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:         Bryan Chegwidden, Esq.
Ropes & Gray LLP
1211 Avenue of the Americas
New York, New York 10036

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

Date of fiscal year end: October 31, 2016

Date of reporting period : November 1, 2015 — October 31, 2016

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
Absolute Return
700 Fund ^®

Annual report
10 | 31 | 16

Message from the Trustees	1
Interview with your fund’s portfolio manager	3
Your fund’s performance	9
Your fund’s expenses	13
Terms and definitions	15
Other information for shareholders	17
Important notice regarding Putnam’s privacy policy	18
Trustee approval of management contract	19
Financial statements	24
Federal tax information	87
About the Trustees	88
Officers	90

Consider these risks before investing: Allocation of assets among asset classes may hurt performance. The value of stocks and bonds in the fund’s portfolio may fall or fail to rise over time for several reasons, including general financial market conditions, changing market perceptions of the risk of default, changes in government intervention in the financial markets, and factors related to a specific issuer or industry. These factors may also lead to periods of high volatility and reduced liquidity in the bond markets. 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. Lower-rated bonds may offer higher yields in return for more risk. Funds that invest in government securities are not guaranteed. Mortgage-backed securities are subject to prepayment risk and the risk that they may increase in value less when interest rates decline and decline in value more when interest rates rise. International investing involves currency, economic, and political risks. Emerging-market securities have illiquidity and volatility risks. Our alpha strategy may lose money or not earn a return sufficient to cover associated trading and other costs. Our use of leverage obtained through derivatives increases these risks by increasing investment exposure. Risks associated with derivatives include increased investment exposure (which may be considered leverage) and, in the case of over-the-counter instruments, the potential inability to terminate or sell derivatives positions and the potential failure of the other party to the instrument to meet its obligations. The fund’s efforts to produce lower-volatility returns may not be successful and may make it more difficult at times for the fund to achieve its targeted return. Under certain market conditions, the fund may accept greater-than-typical volatility to seek its targeted return. The fund may not achieve its goal, and it is not intended to be a complete investment program. You can lose money by investing in the fund. The fund’s prospectus lists additional risks.

Message from the Trustees

December 13, 2016

Dear Fellow Shareholder:

The U.S. presidential election is now behind us, but the transitional period in Washington, D.C., may bring bouts of volatility to the financial markets. Election campaigns are often followed by uncertainty regarding the new administration, and new presidents may seek to make legislative changes to economic policies.

If recent history is a worthy guide, we believe it is important for investors to remain well diversified, maintain a long-term view, and not overreact to volatile markets. To help ensure that your portfolio is aligned with your individual goals, time horizon, and tolerance for risk, we believe it is a good idea to speak regularly with your financial advisor.

In today’s environment, we favor the investment approach practiced at Putnam — active strategies based on fundamental research. Putnam portfolio managers, backed by a network of global analysts, bring years of experience to navigating changing market conditions and pursuing investment opportunities. In the following pages, you will find an overview of your fund’s performance for the reporting period ended October 31, 2016, as well as an outlook for the coming months.

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 below and pages 9–12 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 fund seeks to earn a positive total return that exceeds the return on U.S. Treasury bills by 700 basis points (or 7.00%) on an annualized basis over a reasonable period of time (generally at least three years or more) regardless of market conditions.

The fund is not expected to outperform during periods of market rallies.

This comparison shows your fund’s performance in the context of broad market indexes for the 12 months ended 10/31/16. See above and pages 9–12 for additional fund performance information. Index descriptions can be found on page 16.

2   Absolute Return 700 Fund 

 

Bob is Co-Head of Global Asset Allocation at Putnam. He holds an M.B.A. from the Bentley University Graduate School of Business and a B.A. from the University of Massachusetts, Amherst. Bob 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, Robert J. Schoen, and Jason R. Vaillancourt, CFA.

Bob, how would you describe the global investment environment during the 12-month reporting period ended October 31, 2016?

At the beginning of the reporting period, markets were facing the possibility of the first interest rate hike by the Federal Reserve in nearly 10 years. Commodity markets were declining. Then in December, the Fed did approve a one-quarter point increase in its target funds interest rate, signaling confidence in the U.S. economic recovery.

At the start of 2016, the market retreated again, falling on renewed concerns about China, a global economic slowdown, and sinking oil prices. Crude oil prices reached a 13-year low in February. Concerns about a global recession, weakening demand for natural resources from emerging markets, and high levels of global inventories combined to bring down the price of oil. That said, oil prices stabilized and rebounded in the months that followed as growth in global demand reappeared, and the markets recovered in tandem.

In June, the United Kingdom surprised the world when voters approved Brexit, the referendum to exit from the European

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Allocations are shown as a percentage of the fund’s net assets as of 10/31/16. Cash 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 use of different classifications of securities for presentation purposes, and rounding. Allocations may not total 100% because the table includes the notional value of derivatives (the economic value for purposes of calculating periodic payment obligations), in addition to the market value of securities. Holdings and allocations may vary over time. Negative weights may result from timing differences between trade and settlement dates of securities, such as TBAs, or by the use of derivatives.

Union [EU]. After plummeting following the vote, stocks bounced back strongly, almost turning the Brexit vote into a non-event for the markets. Most asset classes meaningfully recovered from the temporary downturn; the one notable exception was the British pound. The remainder of the summer was characterized by low volatility and low trading volumes. Markets generally were quiet, without many days having significant swings either up or down.

In the wake of Brexit, central banks around the world communicated that they would remain accommodative and stimulative. The Fed, after citing signs of weakness in the U.S. economy and overseas concerns, decided not to raise interest rates again during the period. At its September 2016 meeting, however, the Fed indicated that a rate hike could occur at the central bank’s December 2016 meeting.

Also of note during the period was the U.S. presidential election campaign, with its

4   Absolute Return 700 Fund 

two very different candidates. The colorful campaign season likely held back stock performance to a degree, as the market does not like uncertainty.

For the reporting period overall, the S&P 500 Index, a bellwether for the broad U.S. stock market, returned 4.51%. Equities in the international developed markets outside the United States, as represented by the MSCI EAFE Index [ND], underperformed, returning –3.23% for the period. On the fixed-income side, the Bloomberg Barclays U.S. Aggregate Bond Index returned 4.37% for the period, while the JPMorgan Developed High Yield Index gained 8.52%.

Would you please summarize the fund’s overall investment strategy?

Putnam Absolute Return 700 Fund seeks to earn a positive total return that exceeds the return of U.S. Treasury bills by 7% on an annualized basis over a reasonable time period [generally at least three years or more] regardless of market conditions.

We seek to do this by utilizing both directional and non-directional strategies. Directional strategies look to capitalize on opportunities in global markets based on our assessment of broad market trends. These trends may involve either positive or negative market movements. Non-directional strategies are market-neutral

This table shows the fund’s top 10 individual holdings and the percentage of the fund’s net assets that each represented as of 10/31/16. Short-term investments and derivatives, if any, are excluded. Holdings may vary over time.

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trades that seek to add value regardless of global market trends. We shift the composition of the portfolio’s risk between directional and non-directional strategies based on our active views on the relative potential of these approaches. In addition, the portfolio’s total risk exposure is adjusted based on our outlook and current market conditions. We use a variety of security types and other tools to implement our investment process as we seek to manage various global risks.

How did directional strategies influence the fund’s performance during the 12-month reporting period?

The fund’s exposure to interest-rate risk was a significant positive contributor to fund performance overall during the period. Within interest-rate risk, positioning achieved through swaps and futures — derivative instruments that offer a way of capitalizing on or protecting against changes in interest rates — were the biggest drivers of returns.

In the fourth quarter of 2015 — particularly in November and December — the fund was also exposed to corporate credit risk. We felt then-current spreads — or the difference in yield between corporate bonds and U.S. Treasuries of similar maturity — more than compensated investors for the underlying risk of corporate default. Within the fund, we also used high-yield credit default swaps — derivative instruments designed to provide exposure to movements in credit spreads. These credit exposures, however, hurt the portfolio through the end of 2015 and detracted for the reporting period overall despite positive returns in 2016.

Positioning in directional equity and inflation risk ended as slight detractors for the period, although positive returns for each in 2016 have helped offset particular weakness in November and December 2015.

How did the fund’s non-directional strategies perform during the period?

Non-directional strategies overall detracted from fund performance for the period, although

This chart shows how the fund’s top weightings have changed over the past six months. Allocations are shown as a percentage of the fund’s net assets. Cash and net other assets, if any, represent the market value weights of cash, derivatives, short-term securities, and other unclassified assets in the portfolio. Current period summary information may differ from the portfolio schedule included in the financial statements due to the inclusion of derivative securities, any interest accruals, the use of different classifications of securities for presentation purposes, and rounding. Holdings and allocations may vary over time.

6   Absolute Return 700 Fund 

some strategies did add value. Alternative beta strategies — which seek to add value by taking advantage of opportunities outside of traditional asset classes — were positive contributors over the reporting period. Within our equity selection alpha strategies, a forensic accounting trade that identifies companies using aggressive accounting practices and shorts them — or bets against them rising — relative to an index added value. A quantitatively driven sector-selection strategy also finished positive for the period. This stock strategy allowed us to target specific sectors of equity markets and establish either long or short positions.

Which non-directional strategies underperformed?

There were a few strategies that did not work well over the period. Equity selection alpha strategies were the biggest detractor. Quantitatively driven selection strategies — stock screens that allow us to establish market-neutral positions in specific stock markets — were notable detractors in both the United States and emerging markets. Our concentrated international alpha strategy, which quantitatively identifies long/short opportunities across five developed markets, was an underperformer as well. Another trade that underperformed was a regional fixed-income strategy that takes systematic long and short positions across global fixed-income markets, attempting to capture incremental positive returns in sovereign debt.

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 currency forward 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 often enters into collateral agreements that require the counterparties to post collateral on a regular basis to cover their obligations to the fund. Counterparty risk for exchange-traded futures and centrally cleared swaps is mitigated by the daily exchange of margin and other safeguards against default through their respective clearinghouses.

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Aside from the derivative strategies you have mentioned, did you use similar instruments for other strategies?

We use a variety of derivatives as tools. In this period, total return swaps, which we use to gain or manage exposures to specific securities or baskets of securities, detracted from fund performance. We also implemented strategies with options to hedge against changes in the values of certain securities and to hedge or isolate certain types of risk. In addition, forward contracts allowed us to manage currency exposures.

What is your outlook as we approach 2017?

We believe we will continue to see incremental positive growth in the United States. Compared with much of the rest of the world, the U.S. economy stands out as particularly healthy, in our view. While certainly not booming, we believe recent growth rates in U.S. gross domestic product indicate a steadily recovering economy. In the fourth quarter, we will be hoping to see better earnings expectations given current valuations in the stock market. The early November U.S. presidential election, ongoing negotiations between the United Kingdom and the European Union, and continued uncertainty in energy markets are a few situations we believe could introduce volatility into both equity and fixed-income markets in the final months of 2016 and into 2017.

Despite the possibility of further volatility and additional rate hikes by the Fed, we continue to maintain exposure to interest-rate risk, mainly because of what we consider to be its diversification value versus our equity positions. We expect to increase the fund’s exposure to commodities, as energy prices appear to have stabilized a bit and growth momentum appears to be a bit more firmly established. In addition, we believe that further volatility could create new opportunities within the fund’s non-directional strategies.

Thanks for your time and for bringing us up to date, Bob.

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.

8   Absolute Return 700 Fund 

Your fund’s performance

This section shows your fund’s performance, price, and distribution information for periods ended October 31, 2016, 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 P, R, R6, and 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 10/31/16

		Annual		Annual		Annual
	Life of fund	average	5 years	average	3 years	average	1 year
Class A (12/23/08)
Before sales charge	44.03%	4.75%	20.51%	3.80%	7.92%	2.57%	–1.81%
After sales charge	35.75­	3.97	13.58	2.58	1.72	0.57	–7.46
Class B (12/23/08)
Before CDSC	35.64­	3.96	16.10	3.03	5.55	1.82	–2.50
After CDSC	35.64­	3.96	14.13	2.68	2.78	0.92	–7.03
Class C (12/23/08)
Before CDSC	35.82­	3.97	16.14	3.04	5.56	1.82	–2.54
After CDSC	35.82­	3.97	16.14	3.04	5.56	1.82	–3.45
Class M (12/23/08)
Before sales charge	38.10­	4.20	17.56	3.29	6.36	2.08	–2.30
After sales charge	33.27­	3.72	13.44	2.56	2.64	0.87	–5.71
Class P (8/31/16)
Net asset value	46.71­	5.00	22.16	4.08	8.80	2.85	–1.48
Class R (12/23/08)
Net asset value	40.83­	4.46	19.12	3.56	7.20	2.34	–2.05
Class R6 (7/2/12)
Net asset value	47.25­	5.05	22.61	4.16	9.07	2.94	–1.40
Class Y (12/23/08)
Net asset value	46.71­	5.00	22.16	4.08	8.80	2.85	–1.48

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 P, R, R6, and Y shares have no initial sales charge or CDSC. Performance for class P 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 P 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.

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Comparative index returns For periods ended 10/31/16

		Annual		Annual		Annual
	Life of fund	average	5 years	average	3 years	average	1 year
BofA Merrill Lynch
U.S. Treasury Bill
Index	1.33%	0.17%	0.68%	0.14%	0.48%	0.16%	0.33%
Bloomberg
Barclays U.S.
Aggregate Bond
Index	39.39­	4.32	15.37	2.90	10.81	3.48	4.37
S&P 500 Index	191.68­	14.60	88.90	13.57	28.93	8.84	4.51

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

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 and C shares would have been valued at $13,564 and $13,582, respectively, 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 $13,327. A $10,000 investment in the fund’s class P, R, R6, and Y shares would have been valued at $14,671, $14,083, $14,725, and $14,671, respectively.

10   Absolute Return 700 Fund 

Fund price and distribution information For the 12-month period ended 10/31/16

Distributions	Class A		Class B	Class C	Class M		Class P	Class R	Class R6	Class Y
Number	1		1	1	1		—	1	1	1
Income	$0.784307		$0.695756	$0.709379	$0.734679		—	$0.750249	$0.819338	$0.811553
Capital gains
Long-term
gains	0.121000		0.121000	0.121000	0.121000		—	0.121000	0.121000	0.121000
Short-term
gains	—		—	—	—		—	—	—	—
Return of
capital*	0.021693		0.019244	0.019621	0.020321		—	0.020751	0.022662	0.022447
Total	$0.927000		$0.836000	$0.850000	$0.876000		—	$0.892000	$0.963000	$0.955000
	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
10/31/15	$12.45	$13.21	$12.16	$12.16	$12.25	$12.69	—	$12.31	$12.51	$12.47
8/31/16†	—	—	—	—	—	—	$11.25	—	—	—
10/31/16	11.28	11.97	11.01	10.99	11.08	11.48	11.31	11.15	11.35	11.31

The classification of distributions, if any, is an estimate. Before-sales-charge share value and current dividend rate 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 the time of purchase. Final distribution information will appear on your year-end tax forms.

Most recent distribution, including any return of capital and excluding capital gains, annualized and divided by NAV or market price at end of period.

^* See page 87.

^† Inception date of class P shares.

