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 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.

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
AC $30.00 -0.13%
MMC $62.81 0.93%
AAPL $95.03 -2.90%
FB $117.52 7.90%
GOOG $691.20 -2.10%


Chart of I:DJI
DOW 17,830.76 -210.79 -1.17%
S&P 500 2,075.81 -19.34 -0.92%
NASDAQ 4,805.2910 -57.85 -1.19%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs