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Putnam to combine absolute-return funds with target date funds

It will use the funds within retirement series of life cycle funds

By Sue Asci

June 17, 2009 1:46 pm ET

Putnam Investments expects to deploy its absolute-return funds within target date retirement funds — a strategy slated for launch this fall.

The funds will be used in Putnam’s Retirement Ready series of life cycle funds.

Putnam launched a series of absolute-return funds in January that were created to bring an annualized total return of 1%, 3%, 5% or 7% above the returns of Treasury bonds over a period of three or more years. In addition, they are designed to deliver a positive return even in plunging markets.

To be sure, the dicey markets of the last several months have prompted investors to re-evaluate how they should invest.

“When markets go up consistently over time, people forget that [they] can go down, and they buy relative-return funds,” said Jeffrey Carney, head of global marketing, products and retirement at Putnam in Boston.

The absolute-return funds have garnered nearly $250 million in assets since the Jan. 13 launch.

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