Wait, let's just get one thing straight. Most "value" funds these days are basically growth funds wearing a cheap suit. They’ve got high price-to-earnings ratios, tech-heavy portfolios, and enough volatility to make your stomach do backflips. But Putnam Large Cap Value R6 (ticker: PEQSX) is a bit of a different animal.
It's old-school. Honestly, it’s refreshing.
Since Franklin Templeton officially swallowed up Putnam Investments in early 2024, people have been wondering if the "Putnam magic" would evaporate. You know, that specific, granular focus on dividend growth and actual cash flow. But as we sit here in January 2026, the fund is still cranking along with its original DNA intact.
Why PEQSX Is Still Winning the Value War
You’ve probably seen the headlines. Growth stocks have been the darlings for so long that "value" feels like a dusty relic from the 1990s.
Here’s the thing: PEQSX isn’t just buying "cheap" companies. That's a trap. It’s looking for companies that are basically cash-printing machines but are being ignored by the flashier parts of the market.
Take a look at the performance. Over the last year (ending late 2025), the fund returned roughly 20.5%. Compare that to the Large Value category average of about 15.2%. It’s not just winning; it’s putting distance between itself and the pack.
The Cash Flow Obsession
Most managers stare at earnings. Earnings can be manipulated. They can be "adjusted" with creative accounting.
The team at Putnam—led by Darren Jaroch and Lauren DeMore—focuses on future cash flows. They want to know if a company can actually pay its bills and, more importantly, if it can grow its dividend.
The Numbers That Actually Matter
Let's talk about the R6 share class specifically. If you’re in a 401(k) or a large institutional plan, this is likely what you’re looking at.
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- Expense Ratio: 0.54%.
- Net Assets: Approximately $45 billion (strategy-wide).
- Turnover Rate: A mere 16%.
That turnover rate is key. It means they aren't day-trading these stocks. They buy, they wait, and they let the thesis play out. While other funds are churning through 60% of their portfolio every year, PEQSX stays the course.
What's Inside the Box?
As of the most recent data, the sector allocation isn't what you’d expect from a boring value fund. Financials lead the way at around 20%, followed by Health Care at 13.5%.
But wait. Information Technology is still over 10% of the fund.
They aren't tech-phobic. They just won't pay 100x earnings for a "maybe." They own the Oracles and Microsofts of the world—companies that have actual, tangible dominance and recurring revenue.
The Franklin Templeton Factor
When the acquisition closed, some investors panicked. "Will they change the managers?" "Will they jack up the fees?"
So far, the answer is a hard no.
The transition has been surprisingly smooth. Franklin Templeton basically gave Putnam’s Boston-based team the keys and told them to keep doing what they’re doing. The R6 shares (PEQSX) still benefit from that institutional pricing, and the "Y" class (PEIYX) remains a staple for fee-based advisors.
Is It Riskier Than a Standard Index?
Value is supposed to be "safe," right?
Kinda.
PEQSX has a Beta of around 0.78 relative to the broader market. That means when the S&P 500 drops 10%, this fund historically drops significantly less. It's a defensive play. However, in a runaway bull market led by AI startups and speculative tech, this fund will look like a turtle.
But turtles win races. Especially when the race lasts 20 years.
The Dividend Growth Engine
The 30-day SEC yield sits around 1.29% for the R6 class. It’s not a "high yield" fund in the sense that it's chasing 8% junk bonds. It’s a growth of income fund.
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They are looking for the next dividend aristocrat. Companies like Exxon Mobil or Bank of America that have the balance sheet strength to keep raising payouts even when the economy hitches.
The "Secret Sauce" Most People Miss
The fund uses a "relative value" approach.
They define the value universe daily. It’s not a static list of "cheap" stocks. They use quantitative tools to find where the market is mispricing a company's ability to return cash to shareholders.
Then, they apply fundamental research. They call the management. They look at the factories. They check the supply chains. It's a hybrid model that seems to catch the stuff the algorithms miss.
Practical Next Steps for Your Portfolio
If you’re holding Putnam Large Cap Value R6, or considering it, don't just look at the 1-year return. That’s a amateur move.
- Check your 401(k) lineup. If PEQSX is an option, compare its expense ratio to the other large-cap options. At 0.54%, it’s often the cheapest active fund in the list.
- Look at your tech exposure. If the rest of your portfolio is in the Nasdaq or "Magnificent 7" stocks, PEQSX acts as a great stabilizer.
- Evaluate the dividend. If you are nearing retirement, the quarterly distributions from this fund provide a layer of "real" return that doesn't rely on selling shares in a down market.
- Monitor the management. Keep an eye on Jaroch and DeMore. As long as they are at the helm, the strategy remains valid. If there’s a sudden departure, that’s when you re-evaluate.
Value investing isn't dead. It's just evolving. And PEQSX is currently one of the most effective versions of that evolution.