Minnesota Tax Exempt Income Fund  (PXMNX)

Seeking a high level of tax-free income


Track this fund

Objective

The fund seeks as high a level of current income exempt from federal income tax and Minnesota personal income tax as we believe is consistent with preservation of capital.

Fund price

Yesterday’s close 52-week high 52-week low
Net asset value $9.32
-0.21% | $-0.02
$9.43
10/20/16
$9.10
12/01/16
Historical fund price

Consistency of positive performance over five years

Performance represents 5-year returns in rolling quarter-end periods since inception.

Performance shown does not reflect the effects of any sales charges. Note that returns of 0.00% are counted as positive periods. For complete fund performance, please click on the performance tab.

7.88%

Best 5-year annualized return

(for period ending 12/31/95)


1.45%

Worst 5-year annualized return

(for period ending 12/31/08)


4.88%

Average 5-year annualized return


Fund facts as of 09/30/17

Total net assets
$109.00M
Turnover (fiscal year end)
15%
Dividend frequency (view rate)
Monthly
Number of holdings
167
Fiscal year end
May
CUSIP / Fund code
74683M308 / 0027
Inception Date
10/23/89
Category
Tax-free Income
Open to new investors
Ticker
PXMNX

Management team


Portfolio Manager

Portfolio Manager

Strategy and process

  • Tax-advantaged income: The fund offers Minnesota residents the potential for high current income that is free from federal income tax and Minnesota State personal income taxes.
  • Focus on performance: The portfolio managers seek to provide a competitive yield through a combination of careful security selection and portfolio construction strategies.
  • A diversified portfolio: A broadly diversified portfolio enables the managers to pursue current tax-free income opportunities while managing risk and seeking to preserve capital.

Literature

Fund documents

Fact Sheet (Y share) (PDF)
Prospectus (PDF)
Annual Report (PDF)
Semiannual Report (PDF)
Brochure (PDF)
Proxy voting results (Form N-PX) (PDF)
Quarterly commentary (PDF)
Comparing Putnam's tax-free income funds (PDF)

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Performance

  • Total return (%) as of 09/30/17

  • Annual performance as of 09/30/17

Annualized performance 1 yr. 3 yrs. 5 yrs. 10 yrs.
Before sales charge 0.55% 2.48% 2.38% 3.99%
After sales charge -3.47% 1.10% 1.54% 3.56%
Bloomberg Barclays Municipal Bond Index 0.87% 3.19% 3.01% 4.52%

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 loss when you sell your shares. To obtain the most recent month-end performance, visit putnam.com. Performance assumes reinvestment of distributions and does not account for taxes. Returns before sales charge do not reflect the current maximum sales charges as indicated below. Had the sales charge been reflected, returns would be lower. Returns at public offering price (after sales charge) for class A and class M shares reflect the current maximum initial sales charges of 5.75% and 3.50% for equity funds and Putnam Absolute Return 500 Fund and 700 Fund, and 4.00% and 3.25% for income funds (1.00% and 0.75% for Putnam Floating Rate Income Fund, Putnam Absolute Return 100 Fund and 300 Fund, and Putnam Short-Term Municipal Income Fund), respectively. Class B share returns reflect the applicable contingent deferred sales charge (CDSC), which is 5% in the first year, declining to 1% in the sixth year, and is eliminated thereafter (except for Putnam Floating Rate Income Fund, Putnam Absolute Return 100 Fund and 300 Fund, and Putnam Short-Term Municipal Income Fund, which is 1% in the first year, declining to 0.5% in the second year, and is eliminated thereafter). Class C shares reflect a 1% CDSC the first year that is eliminated thereafter. Performance for class B, C, M, R, T1, and Y shares prior to their inception is derived from the historical performance of class A shares, adjusted for the applicable sales charge (or CDSC) and, except for class Y shares, the higher operating expenses for such shares (with the exception of Putnam Tax-Free High Yield Fund and Putnam AMT-Free Municipal Fund, which are based on the historical performance of class B shares). Class R5/R6 shares, available to qualified employee-benefit plans only, are sold without an initial sales charge and have no CDSC. Class Y shares are generally only available for corporate and institutional clients and have no initial sales charge. Performance for Class R5/R6 shares before their inception are derived from the historical performance of class Y shares, which have not been adjusted for the lower expenses; had they, returns would have been higher. Class A, M, and T1 shares of Putnam money market funds have no initial sales charge. For a portion of the period, some funds had expenses limitations or had been sold on a limited basis with limited assets and expenses, without which returns would be lower.

