Active Income

Tax Exempt Income Fund (Class A)  (PTAEX)

Seeking a high level of tax-free income since 1976

Highlights

Objective

The fund seeks as high a level of current income exempt from federal income tax as we believe to be consistent with preservation of capital.

Strategy and process

  • Tax-advantaged income: The fund pursues income free from federal income tax with a portfolio of municipal bonds selected from many states and market sectors.
  • Focus on performance: The portfolio managers seek a competitive yield and to protect investor's capital through careful investment analysis and risk management.
  • 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.

Fund price

Yesterday’s close 52-week high 52-week low
Net asset value $8.84
0.00% | $0.00
$8.94
09/03/19
$8.31
11/06/18
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.

22.07%

Best 5-year annualized return

(for period ending 12/31/86)


-1.95%

Worst 5-year annualized return

(for period ending 12/31/81)


6.93%

Average 5-year annualized return


Fund facts as of 08/31/19

Total net assets
$973.81M
Turnover (fiscal year end)
42%
Dividend frequency (view rate)
Monthly
Number of holdings
415
Fiscal year-end
September
CUSIP / Fund code
746870104 / 0009
Inception date
12/31/76
Category
Tax-free Income
Open to new investors
Ticker
PTAEX

Management team

Portfolio Manager
Portfolio Manager


Manager commentary | Q2 2019

Muni fundamentals remain stable

Portfolio Managers Paul Drury and Garrett Hamilton discuss fundamentals in the municipal bond market.


Literature


Munis feel knock-on effects of tax reform
The municipal bond market will likely see a reduction in supply in 2018 because of certain provisions in the new tax reform law.

Performance

  • Total return (%) as of 06/30/19

  • Annual performance as of 06/30/19

Annualized Total return (%) as of 06/30/19

Annualized performance 1 yr. 3 yrs. 5 yrs. 10 yrs.
Before sales charge 6.70% 2.65% 3.67% 4.98%
After sales charge 2.44% 1.26% 2.83% 4.55%
Bloomberg Barclays Municipal Bond Index 6.71%2.55%3.64%4.72%

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. 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 Multi-Asset Absolute Return Fund, 4.00% and 3.25% for income funds and 2.25% and 0.75% for Putnam Floating Rate Income Fund, Short-Term Municipal Income, Short Duration Bond Fund, and Fixed Income Absolute Return 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, which is 3% in the first year, declining to 1% in the fourth 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, N, R, 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). Returns at public offering price (after sales charge) for class N shares reflect the current maximum initial sales charge of 1.50%. 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 and M shares of Putnam money market funds have no initial sales charge. For a portion of the periods, some funds had expense 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 08/31/19 1.81% -2.26%
YTD as of 09/20/19 7.07% 2.79%

Yield

Distribution rate before sales charge
as of 09/20/19
2.67%
Distribution rate after sales charge
as of 09/20/19
2.56%
30-day SEC yield as of 08/30/19
(after sales charge)
1.40%

Risk-adjusted performance as of 08/31/19

Sharpe ratio (3 yrs.) 0.64
Information ratio (3 yrs.) 0.26

Volatility as of 08/31/19

Standard deviation (3 yrs.) 3.17%
Beta 0.90
R-squared 0.97

Lipper rankings as of 08/31/19

Time period Rank/Funds in category Percentile ranking
1 yr. 77/274 28%
3 yrs. 67/238 29%
5 yrs. 85/209 41%
10 yrs. 76/167 46%
Lipper category: General & Insured Municipal Debt Funds

Morningstar Ratings as of 08/31/19

Time period Funds in category Morningstar Rating
Overall 146
3 yrs. 146
5 yrs. 130
10 yrs. 110
Morningstar category: Muni National Long

Distributions

Accrual days 33
Accrual start date 08/01/19
Accrual end date 09/02/19
Payable date 08/30/19
Non-taxable income $0.019477673
Extra taxable income --

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.


Compare

See how this fund stacks up against its peers with FundVisualizer®

— or —

New to FundVisualizer? Watch tutorials on how to get started.

For more tutorials, please visit Advisor Tech Tips

** FundVisualizer comparison based on Putnam fund versus the largest fund in its Morningstar category.


Holdings

Top 10 holdings as of 08/31/19

1.245 R Iswp Fwd Munipsa P 07/12/2025 07/12/2025 3.65%
Sc Transprtn-2003b 01.8500 10/01/2031 2.00%
Federal Home Loan Mtg 02.5500 06/15/2035 1.60%
Henrico Indl-Reg Link 05.9290 08/23/2027 1.28%
Miami-Dade Cnty Rev 05.0000 10/01/2040 1.26%
N Tx Twy Cab-Ref-I 06.5000 01/01/2043 1.26%
California St-B-Txbl 02.1930 04/01/2047 1.17%
Ky Pub Energy-C-1 04.0000 12/01/2049 1.13%
Illinois St-D 05.0000 11/01/2026 1.11%
Dallas Area Rapid-A 05.0000 12/01/2046 1.10%
Top 10 holdings, percent of portfolio 15.56%

