Affiliated compani-es Mackenzie Financial Corp. of Toronto and Boston-based Putnam Investments Inc. have become more closely integrated as Mackenzie takes on the role of trustee and manager for the nine Putnam funds available in Canada.

Mackenzie is assuming operational and distributional responsibilities for the Putnam family of funds, which includes balanced, bond, Canadian equity, money market and international equity funds. For now, the funds will continue to be managed by their present managers, but it’s likely that some of the smaller funds will ultimately be merged with larger funds in the Mackenzie family.

Currently, Putnam is acting as subadvisor to the Putnam U.S. Value, International Equity, Global Equity and U.S. Voyager funds. Sceptre Investment Counsel Ltd. of Toronto will continue as subadvisor to the Putnam Canadian Bond, Canadian Money Market, Canadian Balanced, Canadian Equity and Canadian Equity Growth funds.

“The Putnam funds have been integrated onto the Mackenzie shelf,” says David Feather, president of Mackenzie Financial Services Inc. “As we move forward, the Putnam products will be a presence in our lineup in one form or another. However, some of the funds are small, subscale vehicles, and we can’t promise they all will be around in their current form one year from now.”

The benefits to Putnam unitholders of the inclusion of Putnam funds within the Mackenzie family will be lower management expense ratios by mid-year or, at the latest, by the third quarter, Feather says. As with the other funds in the Mackenzie lineup, the Putnam funds will convert their operating expenses to a fixed fee rather than having adjustable annual expenses, so that this portion of the MER will be more predictable.

The Putnam funds will also expand Mac-kenzie’s operational platform by allowing unitholders to switch among Putnam funds and other funds in the Mackenzie family, including those sold under the Cundill, Ivy and Universal brands. “Investors will be able to transfer across all Mackenzie and Putnam products if their objectives change,” Feather says.

The largest funds in Putnam’s Canadian fund family are the $40.5-million Putnam Canadian Balanced Series A and the $28.6-million Putnam U.S. Value Series A funds.

Putnam’s Canadian mutual funds made their début in April, 2002, but failed to gather the assets Putnam had hoped for, despite a joint venture with Sceptre that saw the Toronto-based money manager provide both back-office and investment-management services.

During the five years Putnam has been in Canada, its retail assets have grown to an unimpressive total of $233 million. Returns have been middle of the road. The newest fund in the stable, Putnam Canadian Equity Growth Fund, was launched in March 2006. It showed promise but lost its high-profile subadvisor, Allan Jacobs, when he left Sceptre to join Toronto-based Sprott Asset Management Inc. this past summer.

Putnam and Mackenzie became relatives in the past year, when Winnipeg-based Great-West Lifeco Inc. acquired Putnam’s Boston-based parent company. GWL is a member of Montreal-based Power Financial Corp. group of companies, as is Mackenzie through its parent, IGM Financial Inc.

Established in 1937, Putnam is one of the oldest and largest investment-management names in the U.S. It was put up for sale following the market-timing scandal that led to a period of sagging performance during which investors redeemed its funds.

On a global basis, Putnam manages $185 billion in assets, of which $114 billion is in mutual funds and $71 billion is in institutional accounts. IE