Putnam Investments Absolute Return Funds Top $2 Billion

Putnam Investments announced today that its suite of target Absolute Return Funds recently passed $2 billion in assets, continuing a rapid pace of marketplace interest — across all four funds — including over $1 billion in sales within the last six months.

Putnam Absolute Return Funds first topped the $1 billion mark in total assets in December 2009, less than a year after their January 2009 launch. The firm has seen the entire suite increasingly embraced by investors and financial advisors, with over 7,600 advisors from over 460 broker-dealers having made use of the Putnam products in portfolio construction. Putnam Absolute Return Funds pursue positive real returns above inflation over a period of 3-years with less volatility than traditional mutual funds.

“The continued sales success of our target Absolute Return Funds confirms that these strategies have great appeal for investors in addressing an array of investment concerns, including market volatility, need for more dependable streams of income, potential for inflation and longevity risk,” said Putnam Investments President and Chief Executive Officer Robert L. Reynolds. “In particular, the funds have demonstrated their ability to help manage volatility in even the most unpredictable markets, providing investors with a form of cushioning designed to help stabilize their portfolios and create a more reliable sequence of returns.”

Putnam today also released results from a survey of 160 veteran independent financial advisors and brokers from banks and wirehouses nationwide who have sold Putnam Absolute Return Funds. The survey respondents anticipate that the use of absolute return funds industry-wide will surpass that of any other category over the coming year, with four in five (82%) expecting their use to increase “some” or “a lot.”

These forecasts reflect what the survey respondents described as their two biggest concerns with today’s investment climate: market volatility and tax policy changes. Eighty-six percent said they were “somewhat” or “very” concerned about each of these risks. Nine in 10 respondents (91%) use absolute return strategies for volatility control more than any other purpose.

A reflection of the growing use of the entire Putnam product suite in portfolio construction, three in five respondents (59%) already use two or more Putnam Absolute Return Funds; one-third (33%) use them as a core holding in their clients’ portfolios, and three-fifths (62%) use them as a satellite holding.

“Many investors were badly scarred by the market declines of 2008—09 and have remained on the sidelines in the face of continued volatility. Absolute return strategies can provide a way for individuals to re-invest in the markets, which is important if they are to generate the growth they need to achieve long-term goals such as saving for retirement or a college education,” said Jeffrey R. Carney, Putnam Investments Head of Global Marketing, Products and Retirement.

“Putnam Absolute Return Funds are serving as a tool for advisors to seek to diversify risk — providing them with an ability to mix more traditional relative return investment strategies with absolute return strategies for their clients,” Carney explained. “We would envision the Absolute Return Funds increasingly becoming a central, stabilizing presence in investors’ portfolios to address market environmental factors that put investment objectives at risk.”

Putnam offers four target Absolute Return Funds:

Putnam Absolute Return 100 Fund (Class A: PARTX) seeks to outperform inflation by 1% over periods of three years or more net of all fund expenses as measured by T-bills, and can be an alternative to short-term securities
Putnam Absolute Return 300 Fund (Class A: PTRNX) seeks to outperform inflation by 3% over periods of three years or more net of all fund expenses as measured by T-bills, and can be an alternative to bond funds
Putnam Absolute Return 500 Fund (Class A: PJMDX) seeks to outperform inflation by 5% over periods of three years or more net of all fund expenses as measured by T-bills, and can be an alternative to balanced funds
Putnam Absolute Return 700 Fund (Class A: PDMAX) seeks to outperform inflation by 7% over periods of three years or more net of all fund expenses as measured by T-bills, and can be an alternative to stock funds

Putnam Absolute Return Funds have employed diverse strategies to help manage risk, including investments across sectors; short-maturity fixed-income securities; derivatives to hedge against market declines; Treasury futures contracts to reduce interest-rate risk; and cash positions to stabilize fund performance.

Putnam RetirementReady® Funds, the firm’s suite of 10 target-date/lifecycle retirement funds, recently added target Absolute Return Funds* to its mix of underlying investments. RetirementReady Funds became the only suite of lifecycle funds to integrate absolute return strategies, which seek positive returns over time with less volatility than more traditional mutual funds. Employed in retirement portfolios, absolute return strategies are intended to pursue positive returns in up and down markets, to protect against the harmful effects of adverse investment returns, and to reduce volatility, particularly for investors in or near retirement.

Putnam Advisor/Broker Survey on Absolute Return Strategies

The findings are based on a telephone survey of 160 financial advisors and brokers from banks and wirehouses conducted for Putnam Investments by Brightwork Partners from February 4 to 25, 2010.

About Putnam Investments

Founded in 1937, Putnam Investments is a leading global money management firm with over 70 years of investment experience. The firm was recently ranked #1 out of 61 fund families based on its funds’ performance during 2009 in a Lipper/Barron’s Fund Families Survey and named “Mutual Fund Manager of the Year” by Institutional Investor. At the end of May 2010, Putnam had $112 billion in assets under management. Putnam has offices in Boston, London, Frankfurt, Amsterdam, Tokyo, Singapore, and Sydney. For more information, visit putnam.com.

Putnam mutual funds are distributed by Putnam Retail Management.

Putnam’s target Absolute Return Funds are not intended to outperform stocks and bonds during strong market rallies.

Putnam Michigan Tax Exempt Class B Shares (NASDAQ:PMEBX)
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