Putnam Capital Manager

Putnam Equity Income Subaccount

The subaccount seeks current income. Capital growth is a secondary objective when consistent with seeking current income.

Fund description

The subaccount employs Putnam's value strategy to invest primarily in stocks of large and mid-sized companies that are undervalued and poised for positive change. The subaccount favors dividend-paying companies and is broadly diversified across market sectors. To help manage volatility and increase current income, up to 20% of the portfolio can be invested in high quality, fixed-income securities.

Sales story

A multidimensional approach that defines value on a daily basisA large-value focus: The fund focuses on large companies whose stocks are priced below their long-term potential, and where there may be a catalyst for positive change.Dividend growth: The fund places a distinct emphasis on companies that can grow their dividends and are able and willing to return cash to shareholders.A disciplined process: The portfolio managers invest using fundamental research and quantitative tools supported by strong risk controls in portfolio construction.

Management team

Lipper ranking ‡ as of 08/31/19

Category: Equity Income Funds

  Percentile ranking Rank/Funds in category
10 yrs. 30% 16/54
1 yr. 64% 51/79
3 yrs. 26% 18/71
5 yrs. 30% 20/66

Risk Characteristics as of 08/31/19

Alpha (%) 1.90
Beta 0.98
R squared 0.96
Standard deviation (3 yrs.) 12.08

Mutual funds that invest in government securities are not guaranteed. Mortgage-backed securities are subject to prepayment risk. Capital gains, if any, are taxable for federal and, in most cases, state purposes. For some investors, investment income may be subject to the federal alternative minimum tax. Income from federally exempt funds may be subject to state and local taxes. Variable annuities are long-term investments designed for retirement purposes. Withdrawals prior to age 59 1/2 may be subject to a 10% IRS penalty.Although value investing targets stocks believed to be priced too low, there is no guarantee they will appreciate.

‡ Lipper is an industry research firm whose rankings are based on total return performance, vary over time, and do not reflect the effects of sales charges. Past performance is not indicative of future results.

Quick facts as of 09/30/19

Fiscal Year End December
Asset Class Putnam Capital Manager
Subaccount Status Open to new investors
Number of issues 99
Turnover (fiscal year end) 14%
Net Assets $1,386M
Inception Date 05/01/03

Holdings

Top 10 holdings as of 08/31/19

JPMorgan Chase 3.98%
Bank Of America Corp 3.13%
Microsoft Corp 3.10%
Citigroup 2.76%
Walmart 2.67%
Northrop Grumman Corp 2.28%
Johnson & Johnson 1.93%
American Tower Corp 1.74%
Apple 1.69%
Merck 1.68%
Top 10 holdings, total: 24.96%

Represents equity portion of portfolio.

