Effective August 28, 2020, the fund's name changed from Putnam AMT-Free Municipal Fund.

Active Income

Strategic Intermediate Municipal Fund (Class A)  (PPNAX)

A greater focus on absolute return than a more traditional municipal fund

Highlights

Objective

The fund seeks high current income exempt from federal income tax.

Strategy and process

  • Opportunistic strategy: Pursuing opportunities across the municipal market, the fund seeks to provide attractive income and returns with a focus on capital preservation.
  • An intermediate fund with more latitude: The fund has flexibility to respond to market opportunities and changes in the shape and slope of the municipal yield curve.
  • Opportunistic credit investing: While favoring investment-grade bonds, the fund can invest across the entire municipal landscape, including high-yield bonds, to leverage Putnam's deep municipal credit research expertise.

Fund price

 Yesterday’s close 52-week high 52-week low
Net asset value $15.42
0.13% | $0.02 		$15.64
02/28/20 		$13.69
03/20/20
(Optional)

Fund facts as of 11/30/20

Total net assets
$268.66M
Turnover (fiscal year end)
42%
Dividend frequency (view rate)
Monthly
Number of holdings
252
Fiscal year-end
July
CUSIP / Fund code
746872308 / 0039
Inception date
09/20/93
Category
Tax-free Income
Open to new investors
Ticker
PPNAX

Management team

Garrett L. Hamilton, CFA

Portfolio Manager

Paul M. Drury, CFA

Portfolio Manager

Manager commentary | Q4 2020

Intermediate muni strategy takes a new view of the yield curve

Portfolio Manager Garrett Hamilton, CFA, explains the fund’s new strategy and what makes the intermediate part of the curve attractive.

Literature

Record-setting muni issuance pauses post-election
Muni issuance pauses post-election, but reinvestment demand typically increases near year-end.
Munis outpace Treasuries, taxable bonds
The recovery in the municipal bond market continued in the third quarter as munis outpaced U.S. Treasuries and the broader taxable bond market.
Investors returning to municipal bond funds
Municipal bond funds rebounded in the second quarter as investors returned to asset classes they abandoned early in the pandemic.

Performance

Consistency of positive performance over five years

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

Performance shown above 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 see below.

9.74%

Best 5-year annualized return

(for period ending 09/30/92)

2.02%

Worst 5-year annualized return

(for period ending 09/30/08)

5.32%

Average 5-year annualized return

  • Total return (%) as of 09/30/20

  • Annual performance as of 09/30/20

Annualized Total return (%) as of 09/30/20

Annualized performance 1 yr. 3 yrs. 5 yrs. 10 yrs.
Before sales charge 2.91% 3.93% 3.52% 3.79%
After sales charge -1.21% 2.53% 2.68% 3.36%
BBG Barclays 3-15 Year Blend Municipal Bond Index 4.39%4.02%3.55%3.66%
Bloomberg Barclays Municipal Bond Index 4.09%4.28%3.84%3.99%

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 4.00% and 3.25% for income funds (2.25% for class A of 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, Putnam Short Duration Bond Fund, Putnam Fixed Income Absolute Return 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, 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 Strategic Intermediate Municipal Fund, which are based on the historical performance of class B shares). Performance for class A, C, R6, and Y shares of Putnam Mortgage Opportunities Fund before their inception is derived from the historical performance of class I shares, which have been adjusted for the applicable sales charge (or CDSC) and the higher operating expenses for such 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 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 11/30/20 1.38% -2.68%
YTD as of 12/02/20 3.54% -0.60%

Yield

Distribution rate before sales charge
as of 12/02/20		 1.63%
Distribution rate after sales charge
as of 12/02/20		 1.57%
30-day SEC yield with subsidy
as of 11/30/20 (after sales charge)		 0.68%
30-day SEC yield without subsidy
as of 11/30/20 (after sales charge)		 0.67%

