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Sustainable Future Fund (Class Y)  (PMVYX)

Investing in growing companies solving sustainability challenges

Sustainable Future Fund received an  Overall Morningstar Rating  of  

Highlights

Objective

The fund seeks long-term capital appreciation.

Strategy and process

  • Impact companies: The fund invests in growth companies that directly demonstrate positive impact in social, environmental, or economic development.
  • Active strategy: The managers utilize bottom-up research to identify companies with attractive sustainability, fundamental, and valuation characteristics.
  • Veteran team: A dedicated sustainable investing team is backed by Putnam's equity research and quantitative/risk analysis groups.

Fund price

Yesterday’s close 52-week high 52-week low
Net asset value $17.30
-0.52% | $-0.09
$22.17
09/14/18
$13.49
12/24/18
Historical fund price

Fund facts as of 07/31/19

Total net assets
$421.09M
Turnover (fiscal year end)
31%
Dividend frequency
Annually
Number of holdings
60
Fiscal year-end
April
CUSIP / Fund code
746802198 / 1856
Inception date
04/02/02
Class Y  
Category
Growth
Open to new investors
Ticker
PMVYX

Management team

Head of Sustainable Investing
Portfolio Manager, Analyst


Manager commentary | Q2 2019

Getting to the core of the data privacy issue

Katherine Collins, Head of Sustainable Investing, highlights the real issue behind data privacy.


Literature


ESG Outlook for 2019
We see increasing evidence that systems thinking is becoming more prevalent and influential throughout corporations and the investment community.
How company diversity can help performance
The potential to improve work performance is perhaps the most intriguing and least understood argument for diversity — and worth examining in more depth.
Sustainable investing: Assessing the choices
Sustainable investing is growing in popularity, and investors should be thoughtful about choosing from a range of strategies and portfolios.

Performance

  • Total return (%) as of 06/30/19

  • Annual performance as of 06/30/19

Annualized Total return (%) as of 06/30/19

Annualized performance 1 yr. 3 yrs. 5 yrs. 10 yrs.
Before sales charge 11.55% 11.23% 7.29% 14.25%
After sales charge N/A N/A N/A N/A
Russell Midcap Growth Index 13.94%16.49%11.10%16.02%
Russell 3000V-Russell MidcapG Linked Benchmark 13.94%12.51%8.67%13.85%

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 07/31/19 2.37% -
YTD as of 08/20/19 19.97% -

Risk-adjusted performance as of 07/31/19

Alpha (3 yrs.) 0.36
Sharpe ratio (3 yrs.) 0.77
Treynor ratio (3 yrs.) 11.27
Information ratio (3 yrs.) -0.28

Volatility as of 07/31/19

Standard deviation (3 yrs.) 12.87%
Beta 0.88
R-squared 0.95

Capture ratio as of 07/31/19

Up-market (3 yrs.) 90.21
Down-market (3 yrs.) 88.93

Lipper rankings as of 07/31/19

Time period Rank/Funds in category Percentile ranking
1 yr. 202/562 36%
3 yrs. 448/501 90%
5 yrs. 388/448 87%
10 yrs. 210/320 66%
Lipper category: Multi-Cap Growth Funds

Morningstar Ratings as of 07/31/19

Time period Funds in category Morningstar Rating
Overall 364
3 yrs. 364
5 yrs. 322
10 yrs. 223
Morningstar category: Mid-Cap Value

Distributions

Record/Ex dividend date 12/06/18
Payable date 12/10/18
Income $0.265
Extra income --
Short-term cap. gain $0.086
Long-term cap. gain $4.166

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 07/31/19

Danaher Corp 4.41%
Salesforce.Com 3.93%
Mccormick Md 3.70%
Vail Resorts 3.23%
Mastercard 3.19%
Everbridge 3.18%
Novozymes A/S - B Shares 3.08%
Penumbra 2.99%
Adobe 2.90%
Chipotle Mexican Grill 2.80%
Top 10 holdings, percent of portfolio 33.41%

