Massachusetts Tax Exempt Income Fund  (PXMAX)

Seeking a high level of tax-free income

Objective

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

Strategy and process

  • Tax-advantaged income: The fund offers Massachusetts residents the potential for high current income that is free from federal income tax and Massachusetts 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.

Fund price

Yesterday’s close 52-week high 52-week low
Net asset value $9.61
-0.21% | $-0.02
$9.68
11/08/17
$9.43
12/01/16
Historical fund price

Fund facts as of 10/31/17

Total net assets
$285.00M
Turnover (fiscal year end)
19%
Dividend frequency (view rate)
Monthly
Number of holdings
164
Fiscal year-end
May
CUSIP / Fund code
74683H309 / 0025
Inception date
10/23/89
Category
Tax-free Income
Open to new investors
Ticker
PXMAX

Management team


Portfolio Manager

Portfolio Manager


Literature


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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.

9.42%

Best 5-year annualized return

(for period ending 12/31/95)


1.81%

Worst 5-year annualized return

(for period ending 12/31/08)


5.35%

Average 5-year annualized return


  • 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 0.07% 2.53% 2.12% 4.14%
After sales charge -3.93% 1.15% 1.29% 3.71%
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 10/31/17 0.33 % -3.68 %
YTD as of 11/21/17 3.94 % -0.22 %

Yield

Distribution rate before sales charge
as of 11/21/17
2.92%
Distribution rate after sales charge
as of 11/21/17
2.80%
30-day SEC yield as of 10/31/17
(after sales charge)
1.58%

Risk-adjusted performance as of 10/31/17

Sharpe ratio (3 yrs.) 0.75
Information ratio (3 yrs.) -0.90

Volatility as of 10/31/17

Standard deviation (3 yrs.) 2.83%
Beta 0.86
R-squared 0.97

Lipper rankings as of 10/31/17

Massachusetts Municipal Debt Funds Percentile ranking Rank/Funds in category
1 yr. 34% 14/41
3 yrs. 35% 14/39
5 yrs. 44% 16/36
10 yrs. 19% 6/32

Morningstar ratings as of 10/31/17

Muni Massachusetts Rating Funds in category
Overall (47)
3 yrs. (47)
5 yrs. (43)
10 yrs. (39)

Distributions

Accrual days 32
Accrual start date 10/02/17
Accrual end date 10/31/17
Payable date 10/31/17
Non-taxable income $0.022116816
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.


Holdings

Top 10 holdings as of 10/31/17

Ma Dev Wgbh Edl-Ser A 05.7500 01/01/2042 2.44%
Ma Bay Trans-A 04.0000 07/01/2037 1.86%
Ma Dev Fin Agy-L 05.0000 07/01/2031 1.78%
Massachusetts St Dev 04.0000 07/01/2046 1.72%
Ma Bay Trn 05.0000 07/01/2031 1.53%
N Reading-Muni Purp 05.0000 05/15/2035 1.52%
Ma St Wtr 05.0000 08/01/2032 1.51%
Ma Wtr Resource-C-Ref 05.2500 08/01/2042 1.41%
Ma H/E-Mit-Ser I-1 05.2000 01/01/2028 1.37%
Ma St Port-Ser A 05.0000 07/01/2034 1.36%
Top 10 holdings, percent of portfolio 16.50%

