European High Yield
September 30, 1999
ICE BofAML European Currency Developed Markets HY Constrained Index
Total strategy assets†
(as of September 2019)
- Separate account
We believe outperformance is driven by:
- Pursuing capital appreciation in credits with improving fundamentals
- Skeptically investing in deteriorating or stagnant credits based on rigorous scenario analysis
- Actively managing the top-down portfolio profile based on market outlook
- Selecting issuers driven by bottom-up fundamental credit analysis
- Adhering consistently to a risk-controlled process
We see multiple opportunities to pursue strong performance:
- Wide range of issuers of various size, complexity, and geography
- Capital structure complexity: senior, subordinate, and secured bonds as well as loans, convertibles, hybrids and preferred, and equity securities
- Dislocations between cash instruments and derivatives
- Varied security types including bullet maturities, floating rate notes, call/put option structures, covered bonds, etc.
- Tracking error will typically range between 2.0% and 3.0%
- Typical duration range of +/- 1 year
*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.
Annualized composite performance (%) as of September 30, 2019
|MTD||QTD||YTD||1 Year||3 Years||5 Years||10 Years|
|European High Yield (gross)||0.09%||1.44%||10.37%||6.37%||5.33%||5.15%||8.21%|
|European High Yield (net)||0.04%||1.27%||9.83%||5.68%||4.64%||4.46%||7.51%|
|ICE BofAML European Currency Developed Markets HY Constrained Index||-0.11%||1.39%||9.37%||5.28%||4.58%||4.64%||8.23%|
Calendar Year Composite Performance (%) as of September 30, 2019
|European High Yield (gross)||-3.45%||7.15%||7.74%||3.99%||2.88%||11.35%||25.92%||-3.54%||17.32%||56.30%|
|European High Yield (net)||-4.08%||6.46%||7.04%||3.31%||2.21%||10.63%||25.10%||-4.17%||16.55%||55.32%|
|ICE BofAML European Currency Developed Markets HY Constrained Index||-3.76%||6.77%||9.15%||1.49%||5.33%||10.21%||28.56%||-2.55%||15.59%||79.96%|
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 Euros.
Tracking error targets are based on a number of assumptions and are subject to revision and may change materially with changes in underlying assumptions. While the investment manager considers tracking error in the investment process, the strategy's composition and performance may vary substantially from that of the target. Achieved tracking error is the result of many factors, including market conditions and there can be no assurance that the tracking error actually reflected in client portfolios will be at levels indicated in the investment objectives.
The Putnam Investments European High Yield Composite (the "Composite") seeks to achieve above-average total returns by investing primarily in high-yielding, non-investment-grade debt obligations issued by European corporations. The composite's benchmark is the ICE Bank of America (BofA) Merrill Lynch European Currency Developed Markets High Yield Constrained Index. Accounts in composite may have other different, but largely similar benchmarks. The Composite comprises all fully discretionary accounts managed by Putnam Investments in this investment style. The Composite creation date was May 13, 2003.
The ICE BofA Merrill Lynch European Currency Developed Markets High Yield Constrained Index contains all securities in the ICE BofA Merrill Lynch European Currency High Yield Constrained Index from developed markets countries, but caps issuer exposure at 3%. Developed markets is defined as an FX-G10 member, a Western European nation, or territory of the US or a Western European nation. The FX-G10 includes all Euro members, the US, Japan, the UK, Canada, Australia, New Zealand, Switzerland, Norway, and Sweden. Prior to May 1, 2017, the composite's benchmark was the BofA Merrill Lynch European Currency High Yield Constrained Index. The ICE BofA Merrill Lynch European Currency High Yield Constrained Index tracks the performance of EUR and GBP denominated below investment grade corporate debt publicly issued in the eurobond, sterling domestic or euro domestic markets. Qualifying securities must have a below investment grade rating (based on an average of Moody's, S&P, and Fitch) and an investment grade rated country risk (based on an average of Moody's, S&P, and Fitch foreign currency long term sovereign debt ratings).
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.