Short Duration Income Fund  (PSDTX)

Seeking capital preservation and a higher rate of current income


Track this fund

Objective

The fund seeks as high a rate of current income as we believe is consistent with preservation of capital and maintenance of liquidity.

Strategy and process

  • A broader opportunity set: The fund invests in a diversified portfolio composed of short duration, investment-grade money market and other fixed-income securities.
  • 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.
  • Higher income potential: Access to a wider range of income opportunities means the fund may offer higher income potential than other short-term investments.

Fund price

Yesterday’s close 52-week high 52-week low
Net asset value $10.06
0.00% | $0.00
$10.06
07/18/17
$10.04
01/18/17
Historical fund price

Fund facts as of 11/30/17

Total net assets
$8,207.80M
Turnover (fiscal year end)
45%
Dividend frequency (view rate)
Monthly
Number of issuers
263
Fiscal year-end
July
CUSIP / Fund code
74676P755 / 0078
Inception date
10/17/11
Category
Taxable Income
Open to new investors
Ticker
PSDTX

Management team


Co-Head of Fixed Income

Portfolio Manager

Portfolio Manager


Manager commentary | Q3 2017

Short-duration strategies dampen effects of rising rates

Mike Salm, Co-Head of Fixed Income, and Portfolio Manager Joanne Driscoll explain how a short-duration strategy may lessen volatility in a rising-rate environment.


Literature

Fund documents

Fact Sheet (A share) (PDF)
Fact Sheet (Y share) (PDF)
Monthly Fact Sheet (PDF)
Summary Prospectus (PDF)
Statutory Prospectus (PDF)
Annual Report (PDF)
Semiannual Report (PDF)
Sales Idea (PDF)
Brochure (PDF)
Proxy voting results (Form N-PX) (PDF)
Full holdings (PDF)
Quarterly commentary (PDF)
Comparing Putnam's taxable 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. Life (inception: 10/17/11 )
Before sales charge 1.24% 0.76% 0.71% 0.73%
After sales charge 1.24% 0.76% 0.71% 0.73%
BofA Merrill Lynch U.S. Treasury Bill Index 0.64% 0.34% 0.24% --

Class A shares do not carry an initial charge or, generally, a contingent deferred sales charge. Redemptions of shares that had been exchanged from another fund may be subject to a CDSC. See disclosure below.

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. To obtain the most recent month-end performance, visit putnam.com. Performance assumes reinvestment of distributions and does not account for taxes. Class A, M, and R shares have no initial sales charge. Class A and M shares generally have no contingent deferred sales charge (CDSC). However, a CDSC may apply to redemptions of class A shares obtained by exchanging shares from another Putnam fund that were originally purchased without an initial sales charge. This CDSC applies if the shares are redeemed within nine months of the original purchase. A CDSC on class M shares may apply to redemptions of shares from certain rollover accounts. See the prospectus for details. Class B and C shares do not carry a CDSC. 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. Class R5/R6 shares, available to qualified employee-benefit plans only, are sold without an initial sales charge and have no CDSC.  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. For a portion of the period the fund had expenses limitations, without which returns would be lower. 

Performance snapshot

  Before sales charge After sales charge
1 mt. as of 11/30/17 0.11 % 0.11 %
YTD as of 12/12/17 1.30 % 1.30 %

Yield

Distribution rate before sales charge
as of 12/12/17
1.38%
Distribution rate after sales charge
as of 12/12/17
1.38%
30-day SEC yield with subsidy
as of 11/30/17 (after sales charge)
1.25%
30-day SEC yield without subsidy
as of 11/30/17 (after sales charge)
1.11%

Risk-adjusted performance as of 10/31/17

Sharpe ratio (3 yrs.) 2.57
Information ratio (3 yrs.) 2.49

Volatility as of 10/31/17

Standard deviation (3 yrs.) 0.21%
Beta 0.97
R-squared 0.23

Morningstar ratings as of 10/31/17

Ultrashort Bond Rating Funds in category
Overall (135)
3 yrs. (135)
5 yrs. (102)

