Small Cap Value Fund  (PSLAX)

Pursuing capital appreciation through undervalued small companies

Objective

The fund seeks capital appreciation.

Fund price

Yesterday’s close 52-week high 52-week low
Net asset value $18.20
-0.11% | $-0.02
$18.46
10/02/17
$14.75
11/02/16
Historical fund price

Fund facts as of 09/30/17

Total net assets
$432.35M
Turnover (fiscal year end)
63%
Dividend frequency
Annually
Number of holdings
248
Fiscal year end
February
CUSIP / Fund code
746802610 / 0053
Inception Date
04/13/99
Category
Value
Open to new investors
Ticker
PSLAX

Management team


Portfolio Manager

Portfolio Manager

Strategy and process

  • Small companies: Often overlooked by Wall Street analysts, the stocks of small companies can represent attractive opportunities.
  • Active value strategy: The portfolio managers seeks attractively valued companies with improving fundamentals or catalysts that may unlock value.
  • Rigorous research: The portfolio managers and a team of senior research analysts offer the collaboration of a boutique with the extensive resources of a large, global firm.

Literature


Why a meaningful near-term market correction is unlikely
2017 is a rare year without a stock market correction of at least 5%, but that doesn't make a correction more likely in the fourth quarter.
How the Japan election may influence global interest rates
The Japan election could have consequences for the future leadership of the Bank of Japan and the country's impact on global interest rate trends.
Using and enhancing ESG investment data
ESG data is having investment impact but is still evolving, and stands to benefit from feedback offered by fundamental analysts.

Performance

  • Total return (%) as of 09/30/17

  • Annual performance as of 09/30/17

Annualized performance 1 yr. 3 yrs. 5 yrs. 10 yrs.
Before sales charge 20.72% 10.78% 13.56% 6.04%
After sales charge 13.77% 8.62% 12.23% 5.41%
Russell 2000 Value Index 20.55% 12.12% 13.27% 7.14%

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. To obtain the most recent month-end performance, visit putnam.com. 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 Absolute Return 500 Fund and 700 Fund, and 4.00% and 3.25% for income funds (1.00% and 0.75% for Putnam Floating Rate Income Fund, Putnam Absolute Return 100 Fund and 300 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 Absolute Return 100 Fund and 300 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, T1, 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. Class A, M, and T1 shares of Putnam money market funds have no initial sales charge. 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 09/30/17 5.78 % -0.30 %
YTD as of 10/16/17 4.12 % -1.87 %

Risk-adjusted performance as of 09/30/17

Alpha (3 yrs.) -0.08
Sharpe ratio (3 yrs.) 0.80
Treynor ratio (3 yrs.) 11.77
Information ratio (3 yrs.) -0.42

Volatility as of 09/30/17

Standard deviation (3 yrs.) 13.15%
Beta 0.89
R-squared 0.95

Capture ratio as of 09/30/17

Up-market (3 yrs.) 87.72
Down-market (3 yrs.) 86.54

Lipper rankings as of 09/30/17

Small-Cap Value Funds Percentile ranking Rank/Funds in category
1 yr. 21% 57/276
3 yrs. 31% 74/242
5 yrs. 34% 73/214
10 yrs. 70% 96/137

Morningstar ratings as of 09/30/17

Small Value Rating Funds in category
Overall (336)
3 yrs. (336)
5 yrs. (292)
10 yrs. (198)

Distributions

Record/Ex dividend date 12/07/16
Payable date 12/09/16
Income $0.115
Extra income $0.0
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.


