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Y-Share: SYFFX | A-Share: SIFFX
The Pioneer Securitized Income Fund seeks attractive total returns by investing predominately in high yield, or below investment grade securities collateralized by residential real estate, automobiles, aircraft, commercial real estate, and other consumer and corporate obligations.
We seek to invest in out-of-benchmark assets whose unique characteristics can translate into low fundamental correlations2 to traditional stock and bond portfolios.
Securitized assets can provide attractive yield potential despite being collateralized by specific assets.
We actively manage sector and security weights and seek to capitalize on attractive opportunities across market environments.
1Diversification does not assure a profit or protect against loss. The portfolio is concentrated in securitized assets with at least 25% in mortgage backed securities.
2Correlation - The degree to which assets or asset class prices have moved in relation to one another. Correlation ranges from -1 (always moving in opposite directions) through 0 (absolutely independent) to 1 (always moving together). Past performance is no guarantee of future results.
US residential mortgages is the largest and oldest securitized sector3, but through thirty years of evolution, securitizations now offer exposure to a diversity of asset types, including auto loans, office towers, industrial warehouses, hotel portfolios, cellphone towers, apartment buildings, consumer receivables, billboards, aircraft leases, shipping containers, drug royalties, and consumer and corporate receivables. By selecting these exposure thoughtfully, the Fund seeks to invest in assets that are underrepresented in traditional stock and bond portfolios, thereby providing both attractive income and diversification opportunities.
3Source: Annual Review of Financial Economics Dec 2011
Securitized credit indices consist of securities not typically included in commonly used fixed income benchmarks which is highlighted by the historic correlation benefits of this exposure:
Source: Bloomberg as of 3/31/2021. There are no publicly available broad-based below investment grade securitized indices.
*MBS: Mortgage-Backed Securities; ABS: Asset-Backed Securities
Stocks represented by S&P 500 index; Bonds represented by Bloomberg Barclays US Aggregate Bond; Home Equity Securitizations represented by ICE BofA AA-BBB US Fixed Rate Home Equity Loan Index (R0H2); A Rated Commercial MBS represented by ICE BofA 3-5 Year Single-A US Fixed Rate CMBS Index (CB32); and Investment Grade Asset Backed Securities (ABS) represented by ICE BofA AA-BBB US Asset Backed Securities Index.
Data is based on past performance which is no guarantee of future results.
Securitized assets is a broad category for any financial instrument whose cash flows are derived from and secured by specific underlying assets. In a securitization transaction, assets are sold into a trust, which then issues securities backed by those assets. The assets included in securitizations are diverse, but the objective for investors is always the same: to lower the cost of capital by reducing and transferring risk.
In the private (non-agency) market, this objective is primarily pursued in three ways:
Class A: SiFFX, 72387P551
Bloomberg Barclays US Securitized MBS/ABS/CMBS Index4
4The Index tracks agency mortgage backed pass-through securities (both fixed-rate and hybrid ARM) guaranteed by Ginnie Mae (GNMA), Fannie Mae (FNMA), and Freddie Mac (FHLMC); investment grade debt asset backed securities; and investment grade commercial mortgage backed securities.
5Effective June 30, 2021, Pioneer Securitized Income Fund converted from an interval fund into an open-end fund.
Our team emphasizes investment in structures that seek to de-lever through time, provide independent cash flows, and maintain income and credit support cushions above the risk levels of our down-side scenarios. Our process is designed to construct optimal portfolios from the bottom-up through security selection and from the top-down through sector allocation.
Noah Funderburk, CFA
Nicolas Pauwels, CFA
There are no publicly available broad-based below investment grade securitized indices.
ICE BofA US Fixed Rate Asset Backed Securities Index tracks the performance of US dollar denominated investment grade fixed rate asset backed securities publicly issued in the US domestic market. ICE BofA US Fixed Rate CMBS Index tracks the performance of US dollar denominated investment grade fixed rate commercial mortgage backed securities publicly issued in the US domestic market that have 3-5 years until maturity. ICE BofA AA-BBB US Fixed Rate Home Equity Loan Asset Backed Securities Index tracks the performance of US dollar denominated investment grade fixed rate asset backed securities publicly issued in the US domestic market that are collateralized by home equity loans and rated AA1 through BBB3, inclusive. The S&P 500® is a gauge of large-cap US equities. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization. The Bloomberg Barclays US Aggregate Bond Index is a broad-based benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related and corporate securities, MBS, ABS and CMBS. Indices are unmanaged and their returns assume reinvestment of dividends, and unlike Fund returns, do not reflect any fees or expenses. You cannot invest directly in an index.
A WORD ABOUT RISK
The market prices of securities may go up or down, sometimes rapidly or unpredictably, due to general market conditions, such as real or perceived adverse economic, political, or regulatory conditions, recessions, inflation, changes in interest or currency rates, lack of liquidity in the bond markets, the spread of infectious illness or other public health issues or adverse investor sentiment.
Please see a prospectus for a complete discussion of the Fund’s risks. The Fund invests primarily in mortgage-backed securities, asset-backed securities and other securitized asset instruments. A substantial portion of the Fund’s assets ordinarily will consist of high yield debt securities that involve substantial risk of loss.
Investments in the Fund are subject to possible loss due to the financial failure of issuers of underlying securities and their inability to meet their debt obligations. Investments in high yield or lower-rated securities are subject to greater-than-average price volatility, illiquidity and possibility of default. When interest rates rise, the prices of fixed-income securities in the Fund will generally fall. Conversely, when interest rates fall, the prices of fixed-income securities in the Fund will generally rise. The value of mortgage-related and asset backed securities will be influenced by factors affecting the real estate market and the assets underlying those securities. These securities are also subject to prepayment and extension risks and risk of default. The Fund may employ leverage, which increases the volatility of investment returns and subjects the Fund to magnified losses if an underlying investment declines in value. Certain securities and derivatives held by the Fund may be impossible or difficult to purchase, sell or unwind. Such securities may also be difficult to value. The use of interest rate futures and options and other derivatives can increase fund losses and reduce opportunities for gain. The Fund may invest in credit default swaps, inverse floating rate obligations, and other derivative instruments. Derivatives may have a leveraging effect on the Fund. As a non-diversified Fund, the Fund can invest a higher percentage of its assets in the securities of any one or more issuers than a diversified fund. Being non-diversified may magnify the Fund’s losses from adverse events affecting a particular issuer.
Individuals are encouraged to seek advice from their financial, legal, tax and other appropriate professionals before making any investment or financial decisions or purchasing any financial, securities or investment-related product or service, including any product or service described in these materials. Amundi US does not provide investment advice or investment recommendations.
Before investing, consider the product's investment objectives, risks, charges and expenses. Contact your financial professional or Amundi US for a prospectus or summary prospectus containing this information. Read it carefully. To obtain a free prospectus or summary prospectus and for information on any Pioneer fund, please download it from our literature section.
Securities offered through Amundi Distributor US, Inc.
(Formerly Amundi Pioneer Distributor, Inc.)
60 State Street, Boston, MA 02109
Underwriter of Pioneer mutual funds, Member SIPC.
Not FDIC insured | May lose value | No bank guarantee