Always Aware. Always Active.

Sustainable Leaders Fund (Class A)  (PNOPX)

Investing in growing companies committed to sustainable practices

Highlights

Objective

The fund seeks long-term capital appreciation.

Strategy and process

  • Committed companies: The fund invests in growth companies with the goal of delivering positive financial and ESG performance.
  • Active strategy: The managers utilize bottom-up research to identify companies with attractive sustainability, fundamental, and valuation characteristics.
  • Veteran team: A dedicated sustainable investing team is backed by Putnam's equity research and quantitative/risk analysis groups.

Fund price

Yesterday’s close 52-week high 52-week low
Net asset value $89.40
0.31% | $0.28
$103.54
09/20/18
$69.38
12/24/18
Historical fund price

Fund facts as of 03/31/19

Total net assets
$4,513.45M
Turnover (fiscal year end)
21%
Dividend frequency
Annually
Number of holdings
77
Fiscal year-end
June
CUSIP / Fund code
746916105 / 0031
Inception date
08/31/90
Category
Growth
Open to new investors
Ticker
PNOPX

Management team

Head of Sustainable Investing
Chief Investment Officer, Equities
Portfolio Manager, Analyst


Manager commentary | Q4 2018

Think long term amid volatility

Katherine Collins, Head of Sustainable Investing, explains why a long-term time horizon can be an advantage.


Literature


ESG investing: Identifying leaders in data management
Data security and privacy practices can significantly affect business models, and leading companies may offer strategic and financial advantages.
ESG Outlook for 2019
We see increasing evidence that systems thinking is becoming more prevalent and influential throughout corporations and the investment community.
How company diversity can help performance
The potential to improve work performance is perhaps the most intriguing and least understood argument for diversity — and worth examining in more depth.

Performance

  • Total return (%) as of 03/31/19

  • Annual performance as of 03/31/19

Annualized Total return (%) as of 03/31/19

Annualized performance 1 yr. 3 yrs. 5 yrs. 10 yrs.
Before sales charge 12.49% 18.02% 12.27% 16.34%
After sales charge 6.02% 15.71% 10.95% 15.66%
Russell 3000 Growth Index 12.06%16.40%13.10%17.44%

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 03/31/19 2.53% -3.37%
YTD as of 04/18/19 20.03% 13.13%

Risk-adjusted performance as of 03/31/19

Alpha (3 yrs.) 2.33
Sharpe ratio (3 yrs.) 1.41
Treynor ratio (3 yrs.) 17.71
Information ratio (3 yrs.) 0.55

Volatility as of 03/31/19

Standard deviation (3 yrs.) 11.94%
Beta 0.95
R-squared 0.94

Capture ratio as of 03/31/19

Up-market (3 yrs.) 102.17
Down-market (3 yrs.) 90.23

Lipper rankings as of 03/31/19

Time period Rank/Funds in category Percentile ranking
1 yr. 155/530 30%
3 yrs. 94/478 20%
5 yrs. 103/416 25%
10 yrs. 127/306 42%
Lipper category: Multi-Cap Growth Funds

Morningstar Ratings as of 03/31/19

Time period Funds in category Morningstar Rating
Overall 1256
3 yrs. 1256
5 yrs. 1114
10 yrs. 805
Morningstar category: Large Growth

Distributions

Record/Ex dividend date 12/06/18
Payable date 12/10/18
Income $0.041
Extra income --
Short-term cap. gain $1.611
Long-term cap. gain $13.421

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 03/31/19

Microsoft Corp 6.23%
Visa 4.37%
Alphabet 4.22%
Amazon.Com 3.93%
Adobe 3.32%
Danaher Corp 3.28%
Unilever Nv 3.26%
Apple 2.81%
Novozymes A/S - B Shares 2.67%
BD Medical 2.63%
Top 10 holdings, percent of portfolio 36.72%

