Putnam Absolute Return Funds

No Bank Guarantee May Lose Value Not FDIC Insured

Since 1937, when George Putnam created a prudent mix of stocks and bonds in a single, professionally managed portfolio, Putnam has championed the wisdom of the balanced approach.

Today, Putnam offers a world of equity, fixed-income, multi-asset, and absolute-return portfolios so investors can pursue a range of financial goals.

EO093 256005 3/09 |

In 2008, market volatility changed how we look at investing

Investors will likely demand new solutions that can pursue positive returns with less volatility over time

Putnam is responding with a suite of Absolute Return Funds for all kinds of investors

A nearly unprecedented reversal * Annualized return. U.S. stock performance is measured by the S&P 500 Index; international stock performance by the Morgan Stanley Capital International (MSCI) EAFE Index; high-yield bonds by the JPMorgan Global High Yield Index; investment-grade bonds by the Barclays Capital Credit Index; and home prices by S&P/Case Shiller Home Price Index. You cannot invest directly in an index. Past performance is not indicative of future results. Source: Putnam Investments. Widespread declines, 2007–2008 * 2007 2008

Volatility harms wealth accumulation * Average of yearly returns for the 15-year period. The example is for illustrative purpose only and does not reflect average annualized returns or the performance of any Putnam fund, which will fluctuate. Consistent performance is illustrative of Ibbotson U.S. Long-Term Government Bond Total Return Index. Volatile performance is illustrative of Goldman Sachs Commodities Index. You cannot invest directly in an index. Note that the reverse could be true and a more volatile investment may result in outcomes favorable to investors. Years Growth of a $100,000 initial investment $100,000 -8% +32% -1% +16% +13% -9% +21% +4% +18% +1% +9% +8% +1% +10% +24% +5% +20% +34% -14% -36% +41% +50% -32% +32% +21% +17% +26% -15% +33% -46% 9% return* $348,805 Consistent performance 9% return* $192,111 Volatile performance

Is cash the answer?

Low-return investments take years to grow

This hypothetical illustration is based on mathematical principles and assumes monthly compounding. It is not meant as a forecast of future events or as a statement that prior markets may be duplicated. Recovery periods are rounded to the nearest quarter of a year. Years to recover 11.50 6.00 1.75 6% 7.00 3.50 1.00 10% Size of market downturn 34.75 years 17.75 years 5.25 years 2% -10% -50% -30% Investor’s rate of return

Stay diversified, because markets are unpredictable Source: Putnam Investments. Past performance is not indicative of future results. In these illustrations, stocks are represented by the Ibbotson S&P 500 Total Return Index, bonds are represented by a 50/50 blend of the Ibbotson U.S. Long-term Corporate Bond Index and the Ibbotson U.S. Intermediate-term Government Total Return Index, and cash is represented by the Ibbotson U.S. 30-day T-bill Total Return Index. All indexes are unmanaged and measure common sectors of the stock and bond markets. Index performance does not reflect fees or expenses. You cannot invest directly in an index. Market performance during selected bull and bear periods BEAR 1999 –2002 BULL 1996 –1999 BULL 1983 –1986 BEAR 1971 –1974

Can a mutual fund seek positive returns with less volatility?

Absolutely. Putnam Absolute Return Funds Putnam Absolute Return 700 Fund Putnam Absolute Return 500 Fund Putnam Absolute Return 300 Fund Putnam Absolute Return 100 Fund

What is absolute return investing? Seeks positive returns in good markets and bad Free to “go anywhere” — invest across sectors and markets Risk = negative returns Success = positive returns Absolute Return Limited to invest in one market or one type of security Risk = lagging the market Success = beating market Traditional strategy

