Emerging Markets Equity Fund (Class Y)  (PEMYX)

Pursuing growth opportunities in developing economies

Emerging Markets Equity Fund received an  Overall Morningstar Rating  of  

Daniel Graña talks with Bloomberg TV

Emerging markets fund manager discusses the dollar, China, tariffs, and technology

    Highlights

    Objective

    The fund seeks long-term capital appreciation.

    Strategy and process

    • Growth potential: Emerging markets offer the potential for continued growth due to attractive demographics, rising wealth, and increased investment in infrastructure in developing countries.
    • A disciplined process: By integrating multiple perspectives into portfolio construction, the fund manager is able to better evaluate individual companies within the context of changing local and global influences.
    • Rigorous research: The manager leverages Putnam's global research platform to identify opportunities across emerging and select frontier markets.

    Fund price

    Yesterday’s close 52-week high 52-week low
    Net asset value $11.59
    -1.02% | $-0.12
    $14.21
    01/26/18
    $11.23
    09/11/18
    Historical fund price

    Fund facts as of 08/31/18

    Total net assets
    $141.09M
    Turnover (fiscal year end)
    137%
    Dividend frequency
    Annually
    Number of holdings
    97
    Fiscal year-end
    August
    CUSIP / Fund code
    746764604 / 1859
    Inception date
    09/29/08
    Category
    Blend
    Open to new investors
    Ticker
    PEMYX

    Management team

    Portfolio Manager


    Manager commentary | Q2 2018

    Emerging markets in crosshairs of trade war

    Portfolio Manager Daniel Graña discusses the emerging markets whose economic models depend on growing global trade.


    Literature


    Performance

    • Total return (%) as of 06/30/18

    • Annual performance as of 06/30/18

    Annualized Total return (%) as of 06/30/18

    Annualized performance 1 yr. 3 yrs. 5 yrs. Life (inception: 09/29/08 )
    Before sales charge 14.69% 7.82% 6.80% 5.03%
    After sales charge N/A N/A N/A N/A
    MSCI Emerging Markets Index (ND) 8.20% 5.60% 5.01% --

    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, and 4.00% and 3.25% for income funds (2.25% and 0.75% for Putnam Short Duration Bond Fund and 1.00% and 0.75% for Putnam Floating Rate Income Fund, Putnam Fixed Income Absolute Return 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 Short Duration Bond Fund, Putnam Fixed Income Absolute Return 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, 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. 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 08/31/18 -4.42 % -
    YTD as of 09/21/18 -9.22 % -

    Risk-adjusted performance as of 08/31/18

    Alpha (3 yrs.) 2.96
    Sharpe ratio (3 yrs.) 0.94
    Treynor ratio (3 yrs.) 14.21
    Information ratio (3 yrs.) 0.27

    Volatility as of 08/31/18

    Standard deviation (3 yrs.) 12.88%
    Beta 0.85
    R-squared 0.88

    Capture ratio as of 08/31/18

    Up-market (3 yrs.) 92.51
    Down-market (3 yrs.) 78.67

    Lipper rankings as of 08/31/18

    Time period Rank/Funds in category Percentile ranking
    1 yr. 165/844 20%
    3 yrs. 71/707 11%
    5 yrs. 56/507 12%
    10 yrs. --  
    Lipper category: Emerging Markets Funds

    Morningstar Ratings as of 08/31/18

    Time period Funds in category Morningstar Rating
    Overall 695
    3 yrs. 695
    5 yrs. 500
    Morningstar category: Diversified Emerging Mkts

    Distributions

    Record/Ex dividend date 12/21/17
    Payable date 12/26/17
    Income $0.031
    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 08/31/18

    Tencent Holdings 6.03%
    Samsung Electronics 5.53%
    Alibaba Group Holding 5.27%
    Taiwan Semiconductor Manufacturing 2.91%
    Naspers 2.69%
    Ping An Insurance Group Of China 2.07%
    Lukoil Pjsc 1.89%
    Sasol 1.82%
    Mediatek 1.69%
    China Construction Bank Corp 1.67%
    Top 10 holdings, percent of portfolio 31.57%