Full portfolio holdings as of 06/30/19

SC TRANSPRTN-2003B 02.0500 10/01/2031 2.06%
NEW YORK ST THRUWAY-A 04.0000 02/01/2020 1.70%
HENRICO INDL-REG LINK 05.9290 08/23/2027 1.40%
N TX TWY CAB-REF-I 06.5000 01/01/2043 1.27%
MIAMI-DADE CNTY REV 05.0000 10/01/2040 1.24%
CALIFORNIA ST-B-TXBL 02.1930 04/01/2047 1.19%
US 10YR ULTRA FUT SEP19 UXYU9 1.18%
KY PUB ENERGY-C-1 04.0000 12/01/2049 1.14%
DALLAS AREA RAPID-A 05.0000 12/01/2046 1.10%
MS BUSINESS FIN-REF 02.5000 04/01/2022 1.06%
CENTRL PLAINS ENERGY 05.0000 03/01/2050 0.96%
GREAT LAKES WTR-C-REF 05.0000 07/01/2036 0.96%
ILLINOIS ST SALES TAX 04.0000 06/15/2020 0.95%
LANCASTER OH PORT AUT 05.0000 08/01/2049 0.92%
WHITING IN ENVRNMNTL 05.0000 12/01/2044 0.89%
DALLAS ETC ARPRT-A 05.0000 11/01/2043 0.87%
E-470 PUB HWY-CAB-A 00.0000 09/01/2034 0.86%
SC JOBS-EDA-B-VAR 01.7500 05/01/2048 0.85%
IL FIN AUTH-VAR-REF 02.1340 11/01/2034 0.85%
DETROIT MI DOWNTOWN D 05.0000 07/01/2048 0.82%
NJ TRN FD CAB-SER C 00.0000 12/15/2024 0.81%
LOUISA IDA-A 01.9000 11/01/2035 0.80%
ID HSG & FIN 04.0000 07/15/2030 0.78%
ILLINOIS ST 05.0000 11/01/2029 0.76%
TRIBOROUGH BRIDGE-D 02.1210 11/15/2038 0.74%
VIRGINIA ST CMWLTH TR 04.0000 05/15/2032 0.71%
IN BD BK SER A 05.2500 10/15/2021 0.70%
LOUISVILLE & JEFFERSO 04.0000 10/01/2034 0.68%
HARRIS CULT ED VAR-C1 01.7000 12/01/2024 0.68%
MIAMI-DADE CO-D 05.0000 07/01/2045 0.68%
TRIBOROUGH BRIDGE-B 02.0510 01/01/2032 0.68%
NEW JERSEY ST ECON DE 05.0000 11/01/2026 0.67%
AZ LOTTERY-REF 05.0000 07/01/2028 0.66%
MET TRANS AUTH-C1-REF 04.0000 11/15/2032 0.66%
DEFOREST ASD-BANS 03.0000 12/18/2019 0.64%
MI FIN AUTH-H-1-REF 05.0000 10/01/2039 0.63%
PA TNPK CMMN-A 05.0000 12/01/2044 0.63%
SALT LAKE CITY ARPT-A 05.0000 07/01/2043 0.62%
PALM BEACH HLTH-REF 05.0000 11/15/2032 0.62%
OHIO ST-A 04.0000 02/01/2033 0.62%
NEW YORK CITY NY TRAN 05.0000 05/01/2037 0.61%
NYC TRANS FIN AUTH-S1 05.0000 07/15/2040 0.61%
MET WA ARPTS-CABS-A 00.0000 10/01/2037 0.60%
DALLAS-FT WORTH ARPT 05.2500 11/01/2030 0.60%
MAIN ST NATURAL GAS-B 04.0000 08/01/2049 0.59%
KY PUB ENERGY AUTH-B 04.0000 01/01/2049 0.58%
PA TURNPIKE COMM-REF 05.0000 12/01/2022 0.58%
CHICAGO HSG AUTH-A 05.0000 01/01/2031 0.58%
SOUTHCENTRL PA GEN AU 04.0000 06/01/2049 0.58%
SALES TAX SECURTZTN-C 05.5000 01/01/2036 0.57%
KING CO PUB HOSP DT 1 05.0000 12/01/2037 0.57%
MURRAY CITY HSP-VAR-A 01.6600 05/15/2037 0.56%
PA ECON DEV-A-WASTE 01.7000 08/01/2037 0.55%
MIAMI-DADE CNTY AVTN 05.0000 10/01/2041 0.55%
TENNERGY CORP TN GAS 05.0000 02/01/2050 0.55%
NH HLTH &EDU FACS-REF 05.0000 10/01/2037 0.55%
MET GOVT ETC-D-TXBL 04.8880 07/01/2046 0.54%
UNION UTILS-A-REF 05.2500 12/01/2031 0.54%
PA TURNPIKE COMM-CONV 00.0000 12/01/2044 0.54%
MET TRANS AUTH-A2A 02.3500 11/01/2026 0.53%
LOUISVILLE & JEFFERSO 01.6500 06/01/2033 0.53%
IN FIN AUTH-AMT-A-REF 01.6000 05/01/2034 0.53%
IRVINE USD-C-ADJ 01.2000 09/01/2054 0.53%
PORTLAND PORT-21C-REF 05.0000 07/01/2019 0.51%
KANSAS CITY ARPT-B 05.0000 03/01/2037 0.51%
ALLEGHENY HOSP DEV-A 05.0000 04/01/2033 0.50%
PA TURNPIKE COMM-REF 05.0000 12/01/2025 0.50%
TOBACCO SETTLEMENT-A 05.0000 06/01/2035 0.50%
