Putnam Asset Allocation: Balanced APABAX

Morningstar Rating

Fund Research and Analysis

by Jonathan Rahbar

Putnam Asset Allocation: Balanced is rebounding well, but can it last?

In 2008, the credit crisis took a toll on this fund's fixed-income portfolio. Forced selling by many hedge funds and institutions froze up liquidity and drove bond prices significantly lower, which created adverse conditions for many mutual funds holding similar types of securities, including this fund. Read more

Kudos

Could rebound strongly when foreign stocks and credit market perform well.

Reasonable fees. Read more

Risks

Putnam has experienced significant turnover at both the executive and manager levels in the last year, which clouds this fund's future as it relies on various research groups at the firm.

All-cap stock strategy means the fund is likely to lag rivals that focus on the biggest companies when large stocks outperform.

This fund makes lots of top-down macroeconomic calls, which are notoriously difficult to get right on a consistent basis. Read more

Strategy

This is a complicated hybrid fund. Management constantly tweaks the fund's allocations on the margin as it sees opportunity. The team can invest as much as 75% of the fund's assets in stocks. That equity sleeve is multi-cap and multistyle. Read more

Management

Lead manager Jeffrey Knight joined Putnam in 1993 and became a manager of this fund in 2002. He is head of Putnam's team of asset-allocation specialists. Knight and his team oversee portfolio construction and run most of the fund's domestic and foreign large-cap assets. Read more

Inside Scoop

This fund mixes all types of securities. It's usually invested in more stocks than bonds, and it often has at least 10% of assets tied to foreign stocks. It's not a standout among funds with similar profiles. Read more

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