The total expense ratios across Putnam Investments’ four Absolute Return Funds have been reduced by as much as 54%, the firm and the Putnam Funds’ board of trustees announced Monday.
Because the Absolute Return Funds are included as underlying investments in Putnam’s RetirementReady Funds, the expenses for those funds also have been reduced by as much as 24%. RetirementReady Funds are the firm’s suite of 10 target-date/lifecycle retirement funds.
The significantly reduced pricing came about as more advisors and investors seek safe harbors from market uncertainty, said Robert L. Reynolds, president and chief executive officer of Putnam Investments. In January 2009, Putnam Investments launched its suite of four Absolute Return Funds, which have since grown to $2.6 billion in assets.
“Although I am pleased with the $2.6 billion in assets since our launch, we expect the numbers to increase significantly, because of the broad application of our suite of Putnam Absolute Return Funds,” Reynolds said in a statement.
“Based on advisor feedback and investor needs around inflation and volatility, we decided to take a fresh look at the pricing of the Absolute Return Funds and have determined that a reduction in expenses better aligns them to compete aggressively across the marketplace, and helps to further their use as core investments for many different types of investment portfolios across all time horizons,” Reynolds explained.
Nearly 9,000 financial advisors from more than 500 broker-dealers use the Absolute Return Funds in portfolio construction. A recent Putnam national survey of 256 financial advisors about their views on absolute return strategies found that three in five advisors surveyed, or 59%, were likely or certain to recommend them to their clients. The same numbersaid that a major strength of absolute return funds was their ability to help minimize portfolio volatility, and 37% saw them as an effective hedge against inflation.
Read about Putnam Investments’ absolute return symposium in November at AdvisorOne.com.