and his team are reorganizing and rebranding his original Putnam
flagship products. And they're also bringing an institutional Putnam specialty to the 40-Act space.
| Carlo Forcione|
Director of Product Strategy and Development
The four Putnam Absolute Return
funds are all changing, Putnam CEO Reynolds confirms today, and so are a pair of fixed income funds. Yet Putnam is standing by the absolute return space and will have two absolute return funds going forward.
"We continue to have a very high and strong level of conviction and confidence in our absolute return strategies," Carlo Forcione
, director of product strategy and development at Putnam, tells MFWire
Of the four Putnam Absolute Return Funds, one will transform, one will be rebranded, and two will be merged and rebranded. The Putnam Absolute Return 100 Fund
(AR 100 for short, which indicates its target return in bps above Treasuries) will become the Putnam Short Duration Bond Fund
and change strategy accordingly. The Putnam Absolute Return 300 Fund
will be renamed the Putnam Fixed Income Absolute Return Fund
while sticking with its strategy. And the Putnam Absolute Return 500 Fund
and the Putnam Absolute Return 700 Fund
will combine and become the Putnam Multi-Asset Absolute Return Fund
, which will stick with the more agressive AR 700 fund's strategy while sticking with the lower fees of the AR 500 fund. AR 100 has nearly $200 million in AUM, AR 300 has more than $450 million, and AR 500 and 700 combined have more than $2 billion.
Separately, the Putnam American Government Income Fund
is merging into the Putnam U.S. Government Income Fund
, which in turn is transforming into the Putnam Mortgage Securities Fund
. The combined fund will have more than $1 billion in AUM. Putnam already has about $1.3 billion in standalone mortgage-backed securities strategies for institutional investors and about $15 billion in mortgage-backed securities sleeves within asset allocation and multi-sector funds.
On the absolute return side, the shift away from specific return targets in the funds' names is a "reflection of overall evolution" in the liquid alternative marketplace, Forcione says.
"The product category has matured greatly. Our clients made it clear that they're much less focused on the target return," Forcione says. "They're much more laser-focused on the volatility management component ... and adding an additional layer of diversification via lower correlation return stream."
"They're not caught up in naming conventions," Forcione adds.
On the fixed income side, Forcione says, Putnam is "being responsive to client demand" for mortgage-backed securities investing and for short-term bond investing. He describes mortgage-backed securities investing as a "core investing capability for Putnam."
Putnam rolled out
the Absolute Return funds in January 2009, less than a year after Reynolds took over the firm. He made
a big push around them
in 2009 and 2010
, and again in 2012 at the funds' three-year anniversary
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