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 09/30/19

Category: High Yield Funds

  Percentile ranking Rank/Funds in category
10 yrs. 69% 49/71
1 yr. 59% 60/102
3 yrs. 62% 61/98
5 yrs. 63% 59/94

Risk characteristics as of 09/30/19

Avg. Eff. Maturity 3.89
Avg. Eff. Duration 2.93
Avg. Coupon 5.96
Avg. Yield to Maturity 5.59
Alpha (%) --
Beta 1.04
R squared 0.98
Standard deviation (3 yrs.) 4.28

Maturity details

0 to 1 yr. 18.05%
1 to 5 yrs. 54.83%
5 to 10 yrs. 23.27%
10 to 15 yrs. 2.08%
Over 15 yrs. 1.77%

Quality ratings

A 0.23%
BBB 9.87%
BB 42.01%
B 32.67%
CCC and Below 8.70%
Not Rated 1.23%
Net cash 5.29%

Maturity detail includes only cash bonds and cash equivalents.

Lower rated bonds may offer higher yields in return for more risk. 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 net assets. A bond rated Baa or higher (Prime-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. Short-term cash bonds rated A-1+ are included in the AAA-rating category. Ratings and portfolio credit quality will vary over time. Credit quality includes the fixed-income portion of the portfolio. Derivative instruments, including currency forwards, are only included to the extent of any unrealized gain or loss on such instruments and are shown in the not-rated category. Cash is also shown in the not-rated category. The fund itself has not been rated by an independent rating agency.

‡ 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 10/31/19

Fiscal Year End December
Asset Class Putnam Capital Manager
Subaccount Status Open to new investors
Number of issues 514
Turnover (fiscal year end) 31%
Net Assets $185M
Inception Date 02/01/88

Holdings

Bausch Health 2.14%
Sprint Communications 1.95%
Charter Communications 1.95%
Altice USA 1.95%
Tenet Healthcare 1.40%
Ally Financial 1.32%
Community Health Systems 1.09%
T-Mobile 0.97%
Intelsat 0.91%
DELL Technologies 0.91%
Top 10 holdings, total: 14.59%


Top 10 holdings as of 09/30/19
1: Bausch Health 2.14%
2: Sprint Communications 1.95%
3: Charter Communications 1.95%
4: Altice USA 1.95%
5: Tenet Healthcare 1.40%
6: Ally Financial 1.32%
7: Community Health Systems 1.09%
8: T-Mobile 0.97%
9: Intelsat 0.91%
10: DELL Technologies 0.91%
Holdings represent 14.59% of portfolio
Top 10 holdings as of 08/31/19
1: Bausch Health 2.14%
2: Sprint Communications 2.02%
3: Altice USA 1.94%
4: Charter Communications 1.82%
5: Tenet Healthcare 1.40%
6: Ally Financial 1.32%
7: Community Health Systems 1.07%
8: T-Mobile 0.99%
9: DELL Technologies 0.91%
10: Intelsat 0.89%
Holdings represent 14.50% of portfolio
Top 10 holdings as of 07/31/19
1: Bausch Health 2.08%
2: Sprint Communications 1.95%
3: Altice USA 1.86%
4: Charter Communications 1.74%
5: Ally Financial 1.25%
6: Community Health Systems 1.13%
7: ARD Holdings 1.03%
8: T-Mobile 0.96%
9: Tenet Healthcare 0.95%
10: DELL Technologies 0.87%
Holdings represent 13.82% of portfolio
Top 10 holdings as of 06/30/19
1: Bausch Health 2.05%
2: Sprint Communications 1.85%
3: Altice USA 1.85%
4: Charter Communications 1.68%
5: Ally Financial 1.21%
6: Community Health Systems 1.12%
7: T-Mobile 0.94%
8: Tenet Healthcare 0.93%
9: DELL Technologies 0.86%
10: Intelsat 0.86%
Holdings represent 13.35% of portfolio


Sector Weightings as of 09/30/19

Cash Investment Non-Cash Investment Total Portfolio
Weight Spread Duration Weight Spread Duration Weight Spread Duration
High-yield corporate bonds 76.35% 2.20 0.00% 0.00 76.35% 2.20
Investment-grade corporate bonds 9.28% 0.54 0.00% 0.00 9.28% 0.54
Bank loans 5.62% 0.23 0.00% 0.00 5.62% 0.23
Net cash 5.29% 0.00 0.00% 0.00 5.29% 0.00
Convertible securities 1.01% 0.00 0.00% 0.00 1.01% 0.00
Emerging-market bonds 1.00% 0.03 0.00% 0.00 1.00% 0.03
Equity investments 0.98% 0.00 0.00% 0.00 0.98% 0.00
International Treasury/agency 0.47% 0.03 0.00% 0.00 0.47% 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 derivatives (the economic value for purposes of calculating periodic payment obligations), in addition to the market value of securities.

Portfolio allocations will vary over time. The unclassified sector (where applicable) includes exchange traded funds and other securities not able to be classified by sector.

Maturity detail includes only cash bonds and cash equivalents.

Lower rated bonds may offer higher yields in return for more risk. 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 net assets. A bond rated Baa or higher (Prime-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. Short-term cash bonds rated A-1+ are included in the AAA-rating category. Ratings and portfolio credit quality will vary over time. Credit quality includes the fixed-income portion of the portfolio. Derivative instruments, including currency forwards, are only included to the extent of any unrealized gain or loss on such instruments and are shown in the not-rated category. Cash is also shown in the not-rated category. The fund itself has not been rated by an independent rating agency.

Top Industry Sectors as of 09/30/19

Consumer cyclicals 20.14%
Communication services 13.14%
Basic materials 11.70%
Energy 9.83%
Financials 9.51%
Health care 8.58%
Capital goods 7.97%
Consumer staples 5.83%
Net Cash 5.29%
 
Other
8.01%
Technology 4.61%
Utilities 3.13%
Transportation 0.27%

Country Allocation as of 09/30/19

United States 84.08%
Canada 5.41%
United Kingdom 1.77%
Luxembourg 1.61%
France 1.55%
Netherlands 1.37%
Ireland 1.19%
Switzerland 0.76%
Israel 0.48%
 
Other
1.78%
Mexico 0.47%
Bermuda 0.46%
Norway 0.44%
Cayman Islands 0.27%
Jamaica 0.09%
Indonesia 0.05%