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| Fund summary | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goal | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Putnam Sustainable Leaders Fund seeks long-term capital appreciation. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fees and expenses | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The following tables describe the fees and expenses you may pay if you buy, hold and sell shares of the fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in Putnam funds. More information about these and other discounts is available from your financial professional and in How do I buy fund shares? beginning on page 17 of the fund’s prospectus, in the Appendix to the fund’s prospectus, and in How to buy shares beginning on page II-1 of the fund’s statement of additional information (SAI). | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in Putnam funds. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ 50,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shareholder fees (fees paid directly from your investment) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Annual fund operating expenses (expenses you pay each year as a percentage of the value of your investment) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Example | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The following hypothetical example is intended to help you compare the cost of investing in the fund with the cost of investing in other funds. It assumes that you invest $10,000 in the fund for the time periods indicated and then, except as indicated, redeem all your shares at the end of those periods. It assumes a 5% return on your investment each year and that the fund’s operating expenses remain the same. Your actual costs may be higher or lower. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Portfolio turnover | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The fund pays transaction-related costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher turnover rate may indicate higher transaction costs and may result in higher taxes when the fund’s shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or the above example, affect fund performance. The fund’s turnover rate in the most recent fiscal year was 22%. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 22.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Investments, risks, and performance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments We invest mainly in common stocks of U.S. companies of any size, with a focus on companies that we believe exhibit a commitment to financially material sustainable business practices. We may also invest in non-U.S. companies. In evaluating investments for the fund, we view “financially material sustainable business practices” as business practices that we believe are reasonably likely to impact the financial condition or operating performance of a company and that relate to environmental, social, or corporate governance (“ESG”) issues. We identify relevant ESG issues on a sector-specific basis using an internally developed materiality map, which is informed by the industry-specific financial materiality framework of the Sustainability Accounting Standards Board (“SASB,” now incorporated in the International Financial Reporting Standards Foundation). As part of this analysis, we may utilize metrics and information such as emissions data, carbon intensity, sources of energy used for operations, water use and re-use, water generation and diversion from landfill, employee safety and diversity data, supplier audits, product safety, board composition, and incentive compensation structures. Stocks of companies that exhibit a commitment to financially material sustainable business practices are typically, but not always, considered to be growth stocks. Growth stocks are stocks of companies whose revenues, earnings, or cash flows are expected to grow faster
than those of similar firms, and whose business growth and other characteristics may lead to an increase in stock price. We may consider, among other factors, a company’s sustainable business practices (as described above), valuation, financial strength, growth potential, competitive position in its industry, projected future earnings, cash flows and dividends when deciding whether to buy or sell investments. Under normal circumstances, the fund invests at least 80% of the value of its net assets in securities that meet our sustainability criteria. These criteria are based on a proprietary materiality map that is informed by the industry-specific financial materiality framework of SASB. In applying these criteria, we will assign each company a proprietary ESG rating ranging from 1 to 4 (1 indicating the highest (best) ESG rating and 4 indicating the lowest (worst) ESG rating). In order to meet our sustainability criteria for purposes of this investment policy, a company must be rated 2 or 1 by us. This policy is non-fundamental and may be changed only after 60 days’ notice to shareholders. In selecting each investment, we focus on companies that have a demonstrated commitment to sustainable business practices in areas that are relevant and material to their long-term financial returns and risk profiles. We believe that companies that have exhibited such a commitment also often demonstrate potential for strong financial growth. This commitment may be reflected through ESG policies, practices, or outcomes. The fund’s approach to sustainable investing incorporates fundamental research together with consideration of ESG factors. Environmental factors include, for example, a company’s carbon intensity and use of resources like water or minerals. Sustainability measures in this area might include plans to reduce waste, increase recycling, raise the proportion of energy supply from renewable sources, or improve product design to be less resource intensive. Social factors include, for example, labor practices and supply chain management. Sustainability measures in this area might include programs to improve employee well-being, commitment to workplace equality and diversity, or improved stewardship of supplier relationships and working conditions. Corporate governance factors include, for example, board composition and executive compensation. Sustainability measures in this area might include improvements in board independence or diversity, or alignment of management incentives with the company’s strategic sustainability objectives. Our integrated approach combines analysis of the growing body of ESG data and deep fundamental analysis and looks for companies that demonstrate leadership, beyond compliance, on relevant sustainability issues. The characteristics that we may use when considering sustainability leadership include:
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| Risks | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