PORT AUTH OF NEW YORK 05.0000 09/15/2031 0.50%
FARMINGTON PCR-B 04.7000 09/01/2024 0.49%
GAINESVILLE HOSP-A 05.0000 02/15/2036 0.49%
SC PUB SVC AUTH-A-REF 05.0000 12/01/2036 0.49%
GLENDALE INDL-MIDWEST 05.1250 05/15/2040 0.49%
PATRIOTS ENERGY GROUP 04.0000 10/01/2048 0.49%
CA FLTG-A2-RMKT-12/01 01.2500 05/01/2033 0.48%
CHICAGO 2002B 05.5000 01/01/2037 0.47%
DC-KIPP-SER A-REF 05.0000 07/01/2037 0.46%
NJ TRANSPRTN TRUST-A 05.0000 12/15/2034 0.46%
MO H/E VAR-WA UNIV-C 01.6700 09/01/2030 0.46%
TEXAS CITY ARCO PIPE 07.3750 10/01/2020 0.45%
HALIFAX HOSP MED-REF 05.0000 06/01/2036 0.44%
TN ENERGY 05.2500 09/01/2020 0.44%
FORT BEND ISD-A 01.9500 08/01/2049 0.43%
GLENDALE INDL DEV-REF 05.0000 05/15/2039 0.42%
BUCKEYE TOB ASSET-A-2 05.7500 06/01/2034 0.41%
GA MUNI ELEC AUTH-A 05.5000 07/01/2060 0.40%
MTA-D1-TRANSPRTN 05.0000 11/15/2039 0.40%
CHICAGO ARPT-F 05.0000 01/01/2040 0.40%
CA POLL CNTRL-AMT P/P 144A 05.0000 11/21/2045 0.40%
HOUSTON ARPT-A-REF 05.0000 07/01/2025 0.40%
RVRSIDE LSE CORP-HOSP 00.0000 06/01/2025 0.38%
TOB SETTLEMT FING-B 05.0000 06/01/2050 0.36%
KAREGNONDI WTR AUTH-A 05.2500 11/01/2030 0.36%
MSR ENERGY 06.5000 11/01/2039 0.36%
CHICAGO IL 06.0000 01/01/2038 0.36%
NEW JERSEY ST ECON DE 05.0000 10/01/2037 0.35%
MIAMI-DADE CO-A 04.0000 10/01/2044 0.35%
ILLINOIS ST 05.0000 12/01/2031 0.35%
MIAMI-DADE-SALES TAX 05.0000 07/01/2042 0.34%
CHICAGO WSTWTR 05.0000 01/01/2044 0.34%
NJ TRANSN TR FD-A 06.0000 06/15/2035 0.34%
KY ECON DEV-A-REF 05.0000 12/01/2045 0.34%
TARRANT CNTY TX CULTU 05.0000 11/15/2037 0.33%
MICHIGAN FIN AUTH 05.0000 11/01/2044 0.33%
MO H/E VAR-WA UNIV-D 01.6700 09/01/2030 0.33%
PITTSBURGH SPORTS-REF 05.0000 02/01/2035 0.33%
DIST COLUM REV-UNREF 06.5000 10/01/2041 0.33%
JEFFERSON CO-REV-REF 05.0000 09/15/2034 0.32%
ROCHESTER HLTH-B-MAYO 01.8000 11/15/2038 0.32%
CAMPBELL CNTY 05.7500 07/15/2039 0.32%
MASSACHUSETTS ST DEV 05.0000 10/01/2028 0.32%
MTA HUDSON RAIL YRD-A 05.0000 11/15/2046 0.32%
KANSAS CITY ARPT-B 05.0000 03/01/2038 0.32%
KS DEV-LIFESPACE-S 05.0000 05/15/2030 0.31%
CHICAGO WSTWTR 05.0000 01/01/2039 0.31%
KY PPTY & BLDGS 05.0000 05/01/2037 0.31%
RAILSPLITTER TOBACCO 05.0000 06/01/2024 0.30%
CLEVELAND ETC PORT 05.5000 12/01/2053 0.30%
MET PIER & EXPOSITION 05.0000 06/15/2057 0.29%
ALLEGHENY HOSP DEV-A 05.0000 04/01/2035 0.29%
MA HLTH-NORTHESTN-A 05.0000 10/01/2035 0.29%
ILLINOIS ST-REF 05.0000 02/01/2028 0.28%
MATAGORDA NAV 1-RF-A 04.4000 05/01/2030 0.28%
HOUSTON UTL SYS-D-REF 05.0000 11/15/2039 0.28%
DALLAS AREA RAPID-A 05.0000 12/01/2041 0.27%
PA TNPK CMMN-A 05.0000 12/01/2038 0.27%
NJ TRANSPRTN TRUST-A 05.0000 12/15/2035 0.27%
MASSACHUSETTS ST DEV 05.0000 10/01/2027 0.27%
WASHINGTON ST HLTH CA 02.7110 01/01/2042 0.27%
GRANT CNTY WA PUBLIC 02.0000 01/01/2044 0.27%
KENTWOOD MI ECON DEV 05.0000 11/15/2037 0.27%
LOUISA IDA-C 01.8000 11/01/2035 0.27%
FULTON DEV AUTH-A-REF 05.0000 10/01/2042 0.26%
SALT VERDE FNL CORP 05.5000 12/01/2029 0.26%
LAKELAND HOSP 05.0000 11/15/2040 0.26%
KANSAS CITY ARPT-B 05.0000 03/01/2039 0.25%
IL ST-REF 05.0000 08/01/2021 0.25%
PENNSYLVANIA-A-COPS 05.0000 07/01/2036 0.25%
PA TPK 2ND SER REF 05.0000 12/01/2036 0.25%
