here was partially offset by favorable tactical mortgage basis positioning. Mortgage basis is a strategy that seeks to exploit the yield differential between 30-year agency pass-throughs and 30-year U.S. Treasuries.

What about contributors?

The fund’s active-currency strategies were the sole relative contributor over the past three months. During the quarter, the U.S. dollar strengthened versus almost all other major developed-market currencies. As a result, positive performance was driven by underweight exposure to the Canadian dollar, British pound sterling, the Australian dollar, and the euro.

What is your near-term outlook?

As the period concluded, the number of coronavirus infections was still rising worldwide. We think greater clarity regarding the trajectory of coronavirus infections and deaths is needed before the economic effects can be more clearly assessed. We will continue to monitor the impact of the pandemic on global supply chains and demand dynamics.

Given the overwhelming policy response and dramatic action by the Fed, we think U.S. Treasury yields will remain low across the curve for an extended period. We also believe low oil prices will exert significant disinflationary pressure on the economy.

We plan to take a cautious approach to increasing risk over the near term. That said, given the compelling valuations resulting from substantially wider yield spreads, we will seek to capitalize on attractive investment opportunities as the markets show signs of stabilizing.

How was the fund positioned as of March 31?

Prior to this period, we took steps to reduce risk in the portfolio on the view that volatility was likely to rise and valuations in certain sectors, particularly corporate credit, were becoming increasingly unattractive.

Reflecting the fund’s relatively cautious overall positioning, we continue to hold securities across sectors that have less price sensitivity to changes in yield spreads.

Within corporate credit, investment-grade bonds remained the fund’s largest allocation. We also have a small allocation to high yield.

In CMBS, we continue to have exposure to the A- and BBB-rated tranches of CMBX. In our view, hotel and retail properties will be negatively affected by coronavirus. However, the portfolio’s CMBS exposure is diversified by property type, and we believe CMBX continues to offer the fund a unique investment opportunity.

Within prepayment-sensitive areas of the market, we plan to maintain the fund’s positions in agency IO CMOs and inverse IOs backed by more seasoned loans. We believe this segment of these markets will have less sensitivity to refinancing risk in a low-interest-rate environment.

Highlights

Objective

The fund seeks high current income by investing principally in debt securities of sovereign and private issuers worldwide, including supranational issuers. Preservation of capital and long-term total return are secondary objectives, but only to the extent consistent with the objective of seeking high current income.

Strategy and process

  • Worldwide opportunities: The fund's managers search for attractive income securities from a broad range of sectors in U.S. and international markets.
  • Flexible risk allocations: The fund takes a unique approach to asset allocation, dynamically establishing diversified risk expo­sures rather than sector exposures.
  • Bottom-up approach: Security selection is the primary driver of returns, with sub-sector allocations and macro strategies also serving as potential alpha generators.

Fund price

Net asset value
(yesterday’s close)
$11.99
0.00% | $0.00
52-week high $12.63 (03/06/20)
52-week low $11.29 (03/20/20)
(Optional)

Yield

Distribution rate before sales charge
as of 05/22/20
2.00%
Distribution rate after sales charge
as of 05/22/20
2.00%
30-day SEC yield with subsidy
as of 04/30/20
1.95%
30-day SEC yield without subsidy
as of 04/30/20
1.91%

Consistency of positive performance over five years

Performance represents 5-year returns in rolling quarter-end periods since inception.

Performance shown does not reflect the effects of any sales charges. Note that returns of 0.00% are counted as positive periods. For complete fund performance, please click on the performance tab.

14.16%

Best 5-year annualized return

(for period ending 09/30/92)


0.22%

Worst 5-year annualized return

(for period ending 12/31/01)


5.82%

Average 5-year annualized return


Fund facts as of 04/30/20

Total net assets
$236.23M
Turnover (fiscal year end)
408%
Dividend frequency (view rate)
Monthly
Number of holdings
1103
Fiscal year-end
October
CUSIP / Fund code
74677Q604 / 1820
Inception date
10/04/05
Category
Taxable Income
Open to new investors
Ticker
PGGYX

Management team

Chief Investment Officer, Fixed Income
Portfolio Manager
Portfolio Manager
Portfolio Manager
Co-Head of Fixed Income
Co-Head of Fixed Income

Literature


China's economy braces for fallout from coronavirus
There will be some temporary disruption to economic activity in China and elsewhere from the coronavirus outbreak.
How the Japan election may influence global interest rates
The Japan election could have consequences for the future leadership of the Bank of Japan and the country's impact on global interest rate trends.

