Putnam Allstate Advisor Plus

Putnam Mortgage Securities Subaccount

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

Fund description

The subaccount typically divides its assets between U.S. Treasury securities and Government National Mortgage Association certificates (Ginnie Maes). The fund takes a slightly more aggressive approach to total return by investing in longer-term securities. Investors should have an investment horizon of at least three years to give their investment the full potential to benefit from a typical interest-rate cycle.

Sales story

Seeking opportunities through mortgage-backed securitiesBroad securitized opportunities:The fund invests in mortgage sectors, including agency MBS and CMOs, and non-agency RMBS and CMBS, and ABS.Higher potential returns: By investing in mortgage-backed bonds, the fund can offer the potential for higher returns than an investment strategy focused only on agency MBS.Leading research: The fund's portfolio managers use proprietary models to assist in the evaluation of mortgage-backed bonds and to manage the fund's interest-rate risk.

Management team

Daily pricing as of 11/18/19

with optional enhanced death benefits
Unit Value $17.875104 $17.346038
Unit Value Change -0.00237 -0.002514

Lipper ranking ‡ as of 10/31/19

Category: U.S. Mortgage Funds

  Percentile ranking Rank/Funds in category
10 yrs. 38% 3/7
1 yr. 13% 2/15
3 yrs. 15% 2/13
5 yrs. 58% 8/13

Maturity detail includes only cash bonds and cash equivalents.

Mutual funds that invest 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 10/31/19

Fiscal Year End December
Asset Class Putnam Allstate Advisor Plus
Subaccount Status Open to new investors
Number of issues 757
Turnover (fiscal year end) 1,142%
Net Assets $57M
Inception Date 02/01/00

Performance

Performance as of 09/30/19

Annualized Performance Last Quarter Year
to Date
1 yr. 3 yrs. 5 yrs. 10 yrs. Life of
subaccount
Restated performance
Unit Value 2.79% 9.31% 8.50% 1.39% 0.65% 1.51% 3.04%
Standardized -5.21% 1.31% 0.50% -1.28% -0.55% 1.51% 3.04%
With optional enhanced death benefit
Unit Value 2.76% 9.19% 8.34% 1.23% 0.50% 1.35% 2.88%
Standardized -5.24% 1.19% 0.34% -1.44% -0.71% 1.35% 2.88%
Actual performance
Unit Value 2.79% 9.31% 8.50% 1.39% 0.65% 1.51% 2.97%
Standardized -5.21% 1.31% 0.50% -1.28% -0.55% 1.51% 2.97%
With optional enhanced death benefit
Unit Value 2.76% 9.19% 8.34% 1.23% 0.50% 1.35% 2.81%
Standardized -5.24% 1.19% 0.34% -1.44% -0.71% 1.35% 2.81%

Annual Performance at NAV

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
19.06% 3.48% 5.09% 0.22% -2.07% 2.64% -2.24% -1.39% 0.33% -2.50%
With optional enhanced death benefit
18.88% 3.32% 4.93% 0.07% -2.22% 2.49% -2.39% -1.54% 0.18% -2.65%

Restated performance

Monthly as of 10/31/19

Unit Value 0.47%
Standardized -7.53%

YTD as of 11/18/19

Unit Value 10.39%
Standardized 2.39%

With optional enhanced death benefit

Monthly as of 10/31/19

Unit Value 0.45%
Standardized -7.55%

YTD as of 11/18/19

Unit Value 10.25%
Standardized 2.25%

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.

Mutual funds that invest 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 10/31/19

Avg. Eff. Maturity 4.56
Avg. Eff. Duration 1.20
Avg. Coupon 5.54
Avg. Yield to Maturity 5.42
Alpha (%) --
Beta 0.72
R Squared 0.64
Standard Deviation (3 yrs.) 2.57

Maturity Details

0 to 1 yr. -12.05%
1 to 5 yrs. 75.36%
5 to 10 yrs. 36.63%
10 to 15 yrs. -0.10%
Over 15 yrs. 0.16%

Quality Ratings

AAA 82.14%
AA 5.31%
A 15.98%
BBB 8.68%
BB 2.68%
B 6.04%
CCC and Below 2.96%
Not Rated -23.79%

Holdings

Gnma Gii30 Tba 04.0000 11/01/2049 10.92%
Gnma Gii30 Tba 03.0000 12/01/2049 9.00%
Fnma Fn30 Tba Umbs 04.5000 11/01/2049 3.68%
Gnma Gii30 Tba 04.5000 11/01/2049 3.67%
Fnr 2007-95 A3 02.2684 08/27/2036 3.15%
Gnma Gii30 Tba 05.0000 11/01/2049 1.85%
Fnma Fn30 Tba Umbs 04.0000 11/01/2049 1.82%
Fnma Fn30 Tba Umbs 02.5000 11/01/2049 1.74%
Fnma Fn30 Av7065 Umbs 03.5000 05/01/2045 1.42%
Bf0101 03.5000 06/01/2056 1.38%
Top 10 holdings, total: 38.63%


