1 Your guide to investing at Putnam
2 A BALANCED APPROACH Since 1937, when George Putnam created a diverse mix of stocks and bonds in a single, professionally managed portfolio, Putnam has championed the balanced approach. A WORLD OF INVESTING Today, we offer investors a world of equity, fixedincome, multi-asset, and absolute-return portfolios to suit a range of financial goals. A COMMITMENT TO EXCELLENCE Our portfolio managers seek superior results over time, backed by original, fundamental research on a global scale. We believe in the value of experienced financial advice, in providing exemplary service, and in putting clients first in all we do.
3 Dear Investor Welcome to Putnam Investments. Whether you are a first-time or seasoned investor, this guide will help you become more familiar with the Putnam family of funds and the many services available from Putnam. You will find the information you need to monitor and manage your investments as well as information about accessing your accounts online. We ve also included information on college savings, retirement, and tax-advantaged products to help you in your financial planning. As a winner of multiple DALBAR awards for service to investors, Putnam is committed to helping you make the most of your investments. We hope you find this guide useful, and we look forward to helping you pursue your financial goals. Respectfully yours, Robert L. Reynolds President and Chief Executive Officer Putnam Investments Jameson A. Baxter Chair, Board of Trustees
4 section 1 What you need to know about your investment section 2 Managing your mutual funds section 3 Funds and other products section 4 Other useful information 2
6 section 1 What you need to know about your investment Mutual fund benefits 5 Your fund s Board of Trustees 7 The value of your financial representative 8 Types of mutual fund ownership 9 Share classes and expenses 10 Reducing your sales charge 11 Mutual fund share prices 12 Managing distributions 13 Measuring performance 14 4
7 Mutual fund benefits A mutual fund is a diversified, professionally managed portfolio of securities, and most funds include stock and bond holdings in dozens sometimes hundreds of different companies. When you invest in a mutual fund, you re buying shares in a multimillion-dollar portfolio. 5
8 Mutual fund benefits Professional management A key advantage of mutual funds is professional management of your investment. Portfolio managers of Putnam funds constantly manage and monitor the funds, conduct extensive research, select appropriate investments, and decide when to buy and sell fund holdings. The managers are supported by research analysts, economists, and industry specialists who analyze companies, regions, sectors, and market conditions around the world. Diversification The mutual fund shares you own are pooled with those of many other investors, which can help you take advantage of more opportunities than you could on your own. Mutual funds spread your money across a number of different stocks or bonds, which is an important strategy because your return isn t dependent on any single investment. Access to your money While mutual funds are designed for long-term investing, they also offer the advantage of liquidity, which means you can access your money on any business day. For more information, see How to sell shares on page 26. Flexibility to move to another fund In most cases, you can move your money from one Putnam fund to another without paying a sales charge. You can make exchanges online at putnam.com, by calling , or by mail. Be sure to read each fund s prospectus before exchanging. There may be tax consequences when you exchange shares. 6 For more information or for a password to access your account, visit our website at putnam.com.