It is important to understand that you can lose money by investing in the fund. The value of investments in the fund’s portfolio may fall or fail to rise over extended periods of time for a variety of reasons, including general economic, political or financial market conditions, investor sentiment and market perceptions, government actions, geopolitical events or changes, outbreaks of infectious illnesses or other widespread public health issues, and factors related to a specific issuer, geography, industry or sector. These and other factors may lead to increased volatility and reduced liquidity in the fund’s portfolio holdings, may negatively impact the fund’s performance, and may exacerbate other risks to which the fund is subject. The value of a company’s stock may fall or fail to rise as a result of factors directly relating to that company, such as decisions made by its management or lower demand for the company’s products or services. A stock’s value may also fall because of factors affecting not just the company, but also other companies in the same industry or in a number of different industries, such as increases in production costs. Growth stocks may be more susceptible to earnings disappointments, and the market may not favor growth-style investing. These risks are generally greater for small and midsize companies. From time to time, the fund may invest a significant portion of its assets in companies in one or more related industries or sectors, which would make the fund more vulnerable to adverse developments affecting those industries or sectors. The value of international investments traded in foreign currencies may be adversely impacted by fluctuations in exchange rates. International investments, particularly investments in emerging markets, may carry risks associated with potentially less stable economies or governments (such as the risk of seizure by a foreign government, the imposition of currency or other restrictions, or high levels of inflation), and may be or become illiquid. Investing with a focus on companies that exhibit a commitment to sustainable practices may result in the fund investing in certain types of companies, industries or sectors that the market may not favor. In evaluating an investment opportunity, we may make investment decisions based on information and data that is incomplete or inaccurate. Sustainability and ESG metrics are not uniformly defined and applying such metrics involves subjective assessments. Sustainability and ESG scorings and assessments of issuers can vary across third-party data providers and may change over time. In addition, a company’s business practices, products or services may change over time. As a result of these possibilities, among others, the fund may temporarily hold securities that are inconsistent with the fund’s sustainable investment criteria. Regulatory changes or interpretations regarding the definitions and/or use of ESG or other sustainability criteria could have a material adverse effect on the fund’s ability to invest in accordance with its investment policies and/or achieve its investment objective, as well as the ability of certain classes of investors to invest in funds, such as the fund, whose strategies include ESG or other sustainability criteria.
The fund may be an investment option for mutual funds that are managed by Franklin Resources, Inc. (“Franklin Templeton”) and its affiliates as “funds of funds.” Additionally, other investors from time to time may make substantial investments in the fund. Such shareholders may at times be considered to control the fund. Dispositions of a large number of shares by these shareholders may adversely affect the fund’s liquidity and net assets. These redemptions may also force the fund to sell securities, which may increase the fund’s brokerage costs. There is no guarantee that the investment techniques, analyses, or judgments that we apply in making investment decisions for the fund will produce the intended outcome or that the investments we select for the fund will perform as well as other securities that were not selected for the fund. We, or the fund’s other service providers, may experience disruptions or operating errors that could negatively impact the fund. The fund may not achieve its goal, and it is not intended to be a complete investment program. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Performance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The performance information below gives some indication of the risks associated with an investment in the fund by showing the fund’s performance year to year and over time. Before March 21, 2018, the fund was managed with a materially different investment strategy and may have achieved materially different performance results under its current investment strategy from that shown for periods before this date. The bar chart does not reflect the impact of sales charges. If it did, performance would be lower. Please remember that past performance is not necessarily an indication of future results. Monthly performance figures for the fund are available at www.franklintempleton.com. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The performance information below gives some indication of the risks associated with an investment in the fund by showing the fund’s performance year to year and over time. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The bar chart does not reflect the impact of sales charges. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Please remember that past performance is not necessarily an indication of future results. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| www.franklintempleton.com | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annual total returns for class A shares before sales charges | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Year-to-date performance through | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sep. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 24.58% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Best calendar quarter | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 23.73% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Worst calendar quarter | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (17.68%) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Average annual total returns after sales charges (for periods ended 12/31/23) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| After-tax returns reflect the historical highest individual federal marginal income tax rates and do not reflect state and local taxes. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| After-tax returns are shown for class A shares only and will vary for other classes. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| It is important to understand that you can lose money by investing in the fund. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||