When Putnam Investments announced that it was cutting its retail fund lineup from 66 to 55, it was not very surprising to industry analysts given the market conditions over the past two years. What was somewhat surprising, however, was which funds the firm decided to get rid of. Instead of closing large funds with poor performance records, Putnam proposed to merge small, overlapping funds and new funds that never really had an opportunity to prove themselves.

"Their consolidation and elimination of funds is not a surprising thing to me, nor should it be surprising to anyone," said Mark Lane, an equities analyst who covers Putnam's parent company Marsh & McLennan for William Blair & Co. of Chicago. "We've just come through an extremely strong upturn, through the end of 1999, of the growth equity sector, an area where Putnam has had a lot of success. I think it's a very natural process to go through."

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