Holdings

Top 10 holdings as of 09/30/17

Hain Celestial Group The 1.24%
Rlj Lodging Trust 1.23%
Carpenter Technology Corp 1.16%
Sprouts Farmers Market 1.11%
Calpine Corp 1.03%
Hub Group 1.01%
Minerals Technologies 0.95%
Party City Holdco 0.91%
Radian Group 0.90%
Atkore International Group 0.89%
Top 10 holdings, percent of portfolio 10.43%

Full portfolio holdings as of 06/30/17

PARTY CITY HOLDCO INC 1.25%
NCR CORPORATION 1.18%
RADIAN GROUP INC 1.18%
QUANTA SERVICES INC 1.16%
FLEX LTD 1.15%
HYSTER-YALE MATERIALS 1.06%
SEAWORLD ENTERTAINMENT INC 1.06%
SPROUTS FARMERS MARKET INC 1.06%
NEW YORK REIT INC 1.04%
CALPINE CORP 1.01%
TIME INC 1.01%
MASTEC INC 0.99%
ENERGEN CORP 0.93%
CALGON CARBON CORP 0.78%
MAJOR DRILLING GROUP INTL 0.77%
RLJ LODGING TRUST 0.77%
STERLING BANCORP/DE 0.77%
ASSURED GUARANTY LTD 0.76%
PITNEY BOWES INC 0.76%
BROOKDALE SENIOR LIVING INC 0.75%
DEAN FOODS CO 0.75%
KAPSTONE PAPER AND PACKAGING 0.75%
XPERI CORP 0.75%
CISION LTD 0.74%
SUPER MICRO COMPUTER INC 0.74%
ATLAS AIR WORLDWIDE HOLDINGS 0.73%
IBERIABANK CORP 0.72%
VALVOLINE INC 0.72%
MULLEN GROUP LTD 0.70%
PACIFIC PREMIER BANCORP INC 0.69%
FIRST MIDWEST BANCORP INC/IL 0.68%
GENERAC HOLDINGS INC 0.68%
KENNEDY-WILSON HOLDINGS INC 0.68%
SUMMIT MATERIALS INC -CL A 0.68%
CAMDEN NATIONAL CORP 0.67%
POPULAR INC 0.67%
COLUMBUS MCKINNON CORP/NY 0.66%
CONDUENT INC 0.65%
EDGEWELL PERSONAL CARE CO 0.65%
HIGH LINER FOODS INC 0.65%
HANESBRANDS INC 0.64%
OLD NATIONAL BANCORP 0.64%
TRIMAS CORP 0.62%
BLUE BUFFALO PET PRODUCTS IN 0.61%
CALLON PETROLEUM CO 0.61%
FORMFACTOR INC 0.61%
HANMI FINANCIAL CORPORATION 0.61%
FIRST BUSEY CORP 0.60%
RANGE RESOURCES CORP 0.60%
SCHNEIDER NATIONAL INC-CL B 0.60%
WESTERN ALLIANCE BANCORP 0.60%
ENSIGN GROUP INC/THE 0.59%
MATADOR RESOURCES CO 0.59%
TEXTAINER GROUP HOLDINGS LTD 0.59%
WEB.COM GROUP INC 0.59%
RYERSON HOLDING CORP 0.58%
SCHULMAN (A.) INC 0.58%
NETGEAR INC 0.55%
PLY GEM HOLDINGS INC 0.55%
PREFERRED BANK/LOS ANGELES 0.55%
VERMILION ENERGY INC 0.55%
WSFS FINANCIAL CORP 0.55%
FERRO CORP 0.54%
KBR INC 0.54%
SCHNITZER STEEL INDS INC-A 0.54%
UNIT CORP 0.54%
HOPE BANCORP INC 0.53%
SALLY BEAUTY HOLDINGS INC 0.51%
UMPQUA HOLDINGS CORP 0.51%
ANI PHARMACEUTICALS INC 0.49%
BABCOCK & WILCOX ENTERPR 0.49%
