“Mutual-fund investors, like big institutions, are bailing out of Putnam,” writes Karen Damato in today’s Wall Street Journal.

“Investors withdrew $4.4 billion from mutual funds managed by Putnam Investments in the week ended Wednesday, even as they generally pumped money into stock and bond funds at other companies, according to calculations by AMG Data Services of Arcata, Calif. This is the first full week of such data since the Securities and Exchange Commission and Massachusetts regulators filed civil securities fraud charges against Putnam on October 28.”

“The withdrawals from Putnam funds are above and beyond the more than $4 billion that has been pulled from the Boston money manager by institutional investors, including state pension plans in Vermont, Rhode Island, Iowa and Pennsylvania. Such institutional portfolios are typically managed separately and not invested in mutual funds.”

“The withdrawals at Putnam, a unit of Marsh & McLennan Cos., are among the largest experienced by a fund complex in a single week, said Robert Adler, AMG president. ‘Investors are voting with their dollars,’ he said, and ‘they are making a strong statement’ about Putnam in the wake of the federal and state charges.”

“A Putnam spokeswoman declined comment on the past week’s redemption activity and said it is generally company policy to not discuss flows.”

“Putnam has denied wrongdoing. The company is the fifth-largest fund complex by assets, with a total of $272 billion in mutual funds and other assets under management.”

“Putnam’s stock funds saw the bulk of the week’s outflows, as investors pulled out $3.9 billion, or 3.7%, of the stock funds’ assets a week earlier, according to AMG. One of the hardest-hit funds, Putnam International Equity Fund, saw outflows of about $1 billion.”

“Industrywide, stock funds experienced net outflows of $854 million in the latest week, AMG said. But excluding the Putnam outflows, the industrywide figure would have been inflows more robust than in the past few weeks, Mr. Adler said.”

“Putnam so far is the only fund company charged in the expanding probe into improper and illegal fund-share trading practices. Both the federal and state actions charge that Putnam failed to take adequate steps to prevent some of its portfolio managers from engaging in short-term trading of fund shares, to the detriment of the funds’ long-term investors. Putnam International Equity is one of the funds that had been overseen by Omid Kamshad, one of the two former Putnam managers charged. An attorney for Mr. Kamshad has said that his client’s trades ‘didn’t violate any rule, regulation or statute.’ “