Equity Spectrum

The strategy utilizes a flexible mandate to target growth opportunities in leveraged companies throughout the full market cycle.*

Product highlights

Inception date

April 30, 2009

Benchmark

S&P 500 Index

Total strategy assets

$366.8M

(as of September 2019)

Investment vehicles

  • Separate account
  • Strategy offers access to an area of the equity markets that is often under-researched and mispriced due to the complexity created by leverage
  • No limitation on exposures to sectors, countries, or capitalization sizes
  • Opportunity set broadened by shorting capabilities and active use of cash
  • Risk-adjusted return potential enhanced by security selection and the application of flexibility

*No assurance can be given that the investment objective will be achieved or that an investor will receive a return of all or part of his or her initial investment. Actual results could be materially different from the stated goals. Investors should carefully consider the risks involved before deciding to invest. See the composite disclosures for a summary of risk considerations. As with any investment, there is a potential for profit as well as the possibility of loss.

Assets may include accounts that are not reflected in the composite.

Investment team

Performance

Annualized composite performance (%) as of September 30, 2019

  MTD QTD YTD 1 Year 3 Years 5 Years 10 Years
Equity Spectrum (gross) 1.71% -3.63% 11.45% -12.69% 1.21% -1.11% 10.25%
Equity Spectrum (net) 1.64% -3.84% 10.74% -13.43% 0.34% -1.95% 9.33%
S&P 500 Index 1.87% 1.70% 20.55% 4.25% 13.39% 10.84% 13.24%

Calendar Year Composite Performance (%) as of September 30, 2019

  2018 2017 2016 2015 2014 2013 2012 2011 2010 2009
Equity Spectrum (gross) -16.25% 7.02% 4.63% -12.92% 7.49% 46.62% 26.18% 10.90% 25.58% --
Equity Spectrum (net) -16.97% 6.11% 3.74% -13.66% 6.59% 45.44% 25.17% 10.01% 24.57% --
S&P 500 Index -4.38% 21.83% 11.96% 1.38% 13.69% 32.39% 16.00% 2.11% 15.06% 26.46%

Past performance is not a guarantee of future results. An investment in this strategy could lose value. Most recent month-end performance is preliminary. Returns are subject to change. Please refer to the composite report for additional important information regarding performance disclosures and investments risks.

Periods less than one year are not annualized. Performance is stated in U.S. dollars.

Literature

Important disclosures

Investments in securities of leveraged companies are likely to be more volatile than investments in companies that are not leveraged. Portfolios that engage in short sales of securities can incur losses if the securities appreciate in value and may experience higher volatility due to leverage resulting from investing the proceeds of securities sold short. This risk is greatest in volatile markets. Losses could be limitless.

The Putnam Investments Equity Spectrum Composite (the "Composite") seeks capital appreciation by investing primarily in equity securities of leveraged U.S. companies that have the most favorable investment potential. This strategy invests in relatively few issuers and involves more risk than a strategy that invests more broadly. The Composite is benchmarked to the S&P 500 Index. The Composite comprises all fully discretionary accounts managed by Putnam in this investment style. This strategy may use leverage and may sell securities short. Derivatives, such as forwards, futures, options, swap contracts, and credit derivatives, may be used for hedging purposes and to gain exposure to various markets. The Composite was created May 19, 2009.

The S&P 500 Index covers 500 industrial, utility, transportation, and financial companies of the US markets (mostly NYSE issues). The index represents about 75% of NYSE market capitalization and 30% of NYSE issues. It is a capitalization-weighted index calculated with dividends reinvested.

Composites may include portfolios with certain existing investment restrictions that the Firm believes do not materially impact the investment strategy. Benchmarks are generally taken from published sources and may have different calculation methodologies, pricing times, and/or foreign-exchange sources from the composite. The effect of those differences is generally deemed to be immaterial. The securities holdings of the Composite may differ materially from those of the index used for comparative purposes. Composites and benchmarks include the reinvestment of dividends and other earnings. Indexes are unmanaged and do not incur expenses. You cannot invest directly in an index. Gross-of-fees returns do not include the deduction of management fees and other expenses that may be incurred in managing an investment account. A portfolio's return will be reduced by advisory and other fees. Net-of-fee returns are calculated using a model fee. For the applicable time periods, net-of-fees returns reflect either the deduction of the highest management fee that is paid by a portfolio in the Composite during the performance period, applied on a monthly basis, or the deduction of the highest applicable management fee in effect during the performance period that would be charged based on the fee schedule appropriate to this mandate, without the benefit of breakpoints, applied on a monthly basis, whichever is higher. Net-of-fee calculation methodology may change over time. Actual investment advisory fees incurred by clients are typically negotiated on an individual basis and may vary depending upon, among other things, the applicable fee schedule and portfolio size. Our standard fee schedules are available upon request.