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Putnam Fires Tech Manager Kirson

A field-trailing five-year span dooms the OTC & Emerging Growth manager.

You won't have Steve Kirson to kick around anymore, and neither will I.

In a move that many shareholders, including myself, will find overdue, Putnam Investments has dismissed portfolio manager Steve Kirson after a volatile and disappointing five-year term running the sagging

(POEGX)

Putnam OTC & Emerging Growth fund. His co-managers, Roland Gillis and Michael Mufson, will keep running the fund, which rode fat tech bets to outsize gains and staggering losses, making it a poster child for the

Nasdaq

bubble's destruction of fund investor assets.

"We made what we felt was the necessary decision to streamline the

fund's investment team," said Putnam Deputy Head of Investments Stephen Oristaglio in a prepared statement. "This decision was the culmination of a series of changes that Putnam has made to the fund. Among other things, those changes have improved the fund's risk management, deepened its research capability and improved the strengths of the overall investment team."

If the changes work out, this would easily be the fund world's most dramatic comeback story in recent memory. Over the past five years, the fund made huge bets on speculative tech companies. Over the past three years the fund has kept more than half its assets in the tech sector.

That worked out well during 1999's tech-led rally, when the fund rang up a 127% gain that beat 94% of its peers. But these big bets misfired too. The fund has trailed its average competitor in six of the past seven years, according to Chicago research house Morningstar.

Since the Nasdaq's peak in March 2000, the fund is down a stunning 86%, according to Baseline/Thomson Financial. That's more than 20 percentage points worse than the Nasdaq. Due to top investment losses and redemptions, the fund's assets have fallen from some $9.8 billion to $3.3 billion since 1999.

Despite the changes, even an optimist on his second drink would have a tough time feeling good about the fund. Mufson was helping Kirson manage the fund over the past five bleak years. And Gillis, who joined the team in September, also co-manages the

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(PVIIX)

Voyager II fund, which lost more than 30% in each of the past two years, trailing more than 75% of its peers each year.

Of course, Kirson is hardly the only tech or growth specialist to hit the bricks lately. On Wednesday struggling T. Rowe Price tech manager Chip Morris

pulled up stakes. And over the past two months Merrill Lynch's top tech manager (

Paul Meeks) and its most aggressive growth manager (

Jim McCall) threw in the towel too. These folks are just part of a

wave of tech and growth manager dismissals and departures.

In the spirit of full disclosure and self-deprecation, I bought shares of the fund when I worked at Putnam in 1995 and 1996. The fund has appeared in our junk-collecting Ima Loser Fund Club not

once but

twice.

And yes, through my own laziness and inertia, I still own every share I bought.

Ian McDonald writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback to

imcdonald@thestreet.com, but he cannot give specific financial advice.