Putnam joins money market guaranty program

Oct 1, 2008 @ 2:12 pm

By Sue Asci

Putnam Investments of Boston today announced it plans to participate in the U.S. Treasury’s money market guaranty program.

On Sept. 19, the U.S. Treasury announced a temporary guaranty program for publicly offered money market mutual funds.

Funds must pay a fee to participate in the program, which will be financed with up to $50 billion from the treasury’s Exchange Stabilization Fund, which was created in 1934.

If a fund falls below the $1 net asset value, it will trigger the insurance.

“Putnam’s money market funds have maintained their $1 share price and continue to represent safe and high quality investments,” Robert L. Reynolds, president and chief executive, said in a statement.

“However the program is well worth the peace of mind we hope it provides investors.”

Last week Federated Investors Inc. of Pittsburgh announced plans to absorb Putnam’s institutional Prime Money Market Fund, which closed Sept. 17 due to excessive redemptions.

The firm has three remaining money market funds including the retail Putnam Money Market Fund with $3.5 billion in assets, Putnam Variable Trust Money Market Fund which had $476.6 million in assets and Putnam Tax Exempt Money Market Fund with $74 million in assets as of Aug. 31.

Putnam managed $163 billion in assets as of Aug. 31.

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