Performance

  • Total return (%) as of 03/31/20

  • Annual performance as of 03/31/20

Annualized Total return (%) as of 03/31/20

Annualized performance 1 yr. 3 yrs. 5 yrs. 10 yrs.
Before sales charge 0.27% 2.18% 1.72% 3.18%
After sales charge N/A N/A N/A N/A
Bloomberg Barclays Global Aggregate Bond Index 4.20%3.55%2.64%2.47%

Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results. Share price, principal value, and return will vary, and you may have a gain or loss when you sell your shares. Performance assumes reinvestment of distributions and does not account for taxes. Returns before sales charge do not reflect the current maximum sales charges as indicated below. Had the sales charge been reflected, returns would be lower. Returns at public offering price (after sales charge) for class A and class M shares reflect the current maximum initial sales charges of 5.75% and 3.50% for equity funds and 4.00% and 3.25% for income funds (2.25% for class A of Putnam Floating Rate Income Fund, Short-Term Municipal Income, Short Duration Bond Fund, and Fixed Income Absolute Return Fund), respectively. Class B share returns reflect the applicable contingent deferred sales charge (CDSC), which is 5% in the first year, declining to 1% in the sixth year, and is eliminated thereafter (except for Putnam Floating Rate Income Fund, Putnam Short Duration Bond Fund, Putnam Fixed Income Absolute Return Fund, and Putnam Short-Term Municipal Income Fund, which is 1% in the first year, declining to 0.5% in the second year, and is eliminated thereafter). Class C shares reflect a 1% CDSC the first year that is eliminated thereafter. Performance for class B, C, M, N, R, and Y shares prior to their inception is derived from the historical performance of class A shares, adjusted for the applicable sales charge (or CDSC) and, except for class Y shares, the higher operating expenses for such shares (with the exception of Putnam Tax-Free High Yield Fund and Putnam AMT-Free Municipal Fund, which are based on the historical performance of class B shares). Performance for class A, C, and Y shares of Putnam Mortgage Opportunities Fund before their inception is derived from the historical performance of class I shares, which have been adjusted for the applicable sales charge (or CDSC) and the higher operating expenses for such shares. Returns at public offering price (after sales charge) for class N shares reflect the current maximum initial sales charge of 1.50%. Class R5/R6 shares, available to qualified employee-benefit plans only, are sold without an initial sales charge and have no CDSC. Class Y shares are generally only available for corporate and institutional clients and have no initial sales charge. Performance for class R5/R6 shares before their inception are derived from the historical performance of class Y shares, which have not been adjusted for the lower expenses; had they, returns would have been higher. Class A shares of Putnam money market funds have no initial sales charge. For a portion of the period, some funds had expenses limitations or had been sold on a limited basis with limited assets and expenses, without which returns would be lower.

Performance snapshot

  Before sales charge After sales charge
1 mt. as of 04/30/20 2.66% -
YTD as of 05/22/20 -2.37% -

Yield

Distribution rate before sales charge
as of 05/22/20
2.00%
Distribution rate after sales charge
as of 05/22/20
2.00%
30-day SEC yield with subsidy
as of 04/30/20
1.95%
30-day SEC yield without subsidy
as of 04/30/20
1.91%

Risk-adjusted performance as of 04/30/20

Sharpe ratio (3 yrs.) 0.21
Information ratio (3 yrs.) -0.37

Volatility as of 04/30/20

Standard deviation (3 yrs.) 5.14%
Beta 1.09
R-squared 0.69

Lipper rankings as of 04/30/20

Time period Rank/Funds in category Percentile ranking
1 yr. 116/212 55%
3 yrs. 93/179 52%
5 yrs. 78/161 49%
10 yrs. 29/94 31%
Lipper category: Global Income Funds

Morningstar Ratings as of 04/30/20

Time period Funds in category Morningstar Rating
Overall 188
3 yrs. 188
5 yrs. 172
10 yrs. 103
Morningstar category: World Bond

Distributions

Record/Ex dividend date 04/28/20
Payable date 04/30/20
Income $0.02
Extra income --
Short-term cap. gain --
Long-term cap. gain --

Lipper rankings are based on total return without sales charge relative to all share classes of funds with similar objectives as determined by Lipper. Past performance is not indicative of future results.

