Putnam
RetirementReady[REGISTRATION MARK]
Funds
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:
SEMIANNUAL REPORT ON PERFORMANCE AND OUTLOOK
1-31-05
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From the Trustees
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John A. Hill and
George Putnam, III
Dear Fellow Shareholder:
It is a pleasure to present you with the first shareholder report for
Putnam's newest mutual fund concept, the Putnam RetirementReady
[REGISTRATION MARK] Funds. Designed to offer you a one-step approach to
investment diversification, each target-year fund encompasses stock,
bond, and capital preservation investments and is managed using a
gradually changing asset allocation. Over time, as the target year draws
closer, each portfolio will be invested more conservatively so that its
level of risk is reduced appropriately for its shortened investment time
horizon. Another fund, the RetirementReady Maturity Fund, offers a fixed
allocation focusing on bonds and capital preservation investments.
Putnam is committed to helping investors and their advisors reach
informed investment decisions. Over the past year, we have taken steps
to enhance the information we provide to shareholders. Many of these
enhancements appear in this report, including a section on ongoing fund
expenses, manager compensation information that pertains to the funds,
and a section on the funds' Portfolio Leader and Portfolio Members that
includes information about these individuals' other fund management
responsibilities at Putnam. We also provide information on fund
ownership. In addition, starting on page 14, we provide information
about the approval by the Trustees of your fund's management contract
with Putnam. You can expect to see additional enhancements in the funds'
annual report, which will cover the period from February 1 to July 31,
2005.
In the following pages, your fund's management team discusses
performance, strategy, and its outlook for the remainder of fiscal 2005.
As always, we thank you for your support of the Putnam funds.
Respectfully yours,
/S/ JOHN A. HILL /S/ GEORGE PUTNAM, III
John A. Hill George Putnam, III
Chairman of the Trustees President of the Funds
March 16, 2005
Introduction
As discussed in the prospectus you received before becoming a
shareholder, each target-dated RetirementReady [REGISTRATION MARK] Fund
seeks capital appreciation and current income consistent with a
decreasing emphasis on capital appreciation and an increasing emphasis
on current income as the fund approaches its target date. The Maturity
Fund seeks as high a rate of current income as Putnam Management
believes is consistent with preservation of capital.
Each of the RetirementReady Funds invests in a strategic combination of
Putnam mutual funds whose underlying asset classes and investment styles
provide you with exposure to growth- and value- style stocks, large and
small companies, and investment-grade and high-yield bonds. For each
fund except the Maturity Fund, allocations to the underlying Putnam
mutual funds are adjusted periodically, in order to reduce portfolio
volatility as the fund approaches its target, or maturity, date. While
diversification can help protect your returns from excessive volatility,
it cannot protect against market losses. However, by choosing a
RetirementReady Fund based on the year you plan to start withdrawing
assets (typically in retirement), you may pursue maximum returns while
seeking to maintain a level of risk appropriate to your time horizon.
This report covers the first half of the funds' 2005 fiscal year, which
is an abbreviated period that extends from their inception on November
1, 2004, through January 31, 2005. Fund performance is not included in
this initial report because the funds do not yet have a full quarter of
results. The report begins with an overview of global equity and
fixed-income market performance. This is followed by a listing of the
objectives and strategies of the Putnam mutual funds in which the
RetirementReady Funds invest. The "Allocation by Fund" chart on page 5
identifies the percent of assets that each RetirementReady Fund had
invested in the underlying Putnam funds, as of the last day of the
period. This is followed by your management team's views on anticipated
developments that could affect the funds over the next six months and
their plans for responding to them. Information on your fund's
management team on page 7. On page 8 we present information on the
funds' expenses in a way that will enable you to compare your fund's
expense ratio with the expenses of other funds. The Investment Glossary
on page 12 defines key terms used throughout the report.
We hope you will find the information in this report useful.
Market overview
The six-month period ended January 31, 2005, was a time of dramatic
change for both stock and bond markets. Although the RetirementReady
Funds began operations toward the end of this period, on November 1,
2004, we believe it is valuable to provide you with a perspective for
the full six months in order to give you a better understanding of
events that affected the different asset classes in which these funds
invest. For the majority of 2004, equities and fixed-income markets
experienced a period of "benign equilibrium" -- flat to slightly
positive returns. However, after the November 2 elections, both stocks
and bonds rallied sharply. On the equity side, stocks across industries,
investment styles, and market capitalizations posted positive returns;
the same was also true for bonds across the credit-quality and maturity
spectrums. Since the New Year, stock and bond markets for the most part
have reversed direction and given back a portion of those gains.
A number of factors affected the market patterns that emerged in late
2004. The positive impact of improving job data, continued high
corporate earnings, and low inflation that built up throughout the year
seemed to create a pent-up demand for both stocks and bonds. But that
demand was stymied by concerns about rising interest rates, the future
of the economy, the war in Iraq, and uncertainty surrounding the
presidential election. Once some of this negative sentiment and
uncertainty lifted, the markets responded.
Market overview: Equities
The most significant factor affecting the U.S. stock market during the
period was the presidential election. As a general rule, markets tend to
react negatively to change, making it no surprise that after President
Bush's reelection, equities across the board rallied. The lack of
terrorist activity at several high-profile events -- including the
Athens Olympics and the Democratic and Republican National Conventions
in Boston and New York City, respectively -- soothed investors, but did
not compel them to act. These factors in essence created a latent demand
in the stock market that sent equities, particularly the more sensitive
smaller-cap and growth-style stocks, into a strong rally following the
November 2 election. Prior to that point, performance differences
between investment styles and stocks of different market capitalizations
had been relatively minor.
On the international stage, two main factors drove stock market
performance -- a global "rebalancing" and the devaluation of the U.S.
dollar. In local currency terms, the S&P 500 Index, a broad measure of
domestic common stock performance, has consistently outperformed
international markets since 1997. This trend, however, began to reverse
a few years ago as China began the process of industrialization and
Europe underwent a number of economic transformations. The result in
2004 was that international stocks outperformed their U.S. counterparts
on an absolute basis. The rapid decline of the U.S. dollar, beginning in
October and continuing throughout the fourth quarter, further enhanced
returns for international stocks. The burgeoning U.S. budget deficit,
among other factors, has led to one of the weakest dollars in recent
years, and foreign securities further benefited from that trend when
their returns were translated back into local currency figures. While
the dollar recovered somewhat in January, the trend of international
stocks outperforming their domestic counterparts has continued, with
most international indexes outperforming the S&P 500 by several
percentage points on a year-to-date basis.
Market overview: Fixed Income
In 2004, all eyes in the domestic bond market focused on the Federal
Reserve Board (the Fed) as investors braced for what many felt was an
inevitable rise in interest rates. By August, the Fed had firmly
demonstrated its commitment to raising rates gradually rather than
aggressively, as some had feared. Against this backdrop, the yield curve
(the difference in yields between bonds of various maturities) flattened
considerably, as the yields on shorter-term bonds climbed. High- yield
bonds continued to outperform in this environment, as they have for the
past few years, as investors were willing to take on added risk in
exchange for the higher interest payments these lower-quality securities
generally pay. Mortgage- and asset-backed securities also posted strong
returns, as many investors returned to the fixed-income market after the
Fed solidified its current pro-growth stance.
Like their equity counterparts, international fixed-income securities
also benefited from the weakening U.S. dollar. Consequently, investors
in non-U.S. markets, like those at home, generally sought out higher
yields wherever they could find them. The international high-yield
sector performed well for the year, as did emerging- market debt. In
addition, companies that were able to take advantage of rising oil
prices to improve their financial conditions saw their bond prices rise,
especially within the oil services and energy sectors.
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MARKET SECTOR PERFORMANCE 6 MONTHS ENDED 1/31/05
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Equities
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Russell 3000 Index (broad stock market) 9.32%
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S&P 500 Index (broad stock market) 8.16%
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MSCI EAFE Index (international stocks) 16.68%
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MSCI EMF Index (emerging-market stocks) 29.48%
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Bonds
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Lehman Aggregate Bond Index (broad bond market) 3.81%
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Lehman Credit Index (corporate bonds) 5.06%
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JP Morgan Developed High Yield Index (high-yield corporate
bonds) 7.47%
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These indexes provide an overview of performance in different market
sectors for the six months ended 1/31/05.
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Underlying Investments for the Putnam
RetirementReady Funds
Except for the Maturity Fund, each Putnam RetirementReady Fund invests,
to varying degrees, in a variety of Putnam mutual funds. This section
describes the goals and strategies of the underlying Putnam funds.
Putnam Voyager Fund
The fund seeks capital appreciation by investing primarily in growth
stocks of large-capitalization U.S. companies. Growth stocks are issued
by companies that Putnam believes are fast-growing and whose earnings
are likely to increase over time. Growth in earnings may lead to an
increase in the price of the stock. The fund invests mainly in midsized
and large companies, although it can invest in companies of any size.
The Putnam Fund for Growth and Income
The fund seeks capital growth and current income by investing primarily
in common stocks of large-capitalization U.S. companies, with a focus on
value stocks that offer the potential for capital growth, current
income, or both. Value stocks are those that Putnam believes are
currently undervalued by the market. We look for companies undergoing
positive change. If we are correct and other investors recognize the
value of the company, the price of the stock may rise. The fund invests
mainly in large companies.
Putnam Capital Opportunities Fund
The fund seeks long-term growth of capital by investing primarily in
common stocks of small-capitalization U.S. companies that Putnam
believes have favorable investment potential. For example, the fund may
purchase stocks of companies whose stock price is lower than the value
Putnam places on the company. The fund may also consider other factors
that Putnam believes will cause the stock price to rise. The fund
invests mainly in small and midsized companies.
Putnam International Equity Fund
The fund seeks capital appreciation by investing primarily in common
stocks of companies outside the United States that Putnam believes have
favorable investment potential. For example, the fund may purchase
stocks of companies whose stock price is lower than the value Putnam
places on the company. The fund may also consider other factors that
Putnam believes will cause the stock price to rise. The fund invests
mainly in midsized and large companies, although it can invest in
companies of any size. Although we emphasize investments in developed
countries, the fund may also invest in companies located in emerging
markets.
Putnam Income Fund
The fund seeks high current income consistent with what Putnam believes
to be prudent risk. The fund invests mainly in bonds that are
obligations of companies and governments worldwide denominated in U.S.
dollars, are either investment-grade or below investment-grade (junk
bonds), and have intermediate- to long-term maturities (three years or
longer).
Putnam Money Market Fund
The fund seeks as high a rate of current income as Putnam Management
believes is consistent with preservation of capital and maintenance of
liquidity. The fund invests mainly in instruments that are high quality
and have short-term maturity.
Money market funds are not insured or guaranteed by the Federal Deposit
Insurance Corporation (FDIC) or any other governmental agency. Although
the fund seeks to maintain a constant share price of $1.00, it is
possible to lose money by investing in the fund.
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Allocations by Fund as of 1/31/05
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Putnam Putnam Putnam Putnam
Fund for Capital International Putnam Putnam Money
Growth and Opportunities Equity Voyager Income Market
Income Fund Fund Fund Fund Fund
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RetirementReady Fund
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2045 Fund 24.9% 15.1% 30.7% 24.5% 3.9% 0.9%
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2040 Fund 25.0% 15.2% 29.8% 24.7% 4.9% 0.4%
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2035 Fund 24.0% 14.2% 27.8% 23.6% 7.8% 2.6%
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2030 Fund 23.0% 13.2% 25.7% 22.7% 11.7% 3.7%
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2025 Fund 22.1% 12.2% 23.7% 21.7% 14.6% 5.7%
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2020 Fund 21.1% 11.2% 17.6% 20.8% 20.6% 8.7%
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2015 Fund 18.3% 10.3% 11.5% 17.9% 28.5% 13.5%
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2010 Fund 13.3% 7.2% 4.2% 13.0% 38.8% 23.5%
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Maturity Fund 10.3% 5.2% -- 10.0% 45.1% 29.4%
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Percentages based on market value. Portfolio composition will vary over
time. Due to rounding, percentages may not equal 100%.
The outlook for your fund
The following commentary reflects anticipated developments that could
affect your fund over the next six months, as well as your management
team's plans for responding to them.
Management believes that 2005 will bear much more of a resemblance to
the first three quarters of 2004 than the last. We feel it is highly
unlikely that the strategy of simply "being in the market," which has
worked for the last two years, will continue to pay off. While we
believe stocks will record a positive return for the year, gains will
not necessarily come from all market-caps and investment styles. Rather,
we foresee a "rotation to quality" as stocks with solid earnings and
healthy balance sheets begin to outperform their higher-volatility
counterparts. On a geographical basis, we believe the dollar will remain
weak, if not weaken further, while international markets remain strong
on an absolute level. International exposure will likely be a key
component of generating solid returns. Domestically, the tightening
policy the Fed has put into effect will begin to create a more
challenging environment for both stocks and bonds, we believe. We find
the high-yield sector less attractive now than in recent months,
although yield will likely remain an important component of any
fixed-income investment strategy. In this type of environment, we feel
broad-based diversification and active management will be vital to
performance, and that your fund's ability to deliver both through its
investment in a diverse group of actively-managed underlying funds will
position it well for the coming months.
The views expressed in this report are exclusively those of Putnam
Management. They are not meant as investment advice.
The underlying Putnam funds can invest in international investments,
which involve risks such as currency fluctuations, economic instability,
and political developments. The underlying Putnam funds can invest some
or all of their assets in small and/or midsize companies and such
investments increase the risk of greater price fluctuations. The
underlying Putnam funds can also have a significant portion of their
holdings in bonds. Mutual funds that invest in bonds are subject to
certain risks, including interest-rate risk, credit risk, and inflation
risk. As interest rates rise, the prices of bonds fall. Long-term bonds
have more exposure to interest-rate risk than short-term bonds.
Lower-rated bonds may offer higher yields in return for more risk.
Unlike bonds, bond funds have ongoing fees and expenses. These risks
apply to any underlying Putnam fund with a significant portion of its
assets invested in bonds. A 2% short-term trading fee may be imposed on
shares exchanged or sold within 5 days of purchase.
Your fund's management
Your fund is managed by the members of the Putnam Global Asset
Allocation Team. Jeffrey Knight is the Portfolio Leader, and Robert Kea,
Bruce MacDonald, and Robert Schoen are Portfolio Members. The Portfolio
Leader and Portfolio Members coordinate the management of the funds.
Fund manager compensation
The total 2004 fund manager compensation that is attributable to the
funds is approximately $230,000. This amount includes a portion of 2004
compensation paid by Putnam Management to the fund managers listed in
this section for their portfolio management responsibilities, calculated
based on the fund assets they manage as a percentage of the total assets
they manage. The compensation amount also includes a portion of the 2004
compensation paid to the Chief Investment Officer of the team for his
oversight responsibilities, calculated based on the fund assets he
oversees taken as a percentage of the total assets he oversees. These
percentages are determined as of the funds' fiscal period-end. For
personnel who joined Putnam Management during or after 2004, the
calculation reflects annualized 2004 compensation or an estimate of 2005
compensation, as applicable.
Other Putnam funds managed by the Portfolio Leader and Portfolio Members
Jeffrey Knight is also a Portfolio Leader of the Putnam Asset Allocation
Funds: Growth, Balanced and Conservative Portfolios and a Portfolio
Member of The George Putnam Fund of Boston.
Robert Kea, Bruce MacDonald, and Robert Schoen are also Portfolio
Members of the Putnam Asset Allocation Funds: Growth, Balanced and
Conservative Portfolios.
Jeffrey Knight, Robert Kea, Bruce MacDonald, and Robert Schoen may also
manage other accounts and variable trust funds advised by Putnam
Management or an affiliate.
Changes in your fund's Portfolio Leader and Portfolio Members
Your fund's Portfolio Leader and Portfolio Members did not change during
the period ended January 31, 2005.
Fund ownership
Your fund's Portfolio Leader and Portfolio Members, as well as the
members of Putnam's Executive Board, each invest in one or more of the
seven mutual funds that underlie the Putnam RetirementReady Funds.
Understanding 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
information below, 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. Expense information also does not
include the fees and expenses of the underlying Putnam mutual funds in
which the RetirementReady funds invest. For more information, see your
fund's prospectus or talk to your financial advisor.
Review your fund's expenses
The table that begins below shows the expenses you would have paid on a
$1,000 investment in each of the RetirementReady Funds from November 1,
2004, the funds' inception date, to the funds' first fiscal period-end,
January 31, 2005. It also shows how much a $1,000 investment would be
worth at the close of the period, assuming actual returns and expenses.
You may use the information in this table to estimate the expenses that
you paid over the period. Simply divide your account value by $1,000,
and then multiply the result by the number in the first line ("Expenses
paid per $1,000") for the class of shares you own.
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EXPENSES AND VALUE OF A $1,000 INVESTMENT
assuming actual returns from the funds' inception, 11/1/04, to 1/31/05
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RetirementReady Fund Class A Class B Class C Class M Class R
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2045 Fund
Fund Expenses paid per $1,000* $0.91 $2.86 $2.86 $2.21 $1.56
Ending value (after expenses) $1,062.50 $1,060.50 $1,060.50 $1,061.20 $1,061.90
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2040 Fund
Fund Expenses paid per $1,000* $0.91 $2.85 $2.85 $2.21 $1.56
Ending value (after expenses) $1,061.30 $1,059.40 $1,059.40 $1,059.90 $1,060.70
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2035 Fund
Fund Expenses paid per $1,000* $0.91 $2.85 $2.85 $2.20 $1.56
Ending value (after expenses) $1,058.20 $1,056.40 $1,056.30 $1,057.00 $1,057.50
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* 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 net assets for the period from 11/1/04 to
1/31/05. The expense ratio may differ for each share class (see the next
table in this section). 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. Expenses do not
reflect expenses of the underlying funds in which the funds invest.
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EXPENSES AND VALUE OF A $1,000 INVESTMENT
assuming actual returns from the funds' inception,
11/1/04, to 1/31/05
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RetirementReady Fund Class A Class B Class C Class M Class R
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2030 Fund
Fund Expenses paid per $1,000* $0.91 $2.85 $2.85 $2.20 $1.55
Ending value (after expenses) $1,055.30 $1,053.10 $1,053.10 $1,053.80 $1,054.60
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2025 Fund
Fund Expenses paid per $1,000* $0.91 $2.84 $2.84 $2.20 $1.55
Ending value (after expenses) $1,051.90 $1,049.90 $1,050.00 $1,050.60 $1,051.20
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2020 Fund
Fund Expenses paid per $1,000* $0.90 $2.83 $2.83 $2.19 $1.55
Ending value (after expenses) $1,045.20 $1,043.20 $1,043.20 $1,043.90 $1,044.50
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2015 Fund
Fund Expenses paid per $1,000* $0.90 $2.82 $2.82 $2.18 $1.54
Ending value (after expenses) $1,036.80 $1,035.10 $1,035.10 $1,035.80 $1,036.50
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2010 Fund Fund
Fund Expenses paid per $1,000* $0.89 $2.80 $2.80 $2.17 $1.53
Ending value (after expenses) $1,024.70 $1,022.90 $1,022.80 $1,023.40 $1,024.10
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Maturity Fund
Expenses paid per $1,000* $0.89 $2.79 $2.79 $2.16 $1.52
Ending value (after expenses) $1,017.30 $1,015.30 $1,015.30 $1,016.00 $1,016.60
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Compare your fund's expenses with those of other funds
The Securities and Exchange Commission (SEC) has established guidelines
to help investors assess fund expenses. Per these guidelines, the table
below 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.
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EXPENSES AND VALUE OF A $1,000 INVESTMENT+
assuming a hypothetical 5% annualized return from the funds' inception, 11/1/04, to 1/31/05
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RetirementReady Fund Class A Class B Class C Class M Class R
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2045 Fund
Fund Expenses paid per $1,000* $0.89 $2.79 $2.79 $2.15 $1.52
Ending value (after expenses) $1,011.72 $1,009.83 $1,009.83 $1,010.46 $1,011.09
Annualized expense ratio 0.35% 1.10% 1.10% 0.85% 0.60%
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2040 Fund
Fund Expenses paid per $1,000* $0.89 $2.79 $2.79 $2.15 $1.52
Ending value (after expenses) $1,011.72 $1,009.83 $1,009.83 $1,010.46 $1,011.09
Annualized expense ratio 0.35% 1.10% 1.10% 0.85% 0.60%
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2035 Fund
Fund Expenses paid per $1,000* $0.89 $2.79 $2.79 $2.15 $1.52
Ending value (after expenses) $1,011.72 $1,009.83 $1,009.83 $1,010.46 $1,011.09
Annualized expense ratio 0.35% 1.10% 1.10% 0.85% 0.60%
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2030 Fund
Fund Expenses paid per $1,000* $0.89 $2.79 $2.79 $2.15 $1.52
Ending value (after expenses) $1,011.72 $1,009.83 $1,009.83 $1,010.46 $1,011.09
Annualized expense ratio 0.35% 1.10% 1.10% 0.85% 0.60%
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2025 Fund
Fund Expenses paid per $1,000* $0.89 $2.79 $2.79 $2.15 $1.52
Ending value (after expenses) $1,011.72 $1,009.83 $1,009.83 $1,010.46 $1,011.09
Annualized expense ratio 0.35% 1.10% 1.10% 0.85% 0.60%
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* 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 net assets for the period from 11/1/04 to
1/31/05. 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.
Expenses do not reflect expenses of the underlying Putnam funds in which
the funds invest.
+ During the period from 11/1/04 to 1/31/05, your fund limited its expenses;
had it not done so, expenses would have been higher.
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EXPENSES AND VALUE OF A $1,000 INVESTMENT+
assuming a hypothetical 5% annualized return from the funds' inception, 11/1/04 to 1/31/05
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RetirementReady Fund Class A Class B Class C Class M Class R
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2020 Fund
Fund Expenses paid per $1,000* $0.89 $2.79 $2.79 $2.15 $1.52
Ending value (after expenses) $1,011.72 $1,009.83 $1,009.83 $1,010.46 $1,011.09
Annualized expense ratio 0.35% 1.10% 1.10% 0.85% 0.60%
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2015 Fund
Fund Expenses paid per $1,000* $0.89 $2.79 $2.79 $2.15 $1.52
Ending value (after expenses) $1,011.72 $1,009.83 $1,009.83 $1,010.46 $1,011.09
Annualized expense ratio 0.35% 1.10% 1.10% 0.85% 0.60%
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2010 Fund
Fund Expenses paid per $1,000* $0.89 $2.79 $2.79 $2.15 $1.52
Ending value (after expenses) $1,011.72 $1,009.83 $1,009.83 $1,010.46 $1,011.09
Annualized expense ratio 0.35% 1.10% 1.10% 0.85% 0.60%
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Maturity Fund
Expenses paid per $1,000* $0.89 $2.79 $2.79 $2.15 $1.52
Ending value (after expenses) $1,011.72 $1,009.83 $1,010.15 $1,010.46 $1,011.09
Annualized expense ratio 0.35% 1.10% 1.10% 0.85% 0.60%
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Terms and definitions
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.
Net asset value (NAV) is the price, or value, of one share of a mutual
fund, without a sales charge. NAVs fluctuate with market conditions. NAV
is calculated by dividing the net assets of each class of shares by the
number of outstanding shares in the class.
Public offering price (POP) is the price of a mutual fund share plus the
maximum sales charge levied at the time of purchase. POP performance
figures shown here assume the 5.25% maximum sales charge for class A
shares and 3.50% for class M shares.
Contingent deferred sales charge (CDSC) is 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 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.
Class A shares are generally subject to an initial sales charge and no
sales charge on redemption (except on certain redemptions of shares
bought without an initial sales charge).
Class B shares may be subject to a sales charge upon redemption.
Class C shares are not subject to an initial sales charge and are
subject to a contingent deferred sales charge 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 sales charge on redemption (except on certain
redemptions of shares bought without an initial sales charge).
Class R shares are not subject to an initial sales charge or CDSC and
are available only to certain defined contribution plans.
Comparative indexes
JP Morgan Developed High Yield Index is an unmanaged index of high-yield
fixed-income securities issued in developed countries.
Lehman Aggregate Bond Index is an unmanaged index of U.S.
investment-grade fixed-income securities.
Lehman Credit Index is an unmanaged index of investment-grade corporate
bonds.
Morgan Stanley Capital International (MSCI) EAFE Index is an unmanaged
index of equity securities from developed countries in Western Europe,
the Far East, and Australasia.
Morgan Stanley Capital International (MSCI) EMF Index is an unmanaged
index of equity securities from emerging markets available to non-U.S.
investors.
Russell 3000 Index is an unmanaged index of the 3,000 largest U.S.
companies.
S&P 500 Index is an unmanaged index of common stock performance.
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.
Trustee approval of management contract
The Board of Trustees of the Putnam funds oversees the management of
each fund and, as required by law, approves each fund's management
contract with Putnam Management. In approving your fund's management
contract, the Board of Trustees, with the assistance of its Contract
Committee consisting solely of Independent Trustees, requests and
evaluates all information it deems reasonably necessary under the
circumstances. The Contract Committee reviewed the information provided
by Putnam Management and other information developed with the assistance
of the Board's independent counsel and independent staff. The Contract
Committee reviewed and discussed key aspects of this information with
all of the Independent Trustees. Upon completion of this review, the
Contract Committee recommended and the Independent Trustees approved
your fund's management contract, effective June 11, 2004.
The Trustees considered numerous factors they believe relevant in
approving your fund's management contract. The Trustees considered the
quality of the investment management services expected to be provided by
Putnam Management, based in part on Putnam Management's experience and
investment performance managing other target retirement products over
the one-year and year-to-date periods ended March 31, 2004, relative to
certain competitors. The Trustees also considered the rationale behind
the selection of the underlying Putnam funds in which your fund invests,
including the performance record of these funds.
The Trustees also considered the quality and incremental value of the
asset allocation and other services to be provided by Putnam Management
to your fund, including Putnam's shareholder servicing arrangements. The
Trustees considered the experience and skills of the individuals
comprising Putnam Management's Global Asset Allocation Team, including
the individuals listed under "Your fund's management" in this report,
noting the resources that Putnam Management has made available to such
personnel and, in general, the ability of Putnam Management to attract
and retain high-quality personnel.
The Trustees reviewed the proposed management fee for your fund and the
proposed voluntary expense limitation to be implemented through your
fund's first fiscal year. The Trustees also considered the management
fees of the underlying funds in which your fund would invest, and other
direct and indirect benefits expected to be received by Putnam
Management and its affiliates as a result of their relationships with
your fund. With respect to their evaluation of the proposed management
fees, the Trustees reviewed an analysis of the fees of other target
retirement mutual funds prepared by Putnam Management, taking into
consideration the fees of the underlying funds as well as the fund-of
funds.
Based on this evaluation, the Trustees believe that the proposed fee
schedule for your fund represents reasonable compensation in light of
the nature and quality of the services to be provided to your fund and
the fees paid by competitive funds. This conclusion was based on a
comprehensive consideration of all information provided to the Trustees
and was not the result of any single factor.
Other information for shareholders
A note about duplicate mailings
In response to investors' requests, the SEC has modified mailing
regulations for proxy statements, semiannual and annual reports, and
prospectuses. Putnam is now able to send a single copy of these
materials to customers who share the same address. This change will
automatically apply to all shareholders except those who notify us. If
you would prefer to receive your own copy, please call Putnam at
1-800-225-1581.
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 are available on the Putnam Individual Investor Web site,
www.putnaminvestments.com/individual, and on the SEC's Web site,
www.sec.gov. If you have questions about finding forms on the SEC's Web
site, 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
For periods ending on or after July 9, 2004, 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 Forms N-Q on the SEC's Web site at www.sec.gov. In
addition, the fund's Forms 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 Web site or the operation
of the public reference room.
This page intentionally left blank.
