N-Q 1 a_fundstrust.htm PUTNAM FUNDS TRUST a_fundstrust.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM N-Q
 
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT 
INVESTMENT COMPANY
 
Investment Company Act file number: (811- 07513)   
 
Exact name of registrant as specified in charter:  Putnam Funds Trust 
 
Address of principal executive offices: One Post Office Square, Boston, Massachusetts 02109 
 
Name and address of agent for service:    Beth S. Mazor, Vice President 
  One Post Office Square 
  Boston, Massachusetts 02109 
 
Copy to:    John W. Gerstmayr, Esq. 
  Ropes & Gray LLP 
  One International Place 
  Boston, Massachusetts 02110 
 
Registrant’s telephone number, including area code:  (617) 292-1000 
 
Date of fiscal year end: October 31, 2009     
 
Date of reporting period: July 31, 2009     

Item 1. Schedule of Investments:


Putnam Absolute Return 100 and 300 Funds
The funds' portfolios
July 31, 2009 (Unaudited)

MORTGAGE-BACKED SECURITIES(a)  100 Fund 12.3% 300 Fund 24.1%
 
  Principal amount  Value  Principal amount  Value 
Banc of America Commercial Mortgage,         
Inc.         
FRB Ser. 07-3, Class A2, 5.658s, 2049  $280,000  $280,097  $1,234,000  $1,234,429 
Ser. 07-5, Class A3, 5.62s, 2051  184,000  168,316  596,000  545,198 
Ser. 06-5, Class A2, 5.317s, 2047  40,000  38,474  211,000  202,953 
Ser. 07-1, Class XW, IO, 0.288s, 2049  1,619,772  17,616  7,689,977  83,635 
Banc of America Commercial Mortgage,         
Inc. 144A         
Ser. 02-PB2, Class XC, IO, 0.771s, 2035  872,883  13,784  4,143,522  65,430 
Ser. 04-4, Class XC, IO, 0.367s, 2042  2,599,320  29,909  12,340,380  141,992 
Bear Stearns Alternate Trust II FRB         
Ser. 07-1, Class 1A1, 6.074s, 2047  310,499  174,352  946,780  531,639 
Bear Stearns Commercial Mortgage         
Securities, Inc. Ser. 07-PW18,         
Class A2, 5.613s, 2050  173,000  171,939  656,000  651,976 
Citigroup FRB Ser. 07-AR5, Class 1A2A,         
5.604s, 2037  99,645  58,958  506,647  299,773 
Citigroup Mortgage Loan Trust, Inc. FRB         
Ser. 07-6, Class 1A3A, 5.779s, 2046  120,071  62,437  425,159  221,082 
Citigroup/Deutsche Bank Commercial         
Mortgage Trust Ser. 07-CD4, Class A2B,         
5.205s, 2049  76,000  75,086  454,000  448,539 
Countrywide Alternative Loan Trust         
Ser. 06-2CB, Class A11, 6s, 2036  48,512  29,009  192,109  114,875 
Ser. 05-80CB, Class 2A1, 6s, 2036  45,049  32,238  297,689  213,033 
FRB Ser. 06-23CBC, Class 2A5, 0.685s,         
2036  116,085  57,317  353,935  174,755 
FRB Ser. 07-HY7C, Class A1, 0.425s, 2037  98,004  45,082  318,512  146,515 
Countrywide Home Loans 144A Ser. 06-R1,         
Class AS, IO, 5.565s, 2036  107,535  9,649  426,915  38,308 
Credit Suisse Mortgage Capital         
Certificates         
FRB Ser. 08-C1, Class A2, 6.217s, 2041  72,000  71,306  411,000  407,038 
FRB Ser. 07-C4, Class A2, 5.81s, 2039  43,000  43,255  247,000  248,464 
Ser. 07-C2, Class A2, 5.448s, 2049  92,000  89,489  285,000  277,221 
CS First Boston Mortgage Securities         
Corp. 144A Ser. 04-C4, Class AX, IO,         
0.396s, 2039  976,709  16,560  4,636,171  78,605 
CWCapital Cobalt Ser. 07-C2, Class A2,         
5.334s, 2047  62,000  60,474  214,000  208,733 
Deutsche Alternative Securities, Inc.         
FRB Ser. 06-AR6, Class A6, 0.475s, 2037  111,553  54,661  260,522  127,656 
Fannie Mae         
IFB Ser. 04-W2, Class 1A3S, IO, 6.865s,         
2044  49,351  3,424  141,363  9,807 
IFB Ser. 05-90, Class GS, IO, 6.465s,         
2035  67,098  8,449  393,355  49,531 
IFB Ser. 05-18, Class SK, IO, 6.465s,         
2035  69,041  6,713  406,526  39,527 
IFB Ser. 05-57, Class CI, IO, 6.415s,         
2035  276,397  29,239  552,794  58,479 
IFB Ser. 05-104, Class SI, IO, 6.415s,         
2033  422,550  46,840  2,044,663  226,654 
IFB Ser. 05-73, Class SD, IO, 6.395s,         
2035  --  --  149,293  20,797 
IFB Ser. 05-51, Class WS, IO, 6.345s,         
2035  102,972  13,076  423,133  53,734 
IFB Ser. 06-36, Class PS, IO, 6.315s,         
2036  142,860  16,589  587,026  68,165 
IFB Ser. 09-43, Class SB, IO, 6.045s,         
2039  --  --  168,425  20,595 
IFB Ser. 08-11, Class SC, IO, 5.995s,         
2038  88,527  9,556  441,749  47,687 
Ser. 06-W2, Class 1AS, IO, 5.661s, 2036  395,383  36,326  790,766  72,652 
Ser. 07-W1, Class 1AS, IO, 5.406s, 2046  780,092  70,208  1,559,443  140,350 
Ser. 03-W12, Class 1IO2, IO, 1.983s,         
2043  955,628  50,170  2,831,428  148,650 
Ser. 98-W2, Class X, IO, 1.395s, 2028  502,645  16,650  1,437,875  47,630 
FRB Ser. 05-115, Class DF, 1.181s, 2033  21,285  20,662  71,306  69,217 
Ser. 98-W5, Class X, IO, 1.154s, 2028  217,875  7,217  623,250  20,645 
FRB Ser. 07-80, Class F, 0.985s, 2037  --  --  95,195  94,282 
FRB Ser. 06-3, Class FY, 0.785s, 2036  105,352  103,229  452,038  442,928 
Ser. 03-W1, Class 2A, IO, 0.243s, 2042  747,146  8,405  2,137,130  24,043 
Federal Home Loan Mortgage Corp.         
Structured Pass-Through Securities         
Ser. T-59, Class 1AX, IO, 0.27s, 2043  641,903  4,413  1,835,885  12,622 
Ser. T-48, Class A2, IO, 0.212s, 2033  868,754  6,516  2,485,165  18,639 
FRB Ser. T-54, Class 2A, IO, 0.173s,         
2043  359,837  1,937  1,029,413  5,541 
Ser. T-8, Class A9, IO, 0.504s, 2028  311,466  3,893  890,942  11,137 
Freddie Mac         
IFB Ser. 3151, Class SI, IO, 6.862s,         
2036  183,509  25,670  892,313  124,819 
IFB Ser. 2779, Class YS, IO, 6.862s,         
2033  193,286  21,070  794,440  86,602 
IFB Ser. 3123, Class LI, IO, 6.412s,         
2036  924,479  121,698  1,800,059  236,960 
IFB Ser. 3107, Class DC, IO, 6.412s,         
2035  1,397,615  172,958  4,033,314  499,131 
IFB Ser. 3387, Class PS, IO, 6.292s,         
2037  228,566  30,006  457,132  60,012 
IFB Ser. 3346, Class SC, IO, 6.262s,         
2033  1,411,769  169,215  6,638,695  795,714 
IFB Ser. 3346, Class SB, IO, 6.262s,         
2033  1,068,056  127,814  4,863,716  582,041 
FRB Ser. 2718, Class FN, 1.788s, 2033  16,735  16,302  76,848  74,860 
FRB Ser. 2634, Class LF, 1.581s, 2033  24,275  24,024  90,626  89,690 
FRB Ser. 3190, Class FL, 1.088s, 2032  --  --  109,971  105,924 
FRB Ser. 3059, Class FD, 1.009s, 2035  77,971  76,662  324,282  318,837 


FRB Ser. 3035, Class NF, 1.009s, 2035  154,389  150,154  641,790  624,186 
FRB Ser. 3350, Class FK, 0.888s, 2037  63,421  62,491  93,229  91,861 
FRB Ser. 3192, Class FE, 0.888s, 2036  81,720  81,364  339,466  337,985 
FRB Ser. 3237, Class FT, 0.809s, 2036  67,408  67,387  280,436  280,349 
Ser. 3290, Class DO, PO, zero %, 2036  --  --  107,460  104,888 
Ser. 3337, Class OA, PO, zero %, 2036  13,493  13,012  14,033  13,533 
Ser. 3171, Class KO, PO, zero %, 2036  56,809  56,632  163,611  163,099 
Ser. 3092, Class OL, PO, zero %, 2035  --  --  70,728  61,518 
Ser. 3073, Class TO, PO, zero %, 2034  26,279  25,489  26,279  25,489 
GE Capital Commercial Mortgage Corp.         
144A Ser. 05-C2, Class XC, IO, 0.127s,         
2043  7,567,985  35,942  35,929,091  170,634 
Government National Mortgage Association         
IFB Ser. 07-35, Class KS, 26.191s, 2037  210,186  257,098  865,370  1,058,512 
IFB Ser. 05-68, Class SN, IO, 6.913s,         
2034  --  --  288,322  29,830 
IFB Ser. 04-47, Class SY, IO, 6.773s,         
2034  --  --  151,554  16,039 
IFB Ser. 04-96, Class KS, IO, 6.711s,         
2034  --  --  130,838  16,309 
IFB Ser. 06-16, Class GS, IO, 6.701s,         
2036  55,942  6,231  312,158  34,771 
IFB Ser. 04-70, Class SP, IO, 6.611s,         
2034  49,984  5,980  286,113  34,233 
IFB Ser. 07-8, Class SH, IO, 6.511s,         
2037  258,948  30,090  1,322,578  153,684 
IFB Ser. 05-18, Class S, IO, 6.511s,         
2035  76,241  8,791  448,218  51,684 
IFB Ser. 05-77, Class CS, IO, 6.511s,         
2032  --  --  139,063  12,163 
IFB Ser. 07-35, Class PY, IO, 6.463s,         
2037  651,828  76,657  3,164,708  372,179 
IFB Ser. 04-104, Class IS, IO, 6.461s,         
2034  70,289  7,036  413,057  41,347 
IFB Ser. 06-25, Class SI, IO, 6.411s,         
2036  144,726  16,832  596,064  69,322 
IFB Ser. 07-37, Class SU, IO, 6.403s,         
2037  91,806  10,989  539,264  64,550 
IFB Ser. 07-37, Class YS, IO, 6.383s,         
2037  --  --  378,950  40,991 
IFB Ser. 07-16, Class KU, IO, 6.361s,         
2037  277,729  28,987  1,595,610  166,534 
IFB Ser. 06-29, Class SN, IO, 6.361s,         
2036  56,574  5,658  298,143  29,817 
IFB Ser. 06-36, Class SN, IO, 6.321s,         
2036  282,603  26,336  1,662,969  154,972 
IFB Ser. 08-6, Class TI, IO, 6.313s,         
2032  196,105  15,311  255,721  19,965 
IFB Ser. 03-110, Class SP, IO, 6.313s,         
2030  160,801  13,253  945,770  77,950 
IFB Ser. 06-38, Class SW, IO, 6.211s,         
2036  122,045  10,523  802,827  69,220 
IFB Ser. 08-40, Class SC, IO, 6.063s,         
2038  2,589,094  261,134  10,878,709  1,097,220 
IFB Ser. 05-92, Class SP, IO, 6.011s,         
2035  268,004  23,429  1,763,976  154,207 
IFB Ser. 05-66, Class S, IO, 5.963s,         
2035  173,507  20,975  1,142,552  138,123 
IFB Ser. 07-17, Class SI, IO, 5.901s,         
2037  188,017  20,189  244,422  26,246 
IFB Ser. 06-16, Class SJ, IO, 5.811s,         
2036  125,870  11,201  742,914  66,112 
IFB Ser. 05-27, Class SP, IO, 5.811s,         
2035  111,202  9,651  653,364  56,705 
IFB Ser. 04-87, Class SD, IO, 5.811s,         
2034  116,306  10,756  667,247  61,707 
IFB Ser. 04-83, Class CS, IO, 5.791s,         
2034  166,210  15,017  976,630  88,239 
IFB Ser. 07-28, Class SB, IO, 5.761s,         
2037  --  --  146,677  13,855 
IFB Ser. 04-89, Class HS, IO, 5.711s,         
2034  343,689  31,200  2,064,807  187,443 
GS Mortgage Securities Corp. II Ser.         
06-GG6, Class A2, 5.506s, 2038  255,000  255,792  1,078,000  1,081,348 
GS Mortgage Securities Corp. II 144A         
Ser. 03-C1, Class X1, IO, 0.29s, 2040  1,738,170  30,956  8,250,339  146,933 
GSMPS Mortgage Loan Trust 144A         
Ser. 05-RP1, Class 1AS, IO, 5.864s, 2035  412,142  34,774  2,214,142  186,818 
Ser. 06-RP2, Class 1AS1, IO, 5.61s, 2036  --  --  710,500  57,728 
Ser. 98-2, IO, 1.055s, 2027  87,981  2,529  251,757  7,238 
Ser. 98-4, IO, 0.779s, 2026  109,083  2,863  312,105  8,193 
Ser. 98-3, IO, 0.688s, 2027  109,446  2,394  312,978  6,846 
Ser. 99-2, IO, 0.603s, 2027  144,469  3,251  413,095  9,295 
IndyMac Indx Mortgage Loan Trust FRB         
Ser. 06-AR5, Class 1A2, 5.734s, 2036  307,603  51,524  735,143  123,137 
JPMorgan Chase Commercial Mortgage         
Securities Corp.         
Ser. 07-LD12, Class A2, 5.827s, 2051  152,000  147,463  506,000  490,898 
FRB Ser. 07-LD11, Class A2, 5.783s, 2049  186,000  183,937  943,000  932,540 
FRB Ser. 07-CB19, Class A2, 5.748s, 2049  79,000  79,341  376,000  377,625 
Ser. 05-LDP4, Class A2, 4.79s, 2042  57,841  57,913  177,971  178,194 
Ser. 06-CB16, Class X1, IO, 0.102s, 2045  3,758,759  31,244  17,841,986  148,306 
LB Commercial Conduit Mortgage Trust         
Ser. 07-C3, Class A2, 5.84s, 2044  91,000  91,587  381,000  383,457 
LB-UBS Commercial Mortgage Trust         
Ser. 07-C2, Class A2, 5.303s, 2040  89,000  87,910  482,000  476,097 
Ser. 05-C7, Class A2, 5.103s, 2030  71,000  70,768  362,000  360,817 
Ser. 07-C2, Class XW, IO, 0.547s, 2040  1,115,431  23,289  5,295,801  110,572 
LB-UBS Commercial Mortgage Trust 144A         
Ser. 03-C5, Class XCL, IO, 0.235s, 2037  1,499,259  24,761  7,117,339  117,545 
Merrill Lynch Mortgage Trust Ser.         
06-C1, Class A2, 5.611s, 2039  99,000  98,690  423,000  421,674 
Merrill Lynch Mortgage Trust 144A Ser.         
05-LC1, Class X, IO, 0.1s, 2044  3,433,448  16,515  16,300,331  78,403 
Merrill Lynch/Countrywide Commercial         
Mortgage Trust Ser. 06-4, Class A2,         
5.112s, 2049  35,000  34,741  185,000  183,631 
Morgan Stanley Capital I         


FRB Ser. 07-IQ15, Class A2, 5.841s, 2049  29,000  27,839  165,000  158,392 
Ser. 07-IQ13, Class A3, 5.331s, 2044  128,000  113,989  498,000  443,487 
Ser. 06-T21, Class A2, 5.09s, 2052  30,000  29,997  72,000  71,992 
Residential Accredit Loans, Inc. Ser.         
06-QS13, Class 1A5, 6s, 2036  71,296  47,011  303,156  199,894 
Structured Adjustable Rate Mortgage         
Loan Trust         
FRB Ser. 07-10, Class 1A1, 6s, 2037  374,517  214,411  1,263,514  723,362 
FRB Ser. 06-9, Class 1A1, 5.025s, 2036  172,492  90,564  930,567  488,578 
FRB Ser. 06-12, Class 1A1, 0.445s, 2037  144,801  75,297  569,508  296,144 
Wachovia Bank Commercial Mortgage Trust         
FRB Ser. 07-C33, Class A3, 5.902s, 2051  165,000  144,893  650,000  570,790 
Ser. 06-C27, Class A2, 5.624s, 2045  97,000  97,208  406,000  406,871 
Ser. 07-C31, Class A2, 5.421s, 2047  82,000  79,941  256,000  249,573 
Wachovia Bank Commercial Mortgage Trust         
144A Ser. 03-C3, Class IOI, IO, 0.483s,         
2035  1,484,460  33,321  7,048,694  158,220 
Wells Fargo Alternative Loan Trust FRB         
Ser. 07-PA6, Class A1, 6.584s, 2037  131,057  74,754  644,638  367,696 
Total mortgage-backed securities (cost $6,223,597 and $25,738,953)    $6,626,201    $27,439,516 
 
 
U.S. GOVERNMENT AGENCY OBLIGATIONS(a)  100 Fund 8.0% 300 Fund 7.4%
 
  Principal amount  Value  Principal amount  Value 
Bank of America NA FDIC guaranteed         
notes FRN 0.966s, 2010  400,000  $399,900  $600,000  $599,850 
Bank of America NA FDIC guaranteed         
notes FRN Ser. BKNT, 0.659s, 2010  300,000  300,740  700,000  701,726 
General Electric Capital Corp. FDIC         
guaranteed notes 1 5/8s, 2011  625,000  630,688  1,025,000  1,034,328 
Goldman Sachs Group, Inc (The) FDIC         
guaranteed notes 1 5/8s, 2011  925,000  931,749  2,025,000  2,039,772 
JPMorgan Chase & Co. FDIC guaranteed         
notes 2 5/8s, 2010  625,000  639,362  1,025,000  1,048,553 
Morgan Stanley FDIC guaranteed notes         
2s, 2011  700,000  709,682  1,500,000  1,520,748 
Wells Fargo & Co. FDIC guaranteed notes         
3s, 2011  308,000  317,724  660,000  680,838 
Wells Fargo & Co. FDIC guaranteed notes         
2 1/8s, 2012  392,000  394,661  840,000  845,702 
Total U.S. government agency obligations (cost $4,305,926 and $8,437,006)    $4,324,506    $8,471,517 
 
 
CORPORATE BONDS AND NOTES(a)  100 Fund 5.0% 300 Fund 9.3%
 
  Principal amount  Value  Principal amount  Value 
 
Automotive    0.4%    0.9% 
BMW US Capital, LLC company guaranty         
sr. unsec. unsub. notes Ser. EMTN,         
4 1/4s, 2011  $120,000  $120,320  $510,000  $511,358 
DaimlerChrysler NA Holding Corp.         
company guaranty sr. unsec. unsub.         
notes 5 7/8s, 2011 (Germany)  --  --  315,000  324,808 
DaimlerChrysler NA Holding Corp.         
company guaranty unsec. unsub. notes         
Ser. MTN, 5 3/4s, 2011 (Germany)  115,000  118,574  200,000  206,216 
    238,894    1,042,382 
 
Banking    0.8%    1.1% 
Citigroup, Inc. sr. unsec. unsub. notes         
FRN 1.07s, 2010  85,000  82,763  400,000  389,472 
Merrill Lynch & Co., Inc. sr. unsec.         
notes Ser. MTNC, 4 1/4s, 2010  130,000  131,785  455,000  461,248 
Shinhan Bank 144A sr. unsec. bond 6s,         
2012 (South Korea)  200,000  203,233  425,000  431,871 
    417,781    1,282,591 
 
Computers    0.1%    0.1% 
Xerox Corp. sr. unsec. notes FRN         
1.363s, 2009  25,000  24,960  70,000  69,887 
 
Electric utilities    0.6%    1.2% 
Exelon Corp. sr. unsec. notes 4.45s,         
2010  120,000  121,897  525,000  533,298 
FirstEnergy Corp. notes Ser. B, 6.45s,         
2011  110,000  117,339  515,000  549,360 
Texas-New Mexico Power Co. 144A 1st         
mtge. sec. 9 1/2s, 2019  50,000  57,627  275,000  316,949 
    296,863    1,399,607 
 
Financial    0.5%    0.9% 
Berkshire Hathaway Finance Corp. 144A         
company guaranty sr. notes 4s, 2012  85,000  87,952  415,000  429,412 
MetLife Global Funding I 144A sr.         
unsub. notes 5 1/8s, 2014  100,000  101,130  200,000  202,260 
Prudential Financial, Inc. sr. notes         
6.2s, 2015  85,000  87,352  390,000  400,791 
    276,434    1,032,463 
 
Investment banking/Brokerage    0.7%    1.1% 
Goldman Sachs Group, Inc. (The) sr.         
notes 3 5/8s, 2012  194,000  197,964  791,000  807,161 
Morgan Stanley sr. unsec. notes FRN         
Ser. MTN, 0.378s, 2010  200,000  199,185  480,000  478,045 
    397,149    1,285,206 
 
Media    0.3%    0.7% 
Time Warner, Inc. company guaranty sr.         
unsec. notes FRN 1.15s, 2009  180,000  179,513  770,000  767,919 


Oil and gas    0.5%    0.9% 
Ras Laffan Liquefied Natural Gas Co.,         
Ltd. 144A company guaranty sr. notes         
4 1/2s, 2012 (Qatar)  250,000  253,523  1,000,000  1,014,093 
 
Publishing    0.7%    1.5% 
R. R. Donnelley & Sons Co. sr. unsec.         
notes 5 5/8s, 2012  400,000  390,432  1,750,000  1,708,138 
 
Retail    0.1%    0.2% 
Macy's Retail Holdings, Inc. company         
guaranty sr. unsec. notes 6 5/8s, 2011  60,000  60,919  170,000  172,603 
 
Telecommunications    0.3%    0.7% 
British Telecommunications PLC notes         
8 3/8s, 2010 (United Kingdom)  59,000  63,427  267,000  287,036 
Deutsche Telekom International Finance         
BV company guaranty sr. unsec. unsub.         
bonds 8 1/2s, 2010 (Germany)  53,000  55,828  243,000  255,965 
Verizon Wireless, Inc. 144A sr. unsec.         
notes FRN 3.316s, 2011  60,000  61,103  285,000  290,240 
    180,358    833,241 
Total corporate bonds and notes (cost $2,607,020 and $10,161,006)    $2,716,826    $10,608,130 
 
 
ASSET-BACKED SECURITIES(a)  100 Fund 1.3%  300 Fund 2.6% 
 
  Principal amount  Value  Principal amount  Value 
GSAA Home Equity Trust FRB Ser. 07-5,         
Class 2A1A, 0.405s, 2047  $151,822  $87,428  $640,844  $369,036 
GSAMP Trust FRB Ser. 07-HE2, Class A2A,         
0.405s, 2047  62,496  45,934  191,899  141,046 
HSI Asset Securitization Corp. Trust         
FRB Ser. 06-HE1, Class 2A1, 0.335s, 2036  79,096  52,401  336,313  222,807 
Securitized Asset Backed Receivables,         
LLC         
FRB Ser. 07-BR5, Class A2A, 0.415s, 2037  36,272  23,758  123,134  80,653 
FRB Ser. 07-BR4, Class A2A, 0 3/8s, 2037  257,538  156,781  1,015,174  618,005 
WAMU Asset-Backed Certificates         
FRB Ser. 07-HE2, Class 2A1, 0.395s, 2037  187,782  112,688  887,835  532,790 
FRB Ser. 07-HE1, Class 2A1, 0.335s, 2037  343,459  242,139  1,350,149  951,855 
Total asset-backed securities (cost $718,314 and $2,808,785)    $721,129    $2,916,192 
 