Performance snapshot

  Before sales charge After sales charge
1 mt. as of 09/30/17 -0.41 % -4.39 %
YTD as of 10/19/17 4.12 % -0.04 %

Yield

Distribution rate before sales charge
as of 10/19/17
2.62%
Distribution rate after sales charge
as of 10/19/17
2.51%
30-day SEC yield as of 09/29/17
(after sales charge)
1.30%

Risk-adjusted performance as of 09/30/17

Sharpe ratio (3 yrs.) 0.87
Information ratio (3 yrs.) -0.86

Volatility as of 09/30/17

Standard deviation (3 yrs.) 2.54%
Beta 0.77
R-squared 0.98

Lipper rankings as of 09/30/17

Minnesota Municipal Debt Funds Percentile ranking Rank/Funds in category
1 yr. 32% 14/44
3 yrs. 52% 23/44
5 yrs. 56% 21/37
10 yrs. 32% 10/31

Morningstar ratings as of 09/30/17

Muni Minnesota Rating Funds in category
Overall (52)
3 yrs. (52)
5 yrs. (43)
10 yrs. (35)

Distributions

Accrual days 29
Accrual start date 09/01/17
Accrual end date 09/29/17
Payable date 09/29/17
Non-taxable income $0.021922091
Extra taxable income $0.0

Lipper rankings are based on total return without sales charge relative to all share classes of funds with similar objectives as determined by Lipper. Past performance is not indicative of future results.

The Morningstar RatingTM for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

The up-market capture ratio is used to evaluate how well an investment manager performed relative to an index during periods when that index has risen. The ratio is calculated by dividing the manager’s returns by the returns of the index during the up-market, and multiplying that factor by 100. The down-market capture ratio is used to evaluate how well an investment manager performed relative to an index during periods when that index has dropped. The ratio is calculated by dividing the manager’s returns by the returns of the index during the down-market and multiplying that factor by 100.


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Holdings

Top 10 holdings as of 09/30/17

Minnesota St 05.0000 06/01/2037 3.21%
Minnetonka Isd 276-B 00.0000 02/01/2023 1.66%
Univ Of Mn Rgts-A 05.0000 09/01/2039 1.63%
Sthrn Mn Pwr Cab -A 00.0000 01/01/2024 1.60%
Sthrn Mn Muni Pwr Agy 05.0000 01/01/2047 1.59%
Saint Cloud Mn Hlth C 05.0000 05/01/2046 1.56%
Hennepin S/Tax-B-Bal 05.0000 12/15/2026 1.40%
Cloquet Isd 94-B 05.0000 02/01/2027 1.22%
Minneapolis Arpts-B-R 05.0000 01/01/2022 1.21%
Met Council-Ref-C 04.0000 03/01/2025 1.13%
Top 10 holdings, percent of portfolio 16.21%