Full portfolio holdings as of 09/30/17

MA DEV WGBH EDL-SER A 05.7500 01/01/2042 2.36%
MA BAY TRANS-A 04.0000 07/01/2037 1.85%
MA DEV FIN AGY-L 05.0000 07/01/2031 1.76%
MASSACHUSETTS ST DEV 04.0000 07/01/2046 1.70%
N READING-MUNI PURP 05.0000 05/15/2035 1.52%
MA BAY TRN 05.0000 07/01/2031 1.51%
MA ST WTR 05.0000 08/01/2032 1.50%
MA WTR RESOURCE-C-REF 05.2500 08/01/2042 1.39%
MA H/E-MIT-SER I-1 05.2000 01/01/2028 1.36%
MA ST PORT-SER A 05.0000 07/01/2034 1.36%
MA CLG REF-SER B 05.5000 05/01/2028 1.30%
MASSACHUSETTS ST-I 05.0000 12/01/2035 1.26%
MASSACHUSETTS ST-A 05.0000 04/01/2047 1.25%
MA TRANS FUND-A 05.0000 06/01/2038 1.24%
MA WTR RES AUTH-B-REF 05.0000 08/01/2040 1.24%
MA CLG BLDG-B-REF 05.0000 05/01/2043 1.23%
MA SCH BLDG-B-SENIOR 05.0000 11/15/2046 1.23%
MASSACHUSETTS TRANS-A 05.0000 06/01/2045 1.22%
MA H/E HARVARD UNIV-N 06.2500 04/01/2020 1.21%
MA PORT AUTH-A-AMT 05.0000 07/01/2047 1.21%
MA DEV FIN AGY-PREREF 05.0000 01/01/2040 1.19%
WORCESTER-MUNI PURP 04.0000 11/01/2023 1.16%
MA CLG BLDG-A 05.0000 05/01/2036 1.14%
MASSACHUSETTS ST 04.0000 05/01/2035 1.13%
MASSACHUSETTS ST 04.0000 04/01/2046 1.12%
MA DEV-MOUNT HOLYOKE 05.0000 07/01/2028 1.09%
MA EDU FIN AUTH-I-AMT 05.0000 01/01/2027 1.09%
MA ST DEV FIN AGY 05.2500 07/01/2038 1.09%
MASSACHUSETTS ST-B 05.0000 04/01/2047 1.07%
MA TRANS-SR-B 05.0000 01/01/2032 1.05%
MA VAR-CONS LN-SER A 00.8700 03/01/2026 1.05%
MASSACHUSETTS ST-A 05.0000 04/01/2042 1.04%
MA DEV FIN AGY-E-OLIN 05.0000 11/01/2043 1.01%
UNIV MA BLDG-SR-1 05.0000 11/01/2039 1.01%
MA DEV FIN AGY-I 05.0000 07/01/2041 0.98%
MASS PORT AUTH-AMT 05.0000 07/01/2027 0.89%
MILFORD 05.1250 12/15/2024 0.88%
MA H/E-WINCHESTER HSP 05.2500 07/01/2038 0.85%
MA ST DEV FIN AGY 05.2500 10/01/2033 0.85%
MA TRANS-SR-B 05.0000 01/01/2037 0.85%
MASSACHUSETTS 05.0000 07/01/2033 0.84%
MA FIN 07.2500 01/01/2032 0.83%
MA SCH BLDG-A 05.0000 11/15/2042 0.83%
MASS CLG BLDG-A 05.0000 05/01/2028 0.83%
MA FED HWY-A 05.0000 06/15/2022 0.82%
MA HLTH & ED-T2-REMK 05.0000 10/01/2030 0.82%
MA SCH BLDG AUTH-C 05.0000 08/15/2037 0.82%
MA SCH BLDG AUTH-B 05.0000 10/15/2041 0.80%
MASSACHUSETTS ST DEV 05.0000 07/01/2041 0.80%
MASSACHUSETTS TRANS-A 05.0000 06/01/2044 0.80%
MA DEV FIN AGY-DEXTER 05.0000 05/01/2041 0.79%
MA FIN-B1-LESLEY UNIV 05.2500 07/01/2033 0.79%
HAMPDEN ETC REGL SD 05.0000 02/15/2041 0.77%
MA H/E VAR-TUFTS-N-2 00.8000 08/15/2034 0.77%