Full portfolio holdings as of 12/31/18

MICROSOFT CORP 6.21%
VISA INC-CLASS A SHARES 4.28%
AMAZON.COM INC 3.84%
UNILEVER NV-CVA 3.54%
ALPHABET INC-CL C 3.33%
ADOBE INC 3.27%
BECTON DICKINSON AND CO 3.25%
NOVOZYMES A/S-B SHARES 3.01%
DANAHER CORP 2.97%
APPLE INC 2.71%
SALESFORCE.COM INC 2.63%
BLACKROCK INC 2.51%
HOME DEPOT INC 2.27%
HILTON WORLDWIDE HOLDINGS IN 1.78%
COOPER COS INC/THE 1.77%
OKTA INC 1.77%
FORTIVE CORP 1.72%
LINDE PLC 1.66%
CHIPOTLE MEXICAN GRILL INC 1.56%
WALMART INC 1.54%
ACCENTURE PLC-CL A 1.53%
SERVICENOW INC 1.50%
NXP SEMICONDUCTORS NV 1.44%
BANK OF AMERICA CORP 1.37%
HEINEKEN NV 1.33%
PRUDENTIAL PLC 1.32%
ROPER TECHNOLOGIES INC 1.31%
BOSTON SCIENTIFIC CORP 1.24%
LOWES COMPANIES INC 1.23%
MCCORMICK & CO-NON VTG SHRS 1.23%
BALL CORP 1.22%
PENUMBRA INC 1.21%
CHR HANSEN HOLDING A/S 1.20%
TALEND SA - ADR 1.15%
STANLEY BLACK & DECKER INC 1.12%
VERTEX PHARMACEUTICALS INC 1.10%
ADIDAS AG 1.09%
DXC TECHNOLOGY CO 1.09%
MSCI INC 1.08%
FIRST REPUBLIC BANK/CA 1.05%
VAIL RESORTS INC 1.03%
HONEYWELL INTERNATIONAL INC 1.02%
NEXTERA ENERGY INC 1.01%
WEBSTER FINANCIAL CORP 1.01%
ALPHABET INC-CL A 0.98%
ECOLAB INC 0.97%
SCHWAB (CHARLES) CORP 0.94%
HASBRO INC 0.93%
KELLOGG CO 0.93%
ASML HOLDING NV-NY REG SHS 0.86%
ON SEMICONDUCTOR CORP 0.86%
DOCUSIGN INC 0.85%
ICU MEDICAL INC 0.82%
AES CORP 0.75%
TJX COMPANIES INC 0.71%
REALPAGE INC 0.66%
SUMMIT MATERIALS INC -CL A 0.66%
CHALLENGER LTD 0.63%
JAZZ PHARMACEUTICALS PLC 0.62%
METTLER-TOLEDO INTERNATIONAL 0.56%
UNION PACIFIC CORP 0.50%
BIO-RAD LABORATORIES-A 0.44%
MEDICINES COMPANY 0.28%
CLOVIS ONCOLOGY INC 0.24%
OPORTUN FIN CORP P/P SERIES H PFD 0.11%
BLUEBIRD BIO INC 0.10%
OPORTUN FIN CORP P/P 0.04%
OPORTUN FIN G-1 PFD CV P/P 0.04%
OPORTUN FIN F-1 PFD CV P/P 0.03%
GLOBAL FASHION GRP P/P 0.02%
OPORTUN FIN D-1 PFD CV P/P 0.01%
OPORTUN FIN F PFD CV P/P 0.01%
AUD/USD 01/16/2019 GSFX 0.00%
AUD/USD 01/16/2019 SSBT 0.00%
HC BRILLANT SERVICES GMBH P/P 0.00%
NEW BIGFOOT OTHER ASSETS GMBH P/P 0.00%
NEW MIDDLE EAST OTHER ASSETS GMBH P/P 0.00%
OPORTUN FIN A-1 PFD CV P/P 0.00%
OPORTUN FIN B-1 PFD CV P/P 0.00%
OPORTUN FIN C-1 PFD CV P/P 0.00%
OPORTUN FIN E-1 PFD CV P/P 0.00%
EUR/USD 03/20/2019 SSBT -0.01%
EUR/USD 03/20/2019 UBS -0.01%
GBP/USD 03/20/2019 BANKAM -0.01%
EUR/USD 03/20/2019 JPMCB -0.02%

