Putnam Capital Spectrum Fund (Class A: PVSAX) pursues total return by investing in the securities of leveraged companies, according to a press release. Management aims to select the most attractive securities anywhere within a company’s capital structure, including stocks, bonds, bank loans, and convertibles.
Putnam Equity Spectrum Fund (Class A: PYSAX) seeks capital appreciation through investments in the equity securities of leveraged companies, the announcement said. Using research and investment experience in this area, management seeks to uncover mispriced stocks of leveraged companies, creating the potential for these stocks to outperform broad market averages.
The funds will be managed by veteran portfolio manager David Glancy, who joined Putnam earlier this year after two decades of specializing in industries of leveraged companies at Andover Capital and Fidelity Investments.
The leveraged company funds’ investment processes rely on fundamental research by analyzing corporate balance sheets and capital structures to identify the securities with the greatest total return potential. Types of leveraged companies the funds will seek include capital-intensive businesses; early-stage growth companies (rising stars); former investment-grade companies (fallen angels); and companies in special situations, such as restructurings, bankruptcies, or leveraged buyouts.
According to Putnam, for investors willing to assume the volatility and other risks of these investments, investing in leveraged companies can provide a level of diversification when added to a traditional equity or fixed-income portfolio.
In addition, both funds also have a fee structure in which the fee adjusts based on fund performance—aligning the interests of the fund manager with those of shareholders, according to the release.
More information is available at www.putnam.com/individual/spectrum-funds/.