    Full portfolio holdings as of 06/30/18

    TENCENT HOLDINGS LTD 5.90%
    ALIBABA GROUP HOLDING-SP ADR 5.40%
    SAMSUNG ELECTRONICS CO LTD 3.78%
    ISHARES MSCI EMERGING MARKET 2.93%
    NASPERS LTD-N SHS 2.89%
    TAIWAN SEMICONDUCTOR MANUFAC 2.26%
    LUKOIL PJSC-SPON ADR 1.91%
    MEDIATEK INC 1.90%
    SBERBANK PJSC -SPONSORED ADR 1.84%
    CHINA CONSTRUCTION BANK-H 1.69%
    SASOL LTD 1.58%
    CHINA WATER AFFAIRS GROUP 1.44%
    CTBC FINANCIAL HOLDING CO LT 1.40%
    CATHAY FINANCIAL HOLDING CO 1.39%
    HOUSING DEVELOPMENT FINANCE 1.38%
    EDELWEISS FINANCIAL SERVICES 1.33%
    YANDEX NV-A 1.31%
    PING AN INSURANCE GROUP CO-H 1.30%
    CNOOC LTD 1.28%
    WALMART DE MEXICO SAB DE CV 1.28%
    GRUMA S.A.B.-B 1.26%
    CHAILEASE HOLDING CO LTD 1.24%
    CANVEST ENVIRONMENTAL PROTEC 1.01%
    HANA FINANCIAL GROUP 0.99%
    IND & COMM BK OF CHINA-H 0.99%
    KEI INDUSTRIES LTD 0.99%
    XIABUXIABU CATERING 0.99%
    ADVANCED INFO SERVICE-FOR RG 0.97%
    TAIWAN DOLLAR CALL ACCOUNT 0.97%
    BRILLIANCE CHINA AUTOMOTIVE 0.96%
    SAMSUNG ELECTRONICS-PREF 0.96%
    GENTERA SAB DE CV 0.95%
    SHENGYI TECH 144A/REGS WARRANT 05/24/2019 0.95%
    HDFC BANK LIMITED 0.94%
    CHINA EVERBRIGHT GREENTECH L 0.92%
    DISCOVERY LTD 0.91%
    SUNNY OPTICAL TECH 0.91%
    HANGZHOU HIKVISION DIGITAL - A 144A/REGS WARRANT 02/11/2019 0.89%
    SUZANO PAPEL E CELULOSE SA 0.89%
    HONG KONG EXCHANGES & CLEAR 0.85%
    EMAAR DEVELOPMENT PJSC 0.84%
    GRAPE KING BIO LTD 0.83%
    GRUPO FINANCIERO BANORTE-O 0.83%
    PETRONAS CHEMICALS GROUP BHD 0.83%
    DB INSURANCE CO LTD 0.82%
    FORMOSA PLASTICS CORP 0.82%
    INDUSIND BANK LTD 0.82%
    AL RAJHI BANK 144A/REGS WARRANT 02/21/2019 0.81%
    LARSEN & TOUBRO INFO 0.81%
    MODETOUR NETWORK INC 0.81%
    XINYI GLASS HOLDINGS LTD 0.80%
    KEC INTERNATIONAL LTD 0.79%
    CAFE24 CORP 0.78%
    MEGACABLE HOLDINGS-CPO 0.78%
    MONDI PLC 0.78%
    NINE DRAGONS PAPER HOLDINGS 0.78%
    SHRIRAM TRANSPORT FINANCE 0.78%
    SINO-AMERICAN SILICON PRODUC 0.78%
    INDORAMA VENTURES-FOREIGN 0.77%
    WULIANGYE YIBIN 144A/REGS WARRANT 04/12/2019 0.77%
    SUNNY FRIEND ENVIRONMENTAL T 0.76%
    UNITED TRACTORS TBK PT 0.76%
    WIZZ AIR HLDG PLC 0.75%
    CHINA TRADITIONAL CHINESE ME 0.72%
    GEOPARK LTD 0.72%
    SHINSEGAE INC 0.72%
    GLOBALWAFERS CO LTD 0.70%
    INFOSYS LTD 0.69%
    CTRIP.COM INTERNATIONAL-ADR 0.66%
    POYA INTERNATIONAL CO LTD 0.65%
    FLEURY SA 0.63%
    JNBY DESIGN LTD 0.63%
    INARI AMERTRON BHD 0.61%
    LOCALIZA RENT A CAR 0.61%
    SPORTON INTERNATIONAL INC 0.61%
    TUPY SA 0.61%
    CLEAN TEQ HOLDINGS LTD 0.59%
    IRB BRASIL RESSEGUROS SA 0.59%
    SKIPPER LTD 0.58%
    CTCI CORP 0.57%
    CHINA STATE CONSTRUCTION INT 0.55%
    HYUNDAI MARINE 0.54%
    NCSOFT CORP 0.52%
    WASKITA BETON PRECAST TBK PT 0.51%
    GRUPO FINANCIERO GALICIA-ADR 0.49%
    THE FOSCHINI GROUP LTD 0.49%
    AZUL SA-ADR 0.48%
    MOTOR OIL (HELLAS) SA 0.48%
    CHINA FORTUNE LAND DEVELOPME- A 144A/REGS WARRANT 03/25/2019 0.46%
    HILONG HOLDING LTD 0.33%
    JUBILANT FOODWORKS LTD 0.31%
    JUBILANT FOODWORKS LTD 0.31%
    KOREAN WON CALL ACCOUNT 0.23%
    BRAZILIAN REAL CALL ACCOUNT 0.14%
    FIRST ABU DHABI BANK PJSC 0.13%
    DILIP BUILDCON LTD 0.03%
    GLOBAL FASHION GRP P/P 0.02%
    UAE DIRHAM CALL ACCOUNT 0.02%
    GLOBAL FASHION GRP 0.01%
    CHILEAN PESO CALL ACCOUNT 0.00%
    EGYPTIAN POUND CALL ACCOUNT 0.00%
    HC BRILLANT SERVICES GMBH P/P 0.00%
    INDIAN RUPEE CALL ACCOUNT 0.00%
    INDONESIAN RUPIAH CALL ACCOUNT 0.00%
    NEW BIGFOOT OTHER ASSETS GMBH P/P 0.00%
    NEW MIDDLE EAST OTHER ASSETS GMBH P/P 0.00%
    THE EURO EUR CALL ACCOUNT 0.00%
    ARGENTINE PESO CALL ACCOUNT -0.03%
    HONG KONG DOLLAR CALL ACCOUNT -0.58%

