Europe Equity Fund  (PEUGX)

Pursuing the growth potential of established companies in European markets

Objective

The fund seeks capital appreciation.

Fund price

Yesterday’s close 52-week high 52-week low
Net asset value $27.49
-0.47% | $-0.13
$27.62
10/18/17
$22.24
11/18/16
Historical fund price

Fund facts as of 09/30/17

Total net assets
$227.61M
Turnover (fiscal year end)
47%
Dividend frequency
Annually
Number of holdings
63
Fiscal year end
June
CUSIP / Fund code
746747104 / 0032
Inception Date
09/07/90
Category
Blend
Open to new investors
Ticker
PEUGX

Management team


Co-Head of Equities

Strategy and process

  • European companies: The fund invests in established large and midsize companies across Europe that benefit from the region's economy and from operations in global markets.
  • A flexible strategy: Pursuing Putnam's blend strategy, the fund can own growth- or value-style stocks to participate when either style leads European markets.
  • A disciplined process: The fund manager combines fundamental research and quantitative tools to pursue multiple sources of return, supported by strong risk controls in portfolio construction.

Literature


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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 18.59% 4.39% 9.09% 1.51%
After sales charge 11.77% 2.35% 7.81% 0.91%
MSCI Europe Index (ND) 22.30% 4.36% 8.36% 1.08%

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 3.16 % -2.77 %
YTD as of 10/19/17 20.78 % 13.84 %

Risk-adjusted performance as of 09/30/17

Alpha (3 yrs.) 0.34
Sharpe ratio (3 yrs.) 0.34
Treynor ratio (3 yrs.) 4.46
Information ratio (3 yrs.) 0.01

Volatility as of 09/30/17

Standard deviation (3 yrs.) 12.26%
Beta 0.93
R-squared 0.94

Capture ratio as of 09/30/17

Up-market (3 yrs.) 93.24
Down-market (3 yrs.) 93.59

Lipper rankings as of 09/30/17

European Region Funds Percentile ranking Rank/Funds in category
1 yr. 70% 110/157
3 yrs. 65% 81/124
5 yrs. 38% 37/98
10 yrs. 41% 29/70

Morningstar ratings as of 09/30/17

Europe Stock Rating Funds in category
Overall (98)
3 yrs. (98)
5 yrs. (78)
10 yrs. (24)

Distributions

Record/Ex dividend date 12/20/16
Payable date 12/27/16
Income $0.625
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

Total 3.32%
Roche Holding Ag 3.24%
Bayer Ag 3.18%
Sanofi 3.18%
Siemens Ag 3.00%
Ing Groep Nv 2.78%
Unilever Nv 2.77%
Prudential 2.67%
Airbus 2.24%
Danske Bank A/S 2.20%
Top 10 holdings, percent of portfolio 28.58%

Full portfolio holdings as of 06/30/17

ROYAL DUTCH SHELL PLC-A SHS 4.39%
ROCHE HOLDING AG-GENUSSCHEIN 3.36%
SANOFI 3.18%
BAYER AG-REG 3.14%
SIEMENS AG 3.04%
ING GROEP NV-CVA 2.70%
PRUDENTIAL PLC 2.66%
UNILEVER NV-CVA 2.46%
DANSKE BANK A/S 2.20%
SHIRE PLC 2.17%
HENKEL AG & CO KGAA VORZUG 2.10%
AIRBUS SE 2.01%
ASTRAZENECA PLC 1.99%
SOCIETE GENERALE SA 1.99%
RIO TINTO PLC 1.85%
VALEO SA 1.83%
NOKIA OYJ 1.79%
BASF SE 1.78%
VEOLIA ENVIRONNEMENT 1.76%
ASSOCIATED BRITISH FOODS PLC 1.75%
KONINKLIJKE AHOLD DELHAIZE N 1.75%
COMPASS GROUP PLC 1.70%
RHEINMETALL AG 1.69%
HEINEKEN NV 1.63%
EVONIK INDUSTRIES AG 1.61%
ORKLA ASA 1.58%
CRH PLC 1.57%
TELECOM ITALIA-RSP 1.55%
IMPERIAL BRANDS PLC 1.49%
RWE AG 1.43%
ALTICE NV - A 1.42%
ENI SPA 1.40%
BARCLAYS PLC 1.39%
ADMIRAL GROUP PLC 1.37%
AENA SA 1.34%
COM HEM HOLDING AB 1.33%
BERKELEY GROUP HOLDINGS/THE 1.30%
ADIDAS AG 1.27%
KKR & CO LP 1.24%
SECURITAS AB-B SHS 1.23%
PARTNERS GROUP HOLDING AG 1.21%
NATIXIS 1.20%
EURAZEO SA 1.19%
KERRY GROUP PLC-A 1.19%
DIXONS CARPHONE PLC 1.18%
ST JAMES'S PLACE PLC 1.18%
RPC GROUP PLC 1.16%
WOLSELEY PLC 1.16%
JOHNSON CONTROLS INTERNATION 1.12%
HIBERNIA REIT PLC 1.07%
NORSK HYDRO ASA 1.06%
AKZO NOBEL 1.03%
GRIFOLS SA-ADR 0.98%
AMAZON.COM INC 0.97%
BANK OF IRELAND 0.96%
KION GROUP AG 0.93%
ALPHABET INC-CL C 0.92%
VIRGIN MONEY HOLDINGS UK 0.82%
FOXTONS GROUP PLC 0.70%
THE EURO EUR CALL ACCOUNT 0.57%
DELIVERY HERO AG 0.53%
CHF/USD 09/20/2017 JPMCB 0.08%
POUND STERLING CALL ACCOUNT 0.02%
CHF/USD 09/20/2017 BCAP-FX 0.00%
CHF/USD 09/20/2017 SSBT 0.00%
DKK/USD 09/20/2017 CITI 0.00%
EUR/USD 09/20/2017 GSFX 0.00%
EUR/USD 09/20/2017 HSBCB 0.00%
GBP/USD 09/20/2017 CITI 0.00%
GBP/USD 09/20/2017 SSBT 0.00%
NOK/USD 09/20/2017 JPMCB 0.00%
NOK/USD 09/20/2017 SSBT 0.00%
SEK/USD 09/20/2017 JPMCB 0.00%
SFR GROUP SA 0.00%
EUR/USD 09/20/2017 CITI -0.03%
GBP/USD 09/20/2017 JPMCB -0.03%

