Active Income

Diversified Income Trust (Class Y)  (PDVYX)

Offering a diversified portfolio of income opportunities since 1988

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Manager commentary: Risk assets, rate strategy struggle amid uncertain backdrop
Diversified Income Trust (PDVYX)

Highlights

Objective

The fund seeks as high a level of current income as Putnam management believes is consistent with preservation of capital.

Strategy and process

  • Broad diversification The fund seeks multiple sources of return outside the constraints of its benchmark, investing across traditional and alternative bond markets.
  • Flexible risk allocations The fund takes a unique approach to asset allocation, dynamically establishing diversified risk exposures rather than sector exposures.
  • Active duration management As the fund's duration is independent of any index, the fund employs strategies that seek to reduce interest-rate risk.

Fund price

Net asset value
(yesterday’s close)		 $6.22
0.00% | $0.00
52-week high $6.89 (02/16/21)
52-week low $6.22 (10/26/21)
(Optional)

Yield

Distribution rate before sales charge
as of 10/26/21		 3.86%
Distribution rate after sales charge
as of 10/26/21		 3.86%
30-day SEC yield as of 09/30/21 4.13%

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.

16.24%

Best 5-year annualized return

(for period ending 12/31/13)

-4.32%

Worst 5-year annualized return

(for period ending 12/31/08)

5.91%

Average 5-year annualized return

Fund facts as of 09/30/21

Total net assets
$2,480.05M
Turnover (fiscal year end)
1,110%
Dividend frequency (view rate)
Monthly
Number of holdings
1888
Fiscal year-end
September
CUSIP / Fund code
746704501 / 1822
Inception date
07/01/96
Category
Taxable Income
Open to new investors
Ticker
PDVYX

Management team

Michael V. Salm

Chief Investment Officer, Fixed Income

Michael J. Atkin

Head of Macro and Sovereign Credit

Albert Chan, CFA

Head of Portfolio Construction

Robert L. Davis, CFA

Portfolio Manager

Brett S. Kozlowski, CFA

Co-Head of Structured Credit

Paul D. Scanlon, CFA

Co-Head of Corporate and Tax-exempt Credit

Literature

Regulatory storm sweeps across China
President Xi Jinping's "common prosperity" campaign to address China's wealth gap has converged with the regulatory crackdowns.
Markets see living with Covid-19 as the new normal
Global financial markets might be pricing in a “living with the virus” environment and are adjusting to a lower growth path.
Consider stable value funds for DC plans
For retirement plan sponsors, choosing a capital preservation option can be challenging. We offer insights about stable value funds and their performance.

Performance

  • Total return (%) as of 09/30/21

  • Annual performance as of 09/30/21

Annualized Total return (%) as of 09/30/21

Annualized performance 1 yr. 3 yrs. 5 yrs. 10 yrs.
Before sales charge 3.08% 1.52% 3.51% 3.93%
After sales charge N/A N/A N/A N/A
ICE BofA U.S. Treasury Bill Index 0.07%1.24%1.18%0.65%

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. The "before sales charge" performance does not reflect the current maximum sales charges, which we explain below. If performance did reflect the charges, it would be lower. The "after sales charge" performance (or returns at public offering price) varies by share class and fund. For class A and class M shares, the current maximum initial sales charges are 5.75% and 3.50% for equity funds and 4.00% and 3.25% for income funds, respectively (with these exceptions: 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). Class B share performance reflects the applicable contingent deferred sales charge (CDSC), which is 5% in the first year, declines 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; for these funds, the CDSC is 1% in the first year, declines to 0.5% in the second year, and is eliminated thereafter). Class C share performance reflects 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 by adjusting for the applicable sales charge (or CDSC) and, except for class Y shares, the higher operating expenses for such shares (note, for two funds — Putnam Tax-Free High Yield Fund and Putnam Strategic Intermediate Municipal Fund performance prior to inception is based on the historical performance of class B shares). Performance for class A, C, R6, and Y shares of Putnam Mortgage Opportunities Fund before their inception is derived from the historical performance of class I shares, which has been adjusted for the applicable sales charge (or CDSC) and the higher operating expenses for such shares. The "after sales charge" performance (at public offering price) for class N shares reflects the current maximum initial sales charge of 1.50%. Class R, R3, R4, R5, and R6 shares, which are 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 R3 and R4 shares prior to their inception is derived from the historical performance of class Y shares by adjusting for the higher operating expenses for such shares. Performance for class R5 shares before their inception is derived from the historical performance of class Y shares, which has not been adjusted for the lower expenses; had it been adjusted, performance would be higher (with the exception of the RetirementReady Maturity, 2025, 2030, 2035, and 2040 Funds, for which performance is derived from the historical performance of class R6 shares and has been adjusted for the higher operating expenses for such shares; and the RetirementReady 2045, 2050, 2055, and 2060 Funds, for which performance is derived from the historical performance of class R6 shares and has not been adjusted for the lower expenses; had it been adjusted, performance would be higher). Performance for class R6 shares before their inception is derived from the historical performance of class Y shares, which has not been adjusted for the lower operating expenses; had it been adjusted, performance would be higher. For a portion of the period, some funds had expenses limitations or had been sold on a limited basis with limited assets and expenses. Had these limits not been in place, performance would be lower.

Performance snapshot

  Before sales charge After sales charge
1 mt. as of 09/30/21 -0.63% -
YTD as of 10/26/21 -5.12% -

Yield

Distribution rate before sales charge
as of 10/26/21		 3.86%
Distribution rate after sales charge
as of 10/26/21		 3.86%
30-day SEC yield as of 09/30/21 4.13%

Volatility as of 09/30/21

Standard deviation (3 yrs.) 8.99%

Fixed income statistics as of 09/30/21

Average effective duration 0.31 yrs.

Lipper rankings as of 09/30/21

Time period Rank/Funds in category Percentile ranking
1 yr. 86/112 77%
3 yrs. 87/102 85%
5 yrs. 50/97 52%
10 yrs. 2/28 7%
Lipper category: Alternative Credit Focus Funds

Morningstar Ratings™ as of 09/30/21

Time period Funds in category Morningstar Rating™
Overall 310
3 yrs. 310
5 yrs. 282
10 yrs. 118
Morningstar category: Nontraditional Bond

Distributions

Record/Ex dividend date 10/18/21
Payable date 10/20/21
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 04.0000 10/01/2051 18.58%
Fnma Fn30 Tba Umbs 03.5000 10/01/2051 16.68%
Fnma Fn30 Tba Umbs 03.0000 10/01/2051 6.41%
Fnma Fn30 Tba Umbs 03.0000 11/01/2051 1.56%
Fnma Fn30 Tba Umbs 05.5000 10/01/2051 1.04%
Republic Of Senegal Regs 06.7500 03/13/2048 0.81%
Cas 2017-C02 2b1 05.5860 09/25/2029 0.80%
Ivory Coast Regs 06.1250 06/15/2033 0.77%
Cas 2016-C02 1b 12.3360 09/25/2028 0.66%
Fnma Fn30 Tba Umbs 04.5000 10/01/2051 0.65%
Top 10 holdings, percent of portfolio 47.96%