UNITED STATES SECURITIES AND EXCHANGE COMMISSION |
Washington, D.C. 20549 |
FORM N-CSR |
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES |
Investment Company Act file number: | (811-07513) |
Exact name of registrant as specified in charter: | Putnam Funds Trust |
Address of principal executive offices: | 100 Federal Street, Boston, Massachusetts 02110 |
Name and address of agent for service: | Stephen Tate, Vice President 100 Federal Street Boston, Massachusetts 02110 |
Copy to: | Bryan Chegwidden, Esq. Ropes & Gray LLP 1211 Avenue of the Americas New York, New York 10036 |
James E. Thomas, Esq. Ropes & Gray LLP 800 Boylston Street Boston, Massachusetts 02199 |
Registrant’s telephone number, including area code: | (617) 292-1000 |
Date of fiscal year end: | November 30, 2023 |
Date of reporting period: | December 1, 2022 – May 31, 2023 |
Item 1. Report to Stockholders: |
The following is a copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Investment Company Act of 1940: |
Putnam
Short-Term Municipal
Income Fund
Semiannual report
5 | 31 | 23
Message from the Trustees | 1 | |
Your fund at a glance | 2 | |
Your fund’s expenses | 3 | |
Other information for shareholders | 5 | |
Important notice regarding Putnam’s privacy policy | 6 | |
Financial statements | 7 |
Message from the Trustees
July 10, 2023
Dear Fellow Shareholder:
Stocks have generally advanced in the first half of the year, and the performance of bond markets has also improved compared with 2022. Inflation is trending downward, while economic growth has remained positive. At the same time, investors are weighing the impact of high borrowing costs, a weak housing market, and stress in the banking system.
Fortunately, a strong pulse of innovation is gaining investors’ attention. The technology sector, for example, has started to rebound from a difficult 2022. More broadly, international markets are performing better this year, even though the reopening of China’s economy lacked the dynamism many had anticipated.
As active managers, your investment team continues to research attractive opportunities for your fund while monitoring risks. This report offers an update on their efforts.
Thank you for investing with Putnam.
Respectfully yours,
Credit qualities are shown as a percentage of the fund’s net assets as of 5/31/23. A bond rated BBB or higher (SP-3 or higher, for short-term debt) is considered investment grade. This chart reflects the highest security rating provided by one or more of Standard & Poor’s, Moody’s, and Fitch. Ratings may vary over time. Due to rounding, percentages may not equal 100%.
Cash and net other assets, if any, represent the market value weights of cash, derivatives, and short-term securities in the portfolio. The fund itself has not been rated by an independent rating agency.
2 Short-Term Municipal Income Fund |
Your fund’s expenses
As a mutual fund investor, you pay ongoing expenses, such as management fees, distribution fees (12b-1 fees), and other expenses. In the most recent six-month period, your fund’s expenses were limited; had expenses not been limited, they would have been higher. Using the following information, you can estimate how these expenses affect your investment and compare them with the expenses of other funds. You may also pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial representative.
Expense ratios
Class A | Class C | Class R6 | Class Y | |
Net expenses for the fiscal year ended 11/30/22* | 0.60% | 1.35% | 0.33% | 0.35% |
Total annual operating expenses for the fiscal year | ||||
ended 11/30/22 | 0.90% | 1.65% | 0.63% | 0.65% |
Annualized expense ratio for the six-month period | ||||
ended 5/31/23 | 0.62% | 1.37% | 0.33% | 0.37% |
Fiscal year expense information in this table is taken from the most recent prospectus, is subject to change, and may differ from that shown for the annualized expense ratio and in the financial highlights of this report.
Expenses are shown as a percentage of average net assets.
* Reflects Putnam Management’s contractual obligation to limit certain fund expenses through 3/30/24.
Expenses per $1,000
The following table shows the expenses you would have paid on a $1,000 investment in each class of the fund from 12/1/22 to 5/31/23. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.
Class A | Class C | Class R6 | Class Y | |
Expenses paid per $1,000*† | $3.11 | $6.85 | $1.65 | $1.86 |
Ending value (after expenses) | $1,009.60 | $1,005.80 | $1,011.00 | $1,011.80 |
* Expenses for each share class are calculated using the fund’s annualized expense ratio for each class, which represents the ongoing expenses as a percentage of average net assets for the six months ended 5/31/23. The expense ratio may differ for each share class.
† Expenses are calculated by multiplying the expense ratio by the average account value for the period; then multiplying the result by the number of days in the period (182); and then dividing that result by the number of days in the year (365).
Short-Term Municipal Income Fund 3 |
Estimate the expenses you paid
To estimate the ongoing expenses you paid for the six months ended 5/31/23, use the following calculation method. To find the value of your investment on 12/1/22, call Putnam at 1-800-225-1581.
Compare expenses using the SEC’s method
The Securities and Exchange Commission (SEC) has established guidelines to help investors assess fund expenses. Per these guidelines, the following table shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total costs) of investing in the fund with those of other funds. All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.
Class A | Class C | Class R6 | Class Y | |
Expenses paid per $1,000*† | $3.13 | $6.89 | $1.66 | $1.87 |
Ending value (after expenses) | $1,021.84 | $1,018.10 | $1,023.29 | $1,023.09 |
* Expenses for each share class are calculated using the fund’s annualized expense ratio for each class, which represents the ongoing expenses as a percentage of average net assets for the six months ended 5/31/23. The expense ratio may differ for each share class.
† Expenses are calculated by multiplying the expense ratio by the average account value for the six-month period; then multiplying the result by the number of days in the six-month period (182); and then dividing that result by the number of days in the year (365).
4 Short-Term Municipal Income Fund |
Other information for shareholders
Important notice regarding delivery of shareholder documents
In accordance with Securities and Exchange Commission (SEC) regulations, Putnam sends a single notice of internet availability, or a single printed copy, of annual and semiannual shareholder reports, prospectuses, and proxy statements to Putnam shareholders who share the same address, unless a shareholder requests otherwise. If you prefer to receive your own copy of these documents, please call Putnam at 1-800-225-1581 or, for exchange-traded funds only, 1-833-228-5577. We will begin sending individual copies within 30 days.
Proxy voting
Putnam is committed to managing our funds in the best interests of our shareholders. The Putnam funds’ proxy voting guidelines and procedures, as well as information regarding how your fund voted proxies relating to portfolio securities during the 12-month period ended June 30, 2022, are available in the Individual Investors section of putnam.com and on the SEC’s website, www.sec.gov. If you have questions about finding forms on the SEC’s website, you may call the SEC at 1-800-SEC-0330. You may also obtain the Putnam funds’ proxy voting guidelines and procedures at no charge by calling Putnam’s Shareholder Services at 1-800-225-1581 or, for exchange-traded funds only, 1-833-228-5577.
Fund portfolio holdings
The fund will file a complete schedule of its portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-PORT within 60 days of the end of such fiscal quarter. Shareholders may obtain the fund’s Form N-PORT on the SEC’s website at www.sec.gov.
Trustee and employee fund ownership
Putnam employees and members of the Board of Trustees place their faith, confidence, and, most importantly, investment dollars in Putnam funds. As of May 31, 2023, Putnam employees had approximately $470,000,000 and the Trustees had approximately $66,000,000 invested in Putnam funds. These amounts include investments by the Trustees’ and employees’ immediate family members as well as investments through retirement and deferred compensation plans.
Liquidity risk management program
Putnam, as the administrator of the fund’s liquidity risk management program (appointed by the Board of Trustees), presented the most recent annual report on the program to the Trustees in May 2023. The report covered the structure of the program, including the program documents and related policies and procedures adopted to comply with Rule 22e-4 under the Investment Company Act of 1940, and reviewed the operation of the program from January 2022 through December 2022. The report included a description of the annual liquidity assessment of the fund that Putnam performed in November 2022. The report noted that there were no material compliance exceptions identified under Rule 22e-4 during the period. The report included a review of the governance of the program and the methodology for classification of the fund’s investments. The report also included a discussion of liquidity monitoring during the period, including during the market liquidity challenges caused by the Covid-19 pandemic, and the impact those challenges had on the liquidity of the fund’s investments. Putnam concluded that the program has been operating effectively and adequately to ensure compliance with Rule 22e-4.
Short-Term Municipal Income Fund 5 |
Important notice regarding Putnam’s privacy policy
In order to conduct business with our shareholders, we must obtain certain personal information such as account holders’ names, addresses, Social Security numbers, and dates of birth. Using this information, we are able to maintain accurate records of accounts and transactions.
It is our policy to protect the confidentiality of our shareholder information, whether or not a shareholder currently owns shares of our funds. In particular, it is our policy not to sell information about you or your accounts to outside marketing firms. We have safeguards in place designed to prevent unauthorized access to our computer systems and procedures to protect personal information from unauthorized use.
Under certain circumstances, we must share account information with outside vendors who provide services to us, such as mailings and proxy solicitations. In these cases, the service providers enter into confidentiality agreements with us, and we provide only the information necessary to process transactions and perform other services related to your account. Finally, it is our policy to share account information with your financial representative, if you’ve listed one on your Putnam account.
6 Short-Term Municipal Income Fund |
Financial statements
These sections of the report, as well as the accompanying Notes, constitute the fund’s financial statements.
The fund’s portfolio lists all the fund’s investments and their values as of the last day of the reporting period. Holdings are organized by asset type and industry sector, country, or state to show areas of concentration and diversification.
Statement of assets and liabilities shows how the fund’s net assets and share price are determined. All investment and non-investment assets are added together. Any unpaid expenses and other liabilities are subtracted from this total. The result is divided by the number of shares to determine the net asset value per share, which is calculated separately for each class of shares. (For funds with preferred shares, the amount subtracted from total assets includes the liquidation preference of preferred shares.)
Statement of operations shows the fund’s net investment gain or loss. This is done by first adding up all the fund’s earnings — from dividends and interest income — and subtracting its operating expenses to determine net investment income (or loss). Then, any net gain or loss the fund realized on the sales of its holdings — as well as any unrealized gains or losses over the period — is added to or subtracted from the net investment result to determine the fund’s net gain or loss for the fiscal period.
Statement of changes in net assets shows how the fund’s net assets were affected by the fund’s net investment gain or loss, by distributions to shareholders, and by changes in the number of the fund’s shares. It lists distributions and their sources (net investment income or realized capital gains) over the current reporting period and the most recent fiscal year-end. The distributions listed here may not match the sources listed in the Statement of operations because the distributions are determined on a tax basis and may be paid in a different period from the one in which they were earned. Dividend sources are estimated at the time of declaration. Actual results may vary. Any non-taxable return of capital cannot be determined until final tax calculations are completed after the end of the fund’s fiscal period.
Financial highlights provide an overview of the fund’s investment results, per-share distributions, expense ratios, net investment income ratios, and portfolio turnover (not required for money market funds) in one summary table, reflecting the five most recent reporting periods. In a semiannual report, the highlights table also includes the current reporting period.
Short-Term Municipal Income Fund 7 |
The fund’s portfolio 5/31/23 (Unaudited) | ||
Key to holding’s abbreviations
AGM Assured Guaranty Municipal Corporation |
COP Certificates of Participation |
FHA Insd. Federal Housing Administration Insured |
FRB Floating Rate Bonds: The rate shown is the current interest rate at the close of the reporting period. Rates may be subject to a cap or floor. For certain securities, the rate may represent a fixed rate currently in place at the close of the reporting period. |
FRN Floating Rate Notes: The rate shown is the current interest rate or yield at the close of the reporting period. Rates may be subject to a cap or floor. For certain securities, the rate may represent a fixed rate currently in place at the close of the reporting period. |
G.O. Bonds General Obligation Bonds |
PSFG Permanent School Fund Guaranteed |
VRDN Variable Rate Demand Notes, which are floating-rate securities with long-term maturities that carry coupons that reset and are payable upon demand either daily, weekly or monthly. The rate shown is the current interest rate at the close of the reporting period. Rates are set by remarketing agents and may take into consideration market supply and demand, credit quality and the current SIFMA Municipal Swap Index rate, which was 3.56% as of the close of the reporting period. |
MUNICIPAL BONDS AND NOTES (98.9%)* | Rating** | Principal amount | Value | |
Alabama (0.7%) | ||||
Southeast Energy Auth. Commodity Supply Mandatory Put Bonds (12/1/29), Ser. A-1, 5.50%, 1/1/53 | A1 | $500,000 | $533,232 | |
533,232 | ||||
Arizona (1.6%) | ||||
Coconino Cnty., Poll. Control Corp. Mandatory Put Bonds (3/31/26), (NV Pwr. Co.), Ser. B, 3.75%, 3/1/39 | A+ | 750,000 | 751,248 | |
Pima Cnty., Indl. Dev. Auth. Sr. Living 144A Rev. Bonds, (La Posada at Park Centre, Inc.), 5.75%, 11/15/24 | BBB+/P | 420,000 | 420,274 | |
1,171,522 | ||||
California (13.6%) | ||||
CA Hlth. Fac. Fin. Auth. Rev. Bonds, (Adventist Hlth. Syst./West Oblig. Group), Ser. A, 4.00%, 3/1/43 | A− | 230,000 | 208,034 | |
CA State Enterprise Dev. Auth. Student Hsg. Rev. Bonds, (Provident Group-SDSU Properties, LLC), Ser. A | ||||
5.00%, 8/1/26 | Baa3 | 100,000 | 102,999 | |
5.00%, 8/1/24 | Baa3 | 100,000 | 100,871 | |
CA State Infrastructure & Econ. Dev. Bank | ||||
Mandatory Put Bonds (1/31/24), (CA Academy of Sciences), 3.91%, 8/1/47 | A2 | 1,000,000 | 987,652 | |
Mandatory Put Bonds (1/31/24), (DesertXpress Enterprises, LLC), 3.65%, 1/1/50 | AAA | 2,000,000 | 1,993,077 | |
CA State Muni. Fin. Auth Mobile Home Park Rev. Bonds, (Caritas Affordable Housing, Inc.), Ser. A, 5.00%, 8/15/23 | A− | 510,000 | 510,968 | |
CA State Muni. Fin. Auth. COP, (Palomar Hlth.), Ser. A, AGM | ||||
5.00%, 11/1/28 | AA | 115,000 | 121,730 | |
5.00%, 11/1/27 | AA | 100,000 | 104,829 | |
CA State Muni. Fin. Auth. Rev. Bonds, (HumanGood Oblig. Group), Ser. A, 4.00%, 10/1/30 | A−/F | 165,000 | 165,042 |
8 Short-Term Municipal Income Fund |
MUNICIPAL BONDS AND NOTES (98.9%)* cont. | Rating** | Principal amount | Value | |
California cont. | ||||
CA State Tobacco Securitization Agcy. Rev. Bonds, (Gold Country Settlement Funding Corp.), Ser. A, 5.00%, 6/1/23 | A | $1,025,000 | $1,025,000 | |
CA State U. Mandatory Put Bonds (11/1/26), Ser. B-2, 0.55%, 11/1/49 | Aa2 | 2,000,000 | 1,762,643 | |
Fontana, Special Tax Bonds, (Cmnty. Fac. Dist. No. 85), 3.00%, 9/1/23 | BB+/P | 250,000 | 249,056 | |
Imperial Cnty., Local Trans. Auth. Sales Tax Rev. Bonds, Ser. E, AGM, 5.00%, 6/1/32 | AA | 1,045,000 | 1,120,640 | |
Los Angeles, Dept. of Arpt. Rev. Bonds, 5.00%, 5/15/28 | Aa3 | 500,000 | 533,203 | |
Port of Oakland Rev. Bonds, 1.181%, 5/1/25 | A1 | 600,000 | 558,402 | |
San Bernardino Cnty., FRB, Ser. C, 5.264%, 8/1/23 | Aa1 | 125,000 | 124,953 | |
9,669,099 | ||||
Colorado (2.9%) | ||||
CO State Hlth. Fac. Auth. Hosp. Rev. Bonds, (CommonSpirit Hlth.), Ser. A, 5.00%, 11/1/24 | A− | 800,000 | 813,354 | |
E-470 Pub. Hwy. Auth. Mandatory Put Bonds (9/1/24), Ser. B, 3.74%, 9/1/39 | A+ | 1,000,000 | 994,136 | |
Regl. Trans. Dist. Rev. Bonds, (Denver Transit Partners, LLC) | ||||
5.00%, 7/15/25 | Baa1 | 160,000 | 163,623 | |
5.00%, 7/15/24 | Baa1 | 100,000 | 100,676 | |
2,071,789 | ||||
Connecticut (2.9%) | ||||
CT State Hlth. & Edl. Fac. Auth. Mandatory Put Bonds (2/10/26), Ser. A, 2.80%, 7/1/48 | Aaa | 1,000,000 | 977,427 | |
CT State Hlth. & Edl. Fac. Auth. Rev. Bonds, (Stamford Hosp. Oblig. Group (The)), Ser. L-1, 4.00%, 7/1/24 | BBB+ | 500,000 | 497,502 | |
CT State Hsg. Fin. Auth. Rev. Bonds, Ser. D2, 3.00%, 5/15/24 | Aaa | 600,000 | 594,472 | |
2,069,401 | ||||
District of Columbia (1.3%) | ||||
DC Rev. Bonds | ||||
(D.C. Intl. School), 5.00%, 7/1/27 | BBB | 300,000 | 308,294 | |
(Plenary Infrastructure DC, LLC), 5.00%, 8/31/25 | A3 | 500,000 | 505,087 | |
(KIPP DC), 5.00%, 7/1/23 | BBB+ | 100,000 | 100,031 | |
913,412 | ||||
Florida (11.0%) | ||||
Broward Cnty., Hsg. Fin. Auth. Multi-Fam. Hsg. Mandatory Put Bonds (4/1/26), (St. Joseph Manor II, LLLP), 3.50%, 4/1/41 | Aaa | 1,000,000 | 1,000,906 | |
FL State Dev. Fin. Corp. Ed. Fac. Rev. Bonds, (Nova Southeastern U., Inc.), 5.00%, 4/1/29 | A3 | 150,000 | 161,240 | |
Miami-Dade Cnty., Mandatory Put Bonds (7/1/24), (Waste Management, Inc.), Ser. B, 3.935%, 11/1/48 | A− | 1,000,000 | 978,455 | |
Miami-Dade Cnty., Hsg. Fin. Auth. Multi-Fam. Hsg. Mandatory Put Bonds (9/1/25), (Quail Roost Transit Village, Ltd.), 5.00%, 9/1/26 | AA+ | 500,000 | 509,583 |
Short-Term Municipal Income Fund 9 |
MUNICIPAL BONDS AND NOTES (98.9%)* cont. | Rating** | Principal amount | Value | |
Florida cont. | ||||
Orange Cnty., Hlth. Fac. Auth. Rev. Bonds, (Presbyterian Retirement Cmnty., Inc.), 5.00%, 8/1/36 (Prerefunded 8/1/23) | A−/F | $3,000,000 | $3,093,798 | |
Palm Beach Cnty., HFA Mandatory Put Bonds (2/1/24), (Christian Manor Restoration, LP), 1.25%, 2/15/25 | Aaa | 1,985,000 | 1,933,712 | |
St. John’s Cnty., Indl. Dev. Auth. Rev. Bonds, (Life Care Ponte Vedra Oblig. Group), Ser. A, 4.00%, 12/15/28 | BB+/F | 200,000 | 186,660 | |
7,864,354 | ||||
Georgia (2.8%) | ||||
Burke Cnty., Dev. Auth. Poll. Control | ||||
Mandatory Put Bonds (8/19/25), (GA Pwr. Co.), 2.875%, 12/1/49 | Baa1 | 500,000 | 483,956 | |
Mandatory Put Bonds (6/13/24), (GA Pwr. Co.), 2.15%, 10/1/32 | Baa1 | 230,000 | 223,978 | |
Main Street Natural Gas, Inc. Gas Supply Mandatory Put Bonds (9/1/23), Ser. B, 4.123%, 4/1/48 | Aa1 | 800,000 | 800,111 | |
Monroe Cnty., Dev. Auth. Poll. Control Mandatory Put Bonds (3/6/26), (GA Pwr. Co.), 3.875%, 10/1/48 | Baa1 | 500,000 | 499,162 | |
2,007,207 | ||||
Hawaii (1.1%) | ||||
HI State Harbor Syst. Rev. Bonds, Ser. B, 0.90%, 7/1/23 | Aa3 | 250,000 | 249,061 | |
Honolulu City & Cnty., Multi-Fam. Mandatory Put Bonds (6/1/26) (Komohale Mauakea Venture LP), 5.00%, 6/1/27 | Aaa | 535,000 | 554,364 | |
803,425 | ||||
Illinois (5.1%) | ||||
Chicago, Special Assmt. Bonds, 1.99%, 12/1/23 | BBB/P | 98,000 | 96,804 | |
Cook Cnty., Cmnty. College G.O. Bonds, (Dist. No. 508), 5.25%, 12/1/30 | BBB | 500,000 | 501,071 | |
IL State G.O. Bonds | ||||
Ser. A, 5.00%, 10/1/24 | A3 | 500,000 | 508,171 | |
Ser. A, 5.00%, 3/1/24 | A3 | 800,000 | 807,118 | |
4.00%, 8/1/25 (Prerefunded 8/8/23) | A3 | 225,000 | 225,194 | |
IL State Fin. Auth. Mandatory Put Bonds (8/15/25)(11/15/24), | ||||
Mandatory Put Bonds (8/15/25), (U. of Chicago Med. Ctr.), Ser. B-1, 5.00%, 8/15/52 | AA+ | 500,000 | 513,459 | |
Mandatory Put Bonds (11/15/24), (OSF Hlth. Care Syst. Oblig. Group), Ser. B-1, 5.00%, 5/15/50 | A | 500,000 | 504,228 | |
IL State Fin. Auth. Rev. Bonds | ||||
(Presbyterian Homes Oblig. Group), Ser. A, 5.00%, 11/1/23 | A−/F | 75,000 | 75,121 | |
(The Washington and Jane Smith Home), 4.00%, 10/15/24 | BBB−/F | 215,000 | 211,816 | |
(The Washington and Jane Smith Home), 4.00%, 10/15/23 | BBB−/F | 205,000 | 204,252 | |
3,647,234 |
10 Short-Term Municipal Income Fund |
MUNICIPAL BONDS AND NOTES (98.9%)* cont. | Rating** | Principal amount | Value | |
Indiana (3.2%) | ||||
Hammond, Multi-School Bldg. Corp. Rev. Bonds, 5.00%, 7/15/24 | AA+ | $1,160,000 | $1,178,003 | |
IN State Fin Auth. Mandatory Put Bonds (11/15/23), (Fulcrum Centerpoint, LLC), 4.50%, 12/15/46 | AAA | 650,000 | 647,877 | |
Rockport, Poll. Control Rev. Bonds, (AEP Generating Co.), 3.125%, 7/1/25 | A− | 500,000 | 487,633 | |
2,313,513 | ||||
Iowa (0.4%) | ||||
IA State Fin. Auth. Solid Waste Fac. Mandatory Put Bonds (4/1/24), (Gevo NW Iowa RNG, LLC), 1.50%, 1/1/42 | Aa3 | 300,000 | 291,268 | |
291,268 | ||||
Louisiana (2.1%) | ||||
LA Stadium & Exposition Dist. Rev. Bonds, 4.00%, 7/3/23 | BBB+/F | 1,000,000 | 1,000,057 | |
LA State Offshore Term. Auth. Deepwater Port Mandatory Put Bonds (12/1/23), (Loop, LLC), Ser. A, 1.65%, 9/1/33 | A3 | 400,000 | 394,801 | |
St. John The Baptist Parish Mandatory Put Bonds (7/1/24), (Marathon Oil Corp.), 2.125%, 6/1/37 | Baa3 | 100,000 | 97,860 | |
1,492,718 | ||||
Maryland (0.5%) | ||||
Frederick Cnty., Special Tax Bonds, (Oakdale-Lake Linganore), 2.625%, 7/1/24 | BB/P | 140,000 | 137,480 | |
MD State Hlth. & Higher Ed. Fac. Auth. Rev. Bonds, (Stevenson U.), 5.00%, 6/1/29 | BBB− | 200,000 | 212,842 | |
350,322 | ||||
Massachusetts (0.4%) | ||||
Lowell, Collegiate Charter School Rev. Bonds, 4.00%, 6/15/24 | BB−/P | 20,000 | 19,828 | |
MA State Hlth. & Edl. Fac. Auth. VRDN (MA Inst. of Tech.), 3.30%, 7/1/31 | VMIG 1 | 250,000 | 250,000 | |
269,828 | ||||
Michigan (1.9%) | ||||
Detroit, G.O. Bonds, 5.00%, 4/1/25 | Ba1 | 600,000 | 604,034 | |
Flint, Hosp. Bldg. Auth. Rev. Bonds, (Hurley Med. Ctr.) | ||||
4.75%, 7/1/28 | Ba1 | 525,000 | 506,143 | |
4.75%, 7/1/28 (Prerefunded 7/1/23) | AAA/P | 35,000 | 35,028 | |
MI State Fin. Auth. Rev. Bonds, (Tobacco Settlement), Ser. A-1, 2.326%, 6/1/30 | A | 248,893 | 237,911 | |
1,383,116 | ||||
Minnesota (2.5%) | ||||
Duluth, Econ. Dev. Auth. Rev. Bonds, (Benedictine Hlth. Syst. Oblig. Group), Ser. A, 3.00%, 7/1/24 | BB/P | 200,000 | 195,756 | |
Duluth, Econ. Dev. Auth. Hlth. Care Fac. Rev. Bonds, (St. Luke’s Hosp. of Duluth Oblig. Group), 5.00%, 6/15/27 | BBB− | 535,000 | 547,179 | |
Hennepin Cnty., VRDN, Ser. B, 3.45%, 12/1/38 | A-1+ | 1,000,000 | 1,000,000 | |
MN State Res. Hsg. Fin. Agcy. Rev. Bonds, Ser. A, 4.00%, 7/1/38 | Aa1 | 20,000 | 19,938 | |
1,762,873 |
Short-Term Municipal Income Fund 11 |
MUNICIPAL BONDS AND NOTES (98.9%)* cont. | Rating** | Principal amount | Value | |
Missouri (4.3%) | ||||
Kansas City, Indl. Dev. Auth. Arpt. Special Oblig. Rev. Bonds | ||||
(Kansas City, Intl. Arpt.), 5.00%, 3/1/30 | A2 | $1,000,000 | $1,070,052 | |
5.00%, 3/1/27 | A2 | 1,000,000 | 1,041,493 | |
5.00%, 3/1/26 | A2 | 500,000 | 514,690 | |
Poplar Bluff, Regl. Trans. Dist. Rev. Bonds, Ser. B, 3.375%, 12/1/31 | BBB | 500,000 | 481,117 | |
3,107,352 | ||||
Montana (—%) | ||||
MT State Board of Hsg. Rev. Bonds, Ser. A-2, FHA Insd., 3.00%, 12/1/43 | Aa1 | 5,000 | 4,963 | |
4,963 | ||||
Nebraska (1.4%) | ||||
Central Plains, Energy Mandatory Put Bonds (1/1/24), (No. 4), 5.00%, 3/1/50 | A2 | 1,000,000 | 1,004,756 | |
1,004,756 | ||||
Nevada (0.7%) | ||||
Clark Cnty., Arpt. Rev. Bonds, (Jet Aviation Fuel Tax), 5.00%, 7/1/26 | A1 | 500,000 | 517,662 | |
517,662 | ||||
New Jersey (5.7%) | ||||
Newark, G.O. Bonds, Ser. A, AGM, 5.00%, 10/1/23 | AA | 960,000 | 964,916 | |
NJ State Econ. Dev. Auth. | ||||
Mandatory Put Bonds (12/3/29), (American Water Co., Inc.), 2.20%, 10/1/39 | A1 | 500,000 | 428,736 | |
Mandatory Put Bonds (6/1/23), (NJ-American Water Co., Inc.), 1.20%, 11/1/34 | A1 | 500,000 | 500,000 | |
NJ State Econ. Dev. Auth. Rev. Bonds, (NJ Transit Corp.), Ser. B, 5.00%, 11/1/24 | A2 | 500,000 | 508,346 | |
NJ State Higher Ed. Assistance Auth. Rev. Bonds, Ser. B, 5.00%, 12/1/26 | Aaa | 1,015,000 | 1,048,574 | |
NJ State Trans. Trust Fund Auth. Rev. Bonds, Ser. AA, 5.25%, 6/15/30 (Prerefunded 7/3/23) | A2 | 650,000 | 650,456 | |
4,101,028 | ||||
New Mexico (0.5%) | ||||
Farmington, Poll. Control Rev. Bonds, (Pub. Service Co. of NM), Ser. B, 2.15%, 4/1/33 | Baa2 | 250,000 | 198,000 | |
NM State Hosp. Equip. Loan Council First Mtge. Rev. Bonds, (La Vida Expansion), Ser. C, 2.25%, 7/1/23 | BB+/F | 150,000 | 149,619 | |
347,619 | ||||
New York (6.3%) | ||||
Long Island, Pwr. Auth. Elec. Syst. | ||||
Mandatory Put Bonds (9/1/26), Ser. B, 1.50%, 9/1/51 | A2 | 200,000 | 184,307 | |
Mandatory Put Bonds (9/1/25), Ser. B, 0.85%, 9/1/50 | A2 | 500,000 | 466,204 | |
NY City, Hsg. Dev. Corp. Mandatory Put Bonds (12/22/26), (Sustainable Dev.), Ser. F-2-B, FHA Insd., 3.40%, 11/1/62 | AA+ | 1,500,000 | 1,474,276 | |
NY City, Hsg. Dev. Corp. Rev. Bonds, Ser. A-1, 1.40%, 5/1/24 | AA+ | 475,000 | 464,027 |
12 Short-Term Municipal Income Fund |
MUNICIPAL BONDS AND NOTES (98.9%)* cont. | Rating** | Principal amount | Value | |
New York cont. | ||||
NY State Dorm. Auth. Rev. Bonds, (St. Joseph’s College) | ||||
5.00%, 7/1/30 | BBB−/F | $75,000 | $79,291 | |
5.00%, 7/1/29 | BBB−/F | 75,000 | 78,799 | |
5.00%, 7/1/28 | BBB−/F | 75,000 | 78,182 | |
5.00%, 7/1/26 | BBB−/F | 200,000 | 205,191 | |
5.00%, 7/1/24 | BBB−/F | 175,000 | 176,373 | |
5.00%, 7/1/23 | BBB−/F | 100,000 | 100,044 | |
NY State Trans. Special Fac. Dev. Corp. Rev. Bonds, (JFK Intl. Arpt. Term. 4, LLC), 5.00%, 12/1/25 | Baa1 | 225,000 | 229,450 | |
Port Auth. of NY & NJ Rev. Bonds, Ser. 207, 5.00%, 9/15/25 | Aa3 | 960,000 | 984,958 | |
4,521,102 | ||||
Ohio (2.7%) | ||||
Akron Bath Coply Joint Twp. Hosp. Dist. Rev. Bonds, (Summa Hlth. Syst. Oblig. Group) | ||||
5.00%, 11/15/27 | BBB+/F | 180,000 | 188,871 | |
5.00%, 11/15/25 | BBB+/F | 255,000 | 261,291 | |
OH State Higher Edl. Fac. Comm. Rev. Bonds | ||||
(Cleveland Inst. of Music (The)), 5.00%, 12/1/27 | BBB− | 700,000 | 711,853 | |
(Ashtabula Cnty. Med. Ctr.), 5.00%, 1/1/26 | BBB+/F | 100,000 | 101,651 | |
(Ashtabula Cnty. Med. Ctr.), 5.00%, 1/1/25 | BBB+/F | 100,000 | 100,830 | |
(Ashtabula Cnty. Med. Ctr.), 5.00%, 1/1/24 | BBB+/F | 90,000 | 90,256 | |
Ohio State Air Qlty. Dev. Auth. Mandatory Put Bonds (6/1/27), (Duke Energy Corp.), Ser. 22B, 4.00%, 9/1/30 | Baa2 | 500,000 | 493,962 | |
1,948,714 | ||||
Pennsylvania (5.8%) | ||||
Monroeville, Fin. Auth. Rev. Bonds, (U. of Pittsburgh Med. Ctr.), Ser. B, 5.00%, 2/15/24 | A2 | 715,000 | 721,593 | |
PA State Econ. Dev. Fin. Auth. Rev. Bonds, (PennDOT Major Bridges), 5.00%, 12/31/29 | Baa2 | 270,000 | 290,838 | |
Philadelphia, Arpt. Rev. Bonds, Ser. C, 5.00%, 7/1/24 | A2 | 750,000 | 757,624 | |
Philadelphia, Auth. for Indl. Dev. City Agreement Rev. Bonds, 5.00%, 12/1/27 | A1 | 1,560,000 | 1,618,217 | |
Pittsburgh Wtr. & Swr. Auth. Mandatory Put Bonds (12/1/23), Ser. C, AGM, 4.21%, 9/1/40 | AA | 625,000 | 625,051 | |
Westmoreland Cnty. Indl. Dev. Auth. Hlth. Syst. Rev. Bonds, (Excela Hlth. Oblig. Group), Ser. A, 4.00%, 7/1/23 | Baa2 | 150,000 | 149,910 | |
4,163,233 | ||||
Puerto Rico (0.8%) | ||||
Cmnwlth. of PR, FRN, zero %, 11/1/51 | BB/P | 13,471 | 5,388 | |
Cmnwlth. of PR, G.O. Bonds, Ser. A1 | ||||
5.375%, 7/1/25 | BB/P | 400,000 | 408,695 | |
5.25%, 7/1/23 | BB/P | 124,996 | 125,126 | |
539,209 |
Short-Term Municipal Income Fund 13 |
MUNICIPAL BONDS AND NOTES (98.9%)* cont. | Rating** | Principal amount | Value | |
South Carolina (0.7%) | ||||
SC State Pub. Svcs. Auth. Rev. Bonds | ||||
Ser. C, 5.00%, 12/1/25 | A3 | $355,000 | $367,130 | |
Ser. E, 5.00%, 12/1/25 | A3 | 150,000 | 155,125 | |
522,255 | ||||
Tennessee (0.1%) | ||||
Metro. Nashville, Arpt. Auth. Rev. Bonds, Ser. B, 5.00%, 7/1/26 | A1 | 50,000 | 51,766 | |
51,766 | ||||
Texas (6.4%) | ||||
Fort Bend, Indpt. School Dist. Mandatory Put Bonds (8/1/26), Ser. B, PSFG, 0.72%, 8/1/51 | AAA | 860,000 | 778,748 | |
Houston, Indpt. School Dist. Mandatory Put Bonds (6/1/25), Ser. A-2, PSFG, 3.50%, 6/1/39 | Aaa | 2,000,000 | 1,987,296 | |
SA Energy Acquisition Pub. Fac. Corp. Rev. Bonds, (Gas Supply), 5.50%, 8/1/25 | A2 | 75,000 | 76,419 | |
San Antonio, Wtr. Syst. Mandatory Put Bonds (5/1/24), Ser. A, 2.625%, 5/1/49 | AA+ | 1,000,000 | 988,129 | |
Tarrant Cnty., Cultural Ed. Fac. Fin. Corp. Mandatory Put Bonds (5/15/26), (Baylor Scott & White Hlth.), 5.00%, 11/15/52 | Aa3 | 650,000 | 674,695 | |
TX State Affordable Hsg. Corp. Rev. Bonds, Ser. A, GNMA, 5.25%, 9/1/28 | Aaa | 55,000 | 55,024 | |
4,560,311 | ||||
Utah (2.1%) | ||||
Infrastructure Agcy. Telecomm. Rev. Bonds, 5.00%, 10/15/27 | BBB−/F | 455,000 | 460,402 | |
Salt Lake City, Arpt. Rev. Bonds, Ser. A, 5.00%, 7/1/29 | A2 | 500,000 | 523,408 | |
UT Infrastructure Agcy. Rev. Bonds, Ser. A | ||||
3.00%, 10/15/26 | BBB−/F | 250,000 | 236,580 | |
3.00%, 10/15/23 | BBB−/F | 250,000 | 248,106 | |
1,468,496 | ||||
Virgin Islands (0.2%) | ||||
Matching Fund Special Purpose Securitization Corp. Rev. Bonds, Ser. A, 5.00%, 10/1/25 | BB/P | 125,000 | 126,388 | |
126,388 | ||||
Virginia (0.4%) | ||||
VA State Small Bus. Fin. Auth. Rev. Bonds, (National Sr. Campuses, Inc. Oblig. Group), 5.00%, 1/1/25 | A/F | 250,000 | 252,874 | |
252,874 | ||||
Washington (3.5%) | ||||
Port of Seattle Rev. Bonds, Ser. B, 5.00%, 5/1/27 | AA− | 1,000,000 | 1,047,624 | |
Seattle, Muni. Lt. & Pwr. Mandatory Put Bonds (11/1/26), Ser. B, 3.81%, 5/1/45 | Aa2 | 1,500,000 | 1,462,347 | |
2,509,971 | ||||
Wisconsin (3.3%) | ||||
Pub. Fin. Auth. Rev. Bonds, (Roseman U. of Hlth. Sciences), 5.00%, 4/1/25 | BB | 800,000 | 799,391 | |
WI State COP, Ser. A, 4.00%, 9/1/24 | Aa2 | 1,545,000 | 1,555,515 | |
2,354,906 | ||||
Total municipal bonds and notes (cost $71,714,185) | $70,716,918 | |||
14 Short-Term Municipal Income Fund |
SHORT-TERM INVESTMENTS (0.1%)* | Shares | Value | |
Putnam Short Term Investment Fund Class P 5.21% L | 75,087 | $75,087 | |
Total short-term investments (cost $75,087) | $75,087 | ||
TOTAL INVESTMENTS | ||
Total investments (cost $71,789,272) | $70,792,005 | |
Notes to the fund’s portfolio | |||
Unless noted otherwise, the notes to the fund’s portfolio are for the close of the fund’s reporting period, which ran from December 1, 2022 through May 31, 2023 (the reporting period). Within the following notes to the portfolio, references to “Putnam Management” represent Putnam Investment Management, LLC, the fund’s manager, an indirect wholly-owned subsidiary of Putnam Investments, LLC and references to “ASC 820” represent Accounting Standards Codification 820 Fair Value Measurements and Disclosures. | |||
* | Percentages indicated are based on net assets of $71,487,998. | ||
** | The Moody’s, Standard & Poor’s or Fitch ratings indicated are believed to be the most recent ratings available at the close of the reporting period for the securities listed. Ratings are generally ascribed to securities at the time of issuance. While the agencies may from time to time revise such ratings, they undertake no obligation to do so, and the ratings do not necessarily represent what the agencies would ascribe to these securities at the close of the reporting period. Securities rated by Fitch are indicated by “/F.” Securities rated by Putnam are indicated by “/P.” The Putnam rating categories are comparable to the Standard & Poor’s classifications. If a security is insured, it will usually be rated by the ratings organizations based on the financial strength of the insurer. For further details regarding security ratings, please see the Statement of Additional Information. | ||
L | Affiliated company (Note 5). The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period. | ||
144A after the name of an issuer represents securities exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. | |||
On Mandatory Put Bonds, the rates shown are the current interest rates at the close of the reporting period and the dates shown represent the next mandatory put dates. Rates are set by remarketing agents and may take into consideration market supply and demand, credit quality and the current SIFMA Municipal Swap Index, 1 Month US LIBOR or 3 Month US LIBOR rates, which were 3.56%, 5.19% and 5.52%, respectively, as of the close of the reporting period. | |||
The dates shown parenthetically on prerefunded bonds represent the next prerefunding dates. | |||
The dates shown on debt obligations are the original maturity dates. | |||
The fund had the following sector concentrations greater than 10% at the close of the reporting period (as a percentage of net assets): | |||
Transportation | 15.5% | ||
Utilities | 13.0 | ||
Local debt | 12.1 | ||
Health care | 11.1 | ||
Housing | 10.0 | ||
Short-Term Municipal Income Fund 15 |
Level 1: Valuations based on quoted prices for identical securities in active markets.
Level 2: Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.
Level 3: Valuations based on inputs that are unobservable and significant to the fair value measurement.
Valuation inputs | |||
Investments in securities: | Level 1 | Level 2 | Level 3 |
Municipal bonds and notes | $— | $70,716,918 | $— |
Short-term investments | — | 75,087 | — |
Totals by level | $— | $70,792,005 | $— |
The accompanying notes are an integral part of these financial statements.
16 Short-Term Municipal Income Fund |
Statement of assets and liabilities 5/31/23 (Unaudited)
ASSETS | |
Investment in securities, at value (Note 1): | |
Unaffiliated issuers (identified cost $71,714,185) | $70,716,918 |
Affiliated issuers (identified cost $75,087) (Note 5) | 75,087 |
Interest and other receivables | 803,477 |
Receivable for shares of the fund sold | 16,585 |
Receivable for investments sold | 117,000 |
Receivable from Manager (Note 2) | 31,382 |
Prepaid assets | 50,550 |
Total assets | 71,810,999 |
LIABILITIES | |
Payable for shares of the fund repurchased | 256,502 |
Payable for custodian fees (Note 2) | 6,678 |
Payable for investor servicing fees (Note 2) | 10,129 |
Payable for Trustee compensation and expenses (Note 2) | 976 |
Payable for administrative services (Note 2) | 472 |
Payable for distribution fees (Note 2) | 13,113 |
Payable for auditing and tax fees | 25,402 |
Other accrued expenses | 9,729 |
Total liabilities | 323,001 |
Net assets | $71,487,998 |
REPRESENTED BY | |
Paid-in capital (Unlimited shares authorized) (Notes 1 and 4) | $72,712,614 |
Total distributable earnings (Note 1) | (1,224,616) |
Total — Representing net assets applicable to capital shares outstanding | $71,487,998 |
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE | |
Net asset value and redemption price per class A share ($31,043,496 divided by 3,183,259 shares) | $9.75 |
Offering price per class A share (100/97.75 of $9.75)* | $9.97 |
Net asset value and offering price per class C share ($363,181 divided by 37,390 shares)** | $9.71 |
Net asset value, offering price and redemption price per class R6 share | |
($4,740,102 divided by 486,543 shares) | $9.74 |
Net asset value, offering price and redemption price per class Y share | |
($35,341,219 divided by 3,625,773 shares) | $9.75 |
*On single retail sales of less than $100,000. On sales of $100,000 or more the offering price is reduced.
**Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
The accompanying notes are an integral part of these financial statements.
Short-Term Municipal Income Fund 17 |
Statement of operations Six months ended 5/31/23 (Unaudited)
INVESTMENT INCOME | |
Interest (including interest income of $37,123 from investments in affiliated issuers) (Note 5) | $1,144,770 |
Total investment income | 1,144,770 |
EXPENSES | |
Compensation of Manager (Note 2) | 108,992 |
Investor servicing fees (Note 2) | 33,108 |
Custodian fees (Note 2) | 5,414 |
Trustee compensation and expenses (Note 2) | 1,771 |
Distribution fees (Note 2) | 40,648 |
Administrative services (Note 2) | 1,918 |
Auditing and tax fees | 25,216 |
Blue sky expense | 40,849 |
Other | 16,657 |
Fees waived and reimbursed by Manager (Note 2) | (92,126) |
Total expenses | 182,447 |
Expense reduction (Note 2) | (101) |
Net expenses | 182,346 |
Net investment income | 962,424 |
REALIZED AND UNREALIZED GAIN (LOSS) | |
Net realized gain on: | |
Securities from unaffiliated issuers (Notes 1 and 3) | 56,550 |
Swap contracts (Note 1) | 35,000 |
Total net realized gain | 91,550 |
Change in net unrealized depreciation on: | |
Securities from unaffiliated issuers | (145,574) |
Total change in net unrealized depreciation | (145,574) |
Net loss on investments | (54,024) |
Net increase in net assets resulting from operations | $908,400 |
The accompanying notes are an integral part of these financial statements.
18 Short-Term Municipal Income Fund |
Statement of changes in net assets
INCREASE (DECREASE) IN NET ASSETS | Six months ended 5/31/23* | Year ended 11/30/22 |
Operations | ||
Net investment income | $962,424 | $692,149 |
Net realized gain (loss) on investments | 91,550 | (378,987) |
Change in net unrealized depreciation of investments | (145,574) | (1,235,531) |
Net increase (decrease) in net assets resulting | ||
from operations | 908,400 | (922,369) |
Distributions to shareholders (Note 1): | ||
From ordinary income | ||
Taxable net investment income | ||
Class A | (7,895) | (920) |
Class C | (111) | (13) |
Class R6 | (1,346) | (148) |
Class Y | (11,151) | (1,345) |
Net realized short-term gain on investments | ||
Class A | — | (109,412) |
Class B | — | (86) |
Class C | — | (1,504) |
Class R6 | — | (10,773) |
Class Y | — | (79,823) |
From tax-exempt net investment income | ||
Class A | (349,594) | (265,400) |
Class B | — | (5) |
Class C | (3,241) | (1,652) |
Class R6 | (66,527) | (57,069) |
Class Y | (513,789) | (318,921) |
From net realized long-term gain on investments | ||
Class A | — | (15,646) |
Class B | — | (12) |
Class C | — | (215) |
Class R6 | — | (1,543) |
Class Y | — | (11,454) |
Increase (decrease) from capital share transactions (Note 4) | (9,491,531) | 30,384,321 |
Total increase (decrease) in net assets | (9,536,785) | 28,586,011 |
NET ASSETS | ||
Beginning of period | 81,024,783 | 52,438,772 |
End of period | $71,487,998 | $81,024,783 |
*Unaudited.
The accompanying notes are an integral part of these financial statements.
Short-Term Municipal Income Fund 19 |
Financial highlights
(For a common share outstanding throughout the period)
INVESTMENT OPERATIONS | LESS DISTRIBUTIONS | RATIOS AND SUPPLEMENTAL DATA | |||||||||||
Ratio | Ratio of net | ||||||||||||
Net asset | Net realized | of expenses | investment | ||||||||||
value, | and unrealized | Total from | From net | From net | Net asset | Total return | Net assets, | to average | income (loss) | Portfolio | |||
beginning | Net investment | gain (loss) | investment | investment | realized gain | Total | value, end | at net asset | end of period | net assets | to average | turnover | |
Period ended | of period | income (loss) | on investments | operations | income | on investments | distributions | of period | value (%)a | (in thousands) | (%)b,c | net assets (%)c | (%) |
Class A | |||||||||||||
May 31, 2023** | $9.77 | .12 | (.03) | .09 | (.11) | — | (.11) | $9.75 | .96* | $31,043 | .31* | 1.17* | 18* |
November 30, 2022 | 10.17 | .10 | (.36) | (.26) | (.10) | (.04) | (.14) | 9.77 | (2.56) | 30,735 | .60 | 1.09 | 39 |
November 30, 2021 | 10.15 | .07 | .04 | .11 | (.07) | (.02) | (.09) | 10.17 | 1.00 | 27,661 | .59 | .63 | 54 |
November 30, 2020 | 10.08 | .12 | .07 | .19 | (.12) | —d | (.12) | 10.15 | 1.95 | 20,955 | .59 | 1.19 | 51 |
November 30, 2019 | 9.95 | .17 | .13 | .30 | (.17) | — | (.17) | 10.08 | 2.99 | 14,450 | .60 | 1.67 | 83 |
November 30, 2018 | 9.97 | .14 | (.02) | .12 | (.14) | — | (.14) | 9.95 | 1.22 | 9,792 | .61 | 1.43 | 76 |
Class C | |||||||||||||
May 31, 2023** | $9.73 | .08 | (.02) | .06 | (.08) | — | (.08) | $9.71 | .58* | $363 | .68* | .79* | 18* |
November 30, 2022 | 10.15 | .05 | (.39) | (.34) | (.04) | (.04) | (.08) | 9.73 | (3.31) | 444 | 1.35 | .34 | 39 |
November 30, 2021 | 10.15 | .01 | .02 | .03 | (.01) | (.02) | (.03) | 10.15 | .21 | 374 | 1.34 | (.07) | 54 |
November 30, 2020 | 10.08 | .04 | .08 | .12 | (.05) | —d | (.05) | 10.15 | 1.22 | 423 | 1.34 | .37 | 51 |
November 30, 2019 | 9.94 | .09 | .14 | .23 | (.09) | — | (.09) | 10.08 | 2.32 | 311 | 1.35 | .93 | 83 |
November 30, 2018 | 9.97 | .07 | (.03) | .04 | (.07) | — | (.07) | 9.94 | .36 | 280 | 1.36 | .68 | 76 |
Class R6 | |||||||||||||
May 31, 2023** | $9.76 | .13 | (.02) | .11 | (.13) | — | (.13) | $9.74 | 1.10* | $4,740 | .17* | 1.31* | 18* |
November 30, 2022 | 10.17 | .13 | (.37) | (.24) | (.13) | (.04) | (.17) | 9.76 | (2.36) | 4,940 | .33 | 1.44 | 39 |
November 30, 2021 | 10.15 | .09 | .04 | .13 | (.09) | (.02) | (.11) | 10.17 | 1.27 | 2,715 | .33 | .91 | 54 |
November 30, 2020 | 10.08 | .14 | .08 | .22 | (.15) | —d | (.15) | 10.15 | 2.22 | 2,313 | .33 | 1.42 | 51 |
November 30, 2019 | 9.94 | .20 | .13 | .33 | (.19) | — | (.19) | 10.08 | 3.37 | 1,347 | .33 | 1.95 | 83 |
November 30, 2018 † | 9.93 | .10 | .01 | .11 | (.10) | — | (.10) | 9.94 | 1.10* | 1,091 | .17* | 1.02* | 76 |
Class Y | |||||||||||||
May 31, 2023** | $9.76 | .13 | (.01) | .12 | (.13) | — | (.13) | $9.75 | 1.18* | $35,341 | .18* | 1.29* | 18* |
November 30, 2022 | 10.17 | .13 | (.38) | (.25) | (.12) | (.04) | (.16) | 9.76 | (2.39) | 44,906 | .35 | 1.44 | 39 |
November 30, 2021 | 10.15 | .09 | .04 | .13 | (.09) | (.02) | (.11) | 10.17 | 1.26 | 21,666 | .34 | .91 | 54 |
November 30, 2020 | 10.08 | .14 | .08 | .22 | (.15) | —d | (.15) | 10.15 | 2.21 | 22,819 | .34 | 1.38 | 51 |
November 30, 2019 | 9.94 | .19 | .14 | .33 | (.19) | — | (.19) | 10.08 | 3.34 | 8,489 | .35 | 1.93 | 83 |
November 30, 2018 | 9.97 | .17 | (.03) | .14 | (.17) | — | (.17) | 9.94 | 1.37 | 7,694 | .36 | 1.66 | 76 |
* Not annualized.
** Unaudited.
† For the period May 22, 2018 (commencement of operations) to November 30, 2018.
a Total return assumes dividend reinvestment and does not reflect the effect of sales charges.
b Includes amounts paid through expense offset and brokerage/service arrangements, if any (Note 2). Also excludes acquired fund fees and expenses, if any.
c Reflects an involuntary contractual expense limitations in effect during the period. As a result of such limitations, the expenses of each class reflect a reduction of the following amount (Note 2):
Percentage of average net assets | ||||||
5/31/23 | 11/30/22 | 11/30/21 | 11/30/20 | 11/30/19 | 11/30/18 | |
Class A | 0.12% | 0.30% | 0.32% | 0.47% | 0.84% | 1.01% |
Class C | 0.12 | 0.30 | 0.32 | 0.47 | 0.84 | 1.01 |
Class R6 | 0.12 | 0.30 | 0.32 | 0.47 | 0.84 | 0.54 |
Class Y | 0.12 | 0.30 | 0.32 | 0.47 | 0.84 | 1.01 |
d Amount represents less than $0.01 per share.
The accompanying notes are an integral part of these financial statements.
20 Short-Term Municipal Income Fund | Short-Term Municipal Income Fund 21 |
Notes to financial statements 5/31/23 (Unaudited)
Unless otherwise noted, the “reporting period” represents the period from December 1, 2022 through May 31, 2023. The following table defines commonly used references within the Notes to financial statements:
References to | Represent |
Putnam Management | Putnam Investment Management, LLC, the fund’s manager, an indirect wholly-owned |
subsidiary of Putnam Investments, LLC | |
State Street | State Street Bank and Trust Company |
JPMorgan | JPMorgan Chase Bank, N.A. |
the SEC | the Securities and Exchange Commission |
OTC | over-the-counter |
PIL | Putnam Investments Limited, an affiliate of Putnam Management |
Putnam Short-Term Municipal Income Fund (the fund) is a diversified series of Putnam Funds Trust (the Trust), a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The goal of the fund is to seek as high a level of current income exempt from federal income tax as Putnam Management believes is consistent with preservation of capital. The fund invests mainly in bonds that pay interest that is exempt from federal income tax (but that may be subject to federal alternative minimum tax (AMT)) and that have short-term maturities (i.e., three years or less). The bonds the fund invests in are mainly investment-grade in quality. Under normal circumstances, Putnam Management invests at least 80% of the fund’s net assets in tax-exempt investments, which for purposes of this policy include investments paying interest subject to the federal AMT for individuals. This investment policy cannot be changed without the approval of the fund’s shareholders. Putnam Management may consider, among other factors, credit, interest rate and prepayment risks, as well as general market conditions, when deciding whether to buy or sell investments.
The fund offers the following share classes. The expenses for each class of shares may differ based on the distribution and investor servicing fees of each class, which are identified in Note 2.
Share class | Sales charge | Contingent deferred sales charge | Conversion feature |
1.00% on certain redemptions of shares | |||
Class A | Up to 2.25% | bought with no initial sales charge | None |
Converts to class A shares | |||
Class C | None | 1.00% eliminated after one year | after 8 years |
Class R6† | None | None | None |
Class Y† | None | None | None |
† Not available to all investors.
In the normal course of business, the fund enters into contracts that may include agreements to indemnify another party under given circumstances. The fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be, but have not yet been, made against the fund. However, the fund’s management team expects the risk of material loss to be remote.
The fund has entered into contractual arrangements with an investment adviser, administrator, distributor, shareholder servicing agent and custodian, who each provide services to the fund. Unless expressly stated otherwise, shareholders are not parties to, or intended beneficiaries of these contractual arrangements, and these contractual arrangements are not intended to create any shareholder right to enforce them against the service providers or to seek any remedy under them against the service providers, either directly or on behalf of the fund.
Under the fund’s Amended and Restated Agreement and Declaration of Trust, any claims asserted against or on behalf of the Putnam Funds, including claims against Trustees and Officers, must be brought in state and federal courts located within the Commonwealth of Massachusetts.
22 Short-Term Municipal Income Fund |
Note 1: Significant accounting policies
The following is a summary of significant accounting policies consistently followed by the fund in the preparation of its financial statements. The preparation of financial statements is in conformity with accounting principles generally accepted in the United States of America and requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and the reported amounts of increases and decreases in net assets from operations. Actual results could differ from those estimates. Subsequent events after the Statement of assets and liabilities date through the date that the financial statements were issued have been evaluated in the preparation of the financial statements.
Investment income, realized and unrealized gains and losses and expenses of the fund are borne pro-rata based on the relative net assets of each class to the total net assets of the fund, except that each class bears expenses unique to that class (including the distribution fees applicable to such classes). Each class votes as a class only with respect to its own distribution plan or other matters on which a class vote is required by law or determined by the Trustees. If the fund were liquidated, shares of each class would receive their pro-rata share of the net assets of the fund. In addition, the Trustees declare separate dividends on each class of shares.
Security valuation Portfolio securities and other investments are valued using policies and procedures adopted by the Board of Trustees. The Trustees have formed a Pricing Committee to oversee the implementation of these procedures and have delegated responsibility for valuing the fund’s assets in accordance with these procedures to Putnam Management. Putnam Management has established an internal Valuation Committee that is responsible for making fair value determinations, evaluating the effectiveness of the pricing policies of the fund and reporting to the Pricing Committee.
Tax-exempt bonds and notes are generally valued on the basis of valuations provided by an independent pricing service approved by the Trustees. Such services use information with respect to transactions in bonds, quotations from bond dealers, market transactions in comparable securities and various relationships between securities in determining value. These securities will generally be categorized as Level 2.
Investments in open-end investment companies (excluding exchange-traded funds), if any, which can be classified as Level 1 or Level 2 securities, are valued based on their net asset value. The net asset value of such investment companies equals the total value of their assets less their liabilities and divided by the number of their outstanding shares.
Certain investments, including certain restricted and illiquid securities and derivatives, are also valued at fair value following procedures approved by the Trustees. To assess the continuing appropriateness of fair valuations, the Valuation Committee reviews and affirms the reasonableness of such valuations on a regular basis after considering all relevant information that is reasonably available. Such valuations and procedures are reviewed periodically by the Trustees. These valuations consider such factors as significant market or specific security events such as interest rate or credit quality changes, various relationships with other securities, discount rates, U.S. Treasury, U.S. swap and credit yields, index levels, convexity exposures, recovery rates, sales and other multiples and resale restrictions. These securities are classified as Level 2 or as Level 3 depending on the priority of the significant inputs. The fair value of securities is generally determined as the amount that the fund could reasonably expect to realize from an orderly disposition of such securities over a reasonable period of time. By its nature, a fair value price is a good faith estimate of the value of a security in a current sale and does not reflect an actual market price, which may be different by a material amount.
Security transactions and related investment income Security transactions are recorded on the trade date (the date the order to buy or sell is executed). Gains or losses on securities sold are determined on the identified cost basis.
Interest income, net of any applicable withholding taxes, if any, is recorded on the accrual basis. Amortization and accretion of premiums and discounts on debt securities, if any, is recorded on the accrual basis.
Total return swap contracts The fund entered into OTC and/or centrally cleared total return swap contracts, which are arrangements to exchange a market-linked return for a periodic payment, both based on a notional principal amount, for hedging and gaining exposure to interest rate and term structure risk.
To the extent that the total return of the security, index or other financial measure underlying the transaction exceeds or falls short of the offsetting interest rate obligation, the fund will receive a payment from or make a payment to the counterparty. OTC and/or centrally cleared total return swap contracts are marked to market daily based upon quotations from an independent pricing service or market maker. Any change is recorded as an unrealized gain or loss on OTC total return swaps. Daily fluctuations in the value of centrally cleared total return swaps are settled through a central clearing agent and are recorded in variation margin on the Statement of
Short-Term Municipal Income Fund 23 |
assets and liabilities and recorded as unrealized gain or loss. Payments received or made are recorded as realized gains or losses. Certain OTC and/or centrally cleared total return swap contracts may include extended effective dates. Payments related to these swap contracts are accrued based on the terms of the contract. The fund could be exposed to credit or market risk due to unfavorable changes in the fluctuation of interest rates or in the price of the underlying security or index, the possibility that there is no liquid market for these agreements or that the counterparty may default on its obligation to perform. The fund’s maximum risk of loss from counterparty risk or central clearing risk is the fair value of the contract. This risk may be mitigated for OTC total return swap contracts by having a master netting arrangement between the fund and the counterparty and for centrally cleared total return swap contracts through the daily exchange of variation margin. There is minimal counterparty risk with respect to centrally cleared total return swap contracts due to the clearinghouse guarantee fund and other resources that are available in the event of a clearing member default. Risk of loss may exceed amounts recognized on the Statement of assets and liabilities.
OTC and/or centrally cleared total return swap contracts outstanding, including their respective notional amounts at period end, if any, are listed after the fund’s portfolio.
Interfund lending The fund, along with other Putnam funds, may participate in an interfund lending program pursuant to an exemptive order issued by the SEC. This program allows the fund to borrow from or lend to other Putnam funds that permit such transactions. Interfund lending transactions are subject to each fund’s investment policies and borrowing and lending limits. Interest earned or paid on the interfund lending transaction will be based on the average of certain current market rates. During the reporting period, the fund did not utilize the program.
Lines of credit The fund participates, along with other Putnam funds, in a $320 million syndicated unsecured committed line of credit, provided by State Street ($160 million) and JPMorgan ($160 million), and a $235.5 million unsecured uncommitted line of credit, provided by State Street. Prior to May 2, 2023, the fund participated, along with other Putnam funds, in a $100 million unsecured committed line of credit and a $235.5 million unsecured uncommitted line of credit, both provided by State Street. Borrowings may be made for temporary or emergency purposes, including the funding of shareholder redemption requests and trade settlements. Interest is charged to the fund based on the fund’s borrowing at a rate equal to 1.25% plus the higher of (1) the Federal Funds rate and (2) the Overnight Bank Funding Rate for the committed line of credit and 1.30% plus the higher of (1) the Federal Funds rate and (2) the Overnight Bank Funding Rate for the uncommitted line of credit. A closing fee equal to 0.04% of the committed line of credit and 0.04% of the uncommitted line of credit has been paid by the participating funds and a $75,000 fee has been paid by the participating funds to State Street as agent of the syndicated committed line of credit. In addition, a commitment fee of 0.21% per annum on any unutilized portion of the committed line of credit is allocated to the participating funds based on their relative net assets and paid quarterly. During the reporting period, the fund had no borrowings against these arrangements.
Federal taxes It is the policy of the fund to distribute all of its income within the prescribed time period and otherwise comply with the provisions of the Internal Revenue Code of 1986, as amended (the Code), applicable to regulated investment companies. It is also the intention of the fund to distribute an amount sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
The fund is subject to the provisions of Accounting Standards Codification 740 Income Taxes (ASC 740). ASC 740 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The fund did not have a liability to record for any unrecognized tax benefits in the accompanying financial statements. No provision has been made for federal taxes on income, capital gains or unrealized appreciation on securities held nor for excise tax on income and capital gains. Each of the fund’s federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service.
Under the Regulated Investment Company Modernization Act of 2010, the fund will be permitted to carry forward capital losses incurred for an unlimited period and the carry forwards will retain their character as either short-term or long-term capital losses. At November 30, 2022, the fund had the following capital loss carryovers available, to the extent allowed by the Code, to offset future net capital gain, if any:
Loss carryover | ||
Short-term | Long-term | Total |
$103,682 | $239,234 | $342,916 |
24 Short-Term Municipal Income Fund |
Tax cost of investments includes adjustments to net unrealized appreciation (depreciation) which may not necessarily be final tax cost basis adjustments, but closely approximate the tax basis unrealized gains and losses that may be realized and distributed to shareholders. The aggregate identified cost on a tax basis is $71,797,835, resulting in gross unrealized appreciation and depreciation of $210,475 and $1,216,305, respectively, or net unrealized depreciation of $1,005,830.
Distributions to shareholders Income dividends are recorded daily by the fund and are paid monthly. Distributions from capital gains, if any, are recorded on the ex-dividend date and paid at least annually. The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Dividend sources are estimated at the time of declaration. Actual results may vary. Any non-taxable return of capital cannot be determined until final tax calculations are completed after the end of the fund’s fiscal year. Reclassifications are made to the fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryovers) under income tax regulations.
Expenses of the Trust Expenses directly charged or attributable to any fund will be paid from the assets of that fund. Generally, expenses of the Trust will be allocated among and charged to the assets of each fund on a basis that the Trustees deem fair and equitable, which may be based on the relative assets of each fund or the nature of the services performed and relative applicability to each fund.
Note 2: Management fee, administrative services and other transactions
The fund pays Putnam Management a management fee (based on the fund’s average net assets and computed and paid monthly) at annual rates that may vary based on the average of the aggregate net assets of all open-end mutual funds sponsored by Putnam Management (excluding net assets of funds that are invested in, or that are invested in by, other Putnam funds to the extent necessary to avoid “double counting” of those assets). Such annual rates may vary as follows:
0.440% | of the first $5 billion, | 0.240% | of the next $50 billion, | |
0.390% | of the next $5 billion, | 0.220% | of the next $50 billion, | |
0.340% | of the next $10 billion, | 0.210% | of the next $100 billion and | |
0.290% | of the next $10 billion, | 0.205% | of any excess thereafter. |
For the reporting period, the management fee represented an effective rate (excluding the impact from any expense waivers in effect) of 0.140% of the fund’s average net assets.
Putnam Management has contractually agreed, through March 30, 2025, to waive fees and/or reimburse the fund’s expenses to the extent necessary to limit the cumulative expenses of the fund, exclusive of brokerage, interest, taxes, investment-related expenses, extraordinary expenses, acquired fund fees and expenses and payments under the fund’s investor servicing contract, investment management contract and distribution plans, on a fiscal year-to-date basis to an annual rate of 0.20% of the fund’s average net assets over such fiscal year-to-date period. During the reporting period, the fund’s expenses were reduced by $14,086 as a result of this limit.
Putnam Management has also contractually agreed to waive fees (and, to the extent necessary, bear other expenses) of the fund through March 30, 2025, to the extent that total expenses of the fund (excluding brokerage, interest, taxes, investment-related expenses, payments under distribution plans, extraordinary expenses, payments under the fund’s investor servicing contract and acquired fund fees and expenses, but including payments under the fund’s investment management contract) would exceed an annual rate of 0.28% of the fund’s average net assets. During the reporting period, the fund’s expenses were reduced by $78,040 as a result of this limit.
PIL is authorized by the Trustees to manage a separate portion of the assets of the fund as determined by Putnam Management from time to time. PIL did not manage any portion of the assets of the fund during the reporting period. If Putnam Management were to engage the services of PIL, Putnam Management would pay a quarterly sub-management fee to PIL for its services at an annual rate of 0.20% of the average net assets of the portion of the fund managed by PIL.
The fund reimburses Putnam Management an allocated amount for the compensation and related expenses of certain officers of the fund and their staff who provide administrative services to the fund. The aggregate amount of all such reimbursements is determined annually by the Trustees.
Short-Term Municipal Income Fund 25 |
Custodial functions for the fund’s assets are provided by State Street. Custody fees are based on the fund’s asset level, the number of its security holdings and transaction volumes.