The Morningstar RatingTM 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 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.

The up-market capture ratio is used to evaluate how well an investment manager performed relative to an index during periods when that index has risen. The ratio is calculated by dividing the manager’s returns by the returns of the index during the up-market, and multiplying that factor by 100. The down-market capture ratio is used to evaluate how well an investment manager performed relative to an index during periods when that index has dropped. The ratio is calculated by dividing the manager’s returns by the returns of the index during the down-market and multiplying that factor by 100.


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Holdings

Fnma Fn30 Tba Umbs 02.5000 05/01/2050 9.70%
Fnma Fn30 Tba Umbs 02.5000 06/01/2050 9.69%
Japan (10 Year Issue) 00.8000 09/20/2023 2.66%
Japan (30 Year Issue) 02.3000 03/20/2040 2.24%
Japan (20 Year Issue) 02.3000 06/20/2027 1.89%
Japan (10 Year Issue) 01.0000 09/20/2021 1.89%
European Investment Bank Gbp 05.6250 06/07/2032 1.63%
Uk Tsy 4 2060 Regs 04.0000 01/22/2060 1.41%
Fnma Fn30 Tba Umbs 04.0000 07/01/2050 1.35%
Japan (20 Year Issue) 02.2000 03/20/2031 1.30%
Top 10 holdings, percent of portfolio 33.76%



Fixed income statistics as of 04/30/20

Average effective maturity 9.24 yrs.
Average effective duration 6.46 yrs.
Average yield to maturity 3.60%
Average coupon 3.94%

Sector weightings as of 04/30/20

  Cash investments Non-cash investments Total portfolio
  Weight Spread duration Weight Spread duration Weight Spread duration
International Treasury/agency 31.16% 2.90 0.00% 0.00 31.16% 2.90
Investment-grade corporate bonds 25.67% 2.12 0.00% 0.00 25.67% 2.12
Agency pass-through 0.88% 0.04 22.06% 0.87 22.94% 0.91
Commercial MBS 10.07% 0.26 3.45% 0.05 13.52% 0.31
Residential MBS (non-agency) 8.30% 0.20 0.00% 0.00 8.30% 0.20
Emerging-market bonds 7.06% 0.39 0.00% 0.00 7.06% 0.39
Agency CMO 5.79% 0.18 0.04% 0.00 5.83% 0.18
Asset-backed securities (ABS) 2.42% 0.03 0.00% 0.00 2.42% 0.03
High-yield corporate bonds 1.33% 0.06 0.00% 0.00 1.33% 0.06
Interest rate swaps 0.00% 0.00 0.00% -0.33 0.00% -0.33
U.S. Treasury/agency 0.00% 0.00 0.00% 0.31 0.00% 0.31
Net cash 7.32% 0.00 0.00% 0.00 7.32% 0.00

Spread duration is displayed in years and reflects the contribution by sector to the portfolio's total spread duration with the exception of the Treasury and Interest-rate swap sectors where effective duration is displayed. Spread duration estimates the price sensitivity of a specific sector or asset class to a 100 basis-point movement, 1%, (either widening or narrowing) in its yield spread relative to Treasuries. Effective duration provides a measure of a portfolio's interest-rate sensitivity. The longer a portfolio's duration, the more sensitive the portfolio is to shifts in the interest rates. Allocations may not total 100% of net assets because the table includes the notional value of derivatives (the economic value for purposes of calculating periodic payment obligations), in addition to the market value of securities.

