| 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, 2024 |
| Date of reporting period: | December 1, 2023 – May 31, 2024 |
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 |  | |
| Class A [PSMEX] | ||
| Semi-Annual Shareholder Report | May 31, 2024 | ||
 | ||
You can find additional information about the Fund at https://www.franklintempleton.com/regulatory-fund-documents. You can also request this information by contacting us at (800) 225-1581.
Class Name | Costs of a $10,000 investment | Costs paid as a percentage of a $10,000 investment†,* |
| Class A | $30 | 0.61% |
| † | Annualized. |
| * | Reflects fee waivers and/or expense reimbursements, without which expenses would have been higher. |
Total Net Assets | $169,001,500 |
Total Number of Portfolio Holdings* | 184 |
Portfolio Turnover Rate | 14% |
| * | Includes derivatives, if applicable. |
| Cash and Equivalents, if any, represent the market value weights of cash, derivatives, short-term securities, and other unclassified assets in the portfolio. Holdings and allocations may vary over time. |
 | WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND? |
Additional information is available on https://www.franklintempleton.com/regulatory-fund-documents, including its: | |
| • prospectus • proxy voting information • financial information • holdings • tax information |
| Putnam Short-Term Municipal Income Fund | ||
| NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | PAGE 1 | 39211-STSA-0724 |
Putnam Short-Term Municipal Income Fund |  | |
| Class C [PSMTX] | ||
| Semi-Annual Shareholder Report | May 31, 2024 | ||
 | ||
You can find additional information about the Fund at https://www.franklintempleton.com/regulatory-fund-documents. You can also request this information by contacting us at (800) 225-1581.
Class Name | Costs of a $10,000 investment | Costs paid as a percentage of a $10,000 investment†,* |
| Class C | $68 | 1.36% |
| † | Annualized. |
| * | Reflects fee waivers and/or expense reimbursements, without which expenses would have been higher. |
Total Net Assets | $169,001,500 |
Total Number of Portfolio Holdings* | 184 |
Portfolio Turnover Rate | 14% |
| * | Includes derivatives, if applicable. |
| Cash and Equivalents, if any, represent the market value weights of cash, derivatives, short-term securities, and other unclassified assets in the portfolio. Holdings and allocations may vary over time. |
 | WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND? |
Additional information is available on https://www.franklintempleton.com/regulatory-fund-documents, including its: | |
| • prospectus • proxy voting information • financial information • holdings • tax information |
| Putnam Short-Term Municipal Income Fund | ||
| NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | PAGE 1 | 39211-STSC-0724 |
Putnam Short-Term Municipal Income Fund |  | |
| Class R6 [PYSTX] | ||
| Semi-Annual Shareholder Report | May 31, 2024 | ||
 | ||
You can find additional information about the Fund at https://www.franklintempleton.com/regulatory-fund-documents. You can also request this information by contacting us at (800) 225-1581.
Class Name | Costs of a $10,000 investment | Costs paid as a percentage of a $10,000 investment†,* |
| Class R6 | $17 | 0.33% |
| † | Annualized. |
| * | Reflects fee waivers and/or expense reimbursements, without which expenses would have been higher. |
Total Net Assets | $169,001,500 |
Total Number of Portfolio Holdings* | 184 |
Portfolio Turnover Rate | 14% |
| * | Includes derivatives, if applicable. |
| Cash and Equivalents, if any, represent the market value weights of cash, derivatives, short-term securities, and other unclassified assets in the portfolio. Holdings and allocations may vary over time. |
 | WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND? |
Additional information is available on https://www.franklintempleton.com/regulatory-fund-documents, including its: | |
| • prospectus • proxy voting information • financial information • holdings • tax information |
| Putnam Short-Term Municipal Income Fund | ||
| NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | PAGE 1 | 39211-STSR6-0724 |
Putnam Short-Term Municipal Income Fund |  | |
| Class Y [PSMYX] | ||
| Semi-Annual Shareholder Report | May 31, 2024 | ||
 | ||
You can find additional information about the Fund at https://www.franklintempleton.com/regulatory-fund-documents. You can also request this information by contacting us at (800) 225-1581.
Class Name | Costs of a $10,000 investment | Costs paid as a percentage of a $10,000 investment†,* |
| Class Y | $18 | 0.36% |
| † | Annualized. |
| * | Reflects fee waivers and/or expense reimbursements, without which expenses would have been higher. |
Total Net Assets | $169,001,500 |
Total Number of Portfolio Holdings* | 184 |
Portfolio Turnover Rate | 14% |
| * | Includes derivatives, if applicable. |
| Cash and Equivalents, if any, represent the market value weights of cash, derivatives, short-term securities, and other unclassified assets in the portfolio. Holdings and allocations may vary over time. |
 | WHERE CAN I FIND ADDITIONAL INFORMATION ABOUT THE FUND? |
Additional information is available on https://www.franklintempleton.com/regulatory-fund-documents, including its: | |
| • prospectus • proxy voting information • financial information • holdings • tax information |
| Putnam Short-Term Municipal Income Fund | ||
| NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | PAGE 1 | 39211-STSY-0724 |
| 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. Investments: |
| The registrant’s schedule of investments in unaffiliated issuers is included in the Financial Statements and Other Important Information in Item 7 below. |
| Item 7. Financial Statements and Financial Highlights for Open-End Management Investment Companies. |
Putnam
Short-Term Municipal Income Fund
Financial Statements and Other Important Information
Semiannual | May 31, 2024
Table of Contents
| Financial Statements and Other Important Information—Semiannual | franklintempleton.com |
| The fund’s portfolio 5/31/24 (Unaudited) | ||
Key to holding’s abbreviations
| AGM Assured Guaranty Municipal Corporation |
| BAM Build America Mutual |
| COP Certificates of Participation |
| FHA Insd. Federal Housing Administration Insured |
| FHLMC Coll. Federal Home Loan Mortgage Corporation Collateralized |
| FNMA Coll. Federal National Mortgage Association Collateralized |
| G.O. Bonds General Obligation Bonds |
| GNMA Coll. Government National Mortgage Association Collateralized |
| LOC Letter of Credit |
| 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 3.36% as of the close of the reporting period. |
| MUNICIPAL BONDS AND NOTES (99.3%)* | Rating** | Principal amount | Value | |
| Alabama (0.3%) | ||||
| Southeast Energy Auth. Commodity Supply Mandatory Put Bonds (12/1/29), Ser. A-1, 5.50%, 1/1/53 | A1 | $500,000 | $530,101 | |
| 530,101 | ||||
| Alaska (0.9%) | ||||
| AK State Indl. Dev. & Export Auth. Rev. Bonds, (Dena’ Nena’ Henash), 5.00%, 10/1/28 | A+/F | 1,530,000 | 1,582,036 | |
| 1,582,036 | ||||
| Arizona (1.3%) | ||||
| Coconino Cnty., Poll. Control Corp. Mandatory Put Bonds (3/31/26), (NV Pwr. Co.), Ser. B, 3.75%, 3/1/39 | A2 | 750,000 | 740,629 | |
| 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 | 421,695 | |
| Salt Verde, Fin. Corp. Gas Rev. Bonds, 5.25%, 12/1/25 | A3 | 1,000,000 | 1,016,345 | |
| 2,178,669 | ||||
| California (10.5%) | ||||
| CA Hlth. Fac. Fin. Auth. Rev. Bonds, (Adventist Hlth. Syst./West Oblig. Group), Ser. A, 4.00%, 3/1/43 | BBB+ | 230,000 | 204,507 | |
| CA Hsg. Fin. Agcy. Mandatory Put Bonds (8/1/26), Ser. A-2, FHA Insd., 3.60%, 8/1/63 | Aa2 | 2,500,000 | 2,469,281 | |
| CA Hsg. Fin. Agcy. Ltd. Oblig. Multi-Fam. Hsg. Mandatory Put Bonds (11/1/26), (Del Sur Family Hsg.), 5.00%, 5/1/54 | Aaa | 5,000,000 | 5,101,907 | |
| CA School Fac. Fin. Auth. 144A Rev. Bonds, (Alliance for College Ready Pub. Schools), 4.00%, 7/1/25 | BBB | 1,345,000 | 1,333,771 | |
| CA State Enterprise Dev. Auth. Student Hsg. Rev. Bonds, (Provident Group-SDSU Properties, LLC), Ser. A | ||||
| 5.00%, 8/1/26 | Baa3 | 100,000 | 100,951 | |
| 5.00%, 8/1/24 | Baa3 | 100,000 | 100,009 | |
| CA State Hlth. Fac. Fin. Auth. Rev. Bonds, (Episcopal Cmnty. & Svcs for Seniors), Ser. A, 3.85%, 11/15/27 | A−/F | 1,500,000 | 1,491,998 | |
| CA State Infrastructure & Econ. Dev. Bank 144A Mandatory Put Bonds (1/30/25), (DesertXpress Enterprises, LLC), 3.95%, 1/1/50 | VMIG1 | 500,000 | 500,002 | |
| CA State Muni. Fin. Auth. COP, (Palomar Hlth.), Ser. A, AGM | ||||
| 5.00%, 11/1/28 | AA | 115,000 | 121,619 | |
| 5.00%, 11/1/27 | AA | 100,000 | 104,360 | |
| CA State Muni. Fin. Auth. Rev. Bonds | ||||
| (CA Lutheran U.), 5.00%, 10/1/26 | Baa1 | 570,000 | 582,450 | |
| (HumanGood Oblig. Group), Ser. A, 4.00%, 10/1/30 | A−/F | 165,000 | 165,430 | |
| CA State U. Mandatory Put Bonds (11/1/26), Ser. B-2, 0.55%, 11/1/49 | Aa2 | 2,000,000 | 1,796,048 | |
| Imperial Cnty., Local Trans. Auth. Sales Tax Rev. Bonds, Ser. E, AGM, 5.00%, 6/1/32 | AA | 950,000 | 988,259 | |
| Port of Oakland Rev. Bonds, 1.181%, 5/1/25 | A1 | 503,028 | 484,464 | |
| San Jose, Multi-Fam. Hsg. Mandatory Put Bonds (6/1/26), (Allied 1510 Parkmoor), Ser. F-2, 5.00%, 6/1/27 | Aaa | 2,000,000 | 2,040,484 | |
| 17,585,540 | ||||
| Colorado (4.7%) | ||||
| CO State Ed. Loan Program Rev. Bonds, Ser. B, 4.00%, 6/28/24 | SP-1+ | 3,250,000 | 3,249,751 | |
| CO State Hlth. Fac. Auth. Hosp. Mandatory Put Bonds (8/1/26), (CommonSpirit Hlth.), Ser. B-2, 5.00%, 8/1/49 | A3 | 1,000,000 | 1,017,171 | |
| CO State Hlth. Fac. Auth. Hosp. Rev. Bonds, (CommonSpirit Hlth.), Ser. A, 5.00%, 11/1/24 | A3 | 800,000 | 803,380 | |
| CO State Hlth. Fac. Auth. Retirement Fac. Rev. Bonds, (United Cmnty. and Hsg. Dev. Corp.), Ser. B, zero %, 7/15/24 (Escrowed to maturity) | Aaa | 1,820,000 | 1,811,021 | |
Putnam Short-Term Municipal Income Fund 1 | |
| MUNICIPAL BONDS AND NOTES (99.3%)* cont. | Rating** | Principal amount | Value | |
| Colorado cont. | ||||
| E-470 Pub. Hwy. Auth. Mandatory Put Bonds (9/1/24), Ser. B, 3.921%, 9/1/39 | A1 | $1,000,000 | $998,878 | |
| Regl. Trans. Dist. Rev. Bonds, (Denver Transit Partners, LLC), 5.00%, 7/15/24 | Baa1 | 100,000 | 100,059 | |
| 7,980,260 | ||||
| Connecticut (2.1%) | ||||
| CT State Hlth. & Edl. Fac. Auth. Mandatory Put Bonds (2/10/26), Ser. A, 2.80%, 7/1/48 | Aaa | 1,000,000 | 978,570 | |
| CT State Hlth. & Edl. Fac. Auth. Rev. Bonds, (Stamford Hosp. Oblig. Group (The)), Ser. L-1, 4.00%, 7/1/24 | BBB+ | 600,000 | 599,351 | |
| CT State Hlth. & Edl. Fac. Auth. VRDN, (Yale U.), Ser. A-1, 3.75%, 7/1/42 | VMIG 1 | 2,000,000 | 2,000,000 | |
| 3,577,921 | ||||
| District of Columbia (3.2%) | ||||
| DC Rev. Bonds | ||||
| (D.C. Intl. School), 5.00%, 7/1/27 | BBB | 300,000 | 305,522 | |
| (Plenary Infrastructure DC, LLC), 5.00%, 8/31/25 | A3 | 500,000 | 505,683 | |
| Metro. DC Arpt. Auth. Arpt. Syst. Rev. Bonds, Ser. A, 5.00%, 10/1/30 | Aa3 | 2,000,000 | 2,001,221 | |
| Metro. DC Arpt. Auth. Aviation Rev. Bonds, Ser. A, 5.00%, 10/1/27 | Aa3 | 2,540,000 | 2,541,862 | |
| 5,354,288 | ||||
| Florida (9.5%) | ||||
| Broward Cnty., Hsg. Fin. Auth. Multi-Fam. Hsg. | ||||
| Mandatory Put Bonds, (3/1/26), (Pinnacle 441 Phase 2, LLC), 4.05%, 9/1/56 | Aaa | 1,000,000 | 997,902 | |
| Mandatory Put Bonds, (4/1/26), (St. Joseph Manor II, LLLP), 3.50%, 4/1/41 | Aaa | 1,000,000 | 985,512 | |
| FL Insurance Assistance Interlocal Agcy., Inc. VRDN Ser. A-2, 4.16%, 9/1/32 | VMIG 1 | 2,500,000 | 2,500,000 | |
| FL State Dev. Fin. Corp. Ed. Fac. Rev. Bonds, (Nova Southeastern U., Inc.), 5.00%, 4/1/29 | A3 | 150,000 | 158,528 | |
| FL State Hsg. Fin. Corp. Mandatory Put Bonds (2/1/26), (Northside Property III, Ltd.), GNMA Coll., 5.00%, 2/1/27 | AA+ | 2,295,000 | 2,327,390 | |
| FL State Hsg. Fin. Corp. Rev. Bonds, Ser. 1, GNMA Coll., FNMA Coll., FHLMC Coll., 3.50%, 7/1/52 | Aaa | 2,025,000 | 1,969,798 | |
| Lakewood Ranch, Stewardship Dist. Special Assmt. Bonds, (Taylor Ranch), 5.40%, 5/1/28 | BB−/P | 250,000 | 253,870 | |
| Miami-Dade Cnty., Mandatory Put Bonds (7/1/24), (Waste Management, Inc.), Ser. B, 3.735%, 11/1/48 | A− | 1,000,000 | 999,626 | |
| 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 | 503,747 | |
| Mandatory Put Bonds, (9/1/25), (Fairfield Miami Gardens LP), Ser. B, 4.05%, 9/1/26 | Aaa | 1,500,000 | 1,497,058 | |