Full portfolio holdings as of 06/30/17

MINNESOTA ST 05.0000 06/01/2037 3.21%
MINNETONKA ISD 276-B 00.0000 02/01/2023 1.69%
STHRN MN PWR CAB -A 00.0000 01/01/2024 1.63%
SAINT CLOUD MN HLTH C 05.0000 05/01/2046 1.59%
HENNEPIN S/TAX-B-BAL 05.0000 12/15/2026 1.43%
CLOQUET ISD 94-B 05.0000 02/01/2027 1.27%
MINNEAPOLIS ARPTS-B-R 05.0000 01/01/2022 1.26%
MET COUNCIL-REF-C 04.0000 03/01/2025 1.17%
JORDAN ISD 717-A 05.0000 02/01/2028 1.11%
UNIV OF MN RGTS-A 05.0000 04/01/2035 1.11%
UNIV OF MN RGTS-A 05.0000 04/01/2041 1.10%
WSTRN MN MUNI PWR AGY 05.0000 01/01/2031 1.10%
WSTRN MUNI PWR-A-REF 05.0000 01/01/2030 1.10%
LAKEVILLE ISD194-REF 05.0000 02/01/2021 1.08%
MINNESOTA ST-B 05.0000 10/01/2030 1.08%
MN HGR EDU FACS-8-K 05.0000 03/01/2037 1.08%
ST PAUL HSG-A-REF 05.0000 07/01/2033 1.08%
CENTRAL MN PWR AGY 05.0000 01/01/2032 1.07%
MINNESOTA ST-A 05.0000 06/01/2038 1.07%
MN ST CLG-FUND-A 05.0000 10/01/2031 1.07%
ROCHESTER ELEC-B 05.0000 12/01/2043 1.07%
ROCHESTER HLTH 05.8750 07/01/2030 1.07%
UNIV MN SER A 05.5000 07/01/2021 1.07%
WILLMAR-A-REF 05.0000 02/01/2021 1.07%
UNIV MN 05.2500 12/01/2030 1.06%
ST LOUIS PK-REF 05.7500 07/01/2039 1.05%
MN ST CLGS & UNIV-A 04.0000 10/01/2025 1.04%
MINN & ST PAUL ARPT-A 05.0000 01/01/2035 1.03%
MN AGRIC-C1-HLTH CARE 05.0000 02/15/2030 1.03%
MINNESOTA ST HGR EDU 05.0000 05/01/2047 1.02%
ROCHESTER ISD 535-A 03.0000 02/01/2023 1.02%
MN HGR ED-CARLETON 05.0000 03/01/2040 1.01%
ST CLOUD HLTH 05.3750 05/01/2031 1.01%
ST LOUIS PK-C-PK NIC 05.7500 07/01/2030 1.01%
ST PAUL HSG-GILLETTE 05.0000 02/01/2029 1.00%
MINNEAPOLIS ETC-B-REF 05.0000 01/01/2029 0.98%
NRTHN MUN PWR 05.0000 01/01/2021 0.98%
MN MUN PWR 05.2500 10/01/2027 0.96%
ST PAUL HSG-A-ALLINA 05.0000 11/15/2019 0.96%
MN HGR ED-6R-BETHEL 05.5000 05/01/2037 0.94%
MAPLE GROVE HLTH-REF 05.0000 05/01/2030 0.93%
MINNEAPOLIS ARPT-C 05.0000 01/01/2036 0.93%
MINNEAPOLIS ARPT-C 05.0000 01/01/2037 0.93%
ROCHESTER HLTH CARE 05.0000 11/15/2029 0.88%
BURNSVL ISD 191 FAC-A 05.0000 02/01/2025 0.84%
MINNESOTA-A 05.0000 08/01/2035 0.84%
MN HSG FIN AGY-E-AMT 03.5000 01/01/2046 0.83%
DOUGLAS HLTH-UNREF 06.2500 07/01/2038 0.82%
MINNEAPOLIS ETC-B-REF 05.0000 01/01/2023 0.81%
MN HGR EDU FACS-8-L 05.0000 04/01/2035 0.81%
WOODBURY-A 03.0000 02/01/2022 0.79%
ROCHESTER HLTH CARE-E 05.0000 11/15/2038 0.77%
MN HGR ED-7F-ST OLAF 04.5000 10/01/2030 0.76%
STHRN MN MUN PWR-A 05.2500 01/01/2030 0.76%
MN HGR ED-H-ST SCHOLA 05.1250 12/01/2040 0.73%
MN ST HGR EDU FACS-Q 05.0000 10/01/2032 0.73%
ST PAUL PORT-1-REGION 05.0000 08/01/2036 0.72%
SHAKOPEE HLTHCARE-REF 05.0000 09/01/2034 0.71%
ROCHESTER HLTHCR FAC 05.0000 07/01/2033 0.69%
CENTER CITY HLTH 05.0000 11/01/2041 0.68%
SAINT PAUL MN HSG & R 05.0000 11/15/2040 0.66%
MINNEAPOLIS REV-NMDP 04.8750 08/01/2025 0.65%
ANOKA CNTY-IMPT-A 05.0000 02/01/2024 0.60%
ROCHESTER HLTH CARE 05.0000 11/15/2036 0.60%
CIRCLE PINES SD-CABS 00.0000 02/01/2025 0.59%
HENNEPIN CO-A 05.0000 12/01/2038 0.59%
DEEPHAVEN CHTR SCH-A 05.1250 07/01/2033 0.58%
ROSEMOUNT ISD 196-A 05.0000 02/01/2027 0.58%
MN PUB FACS AUTH-A 05.0000 03/01/2030 0.57%
CHASKA ISD112-A 05.0000 02/01/2031 0.56%
WSTRN MN MUNI PWR AGY 05.0000 01/01/2032 0.56%
HENNEPIN CO-A 05.0000 12/01/2041 0.55%
LAKEVILLE ISD 194-B 04.0000 02/01/2027 0.55%
MN HGR EDU-REF 8-H 05.0000 10/01/2022 0.55%
ROCHESTER ELEC-A-REF 05.0000 12/01/2035 0.55%
ROCHESTER ELEC-A-REF 05.0000 12/01/2036 0.55%
S MN PWR AGY-A-REF 05.0000 01/01/2036 0.55%
MAPLE GROVE HLTH-REF 05.0000 05/01/2031 0.54%
MAPLE GROVE HLTH-REF 05.0000 05/01/2032 0.54%
MINNESOTA GEN REV-REF 05.0000 03/01/2029 0.54%
ST PAUL HSG-A-REF 05.0000 07/01/2032 0.54%
MINNESOTA ST-A-UNREF 05.0000 10/01/2024 0.53%
NTHRN MUN PWR-SER A2 05.0000 01/01/2024 0.53%
ROCORI AREA ISD 750-B 05.0000 02/01/2028 0.53%
MINNEAPOLIS HLTH-A 05.2500 08/15/2035 0.52%
MN HFA NON AMT 05.1000 01/01/2040 0.52%
ST PAUL HSG ROSSY-A 05.0500 10/01/2027 0.52%
BURNSVILLE ISD 191-A 04.0000 02/01/2033 0.51%
CENTER CITY HTLH CARE 05.0000 11/01/2044 0.51%
DEEPHAVEN CHTR-REF-A 05.2500 07/01/2040 0.51%
MINNESOTA ST HGR EDU 04.0000 03/01/2037 0.51%
MN ST HGR ED FACS AUT 05.0000 10/01/2031 0.51%
MN ST-SER B 04.0000 08/01/2026 0.51%
MOORHEAD EDUCTNL-REF 05.0000 12/01/2040 0.51%
NTHRN MUN PWR-SER A1 05.0000 01/01/2019 0.51%
ROCHESTER HLTH CARE-D 05.0000 11/15/2038 0.51%
ROCHESTER HLTH-B-MAYO 00.8400 11/15/2038 0.51%
BRAINERD ISD 181-RF-A 04.0000 02/01/2021 0.50%
MN HGR ED-A-UNIV ST T 05.0000 10/01/2039 0.50%
NC MED CARE COMM 05.2500 10/01/2037 0.50%
ST PAUL HSG & REDEV-A 05.0000 07/01/2033 0.50%
ST PAUL MN HSG & REDE 05.0000 12/01/2037 0.50%
DULUTH HSG-SCHS-A 05.8750 11/01/2040 0.49%
MN HGR ED SER SIX U 04.7500 10/01/2033 0.49%
ST CLOUD HLTH-A-PRERF 05.1250 05/01/2030 0.49%
