PNSAX
Putnam SmallCap Growth-A
Introduction to Putnam SmallCap Growth-A
Putnam SmallCap Growth-A (PNSAX) is a mutual fund designed to achieve capital appreciation by investing primarily in the common stocks of U.S. companies, with a particular focus on growth stocks. As a part of the Franklin Templeton Investments family, this fund is categorized under Small Cap Growth, making it an attractive option for investors seeking high growth potential. With an expense ratio of 1.21%, PNSAX offers a competitive edge in its category, especially for those looking to capitalize on the dynamic nature of small-cap stocks. The fund’s strategy is to identify and invest in companies that are poised for significant growth, providing investors with the opportunity to benefit from the potential upside of emerging market leaders.
At A Glance
Executive Summary
PNSAX offers high growth potential with a 50.52% 1-year return, focusing on U.S. small-cap stocks. Its 1.21% expense ratio is competitive for its category.
High 1-year return of 50.52%. Focus on U.S. small-cap growth stocks. Strong sector allocation in technology and healthcare.
Higher expense ratio compared to peers. No yield for income-focused investors. High beta indicates higher volatility.
Impressive Recent Performance
PNSAX has demonstrated remarkable performance over the past year, boasting a 1-year return of 50.52%. This impressive figure significantly outpaces its benchmark, the S&P 500 Total Return Index, which recorded a 1-year return of 37.62%. The fund’s strong performance can be attributed to its strategic focus on small-cap growth stocks, which have benefited from favorable market conditions and investor sentiment. The fund’s ability to outperform its benchmark highlights its effective stock selection and management strategies, making it a compelling choice for investors seeking high returns in the small-cap growth space.
Sector Allocation and Growth Potential
The sector allocation of PNSAX is a key factor in its growth potential. The fund has a significant allocation in the technology sector, accounting for 21.87% of its portfolio, and the healthcare sector, which comprises 22.64%. These sectors are known for their high growth potential, driven by innovation and increasing demand. Additionally, the fund’s largest sector allocation is in industrials, at 27.39%, which provides a balanced exposure to cyclical growth opportunities. This strategic allocation positions PNSAX to capitalize on emerging trends and technological advancements, offering investors a diversified approach to capturing growth in the small-cap market.
Risk and Volatility Considerations
Investors should be aware of the risk and volatility associated with PNSAX. The fund has a beta of 1.42, indicating higher volatility compared to the market. This is typical for small-cap growth funds, which tend to experience greater price fluctuations. However, the fund’s alpha of 12.86% suggests that it has been able to generate returns above the expected market return, compensating for its higher risk. The Sharpe ratio of 0.66 further indicates that the fund has delivered a reasonable risk-adjusted return. While the fund’s standard deviation of 5.61% reflects its volatility, the upside potential of 4.35 and downside risk of 2.95 provide a balanced view of its risk profile.
Competitive Comparison with Similar Funds
When compared to similar funds, PNSAX holds its ground with a strong performance record. For instance, Voya SmallCap Opportunities-I (IVSOX) and Voya SmallCap Growth-I (TCMSX) have 1-year returns of 48.76% and 47.98%, respectively, while PNSAX leads with 50.52%. Although PNSAX has a higher expense ratio of 1.21% compared to its peers, its superior performance may justify the cost for investors seeking high returns. Additionally, the fund’s beta of 1.42 is comparable to its peers, indicating similar levels of volatility. This competitive analysis underscores PNSAX’s ability to deliver strong returns in the small-cap growth category.
Portfolio Composition and Top Holdings
PNSAX’s portfolio composition is a testament to its strategic investment approach. The fund’s top holdings include Comfort Systems USA Inc (FIX), Parsons Corp (PSN), and Encompass Health Corp (EHC), each representing over 2% of the portfolio. These companies are leaders in their respective industries, offering growth potential and stability. The fund’s focus on small-cap stocks is evident, with 66.15% of its portfolio allocated to small-cap companies. This focus allows PNSAX to tap into the growth potential of emerging companies, providing investors with exposure to high-growth opportunities in the U.S. market.
Max Drawdown and Recovery Analysis
The max drawdown for PNSAX was recorded at -8.9%, with a drawdown length of 1 month and a recovery length of 0 months. This indicates that the fund experienced a brief period of decline but was able to recover quickly, demonstrating resilience in volatile market conditions. The peak date of the drawdown was on July 16, 2024, with the valley date on August 7, 2024. This quick recovery is a positive indicator for investors concerned about potential losses, as it suggests that the fund’s management is adept at navigating market downturns and capitalizing on recovery opportunities.
Conclusion: Suitability for Growth-Oriented Investors
PNSAX stands out as a strong contender for investors seeking high growth potential in the small-cap space. Its impressive 1-year return of 50.52%, strategic sector allocation, and effective risk management make it an attractive option for aggressive investors. However, the fund’s higher expense ratio and volatility may not suit all investor profiles. Those comfortable with higher risk and seeking to capitalize on the growth potential of small-cap stocks will find PNSAX to be a valuable addition to their portfolio. Its focus on technology and healthcare sectors further enhances its appeal to investors looking to benefit from innovation-driven growth.
Similar Securities
OPOCX: Invesco Discovery-A | High Growth Small Cap Fund
OPOCX offers high growth potential with a focus on small-cap U.S. equities, boasting a 47.62% 1-year return and a 1.03% expense ratio.
PRDSX: TRPrice Integrated US SMCap Grwth Eq-Inv | Small Cap Growth Fund Analysis
PRDSX offers a diversified small-cap growth portfolio with a competitive 0.8% expense ratio and strong 1-year return of 39.46%, outperforming its benchmark.
OTCFX: TRPrice SmallCap Stock-Inv | Small Cap Growth Opportunities
OTCFX offers small-cap growth with a 0.90% expense ratio, outperforming peers with a 36.72% 1-year return. Ideal for aggressive growth investors.
FSGRX: Franklin SmallCap Growth-A | Small-Cap Growth Investment
FSGRX offers robust small-cap growth with a 45.07% 1-year return, outperforming its benchmark. Ideal for growth-focused investors.
JANVX: Janus Henderson Venture-D | Small Cap Growth Fund Analysis
JANVX offers strong small-cap growth with a 41.42% 1-year return, outperforming its benchmark. Ideal for aggressive investors seeking capital appreciation.
Futher Reading
https://finance.yahoo.com/quote/PNSAX/”>Yahoo: Putnam SmallCap Growth-A
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