Convertible Securities Fund  (PCONX)

Offering investors the diverse benefits of convertible securities since 1972

Objective

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

Strategy and process

  • Growth potential: The fund seeks to provide stock-like returns over time as the stock component of convertible securities tends to rise with the broader market.
  • Steady income: The fund's performance in down markets is bolstered by the contractually guaranteed income from convertible securities.
  • Effective diversification: The fund can provide effective diversification for many investor portfolios, because convertible securities are not highly correlated with either stocks or bonds.

Fund price

Yesterday’s close 52-week high 52-week low
Net asset value $26.16
0.50% | $0.13
$26.55
11/24/17
$23.07
12/30/16
Historical fund price

Fund facts as of 11/30/17

Total net assets
$716.02M
Turnover (fiscal year end)
56%
Dividend frequency (view rate)
Quarterly
Number of holdings
118
Fiscal year-end
October
CUSIP / Fund code
746476100 / 0007
Inception date
06/29/72
Category
Value
Open to new investors
Ticker
PCONX

Management team


Portfolio Manager

Portfolio Manager

Portfolio Manager, Analyst


Literature


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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)


10.55%

Average 5-year annualized return


  • 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 13.92% 5.32% 9.13% 5.75%
After sales charge 7.37% 3.26% 7.85% 5.13%
BofA ML All U.S. Convertible Index 14.31% 6.82% 11.01% 6.83%

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 11/30/17 0.27 % -5.50 %
YTD as of 12/15/17 15.05 % 8.43 %

Yield

Distribution rate before sales charge
as of 12/15/17
1.83%
Distribution rate after sales charge
as of 12/15/17
1.73%
30-day SEC yield as of 11/30/17
(after sales charge)
0.89%

Risk-adjusted performance as of 11/30/17

Alpha (3 yrs.) -1.38
Sharpe ratio (3 yrs.) 0.63
Treynor ratio (3 yrs.) 4.93
Information ratio (3 yrs.) -0.87

Volatility as of 11/30/17

Standard deviation (3 yrs.) 8.11%
Beta 1.03
R-squared 0.97

Capture ratio as of 11/30/17

Up-market (3 yrs.) 99.40
Down-market (3 yrs.) 113.79

Lipper rankings as of 11/30/17

Convertible Securities Funds Percentile ranking Rank/Funds in category
1 yr. 26% 22/84
3 yrs. 50% 34/67
5 yrs. 56% 36/64
10 yrs. 26% 10/38

Morningstar ratings as of 11/30/17

Convertibles Rating Funds in category
Overall (75)
3 yrs. (75)
5 yrs. (67)
10 yrs. (41)

Distributions

Record/Ex dividend date 09/27/17
Payable date 09/29/17
Income $0.12
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 11/30/17

Microchip Technology 3.19%
Intel Corp 2.22%
Micron Technology 2.19%
Liberty Media Corp 2.14%
Dish Network Corp 2.05%
Lam Research Corp 1.91%
BD Medical 1.86%
Priceline Group The 1.77%
Wells Fargo 1.69%
Crown Castle International Corp 1.59%
Top 10 holdings, percent of portfolio 20.61%

