Controlled distribution

Putting durable growth themes to work

A thematic approach is a distinctive feature of Large Cap Growth Fund. The team analyzes global trends, as well as problems and potential solutions, to identify which themes could drive sustained growth for businesses over a multi-year time horizon.

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THEME: Controlled distribution

An increasing number of retail brand owners are favoring direct distribution — selling their products solely through their own stores or websites. These companies have few, if any, third-party distributors or indirect sales. They rarely have markdowns or outlet stores, and their products won’t be found at online retailers like Amazon. The advantage of this business model is that it allows businesses to better control inventory, pricing, promotion, and brand presentation. It also leads to a better, more comprehensive relationship with end customers. As a result, direct sales typically yield higher margins than wholesale, with higher conversion rates.

In our research, one key question we ask is how companies sell and distribute their products and services. Controlled distribution can offer a distinct advantage and is our preferred go-to-market strategy.

STOCK: Sherwin-Williams (SHW)

Sherwin-Williams’s largest segment, The Americas Group, is the leading paint retailer serving U.S. professional paint contractors.

  • It employs a direct distribution model, reaching consumers through its 4,000-store network and some large retail partners.
  • The company is known for its ability to develop relationships with its customers and offering comprehensive tools and services for professional painters.

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Putnam Large Cap Growth Fund

See how investing in companies with durable long-term growth prospects, high and/or improving capital returns, and a strong ownership culture drives 5-star performance as of 5/31/2020.

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Learn more about the distinctive thematic approach and how the team analyzes global trends to identify which themes could drive sustained growth for Putnam Large Cap Growth Fund.

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