Distributions

Accrual days 30
Accrual start date 11/01/17
Accrual end date 11/30/17
Payable date 11/30/17
Income $0.010909922
Extra taxable income $0.0
Dividend frequency Monthly

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 issuers as of 10/31/17

Citigroup 1.07%
UBS 1.06%
Wells Fargo 1.05%
JPMorgan Chase 1.04%
Metlife 1.01%
US Bank 1.00%
SwedBank 1.00%
Barclays 0.98%
Bank of America 0.98%
NAB 0.95%
Top 10 issuers, percent of portfolio 10.14%

Full portfolio holdings

Prior top 10 issuers

Top 10 issuers as of 10/31/17
Citigroup
UBS
Wells Fargo
JPMorgan Chase
Metlife
US Bank
SwedBank
Barclays
Bank of America
NAB
Issuers represent 10.14% of portfolio
Top 10 issuers as of 09/30/17
Citigroup
Metlife
SwedBank
US Bank
Wells Fargo
JPMorgan Chase
Barclays
Berkshire Hathaway
HSBC Holdings
UBS
Issuers represent 10.32% of portfolio
Top 10 issuers as of 08/31/17
Berkshire Hathaway
SwedBank
US Bank
Wells Fargo
Barclays
UBS
JPMorgan Chase
Nordea Bank
Bb&T Corporation
Citigroup
Issuers represent 10.43% of portfolio
Top 10 issuers as of 07/31/17
Rabobank
Bank of America
UBS
JPMorgan Chase
Wells Fargo
Citigroup
Credit Suisse
Nissan Motor
Nordea Bank
Scotiabank
Issuers represent 10.35% of portfolio

Portfolio composition as of 10/31/17

Investment-grade corporate bonds 52.00%
Commercial paper 38.10%
Certificates of deposit 3.42%
Residential MBS (non-agency) 2.07%
Agency CMO 1.86%
Asset-backed commercial paper 1.56%
Asset-backed securities (ABS) 0.90%
Repurchase agreements 0.45%
Net cash -0.36%

Fixed income statistics as of 10/31/17

Average effective maturity 0.97 yrs.
Average effective duration 0.16 yrs.
Average yield to maturity 1.53%
Average coupon 1.33%
Average price $100.47

Quality rating as of 10/31/17

A-1+ 4.49%
A-1 8.11%
A-2 26.24%
A-3 4.69%
AAA 1.42%
AA 16.10%
A 29.52%
BBB 9.31%
Not Rated 0.48%
Net cash -0.36%

Fund characteristics will vary over time.

Due to rounding, percentages may not equal 100%.

Consider these risks before investing: Putnam Short Duration Income Fund is not a money market fund. The effects of inflation may erode the value of your investment over time. Funds that invest in government securities are not guaranteed. Mortgage-backed investments, unlike traditional debt investments, are also subject to prepayment risk, which means that they may increase in value less than other bonds when interest rates decline and decline in value more than other bonds when interest rates rise. We may have to invest the proceeds from prepaid investments, including mortgage backed investments, in other investments with less attractive terms and yields. 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, and factors related to a specific issuer or industry. These factors may also lead to periods of high volatility and reduced liquidity in the bond markets. 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. Credit risk is generally greater for debt not backed by the full faith and credit of the U.S. government. Risks associated with derivatives include increased investment exposure (which may be considered leverage) and, in the case of over-the-counter instruments, the potential inability to terminate or sell derivatives positions and the potential failure of the other party to the instrument to meet its obligations. Unlike bonds, funds that invest in bonds have fees and expenses. You can lose money by investing in the fund.

Credit qualities are shown as a percentage of net assets as of the date indicated above. A bond rated BBB or higher (A-3/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. Ratings may vary over time. Net cash, if any, represent the market value weights of cash and derivatives and may show a negative market value as a result of the timing of trade versus settlement date transactions. The fund itself has not been rated by an independent rating agency.

