Active Allocation

Dynamic Asset Allocation Balanced Fund (Class Y)  (PABYX)

A globally diversified fund pursuing a balance of growth and income

Dynamic Asset Allocation Balanced Fund received an  Overall Morningstar Rating  of  

Highlights

Objective

The fund seeks total return.

Strategy and process

  • Global benchmark: The fund starts with a globally diversified benchmark with more efficient exposures relative to a typical 60/40 benchmark.
  • Tactical flexibility: The managers have the ability to tilt overall equity and fixed-income allocations +/-15% and shift exposures within each asset class.
  • Active implementation: Managers proactively research and determine the most efficient implementation for each asset class.

Fund price

Yesterday’s close 52-week high 52-week low
Net asset value $14.56
-0.14% | $-0.02
$15.14
11/07/18
$12.63
12/24/18
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.

17.79%

Best 5-year annualized return

(for period ending 12/31/99)


-3.21%

Worst 5-year annualized return

(for period ending 03/31/09)


6.83%

Average 5-year annualized return


Fund facts as of 09/30/19

Total net assets
$2,751.00M
Turnover (fiscal year end)
129%
Dividend frequency (view rate)
Quarterly
Number of holdings
1778
Fiscal year-end
September
CUSIP / Fund code
746444884 / 1841
Inception date
07/05/94
Category
Asset Allocation
Open to new investors
Ticker
PABYX

Management team

Chief Investment Officer, Global Asset Allocation
Co-Head of Global Asset Allocation
Co-Head of Global Asset Allocation
Portfolio Manager


Manager commentary | Q2 2019

Growth expectations ease

Jason Vaillancourt, Co-Head of Global Asset Allocation, discusses trends in growth and earnings expectations.


Literature


Actively targeting inflation risk for retirement savers
We explain why a dynamic approach to hedging inflation risk in a target-date fund may be a better way to protect a retirement nest egg.
Market volatility returns to "old" normal
Our outlook for stock market volatility sees the levels reached in 2018 continuing, in part because these levels were close to the long-term norm.
Calibrate equity allocations with higher savings rates
Evidence of higher savings rates by plan participants make it reasonable to consider lower equity allocations across the glide path of target-date funds.

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 1.32% 7.37% 6.24% 8.94%
After sales charge N/A N/A N/A N/A
Russell 3000 Index 2.92%12.83%10.44%13.08%
Putnam Balanced Blended Benchmark 5.62%8.54%7.17%8.93%

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 0.95% -
YTD as of 10/18/19 12.84% -

Yield

Distribution rate before sales charge
as of 10/18/19
2.14%
Distribution rate after sales charge
as of 10/18/19
2.14%
30-day SEC yield as of 09/30/19 1.84%

Risk-adjusted performance as of 09/30/19

Sharpe ratio (3 yrs.) 0.74

Volatility as of 09/30/19

Standard deviation (3 yrs.) 7.99%

Lipper rankings as of 09/30/19

Time period Rank/Funds in category Percentile ranking
1 yr. 522/600 87%
3 yrs. 111/537 21%
5 yrs. 78/485 17%
10 yrs. 24/362 7%
Lipper category: Mixed-Asset Trgt Alloc Mod Fds

Morningstar Ratings as of 09/30/19

Time period Funds in category Morningstar Rating
Overall 658
3 yrs. 658
5 yrs. 581
10 yrs. 427
Morningstar category: Allocation--50% to 70% Equity

Distributions

Record/Ex dividend date 09/18/19
Payable date 09/20/19
Income $0.078
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.


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Holdings

Top 10 holdings as of 09/30/19

Gnma Gii30 Ma4652 03.5000 08/20/2047 1.84%
Alphabet 1.77%
Amazon 1.61%
JPMorgan Chase 1.44%
Fhlmc Fr30 Zs4750 Umbs 03.0000 01/01/2048 1.44%
Fnma Fn30 Tba Umbs 04.0000 10/01/2049 1.43%
Fnma Fn15 Tba Umbs 03.0000 10/01/2034 1.23%
Apple 1.18%
Fnma Fn30 Ma3563 Umbs 04.0000 01/01/2049 1.18%
Microsoft 1.14%
Top 10 holdings, percent of portfolio 14.26%

Portfolio composition as of 09/30/19

U.S. large-cap equity 47.04%
U.S. Investment-grade bonds 30.88%
International equity 9.41%
U.S. small- and mid-cap equity 8.94%
U.S. High-yield bonds 3.72%

Fixed income statistics as of 09/30/19

Average effective maturity 8.24 yrs.
Average effective duration 2.01 yrs.

