This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Putnam Plans New Fee

In a bid to regain some investor trust, Putnam Investment Management said Monday that it will impose a redemption fee on short-term trades in all of its retail mutual funds.

Beginning in the first quarter of 2004, Putnam will impose a 2% fee on any fund shares in retail accounts that are exchanged or sold within five days of purchase. The fee also will apply to redemptions on all Putnam-administered 401(k) plans.

The fee won't apply to money market, closed-end or variable annuity funds.

Putnam, a unit of insurer Marsh & McLennan (MMC - Get Report), was one of the first mutual fund companies sullied by the sweeping investigation launched by New York State Attorney General Eliot Spitzer and the Securities and Exchange Commission.

On Oct. 28, Putnam settled with the SEC, which found that since 1998 at least six Putnam investment managers engaged in excessive short-term trading of Putnam funds in their personal accounts. The SEC noted gross negligence on the part of Putnam for failing to take adequate steps in curtailing this behavior, and has prescribed a list of remedial actions the firm must take.

At the same time, the Massachusetts Secretary of the Commonwealth launched civil charges alleging violations of the state's securities law antifraud provisions, stating that Putnam permitted fund managers to engage in activities contrary to Putnam's stated policy against market-timing and short-term trading. Putnam is also alleged to have breached its fiduciary duty to Putnam fund shareholders by allowing such employee conduct.

Redemption fees are implemented by mutual funds for the sole purpose of discouraging short-term trades, which skim profit off the top of the fund and away from long-term investors. Unlike back-end loads -- which are sales fees paid when fund shares are sold, rather than purchased -- redemption fees are paid directly to the funds to offset the transaction expenses generated by the short-term trading.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
MMC $63.15 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs