Multi-sector income

Income strategies that invest outside the aggregate index

As you move outside of the benchmark ... you get away from interest-rate risk and into other types of risk that we think are more attractive.

— BILL KOHLI, CIO, Fixed Income
Putnam Income Fund PNCYX

This fund received a Overall Morningstar Rating™

Putnam Diversified Income Trust PDVYX

This fund received a Overall Morningstar Rating™

Putnam Income Fund (PNCYX)

An all-weather strategy favoring investment-grade bonds

Average historic duration (9/30/15–9/30/18)

4.84 Income Fund

5.77 BBG Barclays U.S. Aggregate Bond Index

Correlation to the index

0.59

The outcome of this outside-the-index approach is a fund with positive but lower correlation historical correlation to the index.

Portfolio managers

Michael Salm

Co-Head of Fixed Income

29 years of investing | 21 years at Putnam

Brett Kozlowski, CFA

Portfolio Manager

21 years of investing | 10 years at Putnam

Emily Shanks

Portfolio Manager

19 years of investing | 6 years at Putnam

Putnam Diversified Income Trust (PDVYX)

A nontraditional income strategy with increased
flexibility

Average historic duration (9/30/15–9/30/18)

-0.44 Diversified Income Trust

5.77 BBG Barclays U.S. Aggregate Bond Index

Correlation to the index

-0.36

The outcome of this outside-the-index approach is a fund with negative historical correlation to the index.

Portfolio managers

D. William Kohli

CIO, Fixed Income

30 years of investing | 24 years at Putnam

Michael Atkin

Portfolio Manager

30 years of investing | 21 years at Putnam

Robert Davis, CFA

Portfolio Manager

19 years of investing | 19 years at Putnam

Brett Kozlowski, CFA

Portfolio Manager

21 years of investing | 10 years at Putnam

Michael Salm

Co-Head of Fixed Income

29 years of investing | 21 years at Putnam

Paul Scanlon, CFA

Co-Head of Fixed Income

32 years of investing | 19 years at Putnam

Interest-rate risk is elevated

Interest-rate risk is elevated

Gains in employment may herald greater rate risk, giving investors reason to consider income opportunities outside of traditional bond benchmarks.

Read more
Trade war and rising rates create headwinds for global economy

Trade war and rising rates create headwinds for global economy

The outlook for global economic growth is easing because of protectionist tariffs, weakness in emerging markets, and rising oil prices.

Fixed Income OutlookFIO | Q2 2018
Read more about the advantages of our active approach

Comparing Putnam's taxable income funds

Putnam Income Fund: Quarterly commentary

Putnam Diversified Income Trust: Quarterly commentary


Advisor-only (login required):

Sales idea: Income opportunities beyond indexes

Rising rates and their impact

Two flexible income strategies that invest outside the index

Duration measures the sensitivity of bond prices to interest-rate changes. A negative duration indicates that a security or fund may be poised to increase in value when interest rates increase. For correlation, numbers less than 1 indicate a diminishing correlation. The maximum correlation is 1 and the minimum is 0, with values between 0 and -1 indicating negative correlation.

The Morningstar Rating 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. Ratings do not take into account the effects of sales charges and loads.