The funds' portfolios
January 31, 2005 (Unaudited)
2045 2040 2035
Fund Fund Fund
EQUITY FUNDS* 94.4% 94.2% 89.4%
- ------------------------------------------------------------------------------------------------------------------------------
Shares Value Shares Value Shares Value
...............................................................................................................................
The Putnam Fund for Growth and Income 136,058 $2,591,894 215,903 $4,112,951 446,858 $8,512,647
...............................................................................................................................
Putnam Capital Opportunities Fund 133,811 1,576,295 212,123 2,498,794 427,192 5,032,320
...............................................................................................................................
Putnam International Equity Fund 137,099 3,198,529 210,211 4,904,209 422,599 9,859,253
...............................................................................................................................
Putnam Voyager Fund 154,482 2,553,584 245,220 4,053,502 507,412 8,387,518
- ------------------------------------------------------------------------------------------------------------------------------
Total Equity Funds
(cost $9,682,620, $15,182,186, $30,922,001) $9,920,302 $15,569,456 $31,791,738
- ------------------------------------------------------------------------------------------------------------------------------
FIXED INCOME FUNDS* 4.8% 5.3% 10.4%
- ------------------------------------------------------------------------------------------------------------------------------
Shares Value Shares Value Shares Value
...............................................................................................................................
Putnam Income Fund 58,673 406,012 116,396 805,465 400,462 2,771,193
...............................................................................................................................
Putnam Money Market Fund 98,687 98,687 70,184 70,184 936,241 936,241
- ------------------------------------------------------------------------------------------------------------------------------
Total Fixed Income Funds
(cost $503,240, $872,848, $3,698,134) $504,699 $875,649 $3,707,434
- ------------------------------------------------------------------------------------------------------------------------------
Total Investments $10,425,001 $16,445,105 $35,499,172
- ------------------------------------------------------------------------------------------------------------------------------
Cost of Investments (Note 1) $10,185,860 $16,055,034 $34,620,135
- ------------------------------------------------------------------------------------------------------------------------------
* Percentages indicated are based on net assets of $10,509,210, $16,527,869 and $35,577,047, respectively.
The accompanying notes are an integral part of these financial statements.
2030 2025 2020
Fund Fund Fund
EQUITY FUNDS* 84.5% 79.6% 70.7%
- ------------------------------------------------------------------------------------------------------------------------------
Shares Value Shares Value Shares Value
...............................................................................................................................
The Putnam Fund for Growth and Income 647,831 $12,341,170 1,075,818 $20,494,340 1,141,457 $21,744,754
...............................................................................................................................
Putnam Capital Opportunities Fund 599,971 7,067,661 962,457 11,337,742 977,850 11,519,065
...............................................................................................................................
Putnam International Equity Fund 591,889 13,808,779 945,381 22,055,738 776,016 18,104,451
...............................................................................................................................
Putnam Voyager Fund 735,565 12,158,896 1,221,010 20,183,282 1,294,145 21,392,223
- ------------------------------------------------------------------------------------------------------------------------------
Total Equity Funds
(cost $44,133,958, $71,876,787, $70,786,848) $45,376,506 $74,071,102 $72,760,493
- ------------------------------------------------------------------------------------------------------------------------------
FIXED INCOME FUNDS* 15.4% 20.3% 29.3%
- ------------------------------------------------------------------------------------------------------------------------------
Shares Value Shares Value Shares Value
...............................................................................................................................
Putnam Income Fund 908,689 6,288,125 1,967,391 13,614,342 3,067,304 21,225,748
...............................................................................................................................
Putnam Money Market Fund 1,979,846 1,979,846 5,291,392 5,291,392 8,904,837 8,904,837
- ------------------------------------------------------------------------------------------------------------------------------
Total Fixed Income Funds
(cost $8,248,071, $18,863,216, $30,058,354) $8,267,971 $18,905,734 $30,130,585
- ------------------------------------------------------------------------------------------------------------------------------
Total Investments $53,644,477 $92,976,836 $102,891,078
- ------------------------------------------------------------------------------------------------------------------------------
Cost of Investments (Note 1) $52,382,029 $90,740,003 $100,845,202
- ------------------------------------------------------------------------------------------------------------------------------
* Percentages indicated are based on net assets of $53,717,959, $93,039,734 and $102,951,348, respectively.
The accompanying notes are an integral part of these financial statements.
2015 2010 Maturity
Fund Fund Fund
EQUITY FUNDS* 58.0% 37.7% 25.4%
- ------------------------------------------------------------------------------------------------------------------------------
Shares Value Shares Value Shares Value
...............................................................................................................................
The Putnam Fund for Growth and Income 1,145,965 $21,830,618 544,414 $10,371,093 235,329 $4,483,018
...............................................................................................................................
Putnam Capital Opportunities Fund 1,043,572 12,293,272 478,143 5,632,527 191,522 2,256,134
...............................................................................................................................
Putnam International Equity Fund 589,663 13,756,851 140,443 3,276,515 -- --
...............................................................................................................................
Putnam Voyager Fund 1,296,889 21,437,584 614,869 10,163,777 265,809 4,393,814
- ------------------------------------------------------------------------------------------------------------------------------
Total Equity Funds
(cost $66,957,302, $28,636,369, $10,890,613) $69,318,325 $29,443,912 $11,132,966
- ------------------------------------------------------------------------------------------------------------------------------
FIXED INCOME FUNDS* 42.0% 62.2% 74.3%
- ------------------------------------------------------------------------------------------------------------------------------
Shares Value Shares Value Shares Value
...............................................................................................................................
Putnam Income Fund 4,919,612 34,043,712 4,372,893 30,260,422 2,844,789 19,685,937
...............................................................................................................................
Putnam Money Market Fund 16,163,085 16,163,085 18,337,630 18,337,630 12,847,553 12,847,553
- ------------------------------------------------------------------------------------------------------------------------------
Total Fixed Income Funds
(cost $50,104,872, $48,490,330, $32,450,566) $50,206,797 $48,598,052 $32,533,490
- ------------------------------------------------------------------------------------------------------------------------------
Total Investments $119,525,122 $78,041,964 $43,666,456
- ------------------------------------------------------------------------------------------------------------------------------
Cost of Investments (Note 1) $117,062,174 $77,126,699 $43,341,179
- ------------------------------------------------------------------------------------------------------------------------------
* Percentages indicated are based on net assets of $119,584,772, $78,107,834 and $43,796,976, respectively.
The accompanying notes are an integral part of these financial statements.
Statement of assets and liabilities
January 31, 2005 (Unaudited)
2045 2040 2035
Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------
Assets
Investments in underlying Putnam Funds, at value (Note 1) $10,425,001 $16,445,105 $35,499,172
Dividends, interest and other receivables 146 86 1,387
Receivable for shares of the fund sold 591,186 1,364,727 2,265,167
Receivable for securities sold 19,799 34,364 24,591
Unamortized offering costs (Note 1) 65,068 65,068 65,068
Receivable from Manager (Note 2) 21,820 22,249 22,519
..................................................................................................................
Total assets 11,123,020 17,931,599 37,877,904
..................................................................................................................
Liabilities
Payable for shares of the fund redeemed 19,799 34,365 24,591
Payable for securities purchased 591,327 1,364,810 2,266,506
Payable for distribution fees (Note 2) 889 1,264 2,447
Other accrued expenses 1,795 3,291 7,313
..................................................................................................................
Total liabilities 613,810 1,403,730 2,300,857
..................................................................................................................
Net assets $10,509,210 $16,527,869 $35,577,047
..................................................................................................................
Represented by:
Paid-in-capital (Notes 1 and 4) $10,249,273 $16,117,766 $34,636,698
Undistributed net investment income (loss) (Note 1) (17,755) (19,133) (21,500)
Accumulated net realized gain (loss) on investments (Note 1) 38,551 39,165 82,812
Net unrealized appreciation of investments 239,141 390,071 879,037
..................................................................................................................
Total -- Representing net assets applicable to capital
outstanding $10,509,210 $16,527,869 $35,577,047
..................................................................................................................
Computation of net asset value and offering price Class A
Net Assets $4,957,934 $7,525,706 $14,141,167
Number of shares outstanding 74,208 112,528 214,879
Net asset value $66.81 $66.88 $65.81
Offering price per class A share (front-end sales charge of
5.25%) $70.51 $70.59 $69.46
Computation of net asset value Class B
Net Assets $1,912 $23,552 $13,781
Number of shares outstanding 29 361 215
Net asset value $65.25 $65.24 $64.01
Computation of net asset value Class C
Net Assets $7,853 $1,059 $1,056
Number of shares outstanding 120 16 16
Net asset value $65.25 $65.24 $64.06
Computation of net asset value Class M
Net Assets $6,074 $8,100 $11,488
Number of shares outstanding 93 124 179
Net asset value $65.27 $65.21 $64.05
Offering price per class M share (front-end sales charge of
3.50%) $67.64 $67.58 $66.37
Computation of net asset value Class R
Net Assets $1,062 $1,061 $1,058
Number of shares outstanding 16 16 17
Net asset value $65.29 $65.27 $64.08
Computation of net asset value Class Y
Net Assets $5,534,375 $8,968,391 $21,408,497
Number of shares outstanding 76,325 123,998 300,320
Net asset value $72.51 $72.33 $71.29
..................................................................................................................
Cost of investments (Note 1) $10,185,860 $16,055,034 $34,620,135
- -----------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
2030 2025 2020
Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------
Assets
Investments in underlying Putnam Funds, at value (Note 1) $53,644,477 $92,976,836 $102,891,078
Dividends, interest and other receivables 2,976 8,037 13,899
Receivable for shares of the fund sold 3,250,741 3,929,282 3,609,041
Receivable for securities sold 42,105 34,400 12,642
Unamortized offering costs (Note 1) 65,068 65,068 65,068
Receivable from Manager (Note 2) 23,695 24,539 16,939
..................................................................................................................
Total assets 57,029,062 97,038,162 106,608,667
..................................................................................................................
Liabilities
Payable for shares of the fund redeemed 42,105 34,400 12,642
Payable for securities purchased 3,253,617 3,937,044 3,622,473
Payable for distribution fees (Note 2) 3,404 6,284 6,991
Other accrued expenses 11,977 20,700 15,213
..................................................................................................................
Total liabilities 3,311,103 3,998,428 3,657,319
..................................................................................................................
Net assets $53,717,959 $93,039,734 $102,951,348
..................................................................................................................
Represented by:
Paid-in-capital (Notes 1 and 4) $52,363,557 $90,643,765 $100,743,276
Undistributed net investment income (loss) (Note 1) (15,552) (5,490) 14,394
Accumulated net realized gain (loss) on investments (Note 1) 107,506 164,626 147,802
Net unrealized appreciation of investments 1,262,448 2,236,833 2,045,876
..................................................................................................................
Total representing net assets applicable to capital
outstanding $53,717,959 $93,039,734 $102,951,348
..................................................................................................................
Computation of net asset value and offering price Class A
Net Assets $19,534,636 $33,808,340 $36,825,614
Number of shares outstanding 299,718 491,609 583,521
Net asset value $65.18 $68.77 $63.11
Offering price per class A share (front-end sales charge of
5.25%) $68.79 $72.58 $66.61
Computation of net asset value Class B
Net Assets $49,754 $54,500 $32,447
Number of shares outstanding 779 816 521
Net asset value $63.90 $66.81 $62.27
Computation of net asset value Class C
Net Assets $6,546 $21,875 $29,483
Number of shares outstanding 102 327 473
Net asset value $63.90 $66.88 $62.30
Computation of net asset value Class M
Net Assets $28,468 $90,383 $152,947
Number of shares outstanding 446 1,352 2,455
Net asset value $63.89 $66.84 $62.30
Offering price per class M share (front-end sales charge of
3.50%) $66.21 $69.26 $64.56
Computation of net asset value Class R
Net Assets $1,055 $1,051 $1,045
Number of shares outstanding 16 16 17
Net asset value $63.94 $66.91 $62.36
Computation of net asset value Class Y
Net Assets $34,097,500 $59,063,585 $65,909,812
Number of shares outstanding 486,600 856,982 979,157
Net asset value $70.07 $68.92 $67.31
..................................................................................................................
Cost of investments (Note 1) $52,382,029 $90,740,003 $100,845,202
- -----------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
2015 2010 Maturity
Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------
Assets
Investments in underlying Putnam Funds, at value (Note 1) $119,525,122 $78,041,964 $43,666,456
Dividends, interest and other receivables 25,528 29,246 20,404
Receivable for shares of the fund sold 2,127,222 1,469,625 1,064,618
Receivable for securities sold 14,854 119,033 86,380
Unamortized offering costs (Note 1) 65,247 65,247 84,836
Organizational cost (Note 1) -- -- 12,500
Receivable from Manager (Note 2) 15,844 17,535 43,764
..................................................................................................................
Total assets 121,773,817 79,742,650 44,978,958
..................................................................................................................
Liabilities
Payable for shares of the fund redeemed 14,854 119,063 86,400
Payable for securities purchased 2,146,482 1,497,891 1,084,339
Payable for distribution fees (Note 2) 7,965 5,917 3,589
Other accrued expenses 19,744 11,945 7,654
..................................................................................................................
Total liabilities 2,189,045 1,634,816 1,181,982
..................................................................................................................
Net assets $119,584,772 $78,107,834 $43,796,976
..................................................................................................................
Represented by:
Paid-in-capital (Notes 1 and 4) $116,889,607 $77,057,026 43,427,650
Undistributed net investment income (loss) (Note 1) 51,514 57,725 8,121
Accumulated net realized gain (loss) on investments (Note 1) 180,703 77,818 35,928
Net unrealized appreciation of investments 2,462,948 915,265 325,277
..................................................................................................................
Total representing net assets applicable to capital
outstanding $119,584,772 $78,107,834 $43,796,976
..................................................................................................................
