We’re positive in things like tax efficient, global opportunistic, mortgage-backed securities. But I think the most — and by the way, Putnam brings in really top performing fixed income performance as well, plus additional products and things like stable value, ultra-short duration, intermediate core, and really good performance in munis as well. So, we think cash is still attractive. And frankly, some people would argue the risk reward you have cash yielding 5% and say high yield yielding 7.5%, that you’re not going to see the full rotation until you see some rate cuts as opposed to just peaking. And we just think we’re incredibly well positioned both in public fixed income, traditional fixed income as well as private credit, to be able to capture this.
And, our view is — what we’re seeing is — it demonstrates that we’re well-positioned there. I don’t know, Adam, if you want to add anything.
Adam Spector: Yeah, Jenny, I would just add that I think you’re spot on that we’ve really seen strength in a number of areas of fixed income that was masked by some of the outflows in Core and Core Plus. But the performance in Core and Core Plus turned around. If you take a look at the end of the year, Core is up 37 basis points on the index, Core Plus, a 124 basis points. And traditionally, those products get very, very strong inflows after the Fed stops hiking. So we’re in the position now from a performance standpoint as well as in the rate cycle, where those products are poised to do quite well.
Brennan Hawken: Great. Thank you for all that color. And then just, Matthew, I wanted to reconfirm, because a lot of times when you speak to expenses, you speak to it ex some items. But it sounds like the $4.55 billion and the $4.6 billion for the fiscal quarter would be inclusive of the double rent would also include the expectation of the actual performances from this past quarter plus 50 expected the next few, as well as the nine months of Putnam. Do I have that correct?
Matthew Nicholls: That’s right, yes. And just to — the reason why I went through the detailed idea is because I want to be very clear that if you take Putnam out of the equation, our expenses are up like 1% or something like that year-over-year. And that’s only because — and again, we don’t normally talk about revenue from a guide perspective. It’s almost impossible to guide, as you know. But that does assume 5% higher revenue. So just — if you — often people ask us about margin, the relationship between revenue and expenses, and leverage, operating leverage in the system, well, you can see that if we expect revenue to go up 5%, we only expect our expenses to go up between 1% and 2% on a foundational level. And then in addition to that, we’re adding Putnam.
But of course, we’re in the process of reducing expenses around the Putnam acquisition. That’s when you get to all these. When you put all that together, you get to the $4.55 billion to $4.6 billion. Next year we expect to — that to be further reduction in expenses. I mentioned $375 million for nine months of expenses for Putnam, we expect on a dollar-for-dollar basis for that to come down for 2025. I said to you that for the year, we expect to actually realize $85 million to $100 million of expenses, expense savings from the Putnam transaction. For a full year, that’s $150 million at least, in expense savings. And that’s what translates into about the $150 million to $170 million of operating income addition.
Brennan Hawken: Yeah, that the — that $150 million. That’s the run rate when you exit your fiscal year basically, right?
Matthew Nicholls: Yeah, that’s exactly right. Yeah. So on the last day, at the very least on the — we think we could be a little bit better than this. But on the last day, 930, when you times that number of savings by the year, it’s $150 million at least.
Brennan Hawken: Thank you.
Matthew Nicholls: Thank you.
Operator: Thank you. The next question comes from Michael Cyprys from Morgan Stanley. Please go ahead.
Michael Cyprys: Hey, good morning. Thanks for taking the question. I wanted to ask about retirement with Putnam and the Great-West strategic relationship, this accelerates your push into the retirement channel. I was hoping you could talk about some of the steps you’re taking and may take over the next 12 months to capture the growth opportunity that you see. Maybe you could elaborate on that as well as which products you think might resonate the most. Thanks.
Jennifer Johnson: Adam, do you want to take that?
Adam Spector: Sure, Thanks, Mike. Yeah. So, first of all, the Putnam acquisition gave us capabilities. And I think those capabilities are really important in terms of things like stable value, where there’s $18 billion in assets, ultra-short, and target date. If you take a look at target date, it’s a third of industry. DC AUM right now had $150 billion in net flow last year. We can now play in that segment where we haven’t really been able to play effectively historically. So from a product standpoint, we’re in a much stronger position. I would also say that from a sales force position, when we took folks in from Putnam, one of the areas where we added most significantly within that retirement and somewhat in the insurance channel as well.
