Active Income

Short-Term Municipal Income Fund (Class Y)  (PSMYX)

A national portfolio of short-term municipal bonds seeking tax-free income with lower interest-rate sensitivity

Short-Term Municipal Income Fund received an  Overall Morningstar Rating™  of  
See tax-equivalent yield

Highlights

Objective

The fund seeks as high a level of current income exempt from federal income tax as the managers believe is consistent with preservation of capital.

Strategy and process

  • Tax-advantaged income Pursues income free from federal income tax with a portfolio of municipal bonds selected from many states and market sectors.
  • Focus on total return Seeks to offer a competitive yield and the potential for price appreciation while striving to protect investors' capital through prudent security selection and active risk management.
  • High-quality, short-term portfolio The national portfolio features a range of high-quality, short-term bonds that seek to provide tax-free income with lower interest-rate sensitivity.

Fund price and assets

 Prior close 52-week high 52-week low Net assets and outstanding shares
Net asset value $9.79
0.10% | $0.01 		$10.17
12/28/21 		$9.62
10/31/22 		Download CSV
Net assets and outstanding shares
(Optional)

Fund facts as of 11/30/22

Total net assets
$81.31M
Turnover (fiscal year end)
54%
Dividend frequency (view rate)
Monthly
Number of holdings
152
Fiscal year-end
November
CUSIP / Fund code
74676A824 / 1880
Inception date
03/18/13
Category
Tax-free Income
Open to new investors
Ticker
PSMYX

Management team

Garrett L. Hamilton, CFA

Portfolio Manager

Paul M. Drury, CFA

Portfolio Manager

Literature

Expect a pause, not a pivot, as savings fuel spending
In the coming months, the Fed will not likely pivot, but pause and wait with a high level of rates for convincing signs of disinflation.
As inflation takes root, fixed income opportunities change
Fixed income markets experienced widespread declines in the U.S. and globally in the third quarter of 2022, as inflation remained high and became more broad-based.
High job openings signal wage-price spiral
Limited labor supply, higher wages, and a high staff turnover seems to have initiated a wage-price spiral.

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.

1.96%

Best 5-year annualized return

(for period ending 12/31/21)

0.73%

Worst 5-year annualized return

(for period ending 03/31/18)

1.32%

Average 5-year annualized return

  • Total return (%) as of 09/30/22

  • Annual performance as of 09/30/22

Annualized Total return (%) as of 09/30/22

Annualized performance 1 yr. 3 yrs. 5 yrs. Life (inception: 03/18/13 )
Before sales charge -3.69% -0.01% 0.76% 0.81%
After sales charge N/A N/A N/A N/A
Bloomberg 3-year Municipal Index -5.46%-0.44%0.48%--

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. The "before sales charge" performance does not reflect the current maximum sales charges, which we explain below. If performance did reflect the charges, it would be lower. The "after sales charge" performance (or returns at public offering price) varies by share class and fund. For class A and class M shares, the current maximum initial sales charges are 5.75% and 3.50% for equity funds and 4.00% and 3.25% for income funds, respectively (with these exceptions: 2.25% for class A of Putnam Floating Rate Income Fund, Short-Term Municipal Income, Short Duration Bond Fund, Strategic Intermediate Municipal Fund, and Fixed Income Absolute Return Fund). Class B share performance reflects the applicable contingent deferred sales charge (CDSC), which is 5% in the first year, declines to 1% in the sixth year, and is eliminated thereafter (except for Putnam Floating Rate Income Fund, Putnam Short Duration Bond Fund, and Putnam Fixed Income Absolute Return Fund; for these funds, the CDSC is 1% in the first year, declines to 0.5% in the second year, and is eliminated thereafter). Class C share performance reflects 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 by adjusting for the applicable sales charge (or CDSC) and, except for class Y shares, the higher operating expenses for such shares (note, for two funds — Putnam Tax-Free High Yield Fund and Putnam Strategic Intermediate Municipal Fund performance prior to inception is 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 has been adjusted for the applicable sales charge (or CDSC) and the higher operating expenses for such shares. The "after sales charge" performance (at public offering price) for class N shares reflects the current maximum initial sales charge of 1.50%. Class R, R3, R4, R5, and R6 shares, which are 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 R3 and R4 shares prior to their inception is derived from the historical performance of class Y shares by adjusting for the higher operating expenses for such shares. Performance for class R5 shares before their inception is derived from the historical performance of class Y shares, which has not been adjusted for the lower expenses; had it been adjusted, performance would be higher (with the exception of the RetirementReady Maturity, 2025, 2030, 2035, and 2040 Funds, for which performance is derived from the historical performance of class R6 shares and has been adjusted for the higher operating expenses for such shares; and the RetirementReady 2045, 2050, 2055, and 2060 Funds, for which performance is derived from the historical performance of class R6 shares and has not been adjusted for the lower expenses; had it been adjusted, performance would be higher). Performance for class R6 shares before their inception is derived from the historical performance of class Y shares, which has not been adjusted for the lower operating expenses; had it been adjusted, performance would be higher. For a portion of the period, some funds had expenses limitations or had been sold on a limited basis with limited assets and expenses. Had these limits not been in place, performance would be lower.