Country Allocation as of 10/31/17

United States 65.94%
Canada 7.31%
United Kingdom 5.55%
Australia 4.84%
Netherlands 4.31%
France 3.09%
Sweden 2.59%
Japan 1.83%
Norway 0.93%
 
Other
3.61%
Denmark 0.79%
Germany 0.79%
Switzerland 0.38%
Luxembourg 0.33%
Bermuda 0.29%
Spain 0.29%
Ireland 0.27%
Italy 0.25%
China 0.22%

Expenses

Expense ratio

Class A Class B Class C Class M Class R Class R6 Class Y
Total expense ratio 0.55% 0.95% 0.95% 0.60% 0.95% 0.44% 0.45%
What you pay† 0.40% 0.80% 0.80% 0.45% 0.80% 0.29% 0.30%

† The fund's expense ratio is taken from the most recent prospectus and is subject to change. What you pay reflects Putnam Management's decision to contractually limit expenses through 11/30/18

Sales charge/Dealer allowance

Putnam Short Duration Income Fund has no up-front sales charge.

 Breakpoint Class A Class B Class C Class M Class R Class R6 Class Y
$0-$49,999 -- -- -- -- -- -- --
$50,000-$99,999 -- -- -- -- -- -- --
$100,000-$249,999 -- -- -- -- -- -- --
$250,000-$499,999 -- -- -- -- -- -- --
$500,000-$999,999 -- -- -- -- -- -- --
$1M-$4M -- -- -- -- -- -- --
$4M-$50M -- -- -- -- -- -- --
$50M+ -- -- -- -- -- -- --

CDSC †

Putnam Short Duration Income Fund has no redemption fees except under certain circumstances.

  Class A Class B Class C Class M Class R Class R6 Class Y
0 to 9 mts. 1.00% 5.00% 1.00% 0.15% -- -- --
9 to 12 mts. 0.00% 5.00% 1.00% 0.15% -- -- --
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% -- -- -- --
† A deferred sales charge on class A, B and C shares may apply to certain redemptions of shares purchased by exchange from another Putnam fund. A deferred sales charge on class M shares may apply to redemptions of shares from certain rollover accounts.

Trail commissions

  Class A Class B Class C Class M Class R Class R6 Class Y
  0.10% 0.00% 0.50% 0.15% 0.50% 0.00% 0.00%
  NA NA NA NA NA NA NA
  NA NA NA NA NA NA NA

For sales and trail commission information on purchases over $1,000,000 and participant-directed qualified retirement plans, see a Putnam fund prospectus and the statement of additional information.

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. Qualifying securities must have a remaining term of at least one month to final maturity and a minimum amount outstanding of $1 billion. You cannot invest directly in an index.

Consider these risks before investing: Putnam Short Duration Income Fund is not a money market fund. The effects of inflation may erode the value of your investment over time. Funds that invest in government securities are not guaranteed. Mortgage-backed investments, unlike traditional debt investments, are also subject to prepayment risk, which means that they may increase in value less than other bonds when interest rates decline and decline in value more than other bonds when interest rates rise. We may have to invest the proceeds from prepaid investments, including mortgage backed investments, in other investments with less attractive terms and yields. 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, and factors related to a specific issuer or industry. These factors may also lead to periods of high volatility and reduced liquidity in the bond markets. 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. Credit risk is generally greater for debt not backed by the full faith and credit of the U.S. government. Risks associated with derivatives include increased investment exposure (which may be considered leverage) and, in the case of over-the-counter instruments, the potential inability to terminate or sell derivatives positions and the potential failure of the other party to the instrument to meet its obligations. Unlike bonds, funds that invest in bonds have fees and expenses. You can lose money by investing in the fund.

Credit qualities are shown as a percentage of net assets as of the date indicated above. A bond rated BBB or higher (A-3/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. Ratings may vary over time. Net cash, if any, represent the market value weights of cash and derivatives and may show a negative market value as a result of the timing of trade versus settlement date transactions. The fund itself has not been rated by an independent rating agency.