Core Equity Fund received an Overall Morningstar Rating™
out of 1,302 funds in the Large Blend category based on total return as of 01/31/24.
The fund outperformed 100% of its peers
The fund ranked in the top 1% in the Morningstar Large Blend category, outperforming all of its active and passive peers since its inception through 9/30/23.
Annualized fund performance
Since inception, as of 12/31/23
Outperformed all of its peers
Morningstar Large Blend category, as of 9/30/23
Morningstar Large Blend category, as of 9/30/23
The fund has a record of performance consistency
Putnam Core Equity Fund delivered a positive return for every rolling 5-year period since its inception.
Consistency of positive performance over five years
Performance shown does not reflect the effects of any sales charges. Click on the dots to see specific returns in each 5-year period as of the date revealed. Note that returns of 0.00% are counted as positive periods. For complete fund performance, please click on the performance tab.
Best 5-year annualized return
(for period ending 06/30/21)
Worst 5-year annualized return
(for period ending 03/31/20)
Average 5-year annualized return
Flexibility to invest in best ideas regardless of style
A key benefit of the fund’s approach is flexibility. Investing in all styles and capitalization sizes may help reduce volatility while enabling the portfolio managers to target a wider range of opportunities.
- They can invest in their best ideas in both growth and value stocks and across all capitalization sizes.
- This flexibility stays intact even if market leadership changes — when some investors may be tempted to chase performance.
- The managers can own companies through their entire growth cycles, without being forced to sell holdings due to style or size restraints.
Managers with decades of experience
Backed by a collaborative research team
Jerry and Arthur work together closely and are supported by Putnam’s research team, which is composed of sector and industry experts.
Fundamental stock-selection process
The Putnam Core Equity Fund stock-selection process is driven by rigorous fundamental research. The managers seek companies that are either temporarily mispriced by the market or that have long and durable runways for growth that will compound returns for years to come.
Putnam Core Equity Fund was named 2023 IBD Best Mutual Funds winner
Read the Q&A with the managers in Investor's Business Daily
Key criteria for companies
in the portfolio
- Simple, predictable, free cash flow generator
- Good ROI and good capital allocator
- Not reliant on outside capital; self-financing
- High barriers to entry (protective moat)
- Controls its own destiny as much as possible
- Large market opportunity
- Unique business model or asset
- Strong balance sheet
- Excellent management, preferably a founder or significant shareholder
Idea buckets: One component of the fund’s unique approach
The fund’s managers research stocks across a wide range of sectors and industries. Their comprehensive process includes a few “buckets” of idea generation.
Legacy names. These are stocks the managers have followed for decades. They have gained a deep knowledge and familiarity with the businesses. As a result, they are likely to spot opportunities that may be overlooked by others — a shift in the industry, a new demand outlook for a product, or even smaller developments that could lead to meaningful outperformance in a stock.
Smart money. The portfolio managers are especially attracted to companies with management teams that have a significant percentage of their personal net worth invested in company stock. Identifying such opportunities involves screening for heavy insider ownership, tracking the buying and selling activity of company insiders, and paying attention to the activity of other well-regarded investors. This can simply flag new ideas to do work on, or conversely provide an early warning for trouble in an existing holding that requires more due diligence.
Special situations. These stocks tend to be more idiosyncratic in nature or tied to a differentiated story. These ideas would typically have an attractive risk/reward profile, but in some way do not fit a standard core holding. Examples could include busted IPOs, convertibles, SPACs, non-U.S. stocks, or other securities.
Insights from Putnam’s equity team
Putnam’s equity portfolio managers and analysts offer their perspectives on investing, the economy, and the financial markets.
The Morningstar Rating™ for funds, or "star rating," is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a 3-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its 3-, 5-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% 3-year rating for 36–59 months of total returns, 60% 5-year rating/40% 3-year rating for 60–119 months of total returns, and 50% 10-year rating/30% 5-year rating/20% 3-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent 3-year period actually has the greatest impact because it is included in all three rating periods. Ratings do not take into account the effects of sales charges and loads.