Active Income

Convertible Securities Fund (Class A)  (PCONX)

Offering investors the diverse benefits of convertible securities since 1972

Highlights

Objective

The fund seeks, with equal emphasis, current income and capital appreciation. Its secondary objective is conservation of capital.

Strategy and process

  • Balanced profile: The fund seeks to achieve an equilibrium balancing much of the upside potential of equities, the lower downside risk of bonds, and an attractive current yield.
  • Effective diversification: The fund can provide effective diversification for investor portfolios; convertible securities are not highly correlated with stocks and correlation is near zero versus aggregate bond strategies.
  • Joint venture: Uniquely combining both dedicated fixed income and equity expertise to enhance the ability to fully exploit these hybrid securities.

Fund price

 Yesterday’s close 52-week high 52-week low
Net asset value $33.61
0.12% | $0.04 		$36.08
12/22/20 		$22.89
04/09/20
(Optional)

Fund facts as of 03/31/21

Total net assets
$998.28M
Turnover (fiscal year end)
98%
Dividend frequency (view rate)
Quarterly
Number of holdings
139
Fiscal year-end
October
CUSIP / Fund code
746476100 / 0007
Inception date
06/29/72
Category
Taxable Income
Open to new investors
Ticker
PCONX

Management team

Robert L. Salvin

Co-Head of Corporate and Tax-exempt Credit

Anthony J. Daigle

Portfolio Manager

Performance

Consistency of positive performance over five years

Performance represents 5-year returns in rolling quarter-end periods since inception.

Performance shown above does not reflect the effects of any sales charges. Note that returns of 0.00% are counted as positive periods. For complete fund performance, please see below.

23.04%

Best 5-year annualized return

(for period ending 03/31/83)

-3.55%

Worst 5-year annualized return

(for period ending 12/31/08)

10.40%

Average 5-year annualized return

  • Total return (%) as of 03/31/21

  • Annual performance as of 03/31/21

Annualized Total return (%) as of 03/31/21

Annualized performance 1 yr. 3 yrs. 5 yrs. 10 yrs.
Before sales charge 66.26% 19.99% 17.58% 10.72%
After sales charge 56.70% 17.64% 16.19% 10.07%
ICE BofA U.S. Convertible Index 74.13%21.91%18.80%12.35%

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. The "before sales charge" performance does not reflect the current maximum sales charges, which we explain below. If performance did reflect the charges, it would be lower. The "after sales charge" performance (or returns at public offering price) varies by share class and fund. For class A and class M shares, the current maximum initial sales charges are 5.75% and 3.50% for equity funds and 4.00% and 3.25% for income funds, respectively (with these exceptions: 2.25% for class A of Putnam Floating Rate Income Fund, Short-Term Municipal Income, Short Duration Bond Fund, and Fixed Income Absolute Return Fund). Class B share performance reflects the applicable contingent deferred sales charge (CDSC), which is 5% in the first year, declines to 1% in the sixth year, and is eliminated thereafter (except for Putnam Floating Rate Income Fund, Putnam Short Duration Bond Fund, Putnam Fixed Income Absolute Return Fund, and Putnam Short-Term Municipal Income Fund; for these funds, the CDSC is 1% in the first year, declines to 0.5% in the second year, and is eliminated thereafter). Class C share performance reflects 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 by adjusting for the applicable sales charge (or CDSC) and, except for class Y shares, the higher operating expenses for such shares (note, for two funds — Putnam Tax-Free High Yield Fund and Putnam Strategic Intermediate Municipal Fund performance prior to inception is based on the historical performance of class B shares). Performance for class A, C, R6, and Y shares of Putnam Mortgage Opportunities Fund before their inception is derived from the historical performance of class I shares, which has been adjusted for the applicable sales charge (or CDSC) and the higher operating expenses for such shares. The "after sales charge" performance (at public offering price) for class N shares reflects the current maximum initial sales charge of 1.50%. Class R, R3, R4, R5, and R6 shares, which are 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 R3 and R4 shares prior to their inception is derived from the historical performance of class Y shares by adjusting for the higher operating expenses for such shares. Performance for class R5 shares before their inception is derived from the historical performance of class Y shares, which has not been adjusted for the lower expenses; had it been adjusted, performance would be higher (with the exception of the RetirementReady Maturity, 2025, 2030, 2035, and 2040 Funds, for which performance is derived from the historical performance of class R6 shares and has been adjusted for the higher operating expenses for such shares; and the RetirementReady 2045, 2050, 2055, and 2060 Funds, for which performance is derived from the historical performance of class R6 shares and has not been adjusted for the lower expenses; had it been adjusted, performance would be higher). Performance for class R6 shares before their inception is derived from the historical performance of class Y shares, which has not been adjusted for the lower operating expenses; had it been adjusted, performance would be higher. For a portion of the period, some funds had expenses limitations or had been sold on a limited basis with limited assets and expenses. Had these limits not been in place, performance would be lower.

