Diversify to reduce the risk from changes in market leadership
An asset allocation fund invests in a diversified portfolio to perform with less volatility than individual asset classes
See how you can reduce risk by diversifying. Download (PDF)
- Putnam Dynamic Asset Allocation Growth Fund (AAG)
- Large-cap growth equities (LCG)
- Small-cap growth equities (SCG)
- Large -cap value equities (LCV)
- Small-cap value equities (SCV)
- International equities (IE)
- U.S. bonds (AGG)
- Commodities (Comm.)
- U.S. TIPS (TIPS)
To understand why diversifying investments can be more effective than trying to pick winners, explore the annual performance ranking below:
- Select Putnam's Dynamic Asset Allocation Growth Fund to see how it avoids the extremes.
- Select each asset class to highlight annual return and chart the changes in rankings.
View Dynamic Asset Allocation Growth Fund's full performance.
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 a loss when you sell your shares. Performance of class A shares is shown before sales charge, assumes reinvestment of distributions, and does not account for taxes. Had the 5.75% sales charge been reflected, returns would have been lower. For a portion of the periods, the fund had expense limitations, without which returns would have been lower. To obtain the most recent month-end performance, visit putnam.com.
Putnam Dynamic Asset Allocation Growth Fund has a strategic allocation of 60% equities (with a range of 45% to 75%) and 40% bonds (with a range of 25% to 55%). It invests in securities in U.S. and international markets, large-, mid-, and small-cap stocks, and growth and value styles. Large Cap Growth Stocks are represented by the Russell 1000® Growth Index, which is an unmanaged index of those companies in the broad-market Russell 1000® Index chosen for their growth orientation. Small Cap Growth Stocks are represented by the Russell 2000® Growth Index, which is an unmanaged index of those companies in the small-cap Russell 2000® Index chosen for their growth orientation. Large Cap Value Stocks are represented by the Russell 1000® Value Index, which is an unmanaged index of those companies in the broad-market Russell 1000® Index chosen for their value orientation. Small Cap Value Stocks are represented by the Russell 2000® Value Index, which is an unmanaged index of those companies in the small-cap Russell 2000® Index chosen for their value orientation. Large Cap Stocks are represented by the S&P 500® Index, which is an unmanaged index of common stock performance. International Stocks are represented by the MSCI EAFE Index, which is an unmanaged index of equity securities from developed countries in Western Europe, the Far East, and Australasia. U.S. Bonds are represented by the Bloomberg U.S. Aggregate Bond Index, which is an unmanaged index of U.S. investment-grade fixed-income securities. Cash is represented by the BofA Merrill Lynch U.S. 3-month Treasury Bill Index, which is an unmanaged index that seeks to measure the performance of U.S. Treasury bills available in the marketplace.
Consider these risks before investing: Allocation of assets among asset classes may hurt performance. Stock and bond prices may fall or fail to rise over time for several reasons, including general financial market conditions, factors related to a specific issuer or industry and, with respect to bond prices, changing market perceptions of the risk of default and changes in government intervention. These factors may also lead to increased volatility and reduced liquidity in the bond markets. 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 greater for longer-term bonds, and credit risk is 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.