Dedicated Mortgage

The Putnam Investments Dedicated Mortgage Composite (the "Composite") pursues a total return objective over a cash benchmark by investing in securitized debt, including agency MBS and CMOs (including IOs/POs and other mortgage prepayment derivatives), non-agency RMBS and CMBS (both cash and synthetics) and asset-backed securities. Composite tracking error range is generally expected to be 5 - 8% per annum. Accounts in the Composite may have specific target returns that may be different than the strategy's general return objective, which may fluctuate depending on market opportunities available. For comparative purposes, the Composite's benchmark is the ICE BofA U.S. Dollar 1-month Constant Maturity Index; however, individual accounts in the Composite may be benchmarked to an MBS index in addition to a cash benchmark or have no benchmark. The Composite comprises all fully discretionary non-ERISA accounts managed by Putnam Investments in line with this investment style and the strategy's risk/return characteristics. The use of futures, options, forwards, and other derivatives may be used by accounts in the composite for hedging or as an alternative to investing in the cash markets or as a method of managing portfolio characteristics such as position on the yield curve. Some derivatives may be "leveraged," which means that they provide a portfolio with investment exposure greater than the value of your portfolio's investment in the derivatives. As a result, these derivatives may magnify or otherwise increase investment losses to a portfolio. Strategies that use leverage to gain exposure to various markets may not be suitable for all investors. Any use of leverage exposes the strategy to risk of loss. In some cases, the risk may be substantial. The Composite creation date was August 17, 2009. The Composite inception date was July 31, 2009.

The ICE BofA U.S. Dollar 1-month Constant Maturity Index tracks the performance of a synthetic asset paying Libor to a stated maturity. The index is based on the assumed purchase at par of a synthetic instrument having exactly its stated maturity and with a coupon equal to that day’s fixing rate. That issue is assumed to be sold the following business day (priced at a yield equal to the current day fixing rate) and rolled into a new instrument. The MSCI World Index (ND) is an unmanaged index of equity securities from developed countries. The FTSE World Government Bond Index is an index of bonds issued by governments in the U.S., Europe and Asia.

Gross performance includes the deduction of transaction costs but does not include the deduction of management fees and other expenses that may be incurred in managing an investment account. A portfolio's return will be reduced by advisory and other fees. Net performance reflects the deduction of a model fee applied on a monthly basis, equal to the actual management fee incurred by a portfolio in the Composite or the highest management fee that would be charged to a prospect of the strategy, whichever is higher. The model fee may change over time. Actual advisory fees may vary among clients with the same investment strategy. The Composite includes all actual, fully discretionary accounts with substantially similar investment policies and objectives managed to the Composite's investment strategy. Benchmarks are generally taken from published sources and may have different calculation methodologies, pricing times, and/or foreign-exchange sources from the Composite. The effect of those differences is generally deemed to be immaterial. The securities holdings of the Composite strategy may differ materially from those of the index used for comparative purposes.