| Pinellas Cnty., Indl. Dev. Auth. Rev. Bonds, (Foundation for Global Understanding, Inc.), 5.00%, 7/1/29 | BBB/P | 535,000 | 544,352 | |
| Polk Cnty., Fin. Auth. Multi-Fam. Hsg. Mandatory Put Bonds (6/1/26), (Episcopal Catholic Apts.), 4.15%, 12/1/40 | Aaa | 3,000,000 | 2,999,728 | |
| 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 | 192,209 | |
| 15,929,720 | ||||
| Georgia (3.2%) | ||||
| Burke Cnty., Dev. Auth. Poll. Control | ||||
| Mandatory Put Bonds, (3/12/27), (GA Pwr. Co.) 3.375%, 3/12/27 | A | 1,500,000 | 1,480,736 | |
| Mandatory Put Bonds, (8/19/25), (GA Pwr. Co.) 2.875%, 12/1/49 | A | 500,000 | 491,133 | |
| Mandatory Put Bonds, (6/13/24), (GA Pwr. Co.) 2.15%, 10/1/32 | A | 230,000 | 229,823 | |
| DeKalb Cnty., Hsg. Auth. Multi-Fam. Hsg. Rev. Bonds, (HADC Pk. at 500, LLC), 4.00%, 3/1/34 | A+ | 780,000 | 766,303 | |
| Main Street Natural Gas, Inc. Gas Supply Mandatory Put Bonds | ||||
| Ser. A, 4.00%, 9/1/27 | Aa1 | 1,000,000 | 998,267 | |
| Ser. C, 4.00%, 12/1/28 | A3 | 1,000,000 | 998,943 | |
| Monroe Cnty., Dev. Auth. Poll. Control Mandatory Put Bonds (3/6/26), (GA Pwr. Co.), 3.875%, 10/1/48 | A | 500,000 | 501,102 | |
| 5,466,307 | ||||
| Hawaii (0.3%) | ||||
| Honolulu City & Cnty., Mulit-Fam. Mandatory Put Bonds (6/1/26), (Komohale Mauakea Venture LP), 5.00%, 6/1/27 | Aaa | 535,000 | 543,980 | |
| 543,980 | ||||
| Illinois (4.4%) | ||||
| Chicago, O’Hare Intl. Arpt. Fac. Charge Rev. Bonds, 5.00%, 1/1/26 | A+ | 3,315,000 | 3,311,641 | |
| IL State G.O. Bonds, Ser. C, 4.00%, 3/1/28 | A3 | 1,500,000 | 1,504,416 | |
| IL State Fin. Auth. | ||||
| Mandatory Put Bonds, (8/15/25), (U. of Chicago Med. Ctr.), Ser. B-1, 5.00%, 8/15/52 | AA− | 500,000 | 505,305 | |
| Mandatory Put Bonds, (11/15/24), (OSF Hlth. Care Syst. Oblig. Group), Ser. B-1, 5.00%, 5/15/50 | A | 500,000 | 500,087 | |
| IL State Fin. Auth. Rev. Bonds, (The Washington and Jane Smith Home), 4.00%, 10/15/24 | BBB−/F | 215,000 | 213,556 | |
2 Putnam Short-Term Municipal Income Fund | |
| MUNICIPAL BONDS AND NOTES (99.3%)* cont. | Rating** | Principal amount | Value | |
| Illinois cont. | ||||
| IL State Hsg. Dev. Auth. Rev. Bonds, Ser. D, GNMA Coll., FNMA Coll., FHLMC Coll., 3.05%, 10/1/24 | Aaa | $480,000 | $478,053 | |
| IL State Hsg. Dev. Auth. Multi-Fam. Hsg. Mandatory Put Bonds (6/1/25), (South Shore Preservation LP), FHA Insd., 4.00%, 6/1/26 | Aaa | 1,000,000 | 996,705 | |
| 7,509,763 | ||||
| Indiana (1.6%) | ||||
| Hammond, Multi-School Bldg. Corp. Rev. Bonds, 5.00%, 7/15/24 | AA+ | 1,160,000 | 1,161,096 | |
| Rockport, Poll. Control Rev. Bonds, (AEP Generating Co.), 3.125%, 7/1/25 | BBB+ | 500,000 | 491,389 | |
| Whiting, Env. Fac. Mandatory Put Bonds (6/5/26), (BP Products North America, Inc.), Ser. A, 5.00%, 12/1/44 | A1 | 1,000,000 | 1,016,964 | |
| 2,669,449 | ||||
| Kentucky (4.3%) | ||||
| KY State Pub. Energy Auth. Gas Supply Ser. A | ||||
| 5.00%, 7/1/28 | A2 | 1,000,000 | 1,016,637 | |
| 5.00%, 7/1/27 | A2 | 525,000 | 534,512 | |
| KY State Pub. Energy Auth. Gas Supply | ||||
| Mandatory Put Bonds (6/1/26), Ser. A, 4.00%, 12/1/50 | A1 | 1,040,000 | 1,037,434 | |
| Mandatory Put Bonds (6/1/25), Ser. C-1, 4.00%, 6/1/25 | A1 | 1,500,000 | 1,499,336 | |
| Owen Cnty., Wtr. Fac. Mandatory Put Bonds (9/1/28), (KY-American Wtr. Co.), 3.875%, 6/1/40 | A | 2,250,000 | 2,234,243 | |
| Trimble Cnty., Env. Fac. Mandatory Put Bonds (6/1/27), (Louisville Gas and Elec. Co.), 4.70%, 6/1/54 | A1 | 1,000,000 | 1,000,937 | |
| 7,323,099 | ||||
| Louisiana (1.5%) | ||||
| LA State Offshore Term. Auth. Deepwater Port Mandatory Put Bonds (2/1/24), (Loop, LLC), Ser. C, 4.20%, 9/1/34 | A3 | 1,500,000 | 1,500,518 | |
| LA State Pub. Fac. Auth. Solid Waste Disp. Fac. 144A Mandatory Put Bonds (11/1/25), (ElementUS Minerals, LLC), 5.00%, 10/1/43 | Aaa | 1,000,000 | 1,004,981 | |
| St. John The Baptist Parish Mandatory Put Bonds (7/1/24), (Marathon Oil Corp.), 2.125%, 6/1/37 | Baa3 | 100,000 | 99,752 | |
| 2,605,251 | ||||
| Maryland (0.2%) | ||||
| Frederick Cnty., Special Tax Bonds, (Oakdale-Lake Linganore), 2.625%, 7/1/24 | BB/P | 70,000 | 69,854 | |
| MD State Hlth. & Higher Ed. Fac. Auth. Rev. Bonds, (Stevenson U.), 5.00%, 6/1/29 | BBB− | 200,000 | 205,943 | |
| 275,797 | ||||
| Massachusetts (—%) | ||||
| Lowell, Collegiate Charter School Rev. Bonds, 4.00%, 6/15/24 | BB−/P | 20,000 | 19,994 | |
| 19,994 | ||||
| Michigan (1.6%) | ||||
| Detroit, Ser. B, 6.844%, 5/1/28 | Baa2 | 620,000 | 631,408 | |
| Detroit, G.O. Bonds, 5.00%, 4/1/25 | Baa2 | 600,000 | 603,067 | |
| Flint, Hosp. Bldg. Auth. Rev. Bonds, (Hurley Med. Ctr.), 4.75%, 7/1/28 | Ba1 | 425,000 | 407,829 | |
| MI State Fin. Auth. Rev. Bonds | ||||
| (Detroit, Regl. Convention Fac. Auth.), Ser. H-1, 5.00%, 10/1/28 | AA− | 1,000,000 | 1,003,427 | |
| (Tobacco Settlement), Ser. A-1, 2.326%, 6/1/30 | A | 125,607 | 123,065 | |
| 2,768,796 | ||||
| Minnesota (3.1%) | ||||
| Duluth, Econ. Dev. Auth. Rev. Bonds, (Benedictine Hlth. Syst. Oblig. Group), Ser. A, 3.00%, 7/1/24 | BB/P | 200,000 | 199,600 | |
| Duluth, Econ. Dev. Auth. Hlth. Care Fac. Rev. Bonds, (St. Luke’s Hosp. of Duluth Oblig. Group), 5.00%, 6/15/27 | AA− | 535,000 | 553,143 | |
| Minnetonka, Hsg. Fac. VRDN, (Beacon Hill, Inc.), FNMA Coll., 3.32%, 5/15/34 | VMIG 1 | 575,000 | 575,000 | |
| MN State Res. Hsg. Fin. Agcy. Rev. Bonds, Ser. A, 4.00%, 7/1/38 | Aa1 | 10,000 | 10,000 | |
| MN State Rural Wtr. Fin. Auth. Rev. Bonds, (Pub. Projects Construction), 4.375%, 4/1/25 | AAA/P | 2,000,000 | 2,000,176 | |
| Northern MN Muni. Pwr. Agcy. Elec. Syst. Rev. Bonds | ||||
| 5.00%, 1/1/26 | A3 | 255,000 | 260,126 | |
| 5.00%, 1/1/25 | A3 | 220,000 | 221,467 | |
| Wadena, Rev. Bonds, (Astera Hlth.), Ser. A | ||||
| 5.00%, 12/1/30 | A2 | 375,000 | 403,861 | |
| 5.00%, 12/1/29 | A2 | 290,000 | 309,365 | |
| 5.00%, 12/1/28 | A2 | 275,000 | 290,002 | |
| 5.00%, 12/1/27 | A2 | 265,000 | 276,418 | |
| 5.00%, 12/1/26 | A2 | 195,000 | 200,796 | |
| 5,299,954 | ||||
Putnam Short-Term Municipal Income Fund 3 | |
| MUNICIPAL BONDS AND NOTES (99.3%)* cont. | Rating** | Principal amount | Value | |
| Mississippi (0.6%) | ||||
