Putnam Allstate Advisor

Putnam Diversified Income Subaccount

The subaccount seeks as high a level of current income as Putnam Management believes is consistent with preservation of capital.

Putnam Diversified Income Subaccount

Fund description

The subaccount seeks income from three sectors: U.S. corporate and government investment-grade bonds, foreign bonds, and higher-yielding, lower-rated corporate bonds. The benchmark allocation for each sector is typically one-third of total assets. The management team can adjust the weightings and may allocate from 15%-65% of assets to each sector. By diversifying its assets, the subaccount seeks to reduce the risk of overexposure to any one sector.

Sales story

Offering a diversified portfolio of income opportunities Diverse income opportunities: The fund provides exposure to bonds in all sectors of the expanding global fixed-income market and across the complete credit spectrum.Multiple strategies: Putnam's bond specialists employ 70-80 active investment strategies to pursue a diverse range of opportunities for performance.Active risk management: In today's complex bond market, the fund's experienced managers actively manage risk with the goal of superior risk-adjusted performance over time.

Management team

Daily pricing as of 01/24/20

with optional enhanced death benefits
Unit Value $21.559794 $20.891706
Unit Value Change -0.035127 -0.034125

Lipper ranking ‡ as of 12/31/19

Category: General Bond Funds

  Percentile ranking Rank/Funds in category
10 yrs. 61% 9/14
1 yr. 15% 5/34
3 yrs. 22% 6/27
5 yrs. 22% 5/22

Maturity detail includes only cash bonds and cash equivalents.

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. Mutual funds that invest in government securities in government securities are not guaranteed. Mortgage-backed securities are subject to prepayment risk. Variable annuities are long-term investments designed for retirement purposes. Withdrawals prior to age 59 1/2 may be subject to a 10% IRS penalty.

The use of derivatives involves additional risks, such as the potential inability to terminate or sell derivatives positions and the potential failure of the other party to the instrument to meet its obligations.'

Credit qualities are shown as a percentage of net assets. A bond rated Baa or higher (Prime-3 or higher, for short-term debt) is considered investment grade. This chart reflects the highest security rating provided by one or more of Standard & Poor's, Moody's and Fitch. Short-term cash bonds rated A-1+ are included in the AAA-rating category. Ratings and portfolio credit quality will vary over time. Credit quality includes the fixed-income portion of the portfolio. Derivative instruments, including currency forwards, are only included to the extent of any unrealized gain or loss on such instruments and are shown in the not-rated category. Cash is also shown in the not-rated category. The fund itself has not been rated by an independent rating agency.

‡ Lipper is an industry research firm whose rankings are based on total return performance, vary over time, and do not reflect the effects of sales charges. Past performance is not indicative of future results.

Quick facts as of 12/31/19

Fiscal Year End December
Asset Class Putnam Allstate Advisor
Subaccount Status Open to new investors
Number of issues 1461
Turnover (fiscal year end) 790%
Net Assets $211M
Inception Date 09/15/93

Performance

Performance as of 12/31/19

Annualized Performance Last Quarter Year
to Date		 1 yr. 3 yrs. 5 yrs. 10 yrs. Life of
subaccount
Restated performance
Unit Value 2.29% 9.84% 9.84% 4.35% 2.67% 3.50% 3.91%
Standardized -6.61% 0.41% 0.41% -0.42% -1.17% 0.62% 1.27%
With optional enhanced death benefit
Unit Value 2.26% 9.68% 9.68% 4.19% 2.51% 3.34% 3.75%
Standardized -6.64% 0.26% 0.26% -0.57% -1.33% 0.44% 1.05%
Actual performance
Unit Value 2.29% 9.84% 9.84% 4.35% 2.67% 3.50% 3.79%
Standardized -6.61% 0.41% 0.41% -0.42% -1.17% 0.62% 1.13%
With optional enhanced death benefit
Unit Value 2.26% 9.68% 9.68% 4.19% 2.51% 3.34% 3.63%
Standardized -6.64% 0.26% 0.26% -0.57% -1.33% 0.44% 0.92%

