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Convertible Securities Fund (Class A)  (PCONX)

Offering investors the diverse benefits of convertible securities since 1972

Convertible Securities Fund received an  Overall Morningstar Rating  of  

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 $24.99
-0.48% | $-0.12
$27.27
09/04/18
$24.45
11/20/18
Historical fund price

Fund facts as of 11/30/18

Total net assets
$693.66M
Turnover (fiscal year end)
56%
Dividend frequency (view rate)
Quarterly
Number of holdings
116
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, Analyst



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)


10.49%

Average 5-year annualized return


  • 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 9.29% 10.46% 7.48% 9.19%
After sales charge 3.00% 8.30% 6.22% 8.55%
ICE BofAML U.S. Convertible Index 12.15%11.83%9.31%11.00%

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 0.75% -5.04%
YTD as of 12/12/18 -0.13% -5.88%

Yield

Distribution rate before sales charge
as of 12/12/18
1.91%
Distribution rate after sales charge
as of 12/12/18
1.80%
30-day SEC yield as of 11/30/18
(after sales charge)
1.15%

Risk-adjusted performance as of 10/31/18

Alpha (3 yrs.) -1.72
Sharpe ratio (3 yrs.) 0.72
Treynor ratio (3 yrs.) 5.71
Information ratio (3 yrs.) -0.99

Volatility as of 10/31/18

Standard deviation (3 yrs.) 8.14%
Beta 1.03
R-squared 0.97

Capture ratio as of 10/31/18

Up-market (3 yrs.) 98.11
Down-market (3 yrs.) 116.83

Lipper rankings as of 10/31/18

Time period Rank/Funds in category Percentile ranking
1 yr. 64/81 79%
3 yrs. 43/77 56%
5 yrs. 34/61 55%
10 yrs. 10/40 25%
Lipper category: Convertible Securities Funds

Morningstar Ratings as of 10/31/18

Time period Funds in category Morningstar Rating
Overall 85
3 yrs. 85
5 yrs. 69
10 yrs. 43
Morningstar category: Convertibles

Distributions

Record/Ex dividend date 09/26/18
Payable date 09/28/18
Income $0.12
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

Top 10 holdings as of 10/31/18

Bank of America 2.29%
BD Medical 2.14%
Microchip Technology 2.11%
Nextera Energy 1.96%
Jazz Investments I 1.69%
Fortive Corp 1.65%
Servicenow 1.55%
Square 1.49%
Booking Holdings 1.49%
Realpage 1.48%
Top 10 holdings, percent of portfolio 17.85%

