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| UNITED STATES
SECURITIES AND EXCHANGE COMMISSION |
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| CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
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| Investment Company Act file number: | (811-02675) |
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| Exact name of registrant as specified in charter: | Putnam Tax Exempt Income Fund |
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| Address of principal executive offices: | One Post Office Square, Boston, Massachusetts 02109 |
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| Name and address of agent for service: | Robert T. Burns, Vice President
One Post Office Square
Boston, Massachusetts 02109 |
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| Copy to: | Bryan Chegwidden, Esq.
Ropes & Gray LLP
1211 Avenue of the Americas
New York, New York 10036 |
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| Registrant's telephone number, including area code: | (617) 292-1000 |
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| Date of fiscal year end: | September 30, 2018 |
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| Date of reporting period: | October 1, 2017 — March 31, 2018 |
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Item 1. Report to Stockholders: | |
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| The following is a copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Investment Company Act of 1940: | |
Putnam
Tax Exempt
Income Fund
Semiannual report
3 | 31 | 18
Consider these risks before investing: Capital gains, if any, are taxable for federal and, in most cases, state purposes. For some investors, investment income may be subject to the federal alternative minimum tax. Income from federally tax-exempt funds may be subject to state and local taxes. Bond investments are subject to interest-rate risk (the risk of bond prices falling if interest rates rise) and credit risk (the risk of an issuer defaulting on interest or principal payments). Interest-rate risk is generally greater for longer-term bonds, and credit risk is generally greater for below-investment-grade bonds. Unlike bonds, funds that invest in bonds have fees and expenses. Tax-exempt bonds may be issued under the Internal Revenue Code only by limited types of issuers for limited types of projects. As a result, the fund’s investments may be focused in certain market segments and be more vulnerable to fluctuations in the values of the securities it holds than a more broadly invested fund. Interest the fund receives might be taxable. Bond prices may fall or fail to rise over time for several reasons, including general financial market conditions, changing market perceptions (including perceptions about the risk of default and expectations about monetary policy or interest rates), changes in government intervention in the financial markets, and factors related to a specific issuer or industry. These and other factors may lead to increased volatility and reduced liquidity in the fund’s portfolio holdings. You can lose money by investing in the fund.
Message from the Trustees
May 11, 2018
Dear Fellow Shareholder:
After an extended period of record advances and low volatility, global stock markets encountered some challenges in the early months of 2018. Stocks began the year against a backdrop of optimism, but quickly lost ground in February with a sharp downturn that pushed the U.S. market into correction territory. Stocks subsequently recovered somewhat, but markets have remained choppy.
While volatility and declines can be unsettling, seasoned investors recognize that they are natural and ultimately can restore balance in the financial markets. In this changing environment, Putnam’s experienced investment professionals continue to monitor risks and seek opportunities. They take a research-intensive approach to investing that includes risk management strategies designed to serve investors in all types of markets.
As always, we believe investors should maintain a well-diversified portfolio, think about long-term goals, and speak regularly with their financial advisors. In the following pages, you will find an overview of your fund’s performance for the reporting period as well as an outlook for the coming months.
Thank you for investing with Putnam.
Municipal bonds finance important public projects, such as schools, roads, and hospitals. Because the income from municipal bonds is generally exempt from federal income tax, these bonds can help investors keep more of the income they receive from their investment. Putnam Tax Exempt Income Fund offers an additional advantage — the flexibility to invest in municipal bonds issued by any state in the country.
Putnam Tax Exempt Income Fund takes an active investment approach
Municipal bonds are backed by either the issuing city, town, or other government entity or by revenues collected from usage fees. The fund’s portfolio managers can select bonds from a variety of state and local governments. Because a state’s fiscal health can affect the prices of its bonds, this flexibility is a distinct advantage.
Source: Putnam, as of 3/31/18. Past performance is no guarantee of future results. Yields for Treasuries, investment-grade corporates, and municipal bonds are represented by the average “yield to worst” — a calculation of the lowest possible yield generated without defaulting — of the Bloomberg Barclays U.S. Treasury Index, the Bloomberg Barclays U.S. Credit Index, and the Bloomberg Barclays Municipal Bond Index, respectively. You cannot invest directly in an index. Bond investments are subject to interest-rate risk (the risk of bond prices falling if interest rates rise) and credit risk (the risk of an issuer defaulting on interest or principal payments). Interest-rate risk is greater for longer-term bonds, and credit risk is greater for below-investment-grade bonds. Income from municipal bonds may be subject to the alternative minimum tax. Taxable-equivalent yield and annual after-tax income are based on a 40.80% federal income tax rate. This rate reflects the Tax Cuts and Jobs Act of 2017 and includes the 3.80% Medicare surtax.
Performance history as of 3/31/18
Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results. Share price, principal value, and return will fluctuate, and you may have a gain or a loss when you sell your shares. Performance of class A shares assumes reinvestment of distributions and does not account for taxes. Fund returns in the bar chart do not reflect a sales charge of 4.00%; had they, returns would have been lower. See below and pages 9–10 for additional performance information. For a portion of the periods, the fund had expense limitations, without which returns would have been lower. To obtain the most recent month-end performance, visit putnam.com.
* The fund’s benchmark, the Bloomberg Barclays Municipal Bond Index, was introduced on 12/31/79, which post-dates the inception of the fund’s class A shares.
† Returns for the six-month period are not annualized, but cumulative.
This comparison shows your fund’s performance in the context of broad market indexes for the six months ended 3/31/18. See above and pages 9–10 for additional fund performance information. Index descriptions can be found on pages 13–14.
Paul holds a B.A. from Suffolk University. He has been in the investment industry since he joined Putnam in 1989.
In addition to Paul, your fund is managed by Garrett L. Hamilton, CFA.
Paul, how was the market for municipal bonds during the reporting period?
Volatility picked up in the municipal bond market in response to higher interest rates, the federal tax reform debate, and the passage of the Tax Cuts and Jobs Act. A selloff in November was in response to the proposed elimination of advance refundings, which investors feared might result in heavier near-term municipal bond supply. [Refunding occurs when an issuer refinances a bond by issuing another bond at a lower interest rate to pay off an older higher-yielding bond, thereby reducing interest costs.] In December, bond issuers rushed to issue new deals before the new tax law took effect in 2018. Total municipal bond new issue volume for December 2017 was $62.5 billion — surpassing the previous record of $52.7 billion in December 1985, which was just before the last comprehensive tax overhaul took effect. However, the flood of new issuance was well received by investors, and the municipal bond market rallied as strong demand helped buoy prices.
The Federal Reserve continued to gradually reduce its monetary policy accommodation. This included beginning to reduce its balance sheet in October 2017, raising the federal funds
Top 10 state allocations are shown as a percentage of the fund’s net assets as of 3/31/18. Investments in Puerto Rico represented 0.0% of the fund’s net assets. Summary information may differ from the portfolio schedule included in the financial statements due to the inclusion of derivative securities, any interest accruals, the use of different classifications of securities for presentation purposes, and rounding. Holdings and allocations may vary over time.
Credit qualities are shown as a percentage of the fund’s net assets as of 3/31/18. 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.
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.
rate in December to a target range of 1.25% to 1.50%, and again in March 2018 to a target range of 1.50% to 1.75%. With interest rates rising, municipal bonds yields rose more than U.S. Treasuries but held up better than the broader fixed-income markets during the period. [Bond prices generally fall as rates rise.] Securities with longer maturities held up better than securities with shorter- and intermediate-term maturities for the period. High-yielding lower-quality municipal bonds outperformed lower-yielding, higher-quality municipal bonds.
How did the fund perform during the reporting period?
For the six months ended March 31, 2018, the fund outperformed its benchmark, the Bloomberg Barclays Municipal Bond Index, and the average return of its Lipper peer group, General & Insured Municipal Debt Funds.
What was your investment strategy in this environment?
Given our outlook for interest rates trending higher, the fund began the period with more of a barbell approach to structuring the portfolio — overweighting short-term bonds, underweighting intermediate-term bonds with maturities of 5 to 12 years, and overweighting longer-term bonds with maturities of greater than 12 to 20 years. However, with the flattening of the yield curve that materialized as the period progressed, we began steering the portfolio away from the short and long ends of the curve and focusing more on bonds with maturities of 15 to 20 years where we saw better value.
Duration positioning, which affects the portfolio’s sensitivity to interest rates, was generally neutral relative to the benchmark index. From a credit-quality standpoint, the fund held an overweight exposure to higher-quality bonds rated Aa and A. Increasing the fund’s emphasis on higher-quality bonds proved to be a headwind during the period. From a sector-positioning perspective, we placed greater focus on higher education, essential service utilities, and continuing-care retirement community bonds relative to the fund’s Lipper group. This strategy was positive for performance results.
We maintained an underweight position in Puerto Rico-based issuers relative to the fund’s Lipper peers. Puerto Rico’s current economic and financial situation remains extremely difficult and could further challenge the debt restructuring process, in our view. This underweight exposure was a slight headwind, as Puerto Rico debt rallied during the period.
New Jersey faces a heavy debt burden and large unfunded pension liabilities. However, the November 2017 gubernatorial election of Phil Murphy provided one-party control for the first time in eight years, which we believe should facilitate legislative action to stabilize New Jersey’s finances. At period-end, all three major rating agencies had a stable outlook for New Jersey. The fund’s positioning in New Jersey municipal debt contributed to performance during the period.
What are your thoughts about the new tax law and its effects on the municipal bond market?
The Tax Cuts and Jobs Act reduced corporate tax rates and, to a lesser extent, individual rates, changed some popular deductions, and eliminated advance refundings for municipal issuers. However, the tax-exempt status of municipal bonds remains intact. As such, we do not believe the new tax law will materially affect demand for municipal bonds from individuals. However, in our view, the reduction in corporate taxes may lower demand from banks, property and casualty insurers, or other corporate buyers.
The legislation, in our view, will have a more meaningful impact on the supply side of the technical equation. We believe the elimination of advance refundings could remove up to 20% of
the municipal market’s annual supply — a fairly significant portion of the municipal bond supply.
What is your outlook for interest rates in the coming months?
Jerome Powell was sworn in as the new Federal Reserve chair on February 5, 2018. Investors generally believe that Chairman Powell will implement the plan laid out by his predecessor, Janet Yellen, for gradual rate increases. At the Fed’s first meeting under Chairman Powell in March 2018, the central bank reiterated its plan for three interest-rate hikes this year but hinted that it would be open to the possibility of a fourth hike if necessary to keep the U.S. economy from overheating. The Fed also revised its outlook for three rate hikes in 2019 instead of two, and projected the unemployment rate, which stood at 4.1% at period-end, would fall to 3.8% in 2018.
We expect that strengthening global economic growth will facilitate the continued normalization of short-term interest rates from their still historic lows and the continued flattening of the yield curve, with short-term rates rising more than long-term rates. Should incoming data signal a strengthening economic outlook, we believe the Fed might be inclined to tighten a little faster to keep inflationary pressures at bay or, conversely, tighten more slowly if fiscal policy proves less stimulative. As always, we will continue to rely on in-depth research and our experienced market insights to evaluate current portfolio holdings and potential new holdings for what we believe to be attractive income and return characteristics.
Thank you, Paul, for your time and insights today.
The views expressed in this report are exclusively those of Putnam Management and are subject to change. They are not meant as investment advice.
Please note that the holdings discussed in this report may not have been held by the fund for the entire period. Portfolio composition is subject to review in accordance with the fund’s investment strategy and may vary in the future. Current and future portfolio holdings are subject to risk. Statements in the Q&A concerning the fund’s performance or portfolio composition relative to those of the fund’s Lipper peer group may reference information produced by Lipper Inc. or through a third party.
This chart shows how the fund’s top weightings have changed over the past six months. Allocations are shown as a percentage of the fund’s net assets. Current period summary information may differ from the information in the portfolio schedule notes included in the financial statements due to the inclusion of derivative securities, any interest accruals, the use of different classifications of securities for presentation purposes, and rounding. Holdings and allocations may vary over time.
Your fund’s performance
This section shows your fund’s performance, price, and distribution information for periods ended March 31, 2018, the end of the first half of its current fiscal year. In accordance with regulatory requirements for mutual funds, we also include expense information taken from the fund’s current prospectus. Performance should always be considered in light of a fund’s investment strategy. Data represent past performance. Past performance does not guarantee future results. More recent returns may be less or more than those shown. Investment return and principal value will fluctuate, and you may have a gain or a loss when you sell your shares. Performance information does not reflect any deduction for taxes a shareholder may owe on fund distributions or on the redemption of fund shares. For the most recent month-end performance, please visit the Individual Investors section at putnam.com or call Putnam at 1-800-225-1581. Class Y shares are not available to all investors. See the Terms and definitions section in this report for definitions of the share classes offered by your fund.
Fund performance Total return for periods ended 3/31/18
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| | Annual | | | | | | | | |
| | average | | Annual | | Annual | | Annual | | |
| | (life of fund) | 10 years | average | 5 years | average | 3 years | average | 1 year | 6 months |
| Class A (12/31/76) | | | | | | | | | |
| Before sales charge | 6.32% | 51.09% | 4.21% | 13.47% | 2.56% | 6.52% | 2.13% | 3.32% | 0.00% |
| After sales charge | 6.22 | 45.05 | 3.79 | 8.93 | 1.73 | 2.26 | 0.75 | –0.82 | –4.00 |
| Class B (1/4/93) | | | | | | | | | |
| Before CDSC | 6.15 | 43.72 | 3.69 | 10.04 | 1.93 | 4.63 | 1.52 | 2.78 | –0.20 |
| After CDSC | 6.15 | 43.72 | 3.69 | 8.16 | 1.58 | 1.75 | 0.58 | –2.22 | –5.13 |
| Class C (7/26/99) | | | | | | | | | |
| Before CDSC | 5.47 | 39.86 | 3.41 | 9.19 | 1.77 | 4.14 | 1.36 | 2.62 | –0.28 |
| After CDSC | 5.47 | 39.86 | 3.41 | 9.19 | 1.77 | 4.14 | 1.36 | 1.62 | –1.26 |
| Class M (2/16/95) | | | | | | | | | |
| Before sales charge | 5.93 | 46.73 | 3.91 | 11.94 | 2.28 | 5.59 | 1.83 | 3.01 | –0.14 |
| After sales charge | 5.84 | 41.96 | 3.57 | 8.30 | 1.61 | 2.16 | 0.71 | –0.34 | –3.39 |
| Class Y (1/2/08) | | | | | | | | | |
| Net asset value | 6.39 | 54.67 | 4.46 | 14.93 | 2.82 | 7.32 | 2.38 | 3.65 | 0.22 |
Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results. After-sales-charge returns for class A and M shares reflect the deduction of the maximum 4.00% and 3.25% sales charge, respectively, levied at the time of purchase. Class B share returns after contingent deferred sales charge (CDSC) reflect the applicable CDSC, which is 5% in the first year, declining over time to 1% in the sixth year, and is eliminated thereafter. Class C share returns after CDSC reflect a 1% CDSC for the first year that is eliminated thereafter. Class Y shares have no initial sales charge or CDSC. Performance for class B, C, M, and Y shares before their inception is derived from the historical performance of class A shares, adjusted for the applicable sales charge (or CDSC) and the higher operating expenses for such shares, except for class Y shares, for which 12b-1 fees are not applicable.
For a portion of the periods, the fund had expense limitations, without which returns would have been lower.
Class B share performance reflects conversion to class A shares after eight years.
Comparative index returns For periods ended 3/31/18
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| | Annual | | | | | | | | |
| | average | | Annual | | Annual | | Annual | | |
| | (life of fund) | 10 years | average | 5 years | average | 3 years | average | 1 year | 6 months |
| Bloomberg Barclays | | | | | | | | | |
| Municipal Bond Index | —* | 53.87% | 4.40% | 14.43% | 2.73% | 6.90% | 2.25% | 2.66% | –0.37% |
| Lipper General & | | | | | | | | | |
| Insured Municipal | | | | | | | | | |
| Debt Funds category | 5.71% | 50.27 | 4.13 | 13.37 | 2.53 | 6.57 | 2.14 | 2.92 | –0.14 |
| average† | | | | | | | | | |
Index and Lipper results should be compared with fund performance before sales charge, before CDSC, or at net asset value.
* The fund’s benchmark, the Bloomberg Barclays Municipal Bond Index, was introduced on 12/31/79, which post-dates the inception of the fund’s class A shares.
† Over the 6-month, 1-year, 3-year, 5-year, 10-year, and life-of-fund periods ended 3/31/18, there were 267, 256, 225, 196, 152, and 8 funds, respectively, in this Lipper category.
Fund price and distribution information For the six-month period ended 3/31/18
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| Distributions | Class A | Class B | Class C | Class M | Class Y |
| Number | 6 | 6 | 6 | 6 | 6 |
| Income1 | $0.140172 | $0.112936 | $0.106474 | $0.127921 | $0.149421 |
| Capital gains2 | — | — | — | — | — |
| Total | $0.140172 | $0.112936 | $0.106474 | $0.127921 | $0.149421 |
| | Before | After | Net | Net | Before | After | Net |
| | sales | sales | asset | asset | sales | sales | asset |
| Share value | charge | charge | value | value | charge | charge | value |
| 9/30/17 | $8.63 | $8.99 | $8.63 | $8.65 | $8.66 | $8.95 | $8.65 |
| 3/31/18 | 8.49 | 8.84 | 8.50 | 8.52 | 8.52 | 8.81 | 8.52 |
| | Before | After | Net | Net | Before | After | Net |
| Current rate | sales | sales | asset | asset | sales | sales | asset |
| (end of period) | charge | charge | value | value | charge | charge | value |
| Current dividend rate3 | 2.94% | 2.83% | 2.30% | 2.15% | 2.65% | 2.56% | 3.15% |
| Taxable equivalent4 | 4.97 | 4.78 | 3.89 | 3.63 | 4.48 | 4.32 | 5.32 |
| Current 30-day | | | | | | | |
| SEC yield5 | N/A | 2.13 | 1.59 | 1.44 | N/A | 1.87 | 2.43 |
| Taxable equivalent4 | N/A | 3.60 | 2.69 | 2.43 | N/A | 3.16 | 4.10 |
The classification of distributions, if any, is an estimate. Before-sales-charge share value and current dividend rate for class A and M shares, if applicable, do not take into account any sales charge levied at the time of purchase. After-sales-charge share value, current dividend rate, and current 30-day SEC yield, if applicable, are calculated assuming that the maximum sales charge (4.00% for class A shares and 3.25% for class M shares) was levied at the time of purchase. Final distribution information will appear on your year-end tax forms.
1 For some investors, investment income may be subject to the federal alternative minimum tax.
2 Capital gains, if any, are taxable for federal and, in most cases, state purposes.
3 Most recent distribution, including any return of capital and excluding capital gains, annualized and divided by share price before or after sales charge at period-end.
4 Assumes maximum 40.80% federal tax rate for 2018. Results for investors subject to lower tax rates would not be as advantageous.
5 Based only on investment income and calculated using the maximum offering price for each share class, in accordance with SEC guidelines.
