Diversified Income Trust (Class A)  (PDINX)

Offering a diversified portfolio of income opportunities since 1988

Diversified Income Trust received an  Overall Morningstar Rating  of  

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

Yesterday’s close 52-week high 52-week low
Net asset value $7.03
0.00% | $0.00
$7.03
11/14/19
$6.61
12/24/18
Historical fund price

Fund facts as of 10/31/19

Total net assets
$4,283.31M
Turnover (fiscal year end)
580%
Dividend frequency (view rate)
Monthly
Number of holdings
1752
Fiscal year-end
September
CUSIP / Fund code
746704105 / 0022
Inception date
10/03/88
Class A  
Category
Fixed Income
Open to new investors
Ticker
PDINX

Management team

Chief Investment Officer, Fixed Income
Portfolio Manager
Portfolio Manager
Portfolio Manager
Co-Head of Fixed Income
Co-Head of Fixed Income


Manager commentary | Q3 2019

Why corporate credit performed well

Bill Kohli, Chief Investment Officer, Fixed Income, identifies the securities that drove recent performance in non-benchmark strategies.


Literature


Why Brazil's crisis creates new concerns
The revelations of May 17 may pose a threat to President Temer's administration, and therefore a threat to Brazil's short- and medium-term economic outlook.
See the dove in the Fed's dot plot
The market sees a more hawkish Fed in the December 2016 rate hike, but we see see signs of a dove in the Fed's dot plot.

Performance

  • Total return (%) as of 09/30/19

  • Annual performance as of 09/30/19

Annualized Total return (%) as of 09/30/19

Annualized performance 1 yr. 3 yrs. 5 yrs. 10 yrs.
Before sales charge 5.00% 5.92% 2.66% 5.33%
After sales charge 0.80% 4.49% 1.83% 4.90%
ICE BofAML U.S. Treasury Bill Index 2.46%1.54%1.00%0.56%

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. Returns before sales charge do not reflect the current maximum sales charges as indicated below. Had the sales charge been reflected, returns would be lower. Returns at public offering price (after sales charge) for class A and class M shares reflect the current maximum initial sales charges of 5.75% and 3.50% for equity funds and Putnam Multi-Asset Absolute Return Fund, 4.00% and 3.25% for income funds and 2.25% and 0.75% for Putnam Floating Rate Income Fund, Short-Term Municipal Income, Short Duration Bond Fund, and Fixed Income Absolute Return Fund, respectively. Class B share returns reflect the applicable contingent deferred sales charge (CDSC), which is 5% in the first year, declining to 1% in the sixth year, and is eliminated thereafter (except for Putnam Floating Rate Income Fund, which is 3% in the first year, declining to 1% in the fourth year, and is eliminated thereafter). Class C shares reflect 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, adjusted for the applicable sales charge (or CDSC) and, except for class Y shares, the higher operating expenses for such shares (with the exception of Putnam Tax-Free High Yield Fund and Putnam AMT-Free Municipal Fund, which are based on the historical performance of class B shares). Returns at public offering price (after sales charge) for class N shares reflect the current maximum initial sales charge of 1.50%. Class R5/R6 shares, 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 R5/R6 shares before their inception are derived from the historical performance of class Y shares, which have not been adjusted for the lower expenses; had they, returns would have been higher. Class A and M shares of Putnam money market funds have no initial sales charge. For a portion of the periods, some funds had expense limitations or had been sold on a limited basis with limited assets and expenses, without which returns would be lower.