Full portfolio holdings as of 09/30/18

BECTON DICKINSON AND CO 06.1250 CUM CV PFD 2.22%
MICROCHIP TEC CV 01.6250 02/15/2027 2.21%
NEXTERA ENERGY INC 06.1230 CV PFD 1.79%
FORTIVE CORPORATION 05.0000 CUM CV PFD 1.66%
SERVICENOW IN CV 00.0000 06/01/2022 1.65%
BANK OF AMERICA CORP 07.2500 CV PFD 1.63%
REALPAGE INC CV 01.5000 11/15/2022 1.63%
JAZZ INVESTME USD 01.8750 08/15/2021 1.60%
HESS CORP 08.0000 CV PFD 1.59%
TELADOC INC P/P 144A CV 01.3750 05/15/2025 1.48%
PRICELINE.COM CV 00.3500 06/15/2020 1.45%
DISH NETWORK CV 03.3750 08/15/2026 1.40%
SQUARE INC P/P 144A CV 00.5000 05/15/2023 1.39%
BIOMARIN PHARMA CV 00.5990 08/01/2024 1.37%
MICRON TECHNO CV 03.0000 11/15/2043 1.33%
CROWN CASTLE INTL CORP 06.8750 CUM CV PFD 1.28%
LIBERTY MEDIA CV 01.3750 10/15/2023 1.21%
MEDICINES CO CV 02.5000 01/15/2022 1.21%
PALO ALTO NET P/P 144A CV 00.7500 07/01/2023 1.21%
MANDATORY EXCH TRUST P/P 144A 05.7500 CV PFD 1.20%
WORKDAY INC CV 00.2500 10/01/2022 1.19%
HUBSPOT INC CV 00.2500 06/01/2022 1.14%
OKTA INC P/P 144A CV 00.2500 02/15/2023 1.11%
CHESAPEAKE EN CV 05.5000 09/15/2026 1.10%
LIBERTY INTER P/P 144A CV 01.7500 09/30/2046 1.07%
JPMORGAN CHAS P/P 144A CV 00.2500 05/01/2023 1.06%
LIBERTY EXPEDIA HOLD INC 144A 1.06%
RINGCENTRAL P/P 144A CV 00.0000 03/15/2023 1.04%
SEMPRA ENERGY 06.0000 CUM CV PFD 1.03%
COLONY STARWO CV 03.5000 01/15/2022 1.02%
ILLUMINA INC P/P 144A CV 00.0000 08/15/2023 1.02%
SPLUNK INC P/P 144A CV 01.1250 09/15/2025 1.02%
NRG ENERGY P/P 144A CV 02.7500 06/01/2048 1.01%
IAC FINANCECO P/P 144A CV 00.8750 10/01/2022 0.99%
INTEL CORP CV 03.2500 08/01/2039 0.99%
EVERBRIDGE INC CV 01.5000 11/01/2022 0.98%
WELLS FARGO & COMPANY 07.5000 CV PFD 0.96%
DANAHER CORP 0.95%
CAESARS ENTERTAIN CORP CV 05.0000 10/01/2024 0.94%
DTE ENERGY CO 06.5000 CV PFD 0.92%
LIVE NATION P/P 144A CV 02.5000 03/15/2023 0.92%
WRIGHT MEDICA P/P 144A CV 01.6250 06/15/2023 0.90%
EXACT SCIENCES CORP CV 01.0000 01/15/2025 0.88%
INTL FLAVOR & FRAGRANCES 06.0000 CV PFD 0.88%
AKAMAI TECH P/P 144A CV 00.1250 05/01/2025 0.86%
COUPA SOFTW P/P 144A CV 00.3750 01/15/2023 0.86%
DOCUSIGN INC P/P 144A CV 00.5000 09/15/2023 0.85%
REXNORD CORP 05.7500 CUM CV PFD 0.83%
AIR TRANSPORT CV 01.1250 10/15/2024 0.82%
ALTERYX INC P/P 144A CV 00.5000 06/01/2023 0.82%
CLOVIS ONCOLOGY INC CV 01.2500 05/01/2025 0.82%
SUPERNUS PH P/P 144A CV 00.6250 04/01/2023 0.82%
TWITTER INC CV 01.0000 09/15/2021 0.82%
NEUROCRINE CV 02.2500 05/15/2024 0.81%
AMG CAPITAL TRUST II 05.1500 CV PFD 0.79%
DYCOM IND INC CV 00.7500 09/15/2021 0.79%
OASIS PETROLEUM INC CV 02.6250 09/15/2023 0.79%
WIX LTD P/P 144A 00.0000 07/01/2023 0.77%
CHEGG INC P/P 144A CV 00.2500 05/15/2023 0.75%
IRONWOOD PHAR CV 02.2500 06/15/2022 0.75%
STANLEY BLACK & DECKER INC 0.75%
VOCERA COMM P/P 144A CV 01.5000 05/15/2023 0.73%
CARBONITE INC CV 02.5000 04/01/2022 0.72%
WEATHERFORD BERMUDA CV 05.8750 07/01/2021 0.72%
BLACKSTONE MORTGAGE TR CV 04.7500 03/15/2023 0.71%
CHENIERE ENERGY INC CV 04.2500 03/15/2045 0.70%
ON SEMICONDUC CV 01.6250 10/15/2023 0.70%
SIEMENS FINANCIERINGSMAT REGS 01.6500 08/16/2019 0.69%
ALEXANDRIA REAL ESTATE E 07.0000 CUM CV PFD 0.68%
LIBERTY MEDIA CV 01.0000 01/30/2023 0.68%
NICE SYS INC CV 01.2500 01/15/2024 0.68%
INSULET CORP P/P 144A CV 01.3750 11/15/2024 0.67%
OSI SYS INC CV 01.2500 09/01/2022 0.67%
QTS REALTY TRUST INC 06.5000 CUM CV PFD 0.67%
INPHI CORP CV 00.7500 09/01/2021 0.66%
TERADYNE INC CV 01.2500 12/15/2023 0.65%
BELDEN INC 06.7500 CV PFD 0.64%
CITRIX SYSTEM CV 00.5000 04/15/2019 0.64%
PACIRA PHARMA CV 02.3750 04/01/2022 0.64%
CYPRESS SEMIC CV 04.5000 01/15/2022 0.63%
NUANCE COMM CV 01.2500 04/01/2025 0.62%
PATRICK INDS P/P 144A CV 01.0000 02/01/2023 0.62%
RED HAT INC CV 00.2500 10/01/2019 0.62%
WAYFAIR INC CV 00.3750 09/01/2022 0.62%
CEMEX SAB DE CV USD 03.7200 03/15/2020 0.61%
WESTERN DI P/P 144A CV 01.5000 02/01/2024 0.58%
KAMAN CORP CV 03.2500 05/01/2024 0.57%
SQUARE INC CV 00.3750 03/01/2022 0.57%
BANK OF AMERICA CORP 0.56%
II-VI INC CV 00.2500 09/01/2022 0.55%
LIGAND PHARMA P/P 144A CV 00.7500 05/15/2023 0.53%
GREENBRIER C CV 02.8750 02/01/2024 0.52%
INTEGRATED DE CV 00.8750 11/15/2022 0.50%
ON SEMICONDUC CV 01.0000 12/01/2020 0.50%
STARWOOD PROP TR CV 04.0000 01/15/2019 0.50%
VECTOR GROUP LTD CV 01.7500 04/15/2020 0.50%
AVID TECH INC CV 02.0000 06/15/2020 0.48%
NUTANIX INC P/P 144A CV 00.0000 01/15/2023 0.48%
J2 GLOBAL COMM CV 03.2500 06/15/2029 0.47%
TTM TECHNOLOGIES INC CV 01.7500 12/15/2020 0.46%
HERITAGE INS CV 05.8750 08/01/2037 0.43%
VISTRA ENERGY CORP 07.0000 CV PFD 0.43%
HORIZON GLOBAL CORP CV 02.7500 07/01/2022 0.40%
INSMED INC CV 01.7500 01/15/2025 0.40%
ISTAR INC 04.5000 CUM CV PFD 0.39%
IGI LABS INC CV 03.7500 12/15/2019 0.38%
SAREPTA THERA P/P 144A CV 01.5000 11/15/2024 0.35%
T-MOBILE US INC 0.28%
TALOS PRODUCTION LLC P/P 144A 11.0000 04/03/2022 0.26%
GCI LIBERTY I P/P 144A CV 01.7500 09/30/2046 0.17%
CHINA MEDICAL TECH INC USD 04.0000 08/15/2019 0.03%
CHINA MEDICAL TECH P/P 144A 06.2500 12/17/2018 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%
MACQUARIE INFRASTRUCTU CV 02.0000 10/01/2023 0.00%
POWERWAVE TECHNOLOGIES CV 03.8750 10/01/2027 0.00%