Prior top 10 holdings

Top 10 holdings as of 03/31/19
Microsoft Corp
Visa
Alphabet
Amazon.Com
Adobe
Danaher Corp
Unilever Nv
Apple
Novozymes A/S - B Shares
BD Medical
Holdings represent 36.72% of portfolio
Top 10 holdings as of 02/28/19
Microsoft Corp
Visa
Alphabet
Amazon.Com
Adobe
Danaher Corp
Becton Dickinson And
Unilever Nv
Salesforce.Com
Novozymes A/S - B Shares
Holdings represent 36.35% of portfolio
Top 10 holdings as of 01/31/19
Microsoft Corp
Alphabet
Amazon.Com
Visa
Becton Dickinson And
Adobe
Unilever Nv
Danaher Corp
Salesforce.Com
Apple
Holdings represent 36.44% of portfolio
Top 10 holdings as of 12/31/18
Microsoft Corp
Alphabet
Visa
Amazon.Com
Unilever Nv
Adobe
Becton Dickinson And
Novozymes A/S - B Shares
Danaher Corp
Apple
Holdings represent 37.40% of portfolio

Portfolio composition as of 03/31/19

Common stock 96.17%
Cash and net other assets 3.65%
Convertible preferred stock 0.18%

Equity statistics as of 03/31/19

Median market cap $19.87B
Weighted average market cap $222.83B
Price to book 5.08
Price to earnings 23.09

Fund characteristics will vary over time.

Due to rounding, percentages may not equal 100%.

Consider these risks before investing: 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. Growth stocks may be more susceptible to earnings disappointments, and the market may not favor growth-style investing. Investments in small and/or midsize companies increase the risk of greater price fluctuations. International investing involves currency, economic, and political risks. Emerging-market securities have illiquidity and volatility risks. The fund's investment strategy of investing in companies that exhibit a commitment to sustainable business practices may result in the fund investing in securities or industry sectors that underperform the market as a whole or underperform other funds that do not invest with a sustainable focus. From time to time, the fund may invest a significant portion of its assets in companies in one or more related industries or sectors, which would make the fund more vulnerable to adverse developments affecting those industries or sectors. In evaluating an investment opportunity, we may make investment decisions based on information and data that is incomplete or inaccurate. Due to changes in the products or services of the companies in which the fund invests, the fund may temporarily hold securities that are inconsistent with its sustainable investment criteria. You can lose money by investing in the fund.

Top industry sectors as of 03/31/19

Information technology 33.51%
Consumer discretionary 15.03%
Health care 12.54%
Materials 7.75%
Financials 7.57%
Consumer staples 7.19%
Industrials 6.75%
Communication services 4.22%
Cash and net other assets 3.65%
 
Other
1.79%
Utilities 1.79%

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 R6 Class Y
Total expense ratio 0.99% 1.74% 1.74% 1.49% 1.24% 0.61% 0.74%
What you pay 0.99% 1.74% 1.74% 1.49% 1.24% 0.61% 0.74%

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 Russell 3000 Growth Index is an unmanaged index of those companies in the broad-market Russell 3000 Index chosen for their growth orientation. You cannot invest directly in an index.

Consider these risks before investing: 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. Growth stocks may be more susceptible to earnings disappointments, and the market may not favor growth-style investing. Investments in small and/or midsize companies increase the risk of greater price fluctuations. International investing involves currency, economic, and political risks. Emerging-market securities have illiquidity and volatility risks. The fund's investment strategy of investing in companies that exhibit a commitment to sustainable business practices may result in the fund investing in securities or industry sectors that underperform the market as a whole or underperform other funds that do not invest with a sustainable focus. From time to time, the fund may invest a significant portion of its assets in companies in one or more related industries or sectors, which would make the fund more vulnerable to adverse developments affecting those industries or sectors. In evaluating an investment opportunity, we may make investment decisions based on information and data that is incomplete or inaccurate. Due to changes in the products or services of the companies in which the fund invests, the fund may temporarily hold securities that are inconsistent with its sustainable investment criteria. You can lose money by investing in the fund.