Full portfolio holdings as of 06/30/19

DANAHER CORP 4.57%
SALESFORCE.COM INC 3.93%
MCCORMICK & CO-NON VTG SHRS 3.68%
MASTERCARD INC - A 3.16%
NOVOZYMES A/S-B SHARES 3.15%
VAIL RESORTS INC 2.98%
PENUMBRA INC 2.91%
ADOBE INC 2.91%
UNILEVER PLC 2.88%
EVERBRIDGE INC 2.84%
FIRST REPUBLIC BANK/CA 2.83%
CHIPOTLE MEXICAN GRILL INC 2.62%
TELADOC HEALTH INC 2.43%
BLACKROCK INC 2.28%
ADIDAS AG 2.21%
WEBSTER FINANCIAL CORP 2.16%
BECTON DICKINSON AND CO 2.13%
PRUDENTIAL PLC 1.86%
CHR HANSEN HOLDING A/S 1.85%
FORTIVE CORP 1.85%
EDWARDS LIFESCIENCES CORP 1.83%
NEXTERA ENERGY INC 1.83%
ALPHABET INC-CL A 1.73%
BALL CORP 1.73%
DOCUSIGN INC 1.71%
ON SEMICONDUCTOR CORP 1.50%
FIRST SOLAR INC 1.35%
NXP SEMICONDUCTORS NV 1.31%
VERTEX PHARMACEUTICALS INC 1.28%
MSCI INC 1.26%
PINTEREST INC- CLASS A 1.24%
SUNRUN INC 1.16%
INTERFACE INC 1.16%
GODADDY INC - CLASS A 1.14%
TALEND SA - ADR 1.12%
APPLIED MATERIALS INC 1.11%
HEALTHEQUITY INC 1.10%
EURAZEO SE 1.10%
BANDWIDTH INC-CLASS A 1.08%
PLURALSIGHT INC - A 1.08%
JAZZ PHARMACEUTICALS PLC 1.06%
SENSIENT TECHNOLOGIES CORP 1.06%
BIO-RAD LABORATORIES-A 1.05%
DXC TECHNOLOGY CO 0.98%
ASML HOLDING NV-NY REG SHS 0.89%
THERMO FISHER SCIENTIFIC INC 0.81%
TREX COMPANY INC 0.81%
PVH CORP 0.79%
GALAPAGOS NV-SPON ADR 0.70%
ECOLAB INC 0.67%
OWENS CORNING 0.50%
MEDICINES COMPANY 0.49%
BLUEBIRD BIO INC 0.48%
TJX COMPANIES INC 0.43%
STITCH FIX INC-CLASS A 0.32%
CROWDSTRIKE HOLDINGS INC - A 0.29%
ORCHARD THERAPEUTICS PLC 0.27%
CLOVIS ONCOLOGY INC 0.16%
TREASURY BILL 00.0000 07/25/2019 0.03%
GBP/USD 09/18/2019 BANKAM 0.00%
EUR/USD 09/18/2019 JPMCB -0.00%
GBP/USD 09/18/2019 BCAP-FX -0.00%
EUR/USD 09/18/2019 BANKAM -0.01%

Prior top 10 holdings

Top 10 holdings as of 07/31/19
Danaher Corp
Salesforce.Com
Mccormick Md
Vail Resorts
Mastercard
Everbridge
Novozymes A/S - B Shares
Penumbra
Adobe
Chipotle Mexican Grill
Holdings represent 33.41% of portfolio
Top 10 holdings as of 06/30/19
Danaher Corp
Salesforce.Com
Mccormick Md
Mastercard
Novozymes A/S - B Shares
Vail Resorts
Adobe
Penumbra
Unilever
Everbridge
Holdings represent 33.00% of portfolio
Top 10 holdings as of 05/31/19
Danaher Corp
Salesforce.Com
Mccormick Md
Novozymes A/S - B Shares
Mastercard
Vail Resorts
Adobe
Unilever
First Republic Bank/Ca
Everbridge
Holdings represent 34.45% of portfolio
Top 10 holdings as of 04/30/19
Salesforce.Com
Danaher Corp
Unilever
Mccormick Md
Adobe
Mastercard
Novozymes A/S - B Shares
First Republic Bank/Ca
Vail Resorts
BD Medical
Holdings represent 34.47% of portfolio

Portfolio composition as of 07/31/19

Common stock 92.12%
Cash and net other assets 7.88%

Equity statistics as of 07/31/19

Median market cap $13.30B
Weighted average market cap $65.48B
Price to book 4.57
Price to earnings 27.06

Fund characteristics will vary over time.