Computation of net asset value and offering price Class A
Net Assets $39,820,335 $29,559,014 $17,708,645
Number of shares outstanding 615,905 509,854 312,310
Net asset value $64.65 $57.98 $56.70
Offering price per class A share (front-end sales charge of
5.25%) $68.23 $61.19 $59.84
Computation of net asset value Class B
Net Assets $6,735 $65,125 $102,066
Number of shares outstanding 105 1,141 1,799
Net asset value $63.93 $57.09 $56.73
Computation of net asset value Class C
Net Assets $15,326 $4,685 $1,015
Number of shares outstanding 240 82 18
Net asset value $63.90 $57.11 $56.73
Computation of net asset value Class M
Net Assets $73,842 $1,023 $1,016
Number of shares outstanding 1,155 18 18
Net asset value $63.95 $57.14 $56.73
Offering price per class M share (front-end sales charge of
3.50%) $66.27 $59.21 $58.79
Computation of net asset value Class R
Net Assets $1,037 $1,024 $1,017
Number of shares outstanding 16 18 18
Net asset value $64.01 $57.16 $56.73
Computation of net asset value Class Y
Net Assets $79,667,497 $48,476,963 $25,983,217
Number of shares outstanding 1,230,063 801,986 457,209
Net asset value $64.77 $60.45 $56.83
..................................................................................................................
Cost of investments (Note 1) $117,062,174 $77,126,699 $43,341,179
- -----------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Statement of operations
For the period ended January 31, 2005* (Unaudited)
2045 2040 2035
Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------
Investment income
Income distributions from underlying funds $46,021 $72,302 $161,336
..................................................................................................................
Expenses (Note 2)
Compensation of Manager (Note 2) 951 1,485 3,361
Distribution fees (Note 2) 1,993 3,136 6,182
Audit fees 355 841 1,953
Registration fees 1,206 1,897 4,076
Other fees 234 553 1,283
Amortization of offering costs (Note 1) 21,928 21,928 21,928
Fees waived and reimbursed by Manager (Note 2) (22,771) (23,734) (25,879)
..................................................................................................................
Total expenses 3,896 6,106 12,904
..................................................................................................................
Net investment income 42,125 66,196 148,432
..................................................................................................................
Net realized gain on sale of underlying fund shares 38,551 39,165 82,812
Net unrealized appreciation of underlying fund shares 239,141 390,071 879,037
..................................................................................................................
Net gain on investments 277,692 429,236 961,849
..................................................................................................................
Net increase in net assets resulting from operations $319,817 $495,432 $1,110,281
- -----------------------------------------------------------------------------------------------------------------
* Commencement of operations November 1, 2004.
The accompanying notes are an integral part of these financial statements.
2030 2025 2020
Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------
Investment income
Income distributions from underlying funds $242,099 $428,596 $440,758
..................................................................................................................
Expenses (Note 2)
Compensation of Manager (Note 2) 5,105 9,030 10,101
Distribution fees (Note 2) 9,187 16,430 17,979
Audit fees 3,510 6,054 6,769
Registration fees 6,163 10,669 3,996
Other fees 2,306 3,978 4,448
Amortization of offering costs (Note 1) 21,928 21,928 21,928
Fees waived and reimbursed by Manager (Note 2) (28,801) (33,569) (27,040)
..................................................................................................................
Total expenses 19,398 34,520 38,181
..................................................................................................................
Net investment income 222,701 394,076 402,577
..................................................................................................................
Net realized gain on sale of underlying fund shares 107,506 164,626 147,802
Net unrealized appreciation of underlying fund shares 1,262,448 2,236,833 2,045,876
..................................................................................................................
Net gain on investments 1,369,954 2,401,459 2,193,678
..................................................................................................................
Net increase in net assets resulting from operations $1,592,655 $2,795,535 $2,596,255
- -----------------------------------------------------------------------------------------------------------------
* Commencement of operations November 1, 2004.
The accompanying notes are an integral part of these financial statements.
2015 2010 Maturity
Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------
Investment income
Income distributions from underlying funds $538,657 $324,416 $173,659
..................................................................................................................
Expenses (Note 2)
Compensation of Manager (Note 2) 12,825 8,082 4,417
Distribution fees (Note 2) 21,099 15,499 8,889
Audit fees 9,179 5,404 3,601
Registration fees 4,535 2,990 1,685
Other fees 6,033 3,550 2,367
Amortization of offering costs (Note 1) 21,749 21,749 32,445
Organizational cost (Note 1) -- -- 12,500
Fees waived and reimbursed by Manager (Note 2) (28,669) (25,617) (48,181)
..................................................................................................................
Total expenses 46,751 31,657 17,723
..................................................................................................................
Net investment income 491,906 292,759 155,936
..................................................................................................................
Net realized gain on sale of underlying fund shares 180,703 77,818 35,928
Net unrealized appreciation of underlying fund shares 2,462,948 915,265 325,277
..................................................................................................................
Net gain on investments 2,643,651 993,083 361,205
..................................................................................................................
Net increase in net assets resulting from operations $3,135,557 $1,285,842 $517,141
- -----------------------------------------------------------------------------------------------------------------
* Commencement of operations November 1, 2004.
The accompanying notes are an integral part of these financial statements.
Statement of changes in net assets
For the period ended January 31, 2005* (Unaudited)
2045 2040 2035
Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------
Increase in net assets
Operations:
Net investment income $42,125 $66,196 $148,432
Net realized gain on underlying fund shares 38,551 39,165 82,812
Net unrealized appreciation on underlying
fund shares 239,141 390,071 879,037
..................................................................................................................
Net increase in net assets resulting from
operations 319,817 495,432 1,110,281
..................................................................................................................
Distributions to shareholders from net investment income (Note 1)
Class A (26,219) (40,513) (70,868)
Class B (8) (7) (86)
Class C (8) (7) (6)
Class M (9) (48) (21)
Class R (9) (8) (7)
Class Y (33,627) (44,746) (98,944)
Increase from capital share transactions
(Note 4) 10,249,273 16,117,766 34,636,698
..................................................................................................................
Total increase in net assets 10,509,210 16,527,869 35,577,047
..................................................................................................................
Net assets:
Beginning of period -- -- --
..................................................................................................................
End of period $10,509,210 $16,527,869 $35,577,047
- -----------------------------------------------------------------------------------------------------------------
* Commencement of operations November 1, 2004.
The accompanying notes are an integral part of these financial statements.
2030 2025 2020
Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------
Increase in net assets
Operations:
Net investment income $222,701 $394,076 $402,577
Net realized gain on underlying fund shares 107,506 164,626 147,802
Net unrealized appreciation on underlying
fund shares 1,262,448 2,236,833 2,045,876
..................................................................................................................
Net increase in net assets resulting from
operations 1,592,655 2,795,535 2,596,255
..................................................................................................................
Distributions to shareholders from net investment income (Note 1)
Class A (98,122) (156,581) (155,610)
Class B (6) (79) (90)
Class C (6) (5) (14)
Class M (19) (210) (151)
Class R (6) (6) (5)
Class Y (140,095) (242,685) (232,313)
Increase from capital share transactions
(Note 4) 52,363,558 90,643,765 100,743,276
..................................................................................................................
Total increase in net assets 53,717,959 93,039,734 102,951,348
..................................................................................................................
Net assets:
Beginning of period -- -- --
..................................................................................................................
End of period $53,717,959 $93,039,734 $102,951,348
- -----------------------------------------------------------------------------------------------------------------
* Commencement of operations November 1, 2004.
The accompanying notes are an integral part of these financial statements.
2015 2010 Maturity
Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------
Increase in net assets
Operations:
Net investment income $491,906 $292,759 $155,936
Net realized gain on underlying fund shares 180,703 77,818 35,928
Net unrealized appreciation on underlying
fund shares 2,462,948 915,265 325,277
..................................................................................................................
Net increase in net assets resulting from
operations 3,135,557 1,285,842 517,141
..................................................................................................................
Distributions to shareholders from net investment income (Note 1)
Class A (151,730) (100,806) (55,792)
Class B (23) (9) (232)
Class C (46) (5) (2)
Class M (71) (3) (3)
Class R (4) (3) (4)
Class Y (288,518) (134,208) (91,782)
Increase from capital share transactions
(Note 4) 116,889,607 77,057,026 43,327,650
..................................................................................................................
Total increase in net assets 119,584,772 78,107,834 43,696,976
..................................................................................................................
Net assets:
Beginning of period (Note 5) -- -- 100,000
..................................................................................................................
End of period $119,584,772 $78,107,834 $43,796,976
- -----------------------------------------------------------------------------------------------------------------
* Commencement of operations November 1, 2004.
The accompanying notes are an integral part of these financial statements.
Financial highlights
(For a common share outstanding throughout the period)
CLASS A
- ---------------------------------------------------------------------------------------------------------------------------------
Investment Operations
Net
Net Realized and Net
Asset Unrealized Asset
Value, Net Gain (Loss) Total from Value,
Beginning Investment on Investment Total End
Period ended of Period Income (a) Investments Operations Distributions of Period
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam Retirement Ready 2045 Fund
January 31, 2005** + $63.42 $0.34 $3.63 $3.97 $(0.58) $66.81
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2040 Fund
January 31, 2005** + 63.50 0.36 3.54 3.90 (0.52) 66.88
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2035 Fund
January 31, 2005** + 62.61 0.35 3.30 3.65 (0.45) 65.81
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2030 Fund
January 31, 2005** + 62.16 0.35 3.09 3.44 (0.42) 65.18
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2025 Fund
January 31, 2005** + 65.75 0.37 3.05 3.42 (0.40) 68.77
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2020 Fund
January 31, 2005** + 60.69 0.30 2.45 2.75 (0.33) 63.11
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2015 Fund
January 31, 2005** + 62.62 0.29 2.02 2.31 (0.28) 64.65
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2010 Fund
January 31, 2005** + 56.79 0.24 1.17 1.41 (0.22) 57.98
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady Maturity Fund
January 31, 2005** + 55.96 0.22 0.75 0.97 (0.23) 56.70
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios and Supplemental Data
Total Ratio of Net
Investment Ratio of Investment
Return at Net Assets, Expenses Income (Loss)
Net Asset End of Period to Average Net to Average Portfolio
Period ended Value (%)(b) (in thousands) Assets (%)(c)(d) Net Assets (%)(d) Turnover (%)
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam Retirement Ready 2045 Fund
January 31, 2005** + 6.25* $4,958 0.09* 0.54* 8.56*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2040 Fund
January 31, 2005** + 6.13* 7,526 0.09* 0.59* 6.34*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2035 Fund
January 31, 2005** + 5.82* 14,141 0.09* 0.58* 5.97*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2030 Fund
January 31, 2005** + 5.53* 19,535 0.09* 0.57* 5.35*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2025 Fund
January 31, 2005** + 5.19* 33,808 0.09* 0.56* 4.87*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2020 Fund
January 31, 2005** + 4.52* 36,826 0.09* 0.51* 5.10*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2015 Fund
January 31, 2005** + 3.68* 39,820 0.09* 0.47* 5.74*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2010 Fund
January 31, 2005** + 2.47* 29,559 0.09* 0.44* 6.75*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady Maturity Fund
January 31, 2005** + 1.73* 17,709 0.09* 0.42* 8.89*
- ---------------------------------------------------------------------------------------------------------------------------------
+ Unaudited.
* Not annualized.
** For the period November 1, 2004 (commencement of operations) to
January 31, 2005.
(a) Per share net investment income (loss) has been determined on the basis
of the weighted average number of shares outstanding during the period.
(b) Total return does not reflect the effect of sales charges.
(c) Expense ratios do not include expenses of the underlying funds.
(d) Reflects an involuntary contractual expense limitation in effect during
the period. As a result of such limitation the expenses for the period
ended January 31, 2005 reflect a reduction of the following based on each
fund's average net assets.
1/31/05
------------
Putnam RetirementReady 2045 Fund 0.30%
Putnam RetirementReady 2040 Fund 0.20
Putnam RetirementReady 2035 Fund 0.10
Putnam RetirementReady 2030 Fund 0.07
Putnam RetirementReady 2025 Fund 0.05
Putnam RetirementReady 2020 Fund 0.03
Putnam RetirementReady 2015 Fund 0.03
Putnam RetirementReady 2010 Fund 0.04
Putnam RetirementReady Maturity Fund 0.14
The accompanying notes are an integral part of these financial statements.
Financial highlights (Continued)
(For a common share outstanding throughout the period)
CLASS B
- ---------------------------------------------------------------------------------------------------------------------------------
Investment Operations
Net
Net Realized and Net
Asset Net Unrealized Asset
Value, Investment Gain (Loss) Total from Value,
Beginning Income on Investment Total End
Period ended of Period (Loss) (a) Investments Operations Distributions of Period
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2045 Fund
January 31, 2005** + $62.00 $0.18 $3.58 $3.76 $(0.51) $65.25
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2040 Fund
January 31, 2005** + 62.00 0.25 3.44 3.69 (0.45) 65.24
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2035 Fund
January 31, 2005** + 61.00 0.36 3.09 3.45 (0.44) 64.01
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2030 Fund
January 31, 2005** + 61.00 0.30 2.95 3.25 (0.35) 63.90
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2025 Fund
January 31, 2005** + 64.00 0.05 3.15 3.20 (0.39) 66.81
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2020 Fund
January 31, 2005** + 60.00 0.20 2.39 2.59 (0.32) 62.27
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2015 Fund
January 31, 2005** + 62.00 0.20 1.98 2.18 (0.25) 63.93
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2010 Fund
January 31, 2005** + 56.00 0.07 1.22 1.29 (0.20) 57.09
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady Maturity Fund
January 31, 2005** + 56.00 0.12 0.74 0.86 (0.13) 56.73
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios and Supplemental Data
Total Ratio of Net
Investment Ratio of Investment
Return at Net Assets, Expenses Income (Loss)
Net Asset End of Period to Average Net to Average Portfolio
Period ended Value (%)(b) (in thousands) Assets (%)(c)(d) Net Assets (%)(d) Turnover (%)
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2045 Fund
January 31, 2005** + 6.05* $2 0.28* 0.26* 8.56*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2040 Fund
January 31, 2005** + 5.94* 24 0.28* 0.38* 6.34*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2035 Fund
January 31, 2005** + 5.64* 14 0.28* 0.52* 5.97*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2030 Fund
January 31, 2005** + 5.31* 50 0.28* 0.21* 5.35*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2025 Fund
January 31, 2005** + 4.99* 55 0.28* 0.13* 4.87*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2020 Fund
January 31, 2005** + 4.32* 32 0.28* 0.35* 5.10*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2015 Fund
January 31, 2005** + 3.51* 7 0.28* 0.34* 5.74*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2010 Fund
January 31, 2005** + 2.29* 65 0.28* 0.16* 6.75*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady Maturity Fund
January 31, 2005** + 1.53* 102 0.28* 0.22* 8.89*
- ---------------------------------------------------------------------------------------------------------------------------------
+ Unaudited.
