Short Duration Income Fund (PSDTX)

Seeking capital preservation and a higher rate of current income

Expand the income potential of your conservative allocations

A wider range of sectors can lead to greater income potential

For investors looking to add to their conservative allocations, the fund seeks to offer a balance of capital preservation and income potential by investing in a wider range of sectors than traditional money markets and by actively managing risk.

A wide range of sectors can lead to greater income potential

A history of low volatility

Since the fund’s inception, its NAV has never dropped below $10.00 per share.

Since the fund's inception, its NAV has never dropped below $10.00 per share

Portfolio composition as of 9/30/13

Portfolio composition of the Putnam Short Duration Income Fund

Quality rating as of 9/30/13

Quality rating of this bond fund
A wide range of sectors can lead to greater income potential Since the fund's inception, its NAV has never dropped below $10.00 per share Portfolio composition of the Putnam Short Duration Income Fund Quality rating of this bond fund

The fund can invest in more bond sectors than money market funds and, as a result, will be exposed to a larger number of risks. Investors should be aware of the differences between Putnam Short Duration Income Fund and a money market fund before investing: Both funds seek to preserve capital and maintain liquidity. Money market funds generally focus on stability of principal, while Putnam Short Duration Income Fund seeks a balance of stability and income, which may result in increased volatility. Money market funds seek to maintain a net asset value (NAV) of $1.00 per share; the NAV of this fund will fluctuate to reflect the market value of the portfolio. The fund's fees and expenses differ from money market funds; see the prospectus for details. Neither this fund nor money market funds are insured or guaranteed by the FDIC or any other government agency, and investors can lose money in each.

Yield more closely reflects current performance than total return.

The BofA Merrill Lynch U.S. Treasury Bill Index is an unmanaged index that tracks the performance of U.S. dollar denominated U.S. Treasury Bills publicly issued in the U.S. domestic market. Qualifying securities must have a remaining term of at least one month to final maturity and a minimum amount outstanding of $1 billion. You cannot invest directly in an index.

Consider these risks before investing: Putnam Short Duration Income Fund is not a money market fund. The effects of inflation may erode the value of your investment over time. Funds that invest in government securities are not guaranteed. Mortgage-backed securities are subject to risk that they may increase in value less when interest rates decline and decline in value more when interest rates rise. We may have to invest the proceeds from prepaid investments in other investments with less attractive terms and yields. 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. Risks associated with derivatives include increased investment exposure (which may be considered leverage) and, in the case of over-the-counter instruments, the potential inability to terminate or sell derivatives positions and the potential failure of the other party to the instrument to meet its obligations. Unlike bonds, funds that invest in bonds have fees and expenses. Bond prices may fall or fail to rise over time for several reasons, including general financial market conditions and factors related to a specific issuer or industry. You can lose money by investing in the fund. Credit qualities are shown as a percentage of net assets as of as of the date indicated above. 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. 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 cash and net other assets category. The fund itself has not been rated by an independent rating agency. The `Cash and net other assets` category may show a negative market value percentage as a result of the timing of trade date versus settlement date transactions.

You can lose money by investing in a fund. 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 fluctuate with market conditions. You may have more or less than the original amount invested when you redeem your shares.