ILLINOIS ST 05.0000 12/01/2028 0.24%
NEW YORK CITY MUNI FI 05.0000 06/15/2046 0.24%
CHANDLER AZ INDL DEV 05.0000 06/01/2049 0.24%
ILLINOIS ST 05.0000 10/01/2032 0.24%
GAINESVILLE ETC DEV 05.0000 03/01/2047 0.24%
SC PUB SVC AUTH-A 05.5000 12/01/2054 0.24%
SOUTH CAROLINA ST PUB 05.2500 12/01/2055 0.24%
AZ LOTTERY-REF 05.0000 07/01/2027 0.24%
CLIFTON HGR EDU FIN 04.0000 08/15/2031 0.24%
SANTA FE RETMNT FAC 05.0000 05/15/2032 0.24%
MA DEV FIN AGY-E-OLIN 05.0000 11/01/2043 0.24%
SC PUB SVC AUTH-E 05.5000 12/01/2053 0.24%
OAKLAND UNIV-REF 05.0000 03/01/2039 0.24%
SEATTLE SOL WST-REV 04.0000 06/01/2032 0.24%
BEXAR CO-REF 04.0000 06/15/2034 0.23%
DENVER-A-AMT-SUB-ARPT 05.5000 11/15/2031 0.23%
NEW YORK TRANSPRTN-A 05.0000 07/01/2041 0.23%
DETROIT WTR & SWR-A 05.0000 07/01/2032 0.23%
MO DEV FIN BRD-A 05.0000 06/01/2037 0.23%
DIST OF COLUMBIA UNIV 05.5000 04/01/2041 0.22%
FRANKLIN CNTY-A 06.0000 07/01/2035 0.22%
LEE CNTY FL INDL DEV 05.0000 11/15/2044 0.22%
DELAWARE ECON DEV AUT 05.3750 10/01/2045 0.22%
MA DEV-SUFFOLK UNIV 05.1250 07/01/2040 0.22%
NJ ECON-B-RF-NJ AMERN 05.6000 11/01/2034 0.22%
CHICAGO WTRWKS-REMK 05.0000 11/01/2029 0.22%
PORT AUTH OF NY/NJ 04.5000 04/01/2037 0.22%
ST TAMMANY HOSP-A-REF 05.0000 07/01/2035 0.22%
ST TAMMANY HOSP-A-REF 05.0000 07/01/2036 0.22%
BURKE CNTY DEV AUTH 01.8500 12/01/2049 0.21%
IN ST FIN AUTH-REPUBL 01.6000 12/01/2037 0.21%
MIAMI-DADE AVIATION-A 05.0000 10/01/2038 0.21%
ORANGE CO HLTH FACS 05.0000 08/01/2034 0.21%
PA TURNPIKE-B1 05.0000 06/01/2042 0.21%
OHIO-AMT-PORTSMOUTH 05.0000 12/31/2035 0.21%
LAKELAND HOSP 05.0000 11/15/2045 0.20%
CA POLL FING AUTH 04.7500 11/01/2046 0.20%
GREATER CHICAGO MET-E 05.0000 12/01/2029 0.20%
KAREGNONDI WTR AUTH 05.0000 11/01/2034 0.20%
DE HLTH FACS AUTH-A 04.0000 07/01/2040 0.20%
TEXAS MUNI PWR AGY 05.0000 09/01/2047 0.19%
MAIN STREET NATURAL-A 05.0000 05/15/2033 0.19%
NEW HOPE CULT EDU-B1 04.0000 07/01/2048 0.19%
SARASOTA CO PUB HOSP 05.0000 07/01/2038 0.19%
DE ECON-REF-GAS FACS 05.4000 02/01/2031 0.19%
ID HLTH FACS-A-REF 05.0000 03/01/2037 0.19%
TNDR OPT-RSDL-XF0742 P/P 12.8100 12/01/2047 0.18%
MI ST FIN AUTH 05.0000 11/15/2042 0.18%
NEW HAMPSHIRE ST HLTH 05.0000 07/01/2044 0.18%
CALIFORNIA STWD CMNTY 05.0000 11/15/2044 0.18%
MI STRAT FD-WORTHINGT 05.7500 10/01/2022 0.18%
TX PRIVATE ACTIVITY 06.8750 12/31/2039 0.18%
MONROE CO INDL DEV-C 04.0000 07/01/2035 0.18%
GILLIAM WST VAR-A-CON 02.4000 08/01/2025 0.18%
CT HLTH & EDU-F-REF 05.0000 07/01/2034 0.17%
MI STRAT REF DETRO-BB 07.0000 05/01/2021 0.17%
VIRGINIA ST CMWLTH-B 04.0000 07/01/2036 0.17%
VIRGINIA ST CMWLTH-B 04.0000 07/01/2037 0.17%
CHICAGO BOE-C-PROJ 05.2500 12/01/2039 0.17%
MIDDLEBURG HGHTS HOSP 05.0000 08/01/2047 0.17%
SC PUB SVC AUTH-E 05.0000 12/01/2048 0.17%
OHIO HOSP FAC-A-REF 04.0000 01/01/2043 0.17%
PA TPK 2ND SER SPL 05.0000 12/01/2031 0.16%
KY PUB TRANSPTRN-A 06.0000 07/01/2053 0.16%
ATLANTA TAX ALLOC-REF 05.0000 12/01/2022 0.16%
ST PAUL PORT AUTH-7 P/P 144A 04.5000 10/01/2037 0.16%
KAREGNONDI WTR AUTH 05.0000 11/01/2036 0.16%
CLARK CO ARPT-A-2 05.0000 07/01/2033 0.16%
DIST OF COLUMBIA- REV 05.0000 07/01/2049 0.16%
