Putnam Offers Strategies; Retail
A press release entitled, "Putnam Investments Offers Investment Strategies for a World of Uncertainty," comments on "Exploring new opportunities at the short end of the yield curve." It says, "Money market funds have long been considered among the very safest investments. New regulations intended to make these investments more liquid also have had the effect of limiting their scope -- shrinking the universe of what is "safe". Moreover, the addition of mechanisms to allow redemption fees and "gates" -- limits on redemptions -- actually could make advance runs more likely if investors fear they will not be able to get their money out quickly in a crisis. Investors may find that their short-term investment vehicles potentially leave them at greater risk than they had thought." Putnam adds, "Advisors may want to `consider short-term investment vehicles that can exploit the space between money markets and ultra-short bond funds, which could offer both a robust capital preservation profile as well as real higher-yield potential." Putnam filed with the SEC to designate its Putnam Money Market Fund as Retail. The filing states, "In connection with the Securities and Exchange Commission's amendments to Rule 2a-7 under the Investment Company Act of 1940, as amended, which governs money market funds, Putnam Money Market Fund intends to operate as a "retail money market fund" as defined by Rule 2a-7. In anticipation of its operation as a retail money market fund, the fund has adopted policies and procedures reasonably designed to limit investments in the fund to accounts beneficially owned by natural persons and may redeem, at its option, all fund shares held by any investor who is not a natural person (an "involuntary redemption").... Effective on or about June 30, 2016, the fund will be closed to any new investor who is not a natural person." It continues, "The fund has also adopted policies and procedures that allow the fund, beginning on or about October 10, 2016, to impose liquidity fees and/or temporarily suspend all redemptions in the event that the fund's liquidity falls below required minimum levels. The fund will notify shareholders of the imposition or termination of any liquidity fee or redemption gate on the fund's website at putnam.com. Announcement of the imposition or termination of a liquidity fee or redemption gate will also be filed with the SEC on Form N-CR." Also, effective October 10, this disclosure will be added to the prospectus: "The fund may not achieve its goal, and is not intended to be a complete investment program. You could lose money by investing in the fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. The fund may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the fund’s liquidity falls below certain required thresholds because of market conditions or other factors. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund's sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time."
