Always Inspired. Always Active.
Equity Income Fund (Class A) (PEYAX)
A multidimensional approach that defines value on a daily basis
Portfolio Manager Darren A. Jaroch, CFA
“I’ve always been patient and disciplined. And I think those traits have served me well as an investor.”
Highlights
Objective
The fund seeks capital growth and current income.
Strategy and process
- A large-value focus: The fund focuses on large companies whose stocks are priced below their long-term potential, and where there may be a catalyst for positive change.
- Dividend growth: The fund places a distinct emphasis on companies that can grow their dividends and are able and willing to return cash to shareholders.
- A disciplined process: The portfolio managers invest using fundamental research and quantitative tools supported by strong risk controls in portfolio construction.
Fund price |
Yesterday’s close | 52-week high | 52-week low |
|---|---|---|---|
| Net asset value |
$22.41
-1.28% | $-0.29 |
$26.35
09/21/18 |
$20.84
12/26/18 |
Fund facts as of 12/31/18
$11,086.91M
16%
Quarterly
106
November
746745108 / 0010
06/15/77
Value
PEYAX
Management team
Manager commentary | Q3 2018
Will the pendulum swing toward value?
Portfolio Manager Darren Jaroch explains how defining value can influence the performance outlook.
Literature
Fund documents |
| Prospectuses/SAI |
| Fact Sheet (A share) (PDF) |
| Fact Sheet (R6 share) (PDF) |
| Fact Sheet (Y share) (PDF) |
| Brochure (PDF) |
| Annual Fund Report (PDF) |
| Semiannual Fund Report (PDF) |
| Quarterly commentary (PDF) |
| Equity Outlook (PDF) |
October stock market volatility may signal a shift
Recent stock market volatility reflects a process of pricing in the fact that the global growth outlook has diverged.Value opportunities gain traction in turmoil
Beneath dire headlines about plunging markets, we are seeing value opportunities assert themselves.The dollar could be a drag on dividends
The stronger U.S. dollar can challenge corporate earnings and the ability of companies to pay dividends.Performance
Consistency of positive performance over five years
Performance shown above does not reflect the effects of any sales charges. Click on the dots to see specific returns in each five-year period as of the date revealed. Note that returns of 0.00% are counted as positive periods. For complete fund performance, please see below.
21.64%
Best 5-year annualized return
(for period ending 06/30/99)
-2.36%
Worst 5-year annualized return
(for period ending 03/31/09)
10.44%
Average 5-year annualized return
Total return (%) as of 12/31/18
Annual performance as of 12/31/18
Annualized Total return (%) as of 12/31/18
| Annualized performance | 1 yr. | 3 yrs. | 5 yrs. | 10 yrs. |
|---|---|---|---|---|
| Before sales charge | -8.34% | 7.30% | 6.11% | 11.85% |
| After sales charge | -13.61% | 5.20% | 4.86% | 11.19% |
| Russell 1000 Value Index | -8.27% | 6.95% | 5.95% | 11.18% |
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 12/31/18 | -8.98% | -14.21% | |
| YTD as of 01/22/19 | 5.91% | -0.18% | |
Yield
| Distribution rate before sales charge as of 01/22/19 |
1.41% |
|---|---|
| Distribution rate after sales charge as of 01/22/19 |
1.33% |
| 30-day SEC yield as of 12/31/18 (after sales charge) |
1.57% |
Risk-adjusted performance as of 12/31/18
| Alpha (3 yrs.) | 0.61 |
|---|---|
| Sharpe ratio (3 yrs.) | 0.60 |
| Treynor ratio (3 yrs.) | 6.65 |
| Information ratio (3 yrs.) | 0.14 |
Volatility as of 12/31/18
| Standard deviation (3 yrs.) | 10.65% |
|---|---|
| Beta | 0.96 |
| R-squared | 0.94 |
Capture ratio as of 12/31/18
| Up-market (3 yrs.) | 98.62 |
|---|---|
| Down-market (3 yrs.) | 93.87 |
Lipper rankings as of 12/31/18
| Time period | Rank/Funds in category | Percentile ranking |
|---|---|---|
| 1 yr. | 351/540 | 65% |
| 3 yrs. | 216/467 | 47% |
| 5 yrs. | 164/403 | 41% |
| 10 yrs. | 30/247 | 13% |
Morningstar Ratings™ as of 12/31/18
| Time period | Funds in category | Morningstar Rating™ |
|---|---|---|
| Overall | 1100 | |
| 3 yrs. | 1100 | |
| 5 yrs. | 937 | |
| 10 yrs. | 686 |
Distributions
| Record/Ex dividend date | 12/26/18 |
|---|---|
| Payable date | 12/28/18 |
| Income | $0.079 |
| Extra income | $0.109 |
| Short-term cap. gain | $0.097 |
| Long-term cap. gain | $0.82 |
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 12/31/18
| JPMorgan Chase | 3.96% |
|---|---|
| Microsoft Corp | 3.71% |
| Bank Of America Corp | 3.14% |
| Citigroup | 2.50% |
| Walmart | 2.44% |
| Johnson Johnson | 2.18% |
| Apple | 1.89% |
| Northrop Grumman Corp | 1.82% |
| Becton Dickinson And | 1.81% |
| ConocoPhillips | 1.77% |
| Top 10 holdings, percent of portfolio | 25.22% |
Portfolio composition as of 12/31/18
| Common stock | 95.74% |
|---|---|
| Cash and net other assets | 3.72% |
| Convertible preferred stock | 0.54% |
Equity statistics as of 12/31/18
| Median market cap | $35.71B |
|---|---|
| Weighted average market cap | $146.25B |
| Price to book | 1.95 |
| Price to earnings | 11.93 |
Fund characteristics will vary over time.
Due to rounding, percentages may not equal 100%.
Consider these risks before investing: Value stocks may fail to rebound, and the market may not favor value-style investing. Income provided by the fund may be reduced by changes in the dividend policies of, and the capital resources available at, the companies in which the fund invests. 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. You can lose money by investing in the fund.
Top industry sectors as of 12/31/18
| Financials | 20.56% |
|---|---|
| Health care | 15.04% |
| Information technology | 12.16% |
| Energy | 11.01% |
| Consumer staples | 9.04% |
| Industrials | 7.83% |
| Consumer discretionary | 4.70% |
| Utilities | 4.54% |
| Communication services | 4.23% |
| Other | 10.89% |
0
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 R5 | Class R6 | Class Y |
|---|---|---|---|---|---|---|---|---|
| Total expense ratio | 0.91% | 1.66% | 1.66% | 1.41% | 1.16% | 0.65% | 0.55% | 0.66% |
| What you pay | 0.91% | 1.66% | 1.66% | 1.41% | 1.16% | 0.65% | 0.55% | 0.66% |
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. | 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 Russell 1000 Value Index is an unmanaged index of those companies in the large-cap Russell 1000 Index chosen for their value orientation. You cannot invest directly in an index.
Consider these risks before investing: Value stocks may fail to rebound, and the market may not favor value-style investing. Income provided by the fund may be reduced by changes in the dividend policies of, and the capital resources available at, the companies in which the fund invests. 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. You can lose money by investing in the fund.