N-CSR

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES

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: Robert T. Burns, Vice President
One Post Office Square
Boston, Massachusetts 02109

Copy to:         John W. Gerstmayr, Esq.
Ropes & Gray LLP
800 Boylston Street
Boston, Massachusetts 02199-3600

Registrant’s telephone number, including area code: (617) 292-1000

Date of fiscal year end: May 31, 2013

Date of reporting period : June 1, 2012 — May 31, 2013

Item 1. Report to Stockholders:

The following is a copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Investment Company Act of 1940:

 

Putnam Dynamic
Risk Allocation
Fund

Annual report
5 | 31 | 13

Message from the Trustees	1
About the fund	2
Performance snapshot	4
Interview with your fund’s portfolio manager	5
Your fund’s performance	11
Your fund’s expenses	13
Terms and definitions	15
Other information for shareholders	16
Important notice regarding Putnam’s privacy policy	17
Financial statements	18
Federal tax information	77
About the Trustees	78
Officers	80

Consider these risks before investing: International investing involves currency, economic, and political risks. Emerging-market securities carry illiquidity and volatility risks. The fund may invest a portion of its assets in small and/or midsize companies. Such investments increase the risk of greater price fluctuations. Funds that invest in government securities are not guaranteed. Mortgage-backed securities are subject to prepayment risk and the risk that they may increase in value less when interest rates decline and decline in value more when interest rates rise. Allocation of assets among asset classes may hurt performance, and efforts to diversify risk through the use of leverage and allocation decisions may not be successful. Derivatives carry additional risks, such as the inability to terminate or sell derivatives positions and the failure of the other party to meet its obligations. Growth stocks may be more susceptible to earnings disappointments, and value stocks may fail to rebound. Bond investments are subject to interest-rate risk (the risk of bond prices falling if interest rates rise) and credit risk (the risk of an issuer defaulting on interest or principal payments). Interest-rate risk is greater for longer-term bonds, and credit risk is greater for below-investment-grade bonds. Unlike bonds, funds that invest in bonds have fees and expenses. Active trading strategies may lose money or not earn a return sufficient to cover trading and other costs. Use of leverage obtained through derivatives increases these risks by increasing investment exposure. REITs are subject to the risk of economic downturns that have an adverse impact on real estate markets. The use of short selling may result in losses if the securities appreciate in value. Commodities involve market, political, regulatory, and natural conditions risks. Stock and bond prices may fall or fail to rise over time for several reasons, including general financial market conditions and factors related to a specific issuer or industry. You can lose money by investing in the fund.

Message from the Trustees

Dear Fellow Shareholder:

Some steadiness has returned to the investing environment, as many economies around the world are either improving or stabilizing. The U.S. equity market achieved record highs in the second quarter, as the nation’s economy slowly healed. Unemployment, housing, and consumer confidence data in the United States have all improved since the beginning of the year. State finances are faring better as well, although the ultimate consequences of federal budget sequestration on state economies remain to be measured.

Against this backdrop of perceived economic progress, the Federal Reserve indicated that it may taper its monetary-easing and asset-purchasing policies. This posed challenges for markets that had become accustomed to the extraordinary programs put in place by the central bank.

Putnam’s investment teams bring astute analysis of key market and policy-related risks to the task of finding the most attractive opportunities for investors. Integrating new thinking into time-tested strategies may prove particularly beneficial as the economy moves into the next stage of the current recovery. Our fixed-income managers, in particular, are cognizant of the risks of Fed policy changes and actively manage the funds to deal with the impact of the changes. When combined with the guidance of a financial advisor, who can help ensure that your portfolio matches your individual goals and tolerance for risk, we believe Putnam’s emphasis on innovative thinking, active investing, and risk management can serve shareholders well.

We would like to extend a welcome to new shareholders of the fund and to thank you for investing with Putnam.

Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results. Share price, principal value, and return will fluctuate, and you may have a gain or a loss when you sell your shares. Performance of class A shares assumes reinvestment of distributions and does not account for taxes. Fund returns in the bar chart do not reflect a sales charge of 5.75%; had they, returns would have been lower. See pages 5 and 11–13 for additional performance information. For a portion of the periods, the fund had expense limitations, without which returns would have been lower. To obtain the most recent month-end performance, visit putnam.com. The short-term results of a relatively new fund are not necessarily indicative of its long-term prospects.

* The Putnam Dynamic Risk Allocation Blended Index is an unmanaged index administered by Putnam Management, 50% of which is the MSCI World Index (ND), 40% of which is the Barclays Global Aggregate Bond Index, and 10% of which is the S&P Goldman Sachs Commodity Index. See index descriptions on pages 15–16.

4  Dynamic Risk Allocation Fund 

Interview with your fund’s portfolio manager

Can you bring us up to date on financial market conditions during the 12-month reporting period that ended May 31, 2013?

A significant divergence occurred between the performance of equity and fixed-income markets in this annual period. Stocks in both the United States and in global markets advanced at a robust pace, well above long-term averages, while government bonds had flat results for the year as a whole. Corporate and high-yield bonds had strong positive results, but did not match the pace of equities.

This divergence represented a departure from the norm of recent years. Stocks climbed a wall of worry, as markets fretted first about the political risks in the post-election showdown over the fiscal cliff. Part of the issue was resolved by lifting U.S. tax rates, but then fears began to focus on the federal budget sequester, which started to come into effect in March. While there was a notable slowdown in gross domestic product during these months, the housing and labor market recovery continued, and underpinned both consumer spending and confidence in stocks and bonds. The continuing accommodative stance of the Fed also provided support.

Let’s turn to the fund, beginning with a reminder of its distinctive philosophy.

The portfolio invests across multiple global asset classes with a balanced philosophy, but it is not a traditional asset allocation

This comparison shows your fund’s performance in the context of broad market indexes for the 12 months ended 5/31/13. See pages 4 and 11–13 for additional fund performance information. Index descriptions can be found on pages 15–16.

Dynamic Risk Allocation Fund  5 

or balanced fund. Instead, we follow an approach called risk allocation, which aims for better risk-adjusted performance over time than a traditional balanced strategy has provided. The classic balanced formula of 60% stocks and 40% bonds has historically concentrated about 90% of its risk in equities. This meant that such funds performed like stock funds more than anything else. For investors who wanted to moderate the risk of the stock market, a balanced fund was not the answer.

With a risk allocation approach, we do not lean on equity risk, but instead spread risk across four different areas — equity, credit, inflation, and interest rates — in order to diversify sources of portfolio risk and return. We target equity risk in U.S., international, and emerging-market stocks; credit risk in high-yield bonds; inflation risk in inflation-protected securities and commodities; and interest-rate risk in government bonds. We also have strategic flexibility to adjust dynamically the amount of each risk type, rather than maintain a fixed allocation.

The portfolio also implements a moderate amount of leverage, achieved using derivatives rather than borrowing. The leverage gives us an effective tool for targeting more precisely the level of risk of a traditional balanced fund. With these tools, we believe we can achieve greater risk-adjusted

Allocations are represented as a percentage of the fund’s net assets as of 5/31/13. Short-term investments and net other assets, if any, represent the market value weights of cash, derivatives, short-term securities, and other unclassified assets in the portfolio. Summary information may differ from the portfolio schedule included in the financial statements due to the inclusion of derivative securities, any interest accruals, the exclusion of as-of trades, if any, and the use of different classifications of securities for presentation purposes. Holdings and allocations may vary over time.

The fund’s exposures exceed 100% as a result of the fund’s use of investment leverage.

6  Dynamic Risk Allocation Fund 

returns over a full market cycle than traditional balanced strategies have been able to achieve.

In general terms, how did you allocate risks in the portfolio during the period under consideration?

We have favored equity and credit risk because our analysis indicated the market was in a bull regime. A bull market regime is characterized by a slow upward trajectory for stock prices, with relatively little volatility. A bear market regime is characterized by greater volatility, including sharp drawdowns. In a bull market, we believe it is best to favor two types of risk, equity and credit, and to avoid government bonds.

Part of our reasoning for avoiding government bonds in a bull market is to keep interest-rate risk low in the portfolio. During the period, government bond yields were at low levels relative to their long-term averages. This indicated to us that there was relatively little opportunity for attractive total return in this asset class. At the same time, bonds were vulnerable to the potential risk of rising

This table shows the fund’s top 10 individual holdings and the percentage of the fund’s net assets that each represented as of 5/31/13. Short-term holdings, derivatives, and TBA commitments, if any, are excluded. Holdings may vary over time.

Dynamic Risk Allocation Fund  7 

interest rates. One of the forces keeping rates low has been the Fed’s purchasing program, which is a temporary factor. While the Fed’s program has had an impact on markets and the economy, as prudent investors we look ahead to the day when the Fed will reduce or even end its purchases, and anticipate the effects on bond prices and yields.

Which factors influenced fund performance the most during the period?

The fund had positive results, but did not keep pace with our benchmark index that reflects diverse exposure to stocks, bonds, and commodities. We emphasized equity and credit risk during the period. We considered both of these to be attractive because corporate earnings growth remained solid and because both businesses and consumers were in a strong position in terms of debt levels. At the same time we found inflation and interest-rate risks less attractive. Inflation has been well contained, and we did see attractive total return opportunities in rate risk.

What strategies helped results?

Our credit risk strategies and some of our equity strategies contributed to results. In the corporate high-yield market, default rates have remained below historical averages as corporations have not spent money in

Allocations are represented as a percentage of the fund’s net assets as of 5/31/13. Risk contribution is from Putnam research, which uses the historical standard deviation for the respective asset classes multiplied by the appropriate asset weight. Holdings and allocations may vary over time.

8  Dynamic Risk Allocation Fund 

an aggressive manner that can weaken balance sheets. We also targeted credit risk in the mortgage market, and our positions benefited from the improvement in the housing market. Within the equity strategies, U.S. small-cap stocks performed especially well for the portfolio. Reflecting on our decision to reduce interest-rate risk, the fund held an underweight position in Treasury Inflation-Protected Securities [TIPS], and this added positively to results.

What strategies detracted from performance?

Adverse results relative to the benchmark came from strategies involving U.S. stocks. Apple, one of the largest holdings, lost ground for the year even as the stock market rallied. Although we believe Apple continues to enjoy many attractive attributes and offers an attractive valuation, the market has penalized the stock because of impatience about new product innovations.

The closing month of the period was especially challenging. The fund’s positions in U.S. equity options, a type of derivative implemented to hedge market risk, had a negative impact. This strategy typically underperforms when the stock market rallies strongly but with little volatility, and that’s how stocks performed in May. Despite this disappointment, we still believe the options strategy can be an effective way to insulate the fund from market volatility.

What is your outlook for the markets and for the fund?

We generally favor continuing the strategies that we have had in place. Equity and credit risk still appear more attractive to us than interest-rate or inflation risk. I would note that the stock market rally has been viewed with wariness by investors, and this leaves some potential for a pullback. The memories of events like the U.S. banking crisis, Europe’s debt crisis, or even of natural catastrophes like

A word about derivatives

Derivatives are an increasingly common type of investment instrument, the performance of which is derived from an underlying security, index, currency, or other area of the capital markets. Derivatives employed by the fund’s managers generally serve one of two main purposes: to implement a strategy that may be difficult or more expensive to invest in through traditional securities, or to hedge unwanted risk associated with a particular position.

For example, the fund’s managers might use forward currency contracts to capitalize on an anticipated change in exchange rates between two currencies. This approach would require a significantly smaller outlay of capital than purchasing traditional bonds denominated in the underlying currencies. In another example, the managers may identify a bond that they believe is undervalued relative to its risk of default, but may seek to reduce the interest-rate risk of that bond by using interest-rate swaps, a derivative through which two parties “swap” payments based on the movement of certain rates. In other examples, the managers may use options and futures contracts to hedge against a variety of risks by establishing a combination of long and short exposures to specific equity markets or sectors.

Like any other investment, derivatives may not appreciate in value and may lose money. Derivatives may amplify traditional investment risks through the creation of leverage and may be less liquid than traditional securities. And because derivatives typically represent contractual agreements between two financial institutions, derivatives entail “counterparty risk,” which is the risk that the other party is unable or unwilling to pay. Putnam monitors the counterparty risks we assume. For example, Putnam may enter into collateral agreements that require the counterparties to post collateral on a regular basis to cover their obligations to the fund.

Dynamic Risk Allocation Fund  9 

Japan’s earthquake and tsunami in 2011 have led investors to focus on risk. In recent months markets have shown greater resilience, but there still remains concern about what could happen if the Fed begins to withdraw its policy support.

We believe our risk allocation portfolio is well prepared for volatility should it return to markets. The fund has exposure to a variety of risks, but no risk dominates in the way that equity risk might dominate a traditional balanced portfolio. In addition to the four major risk types in the portfolio, we have strategies like the equity options position that are designed to help the fund weather stormy markets. We believe the portfolio is outfitted for the most likely scenario of continued progress for markets, and for the possibility of short-term setbacks.

Bob, thanks for commenting on the fund today.

The views expressed in this report are exclusively those of Putnam Management and are subject to change. They are not meant as investment advice.

Please note that the holdings discussed in this report may not have been held by the fund for the entire period. Portfolio composition is subject to review in accordance with the fund’s investment strategy and may vary in the future. Current and future portfolio holdings are subject to risk.

Portfolio Manager Robert J. Kea is Co-Head of Global Asset Allocation at Putnam. He holds an M.B.A. from Bentley College and a B.A. from the University of Massachusetts, Amherst. A CFA charterholder, he joined Putnam in 1989 and has been in the investment industry since 1988.

In addition to Bob Kea, your fund’s portfolio managers are James A. Fetch; Joshua B. Kutin, CFA; Robert J. Schoen; and Jason R. Vaillancourt, CFA.

IN THE NEWS

The World Bank has downgraded its outlook for global economic growth, projecting a somewhat slower expansion in 2013 due to Europe’s deeper-than-expected recession and a recent deceleration in emerging market economies. In its twice-yearly Global Economic Prospects report, the World Bank forecast that global GDP will increase 2.2% this year, a cut to its January outlook of 2.4%. This pace would constitute an approximate continuation of 2012’s moderate growth pace of 2.3%. The world’s large developing economies, such as Brazil, China, India, and Russia, continue to experience less rapid growth than they did before the 2008 global financial crisis and will likely need to stay focused on structural reforms to maintain expansion. China’s economy, in particular, is decelerating, with experts now anticipating that the world’s second-largest economy could experience its slowest growth rate in 23 years. In its report, the World Bank said debt-related uncertainties surrounding the eurozone and fiscal questions in the United States should have less impact on global economic growth in coming years.

10  Dynamic Risk Allocation Fund 

Your fund’s performance

This section shows your fund’s performance, price, and distribution information for periods ended May 31, 2013, the end of its most recent fiscal year. In accordance with regulatory requirements for mutual funds, we also include performance information as of the most recent calendar quarter-end and expense information taken from the fund’s current prospectus. Performance should always be considered in light of a fund’s investment strategy. Data represent past performance. Past performance does not guarantee future results. More recent returns may be less or more than those shown. Investment return and principal value will fluctuate, and you may have a gain or a loss when you sell your shares. Performance information does not reflect any deduction for taxes a shareholder may owe on fund distributions or on the redemption of fund shares. For the most recent month-end performance, please visit the Individual Investors section at putnam.com or call Putnam at 1-800-225-1581. Class R, class R5, class R6, and class Y shares are not available to all investors. See the Terms and Definitions section in this report for definitions of the share classes offered by your fund.

Fund performance Total return for periods ended 5/31/13

	Class A		Class B		Class C		Class M		Class R	Class R5	Class R6	Class Y
(inception dates)	(9/19/11)		(9/19/11)		(9/19/11)		(9/19/11)		(9/19/11)	(7/2/12)	(7/2/12)	(9/19/11)
	Before	After					Before	After	Net	Net	Net	Net
	sales	sales	Before	After	Before	After	sales	sales	asset	asset	asset	asset
	charge	charge	CDSC	CDSC	CDSC	CDSC	charge	charge	value	value	value	value
Life of fund	12.03%	5.59%	10.65%	6.65%	10.62%	10.62%	11.16%	7.27%	11.56%	12.70%	12.75%	12.56%
Annual average	6.92	3.25	6.14	3.86	6.12	6.12	6.43	4.22	6.65	7.29	7.32	7.21
1 year	7.97	1.76	7.22	2.22	7.18	6.18	7.52	3.75	7.70	8.34	8.39	8.21

Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results. After-sales-charge returns for class A and M shares reflect the deduction of the maximum 5.75% and 3.50% sales charge, respectively, levied at the time of purchase. Class B share returns after contingent deferred sales charge (CDSC) reflect the applicable CDSC, which is 5% in the first year, declining over time to 1% in the sixth year, and is eliminated thereafter. Class C share returns after CDSC reflect a 1% CDSC for the first year that is eliminated thereafter. Class R, R5, R6, and Y shares have no initial sales charge or CDSC. Performance for class R5 and R6 shares prior to their inception is derived from the historical performance of class Y shares and has not been adjusted for the lower investor servicing fees applicable to class R5 and R6 shares; had it, returns would have been higher. For a portion of the periods, the fund had expense limitations, without which returns would have been lower. The short-term results of a relatively new fund are not necessarily indicative of its long-term prospects.

Comparative index returns For periods ended 5/31/13

		Lipper Global Flexible
	Putnam Dynamic Risk	Portfolio Funds
	Allocation Blended Index	category average*
Life of fund	14.90%	15.01%
Annual average	8.52	8.49
1 year	13.31	14.00

Index and Lipper results should be compared with fund performance before sales charge, before CDSC, or at net asset value.

* Over the 1-year and life-of-fund periods ended 5/31/13, there were 408 and 341 funds, respectively, in this Lipper category.

Dynamic Risk Allocation Fund  11 

Past performance does not indicate future results. At the end of the same time period, a $10,000 investment in the fund’s class B shares would have been valued at $11,065 ($10,665 after contingent deferred sales charge). A $10,000 investment in the fund’s class C shares would have been valued at $11,062, and no contingent deferred sales charges would apply. A $10,000 investment in the fund’s class M shares ($9,650 after sales charge) would have been valued at $10,727. A $10,000 investment in the fund’s class R, R5, R6, and Y shares would have been valued at $11,156, $11,270, $11,275, and $11,256, respectively.

Fund price and distribution information For the 12-month period ended 5/31/13

Distributions	Class A		Class B	Class C	Class M		Class R	Class R5	Class R6	Class Y
Number	1		1	1	1		1	1	1	1
Income	$0.195		$0.177	$0.182	$0.087		$0.197	$0.204	$0.209	$0.221
Capital gains
Long-term gains	0.038		0.038	0.038	0.038		0.038	0.038	0.038	0.038
Short-term gains	0.194		0.194	0.194	0.194		0.194	0.194	0.194	0.194
Total	$0.427		$0.409	$0.414	$0.319		$0.429	$0.436	$0.441	$0.453
	Before	After	Net	Net	Before	After	Net	Net	Net	Net
	sales	sales	asset	asset	sales	sales	asset	asset	asset	asset
Share value	charge	charge	value	value	charge	charge	value	value	value	value
5/31/12	$10.24	$10.86	$10.20	$10.19	$10.21	$10.58	$10.23	—	—	$10.26
7/2/12*	—	—	—	—	—	—	—	$10.56	$10.56	—
5/31/13	10.63	11.28	10.53	10.51	10.66	11.05	10.59	$10.68	$10.68	10.65

The classification of distributions, if any, is an estimate. Before-sales-charge share value and current dividend for class A and M shares, if applicable, do not take into account any sales charge levied at the time of purchase After-sales-charge share value, current dividend rate, and current 30-day SEC yield, if applicable, are calculated assuming that the maximum sales charge (5.75% for class A shares and 3.50% for class M shares) was levied at time of purchase. Final distribution information will appear on your year-end tax forms.

* Inception date of class R5 and class R6 shares.

12  Dynamic Risk Allocation Fund 

Fund performance as of most recent calendar quarter
Total return for periods ended 6/30/13

Class A

Class B

Class C

Class M

Class R

Class R5

Class R6

Class Y

(inception dates)

(9/19/11)

(9/19/11)

(9/19/11)

(9/19/11)

(9/19/11)

(7/2/12)

(7/2/12)

(9/19/11)

Before

After

Before

After

Net

Net

Net

Net

sales

sales

Before

After

Before

After

sales

sales

asset

asset

asset

asset

charge

charge

CDSC

CDSC

CDSC

CDSC

charge

charge

value

value

value

value

Life of fund

8.55%

2.31%

7.07%

3.07%

7.14%

7.14%

7.62%

3.85%

8.09%

9.11%

9.27%

9.07%

Annual average

4.72

1.29

3.92

1.72

3.95

3.95

4.21

2.15

4.47

5.02

5.11

5.00

1 year

2.12

–3.75

1.38

–3.51

1.42

0.45

1.60

–1.96

1.95

2.40

2.54

2.36

See the discussion following the Fund performance table on page 11 for information about the calculation of fund performance.

Your fund’s expenses

As a mutual fund investor, you pay ongoing expenses, such as management fees, distribution fees (12b-1 fees), and other expenses. In the most recent six-month period, your fund’s expenses were limited; had expenses not been limited, they would have been higher. Using the following information, you can estimate how these expenses affect your investment and compare them with the expenses of other funds. You may also pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial representative.

Expense ratios

	Class A	Class B	Class C	Class M	Class R	Class R5	Class R6	Class Y
Net expenses for the fiscal year
ended 5/31/12*	1.41%	2.16%	2.16%	1.91%	1.66%	1.16%‡	1.16%‡	1.16%
Total annual operating expenses for
the fiscal year ended 5/31/12	1.86%	2.61%	2.61%	2.36%	2.11%	1.58%‡	1.48%‡	1.61%
Annualized expense ratio for the
six-month period ended 5/31/13†	1.40%	2.15%	2.15%	1.90%	1.65%	1.15%	1.10%	1.15%

Fiscal-year expense information in this table is taken from the most recent prospectus, is subject to change, and may differ from that shown for the annualized expense ratio and in the financial highlights of this report because it includes an impact of 0.01% in fees and expenses of acquired funds. Expenses are shown as a percentage of average net assets.

* Reflects Putnam Management’s contractual obligation to limit expenses through 9/30/13.

† For the fund’s most recent fiscal half year; may differ from expense ratios based on one-year data in the financial highlights.

‡ Other expenses are based on expenses of class A shares for the fund’s last fiscal year, adjusted to reflect the lower investor servicing fees applicable to class R5 and R6 shares

Dynamic Risk Allocation Fund  13 

Expenses per $1,000

The following table shows the expenses you would have paid on a $1,000 investment in the fund from December 1, 2012, to May 31, 2013. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.

	Class A	Class B	Class C	Class M	Class R	Class R5	Class R6	Class Y
Expenses paid per $1,000*†	$6.98	$10.70	$10.70	$9.46	$8.22	$5.74	$5.49	$5.73
Ending value (after expenses)	$999.60	$996.10	$995.60	$997.00	$998.00	$1,001.40	$1,001.90	$1,000.20

* Expenses for each share class are calculated using the fund’s annualized expense ratio for each class, which represents the ongoing expenses as a percentage of average net assets for the six months ended 5/31/13. The expense ratio may differ for each share class.

† Expenses are calculated by multiplying the expense ratio by the average account value for the period; then multiplying the result by the number of days in the period; and then dividing that result by the number of days in the year.

Estimate the expenses you paid

To estimate the ongoing expenses you paid for the six months ended May 31, 2013, use the following calculation method. To find the value of your investment on December 1, 2012, call Putnam at 1-800-225-1581.

Compare expenses using the SEC’s method

The Securities and Exchange Commission (SEC) has established guidelines to help investors assess fund expenses. Per these guidelines, the following table shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total costs) of investing in the fund with those of other funds. All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.

	Class A	Class B	Class C	Class M	Class R	Class R5	Class R6	Class Y
Expenses paid per $1,000*†	$7.04	$10.80	$10.80	$9.55	$8.30	$5.79	$5.54	$5.79
Ending value (after expenses)	$1,017.95	$1,014.21	$1,014.21	$1,015.46	$1,016.70	$1,019.20	$1,019.45	$1,019.20

* Expenses for each share class are calculated using the fund’s annualized expense ratio for each class, which represents the ongoing expenses as a percentage of average net assets for the six months ended 5/31/13. The expense ratio may differ for each share class.

† Expenses are calculated by multiplying the expense ratio by the average account value for the period; then multiplying the result by the number of days in the period; and then dividing that result by the number of days in the year.

14  Dynamic Risk Allocation Fund 

Terms and definitions

Important terms

Total return shows how the value of the fund’s shares changed over time, assuming you held the shares through the entire period and reinvested all distributions in the fund.

Before sales charge, or net asset value, is the price, or value, of one share of a mutual fund, without a sales charge. Before-sales-charge figures fluctuate with market conditions, and are calculated by dividing the net assets of each class of shares by the number of outstanding shares in the class.

After sales charge is the price of a mutual fund share plus the maximum sales charge levied at the time of purchase. After-sales-charge performance figures shown here assume the 5.75% maximum sales charge for class A shares and 3.50% for class M shares.

Contingent deferred sales charge (CDSC) is generally a charge applied at the time of the redemption of class B or C shares and assumes redemption at the end of the period. Your fund’s class B CDSC declines over time from a 5% maximum during the first year to 1% during the sixth year. After the sixth year, the CDSC no longer applies. The CDSC for class C shares is 1% for one year after purchase.

Share classes

Class A shares are generally subject to an initial sales charge and no CDSC (except on certain redemptions of shares bought without an initial sales charge).

Class B shares are not subject to an initial sales charge. They may be subject to a CDSC.

Class C shares are not subject to an initial sales charge and are subject to a CDSC only if the shares are redeemed during the first year.

Class M shares have a lower initial sales charge and a higher 12b-1 fee than class A shares and no CDSC (except on certain redemptions of shares bought without an initial sales charge).

Class R shares are not subject to an initial sales charge or CDSC and are available only to certain defined contribution plans.

Class R5 shares and class R6 shares are not subject to an initial sales charge or CDSC, and carry no 12b-1 fee. They are only available to employer-sponsored retirement plans.

Class Y shares are not subject to an initial sales charge or CDSC, and carry no 12b-1 fee. They are generally only available to corporate and institutional clients and clients in other approved programs.

Comparative indexes

Barclays Global Aggregate Bond Index is an unmanaged index of global investment-grade fixed-income securities.

Barclays U.S. Aggregate Bond Index is an unmanaged index of U.S. investment-grade fixed-income securities.

BofA Merrill Lynch U.S. 3-Month Treasury Bill Index is an unmanaged index that seeks to measure the performance of U.S. Treasury bills available in the marketplace.

MSCI EAFE Index (ND) is an unmanaged index of equity securities from developed countries in Western Europe, the Far East, and Australasia.

MSCI World Index (ND) is an unmanaged index of equity securities from developed countries.

Putnam Dynamic Risk Allocation Blended Index is a benchmark administered by Putnam Management, comprising 50% MSCI World Index (ND), 40% Barclays Global Aggregate Bond Index, and 10% S&P Goldman Sachs Commodity Index.

Dynamic Risk Allocation Fund  15 

S&P 500 Index is an unmanaged index of common stock performance.

S&P Goldman Sachs Commodity Index is a composite index of commodity sector returns that represents a broadly diversified, unleveraged, long-only position in commodity futures.

Indexes assume reinvestment of all distributions and do not account for fees. Securities and performance of a fund and an index will differ. You cannot invest directly in an index.

Lipper is a third-party industry-ranking entity that ranks mutual funds. Its rankings do not reflect sales charges. Lipper rankings are based on total return at net asset value relative to other funds that have similar current investment styles or objectives as determined by Lipper. Lipper may change a fund’s category assignment at its discretion. Lipper category averages reflect performance trends for funds within a category.

Other information for shareholders

Proxy voting

Putnam is committed to managing our mutual funds in the best interests of our shareholders. The Putnam funds’ proxy voting guidelines and procedures, as well as information regarding how your fund voted proxies relating to portfolio securities during the 12-month period ended June 30, 2012, are available in the Individual Investors section of putnam.com, and on the Securities and Exchange Commission (SEC) website, www.sec.gov. If you have questions about finding forms on the SEC’s website, you may call the SEC at 1-800-SEC-0330. You may also obtain the Putnam funds’ proxy voting guidelines and procedures at no charge by calling Putnam’s Shareholder Services at 1-800-225-1581.

Fund portfolio holdings

The fund will file a complete schedule of its portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Shareholders may obtain the fund’s Forms N-Q on the SEC’s website at www.sec.gov. In addition, the fund’s Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. You may call the SEC at 1-800-SEC-0330 for information about the SEC’s website or the operation of the Public Reference Room.

Trustee and employee fund ownership

Putnam employees and members of the Board of Trustees place their faith, confidence, and, most importantly, investment dollars in Putnam mutual funds. As of May 31, 2013, Putnam employees had approximately $385,000,000 and the Trustees had approximately $92,000,000 invested in Putnam mutual funds. These amounts include investments by the Trustees’ and employees’ immediate family members as well as investments through retirement and deferred compensation plans.

16  Dynamic Risk Allocation Fund 

Important notice regarding Putnam’s privacy policy

In order to conduct business with our shareholders, we must obtain certain personal information such as account holders’ names, addresses, Social Security numbers, and dates of birth. Using this information, we are able to maintain accurate records of accounts and transactions.

It is our policy to protect the confidentiality of our shareholder information, whether or not a shareholder currently owns shares of our funds. In particular, it is our policy not to sell information about you or your accounts to outside marketing firms. We have safeguards in place designed to prevent unauthorized access to our computer systems and procedures to protect personal information from unauthorized use.

Under certain circumstances, we must share account information with outside vendors who provide services to us, such as mailings and proxy solicitations. In these cases, the service providers enter into confidentiality agreements with us, and we provide only the information necessary to process transactions and perform other services related to your account. Finally, it is our policy to share account information with your financial representative, if you’ve listed one on your Putnam account.

Dynamic Risk Allocation Fund  17 

Financial statements

These sections of the report, as well as the accompanying Notes, preceded by the Report of Independent Registered Public Accounting Firm, constitute the fund’s financial statements.

The fund’s portfolio lists all the fund’s investments and their values as of the last day of the reporting period. Holdings are organized by asset type and industry sector, country, or state to show areas of concentration and diversification.

Statement of assets and liabilities shows how the fund’s net assets and share price are determined. All investment and non-investment assets are added together. Any unpaid expenses and other liabilities are subtracted from this total. The result is divided by the number of shares to determine the net asset value per share, which is calculated separately for each class of shares. (For funds with preferred shares, the amount subtracted from total assets includes the liquidation preference of preferred shares.)

Statement of operations shows the fund’s net investment gain or loss. This is done by first adding up all the fund’s earnings — from dividends and interest income — and subtracting its operating expenses to determine net investment income (or loss). Then, any net gain or loss the fund realized on the sales of its holdings — as well as any unrealized gains or losses over the period — is added to or subtracted from the net investment result to determine the fund’s net gain or loss for the fiscal year.

Statement of changes in net assets shows how the fund’s net assets were affected by the fund’s net investment gain or loss, by distributions to shareholders, and by changes in the number of the fund’s shares. It lists distributions and their sources (net investment income or realized capital gains) over the current reporting period and the most recent fiscal year-end. The distributions listed here may not match the sources listed in the Statement of operations because the distributions are determined on a tax basis and may be paid in a different period from the one in which they were earned.

Financial highlights provide an overview of the fund’s investment results, per-share distributions, expense ratios, net investment income ratios, and portfolio turnover in one summary table, reflecting the five most recent reporting periods. In a semiannual report, the highlights table also includes the current reporting period.

