‘03 Outflow at Putnam Reaches $8.8 Billion

From Bloomberg News

Putnam Investments suffered its 28th consecutive month of withdrawals as investors pulled a net $731 million from its funds in September, Financial Research Corp. said Thursday.

Putnam, the fifth-biggest mutual fund firm, has had the biggest outflows of any fund company this year, with $8.8 billion withdrawn from its stock and bond funds, FRC said.

Janus Capital Group Inc., which also is implicated in the widening fund industry scandal, had the most redemptions last month as customers took out $2.7 billion more than they added.


The outflow at Putnam occurred before charges were filed by the Securities and Exchange Commission and Massachusetts securities regulators alleging that the firm allowed short-term trading in its funds that harmed long-term shareholders.

Putnam suffered another blow on Thursday when it was fired by Massachusetts’ state pension fund. That will take away $1.7 billion in assets.

Janus, based in Denver, was named in a Sept. 3 complaint from New York Atty. Gen. Eliot Spitzer against hedge fund Canary Capital Partners. Janus had a deal with the hedge fund that allowed it to make short-term trades that weren’t permitted for most investors and to siphon profits from other shareholders, Spitzer said.

Los Angeles-based American Funds, the third-biggest fund company, remained at the top of the sales charts in September. The firm brought in $6.6 billion and has added $41.7 billion this year -- more than one-quarter of the industry’s net inflow.