The funds have performed with low volatility even when stocks and bonds fell

Cumulative performance of class A shares before sales charge, December 23, 2008 (inception) through September 30, 2011.

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.
The funds' total expense ratios are 1.00% for the 100 Fund, 1.08% for the 300 Fund, 1.46% for the 500 Fund, and 1.64% for the 700 Fund. However, the amount investors pay is lower: 0.68% for the 100 Fund, 0.88% for the 300 Fund, 1.18% for the 500 Fund, and 1.39% for the 700 Fund, reflecting Putnam Management's decision to contractually limit expenses through 2/29/12. To obtain the most recent month-end performance, visit putnam.com. 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. The Barclays Capital U.S. Aggregate Bond Index (Barclays Aggregate) is an unmanaged index of U.S. investment-grade fixed-income securities. The Sharpe ratio is a measure of historical adjusted performance calculated by dividing the fund's return minus the risk–free rate (Citigroup 30-day Treasury Bill Index) by the standard deviation of the fund's return. The higher the ratio, the better the fund's return per unit of risk. You cannot invest directly in an index.

Duration measures the sensitivity of bond prices to interest-rate changes. A negative duration indicates that a security or fund may be poised to increase in value when interest rates increase.

Standard deviation measures how widely a set of values varies from the mean. It is a historical measure of the variability of return earned by an investments portfolio over a 3–year period.

The funds target returns above T-bills, which track the Consumer Price Index over time as a proxy for inflation.

Unlike many traditional funds, absolute return funds can adapt to any market environment by pursuing global opportunities and progressive risk management.

All funds involve different levels of risk, have different fees and expenses, and have different objectives that you should consider before investing. See the funds’ prospectus for complete details.

Absolute return funds have fewer limitations on where they can invest as compared with traditional funds. They have the ability to move among security types (e.g., stocks, bonds, cash, and alternatives), capitalization ranges, styles, durations, credit qualities, and geographic regions. This flexibility in terms of asset allocation offers the advantage of improved portfolio diversification as compared with many traditional funds. Absolute return funds may also have additional risks that traditional funds might not incur such as investing in derivatives and commodities, and from the use of leverage.

Putnam Absolute Return 100 Fund and 300 Fund

• 5 portfolio managers averaging 21 years of investment experience
• Backed by research of over 60 specialists across global fixed-income sectors
• Careful portfolio construction process integrates multiple strategies
• Emphasis on fundamental analysis of total return potential
• 12 years of experience managing absolute return strategies for institutions

Putnam Absolute Return 500 Fund and 700 Fund

• 5 global asset allocation portfolio managers averaging 20 years of investment experience
• Backed by research of 14 global asset allocation specialists
• Actively monitor global markets and asset classes for short-, medium-, and long-term trends
• Fundamental research emphasis informed by quantitative analysis
• 5 years of experience managing absolute return strategies for institutions

The management fees of Putnam Absolute Return Funds adjust based on performance versus the return targets. Adjustable management fees align the goals of portfolio managers and shareholders.

Because the dollar amount of the monthly performance fee adjustment is based on the fund's average assets during the rolling performance period, the amount of any dollar adjustment as a percentage of a fund's current assets could exceed the “maximum annualized performance adjustment rates.” Performance fee adjustments will not commence until a fund has been operating under a shareholder-approved management contract with a performance fee adjustment for at least 12 months.

The funds are not intended to outperform stocks and bonds during strong market rallies. Not all share classes are available on all platforms.

Current shareholders are already benefiting from the changes, which went into effect November 1, 2010. The cuts make Putnam Absolute Return Funds even more compelling relative to peers. The new caps will continue until at least February 29, 2012.