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Global investing calls for active management

The global investment landscape has changed significantly since the 2008 financial crisis. The risks and opportunities are more diverse than they have been in years. Understanding — and taking advantage of — these evolving markets requires deep experience and intensive fundamental research.

Industrial output has diverged since the recession

As a result of the disparity of government policy responses, rates around the world have diverged dramatically. While its stimulative bond-buying ended in October 2014, the U.S. Federal Reserve's aggressive liquidity measures sent interest rates to historic lows. Yields in Greece spiked after it restructured its sovereign debt, and rates in emerging economies continue to fluctuate as those countries seek economic growth with mild inflation. We believe this diverse landscape represents new opportunities for investors with the capacity for intensive research and active risk management.

Sources: Datastream, Putnam. Index levels normalized at 100 in January 2007. Most recent data available as of 12/31/14.

Current 10-year government bond yields by country

In the years leading up to the global financial crisis, growth across a number of countries was relatively homogenous. That changed in 2008, as nations implemented markedly different policy responses to the recession. Many emerging economies that sidestepped the debt crisis altogether now struggle with growth, while some developed economies show signs of recovery.

Sources: Eikon as of 12/31/14. Reflects most recent data available. Credit ratings by Standard & Poor's.

Consider these risks before investing: International investing involves currency, economic, and political risks. Emerging-market securities carry illiquidity and volatility risks. Lower-rated bonds may offer higher yields in return for more risk. Funds that invest in government securities are not guaranteed. Mortgage-backed securities are subject to prepayment risk and the risk that they may increase in value less when interest rates decline and decline in value more when interest rates rise. The funds invest in fewer issuers or concentrate their investments by region or sector, and involve more risk than a more broadly invested fund. The funds' policy of concentrating on a limited group of industries and the funds' non-diversified status, which means the funds may invest in fewer issuers, can increase the funds' vulnerability to common economic forces and may result in greater losses and volatility. 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 funds.

Investors 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, contact your financial representative, call Putnam at 1-888-4-PUTNAM (1-888-478-8626), or click on the prospectus section to view or download a prospectus. Please read the prospectus carefully before investing.

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