Due to rounding, percentages may not equal 100%.

Consider these risks before investing: 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, geography, industry or sector. These and other factors may lead to increased volatility and reduced liquidity in the fund’s portfolio holdings. Growth stocks may be more susceptible to earnings disappointments, technological obsolescence, falling prices and profits, and the market may not favor growth-style investing. Investments in small and midsize companies increase the risk of greater price fluctuations.  International investing involves currency, economic, and political risks. Emerging-market securities have illiquidity and volatility risks. The fund's sustainable and environmental, social, and/or corporate governance (ESG) investment strategy may cause the fund to forego otherwise attractive investment opportunities or may increase or decrease the fund’s exposure to certain types of companies and, therefore, to underperform funds that do not invest with a similar focus. From time to time, the fund may invest a significant portion of its assets in companies in one or more related industries or sectors, which would make the fund more vulnerable to adverse developments affecting those industries or sectors. In evaluating an investment opportunity, we may make investment decisions based on information and data that is incomplete or inaccurate. Due to changes in the products or services of the companies in which the fund invests, the fund may temporarily hold securities that are inconsistent with its sustainable investment criteria. You can lose money by investing in the fund.

Top industry sectors as of 07/31/19

Information technology 25.00%
Health care 21.31%
Financials 10.13%
Consumer discretionary 9.48%
Cash and net other assets 7.88%
Materials 7.42%
Consumer staples 6.43%
Industrials 6.02%
Communication services 4.51%
 
Other
1.82%
Utilities 1.82%

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 07/31/19

United States 78.51%
Cash and net other assets 7.88%
United Kingdom 4.73%
Denmark 4.03%
Germany 1.84%
Netherlands 1.33%
France 1.03%
Belgium 0.65%

Expenses

Expense ratio

Class A Class B Class C Class M Class R Class R6 Class Y
Total expense ratio 1.07% 1.82% 1.82% 1.57% 1.32% 0.67% 0.82%
What you pay 1.07% 1.82% 1.82% 1.57% 1.32% 0.67% 0.82%

Sales charge

 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.

The Russell Midcap Growth Index is an unmanaged index of those companies in the Russell Midcap Index chosen for their growth orientation. The Russell 3000 Value Index is an unmanaged index of those companies in the broad-market Russell 3000 Index chosen for their value orientation. The Russell 3000 Value - Russell Midcap Growth Linked Benchmark represents performance of the Russell 3000 Value Index through March 20, 2018 and performance of the Russell Midcap Growth Index thereafter. You cannot invest directly in an index.

Consider these risks before investing: 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, geography, industry or sector. These and other factors may lead to increased volatility and reduced liquidity in the fund’s portfolio holdings. Growth stocks may be more susceptible to earnings disappointments, technological obsolescence, falling prices and profits, and the market may not favor growth-style investing. Investments in small and midsize companies increase the risk of greater price fluctuations.  International investing involves currency, economic, and political risks. Emerging-market securities have illiquidity and volatility risks. The fund's sustainable and environmental, social, and/or corporate governance (ESG) investment strategy may cause the fund to forego otherwise attractive investment opportunities or may increase or decrease the fund’s exposure to certain types of companies and, therefore, to underperform funds that do not invest with a similar focus. From time to time, the fund may invest a significant portion of its assets in companies in one or more related industries or sectors, which would make the fund more vulnerable to adverse developments affecting those industries or sectors. In evaluating an investment opportunity, we may make investment decisions based on information and data that is incomplete or inaccurate. Due to changes in the products or services of the companies in which the fund invests, the fund may temporarily hold securities that are inconsistent with its sustainable investment criteria. You can lose money by investing in the fund.