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| 10 Tax Exempt 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. 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
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| | Class A | Class B | Class C | Class M | Class Y |
| Total annual operating expenses for the fiscal | | | | | |
| year ended 9/30/17* | 0.77% | 1.40% | 1.55% | 1.05% | 0.55% |
| Annualized expense ratio for the six-month | | | | | |
| period ended 3/31/18 | 0.76% | 1.39% | 1.54% | 1.04% | 0.54% |
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.
* Restated to reflect current fees.
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 10/1/17 to 3/31/18. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.
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| | Class A | Class B | Class C | Class M | Class Y |
| Expenses paid per $1,000*† | $3.79 | $6.92 | $7.67 | $5.18 | $2.70 |
| Ending value (after expenses) | $1,000.00 | $998.00 | $997.20 | $998.60 | $1,002.20 |
* 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 3/31/18. 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; and then dividing that result by the number of days in the year.
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Estimate the expenses you paid
To estimate the ongoing expenses you paid for the six months ended 3/31/18, use the following calculation method. To find the value of your investment on 10/1/17, 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 B | Class C | Class M | Class Y |
| Expenses paid per $1,000*† | $3.83 | $6.99 | $7.75 | $5.24 | $2.72 |
| Ending value (after expenses) | $1,021.14 | $1,018.00 | $1,017.25 | $1,019.75 | $1,022.24 |
* 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 3/31/18. 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; and then dividing that result by the number of days in the year.
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| 12 Tax Exempt Income Fund |
Terms and definitions
Important terms
Total return shows how the value of the fund’s shares changed over time, assuming you held the shares through the entire period and reinvested all distributions in the fund.
Before sales charge, or net asset value, is the price, or value, of one share of a mutual fund, without a sales charge. Before-sales-charge figures fluctuate with market conditions, and are calculated by dividing the net assets of each class of shares by the number of outstanding shares in the class.
After sales charge is the price of a mutual fund share plus the maximum sales charge levied at the time of purchase. After-sales-charge performance figures shown here assume the 4.00% maximum sales charge for class A shares and 3.25% for class M shares.
Contingent deferred sales charge (CDSC) is generally a charge applied at the time of the redemption of class B or C shares and assumes redemption at the end of the period. Your fund’s class B CDSC declines over time from a 5% maximum during the first year to 1% during the sixth year. After the sixth year, the CDSC no longer applies. The CDSC for class C shares is 1% for one year after purchase.
Share classes
Class A shares are generally subject to an initial sales charge and no CDSC (except on certain redemptions of shares bought without an initial sales charge).
Class B shares are closed to new investments and are only available by exchange from another Putnam fund or through dividend and/or capital gains reinvestment. They are not subject to an initial sales charge and may be subject to a CDSC.
Class C shares are not subject to an initial sales charge and are subject to a CDSC only if the shares are redeemed during the first year.
Class M shares have a lower initial sales charge and a higher 12b-1 fee than class A shares and no CDSC.
Class Y shares are not subject to an initial sales charge or CDSC, and carry no 12b-1 fee. They are generally only available to corporate and institutional clients and clients in other approved programs.
Fixed-income terms
Current rate is the annual rate of return earned from dividends or interest of an investment. Current rate is expressed as a percentage of the price of a security, fund share, or principal investment.
Yield curve is a graph that plots the yields of bonds with equal credit quality against their differing maturity dates, ranging from shortest to longest. It is used as a benchmark for other debt, such as mortgage or bank lending rates.
Comparative indexes
Bloomberg Barclays Municipal Bond Index is an unmanaged index of long-term fixed-rate investment-grade tax-exempt bonds.
Bloomberg Barclays U.S. Aggregate Bond Index is an unmanaged index of U.S. investment-grade fixed-income securities.
ICE BofAML (Intercontinental Exchange Bank of America Merrill Lynch) U.S. 3-Month Treasury Bill Index is an unmanaged index that seeks to measure the performance of U.S. Treasury bills available in the marketplace.
S&P 500 Index is an unmanaged index of common stock performance.
ICE Data Indices, LLC (“ICE BofAML”), used with permission. ICE BofAML permits use of the ICE BofAML indices and related data on an “as is” basis; makes no warranties regarding same; does not guarantee the suitability, quality, accuracy, timeliness, and/or completeness of the ICE BofAML indices or any data included in, related to, or derived therefrom; assumes no liability in connection with the use of the foregoing; and does not
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| Tax Exempt Income Fund 13 |
sponsor, endorse, or recommend Putnam Investments, or any of its products or services.
Indexes assume reinvestment of all distributions and do not account for fees. Securities and performance of a fund and an index will differ. You cannot invest directly in an index.
Lipper is a third-party industry-ranking entity that ranks mutual funds. Its rankings do not reflect sales charges. Lipper rankings are based on total return at net asset value relative to other funds that have similar current investment styles or objectives as determined by Lipper. Lipper may change a fund’s category assignment at its discretion. Lipper category averages reflect performance trends for funds within a category.
Other information for shareholders
Important notice regarding delivery of shareholder documents
In accordance with Securities and Exchange Commission (SEC) regulations, Putnam sends a single 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, and Putnam will begin sending individual copies within 30 days.
Proxy voting
Putnam is committed to managing our mutual 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, 2017, 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.
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-Q. Shareholders may obtain the fund’s Form N-Q on the SEC’s website at www.sec.gov. In addition, the fund’s Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. You may call the SEC at 1-800-SEC-0330 for information about the SEC’s website or the operation of the Public Reference Room.
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 mutual funds. As of March 31, 2018, Putnam employees had approximately $509,000,000 and the Trustees had approximately $80,000,000 invested in Putnam mutual funds. These amounts include investments by the Trustees’ and employees’ immediate family members as well as investments through retirement and deferred compensation plans.
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| 14 Tax Exempt 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 year.
Financial highlights provide an overview of the fund’s investment results, per-share distributions, expense ratios, net investment income ratios, and portfolio turnover in one summary table, reflecting the five most recent reporting periods. In a semiannual report, the highlights table also includes the current reporting period.
|
| Tax Exempt Income Fund 15 |
The fund’s portfolio 3/31/18 (Unaudited)
Key to holding’s abbreviations
| |
| ABAG Association Of Bay Area Governments | FRN Floating Rate Notes: the rate shown is the current |
| AGC Assured Guaranty Corp. | interest rate or yield at the close of the reporting period. |
| AGM Assured Guaranty Municipal Corporation�� | Rates may be subject to a cap or floor. For certain |
| AMBAC AMBAC Indemnity Corporation | securities, the rate may represent a fixed rate currently |
| BAM Build America Mutual | in place at the close of the reporting period. |
| BAN Bond Anticipation Notes | G.O. Bonds General Obligation Bonds |
| COP Certificates of Participation | MAC Municipal Assurance Corporation |
| FGIC Financial Guaranty Insurance Company | NATL National Public Finance Guarantee Corp. |
| FHL Banks Coll. Federal Home Loan Banks | PSFG Permanent School Fund Guaranteed |
| System Collateralized | Q-SBLF Qualified School Board Loan Fund |
| FHLMC Coll. Federal Home Loan Mortgage | U.S. Govt. Coll. U.S. Government Collateralized |
| Corporation Collateralized | VRDN Variable Rate Demand Notes, which are floating- |
| FNMA Coll. Federal National Mortgage | rate securities with long-term maturities that carry |
| Association Collateralized | coupons that reset and are payable upon demand |
| FRB Floating Rate Bonds: the rate shown is the current | either daily, weekly or monthly. The rate shown is the |
| interest rate at the close of the reporting period. Rates | current interest rate at the close of the reporting |
| may be subject to a cap or floor. For certain securities, | period. Rates are set by remarketing agents and may |
| the rate may represent a fixed rate currently in place | take into consideration market supply and demand, |
| at the close of the reporting period. | credit quality and the current SIFMA Municipal Swap |
| Index rate, which was 1.58% as of the close of the |
| | reporting period. |
| | | |
| MUNICIPAL BONDS AND NOTES (98.8%)* | Rating** | Principal amount | Value |
| Alabama (0.7%) | | | |
| Cullman Cnty., Hlth. Care Auth. Rev. Bonds, | | | |
| (Cullman Regl. Med. Ctr.), Ser. A, 7.00%, 2/1/36 | Baa3 | $1,750,000 | $1,794,940 |
| Jefferson Cnty., Swr. Rev. Bonds, Ser. D, | | | |
| 6.50%, 10/1/53 | BBB– | 1,000,000 | 1,184,500 |
| Jefferson, Cnty. Rev. Bonds, (Warrants) | | | |
| 5.00%, 9/15/34 | AA | 2,575,000 | 2,941,809 |
| 5.00%, 9/15/33 | AA | 350,000 | 401,034 |
| | | | 6,322,283 |
| Arizona (4.6%) | | | |
| AZ Game & Fish Dept. and Comm. Rev. Bonds, (AGF | | | |
| Administration Bldg.), 5.00%, 7/1/21 | A2 | 500,000 | 501,210 |
| AZ State Hlth. Fac. Auth. Rev. Bonds, (Scottsdale | | | |
| Hlth. Care), 5.00%, 12/1/28 | A2 | 500,000 | 567,055 |
| AZ State Hlth. Fac. Auth. Hlth. Care Ed. Rev. Bonds, | | | |
| (Kirksville College), 5.125%, 1/1/30 | A– | 750,000 | 786,660 |
| AZ State Indl. Dev. Auth. Ed. 144A Rev. Bonds, (BASIS | | | |
| Schools, Inc.), Ser. D, 5.00%, 7/1/51 | BB | 1,025,000 | 1,047,765 |
| AZ State Sports & Tourism Auth. Rev. Bonds, (Multi- | | | |
| Purpose Stadium Fac.), Ser. A, 5.00%, 7/1/30 | A1 | 500,000 | 534,200 |
| AZ State U. Nanotechnology Research, LLC Lease | | | |
| Rev. Bonds, (AZ State U. Research Park Lease), | | | |
| Ser. A, AGC, 5.00%, 3/1/34 (Prerefunded 3/1/19) | AA | 500,000 | 515,310 |
| Casa Grande, G.O. Bonds, Ser. B, 4.00%, 8/1/27 | AA– | 250,000 | 273,500 |
| Casa Grande, Indl. Dev. Auth. Rev. Bonds, | | | |
| (Casa Grande Regl. Med. Ctr.), Ser. A, 7.625%, | | | |
| 12/1/29 (escrow) F | D/P | 2,850,000 | 8,519 |
|
| 16 Tax Exempt Income Fund |
| | | |
| MUNICIPAL BONDS AND NOTES (98.8%)* cont. | Rating** | Principal amount | Value |
| Arizona cont. | | | |
| Central AZ State Wtr. Conservation Dist. Rev. Bonds, | | | |
| (Wtr. Delivery Operation & Maintenance (O&M)), | | | |
| 5.00%, 1/1/36 | AA+ | $640,000 | $728,794 |
| El Mirage G.O. Bonds, AGM, 5.00%, 7/1/42 | AA | 250,000 | 272,065 |
| Gilbert, Pub. Facs. Rev. Bonds | | | |
| 5.00%, 7/1/20 | Aa1 | 250,000 | 267,685 |
| 5.00%, 7/1/18 | Aa1 | 500,000 | 504,290 |
| Glendale, Excise Tax Rev. Bonds | | | |
| 5.00%, 7/1/31 | AA | 2,100,000 | 2,449,713 |
| 5.00%, 7/1/30 | AA | 300,000 | 351,285 |
| Glendale, Indl. Dev. Auth. Rev. Bonds, (Midwestern | | | |
| U.), 5.125%, 5/15/40 | A | 4,500,000 | 4,761,045 |
| Glendale, Indl. Dev. Auth. Sr. Living Fac. Rev. Bonds, | | | |
| (Royal Oaks Life Care Cmnty.), 5.00%, 5/15/39 | A/F | 3,500,000 | 3,850,175 |
| Goodyear Cmnty., Fac. Util. Dist. No. 1 G.O. Bonds | | | |
| 4.00%, 7/15/21 | A– | 50,000 | 52,949 |
| U.S. Govt. Coll., 4.00%, 7/15/21 (Escrowed | | | |
| to Maturity) | AAA/P | 100,000 | 106,323 |
| Lake Havasu City, Waste Wtr. Syst. Rev. Bonds, | | | |
| Ser. B, AGM, 5.00%, 7/1/43 | AA | 250,000 | 276,665 |
| Maricopa Cnty., G.O. Bonds | | | |
| (Unified School Dist. No. 89 Dysart), 5.00%, 7/1/25 | A+ | 500,000 | 571,215 |
| (Unified School Dist. No. 60 Higley School Impt.), | | | |
| Ser. C, AGM, 4.00%, 7/1/33 | AA | 150,000 | 158,408 |
| (Unified School Dist. No. 89 Dysart), BAM, | | | |
| 4.00%, 7/1/27 | AA | 550,000 | 599,539 |
| Maricopa Cnty., Indl. Dev. Auth. Rev. Bonds | | | |
| (Banner Hlth.), Ser. A, 5.00%, 1/1/41 | AA– | 2,000,000 | 2,277,680 |
| (Banner Hlth. Oblig. Group), Ser. A, 5.00%, 1/1/35 | AA– | 500,000 | 571,020 |
| (Banner Hlth.), Ser. A, 4.00%, 1/1/41 | AA– | 2,500,000 | 2,585,625 |
| Maricopa Cnty., Indl. Dev. Auth. Ed. Rev. Bonds | | | |
