risks.

The following risks may be materially relevant but may not always be adequately captured by the summary risk indicator and may cause additional loss: Counterparty risk, Concentration risk and Model risk. Sustainability risks may lead to a significant deterioration in the financial profile, profitability or reputation of an underlying investment and may therefore have a significant impact on its market price or liquidity. The environmental, social, and governance (“ESG”) considerations discussed herein may affect an investment team’s decision to invest in certain companies or industries from time to time. Results may differ from portfolios that do not apply similar ESG considerations to their investment process.

glossary.

Transition Materials

Essential elements of the transition to a low carbon economy

The global economy is transitioning, transforming three systems: energy, land and oceans, as well as materials, accelerated by the pricing of carbon. As these changes unfold, we are seeing a fundamental re-wiring happening to our economies. In this transition, new technologies will unavoidably depend on key materials.

Please note the Sub-Fund changed its name from PUTNAM – Commodity Risk Premia on 2 May 2023.

140m km

of copper cabling
needed by 2030

46%

supply gap in
silver by 2030

2.2 bnm³

of construction lumber
needed by 2030

Source: PUTNAM research analysis

supply risk hedge

inflation hedge

transition essentials

investment expertise

long-term potential

In the shift to electrification, green mobility, material substitution, and recyclability, we foresee many dislocations in supply and demand.

For example, we anticipate upward price pressures (driven by both demand and scarcity) in copper, nickel, cobalt, aluminium, steel, and lumber among many other materials we constantly keep under review.

In our Transition Materials strategy, we actively seek exposure to these commodity-heavy themes at the forefront of the transition.

the market opportunity.

Past industrial revolutions have, historically, been a core driver of shifts in commodity markets. We estimate as much as USD 24.5 in trillion in capital expenditure may be deployed this decade in the energy transition alone.

And just looking at supply and demand at lithium markets today, we see a clear supply gap.

transition demand.

Commodities can be perceived as a sound investment in the transition. Most of the technologies needed heavily depend on specific materials such as copper, tin, zinc, steel, nickel or cobalt.

exploiting dislocations.

For example, solar photovoltaic (PV) plants, wind farms and electric vehicles (EVs) generally require more minerals to build than their fossil fuel-based counterparts. A typical electric car requires six times the mineral inputs of a conventional car and an onshore wind plant requires nine times more mineral resources than a gas-fired plant.

As transition technologies experience exponential growth, so too will the demand for the underlying commodities with which they are built. Ongoing proprietary research with our dedicated experts looks for dislocations in future supply and demand dynamics of those commodities. We look to exploit these within our portfolios.

Targeting commodities essential to the transition

our strategy.

Our Transition Materials strategy is designed to benefit from the long-term growth potential of commodity-heavy themes at the forefront of the transition.

Access to a broad and diversified basket of commodities identified as essential to the transition.
Exclusion of commodities negatively exposed to the transition, such as all energy fossils related commodities
Supply risk hedge. Direct exposure to upstream components (raw materials and supplies), different from manufacturers you can access with equities
Inflation hedge. Diversifying source of returns, low to negative correlation to traditional asset classes
Long-term potential upside driven by growth demand and sustainable supply chain risk
Fundamental investment framework integrating forward looking assessment of the supply / demand chain driven by the transition
Implemented through a rigorous systematic investment process based on risk diversification principles
Privileged market access with potential broader return opportunities relative to traditional Metals centric commodity benchmarks
12+ years of experience in managing commodity strategies. Stable investment team, leveraging on the roadmaps research team insight as well as BWB’s wider infrastructure
Benchmark - BCOM Industrial Metals Index and BCOM Global Commodity Index
UCITS funds with daily liquidity

Our investment process focusses on four key areas

Transition supply risk

Forward-looking assessment on supply gap risk

Based on Supply/Demand driven the transition,
adjusted from factors
such as substitution recycling, efficiency

Disruption
risk

Identify short-term trend opportunities

Assess supply/demand disruption through term curve structure
Backwardation / Contango relative arbitrage

Strategic allocation

Systematic risk
Diversification

Based on realised risk of each components
Risk contibution are translated into capital weights

Market structure

Extract alpha from execution

Premia extraction through carry and roll optimisation
Trading algo vs close

Source: PUTNAM Research. For illustrative purposes only. There is no guarantee that a target objective will be reached (not an accurate indicator).

our themes explored.

copper

Used for electrical conductivity across end market applications, with additional uses in construction and consumer markets.
tin

40% consumed as solder in semiconductors and electronic circuitry, with additional uses in containers, bearing alloys, glass-making and in a wide range of chemical applications.
lumber

Used primarily for construction framing, as well as finishing (floors, wall panels and window frames).

insights.

