Active Income

Income Fund (Class Y)  (PNCYX)

Pursuing income with an all-weather bond portfolio since 1954

Income Fund received an  Overall Morningstar Rating  of  

Highlights

Objective

The fund seeks high current income consistent with what Putnam management believes to be prudent risk.

Strategy and process

  • Diverse opportunities The fund invests across all sectors of the U.S. bond market, including mortgage-backed securi­ties, corporate bonds, and other government obligations.
  • Flexible risk allocations The fund takes a unique approach to asset allocation, dynamically establishing diversified risk expo­sures rather than sector exposures.
  • Bottom-up approach Security selection is the primary driver of returns, with subsector allocations and macro strategies also serving as potential alpha generators.

Fund price and assets

Yesterday’s close 52-week high 52-week low Net assets and outstanding shares
Net asset value $6.12
0.49% | $0.03
$7.18
07/19/21
$5.96
06/14/22
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Net assets and outstanding shares

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Fund facts as of 05/31/22

Total net assets
$2,302.69M
Turnover (fiscal year end)
1,038%
Dividend frequency (view rate)
Monthly
Number of holdings
1847
Fiscal year-end
October
CUSIP / Fund code
746792407 / 1803
Inception date
06/16/94
Category
Taxable Income
Open to new investors
Ticker
PNCYX

Management team

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


Commercial mortgage credit recovering from the pandemic

Portfolio Manager Brett Kozlowski, CFA, describes how Putnam focused its specialized expertise on the CMBS sector during the pandemic and how the team is finding compelling opportunities in that space.


Literature


A look at leveraged loans and CLOs
A recent Active Insights podcast features a discussion of leveraged loans, and collateralized loan obligations (CLOs).
U.S. recession ifs and whens
The U.S. will likely avoid a recession in 2022, in our view. That risk rises next year as the Fed raises rates and China decelerates.
Munis after Q1 — and April — and 8 reasons why we are still constructive
While munis suffered a bad quarter to start 2022, brighter days may be ahead amid strong fundamentals.

Performance

Consistency of positive performance over five years

Performance represents 5-year returns in rolling quarter-end periods since inception.

Performance shown above 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 see below.

20.63%

Best 5-year annualized return

(for period ending 09/30/86)


-1.18%

Worst 5-year annualized return

(for period ending 12/31/08)


7.19%

Average 5-year annualized return


  • Total return (%) as of 06/30/22

  • Annual performance as of 06/30/22

Annualized Total return (%) as of 06/30/22

Annualized performance 1 yr. 3 yrs. 5 yrs. 10 yrs.
Before sales charge -11.29% -1.22% 1.31% 2.41%
After sales charge N/A N/A N/A N/A
Bloomberg U.S. Aggregate Bond Index -10.29%-0.93%0.88%1.54%

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, Strategic Intermediate Municipal 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, and Putnam Fixed Income Absolute Return 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 06/30/22 -1.85% -
YTD as of 07/01/22 -9.50% -

Yield

Distribution rate before sales charge
as of 07/01/22
2.94%
Distribution rate after sales charge
as of 07/01/22
2.94%
30-day SEC yield with subsidy
as of 06/30/22
3.82%
30-day SEC yield without subsidy
as of 06/30/22
3.71%

Risk-adjusted performance as of 05/31/22

Sharpe ratio (3 yrs.) -0.14
Information ratio (3 yrs.) -0.05

Volatility as of 05/31/22

Standard deviation (3 yrs.) 5.04%
Beta 0.96
R-squared 0.72

Fixed income statistics as of 05/31/22

Average effective duration 6.00 yrs.

Lipper rankings as of 05/31/22

Time period Rank/Funds in category Percentile ranking
1 yr. 383/505 76%
3 yrs. 343/478 72%
5 yrs. 49/439 12%
10 yrs. 12/316 4%
Lipper category: Core Bond Funds

Morningstar Ratings as of 05/31/22

Time period Funds in category Morningstar Rating
Overall 568
3 yrs. 568
5 yrs. 505
10 yrs. 359
Morningstar category: Intermediate Core-Plus Bond

Distributions

Record/Ex dividend date 06/23/22
Payable date 06/27/22
Income $0.015
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.


Holdings

Fnma Fn30 Tba Umbs 03.0000 07/01/2052 12.56%
Fnma Fn30 Tba Umbs 04.5000 07/01/2052 10.09%
Fnma Fn30 Tba Umbs 04.5000 06/01/2052 9.37%
Fnma Fn30 Tba Umbs 04.0000 06/01/2052 6.26%
Fnma Fn30 Tba Umbs 04.0000 07/01/2052 4.81%
Fnma Fn30 Tba Umbs 03.5000 07/01/2052 4.42%
Fnma Fn30 Tba Umbs 02.0000 06/01/2052 4.01%
Gnma Gii30 Tba 03.5000 06/01/2052 1.89%
Fnma Fn30 Tba Umbs 05.0000 07/01/2052 0.85%
Mcas 2019-01 M10 144a 04.2557 10/15/2049 0.70%
Top 10 holdings, percent of portfolio 54.96%