* Not annualized.
** For the period November 1, 2004 (commencement of operations) to
January 31, 2005.
(a) Per share net investment income (loss) has been determined on the basis
of the weighted average number of shares outstanding during the period.
(b) Total return does not reflect the effect of sales charges.
(c) Expense ratios do not include expenses of the underlying funds.
(d) Reflects an involuntary contractual expense limitation in effect
during the period. As a result of such limitation the expenses for
the period ended January 31, 2005 reflect a reduction of the following
based on each fund's average net assets.
1/31/05
------------
Putnam RetirementReady 2045 Fund 0.30%
Putnam RetirementReady 2040 Fund 0.20
Putnam RetirementReady 2035 Fund 0.10
Putnam RetirementReady 2030 Fund 0.07
Putnam RetirementReady 2025 Fund 0.05
Putnam RetirementReady 2020 Fund 0.03
Putnam RetirementReady 2015 Fund 0.03
Putnam RetirementReady 2010 Fund 0.04
Putnam RetirementReady Maturity Fund 0.14
The accompanying notes are an integral part of these financial statements.
Financial highlights (Continued)
(For a common share outstanding throughout the period)
CLASS C
- ---------------------------------------------------------------------------------------------------------------------------------
Investment Operations
Net
Net Realized and Net
Asset Net Unrealized Asset
Value, Investment Gain (Loss) Total from Value,
Beginning Income on Investment Total End
Period ended of Period (Loss) (a) Investments Operations Distributions of Period
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2045 Fund
January 31, 2005** + $62.00 $0.21 $3.55 $3.76 $(0.51) $65.25
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2040 Fund
January 31, 2005** + 62.00 0.25 3.44 3.69 (0.45) 65.24
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2035 Fund
January 31, 2005** + 61.00 0.24 3.20 3.44 (0.38) 64.06
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2030 Fund
January 31, 2005** + 61.00 0.09 3.16 3.25 (0.35) 63.90
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2025 Fund
January 31, 2005** + 64.00 0.06 3.14 3.20 (0.32) 66.88
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2020 Fund
January 31, 2005** + 60.00 0.07 2.53 2.60 (0.30) 62.30
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2015 Fund
January 31, 2005** + 62.00 0.14 2.04 2.18 (0.28) 63.90
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2010 Fund
January 31, 2005** + 56.00 0.11 1.17 1.28 (0.17) 57.11
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady Maturity Fund
January 31, 2005** + 56.00 0.12 0.74 0.86 (0.13) 56.73
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios and Supplemental Data
Total Ratio of Net
Investment Ratio of Investment
Return at Net Assets, Expenses Income (Loss)
Net Asset End of Period to Average Net to Average Portfolio
Period ended Value (%)(b) (in thousands) Assets (%)(c)(d) Net Assets (%)(d) Turnover (%)
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2045 Fund
January 31, 2005** + 6.05* $8 0.28* 0.34* 8.56*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2040 Fund
January 31, 2005** + 5.94* 1 0.28* 0.38* 6.34*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2035 Fund
January 31, 2005** + 5.63* 1 0.28* 0.37* 5.97*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2030 Fund
January 31, 2005** + 5.31* 7 0.28* 0.21* 5.35*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2025 Fund
January 31, 2005** + 5.00* 22 0.28* 0.13* 4.87*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2020 Fund
January 31, 2005** + 4.32* 29 0.28* 0.17* 5.10*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2015 Fund
January 31, 2005** + 3.51* 15 0.28* 0.24* 5.74*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2010 Fund
January 31, 2005** + 2.28* 5 0.28* 0.21* 6.75*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady Maturity Fund
January 31, 2005** + 1.53* 1 0.28* 0.22* 8.89*
- ---------------------------------------------------------------------------------------------------------------------------------
+ Unaudited.
* Not annualized.
** For the period November 1, 2004 (commencement of operations) to
January 31, 2005.
(a) Per share net investment income (loss) has been determined on the
basis of the weighted average number of shares outstanding during the
period.
(b) Total return does not reflect the effect of sales charges.
(c) Expense ratios do not include expenses of the underlying funds.
(d) Reflects an involuntary contractual expense limitation in effect
during the period. As a result of such limitation the expenses for
the period ended January 31, 2005 reflect a reduction of the following
based on each fund's average net assets.
1/31/05
------------
Putnam RetirementReady 2045 Fund 0.30%
Putnam RetirementReady 2040 Fund 0.20
Putnam RetirementReady 2035 Fund 0.10
Putnam RetirementReady 2030 Fund 0.07
Putnam RetirementReady 2025 Fund 0.05
Putnam RetirementReady 2020 Fund 0.03
Putnam RetirementReady 2015 Fund 0.03
Putnam RetirementReady 2010 Fund 0.04
Putnam RetirementReady Maturity Fund 0.14
The accompanying notes are an integral part of these financial statements.
Financial highlights (Continued)
(For a common share outstanding throughout the period)
CLASS M
- ---------------------------------------------------------------------------------------------------------------------------------
Investment Operations
Net
Net Realized and Net
Asset Net Unrealized Asset
Value, Investment Gain (Loss) Total from Value,
Beginning Income on Investment Total End
Period ended of Period (Loss) (a) Investments Operations Distributions of Period
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2045 Fund
January 31, 2005** + $62.00 $0.29 $3.52 $3.81 $(0.54) $65.27
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2040 Fund
January 31, 2005** + 62.00 0.37 3.36 3.73 (0.52) 65.21
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2035 Fund
January 31, 2005** + 61.00 0.14 3.35 3.49 (0.44) 64.05
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2030 Fund
January 31, 2005** + 61.00 0.09 3.20 3.29 (0.40) 63.89
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2025 Fund
January 31, 2005** + 64.00 0.18 3.06 3.24 (0.40) 66.84
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2020 Fund
January 31, 2005** + 60.00 0.10 2.54 2.64 (0.34) 62.30
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2015 Fund
January 31, 2005** + 62.00 0.13 2.09 2.22 (0.27) 63.95
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2010 Fund
January 31, 2005** + 56.00 0.17 1.14 1.31 (0.17) 57.14
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady Maturity Fund
January 31, 2005** + 56.00 0.16 0.73 0.89 (0.16) 56.73
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios and Supplemental Data
Total Ratio of Net
Investment Ratio of Investment
Return at Net Assets, Expenses Income (Loss)
Net Asset End of Period to Average Net to Average Portfolio
Period ended Value (%)(b) (in thousands) Assets (%)(c)(d) Net Assets (%)(d) Turnover (%)
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2045 Fund
January 31, 2005** + 6.12* $6 0.21* 0.24* 8.56*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2040 Fund
January 31, 2005** + 5.99* 8 0.21* 0.57* 6.34*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2035 Fund
January 31, 2005** + 5.70* 11 0.21* 0.39* 5.97*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2030 Fund
January 31, 2005** + 5.38* 28 0.21* 0.27* 5.35*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2025 Fund
January 31, 2005** + 5.06* 90 0.21* 0.35* 4.87*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2020 Fund
January 31, 2005** + 4.39* 153 0.21* 0.24* 5.10*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2015 Fund
January 31, 2005** + 3.58* 74 0.21* 0.30* 5.74*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2010 Fund
January 31, 2005** + 2.34* 1 0.21* 0.30* 6.75*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady Maturity Fund
January 31, 2005** + 1.60* 1 0.21* 0.28* 8.89*
- ---------------------------------------------------------------------------------------------------------------------------------
+ Unaudited.
* Not annualized.
** For the period November 1, 2004 (commencement of operations) to
January 31, 2005.
(a) Per share net investment income (loss) has been determined on the basis
of the weighted average number of shares outstanding during the period.
(b) Total return does not reflect the effect of sales charges.
(c) Expense ratios do not include expenses of the underlying funds.
(d) Reflects an involuntary contractual expense limitation in effect
during the period. As a result of such limitation the expenses for the
period ended January 31, 2005 reflect a reduction of the following based
on each fund's average net assets.
1/31/05
------------
Putnam RetirementReady 2045 Fund 0.30%
Putnam RetirementReady 2040 Fund 0.20
Putnam RetirementReady 2035 Fund 0.10
Putnam RetirementReady 2030 Fund 0.07
Putnam RetirementReady 2025 Fund 0.05
Putnam RetirementReady 2020 Fund 0.03
Putnam RetirementReady 2015 Fund 0.03
Putnam RetirementReady 2010 Fund 0.04
Putnam RetirementReady Maturity Fund 0.14
The accompanying notes are an integral part of these financial statements.
Financial highlights (Continued)
(For a common share outstanding throughout the period)
CLASS R
- ---------------------------------------------------------------------------------------------------------------------------------
Investment Operations
Net
Net Realized and Net
Asset Net Unrealized Asset
Value, Investment Gain (Loss) Total from Value,
Beginning Income on Investment Total End
Period ended of Period (Loss) (a) Investments Operations Distributions of Period
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2045 Fund
January 31, 2005** + $62.00 $0.34 $3.51 $3.85 $(0.56) $65.29
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2040 Fund
January 31, 2005** + 62.00 0.33 3.44 3.77 (0.50) 65.27
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2035 Fund
January 31, 2005** + 61.00 0.32 3.20 3.52 (0.44) 64.08
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2030 Fund
January 31, 2005** + 61.00 0.32 3.02 3.34 (0.40) 63.94
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2025 Fund
January 31, 2005** + 64.00 0.31 2.98 3.29 (0.38) 66.91
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2020 Fund
January 31, 2005** + 60.00 0.26 2.41 2.67 (0.31) 62.36
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2015 Fund
January 31, 2005** + 62.00 0.25 2.02 2.27 (0.26) 64.01
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2010 Fund
January 31, 2005** + 56.00 0.20 1.15 1.35 (0.19) 57.16
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady Maturity Fund
January 31, 2005** + 56.00 0.19 0.74 0.93 (0.20) 56.73
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios and Supplemental Data
Total Ratio of Net
Investment Ratio of Investment
Return at Net Assets, Expenses Income (Loss)
Net Asset End of Period to Average Net to Average Portfolio
Period ended Value (%)(b) (in thousands) Assets (%)(c)(d) Net Assets (%)(d) Turnover (%)
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2045 Fund
January 31, 2005** + 6.19* $1 0.15* 0.51* 8.56*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2040 Fund
January 31, 2005** + 6.07* 1 0.15* 0.50* 6.34*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2035 Fund
January 31, 2005** + 5.75* 1 0.15* 0.49* 5.97*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2030 Fund
January 31, 2005** + 5.46* 1 0.15* 0.49* 5.35*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2025 Fund
January 31, 2005** + 5.12* 1 0.15* 0.48* 4.87*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2020 Fund
January 31, 2005** + 4.45* 1 0.15* 0.43* 5.10*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2015 Fund
January 31, 2005** + 3.65* 1 0.15* 0.39* 5.74*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2010 Fund
January 31, 2005** + 2.41* 1 0.15* 0.36* 6.75*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady Maturity Fund
January 31, 2005** + 1.66* 1 0.15* 0.34* 8.89*
- ---------------------------------------------------------------------------------------------------------------------------------
+ Unaudited.
* Not annualized.
** For the period November 1, 2004 (commencement of operations) to
January 31, 2005.
(a) Per share net investment income (loss) has been determined on the
basis of the weighted average number of shares outstanding during
the period.
(b) Total return does not reflect the effect of sales charges.
(c) Expense ratios do not include expenses of the underlying funds.
(d) Reflects an involuntary contractual expense limitation in effect during
the period. As a result of such limitation the expenses for the period
ended January 31, 2005 reflect a reduction of the following based on
each fund's average net assets.
1/31/05
------------
Putnam RetirementReady 2045 Fund 0.30%
Putnam RetirementReady 2040 Fund 0.20
Putnam RetirementReady 2035 Fund 0.10
Putnam RetirementReady 2030 Fund 0.07
Putnam RetirementReady 2025 Fund 0.05
Putnam RetirementReady 2020 Fund 0.03
Putnam RetirementReady 2015 Fund 0.03
Putnam RetirementReady 2010 Fund 0.04
Putnam RetirementReady Maturity Fund 0.14
The accompanying notes are an integral part of these financial statements.