Annual Performance at NAV

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
11.26% -4.38% 10.13% 6.47% -0.91% -3.56% 4.11% 5.79% -2.22% 9.84%
With optional enhanced death benefit
11.09% -4.52% 9.96% 6.30% -1.06% -3.71% 3.95% 5.63% -2.37% 9.68%

Restated performance

Monthly as of 12/31/19

Unit Value 1.18%
Standardized -7.64%

YTD as of 01/24/20

Unit Value -0.08%
Standardized -8.82%

With optional enhanced death benefit

Monthly as of 12/31/19

Unit Value 1.17%
Standardized -7.65%

YTD as of 01/24/20

Unit Value -0.09%
Standardized -8.83%

Unit values and performance information shown apply to the specific annuity product listed, not the underlying Putnam Variable Trust fund. This information should not be used by investors who hold an interest in Putnam Variable Trust funds through a different annuity or other variable product. The unit values and performance of other variable products that offer Putnam Variable Trust funds may be higher or lower due to product charges and expenses or other factors.

Data is historical. Past performance is no guarantee of future results. More recent returns may be less or more than those shown. Investment return and principal value will fluctuate, and you may have a gain or a loss when you sell your units.

Returns shown for the subaccounts for periods before their inception are derived from the historical performance of the underlying fund, adjusted to reflect the mortality, expense risk, and surrender charges applicable to this product and do not factor in the annual $30 contract maintenance fee. Additional riders and options for insurance-related charges will increase expenses and lower returns. Please see the prospectus for details. For a portion of the period, subaccounts may have limited expenses, without which returns would have been lower.

Variable annuities are long-term investments designed for retirement purposes. Putnam Capital Manager products are flexible-premium variable annuities held by Talcott Resolution Life, Inc., Simsbury, CT.

Putnam Allstate variable annuities are flexible-premium deferred variable annuities issued by Allstate Life Insurance Company (Allstate Life); underwritten by Allstate Distributors, L.L.C., both of Northbrook, IL; and sold through registered representatives or bank employees who are licensed insurance agents. Please check for availability in your specific state.

These policies have limitations and are sold by prospectus only. The prospectus contains details on the variable annuity, the subaccounts, contract features, fees, expenses, and other pertinent information.

Investors should carefully consider the investment objectives, risks, charges, and expenses of a fund before investing. For a prospectus containing this and other information for any variable annuity or variable life product that invests in Putnam Variable Trust funds, contact your financial advisor for a contract prospectus and prospectus for the underlying funds. You may also call Talcott Resolution at 1-800-521-0538 or Allstate at 1-800-390-1277. Read the prospectuses carefully before investing.

For the most recent month-end performance, please call Talcott Resolution at 1-800-521-0538 or Allstate at 1-800-390-1277.

Maturity detail includes only cash bonds and cash equivalents.

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. Mutual funds that invest in government securities in government securities are not guaranteed. Mortgage-backed securities are subject to prepayment risk. Variable annuities are long-term investments designed for retirement purposes. Withdrawals prior to age 59 1/2 may be subject to a 10% IRS penalty.

The use of derivatives involves additional risks, such as the potential inability to terminate or sell derivatives positions and the potential failure of the other party to the instrument to meet its obligations.

Credit qualities are shown as a percentage of net assets. A bond rated Baa or higher (Prime-3 or higher, for short-term debt) is considered investment grade. This chart reflects the highest security rating provided by one or more of Standard & Poor's, Moody's and Fitch. Short-term cash bonds rated A-1+ are included in the AAA-rating category. Ratings and portfolio credit quality will vary over time. Credit quality includes the fixed-income portion of the portfolio. Derivative instruments, including currency forwards, are only included to the extent of any unrealized gain or loss on such instruments and are shown in the not-rated category. Cash is also shown in the not-rated category. The fund itself has not been rated by an independent rating agency.

