The Iowa Public Employees Retirement System, the state’s largest investment fund, said it fired Putnam Investments following allegations the mutual fund manager had engaged in improper trading.

IPERS Chief Executive Donna Mueller said IPERS had terminated its contract with Putnam on Oct. 30. As of Nov. 7, the IPERS portfolio that had been managed by Putnam Advisory Company was worth $594 million, about 3.7 percent of IPERS’s $16 billion portfolio. IPERS, which manages retirement funds for most of the state’s public employees, hired Putnam to manage a portion of its portfolio in 2000, the entity said in a statement released last week.

There is no evidence that the trading scandal hurt the value of IPERS’ money, Mueller said. Instead, IPERS decided to leave Putman because “the level of executive and portfolio management staff turnover that has occurred at Putnam over the last year … raises concerns about the firm’s ability to effectively manage IPERS’ assets in the future,” Mueller said in the statement.

The IPERS departure comes amid a wave of client defections from some of the nation’s largest mutual fund managers, including Janus Capital, Strong Capital, Alliance Capital Management.

The California Public Employees’ Retirement System, or Calpers, said last week it would pull $1.2 billion in assets from Putnam. In a regulatory filing earlier this month, Putnam parent Marsh & McLennan Cos. revealed that Putnam’s funds under management had decreased by 7.6 percent to $256 billion since the end of October.

In Putnam’s place, Mueller said Schroders Investment Management North America Inc. would replace Putman temporarily and that it could take as many as five months to find a permanent replacement manager. IPERS’ assets have risen by about 6.7 percent in the past year.