Equity
Active strategies seeking long-term outperformance
We offer a range of attractive equity portfolios for DC plans, including multiple 4- and 5-star funds.
Equity strategies with a record of solid performance
| Name of fund | Category | Overall Morningstar RatingTM as of 02/28/23 |
Retirement share class expense ratio |
|---|---|---|---|
| Core Equity Fund | Blend | (out of 1,226 in category) | 0.62 |
| Large Cap Value Fund | Value | (out of 1,149 in category) | 0.55 |
| Small Cap Growth Fund | Growth | (out of 574 in category) | 0.85 |
| Focused Equity Fund | Blend | (out of 1,130 in category) | 0.73 |
| Focused International Equity Fund | Blend | (out of 700 in category) | 0.74 |
| Global Health Care Fund | Global Sector | (out of 150 in category) | 0.71 |
| Growth Opportunities Fund | Growth | (out of 1,130 in category) | 0.58 |
| International Equity Fund | Blend | (out of 700 in category) | 0.84 |
| International Value Fund | Value | (out of 327 in category) | 0.97 |
| Research Fund | Blend | (out of 1,226 in category) | 0.67 |
| Sustainable Leaders Fund | Growth | (out of 1,130 in category) | 0.65 |
Putnam Growth Opportunities Fund (PGOEX)
Durable growth themes and companies that benefit from them
A thematic approach is a distinctive feature of the fund. The team analyzes global trends, as well as problems and potential solutions, to identify which themes could drive sustained growth for businesses over a multi-year time horizon.
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Viral effects
Many businesses that were resilient and strong through the pandemic lockdowns have become even stronger, taking market share and further cementing their competitive moats. Learn more about one of them, a developer of leading-edge diagnostic tools.
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Cloud infrastructure and software
Businesses are increasingly shifting their information technology systems to cloud storage. See which business we believe can achieve an annual growth rate of more than 30% by 2023.
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Increased screen time
In 2019, for the first time, U.S. consumers spent more time with on mobile devices than watching TV. See which company with high free cash flow margins could grow EPS by 20% annually over the next three-plus years.
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Digital marketing
More companies are recognizing the importance of digital marketing in driving business growth. Learn about one that is in a unique position to deliver effective marketing campaigns to targeted audiences.
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Humanization of pets
Pets increasingly receive the same level of attention, care, and health maintenance as human family members do. See which company has spent more on R&D over the past five years than all of its competitors combined.
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A healthier tomorrow
People around the globe are prioritizing exercise, diet, and environmental health, and they are seeking greater access to and control over their personal health data. See which leading retailer we believe will benefit from this trend.
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Personalized medicine
The genetic makeup of patients will become increasingly important in the therapy and treatment they receive. See which company opened the world’s largest dedicated cell and gene therapy facility in 2018.
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Autonomous and electric vehicles
The revenue opportunity for semiconductor companies that supply these markets is growing at above-market rates. See which company already has decades of experience providing hardware and software for automakers.
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5G connectivity and the Internet of things
The rapid growth in connected devices and systems will drive carriers to invest rapidly in 5G networks. See one business we believe will benefit as companies make this transition.
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E-commerce and payment processing
The U.S. e-commerce market has grown 16% annually since 2001, and peer-to-peer electronic money transfers have rapidly become more common. See which company we believe has a distinct advantage with its near-universal merchant acceptance and large consumer base.
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The experience economy
The appeal of experiences has become more widespread after the pandemic lockdowns in 2020. This demand, combined with higher levels of personal savings, should help a number of businesses grow at above-market rates for an extended period of time.
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Controlled distribution
How companies sell and distribute their products and services can offer a distinct advantage. See which company gained its leadership position by building customer relationships.
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Learn more about Putnam Growth Opportunities Fund: Fund details Quarterly commentary
Putnam Large Cap Value Fund (PEQSX)
(also available as a CIT)
A multidimensional approach to value investing.
A focus on dividend growth and defining value outside the index. The fund invests in three dimensions of value:
VALUE STOCKS
Attractively priced stocks of companies that are poised for improvement
DIVIDEND GROWERS
Stocks of companies that are willing and able to increase their dividends
CASH-FLOW GENERATORS
Stocks of companies with strong cash flows, earnings quality, and capital allocation strategies
Putnam Small Cap Growth Fund (PLKGX)
(also available as a CIT)
Seeking to capitalize on growing small companies
Small companies can add an attractive source of long-term investment growth for participants of a retirement plan. These companies tend to be flexible and innovative, and can often grow their earnings at faster rates than larger companies.
The portfolio is diversified across two primary types of small company stocks: high-quality growth and aggressive growth. This portfolio offers growth with a more moderate level of volatility that may be compelling for retirement investors.
HIGH-QUALITY GROWTH COMPANIES
60% to 80% of the portfolio
The largest portion of the portfolio consists of stable, well-established growth companies we believe to be mispriced by the market.
The small-cap asset class can be volatile, especially when targeting the fastest-growing companies. To help moderate the fund's volatility over time, we invest a majority of assets in stable, well-established companies that are often less volatile than the asset class as a whole. We believe these companies can grow at high rates, and that the market is not pricing in their full profitability potential.
Stock example: Boot Barn Holdings (BOOT)
This is a California-based retailer of work boots, western footwear, and apparel for men and women. The company's mix of both essential items and more discretionary goods that are difficult to purchase online has contributed to the company's growth. This growth continued through the Covid-19 pandemic, and the company has emerged as an even stronger retailer, in our view. Its store-level return profile is robust, which allows the company to internally fund an accelerating store-opening plan.
AGGRESSIVE GROWTH COMPANIES
20% to 40% of the portfolio
A smaller portion of the portfolio is invested in emerging growth and cyclical growth companies. We define emerging growth companies as those that offer disruptive products, services, or technology that will enable them to grow rapidly. They are typically early in their life cycles, and their quality metrics, such as return on capital or margins, may look weak today. However, if they grow at the rates we are projecting, they could mature into high-quality growth leaders. We put less emphasis on cyclical growth companies, but we will own them if we believe they are competitively positioned and offer durable growth prospects.
Stock example: Tenable (TENB)
Tenable is a leader in vulnerability management — an increasingly critical component of cyber security. Tenable's high level of focus has enabled it to provide a broader view of its clients' vulnerabilities, examining areas beyond the physical footprint of a business. This is necessary as businesses shift to mobile workforces and the cloud. This is a complicated endeavor for businesses, and Tenable can offer answers and help security personnel prioritize remedies.
Timely articles and key literature
ESG: Hearing the signal above the noise
In our view, the best opportunities lie not at the extremes of ESG rhetoric, but at the heart of sustainability substance.
We believe BDCs are built to deliver dividends in a recession
We believe stocks of business development companies have evolved to better withstand a recession, and their dividends can remain at highly attractive levels.
| March 14, 2023