 
SHORT-TERM INVESTMENTS(a)  100 Fund 73.2% 300 Fund 55.0%
 
  Principal amount/shares  Value  Principal amount/shares  Value 
Fannie Mae for an effective yield         
of 0.908%, January 15, 2010  $2,100,000  $2,091,233  $2,900,000  $2,887,893 
Fannie Mae for an effective yield         
of 0.898%, March 3, 2010  1,500,000  1,492,064  4,000,000  3,978,836 
Fannie Mae for an effective yield         
of 0.877%, February 1, 2010  3,000,000  2,986,659  5,500,000  5,475,542 
Fannie Mae for an effective yield         
of 0.563%, April 12, 2010  1,400,000  1,394,469  3,200,000  3,187,357 
Fannie Mae for an effective yield         
of 0.522%, December 29, 2009  1,000,000  997,833  2,500,000  2,494,583 
Fannie Mae for an effective yield         
of 0.3%, December 28, 2009  1,400,000  1,398,684  3,250,000  3,246,945 
Federal Home Loan Bank Discount Notes         
for an effective yield of 0.502%,         
July 2, 2010 (SEGSF)  --  --  5,433,000  5,407,720 
Federal Home Loan Bank for an effective         
yield of 0.8%, June 18, 2010  2,700,000  2,703,672  3,400,000  3,404,624 
Federal Home Loan Bank for an effective         
yield of 0.563%, June 2, 2010 (SEGSF)  1,500,000  1,492,884  --  -- 
Federal Home Loan Bank for an effective         
yield of 0.45%, November 24, 2009  500,000  500,215  2,000,000  2,000,860 
Freddie Mac for an effective yield         
of 0.958%, February 5, 2010  500,000  497,520  3,000,000  2,985,117 
Freddie Mac for an effective yield         
of 0.908%, January 8, 2010  2,100,000  2,091,600  2,900,000  2,888,400 
Freddie Mac for an effective yield         
of 0.825%, December 7, 2009  1,000,000  997,084  1,500,000  1,495,626 
Freddie Mac for an effective yield         
of 0.603%, December 24, 2009  --  --  1,000,000  997,583 
Freddie Mac for an effective yield         
of 0.512%, May 5, 2010  9,500,000  9,462,722  --  -- 
Freddie Mac for an effective yield         
of 0.482%, May 10, 2010 (SEGSF)  3,000,000  2,988,720  6,000,000  5,977,440 
Freddie Mac for an effective yield         
of 0.482%, February 8, 2010  2,000,000  1,994,906  3,000,000  2,992,359 
U.S. Treasury Bills for an effective         
yield of 0.701%, December 17, 2009 (SEG)  6,000  5,984  6,000  5,984 
U.S. Treasury Bills for an effective         
yield of 0.401%, February 11, 2010 (SEG)  122,000  121,732  284,000  283,377 
U.S. Treasury Cash Managment Bills for         
an effective yield of 0.437%,         
April 1, 2010 (SEG)  18,000  17,943  90,000  89,715 
Putnam Money Market Liquidity Fund (e)  6,160,827  6,160,827  12,794,990  12,794,990 
Total short-term investments (cost $39,391,852 and $62,578,018)    $39,396,751    $62,594,951 
 
 
TOTAL INVESTMENTS         
Total investments (cost $53,246,709 and $109,723,768) (b)    $53,785,413    $112,030,306 


Putnam Absolute Return 100 Fund

FORWARD CURRENCY CONTRACTS TO BUY at 7/31/09 (aggregate face value $2,975) (Unaudited)

    Aggregate  Delivery  Unrealized 
  Value  face value  date  appreciation 
Euro  $2,993  $2,975  8/19/09  $18 
Total        $18 


Putnam Absolute Return 100 Fund

FORWARD CURRENCY CONTRACTS TO SELL at 7/31/09 (aggregate face value $16,320) (Unaudited)

    Aggregate  Delivery  Unrealized 
  Value  face value  date  (depreciation) 
British Pound  $167  $165  8/19/09  $(2) 
Euro  16,246  16,155  8/19/09  (91) 
Total        $(93) 


Putnam Absolute Return 100 Fund

FUTURES CONTRACTS OUTSTANDING at 7/31/09 (Unaudited)

        Unrealized 
  Number of    Expiration  appreciation/ 
  contracts  Value  date  (depreciation) 
Euro-Bobl 5 yr (Long)  5  $827,627  Sep-09  $(46) 
Euro-Bund 10 yr (Short)  5  869,596  Sep-09  (2,996) 
Euro-Euribor Interest Rate 90 day (Long)  6  2,100,134  Sep-10  9,545 
Euro-Euribor Interest Rate 90 day (Short)  6  2,120,228  Sep-09  (17,205) 
Euro-Schatz 2 yr (Short)  14  2,157,943  Sep-09  947 
Japanese Government Bond 10 yr Mini (Short)  4  582,655  Sep-09  1,755 
U.S. Treasury Bond 20 yr (Long)  19  2,261,000  Sep-09  29,721 
U.S. Treasury Note 2 yr (Long)  26  5,631,031  Sep-09  7,647 
U.S. Treasury Note 5 yr (Short)  10  1,153,828  Sep-09  (20,027) 
U.S. Treasury Note 10 yr (Long)  21  2,462,906  Sep-09  12,051 
Total        $21,392 


Putnam Absolute Return 100 Fund

WRITTEN OPTIONS OUTSTANDING at 7/31/09 (premiums received $1,361,076) (Unaudited)

  Contract  Expiration date/   
  amount  strike price  Value 
Option on an interest rate swap with Citibank, N.A. for the obligation to pay a       
fixed rate of 4.52% versus the three month USD-LIBOR-BBA maturing July 26, 2021.  $7,211,000  Jul-11/4.52  $462,008 
Option on an interest rate swap with Citibank, N.A. for the obligation to receive       
a fixed rate of 4.52% versus the three month USD-LIBOR-BBA maturing July 26, 2021.  7,211,000  Jul-11/4.52  450,760 
Option on an interest rate swap with Citibank, N.A. for the obligation to pay a       
fixed rate of 4.5475% versus the three month USD-LIBOR-BBA maturing July 26, 2021.  3,605,500  Jul-11/4.548  235,295 
Option on an interest rate swap with Citibank, N.A. for the obligation to receive       
a fixed rate of 4.5475% versus the three month USD-LIBOR-BBA maturing       
July 26, 2021.  3,605,500  Jul-11/4.548  221,919 
Total      $1,369,982 


Putnam Absolute Return 100 Fund

INTEREST RATE SWAP CONTRACTS OUTSTANDING at 7/31/09 (Unaudited)

      Upfront    Payments  Payments  Unrealized 
Swap counterparty /      premium  Termination  made by  received by  appreciation/ 
Notional amount      received (paid)  date  fund per annum  fund per annum  (depreciation) 
Citibank, N.A.               
EUR  63,000  (E)  $--  6/12/24  6 month EUR-EURIBOR-REUTERS  5.1275%  $306 
EUR  72,000  (E)  --  6/20/24  6 month EUR-EURIBOR-REUTERS  5.135%  368 
GBP  700,000  (E)  --  7/18/14  6 month GBP-LIBOR-BBA  4.555%  (4,625) 
  $1,671,000    --  7/28/19  3.895%  3 month USD-LIBOR-BBA  (22,958) 
  71,000    --  4/15/19  3.065%  3 month USD-LIBOR-BBA  3,190 
  1,093,000    --  5/11/39  3.8425%  3 month USD-LIBOR-BBA  54,977 
Deutsche Bank AG               
  12,141,000    --  5/12/11  1.43%  3 month USD-LIBOR-BBA  (36,771) 
  3,164,000    --  7/27/19  3.755%  3 month USD-LIBOR-BBA  (6,003) 
  585,000    --  7/28/19  3.895%  3 month USD-LIBOR-BBA  (8,037) 
  221,000    --  3/6/39  3.47%  3 month USD-LIBOR-BBA  23,753 
  829,000    --  3/20/11  3 month USD-LIBOR-BBA  1.43%  6,588 
  600,000    --  3/23/11  3 month USD-LIBOR-BBA  1.45%  4,910 
JPMorgan Chase Bank, N.A.               
EUR  150,000  (E)  --  6/17/24  6 month EUR-EURIBOR-REUTERS  5.195%  1,163 
AUD  130,000    --  6/26/19  6 month AUD-BBR-BBSW  6.05%  33 
CAD  130,000    --  6/25/19  3.626%  6 month CAD-BA-CDOR  (1,402) 
EUR  550,000  (E)  --  7/27/24  6 month EUR-EURIBOR-REUTERS  5.1355%  2,634 
JPY  8,800,000  (E)  --  7/28/29  6 month JPY-LIBOR-BBA  2.67%  (777) 
JPY  11,800,000  (E)  --  7/28/39  2.40%  6 month JPY-LIBOR-BBA  718 
  $6,900,000    --  7/30/11  1.46%  3 month USD-LIBOR-BBA  (828) 
  1,200,000    --  8/4/14  3 month USD-LIBOR-BBA  2.89%  -- 
Total              $17,239 

(E) See Interest rate swap contracts note regarding extended effective dates.


Putnam Absolute Return 100 Fund

CREDIT DEFAULT CONTRACTS OUTSTANDING at 7/31/09 (Unaudited)

    Upfront        Fixed payments   
    premium      Termi-  received  Unrealized 
Swap counterparty /    received    Notional  nation  (paid) by fund  appreciation/ 
Referenced debt*  Rating***  (paid)**    amount  date  per annum  (depreciation) 
Bank of America, N.A.               
Donnelley (R.R.) &               
Sons, 4.95%, 4/1/14  --  $(18,085)    $400,000  3/20/12  (500 bp)  $(43,103) 
Deutsche Bank AG               
DJ iTraxx Europe Series               
11 Version 1  BB-  (3,334)  EUR  200,000  6/20/14  185 bp  9,808 
Macy's Retail Holdings,               
7.45%,7/15/17  --  --    $51,000  6/20/11  (825 bp)  (5,566) 
Publicis Groupe SA,               
4.125%, 1/31/12  --  --  EUR  100,000  6/20/14  (158 bp)  (5,212) 
Goldman Sachs International               
Tate & Lyle               
International Finance               
PLC, 6.50%, 6/28/12  --  --  EUR  100,000  6/20/14  (175 bp)  (3,541) 
Total              $(47,614) 

* Payments related to the reference debt are made upon a credit default event.

** Upfront premium is based on the difference between the original spread on issue and the market spread on day of execution.

*** Ratings are presented for credit default contracts in which the fund has sold protection on the underlying referenced debt. Ratings for an underlying index represent the average of the ratings of all the securities included in that index. The Moody's, Standard & Poor's or Fitch ratings are believed to be the most recent ratings available at July 31, 2009. Securities rated by Putnam are indicated by "/P." Securities rated by Fitch are indicated by "/F."


Putnam Absolute Return 300 Fund

FORWARD CURRENCY CONTRACTS TO BUY at 7/31/09 (aggregate face value $14,165) (Unaudited)

    Aggregate  Delivery  Unrealized 
  Value  face value  date  appreciation 
Euro  $14,251  $14,165  8/19/09  $86 
Total        $86 


Putnam Absolute Return 300 Fund

FORWARD CURRENCY CONTRACTS TO SELL at 7/31/09 (aggregate face value $76,123) (Unaudited)

    Aggregate  Delivery  Unrealized 
  Value  face value  date  (depreciation) 
British Pound  $167  $165  8/19/09  $(2) 
Euro  76,387  75,958  8/19/09  (429) 
Total        $(431) 


Putnam Absolute Return 300 Fund

FUTURES CONTRACTS OUTSTANDING at 7/31/09 (Unaudited)

        Unrealized 
  Number of    Expiration  appreciation/ 
  contracts  Value  date  (depreciation) 
Euro-Bobl 5 yr (Long)  18  $2,979,457  Sep-09  $(634) 
Euro-Bund 10 yr (Short)  11  1,913,111  Sep-09  (7,678) 
Euro-Euribor Interest Rate 90 day (Long)  6  2,100,134  Sep-10  9,545 
Euro-Euribor Interest Rate 90 day (Short)  6  2,120,228  Sep-09  (17,302) 
Euro-Schatz 2 yr (Short)  44  6,782,108  Sep-09  2,999 
Japanese Government Bond 10 yr (Short)  2  2,914,539  Sep-09  4,316 
Japanese Government Bond 10 yr Mini (Long)  4  582,655  Sep-09  (1,873) 
U.K. Gilt 10 yr (Short)  4  783,708  Sep-09  (6,519) 
U.S. Treasury Bond 20 yr (Long)  75  8,925,000  Sep-09  178,395 
U.S. Treasury Note 2 yr (Long)  64  13,861,000  Sep-09  20,824 
U.S. Treasury Note 5 yr (Short)  89  10,269,070  Sep-09  (178,244) 
U.S. Treasury Note 10 yr (Short)  2  234,563  Sep-09  (7,647) 
Total        $(3,818) 


Putnam Absolute Return 300 Fund

WRITTEN OPTIONS OUTSTANDING at 7/31/09 (premiums received $3,202,521) (Unaudited)

  Contract  Expiration date/   
  amount  strike price  Value 
Option on an interest rate swap with Citibank, N.A. for the obligation to pay a       
fixed rate of 4.52% versus the three month USD-LIBOR-BBA maturing July 26, 2021.  $16,967,000  Jul-11/4.52  $1,087,076 
Option on an interest rate swap with Citibank, N.A. for the obligation to receive       
a fixed rate of 4.52% versus the three month USD-LIBOR-BBA maturing July 26, 2021.  16,967,000  Jul-11/4.52  1,060,607 
Option on an interest rate swap with Citibank, N.A. for the obligation to pay a       
fixed rate of 4.5475% versus the three month USD-LIBOR-BBA maturing July 26, 2021.  8,483,500  Jul-11/4.548  553,633 
Option on an interest rate swap with Citibank, N.A. for the obligation to receive       
a fixed rate of 4.5475% versus the three month USD-LIBOR-BBA maturing       
July 26, 2021.  8,483,500  Jul-11/4.548  522,159 
Total      $3,223,475 


Putnam Absolute Return 300 Fund

INTEREST RATE SWAP CONTRACTS OUTSTANDING at 7/31/09 (Unaudited)

      Upfront    Payments  Payments  Unrealized 
Swap counterparty /      premium  Termination  made by  received by  appreciation/ 
Notional amount      received (paid)  date  fund per annum  fund per annum  (depreciation) 
Citibank, N.A.               
EUR  308,000  (E)  $--  6/12/24  6 month EUR-EURIBOR-REUTERS  5.1275%  $1,497 
EUR  352,000  (E)  --  6/20/24  6 month EUR-EURIBOR-REUTERS  5.135%  1,801 
GBP  2,900,000  (E)  --  7/18/14  6 month GBP-LIBOR-BBA  4.555%  (19,162) 
  $3,641,000    --  7/28/19  3.895%  3 month USD-LIBOR-BBA  (50,023) 
  652,000    --  4/15/19  3.065%  3 month USD-LIBOR-BBA  29,292 
  2,572,000    --  5/11/39  3.8425%  3 month USD-LIBOR-BBA  129,370 
Deutsche Bank AG               
  29,426,000    --  5/12/11  1.43%  3 month USD-LIBOR-BBA  (89,122) 
  7,645,000    --  7/27/19  3.755%  3 month USD-LIBOR-BBA  (14,505) 
  1,274,000    --  7/28/19  3.895%  3 month USD-LIBOR-BBA  (17,503) 
  464,000    --  3/6/39  3.47%  3 month USD-LIBOR-BBA  49,870 
  1,584,000    --  3/20/11  3 month USD-LIBOR-BBA  1.43%  12,588 
  1,700,000    --  3/23/11  3 month USD-LIBOR-BBA  1.45%  13,911 
JPMorgan Chase Bank, N.A.               
EUR  730,000  (E)  --  6/17/24  6 month EUR-EURIBOR-REUTERS  5.195%  5,659 
AUD  520,000    --  6/26/19  6 month AUD-BBR-BBSW  6.05%  134 
CAD  520,000    --  6/25/19  3.626%  6 month CAD-BA-CDOR  (5,607) 
EUR  2,310,000  (E)  --  7/27/24  6 month EUR-EURIBOR-REUTERS  5.1355%  11,061 
JPY  36,800,000  (E)  --  7/28/29  6 month JPY-LIBOR-BBA  2.67%  (3,250) 
JPY  49,400,000  (E)  --  7/28/39  2.40%  6 month JPY-LIBOR-BBA  3,007 
  $13,500,000    --  7/30/11  1.46%  3 month USD-LIBOR-BBA  (1,620) 
  4,100,000    --  8/4/14  3 month USD-LIBOR-BBA  2.89%  -- 
Total              $57,398 

(E) See Interest rate swap contracts note regarding extended effective dates.


Putnam Absolute Return 300 Fund

CREDIT DEFAULT CONTRACTS OUTSTANDING at 7/31/09 (Unaudited)

    Upfront        Fixed payments   
    premium      Termi-  received  Unrealized 
Swap counterparty /    received    Notional  nation  (paid) by fund  appreciation/ 
Referenced debt*  Rating***  (paid)**    amount  date  per annum  (depreciation) 
 
Bank of America, N.A.               
Donnelley (R.R.) &               
Sons, 4.95%, 4/1/14  --  $(79,122)    $1,750,000  3/20/12  (500 bp)  $(188,577) 
Deutsche Bank AG               
DJ iTraxx Europe Series               
11 Version 1  BB-  (13,336)  EUR  800,000  6/20/14  185 bp  39,232 
Macy's Retail Holdings,               
7.45%,7/15/17  --  --    $144,500  6/20/11  (825 bp)  (15,770) 
Publicis Groupe SA,               
4.125%, 1/31/12  --  --  EUR  400,000  6/20/14  (158 bp)  (20,848) 
Goldman Sachs International               
Tate & Lyle               
International Finance               
PLC, 6.50%, 6/28/12  --  --  EUR  400,000  6/20/14  (175 bp)  (14,165) 
 
Total              $(200,128) 

* Payments related to the reference debt are made upon a credit default event.

** Upfront premium is based on the difference between the original spread on issue and the market spread on day of execution.

*** Ratings are presented for credit default contracts in which the fund has sold protection on the underlying referenced debt. Ratings for an underlying index represent the average of the ratings of all the securities included in that index. The Moody's, Standard & Poor's or Fitch ratings are believed to be the most recent ratings available at July 31, 2009. Securities rated by Putnam are indicated by "/P." Securities rated by Fitch are indicated by "/F."


AUD  Australian Dollar 
CAD  Canadian Dollar 
EUR  Euro 
GBP  British Pound 
JPY  Japanese Yen 
FDIC  Federal Deposit Insurance Corp. 
FRB  Floating Rate Bonds 
FRN  Floating Rate Notes 
IFB  Inverse Floating Rate Bonds 
IO  Interest Only 
PO  Principal Only 

NOTES

(a) Percentages indicated are based on net assets as follows:
100 Fund  $53,849,919 
300 Fund  113,757,189 

(b) The aggregate identified cost on a tax basis is as follows:

  Cost for federal  Unrealized  Unrealized  Net unrealized 
  income tax purposes  appreciation  depreciation  appreciation 
100 Fund  $53,246,709  $599,613  $60,909  $538,704 
300 Fund  109,723,768  2,456,826  150,288  2,306,538 

(SEG) These securities, in part or in entirety, were pledged and segregated with the broker to cover margin requirements for futures contracts for one or both of the funds at July 31, 2009.

(SEGSF) These securities, in part or in entirety, were pledged and segregated with the custodian for collateral on certain derivative contracts for one or both of the funds at July 31, 2009.

(e) Each fund invested in Putnam Money Market Liquidity Fund, an open-end management investment company managed by Putnam Investment Management, LLC ("Putnam Management"), the funds' manager, an indirect wholly-owned subsidiary of Putnam Investments, LLC. Investments in Putnam Money Market Liquidity Fund are valued at its closing net asset value each business day. Income distributions earned by the funds are recorded as interest income and totaled $3,433 and $6,745 (for 100 Fund and 300 Fund, respectively) for the period ended July 31, 2009. During the period ended July 31, 2009, cost of purchases and proceeds of sales of investments in Putnam Money Market Liquidity Fund were as follows:

  Cost of  Proceeds 
  Purchases  of Sales 
100 Fund  $23,485,419  $17,324,592 
300 Fund  56,586,216  43,791,226 

Management fees charged to Putnam Money Market Liquidity Fund have been waived by Putnam Management.

At July 31, 2009, liquid assets totaling $11,182,639 and $26,348,456 (for 100 Fund and 300 Fund, respectively) have been designated as collateral for open forward contracts and futures contracts.

Debt obligations are considered secured unless otherwise indicated.

144A after the name of an issuer represents securities exempt from registration under Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

The rates shown on FRB and FRN are the current interest rates at July 31, 2009.

The dates shown on debt obligations are the original maturity dates.

IFB are securities that pay interest rates that vary inversely to changes in the market interest rates. As interest rates rise, inverse floaters produce less current income. The interest rates shown are the current interest rates at July 31, 2009.

Security valuation: Market quotations are not considered to be readily available for certain debt obligations; such investments are valued at fair value on the basis of valuations furnished by an independent pricing service approved by the Trustees or dealers selected by Putnam Management. Such services or dealers determine valuations for normal institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships, generally recognized by institutional traders, between securities (which considers such factors as security prices, yields, maturities and ratings).

Securities quoted in foreign currencies, if any, are translated into U.S. dollars at the current exchange rate. To the extent a pricing service or dealer is unable to value a security or provides a valuation which Putnam Management does not believe accurately reflects the security's fair value, the security will be valued at fair value by Putnam Management. Certain investments, including certain restricted and illiquid securities and derivatives, are also valued at fair value following procedures approved by the Trustees. Such valuations and procedures are reviewed periodically by the Trustees.

Certain securities may be valued on the basis of a price provided by a single source.

The fair value of securities is generally determined as the amount that the fund could reasonably expect to realize from an orderly disposition of such securities over a reasonable period of time. By its nature, a fair value price is a good faith estimate of the value of a security in a current sale and does not reflect an actual market price, which may be different by a material amount.

Stripped securities: Each fund may invest in stripped securities which represent a participation in securities that may be structured in classes with rights to receive different portions of the interest and principal. Interest-only securities receive all of the interest and principal-only securities receive all of the principal. If the interest-only securities experience greater than anticipated prepayments of principal, the fund may fail to recoup fully its initial investment in these securities. Conversely, principal-only securities increase in value if prepayments are greater than anticipated and decline if prepayments are slower than anticipated. The market value of these securities is highly sensitive to changes in interest rates.

Futures and options contracts: Each fund may use futures and options contracts to hedge against changes in the values of securities the fund owns or expects to purchase, or for other investment purposes. The fund may also write options on swaps or securities it owns or in which it may invest to increase its current returns.

The potential risk to the fund is that the change in value of futures and options contracts may not correspond to the change in value of the hedged instruments. In addition, losses may arise from changes in the value of the underlying instruments, if there is an illiquid secondary market for the contracts, interest or exchange rates moving unexpectedly or if the counterparty to the contract is unable to perform. With futures, there is minimal counterparty credit risk to the fund since futures are exchange traded and the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. When the contract is closed, the fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Realized gains and losses on purchased options are included in realized gains and losses on investment securities. If a written call option is exercised, the premium originally received is recorded as an addition to sales proceeds. If a written put option is exercised, the premium originally received is recorded as a reduction to the cost of investments.


Futures contracts are valued at the quoted daily settlement prices established by the exchange on which they trade. The fund and the broker agree to exchange an amount of cash equal to the daily fluctuation in the value of the futures contract. Such receipts or payments are known as “variation margin.” Exchange traded options are valued at the last sale price or, if no sales are reported, the last bid price for purchased options and the last ask price for written options. Options traded over-the-counter are valued using prices supplied by dealers. Outstanding contracts at period end are indicative of the volume of activity during the period.

Forward currency contracts: Each fund may buy and sell forward currency contracts, which are agreements between two parties to buy and sell currencies at a set price on a future date. These contracts are used to protect against a decline in value relative to the U.S. dollar of the currencies in which its portfolio securities are denominated or quoted (or an increase in the value of a currency in which securities a fund intends to buy are denominated, when a fund holds cash reserves and short term investments), or for other investment purposes. The U.S. dollar value of forward currency contracts is determined using current forward currency exchange rates supplied by a quotation service. The market value of the contract will fluctuate with changes in currency exchange rates. The contract is marked to market daily and the change in market value is recorded as an unrealized gain or loss. When the contract is closed, the fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The fund could be exposed to risk if the value of the currency changes unfavorably, if the counterparties to the contracts are unable to meet the terms of their contracts or if the fund is unable to enter into a closing position. Outstanding contracts at period end are indicative of the volume of activity during the period.

