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Burton Malkiel Talks About Efficient Markets
In this video sponsored by Vanguard, Burton Malkiel, Princeton professor and author of "A Random Walk Down Wall Street," talks with RIJ editor Kerry Pechter about what "efficient market" means to him. The 10th edition of "A Random Walk" has just been published.
Industry Views are special reports that are sponsored and independent from RIJ's editorial content.
October 26, 2011, The Decumulation Beat
“Income” Funds with High Price Tags
Unless I’ve missed something, the three Putnam Retirement Income Lifestyle Funds, as “income funds,” seem long on promises and short on delivery—particularly in light of the costs.
This week, Putnam Investments introduced three Retirement Income Lifestyle Funds (numbered 1, 2, and 3) which it will market to advisors as potential “core holdings” for decumulation portfolios. The funds are intended for use as part of systematic withdrawal plans in retirement.
The Boston-based fund company, led by CEO Robert Reynolds and other former Fidelity executives, simultaneously announced an online calculator that shows clients how much monthly income they might expect from the funds, how long the income stream might last and how much money might be left over for heirs.
A conversation with Jeff Carney, Putnam’s Global Marketing and Products chief, showed that these funds-of-funds are, well, just fancy balanced funds. They don’t provide guaranteed or income, neither for life or any period. They’re not managed payout funds. They aren’t clearly intended for use as providers of “floor” income in retirement. Advisors who are looking for protection against longevity risk won’t find it here—although the funds do contain portions of Putnam’s family of Absolute Return funds, which use volatility hedges.
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