Internally Managed Solutions

Philosophy and Approach

Research-driven: As fiduciaries, we believe ESG-integrated research adds value and should be integrated into the investment process. We do not have social or environmental agendas. We believe sustainable investing is simply smart investing.

Performance-oriented: Our ability to take a wider view of the investment landscape through a sustainable investing lens can help identify risks that can be managed and opportunities that can be captured. We believe investors focused on sustainability should not have to compromise on risk or return.

Platform approach: Our decades of experience as sustainable investors working with socially and environmentally conscious investors has taught us that there is no silver bullet – no one approach will work for all clients. We have developed a sustainable suite of strategies leveraging our research and data-driven platform to intentionally serve investors with diverse views and goals.

Our sustainable suite of investment strategies all have deep ESG integration at the core and varying levels of SRI exclusions and Thematic emphasis to meet the needs of a diverse client base.

Sustainable Investing Equity Strategies

ESG Core US Equity

Driven by fundamental research, refined with integrated ESG analysis

35-50 Securities

Max positions sizes greater of 5% or benchmark weight

Up to 15% Int’l

≤10% cash

Growth, value, and quality criteria

Large, mid, and small cap opportunity set

Average ESG score > S&P 500

Excludes “Worst in Class” ESG-rated securities and those with significant hidden ESG-related liabilities

Benchmark S&P 500

ESG Equity Income

Market-leading companies with higher-than-average dividends refined with integrated ESG analysis

45-55 Securities

Max position sizes greater of 5% or benchmark weight

Up to 15% Int’l

≤ 10% cash

Mostly large cap with limited mid/small cap stocks

Expected turnover 20-35%

Benchmark S&P 500

Secondary Benchmark Russell 1000 Value

ESG Core
International Equity

Driven by fundamental research, refined with integrated ESG analysis

45-65 Securities

Max positions sizes greater of 5% or benchmark weight

≤10% cash

Growth, value, and quality criteria

>90% of portfolio >$10B market cap

Up to 10% out of EAFE benchmark

Excludes “Worst in Class” ESG-rated securities and those with significant hidden ESG-related liabilities

Average ESG score > EAFE Score

Benchmark MSCI EAFE

Low Carbon Core US Equity

Driven by fundamental research and carbon risk analysis

40-65 Securities
Max positions sizes greater of 6% or benchmark weight
Up to 15% Int’l
≤10% cash
No traditional energy exposure
Excludes top toxic and carbon emitters, top fossil fuel reserve holders, coal fired electric utilities
Weighted average CO2 intensity ≤50% of benchmark
Benchmark S&P 500 ex energy

Sustainable Opportunities

Driven by fundamental research and environmental thematic analysis

40-60 securities
Max positions sizes greater of 5% or benchmark weight
Up to 40% Int’l
Renewable energy
Every efficiency
Pollution prevention
Green building
Sustainable water and agriculture
Excludes top toxic and carbon emitters, top fossil fuel reserve holders
Benchmark Russell 3000

Focused Environmental Opportunities

Concentrated thematic strategy driven by environmental and fundamental analysis

30-60 Securities

Max position sizes of 7%

Only companies with material direct product, service, or business model exposure to environmental innovation

Wide latitude across cap size, sectors, and geographic regions

Not benchmark focused, though the MSCI World Index will be used to frame strategy exposures

Sustainable Investing Fixed Income Strategies

ESG Core Taxable Fixed Income

High quality core fixed income driven by ESG-integrated credit research

Intermediate duration

Investment grade

15-40 individual bonds (dependent upon size of assets managed) with tactical allocations to other diversifying fixed income asset classes

Diversified by asset class and sector

Macro view on interest rates and economic outlook informs portfolio construction

ESG-integrated credit analysis drives selection of individual corporate bonds

Excludes: “Worst in Class” ESG-rated securities and those with significant hidden ESG-related liabilities

Average ESG score > benchmark

Benchmark: Bloomberg Barclays Intermediate Gov’t / Credit Index

Low Carbon Core Taxable Fixed Income

High quality core fixed income driven by ESG and climate integrated credit research

Intermediate duration

Investment grade

15-40 individual bonds (dependent upon size of assets managed) with tactical allocations to other diversifying fixed income asset classes

Diversified by asset class and sector

Macro view on interest rates and economic outlook informs portfolio construction

ESG and climate integrated credit analysis drives selection of individual corporate bonds

No traditional energy sector exposure

Excludes top carbon and toxic emitters

Weighed avg CO2 intensity < 50% of benchmark

Benchmark: Bloomberg Barclays Intermediate Gov’t / Credit Index

Municipal Impact Fixed Income

High quality core municipal strategy driven by ESG and use of proceeds impact analysis

Intermediate duration

Investment grade

15-40 individual bonds (dependent upon size of assets managed) with tactical allocations to other diversifying fixed income asset classes

Above market income

Tax-Exempt bonds selected using ESG and impact-integrated credit analysis

Green bonds included as appropriate

Focus on general obligation and revenue bonds with special attention on sectors such as higher education, clean water, affordable housing, and public transportation

Benchmark: Bloomberg Barclays 5-Year Muni Index

Customization – Our suite of strategies often meets the needs of clients as structured, though we have the ability to dynamically layer in additional exclusionary (SRI) and inclusionary (Thematic) factors where desired.

Reporting

Clients in our proprietary strategies receive ongoing manager commentary and portfolio reporting.

Get in touch to schedule a time to talk with a member of the F.L.Putnam team by reaching out to us below.

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