| (Great Hearts Academies), Ser. C, 5.00%, 7/1/48 | AA– | 600,000 | 675,576 |
| (Reid Traditional Schools Painted Rock Academy), | | | |
| 5.00%, 7/1/36 | Baa3 | 250,000 | 263,800 |
| (Horizon Cmnty. Learning Ctr.), 5.00%, 7/1/35 | BB+ | 350,000 | 359,485 |
| Maricopa Cnty., Indl. Dev. Auth. Hlth. Fac. | | | |
| Rev. Bonds, (Catholic Hlth. Care West), Ser. A, | | | |
| 6.00%, 7/1/39 | A | 750,000 | 784,673 |
| Maricopa Cnty., Indl. Dev. Auth. Solid Waste Disp. | | | |
| Mandatory Put Bonds (6/3/24), (Waste Mgt., Inc.), | | | |
| 3.375%, 12/1/31 | A–2 | 250,000 | 258,103 |
| Maricopa Cnty., Poll. Control Rev. Bonds | | | |
| (El Paso Elec. Co.), Ser. A, 7.25%, 2/1/40 | Baa1 | 4,350,000 | 4,536,746 |
| (Southern CA Edl. Co.), Ser. A, 5.00%, 6/1/35 | Aa3 | 650,000 | 687,057 |
| Northern AZ U. Rev. Bonds | | | |
| 5.00%, 6/1/36 | A1 | 450,000 | 481,424 |
| 5.00%, 6/1/34 | A1 | 250,000 | 278,820 |
| Peoria, Dev. Auth. Inc. Rev. Bonds, 5.00%, 7/1/23 | AA+ | 500,000 | 558,140 |
| Phoenix, Civic Impt. Corp. Arpt. Rev. Bonds, Ser. A, | | | |
| 5.00%, 7/1/40 (Prerefunded 7/1/20) | A1 | 500,000 | 535,830 |
|
| Tax Exempt Income Fund 17 |
| | | |
| MUNICIPAL BONDS AND NOTES (98.8%)* cont. | Rating** | Principal amount | Value |
| Arizona cont. | | | |
| Phoenix, Civic Impt. Corp. Dist. Rev. Bonds, (Civic | | | |
| Plaza), Ser. B, FGIC, NATL, 5.50%, 7/1/43 | Aa2 | $1,000,000 | $1,366,400 |
| Phoenix, Indl. Dev. Auth. Ed. Rev. Bonds | | | |
| (Great Hearts Academies), 5.00%, 7/1/44 | BBB– | 1,000,000 | 1,063,230 |
| (Great Hearts Academies), Ser. A, 5.00%, 7/1/36 | BBB– | 150,000 | 164,079 |
| (Choice Academies, Inc.), 4.875%, 9/1/22 | BB+ | 150,000 | 157,731 |
| (Great Hearts Academies), 3.75%, 7/1/24 | BBB– | 235,000 | 244,550 |
| Phoenix, Indl. Dev. Auth. Ed. 144A Rev. Bonds, | | | |
| (BASIS Schools, Inc.) | | | |
| 5.00%, 7/1/35 | BB | 100,000 | 103,305 |
| Ser. A, 5.00%, 7/1/35 | BB | 150,000 | 154,958 |
| Pima Cnty., G.O. Bonds, (Unified School Dist. No. 6), | | | |
| MAC, 4.00%, 7/1/28 | AA | 200,000 | 214,680 |
| Pima Cnty., Indl. Dev. Auth. Rev. Bonds, (Providence | | | |
| Day School, Inc.), 5.125%, 12/1/40 | BBB+ | 500,000 | 517,615 |
| Queen Creek, Excise Tax & State Shared Rev. Rev. | | | |
| Bonds, 5.00%, 8/1/31 | AA | 500,000 | 581,995 |
| Salt Verde, Fin. Corp. Gas Rev. Bonds | | | |
| 5.50%, 12/1/29 | Baa1 | 1,900,000 | 2,293,604 |
| 5.00%, 12/1/37 | Baa1 | 500,000 | 594,090 |
| Student & Academic Svcs., LLC Rev. Bonds, | | | |
| (Northern AZ Cap. Fac. Fin. Corp.), BAM, | | | |
| 5.00%, 6/1/25 | AA | 200,000 | 228,380 |
| Sundance Cmnty., Fac. Dist. G.O. Bonds, MAC, | | | |
| 4.00%, 7/15/24 | AA | 250,000 | 267,315 |
| U. Med. Ctr. Corp. Hosp. Rev. Bonds, FHL Banks Coll., | | | |
| FHLMC Coll., FNMA Coll., U.S. Govt. Coll., 5.00%, | | | |
| 7/1/20 (Escrowed to Maturity) | AAA/P | 250,000 | 267,343 |
| U. Med. Ctr. Corp. Hosp. Rev. Bonds, U.S. Govt. Coll. | | | |
| 6.50%, 7/1/39 (Prerefunded 7/1/19) | AAA/P | 500,000 | 528,775 |
| 6.25%, 7/1/29 (Prerefunded 7/1/19) | AAA/P | 500,000 | 527,560 |
| U. of AZ Board of Regents Syst. Rev. Bonds, (Green | | | |
| Bond), Ser. A, 5.00%, 7/1/41 | Aa2 | 200,000 | 226,420 |
| Vistancia, Cmnty. Fac. Dist. G.O. Bonds, | | | |
| 5.00%, 7/15/26 | A1 | 250,000 | 265,440 |
| Yavapai Cnty., Indl. Dev. Auth. Hosp. Fac. Rev. Bonds, | | | |
| (Yavapai Regl. Med. Ctr.) | | | |
| Ser. A, 5.25%, 8/1/33 | A3 | 100,000 | 110,480 |
| 5.00%, 8/1/34 | A3 | 300,000 | 328,167 |
| Yavapai Cnty., Indl. Dev. Ed. Auth. Rev. Bonds, | | | |
| (Agribusiness & Equine Ctr.), 5.00%, 3/1/32 | BB+ | 265,000 | 268,967 |
| Yuma, Indl. Dev. Auth. Hosp. Rev. Bonds, (Yuma Regl. | | | |
| Med. Ctr.), Ser. A, 5.25%, 8/1/32 | A– | 400,000 | 457,448 |
| | | | 44,970,881 |
| California (5.6%) | | | |
| ABAG Fin. Auth. for Nonprofit Corps. Rev. Bonds, | | | |
| (Episcopal Sr. Cmntys.), Ser. A, 5.00%, 7/1/42 | A–/F | 1,300,000 | 1,386,801 |
| CA State G.O. Bonds, 4.00%, 11/1/32 | Aa3 | 7,000,000 | 7,591,010 |
| CA State Edl. Fac. Auth. Rev. Bonds, (Pacific U.), | | | |
| Ser. A, 5.00%, 11/1/30 | A2 | 750,000 | 816,998 |
|
| 18 Tax Exempt Income Fund |
| | | |
| MUNICIPAL BONDS AND NOTES (98.8%)* cont. | Rating** | Principal amount | Value |
| California cont. | | | |
| CA State Poll. Control Fin. Auth. Rev. Bonds | | | |
| (Wtr. Furnishing), 5.00%, 11/21/45 | Baa3 | $1,500,000 | $1,598,925 |
| (San Jose Wtr. Co.), 4.75%, 11/1/46 | A | 1,700,000 | 1,839,213 |
| CA State Poll. Control Fin. Auth. Solid Waste Disp. | | | |
| 144A Mandatory Put Bonds (11/1/17), (Republic | | | |
| Svcs., Inc.), Ser. A, 1.65%, 8/1/23 | A–2 | 1,250,000 | 1,249,600 |
| CA Statewide Cmnty. Dev. Auth. Rev. Bonds | | | |
| (899 Charleston, LLC), Ser. A, 5.25%, 11/1/44 | BB/P | 655,000 | 696,855 |
| AGM, 5.00%, 11/15/44 | AA | 1,500,000 | 1,663,575 |
| Corona-Norco, School Dist. Pub. Fin. Auth. Special | | | |
| Tax Bonds, Ser. A, 5.00%, 9/1/35 | A– | 585,000 | 646,407 |
| Golden State Tobacco Securitization Corp. Rev. | | | |
| Bonds, Ser. A-1, 5.00%, 6/1/28 | BBB | 1,500,000 | 1,714,140 |
| Los Angeles, Dept. of Arpt. Rev. Bonds, (Los Angeles | | | |
| Intl. Arpt.), 5.00%, 5/15/30 | AA | 2,000,000 | 2,215,380 |
| M-S-R Energy Auth. Rev. Bonds, Ser. A, | | | |
| 6.50%, 11/1/39 | BBB+ | 2,250,000 | 3,168,113 |
| Oakland, Alameda Cnty. Unified School Dist. G.O. | | | |
| Bonds, Ser. A, 5.00%, 8/1/40 | Aa3 | 1,000,000 | 1,122,950 |
| Riverside Cnty., Asset Leasing Corp. Rev. Bonds, | | | |
| (Riverside Cnty. Hosp.), NATL, zero %, 6/1/25 | A1 | 4,000,000 | 3,241,000 |
| Sacramento, City Fin. Auth. Tax Alloc. Bonds, Ser. A, | | | |
| FGIC, NATL, zero %, 12/1/22 | A– | 7,500,000 | 6,615,600 |
| Sacramento, Regl. Trans. Dist. Rev. Bonds, | | | |
| (Farebox), 5.00%, 3/1/25 | A3 | 630,000 | 675,184 |
| San Bernardino, Cmnty. College Dist. G.O. | | | |
| Bonds, Ser. A | | | |
| 4.00%, 8/1/33 | Aa2 | 800,000 | 856,568 |
| 4.00%, 8/1/32 | Aa2 | 4,340,000 | 4,665,066 |
| San Francisco City & Cnty., Arpt. Commission | | | |
| Rev. Bonds, Ser. 2-34E, 5.75%, 5/1/20 | | | |
| (Prerefunded 5/1/18) | A1 | 11,000,000 | 11,035,640 |
| Stockton, Pub. Wtr. Fin. Auth. Rev. Bonds, (Delta Wtr. | | | |
| Supply), Ser. A, 6.25%, 10/1/40 | A | 1,375,000 | 1,617,330 |
| | | | 54,416,355 |
| Colorado (1.8%) | | | |
| CO State Hlth. Fac. Auth. Rev. Bonds | | | |
| (Evangelical Lutheran Good Samaritan Society | | | |
| Oblig. Group (The)), 5.50%, 6/1/33 | Baa2 | 650,000 | 734,097 |
| (Evangelical Lutheran Good Samaritan Society | | | |
| Oblig. Group (The)), Ser. A, 5.00%, 6/1/45 | Baa1 | 1,000,000 | 1,071,980 |
| (Valley View Hosp. Assn.), 5.00%, 5/15/45 | A– | 1,000,000 | 1,094,390 |
| (Covenant Retirement Cmnty.), Ser. A, | | | |
| 5.00%, 12/1/35 | BBB+/F | 1,000,000 | 1,094,900 |
| CO State Hlth. Fac. Auth. Hosp. Rev. Bonds, | | | |
| (Evangelical Lutheran Good Samaritan Society), | | | |
| 5.00%, 6/1/47 | BBB | 700,000 | 761,054 |
| Denver City & Cnty., Arpt. Rev. Bonds, (Sub. Syst.), | | | |
| Ser. A, 5.50%, 11/15/31 | A2 | 1,925,000 | 2,169,860 |
| E-470 CO Pub. Hwy. Auth. FRN Mandatory Put Bonds | | | |
| (9/1/21), (Sr. Libor Index), Ser. B, 2.307%, 9/1/39 | A3 | 1,000,000 | 1,009,990 |
|
| Tax Exempt Income Fund 19 |
| | | |
| MUNICIPAL BONDS AND NOTES (98.8%)* cont. | Rating** | Principal amount | Value |
| Colorado cont. | | | |
| E-470 CO Pub. Hwy. Auth. Rev. Bonds, Ser. A, NATL, | | | |
| zero %, 9/1/34 | A | $13,000,000 | $7,111,260 |
| High Plains Co. Metro. Dist. G.O. Bonds, NATL, | | | |
| 4.00%, 12/1/47 | Baa2 | 1,675,000 | 1,682,940 |
| Park Creek, Metro. Dist. Tax Allocation Bonds, (Sr. | | | |
| Ltd. Property Tax Supported), Ser. A, 5.00%, 12/1/45 | A/F | 225,000 | 249,251 |
| Regl. Trans. Dist. Rev. Bonds, (Denver Trans. | | | |
| Partners), 6.00%, 1/15/41 | Baa3 | 750,000 | 806,663 |
| | | | 17,786,385 |
| Connecticut (0.4%) | | | |
| CT State Hlth. & Edl. Fac. Auth. Mandatory Put Bonds | | | |
| (2/3/20), (Yale U.), Ser. A, 1.30%, 7/1/48 | VMIG1 | 2,500,000 | 2,473,525 |
| CT State Hlth. & Edl. Fac. Auth. Rev. Bonds, | | | |
| (Masonicare Issue), Ser. F, 5.00%, 7/1/34 | BBB+/F | 1,500,000 | 1,636,275 |
| | | | 4,109,800 |
| Delaware (0.6%) | | | |
| DE State Econ. Dev. Auth. Rev. Bonds | | | |
| (Delmarva Pwr.), 5.40%, 2/1/31 | Baa1 | 1,700,000 | 1,818,320 |
| (Indian River Pwr.), 5.375%, 10/1/45 | Baa3 | 2,000,000 | 2,082,260 |
| DE State Hlth. Fac. Auth. Rev. Bonds, (Bayhealth | | | |
| Med. Ctr.), Ser. A, 4.00%, 7/1/40 | AA– | 1,750,000 | 1,794,853 |
| | | | 5,695,433 |
| District of Columbia (2.8%) | | | |
| DC Rev. Bonds | | | |
| (Howard U.), Ser. A, 6.50%, 10/1/41 | BBB | 2,955,000 | 3,180,555 |
| (Howard U.), Ser. A, U.S. Govt. Coll., 6.50%, 10/1/41 | | | |
| (Prerefunded 4/1/21) | AAA/P | 45,000 | 51,012 |
| (Kipp Charter School), 6.00%, 7/1/33 | | | |
| (Prerefunded 7/1/23) | BBB+ | 950,000 | 1,129,408 |
| (Kipp DC), Ser. A, 5.00%, 7/1/37 | BBB+ | 3,750,000 | 4,197,713 |
| DC Ballpark Rev. Bonds, Ser. B-1, FGIC, NATL, | | | |
| 5.00%, 2/1/25 | A2 | 1,035,000 | 1,036,998 |
| DC U. Rev. Bonds, (Gallaudet U.) | | | |
| 5.50%, 4/1/41 | A+ | 2,000,000 | 2,179,920 |
| 5.50%, 4/1/34 | A+ | 1,000,000 | 1,092,080 |
| DC, Wtr. & Swr. Auth. Pub. Util. Rev. Bonds, Ser. B | | | |
| 5.00%, 10/1/37 | AA+ | 3,135,000 | 3,589,230 |
| 5.00%, 10/1/35 | AA+ | 5,000,000 | 5,746,300 |
| Metro. Washington, Arpt. Auth. Dulles Toll Rd. Rev. | | | |
| Bonds, (Metrorail), Ser. A, zero %, 10/1/37 | Baa1 | 11,000,000 | 4,637,490 |
| | | | 26,840,706 |
| Florida (3.7%) | | | |
| Brevard Cnty., Hlth. Care Fac. Auth. Rev. Bonds, | | | |
| (Health First, Inc.), U.S. Govt. Coll., 7.00%, 4/1/39 | | | |
| (Prerefunded 4/1/19) | A2 | 4,000,000 | 4,207,760 |
| Double Branch Cmnty. Dev. Dist. Special Assmt. | | | |
| Bonds, Ser. A-1, 4.25%, 5/1/34 | A– | 890,000 | 912,036 |
| FL State Muni. Pwr. Agcy. Rev. Bonds, (All | | | |
| Requirements Pwr. Supply), Ser. A, 5.00%, 10/1/31 | A2 | 495,000 | 502,564 |
| Halifax Hosp. Med. Ctr. Rev. Bonds, 5.00%, 6/1/36 | A– | 2,250,000 | 2,467,598 |
|
| 20 Tax Exempt Income Fund |
| | | |
| MUNICIPAL BONDS AND NOTES (98.8%)* cont. | Rating** | Principal amount | Value |
| Florida cont. | | | |
| Lakeland, Hosp. Syst. Rev. Bonds, (Lakeland | | | |
| Regl. Hlth.) | | | |
| 5.00%, 11/15/45 | A2 | $1,735,000 | $1,885,320 |
| 5.00%, 11/15/40 | A2 | 2,175,000 | 2,370,141 |
| Martin Cnty., Rev. Bonds, (Indiantown | | | |
| Cogeneration), 4.20%, 12/15/25 | Baa2 | 1,060,000 | 1,081,401 |
| Miami-Dade Cnty., Rev. Bonds, (Tran. Syst. Sales | | | |
| Surtax), 5.00%, 7/1/42 | AA | 3,000,000 | 3,264,780 |
| Miami-Dade Cnty., Aviation Rev. Bonds | | | |
| Ser. B, 5.00%, 10/1/41 | A2 | 5,000,000 | 5,330,450 |
| Ser. A, 5.00%, 10/1/38 | A | 1,750,000 | 1,932,648 |
| 5.00%, 10/1/28 | A2 | 500,000 | 560,805 |
| Orange Cnty., Hlth. Fac. Auth. Rev. Bonds, | | | |
| (Presbyterian Retirement Cmntys.), 5.00%, 8/1/34 | A–/F | 1,800,000 | 1,947,726 |
| Palm Beach Cnty., Hlth. Fac. Auth. Rev. Bonds, (Acts | | | |
| Retirement-Life Cmnty., Inc.), 5.00%, 11/15/32 | A–/F | 5,000,000 | 5,612,850 |
| Southeast Overtown Park West Cmnty. Redev. Agcy. | | | |
| 144A Tax Alloc. Bonds, Ser. A-1, 5.00%, 3/1/30 | BBB+ | 480,000 | 529,166 |
| Sunrise, Util. Syst. Rev. Bonds, AMBAC, | | | |
| 5.20%, 10/1/22 | AA– | 3,405,000 | 3,466,494 |
| | | | 36,071,739 |
| Georgia (3.5%) | | | |
| Atlanta, Tax Alloc. Bonds, (Atlantic Station) | | | |
| 5.00%, 12/1/24 | A3 | 800,000 | 907,808 |
| 5.00%, 12/1/22 | A3 | 1,375,000 | 1,525,315 |
| 5.00%, 12/1/18 | A3 | 1,250,000 | 1,276,313 |
| Atlanta, Arpt. Rev. Bonds, (Hartsfield-Jackson Intl. | | | |
| Arpt.), Ser. A, 5.00%, 1/1/35 | Aa3 | 2,000,000 | 2,105,120 |
| Atlanta, Wtr. & Waste Wtr. Rev. Bonds | | | |
| 5.00%, 11/1/43 | Aa2 | 2,750,000 | 3,113,303 |
| 5.00%, 11/1/40 | Aa2 | 4,860,000 | 5,512,018 |
| Burke Cnty., Dev. Auth. Poll. Control Mandatory | | | |
| Put Bonds (8/22/19), (GA Pwr. Co. (Plant Vogtle)), | | | |
| 1.85%, 12/1/49 | A3 | 2,000,000 | 1,993,740 |
| Forsyth Cnty., Hosp. Auth. Rev. Bonds, (Baptist | | | |
| Hlth. Care Syst.), U.S. Govt. Coll., 6.25%, 10/1/18 | | | |
| (Escrowed to maturity) | AA+ | 130,000 | 133,004 |
| Fulton Cnty., Dev. Auth. Rev. Bonds, (GA Tech | | | |
| Athletic Assn.), Ser. A, 5.00%, 10/1/42 | A2 | 2,250,000 | 2,456,685 |
| Gainesville & Hall Cnty., Dev. Auth. Edl. Fac. Rev. | | | |
| Bonds, (Riverside Military Academy) | | | |
| 5.00%, 3/1/47 | BBB–/F | 2,085,000 | 2,166,899 |
| 5.00%, 3/1/37 | BBB–/F | 450,000 | 472,757 |
| Gainesville & Hall Cnty., Hosp. Auth. Rev. Bonds | | | |
| (Northeast GA Hlth. Care), Ser. S, 5.50%, 8/15/54 | AA– | 1,825,000 | 2,108,605 |
| (Northeast GA Hlth. Syst., Inc.), Ser. A, | | | |
| 5.00%, 2/15/37 | A | 1,000,000 | 1,118,310 |
| (Northeast GA Hlth. Syst., Inc.), Ser. A, | | | |
| 5.00%, 2/15/36 | A | 4,000,000 | 4,482,960 |
|
| Tax Exempt Income Fund 21 |
| | | |
| MUNICIPAL BONDS AND NOTES (98.8%)* cont. | Rating** | Principal amount | Value |
| Georgia cont. | | | |
| Main St. Natural Gas, Inc. Rev. Bonds, (GA Gas), | | | |
| Ser. A, 5.50%, 9/15/21 | A– | $370,000 | $409,697 |
| Muni. Election Auth. of GA Rev. Bonds, (Plant Voltage | | | |
| Units 3 & 4), Ser. A, 5.50%, 7/1/60 | A+ | 3,500,000 | 3,899,280 |
| | | | 33,681,814 |
| Guam (0.3%) | | | |
| Territory of GU, Govt. Hotel Occupancy Tax Rev. | | | |