HAM LAKE CHRT SCH-A 05.0000 07/01/2047 0.48%
HENNEPIN S/TAX 04.7500 12/15/2029 0.48%
DOUGLAS HLTH-PREREF 06.2500 07/01/2038 0.45%
MN HGR EDU-7S 03.0000 05/01/2022 0.41%
WINONA HLTH CARE-REF 05.0000 07/01/2034 0.40%
MINNESOTA ST MUNI PWR 05.0000 10/01/2029 0.39%
OTSEGO CHRT SCH-A 05.0000 09/01/2044 0.39%
ST PAUL HSG-REF-A-PKG 05.0000 08/01/2035 0.39%
MINNETONKA HSG VAR-RF 00.8800 05/15/2034 0.36%
SARTELL ISD CAB-B 00.0000 02/01/2034 0.36%
MINNETONKA ISD 276-E 05.0000 03/01/2029 0.35%
COLOGNE CHTR SCH-A 05.0000 07/01/2034 0.34%
ST PAUL HSG-A-REF 04.6250 03/01/2043 0.34%
GUAM WATERWORKS AUTH 05.6250 07/01/2040 0.31%
MN HGR ED-SEVEN M 05.0000 03/01/2031 0.31%
SAN BERNARDINO CLG-B 00.0000 08/01/2044 0.31%
ST PAUL HSG & REDEV-A 06.6250 09/01/2042 0.29%
NJ ECON DEV AUTH-AMT 05.3750 01/01/2043 0.28%
NTRHN MUN PWR-REF 05.0000 01/01/2028 0.28%
MN MUNI PWR AGY 05.0000 10/01/2033 0.27%
SHAKOPEE HLTHCARE-REF 05.0000 09/01/2029 0.27%
WARREN HLTHCR-A-REF 05.0000 07/01/2040 0.27%
CUMBERLAND CNTY PA MU 05.0000 01/01/2038 0.26%
FOREST LAKE-A 05.5000 08/01/2036 0.26%
INTERMEDIATE SD 287 04.0000 05/01/2027 0.26%
MINNEAPOLIS HLTH-REF 05.0000 11/15/2044 0.26%
OH TPK COMMN-A1-JR 05.0000 02/15/2048 0.26%
BAYTOWN TWP MN LEASE 04.0000 08/01/2036 0.25%
PUB FIN AUTH-A 05.7500 11/15/2044 0.25%
ROCHESTER HLTH CARE 04.0000 11/15/2041 0.25%
ST PAUL HSG & REDEV-A 05.0000 07/01/2035 0.25%
TARRANT CO CULT EDU 05.0000 10/01/2044 0.25%
HAM LAKE CHRT SCH-A 05.0000 11/01/2036 0.24%
ALEXANDRIA VA INDL DE 05.0000 10/01/2045 0.23%
ST PAUL HSG & RED-A 04.0000 09/01/2036 0.23%
WOODBURY CHRT SCH-A 05.0000 12/01/2032 0.22%
WOODBURY CHRT SCH-A 05.0000 12/01/2027 0.21%
MN ST HGR EDU FACS-7R 04.0000 12/01/2019 0.20%
PR S/TAX-CABS-A 00.0000 08/01/2044 0.19%
ST PAUL PORT AUTH P/P 144A 04.5000 10/01/2037 0.17%
FRANKLIN CNTY OH HLTH 05.0000 11/15/2023 0.16%
MINNESOTA MUNI PWR-A 05.0000 10/01/2034 0.16%
MI FIN AUTH-C-6 05.0000 07/01/2033 0.15%
MINNEAPOLIS HLTH-B2 00.7300 11/15/2035 0.14%
NASSAU CO ECON ASSIST 05.0000 07/01/2033 0.11%
CHICAGO MTR FUEL TAX 05.0000 01/01/2030 0.10%
E GRAND FORKS PCR-A 06.0000 04/01/2018 0.10%
MINNEAPOLIS REV 04.0000 06/01/2027 0.10%
MINNEAPOLIS REV 04.0000 06/01/2031 0.10%
MN HGR EDU FACS-8N 04.0000 10/01/2026 0.09%
ST CLOUD HLTH-A-UNREF 05.1250 05/01/2030 0.03%
MINNESOTA ST-A-PREREF 05.0000 10/01/2024 0.01%