| MS Bus. Fin. Comm. Gulf Opportunity Zone Mandatory Put Bonds (1/2/24), (Chevron USA, Inc.), Ser. B, 4.00%, 12/1/30 | Aa2 | $980,000 | $980,000 | |
| 980,000 | ||||
| Missouri (2.1%) | ||||
| Kansas City, Indl. Dev. Auth. Arpt. Special Oblig. Rev. Bonds | ||||
| (Kansas City, Intl. Arpt.), 5.00%, 3/1/30 | A2 | 1,000,000 | 1,044,055 | |
| 5.00%, 3/1/27 | A2 | 1,000,000 | 1,026,766 | |
| 5.00%, 3/1/26 | A2 | 500,000 | 507,868 | |
| MI State Hlth. & Edl. Fac. Rev. Bonds, (U. of Hlth. Sciences & Pharmacy in St. Louis), 5.00%, 5/1/28 | BBB− | 500,000 | 494,632 | |
| Poplar Bluff, Regl. Trans. Dist. Rev. Bonds, Ser. B, 3.375%, 12/1/31 | BBB | 500,000 | 464,114 | |
| 3,537,435 | ||||
| Montana (0.8%) | ||||
| Forsyth, Poll. Control Rev. Bonds, (NorthWestern Corp.), 3.875%, 7/1/28 | A3 | 1,300,000 | 1,292,166 | |
| MT State Board of Hsg. Rev. Bonds, Ser. A-2, FHA Insd., 3.00%, 12/1/43 | Aa1 | 5,000 | 4,971 | |
| 1,297,137 | ||||
| Nebraska (1.8%) | ||||
| Central Plains Energy Project NE Gas Supply Mandatory Put Bonds (8/1/25), 4.00%, 12/1/49 | Aa1 | 2,000,000 | 2,002,488 | |
| Central Plains, Energy (No. 3), Ser. A, 5.00%, 9/1/30 | BBB+ | 1,000,000 | 1,042,323 | |
| 3,044,811 | ||||
| Nevada (0.9%) | ||||
| Clark Cnty., Arpt. Rev. Bonds, (Jet Aviation Fuel Tax), 5.00%, 7/1/26 | Aa3 | 500,000 | 511,991 | |
| Humboldt Cnty., Poll. Control (Sierra Pacific Pwr. Co,), 3.55%, 10/1/29 | A | 1,000,000 | 977,767 | |
| 1,489,758 | ||||
| New Jersey (3.2%) | ||||
| Hudson Cnty., Impt. Auth. Rev. Bonds, Class B-1, 5.00%, 7/24/24 | SP-1+ | 3,000,000 | 3,003,866 | |
| NJ State Econ. Dev. Auth. Mandatory Put Bonds (12/3/29), (American Water Co., Inc.), 2.20%, 10/1/39 | A1 | 500,000 | 432,174 | |
| NJ State Higher Ed. Assistance Auth. Rev. Bonds, Ser. B, 5.00%, 12/1/26 | Aaa | 1,015,000 | 1,033,298 | |
| NJ State Hlth. Care Fac. Fin. Auth. VRDN, (AHS Hosp. Corp.), Ser. B, 3.36%, 7/1/36 | VMIG 1 | 1,000,000 | 1,000,000 | |
| 5,469,338 | ||||
| New Mexico (1.9%) | ||||
| Farmington, Poll. Control Mandatory Put Bonds (6/1/29), (Pub. Svcs. Co. of NM), Ser. B, 3.875%, 6/1/40 ## | Baa2 | 1,000,000 | 994,751 | |
| Farmington, Poll. Control Rev. Bonds, (Pub. Service Co. of NM), Ser. B, 2.15%, 4/1/33 | Baa2 | 250,000 | 196,620 | |
| NM State Mtge. Fin. Auth. Multi-Fam. Hsg. Mandatory Put Bonds (9/1/25), (Mountain View II & III Apt.), 5.00%, 2/1/42 | Aaa | 2,000,000 | 2,012,658 | |
| 3,204,029 | ||||
| New York (5.9%) | ||||
| Long Island, Pwr. Auth. Elec. Syst. | ||||
| Mandatory Put Bonds (9/1/26), Ser. B, 1.50%, 9/1/51 | A2 | 200,000 | 187,027 | |
| Mandatory Put Bonds (9/1/25), Ser. B 0.85%, 9/1/50 | A2 | 500,000 | 478,093 | |
| 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 | 1,462,788 | |
| NY City, Hsg. Dev. Corp. Multi-Fam. Hsg. Mandatory Put Bonds (11/1/28), 4.30%, 11/1/63 | AA+ | 3,250,000 | 3,278,145 | |
| NY State Dorm. Auth. Rev. Bonds, (St. Joseph’s College) | ||||
| 5.00%, 7/1/30 | BBB−/F | 75,000 | 74,522 | |
| 5.00%, 7/1/29 | BBB−/F | 75,000 | 74,600 | |
| 5.00%, 7/1/28 | BBB−/F | 75,000 | 74,595 | |
| 5.00%, 7/1/26 | BBB−/F | 200,000 | 199,262 | |
| 5.00%, 7/1/24 | BBB−/F | 175,000 | 175,013 | |
| NY State Dorm. Auth. Personal Income Tax Rev. Bonds, Ser. B, 5.113%, 3/15/25 | Aa1 | 750,000 | 748,455 | |
| NY State Trans. Special Fac. Dev. Corp. Rev. Bonds, (JFK Intl. Arpt. Term. 4, LLC), 5.00%, 12/1/25 | Baa1 | 225,000 | 227,448 | |
| Philipstown, G.O. Bonds, Ser. B, 4.75%, 7/5/24 | A2 | 2,000,000 | 2,000,356 | |
| Port Auth. of NY & NJ Rev. Bonds, Ser. 207, 5.00%, 9/15/25 | Aa3 | 960,000 | 975,014 | |
| 9,955,318 | ||||
4 Putnam Short-Term Municipal Income Fund | |
| MUNICIPAL BONDS AND NOTES (99.3%)* cont. | Rating** | Principal amount | Value | |
| North Carolina (1.6%) | ||||
| Charlotte-Mecklenburg, Hosp. Auth. Hlth. Care Syst. Mandatory Put Bonds (10/31/25), (Atrium Hlth.), Ser. E, 0.80%, 1/15/48 | Aa3 | $2,000,000 | $1,917,857 | |
| NC State Med. Care Comm. Retirement Fac. (United Methodist Retirement Homes, Inc. (The)) | ||||
| 4.25%, 10/1/28 | BBB/F | 250,000 | 250,789 | |
| 3.75%, 10/1/28 | BBB/F | 500,000 | 496,037 | |
| 2,664,683 | ||||
| North Dakota (0.6%) | ||||
| Cass Cnty., Joint Wtr. Resource Dist. G.O. Bonds, Ser. A, 3.45%, 4/1/27 | Aa3 | 1,000,000 | 988,545 | |
| 988,545 | ||||
| Ohio (3.0%) | ||||
| Akron Bath Coply Joint Twp. Hosp. Dist. Rev. Bonds, (Summa Hlth. Syst. Oblig. Group) | ||||
| 5.00%, 11/15/27 | BBB+/F | 180,000 | 184,248 | |
| 5.00%, 11/15/25 | BBB+/F | 255,000 | 257,785 | |
| OH State Higher Edl. Fac. Comm. Rev. Bonds | ||||
| (Cleveland Inst. of Music (The)), 5.00%, 12/1/27 | BBB− | 570,000 | 568,830 | |
| (Ashtabula Cnty. Med. Ctr.), 5.00%, 1/1/26 | BBB+/F | 100,000 | 100,500 | |
| (Ashtabula Cnty. Med. Ctr.), 5.00%, 1/1/25 | BBB+/F | 100,000 | 100,077 | |
| OH State Private Activity Rev. Bonds, (Portsmouth Bypass), 5.00%, 12/31/25 | A3 | 1,820,000 | 1,830,998 | |
| 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 | 496,283 | |
| Youngstown, State U. Rev. Bonds, 5.00%, 12/15/30 | A+ | 1,535,000 | 1,569,727 | |
| 5,108,448 | ||||
| Pennsylvania (4.1%) | ||||
| Chester Cnty., Indl. Dev. Auth. (Avon Grove Charter School), 5.00%, 3/1/27 | BBB− | 1,600,000 | 1,609,359 | |
| Geisinger, Auth. Hlth. Syst. Mandatory Put Bonds (2/15/27), (Geisinger Hlth. Syst.), 5.00%, 4/1/43 | AA− | 2,000,000 | 2,051,936 | |
| PA State Econ. Dev. Fin. Auth. Rev. Bonds, (PennDOT Major Bridges), 5.00%, 12/31/29 | Baa2 | 270,000 | 286,699 | |
| PA State Hsg. Fin. Agcy. Rev. Bonds, Ser. 135-A, 3.00%, 10/1/51 | Aa1 | 1,530,000 | 1,486,748 | |
| Philadelphia, Arpt. Rev. Bonds, Ser. C, 5.00%, 7/1/24 | A2 | 750,000 | 750,313 | |
| Philadelphia, Auth. for Indl. Dev. Rev. Bonds, (Independence Charter School-West), 4.00%, 6/15/29 | BB/P | 305,000 | 291,832 | |
| Philadelphia, Auth. for Indl. Dev. VRDN Ser. B-2, 3.34%, 10/1/30 (TD Bank, NA (LOC) (5/29/24)) | VMIG 1 | 445,000 | 445,000 | |
| 6,921,887 | ||||
| Puerto Rico (0.9%) | ||||
| Cmnwlth. of PR, FRN, zero %, 11/1/51 | BB/P | 12,932 | 6,692 | |
| Cmnwlth. of PR, G.O. Bonds, Ser. A1 | ||||
| 5.625%, 7/1/27 | BB/P | 1,000,000 | 1,045,700 | |
| 5.375%, 7/1/25 | BB/P | 400,000 | 403,501 | |
| 1,455,893 | ||||
| South Carolina (0.3%) | ||||