PHOENIX IMPT CAB-B 05.5000 07/01/2043 0.16%
SOUTHEASTERN OH PORT 05.7500 12/01/2032 0.16%
NJ ECON DEV AUTH-REF 05.0000 06/01/2037 0.15%
SAN ANTONIO ARPT-IMPT 05.2500 07/01/2032 0.15%
CHICAGO O'HARE ARPT-A 05.0000 01/01/2037 0.15%
CHICAGO WTR-UNREF-REF 05.0000 11/01/2025 0.15%
MD HLTH & HGR EDU FAC 05.0000 07/01/2040 0.15%
GLOUCESTER WST-A-RMKT 02.4000 09/01/2038 0.15%
HARRIS CULTURAL EDU-A 05.0000 06/01/2028 0.15%
OHIO HOSP FAC-A-REF 04.0000 01/01/2034 0.15%
ABAG FIN AUTH-A-REF 05.0000 07/01/2042 0.15%
ALLEGHENY CNTY-C77 04.0000 11/01/2035 0.15%
ILLINOIS ST 05.0000 11/01/2041 0.14%
MASS ED FIN AUTH -B 05.7000 01/01/2031 0.14%
LOUISVILLE & JEFFERSO 05.0000 10/01/2030 0.14%
MA DEV FIN-A-UNREF 05.7500 07/01/2039 0.14%
TOBACCO FING-A-REF 05.0000 05/15/2023 0.14%
HOUSTON HGR ED-A 05.0000 02/15/2032 0.14%
FLINT HSP-HURLEY MED 07.3750 07/01/2035 0.14%
KAREGNONDI WTR AUTH 05.0000 11/01/2031 0.14%
PITTSBURGH PA WTRSWR 05.0000 09/01/2033 0.14%
ARLINGTON HGR EDU-A 05.0000 12/01/2033 0.14%
MONTGOMERY CNTY TOLL 05.0000 09/15/2034 0.14%
PITTSBURGH PA WTRSWR 05.0000 09/01/2032 0.14%
VA ST BUSINESS FING 05.0000 07/01/2034 0.14%
MS SLDWST-WST MGMT IN 02.2000 03/01/2027 0.13%
JEFFERSON CO SWR-D 06.5000 10/01/2053 0.13%
MI FIN AUTH-C-3-REF 05.0000 04/01/2026 0.13%
MYRTLE BEACH SC TAX I 05.0000 10/01/2029 0.13%
DIST OF COLUMBIA- REV 05.0000 07/01/2039 0.12%
CLIFTON HGR EDU FIN 05.0000 08/15/2033 0.12%
GAINESVILLE HOSP-A 05.0000 02/15/2037 0.12%
PHILADELPHIA GAS WKS 05.0000 08/01/2031 0.12%
PHILADELPHIA GAS WKS 05.0000 08/01/2032 0.12%
WI HLTH & EDUCTNL-REF 05.0000 08/15/2028 0.12%
RI HLTH & EDUCTNL-REF 05.0000 05/15/2033 0.12%
NJ ECON-AMT-RF-D-NJ A 04.8750 11/01/2029 0.12%
LOUISVILLE ARPT-A-AMT 05.0000 07/01/2030 0.12%
COLORADO ST HLTH FACS 05.0000 05/15/2045 0.12%
COLORADO ST HLTH FACS 05.0000 12/01/2035 0.12%
MINNESOTA ST HGR EDU 04.0000 03/01/2035 0.12%
PORT OF SEATTLE-C-AMT 05.0000 04/01/2040 0.12%
DETROIT MI DOWNTOWN D 05.0000 07/01/2038 0.12%
FRANKLIN CNTY-A 06.1250 07/01/2040 0.12%
ILLINOIS ST 05.0000 11/01/2034 0.12%
NEW HOPE CULTURAL EDU 04.0000 08/15/2034 0.12%
AZ IDA-D-REF P/P 144A 05.0000 07/01/2051 0.12%
PENNSYLVANIA-A-COPS 05.0000 07/01/2034 0.12%
CHICAGO MTR FUEL TAX 05.0000 01/01/2033 0.12%
DETROIT CITY SD-REF-A 05.0000 05/01/2031 0.12%
MAIN STREET NATURAL-A 05.0000 05/15/2022 0.12%
PUBLIC FIN AUTH-REF 05.2500 07/01/2028 0.12%
ST PUB SCH BULD AUTH 05.0000 04/01/2023 0.12%
ST PUB SCH BULD AUTH 05.0000 04/01/2024 0.12%
MARTIN CO DEV-REF 04.2000 12/15/2025 0.11%
MI HSG DEV-D 03.9500 10/01/2037 0.11%
PHOENIX INDL DEV AUTH 05.0000 07/01/2044 0.11%
DIST OF COLUMBIA UNIV 05.5000 04/01/2034 0.11%
HAMILTON CO HLTH 05.0000 01/01/2032 0.11%
WV ECON DEV SLDWST 05.3750 12/01/2038 0.11%
DC BALLPARK-SER B1 05.0000 02/01/2025 0.11%
SAGINAW HOSP 05.0000 07/01/2030 0.11%
KY PPTY & BLDGS-B 05.0000 05/01/2029 0.11%
E-470 HWY-B-LIBOR 02.6610 09/01/2039 0.11%
IN FIN AUTH-B-REF 05.0000 02/01/2027 0.11%
CA INFRA & ECON DEV-B 02.0610 08/01/2047 0.11%
MINNEAPOLIS HLTH-B1-A 01.6000 11/15/2035 0.11%
OWEN WTRWKS SER A-KY 06.2500 06/01/2039 0.11%
CT HSG FIN AUTH-F2 02.2000 05/15/2023 0.10%