Lipper is an industry research firm whose rankings are based on total return performance, vary over time, and do not reflect the effects of sales charges. Past performance is not indicative of future results.

Risk Characteristics as of 12/31/19

Avg. Eff. Maturity 6.36
Avg. Eff. Duration -0.96
Avg. Coupon 5.81
Avg. Yield to Maturity 4.62
Alpha (%) --
Beta --
R Squared --
Standard Deviation (3 yrs.) 3.23

Maturity Details

0 to 1 yr. -21.44%
1 to 5 yrs. 68.28%
5 to 10 yrs. 47.45%
10 to 15 yrs. 3.31%
Over 15 yrs. 2.40%

Quality Ratings

AAA 66.98%
AA 1.44%
A 2.26%
BBB 10.21%
BB 23.89%
B 9.43%
CCC and Below 5.39%
Not Rated -19.60%

Holdings

Fnma Fn30 Tba Umbs 03.5000 01/01/2050 13.19%
Fnma Fn30 Tba Umbs 03.0000 01/01/2050 9.64%
Fnma Fn30 Tba Umbs 04.0000 01/01/2050 8.89%
Fnma Fn30 Tba Umbs 03.0000 02/01/2050 5.78%
Fnma Fn30 Tba Umbs 02.5000 02/01/2050 3.76%
Fnma Fn30 Tba Umbs 05.5000 01/01/2050 1.53%
Gnma Gii30 Tba 04.5000 01/01/2050 1.49%
Gnma Gii30 Tba 04.0000 01/01/2050 1.47%
United Mexican States Usd 05.5500 01/21/2045 1.06%
Wfrbs 2012-C7 F P/P 144a 04.5000 06/15/2045 0.95%
Top 10 holdings, total: 47.76%

Top 10 holdings as of 12/31/19
1: Fnma Fn30 Tba Umbs 03.5000 01/01/2050 13.19%
2: Fnma Fn30 Tba Umbs 03.0000 01/01/2050 9.64%
3: Fnma Fn30 Tba Umbs 04.0000 01/01/2050 8.89%
4: Fnma Fn30 Tba Umbs 03.0000 02/01/2050 5.78%
5: Fnma Fn30 Tba Umbs 02.5000 02/01/2050 3.76%
6: Fnma Fn30 Tba Umbs 05.5000 01/01/2050 1.53%
7: Gnma Gii30 Tba 04.5000 01/01/2050 1.49%
8: Gnma Gii30 Tba 04.0000 01/01/2050 1.47%
9: United Mexican States Usd 05.5500 01/21/2045 1.06%
10: Wfrbs 2012-C7 F P/P 144a 04.5000 06/15/2045 0.95%
Holdings represent 47.76% of portfolio
Top 10 holdings as of 11/30/19
1: Fnma Fn30 Tba Umbs 03.0000 01/01/2050 13.71%
2: Fnma Fn30 Tba Umbs 03.5000 01/01/2050 13.39%
3: Fnma Fn30 Tba Umbs 04.0000 12/01/2049 9.02%
4: Fnma Fn30 Tba Umbs 02.5000 12/01/2049 3.83%
5: Fnma Fn30 Tba Umbs 05.5000 12/01/2049 1.56%
6: Gnma Gii30 Tba 04.5000 12/01/2049 1.51%
7: Gnma Gii30 Tba 04.0000 01/01/2050 1.50%
8: United Mexican States Usd 05.5500 01/21/2045 1.07%
9: Wfrbs 2012-C7 F P/P 144a 04.5000 06/15/2045 0.96%
10: Hellenic Republic Regs 03.0000 02/24/2030 0.72%
Holdings represent 47.27% of portfolio
Top 10 holdings as of 10/31/19
1: Fnma Fn30 Tba Umbs 03.5000 11/01/2049 13.49%
2: Fnma Fn30 Tba Umbs 03.0000 12/01/2049 11.36%
3: Fnma Fn30 Tba Umbs 04.0000 11/01/2049 9.09%
4: Fnma Fn30 Tba Umbs 02.5000 11/01/2049 3.87%
5: Fnma Fn30 Tba Umbs 05.5000 11/01/2049 1.57%
6: Gnma Gii30 Tba 04.5000 11/01/2049 1.53%
7: Gnma Gii30 Tba 04.0000 11/01/2049 1.52%
8: United Mexican States Usd 05.5500 01/21/2045 1.07%
9: Wfrbs 2012-C7 F P/P 144a 04.5000 06/15/2045 0.96%
10: Hellenic Republic Regs 03.0000 02/24/2030 0.75%
Holdings represent 45.21% of portfolio
Top 10 holdings as of 09/30/19
1: Fnma Fn30 Tba Umbs 03.5000 10/01/2049 13.46%
2: Fnma Fn30 Tba Umbs 03.0000 10/01/2049 11.35%
3: Fnma Fn30 Tba Umbs 04.0000 10/01/2049 9.08%
4: Fnma Fn30 Tba Umbs 02.5000 11/01/2049 3.87%
5: Gnma Gii30 Tba 04.5000 10/01/2049 3.05%
6: Fnma Fn30 Tba Umbs 05.5000 10/01/2049 1.58%
7: Gnma Gii30 Tba 04.0000 10/01/2049 1.52%
8: United Mexican States Usd 05.5500 01/21/2045 1.06%
9: Wfrbs 2012-C7 F P/P 144a 04.5000 06/15/2045 0.95%
10: Hellenic Republic Regs 03.0000 02/24/2030 0.73%
Holdings represent 46.65% of portfolio

