Putnam Investments, the fourth-largest U.S. mutual fund company, said it’s eliminating 11
of its 66 funds after sales and returns lagged.
The unit of Marsh & McLennan Cos. said it aimed to lift performance by concentrating resources on fewer funds. The funds Putnam is closing or merging have assets of about $5 billion. Putnam manages $303 billion.
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Ten of the 11 funds will be merged into larger portfolios, while Putnam Preferred Income Fund will be liquidated, the company said in a statement.
Sales have slowed at Boston-based Putnam, as its largest stock funds, leaders in the bull market that ended in March 2000, have become laggards in the bear market due to large holdings of
technology stocks.
“By consolidating our fund lineup, we will be able to concentrate more investment resources and talent on a smaller number of funds, and we expect to deliver stronger performance in those funds,” Lawrence Lasser, chief executive of Putnam, said in a statement.
At the end of 1999, the average Putnam stock fund had a three-year record in the top 37 percent of its peers, according to fund tracker Lipper. By the end of last year, the average Putnam stock fund’s three-year record was in the top 53 percent.
As the funds slid, sales nosedived. Putnam went from being the third-best selling of the 25 largest mutual fund groups in 2000 to the fourth-worst in 2001, according to Financial Research Corp., a Boston-based consulting firm. Investors pulled $4.51 billion from Putnam’s funds in 2001 after having added $16.5
billion in 2000, according to FRC.
Closures
Putnam Balanced Fund and Putnam Balanced Retirement Fund will be merged into George Putnam Fund of Boston. Putnam New Century Growth Fund and Putnam Technology Fund will be merged into Putnam Voyager Fund II.
Putnam Global Growth and Income Fund and Putnam Global Equity Fund will be merged into Putnam Global Growth Fund. Putnam Asia Pacific Growth Fund and Putnam Emerging Markets Fund will be merged into Putnam International Growth Fund.
Putnam High Yield Trust II will be merged into Putnam High Yield Trust, and Putnam Strategic Income Fund will be merged into Putnam Diversified Income Trust.
The funds’ board of directors agreed in principle to the changes last week and is expected to approve them in April, Putnam said. Most of the changes must also be approved by fund shareholders.
Putnam said Friday it was considering closing or merging some funds and would announce any decision soon.
Bloomber News
