Equity Income Fund  (PEYAX)

Seeking to harness the power of stock dividends since 1977


Track this fund
Portfolio Manager Darren A. Jaroch, CFA

“I’ve always been patient and disciplined. And I think those traits have served me well as an investor.”

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ratings as of
Large Value (funds in category)
Overall
(1077)
3 yrs.
(1077)
5 yrs.
(962)
10 yrs.
(685)

Objective

The fund seeks capital growth and current income.

Strategy and process

  • A 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.

Fund price

Yesterday’s close 52-week high 52-week low
Net asset value $25.01
1.46% | $0.36
$26.12
01/26/18
$21.83
04/13/17
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.

21.64%

Best 5-year annualized return

(for period ending 06/30/99)


-2.36%

Worst 5-year annualized return

(for period ending 03/31/09)


10.46%

Average 5-year annualized return


Fund facts as of 01/31/18

Total net assets
$13,051.46M
Turnover (fiscal year end)
11%
Dividend frequency (view rate)
Quarterly
Number of holdings
115
Fiscal year-end
November
CUSIP / Fund code
746745108 / 0010
Inception date
06/15/77
Category
Value
Open to new investors
Ticker
PEYAX

Management team

Portfolio Manager
Portfolio Manager, Analyst


Manager commentary | Q4 2017

Stock valuations could shift as central bank tightens

Portfolio Manager Darren Jaroch talks about the effect of central bank tightening on liquidity in the market.


Literature

Fund documents

Fact Sheet (A share) (PDF)
Fact Sheet (Y share) (PDF)
Fact Sheet (VT share) (PDF)
Prospectus (PDF)
Annual Report (PDF)
Semiannual Report (PDF)
Brochure (PDF)
Proxy voting results (Form N-PX) (PDF)
Quarterly commentary (PDF)
Equity Outlook (PDF)
Comparing Putnam's U.S. equity funds (PDF)

Value opportunities gain traction in turmoil
Beneath dire headlines about plunging markets, we are seeing value opportunities assert themselves.
The dollar could be a drag on dividends
The stronger U.S. dollar can challenge corporate earnings and the ability of companies to pay dividends.

Performance

  • Total return (%) as of 12/31/17

  • Annual performance as of 12/31/17

Annualized performance 1 yr. 3 yrs. 5 yrs. 10 yrs.
Before sales charge 18.69% 9.28% 14.07% 8.67%
After sales charge 11.86% 7.14% 12.73% 8.03%
Russell 1000 Value Index 13.66% 8.65% 14.04% 7.10%

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. To obtain the most recent month-end performance, visit putnam.com. 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 Absolute Return 500 Fund and 700 Fund, and 4.00% and 3.25% for income funds (1.00% and 0.75% for Putnam Floating Rate Income Fund, Putnam Absolute Return 100 Fund and 300 Fund, and Putnam Short-Term Municipal Income 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, Putnam Absolute Return 100 Fund and 300 Fund, and Putnam Short-Term Municipal Income Fund, which is 1% in the first year, declining to 0.5% in the second 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, R, T1, 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). 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, M, and T1 shares of Putnam money market funds have no initial sales charge. For a portion of the period, some funds had expenses 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 01/31/18 4.90 % -1.14 %
YTD as of 02/23/18 2.04 % -3.83 %

Yield

Distribution rate before sales charge
as of 02/23/18
0.99%
Distribution rate after sales charge
as of 02/23/18
0.93%
30-day SEC yield as of 01/31/18
(after sales charge)
0.91%

Risk-adjusted performance as of 01/31/18

Alpha (3 yrs.) 1.28
Sharpe ratio (3 yrs.) 1.22
Treynor ratio (3 yrs.) 12.50
Information ratio (3 yrs.) 0.36