18  Dynamic Risk Allocation Fund 

Report of Independent Registered Public Accounting Firm

The Board of Trustees and Shareholders
Putnam Funds Trust:

We have audited the accompanying statement of assets and liabilities of Putnam Dynamic Risk Allocation Fund (the fund), a series of Putnam Funds Trust, including the fund’s portfolio, as of May 31, 2013, and the related statement of operations for the year then ended, and the statements of changes in net assets and the financial highlights for each of the years or periods in the period from September 19, 2011 (commencement of operations) through May 31, 2013. These financial statements and financial highlights are the responsibility of the fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of May 31, 2013, by correspondence with the custodian and brokers or by other appropriate auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Putnam Dynamic Risk Allocation Fund as of May 31, 2013, the results of its operations, the changes in its net assets and the financial highlights for the periods specified in the first paragraph above, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts
July 16, 2013

Dynamic Risk Allocation Fund  19 

The fund’s portfolio 5/31/13

COMMON STOCKS (38.2%)*	Shares	Value
Basic materials (1.7%)
American Vanguard Corp.	398	$12,123
Assa Abloy AB Class B (Sweden)	4,078	162,573
Axiall Corp.	549	23,689
BASF SE (Germany)	4,358	425,835
Bemis Co., Inc.	3,239	126,807
BHP Billiton PLC (United Kingdom)	5,094	147,410
BHP Billiton, Ltd. (Australia)	8,649	281,861
Buckeye Technologies, Inc.	252	9,392
Cambrex Corp. †	1,798	24,740
Chemtura Corp. †	1,603	36,757
Eagle Materials, Inc.	145	10,694
Evraz PLC (United Kingdom)	50,390	102,755
Horsehead Holding Corp. †	1,867	21,489
Innophos Holdings, Inc.	477	24,127
Innospec, Inc.	453	18,587
International Flavors & Fragrances, Inc.	2,287	183,623
KapStone Paper and Packaging Corp.	645	18,711
Koninklijke Boskalis Westminster NV (Netherlands)	2,819	111,658
Koppers Holdings, Inc.	337	13,874
Kraton Performance Polymers, Inc. †	531	11,013
L.B. Foster Co. Class A	175	7,754
Landec Corp. †	1,124	15,781
Louisiana-Pacific Corp. †	452	7,942
LSB Industries, Inc. †	1,357	45,826
Minerals Technologies, Inc.	175	7,455
Nitto Denko Corp. (Japan)	4,000	238,814
NN, Inc. †	1,364	12,631
OM Group, Inc. †	453	13,291
Packaging Corp. of America	3,432	168,168
PPG Industries, Inc.	2,701	414,901
Rio Tinto PLC (United Kingdom)	4,913	211,979
Rio Tinto, Ltd. (Australia)	2,620	135,973
S&W Seed Co. †	1,195	10,325
Sherwin-Williams Co. (The)	1,966	370,650
Sigma-Aldrich Corp.	1,396	116,789
Sumitomo Metal Mining Co., Ltd. (Japan)	9,000	113,335
Syngenta AG (Switzerland)	441	173,050
Trex Co., Inc. †	490	27,229
Tronox, Ltd. Class A	399	9,209
voestalpine AG (Austria)	4,516	148,298
W.R. Grace & Co. †	93	7,859
Wendel SA (France)	1,222	134,131
4,159,108
Capital goods (1.6%)
ABB, Ltd. (Switzerland)	8,423	183,408
Alliant Techsystems, Inc.	270	21,200
Altra Holdings, Inc.	1,002	28,868

20   Dynamic Risk Allocation Fund 

COMMON STOCKS (38.2%)* cont.	Shares	Value
Capital goods cont.
AZZ, Inc.	278	$11,531
Ball Corp.	4,272	184,380
Boeing Co. (The)	2,903	287,455
Chart Industries, Inc. †	350	34,048
Chase Corp.	589	11,633
DXP Enterprises, Inc. †	186	10,987
European Aeronautic Defence and Space Co. NV (France)	6,007	341,986
Franklin Electric Co., Inc.	674	22,788
Generac Holdings, Inc.	560	22,680
General Dynamics Corp.	3,880	299,148
Great Lakes Dredge & Dock Corp.	1,253	10,400
Greenbrier Companies, Inc. †	1,191	27,929
HEICO Corp.	190	9,610
Hyster-Yale Materials Holdings, Inc.	85	5,253
Hyster-Yale Materials Holdings, Inc. Class B F	59	3,646
IHI Corp. (Japan)	34,000	124,769
IMI PLC (United Kingdom)	9,386	183,585
JGC Corp. (Japan)	5,000	166,860
Kadant, Inc.	561	16,785
Kawasaki Heavy Industries, Ltd. (Japan)	41,000	138,175
Lockheed Martin Corp.	1,870	197,902
Miller Industries, Inc.	714	11,688
NACCO Industries, Inc. Class A	85	4,762
Northrop Grumman Corp.	3,275	269,827
Raytheon Co.	4,332	288,684
Rockwell Collins, Inc.	1,676	108,521
Roper Industries, Inc.	1,399	173,784
Schindler Holding AG (Switzerland)	1,103	160,312
Singapore Technologies Engineering, Ltd. (Singapore)	47,000	149,673
Standard Motor Products, Inc.	987	33,361
Standex International Corp.	248	12,938
Stoneridge, Inc. †	1,668	18,698
TriMas Corp. †	1,086	35,024
United Technologies Corp.	2,681	254,427
Valmont Industries, Inc.	82	12,491
Vinci SA (France)	2,932	148,503
4,027,719
Communication services (1.3%)
Arris Group, Inc. †	486	7,353
Aruba Networks, Inc. †	333	4,975
AT&T, Inc.	12,720	445,073
BroadSoft, Inc. †	100	2,772
BT Group PLC (United Kingdom)	34,961	159,609
CalAmp Corp. †	986	12,986
CenturyLink, Inc.	5,305	181,166
Deutsche Telekom AG (Germany) †	11,385	130,128
EchoStar Corp. Class A †	2,134	84,741
France Telecom SA (France)	10,803	109,768

Dynamic Risk Allocation Fund  21 

COMMON STOCKS (38.2%)* cont.	Shares	Value
Communication services cont.
HSN, Inc.	151	$8,590
IAC/InterActiveCorp.	4,811	233,237
InterDigital, Inc.	59	2,713
InterXion Holding NV (Netherlands) †	447	12,270
Loral Space & Communications, Inc.	234	14,091
NeuStar, Inc. Class A †	427	20,692
NTT DoCoMo, Inc. (Japan)	95	140,334
SBA Communications Corp. Class A †	1,421	106,959
Tele2 AB ((Redemption Shares)) (Sweden) † F	6,640	28,070
Tele2 AB Class B (Sweden)	6,640	82,970
Telefonica SA (Spain)	9,991	136,830
Telenor ASA (Norway)	6,328	132,429
Telstra Corp., Ltd. (Australia)	36,763	166,290
USA Mobility, Inc.	755	10,177
Verizon Communications, Inc.	15,887	770,202
Vodafone Group PLC (United Kingdom)	49,968	144,805
3,149,230
Conglomerates (0.7%)
3M Co.	7,195	793,393
Danaher Corp.	6,893	426,125
General Electric Co.	12,234	285,297
Marubeni Corp. (Japan)	10,000	69,353
Siemens AG (Germany)	2,626	279,097
1,853,265
Consumer cyclicals (5.6%)
Adidas AG (Germany)	1,154	125,304
Advance Auto Parts, Inc.	1,334	108,748
Amazon.com, Inc. †	3,019	812,202
ANN, Inc. †	758	23,255
AutoZone, Inc. †	563	230,171
Babcock International Group PLC (United Kingdom)	7,940	139,353
Bayerische Motoren Werke (BMW) AG (Germany)	1,438	137,478
Belo Corp. Class A	4,685	52,566
Big Lots, Inc. †	626	21,315
Blyth, Inc.	858	12,021
Booz Allen Hamilton Holding Corp.	801	13,969
Brunswick Corp.	207	6,949
Buckle, Inc. (The)	215	11,498
Bureau Veritas SA (France)	1,113	129,029
Carmike Cinemas, Inc. †	685	12,138
Cie Financiere Richemont SA (Switzerland)	1,292	113,561
Cie Generale des Etablissements Michelin (France)	1,727	150,022
Compass Group PLC (United Kingdom)	9,712	127,466
Continental AG (Germany)	1,091	143,924
Cooper Tire & Rubber Co.	1,266	32,713
Corporate Executive Board Co. (The)	141	8,628
Crocs, Inc. †	531	9,367
Daihatsu Motor Co., Ltd. (Japan)	6,000	127,423
Deckers Outdoor Corp. †	145	7,784

22   Dynamic Risk Allocation Fund 

COMMON STOCKS (38.2%)* cont.	Shares	Value
Consumer cyclicals cont.
Deluxe Corp.	948	$35,455
Demand Media, Inc. †	450	3,857
Destination Maternity Corp.	1,008	25,109
Dillards, Inc. Class A	1,893	174,667
Dollar General Corp. †	3,072	162,202
Dollar Tree, Inc. †	3,681	176,835
Ecolab, Inc.	5,527	466,866
Equifax, Inc.	1,873	114,066
Experian Group, Ltd. (United Kingdom)	7,457	136,928
Francesca’s Holdings Corp. †	360	10,278
Fuji Heavy Industries, Ltd. (Japan)	10,000	224,571
G&K Services, Inc. Class A	288	13,913
GameStop Corp. Class A	556	18,437
Genesco, Inc. †	375	25,343
Global Cash Access Holdings, Inc. †	1,260	8,316
Green Dot Corp. Class A †	599	10,764
Harbinger Group, Inc. †	1,349	11,628
Hino Motors, Ltd. (Japan)	12,000	170,532
HMS Holdings Corp. †	314	7,819
Home Depot, Inc. (The)	12,206	960,124
Host Hotels & Resorts, Inc. R	18,628	331,392
Isuzu Motors, Ltd. (Japan)	33,000	246,348
ITV PLC (United Kingdom)	69,499	137,929
KAR Auction Services, Inc.	692	16,227
Kimberly-Clark Corp.	5,826	564,132
La-Z-Boy, Inc.	1,696	31,325
Liquidity Services, Inc. †	328	13,123
Lumber Liquidators Holdings, Inc. †	96	7,883
Macy’s, Inc.	2,409	116,451
Marcus Corp.	1,244	15,985
MasterCard, Inc. Class A	1,520	866,780
MAXIMUS, Inc.	105	7,836
McGraw-Hill Cos., Inc. (The)	3,958	215,909
MGM China Holdings, Ltd. (Hong Kong)	73,200	195,140
Mitsubishi Motors Corp. (Japan) †	110,000	169,547
MSC Industrial Direct Co., Inc. Class A	854	70,600
Namco Bandai Holdings, Inc. (Japan)	6,800	109,702
Navistar International Corp. †	463	16,608
Next PLC (United Kingdom)	4,254	296,985
Nu Skin Enterprises, Inc. Class A	368	21,638
O’Reilly Automotive, Inc. †	1,825	198,761
Omnicom Group, Inc.	4,017	249,576
OPAP SA (Greece)	10,095	83,311
Paychex, Inc.	9,311	346,649
Perry Ellis International, Inc.	963	20,329
PetSmart, Inc.	1,865	125,888
Pier 1 Imports, Inc.	273	6,331
Priceline.com, Inc. †	609	489,593

Dynamic Risk Allocation Fund  23 

COMMON STOCKS (38.2%)* cont.	Shares	Value
Consumer cyclicals cont.
Randstad Holding NV (Netherlands)	1,316	$55,838
ReachLocal, Inc. †	834	11,593
Ross Stores, Inc.	3,099	199,266
Ryland Group, Inc. (The)	779	35,273
Ryman Hospitality Properties R	3,474	132,915
Scania AB Class B (Sweden)	6,548	145,351
Scripps Networks Interactive Class A	1,622	109,258
Select Comfort Corp. †	434	9,630
Sinclair Broadcast Group, Inc. Class A	1,363	36,842
Six Flags Entertainment Corp.	83	6,189
SJM Holdings, Ltd. (Hong Kong)	62,000	168,689
Sonic Automotive, Inc. Class A	2,811	64,006
Suzuki Motor Corp. (Japan)	8,200	199,618
Swatch Group AG (The) (Switzerland)	232	131,704
Swatch Group AG (The) (Switzerland)	1,328	130,272
Target Corp.	7,435	516,733
Tempur-Pedic International, Inc. †	242	10,232
Tile Shop Holdings, Inc. †	554	14,182
Time Warner, Inc.	10,669	622,750
TiVo, Inc. †	551	7,130
Towers Watson & Co. Class A	1,105	85,836
Town Sports International Holdings, Inc.	1,025	11,296
Toyota Motor Corp. (Japan)	2,000	117,975
Tractor Supply Co.	1,310	146,694
ValueClick, Inc. †	746	19,650
Verisk Analytics, Inc. Class A †	2,268	133,404
Viacom, Inc. Class B	6,453	425,188
VOXX International Corp. †	1,847	20,539
Wal-Mart Stores, Inc.	610	45,652
13,900,277
Consumer staples (3.9%)
AFC Enterprises †	893	32,559
Ajinomoto Co., Inc. (Japan)	9,000	123,671
Altria Group, Inc.	15,205	548,901
Angie’s List, Inc. †	274	6,428
Anheuser-Busch InBev NV (Belgium)	1,827	168,412
Associated British Foods PLC (United Kingdom)	6,053	165,248
Avis Budget Group, Inc. †	1,255	41,616
Barrett Business Services, Inc.	371	21,640
Beacon Roofing Supply, Inc. †	552	22,753
Bright Horizons Family Solutions, Inc. †	382	13,771
Brinker International, Inc.	823	32,270
British American Tobacco (BAT) PLC (United Kingdom)	3,065	168,334
Calbee, Inc. (Japan)	1,700	163,233
Carrefour SA (France)	4,896	142,587
Church & Dwight Co., Inc.	2,411	146,613
Coca-Cola Co. (The)	3,169	126,728
Colgate-Palmolive Co.	9,115	527,212

24   Dynamic Risk Allocation Fund 

COMMON STOCKS (38.2%)* cont.	Shares	Value
Consumer staples cont.
Core-Mark Holding Co., Inc.	255	$15,093
Corrections Corp. of America	5,330	187,350
DeNA Co., Ltd. (Japan)	2,400	50,635
Diageo PLC (United Kingdom)	4,687	138,757
Distribuidora Internacional de Alimentacion SA (Spain)	13,400	104,243
Domino’s Pizza, Inc.	141	8,357
Dunkin’ Brands Group, Inc.	1,712	67,795
Fiesta Restaurant Group, Inc. †	269	9,568
General Mills, Inc.	10,356	487,560
Geo Group, Inc. (The)	5,266	183,362
Grand Canyon Education, Inc. †	485	15,578
H.J. Heinz Co.	5,747	415,853
Hain Celestial Group, Inc. (The) †	126	8,394
Heineken Holding NV (Netherlands)	3,036	179,195
Hershey Co. (The)	3,288	292,994
ITT Educational Services, Inc. †	1,976	47,365
Japan Tobacco, Inc. (Japan)	5,600	189,670
JM Smucker Co. (The)	1,545	155,983
Kao Corp. (Japan)	2,800	86,969
Kellogg Co.	4,798	297,716
Koninklijke Ahold NV (Netherlands)	7,676	124,016
Kraft Foods Group, Inc.	3,023	166,658
L’Oreal SA (France)	1,316	220,613
McDonald’s Corp.	2,519	243,260
MWI Veterinary Supply, Inc. †	59	7,155
Nestle SA (Switzerland)	7,268	479,593
On Assignment, Inc. †	613	15,963
OpenTable, Inc. †	131	8,738
Panera Bread Co. Class A †	581	111,453
Papa John’s International, Inc. †	251	16,172
PepsiCo, Inc.	5,390	435,350
Philip Morris International, Inc.	4,136	376,004
Pinnacle Foods, Inc. †	562	13,803
Prestige Brands Holdings, Inc. †	636	18,692
Procter & Gamble Co. (The)	3,830	293,991
Reckitt Benckiser Group PLC (United Kingdom)	4,067	290,159
Reynolds American, Inc.	6,392	307,519
SABMiller PLC (United Kingdom)	2,542	127,861
Spartan Stores, Inc.	523	9,294
Starbucks Corp.	8,504	536,347
Suedzucker AG (Germany)	3,494	118,794
Tesco PLC (United Kingdom)	11,474	63,320
TrueBlue, Inc. †	2,296	54,048
Unilever PLC (United Kingdom)	4,325	181,799
United Natural Foods, Inc. †	164	8,679
USANA Health Sciences, Inc. †	120	8,411
Woolworths, Ltd. (Australia)	6,096	191,349
		9,823,454

Dynamic Risk Allocation Fund   25 

COMMON STOCKS (38.2%)* cont.	Shares	Value
Energy (2.8%)
BP PLC (United Kingdom)	56,213	$402,363
Caltex Australia, Ltd. (Australia)	8,879	189,213
Chevron Corp.	11,113	1,364,121
ConocoPhillips	5,520	338,597
CVR Energy, Inc. (Escrow) F	401	—
Delek US Holdings, Inc.	489	17,619
Diamond Offshore Drilling, Inc.	1,863	128,193
ENI SpA (Italy)	7,987	180,606
EPL Oil & Gas, Inc. †	908	27,649
EQT Corp.	2,331	186,200
Exxon Mobil Corp.	20,776	1,879,605
FutureFuel Corp.	1,801	25,178
Gulfport Energy Corp. †	217	10,349
Helix Energy Solutions Group, Inc. †	1,654	39,464
Key Energy Services, Inc. †	2,607	16,893
Kodiak Oil & Gas Corp. †	1,300	11,414
Noble Energy, Inc.	2,614	150,697
Oceaneering International, Inc.	2,180	158,006
Phillips 66	5,929	394,694
Repsol YPF SA (Spain)	5,087	113,936
Rosetta Resources, Inc. †	233	10,918
Royal Dutch Shell PLC Class A (United Kingdom)	8,267	274,547
Royal Dutch Shell PLC Class B (United Kingdom)	7,607	262,811
Spectra Energy Corp.	7,457	227,960
Statoil ASA (Norway)	7,256	164,192
Stone Energy Corp. †	589	13,258
Swift Energy Co. †	722	9,790
Tesoro Corp.	508	31,318
Total SA (France)	4,479	222,150
Unit Corp. †	261	11,789
Vaalco Energy, Inc. †	3,251	19,896
W&T Offshore, Inc.	526	7,753
Western Refining, Inc.	699	23,326
6,914,505
Financials (9.3%)
3i Group PLC (United Kingdom)	24,402	124,631
Access National Corp.	560	7,241
AG Mortgage Investment Trust, Inc. R	318	7,279
Ageas (Belgium)	4,659	169,563
Agree Realty Corp. R	523	17,432
AIA Group, Ltd. (Hong Kong)	39,400	173,874
Alexandria Real Estate Equities, Inc. R	2,615	179,128
Alleghany Corp. †	699	272,610
Allianz SE (Germany)	1,545	238,772
Allied World Assurance Co. Holdings AG	2,081	186,062
American Campus Communities, Inc. R	319	13,025
American Equity Investment Life Holding Co.	1,324	21,449
American Express Co.	4,690	355,080

26   Dynamic Risk Allocation Fund 

COMMON STOCKS (38.2%)* cont.	Shares	Value
Financials cont.
Amtrust Financial Services, Inc.	296	$9,777
Apartment Investment & Management Co. Class A R	5,910	178,837
Arch Capital Group, Ltd. †	2,972	152,196
Arlington Asset Investment Corp. Class A	353	9,623
ARMOUR Residential REIT, Inc. R	1,712	8,834
Arthur J Gallagher & Co.	5,037	220,016
Ashford Hospitality Trust, Inc. R	2,139	28,256
Assicurazioni Generali SpA (Italy)	7,354	137,022
Australia & New Zealand Banking Group, Ltd. (Australia)	5,040	131,451
AvalonBay Communities, Inc. R	1,304	172,989
AXA SA (France)	9,113	183,553
Banco Bilbao Vizcaya Argentaria SA (BBVA) (Spain)	12,297	115,289
Banco Latinoamericano de Exportaciones SA Class E (Panama)	1,232	28,250
Banco Santander Central Hispano SA (Spain)	23,274	167,194
Bank of Hawaii Corp.	6,714	338,251
Bank of Kentucky Financial Corp.	330	8,564
Bank of Yokohama, Ltd. (The) (Japan)	25,000	122,509
Barclays PLC (United Kingdom)	73,001	349,302
Berkshire Hathaway, Inc. Class B †	1,705	194,489
BlackRock, Inc.	839	234,249
BofI Holding, Inc. †	816	38,205
Boston Properties, LP R	1,809	192,803
Camden Property Trust R	470	32,548
Cardinal Financial Corp.	1,133	17,154
CBL & Associates Properties, Inc. R	1,988	45,704
Chubb Corp. (The)	5,180	451,178
Citizens & Northern Corp.	634	12,363
CNO Financial Group, Inc.	1,410	17,399
Colonial Properties Trust R	6,248	138,143
Commonwealth Bank of Australia (Australia)	6,515	412,704
Cousins Properties, Inc. R	12,102	124,893
Credit Acceptance Corp. †	175	19,926
Credit Agricole SA (France) †	16,004	150,170
Credit Suisse Group (Switzerland)	3,506	103,982
Cullen/Frost Bankers, Inc.	7,096	456,628
CYS Investments, Inc. R	1,115	11,462
DBS Group Holdings, Ltd. (Singapore)	10,000	135,342
DDR Corp. R	458	7,997
Deutsche Bank AG (Germany)	3,948	184,657
Dexus Property Group (Australia) R	136,076	142,325
DFC Global Corp. †	1,975	29,428
Digital Realty Trust, Inc. R	1,070	65,174
Discover Financial Services	13,159	623,868
Douglas Emmett, Inc. R	4,257	108,511
Duke Realty Corp. R	1,338	22,171
DuPont Fabros Technology, Inc. R	5,498	133,217
Dynex Capital, Inc. R	1,637	16,648
Eagle Bancorp, Inc. †	522	11,750

Dynamic Risk Allocation Fund  27 

COMMON STOCKS (38.2%)* cont.	Shares	Value
Financials cont.
East West Bancorp, Inc.	873	$22,995
EastGroup Properties, Inc. R	465	27,328
Encore Capital Group, Inc. †	578	20,617
EPR Properties R	209	10,956
Equity Lifestyle Properties, Inc. R	2,046	157,890
Equity Residential Trust R	7,011	396,472
Essex Property Trust, Inc. R	785	123,355
Everest Re Group, Ltd.	2,120	274,773
Extra Space Storage, Inc. R	4,777	200,109
Federal Realty Investment Trust R	3,147	339,089
Financial Institutions, Inc.	675	13,169
First Community Bancshares Inc.	660	10,052
First Industrial Realty Trust R	695	11,739
FirstMerit Corp.	804	15,171
Flushing Financial Corp.	710	11,097
General Growth Properties R	12,858	263,975
Genworth Financial, Inc. Class A †	6,222	67,260
Glimcher Realty Trust R	1,270	14,834
Government Properties Income Trust R	5,298	128,794
Greenhill & Co., Inc.	255	12,702
Hammerson PLC (United Kingdom) R	10,465	81,215
Hang Seng Bank, Ltd. (Hong Kong)	9,700	155,843
Hanmi Financial Corp. †	1,364	21,469
HCP, Inc. R	5,909	279,968
Health Care REIT, Inc. R	6,598	448,862
Heartland Financial USA, Inc.	436	11,877
Heritage Financial Group, Inc.	577	8,245
HFF, Inc. Class A	1,807	33,990
HSBC Holdings, PLC (United Kingdom)	39,213	429,538
Inland Real Estate Corp. R	13,159	135,143
Insurance Australia Group, Ltd. (Australia)	37,248	200,971
IntercontinentalExchange, Inc. †	2,223	380,600
Invesco Mortgage Capital, Inc. R	488	9,101
Investor AB Class B (Sweden)	4,590	131,532
Investors Real Estate Trust R	1,580	14,220
iStar Financial, Inc. † R	1,327	15,805
Jones Lang LaSalle, Inc.	100	9,183
Joyo Bank, Ltd. (The) (Japan)	25,000	124,158
JPMorgan Chase & Co.	4,010	218,906
Kimco Realty Corp. R	12,002	265,844
Lexington Realty Trust R	2,980	37,518
Liberty Property Trust R	360	14,609
LTC Properties, Inc. R	720	29,959
Macerich Co. (The) R	1,203	78,087
Maiden Holdings, Ltd. (Bermuda)	1,138	12,154
MainSource Financial Group, Inc.	1,019	14,164
Medical Properties Trust, Inc. R	9,892	146,797
MFA Financial, Inc. R	1,844	16,190

28   Dynamic Risk Allocation Fund 

COMMON STOCKS (38.2%)* cont.	Shares	Value
Financials cont.
Mitsubishi UFJ Financial Group (MUFG), Inc. (Japan)	31,000	$183,067
Muenchener Rueckversicherungs AG (Germany)	854	159,866
National Health Investors, Inc. R	435	27,087
Nationstar Mortgage Holdings, Inc. †	241	9,811
Nelnet, Inc. Class A	589	23,006
Northern Trust Corp.	6,480	376,812
Ocwen Financial Corp. †	394	16,855
OFG Bancorp (Puerto Rico)	669	11,895
One Liberty Properties, Inc. R	746	19,732
Pacific Premier Bancorp, Inc. †	720	8,503
PartnerRe, Ltd.	2,632	238,591
People’s United Financial, Inc.	39,591	544,772
Peoples Bancorp, Inc.	675	13,527
PHH Corp. †	584	11,773
Piedmont Office Realty Trust, Inc. Class A R	8,485	161,130
Popular, Inc. (Puerto Rico) †	531	15,930
Portfolio Recovery Associates, Inc. †	207	31,520
Post Properties, Inc. R	3,132	149,710
Prologis, Inc. R	5,716	230,355
Protective Life Corp.	510	19,727
Prudential PLC (United Kingdom)	11,522	194,188
PS Business Parks, Inc. R	213	16,254
Public Storage R	4,912	745,642
Ramco-Gershenson Properties Trust R	8,505	132,763
Rayonier, Inc. R	1,943	107,642
Realty Income Corp. R	1,726	78,447
Regency Centers Corp. R	3,825	197,370
RenaissanceRe Holdings, Ltd.	2,305	198,138
Republic Bancorp, Inc. Class A	454	10,810
Resona Holdings, Inc. (Japan)	47,900	212,677
Security National Financial Corp. Class A †	700	4,998
Select Income REIT R	4,473	121,800
Senior Housing Properties Trust R	710	18,354
Simon Property Group, Inc. R	7,651	1,273,432
Skandinaviska Enskilda Banken AB (Sweden)	13,179	136,753
SL Green Realty Corp. R	729	63,408
St. Joe Co. (The) †	1,699	34,694
STAG Industrial, Inc. R	3,241	71,302
Standard Chartered PLC (United Kingdom)	4,576	105,226
Standard Life PLC (United Kingdom)	24,955	146,734
Starwood Property Trust, Inc. R	380	9,641
Stewart Information Services Corp.	965	26,721
Sumitomo Mitsui Financial Group, Inc. (Japan)	3,100	121,343
Summit Hotel Properties, Inc. R	1,962	19,365
Sun Communities, Inc. R	290	14,491
Swedbank AB Class A (Sweden)	6,353	150,460
Symetra Financial Corp.	1,138	15,886
T. Rowe Price Group, Inc.	6,733	510,765

Dynamic Risk Allocation Fund   29 

COMMON STOCKS (38.2%)* cont.	Shares	Value
Financials cont.
Tanger Factory Outlet Centers R	1,684	$58,064
Taubman Centers, Inc. R	214	17,244
Tokyu Land Corp. (Japan)	24,000	218,040
UBS AG (Switzerland)	8,878	154,415
UDR, Inc. R	1,466	35,726
Universal Health Realty Income Trust R	157	7,092
Validus Holdings, Ltd.	4,730	170,800
Virtus Investment Partners, Inc. †	91	21,099
Visa, Inc. Class A	3,916	697,596
Vornado Realty Trust R	4,008	320,440
WageWorks, Inc. †	409	11,849
Walker & Dunlop, Inc. †	782	14,835
Walter Investment Management Corp. †	399	14,528
Washington Banking Co.	803	10,953
Wells Fargo & Co.	5,165	209,441
Westfield Group (Australia)	10,825	118,524
Westpac Banking Corp. (Australia)	5,840	156,861
Wheelock and Co., Ltd. (Hong Kong)	38,000	211,655
World Acceptance Corp. †	123	11,360
23,164,967
Health care (4.4%)
NxStage Medical, Inc. †	453	6,319
Abbott Laboratories	9,335	342,314
AbbVie, Inc.	9,518	406,323
ACADIA Pharmaceuticals, Inc. †	449	6,317
Accuray, Inc. †	1,787	9,596
Aegerion Pharmaceuticals, Inc. †	120	8,740
Alere, Inc. †	1,259	32,205
Align Technology, Inc. †	289	10,332
Amedisys, Inc. †	1,047	12,899
AmerisourceBergen Corp.	6,245	337,730
Amgen, Inc.	4,896	492,195
AmSurg Corp. †	402	14,283
Array BioPharma, Inc. †	1,326	7,744
AstraZeneca PLC (United Kingdom)	3,729	190,233
Auxilium Pharmaceuticals, Inc. †	370	5,520
Bayer AG (Germany)	2,715	292,051
Becton, Dickinson and Co.	2,455	242,112
Bio-Reference Labs, Inc. †	158	4,874
BioMarin Pharmaceuticals, Inc. †	130	8,151
Bristol-Myers Squibb Co.	10,817	497,690
C.R. Bard, Inc.	2,189	225,664
Cardinal Health, Inc.	7,998	375,586
Centene Corp. †	108	5,346
Chemed Corp.	341	23,877
Coloplast A/S Class B (Denmark)	3,632	206,546
Community Health Systems, Inc.	328	15,800
Computer Programs & Systems, Inc.	96	4,808

30   Dynamic Risk Allocation Fund 

COMMON STOCKS (38.2%)* cont.	Shares	Value
Health care cont.
Conmed Corp.	873	$28,748
CSL, Ltd. (Australia)	2,814	159,524
Cubist Pharmaceuticals, Inc. †	523	28,739
Cyberonics, Inc. †	131	6,250
Eli Lilly & Co.	6,612	351,494
Endo Health Solutions, Inc. †	533	19,348
Exact Sciences Corp. †	651	7,317
Gentium SpA ADR (Italy) †	461	3,868
GlaxoSmithKline PLC (United Kingdom)	10,708	277,554
Globus Medical, Inc. Class A †	581	8,483
Greatbatch, Inc. †	1,122	36,140
Haemonetics Corp. †	308	12,714
Health Net, Inc. †	419	13,354
HealthSouth Corp. †	787	23,051
Henry Schein, Inc. †	2,440	234,948
Hi-Tech Pharmacal Co., Inc.	184	5,881
Hill-Rom Holdings, Inc.	664	23,990
Insulet Corp. †	329	9,824
Jazz Pharmaceuticals PLC †	801	54,444
Johnson & Johnson	3,890	327,460
Lexicon Pharmaceuticals, Inc. †	1,759	4,204
Magellan Health Services, Inc. †	154	8,393
McKesson Corp.	4,907	558,711
MedAssets, Inc. †	1,231	20,188
Medicines Co. (The) †	397	12,787
Merck & Co., Inc.	17,418	813,421
NewLink Genetics Corp. †	545	8,889
Novartis AG (Switzerland)	3,570	255,811
Novo Nordisk A/S Class B (Denmark)	1,900	305,027
Omega Healthcare Investors, Inc. R	1,036	33,577
Orion OYJ Class B (Finland)	4,618	113,556
Otsuka Holdings Company, Ltd. (Japan)	7,000	222,630
PDL BioPharma, Inc.	1,668	13,761
Perrigo Co.	792	91,801
Pfizer, Inc.	40,641	1,106,654
Pharmacyclics, Inc. †	181	16,587
PharMerica Corp. †	913	14,252
Providence Service Corp. (The) †	1,550	40,858
Quest Diagnostics, Inc.	3,965	245,196
Questcor Pharmaceuticals, Inc.	478	16,333
Roche Holding AG-Genusschein (Switzerland)	2,122	525,068
RTI Biologics, Inc. †	1,929	7,812
Salix Pharmaceuticals, Ltd. †	112	6,795
Sanofi (France)	2,571	270,377
Santarus, Inc. †	423	9,420
Spectrum Pharmaceuticals, Inc.	883	7,249
STAAR Surgical Co. †	1,612	14,347
Steris Corp.	276	12,514

