Putnam Convertible Income-Growth APCONX

Morningstar Rating

Fund Research and Analysis

by John Coumarianos

Putnam Convertible Income-Growth is still a work in progress.

Like other funds in the convertibles category, this fund has bounced hard in 2009. Convertible markets became dislocated at the end of 2008 when hedge funds practicing convertible arbitrage (buying convertibles and shorting the common stock of the same firm) had to liquidate their securities at any price when they saw their loans dry up. Read more

Kudos

Expenses rank in the lowest quartile of broker-sold convertibles funds. Read more

Risks

The fund's 10-year record is middling after a string of poor relative showings under previous managers from 1999 to 2001.

Efforts to revamp Putnam's research staff haven't borne fruit yet. Read more

Strategy

Managers Robert Salvin and Eric Harthun will likely favor a moderate approach that focuses on issues with attractive risk/reward profiles. In practice, this leads to a mix of both busted convertibles (issues that trade more like bonds) and equity-sensitive converts. Read more

Management

Robert Salvin and Eric Harthun run the show here now. Salvin worked under longtime predecessor David King, whom we were sorry to see leave. Salvin's experience is more limited. Harthun hasn't managed a convertible fund before. He assists on Putnam Small Cap Value PSLAX. Read more

Inside Scoop

This fund's manager employs a value-oriented, opportunistic approach. Overall returns have been relatively strong and steady since 2002. Read more

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