Value investing is a weird game. People love to say it's dead every time a tech stock goes to the moon, yet here we are in 2026, and the Putnam Large Cap Value strategy is still a massive pillar in the world of asset management. Honestly, it’s been a wild ride since Franklin Templeton swallowed Putnam back in 2024. You might think a giant merger like that would mess with the "secret sauce," but the Large Cap Value team has basically just kept their heads down and kept doing what they do: hunting for cash flow.
It's about finding companies that are basically "on sale" but aren't actually broken. You've probably heard that before. But Putnam does it a bit differently than your standard "buy low P/E" robot. They’re obsessed with cash. Not just reported earnings—which can be manipulated by accountants—but the actual green stuff moving in and out of the doors.
The Strategy Behind Putnam Large Cap Value
Most investors get value wrong. They think it's just buying boring companies. While the Putnam Large Cap Value portfolio definitely has some "boring" names, the approach is actually pretty aggressive in its research. The managers, Darren Jaroch and Lauren DeMore, have been at this for decades. They use this "relative value" approach. Basically, they look at the whole universe of big U.S. stocks every single day using quantitative tools, then they let their analysts tear the companies apart.
They focus on three things:
- Valuation: Is it cheap compared to its own history or its peers?
- Financial Strength: Can it survive a nasty recession?
- Capital Allocation: Is the CEO actually giving money back to you through dividends or buybacks?
It’s a stock-driven approach, not a macro-driven one. They don't sit around trying to guess what the Fed will do next Tuesday. They care if a bank or a healthcare company is generating way more cash than the market thinks it is.
Who Is Running the Show Now?
Since the Franklin Templeton acquisition, there was a lot of talk about whether the team would change. It hasn't. Darren Jaroch and Lauren DeMore are still the lead portfolio managers. They’ve got over 45 years of combined experience. That matters because value investing requires a certain level of "emotional callousing." You have to be okay with owning things everyone else hates for a while.
They are backed by a massive team of about 30 analysts. These folks are spread across Boston, London, and Singapore. It’s a lot of brainpower focused on one goal: finding the "alpha" that others miss. They specifically look for "positive change." Maybe a company just got a new CEO, or maybe they’re spinning off a bad division. That’s the catalyst they want.
Performance: What the Numbers Actually Say
Let’s talk about the money. As of early 2026, the fund's performance has been surprisingly resilient. If you look at the PEIYX (Class Y) ticker, the 1-year return ending late 2025 was over 20%. That’s strong, especially for a value fund. It even beat the S&P 500 Value Index by a decent margin.
Over the long haul—we’re talking 10 years—the strategy has averaged around 13% annually. Not too shabby. But you have to remember that value goes through "dry spells." In 2022, when everything was crashing, this fund only dropped about 2.8%, while the broader market was getting absolutely hammered. That downside protection is why people stick with it.
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Portfolio Snapshot (The Big Names)
What’s actually inside the box? As of the most recent filings, the portfolio is pretty concentrated—usually around 40 to 60 stocks. They don't want to own the whole market. They want their best ideas.
- Financials: This is usually their biggest bet, often over 20% of the fund. They love names like Citigroup and Bank of America.
- Health Care: Think stable giants like McKesson or Thermo Fisher Scientific.
- Tech (Yes, really): Even value funds own tech now. They hold things like Alphabet (Google) and Cisco. If the cash flow is there, they’ll buy it.
- Retail: Walmart has been a significant holding recently.
Why People Get Confused About the Tickers
If you look up Putnam Large Cap Value, you’ll see a bunch of different symbols. It’s annoying. Here’s the deal:
- PEYAX: This is Class A. It usually has a front-end sales charge (a "load"). Avoid this unless you have a specific reason to pay it.
- PEIYX: Class Y. This is for institutional investors or people using certain fee-based advisors. It has a lower expense ratio—usually around 0.63%.
- PEQSX: Class R6. This is the "cleanest" version, often found in 401(k) plans. No 12b-1 fees. Very low expenses (around 0.54%).
- PVAL: This is the ETF version. It’s technically the "Putnam Focused Large Cap Value ETF." It’s newer, launched in 2021, and it’s basically the "greatest hits" version of the strategy.
The Risks (Because Nothing is Free)
We have to be honest: value investing can be frustrating. There are "value traps" everywhere. These are companies that look cheap but are actually just dying. The Putnam team tries to avoid these by focusing on that cash flow we talked about, but they aren't perfect.
Also, large-cap companies are "mature." You aren't going to get 1,000% returns in two years like you might with a tiny biotech stock. This is a "slow and steady" play. If the market goes into a "growth-at-any-cost" frenzy (like it did in 2020), this fund will probably lag behind the Nasdaq. That’s just the nature of the beast.
Actionable Steps for Investors
If you're looking at adding this to your portfolio, don't just jump in because the recent returns look good. Value is cyclical.
- Check your 401(k) first. A lot of big corporate plans offer the PEQSX (R6 shares). If you have it, it's a solid way to get "blue chip" exposure without paying a ton in fees.
- Look at the ETF. If you're an individual investor using a brokerage like Schwab or Fidelity, the PVAL ETF is much easier to trade and usually more tax-efficient than the mutual fund versions.
- Balance it out. Don't make this 100% of your portfolio. It works best when paired with a growth fund or a total market index. It’s the "anchor" that keeps you from drifting too far when the tech bubble eventually pops (again).
- Watch the expense ratio. If you’re being offered Class A shares (PEYAX) with a 5.75% sales load, ask your advisor for a better option. In 2026, there’s almost no reason for a retail investor to pay a front-end load.
The big takeaway? The Putnam Large Cap Value strategy has survived management changes, corporate buyouts, and dozens of market cycles. It isn't flashy, but it's a proven machine for finding companies that actually make money. For most people, that’s exactly what a long-term investment should do.