Putting durable growth themes to work
A thematic approach is a distinctive feature of Putnam Growth Opportunities Fund. The team analyzes global trends, as well as problems and potential solutions, to identify which themes could drive sustained growth for businesses over a multi-year time horizon.
THEME: Autonomous and electric vehicles
Electric vehicle penetration is less than 3% today, and self-driving vehicles are only in the testing phase. Still, the revenue opportunity for semiconductor companies that supply these end markets is already meaningful and growing at above-market rates.
Beyond autonomous driving, semiconductors are used for a range of features in cars, such as cameras, sensors, and internet connections. The rollout of 5G wireless will increase semiconductor demand for automobiles.
STOCK: NVIDIA (NVDA)
NVIDIA produces graphics processing units (GPUs) that are used for gaming and entertainment as well as artificial intelligence.
- The company maintains dominant market share (over 60%) in GPUs, which are central to the artificial intelligence architecture that enables autonomous driving.
- While small today, this end market should become material to NVIDIA as autonomous vehicle production ramps
over the coming decade.
- NVIDIA has decades of experience providing hardware and software for automakers and is working to help make autonomous driving a reality for its clients.
Putnam Growth Opportunities Fund
See how investing in companies with durable long-term growth prospects, high and/or improving capital returns, and a strong ownership culture drives 5-star performance as of 5/31/2020.
Get to know Putnam Growth Opportunities Fund
Learn more about the distinctive thematic approach and how the team analyzes global trends to identify which themes could drive sustained growth for Putnam Growth Opportunities Fund.
The Morningstar Rating™ for funds, or “star rating,” is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and ten-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36 to 59 months of total returns, 60% five-year rating/40% three-year rating for 60 to 119 months of total returns, and 50% ten-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the ten-year overall star rating formula seems to give the most weight to the ten-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods. Ratings do not take into account the effects of sales charges and loads.
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