Flexible to invest in many assets As of 12/31/08. Source: Putnam Investments. Past performance is not indicative of future results. In this illustration, T-bills are represented by the Merrill Lynch U.S. 3-month Treasury Bill Index; international bonds by the Barclays Capital Global Aggregate Bond ex-U.S. Index; global high-yield bonds by the J.P. Morgan Developed High Yield Index; emerging-market bonds by the J.P. Morgan Emerging Markets Bond Global Diversified Index; TIPS (Treasury Inflation-Protected Securities) by the Barclays Capital Real U.S. TIPS Index; U.S. stocks by the S&P 500 Index; international stocks by the MSCI World ex-U.S. Index; emerging-market stocks by the MSCI Emerging Markets Index; commodities by the Goldman Sachs Commodities Index; U.S. bonds by the Barclays Capital Aggregate Bond Index; REITs by the Morgan Stanley REIT Index; and bank loans by the S&P LSTA Leveraged Loan Index. All indexes are unmanaged and measure common sectors of the stock and bond markets. Index performance does not reflect fees or expenses. You cannot invest directly in an index. Please see slide 19 for more information on risks. Traditional asset classes Modern asset classes EM stocks Commodities Intl stocks REITs U.S. stocks Bank loans Global HY bonds EM bonds TIPS T-bills Intl bonds U.S. bonds 2008 REITs Bank loans Global HY bonds T-bills U.S. stocks EM bonds U.S. bonds Intl bonds TIPS Intl stocks Commodities EM stocks 2007 Commodities TIPS U.S. bonds T-bills Bank loans Intl bonds EM bonds Global HY bonds U.S. stocks Intl stocks EM stocks REITs 2006 Intl bonds U.S. bonds Global HY bonds TIPS T-bills U.S. stocks Bank loans EM bonds REITs Intl stocks Commodities EM stocks 2005 T-bills U.S. bonds Bank loans TIPS U.S. stocks Global HY bonds EM bonds Intl bonds Commodities Intl stocks EM stocks REITs 2004 2003 2002 2001 2000 1999 T-bills U.S. stocks Commodities EM stocks Intl bonds U.S. bonds Intl stocks Intl stocks Intl stocks REITs TIPS EM stocks U.S. stocks U.S. stocks U.S. bonds Bank loans T-bills Intl bonds Global HY bonds Global HY bonds Intl bonds Bank loans EM stocks Intl bonds TIPS Commodities Global HY bonds Bank loans Bank loans Bank loans EM bonds REITs T-bills T-bills T-bills Global HY bonds U.S. bonds Global HY bonds U.S. bonds EM bonds U.S. stocks EM bonds TIPS EM bonds U.S. stocks REITs TIPS U.S. bonds TIPS Intl stocks Intl stocks Intl bonds EM bonds REITs Commodities EM stocks Commodities REITs Commodities EM stocks

How Putnam manages absolute return 4 Experienced management 5 Shareholder -friendly fee structure 3 Ultimate flexibility 2 Progressive risk management 1 Wide range of global securities

Four absolute return choices with innovative return targets Each fund seeks to earn a positive total return that exceeds the rate of inflation by a targeted amount over a reasonable period of time regardless of market conditions. For illustrative purposes only. Does not represent actual holdings or strategies of any Putnam fund or product. There can be no assurance that a fund will meet its objective. The funds are not intended to outperform stocks and bonds during strong market rallies. +3% Putnam Absolute Return 300 Fund +5% Putnam Absolute Return 500 Fund +7% Putnam Absolute Return 700 Fund Target return above T-Bills Each fund seeks to outperform inflation as measured by Treasury bills +1% Putnam Absolute Return 100 Fund

Alternatives for all kinds of investors Each fund seeks to earn a positive total return that exceeds the rate of inflation by a targeted amount over a reasonable period of time regardless of market conditions. For illustrative purposes only. Does not represent actual holdings or strategies of any Putnam fund or product. There can be no assurance that a fund will meet its objective. The funds are not intended to outperform stocks and bonds during strong market rallies. Bond funds Putnam Absolute Return 300 Fund Balanced funds Putnam Absolute Return 500 Fund Stock funds Putnam Absolute Return 700 Fund Alternative to Each fund can fit a portfolio as an alternative to traditional funds Short-term securities Putnam Absolute Return 100 Fund