Dynamic Risk Allocation Fund  31 

COMMON STOCKS (38.2%)* cont.	Shares	Value
Health care cont.
Suzuken Co., Ltd. (Japan)	2,200	$70,003
TearLab Corp. †	620	6,522
Trinity Biotech PLC ADR (Ireland)	501	8,783
Triple-S Management Corp. Class B (Puerto Rico) †	365	7,727
United Therapeutics Corp. †	72	4,786
Ventas, Inc. R	7,462	532,563
ViroPharma, Inc. †	1,170	32,175
Warner Chilcott PLC Class A	449	8,621
WellCare Health Plans, Inc. †	636	33,161
10,878,945
Technology (5.2%)
3D Systems Corp. †	161	7,812
Acacia Research Corp.	272	6,800
Actuate Corp. †	3,038	20,507
Acxiom Corp. †	1,192	26,212
Analog Devices, Inc.	6,340	291,196
Anixter International, Inc. †	185	14,195
Apple, Inc.	10,604	4,768,407
ASML Holding NV (Netherlands)	2,031	167,468
Aspen Technology, Inc. †	538	16,474
Avago Technologies, Ltd.	6,436	242,702
Bottomline Technologies, Inc. †	311	8,593
Brocade Communications Systems, Inc. †	2,927	15,894
CACI International, Inc. Class A †	189	12,263
Cap Gemini SA (France)	2,732	132,133
Commvault Systems, Inc. †	254	17,780
Cornerstone OnDemand, Inc. †	253	10,282
CSG Systems International, Inc. †	232	5,018
EnerSys †	662	32,987
Entegris, Inc. †	1,741	18,141
FEI Co.	282	20,307
First Solar, Inc. †	180	9,788
Gemalto NV (Netherlands)	1,353	113,603
GenMark Diagnostics, Inc. †	549	8,180
Google, Inc. Class A †	970	844,298
Harris Corp.	2,293	114,948
Honeywell International, Inc.	8,415	660,241
IBM Corp.	6,629	1,378,965
Infoblox, Inc. †	382	9,294
Integrated Silicon Solutions, Inc. †	1,986	21,489
IntraLinks Holdings, Inc. †	1,655	10,162
Intuit, Inc.	6,636	387,808
Ixia †	400	6,288
Konica Minolta Holdings, Inc. (Japan)	15,500	110,832
L-3 Communications Holdings, Inc.	1,520	129,337
Lexmark International, Inc. Class A	356	10,862
Linear Technology Corp.	6,430	241,125
Magnachip Semiconductor Corp. (South Korea) †	680	12,580

32   Dynamic Risk Allocation Fund 

COMMON STOCKS (38.2%)* cont.	Shares	Value
Technology cont.
Manhattan Associates, Inc. †	269	$20,183
Mantech International Corp. Class A	787	21,320
Maxim Integrated Products, Inc.	7,796	229,904
Mentor Graphics Corp.	1,480	28,105
Microsemi Corp. †	401	8,794
Microsoft Corp.	11,590	404,259
MicroStrategy, Inc. Class A †	61	5,580
Motorola Solutions, Inc.	5,384	312,057
MTS Systems Corp.	271	16,358
NEC Corp. (Japan) †	107,000	248,616
Netscout Systems, Inc. †	517	12,589
NIC, Inc.	424	7,089
NTT Data Corp. (Japan)	26	87,160
Omnivision Technologies, Inc. †	909	16,789
Oracle Corp. Japan (Japan)	2,800	110,258
Perficient, Inc. †	915	11,529
Photronics, Inc. †	1,656	12,635
Plantronics, Inc.	250	11,550
Polycom, Inc. †	1,432	16,225
Procera Networks, Inc. †	650	9,594
PTC, Inc. †	469	11,777
QLIK Technologies, Inc. †	259	7,967
Quantum Corp. †	8,619	13,359
RF Micro Devices, Inc. †	5,329	29,416
Rovi Corp. †	1,426	36,791
Rudolph Technologies, Inc. †	1,244	15,251
Safeguard Scientifics, Inc. †	669	10,557
SAP AG (Germany) †	1,099	83,706
SciQuest, Inc. †	280	6,426
Semtech Corp. †	410	14,981
Silicon Graphics International Corp. †	449	6,780
Silicon Image, Inc. †	2,541	15,475
Softbank Corp. (Japan)	3,500	175,060
Sourcefire, Inc. †	181	10,129
Sparton Corp. †	572	9,507
SS&C Technologies Holdings, Inc. †	481	15,214
Teradyne, Inc. †	782	14,029
Texas Instruments, Inc.	14,498	520,333
TIBCO Software, Inc. †	416	8,873
Tyler Technologies, Inc. †	276	19,047
Ultimate Software Group, Inc. †	228	25,376
Ultra Clean Holdings, Inc. †	1,587	9,220
Unisys Corp. †	416	8,590
Verint Systems, Inc. †	333	11,179
Xilinx, Inc.	6,763	274,916
XO Group, Inc. †	1,057	10,929
		12,860,453

Dynamic Risk Allocation Fund  33 

COMMON STOCKS (38.2%)* cont.	Shares	Value
Transportation (0.7%)
Aegean Marine Petroleum Network, Inc. (Greece)	2,678	$26,030
Alaska Air Group, Inc. †	186	10,569
C.H. Robinson Worldwide, Inc.	2,414	136,850
Central Japan Railway Co. (Japan)	2,300	250,909
ComfortDelgro Corp., Ltd. (Singapore)	71,000	104,661
Con-way, Inc.	920	34,978
Copa Holdings SA Class A (Panama)	661	86,803
International Consolidated Airlines Group SA (Spain) †	32,080	134,658
J. B. Hunt Transport Services, Inc.	1,544	113,731
Quality Distribution, Inc. †	1,729	15,751
SkyWest, Inc.	979	13,735
Southwest Airlines Co.	11,778	166,894
Swift Transportation Co. †	2,062	34,724
TAL International Group, Inc. †	644	27,215
United Parcel Service, Inc. Class B	7,784	668,646
Universal Truckload Services, Inc. †	668	17,067
1,843,221
Utilities and power (1.0%)
Chubu Electric Power Co., Inc. (Japan)	3,300	42,843
Consolidated Edison, Inc.	7,686	438,640
DTE Energy Co.	6,196	412,716
Enel SpA (Italy)	37,214	140,176
GDF Suez (France)	6,700	135,136
Kansai Electric Power, Inc. (Japan)	21,500	254,223
Kinder Morgan, Inc.	5,813	220,778
Pinnacle West Capital Corp.	3,736	211,009
Red Electrica Corporacion SA (Spain)	3,495	184,954
SCANA Corp.	5,000	252,200
United Utilities Group PLC (United Kingdom)	12,448	141,995
		2,434,670
Total common stocks (cost $84,986,621)		$95,009,814
CORPORATE BONDS AND NOTES (5.8%)*	Principal amount	Value
Basic materials (0.6%)
Ainsworth Lumber Co., Ltd. 144A sr. notes 7 1/2s,
2017 (Canada)	$15,000	$16,243
ArcelorMittal sr. unsec. bonds 10.35s, 2019 (France)	50,000	61,951
ArcelorMittal sr. unsec. unsub. notes 7 1/2s, 2039 (France)	25,000	25,125
Ashland, Inc. 144A company guaranty sr. unsec. unsub. notes
4 3/4s, 2022	40,000	40,850
Ashland, Inc. 144A sr. unsec. notes 4 3/4s, 2022	25,000	25,531
Atkore International, Inc. company guaranty sr. notes
9 7/8s, 2018	55,000	59,263
Axiall Corp. 144A company guaranty sr. unsec. notes
4 7/8s, 2023	5,000	5,025
Boise Cascade Co. company guaranty sr. unsec. notes
6 3/8s, 2020	15,000	16,088
Celanese US Holdings, LLC company guaranty sr. unsec. unsub.
notes 4 5/8s, 2022 (Germany)	25,000	25,625

34   Dynamic Risk Allocation Fund 

CORPORATE BONDS AND NOTES (5.8%)* cont.	Principal amount	Value
Basic materials cont.
Eagle Spinco, Inc. 144A company guaranty sr. unsec. notes
4 5/8s, 2021	$5,000	$5,038
Edgen Murray Corp. 144A company guaranty sr. notes
8 3/4s, 2020	25,000	26,063
Eldorado Gold Corp. 144A sr. unsec. notes 6 1/8s,
2020 (Canada)	15,000	15,225
Ferro Corp. sr. unsec. notes 7 7/8s, 2018	15,000	15,863
HD Supply, Inc. company guaranty sr. unsec. sub. notes
10 1/2s, 2021	25,000	26,031
HD Supply, Inc. company guaranty sr. unsec. unsub. notes
11 1/2s, 2020	70,000	82,250
HD Supply, Inc. 144A sr. unsec. notes 7 1/2s, 2020	50,000	53,000
Hexion U.S. Finance Corp. 144A sr. notes 6 5/8s, 2020	15,000	15,600
Hexion U.S. Finance Corp./Hexion Nova Scotia Finance, ULC
company guaranty notes 9s, 2020	40,000	40,700
Huntsman International, LLC company guaranty sr. unsec. sub.
notes 8 5/8s, 2020	100,000	110,500
Huntsman International, LLC company guaranty sr. unsec.
unsub. notes 4 7/8s, 2020	50,000	50,500
IAMGOLD Corp. 144A company guaranty sr. unsec. notes
6 3/4s, 2020 (Canada)	45,000	41,175
Inmet Mining Corp. 144A company guaranty sr. unsec. notes
7 1/2s, 2021 (Canada)	10,000	10,200
JM Huber Corp. 144A sr. unsec. notes 9 7/8s, 2019	90,000	103,725
Louisiana-Pacific Corp. company guaranty sr. unsec. unsub.
notes 7 1/2s, 2020	60,000	67,650
LyondellBasell Industries NV sr. unsec. notes 6s, 2021	200,000	236,438
New Gold, Inc. 144A sr. unsec. notes 6 1/4s, 2022 (Canada)	15,000	15,480
Nufarm Australia Ltd. 144A company guaranty sr. notes 6 3/8s,
2019 (Australia)	15,000	15,713
PolyOne Corp. 144A sr. unsec. notes 5 1/4s, 2023	50,000	51,375
PQ Corp. 144A sr. notes 8 3/4s, 2018	35,000	37,275
Ryerson, Inc./Joseph T Ryerson & Son, Inc. 144A company
guaranty sr. notes 9s, 2017	30,000	32,400
Sealed Air Corp. 144A sr. unsec. notes 6 1/2s, 2020	35,000	38,938
Sealed Air Corp. 144A sr. unsec. notes 5 1/4s, 2023	40,000	40,300
Steel Dynamics, Inc. 144A company guaranty sr. unsec. notes
5 1/4s, 2023	5,000	5,200
Tronox Finance, LLC 144A company guaranty sr. unsec. notes
6 3/8s, 2020	45,000	44,213
USG Corp. sr. unsec. notes 9 3/4s, 2018	45,000	52,988
Weekley Homes, LLC/Weekley Finance Corp. 144A sr. unsec.
notes 6s, 2023	40,000	41,600
Weyerhaeuser Co. sr. unsec. unsub. debs. 7 1/8s, 2023 R	35,000	43,492
1,594,633
Capital goods (0.4%)
ADS Waste Holdings, Inc. 144A sr. notes 8 1/4s, 2020	100,000	107,250
American Axle & Manufacturing, Inc. company guaranty
sr. unsec. notes 7 3/4s, 2019	10,000	11,425
Ball Corp. company guaranty sr. unsec. notes 4s, 2023	15,000	14,400

Dynamic Risk Allocation Fund  35 

CORPORATE BONDS AND NOTES (5.8%)* cont.	Principal amount	Value
Capital goods cont.
BOE Merger Corp. 144A sr. unsec. notes 9 1/2s, 2017 ‡‡	$75,000	$78,188
Bombardier, Inc. 144A sr. notes 6 1/8s, 2023 (Canada)	35,000	36,575
Briggs & Stratton Corp. company guaranty sr. unsec. notes
6 7/8s, 2020	95,000	107,350
Crown Americas LLC/Crown Americas Capital Corp. IV 144A
company guaranty sr. unsec. notes 4 1/2s, 2023	40,000	39,100
Delphi Corp. company guaranty sr. unsec. unsub. notes 5s, 2023	50,000	53,063
DH Services Luxembourg Sarl 144A company guaranty sr.
unsec. notes 7 3/4s, 2020 (Luxembourg)	65,000	70,038
Exide Technologies sr. notes 8 5/8s, 2018	60,000	38,700
GrafTech International, Ltd. 144A company guaranty sr. unsec.
notes 6 3/8s, 2020	60,000	62,400
Legrand France SA sr. unsec. unsub. debs 8 1/2s, 2025 (France)	15,000	19,664
Manitowoc Co., Inc. (The) company guaranty sr. unsec. notes
5 7/8s, 2022	25,000	26,563
MasTec, Inc. company guaranty sr. unsec. unsub. notes
4 7/8s, 2023	40,000	39,450
Pittsburgh Glass Works, LLC 144A sr. notes 8 1/2s, 2016	75,000	77,250
Reynolds Group Issuer, Inc./Reynolds Group Issuer, LLC/
Reynolds Group Issuer Lu company guaranty sr. notes
5 3/4s, 2020	25,000	25,375
Tenneco, Inc. company guaranty sr. unsub. notes 6 7/8s, 2020	55,000	59,950
Terex Corp. company guaranty sr. unsec. unsub. notes
6 1/2s, 2020	90,000	96,525
Terex Corp. company guaranty sr. unsec. unsub. notes 6s, 2021	80,000	84,600
Triumph Group, Inc. 144A sr. unsec. notes 4 7/8s, 2021	50,000	51,000
1,098,866
Communication services (1.0%)
CCO Holdings, LLC/CCO Holdings Capital Corp. company
guaranty sr. unsec. notes 5 1/4s, 2022	145,000	145,363
CCO Holdings, LLC/CCO Holdings Capital Corp. company
guaranty sr. unsec. unsub. notes 5 1/8s, 2023	20,000	19,600
CenturyLink, Inc. sr. unsec. unsub. notes 5 5/8s, 2020	15,000	15,506
Cincinnati Bell, Inc. company guaranty sr. unsec. notes
8 3/8s, 2020	10,000	10,625
Crown Castle International Corp. sr. unsec. notes 5 1/4s, 2023	35,000	35,438
CSC Holdings, LLC sr. unsec. unsub. notes 6 3/4s, 2021	100,000	111,750
CyrusOne LP/CyrusOne Finance Corp. 144A company guaranty
sr. unsec. unsub. notes 6 3/8s, 2022	15,000	16,013
Frontier Communications Corp. sr. unsec. notes 8 1/8s, 2018	120,000	138,150
Frontier Communications Corp. sr. unsec. unsub. notes
7 5/8s, 2024	20,000	21,000
Intelsat Jackson Holdings SA company guaranty sr. unsec. notes
7 1/2s, 2021 (Bermuda)	315,000	346,106
Intelsat Jackson Holdings SA 144A sr. unsec. notes 6 5/8s,
2022 (Bermuda)	20,000	20,825
Intelsat Luxembourg SA 144A company guaranty sr. unsec.
notes 8 1/8s, 2023 (Luxembourg)	115,000	123,050
Intelsat Luxembourg SA 144A sr. unsec. notes 7 3/4s,
2021 (Luxembourg)	155,000	162,944

36   Dynamic Risk Allocation Fund 

CORPORATE BONDS AND NOTES (5.8%)* cont.		Principal amount	Value
Communication services cont.
MetroPCS Wireless, Inc. 144A company guaranty sr. unsec.
unsub. notes 6 5/8s, 2023		$80,000	$84,600
MetroPCS Wireless, Inc. 144A company guaranty sr. unsec.
unsub. notes 6 1/4s, 2021		75,000	78,563
NII International Telecom Sarl 144A company guaranty sr. unsec.
notes 11 3/8s, 2019 (Luxembourg)		20,000	22,150
NII International Telecom Sarl 144A company guaranty sr. unsec.
notes 7 7/8s, 2019 (Luxembourg)		55,000	53,488
Quebecor Media, Inc. sr. unsec. unsub. notes 5 3/4s,
2023 (Canada)		30,000	30,750
Quebecor Media, Inc. 144A sr. unsec. notes 7 3/8s,
2021 (Canada)	CAD	295,000	314,252
Sprint Nextel Corp. sr. unsec. unsub. notes 7s, 2020		$330,000	358,050
West Corp. company guaranty sr. unsec. notes 7 7/8s, 2019		220,000	238,700
Windstream Corp. company guaranty sr. unsec. notes
6 3/8s, 2023		25,000	24,688
2,371,611
Consumer cyclicals (1.2%)
AMC Entertainment, Inc. company guaranty sr. sub. notes
9 3/4s, 2020		170,000	196,350
Beazer Homes USA, Inc. 144A company guaranty sr. unsec.
notes 7 1/4s, 2023		25,000	26,469
Bon-Ton Department Stores, Inc. (The) 144A notes 8s, 2021		20,000	20,525
Brookfield Residential Properties, Inc. 144A company guaranty
sr. unsec. notes 6 1/2s, 2020 (Canada)		80,000	85,600
Burlington Holdings, LLC/Burlington Holding Finance, Inc. 144A
sr. unsec. notes 9s, 2018 ‡‡		20,000	20,325
Caesars Entertainment Operating Co., Inc. sr. notes
11 1/4s, 2017		175,000	182,875
Caesars Entertainment Operating Co., Inc. 144A company
guaranty sr. notes 9s, 2020		220,000	211,750
Cedar Fair LP/Canada’s Wonderland Co./Magnum Management
Corp. 144A company guaranty sr. unsec. notes 5 1/4s, 2021		35,000	35,000
Cinemark USA, Inc. 144A company guaranty sr. unsec. notes
4 7/8s, 2023		10,000	9,963
CityCenter Holdings LLC/CityCenter Finance Corp. company
guaranty sr. notes 7 5/8s, 2016		80,000	85,000
Clear Channel Communications, Inc. 144A company guaranty
sr. notes 9s, 2019		30,000	30,150
Clear Channel Worldwide Holdings, Inc. company guaranty
sr. unsec. notes 7 5/8s, 2020		75,000	79,688
CST Brands, Inc. 144A company guaranty sr. unsec.
notes 5s, 2023		80,000	80,800
FelCor Lodging LP company guaranty sr. notes 5 5/8s, 2023 R		15,000	15,263
General Motors Financial Co., Inc. 144A sr. unsec. notes
4 1/4s, 2023		25,000	24,375
Gray Television, Inc. company guaranty sr. unsec. notes
7 1/2s, 2020		30,000	32,100
Igloo Holdings Corp. 144A sr. unsec. unsub. notes
8 1/4s, 2017 ‡‡		70,000	71,925

Dynamic Risk Allocation Fund  37 

CORPORATE BONDS AND NOTES (5.8%)* cont.	Principal amount	Value
Consumer cyclicals cont.
Interactive Data Corp. company guaranty sr. unsec. notes
10 1/4s, 2018	$45,000	$50,513
Isle of Capri Casinos, Inc. company guaranty sr. unsec. notes
5 7/8s, 2021	35,000	34,825
Jo-Ann Stores Holdings, Inc. 144A sr. unsec. notes
9 3/4s, 2019 ‡‡	20,000	21,275
K Hovnanian Enterprises, Inc. 144A company guaranty notes
9 1/8s, 2020	10,000	11,325
K Hovnanian Enterprises, Inc. 144A sr. notes 7 1/4s, 2020	25,000	27,563
L Brands, Inc. company guaranty sr. unsec. notes 6 5/8s, 2021	55,000	62,975
Lamar Media Corp. company guaranty sr. sub. notes
5 7/8s, 2022	50,000	54,000
Lender Processing Services, Inc. company guaranty sr. unsec.
unsub. notes 5 3/4s, 2023	45,000	49,838
Lennar Corp. 144A company guaranty sr. unsec. notes 5s, 2022	15,000	15,000
Mattamy Group Corp. 144A sr. unsec. notes 6 1/2s,
2020 (Canada)	50,000	49,875
MGM Resorts International company guaranty sr. unsec. notes
7 5/8s, 2017	45,000	51,356
MGM Resorts International company guaranty sr. unsec. notes
6 3/4s, 2020	25,000	27,250
MGM Resorts International company guaranty sr. unsec. unsub.
notes 8 5/8s, 2019	125,000	147,813
MGM Resorts International company guaranty sr. unsec. unsub.
notes 6 5/8s, 2021	10,000	10,825
MTR Gaming Group, Inc. company guaranty notes
11 1/2s, 2019 ‡‡	95,000	102,006
Navistar International Corp. sr. notes 8 1/4s, 2021	80,000	82,400
Needle Merger Sub Corp. 144A sr. unsec. notes 8 1/8s, 2019	60,000	63,150
Neiman-Marcus Group, Inc. (The) company guaranty sr. notes
7 1/8s, 2028	80,000	83,200
New Academy Finance Co., LLC/New Academy Finance Corp.
144A sr. unsec. notes 8s, 2018 ‡‡	50,000	51,563
Nielsen Finance, LLC/Nielsen Finance Co. 144A sr. unsec. notes
4 1/2s, 2020	20,000	20,100
Nortek, Inc. company guaranty sr. unsec. notes 10s, 2018	80,000	88,800
Petco Holdings, Inc. 144A sr. notes 8 1/2s, 2017 ‡‡	25,000	25,688
PulteGroup, Inc. company guaranty sr. unsec. unsub.
notes 6s, 2035	90,000	86,400
Realogy Corp. 144A company guaranty sr. notes 7 7/8s, 2019	175,000	192,063
Regal Entertainment Group sr. unsec. notes 5 3/4s, 2023 ##	25,000	25,063
Rent-A-Center, Inc. 144A sr. unsec. notes 4 3/4s, 2021	40,000	39,500
RSI Home Products, Inc. 144A company guaranty notes
6 7/8s, 2018	45,000	46,575
Sabre, Inc. 144A sr. notes 8 1/2s, 2019	10,000	11,025
Sinclair Television Group, Inc. 144A company guaranty sr. unsec.
notes 5 3/8s, 2021	25,000	24,875
Sinclair Television Group, Inc. 144A sr. notes 6 1/8s, 2022	15,000	15,638
Six Flags Entertainment Corp. 144A company guaranty sr.
unsec. unsub. notes 5 1/4s, 2021	35,000	35,175

38  Dynamic Risk Allocation Fund 

CORPORATE BONDS AND NOTES (5.8%)* cont.	Principal amount	Value
Consumer cyclicals cont.
Spectrum Brands Escrow Corp. 144A sr. unsec. notes
6 3/8s, 2020	$5,000	$5,375
SugarHouse HSP Gaming Prop. Mezz LP/SugarHouse HSP
Gaming Finance Corp. 144A sr. notes 6 3/8s, 2021	15,000	15,075
Taylor Morrison Communities, Inc./Monarch Communities, Inc.
144A company guaranty sr. unsec. notes 5 1/4s, 2021	25,000	25,188
Tempur-Pedic International, Inc. 144A company guaranty
sr. unsec. unsub. notes 6 7/8s, 2020	5,000	5,394
Travelport, LLC/Travelport Holdings, Inc. 144A company
guaranty sr. unsec. unsub. notes 13 7/8s, 2016 ‡‡	105,000	108,675
TRW Automotive, Inc. 144A company guaranty sr. unsec. notes
4 1/2s, 2021	15,000	15,488
Univision Communications, Inc. 144A company guaranty
sr. unsec. notes 8 1/2s, 2021	30,000	32,475
Univision Communications, Inc. 144A sr. notes 7 7/8s, 2020	55,000	60,225
3,083,707
Consumer staples (0.2%)
Avis Budget Car Rental, LLC/Avis Budget Finance, Inc. 144A
sr. unsec. notes 5 1/2s, 2023	25,000	25,250
B&G Foods, Inc. company guaranty sr. unsec. notes
4 5/8s, 2021	35,000	35,000
Claire’s Stores, Inc. company guaranty sr. notes 8 7/8s, 2019	70,000	75,075
Claire’s Stores, Inc. 144A company guaranty sr. notes
6 1/8s, 2020	20,000	20,900
Claire’s Stores, Inc. 144A sr. notes 9s, 2019	30,000	33,825
Constellation Brands, Inc. company guaranty sr. unsec. notes
4 1/4s, 2023	15,000	14,738
Constellation Brands, Inc. company guaranty sr. unsec. notes
3 3/4s, 2021	5,000	4,875
Corrections Corp. of America 144A sr. unsec. notes
4 5/8s, 2023 R	20,000	20,300
Corrections Corp. of America 144A sr. unsec. notes
4 1/8s, 2020 R	15,000	15,056
Hawk Acquisition Sub, Inc. 144A sr. notes 4 1/4s, 2020	80,000	79,400
Hertz Corp. (The) company guaranty sr. unsec. notes
6 1/4s, 2022	25,000	27,156
Hertz Corp. (The) company guaranty sr. unsec. notes
5 7/8s, 2020	20,000	21,100
Landry’s Holdings II, Inc. 144A sr. unsec. notes 10 1/4s, 2018	30,000	31,800
Landry’s Inc. 144A sr. unsec. notes 9 3/8s, 2020	15,000	16,313
Post Holdings, Inc. company guaranty sr. unsec. notes
7 3/8s, 2022	5,000	5,569
Revlon Consumer Products Corp. 144A company guaranty sr.
unsec. notes 5 3/4s, 2021	75,000	76,313
Wells Enterprises, Inc. 144A sr. notes 6 3/4s, 2020	20,000	21,450
524,120
Energy (0.6%)
Access Midstream Partners LP/ACMP Finance Corp. company
guaranty sr. unsec. unsub. notes 4 7/8s, 2023	85,000	83,938
Athlon Holdings LP/Athlon Finance Corp. 144A company
guaranty sr. unsec. notes 7 3/8s, 2021	73,000	75,738

Dynamic Risk Allocation Fund   39 

CORPORATE BONDS AND NOTES (5.8%)* cont.	Principal amount	Value
Energy cont.
Atlas Pipeline Partners LP/Atlas Pipeline Finance Corp. 144A
company guaranty sr. notes 6 5/8s, 2020	$15,000	$15,938
Carrizo Oil & Gas, Inc. company guaranty sr. unsec. notes
8 5/8s, 2018	75,000	81,750
Chesapeake Energy Corp. company guaranty sr. unsec. notes
5 3/4s, 2023	20,000	20,800
Concho Resources, Inc. company guaranty sr. unsec. unsub.
notes 5 1/2s, 2023	20,000	20,475
Continental Resources, Inc. 144A company guaranty sr. unsec.
unsub. notes 4 1/2s, 2023	25,000	25,250
CrownRock LP/CrownRock Finance, Inc. 144A sr. unsec. notes
7 1/8s, 2021	30,000	30,900
EXCO Resources, Inc. company guaranty sr. unsec. notes
7 1/2s, 2018	85,000	84,575
FTS International Services, LLC/FTS International Bonds, Inc.
144A company guaranty sr. unsec. unsub. notes 8 1/8s, 2018	62,000	66,030
Gulfport Energy Corp. 144A company guaranty sr. unsec. notes
7 3/4s, 2020	70,000	74,375
Halcon Resources Corp. company guaranty sr. unsec. unsub.
notes 8 7/8s, 2021	150,000	152,625
Hiland Partners LP/Hiland Partners Finance Corp. 144A
company guaranty sr. notes 7 1/4s, 2020	25,000	27,250
Linn Energy LLC/Linn Energy Finance Corp. 144A company
guaranty sr. unsec. notes 6 1/4s, 2019	90,000	90,675
Murray Energy Corp. 144A company guaranty sr. notes
8 5/8s, 2021	5,000	5,163
Newfield Exploration Co. sr. unsec. notes 5 3/4s, 2022	60,000	64,200
Northern Oil and Gas, Inc. company guaranty sr. unsec.
notes 8s, 2020	90,000	93,600
Offshore Group Investment, Ltd. company guaranty sr. notes
7 1/2s, 2019 (Cayman Islands)	50,000	54,209
Offshore Group Investment, Ltd. 144A company guaranty
sr. notes 7 1/8s, 2023 (Cayman Islands)	55,000	56,788
Quicksilver Resources, Inc. sr. notes 11 3/4s, 2016	25,000	26,500
Rosetta Resources, Inc. company guaranty sr. unsec. unsub.
notes 5 5/8s, 2021	25,000	25,063
Sabine Pass LNG LP 144A sr. notes 6 1/2s, 2020	20,000	20,950
Samson Investment Co. 144A sr. unsec. notes 9 3/4s, 2020	110,000	114,675
SandRidge Energy, Inc. company guaranty sr. unsec. unsub.
notes 7 1/2s, 2021	15,000	15,450
Seven Generations Energy Ltd. 144A sr. unsec. notes 8 1/4s,
2020 (Canada)	25,000	26,125
Shelf Drilling Holdings Ltd. 144A sr. notes 8 5/8s, 2018	40,000	42,200
1,395,242
Financials (0.5%)
Air Lease Corp. company guaranty sr. unsec. unsub. notes
4 3/4s, 2020	30,000	30,675
Ally Financial, Inc. company guaranty sr. notes 6 1/4s, 2017	230,000	253,126
American International Group, Inc. jr. sub. FRB bonds
8.175s, 2068	185,000	242,350