Maturity detail as of 04/30/20

0 - 1 yr. -11.33%
1 - 5 yrs. 60.25%
5 - 10 yrs. 30.89%
10 - 15 yrs. 4.46%
Over 15 yrs. 15.73%

Quality rating as of 04/30/20

AAA 38.49%
AA 10.27%
A 29.71%
BBB 29.22%
BB 3.72%
B 0.96%
CCC and Below 1.32%
Not Rated -13.69%

Fund characteristics will vary over time.

Due to rounding, percentages may not equal 100%.

Consider these risks before investing: International investing involves currency, economic, and political risks. Emerging-market securities carry illiquidity and volatility risks. Lower-rated bonds may offer higher yields in return for more risk. Funds that invest in government securities are not guaranteed. Mortgage-backed investments, unlike traditional debt investments, are subject to prepayment risk, which means that they may increase in value less than other bonds when interest rates decline and decline in value more than other bonds when interest rates rise. The fund concentrates on a limited group of industries and is non-diversified. Because the fund may invest in fewer issuers than a diversified fund, it is vulnerable to common economic forces and may result in greater losses and volatility. Bond investments are subject to interest-rate risk (the risk of bond prices falling if interest rates rise) and credit risk (the risk of an issuer defaulting on interest or principal payments). Interest-rate risk is generally greater for longer-term bonds, and credit risk is generally greater for below-investment-grade bonds. Risks associated with derivatives include increased investment exposure (which may be considered leverage) and, in the case of over-the-counter instruments, the potential inability to terminate or sell derivatives positions and the potential failure of the other party to the instrument to meet its obligations. Unlike bonds, funds that invest in bonds have fees and expenses. The value of investments in the fund's portfolio may fall or fail to rise over extended periods of time for a variety of reasons, including general economic, political or financial market conditions, investor sentiment and market perceptions, government actions, geopolitical events or changes, and factors related to a specific issuer, geography, industry or sector. These and other factors may lead to increased volatility and reduced liquidity in the fund's portfolio holdings. You can lose money by investing in the fund.

Credit qualities are shown as a percentage of the fund's net assets. A bond rated BBB or higher (A-3 or higher, for short-term debt) is considered investment grade. This chart reflects the highest security rating provided by one or more of Standard & Poor’s, Moody’s, and Fitch. To-be-announced (TBA) mortgage commitments, if any, are included based on their issuer ratings. Ratings may vary over time. Cash, derivative instruments, and net other assets are shown in the not-rated category. Payables and receivables for TBA mortgage commitments are included in the not-rated category and may result in negative weights. The fund itself has not been rated by an independent rating agency.

Country allocation as of 04/30/20

United States 57.21%
Japan 13.06%
France 3.89%
United Kingdom 3.11%
Italy 3.07%
Canada 3.01%
Spain 2.36%
Supra-Nation 1.87%
Mexico 1.18%
 
Other
11.24%
Switzerland 1.18%
Australia 0.82%
Belgium 0.82%
Brazil 0.79%
Uruguay 0.73%
Netherlands 0.62%
Indonesia 0.61%
Saudi Arabia 0.53%
Sweden 0.53%
Austria 0.45%
Dominican Republic 0.44%
Colombia 0.39%
China 0.38%
South Africa 0.38%
Kazakhstan 0.32%
Bermuda 0.29%
Malaysia 0.29%
Ivory Coast 0.28%
Peru 0.28%
Ireland 0.27%
New Zealand 0.23%
Poland 0.23%
Portugal 0.22%
Senegal 0.21%
Denmark 0.20%
Luxembourg 0.16%
Germany 0.10%
South Korea 0.02%
Singapore 0.01%
Thailand 0.01%
Russia -0.01%
Czech Republic -0.06%
European Community -0.21%
Norway -0.27%

Expenses

Expense ratio

Class A Class B Class C Class R Class R5 Class R6 Class Y
Total expense ratio 1.24% 1.99% 1.99% 1.49% 0.88% 0.81% 0.99%
What you pay† 1.22% 1.97% 1.97% 1.47% 0.86% 0.79% 0.97%

† The fund's expense ratio is taken from the most recent prospectus and is subject to change. What you pay reflects Putnam Management's decision to contractually limit expenses through 02/28/21

