Always Aware. Always Active.

Sustainable Leaders Fund (Class Y)  (PNOYX)

Investing in growing companies committed to sustainable practices

Sustainable Leaders Fund received an  Overall Morningstar Rating  of  

Highlights

Objective

The fund seeks long-term capital appreciation.

Strategy and process

  • Committed companies: The fund invests in growth companies with the goal of delivering positive financial and ESG performance.
  • 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 $83.30
-2.73% | $-2.34
$110.77
09/20/18
$83.30
12/07/18
Historical fund price

Fund facts as of 11/30/18

Total net assets
$4,324.57M
Turnover (fiscal year end)
87%
Dividend frequency
Annually
Number of holdings
80
Fiscal year-end
June
CUSIP / Fund code
746916402 / 1831
Inception date
07/19/94
Class Y  
Category
Growth
Open to new investors
Ticker
PNOYX

Management team

Head of Sustainable Investing
Co-Head of Equities
Portfolio Manager, Analyst


Manager commentary | Q3 2018

Sustainability sharpens research focus

Katherine Collins, Head of Sustainable Investing, explains the process of constructing a sustainable portfolio.



Performance

  • Total return (%) as of 09/30/18

  • Annual performance as of 09/30/18

Annualized Total return (%) as of 09/30/18

Annualized performance 1 yr. 3 yrs. 5 yrs. 10 yrs.
Before sales charge 22.23% 19.54% 15.25% 13.10%
After sales charge N/A N/A N/A N/A
Russell 3000 Growth Index 25.89%20.36%16.23%14.18%

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 11/30/18 1.97% -
YTD as of 12/07/18 2.79% -

Risk-adjusted performance as of 10/31/18

Alpha (3 yrs.) -0.42
Sharpe ratio (3 yrs.) 1.08
Treynor ratio (3 yrs.) 12.21
Information ratio (3 yrs.) -0.16

Volatility as of 10/31/18

Standard deviation (3 yrs.) 11.33%
Beta 1.00
R-squared 0.94

Capture ratio as of 10/31/18

Up-market (3 yrs.) 98.86
Down-market (3 yrs.) 101.12

Lipper rankings as of 10/31/18

Time period Rank/Funds in category Percentile ranking
1 yr. 234/555 43%
3 yrs. 100/491 21%
5 yrs. 88/426 21%
10 yrs. 124/314 40%
Lipper category: Multi-Cap Growth Funds

Morningstar Ratings as of 10/31/18

Time period Funds in category Morningstar Rating
Overall 1253
3 yrs. 1253
5 yrs. 1120
10 yrs. 811
Morningstar category: Large Growth

Distributions

Record/Ex dividend date 12/06/18
Payable date 12/10/18
Income $0.28
Extra income --
Short-term cap. gain $1.611
Long-term cap. gain $13.421

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 10/31/18

Microsoft Corp 6.01%
Alphabet 4.13%
Visa 4.12%
Amazon.Com 3.76%
Unilever Nv 3.22%
Becton Dickinson And 3.06%
Novozymes A/S - B Shares 3.06%
Adobe 2.86%
Danaher Corp 2.63%
Apple 2.46%
Top 10 holdings, percent of portfolio 35.31%

Full portfolio holdings as of 09/30/18

MICROSOFT CORP 5.37%
AMAZON.COM INC 4.29%
ALPHABET INC-CL C 4.23%
NOVOZYMES A/S-B SHARES 4.11%
VISA INC-CLASS A SHARES 4.09%
BECTON DICKINSON AND CO 3.16%
UNILEVER NV-CVA 3.04%
DANAHER CORP 2.63%
NORFOLK SOUTHERN CORP 2.60%
APPLE INC 2.31%
HOME DEPOT INC 2.30%
SALESFORCE.COM INC 2.24%
MCCORMICK & CO-NON VTG SHRS 2.00%
ADOBE SYSTEMS INC 1.86%
BLACKROCK INC 1.83%
FORTIVE CORP 1.80%
HILTON WORLDWIDE HOLDINGS IN 1.69%
OKTA INC 1.64%
COOPER COS INC/THE 1.62%
DXC TECHNOLOGY CO 1.61%
ACCENTURE PLC-CL A 1.55%
BALL CORP 1.51%
PRUDENTIAL PLC 1.42%
NXP SEMICONDUCTORS NV 1.41%
CHIPOTLE MEXICAN GRILL INC 1.38%
BANK OF AMERICA CORP 1.37%
AES CORP 1.27%
ASML HOLDING NV-NY REG SHS 1.27%
PENUMBRA INC 1.24%
PRAXAIR INC 1.23%
ROPER TECHNOLOGIES INC 1.22%
E*TRADE FINANCIAL CORPORATION 1.19%
HEINEKEN NV 1.18%
CHR HANSEN HOLDING A/S 1.16%
BOSTON SCIENTIFIC CORP 1.14%
MSCI INC 1.09%
SERVICENOW INC 1.09%
ADIDAS AG 1.08%
HONEYWELL INTERNATIONAL INC 1.08%
VERTEX PHARMACEUTICALS INC 1.07%
TALEND SA - ADR 1.03%
WALMART INC 1.03%
NEXTERA ENERGY INC 1.02%
TJX COMPANIES INC 1.02%
LOWES COMPANIES INC 1.00%
ECOLAB INC 0.99%
FIRST REPUBLIC BANK/CA 0.97%
KELLOGG CO 0.96%
ALPHABET INC-CL A 0.95%
SCHWAB (CHARLES) CORP 0.93%
WEBSTER FINANCIAL CORP 0.87%
AMERICAN TOWER CORP 0.80%
ON SEMICONDUCTOR CORP 0.80%
REALPAGE INC 0.76%
JAZZ PHARMACEUTICALS PLC 0.71%
SUMMIT MATERIALS INC -CL A 0.71%
CHALLENGER LTD 0.64%
VAIL RESORTS INC 0.59%
STMICROELECTRONICS NV-NY SHS 0.56%
HASBRO INC 0.51%
METTLER-TOLEDO INTERNATIONAL 0.51%
STANLEY BLACK & DECKER INC 0.51%
BIO-RAD LABORATORIES-A 0.50%
MEDICINES COMPANY 0.37%
KION GROUP AG 0.35%
CLOVIS ONCOLOGY INC 0.33%
BLUEBIRD BIO INC 0.13%
OPORTUN FIN CORP P/P SERIES H PFD 0.10%
OPORTUN FIN CORP P/P 0.03%
OPORTUN FIN G-1 PFD CV P/P 0.03%
GLOBAL FASHION GRP P/P 0.02%
OPORTUN FIN F-1 PFD CV P/P 0.02%
OPORTUN FIN D-1 PFD CV P/P 0.01%
OPORTUN FIN F PFD CV P/P 0.01%
AUD/USD 10/17/2018 GSFX 0.00%
AUD/USD 10/17/2018 SSBT 0.00%
AUSTRALIAN DOLLAR ACCOUNT 0.00%
CANADIAN DOLLAR ACCOUNT 0.00%
EUR/USD 12/19/2018 SSBT 0.00%
GBP/USD 12/19/2018 BANKAM 0.00%
HC BRILLANT SERVICES GMBH P/P 0.00%
KOREAN WON CALL ACCOUNT 0.00%
NEURALSTEM INC SERIES K COMMON STOCK PURCHASE WARRANT 0.00%
NEW BIGFOOT OTHER ASSETS GMBH P/P 0.00%
NEW MIDDLE EAST OTHER ASSETS GMBH P/P 0.00%
OPORTUN FIN A-1 PFD CV P/P 0.00%
OPORTUN FIN B-1 PFD CV P/P 0.00%
OPORTUN FIN C-1 PFD CV P/P 0.00%
OPORTUN FIN E-1 PFD CV P/P 0.00%
POUND STERLING CALL ACCOUNT 0.00%
UNEXT.COM LLC CORP (PRIVATE) P/P 0.00%
EUR/USD 12/19/2018 UBS -0.01%
EUR/USD 12/19/2018 JPMCB -0.02%

