Putnam, Fidelity Hit With Large Withdrawals

Putnam Investments, one of the first companies to be mixed up in the mutual fund trading scandal, continues to pay the price for its involvement, as investors yanked another $1.8 billion in September, bringing its net outflows year to date to out $15 billion, Financial News reports. Putnam is now the ninth-largest U.S. mutual fund firm.

Fidelity was hit with the second-highest new withdrawals in September, seeing $881 million walk out the door during the month. Year-to-date, Fidelity has taken in a scant $3.4 billion in net flows.

Meanwhile, Vanguard, Fidelity's No.1 rival, is prospering, as it scored $34 billion in new money in just the first nine months of this year. Capital Group, another rival of Fidelity, has taken in $61 billion in new money.

The three firms are in the midst of a fee war, which experts believe may "freeze" out other, smaller firms.