Two-pronged approach works
The combination of a fundamental and quantitative approach to stock selection has proven to be a successful blend for Putnam Investments
According to the company’s Global Core portfolio manager Brad Greenleaf, Putnam has developed a track record for outperformance by focusing on stocks that satisfy both fundamental and quantitative factors.
“Quantitative doesn’t capture everything you need to know about a stock, fundamental doesn’t either, but when you put the two together it’s very powerful,” he said.
He said Putnam had been utilising a fundamental approach for a number of years, whereby it adopted a rigorous bottom-up process to identify, evaluate and understand key factors affecting a company and its stock price.
He contends that adding a multi-factor valuation system that ranks stock attractiveness across a broad universe would deliver consistent returns on a long-term basis.
The investment manager recently released a fund into the Australian market, the Putnam Global Concentrated fund, which employs both approaches.
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