Global High Yield
March 31, 2003
ICE BofA Global HY IG Country Const 100% USD Hgd Index
Total strategy assets†
(as of January 2020)
We believe outperformance is driven by:
- Pursuing capital appreciation in credits with improving fundamentals
- Skeptically investing in deteriorating or stagnant credits based on rigorous scenario analysis
- Actively managing the top-down portfolio profile based on market outlook
- Selecting issuers driven by bottom-up fundamental credit analysis
- Adhering consistently to a risk-controlled process
We see multiple opportunities to pursue strong performance:
- Wide range of issuers of various size, complexity, and geography
- Capital structure complexity: senior, subordinate, and secured bonds as well as loans, convertibles, hybrids and preferred, and equity securities
- Dislocations between cash instruments and derivatives
- Varied security types including bullet maturities, floating rate notes, call/put option structures, covered bonds, etc.
- Tracking error will typically range between 1.5% and 3.5%
- Typical duration range is +/- 1 year
Tracking error targets are based on a number of assumptions and are subject to revision and may change materially with changes in underlying assumptions. While the investment manager considers tracking error in the investment process, the strategy's composition and performance may vary substantially from that of the target. Achieved tracking error is the result of many factors, including market conditions and there can be no assurance that the tracking error actually reflected in client portfolios will be at levels indicated in the investment objectives.
*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 composite report for a summary of risk considerations. 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.
Annualized composite performance (%) as of January 31, 2020
|MTD||QTD||YTD||1 Year||3 Years||5 Years||10 Years|
|Global High Yield (gross)||0.10%||0.10%||0.10%||11.03%||6.47%||6.43%||7.92%|
|Global High Yield (net)||0.06%||0.06%||0.06%||10.48%||5.94%||5.85%||7.28%|
|ICE BofA Global HY IG Country Constrained Index||0.24%||0.24%||0.24%||10.23%||6.17%||6.20%||7.62%|
Calendar-year composite performance (%) as of January 31, 2020
|Global High Yield (gross)||15.81%||-2.53%||8.19%||15.83%||-2.92%||2.98%||9.22%||18.85%||2.37%||14.98%|
|Global High Yield (net)||15.23%||-3.02%||7.65%||15.20%||-3.55%||2.30%||8.51%||18.07%||1.70%||14.23%|
|ICE BofA Global HY IG Country Constrained Index||14.40%||-1.98%||7.82%||15.69%||-3.07%||3.00%||7.27%||18.89%||3.16%||15.26%|
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. Please refer to the composite report and disclosures below for additional important information regarding performance disclosures and investments risks.
Periods less than one year are not annualized. Performance is stated in U.S. dollars. and includes the reinvestment of dividends and interest.
The Putnam Investments Global High Yield Composite (the "Composite") seeks to achieve excess return over the BofA Global HY IG Country Constrained Index over a full investment cycle. High current income with capital growth is a secondary objective when consistent with high current income. The strategy pursues capital appreciation in credits with improving fundamentals and invests in deteriorating or stagnant credits based on rigorous scenario analysis. Accounts in the Composite pursue exposure across capital structure complexity, including senior, subordinate, and secured bonds as well as loans, convertibles, hybrids and preferred, and equity securities. The Composite's benchmark is the ICE BofA Global HY Investment Grade Country Constrained Index (hedged to USD). Accounts in the Composite may have different but largely similar benchmarks. Leverage is not utilized in any account in this Composite. However, derivatives (such as futures, swaps, options, and forwards) may be used for hedging or non-hedging purposes. The Composite includes all fully discretionary accounts managed by Putnam Investments in this investment style. The Composites inception date was March 31, 2003. The Composite creation date was May 15, 2003.
The ICE Bank of America (BofA) Global High Yield Investment Grade Country Constrained Index is an unmanaged, USD-hedged index of high-yield corporate bonds from those countries that issue investment-grade government bonds. Prior to January 1, 2013, the Composite was benchmarked to the ICE BofA Global High Yield Constrained Index. In 2012, ICE BofA changed the guidelines to the ICE BofA Global High Yield Constrained Index, allowing high-yield debt from non-investment-grade (i.e., emerging-market) countries to be included in the index. Because the Composite's investment strategy focuses on investing primarily in developed nations, the new benchmark, which includes high-yield corporate debt from only investment-grade (i.e., developed) countries, more closely aligns with the goals and investment universe for this strategy.
The ICE BofA Global High Yield Investment Grade Country Constrained Index is an unmanaged, USD-hedged index of high yield corporate bonds from those countries that issue investment-grade government bonds.
Composites may include portfolios with certain existing investment restrictions that the Firm believes do not materially impact the 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 may differ materially from those of the index used for comparative purposes. Composites and benchmarks include the reinvestment of dividends and other earnings. Indexes are unmanaged and do not incur expenses. You cannot invest directly in an index. Gross-of-fee returns do 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-of-fee returns are calculated using a model fee. For the applicable time periods, net-of-fees returns reflect either the deduction of the highest management fee that is paid by a portfolio in the Composite during the performance period, applied on a monthly basis, or the deduction of the highest applicable management fee in effect during the performance period that would be charged based on the fee schedule appropriate to this mandate, without the benefit of breakpoints, applied on a monthly basis, whichever is higher. Net-of-fee calculation methodology may change over time. Actual investment advisory fees incurred by clients are typically negotiated on an individual basis and may vary depending upon, among other things, the applicable fee schedule and portfolio size. Our standard fee schedules are available upon request.