Prior top 10 holdings

Top 10 holdings as of 10/31/18
Bank of America
BD Medical
Microchip Technology
Nextera Energy
Jazz Investments I
Fortive Corp
Servicenow
Square
Booking Holdings
Realpage
Holdings represent 17.85% of portfolio
Top 10 holdings as of 09/30/18
BD Medical
Microchip Technology
Bank of America
Square
Nextera Energy
Fortive Corp
Servicenow
Realpage
Jazz Investments I
Hess
Holdings represent 18.51% of portfolio
Top 10 holdings as of 08/31/18
Microchip Technology
Bank of America
BD Medical
Micron Technology
Square
Nextera Energy
Fortive Corp
Servicenow
Jazz Investments I
Hess
Holdings represent 19.20% of portfolio
Top 10 holdings as of 07/31/18
Microchip Technology
Bank of America
Becton Dickinson and Co
Micron Technology
Jazz Investments I
Hess Corp
Square
Servicenow
Intel Corp
Booking Holdings
Holdings represent 18.85% of portfolio

Portfolio composition as of 10/31/18

Convertible bonds and notes 70.92%
Mandatories 13.45%
Cash and net other assets 7.61%
Convertible preferred stock 5.32%
Common stock 2.43%
Corporate bonds and notes 0.27%

Equity statistics as of 10/31/18

Median market cap $5.92B
Weighted average market cap $31.39B
Price to book 3.40
Price to earnings 22.17

Fixed income statistics as of 10/31/18

Average stated maturity 7.17 yrs.
Average effective duration 1.80 yrs.
Average yield to maturity 1.11%
Average coupon 2.34%
Average price $114.98

Maturity detail as of 10/31/18

0 - 1 yr. 17.64%
1 - 5 yrs. 51.45%
5 - 10 yrs. 18.17%
10 - 15 yrs. 0.76%
Over 15 yrs. 11.98%

Quality rating as of 10/31/18

A 3.80%
BBB 10.59%
BB 9.65%
B 8.20%
CCC and Below 1.04%
Not Rated 59.11%
Cash and net other assets 7.61%

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 also 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 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 10/31/18

Information technology 31.50%
Health care 18.02%
Cash and net other assets 7.61%
Communication services 7.02%
Financials 6.94%
Industrials 6.38%
Consumer discretionary 6.24%
Utilities 5.12%
Energy 4.82%
 
Other
6.35%
Real estate 4.19%
Materials 1.64%
Consumer staples 0.52%

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 10/31/18

United States 89.23%
Cash and net other assets 7.61%
Ireland 1.69%
Israel 0.77%
Mexico 0.64%
China 0.06%

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% 0.73% 0.82%
What you pay 1.07% 1.82% 1.82% 1.57% 1.32% 0.73% 0.82%

Sales charge

Investment Breakpoint Class A Class B Class C Class M Class R 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 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 BofAML 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 also 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 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.