9 Your fund s Board of Trustees Every Putnam mutual fund is monitored by a Board of Trustees, which is responsible for protecting your interests as a fund shareholder. The Trustees duties include general oversight of each fund s business, reviewing each fund s investment performance, and overseeing the quality of other services such as administration, custody, and investor services. At least annually, the Trustees review the fees and operating expenses paid by your fund to Putnam Management and its affiliates, and negotiate changes that they deem appropriate. In carrying out their responsibilities, the Trustees are assisted by an independent administrative staff and by auditors and legal counsel, which are selected by the Trustees and are independent of Putnam Management and its affiliates. Electing your fund s Trustees As a shareholder, you have an opportunity to elect your fund s Trustees. Each Putnam fund has committed to elect Trustees every five years, beginning in Under SEC requirements, at least 75% of a fund s Trustees must be independent, which means that they are not affiliated with Putnam Investments. 7
10 The value of your financial representative Expertise and guidance In a world of rapidly changing markets and thousands of mutual funds from which to choose a full-service financial representative is an invaluable resource for investors. A financial representative can help you narrow your investment options to those that are most suited to you. Even the most experienced investors benefit from the comprehensive research, timely information, and expertise that a financial professional can provide. An important partnership Whether you re starting a new job, beginning a family, saving for college, or planning for retirement, you ll want investments that will grow and build wealth over time. A partnership with a full-service financial representative can help you determine your objectives, evaluate your risk tolerance, and create a long-term financial plan to help you pursue your goals. A valuable partnership Consult with your financial representative to Determine your goals: Evaluate your risk tolerance: Narrow your investment options: Monitor your long-term financial plan Save for college Plan for retirement Buy a new home Aggressive Moderate Conservative Mutual funds 529 college savings plans Retirement savings plans 8
11 Types of mutual fund ownership Mutual fund ownership takes many forms. Talk to your financial representative about which ownership option is best for you. Individual ownership The most common type of ownership, individual ownership is available to any U.S. person 18 or older. Joint account Two or more U.S. persons may own an account together. Registration options are: Rights of survivorship Tenants in common Tenants by entirety Custodial account You may open this type of account for a minor without having to name a legal guardian or establish a trust. Business ownership Companies may take advantage of mutual funds to invest their savings or their employee retirement plans. Questions? Contact your financial representative or call Putnam at
12 Share classes and expenses As an investor, you should know about a fund s share classes, fees and expenses, and ways to reduce the sales charges you pay on your investment. As always, you should work with your financial representative to determine appropriate investment choices. Share classes While all investors in a mutual fund own shares in the same portfolio, you will pay different sales charges and expenses depending on the share class you own. All Putnam mutual funds are available in different share classes, including the most common: class A, class B, class C, and class M. Putnam also offers class R, class T, and class Y shares for some funds. Class A and class M shares have a front-end load, meaning their price includes a sales charge. Class B shares have no front-end load, but may charge a fee if you sell them within a predetermined length of time. Class C shares have no sales charge unless you redeem them within the first year. Class B, C, and M shares have higher expenses than class A shares. Sales charges Sales charges pay for the services of your financial representative. The initial sales charge, also known as a front-end load, is paid when you purchase your fund shares. The contingent deferred sales charge, or CDSC, is paid if you sell your shares within a defined period. The type and level of sales charges you pay depends on the share class you choose and the amount of your investment. Expenses Expenses, deducted from your fund s returns annually, pay for investâ ment advisory services, administration, and, for most share classes, 12b-1 fees, which cover the marketing and distribution of the fund to new investors. Putnam is committed to keeping the expenses of every fund below the average expenses of front-end load funds in its peer group. 10
13 Reducing your sales charge Letter of intent To reduce your sales charge, you agree to invest a minimum dollar amount over 13 months. You will pay the initial sales charge applicable to the total amount you have agreed to purchase. However, the maximum amount that can be invested in class B shares is $100,000. Class B trades that would cause linked accounts to attain $100,000 or more will be refused until you and your representative determine a more appropriate class of shares. Whenever you make an investment under this arrangement, you or your financial representative should notify Putnam that a letter of intent is in effect. Please refer to the prospectus. Cumulative discount You can combine the value of your new investment with that of your existing Putnam accounts; once you reach certain investment levels, you qualify for a reduced sales charge. You or your financial representative should inform Putnam of any existing accounts when you make a new investment. Breakpoint discounts If you choose class A or class M shares, you can reduce your sales charges with breakpoint discounts, which offer lower charges for larger investments. To help you qualify for these discounts, Putnam offers several methods for aggregating investments made by you and your family members. Breakpoint discounts for class A shares Equity fund sales charge Absolute Return 500/700 Funds sales charge Tax-free and taxable income fund sales charge Absolute Return 100/300, Floating Rate Income, Short-Term Municipal Income Funds sales charge Less than $50, % 5.75% 4.00% 1.00% $50,000 to $99, % 4.50% 4.00% 1.00% $100,000 to $249, % 3.50% 3.25% 1.00% $250,000 to $499, % 2.50% 2.50% 1.00% $500,000 to $999, % No sales charge No sales charge No sales charge $1,000,000 No sales charge No sales charge No sales charge No sales charge 11
14 Mutual fund share prices NAV (net asset value) NAV, or net asset value, is the basic value, or price, of one share of a mutual fund, without a sales charge. Stock funds seek to raise the NAV, representing growth in the value of an investment. NAV is calculated at the end of each business day the New York Stock Exchange is open by adding the value of all the individual securities in the fund, and then subtracting its liabilities. This number is then divided by the number of shares outstanding to determine the fund s NAV. This is the price that is posted daily in the newspaper and on Putnam s website. Just as the prices of individual securities fluctuate, a fund s NAV changes with market conditions. You can seek to take advantage of these fluctuations to lower your average price per share. This strategy is called dollar cost averaging (see page 29). Share price fluctuates daily Daily NAV (net asset value) of a hypothetical mutual fund $10.60 $10.50 $10.51 $10.45 $10.46 Mon Tue Wed Thu Fri Since it is common for a fund s NAV to fluctuate, many financial experts believe a 5- to 10-year horizon is a better indicator of how a fund has performed under various economic conditions. 12
15 Managing distributions Dividend distributions When funds earn income, it is paid to you and other shareholders in the form of dividend distributions. You can choose to receive dividends or to reinvest them in the fund to purchase more shares. To find out how often dividends are distributed for your fund, refer to the prospectus or our family of funds listing (see pages 35 37). Income can be paid to you Fund shares are purchased Some funds earn income Income can be reinvested Capital gains distributions When securities in your fund are sold at a profit, the profit can be paid to you and the other shareholders in the form of capital gains distributions. Unless you have chosen to receive these distributions in cash, they are automatically reinvested in your fund. You may also choose to have the distributions from one of your Putnam funds automatically reinvested in another of your Putnam funds at no additional charge (see page 28). For more information, ask your financial representative about Putnam s dividend plan. Questions? Contact your financial representative or call Putnam at
16 Measuring performance Daily prices One way to monitor your investment is to check its daily price, which is the value of one share of the fund. Putnam s website and other financial sites provide daily prices for all Putnam funds as of the last market close. You can also review the financial section of your daily newspaper. However, monitoring daily prices focuses only on short-term movements; it does not provide a long-term perspective. For investors seeking long-term growth, the best measure of a fund s performance is its total return. Moreover, you should always remember that past performance does not indicate future results. Total return This is a measure of performance that shows the change in the value of an investment over a given period of time and assumes that all earnings are reinvested in the fund to purchase additional shares. Your financial representative can provide you with your fund s 1-, 5-, and 10-year total returns, or you can access this information on Putnam s website, putnam.com, and in your fund s historical annual and semiannual reports. What is total return? This is a measure of performance that shows the change in the value of an investment over a given period of time. Initial investment minus sales charge Fund appreciation Reinvested income Total return There is always the risk that you may lose money with your investment. Investment return and principal value will fluctuate. Shares, when redeemed, may be worth more or less than their original cost. 14
17 section 2 Managing your mutual funds Monitoring your fund performance 16 Accessing your account online 18 Communications you will receive 20 How to read your Putnam statement 22 How to buy shares 24 How to sell shares 26 Putnam features and services 28 How to make account changes 30 15
18 Monitoring your fund performance Many newspapers and financial websites report mutual fund performance in the form of daily prices and year-to-date total returns. It is important to note that prices are often shown at NAV, which represents the value of one share of the fund, without a sales charge. Putnam funds are sold through financial representatives at the POP (public offering price), which is the NAV plus any applicable sales charge. You can obtain price and return information at POP on Putnam s website in the Individual Investors section or from your financial representative. You can monitor the daily performance of your Putnam funds in the financial section of many daily newspapers and on the web. 16 For more information or for a password to access your account, visit our website at putnam.com.
19 Putnam Abs Return 100;A Abs Return 100;B Abs Return 100;C Abs Return 300;A Abs Return 300;B Abs Return 300;C American Govt;A American Govt;B Asst:Dyn AAB;A Asst:Dyn AAB;B Asst:Dyn AAB;C Asst:Dyn AAC;A Asst:Dyn AAC;B AZ TxEx Inc;A CA TxEx Inc;A CA TxEx Inc;B CA TxEx Inc;C Cap Opps;A Cap Opps;B Cap Opps;C Cap Spectrum;A Cap Spectrum;B Cap Spectrum;C Conv Sec;A Conv Sec;B Dvsfd Income;A Dvsfd Income;B Equity Income;A Equity Income;B Equity Spectrum;A Equity Spectrum;B Equity Spectrum;C Fund s abbreviated name If you have any questions about how a particular fund is listed, please contact Putnam or your financial representative. Share class The letter indicates the share class. For more information on share classes, see page 10. Fund s daily NAV This is the value of one share of the fund, without the sales charge, as of the previous day s market close. NAV change This indicates the change in your fund s share price. Year-to-date total return See page 14 for more information. Can t find your fund? Some newspapers do not list funds with lower asset levels. If your fund is not listed, consult with your financial representative or check Putnam s website for performance information. 17
20 Accessing your account online A secure section of Putnam s website provides daily updates of your account information and allows you to conduct account transactions. To gain secure online access, go to the Individual Investors section of putnam.com and select Need a password? Investor logon Enter your User ID and password here to access your personal account information Individual Investors home page 18 Putnam perspectives Get the latest news on the economy and the markets from Putnam fund managers Investor resources Get the most-requested forms, important tax information, and helpful education
21 Your mutual fund account information View or print a copy of your latest quarterly statement, make investments or exchanges, or make changes to your account options Daily statements View your account balances, account activity, and the history of your investment in each fund, as of the previous day s market close My Accounts page Change mailing options To reduce the amount of paper you receive, use this link to eliminate the mailing of your quarterly statements and fund reports Online transactions Make additional investments to your account, conduct exchanges, or change your account options Tax information center View or print copies of your tax forms and access information that will help you complete your tax return 19
22 Communications you will receive During the year, Putnam will keep you informed about the status of your funds. If you want to reduce the amount of mail you receive, you can elect to access your quarterly statements and fund reports electronically. To eliminate mailings, log on to Putnam s Individual Investors website and click on the Go paperless link, or select Mailing options under the My Accounts tab. Type of communication Confirmations and quarterly statements Annual and semiannual shareholder reports Prospectus Proxy Form 1099-DIV Form 1099-B Form 1099-R Form 1099-Q Form 1042S When it is mailed Following most transactions, as well as quarterly 60 days after the end of the fund s fiscal year (annual) and 60 days after the fund s fiscal midyear (semiannual) Updates mailed annually; supplements mailed when additional shares are purchased. As needed Mid to late January Mid to late January Mid to late January Mid to late January Mid March Form 5498 Mid to late January (then again in May if another contribution is made) 20
23 SUE SMITH 123 MAIN STREET NEW YORK, NY YOUR PORTFOLIO VALUE as of 12/31/2014 Current quarter Year to date Beginning value $160, $160, Additions (+) Withdrawals (-) Change in value (+/-) $5, $5, Ending value $166, SUMMARY OF ACCOUNTS (10/1/ /31/2014) (1/1/ /31/2014) YOUR PORTFOLIO HISTORY CONTACT INFORMATION INVESTMENTS: ACCOUNT: Mr. Alan B. Smith Putnam Investments ABC Brokerage putnam.com $180,000 $160,935 $161,588 $163,224 $164,114 $166,234 $144,000 $108,000 $72,000 $36,000 $0 12/31/13 3/31/14 6/30/14 9/30/14 12/31/14 Account Beginning value Additions/ Change in Ending value Name number (1/1/14) withdrawals value (+/-) (12/31/14) Sue Smith Joint $87, $0.00 $2, $89, Non-retirement account subtotal $87, $0.00 $2, $89, Sue Smith Roth