We expect rate volatility to remain high as Fed tapering continues and as the U.S. labor market struggles to normalize. In Europe, the European Central Bank has moved a step closer to easier monetary policy, which may drive further spread compression in peripheral sovereign bonds. Recent stability in emerging-market asset markets suggests better data for developing countries could be on the horizon. Our outlook for credit, prepayment, and liquidity risks remains positive.

1. Putnam fixed-income views
Arrows in the table indicate the change
from the previous quarter.
Underweight
Smallunderweight
Neutral
Smalloverweight
Overweight
Fixed-income asset class
U.S. government and agency debt l
U.S. tax exempt l
Tax-exempt high yield l
Agency mortgage-backed securities l
Collateralized mortgage obligations l
Non-agency residential mortgage-backed securities l
Commercial mortgage-backed securities l
U.S. floating-rate bank loans l
U.S. investment-grade corporates l
Global high yield l
Emerging markets l
U.K. government l
Core Europe government l
Peripheral Europe government l
Japan government l
CURRENCY SNAPSHOT
Dollar vs. yen: Dollar
Dollar vs. euro: Dollar
Dollar vs. pound: Dollar
The era of new
policy-guidance regimes
In the opening months of 2014, we learned a
thing or two about how developed-market
central banks are seeing the world today.
In the United States, the Federal Reserve’s
March meeting, followed by the first press
conference of the Yellen era, was more
hawkish than markets had expected. In
Europe meanwhile, the European Central
Bank (ECB) continues to promise much but
do little, though the promises now carry a new
hint of substance that we did not foresee. And
in Japan, we believe the Bank of Japan (BoJ)
is in a wait-and-see mode, even as Japanese
markets stumble awkwardly through a
correction in response to softer economic
data in China and the complexities of enacting
structural economic reform.
The waiting over, stimulus reduction gets
under way
Telegraphed in May 2013, the Fed’s transition
from stimulus finally began in the first
quarter of 2014, and while the $10 billion
monthly bond-buying reductions were well
communicated to the markets, remarks
on the unfolding of future Fed action —
particularly increases in the federal funds
rate — amplified rate volatility. In short,
the Fed’s March meeting suggested the
possibility of aggressive action sooner than
most market observers had anticipated. The
pace of tapering the bond-buying program
was maintained, and it became clear that
the hurdle for changing the pace is high. But
following the meeting, various Fed officials
delivered comments and speeches ranging
from more hawkish to more dovish, and the
net effect of this has created some uncertainty
in rate markets.
Key takeaways
• We expect rate volatility to remain high as Fed tapering
continues and as the U.S. labor market struggles to normalize.
• In Europe, the European Central Bank has moved a step closer
to easier monetary policy, which may drive further spread
compression in peripheral sovereign bonds.
• Recent stability in emerging-market asset markets suggests
better data for developing countries could be on the horizon.
• Our outlook for credit, prepayment, and liquidity risks
remains positive.
Fixed-Income Outlook
Q2 2014 » Putnam Perspectives

2. 2
Q2 2014 | Fixed-Income Outlook
In our view, the Fed wants to maintain an
accommodative policy, but it may also desire that
the market begin to discount the possibility of a less
accommodative stance. Alternatively, as some market
observers have noted in the wake of the release of the
March meeting minutes, the Fed may have come off
more hawkish than it had intended. Whatever the Fed’s
intention, markets have generally regrouped around the
expectation that rates could rise somewhat sooner than
people could have forecasted in the pre-Yellen era.
U.S. economic data are improving, but wages are
still a wildcard
By the end of the first quarter, U.S. economic data began
to improve somewhat from what had been winter-related
economic weakness. After disappointing results from
various sectors of the U.S. economy, higher auto sales,
improving business activity, and overall job creation
that is generally in line with forecasts have helped shape
expectations for a comparatively better spring. In our
view, as the U.S. economy continues to strengthen in 2014,
Treasury yields, particularly in the intermediate part of the
yield curve, are likely to move higher. However, we don’t
believe rates are likely to rise so quickly that the shift will
undermine economic growth.
Figure 1. Fixed-income asset
class performance
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
1Q 144Q 13
Japan
gov’t
Eurozone
gov’t
U.K.
gov’t
Emerging-
market
debt
Global
high
yield
U.S.
investment-
grade
corporate
debt
U.S.
floating-
rate
bankloans
Commercial
mortgage-
backed
securities
Agency
mortgage-
backed
securities
Tax-
exempt
high
yield
U.S.
tax
exempt
U.S.
government
Source: Putnam research, as of 3/31/14. Past performance is not indicative of future results. See page 10 for index definitions.
Fixed income delivered strong performance
across most sectors in the first quarter of 2014.

