Putnam Investments has announced that the firm will bring three active fixed income and two active quantitative equity ETFs to the market, all with an ESG focus, following completion of the regulatory process.
The new ETFs to be launched by Putnam in the coming months are:
Fixed Income ETFs —
• Putnam ESG Core Bond ETF
• Putnam ESG High Yield ETF
• Putnam ESG Ultra Short ETF
Quantitative Equity ETFs —
• Putnam PanAgora ESG International Equity ETF
• Putnam PanAgora ESG Emerging Markets Equity ETF
The new, ESG-focused Putnam fixed income portfolios build upon the long-time capabilities and experience of the Putnam Fixed Income team, utilizing an ETF format.
The two quantitative equity ESG strategies will be sub-advised by Putnam affiliate PanAgora Asset Management, Inc., which is well regarded in the industry for its quantitative investment management expertise, the firm writes. Putnam will be the sponsor/investment adviser on all five transparent ETFs.
Additionally, the new fixed income and quantitative equity ESG ETFs, along with the existing Putnam Sustainable Leaders ETF and Putnam Sustainable Future ETF, will serve as underlying investment components within the firm’s ESG-focused target-date series, the Putnam Sustainable Retirement Funds. This new suite will be implemented in the coming months through a repositioning of the existing Putnam RetirementReady Funds target-date series.
“Putnam is committed to providing investors with a range of thoughtful, alpha-seeking sustainable and ESG offerings, as we believe in the value and importance of these strategies in building a long-term investment portfolio,” says Robert L. Reynolds, President and Chief Executive Officer, Putnam Investments. “We have seen growing interest from many corners of the marketplace for ESG investing across a range of asset classes – and are excited to introduce these new fixed income and quantitative equity ETFs to our line-up.”
The five new ESG-focused ETFs, which will be available in the coming months, are:
Putnam ESG Core Bond ETF: Will seek high current income consistent with what Putnam believes is 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 will invest mainly in bonds of governments and private companies that are investment-grade in quality with intermediate- to long-term maturities (three years or longer). Portfolio Managers: Michael Salm, Andrew Benson and Sri Mahanti.
Putnam ESG High Yield ETF: Will seek high current income, with capital growth as a secondary goal when consistent with achieving high current income. The fund will invest 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 will invest with a focus on companies or issuers that Putnam believes meet relevant ESG criteria. Portfolio Managers: Rob Salvin and Norm Boucher.
Putnam ESG Ultra Short ETF: Will seek as high a rate of current income that Putnam believes is consistent with preservation of capital and maintenance of liquidity. The fund will invest 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. Portfolio Managers: Joanne Driscoll, Andrew Benson and Michael Lima.
Putnam PanAgora ESG International Equity ETF: Will seek 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. Portfolio Managers: George Mussalli and Richard Tan.
Putnam PanAgora ESG Emerging Markets Equity ETF: Will seek 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. Portfolio Managers: George Mussalli and Richard Tan.
“These new products represent the ongoing evolution of Putnam’s ESG investment capabilities across asset classes, ultimately to help advisors and their clients construct robust portfolios,” says Carlo Forcione, Head of Product and Strategy at Putnam. “We are enthused to have these offerings join an expanding stable of Putnam actively managed ETFs in the market.”
Forcione noted that Putnam launched its first four active equity ETFs in May 2021, and recently made filings to create three additional active equity ETFs to focus on business development companies, biology revolution firms, and emerging markets ex-China.