| SC State Pub. Svcs. Auth. Rev. Bonds | ||||
| Ser. C, 5.00%, 12/1/25 | A3 | 355,000 | 360,765 | |
| Ser. E, 5.00%, 12/1/25 | A3 | 150,000 | 152,436 | |
| 513,201 | ||||
| Tennessee (5.3%) | ||||
| Knoxville, Cmnty. Dev. Corp. Multi-Fam. | ||||
| Mandatory Put Bonds (6/1/26), (DGA Grosvenor Square), 4.00%, 12/1/27 | AA+ | 3,000,000 | 2,991,200 | |
| Mandatory Put Bonds (6/1/26),(DGA Holston LP), 3.75%, 12/1/27 | AA+ | 1,750,000 | 1,721,483 | |
| Metro. Nashville, Arpt. Auth. Rev. Bonds, Ser. B, 5.00%, 7/1/26 | A1 | 50,000 | 51,059 | |
| Tennergy Corp. Gas | ||||
| Mandatory Put Bonds (10/1/24), Ser. A, 5.00%, 2/1/50 | Aa1 | 2,655,000 | 2,662,338 | |
| Mandatory Put Bonds (9/1/28), Ser. A, 4.00%, 12/1/51 | A1 | 1,500,000 | 1,487,343 | |
| 8,913,423 | ||||
| Texas (7.5%) | ||||
| Clear Creek Ind. School Dist. Mandatory Put Bonds (8/15/25), Ser. B, PSFG, 3.60%, 2/15/35 | AAA | 300,000 | 299,353 | |
| Clifton, Higher Ed. Fin. Corp. Ed. Rev. Bonds, (Intl. Leadership of TX, Inc.), Ser. D, 5.25%, 8/15/27 | Baa3 | 500,000 | 505,653 | |
| Dallas, Hsg. Fin. Corp. Mandatory Put Bonds (12/1/25), (Ash Creek Hsg., LLC), FHA Insd., 5.00%, 7/1/26 | Aaa | 2,750,000 | 2,780,708 | |
| El Paso, Indpt. School Dist. Mandatory Put Bonds (8/1/26), 5.00%, 2/1/40 | Aa2 | 2,500,000 | 2,540,774 | |
| Fort Bend, Indpt. School Dist. Mandatory Put Bonds (8/1/26), Ser. B, PSFG, 0.72%, 8/1/51 | AAA | 840,000 | 770,104 | |
| Houston, Arpt. Syst. Rev. Bonds, Ser. A, AGM, 5.00%, 7/1/26 | AA | 1,000,000 | 1,023,178 | |
Putnam Short-Term Municipal Income Fund 5 | |
| MUNICIPAL BONDS AND NOTES (99.3%)* cont. | Rating** | Principal amount | Value | |
| Texas cont. | ||||
| Houston, Hsg. Fin. Corp. Multi-Fam. Hsg. Mandatory Put Bonds (8/1/26), (Summerdale Apt., LP), 5.00%, 8/1/41 | Aaa | $600,000 | $608,646 | |
| Houston, Indpt. School Dist. Mandatory Put Bonds (6/1/25), Ser. A-2, PSFG, 3.50%, 6/1/39 | Aaa | 2,000,000 | 1,985,403 | |
| Prosper, Indpt. School Dist. Mandatory Put Bonds (8/15/26), PSFG, 4.00%, 2/15/50 | Aaa | 1,000,000 | 999,191 | |
| SA Energy Acquisition Pub. Fac. Corp. Rev. Bonds, (Gas Supply), 5.50%, 8/1/25 | A2 | 75,000 | 75,991 | |
| 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 | 664,541 | |
| TX State Affordable Hsg. Corp. Rev. Bonds, Ser. A, GNMA Coll., 5.25%, 9/1/28 | Aaa | 40,000 | 40,362 | |
| TX State Pub. Fin. Auth. Rev. Bonds, (TX Southern U.), BAM, 5.00%, 5/1/25 | AA | 400,000 | 403,490 | |
| 12,697,394 | ||||
| Utah (1.0%) | ||||
| Infrastructure Agcy. Telecomm. Rev. Bonds, 5.00%, 10/15/27 | BBB−/F | 455,000 | 460,445 | |
| Salt Lake City, Arpt. Rev. Bonds, Ser. A, 5.00%, 7/1/29 | A+ | 500,000 | 512,297 | |
| UT Infrastructure Agcy. Rev. Bonds, Ser. A, 3.00%, 10/15/26 | BBB−/F | 250,000 | 240,404 | |
| UT Infrastructure Agcy. Telecomm. Rev. Bonds, 5.00%, 10/15/29 | BBB−/F | 500,000 | 511,505 | |
| 1,724,651 | ||||
| Virgin Islands (0.1%) | ||||
| Matching Fund Special Purpose Securitization Corp. Rev. Bonds, Ser. A, 5.00%, 10/1/25 | BB/P | 125,000 | 126,845 | |
| 126,845 | ||||
| Virginia (2.4%) | ||||
| Isle of Wright Cnty., Econ. Dev. Auth. Rev. Bonds, (Riverside Hlthcare. Assn.), AGM, 5.00%, 7/1/28 | AA | 340,000 | 356,612 | |
| James City Cnty., Econ. Dev. Auth. Res. Care Fac. Rev. Bonds, (Williamsburg Landing, Inc.), 5.50%, 12/1/28 | BB+/P | 170,000 | 170,978 | |
| Louisa, Indl. Dev. Auth. Poll Control Mandatory Put Bonds (5/28/27), (VA Elec. & Pwr. Co.), 3.80%, 11/1/35 | A2 | 1,600,000 | 1,589,839 | |
| VA State Pub. School Auth. Rev. Bonds, 3.00%, 8/1/26 | Aa1 | 2,000,000 | 1,968,221 | |
| 4,085,650 | ||||
| Washington (2.1%) | ||||
| Grays Harbor Cnty., Pub. Hosp. Dist. No. 1 Rev. Bonds, 5.75%, 12/1/26 | BB+ | 660,000 | 663,631 | |
| Port of Seattle Rev. Bonds, Ser. B, 5.00%, 5/1/27 | AA− | 1,000,000 | 1,029,845 | |
| Seattle, Muni. Lt. & Pwr. Mandatory Put Bonds (11/1/26), Ser. B, 3.61%, 5/1/45 | Aa2 | 1,500,000 | 1,465,192 | |
| WA State Hsg. Fin. Comm. Rev. Bonds, (Eastside Retirement Assn.), Ser. A, 5.00%, 7/1/25 | A−/F | 350,000 | 353,093 | |
| 3,511,761 | ||||
| Wisconsin (0.5%) | ||||
| Pub. Fin. Auth. Rev. Bonds | ||||
| (Northwest Nazarene U., Inc.), 5.00%, 10/1/25 | Baa3 | 500,000 | 501,666 | |
| (Roseman U. of Hlth. Sciences), 5.00%, 4/1/25 | BB | 420,000 | 421,356 | |
| 923,022 | ||||
| Total municipal bonds and notes (cost $168,809,434) | $167,814,154 | |||
| SHORT-TERM INVESTMENTS (—%)* | Shares | Value | |
| Putnam Short Term Investment Fund Class P 5.46% L | 66,273 | $66,273 | |
| Total short-term investments (cost $66,273) | $66,273 | ||
| TOTAL INVESTMENTS | ||
| Total investments (cost $168,875,707) | $167,880,427 | |
6 Putnam Short-Term Municipal Income Fund | |
| 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, 2023 through May 31, 2024. 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 Franklin Resources, Inc., and references to “ASC 820” represent Accounting Standards Codification 820 Fair Value Measurements and Disclosures. | |||
| * | Percentages indicated are based on net assets of $169,001,500. | ||
| ** | 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. Ratings are not covered by the Report of Independent Registered Public Accounting Firm. For further details regarding security ratings, please see the Statement of Additional Information. | ||
| ## | Forward commitment, in part or in entirety (Note 1). | ||
| 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 Securities Industry and Financial Markets Association (SIFMA) Municipal Swap Index, Intercontinental Exchange (ICE) London Interbank Offered Rate (LIBOR) USD 1 Month, ICE LIBOR USD 3 Month, US Secured Overnight Financing Rate (SOFR), Chicago Mercantile Exchange (CME) Term SOFR 3 Month or CME Term SOFR 6 Month rates, which were 3.36%, 5.44%, 5.60%, 5.34%, 5.34%, and 5.31%, 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): | |||
| Housing | 23.7% | ||
| Utilities | 11.5 | ||
| Health care | 11.3 | ||
| Transportation | 10.3 | ||
ASC 820 establishes a three-level hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of the fund’s investments. The three levels are defined as follows:
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.