Top 10 holdings as of 10/31/19
1: Gnma Gii30 Tba 04.0000 11/01/2049 10.92%
2: Gnma Gii30 Tba 03.0000 12/01/2049 9.00%
3: Fnma Fn30 Tba Umbs 04.5000 11/01/2049 3.68%
4: Gnma Gii30 Tba 04.5000 11/01/2049 3.67%
5: Fnr 2007-95 A3 02.2684 08/27/2036 3.15%
6: Gnma Gii30 Tba 05.0000 11/01/2049 1.85%
7: Fnma Fn30 Tba Umbs 04.0000 11/01/2049 1.82%
8: Fnma Fn30 Tba Umbs 02.5000 11/01/2049 1.74%
9: Fnma Fn30 Av7065 Umbs 03.5000 05/01/2045 1.42%
10: Bf0101 03.5000 06/01/2056 1.38%
Holdings represent 38.63% of portfolio
Top 10 holdings as of 09/30/19
1: Gnma Gii30 Tba 03.5000 10/01/2049 9.06%
2: Gnma Gii30 Tba 03.0000 10/01/2049 8.97%
3: Gnma Gii30 Tba 04.5000 10/01/2049 5.48%
4: Gnma Gii30 Tba 04.0000 10/01/2049 5.46%
5: Fnr 2007-95 A3 02.3953 08/27/2036 3.15%
6: Gnma Gii30 626947 04.0000 05/20/2045 2.19%
7: Gnma Gii30 Tba 05.0000 10/01/2049 1.84%
8: Fnma Fn30 Tba Umbs 04.5000 10/01/2049 1.84%
9: Fnma Fn30 Tba Umbs 04.0000 10/01/2049 1.82%
10: Fnma Fn30 Tba Umbs 02.5000 11/01/2049 1.74%
Holdings represent 41.55% of portfolio
Top 10 holdings as of 08/31/19
1: Gnma Gii30 Tba 03.5000 09/01/2049 9.13%
2: Gnma Gii30 Tba 03.0000 09/01/2049 9.06%
3: Gnma Gii30 Tba 04.5000 09/01/2049 5.52%
4: Gnma Gii30 Tba 04.0000 09/01/2049 5.50%
5: Fnma Fn30 Tba Umbs 03.0000 09/01/2049 3.58%
6: Fnr 2007-95 A3 02.5160 08/27/2036 3.16%
7: Gnma Gii30 626947 04.0000 05/20/2045 2.17%
8: Fnma Fn30 Tba Umbs 04.5000 09/01/2049 1.85%
9: Gnma Gii30 Tba 05.0000 09/01/2049 1.85%
10: Fnma Fn30 Tba Umbs 04.0000 09/01/2049 1.83%
Holdings represent 43.65% of portfolio
Top 10 holdings as of 07/31/19
1: Fnma Fn30 Tba Umbs 03.0000 08/01/2049 28.62%
2: Gnma Gii30 Tba 03.5000 08/01/2049 9.16%
3: Gnma Gii30 Tba 03.0000 08/01/2049 9.05%
4: Gnma Gii30 Tba 04.5000 08/01/2049 5.54%
5: Gnma Gii30 Tba 04.0000 08/01/2049 5.52%
6: Fnr 2007-95 A3 02.6544 08/27/2036 3.19%
7: Gnma Gii30 626947 04.0000 05/20/2045 2.19%
8: Fnma Fn30 Tba Umbs 04.5000 08/01/2049 1.86%
9: Gnma Gii30 Tba 05.0000 08/01/2049 1.85%
10: Fnma Fn30 Tba Umbs 04.0000 08/01/2049 1.84%
Holdings represent 68.82% of portfolio


Sector Weightings as of 10/31/19

Cash Investment Non-Cash Investment Total Portfolio
Weight Spread Duration Weight Spread Duration Weight Spread Duration
Commercial MBS 8.16% 0.26 35.27% 0.75 43.43% 1.01
Agency pass-through 12.43% 0.66 29.97% 0.95 42.40% 1.61
Agency CMO 39.35% 1.56 0.63% 0.02 39.98% 1.58
Residential MBS (non-agency) 21.74% 0.93 0.00% 0.00 21.74% 0.93
Net cash 16.27% 0.00 0.00% 0.00 16.27% 0.00
Asset-backed securities (ABS) 2.05% 0.07 0.00% 0.00 2.05% 0.07
Interest rate swaps 0.00% 0.00 0.00% -1.77 0.00% -1.77
U.S. Treasury/agency 0.00% 0.00 0.00% 0.05 0.00% 0.05

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. Mutual funds that invest 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.

Any given fund may not achieve its goal, and is not intended as a complete investment program. All funds have risk. The value and/or returns of a portfolio will flu ctuate with market conditions. You may have more or less than the original amount invested when you redeem your shares.


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.

Mutual funds that invest 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 8.00%
2 8.00%
3 8.00%
4 7.00%
5 6.00%
6 5.00%
7 4.00%
8 3.00%
9+ 0.00%