Floating Rate Income Fund (Class Y) (PFRYX)
An income fund that can benefit from higher interest rates
Highlights
Objective
The fund seeks high current income. Preservation of capital is a secondary goal.
Strategy and process
- Floating-rate bank loans: The fund primarily invests in bank loans with yields that are set at a margin above short-term interest rates and adjust when rates change.
- Guard against rising interest rates: Bank loans have historically performed well amid rising interest rates because their yields adjust higher and become more attractive.
- Backed by team research: The fund's experienced managers select a diverse range of loans using careful credit research.
Fund price |
Yesterday’s close | 52-week high | 52-week low |
|---|---|---|---|
| Net asset value |
$8.60
0.00% | $0.00 |
$8.66
01/30/18 |
$8.56
07/02/18 |
Fund facts as of 08/31/18
$761.48M
60%
Monthly
251
February
746763226 / 1857
10/04/05
Fixed Income
PFRYX
Management team
Manager commentary | Q2 2018
Bank loan investors benefit as LIBOR rises
Paul Scanlon, Co-Head of Fixed Income, talks about opportunities in the bank loan market and the tailwind provided by higher LIBOR rates.
Literature
Fund documents |
| Prospectuses/SAI |
| Fact Sheet (A share) (PDF) |
| Fact Sheet (Y share) (PDF) |
| Annual Report (PDF) |
| Semiannual Report (PDF) |
| Alternating Bond Market Leadership (PDF) |
| Quarterly commentary (PDF) |
| Comparing Putnam's taxable income funds (PDF) |
| Proxy voting results (Form N-PX) (PDF) |
Performance
Total return (%) as of 06/30/18
Annual performance as of 06/30/18
Annualized Total return (%) as of 06/30/18
| Annualized performance | 1 yr. | 3 yrs. | 5 yrs. | 10 yrs. |
|---|---|---|---|---|
| Before sales charge | 3.97% | 3.43% | 3.45% | 3.98% |
| After sales charge | N/A | N/A | N/A | N/A |
| S&P/LSTA Leveraged Loan Index | 4.35% | 4.20% | 4.00% | 5.19% |
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, and 4.00% and 3.25% for income funds (2.25% and 0.75% for Putnam Short Duration Bond Fund and 1.00% and 0.75% for Putnam Floating Rate Income Fund, Putnam Fixed Income Absolute Return Fund, and Putnam Short-Term Municipal Income 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, Putnam Short Duration Bond Fund, Putnam Fixed Income Absolute Return Fund, and Putnam Short-Term Municipal Income Fund, which is 1% in the first year, declining to 0.5% in the second 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, 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). 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. For a portion of the period, some funds had expenses 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 08/31/18 | 0.51 % | - | |
| YTD as of 09/25/18 | 3.33 % | - | |
Yield
| Distribution rate before sales charge as of 09/25/18 |
4.65% |
|---|---|
| Distribution rate after sales charge as of 09/25/18 |
4.65% |
| 30-day SEC yield as of 08/31/18 | 4.45% |
Risk-adjusted performance as of 08/31/18
| Sharpe ratio (3 yrs.) | 1.34 |
|---|---|
| Information ratio (3 yrs.) | -1.17 |
Volatility as of 08/31/18
| Standard deviation (3 yrs.) | 2.55% |
|---|---|
| Beta | 0.98 |
| R-squared | 0.94 |
Lipper rankings as of 08/31/18
| Time period | Rank/Funds in category | Percentile ranking |
|---|---|---|
| 1 yr. | 92/231 | 40% |
| 3 yrs. | 105/208 | 51% |
| 5 yrs. | 88/171 | 52% |
| 10 yrs. | 40/81 | 49% |
Morningstar Ratings™ as of 08/31/18
| Time period | Funds in category | Morningstar Rating™ |
|---|---|---|
| Overall | 211 | |
| 3 yrs. | 211 | |
| 5 yrs. | 175 | |
| 10 yrs. | 81 |
Distributions
| Accrual days | 34 |
|---|---|
| Accrual start date | 08/01/18 |
| Accrual end date | 09/03/18 |
| Payable date | 08/31/18 |
| Income | $0.033304904 |
| Extra taxable income | -- |
| Dividend frequency | Monthly |
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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** FundVisualizer comparison based on Putnam fund versus the largest fund in its Morningstar category.
Holdings
Top 10 holdings as of 08/31/18
| Cequel Communications | 1.27% |
|---|---|
| Vistra Energy | 1.01% |
| Transdigm | 0.97% |
| Bausch Health | 0.94% |
| Avaya Inc | 0.93% |
| Scientific Games | 0.90% |
| DELL Technologies | 0.88% |
| Altice Numericable | 0.87% |
| Centurylink | 0.86% |
| Asurion | 0.85% |
| Top 10 holdings, percent of portfolio | 9.48% |
Fixed income statistics as of 08/31/18
| Average effective maturity | 5.03 yrs. |
|---|---|
| Average effective duration | 0.18 yrs. |
| Average yield to maturity | 5.65% |
| Average coupon | 5.00% |
| Average price | $100.10 |
Sector weightings as of 08/31/18
| Cash investments | Non-cash investments | Total portfolio | ||||
|---|---|---|---|---|---|---|
| Weight | Spread duration | Weight | Spread duration | Weight | Spread duration | |
| Bank loans | 84.08% | 3.74 | 0.00% | 0.00 | 84.08% | 3.74 |
| High-yield corporate bonds | 5.33% | 0.10 | 0.00% | 0.00 | 5.33% | 0.10 |
| Investment-grade corporate bonds | 5.18% | 0.19 | 0.00% | 0.00 | 5.18% | 0.19 |
| Net cash | 5.16% | 0.00 | 0.00% | 0.00 | 5.16% | 0.00 |
| Equity investments | 0.19% | 0.00 | 0.00% | 0.00 | 0.19% | 0.00 |
| Convertible securities | 0.06% | 0.00 | 0.00% | 0.00 | 0.06% | 0.00 |
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 derivatives (the economic value for purposes of calculating periodic payment obligations), in addition to the market value of securities.