Sector Weightings as of 12/31/19

Cash Investment Non-Cash Investment Total Portfolio
Weight Spread Duration Weight Spread Duration Weight Spread Duration
Agency pass-through 1.05% 0.03 47.97% 2.01 49.02% 2.04
Commercial MBS 8.24% 0.28 13.62% 0.25 21.86% 0.53
Net cash 21.59% 0.00 0.00% 0.00 21.59% 0.00
Agency CMO 17.78% 0.64 0.49% 0.02 18.27% 0.66
High-yield corporate bonds 15.39% 0.44 0.00% 0.00 15.39% 0.44
Residential MBS (non-agency) 11.13% 0.46 0.00% 0.00 11.13% 0.46
Emerging-market bonds 10.29% 0.64 0.00% 0.00 10.29% 0.64
Convertible securities 3.77% 0.07 0.00% 0.00 3.77% 0.07
International Treasury/agency 3.67% 0.22 0.00% -0.04 3.67% 0.18
Investment-grade corporate bonds 3.09% 0.15 0.00% 0.00 3.09% 0.15
Bank loans 2.01% 0.08 0.00% 0.00 2.01% 0.08
Asset-backed securities (ABS) 1.82% 0.07 0.00% 0.00 1.82% 0.07
Equity investments 0.17% 0.00 0.00% 0.00 0.17% 0.00
Interest rate swaps 0.00% 0.00 0.00% -3.05 0.00% -3.05
U.S. Treasury/agency 0.00% 0.00 0.00% 0.01 0.00% 0.01

Spread duration is displayed in years and reflects the contribution by sector to the portfolio's total spread duration with the exception of the Treasury and Interest-rate swap sectors where effective duration is displayed. Spread duration estimates the price sensitivity of a specific sector or asset class to a 100 basis-point movement, 1%, (either widening or narrowing) in its yield spread relative to Treasuries. Effective duration provides a measure of a portfolio's interest-rate sensitivity. The longer a portfolio's duration, the more sensitive the portfolio is to shifts in the interest rates. Allocations may not total 100% of net assets because the table includes the notional value of derivatives (the economic value for purposes of calculating periodic payment obligations), in addition to the market value of securities.

