Putnam merges, liquidates 10 funds

The funds the Boston-based company is liquidating had assets ranging from $32.8 million to $7 million.
FEB 09, 2017
Putnam Investments is sending 10 of its funds to the dustbin of history. The Boston-based fund company will liquidate four funds: Strategic Volatility Equity Fund (PSVEX), Asia Pacific Equity Fund (PAPAX), Retirement Income Fund Lifestyle 2 (PRYAX) and Retirement Income Fund Lifestyle 3 (PISFX). Other funds are being merged into oblivion. The $46.7 million Arizona Tax Exempt Income Fund (PTAZX) and the $78.2 million Michigan Tax Exempt Income Fund (PXMIX) will merge into the $929.2 million Tax Exempt Income Fund (PTAEX). Similarly, the $1.2 billion Putnam High Yield Fund (PHIGX) will merge into the $560.9 million Putnam High Yield Advantage fund (PHYIX). The $5 billion Putnam Fund for Growth and Income (PGRWX) will merge into the $6.4 billion Putnam Equity Income Fund (PEYAX). The $22 million Putnam Global Dividend Fund (PGDEX) will merge into the $8.1 million Putnam Global Sector Fund (PPGAX). The $36 million Putnam Global Energy Fund (PGEAX) will merge into the $166 million Putnam Global Natural Resources fund (EBERX). Firms typically liquidate funds because they haven't accumulated enough assets to justify their expenses. The funds Putnam is liquidating had assets ranging from $32.8 million (Retirement Income Fund Lifestyle 3) to $7 million (Strategic Volatility Equity Fund). Poor performance is one reason to merge a fund into another. The advantage: The poorly performing fund's record goes into the dustbin of history, too. For example, the Putnam Fund for Growth and Income gained an average 7.05% a year the past three years, according to Morningstar. The Putnam Equity Income fund has gained 9.14% a year over the same period. Fund critics have long criticized using average performance of mutual funds because of survivorship bias. The industry rarely liquidates its best funds, so those that are left tend to skew the averages upwards.

Latest News

Maryland bars advisor over charging excessive fees to clients
Maryland bars advisor over charging excessive fees to clients

Blue Anchor Capital Management and Pickett also purchased “highly aggressive and volatile” securities, according to the order.

Wave of SEC appointments signals regulatory shift with implications for financial advisors
Wave of SEC appointments signals regulatory shift with implications for financial advisors

Reshuffle provides strong indication of where the regulator's priorities now lie.

US insurers want to take a larger slice of the retirement market through the RIA channel
US insurers want to take a larger slice of the retirement market through the RIA channel

Goldman Sachs Asset Management report reveals sharpened focus on annuities.

Why DA Davidson's wealth vice chairman still follows his dad's investment advice
Why DA Davidson's wealth vice chairman still follows his dad's investment advice

Ahead of Father's Day, InvestmentNews speaks with Andrew Crowell.

401(k) participants seek advice, but few turn to financial advisors
401(k) participants seek advice, but few turn to financial advisors

Cerulli research finds nearly two-thirds of active retirement plan participants are unadvised, opening a potential engagement opportunity.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today’s choppy market waters, says Myles Lambert, Brighthouse Financial.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave