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Looking at PEUGX’s Portfolio up to November 2015

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Putnam Europe Equity Fund

The Putnam Europe Equity Fund Class A (PEUGX) invests “in established large and midsize companies across Europe that benefit from the region’s economy and from operations in global markets.” The fund literature states that it can invest in either growth or value stocks.

Fundamental research forms the backbone of the fund’s investment process. It supplements fundamental research by making use of macroeconomic analysis and quantitative tools. The fund manager pursues Putnam’s “blend” strategy, under which it can invest into either growth or value stocks. This indicates that it does not have a style bias.

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The fund’s assets were spread across 73 holdings as of November 2015, and it was managing assets worth $378.2 million. As of the November portfolio, its top ten equity holdings included TOTAL (TOT), Unilever (UN), Anheuser-Busch (BUD), ING Groep (ING), and Vodafone Group (VOD), which made up 11.3% of its portfolio.

Historical portfolios

For this analysis, we will be considering holdings as of September 2015, as that is the latest available sectoral breakdown. The holdings post-September reflect the valuation-driven changes to the portfolio, not the actual holdings.

The fund’s assets are spread across all ten sectors. Financials is the only sector that forms over one-fifth of the fund’s assets. Consumer discretionary and healthcare follow, in that order, and form 30% of the portfolio. Consumer staples is the only other sector that commands over 10% of the fund’s portfolio.

The financials sector has maintained its share of the fund’s assets over the course of the one-year period ended November 2015. However, the composition of the sector has undergone a lot of change in this period. Exits include Banco de Sabadell (BNDES), while entrants include Credit Suisse Group (CS).

The consumer discretionary and healthcare sectors have seen their shares increase over the period. While the former has seen a lot of change, the latter has mainly seen stocks being added to the sector.

The fund’s exposure to the energy and telecom services sectors is a bit high at 6.3% and 5.7%, respectively, compared to its peers.

How has the fund’s portfolio positioning impacted its returns YTD in 2015 up to November? Let’s look at that in the next article.

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