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A focus on quality and mispriced earnings

Putnam Emerging Markets Equity invests in companies with underappreciated growth potential across the style and size spectrum.

A concentrated, best-ideas approach

The portfolio of 40-60 stocks is built from deep fundamental research and a bottom-up approach that focuses on stock selection as the primary driver of performance.

Focus on mispriced earnings

In constructing the portfolio, the team favors businesses with the potential for upward revisions to earnings estimates.

A quality bias

To pursue upside potential and help manage downside risk, the team seeks to identify high-quality businesses. They look for strong balance sheets, durable moats and above-average profitability.

Tenured manager backed by a team of global investors

Portfolio Manager Brian Freiwald, CFA, has extensive experience investing in emerging market businesses across the market cap spectrum. Brian is supported by:

  • A global team that includes analysts based in Boston and Singapore with multiple members who speak Mandarin
  • Three emerging markets analysts who are dedicated exclusively to the strategy
  • Resources throughout the firm, including Putnam’s Quantitative Research, Sustainable Investing, and Investment Risk teams
     
“We are excited about the potential in emerging markets and the portfolio, which has many holdings that have not been affected by global macroeconomic challenges.”

Brian S. Freiwald, CFA

Portfolio Manager
Emerging Markets Strategies

THE OPPORTUNITY IN EMERGING MARKETS

  • Innovation is driving exciting change across emerging market countries, offering compelling investment opportunities in many sectors
  • Stronger local currencies, lower commodity prices, and falling interest rates are all potential tailwinds to profit margins
  • After a decade of stagnant earnings growth, emerging market earnings are poised to grow again
  • Emerging market GDP has been growing faster than that of developed markets

Disciplined process seeks to deliver long-term outperformance

We believe companies that revise earnings upward tend to outperform those that do not. Our process is focused on delivering alpha from stock selection and overweight exposure to companies with positive earnings-per-share (EPS) revisions.

Overweight to earnings-per-share revisions

The portfolio maintained a higher average weighting in companies where the team sees potential for upward revisions

Led to alpha capture

With this consistent process, the team focused on capturing alpha from stock selection

Average weight of companies in top quintile of EPS revisions and performance of top quintile EPS revisions, March 2020–March 2025. Most recent data available.

Quarter end composite performance (annualized) as of 3/31/2026 1 Year 3 Years 5 Years 10 Years
Putnam Emerging Markets Equity Gross (%) 36.07 20.70 5.74 11.36
Putnam Emerging Markets Equity Net (%) 34.77 19.53 4.72 10.31
MSCI Emerging Markets Index-NR (%) 29.55 14.84 3.69 7.80

 

Past performance is not a guarantee of future results. An investment in this strategy could lose value. Returns are subject to change.

Gross performance includes the deduction of transaction costs but does not include the deduction of management fees and other expenses that may be incurred in managing an investment account. A portfolio's return will be reduced by advisory and other fees. Net performance reflects the deduction of a model fee applied on a monthly basis, equal to the actual management fee incurred by a portfolio in the composite or the highest management fee that would be charged to a prospect of the strategy, whichever is higher. The model fee may change over time. Actual advisory fees may vary among clients with the same investment strategy. The composite includes all actual, fully discretionary accounts with substantially similar investment policies and objectives managed to the composite's investment strategy.

Download the product profile for commentary, most recent composite performance, top 10 holding, top contributors and detractors, and more.
 

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Explore multiple ways to invest

Equity Strategy Separate Account Mutual Fund SMA/Model ETF CIT UCITS
Emerging Markets Emerging Markets | Separate Account Emerging Markets | Mutual Fund        
Emerging Markets Small Cap Emerging Markets Small Cap | Separate Account          
Emerging Markets ex China Emerging Markets ex China | Separate Account     Emerging Markets ex China | ETF    

 

About Putnam Investments

Putnam is a diversified equity asset manager serving investors worldwide. With roots dating back to 1937, we offer decades of experience in changing markets and investment professionals with extensive knowledge of industries and sectors. As a Franklin Templeton company, we benefit from the resources, scale, and stability of one of the world's largest asset managers.

All investments involve risks, including possible loss of principal. International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. The investment style may become out of favor, which may have a negative impact on performance. Small- and mid-cap stocks involve greater risks and volatility than large-cap stocks. The portfolio is non-diversified and may invest in a relatively small number of issuers, which may negatively impact the performance and result in greater fluctuation in value. To the extent the portfolio invests in a concentration of certain securities, regions or industries, it is subject to increased volatility. Derivative instruments can be illiquid, may disproportionately increase losses, and have a potentially large impact on performance. The manager may consider environmental, social and governance (ESG) criteria in the research or investment process; however, ESG considerations may not be a determinative factor in security selection. In addition, the manager may not assess every investment for ESG criteria, and not every ESG factor may be identified or evaluated.

The Putnam Investments Emerging Markets Equity Composite (the “Composite”) seeks to outperform the MSCI Emerging Markets Index over a full market cycle through deep fundamental research and exploiting inefficiencies specific to emerging markets. The strategy invests mainly in common stocks (growth or value stocks or both) of emerging market companies that we believe have favorable investment potential. Emerging markets include countries in the MSCI Emerging Market Index or that we consider to be emerging markets based on our evaluation of their level of economic development or the size and experience of their securities markets. The approach focuses on identifying high quality businesses with strong balance sheets, durable moats, and good governance. Leverage is not utilized in any account in this Composite. However, derivatives (including options, forward contracts, currency forwards, and swaps) may be used in some portfolios for hedging or non-hedging purposes. The Composite comprises all fully discretionary accounts, including carve-out assets, managed by Putnam Investments in this investment style. Carve-out assets included in the Composite are managed separately with their own cash. A “carve-out” is a portion of a portfolio that is by itself representative of a distinct investment strategy. It is used to create a track record for a narrower mandate from a multiple-strategy portfolio managed to a broader mandate. Effective December 1, 2021, the Composite was redefined to exclude accounts with significant restrictions on the available global markets open for direct investment which materially impact strategy implementation. The Composite inception date was July 31, 1997. The Composite creation date was January 2, 2008. Effective August 23, 2019, there was a portfolio manager change for this strategy.

This material is provided for general informational purposes only and should not be considered individualized investment advice, a recommendation or a solicitation to adopt any investment strategy. It does not constitute legal or tax advice. Franklin Templeton accepts no liability for losses arising from use of this material.

The views expressed are those of the investment manager as of the publication date and may change without notice. These opinions and analyses are based on certain assumptions, including market conditions that may change. They may differ from those of other portfolio managers or from the firm as a whole.

This material is not intended to provide a complete analysis of all material facts regarding any country, region or market. No assurance can be given that any forecast, projection or prediction regarding economies or financial markets will be realized. References to specific securities are for illustrative purposes only and should not be interpreted as recommendations or a solicitation to buy, sell, or hold any security.

Any research or analysis in this material has been prepared by Franklin Templeton for its own purposes and is provided incidentally. While the information included is believed to be reliable, its accuracy and completeness cannot be guaranteed, and it is subject to change without notice.

Past performance does not guarantee future results, or any profit or gain. All investments involve risks, including possible loss of principal.

Franklin Templeton offers environmental, social and governance (ESG) capabilities, though not all strategies or products incorporate ESG as part of the investment process.

Investment strategies and services may not be available in all jurisdictions. Please consult your financial professional or Franklin Templeton contact for further information.

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