5
Morningstar FundInvestor
February 2
014
Morningstar Analyst Rating
01-30-14
Œ
Morningstar Pillars
Process
Performance
People
Parent
Price
Positive
Positive
Positive
Positive
Positive
Morningstar Analyst Rating
Morningstar evaluates mutual funds based on five key pillars, which
its analysts believe lead to funds that are more likely to outperform
over the long term on a risk-adjusted basis.
Analyst Rating Spectrum
Œ „ ´ˇ ¨
Pillar Spectrum
Positive
§
Negative
¶
Neutral
NAV
15.11
15.16
15.12
13.93
14.27
13.34
10.39
14.58
14.29
13.56
13.82
13.32
Total Return %
-0.02
5.88
15.13
3.76
13.58
37.19
-21.82
8.53
11.29
4.28
11.30
29.18
+/-BC Agg Bnd
-1.50
7.90
10.92
-4.08
7.04
31.26
-27.06
1.56
6.96
1.85
6.96
25.08
+/-BC US Universal
-1.34
7.23
9.60
-3.64
6.42
28.59
-24.20
2.03
6.32
1.56
6.33
23.36
Income Return %
0.32
5.15
6.42
6.33
6.41
7.73
7.15
6.45
5.77
6.17
7.31
7.44
Capital Return %
-0.34
0.73
8.71
-2.57
7.17
29.46
-28.97
2.08
5.52
-1.89
3.99
21.74
Total Rtn % Rank Cat
74
14
11
45
21
14
85
8
2
11
8
7
Income $
0.05
0.76
0.87
0.88
0.83
0.78
1.01
0.90
0.77
0.83
0.95
0.80
Capital Gains $
0.00
0.07
0.00
0.00
0.00
0.00
0.11
0.00
0.00
0.00
0.00
0.00
Expense Ratio %
.
0.63
0.63
0.63
0.64
0.65
0.64
0.67
0.75
0.75
0.75
0.75
Income Ratio %
.
4.57
4.99
5.04
5.76
7.69
6.78
5.75
5.20
4.91
5.48
6.64
Turnover Rate %
.
28
20
22
27
39
26
20
26
22
.
35
Net Assets $mil
13,363
13,271
13,111
11,046
11,083
10,780
6,597
8,425
5,446
3,378
2,696
2,004
Performance
01-31-14
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Total
2009
2010
2011
2012
2013
-0.08 17.21 12.35 4.27 37.19
4.99 -0.94
6.97 2.09 13.58
3.48 2.88
-4.92 2.51
3.76
6.59 0.05
4.76 3.06 15.13
2.27 -1.39
2.48 2.45
5.88
Trailing
Total
+/- BC
+/- BC %Rank Growth of
Return% Agg Bnd US Universal
Cat
$10,000
3 Mo
6 Mo
1 Yr
3 Yr Avg
5 Yr Avg
10 Yr Avg
15 Yr Avg
0.44 -0.09
-0.11
62 10,044
3.51 1.73
1.53
24 10,351
4.18 4.06
3.69
19 10,418
7.73 4.00
3.56
12 12,503
14.21 9.28
8.40
15 19,432
7.90 3.28
3.00
6 21,390
8.66 3.37
3.09
5 34,757
Tax Analysis
Tax-Adj Rtn% %Rank Cat Tax-Cost Rat %Rank Cat
3 Yr (estimated)
5 Yr (estimated)
10 Yr (estimated)
5.45
11
2.11
75
11.78
10
2.13
70
5.50
5
2.22
75
Potential Capital Gain Exposure: 9% of assets
Rating and Risk
Time Load-Adj
Morningstar
Morningstar
Morningstar
Period Return % Rtn vs Cat
Risk vs Cat
Risk-Adj Rating
1 Yr
4.18
3 Yr
7.73
+Avg
+Avg
5 Yr
14.21
+Avg
+Avg
10 Yr
7.90
+Avg
+Avg
Incept
10.08
Other Measures
Standard Index
Best Fit Index
BC Agg Bnd
DJ Mod
Alpha
5.6
1.9
Beta
0.56
0.75
R-Squared
5
83
Standard Deviation
6.80
Mean
7.73
Sharpe Ratio
1.12
Morningstar’s Take
by Sarah Bush 01-30-14
Loomis Sayles Bond’s charms were on full display in
2013.
In the midst of a tough year for most bond investors,
this fund shone. Up 5.9% for 2013, the fund topped
more than 80% of its multisector peers and handily
beat the high-quality Barclays Aggregate Bond Index,
which suffered its first loss in more than a decade.
It’s not surprising to see this credit-intensive fund
prosper in a market that favored lower-rated fare; close
to a fifth of the portfolio is stashed in junk bonds.
Managers Matt Eagan, Dan Fuss, and Elaine Stokes
also deserve kudos for positioning this once
rate-sensitive portfolio with minimal exposure to rising
Treasury yields and building a meaningful stake in
equities (6% common stock as of November 2013) and
convertibles (10%), both big winners in the year’s
healthy stock markets. Another success was the fund’s
significant overweighting to financials, including
consumer loan provider Springleaf Financial, which
netted an upgrade.
Indeed, this Gold-rated fund has plenty going for it.
Its talented manager team remains strong even after
longtime manager Kathleen Gaffney’s 2012 departure,
and Loomis Sayles continues to make significant
investments in its analyst bench and risk analytics.
