« Back | Press release: March 18, 2013
Putnam Investments launches six investment products designed to address ongoing volatility, changing tax environment, and need for new sources of income
Firm Introduces a Mix of Traditional and Non-Traditional Offerings to Help Advisors and Investors Seize Opportunity and Mitigate Risk
BOSTON, March 18, 2013 — Putnam Investments, which has been actively helping financial advisors and investors recognize and adjust to today's dynamic investment era, is launching six new products designed to address several significant ongoing challenges for the marketplace, including volatility, the need for new sources of income, and adjusting to a changing tax environment.
In recent years, Putnam has advocated that advisors and their clients build greater versatility and active risk management into their portfolios, using a host of investment tools, including benchmark-measured and benchmark-independent investments, global diversification with embedded downside protection, strategic use of alternative asset classes, and new sources of income.
Building on the strong lineup of existing traditional and non-traditional offerings, Putnam will now be making the following six new products available for use in portfolio construction:
- Putnam Low Volatility Equity Fund (PLVEX) — seeks returns comparable to the U.S. equity market with lower volatility over a market cycle (generally at least three years or more).
- Putnam Strategic Volatility Equity Fund (PSVEX) — pursues better returns than stocks, but with volatility comparable to that of the market over a market cycle (generally at least three years or more).
- Putnam Global Dividend Fund (PGDEX) — seeks income and growth through a diversified portfolio of dividend-paying and value stocks from markets worldwide.
- Putnam Emerging Markets Income Fund (PEMWX) — pursues high current income and capital appreciation through diverse return opportunities across the emerging-market debt landscape.
- Putnam Short-Term Municipal Income Fund (PSMEX) — a national portfolio of short-term bonds seeking tax-free income with lower interest-rate sensitivity.
- Putnam Intermediate-Term Municipal Income Fund (PIMEX) — a portfolio of intermediate-term municipal bonds seeking high current income exempt from federal income tax.
"Given all that investors and advisors have experienced over the past five years, and the multitude of directions that markets could travel over the next generation, we see a critical need for the investment industry to think anew about ways to capture opportunity and mitigate risk," said Robert L. Reynolds, President and Chief Executive Officer, Putnam Investments.
Speaking at an industry conference last week, Reynolds cited the lower returns and increased volatility of core equity and bond markets over the past decade as the deepest sources of investors' angst. Moving forward, he stressed the need for modern investment thinking that could help investors navigate an era of constrained fixed-income returns and geopolitically-driven anxiety that often roils global equities.
"Advisors and their clients are becoming increasingly aware of the importance of seeking out new blends of traditional and alternative strategies to help ease the risk of any one particular asset class, investment style or approach, and to drive potentially more successful portfolio outcomes," Reynolds explained. "We think the mix of new Putnam product offerings will help investors tackle some key ongoing needs, including less volatile returns, income from diverse sources, and an ability to withstand rising taxes."
In February, Putnam announced the launch of an awareness-building campaign, entitled, "New Ways of Thinking," to provide insight on the challenges facing financial advisors and investors. Expected to continue throughout 2013, the effort seeks to encourage the marketplace to consider new ways of thinking about investing. These include taking a more targeted approach to desired levels of risk and return; pursuing the best ideas — wherever they may be; allocating risk — not just assets; and finding new drivers of return. In addition to new print, direct marketing, and online advertising, the firm will be developing content-rich thought leadership through business seminars, industry events, and white papers on an array of investment topics. These will include the integration of traditional and alternative products, the benefits of Sharpe ratio investing*, the relevance of active risk management, and more.
Recent History of Product Innovation at Putnam
Under Reynolds's leadership, Putnam has introduced a series of product innovations designed to help advisors and investors address a new investment era, including:
- Putnam Absolute Return Funds, the industry's first complete suite of absolute return products; designed to seek positive returns above inflation over a full market cycle regardless of market condition, with lower volatility. These funds are not designed to outperform stocks and bonds during strong market rallies.
- Putnam Equity Spectrum and Putnam Capital Spectrum Funds, which specialize in finding value in the stocks and bonds of undervalued, leveraged companies by investing across the entire capital structure.
- Putnam Dynamic Risk Allocation Fund, which employs a form of risk parity, which the firm has managed for a variety of sophisticated institutional investors for over a half-decade. The fund provides a different lens on investing by actively and regularly rebalancing varying sources of portfolio risk within and among multiple asset classes.