Fund characteristics will vary over time.

Due to rounding, percentages may not equal 100%.

Consider these risks before investing: Allocation of assets among asset classes may hurt performance. The value of investments in the fund’s portfolio may fall or fail to rise over extended periods of time for a variety of reasons, including general economic, political or financial market conditions, investor sentiment and market perceptions, government actions, geopolitical events or changes, and factors related to a specific issuer, asset class, geography, industry or sector. These and other factors may lead to increased volatility and reduced liquidity in the fund’s portfolio holdings. International investing involves currency, economic, and political risks. Emerging-market securities carry illiquidity and volatility risks. Investments in small and/or midsize companies increase the risk of greater price fluctuations. Growth stocks may be more susceptible to earnings disappointments, and value stocks may fail to rebound. Funds that invest in government securities are not guaranteed. Mortgage-backed investments, unlike traditional debt investments, are also subject to prepayment risk, which means that they may increase in value less than other bonds when interest rates decline and decline in value more than other bonds when interest rates rise. Bond investments are subject to interest-rate risk (the risk of bond prices falling if interest rates rise) and credit risk (the risk of an issuer defaulting on interest or principal payments). Default risk is generally higher for non-qualified mortgages. Interest-rate risk is generally greater for longer-term bonds, and credit risk is generally greater for below-investment-grade bonds. Unlike bonds, funds that invest in bonds have fees and expenses. The use of derivatives may increase these risks by increasing investment exposure (which may be considered leverage) or, in the case of over-the-counter instruments, because of the potential inability to terminate or sell derivatives positions and the potential failure of the other party to the instrument to meet its obligations. You can lose money by investing in the fund.


Expenses

Expense ratio

Class A Class B Class C Class M Class R Class R5 Class R6 Class Y
Total expense ratio 0.97% 1.72% 1.72% 1.47% 1.22% 0.72% 0.62% 0.72%
What you pay 0.97% 1.72% 1.72% 1.47% 1.22% 0.72% 0.62% 0.72%

Sales charge

 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. 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 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 3000 Index is an unmanaged index of the 3,000 largest U.S. companies. The Putnam Balanced Blended Benchmark is a benchmark administered by Putnam Management, comprising 50% the Russell 3000 Index, 35% the Bloomberg Barclays U.S. Aggregate Bond Index, 10% the MSCI EAFE Index (ND), and 5% the JPMorgan Developed High Yield Index. You cannot invest directly in an index.

Consider these risks before investing: Allocation of assets among asset classes may hurt performance. The value of investments in the fund’s portfolio may fall or fail to rise over extended periods of time for a variety of reasons, including general economic, political or financial market conditions, investor sentiment and market perceptions, government actions, geopolitical events or changes, and factors related to a specific issuer, asset class, geography, industry or sector. These and other factors may lead to increased volatility and reduced liquidity in the fund’s portfolio holdings. International investing involves currency, economic, and political risks. Emerging-market securities carry illiquidity and volatility risks. Investments in small and/or midsize companies increase the risk of greater price fluctuations. Growth stocks may be more susceptible to earnings disappointments, and value stocks may fail to rebound. Funds that invest in government securities are not guaranteed. Mortgage-backed investments, unlike traditional debt investments, are also subject to prepayment risk, which means that they may increase in value less than other bonds when interest rates decline and decline in value more than other bonds when interest rates rise. Bond investments are subject to interest-rate risk (the risk of bond prices falling if interest rates rise) and credit risk (the risk of an issuer defaulting on interest or principal payments). Default risk is generally higher for non-qualified mortgages. Interest-rate risk is generally greater for longer-term bonds, and credit risk is generally greater for below-investment-grade bonds. Unlike bonds, funds that invest in bonds have fees and expenses. The use of derivatives may increase these risks by increasing investment exposure (which may be considered leverage) or, in the case of over-the-counter instruments, because of the potential inability to terminate or sell derivatives positions and the potential failure of the other party to the instrument to meet its obligations. You can lose money by investing in the fund.