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Securitized assets is a broad category for fixed income securities that are backed by residential mortgages, commercial mortgages, consumer loans, and other diverse assets.
Pioneer Securitized Income Fund (XSILX) invests in high yielding (below investment grade) securitized assets and seeks to provide investors with a return stream that can't typically be accessed easily within traditional benchmark focused credit strategies.
Securitized credit can provide high yielding exposure to diverse2 assets whose fundamental risks do not overlap with those typically found in traditional credit portfolios.
Securitizations are typically backed by collateral such as residential mortgages, commercial mortgages, and automobile loans. Lenders may benefit when borrowers have “skin in the game.”
Downside Risk Management
Regulators, rating agencies, consumers, and investors are eager to avoid the mistakes of the past. With so many people fighting the last war, securitized assets may provide resilient fundamentals in the next downturn.
1Correlation - 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).
2Diversification does not assure a profit or protect against loss.
Experience: Amundi Pioneer has invested in securitized assets for over 25 years. We have a dedicated team of securitized specialists with an investment process built around portfolio performance. As of December 31, 2019, Amundi Pioneer has been entrusted to manage over $21.6 billion in securitized assets.
Risk Management: Amundi Pioneer utilizes both proprietary and industry leading software to combine quantitative analysis with years of practical professional experience.
Global Presence, Local Access: While offering clients a boutique level of investment service, our team is backed by Amundi Group’s global scale from over 30 countries worldwide including 6 international investment hubs.
The Securitized Credit universe is comprised of many diverse subsectors that may provide return streams independent of global growth expectations. Historically, the strategy has produced returns with very low correlations to major asset classes.
Recorded on 12/3/2019
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
Please see a prospectus for a complete discussion of the Fund’s risks. The Fund is a non-diversified, closed-end management investment company designed primarily as a long-term investment. The Fund is not a complete investment program. The Fund is newly organized and has no operating history or history of public trading. There is currently no secondary market and the Fund doesn’t expect one to develop. The shares are, therefore, not readily marketable. 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. The Fund is operated as an interval fund, meaning the Fund will seek to conduct quarterly repurchase offers for a percentage of the Fund’s outstanding shares. Although the Fund will make quarterly repurchase offers, the Fund’s shares should be considered illiquid.
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 anticipates borrowing for leveraging purposes, including through reverse repurchase agreements or other means. When the Fund uses leverage, the value of the investment will be more volatile and other risks will tend to be compounded. Leverage generally magnifies the effect of any increase or decrease in the value of the Fund’s underlying assets and creates a risk of loss of value on a larger pool of assets than the Fund would otherwise have. 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.
Certain fees and expenses are associated with an investment in Pioneer Securitized Income Fund.
Before investing, consider the product's investment objectives, risks, charges and expenses. Contact your advisor or Amundi Pioneer 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 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