IRA Conversion $15, $0.00 $1, $16, Sue Smith Roth IRA $8, $0.00 $80.53 $8, Sue Smith IRA $50, $0.00 $2, $52, Retirement account subtotal $73, $0.00 $3, $76, Value of Putnam portfolio $160, $0.00 $5, $166, Visit putnamperspectives.com for insight and analysis on events making news and creating opportunities. Watch videos, read commentary, and join the conversation. If you have a mobile device with the Microsoft tag application (available at gettag.mobi), scan this code to go directly to the web page. This is a summary of your year-to-date statement. Additional details are available at the secure account section of putnam.com. From account updates to shareholder reports and detailed tax information, Putnam keeps you informed with regular mailings ANNUAL STATEMENT 1/1/ /31/2014 FUND SYMBOLS CLASS A CLASS B CLASS C CLASS M CLASS R CLASS R5 CLASS R6 CLASS Y Putnam International Equity Fund Summary prospectus POVSX POVBX PIGCX POVMX PIERX POVDX POVEX POVYX PUT_1410_841_SUM 009_XXXXXX Build: 1 Rev. 0 15:10, 10/24/14 Purpose Reports purchases, sales, distributions, and other transactions Reports fund performance and financial data Describes the fund s investment strategy and provides key financial data Notifies shareholders that an important fund issue needs to be voted on Reports tax status of fund s distributions as reported to the IRS Reports proceeds from sales of fund shares as reported to the IRS Reports taxable income reported on tax returns Reports payments from qualified education programs Reports gross income paid and taxes withheld for nonresident aliens Reports contributions to your IRA and provides account s year-end market value Tax use Provides information for determining cost basis on sale of shares to compute gain or loss Provides information on fund s distributions and may include other midyear (semiannual) useful tax information Provides basic tax information Does not apply Shows amounts that must be reported on tax returns Shows amounts that must be reported on tax returns Shows amounts that may be reportable distributions from retirement plans Shows amounts that must be reported on tax returns Shows foreign residents U.S. source of income subject to withholding Verifies IRA contributions and provides information for computing deductible and nondeductible percentages 21
24 How to read your Putnam statement If you want to reduce paper, you can elect to access your statement electronically. To eliminate the mailing of your statement, log on to Putnam s Individual Investors website and click on the Go paperless link, or select Mailing options under the My Accounts tab. Account summary History Charts the change in value of your Putnam portfolio SUE SMITH 123 MAIN STREET NEW YORK, NY ANNUAL STATEMENT 1/1/ /31/2014 CONTACT INFORMATION INVESTMENTS: ACCOUNT: Mr. Alan B. Smith Putnam Investments ABC Brokerage putnam.com Portfolio snapshot Shows the total value of all your Putnam accounts YOUR PORTFOLIO VALUE as of 12/31/2014 Current quarter Year to date (10/1/ /31/2014) (1/1/ /31/2014) Beginning value $160, $160, YOUR PORTFOLIO HISTORY $180,000 $160,935 $161,588 $163,224 $144,000 $164,114 $166,234 Additions (+) $108,000 Account summary Shows recent activity and changes in value by account Withdrawals (-) $72,000 Change in value (+/-) $5, $5, $36,000 Ending value $166, $0 12/31/13 3/31/14 6/30/14 9/30/14 12/31/14 SUMMARY OF ACCOUNTS Account Beginning value Additions/ Change in Ending value Name number (1/1/14) withdrawals value (+/-) (12/31/14) Sue Smith Joint $87, $0.00 $2, $89, Non-retirement account subtotal $87, $0.00 $2, $89, Updates from Putnam Scan this code to go to Putnam s website for news and information Sue Smith Roth IRA Conversion $15, $0.00 $1, $16, Sue Smith Roth IRA $8, $0.00 $80.53 $8, Sue Smith IRA $50, $0.00 $2, $52, Retirement account subtotal $73, $0.00 $3, $76, Value of Putnam portfolio $160, $0.00 $5, $166, Visit putnamperspectives.com for insight and analysis on events making news and creating opportunities. Watch videos, read commentary, and join the conversation. If you have a mobile device with the Microsoft tag application (available at gettag.mobi), scan this code to go directly to the web page. Details when you need them Complete account information is always available at putnam.com This is a summary of your year-to-date statement. Additional details are available at the secure account section of putnam.com. 22