| Bonds, Ser. A, 6.00%, 11/1/26 | A– | 250,000 | 268,455 |
| Territory of GU, Govt. Ltd. Oblig. Rev. | | | |
| Bonds, (Section 30), Ser. A, 5.75%, 12/1/34 | | | |
| (Prerefunded 12/1/19) | BBB+ | 1,000,000 | 1,067,390 |
| Territory of GU, Govt. Wtr. Wks. Auth. Wtr. & | | | |
| Waste Wtr. Syst. Rev. Bonds, 5.625%, 7/1/40 | | | |
| (Prerefunded 7/1/20) | A– | 300,000 | 325,467 |
| Territory of GU, Pwr. Auth. Rev. Bonds, Ser. A | | | |
| U.S. Govt. Coll, 5.50%, 10/1/40 | | | |
| (Prerefunded 10/1/20) | Baa2 | 100,000 | 108,934 |
| 5.00%, 10/1/34 | Baa2 | 200,000 | 208,588 |
| AGM, 5.00%, 10/1/30 | AA | 500,000 | 543,290 |
| | | | 2,522,124 |
| Idaho (0.8%) | | | |
| ID State Hsg. & Fin. Assn. Rev. Bonds, (Garvee), | | | |
| 4.00%, 7/15/30 | A2 | 7,000,000 | 7,247,800 |
| | | | 7,247,800 |
| Illinois (6.6%) | | | |
| Chicago, G.O. Bonds | | | |
| Ser. A, 6.00%, 1/1/38 | BBB+ | 2,880,000 | 3,237,955 |
| Ser. B-2, 5.50%, 1/1/37 | BBB+ | 6,000,000 | 6,348,840 |
| Ser. A, 5.25%, 1/1/33 | BBB+ | 1,200,000 | 1,251,816 |
| Chicago, Board of Ed. G.O. Bonds | | | |
| Ser. C, 5.25%, 12/1/39 | B | 3,500,000 | 3,533,005 |
| (School Reform), Ser. B-1, NATL, zero %, 12/1/21 | A | 1,000,000 | 873,140 |
| (School Reform), Ser. A, NATL, zero %, 12/1/18 | A | 3,125,000 | 3,072,094 |
| Chicago, Motor Fuel Tax Rev. Bonds, AGM | | | |
| 5.00%, 1/1/33 | AA | 1,000,000 | 1,073,770 |
| 5.00%, 1/1/30 | AA | 200,000 | 217,356 |
| Chicago, O’Hare Intl. Arpt. Rev. Bonds | | | |
| Ser. A, 5.75%, 1/1/39 | A | 265,000 | 289,687 |
| Ser. F, 5.00%, 1/1/40 | A2 | 3,700,000 | 3,863,910 |
| Ser. G, 5.00%, 1/1/37 | A | 600,000 | 664,878 |
| Chicago, Waste Wtr. Transmission Rev. Bonds | | | |
| 5.00%, 1/1/44 | A | 3,000,000 | 3,187,230 |
| (2nd Lien), 5.00%, 1/1/39 | A | 2,720,000 | 2,907,136 |
| Chicago, Wtr. Wks Rev. Bonds | | | |
| 5.00%, 11/1/29 | A | 1,750,000 | 1,965,075 |
| AGM, 5.00%, 11/1/25 | AA | 1,420,000 | 1,448,386 |
| AGM, U.S. Govt. Coll., 5.00%, 11/1/25 | | | |
| (Prerefunded 11/1/18) | AA | 275,000 | 280,352 |
|
| 22 Tax Exempt Income Fund |
| | | |
| MUNICIPAL BONDS AND NOTES (98.8%)* cont. | Rating** | Principal amount | Value |
| Illinois cont. | | | |
| IL Fin. Auth. Rev. Bonds, (Rush U. Med. Ctr.) | | | |
| Ser. B, U.S. Govt. Coll., 7.25%, 11/1/38 | | | |
| (Prerefunded 11/1/18) | Aaa | $2,520,000 | $2,600,766 |
| Ser. C, U.S. Govt. Coll., 6.625%, 11/1/39 | | | |
| (Prerefunded 5/1/19) | Aaa | 1,075,000 | 1,132,115 |
| IL State G.O. Bonds | | | |
| 5.00%, 11/1/41 | Baa3 | 1,250,000 | 1,267,363 |
| 5.00%, 1/1/41 | Baa3 | 700,000 | 708,918 |
| 5.00%, 11/1/34 | Baa3 | 1,000,000 | 1,025,200 |
| Ser. A, 5.00%, 12/1/31 | Baa3 | 2,870,000 | 2,965,341 |
| Ser. C, 5.00%, 11/1/29 | Baa3 | 2,000,000 | 2,072,320 |
| Ser. A, 5.00%, 12/1/28 | Baa3 | 2,000,000 | 2,080,720 |
| 5.00%, 2/1/28 | Baa3 | 2,350,000 | 2,438,149 |
| 5.00%, 8/1/21 | Baa3 | 2,250,000 | 2,355,773 |
| IL State Fin. Auth. Rev. Bonds, (Riverside Hlth. Syst. | | | |
| Oblig. Group), 4.00%, 11/15/31 | A+ | 500,000 | 507,640 |
| IL State Fin. Auth. Student Hsg. & Academic Fac. | | | |
| Rev. Bonds, (U. of IL-CHF-Chicago, LLC), Ser. A, | | | |
| 5.00%, 2/15/47 | Baa3 | 500,000 | 533,880 |
| Metro. Pier & Exposition Auth. Rev. Bonds, | | | |
| (McCormick Place Expansion), Ser. A, 5.00%, 6/15/57 | BB+ | 2,500,000 | 2,641,525 |
| Metro. Wtr. Reclamation Dist. of Greater Chicago | | | |
| G.O. Bonds, (Green Bond), Ser. E, 5.00%, 12/1/29 | AA+ | 1,580,000 | 1,825,911 |
| Railsplitter Tobacco Settlement Auth. Rev. Bonds, | | | |
| 5.00%, 6/1/24 | A | 2,500,000 | 2,828,825 |
| Railsplitter, Tobacco Settlement Auth. Rev. Bonds, | | | |
| 6.00%, 6/1/28 (Prerefunded 6/1/21) | AAA/P | 2,150,000 | 2,419,847 |
| | | | 63,618,923 |
| Indiana (0.8%) | | | |
| IN Bk. Special Program Gas Rev. Bonds, Ser. A, | | | |
| 5.25%, 10/15/21 | A3 | 6,150,000 | 6,786,464 |
| IN State Fin. Auth. Edl. Fac. Rev. Bonds, (Butler U.), | | | |
| Ser. B, 5.00%, 2/1/27 | A– | 935,000 | 1,016,934 |
| | | | 7,803,398 |
| Iowa (0.1%) | | | |
| Tobacco Settlement Auth. of IA Rev. Bonds, Ser. C, | | | |
| 5.375%, 6/1/38 | B+ | 750,000 | 751,688 |
| | | | 751,688 |
| Kansas (0.3%) | | | |
| KS State Dev. Fin. Auth. Rev. Bonds, (Lifespace | | | |
| Cmnty’s. Inc.), Ser. S, 5.00%, 5/15/30 | A/F | 2,900,000 | 3,030,152 |
| | | | 3,030,152 |
| Kentucky (1.7%) | | | |
| KY Pub. Trans. Infrastructure Auth. Rev. Bonds, (1st | | | |
| Tier Downtown Crossing), Ser. A, 6.00%, 7/1/53 | Baa3 | 1,400,000 | 1,560,244 |
| KY State Econ. Dev. Fin. Auth. Rev. Bonds, (Louisville | | | |
| Arena Auth., Inc.), Ser. A, AGM, 5.00%, 12/1/45 | AA | 2,750,000 | 3,033,360 |
| KY State Property & Bldg. Comm. Rev. Bonds, | | | |
| (Project No. 117), Ser. B | | | |
| 5.00%, 5/1/29 | A1 | 850,000 | 974,015 |
| 5.00%, 5/1/28 | A1 | 565,000 | 649,840 |
|
| Tax Exempt Income Fund 23 |
| | | |
| MUNICIPAL BONDS AND NOTES (98.8%)* cont. | Rating** | Principal amount | Value |
| Kentucky cont. | | | |
| Louisville & Jefferson Cnty., Metro. Govt. College | | | |
| Rev. Bonds, (Bellarmine U.), Ser. A, 6.00%, 5/1/38 | | | |
| (Prerefunded 5/1/18) | Baa3 | $855,000 | $858,001 |
| Louisville & Jefferson Cnty., Metro. Govt. Hlth. Syst. | | | |
| Rev. Bonds, (Norton Healthcare, Inc.), Ser. A | | | |
| 5.00%, 10/1/30 | A– | 1,135,000 | 1,294,059 |
| 4.00%, 10/1/34 | A– | 5,000,000 | 5,090,200 |
| Louisville, Regl. Arpt. Auth. Syst. Rev. Bonds, Ser. A | | | |
| 5.00%, 7/1/31 | A+ | 415,000 | 455,234 |
| 5.00%, 7/1/30 | A+ | 1,000,000 | 1,098,730 |
| Owen Cnty., Wtr. Wks. Syst. Rev. Bonds, (American | | | |
| Wtr. Co.), Ser. A, 6.25%, 6/1/39 | A | 1,000,000 | 1,049,690 |
| | | | 16,063,373 |
| Louisiana (0.3%) | | | |
| LA State Pub. Fac. Auth. Rev. Bonds, (Ochsner Clinic | | | |
| Foundation), 5.00%, 5/15/47 | A3 | 1,075,000 | 1,170,815 |
| Tobacco Settlement Fin. Corp. Rev. Bonds, Ser. A, | | | |
| 5.00%, 5/15/23 | A | 1,200,000 | 1,350,588 |
| | | | 2,521,403 |
| Maryland (1.0%) | | | |
| MD Econ. Dev. Corp. Poll. Control Rev. Bonds, | | | |
| (Potomac Electric Power Co.), 6.20%, 9/1/22 | A2 | 1,100,000 | 1,143,527 |
| MD State Hlth. & Higher Edl. Fac. Auth. Rev. Bonds | | | |
| (Meritus Med. Ctr.), 5.00%, 7/1/40 | BBB | 1,250,000 | 1,341,688 |
| (Peninsula Regl. Med. Ctr.), 5.00%, 7/1/39 | A | 2,750,000 | 2,990,708 |
| MD State Hlth. & Higher Edl. Fac. Auth. FRN | | | |
| Mandatory Put Bonds (5/15/18), (Johns Hopkins | | | |
| Hlth. Syst.), Ser. A, 1.715%, 5/15/46 | Aa3 | 4,000,000 | 4,000,720 |
| | | | 9,476,643 |
| Massachusetts (4.0%) | | | |
| MA State G.O. Bonds, Ser. G, 4.00%, 9/1/42 | Aa1 | 2,245,000 | 2,327,773 |
| MA State Dept. Trans. Rev. Bonds, (Metro Hwy. Syst.), | | | |
| Ser. B, 5.00%, 1/1/37 | A+ | 6,750,000 | 7,065,563 |
| MA State Dev. Fin. Agcy. Rev. Bonds | | | |
| (Sabis Intl.), Ser. A, 8.00%, 4/15/39 | | | |
| (Prerefunded 10/15/19) | BBB | 920,000 | 1,005,726 |
| (Suffolk U.), Ser. A, 5.75%, 7/1/39 | Baa2 | 1,340,000 | 1,390,799 |
| (Suffolk U.), Ser. A, U.S. Govt. Coll., 5.75%, 7/1/39 | | | |
| (Prerefunded 7/1/19) | AAA/P | 110,000 | 115,530 |
| (Berklee College of Music), 5.25%, 10/1/41 | A2 | 5,500,000 | 6,034,050 |
| (Wheelock College), Ser. C, 5.25%, 10/1/29 | BBB | 3,300,000 | 3,301,056 |
| (Suffolk U.), 5.125%, 7/1/40 | Baa2 | 2,000,000 | 2,091,500 |
| (Franklin W. Olin College of Engineering), Ser. E, | | | |
| 5.00%, 11/1/43 | A+ | 2,000,000 | 2,208,320 |
| (Suffolk U.), 5.00%, 7/1/36 | Baa2 | 750,000 | 833,775 |
| (Suffolk U.), 5.00%, 7/1/35 | Baa2 | 250,000 | 278,968 |
| (Suffolk U.), 5.00%, 7/1/34 | Baa2 | 700,000 | 784,042 |
| MA State Edl. Fin. Auth. Rev. Bonds, Ser. B, | | | |
| 5.70%, 1/1/31 | AA | 2,415,000 | 2,505,249 |
| MA State Hlth. & Edl. Fac. Auth. Rev. Bonds, | | | |
| (Northeastern U.), Ser. A, 5.00%, 10/1/35 | A2 | 2,600,000 | 2,769,884 |
|
| 24 Tax Exempt Income Fund |
| | | |
| MUNICIPAL BONDS AND NOTES (98.8%)* cont. | Rating** | Principal amount | Value |
| Massachusetts cont. | | | |
| MA State Hsg. Fin. Agcy. Rev. Bonds, Ser. A, | | | |
| 5.10%, 12/1/30 | Aa2 | $1,130,000 | $1,149,978 |
| MA State School Bldg. Auth. Sales Tax Rev. Bonds, | | | |
| Ser. C, 5.00%, 8/15/37 | AA+ | 4,420,000 | 5,040,966 |
| | | | 38,903,179 |
| Michigan (8.3%) | | | |
| Belding Area School G.O. Bonds, Ser. A, Q-SBLF, | | | |
| 5.00%, 5/1/40 | AA– | 300,000 | 336,576 |
| Berkley, School Dist. G.O. Bonds, (School Bldg. & | | | |
| Site), Q-SBLF, 5.00%, 5/1/31 | AA– | 250,000 | 283,028 |
| Caledonia Cmnty., Schools G.O. Bonds, Q-SBLF | | | |
| 5.00%, 5/1/39 | AA– | 1,000,000 | 1,110,340 |
| 5.00%, 5/1/29 | AA– | 415,000 | 470,154 |
| Central MI U. Rev. Bonds, 5.00%, 10/1/34 | Aa3 | 500,000 | 567,445 |
| Chippewa, Valley School G.O. Bonds, Ser. A, Q-SBLF | | | |
| 5.00%, 5/1/35 | Aa1 | 775,000 | 875,983 |
| 5.00%, 5/1/34 | Aa1 | 250,000 | 283,480 |
| Dearborn, School Dist. Bldg. & Site G.O. Bonds, | | | |
| Ser. A, Q-SBLF, 5.00%, 5/1/30 | Aa1 | 330,000 | 373,431 |
| Detroit, G.O. Bonds, AMBAC, 5.25%, 4/1/24 | A–/P | 77,500 | 75,752 |
| Detroit, City School Dist. G.O. Bonds | | | |
| Ser. C, FGIC, Q-SBLF, 5.25%, 5/1/25 | Aa1 | 410,000 | 453,321 |
| (School Bldg. & Site), Ser. A, Q-SBLF, 5.00%, 5/1/31 | Aa1 | 1,000,000 | 1,092,270 |
| Detroit, Downtown Dev. Auth. Tax Increment | | | |
| Tax Alloc. Bonds, (Dev. Area No. 1), Ser. A, NATL, | | | |
| 4.75%, 7/1/25 | A | 1,315,000 | 1,331,753 |
| Detroit, Wtr. & Swr. Dept. Disp. Syst. Rev. Bonds, | | | |
| Ser. A, 5.00%, 7/1/32 | A3 | 2,000,000 | 2,149,940 |
| Detroit, Wtr. Supply Syst. Rev. Bonds, Ser. B, AGM, | | | |
| 6.25%, 7/1/36 | AA | 5,000 | 5,258 |
| Flint, Hosp. Bldg. Auth. Rev. Bonds, | | | |
| (Hurley Med. Ctr.) | | | |
| 7.50%, 7/1/39 | Ba1 | 150,000 | 162,594 |
| 7.375%, 7/1/35 | Ba1 | 1,250,000 | 1,356,125 |
| Genesee Cnty., Wtr. Supply Syst. G.O. Bonds | | | |
| BAM, 5.375%, 11/1/38 | AA | 500,000 | 559,530 |
| BAM, 5.25%, 2/1/40 | AA | 200,000 | 221,724 |
| (Wtr. Supply Syst.), Ser. B, BAM, 5.00%, 2/1/33 | AA | 250,000 | 282,410 |
| Grand Rapids, Wtr. Supply Syst. Rev. Bonds, | | | |
| 5.00%, 1/1/41 | Aa2 | 400,000 | 450,776 |
| Grand Valley, State U. Rev. Bonds | | | |
| (MI State U.), Ser. A, U.S. Govt. Coll., 5.00%, 12/1/32 | A1 | 250,000 | 283,430 |
| Ser. B, 5.00%, 12/1/29 | A+ | 410,000 | 465,518 |
| Ser. B, 5.00%, 12/1/28 | A+ | 250,000 | 284,833 |
| Great Lakes, Wtr. Auth. Swr. Rev. Bonds, (Brazos | | | |
| Presbyterian Homes, Inc.), Ser. C, 5.00%, 7/1/36 | Baa1 | 7,780,000 | 8,591,532 |
| Holland, School Dist. G.O. Bonds, AGM, | | | |
| 5.00%, 5/1/29 | AA | 1,000,000 | 1,132,300 |
| Kalamazoo, Hosp. Fin. Auth. Fac. Rev. Bonds | | | |
| (Bronson Hosp.), Ser. A, AGM, 5.00%, 5/15/26 | AA | 2,000,000 | 2,007,640 |
| (Bronson Healthcare Group), 4.00%, 5/15/31 | A2 | 500,000 | 518,230 |
|
| Tax Exempt Income Fund 25 |
| | | |
| MUNICIPAL BONDS AND NOTES (98.8%)* cont. | Rating** | Principal amount | Value |
| Michigan cont. | | | |
| Karegnondi, Wtr. Auth. Rev. Bonds | | | |
| (Wtr. Supply Syst.), Ser. A, 5.25%, 11/1/31 | A2 | $250,000 | $279,368 |
| (Wtr. Supply Syst.), Ser. A, 5.25%, 11/1/30 | A2 | 3,000,000 | 3,357,330 |
| 5.00%, 11/1/36 ## | A | 1,285,000 | 1,429,370 |
| 5.00%, 11/1/34 ## | A | 1,600,000 | 1,786,624 |
| 5.00%, 11/1/31 ## | A | 1,100,000 | 1,239,711 |
| 5.00%, 11/1/30 ## | A | 220,000 | 248,708 |
| Kentwood, Economic Dev. Rev. Bonds | | | |
| (Holland Home), 5.625%, 11/15/32 | BBB–/F | 350,000 | 379,386 |
| (Holland Home Oblig. Group), 5.00%, 11/15/37 | BBB–/F | 2,250,000 | 2,407,455 |
| Kentwood, Pub. School G.O. Bonds, (School Bldg. & | | | |
| Site), 5.00%, 5/1/41 | AA– | 250,000 | 279,538 |
| Lansing, School Dist. G.O. Bonds, (School Bldg. & | | | |
| Site), Ser. I, Q-SBLF | | | |
| 5.00%, 5/1/41 | AA– | 225,000 | 252,261 |
| 5.00%, 5/1/27 | AA– | 500,000 | 580,590 |
| Lincoln, Cons. School Dist. G.O. Bonds, Ser. A, AGM, | | | |
| Q-SBLF, 5.00%, 5/1/40 | AA | 200,000 | 224,384 |
| Livonia, Pub. School Dist. Bldg. & Site G.O. Bonds, | | | |
| Ser. I, AGM, 5.00%, 5/1/36 | AA | 500,000 | 555,720 |
| Livonia, Pub. School Dist. G.O. Bonds, AGM, | | | |
| 5.00%, 5/1/45 | AA | 200,000 | 222,582 |
| Marquette, Board of Light & Pwr. Elec. Util. Syst. Rev. | | | |
| Bonds, Ser. A | | | |
| 5.00%, 7/1/24 | A | 400,000 | 454,988 |
| 5.00%, 7/1/18 | A | 310,000 | 312,483 |
| MI Pub. Pwr. Agcy. Rev. Bonds, Ser. A, 5.00%, 1/1/27 | A2 | 700,000 | 749,714 |
| MI State Bldg. Auth. Rev. Bonds, (Fac. Program), Ser. I | | | |
| 6.00%, 10/15/38 (Prerefunded 10/15/18) | AAA/P | 725,000 | 741,711 |
| U.S. Govt. Coll., 6.00%, 10/15/38 | | | |
| (Prerefunded 10/15/18) | AAA/P | 1,000,000 | 1,023,050 |
| MI State Fin. Auth. Rev. Bonds | | | |
| (Beaumont Hlth. Credit Group), Ser. A, | | | |
| 5.00%, 11/1/44 | A1 | 2,750,000 | 3,032,040 |
| (Sparrow Hlth. Oblig. Group), 5.00%, 11/15/42 | A1 | 1,590,000 | 1,721,811 |
| (Henry Ford Hlth. Syst.), 5.00%, 11/15/41 | A | 600,000 | 664,074 |
| Ser. H-1, 5.00%, 10/1/39 | AA– | 5,250,000 | 5,656,508 |
| (Local Govt. Loan Program — Detroit Wtr. & Swr. | | | |
| Dept. (DWSD)), Ser. D-2, 5.00%, 7/1/34 | Baa1 | 400,000 | 439,960 |
| (Local Govt. Loan Program Pub. Ltg. Auth.), Ser. B, | | | |
| 5.00%, 7/1/34 | A– | 500,000 | 541,135 |
| (Holland Cmnty. Hosp.), Ser. A, 5.00%, 1/1/34 | A+ | 750,000 | 829,988 |
| (Detroit Wtr. & Swr.), Ser. C-6, 5.00%, 7/1/33 | A3 | 270,000 | 298,264 |