Performance snapshot

  Before sales charge After sales charge
1 mt. as of 10/31/19 0.33% -3.68%
YTD as of 11/14/19 10.12% 5.72%

Yield

Distribution rate before sales charge
as of 11/14/19
3.93%
Distribution rate after sales charge
as of 11/14/19
3.77%
30-day SEC yield as of 10/31/19
(after sales charge)
3.53%

Volatility as of 09/30/19

Standard deviation (3 yrs.) 3.28%

Lipper rankings as of 09/30/19

Time period Rank/Funds in category Percentile ranking
1 yr. 52/130 40%
3 yrs. 8/122 7%
5 yrs. 40/85 47%
10 yrs. 4/23 17%
Lipper category: Alternative Credit Focus Funds

Morningstar Ratings as of 09/30/19

Time period Funds in category Morningstar Rating
Overall 279
3 yrs. 279
5 yrs. 213
10 yrs. 74
Morningstar category: Nontraditional Bond

Distributions

Record/Ex dividend date 10/17/19
Payable date 10/21/19
Income $0.023
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 03.0000 10/01/2049 17.90%
Fnma Fn30 Tba Umbs 03.5000 10/01/2049 11.08%
Fnma Fn30 Tba Umbs 04.0000 10/01/2049 8.91%
Fnma Fn30 Tba Umbs 02.5000 11/01/2049 2.28%
Gnma Gii30 Tba 04.5000 10/01/2049 1.52%
Gnma Gii30 Tba 04.0000 10/01/2049 0.97%
Petrobras Global Finance Usd 06.1250 01/17/2022 0.61%
Cas 2015-C04 1m2 07.7184 04/25/2028 0.59%
Fnma Fn30 Tba Umbs 05.5000 10/01/2049 0.58%
Republic Of Indonesia Regs 04.7500 01/08/2026 0.55%
Top 10 holdings, percent of portfolio 44.99%



Fixed income statistics as of 09/30/19

Average effective maturity 4.28 yrs.
Average effective duration 1.10 yrs.
Average yield to maturity 4.70%
Average coupon 5.28%

Maturity detail as of 09/30/19

0 - 1 yr. -11.20%
1 - 5 yrs. 60.28%
5 - 10 yrs. 47.18%
10 - 15 yrs. 2.54%
Over 15 yrs. 1.20%

Quality rating as of 09/30/19

AAA 67.34%
AA 1.21%
A 12.47%
BBB 9.64%
BB 22.08%
B 9.45%
CCC and Below 5.22%
Not Rated -27.41%

Fund characteristics will vary over time.

Due to rounding, percentages may not equal 100%.

Consider these risks before investing: Emerging-market securities carry illiquidity and volatility risks. Lower-rated bonds may offer higher yields in return for more risk. Funds that invest in government securities are not guaranteed. Mortgage-backed investments, unlike traditional debt investments, are subject to prepayment risk, which means that they may increase in value less than other bonds when interest rates decline and decline in value more than other bonds when interest rates rise. 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. 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. 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. International investing involves currency, economic, and political risks. These and other factors may lead to increased volatility and reduced liquidity in the fund's portfolio holdings. You can lose money by investing in the fund.

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. To-be-announced (TBA) mortgage commitments, if any, are included based on their issuer ratings. Ratings may vary over time. Cash, derivative instruments, and net other assets are shown in the not-rated category. Payables and receivables for TBA mortgage commitments are included in the not-rated category and may result in negative weights. The fund itself has not been rated by an independent rating agency.

Country allocation as of 09/30/19

United States 84.68%
Greece 3.73%
Brazil 2.00%
Mexico 1.22%
Argentina 1.21%
Indonesia 1.21%
Ivory Coast 0.81%
Bermuda 0.76%
Canada 0.76%
 
Other
3.62%
Dominican Republic 0.74%
Egypt 0.52%
United Kingdom 0.36%
Ireland 0.33%
Russia 0.31%
Turkey 0.28%
France 0.23%
Luxembourg 0.21%
Switzerland 0.21%
Sweden 0.17%
South Africa 0.16%
Venezuela 0.16%
Israel 0.15%
Norway 0.15%
Netherlands 0.13%
Senegal 0.12%
New Zealand 0.11%
El Salvador 0.10%
Germany 0.10%
Cayman Islands 0.09%
Jamaica 0.05%
Italy 0.04%
South Korea 0.04%
Spain 0.03%
Vietnam 0.02%
China 0.01%
India -0.01%
Australia -0.03%
Taiwan -0.03%
Japan -0.11%
Czech Republic -0.14%
European Community -0.88%

