Active Income

Convertible Securities Fund (Class Y)  (PCGYX)

Offering investors the diverse benefits of convertible securities since 1972

Highlights

Objective

The fund seeks, with equal emphasis, current income and capital appreciation. Its secondary objective is conservation of capital.

Strategy and process

  • Balanced profile: The fund seeks to achieve an equilibrium balancing much of the upside potential of equities, the lower downside risk of bonds, and an attractive current yield.
  • Effective diversification: The fund can provide effective diversification for investor portfolios; convertible securities are not highly correlated with stocks and correlation is near zero versus aggregate bond strategies.
  • Joint venture: Uniquely combining both dedicated fixed income and equity expertise to enhance the ability to fully exploit these hybrid securities.

Fund price

Yesterday’s close 52-week high 52-week low
Net asset value $25.14
0.28% | $0.07
$25.82
07/26/19
$21.28
01/03/19
Historical fund price

Consistency of positive performance over five years

Performance represents 5-year returns in rolling quarter-end periods since inception.

Performance shown does not reflect the effects of any sales charges. Note that returns of 0.00% are counted as positive periods. For complete fund performance, please click on the performance tab.

23.04%

Best 5-year annualized return

(for period ending 03/31/83)


-3.30%

Worst 5-year annualized return

(for period ending 12/31/08)


10.48%

Average 5-year annualized return


Fund facts as of 09/30/19

Total net assets
$730.38M
Turnover (fiscal year end)
68%
Dividend frequency (view rate)
Quarterly
Number of holdings
117
Fiscal year-end
October
CUSIP / Fund code
746476407 / 1807
Inception date
12/30/98
Category
Taxable Income
Open to new investors
Ticker
PCGYX

Management team

Portfolio Manager
Portfolio Manager, Analyst


Manager commentary | Q2 2019

Convertibles combine stock and bond features

Portfolio Manager Rob Salvin explains how stock and bond characteristics contribute to the performance of these hybrid securities.



Performance

  • Total return (%) as of 09/30/19

  • Annual performance as of 09/30/19

Annualized Total return (%) as of 09/30/19

Annualized performance 1 yr. 3 yrs. 5 yrs. 10 yrs.
Before sales charge 5.42% 9.68% 6.33% 9.22%
After sales charge N/A N/A N/A N/A
ICE BofAML U.S. Convertible Index 4.01%10.06%7.29%9.94%

Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results. Share price, principal value, and return will vary, and you may have a gain or loss when you sell your shares. Performance assumes reinvestment of distributions and does not account for taxes. Returns before sales charge do not reflect the current maximum sales charges as indicated below. Had the sales charge been reflected, returns would be lower. Returns at public offering price (after sales charge) for class A and class M shares reflect the current maximum initial sales charges of 5.75% and 3.50% for equity funds and Putnam Multi-Asset Absolute Return Fund, 4.00% and 3.25% for income funds and 2.25% and 0.75% for Putnam Floating Rate Income Fund, Short-Term Municipal Income, Short Duration Bond Fund, and Fixed Income Absolute Return Fund, respectively. Class B share returns reflect the applicable contingent deferred sales charge (CDSC), which is 5% in the first year, declining to 1% in the sixth year, and is eliminated thereafter (except for Putnam Floating Rate Income Fund, which is 3% in the first year, declining to 1% in the fourth year, and is eliminated thereafter). Class C shares reflect a 1% CDSC the first year that is eliminated thereafter. Performance for class B, C, M, N, R, and Y shares prior to their inception is derived from the historical performance of class A shares, adjusted for the applicable sales charge (or CDSC) and, except for class Y shares, the higher operating expenses for such shares (with the exception of Putnam Tax-Free High Yield Fund and Putnam AMT-Free Municipal Fund, which are based on the historical performance of class B shares). Returns at public offering price (after sales charge) for class N shares reflect the current maximum initial sales charge of 1.50%. Class R5/R6 shares, available to qualified employee-benefit plans only, are sold without an initial sales charge and have no CDSC. Class Y shares are generally only available for corporate and institutional clients and have no initial sales charge. Performance for Class R5/R6 shares before their inception are derived from the historical performance of class Y shares, which have not been adjusted for the lower expenses; had they, returns would have been higher. Class A and M shares of Putnam money market funds have no initial sales charge. For a portion of the periods, some funds had expense limitations or had been sold on a limited basis with limited assets and expenses, without which returns would be lower.

