has announced that it is reducing the fees it charges investors and plans more disclosure on how much its portfolio managers are paid, the Boston Globe reports.
Collectively, the fee reductions would cost Putnam $35 million in lost revenue from its retail mutual fund business. Individually, the reductions will vary by investors depending on portfolios.
In the meantime, Putnam said it will cut its portion of the fee that investors pay when they buy a fund by half a percentage point, which would save a buyer $50 on a $10,000 purchase of an equity fund.
Yet, investors will still pay some of the sales charge to brokers and financial planners who advise customers on buying Putnam funds, which are 5 percent for certain stock funds.
Putnam also vowed to keep the expenses of all of its mutual funds below the average for their counterparts, which most already are. Expenses will also be capped at Sept. 30, 2003, the levels at which the six international funds in which the money managers traded excessively.
However, although the firm will begin disclosing more about how its 5,000 employees are invested in its funds, Putnam will not disclose how its portfolio managers are invested in the funds they run.
Putnam chief Ed Halderman
said privacy concerns would make it difficult to disclose managers' holdings but also since other employees,such as research analysts, contribute to fund performance, disclosing managers' holdings would not tell the whole story, he continued.
Finally, Putnam will begin disclosing fees in dollar amounts by each $1,000 invested, allowing investors to estimate how much they've paid in fees over any given period.
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