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Fund performance as of most recent calendar quarter Total return for periods ended 9/30/16

		Annual		Annual		Annual
	Life of fund	average	5 years	average	3 years	average	1 year
Class A (12/23/08)
Before sales charge	44.42%	4.84%	24.44%	4.47%	9.56%	3.09%	1.05%
After sales charge	36.11­	4.05	17.29	3.24	3.26	1.08	–4.76
Class B (12/23/08)
Before CDSC	36.13­	4.05	19.84	3.69	7.19	2.34	0.33
After CDSC	36.13­	4.05	17.84	3.34	4.38	1.44	–4.33
Class C (12/23/08)
Before CDSC	36.19­	4.06	19.78	3.68	7.11	2.31	0.28
After CDSC	36.19­	4.06	19.78	3.68	7.11	2.31	–0.65
Class M (12/23/08)
Before sales charge	38.47­	4.28	21.34	3.94	7.91	2.57	0.51
After sales charge	33.63­	3.80	17.09	3.21	4.13	1.36	–3.01
Class P (8/31/16)
Net asset value	46.97­	5.08	26.03	4.74	10.44	3.36	1.30
Class R (12/23/08)
Net asset value	41.21­	4.54	22.94	4.22	8.75	2.84	0.75
Class R6 (7/2/12)
Net asset value	47.51­	5.13	26.50	4.81	10.71	3.45	1.37
Class Y (12/23/08)
Net asset value	46.97­	5.08	26.03	4.74	10.44	3.36	1.30

See the discussion following the fund performance table on page 9 for information about the calculation of fund performance.

12   Absolute Return 700 Fund 

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. 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 P	Class R	Class R6	Class Y
Total annual operating expenses
for the fiscal year ended
10/31/15*	1.30%	2.05%	2.05%	1.80%	0.90%**	1.55%	0.94%	1.05%
Annualized expense ratio for
the six-month period ended
10/31/16†‡	1.18%	1.93%	1.93%	1.68%	0.80%	1.43%	0.84%	0.93%

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.

Prospectus expense information also includes the impact of acquired fund fees and expenses of 0.01%, which is not included in the financial highlights or annualized expense ratios. Expenses are shown as a percentage of average net assets.

^* Restated to reflect current fees resulting from servicing arrangements effective 9/1/16.

^** 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 P shares.

^† Expense ratios for each class, except for those that started up during the six-month period, are for the fund’s most recent fiscal half year. For a new class, the ratio is for the period from the inception date of the class to 10/31/16. Class inception dates can be found in the Fund performance table on the first page of the Your fund’s performance section. As a result of this, ratios may differ from expense ratios based on one-year data in the financial highlights.

^‡ Includes a decrease of 0.16% from annualizing the performance fee adjustment for the six months ended 10/31/16.

Expenses per $1,000

The following table shows the expenses you would have paid on a $1,000 investment in each class from 5/1/16 to 10/31/16. For a new class, the expenses shown are for the period from the inception date of the class to 10/31/16. Class inception dates can be found in the Fund performance table on the first page of the Your fund’s performance section. The table 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 P ‡	Class R	Class R6	Class Y
Expenses paid per $1,000 *†	$6.02	$9.82	$9.83	$8.56	$1.38	$7.29	$4.29	$4.75
Ending value
(after expenses)	$1,029.20	$1,025.10	$1,026.10	$1,026.90	$1,031.00	$1,028.60	$1,031.80	$1,031.00

^* 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 10/31/16, or in the case of a new class, the average net assets of the class from the inception date for the class to 10/31/16. Class inception dates can be found in the Fund performance table on the first page of the Your fund’s performance section. 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.

^‡ Had expenses for shares of any new class been shown for the entire period from 5/1/16 to 10/31/16, they would have been higher.

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Estimate the expenses you paid

To estimate the ongoing expenses you paid for the six months ended 10/31/16, use the following calculation method. To find the value of your investment on 5/1/16, 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 P	Class R	Class R6	Class Y
Expenses paid per $1,000 *†	$5.99	$9.78	$9.78	$8.52	$4.06	$7.25	$4.27	$4.72
Ending value
(after expenses)	$1,019.20	$1,015.43	$1,015.43	$1,016.69	$1,021.11	$1,017.95	$1,020.91	$1,020.46

^* 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 10/31/16, or in the case of a new class, the average net assets of the class from the inception date for the class to 10/31/16. Class inception dates can be found in the Fund performance table on the first page of the Your fund’s performance section. The expense ratio may differ for each share class.

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

14   Absolute Return 700 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 and 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.

Class P shares require no minimum initial investment amount and no minimum subsequent investment amount. There is no initial or deferred sales charge. They are available only to other Putnam funds and other accounts managed by Putnam Management or its affiliates.

Class R shares are not subject to an initial sales charge or CDSC and are available only to employer-sponsored retirement plans.

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.

Fixed-income terms

Current rate is the annual rate of return earned from dividends or interest of an investment. Current rate is expressed as a percentage of the price of a security, fund share, or principal investment.

Mortgage-backed security (MBS), also known as a mortgage “pass-through,” is a type of asset-backed security that is secured by a mortgage or collection of mortgages. The following are types of MBSs:

• Agency “pass-through” has its principal and interest backed by a U.S. government agency, such as the Federal National Mortgage Association (Fannie Mae), Government National Mortgage Association (Ginnie Mae), and Federal Home Loan Mortgage Corporation (Freddie Mac).

• Collateralized mortgage obligation (CMO) represents claims to specific cash flows from pools of home mortgages. The streams of principal and interest payments on the mortgages are distributed to the different classes of CMO interests in “tranches.” Each tranche may have different principal balances, coupon rates, prepayment risks, and maturity dates. A CMO is highly sensitive to changes in interest rates

Absolute Return 700 Fund   15 

and any resulting change in the rate at which homeowners sell their properties, refinance, or otherwise prepay loans. CMOs are subject to prepayment, market, and liquidity risks.

• Interest-only (IO) security is a type of CMO in which the underlying asset is the interest portion of mortgage, Treasury, or bond payments.

• Non-agency residential mortgage-backed security (RMBS) is an MBS not backed by Fannie Mae, Ginnie Mae, or Freddie Mac. One type of RMBS is an Alt-A mortgage-backed security.

• Commercial mortgage-backed security (CMBS) is secured by the loan on a commercial property.

Yield curve is a graph that plots the yields of bonds with equal credit quality against their differing maturity dates, ranging from shortest to longest. It is used as a benchmark for other debt, such as mortgage or bank lending rates.

Comparative indexes

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

BofA Merrill Lynch U.S. Treasury Bill Index is an unmanaged index that tracks the performance of U.S. dollar-denominated U.S. Treasury bills publicly issued in the U.S. domestic market. Qualifying securities must have a remaining term of at least one month to final maturity and a minimum amount outstanding of $1 billion.

JPMorgan Developed High Yield Index is an unmanaged index of high-yield fixed-income securities issued in developed countries. You cannot invest directly in an index.

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

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

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.

16   Absolute Return 700 Fund 

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, 2016, 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 Form N-Q on the SEC’s website at www.sec.gov. In addition, the fund’s Form 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 October 31, 2016, Putnam employees had approximately $492,000,000 and the Trustees had approximately $132,000,000 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.

Absolute Return 700 Fund   17 

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.

18   Absolute Return 700 Fund 

Trustee approval of management contract

General conclusions

The Board of Trustees of The Putnam Funds oversees the management of each fund and, as required by law, determines annually whether to approve the continuance of your fund’s management contract with Putnam Investment Management, LLC (“Putnam Management”), the sub-management contract with respect to your fund between Putnam Management and its affiliate, Putnam Investments Limited (“PIL”), and the sub-advisory contract among Putnam Management, PIL, and another affiliate, The Putnam Advisory Company (“PAC”). The Board, with the assistance of its Contract Committee, requests and evaluates all information it deems reasonably necessary under the circumstances in connection with its annual contract review. The Contract Committee consists solely of Trustees who are not “interested persons” (as this term is defined in the Investment Company Act of 1940, as amended (the “1940 Act”)) of The Putnam Funds (“Independent Trustees”).

At the outset of the review process, members of the Board’s independent staff and independent legal counsel discussed with representatives of Putnam Management the annual contract review materials furnished to the Contract Committee during the course of the previous year’s review, identifying possible changes in these materials that might be necessary or desirable for the coming year. Following these discussions and in consultation with the Contract Committee, the Independent Trustees’ independent legal counsel requested that Putnam Management and its affiliates furnish specified information, together with any additional information that Putnam Management considered relevant, to the Contract Committee. Over the course of several months ending in June 2016, the Contract Committee met on a number of occasions with representatives of Putnam Management, and separately in executive session, to consider the information that Putnam Management provided, as well as supplemental information provided in response to an additional request made by the Contract Committee. Throughout this process, the Contract Committee was assisted by the members of the Board’s independent staff and by independent legal counsel for The Putnam Funds and the Independent Trustees.

In May 2016, the Contract Committee met in executive session to discuss and consider its recommendations with respect to the continuance of the contracts. At the Trustees’ June 24, 2016 meeting, the Contract Committee met in executive session with the other Independent Trustees to review a summary of the key financial, performance and other data that the Contract Committee considered in the course of its review. The Contract Committee then presented its written report, which summarized the key factors that the Committee had considered and set forth its recommendations. The Contract Committee then recommended, and the Independent Trustees approved, the continuance of your fund’s management, sub-management and sub-advisory contracts, effective July 1, 2016. (Because PIL and PAC are affiliates of Putnam Management and Putnam Management remains fully responsible for all services provided by PIL and PAC, the Trustees have not attempted to evaluate PIL or PAC as separate entities, and all subsequent references to Putnam Management below should be deemed to include reference to PIL and PAC as necessary or appropriate in the context.)

The Independent Trustees’ approval was based on the following conclusions:

• That the fee schedule in effect for your fund represented reasonable compensation in light of the nature and quality of the services being provided to the fund, the fees paid by competitive funds, the costs incurred by Putnam Management in providing services to the fund, and the continued application of certain reductions and waivers noted below; and

• That the fee schedule in effect for your fund represented an appropriate sharing between fund shareholders and Putnam Management of such economies of scale as may exist in the management of the fund at current asset levels.

These conclusions were based on a comprehensive consideration of all information provided to the Trustees and were not the result of any single factor. Some of the factors that figured particularly in the Trustees’ deliberations and how the Trustees considered these factors are described below, although individual Trustees may have evaluated the information presented differently, giving different weights to various factors. It is also important to recognize that the management

Absolute Return 700 Fund   19 

arrangements for your fund and the other Putnam funds are the result of many years of review and discussion between the Independent Trustees and Putnam Management, that some aspects of the arrangements may receive greater scrutiny in some years than others, and that the Trustees’ conclusions may be based, in part, on their consideration of fee arrangements in previous years. For example, with some minor exceptions, the funds’ current fee arrangements under the management contracts were first implemented at the beginning of 2010 following extensive review by the Contract Committee and discussions with representatives of Putnam Management, as well as approval by shareholders.

Management fee schedules and total expenses

The Trustees reviewed the management fee schedules in effect for all Putnam funds, including fee levels and breakpoints. The Trustees also reviewed the total expenses of each Putnam fund, recognizing that in most cases management fees represented the major, but not the sole, determinant of total costs to shareholders. (In a few instances, funds have implemented so-called “all-in” management fees covering substantially all routine fund operating costs.)

In reviewing fees and expenses, the Trustees generally focus their attention on material changes in circumstances — for example, changes in assets under management, changes in a fund’s investment style, changes in Putnam Management’s operating costs or profitability, or changes in competitive practices in the mutual fund industry — that suggest that consideration of fee changes might be warranted. The Trustees concluded that the circumstances did not indicate that changes to the management fee structure for your fund would be appropriate at this time.

Under its management contract, your fund has the benefit of breakpoints in its management fee schedule that provide shareholders with economies of scale in the form of reduced fee rates as assets under management in the Putnam family of funds increase. The Trustees concluded that the fee schedule in effect for your fund represented an appropriate sharing of economies of scale between fund shareholders and Putnam Management.

In addition, your fund’s management contract provides that its management fees will be adjusted up or down depending upon whether your fund’s performance is better or worse than the performance of an appropriate index of securities prices specified in the management contract. In the course of reviewing investment performance, the Trustees examined the operation of your fund’s performance fees and concluded that these fees were operating effectively to align further Putnam Management’s economic interests with those of the fund’s shareholders.

As in the past, the Trustees also focused on the competitiveness of each fund’s total expense ratio. In order to support the effort to have fund expenses meet competitive standards, the Trustees and Putnam Management have implemented certain expense limitations that were in effect during your fund’s fiscal year ending in 2015. These expense limitations were: (i) a contractual expense limitation applicable to specified retail open-end funds, including your fund, of 32 basis points on investor servicing fees and expenses and (ii) a contractual expense limitation applicable to specified open-end funds, including your fund, of 20 basis points on so-called “other expenses” (i.e., all expenses exclusive of management fees, distribution fees, investor servicing fees, investment-related expenses, interest, taxes, brokerage commissions, acquired fund fees and expenses and extraordinary expenses). These expense limitations attempt to maintain competitive expense levels for the funds. Most funds, including your fund, had sufficiently low expenses that these expense limitations were not operative during their fiscal years ending in 2015. Putnam Management has agreed to maintain these expense limitations until at least February 28, 2018 and to reduce the contractual expense limitation on investor servicing fees and expenses from 32 basis points to 25 basis points effective September 1, 2016. In addition, Putnam Management contractually agreed to waive fees and/or reimburse expenses of your fund to the extent that expenses of the fund (excluding payments under the fund’s distribution plans, investor servicing fees, any applicable performance-based upward or downward adjustments to the fund’s base management fee, brokerage, interest, taxes, investment-related expenses, extraordinary expenses, and acquired fund fees and expenses) would exceed an annual rate of 0.97% of its average net assets through at least February 28, 2018. During its fiscal year ending in 2015, your fund’s expenses were sufficiently low that this limitation was not operative. Putnam Management’s support for these

20   Absolute Return 700 Fund 

expense limitation arrangements was an important factor in the Trustees’ decision to approve the continuance of your fund’s management, sub-management and sub-advisory contracts.

The Trustees reviewed comparative fee and expense information for a custom group of competitive funds selected by Broadridge Financial Solutions, Inc. (“Broadridge”). This comparative information included your fund’s percentile ranking for effective management fees and total expenses (excluding any applicable 12b-1 fee), which provides a general indication of your fund’s relative standing. In the custom peer group, your fund ranked in the second quintile in effective management fees (determined for your fund and the other funds in the custom peer group based on fund asset size and the applicable contractual management fee schedule) and in the second quintile in total expenses (excluding any applicable 12b-1 fees) as of December 31, 2015. The first quintile represents the least expensive funds and the fifth quintile the most expensive funds. The fee and expense data reported by Broadridge as of December 31, 2015 reflected the most recent fiscal year-end data available in Broadridge’s database at that time.

In connection with their review of fund management fees and total expenses, the Trustees also reviewed the costs of the services provided and the profits realized by Putnam Management and its affiliates from their contractual relationships with the funds. This information included trends in revenues, expenses and profitability of Putnam Management and its affiliates relating to the investment management, investor servicing and distribution services provided to the funds. In this regard, the Trustees also reviewed an analysis of Putnam Management’s revenues, expenses and profitability, allocated on a fund-by-fund basis, with respect to the funds’ management, distribution, and investor servicing contracts. For each fund, the analysis presented information about revenues, expenses and profitability for each of the agreements separately and for the agreements taken together on a combined basis. The Trustees concluded that, at current asset levels, the fee schedules in place represented reasonable compensation for the services being provided and represented an appropriate sharing between fund shareholders and Putnam Management of such economies of scale as may exist in the management of the Putnam funds at that time.

The information examined by the Trustees as part of their annual contract review for the Putnam funds included information regarding fees charged by Putnam Management and its affiliates to institutional clients such as defined benefit pension plans, college endowments, sub-advised third-party mutual funds, and the like. This information included comparisons of those fees with fees charged to the Putnam funds, as well as an assessment of the differences in the services provided to these different types of clients. The Trustees observed that the differences in fee rates between these clients and the Putnam funds are by no means uniform when examined by individual asset sectors, suggesting that differences in the pricing of investment management services to these types of clients may reflect, among other things, historical competitive forces operating in separate markets. The Trustees considered the fact that in many cases fee rates across different asset classes are higher on average for mutual funds than for institutional clients, as well as the differences between the services that Putnam Management provides to the Putnam funds and those that it provides to its other clients. The Trustees did not rely on these comparisons to any significant extent in concluding that the management fees paid by your fund are reasonable.

