Putnam Equity Spectrum Fund PYSAX

finder

Does anyone has an opinion about this unusual fund, investing in leveraged companies? It has load 5.75%, but it is waived at Fidelity, see https://fundresearch.fidelity.com/mutual-funds/summary/74676P169

Red line-midcap value, green line- S&P500

The fund was launched on 05/18/2009, and then it was growing fast and steady. In part, it was because of 22% in health care, but this alone probably cannot account for its success and stability. The manager, David Glancy, was managing Fidelity Leveraged Company fund FLVCX 12/19/2000 — 07/01/2003, outperforming midcap stocks by 60% during that short time. These 60% played the main role in the historical outperformance of FLVCX since inception to the present time.

In 2003, David Glancy started a hedge fund, "with mixed results", and then he returned to the mutual fund business in 2009. Now he is outperforming his previous charge FLVCX with smaller volatility. His other fund, Putnam Capital Spectrum A PVSAX (larger companies), also does well. For a discussion, see also http://files.parsintl.com/eprints/80013.pdf

TheShadow

PYSYX is also available at Scottrade for low minimums in regular accounts. I have very small positions in PYSYX and PVSYX.

Ted

Dear finder: What's to not like about this fund. Concentrated portfolio, heavy dose of healthcare, and in the 1st or 2nd percentile in returns.
Regards,
Ted

scott

no min at Etrade, but small mins otherwise.

Bitzer

It'll be interesting to see how Mr. Glancy does in a down market.

finder

It is interesting indeed: Perhaps he was not happy with his hedge fund from 2003 to 2009, if he decided to return to mutual fund business. Look however what he did at the first 3 years of FLVCX (blue line) and compare it to the general market (green) and mid-cap stocks (red): At first, FLVCX was falling with everyone, but then it turned up like a rocket.

On the other hand, after David Glancy left FLVCX, in 2008-2009, this fund was VERY volatile.

golub1

1.46% expense ration. That's high.

linter

seems to do as well as POAGX (except for the one year statistic) with a tiny bit less volatility.

cman

Confirmation bias, recency bias, every darn bias..

This is a great fund for momentum players to exploit as long as the manager is hot. Not enough data to judge it for a core fund.

It would be wise to look beyond just the past performance and understand a bit about why the fund may have performed that way. Starting close to the bottom of a recession with a small asset base is an easy tail wind for a fund. It also made a good net on healthcare. Most competent managers get at least one good investment thesis or best idea in a fund. But how they do when that thesis or best idea stops working (and all of them end at some point) is what determines a good actively manages fund suitable for a core. FLVCX was a very volatile fund with great performance in this manager's tenure. He takes bold bets. May win Ted's heart but hardly a reason to make it a core holding.

I am sure more than a few will add this to their collection of 20+ funds with an allocation somewhere between 0.0001% and 0.01% so they don't have to worry about it if it fails even if that allocation makes no difference to their portfolio when it works. It might satisfy the collection craving for a while.

Ted

Reply to @cman: "May win Ted's heart" !
Regards,
Ted
1. I like bold bets
2. 0.0001% allocation is meaningless
3. Don't confuse volatility with risk

Win My Heart: