Who wouldn t want a guaranteed return in this market? To know that you re going to make money no matter what the market does is an understandably appealing notion. Problem is, the marketers at Putnam Investments agree.

Putnam has just released a series of "absolute return" funds that promise specific percentage returns 1%, 3%, 5% or 7% above the Merrill Lynch U.S. Treasury Bill Index (a gauge of inflation) if investors hold on for three years or more.

But like all things that seem too good to be true, so is the notion of a guaranteed return. Judging from the fund names Absolute 100 (PARTX), Absolute 300 (PTRNX), Absolute 500 (PJMDX) and Absolute 700 (PDMAX) shareholders could reasonably assume they would get the corresponding return. It sounds like there are guarantees, says mutual fund analyst Adam Bold. However, if you read the fine print in the funds' prospectus you ll see they don t actually have to meet the returns indicated in their names. The documents state the funds are designed to pursue consistent returns but acknowledge a potential risk of loss. What s more, that risk may actually be greater in these funds than that of relative-return funds. Those offerings typically invest in specific asset classes like large-cap stocks or bonds and try to beat benchmark indexes instead of aiming for specific levels of return. Putnam s absolute-return funds invest in all manner of stocks, bonds and other securities, which can leave more room for error.

The more choices you have, the easier it is to pick the wrong thing, says Morningstar analyst Laura Lutton.

Putnam CEO Robert Reynolds says the broad mandate actually reduces risk and volatility by allowing the portfolio managers to focus on meeting the return. If you know what the return you need and want is, you can dial in and structure the portfolio to meet that, says Reynolds. Putnam has used the strategy for years to invest for institutions and wealthy individuals, he adds. But, warns Larry Glazer, principal of Mayflower Advisors, just because a strategy works for institutions doesn t mean it will work for retail investors.

Reynolds may be enthusiastic because he needs a hit after shaking up the company's management ranks last year. Morningstar says assets in the company's open-end funds were chopped in half last year to $40 billion due to outflows and the market downturn.

One thing to consider before buying in: fees. Annual expense ratios range from 1.82% to 2.82%, depending on the asset class. They promise to charge less if they miss their target returns but not much less. The expense ratio for the Absolute 100 Fund only drops 0.04% if the fund does poorly. "That's still more expensive than a good balanced fund, says Bold.