ATLANTA TAX ALLOC-REF 05.0000 12/01/2024 0.10%
CHICAGO BOE CAB-B-1 00.0000 12/01/2021 0.10%
DOUBLE BRANCH CDD-A1 04.2500 05/01/2034 0.10%
MICHIGAN ST FIN AUTH 04.5000 10/01/2029 0.10%
MA HSG FIN-A 05.1000 12/01/2030 0.10%
SC PUB SVC AUTH-A-REF 05.0000 12/01/2025 0.09%
HARRIS CULTURAL ED-B1 01.7000 09/01/2031 0.09%
LEE CNTY FL INDL DEV 05.0000 11/15/2039 0.09%
LOWER COLORADO RIVER 05.0000 05/15/2040 0.09%
GAITHERSBURG ECON-A 05.0000 01/01/2036 0.09%
LEXINGTON HLTH SVCS 04.0000 11/01/2031 0.09%
LEXINGTON HLTH SVCS 04.0000 11/01/2032 0.09%
MONROE CO INDL DEV-C 04.0000 07/01/2036 0.09%
UTAH ST CHRT SCH FIN 05.0000 10/15/2038 0.09%
MONTGOMERY CNTY TOLL 05.0000 09/15/2033 0.08%
NEW HOPE ED FACS 05.5000 01/01/2043 0.08%
ST TAMMANY HOSP-A-REF 05.0000 07/01/2034 0.08%
REGL TRN-DENVER TRN 06.0000 01/15/2041 0.08%
AZ HLTH-KIRKSVL CLG 05.1250 01/01/2030 0.08%
ILLINOIS ST 05.0000 01/01/2041 0.08%
MARICOPA IDA-A 06.0000 07/01/2039 0.08%
VIRGINIA ST CMWLTH-B 04.0000 07/01/2040 0.08%
MI PUB PWR-A 05.0000 01/01/2027 0.08%
SCIOTO CO HOSP FACS 05.0000 02/15/2034 0.08%
CO HLTH FACS AUTH 05.5000 06/01/2033 0.08%
FAIRFAX CNTY VA ECON 05.0000 10/01/2036 0.08%
MONROE CO INDL DEV-D 04.0000 07/01/2034 0.08%
CA STWD CMNTYS DEV-A 05.2500 11/01/2044 0.08%
CENTRL TX REGL MOBILITY 05.0000 01/01/2033 0.08%
CLARK IMPT DIST-REF 05.0000 08/01/2020 0.08%
MARICOPA CNTY AZ INDL 05.0000 07/01/2048 0.07%
KY PPTY & BLDGS-B 05.0000 05/01/2028 0.07%
NH HLTH & EDU FACS 05.0000 10/01/2046 0.07%
SALT VERDE FNL CORP 05.0000 12/01/2037 0.07%
UTAH ST CHRT SCH FIN 05.0000 10/15/2031 0.07%
MARLAND ECON DEV CORP 05.0000 06/01/2044 0.06%
MARLAND ECON DEV CORP 05.0000 06/01/2049 0.06%
ARIZONA ST HLTH FACS 05.0000 12/01/2028 0.06%
MI FIN AUTH-C-3-REF 05.0000 04/01/2024 0.06%
MIAMI DADE AVIATION 05.0000 10/01/2028 0.06%
MICHIGAN ST FIN AUTH 05.0000 06/01/2030 0.06%
CENTRE CO HOSP-A-REF 05.0000 11/15/2041 0.06%
MI FIN AUTH-H-1-REF 05.0000 10/01/2030 0.06%
IL FIN AUTH-A 05.0000 02/15/2047 0.06%
MONROE CO INDL DEV-D 04.0000 07/01/2036 0.06%
E HEMPFIELD TWP IDA 05.0000 07/01/2029 0.06%
GUAM PWR AUTH-A-REF 05.0000 10/01/2030 0.06%
MI FIN AUTH-B-LOC GOV 05.0000 07/01/2034 0.06%
OAKLAND UNIV-A 05.0000 03/01/2033 0.06%
AZ SPORTS-A-REF-SR 05.0000 07/01/2030 0.06%
IL FIN AUTH 04.0000 11/15/2031 0.06%
KALAMAZOO HOSP FIN AU 04.0000 05/15/2031 0.06%
S E OVERTOWN PK P/P 144A 05.0000 03/01/2030 0.06%
MYRTLE BEACH SC TAX I 05.0000 10/01/2028 0.05%
PIMA IDA-RF-PROVIDENC 05.1250 12/01/2040 0.05%
GAINESVILLE ETC DEV 05.0000 03/01/2037 0.05%
MI STRATEGIC FUND 05.7500 11/15/2033 0.05%
UTAH ST CHRT SCH FIN 05.0000 10/15/2033 0.05%
HENRICO ECON DEV-REF 05.0000 06/01/2023 0.05%
LOUISVILLE ARPT-A-AMT 05.0000 07/01/2031 0.05%
MMD AAA R SP 0.0 07/17/19 CI 0.05%
NTHRN AZ UNIV 05.0000 06/01/2036 0.05%
GRAND RAPIDS WTR-REF 05.0000 01/01/2041 0.05%
MI FIN AUTH-D-2 05.0000 07/01/2034 0.05%
YUMA IDA-A 05.2500 08/01/2032 0.05%
MA DEV VAR-BOSTON-U6E 01.6000 10/01/2042 0.05%
CLIFTON HGR EDU FIN 05.0000 08/15/2027 0.05%
MINNESOTA ST HGR EDU 04.0000 03/01/2036 0.05%
HENRICO ECON DEV-REF 05.0000 06/01/2025 0.05%
