Low Volatility Equity Fund (PLVEX)
Pursuing returns comparable to the U.S. stock market, but with lower volatility over a market cycle
Robert J. Schoen
(investing since 1990)
|Yesterday's close||52-week high||52-week low|
|Net asset value||
0.18% ( $0.02 )
Strategy and process
- Low-beta stocks: Invests in stocks less volatile than the market while also pursuing an options strategy to further reduce volatility and enhance risk-adjusted returns.
- Sector neutral: Seeks to capitalize on a diverse range of low-beta stocks across all sectors rather than overweighting low-beta sectors.
- Active management: The veteran fund managers have years of experience managing low-beta equity portfolios constructed to pursue the best risk-adjusted performance.
The fund targets "beta anomaly" in equity markets.
The "beta anomaly" refers to the observation that stocks with lower volatility relative to a benchmark index have had better risk-adjusted returns (Sharpe ratios) than stocks with higher volatility. This creates an opportunity to pursue better risk-adjusted returns with a portfolio of stocks that have been historically less volatile than the market, rather than by investing in higher-risk stocks. The fund targets this opportunity in pursuing returns comparable to the U.S. stock market with lower volatility over time.
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, T, 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 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 T 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.
The S&P 500 Index is an unmanaged index of common stock performance. Indexes assume reinvestment of distributions and do not account for fees. Securities in the fund do not match those in the index and performance of the fund will differ. It is not possible to invest directly in an index.
Consider these risks before investing: Risks associated with derivatives include increased investment exposure (which may be considered leverage) and, 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 several reasons, including general financial market conditions and factors related to a specific issuer or industry. There may be times when stocks in the fund?s portfolio exhibit higher volatility than we expect, are not correlated with market movements as we expect, or underperform the markets. By selling covered call options, the fund limits its opportunity to profit from an increase in the price of the underlying portfolio securities, but continues to bear the risk of a decline in the value of these securities. The fund also risks losing all or part of the cash paid for purchasing put options. You can lose money by investing in the fund.
You can lose money by investing in a fund. Any given fund may not achieve its goal, and is not intended as a complete investment program. All funds have risk. The value and/or returns of a portfolio will fluctuate with market conditions. You may have more or less than the original amount invested when you redeem your shares.