By Dylan Emery US fund management house Putnam Investments has significantly beefed up its Europe...
By Dylan Emery
US fund management house Putnam Investments has significantly beefed up its European presence with the addition of six funds to its European range.
The addition of one growth, two value, two core and a fixed interest product, including two small cap and a healthcare vehicle, brings the total sold out of Dublin to 19.
The company is lengthening its value range with the Global Value Equity and the US Small Cap Value Equity funds. There is also a growth-orientated health science fund.
Two conservative core funds have been added: a global small cap and the Putnam Research Fund, a 'best ideas' portfolio benchmarked against the S&P 500 and investing in stocks recommended by the 45 analysts on Putnam's global equity research team.
This has no fund manager as such, with most analysts getting to choose one or two of their best stocks and having to present their case to their peers.
The Global Bond Fund invests in government bonds throughout the world.
All the launches are clones of US domestic funds and are run from North America. There is some demand from investors for European-specific funds: a European Value fund or a European Growth fund, for example, but Putnam said it would have to be sure that it would get a profitable amount under management before making the move.
The size of the European range of funds at the moment varies from $50m to $500m.
Putnam has been evangelising the cause of a value/growth portfolio diversification method. With the launch of these new funds, it is trying to persuade investors of the strength of non-tech small caps, which Putnam thinks are still at the beginning of a bull market.
Tom Reilly, Putnam's head of Europe, said: "An opportunity like this only comes along once every five or 10 years."
Putnam will continue to sell its range into the UK, Austria, France, Germany and Switzerland, typically via institutional investors and fund of funds managers.
Putnam is not selling into Spain because of listing difficulties.
Similarly, Italy is not a target market. Instead, offshore centres like Guernsey and Jersey are the main targets. The new launches have been added to the Putnam World Trust II in Dublin, which is seeking a Ucits passport. Until then, the new funds are only available in Ireland.
Putnam managing director, Jeffrey Miller, said: "Putnam is known for its broad product line, which enables investors to create portfolios that are diversified across investment styles.
"With Putnam funds, investors can help ensure that their investment portfolios are ready for all types of markets what Putnam refers to as being 'built for balance'."
This European expansion comes despite profitability problems: the company has seen assets under management fall from $422.2bn last March to $343.5bn at the end of February.
According to Reilly, this has had little impact on the European plan, as the cost involved in launching clones to a new market is significantly less than creating new products.
As a result, the European operation became a profit centre well before its target date and there have been no lay-offs.
He said: "The cyclical effect has slowed us down a little but we are still on the same trajectory."
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