Volatility as of 01/31/18

Standard deviation (3 yrs.) 9.77%
Beta 0.96
R-squared 0.95

Capture ratio as of 01/31/18

Up-market (3 yrs.) 99.20
Down-market (3 yrs.) 88.71

Lipper rankings as of 01/31/18

Equity Income Funds Percentile ranking Rank/Funds in category
1 yr. 28% 148/534
3 yrs. 28% 126/459
5 yrs. 18% 65/376
10 yrs. 6% 14/234

Morningstar ratings as of 01/31/18

Large Value Rating Funds in category
Overall (1077)
3 yrs. (1077)
5 yrs. (962)
10 yrs. (685)

Distributions

Record/Ex dividend date 12/27/17
Payable date 12/29/17
Income $0.062
Extra income --
Short-term cap. gain --
Long-term cap. gain $0.413

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.


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Holdings

Top 10 holdings as of 01/31/18

JPMorgan Chase 4.05%
Bank of America 3.52%
Citigroup 3.25%
Microsoft 3.21%
Northrop Grumman 2.71%
Johnson & Johnson 2.02%
Exxon Mobil 1.91%
Dowdupont 1.77%
Apple 1.74%
BD Medical 1.69%
Top 10 holdings, percent of portfolio 25.87%

Full portfolio holdings as of 12/31/17

JPMORGAN CHASE & CO 3.91%
BANK OF AMERICA CORP 3.39%
CITIGROUP INC 3.22%
MICROSOFT CORP 3.02%
NORTHROP GRUMMAN CORP 2.79%
JOHNSON & JOHNSON 2.14%
EXXON MOBIL CORP 1.91%
APPLE INC 1.84%
DOWDUPONT INC 1.74%
SCHWAB (CHARLES) CORP 1.70%
ALCOA CORP 1.64%
AT&T INC 1.62%
BECTON DICKINSON AND CO 1.56%
CONOCOPHILLIPS 1.53%
CIGNA CORP 1.50%
MARATHON OIL CORP 1.50%
COMCAST CORP-CLASS A 1.33%
RAYTHEON COMPANY 1.30%
WELLS FARGO & CO 1.27%
TEXAS INSTRUMENTS INC 1.23%
VALERO ENERGY CORP 1.22%
DXC TECHNOLOGY CO 1.19%
AMGEN INC 1.15%
AMERICAN INTERNATIONAL GROUP 1.13%
UNION PACIFIC CORP 1.13%
GILEAD SCIENCES INC 1.12%
REGIONS FINANCIAL CORP 1.12%
STATE STREET CORP 1.12%
PEPSICO INC 1.11%
MERCK & CO. INC. 1.10%
JOHNSON CONTROLS INTERNATION 1.08%
KIMBERLY-CLARK CORP 1.04%
ASTRAZENECA PLC-SPONS ADR 1.03%
SOUTHWEST AIRLINES CO 1.00%
CISCO SYSTEMS INC 0.99%
GOLDMAN SACHS GROUP INC 0.97%
AMERICAN TOWER CORP 0.96%
CHARTER COMMUNICATIONS INC-A 0.94%
EOG RESOURCES INC 0.93%
O'REILLY AUTOMOTIVE INC 0.93%
TOTAL SA 0.91%
ALPHABET INC-CL C 0.90%
ELI LILLY & CO 0.90%
RADIAN GROUP INC 0.90%
DR PEPPER SNAPPLE GROUP INC 0.88%
HILTON WORLDWIDE HOLDINGS IN 0.88%
