Core Bond

The strategy seeks to outperform its benchmark over a full market cycle with low relative volatility through an actively managed, broadly diversified portfolio. The strategy focuses on security selection and sector allocation while limiting interest-rate exposure relative to the benchmark.*

Strategy highlights

Inception date

June 30, 1992

Benchmark

Bloomberg U.S. Aggregate Bond Index

Total strategy assets

$1.5B

(as of April 2022)

Investment vehicles

  • Separate account
  • The strategy's mandate allows the managers to pursue investment opportunities throughout the fixed-income universe, creating a diversified portfolio across sectors, risk factors and investment horizons.
  • May hold securities from a broad range of sectors within fixed income, including credit (investment grade), securitized debt (MBS, CMBS, CMO and ABS) and government debt (Treasuries and Agencies).
  • The emphasis on portfolio construction is on making security selection the primary driver of returns, with sub-sector allocations and macro strategies (such as term structure decisions) also serving as potential alpha generators.

 

 

 

*No assurance can be given that the investment objective will be achieved or that an investor will receive a return of all or part of his or her initial investment. Actual results could be materially different from the stated goals. Investors should carefully consider the risks involved before deciding to invest. As with any investment, there is a potential for profit as well as the possibility of loss.

Assets may include accounts that are not reflected in the composite.

Investment team

Performance

Annualized composite performance (%) as of April 30, 2022

  MTD QTD YTD 1 Year 3 Years 5 Years 10 Years
Core Bond (gross) -3.69% -3.69% -9.41% -8.47% 0.79% 1.66% 2.51%
Core Bond (net) -3.71% -3.71% -9.50% -8.75% 0.49% 1.35% 2.20%
Bloomberg U.S. Aggregate Bond Index -3.79% -3.79% -9.50% -8.51% 0.38% 1.20% 1.73%

Calendar-year composite performance (%) as of April 30, 2022

  2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Core Bond (gross) -1.31% 7.91% 10.18% -0.18% 4.18% 3.87% 0.65% 6.90% -0.48% 6.85%
Core Bond (net) -1.61% 7.58% 9.85% -0.48% 3.87% 3.55% 0.35% 6.58% -0.78% 6.53%
Bloomberg U.S. Aggregate Bond Index -1.54% 7.51% 8.72% 0.01% 3.54% 2.65% 0.55% 5.97% -2.02% 4.22%

Past performance is not a guarantee of future results. An investment in this strategy could lose value. Most recent month-end performance is preliminary. Returns are subject to change.

Periods less than one year are not annualized. Performance is stated in U.S. dollars and includes the reinvestment of dividends and interest.

Literature


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.


Important disclosures

 

The Putnam Investments Core Bond Composite (the "Composite") seeks above-average total returns relative to its agreed benchmark, the Bloomberg U.S. Aggregate Bond Index, with low relative volatility through an actively managed, broadly diversified portfolio. Putnam Investments utilizes specialized analysis on all sectors of the investment-grade universe combined with risk-controlled portfolio construction. The approach focuses on security selection and sector allocation while limiting interest-rate exposure relative to the benchmark. Leverage is not utilized in any account in this Composite. However, derivatives (including forward, futures, options, and swaps) may be used in accounts in the Composite for purposes of hedging, as an alternative to investing in cash markets, and for managing portfolio characteristics such as position of yield curve. The Composite includes all fully discretionary managed by Putnam Investments in this investment style. The Composite inception date was June 30, 1992. The Composite creation date was April 4, 2002.

The Bloomberg U.S. Aggregate Bond Index is an unmanaged index of U.S. investment-grade fixed-income securities.  Indexes are rebalanced monthly by market capitalization.

 

Gross performance includes the deduction of transaction costs but does not include the deduction of management fees and other expenses that may be incurred in managing an investment account. A portfolio's return will be reduced by advisory and other fees. Net performance reflects the deduction of a model fee applied on a monthly basis, equal to the actual management fee incurred by a portfolio in the Composite or the highest management fee that would be charged to a prospect of the strategy, whichever is higher. The model fee may change over time. Actual advisory fees may vary among clients with the same investment strategy. The Composite includes all actual, fully discretionary accounts with substantially similar investment policies and objectives managed to the Composite's investment strategy. Benchmarks are generally taken from published sources and may have different calculation methodologies, pricing times, and/or foreign-exchange sources from the Composite. The effect of those differences is generally deemed to be immaterial. The securities holdings of the Composite strategy may differ materially from those of the index used for comparative purposes.