Short Duration Income Fund (PSDTX)
Seeking capital preservation and a higher rate of current income
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Strategy and process
- A broader opportunity set: The fund invests in a diversified portfolio composed of short duration, investment-grade money market and other fixed-income securities.
- Active risk management: In today's complex bond market, the fund's experienced managers actively manage risk with the goal of superior risk-adjusted performance over time.
- Higher income potential: Access to a wider range of income opportunities means the fund may offer higher income potential than other short-term investments.
Manager commentary | Q3 2016
Looking beyond money markets
Portfolio Manager Joanne Driscoll and Mike Salm, Co-Head of Fixed Income, talk about recent performance in the short-duration strategy.
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. To obtain the most recent month-end performance, visit putnam.com.
Performance assumes reinvestment of distributions and does not account for taxes. Class A, M, and R shares have no initial sales charge. Class A and M shares generally have no contingent deferred sales charge (CDSC). However, a CDSC may apply to redemptions of class A shares obtained by exchanging shares from another Putnam fund that were originally purchased without an initial sales charge. This CDSC applies if the shares are redeemed within nine months of the original purchase. A CDSC on class M shares may apply to redemptions of shares from certain rollover accounts. See the prospectus for details. Class B and C shares do not carry a CDSC. 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. Class R5/R6 shares, available to qualified employee-benefit plans only, are sold without an initial sales charge and have no CDSC. 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. For a portion of the period the fund had expenses limitations, without which returns would be lower.
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 the 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 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, and factors related to a specific issuer or industry. These factors may also lead to periods of high volatility and reduced liquidity in the bond markets. 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. You can lose money by investing in the fund.
Credit qualities are shown as a percentage of net assets as of the date indicated above. A bond rated BBB or higher (A-3/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 and portfolio credit quality will vary over time. Derivative instruments 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.