Putnam Investor Services, Inc., an affiliate of Putnam Management, provides investor servicing agent functions to the fund. Putnam Investor Services, Inc. received fees for investor servicing for class A, class C and class Y shares that included (1) a per account fee for each direct and underlying non-defined contribution account (retail account) of the fund; (2) a specified rate of the fund’s assets attributable to defined contribution plan accounts; and (3) a specified rate based on the average net assets in retail accounts. Putnam Investor Services, Inc. has agreed that the aggregate investor servicing fees for each fund’s retail and defined contribution accounts for these share classes will not exceed an annual rate of 0.25% of the fund’s average assets attributable to such accounts.
Class R6 shares paid a monthly fee based on the average net assets of class R6 shares at an annual rate of 0.05%.
During the reporting period, the expenses for each class of shares related to investor servicing fees were as follows:
Class A | $13,550 | Class R6 | 1,308 | |
Class C | 189 | Class Y | 18,061 | |
Total | $33,108 |
The fund has entered into expense offset arrangements with Putnam Investor Services, Inc. and State Street whereby Putnam Investor Services, Inc.’s and State Street’s fees are reduced by credits allowed on cash balances. For the reporting period, the fund’s expenses were reduced by $101 under the expense offset arrangements.
Each Independent Trustee of the fund receives an annual Trustee fee, of which $66, as a quarterly retainer, has been allocated to the fund, and an additional fee for each Trustees meeting attended. Trustees also are reimbursed for expenses they incur relating to their services as Trustees.
The fund has adopted a Trustee Fee Deferral Plan (the Deferral Plan) which allows the Trustees to defer the receipt of all or a portion of Trustees fees payable on or after July 1, 1995. The deferred fees remain invested in certain Putnam funds until distribution in accordance with the Deferral Plan.
The fund has adopted an unfunded noncontributory defined benefit pension plan (the Pension Plan) covering all Trustees of the fund who have served as a Trustee for at least five years and were first elected prior to 2004. Benefits under the Pension Plan are equal to 50% of the Trustee’s average annual attendance and retainer fees for the three years ended December 31, 2005. The retirement benefit is payable during a Trustee’s lifetime, beginning the year following retirement, for the number of years of service through December 31, 2006. Pension expense for the fund is included in Trustee compensation and expenses in the Statement of operations. Accrued pension liability is included in Payable for Trustee compensation and expenses in the Statement of assets and liabilities. The Trustees have terminated the Pension Plan with respect to any Trustee first elected after 2003.
The fund has adopted distribution plans (the Plans) with respect to the following share classes pursuant to Rule 12b–1 under the Investment Company Act of 1940. The purpose of the Plans is to compensate Putnam Retail Management Limited Partnership, an indirect wholly-owned subsidiary of Putnam Investments, LLC, for services provided and expenses incurred in distributing shares of the fund. The Plans provide payments by the fund to Putnam Retail Management Limited Partnership at an annual rate of up to the following amounts (Maximum %) of the average net assets attributable to each class. The Trustees have approved payment by the fund at the following annual rate (Approved %) of the average net assets attributable to each class. During the reporting period, the class-specific expenses related to distribution fees were as follows:
Maximum % | Approved % | Amount | |
Class A | 0.35% | 0.25% | $38,507 |
Class C | 1.00% | 1.00% | 2,141 |
Total | $40,648 |
For the reporting period, Putnam Retail Management Limited Partnership, acting as underwriter, received net commissions of $121 from the sale of class A shares and received no monies in contingent deferred sales charges from redemptions of class C shares.
26 Short-Term Municipal Income Fund |
A deferred sales charge of up to 1.00% is assessed on certain redemptions of class A shares. For the reporting period, Putnam Retail Management Limited Partnership, acting as underwriter, received no monies on class A redemptions.
Note 3: Purchases and sales of securities
During the reporting period, the cost of purchases and the proceeds from sales, excluding short-term investments, were as follows:
Cost of purchases | Proceeds from sales | |
Investments in securities (Long-term) | $12,875,317 | $17,276,690 |
U.S. government securities (Long-term) | — | — |
Total | $12,875,317 | $17,276,690 |
The fund may purchase or sell investments from or to other Putnam funds in the ordinary course of business, which can reduce the fund’s transaction costs, at prices determined in accordance with SEC requirements and policies approved by the Trustees. During the reporting period, purchases or sales of long-term securities from or to other Putnam funds, if any, did not represent more than 5% of the fund’s total cost of purchases and/or total proceeds from sales.
Note 4: Capital shares
At the close of the reporting period, there were an unlimited number of shares of beneficial interest authorized. Transactions, including, if applicable, direct exchanges pursuant to share conversions, in capital shares were as follows:
SIX MONTHS ENDED 5/31/23 | YEAR ENDED 11/30/22 | |||
Class A | Shares | Amount | Shares | Amount |
Shares sold | 1,495,980 | $14,652,726 | 2,611,269 | $25,692,379 |
Shares issued in connection with | ||||
reinvestment of distributions | 36,289 | 355,257 | 39,163 | 387,368 |
1,532,269 | 15,007,983 | 2,650,432 | 26,079,747 | |
Shares repurchased | (1,495,793) | (14,660,890) | (2,223,290) | (21,961,349) |
Net increase | 36,476 | $347,093 | 427,142 | $4,118,398 |
YEAR ENDED 11/30/22* | ||||
Class B | Shares | Amount | ||
Shares sold | — | $— | ||
Shares issued in connection with | ||||
reinvestment of distributions | 10 | 102 | ||
10 | 102 | |||
Shares repurchased | (2,227) | (22,525) | ||
Net decrease | (2,217) | $(22,423) | ||
SIX MONTHS ENDED 5/31/23 | YEAR ENDED 11/30/22 | |||
Class C | Shares | Amount | Shares | Amount |
Shares sold | 2,663 | $26,151 | 25,281 | $246,800 |
Shares issued in connection with | ||||
reinvestment of distributions | 340 | 3,313 | 317 | 3,138 |
3,003 | 29,464 | 25,598 | 249,938 | |
Shares repurchased | (11,244) | (109,689) | (16,771) | (164,599) |
Net increase (decrease) | (8,241) | $(80,225) | 8,827 | $85,339 |
Short-Term Municipal Income Fund 27 |
SIX MONTHS ENDED 5/31/23 | YEAR ENDED 11/30/22 | |||
Class R6 | Shares | Amount | Shares | Amount |
Shares sold | 129,771 | $1,271,938 | 479,180 | $4,694,946 |
Shares issued in connection with | ||||
reinvestment of distributions | 6,944 | 67,873 | 6,942 | 68,237 |
136,715 | 1,339,811 | 486,122 | 4,763,183 | |
Shares repurchased | (156,514) | (1,532,444) | (246,903) | (2,399,524) |
Net increase (decrease) | (19,799) | $(192,633) | 239,219 | $2,363,659 |
SIX MONTHS ENDED 5/31/23 | YEAR ENDED 11/30/22 | |||
Class Y | Shares | Amount | Shares | Amount |
Shares sold | 1,464,162 | $14,343,487 | 4,326,978 | $42,052,991 |
Shares issued in connection with | ||||
reinvestment of distributions | 53,645 | 524,940 | 41,770 | 411,543 |
1,517,807 | 14,868,427 | 4,368,748 | 42,464,534 | |
Shares repurchased | (2,492,602) | (24,434,193) | (1,898,800) | (18,625,186) |
Net increase (decrease) | (974,795) | $(9,565,766) | 2,469,948 | $23,839,348 |
* Class B shares were liquidated on January 6, 2022.
Note 5: Affiliated transactions
Transactions during the reporting period with any company which is under common ownership or control were as follows:
Shares | |||||
outstanding | |||||
and fair | |||||
Fair value as | Purchase | Sale | Investment | value as | |
Name of affiliate | of 11/30/22 | cost | proceeds | income | of 5/31/23 |
Short-term investments | |||||
Putnam Short Term | |||||
Investment Fund* | $321,429 | $28,897,187 | $29,143,529 | $37,123 | $75,087 |
Total Short-term | |||||
investments | $321,429 | $28,897,187 | $29,143,529 | $37,123 | $75,087 |
* Management fees charged to Putnam Short Term Investment Fund have been waived by Putnam Management. There were no realized or unrealized gains or losses during the period.
Note 6: Market, credit and other risks
In the normal course of business, the fund trades financial instruments and enters into financial transactions where risk of potential loss exists due to changes in the market (market risk) or failure of the contracting party to the transaction to perform (credit risk). The fund may be exposed to additional credit risk that an institution or other entity with which the fund has unsettled or open transactions will default.
On July 27, 2017, the United Kingdom’s Financial Conduct Authority (“FCA”), which regulates LIBOR, announced its intention to cease compelling banks to provide the quotations needed to sustain LIBOR after 2021. ICE Benchmark Administration, the administrator of LIBOR, ceased publication of most LIBOR settings on a representative basis at the end of 2021 and is expected to cease publication of a majority of U.S. dollar LIBOR settings on a representative basis after June 30, 2023. In addition, global regulators have announced that, with limited exceptions, no new LIBOR-based contracts should be entered into after 2021. LIBOR has historically been a common benchmark interest rate index used to make adjustments to variable-rate loans. It is used throughout global banking and financial industries to determine interest rates for a variety of financial instruments and borrowing
28 Short-Term Municipal Income Fund |
arrangements. Actions by regulators have resulted in the establishment of alternative reference rates to LIBOR in most major currencies. Various financial industry groups have been planning for the transition away from LIBOR, but there are obstacles to converting certain longer-term securities and transactions to new reference rates. Markets are developing slowly and questions around liquidity in these rates and how to appropriately adjust these rates to mitigate any economic value transfer at the time of transition remain a significant concern. Neither the effect of the transition process nor its ultimate success can yet be known. The transition process might lead to increased volatility and illiquidity in markets that rely on LIBOR to determine interest rates. It could also lead to a reduction in the value of some LIBOR-based investments and reduce the effectiveness of related transactions, such as hedges. While some LIBOR-based instruments may contemplate a scenario where LIBOR is no longer available by providing for an alternative rate-setting methodology, not all may have such provisions and there may be significant uncertainty regarding the effectiveness of any such alternative methodologies. Since the usefulness of LIBOR as a benchmark could deteriorate during the transition period, these effects could occur at any time.
Note 7: Summary of derivative activity
The volume of activity for the reporting period for any derivative type that was held during the period is listed below and was based on an average of the holdings at the end of each fiscal quarter:
OTC total return swap contracts (notional) | $430,000 |
As of the close of the reporting period, the fund did not hold any derivative instruments.
The following is a summary of realized gains or losses of derivative instruments on the Statement of operations for the reporting period (Note 1) (there were no unrealized gains or losses on derivative instruments):
Amount of realized gain or (loss) on derivatives recognized in net gain or (loss) on investments | ||
Derivatives not accounted for as | ||
hedging instruments under ASC 815 | Swaps | Total |
Interest rate contracts | $35,000 | $35,000 |
Total | $35,000 | $35,000 |
Note 8: Of special note
On May 31, 2023, Franklin Resources, Inc. (“Franklin Resources”) and Great-West Lifeco, Inc., the parent company of Putnam U.S. Holdings I, LLC (“Putnam Holdings”), announced that they have entered into a definitive agreement for a subsidiary of Franklin Resources to acquire Putnam Holdings in a stock and cash transaction.