Full portfolio holdings as of 09/30/17

MICROCHIP TEC P/P 144A CV 01.6250 02/15/2027 3.37%
NOVELLUS SYS CV 02.6250 05/15/2041 2.23%
INTEL CORP CV 03.2500 08/01/2039 2.00%
DISH NETWORK CV 03.3750 08/15/2026 1.93%
PRICELINE GRP INC/THE CV 01.0000 03/15/2018 1.92%
ALLERGAN PLC 05.5000 CV PFD 1.86%
WELLS FARGO & COMPANY 07.5000 CV PFD 1.69%
JAZZ INVESTME USD 01.8750 08/15/2021 1.66%
BECTON DICKINSON AND CO 06.1250 CV PFD 1.60%
LIBERTY MEDIA CV 01.3750 10/15/2023 1.56%
AMERICAN TOWER CORP 05.5000 CV PFD 1.46%
NEXTERA ENERGY INC 06.1230 CV PFD 1.46%
LIBERTY INTER P/P 144A CV 01.7500 09/30/2046 1.42%
ON SEMICONDUC CV 01.0000 12/01/2020 1.36%
MICRON TECH CV 01.6250 02/15/2033 1.24%
AMG CAPITAL TRUST II 05.1500 CV PFD 1.23%
MICRON TECHNO CV 03.0000 11/15/2043 1.23%
BLACKSTONE MORTGAGE TR CV 05.2500 12/01/2018 1.21%
DTE ENERGY CO 06.5000 CV PFD 1.19%
REALPAGE INC P/P 144A CV 01.5000 11/15/2022 1.19%
T-MOBILE US INC 05.5000 CV PFD 1.19%
BANK OF AMERICA CORP 07.2500 CV PFD 1.16%
HESS CORP 08.0000 CV PFD 1.15%
ANTHEM INC 05.2500 CV PFD 1.11%
STARWOOD PROP TR CV 04.0000 01/15/2019 1.11%
CROWN CASTLE INTL CORP 06.8750 CUM CV PFD 1.10%
DYCOM IND INC CV 00.7500 09/15/2021 1.08%
STANLEY BLACK & DECKER I 05.3750 CV PFD 1.08%
TERADYNE INC P/P 144A CV 01.2500 12/15/2023 1.08%
MANDATORY EXCH TRUST P/P 144A 05.7500 CV PFD 1.06%
EURONET WORLD CV 01.5000 10/01/2044 1.04%
ELECTRONICS F CV 00.7500 09/01/2019 1.01%
SALESFORCE.COM INC 1.01%
NAVISTAR INTL CV 04.7500 04/15/2019 1.00%
AEROJET ROCK P/P 144A CV 02.2500 12/15/2023 0.99%
COLONY STARWO P/P 144A CV 03.5000 01/15/2022 0.98%
INTEGRATED DE CV 00.8750 11/15/2022 0.98%
CHESAPEAKE EN P/P 144A CV 05.5000 09/15/2026 0.97%
MACQUARIE INFRASTRUCTU CV 02.0000 10/01/2023 0.95%
MEDICINES CO CV 02.7500 07/15/2023 0.95%
PROOFPOINT IN CV 00.7500 06/15/2020 0.94%
IAC FINANCECO P/P 144A CV 00.8750 10/01/2022 0.93%
ISTAR INC 04.5000 CUM CV PFD 0.93%
OSI SYS INC P/P 144A CV 01.2500 09/01/2022 0.92%
BELDEN INC 06.7500 CV PFD 0.91%
FIDELITY NATL CV 04.2500 08/15/2018 0.86%
PACIRA PHARMA P/P 144A CV 02.3750 04/01/2022 0.86%
SQUARE INC P/P 144A CV 00.3750 03/01/2022 0.86%
VECTOR GROUP LTD CV 01.7500 04/15/2020 0.86%
REXNORD CORP 05.7500 CUM CV PFD 0.83%
WHITING PETRO CV 01.2500 04/01/2020 0.82%
CYPRESS SEMIC CV 04.5000 01/15/2022 0.81%
HUBSPOT INC P/P 144A CV 00.2500 06/01/2022 0.80%
SIEMENS FINANCIERINGSMAT USD 01.6500 08/16/2019 0.80%
CITRIX SYSTEM CV 00.5000 04/15/2019 0.79%
J2 GLOBAL COMM CV 03.2500 06/15/2029 0.79%
NXP SEMICONDUCTORS USD 01.0000 12/01/2019 0.79%
GREENBRIER C P/P 144A CV 02.8750 02/01/2024 0.78%