40   Dynamic Risk Allocation Fund 

CORPORATE BONDS AND NOTES (5.8%)* cont.	Principal amount	Value
Financials cont.
CBRE Services, Inc. company guaranty sr. unsec. unsub.
notes 5s, 2023	$30,000	$29,925
CIT Group, Inc. 144A company guaranty notes 5 1/2s, 2019	155,000	167,788
E*Trade Financial Corp. sr. unsec. unsub. notes 6 3/8s, 2019	100,000	105,000
HBOS Capital Funding LP 144A bank guaranty jr. unsec. sub.
FRB bonds 6.071s, perpetual maturity (Jersey)	20,000	18,250
Hub International Ltd. 144A company guaranty sr. notes
8 1/8s, 2018	10,000	10,675
International Lease Finance Corp. sr. unsec. unsub. notes
4 5/8s, 2021	25,000	24,750
iStar Financial, Inc. sr. unsec. notes 7 1/8s, 2018 R	30,000	32,400
Nationstar Mortgage, LLC/Nationstar Capital Corp. 144A
company guaranty sr. unsec. unsub. notes 6 1/2s, 2021	30,000	30,600
Nuveen Investments, Inc. 144A sr. unsec. notes 9 1/2s, 2020	135,000	144,788
Nuveen Investments, Inc. 144A sr. unsec. notes 9 1/8s, 2017	25,000	26,250
Provident Funding Associates LP/PFG Finance Corp. 144A
company guaranty sr. unsec. notes 6 3/4s, 2021	75,000	76,313
Springleaf Finance Corp. 144A sr. unsec. notes 6s, 2020	30,000	28,950
1,221,840
Health care (0.4%)
Acadia Healthcare Co., Inc. 144A company guaranty sr. unsec.
notes 6 1/8s, 2021	35,000	36,488
AmSurg Corp. company guaranty sr. unsec. unsub. notes
5 5/8s, 2020	65,000	67,600
Biomet, Inc. 144A sr. unsec. notes 6 1/2s, 2020	25,000	26,313
CDRT Holding Corp. 144A sr. unsec. notes 9 1/4s, 2017 ‡‡	60,000	61,650
Emergency Medical Services Corp. company guaranty sr. unsec.
notes 8 1/8s, 2019	70,000	76,300
HCA, Inc. sr. notes 6 1/2s, 2020	210,000	237,300
IASIS Healthcare, LLC/IASIS Capital Corp. company guaranty
sr. unsec. notes 8 3/8s, 2019	55,000	57,475
IMS Health, Inc. 144A sr. unsec. notes 6s, 2020	20,000	21,150
Jaguar Holding Co. I 144A sr. unsec. notes 9 3/8s, 2017 ‡‡	20,000	21,450
Kinetic Concepts, Inc./KCI USA, Inc. company guaranty notes
10 1/2s, 2018	125,000	136,875
Sky Growth Acquisition Corp. 144A company guaranty
sr. unsec. notes 7 3/8s, 2020	85,000	90,313
Tenet Healthcare Corp. company guaranty sr. notes 6 1/4s, 2018	100,000	110,750
Tenet Healthcare Corp. 144A company guaranty sr. notes
4 1/2s, 2021	15,000	14,738
Tenet Healthcare Corp. 144A company guaranty sr. notes
4 3/8s, 2021	55,000	53,350
Valeant Pharmaceuticals International 144A company guaranty
sr. unsec. notes 6 7/8s, 2018	90,000	96,075
Valeant Pharmaceuticals International 144A company guaranty
sr. unsec. notes 6 3/4s, 2017	5,000	5,275
1,113,102
Technology (0.4%)
Avaya, Inc. 144A company guaranty notes 10 1/2s, 2021	15,000	12,600
Avaya, Inc. 144A company guaranty sr. notes 7s, 2019	300,000	279,750
Ceridian Corp. 144A sr. notes 8 7/8s, 2019	85,000	97,538

Dynamic Risk Allocation Fund  41 

CORPORATE BONDS AND NOTES (5.8%)* cont.	Principal amount	Value
Technology cont.
Ceridian Corp. 144A sr. unsec. notes 11s, 2021	$35,000	$40,250
First Data Corp. 144A company guaranty notes 8 1/4s, 2021	215,000	227,900
First Data Corp. 144A company guaranty sr. unsec. notes
11 1/4s, 2021	45,000	46,013
First Data Corp. 144A company guaranty sr. unsec. sub. notes
11 3/4s, 2021	50,000	48,375
Freescale Semiconductor, Inc. 144A company guaranty sr. notes
9 1/4s, 2018	125,000	135,938
Infor US, Inc. company guaranty sr. unsec. unsub. notes
11 1/2s, 2018	50,000	58,625
SunGard Data Systems, Inc. 144A company guaranty sr. sub.
notes 6 5/8s, 2019	30,000	31,575
978,564
Transportation (0.1%)
Swift Services Holdings, Inc. company guaranty
sr. notes 10s, 2018	100,000	114,250
Watco Cos LLC/Watco Finance Corp. 144A company guaranty
sr. unsec. notes 6 3/8s, 2023	50,000	52,625
166,875
Utilities and power (0.4%)
AES Corp. (VA) sr. unsec. notes 8s, 2020	170,000	204,000
AES Corp. (VA) sr. unsec. unsub. notes 4 7/8s, 2023	25,000	24,563
Energy Future Intermediate Holding Co., LLC/EFIH Finance, Inc.
144A notes 11 3/4s, 2022	60,000	68,325
Energy Future Intermediate Holding Co., LLC/EFIH Finance, Inc.
144A sr. notes 10s, 2020	195,000	221,081
EPE Holdings, LLC/EP Energy Bond Co., Inc. 144A sr. unsec.
notes 8 1/8s, 2017 ‡‡	30,000	31,650
FirstEnergy Corp. sr. unsec. unsub. notes 4 1/4s, 2023	20,000	19,715
GenOn Americas Generation, LLC sr. unsec. notes 9 1/8s, 2031	100,000	113,000
NRG Energy, Inc. company guaranty sr. unsec. notes
7 7/8s, 2021	115,000	128,225
Regency Energy Partners company guaranty sr. unsec. unsub.
notes 5 1/2s, 2023	30,000	31,500
Regency Energy Partners 144A company guaranty sr. unsec.
notes 4 1/2s, 2023	55,000	54,450
		896,509
Total corporate bonds and notes (cost $14,094,363)		$14,445,069
COMMODITY LINKED NOTES (4.4%)* Ω	Principal amount	Value
Deutsche Bank AG/London 144A sr. unsec. notes, 1-month USD
LIBOR less 0.16%, 2014 (Indexed to the S&P GSCI Total Return Index
multiplied by 3) (United Kingdom)	$3,350,000	$3,189,870
Deutsche Bank AG/London 144A sr. unsec. notes Ser. A, 1-month
LIBOR less 0.16%, 2013 (Indexed to the S&P GSCI TR Index multiplied
by 3) (United Kingdom)	1,548,000	1,089,018
UBS AG/London 144A sr. notes, 1-month LIBOR less 0.10%, 2014
(Indexed to the S&P GSCI TR Index multiplied by 3) (Jersey)	4,700,000	4,040,293
UBS AG/London 144A sr. notes, 1-month LIBOR less 0.10%, 2013
(Indexed to the S&P GSCI TR Index multiplied by 3) (Jersey)	1,548,000	1,090,849

42   Dynamic Risk Allocation Fund 

COMMODITY LINKED NOTES (4.4%)*  Ω cont.	Principal amount	Value
UBS AG/London 144A sr. notes 1-month USD LIBOR, 2013 (Indexed
to the UBS Bloomberg CMCI USD TR Index multiplied by 3) (Jersey)	$916,000	$671,579
Deutsche Bank AG/London 144A sr. unsec. notes, 1-month USD
LIBOR less 0.16%, 2014 (Indexed to the DB Commodity Booster OYE
Benchmark TR Index multiplied by 3) (United Kingdom)	929,000	790,765
Total commodity linked notes (cost $12,991,000)		$10,872,374
U.S. GOVERNMENT AND AGENCY
MORTGAGE OBLIGATIONS (3.0%)*	Principal amount	Value
U.S. Government Guaranteed Mortgage Obligations (0.4%)
Government National Mortgage Association Pass-Through Certificates
3s, TBA, June 1, 2043	$1,000,000	$1,018,516
1,018,516
U.S. Government Agency Mortgage Obligations (2.6%)
Federal National Mortgage Association Pass-Through Certificates
6s, TBA, June 1, 2043	2,000,000	2,176,250
4s, TBA, June 1, 2043	3,000,000	3,164,766
3 1/2s, TBA, June 1, 2028	1,000,000	1,052,500
		6,393,516
Total U.S. government and agency mortgage obligations (cost $7,499,688)		$7,412,032
U.S. TREASURY OBLIGATIONS (0.7%)*	Principal amount	Value
U.S. Treasury Bonds 4.375%, February 15, 2038 i	$248,000	$304,787
U.S. Treasury Notes 2.125%, August 15, 2021 i	1,501,000	1,548,732
Total U.S. treasury obligations (cost $1,853,519)		$1,853,519
MORTGAGE-BACKED SECURITIES (1.8%)*	Principal amount	Value
Banc of America Commercial Mortgage Trust
Ser. 06-4, Class A3A, 5.6s, 2046	$218,000	$218,650
FRB Ser. 05-1, Class AJ, 5.231s, 2042	325,000	344,923
Ser. 05-4, Class B, 5.118s, 2045	212,000	208,820
Banc of America Commercial Mortgage, Inc.
FRB Ser. 07-3, Class A3, 5.62s, 2049	46,000	46,260
Ser. 06-5, Class A2, 5.317s, 2047	54,368	55,032
Citigroup Commercial Mortgage Trust FRB Ser. 06-C4, Class AJ,
5.742s, 2049	175,000	181,091
Comm Mortgage Trust 144A
FRB Ser. 12-LC4, Class D, 5.648s, 2044	100,000	108,490
FRB Ser. 13-LC6, Class D, 4.291s, 2046	226,000	211,023
Commercial Mortgage Trust Pass-Through Certificates, FRB
Ser. 04-LB3A, Class E, 5.522s, 2037	200,000	203,660
Commercial Mortgage Trust 144A FRB Ser. 13-CR6, Class D,
4.177s, 2046	220,000	201,678
Greenwich Capital Commercial Funding Corp. FRB Ser. 05-GG3,
Class D, 4.986s, 2042	44,000	43,592
GS Mortgage Securities Trust 144A
Ser. 10-C1, Class D, 5.985s, 2043	158,403	177,024
FRB Ser. 12-GC6, Class D, 5.638s, 2045	193,000	204,155
JPMorgan Chase Commercial Mortgage Securities Corp. FRB
Ser. 06-LDP7, Class B, 5.861s, 2045	118,000	97,334

Dynamic Risk Allocation Fund   43 

MORTGAGE-BACKED SECURITIES (1.8%)* cont.		Principal amount	Value
JPMorgan Chase Commercial Mortgage Securities Corp. 144A
FRB Ser. 10-C1, Class D, 6.313s, 2043		$142,000	$163,457
FRB Ser. 11-C3, Class E, 5.533s, 2046		190,000	204,459
LB-UBS Commercial Mortgage Trust
FRB Ser. 07-C6, Class A4, 5.858s, 2040		163,000	185,103
Ser. 06-C6, Class E, 5.541s, 2039		125,000	113,050
Ser. 06-C6, Class D, 5.502s, 2039		125,000	119,063
Merrill Lynch/Countrywide Financial Corp. Commercial
Mortgage Trust Ser. 06-4, Class AJ, 5.239s, 2049 F		129,000	130,175
Morgan Stanley Capital I Trust
FRB Ser. 06-HQ8, Class D, 5.496s, 2044		125,000	115,625
Ser. 04-T13, Class A4, 4.66s, 2045		96,659	97,230
UBS-Barclay’s Commercial Mortgage Trust Ser. 13-C6, Class AS,
3.469s, 2046 F		306,000	318,402
UBS-Barclay’s Commercial Mortgage Trust 144A Ser. 13-C6,
Class D, 4.356s, 2046 F		231,000	215,674
UBS-Barclays Commercial Mortgage Trust 144A
FRB Ser. 12-C3, Class C, 4.958s, 2049 F		50,000	55,239
FRB Ser. 12-C3, Class D, 4.958s, 2049		146,000	138,444
WF-RBS Commercial Mortgage Trust 144A
FRB Ser. 12-C6, Class D, 5.563s, 2045		193,000	198,669
FRB Ser. 12-C9, Class D, 4.803s, 2045		75,000	72,375
Total mortgage-backed securities (cost $4,467,557)			$4,428,697
PURCHASED EQUITY OPTIONS	Expiration date/	Contract
OUTSTANDING (0.2%)*	strike price	amount	Value
SPDR S&P 500 ETF Trust (Put)	May-14/$145.00	$17,620	$95,058
SPDR S&P 500 ETF Trust (Put)	Apr-14/133.00	27,198	78,609
SPDR S&P 500 ETF Trust (Put)	Mar-14/130.00	27,367	61,186
SPDR S&P 500 ETF Trust (Put)	Feb-14/130.00	27,367	50,918
SPDR S&P 500 ETF Trust (Put)	Jan-14/125.00	27,361	30,959
SPDR S&P 500 ETF Trust (Put)	Dec-13/125.00	27,366	25,395
SPDR S&P 500 ETF Trust (Put)	Nov-13/125.00	27,366	16,825
SPDR S&P 500 ETF Trust (Put)	Oct-13/123.00	20,666	9,506
SPDR S&P 500 ETF Trust (Put)	Oct-13/123.00	6,700	2,812
SPDR S&P 500 ETF Trust (Put)	Sep-13/125.00	27,366	8,301
SPDR S&P 500 ETF Trust (Put)	Aug-13/115.00	27,356	1,652
SPDR S&P 500 ETF Trust (Put)	Jul-13/115.00	27,367	1,539
SPDR S&P 500 ETF Trust (Put)	Jun-13/110.00	27,361	72
Total purchased equity options outstanding (cost $1,039,082)			$382,832
INVESTMENT COMPANIES (0.1%)*		Shares	Value
Ares Capital Corp.		9,321	$159,948
Total investment companies (cost $164,750)			$159,948
PREFERRED STOCKS (—%)*		Shares	Value
Ally Financial, Inc. 144A 7.00% cum. pfd.		75	$73,528
M/I Homes, Inc. $2.438 pfd. †		1,230	30,566
Total preferred stocks (cost $98,200)			$104,094

44    Dynamic Risk Allocation Fund 

CONVERTIBLE PREFERRED STOCKS (—%)*	Shares	Value
ArcelorMittal Ser. MTUS, $1.50 cv. pfd. (France)	1,658	$34,851
EPR Properties Ser. C, $1.44 cv. pfd.	1,550	36,958
Total convertible preferred stocks (cost $75,736)		$71,809
CONVERTIBLE BONDS AND NOTES (—%)*	Principal amount	Value
Exide Technologies cv. sr. sub. notes FRN zero %, 2013	$35,000	$4,550
iStar Financial, Inc. cv. sr. unsec. unsub. notes 3s, 2016 R	35,000	43,619
Total convertible bonds and notes (cost $71,596)		$48,169
SHORT-TERM INVESTMENTS (51.7%)*	Principal amount/shares	Value
Putnam Money Market Liquidity Fund 0.05% L	11,166,000	$11,166,000
Putnam Short Term Investment Fund 0.01% L	54,887,051	54,887,051
SSgA Prime Money Market Fund 0.03% P	9,060,000	9,060,000
U.S. Treasury Bills with an effective yield of 0.18%, July 25, 2013	$1,500,000	1,499,597
U.S. Treasury Bills with an effective yield of 0.16%,
November 14, 2013 # Δ	5,000,000	4,998,403
U.S. Treasury Bills with an effective yield of 0.16%,
June 27, 2013	3,500,000	3,499,590
U.S. Treasury Bills with an effective yield of 0.14%,
January 9, 2014 Δ	16,000,000	15,992,878
U.S. Treasury Bills with an effective yield of 0.14%,
December 12, 2013 #	3,500,000	3,498,693
U.S. Treasury Bills with an effective yield of 0.13%,
September 19, 2013	3,650,000	3,649,481
U.S. Treasury Bills with an effective yield of 0.08%,
February 6, 2014 # Δ	2,500,000	2,498,450
U.S. Treasury Bills with effective yields ranging from 0.15%
to 0.18%, August 22, 2013 #	8,500,000	8,499,431
U.S. Treasury Bills with effective yields ranging from 0.08%
to 0.17%, October 17, 2013	9,140,000	9,137,924
U.S. Treasury Bills zero %, March 6, 2014 i	262,000	261,790
U.S. Treasury Bills zero %, July 5, 2013 i	155,000	155,000
Total short-term investments (cost $128,787,329)		$128,804,288
TOTAL INVESTMENTS
Total investments (cost $256,129,441)		$263,592,645

Key to holding’s currency abbreviations

CAD Canadian Dollar

Key to holding’s abbreviations

ADR American Depository Receipts: represents ownership of foreign securities on deposit with a custodian bank

ETF Exchange Traded Fund

FRB Floating Rate Bonds: the rate shown is the current interest rate at the close of the reporting period

FRN Floating Rate Notes: the rate shown is the current interest rate at the close of the reporting period

SPDR S&P Depository Receipts

TBA To Be Announced Commitments

Dynamic Risk Allocation Fund   45 

Notes to the fund’s portfolio

Unless noted otherwise, the notes to the fund’s portfolio are for the close of the fund’s reporting period, which ran from June 1, 2012 through May 31, 2013 (the reporting period). Within the following notes to the portfolio, references to “ASC 820” represent Accounting Standards Codification ASC 820 Fair Value Measurements and Disclosures and references to “OTC”, if any, represent over-the-counter.

* Percentages indicated are based on net assets of $248,897,395.

Ω The value of the commodity linked notes, which are marked-to-market daily, may be based on a multiple of the performance of the index. The multiple (or leverage) will increase the volatility of the note’s value relative to the change in the underlying index.

† Non-income-producing security.

‡‡ Income may be received in cash or additional securities at the discretion of the issuer.

# This security, in part or in entirety, was pledged and segregated with the broker to cover margin requirements for futures contracts at the close of the reporting period.

Δ This security, in part or in entirety, was pledged and segregated with the custodian for collateral on certain derivative contracts at the close of the reporting period.

## Forward commitment, in part or in entirety (Note 1).

^F Is valued at fair value following procedures approved by the Trustees. Securities may be classified as Level 2 or Level 3 for ASC 820 based on the securities’ valuation inputs. At the close of the reporting period, fair value pricing was used for certain foreign securities in the portfolio (Note 1).

ⁱ Security was pledged, or purchased with cash that was pledged, to the fund for collateral on certain derivative contracts (Note 1).

^L Affiliated company (Note 7). The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period.

^P Security was pledged, or purchased with cash that was pledged, to the fund for collateral on certain derivatives contracts. The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period (Note 1).

^R Real Estate Investment Trust.

At the close of the reporting period, the fund maintained liquid assets totaling $210,594,202 to cover certain derivatives 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.

See Note 1 to the financial statements regarding TBA’s.

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

FORWARD CURRENCY CONTRACTS at 5/31/13 (aggregate face value $57,322,959)
						Unrealized
		Contract	Delivery		Aggregate	appreciation/
Counterparty	Currency	type	date	Value	face value	(depreciation)
Bank of America N.A.
	British Pound	Sell	6/19/13	$250,828	$248,422	$(2,406)
	Canadian Dollar	Buy	7/17/13	6,938	6,849	89
	Chilean Peso	Buy	7/17/13	103,660	128,969	(25,309)
	Euro	Buy	6/19/13	793,950	808,769	(14,819)
	Japanese Yen	Sell	8/22/13	239,573	250,539	10,966
	Peruvian New Sol	Buy	7/17/13	543,150	577,197	(34,047)
	Peruvian New Sol	Sell	7/17/13	543,150	563,680	20,530

46   Dynamic Risk Allocation Fund 

FORWARD CURRENCY CONTRACTS at 5/31/13 (aggregate face value $57,322,959) cont.
						Unrealized
		Contract	Delivery		Aggregate	appreciation/
Counterparty	Currency	type	date	Value	face value	(depreciation)
Bank of America N.A. cont.
	Swiss Franc	Buy	6/19/13	$954,916	$974,312	$(19,396)
	Swiss Franc	Sell	6/19/13	954,916	975,071	20,155
Barclays Bank PLC
	Australian Dollar	Sell	7/17/13	660,912	702,133	41,221
	Brazilian Real	Buy	7/17/13	30,185	64,331	(34,146)
	British Pound	Sell	6/19/13	254,017	256,243	2,226
	Canadian Dollar	Sell	7/17/13	155,904	148,149	(7,755)
	Chilean Peso	Sell	7/17/13	118,020	98,622	(19,398)
	Euro	Buy	6/19/13	1,423,857	1,419,429	4,428
	Hong Kong Dollar	Sell	8/22/13	170,311	170,369	58
	Indonesian Rupiah	Sell	8/22/13	11,204	3,683	(7,521)
	Japanese Yen	Buy	8/22/13	883,983	887,664	(3,681)
	Malaysian Ringgit	Buy	8/22/13	488,401	508,571	(20,170)
	Malaysian Ringgit	Sell	8/22/13	497,835	501,835	4,000
	Mexican Peso	Sell	7/17/13	265,507	256,341	(9,166)
	New Taiwan Dollar	Buy	8/22/13	110,348	112,003	(1,655)
	Norwegian Krone	Buy	6/19/13	359,152	367,793	(8,641)
	Norwegian Krone	Sell	6/19/13	364,619	367,412	2,793
	Polish Zloty	Buy	6/19/13	104,565	109,375	(4,810)
	Russian Ruble	Buy	6/19/13	352,332	356,188	(3,856)
	Singapore Dollar	Sell	8/22/13	40,114	41,133	1,019
	Swedish Krona	Buy	6/19/13	20,391	25,801	(5,410)
	Swiss Franc	Sell	6/19/13	688,627	693,012	4,385
Citibank, N.A.
	Australian Dollar	Buy	7/17/13	660,626	756,371	(95,745)
	Brazilian Real	Buy	7/17/13	230,972	283,282	(52,310)
	British Pound	Sell	6/19/13	385,584	394,601	9,017
	Canadian Dollar	Sell	7/17/13	534,774	538,424	3,650
	Danish Krone	Buy	6/19/13	3,819	3,826	(7)
	Euro	Buy	6/19/13	322,883	330,532	(7,649)
	Japanese Yen	Sell	8/22/13	235,414	258,004	22,590
	Singapore Dollar	Sell	8/22/13	40,114	41,148	1,034
	South African Rand	Buy	7/17/13	111,499	111,984	(485)
	Swedish Krona	Buy	6/19/13	447,651	460,307	(12,656)
	Swiss Franc	Buy	6/19/13	383,849	380,820	3,029
	Thai Baht	Sell	8/22/13	17,807	8,352	(9,455)
	Turkish Lira	Sell	6/19/13	49,081	50,457	1,376
Credit Suisse International
	Australian Dollar	Sell	7/17/13	452,725	482,486	29,761
	Brazilian Real	Sell	7/17/13	506,711	508,168	1,457
	British Pound	Buy	6/19/13	456,836	453,859	2,977
	Canadian Dollar	Buy	7/17/13	30,448	43,261	(12,813)

Dynamic Risk Allocation Fund   47 

FORWARD CURRENCY CONTRACTS at 5/31/13 (aggregate face value $57,322,959) cont.
						Unrealized
		Contract	Delivery		Aggregate	appreciation/
Counterparty	Currency	type	date	Value	face value	(depreciation)
Credit Suisse International cont.
	Chilean Peso	Buy	7/17/13	$542,906	$570,739	$(27,833)
	Chilean Peso	Sell	7/17/13	550,053	557,655	7,602
	Chinese Yuan	Sell	8/22/13	56,099	57,171	1,072
	Euro	Buy	6/19/13	1,057,558	1,055,042	2,516
	Hungarian Forint	Sell	6/19/13	1,486	2,356	870
	Indonesian Rupiah	Sell	8/22/13	6,406	4,653	(1,753)
	Japanese Yen	Buy	8/22/13	1,810,897	1,830,833	(19,936)
	Mexican Peso	Buy	7/17/13	371,436	399,241	(27,805)
	New Taiwan Dollar	Buy	8/22/13	110,348	112,308	(1,960)
	New Zealand Dollar	Buy	7/17/13	1,426	1,497	(71)
	Norwegian Krone	Buy	6/19/13	182,327	185,374	(3,047)
	Philippine Peso	Sell	8/22/13	10,970	4,558	(6,412)
	Polish Zloty	Buy	6/19/13	109,030	111,138	(2,108)
	Russian Ruble	Sell	6/19/13	194,555	193,510	(1,045)
	South African Rand	Sell	7/17/13	205,357	217,584	12,227
	Swedish Krona	Sell	6/19/13	20,360	73	(20,287)
	Swiss Franc	Buy	6/19/13	748,140	747,651	489
	Turkish Lira	Buy	6/19/13	162,856	170,243	(7,387)
Deutsche Bank AG
	Australian Dollar	Buy	7/17/13	1,110,967	1,250,416	(139,449)
	Brazilian Real	Sell	7/17/13	108,009	93,095	(14,914)
	British Pound	Sell	6/19/13	365,682	373,260	7,578
	Canadian Dollar	Sell	7/17/13	2,601	6,688	4,087
	Euro	Buy	6/19/13	574,924	564,745	10,179
	Japanese Yen	Sell	8/22/13	349,954	379,342	29,388
	Mexican Peso	Buy	7/17/13	613,987	644,191	(30,204)
	Norwegian Krone	Buy	6/19/13	189,939	194,060	(4,121)
	Polish Zloty	Sell	6/19/13	4,920	5,579	659
	Swedish Krona	Buy	6/19/13	80,973	97,569	(16,596)
	Swiss Franc	Sell	6/19/13	299,026	294,595	(4,431)
	Turkish Lira	Buy	6/19/13	64,535	67,076	(2,541)
Goldman Sachs International
	British Pound	Sell	6/19/13	135,517	136,097	580
	Canadian Dollar	Sell	7/17/13	17,634	5,086	(12,548)
	Euro	Sell	6/19/13	1,042,481	1,035,977	(6,504)
	Japanese Yen	Buy	8/22/13	330,392	317,169	13,223
	Norwegian Krone	Sell	6/19/13	82,648	77,154	(5,494)
HSBC Bank USA, National Association
	Australian Dollar	Sell	7/17/13	490,604	491,575	971
	British Pound	Sell	6/19/13	364,011	373,194	9,183
	Canadian Dollar	Sell	7/17/13	902,468	912,937	10,469
	Euro	Buy	6/19/13	790,960	790,603	357

48   Dynamic Risk Allocation Fund 

FORWARD CURRENCY CONTRACTS at 5/31/13 (aggregate face value $57,322,959) cont.
						Unrealized
		Contract	Delivery		Aggregate	appreciation/
Counterparty	Currency	type	date	Value	face value	(depreciation)
HSBC Bank USA, National Association cont.
	Indian Rupee	Sell	8/22/13	$12,160	$1,417	$(10,743)
	Japanese Yen	Buy	8/22/13	1,624,074	1,664,085	(40,011)
	Norwegian Krone	Buy	6/19/13	367,241	371,585	(4,344)
	Philippine Peso	Buy	8/22/13	101,152	108,994	(7,842)
	Russian Ruble	Sell	6/19/13	81,826	78,802	(3,024)
	South African Rand	Buy	7/17/13	111,509	112,021	(512)
	Swiss Franc	Buy	6/19/13	1,053,127	1,072,324	(19,197)
	Swiss Franc	Sell	6/19/13	1,053,127	1,062,613	9,486
	Thai Baht	Sell	8/22/13	6,490	2,275	(4,215)
	Turkish Lira	Sell	6/19/13	54,782	46,721	(8,061)
JPMorgan Chase Bank N.A.
	Australian Dollar	Sell	7/17/13	637,823	664,301	26,478
	Brazilian Real	Buy	7/17/13	428,887	463,989	(35,102)
	British Pound	Sell	6/19/13	277,870	280,796	2,926
	Canadian Dollar	Sell	7/17/13	519,549	512,421	(7,128)
	Chilean Peso	Buy	7/17/13	417,866	448,152	(30,286)
	Chinese Yuan	Buy	8/22/13	55,340	54,651	689
	Euro	Buy	6/19/13	2,145,665	2,156,996	(11,331)
	Hungarian Forint	Sell	6/19/13	4,726	5,389	663
	Japanese Yen	Buy	8/22/13	27,197	28,093	(896)
	Malaysian Ringgit	Sell	8/22/13	7,157	3,795	(3,362)
	Mexican Peso	Sell	7/17/13	375,403	371,024	(4,379)
	New Taiwan Dollar	Buy	8/22/13	110,345	112,278	(1,933)
	Norwegian Krone	Buy	6/19/13	2,673	8,219	(5,546)
	Polish Zloty	Buy	6/19/13	109,030	109,401	(371)
	Russian Ruble	Sell	6/19/13	8,819	7,084	(1,735)
	Swedish Krona	Buy	6/19/13	451,002	466,530	(15,528)
	Swiss Franc	Sell	6/19/13	1,470,340	1,495,306	24,966
	Turkish Lira	Buy	6/19/13	162,803	170,150	(7,347)
State Street Bank and Trust Co.
	Australian Dollar	Buy	7/17/13	1,726,654	1,875,947	(149,293)
	Brazilian Real	Sell	7/17/13	107,916	109,617	1,701
	British Pound	Sell	6/19/13	185,044	190,109	5,065
	Canadian Dollar	Sell	7/17/13	863,057	866,971	3,914
	Chilean Peso	Sell	7/17/13	219,174	220,293	1,119
	Colombian Peso	Sell	7/17/13	26,003	12,100	(13,903)
	Euro	Buy	6/19/13	236,442	261,827	(25,385)
	Hungarian Forint	Sell	6/19/13	1,336	2,664	1,328
	Israeli Shekel	Buy	7/17/13	7,096	7,174	(78)
	Japanese Yen	Buy	8/22/13	450,689	456,447	(5,758)
	Mexican Peso	Sell	7/17/13	178,387	166,041	(12,346)
	Norwegian Krone	Buy	6/19/13	187,299	189,850	(2,551)

Dynamic Risk Allocation Fund    49 

FORWARD CURRENCY CONTRACTS at 5/31/13 (aggregate face value $57,322,959) cont.
						Unrealized
		Contract	Delivery		Aggregate	appreciation/
Counterparty	Currency	type	date	Value	face value	(depreciation)
State Street Bank and Trust Co. cont.
	Polish Zloty	Sell	6/19/13	$4,981	$5,637	$656
	Swedish Krona	Sell	6/19/13	42,863	60,830	17,967
	Swiss Franc	Sell	6/19/13	572,741	570,180	(2,561)
	Turkish Lira	Sell	6/19/13	113,669	114,887	1,218
UBS AG
	Australian Dollar	Sell	7/17/13	949,340	975,788	26,448
	British Pound	Buy	6/19/13	199,933	195,263	4,670
	Canadian Dollar	Buy	7/17/13	39,409	42,363	(2,954)
	Chilean Peso	Sell	7/17/13	134,112	118,882	(15,230)
	Euro	Buy	6/19/13	1,293,872	1,293,860	12
	Hungarian Forint	Sell	6/19/13	1,063	2,498	1,435
	Japanese Yen	Buy	8/22/13	774,840	796,294	(21,454)
	Mexican Peso	Buy	7/17/13	35,567	50,822	(15,255)
	Norwegian Krone	Buy	6/19/13	282,942	287,019	(4,077)
	Philippine Peso	Sell	8/22/13	116,808	114,031	(2,777)
	Russian Ruble	Sell	6/19/13	111,149	110,994	(155)
	Swedish Krona	Sell	6/19/13	271,503	273,832	2,329
	Swiss Franc	Sell	6/19/13	198,827	195,321	(3,506)
	Turkish Lira	Sell	6/19/13	223,821	220,142	(3,679)
WestPac Banking Corp.
	Australian Dollar	Buy	7/17/13	1,243,016	1,364,161	(121,145)
	British Pound	Buy	6/19/13	9,267	6,528	2,739
	Canadian Dollar	Sell	7/17/13	174,308	167,194	(7,114)
	Euro	Buy	6/19/13	903,137	903,646	(509)
	Japanese Yen	Buy	8/22/13	1,510,073	1,523,882	(13,809)
	Mexican Peso	Buy	7/17/13	596,106	628,642	(32,536)
Total						$(1,014,700)

FUTURES CONTRACTS OUTSTANDING at 5/31/13
				Unrealized
	Number of		Expiration	appreciation/
	contracts	Value	date	(depreciation)
Australian Government Treasury
Bond 10 yr (Long)	48	$5,616,685	Jun-13	$103,604
Euro STOXX 50 Index (Short)	55	1,983,028	Jun-13	(149,284)
Euro-Bobl 5 yr (Long)	40	6,552,297	Jun-13	470
Euro-Bund 10 yr (Long)	53	9,899,711	Jun-13	6,746
Euro-Buxl 30yr Bond (Long)	18	3,091,480	Jun-13	(25,592)
Euro-Schatz 2 yr (Long)	23	3,307,499	Jun-13	(1,147)
FTSE 100 Index (Short)	20	1,997,554	Jun-13	(40,621)
Japanese Government Bond
10 yr (Long)	22	31,168,583	Jun-13	(547,806)
MSCI EAFE Index Mini (Short)	35	2,956,100	Jun-13	(39,346)

50    Dynamic Risk Allocation Fund 

FUTURES CONTRACTS OUTSTANDING at 5/31/13 cont.
				Unrealized
	Number of		Expiration	appreciation/
	contracts	Value	date	(depreciation)
NASDAQ 100 Index E-Mini (Short)	56	$3,337,880	Jun-13	$(213,775)
S&P 500 Index E-Mini (Long)	83	6,760,350	Jun-13	393,542
U.K. Gilt 10 yr (Long)	63	11,085,580	Sep-13	(66,230)
U.S. Treasury Bond 30 yr (Long)	31	4,340,969	Sep-13	(5,871)
U.S. Treasury Note 2 yr (Long)	52	11,447,313	Sep-13	(7,411)
U.S. Treasury Note 5 yr (Long)	97	11,874,164	Sep-13	(3,215)
U.S. Treasury Note 10 yr (Long)	98	12,663,438	Sep-13	(22,655)
U.S. Treasury Note 10 yr (Short)	1	129,219	Sep-13	45
Total				$(618,545)

WRITTEN EQUITY OPTIONS OUTSTANDING at 5/31/13 (premiums $112,670)
	Expiration date/	Contract
	strike price	amount	Value
S&P 500 Index (Call)	Jun-13/$1,720	31,738	$10,845
Total			$10,845

OTC INTEREST RATE SWAP CONTRACTS OUTSTANDING at 5/31/13
	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)
Bank of America N.A.
$361,000 E	$(43)	9/18/23	3 month USD-	2.20%	$(8,549)
			LIBOR-BBA
Barclays Bank PLC
2,346,000 E	649	9/18/15	0.45%	3 month USD-	5,787
				LIBOR-BBA
3,146,000 E	5,383	9/18/23	3 month USD-	2.20%	(65,138)
			LIBOR-BBA
Citibank, N.A.
2,210,000 E	719	9/18/43	3 month USD-	3.15%	(66,244)
			LIBOR-BBA
5,500,000 E	1,411	9/18/15	3 month USD-	0.45%	(10,634)
			LIBOR-BBA
13,900,000 E	35,484	9/18/18	3 month USD-	1.15%	(121,030)
			LIBOR-BBA
64,600,000 E	405,254	9/18/23	3 month USD-	2.20%	(1,116,722)
			LIBOR-BBA
Credit Suisse International
705,000 E	334	9/18/18	1.15%	3 month USD-	8,272
				LIBOR-BBA
1,031,000 E	(10)	9/18/15	3 month USD-	0.45%	(2,268)
			LIBOR-BBA
487,000 E	(3,613)	9/18/43	3 month USD-	3.15%	(15,470)
			LIBOR-BBA
2,135,000 E	512	9/18/23	2.20%	3 month USD-	46,825
				LIBOR-BBA

Dynamic Risk Allocation Fund  51 

OTC INTEREST RATE SWAP CONTRACTS OUTSTANDING at 5/31/13 cont.
	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)
Goldman Sachs International
$431,000 E	$(831)	9/18/18	1.15%	3 month USD-	$4,022
				LIBOR-BBA
2,000 E	10	9/18/43	3 month USD-	3.15%	(41)
			LIBOR-BBA
545,000 E	(3,165)	9/18/23	2.20%	3 month USD-	8,627
				LIBOR-BBA
1,339,000 E	(122)	9/18/15	0.45%	3 month USD-	2,810
				LIBOR-BBA
JPMorgan Chase Bank N.A.
56,000 E	1,096	9/18/23	3 month USD-	2.20%	(222)
			LIBOR-BBA
Total					$(1,329,975)

^E Extended effective date.

