Dedicated Mortgage Strategy

Inception date Benchmark Total strategy assets Product literature
July 31, 2009 BofA Merrill Lynch 1-Month Libor $1.0B (As of August 2017) Strategy profile (PDF)
  • Highlights
  • Performance

Objective**

The strategy seeks to achieve a return in excess of 1 Month LIBOR +5%-8% over a full market cycle by investing in higher yielding mortgage-backed securities.

Product highlights

  • Broad focus across the spectrum of securitized products, which include agency MBS and CMOs (including IOs/POs and other mortgage prepayment derivatives), non-agency RMBS and CMBS (both cash and synthetics) and asset-backed securities
  • Unlevered strategy
  • Long-term investors have the potential to earn returns given a liquidity premium in the market place
  • Target ex-ante risk is not fixed; it is a function of market opportunity
  • Low interest-rate exposure (expected <1-2 years)

Investment team

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

**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. See the product profile for a summary of risk considerations. As with any investment, there is a potential for profit as well as the possibility of loss.

The target range is based on return expectations over the next market cycle for the asset classes typically represented in the strategy, including Agency IO, non-agency RMBS, and below AAA CMBS. Return expectations are estimated using conservative assumptions about future cash flows. Accounts in the Composite could have higher or lower targets. Target returns represent results of statistical modeling and are provided for informational purposes only. Targets are presented for the purpose of communicating the intended risk profile of the investment opportunities that Putnam will pursue and are not intended to be projections of performance. Target returns are based on a number of assumptions, are subject to significant revision and may change materially with changes in underlying observations. No representations are made as to the accuracy of such observations and assumptions.