MASS DEV FIN AGY -V-1 05.0000 10/01/2029 0.77%
MA DEV FIN-A-PREREF 05.7500 07/01/2039 0.76%
MA HSG FIN-A 03.5000 12/01/2031 0.73%
MA ST-CONS LN-SER A 05.0000 08/01/2027 0.73%
MA PORT AUTH-A 05.1250 07/01/2041 0.69%
MA HSG FIN-A 03.2500 12/01/2027 0.68%
MA DEV FIN SLD WST 05.7500 12/01/2042 0.65%
MA ST HLTH-E-1 05.0000 07/01/2028 0.63%
MA DEV FIN-A-UNREF 05.5000 11/15/2036 0.62%
MA PORT AUTH-REF-A 05.0000 07/01/2035 0.62%
MA WTR RES AUTH-B 05.0000 08/01/2040 0.62%
MASSACHUSETTS ST DEV 05.0000 01/01/2040 0.62%
MA CLEAN ENERGY 05.0000 07/01/2028 0.61%
MA DEV FIN AGY-G 05.0000 07/01/2037 0.61%
MASSACHUSETTS ST CLG 05.0000 05/01/2039 0.61%
CALIFORNIA ST 05.0000 02/01/2038 0.60%
MA CLG BLDG-B-REF 05.0000 05/01/2037 0.60%
MA DEV FIN AGY 05.2500 10/01/2041 0.60%
MA DEV-SUFFOLK UNIV 05.1250 07/01/2040 0.59%
MA H/E DANA-FARBER-K 05.2500 12/01/2027 0.56%
MA HLTH-SOUTHCOAST 05.0000 07/01/2039 0.55%
MASSACHUSETTS ST-G 04.0000 09/01/2042 0.55%
MA PORT AUTH-A-AMT 05.0000 07/01/2042 0.52%
MA ST DEV-B-ZERO CPN 00.0000 01/01/2028 0.51%
MA WTR RES -A 06.5000 07/15/2019 0.51%
MA HFA-SER D 05.0500 06/01/2040 0.50%
MASS DEV FIN AGY-C 05.2500 10/01/2029 0.50%
MA DEV FIN AGY 05.0000 07/01/2040 0.49%
MA ST DEV-B-ZERO CPN 00.0000 01/01/2029 0.49%
MA HSG FIN AGY-178 03.5000 06/01/2042 0.46%
MA ST DEV FIN AGY-N 05.0000 12/01/2036 0.45%
MA DEV FIN AGY-A 05.0000 10/01/2034 0.44%
MA HSG FIN AGY-169 04.0000 12/01/2044 0.44%
CHILDRENS TR FD-ASSET 05.5000 05/15/2039 0.43%
MA H/E NESTRN UNV-R 05.0000 10/01/2026 0.43%
MA HSG FIN-A 05.1000 12/01/2030 0.42%
MISSION ECON-VAR-A 01.1000 01/01/2020 0.42%
MA DEV FIN AGY 05.0000 07/01/2030 0.41%
MA DEV FIN AGY-E-OLIN 05.0000 11/01/2038 0.41%
MA DEV FIN AGY-T 05.0000 07/01/2042 0.41%
MA HLTH & ED-T1-REMK 05.0000 10/01/2030 0.41%
MASS ED FIN AUTH -B 05.7000 01/01/2031 0.41%
MA CLEAN ENERGY 05.0000 07/01/2032 0.40%
MA DEV FIN-1ST MTGE 05.0000 07/01/2031 0.40%
MA H/E FISHER COLL-A 05.0000 04/01/2022 0.40%
MA SCH BLDG AUTH-B 05.0000 10/15/2035 0.40%
MASSACHUSETTS ST-A 05.0000 03/01/2041 0.40%
MASSACHUSETTS ST-A 05.0000 03/01/2046 0.40%
GUAM GOVT-30-A 05.3750 12/01/2024 0.39%
MA DEV FIN AGY-E 05.0000 07/01/2035 0.39%
MA DEV FIN AGY-N 05.0000 07/01/2034 0.39%
MA DEV-Q1-BOSTON CLG 05.0000 07/01/2029 0.39%
MASS DEV FIN AGY-K 05.0000 07/01/2038 0.39%
MASSACHUSETTS DEV FIN 05.0000 10/01/2041 0.39%
MA DEV FIN-A-UNREF 05.7500 07/01/2039 0.38%
MA DEV-O-1-BRANDEIS 05.0000 10/01/2035 0.38%
