Emerging Markets Equity Fund (Class A)  (PEMMX)

Pursuing growth opportunities in developing economies

Emerging Markets Equity Fund received an  Overall Morningstar Rating  of  

Daniel Graña talks with Bloomberg TV

Emerging markets fund manager discusses the dollar, China, tariffs, and technology

    Highlights

    Objective

    The fund seeks long-term capital appreciation.

    Strategy and process

    • Growth potential: Emerging markets offer the potential for continued growth due to attractive demographics, rising wealth, and increased investment in infrastructure in developing countries.
    • A disciplined process: By integrating multiple perspectives into portfolio construction, the fund manager is able to better evaluate individual companies within the context of changing local and global influences.
    • Rigorous research: The manager leverages Putnam's global research platform to identify opportunities across emerging and select frontier markets.

    Fund price

    Yesterday’s close 52-week high 52-week low
    Net asset value $11.46
    -1.04% | $-0.12
    $14.07
    01/26/18
    $11.11
    09/11/18
    Historical fund price

    Fund facts as of 05/31/18

    Total net assets
    $115.73M
    Turnover (fiscal year end)
    137%
    Dividend frequency
    Annually
    Number of holdings
    96
    Fiscal year-end
    August
    CUSIP / Fund code
    746764109 / 0059
    Inception date
    09/29/08
    Category
    Blend
    Open to new investors
    Ticker
    PEMMX

    Management team

    Portfolio Manager


    Manager commentary | Q2 2018

    Emerging markets in crosshairs of trade war

    Portfolio Manager Daniel Graña discusses the emerging markets whose economic models depend on growing global trade.



    Performance

    • Total return (%) as of 06/30/18

    • Annual performance as of 06/30/18

    Annualized Total return (%) as of 06/30/18

    Annualized performance 1 yr. 3 yrs. 5 yrs. Life (inception: 09/29/08 )
    Before sales charge 14.44% 7.55% 6.53% 4.77%
    After sales charge 7.86% 5.45% 5.28% 4.13%
    MSCI Emerging Markets Index (ND) 8.20% 5.60% 5.01% --

    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, and 4.00% and 3.25% for income funds (2.25% and 0.75% for Putnam Short Duration Bond Fund and 1.00% and 0.75% for Putnam Floating Rate Income Fund, Putnam Fixed Income Absolute Return 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 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, 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). 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. 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 08/31/18 -4.47 % -9.96 %
    YTD as of 09/24/18 -10.26 % -15.42 %

    Risk-adjusted performance as of 05/31/18

    Alpha (3 yrs.) 2.58
    Sharpe ratio (3 yrs.) 0.52
    Treynor ratio (3 yrs.) 8.54
    Information ratio (3 yrs.) 0.39

    Volatility as of 05/31/18

    Standard deviation (3 yrs.) 14.58%
    Beta 0.88
    R-squared 0.90

    Capture ratio as of 05/31/18

    Up-market (3 yrs.) 93.22
    Down-market (3 yrs.) 81.94

    Lipper rankings as of 05/31/18

    Time period Rank/Funds in category Percentile ranking
    1 yr. 23/828 3%
    3 yrs. 97/685 15%
    5 yrs. 78/494 16%
    10 yrs. --  
    Lipper category: Emerging Markets Funds

    Morningstar Ratings as of 05/31/18

    Time period Funds in category Morningstar Rating
    Overall 674
    3 yrs. 674
    5 yrs. 486
    Morningstar category: Diversified Emerging Mkts

    Distributions

    Record/Ex dividend date 12/21/17
    Payable date 12/26/17
    Income $0.008
    Extra income --
    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

    Portfolio composition as of 05/31/18

    Common stock 96.09%
    Cash and net other assets 3.17%
    Preferred stock 0.73%
    Convertible preferred stock 0.01%

    Equity statistics as of 05/31/18

    Median market cap $4.63B
    Weighted average market cap $112.42B
    Price to book 2.23
    Price to earnings 11.07

    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. 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) 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, changing market perceptions, changes in government intervention in the financial markets, and factors related to a specific issuer or industry. You can lose money by investing in the fund.

    Top industry sectors as of 05/31/18

    Information technology 26.85%
    Financials 23.49%
    Consumer discretionary 9.59%
    Industrials 9.40%
    Materials 8.38%
    Energy 6.11%
    Cash and net other assets 3.17%
    Real estate 3.10%
    Utilities 3.05%
     
    Other
    6.86%
    Consumer staples 2.91%
    Unclassified 2.20%
    Health care 0.95%
    Telecommunication services 0.80%

    The unclassified sector (where applicable) includes exchange traded funds and other securities not able to be classified by sector.

    Sectors will vary over time.

    Country allocation as of 05/31/18

    China 33.09%
    Taiwan 12.85%
    South Korea 11.56%
    India 8.39%
    South Africa 5.10%
    Russia 4.81%
    Brazil 3.52%
    Cash and net other assets 3.17%
    Mexico 2.88%
     
    Other
    14.63%
    Thailand 2.33%
    United States 2.20%
    Indonesia 1.41%
    Argentina 1.17%
    United Arab Emirates 0.97%
    Colombia 0.92%
    Hong Kong 0.88%
    Malaysia 0.78%
    Austria 0.77%
    Poland 0.69%
    Portugal 0.69%
    Australia 0.64%
    Greece 0.62%
    United Kingdom 0.43%
    Turkey 0.10%
    Luxembourg 0.03%

    Expenses

    Expense ratio

    Class A Class B Class C Class M Class R Class R6 Class Y
    Total expense ratio 2.06% 2.81% 2.81% 2.56% 2.31% 1.61% 1.81%
    What you pay† 1.63% 2.38% 2.38% 2.13% 1.88% 1.18% 1.38%

    † The fund's expense ratio is taken from the most recent prospectus and is subject to change. What you pay reflects Putnam Management's decision to contractually limit expenses through 12/30/18

    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% -- -- -- --

    MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. 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. 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) 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, changing market perceptions, changes in government intervention in the financial markets, and factors related to a specific issuer or industry. You can lose money by investing in the fund.