Why Putnam Absolute Return Funds:

  • A wide range of securities — a dynamic mix of investments across global markets and sectors that adjusts with changing opportunities.
  • Progressive risk management — modern tools to mitigate risks and potentially outperform general markets during flat or negative periods.
  • Ultimate flexibility — investments beyond traditional benchmark constraints to pursue target returns over three years, in good markets and bad.

Pursue a consistent return target with fewer ups and downs than financial markets

Cumulative performance of class A shares at NAV vs. Treasury bills and the S&P 500, December 23,2008 (inception) through June 30, 2010

Absolute Return Funds performance

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 and 700 Funds, and 1.00% for Putnam Absolute Return 100 and 300 Funds. A short-term trading fee of 1% may apply to redemptions or exchanges from certain funds within the time period specified in the fund's prospectus. The BofA 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. The S&P 500 Index is an unmanaged index of common stock performance. You cannot invest directly in an index. The short-term results of a relatively new fund are not necessarily indicative of its long-term prospects. To obtain the most recent month-end performance, visit putnam.com. Risk: Standard deviation (1 year as of 6/30/10) measures how widely a set of values varies from the mean, and represents the historical volatility of an investment portfolio.

Rob Bloemker, Portfolio Manager Jeff Knight, Portfolio Manager

Manager Insight

Second quarter Q&A with the portfolio managers

Rob Bloemker and Jeff Knight , 6/30/2010

Can you describe the financial market volatility in the second quarter?
Jeff Knight: After four consecutive quarters of steady recovery in both equity and fixed-income markets, volatility returned abruptly in the second quarter amid an intensifying sovereign debt crisis in Europe and signs of potentially slower growth in China. Yields plummeted on government bonds judged to be safe, including those of the United States and Germany. Even as economic data continued to provide positive news that the recovery remained on track, investors appeared to be pricing in the risk of a significant slowdown and deflation. Read full commentary

Absolute Return blog

Absolute Return experts and portfolio managers comment on current market topics and long-term portfolio ideas.

absolutereturnblog.com

Fund resources

Brochure

Combined fact sheet for all four funds

Quarterly Commentary
on the market and the funds' performance and outlook from the portfolio managers.

White paper: Absolute return investing



Putnam Investments - A world of investing

While Treasury bills are backed by the U.S. government, investments in mutual funds are not.

Consider these risks before you invest: 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 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 objectives, risks, charges, and expenses of a fund before investing. For a prospectus, or a summary prospectus if available, containing this and other information for any Putnam fund or product, click on the prospectus section or call your financial representative or call Putnam at 1-800-225-1581. Please read the prospectus carefully before investing.

Putnam Retail Management