Active Sustainability

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 $97.62
0.18% | $0.18 		$98.52
11/27/19 		$78.61
01/22/19
(Optional)

Fund facts as of 12/31/19

Total net assets
$4,941.17M
Turnover (fiscal year end)
30%
Dividend frequency
Annually
Number of holdings
69
Fiscal year-end
June
CUSIP / Fund code
746916105 / 0031
Inception date
08/31/90
Category
Growth
Open to new investors
Ticker
PNOPX

Management team

Katherine Collins, CFA, MTS

Head of Sustainable Investing

Stephanie Dobson

Portfolio Manager

Manager commentary | Q4 2019

The "S" in ESG can differentiate companies

Putnam’s sustainable investing team describes the social factors that help them identify leading companies.

Literature

Linking impact and performance
Often, the same elements that create environmental and social benefits are driving positive financial performance.
Engaging with allies to advance sustainable investing
We collaborate with institutions to examine and understand the financial impacts of sustainability.
Talking sustainability with CEOs
We have ongoing dialogue with the management teams of companies in which we invest, across a wide range of sustainability-related topics.

Performance

  • Total return (%) as of 12/31/19

  • Annual performance as of 12/31/19

Annualized Total return (%) as of 12/31/19

Annualized performance 1 yr. 3 yrs. 5 yrs. 10 yrs.
Before sales charge 35.84% 20.22% 13.25% 14.30%
After sales charge 28.03% 17.87% 11.91% 13.62%
S&P 500 Index 31.49%15.27%11.70%13.56%
Russell 3000 Growth - S&P 500 Linked Benchmark 35.64%19.83%14.19%15.04%

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 4.00% and 3.25% for income funds (2.25% for class A of 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, Putnam Short Duration Bond Fund, Putnam Fixed Income Absolute Return 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, 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). Performance for class A, C, and Y shares of Putnam Mortgage Opportunities Fund before their inception is derived from the historical performance of class I shares, which have been adjusted for the applicable sales charge (or CDSC) and the higher operating expenses for such 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 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 12/31/19 3.05% -2.87%
YTD as of 01/22/20 3.64% -2.32%

Lipper rankings as of 12/31/19

Time period Rank/Funds in category Percentile ranking
1 yr. 125/549 23%
3 yrs. 119/493 25%
5 yrs. 100/434 23%
10 yrs. 85/305 28%
Lipper category: Multi-Cap Growth Funds

Morningstar Ratings™ as of 12/31/19

Time period Funds in category Morningstar Rating™
Overall 1218
3 yrs. 1218
5 yrs. 1086
10 yrs. 811
Morningstar category: Large Growth

Distributions

Record/Ex dividend date 12/05/19
Payable date 12/09/19
Income $0.311
Extra income --
Short-term cap. gain $0.52
Long-term cap. gain $5.892

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

Microsoft Corp 7.18%
Apple 5.00%
Visa 3.38%
Amazon.Com 3.34%
Alphabet 2.86%
Bank Of America Corp 2.79%
Danaher Corp 2.57%
Blackrock 2.53%
Adobe 2.33%
Fidelity National Information Services 2.26%
Top 10 holdings, percent of portfolio 34.24%

Portfolio composition as of 12/31/19

Common stock 97.25%
Cash and net other assets 2.75%

Equity statistics as of 12/31/19

Median market cap $54.44B
Weighted average market cap $299.82B
Price to book 4.56
Price to earnings 22.06

Fund characteristics will vary over time.

Due to rounding, percentages may not equal 100%.

Consider these risks before investing: The value of investments in the fund’s portfolio may fall or fail to rise over extended periods of time for a variety of reasons, including general economic, political or financial market conditions, investor sentiment and market perceptions, government actions, geopolitical events or changes, and factors related to a specific issuer, geography, 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 12/31/19

Information technology 32.64%
Consumer discretionary 16.77%
Health care 10.61%
Financials 9.86%
Consumer staples 7.93%
Industrials 6.91%
Materials 5.86%
Utilities 3.81%
Communication services 2.86%
 
Other		 2.75%
Cash and net other assets 2.75%

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 R Class R6 Class Y
Total expense ratio 1.04% 1.79% 1.79% 1.29% 0.67% 0.79%
What you pay 1.04% 1.79% 1.79% 1.29% 0.67% 0.79%

Sales charge

Investment Breakpoint Class A Class B Class C Class R Class R6 Class Y
$0-$49,999 5.75% 0.00% 0.00% -- -- --
$50,000-$99,999 4.50% 0.00% 0.00% -- -- --
$100,000-$249,999 3.50% -- 0.00% -- -- --
$250,000-$499,999 2.50% -- 0.00% -- -- --
$500,000-$999,999 2.00% -- 0.00% -- -- --
$1M-$4M 0.00% -- -- -- -- --
$4M-$50M 0.00% -- -- -- -- --
$50M+ 0.00% -- -- -- -- --

CDSC

  Class A (sales for $1,000,000+) Class B Class C Class 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 S&P 500 Index is an unmanaged index of common stock performance. The Russell 3000 Growth Index is an unmanaged index of those companies in the broad-market Russell 3000 Index chosen for their growth orientation. The Russell 3000 Growth - S&P 500 Linked Benchmark represents performance of the Russell 3000 Growth Index through July 31, 2019 and performance of the S&P 500 Index thereafter. You cannot invest directly in an index.

Consider these risks before investing: The value of investments in the fund’s portfolio may fall or fail to rise over extended periods of time for a variety of reasons, including general economic, political or financial market conditions, investor sentiment and market perceptions, government actions, geopolitical events or changes, and factors related to a specific issuer, geography, 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.