| Ser. H-1, 5.00%, 10/1/30 | AA– | 500,000 | 549,325 |
| (MidMichigan Hlth.), 5.00%, 6/1/30 | A1 | 500,000 | 563,645 |
| (Detroit), Ser. C-3, 5.00%, 4/1/26 | Aa2 | 1,000,000 | 1,130,600 |
| (Detroit), Ser. C-3, 5.00%, 4/1/24 | Aa2 | 500,000 | 555,360 |
| Ser. 25-A, 5.00%, 11/1/22 | Aa3 | 125,000 | 137,018 |
| (Local Govt. Loan Program), Ser. F1, | | | |
| 4.50%, 10/1/29 | A | 850,000 | 901,026 |
|
| 26 Tax Exempt Income Fund |
| | | |
| MUNICIPAL BONDS AND NOTES (98.8%)* cont. | Rating** | Principal amount | Value |
| Michigan cont. | | | |
| MI State Fin. Auth. Ltd. Oblig. Rev. Bonds, (College | | | |
| for Creative Studies), 5.00%, 12/1/45 | BBB+ | $250,000 | $261,565 |
| MI State Hosp. Fin. Auth. Rev. Bonds, (Ascension | | | |
| Hlth.), Ser. B, 5.00%, 11/15/25 | AA+ | 1,000,000 | 1,050,250 |
| MI State Hsg. Dev. Auth. Rev. Bonds | | | |
| (Rental Hsg.), Ser. A, 4.625%, 10/1/39 | AA | 225,000 | 233,996 |
| (Rental Hsg.), Ser. A, 4.45%, 10/1/34 | AA | 100,000 | 104,645 |
| 3.95%, 12/1/40 | AA+ | 475,000 | 482,519 |
| (Rental Hsg.), Ser. D, 3.95%, 10/1/37 | AA | 1,050,000 | 1,086,887 |
| MI State Strategic Fund Ltd. Rev. Bonds | | | |
| (United Methodist Retirement Cmntys., Inc.), | | | |
| 5.75%, 11/15/33 | BBB+/F | 500,000 | 504,430 |
| (Worthington Armstrong Venture), 5.75%, 10/1/22 | | | |
| (Escrowed to maturity) | AAA/P | 1,500,000 | 1,710,825 |
| MI State Strategic Fund Ltd. Oblig. Rev. Bonds | | | |
| (Detroit Edison Co.), AMBAC, 7.00%, 5/1/21 | Aa3 | 1,500,000 | 1,711,170 |
| (Evangelical Homes of MI), 5.25%, 6/1/32 | BB+/F | 400,000 | 416,944 |
| (Cadillac Place Office Bldg.), 5.25%, 10/15/26 | Aa2 | 750,000 | 832,748 |
| MI State U. Rev. Bonds, Ser. C, 5.00%, 8/15/18 | Aa1 | 1,000,000 | 1,012,650 |
| Northern Michigan U. Rev. Bonds, Ser. A, AGM, | | | |
| 5.00%, 12/1/26 | AA | 1,000,000 | 1,005,420 |
| Oakland U. Rev. Bonds | | | |
| 5.00%, 3/1/39 | A1 | 2,000,000 | 2,209,440 |
| 5.00%, 3/1/37 | A1 | 500,000 | 542,790 |
| Ser. A, 5.00%, 3/1/33 | A1 | 500,000 | 550,135 |
| 5.00%, 3/1/32 | A1 | 130,000 | 144,654 |
| Rochester, Cmnty. School Dist. G.O. Bonds, Ser. I, | | | |
| 5.00%, 5/1/36 | AA– | 250,000 | 280,668 |
| Roseville, School Dist. G.O. Bonds, Q-SBLF, | | | |
| 5.00%, 5/1/31 | AA– | 250,000 | 281,665 |
| Saginaw Valley State U. Rev. Bonds, Ser. A | | | |
| 5.00%, 7/1/35 | A1 | 300,000 | 337,458 |
| 5.00%, 7/1/32 | A1 | 200,000 | 226,982 |
| Saginaw, Hosp. Fin. Auth. Rev. Bonds, (Convenant | | | |
| Med. Ctr.), Ser. H, 5.00%, 7/1/30 | A+ | 1,000,000 | 1,055,100 |
| South Haven, Pub. School Bldg. & Site G.O. Bonds, | | | |
| Ser. A, BAM, 5.00%, 5/1/29 | AA | 575,000 | 650,038 |
| Sturgis Pub. School Dist. G.O. Bonds, Ser. A, Q-SBLF, | | | |
| 5.00%, 5/1/27 | AA– | 325,000 | 373,311 |
| Thornapple Kellogg, School Dist. G.O. Bonds, | | | |
| Q-SBLF, 5.00%, 5/1/32 | Aa1 | 250,000 | 280,388 |
| Troy, City School Dist. Bldg. & Site G.O. Bonds, | | | |
| Q-SBLF, 5.00%, 5/1/28 | AA | 500,000 | 568,600 |
| Warren, Cons. School Dist. G.O. Bonds, Ser. A, | | | |
| Q-SBLF, 5.00%, 5/1/35 | AA– | 350,000 | 389,781 |
| Wayne Cnty., Arpt. Auth. Rev. Bonds, (Detroit Metro. | | | |
| Arpt.), Ser. C, 5.00%, 12/1/22 | A2 | 1,000,000 | 1,072,760 |
| Wayne St. U. Rev. Bonds, AGM, 5.00%, 11/15/25 | | | |
| (Prerefunded 11/15/18) | Aa3 | 415,000 | 423,877 |
| West Ottawa, Pub. School Bldg. & Site Dist. G.O. | | | |
| Bonds, Ser. I, 5.00%, 5/1/35 | Aa2 | 150,000 | 167,169 |
|
| Tax Exempt Income Fund 27 |
| | | |
| MUNICIPAL BONDS AND NOTES (98.8%)* cont. | Rating** | Principal amount | Value |
| Michigan cont. | | | |
| Western MI U. Rev. Bonds, 5.25%, 11/15/30 | Aa3 | $200,000 | $227,190 |
| Wyandotte, Elec. Rev. Bonds, Ser. A, BAM, | | | |
| 5.00%, 10/1/44 | AA | 300,000 | 323,895 |
| Ypsilanti, School Dist. G.O. Bonds, Ser. A, Q-SBLF, | | | |
| 5.00%, 5/1/32 | AA– | 250,000 | 280,480 |
| | | | 80,071,530 |
| Minnesota (0.3%) | | | |
| MN State Higher Ed. Fac. Auth. Rev. Bonds, | | | |
| (Carleton College) | | | |
| 4.00%, 3/1/36 | Aa2 | 400,000 | 421,772 |
| 4.00%, 3/1/35 | Aa2 | 1,000,000 | 1,056,810 |
| St. Paul, Port Auth. Solid Waste Disp. 144A | | | |
| Rev. Bonds, (Gerdau St. Paul Steel Mill), Ser. 7, | | | |
| 4.50%, 10/1/37 | BBB– | 1,500,000 | 1,419,795 |
| | | | 2,898,377 |
| Mississippi (1.3%) | | | |
| MS Bus. Fin. Corp. Rev. Bonds, (Syst. Energy | | | |
| Resources, Inc.), 5.875%, 4/1/22 | BBB+ | 1,865,000 | 1,868,655 |
| MS State Bus. Fin. Commission Gulf Opportunity | | | |
| Zone VRDN, (Chevron USA, Inc.), Ser. E | | | |
| 1.70%, 12/1/30 | VMIG1 | 5,600,000 | 5,600,000 |
| 1.70%, 12/1/30 | VMIG1 | 5,500,000 | 5,500,000 |
| | | | 12,968,655 |
| Missouri (1.0%) | | | |
| KS City, Sanitation Swr. Syst. Rev. Bonds, Ser. B | | | |
| 5.00%, 1/1/34 ### | Aa2 | 350,000 | 398,542 |
| 5.00%, 1/1/33 ### | Aa2 | 650,000 | 744,055 |
| 5.00%, 1/1/31 ### | Aa2 | 525,000 | 608,717 |
| 5.00%, 1/1/29 ### | Aa2 | 525,000 | 616,119 |
| 5.00%, 1/1/28 ### | Aa2 | 275,000 | 323,953 |
| MO State Dev. Fin. Board Infrastructure Fac. Rev. | | | |
| Bonds, (Independence, Elec. Syst. Dogwood), | | | |
| Ser. A, 5.00%, 6/1/37 | A | 2,000,000 | 2,176,540 |
| MO State Hlth. & Edl. Fac. Auth. VRDN, (WA U. (The)), | | | |
| Ser. D, 1.70%, 9/1/30 | VMIG1 | 4,900,000 | 4,900,000 |
| | | | 9,767,926 |
| Nevada (0.2%) | | | |
| Clark Cnty., Arpt. Rev. Bonds, Ser. A-2, 5.00%, 7/1/33 | Aa3 | 1,300,000 | 1,461,174 |
| Clark Cnty., Impt. Dist. Special Assmt. Bonds, | | | |
| (Mountains Edge Local No. 142), 5.00%, 8/1/20 | BBB | 735,000 | 770,824 |
| | | | 2,231,998 |
| New Hampshire (0.8%) | | | |
| NH State Hlth. & Ed. Fac. Auth. Rev. Bonds | | | |
| (Kendel at Hanover), 5.00%, 10/1/46 | BBB+/F | 625,000 | 669,638 |
| (Catholic Med. Ctr.), 5.00%, 7/1/44 | A– | 1,500,000 | 1,648,950 |
| (Southern NH Med. Ctr.), 5.00%, 10/1/37 | A– | 4,500,000 | 4,943,745 |
| | | | 7,262,333 |
|
| 28 Tax Exempt Income Fund |
| | | |
| MUNICIPAL BONDS AND NOTES (98.8%)* cont. | Rating** | Principal amount | Value |
| New Jersey (4.7%) | | | |
| Bayonne, G.O. Bonds, (Qualified Gen. Impt.), BAM, | | | |
| 5.00%, 7/1/39 | AA | $1,300,000 | $1,441,479 |
| NJ State Econ. Dev. Auth. Rev. Bonds | | | |
| (MSU Student Hsg.), 5.875%, 6/1/42 | | | |
| (Prerefunded 6/1/20) | Aaa | 3,840,000 | 4,176,960 |
| (School Fac. Construction), Ser. AA, | | | |
| 5.25%, 12/15/33 | Baa1 | 3,660,000 | 3,778,108 |
| (Provident Group-Montclair State U. Student Hsg. | | | |
| & Properties), 5.00%, 6/1/37 | AA | 1,250,000 | 1,398,938 |
| Ser. B, 5.00%, 11/1/26 | Baa1 | 5,400,000 | 5,949,342 |
| NJ State Econ. Dev. Auth. Special Fac. Rev. Bonds, | | | |
| (Port Newark Container Term., LLC), 5.00%, 10/1/37 | Ba1 | 3,000,000 | 3,257,280 |
| NJ State Econ. Dev. Auth. Wtr. Fac. Rev. Bonds, | | | |
| (NJ American Wtr. Co.) | | | |
| Ser. B, 5.60%, 11/1/34 | A1 | 2,000,000 | 2,112,220 |
| Ser. D, 4.875%, 11/1/29 | A1 | 1,100,000 | 1,160,852 |
| NJ State Higher Ed. Assistance Auth. Rev. Bonds, | | | |
| (Student Loan), Ser. A, 5.625%, 6/1/30 | AA | 2,250,000 | 2,338,065 |
| NJ State Hlth. Care Fac. Fin. Auth. Rev. Bonds, | | | |
| (Hackensack Meridian Hlth.), Ser. A, 5.00%, 7/1/35 | A+ | 2,500,000 | 2,876,975 |
| NJ State Hlth. Care Fac. Fin. Auth. VRDN, (Virtua | | | |
| Hlth.), Ser. C, 1.55%, 7/1/43 | A-1 | 1,000,000 | 1,000,000 |
| NJ State Trans. Trust Fund Auth. Rev. Bonds, | | | |
| (Trans. Syst.) | | | |
| Ser. A, 6.00%, 6/15/35 | Baa1 | 3,000,000 | 3,291,750 |
| Ser. C, AMBAC, zero %, 12/15/24 | Baa1 | 8,760,000 | 6,736,002 |
| South Jersey, Port Corp. Rev. Bonds, (Marine Term.), | | | |
| Ser. B, 5.00%, 1/1/36 | Baa1 | 1,000,000 | 1,086,720 |
| Union Cnty., Util. Auth. Resource Recvy. Fac. Lease | | | |
| Rev. Bonds, (Covanta Union), Ser. A, 5.25%, 12/1/31 | AA+ | 4,750,000 | 5,239,155 |
| | | | 45,843,846 |
| New Mexico (0.7%) | | | |
| Farmington, Poll. Control Rev. Bonds, (AZ Pub. Svc. | | | |
| Co.), Ser. B, 4.70%, 9/1/24 | A2 | 4,500,000 | 4,797,450 |
| Sante Fe, Retirement Fac. Rev. Bonds, (El Castillo | | | |
| Retirement Res.), 5.00%, 5/15/32 | BBB– | 2,155,000 | 2,253,440 |
| | | | 7,050,890 |
| New York (10.7%) | | | |
| Hudson Yards Infrastructure Corp. Rev. Bonds, Ser. A | | | |
| 5.75%, 2/15/47 | Aa3 | 1,140,000 | 1,242,497 |
| FHLMC Coll., U.S. Govt. Coll., 5.75%, 2/15/47 | | | |
| (Prerefunded 2/15/21) | Aa3 | 55,000 | 60,960 |
| Metro. Trans. Auth. Rev. Bonds | | | |
| Ser. D-1, 5.00%, 11/15/39 | A1 | 3,360,000 | 3,741,259 |
| (Green Bonds), Ser. C-1, 4.00%, 11/15/35 | A1 | 1,500,000 | 1,569,900 |
| (Green Bonds), Ser. C-1, 4.00%, 11/15/32 | A1 | 5,500,000 | 5,853,045 |
| Metro. Trans. Auth. BAN Rev. Notes, Ser. A-3, | | | |
| 4.00%, 8/15/19 | AA– | 12,000,000 | 12,378,480 |
| Metro. Trans. Auth. Dedicated Tax Mandatory Put | | | |
| Bonds (6/1/22), Ser. A-2A, 2.03%, 11/1/26 | AA | 5,125,000 | 5,121,105 |
|
| Tax Exempt Income Fund 29 |
| | | |
| MUNICIPAL BONDS AND NOTES (98.8%)* cont. | Rating** | Principal amount | Value |
| New York cont. | | | |
| Metro. Trans. Auth. Dedicated Tax Rev. Bonds, Ser. A, | | | |
| 5.50%, 11/15/39 (Prerefunded 11/15/18) | AAA/P | $175,000 | $179,289 |
| Monroe Cnty., Indl. Dev. Corp. Rev. Bonds, | | | |
| (U. of Rochester) | | | |
| Ser. C, 4.00%, 7/1/36 | Aa3 | 750,000 | 788,453 |
| Ser. D, 4.00%, 7/1/36 | Aa3 | 500,000 | 525,635 |
| Ser. C, 4.00%, 7/1/35 | Aa3 | 1,500,000 | 1,581,795 |
| Ser. D, 4.00%, 7/1/34 | Aa3 | 650,000 | 688,097 |
| MTA Hudson Rail Yards Trust Oblig. Rev. Bonds, | | | |
| Ser. A, 5.00%, 11/15/46 | A2 | 5,480,000 | 5,702,707 |
| NY City, G.O. Bonds, Ser. C, 5.00%, 8/1/32 | Aa2 | 2,200,000 | 2,531,342 |
| NY City, Indl. Dev. Agcy. Rev. Bonds, (Queens | | | |
| Baseball Stadium — Pilot), AMBAC, 5.00%, 1/1/23 | BBB | 300,000 | 300,750 |
| NY City, Muni. Wtr. & Swr. Syst. Fin. Auth. Rev. Bonds, | | | |
| (2nd Gen. Resolution), 5.00%, 6/15/46 | Aa1 | 2,000,000 | 2,243,440 |
| NY City, Transitional Fin. Auth. Rev. Bonds, (Future | | | |
| Tax), Ser. E-1, 5.00%, 2/1/38 | AAA | 3,710,000 | 4,215,784 |
| NY City, Transitional Fin. Auth. Bldg. Aid Rev. Bonds, | | | |
| Ser. S-1, 5.00%, 7/15/40 | Aa2 | 5,000,000 | 5,593,150 |
| NY State Dorm. Auth. Rev. Bonds | | | |
| (Construction City U. Syst.), Ser. A, 6.00%, 7/1/20 | Aa2 | 10,900,000 | 11,672,810 |
| Ser. 15B-B, 5.00%, 3/15/35 | AAA | 1,000,000 | 1,147,720 |
| NY State Dorm. Auth. Personal Income | | | |
| Tax Rev. Bonds | | | |
| Ser. E, 5.00%, 2/15/44 | AAA | 3,500,000 | 3,915,240 |
| Ser. B, 5.00%, 2/15/34 | AAA | 10,000,000 | 11,657,800 |
| NY State Dorm. Auth. Sales Tax Rev. Bonds, (Bid | | | |
| Group No. 2), Ser. A, 5.00%, 3/15/36 | AAA | 10,000,000 | 11,784,700 |
| NY State Trans. Special Fac. Dev. Corp. Rev. Bonds, | | | |
| (Laguardia Arpt. Term. B Redev. Program), Ser. A | | | |
| 5.00%, 7/1/46 | Baa3 | 1,000,000 | 1,084,600 |
| 5.00%, 7/1/41 | Baa3 | 1,000,000 | 1,088,110 |
| Port Auth. of NY & NJ Rev. Bonds | | | |
| (Kennedy Intl. Arpt. — 5th Installment), | | | |
| 6.75%, 10/1/19 | BBB–/P | 700,000 | 728,840 |
| Ser. 207, 5.00%, 9/15/30 | Aa3 | 3,800,000 | 4,449,534 |
| Ser. 172nd, 4.50%, 4/1/37 | Aa3 | 1,940,000 | 2,016,863 |
| | | | 103,863,905 |
| North Carolina (0.2%) | | | |
| NC Eastern Muni. Pwr. Agcy. Syst. Rev. Bonds, Ser. C, | | | |
| 6.75%, 1/1/24 (Prerefunded 1/1/19) | AAA/F | 1,250,000 | 1,297,125 |
| NC State Med. Care Comm. Retirement Fac. Rev. | | | |
| Bonds, (United Methodist Retirement Homes), | | | |
| Ser. A, 5.00%, 10/1/37 | BBB/F | 250,000 | 276,928 |
| NC State Muni. Pwr. Agy. No. 1 Rev. Bonds, (Catawba | | | |
| Elec.), Ser. A, 5.00%, 1/1/30 | A2 | 345,000 | 353,066 |
| | | | 1,927,119 |
|
| 30 Tax Exempt Income Fund |
| | | |
| MUNICIPAL BONDS AND NOTES (98.8%)* cont. | Rating** | Principal amount | Value |
| Ohio (4.4%) | | | |
| American Muni. Pwr., Inc. Mandatory Put Bonds | | | |
| (8/15/19), (Prairie State Energy Campus), Ser. B, | | | |
| 5.00%, 2/15/34 | A1 | $4,980,000 | $5,113,265 |
| American Muni. Pwr., Inc. Rev. Bonds, (Meldahl | | | |
| Hydroelectric (Green Bond)), Ser. A, 5.00%, 2/15/29 | A | 1,200,000 | 1,367,928 |
| Buckeye, Tobacco Settlement Fin. Auth. Rev. Bonds, | | | |
| Ser. A-2, 5.75%, 6/1/34 | B– | 4,000,000 | 3,930,000 |
| Cleveland, Income Tax Rev. Bonds, (Bridges & | | | |
| Roadways Impt.), Ser. B-2, 5.00%, 10/1/31 | AA+ | 1,230,000 | 1,428,387 |
| Franklin Cnty., Rev. Bonds, (Trinity Hlth. Credit | | | |
| Group), Ser. A, 5.00%, 12/1/47 | Aa3 | 3,500,000 | 3,933,160 |
| Franklin Cnty., Hlth. Care Fac. Rev. Bonds, | | | |
| (OH Presbyterian Retirement Svcs. (OPRS) Cmntys. | | | |
| Oblig. Group), Ser. A | | | |
| 6.125%, 7/1/40 | BBB/F | 1,000,000 | 1,104,720 |
| 6.00%, 7/1/35 | BBB/F | 1,875,000 | 2,065,275 |
| Hamilton Cnty., Hlth. Care Rev. Bonds, (Life | | | |
| Enriching Cmntys.), 5.00%, 1/1/32 | BBB–/F | 1,000,000 | 1,063,650 |
| Huber Heights City School Dist. G.O. Bonds, (School | | | |
| Impt.), 5.00%, 12/1/31 | Aa2 | 1,100,000 | 1,265,781 |
| Lancaster, Port Auth. FRN Mandatory Put Bonds | | | |
| (8/1/19), (Gas), 1.835%, 5/1/38 | A1 | 10,000,000 | 10,017,700 |
| Middleburg Heights, Hosp. Rev. Bonds, (Southwest | | | |
| Gen. Hlth. Ctr.), 5.00%, 8/1/47 | A2 | 1,500,000 | 1,629,735 |
| OH State Hosp. Fac. Rev. Bonds, (Cleveland Clinic | | | |
| Hlth. Syst.), Ser. A | | | |
| 4.00%, 1/1/43 | Aa2 | 1,450,000 | 1,494,834 |
| 4.00%, 1/1/34 | Aa2 | 1,250,000 | 1,326,638 |
