Understanding Putnam Investments and Its Investment Approach

Putnam Investments is a global investment management firm that has been around since 1937. It's a subsidiary of Great-West Lifeco, a Canadian insurance company.

Putnam Investments is known for its active management approach, which involves a team of experienced investment professionals who actively manage portfolios to try to beat the market. This approach is in contrast to passive management, which involves tracking a specific index or market.

Putnam Investments offers a wide range of investment products and services, including mutual funds, exchange-traded funds (ETFs), and institutional investment products.

Putnam Investments has a rich history that spans over 80 years. In 1937, the company was established in Boston, Massachusetts.

In 2007, Great-West Lifeco acquired Putnam Investments for approximately $3.9 billion, marking a significant expansion into the US market. This acquisition was motivated by Great-West Lifeco's decision to expand its presence in the US.

Putnam's former chief executive, Lasser, agreed to pay $75,000 as a settlement against accusations of failing to disclose preferred marketing agreements. Two former managing directors also agreed to pay a $400,000 civil penalty and face a one-year suspension from investment advisory roles.

In 2008, Robert L. Reynolds took over as president and CEO, implementing a restructuring plan that included merging equity funds, basing compensation on performance, and laying off 47 workers.

The year 2000 marked the beginning of a gradual asset value decline that took Putnam's asset value from $400 billion to $192 billion.

In 2003, the Securities and Exchange Commission (SEC) and the Massachusetts Secretary of State filed separate civil complaints against Putnam, alleging that the company's portfolio managers had engaged in rapid trading of some of Putnam's mutual funds.

Lasser resigned a few days later, and Charles "Ed" Haldeman, director of one of the company's investment divisions, was promoted to chief executive.

Between 2003 and 2007, Haldeman initiated broad changes within the company, creating a new set of guiding principles and reducing the company's staff by 11 percent, including eliminating 25 of the highest-paid executive positions.

He also reduced senior management compensation to half of what it was in 2000 and adjusted portfolio managers' compensation to encourage more long-term thinking and planning.

Putnam paid $110 million in fines and restitution to settle charges with the state and federal regulators in early 2004.

Over six months, investors withdrew at least $28 billion from Putnam's stock and bond funds after allegations of improper trading became public.

By May 2004, 70 civil actions had been filed against Putnam for allegedly engaging in improper trading.

In 2005, Putnam paid $40 million to settle charges made in 2003 that it "did not tell fund investors or directors about paying" brokerage firms for recommending its mutual funds to clients.

In 2006, 48 percent of Putnam's mutual funds scored in the top 50 percent compared with funds in their peer group, an increase of 8 percent from two years prior.

In 2007, Great-West Lifeco acquired Putnam Investments for approximately $3.9 billion, expanding into the US market. This acquisition was motivated by Great-West Lifeco's 2005 decision to expand its presence in the United States.

Putnam received the 2007 Optimas Award for Ethical Practice in recognition of its efforts to create a more ethical company culture. This award came just a few months after the acquisition.

Two former managing directors agreed to pay a $400,000 civil penalty each to settle charges of improper trading of mutual fund shares. They also agreed to a one-year suspension from any role as an investment advisor.

Lasser, Putnam's former chief executive, agreed to pay $75,000 as a settlement against accusations that he failed to disclose the use of fund assets to pay brokerage firms for preferred marketing agreements.

In 2008, Robert L. Reynolds took over as president and chief executive officer of Putnam Investments, replacing Haldeman. Reynolds aimed to restructure the company by merging several equity funds and laying off 47 workers.

Putnam directors voted to liquidate its $12.3 billion Putnam Prime Money Market Fund in response to significant redemption pressure. The decision was made to protect the remaining investors from potential losses.

Here is a timeline of key events during this period:

At Putnam Investments, the investment strategy is focused on growth stocks, which are common stocks issued by companies with earnings expected to grow faster than similar firms. Putnam's strategy emphasizes investing in small U.S. companies.

Putnam invests at least 80% of the strategy's net assets in companies similar in size to those in the Russell 2000 Growth Index. This means you can expect a diverse portfolio with a mix of growth stocks from various small U.S. companies.

When deciding which investments to buy or sell, Putnam considers factors such as a company's valuation, financial strength, growth potential, competitive position in its industry, projected future earnings, cash flows, and dividends.

Putnam Investments is a well-established financial services company with a rich history. It was founded in 1937 by George Putnam.

Putnam Investments has a global presence, with offices in the US, Europe, and Asia. This allows the company to serve clients from diverse regions.

The company offers a wide range of investment products and services, including mutual funds, exchange-traded funds, and institutional portfolios.

At Putnam Investments, the team takes a thoughtful approach to selecting US stocks, blending investment themes with deep fundamental research. This top-down, bottom-up strategy allows them to analyze global trends and identify potential solutions to problems that could drive sustained growth for businesses.

The team's focus on themes that can drive sustained growth over a multi-year time horizon is a key part of their philosophy. They're not just looking for short-term gains, but rather long-term potential.

By analyzing global trends and problems, the team can identify areas where businesses can thrive and grow. This approach requires a deep understanding of the market and the ability to think critically about the future.

Putnam Investments' thoughtful and research-driven approach sets them apart from other investment firms. Their commitment to understanding the market and identifying long-term potential is a key part of their success.

Putnam Investments believes value's recent outperformance is a short-term trend. This means they think it's only a temporary advantage.

Growth investing is expected to continue outperforming in the long term, according to Putnam Investments.

Putnam Investments is one of the oldest names in the mutual fund industry, with a history that dates back to its founding.

Putnam Investments is known for its top-down, bottom-up approach to selecting US stocks, which involves blending investment themes with deep fundamental research.

The company's investment strategy focuses on identifying global trends, problems, and potential solutions to drive sustained growth for businesses over a multi-year time horizon.

Putnam Investments has a variety of investment options, including the Putnam U.S. Small Cap Growth Equity fund, which invests mainly in common stocks of small U.S. companies with a focus on growth stocks.

The investment minimum for the Putnam U.S. Small Cap Growth Equity fund is $100,000.

Here are some key factors that Putnam Investments considers when deciding whether to buy or sell investments:

In 2007, Marsh & McLennan Companies, the world's largest insurance brokerage, decided to solicit bids for its Putnam Investments mutual fund unit after managed assets at Putnam dropped to their lowest level in more than nine years.

The sale of Putnam Investments to the Power Corporation of Canada was finalized, allowing Power to establish a foothold in the U.S. mutual fund business.

Putnam Investments was also involved in a notable incident in 2009, when the company froze a $12.3 billion money market fund, and clients received an equal number of shares in a fund run by Federated Investors.