Where do Putnam's portfolio managers think the opportunity in the market lies? Six portfolio managers have put their thoughts together on where they are putting their money while awaiting the impact of the Fed's deep rate cut.
As we wait to see the impact of the Federal Reserve's recent rate cut on
the markets, this remains a challenging environment for investors. While
the backdrop for financial markets has changed, Putnam's portfolio managers
still find attractive investment opportunities across asset classes around
Global Asset Allocation
Markets face short-term volatility related to uncertainty in credit
markets, which can create investment opportunities. Our current strategies
emphasize wealth preservation and establishing positions likely to be
profitable in the future.
Jeff Knight, Portfolio Leader, Putnam Asset Allocation: Growth Portfolio
International large cap
Despite the slowdown in the U.S. economy in the first half of 2007, global
growth has remained robust and we expect growth to continue albeit at a
slowing pace. We see greatest valuation support in large-cap growth stocks
in international markets, which may command a premium as economic growth
Josh Byrne and Sam Davis Portfolio Managers, Putnam International Equity
The convertible marketplace is less efficient than most equity markets,
making it easier to make gains by doing thorough analysis, particularly at
a time when equity markets have corrected and there is a possibility of the
Fed easing. The fixed income value of convertibles should provide some
nice downside protection and we see a lot of opportunity in various
sectors. At a time when spreads have widened out and the equity market has
corrected, it's a great time to look at convertible securities.
David King, Portfolio Leader, Putnam Convertible Income-Growth Trust
International small and mid cap
International small- and mid-cap stocks still offer attractive valuations
when compared with other types of equities, such as larger companies around
the world. Recent volatility is creating more attractive valuations.
Joe Joseph, Portfolio Leader, Putnam International Capital Opportunities
Global large cap
Attractively-valued energy, natural resources, basic materials, and
industrial stocks in developed markets provide attractive exposure to
dynamic growth opportunities in the world’s developing markets.
Shigeki Makino, Portfolio Leader, Putnam Global Equity Fund
U.S. large-cap value
We expect stocks to remain relatively resilient, as recent volatility has
resulted in many valuation opportunities. We are finding undervalued
opportunities in the capital goods and technology sectors. We are cautious
regarding the consumer cyclicals sector.
Bart Geer, Portfolio Leader, Putnam Equity Income Fund
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