| OH State Private Activity Rev. Bonds, (Portsmouth | | | |
| Bypass), AGM, 5.00%, 12/31/35 | AA | 1,750,000 | 1,941,345 |
| Scioto Cnty., Hosp. Rev. Bonds, (Southern | | | |
| OH Med. Ctr.) | | | |
| 5.00%, 2/15/34 | A2 | 645,000 | 718,982 |
| 5.00%, 2/15/33 | A2 | 355,000 | 397,543 |
| Southeastern OH Port Auth. Hosp. Fac. Rev. Bonds | | | |
| 5.75%, 12/1/32 | BB–/F | 1,350,000 | 1,464,413 |
| (Memorial Hlth. Syst. Oblig. Group), | | | |
| 5.50%, 12/1/43 | BB–/F | 145,000 | 155,845 |
| Youngstown State U. Rev. Bonds, 5.00%, 12/15/25 | A+ | 2,000,000 | 2,175,300 |
| | | | 42,594,501 |
| Oregon (0.3%) | | | |
| OR State G.O. Bonds, Ser. F, 5.00%, 5/1/39 | Aa1 | 2,635,000 | 2,986,720 |
| | | | 2,986,720 |
| Pennsylvania (4.2%) | | | |
| Centre Ctny., Hosp. Auth. Rev. Bonds, (Mount | | | |
| Nittany Med. Ctr.), Ser. A, 5.00%, 11/15/41 | A | 500,000 | 550,095 |
| Cumberland Cnty., Muni. Auth. Rev. Bonds | | | |
| (Presbyterian Homes Oblig. Group), Ser. A, | | | |
| 5.25%, 1/1/19 | BBB+/F | 1,465,000 | 1,500,394 |
| (Diakon Lutheran Social Ministries), 5.00%, 1/1/33 | BBB+/F | 1,000,000 | 1,104,500 |
| (Diakon Lutheran Social Ministries), 5.00%, 1/1/32 | BBB+/F | 120,000 | 132,971 |
| (Diakon Lutheran Social Ministries), 5.00%, 1/1/31 | BBB+/F | 100,000 | 111,168 |
|
| Tax Exempt Income Fund 31 |
| | | |
| MUNICIPAL BONDS AND NOTES (98.8%)* cont. | Rating** | Principal amount | Value |
| Pennsylvania cont. | | | |
| Dauphin Cnty., Gen. Auth. Hlth. Syst. Rev. Bonds, | | | |
| (Pinnacle Hlth. Syst.), Ser. A | | | |
| 5.00%, 6/1/36 | A1 | $510,000 | $575,066 |
| 5.00%, 6/1/34 | A1 | 640,000 | 725,088 |
| East Hempfield Twp., Indl. Dev. Auth. Rev. | | | |
| Bonds, (Millersville U. Student Hsg. & Svcs., Inc.), | | | |
| 5.00%, 7/1/29 | Baa3 | 500,000 | 542,010 |
| Geisinger, Auth. Rev. Bonds, (Geisinger Hlth. Syst.), | | | |
| Ser. A-2, 5.00%, 2/15/39 | Aa2 | 1,000,000 | 1,128,900 |
| Montgomery Cnty., Indl. Dev. Auth. Wtr. Fac. Rev. | | | |
| Bonds, (Aqua PA, Inc.), Ser. A, 5.25%, 7/1/42 | AA– | 3,250,000 | 3,273,953 |
| PA State Higher Edl. Fac. Auth. Rev. Bonds, | | | |
| (U. of Sciences Philadelphia), 5.00%, 11/1/42 | A3 | 1,500,000 | 1,626,720 |
| PA State Hsg. Fin. Agcy. Rev. Bonds, Ser. 15-117A, | | | |
| 3.95%, 10/1/30 | AA+ | 1,200,000 | 1,221,336 |
| PA State Pub. School Bldg. Auth. Rev. Bonds, | | | |
| (School Dist. Philadelphia) | | | |
| 5.00%, 4/1/24 | A2 | 1,000,000 | 1,085,350 |
| 5.00%, 4/1/23 | A2 | 1,000,000 | 1,088,520 |
| PA State Tpk. Comm. Rev. Bonds | | | |
| Ser. A, 5.00%, 12/1/44 | A1 | 5,245,000 | 5,770,759 |
| Ser. B-1, 5.00%, 6/1/42 | A3 | 1,725,000 | 1,897,811 |
| Ser. A, 5.00%, 12/1/38 | A1 | 2,250,000 | 2,488,298 |
| Ser. 2nd, 5.00%, 12/1/37 | A3 | 2,000,000 | 2,214,640 |
| PA State Tpk. Comm. Oil Franchise Tax Rev. Bonds, | | | |
| Ser. B, 5.00%, 12/1/27 | A2 | 1,250,000 | 1,438,363 |
| PA State U. Rev. Bonds, Ser. B | | | |
| 5.00%, 9/1/35 | Aa1 | 1,000,000 | 1,147,740 |
| 5.00%, 9/1/34 | Aa1 | 1,000,000 | 1,149,180 |
| Philadelphia, Gas Wks. Rev. Bonds | | | |
| 5.00%, 8/1/32 | A | 1,000,000 | 1,132,760 |
| 5.00%, 8/1/31 | A | 1,000,000 | 1,136,280 |
| Pittsburgh & Allegheny Cnty., Sports & Exhib. Auth. | | | |
| Hotel Rev. Bonds, AGM, 5.00%, 2/1/35 | AA | 3,000,000 | 3,171,270 |
| Pittsburgh, G.O. Bonds | | | |
| 5.00%, 9/1/36 | A1 | 500,000 | 571,750 |
| Ser. B, 5.00%, 9/1/25 | A1 | 2,500,000 | 2,786,000 |
| 4.00%, 9/1/33 | A1 | 500,000 | 531,855 |
| Westmoreland Cnty., Muni. Auth. Rev. Bonds, BAM, | | | |
| 5.00%, 8/15/27 | AA | 550,000 | 636,361 |
| | | | 40,739,138 |
| Rhode Island (0.5%) | | | |
| RI Hlth. & Edl. Bldg. Corp. Rev. Bonds, (Lifespan | | | |
| Oblig. Group-Hosp. Fin.), 5.00%, 5/15/33 | BBB+ | 1,000,000 | 1,102,180 |
| Tobacco Settlement Fin. Corp. Rev. Bonds, Ser. B, | | | |
| 5.00%, 6/1/50 | BBB–/P | 3,250,000 | 3,350,360 |
| | | | 4,452,540 |
|
| 32 Tax Exempt Income Fund |
| | | |
| MUNICIPAL BONDS AND NOTES (98.8%)* cont. | Rating** | Principal amount | Value |
| South Carolina (2.3%) | | | |
| Lexington Cnty., Hlth. Svcs. Dist. Rev. Bonds, | | | |
| (LexMed Oblig. Group) | | | |
| 4.00%, 11/1/32 | A1 | $750,000 | $794,063 |
| 4.00%, 11/1/31 | A1 | 750,000 | 795,960 |
| Myrtle Beach, Tax Allocation Bonds, (Myrtle Beach | | | |
| Air Force Base Redev.) | | | |
| 5.00%, 10/1/29 | A2 | 1,000,000 | 1,135,340 |
| 5.00%, 10/1/28 | A2 | 425,000 | 484,560 |
| SC State Pub. Svcs. Auth. Rev. Bonds | | | |
| (Santee Cooper), Ser. A, 5.75%, 12/1/43 | A1 | 6,000,000 | 6,759,720 |
| Ser. A, 5.50%, 12/1/54 | A1 | 2,000,000 | 2,205,880 |
| Ser. E, 5.25%, 12/1/55 | A1 | 1,970,000 | 2,159,593 |
| Ser. A, 5.00%, 12/1/50 | A1 | 5,000,000 | 5,372,850 |
| Ser. E, 5.00%, 12/1/48 | A1 | 1,385,000 | 1,470,316 |
| Ser. A, 5.00%, 12/1/25 | A1 | 750,000 | 849,600 |
| | | | 22,027,882 |
| Tennessee (0.4%) | | | |
| TN Energy Acquisition Corp. Gas Rev. Bonds, Ser. A, | | | |
| 5.25%, 9/1/20 | A3 | 4,000,000 | 4,298,560 |
| | | | 4,298,560 |
| Texas (11.4%) | | | |
| Arlington, Higher Ed. Fin. Corp. Rev. Bonds, (Uplift | | | |
| Ed.), Ser. A, PSFG | | | |
| 5.00%, 12/1/33 | AAA | 1,575,000 | 1,813,361 |
| 4.00%, 12/1/31 | AAA | 365,000 | 387,718 |
| Bexar Cnty., G.O. Bonds, 4.00%, 6/15/34 | Aaa | 2,000,000 | 2,105,660 |
| Brazos River Harbor Naval Dist. Env. Rev. Bonds, | | | |
| (Dow Chemical Co.), Ser. A-4, 5.95%, 5/15/33 | BBB | 1,100,000 | 1,127,830 |
| Brazos, Harbor Indl. Dev. Corp. Env. Fac. Mandatory | | | |
| Put Bonds (5/1/28), (Dow Chemical), 5.90%, 5/1/38 | BBB | 3,450,000 | 3,472,253 |
| Central TX Regl. Mobility Auth. Rev. Bonds, (Sr. Lien), | | | |
| Ser. A, 5.00%, 1/1/33 | BBB+ | 650,000 | 709,469 |
| Clifton, Higher Ed. Fin. Corp. Rev. Bonds, (IDEA | | | |
| Pub. Schools) | | | |
| Ser. B, 5.00%, 8/15/27 | BBB+ | 375,000 | 428,033 |
| PSFG, 4.00%, 8/15/31 | AAA | 2,000,000 | 2,157,120 |
| Dallas, Area Rapid Transit Rev. Bonds, Ser. A, | | | |
| 5.00%, 12/1/46 | AA+ | 5,530,000 | 6,217,324 |
| Dallas, Area Rapid Transit Sales Tax Rev. Bonds, | | | |
| Ser. A, 5.00%, 12/1/41 | AA+ | 2,215,000 | 2,498,343 |
| Dallas-Fort Worth, Intl. Arpt. Rev. Bonds, Ser. A, | | | |
| 5.00%, 11/1/43 | A1 | 1,735,000 | 1,831,917 |
| Dallas-Fort Worth, Intl. Arpt. Fac. Impt. Corp. Rev. | | | |
| Bonds, Ser. A, 5.25%, 11/1/30 | A+ | 5,000,000 | 5,617,450 |
| Harris Cnty., Cultural Ed. Fac. Fin. Corp. Rev. | | | |
| Bonds, (YMCA of the Greater Houston Area), Ser. A, | | | |
| 5.00%, 6/1/28 | Baa3 | 1,300,000 | 1,398,280 |
| Harris Cnty., Cultural Ed. Fac. Fin. Corp. VRDN, (The | | | |
| Methodist Hosp.), Ser. C-1, 1.72%, 12/1/24 | A-1+ | 5,000,000 | 5,000,000 |
| Houston, G.O. Bonds, ( Indpt. School Dist.), Ser. A, | | | |
| PSFG, 4.00%, 2/15/34 | Aaa | 10,000,000 | 10,573,600 |
|
| Tax Exempt Income Fund 33 |
| | | |
| MUNICIPAL BONDS AND NOTES (98.8%)* cont. | Rating** | Principal amount | Value |
| Texas cont. | | | |
| Houston, Arpt. Syst. Rev. Bonds, Ser. A, | | | |
| 5.00%, 7/1/25 | A+ | $3,500,000 | $3,786,860 |
| Houston, Higher Ed. Fin. Co. Rev. Bonds, (Cosmos | | | |
| Foundation), Ser. A, 5.00%, 2/15/32 | BBB | 1,250,000 | 1,319,525 |
| Houston, Util. Syst. Rev. Bonds, Ser. D, | | | |
| 5.00%, 11/15/39 | Aa2 | 2,285,000 | 2,585,158 |
| La Vernia, Higher Ed. Fin. Corp. Rev. Bonds, (Kipp, | | | |
| Inc.), Ser. A, 6.375%, 8/15/44 (Prerefunded 8/15/19) | BBB | 1,700,000 | 1,805,434 |
| Lower CO River Auth. Transmission Svcs. Contract | | | |
| Corp. Rev. Bonds | | | |
| 5.00%, 5/15/40 | A | 750,000 | 826,755 |
| 5.00%, 5/15/33 | A | 150,000 | 170,655 |
| Matagorda Cnty., Poll. Control Rev. Bonds, (Dist. | | | |
| No. 1), Ser. A, AMBAC, 4.40%, 5/1/30 | A– | 2,250,000 | 2,411,303 |
| Mission, Econ. Dev. Corp. Solid Waste Disp. | | | |
| Mandatory Put Bonds (7/2/18), (Republic Svcs., Inc.), | | | |
| Ser. A, 1.65%, 1/1/20 | A–2 | 1,300,000 | 1,300,000 |
| New Hope Cultural Ed. Fac. Fin. Corp. Rev. Bonds, | | | |
| (Children’s Hlth. Syst. of TX), Ser. A, 4.00%, 8/15/34 | Aa2 | 1,000,000 | 1,050,210 |
| New Hope, Cultural Ed. Fac. Fin. Corp. Rev. Bonds, | | | |
| (Wesleyan Homes, Inc.), 5.50%, 1/1/43 | BB–/P | 750,000 | 802,605 |
| North TX, Tollway Auth. Rev. Bonds | | | |
| (1st Tier), Ser. I, 6.50%, 1/1/43 | A1 | 9,700,000 | 11,765,033 |
| Ser. D, AGC, zero %, 1/1/28 | AA | 11,620,000 | 8,569,169 |
| Red River, Hlth. Retirement Fac. Dev. Corp. | | | |
| Rev. Bonds, (Sears Methodist Retirement Syst. | | | |
| Oblig. Group) | | | |
| Ser. C, 6.25%, 5/9/53 (In default) † | D/P | 46,000 | 64 |
| Ser. B, 6.15%, 11/15/49 (In default) † | D/P | 700,000 | 980 |
| Ser. A, 6.05%, 11/15/46 (In default) † | D/P | 525,000 | 368 |
| Ser. D, 6.05%, 11/15/46 (In default) † | D/P | 91,000 | 64 |
| Ser. A, 5.15%, 11/15/27 (In default) † | D/P | 1,490,000 | 1,043 |
| SA Energy Acquisition Pub. Fac. Corp. Rev. Bonds, | | | |
| (Gas Supply), 5.50%, 8/1/25 | A3 | 250,000 | 291,903 |
| San Antonio, Arpt. Syst. Rev. Bonds, AGM, | | | |
| 5.25%, 7/1/32 | AA | 1,415,000 | 1,418,382 |
| San Antonio, Elec. & Gas Syst. Mandatory Put Bonds | | | |
| (12/1/21), Ser. B, 2.00%, 2/1/33 | Aa2 | 1,500,000 | 1,500,900 |
| Tarrant Cnty., Cultural Ed. Fac. Fin. Corp. Retirement | | | |
| Fac. Rev. Bonds, (Buckner Retirement Svcs., Inc.) | | | |
| 5.00%, 11/15/46 | A/F | 1,600,000 | 1,783,408 |
| 5.00%, 11/15/37 | A/F | 750,000 | 842,468 |
| TX Private Activity Surface Trans. Corp. Rev. Bonds, | | | |
| (NTE Mobility), 6.875%, 12/31/39 | Baa2 | 1,650,000 | 1,783,304 |
| TX State G.O. Bonds | | | |
| (Trans. Auth.), Ser. A, 5.00%, 10/1/44 | Aaa | 4,950,000 | 5,567,562 |
| 5.00%, 4/1/44 | Aaa | 5,000,000 | 5,579,750 |
| (Trans. Comm.-Mobility Fund), 4.00%, 10/1/32 | Aaa | 1,000,000 | 1,061,820 |
| TX State Indl. Dev. Corp. Rev. Bonds, (Arco Pipelines | | | |
| Co.), 7.375%, 10/1/20 | A1 | 4,000,000 | 4,475,920 |
|
| 34 Tax Exempt Income Fund |
| | | |
| MUNICIPAL BONDS AND NOTES (98.8%)* cont. | Rating** | Principal amount | Value |
| Texas cont. | | | |
| TX State Muni. Gas Acquisition & Supply Corp. III Rev. | | | |
| Bonds, 5.00%, 12/15/29 | A3 | $2,475,000 | $2,716,560 |
| TX State Muni. Pwr. Agcy. Rev. Bonds, (Syst. Net/ | | | |
| Transmission Converting Security) | | | |
| 5.00%, 9/1/47 | A+ | 1,750,000 | 1,858,045 |
| 5.00%, 9/1/37 | A+ | 250,000 | 266,345 |
| | | | 110,879,951 |
| Utah (0.7%) | | | |
| Murray City, Hosp. VRDN, (IHC Hlth. Svcs., Inc.), | | | |
| Ser. A, 1.72%, 5/15/37 | VMIG1 | 5,800,000 | 5,800,000 |
| Salt Lake City, Hosp. Rev. Bonds, AMBAC, U.S. Govt. | | | |
| Coll., 6.75%, 5/15/20 (Escrowed to maturity) | AAA/P | 1,000,000 | 1,014,700 |
| | | | 6,814,700 |
| Virginia (3.4%) | | | |
| Fairfax Cnty., Econ. Dev. Auth. Res. Care Fac. Rev. | | | |
| Bonds, (Goodwin House, Inc.), Ser. A, 5.00%, 10/1/36 | BBB/F | 650,000 | 724,224 |
| Henrico Cnty., Econ. Dev. Auth. Res. Care Fac. Rev. | | | |
| Bonds, (VA United Methodist Homes, Inc.) | | | |
| 5.00%, 6/1/25 | BB+/P | 410,000 | 437,696 |
| 5.00%, 6/1/23 | BB+/P | 445,000 | 480,280 |
| Henrico Cnty., Indl. Dev. Auth. Rev. Bonds, AGM, | | | |
| 5.929%, 8/23/27 | AA | 11,900,000 | 13,236,608 |
| Small Bus. Fin. Auth. Private Activity Rev. Bonds, | | | |
| (Transform 66 P3) | | | |
| 5.00%, 12/31/56 | Baa3 | 5,500,000 | 5,960,900 |
| 5.00%, 12/31/52 | Baa3 | 1,000,000 | 1,085,420 |
| VA State Cmnwlth. U. Hlth. Syst. Auth. Rev. | | | |
| Bonds, Ser. B | | | |
| 4.00%, 7/1/40 | Aa3 | 700,000 | 724,052 |
| 4.00%, 7/1/37 | Aa3 | 1,500,000 | 1,565,970 |
| 4.00%, 7/1/36 | Aa3 | 1,500,000 | 1,569,600 |
| VA State Small Bus. Fin. Auth. Rev. Bonds, (Express | | | |
| Lanes, LLC), 5.00%, 7/1/34 | BBB | 1,200,000 | 1,288,320 |
| Washington Cnty., Indl. Dev. Auth. Hosp. Fac. Rev. | | | |
| Bonds, (Mountain States Hlth. Alliance), Ser. C, | | | |
| 7.75%, 7/1/38 | Baa1 | 6,100,000 | 6,350,161 |
| | | | 33,423,231 |
| Washington (2.3%) | | | |
| Grant Cnty., Pub. Util. Dist. No. 2 Mandatory Put | | | |
| Bonds (12/2/20), (Elec. Syst.), 2.00%, 1/1/44 | AA | 2,500,000 | 2,496,750 |
| Port of Seattle, Rev. Bonds, Ser. C, 5.00%, 4/1/40 | A1 | 1,000,000 | 1,094,360 |
| Seattle, Muni. Light & Pwr. Rev. Bonds, Ser. C, | | | |
| 4.00%, 9/1/47 | Aa2 | 4,000,000 | 4,146,080 |
| Seattle, Solid Waste Disp. Rev. Bonds, 4.00%, 6/1/32 | AA | 2,000,000 | 2,133,300 |
| WA State COP, Ser. A, 5.00%, 7/1/34 | Aa2 | 4,480,000 | 5,155,539 |
| WA State G.O. Bonds, Ser. A-1, 5.00%, 8/1/37 | Aa1 | 1,580,000 | 1,795,322 |
| WA State Hlth. Care Fac. Auth. FRN Mandatory Put | | | |
| Bonds (7/1/22), (Fred Hutchinson Cancer Research | | | |
| Ctr.), Ser. B, 2.358%, 1/1/42 | A | 2,500,000 | 2,516,350 |
|
| Tax Exempt Income Fund 35 |
| | | |
| MUNICIPAL BONDS AND NOTES (98.8%)* cont. | Rating** | Principal amount | Value |
| Washington cont. | | | |
| WA State Hlth. Care Fac. Auth. Rev. Bonds | | | |
| (WA Hlth. Svcs.), 7.00%, 7/1/39 | | | |
| (Prerefunded 7/1/19) | Baa1 | $1,250,000 | $1,327,988 |
| (Central WA Hlth. Svcs. Assn.), 4.00%, 7/1/36 | Baa1 | 1,620,000 | 1,623,969 |
| WA State Hsg. Fin. Comm. 144A Rev. Bonds, | | | |
| (Bayview Manor Homes), Ser. A, 5.00%, 7/1/36 | BB+/P | 375,000 | 388,556 |
| | | | 22,678,214 |
| West Virginia (0.1%) | | | |
| WV State Econ. Dev. Auth. Solid Waste Disp. Fac. | | | |
| FRB, (Appalachian Pwr. Co.), Ser. A, 5.375%, 12/1/38 | A– | 1,000,000 | 1,077,020 |
| | | | 1,077,020 |
| Wisconsin (0.7%) | | | |
