PHYD Profile
The Putnam ESG High Yield ETF is an actively managed fund that focuses on below-investment-grade bonds, commonly known as high-yield or "junk" bonds. The fund's investment strategy targets bonds issued by companies or entities that meet specific environmental, social, and governance (ESG) criteria established by Putnam Management, the funds investment advisor. These ESG criteria are sector-specific and are intended to align with sustainable and ethical investment practices.
The fund's investment universe primarily includes bonds with lower credit ratings, reflecting a higher risk and potential for higher returns compared to investment-grade bonds. In addition to ESG compliance, the fund typically invests in bonds that are obligations of U.S.-based companies or issuers. This focus on U.S. issuers aims to provide investors with a concentrated exposure to domestic high-yield securities while adhering to ESG standards.
The Putnam ESG High Yield ETF specifically targets bonds with intermediate to long-term maturities, typically three years or longer. This investment approach is designed to balance the higher income potential of high-yield bonds with the added stability of longer-term securities. By focusing on intermediate to long-term maturities, the fund aims to manage interest rate risk and provide a stable income stream over time.
The integration of ESG criteria into the investment process is intended to align the fund with broader sustainability goals while seeking to capture the performance potential of high-yield bonds. This strategy allows investors to engage in socially responsible investing while benefiting from the potentially higher returns associated with the high-yield bond market. The funds approach combines a focus on credit quality and ESG factors to achieve a balance between ethical investment practices and financial performance.
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