HARTFORD FINANCIAL SVCS GRP 0.87%
ASSURED GUARANTY LTD 0.86%
EXELON CORP 0.86%
KKR & CO LP 0.83%
KROGER CO 0.82%
APTIV PLC 0.81%
FIDELITY NATIONAL INFO SERV 0.81%
PFIZER INC 0.81%
CHUBB LTD 0.80%
HALLIBURTON CO 0.78%
HOME DEPOT INC 0.78%
CAPITAL ONE FINANCIAL CORP 0.77%
DANAHER CORP 0.77%
ANADARKO PETROLEUM CORP 0.76%
KRAFT HEINZ CO/THE 0.76%
INTEL CORP 0.75%
MOLSON COORS BREWING CO -B 0.75%
AIR PRODUCTS & CHEMICALS INC 0.74%
BOSTON PROPERTIES INC 0.73%
SEALED AIR CORP 0.71%
HONEYWELL INTERNATIONAL INC 0.69%
AGILENT TECHNOLOGIES INC 0.67%
NXP SEMICONDUCTORS NV 0.67%
CF INDUSTRIES HOLDINGS INC 0.65%
KEYCORP 0.65%
CALPINE CORP 0.62%
AMERICAN ELECTRIC POWER 0.61%
APPLIED MATERIALS INC 0.60%
BALL CORP 0.58%
SUNCOR ENERGY INC 0.58%
PULTEGROUP INC 0.56%
VERIZON COMMUNICATIONS INC 0.55%
VODAFONE GROUP PLC-SP ADR 0.55%
EDISON INTERNATIONAL 0.53%
GAMING AND LEISURE PROPERTIE 0.52%
CHENIERE ENERGY INC 0.50%
FEDERAL REALTY INVS TRUST 0.50%
BROADCOM LTD 0.48%
WALGREENS BOOTS ALLIANCE INC 0.48%
GENERAL MOTORS CO 0.47%
MANDATORY EXCH TRUST P/P 144A 05.7500 CV PFD 0.47%
NEXTERA ENERGY INC 0.45%
COTY INC-CL A 0.42%
AIRBUS SE 0.40%
FORTIVE CORP 0.40%
GENERAL ELECTRIC CO 0.40%
INVESCO LTD 0.40%
MFA FINANCIAL INC 0.33%
PIONEER NAT RES CO 0.31%
NRG ENERGY INC 0.30%
KINDER MORGAN INC 0.25%
P G & E CORP 0.25%
DISH NETWORK CORP-A 0.23%
COLGATE-PALMOLIVE CO 0.20%
DELPHI TECHNOLOGIES PLC 0.16%
AMERICAN TOWER CORP 05.5000 CV PFD 0.13%
ARCONIC INC 0.08%
OPORTUN FIN CORP P/P SERIES H PFD 0.06%
OPORTUN FIN CORP P/P 0.02%
OPORTUN FIN F-1 PFD CV P/P 0.02%
OPORTUN FIN G-1 PFD CV P/P 0.02%
OPORTUN FIN F PFD CV P/P 0.01%
CAD/USD 01/17/2018 CITI 0.00%
CAD/USD 01/17/2018 GSFX 0.00%
EUR/USD 03/21/2018 BANKAM 0.00%
EUR/USD 03/21/2018 GSFX 0.00%
EUR/USD 03/21/2018 SSBT 0.00%
FABFURNISH GMBH P/P 0.00%
GBP/USD 03/21/2018 BCAP-FX 0.00%
GBP/USD 03/21/2018 GSFX 0.00%
GLOBAL FASHION GRP 0.00%
GLOBAL FASHION GRP P/P 0.00%
NEW BIGFOOT OTHER ASSETS GMBH P/P 0.00%
NEW MIDDLE EAST OTHER ASSETS GMBH P/P 0.00%
OPORTUN FIN A-1 PFD CV P/P 0.00%
OPORTUN FIN B-1 PFD CV P/P 0.00%
OPORTUN FIN C-1 PFD CV P/P 0.00%
OPORTUN FIN D-1 PFD CV P/P 0.00%
OPORTUN FIN E-1 PFD CV P/P 0.00%
THE EURO EUR CALL ACCOUNT 0.00%

