Putnam CA Tax Exempt Income APCTEX

Morningstar Rating

Fund Research and Analysis

by Eric Jacobson

We damn Putnam California Tax Exempt Income with faint praise.

However faint, though, it is still praise. Investors on board here for 2008 can take solace in the fund's avoidance of much worse trouble. The fund lost 10.6% as the financial crisis drained the market of liquidity, punished high-quality long-term bonds that had been used in aggressive strategies and, in a particularly cruel twist, torpedoed hedges that sought to protect muni portfolios using taxable market derivatives. Read more

Kudos

The fund is less volatile (as measured by standard deviation) than its typical peer.

Below-average fees. Read more

Risks

Manager departures in 2006 and 2007 thinned the research ranks.

Putnam has experienced significant executive-level turnover in the last year, which clouds its future. Read more

Strategy

This California municipal-bond fund follows a fairly standard strategy. Management avoids making large interest-rate bets. Instead, it tries to add value through issue selection and by rotating the fund's assets among different maturities and sectors. Read more

Management

Paul Drury, Susan McCormack, Thalia Meehan, and Brad Libby manage this fund. Each member is responsible for certain sectors of the municipal-bond market. Meehan and Libby joined the fund in 2006, while McCormack and Drury joined in 2002. Read more

Inside Scoop

Management has gradually increased the credit quality of this portfolio and decreased duration (a measure of interest-rate sensitivity) in order to defend the fund against rising interest rates. Read more

First Name

Last Name

Email Address

Zip Code

Create Password

Verify Password

(6-15 characters; case sensitive)

What is your occupation or job title?

Select...

Your registration indicates agreement to the terms of use.

Picking Positions in Health Care
Watch more