Putnam to Subadvise for Australian Firm
Putnam Investments has reached an agreement with Rothschild Australia Asset Management Ltd. to subadvise roughly $509 million of international equities.The agreement would mark the Boston fund company's first significant foray into the Australian mutual fund market, a spokesman said.
The Putnam-managed products will be marketed to retail and institutional clients in New Zealand and Australia starting early next year, he said.
It is unclear how many portfolios Putnam will subadvise, he added.
A number of U.S. firms have used subadvisory agreements to enter Australia's small but growing fund industry. Among them are Morgan Stanley Dean Witter, Frank Russell Co., Wellington Management Co., and Goldman Sachs Asset Management, who are all subadvisors in the $400 billion market.
Putnam manages $370 billion of assets worldwide, the bulk of which is in the United States, Japan, and Italy, the spokesman said.
Mass. Financial to Shut Down Two Funds
Massachusetts Financial Services of Boston is terminating two mutual funds, according to regulatory filings with the Securities and Exchange Commission.The MFS Blue Chip Fund and the Vertex U.S. All-Cap Fund will close Dec. 22. Purchase orders for fund shares received on or after Dec. 8 were to be rejected, the filings said.
Shareholders may redeem or exchange their fund shares within the MFS family. If a shareholder takes no action, his or her shares will automatically be exchanged for shares of the MFS(R) Money Market Fund, the filings said.
The Blue Chip fund had $1.1 million of assets in two share classes on Oct. 31, according to Lipper Inc. of Summit, N.J. The all-cap fund had $1.8 million of assets at that time, Lipper said.
Massachusetts Financial had $78.99 billion of assets in retail and institutional mutual funds on Oct. 31, according to Financial Research Corp. of Boston.
Regulators Issue Warning on Microcap Stocks
State securities regulators have published a brochure to alert retail investors to risks associated with microcap stocks.Microcap stocks are low-priced shares in little-known companies traded on the electronic over-the-counter Bulletin Board or in Pink Sheets. These stocks are vulnerable to manipulation because of the small number of shares available to trade and the lack of public information on many of the companies, the North American Securities Administrators Association said in a release.
Despite some high-profile cases by regulators and prosecutors, microcap fraud remains a problem, a spokesman for the umbrella group for state regulators said in an e-mail.
Regulators are also concerned about increased use of the Internet as a distribution vehicle for stock promoters, he said.
The brochure, "The Informed Investor: Microcap Fraud," is available from state regulators, the group's Web site, or the Securities and Exchange Commission.
Vanguard to Start Socially Minded Index Fund
The Vanguard Group of Valley Forge, Pa., said Friday that it plans to introduce its first socially responsible index fund.The Vanguard Calvert Social Index Fund would seek to track the Calvert Social Index being developed by Calvert Group of Bethesda, Md. Calvert will screen stocks from about 1,000 of the largest companies in the United States, analyzing them along five criteria: environment, workplace issues, product safety and impact, international operations and human rights, and weapons contracting.
Vanguard is the second-largest mutual fund company, with more than $525 billion of assets under management.
- Compiled by Cheryl Winokur