Putnam launches sustainable target-date series for retirement savers

The target-date funds will invest in actively managed sustainable and ESG-focused exchange-traded funds managed by Putnam.

Putnam Investments is now offering a series of sustainable target-date funds for the retirement market.

The asset manager announced Friday the launch of Putnam Sustainable Retirement Funds, which will invest in actively managed sustainable and environmental, social and governance-focused exchange-traded funds managed by Putnam. Putnam Sustainable Retirement Funds will invest in ETFs across the asset classes managed by the firm.

Putnam says the funds, which are a revamp of its RetirementReady TDFs, will adhere to a retirement glide path philosophy similar to that of the firm’s other target-date offering, Putnam Retirement Advantage, a series that offers vintages for every five years from 2025 through 2065, along with a maturity fund.

The same team that manages the Putnam Retirement Advantage will be responsible for the glide path and both the tactical and ETF allocations of the Putnam Sustainable Retirement target-date suite.

Putnam is launching the new TDF series in the wake of the Department of Labor’s new rule for retirement plans taking effect last week; the rule allows retirement plan sponsors to consider ESG factors when vetting investments.

“As the retirement marketplace continues to evolve and grow, there is tremendous appetite for meaningful product innovation that creates greater choice of offerings to help working Americans achieve their financial goals,” Robert L. Reynolds, president and CEO of Putnam Investments, said in a statement.

Steven P. McKay, Putnam’s head of global defined-contribution investment only, noted in the statement the “growing interest’ in ESG investing in defined-contribution plans.

“We are excited to deliver this innovative approach to target-date investing to the retirement savings marketplace,” McKay said.

Putnam had over $170 billion in assets under management at the end of January, according to the company.

[More: ESG has DOL’s blessing. Here’s what can happen next in 401(k)s]