Expenses

Expense ratio

Class A Class B Class C Class M Class R Class R6 Class Y
Total expense ratio 0.98% 1.73% 1.73% 1.23% 1.23% 0.64% 0.73%
What you pay 0.98% 1.73% 1.73% 1.23% 1.23% 0.64% 0.73%

Sales charge

 Breakpoint Class A Class B Class C Class M Class R Class R6 Class Y
$0-$49,999 4.00% / 3.50% 0.00% / 4.00% 0.00% / 1.00% 3.25% / 3.00% -- -- --
$50,000-$99,999 4.00% / 3.50% 0.00% / 4.00% 0.00% / 1.00% 2.25% / 2.00% -- -- --
$100,000-$249,999 3.25% / 2.75% -- 0.00% / 1.00% 1.25% / 1.00% -- -- --
$250,000-$499,999 2.50% / 2.00% -- 0.00% / 1.00% 1.00% / 1.00% -- -- --
$500,000-$999,999 0.00% / 1.00% -- -- -- -- -- --
$1M-$4M 0.00% / 1.00% -- -- -- -- -- --
$4M-$50M 0.00% / 0.50% -- -- -- -- -- --
$50M+ 0.00% / 0.25% -- -- -- -- -- --

CDSC

  Class A (sales for $500,000+) Class B Class C Class M Class R Class R6 Class Y
0 to 9 mts. 1.00% 5.00% 1.00% -- -- -- --
9 to 12 mts. 1.00% 5.00% 1.00% -- -- -- --
2 yrs. 0.00% 4.00% 0.00% -- -- -- --
3 yrs. 0.00% 3.00% 0.00% -- -- -- --
4 yrs. 0.00% 3.00% 0.00% -- -- -- --
5 yrs. 0.00% 2.00% 0.00% -- -- -- --
6 yrs. 0.00% 1.00% 0.00% -- -- -- --
7+ yrs. 0.00% 0.00% 0.00% -- -- -- --

Trail commissions

  Class A Class B Class C Class M Class R Class R6 Class Y
  0.25% 0.25% 1.00% 0.40% 0.50% 0.00% 0.00%
  NA NA NA NA NA NA NA
  NA NA NA NA NA NA NA

For sales and trail commission information on purchases over $500,000 and participant-directed qualified retirement plans, see a Putnam fund prospectus and the statement of additional information.

The ICE BofAML U.S. Treasury Bill Index is an unmanaged index that tracks the performance of U.S. dollar denominated U.S. Treasury Bills publicly issued in the U.S. domestic market. Qualifying securities must have a remaining term of at least one month to final maturity and a minimum amount outstanding of $1 billion. You cannot invest directly in an index.

Consider these risks before investing: Emerging-market securities carry illiquidity and volatility risks. Lower-rated bonds may offer higher yields in return for more risk. Funds that invest in government securities are not guaranteed. Mortgage-backed investments, unlike traditional debt investments, are subject to prepayment risk, which means that they may increase in value less than other bonds when interest rates decline and decline in value more than other bonds when interest rates rise. 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. 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. 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. International investing involves currency, economic, and political risks. These and other factors may lead to increased volatility and reduced liquidity in the fund's portfolio holdings. You can lose money by investing in the fund.

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. To-be-announced (TBA) mortgage commitments, if any, are included based on their issuer ratings. Ratings may vary over time. Cash, derivative instruments, and net other assets are shown in the not-rated category. Payables and receivables for TBA mortgage commitments are included in the not-rated category and may result in negative weights. The fund itself has not been rated by an independent rating agency.