Silver: where beauty meets conductivity

May 23, 2025

Silver has the highest electrical conductivity of any metal, and is very malleable and durable. This makes it a vital material for the energy transition, ideal for use in areas like solar technology.

Lumber: back in vogue for a bio-based economy

March 13, 2025

Lumber is enjoying a renaissance. Technological innovation is enabling the use of more lumber in buildings instead of cement and steel – helping drive the transition to a circular bioeconomy.

Tin: a hidden beneficiary of semiconductor demand

November 29, 2024

Indispensable to growth technologies, benefitting from an expected supply-demand gap and highly recyclable, the growth outlook for this ancient metal far exceeds its use in tin cans.

Debunking 10 myths about electric vehicles

November 1, 2024

Misconceptions persist about electric vehicles. We debunk 10 of the most common myths using analysis based on science, engineering, and market research.

Investing in transition materials for innovation

September 20, 2024

The transition in energy and materials systems is creating compelling opportunities in metals and biobased materials, among others.

important information.

This document is a Corporate Communication and is intended for Professional Investors only.

This document is a Corporate Communication for Professional Investors only and is not a marketing communication related to a fund, an investment product or investment services in your country. This document is not intended to provide investment, tax, accounting, professional or legal advice.

This document is approved at the date of the publishing. The Company is clustered within the PUTNAM Investment Management Division of PUTNAM Group which support in the preparation of this document and PUTNAM is a trade name.

Any opinions or forecasts provided are as of the date specified, may change without notice, do not predict future results and do not constitute a recommendation or offer of any investment product or investment services.

This document is the property of PUTNAM, is provided for information purposes only and is addressed for the recipient exclusively for its personal use. It may not be reproduced (in whole or in part), transmitted, modified, or used for any other purpose without the prior written permission of PUTNAM . It is not intended for distribution, publication, or used for any other purpose without the prior written permission of PUTNAM .

The contents of this document are intended for persons who are professionals and who have been vetted by PUTNAM and assessed as suitable to the investment matters set out in this document and in respect of whom PUTNAM has received an assurance that they are capable of making their own investment decisions and understanding the risks involved in making investments of the type included in this document or other persons that PUTNAM has expressly confirmed as being appropriate recipients of this document. If you are not a person falling within the above categories, you are kindly asked to either return this document to PUTNAM or to destroy it and are expressly warned that you must not rely upon its contents or have regard to any of the matters set out in this document in relation to investment matters and must not transmit this document to any other person. This document contains the opinions of PUTNAM, as at the date of issue or completeness of the information contained in this document, nor does it accept any liability for any loss or damage resulting from its use. All information and opinions as well as the prices indicated may change without notice.

The contents of this document has not been reviewed by any regulatory authority in any jurisdictions and does not constitute an offer or a recommendation to subscribe for any securities or other financial instruments or products.

It contains opinions of PUTNAM, as at the date of issue. These opinions and information contained herein in this document does not take into account all the specific circumstances of the addressee. Therefore, no representation is made that the information presented in this document are suitable or appropriate to the individual circumstances of any investors. Tax treatment depends on the individual circumstance of the investor and may be subject to change in the future. PUTNAM does not provide tax advice.

The information and analysis contained herein are based on sources believed to be reliable. While PUTNAM uses its best efforts to ensure that the content is created in good faith and with greatest care, it does not guarantee the timeliness, accuracy, validity, reliability or completeness of the information contained in this document, neither does it warrant that the information is free from errors and omission not does it accept any liability for any loss or damage resulting from its use. All information and opinions as well as the prices indicated may change without notice. Particular contents of third parties are marked as such. PUTNAM assumes no liability for any indirect, incidental or consequential damages that are caused by or in connection with the use of such content.

The Source of the data has been mentioned wherever it was available. Unless otherwise stated, the data is prepared by PUTNAM .

Data Protection: You may be receiving this Communication because you have provided us your contact details. If this is the case, note that we may process your personal data for direct marketing purposes. For more information on PUTNAM’s data protection policy, please refer to www.putnamadvisoryco.com

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