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Portfolio > Mutual Funds

Putnam Proposes Major "Shareholder Friendly" Changes

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Putnam Investments announced that management fees on the company’s retail mutual funds will be reduced or eliminated in order to provide investors with pricing benefits as well as to keep Putnam’s products relevant in the changing marketplace. “Every element of our re-pricing plan is crafted to benefit our shareholders, in some cases immediately, in all cases over the long haul,” said Putnam’s CEO, Robert L. Reynolds, in a July 28 company statement.

Some of the management fee reductions started August 1st, including fee-reductions on asset allocation funds as well as fixed-income funds, as well as an elimination of management fees on target date funds.

Management fees for Putnam Fixed Income Funds will be reduced by 13% to 34%. Management fees for Putnam Asset Allocation Funds will be reduced by 10%, while the wrap fee for Putnam Retirement Ready Funds will be eliminated.

Putnam will begin performance-based fees for U.S. growth funds, international funds, and the Putnam Global Equity Fund. The fees that managers receive on these funds will be incumbent upon the funds’ performance; mangers will defer the fee if the fund underperforms and raise the fee if it outperforms.

Another change on the horizon is break point discounts for investors. These break points will now be based on the overall growth of all Putnam mutual fund assets as opposed to growth of individual Putnam fund’s assets.

Michael K. Stanley can be reached at [email protected]


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