Investment performance

The quality of the investment process provided by Putnam Management represented a major factor in the Trustees’ evaluation of the quality of services provided by Putnam Management under your fund’s management contract. The Trustees were assisted in their review of the Putnam funds’ investment process and performance by the work of the investment oversight committees of the Trustees, which meet on a regular basis with the funds’ portfolio teams and with the Chief Investment Officer and other senior members of Putnam Management’s Investment Division throughout the year. The Trustees concluded that Putnam Management generally provides a high-quality investment process — based on the experience and skills of the individuals assigned to the management of fund portfolios, the resources made available to them, and in general Putnam Management’s ability to attract and retain high-­quality personnel — but also recognized that this does not guarantee favorable investment results for every fund in every time period.

Absolute Return 700 Fund   21 

The Trustees considered that 2015 was a year of mixed performance results for the Putnam funds, with generally strong results for the international equity, global sector and global asset allocation funds, but generally disappointing results for the U.S. and small-cap equity, Spectrum and fixed income funds. They noted that the longer-term performance of the Putnam funds generally continued to be strong, exemplified by the fact that the Putnam funds were ranked by the Barron’s/Lipper Fund Families survey as the 18th-best performing mutual fund complex out of 58 complexes for the five-year period ended December 31, 2015. They also noted, however, the disappointing investment performance of some funds for periods ended December 31, 2015 and considered information provided by Putnam Management regarding the factors contributing to the underperformance and actions being taken to improve the performance of these particular funds. The Trustees indicated their intention to continue to monitor performance trends to assess the effectiveness of these efforts and to evaluate whether additional actions to address areas of underperformance are warranted.

For purposes of evaluating investment performance, the Trustees generally focus on a competitive industry ranking of each fund’s total net return over a one-year, three-year and five-­year period. For a number of Putnam funds with relatively unique investment mandates for which meaningful competitive performance rankings are not considered to be available, the Trustees evaluated performance based on their total gross and net returns and, in most cases, comparisons of those returns with the returns of selected investment benchmarks. In the case of your fund, the Trustees considered information about your fund’s total return, its performance relative to its benchmark and its targeted return over the one-year, three-year and five-year periods ended December 31, 2015. The fund seeks to achieve its targeted annual return over a reasonable period of time, generally at least three years or more, and the fund’s performance is not necessarily expected to match its targeted annual return over shorter periods. Your fund’s class A share cumulative total return performance at net asset value was negative and trailed the return of its benchmark over the one-year period and was positive and exceeded the return of its benchmark over the three-year and five-year periods ended December 31, 2015. Over the one-year, three-year and five-year periods, your fund’s class A share cumulative total return performance at net asset value trailed the fund’s targeted annual return, which is the return of its benchmark plus 700 basis points. (When considering performance information, shareholders should be mindful that past performance is not a guarantee of future results.) The Trustees also considered Putnam Management’s continued efforts to support fund performance through initiatives including structuring compensation for portfolio managers and research analysts to enhance accountability for fund performance, emphasizing accountability in the portfolio management process, and affirming its commitment to a fundamental-­driven approach to investing. The Trustees noted further that Putnam Management continued to strengthen its fundamental research capabilities by adding new investment personnel.

Brokerage and soft-dollar allocations; investor servicing

The Trustees considered various potential benefits that Putnam Management may receive in connection with the services it provides under the management contract with your fund. These include benefits related to brokerage allocation and the use of soft dollars, whereby a portion of the commissions paid by a fund for brokerage may be used to acquire research services that are expected to be useful to Putnam Management in managing the assets of the fund and of other clients. Subject to policies established by the Trustees, soft dollars generated by these means are used primarily to acquire brokerage and research services (including third-party research and market data) that enhance Putnam Management’s investment capabilities and supplement Putnam Management’s internal research efforts. However, the Trustees noted that a portion of available soft dollars continues to be used to pay fund expenses. The Trustees indicated their continued intent to monitor regulatory and industry developments in this area with the assistance of their Brokerage Committee and also indicated their continued intent to monitor the allocation of the Putnam funds’ brokerage in order to ensure that the principle of seeking best price and execution remains paramount in the portfolio trading process.

Putnam Management may also receive benefits from payments that the funds make to Putnam Management’s affiliates for investor or distribution services. In conjunction with the annual review of your fund’s management, sub-management and

22   Absolute Return 700 Fund 

sub-advisory contracts, the Trustees reviewed your fund’s investor servicing agreement with Putnam Investor Services, Inc. (“PSERV”) and its distributor’s contracts and distribution plans with Putnam Retail Management Limited Partnership (“PRM”), both of which are affiliates of Putnam Management. The Trustees concluded that the

fees payable by the funds to PSERV and PRM, as applicable, for such services are reasonable in relation to the nature and quality of such services, the fees paid by competitive funds, and the costs incurred by PSERV and PRM, as applicable, in providing such services.

Absolute Return 700 Fund   23 

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.

24   Absolute Return 700 Fund 

Report of Independent Registered Public Accounting Firm

To the Trustees of Putnam Funds Trust and Shareholders of
Putnam Absolute Return 700 Fund:

In our opinion, the accompanying statement of assets and liabilities, including the portfolio, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Putnam Absolute Return 700 Fund (the “fund”) at October 31, 2016, and the results of its operations, the changes in its net assets and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements 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 are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of investments at October 31, 2016 by correspondence with the custodian, brokers, transfer agent, and the application of alternative auditing procedures where securities purchased had not been received, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Boston, Massachusetts
December 13, 2016

Absolute Return 700 Fund   25 

The fund’s portfolio 10/31/16

U.S. GOVERNMENT AND AGENCY	Principal
MORTGAGE OBLIGATIONS (37.3%)*	amount	Value
U.S. Government Guaranteed Mortgage Obligations (0.1%)
Government National Mortgage Association Pass-Through Certificates
4.50%, TBA, 11/1/46	$1,000,000	$1,079,219
		1,079,219
U.S. Government Agency Mortgage Obligations (37.2%)
Federal Home Loan Mortgage Corporation Pass-Through Certificates
3.50%, TBA, 11/1/46	1,000,000	1,049,375
Federal National Mortgage Association Pass-Through Certificates
5.50%, 1/1/38	1,444,400	1,638,738
5.50%, TBA, 11/1/46	1,000,000	1,126,574
4.50%, 11/1/44	1,380,397	1,538,766
4.00%, TBA, 11/1/46	1,000,000	1,070,781
3.50%, with due dates from 6/1/42 to 1/1/46	3,469,582	3,678,241
3.50%, TBA, 12/1/46	34,000,000	35,659,186
3.50%, TBA, 11/1/46	36,000,000	37,794,755
3.50%, 6/1/43 i	117,267	126,447
3.00%, with due dates from 2/1/43 to 2/1/43	1,451,368	1,498,537
3.00%, TBA, 12/1/46	129,000,000	132,552,544
3.00%, TBA, 11/1/46	135,000,000	138,986,712
2.50%, TBA, 12/1/46	26,000,000	25,906,821
2.50%, TBA, 11/1/46	72,000,000	71,865,720
		454,493,197
Total U.S. government and agency mortgage obligations (cost $458,093,715)		$455,572,416
COMMON STOCKS (36.2%)*	Shares	Value
Basic materials (2.2%)
Anhui Conch Cement Co., Ltd. (China)	612,000	$1,696,305
Ashland Global Holdings, Inc.	4,200	469,266
Bemis Co., Inc.	11,800	574,896
Braskem SA Class A (Preference) (Brazil)	383,900	3,400,017
China Lesso Group Holdings, Ltd. (China)	2,194,000	1,606,443
China Railway Construction Corp., Ltd. (China)	2,670,000	3,340,153
Hyosung Corp. (South Korea)	24,428	2,851,903
IRPC PCL (Thailand)	7,946,100	1,085,288
Lee & Man Paper Manufacturing, Ltd. (China)	465,000	348,813
Lotte Chemical Corp. (South Korea)	1,679	422,339
PTT Global Chemical PCL (Thailand)	1,729,800	2,965,583
Reliance Steel & Aluminum Co.	7,700	529,606
Sherwin-Williams Co. (The)	5,900	1,444,674
Siam Cement PCL (The) (Thailand)	209,650	3,016,066
Sinopec Shanghai Petrochemical Co., Ltd. (China)	4,700,000	2,395,085
Sonoco Products Co.	9,900	497,871
		26,644,308
Capital goods (2.2%)
Allison Transmission Holdings, Inc.	35,000	1,025,150
Avery Dennison Corp.	22,900	1,598,191
Berry Plastics Group, Inc. †	11,700	511,875
BWX Technologies, Inc.	13,400	525,548
Carlisle Cos., Inc.	3,900	408,915

26   Absolute Return 700 Fund 

COMMON STOCKS (36.2%)* cont.	Shares	Value
Capital goods cont.
China Communications Construction Co., Ltd. (China)	1,118,000	$1,230,889
China Railway Group, Ltd. (China)	3,704,000	2,858,778
Crown Holdings, Inc. †	12,700	688,975
General Dynamics Corp.	15,300	2,306,322
Honeywell International, Inc.	35,500	3,893,640
Northrop Grumman Corp.	20,000	4,580,000
Raytheon Co.	32,300	4,412,503
Waste Management, Inc.	50,900	3,342,094
		27,382,880
Communication services (3.0%)
AT&T, Inc.	44,500	1,637,155
China Mobile, Ltd. (China)	77,000	882,016
Comcast Corp. Class A	28,100	1,737,142
DISH Network Corp. Class A †	279,373	16,360,083
Juniper Networks, Inc.	112,700	2,968,518
KT Corp. (South Korea)	2,695	76,009
LG Uplus Corp. (South Korea)	85,621	882,157
Telekomunikasi Indonesia Persero Tbk PT (Indonesia)	11,772,400	3,800,431
Telkom SA SOC, Ltd. (South Africa)	437,959	2,020,612
Verizon Communications, Inc.	117,717	5,662,188
		36,026,311
Consumer cyclicals (3.9%)
Alfa SAB de CV (Mexico)	445,483	675,967
Aramark	9,000	335,070
Automatic Data Processing, Inc.	46,800	4,074,408
AutoZone, Inc. †	4,300	3,191,288
Carter’s, Inc.	5,200	448,968
CBS Corp. Class B (non-voting shares)	30,300	1,715,586
China Dongxiang Group Co., Ltd. (China)	2,738,000	532,429
Clorox Co. (The)	2,300	276,046
Dollar General Corp.	44,100	3,046,869
Hankook Tire Co., Ltd. (South Korea)	7,015	338,329
Hasbro, Inc.	21,400	1,784,974
Home Depot, Inc. (The)	4,800	585,648
Hyatt Hotels Corp. Class A †	9,500	482,505
Imperial Holdings, Ltd. (South Africa)	176,704	2,232,037
Interpublic Group of Cos., Inc. (The)	54,500	1,220,255
Itausa — Investimentos Itau SA (Brazil)	740,100	2,188,767
John Wiley & Sons, Inc. Class A	5,300	273,480
Kia Motors Corp. (South Korea)	73,296	2,602,290
Kimberly-Clark Corp.	3,600	411,876
Kimberly-Clark de Mexico SAB de CV Class A (Mexico)	1,399,009	3,014,742
Lowe’s Cos., Inc.	50,000	3,332,500
Madison Square Garden Co. (The) Class A †	1,300	215,137
News Corp. Class B	14,200	176,080
Omnicom Group, Inc.	1,772	141,441
PVH Corp.	4,300	460,014
Qualicorp SA (Brazil)	278,100	1,789,528
Scotts Miracle-Gro Co. (The) Class A	5,100	449,259

Absolute Return 700 Fund   27 

COMMON STOCKS (36.2%)* cont.	Shares	Value
Consumer cyclicals cont.
ServiceMaster Global Holdings, Inc. †	23,000	$823,170
Smiles SA (Brazil)	195,100	3,560,942
TJX Cos., Inc. (The)	29,600	2,183,000
Twenty-First Century Fox, Inc.	91,900	2,414,213
Vail Resorts, Inc.	1,200	191,328
Vantiv, Inc. Class A †	42,300	2,468,628
World Fuel Services Corp.	8,500	342,125
		47,978,899
Consumer staples (3.4%)
Altria Group, Inc.	82,331	5,443,726
Church & Dwight Co., Inc.	13,500	651,510
Colgate-Palmolive Co.	46,400	3,311,104
Constellation Brands, Inc. Class A	2,000	334,240
Coty, Inc. Class A †	10,422	239,602
CVS Health Corp.	40,500	3,406,050
General Mills, Inc.	45,500	2,820,090
Gruma SAB de CV Class B (Mexico)	194,488	2,703,549
Grupo Lala SAB de CV (Mexico)	1,014,429	1,886,523
Hershey Co. (The)	30,300	3,104,538
JBS SA (Brazil)	338,651	1,030,170
KT&G Corp. (South Korea)	31,607	3,115,432
LG Household & Health Care, Ltd. (South Korea)	3,540	2,536,513
McDonald’s Corp.	39,168	4,409,142
New Oriental Education & Technology Group, Inc. ADR (China) †	15,940	799,072
PepsiCo, Inc.	3,200	343,040
Philip Morris International, Inc.	1,500	144,660
Pool Corp.	4,000	370,320
Procter & Gamble Co. (The)	15,153	1,315,280
Sao Martinho SA (Brazil)	44,401	884,264
Sysco Corp.	56,000	2,694,720
US Foods Holding Corp. †	5,600	126,560
		41,670,105
Energy (1.9%)
Bangchak Petroleum PCL (The) (Thailand)	814,600	704,097
Dril-Quip, Inc. †	3,800	180,500
Exxon Mobil Corp.	94,731	7,892,987
FMC Technologies, Inc. †	33,000	1,064,910
Formosa Petrochemical Corp. (Taiwan)	413,000	1,380,058
Halcon Resources Corp. † S	32,166	287,886
Phillips 66	14,100	1,144,215
SandRidge Energy, Inc. † S	15,523	357,495
Schlumberger, Ltd.	63,400	4,959,782
SK Innovation Co., Ltd. (South Korea)	16,248	2,130,109
Thai Oil PCL (Thailand)	1,201,400	2,402,972
Vantage Drilling International (Units) (Cayman Islands) †	1,527	128,268
		22,633,279
Financials (7.6%)
Aflac, Inc.	19,000	1,308,530
AGNC Investment Corp. R	129,100	2,589,746

28   Absolute Return 700 Fund 

COMMON STOCKS (36.2%)* cont.	Shares	Value
Financials cont.
Agricultural Bank of China, Ltd. (China)	8,542,000	$3,601,017
Alleghany Corp. †	500	258,105
Allstate Corp. (The)	7,000	475,300
Ally Financial, Inc.	39,300	710,151
American Financial Group, Inc.	4,400	327,800
Annaly Capital Management, Inc. R	118,100	1,223,516
Aspen Insurance Holdings, Ltd.	10,100	487,325
Associated Banc-Corp.	8,700	176,610
Assured Guaranty, Ltd.	10,100	301,889
Banco Bradesco SA ADR (Brazil)	277,834	2,892,252
Bank Negara Indonesia Persero Tbk PT (Indonesia)	4,967,700	2,117,989
Bank of Communications Co., Ltd. (China)	4,208,000	3,206,101
Bank of New York Mellon Corp. (The)	34,200	1,479,834
Berkshire Hathaway, Inc. Class B †	16,300	2,352,090
Brandywine Realty Trust R	16,400	254,200
Broadridge Financial Solutions, Inc.	13,500	872,910
Capital One Financial Corp.	22,600	1,673,304
Chimera Investment Corp. R	52,500	822,675
China Cinda Asset Management Co., Ltd. (China)	6,485,000	2,332,553
China Construction Bank Corp. (China)	4,196,000	3,064,659
China Life Insurance Co., Ltd. (Taiwan)	290,000	267,354
Chongqing Rural Commercial Bank Co., Ltd. (China)	2,473,000	1,482,522
CoreLogic, Inc. †	11,400	485,184
Corporate Office Properties Trust R	9,400	250,886
Discover Financial Services	32,000	1,802,560
Equity Commonwealth † R	13,900	419,919
Equity Lifestyle Properties, Inc. R	4,400	333,696
Equity One, Inc. R	9,300	265,050
Equity Residential Trust R	21,000	1,296,750
Everest Re Group, Ltd.	4,386	892,639
Guangzhou R&F Properties Co., Ltd. (China)	2,034,800	2,871,131
Hanover Insurance Group, Inc. (The)	2,500	190,475
Highwealth Construction Corp. (Taiwan)	845,000	1,251,459
Highwoods Properties, Inc. R	8,500	421,855
Hyundai Marine & Fire Insurance Co., Ltd. (South Korea)	30,497	940,256
Industrial & Commercial Bank of China, Ltd. (China)	5,973,000	3,586,999
Industrial Bank of Korea (South Korea)	141,509	1,631,785
Intercontinental Exchange, Inc.	5,700	1,541,223
KB Financial Group, Inc. (South Korea)	6,074	224,952
Liberty Holdings, Ltd. (South Africa)	234,727	2,018,474
Liberty Property Trust R	10,100	408,343
Macerich Co. (The) R	7,900	559,162
Macquarie Mexico Real Estate Management SA de CV (Mexico) R	637,850	802,501
Marsh & McLennan Cos., Inc.	29,600	1,876,344
MFA Financial, Inc. R	68,500	500,735
Moscow Exchange MICEX-RTS OAO (Russia) †	1,607,316	2,964,002
MRV Engenharia e Participacoes SA (Brazil)	734,300	2,843,342
Old Mutual PLC (South Africa)	759,075	1,872,153
People’s Insurance Co. Group of China, Ltd. (China)	6,984,000	2,782,161

Absolute Return 700 Fund   29 

COMMON STOCKS (36.2%)* cont.	Shares	Value
Financials cont.
PNC Financial Services Group, Inc. (The)	39,800	$3,804,880
Popular, Inc. (Puerto Rico)	16,800	609,840
Post Properties, Inc. R	4,300	282,897
Public Storage R	1,200	256,464
Regency Centers Corp. R	8,300	598,181
Reinsurance Group of America, Inc.	5,800	625,588
Retail Properties of America, Inc. Class A R	14,100	219,537
Sberbank of Russia PJSC ADR (Russia)	445,010	4,223,145
Shinhan Financial Group Co., Ltd. (South Korea)	26,836	1,032,712
SunTrust Banks, Inc.	29,900	1,352,377
TCF Financial Corp.	27,900	398,970
Travelers Cos., Inc. (The)	16,100	1,741,698
Two Harbors Investment Corp. R	68,300	568,939
U.S. Bancorp	38,000	1,700,880
Voya Financial, Inc.	44,000	1,344,200
Weingarten Realty Investors R	7,000	253,470
Wells Fargo & Co.	91,780	4,222,798
Western Alliance Bancorp †	9,500	354,920
		92,903,964
Health care (3.1%)
AmerisourceBergen Corp.	14,400	1,012,608
C.R. Bard, Inc.	5,000	1,083,400
Charles River Laboratories International, Inc. †	4,000	303,520
DaVita Inc. †	26,200	1,535,844
Intuitive Surgical, Inc. †	3,500	2,352,280
Johnson & Johnson	65,585	7,607,204
McKesson Corp.	21,200	2,696,004
Merck & Co., Inc.	39,327	2,309,281
Pfizer, Inc.	181,900	5,768,049
Richter Gedeon Nyrt (Hungary)	144,823	3,112,751
St Shine Optical Co., Ltd. (Taiwan)	17,000	357,139
Thermo Fisher Scientific, Inc.	29,600	4,352,088
UnitedHealth Group, Inc.	34,000	4,805,220
VWR Corp. †	7,900	217,329
Waters Corp. †	2,000	278,280
		37,790,997
Technology (6.4%)
Agilent Technologies, Inc.	19,500	849,615
Alibaba Group Holding, Ltd. ADR (China) † S	12,737	1,295,226
Alphabet, Inc. Class A †	8,900	7,208,110
Amdocs, Ltd.	18,000	1,052,100
Apple, Inc.	28,505	3,236,458
Applied Materials, Inc.	116,900	3,399,452
AU Optronics Corp. (Taiwan)	678,000	257,667
Cisco Systems, Inc.	189,800	5,823,064
CommerceHub, Inc. Ser. C †	16,500	248,325
eBay, Inc. †	138,400	3,945,784
Fiserv, Inc. †	24,100	2,373,368
Fitbit, Inc. Class A † S	73,500	974,610

30   Absolute Return 700 Fund 

COMMON STOCKS (36.2%)* cont.	Shares	Value
Technology cont.
Foxconn Technology Co., Ltd. (Taiwan)	1,143,320	$3,316,620
Genpact, Ltd. †	17,300	397,727
Hon Hai Precision Industry Co., Ltd. (Taiwan)	2,039,400	5,502,917
Intuit, Inc.	13,400	1,457,116
L-3 Communications Holdings, Inc.	5,000	684,700
Microsoft Corp.	25,223	1,511,362
Motorola Solutions, Inc.	11,000	798,380
MSCI, Inc.	4,200	336,798
NetEase, Inc. ADR (China)	18,826	4,838,094
Paychex, Inc.	63,100	3,483,120
Samsung Electronics Co., Ltd. (South Korea)	7,992	11,397,006
Synopsys, Inc. †	18,000	1,067,580
Taiwan Semiconductor Manufacturing Co., Ltd. ADR (Taiwan)	158,009	4,914,080
Tencent Holdings, Ltd. (China)	157,300	4,165,263
Texas Instruments, Inc.	43,400	3,074,890
Tripod Technology Corp. (Taiwan)	337,000	796,055
		78,405,487
Transportation (0.9%)
AirAsia Bhd (Malaysia)	255,500	168,683
China Southern Airlines Co., Ltd. (China)	3,644,000	2,050,004
Controladora Vuela Cia de Aviacion SAB de CV Class A (Mexico) †	202,370	386,731
Eva Airways Corp. (Taiwan)	1,332,000	641,380
MISC Bhd (Malaysia)	902,200	1,617,099
Southwest Airlines Co.	24,000	961,200
United Parcel Service, Inc. Class B	44,299	4,773,660
		10,598,757
Utilities and power (1.6%)
American Electric Power Co., Inc.	26,700	1,731,228
American Water Works Co., Inc.	11,100	821,844
Equatorial Energia SA (Brazil)	190,900	3,405,340
Eversource Energy	11,500	633,190
Great Plains Energy, Inc.	19,700	560,268
Korea Electric Power Corp. (South Korea)	74,282	3,204,355
NiSource, Inc.	29,300	681,518
PG&E Corp.	41,700	2,590,404
Southern Co. (The)	43,600	2,248,452
Tenaga Nasional Bhd (Malaysia)	1,031,000	3,522,615
Westar Energy, Inc.	10,200	584,664
		19,983,878
Total common stocks (cost $400,740,454)		$442,018,865
	Principal
MORTGAGE-BACKED SECURITIES (11.9%)*	amount	Value
Agency collateralized mortgage obligations (7.2%)
Federal Home Loan Mortgage Corporation
IFB Ser. 2990, Class LB, 15.579%, 6/15/34	$266,608	$339,902
IFB Ser. 3232, Class KS, IO, 5.765%, 10/15/36	430,327	71,004
IFB Ser. 4104, Class S, IO, 5.565%, 9/15/42	680,443	151,499
IFB Ser. 3116, Class AS, IO, 5.565%, 11/15/34	57,131	964
IFB Ser. 4096, Class SM, IO, 5.515%, 8/15/42	5,073,400	943,072

Absolute Return 700 Fund   31 

	Principal
MORTGAGE-BACKED SECURITIES (11.9%)* cont.	amount	Value
Agency collateralized mortgage obligations cont.
Federal Home Loan Mortgage Corporation
IFB Ser. 3852, Class NT, 5.465%, 5/15/41	$1,558,129	$1,614,962
Ser. 3687, Class CI, IO, 5.00%, 11/15/38	1,082,659	115,578
Ser. 4322, Class ID, IO, 4.50%, 5/15/43	5,189,305	679,482
Ser. 4122, Class TI, IO, 4.50%, 10/15/42	1,198,317	202,156
Ser. 4026, Class GI, IO, 4.50%, 9/15/41	4,986,692	804,357
Ser. 4568, Class MI, IO, 4.00%, 4/15/46	10,825,454	1,299,055
Ser. 4462, IO, 4.00%, 4/15/45	2,141,580	354,196
Ser. 4452, Class QI, IO, 4.00%, 11/15/44	4,957,866	818,048
Ser. 4355, Class DI, IO, 4.00%, 3/15/44	4,244,055	364,989
Ser. 4193, Class PI, IO, 4.00%, 3/15/43	3,064,605	449,951
Ser. 4121, Class MI, IO, 4.00%, 10/15/42	3,696,754	660,795
Ser. 4116, Class MI, IO, 4.00%, 10/1/42	3,017,197	506,289
Ser. 4213, Class GI, IO, 4.00%, 11/15/41	2,257,155	262,056
Ser. 3996, Class IK, IO, 4.00%, 3/15/39	3,669,047	329,975
Ser. 4604, Class QI, IO, 3.50%, 7/15/46	8,788,422	1,264,039
Ser. 4369, Class IA, IO, 3.50%, 7/15/44	1,559,971	214,496
Ser. 303, Class C18, IO, 3.50%, 1/15/43	4,261,345	706,851
Ser. 4121, Class AI, IO, 3.50%, 10/15/42	5,788,516	1,054,058
Ser. 4122, Class CI, IO, 3.50%, 10/15/42	4,771,341	595,110
Ser. 4136, Class IW, IO, 3.50%, 10/15/42	3,135,432	406,120
Ser. 4097, Class PI, IO, 3.50%, 11/15/40	3,623,791	344,517
Ser. 4150, Class DI, IO, 3.00%, 1/15/43	2,952,798	343,263
Ser. 4158, Class TI, IO, 3.00%, 12/15/42	5,416,451	558,382
Ser. 4134, Class PI, IO, 3.00%, 11/15/42	7,121,090	791,936
Ser. 4183, Class MI, IO, 3.00%, 2/15/42	2,119,215	210,438
Ser. 4206, Class IP, IO, 3.00%, 12/15/41	4,294,012	461,102
FRB Ser. 8, Class A9, IO, 0.455%, 11/15/28	149,348	2,054
FRB Ser. 59, Class 1AX, IO, 0.277%, 10/25/43	381,900	3,879
Ser. 48, Class A2, IO, 0.212%, 7/25/33	569,410	4,248
Federal National Mortgage Association
IFB Ser. 05-74, Class NK, 24.83%, 5/25/35	51,546	80,590
IFB Ser. 05-122, Class SE, 21.231%, 11/25/35	128,282	185,994
IFB Ser. 11-4, Class CS, 11.832%, 5/25/40	709,212	843,819
Ser. 16-3, Class NI, IO, 6.00%, 2/25/46	4,048,445	972,394
IFB Ser. 12-68, Class BS, IO, 5.466%, 7/25/42	5,964,764	1,052,220
IFB Ser. 13-101, Class SE, IO, 5.366%, 10/25/43	3,679,998	889,654
Ser. 397, Class 2, IO, 5.00%, 9/25/39	35,254	5,865
Ser. 421, Class C6, IO, 4.00%, 5/25/45	3,570,171	550,431
Ser. 14-47, Class IP, IO, 4.00%, 3/25/44	5,972,956	723,480
Ser. 12-124, Class UI, IO, 4.00%, 11/25/42	4,044,712	687,197
Ser. 12-96, Class PI, IO, 4.00%, 7/25/41	931,646	109,023
Ser. 12-22, Class CI, IO, 4.00%, 3/25/41	3,566,097	383,355
Ser. 409, Class C16, IO, 4.00%, 11/25/40	439,522	61,885
Ser. 15-10, Class AI, IO, 3.50%, 8/25/43	1,824,150	162,944
Ser. 12-118, Class IC, IO, 3.50%, 11/25/42	5,915,881	1,053,511
Ser. 12-136, Class PI, IO, 3.50%, 11/25/42	2,498,155	244,395
Ser. 14-10, IO, 3.50%, 8/25/42	2,573,858	288,876
Ser. 12-101, Class PI, IO, 3.50%, 8/25/40	2,321,139	189,871

32   Absolute Return 700 Fund 

	Principal
MORTGAGE-BACKED SECURITIES (11.9%)* cont.	amount	Value
Agency collateralized mortgage obligations cont.
Federal National Mortgage Association
Ser. 14-76, IO, 3.50%, 11/25/39	$6,588,154	$650,711
Ser. 13-21, Class AI, IO, 3.50%, 3/25/33	3,301,762	484,513
Ser. 12-151, Class PI, IO, 3.00%, 1/25/43	2,522,739	274,726
Ser. 13-1, Class MI, IO, 3.00%, 1/25/43	4,547,187	405,746
Ser. 13-8, Class NI, IO, 3.00%, 12/25/42	4,450,596	460,639
Ser. 6, Class BI, IO, 3.00%, 12/25/42	4,751,080	368,684
Ser. 13-35, Class IP, IO, 3.00%, 6/25/42	2,455,017	214,814
Ser. 13-23, Class PI, IO, 3.00%, 10/25/41	3,133,379	217,739
Ser. 13-31, Class NI, IO, 3.00%, 6/25/41	4,563,406	366,791
Ser. 98-W2, Class X, IO, 0.783%, 6/25/28	951,312	46,376
FRB Ser. 03-W10, Class 1, IO, 0.621%, 6/25/43	196,659	2,489
Ser. 98-W5, Class X, IO, 0.444%, 7/25/28	290,794	14,176
Ser. 08-36, Class OV, PO, zero %, 1/25/36	17,480	15,613
Government National Mortgage Association
IFB Ser. 11-81, Class SB, IO, 6.17%, 11/16/36	1,160,075	111,843
Ser. 09-79, Class IC, IO, 6.00%, 8/20/39	3,916,415	729,119
IFB Ser. 13-129, Class SN, IO, 5.624%, 9/20/43	776,212	130,256
IFB Ser. 16-77, Class SC, IO, 5.574%, 10/20/45	2,277,334	495,320
IFB Ser. 13-99, Class VS, IO, 5.565%, 7/16/43	947,503	165,927
Ser. 14-182, Class KI, IO, 5.00%, 10/20/44	4,574,279	791,213
Ser. 14-133, Class IP, IO, 5.00%, 9/16/44	3,579,344	652,264
Ser. 14-122, Class IC, IO, 5.00%, 8/20/44	3,284,211	543,767
Ser. 14-76, IO, 5.00%, 5/20/44	2,594,809	494,113
Ser. 14-163, Class NI, IO, 5.00%, 2/20/44	2,873,659	505,892
Ser. 14-2, Class IC, IO, 5.00%, 1/16/44	5,037,623	1,025,023
Ser. 13-3, Class IT, IO, 5.00%, 1/20/43	879,174	159,957
Ser. 11-116, Class IB, IO, 5.00%, 10/20/40	314,835	12,714
Ser. 10-35, Class UI, IO, 5.00%, 3/20/40	756,268	139,644
Ser. 10-20, Class UI, IO, 5.00%, 2/20/40	1,308,409	229,665
Ser. 10-9, Class UI, IO, 5.00%, 1/20/40	3,651,059	664,325
Ser. 09-121, Class UI, IO, 5.00%, 12/20/39	3,253,245	603,510
Ser. 16-49, IO, 4.50%, 11/16/45	4,832,869	930,544
Ser. 15-80, Class IA, IO, 4.50%, 6/20/45	4,869,839	836,888
Ser. 14-108, Class IP, IO, 4.50%, 12/20/42	1,059,855	149,164
Ser. 11-18, Class PI, IO, 4.50%, 8/20/40	133,253	15,059
Ser. 10-35, Class AI, IO, 4.50%, 3/20/40	1,854,950	294,010
Ser. 10-35, Class QI, IO, 4.50%, 3/20/40	885,304	147,587
Ser. 13-151, Class IB, IO, 4.50%, 2/20/40	1,643,061	264,263
Ser. 10-9, Class QI, IO, 4.50%, 1/20/40	1,164,066	193,685
Ser. 09-121, Class BI, IO, 4.50%, 12/16/39	725,294	154,524
Ser. 09-121, Class CI, IO, 4.50%, 12/16/39	3,159,346	625,880
Ser. 13-34, Class PI, IO, 4.50%, 8/20/39	3,697,623	431,882
Ser. 10-103, Class DI, IO, 4.50%, 12/20/38	1,482,731	61,613
Ser. 15-186, Class AI, IO, 4.00%, 12/20/45	7,743,363	1,141,836
Ser. 15-99, Class LI, IO, 4.00%, 7/20/45	2,441,553	260,803
Ser. 15-79, Class CI, IO, 4.00%, 5/20/45	5,478,675	883,269
Ser. 15-53, Class MI, IO, 4.00%, 4/16/45	4,371,637	926,092
Ser. 15-187, Class JI, IO, 4.00%, 3/20/45	6,277,791	821,976

