came one of the fund’ s managers six years ago. The other co-manager, fixed-income specialist Andrew Benson, joined her in August 2021. The fund they manage was recently ranked as 12th best overall during the past five years and second overall during the past three years in its Morningstar category.
Magnificent Seven
In the wake of 2022’ s market meltdown, some observers posited that the 40 % fixed-income portion of the traditional 60 / 40 portfolio was an inadequate buffer against equity downturns. A possible solution, some critics contend, is to alter the portfolio mix with an injection of alternative investments. But even if alternatives can play an important role in investment portfolios, 60 / 40 portfolio proponents counter that these investments add complexity and cost.
In the case of the George Putnam Balanced Fund, Lakin and Benson are sticking to the basics of stocks and bonds.“ We treat it as a true 60-40 strategy,” Lakin says.“ Some of our competitors go further out of bounds to that weighting than we will. We try hard to keep it within plus or minus 500 basis points, or 5 %.
“ We have run with a slight structural overweight to the equity sleeve of the strategy during the past five years,” she adds.“ That has averaged about 63 %.”
Lakin notes this slight overweight to equities has boosted the fund’ s performance.“ During the past three years it has added about 35 basis points in alpha each year.”
A good reason for this is that the fund’ s top 10 holdings recently included six of the so-called Magnificent Seven stocks— Google parent Alphabet, Amazon. com, Apple, Meta Platforms, Microsoft, and Nvidia. The last member of the seven, Tesla, was among the larger positions not in the George Putnam Balanced Fund’ s top 10. Together, this group of stocks has propelled the bull market in U. S. equities during the past two years. The fund’ s top 10 also recently included high-flyer Broadcom, along with a couple of U. S. Treasury positions and cash.
Nonetheless, all of the Magnificent Seven companies except Meta were down this year through early March. Broadcom was also in negative territory. This explains why, through early March, the George Putnam fund sat in the bottom quartile in Morningstar’ s moderate allocation category, logging a loss of 0.09 % while the entire category gained 1.43 %.
Lakin points out that while the fund owns all of the Magnificent Seven names, it has had less weight in those names than the S & P 500 has over the past few years.
Broader Opportunity
The fund follows a U. S. core strategy with a max 10 % weighting in non-U. S. stocks.“ It’ s now about 5 % to 7 %,” she says.“ We mostly invest in multi-nationals and U. S.-based companies.”
Lakin says the fund’ s equity portion is managed to compete with the S & P 500, and that it’ s parceled out to 10 senior analysts on the equity research team according to their areas of expertise. They take a bottom-up fundamental approach that’ s
Manager Kate Lakin Age 39
Professional Background She is director of research and responsible for managing a team of analysts covering all sectors and regions. She is a portfolio manager of Putnam’ s Balanced and U. S. Research strategies. Before joining Putnam in 2012 she was an equity research analyst at Fidelity Investments.
Outside Interests She enjoys spending time with her husband and three children. She serves on the board of her children’ s preschool. Her“ me time” includes Pilates or a spin bike.
Manager Andrew Benson Age 40
largely sector neutral, and as a result information technology is the fund’ s top sector, followed by financials and consumer discretionary.
Both technology and financials were slightly underweight against the S & P 500 by the end of January.“ The stock picking in technology has been so strong that despite the underweight we’ ve added significant alpha because we’ ve got the stock picks right over the past two years,” Lakin says.
While most of the Mag Seven and some other big names have pulled back in 2025, the rest of the market began to increase its share of the index in the last half of 2024, and Lakin says she’ s encouraged by this. She thinks developments in the artificial intelligence space, such as the low-cost model developed by Chinese company DeepSeek, will help smaller companies develop AI computing systems and benefit the market.
“ A few months ago, we thought AI was dominated by a handful of players, and now we think it’ ll be much broader, and
Professional Background He is a portfolio manager in the fixedincome group. He specializes in investment-grade and crossover strategies within the corporate and tax-exempt credit team. He is a portfolio manager of Putnam’ s Core Bond, Core Bond Intermediate, Core Plus, Investment-Grade Corporate Credit, Short Duration Bond, Stable Value, and Ultra Short Duration Income strategies, as well as crossover credit and preferred mandates. He began his investment industry career when he joined Putnam in 2008.
Outside Interests He enjoys spending time with his wife and three children and their family dog. He and his family enjoy hiking and skiing in the New England mountains.
52 | FINANCIAL ADVISOR MAGAZINE | APRIL 2025 WWW. FA-MAG. COM