Putnam Capital Manager

Putnam High Yield Subaccount

The subaccount seeks high current income. Capital growth is a secondary goal when consistent with achieving high current income.

Fund description

The subaccount seeks high current income by investing principally in corporate bonds rated below investment grade. It offers the potential for higher income than investment-grade bond funds in exchange for the increased risk that accompanies high-yield bond investments. The subaccount is diversified across a range of industries and the management team conducts intensive research to select companies that appear capable of servicing their outstanding debt obligations.

Sales story

Seeking a high level of income for investorsIncome-focused: The portfolio managers strive for a higher level of income than most bonds offer by investing in higher-yielding, lower rated corporate bonds.Focus on performance: The managers can invest across a range of industries and companies, and can adjust the fund's holdings to capitalize on market opportunities.Leading research: The fund's managers, supported by Putnam's fixed-income research division, analyze a range of bonds to build a diversified portfolio.

Management team

Lipper ranking ‡ as of 04/30/20

Category: High Yield Funds

  Percentile ranking Rank/Funds in category
10 yrs. 65% 48/73
1 yr. 57% 59/104
3 yrs. 62% 63/102
5 yrs. 65% 64/98

Risk characteristics as of 04/30/20

Avg. Eff. Maturity 5.21
Avg. Eff. Duration 3.89
Avg. Coupon 5.80
Avg. Yield to Maturity 6.86
Alpha (%) --
Beta 0.97
R squared 0.99
Standard deviation (3 yrs.) 8.58

Maturity details

0 to 1 yr. 6.80%
1 to 5 yrs. 43.11%
5 to 10 yrs. 45.38%
10 to 15 yrs. 2.81%
Over 15 yrs. 1.90%

Quality ratings

A 0.16%
BBB 13.91%
BB 40.97%
B 31.03%
CCC and Below 8.77%
Not Rated 1.55%
Net cash 3.61%

‡ Lipper is an industry research firm whose rankings are based on total return performance, vary over time, and do not reflect the effects of sales charges. Past performance is not indicative of future results.

Quick facts as of 04/30/20

Fiscal Year End December
Asset Class Putnam Capital Manager
Subaccount Status Open to new investors
Number of issues 529
Turnover (fiscal year end) 37%
Net Assets $154M
Inception Date 02/01/88

Holdings

Charter Communications 2.28%
Sprint Communications 1.80%
Bausch Health 1.64%
Tenet Healthcare 1.63%
T-Mobile 1.45%
Altice USA 1.28%
Ally Financial 1.25%
Altice Numericable 1.17%
Community Health Systems 1.12%
Transdigm 0.95%
Top 10 holdings, total: 14.57%


Top 10 holdings as of 04/30/20
1: Charter Communications 2.28%
2: Sprint Communications 1.80%
3: Bausch Health 1.64%
4: Tenet Healthcare 1.63%
5: T-Mobile 1.45%
6: Altice USA 1.28%
7: Ally Financial 1.25%
8: Altice Numericable 1.17%
9: Community Health Systems 1.12%
10: Transdigm 0.95%
Holdings represent 14.57% of portfolio
Top 10 holdings as of 03/31/20
1: Charter Communications 2.30%
2: Sprint Communications 2.04%
3: Bausch Health 1.66%
4: Tenet Healthcare 1.59%
5: Altice USA 1.28%
6: Ally Financial 1.26%
7: Community Health Systems 1.18%
8: T-Mobile 1.06%
9: Nrg Energy 0.94%
10: Transdigm 0.93%
Holdings represent 14.24% of portfolio
Top 10 holdings as of 02/29/20
1: Charter Communications 1.94%
2: Sprint Communications 1.94%
3: Tenet Healthcare 1.48%
4: Ally Financial 1.35%
5: Bausch Health 1.30%
6: Community Health Systems 1.12%
7: Altice USA 0.98%
8: Transdigm 0.94%
9: T-Mobile 0.94%
10: GFL Environmental 0.91%
Holdings represent 12.90% of portfolio
Top 10 holdings as of 01/31/20
1: Charter Communications 1.93%
2: Sprint Communications 1.79%
3: Bausch Health 1.67%
4: Tenet Healthcare 1.49%
5: Ally Financial 1.37%
6: Altice USA 1.20%
7: Community Health Systems 1.08%
8: GFL Environmental 1.02%
9: Transdigm 0.97%
10: ARD Holdings 0.96%
Holdings represent 13.48% of portfolio


Sector Weightings as of 04/30/20

Cash Investment Non-Cash Investment Total Portfolio
Weight Spread Duration Weight Spread Duration Weight Spread Duration
High-yield corporate bonds 74.12% 3.07 0.00% 0.00 74.12% 3.07
Investment-grade corporate bonds 12.87% 0.72 0.00% 0.00 12.87% 0.72
Bank loans 5.30% 0.21 0.00% 0.00 5.30% 0.21
Net cash 3.61% 0.00 0.00% 0.00 3.61% 0.00
Convertible securities 1.57% 0.02 0.00% 0.00 1.57% 0.02
Emerging-market bonds 1.35% 0.07 0.00% 0.00 1.35% 0.07
Equity investments 0.67% 0.00 0.00% 0.00 0.67% 0.00
International Treasury/agency 0.51% 0.03 0.00% 0.00 0.51% 0.03

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 certain derivatives (the economic value for purposes of calculating periodic payment obligations), in addition to the market value of securities.

Consider these risks before investing: 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. Lower-rated bonds may offer higher yields in return for more risk. 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 (a significant part of the fund’s investments). 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. You can lose money by investing in the fund. Variable annuities are long-term investments designed for retirement purposes. Withdrawals prior to age 59 1/2 may be subject to a 10% IRS penalty.

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. Ratings and portfolio credit quality will vary over time. Net cash, if any, represent the market value weights of cash, derivatives, and short-term securities in the portfolio. The fund itself has not been rated by an independent rating agency.

Top Industry Sectors as of 04/30/20

Consumer cyclicals 21.92%
Communication services 12.65%
Basic materials 12.56%
Financials 9.72%
Health care 8.69%
Capital goods 8.35%
Consumer staples 7.25%
Energy 6.61%
Technology 4.97%
 
Other
7.28%
Net Cash 3.61%
Utilities 3.20%
Transportation 0.29%
Conglomerates 0.18%

Country Allocation as of 04/30/20

United States 83.89%
Canada 5.18%
Luxembourg 2.11%
United Kingdom 2.06%
Netherlands 1.53%
France 1.39%
Ireland 1.19%
Switzerland 0.85%
Israel 0.74%
 
Other
1.06%
Mexico 0.48%
Norway 0.39%
Indonesia 0.12%
Cayman Islands 0.07%