Putnam target-date strategies
Investment diversification tailored for retirement.
The road to retirement requires a plan for diversification
Security. Comfort. A new endeavor. Retirement is an opportunity for people to define their future. But getting to retirement means tackling questions about how to save, how to invest, and how to manage risk over time.
For millions of working people today, the road to retirement depends on access to a workplace savings plan. Studies show that having a well-designed workplace savings plan is one of the greatest advantages for individuals to make progress toward their retirement goals.
Target-date portfolios can anchor a retirement plan with consistent diversification
Any workplace savings plan should offer a number of investment options. Among these options, a target-date strategy offers portfolio diversification that may be attractive to people who do not want to place all eggs in one basket.
Diversification does not guarantee a profit or ensure against loss. It is possible to lose money in a diversified portfolio.
The key structural component is the glide path
Our glide path seeks reduced risk
The glide path guides the mix of stocks and bonds in each portfolio over time. As investors approach retirement, Putnam's target-date glide path shifts more assets toward fixed income than the industry average, according to Putnam's research.
Along the glide path, we make tactical allocations
With the glide path as a consistent reference point, the portfolio managers can add or subtract up to 15% to the stock or bond weightings based on their analysis of market opportunities and risks.
Within each asset class, we select securities
The portfolio managers analyze stocks and bonds to choose securities to buy and sell for the portfolios. Managing this level of selection gives them greater control of portfolio risks and enhances efficiency.
A long-tenured portfolio team offers experience in the markets to serve retirement investors
Putnam's Global Asset Allocation team manages our target-date strategies. It is one of the industry's longest-tenured teams dedicated to diversified strategies, with a track record of more than two decades.
From left to right:
- Robert J. Schoen, Chief Investment Officer, Global Asset Allocation (industry since 1990)
- James A. Fetch, Co-Head of Global Asset Allocation (industry since 1994)
- Jason R. Vaillancourt, CFA, Co-Head of Global Asset Allocation (industry since 1993)
- Brett S. Goldstein, CFA, Portfolio Manager Global Asset Allocation (industry since 2010)
Choose a CIT or mutual fund structure
|Putnam Retirement Advantage||Putnam RetirementReady|
Collective investment trust (CIT)
|Result||Flexibility to offer level expense structure across every portfolio
Only available to qualified retirement plans
|Expenses will vary based on equity allocations across portfolios
Available to qualified retirement plans, IRAs and retail investors
|Alternatives||No allocation to alternatives||Allocation to Absolute Return strategies in every portfolio|
|Result||Investment performance driven by relative return strategies||Relative return strategies complimented by Absolute Return, adding diversification by philosophy|
Our thinking on glide paths
Brochures on target-date strategies.
For advisors: Target-date strategies (PDF)
For plan participants: Set a course for retirement (PDF)
This material is provided for limited purposes. It is not intended as an offer or solicitation for the purchase or sale of any financial instrument, or any Putnam product or strategy. References to specific asset classes and financial markets are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations or investment advice. The opinions expressed represent the current, good-faith views of the author(s) at the time of publication. The views are provided for informational purposes only and are subject to change. This material does not take into account any investor's particular investment objectives, strategies, tax status, or investment horizon. Investors should consult a financial advisor for advice suited to their individual financial needs. Putnam Investments cannot guarantee the accuracy or completeness of any statements or data contained in the article. Predictions, opinions, and other information discussed are subject to change. Any forward-looking statements speak only as of the date they are made, and Putnam assumes no duty to update them. Forward-looking statements are subject to numerous assumptions, risks, and uncertainties. Actual results could differ materially from those anticipated. Past performance is not a guarantee of future results. As with any investment, there is a potential for profit as well as the possibility of loss.
The fund is a collective trust managed and distributed by Putnam Fiduciary Trust Company, a non-depository New Hampshire trust company. However, it is not FDIC insured; is not a deposit or other obligation of, and is not guaranteed by, Putnam Fiduciary Trust Company or any of its affiliates. The fund is not a mutual fund registered under the Investment Company Act of 1940, and its units are not registered under the Securities Act of 1933. The fund is only available for investment by eligible, qualified retirement plan trusts, as defined in the declaration of trust and participation agreement.
Consider these risks before investing: Our allocation of assets among permitted asset categories may hurt performance. Stock and bond prices may fall or fail to rise over time for several reasons, including general financial market conditions, factors related to a specific issuer or industry and, with respect to bond prices, changing market perceptions of the risk of default and changes in government intervention. These factors may also lead to increased volatility and reduced liquidity in the bond markets. Growth stocks may be more susceptible to earnings disappointments, and value stocks may fail to rebound. Investments in small and/or midsize companies increase the risk of greater price fluctuations. Bond investments are subject to interest-rate risk (the risk of bond prices falling if interest rates rise) and credit risk (the risk of an issuer defaulting on interest or principal payments). Default risk is generally higher for non-qualified mortgages. Interest-rate risk is greater for longer-term bonds, and credit risk is greater for below-investment-grade bonds. Lower-rated bonds may offer higher yields in return for more risk. Funds that invest in government securities are not guaranteed. Mortgage-backed securities are subject to prepayment risk and the risk that they may increase in value less when interest rates decline and decline in value more when interest rates rise. International investing involves currency, economic, and political risks. Emerging-market securities carry illiquidity and volatility risks. Active trading strategies may lose money or not earn a return sufficient to cover trading and other costs. REITs are subject to the risk of economic downturns that have an adverse impact on real estate markets. Commodity-linked notes are subject to the same risks as commodities, such as weather, disease, political, tax and other regulatory developments and other factors affecting the value of commodities. Risks associated with derivatives include increased investment exposure (which may be considered leverage) and, in the case of over-the-counter instruments, the potential inability to terminate or sell derivatives positions and the potential failure of the other party to the instrument to meet its obligations. Efforts to produce lower-volatility returns may not be successful and may make it more difficult at times for the fund to achieve its targeted returns. In addition, under certain market conditions, the funds may accept greater volatility than would typically be the case, in order to seek their targeted return. There is no guarantee that the funds will provide adequate income at and through an investor's retirement. You can lose money by investing in the funds.
Investors should carefully consider the investment objectives, risks, charges, and expenses of a fund before investing. For a prospectus, or a summary prospectus if available, containing this and other information for any Putnam fund or product, call your financial representative or call Putnam at 1-800-225-1581. Please read the prospectus carefully before investing.
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