Despite solid investment performance, Putnam suffered more withdrawals than other fund providers implicated by the scandal thats rocked the industry over the past year.
Strong investment performances performance has not stopped shareholders from withdrawing a total of $83 billion from their accounts at Putnam since the companys regulatory troubles initially flared up in September, The Boston Globe reports. The firms overall assets under management now total a mere $210 billion, down from nearly $300 billion a year ago.
Putnams troubles with defecting shareholders have steadily worsened since regulators charged a group if its portfolio managers with improper market-timing activities. Recent investment performance success stories, like the George Putnam fund outpacing the Dow Jones industrial average by four percentage points this year, have failed to staunch a disparaging level of withdrawal activity. Approximately 13 out of 29 Putnam funds with at least $1 billion of assets were ranked above average by Morningstar.
To be sure, other mutual fund companies that had angered investors by running afoul of regulators during the past year have also suffered massive investor defections. But none of the other leading mutual fund providers losses stemming from involvement in the widespread investment scandals have proportionately measured up to outflows at Putnam.
Experts believe that Putnam hemorrhaged more than other mutual fund providers because it mainly sells through intermediaries, brokers and financial advisers, who struggle to win the confidence of their clients.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.