- Putnam Short Duration Income Fund, which strives for a higher rate of current income than is typical of short-term investments and has a greater focus on capital preservation than is usually associated with ultra-short bond funds, with the goal of maintaining liquidity.
- Putnam Retirement Income Lifestyle Funds, a suite of three income-oriented mutual funds, along with a powerful Retirement Income Tool (publicly available at www.putnam.com/retirementincome), which may be used in tandem to confront the unique set of complexities presented by the savings withdrawal phase of retirement.
- Putnam RetirementReady® Funds, the first lifecycle products that give fund managers control over all securities chosen for inclusion in a target-date product.
- Putnam Global Sector Funds, the first series of mutual funds to target stocks in sectors across the entire MSCI World Index (as well as Putnam Global Sector Fund, the first fund-of-sector-funds in the global equity space).
- Putnam Multi-Cap Core, Putnam Multi-Cap Value, and Putnam Multi-Cap Growth Funds, three multi-cap equity funds with exposure to the full array of U.S. stocks within the value, core/blend, and growth style universes.
About Putnam Investments
Founded in 1937, Putnam Investments is a leading global money management firm with over 75 years of investment experience. At the end of February 2013, Putnam had $133 billion in assets under management. Putnam has offices in Boston, London, Frankfurt, Amsterdam, Tokyo, Beijing, Singapore and Sydney. For more information, visit http://www.putnam.com.
Putnam mutual funds are distributed by Putnam Retail Management.
* Sharpe ratio is a measure of historical adjusted performance calculated by dividing the fund's return minus the risk free rate (ML 3mth T-Bill) by the standard deviation of the fund's return. The higher the ratio, the better the fund's return per unit of risk.
Consider these risks before investing: All funds have risks and you can lose money. Our allocation of assets among permitted asset categories may hurt performance. The use of derivatives involves additional risks, such as the potential inability to terminate or sell derivatives positions and the potential failure of the other party to the instrument to meet its obligations. Some of the funds may invest in international securities, which involves certain risks, such as currency fluctuations, economic instability, and political developments. Additional risks may be associated with emerging-market securities, including illiquidity and volatility. For all income funds, these risks apply: Funds that invest in bonds are subject to certain risks, including interest-rate risk, credit risk, and inflation risk. As interest rates rise, the prices of bonds fall. Long-term bonds are more exposed to interest-rate risk than short-term bonds. Unlike bonds, funds that invest in bonds have ongoing fees and expenses. Lower-rated bonds may offer higher yields in return for more risk. Funds that invest in government securities are not guaranteed. Mortgage-backed securities are subject to prepayment risk. For the Absolute Return 500 Fund and 700 Fund, these risks apply: REITs involve the risks of real estate investing, including declining property values. Commodities involve the risks of changes in market, political, regulatory, and natural conditions. For Putnam Emerging Markets Income Fund, this risk applies: The fund is considered non-diversified and can invest a greater portion of assets in securities of individual issuers than a diversified fund. As a result, changes in the market value of a single investment could cause greater fluctuations in share price than would occur in a more diversified fund. For the Absolute Return 500 Fund® and 700 Fund®, and the Spectrum Funds, these risks apply: Investments in small and/or midsize companies increase the risk of greater price fluctuations. Growth stocks may be more susceptible to earnings disappointments, and value stocks may fail to rebound. For the Spectrum Funds and Strategic Volatility Equity Fund, these risks apply: Our focus on leveraged companies and the funds' non-diversified status can increase the funds' vulnerability to other risks. Our use of short selling may increase these risks. For the Short-Term and Intermediate-Term Municipal Income Funds, these risks apply: Capital gains, if any, are taxable for federal and, in most cases, state purposes. For some investors, investment income may be subject to the federal alternative minimum tax. Income from federally tax-exempt funds may be subject to state and local taxes. For the Multi-Cap Funds these risks apply: The funds may invest a portion of their assets in small and/or midsize companies. Such investments increase the risk of greater price fluctuations. Growth stocks may be more susceptible to earnings disappointments, and value stocks may fail to rebound.
Request a prospectus, or a summary prospectus if available, from your financial representative or by calling Putnam at 1-800-225-1581. The prospectus includes investment objectives, risks, fees, expenses, and other information that you should read and consider carefully before investing.
Putnam Retail Management