Prior top 10 holdings

Top 10 holdings as of 10/31/18
Microsoft Corp
Alphabet
Visa
Amazon.Com
Unilever Nv
Becton Dickinson And
Novozymes A/S - B Shares
Adobe
Danaher Corp
Apple
Holdings represent 35.31% of portfolio
Top 10 holdings as of 09/30/18
Microsoft Corp
Alphabet
Amazon.Com
Novozymes A/S - B Shares
Visa
Becton Dickinson And
Unilever Nv
Danaher Corp
Norfolk Southern Corp
Apple
Holdings represent 36.78% of portfolio
Top 10 holdings as of 08/31/18
Microsoft Corp
Amazon.Com
Novozymes A/S - B Shares
Visa
Becton Dickinson and Co
Unilever Nv
Norfolk Southern Corp
Danaher Corp
Apple
Home Depot
Holdings represent 33.46% of portfolio
Top 10 holdings as of 07/31/18
Microsoft Corp
Alphabet
Novozymes A/S - B Shares
Amazon
Visa
Norfolk Southern Corp
Unilever Nv
Becton Dickinson and Co
Apple
Home Depot
Holdings represent 36.61% of portfolio

Portfolio composition as of 10/31/18

Common stock 97.62%
Cash and net other assets 2.19%
Convertible preferred stock 0.19%

Equity statistics as of 10/31/18

Median market cap $15.41B
Weighted average market cap $197.39B
Price to book 4.67
Price to earnings 21.47

Fund characteristics will vary over time.

Due to rounding, percentages may not equal 100%.

Consider these risks before investing: Stock values 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. 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, and the market may not favor growth-style investing. Investments in small and/or 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 investment strategy limits the types and number of investment opportunities available to the fund and, as a result, the fund may underperform other funds that do not have a sustainable focus. The fund’s investment strategy of investing in companies that exhibit a commitment to sustainable business practices may result in the fund investing in securities or industry sectors that underperform the market as a whole or underperform other funds that do not invest with a similar focus. 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 10/31/18

Information technology 28.65%
Consumer discretionary 13.79%
Health care 13.08%
Financials 9.99%
Consumer staples 9.06%
Materials 9.05%
Industrials 7.01%
Communication services 4.13%
Cash and net other assets 2.19%
 
Other
3.05%
Utilities 2.10%
Real estate 0.95%

The unclassified sector (where applicable) includes exchange traded funds and other securities not able to be classified by sector.

Sectors will vary over time.


Expenses

Expense ratio

Class A Class B Class C Class M Class R Class R6 Class Y
Total expense ratio 0.99% 1.74% 1.74% 1.49% 1.24% 0.61% 0.74%
What you pay 0.99% 1.74% 1.74% 1.49% 1.24% 0.61% 0.74%

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 3000 Growth Index is an unmanaged index of those companies in the broad-market Russell 3000 Index chosen for their growth orientation. You cannot invest directly in an index.

Consider these risks before investing: Stock values 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. 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, and the market may not favor growth-style investing. Investments in small and/or 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 investment strategy limits the types and number of investment opportunities available to the fund and, as a result, the fund may underperform other funds that do not have a sustainable focus. The fund’s investment strategy of investing in companies that exhibit a commitment to sustainable business practices may result in the fund investing in securities or industry sectors that underperform the market as a whole or underperform other funds that do not invest with a similar focus. 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.