Absolute Return 700 Fund   33 

	Principal
MORTGAGE-BACKED SECURITIES (11.9%)* cont.	amount	Value
Agency collateralized mortgage obligations cont.
Government National Mortgage Association
Ser. 15-40, IO, 4.00%, 3/20/45	$1,219,827	$244,167
Ser. 14-63, Class PI, IO, 4.00%, 7/20/43	1,705,473	209,091
Ser. 13-24, Class PI, IO, 4.00%, 11/20/42	1,375,754	200,995
Ser. 12-106, Class QI, IO, 4.00%, 7/20/42	871,050	133,226
Ser. 12-38, Class MI, IO, 4.00%, 3/20/42 F	4,971,229	861,792
Ser. 12-47, Class CI, IO, 4.00%, 3/20/42	1,476,452	234,363
Ser. 14-104, IO, 4.00%, 3/20/42	4,545,512	729,918
Ser. 12-50, Class PI, IO, 4.00%, 12/20/41	2,126,630	299,855
Ser. 14-162, Class DI, IO, 4.00%, 11/20/38	2,465,429	192,079
Ser. 14-133, Class AI, IO, 4.00%, 10/20/36	5,141,540	457,057
Ser. 13-53, Class IA, IO, 4.00%, 12/20/26	2,423,898	266,629
Ser. 16-111, Class IP, IO, 3.50%, 8/20/46	9,221,329	829,920
Ser. 15-64, Class PI, IO, 3.50%, 5/20/45	4,178,269	423,384
Ser. 15-20, Class PI, IO, 3.50%, 2/20/45	4,010,072	586,076
Ser. 15-24, Class CI, IO, 3.50%, 2/20/45	1,633,610	313,361
Ser. 15-24, Class IA, IO, 3.50%, 2/20/45	1,874,061	278,810
Ser. 13-102, Class IP, IO, 3.50%, 6/20/43	1,788,847	121,445
Ser. 13-76, IO, 3.50%, 5/20/43	4,375,912	511,938
Ser. 13-79, Class PI, IO, 3.50%, 4/20/43	4,019,506	475,106
Ser. 13-100, Class MI, IO, 3.50%, 2/20/43	2,778,569	254,517
Ser. 13-37, Class JI, IO, 3.50%, 1/20/43	1,923,340	222,684
Ser. 12-145, IO, 3.50%, 12/20/42	1,446,145	216,524
Ser. 13-27, Class PI, IO, 3.50%, 12/20/42	1,032,574	119,025
Ser. 12-136, Class BI, IO, 3.50%, 11/20/42	5,475,597	962,610
Ser. 13-37, Class LI, IO, 3.50%, 1/20/42	1,472,990	146,471
Ser. 12-141, Class WI, IO, 3.50%, 11/20/41	2,602,426	204,134
Ser. 15-36, Class GI, IO, 3.50%, 6/16/41	2,240,994	243,170
Ser. 12-71, Class JI, IO, 3.50%, 4/16/41	1,852,888	122,120
Ser. 13-157, Class IA, IO, 3.50%, 4/20/40	4,426,693	473,368
Ser. 13-90, Class HI, IO, 3.50%, 4/20/40	4,848,647	219,498
Ser. 13-79, Class XI, IO, 3.50%, 11/20/39	5,494,320	618,111
Ser. 183, Class AI, IO, 3.50%, 10/20/39	2,686,973	273,770
Ser. 15-118, Class EI, IO, 3.50%, 7/20/39	4,031,376	372,745
Ser. 15-124, Class NI, IO, 3.50%, 6/20/39	4,624,412	466,649
Ser. 15-96, Class NI, IO, 3.50%, 1/20/39	7,930,073	725,602
Ser. 15-82, Class GI, IO, 3.50%, 12/20/38	9,877,010	817,224
Ser. 15-124, Class DI, IO, 3.50%, 1/20/38	5,132,957	655,597
Ser. 15-24, Class AI, IO, 3.50%, 12/20/37	5,258,348	669,335
Ser. 15-24, Class IC, IO, 3.50%, 11/20/37	2,510,562	305,199
Ser. 14-145, Class PI, IO, 3.50%, 10/20/29	1,502,444	169,265
Ser. 14-115, Class QI, IO, 3.00%, 3/20/29	2,859,331	255,882
Ser. 16-H23, Class NI, IO, 2.83%, 10/20/66	8,870,000	1,318,082
Ser. 15-H22, Class GI, IO, 2.578%, 9/20/65	5,720,361	792,842
FRB Ser. 15-H16, Class XI, IO, 2.468%, 7/20/65	8,824,254	1,117,151
Ser. 15-H20, Class CI, IO, 2.442%, 8/20/65	9,823,499	1,251,082
Ser. 15-H25, Class BI, IO, 2.378%, 10/20/65	10,244,889	1,242,705
Ser. 16-H04, Class HI, IO, 2.363%, 7/20/65	3,550,521	410,085
Ser. 15-H26, Class DI, IO, 2.142%, 10/20/65	7,651,046	938,783

34   Absolute Return 700 Fund 

	Principal
MORTGAGE-BACKED SECURITIES (11.9%)* cont.	amount	Value
Agency collateralized mortgage obligations cont.
Government National Mortgage Association
Ser. 16-H11, Class HI, IO, 2.081%, 1/20/66	$3,191,750	$360,144
Ser. 15-H09, Class AI, IO, 2.049%, 4/20/65	7,958,007	859,465
Ser. 15-H24, Class HI, IO, 2.03%, 9/20/65	15,854,835	1,377,785
Ser. 16-H03, Class AI, IO, 2.001%, 1/20/66	6,831,376	835,539
Ser. 16-H02, Class BI, IO, 1.964%, 11/20/65	8,291,542	969,306
Ser. 14-H21, Class AI, IO, 1.963%, 10/20/64	7,521,852	803,334
Ser. 15-H15, Class JI, IO, 1.94%, 6/20/65	7,336,866	829,800
Ser. 15-H19, Class NI, IO, 1.913%, 7/20/65	12,694,822	1,396,430
Ser. 16-H04, Class KI, IO, 1.873%, 2/20/66	6,662,546	691,059
Ser. 15-H25, Class EI, IO, 1.849%, 10/20/65	9,067,064	932,094
Ser. 15-H18, Class IA, IO, 1.83%, 6/20/65	6,406,718	560,588
Ser. 15-H10, Class CI, IO, 1.809%, 4/20/65	13,022,231	1,340,287
Ser. 15-H26, Class GI, IO, 1.794%, 10/20/65	7,348,136	771,554
Ser. 16-H07, Class HI, IO, 1.752%, 2/20/66	8,642,285	949,390
Ser. 15-H26, Class EI, IO, 1.723%, 10/20/65	9,587,141	975,012
Ser. 15-H09, Class BI, IO, 1.701%, 3/20/65	11,177,520	1,043,980
Ser. 15-H10, Class EI, IO, 1.637%, 4/20/65	11,690,533	828,859
Ser. 15-H24, Class BI, IO, 1.616%, 8/20/65	13,294,640	872,128
Ser. 15-H25, Class AI, IO, 1.615%, 9/20/65	10,438,612	941,563
Ser. 15-H14, Class BI, IO, 1.593%, 5/20/65	14,743,480	1,008,454
Ser. 16-H08, Class GI, IO, 1.432%, 4/20/66	11,293,177	781,488
Ser. 15-H26, Class CI, IO, 0.576%, 8/20/65	29,085,788	721,328
GSMPS Mortgage Loan Trust 144A
FRB Ser. 98-4, IO, 1.147%, 12/19/26	50,691	—
FRB Ser. 98-2, IO, 1.004%, 5/19/27	31,411	—
FRB Ser. 99-2, IO, 0.84%, 9/19/27	74,802	655
FRB Ser. 98-3, IO, zero %, 9/19/27	34,852	—
		87,334,655
Commercial mortgage-backed securities (2.5%)
Banc of America Commercial Mortgage Trust
Ser. 06-1, Class B, 5.49%, 9/10/45	255,000	254,337
FRB Ser. 07-1, Class XW, IO, 0.311%, 1/15/49	1,774,085	4,543
Banc of America Commercial Mortgage Trust 144A FRB Ser. 08-1,
Class C, 6.27%, 2/10/51	584,000	526,593
Banc of America Merrill Lynch Commercial Mortgage, Inc.
FRB Ser. 05-5, Class D, 5.403%, 10/10/45	170,106	170,047
FRB Ser. 05-1, Class C, 5.349%, 11/10/42	429,000	406,829
Ser. 05-6, Class G, 5.147s, 9/10/47 F	440,599	431,820
Ser. 05-3, Class AJ, 4.767%, 7/10/43	225,000	91,336
Banc of America Merrill Lynch Commercial Mortgage, Inc. 144A
FRB Ser. 04-4, Class XC, IO, 0.035%, 7/10/42	100,024	51
Bear Stearns Commercial Mortgage Securities Trust
FRB Ser. 06-PW11, Class AJ, 5.436%, 3/11/39	877,000	876,452
Ser. 05-PWR7, Class D, 5.304%, 2/11/41	431,000	418,070
Ser. 05-PWR7, Class C, 5.235%, 2/11/41	489,000	488,169
Ser. 05-PWR9, Class C, 5.055%, 9/11/42	281,000	281,871
Bear Stearns Commercial Mortgage Securities Trust 144A
FRB Ser. 06-PW11, Class B, 5.436%, 3/11/39	1,010,000	454,500
FRB Ser. 06-PW11, Class C, 5.436%, 3/11/39	384,000	96,000

Absolute Return 700 Fund   35 

	Principal
MORTGAGE-BACKED SECURITIES (11.9%)* cont.	amount	Value
Commercial mortgage-backed securities cont.
CD Mortgage Trust 144A FRB Ser. 07-CD5, Class E, 6.116%, 11/15/44	$262,000	$254,259
Citigroup Commercial Mortgage Trust 144A FRB Ser. 14-GC19,
Class D, 4.902%, 3/10/47	762,000	641,026
COMM Mortgage Trust FRB Ser. 07-C9, Class D, 5.813%, 12/10/49	350,000	313,338
COMM Mortgage Trust 144A
Ser. 12-LC4, Class E, 4.25%, 12/10/44	604,000	463,993
Ser. 13-LC13, Class E, 3.719%, 8/10/46	391,000	274,130
Credit Suisse First Boston Mortgage Securities Corp. 144A FRB
Ser. 03-C3, Class AX, IO, 1.994%, 5/15/38	184,099	2
GE Capital Commercial Mortgage Corp. Trust FRB Ser. 06-C1,
Class AJ, 5.309%, 3/10/44	1,056,395	1,039,493
GMAC Commercial Mortgage Securities, Inc. Trust Ser. 04-C3,
Class B, 4.965%, 12/10/41	39,654	39,777
GS Mortgage Securities Corp. II 144A
FRB Ser. 13-GC10, Class D, 4.41%, 2/10/46	336,000	308,078
FRB Ser. 13-GC10, Class E, 4.41%, 2/10/46	750,000	560,100
GS Mortgage Securities Trust 144A FRB Ser. 06-GG8, Class X, IO,
0.652%, 11/10/39	10,479,482	10,479
JPMBB Commercial Mortgage Securities Trust 144A
FRB Ser. 14-C18, Class D, 4.814%, 2/15/47	1,623,000	1,386,042
FRB Ser. 13-C14, Class E, 4.562%, 8/15/46	816,000	671,160
FRB Ser. 13-C12, Class E, 4.085%, 7/15/45	1,000,000	755,400
JPMorgan Chase Commercial Mortgage Securities Trust
FRB Ser. 07-CB20, Class AJ, 6.079%, 2/12/51	130,500	130,330
FRB Ser. 06-LDP7, Class B, 5.925%, 4/17/45	619,000	113,587
FRB Ser. 05-LDP2, Class E, 4.981%, 7/15/42	205,000	204,672
FRB Ser. 07-LDPX, Class X, IO, 0.261%, 1/15/49	5,960,928	24,307
JPMorgan Chase Commercial Mortgage Securities Trust 144A
FRB Ser. 07-CB20, Class C, 6.179%, 2/12/51	658,000	579,040
FRB Ser. 12-C6, Class F, 5.191%, 5/15/45	432,000	391,133
Ser. 13-C13, Class E, 3.986%, 1/15/46	639,000	513,884
Ser. 13-C10, Class E, 3.50%, 12/15/47	553,000	402,031
FRB Ser. 13-LC11, Class E, 3.25%, 4/15/46	370,000	273,652
Ser. 12-C6, Class G, 2.972%, 5/15/45	800,000	619,600
LB-UBS Commercial Mortgage Trust
FRB Ser. 06-C3, Class C, 5.567%, 3/15/39	1,703,000	1,671,069
Ser. 06-C6, Class D, 5.502%, 9/15/39	1,187,000	260,820
FRB Ser. 06-C6, Class C, 5.482%, 9/15/39	414,000	103,500
FRB Ser. 07-C2, Class XW, IO, 0.451%, 2/15/40	1,322,599	1,920
Merrill Lynch Mortgage Trust
FRB Ser. 05-CIP1, Class C, 5.595%, 7/12/38	355,110	347,411
Ser. 04-KEY2, Class D, 5.046%, 8/12/39	223,927	221,684
ML-CFC Commercial Mortgage Trust 144A
Ser. 06-4, Class AJFX, 5.147%, 12/12/49	295,000	294,705
FRB Ser. 06-4, Class XC, IO, 0.666%, 12/12/49	8,627,191	25,882
Morgan Stanley Bank of America Merrill Lynch Trust 144A
Ser. 14-C17, Class D, 4.698%, 8/15/47	699,000	575,414
FRB Ser. 12-C6, Class F, 4.656%, 11/15/45	844,000	716,387
FRB Ser. 12-C6, Class G, 4.50%, 11/15/45	2,827,000	2,200,537

