Putnam Mutual Funds

Putnam Investments has a heritage that dates back to the 1830's.  That's quite a history, even relative to other mutual fund giants we've reviewed.  Putnam mutual funds seem to reflect the balance you would expect with such a long history.  They produce an excellent mix of both stock and bond funds.

Putnam Family of Funds

You can purchase Putnam funds through Putnam Investments, which serves both the institutional and individual investor.  An interesting part of the company's history dates back to 1830, when Supreme Court Justice Samuel Putnam helped to establish the legal foundation around which the professional money management services industry exists.

In 1937, George Putnam founded the George Putnam Fund of Boston, which claims to be one of the first funds to offer investors a balance of stock and bonds for their portfolio.  Today, that company has grown to manage over $127 billion in assets and over five million shareholder accounts.

Putnam offers investors a wide range of services including over 79 different mutual funds, Roth and Traditional IRAs, professional management of over 900 different 401k plans and 529 college savings plans.  The company boasts nearly 3,600 employees with offices in Boston, London, and Tokyo.

Putnam Fee Structures and Returns

Morningstar ratings indicate the expense ratio for domestic stock funds (1.65%) and international stocks (1.85%) are Above Average.  The expense ratios for municipal bond funds (1.05%) and taxable bonds (1.22%) are Average.  Putnam shows a relatively balanced mix of stock and bond funds, with around 50% of assets in stocks and 46% in bonds.

The minimum investment to buy into a Putnam fund is only $500.  This is among the lowest of the families reviewed.  Unfortunately, only around 11% of the Putnam funds are no-load mutual funds.  Typical front-loads are in the 5.25% range.  As of the end of April 2011, the average return on a Putnam fund was 3.60% over the last five years.  To put things into perspective, Fidelity funds had averaged around 4.57% over the same time span.

Top Rated Putnam Mutual Funds

When we looked at the top rated Putnam mutual funds, we saw things that we liked and some things that we didn't like.  On the positive side, the annual returns over the last five years for all these funds beat the S&P 500 index or their fund category.  On the downside, all three of the funds have a load of 3.75% or higher.  Taking all that into consideration, here is a list of the top performing mutual funds from Putnam as of May 2011:.

• Putnam US Government Income A (PGSIX) - with $1.5 billion in assets, this intermediate bond fund's focus is on securities with an average credit rating of AAA.  The larger holdings of this fund include Ginnie Mae and U.S. Treasury bonds.  The fund has a front load of 4.00%, and requires a minimum investment of $500.  The expense ratio for the fund is 0.86%, and the average return over the last five years was 8.07%.  (May 2011)
• Putnam American Government Income A (PAGVX) - with just over $710 million in assets, investments are focused on intermediate government bonds with a rating of AAA.  Top holdings for this fund include U.S. Treasury Bills, Ginnie Mae bonds, as well as Fannie Mae bonds.  The fund has a front load of 4.00%, and requires a minimum investment of $500. The expense ratio sits at 0.83%, and the fund's average return over the last five years was 7.70%.  (May 2011)\
• Putnam Voyager A (PVOYX) - with just over $5 billion in assets, this large growth stock fund's emphasis is on the technology sector of the economy.  Top three holdings include Apple, Inc., Hewlett-Packard Company, and Qualcomm, Inc.  The fund requires a minimum investment of $500, and carries a front load of 5.75%.  The expense ratio for the fund is 1.26%, and the return over the last five years was 7.22%.  (May 2011)

About the Author - Putnam Mutual Funds

Copyright © 2005 - 2011 Money-Zine.com

Mutual Fund Resources on the Web