Two weeks after announcing a new 529 college savings partnership
with the state of Nevada, Putnam Investments said it plans to
expand sales of the program nationally.
The Boston investment manager announced Friday it will make the
Putnam 529 for America, its new advisor-sold 529 college savings
plan, available nationally.
Robert Reynolds, the company's chief executive officer, said in
an interview Thursday that Putnam has offered 529 plans for 10
years, but this plans will take a broader national approach.
Putnam officially became a program manager in Nevada Friday and
wasted no time in looking beyond the state for sales. For the past
10 years, Putnam managed Ohio's advisor-sold 529 plan, but when
Ohio decided to only have one advisor-sold plan, managed by
BlackRock, Reynolds said Putnam was approached by "several" states
that wanted to work with Putnam.
Reynolds said Ohio had a charter that enabled Putnam to sell 529
plans nationally, but it wanted to focus on selling plan within the
state. Putnam chose Nevada because it wanted to sell through
"What really attracted us to Nevada was their flexibility plus
their willingness to grow on a national basis," he said.
Putnam will join USAA, Columbia Management, Vanguard and
Upromise, who also run 529 plans through Nevada. Columbia also
manages an advisor-sold plan. Putnam managed $3 billion in 529
assets for Ohio, but will start at "ground zero," Reynolds said, in
"I am confident we will exceed the assets we accumulated in
Ohio," he said. "We are targeting advisors at every state in the
Putnam's 529 plan will be the first to feature absolute return
funds as an investment option. The funds are designed to target
positive three-year returns above inflation, as measured by T-bills
and with lower relative volatility. Most 529 plans has leaned
heavily toward target-date funds, but Reynolds said he think
absolute return funds are better suited for investors saving for
"A lot of investors don't really understand risk" he said. "Over
a 10 year period, an investor can generate the same amount of
return, but if they hit a difficult market closer to retirement,
they might have a lower balance. These products are designed to
protect principal throughout."
Putnam launched its absolute return funds 18 months ago and the
funds have already accumulated $2.5 billion. "Its still a new
concept," Reynolds said But already 9,000 individual advisors have
started selling these products nationally."
The funds are designed to target positive three-year returns
above inflation, as measured by T-bills and with lower relative
To encourage participation in the Nevada plan, Putnam will waive
sales charges for participants who transfer funds over from
existing 529 plans, as well as waive the annual maintenance fees