36   Absolute Return 700 Fund 

	Principal
MORTGAGE-BACKED SECURITIES (11.9%)* cont.	amount	Value
Commercial mortgage-backed securities cont.
Morgan Stanley Bank of America Merrill Lynch Trust 144A
FRB Ser. 13-C11, Class E, 4.37%, 8/15/46	$750,000	$654,750
FRB Ser. 13-C11, Class F, 4.37%, 8/15/46	1,024,000	795,136
Ser. 13-C13, Class F, 3.707%, 11/15/46	1,547,000	1,082,603
Morgan Stanley Capital I Trust
Ser. 07-HQ11, Class D, 5.587%, 2/12/44	2,100,000	636,664
Ser. 07-HQ11, Class C, 5.558%, 2/12/44	1,181,000	708,600
Ser. 06-HQ10, Class B, 5.448%, 11/12/41	1,795,000	1,793,326
FRB Ser. 06-HQ8, Class D, 5.422%, 3/12/44	274,000	202,919
Wachovia Bank Commercial Mortgage Trust 144A FRB Ser. 05-C21,
Class E, 5.288%, 10/15/44	569,000	531,110
Wells Fargo Commercial Mortgage Trust 144A
Ser. 12-LC5, Class E, 4.777%, 10/15/45	333,000	284,815
FRB Ser. 13-LC12, Class D, 4.297%, 7/15/46	827,000	752,943
WF-RBS Commercial Mortgage Trust 144A
Ser. 11-C4, Class E, 5.265%, 6/15/44	305,000	306,861
Ser. 12-C6, Class E, 5.00%, 4/15/45	533,000	437,433
Ser. 11-C4, Class F, 5.00%, 6/15/44	851,000	769,900
FRB Ser. 12-C10, Class E, 4.453%, 12/15/45	381,000	311,110
Ser. 13-C12, Class E, 3.50%, 3/15/48	570,000	438,957
Ser. 13-C14, Class E, 3.25%, 6/15/46	360,000	240,732
		30,837,319
Residential mortgage-backed securities (non-agency) (2.2%)
BCAP, LLC Trust 144A
FRB Ser. 14-RR1, Class 2A2, 2.549%, 1/26/36	850,000	638,040
FRB Ser. 12-RR5, Class 4A8, 0.695%, 6/26/35	1,291,922	1,241,712
Bear Stearns Alt-A Trust FRB Ser. 04-3, Class B, 3.459%, 4/25/34	240,527	238,691
Bellemeade Re Ltd. 144A FRB Ser. 15-1A, Class B1, 6.834%,
7/25/25 (Bermuda)	919,000	929,339
Countrywide Alternative Loan Trust
FRB Ser. 06-OA10, Class 1A1, 1.483%, 8/25/46	819,256	595,376
FRB Ser. 06-OA7, Class 1A2, 1.463%, 6/25/46	1,700,416	1,398,592
FRB Ser. 05-27, Class 1A6, 1.354%, 8/25/35	589,272	444,900
FRB Ser. 05-59, Class 1A1, 0.856%, 11/20/35	1,257,544	1,073,719
FRB Ser. 06-OC10, Class 2A2A, 0.714%, 11/25/36	766,118	666,523
Federal Home Loan Mortgage Corporation
Structured Agency Credit Risk Debt FRN Ser. 15-DN1, Class B,
12.034%, 1/25/25	1,148,412	1,327,800
Structured Agency Credit Risk Debt FRN Ser. 16-DNA2, Class B,
11.034%, 10/25/28	250,000	277,757
Structured Agency Credit Risk Debt FRN Ser. 15-HQA2, Class B,
11.034%, 5/25/28	365,642	405,102
Structured Agency Credit Risk Debt FRN Ser. 16-DNA1, Class B,
10.534%, 7/25/28	1,063,897	1,146,872
Structured Agency Credit Risk Debt FRN Ser. 15-DNA3, Class B,
9.884%, 4/25/28	749,961	803,029
Federal National Mortgage Association
Connecticut Avenue Securities FRB Ser. 16-C03, Class 2B,
13.284%, 10/25/28	380,000	468,116
Connecticut Avenue Securities FRB Ser. 16-C02, Class 1B,
12.784%, 9/25/28	1,310,000	1,594,467

Absolute Return 700 Fund   37 

	Principal
MORTGAGE-BACKED SECURITIES (11.9%)* cont.	amount	Value
Residential mortgage-backed securities (non-agency) cont.
Federal National Mortgage Association
Connecticut Avenue Securities FRB Ser. 16-C03, Class 1B,
12.284%, 10/25/28	$770,000	$902,975
Connecticut Avenue Securities FRB Ser. 16-C01, Class 1B,
12.284%, 8/25/28	1,000,000	1,188,243
Connecticut Avenue Securities FRB Ser. 16-C03, Class 2M2,
6.434%, 10/25/28	872,500	939,510
Connecticut Avenue Securities FRB Ser. 15-C04, Class 1M2,
6.234%, 4/25/28	3,235,000	3,449,608
Connecticut Avenue Securities FRB Ser. 15-C04, Class 2M2,
6.084%, 4/25/28	140,000	148,982
Connecticut Avenue Securities FRB Ser. 15-C03, Class 1M2,
5.534%, 7/25/25	2,808,000	2,946,700
Connecticut Avenue Securities FRB Ser. 15-C03, Class 2M2,
5.534%, 7/25/25	140,000	148,557
Connecticut Avenue Securities FRB Ser. 15-C01, Class 2M2,
5.084%, 2/25/25	201,533	209,211
Connecticut Avenue Securities FRB Ser. 15-C02, Class 1M2,
4.534%, 5/25/25	129,000	133,442
Connecticut Avenue Securities FRB Ser. 15-C02, Class 2M2,
4.534%, 5/25/25	206,000	212,470
GSAA Trust FRB Ser. 07-6, Class 1A1, 0.654%, 5/25/47	377,541	284,923
MortgageIT Trust FRB Ser. 04-1, Class M2, 1.539%, 11/25/34	306,677	265,266
Structured Asset Mortgage Investments II Trust FRB Ser. 07-AR1,
Class 2A1, 0.714%, 1/25/37	933,324	778,525
WaMu Mortgage Pass-Through Certificates Trust
FRB Ser. 05-AR19, Class A1C3, 1.034%, 12/25/45	365,504	330,050
FRB Ser. 05-AR13, Class A1C3, 1.024%, 10/25/45	1,707,087	1,465,270
Wells Fargo Mortgage Backed Securities Trust FRB Ser. 06-AR6,
Class 7A2, 2.985%, 3/25/36	195,104	190,181
		26,843,948
Total mortgage-backed securities (cost $154,797,341)		$145,015,922
	Principal
COMMODITY LINKED NOTES (11.8%)*†††	amount	Value
Bank of America Corp. 144A sr. unsec. unsub. notes 1-month LIBOR less
0.15%, 2017 (Indexed to the BofA Merrill Lynch Commodity MLCXP2KS
Excess Return Strategy multiplied by 3)	$15,800,000	$14,036,468
Bank of America Corp. 144A sr. unsec. unsub. notes 1-month LIBOR less
0.14%, 2017 (Indexed to the S&P GSCI® Light Energy Total Return Index
multiplied by 3)	23,600,000	23,463,713
Citigroup Global Markets Holdings Inc. sr. notes Ser. N, 3-month USD
LIBOR less 0.20%, 2017 (Indexed to the Citi Commodity Spread Index—
Bloomberg Commodity IndexSM 3 Month Forward Sub-Indices versus
Bloomberg Commodity IndexSM Sub-Indices multiplied by 3)	46,370,000	46,571,153
Bank of America Corp. 144A sr. unsec. unsub. notes 1-month LIBOR less
0.16%, 2017 (Indexed to the S&P GSCI® Light Energy Total Return Index
multiplied by 3)	24,100,000	25,606,742
UBS AG/London 144A sr. notes 1-month LIBOR less 0.10%, 2017 (Indexed
to the UBSIF3AT Index multiplied by 3) (United Kingdom)	13,070,000	13,222,358

38   Absolute Return 700 Fund 

	Principal
COMMODITY LINKED NOTES (11.8%)*††† cont.	amount	Value
UBS AG/London 144A sr. notes 1-month LIBOR less 0.10%, 2017 (Indexed
to the UBSIF3AT Index multiplied by 3) (United Kingdom)	$7,296,000	$7,674,055
UBS AG/London 144A sr. notes 1-month LIBOR less 0.10%, 2016 (Indexed
to the UBSIF3AT Index multiplied by 3) (United Kingdom)	12,962,592	14,106,351
Total commodity Linked Notes (cost $143,198,592)		$144,680,840
	Principal
CORPORATE BONDS AND NOTES (9.2%)*	amount	Value
Basic materials (1.5%)
A Schulman, Inc. 144A company guaranty sr. unsec. unsub. notes
6.875%, 6/1/23	$1,275,000	$1,297,313
ArcelorMittal SA sr. unsec. unsub. bonds 6.125%, 6/1/25 (France)	1,045,000	1,149,500
Cemex SAB de CV 144A company guaranty sr. sub. notes 5.70%,
1/11/25 (Mexico)	2,585,000	2,639,931
Chemours Co. (The) company guaranty sr. unsec. unsub. notes
6.625%, 5/15/23	415,000	402,550
Coveris Holdings SA 144A company guaranty sr. unsec. notes
7.875%, 11/1/19 (Luxembourg)	1,125,000	1,155,938
CPG Merger Sub, LLC 144A company guaranty sr. unsec. notes
8.00%, 10/1/21	440,000	455,400
First Quantum Minerals, Ltd. 144A company guaranty sr. unsec.
notes 7.00%, 2/15/21 (Canada)	805,000	763,744
Freeport-McMoran Oil & Gas, LLC/FCX Oil & Gas, Inc. company
guaranty sr. unsec. notes 6.75%, 2/1/22	500,000	511,250
GCP Applied Technologies, Inc. 144A company guaranty sr. unsec.
notes 9.50%, 2/1/23	1,050,000	1,189,125
HudBay Minerals, Inc. company guaranty sr. unsec. notes 9.50%,
10/1/20 (Canada)	1,386,000	1,415,453
Mercer International, Inc. company guaranty sr. unsec. notes
7.75%, 12/1/22 (Canada)	2,310,000	2,431,275
Perstorp Holding AB 144A company guaranty sr. notes 8.75%,
5/15/17 (Sweden)	975,000	975,000
Steel Dynamics, Inc. company guaranty sr. unsec. unsub. notes
6.375%, 8/15/22	2,262,000	2,358,135
TMS International Corp. 144A company guaranty sr. unsec. sub.
notes 7.625%, 10/15/21	685,000	565,125
Univar USA, Inc. 144A company guaranty sr. unsec. notes
6.75%, 7/15/23	1,073,000	1,110,555
		18,420,294
Capital goods (0.7%)
Advanced Disposal Services, Inc. company guaranty sr. unsec.
notes 8.25%, 10/1/20	1,520,000	1,588,400
American Axle & Manufacturing, Inc. company guaranty sr. unsec.
notes 7.75%, 11/15/19	1,011,000	1,142,430
ATS Automation Tooling Systems, Inc. 144A sr. unsec. notes 6.50%,
6/15/23 (Canada)	1,000,000	1,032,500
DH Services Luxembourg Sarl 144A company guaranty sr. unsec.
sub. notes 7.75%, 12/15/20 (Luxembourg)	500,000	520,000
Gates Global, LLC/Gates Global Co. 144A company guaranty sr.
unsec. notes 6.00%, 7/15/22	1,190,000	1,121,575
KLX, Inc. 144A company guaranty sr. unsec. notes 5.875%, 12/1/22	2,540,000	2,584,958
TI Group Automotive Systems, LLC 144A sr. unsec. notes
8.75%, 7/15/23	1,000,000	1,062,500
		9,052,363

Absolute Return 700 Fund   39 

		Principal
CORPORATE BONDS AND NOTES (9.2%)* cont.		amount	Value
Communication services (1.5%)
Altice SA 144A company guaranty sr. unsec. notes 7.75%,
5/15/22 (Luxembourg)		$2,500,000	$2,618,750
Cequel Communications Holdings I, LLC/Cequel Capital Corp.
144A sr. unsec. unsub. notes 5.125%, 12/15/21		3,000,000	2,917,500
Digicel Group, Ltd. 144A sr. unsec. notes 8.25%, 9/30/20 (Jamaica)		2,015,000	1,783,275
Digicel, Ltd. 144A company guaranty sr. unsec. notes 6.75%,
3/1/23 (Jamaica)		200,000	178,750
Digicel, Ltd. 144A sr. unsec. notes 7.00%, 2/15/20 (Jamaica)		500,000	476,875
Frontier Communications Corp. sr. unsec. notes 8.875%, 9/15/20		2,320,000	2,465,000
Intelsat Luxembourg SA company guaranty sr. unsec. bonds
7.75%, 6/1/21 (Luxembourg)		140,000	45,500
Sprint Communications, Inc. sr. unsec. notes 7.00%, 8/15/20		1,500,000	1,556,250
T-Mobile USA, Inc. company guaranty sr. unsec. notes
6.25%, 4/1/21		750,000	780,000
Telenet Finance V Luxembourg SCA 144A sr. notes 6.75%,
8/15/24 (Luxembourg)	EUR	115,000	139,058
Virgin Media Secured Finance PLC 144A sr. notes 6.00%, 4/15/21
(United Kingdom)	GBP	486,000	621,318
West Corp. 144A company guaranty sr. unsec. sub. notes
5.375%, 7/15/22		$1,350,000	1,299,375
WideOpenWest Finance, LLC/WideOpenWest Capital Corp.
company guaranty sr. unsec. sub. notes 10.25%, 7/15/19		1,855,000	1,947,750
Windstream Services, LLC company guaranty sr. unsec. notes
6.375%, 8/1/23		1,955,000	1,730,175
			18,559,576
Consumer cyclicals (0.9%)
American Tire Distributors, Inc. 144A sr. unsec. sub. notes
10.25%, 3/1/22		1,000,000	919,380
Brookfield Residential Properties, Inc./Brookfield Residential
US Corp. 144A company guaranty sr. unsec. notes 6.125%,
7/1/22 (Canada)		2,500,000	2,531,250
Eldorado Resorts, Inc. company guaranty sr. unsec. unsub. notes
7.00%, 8/1/23		1,805,000	1,917,813
iHeartCommunications, Inc. company guaranty sr. notes
9.00%, 12/15/19		885,000	671,494
JC Penney Corp, Inc. company guaranty sr. unsec. bonds
8.125%, 10/1/19		700,000	762,125
Mattamy Group Corp. 144A sr. unsec. notes 6.50%,
11/15/20 (Canada)		1,491,000	1,487,273
ROC Finance, LLC/ROC Finance 1 Corp. 144A notes 12.125%, 9/1/18		700,000	725,375
Scientific Games International, Inc. 144A company guaranty sr.
notes 7.00%, 1/1/22		530,000	563,708
SugarHouse HSP Gaming Prop. Mezz LP/SugarHouse HSP Gaming
Finance Corp. 144A sr. notes 6.375%, 6/1/21		1,250,000	1,255,775
Townsquare Media, Inc. 144A company guaranty sr. unsec. notes
6.50%, 4/1/23		390,000	387,075
			11,221,268
Consumer staples (0.2%)
BlueLine Rental Finance Corp. 144A notes 7.00%, 2/1/19		1,323,000	1,154,318
Ceridian HCM Holding, Inc. 144A sr. unsec. notes 11.00%, 3/15/21		1,500,000	1,578,750
			2,733,068