Meanwhile, the team’s ability to uncover undervalued
names--Ireland and Ford F were particular successes
in recent years--has helped it to an 8% 10-year return
that lags just a handful of its peers’.
It might be tempting to pile into a fund that
managed exceptional returns over the bond bull
market and thrived in 2013 as well. But this is not an
all-weather fund. The corporate-heavy portfolio, which
invests heavily in nondollar currencies (35%, recently),
equities, and the occasional troubled sovereign, is
vulnerable to hefty losses when credit and stock
markets head south. The fund also features a fairly
high correlation to the S&P 500 Index, limiting its
diversification potential for equity-heavy portfolios.
For those with the requisite patience, this fund
remains a star.
Address:
399 Boylston Street
Boston, MA 02116
800-633-3330
Web Address:
Inception:
05-16-91
Advisor:
Loomis Sayles & Company L.P.
Subadvisor:
None
NTF Plans:
Schwab OneSource
Minimum Purchase:
$100000
Add: $50 IRA: $0
Min Auto Inv Plan:
$0
Add:
.
Sales Fees:
No-load
Management Fee:
0.60% mx./0.49% mn.
Actual Fees:
Mgt:0.51% Dist:
.
Expense Projections:
3Yr:$202
5Yr:$351 10Yr:$786
Income Distribution:
Monthly
Data through January 31, 2014
Loomis Sayles Bond Instl
Ticker Status Yield SEC Yield Total Assets Mstar Category
LSBDX Open 5.0% 3.38% $22,090 mil
Multisector Bond
26
17
20
36
39
23
13
18
51
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 01-14
Historical Profile
Return
Risk
Rating
Above Avg
Above Avg
Above Avg
Investment Style
Fixed Income
Income Rtn %Rank Cat
Manager Change
Partial Manager Change
Growth of $10,000
Investment Values of
Fund
Investment Values of
BC Agg Bnd
Performance Quartile
(within Category)
History
10.0
13.0
16.0
19.6
23.8
Portfolio Analysis
11-30-13
Date of
Amount
Value % Net
Total Fixed-Income:472
Maturity
$000
$000 Assets
Canada Govt 2.5%
06-01-15 597,515 574,888 2.67
US Treasury Note 0.25%
09-30-15 439,435 439,401 2.04
Intel Corp
18,412 438,932 2.04
Canada Govt 1.25%
02-01-16 445,239 420,569 1.95
Intel Cv 3.25%
08-01-39 318,925 407,427 1.89
Canada Govt 1%
08-01-16 414,485 388,272 1.80
Ford Mtr Co Del Cv 4.25%
11-15-16 182,545 369,311 1.71
Koenigreich Norwegen 5% 05-15-15 2,107,745 360,843 1.67
US Treasury Bond 2.875%
05-15-43 430,980 357,713 1.66
US Treasury Bond 2.75%
11-15-42 384,695 311,603 1.45
General Mtrs Cv
5,217 276,595 1.28
Vereinigte Mexikanische
12-07-23 3,189,570 275,471 1.28
US Treasury Note 0.125%
12-31-14 258,500 258,440 1.20
Valeant Pharmaceuticals
2,148 235,514 1.09
Canada Govt 4.25%
06-01-18 222,760 233,465 1.08
Norway(Kingdom Of) 4.25% 05-19-17 1,316,210 232,198 1.08
Gen Elec Cap 6.5%
09-28-15 266,643 225,048 1.04
Springleaf Fin Corporati
10-01-21 194,610 206,773 0.96
Canada Govt 3%
12-01-15 201,175 196,538 0.91
Intesa Sanpaolo S P A 14
01-15-19 184,800 185,636 0.86
Current Investment Style
1
1
Avg Eff Duration
5.1 Yrs
Avg Eff Maturity
8.0 Yrs
Avg Credit Quality
BB
Avg Wtd Coupon
5.40%
Avg Wtd Price
100.96% of par
figure provided
by fund
Duration
Ltd Mod Ext
Quality
High
Med Low
Special Securities
Restricted/Illiquid Secs
14
Exotic Mortgage-Backed
0
Emerging-Markets Secs
3
Options/Futures/Warrants
No
Credit Analysis
% bonds 11-30-13
AAA
26
AA
4
A
12
BBB
24
BB
16
B
8
Below B 4
NR/NA 8
Sector Breakdown
% of assets
US Treasury
7
Non US Government
18
Government Related
3
Corporate
59
Agency MBS Pass-Through
0
Agency MBS ARM
0
Agency MBS CMO
0
Non-Agency Residential MBS 0
Commercial MBS
0
Asset-Backed
3
Municipal
3
Cash & Equivalents
7
Other
0
Composition - Net
Cash
5.9
Bonds 71.0
Stocks 6.2
Other 16.8
Coupon Range
% of Bonds Rel Cat
1.00=Category Average
0% PIK
0.1 0.0
0% to 6%
52.6 0.9
6% to 8%
37.4 1.5
8% to 10%
7.6 0.6
More than 10%
2.4 0.7
©
2014Morningstar, Inc.All rights reserved. The information herein isnot representedorwarranted tobe accurate, correct, completeor
timely.Pastperformance isnoguaranteeof future results.Accessupdated reports at
To order reprints, call 312-696-6100.
mfb.morningstar.com.
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