3. PUTNAM INVESTMENTS | putnam.com
3
We continue to think that, with the economy looking
better, the key to the pace of normalization can be found
in the labor market. Chair Yellen repeated her view that
much of the decline in labor participation is cyclical rather
than structural. This view is reflected in the March labor
report, as it showed a rise in participation that one would
expect from a normalizing economy.
The questionable factor in this formula for normaliza-
tion, we believe, is rising wages. If Yellen is correct, the
economy should be able to grow strongly for a longer
period before inflationary pressures emerge in the labor
market. But if she is wrong and participation does not
continue to rebound, higher wages among a smaller
population of skilled workers could begin to push up labor
costs that may not be offset by higher productivity. If this
should come to pass, we think the stance of monetary
policy would have to shift quickly, potentially leading to
a faster and more dramatic rise in rates than the market
currently expects.
Figure 2. Short-term rates remained
anchored by the Fed’s
monetary policy
0%
1%
2%
3%
4%
3/31/14
12/31/13
30
years
20
years
10
years
7
years
5
years
3
years
1 year
1m
onth
Source: U.S. Department of the Treasury, as of 3/31/14.
Interest rates fell across the intermediate
and long portions of a flattening yield curve
in the first quarter.

4. 4
Q2 2014 | Fixed-Income Outlook
Europe may breathe more easily after all
In Europe, the economy continues to improve along a path
of steady growth. In terms of policy, there are new signs
of substance. The new Italian government, for example,
has advanced an ambitious reform agenda that would not
only make important structural changes politically, but
also institute an easier fiscal stance to support growth.
In addition, the ECB has sounded a new note of support
for quantitative easing measures, perhaps primarily due to
policymakers’ discomfort with the region’s very low rates
of inflation. ECB President Mario Draghi recently offered
a number of dovish remarks on the topic of the euro
exchange rate and, most importantly, on the unanimity
of support among the central bank’s Governing Council
members for adopting unconventional policy measures
should the need arise.
Whether the ECB will actually ease policy further, by
a negative deposit rate or some other measure, is still
an open question. But it does increase our comfort with
peripheral European sovereign debt, whose spreads, we
believe, will continue to compress in the coming months.
Figure 3. High-yield spreads and defaults generally
move in tandem over credit cycles
0
4
8
12
16
20%
0
400
800
1200
1600
2000
’11 ’12 ’13 3/31/14’10’09’08’07’06’05’04’03’02’01’00’99’98’97’96’95’94’93’92’91’90’89’88’87
Defaultrate
Spreads(bps)
1990–91
recession
2001
recession
2007–09
recession
Current spread: 435 bps (as of 3/31/14)
20-year median spread: 523 bps
Average default rate: 3.9%
Today, the gap between spreads
and defaults remains wide, signaling
opportunity for investors.
High-yield default rate
Spread to worst
1Current default rate includes distressed exchanges.
Sources: JPMorgan, High Yield Market Monitor, 3/31/14; Putnam Investments.
Spreads have come in from
all-time highs; defaults
remain low.
High-yield default rate*