40   Absolute Return 700 Fund 

	Principal
CORPORATE BONDS AND NOTES (9.2%)* cont.	amount	Value
Energy (1.3%)
California Resources Corp. 144A company guaranty notes
8.00%, 12/15/22	$428,000	$288,900
CHC Helicopter SA company guaranty sr. notes 9.25%, 10/15/20
(Canada) (In default) †	243,000	119,678
Chesapeake Energy Corp. 144A company guaranty notes
8.00%, 12/15/22	1,299,000	1,317,673
Concho Resources, Inc. company guaranty sr. unsec. unsub. notes
5.50%, 10/1/22	1,000,000	1,027,500
Halcon Resources Corp. 144A company guaranty notes
8.625%, 2/1/20	1,405,000	1,419,050
Laredo Petroleum, Inc. company guaranty sr. unsec. notes
7.375%, 5/1/22	943,000	971,290
Oasis Petroleum, Inc. company guaranty sr. unsec. unsub. notes
6.875%, 3/15/22	1,048,000	1,037,520
Petrobras Global Finance BV company guaranty sr. unsec. unsub.
notes 8.375%, 5/23/21 (Brazil)	902,000	997,838
Petrobras Global Finance BV company guaranty sr. unsec. unsub.
notes 6.25%, 3/17/24 (Brazil)	2,369,000	2,330,504
Petrobras Global Finance BV company guaranty sr. unsec. unsub.
notes 4.875%, 3/17/20 (Brazil)	752,000	757,452
Petroleos Mexicanos company guaranty sr. unsec. unsub. notes
4.50%, 1/23/26 (Mexico)	3,104,000	2,998,464
Samson Investment Co. company guaranty sr. unsec. notes 9.75%,
2/15/20 (In default) †	2,500,000	121,875
SandRidge Energy, Inc. company guaranty notes 8.75%, 6/1/20 F	1,620,000	3,240
WPX Energy, Inc. sr. unsec. unsub. notes 6.00%, 1/15/22	2,000,000	1,995,000
		15,385,984
Financials (1.5%)
Hartford Financial Services Group, Inc. (The) jr. unsec. sub. FRB
8.125%, 6/15/38	645,000	706,275
HUB International, Ltd. 144A sr. unsec. notes 7.875%, 10/1/21	1,905,000	1,947,291
Icahn Enterprises LP/Icahn Enterprises Finance Corp. company
guaranty sr. unsec. notes 4.875%, 3/15/19	1,430,000	1,423,565
Lloyds Banking Group PLC 144A jr. unsec. sub. FRN 6.657%,
perpetual maturity (United Kingdom)	200,000	222,500
OneMain Financial Holdings, LLC 144A company guaranty sr.
unsec. unsub. notes 7.25%, 12/15/21	1,000,000	1,035,000
Provident Funding Associates LP/PFG Finance Corp. 144A
company guaranty sr. unsec. notes 6.75%, 6/15/21	995,000	999,975
Russian Agricultural Bank OJSC Via RSHB Capital SA 144A sr. unsec.
unsub. notes 5.298%, 12/27/17 (Russia)	600,000	613,500
Sberbank of Russia Via SB Capital SA 144A unsec. sub. notes
5.125%, 10/29/22 (Russia)	750,000	754,688
Stearns Holdings, Inc. 144A company guaranty sr. notes
9.375%, 8/15/20	1,000,000	995,000
TMX Finance, LLC/TitleMax Finance Corp. 144A company guaranty
sr. notes 8.50%, 9/15/18	1,000,000	750,000
USI, Inc./NY 144A sr. unsec. notes 7.75%, 1/15/21	1,151,000	1,162,510
Vnesheconombank Via VEB Finance PLC 144A sr. unsec. unsub.
notes 6.902%, 7/9/20 (Russia)	575,000	619,563
Vnesheconombank Via VEB Finance PLC 144A sr. unsec. unsub.
notes 6.80%, 11/22/25 (Russia)	250,000	267,513

Absolute Return 700 Fund   41 

	Principal
CORPORATE BONDS AND NOTES (9.2%)* cont.	amount	Value
Financials cont.
Vnesheconombank Via VEB Finance PLC 144A sr. unsec. unsub.
notes 5.942%, 11/21/23 (Russia)	$200,000	$206,206
VTB Bank OJSC Via VTB Capital SA 144A sr. unsec. notes 6.875%,
5/29/18 (Russia)	1,500,000	1,581,780
VTB Bank OJSC Via VTB Capital SA 144A unsec. sub. bonds 6.95%,
10/17/22 (Russia)	2,600,000	2,713,750
Wayne Merger Sub, LLC 144A sr. unsec. notes 8.25%, 8/1/23	1,880,000	1,912,900
		17,912,016
Health care (0.6%)
AMAG Pharmaceuticals, Inc. 144A company guaranty sr. unsec.
notes 7.875%, 9/1/23	2,510,000	2,353,125
Concordia International Corp. 144A company guaranty sr. unsec.
notes 7.00%, 4/15/23 (Canada)	2,275,000	1,313,813
DPx Holdings BV 144A sr. unsec. sub. notes 7.50%,
2/1/22 (Netherlands)	870,000	915,675
HCA, Inc. company guaranty sr. notes 6.50%, 2/15/20	610,000	676,338
Tenet Healthcare Corp. company guaranty sr. notes 6.25%, 11/1/18	665,000	699,913
Valeant Pharmaceuticals International, Inc. 144A company
guaranty sr. unsec. notes 6.375%, 10/15/20	1,841,000	1,587,863
		7,546,727
Technology (0.6%)
Avaya, Inc. 144A company guaranty sr. notes 7.00%, 4/1/19	1,000,000	812,500
First Data Corp. 144A company guaranty sr. unsec. unsub. notes
7.00%, 12/1/23	2,000,000	2,095,000
Infor US, Inc. company guaranty sr. unsec. notes 6.50%, 5/15/22	2,005,000	2,072,669
Iron Mountain, Inc. 144A company guaranty sr. unsec. notes
6.00%, 10/1/20 R	2,465,000	2,609,819
		7,589,988
Utilities and power (0.4%)
AES Corp./Virginia (The) sr. unsec. notes 5.50%, 4/15/25	1,834,000	1,852,340
NRG Energy, Inc. 144A company guaranty sr. unsec. notes
7.25%, 5/15/26	2,358,000	2,320,060
		4,172,400
Total corporate bonds and notes (cost $114,815,517)		$112,593,684
INVESTMENT COMPANIES (7.7%)*	Shares	Value
Consumer Staples Select Sector SPDR Fund S	285,400	$15,069,120
Health Care Select Sector SPDR Fund S	215,900	14,543,024
Materials Select Sector SPDR Fund	672,600	31,444,050
Technology Select Sector SPDR Fund S	362,900	17,208,718
Utility Select Sector SPDR Fund S	313,300	15,486,419
Total investment companies (cost $90,611,011)		$93,751,331

42   Absolute Return 700 Fund 

	Principal
SENIOR LOANS (4.2%) *C	amount	Value
Basic materials (0.2%)
Builders FirstSource, Inc. bank term loan FRN 4.75%, 7/31/22	$2,045,440	$2,053,622
		2,053,622
Capital goods (0.1%)
Cortes NP Acquisition Corp. bank term loan FRN Ser. B,
6.00%, 9/29/23	1,440,000	1,432,800
		1,432,800
Communication services (0.2%)
Asurion, LLC bank term loan FRN 8.50%, 3/3/21	2,090,000	2,094,353
Asurion, LLC bank term loan FRN Ser. B2, 4.25%, 7/8/20	637,819	638,388
		2,732,741
Consumer cyclicals (2.0%)
Caesars Entertainment Operating Co., Inc. bank term loan FRN
Ser. B6, 11.25%, 3/1/17 (In default) †	538,351	594,205
Caesars Growth Properties Holdings, LLC bank term loan FRN
6.25%, 5/8/21	1,933,156	1,931,344
CBAC Borrower, LLC bank term loan FRN Ser. B, 8.25%, 7/2/20	1,488,750	1,458,975
DBP Holding Corp. bank term loan FRN Ser. B, 5.00%, 10/11/19	2,872,002	2,666,175
Diamond Resorts International, Inc. bank term loan FRN Ser. B,
7.00%, 9/2/23	570,000	563,350
Golden Nugget, Inc. bank term loan FRN 4.50%, 11/21/19	552,781	558,309
Golden Nugget, Inc. bank term loan FRN 4.50%, 11/21/19	236,906	239,275
iHeartCommunications, Inc. bank term loan FRN Ser. D,
7.274%, 1/30/19	1,617,000	1,223,867
Jo-Ann Stores, LLC bank term loan FRN 6.00%, 9/29/23	2,100,000	2,090,376
Navistar, Inc. bank term loan FRN Ser. B, 6.50%, 8/7/20	1,488,750	1,496,660
Neiman Marcus Group, Ltd., Inc. bank term loan FRN
4.25%, 10/25/20	1,397,813	1,283,018
Petco Animal Supplies, Inc. bank term loan FRN Ser. B1,
5.00%, 1/26/23	1,488,750	1,500,743
ROC Finance, LLC bank term loan FRN 5.00%, 6/20/19	2,039,087	2,033,989
Sabre GLBL, Inc. bank term loan FRN Ser. B, 4.00%, 2/19/19	575,621	577,368
Scientific Games International, Inc. bank term loan FRN Ser. B2,
6.00%, 10/1/21	1,965,000	1,971,447
Talbots, Inc. (The) bank term loan FRN 9.50%, 3/19/21	2,098,642	1,944,742
Travelport Finance Luxembourg Sarl bank term loan FRN Ser. B,
5.00%, 9/2/21	729,682	733,331
VGD Merger Sub, LLC bank term loan FRN 5.00%, 8/18/23	1,165,000	1,173,980
Yonkers Racing Corp. bank term loan FRN 4.25%, 8/20/19	891,854	884,422
		24,925,576
Consumer staples (0.5%)
Del Monte Foods, Inc. bank term loan FRN 8.25%, 8/18/21	1,000,000	765,000
Hostess Brands, LLC bank term loan FRN 8.50%, 8/3/23	1,995,000	2,002,481
Revlon Consumer Products Corp. bank term loan FRN Ser. B,
4.25%, 9/7/23	2,505,000	2,509,697
Rite Aid Corp. bank term loan FRN 4.875%, 6/21/21	1,000,000	1,001,750
		6,278,928
Energy (0.2%)
Chesapeake Energy Corp. bank term loan FRN 8.50%, 8/23/21	735,000	783,510
EP Energy, LLC bank term loan FRN 9.75%, 6/30/21	1,250,000	1,275,000
Tervita Corp. bank term loan FRN Ser. B, 6.25%, 5/15/18	316,094	312,143
		2,370,653

Absolute Return 700 Fund   43 

	Principal
SENIOR LOANS (4.2%)* c cont.	amount	Value
Financials (0.3%)
Altisource Solutions Sarl bank term loan FRN Ser. B, 4.50%, 12/9/20	$1,922,489	$1,855,202
Capital Automotive LP bank term loan FRN 6.00%, 4/29/20	2,000,000	2,007,500
		3,862,702
Health care (0.2%)
Kinetic Concepts, Inc. bank term loan FRN Ser. F1, 5.00%, 11/4/20	1,301,444	1,308,222
Ortho-Clinical Diagnostics, Inc. bank term loan FRN Ser. B,
4.75%, 6/30/21	997,449	970,331
		2,278,553
Technology (0.2%)
Avaya, Inc. bank term loan FRN Ser. B6, 6.50%, 3/31/18	1,461,118	1,249,255
Infor US, Inc. bank term loan FRN Ser. B5, 3.75%, 6/3/20	578,671	576,591
		1,825,846
Transportation (—%)
Livingston International, Inc. bank term loan FRN 8.25%,
4/18/20 (Canada)	331,087	301,289
		301,289
Utilities and power (0.3%)
Dynegy, Inc. bank term loan FRN Ser. C, 5.00%, 6/27/23	1,000,000	1,003,889
Texas Competitive Electric Holdings Co., LLC bank term loan FRN
4.998%, 10/10/17	848,159	247,026
Texas Competitive Electric Holdings Co., LLC bank term loan FRN
4.998%, 10/10/17	8,705	2,535
Texas Competitive Electric Holdings Co., LLC bank term loan FRN
Ser. B, 5.00%, 7/27/23	1,905,429	1,919,323
Texas Competitive Electric Holdings Co., LLC bank term loan FRN
Ser. C, 5.00%, 7/27/23	434,571	437,740
		3,610,513
Total senior loans (cost $52,980,481)		$51,673,223

	Expiration	Strike
WARRANTS (2.1%)* †	date	price	Warrants	Value
Aurobindo Pharma, Ltd. 144A (India)	6/22/17	$0.00	25,561	$313,090
Bharat Petroleum Corp., Ltd. 144A (India)	3/9/18	0.00	363,245	3,639,983
China State Construction Engineering Corp., Ltd.
144A (China)	12/10/17	0.00	3,431,691	3,639,085
Halcon Resources Corp.	9/9/20	0.00	8,737	22,105
HCL Technologies, Ltd. 144A (India)	11/17/16	0.00	167,692	1,927,718
Hindalco Industries, Ltd. 144A (India)	9/26/17	0.00	241,198	540,819
Hindustan Petroleum Corp., Ltd. 144A (India)	6/4/18	0.00	542,130	3,792,836
Indian Oil Corp., Ltd. 144A (India)	10/16/17	0.00	844,336	4,091,685
Infosys, Ltd. 144A (India)	6/27/18	0.00	138,389	2,076,462
Shanghai Automotive Co. (China)	3/2/17	0.00	702,900	2,458,302
Tata Motors, Ltd. 144A (India)	3/9/17	0.00	265,870	2,117,637
Wipro, Ltd. 144A (India)	10/6/17	0.00	25,224	175,395
Zhengzhou Yutong Bus Co., Ltd. 144A (China)	7/24/17	0.00	185,800	590,813
Total warrants (cost $21,459,730)				$25,385,930

44   Absolute Return 700 Fund 

FOREIGN GOVERNMENT AND AGENCY		Principal
BONDS AND NOTES (1.2%)*		amount	Value
Argentina (Republic of) 144A sr. unsec. bonds 7.125%,
7/6/36 (Argentina)		$3,957,000	$4,087,134
Argentina (Republic of) 144A sr. unsec. notes 7.50%,
4/22/26 (Argentina)		$225,000	245,569
Brazil (Federal Republic of) sr. unsec. unsub. notes 10.00%, 1/1/17
(Brazil) (units)	BRL	3,340	1,074,141
Buenos Aires (Province of) 144A sr. unsec. notes 9.125%,
3/16/24 (Argentina)		$2,000,000	2,208,111
Buenos Aires (Province of) 144A sr. unsec. unsub. notes 10.875%,
1/26/21 (Argentina)		1,155,000	1,325,363
Cordoba (Province of) 144A sr. unsec. unsub. notes 7.125%,
6/10/21 (Argentina)		488,000	505,080
Croatia (Republic of) 144A sr. unsec. unsub. notes 6.375%,
3/24/21 (Croatia)		220,000	244,200
Croatia (Republic of) 144A sr. unsec. unsub. notes 6.25%,
4/27/17 (Croatia)		475,000	484,500
Egypt (Government of) 144A sr. unsec. notes 5.875%,
6/11/25 (Egypt)		722,000	669,164
Indonesia (Republic of) 144A sr. unsec. notes 5.25%,
1/17/42 (Indonesia)		365,000	399,687
Indonesia (Republic of) 144A sr. unsec. notes 4.75%,
1/8/26 (Indonesia)		400,000	436,000
Indonesia (Republic of) 144A sr. unsec. unsub. notes 5.95%,
1/8/46 (Indonesia)		950,000	1,149,500
Russia (Federation of) 144A sr. unsec. unsub. bonds 12.75%,
6/24/28 (Russia)		125,000	218,594
Russia (Federation of) 144A sr. unsec. unsub. bonds 5.625%,
4/4/42 (Russia)		1,000,000	1,101,250
Total foreign government and agency bonds and notes (cost $13,270,456)			$14,148,293