| Pub. Fin. Auth. Arpt. Fac. Rev. Bonds, (Sr. Oblig. | | | |
| Group), 5.25%, 7/1/28 | BBB | 1,000,000 | 1,086,090 |
| Pub. Fin. Auth. Solid Waste Disp. Mandatory | | | |
| Put Bonds (2/1/18), (Waste Mgt., Inc.), Ser. A-2, | | | |
| 1.60%, 10/1/25 | A–2 | 1,500,000 | 1,499,475 |
| WI State Rev. Bonds, Ser. A, U.S. Govt. Coll., 6.00%, | | | |
| 5/1/27 (Prerefunded 5/1/19) | AAA/P | 330,000 | 345,520 |
| WI State Hlth. & Edl. Fac. Auth. Rev. Bonds | | | |
| (Prohealth Care, Inc.), 6.625%, 2/15/39 | | | |
| (Prerefunded 2/15/19) | AAA/P | 3,000,000 | 3,125,391 |
| (Three Pillars Sr. Living), 5.00%, 8/15/28 | A/F | 1,040,000 | 1,149,418 |
| | | | 7,205,894 |
| Wyoming (0.3%) | | | |
| Campbell Cnty., Solid Waste Fac. Rev. Bonds, (Basin | | | |
| Elec. Pwr. Co-op), Ser. A, 5.75%, 7/15/39 | A | 3,000,000 | 3,138,990 |
| | | | 3,138,990 |
| Total municipal bonds and notes (cost $925,803,492) | | $958,037,999 |
| |
| PREFERRED STOCKS (0.2%)* | | Shares | Value |
| MuniMae Tax Exempt Bond Subsidiary, LLC 144A Ser. B, $5.75 cum. pfd. | 2,000,000 | $2,096,360 |
| Total preferred stocks (cost $2,000,000) | | | $2,096,360 |
| |
| TOTAL INVESTMENTS | | | |
| Total investments (cost $927,803,492) | | | $960,134,359 |
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 October 1, 2017 through March 31, 2018 (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 $969,739,740.
|
| 36 Tax Exempt Income Fund |
** 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.
† This security is non-income-producing.
## Forward commitment, in part or in entirety (Note 1).
### When-issued security (Note 1).
F This security is valued by Putnam Management at fair value following procedures approved by the Trustees. Securities are classified as Level 3 for ASC 820 based on the securities’ valuation inputs (Note 1).
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.
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):
| | |
| Health care | 16.8% | |
| Utilities | 15.7 | |
| Transportation | 15.1 | |
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 | $— | $958,026,961 | $11,038 |
| Preferred stocks | — | 2,096,360 | — |
| Totals by level | $— | $960,123,321 | $11,038 |
During the reporting period, transfers within the fair value hierarchy, if any (other than certain transfers involving non-U.S. equity securities as described in Note 1), did not represent, in the aggregate, more than 1% of the fund’s net assets measured as of the end of the period. Transfers are accounted for using the end of period pricing valuation method.
At the start and close of the reporting period, Level 3 investments in securities represented less than 1% of the fund’s net assets and were not considered a significant portion of the fund’s portfolio.
The accompanying notes are an integral part of these financial statements.
|
| Tax Exempt Income Fund 37 |
Statement of assets and liabilities 3/31/18 (Unaudited)
| |
| ASSETS | |
| Investment in securities, at value (Note 1): | |
| Unaffiliated issuers (identified cost $927,803,492) | $960,134,359 |
| Cash | 3,751,999 |
| Interest and other receivables | 12,838,527 |
| Receivable for shares of the fund sold | 245,951 |
| Receivable for investments sold | 3,795,519 |
| Receivable for custodian fees (Note 2) | 41,486 |
| Prepaid assets | 46,468 |
| Total assets | 980,854,309 |
| |
| LIABILITIES | |
| Payable for purchases of delayed delivery securities (Note 1) | 7,689,847 |
| Payable for shares of the fund repurchased | 1,443,076 |
| Payable for compensation of Manager (Note 2) | 355,050 |
| Payable for investor servicing fees (Note 2) | 178,557 |
| Payable for Trustee compensation and expenses (Note 2) | 518,336 |
| Payable for administrative services (Note 2) | 5,675 |
| Payable for distribution fees (Note 2) | 498,891 |
| Distributions payable to shareholders | 288,907 |
| Other accrued expenses | 136,230 |
| Total liabilities | 11,114,569 |
| | |
| Net assets | $969,739,740 |
| |
| REPRESENTED BY | |
| Paid-in capital (Unlimited shares authorized) (Notes 1, 4 and 6) | $947,521,799 |
| Undistributed net investment income (Notes 1 and 6) | 853,206 |
| Accumulated net realized loss on investments (Notes 1 and 6) | (10,966,132) |
| Net unrealized appreciation of investments and assets and liabilities in foreign currencies | 32,330,867 |
| Total — Representing net assets applicable to capital shares outstanding | $969,739,740 |
| |
| COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE | |
| Net asset value and redemption price per class A share | |
| ($851,904,300 divided by 100,288,123 shares) | $8.49 |
| Offering price per class A share (100/96.00 of $8.49)* | $8.84 |
| Net asset value and offering price per class B share ($5,845,487 divided by 687,975 shares)** | $8.50 |
| Net asset value and offering price per class C share ($37,713,567 divided by 4,428,982 shares)** | $8.52 |
| Net asset value and redemption price per class M share ($6,690,948 divided by 784,944 shares) | $8.52 |
| Offering price per class M share (100/96.75 of $8.52)† | $8.81 |
| Net asset value, offering price and redemption price per class Y share | |
| ($67,585,438 divided by 7,936,875 shares) | $8.52 |
* 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.
† On single retail sales of less than $50,000. On sales of $50,000 or more the offering price is reduced.
The accompanying notes are an integral part of these financial statements.
|
| 38 Tax Exempt Income Fund |
Statement of operations Six months ended 3/31/18 (Unaudited)
| |
| INVESTMENT INCOME | |
| Interest income | $19,154,027 |
| Total investment income | 19,154,027 |
| |
| EXPENSES | |
| Compensation of Manager (Note 2) | 2,151,322 |
| Investor servicing fees (Note 2) | 360,208 |
| Custodian fees (Note 2) | 7,922 |
| Trustee compensation and expenses (Note 2) | 3,133 |
| Distribution fees (Note 2) | 1,186,400 |
| Administrative services (Note 2) | 17,365 |
| Other | 166,433 |
| Total expenses | 3,892,783 |
| Expense reduction (Note 2) | (75,415) |
| Net expenses | 3,817,368 |
| | |
| Net investment income | 15,336,659 |
| |
| REALIZED AND UNREALIZED GAIN (LOSS) | |
| Net realized gain (loss) on: | |
| Securities from unaffiliated issuers (Notes 1 and 3) | 6,126,776 |
| Total net realized gain | 6,126,776 |
| Change in net unrealized appreciation (depreciation) on: | |
| Securities in unaffiliated issuers | (21,025,613) |
| Total change in net unrealized depreciation | (21,025,613) |
| | |
| Net loss on investments | (14,898,837) |
| | |
| Net increase in net assets resulting from operations | 437,822 |
The accompanying notes are an integral part of these financial statements.
|
| Tax Exempt Income Fund 39 |
Statement of changes in net assets
| | |
| DECREASE IN NET ASSETS | Six months ended 3/31/18* | Year ended 9/30/17 |
| Operations | | |
| Net investment income | $15,336,659 | $32,139,022 |
| Net realized gain on investments | 6,126,776 | 16,178,931 |
| Net unrealized depreciation of investments | (21,025,613) | (42,292,449) |
| Net increase in net assets resulting from operations | 437,822 | 6,025,504 |
| Distributions to shareholders (Note 1): | | |
| From ordinary income | | |
| Taxable net investment income | | |
| Class A | (869,184) | (1,364,499) |
| Class B | (6,271) | (10,188) |
| Class C | (39,369) | (60,786) |
| Class M | (7,002) | (10,041) |
| Class Y | (66,547) | (78,425) |
| From tax-exempt net investment income | | |
| Class A | (13,451,610) | (28,426,891) |
| Class B | (77,264) | (171,392) |
| Class C | (449,892) | (958,988) |
| Class M | (97,145) | (198,935) |
| Class Y | (1,104,949) | (1,849,355) |
| Increase (decrease) from capital share transactions | | |
| (Notes 4 and 6) | (29,593,630) | 23,845,091 |
| Total decrease in net assets | (45,325,041) | (3,258,905) |
| |
| NET ASSETS | | |
| Beginning of period | 1,015,064,781 | 1,018,323,686 |
| End of period (including undistributed net investment | | |
| income of $853,206 and $1,685,780, respectively) | $969,739,740 | $1,015,064,781 |
* Unaudited.
The accompanying notes are an integral part of these financial statements.
|
| 40 Tax Exempt Income Fund |
|
| This page left blank intentionally. |
|
| Tax Exempt Income Fund 41 |
Financial highlights (For a common share outstanding throughout the period)
| | | | | | | | | | | | | |
| | INVESTMENT OPERATIONS | LESS DISTRIBUTIONS | | RATIOS AND SUPPLEMENTAL DATA |
| | | | | | | | | | | | | Ratio of net | |
| | Net asset | | Net realized | | From | | | | | | Ratio | investment | |
| | value, | | and unrealized | Total from | net | | Non-recurring | Net asset | Total return | Net assets, | of expenses | income (loss) | Portfolio |
| | beginning | Net investment | gain (loss) | investment | investment | Total | reimburse | value, end | at net asset | end of period | to average | to average | turnover |
| Period ended | of period | income (loss) | on investments | operations | income | distributions | ments | of period | value (%)a | (in thousands) | net assets (%)b | net assets (%) | (%) |
| Class A | | | | | | | | | | | | | |
| March 31, 2018** | $8.63 | .13 | (.13) | —e | (.14) | (.14) | — | $8.49 | —*g | $851,904 | .38* | 1.55* | 22* |
| September 30, 2017 | 8.86 | .29 | (.22) | .07 | (.30) | (.30) | — | 8.63 | .88 | 894,935 | .78c | 3.40 | 35 |
| September 30, 2016 | 8.70 | .32 | .15 | .47 | (.31) | (.31) | — | 8.86 | 5.54 | 910,921 | .77d | 3.59d | 21 |
| September 30, 2015 | 8.80 | .34 | (.10) | .24 | (.34) | (.34) | — | 8.70 | 2.78 | 870,134 | .75 | 3.83 | 16 |
| September 30, 2014 | 8.44 | .35 | .35 | .70 | (.34) | (.34) | —e,f | 8.80 | 8.49 | 903,820 | .75 | 4.03 | 6 |
| September 30, 2013 | 9.08 | .35 | (.65) | (.30) | (.34) | (.34) | — | 8.44 | (3.37) | 963,579 | .74 | 3.89 | 10 |
| Class B | | | | | | | | | | | | | |
| March 31, 2018** | $8.63 | .11 | (.13) | (.02) | (.11) | (.11) | — | $8.50 | (.20)* | $5,845 | .70* | 1.23* | 22* |
| September 30, 2017 | 8.86 | .24 | (.22) | .02 | (.25) | (.25) | — | 8.63 | .24 | 6,786 | 1.41c | 2.76 | 35 |
| September 30, 2016 | 8.70 | .26 | .16 | .42 | (.26) | (.26) | — | 8.86 | 4.87 | 6,876 | 1.40d | 2.96d | 21 |
| September 30, 2015 | 8.80 | .28 | (.09) | .19 | (.29) | (.29) | — | 8.70 | 2.13 | 7,141 | 1.38 | 3.20 | 16 |
| September 30, 2014 | 8.44 | .29 | .36 | .65 | (.29) | (.29) | —e,f | 8.80 | 7.81 | 7,516 | 1.38 | 3.41 | 6 |
| September 30, 2013 | 9.08 | .29 | (.64) | (.35) | (.29) | (.29) | — | 8.44 | (3.99) | 9,093 | 1.37 | 3.26 | 10 |
| Class C | | | | | | | | | | | | | |
| March 31, 2018** | $8.65 | .10 | (.12) | (.02) | (.11) | (.11) | — | $8.52 | (.28)* | $37,714 | .77* | 1.16* | 22* |
| September 30, 2017 | 8.88 | .22 | (.22) | —e | (.23) | (.23) | — | 8.65 | .09 | 40,251 | 1.56c | 2.62 | 35 |
| September 30, 2016 | 8.72 | .25 | .15 | .40 | (.24) | (.24) | — | 8.88 | 4.70 | 40,983 | 1.55d | 2.80d | 21 |
| September 30, 2015 | 8.81 | .27 | (.09) | .18 | (.27) | (.27) | — | 8.72 | 2.08 | 33,963 | 1.53 | 3.05 | 16 |
| September 30, 2014 | 8.46 | .28 | .34 | .62 | (.27) | (.27) | —e,f | 8.81 | 7.51 | 31,947 | 1.53 | 3.25 | 6 |
| September 30, 2013 | 9.10 | .28 | (.65) | (.37) | (.27) | (.27) | — | 8.46 | (4.13) | 36,599 | 1.52 | 3.12 | 10 |
| Class M | | | | | | | | | | | | | |
| March 31, 2018** | $8.66 | .12 | (.13) | (.01) | (.13) | (.13) | — | $8.52 | (.14)* | $6,691 | .52* | 1.41* | 22* |
| September 30, 2017 | 8.89 | .27 | (.22) | .05 | (.28) | (.28) | — | 8.66 | .59 | 7,353 | 1.06c | 3.11 | 35 |
| September 30, 2016 | 8.73 | .29 | .16 | .45 | (.29) | (.29) | — | 8.89 | 5.22 | 6,768 | 1.05d | 3.30d | 21 |
| September 30, 2015 | 8.82 | .31 | (.08) | .23 | (.32) | (.32) | — | 8.73 | 2.59 | 6,179 | 1.03 | 3.55 | 16 |
| September 30, 2014 | 8.47 | .32 | .35 | .67 | (.32) | (.32) | —e,f | 8.82 | 8.04 | 6,553 | 1.03 | 3.75 | 6 |
| September 30, 2013 | 9.11 | .32 | (.64) | (.32) | (.32) | (.32) | — | 8.47 | (3.64) | 6,537 | 1.02 | 3.62 | 10 |
| Class Y | | | | | | | | | | | | | |
| March 31, 2018** | $8.65 | .14 | (.12) | .02 | (.15) | (.15) | — | $8.52 | .22* | $67,585 | .27* | 1.66* | 22* |
| September 30, 2017 | 8.88 | .31 | (.22) | .09 | (.32) | (.32) | — | 8.65 | 1.09 | 65,741 | .56c | 3.60 | 35 |
| September 30, 2016 | 8.72 | .34 | .15 | .49 | (.33) | (.33) | — | 8.88 | 5.75 | 52,776 | .55d | 3.79d | 21 |
| September 30, 2015 | 8.81 | .36 | (.09) | .27 | (.36) | (.36) | — | 8.72 | 3.11 | 39,206 | .53 | 4.06 | 16 |
| September 30, 2014 | 8.46 | .36 | .35 | .71 | (.36) | (.36) | —e,f | 8.81 | 8.59 | 38,575 | .53 | 4.24 | 6 |
| September 30, 2013 | 9.10 | .37 | (.65) | (.28) | (.36) | (.36) | — | 8.46 | (3.15) | 27,268 | .52 | 4.11 | 10 |
* 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 arrangements, if any (Note 2). Also excludes acquired fund fees, if any.
c Includes one-time merger costs of 0.01% as a percentage of average net assets.
d Reflects a voluntary waiver of certain fund expenses in effect during the period. As a result of such waiver, the expenses of each class reflect a reduction of less than 0.01% as a percentage of average net assets.
e Amount represents less than $0.01 per share.
f Reflects a non-recurring reimbursement pursuant to a settlement between the Securities and Exchange Commission (the SEC) and Morgan Stanley & Co. which amounted to less than $0.01 per share outstanding on December 3, 2013.
g Amount represents less than 0.01%.
