Putnam Investments is planning to roll out three new multicap-equity funds in September.
For starters, the company is converting its Mid Cap Value Fund (PMVAX) into the Multi-Cap Value Fund. In addition, the fund firm is merging the Putnam New Opportunities Fund (PNOPX), a multicap-growth fund, with the Putnam Vista Fund (PVISX), a mid-cap-growth fund. Putnam is also filing with the Securities and Exchange Commission to launch the Putnam Multi-Cap Core Fund.
Putnam has spent the past 12 months building up its 25-person equity analyst team and wants to take advantage of the market opportunity with multicap funds, said Robert L. Reynolds, the firm's president and chief executive.
“Frankly, we thought having managers stay in specific boxes didn't allow them the opportunity to take advantage of what we do well, which is to identify good stocks for the managers to buy,” he said. “We thought it would be better for shareholders to offer the managers the ability to go up and down the capital structure.”
All three funds will go live in September.
James Polk, portfolio manager of the Mid-Cap Value Fund, will manage the Multi-Cap Value Fund, while Gerard Sullivan, who runs the Putnam Investors Fund, will manage the Multi-Cap Core Fund, and Robert Brookby, who also manages the Putnam Growth Opportunities Fund, will run the Multi-Cap Growth Fund.
“Adding the flexibility for Putnam's managers to invest in companies across the market capitalization spectrum is a welcome benefit, but only for those who have experience and know small companies just as well as they know large-caps,” said Jonathan Rahbar, an analyst at Morningstar Inc.
Although Mr. Brookby and Mr. Sullivan have demonstrated success in picking the stocks of larger companies, it remains to be seen how they fare with small-caps, Mr. Rahbar said.
“Meanwhile, it's difficult to have a firm understanding of the benefits that will come with Putnam Mid-Cap Value's transformation into an all-cap-value product, primarily because Mr. Polk's five-year tenure running Mid Value has been middling, at best,” he said.
Indeed, the five-year return for the Mid-Cap Value Fund is 1.42%, underperforming its category by 0.45 percentage points, according to Morningstar.
E-mail Jessica Toonkel Marquez at [email protected].