Full Portfolio Holdings as of 09/30/19

JPMORGAN CHASE & CO SEDOL 2190385 4.15%
BANK OF AMERICA CORP SEDOL 2295677 3.23%
MICROSOFT CORP SEDOL 2588173 3.05%
CITIGROUP INC SEDOL 2297907 2.88%
WALMART INC SEDOL 2936921 2.70%
NORTHROP GRUMMAN CORP SEDOL 2648806 2.27%
JOHNSON & JOHNSON SEDOL 2475833 1.90%
APPLE INC SEDOL 2046251 1.77%
AMERICAN TOWER CORP SEDOL B7FBFL2 1.63%
AMERICAN ELECTRIC POWER SEDOL 2026242 1.60%
MERCK & CO. INC. SEDOL 2778844 1.59%
PROCTER & GAMBLE CO/THE SEDOL 2704407 1.59%
EXXON MOBIL CORP SEDOL 2326618 1.54%
AT&T INC SEDOL 2831811 1.51%
ASSURED GUARANTY LTD SEDOL B00V7H8 1.46%
COMCAST CORP-CLASS A SEDOL 2044545 1.46%
CONOCOPHILLIPS 1.40%
BECTON DICKINSON AND CO SEDOL 2087807 1.36%
CIGNA CORP SEDOL BHJ0775 1.33%
UNION PACIFIC CORP SEDOL 2914734 1.32%
RAYTHEON COMPANY SEDOL 2758051 1.30%
AMERICAN INTERNATIONAL GROUP SEDOL 2027342 1.28%
ASTRAZENECA PLC-SPONS ADR SEDOL 2989044 1.28%
CHARTER COMMUNICATIONS INC-A SEDOL BZ6VT82 1.26%
AMGEN INC SEDOL 2023607 1.24%
CISCO SYSTEMS INC SEDOL 2198163 1.24%
PEPSICO INC SEDOL 2681511 1.23%
ABBVIE INC SEDOL B92SR70 1.21%
JOHNSON CONTROLS INTERNATION SEDOL BY7QL61 1.20%
NEXTERA ENERGY INC SEDOL 2328915 1.20%
KKR & CO INC -A SEDOL BG1FRR1 1.19%
ELI LILLY & CO SEDOL 2516152 1.15%
RADIAN GROUP INC SEDOL 2173911 1.12%
FIDELITY NATIONAL INFO SERV SEDOL 2769796 1.11%
VALERO ENERGY CORP SEDOL 2041364 1.09%
KROGER CO SEDOL 2497406 1.06%
QUALCOMM INC SEDOL 2714923 1.06%
ENTERPRISE PRODUCTS PARTNERS SEDOL 2285388 1.05%
WELLS FARGO & CO SEDOL 2649100 1.02%
GAMING AND LEISURE PROPERTIE SEDOL BFPK4S5 1.01%
BP PLC SEDOL 0798059 1.01%
HILTON WORLDWIDE HOLDINGS IN SEDOL BYVMW06 0.99%
AIR PRODUCTS & CHEMICALS INC SEDOL 2011602 0.97%
GILEAD SCIENCES INC SEDOL 2369174 0.96%
GENERAL DYNAMICS CORP SEDOL 2365161 0.96%
NRG ENERGY INC SEDOL 2212922 0.93%
PNC FINANCIAL SERVICES GROUP SEDOL 2692665 0.93%
HOME DEPOT INC SEDOL 2434209 0.93%
EXELON CORP SEDOL 2670519 0.92%
HARTFORD FINANCIAL SVCS GRP SEDOL 2476193 0.90%
BJ'S WHOLESALE CLUB HOLDINGS SEDOL BFZNZF8 0.90%
EDISON INTERNATIONAL SEDOL 2829515 0.89%
GOLDMAN SACHS GROUP INC SEDOL 2407966 0.88%
GENERAL MOTORS CO SEDOL B665KZ5 0.88%
DOW INC SEDOL BHXCF84 0.86%
TOTAL SA SEDOL B15C557 0.84%
APTIV PLC SEDOL B783TY6 0.83%
INTEL CORP SEDOL 2463247 0.81%
SOUTHWEST AIRLINES CO SEDOL 2831543 0.79%
PFIZER INC SEDOL 2684703 0.78%
FORTUNE BRANDS HOME & SECURI SEDOL B3MC7D6 0.78%
EATON CORP PLC SEDOL B8KQN82 0.78%
MOLSON COORS BREWING CO -B SEDOL B067BM3 0.78%
HONEYWELL INTERNATIONAL INC SEDOL 2020459 0.74%
PULTEGROUP INC SEDOL 2708841 0.72%
BOSTON PROPERTIES INC SEDOL 2019479 0.71%
BB&T CORP SEDOL 2830904 0.69%
KINDER MORGAN INC SEDOL B3NQ4P8 0.69%
TEXAS INSTRUMENTS INC SEDOL 2885409 0.68%
CAPITAL ONE FINANCIAL CORP SEDOL 2654461 0.67%
STATE STREET CORP SEDOL 2842040 0.65%
DANAHER CORP SEDOL 2250870 0.62%
VERIZON COMMUNICATIONS INC SEDOL 2090571 0.61%
DANAHER CORP 04.7500 CUM CV PFD 0.58%
KEYCORP SEDOL 2490911 0.58%
UNITED RENTALS INC SEDOL 2134781 0.56%
DUPONT DE NEMOURS INC SEDOL BK0VN47 0.55%
STANLEY BLACK & DECKER INC SEDOL B3Q2FJ4 0.52%
WALGREENS BOOTS ALLIANCE INC SEDOL BTN1Y44 0.51%
ALCOA CORP SEDOL BYNF418 0.51%
NXP SEMICONDUCTORS NV SEDOL B505PN7 0.51%
SCHWAB (CHARLES) CORP SEDOL 2779397 0.44%
MARATHON OIL CORP SEDOL 2910970 0.42%
EOG RESOURCES INC SEDOL 2318024 0.42%
FREEPORT-MCMORAN INC SEDOL 2352118 0.40%
DXC TECHNOLOGY CO SEDOL BYXD7B3 0.36%
HALLIBURTON CO SEDOL 2405302 0.30%
MFA FINANCIAL INC SEDOL 2418162 0.30%
ENCANA CORP SEDOL 2793193 0.26%
KEURIG DR PEPPER INC SEDOL BD3W133 0.24%
COTY INC-CL A SEDOL BBBSMJ2 0.22%
SHERWIN-WILLIAMS CO/THE SEDOL 2804211 0.21%
GENERAL ELECTRIC CO SEDOL 2380498 0.20%
OCCIDENTAL PETROLEUM CORP SEDOL 2655408 0.18%
OPORTUN FIN CORP P/P 0.06%
TREASURY BILL 00.0000 03/12/2020 0.05%
EUR/USD 12/18/2019 SSBT 0.00%
CAD/USD 10/16/2019 CITI 0.00%
GLOBAL FASHION GRP P/P 0.00%
EUR/USD 12/18/2019 GSFX 0.00%
CAD/USD 10/16/2019 GSFX 0.00%
EUR/USD 12/18/2019 BANKAM 0.00%
HC BRILLANT SERVICES GMBH P/P 0.00%
NEW BIGFOOT OTHER ASSETS GMBH P/P 0.00%
NEW MIDDLE EAST OTHER ASSETS GMBH P/P 0.00%
GBP/USD 12/18/2019 GSFX -0.01%
GBP/USD 12/18/2019 BCAP-FX -0.01%

