Putnam to combine absolute-return funds with target date funds

Putnam Investments expects to deploy its absolute-return funds within target date retirement funds — a strategy slated for launch this fall. The funds will be used in Putnam’s Retirement Ready series of life cycle funds. Putnam launched a series of absolute-return funds in January that were created to bring an annualized total return of 1%, 3%, 5% or 7% above the returns of Treasury bonds over a period of three or more years. In addition, they are designed to deliver a positive return even in plunging markets. To be sure, the dicey markets of the last several months have prompted investors to re-evaluate how they should invest. “When markets go up consistently over time, people forget that [they] can go down, and they buy relative-return funds,” said Jeffrey Carney, head of global marketing, products and retirement at Putnam in Boston. The absolute-return funds have garnered nearly $250 million in assets since the Jan. 13 launch.