Lipper rankings as of 10/31/20

Time period Rank/Funds in category Percentile ranking
1 yr. 118/209 57%
3 yrs. 20/178 12%
5 yrs. 19/158 12%
10 yrs. 11/118 10%
Lipper category: Intermediate Municipal Debt Funds

Morningstar Ratings™ as of 10/31/20

Time period Funds in category Morningstar Rating™
Overall 146
3 yrs. 146
5 yrs. 131
10 yrs. 105
Morningstar category: Muni National Long

Distributions

Accrual days 29
Accrual start date 11/02/20
Accrual end date 11/30/20
Payable date 11/30/20
Non-taxable income $0.019891481
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.

Tax-Equivalent Yield Calculator

When considering investing in municipal bonds, you should evaluate yields on a tax-equivalent basis, taking into account your tax liability on the interest earned from each.

  • Federally tax-exempt bonds typically yield less income than taxable bonds.
  • State and local income tax-exempt bonds may yield less than those whose interest is taxed in a particular jurisdiction.
1

What is your tax rate?

Incomes higher than $250,000 have NII taxes included

Federal Rate

0.00%

+

State Income

0.00%

=

Total Tax Rate

0.00%

2

Choose a fund

Submit
You've selected an in-state municipal fund
which currently yields 2.47%.

There are other types of bond funds to consider...

To get the equivalent yield as the in-state municipal
fund, each fund would have to yield:
Yield
In-state
muni
2.47%
Out-of-state muni
2.47%
U.S. Treasuries
2.47%
Other taxable funds
2.47%
Taxes
0%
Tax
5.05%
MA income tax
2.47%
Federal income tax
2.47%
MA + Federal income tax
...because a portion of the yield would go toward taxes!

Yield

Taxes

Equivalent

Putnam Massachusetts Tax Exempt Income Fund
Learn more

— or —

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

 Disclosures

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. Performance of class Y shares assumes reinvestment of distributions and does not account for taxes. 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. Performance for class Y shares prior to their inception is derived from the historical performance of class A shares, which have not been adjusted for the lower expenses; had they, returns would have been higher. For the most recent month-end performance, please visit putnam.com.

Putnam

The output of this calculator is for educational purposes only and should not be considered investment, legal or tax advice as is not intended to serve as the primary or sole basis for investment or tax-planning decisions. It is intended for U.S. individual taxpayers residing in the 50 states and the District of Columbia, and is not applicable to trusts, estates, corporations or persons subject to special rules under federal, state or local income tax laws. The taxes calculated on investment income does not apply to funds and accounts held outside qualified retirement plans and other tax-deferred or tax-exempt investments.

Laws of a particular state, or laws which may be applicable to a particular situation, may have an impact on the applicability, accuracy, or completeness of information provided. Putnam does not guarantee that the content is accurate, complete, or timely, or that the calculator produces accurate or complete results.

For more individualized information, consult your tax advisor or investment professional. You bear sole responsibility for any decisions made based on the output of this calculator. The calculator makes certain assumptions that may not apply to you. The calculator has many inherent limitations, and individual results may vary.

Calculator assumptions

The calculator displays the federal and state tax rates assumed in calculating tax equivalent yields based on a chosen income level and filing status. Indicated rates are those that apply to an incremental dollar of additional income, which may vary from your average tax rates. The 3.8% net investment income (NII) federal tax applies to individuals, estates and trusts with modified adjusted gross income (MAGI) above applicable threshold amounts ($200,000 for single and head of household; $250,000 for married filing jointly). While reasonable efforts are made to make timely updates to tax rates and income tax brackets used by this calculator, there may be a delay in when the tool reflects those changes.

The calculator does not take into account:

  • Reductions and limits on federal itemized deductions
  • State and local taxes are not deducted from your federal tax rate. Depending on your personal scenario, this may cause the resulting yield to be overstated
  • Federal alternative minimum tax (AMT)
  • State alternative minimum tax
  • Intangibles taxes levied by individual states
  • Local income tax rates imposed by cities, counties or other local jurisdictions on investment income and gains

You should review the assumed tax rates against your actual tax rates based on your individual tax situation when analyzing and interpreting this calculator's results.