Prior top 10 holdings

Top 10 holdings as of 08/31/19
1: JPMorgan Chase 3.98%
2: Bank Of America Corp 3.13%
3: Microsoft Corp 3.10%
4: Citigroup 2.76%
5: Walmart 2.67%
6: Northrop Grumman Corp 2.28%
7: Johnson & Johnson 1.93%
8: American Tower Corp 1.74%
9: Apple 1.69%
10: Merck 1.68%
Holdings represent 24.96% of portfolio
Top 10 holdings as of 07/31/19
1: JPMorgan Chase 4.06%
2: Bank Of America Corp 3.38%
3: Microsoft Corp 2.97%
4: Citigroup 2.95%
5: Walmart 2.50%
6: Northrop Grumman Corp 2.22%
7: Johnson&Johnson 1.90%
8: Apple 1.67%
9: Exxon Mobil Corp 1.61%
10: Merck 1.56%
Holdings represent 24.82% of portfolio
Top 10 holdings as of 06/30/19
1: JPMorgan Chase 3.92%
2: Microsoft Corp 3.37%
3: Bank Of America Corp 3.19%
4: Citigroup 2.91%
5: Walmart 2.50%
6: Northrop Grumman Corp 2.08%
7: Johnson & Johnson 2.03%
8: BD Medical 1.74%
9: Danaher Corp 1.70%
10: Exxon Mobil Corp 1.66%
Holdings represent 25.10% of portfolio
Top 10 holdings as of 05/31/19
1: JPMorgan Chase 3.99%
2: Microsoft Corp 3.33%
3: Bank Of America Corp 3.13%
4: Citigroup 2.76%
5: Walmart 2.46%
6: Northrop Grumman Corp 2.08%
7: Johnson&Johnson 2.04%
8: BD Medical 1.72%
9: Danaher Corp 1.70%
10: Exxon Mobil Corp 1.64%
Holdings represent 24.85% of portfolio

Portfolio Composition as of 08/31/19

Common stock 96.82%
Cash and net other assets 2.54%
Convertible preferred stock 0.64%

Allocations will vary over time. The unclassified sector (where applicable) includes exchange traded funds and other securities not able to be classified by sector.

Mutual funds that invest in government securities are not guaranteed. Mortgage-backed securities are subject to prepayment risk. Capital gains, if any, are taxable for federal and, in most cases, state purposes. For some investors, investment income may be subject to the federal alternative minimum tax. Income from federally exempt funds may be subject to state and local taxes. Variable annuities are long-term investments designed for retirement purposes. Withdrawals prior to age 59 1/2 may be subject to a 10% IRS penalty.Although value investing targets stocks believed to be priced too low, there is no guarantee they will appreciate.

Lipper is an industry research firm whose rankings are based on total return performance, vary over time, and do not reflect the effects of sales charges. Past performance is not indicative of future results.

Top Industry Sectors as of 08/31/19

Financials 21.64%
Health care 14.37%
Industrials 11.28%
Information technology 10.59%
Consumer staples 9.10%
Energy 9.01%
Utilities 5.43%
Communication services 4.80%
Consumer discretionary 4.33%
 
Other
9.45%
Real estate 3.52%
Materials 3.39%
Cash and net other assets 2.54%