Putnam, Janus See More Withdrawals in May

Putnam Investments and Janus Capital Group Inc. suffered combined customer withdrawals of $3.85 billion in May, marking three years of outflows for two of the biggest U.S. mutual fund companies, Financial Research Corp. said Thursday.

Investors pulled a net $2.33 billion from stock and bond funds managed by Boston-based Putnam, a unit of Marsh & McLennan Cos., said Financial Research, an industry research firm. Denver-based Janus had $1.52 billion in net redemptions.

Putnam and Janus suffered from poor performance during the three-year bear market that began in 2000. Outflows increased at the end of last year as regulators accused dozens of firms, including Putnam and Janus, of allowing excessive fund trading that reduced returns for buy-and-hold investors.

So far this year, investors have pulled $12.7 billion from Putnam, the most of any fund firm, and $9 billion from Janus, the second-largest amount, Boston-based Financial Research said. Putnam has $119 billion in stock and bond fund assets; Janus has $77 billion.

In May, only seven of the 25 largest fund companies had net cash inflows, as a weak stock market kept many investors sidelined. Overall, domestic stock funds had a net outflow of $449 million in May, compared with a net inflow of $22 billion in April, Financial Research said.

American Funds, overseen by Capital Group Cos. in Los Angeles, continued to lead the industry in net fund purchases. Investors added a net $5.4 billion to the company’s funds, Financial Research said. American Funds are marketed as conservative portfolios that focus on high-quality stocks worldwide.

Vanguard Group of Valley Forge, Pa., ranked second in May net inflows, at $581 million.

Financial Research’s data are estimates based on industry reports. The funds’ trade group, the Investment Company Institute, will release total fund statistics for May based on actual reports from companies later this month.

Separately Thursday, Los Angeles-based First Pacific Advisors said it would close its FPA Capital stock fund to new investors as of July 9. Robert Rodriguez, manager of the $1.5-billion fund, said it was increasingly difficult to find appealing investments. The fund, which is up 7.7% this year, has more than 35% of assets in cash holdings.