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.

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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 the globe.

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 slows. Josh Byrne and Sam Davis Portfolio Managers, Putnam International Equity Fund

Convertibles

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 Fund

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

This message is intended for the recipient only and is not meant to be forwarded or distributed in any other format. This communication is for informational purposes only. It is not intended as an offer or solicitation for the purchase or sale of any financial instrument, or security, or as an official confirmation of any transaction. Putnam does not accept purchase or redemptions of securities, instructions, or authorizations that are sent via e-mail. All market prices, data and other information are not warranted as to completeness or accuracy and are subject to change without notice. Any comments or statements made herein do not necessarily reflect those of Putnam, LLC (DBA Putnam Investments) and its subsidiaries and affiliates. If you are not the intended recipient of this e-mail, please delete the e-mail. 

Edited by: Erin Kello


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