Prior top 10 holdings

Top 10 holdings as of 09/30/17
Minnesota St 05.0000 06/01/2037
Minnetonka Isd 276-B 00.0000 02/01/2023
Univ Of Mn Rgts-A 05.0000 09/01/2039
Sthrn Mn Pwr Cab -A 00.0000 01/01/2024
Sthrn Mn Muni Pwr Agy 05.0000 01/01/2047
Saint Cloud Mn Hlth C 05.0000 05/01/2046
Hennepin S/Tax-B-Bal 05.0000 12/15/2026
Cloquet Isd 94-B 05.0000 02/01/2027
Minneapolis Arpts-B-R 05.0000 01/01/2022
Met Council-Ref-C 04.0000 03/01/2025
Holdings represent 16.21% of portfolio
Top 10 holdings as of 08/31/17
Minnesota St 05.0000 06/01/2037
Minnetonka Isd 276-B 00.0000 02/01/2023
Sthrn Mn Pwr Cab -A 00.0000 01/01/2024
Saint Cloud Mn Hlth C 05.0000 05/01/2046
Hennepin S/Tax-B-Bal 05.0000 12/15/2026
Cloquet Isd 94-B 05.0000 02/01/2027
Minneapolis Arpts-B-R 05.0000 01/01/2022
Met Council-Ref-C 04.0000 03/01/2025
Univ Of Mn Rgts-A 05.0000 04/01/2035
Univ Of Mn Rgts-A 05.0000 04/01/2041
Holdings represent 15.50% of portfolio
Top 10 holdings as of 07/31/17
Minnesota St 05.0000 06/01/2037
Minnetonka Isd 276-B 00.0000 02/01/2023
Sthrn Mn Pwr Cab -A 00.0000 01/01/2024
Saint Cloud Mn Hlth C 05.0000 05/01/2046
Hennepin S/Tax-B-Bal 05.0000 12/15/2026
Cloquet Isd 94-B 05.0000 02/01/2027
Minneapolis Arpts-B-R 05.0000 01/01/2022
Met Council-Ref-C 04.0000 03/01/2025
Univ Of Mn Rgts-A 05.0000 04/01/2035
Univ Of Mn Rgts-A 05.0000 04/01/2041
Holdings represent 15.52% of portfolio
Top 10 holdings as of 06/30/17
Minnesota St 05.0000 06/01/2037
Minnetonka Isd 276-B 00.0000 02/01/2023
Sthrn Mn Pwr Cab -A 00.0000 01/01/2024
Saint Cloud Mn Hlth C 05.0000 05/01/2046
Hennepin S/Tax-B-Bal 05.0000 12/15/2026
Cloquet Isd 94-B 05.0000 02/01/2027
Minneapolis Arpts-B-R 05.0000 01/01/2022
Met Council-Ref-C 04.0000 03/01/2025
Jordan Isd 717-A 05.0000 02/01/2028
Univ Of Mn Rgts-A 05.0000 04/01/2035
Holdings represent 15.47% of portfolio

Portfolio composition as of 09/30/17

Municipal bonds and notes 98.60%
Cash and net other assets 1.40%

Fixed income statistics as of 09/30/17

Average stated maturity 16.20 yrs.
Average effective maturity 5.68 yrs.
Option adjusted duration 6.70 yrs.
Duration to worst 4.72 yrs.
Average yield to maturity 3.20%
Average coupon 4.66%
Average price $108.85
AMT exposure 3.20%

Quality rating as of 09/30/17

AAA 10.51%
AA 40.85%
A 27.27%
BBB 11.49%
BB 3.15%
Not Rated 5.33%
Cash and net other assets 1.40%

Fund characteristics will vary over time.

Due to rounding, percentages may not equal 100%.

Consider these risks before investing: Bond prices may fall or fail to rise over time for several reasons, including general financial market conditions, changing market perceptions of the risk of default, changes in government intervention in the financial markets, and factors related to a specific issuer. These factors may also lead to periods of high volatility and reduced liquidity in the bond markets. Single-state investments are at risk of common economic forces and other factors affecting a state's tax-exempt investments. This may result in greater losses and volatility. Capital gains, if any, are taxed at the federal and, in most cases, state levels. For some investors, investment income may be subject to the federal alternative minimum tax. 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 fees and expenses. Tax-exempt bonds may be issued under the Internal Revenue Code only by limited types of issuers for limited types of projects. As a result, the fund's investments may be focused in certain market segments and be more vulnerable to fluctuations in the values of the securities it holds than a more broadly invested fund. Interest the fund receives might be taxable. You can lose money by investing in the fund.

