US fund manager Putnam Investments has overhauled its pricing structure of its retail mutual funds, including lower management fees, use of performance fees, and fund family-wide breakpoints.

"Every element of our re-pricing plan is crafted to benefit our shareholders,” said Putnam’s president and chief executive officer Robert Reynolds, “in some cases immediately, in all cases over the long haul.”

“We will be lowering management fees on many of our mutual funds on 1 August. In addition, the new management contracts for which we are seeking shareholder approval would go a step further and reduce management fees on nearly all of our mutual funds, while giving investors a real stake in our future growth and, in the case of certain funds, tying the funds’ management fees to investment performance.”

The changes as of 1 August and the new managing contracts, if approved by the shareholders, will include, for example, management fee reductions on fixed-income and asset allocation funds, and elimination of management fees on target date funds, the firm said in a statement.

In numbers, this will mean, according to the firm’s statement, 13 per cent or more reduction on fixed-income funds, a 10 per cent reduction on asset allocation funds, and an elimination of “wrap” management fees for Putnam RetirementReady funds.

Other changes will include performance fees and fund family breakpoints.

It remains to be seen if this price reduction will have an impact on other parts of the industry. Due the financial turmoil, more and more investors have demanded fee reductions.

As of 30 June, 2009, Putnam had $102.8 billion in assets under management. The firm has offices in Boston, London, Frankfurt, Amsterdam, Tokyo, Singapore, and Sydney.