The following is a summary of the inputs used to value the fund’s net assets as of the close of the reporting period:
| Valuation inputs | |||
| Investments in securities: | Level 1 | Level 2 | Level 3 |
| Municipal bonds and notes | $— | $167,814,154 | $— |
| Short-term investments | — | 66,273 | — |
| Totals by level | $— | $167,880,427 | $— |
The accompanying notes are an integral part of these financial statements.
Putnam Short-Term Municipal Income Fund 7 | |
Financial Statements
Statement of assets and liabilities
5/31/24 (Unaudited)
| ASSETS | |
| Investment in securities, at value (Note 1): | |
| Unaffiliated issuers (identified cost $168,809,434) | $167,814,154 |
| Affiliated issuers (identified cost $66,273) (Note 5) | 66,273 |
| Interest and other receivables | 2,238,201 |
| Receivable for shares of the fund sold | 62,027 |
| Receivable for investments sold | 245,000 |
| Prepaid assets | 62,012 |
| Total assets | 170,487,667 |
| LIABILITIES | |
| Payable for purchases of delayed delivery securities (Note 1) | 1,000,215 |
| Payable for shares of the fund repurchased | 365,282 |
| Payable for compensation of Manager (Note 2) | 25,688 |
| Payable for custodian fees (Note 2) | 4,672 |
| Payable for investor servicing fees (Note 2) | 31,728 |
| Payable for Trustee compensation and expenses (Note 2) | 2,000 |
| Payable for administrative services (Note 2) | 587 |
| Payable for distribution fees (Note 2) | 15,240 |
| Other accrued expenses | 40,755 |
| Total liabilities | 1,486,167 |
| Net assets | $169,001,500 |
| Represented by | |
| Paid-in capital (Unlimited shares authorized) (Notes 1 and 4) | $170,103,253 |
| Total distributable earnings (Note 1) | (1,101,753) |
| Total — Representing net assets applicable to capital shares outstanding | $169,001,500 |
| COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE | |
| Net asset value and redemption price per class A share ($34,884,914 divided by 3,568,093 shares) | $9.78 |
| Offering price per class A share (100/97.75 of $9.78)* | $10.01 |
| Net asset value and offering price per class C share ($287,912 divided by 29,561 shares)** | $9.74 |
| Net asset value, offering price and redemption price per class R6 share ($5,084,556 divided by 520,547 shares) | $9.77 |
| Net asset value, offering price and redemption price per class Y share ($128,744,118 divided by 13,173,220 shares) | $9.77 |
| * | 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.
8 Short-Term Municipal Income Fund
Statement of operations
Six months ended 5/31/24 (Unaudited)
| Investment income | |
| Interest (including interest income of $107,191 from investments in affiliated issuers) (Note 5) | $3,034,203 |
| Total investment income | 3,034,203 |
| EXPENSES | |
| Compensation of Manager (Note 2) | 221,306 |
| Investor servicing fees (Note 2) | 63,127 |
| Custodian fees (Note 2) | 5,521 |
| Trustee compensation and expenses (Note 2) | 4,273 |
| Distribution fees (Note 2) | 44,159 |
| Administrative services (Note 2) | 2,950 |
| Auditing and tax fees | 26,035 |
| Blue sky expense | 44,242 |
| Other | 25,256 |
| Fees waived and reimbursed by Manager (Note 2) | (101,478) |
| Total expenses | 335,391 |
| Expense reduction (Note 2) | (1,735) |
| Net expenses | 333,656 |
| Net investment income | 2,700,547 |
| REALIZED AND UNREALIZED GAIN (LOSS) | |
| Net realized gain (loss) on: | |
| Securities from unaffiliated issuers (Notes 1 and 3) | (8,272) |
| Futures contracts (Note 1) | 68,935 |
| Total net realized gain | 60,663 |
| Change in net unrealized depreciation on: | |
| Securities from unaffiliated issuers | (834,657) |
| Futures contracts | (46,321) |
| Total change in net unrealized depreciation | (880,978) |
| Net loss on investments | (820,315) |
| Net increase in net assets resulting from operations | $1,880,232 |
The accompanying notes are an integral part of these financial statements.
Short-Term Municipal Income Fund 9
Statement of changes in net assets
| Six months ended 5/31/24* | Year ended 11/30/23 | |
| Increase in net assets | ||
| Operations | ||
| Net investment income | $2,700,547 | $2,962,454 |
| Net realized gain on investments | 60,663 | 40,855 |
| Change in net unrealized appreciation (depreciation) of investments | (880,978) | 737,391 |
| Net increase in net assets resulting from operations | 1,880,232 | 3,740,700 |
| Distributions to shareholders (Note 1): | ||
| From ordinary income | ||
| Taxable net investment income | ||
| Class A | (8,261) | (39,369) |
| Class C | (87) | (431) |
| Class R6 | (1,474) | (6,333) |
| Class Y | (33,300) | (120,144) |
| From tax-exempt net investment income | ||
| Class A | (518,491) | (732,486) |
| Class C | (3,304) | (6,485) |
| Class R6 | (83,594) | (134,433) |
| Class Y | (2,007,812) | (1,847,319) |
| Increase from capital share transactions (Note 4) | 14,383,631 | 73,515,477 |
| Total increase in net assets | 13,607,540 | 74,369,177 |
| Net assets | ||
| Beginning of period | 155,393,960 | 81,024,783 |
| End of period | $169,001,500 | $155,393,960 |
| * | Unaudited. |
The accompanying notes are an integral part of these financial statements.