Credit qualities are shown as a percentage of net assets. A bond rated BBB or higher (SP-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 are included in the cash and net other assets category. Ratings and portfolio credit quality will vary over time. 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 cash and net other assets category. Cash is also shown in the cash and net other assets category. The fund itself has not been rated by an independent rating agency.

Top Industry Sectors as of 09/30/17

Health care 18.75%
Education 18.37%
Prerefunded 18.27%
Utilities 14.77%
Local Debt 9.75%
State Debt 7.15%
Transportation 6.25%
Other 2.07%
Special Tax 1.71%
 
Other
2.91%
Cash and net other assets 1.40%
Housing 1.24%
Industrials 0.27%

The unclassified sector (where applicable) includes exchange traded funds and other securities not able to be classified by sector.

Sectors will vary over time. Represents the equity portion of the portfolio.


Expenses

Expense ratio

Class A Class B Class C Class M Class Y
Total expense ratio 0.87% 1.49% 1.64% 1.14% 0.64%
What you pay 0.87% 1.49% 1.64% 1.14% 0.64%

Sales charge/Dealer allowance

 Breakpoint Class A Class B Class C Class M Class Y
$0-$49,999 4.00% / 3.50% 0.00% / 4.00% 0.00% / 1.00% 3.25% / 3.00% --
$50,000-$99,999 4.00% / 3.50% 0.00% / 4.00% 0.00% / 1.00% 2.25% / 2.00% --
$100,000-$249,999 3.25% / 2.75% -- 0.00% / 1.00% 1.25% / 1.00% --
$250,000-$499,999 2.50% / 2.00% -- 0.00% / 1.00% 1.00% / 1.00% --
$500,000-$999,999 0.00% / 1.00% -- -- -- --
$1M-$4M 0.00% / 1.00% -- -- -- --
$4M-$50M 0.00% / 0.50% -- -- -- --
$50M+ 0.00% / 0.25% -- -- -- --

CDSC

  Class A (sales for $500,000+) Class B Class C Class M Class Y
0 to 9 mts. 1.00% 5.00% 1.00% -- --
9 to 12 mts. 0.00% 5.00% 1.00% -- --
2 yrs. -- 4.00% 0.00% -- --
3 yrs. -- 3.00% 0.00% -- --
4 yrs. -- 3.00% 0.00% -- --
5 yrs. -- 2.00% 0.00% -- --
6 yrs. -- 1.00% 0.00% -- --
7+ yrs. -- 0.00% 0.00% -- --

Trail commissions

  Class A Class B Class C Class M Class Y
  0.15% 1 0.20% 1.00% 0.40% 0.00%
  0.20% 2 NA NA NA NA
  0.25% 3 NA NA NA NA
  1. Through 03/06/92
  2. After 03/06/92through 03/31/05
  3. After 03/31/05

For sales and trail commission information on purchases over $500,000 and participant-directed qualified retirement plans, see a Putnam fund prospectus and the statement of additional information.

The Bloomberg Barclays Municipal Bond Index is an unmanaged index of long-term fixed-rate investment-grade tax-exempt bonds. You cannot invest directly in an index.

Consider these risks before investing: Bond prices may fall or fail to rise over time for several reasons, including general financial market conditions, changing market perceptions of the risk of default, changes in government intervention in the financial markets, and factors related to a specific issuer. These factors may also lead to periods of high volatility and reduced liquidity in the bond markets. Single-state investments are at risk of common economic forces and other factors affecting a state's tax-exempt investments. This may result in greater losses and volatility. Capital gains, if any, are taxed at the federal and, in most cases, state levels. For some investors, investment income may be subject to the federal alternative minimum tax. 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 fees and expenses. Tax-exempt bonds may be issued under the Internal Revenue Code only by limited types of issuers for limited types of projects. As a result, the fund's investments may be focused in certain market segments and be more vulnerable to fluctuations in the values of the securities it holds than a more broadly invested fund. Interest the fund receives might be taxable. You can lose money by investing in the fund.

Credit qualities are shown as a percentage of net assets. A bond rated BBB or higher (SP-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 are included in the cash and net other assets category. Ratings and portfolio credit quality will vary over time. 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 cash and net other assets category. Cash is also shown in the cash and net other assets category. The fund itself has not been rated by an independent rating agency.