Portfolio allocations will vary over time. The unclassified sector (where applicable) includes exchange traded funds and other securities not able to be classified by sector.

Maturity detail includes only cash bonds and cash equivalents.

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. Mutual funds that invest in government securities in government securities are not guaranteed. Mortgage-backed securities are subject to prepayment risk. Variable annuities are long-term investments designed for retirement purposes. Withdrawals prior to age 59 1/2 may be subject to a 10% IRS penalty.

The use of derivatives involves additional risks, such as the potential inability to terminate or sell derivatives positions and the potential failure of the other party to the instrument to meet its obligations.

Credit qualities are shown as a percentage of net assets. A bond rated Baa or higher (Prime-3 or higher, for short-term debt) is considered investment grade. This chart reflects the highest security rating provided by one or more of Standard & Poor's, Moody's and Fitch. Short-term cash bonds rated A-1+ are included in the AAA-rating category. Ratings and portfolio credit quality will vary over time. Credit quality includes the fixed-income portion of the portfolio. Derivative instruments, including currency forwards, are only included to the extent of any unrealized gain or loss on such instruments and are shown in the not-rated category. Cash is also shown in the not-rated category. The fund itself has not been rated by an independent rating agency.

Country Allocation as of 12/31/19

United States 84.08%
Greece 3.67%
Brazil 2.01%
Mexico 1.46%
Indonesia 1.21%
Argentina 1.07%
Dominican Republic 1.00%
Ivory Coast 0.99%
Canada 0.64%
 
Other		 3.87%
United Kingdom 0.58%
Egypt 0.56%
Senegal 0.48%
Angola 0.42%
Ecuador 0.29%
Russia 0.27%
Bermuda 0.25%
Norway 0.25%
Ireland 0.23%
Luxembourg 0.22%
Israel 0.17%
Venezuela 0.16%
South Africa 0.14%
El Salvador 0.13%
Cayman Islands 0.12%
Italy 0.10%
Netherlands 0.08%
Switzerland 0.08%
New Zealand 0.06%
France 0.05%
Sweden -0.03%
Australia -0.04%
Japan -0.06%
Czech Republic -0.15%
European Community -0.49%

Expenses

Sales Charges/Fees

Breakpoint Sales Charge Dealer Allowance CDSC Liab
$0 - $0 0.00% 0.00% N

Maturity detail includes only cash bonds and cash equivalents.

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. Mutual funds that invest in government securities in government securities are not guaranteed. Mortgage-backed securities are subject to prepayment risk. Variable annuities are long-term investments designed for retirement purposes. Withdrawals prior to age 59 1/2 may be subject to a 10% IRS penalty.

The use of derivatives involves additional risks, such as the potential inability to terminate or sell derivatives positions and the potential failure of the other party to the instrument to meet its obligations.'

Credit qualities are shown as a percentage of net assets. A bond rated Baa or higher (Prime-3 or higher, for short-term debt) is considered investment grade. This chart reflects the highest security rating provided by one or more of Standard & Poor's, Moody's and Fitch. Short-term cash bonds rated A-1+ are included in the AAA-rating category. Ratings and portfolio credit quality will vary over time. Credit quality includes the fixed-income portion of the portfolio. Derivative instruments, including currency forwards, are only included to the extent of any unrealized gain or loss on such instruments and are shown in the not-rated category. Cash is also shown in the not-rated category. The fund itself has not been rated by an independent rating agency.

‡ Lipper is an industry research firm whose rankings are based on total return performance, vary over time, and do not reflect the effects of sales charges. Past performance is not indicative of future results.

CDSC

Year Percent
1 7.00%
2 7.00%
3 6.00%
4 5.00%
5 4.00%
6 3.00%
7 2.00%
8+ 0.00%