Despite generating positive returns, the Putnam U.S. Large Cap Value Equity Concentrated SMA portfolio experienced a slight underperformance relative to its benchmark, the Russell 1000 Value Index, during the first quarter. This period saw a general decline in U.S. equities, largely influenced by the instability and unpredictability brought about by the conflict in Iran.

A detailed analysis of the portfolio's performance reveals varied contributions from different sectors. Positive impacts primarily came from astute stock selections within the materials and energy sectors. Conversely, the portfolio's relative performance was negatively affected by less favorable stock choices in the information technology, financial, and healthcare sectors.

In summary, the first quarter of 2026 presented a challenging environment for U.S. equities, dominated by geopolitical concerns. The portfolio's performance, while positive overall, highlights the critical role of sector-specific stock selection in navigating turbulent markets. This underscores the need for continuous vigilance and adaptive strategies in investment management, emphasizing resilience and strategic positioning to achieve long-term objectives despite external volatilities.