5. PUTNAM INVESTMENTS | putnam.com
5
U.S. high yield and bank loans buoyed by strong
fundamentals
At this stage in the credit cycle, our view is generally
positive. Corporations continue to take a conservative
approach toward managing their assets and liabilities.
Most have refinanced debt and lowered their overall
borrowing costs, and many are holding sizable cash
balances. As a result, corporate debt defaults remain
very low. At 0.61% as of the end of March, defaults are at
their lowest level since December 2007, and considerably
lower than the long-term average of 3.90%. In our view,
corporate fundamentals should continue to be reasonably
sound against the backdrop of a slow-growth economic
environment. However, as we enter the second quarter
of 2014, we could see the monthly number increase slightly
in the short term because of an expected default by a
large issuer, but this is by no means a systemic issue
going forward.
Figure 4. Current spreads relative
to historical norms
n Average excess yield over Treasuries
(OAS, 1/1/98–12/31/07)
n Current excess yield over Treasuries
(OAS as of 3/31/14)
Sources: Barclays, Bloomberg, Putnam, as of 3/31/14.
Data is provided for informational use only. Past performance is no guarantee of future results. All spreads are in basis points and measure option-
adjusted yield spread relative to comparable maturity U.S. Treasuries with the exception of non-agency RMBS and mezzanine CMBS, which are
loss-adjusted spreads to swaps calculated using Putnam’s projected assumptions on defaults and severities, and agency IO, which is calculated using
assumptions derived from Putnam’s proprietary prepayment model. Agencies are represented by the Barclays U.S. Agency Index. Agency MBS are
represented by the Barclays U.S. Mortgage Backed Securities Index. Investment-grade corporates are represented by the Barclays U.S. Corporate
Index. High yield is represented by the JPMorgan Developed High Yield Index. AAA CMBS is represented by the Aaa portion of Barclays Investment
Grade CMBS Index; mezzanine CMBS is represented by the same index using the AA, A and BBB components. Average OAS for Mezzanine CMBS
is for the 2000–2007 time period. Emerging-market debt is represented by the Barclays EM Hard Currency Aggregate Index. Non-agency RMBS is
estimated using average market level of a sample of below-investment-grade securities backed by various types of non-agency mortgage collateral
(excluding prime securities). Mezzanine CMBS is estimated from an average spread among baskets of Putnam-monitored new issue and seasoned
mezzanine securities, as well as a synthetic (CMBX) index. Agency IO is estimated from a basket of Putnam-monitored interest-only (IO) and inverse
IO securities. Option-adjusted spread (OAS) measures the yield over duration equivalent Treasuries for securities with different embedded options.
56
130
89
123 123
150
129
425
34 37 39
0
200
400
600
800
1000
800
500
100
155
294
575
150
409
97
106
573
Non-agency
RMBS
CMBS –
Mezzanine
Emerging-
market debt
Agency IOHigh yieldAAA
CMBS
Investment-grade
corporates
Agency
MBS
Agencies
56
130
89
123 123
150
129
425
34 37 39
0
200
400
600
800
1000
800
500
100
155
294
575
150
409
97
106
573
Non-agency
RMBS
CMBS –
Mezzanine
Emerging-
market debt
Agency IOHigh yieldAAA
CMBS
Investment-grade
corporates
Agency
MBS
Agencies
We continue to find compelling investment
opportunities in out-of-benchmark sectors,
given their relative spread levels and solid
underlying fundamentals.

6. 6
Q2 2014 | Fixed-Income Outlook
Our view is similarly constructive for bank loans. This is
the case in part because we think many companies issuing
bank loans today have much-improved credit profiles and
are seizing the opportunity to refinance obligations that
they accumulated during the 2007–2009 period. In addi-
tion, if rates should rise meaningfully higher in 2014, bank
loans would stand to benefit from increased demand, as
their floating-rate structure allows these loans to pay a
higher yield when short-term rates rise. Consequently,
absent an external shock to the marketplace, we believe
both high-yield bonds and bank loans should be able to
continue generating modest, coupon-like returns in the
months ahead.
Securitized markets:
Regulatory and market change
As a group, our prepayment strategies, which were
implemented primarily with securities such as interest-
only collateralized mortgage obligations (IO CMOs),
contributed positively to portfolio performance. Lower
policy risk coupled with mortgage rates that remained at
elevated levels versus those of the past couple of years
reduced the likelihood that the mortgages underlying
our CMO holdings would be refinanced, and the resulting
slower prepayment speeds helped boost the securities’
values.
Figure 5. Excess returns relative
to U.S. Treasuries
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
MBSCMBSU.S. investment-
grade credit
Emerging-market
debt (EMD)
High yield
Source: Barclays, as of 3/31/14. Past performance is not indicative of future results.
In the context of a 3.38% return for
10-year U.S. Treasuries, most other
sectors outperformed, with high yield
and EMD exhibiting particularly strong
performance.

