What You Need to Know
- The four actively managed semi-transparent equity ETFs resemble four of the firm's mutual funds.
- Most have lower fees than comparable Putnam mutual funds, and two are focused on sustainability factors.
- Putnam's head of product and strategy expects the firm to launch more actively managed ETFs.
Putnam Investments has entered the ETF market with the launch of four actively managed equity ETFs that are similar to four of the firm’s mutual funds.
They are the Putnam Sustainable Leaders ETF (PLDR), Putnam Sustainable Future ETF (PFUT), Putnam Focused Large Cap Growth ETF (PGRO) and Putnam Focused Large Cap Value ETF (PVAL). The fund company, which has $197 billion in assets, announced plans for the ETFs in February.
Most of the Putnam ETFs have lower fees than the cheapest classes of their comparable mutual funds, and not all of them will disclose their holdings on a daily basis, unlike most traditional ETFs. They will instead use Fidelity’s methodology for semi-transparent ETFs, disclosing on a daily basis a tracking basket of holdings that has a 70%-80% overlap with actual portfolio holdings and disclosing actual holdings on a quarterly basis with an eight-day lag. Two of the new ETFs are focused on environmental, social and governance factors.
Carlo Forcione, head of product and strategy at Putnam, tells ThinkAdvisor that the firm expects to see a vast majority of interest for the ETFs coming from financial advisors, including registered investment advisors (RIAs) who are already familiar with Putnam mutual funds.