Sales charge

 Breakpoint Class A Class B Class C Class R Class R5 Class R6 Class Y
$0-$49,999 4.00% / 3.50% 0.00% / 4.00% 0.00% / 1.00% -- -- -- --
$50,000-$99,999 4.00% / 3.50% 0.00% / 4.00% 0.00% / 1.00% -- -- -- --
$100,000-$249,999 3.25% / 2.75% -- 0.00% / 1.00% -- -- -- --
$250,000-$499,999 2.50% / 2.00% -- 0.00% / 1.00% -- -- -- --
$500,000-$999,999 0.00% / 1.00% -- -- -- -- -- --
$1M-$4M 0.00% / 1.00% -- -- -- -- -- --
$4M-$50M 0.00% / 0.50% -- -- -- -- -- --
$50M+ 0.00% / 0.25% -- -- -- -- -- --

CDSC

  Class A (sales for $500,000+) Class B Class C Class R Class R5 Class R6 Class Y
0 to 9 mts. 1.00% 5.00% 1.00% -- -- -- --
9 to 12 mts. 1.00% 5.00% 1.00% -- -- -- --
2 yrs. 0.00% 4.00% 0.00% -- -- -- --
3 yrs. 0.00% 3.00% 0.00% -- -- -- --
4 yrs. 0.00% 3.00% 0.00% -- -- -- --
5 yrs. 0.00% 2.00% 0.00% -- -- -- --
6 yrs. 0.00% 1.00% 0.00% -- -- -- --
7+ yrs. 0.00% 0.00% 0.00% -- -- -- --

Trail commissions

  Class A Class B Class C Class R Class R5 Class R6 Class Y
  0.25% 0.25% 1.00% 0.50% 0.00% 0.00% 0.00%
  NA NA NA NA NA NA NA
  NA NA NA NA NA NA NA

For sales and trail commission information on purchases over $500,000 and participant-directed qualified retirement plans, see a Putnam fund prospectus and the statement of additional information.

The Bloomberg Barclays Global Aggregate Bond Index is an unmanaged index of global investment-grade fixed-income securities. You cannot invest directly in an index.

Consider these risks before investing: International investing involves currency, economic, and political risks. Emerging-market securities carry illiquidity and volatility risks. Lower-rated bonds may offer higher yields in return for more risk. Funds that invest in government securities are not guaranteed. Mortgage-backed investments, unlike traditional debt investments, are subject to prepayment risk, which means that they may increase in value less than other bonds when interest rates decline and decline in value more than other bonds when interest rates rise. The fund concentrates on a limited group of industries and is non-diversified. Because the fund may invest in fewer issuers than a diversified fund, it is vulnerable to common economic forces and may result in greater losses and volatility. Bond investments are subject to interest-rate risk (the risk of bond prices falling if interest rates rise) and credit risk (the risk of an issuer defaulting on interest or principal payments). Interest-rate risk is generally greater for longer-term bonds, and credit risk is generally greater for below-investment-grade bonds. Risks associated with derivatives include increased investment exposure (which may be considered leverage) and, in the case of over-the-counter instruments, the potential inability to terminate or sell derivatives positions and the potential failure of the other party to the instrument to meet its obligations. Unlike bonds, funds that invest in bonds have fees and expenses. The value of investments in the fund's portfolio may fall or fail to rise over extended periods of time for a variety of reasons, including general economic, political or financial market conditions, investor sentiment and market perceptions, government actions, geopolitical events or changes, and factors related to a specific issuer, geography, industry or sector. These and other factors may lead to increased volatility and reduced liquidity in the fund's portfolio holdings. You can lose money by investing in the fund.

Credit qualities are shown as a percentage of the fund's net assets. A bond rated BBB or higher (A-3 or higher, for short-term debt) is considered investment grade. This chart reflects the highest security rating provided by one or more of Standard & Poor’s, Moody’s, and Fitch. To-be-announced (TBA) mortgage commitments, if any, are included based on their issuer ratings. Ratings may vary over time. Cash, derivative instruments, and net other assets are shown in the not-rated category. Payables and receivables for TBA mortgage commitments are included in the not-rated category and may result in negative weights. The fund itself has not been rated by an independent rating agency.