Putnam Sustainable Leaders

Objective And Strategy

Objective
The fund seeks long-term capital appreciation.

Strategy
The fund is focused on identifying companies with strong fundamentals, reasonable valuation, and demonstrated commitment to leadership in sustainable business practices. We believe that the integration of ESG factors into a high-quality fundamental research process will lead to superior rates of return and mitigate risk for investors over the long term.

Principal Risks

* This portfolio invests in securities of foreign issuers which involves risks not typically associated with domestic issuers, including currency fluctuations and the possibility of political and economic instability. Emerging markets involve risks in addition to those generally associated with foreign securities, because political and economic structures in many emerging markets may be undergoing significant evolution and rapid development.

* This Fund may invest in publicly issued equity securities, including common stocks. Investments in common stocks are subject to market risks that may cause their prices to fluctuate over time.

* Growth stocks can perform differently from the market as a whole and other types of stocks and tend to be more expensive relative to their earnings or assets compared with other types of stocks. As a result, growth stocks tend to be more sensitive to changes in their earnings and can be more volatile than other types of stocks.

* The value of a specific security can be more volatile than the market as a whole and can perform differently from the value of the market as a whole. The value of securities of smaller issuers can be more volatile than those of larger issuers. The value of certain types of securities can be more volatile due to increased sensitivity to adverse issuer, political, regulatory, market, or economic developments.

* The Index's defensive positioning may not effectively hedge the Portfolio's downside risk. Hedging strategies may not perform as anticipated.