Maturity detail as of 08/31/18
| 0 - 1 yr. | 6.93% |
|---|---|
| 1 - 5 yrs. | 24.40% |
| 5 - 10 yrs. | 68.67% |
Quality rating as of 08/31/18
| A | 2.22% |
|---|---|
| BBB | 10.30% |
| BB | 41.08% |
| B | 37.94% |
| CCC and Below | 3.01% |
| Not Rated | 0.29% |
| Net cash | 5.16% |
Fund characteristics will vary over time.
Due to rounding, percentages may not equal 100%.
Consider these risks before investing: The value of securities in the fund’s portfolio may fall or fail to rise over time for several reasons, including general financial market conditions, changing market perceptions (including changing perceptions about the risk of default and expectations about monetary policy or interest rates), changes in government intervention, and factors related to a specific issuer or industry. These factors may also lead to periods of high volatility and reduced liquidity in the bond markets. 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 greater for longer-term bonds, and credit risk is greater for below-investment-grade bonds. Unlike bonds, funds that invest in bonds have fees and expenses. 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. Floating-rate loans may reduce, but not eliminate, interest-rate risk. These loans are typically secured by specific collateral or assets of the issuer (holders of the loan, such as the fund, have a priority claim on those assets in the event of the issuer’s default or bankruptcy). Value of collateral may be insufficient to meet the issuer’s obligations, and the fund’s access to collateral may be limited by bankruptcy or other insolvency laws. 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. 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 08/31/18
| Consumer cyclicals | 20.54% |
|---|---|
| Technology | 11.68% |
| Basic materials | 11.20% |
| Capital goods | 9.83% |
| Financials | 8.86% |
| Communication services | 8.55% |
| Health care | 8.42% |
| Energy | 6.91% |
| Consumer staples | 5.96% |
| Other | 8.05% |
0
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.
Sectors will vary over time.
Country allocation as of 08/31/18
| United States | 97.45% |
|---|---|
| United Kingdom | 0.54% |
| Canada | 0.48% |
| Japan | 0.40% |
| Luxembourg | 0.32% |
| France | 0.28% |
| Netherlands | 0.28% |
| Switzerland | 0.18% |
| Cayman Islands | 0.07% |
0
Expenses
Expense ratio |
Class A | Class B | Class C | Class M | Class R | Class R6 | Class Y |
|---|---|---|---|---|---|---|---|
| Total expense ratio | 1.02% | 1.22% | 1.77% | 1.07% | 1.27% | 0.68% | 0.77% |
| What you pay | 1.02% | 1.22% | 1.77% | 1.07% | 1.27% | 0.68% | 0.77% |
Sales charge/Dealer allowance
| Breakpoint | Class A | Class B | Class C | Class M | Class R | Class R6 | Class Y |
|---|---|---|---|---|---|---|---|
| $0-$49,999 | 1.00% / 1.00% | 0.00% / 1.00% | 0.00% / 1.00% | 0.75% / 0.75% | -- | -- | -- |
| $50,000-$99,999 | 1.00% / 1.00% | 0.00% / 1.00% | 0.00% / 1.00% | 0.75% / 0.75% | -- | -- | -- |
| $100,000-$249,999 | 1.00% / 1.00% | -- | 0.00% / 1.00% | 0.75% / 0.75% | -- | -- | -- |
| $250,000-$499,999 | 1.00% / 1.00% | -- | 0.00% / 1.00% | 0.75% / 0.75% | -- | -- | -- |
| $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% | 1.00% | 1.00% | -- | -- | -- | -- |
| 9 to 12 mts. | 1.00% | 1.00% | 1.00% | -- | -- | -- | -- |
| 2 yrs. | 0.00% | 0.50% | 0.00% | -- | -- | -- | -- |
| 3 yrs. | 0.00% | -- | 0.00% | -- | -- | -- | -- |
| 4 yrs. | 0.00% | -- | 0.00% | -- | -- | -- | -- |
| 5 yrs. | 0.00% | -- | 0.00% | -- | -- | -- | -- |
| 6 yrs. | 0.00% | -- | 0.00% | -- | -- | -- | -- |
| 7+ yrs. | 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% | 0.30% | 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 S&P/LSTA Leveraged Loan Index is an unmanaged index of U.S. leveraged loans. The Barclays U.S. High Yield Loan Index is an unmanaged index that provides broad and comprehensive total return metrics of the universe of U.S. dollar denominated, syndicated term loans.You cannot invest directly in an index.
Consider these risks before investing: The value of securities in the fund’s portfolio may fall or fail to rise over time for several reasons, including general financial market conditions, changing market perceptions (including changing perceptions about the risk of default and expectations about monetary policy or interest rates), changes in government intervention, and factors related to a specific issuer or industry. These factors may also lead to periods of high volatility and reduced liquidity in the bond markets. 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 greater for longer-term bonds, and credit risk is greater for below-investment-grade bonds. Unlike bonds, funds that invest in bonds have fees and expenses. 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. Floating-rate loans may reduce, but not eliminate, interest-rate risk. These loans are typically secured by specific collateral or assets of the issuer (holders of the loan, such as the fund, have a priority claim on those assets in the event of the issuer’s default or bankruptcy). Value of collateral may be insufficient to meet the issuer’s obligations, and the fund’s access to collateral may be limited by bankruptcy or other insolvency laws. 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. 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.