MA H/E LESLEY UNV-A 05.2500 07/01/2039 0.38%
MA HSG FIN-AMT-C 05.3500 12/01/2042 0.38%
MA ST HLTH-B-1 05.3750 02/01/2027 0.38%
MA DEV FIN -B-UNREF 05.0000 09/01/2025 0.37%
MA DEV FIN AGY-I 05.0000 07/01/2036 0.37%
MA SCH BLDG-A-SR 05.0000 05/15/2043 0.37%
MA DEV FIN AGY-PREREF 05.5000 01/01/2030 0.32%
MA DEV SABIS INTL-A 08.0000 04/15/2039 0.32%
MA PORT AUTH -A 05.0000 07/01/2033 0.32%
HOLYOKE-REF 05.0000 09/01/2029 0.31%
MA DEV FIN AGY-DEXTER 05.0000 05/01/2026 0.31%
MA PORT AUTH -A 05.0000 07/01/2032 0.31%
MAS H/E MILFORD MED 05.0000 07/15/2037 0.30%
WARREN HLTHCR-REF 05.0000 07/01/2032 0.30%
MA ST DEV FIN AGY-REF 05.0000 04/15/2033 0.29%
MA H/E VAR-J2-BAYSTAT 00.8300 07/01/2044 0.28%
MA DEV FIN AGY 05.0000 07/01/2034 0.27%
MA H/E FISHER COLL-A 05.1250 04/01/2037 0.27%
MA HLTH-C-LOWELL 05.1250 07/01/2035 0.27%
MA ST DEV FIN AGY-F 05.0000 07/01/2025 0.27%
MA DEV FIN AGY 05.0000 10/01/2037 0.26%
MA ST DEV FIN AGY 05.2500 12/01/2025 0.26%
MA DEV FIN AGY 05.0000 07/01/2036 0.24%
CHILDRENS TR FD-ASSET 05.3750 05/15/2033 0.23%
GUAM WATERWORKS AUTH 05.6250 07/01/2040 0.23%
MA DEV FIN AGY-DEXTER 05.0000 05/01/2027 0.21%
MA DEV FIN 05.0000 10/01/2031 0.20%
MA DEV FIN AGY-I 05.0000 07/01/2037 0.20%
MA DEV FIN-A-PREREF 05.5000 11/15/2036 0.20%
MA DEV FIN-F 05.6250 07/15/2036 0.20%
MA DEV-A1-LINDEN POND 06.2500 11/15/2046 0.20%
MA EDU FIN AUTH-I-AMT 04.3750 01/01/2032 0.20%
MA HSG FIN-171 04.0000 12/01/2044 0.20%
MASS DEV-ORCHARD CV 05.0000 10/01/2019 0.20%
MASS ST DEV-Q-REF 05.0000 08/15/2038 0.20%
GUAM PWR-A 05.5000 10/01/2040 0.19%
MA EDL FIN-J-ED REV 05.6250 07/01/2028 0.19%
MA DEV FIN AGY-H 05.0000 07/01/2037 0.18%
MASS DEV-ORCHARD CV 05.0000 10/01/2018 0.18%
MA DEV FIN -B-PREREF 05.0000 09/01/2025 0.17%
MA ST DEV FIN AGY 05.0000 10/01/2039 0.17%
MA DEV FIN AGY-A-REF 05.0000 10/01/2023 0.13%
MA DEV FIN AGY-A 06.0000 01/01/2033 0.12%
MA DEV FIN AGY-H 05.0000 07/01/2032 0.12%
MA HLTH-NORTHESTN-A 05.0000 10/01/2035 0.12%
MA DEV FIN AGY-A-REF 05.0000 10/01/2024 0.11%
MA DEV FIN AGY-UNREF 05.0000 01/01/2040 0.11%
MASS ST HSG-SF-160 03.7500 06/01/2034 0.10%
GUAM PWR AUTH-A-REF 05.0000 10/01/2034 0.07%
MA HLTH & ED-A-UNREF 05.0000 10/01/2037 0.07%
MA ST DEV FIN AGY-F 05.0000 07/01/2023 0.05%
MA DEV FIN AGY-A-2-II 05.5000 11/15/2046 0.03%
MA DEV FIN AGY-UNREF 05.5000 01/01/2030 0.03%
MASSACUSETTS ST DEV FIN AGY R 00.0000 11/15/2056 0.01%