LIBERTY EXPEDIA HOLD INC 144A 0.78%
INPHI CORP P/P 144A CV 00.7500 09/01/2021 0.77%
ALEXANDRIA REAL ESTATE E 07.0000 CUM CV PFD 0.76%
BIOMARIN PHARMA CV 01.5000 10/15/2020 0.76%
RED HAT INC CV 00.2500 10/01/2019 0.76%
SERVICENOW CV 00.0000 11/01/2018 0.76%
CEMEX SAB DE CV USD 03.7200 03/15/2020 0.75%
NICE SYS INC P/P 144A CV 01.2500 01/15/2024 0.75%
SUCAMPO PHARM P/P 144A CV 03.2500 12/15/2021 0.75%
WRIGHT MEDCL CV 02.0000 02/15/2020 0.75%
WORKDAY INC P/P 144A CV 00.2500 10/01/2022 0.74%
AIR TRANSPORT P/P 144A CV 01.1250 10/15/2024 0.72%
CLOVIS INC CV 02.5000 09/15/2021 0.72%
LIVE NATION E CV 02.5000 05/15/2019 0.70%
IMPAX LABORAT CV 02.0000 06/15/2022 0.69%
TWITTER INC CV 01.0000 09/15/2021 0.69%
LIBERTY MEDIA CV 02.2500 09/30/2046 0.67%
TESLA INC CV 01.2500 03/01/2021 0.65%
AVID TECH INC CV 02.0000 06/15/2020 0.62%
TTM TECHNOLOGIES INC CV 01.7500 12/15/2020 0.62%
WAYFAIR INC P/P 144A CV 00.3750 09/01/2022 0.62%
ENCORE CAPITA CV 03.0000 07/01/2020 0.60%
FINISAR CORP P/P 144A CV 00.5000 12/15/2036 0.60%
HORIZON GLOBAL CORP CV 02.7500 07/01/2022 0.59%
TELADOC INC P/P 144A CV 03.0000 12/15/2022 0.58%
JAZZ US HOLDINGS INC CV 08.0000 12/31/2018 0.54%
HOLOGIC INC CV 02.0000 03/01/2042 0.53%
KAMAN CORP P/P 144A CV 03.2500 05/01/2024 0.51%
NEUROCRINE P/P 144A CV 02.2500 05/15/2024 0.51%
II-VI INC P/P 144A CV 00.2500 09/01/2022 0.49%
OASIS PETROLEUM INC CV 02.6250 09/15/2023 0.47%
HERCULES CAPI P/P 144A CV 04.3750 02/01/2022 0.46%
CALAMP CORP CV 01.6250 05/15/2020 0.45%
NEVRO CORP CV 01.7500 06/01/2021 0.43%
CARBONITE INC P/P 144A CV 02.5000 04/01/2022 0.42%
HERITAGE INS P/P 144A CV 05.8750 08/01/2037 0.42%
LIVE NATION ENTERTAINMENT IN 0.42%
IGI LABS INC CV 03.7500 12/15/2019 0.40%
PRICELINE GRO CV 00.9000 09/15/2021 0.40%
SCORPIO TANKERS INC P/P 144A 02.3750 07/01/2019 0.40%
SAFEGUARD SCI CV 05.2500 05/15/2018 0.38%
NCR CORP 05.5000 CV PFD 0.34%
MERRIMACK PHARMACEUTI CV 04.5000 07/15/2020 0.33%
NVIDIA CORP 0.33%
DYNEGY INC 07.0000 CV PFD 0.32%
BANK OF AMERICA CORP 0.30%
JPMORGAN CHASE & CO 0.29%
ALPHABET INC-CL C 0.26%
COMCAST CORP-CLASS A 0.24%
DANAHER CORP 0.24%
SYNCHRONOSS TECH CV 00.7500 08/15/2019 0.22%
STONE ENERGY CORP 07.5000 05/31/2022 0.15%
STONE ENERGY CORP 0.14%
CHINA MEDICAL TECH INC USD 04.0000 08/15/2018 0.03%
CHINA MEDICAL TECH P/P 144A 06.2500 12/15/2017 0.03%
CINCINNATI BELL INC 06.7500 CUM CV PFD 0.00%
GT ADVANCED TECH INC 0.00%
GT ADVANCED TECH INC 0.00%
GT ADVANCED TECH INC CV 03.0000 12/15/2020 0.00%
GT ADVANCED TECHNOLOGIES INC 0.00%
POWERWAVE TECHNOLOGIES CV 03.8750 10/01/2027 0.00%

