Despite a weak housing market, asset-related securities can offer attractive fundamental value.
Risk aversion and volatility set the tone in the third quarter, but created attractive valuations for active managers
The third quarter of 2011 was the worst for stocks and other so-called “risk assets” since the financial crisis unraveled markets in 2008. Following the supply chain disruptions caused by the disasters in Japan, already cautious investors were confronted by a series of negative headlines: the threat of political impasse surrounding attempts to raise the
Dogged by lingering memories of the 2008–2009 bear market, many investors remain cautious about increasing their exposure to equities — even though equities today offer compelling value relative to most fixed-income asset classes. At the same time, many bond investors are finding it necessary to assume greater credit risk to capture higher yields amid a
One of the key strategies that several Putnam fixed-income funds have successfully employed is the use of non-agency residential mortgage-backed securities (RMBS). As the name would imply, these securities are backed by residential mortgages and have been securitized not by a government agency — such as Fannie Mae or Freddie Mac — but by a
The recent Dodd-Frank Act introduced sweeping changes to the derivatives market. Daniel Farrell, Putnam’s Head of Equity Trading, discusses how Putnam uses derivative contracts and the impact of the bill on Putnam equity funds. Broadly speaking, what are derivatives and how are they used? Derivatives are investments whose value is based on — or “derived”
Under the Dodd-Frank Act, many derivatives will move from over-the-counter trading to exchanges or electronic trading systems. What will this mean for Putnam funds? The Act sets the broad outlines for regulation, which will be implemented through the new powers of the Securities and Exchange Commission and the Commodities Futures Trading Commission in greater detail
On the heels of the Lehman Brothers bankruptcy in late 2008, the U.S. Treasury and Federal Reserve Board (the “Fed”) rolled out a number of unprecedented programs designed to inject liquidity into the financial system. The mortgage purchase program began in conjunction with the Troubled Asset Relief Program, or “TARP,” and both were designed to