Putnam Signs Up for Money Fund Guarantee Program

The program guarantees the share price of any publicly offered eligible money market mutual fund – both retail and institutional – that applies for and pays a fee to participate in the program (see Treasury Opens Guarantee Program for Money Funds).

In a press release, Putnam said that the program provides coverage to shareholders of Putnam’s retail money market funds as of the close of business on September 19, 2008. The temporary guaranty will be triggered if a participating fund’s net asset value falls below $0.995.

“We believe participation in the program is the right thing to do for shareholders who are understandably concerned about preserving their assets,’ said Robert L. Reynolds, President and Chief Executive Officer of Putnam Investments. “Putnam’s money market funds have maintained their $1.00 share price and continue to represent safe and high-quality investments. However, the program is well worth the peace of mind we hope it provides to investors.’

Yesterday Morgan Stanley Investment Management announced its participation in the program (see MSIM Signs Up for Treasury Guarantee Program).

According to the Treasury Department, the program will exist for an initial three-month term, after which the Secretary of the Treasury will review the need and terms for extending the program. While the program protects the accounts of investors, each money market fund makes the decision to sign up for the program. Investors cannot sign up for the program individually.