MMD AAA R SP 0.0 07/18/19 CI 0.04%
JEFFERSON CO-REV-REF 05.0000 09/15/2033 0.04%
MI ST STRATEGIC-REF 05.2500 06/01/2032 0.04%
ARLINGTON HGR EDU-A 04.0000 12/01/2031 0.04%
DETROIT SD REF-C-BHAC 05.2500 05/01/2025 0.04%
PORT NY/NJ 5TH-KIAC-4 06.7500 10/01/2019 0.04%
SCIOTO CO HOSP FACS 05.0000 02/15/2033 0.04%
WA ST HSG FIN-A-REF 05.0000 07/01/2036 0.04%
WARREN SD-A-REF 05.0000 05/01/2035 0.04%
MAIN ST NAT GAS INC-A 05.5000 09/15/2021 0.04%
KENTWOOD ECON DEV-REF 05.6250 11/15/2032 0.04%
MARICOPA IDA-REF 05.0000 07/01/2035 0.04%
BELDING SCHS-A-REF 05.0000 05/01/2040 0.04%
YAVAPAI CNTY AZ INDL 05.0000 08/01/2034 0.04%
ALLEGHENY CNTY-C77 04.0000 11/01/2033 0.04%
PA ST HSG FIN AGY-REF 03.9500 10/01/2030 0.04%
MI FIN AUTH-C-6 05.0000 07/01/2033 0.03%
NYC IDA QUEENS BASEBA 05.0000 01/01/2023 0.03%
SALT LAKE LKD PARS & 06.7500 05/15/2020 0.03%
CHIPPEWA VLY SCHS-A 05.0000 05/01/2034 0.03%
GENESEE CO-WTR SPLY-B 05.0000 02/01/2033 0.03%
GRAND VLY MI ST UNIV 05.0000 12/01/2032 0.03%
ROCHESTER SD-I 05.0000 05/01/2036 0.03%
SA ENERGY ACQ PUB FAC 05.5000 08/01/2025 0.03%
KAREGNONDI WTR AUTH-A 05.2500 11/01/2031 0.03%
KENTWOOD SCHS-BLDG 05.0000 05/01/2041 0.03%
LAKE HAVASU CITY AZ-B 05.0000 07/01/2043 0.03%
NTHRN AZ UNIV-REF 05.0000 06/01/2034 0.03%
EL MIRAGE 05.0000 07/01/2042 0.03%
MARICOPA IDA 05.0000 07/01/2036 0.03%
YAVAPAI INDL DEV 05.0000 03/01/2032 0.03%
AZ GAME/FISH AGF ADMI 05.0000 07/01/2021 0.03%
GUAM GOVT HOTEL-A 06.0000 11/01/2026 0.03%
LANSING SD-I-BLDG 05.0000 05/01/2041 0.03%
MICHIGAN ST FIN AUTH 05.0000 12/01/2045 0.03%
MARICOPA INDL-WSTE MG 03.3750 12/01/2031 0.03%
PARK CREEK CO MET-A 05.0000 12/01/2045 0.03%
TEXAS MUNI PWR AGY 05.0000 09/01/2037 0.03%
CHICAGO O'HARE ARPT-A 05.0000 01/01/2038 0.02%
MI HSG DEV-A 04.6250 10/01/2039 0.02%
ARIZONA BRD OF RGTS 05.0000 07/01/2041 0.02%
GENESEE CO-WTR SPLY 05.2500 02/01/2040 0.02%
LINCOLN SD-A-REF 05.0000 05/01/2040 0.02%
LIVONIA PUB SD-II 05.0000 05/01/2045 0.02%
CHICAGO MTR FUEL TAX 05.0000 01/01/2030 0.02%
GUAM PWR AUTH-A-REF 05.0000 10/01/2034 0.02%
MMD AAA R SP 0.0 08/06/19 CI 0.02%
MMD AAA R SP 0.0 08/07/19 CI 0.02%
PHOENIX INDL DEV AUTH 03.7500 07/01/2024 0.02%
FLINT HSP-HURLEY MED 07.5000 07/01/2039 0.02%
PHOENIX IDA-A P/P 144A 05.0000 07/01/2035 0.02%
PHOENIX INDL DEV AUTH 05.0000 07/01/2036 0.02%
SOUTHEASTERN OH PORT 05.5000 12/01/2043 0.02%
OAKLAND UNIV-REF 05.0000 03/01/2032 0.02%
CUMBERLAND CNTY PA MU 05.0000 01/01/2032 0.01%
PHOENIX IDA 04.8750 09/01/2022 0.01%
MMD AAA R SP 0.0 09/04/19 CI 0.01%
CUMBERLAND CNTY PA MU 05.0000 01/01/2031 0.01%
TREASURY BILL 00.0000 07/18/2019 0.01%
YAVAPAI CO IDA-A 05.2500 08/01/2033 0.01%
MI HSG DEV-A 04.4500 10/01/2034 0.01%
PHOENIX INDL DEV AUT P/P 144A 05.0000 07/01/2035 0.01%
STUB 05.2500 04/01/2024 0.01%
HUDSON YDS INFR-PRERF 05.7500 02/15/2047 0.01%
MMD AAA R SP 0.0 09/05/19 CI 0.01%
MMD AAA R SP 0.0 09/05/19 MS 0.00%
CASA GRANDE IDA-REF-A ESCROW 07.6250 12/01/2029 0.00%
DETROIT WTR-B-UNREF 06.2500 07/01/2036 0.00%
MMD AAA P SP 0.0 06/02/20 CI -0.01%
MMD AAA P SP 0.0 06/04/20 MS -0.01%
MMD AAA P SP 0.0 06/04/20 CI -0.01%
MMD AAA P SP 0.0 07/03/19 CI -0.04%