OTC TOTAL RETURN SWAP CONTRACTS OUTSTANDING at 5/31/13
			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)
Bank of America N.A.
	$3,800,000	9/21/21	(2.305%)	USA Non Revised	$12,882
				Consumer Price
				Index-Urban (CPI-U)
baskets	228,973	3/14/14	(3 month USD-	A basket	1,495,959
			LIBOR-BBA plus	(MLTRFCF2) of
			0.10%)	common stocks
units	5,817	3/14/14	3 month USD-	Russell 1000 Total	(1,158,329)
			LIBOR-BBA minus	Return Index
			0.07%
Barclays Bank PLC
	$2,900,000	12/7/22	(2.7475%)	USA Non Revised	(91,550)
				Consumer Price
				Index-Urban (CPI-U)
	5,465,399	1/12/41	4.00% (1 month	Synthetic TRS Index	131,001
			USD-LIBOR)	4.00% 30 year Fannie
				Mae pools
	3,700,000	5/8/23	(2.59%)	USA Non Revised	(39,442)
				Consumer Price
				Index-Urban (CPI-U)
Citibank, N.A.
	800,000	11/7/22	(2.73%)	USA Non Revised	(23,648)
				Consumer Price
				Index-Urban (CPI-U)
	1,500,000	8/7/22	2.515%	USA Non Revised	13,965
				Consumer Price
				Index-Urban (CPI-U)

52   Dynamic Risk Allocation Fund 

OTC TOTAL RETURN SWAP CONTRACTS OUTSTANDING at 5/31/13 cont.
			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)
Citibank, N.A. cont.
	$1,700,000	3/7/23	(2.80%)	USA Non Revised	$(50,541)
				Consumer Price
				Index-Urban (CPI-U)
baskets	30	2/13/14	(3 month USD-	A basket	(13,027)
			LIBOR-BBA plus	(CGPUTQL2) of
			0.10%)	common stocks
baskets	70	2/13/14	(3 month USD-	A basket	(30,392)
			LIBOR-BBA plus	(CGPUTQL2) of
			0.10%)	common stocks
shares	20,457	9/10/13	(3 month USD-	Vanguard Index	(54,605)
			LIBOR-BBA)	Funds — MSCI
				Emerging Markets
				ETF
units	1,616	2/13/14	3 month USD-	Russell 1000 Total	10,447
			LIBOR-BBA minus	Return Index
			0.15%
units	849	2/13/14	3 month USD-	Russell 1000 Total	5,448
			LIBOR-BBA minus	Return Index
			0.15%
Credit Suisse International
	$2,600,000	1/9/23	(2.76%)	USA Non Revised	(82,966)
				Consumer Price
				Index-Urban (CPI-U)
	3,400,000	8/7/22	(2.515%)	USA Non Revised	(31,654)
				Consumer Price
				Index-Urban (CPI-U)
	1,600,000	8/8/22	(2.5325%)	USA Non Revised	(17,616)
				Consumer Price
				Index-Urban (CPI-U)
	700,000	9/10/22	(2.5925%)	USA Non Revised	(9,240)
				Consumer Price
				Index-Urban (CPI-U)
	42,883	9/19/13	(3 month USD-	Vanguard Index	(47,125)
			LIBOR-BBA plus	Funds — MSCI
			0.05%)	Emerging Markets
				ETF
	3,300,000	2/8/23	(2.81%)	USA Non Revised	(106,851)
				Consumer Price
				Index-Urban (CPI-U)
shares	34,150	11/25/13	(3 month USD-	Vanguard Index	(59,808)
			LIBOR-BBA plus	Funds — MSCI
			0.10%)	Emerging Markets
				ETF
shares	20,127	7/18/13	(3 month USD-	Vanguard Index	(2,354)
			LIBOR-BBA plus	Funds — MSCI
			0.10%)	Emerging Markets
				ETF

Dynamic Risk Allocation Fund  53 

OTC TOTAL RETURN SWAP CONTRACTS OUTSTANDING at 5/31/13 cont.
			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 cont.
shares	94,529	7/2/13	(3 month USD-	Vanguard Index	$(102,629)
			LIBOR-BBA plus	Funds — MSCI
			0.10%)	Emerging Markets
				ETF
shares	6,269	2/10/14	(3 month USD-	Vanguard Index	(20,563)
			LIBOR-BBA plus	Funds — MSCI
			0.15%)	Emerging Markets
				ETF
shares	36,117	2/20/14	(3 month USD-	Vanguard Index	(94,156)
			LIBOR-BBA plus	Funds — MSCI
			0.20%)	Emerging Markets
				ETF
Deutsche Bank AG
	$500,000	11/7/21	(2.43%)	USA Non Revised	(4,736)
				Consumer Price
				Index-Urban (CPI-U)
	36,409	5/19/14	(3 month USD-	Vanguard FTSE	(89,457)
			LIBOR-BBA plus	Emerging Markets
			0.25%)	ETF
Goldman Sachs International
	1,500,000	10/5/22	(2.73%)	USA Non Revised	(38,745)
				Consumer Price
				Index-Urban (CPI-U)
	1,700,000	4/5/23	(2.7475%)	USA Non Revised	(40,664)
				Consumer Price
				Index-Urban (CPI-U)
JPMorgan Chase Bank N.A.
	13,500,000	8/7/22	(2.515%)	USA Non Revised	(119,367)
				Consumer Price
				Index-Urban (CPI-U)
Total					$(659,763)

OTC CREDIT DEFAULT CONTRACTS OUTSTANDING at 5/31/13
		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.
DJ CDX NA IG Series	BBB+/P	$(39,166)	$5,750,000	6/20/18	100 bp	$27,681
20 Index
Barclays Bank PLC
DJ CDX EM Series	BB+/P	(1,284,000)	10,700,000	6/20/18	500 bp	(73,069)
19 Index
DJ CDX NA HY	B+/P	(527,768)	16,239,000	6/20/18	500 bp	418,030
Series 20 Index

54   Dynamic Risk Allocation Fund 

OTC CREDIT DEFAULT CONTRACTS OUTSTANDING at 5/31/13 cont.
		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)
Barclays Bank PLC cont.
DJ CDX NA IG Series	BBB+/P	$(6,649)	$1,835,000	6/20/18	100 bp	$15,143
20 Index
DJ CDX NA IG Series	BBB+/P	(2,963)	200,000	6/20/18	100 bp	(810)
20 Index
Citibank, N.A.
DJ CDX EM Series	BB+/P	(84,100)	725,000	6/20/18	500 bp	(2,554)
19 Index
DJ CDX NA IG Series	BBB+/P	(2,245)	460,000	6/20/18	100 bp	3,230
20 Index
Credit Suisse International
DJ CDX NA CMBX	BBB–/P	88	3,000	5/11/63	300 bp	14
BBB Index
DJ CDX NA CMBX	BBB–/P	191	10,000	5/11/63	300 bp	(52)
BBB Index
DJ CDX NA CMBX	BBB–/P	101	13,000	5/11/63	300 bp	(215)
BBB Index
DJ CDX NA CMBX	BBB–/P	609	20,000	5/11/63	300 bp	122
BBB Index
DJ CDX NA CMBX	BBB–/P	352	20,000	5/11/63	300 bp	(134)
BBB Index
DJ CDX NA CMBX	BBB–/P	353	23,000	5/11/63	300 bp	(206)
BBB Index
DJ CDX NA CMBX	BBB–/P	302	26,000	5/11/63	300 bp	(330)
BBB Index
DJ CDX NA CMBX	BBB–/P	35,330	461,000	5/11/63	300 bp	24,120
BBB Index
DJ CDX NA HY	B+/P	(78,750)	2,000,000	6/20/18	500 bp	35,512
Series 20 Index
DJ CDX NA IG Series	BBB+/P	(13,844)	2,800,000	6/20/18	100 bp	19,485
20 Index
Deutsche Bank AG
DJ CDX EM Series	BB+/P	(352,500)	3,000,000	6/20/18	500 bp	(19,237)
19 Index
DJ CDX EM Series	BB+/P	(121,000)	1,000,000	6/20/18	500 bp	(7,829)
19 Index
DJ CDX EM Series	BB+/P	(101,700)	900,000	6/20/18	500 bp	(1,471)
19 Index
DJ CDX NA HY	B+/P	(173,906)	5,300,000	6/20/18	500 bp	144,348
Series 20 Index
DJ CDX NA HY	B+/P	(210,000)	4,000,000	6/20/18	500 bp	9,080
Series 20 Index
DJ CDX NA IG Series	BBB+/P	(1,821)	540,000	6/20/18	100 bp	4,591
20 Index

Dynamic Risk Allocation Fund   55 

OTC CREDIT DEFAULT CONTRACTS OUTSTANDING at 5/31/13 cont.
		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)
Goldman Sachs International
DJ CDX NA IG Series	BBB+/P	$(14,648)	$2,665,000	6/20/18	100 bp	$17,519
20 Index
JPMorgan Chase Bank N.A.
DJ CDX EM Series	BB+/P	(112,800)	800,000	12/20/17	500 bp	(27,580)
18 Index
DJ CDX EM Series	BB+/P	(64,000)	500,000	6/20/18	500 bp	(10,609)
19 Index
DJ CDX NA HY	B+/P	(941,578)	28,425,000	6/20/18	500 bp	702,117
Series 20 Index
Total						$1,276,896

* Payments related to the referenced 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 May 31, 2013. Securities rated by Putnam are indicated by “/P.”

ASC 820 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 the close of the reporting period:

		Valuations inputs
Investments in securities:	Level 1	Level 2	Level 3
Common stocks:
Basic materials	$1,771,436	$2,387,672	$—
Capital goods	2,426,802	1,600,917	—
Communication services	1,917,997	1,203,163	28,070
Conglomerates	1,504,815	348,450	—
Consumer cyclicals	9,986,277	3,914,000	—
Consumer staples	6,344,996	3,478,458	—
Energy	5,104,687	1,809,818	—
Financials	16,729,561	6,435,406	—
Health care	7,990,565	2,888,380	—
Technology	11,745,220	1,115,233	—
Transportation	1,352,993	490,228	—
Utilities and power	1,535,343	899,327	—
Total common stocks	68,410,692	26,571,052	28,070

56   Dynamic Risk Allocation Fund 

		Valuation inputs
Investments in securities:	Level 1	Level 2	Level 3
Commodity linked notes	$—	$10,872,374	$—
Convertible bonds and notes	—	48,169	—
Convertible preferred stocks	—	71,809	—
Corporate bonds and notes	—	14,445,069	—
Investment companies	159,948	—	—
Mortgage-backed securities	—	4,428,697	—
Preferred stocks	—	104,094	—
Purchased equity options outstanding	—	382,832	—
U.S. government and agency mortgage obligations	—	7,412,032	—
U.S. treasury obligations	—	1,853,519	—
Short-term investments	75,113,051	53,691,237	—
Totals by level	$143,683,691	$119,880,884	$28,070
		Valuation inputs
Other financial instruments:	Level 1	Level 2	Level 3
Forward currency contracts	$—	$(1,014,700)	$—
Futures contracts	(618,545)	—	—
Written equity options outstanding	—	(10,845)	—
Interest rate swap contracts	—	(1,773,043)	—
Total return swap contracts	—	(659,763)	—
Credit default contracts	—	5,373,008	—
Totals by level	$(618,545)	$1,914,657	$—

At the start and close of the reporting period, Level 3 investments in securities were not considered a significant portion of the fund’s portfolio. 

The accompanying notes are an integral part of these financial statements.

Dynamic Risk Allocation Fund  57 

Statement of assets and liabilities 5/31/13

ASSETS
Investment in securities, at value (Note 1):
Unaffiliated issuers (identified cost $190,076,390)	$197,539,594
Affiliated issuers (identified cost $66,053,051) (Notes 1 and 7)	66,053,051
Foreign currency (cost $6,899) (Note 1)	6,780
Dividends, interest and other receivables	914,509
Receivable for shares of the fund sold	3,432,693
Receivable for investments sold	213,235
Unrealized appreciation on forward currency contracts (Note 1)	434,020
Unrealized appreciation on OTC swap contracts (Note 1)	3,167,037
Premium paid on OTC swap contracts (Note 1)	4,141,222
Total assets	275,902,141
LIABILITIES
Payable for investments purchased	1,259,293
Payable for purchases of delayed delivery securities (Note 1)	7,535,924
Payable for shares of the fund repurchased	556,672
Payable for compensation of Manager (Note 2)	179,056
Payable for custodian fees (Note 2)	39,019
Payable for investor servicing fees (Note 2)	80,992
Payable for Trustee compensation and expenses (Note 2)	5,386
Payable for administrative services (Note 2)	456
Payable for distribution fees (Note 2)	50,049
Payable for variation margin (Note 1)	29,895
Unrealized depreciation on OTC swap contracts (Note 1)	3,879,879
Premium received on OTC swap contracts (Note 1)	488,178
Unrealized depreciation on forward currency contracts (Note 1)	1,448,720
Written options outstanding, at value (premiums $112,670) (Notes 1 and 3)	10,845
Collateral on certain derivative contracts, at value (Note 1)	11,330,309
Other accrued expenses	110,073
Total liabilities	27,004,746
Net assets	$248,897,395
REPRESENTED BY
Paid-in capital (Unlimited shares authorized) (Notes 1 and 4)	$248,056,840
Distributions in excess of net investment income (Note 1)	(269,096)
Accumulated net realized loss on investments and foreign currency transactions (Note 1)	(4,106,133)
Net unrealized appreciation of investments and assets and liabilities in foreign currencies	5,215,784
Total — Representing net assets applicable to capital shares outstanding	$248,897,395

(Continued on next page)

58   Dynamic Risk Allocation Fund 

Statement of assets and liabilities (Continued)

COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE
Net asset value and redemption price per class A share ($68,439,608 divided by 6,436,391 shares)	$10.63
Offering price per class A share (100/94.25 of $10.63)*	$11.28
Net asset value and offering price per class B share ($2,852,438 divided by 270,908 shares)**	$10.53
Net asset value and offering price per class C share ($21,014,806 divided by 1,998,768 shares)**	$10.51
Net asset value and redemption price per class M share ($357,517 divided by 33,543 shares)	$10.66
Offering price per class M share (100/96.50 of $10.66)*	$11.05
Net asset value, offering price and redemption price per class R share
($457,710 divided by 43,209 shares)	$10.59
Net asset value, offering price and redemption price per class R5 share
($10,523 divided by 986 shares)†	$10.68
Net asset value, offering price and redemption price per class R6 share
($2,713,353 divided by 254,045 shares)	$10.68
Net asset value, offering price and redemption price per class Y share
($153,051,440 divided by 14,364,609 shares)	$10.65

* On single retail sales of less than $50,000. On sales of $50,000 or more the offering price is reduced.

** Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.

† Net asset value may not recalculate due to rounding of fractional shares.

The accompanying notes are an integral part of these financial statements.

Dynamic Risk Allocation Fund   59 

Statement of operations Year ended 5/31/13
INVESTMENT INCOME
Dividends (net of foreign tax of $55,957)	$2,059,708
Interest (net of foreign tax of $12) (including interest income of $60,732 from investments
in affiliated issuers) (Note 6)	738,912
Securities lending (Note 1)	1,861
Total investment income	2,800,481
EXPENSES
Compensation of Manager (Note 2)	1,717,612
Investor servicing fees (Note 2)	385,754
Custodian fees (Note 2)	131,066
Trustee compensation and expenses (Note 2)	15,601
Distribution fees (Note 2)	271,846
Administrative services (Note 2)	6,025
Amortization of offering costs (Note 1)	45,881
Other	185,057
Fees waived and reimbursed by Manager (Note 2)	(298,888)
Total expenses	2,459,954
Expense reduction (Note 2)	(366)
Net expenses	2,459,588
Net investment income	340,893
Net realized loss on investments (Notes 1 and 3)	(1,712,975)
Net realized gain on swap contracts (Note 1)	7,190,125
Net realized gain on futures contracts (Note 1)	203,354
Net realized loss on foreign currency transactions (Note 1)	(1,848,877)
Net realized loss on written options (Notes 1 and 3)	(2,403,494)
Net unrealized depreciation of assets and liabilities in foreign currencies during the year	(771,437)
Net unrealized appreciation of investments, futures contracts, swap contracts, and written
options during the year	9,548,651
Net gain on investments	10,205,347
Net increase in net assets resulting from operations	$10,546,240

The accompanying notes are an integral part of these financial statements.

60   Dynamic Risk Allocation Fund 

Statement of changes in net assets

		For the period 9/19/11
		(commencement of
INCREASE IN NET ASSETS	Year ended 5/31/13	operations) to 5/31/12
Operations:
Net investment income (loss)	$340,893	$(38,824)
Net realized gain on investments
and foreign currency transactions	1,428,133	1,785,035
Net unrealized appreciation (depreciation) of investments
and assets and liabilities in foreign currencies	8,777,214	(3,561,430)
Net increase (decrease) in net assets resulting
from operations	10,546,240	(1,815,219)
Distributions to shareholders (Note 1):
From ordinary income
Net investment income
Class A	(819,727)	(161,991)
Class B	(36,913)	(1,006)
Class C	(201,447)	(4,876)
Class M	(1,835)	(2,469)
Class R	(6,777)	(807)
Class R5	(199)	—
Class R6	(204)	—
Class Y	(2,678,694)	(15,416)
Net realized short-term gain on investments
Class A	(767,685)	(77,866)
Class B	(37,957)	(593)
Class C	(201,655)	(2,362)
Class M	(3,701)	(1,294)
Class R	(6,284)	(423)
Class R5	(179)	—
Class R6	(179)	—
Class Y	(2,221,925)	(7,022)
From net realized long-term gain on investments
Class A	(149,066)	—
Class B	(7,370)	—
Class C	(39,157)	—
Class M	(719)	—
Class R	(1,220)	—
Class R5	(35)	—
Class R6	(35)	—
Class Y	(431,448)	—
Increase from capital share transactions (Note 4)	118,377,574	114,679,336
Total increase in net assets	121,309,403	112,587,992
NET ASSETS
Beginning of year (Note 6)	127,587,992	15,000,000
End of year (including distributions in excess of net
investment income of $269,096 and undistributed net
investment income of $202,058, respectively)	$248,897,395	$127,587,992

The accompanying notes are an integral part of these financial statements.

Dynamic Risk Allocation Fund  61 

Financial highlights (For a common share outstanding throughout the period)

INVESTMENT OPERATIONS:					LESS DISTRIBUTIONS:					RATIOS AND SUPPLEMENTAL DATA:
												Ratio of net
											Ratio	investment
	Net asset		Net realized								of expenses	income (loss)
	value,		and unrealized	Total from	From	From	Total	Net asset	Total return	Net assets,	to average	to average	Portfolio
	beginning	Net investment	gain (loss)	investment	net investment	net realized gain	distribu-	value, end	at net asset	end of period	net assets	net assets	turnover
Period ended	of period	income (loss) a	on investments	operations	income	on investments	tions	of period	value (%) b	(in thousands)	(%) c,d	(%) d	(%)
Class A
May 31, 2013	$10.24	.01	.81	.82	(.20)	(.23)	(.43)	$10.63	7.97	$68,440	1.40	.06	40
May 31, 2012†	10.00	(.02)	.39	.37	(.09)	(.04)	(.13)	10.24	3.77*	38,666	.98*	(.22)*	41*
Class B
May 31, 2013	$10.20	(.07)	.81	.74	(.18)	(.23)	(.41)	$10.53	7.22	$2,852	2.15	(.61)	40
May 31, 2012†	10.00	(.07)	.38	.31	(.07)	(.04)	(.11)	10.20	3.19*	727	1.50*	(.68)*	41*
Class C
May 31, 2013	$10.19	(.06)	.80	.74	(.19)	(.23)	(.42)	$10.51	7.18	$21,015	2.15	(.57)	40
May 31, 2012†	10.00	(.07)	.38	.31	(.08)	(.04)	(.12)	10.19	3.21*	3,151	1.50*	(.66)*	41*
Class M
May 31, 2013	$10.21	(.05)	.82	.77	(.09)	(.23)	(.32)	$10.66	7.52	$358	1.90	(.47)	40
May 31, 2012†	10.00	(.06)	.39	.33	(.08)	(.04)	(.12)	10.21	3.39*	363	1.33*	(.60)*	41*
Class R
May 31, 2013	$10.23	(.01)	.80	.79	(.20)	(.23)	(.43)	$10.59	7.70	$458	1.65	(.11)	40
May 31, 2012†	10.00	(.05)	.40	.35	(.08)	(.04)	(.12)	10.23	3.59*	102	1.15*	(.45)*	41*
Class R5
May 31, 2013††	$10.56	.03	.53	.56	(.21)	(.23)	(.44)	$10.68	5.26*	$11	1.05*	.25*	40
Class R6
May 31, 2013††	$10.56	.08	.49	.57	(.22)	(.23)	(.45)	$10.68	5.31*	$2,713	1.05*	.63*	40
Class Y
May 31, 2013	$10.26	.03	.82	.85	(.23)	(.23)	(.46)	$10.65	8.21	$153,051	1.15	.32	40
May 31, 2012†	10.00	.01	.38	.39	(.09)	(.04)	(.13)	10.26	4.02*	84,578	.80*	.11*	41*

* Not annualized 

† For the period September 19, 2011 (commencement of operations) to May 31, 2012.

†† For the period July 3, 2012 (commencement of operations) to May 31, 2013.

^a Per share net investment income (loss) has been determined on the basis of the weighted average number of shares outstanding during the period.

^b Total return assumes dividend reinvestment and does not reflect the effect of sales charges.

^c Includes amounts paid through expense offset arrangements (Note 2).

^d Reflects an involuntary contractual expense limitation in effect during the period. As a result of such limitation, the expenses of each class reflect a reduction of the following amounts as a percentage of average net assets (Note 2):

	Percentage of average net assets
	5/31/13	5/31/12
Class A	0.16%	0.61%
Class B	0.16	0.61
Class C	0.16	0.61
Class M	0.16	0.61
Class R	0.16	0.61
Class R5	0.08	N/A
Class R6	N/A	N/A
Class Y	0.16	0.61

The accompanying notes are an integral part of these financial statements.

62   Dynamic Risk Allocation Fund  Dynamic Risk Allocation Fund    63 

Notes to financial statements 5/31/13

Within the following Notes to financial statements, references to “State Street” represent State Street Bank and Trust Company, references to “the SEC” represent the Securities and Exchange Commission, references to “Putnam Management” represent Putnam Investment Management, LLC, the fund’s manager, an indirect wholly-owned subsidiary of Putnam Investments, LLC and references to “OTC”, if any, represent over-the-counter. Unless otherwise noted, the “reporting period” represents the period from June 1, 2012 through May 31, 2013.

Putnam Dynamic Risk Allocation Fund (the fund) is a diversified series of Putnam Funds Trust (the Trust), a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The investment objective of the fund is to seek total return. Total return is composed of capital appreciation and income. The fund invests in a diversified set of asset classes. By investing in a broader set of asset classes than a traditional balanced fund, and by using leverage to increase the fund’s exposure to asset classes, Putnam Management believes the fund may achieve a higher total return than a traditional balanced fund with approximately the same amount of risk as a traditional balanced fund. Risk is measured by the volatility of the fund’s investment portfolio. The fund may invest without limit in U.S., international, and emerging markets equity securities (growth or value stocks or both) of companies of any size and fixed-income securities of corporate or government issuers without constraint as to maturity or credit quality (including in high yield securities, which are sometimes referred to as “junk bonds”); mortgage- and asset-backed securities; inflation-protected securities; commodities; and real estate investment trusts. These asset classes offer different return potential and exposure to different investment risks.

The fund offers class A, class B, class C, class M, class R, class R5, class R6 and class Y shares. The fund began offering class R5 and R6 shares on July 2, 2012. Class A and class M shares are sold with a maximum front-end sales charge of 5.75% and 3.50%, respectively, and generally do not pay a contingent deferred sales charge. Class B shares, which convert to class A shares after approximately eight years, do not pay a front-end sales charge and are subject to a contingent deferred sales charge if those shares are redeemed within six years of purchase. Class C shares have a one-year 1.00% contingent deferred sales charge and do not convert to class A shares. Class R shares, which are not available to all investors, are sold at net asset value. The expenses for class A, class B, class C, class M and class R shares may differ based on the distribution fee of each class, which is identified in Note 2. Class R5, class R6 and class Y shares, which are sold at net asset value, are generally subject to the same expenses as class A, class B, class C, class M and class R shares, but do not bear a distribution fee and in the case of class R5 and class R6 shares, bear a lower investor servicing fee, which is identified in Note 2. Class R5, class R6 and class Y shares are not available to all investors.

In the normal course of business, the fund enters into contracts that may include agreements to indemnify another party under given circumstances. The fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be, but have not yet been, made against the fund. However, the fund’s management team expects the risk of material loss to be remote.

Note 1: Significant accounting policies

The following is a summary of significant accounting policies consistently followed by the fund in the preparation of its financial statements. The preparation of financial statements is in conformity with accounting principles generally accepted in the United States of America and requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and the reported amounts of increases and decreases in net assets from operations. Actual results could differ from those estimates. Subsequent events after the Statement of assets and liabilities date through the date that the financial statements were issued have been evaluated in the preparation of the financial statements.

Investment income, realized and unrealized gains and losses and expenses of the fund are borne pro-rata based on the relative net assets of each class to the total net assets of the fund, except that each class bears expenses unique to that class (including the distribution fees applicable to such classes). Each class votes as a class only with respect to its own distribution plan or other matters on which a class vote is required by law or determined by the Trustees. If the fund were liquidated, shares of each class would receive their pro-rata share of the net assets of the fund. In addition, the Trustees declare separate dividends on each class of shares.

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, and are classified as Level 1 securities under Accounting Standards Codification ASC 820 Fair Value Measurements and Disclosures (ASC 820).

64   Dynamic Risk Allocation Fund 

If no sales are reported, as in the case of some securities that are traded OTC, a security is valued at its last reported bid price and is generally categorized as a Level 2 security.

Investments in open-end investment companies (excluding exchange traded funds), if any, which can be classified as Level 1 or Level 2 securities, are based on their net asset value. The net asset value of such investment companies equals the total value of their assets less their liabilities and divided by the number of their outstanding shares.

Market quotations are not considered to be readily available for certain debt obligations and other investments; such investments are valued 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 consider such factors as security prices, yields, maturities and ratings). These securities will generally be categorized as Level 2.

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, currency valuations and comparisons to the valuation of American Depository Receipts, exchange-traded funds and futures contracts. These securities, which would generally be classified as Level 1 securities, will be transferred to Level 2 of the fair value hierarchy when they are valued at fair value. 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. At the close of the reporting period, fair value pricing was used for certain foreign securities in the portfolio. 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 that 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. These valuations consider such factors as significant market or specific security events such as interest rate or credit quality changes, various relationships with other securities, discount rates, U.S. Treasury, U.S. swap and credit yields, index levels, convexity exposures and recovery rates. These securities are classified as Level 2 or as Level 3 depending on the priority of the significant inputs.

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.

Security transactions and related investment income Security transactions are recorded on the trade date (the date the order to buy or sell is executed). Gains or losses on securities sold are determined on the identified cost basis.

Interest income, net of any applicable withholding taxes, is recorded on the accrual basis. Dividend income, net of any applicable withholding taxes, is recognized on the ex-dividend date except that certain dividends from foreign securities, if any, are recognized as soon as the fund is informed of the ex-dividend date. Non-cash dividends, if any, are recorded at the fair market value of the securities received. Dividends representing a return of capital or capital gains, if any, are reflected as a reduction of cost and/or as a realized gain.

All premiums/discounts are amortized/accreted on a yield-to-maturity basis.

Securities purchased or sold on a forward commitment or delayed delivery basis may be settled a month or more after the trade date; interest income is accrued based on the terms of the securities. Losses may arise due to changes in the market value of the underlying securities or if the counterparty does not perform under the contract.

Foreign currency translation The accounting records of the fund are maintained in U.S. dollars. The market value of foreign securities, currency holdings, and other assets and liabilities is recorded in the books and records of the fund after translation to U.S. dollars based on the exchange rates on that day. The cost of each security is determined using historical exchange rates. Income and withholding taxes are translated at prevailing exchange rates when earned or incurred. The fund does not isolate that portion of realized or unrealized gains or losses resulting from changes in the foreign exchange rate on investments from fluctuations arising from changes in the market

Dynamic Risk Allocation Fund   65 

prices of the securities. Such gains and losses are included with the net realized and unrealized gain or loss on investments. Net realized gains and losses on foreign currency transactions represent net realized exchange gains or losses on closed forward currency contracts, disposition of foreign currencies, currency gains and losses realized between the trade and settlement dates on securities transactions and the difference between the amount of investment income and foreign withholding taxes recorded on the fund’s books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized appreciation and depreciation of assets and liabilities in foreign currencies arise from changes in the value of open forward currency contracts and assets and liabilities other than investments at the period end, resulting from changes in the exchange rate.

Options contracts The fund uses options contracts to hedge duration and convexity, to isolate prepayment risk, to gain exposure to interest rates, to hedge against changes in values of securities it owns, owned or expects to own, to hedge prepayment risk, to generate additional income for the portfolio, to enhance the return on a security owned and to enhance the return on securities owned.

The potential risk to the fund is that the change in value of 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, if interest or exchange rates move unexpectedly or if the counterparty to the contract is unable to perform. 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.

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. OTC traded options are valued using prices supplied by dealers. Forward premium swap option contracts include premiums that do not settle until the expiration date of the contract. The delayed settlement of the premiums are factored into the daily valuation of the option contracts.

Written option contracts outstanding at period end, if any, are listed after the fund’s portfolio. For the fund’s average contract amount, see Note 5.

Futures contracts The fund uses futures contracts to manage exposure to market risk, to hedge prepayment risk, to hedge interest rate risk, to gain exposure to interest rates and to equitize cash.

The potential risk to the fund is that the change in value of futures 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, if interest or exchange rates move 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. Risks may exceed amounts recognized on the Statement of assets and liabilities. 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.

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.”

Futures contracts outstanding at period end, if any, are listed after the fund’s portfolio. For the fund’s average number of contracts, see Note 5.

Forward currency contracts The fund buys and sells 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 hedge foreign exchange risk and to gain exposure on currency.

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. 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 when the contract matures or by delivery of the currency. 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. Risks may exceed amounts recognized on the Statement of assets and liabilities.

Forward currency contracts outstanding at period end, if any, are listed after the fund’s portfolio. For the fund’s average contract amount, see Note 5.

66   Dynamic Risk Allocation Fund 

Interest rate swap contracts The fund entered into OTC and/or centrally cleared interest rate swap contracts, which are arrangements between two parties to exchange cash flows based on a notional principal amount, to hedge interest rate risk, to gain exposure on interest rates and to hedge prepayment risk.

An OTC 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. OTC and centrally cleared interest rate swap contracts are marked to market daily based upon quotations from an independent pricing service or market makers. Any change is recorded as an unrealized gain or loss on OTC interest rate swaps. Daily fluctuations in the value of centrally cleared interest rate swaps are recorded as a receivable or payable for variation margin on the Statement of assets and liabilities. Payments, including upfront premiums, received or made are recorded as realized gains or losses at the closing of the contract. Certain OTC and centrally cleared 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, in the case of OTC interest rate contracts, or the central clearing agency or a clearing member defaults, in the case of centrally cleared interest rate swap contracts, on its respective obligation to perform under the contract. The fund’s maximum risk of loss from counterparty risk or central clearing risk is the fair value of the contract. This risk may be mitigated for OTC interest rate swap contracts by having a master netting arrangement between the fund and the counterparty and for centrally cleared interest rate swap contracts through the daily exchange of mark to market margin. There is minimal counterparty risk with respect to centrally cleared interest rate swap contracts due to the clearinghouse guarantee fund and other resources that are available in the event of a clearing member default. Risk of loss may exceed amounts recognized on the Statement of assets and liabilities.

Interest rate swap contracts outstanding at period end, if any, are listed after the fund’s portfolio. For the fund’s average notional amount see Note 5.

Total return swap contracts The fund entered into OTC 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 hedge sector exposure, to manage exposure to specific sectors or industries, to gain exposure to specific markets or countries, and to gain exposure to specific sectors or industries.

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. OTC total return 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 an unrealized gain or loss. Payments received or made are recorded as realized gains or losses. Certain OTC 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. Risk of loss may exceed amounts recognized on the Statement of assets and liabilities.

OTC total return swap contracts outstanding at period end, if any, are listed after the fund’s portfolio. For the fund’s average notional amount, see Note 5.

Credit default contracts The fund entered into OTC credit default contracts to hedge credit risk, to hedge market risk and to gain exposure on individual names and/or baskets of securities.

In an OTC credit default contract, the protection buyer typically makes an upfront 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 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. Periodic payments received or paid by the fund are recorded as realized gains or losses. The OTC 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

Dynamic Risk Allocation Fund    67 

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 OTC credit default contracts which would mitigate its risk of loss. Risks of loss may exceed amounts recognized on the Statement of assets and liabilities. 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 OTC credit default contract.

OTC credit default contracts outstanding, including their respective notional amounts at period end, if any, are listed after the fund’s portfolio. For the fund’s average notional amount, see Note 5.

Master agreements The fund is a party to ISDA (International Swaps and Derivatives Association, Inc.) Master Agreements (Master Agreements) with certain counterparties that govern OTC 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 the close of the reporting period, the fund had a net liability position of $2,854,497 on open derivative contracts subject to the Master Agreements. Collateral posted by the fund for these agreements totaled $1,918,889.

TBA purchase commitments The fund may enter into TBA (to be announced) commitments to purchase securities for a fixed unit price at a future date beyond customary settlement time. Although the unit price has been established, the principal value has not been finalized. However, it is anticipated that the amount of the commitments will not significantly differ from the principal amount. The fund holds, and maintains until settlement date, cash or high-grade debt obligations in an amount sufficient to meet the purchase price, or the fund may enter into offsetting contracts for the forward sale of other securities it owns. Income on the securities will not be earned until settlement date. TBA purchase commitments may be considered securities themselves, and involve a risk of loss if the value of the security to be purchased declines prior to the settlement date, which risk is in addition to the risk of decline in the value of the fund’s other assets. Unsettled TBA purchase commitments are valued at fair value of the underlying securities, according to the procedures described under “Security valuation” above. The contract is marked to market daily and the change in market value is recorded by the fund as an unrealized gain or loss.

Although the fund will generally enter into TBA purchase commitments with the intention of acquiring securities for its portfolio or for delivery pursuant to options contracts it has entered into, the fund may dispose of a commitment prior to settlement if Putnam Management deems it appropriate to do so.

Securities lending The fund may lend securities, through its agent, to qualified borrowers in order to earn additional income. The loans are collateralized by cash in an amount at least equal to the market value of the securities loaned. The market value of securities loaned is determined daily and any additional required collateral is allocated to the fund on the next business day. The risk of borrower default will be borne by the fund’s agent; the fund will bear the risk of loss with respect to the investment of the cash collateral. Income from securities lending is included in

68    Dynamic Risk Allocation Fund 

investment income on the Statement of operations. Cash collateral is invested in Putnam Cash Collateral Pool, LLC, a limited liability company managed by an affiliate of Putnam Management. Investments in Putnam Cash Collateral Pool, LLC are valued at its closing net asset value each business day. There are no management fees charged to Putnam Cash Collateral Pool, LLC. At the close of the reporting period, the fund had no securities out on loan.

Interfund lending The fund, along with other Putnam funds, may participate in an interfund lending program pursuant to an exemptive order issued by the SEC. This program allows the fund to borrow from or lend to other Putnam funds that permit such transactions. Interfund lending transactions are subject to each fund’s investment policies and borrowing and lending limits. Interest earned or paid on the interfund lending transaction will be based on the average of certain current market rates. During the reporting period, the fund did not utilize the program.

Line of credit The fund participates, along with other Putnam funds, in a $315 million unsecured committed line of credit and a $185 million unsecured uncommitted line of credit, both provided by State Street. Borrowings may be made for temporary or emergency purposes, including the funding of shareholder redemption requests and trade settlements. Interest is charged to the fund based on the fund’s borrowing at a rate equal to the Federal Funds rate plus 1.25% for the committed line of credit and the Federal Funds rate plus 1.30% for the uncommitted line of credit. A closing fee equal to 0.02% of the committed line of credit and $50,000 for the uncommitted line of credit has been paid by the participating funds. In addition, a commitment fee of 0.11% per annum on any unutilized portion of the committed line of credit is allocated to the participating funds based on their relative net assets and paid quarterly. During the reporting period, the fund had no borrowings against these arrangements.

Federal taxes It is the policy of the fund to distribute all of its taxable income within the prescribed time period and otherwise comply with the provisions of the Internal Revenue Code of 1986, as amended (the Code), applicable to regulated investment companies. It is also the intention of the fund to distribute an amount sufficient to avoid imposition of any excise tax under Section 4982 of the Code.

The fund is subject to the provisions of Accounting Standards Codification 740 Income Taxes (ASC 740). ASC 740 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The fund did not have a liability to record for any unrecognized tax benefits in the accompanying financial statements. No provision has been made for federal taxes on income, capital gains or unrealized appreciation on securities held nor for excise tax on income and capital gains. Each of the fund’s federal tax returns for the prior periods remains subject to examination by the Internal Revenue Service.

The fund may also be subject to taxes imposed by governments of countries in which it invests. Such taxes are generally based on either income or gains earned or repatriated. The fund accrues and applies such taxes to net investment income, net realized gains and net unrealized gains as income and/or capital gains are earned. In some cases, the fund may be entitled to reclaim all or a portion of such taxes, and such reclaim amounts, if any, are reflected as an asset on the fund’s books. In many cases, however, the fund may not receive such amounts for an extended period of time, depending on the country of investment.

Pursuant to federal income tax regulations applicable to regulated investment companies, the fund has elected to defer $1,201,395 of late year ordinary losses ((i) ordinary losses recognized during the period between January 1, 2013 and May 31, 2013, and (ii) specified ordinary losses recognized during the period between November 1, 2012 and May 31, 2013, to its fiscal year ending May 31, 2014.

Pursuant to federal income tax regulations applicable to regulated investment companies, the fund has elected to defer $4,192,830 of certain losses recognized during the period from November 1, 2012 to May 31, 2013 to its fiscal year ending May 31, 2014.

Distributions to shareholders Distributions to shareholders from net investment income are recorded by the fund on the ex-dividend date. Distributions from capital gains, if any, are recorded on the ex-dividend date and paid at least annually. The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. These differences include temporary and/or permanent differences from losses on wash sale transactions, foreign currency gains and losses, late year loss deferrals, unrealized gains and losses on certain futures contracts, realized gains and losses on certain futures contracts and income on swap contracts. Reclassifications are made to the fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryovers) under income tax regulations. For the reporting period ended, the fund reclassified $2,933,749 to decrease distributions in excess of net investment income, $70 to decrease paid-in-capital and $2,933,679 to increase accumulated net realized loss.

Dynamic Risk Allocation Fund   69 

The tax basis components of distributable earnings and the federal tax cost as of the close of the reporting period were as follows:

Unrealized appreciation	$12,062,288
Unrealized depreciation	4,798,426
Net unrealized appreciation	7,263,862
Undistributed ordinary income	1,473,706
Post-October capital loss deferral	4,192,830
Late year ordinary loss deferral	1,201,395
Cost for federal income tax purposes	$256,328,783

Expenses of the Trust Expenses directly charged or attributable to any fund will be paid from the assets of that fund. Generally, expenses of the Trust will be allocated among and charged to the assets of each fund on a basis that the Trustees deem fair and equitable, which may be based on the relative assets of each fund or the nature of the services performed and relative applicability to each fund.

Note 2: Management fee, administrative services and other transactions

The fund pays Putnam Management a management fee (based on the fund’s average net assets and computed and paid monthly) at annual rates that may vary based on the average of the aggregate net assets of most open-end funds, as defined in the fund’s management contract, sponsored by Putnam Management. Such annual rates may vary as follows:

1.050%	of the first $5 billion,	0.850%	of the next $50 billion,
1.000%	of the next $5 billion,	0.830%	of the next $50 billion,
0.950%	of the next $10 billion,	0.820%	of the next $100 billion and
0.900%	of the next $10 billion,	0.815%	of any excess thereafter.

Putnam Management has agreed to waive fees (and, to the extent necessary, bear other expenses) of the fund through September 30, 2014, to the extent that expenses of the fund (excluding brokerage, interest, taxes, investment-related expenses, such as borrowing costs, payments under distribution plans, extraordinary expenses and acquired fund fees and expenses) would exceed an annual rate of 1.15% of the fund’s average net assets. During the reporting period, the fund’s expenses were reduced by $297,096 as a result of this limit.

Putnam Management has also contractually agreed, through June 30, 2014, to waive fees or reimburse the fund’s expenses to the extent necessary to limit the cumulative expenses of the fund, exclusive of brokerage, interest, taxes, investment-related expenses, extraordinary expenses, acquired fund fees and expenses and payments under the fund’s investor servicing contract, investment management contract and distribution plans, on a fiscal year-to-date basis to an annual rate of 0.20% of the fund’s average net assets over such fiscal year-to-date period. During the reporting period, the fund’s expenses were reduced by $1,792 as a result of this limit.

Putnam Investments Limited (PIL), an affiliate of Putnam Management, is authorized by the Trustees to manage a separate portion of the assets of the fund as determined by Putnam Management from time to time. Putnam Management pays a quarterly sub-management fee to PIL for its services at an annual rate of 0.35% of the average net assets of the portion of the fund managed by PIL.

The fund reimburses Putnam Management an allocated amount for the compensation and related expenses of certain officers of the fund and their staff who provide administrative services to the fund. The aggregate amount of all such reimbursements is determined annually by the Trustees.

Custodial functions for the fund’s assets are provided by State Street. Custody fees are based on the fund’s asset level, the number of its security holdings and transaction volumes.

Putnam Investor Services, Inc., an affiliate of Putnam Management, provides investor servicing agent functions to the fund. Putnam Investor Services, Inc. received fees for investor servicing (except for class R5 and R6 shares) based on the fund’s retail asset level, the number of shareholder accounts in the fund and the level of defined contribution plan assets in the fund. Class R5 shares pay a monthly fee based on the average net assets of class R5 shares at an annual rate of 0.15%. Class R6 shares pay a monthly fee based on the average net assets of class R6 shares at an annual rate of 0.05%. Investor servicing fees will not exceed an annual rate of 0.32% of the fund’s

70   Dynamic Risk Allocation Fund 

average net assets. During the reporting period, the expenses for each class of shares related to investor servicing fees were as follows:

Class A	$107,505	Class R5	14
Class B	3,913	Class R6	228
Class C	23,503	Class Y	249,289
Class M	658	Total	$385,754
Class R	644

The fund has entered into expense offset arrangements with Putnam Investor Services, Inc. and State Street whereby Putnam Investor Services, Inc.’s and State Street’s fees are reduced by credits allowed on cash balances. For the reporting period, the fund’s expenses were reduced by $366 under the expense offset arrangements.

Each independent Trustee of the fund receives an annual Trustee fee, of which $179, as a quarterly retainer, has been allocated to the fund, and an additional fee for each Trustees meeting attended. Trustees also are reimbursed for expenses they incur relating to their services as Trustees.

The fund has adopted a Trustee Fee Deferral Plan (the Deferral Plan) which allows the Trustees to defer the receipt of all or a portion of Trustees fees payable on or after July 1, 1995. The deferred fees remain invested in certain Putnam funds until distribution in accordance with the Deferral Plan.

The fund has adopted an unfunded noncontributory defined benefit pension plan (the Pension Plan) covering all Trustees of the fund who have served as a Trustee for at least five years and were first elected prior to 2004. Benefits under the Pension Plan are equal to 50% of the Trustee’s average annual attendance and retainer fees for the three years ended December 31, 2005. The retirement benefit is payable during a Trustee’s lifetime, beginning the year following retirement, for the number of years of service through December 31, 2006. Pension expense for the fund is included in Trustee compensation and expenses in the Statement of operations. Accrued pension liability is included in Payable for Trustee compensation and expenses in the Statement of assets and liabilities. The Trustees have terminated the Pension Plan with respect to any Trustee first elected after 2003.

The fund has adopted distribution plans (the Plans) with respect to its class A, class B, class C, class M and class R shares pursuant to Rule 12b–1 under the Investment Company Act of 1940. The purpose of the Plans is to compensate Putnam Retail Management Limited Partnership, an indirect wholly-owned subsidiary of Putnam Investments, LLC, for services provided and expenses incurred in distributing shares of the fund. The Plans provide for payments by the fund to Putnam Retail Management Limited Partnership at an annual rate of up to 0.35%, 1.00%, 1.00%, 1.00% and 1.00% of the average net assets attributable to class A, class B, class C, class M and class R shares, respectively. The Trustees have approved payment by the fund at an annual rate of 0.25%, 1.00%, 1.00%, 0.75% and 0.50% of the average net assets attributable to class A, class B, class C, class M and class R shares, respectively. During the reporting period, the class specific expenses related to distribution fees were as follows:

Class A	$132,161	Class M	2,426
Class B	19,368	Class R	1,583
Class C	116,308	Total	$271,846

For the reporting period, Putnam Retail Management Limited Partnership, acting as underwriter, received net commissions of $42,499 and $358 from the sale of class A and class M shares, respectively, and received $2,106 and $1,409 in contingent deferred sales charges from redemptions of class B and class C shares, respectively.

A deferred sales charge of up to 1.00% and 0.65% is assessed on certain redemptions of class A and class M shares, respectively. For the reporting period, Putnam Retail Management Limited Partnership, acting as underwriter, received no monies on class A and class M redemptions, respectively.

Note 3: Purchases and sales of securities

During the reporting period, cost of purchases and proceeds from sales of investment securities other than short-term investments aggregated $179,103,999 and $35,529,528, respectively. There were no purchases or proceeds from sales of long-term U.S. government securities.

Dynamic Risk Allocation Fund  71 

Written option transactions during the reporting period are summarized as follows:

	Written equity option	Written equity option
	contract amounts	premiums
Written options outstanding at the
beginning of the reporting period	370,191	$436,394
Options opened	2,355,268	1,272,851
Options expired	(1,074,328)	(696,942)
Options closed	(1,619,393)	(899,633)
Written options outstanding at the
end of the reporting period	31,738	$112,670

Note 4: Capital shares

At the close of the reporting period, there was an unlimited number of shares of beneficial interest authorized. Transactions in capital shares were as follows:

			For the period 9/19/11
			(commencement of operations)
	Year ended 5/31/13		to 5/31/12
Class A	Shares	Amount	Shares	Amount
Shares sold	5,207,659	$56,257,334	2,881,028	$29,872,014
Shares issued in connection with
reinvestment of distributions	146,665	1,563,450	4,632	45,158
	5,354,324	57,820,784	2,885,660	29,917,172
Shares repurchased	(2,694,196)	(29,289,665)	(559,397)	(5,816,748)
Net increase	2,660,128	$28,531,119	2,326,263	$24,100,424
			For the period 9/19/11
			(commencement of operations)
	Year ended 5/31/13		to 5/31/12
Class B	Shares	Amount	Shares	Amount
Shares sold	220,294	$2,392,233	64,417	$666,891
Shares issued in connection with
reinvestment of distributions	5,783	61,245	47	459
	226,077	2,453,478	64,464	667,350
Shares repurchased	(26,443)	(285,389)	(3,190)	(32,489)
Net increase	199,634	$2,168,089	61,274	$634,861
			For the period 9/19/11
			(commencement of operations)
	Year ended 5/31/13		to 5/31/12
Class C	Shares	Amount	Shares	Amount
Shares sold	1,836,415	$19,797,087	304,942	$3,146,929
Shares issued in connection with
reinvestment of distributions	35,063	370,964	615	5,988
	1,871,478	20,168,051	305,557	3,152,917
Shares repurchased	(181,926)	(1,962,713)	(6,341)	(65,420)
Net increase	1,689,552	$18,205,338	299,216	$3,087,497

72    Dynamic Risk Allocation Fund 

			For the period 9/19/11
			(commencement of operations)
	Year ended 5/31/13		to 5/31/12
Class M	Shares	Amount	Shares	Amount
Shares sold	26,983	$292,377	25,314	$257,414
Shares issued in connection with
reinvestment of distributions	584	6,254	260	2,533
	27,567	298,631	25,574	259,947
Shares repurchased	(29,594)	(316,630)	(4)	(45)
Net increase (decrease)	(2,027)	$(17,999)	25,570	$259,902
			For the period 9/19/11
			(commencement of operations)
	Year ended 5/31/13		to 5/31/12
Class R	Shares	Amount	Shares	Amount
Shares sold	32,961	$360,733	—	$—
Shares issued in connection with
reinvestment of distributions	940	9,991	—	—
	33,901	370,724	—	—
Shares repurchased	(692)	(7,603)	—	—
Net increase	33,209	$363,121	—	$—

	For the period 7/3/12
	(commencement of operations) to 5/31/13
Class R5	Shares	Amount
Shares sold	947	$10,000
Shares issued in connection with
reinvestment of distributions	39	413
	986	10,413
Shares repurchased	—	—
Net increase	986	$10,413
	For the period 7/3/12
	(commencement of operations) to 5/31/13
Class R6	Shares	Amount
Shares sold	267,359	$2,926,140
Shares issued in connection with reinvestment of
distributions	39	418
	267,398	2,926,558
Shares repurchased	(13,353)	(146,519)
Net increase	254,045	$2,780,039

Dynamic Risk Allocation Fund  73 

			For the period 9/19/11
			(commencement of operations)
	Year ended 5/31/13		to 5/31/12
Class Y	Shares	Amount	Shares	Amount
Shares sold	8,608,034	$93,354,565	9,160,766	$96,224,452
Shares issued in connection with
reinvestment of distributions	488,618	5,213,550	936	9,126
	9,096,652	98,568,115	9,161,702	96,233,578
Shares repurchased	(2,977,551)	(32,230,661)	(926,194)	(9,636,926)
Net increase	6,119,101	$66,337,454	8,235,508	$86,596,652

At the close of the reporting period, Putnam Investments, LLC owned the following class shares of the fund:

	Shares owned	Percentage of ownership	Value
Class R	10,000	23.1%	$105,900
Class R5	986	100.0	10,523
Class R6	986	0.4	10,530

At the close of the reporting period, a shareholder of record owned 30.26% of the outstanding shares of the fund.

Note 5: Summary of derivative activity

The average volume of activity for the reporting period for any derivative type that was held during the period is listed below and was as follows:

Purchased equity option contracts (number of contracts)	270,000
Written equity option contracts (number of contracts)	210,000
Futures contracts (number of contracts)	700
Forward currency contracts (contract amount)	$78,300,000
OTC interest rate swap contracts (notional)	$70,600,000
OTC total return swap contracts (notional)	$96,000,000
OTC credit default swap contracts (notional)	$68,200,000

74    Dynamic Risk Allocation Fund 

The following is a summary of the market values of derivative instruments as of the close of the reporting period:

Market values of derivative instruments as of the close of the reporting period

	Asset derivatives		Liability derivatives
Derivatives not
accounted for as	Statement of		Statement of
hedging instruments	assets and		assets and
under ASC 815	liabilities location	Market value	liabilities location	Market value
Credit contracts	Receivables	$5,387,015	Payables	$14,007
Foreign exchange
contracts	Receivables	434,020	Payables	1,448,720
	Investments,
	Receivables, Net		Payables, Net
	assets — Unrealized		assets — Unrealized
Equity contracts	appreciation	2,288,228*	depreciation	2,126,316*
	Receivables, Net		Payables, Net
	assets — Unrealized		assets — Unrealized
Interest rate contracts	appreciation	347,679*	depreciation	3,188,955*
Total		$8,456,942		$6,777,998

* Includes cumulative appreciation/depreciation of futures contracts as reported in the fund’s portfolio. Only current day’s variation margin is reported within the Statement of assets and liabilities.

The following is a summary of realized and change in unrealized gains or losses of derivative instruments on the Statement of operations for the reporting period (see Note 1):

Amount of realized gain or (loss) on derivatives recognized in net gain or (loss) on investments

Derivatives not accounted			Forward
for as hedging instruments			currency
under ASC 815	Options	Futures	contracts	Swaps	Total
Credit contracts	$—	$—	$—	$6,165,250	$6,165,250
Foreign exchange
contracts	—	—	(1,861,771)	—	$(1,861,771)
Equity contracts	(3,516,701)	(473,549)	—	796,838	$(3,193,412)
Interest rate contracts	—	676,903	—	228,037	$904,940
Total	$(3,516,701)	$203,354	$(1,861,771)	$7,190,125	$2,015,007

Change in unrealized appreciation or (depreciation) on derivatives recognized in net gain or (loss) on investments

Derivatives not accounted			Forward
for as hedging instruments			currency
under ASC 815	Options	Futures	contracts	Swaps	Total
Credit contracts	$—	$—	$—	$2,832,297	$2,832,297
Foreign exchange
contracts	—	—	(768,998)	—	$(768,998)
Equity contracts	(593,010)	(646,120)	—	602,720	$(636,410)
Interest rate contracts	—	(1,285,875)	—	(3,159,464)	$(4,445,339)
Total	$(593,010)	$(1,931,995)	$(768,998)	$275,553	$(3,018,450)

Dynamic Risk Allocation Fund  75 

Note 6: Initial capitalization and offering of shares

The fund was established as a series of the Trust on September 19, 2011. Prior to September 19, 2011, the fund had no operations other than those related to organizational matters, including as noted below, the initial capital contributions by Putnam Investments, LLC and issuance of shares:

	Capital contribution	Shares issued
Class A	$14,500,000	1,450,000
Class B	100,000	10,000
Class C	100,000	10,000
Class M	100,000	10,000
Class R	100,000	10,000
Class Y	100,000	10,000

Note 7: Transactions with affiliated issuers

Transactions during the reporting period with Putnam Money Market Liquidity Fund and Putnam Short Term Investment Fund, which are under common ownership or control, were as follows:

	Market value at				Market value
	the beginning				at the end of
	of the reporting			Investment	the reporting
Name of affiliate	period	Purchase cost	Sale proceeds	income	period
Putnam Money Market
Liquidity Fund*	$57,732,468	$116,418,779	$162,985,247	$50,345	$11,166,000
Putnam Short Term
Investment Fund*	—	111,420,446	56,533,395	10,387	54,887,051
Totals	$57,732,468	$227,839,225	$219,518,642	$60,732	$66,053,051

* Management fees charged to Putnam Money Market Liquidity Fund and Putnam Short Term Investment Fund have been waived by Putnam Management.

Note 8: Market, credit and other risks

In the normal course of business, the fund trades financial instruments and enters into financial transactions where risk of potential loss exists due to changes in the market (market risk) or failure of the contracting party to the transaction to perform (credit risk). The fund may be exposed to additional credit risk that an institution or other entity with which the fund has unsettled or open transactions will default. Investments in foreign securities involve certain risks, including those related to economic instability, unfavorable political developments, and currency fluctuations. The fund may invest in higher yielding, lower rated bonds that may have a higher rate of default. The fund may invest a significant portion of its assets in securitized debt instruments, including mortgage-backed and asset-backed investments. The yields and values of these investments are sensitive to changes in interest rates, the rate of principal payments on the underlying assets and the market’s perception of the issuers. The market for these investments may be volatile and limited, which may make them difficult to buy or sell.

Note 9: New accounting pronouncement

In January 2013, ASU 2013–01, “Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities,” amended ASU No. 2011–11, “Disclosures about Offsetting Assets and Liabilities.” The ASUs create new disclosure requirements requiring entities to disclose both gross and net information for derivatives and other financial instruments that are either offset in the Statement of assets and liabilities or subject to an enforceable master netting arrangement or similar agreement. The disclosure requirements are effective for annual reporting periods beginning on or after January 1, 2013 and interim periods within those annual periods. Putnam Management is currently evaluating the application of ASUs 2013–01 and 2011–11 and their impact, if any, on the fund’s financial statements.

76   Dynamic Risk Allocation Fund 

Federal tax information (Unaudited)

The fund designated 13.60% of ordinary income distributions as qualifying for the dividends received deduction for corporations.

For the reporting period ended, the fund hereby designates 22.93%, or the maximum amount allowable, of its taxable ordinary income distributions as qualified dividends taxed at the individual net capital gain rates.

The Form 1099 that will be mailed to you in January 2014 will show the tax status of all distributions paid to your account in calendar 2013.

Dynamic Risk Allocation Fund  77 

About the Trustees

Independent Trustees

78    Dynamic Risk Allocation Fund 

* Mr. Reynolds is an “interested person” (as defined in the Investment Company Act of 1940) of the fund, Putnam Management, and Putnam Retail Management. He is President and Chief Executive Officer of Putnam Investments, as well as the President of your fund and each of the other Putnam funds.

The address of each Trustee is One Post Office Square, Boston, MA 02109.

As of May 31, 2013, there were 116 Putnam funds. All Trustees serve as Trustees of all Putnam funds.

Each Trustee serves for an indefinite term, until his or her resignation, retirement at age 75, removal, or death.

Dynamic Risk Allocation Fund    79 

Officers

In addition to Robert L. Reynolds, the other officers of the fund are shown below:

Jonathan S. Horwitz (Born 1955)	Janet C. Smith (Born 1965)
Executive Vice President, Principal Executive	Vice President, Principal Accounting Officer,
Officer, and Compliance Liaison	and Assistant Treasurer
Since 2004	Since 2007
	Director of Fund Administration Services,
Steven D. Krichmar (Born 1958)	Putnam Investments and Putnam Management
Vice President and Principal Financial Officer
Since 2002	Susan G. Malloy (Born 1957)
Chief of Operations, Putnam Investments and	Vice President and Assistant Treasurer
Putnam Management	Since 2007
	Director of Accounting & Control Services,
Robert T. Burns (Born 1961)	Putnam Investments and Putnam Management
Vice President and Chief Legal Officer
Since 2011	James P. Pappas (Born 1953)
General Counsel, Putnam Investments, Putnam	Vice President
Management, and Putnam Retail Management	Since 2004
	Director of Trustee Relations,
Robert R. Leveille (Born 1969)	Putnam Investments and Putnam Management
Vice President and Chief Compliance Officer
Since 2007	Mark C. Trenchard (Born 1962)
Chief Compliance Officer, Putnam Investments,	Vice President and BSA Compliance Officer
Putnam Management, and Putnam Retail	Since 2002
Management	Director of Operational Compliance,
	Putnam Investments and Putnam
Michael J. Higgins (Born 1976)	Retail Management
Vice President, Treasurer, and Clerk
Since 2010	Nancy E. Florek (Born 1957)
Manager of Finance, Dunkin’ Brands (2008–	Vice President, Director of Proxy Voting and
2010); Senior Financial Analyst, Old Mutual Asset	Corporate Governance, Assistant Clerk, and
Management (2007–2008); Senior Financial	Associate Treasurer
Analyst, Putnam Investments (1999–2007)	Since 2000

The principal occupations of the officers for the past five years have been with the employers as shown above although in some cases, they have held different positions with such employers. The address of each Officer is One Post Office Square, Boston, MA 02109.

80   Dynamic Risk Allocation Fund 

Fund information

Founded over 75 years ago, Putnam Investments was built around the concept that a balance between risk and reward is the hallmark of a well-rounded financial program. We manage over 100 funds across income, value, blend, growth, asset allocation, absolute return, and global sector categories.

Investment Manager	Trustees	Robert T. Burns
Putnam Investment	Jameson A. Baxter, Chair	Vice President and
Management, LLC	Liaquat Ahamed	Chief Legal Officer
One Post Office Square	Ravi Akhoury
Boston, MA 02109	Barbara M. Baumann	Robert R. Leveille
	Charles B. Curtis	Vice President and
Investment Sub-Manager	Robert J. Darretta	Chief Compliance Officer
Putnam Investments Limited	Katinka Domotorffy
57–59 St James’s Street	John A. Hill	Michael J. Higgins
London, England SW1A 1LD	Paul L. Joskow	Vice President, Treasurer,
	Elizabeth T. Kennan	and Clerk
Marketing Services	Kenneth R. Leibler
Putnam Retail Management	Robert E. Patterson	Janet C. Smith
One Post Office Square	George Putnam, III	Vice President,
Boston, MA 02109	Robert L. Reynolds	Principal Accounting Officer,
	W. Thomas Stephens	and Assistant Treasurer
Custodian
State Street Bank	Officers	Susan G. Malloy
and Trust Company	Robert L. Reynolds	Vice President and
	President	Assistant Treasurer
Legal Counsel
Ropes & Gray LLP	Jonathan S. Horwitz	James P. Pappas
	Executive Vice President,	Vice President
Independent Registered	Principal Executive Officer, and
Public Accounting Firm	Compliance Liaison	Mark C. Trenchard
KPMG LLP		Vice President and
	Steven D. Krichmar	BSA Compliance Officer
	Vice President and
	Principal Financial Officer	Nancy E. Florek
		Vice President, Director of
		Proxy Voting and Corporate
		Governance, Assistant Clerk,
		and Associate Treasurer

This report is for the information of shareholders of Putnam Dynamic Risk Allocation Fund. It may also be used as sales literature when preceded or accompanied by the current prospectus, the most recent copy of Putnam’s Quarterly Performance Summary, and Putnam’s Quarterly Ranking Summary. For more recent performance, please visit putnam.com. Investors should carefully consider the investment objectives, risks, charges, and expenses of a fund, which are described in its prospectus. For this and other information or to request a prospectus or summary prospectus, call 1-800-225-1581 toll free. Please read the prospectus carefully before investing. The fund’s Statement of Additional Information contains additional information about the fund’s Trustees and is available without charge upon request by calling 1-800-225-1581.

Item 2. Code of Ethics:

(a) The fund’s principal executive, financial and accounting officers are employees of Putnam Investment Management, LLC, the Fund’s investment manager. As such they are subject to a comprehensive Code of Ethics adopted and administered by Putnam Investments which is designed to protect the interests of the firm and its clients. The Fund has adopted a Code of Ethics which incorporates the Code of Ethics of Putnam Investments with respect to all of its officers and Trustees who are employees of Putnam Investment Management, LLC. For this reason, the Fund has not adopted a separate code of ethics governing its principal executive, financial and accounting officers.

(c) In May 2008, the Code of Ethics of Putnam Investment Management, LLC was updated in its entirety to include the amendments adopted in August 2007 as well as a several additional technical, administrative and non-substantive changes. In May of 2009, the Code of Ethics of Putnam Investment Management, LLC was amended to reflect that all employees will now be subject to a 90-day blackout restriction on holding Putnam open-end funds, except for portfolio managers and their supervisors (and each of their immediate family members), who will be subject to a one-year blackout restriction on the funds that they manage or supervise. In June 2010, the Code of Ethics of Putnam Investments was updated in its entirety to include the amendments adopted in May of 2009 and to change certain rules and limits contained in the Code of Ethics. In addition, the updated Code of Ethics included numerous technical, administrative and non-substantive changes, which were intended primarily to make the document easier to navigate and understand. In July 2011, the Code of Ethics of Putnam Investments was updated to reflect several technical, administrative and non-substantive changes resulting from changes in employee titles.

Item 3. Audit Committee Financial Expert:

The Funds’ Audit and Compliance Committee is comprised solely of Trustees who are “independent” (as such term has been defined by the Securities and Exchange Commission (“SEC”) in regulations implementing Section 407 of the Sarbanes-Oxley Act (the “Regulations”)). The Trustees believe that each of the members of the Audit and Compliance Committee also possess a combination of knowledge and experience with respect to financial accounting matters, as well as other attributes, that qualify them for service on the Committee. In addition, the Trustees have determined that each of Mr. Leibler, Mr. Hill, Mr. Darretta and Ms. Baumann qualifies as an “audit committee financial expert” (as such term has been defined by the Regulations) based on their review of his or her pertinent experience and education. The SEC has stated that the designation or identification of a person as an audit committee financial expert pursuant to this Item 3 of Form N-CSR does not impose on such person any duties, obligations or liability that are greater than the duties, obligations and liability imposed on such person as a member of the Audit and Compliance Committee and the Board of Trustees in the absence of such designation or identification.

Item 4. Principal Accountant Fees and Services:

The following table presents fees billed in each of the last two fiscal years for services rendered to the fund by the fund’s independent auditor:

Fiscal year ended	Audit Fees	Audit-Related Fees	Tax Fees	All Other Fees
May 31, 2013	$65,488	$--	$4,650	$ —
May 31, 2012*	$70,513	$--	$4,500	$ —

*   For the period September 19, 2011 (commencement of operations) to May 31, 2012.

For the fiscal years ended May 31, 2013 and May 31, 2012, the fund’s independent auditor billed aggregate non-audit fees in the amounts of $4,650 and $4,500 respectively, to the fund, Putnam Management and any entity controlling, controlled by or under common control with Putnam Management that provides ongoing services to the fund.

Audit Fees represent fees billed for the fund’s last two fiscal years relating to the audit and review of the financial statements included in annual reports and registration statements, and other services that are normally provided in connection with statutory and regulatory filings or engagements.

Audit-Related Fees represent fees billed in the fund’s last two fiscal years for services traditionally performed by the fund’s auditor, including accounting consultation for proposed transactions or concerning financial accounting and reporting standards and other audit or attest services not required by statute or regulation.

Tax Fees represent fees billed in the fund’s last two fiscal years for tax compliance, tax planning and tax advice services. Tax planning and tax advice services include assistance with tax audits, employee benefit plans and requests for rulings or technical advice from taxing authorities.

Pre-Approval Policies of the Audit and Compliance Committee. The Audit and Compliance Committee of the Putnam funds has determined that, as a matter of policy, all work performed for the funds by the funds’ independent auditors will be pre-approved by the Committee itself and thus will generally not be subject to pre-approval procedures.

The Audit and Compliance Committee also has adopted a policy to pre-approve the engagement by Putnam Management and certain of its affiliates of the funds’ independent auditors, even in circumstances where pre-approval is not required by applicable law. Any such requests by Putnam Management or certain of its affiliates are typically submitted in writing to the Committee and explain, among other things, the nature of the proposed engagement, the estimated fees, and why this work should be performed by that particular audit firm as opposed to another one. In reviewing such requests, the Committee considers, among other things, whether the provision of such services by the audit firm are compatible with the independence of the audit firm.

The following table presents fees billed by the fund’s independent auditor for services required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X.

Fiscal year ended	Audit-Related Fees	Tax Fees	All Other Fees	Total Non-Audit Fees
May 31, 2013	$ —	$ —	$ —	$ —
May 31, 2012*	$ —	$ —	$ —	$ —

*   For the period September 19, 2011 (commencement of operations) to May 31, 2012.

Item 5. Audit Committee of Listed Registrants

Not applicable

Item 6. Schedule of Investments:

The registrant’s schedule of investments in unaffiliated issuers is included in the report to shareholders in Item 1 above.

Item 7. Disclosure of Proxy Voting Policies and Procedures For Closed-End Management Investment Companies:

Not applicable

Item 8. Portfolio Managers of Closed-End Investment Companies

Not Applicable

Item 9. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers:

Not applicable

Item 10. Submission of Matters to a Vote of Security Holders:

Not applicable

Item 11. 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 12. Exhibits:

(a)(1) The Code of Ethics of The Putnam Funds, which incorporates the Code of Ethics of Putnam Investments, is filed herewith.

(a)(2) 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.

(b) The certifications required by Rule 30a-2(b) 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: July 26, 2013

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/Jonathan S. Horwitz
Jonathan S. Horwitz
Principal Executive Officer

Date: July 26, 2013

By (Signature and Title):

/s/Steven D. Krichmar
Steven D. Krichmar
Principal Financial Officer

Date: July 26, 2013

EX-99.CERT

Certifications

I, Jonathan S. Horwitz, the Principal Executive Officer of the funds listed on Attachment A, certify that:

1. I have reviewed each report on Form N-CSR of the funds listed on Attachment A:

2. Based on my knowledge, each report does not contain any untrue statements of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by each report;

3. Based on my knowledge, the financial statements, and other financial information included in each report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in each report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which each report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of each report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed to each registrant’s auditors and the audit committee of each registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect each registrant’s ability to record, process, summarize, and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in each registrant’s internal control over financial reporting.

Date: July 25, 2013

/s/ Jonathan S. Horwitz

_______________________

Jonathan S. Horwitz

Principal Executive Officer

Certifications

I, Steven D. Krichmar, the Principal Financial Officer of the funds listed on Attachment A, certify that:

1. I have reviewed each report on Form N-CSR of the funds listed on Attachment A:

2. Based on my knowledge, each report does not contain any untrue statements of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by each report;

3. Based on my knowledge, the financial statements, and other financial information included in each report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in each report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which each report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of each report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed to each registrant’s auditors and the audit committee of each registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect each registrant’s ability to record, process, summarize, and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in each registrant’s internal control over financial reporting.

Date: July 25, 2013

/s/ Steven D. Krichmar

_______________________

Steven D. Krichmar

Principal Financial Officer

Attachment A

Period (s) ended May 31, 2013

               Putnam Arizona Tax Exempt Income Fund

               Putnam Minnesota Tax Exempt Income Fund

               Putnam Massachusetts Tax Exempt Income Fund

               Putnam New York Tax Exempt Income Fund

               Putnam High Yield Advantage Fund

               Putnam Equity Income Fund

               Putnam Pennsylvania Tax Exempt Income Fund

               Putnam Ohio Tax Exempt Income Fund

               Putnam New Jersey Tax Exempt Income Fund

               Putnam Michigan Tax Exempt Income Fund

               Putnam Dynamic Asset Allocation Equity Fund

               Putnam Dynamic Risk Allocation Fund

               Putnam Short Term Municipal Income Fund

               Putnam Intermediate Term Municipal Income Fund

               Putnam Emerging Markets Income Fund

               Putnam Global Dividend Fund

EX-99.906 CERT

Section 906 Certifications

I, Jonathan S. Horwitz, the Principal Executive Officer of the Funds listed on Attachment A, certify that, to my knowledge:

1. The form N-CSR of the Funds listed on Attachment A for the period ended May 31, 2013 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Form N-CSR of the Funds listed on Attachment A for the period ended May 31, 2013 fairly presents, in all material respects, the financial condition and results of operations of the Funds listed on Attachment A.

Date: July 25, 2013

/s/ Jonathan S. Horwitz

______________________

Jonathan S. Horwitz

Principal Executive Officer

Section 906 Certifications

I, Steven D. Krichmar, the Principal Financial Officer of the Funds listed on Attachment A, certify that, to my knowledge:

1. The form N-CSR of the Funds listed on Attachment A for the period ended May 31, 2013 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Form N-CSR of the Funds listed on Attachment A for the period ended May 31, 2013 fairly presents, in all material respects, the financial condition and results of operations of the Funds listed on Attachment A.

Date: July 25, 2013

/s/ Steven D. Krichmar

______________________

Steven D. Krichmar

Principal Financial Officer

Attachment A

N-CSR

Period (s) ended May 31, 2013

               Putnam Arizona Tax Exempt Income Fund

               Putnam Minnesota Tax Exempt Income Fund

               Putnam Massachusetts Tax Exempt Income Fund

               Putnam New York Tax Exempt Income Fund

               Putnam High Yield Advantage Fund

               Putnam Equity Income Fund

               Putnam Pennsylvania Tax Exempt Income Fund

               Putnam Ohio Tax Exempt Income Fund

               Putnam New Jersey Tax Exempt Income Fund

               Putnam Michigan Tax Exempt Income Fund

               Putnam Dynamic Asset Allocation Equity Fund

               Putnam Dynamic Risk Allocation Fund

               Putnam Short Term Municipal Income Fund

               Putnam Intermediate Term Municipal Income Fund

               Putnam Emerging Markets Income Fund

               Putnam Global Dividend Fund

EX-99.CODE ETH

Amendments to Putnam’s Code of Ethics – June 2011

The following sections of the Code are rewritten to read in their entirety as follows:

Definitions

Access Person Putnam has identified certain employees as Access Persons due to their position or access to investment information. Access Persons are held to a higher standard under the Code than other employees. Please ask the Code of Ethics Officer if you have any question whether you are an Access Person. The following employees are Access Persons:

• All employees of Putnam’s Investment Management Division

• Employees of the Operations Division within the following specific groups and departments:

» Fund Administration Group

» investment Services and Operations Group

» Accounting Services Group

» Custody Services Group

• Any employee in the following groups or divisions who reports directly to a member of the Operating Committee:

» Mutual Fund Shareholder Services Group

» Accounting, Custody, and Control Services Group

» Global Marketing and Products Division

» Defined Contribution Division

» Global Distribution Division

• All members of Putnam’s Operating Committee

• All employees of Putnam investments Limited (PiL) and all other Putnam employees based in Europe

• All directors and officers of a registered investment advisor affiliate, e.g., Putnam investment Management, LLC (PIM), or The Putnam Advisory Company, LLC (PAC)

• All employees who have access to My Putnam (unless access is limited to the Wall Street Journal, Factiva, or other systems that do not allow access to non-public information about Putnam products, as determined by the Code of Ethics Officer)

• Employees who have systems access or other access to non-public information about any client’s purchase or sale of securities or to information regarding portfolio holdings or recommendations with respect to such purchases or sales

• Others as determined by the Code of Ethics Officer

Section 8 — Sanctions

The Code of Ethics Oversight Committee has adopted the following minimum monetary sanctions for violations of the Code. These sanctions apply even if the exception results from inadvertence rather than intentional misbehavior. The Code of Ethics Oversight Committee will review and approve sanctions on employees. However, the sanctions noted below are only minimums, and the Committee reserves the right to impose sanctions it believes fit the circumstances, such as higher monetary sanctions, trading bans, suspension, or termination of employment. The Committee’s belief that an employee has violated the Code of Ethics intentionally may result in more severe sanctions than outlined in the guidelines.

8.1. Sanctions for violations of Sections 1-3.

The minimum sanction per violation of the Rules in Sections 1, 2 or 3 is disgorgement of any profits or payment of avoided losses and the following payments:

	Investment Division,	All other employees not
	Operating Committee	included in the criteria
	Member, and any	for inclusion in the higher
	employee who reports	sanction schedule
	directly to an Operating
	Committee Member
	(administrative assistants
	will be excluded from the
	higher sanction schedule)
1st violation	$250	$50
2nd violation	$500	$100
3rd violation	Minimum monetary sanction for a 2nd violation with a
	ban on all new personal securities transactions for time
	period determined by the Code of Ethics Oversight
	Committee

8.2. Sanctions for violations of Sections 4-6.

The minimum sanction for violations of the rules in Sections 4-6 is as follows:

	Investment Division,	All other employees not
	Operating Committee	included in the criteria
	Member, and any	for inclusion in the higher
	employee who reports	sanction schedule
	directly to an Operating
	Committee Member
	(administrative assistants
	will be excluded from the
	higher sanction schedule)
1st violation	Warning	Warning
2nd violation	$50	$25
3rd violation	$100	$50

8.3. Sanctions for violations of Section 7.

All violations concerning the use of material, non-public information, failure to report inside information, or insider trading will be presented to the Code of Ethics Oversight Committee to determine the appropriate sanction, up to and including termination. Severe criminal penalties may also be imposed.

The reference period for determining generally whether a violation is initial or subsequent will be three years.

EX-99.CODE ETH

working@PUTNAM  JUNE 2010 

Putnam’s

Code of Ethics

[Graphic omitted: Portrait of Samuel Putnam]

[Graphic omitted: Putnam Investments logo]

Putnam Investments Code of Ethics

Putnam Investments is required by law to adopt a Code of Ethics (the “Code”). The objective of the Code is to ensure that Putnam’s employees comply with all applicable laws and avoid any conflict of interest that might result in any harm to our clients. Putnam owes a fiduciary duty to its clients. This Code of Ethics is designed to strengthen the trust and confidence our clients place in us and to demonstrate that our clients’ interests come first.

Adherence to the Code is a fundamental condition of employment at Putnam. Every employee is expected to adhere to the requirements of the Code. Any employee failing to do so may be subject to disciplinary action, including financial penalties and termination of employment, as determined by the Code of Ethics Officer, the Code of Ethics Oversight Committee, or the Chief Executive Officer of Putnam Investments.

1 

Table of Contents

Putnam Investments Code of Ethics	1
Definitions	3
Section 1 — Personal Securities Rules for All Employees	5
1.1. Pre-clearance Requirements	5
1.2. Restricted List	6
1.3. Prohibited Transactions	6
Section 2 — Putnam Mutual Funds	7
2.1. Holding Putnam Mutual Fund Shares at Putnam	7
2.2. Putnam Mutual Funds — Employee Holding Periods and Linked Accounts	7
2.3. Putnam Mutual Funds — Closed-End Fund Rules	8
Section 3 — Additional Rules for Access Persons and Certain Investment Professionals	8
3.1. 60-Day Short-Term Rule — All Access Persons	8
3.2. 7-Day Pre-Trade Rule (Portfolio Managers and Analysts)	8
3.3. 7-Day Post-Trade Rule (Portfolio Managers and Analysts)	9
3.4. Contra-Trading Rule (Portfolio Managers and Team Leaders)	9
3.5. No Personal Benefit (Portfolio Managers and Analysts)	9
Section 4 — Reporting Requirements	9
4.1. Brokerage/Securities Accounts — Initial and Annual Requirements	9
4.2. Separate Provisions for Brokerage/Securities Accounts That Are
Professionally Managed (Discretionary) Accounts — Initial and Annual Requirements	10
4.3. Account Confirmations and Statements	10
Section 5 — Additional Reporting, Certification, and Training Requirements	10
5.1. Initial/Annual Holdings Report — Access Persons Only	10
5.2. Quarterly Transaction Report — Access Persons Only	10
5.3. Annual Certification — All Employees	11
5.4. Training Requirements — All Employees	11
5.5. Maintenance and Distribution of the Code of Ethics	11
5.6. Procedures and Timeliness	11
Section 6 — General Ethics Rules for All Employees	11
6.1. Outside Business Activities	11
6.2. Charitable or Non-profit Roles/Role as Trustee or Fiduciary Outside Putnam Investments	12
6.3. Family Members’ Conflict Policy	12
6.4. CFA Institute Code of Ethics and Standards of Professional Conduct	12
6.5. Business Ethics, Ombudsman, and Hotlines	13
Section 7 — Insider Trading	13
7.1. Material, Non-Public Information and Insider Trading	13
7.2. Reporting and Restrictions	13
7.3. Special Provisions Applicable to Putnam Affiliates	14
7.4. PIL Employees	14
Section 8 — Sanctions	14
8.1. Sanctions for Violations of Sections 1–3	14
8.2. Sanctions for Violations of Sections 4–6	14
8.3. Sanctions for Violations of Section 7	14
Section 9 — Procedures for Determinations and Exemptions	15
Appendix A — Contra-Trading Rule Clearance Form	16

2 

Definitions

Access PersonPutnam has identified certain employees as Access Persons due to their position or access to investment information. Access Persons are held to a higher standard under the Code than other employees. Please ask the Code of Ethics Officer if you have any question whether you are an Access Person. The following employees are Access Persons:

• All employees of Putnam’s Investment Management Division

• Employees of the Operations Division within the following specific groups and departments:

» Fund Administration Group

» Investment Services and Operations Group

» Accounting Services Group

» Custody Services Group

• Senior Managing Directors and Managing Directors in:

» Mutual Fund Shareholder Services Group

» Accounting, Custody, and Control Services Group

» Global Marketing and Products Division

» Global Distribution Division

• All members of Putnam’s Operating Committee

• All employees of Putnam Investments Limited (PIL) and all other Putnam employees based in Europe

• All directors and officers of a registered investment advisor affiliate, e.g., Putnam Investment Management, LLC (PIM), or The Putnam Advisory Company, LLC (PAC)

• All employees who have access to My Putnam (unless access is limited to the Wall Street Journal, Factiva, or other systems that do not allow access to non-public information about Putnam products, as determined by the Code of Ethics Officer)

• Employees who have systems access or other access to non-public information about any client’s purchase or sale of securities or to information regarding portfolio holdings or recommendations with respect to such purchases or sales

• Others as determined by the Code of Ethics Officer

Approved Indicesmeans any securities index (which is typically a broad-based index) determined by the Code of Ethics Officer to present minimal risks of abuse. All Approved Indices are posted on the Putnam Compliance intranet homepage and the Code of Ethics PTA system.

Closed-end fund means a fund that has a fixed number of shares outstanding and does not redeem its shares. Closed-end funds typically trade like stocks on an exchange.

The Code of Ethics Officer and the Deputy Code of Ethics Officer are responsible for enforcing and interpreting the Code. The following are the current members of the Code of Ethics staff, each of whom can answer employee questions and provide other assistance regarding the Code:

Code of Ethics Officer:	Bob Leveille	(617) 760-1858
Deputy Code of Ethics Officer:	Rick DeGregorio	(617) 760-1201
Compliance Analyst:	Dana Scribner-Shea	(617) 760-7182

3 

Code of Ethics Oversight Committee has oversight responsibility for administering the Code of Ethics. Members include the Code of Ethics Officer and other members of Putnam’s senior management appointed by the Chief Executive Officer of Putnam. The Committee reviews and approves Code revisions, violations, and sanctions. In certain instances, requests for exemptions may require the approval of the Committee. The Committee meets on a quarterly basis or as otherwise necessary.

Exchange-Traded Fund (ETF) means a fund (other than a closed-end fund) that can be traded on an exchange throughout the day like a stock. ETFs often track an index. Examples include (but are not limited to) SPDRs, WEBs, QQQQs, iShares, and HLDRs.

Immediate Family means the Putnam employee’s spouse, domestic partner, fiancé(e), or other family members who are living in the same household. Immediate Family also includes any other family members, including in-laws, for whom the Putnam employee can exercise investment discretion, regardless of whether or not they live in the same household.

Private Placement means any offering of a security not offered to the public and not requiring registration with the relevant securities authorities.

Putnam means any or all of Putnam Investments, LLC and its subsidiaries (other than PanAgora Asset Management, Inc.), any one of which shall be a Putnam company.

Putnam employee, or employee, means any employee of Putnam and, for purposes of all rules in Sections 1, 2, and 3, also includes the following:

• Members of the Immediate Family of a Putnam employee;

• Any trust in which a Putnam employee or Immediate Family member is a trustee with investment discretion;

• Any account for a partnership in which a Putnam employee or Immediate Family member is a general partner or a partner with investment discretion;

• Any closely held entity (such as a partnership, limited liability company, or corporation) in which a Putnam employee or Immediate Family member holds a controlling interest and with respect to which he or she has investment discretion;

• Any account (including any retirement, pension, deferred compensation, or similar account) in which a Putnam employee or Immediate Family member has a substantial economic interest and over which the Putnam employee or Immediate Family member exercises investment discretion;

• Any account other than a Putnam client account that receives investment advice of any sort from the employee or Immediate Family member, or as to which the employee or Immediate Family member has investment discretion.

Security The instruments required to be pre-cleared under Section 1.1 are considered to be securities for purposes of this Code and are also required to be reported by Access Persons under Section 4. In addition, transactions in exchange-traded funds (ETFs), exchange-traded notes (ETNs), exchange-traded commodities (ETCs), options, futures, and other derivative securities are required to be reported by Access Persons under Section 4, even for those instruments that are not required to be pre-cleared pursuant to Section 1.1(c).

4 

Section 1 — Personal Securities Rules for All Employees

Putnam maintains the Code of Ethics PTA system to assist employees in fulfilling their obligations under the Code of Ethics. This system can be accessed by selecting the Code of Ethics PTA link, which appears on Putnam’s intranet page in the Secure Information Section under My Essentials. This system allows the automated pre-clearance of publicly traded equities and other securities trading on major U.S. and other exchanges. To pre-clear an options contract for a publicly traded security, pre-clear the underlying security in the Code of Ethics PTA system. To request clearance to trade bonds or other securities, you must contact the Code of Ethics staff. Pre-clearance hours are 9:00 a.m. to 4:00 p.m. EST.

1.1. Pre-clearance Requirements

1.1(a) Employees must pre-clear all trades in the following securities:

• Stocks of companies

• Bonds (including corporate, municipal, high-yield, and convertible bonds)

• Options, warrants, and all other derivatives of any underlying securities which themselves require pre-clearance. Examples include options and futures based on specific stocks or based on indices that are not Approved Indices (see “Definitions” section)

• Exchange-traded funds (ETFs ) other than those based on Approved Indices or based on other instruments listed below (under Section 1.1(c)) that do not require pre-clearance

• Exchange-traded notes (ETNs) other than those based on Approved Indices

• Closed-end funds, including Putnam closed-end funds

Employees must also pre-clear the following transactions:

• Private placements and purchases of hedge funds or other private investment funds must receive pre-approval from the Code of Ethics Oversight Committee

• Donating or gifting of securities

• Shares purchased by subscription or by mail (if purchasing directly from a company’s transfer agent by check, you must pre-clear the day the check is to be mailed)

• Tendering securities from your personal account

1.1(b) Provisions Applicable to Pre-Clearances

A pre-clearance is only valid for trading on the day it is obtained. However, trades by employees in Putnam’s Asian or European offices, or trades by any employees in securities listed on Asian or European stock exchanges, may be executed within one business day after pre-clearance is obtained. If the Code of Ethics system does not recognize a security, if an employee is unable to use the system, or if he or she has any questions with respect to the system or pre-clearance, the employee must contact the Code of Ethics staff.

1.1(c) Exceptions from Pre-Clearance Requirements

Pre-clearance is not required for certain transactions. (Please note that reporting may still be required for Access Persons even when pre-clearance is not required. See Sections 4 and 5 for reporting requirements.)

Pre-clearance is not required for:

• Open-end mutual funds

• Currencies

• Commodities

• Treasury securities and other U.S. and other sovereign government debt (Please note that agency securities, such as securities issued by Fannie Mae and Freddie Mac, require pre-clearance.)

• Certificates of deposit (CDs), commercial paper, repurchase agreements, bankers’ acceptances, and other money market instruments

5 

• Options and futures and all other derivatives of securities not requiring pre-clearance (Please note that examples include options and futures based on Approved Indices (see Definitions) and Treasury futures.)

• ETFs and ETNs based on Approved Indices

• Exchange-traded commodities (ETCs)

• Withdrawals or distributions from a Putnam Retirement Plan that result in the sale of MMC stock

• Trades in approved discretionary accounts (see Section 4.2 for additional information)

• Transactions that are involuntary (i.e., not initiated by the employee or an immediate family member covered under the Code), including dividend reinvestments under an automatic program of a publicly traded issuer and broker actions not initiated by the employee, such as option assignments or sales out of the brokerage account to cover fees or margin calls (provided the employee may not have withdrawn funds from the margin account in the prior 10 days)

1.2. Restricted List

Employees may not trade in securities that are on Putnam’s restricted list, except as set forth below under “Large-/Mid-Cap Exemption.” There are a number of reasons why a security may appear on the Restricted List, and securities are placed on the Restricted List under criteria, and in specific circumstances, as determined by the Code of Ethics Officer or the Code of Ethics Oversight Committee. If a security is not on the Restricted List, other classes of securities of the same issuer (e.g., preferred or convertible preferred stock) may be on the Restricted List. It is the employee’s responsibility to identify with particularity the class of securities being pre-cleared.

Large-/Mid-Cap Exemption. An employee may trade up to 1,000 shares of a security appearing on the Restricted List if it is an equity security of an issuer with a market capitalization greater than $2 billion. However, these transactions must still be pre-cleared. Market capitalization is defined as outstanding shares multiplied by current price per share.

1.3. Prohibited Transactions

The following transactions and activities are prohibited for all employees:

1. Good-Until-Canceled Orders (GTC). Any order not executed on the day of pre-clearance must be resubmitted for pre-clearance before being executed on a subsequent day.

2. Short sales of any security that is subject to pre-clearance requirements. However, short sales against the box are permitted. In addition, opening an option position that would result in a short position in the underlying security upon assignment or expiration is also prohibited. For example, buying a put option without owning a number of shares at least equal to the delivery obligation under the contract, or selling a naked call option, would be prohibited.

3. Purchasing securities in an initial public offering (IPO). Although exceptions from this prohibition will rarely be granted, employees may request an exemption from the Code of Ethics Officer, who may grant exceptions in unusual cases such as when an immediate family member’s association or employment with the issuer warrants consideration or when the employee has had a pre-existing status for at least two years as a policyholder or depositor in connection with a bank or insurance company conversion from mutual or cooperative form to stock form.

4. Trading with Material Non-public Information (see Section 7)

5. Personal Trading with Putnam Client Portfolios. Putnam employees may not buy or sell securities when the employee knows a Putnam client account is on the other side of the trade.

6. Participating in an Investment Club

7. Spread Betting. PIL employees may not enter into any spread betting contracts on financial instruments.

8. Excessive Trading. Employees are prohibited from making more than 10 trades in individual securities in any given quarter across all their accounts (including accounts held by Immediate Family members). For purposes of applying this rule, securities that are required to be pre-cleared shall be the only securities counted, and trading the same security in the same direction (buy or sell) over a period of five business days will be counted as one transaction.

6

Section 2 — Putnam Mutual Funds

2.1. Holding Putnam Mutual Fund Shares at Putnam

Putnam employees must hold shares of Putnam open-end U.S. mutual funds through accounts maintained at Putnam, with Putnam Retail Management (PRM) listed as the dealer of record. All transactions must be executed through Putnam and not through an outside broker or other intermediary.

These requirements also apply to:

• Self-directed IRA accounts holding Putnam fund shares;

• Variable annuities and variable insurance contracts, such as Putnam/Hartford Capital Manager and Allstate Advisor, which invest in Putnam Variable Trusts (must list PRM as dealer but may be held at the insurer).

In limited circumstances, retirement, pension, deferred compensation, and similar accounts (and variable insurance arrangements) that cannot be legally transferred to Putnam may be allowed to hold Putnam funds upon approval of the Code of Ethics Officer. For example, a spouse of a Putnam employee may have a 401(k)/ Profit Sharing Plan with his or her employer that invests in Putnam funds. The employee must notify the Code of Ethics Officer in writing, provide the reason why the account cannot be transferred to Putnam, and arrange for a quarterly statement of transactions in such account to be sent to the Code of Ethics staff, if approved.

2.2. Putnam Mutual Funds — Employee Holding Periods and Linked Accounts

Employees may not, within a 90-calendar day period, make a purchase followed by a sale or a sale followed by a purchase of shares of the same open-end Putnam mutual fund, even if the transactions occur in different accounts.

Employees who have sole or shared supervisory or portfolio management responsibility for a Putnam open-end mutual fund or a U.S. registered mutual fund to which Putnam acts as advisor or sub-advisor may not, within a one-year period, make a purchase followed by a sale or a sale followed by a purchase of shares of such fund, even if the transactions occur in different accounts.

All employees are required to ensure that their Immediate Family members’ accounts holding Putnam mutual funds are linked to comply with the disclosure and holding period requirements. To ensure these accounts are linked, log on to Putnam’s intranet home page at http://intranet/home/index.shtml, and select My Essentials/Linked Mutual Fund Accounts.

The above holding period restrictions do not apply to:

• 401(k)/Profit Sharing (or other employee benefit plan) contributions, withdrawals, loans, or distributions, including employer contributions or forfeitures to an employee’s account. However, exchanges within these accounts are subject to these holding period restrictions.

• Putnam’s Money Market Funds or Putnam Stable Value Fund

• Systematic investments, exchanges, or redemptions and payroll deductions. However, once these programs are established/revised, they may not be changed again for 90 days. Employees subject to a one-year holding period with respect to a fund may establish a semiannual or annual automatic rebalancing program, although it may only be changed on an annual basis.

• Dividend reinvestments, distributions, fund mergers, and share class conversions

• Qualified redemptions (i.e., from the Putnam CollegeAdvantage 529 Plan for matters such as tuition, school fees, books, supplies, and equipment required by the school, room and board, disability, and death)

In special situations, such as financial hardship or disability, an exemption from the holding period requirements may be provided by the Code of Ethics Oversight Committee upon written application by the employee.

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2.3. Putnam Mutual Funds — Closed-End Fund Rules

2.3(a) Pre-clearance and Reporting. Putnam closed-end fund shares are subject to the same pre-clearance and reporting requirements as other stocks. A list of the Putnam closed-end funds can be obtained from the Code of Ethics staff.

2.3(b) Special Rules Applicable to Managing Directors in the Investment Division, Operating Committee members, and officers of the Putnam Funds. Managing Directors in Putnam’s Investment Division, Putnam Operating Committee members, and officers of the Putnam Funds will not receive clearance to engage in any combination of purchase and sale, or sale and purchase, of the shares of a given closed-end fund within six months of each other. Therefore, purchases should be made only if you intend to hold the shares more than six months, and sales should not be made if you plan to purchase more shares of that fund within six months.

Section 3 — Additional Rules for Access Persons and Certain Investment Professionals

3.1. 60-Day Short-Term Rule — All Access Persons

Access Persons may not sell a security at a price higher than any price paid for that security within the past 60 calendar days, or buy a security at a price below which he or she sold it within the past 60 days. This rule applies to transactions across all accounts of the employee. All trades for the previous 60 days will be compared to the trade date for the transaction in question to determine whether a violation has occurred. Thus, if an employee buys a security for $10, buys it again for $15, and then sells shares of this security for $12, this will be considered a violation even though some shares of the security in question were bought for a higher price. Access Persons may also not open an option transaction for a contract that expires in 60 days or less. Although portfolio managers and analysts may sell securities at a profit within 60 days of purchase in order to comply with the requirements of the 7-Day Pre-Trade and 7-Day Post-Trade Rules (described below), any profit must be disgorged to charity.

3.2. 7-Day Pre-Trade Rule (Portfolio Managers and Analysts)

3.2(a) Portfolio Managers: (i) Before a portfolio manager places an order to buy a security for any Putnam client portfolio that he manages, he must sell that security or related derivative security if he has purchased it in his personal account within the preceding seven calendar days; or (ii) upon entering an order to sell a security for any Putnam client portfolio that he manages, he must disgorge to charity any losses avoided if he sold the security in his personal account within the preceding seven calendar days. Disgorgements will be measured by the difference between the selling price for the personal account and the selling price for the client account, multiplied by the number of shares sold for the personal account.

3.2(b) Analysts: (i) Before an analyst makes a purchase or an outperform recommendation for a security (including designation of a security for inclusion in the portfolio of Putnam Research Fund), he must sell that security or related derivative security if he has purchased it in his personal account within the preceding seven calendar days; or (ii) upon making a sell or an underperform recommendation for a security (including designation of a security for sale from the portfolio of Putnam Research Fund), he must disgorge to charity any losses avoided if he sold the security in his personal account within the preceding seven calendar days. Disgorgements will be measured by the difference between the selling price for the personal account and the price at the time that the recommendation is made, multiplied by the number of shares sold for the personal account.

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3.3. 7-Day Post-Trade Rule (Portfolio Managers and Analysts)

3.3(a) Portfolio Managers: No portfolio manager shall: (i) sell any security or related derivative security for her personal account until seven calendar days have elapsed after the date of the most recent purchase of that security or related derivative security by any Putnam client portfolio she manages or co-manages; or (ii) purchase any security or related derivative security for her personal account until seven calendar days have elapsed after the date of the most recent sale of that security or related derivative security from any Putnam client portfolio that she manages or co-manages.

3.3(b) Analysts: No analyst shall: (i) sell any security or related derivative security for his personal account until seven calendar days have elapsed after the date of his most recent buy or outperform recommendation for that security or related derivative security (including designation of a security for inclusion in the portfolio of Putnam Research Fund); or (ii) purchase any security or related derivative security for his personal account until seven calendar days have elapsed after the date of his most recent sell or underperform recommendation for that security or related derivative security (including the removal of a security from the portfolio of Putnam Research Fund).

3.4. Contra-Trading Rule (Portfolio Managers and Team Leaders)

3.4(a) Portfolio Managers: No portfolio manager shall, without prior clearance and written approval, sell in his personal account any securities or related derivative securities that are held in any Putnam client portfolio that he manages or co-manages (see Appendix A for the Contra-Trading Rule Clearance Form).

3.4(b) Team Leaders: No Team Leader within the Investment Division shall, without prior clearance and written approval, sell in his personal account any securities or related derivative securities that are held in any Putnam client portfolio managed in his team (see Appendix A for the Contra-Trading Rule Clearance Form).

3.5. No Personal Benefit (Portfolio Managers and Analysts)

No portfolio manager shall cause, and no analyst shall recommend, an action that would cause a Putnam client to take action for the portfolio manager’s or analyst’s own personal benefit. A portfolio manager who trades in, or an analyst who recommends, particular securities for a Putnam client account in order to support the price of securities in his personal account, or who “front runs” a Putnam client order, is in violation of this Rule.

Section 4 — Reporting Requirements

4.1. Brokerage/Securities Accounts — Initial and Annual Requirements

All employees (on their own behalf and on behalf of their Immediate Family members) are required to report the existence of any accounts which have the capability of purchasing any securities. This Rule includes all brokerage accounts, accounts held directly at an issuer’s transfer agent, and securities held in physical certificate form by an employee or any Immediate Family member of the employee. The only investment accounts excluded from this rule are accounts that are only permitted to hold open-end mutual funds (other than Putnam open-end funds) and no other investments.

To satisfy this requirement, a new employee must enter the requested information in the Code of Ethics PTA system within the required time frame below:

• Access Persons — within 10 days of hire

• Non-access Persons — within 30 days of hire

Existing employees opening a new account (including accounts being opened for Immediate Family members) must disclose them in the system in advance of the first personal securities transaction in the account.

All employees will be required to certify annually that all accounts requiring disclosure are accurately listed in the Code of Ethics PTA system.

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4.2. Separate Provisions for Brokerage/Securities Accounts That Are Professionally Managed (Discretionary) Accounts — Initial and Annual Requirements

If you wish to establish a professionally managed or discretionary account (including professionally managed or discretionary accounts being opened for Immediate Family members), where you completely turn over decision-making authority to a professional money manager who is not subject to this Code, you must disclose the existence of the account and receive approval from the Code of Ethics staff in advance of the first personal securities transaction. You do not need to pre-clear or report securities transactions in these accounts. Please note a discretionary account may not purchase an IPO or hold Putnam open-end mutual funds.

The broker or advisor maintaining discretion over the account may not be a family member of the Putnam employee.

In order for the account to be considered discretionary, the employee must:

1. Complete an initial certification (as well as annual certifications each year) in which both the employee and the broker/advisor certify that the Putnam employee does not participate in investment decisions on the account; and

2. Ensure that copies of broker statements are delivered to Putnam Investments.

4.3. Account Confirmations and Statements

All employees are required to ensure that copies of all confirmations and statements are delivered to Putnam for all accounts described in Section 4.1 above, and to ensure that copies of all statements (but not confirmations) are delivered to Putnam for all discretionary accounts described in Section 4.2. When the employee discloses the account as required, the Code of Ethics staff will issue a 407 letter, or other communication to the entity where the employee’s account is held, requesting that confirmations and statements be sent to Putnam on the employee’s behalf. However, it is ultimately the employee’s responsibility to ensure his or her broker has complied with this request.

If it is discovered these reports are not being delivered to Putnam, the Code of Ethics staff will bring this issue to the employee’s attention and request he or she assist in rectifying the issue. If it is determined that a broker has failed to comply with requests to deliver these reports, Putnam reserves the right to require the employee to close the account within 30 days by transferring the account to another dealer willing to comply with this requirement (any trades as a result of a transfer must be pre-cleared).

Section 5 — Additional Reporting, Certification, and Training Requirements

5.1. Initial/Annual Holdings Report — Access Persons Only

Access Persons must disclose their securities holdings, including all holdings for Immediate Family member accounts, within 10 days of hire (or within 10 days of becoming an Access Person) and then on an annual basis thereafter (within 45 days after the end of the year). The report of securities holdings must include all securities that require pre-clearance under Section 1.1, as well as holdings in non-U.S. sovereign government debt, ETFs, ETNs, ETCs, options, futures and other derivative securities, and holdings of Putnam open-end U.S. mutual funds not held through a Putnam account and U.S. registered mutual funds to which Putnam acts as advisor or sub-advisor (see Section 4).

5.2. Quarterly Transaction Report — Access Persons Only

Access Persons must disclose and certify all of their personal securities transactions, including transactions for Immediate Family member accounts, within 20 calendar days following the end of each quarter. In addition to the securities requiring pre-clearance under Section 1.1, Access Persons are also required to disclose and certify all personal transactions in non-U.S. sovereign government debt, as well as ETFs, ETNs, ETCs, options, futures, and other derivative securities, not just those requiring pre-clearance.

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5.3. Annual Certification — All Employees

Each calendar year, all employees will be required to certify that they have reviewed and understand the rules and requirements of the Code and that the list of brokerage accounts (for the employee and all Immediate Family members) disclosed in the Code of Ethics PTA system is accurate. An e-mail notification will be sent informing employees of their requirement and the due date.

5.4. Training Requirements — All Employees

As deemed necessary by the Code of Ethics staff, employees will be required to complete training on Putnam’s Code of Ethics. E-mail notifications will be sent notifying employees of the requirements and the due date.

5.5. Maintenance and Distribution of the Code of Ethics

When revisions are made to the Code of Ethics, all employees will receive a revised version of the Code. The Code will be available to all employees on Putnam’s intranet site. Hard copies may be requested by contacting the Code of Ethics staff.

5.6. Procedures and Timeliness

The certifications and reports required by the Code are completed in the Code of Ethics PTA system. There are strict deadlines for these filings. Planned absences, vacations, and business trips are not valid excuses for failing to meet a deadline. Employees will receive instructions regarding these submissions and the due dates. Please contact the Code of Ethics staff for assistance.

Section 6 — General Ethics Rules for All Employees

Putnam employees are expected to act ethically at all times in connection with their employment. In addition to complying with the specific provisions of this section, employees should contact the Code of Ethics staff or the Ombudsman if they are not sure how to proceed in any circumstances involving ethical issues or questions.

6.1. Outside Business Activities

No Putnam employee shall serve as employee, officer, director, trustee, or general partner of a corporation or entity other than Putnam, without prior written approval of the Code of Ethics Officer, who may also confirm that the employee’s manager has approved such outside position. Requests for a role at a publicly traded company are especially disfavored and are closely reviewed. Permission will be granted only in extenuating circumstances.

All employees must provide a written request seeking approval from the Code of Ethics Officer by entering the details of the proposed position in the Code of Ethics PTA system. Employees may not engage in any outside employment activity until they receive an e-mail approving their request. Employees hired at Putnam with an outside position must disclose the position upon hire in the system and may be required to resign such position if the position presents conflicts of interest or other issues.

FINRA-licensed employees under PRM also have an obligation to disclose outside positions to, and receive approval from the PRM Compliance Department. Employees must also keep this information accurate by updating their profile in the Code of Ethics system and updating the PRM Compliance Department if they change or terminate a position previously approved.

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6.2. Charitable or Non-profit Roles/Role as Trustee or Fiduciary Outside Putnam Investments

6.2(a) An employee may serve as a volunteer, officer, director, or trustee of a charitable or not-for-profit institution, provided that the employee abides by the Code of Ethics with respect to any investment activity for which she has any discretion or input as a volunteer, officer, director, or trustee. The pre-clearance and reporting requirements of the Code of Ethics do not apply to the trading activities of such charitable or not-for-profit institutions for which an employee serves as a volunteer, officer, director, or trustee unless the employee has discretion for the account. You must contact the Code of Ethics staff if you are asked to serve in a role in which you may have discretion, investment, or financial authority for a charitable or not-for-profit institution to discuss whether such position is permissible and whether you must perform any additional actions prior to serving in such role.

6.2(b) Except as stated below, no Putnam employee shall serve as a trustee, an executor, a custodian, or any other fiduciary, or as an investment advisor or a counselor for any account outside Putnam.

Putnam employees may serve as a fiduciary with respect to a religious or charitable trust or foundation, provided that the employee abides by the Code of Ethics with respect to any investment activity for which she has any discretion or input. The pre-clearance and reporting requirements of the Code of Ethics apply to the trading activities of such a religious or charitable trust or foundation if the employee has discretion for the account.

6.2(c) Family Trust or Estate Exception. Putnam employees may serve as a fiduciary with respect to a family trust or estate, as long as the employee abides by all of the Rules of the Code of Ethics with respect to any investment activity over which he has any discretion.

6.3. Family Members’ Conflict Policy

No employee or member of an employee’s Immediate Family shall have any direct or indirect personal financial interests in companies that do business with Putnam, unless such interest is disclosed and approved by the Code of Ethics Officer.

6.3(a) Corporate Purchase of Goods and Services — Putnam will not acquire goods and services from any firm in which a member of an employee’s Immediate Family serves as a sales representative or in a senior management capacity, or has an ownership interest (excluding normal investment holdings in public companies), unless permission is obtained from the Assistant Treasurer and the Code of Ethics Officer. Any employee who is aware of a proposal to purchase goods and services from a firm with which a member of the employee’s Immediate Family has one of these associations must notify the Assistant Treasurer and the Code of Ethics Officer.

6.3(b) Portfolio Trading – Putnam will not allocate any client trades to any firm that employs a member of an employee’s Immediate Family as a sales representative to Putnam (in a primary, secondary, or backup role). Any Putnam employee who is aware that an Immediate Family member serves as a broker-dealer’s sales representative to Putnam should inform the Code of Ethics Officer.

6.3(c) Definition of Immediate Family (specific to this rule) – “Immediate Family” of an employee means (1) spouse, fiancé(e), or domestic partner of the employee, (2) any child, sibling, or parent of an employee and any person married to a child, sibling or parent of an employee, and (3) any other person who lives in the same household as the employee.

6.4. CFA Institute Code of Ethics and Standards of Professional Conduct

All members of the Investment Division and any other CFA Institute Members or Candidates must follow and abide by the spirit of the Code of Ethics and the Standards of Professional Conduct of the CFA Institute. The text of the CFA Institute Code of Ethics and Standards of Professional Conduct can be found on the Putnam Compliance Department intranet home page, which is accessible from the Putnam intranet home page. The terms of Putnam’s Code of Ethics shall govern in any case where there is a conflict between the terms of this Code and the CFA Institute Code of Ethics and Standards of Professional Conduct. Please contact the Code of Ethics Officer with any questions.

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6.5. Business Ethics, Ombudsman, and Hotlines

6.5(a) If a Putnam employee suspects that fraudulent, illegal, or other irregular activity (including violations of the Code of Ethics) might be occurring at Putnam, the activity should be reported immediately to Putnam’s Controller, Chief Compliance Officer or Code of Ethics Officer, through the Ombudsman or hotlines described below or through Putnam’s Human Resources department.

6.5(b) Putnam has established the office of the corporate ombudsman as a resource to help employees address legal or ethical issues in the workplace and to allow employees to voice concerns or seek clarity on issues. The Ombudsman provides a confidential, independent, and impartial source to employees to discuss potential violations of law or of company standards without fear of retribution, and serves as a neutral party with no vested interest in a particular outcome.

6.5(c) An employee who does not feel comfortable reporting activity in the manner described in 6.5(a) above may instead contact any of the following on an anonymous basis:

• The Putnam Ethics hotline at 1-888-475-4210,

• The Putnam Funds Trustees’ hotline at 1-866-858-4155, or

• Putnam’s Ombudsman at 1-866-ombuds7 (866-662-8377).

Section 7 — Material, Non-Public Information and Insider Trading

7.1. Material, Public Information and Insider Trading

Antifraud provisions of the U.S. securities laws as well as the laws of other countries generally prohibit persons who possess material, non-public information from trading on or communicating that information to others. Putnam’s policy calls for strict compliance with such laws. Unlawful trading while in possession of material, non-public information is a very serious matter and can be a crime punishable by imprisionment. There is also significant monetary liability for an inside trader, which can include liability to private plaintiffs and/or the Securities and Exchange Commission, which can seek a court order requiring a violator to pay back profits, as well as penalties substantially greater than those profits. In certain cases, controlling persons of inside traders, including supervisors of inside traders or Putnam itself, can be liable for penalties.

Employees found to have conducted this activity will be immediately referred to the Code of Ethics Oversight Committee or Putnam’s Chief Executive Officer to determine the appropriate sanction, up to and including termination.

While employees in the Investment Division are most likely to come into contact with material, non-public information, the rules (and sanctions) in this area apply to all Putnam employees (see Section 7.2 for information on what to do if you believe you may have material, non-public information).

7.2. Reporting and Restrictions

Any employee who believes he or she is (or may be) in possession of material, non-public information must immediately contact Putnam’s Code of Ethics Officer or an attorney in Putnam’s Legal Department, and provide details on the information received and the source. The employee must also take precautions to maintain the confidentiality of the information in question.

After reviewing the facts and circumstances, Putnam’s Code of Ethics Officer or Putnam’s Legal Department will make a determination as to whether possession of the information warrants restricting trading activity in the issuer’s securities for client accounts as well as personal securities transactions for employees.

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7.3. Special Provisions Applicable to Putnam Affiliates

Any employee wishing to place a trade in the securities of Great-West Lifeco Inc., Power Financial Corporation, Power Corporation of Canada, or IGM Financial Inc. must contact the Code of Ethics Officer or the Deputy Code of Ethics Officer to request manual approval of the pre-clearance request. An employee requesting such approval must certify that he or she is not in possession of any material, non-public information regarding the company in which he or she is seeking to place a trade. The decision whether or not to grant the pre-clearance request is in the sole discretion of the Code of Ethics Officer and the Deputy Code of Ethics Officer. The Code of Ethics Officer and Deputy Code of Ethics Officer will reject any such request for pre-clearance made by members of Putnam’s Operating Committee and certain members of the Chief Financial Officer’s staff from the end of each calendar quarter to the date of announcement of Great-West Lifeco Inc.’s earnings for such quarter.

7.4. PIL Employees

For PIL employees, these topics are covered by the FSA’s Market Abuse rules. PIL employees receive information on this topic in their annual instructor-led code of ethics and compliance training.

Section 8 — Sanctions

The Code of Ethics Oversight Committee has adopted the following minimum monetary sanctions for violations of the Code. These sanctions apply even if the exception results from inadvertence rather than intentional misbehavior. The Code of Ethics Oversight Committee will review and approve sanctions on employees. However, the sanctions noted below are only minimums, and the Committee reserves the right to impose sanctions it believes fit the circumstances, such as higher monetary sanctions, trading bans, suspension, or termination of employment. The Committee’s belief that an employee has violated the Code of Ethics intentionally may result in more severe sanctions than outlined in the guidelines.

8.1. Sanctions for Violations of Sections 1–3

The minimum sanction per violation of the Rules in Sections 1, 2, or 3 is disgorgement of any profits or payment of avoided losses and the following payments:

Officer level	SMD/MD/SVP	VP/AVP/Non-officer
1st violation	$250	$50
2nd violation	$500	$100
	Minimum monetary sanction as above with ban on all new personal
3rd violation	securities transactions

8.2. Sanctions for Violations of Sections 4–6

The minimum sanction for violations of the rules in Sections 4–6 is as follows:

Officer level	SMD/MD/SVP	VP/AVP/Non-officer
1st violation	Warning	Warning
2nd violation	$50	$25
Subsequent violation	$100	$50

8.3. Sanctions for Violations of Section 7

All violations concerning the use of material, non-public information, failure to report inside information, or insider trading will be presented to the Code of Ethics Oversight Committee to determine the appropriate sanction, up to and including termination. Severe criminal penalties may also be imposed.

The reference period for determining generally whether a violation is initial or subsequent will be three years.

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Section 9 — Procedures for Determinations and Exemptions

No perceived ambiguity in the Code of Ethics shall excuse any violation. Any employee who has a question concerning the applicability of the Code or believes the Code to be ambiguous in a particular situation should request a determination from the Code of Ethics Officer in advance of the conduct. Employees may also request an exemption from the Code of Ethics if they do so in advance of the conduct or transaction sought to be exempted.

Any employee seeking a determination or exemption shall provide the Code of Ethics Officer with such information as the Code of Ethics Officer deems necessary to render the determination or make a decision on the exemption.

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Appendix A — Contra-Trading Rule Clearance Form

To: Code of Ethics Officer

From:	Date:
Re: Sale of Personal Security

This serves as prior written approval to sell the following personal security:

Name of portfolio manager contemplating personal sale:
Security to be sold:
Number of shares to be sold:
Fund(s) holding security:
Number of shares held by fund:
Reason for the personal sale:
Specify the reason why the sale is inappropriate for fund: (Please attach additional sheets if necessary.)
CIO approval:	Date:
Code of Ethics Officer:
Deputy Code of Ethics Officer approval:	Date:

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Putnam Investments | One Post Office Square | Boston, MA 02109 | putnam.com

262362 6/10

EX-99.CODE ETH

THE PUTNAM FUNDS 

Code of Ethics

Each of The Putnam Funds (the "Funds") has determined to adopt this Code of Ethics with respect to certain activities by officers and Trustees of the Funds which might be deemed to create possible conflicts of interest and to establish reporting requirements and enforcement procedures with respect to such activities.

I. Rules Applicable to Officers and Trustees Affiliated with Putnam Investments Trust or Its Subsidiaries

A. Incorporation of Adviser's Code of Ethics. The provisions of the Code of Ethics for employees of Putnam Investments Trust and its subsidiaries (the "Putnam Investments Code of Ethics"), which is attached as Appendix A hereto, are hereby incorporated herein as the Funds' Code of Ethics applicable to officers and Trustees of the Funds who are employees of the Funds or officers, directors or employees of Putnam Investments Trust or its subsidiaries. A violation of the Putnam Investments' Code of Ethics shall constitute a violation of the Funds' Code.

B. Reports. Officers and Trustees of each of the Funds who are made subject to the Putnam Investments' Code of Ethics pursuant to the preceding paragraph shall file the reports required by the Putnam Investments' Code of Ethics with the Code of Ethics Officer designated therein. A report filed with the Code of Ethics Officer shall be deemed to be filed with each of the Funds of which the reporting individual is an officer or Trustee.

C. Review and Reporting.

(1) The Code of Ethics Officer shall cause the reported personal securities transactions to be compared with completed and contemplated portfolio transactions of each of the Funds to determine whether a violation of this Code may have occurred. Before making any determination that a violation has been committed by any person, the Code of Ethics Officer shall give such person an opportunity to supply additional explanatory material.

(2) If the Code of Ethics Officer determines that a violation of any provision of this Code has or may have occurred, he shall submit his written determination, together with any additional explanatory material, to the Audit and Compliance Committee of the Funds at its next meeting when Code of Ethics matters are discussed.

D. Sanctions. In addition to reporting violations of this Code to the Audit and Compliance Committee of the Funds as provided in Section I-C(2), the Code of Ethics Officer shall also report to such Committee any sanctions imposed with

respect to such violations. The Committee reserves the right to impose such additional sanctions as it deems appropriate.

II. Rules Applicable to Unaffiliated Trustees

A. Definitions.

(1) "Beneficial ownership" shall be interpreted in the same manner as it would be in determining whether a person is subject to the provisions of Section 16 of the Securities Exchange Act of 1934 and the rules and regulations thereunder.

(2) "Control" means the power to exercise a controlling influence over the management or policies of a company, unless such power is solely the result of an official position with such company.

(3) "Covered Person" means an affiliated person of the Fund, who is not made subject to the Putnam Investments Code of Ethics pursuant to Part I hereof.

(4) "Interested Trustee" means a Trustee of a Fund who is an "interested person" of the Fund within the meaning of the Investment Company Act of 1940, as amended (the "Investment Company Act").

(5) "Purchase or sale of a security" includes, among other things, the writing of an option to purchase or sell a security.

(6) "Security" shall have the same meaning as that set forth in Section 2(a)(36) of the Investment Company Act (in effect, all securities) except that it shall not include securities issued by the Government of the United States or an agency thereof, bankers' acceptances, bank certificates of deposit, commercial paper and high-quality short-term debt investments, including repurchase agreements, and shares of registered open-end investment companies, but shall include any security convertible into or exchangeable for a security.

(7) "Security Held or to be Acquired by a Fund" means: (i) any security, as defined herein, which, within the most recent 15 days: (A) is or has been held by the Fund, or (B) is being or has been considered by the Fund or Putnam Investments for purchase by the Fund, and (ii) any option to purchase or sell, and any security convertible into or exchangeable for, a security described in (i) above.

(8) "Unaffiliated Trustee" means a Trustee who is not made subject to the Putnam Investments Code of Ethics pursuant to Part I hereof.

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B. Prohibited Actions. No Covered Person, in connection with the purchase or sale, directly or indirectly, by such Covered Person of a security held or to be acquired by the Fund, shall:

(1) Employ any device, scheme or artifice to defraud the Fund;

(2) Make any untrue statement of a material fact to the Fund or omit to state a material fact necessary in order to make the statements made to the Fund, in light of the circumstances under which they are made, not misleading;

(3) Engage in any act, practice or course of business that operates or would operate as a fraud or deceit on the Fund; or

(4) Engage in any manipulative practice with respect to the Fund.

C. Reporting.

(1) Every Unaffiliated Trustee of a Fund shall file with the Funds' Compliance Liaison a report containing the information described in Section II-C(2) of this Code with respect to purchases or sales of any security in which such Unaffiliated Trustee has, or by reason of such transaction acquires, any direct or indirect beneficial ownership, if such Trustee, at the time of that transaction, knew or, in the ordinary course of fulfilling his official duties as a Trustee of the Fund, should have known that, during the 15-day period immediately preceding or after the date of the transaction by the Trustee:

(a) such security was or is to be purchased or sold by the Fund or

(b) such security was or is being considered for purchase or sale by the Fund;

provided, however, that an Unaffiliated Trustee shall not be required to make a report with respect to transactions effected for any account over which such person does not have any direct or indirect influence or control.

(2) Every report shall be made not later than 10 days after the end of the calendar quarter in which the transaction to which the report relates was effected, and shall contain the following information:

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(a) The date of the transaction, the title, the number of shares, the interest rate and maturity date (if applicable) and the principal amount of each security involved;

(b) The nature of the transaction (i.e., purchase, sale or any other type of acquisition or disposition);

(c) The price at which the transaction was effected;

(d) The name of the broker, dealer or bank with or through whom the transaction was effected; and

(e) the date that the report is submitted by each Unaffiliated Trustee.

(3) Any such report may contain a statement that the report shall not be construed as an admission by the person making such report that he has any direct or indirect beneficial ownership in the security to which the report relates.

(4) Notwithstanding anything to the contrary contained herein, an Unaffiliated Trustee who is an "interested person" of the Funds shall file the reports required by Rule 17j-1(d)(1) under the Investment Company Act with the Code of Ethics Officer of Putnam Investments. Such reports shall be reviewed by such Officer as provided in Section I-D(1) and any related violations shall be reported by him to the Audit and Compliance Committee as provided in Section I-C(2). The Committee may impose such additional sanctions as it deems appropriate.

D. Review and Reporting.

(1) The Compliance Liaison of the Funds, in consultation with the Code of Ethics Officer of Putnam Investments, shall cause the reported personal securities transactions that he receives pursuant to Section II-C(1) to be compared with completed and contemplated portfolio transactions of the Funds to determine whether any prohibited action listed in Section II-B may have occurred.

(2) Before making any determination that a violation of this Code has occurred, the Compliance Liaison shall give the person involved an opportunity to supply additional information regarding the transaction in question.

E. Sanctions. If the Compliance Liaison determines that a violation of this Code has occurred, he shall so advise the Funds' Audit and Compliance Committee, and provide the Committee with a report of the matter, including any additional information supplied by such person. The Committee may impose such sanctions as it deems appropriate.

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III. Miscellaneous

A. Amendments to the Putnam Investments' Code of Ethics. Any amendment to the Putnam Investments' Code of Ethics shall be deemed an amendment to Section 1-A of this Code effective 30 days after written notice of such amendment shall have been received by the Chairman of the Funds, unless the Trustees of the Funds expressly determine that such amendment shall become effective at an earlier or later date or shall not be adopted.

B. Records. The Funds shall maintain records in the manner and to the extent set forth below, which records may be maintained on microfilm under the conditions described in Rule 31a-2(f)(1) under the Investment Company Act and shall be available for examination by representatives of the Securities and Exchange Commission.

(1) A copy of this Code and any other code which is, or at any time within the past five years has been, in effect shall be preserved in an easily accessible place;

(2) A record of any violation of this Code and of any action taken as a result of such violation shall be preserved in an easily accessible place for a period of not less than five years following the end of the fiscal year in which the violation occurs;

(3) A copy of each report made by an officer or Trustee pursuant to this Code shall be preserved for a period of not less than five years from the end of the fiscal year in which it is made, the first two years in an easily accessible place;

(4) A list of all persons who are, or within the past five years have been, required to make reports pursuant to this Code shall be maintained in an easily accessible place; and

(5) To the extent any record required to be kept by this section is also required to be kept by Putnam Investments pursuant to the Putnam Investments' Code of Ethics, Putnam Investments shall maintain such record on behalf of the Funds as well.

C. Confidentiality. All reports of securities transactions and any other information filed with any Fund pursuant to this Code shall be treated as confidential, but are subject to review as provided herein and by personnel of the Securities and Exchange Commission.

D. Interpretation of Provisions. The Trustees may from time to time adopt such interpretations of this Code as they deem appropriate.

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E. Delegation by Chairman. The Chairman of the Funds may from time to time delegate any or all of his responsibilities under this Code, either generally or as to specific instances, to such officer or Trustee of the Funds as he may designate.

As revised
September 11, 2009

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