Financial highlights
(For a common share outstanding throughout the period)
CLASS Y
- ---------------------------------------------------------------------------------------------------------------------------------
Investment Operations
Net
Net Realized and Net
Asset Net Unrealized Asset
Value, Investment Gain (Loss) Total from Value,
Beginning Income on Investment Total End
Period ended of Period (Loss) (a) Investments Operations Distributions of Period
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2045 Fund
January 31, 2005** + $68.76 $0.40 $3.95 $4.35 $(0.60) $72.51
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2040 Fund
January 31, 2005** + 68.61 0.37 3.89 4.26 (0.54) 72.33
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2035 Fund
January 31, 2005** + 67.76 0.37 3.63 4.00 (0.47) 71.29
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2030 Fund
January 31, 2005** + 66.78 0.35 3.38 3.73 (0.44) 70.07
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2025 Fund
January 31, 2005** + 65.87 0.37 3.10 3.47 (0.42) 68.92
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2020 Fund
January 31, 2005** + 64.69 0.31 2.66 2.97 (0.35) 67.31
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2015 Fund
January 31, 2005** + 62.71 0.31 2.05 2.36 (0.30) 64.77
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2010 Fund
January 31, 2005** + 59.18 0.27 1.23 1.50 (0.23) 60.45
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady Maturity Fund
January 31, 2005** + 56.08 0.25 0.76 1.01 (0.26) 56.83
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios and Supplemental Data
Total Ratio of Net
Investment Ratio of Investment
Return at Net Assets, Expenses Income (Loss)
Net Asset End of Period to Average Net to Average Portfolio
Period ended Value (%)(b) (in thousands) Assets (%)(c)(d) Net Assets (%)(d) Turnover (%)
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2045 Fund
January 31, 2005** + 6.31* $5,534 0.03* 0.58* 8.56*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2040 Fund
January 31, 2005** + 6.20* 8,968 0.03* 0.55* 6.34*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2035 Fund
January 31, 2005** + 5.90* 21,408 0.03* 0.55* 5.97*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2030 Fund
January 31, 2005** + 5.57* 34,098 0.03* 0.54* 5.35*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2025 Fund
January 31, 2005** + 5.26* 59,064 0.03 0.55* 4.87*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2020 Fund
January 31, 2005** + 4.58* 65,910 0.03* 0.50* 5.10*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2015 Fund
January 31, 2005** + 3.76* 79,667 0.03* 0.49* 5.74*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady 2010 Fund
January 31, 2005** + 2.54* 48,477 0.03* 0.47* 6.75*
- ---------------------------------------------------------------------------------------------------------------------------------
Putnam RetirementReady Maturity Fund
January 31, 2005** + 1.79* 25,983 0.03* 0.47* 8.89*
- ---------------------------------------------------------------------------------------------------------------------------------
+ Unaudited.
* Not annualized.
** For the period November 1, 2004 (commencement of operations) to
January 31, 2005.
(a) Per share net investment income (loss) has been determined on the
basis of the weighted average number of shares outstanding during
the period.
(b) Total return does not reflect the effect of sales charges.
(c) Expense ratios do not include expenses of the underlying funds.
(d) Reflects an involuntary contractual expense limitation in effect during
the period. As a result of such limitation the expenses for the period
ended January 31, 2005 reflect a reduction of the following based on
each fund's average net assets.
1/31/05
------------
Putnam RetirementReady 2045 Fund 0.30%
Putnam RetirementReady 2040 Fund 0.20
Putnam RetirementReady 2035 Fund 0.10
Putnam RetirementReady 2030 Fund 0.07
Putnam RetirementReady 2025 Fund 0.05
Putnam RetirementReady 2020 Fund 0.03
Putnam RetirementReady 2015 Fund 0.03
Putnam RetirementReady 2010 Fund 0.04
Putnam RetirementReady Maturity Fund 0.14
The accompanying notes are an integral part of these financial statements.
Notes to financial statements
January 31, 2005 (Unaudited)
Note 1
Significant accounting policies
Each of Putnam RetirementReady Funds: Putnam RetirementReady 2045 Fund,
Putnam RetirementReady 2040 Fund, Putnam Retirement Ready 2035 Fund,
Putnam RetirementReady 2030 Fund, Putnam RetirementReady 2025 Fund,
Putnam RetirementReady 2020 Fund, Putnam RetirementReady 2015 Fund,
Putnam RetirementReady 2010 Fund and Putnam RetirementReady Maturity
Fund, (collectively the "funds") is a series of Putnam Retirement Ready
Funds, a Massachusetts business trust organized on June 8, 2004 (the
"Trust"). Each fund is a diversified open-ended investment company under
the Investment Company Act of 1940, as amended, each of which is
represented by a series of shares of beneficial interest. Each fund
except the Maturity Fund seeks capital appreciation and current income
consistent with a decreasing emphasis on capital appreciation and an
increasing emphasis on current income as it approaches its target date.
The Maturity Fund seeks as high a rate of current income as Putnam
Investment Management, LLC ("Putnam Management") believes is consistent
with preservation of capital.
Currently there are nine separate funds, of which eight have a target
date specified by the calendar year in the name of each fund. The target
dates are in five-year increments beginning with the year 2010. The
ninth fund is named Putnam RetirementReady Maturity Fund. As the other
funds reach their target date, they will merge with the Maturity Fund.
These financial statements report on each fund which may invest in the
following Putnam funds: Putnam Income Fund, Putnam Capital Opportunities
Fund, The Putnam Fund for Growth and Income, Putnam Money Market Fund,
Putnam International Equity Fund and Putnam Voyager Fund (the
"underlying Putnam funds"), which are managed by Putnam Management. The
financial statements of the underlying Putnam funds contain additional
information about the expenses and investments of the underlying Putnam
funds and are available upon request.
Each fund offers class A, class B, class C, class M, class R and class Y
shares. Class A shares are sold with a maximum front-end sales charge of
5.25%. Class B shares, which convert to class A shares after
approximately eight years, do not pay a front-end sales charge but pay a
higher ongoing distribution fee than class A, class M and class R
shares, 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 the same fees and expenses as class B shares, except that
class C shares have a one-year 1.00% contingent deferred sales charge
and do not convert to class A shares. Class M shares are sold with a
maximum front-end sales charge of 3.50% and pay an ongoing distribution
fee that is higher than class A and class R shares but lower than class
B and class C shares. Class R shares are sold without a front-end sales
charge and pay an ongoing distribution fee that is higher than class A
shares, but lower than class B, class C and class M shares. Class R
shares are offered to qualified employee-benefit plans. Class Y shares,
which are sold at net asset value, are generally subject to the same
expenses as class A, class B, class C, class M and class R shares, but
do not bear a distribution fee. Class Y shares are sold to certain
eligible purchasers including certain defined contribution plans
(including corporate IRAs), bank trust departments and trust companies.
A 2.00% redemption fee may apply to any shares that are redeemed (either
by selling or exchanging into another fund) within 5 days of purchase.
The redemption fee is accounted for as an addition to paid-in-capital.
Investment income, realized and unrealized gains and losses and expenses
of each fund are borne pro-rata based on the relative net assets of each
class to the total net assets of each 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. Shares of each
class would receive their pro-rata share of the net assets of the fund,
if that fund were liquidated. In addition, the Trustees declare separate
dividends on each class of shares.
The following is a summary of significant accounting policies
consistently followed by the funds in the preparation of their 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 during the reporting period. Actual results could
differ from those estimates.
A) Security valuation The price of each fund's shares is based on its
net asset value (NAV), which is in turn based on the NAVs of the
underlying Putnam funds in which it invests. The NAV per share of each
class equals the total value of its assets, less its liabilities,
divided by the number of its outstanding shares. Shares are only valued
as of the close of regular trading on the New York Stock Exchange each
day the exchange is open. Each underlying Putnam fund values its
investments for which market quotations are readily available at market
value. It values short-term investments that will mature within 60 days
at amortized cost, which approximates market value. It values all other
investments and assets at their fair value. Each underlying Putnam fund
translates prices for its investments quoted in foreign currencies into
U.S. dollars at current exchange rates. As a result, changes in the
value of those currencies in relation to the U.S. dollar may affect an
underlying Putnam fund's NAV. Because foreign markets may be open at
different times than the New York Stock Exchange, the value of a fund's
shares may change on days when shareholders are not able to buy or sell
them. If events materially affecting the values of an underlying Putnam
fund's foreign investments occur between the close of foreign markets
and the close of regular trading on the New York Stock Exchange, these
investments will be valued at their fair value. In addition, the closing
prices for securities in foreign markets or on foreign exchanges that
close prior to the close of the New York Stock Exchange may not fully
reflect events that occur after such close but before the close of the
New York Stock Exchange. As a result, each underlying Putnam Fund has
adopted fair value pricing procedures, which, among other things,
require the funds' to fair value foreign equity securities if there has
been a movement in the U.S. market that exceeds a specified threshold.
Although the threshold may be revised from time to time and the number
of days on which fair value prices will be used will depend on market
activity, it is possible that fair value prices will be used to a
significant extent.
B) Security transactions and related investment income Security
transactions, shares of the underlying Putnam funds, are recorded on the
trade date (date the order to buy or sell is executed). Gains or losses
from the sale of the underlying Putnam funds are determined on the
identified cost basis. Income and capital gain distributions from the
underlying funds are recorded on the ex-dividend date.
C) Federal taxes It is the policy of each fund to distribute all of its
taxable income within the prescribed time and otherwise comply with the
provisions of the Internal Revenue Code of 1986 (the "Code") applicable
to regulated investment companies. It is also the intention of each fund
to distribute an amount sufficient to avoid imposition of any excise tax
under Section 4982 of the Code, as amended. Therefore, 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.
D) Distributions to shareholders Distributions to shareholders from net
investment income are recorded by each fund on the ex-dividend date.
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. Reclassifications are made to each fund's capital
accounts to reflect income and gains available for distribution (or
available capital loss carryovers) under income tax regulations.
E) Expenses of the trust Expenses directly charged or attributable to
any fund will be paid from the assets of that fund. Generally, expenses
of the trust will be allocated among and charged to the assets of each
fund on a basis that the Trustees deem fair and equitable, which may be
based on the relative assets of each fund or the nature of the services
performed and relative applicability to each fund.
F) Organization and offering Expenses incurred by each fund in
connection with its organization, its registration with the Securities
and Exchange Commission and with various states and the initial public
offering of its shares were $86,966, except Maturity Fund which incurred
$127,496 plus $12,500 in organization costs.
The organization fees are expensed as occurred and the offering costs
will be amortized over a twelve month period on a straight line basis.
Note 2
Management fee, administrative
services and other transactions
Putnam Management is paid for management and investment advisory
services monthly at an annual rate of 0.05% based on the average net
assets of each fund.
In order to limit each fund's expenses, Putnam Management has agreed to
limit its compensation (and, to the extent necessary, bear other
expenses) through July 31, 2007, to the extent that each funds' net
expenses (exclusive of brokerage, interest, taxes, extraordinary
expenses, fees and expenses of the underlying funds in which each fund
invests and payments under the fund's distribution plan) would exceed an
annual rate of 10% of each fund's average net assets.
Each fund has adopted distribution plans (the "Plans") with respect to
its class A, class B, class C, class M and class R shares pursuant to
Rule 12b-1 under the Investment Company Act of 1940. The purpose of the
Plans is to compensate Putnam Retail Management, a wholly-owned
subsidiary of Putnam, LLC and Putnam Retail Management GP, Inc., for
services provided and expenses incurred in distributing shares of the
funds. The Plans provide for payments by each fund to Putnam Retail
Management at an annual rate of up to 0.35%, 1.00%, 1.00%, 1.00% and
1.00% of the average net assets attributable to class A, class B, class
C, class M and class R shares, respectively. The Trustees have approved
payments on class A, class M and class R shares to 0.25%, 0.75% and
0.50% of average net assets, respectively.
For the period ended January 31, 2005, Putnam Retail Management, acting
as underwriter, received the following:
Class A Class M
Net Net
Commissions Commissions
- -----------------------------------------------------------------------
RetirementReady
2045 Fund $-- $--
2040 Fund -- --
2035 Fund -- --
2030 Fund 8 --
2025 Fund 20 --
2020 Fund -- --
2015 Fund -- --
2010 Fund -- --
Maturity Fund -- --
- -----------------------------------------------------------------------
A deferred sales charge of up to 1.00% and 0.65% is assessed on certain
redemptions of class A and class M shares, respectively. For the period
ended January 31, 2005, Putnam Management acting as underwriter,
received no monies on class A and class M redemptions, respectively.
