Individuals and businesses looking for funds to buy for retirement or for their retirement savings vehicles may consider one of the oldest mutual fund companies, Putnam Investments, who offers a diverse choice of funds that can be used in almost any stage of retirement saving and investing. So, when you are thinking of investing for or during retirement, Putnam is a name to remember.
Before we cover which are the best Putnam funds for retirement, let's take a look at reasons why an investor would want to invest in their funds.
Who Is Putnam Investments and Why Buy Their Mutual Funds?
For a brief summary of Putnam's history and place in the mutual fund marketplace, you can start with their experience, which goes back 80 years, which predates most of the other large, vintage fund companies, such as Vanguard. Putnam has over $198 billion in assets under management, nearly 70 mutual funds, including 60 institutional strategies, across a diverse range of fund types.
Although it's not often recommended to buy all of your mutual funds from one company, Putnam has enough diversity in their fund lineup to build a complete portfolio. There's also enough variety and quality that most investors will not have to work too hard to find a set of high-quality funds in one fund company.
However, it's important to note that Putnam does not offer any true no-load mutual funds, at least not for everyday investors outside of a 401(k) plan. This means that Putnam primarily sells loaded funds, which are A shares (front load), B shares (back load) and C (shares level load).
Fortunately, Putnam offers R shares, which are their retirement share class, which is usually used for employer-sponsored retirement plans, such as 401(k) plans.
Top Putnam Funds for Retirement
The top Putnam funds for retirement, for both individuals and business, will most often be their R share class funds. This is because the R shares don't have sales charges and they're most commonly found in 401(k) plans. In this regard, these funds are most used for saving for retirement but they can also be used for investing while in retirement.
With that backdrop, and in no particular order, here are the best Putnam funds for individuals to use for retirement savings and for businesses to consider for their 401(k) plans:
- Putnam Multi-Cap Core Fund R (PMYZX): This "go anywhere" fund can invest in any size U.S. company (small-, mid- and large-cap stocks) in both the growth and value styles. Its diverse holdings make PMYZX a good core holding to use as a foundation to build a portfolio. Top holdings are mostly large companies like Microsoft (MSFT), Bank of America (BAC) and JPMorgan Chase (JPM). Long-term returns have matched or outpaced the S&P 500 Index. The expense ratio is average for the category at 1.25 percent.
- Putnam Income Fund R (PIFRX): Around since 1954, PIFRX is one of the oldest and one of the most consistent bond funds on the market today. Bond holdings average to be investment grade quality (medium market risk) and intermediate-term (5 to 10 years) in duration. The market risk for PIFRX is higher than average, as is the expense ratio of 1.10 percent, but returns have mostly been ahead of average bond funds, making the fund worth the risk and cost for some investors.
- Putnam Dynamic Asset Allocation Balanced Fund R (PAARX): If you're looking for a one-fund solution or a moderate-allocation core holding, PAARX is a fine choice. The asset allocation typically hovers around 60 percent stocks, 30 percent bonds and 10 percent cash and has historically matched or outperformed category averages for moderate allocation funds. The expense ratio is below average for the category at 1.21 percent.
- Putnam Global Technology R (PGTRX): This aggressive stock fund may not be a prudent choice for a conservative investor in retirement, but it's an outstanding choice for long-term investors saving for retirement. PGTRX is one of Putnam's highest rated funds. Historic returns have mostly been far ahead of average technology funds. The aggressive nature of the fund makes it appropriate for investors who don't mind volatility in exchange for higher potential returns in the long run. Expenses for PGTRX are 1.35 percent.
Overall, Putnam Investments is one of the top mutual fund companies in the world. While you won't find the highest performance or the lowest expense ratios in their fund lineup, there's plenty of top notch funds with reasonable expenses, especially if you focus on the funds with no sales charges, like the R share funds.
Disclaimer: The information on this site is provided for discussion purposes only, and should not be misconstrued as investment advice. Under no circumstances does this information represent a recommendation to buy or sell securities.