    Prior top 10 holdings

    Top 10 holdings as of 08/31/18
    Tencent Holdings
    Samsung Electronics
    Alibaba Group Holding
    Taiwan Semiconductor Manufacturing
    Naspers
    Ping An Insurance Group Of China
    Lukoil Pjsc
    Sasol
    Mediatek
    China Construction Bank Corp
    Holdings represent 31.57% of portfolio
    Top 10 holdings as of 07/31/18
    Tencent Holdings
    Alibaba Group Holding
    Samsung Electronics
    Naspers
    Taiwan Semiconductor Manufacturing
    Lukoil Pjsc
    Sasol
    Housing Development Finance Corp
    Mediatek
    China Construction Bank Corp
    Holdings represent 30.69% of portfolio
    Top 10 holdings as of 06/30/18
    Tencent Holdings
    Alibaba Group Holding
    Samsung Electronics
    Naspers
    Taiwan Semiconductor Manufacturing
    Lukoil Pjsc
    Mediatek
    Sberbank Of Russia Pjsc
    China Construction Bank Corp
    Sasol
    Holdings represent 29.85% of portfolio
    Top 10 holdings as of 05/31/18
    Samsung Electronics
    Tencent Holdings
    Alibaba Group Holding
    China Construction Bank Corp
    Industrial Commercial Bank Of China
    Naspers
    Sberbank Of Russia Pjsc
    Edelweiss Financial Services
    Mediatek
    Lukoil Pjsc
    Holdings represent 32.55% of portfolio

    Portfolio composition as of 08/31/18

    Common stock 97.08%
    Cash and net other assets 1.87%
    Preferred stock 1.04%
    Convertible preferred stock 0.01%

    Equity statistics as of 08/31/18

    Median market cap $5.42B
    Weighted average market cap $92.89B
    Price to book 2.45
    Price to earnings 12.08

    Fund characteristics will vary over time.

    Due to rounding, percentages may not equal 100%.

    Consider these risks before investing: 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. Risks associated with derivatives include increased investment exposure (which may be considered leverage) and, in the case of over-the-counter instruments, the potential inability to terminate or sell derivatives positions and the potential failure of the other party to the instrument to meet its obligations. Stock prices may fall or fail to rise over time for several reasons, including general financial market conditions, changing market perceptions, changes in government intervention in the financial markets, and factors related to a specific issuer, industry or sector. You can lose money by investing in the fund.

    Top industry sectors as of 08/31/18

    Information technology 30.92%
    Financials 20.53%
    Consumer discretionary 11.52%
    Materials 8.69%
    Industrials 5.99%
    Consumer staples 5.76%
    Energy 5.74%
    Unclassified 2.98%
    Utilities 2.86%
     
    Other
    5.01%
    Cash and net other assets 1.87%
    Health care 1.34%
    Real estate 0.98%
    Telecommunication services 0.82%

    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 08/31/18

    China 30.16%
    Taiwan 13.32%
    South Korea 10.06%
    India 9.89%
    Mexico 6.67%
    South Africa 5.76%
    Russia 3.33%
    Brazil 3.08%
    United States 2.98%
     
    Other
    14.75%
    Hong Kong 2.12%
    Cash and net other assets 1.87%
    Thailand 1.80%
    Saudi Arabia 1.55%
    Poland 1.29%
    Indonesia 1.17%
    Philippines 0.98%
    Malaysia 0.97%
    United Arab Emirates 0.91%
    Colombia 0.84%
    Greece 0.73%
    Australia 0.50%
    Luxembourg 0.02%

    Expenses

    Expense ratio

    Class A Class B Class C Class M Class R Class R6 Class Y
    Total expense ratio 2.06% 2.81% 2.81% 2.56% 2.31% 1.61% 1.81%
    What you pay† 1.28% 2.03% 2.03% 1.78% 1.53% 0.83% 1.03%

    † The fund's expense ratio is taken from the most recent prospectus and is subject to change. What you pay reflects Putnam Management's decision to contractually limit expenses through 12/30/19

    Sales charge/Dealer allowance

     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
      0.25% 0.25% 1.00% 0.65% 0.50% 0.00% 0.00%
      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.

    MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. You cannot invest directly in an index.

    Consider these risks before investing: 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. Risks associated with derivatives include increased investment exposure (which may be considered leverage) and, in the case of over-the-counter instruments, the potential inability to terminate or sell derivatives positions and the potential failure of the other party to the instrument to meet its obligations. Stock prices may fall or fail to rise over time for several reasons, including general financial market conditions, changing market perceptions, changes in government intervention in the financial markets, and factors related to a specific issuer, industry or sector. You can lose money by investing in the fund.