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
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

Putnam Plans Fund-Fee Cuts

Putnam Investments, weary of serving as an example of all that's gone awry in the mutual fund industry, said Tuesday it will cut costs and provide investors with more user-friendly documentation regarding its fee structure.

The sixth-largest fund company, a unit of insurance giant Marsh & McLennan, voluntarily reduced fees so that all of its funds will be below their category average.

"Putnam is determined to earn back the trust and confidence of the marketplace," Putnam Chief Executive Ed Haldeman said in a statement. The firm now manages $161.5 billion in assets, a result of steady outflows in the past four months. Assets dropped 12% in November, and 1% in December -- although given the market's rise last month, net outflows were more like $6 billion, according to AMG Data.

Putnam has been battling securities fraud charges since October. In November, the firm fired its chief executive and later dismissed 15 other employees, including six portfolio managers, for market timing.

Putnam has also instituted a raft of new controls aimed at protecting shareholders from the frequent in-and-out trading that allows market timers to skim fund profits at the expense of longer-term investors. The firm has already instituted a 2% redemption fee on all sales within five days of purchase.

In addition to bringing expense ratios on all funds to the industry average or below, Putnam will reduce the front-end sales charge on all class A shares. The reduction will apply to equity fund purchases below $500,000 and fixed income fund purchases below $250,000.

For the six Putnam international and global funds that were named in the market timing charges, the firm will cap the expense ratios at Sept. 30, 2003 levels. This should compensate for the reduced asset levels that occurred after that date as a result of the market timing.

Putnam will also reduce the maximum allowable purchase of B class shares on any one day from $250,000 to less than $100,000 per trade -- a measure in line with current regulatory recommendations.

The firm also said it will improve its disclosure and explanation about fund fees, fund risk, portfolio manager compensation, employee ownership of Putnam funds and sales charge discounts.

While Putnam's efforts toward fee reduction were entirely voluntary, New York State Attorney General Eliot Spitzer has made it clear that he will push for greater regulation in this area. As part of its settlement with Spitzer on similar charges, Alliance Capital agreed to lower its mutual fund fees.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 +2.54 0.14%
NASDAQ 4,095.5160 +9.2910 0.23%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs