Putnam AMT-Free Municipal Fund Prospecting letter

(Note to investment representative: Retype this letter on your firm’s letterhead, which must include your FINRA member name, address, and phone.)

[Insert Rep Name]
[Insert Firm Name]
[Insert Address]
[Insert Phone]
[Insert Date]

[Mr. and Mrs. Steven Jones]
[125 Main Street]
[Anytown, USA  00111]

Dear [Investor]:

I am writing to draw your attention to an issue affecting a growing number of taxpayers: the alternative minimum tax (AMT). Originally established in 1969 to ensure that the very wealthy did not escape paying federal income tax, the AMT has affected an increasing number of taxpayers over time as incomes have risen. In 2010 the federal government passed a temporary measure to prevent the AMT from affecting additional taxpayers. However, there is no long-term protection from the possibility of a broader AMT being levied, which could add to the tax burden of millions of families. The AMT is also an issue for tax-exempt municipal bond funds because some municipal bonds are subject to the AMT. Generally, income issued by private entities in a municipal bond portfolio — a common source of income for many municipal bond funds — is taxable under the AMT. 

Putnam AMT-Free Municipal Fund has a special mandate to avoid AMT exposure. The fund seeks a high level of income exempt from income taxes and the AMT, and invests in a nationally diversified portfolio of high-quality investment-grade bonds. For your benefit, I have enclosed a summary sheet that contains more information on the fund.  

Let’s meet soon to discuss how Putnam AMT-Free Municipal Fund can help you pursue your financial goals.

Sincerely,

Your name and title

Not FDIC Insured	May Lose Value	No Bank Guarantee	

Mutual funds that invest in bonds are subject to certain risks including interest-rate risk, credit risk, and inflation risk. As interest rates rise, the prices of bonds fall. Long-term bonds have more exposure to interest-rate risk than short-term bonds. Lower-rated bonds may offer higher yields in return for more risk. Unlike bonds, bond funds have ongoing fees and expenses. These risks apply to any fund with a significant portion of their assets in bonds.

Capital gains, if any, are taxable for federal and, in most cases, state purposes. For some investors, investment income may be subject to the federal alternative minimum tax. Income from federally exempt funds may be subject to state and local taxes. 

You should carefully consider the investment objectives, risks, charges, and expenses of a fund before investing. For a prospectus, or a summary prospectus if available, containing this and other information for any Putnam fund or product, call me or call Putnam Investments at 1-800-255-1581. Read the prospectus carefully before investing.

Putnam Retail Management                                                                              EO047 274431  4/12