Note 3
Purchases and sales of securities
During the period ended January 31, 2005, cost of purchases and proceeds
from sales of underlying Putnam funds were as follows:
Fund Purchases Sales
- ----------------------------------------------------------------
RetirementReady
2045 Fund $10,832,549 $685,240
2040 Fund 16,810,503 794,634
2035 Fund 36,220,262 1,682,939
2030 Fund 54,537,685 2,263,162
2025 Fund 94,197,745 3,622,368
2020 Fund 104,903,845 4,206,445
2015 Fund 123,246,288 6,364,817
2010 Fund 81,426,766 4,377,885
Maturity Fund 46,455,813 3,150,562
- ----------------------------------------------------------------
Note 4
Capital shares
At January 31, 2005, there was an unlimited number of shares of
beneficial interest authorized. Transactions in capital shares were as
follows:
RetirementReady 2045 Fund
For the period November 1, 2004
(commencement of operations) to
January 31, 2005
- ----------------------------------------------------------------
Class A Shares Amount
- ----------------------------------------------------------------
Shares sold 76,859 $5,032,024
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions 386 26,219
- ----------------------------------------------------------------
77,245 5,058,243
Shares repurchased (3,037) (202,919)
- ----------------------------------------------------------------
Net increase 74,208 $4,855,324
- ----------------------------------------------------------------
Class B
- ----------------------------------------------------------------
Shares sold 29 $1,866
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions --* 8
- ----------------------------------------------------------------
29 1,874
Shares repurchased -- --
- ----------------------------------------------------------------
Net increase 29 $1,874
- ----------------------------------------------------------------
Class C
- ----------------------------------------------------------------
Shares sold 120 $7,894
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions --* 8
- ----------------------------------------------------------------
120 7,902
Shares repurchased -- --
- ----------------------------------------------------------------
Net increase 120 $7,902
- ----------------------------------------------------------------
Class M
- ----------------------------------------------------------------
Shares sold 93 $6,100
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions --* 9
- ----------------------------------------------------------------
93 6,109
Shares repurchased -- --
- ----------------------------------------------------------------
Net increase 93 $6,109
- ----------------------------------------------------------------
Class R
- ----------------------------------------------------------------
Shares sold 16 $1,000
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions --* 9
- ----------------------------------------------------------------
16 1,009
Shares repurchased -- --
- ----------------------------------------------------------------
Net increase 16 $1,009
- ----------------------------------------------------------------
Class Y
- ----------------------------------------------------------------
Shares sold 80,427 $5,673,827
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions 456 33,627
- ----------------------------------------------------------------
80,883 5,707,454
Shares repurchased (4,558) (330,399)
- ----------------------------------------------------------------
Net increase 76,325 $5,377,055
- ----------------------------------------------------------------
RetirementReady 2040 Fund
For the period November 1, 2004
(commencement of operations) to
January 31, 2005
- ----------------------------------------------------------------
Class A Shares Amount
- ----------------------------------------------------------------
Shares sold 117,239 $7,654,424
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions 595 40,513
- ----------------------------------------------------------------
117,834 7,694,937
Shares repurchased (5,306) (356,563)
- ----------------------------------------------------------------
Net increase 112,528 $7,338,374
- ----------------------------------------------------------------
Class B
- ----------------------------------------------------------------
Shares sold 361 $23,494
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions --* 7
- ----------------------------------------------------------------
361 23,501
Shares repurchased -- --
- ----------------------------------------------------------------
Net increase 361 $23,501
- ----------------------------------------------------------------
Class C
- ----------------------------------------------------------------
Shares sold 16 $1,000
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions --* 7
- ----------------------------------------------------------------
16 1,007
Shares repurchased -- --
- ----------------------------------------------------------------
Net increase 16 $1,007
- ----------------------------------------------------------------
Class M
- ----------------------------------------------------------------
Shares sold 123 $8,000
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions 1 48
- ----------------------------------------------------------------
124 8,048
Shares repurchased -- --
- ----------------------------------------------------------------
Net increase 124 $8,048
- ----------------------------------------------------------------
Class R
- ----------------------------------------------------------------
Shares sold 16 $1,000
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions --* 8
- ----------------------------------------------------------------
16 1,008
Shares repurchased -- --
- ----------------------------------------------------------------
Net increase 16 $1,008
- ----------------------------------------------------------------
Class Y
- ----------------------------------------------------------------
Shares sold 126,952 $8,958,099
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions 608 44,746
- ----------------------------------------------------------------
127,560 9,002,845
Shares repurchased (3,562) (257,017)
- ----------------------------------------------------------------
Net increase 123,998 $8,745,828
- ----------------------------------------------------------------
RetirementReady 2035 Fund
For the period November 1, 2004
(commencement of operations) to
January 31, 2005
- ----------------------------------------------------------------
Class A Shares Amount
- ----------------------------------------------------------------
Shares sold 223,757 $14,366,742
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions 1,059 70,868
- ----------------------------------------------------------------
224,816 14,437,610
Shares repurchased (9,937) (657,806)
- ----------------------------------------------------------------
Net increase 214,879 $13,779,804
- ----------------------------------------------------------------
Class B
- ----------------------------------------------------------------
Shares sold 214 $13,749
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions 1 86
- ----------------------------------------------------------------
215 13,835
Shares repurchased -- --
- ----------------------------------------------------------------
Net increase 215 $13,835
- ----------------------------------------------------------------
Class C
- ----------------------------------------------------------------
Shares sold 16 $1,000
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions --* 6
- ----------------------------------------------------------------
16 1,006
Shares repurchased -- --
- ----------------------------------------------------------------
Net increase 16 $1,006
- ----------------------------------------------------------------
Class M
- ----------------------------------------------------------------
Shares sold 179 $11,438
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions --* 21
- ----------------------------------------------------------------
179 11,459
Shares repurchased -- --
- ----------------------------------------------------------------
Net increase 179 $11,459
- ----------------------------------------------------------------
Class R
- ----------------------------------------------------------------
Shares sold 17 $1,000
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions --* 7
- ----------------------------------------------------------------
17 1,007
Shares repurchased -- --
- ----------------------------------------------------------------
Net increase 17 $1,007
- ----------------------------------------------------------------
Class Y
- ----------------------------------------------------------------
Shares sold 309,708 $21,495,101
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions 1,366 98,944
- ----------------------------------------------------------------
311,074 21,594,045
Shares repurchased (10,754) (764,458)
- ----------------------------------------------------------------
Net increase 300,320 $20,829,587
- ----------------------------------------------------------------
RetirementReady 2030 Fund
For the period November 1, 2004
(commencement of operations) to
January 31, 2005
- ----------------------------------------------------------------
Class A Shares Amount
- ----------------------------------------------------------------
Shares sold 315,801 $20,004,737
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions 1,483 98,122
- ----------------------------------------------------------------
317,284 20,102,859
Shares repurchased (17,566) (1,150,138)
- ----------------------------------------------------------------
Net increase 299,718 $18,952,721
- ----------------------------------------------------------------
Class B
- ----------------------------------------------------------------
Shares sold 779 $49,125
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions --* 6
- ----------------------------------------------------------------
779 49,131
Shares repurchased -- --
- ----------------------------------------------------------------
Net increase 779 $49,131
- ----------------------------------------------------------------
Class C
- ----------------------------------------------------------------
Shares sold 102 $6,502
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions --* 6
- ----------------------------------------------------------------
102 6,508
Shares repurchased -- --
- ----------------------------------------------------------------
Net increase 102 $6,508
- ----------------------------------------------------------------
Class M
- ----------------------------------------------------------------
Shares sold 445 $28,381
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions 1 19
- ----------------------------------------------------------------
446 28,400
Shares repurchased -- --
- ----------------------------------------------------------------
Net increase 446 $28,400
- ----------------------------------------------------------------
Class R
- ----------------------------------------------------------------
Shares sold 16 $1,000
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions --* 6
- ----------------------------------------------------------------
16 1,006
Shares repurchased -- --
- ----------------------------------------------------------------
Net increase 16 $1,006
- ----------------------------------------------------------------
Class Y
- ----------------------------------------------------------------
Shares sold 494,931 $33,905,872
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions 1,970 140,095
- ----------------------------------------------------------------
496,901 34,045,967
Shares repurchased (10,301) (720,175)
- ----------------------------------------------------------------
Net increase 486,600 $33,325,792
- ----------------------------------------------------------------
RetirementReady 2025 Fund
For the period November 1, 2004
(commencement of operations) to
January 31, 2005
- ----------------------------------------------------------------
Class A Shares Amount
- ----------------------------------------------------------------
Shares sold 508,043 $33,989,959
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions 2,245 156,581
- ----------------------------------------------------------------
510,288 34,146,540
Shares repurchased (18,679) (1,285,205)
- ----------------------------------------------------------------
Net increase 491,609 $32,861,335
- ----------------------------------------------------------------
Class B
- ----------------------------------------------------------------
Shares sold 911 $61,432
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions 1 79
- ----------------------------------------------------------------
912 61,511
Shares repurchased (96) (6,580)
- ----------------------------------------------------------------
Net increase 816 $54,931
- ----------------------------------------------------------------
Class C
- ----------------------------------------------------------------
Shares sold 327 $22,047
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions --* 5
- ----------------------------------------------------------------
327 22,052
Shares repurchased -- --
- ----------------------------------------------------------------
Net increase 327 $22,052
- ----------------------------------------------------------------
Class M
- ----------------------------------------------------------------
Shares sold 1,349 $90,523
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions 3 210
- ----------------------------------------------------------------
1,352 90,733
Shares repurchased -- --
- ----------------------------------------------------------------
Net increase 1,352 $90,733
- ----------------------------------------------------------------
Class R
- ----------------------------------------------------------------
Shares sold 16 $1,000
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions --* 6
- ----------------------------------------------------------------
16 1,006
Shares repurchased -- --
- ----------------------------------------------------------------
Net increase 16 $1,006
- ----------------------------------------------------------------
Class Y
- ----------------------------------------------------------------
Shares sold 879,676 $59,178,844
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions 3,473 242,685
- ----------------------------------------------------------------
883,149 59,421,529
Shares repurchased (26,167) (1,807,821)
- ----------------------------------------------------------------
Net increase 856,982 $57,613,708
- ----------------------------------------------------------------
RetirementReady 2020 Fund
For the period November 1, 2004
(commencement of operations) to
January 31, 2005
- ----------------------------------------------------------------
Class A Shares Amount
- ----------------------------------------------------------------
Shares sold 604,805 $37,297,780
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions 2,435 155,610
- ----------------------------------------------------------------
607,240 37,453,390
Shares repurchased (23,719) (1,493,332)
- ----------------------------------------------------------------
Net increase 583,521 $35,960,058
- ----------------------------------------------------------------
Class B
- ----------------------------------------------------------------
Shares sold 622 $38,709
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions 1 90
- ----------------------------------------------------------------
623 38,799
Shares repurchased (102) (6,336)
- ----------------------------------------------------------------
Net increase 521 $32,463
- ----------------------------------------------------------------
Class C
- ----------------------------------------------------------------
Shares sold 473 $29,652
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions --* 14
- ----------------------------------------------------------------
473 29,666
Shares repurchased -- --
- ----------------------------------------------------------------
Net increase 473 $29,666
- ----------------------------------------------------------------
Class M
- ----------------------------------------------------------------
Shares sold 2,453 $153,694
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions 2 151
- ----------------------------------------------------------------
2,455 153,845
Shares repurchased -- --
- ----------------------------------------------------------------
Net increase 2,455 $153,845
- ----------------------------------------------------------------
Class R
- ----------------------------------------------------------------
Shares sold 17 $1,000
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions --* 5
- ----------------------------------------------------------------
17 1,005
Shares repurchased -- --
- ----------------------------------------------------------------
Net increase 17 $1,005
- ----------------------------------------------------------------
Class Y
- ----------------------------------------------------------------
Shares sold 1,008,020 $66,498,249
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions 3,409 232,313
- ----------------------------------------------------------------
1,011,429 66,730,562
Shares repurchased (32,272) (2,164,323)
- ----------------------------------------------------------------
Net increase 979,157 $64,566,239
- ----------------------------------------------------------------
RetirementReady 2015 Fund
For the period November 1, 2004
(commencement of operations) to
January 31, 2005
- ----------------------------------------------------------------
Class A Shares Amount
- ----------------------------------------------------------------
Shares sold 638,445 $40,398,771
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions 2,324 151,730
- ----------------------------------------------------------------
640,769 40,550,501
Shares repurchased (24,864) (1,601,872)
- ----------------------------------------------------------------
Net increase 615,905 $38,948,629
- ----------------------------------------------------------------
Class B
- ----------------------------------------------------------------
Shares sold 105 $6,682
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions --* 23
- ----------------------------------------------------------------
105 6,705
Shares repurchased -- --
- ----------------------------------------------------------------
Net increase 105 $6,705
- ----------------------------------------------------------------
Class C
- ----------------------------------------------------------------
Shares sold 240 $15,382
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions --* 46
- ----------------------------------------------------------------
240 15,428
Shares repurchased -- --
- ----------------------------------------------------------------
Net increase 240 $15,428
- ----------------------------------------------------------------
Class M
- ----------------------------------------------------------------
Shares sold 1,155 $73,794
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions --* 71
- ----------------------------------------------------------------
1,115 73,865
Shares repurchased -- --
- ----------------------------------------------------------------
Net increase 1,155 $73,865
- ----------------------------------------------------------------
Class R
- ----------------------------------------------------------------
Shares sold 16 $1,000
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions --* 4
- ----------------------------------------------------------------
16 1,004
Shares repurchased -- --
- ----------------------------------------------------------------
Net increase 16 $1,004
- ----------------------------------------------------------------
Class Y
- ----------------------------------------------------------------
Shares sold 1,288,859 $81,642,179
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions 4,412 288,518
- ----------------------------------------------------------------
1,293,271 81,930,697
Shares repurchased (63,208) (4,086,721)
- ----------------------------------------------------------------
Net increase 1,230,063 $77,843,976
- ----------------------------------------------------------------
RetirementReady 2010 Fund
For the period November 1, 2004
(commencement of operations) to
January 31, 2005
- ----------------------------------------------------------------
Class A Shares Amount
- ----------------------------------------------------------------
Shares sold 533,484 $30,512,792
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions 1,730 100,806
- ----------------------------------------------------------------
535,214 30,613,598
Shares repurchased (25,360) (1,472,693)
- ----------------------------------------------------------------
Net increase 509,854 $29,140,905
- ----------------------------------------------------------------
Class B
- ----------------------------------------------------------------
Shares sold 1,253 $71,397
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions --* 9
- ----------------------------------------------------------------
1,253 71,406
Shares repurchased (112) (6,374)
- ----------------------------------------------------------------
Net increase 1,141 $65,032
- ----------------------------------------------------------------
Class C
- ----------------------------------------------------------------
Shares sold 82 $4,650
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions --* 5
- ----------------------------------------------------------------
82 4,655
Shares repurchased -- --
- ----------------------------------------------------------------
Net increase 82 $4,655
- ----------------------------------------------------------------
Class M
- ----------------------------------------------------------------
Shares sold 18 $1,000
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions --* 3
- ----------------------------------------------------------------
18 1,003
Shares repurchased -- --
- ----------------------------------------------------------------
Net increase 18 $1,003
- ----------------------------------------------------------------
Class R
- ----------------------------------------------------------------
Shares sold 18 $1,000
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions --* 3
- ----------------------------------------------------------------
18 1,003
Shares repurchased -- --
- ----------------------------------------------------------------
Net increase 18 $1,003
- ----------------------------------------------------------------
Class Y
- ----------------------------------------------------------------
Shares sold 840,518 $50,166,748
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions 2,210 134,208
- ----------------------------------------------------------------
842,728 50,300,956
Shares repurchased (40,742) (2,456,528)
- ----------------------------------------------------------------
Net increase 801,986 $47,844,428
- ----------------------------------------------------------------
RetirementReady Maturity Fund
For the period November 1, 2004
(commencement of operations) to
January 31, 2005
- ----------------------------------------------------------------
Class A Shares Amount
- ----------------------------------------------------------------
Shares sold 331,619 $18,655,878
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions 984 55,792
- ----------------------------------------------------------------
332,603 18,711,670
Shares repurchased (20,293) (1,151,864)
- ----------------------------------------------------------------
Net increase 312,310 $17,559,806
- ----------------------------------------------------------------
Class B
- ----------------------------------------------------------------
Shares sold 9 $525
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions 4 232
- ----------------------------------------------------------------
13 757
Shares repurchased -- --
- ----------------------------------------------------------------
Net increase 13 $757
- ----------------------------------------------------------------
Class C
- ----------------------------------------------------------------
Shares sold 18 $1,000
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions --* 2
- ----------------------------------------------------------------
18 1,002
Shares repurchased -- --
- ----------------------------------------------------------------
Net increase 18 $1,002
- ----------------------------------------------------------------
Class M
- ----------------------------------------------------------------
Shares sold 18 $1,000
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions --* 3
- ----------------------------------------------------------------
18 1,003
Shares repurchased -- --
- ----------------------------------------------------------------
Net increase 18 $1,003
- ----------------------------------------------------------------
Class R
- ----------------------------------------------------------------
Shares sold 18 $1,000
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions --* 4
- ----------------------------------------------------------------
18 1,004
Shares repurchased -- --
- ----------------------------------------------------------------
Net increase 18 $1,004
- ----------------------------------------------------------------
Class Y
- ----------------------------------------------------------------
Shares sold 483,121 $27,236,029
- ----------------------------------------------------------------
Shares issued in
connection with
reinvestment
of distributions 1,617 91,782
- ----------------------------------------------------------------
484,738 27,327,811
Shares repurchased (27,529) (1,563,733)
- ----------------------------------------------------------------
Net increase 457,209 $25,764,078
- ----------------------------------------------------------------
* Represents fractional shares issued in connection with
reinvestment of distributions.
