Fixed Income Global Alpha
Putnam offers a suite of fixed-income global alpha products that allow investors to target different levels of excess return and corresponding levels of risk.
Other global alpha products can be chosen from the drop-down menu.
|Inception date||Benchmark||Total strategy assets†||Product literature|
|August 31, 2008||BofA Merrill Lynch 1-Month Libor||$9.2B (As of May 2017)||
Quarterly product profile (PDF)
Monthly update (PDF)
The strategy seeks to achieve a return of 3% over LIBOR over a full investment cycle. Active risk will typically range between 200 and 600 basis points per annum. Target ex-ante risk is not fixed; it is a function of market opportunity. The typical duration range is +/- 2 years.
We believe our approach to active management allocates risk in pursuit of more efficient alpha within the context of an unconstrained bond portfolio. We seek opportunities in
- Credit risk - corporate (investment grade/high yield), mortgage (residential/commercial MBS), sovereign (developed/emerging market)
- Prepayment risk - agency MBS, collateralized mortgage obligations, IOs/POs
- Liquidity risk - pricing, volatility, spreads not associated with credit or prepayment risk
- Term structure risk - level, slope, bend, currency, real vs. nominal rates
Albert Chan CFA
Paul D. Scanlon CFA
Co-Head of Fixed Income
Michael V. Salm
Co-Head of Fixed Income
D. William Kohli
Chief Investment Officer, Fixed Income
Manager commentary | Q4 2016
Dollar to continue strengthening, but at a slower pace
Bill Kohli, Chief Investment Officer for Fixed Income, discusses his view on the strengthening dollar.
†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 return objective of 3% over LIBOR is based on managing the strategy to a level of tracking error (typically 2%-6%) commensurate with the target return. Return expectations are derived using conservative cash flow assumptions for asset classes typically represented in the portfolio, including corporate credit, mortgage credit, prepayment, and term structure strategies. 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.