Performance snapshot

  Before sales charge After sales charge
1 mt. as of 03/31/21 -3.94% -9.46%
YTD as of 04/09/21 4.16% -1.83%

Yield

Distribution rate before sales charge
as of 04/09/21		 0.38%
Distribution rate after sales charge
as of 04/09/21		 0.36%
30-day SEC yield as of 03/31/21
(after sales charge)		 -0.15%

Risk-adjusted performance as of 02/28/21

Alpha (3 yrs.) 0.02
Sharpe ratio (3 yrs.) 1.30
Treynor ratio (3 yrs.) 22.01
Information ratio (3 yrs.) -0.51

Volatility as of 02/28/21

Standard deviation (3 yrs.) 15.68%
Beta 0.93
R-squared 0.97

Fixed income statistics as of 02/28/21

Average effective duration 1.27 yrs.

Capture ratio as of 02/28/21

Up-market (3 yrs.) 94.35
Down-market (3 yrs.) 96.35

Lipper rankings as of 02/28/21

Time period Rank/Funds in category Percentile ranking
1 yr. 42/75 56%
3 yrs. 39/70 55%
5 yrs. 31/68 45%
10 yrs. 21/49 42%
Lipper category: Convertible Securities Funds

Morningstar Ratings™ as of 02/28/21

Time period Funds in category Morningstar Rating™
Overall 71
3 yrs. 71
5 yrs. 69
10 yrs. 50
Morningstar category: Convertibles

Distributions

Record/Ex dividend date 03/26/21
Payable date 03/30/21
Income $0.032
Extra income --
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

Zillow Group 2.38%
Square 2.27%
Broadcom 2.21%
Southwest Airlines 1.93%
Tesla 1.84%
Nextera Energy 1.82%
Snap 1.68%
Liberty Media Corp 1.67%
Coupa Software 1.62%
Palo Alto Networks 1.60%
Top 10 holdings, percent of portfolio 19.02%

Portfolio composition as of 02/28/21

Convertible bonds and notes 82.25%
Mandatories 13.51%
Convertible preferred stock 1.55%
Cash and net other assets 1.46%
Common stock 1.23%

Equity statistics as of 02/28/21

Median market cap $16.59B
Weighted average market cap $50.54B
Price to book 6.22
Price to earnings 67.19

Fixed income statistics as of 02/28/21

Average stated maturity 4.61 yrs.
Average effective duration 1.27 yrs.
Average yield to maturity -7.19%
Average coupon 1.76%

Maturity detail as of 02/28/21

0 - 1 yr. 4.63%
1 - 5 yrs. 69.36%
5 - 10 yrs. 23.37%
10 - 15 yrs. 0.70%
Over 15 yrs. 1.94%

Quality rating as of 02/28/21

A 2.75%
BBB 7.26%
BB 6.04%
B 1.69%
Not Rated 80.80%
Cash and net other assets 1.46%

Fund characteristics will vary over time.

Due to rounding, percentages may not equal 100%.