As part of this transaction, Putnam Management, a wholly owned subsidiary of Putnam Holdings and investment manager to the Putnam family of funds (the “Putnam Funds”), would become an indirect wholly-owned subsidiary of Franklin Resources.
The transaction is subject to customary closing conditions, including receipt of applicable regulatory approvals. Subject to such approvals and the satisfaction of these conditions, the transaction is currently expected to be consummated in the fourth quarter of 2023.
Under the Investment Company Act of 1940, as amended, consummation of the transaction will result in the automatic termination of the investment management contract between each Putnam Fund and Putnam Management and any related sub-management and sub-advisory contracts, where applicable. In anticipation of this automatic termination, on June 23, 2023, the Board of Trustees of the Putnam Funds approved a new investment management contract between each Putnam Fund and Putnam Management (and new sub-management and sub-advisory contracts, if applicable), which will be presented to the shareholders of each Putnam Fund for their approval at shareholder meetings currently expected to occur in October 2023.
Short-Term Municipal Income Fund 29 |
Putnam family of funds
The following is a list of Putnam’s open-end mutual funds offered to the public. Investors should carefully consider the investment objective, risks, charges, and expenses of a fund before investing. For a prospectus, or a summary prospectus if available, containing this and other information for any Putnam fund or product, contact your financial advisor or call Putnam Investor Services at 1-800-225-1581. Please read the prospectus carefully before investing.
Blend | Income |
Core Equity Fund | Convertible Securities Fund |
Emerging Markets Equity Fund | Core Bond Fund |
Focused Equity Fund | Diversified Income Trust |
Focused International Equity Fund | Floating Rate Income Fund |
International Capital Opportunities Fund | Global Income Trust |
International Equity Fund | Government Money Market Fund* |
Research Fund | High Yield Fund |
Income Fund | |
Global Sector | Money Market Fund† |
Global Health Care Fund | Mortgage Opportunities Fund |
Global Technology Fund | Mortgage Securities Fund |
Short Duration Bond Fund | |
Growth | Ultra Short Duration Income Fund |
Large Cap Growth Fund | |
Small Cap Growth Fund | Tax-free Income |
Sustainable Future Fund | Intermediate-Term Municipal Income Fund |
Sustainable Leaders Fund | Short-Term Municipal Income Fund |
Strategic Intermediate Municipal Fund | |
Value | Tax Exempt Income Fund |
International Value Fund | Tax-Free High Yield Fund |
Large Cap Value Fund | |
Small Cap Value Fund | State tax-free income funds:‡ |
California, Massachusetts, Minnesota, | |
New Jersey, New York, Ohio, and Pennsylvania |
30 Short-Term Municipal Income Fund |
Asset Allocation | Asset Allocation (cont.) |
George Putnam Balanced Fund | Retirement Advantage Maturity Fund |
Retirement Advantage 2065 Fund | |
Dynamic Asset Allocation Balanced Fund | Retirement Advantage 2060 Fund |
Dynamic Asset Allocation Conservative Fund | Retirement Advantage 2055 Fund |
Dynamic Asset Allocation Growth Fund | Retirement Advantage 2050 Fund |
Retirement Advantage 2045 Fund | |
Multi-Asset Income Fund | Retirement Advantage 2040 Fund |
Retirement Advantage 2035 Fund | |
Retirement Advantage 2030 Fund | |
Retirement Advantage 2025 Fund | |
Sustainable Retirement Maturity Fund | |
Sustainable Retirement 2065 Fund | |
Sustainable Retirement 2060 Fund | |
Sustainable Retirement 2055 Fund | |
Sustainable Retirement 2050 Fund | |
Sustainable Retirement 2045 Fund | |
Sustainable Retirement 2040 Fund | |
Sustainable Retirement 2035 Fund | |
Sustainable Retirement 2030 Fund | |
Sustainable Retirement 2025 Fund |
* You could lose money by investing in the fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund’s sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.
† You could lose money by investing in the fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. The fund may impose a fee upon sale of your shares or may temporarily suspend your ability to sell shares if the fund’s liquidity falls below required minimums because of market conditions or other factors. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund’s sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.
‡ Not available in all states.
Check your account balances and the most recent month-end performance in the Individual Investors section at putnam.com.
Short-Term Municipal Income Fund 31 |
Services for shareholders
Investor services
Systematic investment plan Tell us how much you wish to invest regularly — weekly, semimonthly, or monthly — and the amount you choose will be transferred automatically from your checking or savings account. There’s no additional fee for this service, and you can suspend it at any time. This plan may be a great way to save for college expenses or to plan for your retirement.
Please note that regular investing does not guarantee a profit or protect against loss in a declining market. Before arranging a systematic investment plan, consider your financial ability to continue making purchases in periods when prices are low.
Systematic exchange You can make regular transfers from one Putnam fund to another Putnam fund. There are no additional fees for this service, and you can cancel or change your options at any time.
Dividends PLUS You can choose to have the dividend distributions from one of your Putnam funds automatically reinvested in another Putnam fund at no additional charge.
Free exchange privilege You can exchange money between Putnam funds free of charge, as long as they are the same class of shares. A signature guarantee is required if you are exchanging more than $500,000. The fund reserves the right to revise or terminate the exchange privilege.
Reinstatement privilege If you’ve sold Putnam shares or received a check for a dividend or capital gain, you may reinvest the proceeds with Putnam within 90 days of the transaction and they will be reinvested at the fund’s current net asset value — with no sales charge. However, reinstatement of class B shares may have special tax consequences. Ask your financial or tax representative for details.
Check-writing service You have ready access to many Putnam accounts. It’s as simple as writing a check, and there are no special fees or service charges. For more information about the check-writing service, call Putnam or visit our website.
Dollar cost averaging When you’re investing for long-term goals, it’s time, not timing, that counts. Investing on a systematic basis is a better strategy than trying to figure out when the markets will go up or down. This means investing the same amount of money regularly over a long period. This method of investing is called dollar cost averaging. When a fund’s share price declines, your investment dollars buy more shares at lower prices. When it increases, they buy fewer shares. Over time, you will pay a lower average price per share.
For more information
Visit the Individual Investors section at putnam.com A secure section of our website contains complete information on your account, including balances and transactions, updated daily. You may also conduct transactions, such as exchanges, additional investments, and address changes. Log on today to get your password.
Call us toll free at 1-800-225-1581 or, for exchange-traded funds only, 1-833-228-5577 Ask a helpful Putnam representative or your financial advisor for details about any of these or other services, or see your prospectus.
32 Short-Term Municipal Income Fund |
Fund information
Founded over 85 years ago, Putnam Investments was built around the concept that a balance between risk and reward is the hallmark of a well-rounded financial program. We manage funds across income, value, blend, growth, sustainable, and asset allocation categories.
Investment Manager | Trustees | Richard T. Kircher |
Putnam Investment | Kenneth R. Leibler, Chair | Vice President and |
Management, LLC | Barbara M. Baumann, Vice Chair | BSA Compliance Officer |
100 Federal Street | Liaquat Ahamed | |
Boston, MA 02110 | Katinka Domotorffy | Martin Lemaire |
Catharine Bond Hill | Vice President and | |
Investment Sub-Advisor | Jennifer Williams Murphy | Derivatives Risk Manager |
Putnam Investments Limited | Marie Pillai | |
16 St James’s Street | George Putnam III | Susan G. Malloy |
London, England SW1A 1ER | Robert L. Reynolds | Vice President and |
Manoj P. Singh | Assistant Treasurer | |
Marketing Services | Mona K. Sutphen | |
Putnam Retail Management | Alan G. McCormack | |
Limited Partnership | Officers | Vice President and |
100 Federal Street | Robert L. Reynolds | Derivatives Risk Manager |
Boston, MA 02110 | President | |
Denere P. Poulack | ||
Custodian | James F. Clark | Assistant Vice President, |
State Street Bank | Vice President, Chief Compliance | Assistant Clerk, and |
and Trust Company | Officer, and Chief Risk Officer | Assistant Treasurer |
Legal Counsel | Michael J. Higgins | Janet C. Smith |
Ropes & Gray LLP | Vice President, Treasurer, | Vice President, |
and Clerk | Principal Financial Officer, | |
Principal Accounting Officer, | ||
Jonathan S. Horwitz | and Assistant Treasurer | |
Executive Vice President, | ||
Principal Executive Officer, | Stephen J. Tate | |
and Compliance Liaison | Vice President and | |
Chief Legal Officer | ||
Mark C. Trenchard | ||
Vice President |
This report is for the information of shareholders of Putnam Short-Term Municipal Income Fund. It may also be used as sales literature when preceded or accompanied by the current prospectus, the most recent copy of Putnam’s Quarterly Performance Summary, and Putnam’s Quarterly Ranking Summary. For more recent performance, please visit putnam.com. Investors should carefully consider the investment objectives, risks, charges, and expenses of a fund, which are described in its prospectus. For this and other information or to request a prospectus or summary prospectus, call 1-800-225-1581 toll free. Please read the prospectus carefully before investing. The fund’s Statement of Additional Information contains additional information about the fund’s Trustees and is available without charge upon request by calling 1-800-225-1581.
Item 2. Code of Ethics: |
Not applicable |
Item 3. Audit Committee Financial Expert: |
Not applicable |
Item 4. Principal Accountant Fees and Services: |
Not applicable |
Item 5. Audit Committee of Listed Registrants |
Not applicable |
Item 6. Schedule of Investments: |
The registrant’s schedule of investments in unaffiliated issuers is included in the report to shareholders in Item 1 above. |
Item 7. Disclosure of Proxy Voting Policies and Procedures For Closed-End Management Investment Companies: |
Not applicable |
Item 8. Portfolio Managers of Closed-End Investment Companies |
Not Applicable |
Item 9. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers: |
Not applicable |
Item 10. Submission of Matters to a Vote of Security Holders: |
Not applicable |
Item 11. Controls and Procedures: |
(a) The registrant’s principal executive officer and principal financial officer have concluded, based on their evaluation of the effectiveness of the design and operation of the registrant’s disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the design and operation of such procedures are generally effective to provide reasonable assurance that information required to be disclosed by the registrant in this report is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms. |
(b) Changes in internal control over financial reporting: Not applicable |
Item 12. Disclosures of Securities Lending Activities for Closed-End Investment Companies: |
Not Applicable |
Item 13. Exhibits: |
(a)(1) Not applicable |
(b) The certifications required by Rule 30a-2(b) under the Investment Company Act of 1940, as amended, are filed herewith. |
SIGNATURES |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. |
Putnam Funds Trust |
By (Signature and Title): |
/s/ Janet C. Smith Janet C. Smith Principal Accounting Officer |
Date: July 26, 2023 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. |
By (Signature and Title): |
/s/ Jonathan S. Horwitz Jonathan S. Horwitz Principal Executive Officer |
Date: July 26, 2023 |
By (Signature and Title): |
/s/ Janet C. Smith Janet C. Smith Principal Financial Officer |
Date: July 26, 2023 |