Prior top 10 holdings

Top 10 holdings as of 01/31/18
JPMorgan Chase
Bank of America
Citigroup
Microsoft
Northrop Grumman
Johnson & Johnson
Exxon Mobil
Dowdupont
Apple
BD Medical
Holdings represent 25.87% of portfolio
Top 10 holdings as of 12/31/17
JPMorgan Chase
Bank Of America Corp
Citigroup
Microsoft Corp
Northrop Grumman Corp
Johnson & Johnson
Exxon Mobil Corp
Apple
Dowdupont
Charles Schwab Corp/The
Holdings represent 25.66% of portfolio
Top 10 holdings as of 11/30/17
JPMorgan Chase
Citigroup
Bank Of America Corp
Microsoft Corp
Northrop Grumman Corp
Johnson & Johnson
Exxon Mobil Corp
Apple
Dowdupont
Becton Dickinson And
Holdings represent 25.23% of portfolio
Top 10 holdings as of 10/31/17
JPMorgan Chase
Citigroup
Bank Of America Corp
Microsoft Corp
Northrop Grumman Corp
Johnson & Johnson
Exxon Mobil Corp
Apple
Dowdupont
Becton Dickinson And
Holdings represent 25.28% of portfolio

Portfolio composition as of 01/31/18

Common stock 97.28%
Cash and net other assets 1.95%
Convertible preferred stock 0.77%

Equity statistics as of 01/31/18

Median market cap $40.15B
Weighted average market cap $160.22B
Price to book 2.36
Price to earnings 16.56

Fund characteristics will vary over time.

Due to rounding, percentages may not equal 100%.

Consider these risks before investing: Value stocks may fail to rebound, and the market may not favor value-style investing. Income provided by the fund may be reduced by changes in the dividend policies of, and the capital resources available at, the companies in which the fund invests. Stock prices may fall or fail to rise over time for several reasons, including general financial market conditions and factors related to a specific company or industry. You can lose money by investing in the fund.

Top Industry Sectors as of 01/31/18

Financials 24.81%
Health care 12.85%
Information technology 12.05%
Energy 10.96%
Industrials 9.08%
Consumer discretionary 7.27%
Consumer staples 6.61%
Materials 5.84%
Utilities 3.35%
 
Other
7.18%
Real estate 2.66%
Telecommunication services 2.57%
Cash and net other assets 1.95%

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

Sectors will vary over time.


Expenses

Expense ratio

Class A Class B Class C Class M Class R Class R5 Class R6 Class Y
Total expense ratio 0.94% 1.69% 1.69% 1.44% 1.19% 0.66% 0.56% 0.69%
What you pay 0.94% 1.69% 1.69% 1.44% 1.19% 0.66% 0.56% 0.69%

Sales charge/Dealer allowance

 Breakpoint Class A Class B Class C Class M Class R Class R5 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 R5 Class R6 Class Y
0 to 9 mts. 1.00% 5.00% 1.00% -- -- -- -- --
9 to 12 mts. 0.00% 5.00% 1.00% -- -- -- -- --
2 yrs. -- 4.00% 0.00% -- -- -- -- --
3 yrs. -- 3.00% 0.00% -- -- -- -- --
4 yrs. -- 3.00% 0.00% -- -- -- -- --
5 yrs. -- 2.00% 0.00% -- -- -- -- --
6 yrs. -- 1.00% 0.00% -- -- -- -- --
7+ yrs. -- 0.00% 0.00% -- -- -- -- --

Trail commissions

  Class A Class B Class C Class M Class R Class R5 Class R6 Class Y
  0.25% 0.25% 1.00% 0.65% 0.50% 0.00% 0.00% 0.00%
  NA NA NA NA NA NA NA NA
  NA NA NA NA NA NA NA NA

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 Russell 1000 Value Index is an unmanaged index of those companies in the large-cap Russell 1000 Index chosen for their value orientation. You cannot invest directly in an index.

Consider these risks before investing: Value stocks may fail to rebound, and the market may not favor value-style investing. Income provided by the fund may be reduced by changes in the dividend policies of, and the capital resources available at, the companies in which the fund invests. Stock prices may fall or fail to rise over time for several reasons, including general financial market conditions and factors related to a specific company or industry. You can lose money by investing in the fund.