25 SUE SMITH 2014 ANNUAL STATEMENT 1/1/ /31/2014 Summary of your Putnam accounts INVESTMENT ACCOUNTS Exchanges Change Ending balance Beginning balance Fund name (as of 1/1/2014) Asset Capital allocation$ 5, Additions in/out Withdrawals in value (as of 12/31/2014) $ $ 0.00 $ 0.00 $ $ 5, Opportunities A Equity Income A 2, , Global Equity A 5, , YEAR-TO-DATE STATEMENT $ $1, $22, /1/ /31/2014 Total year to date $20, $1, $ 0.00 Total this quarter $20, $1, $ 0.00 $ $1, $22, SUE ALLOCATION SMITH OF YOUR ACCOUNTS BY FUND AND INVESTMENT STYLE 2014 ANNUAL STATEMENT 1/1/ /31/2014 Allocation by Putnam fund Allocation by investment style Summary of your Putnam 28% accounts Putnam Global Equity Fund 54% Blend $12, % Putnam Money Market Fund 35% Income $8, INVESTMENT ACCOUNTS 26% Putnam Capital Opportunities Fund 10% Value $2, % Putnam Equity Income Fund 1% Growth $ Beginning 7% balance Putnam Income Fund Exchanges Ending balance $0.00 0% Change Growth Fund name (as of Withdrawals in value (as of 12/31/2014) 1/1/2014) 1% Putnam Growth Additions Opportunities Fundin/out 37% of portfolio invested internationally/ Capital $ 5, $ $ 0.00 $ 0.00 $ $ 5, globally Opportunities A Equity Income A 2, , Global ACCOUNT Equity A ACTIVITY5, , Total PUTNAM year to GLOBAL date EQUITY $20, FUND $1, Account $ 0.00 income $ This $1, quarter Year-to-date $22, Total this quarter $20, $1, $ 0.00 $ $1, $22, Dividends (reinvest) $0.00 $0.00 Account number: A BBBC Account open date: 8/15/1993 ALLOCATION OF YOUR ACCOUNTS BY FUND Capital AND gains INVESTMENT (reinvest) STYLE $0.00 $0.00 SUE SMITH Allocation by Putnam fund 28% Putnam Global Equity Fund Detailed transaction history 28% Putnam Money Market Fund Cost basis method Type Value Allocation by investment style Average cost Uncovered* $ % Blend $12, * Uncovered refers to securities acquired 35% prior Income to 1/1/2012 $8, % Putnam Capital Opportunities Fund 10% Value $2, Number of activity 10% detail Putnam Equity Income Fund Amount shares1% Share Growth balance Total $ value Date Account Share price 7% Putnam Income Fund 0% Growth $ $5, % of ANNUAL portfolio invested STATEMENT internationally/ 1/1/2014 Beginning balance $ % Putnam Growth Opportunities Fund globally 1/1/ /31/2014 1/2/2014 Investment-systematic $ /1/2014 Investment-systematic /1/2014 Investment-systematic ACCOUNT ACTIVITY 7/1/2014 Investment-systematic /1/2014 Investment-systematic by check PUTNAM GLOBAL EQUITY FUND Account income This quarter Year-to-date /29/2014 Exchange Dividends (reinvest) $0.00 $0.00 Account number: A BBBC 12/31/2014 Ending balance $ $6, Account open date: 8/15/1993 Capital gains (reinvest) $0.00 $0.00 SUE SMITH Cost basis method Type Value Average cost Uncovered* $ * Uncovered refers to securities acquired prior to 1/1/2012 Page 2 of 3 Number of shares Date Account activity detail Amount Share price Share balance Total value 1/1/2014 Beginning balance $ $5, /2/2014 Investment-systematic $ /1/2014 Investment-systematic /1/2014 Investment-systematic /1/2014 Investment-systematic /1/2014 Investment-systematic by check /29/2014 Exchange /31/2014 Ending balance $ $6, Asset allocation Pie charts show the makeup of your portâfolio by individual fund and by investment style Activity detail Your year-to-date transaction history Page 2 of 3 Fund performance history SUE SMITH ANNUAL STATEMENT 1/1/ /31/2014 FUND INVESTMENT PERFORMANCE 1 year 5 years annualized 10 years annualized NAV POP NAV POP Fund name Fund inception date NAV POP Putnam Capital Opportunities Fund A 6/1/ % 25.93% 22.21% 20.77% 9.35% 8.71% Putnam Equity Income Fund A 6/5/ % 24.06% 17.91% 16.52% 8.64% 8.00% Putnam Global Equity Fund A 2/7/ % 24.08% 16.41% 15.04% 6.79% 6.16% Putnam Growth Opportunities Fund B 10/2/ % 30.58% 19.83% 19.63% 6.59% 6.59% Putnam Income Fund A 11/1/ % -2.02% 13.31% 12.39% 5.70% 5.27% Putnam Money Market Fund B 10/1/ % -4.99% 0.04% -0.37% 1.36% 1.36% Fund investment performance Detailed performance history for each fund If N/A appears in any box, performance information was not available at the time this statement was produced, or the fund has not been in operation long enough for performance to be reported. See reverse for information on performance. 23