PROPETRO HOLDING CORP 0.49%
HAIN CELESTIAL GROUP INC 0.47%
LAKELAND FINANCIAL CORP 0.47%
STONERIDGE INC 0.47%
REDWOOD TRUST INC 0.46%
TOWER SEMICONDUCTOR LTD 0.46%
FOSTER (LB) CO-A 0.45%
VALLEY NATIONAL BANCORP 0.45%
AGT FOOD & INGREDIENTS INC 0.44%
FULTON FINANCIAL CORP 0.44%
HEARTLAND FINANCIAL USA INC 0.44%
LIVE NATION ENTERTAINMENT IN 0.44%
CENTURY COMMUNITIES INC 0.42%
CHICAGO BRIDGE & IRON CO NV 0.42%
MERITOR INC 0.42%
INVESTMENT TECHNOLOGY GROUP 0.41%
META FINANCIAL GROUP INC 0.41%
NAVISTAR INTERNATIONAL CORP 0.41%
NOMAD FOODS LTD 0.41%
TAHOE RESOURCES INC 0.41%
BERKSHIRE HILLS BANCORP INC 0.39%
INDEPENDENT BANK GROUP INC 0.39%
TCP CAPITAL CORP 0.39%
BMC STOCK HOLDINGS INC 0.38%
DICKS SPORTING 0.38%
NMI HOLDINGS INC-CLASS A 0.38%
SELECT ENERGY SERVICES INC-A 0.38%
TRIPLEPOINT VENTURE GROWTH B 0.38%
WASHINGTON TRUST BANCORP 0.38%
FIRST DEFIANCE FINL CORP 0.37%
GREENHILL & CO INC 0.37%
MALLINCKRODT PLC 0.37%
MOTORCAR PARTS OF AMERICA IN 0.37%
PCSB FINANCIAL CORP 0.37%
STERICYCLE INC 0.37%
COOPER TIRE & RUBBER 0.36%
FIRST BANCORP/NC 0.36%
FLOWSERVE CORP 0.36%
NAUTILUS INC 0.36%
PHOTRONICS INC 0.36%
SOUTHSIDE BANCSHARES INC 0.36%
SOUTHWESTERN ENERGY CO 0.36%
YELP INC 0.36%
ANTERO RESOURCES CORP 0.35%
GREIF INC -CL A 0.35%
KENNAMETAL INC 0.35%
ENTRAVISION COMMUNICATIONS-A 0.34%
WINTRUST FINANCIAL CORP 0.34%
CENTRAL EUROPEAN MEDIA ENT-A 0.33%
CONVERGYS CORP 0.33%
GROUPON INC 0.33%
JABIL INC 0.33%
LSB INDUSTRIES INC 0.33%
MERCER INTERNATIONAL INC 0.33%
NORTHWEST PIPE CO 0.33%
SOLAR CAPITAL LTD 0.33%
UNITED COMMUNITY BANKS/GA 0.33%
BED BATH & BEYOND INC 0.32%
DINEEQUITY INC 0.32%
SILICON MOTION TECHNOL-ADR 0.32%
CIVISTA BANCSHARES INC 0.31%
DSW INC-CLASS A 0.31%
GREENLIGHT CAPITAL RE LTD-A 0.31%
C&J ENERGY SERVICES INC 0.30%
FIRST MERCHANTS CORP 0.30%
GENER8 MARITIME INC 0.30%
VERIFONE SYSTEMS INC 0.30%
WASHINGTON FEDERAL INC 0.30%
ABERCROMBIE & FITCH CO-CL A 0.29%
BRINKER INTERNATIONAL INC 0.29%
IES HOLDINGS INC 0.29%
OM ASSET MANAGEMENT PLC 0.29%
SM ENERGY CO 0.29%
STEELCASE INC-CL A 0.29%
CECO ENVIRONMENTAL CORP 0.28%
EDUCATION REALTY TRUST INC 0.28%
FINISH LINE/THE - CL A 0.28%
PARSLEY ENERGY INC-CLASS A 0.28%
TERADYNE INC 0.28%
HERCULES CAPITAL INC 0.27%