Managed by experienced teams

Fixed Income Group

7 portfolio managers

Avg. 20 years of experience

Absolute return strategies since 1999

Asset Allocation Group

5 portfolio managers

Avg. 18 years of experience

Absolute return strategies since 2006

Management fees adjust with performance

Aligns interests of fund managers and shareholders

Source: Putnam. Class A shares include a maximum initial sales charge of 3.25% for the 100 and 300 Funds, and 5.75% for the 500 and 700 Funds. A 1% redemption fee may apply to any shares redeemed or exchanged within seven days of purchase. Fees increase when the fund’s actual return is above target. Fees decrease when the fund’s actual return is below target.

Delivered results in a volatile 2009 Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results. Share price, principal value, and return will vary, and you may have a gain or a loss when you sell your shares. The class A share performance shown assumes reinvestment of distributions and does not account for taxes. After-sales-charge returns reflect a maximum load of 5.75% for Putnam Absolute Return 500 Fund and 700 Fund and 3.25% for Putnam Absolute Return 100 Fund and 300 Fund. “What you pay” reflects Putnam Management’s decision to contractually limit expenses through 10/31/2010. A 1% short-term trading fee may apply. To obtain the most recent month-end performance, visit putnam.com. Indexes are unmanaged and used as a broad measure of market performance. It is not possible to invest in them. The Merrill Lynch U.S. Treasury Bill Index is an unmanaged index that tracks the performance of U.S. dollar denominated U.S. Treasury Bills publicly issued in the U.S. domestic market. Qualifying securities must have a remaining term of at least one month to final maturity and a minimum amount outstanding of $1 billion. The index is shown as a broad measure of market performance between a fund and an index will differ. You cannot invest directly in an index. Cumulative total return performance as of 3/31/09 1.65 2.07 -5.28 0.50 Life of fund Absolute Return 700 Fund 0.05 Merrill Lynch U.S. Treasury Bill Index 1.50 1.92 -5.75 0.00 Life of fund Absolute Return 500 Fund 1.35 1.82 -2.69 0.62 Life of fund Absolute Return 300 Fund 1.25% 1.66% -3.08% 0.22% Life of fund Absolute Return 100 Fund What you pay Total expense ratio After sales charge Before sales charge Class A shares (inception 12/24/08)

An innovation for today’s investors

Talk with your financial advisor to set your goals

Review your portfolio and risk profile

Add Putnam Absolute Return Funds to complement more traditional funds

Absolutely for all kinds of investors. An alternative to stock funds An alternative to balanced funds An alternative to bond funds An alternative to short-term securities Putnam Absolute Return 700 Fund Putnam Absolute Return 500 Fund Putnam Absolute Return 300 Fund Putnam Absolute Return 100 Fund

Printed on 06/10/09 For all funds: Asset allocation decisions may not always be correct and may adversely affect fund performance. The use of leverage through derivatives may magnify this risk. Leverage and derivatives carry other risks that may result in losses, including the effects of unexpected market shifts and/or the potential illiquidity of certain derivatives. International investments carry risks of volatile currencies, economies, and governments, and emerging-market securities can be illiquid. Bonds are affected by changes in interest rates, credit conditions, and inflation. As interest rates rise, prices of bonds fall. Long-term bonds are more sensitive to interest-rate risk than short-term bonds, while lower-rated bonds may offer higher yields in return for more risk. Unlike bonds, bond funds have ongoing fees and expenses. For the 500 Fund and the 700 Fund , these risks also apply: Stocks of small and/or midsize companies increase the risk of greater price fluctuations. REITs involve the risks of real estate investing, including declining property values. Commodities involve the risks of changes in market, political, regulatory, and natural conditions. Additional risks are listed in the funds’ prospectus. Investors should carefully consider the investment objective, risks, charges, and expenses of a fund before investing. For a prospectus containing this and other information for any Putnam fund or product, call your financial advisor or contact Putnam at 1-800-225-1581. Investors should read the prospectus carefully before investing. Putnam Retail Management putnam.com