Putnam Investments announced a new suite of income-oriented funds designed to help advisors better serve their clients’ retirement issues. The new offering will integrate absolute return funds that seek positive returns over a three-year period with less volatility than similar, traditional asset classes.
The new funds will be accompanied by a planning tool to create customized income strategies designed to address changing financial needs throughout retirement, according to Jeff Carney, Head of Product and Marketing at Putnam. Putnam’s retirement income solutions are designed to focus on the “drawdown” phase, when investors withdraw the assets they have accumulate over a lifetime, Carney says. As such, these funds will complement Putnam’s RetirementReady funds, a 10-fund suite of target-date/lifecycle funds, although they also can be used as a stand-alone solution. “We took a step back and looked at the wealth accumulation in lifecycle funds and 401(k) plans, and we realized that investors need to be able to take advantage of the up markets while also avoiding the down markets,” Carney said.
The funds and the planning tool will allow for risk levels and withdrawal rates to be customized and regularly updated to meet individuals' needs and evolving circumstances. Subject to regulatory review, the funds are expected to be available by midyear. Carney said the fees for the funds and the tool would be “very competitive,” but declined to elaborate with details. Overall, he said it would bring “institutional capabilities to retail investors.”
According to a press release from the firm, the funds will be managed by Jeffrey L. Knight, CFA, Putnam’s Head of Global Asset Allocation; Robert J. Kea, CFA, a 23-year industry veteran who joined Putnam in 1988; and Robert J. Schoen, a 22-year industry veteran who joined Putnam in 1997. The three funds are expected to be placed in Lipper’s new Retirement Income category and in Morningstar’s Retirement Income category.
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