Prior top 10 holdings

Top 10 holdings as of 11/30/17
Microchip Technology
Intel Corp
Micron Technology
Liberty Media Corp
Dish Network Corp
Lam Research Corp
BD Medical
Priceline Group The
Wells Fargo
Crown Castle International Corp
Holdings represent 20.61% of portfolio
Top 10 holdings as of 10/31/17
Microchip Technology
Micron Technology
Lam Research Corp
Priceline Group The
Intel Corp
Liberty Media Corp
Dish Network Corp
BD Medical
Wells Fargo
Allergan
Holdings represent 22.18% of portfolio
Top 10 holdings as of 09/30/17
Microchip Technology
Micron Technology
Priceline Group The
Lam Research Corp
Liberty Media Corp
Intel Corp
Dish Network Corp
Allergan
Wells Fargo
Jazz Investments I
Holdings represent 21.76% of portfolio
Top 10 holdings as of 08/31/17
Microchip Technology
Priceline Group The
Liberty Media Corp
Lam Research Corp
Micron Technology
Allergan
Dish Network Corp
Intel Corp
Wells Fargo
Jazz Investments I
Holdings represent 21.90% of portfolio

Portfolio composition as of 11/30/17

Convertible bonds and notes 68.20%
Mandatories 17.12%
Convertible preferred stock 6.07%
Cash and net other assets 5.49%
Common stock 2.97%
Corporate bonds and notes 0.15%

Equity statistics as of 11/30/17

Median market cap $4.81B
Weighted average market cap $42.62B
Price to book 2.93
Price to earnings 20.98

Fixed income statistics as of 11/30/17

Average stated maturity 7.52 yrs.
Average effective duration 1.39 yrs.
Average yield to maturity -1.45%
Average coupon 2.91%
Average price $137.05

Maturity detail as of 11/30/17

0 - 1 yr. 18.31%
1 - 5 yrs. 48.80%
5 - 10 yrs. 15.79%
10 - 15 yrs. 0.79%
Over 15 yrs. 16.31%

Quality rating as of 11/30/17

A 2.99%
BBB 18.01%
BB 12.53%
B 13.55%
CCC and Below 1.50%
Not Rated 45.93%
Cash and net other assets 5.49%

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, factors related to a specific company or industry, changing market perceptions of the risk of default and changes in government intervention in the financial markets. These factors may also lead to increased volatility and reduced liquidity in the markets for convertible securities. 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 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. 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 11/30/17

Information technology 35.00%
Health care 13.82%
Consumer discretionary 11.90%
Financials 9.99%
Industrials 8.33%
Real estate 5.72%
Cash and net other assets 5.49%
Energy 3.99%
Utilities 3.08%
 
Other
2.68%
Telecommunication services 1.15%
Consumer staples 0.85%
Materials 0.68%

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 11/30/17

United States 91.42%
Cash and net other assets 5.49%
Ireland 1.58%
Netherlands 0.77%
Mexico 0.68%
China 0.06%

Expenses

Expense ratio

Class A Class B Class C Class M Class R Class Y
Total expense ratio 1.09% 1.84% 1.84% 1.59% 1.34% 0.84%
What you pay 1.09% 1.84% 1.84% 1.59% 1.34% 0.84%

Sales charge

Investment Breakpoint Class A Class B Class C Class M Class R 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 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 BofA Merrill Lynch All U.S. Convertible Index consists of convertible bonds traded in the U.S. dollar denominated investment grade and non investment grade convertible securities sold into the U.S. market and publicly traded in the United States. 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, factors related to a specific company or industry, changing market perceptions of the risk of default and changes in government intervention in the financial markets. These factors may also lead to increased volatility and reduced liquidity in the markets for convertible securities. 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 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. 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.

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