Putnam Investments has launched five new transparent, actively managed exchange traded funds that begin trading today on the New York Stock Exchange. The new ETFs nearly double the firm’s suite of actively managed ETF offerings.
Three of the funds are fixed income ETF portfolios that build upon the longtime capabilities and experience of the Putnam Fixed Income team. The other two are non-U.S. equity strategies sub-advised by Putnam affiliate PanAgora Asset Management.
“These new ETFs have been a labor of love for us,” said Carlo Forcione, head of product and strategy at Putnam Investments. “We asked ourselves, where are we seeing needs? It’s very clear that clients are demanding the best investment capabilities across all investment vehicles and product wrappers.”
Forcione added: “When you think about the strategies we’re offering, these are areas of consistent, evergreen need for our clients.”
The five new ETFs, which employ an environmental, social, and governance (ESG) focus, are:
- The Putnam ESG Core Bond ETF (NYSE Arca: PCRB), which seeks high current income consistent with what Putnam believes is a prudent risk by investing mainly in a diversified portfolio of investment-grade fixed income securities, with a focus on companies or issuers that Putnam believes meet relevant ESG criteria. The fund invests mainly in investment-grade bonds of governments and private companies located in the U.S. with intermediate- to long-term maturities (three years or longer).
- The Putnam ESG High Yield ETF (NYSE Arca: PHYD), which seeks high current income, with capital growth as a secondary goal when consistent with achieving high current income. The fund invests mainly in bonds that are below investment grade in quality (sometimes referred to as “junk bonds”) that have one or more of the following characteristics: (1) are obligations of U.S. companies or issuers and (2) have intermediate- to long-term maturities (three years or longer). The fund invests with a focus on companies or issuers that Putnam believes meet relevant ESG criteria on a sector-specific basis.
- The Putnam ESG Ultra Short ETF (NYSE Arca: PULT), which seeks as high a rate of current income that Putnam believes is consistent with the preservation of capital and maintenance of liquidity. The fund invests in a diversified portfolio of fixed income securities composed of short-duration, investment-grade money market, and other fixed income securities, with a focus on companies or issuers that Putnam believes meet relevant ESG criteria on a sector-specific basis.
- The Putnam PanAgora ESG International Equity ETF (NYSE Arca: PPIE), which seeks long-term capital appreciation by investing mainly in common stocks (growth or value stocks or both) of companies of any size outside the United States with a focus on securities that PanAgora believes offer attractive benchmark-relative returns and exhibit positive ESG metrics based on a proprietary framework using quantitative models.
- The Putnam PanAgora ESG Emerging Markets Equity ETF (NYSE Arca: PPEM), which seeks long-term capital appreciation by investing mainly in common stocks (growth or value stocks or both) of emerging markets companies of any size with a focus on securities that PanAgora believes offer attractive benchmark-relative returns and exhibit positive ESG metrics based on a proprietary framework using quantitative models.
“Advisors continue to have more ESG products to choose from to meet client objectives,” said Todd Rosenbluth, head of research at VettaFi. “It is great to see Putnam tap into its expertise for ETF investors.”
Forcione explained that these five ETFs are not made for short-term trading but rather “buy-and-hold products” that, in addition to being offered on a stand-alone basis, will also serve as underlying investments for the firm’s planned ESG-focused target-date series, the Putnam Sustainable Retirement Funds. This new suite is expected to be implemented in the coming weeks through a repositioning of the existing Putnam RetirementReady Funds target-date series.
“We’re seeing clients flocking to that [ETF] space,” Forcione said. “It is clear to us that’s a space where our clients are, where our clients want to be, and where Putnam needs to be.”