Interest rate swap contracts: Each fund may enter into interest rate swap contracts, which are arrangements between two parties to exchange cash flows based on a notional principal amount, to manage the fund’s exposure to interest rates. An interest rate swap can be purchased or sold with an upfront premium. An upfront payment received by the fund is recorded as a liability on the fund's books. An upfront payment made by the fund is recorded as an asset on the fund's books. Interest rate swap contracts are marked-to-market daily based upon quotations from an independent pricing service or market makers and the change, if any, is recorded as unrealized gain or loss. Payments received or made are recorded as realized gains or losses. Certain interest rate swap contracts may include extended effective dates. Payments related to these swap contracts are accrued based on the terms of the contract. The fund could be exposed to credit or market risk due to unfavorable changes in the fluctuation of interest rates or if the counterparty defaults on its obligation to perform. The fund’s maximum risk of loss from counterparty risk, is the fair value of the contract. This risk may be mitigated by having a master netting arrangement between the fund and the counterparty. Outstanding contracts at period end are indicative of the volume of activity during the period.

Credit default contracts: Each fund may enter into credit default contracts to provide a measure of protection against risk of loss following a default, or other credit event in respect of issuers within an underlying index or a single issuer, or to gain credit exposure to an underlying index or issuer. In a credit default contract, the protection buyer typically makes an up front payment and a periodic stream of payments to a counterparty, the protection seller, in exchange for the right to receive a contingent payment upon the occurrence of a credit event on the reference obligation or all other equally ranked obligations of the reference entity. Credit events are contract specific but may include bankruptcy, failure to pay, restructuring and obligation acceleration. An upfront payment received by the fund, as the protection seller, is recorded as a liability on the fund’s books. An upfront payment made by the fund, as the protection buyer, is recorded as an asset on the fund’s books. Periodic payments received or paid by the fund are recorded as realized gains or losses. The credit default contracts are marked to market daily based upon quotations from an independent pricing service or market makers and the change, if any, is recorded as an unrealized gain or loss. Upon the occurrence of a credit event, the difference between the par value and market value of the reference obligation, net of any proportional amount of the upfront payment, is recorded as a realized gain or loss.

In addition to bearing the risk that the credit event will occur, the fund could be exposed to market risk due to unfavorable changes in interest rates or in the price of the underlying security or index or the possibility that the fund may be unable to close out its position at the same time or at the same price as if it had purchased the underlying reference obligations. In certain circumstances, the fund may enter into offsetting credit default contracts which would mitigate its risk of loss. The fund’s maximum risk of loss from counterparty risk, either as the protection seller or as the protection buyer, is the fair value of the contract. This risk may be mitigated by having a master netting arrangement between the fund and the counterparty. Where the fund is a seller of protection, the maximum potential amount of future payments the fund may be required to make is equal to the notional amount of the relevant credit default contract. Outstanding contracts at period end are indicative of the volume of activity during the period.

Master agreements: Each fund is a party to ISDA (International Swap and Derivatives Association, Inc.) Master Agreements (“Master Agreements”) with certain counterparties that govern over the counter derivative and foreign exchange contracts entered into from time to time. The Master Agreements may contain provisions regarding, among other things, the parties’ general obligations, representations, agreements, collateral requirements, events of default and early termination. With respect to certain counterparties, in accordance with the terms of the Master Agreements, collateral posted to the fund is held in a segregated account by the fund’s custodian and with respect to those amounts which can be sold or repledged, are presented in the fund’s portfolio; collateral pledged by the fund is segregated by the fund’s custodian and identified in The fund’s portfolio. Collateral can be in the form of cash or debt securities issued by the U.S. Government or related agencies or other securities as agreed to by the fund and the applicable counterparty. Collateral requirements are determined based on the fund’s net position with each counterparty. Termination events applicable to the fund may occur upon a decline in the fund’s net assets below a specified threshold over a certain period of time. Termination events applicable to counterparties may occur upon a decline in the counterparty’s long-term and short-term credit ratings below a specified level. In each case, upon occurrence, the other party may elect to terminate early and cause settlement of all derivative and foreign exchange contracts outstanding, including the payment of any losses and costs resulting from such early termination, as reasonably determined by the terminating party. Any decision by one or more of the fund’s counterparties to elect early termination could impact the fund's future derivative activity.

At July 31, 2009, the funds had net liability positions of $63,264 and $245,315 (for 100 Fund and 300 Fund, respectively) on derivative contracts subject to the Master Agreements. Collateral posted by the fund totaled $1,265,682 and $3,066,917 (for 100 Fund and 300 Fund, respectively).

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements ("SFAS 157"). SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. While the adoption of SFAS 157 does not have a material effect on the fund’s net asset value, it does require additional disclosures about fair value measurements. SFAS 157 establishes a three-level hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of the fund’s investments. The three levels are defined as follows:

Level 1 – Valuations based on quoted prices for identical securities in active markets.

Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 – Valuations based on inputs that are unobservable and significant to the fair value measurement.

The following is a summary of the inputs used to value the funds’ net assets as of July 31, 2009:

100 Fund

  Valuation inputs
Investments in securities:  Level 1  Level 2  Level 3 
Asset-backed securities  $--  $721,129  $-- 
Corporate bonds and notes  --  2,716,826  -- 
Mortgage-backed securities  --  6,626,201  -- 
U.S. Government and agency mortgage obligations  --  4,324,506  -- 
Short-term investments  6,160,827  33,235,924  -- 
Totals by level  $6,160,827  $47,624,586  $-- 
 
 
  Level 1  Level 2  Level 3 
Other financial instruments:  $21,392  $(1,379,013)  $-- 

Other financial instruments include futures, written options, TBA sale commitments, swaps and forward contracts.

300 Fund

  Valuation inputs
Investments in securities:  Level 1  Level 2  Level 3 
Asset-backed securities  $--  $2,916,192  $-- 
Corporate bonds and notes  --  10,608,130  -- 
Mortgage-backed securities  --  27,439,516  -- 
U.S. Government and agency mortgage obligations  --  8,471,517  -- 
Short-term investments  12,794,990  49,799,961  -- 


Totals by level  $12,794,990  $99,235,316  $-- 
 
 
  Level 1  Level 2  Level 3 
Other financial instruments:  $(3,818)  $(3,274,092)  $-- 

Other financial instruments include futures, written options, TBA sale commitments, swaps and forward contracts.

Market Values of Derivative Instruments as of July 31, 2009

100 Fund

  Asset derivatives  Liability derivatives 
Derivatives not accounted for as hedging instruments under Statement 133  Market value  Market value 
 
 
Credit contracts  $13,142  $39,337 
Foreign exchange contracts  18  93 
 
 
Interest rate contracts  160,306  1,491,657 
Total  $173,466  $1,531,087 

300 Fund

  Asset derivatives  Liability derivatives 
Derivatives not accounted for as hedging instruments under Statement 133  Market value  Market value 
 
 
Credit contracts  $52,568  $160,238 
Foreign exchange contracts  86  431 
 
 
Interest rate contracts  474,269  3,644,164 
Total  $526,923  $3,804,833 

For additional information regarding the fund please see the fund's most recent annual or semiannual shareholder report filed on the Securities and Exchange Commission's Web site, www.sec.gov, or visit Putnam's Individual Investor Web site at www.putnaminvestments.com


Item 2. Controls and Procedures:

(a) The registrant's principal executive officer and principal financial officer have concluded, based on their evaluation of the effectiveness of the design and operation of the registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the design and operation of such procedures are generally effective to provide reasonable assurance that information required to be disclosed by the registrant in this report is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms.

(b) Changes in internal control over financial reporting: Not applicable

Item 3. Exhibits:

Separate certifications for the principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Putnam Funds Trust

By (Signature and Title):

/s/ Janet C. Smith
Janet C. Smith
Principal Accounting Officer
Date: September 29, 2009

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By (Signature and Title):

/s/ Charles E. Porter
Charles E. Porter
Principal Executive Officer
Date: September 29, 2009

By (Signature and Title):

/s/ Steven D. Krichmar
Steven D. Krichmar
Principal Financial Officer
Date: September 29, 2009


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM N-Q
 
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT 
INVESTMENT COMPANY
 
Investment Company Act file number: (811- 07513)   
 
Exact name of registrant as specified in charter:  Putnam Funds Trust 
 
Address of principal executive offices: One Post Office Square, Boston, Massachusetts 02109 
 
Name and address of agent for service:    Beth S. Mazor, Vice President 
  One Post Office Square 
  Boston, Massachusetts 02109 
 
Copy to:    John W. Gerstmayr, Esq. 
  Ropes & Gray LLP 
  One International Place 
  Boston, Massachusetts 02110 
 
Registrant’s telephone number, including area code:  (617) 292-1000 
 
Date of fiscal year end: October 31, 2009     
 
Date of reporting period: July 31, 2009     

Item 1. Schedule of Investments:


Putnam Absolute Return 500 and 700 Funds
The fund's portfolio
July 31, 2009 (Unaudited)

  500 Fund 700 Fund
 
 
 
MORTGAGE-BACKED SECURITIES(a)  500 Fund 15.7% 700 Fund 20.6%
 
  Principal amount  Value  Principal amount  Value 
 
Banc of America Commercial Mortgage,         
Inc.         
FRB Ser. 07-3, Class A2, 5.658s, 2049  $835,000  $835,290  $706,000  $706,245 
Ser. 07-5, Class A3, 5.62s, 2051  392,000  358,587  355,000  324,741 
Ser. 06-5, Class A2, 5.317s, 2047  153,000  147,165  136,000  130,813 
Ser. 07-1, Class XW, IO, 0.288s, 2049  5,302,685  57,671  4,707,586  51,199 
Banc of America Commercial Mortgage,         
Inc. 144A         
Ser. 02-PB2, Class XC, IO, 0.771s, 2035  2,857,356  45,120  2,535,992  40,045 
Ser. 04-4, Class XC, IO, 0.367s, 2042  8,509,413  97,912  7,553,114  86,908 
Bear Stearns Alternate Trust II FRB         
Ser. 07-1, Class 1A1, 6.074s, 2047  624,215  350,512  538,949  302,632 
Bear Stearns Commercial Mortgage         
Securities, Inc. Ser. 07-PW18,         
Class A2, 5.613s, 2050  467,000  464,136  484,000  481,031 
Citigroup FRB Ser. 07-AR5, Class 1A2A,         
5.604s, 2037  356,478  210,921  352,267  208,429 
Citigroup Mortgage Loan Trust, Inc. FRB         
Ser. 07-6, Class 1A3A, 5.779s, 2046  293,760  152,755  255,246  132,728 
Citigroup/Deutsche Bank Commercial         
Mortgage Trust Ser. 07-CD4, Class A2B,         
5.205s, 2049  364,000  359,622  328,000  324,055 
Countrywide Alternative Loan Trust         
Ser. 06-2CB, Class A11, 6s, 2036  141,656  84,706  135,188  80,838 
Ser. 05-80CB, Class 2A1, 6s, 2036  232,550  166,419  221,592  158,577 
FRB Ser. 06-23CBC, Class 2A5, 0.685s,         
2036  259,931  128,341  267,501  132,079 
FRB Ser. 07-HY7C, Class A1, 0.425s, 2037  210,370  96,770  190,093  87,443 
Countrywide Home Loans 144A Ser. 06-R1,         
Class AS, IO, 5.565s, 2036  302,712  27,164  279,054  25,040 
Credit Suisse Mortgage Capital         
Certificates         
FRB Ser. 08-C1, Class A2, 6.217s, 2041  275,000  272,349  242,000  239,667 
FRB Ser. 07-C4, Class A2, 5.81s, 2039  165,000  165,978  145,000  145,860 
Ser. 07-C2, Class A2, 5.448s, 2049  240,000  233,449  201,000  195,514 
CS First Boston Mortgage Securities         
Corp. 144A Ser. 04-C4, Class AX, IO,         
0.396s, 2039  3,197,124  54,207  2,838,002  48,118 
CWCapital Cobalt Ser. 07-C2, Class A2,         
5.334s, 2047  153,000  149,235  149,000  145,333 
Deutsche Alternative Securities, Inc.         
FRB Ser. 06-AR6, Class A6, 0.475s, 2037  189,848  93,026  202,320  99,137 
Fannie Mae         
IFB Ser. 04-W2, Class 1A3S, IO, 6.865s,         
2044  78,274  5,430  66,343  4,603 
IFB Ser. 05-90, Class GS, IO, 6.465s,         
2035  285,013  35,889  262,237  33,021 
IFB Ser. 05-18, Class SK, IO, 6.465s,         
2035  293,880  28,574  271,169  26,366 
IFB Ser. 05-57, Class CI, IO, 6.415s,         
2035  829,191  87,718  1,105,587  116,958 
IFB Ser. 05-104, Class SI, IO, 6.415s,         
2033  1,395,818  154,728  1,188,214  131,715 
IFB Ser. 05-73, Class SD, IO, 6.395s,         
2035  105,930  14,757  97,257  13,548 
IFB Ser. 05-51, Class WS, IO, 6.345s,         
2035  285,245  36,223  253,288  32,165 
IFB Ser. 06-36, Class PS, IO, 6.315s,         
2036  395,463  45,921  351,306  40,794 
IFB Ser. 09-43, Class SB, IO, 6.045s,         
2039  119,747  14,642  110,012  13,452 
IFB Ser. 08-11, Class SC, IO, 5.995s,         
2038  319,582  34,499  294,794  31,823 
Ser. 06-W2, Class 1AS, IO, 5.661s, 2036  1,186,148  108,977  2,372,907  218,011 
Ser. 07-W1, Class 1AS, IO, 5.406s, 2046  2,339,535  210,558  3,118,885  280,700 
Ser. 03-W12, Class 1IO2, IO, 1.983s,         
2043  397,334  20,860  1,123,978  59,009 
Ser. 98-W2, Class X, IO, 1.395s, 2028  794,997  26,334  675,108  22,363 
FRB Ser. 05-115, Class DF, 1.181s, 2033  117,922  114,466  --  -- 
Ser. 98-W5, Class X, IO, 1.154s, 2028  344,579  11,414  292,613  9,693 
FRB Ser. 07-80, Class F, 0.985s, 2037  157,628  156,116  --  -- 
FRB Ser. 06-3, Class FY, 0.785s, 2036  306,773  300,591  263,147  257,844 
Ser. 03-W1, Class 2A, IO, 0.243s, 2042  1,181,538  13,292  1,003,500  11,289 
Federal Home Loan Mortgage Corp.         
Structured Pass-Through Securities         
Ser. T-59, Class 1AX, IO, 0.27s, 2043  1,015,121  6,979  861,999  5,926 
Ser. T-48, Class A2, IO, 0.212s, 2033  1,374,058  10,305  1,166,818  8,751 
FRB Ser. T-54, Class 2A, IO, 0.173s,         
2043  569,196  3,064  483,396  2,602 
Ser. T-8, Class A9, IO, 0.504s, 2028  492,567  6,157  418,312  5,229 
Freddie Mac         
IFB Ser. 3151, Class SI, IO, 6.862s,         
2036  613,226  85,780  523,765  73,266 
IFB Ser. 2779, Class YS, IO, 6.862s,         
2033  535,253  58,348  475,780  51,865 
IFB Ser. 3123, Class LI, IO, 6.412s,         
2036  842,509  110,908  559,422  73,642 
IFB Ser. 3107, Class DC, IO, 6.412s,         
2035  2,374,052  293,794  1,887,878  233,629 
IFB Ser. 3387, Class PS, IO, 6.292s,         
2037  685,698  90,019  914,265  120,025 
IFB Ser. 3346, Class SC, IO, 6.262s,         
2033  4,693,864  562,607  4,045,587  484,904 
IFB Ser. 3346, Class SB, IO, 6.262s,         
2033  3,393,415  406,090  2,949,030  352,910 
FRB Ser. 2718, Class FN, 1.788s, 2033  127,187  123,897  6,694  6,521 
FRB Ser. 2634, Class LF, 1.581s, 2033  150,019  148,470  --  -- 
FRB Ser. 3190, Class FL, 1.088s, 2032  182,320  175,610  --  -- 
FRB Ser. 3059, Class FD, 1.009s, 2035  224,453  220,684  184,651  181,551 
FRB Ser. 3035, Class NF, 1.009s, 2035  444,316  432,128  365,327  355,306 
FRB Ser. 3350, Class FK, 0.888s, 2037  154,747  152,477  --  -- 


FRB Ser. 3192, Class FE, 0.888s, 2036  234,945  233,920  193,355  192,512 
FRB Ser. 3237, Class FT, 0.809s, 2036  193,999  193,939  159,650  159,601 
Ser. 3290, Class DO, PO, zero %, 2036  62,267  60,776  54,232  52,934 
Ser. 3337, Class OA, PO, zero %, 2036  21,049  20,299  28,066  27,065 
Ser. 3171, Class KO, PO, zero %, 2036  152,249  151,773  122,743  122,359 
Ser. 3073, Class TO, PO, zero %, 2034  26,279  25,489  26,279  25,489 
GE Capital Commercial Mortgage Corp.         
144A Ser. 05-C2, Class XC, IO, 0.127s,         
2043  24,774,884  117,661  21,990,099  104,435 
Government National Mortgage Association         
IFB Ser. 07-35, Class KS, 26.191s, 2037  583,069  713,204  517,991  633,601 
IFB Ser. 05-68, Class SN, IO, 6.913s,         
2034  204,640  21,172  188,665  19,519 
IFB Ser. 04-47, Class SY, IO, 6.773s,         
2034  107,606  11,388  99,205  10,499 
IFB Ser. 04-96, Class KS, IO, 6.711s,         
2034  92,623  11,545  85,498  10,657 
IFB Ser. 06-16, Class GS, IO, 6.701s,         
2036  230,482  25,673  213,140  23,742 
IFB Ser. 04-70, Class SP, IO, 6.611s,         
2034  211,568  25,314  195,194  23,355 
IFB Ser. 07-8, Class SH, IO, 6.511s,         
2037  938,040  109,000  864,239  100,425 
IFB Ser. 05-18, Class S, IO, 6.511s,         
2035  324,387  37,405  299,135  34,493 
IFB Ser. 05-77, Class CS, IO, 6.511s,         
2032  99,030  8,661  91,128  7,970 
IFB Ser. 07-35, Class PY, IO, 6.463s,         
2037  2,176,102  255,916  1,857,709  218,472 
IFB Ser. 04-104, Class IS, IO, 6.461s,         
2034  298,945  29,924  275,516  27,579 
IFB Ser. 06-25, Class SI, IO, 6.411s,         
2036  401,355  46,678  356,594  41,472 
IFB Ser. 07-37, Class SU, IO, 6.403s,         
2037  390,368  46,727  359,509  43,033 
IFB Ser. 07-37, Class YS, IO, 6.383s,         
2037  268,614  29,056  247,598  26,783 
IFB Ser. 06-29, Class SN, IO, 6.361s,         
2036  220,072  22,009  203,665  20,369 
IFB Ser. 07-16, Class KU, IO, 6.361s,         
2037  1,133,743  118,329  1,018,086  106,258 
IFB Ser. 06-36, Class SN, IO, 6.321s,         
2036  1,203,598  112,163  1,109,021  103,350 
IFB Ser. 08-6, Class TI, IO, 6.313s,         
2032  181,201  14,147  167,081  13,045 
IFB Ser. 03-110, Class SP, IO, 6.313s,         
2030  684,280  56,398  630,847  51,994 
IFB Ser. 06-38, Class SW, IO, 6.211s,         
2036  568,272  48,996  524,412  45,215 
IFB Ser. 08-40, Class SC, IO, 6.063s,         
2038  7,365,084  742,838  6,695,306  675,284 
IFB Ser. 05-92, Class SP, IO, 6.011s,         
2035  1,248,937  109,182  1,151,302  100,647 
IFB Ser. 05-66, Class S, IO, 5.963s,         
2035  809,111  97,813  745,963  90,180 
IFB Ser. 07-17, Class SI, IO, 5.901s,         
2037  172,975  18,574  159,438  17,120 
IFB Ser. 06-16, Class SJ, IO, 5.811s,         
2036  548,794  48,837  507,397  45,153 
IFB Ser. 05-27, Class SP, IO, 5.811s,         
2035  472,931  41,046  435,720  37,816 
IFB Ser. 04-87, Class SD, IO, 5.811s,         
2034  493,124  45,604  455,812  42,153 
IFB Ser. 04-83, Class CS, IO, 5.791s,         
2034  706,887  63,867  651,351  58,850 
IFB Ser. 07-28, Class SB, IO, 5.761s,         
2037  104,094  9,833  95,982  9,067 
IFB Ser. 04-89, Class HS, IO, 5.711s,         
2034  1,464,115  132,912  1,349,170  122,478 
GS Mortgage Securities Corp. II Ser.         
06-GG6, Class A2, 5.506s, 2038  611,000  612,898  562,000  563,745 
GS Mortgage Securities Corp. II 144A         
Ser. 03-C1, Class X1, IO, 0.29s, 2040  5,688,957  101,316  5,049,869  89,935 
GSMPS Mortgage Loan Trust 144A         
Ser. 05-RP1, Class 1AS, IO, 5.864s, 2035  1,139,573  96,151  2,279,146  192,303 
Ser. 06-RP2, Class 1AS1, IO, 5.61s, 2036  1,066,088  86,620  1,421,000  115,456 
Ser. 98-2, IO, 1.055s, 2027  139,184  4,002  118,179  3,398 
Ser. 98-4, IO, 0.779s, 2026  172,560  4,530  146,588  3,848 
Ser. 98-3, IO, 0.688s, 2027  173,084  3,786  146,934  3,214 
Ser. 99-2, IO, 0.603s, 2027  228,460  5,140  193,967  4,364 
IndyMac Indx Mortgage Loan Trust FRB         
Ser. 06-AR5, Class 1A2, 5.734s, 2036  483,981  81,067  438,828  73,504 
JPMorgan Chase Commercial Mortgage         
Securities Corp.         
Ser. 07-LD12, Class A2, 5.827s, 2051  343,000  332,763  300,000  291,046 
FRB Ser. 07-LD11, Class A2, 5.783s, 2049  675,000  667,513  556,000  549,833 
FRB Ser. 07-CB19, Class A2, 5.748s, 2049  283,000  284,223  241,000  242,041 
Ser. 05-LDP4, Class A2, 4.79s, 2042  146,826  147,010  146,826  147,010 
Ser. 06-CB16, Class X1, IO, 0.102s, 2045  12,303,283  102,267  10,920,091  90,770 
LB Commercial Conduit Mortgage Trust         
Ser. 07-C3, Class A2, 5.84s, 2044  226,000  227,457  229,000  230,477 
LB-UBS Commercial Mortgage Trust         
Ser. 07-C2, Class A2, 5.303s, 2040  391,000  386,212  431,000  425,722 
Ser. 05-C7, Class A2, 5.103s, 2030  243,000  242,206  205,000  204,330 
Ser. 07-C2, Class XW, IO, 0.547s, 2040  3,651,589  76,242  3,242,531  67,701 
LB-UBS Commercial Mortgage Trust 144A         
Ser. 03-C5, Class XCL, IO, 0.235s, 2037  4,907,736  81,053  4,356,136  71,943 
Merrill Lynch Mortgage Trust Ser.         
06-C1, Class A2, 5.611s, 2039  311,000  310,025  292,000  291,085 
Merrill Lynch Mortgage Trust 144A Ser.         
05-LC1, Class X, IO, 0.1s, 2044  11,240,364  54,065  9,976,559  47,986 
Merrill Lynch/Countrywide Commercial         
Mortgage Trust Ser. 06-4, Class A2,         
5.112s, 2049  127,000  126,060  124,000  123,082 
Morgan Stanley Capital I         
FRB Ser. 07-IQ15, Class A2, 5.841s, 2049  136,000  130,553  122,000  117,114 
Ser. 07-IQ13, Class A3, 5.331s, 2044  466,000  414,990  464,000  413,208 
Ser. 06-T21, Class A2, 5.09s, 2052  54,000  53,994  50,000  49,994 
Residential Accredit Loans, Inc. Ser.         
06-QS13, Class 1A5, 6s, 2036  173,146  114,168  156,371  103,107 