The accompanying notes are an integral part of these financial statements.
| |
| 42 Tax Exempt Income Fund | Tax Exempt Income Fund 43 |
Notes to financial statements 3/31/18 (Unaudited)
Within the following Notes to financial statements, references to “State Street” represent State Street Bank and Trust Company, references to “the SEC” represent the Securities and Exchange Commission, 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 “OTC”, if any, represent over-the-counter. Unless otherwise noted, the “reporting period” represents the period from October 1, 2017 through March 31, 2018.
Putnam Tax Exempt Income Fund (the fund) is a Massachusetts business trust, which is registered under the Investment Company Act of 1940, as amended, as a diversified 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 to be 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)), are investment-grade in quality, and have intermediate- to long-term maturities (i.e., three years or longer). Under normal circumstances, the fund invests at least 80% of its net assets in tax-exempt investments, which for purposes of this policy exclude investments paying interest subject to the federal AMT for individuals. This investment policy cannot be changed without the approval of the fund’s shareholders. Tax-exempt investments are issued by or for states, territories or possessions of the United States or by their political subdivisions, agencies, authorities or other government entities, and the income from these investments is exempt from both federal and the applicable state’s income tax. Interest income from private activity bonds may be subject to federal AMT for individuals. These investments are not included for the purpose of complying with the 80% investment policy. 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 class A, class B, class C, class M and class Y shares. Purchases of class B shares are closed to new and existing investors except by exchange from class B shares of another Putnam fund or through dividend and/or capital gains reinvestment. The fund registered class T shares in February 2017, however, as of the date of this report, class T shares had not commenced operations and are not available for purchase. Class A and class M shares are sold with a maximum front-end sales charge of 4.00% and 3.25%, respectively. Class A shares generally are not subject to a contingent deferred sales charge, and class M and class Y shares are not subject to a contingent deferred sales charge. Class B shares, which convert to class A shares after approximately eight years, are not subject to a front-end sales charge and are subject to a contingent deferred sales charge if those shares are redeemed within six years of purchase. Class C shares are subject to a one-year 1.00% contingent deferred sales charge and generally convert to class A shares after approximately ten years. Prior to April 1, 2018, class C shares did not convert to class A shares. The expenses for class A, class B, class C, and class M shares may differ based on the distribution fee of each class, which is identified in Note 2. Class Y shares, which are sold at net asset value, are generally subject to the same expenses as class A, class B, class C, and class M shares, but do not bear a distribution fee. Class Y shares are 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 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.
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
|
| 44 Tax Exempt Income Fund |
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.
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 is recorded on the accrual basis. All premiums/discounts are amortized/accreted on a yield-to-maturity basis. The premium in excess of the call price, if any, is amortized to the call date; thereafter, any remaining premium is amortized to maturity.
Securities purchased or sold on a when-issued or forward commitment or 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.
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 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 $317.5 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 LIBOR for the committed line of credit and the Federal Funds rate plus 1.30% for the uncommitted line of credit. A closing fee equal to 0.04% of the committed line of credit plus a $25,000 flat fee and 0.04% of the uncommitted line of credit has been paid by the participating funds. In addition, a commitment fee of 0.21% per annum on any unutilized portion of
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| Tax Exempt Income Fund 45 |
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 taxable 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.
At September 30, 2017, the fund had a capital loss carryover of $14,947,569 available to the extent allowed by the Code to offset future net capital gain, if any. As a result of the July 21, 2017 mergers, the fund acquired $918,263 in capital loss carryovers. This amount includes $122,822 of capital loss carryovers acquired in connection with the fund’s acquisition of Putnam Arizona Tax Exempt Income Fund and $795,441 of capital loss carryovers acquired in connection with the fund’s acquisition of Putnam Michigan Tax Exempt Income Fund, which are subject to limitations imposed by the Code. The amounts of the combined carryovers and the expiration dates are:
| | | |
| | Loss carryover | |
| Short-term | Long-term | Total | Expiration |
| $252,194 | $— | $252,194 | * |
| 13,617,607 | N/A | 13,617,607 | September 30, 2018 |
| 1,077,768 | N/A | 1,077,768 | September 30, 2019 |
* Under the Regulated Investment Company Modernization Act of 2010, the fund will be permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period. However, any losses incurred will be required to be utilized prior to the losses incurred in pre-enactment tax years. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.
Pursuant to federal income tax regulations applicable to regulated investment companies, the fund has elected to defer certain capital losses of $1,471,222 recognized during the period between November 1, 2016 and September 30, 2017 to its fiscal year ending September 30, 2018, a portion of which could be subject to limitations imposed by the Code.
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 $928,477,609, resulting in gross unrealized appreciation and depreciation of $37,234,865 and $5,578,115, respectively, or net unrealized appreciation of $31,656,750.
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.
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
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| 46 Tax Exempt Income Fund |
invested in by, other Putnam funds to the extent necessary to avoid “double counting” of those assets). Such annual rates may vary as follows:
| | | | |
| 0.590% | of the first $5 billion, | | 0.390% | of the next $50 billion, |
| 0.540% | of the next $5 billion, | | 0.370% | of the next $50 billion, |
| 0.490% | of the next $10 billion, | | 0.360% | of the next $100 billion and |
| 0.440% | of the next $10 billion, | | 0.355% | 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 0.216% of the fund’s average net assets.
Putnam Management has contractually agreed, through January 30, 2019, to waive fees 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 Investments Limited (PIL), an affiliate of Putnam Management, 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 0.40% 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.
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 B, class C, class M, 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.
During the reporting period, the expenses for each class of shares related to investor servicing fees were as follows:
| | | | |
| Class A | $316,730 | | Class M | 2,529 |
| Class B | 2,292 | | Class Y | 24,392 |
| Class C | 14,265 | | Total | $360,208 |
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 $75,415 under the expense offset arrangements.
Each Independent Trustee of the fund receives an annual Trustee fee, of which $755, 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.
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| Tax Exempt Income Fund 47 |
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% | * | $945,013 |
| Class B | 1.00% | 0.85% | 26,910 |
| Class C | 1.00% | 1.00% | 197,009 |
| Class M | 1.00% | 0.50% | 17,468 |
| Total | | | $1,186,400 |
* Equals the weighted average of (i) 0.20% of the net assets of the fund attributable to class A shares purchased and paid for prior to April 1, 2005 and (ii) 0.25% of all other net assets of the fund attributable to class A shares.
For the reporting period, Putnam Retail Management Limited Partnership, acting as underwriter, received net commissions of $15,521 and $148 from the sale of class A and class M shares, respectively, and received $706 and $106 in contingent deferred sales charges from redemptions of class B and class C shares, respectively.
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) | $204,744,139 | $246,346,935 |
| U.S. government securities (Long-term) | — | — |
| Total | $204,744,139 | $246,346,935 |
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.
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| 48 Tax Exempt Income Fund |
Note 4: Capital shares
At the close of the reporting period, there were an unlimited number of shares of beneficial interest authorized. Transactions in capital shares were as follows:
| | | | |
| | SIX MONTHS ENDED 3/31/18 | YEAR ENDED 9/30/17 |
| Class A | Shares | Amount | Shares | Amount |
| Shares sold | 2,458,293 | $21,204,523 | 5,660,478 | $45,405,246 |
| Shares issued in connection with | | | | |
| reinvestment of distributions | 1,428,853 | 12,251,828 | 2,941,442 | 25,169,448 |
| Shares issued in connection with the | | | | |
| merger of the Putnam Arizona Tax | | | | |
| Exempt Income Fund | — | — | 3,813,068 | 32,948,719 |
| Shares issued in connection with the | | | | |
| merger of the Putnam Michigan Tax | | | | |
| Exempt Income Fund | — | — | 6,475,964 | 55,958,802 |
| | 3,887,146 | 33,456,351 | 18,890,952 | 159,482,215 |
| Shares repurchased | (7,293,542) | (62,671,608) | (18,027,385) | (154,301,891) |
| Net increase (decrease) | (3,406,396) | $(29,215,257) | 863,567 | $5,180,324 |
| |
| | SIX MONTHS ENDED 3/31/18 | YEAR ENDED 9/30/17 |
| Class B | Shares | Amount | Shares | Amount |
| Shares sold | 2,642 | $22,599 | 27,953 | $4,158,402 |
| Shares issued in connection with | | | | |
| reinvestment of distributions | 8,589 | 73,715 | 18,970 | 162,336 |
| Shares issued in connection with the | | | | |
| merger of the Putnam Arizona Tax | | | | |
| Exempt Income Fund | — | — | 65,324 | 564,597 |
| Shares issued in connection with the | | | | |
| merger of the Putnam Michigan Tax | | | | |
| Exempt Income Fund | — | — | 86,559 | 748,126 |
| | 11,231 | 96,314 | 198,806 | 5,633,461 |
| Shares repurchased | (109,331) | (937,306) | (188,745) | (1,618,002) |
| Net increase (decrease) | (98,100) | $(840,992) | 10,061 | $4,015,459 |
| |
| | SIX MONTHS ENDED 3/31/18 | YEAR ENDED 9/30/17 |
| Class C | Shares | Amount | Shares | Amount |
| Shares sold | 277,271 | $2,392,825 | 556,528 | $4,463,873 |
| Shares issued in connection with | | | | |
| reinvestment of distributions | 48,901 | 420,340 | 99,505 | 853,191 |
| Shares issued in connection with the | | | | |
| merger of the Putnam Arizona Tax | | | | |
| Exempt Income Fund | — | — | 273,762 | 2,371,165 |
| Shares issued in connection with the | | | | |
| merger of the Putnam Michigan Tax | | | | |
| Exempt Income Fund | — | — | 436,196 | 3,778,072 |
| | 326,172 | 2,813,165 | 1,365,991 | 11,466,301 |
| Shares repurchased | (549,931) | (4,731,421) | (1,329,213) | (11,377,725) |
| Net increase (decrease) | (223,759) | $(1,918,256) | 36,778 | $88,576 |
|
| Tax Exempt Income Fund 49 |
| | | | |
| | SIX MONTHS ENDED 3/31/18 | YEAR ENDED 9/30/17 |
| Class M | Shares | Amount | Shares | Amount |
| Shares sold | 20,988 | $180,180 | 68,488 | $605,639 |
| Shares issued in connection with | | | | |
| reinvestment of distributions | 11,466 | 98,677 | 23,183 | 199,050 |
| Shares issued in connection with the | | | | |
| merger of the Putnam Arizona Tax | | | | |
| Exempt Income Fund | — | — | 102,445 | 888,239 |
| Shares issued in connection with the | | | | |
| merger of the Putnam Michigan Tax | | | | |
| Exempt Income Fund | — | — | 25,673 | 222,595 |
| | 32,454 | 278,857 | 219,789 | 1,915,523 |
| Shares repurchased | (96,544) | (833,648) | (132,275) | (1,127,792) |
| Net increase (decrease) | (64,090) | $(554,791) | 87,514 | $787,731 |
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| | SIX MONTHS ENDED 3/31/18 | YEAR ENDED 9/30/17 |
| Class Y | Shares | Amount | Shares | Amount |
| Shares sold | 1,225,401 | $10,568,220 | 2,540,070 | $21,240,785 |
| Shares issued in connection with | | | | |
| reinvestment of distributions | 108,161 | 929,455 | 177,088 | 1,519,767 |
| Shares issued in connection with the | | | | |
| merger of the Putnam Arizona Tax | | | | |
| Exempt Income Fund | — | — | 357,256 | 3,094,480 |
| Shares issued in connection with the | | | | |
| merger of the Putnam Michigan Tax | | | | |
| Exempt Income Fund | — | — | 1,146,861 | 9,933,877 |
| | 1,333,562 | 11,497,675 | 4,221,275 | 35,788,909 |
| Shares repurchased | (995,580) | (8,562,009) | (2,566,556) | (22,015,908) |
| Net increase (decrease) | 337,982 | $2,935,666 | 1,654,719 | $13,773,001 |
Note 5: 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 6: Acquisition of Putnam Arizona Tax Exempt Income Fund and Putnam Michigan Tax Exempt Income Fund
The purpose of the transaction was to combine three Putnam funds with substantially similar investment objectives and investment strategies into a single Putnam fund with a larger asset base and therefore potentially lower expenses for fund shareholders.
On July 24, 2017, the fund issued 3,813,068, 65,324, 273,762, 102,445 and 357,256 class A, class B, class C, Class M and class Y shares, respectively, for 3,615,613, 62,038, 259,930, 97,264 and 339,108 class A, class B, class C, class M and class Y shares of the Putnam Arizona Tax Exempt Income Fund to acquire that fund’s net assets in a tax-free exchange approved by the shareholders. The investment portfolio of Putnam Arizona Tax Exempt Income Fund, with a fair value of $39,698,551 and an identified cost of $37,245,661 at July 21, 2017, was the principal asset acquired by the fund. The net assets of the fund and Putnam Arizona Tax Exempt Income Fund on July 21, 2017, were $913,284,406 and $39,867,200, respectively. On July 21, 2017, Putnam Arizona Tax Exempt Income Fund had undistributed net investment income of $20, accumulated net realized loss of $725,853 and unrealized appreciation of $2,452,890.
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| 50 Tax Exempt Income Fund |
Also on July 24, 2017, the fund issued 6,475,964, 86,559, 436,196, 25,673 and 1,146,861 class A, class B, class C, Class M and class Y shares, respectively, for 6,127,537, 81,986, 413,429, 24,347 and 1,085,725 class A, class B, class C, class M and class Y shares of the Putnam Michigan Tax Exempt Income Fund to acquire that fund’s net assets in a tax-free exchange approved by the shareholders. The investment portfolio of Putnam Michigan Tax Exempt Income Fund, with a fair value of $69,896,048 and an identified cost of $66,941,311 at July 21, 2017, was the principal asset acquired by the fund. The net assets of the fund and Putnam Michigan Tax Exempt Income Fund on July 21, 2017, were $913,284,406 and $70,641,472, respectively. On July 21, 2017, Putnam Michigan Tax Exempt Income Fund had distributions in excess of net investment income of $523, accumulated net realized loss of $948,936 and unrealized appreciation of $2,954,738.
The aggregate net assets of the fund immediately following the acquisition were $1,023,793,078.
Information presented in the Statement of operations and changes in net assets reflect only the operations of Putnam Tax Exempt Income Fund.
Assuming the acquisition had been completed on October 1, 2016, the fund’s pro forma results of operations for the reporting period are as follows (unaudited):
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| Net investment Income | $34,943,517 |
| Net gain(loss) on investments | $(29,097,901) |
| Net Increase (decrease) in net assets resulting from operations | $5,845,616 |
Because the combined investment portfolios have been managed as a single portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of Putnam Arizona Tax Exempt Income Fund and Putnam Michigan Tax Exempt Income Fund that have been included in the fund’s Statement of operations for the current fiscal period.
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| Tax Exempt Income Fund 51 |
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 Ask a helpful Putnam representative or your financial advisor for details about any of these or other services, or see your prospectus.
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| 52 Tax Exempt Income Fund |
Fund information
Founded over 80 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 over 100 funds across income, value, blend, growth, asset allocation, absolute return, and global sector categories.
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| Investment Manager | Trustees | Michael J. Higgins |
| Putnam Investment | Jameson A. Baxter, Chair | Vice President, Treasurer, |
| Management, LLC | Kenneth R. Leibler, Vice Chair | and Clerk |
| One Post Office Square | Liaquat Ahamed | |
| Boston, MA 02109 | Ravi Akhoury | Janet C. Smith |
| | Barbara M. Baumann | Vice President, |
| Investment Sub-Advisor | Katinka Domotorffy | Principal Financial Officer, |
| Putnam Investments Limited | Catharine Bond Hill | Principal Accounting Officer, |
| 60 St James’s Street | Paul L. Joskow | and Assistant Treasurer |
| London, England SW1A 1ER | Robert E. Patterson | |
| George Putnam, III | Susan G. Malloy |
| Marketing Services | Robert L. Reynolds | Vice President and |
| Putnam Retail Management | Manoj P. Singh | Assistant Treasurer |
| One Post Office Square | | |
| Boston, MA 02109 | Officers | Mark C. Trenchard |
| Robert L. Reynolds | Vice President and |
| Custodian | President | BSA Compliance Officer |
| State Street Bank | | |
| and Trust Company | Jonathan S. Horwitz | Nancy E. Florek |
| Executive Vice President, | Vice President, Director of |
| Legal Counsel | Principal Executive Officer, | Proxy Voting and Corporate |
| Ropes & Gray LLP | and Compliance Liaison | Governance, Assistant Clerk, |
| | | and Assistant Treasurer |
| | Robert T. Burns | |
| | Vice President and | Denere P. Poulack |
| | Chief Legal Officer | Assistant Vice President, Assistant |
| | | Clerk, and Assistant Treasurer |
| | James F. Clark | |
| | Vice President and | |
| | Chief Compliance Officer | |
This report is for the information of shareholders of Putnam Tax Exempt 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.
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Item 3. Audit Committee Financial Expert: |
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Item 4. Principal Accountant Fees and Services: |
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Item 5. Audit Committee of Listed Registrants |
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Item 6. Schedule of Investments: |
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| The registrant's schedule of investments in unaffiliated issuers is included in the report to shareholders in Item 1 above. |
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| Item 7. Disclosure of Proxy Voting Policies and Procedures For Closed-End Management Investment Companies: |
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Item 8. Portfolio Managers of Closed-End Investment Companies |
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Item 9. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers: |
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Item 10. Submission of Matters to a Vote of Security Holders: |
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Item 11. Controls and Procedures: |
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| (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. |
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| (b) Changes in internal control over financial reporting: Not applicable |
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| (a)(2) Separate certifications for the principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are filed herewith. |
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| (b) The certifications required by Rule 30a-2(b) under the Investment Company Act of 1940, as amended, are filed herewith. |
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| 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. |
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| Putnam Tax Exempt Income Fund |
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| By (Signature and Title): |
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| /s/ Janet C. Smith
Janet C. Smith
Principal Accounting Officer
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| 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. |
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| By (Signature and Title): |
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| /s/ Jonathan S. Horwitz
Jonathan S. Horwitz
Principal Executive Officer
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| By (Signature and Title): |
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| /s/ Janet C. Smith
Janet C. Smith
Principal Financial Officer
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