Consider these risks before investing: Convertible securities prices may fall or fail to rise over time for several reasons, including general financial market conditions, changing market perceptions (including perceptions about the risk of default and expectations about monetary policy or interest rates), changes in government intervention in the financial markets, and factors related to a specific issuer or industry. These and other factors may lead to increased volatility and reduced liquidity in the fund's portfolio holdings. These risks are generally greater for convertible securities issued by small and/or midsize companies. Convertible securities' prices may be adversely affected by underlying common stock price changes. While convertible securities tend to provide higher yields than common stocks, the higher yield may not protect against the risk of loss or mitigate any loss associated with a convertible security's price decline. Convertible securities are subject to credit risk, which is the risk that an issuer of the fund's investments may default on payment of interest or principal. Credit risk is generally greater for below- investment-grade convertible securities. Convertible securities may be less sensitive to interest-rate changes than non-convertible bonds because of their structural features (e.g., convertibility, "put" features). Interest-rate risk is generally greater, however, for longer-term bonds and convertible securities whose underlying stock price has fallen significantly below the conversion price. Our investment techniques, analyses, and judgments may not produce the outcome we intend. The investments we select for the fund may not perform as well as other securities that we do not select for the fund. We, or the fund's other service providers, may experience disruptions or operating errors that could have a negative effect on the fund. You can lose money by investing in the fund.

Credit qualities are shown as a percentage of the fund’s net assets. A bond rated BBB or higher (A-3/SP-3 or higher, for short-term debt) is considered investment grade. This chart reflects the highest security rating provided by one or more of Standard & Poor’s, Moody’s, and Fitch. Ratings may vary over time. Equity securities are shown in the not-rated category. Cash and net other assets, if any, represent the market value weights of cash and derivatives and may show a negative market value as a result of the timing of trade versus settlement date transactions. The fund itself has not been rated by an independent rating agency.

Top industry sectors as of 02/28/21

Information technology 35.74%
Consumer discretionary 19.83%
Health care 17.44%
Communication services 11.26%
Industrials 5.66%
Utilities 3.94%
Financials 1.65%
Cash and net other assets 1.46%
Energy 1.21%
 
Other		 1.81%
Real estate 1.14%
Consumer staples 0.67%

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 02/28/21

United States 94.29%
Israel 2.04%
Cash and net other assets 1.46%
Thailand 0.68%
Canada 0.66%
Jersey 0.61%
China 0.26%

Expenses

Expense ratio

 Class A Class B Class C Class R Class R6 Class Y
Total expense ratio 1.04% 1.79% 1.79% 1.29% 0.72% 0.79%
What you pay 1.04% 1.79% 1.79% 1.29% 0.72% 0.79%

Sales charge

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

CDSC

  Class A (sales for $1,000,000+) Class B Class C Class 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% -- -- --

The ICE BofA U.S. Convertible Index tracks the performance of publicly issued U.S. dollar denominated convertible securities of U.S. companies. You cannot invest directly in an index.

Consider these risks before investing: Convertible securities prices may fall or fail to rise over time for several reasons, including general financial market conditions, changing market perceptions (including perceptions about the risk of default and expectations about monetary policy or interest rates), changes in government intervention in the financial markets, and factors related to a specific issuer or industry. These and other factors may lead to increased volatility and reduced liquidity in the fund's portfolio holdings. These risks are generally greater for convertible securities issued by small and/or midsize companies. Convertible securities' prices may be adversely affected by underlying common stock price changes. While convertible securities tend to provide higher yields than common stocks, the higher yield may not protect against the risk of loss or mitigate any loss associated with a convertible security's price decline. Convertible securities are subject to credit risk, which is the risk that an issuer of the fund's investments may default on payment of interest or principal. Credit risk is generally greater for below- investment-grade convertible securities. Convertible securities may be less sensitive to interest-rate changes than non-convertible bonds because of their structural features (e.g., convertibility, "put" features). Interest-rate risk is generally greater, however, for longer-term bonds and convertible securities whose underlying stock price has fallen significantly below the conversion price. Our investment techniques, analyses, and judgments may not produce the outcome we intend. The investments we select for the fund may not perform as well as other securities that we do not select for the fund. We, or the fund's other service providers, may experience disruptions or operating errors that could have a negative effect on the fund. You can lose money by investing in the fund.

Credit qualities are shown as a percentage of the fund’s net assets. A bond rated BBB or higher (A-3/SP-3 or higher, for short-term debt) is considered investment grade. This chart reflects the highest security rating provided by one or more of Standard & Poor’s, Moody’s, and Fitch. Ratings may vary over time. Equity securities are shown in the not-rated category. Cash and net other assets, if any, represent the market value weights of cash and derivatives and may show a negative market value as a result of the timing of trade versus settlement date transactions. The fund itself has not been rated by an independent rating agency.