Performance snapshot

  Before sales charge After sales charge
1 mt. as of 09/30/19 -1.00% -
YTD as of 10/21/19 18.09% -

Yield

Distribution rate before sales charge
as of 10/21/19
1.73%
Distribution rate after sales charge
as of 10/21/19
1.73%
30-day SEC yield as of 09/30/19 0.91%

Risk-adjusted performance as of 09/30/19

Alpha (3 yrs.) -0.70
Sharpe ratio (3 yrs.) 0.94
Treynor ratio (3 yrs.) 7.90
Information ratio (3 yrs.) -0.24

Volatility as of 09/30/19

Standard deviation (3 yrs.) 8.74%
Beta 1.04
R-squared 0.97

Capture ratio as of 09/30/19

Up-market (3 yrs.) 101.03
Down-market (3 yrs.) 109.90

Lipper rankings as of 09/30/19

Time period Rank/Funds in category Percentile ranking
1 yr. 22/78 28%
3 yrs. 34/75 45%
5 yrs. 27/60 45%
10 yrs. 10/45 22%
Lipper category: Convertible Securities Funds

Morningstar Ratings as of 09/30/19

Time period Funds in category Morningstar Rating
Overall 75
3 yrs. 75
5 yrs. 60
10 yrs. 45
Morningstar category: Convertibles

Distributions

Record/Ex dividend date 09/26/19
Payable date 09/30/19
Income $0.109
Extra income --
Short-term cap. gain --
Long-term cap. gain --

Lipper rankings are based on total return without sales charge relative to all share classes of funds with similar objectives as determined by Lipper. Past performance is not indicative of future results.

The Morningstar RatingTM 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 three-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 three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-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 three-year period actually has the greatest impact because it is included in all three rating periods.

The up-market capture ratio is used to evaluate how well an investment manager performed relative to an index during periods when that index has risen. The ratio is calculated by dividing the manager’s returns by the returns of the index during the up-market, and multiplying that factor by 100. The down-market capture ratio is used to evaluate how well an investment manager performed relative to an index during periods when that index has dropped. The ratio is calculated by dividing the manager’s returns by the returns of the index during the down-market and multiplying that factor by 100.


Compare

See how this fund stacks up against its peers with FundVisualizer®

— or —

New to FundVisualizer? Watch tutorials on how to get started.

For more tutorials, please visit Advisor Tech Tips

** FundVisualizer comparison based on Putnam fund versus the largest fund in its Morningstar category.


Holdings

Top 10 holdings as of 09/30/19

Microchip Technology 3.67%
Bank of America 2.72%
BD Medical 2.04%
Akamai Technologies 1.92%
Danaher Corp 1.90%
Sempra Energy 1.87%
Booking Holdings 1.74%
Crown Castle International Corp 1.68%
Fortive Corp 1.66%
Wells Fargo 1.63%
Top 10 holdings, percent of portfolio 20.83%

Portfolio composition as of 09/30/19

Convertible bonds and notes 72.97%
Mandatories 13.56%
Convertible preferred stock 6.70%
Cash and net other assets 3.26%
Common stock 3.26%
Corporate bonds and notes 0.25%

Equity statistics as of 09/30/19

Median market cap $8.14B
Weighted average market cap $35.70B
Price to book 3.76
Price to earnings 28.30

Fixed income statistics as of 09/30/19

Average stated maturity 6.53 yrs.
Average effective duration 1.58 yrs.
Average yield to maturity -2.33%
Average coupon 2.18%

Maturity detail as of 09/30/19

0 - 1 yr. 14.32%
1 - 5 yrs. 53.21%
5 - 10 yrs. 22.47%
Over 15 yrs. 10.00%

Quality rating as of 09/30/19

A 4.00%
BBB 11.87%
BB 7.82%
B 5.73%
CCC and Below 0.44%
Not Rated 66.88%
Cash and net other assets 3.26%

Fund characteristics will vary over time.

Due to rounding, percentages may not equal 100%.

Consider these risks before investing: Convertible securities prices may fall or fail to rise over time for several reasons, including general financial market conditions, changing market perceptions (including perceptions about the risk of default and expectations about monetary policy or interest rates), changes in government intervention in the financial markets, and factors related to a specific issuer or industry. These and other factors may lead to increased volatility and reduced liquidity in the fund's portfolio holdings. These risks are generally greater for convertible securities issued by small and/or midsize companies. Convertible securities' prices may be adversely affected by underlying common stock price changes. While convertible securities tend to provide higher yields than common stocks, the higher yield may not protect against the risk of loss or mitigate any loss associated with a convertible security's price decline. Convertible securities are subject to credit risk, which is the risk that an issuer of the fund's investments may default on payment of interest or principal. Credit risk is generally greater for below- investment-grade convertible securities. Convertible securities may be less sensitive to interest-rate changes than non-convertible bonds because of their structural features (e.g., convertibility, "put" features). Interest-rate risk is generally greater, however, for longer-term bonds and convertible securities whose underlying stock price has fallen significantly below the conversion price. You can lose money by investing in the fund.

Credit qualities are shown as a percentage of the fund’s net assets. A bond rated BBB or higher (A-3/SP-3 or higher, for short-term debt) is considered investment grade. This chart reflects the highest security rating provided by one or more of Standard & Poor’s, Moody’s, and Fitch. Ratings may vary over time. Equity securities are shown in the not-rated category. Cash and net other assets, if any, represent the market value weights of cash and derivatives and may show a negative market value as a result of the timing of trade versus settlement date transactions. The fund itself has not been rated by an independent rating agency.