Structured Adjustable Rate Mortgage         
Loan Trust         
FRB Ser. 07-10, Class 1A1, 6s, 2037  910,530  521,278  755,186  432,344 
FRB Ser. 06-9, Class 1A1, 5.025s, 2036  651,779  342,205  534,026  280,381 
FRB Ser. 06-12, Class 1A1, 0.445s, 2037  341,317  177,485  310,288  161,350 
Wachovia Bank Commercial Mortgage Trust         
FRB Ser. 07-C33, Class A3, 5.902s, 2051  372,000  326,668  340,000  298,567 
Ser. 06-C27, Class A2, 5.624s, 2045  241,000  241,517  244,000  244,523 
Ser. 07-C31, Class A2, 5.421s, 2047  216,000  210,578  180,000  175,481 
Wachovia Bank Commercial Mortgage Trust         
144A Ser. 03-C3, Class IOI, IO, 0.483s,         
2035  4,860,195  109,095  4,314,730  96,851 
Wells Fargo Alternative Loan Trust FRB         
Ser. 07-PA6, Class A1, 6.584s, 2037  412,830  235,475  342,387  195,292 
Total mortgage-backed securities (cost $18,346,742 and $15,996,412)    $19,628,321    $17,251,892 
 
 
CORPORATE BONDS AND NOTES(a)  500 Fund 5.0% 700 Fund 12.3%
 
  Principal amount  Value  Principal amount  Value 
  
Advertising and marketing services    --%    0.2% 
Lamar Media Corp. 144A sr. notes         
9 3/4s, 2014  $--  $--  $150,000  $157,875 
 
Aerospace and defense    0.1%    0.3% 
Alliant Techsystems, Inc. sr. sub.         
notes 6 3/4s, 2016  --  --  100,000  95,000 
L-3 Communications Corp. company         
guaranty Ser. B, 6 3/8s, 2015  100,000  96,000  --  -- 
L-3 Communications Corp. company         
guaranty sr. unsec. sub. notes 6 1/8s,         
2014  --  --  100,000  96,750 
L-3 Communications Corp. company         
guaranty sr. unsec. sub. notes 5 7/8s,         
2015  --  --  50,000  47,375 
    96,000    239,125 
 
Banking    0.4%    0.5% 
Merrill Lynch & Co., Inc. sr. unsec.         
notes Ser. MTNC, 4 1/4s, 2010  340,000  344,669  260,000  263,570 
Shinhan Bank 144A sr. unsec. bond 6s,         
2012 (South Korea)  225,000  228,637  150,000  152,425 
    573,306    415,995 
 
Beverage    0.1%    0.2% 
Constellation Brands, Inc. company         
guaranty sr. unsec. unsub. notes         
7 1/4s, 2016  100,000  98,000  150,000  147,000 
 
Broadcasting    0.1%    0.4% 
DIRECTV Holdings, LLC company guaranty         
sr. unsec. notes 7 5/8s, 2016  --  --  50,000  50,625 
DIRECTV Holdings, LLC company guaranty         
sr. unsec. notes 6 3/8s, 2015  100,000  95,750  150,000  143,625 
Echostar DBS Corp. company guaranty 7s,         
2013  --  --  150,000  148,125 
Echostar DBS Corp. sr. notes 6 3/8s,         
2011  100,000  99,250  --  -- 
    195,000    342,375 
 
Building materials    0.2%    0.2% 
Masco Corp. sr. unsec. unsub. notes FRN         
0.939s, 2010  100,000  97,594  --  -- 
Owens Corning, Inc. company guaranty         
unsec. unsub. notes 9s, 2019  100,000  102,250  150,000  153,375 
    199,844    153,375 
 
Cable television    --%    0.2% 
CSC Holdings, Inc. sr. notes 6 3/4s,         
2012  --  --  150,000  149,250 
 
Chemicals    0.1%    0.3% 
Airgas, Inc. 144A company guaranty sr.         
sub. notes 7 1/8s, 2018  100,000  100,000  100,000  100,000 
Mosaic Co. (The) 144A sr. unsec. unsub.         
notes 7 5/8s, 2016  100,000  106,453  150,000  159,679 
Nalco Co. company guaranty sr. unsec.         
notes 7 3/4s, 2011  --  --  29,000  29,145 
    206,453    288,824 
 
Coal    0.1%    0.2% 
Arch Western Finance, LLC company         
guaranty sr. notes 6 3/4s, 2013  200,000  194,000  150,000  145,500 
 
Combined utilities    --%    0.1% 
El Paso Corp. sr. unsec. notes 7s, 2017  --  --  50,000  48,040 
El Paso Corp. sr. unsec. notes Ser.         
GMTN, 7 3/8s, 2012  --  --  50,000  51,177 
    --    99,217 
 
Commercial and consumer services    --%    0.5% 
Corrections Corporation of America         
company guaranty sr. notes 7 3/4s, 2017  --  --  125,000  125,000 
Expedia, Inc. 144A company guaranty sr.         
notes 8 1/2s, 2016  --  --  100,000  99,000 
Lender Processing Services, Inc.         
company guaranty sr. unsec. unsub.         
notes 8 1/8s, 2016  50,000  50,500  200,000  202,000 


    50,500    426,000 
 
Computers    0.1%    0.2% 
Seagate Technology International 144A         
company guaranty sr. sec. notes 10s,         
2014 (Cayman Islands)  100,000  109,500  150,000  164,250 
Xerox Corp. sr. unsec. notes FRN         
1.363s, 2009  40,000  39,935  35,000  34,943 
    149,435    199,193 
 
Conglomerates    --%    0.1% 
SPX Corp. sr. unsec. notes 7 5/8s, 2014         
(acquired 6/8/09, cost $122,188) (RES)  --  --  125,000  124,375 
 
Containers    --%    0.3% 
Crown Americas, LLC/Crown Americas         
Capital Corp. sr. notes 7 5/8s, 2013  --  --  150,000  153,000 
Owens Brockway Glass Container, Inc.         
company guaranty 6 3/4s, 2014  --  --  150,000  145,875 
    --    298,875 
 
Electric utilities    0.4%    0.7% 
Allegheny Energy Supply 144A sr. unsec.         
bond 8 1/4s, 2012  --  --  100,000  106,921 
Ameren Corp. sr. unsec. notes 8 7/8s,         
2014  --  --  100,000  107,867 
FirstEnergy Corp. notes Ser. B, 6.45s,         
2011  245,000  261,346  160,000  170,675 
NiSource Finance Corp. company guaranty         
sr. unsec. notes 10 3/4s, 2016  --  --  50,000  58,238 
Texas-New Mexico Power Co. 144A 1st         
mtge. sec. 9 1/2s, 2019  175,000  201,695  125,000  144,068 
    463,041    587,769 
 
Electronics    --%    0.1% 
Flextronics International, Ltd. sr.         
unsec. sub. notes 6 1/2s, 2013         
(Singapore)  --  --  135,000  129,600 
 
Energy (oil field)    --%    0.2% 
Pride International, Inc. sr. unsec.         
notes 7 3/8s, 2014  --  --  200,000  206,000 
 
Food    --%    0.3% 
Del Monte Corp. sr. sub. notes 8 5/8s,         
2012  --  --  100,000  102,000 
Tyson Foods, Inc. 144A sr. unsec. notes         
10 1/2s, 2014  --  --  100,000  111,000 
    --    213,000 
 
Forest products and packaging    --%    0.3% 
Georgia-Pacific Corp. sr. unsec. unsub.         
notes 9 1/2s, 2011  --  --  150,000  157,500 
International Paper Co. sr. unsec.         
notes 7.4s, 2014  --  --  85,000  90,095 
    --    247,595 
 
Health care    0.2%    0.4% 
HCA, Inc. sr. sec. notes 9 1/8s, 2014  100,000  103,000  145,000  149,350 
HCA, Inc. 144A sr. sec. notes 8 1/2s,         
2019  --  --  50,000  51,250 
Tenet Healthcare Corp. 144A company         
guaranty sr. sec. notes 9s, 2015  100,000  105,500  100,000  105,500 
    208,500    306,100 
 
Investment banking/Brokerage    0.3%    0.4% 
Morgan Stanley sr. unsec. notes FRN         
Ser. MTN, 0.378s, 2010  355,000  353,554  355,000  353,554 
 
Manufacturing    --%    0.1% 
General Cable Corp. company guaranty         
sr. unsec. notes FRN 2.972s, 2015  --  --  50,000  43,000 
 
Media    0.4%    0.5% 
Time Warner, Inc. company guaranty sr.         
unsec. notes FRN 1.15s, 2009  520,000  518,594  445,000  443,797 
 
Medical services    0.1%    0.4% 
DaVita, Inc. company guaranty 6 5/8s,         
2013  50,000  49,125  100,000  98,250 
Omnicare, Inc. sr. sub. notes 6 7/8s,         
2015  --  --  50,000  46,625 
Service Corporation International sr.         
notes 7s, 2017  --  --  50,000  46,500 
Service Corporation International sr.         
unsec. 7 3/8s, 2014  100,000  97,250  150,000  145,875 
    146,375    337,250 
 
Medical technology    --%    --% 
Fresenius US Finance II, Inc. 144A sr.         
unsec. notes 9s, 2015  --  --  15,000  16,200 


Metals    0.2%    0.8% 
ArcelorMittal sr. unsec. unsub. notes         
5 3/8s, 2013 (Luxembourg)  --  --  150,000  153,079 
Freeport-McMoRan Copper & Gold, Inc.         
sr. unsec. notes 8 3/8s, 2017  100,000  106,000  150,000  159,000 
Steel Dynamics, Inc. company guaranty         
sr. unsec. unsub. notes 7 3/8s, 2012  --  --  150,000  148,875 
Teck Resources, Ltd. 144A sr. sec.         
notes 9 3/4s, 2014 (Canada)  100,000  111,250  150,000  166,875 
    217,250    627,829 
 
Natural gas utilities    0.1%    0.2% 
Inergy LP/Inergy Finance Corp. sr.         
unsec. notes 6 7/8s, 2014  100,000  94,500  200,000  189,000 
 
Oil and gas    0.4%    0.8% 
Chesapeake Energy Corp. sr. notes         
7 1/2s, 2013  150,000  149,250  50,000  49,750 
Ferrellgas LP/Finance sr. notes 6 3/4s,         
2014  100,000  91,000  150,000  136,500 
Forest Oil Corp. sr. notes 8s, 2011  100,000  102,000  100,000  102,000 
Newfield Exploration Co. sr. unsec.         
sub. notes 7 1/8s, 2018  --  --  50,000  48,375 
Newfield Exploration Co. sr. unsec.         
sub. notes 6 5/8s, 2014  100,000  96,500  100,000  96,500 
Range Resources Corp. company guaranty         
sr. unsec. sub. notes 7 1/2s, 2017  100,000  99,250  --  -- 
Range Resources Corp. company guaranty         
sr. unsec. sub. notes 7 1/2s, 2016  --  --  50,000  49,625 
Range Resources Corp. company guaranty         
sr. unsec. sub. notes 7 3/8s, 2013  --  --  100,000  99,500 
Williams Cos., Inc. (The) sr. unsec.         
notes 7 1/8s, 2011  --  --  100,000  104,974 
    538,000    687,224 
 
Power producers    0.2%    0.4% 
AES Corp. (The) sr. notes 8 7/8s, 2011  --  --  50,000  51,125 
AES Corp. (The) 144A sec. notes 8 3/4s,         
2013  --  --  100,000  102,000 
AES Corp. (The) 144A sr. notes 9 3/4s,         
2016  100,000  104,500  50,000  52,250 
NRG Energy, Inc. company guaranty         
7 1/4s, 2014  100,000  98,250  --  -- 
NRG Energy, Inc. sr. notes 7 3/8s, 2016  --  --  150,000  145,125 
    202,750    350,500 
 
Publishing    1.0%    1.2% 
R. R. Donnelley & Sons Co. sr. unsec.         
notes 5 5/8s, 2012  1,250,000  1,220,099  1,000,000  976,079 
 
Regional Bells    0.1%    0.2% 
Qwest Corp. sr. unsec. unsub. notes         
8 7/8s, 2012  100,000  103,750  150,000  155,625 
 
Retail    0.1%    0.3% 
Hanesbrands, Inc. company guaranty sr.         
unsec. notes FRN Ser. B, 4.593s, 2014  45,000  38,025  100,000  84,500 
Macy's Retail Holdings, Inc. company         
guaranty sr. unsec. notes 6 5/8s, 2011  135,000  137,067  135,000  137,067 
    175,092    221,567 
 
Technology services    0.1%    0.2% 
Iron Mountain, Inc. company guaranty         
8 5/8s, 2013  --  --  100,000  100,000 
Iron Mountain, Inc. company guaranty         
6 5/8s, 2016  100,000  92,375  50,000  46,188 
    92,375    146,188 
 
Telecommunications    0.2%    0.8% 
American Tower Corp. sr. unsec. notes         
7s, 2017  100,000  98,375  150,000  147,563 
Inmarsat Finance PLC company guaranty         
10 3/8s, 2012 (United Kingdom)  100,000  104,500  150,000  156,750 
Intelsat Subsidiary Holding Co., Ltd.         
company guaranty sr. unsec. notes Ser.         
*, 8 1/2s, 2013 (Bermuda)  --  --  150,000  151,500 
Nextel Communications, Inc. sr. notes         
Ser. E, 6 7/8s, 2013  --  --  150,000  136,313 
Windstream Corp. company guaranty         
8 5/8s, 2016  --  --  50,000  50,750 
    202,875    642,876 
 
Tire and rubber    --%    0.2% 
Goodyear Tire & Rubber Co. (The) sr.         
unsec. notes 10 1/2s, 2016  --  --  150,000  160,875 
 
Waste Management    --%    0.1% 
Allied Waste North America, Inc.         
company guaranty sr. unsub. sec. notes         
7 7/8s, 2013  --  --  50,000  51,938 
 
Total corporate bonds and notes (cost $5,960,949 and $9,708,374)    $6,299,293    $10,280,545 
 
 
COMMON STOCKS(a)  500 Fund 6.1% 700 Fund 6.5%
 
  Shares  Value  Shares  Value 


Aerospace and defense    0.3%    0.3% 
Goodrich Corp.  800  $41,088  600  $30,816 
Lockheed Martin Corp.  1,700  127,092  1,200  89,712 
Northrop Grumman Corp.  1,800  80,244  1,300  57,954 
Raytheon Co.  1,900  89,205  1,400  65,730 
    337,629    244,212 
 
Airlines    --%    --% 
Copa Holdings SA Class A (Panama)  200  8,108  100  4,054 
 
Banking    0.2%    0.2% 
BancorpSouth, Inc.  1,000  22,500  700  15,750 
Bank of Hawaii Corp.  200  7,674  200  7,674 
Commerce Bancshares, Inc.  300  10,998  200  7,332 
U.S. Bancorp  4,400  89,804  3,200  65,312 
Wells Fargo & Co.  3,000  73,380  2,100  51,366 
    204,356    147,434 
 
Beverage    0.1%    0.1% 
Coca-Cola Enterprises, Inc.  4,200  78,918  3,000  56,370 
Pepsi Bottling Group, Inc. (The)  2,100  71,295  1,500  50,925 
    150,213    107,295 
 
Biotechnology    0.2%    0.2% 
Biogen Idec, Inc. (NON)  4,100  194,955  2,900  137,895 
 
Cable television    0.1%    0.1% 
DISH Network Corp. Class A (NON)  2,400  40,680  1,700  28,815 
Liberty Global, Inc. Class A (NON)  3,200  67,040  2,300  48,185 
    107,720    77,000 
 
Chemicals    0.1%    0.2% 
Ashland, Inc.  1,000  33,140  700  23,198 
Celanese Corp. Ser. A  1,900  48,830  1,400  35,980 
Eastman Chemical Co.  1,000  49,660  700  34,762 
Lubrizol Corp. (The)  900  52,137  700  40,551 
    183,767    134,491 
 
Coal    0.1%    0.1% 
Alpha Natural Resources, Inc. (NON)  1,100  36,641  800  26,648 
Peabody Energy Corp.  1,200  39,732  800  26,488 
    76,373    53,136 
 
Combined utilities    --%    --% 
El Paso Corp.  4,700  47,282  3,300  33,198 
 
Commercial and consumer services    0.2%    0.2% 
Alliance Data Systems Corp. (NON)  500  25,500  400  20,400 
Equifax, Inc.  800  20,840  600  15,630 
H&R Block, Inc.  3,800  63,422  2,700  45,063 
Lender Processing Services, Inc.  900  30,762  600  20,508 
Visa, Inc. Class A  1,800  117,828  1,300  85,098 
    258,352    186,699 
 
Communications equipment    0.1%    0.1% 
Harris Corp.  2,500  78,275  1,800  56,358 
 
Computers    0.2%    0.2% 
Lexmark International, Inc. Class A         
(NON)  2,400  34,752  1,700  24,616 
Seagate Technology  8,500  102,340  6,100  73,444 
Western Digital Corp. (NON)  3,700  111,925  2,700  81,675 
    249,017    179,735 
 
Conglomerates    0.1%    0.1% 
Crane Co.  1,800  38,196  1,300  27,586 
Honeywell International, Inc.  2,700  93,690  1,900  65,930 
    131,886    93,516 
 
Consumer goods    0.3%    0.3% 
Estee Lauder Cos., Inc. (The) Class A  2,700  98,388  1,900  69,236 
Kimberly-Clark Corp.  3,700  216,265  2,700  157,815 
Newell Rubbermaid, Inc.  3,200  41,184  2,300  29,601 
    355,837    256,652 
 
Consumer services    --%    --% 
Brink's Co. (The)  1,400  38,010  1,000  27,150 
 
Containers    --%    --% 
Pactiv Corp. (NON)  1,800  45,324  1,300  32,734 
 
Electric utilities    0.2%    0.2% 
DTE Energy Co.  700  24,122  500  17,230 
FPL Group, Inc.  1,800  102,006  1,300  73,671 
Public Service Enterprise Group, Inc.  2,300  74,635  1,600  51,920 
Wisconsin Energy Corp.  500  21,485  400  17,188 
    222,248    160,009 
 
Electronics    0.4%    0.5% 


Avnet, Inc. (NON)  2,900  70,760  2,100  51,240 
Jabil Circuit, Inc.  5,600  51,296  4,100  37,556 
Marvell Technology Group, Ltd. (NON)  8,200  109,388  5,900  78,706 
National Semiconductor Corp.  4,600  69,276  3,300  49,698 
Texas Instruments, Inc.  8,800  211,640  6,300  151,515 
    512,360    368,715 
 
Energy (oil field)    --%    --% 
Rowan Cos., Inc.  1,500  31,995  1,100  23,463 
 
Financial    0.1%    0.1% 
AmeriCredit Corp. (NON)  3,400  53,346  2,400  37,656 
Broadridge Financial Solutions, Inc.  1,300  22,451  900  15,543 
    75,797    53,199 
 
Food    0.3%    0.3% 
Archer Daniels Midland Co.  3,600  108,432  2,600  78,312 
Dean Foods Co. (NON)  4,400  93,236  3,200  67,808 
Sara Lee Corp.  15,600  165,984  11,200  119,168 
    367,652    265,288 
 
Forest products and packaging    0.1%    0.1% 
Rayonier, Inc.  500  19,495  400  15,596 
Sealed Air Corp.  2,200  40,458  1,500  27,585 
    59,953    43,181 
 
Health care    --%    --% 
Tenet Healthcare Corp. (NON)  9,700  38,315  7,000  27,650 
 
Health-care services    0.2%    0.2% 
Aetna, Inc.  2,800  75,516  2,000  53,940 
Health Net, Inc. (NON)  1,800  24,354  1,300  17,589 
Humana, Inc. (NON)  900  29,565  600  19,710 
UnitedHealth Group, Inc.  2,800  78,568  2,000  56,120 
Universal Health Services, Inc. Class B  600  33,366  400  22,244 
    241,369    169,603 
 
Household furniture and appliances    --%    --% 
Whirlpool Corp.  900  51,381  600  34,254 
 
Insurance    0.2%    0.2% 
American Financial Group, Inc.  400  9,756  300  7,317 
Hanover Insurance Group, Inc. (The)  300  11,793  200  7,862 
Loews Corp.  1,800  54,036  1,300  39,026 
Principal Financial Group  1,900  45,030  1,400  33,180 
Prudential Financial, Inc.  1,000  44,270  700  30,989 
W.R. Berkley Corp.  1,700  39,491  1,200  27,876 
    204,376    146,250 
 
Investment banking/Brokerage    0.4%    0.4% 
Affiliated Managers Group (NON)  1,100  72,622  800  52,816 
BlackRock, Inc.  300  57,162  200  38,108 
Goldman Sachs Group, Inc. (The)  500  81,650  300  48,990 
SEI Investments Co.  3,500  66,150  2,500  47,250 
TD Ameritrade Holding Corp. (NON)  6,400  118,656  4,600  85,284 
Waddell & Reed Financial, Inc. Class A  2,200  62,414  1,600  45,392 
    458,654    317,840 
 
Manufacturing    0.1%    0.1% 
Cooper Industries, Ltd. Class A  1,100  36,245  800  26,360 
Dover Corp.  1,200  40,812  900  30,609 
General Cable Corp. (NON)  300  11,631  200  7,754 
Shaw Group, Inc. (NON)  500  14,720  400  11,776 
Thomas & Betts Corp. (NON)  1,400  37,296  1,000  26,640 
    140,704    103,139 
 
Medical technology    0.1%    0.1% 
Hill-Rom Holdings, Inc.  1,800  30,852  1,300  22,282 
Kinetic Concepts, Inc. (NON)  1,000  31,620  700  22,134 
    62,472    44,416 
 
Metals    --%    --% 
AK Steel Holding Corp.  1,500  29,505  1,100  21,637 
 
Natural gas utilities    --%    0.1% 
Sempra Energy  1,100  57,673  800  41,944 
 
Oil and gas    0.6%    0.7% 
Apache Corp.  1,400  117,530  1,000  83,950 
Chevron Corp.  3,500  243,145  2,500  173,675 
ConocoPhillips  5,300  231,663  3,800  166,098 
Hess Corp.  1,300  71,760  900  49,680 
Holly Corp.  2,300  48,921  1,700  36,159 
Murphy Oil Corp.  1,000  58,200  700  40,740 
    771,219    550,302 
 
Pharmaceuticals    0.4%    0.4% 
Eli Lilly & Co.  6,300  219,807  4,500  157,005 
Endo Pharmaceuticals Holdings, Inc.         
(NON)  4,000  84,040  2,900  60,929 
Mylan, Inc. (NON)  7,000  92,330  5,000  65,950 
Sepracor, Inc. (NON)  4,000  69,400  2,900  50,315 


    465,577    334,199 
 
Power producers    --%    --% 
Mirant Corp. (NON)  600  10,836  500  9,030 
 
Publishing    --%    --% 
R. R. Donnelley & Sons Co.  1,300  18,070  1,000  13,900 
 
Real estate    0.1%    0.1% 
Developers Diversified Realty Corp. (R)  900  5,049  600  3,366 
Hospitality Properties Trust (R)  600  9,474  500  7,895 
Jones Lang LaSalle, Inc.  200  7,592  200  7,592 
Nationwide Health Properties, Inc. (R)  600  17,412  500  14,510 
Public Storage, Inc. (R)  800  58,056  600  43,542 
    97,583    76,905 
 
Restaurants    --%    --% 
Brinker International, Inc.  1,200  19,968  900  14,976 
 
Retail    0.4%    0.4% 
Advance Auto Parts, Inc.  1,100  50,853  800  36,984 
AutoZone, Inc. (NON)  400  61,428  300  46,071 
Barnes & Noble, Inc.  400  9,212  300  6,909 
Gap, Inc. (The)  5,400  88,128  3,800  62,016 
Guess ?, Inc.  700  20,349  500  14,535 
Hanesbrands, Inc. (NON)  1,100  21,890  800  15,920 
Herbalife, Ltd. (Cayman Islands)  2,100  72,261  1,500  51,615 
Limited Brands, Inc.  3,100  40,114  2,200  28,468 
PETsMART, Inc.  1,500  33,555  1,100  24,607 
RadioShack Corp.  1,500  23,265  1,100  17,061 
Ross Stores, Inc.  1,500  66,135  1,100  48,499 
    487,190    352,685 
 
Shipping    --%    --% 
Ryder System, Inc.  400  14,052  300  10,539 
 
Software    0.2%    0.2% 
Oracle Corp.  10,600  234,578  7,600  168,188 
 
Technology    --%    --% 
Tech Data Corp. (NON)  1,300  45,409  900  31,437 
 
Technology services    0.1%    0.1% 
Accenture, Ltd. Class A  2,600  91,182  1,800  63,126 
Western Union Co. (The)  3,300  57,684  2,400  41,952 
    148,866    105,078 
 
Telecommunications    0.2%    0.2% 
CenturyTel, Inc.  1,096  34,403  822  25,803 
NII Holdings, Inc. (NON)  3,400  78,268  2,400  55,248 
Sprint Nextel Corp. (NON)  28,300  113,200  20,300  81,200 
    225,871    162,251 
 
Textiles    --%    --% 
Phillips-Van Heusen Corp.  600  21,228  400  14,152 
 
Total common stocks (cost $7,089,381 and $5,081,462)    $7,582,005    $5,435,789 
 
 
U.S. GOVERNMENT AGENCY OBLIGATIONS(a)  500 Fund 3.3% 700 Fund 3.8%
 
  Principal amount  Value  Principal amount  Value 
Bank of America NA FDIC guaranteed         
notes FRN 0.966s, 2010  $800,000  $799,800  $700,000  $699,825 
Bank of America NA FDIC guaranteed         
notes FRN Ser. BKNT, 0.659s, 2010  625,000  626,541  315,000  315,777 
General Electric Capital Corp. FDIC         
guaranteed notes 1 5/8s, 2011  900,000  908,190  700,000  706,370 
Goldman Sachs Group, Inc (The) FDIC         
guaranteed notes 1 5/8s, 2011  900,000  906,568  700,000  705,109 
JPMorgan Chase & Co. FDIC guaranteed         
2 5/8s, 2010  900,000  920,681  700,000  716,085 
Total U.S. Government Agency Obligations (cost $4,140,070 and $3,126,607)    $4,161,780    $3,143,166 
 
 
U.S. TREASURY OBLIGATIONS(a)  500 Fund 10.6% 700 Fund 11.3%
 
  Principal amount  Value  Principal amount  Value 
U.S. Treasury Inflation Index Notes         
4 1/4s, January 15, 2010  $2,670,780  $2,723,693  $1,908,225  $1,945,495 
3 7/8s, April 15, 2029  2,733,360  3,423,267  1,952,940  2,445,191 
2 5/8s, July 15, 2017  2,168,061  2,318,850  1,549,050  1,656,322 
2 3/8s, April 15, 2011  2,263,863  2,330,658  1,617,495  1,664,756 
2s, January 15, 2014  2,431,863  2,484,230  1,737,525  1,774,450 
Total U.S. treasury obligations (cost $13,179,514 and $9,391,200)    $13,280,699    $9,486,214 
 
 
ASSET-BACKED SECURITIES(a)  500 Fund 1.5% 700 Fund 1.9%
 
  Shares  Value  Shares  Value 
 
GSAA Home Equity Trust FRB Ser. 07-5,         
Class 2A1A, 0.405s, 2047  363,053  $209,068  333,899  $192,279 
GSAMP Trust FRB Ser. 07-HE2, Class A2A,         
0.405s, 2047  158,445  116,457  132,712  97,543 
HSI Asset Securitization Corp. Trust         


FRB Ser. 06-HE1, Class 2A1, 0.335s, 2036  191,610  126,941  173,215  114,755 
Securitized Asset Backed Receivables,         
LLC         
FRB Ser. 07-BR5, Class A2A, 0.415s, 2037  84,476  55,332  86,385  56,582 
FRB Ser. 07-BR4, Class A2A, 0 3/8s, 2037  744,589  453,282  582,239  354,448 
WAMU Asset-Backed Certificates         
FRB Ser. 07-HE2, Class 2A1, 0.395s, 2037  602,514  361,569  447,758  268,699 
FRB Ser. 07-HE1, Class 2A1, 0.335s, 2037  772,487  544,603  705,571  497,428 
Total asset-backed securities (cost $1,804,207 and $1,524,264)    $1,867,252    $1,581,734 
 
 
COMMODITY LINKED NOTES(a)  500 Fund 2.9% 700 Fund 2.9%
 
  Principal amount  Value  Principal amount  Value 
 
UBS AG/ Jersey Branch 144A sr. notes         
zero %, 2011 (Indexed to the UBS         
Bloomberg CMCI Essence Excess Return)         
(United Kingdom)  $3,600  $3,594,245  $2,400  $2,396,163 
Total commodity linked notes (cost $3,587,400 and $2,391,600)    $3,594,245    $2,396,163 
 
 
SHORT-TERM INVESTMENTS(a)  500 Fund 52.5% 700 Fund 35.7%
 
  Principal amount/shares  Value  Principal amount/shares  Value 
 
Putnam Money Market Liquidity Fund (e)  8,747,890  $8,747,890  4,995,636  $4,995,636 
SSgA Prime Money Market Fund (i)  $110,000  110,000  $--  -- 
U.S. Treasury Cash Management Bills         
with yields ranging from 0.37% to         
0.45%, maturity date April 1, 2010 (SEG)  959,000  955,961  187,000  186,407 
U.S. Treasury Bills for effective         
yields ranging from 0.50% to 0.64%,         
maturity December 17, 2009 (SEG)  249,000  248,335  377,000  375,993 
U.S. Treasury Bills for effective         
yields ranging from 0.29% to 0.67%,         
maturity November 19, 2009 (SEG)  663,000  661,734  483,000  482,077 
Federal Home Loan Bank for an effective         
yield of zero%, maturity June 18, 2010  5,000,000  5,006,800  1,900,000  1,902,584 
Federal Home Loan Bank for an effective         
yield of 0.45%, maturity         
November 24, 2009  7,500,000  7,503,225  5,000,000  5,002,150 
Federal Home Loan Bank for an effective         
yield of 0.80%, maturity April 30, 2010  2,000,000  2,004,460  2,000,000  2,004,460 
Federal Home Loan Mortgage Corp. for         
an effective yield of 0.48%, maturity         
May 10, 2010 (SEGSF)  2,800,000  2,789,472  3,700,000  3,686,088 
Federal Home Loan Mortgage Corp. for         
an effective yield of 0.45%, maturity         
February 8, 2010  5,400,000  5,386,246  --  -- 
Federal Home Loan Mortgage Corp. for         
an effective yield of 0.95%, maturity         
February 5, 2010  3,000,000  2,985,117  --  -- 
Federal Home Loan Mortgage Corp. for         
an effective yield of 0.90%, maturity         
January 8, 2010 (SEGSF)  1,600,000  1,593,600  1,400,000  1,394,400 
Federal Home Loan Mortgage Corp. for         
an effective yield of 0.60%, maturity         
December 24, 2009  5,000,000  4,987,915  1,000,000  997,583 
Federal National Mortgage Association         
for an effective yield of 0.56%,         
maturity April 12, 2010  3,700,000  3,685,381  --  -- 
Federal National Mortgage Association         
for an effective yield of 0.87%,         
maturity February 1, 2010  3,750,000  3,733,324  3,250,000  3,235,547 
Federal National Mortgage Association         
for an effective yield of 0.90%,         
maturity January 15, 2010  1,600,000  1,593,320  1,400,000  1,394,155 
Federal National Mortgage Association         
for effective yields ranging from 0.52%         
to 0.75% and maturity dates ranging         
from December 28, 2009 to         
December 29, 2009  9,000,000  8,980,497  2,500,000  2,494,583 
Federal National Mortgage Association         
for an effective yield of 0.56%,         
maturity December 28, 2009  4,600,000  4,595,676  1,750,000  1,748,355 
Total short-term investments (cost $65,542,797 and $29,888,745)    $65,568,953    $29,900,018 
 
 
TOTAL INVESTMENTS         
Total investments (cost $119,651,060 and $77,108,664) (b)    $121,982,548    $79,475,521 


Putnam Absolute Return 500 Fund

FUTURES CONTRACTS OUTSTANDING at 7/31/09 (Unaudited)

        Unrealized 
  Number of    Expiration  appreciation/ 
  contracts  Value  date  (depreciation) 
Euro-Bobl 5 yr (Long)  14  $2,317,355  Sep-09  $(134) 
Euro-Bund 10 yr (Short)  6  1,043,515  Sep-09  (3,299) 
Euro-Euribor Interest Rate 90 day (Long)  6  2,100,134  Sep-10  9,545 
Euro-Euribor Interest Rate 90 day (Short)  6  2,120,228  Sep-09  (17,142) 
Euro-Schatz 2 yr (Short)  33  5,086,581  Sep-09  2,268 
Japanese Government Bond 10 yr (Short)  1  1,457,269  Sep-09  312 
Japanese Government Bond 10 yr Mini (Short)  1  145,664  Sep-09  344 
NASDAQ 100 Index E-Mini (Long)  96  3,075,840  Sep-09  191,348 
S&P 500 Index E-Mini (Long)  35  1,722,875  Sep-09  89,642 
U.K. Gilt 10 yr (Short)  4  783,708  Sep-09  1,156 
U.S. Treasury Bond 20 yr (Long)  55  6,545,000  Sep-09  197,067 
U.S. Treasury Note 2 yr (Long)  31  6,713,922  Sep-09  10,087 
U.S. Treasury Note 5 yr (Short)  71  8,192,180  Sep-09  (142,196) 
U.S. Treasury Note 10 yr (Short)  10  1,172,813  Sep-09  13,473 
Total        $352,471 


Putnam Absolute Return 500 Fund

WRITTEN OPTIONS OUTSTANDING at 7/31/09 (premiums received $1,610,982) (Unaudited)

  Contract  Expiration date/   
  amount  strike price  Value 
Option on an interest rate swap with Citibank, N.A. for the obligation to pay a       
fixed rate of 4.52% versus the three month USD-LIBOR-BBA maturing July 26, 2021.  $8,535,000  Jul-11/4.52  $546,837 
Option on an interest rate swap with Citibank, N.A. for the obligation to receive       
a fixed rate of 4.52% versus the three month USD-LIBOR-BBA maturing July 26, 2021.  8,535,000  Jul-11/4.52  533,523 
Option on an interest rate swap with Citibank, N.A. for the obligation to pay a       
fixed rate of 4.5475% versus the three month USD-LIBOR-BBA maturing July 26, 2021.  4,267,500  Jul-11/4.5475  278,497 
Option on an interest rate swap with Citibank, N.A. for the obligation to receive       
a fixed rate of 4.5475% versus the three month USD-LIBOR-BBA maturing       
July 26, 2021.  4,267,500  Jul-11/4.5475  262,665 
Total      $1,621,522 


Putnam Absolute Return 500 Fund

INTEREST RATE SWAP CONTRACTS OUTSTANDING at 7/31/09 (Unaudited)

        Payments  Payments  Unrealized 
Swap counterparty /      Termination  made by  received by  appreciation/ 
Notional amount      date  fund per annum  fund per annum  (depreciation) 
Citibank, N.A.             
EUR  224,000  (E)  6/12/24  6 month EUR-EURIBOR-REUTERS  5.1275%  $1,089 
EUR  256,000  (E)  6/20/24  6 month EUR-EURIBOR-REUTERS  5.135%  1,310 
GBP  1,960,000  (E)  7/18/14  6 month GBP-LIBOR-BBA  4.555%  (12,951) 
  $1,746,000    7/28/19  3.895%  3 month USD-LIBOR-BBA  (23,988) 
  207,000    4/15/19  3.065%  3 month USD-LIBOR-BBA  9,300 
  1,189,000    5/11/39  3.8425%  3 month USD-LIBOR-BBA  59,806 
Deutsche Bank AG             
  22,299,000    5/12/11  1.43%  3 month USD-LIBOR-BBA  (67,537) 
  3,728,000    7/27/19  3.755%  3 month USD-LIBOR-BBA  (7,073) 
  611,000    7/28/19  3.895%  3 month USD-LIBOR-BBA  (8,394) 
  690,000    3/6/39  3.47%  3 month USD-LIBOR-BBA  74,160 
  715,000    3/20/11  3 month USD-LIBOR-BBA  1.43%  5,682 
  400,000    3/23/11  3 month USD-LIBOR-BBA  1.45%  3,273 
  482,000    4/8/19  3.115%  3 month USD-LIBOR-BBA  19,279 
JPMorgan Chase Bank, N.A.             
EUR  520,000  (E)  6/17/24  6 month EUR-EURIBOR-REUTERS  5.195%  4,031 
AUD  380,000    6/26/19  6 month AUD-BBR-BBSW  6.05%  98 
CAD  380,000    6/25/19  3.626%  6 month CAD-BA-CDOR  (4,097) 
EUR  1,560,000  (E)  7/27/24  6 month EUR-EURIBOR-REUTERS  5.1355%  7,470 
JPY  24,900,000  (E)  7/28/29  6 month JPY-LIBOR-BBA  2.67%  (2,199) 
JPY  33,500,000  (E)  7/28/39  2.40%  6 month JPY-LIBOR-BBA  2,039 
  $5,600,000    7/30/11  1.46%  3 month USD-LIBOR-BBA  (672) 
  2,600,000    8/4/14  3 month USD-LIBOR-BBA  2.89%  -- 
 
Total            $60,626 

(E) See Total return swap contracts note and/or Interest rate swap contracts note(s) regarding extended effective dates.


Putnam Absolute Return 500 Fund

TOTAL RETURN SWAP CONTRACTS OUTSTANDING at 7/31/09 (Unaudited)

      Fixed payments  Total return  Unrealized 
Swap counterparty /    Termination  received (paid) by  received by  appreciation/ 
Notional amount    date  fund per annum  or paid by fund  (depreciation) 
Credit Suisse International           
  $1,000  7/15/10  (3 month USD-  The Middle East  $106,803 
      LIBOR-BBA plus  Custom Basket   
      1.00%)  Index currently   
        sponsored   
        by Credit Suisse   
        ticker CSGCPUT   
Goldman Sachs International           
  2,005  7/9/10  (3 month USD-  A basket  57,992 
      LIBOR-BBA plus  (GSPMTGCC)   
      85 bps)  of common stocks   
JPMorgan Chase Bank, N.A.           
  41,062  7/22/10  (3 month USD-  Common Stock  58,088 
      LIBOR-BBA)  of KKR Private   
        Equity Investors   
  28,539  7/23/10  (3 month USD-  Common Stock  32,877 
      LIBOR-BBA plus 20  of KKR Private   
      bp)  Equity Investors   
  8,937  7/29/10  (3 month USD-  S&P 500  14,339 
      LIBOR-BBA )  Information   
        Technology Total   
        Return Index   
  5,562  7/29/10  3 month USD-  S&P 500 Energy  (38,848) 
      LIBOR-BBA  Total Return   
        Index   
UBS, AG           
  21,764  7/22/10  3 month USD-  Common Stock  (24,100) 
      LIBOR-BBA minus  of Blackstone   
      0.55 percent  Group LP   
  14,480  7/22/10  3 month USD-  Common Stock  (11,616) 
      LIBOR-BBA minus  of Blackstone   
      0.55 percent  Group LP   
 
Total          $195,535 


Putnam Absolute Return 500 Fund

CREDIT DEFAULT CONTRACTS OUTSTANDING at 7/31/09 (Unaudited)

    Upfront        Fixed payments   
    premium      Termi-  received  Unrealized 
Swap counterparty /    received    Notional  nation  (paid) by fund  appreciation/ 
Referenced debt*  Rating***  (paid)**    amount  date  per annum  (depreciation) 
Bank of America, N.A.               
Donnelley (R.R.) &               
Sons, 4.95%, 4/1/14  --  $(56,516)    $1,250,000  3/20/12  (500 bp)  $(134,698) 
Deutsche Bank AG               
DJ iTraxx Europe Series               
11 Version 1  BB-  (9,168)  EUR  550,000  6/20/14  185 bp  26,972 
Macy's Retail Holdings,               
7.45%,7/15/17  --  --    $114,750  6/20/11  (825 bp)  (12,523) 
Publicis Groupe SA,               
4.125%, 1/31/12  --  --  EUR  275,000  6/20/14  (158 bp)  (14,333) 
Goldman Sachs International               
Tate & Lyle               
International Finance               
PLC, 6.50%, 6/28/12  --  --  EUR  275,000  6/20/14  (175 bp)  (9,738) 
 
Total              $(144,320) 

* Payments related to the reference debt are made upon a credit default event.

** Upfront premium is based on the difference between the original spread on issue and the market spread on day of execution.

*** Ratings are presented for credit default contracts in which the fund has sold protection on the underlying referenced debt. Ratings for an underlying index represent the average of the ratings of all the securities included in that index. The Moody's, Standard & Poor's or Fitch ratings are believed to be the most recent ratings available at July 31, 2009.


Putnam Absolute Return 700 Fund

FUTURES CONTRACTS OUTSTANDING at 7/31/09 (Unaudited)

        Unrealized 
  Number of    Expiration  appreciation/ 
  contracts  Value  date  (depreciation) 
Euro-Bobl 5 yr (Long)  12  $1,986,304  Sep-09  $(1,040) 
Euro-Bund 10 yr (Short)  6  1,043,515  Sep-09  (3,299) 
Euro-Euribor Interest Rate 90 day (Long)  6  2,100,134  Sep-10  9,563 
Euro-Euribor Interest Rate 90 day (Short)  6  2,120,228  Sep-09  (16,040) 
Euro-Schatz 2 yr (Short)  28  4,315,887  Sep-09  1,951 
Japanese Government Bond 10 yr (Short)  1  1,457,269  Sep-09  312 
NASDAQ 100 Index E-Mini (Long)  74  2,370,960  Sep-09  149,889 
S&P 500 Index E-Mini (Long)  32  1,575,200  Sep-09  73,361 
U.K. Gilt 10 yr (Short)  4  783,708  Sep-09  923 
U.S. Treasury Bond 20 yr (Long)  46  5,474,000  Sep-09  177,311 
U.S. Treasury Note 2 yr (Long)  24  5,197,875  Sep-09  7,809 
U.S. Treasury Note 5 yr (Short)  70  8,076,797  Sep-09  (122,779) 
U.S. Treasury Note 10 yr (Short)  12  1,407,375  Sep-09  4,811 
Total        $282,772 


Putnam Absolute Return 700 Fund

WRITTEN OPTIONS OUTSTANDING at 7/31/09 (premiums received $1,286,142) (Unaudited)

  Contract  Expiration date/   
  amount  strike price  Value 
Option on an interest rate swap with Citibank, N.A. for the obligation to pay a       
fixed rate of 4.52% versus the three month USD-LIBOR-BBA maturing July 26, 2021.  $6,814,000  Jul-11/4.52  $436,573 
Option on an interest rate swap with Citibank, N.A. for the obligation to receive       
a fixed rate of 4.52% versus the three month USD-LIBOR-BBA maturing July 26, 2021.  6,814,000  Jul-11/4.52  425,943 
Option on an interest rate swap with Citibank, N.A. for the obligation to pay a       
fixed rate of 4.5475% versus the three month USD-LIBOR-BBA maturing July 26, 2021.  3,407,000  Jul-11/4.5475  222,341 
Option on an interest rate swap with Citibank, N.A. for the obligation to receive       
a fixed rate of 4.5475% versus the three month USD-LIBOR-BBA maturing       
July 26, 2021.  3,407,000  Jul-11/4.5475  209,701 
Total      $1,294,558 


Putnam Absolute Return 700 Fund

INTEREST RATE SWAP CONTRACTS OUTSTANDING at 7/31/09 (Unaudited)

        Payments  Payments  Unrealized 
Swap counterparty /      Termination  made by  received by  appreciation/ 
Notional amount      date  fund per annum  fund per annum  (depreciation) 
Citibank, N.A.             
EUR  196,000  (E)  6/12/24  6 month EUR-EURIBOR-REUTERS  5.1275%  $952 
EUR  224,000  (E)  6/20/24  6 month EUR-EURIBOR-REUTERS  5.135%  1,146 
GBP  1,740,000  (E)  7/18/14  6 month GBP-LIBOR-BBA  4.555%  (11,497) 
  $1,337,000    7/28/19  3.895%  3 month USD-LIBOR-BBA  (18,369) 
  117,000    4/15/19  3.065%  3 month USD-LIBOR-BBA  5,256 
  768,000    5/11/39  3.8425%  3 month USD-LIBOR-BBA  38,630 
Deutsche Bank AG             
  19,837,000    5/12/11  1.43%  3 month USD-LIBOR-BBA  (60,080) 
  2,938,000    7/27/19  3.755%  3 month USD-LIBOR-BBA  (5,574) 
  468,000    7/28/19  3.895%  3 month USD-LIBOR-BBA  (6,430) 
  816,000    3/6/39  3.47%  3 month USD-LIBOR-BBA  87,702 
  297,000    3/20/11  3 month USD-LIBOR-BBA  1.43%  2,360 
  900,000    3/23/11  3 month USD-LIBOR-BBA  1.45%  7,364 
  382,000    4/8/19  3.115%  3 month USD-LIBOR-BBA  15,279 
JPMorgan Chase Bank, N.A.             
EUR  450,000  (E)  6/17/24  6 month EUR-EURIBOR-REUTERS  5.195%  3,489 
AUD  320,000    6/26/19  6 month AUD-BBR-BBSW  6.05%  82 
CAD  320,000    6/25/19  3.626%  6 month CAD-BA-CDOR  (3,450) 
EUR  1,410,000  (E)  7/27/24  6 month EUR-EURIBOR-REUTERS  5.1355%  6,752 
JPY  22,600,000  (E)  7/28/29  6 month JPY-LIBOR-BBA  2.67%  (1,996) 
JPY  30,400,000  (E)  7/28/39  2.40%  6 month JPY-LIBOR-BBA  1,851 
  $3,100,000    7/30/11  1.46%  3 month USD-LIBOR-BBA  (372) 
  2,300,000    8/4/14  3 month USD-LIBOR-BBA  2.89%  -- 
 
Total            $63,095 

(E) See Total return swap contracts note and/or Interest rate swap contracts note(s) regarding extended effective dates.


Putnam Absolute Return 700 Fund

TOTAL RETURN SWAP CONTRACTS OUTSTANDING at 7/31/09 (Unaudited)

      Fixed payments  Total return  Unrealized 
Swap counterparty /    Termination  received (paid) by  received by  appreciation/ 
Notional amount    date  fund per annum  or paid by fund  (depreciation) 
Credit Suisse International           
  $626  7/15/10  (3 month USD-  The Middle East  $66,859 
      LIBOR-BBA plus  Custom Basket   
      1.00% )  Index currently   
        sponsored   
        by Credit Suisse   
        ticker CSGCPUT   
Goldman Sachs International           
  1,255  7/9/10  (3 month USD-  A basket  36,300 
      LIBOR-BBA plus  (GSPMTGCC)   
      85 bps)  of common stocks   
JPMorgan Chase Bank, N.A.           
  25,835  7/22/10  (3 month USD-  Common Stock  36,547 
      LIBOR-BBA)  of KKR Private   
        Equity Investors   
  17,961  7/23/10  (3 month USD-  Common Stock  20,691 
      LIBOR-BBA plus 20  of KKR Private   
      bp)  Equity Investors   
  5,809  7/29/10  (3 month USD-  S&P 500  9,321 
      LIBOR-BBA )  Information   
        Technology Total   
        Return Index   
  3,615  7/29/10  3 month USD-  S&P 500 Energy  (25,249) 
      LIBOR-BBA  Total Return   
        Index   
UBS, AG           
  13,696  7/22/10  3 month USD-  Common Stock  (15,166) 
      LIBOR-BBA minus  of Blackstone   
      0.55 percent  Group LP   
  9,120  7/22/10  3 month USD-  Common Stock  (7,316) 
      LIBOR-BBA minus  of Blackstone   
      0.55 percent  Group LP   
 
Total          $121,987 


Putnam Absolute Return 700 Fund

CREDIT DEFAULT CONTRACTS OUTSTANDING at 7/31/09 (Unaudited)

    Upfront        Fixed payments   
    premium      Termi-  received  Unrealized 
Swap counterparty /    received    Notional  nation  (paid) by fund  appreciation/ 
Referenced debt*  Rating***  (paid)**    amount  date  per annum  (depreciation) 
 
Bank of America, N.A.               
Donnelley (R.R.) &               
Sons, 4.95%, 4/1/14  --  $(45,213)    $1,000,000  3/20/12  (500 bp)  $(107,758) 
Deutsche Bank AG               
DJ iTraxx Europe Series               
11 Version 1  BB-  (8,335)  EUR  500,000  6/20/14  185 bp  24,520 
Macy's Retail Holdings,               
7.45%,7/15/17  --  --    $114,750  6/20/11  (825 bp)  (12,523) 
Publicis Groupe SA,               
4.125%, 1/31/12  --  --  EUR  250,000  6/20/14  (158 bp)  (13,030) 
Goldman Sachs International               
Tate & Lyle               
International Finance               
PLC, 6.50%, 6/28/12  --  --  EUR  250,000  6/20/14  (175 bp)  (8,853) 
 
Total              $(117,644) 

* Payments related to the reference debt are made upon a credit default event.

** Upfront premium is based on the difference between the original spread on issue and the market spread on day of execution.

*** Ratings are presented for credit default contracts in which the fund has sold protection on the underlying referenced debt. Ratings for an underlying index represent the average of the ratings of all the securities included in that index. The Moody's, Standard & Poor's or Fitch ratings are believed to be the most recent ratings available at July 31, 2009.


Key to holding's currency abbreviations

AUD  Australian Dollar 
CAD  Canadian Dollar 
EUR  Euro 
GBP  British Pound 
JPY  Japanese Yen 

Key to holding's abbreviations

FRB  Floating Rate Bonds 
FRN  Floating Rate Notes 
GMTN  Global Medium Term Notes 
IFB  Inverse Floating Rate Bonds 
IO  Interest Only 
MTN  Medium Term Notes 
MTNC  Medium Term Notes Class C 
PO  Principal Only 

NOTES 

(a) Percentages indicated are based on net assets as follows:

500 Fund  $124,940,256 
700 Fund  83,648,176 

(b) The aggregate identified cost on a tax basis is as follows:

  Cost for federal  Unrealized  Unrealized  Net unrealized 
  income tax purposes  appreciation  depreciation  appreciation 
500 Fund  $119,651,060  $2,526,575  ($195,087)  $2,331,488 
700 Fund  77,108,664  2,508,755  (141,898)  2,366,857 

(NON) Non-income-producing security.

(RES) Restricted, excluding 144A securities, as to public resale. The total market value of restricted securities held at July 31, 2009 was $124,375, or 0.1% of net assets.

(SEG) These securities, in part or in entirety, were pledged and segregated with the broker to cover margin requirements for futures contracts at July 31, 2009.

(SEGSF) These securities, in part or in entirety, were pledged and segregated with the custodian for collateral on certain derivative contracts at July 31, 2009.

(e) The fund invested in Putnam Money Market Liquidity Fund, an open-end management investment company managed by Putnam Investment Management, LLC ("Putnam Management"), the fund's manager, a wholly-owned subsidiary of Putnam Investments, LLC. Investments in Putnam Money Market Liquidity Fund are valued at its closing net asset value each business day. Income distributions earned by the fund are recorded as interest income and totaled $5,733 and $3,500 (for 500 Fund and 700 Fund, respectively) for the period ended July 31, 2009. During the period ended July 31, 2009, cost of purchases and proceeds of sales of investments in Putnam Money Market Liquidity Fund were as follows:

  Cost of  Proceeds 
  Purchases  of Sales 
500 Fund  $65,416,386  $56,668,496 
700 Fund  38,966,830  33,971,194 

Management fees charged to Putnam Money Market Liquidity Fund have been waived by Putnam Management.

(i) Security purchased with cash or received, that was pledged to the fund for collateral on certain derivative contracts.

(R) Real Estate Investment Trust.

At July 31, 2009, liquid assets totaling $15,586,856 and $15,586,191 have been designated as collateral for open swap contracts and futures contracts for 500 Fund and 700 Fund, respectively.

Debt obligations are considered secured unless otherwise indicated.

144A after the name of an issuer represents securities exempt from registration under Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

The rates shown on FRB and FRN are the current interest rates at July 31, 2009.

The dates shown on debt obligations are the original maturity dates.

IFB are securities that pay interest rates that vary inversely to changes in the market interest rates. As interest rates rise, inverse floaters produce less current income. The interest rates shown are the current interest rates at July 31, 2009.

Security valuation: Investments for which market quotations are readily available are valued at the last reported sales price on their principal exchange, or official closing price for certain markets. If no sales are reported -- as in the case of some securities traded over-the-counter -- a security is valued at its last reported bid price. Market quotations are not considered to be readily available for certain debt obligations; such investments are valued at fair value on the basis of valuations furnished by an independent pricing service approved by the Trustees or dealers selected by Putnam Investment Management, LLC (“Putnam Management”), the fund’s manager, an indirect wholly-owned subsidiary of Putnam Investments, LLC.

Such services or dealers determine valuations for normal institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships, generally recognized by institutional traders, between securities (which considers such factors as security prices, yields, maturities and ratings). Many securities markets and exchanges outside the U.S. close prior to the close of the New York Stock Exchange and therefore the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but before the close of the New York Stock Exchange. Accordingly, on certain days, the fund will fair value foreign equity securities taking into account multiple factors, including movements in the U.S. securities markets. The number of days on which fair value prices will be used will depend on market activity and it is possible that fair value prices will be used by the fund to a significant extent.

Securities quoted in foreign currencies, if any, are translated into U.S. dollars at the current exchange rate. To the extent a pricing service or dealer is unable to value a security or provides a valuation which Putnam Management does not believe accurately reflects the security's fair value, the security will be valued at fair value by Putnam Management. Certain investments, including certain restricted and illiquid securities and derivatives, are also valued at fair value following procedures approved by the Trustees. Such valuations and procedures are reviewed periodically by the Trustees.

Certain securities may be valued on the basis of a price provided by a single source.

The fair value of securities is generally determined as the amount that the fund could reasonably expect to realize


from an orderly disposition of such securities over a reasonable period of time. By its nature, a fair value price is a good faith estimate of the value of a security in a current sale and does not reflect an actual market price, which may be different by a material amount.

Stripped securities: The fund may invest in stripped securities which represent a participation in securities that may be structured in classes with rights to receive different portions of the interest and principal. Interest-only securities receive all of the interest and principal-only securities receive all of the principal. If the interest-only securities experience greater than anticipated prepayments of principal, the fund may fail to recoup fully its initial investment in these securities. Conversely, principal-only securities increase in value if prepayments are greater than anticipated and decline if prepayments are slower than anticipated. The market value of these securities is highly sensitive to changes in interest rates.

Futures and options contracts: The fund may use futures and options contracts to hedge against changes in the values of securities the fund owns or expects to purchase, or for other investment purposes. The fund may also write options on swaps or securities it owns or in which it may invest to increase its current returns.

The potential risk to the fund is that the change in value of futures and options contracts may not correspond to the change in value of the hedged instruments. In addition, losses may arise from changes in the value of the underlying instruments, if there is an illiquid secondary market for the contracts, interest or exchange rates moving unexpectedly or if the counterparty to the contract is unable to perform. With futures, there is minimal counterparty credit risk to the fund since futures are exchange traded and the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. When the contract is closed, the fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Realized gains and losses on purchased options are included in realized gains and losses on investment securities. If a written call option is exercised, the premium originally received is recorded as an addition to sales proceeds. If a written put option is exercised, the premium originally received is recorded as a reduction to the cost of investments.

Futures contracts are valued at the quoted daily settlement prices established by the exchange on which they trade. The fund and the broker agree to exchange an amount of cash equal to the daily fluctuation in the value of the futures contract. Such receipts or payments are known as “variation margin.” Exchange traded options are valued at the last sale price or, if no sales are reported, the last bid price for purchased options and the last ask price for written options. Options traded over-the-counter are valued using prices supplied by dealers. Outstanding contracts at period end are indicative of the volume of activity during the period.

Total return swap contracts: The fund may enter into total return swap contracts, which are arrangements to exchange a market-linked return for a periodic payment, both based on a notional principal amount, to help enhance the fund's return and manage the fund’s exposure to credit risk. To the extent that the total return of the security, index or other financial measure underlying the transaction exceeds or falls short of the offsetting interest rate obligation, the fund will receive a payment from or make a payment to the counterparty. Total return swap contracts are marked-to-market daily based upon quotations from market makers and the change, if any, is recorded as an unrealized gain or loss. Payments received or made are recorded as realized gains or losses. Certain total return swap contracts may include extended effective dates. Payments related to these swap contracts are accrued based on the terms of the contract. The fund could be exposed to credit or market risk due to unfavorable changes in the fluctuation of interest rates or in the price of the underlying security or index, the possibility that there is no liquid market for these agreements or that the counterparty may default on its obligation to perform. The fund’s maximum risk of loss from counterparty risk, is the fair value of the contract. This risk may be mitigated by having a master netting arrangement between the fund and the counterparty. Outstanding contracts at period end are indicative of the volume of activity during the period.

Interest rate swap contracts: The fund may enter into interest rate swap contracts, which are arrangements between two parties to exchange cash flows based on a notional principal amount, to manage the fund’s exposure to interest rates. An interest rate swap can be purchased or sold with an upfront premium. An upfront payment received by the fund is recorded as a liability on the fund's books. An upfront payment made by the fund is recorded as an asset on the fund's books. Interest rate swap contracts are marked-to-market daily based upon quotations from an independent pricing service or market makers and the change, if any, is recorded as unrealized gain or loss. Payments received or made are recorded as realized gains or losses. Certain interest rate swap contracts may include extended effective dates. Payments related to these swap contracts are accrued based on the terms of the contract. The fund could be exposed to credit or market risk due to unfavorable changes in the fluctuation of interest rates or if the counterparty defaults on its obligation to perform.

The fund’s maximum risk of loss from counterparty risk, is the fair value of the contract. This risk may be mitigated by having a master netting arrangement between the fund and the counterparty. Outstanding contracts at period end are indicative of the volume of activity during the period.

Credit default contracts: The fund may enter into credit default contracts to provide a measure of protection against risk of loss following a default, or other credit event in respect of issuers within an underlying index or a single issuer, or to gain credit exposure to an underlying index or issuer. In a credit default contract, the protection buyer typically makes an up front payment and a periodic stream of payments to a counterparty, the protection seller, in exchange for the right to receive a contingent payment upon the occurrence of a credit event on the reference obligation or all other equally ranked obligations of the reference entity. Credit events are contract specific but may include bankruptcy, failure to pay, restructuring and obligation acceleration. An upfront payment received by the fund, as the protection seller, is recorded as a liability on the fund’s books. An upfront payment made by the fund, as the protection buyer, is recorded as an asset on the fund’s books. Periodic payments received or paid by the fund are recorded as realized gains or losses.

The credit default contracts are marked to market daily based upon quotations from an independent pricing service or market makers and the change, if any, is recorded as an unrealized gain or loss. Upon the occurrence of a credit event, the difference between the par value and market value of the reference obligation, net of any proportional amount of the upfront payment, is recorded as a realized gain or loss.

In addition to bearing the risk that the credit event will occur, the fund could be exposed to market risk due to unfavorable changes in interest rates or in the price of the underlying security or index or the possibility that the fund may be unable to close out its position at the same time or at the same price as if it had purchased the underlying reference obligations. In certain circumstances, the fund may enter into offsetting credit default contracts which would mitigate its risk of loss. The fund’s maximum risk of loss from counterparty risk, either as the protection seller or as the protection buyer, is the fair value of the contract. This risk may be mitigated by having a master netting arrangement between the fund and the counterparty. Where the fund is a seller of protection, the maximum potential amount of future payments the fund may be required to make is equal to the notional amount of the relevant credit default contract. Outstanding contracts at period end are indicative of the volume of activity during the period.

Master agreements: The fund is a party to ISDA (International Swap and Derivatives Association, Inc.) Master Agreements (“Master Agreements”) with certain counterparties that govern over the counter derivative and foreign exchange contracts entered into from time to time. The Master Agreements may contain provisions regarding, among other things, the parties’ general obligations, representations, agreements, collateral requirements, events of default and early termination. With respect to certain counterparties, in accordance with the terms of the Master Agreements, collateral posted to the fund is held in a segregated account by the fund’s custodian and with respect to those amounts which can be sold or repledged, are presented in the fund’s portfolio; collateral pledged by the fund is segregated by the fund’s custodian and identified in The fund’s portfolio. Collateral can be in the form of cash or debt securities issued by the U.S. Government or related agencies or other securities as agreed to by the fund and the applicable counterparty.

Collateral requirements are determined based on the fund’s net position with each counterparty. Termination events applicable to the fund may occur upon a decline in the fund’s net assets below a specified threshold over a certain period of time. Termination events applicable to counterparties may occur upon a decline in the counterparty’s long-term and short-term credit ratings below a specified level. In each case, upon occurrence, the other party may elect to terminate early and cause settlement of all derivative and foreign exchange contracts outstanding, including the payment of any losses and costs resulting from such early termination, as reasonably determined by the terminating party. Any decision by one or more of the fund’s counterparties to elect early termination could impact the fund's future derivative activity.

At July 31, 2009, The Absolute Return 500 Fund had net unrealized losses of $170,414 on derivative contracts subject to the Master Agreements. Collateral posted by the fund totaled $1,515,192.

At July 31, 2009, The Absolute Return 700 Fund had net unrealized losses of $130,240 on derivative contracts subject to the Master Agreements. Collateral posted by the fund totaled $1,226,647.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements ("SFAS 157"). SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. While the adoption of SFAS 157 does not have a material effect on the fund’s net asset value, it does require additional disclosures about fair value measurements. SFAS 157 establishes a three-level hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of the fund’s investments. The three levels are defined as follows:


Level 1 – Valuations based on quoted prices for identical securities in active markets.

Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 – Valuations based on inputs that are unobservable and significant to the fair value measurement.

The following is a summary of the inputs used to value the fund’s net assets as of July 31, 2009:

500 FUND  Valuation inputs
Investments in securities:  Level 1  Level 2  Level 3 
Asset-backed securities  $--  $1,867,252  $-- 
Common stocks:       
Basic materials  273,225  --  -- 
Capital goods  523,657  --  -- 
Communication services  333,591  --  -- 
Conglomerates  131,886  --  -- 
Consumer cyclicals  763,960  --  -- 
Consumer staples  1,003,941  --  -- 
Energy  879,587  --  -- 
Financial  1,040,766  --  -- 
Health care  1,002,688  --  -- 
Technology  1,268,505  --  -- 
Transportation  22,160  --  -- 
Utilities and power  338,039  --  -- 
Total Common stocks  7,582,005  --  -- 
Commodity linked notes  --  3,594,245  -- 
Corporate bonds and notes  --  6,299,293  -- 
Mortgage-backed securities  --  19,628,321  -- 
U.S. Government agency obligations  --  4,161,780  -- 
U.S Treasury obligations  --  13,280,699  -- 
Short-term investments  8,857,890  56,711,063  -- 
Totals by level  $16,439,895  $105,542,653  $-- 
 
 
  Level 1  Level 2  Level 3 
Other financial instruments:  $352,471  $(1,443,997)  $-- 

Other financial instruments include futures, written options, TBA sale commitments, swaps and forward contracts.

700 FUND  Valuation inputs
Investments in securities:  Level 1  Level 2  Level 3 
Asset-backed securities  $--  $1,581,734  $-- 
Common stocks:       
Basic materials  199,309  --  -- 
Capital goods  380,085  --  -- 
Communication services  239,251  --  -- 
Conglomerates  93,516  --  -- 
Consumer cyclicals  550,075  --  -- 
Consumer staples  722,976  --  -- 
Energy  626,901  --  -- 
Financial  741,628  --  -- 
Health care  713,763  --  -- 
Technology  909,511  --  -- 
Transportation  14,593  --  -- 
Utilities and power  244,181  --  -- 
Total Common stocks  5,435,789  --  -- 
Commodity linked notes  --  2,396,163  -- 
Corporate bonds and notes  --  10,280,545  -- 
Mortgage-backed securities  --  17,251,892  -- 
U.S. Government agency obligations  --  3,143,166  -- 
U.S Treasury obligations  --  9,486,214  -- 
Short-term investments  4,995,636  24,904,382  -- 
Totals by level  $10,431,425  $69,044,096  $-- 
 
 
  Level 1  Level 2  Level 3 
Other financial instruments:  $282,772  $(1,173,572)  $-- 

Other financial instruments include futures, written options, TBA sale commitments, swaps and forward contracts.

Market Values of Derivative Instruments as of July 31, 2009 500 Fund

  Asset derivatives  Liability derivatives 
 
Derivatives not accounted for as hedging instruments under Statement 133  Market value  Market value 
 
 
Credit contracts  $36,140  $114,776 
Equity contracts  551,089  74,564 
Interest rate contracts  421,789  1,911,204 
Total  $1,009,018  $2,100,544 

Market Values of Derivative Instruments as of July 31, 2009 700 Fund

  Asset derivatives  Liability derivatives 
 
Derivatives not accounted for as hedging instruments under Statement 133  Market value  Market value 
 
 
Credit contracts  $32,855  $96,951 
Equity contracts  392,968  47,731 
 
 
Interest rate contracts  373,543  1,545,484 
Total  $799,366  $1,690,166 

For additional information regarding the fund please see the fund's most recent annual or semiannual shareholder report filed on the Securities and Exchange Commission's Web site, www.sec.gov, or visit Putnam's Individual Investor Web site at www.putnaminvestments.com


Item 2. Controls and Procedures:

(a) The registrant's principal executive officer and principal financial officer have concluded, based on their evaluation of the effectiveness of the design and operation of the registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the design and operation of such procedures are generally effective to provide reasonable assurance that information required to be disclosed by the registrant in this report is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms.

(b) Changes in internal control over financial reporting: Not applicable

Item 3. Exhibits:

Separate certifications for the principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Putnam Funds Trust

By (Signature and Title):

/s/ Janet C. Smith
Janet C. Smith
Principal Accounting Officer
Date: September 29, 2009

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By (Signature and Title):

/s/ Charles E. Porter
Charles E. Porter
Principal Executive Officer
Date: September 29, 2009

By (Signature and Title):

/s/ Steven D. Krichmar
Steven D. Krichmar
Principal Financial Officer
Date: September 29, 2009


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM N-Q
 
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT 
INVESTMENT COMPANY
 
Investment Company Act file number: (811- 07513)   
 
Exact name of registrant as specified in charter:  Putnam Funds Trust 
 
Address of principal executive offices: One Post Office Square, Boston, Massachusetts 02109 
 
Name and address of agent for service:    Beth S. Mazor, Vice President 
  One Post Office Square 
  Boston, Massachusetts 02109 
 
Copy to:    John W. Gerstmayr, Esq. 
  Ropes & Gray LLP 
  One International Place 
  Boston, Massachusetts 02110 
 
Registrant’s telephone number, including area code:  (617) 292-1000 
 
Date of fiscal year end: October 31, 2009     
 
Date of reporting period: July 31, 2009     

Item 1. Schedule of Investments:

 

 

Putnam Absolute Return 1000 Fund had no holdings as of July 31, 2009.

 

 

Item 2. Controls and Procedures:

(a) The registrant's principal executive officer and principal financial officer have concluded, based on their evaluation of the effectiveness of the design and operation of the registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the design and operation of such procedures are generally effective to provide reasonable assurance that information required to be disclosed by the registrant in this report is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms.

(b) Changes in internal control over financial reporting: Not applicable

Item 3. Exhibits:

Separate certifications for the principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Putnam Funds Trust

By (Signature and Title):

/s/ Janet C. Smith
Janet C. Smith
Principal Accounting Officer
Date: September 29, 2009

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By (Signature and Title):

/s/ Charles E. Porter
Charles E. Porter
Principal Executive Officer
Date: September 29, 2009

By (Signature and Title):

/s/ Steven D. Krichmar
Steven D. Krichmar
Principal Financial Officer
Date: September 29, 2009


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM N-Q
 
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT 
INVESTMENT COMPANY
 
Investment Company Act file number: (811- 07513)   
 
Exact name of registrant as specified in charter:  Putnam Funds Trust 
 
Address of principal executive offices: One Post Office Square, Boston, Massachusetts 02109 
 
Name and address of agent for service:    Beth S. Mazor, Vice President 
  One Post Office Square 
  Boston, Massachusetts 02109 
 
Copy to:    John W. Gerstmayr, Esq. 
  Ropes & Gray LLP 
  One International Place 
  Boston, Massachusetts 02110 
 
Registrant’s telephone number, including area code:  (617) 292-1000 
 
Date of fiscal year end: April 30, 2010     
 
Date of reporting period: July 31, 2009     

Item 1. Schedule of Investments:


Putnam Asia Pacific Equity Fund
The fund's portfolio
7/31/09 (Unaudited)

COMMON STOCKS (95.6%)(a)     
  Shares  Value 
 
Airlines (1.4%)     
Singapore Airlines, Ltd. (Singapore)  9,000  $84,475 
    84,475 
 
Automotive (4.0%)     
Honda Motor Co., Ltd. (Japan)  2,300  74,014 
Nissan Motor Co., Ltd. (Japan)  22,400  162,836 
    236,850 
 
Banking (10.4%)     
Australia & New Zealand Banking Group, Ltd. (Australia)  7,873  121,728 
Bank of China Ltd. (China)  145,000  72,221 
China Construction Bank Corp. (China)  202,000  162,907 
Sumitomo Mitsui Financial Group, Inc. (Japan)  2,700  115,372 
United Overseas Bank, Ltd. (Singapore)  12,000  147,507 
    619,735 
 
Broadcasting (1.0%)     
Fuji Television Network, Inc. (Japan)  37  59,064 
    59,064 
 
Building materials (0.9%)     
Boral, Ltd. (Australia)  12,922  53,803 
    53,803 
 
Cable television (1.6%)     
Jupiter Telecommunications Co., Ltd. (Japan)  113  94,783 
    94,783 
 
Chemicals (1.9%)     
Nitto Denko Corp. (Japan)  3,600  115,847 
    115,847 
 
Commercial and consumer services (2.5%)     
Brambles, Ltd. (Australia)  17,115  85,542 
Daito Trust Construction Co., Ltd. (Japan)  1,300  63,916 
    149,458 
 
Computers (3.0%)     
Fujitsu, Ltd. (Japan)  21,000  137,814 
Longtop Financial Technologies Ltd. ADR (China) (NON)  1,500  41,895 
    179,709 
 
Conglomerates (3.7%)     
Mitsubishi Corp. (Japan)  6,400  127,622 
Mitsui & Co., Ltd. (Japan)  7,300  91,423 
    219,045 
 
Electric utilities (1.3%)     
Tokyo Electric Power Co. (Japan)  3,100  79,315 
    79,315 
 
Electronics (5.8%)     
Hon Hai Precision Industry Co., Ltd. (Taiwan)  26,000  89,579 
LG Display Co., Ltd. (South Korea)  2,310  66,691 
Nippon Electric Glass Co., Ltd. (Japan)  9,000  104,263 
Samsung Electronics Co., Ltd. (South Korea)  138  81,368 
    341,901 
 
Engineering and construction (1.3%)     
GS Engineering & Construction Corp. (South Korea)  1,049  74,837 
    74,837 
 
Financial (4.1%)     
KB Financial Group, Inc. (South Korea) (NON)  2,190  94,706 
KB Financial Group, Inc. (Rights) (South Korea)     
(F)(NON)  170  2,194 
Korea Investment Holdings Co., Ltd. (South Korea)  2,410  78,704 
ORIX Corp. (Japan)  1,120  70,783 
    246,387 
 
Food (1.3%)     
Toyo Suisan Kaisha, Ltd. (Japan)  3,000  74,858 


    74,858 
 
Gaming and lottery (2.0%)     
Sankyo Co., Ltd. (Japan)  2,000  119,012 
    119,012 
 
Insurance (2.0%)     
China Life Insurance Co., Ltd. (China)  27,000  119,674 
    119,674 
 
Machinery (1.7%)     
China National Materials Co., Ltd. (China)  104,000  98,501 
    98,501 
 
