Core Plus Fixed Income

The strategy seeks to outperform the benchmark by 100-200 basis points over a full market cycle. Active risk will be managed commensurate to the strategy's performance goal with a target information ratio (measure of excess return divided by risk) of 0.5 to 1.0.*

Product highlights

Inception date

June 30, 1991

Benchmark

BBG Barclays U.S. Aggregate Bond Index

Total strategy assets

$3.3B

(as of September 2019)

Investment vehicles

  • Separate account
  • The strategy mandate allows the managers to pursue investment opportunities throughout the U.S. fixed-income universe, creating a diversified portfolio across sectors, risk factors and investment horizons
  • May hold securities from a broad range of sectors within fixed income including credit (investment grade, high yield, bank loans, convertible bonds), securitized debt (MBS, CMBS, CMO, ABS), and government debt (treasuries and agencies)
  • The emphasis on portfolio construction is on making security selection the primary driver of returns, with sub-sector allocations and macro strategies (such as term structure decisions) also serving as potential alpha generators

*No assurance can be given that the investment objective will be achieved or that an investor will receive a return of all or part of his or her initial investment. Actual results could be materially different from the stated goals. Investors should carefully consider the risks involved before deciding to invest. See the composite disclosures for a summary of risk considerations. As with any investment, there is a potential for profit as well as the possibility of loss.

Assets may include accounts that are not reflected in the composite.

Investment team

Performance

Annualized composite performance (%) as of September 30, 2019

  MTD QTD YTD 1 Year 3 Years 5 Years 10 Years
Core Plus Fixed Income (gross) -0.48% 3.07% 11.36% 11.94% 5.82% 4.27% 6.32%
Core Plus Fixed Income (net) -0.51% 2.96% 11.04% 11.50% 5.41% 3.86% 5.89%
BBG Barclays U.S. Aggregate Bond Index -0.53% 2.27% 8.52% 10.30% 2.92% 3.38% 3.75%

Calendar Year Composite Performance (%) as of September 30, 2019

  2018 2017 2016 2015 2014 2013 2012 2011 2010 2009
Core Plus Fixed Income (gross) 1.28% 6.74% 2.92% -0.86% 6.26% 2.90% 11.57% 5.97% 10.06% 47.54%
Core Plus Fixed Income (net) 0.89% 6.32% 2.52% -1.26% 5.83% 2.49% 11.12% 5.55% 9.57% 46.58%
BBG Barclays U.S. Aggregate Bond Index 0.01% 3.54% 2.65% 0.55% 5.97% -2.02% 4.22% 7.84% 6.54% 5.93%

Past performance is not a guarantee of future results. An investment in this strategy could lose value. Most recent month-end performance is preliminary. Returns are subject to change. Please refer to the composite report for additional important information regarding performance disclosures and investments risks.

Periods less than one year are not annualized. Performance is stated in U.S. dollars.

Literature

Important disclosures

The excess return objective is based on managing the strategy to a level of tracking error (typically 2%-4%) commensurate with the target return. Return expectations are derived using conservative cash flow assumptions for asset classes typically represented in the portfolio, including corporate credit, mortgage credit, prepayment, and term structure strategies. Target returns represent results of statistical modeling and are provided for informational purposes only. Targets are presented for the purpose of communicating the intended risk profile of the investment opportunities that Putnam will pursue and are not intended to be projections of performance. Target returns are based on a number of assumptions, are subject to significant revision and may change materially with changes in underlying observations.

The Putnam Investments Core Plus Fixed Income Composite (the "Composite") seeks above-average total returns relative to its benchmark, the Bloomberg Barclays U.S. Aggregate Bond Index, through an actively managed, broadly diversified portfolio. This broad market strategy seeks to utilize the full opportunity set within the fixed income universe and may hold securities from a broad range of sectors, including credit (investment grade, high yield, bank loans, non-dollar, convertible bonds, and structured credit), securitized debt (MBS, CMBS, CMO, and ABS) and sovereign debt (developed and emerging). Portfolios in the Composite may have different but largely similar benchmarks and/or they may invest in some out of index and international, non-USD securities. The approach focuses on security selection and sector allocation while limiting interest-rate exposure relative to the benchmark. The Composite includes all fully discretionary accounts managed by Putnam Investments in this style. The Composite creation date was January 21, 1997.

The Bloomberg Barclays U.S. Aggregate Bond Index is an unmanaged index of U.S. investment-grade fixed-income securities.  Indexes are rebalanced monthly by market capitalization.

 

Composites may include portfolios with certain existing investment restrictions that the Firm believes do not materially impact the investment strategy. Benchmarks are generally taken from published sources and may have different calculation methodologies, pricing times, and/or foreign-exchange sources from the composite. The effect of those differences is generally deemed to be immaterial. The securities holdings of the Composite may differ materially from those of the index used for comparative purposes. Composites and benchmarks include the reinvestment of dividends and other earnings. Indexes are unmanaged and do not incur expenses. You cannot invest directly in an index. Gross-of-fees returns do not include the deduction of management fees and other expenses that may be incurred in managing an investment account. A portfolio's return will be reduced by advisory and other fees. Net-of-fee returns are calculated using a model fee. For the applicable time periods, net-of-fees returns reflect either the deduction of the highest management fee that is paid by a portfolio in the Composite during the performance period, applied on a monthly basis, or the deduction of the highest applicable management fee in effect during the performance period that would be charged based on the fee schedule appropriate to this mandate, without the benefit of breakpoints, applied on a monthly basis, whichever is higher. Net-of-fee calculation methodology may change over time. Actual investment advisory fees incurred by clients are typically negotiated on an individual basis and may vary depending upon, among other things, the applicable fee schedule and portfolio size. Our standard fee schedules are available upon request.