Putnam Multi-Cap Value Fund - Putnam Investments

About the fundSeeking undervalued companies before their potential is recognizedHidden opportunities and flexibility arekey ingredients in the strategy of PutnamMulti-Cap Value Fund. The fund’s managerlooks for investment potential in stocksthat are currently out of favor with investors.Introduced in 1999 as Putnam MidCap Value Fund, the fund now has theflexibility to invest in a wider range ofcompanies under its multi-cap valueinvestment mandate.The fund can invest in small companiesthat are in their emerging or expansionaryphases, and these companies can remainin the fund’s portfolio even as they growlarger. Historically, investing in stocks ofsmaller companies comes with the riskof greater price fluctuations. Combiningsmall-cap and mid-cap stocks with thoseof larger, more established companiesprovides a more diversified approach tohelp manage those risks.The fund is managed in the value style,which means the manager seeks stocksthat are attractively priced in relation to thecompany’s earnings and growth potential.A stock price may be low becausethe company is being underestimatedor because its industry is in the midstof a downturn. Often, companies in theportfolio are undergoing changes thatmay lift their stock prices, such as restructuring,introduction of new products, orstreamlining of operations to cut costs.Putnam Multi-Cap Value Fund holdings have spannedindustries over time.Supported by a team of research analysts,the fund’s manager uses his stock-pickingexpertise and Putnam resources to identifyopportunities. Putnam’s analysts generateindependent research and visit regularly withcompanies, seeking information that hasn’talready factored into stock prices.Multi-cap investingat PutnamPutnam’s suite of multi-cap equity fundsis designed to provide a streamlinedapproach to investing across the broaduniverse of U.S. stocks. Each fund investswith a specific style and has the flexibilityto invest in companies of all sizes.The fund managers can select stocksfrom across their style universe, regardlessof company size. The managers canown stocks throughout a company’sentire growth cycle, without capitalizationrestraints that might force them to sellholdings that get too large, or that wouldprevent them from taking advantage ofcertain attractively priced stocks.Supported by a strong research team, themanagers use their stock-picking expertiseto identify opportunities and manage risk.Putnam Multi-Cap Growth Fund targetsstocks of companies that are believed tooffer above-average growth potential.Putnam Multi-Cap Value Fund targetscompanies whose stocks are priced belowtheir long-term potential, and where theremay be a catalyst for positive change.Putnam Multi-Cap Core Fund uses ablend strategy, investing in both growthstocks and value stocks, seeking capitalappreciation for investors.2000ComericaFinancial servicescompany with banklocations in severalU.S. states2001MaytagManufacturer ofkitchen andlaundry appliances2002KelloggLeading producerof cereal andconvenience foods2004BurlingtonNorthern Santa FeProvider of railroadtransportation servicesin North America2007McAfeeProvider ofsoftware securityand services2011The TJXCompaniesAn off-price apparel andhome fashions retailerIdentified holdings were held during the yearindicated; holdings will vary over time. Thefund may not have continued to hold the securityin the portfolio, and may have sold it at aloss. Performance of identified holdings in ayear may not be representative of the fund’sreturns during the same period. Securitiespurchased in the future may not generatesimilar returns. This is not an offer to sell or arecommendation to buy any individual security.For more information on current fundholdings, see pages 24–28.2 Multi-Cap Value Fund Multi-Cap Value Fund 3