Prior top 10 holdings

Top 10 holdings as of 09/30/17
Total
Roche Holding Ag
Bayer Ag
Sanofi
Siemens Ag
Ing Groep Nv
Unilever Nv
Prudential
Airbus
Danske Bank A/S
Holdings represent 28.58% of portfolio
Top 10 holdings as of 08/31/17
Royal Dutch Shell
Roche Holding Ag
Sanofi
Bayer Ag
Siemens Ag
Unilever Nv
Ing Groep Nv
Prudential
Danske Bank A/S
Rio Tinto
Holdings represent 29.47% of portfolio
Top 10 holdings as of 07/31/17
Royal Dutch Shell
Roche Holding Ag
Sanofi
Bayer Ag
Siemens Ag
Ing Groep Nv
Prudential
Unilever Nv
Danske Bank A/S
Shire
Holdings represent 29.26% of portfolio
Top 10 holdings as of 06/30/17
Royal Dutch Shell
Roche Holding Ag
Sanofi
Bayer Ag
Siemens Ag
Ing Groep Nv
Prudential
Unilever Nv
Danske Bank A/S
Shire
Holdings represent 29.28% of portfolio

Portfolio composition as of 09/30/17

Common stock 98.85%
Cash and net other assets 1.15%

Equity statistics as of 09/30/17

Median market cap $27.04B
Weighted average market cap $68.38B
Price to book 1.96
Price to earnings 14.94

Fund characteristics will vary over time.

Due to rounding, percentages may not equal 100%.

Consider these risks before investing: International investing involves currency, economic, and political risks. Emerging-market securities carry illiquidity and volatility risks. Investments in small and/or midsize companies increase the risk of greater price fluctuations. Investments in a single region may be affected by common economic forces and other factors. In addition, events in any one country within the region may impact the other countries or the region as a whole. Growth stocks may be more susceptible to earnings disappointments, and value stocks may fail to rebound. Risks associated with derivatives include increased investment exposure, which may be considered leverage, or, in the case of over-the-counter instruments, the potential inability to terminate or sell derivatives positions and the potential failure of the other party to the instrument to meet its obligations. Stock prices may fall or fail to rise over time for a variety of reasons, including general financial market conditions and factors related to a specific issuer or industry. You can lose money by investing in the fund.

Top Industry Sectors as of 09/30/17

Financials 19.54%
Health care 15.10%
Consumer staples 12.27%
Industrials 11.94%
Materials 11.16%
Consumer discretionary 9.87%
Energy 5.98%
Information technology 5.66%
Utilities 3.44%
 
Other
5.04%
Telecommunication services 2.69%
Real estate 1.20%
Cash and net other assets 1.15%

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.

Country Allocation as of 09/30/17

United Kingdom 23.93%
France 19.07%
Germany 18.56%
Netherlands 11.04%
Ireland 4.86%
Switzerland 4.71%
United States 3.93%
Italy 2.30%
Denmark 2.20%
 
Other
9.40%
Sweden 2.19%
Spain 2.17%
Finland 1.68%
Norway 1.46%
Cash and net other assets 1.15%
Turkey 0.75%

Expenses

Expense ratio

Class A Class B Class C Class M Class R Class Y
Total expense ratio 1.32% 2.07% 2.07% 1.82% 1.57% 1.07%
What you pay 1.32% 2.07% 2.07% 1.82% 1.57% 1.07%

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% -- -- --

MSCI Europe Index is an unmanaged index of Western European equity securities. You cannot invest directly in an index.

Consider these risks before investing: International investing involves currency, economic, and political risks. Emerging-market securities carry illiquidity and volatility risks. Investments in small and/or midsize companies increase the risk of greater price fluctuations. Investments in a single region may be affected by common economic forces and other factors. In addition, events in any one country within the region may impact the other countries or the region as a whole. Growth stocks may be more susceptible to earnings disappointments, and value stocks may fail to rebound. Risks associated with derivatives include increased investment exposure, which may be considered leverage, or, in the case of over-the-counter instruments, the potential inability to terminate or sell derivatives positions and the potential failure of the other party to the instrument to meet its obligations. Stock prices may fall or fail to rise over time for a variety of reasons, including general financial market conditions and factors related to a specific issuer or industry. You can lose money by investing in the fund.