Putnam Investments

Absolute return strategies remain steady even when markets are shaken
by negative news

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 investment portfolio.

Fund highlights

The funds pursue positive returns above inflation, as measured by T-bills, with less volatility over time.

Target return: Seeking specific returns above inflation over a market cycle
Market independent: Utilizing a range of strategies independent of market benchmarks
Active risk hedging: Employing tools that seek to reduce unwarranted risks

The funds seek to provide targeted returns above inflation, as measured by T-bills
Cumulative returns since inception (12/23/08)

Annualized total return (as of 6/30/13)

Putnam Absolute Return 100 Fund ® »
  Class A shares    
Inception 12/23/08 Before sales charge After sales charge Class Y shares
Net asset value
BofA Merrill Lynch U.S. Treasury Bill Index
1 year 2.24% 1.22% 2.44% 0.13%
3 years 0.89 0.55 1.13 0.14
Life of fund 1.54 1.32 1.79 0.18
Total expense ratio 0.65 0.40
What you pay 0.40
Putnam Absolute Return 300 Fund ® »
  Class A shares    
Inception 12/23/08 Before sales charge After sales charge Class Y shares
Net asset value
BofA Merrill Lynch U.S. Treasury Bill Index
1 year 5.34% 4.29% 5.54% 0.13%
3 years 1.88 1.54 2.11 0.14
Life of fund 3.16 2.93 3.41 0.18
Total expense ratio 0.82 0.57
What you pay 0.57
Putnam Absolute Return 500 Fund ® »
  Class A shares    
Inception 12/23/08 Before sales charge After sales charge Class Y shares
Net asset value
BofA Merrill Lynch U.S. Treasury Bill Index
1 year 2.53% -3.36% 2.88% 0.13%
3 years 3.90 1.87 4.19 0.14
Life of fund 4.57 3.21 4.85 0.18
Total expense ratio 1.17* 0.92*
What you pay 1.15* 0.90*
Putnam Absolute Return 700 Fund ® »
  Class A shares    
Inception 12/23/08 Before sales charge After sales charge Class Y shares
Net asset value
BofA Merrill Lynch U.S. Treasury Bill Index
1 year 3.06% -2.87% 3.31% 0.13%
3 years 4.61 2.57 4.85 0.14
Life of fund 5.97 4.59 6.19 0.18
Total expense ratio 1.31 1.06
What you pay 1.06
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. To obtain the most recent month-end performance, visit putnam.com. Class Y shares, available to investors through an asset-based fee program or for institutional clients, are sold without an initial sales charge and have no CDSC.

*"What you pay" reflects Putnam Management's decision to contractually limit expenses through 6/30/14.

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. 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.

Absolute return funds have fewer limitations on where they can invest as compared to traditional funds. They have the ability to move among security types (i.e., 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 to many traditional funds. Absolute return funds also may also have additional risks that traditional funds might not incur such as investing in derivatives, commodities and from the use of leverage.

Consider these risks before investing: Our allocation of assets among permitted asset categories may hurt performance. The prices of stocks and bonds in the funds' portfolio may fall or fail to rise over extended periods of time for a variety of reasons, including both general financial market conditions and factors related to a specific issuer or industry. Our active trading strategy may lose money or not earn a return sufficient to cover associated trading and other costs. Our use of leverage obtained through derivatives increases these risks by increasing investment exposure. Bond investments are subject to interest-rate risk, which means the prices of the fund's bond investments are likely to fall if interest rates rise. Bond investments are subject to interest-rate risk (the risk of bond prices falling if interest rates rise) and credit risk (the risk of an issuer defaulting on interest or principal payments). Interest-rate risk is greater for longer-term bonds, and credit risk is greater for below-investment-grade bonds. Unlike bonds, funds that invest in bonds have ongoing fees and expenses. 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. 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. Our use of derivatives may increase these risks by increasing investment exposure (which may be considered leverage) or, in the case of many over-the-counter instruments, because 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. The funds may not achieve their goal, and they are not intended to be a complete investment program. The funds' effort to produce lower-volatility returns may not be successful and may make it more difficult at times for the fund to achieve their targeted return. In addition, under certain market conditions, the funds may accept greater volatility than would typically be the case, in order to seek their targeted return. For the 500 Fund and 700 Fund these risks also apply: 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. You can lose money by investing in the funds.