Top industry sectors as of 09/30/19

Information technology 35.79%
Health care 18.61%
Communication services 8.54%
Consumer discretionary 7.79%
Financials 6.91%
Utilities 6.33%
Industrials 4.78%
Real estate 4.64%
Cash and net other assets 3.26%
 
Other
3.35%
Energy 1.95%
Materials 0.87%
Consumer staples 0.53%

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

Sectors will vary over time.

Country allocation as of 09/30/19

United States 94.57%
Cash and net other assets 3.26%
Ireland 0.98%
Israel 0.75%
China 0.44%

Expenses

Expense ratio

Class A Class B Class C Class M Class R Class R6 Class Y
Total expense ratio 1.05% 1.80% 1.80% 1.55% 1.30% 0.72% 0.80%
What you pay 1.05% 1.80% 1.80% 1.55% 1.30% 0.72% 0.80%

Sales charge

 Breakpoint Class A Class B Class C Class M Class R Class R6 Class Y
$0-$49,999 5.75% / 5.00% 0.00% / 4.00% 0.00% / 1.00% 3.50% / 3.00% -- -- --
$50,000-$99,999 4.50% / 3.75% 0.00% / 4.00% 0.00% / 1.00% 2.50% / 2.00% -- -- --
$100,000-$249,999 3.50% / 2.75% -- 0.00% / 1.00% 1.50% / 1.00% -- -- --
$250,000-$499,999 2.50% / 2.00% -- 0.00% / 1.00% 1.00% / 1.00% -- -- --
$500,000-$999,999 2.00% / 1.75% -- 0.00% / 1.00% 1.00% / 1.00% -- -- --
$1M-$4M 0.00% / 1.00% -- -- -- -- -- --
$4M-$50M 0.00% / 0.50% -- -- -- -- -- --
$50M+ 0.00% / 0.25% -- -- -- -- -- --

CDSC

  Class A (sales for $1,000,000+) Class B Class C Class M Class R Class R6 Class Y
0 to 9 mts. 1.00% 5.00% 1.00% -- -- -- --
9 to 12 mts. 1.00% 5.00% 1.00% -- -- -- --
2 yrs. 0.00% 4.00% 0.00% -- -- -- --
3 yrs. 0.00% 3.00% 0.00% -- -- -- --
4 yrs. 0.00% 3.00% 0.00% -- -- -- --
5 yrs. 0.00% 2.00% 0.00% -- -- -- --
6 yrs. 0.00% 1.00% 0.00% -- -- -- --
7+ yrs. 0.00% 0.00% 0.00% -- -- -- --

Trail commissions

  Class A Class B Class C Class M Class R Class R6 Class Y
  0.20%1 0.25% 1.00% 0.65% 0.50% 0.00% 0.00%
  0.25%2 NA NA NA NA NA NA
  NA NA NA NA NA NA NA
  1. Through 12/31/89
  2. After 12/31/89

For sales and trail commission information on purchases over $1 million and participant-directed qualified retirement plans, see a Putnam fund prospectus and the statement of additional information.

The ICE BofAML U.S. Convertible Index tracks the performance of publicly issued U.S. dollar denominated convertible securities of U.S. companies. You cannot invest directly in an index.

Consider these risks before investing: Convertible securities prices may fall or fail to rise over time for several reasons, including general financial market conditions, changing market perceptions (including perceptions about the risk of default and expectations about monetary policy or interest rates), changes in government intervention in the financial markets, and factors related to a specific issuer or industry. These and other factors may lead to increased volatility and reduced liquidity in the fund's portfolio holdings. These risks are generally greater for convertible securities issued by small and/or midsize companies. Convertible securities' prices may be adversely affected by underlying common stock price changes. While convertible securities tend to provide higher yields than common stocks, the higher yield may not protect against the risk of loss or mitigate any loss associated with a convertible security's price decline. Convertible securities are subject to credit risk, which is the risk that an issuer of the fund's investments may default on payment of interest or principal. Credit risk is generally greater for below- investment-grade convertible securities. Convertible securities may be less sensitive to interest-rate changes than non-convertible bonds because of their structural features (e.g., convertibility, "put" features). Interest-rate risk is generally greater, however, for longer-term bonds and convertible securities whose underlying stock price has fallen significantly below the conversion price. You can lose money by investing in the fund.

Credit qualities are shown as a percentage of the fund’s net assets. A bond rated BBB or higher (A-3/SP-3 or higher, for short-term debt) is considered investment grade. This chart reflects the highest security rating provided by one or more of Standard & Poor’s, Moody’s, and Fitch. Ratings may vary over time. Equity securities are shown in the not-rated category. Cash and net other assets, if any, represent the market value weights of cash and derivatives and may show a negative market value as a result of the timing of trade versus settlement date transactions. The fund itself has not been rated by an independent rating agency.