Note 5
Initial capitalization and offering of shares
The Trust was established as a Massachusetts business trust on June 8,
2004. During the period June 8, 2004, to September 14, 2004, the Trust
had no operations other than those related to organizational matters,
including the initial capital contribution of $100,000 and the issuance
of 1,786 Putnam RetirementReady Maturity Fund class B shares to Putnam
LLC. The Trust commenced investment operations on November 1, 2004.
At January 31, 2005, Putnam LLC owned the following shares of each fund:
Percentage of Value at
Shares owned shares outstanding January 31, 2004
- ----------------------------------------------------------------------------
2045 Fund class B 16 55.2% $1,060
2045 Fund class C 16 13.3 1,060
2045 Fund class M 16 17.2 1,061
2045 Fund class R 16 100.0 1.062
2040 Fund class B 16 4.4 1,060
2040 Fund class C 16 100.0 1,060
2040 Fund class M 16 12.9 1,059
2040 Fund class R 16 100.0 1,061
2035 Fund class B 17 7.7 1.056
2035 Fund class C 16 100.0 1,056
2035 Fund class M 17 9.2 1,057
2035 Fund class R 17 100.0 1,057
2030 Fund class B 16 2.1 1,053
2030 Fund class C 16 16.2 1.053
2030 Fund class M 16 3.7 1.053
2030 Fund class R 16 100.0 1,054
2025 Fund class B 16 1.9 1,050
2025 Fund class C 16 4.8 1,050
2025 Fund class M 16 1.2 1,051
2025 Fund class R 16 100.0 1,051
2020 Fund class B 17 3.2 1,043
2020 Fund class C 17 3.5 1,043
2020 Fund class M 17 0.7 1,044
2020 Fund class R 17 100.0 1,045
2015 Fund class B 16 15.4 1,035
2015 Fund class C 16 6.8 1,035
2015 Fund class M 16 1.4 1,036
2015 Fund class R 16 100.0 1,037
2010 Fund class B 18 1.6 1.023
2010 Fund class C 18 21.8 1,023
2010 Fund class M 18 100.0 1,023
2010 Fund class R 18 100.0 1,024
Maturity Fund class B 1,786 99.3 101,320
Maturity Fund class C 18 100.0 1,015
Maturity Fund class M 18 100.0 1,016
Maturity Fund class R 18 100.0 1,017
- ----------------------------------------------------------------------------
Note 6
Regulatory matters and litigation
Putnam Management has entered into agreements with the Securities and
Exchange Commission and the Massachusetts Securities Division settling
charges connected with excessive short-term trading by Putnam employees
and, in the case of the charges brought by the Massachusetts Securities
Division, by participants in some Putnam-administered 401(k) plans.
Pursuant to these settlement agreements, Putnam Management will pay a
total of $193.5 million in penalties and restitution, with $153.5
million being paid to shareholders and the funds. The restitution amount
will be allocated to shareholders pursuant to a plan developed by an
independent consultant, with payments to shareholders currently expected
by the end of the summer.
The SEC's and Massachusetts Securities Division's allegations and
related matters also serve as the general basis for numerous lawsuits,
including purported class action lawsuits filed against Putnam
Management and certain related parties, including certain Putnam funds.
Putnam Management will bear any costs incurred by Putnam funds in
connection with these lawsuits. Putnam Management believes that the
likelihood that the pending private lawsuits and purported class action
lawsuits will have a material adverse financial impact on the fund is
remote, and the pending actions are not likely to materially affect its
ability to provide investment management services to its clients,
including the Putnam funds.
Brokerage commissions
(Unaudited)
Brokerage commissions are paid to firms that execute trades on behalf of
your mutual fund. When choosing these firms, Putnam is required by law
to seek the best execution of the trades, taking all relevant factors
into consideration, including expected quality of execution and
commission rate. The RetirementReady Funds, however, invest in shares of
other Putnam mutual funds, rather than in stocks and bonds. For that
reason, the funds do not incur brokerage charges.
Putnam puts your interests first
Beginning in January 2004, Putnam began introducing a number of
voluntary initiatives designed to reduce fund expenses, provide
investors with more useful information, and help safeguard the interests
of all Putnam investors. Visit www.putnaminvestments.com for details.
Cost-cutting initiatives
Reduced sales charges The maximum sales charge for class A shares has
been reduced to 5.25% for equity funds (formerly 5.75%) and 4.50% for
most income funds (formerly 4.75%).*
Lower class B purchase limit
To help ensure that investors are in the most cost-effective share
class, the maximum amount that can be invested in class B shares has
been reduced to $100,000. (Larger trades or accumulated amounts will be
directed to class A shares.)
Ongoing expenses will be limited
Through calendar 2005, total ongoing expenses, including management fees
for all funds, will be maintained at or below the average of each fund's
industry peers in its Lipper load-fund universe. For more information,
please see the Statement of Additional information.
Improved disclosure
Putnam fund prospectuses and shareholder reports have been revised to
disclose additional information that will help shareholders compare
funds and weigh their costs and risks along with their potential
benefits. Shareholders will find easy-to-understand information about
fund expense ratios, portfolio manager compensation, risk comparisons,
brokerage commissions, and employee and trustee ownership of Putnam
funds. Disclosure of breakpoint discounts has also been enhanced to
alert investors to potential cost savings.
Protecting investors' interests
Short-term trading fee introduced
To discourage short-term trading, which can interfere with a fund's
long-term strategy, a 2% short-term trading fee will be imposed on any
Putnam fund shares (other than money market funds) redeemed or exchanged
within five calendar days of purchase.
* The maximum sales charge for class A shares of Putnam Limited Duration
Government Income Fund (formerly Putnam Intermediate U.S. Government
Income Fund) and Putnam Floating Rate Income Fund remains 3.25%.
Fund information
One of the largest mutual fund families in the United States, Putnam
Investments has a heritage of investment leadership dating back to Judge
Samuel Putnam, whose Prudent Man Rule has defined fiduciary tradition
and practice since 1830. Founded over 65 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 presently manage
over 100 mutual funds in growth, value, blend, fixed income, and
international.
Investment Manager
Putnam Investment Management, LLC
One Post Office Square
Boston, MA 02109
Marketing Services
Putnam Retail Management
One Post Office Square
Boston, MA 02109
Custodian
Putnam Fiduciary Trust Company
Legal Counsel
Ropes & Gray LLP
Trustees
John A. Hill, Chairman
Jameson Adkins Baxter
Charles B. Curtis
Myra R. Drucker
Charles E. Haldeman, Jr.
Ronald J. Jackson
Paul L. Joskow
Elizabeth T. Kennan
John H. Mullin, III
Robert E. Patterson
George Putnam, III
W. Thomas Stephens
Richard B. Worley
Officers
George Putnam, III
President
Charles E. Porter
Executive Vice President,
Associate Treasurer and
Principal Executive Officer
Jonathan S. Horwitz
Senior Vice President and Treasurer
Steven D. Krichmar
Vice President and
Principal Financial Officer
Michael T. Healy
Assistant Treasurer and
Principal Accounting Officer
Daniel T. Gallagher
Vice President and Legal and
Compliance Liaison Officer
Beth S. Mazor
Vice President
James P. Pappas
Vice President
Richard S. Robie, III
Vice President
Mark C. Trenchard
Vice President and
BSA Compliance Officer
Francis J. McNamara, III
Vice President and
Chief Legal Officer
Charles A. Ruys de Perez
Vice President and
Chief Compliance Officer
Judith Cohen
Clerk and Assistant Treasurer
This report is for the information of shareholders of the Putnam
RetirementReady [REGISTRATION MARK] Funds. 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
www.putnaminvestments.com. Investors should carefully consider the
investment objective, risks, charges, and expenses of a fund, which are
described in its prospectus. For this and other information or to
request a 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.
[LOGO OMITTED]
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
PRSRT STD
U.S. POSTAGE PAID
PUTNAM
INVESTMENTS
Call 1-800-225-1581 or visit our Web site
www.putnaminvestments.com.
SA097-222383 3/05
Not FDIC Insured May Lose Value No Bank Guarantee
PUTNAM INVESTMENTS [SCALE LOGO OMITTED]
- ----------------------------------------------------------------------------
Putnam RetirementReady Funds
Supplement to Semiannual Report dated 1/31/05
The following information has been prepared to provide class Y shareholders
with information specific to their holdings. Class Y shares are offered
exclusively to clients that meet the eligibility requirements specified in
the fund's prospectus for such shares. The semiannual report covers the
first half of the funds' 2005 fiscal year, which is an abbreviated period
that extends from their inception on November 1, 2004, through January 31,
2005. Fund performance is not included in this initial report because the
funds do not yet have a full quarter of results. For the most recent
month-end performance, please visit www.putnaminvestments.com. 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. If
you have questions, please consult your fund prospectus or call Putnam toll
free at 1-800-752-9894. A short-term trading fee of up to 2% may apply.
- ----------------------------------------------------------------------------
Please see pages 8-11 of the accompanying shareholder report for a
discussion of the information appearing in the tables below:
- ----------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
RETIREMENTREADY FUNDS Maturity 2010 2015 2020 2025 2030 2035 2040 2045
Fund Fund Fund Fund Fund Fund Fund Fund Fund
- ---------------------------------------------------------------------------------------------------------------------------------
EXPENSES AND Expenses paid per $0.25 $0.26 $0.26 $0.26 $0.26 $0.26 $0.26 $0.26 $0.26
VALUE OF A $1,000*
$1,000
INVESTMENT
assuming actual Ending value
returns for the (after expenses) $1,017.90 $1,025.40 $1,037.60 $1,045.80 $1,052.60 $1,055.70 $1,059.00 $1,062.00 $1,063.10
6 months ended
1/31/05
- ---------------------------------------------------------------------------------------------------------------------------------
EXPENSES AND Expenses paid per $0.25 $0.25 $0.25 $0.25 $0.25 $0.25 $0.25 $0.25 $0.25
VALUE OF A $1,000*
$1,000
INVESTMENT
assuming a
hypothetical
5% annualized Ending value
return (after expenses) $1,012.35 $1,012.35 $1,012.35 $1,012.35 $1,012.35 $1,012.35 $1,012.35 $1,012.35 $1,012.35
for the
6 months
ended 1/31/05
- ---------------------------------------------------------------------------------------------------------------------------------
Your fund's 0.10% 0.10% 0.10% 0.10% 0.10% 0.10% 0.10% 0.10% 0.10%
annualized
expense ratio+
- ---------------------------------------------------------------------------------------------------------------------------------
* 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 net assets for the period from 11/1/04 to 1/31/05. 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. Expenses do not
reflect expenses of the underlying Putnam funds in which the funds invest.
+ During the period from 11/1/04 to 1/31/05, your fund limited its expenses;
had it not done so, expenses would have been higher.
Item 2. Code of Ethics:
- -----------------------
Not applicable
Item 3. Audit Committee Financial Expert:
- -----------------------------------------
Not applicable
Item 4. Principal Accountant Fees and Services:
- -----------------------------------------------
Not applicable
Item 5. Audit Committee: Not applicable
- -------------------------
Item 6. Schedule of Investments: Not applicable
- --------------------------------
Item 7. Disclosure of Proxy Voting Policies and Procedures For Closed-End
- -------------------------------------------------------------------------
Management Investment Companies: Not applicable
--------------------------------
Item 8. Purchases of Equity Securities by Closed-End Management Investment
- --------------------------------------------------------------------------
Companies and Affiliated Purchasers: Not applicable
------------------------------------
Item 9. Submission of Matters to a Vote of Security Holders:
- ------------------------------------------------------------
Not applicable
Item 10. Controls and Procedures:
- ---------------------------------
(a) The registrant's principal executive officer and principal
financial officer have concluded, based on their evaluation of the
effectiveness of the design and operation of the registrant's
disclosure controls and procedures as of a date within 90 days of
the filing date of this report, that the design and operation of
such procedures are generally effective to provide reasonable
assurance that information required to be disclosed by the registrant
in this report is recorded, processed, summarized and reported within
the time periods specified in the Commission's rules and forms.
(b) Changes in internal control over financial reporting:
Not applicable
Item 11. Exhibits:
- ------------------
(a) Not applicable
(b) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2
under the Investment Company Act of 1940, as amended, and the officer
certifications as required by Section 906 of the Sarbanes-Oxley Act
of 2002 are filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934
and the Investment Company Act of 1940, the registrant has duly
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
NAME OF REGISTRANT
By (Signature and Title): /s/Michael T. Healy
--------------------------
Michael T. Healy
Principal Accounting Officer
Date: March 28, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934
and the Investment Company Act of 1940, this report has been signed
below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.
By (Signature and Title): /s/Charles E. Porter
---------------------------
Charles E. Porter
Principal Executive Officer
Date: March 28, 2005
By (Signature and Title): /s/Steven D. Krichmar
---------------------------
Steven D. Krichmar
Principal Financial Officer
Date: March 28, 2005