Putnam adjusts target date slate, unveils new hybrid strategy

Putnam Investments of Boston today tweaked its slate of target date funds, and unveiled a new hybrid strategy across its platform of retirement fund offerings.

Putnam Investments of Boston today tweaked its slate of target date funds, and unveiled a new hybrid strategy across its platform of 10 retirement fund offerings.

The Putnam RetirementReady funds will combine absolute return strategies, which are designed to provide a long-term positive return over Treasury bills, with relative-return mutual fund strategies, which deliver returns versus a benchmark.

One of the biggest concerns for retirees is outliving their savings and last year’s market downturn had a dramatic effect on many investors’ nest eggs, Putnam chief executive Robert Reynolds said in an interview with InvestmentNews. “It left many investors thinking ‘Now I have to work five more years,’” he said.

With the inclusion of absolute-return strategies, “it would have been a much different story,” he said. “This [strategy] discounts the risk of having a much smaller nest egg. It gives you the downside protection you are looking for.”

The combined strategies are designed to deliver a more consistent sequence of returns, said Jeffrey Carney, Putnam’s head of global marketing and products, and retirement.

“It’s not guaranteed, but the impact on depletion risk is significant,” he said.

Putnam had $110 billion in assets under management as of Aug. 31, including $300 million in its RetirementReady funds and $560 million in its absolute-return strategies.