10 Short-Term Municipal Income Fund
Financial highlights
(For a common share outstanding throughout the period)
| INVESTMENT OPERATIONS | LESS DISTRIBUTIONS | RATIOS AND SUPPLEMENTAL DATA | |||||||||||
| Period ended | Net asset value, beginning of period | Net investment income (loss) | Net realized and unrealized gain (loss) on investments | Total from investment operations | From net investment income | From net realized gain on investments | Total distributions | Net asset value, end of period | Total return at net asset value (%) a | Net assets, end of period (in thousands) | Ratio of expenses to average net assets (%) b,c | Ratio of net investment income (loss) to average net assets (%) c | Portfolio turnover (%) |
| Class A | |||||||||||||
| May 31, 2024** | $9.82 | .16 | (.05) | .11 | (.15) | — | (.15) | $9.78 | 1.16* | $34,885 | .30* | 1.57* | 14* |
| November 30, 2023 | 9.77 | .25 | .05 | .30 | (.25) | — | (.25) | 9.82 | 3.11 | 33,561 | .62 | 2.62 | 38 |
| 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 |
| Class C | |||||||||||||
| May 31, 2024** | $9.78 | .12 | (.04) | .08 | (.12) | — | (.12) | $9.74 | .77* | $288 | .68* | 1.19* | 14* |
| November 30, 2023 | 9.73 | .18 | .04 | .22 | (.17) | — | (.17) | 9.78 | 2.34 | 340 | 1.37 | 1.85 | 38 |
| 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 |
| Class R6 | |||||||||||||
| May 31, 2024** | $9.81 | .17 | (.04) | .13 | (.17) | — | (.17) | $9.77 | 1.30* | $5,085 | .17* | 1.71* | 14* |
| November 30, 2023 | 9.76 | .28 | .05 | .33 | (.28) | — | (.28) | 9.81 | 3.40 | 5,313 | .33 | 2.90 | 38 |
| 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 |
| Class Y | |||||||||||||
| May 31, 2024** | $9.82 | .17 | (.05) | .12 | (.17) | — | (.17) | $9.77 | 1.18* | $128,744 | .18* | 1.69* | 14* |
| November 30, 2023 | 9.76 | .28 | .05 | .33 | (.27) | — | (.27) | 9.82 | 3.47 | 116,180 | .37 | 2.98 | 38 |
| 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 |
The accompanying notes are an integral part of these financial statements.
Short-Term Municipal Income Fund 11
Financial highlights cont.
* Not annualized.
** Unaudited.
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 limitation in effect during the period. As a result of such limitation, the expenses of each class reflect a reduction of the following amounts (Note 2):
| Percentage of average net assets | |
| May 31, 2024 | 0.06% |
| November 30, 2023 | 0.20 |
| November 30, 2022 | 0.30 |
| November 30, 2021 | 0.32 |
| November 30, 2020 | 0.47 |
| November 30, 2019 | 0.84 |
d Amount represents less than $0.01 per share.
The accompanying notes are an integral part of these financial statements.
12 Short-Term Municipal Income Fund
Notes to financial statements 5/31/24 (Unaudited)
Unless otherwise noted, the “reporting period” represents the period from December 1, 2023 through May 31, 2024. The following table defines commonly used references within the Notes to financial statements:
| References to | Represent |
| 1940 Act | Investment Company Act of 1940, as amended |
| Franklin Advisers | Franklin Advisers, Inc., a wholly-owned subsidiary of Franklin Templeton |
| Franklin Templeton | Franklin Resources, Inc. |
| Franklin Templeton Services | Franklin Templeton Services, LLC, a wholly-owned subsidiary of Franklin Templeton and an affiliate of Putnam Management |
| JPMorgan | JPMorgan Chase Bank, N.A. |
| PIL | Putnam Investments Limited, an affiliate of Putnam Management |
| Putnam Management | Putnam Investment Management, LLC, the fund’s manager, an indirect wholly-owned subsidiary of Franklin Templeton |
| SEC | Securities and Exchange Commission |
| State Street | State Street Bank and Trust Company |
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 1940 Act, 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 |
| Class A | Up to 2.25% | 1.00% on certain redemptions of shares bought with no initial sales charge | None |
| Class C | None | 1.00% eliminated after one year | Converts to class A shares 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 Trust’s Agreement and Declaration of Trust, any claims asserted by a shareholder against or on behalf of the Trust (or its series), including claims against Trustees and Officers, must be brought in courts located within the Commonwealth of Massachusetts.
Note 1: Significant accounting policies
The fund follows the accounting and reporting guidance in Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services – Investment Companies (ASC 946) and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP), including, but not limited to, ASC 946. 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 (Trustees). The Trustees have formed a Pricing Committee to oversee the implementation of these procedures. Under compliance policies and procedures approved by the Trustees, the Trustees have designated the fund’s investment manager as the valuation designee and has responsibility for oversight of valuation. The investment manager is assisted by the fund’s administrator in performing this responsibility, including leading the cross-functional Valuation Committee (VC). The VC is responsible for making fair value determinations, evaluating the effectiveness of the pricing policies of the fund and reporting to the Trustees.
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.
Market quotations are not considered to be readily available for certain debt obligations (including short-term investments with remaining maturities of 60 days or less) and other investments; such investments are valued on the basis of valuations furnished by an independent pricing service approved by the Trustees or dealers selected by Putnam Management. Such services or dealers determine valuations for normal institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships, generally recognized by institutional traders, between securities (which consider such factors as security prices, yields, maturities and ratings). These securities will generally be categorized as Level 2. Securities quoted in foreign currencies, if any, are translated into U.S. dollars at the current exchange rate.
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.
To the extent a pricing service or dealer is unable to value a security or provides a valuation that Putnam Management does not believe accurately reflects the security’s fair value, the security will be valued at fair value by Putnam Management, which has been designated as valuation designee pursuant to Rule 2a–5 under the 1940 Act, in accordance with policies and procedures approved by the Trustees. Certain investments, including certain restricted and illiquid securities and derivatives, are also valued at fair value following procedures approved 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
Short-Term Municipal Income Fund 13
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.
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. 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.
Securities purchased or sold on a delayed delivery basis may be settled at a future date beyond customary settlement time; interest income is accrued based on the terms of the securities. Losses may arise due to changes in the fair value of the underlying securities or if the counterparty does not perform under the contract.
Futures contracts The fund uses futures contracts for hedging treasury term structure risk and for yield curve positioning.
The potential risk to the fund is that the change in value of futures contracts may not correspond to the change in value of the hedged instruments. In addition, losses may arise from changes in the value of the underlying instruments, if there is an illiquid secondary market for the contracts, if interest or exchange rates move unexpectedly or if the counterparty to the contract is unable to perform. With futures, there is minimal counterparty credit risk to the fund since futures are exchange traded and the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Risks may exceed amounts recognized on the Statement of assets and liabilities. When the contract is closed, the fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.
Futures contracts are valued at the quoted daily settlement prices established by the exchange on which they trade. The fund and the broker agree to exchange an amount of cash equal to the daily fluctuation in the value of the futures contract. Such receipts or payments are known as “variation margin.”
Futures contracts outstanding 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. 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, 2023, 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 |
| $— | $272,145 | $272,145 |
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 $168,846,396, resulting in gross unrealized appreciation and depreciation of $430,753 and $1,396,722, respectively, or net unrealized depreciation of $965,969.
Distributions to shareholders Income dividends are recorded daily by the fund and are paid monthly. Distributions from capital gains, if any, are 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, |
| 0.390% | of the next $5 billion, |
| 0.340% | of the next $10 billion, |
| 0.290% | of the next $10 billion, |
| 0.240% | of the next $50 billion, |
| 0.220% | of the next $50 billion, |
| 0.210% | of the next $100 billion and |
| 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 0.136% of the fund’s average net assets.
14 Short-Term Municipal Income Fund
Effective July 15, 2024, Putnam Management transferred its management contract with the fund to Franklin Advisers. As a result of the transfer, Franklin Advisers replaced Putnam Management as the investment adviser of the fund. In addition, effective July 15, 2024, Franklin Advisers has retained Putnam Management as a sub-adviser for the fund pursuant to a new sub-advisory agreement between Franklin Advisers and Putnam Management.
Putnam Management has contractually agreed, through March 30, 2026, 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 not reduced 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, 2026, 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 $101,478 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. Effective July 15, 2024, Putnam Management transferred its sub-management contract with PIL in respect of the fund to Franklin Advisers.
