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January 17, 2018 at 09:21 AM
Putnam Investments is joining the growing number of asset managers that have introduced ESG-focused funds. It expects to launch two actively managed ESG funds in March: the multi-cap Putnam Sustainable Leaders Funds and mid-cap Sustainable Future Fund, pending SEC approval.
Both funds are being formed through the repositioning of existing funds. The Leaders fund replaces the $4.3 billion Putnam Multi-Cap Growth Fund, and the Future fund replaces the $450 million Putnam Multi-Cap Value Fund.
“The true value of active management is being able to find compelling, differentiated investment opportunities that are often undiscovered and away from underlying benchmarks — ultimately seeking to add meaningful alpha to clients’ portfolios,” said Robert L. Reynolds, president and CEO of Putnam Investments, in a statement.
“Our ESG product developments are part of a larger continuing effort by Putnam to use its evolving product lineup to help clients capitalize on a broad range of market dynamics through an effective mix of innovative traditional and nontraditional investment strategies.”
(Related: Will Advisors Finally Embrace ESG and Sustainable Investing in 2018?)
Investors in the new ESG offerings stand to benefit because “companies engaged in sustainability often show enhanced fundamental and financial performance,” said Putnam’s chief investment officer for equities, Aaron Cooper, in a statement. He told ThinkAdvisor that in addition to enhancing returns, stocks that qualify for their ESG attributes help to mitigate risk, which is an important consideration for investors in the current aging bull market trading near record highs. “These are high-quality businesses that will be more likely to better perform in a down market,” said Cooper.
