Two More Veterans Out at Putnam

Managers at the firm's Vista and OTC and Emerging Growth funds are sent packing.
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As part of its ongoing effort to revamp the management of its ailing growth funds, Putnam has dismissed two more of its veteran mid-cap managers.

Michael Mufson, who helped manage the $2 billion


OTC and Emerging Growth fund, and Dana Clark, co-manager of the $3.7 billion


Vista fund, will leave their positions in early July. Mufson has been with Putnam since 1993, Clark since 1987.

Growth funds have suffered along with the bear market -- losing some 20% annually over the past three years -- but Putnam's funds have nearly required hospice care. In particular, the OTC and Emerging Growth fund ranks in the very bottom of its category, according to Morningstar. The fund lost an annualized 38.2% in the past three years, 14.7% annualized over the past five years. Vista performed somewhat better, losing 24% and 4.5% in the same period, placing it in the bottom quarter of its category.

Putnam began shaking up management at its large-cap growth funds last year in an effort to stem massive withdrawals. But while resulting management changes (under the leadership of Brian O'Toole, who was hired from Citigroup Asset Management in June 2002) have given those funds a more conservative bent, it's far too soon to tell if the mid-cap funds will be steered the same way.

Justin Scott moved from Putnam's core team to head its mid-cap growth and specialty growth teams in March of this year. "He's not wasting too much time in getting new people in there," says Morningstar analyst Dan McNeela. "This is just the first of the changes he's making to these groups."

Roland Gillis leads the OTC and Emerging Growth fund, and Eric Wetlaufer the Vista fund. In addition, Scott has put himself on the management team of the Vista fund. "There are a lot of new voices to be heard from on Vista," McNeela says. "That fund will have the most direct impact from all the management changes."

Meanwhile, Putnam is still tweaking its large-cap group. It tapped Walton Pearson and David Santos to assist lead manager O'Toole with the $17.6 billion


Voyager fund. Voyager has seen a steady stream of managers come and go in the past few years.

But while Putnam struggles to get its management team in place, it's still unclear how these changes will affect the funds' investment objectives and styles. "All of this is a step in the right direction," McNeela says. "But it's too early to say if it will solve any problems. Right now it's just a change in personnel -- which isn't nearly enough to say 'OK, now everything's fine.'"

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