Q. I am invested in Putnam Voyager and have been disappointed with its performance. I have a year and a half until retirement. Is this fund too aggressive for me?
S.M., Glenview
A. The voyage has lately been rough. This fund started out investing in a mix of small, mid- and large-cap stocks that served up some fine returns.
But as it ballooned in size on all that good news to become Putnam Investments’ largest fund, it found it more difficult to invest effectively in illiquid small-cap stocks. As a result, it evolved into a large growth fund.
The $15 billion Putnam Voyager “A” (PVOYX) declined 3.47 percent over the past 12 months to rank at the mid-point of all large growth funds. Its three-year annualized decline of 1.51 percent is in the top one-fourth of peers.
The new team of managers headed by James Wiess and put in place in 2000 is not the group responsible for the earlier gains. Putnam does, however, have a deep staff of analysts.
“It will take a while to evaluate the new team because it has a new strategy that mixes consistent growers with more risky stocks,” said Kelli Stebel, analyst with the Morningstar research firm. “New investors needn’t settle for a fund with so many question marks, while people already in the fund should keep a very close eye on it to see how well it reestablishes itself with a new identity.”
If you’ve run out of patience, the answer might be to get out. You’re close to retirement and should only consider aggressive growth for a very small portion of your portfolio.
Putnam Voyager “A” requires a 5.75 percent “load” (initial sales charge) and a $500 minimum initial investment.
Q. My mom, age 85, just found out that her health insurance she had for more than 30 years has given her stock valued at $26,000. If she had responded before the end of last year, the insurance company would have given her cash, but she failed to do so. Can she convert her stock to cash?
R.K. via the Internet.
A. You’re describing demutualization, a growing trend in which a mutual insurance company owned by its shareholders becomes a publicly traded company.
If your mother missed the deadline to get the cash, the company has already done its initial public offering and the stock is out on the market; she can sell her shares.
The reason usually given for demutualization is that a mutual insurance company lacks the ability to access capital. Ballots are sent out to policyholders who have to choose between receiving cash or stock.
“The big problem with demutualization is that policyholders are often asked to make decisions without knowing all the facts,” said Melissa Gannon, vice president with Weiss Ratings in Palm Beach Gardens, Fla. “They can’t really ascertain how well the stock is going to perform.”
———-
More Top Picks Best Weighted Blankets For Side Sleepers
Andrew Leckey answers questions Sunday in Business and Tuesday in Your Money. Address inquiries to Andrew Leckey, P.M.B. 184, 369-B Third St., San Rafael, Calif. 94901-3581, or by e-mail at [email protected].