MODINE MANUFACTURING CO 0.27%
ARTISAN PARTNERS ASSET MA -A 0.26%
COVENANT TRANSPORT GRP-CL A 0.26%
DILLARDS INC-CL A 0.26%
INTERNATIONAL GAME TECHNOLOG 0.26%
PROVIDENT FINANCIAL SERVICES 0.26%
EXTENDED STAY AMERICA INC 0.25%
ADVANCED ENERGY INDUSTRIES 0.24%
GLOBAL BRASS & COPPER HOLDIN 0.24%
GARDNER DENVER HOLDINGS INC 0.23%
KEANE GROUP INC 0.23%
NRG ENERGY INC 0.23%
NEW MEDIA INVESTMENT GROUP 0.22%
NEW SENIOR INVESTMENT GROUP 0.22%
SUPREME INDS INC-CLASS A 0.22%
AMN HEALTHCARE SERVICES INC 0.21%
FRANKLIN FINANCIAL NETWORK 0.21%
LIBBEY INC 0.21%
TCF FINANCIAL CORP 0.21%
TRISTATE CAPITAL HLDGS INC 0.21%
BEL FUSE INC-CL B 0.20%
INTERFOR CORP 0.20%
J. JILL INC 0.20%
J2 GLOBAL INC 0.20%
NOVA MEASURING INSTRUMENTS 0.20%
PATTERSON-UTI ENERGY INC 0.20%
PERRY ELLIS INTERNATIONAL 0.20%
DOREL INDUSTRIES-CL B 0.19%
AAC HOLDINGS INC 0.18%
DIME COMMUNITY BANCSHARES 0.18%
OCH-ZIFF CAPITAL MANAGEMEN-A 0.18%
STERLING CONSTRUCTION CO 0.18%
WALKER & DUNLOP INC 0.17%
COHU INC 0.16%
FIFTH STREET FINANCE CORP 0.16%
GTT COMMUNICATIONS INC 0.16%
OLYMPIC STEEL INC 0.16%
SUMMIT HOTEL PROPERTIES INC 0.16%
ACACIA COMMUNICATIONS INC 0.15%
GRAY TELEVISION INC 0.15%
HARDWOODS DISTRIBUTION INC 0.15%
INDEPENDENCE CONTRACT DRILLI 0.15%
PACIFIC ETHANOL INC 0.15%
RED LION HOTELS CORP 0.15%
REXNORD CORP 0.15%
VITAMIN SHOPPE INC 0.15%
ARMSTRONG FLOORING INC 0.14%
ATKORE INTERNATIONAL GROUP I 0.14%
COSTAMARE INC 0.14%
SMART SAND INC 0.13%
FIVE POINT HOLDINGS LLC-CL A 0.12%
ORION GROUP HOLDINGS INC 0.12%
STORE CAPITAL CORP 0.12%
BUILDERS FIRSTSOURCE INC 0.11%
SPEEDWAY MOTORSPORTS INC 0.11%
US SILICA HOLDINGS INC 0.11%
ALBANY INTL CORP-CL A 0.10%
FIRST CONNECTICUT BANCORP 0.10%
GLATFELTER 0.10%
RED ROCK RESORTS INC-CLASS A 0.10%
UNIVEST CORP OF PENNSYLVANIA 0.10%
WEATHERFORD INTERNATIONAL PL 0.10%
ICHOR HOLDINGS LTD 0.09%
SCORPIO BULKERS INC 0.09%
MCBC HOLDINGS INC 0.07%
TOWER INTERNATIONAL INC 0.07%
HUDSON TECHNOLOGIES INC 0.06%
ASTEC INDUSTRIES INC 0.05%
POWELL INDUSTRIES INC 0.05%
WADDELL & REED FINANCIAL-A 0.05%
AMPCO-PITTSBURGH CORP 0.04%
AVID TECHNOLOGY INC 0.04%
KIMBALL INTERNATIONAL-B 0.04%
SYNALLOY CORP 0.02%
BANCTEC INC-144A CONTINGENT VALUE RIGHTS 0.00%
FERROGLOBE REPRESENTATION & 0.00%
CANADIAN DOLLAR ACCOUNT -0.14%