Prior top 10 holdings

Top 10 holdings as of 08/31/19
1.245 R Iswp Fwd Munipsa P 07/12/2025 07/12/2025
Sc Transprtn-2003b 01.8500 10/01/2031
Federal Home Loan Mtg 02.5500 06/15/2035
Henrico Indl-Reg Link 05.9290 08/23/2027
Miami-Dade Cnty Rev 05.0000 10/01/2040
N Tx Twy Cab-Ref-I 06.5000 01/01/2043
California St-B-Txbl 02.1930 04/01/2047
Ky Pub Energy-C-1 04.0000 12/01/2049
Illinois St-D 05.0000 11/01/2026
Dallas Area Rapid-A 05.0000 12/01/2046
Holdings represent 15.56% of portfolio
Top 10 holdings as of 07/31/19
1.245 R Iswp Fwd Munipsa P 07/12/2025 07/12/2025
Sc Transprtn-2003b 01.9440 10/01/2031
Henrico Indl-Reg Link 05.9290 08/23/2027
N Tx Twy Cab-Ref-I 06.5000 01/01/2043
Miami-Dade Cnty Rev 05.0000 10/01/2040
California St-B-Txbl 02.1930 04/01/2047
Ky Pub Energy-C-1 04.0000 12/01/2049
Illinois St-D 05.0000 11/01/2026
Dallas Area Rapid-A 05.0000 12/01/2046
1.737 P Iswp Fwd Munipsa R 07/12/2040 Ci
Holdings represent 15.31% of portfolio
Top 10 holdings as of 06/30/19
Sc Transprtn-2003b 02.0500 10/01/2031
New York St Thruway-A 04.0000 02/01/2020
Henrico Indl-Reg Link 05.9290 08/23/2027
N Tx Twy Cab-Ref-I 06.5000 01/01/2043
Miami-Dade Cnty Rev 05.0000 10/01/2040
California St-B-Txbl 02.1930 04/01/2047
Ky Pub Energy-C-1 04.0000 12/01/2049
Dallas Area Rapid-A 05.0000 12/01/2046
Ms Business Fin-Ref 02.5000 04/01/2022
Centrl Plains Energy 05.0000 03/01/2050
Holdings represent 13.23% of portfolio
Top 10 holdings as of 05/31/19
Sc Transprtn-2003b 02.0779 10/01/2031
New York St Thruway-A 04.0000 02/01/2020
Henrico Indl-Reg Link 05.9290 08/23/2027
N Tx Twy Cab-Ref-I 06.5000 01/01/2043
Miami-Dade Cnty Rev 05.0000 10/01/2040
California St-B-Txbl 02.1930 04/01/2047
Dallas Area Rapid-A 05.0000 12/01/2046
Ms Business Fin-Ref 02.5000 04/01/2022
Harris Cult Ed Var-C1 02.0500 12/01/2024
Centrl Plains Energy 05.0000 03/01/2050
Holdings represent 13.05% of portfolio

Portfolio composition as of 08/31/19

Municipal bonds and notes 96.43%
Cash and net other assets 3.57%

Fixed income statistics as of 08/31/19

Average stated maturity 17.50 yrs.
Average effective maturity 5.88 yrs.
Option adjusted duration 6.58 yrs.
Duration to worst 4.94 yrs.
Average yield to maturity 3.08%
Average coupon 4.41%
Average price $111.64
AMT exposure 13.93%

Quality rating as of 08/31/19

AAA 2.27%
AA 28.16%
A 46.90%
BBB 15.82%
BB 1.41%
B 0.42%
Not Rated 1.45%
Cash and net other assets 3.57%

Fund characteristics will vary over time.

Due to rounding, percentages may not equal 100%.

Consider these risks before investing: Capital gains, if any, are taxable for federal and, in most cases, state purposes. For some investors, investment income may be subject to the federal alternative minimum tax. Income from federally tax-exempt funds may be subject to state and local taxes. 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 generally greater for longer-term bonds, and credit risk is generally 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. The value of investments in the fund's portfolio may fall or fail to rise over extended periods of time for a variety of reasons, including general economic, political or financial market conditions, investor sentiment and market perceptions, government actions, geopolitical events or changes, and factors related to a specific issuer, geography, industry or sector. These and other factors may lead to increased volatility and reduced liquidity in the fund's portfolio holdings. 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. Ratings may vary over time. Cash and net other assets, if any, represent the market value weights of cash, derivatives, and short-term securities in the portfolio. The fund itself has not been rated by an independent rating agency.

Top industry sectors as of 08/31/19

Transportation 17.66%
Health care 14.80%
Utilities 11.63%
State Debt 9.30%
Special Tax 8.77%
Financials 6.92%
Education 6.44%
Local Debt 5.35%
Cash and net other assets 3.57%
 
Other
15.56%
Industrials 3.46%
Prerefunded 3.06%
Other 2.72%
Housing 2.66%
Land 1.95%
Tobacco 1.71%

Sectors will vary over time.


Expenses

Expense ratio

Class A Class B Class C Class M Class R6 Class Y
Total expense ratio 0.77% 1.40% 1.55% 1.05% 0.53% 0.55%
What you pay 0.77% 1.40% 1.55% 1.05% 0.53% 0.55%

Sales charge

 Breakpoint Class A Class B Class C Class M Class R6 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 R6 Class Y
0 to 9 mts. 1.00% 5.00% 1.00% -- -- --
9 to 12 mts. 1.00% 5.00% 1.00% -- -- --
2 yrs. 0.00% 4.00% 0.00% -- -- --
3 yrs. 0.00% 3.00% 0.00% -- -- --
4 yrs. 0.00% 3.00% 0.00% -- -- --
5 yrs. 0.00% 2.00% 0.00% -- -- --
6 yrs. 0.00% 1.00% 0.00% -- -- --
7+ yrs. 0.00% 0.00% 0.00% -- -- --

Trail commissions

  Class A Class B Class C Class M Class R6 Class Y
  0.15%1 0.20% 1.00% 0.40% 0.00% 0.00%
  0.20%2 NA NA NA NA NA
  0.25%3 NA NA NA NA NA
  1. Through 12/31/92
  2. After 12/31/92through 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: Capital gains, if any, are taxable for federal and, in most cases, state purposes. For some investors, investment income may be subject to the federal alternative minimum tax. Income from federally tax-exempt funds may be subject to state and local taxes. 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 generally greater for longer-term bonds, and credit risk is generally 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. The value of investments in the fund's portfolio may fall or fail to rise over extended periods of time for a variety of reasons, including general economic, political or financial market conditions, investor sentiment and market perceptions, government actions, geopolitical events or changes, and factors related to a specific issuer, geography, industry or sector. These and other factors may lead to increased volatility and reduced liquidity in the fund's portfolio holdings. 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. Ratings may vary over time. Cash and net other assets, if any, represent the market value weights of cash, derivatives, and short-term securities in the portfolio. The fund itself has not been rated by an independent rating agency.