Performance snapshot

  Before sales charge After sales charge
1 mt. as of 11/30/22 1.63% -
YTD as of 12/06/22 or prior close -2.05% -

Yield

Distribution rate before sales charge
as of 12/06/22		 2.27%
Distribution rate after sales charge
as of 12/06/22		 2.27%
30-day SEC yield with subsidy
as of 11/30/22		 2.73%
30-day SEC yield without subsidy
as of 11/30/22		 2.48%

Risk-adjusted performance as of 10/31/22

Sharpe ratio (3 yrs.) -0.34
Information ratio (3 yrs.) 0.46

Volatility as of 10/31/22

Standard deviation (3 yrs.) 2.00%
Beta 0.71
R-squared 0.91

Fixed income statistics as of 10/31/22

Duration to worst 1.84 yrs.

Lipper rankings as of 10/31/22

Time period Rank/Funds in category Percentile ranking
1 yr. 55/133 42%
3 yrs. 38/122 31%
5 yrs. 10/102 10%
10 yrs. --  
Lipper category: Short Municipal Debt Funds

Morningstar Ratings™ as of 10/31/22

Time period Funds in category Morningstar Rating™
Overall 206
3 yrs. 206
5 yrs. 182
Morningstar category: Muni National Short

Distributions

Accrual days 30
Accrual start date 11/01/22
Accrual end date 11/30/22
Payable date 11/30/22
Non-taxable income $0.016581482
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

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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

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

Orange Hlth Facs-Ref 05.0000 08/01/2036 4.22%
Nyc-Adj-1-Subser I-2 01.2000 03/01/2040 2.68%
Ma Dev Var-Boston-U6c 01.2000 10/01/2042 2.68%
Houston Isd-A-2-Remk 03.5000 06/01/2039 2.65%
Palm Beach Hsg Fin Au 01.2500 02/15/2025 2.54%
Northwest Isd-A-Ref 05.0000 02/15/2024 2.34%
Philadelphia Auth-A 05.0000 12/01/2027 2.22%
New York City Trans 05.0000 11/01/2027 2.14%
Golden Tob-A-Cabs 00.0000 06/01/2025 2.12%
Wisconsin St-A-Ref 04.0000 09/01/2024 2.10%
Top 10 holdings, percent of portfolio 25.69%

Portfolio composition as of 10/31/22

Municipal bonds and notes 90.50%
Cash and net other assets 9.50%

Fixed income statistics as of 10/31/22

Average stated maturity 9.80 yrs.
Average effective maturity 2.26 yrs.
Option adjusted duration 1.90 yrs.
Duration to worst 1.84 yrs.
Average yield to maturity 3.90%
Average coupon 3.75%
AMT exposure 10.19%

Quality rating as of 10/31/22

AAA 13.87%
AA 18.87%
A 38.41%
BBB 13.48%
BB 1.48%
Not Rated 4.39%
Cash and net other assets 9.50%

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 greater for longer-term bonds, and credit risk is greater for below-investment-grade bonds. Interest the fund receives might be taxable. 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. 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 10/31/22

Local Debt 17.17%
Utilities 13.77%
Health care 10.33%
Cash and net other assets 9.50%
Prerefunded 8.60%
Transportation 8.28%
State Debt 6.97%
Housing 5.68%
Special Tax 5.10%
 
Other		 14.60%
Financials 3.60%
Education 3.54%
Other 3.48%
Tobacco 1.71%
Industrials 1.42%
Land 0.85%

Sectors will vary over time.

Expenses

Expense ratio

 Class A Class C Class R6 Class Y
Total expense ratio 0.91% 1.66% 0.65% 0.66%
What you pay† 0.59% 1.34% 0.33% 0.34%

† The fund's expense ratio is taken from the most recent prospectus and is subject to change. What you pay reflects Putnam Management's decision to contractually limit expenses through 03/30/23

Sales charge

Investment Breakpoint Class A Class C Class R6 Class Y
$0-$49,999 2.25% 0.00% -- --
$50,000-$99,999 2.25% 0.00% -- --
$100,000-$249,999 1.25% 0.00% -- --
$250,000-$499,999 0.00% -- -- --
$500,000-$999,999 0.00% -- -- --
$1M-$4M 0.00% -- -- --
$4M-$50M 0.00% -- -- --
$50M+ 0.00% -- -- --

CDSC

  Class A (sales for $250,000+) Class C Class R6 Class Y
0 to 9 mts. 1.00% 1.00% -- --
9 to 12 mts. 0.00% 1.00% -- --
2 yrs. -- 0.00% -- --
3 yrs. -- 0.00% -- --
4 yrs. -- 0.00% -- --
5 yrs. -- 0.00% -- --
6 yrs. -- 0.00% -- --
7+ yrs. -- 0.00% -- --

The Bloomberg 3-year Municipal Index is a subset of the Bloomberg Municipal Bond Index, covering those issues with remaining maturities of two to three years. 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 greater for longer-term bonds, and credit risk is greater for below-investment-grade bonds. Interest the fund receives might be taxable. 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. 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.