Holdings

Ca Infra Econ Dev-A 144a 00.4500 01/01/2050 3.26%
Wa Hlth Care-C-Var 01.1700 01/01/2042 3.10%
Sc Transprtn-2003b 00.5500 10/01/2031 3.05%
La Dept Of Arpts-C 05.0000 05/15/2026 2.82%
Hudson Cnty Nj Impt 03.0000 10/01/2034 2.77%
Metro Pier Cabs-Ref-A 00.0000 12/15/2022 2.04%
Ca Pub Fin Auth-C 00.0800 08/01/2052 1.92%
Mi Strat Ref Detro-Bb 07.0000 05/01/2021 1.64%
Florida St Brd Of Adm 01.2580 07/01/2025 1.55%
Nyc-Adj-1-Subser I-2 00.0700 03/01/2040 1.53%
Top 10 holdings, percent of portfolio 23.68%

Portfolio composition as of 10/31/20

Municipal bonds and notes 98.18%
Cash and net other assets 1.82%

Fixed income statistics as of 10/31/20

Average stated maturity 16.04 yrs.
Average effective maturity 5.44 yrs.
Option adjusted duration 6.28 yrs.
Duration to worst 4.62 yrs.
Average yield to maturity 2.41%
Average coupon 4.06%
AMT exposure 7.00%

Quality rating as of 10/31/20

AAA 8.50%
AA 25.63%
A 42.79%
BBB 18.33%
BB 1.17%
Not Rated 1.76%
Cash and net other assets 1.82%

Fund characteristics will vary over time.

Due to rounding, percentages may not equal 100%.

Consider these risks before investing: 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. 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 may be taxable. 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. Our investment techniques, analyses, and judgments may not produce the outcome we intend. The investments we select for the fund may not perform as well as other securities that we do not select for the fund. We, or the fund's other service providers, may experience disruptions or operating errors that could have a negative effect on the fund. 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 10/31/20

Health care 21.21%
Education 11.54%
Special Tax 10.13%
Utilities 8.12%
Local Debt 8.07%
Other 7.80%
State Debt 7.48%
Transportation 7.47%
Financials 5.92%
 
Other		 12.26%
Land 4.23%
Tobacco 2.64%
Prerefunded 1.87%
Cash and net other assets 1.82%
Industrials 1.46%
Housing 0.24%

Sectors will vary over time.

Expenses

Expense ratio

 Class A Class B Class C Class R6 Class Y
Total expense ratio 0.84% 1.44% 1.59% 0.58% 0.59%
What you pay 0.84% 1.44% 1.59% 0.58% 0.59%

Sales charge

Investment Breakpoint Class A Class B Class C Class R6 Class Y
$0-$49,999 4.00% 0.00% 0.00% -- --
$50,000-$99,999 4.00% 0.00% 0.00% -- --
$100,000-$249,999 3.25% -- 0.00% -- --
$250,000-$499,999 2.50% -- 0.00% -- --
$500,000-$999,999 0.00% -- -- -- --
$1M-$4M 0.00% -- -- -- --
$4M-$50M 0.00% -- -- -- --
$50M+ 0.00% -- -- -- --

CDSC

  Class A (sales for $500,000+) Class B Class C 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% -- --

The Bloomberg Barclays 3-15 Year Blend Municipal Bond Index is an unmanaged index comprised of investment-grade municipal securities ranging from 2 and 17 years in maturity. 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: 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. 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 may be taxable. 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. Our investment techniques, analyses, and judgments may not produce the outcome we intend. The investments we select for the fund may not perform as well as other securities that we do not select for the fund. We, or the fund's other service providers, may experience disruptions or operating errors that could have a negative effect on the fund. 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.