Metals (7.6%)     
BHP Billiton, Ltd. (Australia)  5,673  179,165 
BlueScope Steel, Ltd. (Australia)  38,181  107,362 
JFE Holdings, Inc. (Japan)  2,500  100,496 
Tokyo Steel Manufacturing Co., Ltd. (Japan)  5,800  64,254 
    451,277 
 
Natural gas utilities (2.2%)     
Tokyo Gas Co., Ltd. (Japan)  36,000  131,800 
    131,800 
 
Oil and gas (4.0%)     
China Petroleum & Chemical Corp. (China)  102,000  91,605 
CNOOC, Ltd. (China)  74,000  99,497 
Santos, Ltd. (Australia)  3,622  43,882 
    234,984 
 
Pharmaceuticals (3.2%)     
Astellas Pharma, Inc. (Japan)  3,600  137,118 
Ono Pharmaceutical Co., Ltd. (Japan)  1,200  53,302 
    190,420 
 
Railroads (1.3%)     
East Japan Railway Co. (Japan)  1,300  74,478 
    74,478 
 
Real estate (9.2%)     
Cheung Kong Holdings, Ltd. (Hong Kong)  8,000  103,332 
GPT Group (Australia) (R)  132,965  58,801 
Japan Retail Fund Investment Corp. (Japan) (R)  18  90,209 
Link REIT (The) (Hong Kong) (R)  36,000  81,757 
Westfield Group (Australia)  11,006  104,048 
Wharf (Holdings), Ltd. (Hong Kong)  23,000  108,177 
    546,324 
 
Retail (4.9%)     
Esprit Holdings, Ltd. (Hong Kong)  16,500  119,229 
Lawson, Inc. (Japan)  1,900  78,782 
Lotte Shopping Co., Ltd. (South Korea)  380  95,162 
    293,173 
 
Semiconductor (2.2%)     
Taiwan Semiconductor Manufacturing Co., Ltd. (Taiwan)  71,404  128,230 
    128,230 
 
Telecommunications (3.5%)     
Hutchison Telecommunications Hong Kong Holdings, Ltd.     
(Hong Kong) (NON)  544,000  84,234 
KDDI Corp. (Japan)  23  121,819 
    206,053 
 
Tobacco (1.7%)     
Japan Tobacco, Inc. (Japan)  35  101,182 
    101,182 
 
Toys (2.3%)     
Nintendo Co., Ltd. (Japan)  500  134,997 
    134,997 
 
Transportation (1.1%)     
DP World, Ltd. (United Arab Emirates)  187,500  67,500 
    67,500 
 
Trucks and parts (2.5%)     
Aisin Seiki Co., Ltd. (Japan)  5,700  146,439 
    146,439 


Total common stocks (cost $5,253,763)    $5,674,111 
 
SHORT-TERM INVESTMENTS (3.0%)(a)     
  Shares  Value 
Putnam Money Market Liquidity Fund (e)  179,107  $179,107 
Total short-term investments (cost $179,107)    $179,107 
 
TOTAL INVESTMENTS     
Total investments (cost $5,432,870) (b)    $5,853,218 


TOTAL RETURN SWAP CONTRACTS OUTSTANDING at 7/31/09 (Unaudited)  
 
    Fixed payments  Total return  Unrealized 
Swap counterparty /  Termination  received (paid) by  received by  appreciation/ 
Notional amount  date  fund per annum  or paid by fund  (depreciation) 
UBS, AG           
$442  6/21/10  (3 month USD-  MSCI Daily Total  $4,720 
      LIBOR-BBA minus  Return Net   
      1.25 percent)  Emerging Markets   
        India USD Index   
 
Total          $4,720 


Key to holding's abbreviations

ADR American Depository Receipts

NOTES

(a) Percentages indicated are based on net assets of $5,932,931.

(b) The aggregate identified cost on a tax basis is $5,432,872, resulting in gross unrealized appreciation and depreciation of $461,989 and $41,643, respectively, or net unrealized appreciation of $420,346.

(NON) Non-income-producing security.

(e) The fund invested in Putnam Money Market Liquidity Fund, an open-end management investment company managed by Putnam Investment Management, LLC ("Putnam Management"), the fund's manager, an indirect wholly-owned subsidiary of Putnam Investments, LLC. Investments in Putnam Money Market Liquidity Fund are valued at its closing net asset value each business day. Income distributions earned by the fund are recorded as interest income and totaled $275 for the period ended July 31, 2009. During the period ended July 31, 2009, cost of purchases and proceeds of sales of investments in Putnam Money Market Liquidity Fund aggregated $5,372,528 and $5,193,421, respectively. Management fees charged to Putnam Money Market Liquidity Fund have been waived by Putnam Management.

(F) Is valued at fair value following procedures approved by the Trustees. Securities may be classified as a Level 2 or Level 3 for SFAS 157 disclosures based on the securities valuation inputs.

(R) Real Estate Investment Trust.

ADR after the name of a foreign holding represents ownership of foreign securities on deposit with a custodian bank.

DIVERSIFICATION BY COUNTRY   
 
Distribution of investments by country of risk at July 31, 2009 (as a percentage of Portfolio Value):   
Japan  46.6 %
Australia  12.9
China  11.7
Hong Kong  8.5
South Korea  8.4
Singapore  4.0
Taiwan  3.7
United States  3.0
United Arab Emirates  1.2
Total  100.0  %

Security valuation: Investments for which market quotations are readily available are valued at the last reported sales price on their principal exchange, or official closing price for certain markets. If no sales are reported -- as in the case of some securities traded over-the-counter -- a security is valued at its last reported bid price. Many securities markets and exchanges outside the U.S. close prior to the close of the New York Stock Exchange and therefore the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but before the close of the New York Stock Exchange. Accordingly, on certain days, the fund will fair value foreign equity securities taking into account multiple factors, including movements in the U.S. securities markets. The number of days on which fair value prices will be used will depend on market activity and it is possible that fair value prices will be used by the fund to a significant extent.

Securities quoted in foreign currencies, if any, are translated into U.S. dollars at the current exchange rate. To the extent a pricing service or dealer is unable to value a security or provides a valuation which Putnam Management does not believe accurately reflects the security's fair value, the security will be valued at fair value by Putnam Management. Certain investments, including certain restricted and illiquid securities and derivatives, are also valued at fair value following procedures approved by the Trustees. Such valuations and procedures are reviewed periodically by the Trustees.

The fair value of securities is generally determined as the amount that the fund could reasonably expect to realize from an orderly disposition of such securities over a reasonable period of time. By its nature, a fair value price is a good faith estimate of the value of a security in a current sale and does not reflect an actual market price, which may be different by a material amount.

Total return swap contracts: The fund may enter into total return swap contracts, which are arrangements to exchange a market-linked return for a periodic payment, both based on a notional principal amount, to help enhance the fund's return and manage the fund’s exposure to credit risk. To the extent that the total return of the security, index or other financial measure underlying the transaction exceeds or falls short of the offsetting interest rate obligation, the fund will receive a payment from or make a payment to the counterparty. Total return swap contracts are marked-to-market daily based upon quotations from market makers and the change, if any, is recorded as an unrealized gain or loss. Payments received or made are recorded as realized gains or losses. Certain total return swap contracts may include extended effective dates. Payments related to these swap contracts are accrued based on the terms of the contract. The fund could be exposed to credit or market risk due to unfavorable changes in the fluctuation of interest rates or in the price of the underlying security or index, the possibility that there is no liquid market for these agreements or that the counterparty may default on its obligation to perform. The fund’s maximum risk of loss from counterparty risk, is the fair value of the contract. This risk may be mitigated by having a master netting arrangement between the fund and the counterparty. Outstanding contracts at period end are indicative of the volume of activity during the period.

Master agreements: The fund is a party to ISDA (International Swap and Derivatives Association, Inc.) Master Agreements (“Master Agreements”) with certain counterparties that govern over the counter derivative and foreign exchange contracts entered into from time to time. The Master Agreements may contain provisions regarding, among other things, the parties’ general obligations, representations, agreements, collateral requirements, events of default and early termination. With respect to certain counterparties, in accordance with the terms of the Master Agreements, collateral


posted to the fund is held in a segregated account by the fund’s custodian and with respect to those amounts which can be sold or repledged, are presented in the fund’s portfolio; collateral pledged by the fund is segregated by the fund’s custodian and identified in The fund’s portfolio. Collateral can be in the form of cash or debt securities issued by the U.S. Government or related agencies or other securities as agreed to by the fund and the applicable counterparty. Collateral requirements are determined based on the fund’s net position with each counterparty. Termination events applicable to the fund may occur upon a decline in the fund’s net assets below a specified threshold over a certain period of time. Termination events applicable to counterparties may occur upon a decline in the counterparty’s long-term and short-term credit ratings below a specified level. In each case, upon occurrence, the other party may elect to terminate early and cause settlement of all derivative and foreign exchange contracts outstanding, including the payment of any losses and costs resulting from such early termination, as reasonably determined by the terminating party. Any decision by one or more of the fund’s counterparties to elect early termination could impact the fund's future derivative activity.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements ("SFAS 157"). SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. While the adoption of SFAS 157 does not have a material effect on the fund’s net asset value, it does require additional disclosures about fair value measurements. SFAS 157 establishes a three-level hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of the fund’s investments. The three levels are defined as follows:

Level 1 – Valuations based on quoted prices for identical securities in active markets.

Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 – Valuations based on inputs that are unobservable and significant to the fair value measurement.

The following is a summary of the inputs used to value the fund’s net assets as of July 31, 2009:

    Valuation inputs
Investments in securities:    Level 1  Level 2  Level 3 
Common stocks:         
  Basic materials  $567,124  $--  $-- 
  Capital goods  319,777  --  -- 
  Communication services  300,836  --  -- 
  Conglomerates  219,045  --  -- 
  Consumer cyclicals  967,575  --  -- 
  Consumer staples  254,822  --  -- 
  Energy  234,984  --  -- 
  Financials  1,529,926  --  2,194 
  Health care  190,420  --  -- 
  Technology  649,840  --  -- 
  Transportation  226,453  --  -- 
  Utilities and power  211,115  --  -- 
Total Common stocks    5,671,917  --  2,194 
Short-term investments    179,107  --  -- 
  Totals by level  $5,851,024  $--  $2,194 
 
    Level 1  Level 2  Level 3 
Other financial instruments:    $--  $4,720  $-- 

Other financial instruments include futures, written options, TBA sale commitments, swaps and forward contracts.

The following is a reconciliation of Level 3 assets as of July 31, 2009:

  Balance as of      Change in net       
  June 12, 2009  Accrued    unrealized    Net transfers   
  (commencement of  discounts/  Realized  appreciation/  Net purchases/  in and/or out  Balance as of 
Investments in securities:  operations)  premiums  gain/(loss)  depreciation)  sales  of Level 3  July 31, 2009 
Common stocks:               
Financial  $--  $--  $--  $2,194  $--  $--  $2,194 
Total Common stocks  $--  $--  $--  $2,194  $--  $--  $2,194 
Totals:  $--  $--  $--  $2,194  $--  $--  $2,194 
 
 
Market Values of Derivative Instruments as of July 31, 2009          
  Asset derivatives  Liability derivatives           
Derivatives not accounted for as hedging
instruments under Statement 133  Market value  Market value           
 
Equity contracts  $4,720  $--           
Total  $4,720  $--           

For additional information regarding the fund please see the fund's most recent annual or semiannual shareholder report filed on the Securities and Exchange Commission's Web site, www.sec.gov, or visit Putnam's Individual Investor Web site at www.putnaminvestments.com


Item 2. Controls and Procedures:

(a) The registrant's principal executive officer and principal financial officer have concluded, based on their evaluation of the effectiveness of the design and operation of the registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the design and operation of such procedures are generally effective to provide reasonable assurance that information required to be disclosed by the registrant in this report is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms.

(b) Changes in internal control over financial reporting: Not applicable

Item 3. Exhibits:

Separate certifications for the principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Putnam Funds Trust

By (Signature and Title):

/s/ Janet C. Smith
Janet C. Smith
Principal Accounting Officer
Date: September 29, 2009

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By (Signature and Title):

/s/ Charles E. Porter
Charles E. Porter
Principal Executive Officer
Date: September 29, 2009

By (Signature and Title):

/s/ Steven D. Krichmar
Steven D. Krichmar
Principal Financial Officer
Date: September 29, 2009


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM N-Q
 
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT 
INVESTMENT COMPANY
 
Investment Company Act file number: (811- 07513)   
 
Exact name of registrant as specified in charter:  Putnam Funds Trust 
 
Address of principal executive offices: One Post Office Square, Boston, Massachusetts 02109 
 
Name and address of agent for service:    Beth S. Mazor, Vice President 
  One Post Office Square 
  Boston, Massachusetts 02109 
 
Copy to:    John W. Gerstmayr, Esq. 
  Ropes & Gray LLP 
  One International Place 
  Boston, Massachusetts 02110 
 
Registrant’s telephone number, including area code:  (617) 292-1000 
 
Date of fiscal year end: April 30, 2010     
 
Date of reporting period: July 31, 2009     

Item 1. Schedule of Investments:


Putnam Capital Spectrum Fund

The fund's portfolio
7/31/09 (Unaudited)

CORPORATE BONDS AND NOTES (31.2%)(a)     
  Principal amount  Value 
 
Automotive (1.4%)     
Ford Motor Credit Co., LLC sr. unsec. notes 9 3/4s,     
2010  $410,000  $412,050 
    412,050 
 
Broadcasting (2.2%)     
DIRECTV Holdings, LLC company guaranty sr. unsec.     
notes 6 3/8s, 2015  250,000  239,375 
XM Satellite Radio Holdings, Inc. 144A sr. sec. notes     
11 1/4s, 2013  300,000  309,000 
XM Satellite Radio, Inc. 144A company guaranty sr.     
unsec. notes 13s, 2013  85,000  76,288 
    624,663 
 
Building materials (2.2%)     
Owens Corning, Inc. company guaranty unsec. unsub.     
notes 9s, 2019  400,000  409,000 
THL Buildco, Inc. (Nortek Holdings, Inc.) sr. sec.     
notes 10s, 2013  250,000  220,625 
    629,625 
 
Computers (0.9%)     
SunGard Data Systems, Inc. company guaranty 9 1/8s,     
2013  250,000  255,000 
    255,000 
 
Consumer finance (1.0%)     
GMAC, LLC sr. unsec. unsub. notes 7 1/4s, 2011  300,000  279,175 
    279,175 
 
Consumer services (0.1%)     
RSC Equipment Rental, Inc. 144A sr. sec. notes 10s,     
2017  40,000  42,100 
    42,100 
 
Containers (0.3%)     
BBC Holding Corp. sr. notes 8 7/8s, 2014  85,000  74,375 
Berry Plastics Holding Corp. sec. notes FRN 4.504s,     
2014  10,000  7,000 
    81,375 
 
Electronics (1.0%)     
Advanced Micro Devices, Inc. sr. notes 7 3/4s, 2012  250,000  195,000 
Freescale Semiconductor, Inc. company guaranty sr.     
unsec. notes 8 7/8s, 2014  155,000  103,850 
    298,850 
 
Entertainment (0.6%)     
Cinemark, Inc. 144A company guaranty sr. notes 8 5/8s,     
2019  165,000  170,775 
    170,775 
 
Financial (1.8%)     
International Lease Finance Corp. sr. unsec. unsub.     
notes 5s, 2010  300,000  269,818 
Leucadia National Corp. sr. unsec. notes 8 1/8s, 2015  250,000  240,625 
    510,443 
 
Forest products and packaging (2.1%)     
Grief, Inc. 144A sr. notes 7 3/4s, 2019  40,000  39,700 
Sealed Air Corp. 144A sr. notes 7 7/8s, 2017  300,000  316,818 
Verso Paper Holdings, LLC/Verso Paper, Inc. 144A sr.     
sec. notes 11 1/2s, 2014  275,000  255,750 
    612,268 
 
Gaming and lottery (2.1%)     
Boyd Gaming Corp. sr. sub. notes 7 1/8s, 2016  250,000  200,000 
MTR Gaming Group, Inc. 144A company guaranty sr. notes     
12 5/8s, 2014  400,000  389,000 
    589,000 
 
Manufacturing (0.8%)     
Belden CDT, Inc. 144A company guaranty sr. sub. notes     
9 1/4s, 2019  150,000  148,875 


General Cable Corp. company guaranty sr. unsec. notes       
FRN 2.972s, 2015    80,000  68,800 
      217,675 
 
Media (0.8%)       
Virgin Media Finance PLC company guaranty sr. notes       
Ser. 1, 9 1/2s, 2016 (United Kingdom)    225,000  230,625 
      230,625 
 
Medical services (0.9%)       
DaVita, Inc. company guaranty 6 5/8s, 2013    250,000  245,625 
      245,625 
 
Oil and gas (6.4%)       
Connacher Oil and Gas, Ltd. 144A sr. sec. notes       
11 3/4s, 2014 (Canada)    255,000  256,275 
Newfield Exploration Co. sr. unsec. sub. notes 6 5/8s,       
2014    250,000  241,250 
PetroHawk Energy Corp. 144A sr. notes 10 1/2s, 2014    250,000  267,500 
Petroleum Development Corp. company guaranty sr.       
unsec. notes 12s, 2018    180,000  160,200 
Plains Exploration & Production Co. company guaranty       
7s, 2017    250,000  236,875 
Quicksilver Resources, Inc. sr. notes 11 3/4s, 2016    200,000  219,250 
Range Resources Corp. company guaranty sr. unsec. sub.       
notes 7 1/2s, 2017    250,000  248,125 
SandRidge Energy, Inc. 144A sr. unsec. notes 9 7/8s,       
2016    200,000  202,000 
      1,831,475 
 
Paper & forest products (0.7%)       
PE Paper Escrow GmbH sr. notes Ser. REGS, 11 3/4s,       
2014 (Austria)  EUR  70,000  98,510 
PE Paper Escrow GmbH 144A sr. notes 12s, 2014 (Austria)    $100,000  99,750 
      198,260 
 
Power producers (0.4%)       
AES Corp. (The) 144A sr. notes 9 3/4s, 2016    115,000  120,175 
      120,175 
 
Railroads (0.3%)       
RailAmerica, Inc. 144A company guaranty sr. sec. notes       
9 1/4s, 2017    75,000  77,250 
      77,250 
 
Real estate (0.7%)       
CB Richard Ellis Services, Inc. 144A sr. sub. notes       
11 5/8s, 2017    200,000  201,000 
      201,000 
 
Restaurants (0.9%)       
Wendy's/Arby's Restaurants LLC 144A sr. unsec. notes       
10s, 2016    250,000  257,500 
      257,500 
 
Retail (1.1%)       
Great Atlantic & Pacific Tea Co. 144A sr. notes       
11 3/8s, 2015    80,000  80,200 
Toys R Us Property Co., LLC 144A company guaranty sr.       
unsec. notes 10 3/4s, 2017    150,000  153,750 
United Auto Group, Inc. company guaranty 7 3/4s, 2016    80,000  68,000 
      301,950 
 
Technology services (1.6%)       
First Data Corp. company guaranty sr. unsec. notes       
9 7/8s, 2015    200,000  168,750 
First Data Corp. 144A company guaranty sr. sub. notes       
11 1/4s, 2016    200,000  143,000 
First Data Corp. 144A company guaranty sr. unsec.       
unsub. notes 10.55s, 2015 (PIK)    200,000  143,000 
      454,750 
 
Telecommunications (0.9%)       
MetroPCS Wireless, Inc. company guaranty sr. unsec.       
notes 9 1/4s, 2014    250,000  258,750 
      258,750 
Total corporate bonds and notes (cost $8,374,217)      $8,900,359 

COMMON STOCKS (22.6%)(a)     
  Shares  Value 
 
Airlines (0.4%)     
Allegiant Travel Co. (NON)  2,800  $121,268 
    121,268 


Banking (2.0%)     
Bank of America Corp.  20,800  307,632 
JPMorgan Chase & Co.  3,400  131,410 
Wells Fargo & Co.  5,300  129,638 
    568,680 
 
Cable television (4.1%)     
Cablevision Systems Corp. Class A  9,400  192,418 
DISH Network Corp. Class A (NON)  56,700  961,065 
    1,153,483 
 
Chemicals (2.5%)     
W.R. Grace & Co. (NON)  43,100  716,753 
    716,753 
 
Commercial and consumer services (0.3%)     
Alliance Data Systems Corp. (NON)  1,800  91,800 
    91,800 
 
Computers (0.5%)     
Emulex Corp. (NON)  15,800  144,254 
    144,254 
 
Financial (0.7%)     
AmeriCredit Corp. (NON)  11,800  185,142 
    185,142 
 
Investment banking/Brokerage (1.1%)     
Och-Ziff Capital Management Group Class A  28,900  301,138 
    301,138 
 
Lodging/Tourism (--%)     
Full House Resorts, Inc. (NON)  2,942  7,208 
    7,208 
 
Manufacturing (0.4%)     
Thermadyne Holdings Corp. (NON)  23,800  113,526 
    113,526 
 
Medical services (0.4%)     
DaVita, Inc. (NON)  2,400  119,280 
    119,280 
 
Oil and gas (4.5%)     
Anadarko Petroleum Corp.  2,400  115,680 
EOG Resources, Inc.  1,800  133,254 
PetroHawk Energy Corp. (NON)  9,600  233,088 
Pioneer Natural Resources Co.  14,400  411,120 
Plains Exploration & Production Co. (NON)  7,600  217,740 
Williams Partners LP (Partnership Shares)  7,800  173,472 
    1,284,354 
 
Power producers (1.4%)     
AES Corp. (The) (NON)  31,900  408,001 
    408,001 
 
Technology (1.0%)     
Unisys Corp. (NON)  157,900  282,641 
    282,641 
 
Telecommunications (3.3%)     
EchoStar Corp. Class A (NON)  54,700  806,278 
NeuStar, Inc. Class A (NON)  5,800  131,544 
    937,822 
 
Total common stocks (cost $6,090,431)    $6,435,350 

CONVERTIBLE BONDS AND NOTES (6.7%)(a)     
  Principal amount  Value 
 
Broadcasting (1.2%)     
Sirius Satellite Radio, Inc. cv. sr. unsec. notes     
3 1/4s, 2011  $488,000  $356,240 
    356,240 
 
Computers (0.3%)     
Maxtor Corp. cv. sr. debs. 2 3/8s, 2012  105,000  100,013 
    100,013 
 
Electronics (0.9%)     


Advanced Micro Devices, Inc. cv. sr. unsec. notes     
5 3/4s, 2012  360,000  265,050 
    265,050 
 
Financial (1.1%)     
AmeriCredit Corp. cv. company guaranty sr. unsec.     
notes 2 1/8s, 2013  300,000  222,375 
CompuCredit Corp. cv. sr. unsec. unsub. notes 3 5/8s,     
2025  255,000  77,775 
    300,150 
 
Media (0.5%)     
Virgin Media, Inc. 144A cv. sr. unsec. notes 6 1/2s,     
2016  150,000  130,313 
    130,313 
 
Medical services (0.8%)     
Stewart Enterprises, Inc. cv. sr. unsec. notes 3 3/8s,     
2016  280,000  224,000 
    224,000 
 
Metals (--%)     
Steel Dynamics, Inc. cv. sr. notes 5 1/8s, 2014  9,000  10,811 
    10,811 
 
Real estate (0.8%)     
Alexandria Real Estate Equities, Inc. 144A cv. company     
guaranty sr. unsec. notes 3.7s, 2027 (R)  255,000  221,213 
    221,213 
 
Telecommunications (0.5%)     
Level 3 Communications, Inc. cv. sr. unsec. unsub.     
notes 5 1/4s, 2011  120,000  99,300 
Level 3 Communications, Inc. cv. sr. unsec. unsub.     
notes 3 1/2s, 2012  74,000  53,465 
    152,765 
 
Telephone (0.6%)     
Leap Wireless International, Inc. cv. sr. unsec. notes     
4 1/2s, 2014  200,000  157,758 
    157,758 
Total convertible bonds and notes (cost $1,724,570)    $1,918,313 

SENIOR LOANS (4.9%)(a)(c)     
  Principal amount  Value 
Calpine Corp. bank term loan FRN Ser. B, 3.475s, 2014  $209,468  $192,187 
Claire's Stores, Inc. bank term loan FRN 3.211s, 2014  250,000  161,458 
Federal Mogul Corp. bank term loan FRN Ser. B, 2.244s,     
2014  112,283  84,633 
Federal Mogul Corp. bank term loan FRN Ser. C, 2.228s,     
2015  57,287  43,180 
Level 3 Financing, Inc. bank term loan FRN Ser. B,     
11 1/2s, 2014  115,000  118,258 
Navistar Financial Corp. bank term loan FRN 3.496s,     
2012  80,000  74,133 
Navistar International Corp. bank term loan FRN 3.56s,     
2012  220,000  203,867 
Orbitz Worldwide, Inc. bank term loan FRN Ser. B,     
3.521s, 2014  343,205  243,675 
TRW Automotive, Inc. bank term loan FRN Ser. B,     
6.313s, 2014  294,631  278,795 
Total senior loans (cost $1,283,547)    $1,400,186 

CONVERTIBLE PREFERRED STOCKS (1.8%)(a)     
  Shares  Value 
General Motors Corp. Ser. B, $1.312 cv. pfd.  172,000  $516,000 
Total convertible preferred stocks (cost $582,600)    $516,000 

PURCHASED OPTIONS OUTSTANDING (0.1%)(a)       
  Expiration date/  Contract  Value 
  strike price  amount   
Citigroup, Inc. (Call)  Aug-09/$5.00  $33,400  $253 
S&P 500 Index Depository Receipts (SPDR Trust       
Series 1) (Put)  Sep-09/$96.00  14,267  35,260 
Total purchased options outstanding (cost $45,898)      $35,513 

SHORT-TERM INVESTMENTS (32.6%)(a)     
  Shares  Value 
Putnam Money Market Liquidity Fund (e)  9,292,271  $9,292,271 
Total short-term investments (cost $9,292,271)    $9,292,271 
 
TOTAL INVESTMENTS     
Total investments (cost $27,393,534)(b)    $28,497,992 



WRITTEN OPTIONS OUTSTANDING at 7/31/09 (premiums received $75,317) (Unaudited)   
  Contract  Expiration date/   
  amount  strike price  Value 
Citigroup, Inc. (Put)  $33,400  Aug-09/$5.00  $61,410 
Total      $61,410 


Key to holding's currency abbreviations

EUR  Euro 
USD / $  United States Dollar 

Key to holding's abbreviations

FRN Floating Rate Notes

NOTES

(a) Percentages indicated are based on net assets of $28,514,724.

