Loomis Sayles Strategic Income Fund

4 / 5 Stars
4 4 1 4 5
Zacks Investment Research
1 (Strong Buy)
Standard & Poor's
C (Hold)

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Note: Profile written for different share class.


The fund has returned 14.60 percent over the past year, 8.54 percent over the past three years, 12.50 percent over the past five years, and 8.38 percent over the past decade.

Trailing Returns Updated 06.30.2014
Year to date 6.8%
1 Year 14.6%
3 Years (Annualized) 8.5%
5 Years (Annualized) 12.5%
10 Years (Annualized) 8.4%

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With risky bonds come long-term rewards for the Loomis Sayles Strategic Income Fund. The fund mangers hunt for fixed-income investments from the United States and throughout the world.

As of July 03, 2014, the fund has assets totaling $18.86 billion. Its portfolio consists mainly of low-grade, U.S. corporate bonds. It also has moderate holdings outside of the United States.

The global downturn punished corporate bonds—especially riskier IOUs, which this fund generally holds. Managment took advantage of 2009’s huge rally in corporate bonds and capitilized on names like automaker Ford and telecom giant AT&T. As corporate bond yields have moved more in line with treasuries, management has upped its high-yield and convertible holdings. In late 2010, management initiated a position in Irish bonds amid the worst of the country's financial troubles. Irish debt subsequently became cheaper, but fund manager Dan Fuss still sees long-term benefits for the fund. Morningstar describes the fund as one of the “better bold bond choices around.” The fund has returned 14.60 percent over the past year and 8.54 percent over the past three years.

Most of the fund’s investments come from bonds rated BBB or lower, but the fund is known for its diversity. The managers can invest a portion of assets in common stocks, and they generally hold emerging-markets bonds. Comanager Elaine Stokes says the fund is the “most broad-reaching of all our fixed-income offerings.” The fund has returned 12.50 percent over the past five years and 8.38 percent over the past decade.

Investment Strategy

The fund looks for incom-producing securities with three qualities: “Discounted price compared to economic value, undervalued credit ratings with strong or improving credit profiles, [and] yield premium to its benchmark,” according to the fund’s prospectus.

Role in Portfolio

Morningstar assigns the fund a “supporting player” role in a portfolio.


Manager Dan Fuss has run the fund since its 1995 inception. He currently manages the fund alongside Kathleen Gaffney, Matt Eagan, and Elaine Stokes. Fuss won Morningstar’s Fixed-Income Manager of the Year award in 1995.


Loomis Sayles Strategic Income Fund has an expense ratio of 1.70 percent.

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Primary risks include large holdings in low-quality bonds and generally risky investments in emerging-markets debt.

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