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 -0.63 yrs. (out of 270 in category)
Floating Rate Income Fund 0.10 yrs. (out of 232 in category)
Global Income Trust 5.46 yrs. (out of 181 in category)
High Yield Fund 3.23 yrs. (out of 630 in category)
Income Fund 5.14 yrs. (out of 540 in category)
Short Duration Bond Fund 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.