Prior top 10 holdings

Top 10 holdings as of 10/31/17
Ma Dev Wgbh Edl-Ser A 05.7500 01/01/2042
Ma Bay Trans-A 04.0000 07/01/2037
Ma Dev Fin Agy-L 05.0000 07/01/2031
Massachusetts St Dev 04.0000 07/01/2046
Ma Bay Trn 05.0000 07/01/2031
N Reading-Muni Purp 05.0000 05/15/2035
Ma St Wtr 05.0000 08/01/2032
Ma Wtr Resource-C-Ref 05.2500 08/01/2042
Ma H/E-Mit-Ser I-1 05.2000 01/01/2028
Ma St Port-Ser A 05.0000 07/01/2034
Holdings represent 16.50% of portfolio
Top 10 holdings as of 09/30/17
Ma Dev Wgbh Edl-Ser A 05.7500 01/01/2042
Ma Bay Trans-A 04.0000 07/01/2037
Ma Dev Fin Agy-L 05.0000 07/01/2031
Massachusetts St Dev 04.0000 07/01/2046
N Reading-Muni Purp 05.0000 05/15/2035
Ma Bay Trn 05.0000 07/01/2031
Ma St Wtr 05.0000 08/01/2032
Ma Wtr Resource-C-Ref 05.2500 08/01/2042
Ma H/E-Mit-Ser I-1 05.2000 01/01/2028
Ma St Port-Ser A 05.0000 07/01/2034
Holdings represent 16.31% of portfolio
Top 10 holdings as of 08/31/17
Ma Dev Wgbh Edl-Ser A 05.7500 01/01/2042
Ma Bay Trans-A 04.0000 07/01/2037
Ma Dev Fin Agy-L 05.0000 07/01/2031
Massachusetts St Dev 04.0000 07/01/2046
Ma Bay Trn 05.0000 07/01/2031
N Reading-Muni Purp 05.0000 05/15/2035
Ma St Wtr 05.0000 08/01/2032
Ma Wtr Resource-C-Ref 05.2500 08/01/2042
Ma H/E-Mit-Ser I-1 05.2000 01/01/2028
Ma St Port-Ser A 05.0000 07/01/2034
Holdings represent 16.32% of portfolio
Top 10 holdings as of 07/31/17
Ma Dev Wgbh Edl-Ser A 05.7500 01/01/2042
Ma Bay Trans-A 04.0000 07/01/2037
Ma Dev Fin Agy-L 05.0000 07/01/2031
Massachusetts St Dev 04.0000 07/01/2046
Ma St Wtr 05.0000 08/01/2032
N Reading-Muni Purp 05.0000 05/15/2035
Ma Bay Trn 05.0000 07/01/2031
Ma Wtr Resource-C-Ref 05.2500 08/01/2042
Ma H/E-Mit-Ser I-1 05.2000 01/01/2028
Ma St Port-Ser A 05.0000 07/01/2034
Holdings represent 16.35% of portfolio

Portfolio composition as of 10/31/17

Municipal bonds and notes 96.65%
Cash and net other assets 3.35%

Fixed income statistics as of 10/31/17

Average stated maturity 18.32 yrs.
Average effective maturity 6.06 yrs.
Option adjusted duration 7.05 yrs.
Duration to worst 4.76 yrs.
Average yield to maturity 3.46%
Average coupon 4.81%
Average price $111.00
AMT exposure 5.39%

Quality rating as of 10/31/17

AAA 11.00%
AA 50.88%
A 19.14%
BBB 11.60%
BB 0.65%
Not Rated 3.38%
Cash and net other assets 3.35%

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 10/31/17

Education 25.65%
Special Tax 11.79%
Health care 10.87%
Prerefunded 10.14%
State Debt 9.65%
Transportation 6.98%
Utilities 6.31%
Other 6.27%
Housing 4.22%
 
Other
8.12%
Local Debt 3.91%
Cash and net other assets 3.35%
Tobacco 0.65%
Industrials 0.21%

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 0.80% 1.42% 1.57% 1.07% 0.57%
What you pay 0.80% 1.42% 1.57% 1.07% 0.57%

Sales charge

Investment Breakpoint Class A Class B Class C Class M Class Y
$0-$49,999 4.00% 0.00% 0.00% 3.25% --
$50,000-$99,999 4.00% 0.00% 0.00% 2.25% --
$100,000-$249,999 3.25% -- 0.00% 1.25% --
$250,000-$499,999 2.50% -- 0.00% 1.00% --
$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 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% -- --

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.