On January 1, 2024, a subsidiary of Franklin Templeton acquired Putnam U.S. Holdings I, LLC (“Putnam Holdings”), the parent company of Putnam Management and PIL, in a stock and cash transaction (the “Transaction”). As a result of the Transaction, Putnam Management and PIL became indirect, wholly-owned subsidiaries of Franklin Templeton. The Transaction also resulted in the automatic termination of the investment management contract between the fund and Putnam Management and the sub-management contract for the fund between Putnam Management and PIL that were in place for the fund before the Transaction (together, the “Previous Advisory Contracts”). However, for the period from January 1, 2024 until February 14, 2024, Putnam Management and PIL continued to provide uninterrupted services with respect to the fund pursuant to interim investment management and sub-management contracts (together, the “Interim Advisory Contracts”) that were approved by the Board of Trustees. The terms of the Interim Advisory Contracts were identical to those of the Previous Advisory Contracts, except for the term of the contracts and those provisions required by regulation. On February 14, 2024, new investment management and sub-management contracts were approved by fund shareholders at a shareholder meeting held in connection with the Transaction (together, the “New Advisory Contracts”). The New Advisory Contracts took effect on February 14, 2024 and replaced the Interim Advisory Contracts. The terms of the New Advisory Contracts are substantially similar to those of the Previous Advisory Contracts, and the fee rates payable under the New Advisory Contracts are the same as the fee rates under the Previous Advisory Contracts.
Effective June 1, 2024, under an agreement with Putnam Management, Franklin Templeton Services will provide certain administrative services to the fund. The fee for those services will be paid by Putnam Management based on the fund’s average daily net assets and is not an additional expense of the fund.
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.
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 | $13,453 |
| Class C | 115 |
| Class R6 | 1,265 |
| Class Y | 48,294 |
| Total | $63,127 |
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 $1,735 under the expense offset arrangements.
Each Independent Trustee of the fund receives an annual Trustee fee, of which $127, 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 from July 1, 1995 through December 31, 2023. 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 1940 Act. The purpose of the Plans is to compensate Putnam Retail Management Limited Partnership, an indirect wholly-owned subsidiary of Franklin Templeton, 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.
Short-Term Municipal Income Fund 15
During the reporting period, the class-specific expenses related to distribution fees were as follows:
| Maximum % | Approved % | Amount | |
| Class A | 0.35% | 0.25% | $42,702 |
| Class C | 1.00% | 1.00% | 1,457 |
| Total | $44,159 |
For the reporting period, Putnam Retail Management Limited Partnership, acting as underwriter, received net commissions of $1,433 from the sale of class A shares and received no monies in contingent deferred sales charges from redemptions of class C shares.
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 $98 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) | $27,710,344 | $20,464,000 |
| U.S. government securities (Long-term) | — | — |
| Total | $27,710,344 | $20,464,000 |
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 5/31/24 | YEAR ENDED 11/30/23 | |||
| Class A | Shares | Amount | Shares | Amount |
| Shares sold | 1,869,890 | $18,416,591 | 2,433,786 | $23,777,871 |
| Shares issued in connection with reinvestment of distributions | 53,965 | 526,583 | 78,653 | 768,167 |
| 1,923,855 | 18,943,174 | 2,512,439 | 24,546,038 | |
| Shares repurchased | (1,773,803) | (17,440,203) | (2,241,181) | (21,937,428) |
| Net increase | 150,052 | $1,502,971 | 271,258 | $2,608,610 |
| SIX MONTHS ENDED 5/31/24 | YEAR ENDED 11/30/23 | |||
| Class C | Shares | Amount | Shares | Amount |
| Shares sold | — | $— | 6,774 | $66,151 |
| Shares issued in connection with reinvestment of distributions | 350 | 3,391 | 707 | 6,879 |
| 350 | 3,391 | 7,481 | 73,030 | |
| Shares repurchased | (5,546) | (54,312) | (18,355) | (178,659) |
| Net decrease | (5,196) | $(50,921) | (10,874) | $(105,629) |
| SIX MONTHS ENDED 5/31/24 | YEAR ENDED 11/30/23 | |||
| Class R6 | Shares | Amount | Shares | Amount |
| Shares sold | 77,174 | $758,737 | 301,857 | $2,943,842 |
| Shares issued in connection with reinvestment of distributions | 8,750 | 85,068 | 14,425 | 140,755 |
| 85,924 | 843,805 | 316,282 | 3,084,597 | |
| Shares repurchased | (106,992) | (1,052,421) | (281,009) | (2,743,066) |
| Net increase (decrease) | (21,068) | $(208,616) | 35,273 | $341,531 |
| SIX MONTHS ENDED 5/31/24 | YEAR ENDED 11/30/23 | |||
| Class Y | Shares | Amount | Shares | Amount |
| Shares sold | 2,778,516 | $27,363,072 | 11,540,198 | $112,714,310 |
| Shares issued in connection with reinvestment of distributions | 210,024 | 2,041,078 | 201,782 | 1,967,137 |
| 2,988,540 | 29,404,150 | 11,741,980 | 114,681,447 | |
| Shares repurchased | (1,652,109) | (16,263,953) | (4,505,759) | (44,010,482) |
| Net increase | 1,336,431 | $13,140,197 | 7,236,221 | $70,670,965 |
16 Short-Term Municipal Income Fund
Note 5: Affiliated transactions
Transactions during the reporting period with any company which is under common ownership or control were as follows:
| Name of affiliate | Fair value as of 11/30/23 | Purchase cost | Sale proceeds | Investment income | Shares outstanding and fair value as of 5/31/24 |
| Short-term investments | |||||
| Putnam Short Term Investment Fund Class P‡ | $1,222,857 | $35,185,207 | $36,341,791 | $107,191 | $66,273 |
| Total Short-term investments | $1,222,857 | $35,185,207 | $36,341,791 | $107,191 | $66,273 |
| ‡ 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.
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:
| Futures contracts (number of contracts) | 10 |
As of the close of the reporting period, the fund did not hold any derivative instruments.
The following is a summary of realized and change in unrealized gains or losses of derivative instruments in the Statement of operations for the reporting period (Note 1):
| 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 | Futures | Total |
| Interest rate contracts | $68,935 | $68,935 |
| Total | $68,935 | $68,935 |
| Change in unrealized appreciation or (depreciation) on derivatives recognized in net gain or (loss) on investments | ||
| Derivatives not accounted for as hedging instruments under ASC 815 | Futures | Total |
| Interest rate contracts | $(46,321) | $(46,321) |
| Total | $(46,321) | $(46,321) |
Short-Term Municipal Income Fund 17
Changes in and disagreements with accountants
Not applicable
Results of any shareholder votes (Unaudited)
February 14, 2024 special meeting
At the meeting, a new Management Contract for your fund with Putnam Investment Management, LLC was approved, as follows:
| Votes for | Votes against | Abstentions/Votes withheld |
| 4,690,437 | 133,030 | 1,867,869 |
At the meeting, a new Sub-Management Contract for your fund between Putnam Investment Management, LLC and Putnam Investments Limited was approved, as follows:
| Votes for | Votes against | Abstentions/Votes withheld |
| 4,679,833 | 130,907 | 1,880,596 |
All tabulations are rounded to the nearest whole number.
Remuneration paid to directors, officers, and others
Remuneration paid to directors, officers, and others is included in the Notes to financial statements above.
Board approval of management and subadvisory agreements
Not applicable
| 18 Short-Term Municipal Income Fund |
 | ||
| © 2024 Franklin Templeton. All rights reserved. | 39211-SFSOI 07/24 | |
| Item 8. Changes in and Disagreements with Accountants for Open-End Management Investment Companies. |
| Included in Item 7 above. |
| Item 9. Proxy Disclosure for Open-End Management Investment Companies. |
| Included in Item 7 above. |
| Item 10. Remuneration Paid to Directors, Officers, and Others of Open-End Management Investment Companies. |
| Included in Item 7 above. |
| Item 11. Statement Regarding Basis for Approval of Investment Advisory Contract. |
| Included in Item 7 above. |
| Item 12. Disclosure of Proxy Voting Policies and Procedures For Closed-End Management Investment Companies: |
| Not applicable |
| Item 13. Portfolio Managers of Closed-End Investment Companies |
| Not Applicable |
| Item 14. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers: |
| Not applicable |
| Item 15. Submission of Matters to a Vote of Security Holders: |
| Not applicable |
| Item 16. 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 17. Disclosures of Securities Lending Activities for Closed-End Investment Companies: |
| Not Applicable |
| Item 18. Recovery of Erroneously Awarded Compensation. |
| Not Applicable |
| Item 19. Exhibits: |
| (a)(1) Not applicable |
| (a)(2) 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/ Jeffrey White Jeffrey White Principal Accounting Officer |
| Date: July 30, 2024 |
| 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 30, 2024 |
| By (Signature and Title): |
| /s/ Jeffrey White Jeffrey White Principal Financial Officer |
| Date: July 30, 2024 |