(b) The aggregate identified cost on a tax basis is $27,393,534, resulting in gross unrealized appreciation and depreciation of $5,106,687 and $4,002,229, respectively, or net unrealized appreciation of $1,104,458.

(NON) Non-income-producing security.

(PIK) Income may be received in cash or additional securities at the discretion of the issuer.

(c) Senior loans are exempt from registration under the Securities Act of 1933, as amended, but contain certain restrictions on resale and cannot be sold publicly. These loans pay interest at rates which adjust periodically. The interest rates shown for senior loans are the current interest rates at July 31, 2009. Senior loans are also subject to mandatory and/or optional prepayment which cannot be predicted. As a result, the remaining maturity may be substantially less than the stated maturity shown. Senior loans are purchased or sold on a when-issued or delayed delivery basis and may be settled a month or more after the trade date, which from time to time can delay the actual investment of available cash balances; interest income is accrued based on the terms of the securities. Senior loans can be acquired through an agent, by assignment from another holder of the loan, or as a participation interest in another holder’s portion of the loan. When the fund invests in a loan or participation, the fund is subject to the risk that an intermediate participant between the fund and the borrower will fail to meet its obligations to the fund, in addition to the risk that the borrower under the loan may default on its obligations.

(e) The fund invested in Putnam Money Market Liquidity Fund, an open-end management investment company managed by Putnam Investment Management, LLC ("Putnam Management"), the fund's manager, an indirect wholly-owned subsidiary of Putnam Investments, LLC. Investments in Putnam Money Market Liquidity Fund are valued at its closing net asset value each business day. Income distributions earned by the fund are recorded as interest income and totaled $3,991 for the period ended July 31, 2009. During the period ended July 31, 2009, cost of purchases and proceeds of sales of investments in Putnam Money Market Liquidity Fund aggregated $22,144,412 and $12,852,141, respectively. Management fees charged to Putnam Money Market Liquidity Fund have been waived by Putnam Management.

(R) Real Estate Investment Trust.

At July 31, 2009, liquid assets totaling $334,000 have been designated as collateral for open options contracts.

Debt obligations are considered secured unless otherwise indicated.

144A after the name of an issuer represents securities exempt from registration under Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

The rates shown on FRN are the current interest rates at July 31, 2009.

The dates shown on debt obligations are the original maturity dates.

Security valuation: Investments for which market quotations are readily available are valued at the last reported sales price on their principal exchange, or official closing price for certain markets. If no sales are reported -- as in the case of some securities traded over-the-counter -- a security is valued at its last reported bid price. Market quotations are not considered to be readily available for certain debt obligations; such investments are valued at fair value on the basis of valuations furnished by an independent pricing service approved by the Trustees or dealers selected by Putnam Management. Such services or dealers determine valuations for normal institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships, generally recognized by institutional traders, between securities (which considers such factors as security prices, yields, maturities and ratings). Many securities markets and exchanges outside the U.S. close prior to the close of the New York Stock Exchange and therefore the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but before the close of the New York Stock Exchange. Accordingly, on certain days, the fund will fair value foreign equity securities taking into account multiple factors, including movements in the U.S. securities markets. The number of days on which fair value prices will be used will depend on market activity and it is possible that fair value prices will be used by the fund to a significant extent.

Securities quoted in foreign currencies, if any, are translated into U.S. dollars at the current exchange rate. To the extent a pricing service or dealer is unable to value a security or provides a valuation which Putnam Management does not believe accurately reflects the security's fair value, the security will be valued at fair value by Putnam Management. Certain investments, including certain restricted and illiquid securities and derivatives, are also valued at fair value following procedures approved by the Trustees. Such valuations and procedures are reviewed periodically by the Trustees.

The fair value of securities is generally determined as the amount that the fund could reasonably expect to realize from an orderly disposition of such securities over a reasonable period of time. By its nature, a fair value price is a good faith estimate of the value of a security in a current sale and does not reflect an actual market price, which may be different by a material amount.

Futures and options contracts: The fund may use futures and options contracts to hedge against changes in the values of securities the fund owns or expects to purchase, or for other investment purposes. The fund may also write options on swaps or securities it owns or in which it may invest to increase its current returns.

The potential risk to the fund is that the change in value of futures and options contracts may not correspond to the change in value of the hedged instruments. In addition, losses may arise from changes in the value of the underlying instruments, if there is an illiquid secondary market for the contracts, interest or exchange rates moving unexpectedly or if the counterparty to the contract is unable to perform. With futures, there is minimal counterparty credit risk to the fund since futures are exchange traded and the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. When the contract is closed, the fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Realized gains and losses on purchased options are included in realized gains and losses on investment securities. If a written call option is exercised, the premium originally received is recorded as an addition to sales proceeds. If a written put option is exercised, the premium originally received is recorded as a reduction to the cost of investments.

Futures contracts are valued at the quoted daily settlement prices established by the exchange on which they trade. The fund and the broker agree to exchange an amount of cash equal to the daily fluctuation in the value of the futures contract. Such receipts or payments are known as “variation margin.” Exchange traded options are valued at the last sale price or, if no sales are reported, the last bid price for purchased options and the last ask price for written options. Options traded over-the-counter are valued using prices supplied by dealers. Outstanding contracts at period end are indicative of the volume of activity during the period.

Master agreements: The fund is a party to ISDA (International Swap and Derivatives Association, Inc.) Master Agreements (“Master Agreements”) with certain counterparties that govern over the counter derivative and foreign exchange contracts entered into from time to time. The Master Agreements may contain provisions regarding, among other things,


the parties’ general obligations, representations, agreements, collateral requirements, events of default and early termination. With respect to certain counterparties, in accordance with the terms of the Master Agreements, collateral posted to the fund is held in a segregated account by the fund’s custodian and with respect to those amounts which can be sold or repledged, are presented in the fund’s portfolio. Collateral pledged by the fund is segregated by the fund’s custodian and identified in The fund’s portfolio. Collateral can be in the form of cash or debt securities issued by the U.S. Government or related agencies or other securities as agreed to by the fund and the applicable counterparty. Collateral requirements are determined based on the fund’s net position with each counterparty. Termination events applicable to the fund may occur upon a decline in the fund’s net assets below a specified threshold over a certain period of time. Termination events applicable to counterparties may occur upon a decline in the counterparty’s long-term and short-term credit ratings below a specified level. In each case, upon occurrence, the other party may elect to terminate early and cause settlement of all derivative and foreign exchange contracts outstanding, including the payment of any losses and costs resulting from such early termination, as reasonably determined by the terminating party. Any decision by one or more of the fund’s counterparties to elect early termination could impact the fund's future derivative activity.

At July 31, 2009, the fund had no net unrealized losses on derivative contracts subject to the Master Agreements.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements ("SFAS 157"). SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. While the adoption of SFAS 157 does not have a material effect on the fund’s net asset value, it does require additional disclosures about fair value measurements. SFAS 157 establishes a three-level hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of the fund’s investments. The three levels are defined as follows:

Level 1 – Valuations based on quoted prices for identical securities in active markets.

Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 – Valuations based on inputs that are unobservable and significant to the fair value measurement.

The following is a summary of the inputs used to value the fund’s net assets as of July 31, 2009:

    Valuation inputs
Investments in securities:    Level 1    Level 2  Level 3 
Common stocks:           
  Basic materials $  716,753  $  --  $  --
  Capital goods  113,526    --  -- 
  Communication services  2,091,305    --  -- 
  Consumer cyclicals  99,008    --  -- 
  Energy  1,284,354    --  -- 
  Financials  1,054,960    --  -- 
  Health care  119,280    --  -- 
  Technology  426,895    --  -- 
  Transportation  121,268    --  -- 
  Utilities and power  408,001    --  -- 
Total Common stocks    6,435,350    --  -- 
Convertible bonds and notes    --    1,918,313  -- 
Convertible preferred stocks    --    516,000  -- 
Corporate bonds and notes    --    8,900,359  -- 
Purchased options outstanding    --    35,513  -- 
Senior loans    --    1,400,186  -- 
Short-term investments    9,292,271    --  -- 
 
  Totals by level  $15,727,621    $12,770,371  $-- 
 
 
    Level 1    Level 2  Level 3 
Other financial instruments:    $--    $(61,410)  $-- 

Other financial instruments include futures, written options, TBA sale commitments, swaps and forward contracts.

Market Values of Derivative Instruments as of July 31, 2009

  Asset derivatives  Liability derivatives 
 
Derivatives not accounted for as hedging instruments under Statement 133  Market value  Market value 
Equity contracts  $35,513  $61,410 
Total  $35,513  $61,410 

For additional information regarding the fund please see the fund's most recent annual or semiannual shareholder report filed on the Securities and Exchange Commission's Web site, www.sec.gov, or visit Putnam's Individual Investor Web site at www.putnaminvestments.com


Item 2. Controls and Procedures:

(a) The registrant's principal executive officer and principal financial officer have concluded, based on their evaluation of the effectiveness of the design and operation of the registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the design and operation of such procedures are generally effective to provide reasonable assurance that information required to be disclosed by the registrant in this report is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms.

(b) Changes in internal control over financial reporting: Not applicable

Item 3. Exhibits:

Separate certifications for the principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Putnam Funds Trust

By (Signature and Title):

/s/ Janet C. Smith
Janet C. Smith
Principal Accounting Officer
Date: September 29, 2009

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By (Signature and Title):

/s/ Charles E. Porter
Charles E. Porter
Principal Executive Officer
Date: September 29, 2009

By (Signature and Title):

/s/ Steven D. Krichmar
Steven D. Krichmar
Principal Financial Officer
Date: September 29, 2009


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM N-Q
 
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT 
INVESTMENT COMPANY
 
Investment Company Act file number: (811- 07513)   
 
Exact name of registrant as specified in charter:  Putnam Funds Trust 
 
Address of principal executive offices: One Post Office Square, Boston, Massachusetts 02109 
 
Name and address of agent for service:    Beth S. Mazor, Vice President 
  One Post Office Square 
  Boston, Massachusetts 02109 
 
Copy to:    John W. Gerstmayr, Esq. 
  Ropes & Gray LLP 
  One International Place 
  Boston, Massachusetts 02110 
 
Registrant’s telephone number, including area code:  (617) 292-1000 
 
Date of fiscal year end: April 30, 2010     
 
Date of reporting period: July 31, 2009     

Item 1. Schedule of Investments:


Putnam Equity Spectrum Fund

The fund's portfolio
7/31/09 (Unaudited)

COMMON STOCKS (70.9%)(a)     
  Shares  Value 
 
Airlines (1.3%)     
Allegiant Travel Co. (NON)  2,800  $121,268 
    121,268 
 
Banking (5.3%)     
Bank of America Corp.  6,900  102,051 
Bank of New York Mellon Corp. (The)  1,800  49,212 
JPMorgan Chase & Co.  5,400  208,710 
Wells Fargo & Co.  5,500  134,530 
    494,503 
 
Broadcasting (0.7%)     
Liberty Media Corp. - Capital Ser. A (NON)  4,200  61,236 
    61,236 
 
Cable television (8.2%)     
Cablevision Systems Corp. Class A  8,200  167,854 
DISH Network Corp. Class A (NON)  34,700  588,165 
    756,019 
 
Chemicals (6.7%)     
W.R. Grace & Co. (NON)  37,200  618,636 
    618,636 
 
Commercial and consumer services (2.4%)     
Alliance Data Systems Corp. (NON)  3,000  153,000 
Orbitz Worldwide, Inc. (NON)  24,800  64,480 
    217,480 
 
Computers (3.6%)     
Brocade Communications Systems, Inc. (NON)  26,800  210,648 
Emulex Corp. (NON)  13,500  123,255 
    333,903 
 
Consumer finance (0.8%)     
Capital One Financial Corp.  2,400  73,680 
    73,680 
 
Consumer services (--%)     
OpenTable, Inc. (NON)  55  1,634 
    1,634 
 
Financial (3.2%)     
AmeriCredit Corp. (NON)  4,800  75,312 
Leucadia National Corp. (NON)  9,000  220,500 
    295,812 
 
Health-care services (3.5%)     
DaVita, Inc. (NON)  4,900  243,530 
Sun Healthcare Group, Inc. (NON)  5,200  50,596 
WellCare Health Plans, Inc. (NON)  1,500  33,390 
    327,516 
 
Insurance (2.3%)     
American Financial Group, Inc.  8,800  214,632 
    214,632 
 
Investment banking/Brokerage (2.4%)     
Och-Ziff Capital Management Group Class A  21,200  220,904 
    220,904 
 
Lodging/Tourism (0.2%)     
Full House Resorts, Inc. (NON)  1,008  2,470 
Interstate Hotels & Resorts, Inc. (NON)  20,000  18,000 
    20,470 
 
Manufacturing (0.6%)     
Thermadyne Holdings Corp. (NON)  12,000  57,240 
    57,240 
 
Oil and gas (14.3%)     
Anadarko Petroleum Corp.  1,600  77,120 


Cabot Oil & Gas Corp. Class A    2,500  87,825 
EOG Resources, Inc.    800  59,224 
Gastar Exploration, Ltd. (NON)    17,100  10,260 
Marathon Oil Corp.    800  25,800 
PetroHawk Energy Corp. (NON)    7,700  186,956 
Pioneer Natural Resources Co.    11,800  336,889 
Plains Exploration & Production Co. (NON)    9,000  257,850 
Rosetta Resources, Inc. (NON)    4,700  48,739 
Williams Cos., Inc. (The)    9,600  160,224 
Williams Partners LP (Partnership Shares)    3,400  75,616 
      1,326,503 
 
Power producers (2.1%)       
AES Corp. (The) (NON)    15,500  198,245 
      198,245 
 
Restaurants (3.6%)       
AFC Enterprises (NON)    22,400  166,432 
Famous Dave's Of America, Inc. (NON)    25,800  168,474 
      334,906 
 
Software (0.6%)       
Red Hat, Inc. (NON)    2,600  59,358 
      59,358 
 
Technology (1.0%)       
Unisys Corp. (NON)    52,600  94,154 
      94,154 
 
Telecommunications (7.5%)       
EchoStar Corp. Class A (NON)    31,700  467,258 
NeuStar, Inc. Class A (NON)    6,000  136,080 
TerreStar Corp. (NON)    69,700  92,004 
      695,342 
 
Tobacco (0.6%)       
Lorillard, Inc.    800  58,976 
      58,976 
Total common stocks (cost $6,109,300)      $6,582,417 
 
PURCHASED OPTIONS OUTSTANDING (2.7%)(a)       
  Expiration date/  Contract  Value 
  strike price  amount   
Citigroup, Inc. (Call)  Aug-09/$5.00  36,400  $276 
S&P 500 Index Depository Receipts (SPDR Trust       
Series 1) (Put)  Sep-09/$96.00  5,000  12,357 
Saks, Inc. (Put)  Jan-10/$5.00  300,000  233,755 
Total purchased options outstanding (cost $257,320)      $246,388 
 
SHORT-TERM INVESTMENTS (28.8%)(a)       
    Principal amount/shares  Value 
Putnam Money Market Liquidity Fund (e)    2,673,028  $2,673,028 
Total short-term investments (cost $2,673,028)      $2,673,028 
 
TOTAL INVESTMENTS       
 
Total investments (cost $9,039,648) (b)      $9,501,833 


WRITTEN OPTIONS OUTSTANDING at 7/31/09 (premiums received $220,832) (Unaudited)

  Contract  Expiration date/   
  amount  strike price  Value 
Citigroup, Inc. (Put)  $36,400  Aug-09/$5.00  $66,926 
Saks, Inc. (Put)  125,000  Jan-10/$5.00  140,265 
Total      $207,191 


NOTES

(a) Percentages indicated are based on net assets of $9,282,672.

(b) The aggregate identified cost on a tax basis is $9,039,648, resulting in gross unrealized appreciation and depreciation of $576,925 and $114,740, respectively, or net unrealized appreciation of $462,185.

(NON) Non-income-producing security.

(e) The fund invested in Putnam Money Market Liquidity Fund, an open-end management investment company managed by Putnam Investment Management, LLC ("Putnam Management"), the fund's manager, an indirect wholly-owned subsidiary of Putnam Investments, LLC. Investments in Putnam Money Market Liquidity Fund are valued at its closing net asset value each business day. Income distributions earned by the fund are recorded as interest income and totaled $1,502 for the period ended July 31, 2009. During the period ended July 31, 2009, cost of purchases and proceeds of sales of investments in Putnam Money Market Liquidity Fund aggregated $8,158,369 and $5,485,341, respectively. Management fees charged to Putnam Money Market Liquidity Fund have been waived by Putnam Management.

At July 31, 2009, liquid assets totaling $2,489,000 have been designated as collateral for open options contracts.

Security valuation: Investments for which market quotations are readily available are valued at the last reported sales price on their principal exchange, or official closing price for certain markets. If no sales are reported -- as in the case of some securities traded over-the-counter -- a security is valued at its last reported bid price. Many securities markets and exchanges outside the U.S. close prior to the close of the New York Stock Exchange and therefore the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but before the close of the New York Stock Exchange. Accordingly, on certain days, the fund will fair value foreign equity securities taking into account multiple factors, including movements in the U.S. securities markets. The number of days on which fair value prices will be used will depend on market activity and it is possible that fair value prices will be used by the fund to a significant extent.

Securities quoted in foreign currencies, if any, are translated into U.S. dollars at the current exchange rate. To the extent a pricing service or dealer is unable to value a security or provides a valuation which Putnam Management does not believe accurately reflects the security's fair value, the security will be valued at fair value by Putnam Management. Certain investments, including certain restricted and illiquid securities and derivatives, are also valued at fair value following procedures approved by the Trustees. Such valuations and procedures are reviewed periodically by the Trustees.

The fair value of securities is generally determined as the amount that the fund could reasonably expect to realize from an orderly disposition of such securities over a reasonable period of time. By its nature, a fair value price is a good faith estimate of the value of a security in a current sale and does not reflect an actual market price, which may be different by a material amount.

Futures and options contracts: The fund may use futures and options contracts to hedge against changes in the values of securities the fund owns or expects to purchase, or for other investment purposes. The fund may also write options on swaps or securities it owns or in which it may invest to increase its current returns.

The potential risk to the fund is that the change in value of futures and options contracts may not correspond to the change in value of the hedged instruments. In addition, losses may arise from changes in the value of the underlying instruments, if there is an illiquid secondary market for the contracts, interest or exchange rates moving unexpectedly or if the counterparty to the contract is unable to perform. With futures, there is minimal counterparty credit risk to the fund since futures are exchange traded and the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. When the contract is closed, the fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Realized gains and losses on purchased options are included in realized gains and losses on investment securities. If a written call option is exercised, the premium originally received is recorded as an addition to sales proceeds. If a written put option is exercised, the premium originally received is recorded as a reduction to the cost of investments.

Futures contracts are valued at the quoted daily settlement prices established by the exchange on which they trade. The fund and the broker agree to exchange an amount of cash equal to the daily fluctuation in the value of the futures contract. Such receipts or payments are known as “variation margin.” Exchange traded options are valued at the last sale price or, if no sales are reported, the last bid price for purchased options and the last ask price for written options. Options traded over-the-counter are valued using prices supplied by dealers. Outstanding contracts at period end are indicative of the volume of activity during the period.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements ("SFAS 157"). SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. While the adoption of SFAS 157 does not have a material effect on the fund’s net asset value, it does require additional disclosures about fair value measurements. SFAS 157 establishes a three-level hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of the fund’s investments. The three levels are defined as follows:

Level 1 – Valuations based on quoted prices for identical securities in active markets.

Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 – Valuations based on inputs that are unobservable and significant to the fair value measurement.

The following is a summary of the inputs used to value the fund’s net assets as of July 31, 2009:

    Valuation inputs   
Investments in securities:  Level 1  Level 2  Level 3 
Common stocks:       
Basic materials  $618,636  $--  $-- 
Capital goods  57,240  --  -- 
Communication services  1,451,361  --  -- 
Consumer cyclicals  299,186  --  -- 
Consumer staples  395,516  --  -- 
Energy  1,326,503  --  -- 
Financials  1,299,531  --  -- 
Health care  327,516  --  -- 
Technology  487,415  --  -- 
Transportation  121,268  --  -- 
Utilities and power  198,245  --  -- 
Total Common stocks  6,582,417  --  -- 
Purchased options outstanding  --  246,388  -- 
Short-term investments  2,673,028  --  -- 
Totals by level  $9,255,445  $246,388  $-- 
 
  Level 1  Level 2  Level 3 
Other financial instruments:  $--  $(207,191)  $-- 

Other financial instruments include futures, written options, TBA sale commitments, swaps and forward contracts.


Market Values of Derivative Instruments as of July 31, 2009

  Asset derivatives  Liability derivatives 
 
Derivatives not accounted for as hedging instruments under Statement 133  Market value  Market value 
Equity contracts  $246,388  $207,191 
Total  $246,388  $207,191 

For additional information regarding the fund please see the fund's most recent annual or semiannual shareholder report filed on the Securities and Exchange Commission's Web site, www.sec.gov, or visit Putnam's Individual Investor Web site at www.putnaminvestments.com


Item 2. Controls and Procedures:

(a) The registrant's principal executive officer and principal financial officer have concluded, based on their evaluation of the effectiveness of the design and operation of the registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the design and operation of such procedures are generally effective to provide reasonable assurance that information required to be disclosed by the registrant in this report is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms.

(b) Changes in internal control over financial reporting: Not applicable

Item 3. Exhibits:

Separate certifications for the principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Putnam Funds Trust

By (Signature and Title):

/s/ Janet C. Smith
Janet C. Smith
Principal Accounting Officer
Date: September 29, 2009

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By (Signature and Title):

/s/ Charles E. Porter
Charles E. Porter
Principal Executive Officer
Date: September 29, 2009

By (Signature and Title):

/s/ Steven D. Krichmar
Steven D. Krichmar
Principal Financial Officer
Date: September 29, 2009