Prior top 10 holdings

Top 10 holdings as of 09/30/17
Hain Celestial Group The
Rlj Lodging Trust
Carpenter Technology Corp
Sprouts Farmers Market
Calpine Corp
Hub Group
Minerals Technologies
Party City Holdco
Radian Group
Atkore International Group
Holdings represent 10.43% of portfolio
Top 10 holdings as of 08/31/17
Cision
Hyster-Yale Materials Handling
Hain Celestial Group The
Radian Group
New York Reit
Rlj Lodging Trust
Energen Corp
Store Capital Corp
Kennedy-Wilson Holdings
Calpine Corp
Holdings represent 12.48% of portfolio
Top 10 holdings as of 07/31/17
Radian Group
Party City Holdco
Hyster-Yale Materials Handling
New York Reit
Rlj Lodging Trust
Sprouts Farmers Market
Kennedy-Wilson Holdings
Seaworld Entertainment
Calpine Corp
Healthsouth Corp
Holdings represent 11.36% of portfolio
Top 10 holdings as of 06/30/17
Party City Holdco
Radian Group
Ncr Corp
Quanta Services
Flex
Sprouts Farmers Market
Seaworld Entertainment
New York Reit
Hyster-Yale Materials Handling
Time
Holdings represent 11.10% of portfolio

Portfolio composition as of 09/30/17

Common stock 88.53%
Cash and net other assets 11.47%

Equity statistics as of 09/30/17

Median market cap $1.36B
Weighted average market cap $2.10B
Price to book 1.85
Price to earnings 16.38

Fund characteristics will vary over time.

Due to rounding, percentages may not equal 100%.

Consider these risks before investing: Investments in small and/or midsize companies increase the risk of greater price fluctuations. Value stocks may fail to rebound, and the market may not favor value-style investing. Stock prices may fall or fail to rise over time for several reasons, including general financial market conditions and factors related to a specific company or industry. You can lose money by investing in the fund.

Top Industry Sectors as of 09/30/17

Financials 16.85%
Industrials 16.12%
Consumer discretionary 14.40%
Information technology 12.00%
Cash and net other assets 11.47%
Energy 6.95%
Materials 6.58%
Consumer staples 6.39%
Real estate 4.96%
 
Other
4.28%
Health care 2.98%
Utilities 1.25%
Telecommunication services 0.05%

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

Sectors will vary over time. Represents the equity portion of the portfolio.


Expenses

Expense ratio

Class A Class B Class C Class M Class R Class R5 Class R6 Class Y
Total expense ratio 1.42% 2.17% 2.17% 1.92% 1.67% 1.11% 1.01% 1.17%
What you pay 1.42% 2.17% 2.17% 1.92% 1.67% 1.11% 1.01% 1.17%

Sales charge

Investment Breakpoint Class A Class B Class C Class M Class R Class R5 Class R6 Class Y
$0-$49,999 5.75% 0.00% 0.00% 3.50% -- -- -- --
$50,000-$99,999 4.50% 0.00% 0.00% 2.50% -- -- -- --
$100,000-$249,999 3.50% -- 0.00% 1.50% -- -- -- --
$250,000-$499,999 2.50% -- 0.00% 1.00% -- -- -- --
$500,000-$999,999 2.00% -- 0.00% 1.00% -- -- -- --
$1M-$4M 0.00% -- -- -- -- -- -- --
$4M-$50M 0.00% -- -- -- -- -- -- --
$50M+ 0.00% -- -- -- -- -- -- --

CDSC

  Class A (sales for $1,000,000+) Class B Class C Class M Class R Class R5 Class R6 Class Y
0 to 9 mts. 1.00% 5.00% 1.00% -- -- -- -- --
9 to 12 mts. 0.00% 5.00% 1.00% -- -- -- -- --
2 yrs. -- 4.00% 0.00% -- -- -- -- --
3 yrs. -- 3.00% 0.00% -- -- -- -- --
4 yrs. -- 3.00% 0.00% -- -- -- -- --
5 yrs. -- 2.00% 0.00% -- -- -- -- --
6 yrs. -- 1.00% 0.00% -- -- -- -- --
7+ yrs. -- 0.00% 0.00% -- -- -- -- --

The Russell 2000 Value Index is an unmanaged index of those companies in the small-cap Russell 2000 Index chosen for their value orientation. You cannot invest directly in an index.

Consider these risks before investing: Investments in small and/or midsize companies increase the risk of greater price fluctuations. Value stocks may fail to rebound, and the market may not favor value-style investing. Stock prices may fall or fail to rise over time for several reasons, including general financial market conditions and factors related to a specific company or industry. You can lose money by investing in the fund.

Eric Harthun will retire from Putnam effective 12/31/17.