7. PUTNAM INVESTMENTS | putnam.com
7
Within mortgage credit, our holdings of commercial
mortgage-backed securities (CMBS) and non-agency
residential mortgage-backed securities (RMBS) were
also major contributors. Within CMBS, the fund benefited
from solid security selection in subordinated “mezzanine”
bonds rated BBB/Baa, which offered higher yields at what
we believed were acceptable levels of risk. Mezzanine
CMBS are lower in the capital structure of a package of
securities backed by commercial mortgages, and provide
a yield advantage over higher-rated bonds along with
meaningful principal protection. Our non-agency RMBS
investments rebounded from undervalued levels prior
to the period, buoyed by investor demand for higher-
yielding securities.
Looking forward, we continue to believe segments
of the non-agency RMBS market, including prime, pay-
option ARM, and Alt-A securities, display attractive
relative value for investors. For perspective, the non-
agency RMBS market is about three quarters the size
of the U.S. high-yield corporate bond market (though
currently shrinking), but is still somewhat larger than
the current bank-loan market. While we estimate that
the non-agency RMBS market will continue to shrink by
approximately 10%–15% per year as a result of pay downs
and liquidations, we think this decline could eventually
reverse with the development of a new issue private-
label MBS market with different collateral and structural
features than those that existed prior to the financial crisis
of 2008.
Global bonds: Opportunity in Europe,
consumer discontent in Japan
In Europe, as we discussed, ECB President Mario Draghi
offered assurances that the central bank was prepared to
engage in unconventional monetary support measures, a
development that gives us greater conviction in our posi-
tions on peripheral European debt. In the first quarter, we
had overweight allocations to government bonds in Italy,
Spain, Ireland, and Greece, which were held against a net
short position in Germany. This strategy worked well, and
in the coming months, we expect spreads will continue to
compress. The fact that Greece, for example, dramatically
and successfully reentered the longer-term market in April
has added to downward pressure on Greek sovereign
yields.
In Japan, an anticipated sales tax hike was imple-
mented on April 1, and while it was clear some of the
economy’s progress in recent quarters was a result of
spending being advanced to beat the hike, we cannot yet
know how demand will settle down at the new tax level.
The timing and extent of any further monetary easing will
depend on what the data show in the spring.
Data from a recent Japanese household survey
reveal a discouraging reception of economic change by
consumers. Households are clearly aware that prices have
risen, and they expect further increases. But overwhelm-
ingly, if not surprisingly, they view this negatively and
believe that economic conditions have deteriorated. In
fact, incomes have gone down because nominal wages,
though rising, have not risen enough to offset the increase
in prices. In addition, given the post-Fukushima energy
landscape in Japan, in which the amount of imported
energy has risen dramatically, a spike in energy prices
could worsen sentiment.
In our view, we think the BoJ may shy away from
engineering another decline in the exchange rate. The
historically lower yen has successfully pushed up prices
and produced a profit windfall for the corporate sector.
From this point forward, there is less need for the BoJ to
lead. Wages, however, need to go up, and this is where
we expect Japan’s government to focus its efforts in the
coming quarters. On top of that, Japan’s equity market
could help boost confidence, assuming it does not stage
a repeat performance of its first-quarter correction. A
higher stock market would boost confidence, generate
some wealth, and — most importantly — help companies
feel better about raising wages.

8. 8
Q2 2014 | Fixed-Income Outlook
Figure 6: Muni credit spreads have
narrowed from historical
wides, but remain attractive
Municipal bond spreads by quality rating
AA A BBB
0
100
200
300
400
500
3/31/14201320122011201020092008200720062005200420032002200120001999
Source: Putnam, as of 3/31/14. Credit ratings are as determined by Putnam.
The most attractive relative values
continue to populate in the BBB-rated
segment of the muni market.
Emerging-market debt: Bright spots
despite geopolitical tensions
Emerging-market (EM) assets, including debt and equity,
showed better-than-expected strength in March. In part,
this may be because somewhat weaker Chinese data
led markets to expect further stimulus from the Chinese
authorities. In addition, the strength could stem from the
perception that Russia/Ukraine tensions have eased.
Within EM debt, our portfolios in the first quarter
benefited most from investments in Argentina, where we
held U.S.-dollar-denominated, local-law bonds, along with
New York law bonds, which are bonds issued by Argentina
that are governed by New York securities laws. Overall,
we think the recent stability in EM asset markets and the
recovery in global trade suggest we may soon see better
data out of EM.

9. PUTNAM INVESTMENTS | putnam.com
9
The conflict in Ukraine may or may not be settling
down. The markets, at this time of writing, have appeared
to move on. Geopolitical strategists, however, are less
sanguine. In our view, the situation will prove to be
increasingly less relevant for markets unless missteps
occur by either side — for example, if Europe presses hard
for more serious sanctions that prompt Russia to restrict
its exports of natural resources. In any case, this is an area
of distinct energy-price vulnerability that we will continue
to watch closely.
Tax-exempt bonds: Still a time for defense
Our cautious and defensive strategies remain in place,
since we expect continued pressure on interest rates over
the longer term as the Fed unwinds its economic stimulus
program and investors adjust their expectations about the
central bank’s monetary policy. Consequently, our funds’
duration positioning, or interest-rate sensitivity, remained
below that of their Lipper peer groups. This includes
maintaining a slightly higher cash position in the funds to
help shelter them from price pressures in an interest-rate
environment trending higher. Carrying slightly higher-
than-average cash balances affords the funds greater
flexibility to purchase attractively valued bonds even in a
rising-rate environment.
We continue to emphasize essential service revenue
bonds, which are typically issued by state and local
government entities to finance specific revenue-
generating projects. While we believe that conditions
are improving at the state and local levels — and we are
vigilant for investment opportunities — we continued
to underweight local G.O. (general obligation) bonds.
These securities rely on the taxing power of the issuer and
the health of the local economy to make payments on
these bonds.
Despite the strong start for municipal bonds in 2014,
we remain cautious and believe that there could be
some volatility surrounding supply/demand factors
and interest rates in the coming months. Tax-exempt
municipal fund outflows for 2013 topped $60 billion
[Source: JPMorgan] — the most in 20 years — and put
downward pressure on prices. Although we have seen
fund flows improve and some direct retail buyers come
into the market to help support prices, we think it is
unlikely that we will see volatility subside until fund flows
turn decidedly positive and rate volatility eases.

10. 10
Q2 2014 | Fixed-Income Outlook
Currency outlook
We favor a modest overweight to the U.S. dollar. In its
March meeting, the Federal Open Market Committee
(FOMC) dropped its forward guidance linking future
interest-rate hikes to specific levels of unemployment.
The Fed continues to hold the view that there is plenty of
slack in the labor market and, as such, wage pressure and
inflation will only gradually approach its targets over the
medium term. If economic growth remains strong, as we
expect, this view is likely to be challenged as rate hikes
begin to be priced in at a sooner-than-expected date,
which should be supportive of the dollar over the course
of the year.
The euro is being influenced by the capital flowing from
the United States to the eurozone. We believe the euro
will trade in a range over the coming months as the inac-
tion of the ECB and improving U.S. economic data largely
counter each other. The British pound sterling merits a
slight underweight, as the pace of the U.K. recovery has
slipped a bit.
We also favor a slight underweight to the Japanese
yen. It is expected in some quarters that the BoJ will need
to undertake new measures to sustain inflation expecta-
tions. This should provide further impetus for the U.S.
dollar to move higher versus the yen.
Agencymortgage-backedsecurities are represented by the Barclays U.S. Mortgage
Backed Securities Index, which covers agency mortgage-backed pass-through
securities (both fixed-rate and hybrid ARM) issued by Ginnie Mae (GNMA), Fannie Mae
(FNMA), and Freddie Mac (FHLMC).
Commercialmortgage-backedsecurities are represented by the Barclays U.S.
CMBS Investment Grade Index, which measures the market of commercial mortgage-
backed securities with a minimum deal size of $500 million. The two subcomponents
of the U.S. CMBS Investment Grade Index are U.S. aggregate-eligible securities and
non-eligible securities. To be included in the U.S. Aggregate Index, the securities must
meet the guidelines for ERISA eligibility.
Emerging-marketdebt is represented by the JPMorgan Emerging Markets Global
Diversified Index, which is composed of U.S. dollar-denominated Brady bonds,
eurobonds, traded loans, and local market debt instruments issued by sovereign
and quasi-sovereign entities.
Eurozonegovernment is represented by the Barclays European Aggregate Bond
Index, which tracks fixed-rate, investment-grade securities issued in the following
European currencies: euro, Norwegian krone, Danish krone, Swedish krona, Czech
koruna, Hungarian forint, Polish zloty, and Swiss franc.
Globalhighyield is represented by the BofA Merrill Lynch Global High Yield
Constrained Index, an unmanaged index of global high-yield fixed-income securities.
Japangovernment is represented by the Barclays Japanese Aggregate Bond Index,
a broad-based investment-grade benchmark consisting of fixed-rate Japanese
yen-denominated securities.
Tax-exempthighyield is represented by the Barclays Municipal Bond High Yield Index,
which consists of below-investment-grade or unrated bonds with outstanding par
values of at least $3 million and at least one year remaining until their maturity dates.
U.K.government is represented by the Barclays Sterling Aggregate Bond Index, which
contains fixed-rate, investment-grade, sterling-denominated securities, including gilt
and non-gilt bonds.
U.S.floating-ratebankloans are represented by the SP/LSTA Leveraged Loan
Index, an unmanaged index of U.S. leveraged loans.
U.S.governmentandagencydebt is represented by the Barclays U.S. Aggregate
Bond Index, an unmanaged index of U.S. investment-grade fixed-income securities.
U.S.investment-gradecorporatedebt is represented by the Barclays U.S. Corporate
Index, a broad-based benchmark that measures the U.S. taxable investment-grade
corporate bond market.
U.S.taxexempt is represented by the Barclays Municipal Bond Index, an unmanaged
index of long-term fixed-rate investment-grade tax-exempt bonds.
You cannot invest directly in an index.

11. PUTNAM INVESTMENTS | putnam.com
11
Putnam’s veteran fixed-income
team offers a depth and breadth
of insight and an independent
view of risk
Successful investing in today’s markets requires
a broad-based approach, the flexibility to exploit
a range of sectors and investment opportunities,
and a keen understanding of the complex
global interrelationships that drive the markets.
That is why Putnam has more than 70 fixed-
income professionals focusing on delivering
comprehensive coverage of every aspect of the
fixed-income markets, based not only on sector,
but also on the broad sources of risk — and
opportunities — most likely to drive returns.
D. William Kohli
Co-Head of Fixed Income
Global Strategies
Investing since 1987
Joined Putnam in 1994
Michael V. Salm
Co-Head of Fixed Income
Liquid Markets and Securitized Products
Investing since 1989
Joined Putnam in 1997
Paul D. Scanlon, CFA
Co-Head of Fixed Income
Global Credit
Investing since 1986
Joined Putnam in 1999
This material is provided for limited purposes. It is not
intended as an offer or solicitation for the purchase or sale of
any financial instrument, or any Putnam product or strategy.
References to specific securities, asset classes, and financial
markets are for illustrative purposes only and are not intended
to be, and should not be interpreted as, recommendations
or investment advice. The opinions expressed in this article
represent the current, good-faith views of the author(s) at the
time of publication. The views are provided for informational
purposes only and are subject to change. This material does
not take into account any investor’s particular investment
objectives, strategies, tax status, or investment horizon. The
views and strategies described herein may not be suitable
for all investors. Investors should consult a financial advisor
for advice suited to their individual financial needs. Putnam
Investments cannot guarantee the accuracy or completeness
of any statements or data contained in the article. Predictions,
opinions, and other information contained in this article are
subject to change. Any forward-looking statements speak
only as of the date they are made, and Putnam assumes no
duty to update them. Forward-looking statements are subject
to numerous assumptions, risks, and uncertainties. Actual
results could differ materially from those anticipated. Past
performance is not a guarantee of future results. As with
any investment, there is a potential for profit as well as the
possibility of loss.
The information provided relates to Putnam Investments and
its affiliates, which include The Putnam Advisory Company,
LLC and Putnam Investments Limited®.
Prepared for use in Canada by Putnam Investments Inc.
[Investissements Putnam Inc.] (o/a Putnam Management in
Manitoba). Where permitted, advisory services are provided
in Canada by Putnam Investments Inc. [Investissements
Putnam Inc.] (o/a Putnam Management in Manitoba) and its
affiliate, The Putnam Advisory Company, LLC.

12. Consider these risks before investing: International investing involves certain risks, such as currency fluctuations,
economic instability, and political developments. Additional risks may be associated with emerging-market securities,
including illiquidity and volatility. Lower-rated bonds may offer higher yields in return for more risk. Funds that invest
in government securities are not guaranteed. Mortgage-backed securities are subject to prepayment risk. Derivatives
also involve the risk, in the case of many over-the-counter instruments, of the potential inability to terminate or sell
derivatives positions and the potential failure of the other party to the instrument to meet its obligations.
Bond investments are subject to interest-rate risk, which means the prices of the funds’ bond investments are likely to
fall if interest rates rise. Bond investments also are subject to credit risk, which is the risk that the issuer of the bond may
default on payment of interest or principal. Interest-rate risk is generally greater for longer-term bonds, and credit risk
is generally greater for below-investment-grade bonds, which may be considered speculative. Unlike bonds, funds that
invest in bonds have ongoing fees and expenses.
You can lose money by investing in a mutual fund.
If you are a U.S. retail investor, please request a prospectus, or a summary prospectus if available, from your
financial representative or by calling Putnam at 1-800-225-1581. The prospectus includes investment objectives,
risks, fees, expenses, and other information that you should read and consider carefully before investing.
In the United States, mutual funds are distributed by Putnam Retail Management.
PUTNAM INVESTMENTS | putnam.com CM0200 287544 4/14