Large-Cap Value Dog

Part Two of Worst in Show:

For generations Saint Bernards have been a welcome sight to travelers in distress. The dog is famous for coming to the aid of stranded adventurers and the breed has become an icon to children of all ages. The Straight Poop

Large-cap value funds are the Saint Bernards of the fund world; investors seek comfort in this style box when cold winds blow on Wall Street. An overweight allocation here can be as as invigorating as a shot of brandy from a Saint Bernard’s cask.

Putnam Classic Equity (PXGIX) is a value fund in a growth stock shop. Classic is a misnomer in this case...with bottom decile numbers against its large-cap peers over the last decade it is a wonder this fund has not been merged out of existence. Survivorship bias is no myth.

Don’t blame the managers..they have only been at the helm of this sinking ship since ‘04. But you can pin last year’s stinky performance on them.

Putnam’s problems have been well publicized and parent company Marsh & McLennan finally bit the bullet.. Assuming a transaction is consummated, Putnam’s next challenge will likely be cultural.  While its possible lucrative retention packages keep its employee’s focused, integration issues are likely to keep Putnam’s fund manager’s on edge.

If you have paid your dues on Wall Street you know the drill; they spend more time talking to headhunters than performing due diligence on their portfolio holdings.

We have no idea what is going on at Putnam...but we hope the new regime will treat Main Street a little better.

It is long overdue.

Next up: Mid-Cap Blend Dog

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