Putnam Asset Allocation: Growth APAEAX

Morningstar Rating

Fund Research and Analysis

by Jonathan Rahbar

Putnam Asset Allocation: Growth has done its job well, but we have a couple of concerns.

No doubt about it, this fund has done a solid job for shareholders lately. The fund's performance over the trailing one-, three-, and five-year periods through Oct. Read more

Kudos

This fund leaves tricky asset-allocation decisions to the professionals.

The managers reduce risk by diversifying the portfolio across hundreds of stocks, both in the United States and abroad. Read more

Risks

This fund is intended to be an investor's only mutual fund, which we think is risky, especially with Putnam's blemished history.

The fund's stock allocation could get as high as 95%, which may be aggressive for some investors.

Executive turnover at Putnam is troubling. Read more

Strategy

This fund underwent a major overhaul in early 2000. The fund makes a substantial commitment to U.S. companies, about 60% of assets, mixed between small- and large-cap stocks, but it parks about 20% of assets in foreign stocks. Read more

Management

The fund is team-managed, led by Jeffrey L. Knight, who leads Putnam's asset-allocation group. Knight also runs the firm's other asset-allocation funds, Putnam Asset Allocation: Balanced PABAX and Putnam Asset Allocation: Conservative PACAX. Knight's team also heads up Putnam's absolute return and target-date funds. Read more

Inside Scoop

This large-blend offering is actually a hybrid fund that dedicates about 20% of assets to bonds. The fund is designed to be a one-stop shop for aggressive investors, as management tries to produce equitylike returns while assuming less risk. Read more

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