	Expiration
PURCHASED OPTIONS	date/strike	Contract
OUTSTANDING (0.4%)*	price	amount	Value
SPDR S&P 500 ETF Trust (Put)	Oct-17/$183.00	$193,127	$1,243,954
SPDR S&P 500 ETF Trust (Put)	Sep-17/180.00	205,704	1,103,962
SPDR S&P 500 ETF Trust (Put)	Aug-17/183.00	198,923	1,023,526
SPDR S&P 500 ETF Trust (Put)	Jul-17/180.00	198,250	836,284
SPDR S&P 500 ETF Trust (Put)	Jun-17/175.00	195,135	599,859
SPDR S&P 500 ETF Trust (Put)	May-17/177.00	199,297	504,999
Total purchased options outstanding (cost $7,498,138)			$5,312,584

	Principal
CONVERTIBLE BONDS AND NOTES (0.0%)*	amount	Value
SandRidge Energy, Inc. cv. company guaranty sr. unsec. sub. notes
zero %, 10/4/20	$365,963	$448,305
Total convertible bonds and notes (cost $380,325)		$448,305

Absolute Return 700 Fund   45 

	Principal amount/
SHORT-TERM INVESTMENTS (19.5%)*		shares	Value
Putnam Cash Collateral Pool, LLC 0.74% d	Shares	53,420,625	$53,420,625
Putnam Short Term Investment Fund 0.50% L	Shares	120,142,869	120,142,869
State Street Institutional Liquid Reserves Fund Trust
Class 0.38% P	Shares	20,779,000	20,779,000
U.S. Treasury Bills 0.341%, 12/8/16 # §		$373,000	372,935
U.S. Treasury Bills 0.159%, 12/1/16 #  ∆ §		1,691,000	1,690,757
U.S. Treasury Bills 0.294%, 11/25/16 #  ∆ §		31,477,000	31,473,380
U.S. Treasury Bills 0.274%, 11/17/16		2,590,000	2,589,795
U.S. Treasury Bills 0.290%, 11/10/16 §		501,000	500,984
U.S. Treasury Bills 0.142%, 11/3/16 §		7,049,000	7,048,958
Total short-term investments (cost $238,016,657)			$238,019,303

TOTAL INVESTMENTS
Total investments (cost $1,695,862,417)	$1,728,620,696

Key to holding’s currency abbreviations
AUD	Australian Dollar
BRL	Brazilian Real
CAD	Canadian Dollar
CHF	Swiss Franc
EUR	Euro
GBP	British Pound
NOK	Norwegian Krone
NZD	New Zealand Dollar
SEK	Swedish Krona

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 or yield at the close of the reporting period
IFB	Inverse Floating Rate Bonds, which are securities that pay interest rates that vary inversely to changes in the
	market interest rates. As interest rates rise, inverse floaters produce less current income. The rate shown is
	the current interest rate at the close of the reporting period.
IO	Interest Only
OAO	Open Joint Stock Company
OJSC	Open Joint Stock Company
PJSC	Public Joint Stock Company
PO	Principal Only
SPDR	S&P Depository Receipts
TBA	To Be Announced Commitments

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 November 1, 2015 through October 31, 2016 (the reporting period). Within the following notes to the portfolio, references to “ASC 820” represent Accounting Standards Codification 820 Fair Value Measurements and Disclosures and references to “OTC”, if any, represent over-the-counter.

* Percentages indicated are based on net assets of $1,222,268,751.

46   Absolute Return 700 Fund 

†††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.

    † This security is non-income-producing.

    # 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.

    ∆ 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.

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

       ^c Senior loans are exempt from registration under the Securities Act of 1933, as amended, but contain certain restrictions on resale and cannot be sold publicly. These loans pay interest at rates which adjust periodically. The interest rates shown for senior loans are the current interest rates at the close of the reporting period. Senior loans are also subject to mandatory and/or optional prepayment which cannot be predicted. As a result, the remaining maturity may be substantially less than the stated maturity shown (Notes 1 and 6).

       ^d Affiliated company. See Notes 1 and 5 to the financial statements regarding securities lending. The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period.

       ^F This security is valued by Putnam Management 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 also used for certain foreign securities in the portfolio (Note 1).

        ⁱ This 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 5). The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period.

       ^P This security was pledged, or purchased with cash that was pledged, to the fund for collateral on certain derivative 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.

       ^S Security on loan, in part or in entirety, at the close of the reporting period (Note 1).

       At the close of the reporting period, the fund maintained liquid assets totaling $712,895,559 to cover certain derivative contracts and delayed delivery securities.

       Unless otherwise noted, the rates quoted in Short-term investments security descriptions represent the weighted average yield to maturity.

       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 commitments.

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

Absolute Return 700 Fund   47 

FORWARD CURRENCY CONTRACTS at 10/31/16 (aggregate face value $196,351,642)
						Unrealized
		Contract	Delivery		Aggregate	appreciation/
Counterparty	Currency	type	date	Value	face value	(depreciation)
Bank of America N. A.
	Australian Dollar	Buy	1/18/17	$1,879,939	$1,892,952	$(13,013)
	British Pound	Sell	12/21/16	2,168,785	2,352,170	183,385
	Euro	Buy	12/21/16	4,969,399	5,085,906	(116,507)
	Hong Kong Dollar	Sell	11/16/16	2,771,511	2,772,480	969
	Japanese Yen	Buy	11/16/16	1,950,015	2,032,435	(82,420)
	Norwegian Krone	Sell	12/21/16	2,018,161	2,031,274	13,113
	Swedish Krona	Sell	12/21/16	2,411,749	2,559,761	148,012
Barclays Bank PLC
	Australian Dollar	Buy	1/18/17	1,342,000	1,351,399	(9,399)
	Euro	Buy	12/21/16	7,802,753	7,897,623	(94,870)
	Euro	Sell	12/21/16	7,802,753	7,788,631	(14,122)
	Japanese Yen	Sell	11/16/16	396,072	375,568	(20,504)
	Swedish Krona	Buy	12/21/16	2,419,884	2,479,236	(59,352)
	Swedish Krona	Sell	12/21/16	2,419,884	2,442,264	22,380
Citibank, N.A.
	Australian Dollar	Buy	1/18/17	129,759	135,633	(5,874)
	Brazilian Real	Sell	1/3/17	1,035,643	1,006,155	(29,488)
	Euro	Buy	12/21/16	4,942,774	4,968,066	(25,292)
	Euro	Sell	12/21/16	4,942,774	4,941,124	(1,650)
	New Zealand Dollar	Buy	1/18/17	2,466,524	2,448,741	17,783
	Swedish Krona	Buy	12/21/16	2,409,363	2,431,922	(22,559)
	Swedish Krona	Sell	12/21/16	2,409,363	2,538,113	128,750
Credit Suisse International
	Australian Dollar	Sell	1/18/17	175,010	171,990	(3,020)
	Canadian Dollar	Buy	1/18/17	2,405,789	2,442,314	(36,525)
	Hong Kong Dollar	Sell	11/16/16	2,250,003	2,251,139	1,136
	Japanese Yen	Sell	11/16/16	2,745,365	2,822,447	77,082
	New Zealand Dollar	Buy	1/18/17	2,570,288	2,609,513	(39,225)
	Swedish Krona	Buy	12/21/16	2,365,277	2,509,574	(144,297)
	Swedish Krona	Sell	12/21/16	2,365,277	2,435,559	70,282
Goldman Sachs International
	Australian Dollar	Buy	1/18/17	3,061,128	3,082,700	(21,572)
	British Pound	Sell	12/21/16	2,168,172	2,349,259	181,087
	Euro	Buy	12/21/16	2,888,364	3,004,398	(116,034)
	Indian Rupee	Buy	11/16/16	2,473,573	2,467,067	6,506
	Indian Rupee	Sell	11/16/16	2,473,573	2,473,202	(371)
	Indonesian Rupiah	Buy	11/16/16	2,638,585	2,602,081	36,504
	Indonesian Rupiah	Sell	11/16/16	2,638,585	2,624,083	(14,502)
	Japanese Yen	Sell	11/16/16	1,288,362	1,313,393	25,031
	Russian Ruble	Buy	12/21/16	181,088	53,073	128,015
	Swedish Krona	Buy	12/21/16	6,082,115	6,231,067	(148,952)
	Swedish Krona	Sell	12/21/16	6,082,115	6,407,933	325,818

48   Absolute Return 700 Fund 

FORWARD CURRENCY CONTRACTS at 10/31/16 (aggregate face value $196,351,642) cont.
						Unrealized
		Contract	Delivery		Aggregate	appreciation/
Counterparty	Currency	type	date	Value	face value	(depreciation)
HSBC Bank USA, National Association
	Australian Dollar	Buy	1/18/17	$129,758	$130,686	$(928)
	Australian Dollar	Sell	1/18/17	129,758	130,181	423
	Hong Kong Dollar	Sell	11/16/16	2,767,939	2,769,099	1,160
	Swedish Krona	Buy	12/21/16	2,420,628	2,476,460	(55,832)
	Swedish Krona	Sell	12/21/16	2,420,628	2,442,874	22,246
JPMorgan Chase Bank N.A.
	Australian Dollar	Buy	1/18/17	3,510,385	3,534,890	(24,505)
	British Pound	Sell	12/21/16	8,414,734	9,120,832	706,098
	Canadian Dollar	Buy	1/18/17	1,473,404	1,505,565	(32,161)
	Euro	Sell	12/21/16	97,698	10,281	(87,417)
	Hong Kong Dollar	Sell	11/16/16	2,108,830	2,109,796	966
	Indian Rupee	Buy	11/16/16	2,566,364	2,539,050	27,314
	Indian Rupee	Sell	11/16/16	2,566,364	2,567,382	1,018
	Indonesian Rupiah	Buy	11/16/16	2,641,157	2,567,237	73,920
	Indonesian Rupiah	Sell	11/16/16	2,641,157	2,658,415	17,258
	Japanese Yen	Sell	11/16/16	2,897,320	2,979,312	81,992
	New Zealand Dollar	Buy	1/18/17	4,736,644	4,787,640	(50,996)
	Norwegian Krone	Sell	12/21/16	7,620,716	7,724,587	103,871
	Russian Ruble	Buy	12/21/16	163,745	60,618	103,127
	Swedish Krona	Buy	12/21/16	4,632,816	4,271,876	360,940
Royal Bank of Scotland PLC (The)
	Australian Dollar	Buy	1/18/17	4,963,921	5,000,981	(37,060)
	British Pound	Sell	12/21/16	1,783,874	1,933,563	149,689
	Canadian Dollar	Buy	1/18/17	361,152	369,122	(7,970)
	Euro	Buy	12/21/16	2,498,012	2,545,833	(47,821)
	Euro	Sell	12/21/16	2,498,012	2,476,875	(21,137)
	Japanese Yen	Sell	11/16/16	2,041,423	2,144,794	103,371
	New Zealand Dollar	Sell	1/18/17	73,883	40,515	(33,368)
	Swedish Krona	Buy	12/21/16	4,796,760	4,963,092	(166,332)
	Swedish Krona	Sell	12/21/16	4,796,760	4,841,052	44,292
State Street Bank and Trust Co.
	Australian Dollar	Buy	1/18/17	1,162,814	1,171,153	(8,339)
	Euro	Buy	12/21/16	2,490,641	2,464,017	26,624
	Euro	Sell	12/21/16	2,490,641	2,466,526	(24,115)
	Japanese Yen	Sell	11/16/16	70,602	120,947	50,345
WestPac Banking Corp.
	Australian Dollar	Buy	1/18/17	4,015,979	4,044,146	(28,167)
Total						$1,594,811

Absolute Return 700 Fund   49 

FUTURES CONTRACTS OUTSTANDING at 10/31/16
				Unrealized
	Number of		Expiration	appreciation/
	contracts	Value	date	(depreciation)
DAX Index (Short)	19	$5,567,323	Dec-16	$(105,496)
Euro-CAC 40 Index (Short)	77	3,809,199	Nov-16	2,747
FTSE 100 Index (Short)	29	2,459,519	Dec-16	(95,014)
S&P 500 Index E-Mini (Short)	652	69,115,260	Dec-16	800,461
S&P Mid Cap 400 Index E-Mini (Long)	509	76,696,120	Dec-16	(875,582)
SPI 200 Index (Long)	2	$201,205	Dec-16	678
Tokyo Price Index (Short)	26	3,458,568	Dec-16	(163,314)
U.S. Treasury Bond 30 yr (Long)	109	17,736,344	Dec-16	(793,873)
U.S. Treasury Bond Ultra 30 yr (Short)	78	13,723,125	Dec-16	875,267
U.S. Treasury Note 2 yr (Long)	153	33,375,516	Dec-16	(7,476)
U.S. Treasury Note 5 yr (Short)	282	34,064,719	Dec-16	87,564
U.S. Treasury Note 10 yr (Long)	1,657	214,788,625	Dec-16	(2,022,727)
U.S. Treasury Note Ultra 10 yr (Short)	94	13,302,469	Dec-16	66,172
Total				$(2,230,593)

WRITTEN SWAP OPTIONS OUTSTANDING at 10/31/16 (premiums $1,761,746)
Counterparty
Fixed Obligation % to receive or (pay)/	Expiration	Contract
Floating rate index/Maturity date	date/strike	amount	Value
JPMorgan Chase Bank N.A.
(6.00 Floor)/3 month USD-LIBOR-BBA/Mar-18	Mar-18/6.00	$9,893,000	$747,812
Total			$747,812

WRITTEN OPTIONS OUTSTANDING at 10/31/16 (premiums $203,631)
	Expiration	Contract
	date/strike price	amount	Value
SPDR S&P 500 ETF Trust (Call)	Nov-16/$220.50	$176,592	$49,458
SPDR S&P 500 ETF Trust (Call)	Nov-16/220.50	181,057	39,000
SPDR S&P 500 ETF Trust (Call)	Nov-16/221.00	181,801	11,991
SPDR S&P 500 ETF Trust (Call)	Nov-16/221.00	181,098	905
Total			$101,354

TBA SALE COMMITMENTS OUTSTANDING at 10/31/16 (proceeds receivable $201,291,641)
	Principal	Settlement
Agency	amount	date	Value
Federal National Mortgage Association, 3.50%, 11/1/46	$34,000,000	11/14/16	$35,695,046
Federal National Mortgage Association, 3.00%, 11/1/46	135,000,000	11/14/16	138,986,712
Federal National Mortgage Association, 2.50%, 11/1/46	26,000,000	11/14/16	25,951,510
Total			$200,633,268

50   Absolute Return 700 Fund 

CENTRALLY CLEARED INTEREST RATE SWAP CONTRACTS OUTSTANDING at 10/31/16
		Upfront		Payments	Payments	Unrealized
		premium	Termination	made by	received by	appreciation/
Notional amount		received (paid)	date	fund per annum	fund per annum	(depreciation)
	$55,980,100 E	$(48,716)	12/21/21	1.25%	3 month USD-	$253,801
					LIBOR-BBA
	256,926,200 E	(401,102)	12/21/18	1.015%	3 month USD-	111,722
					LIBOR-BBA
	21,139,300 E	60,156	12/21/26	1.60%	3 month USD-	275,059
					LIBOR-BBA
	270,146,900 E	(714,177)	12/21/26	3 month USD-	1.60%	(3,460,490)
				LIBOR-BBA
	17,311,100 E	(17,570)	12/21/46	3 month USD-	1.90%	(655,311)
				LIBOR-BBA
	71,886,000 E	(149,886)	12/21/21	3 month USD-	1.30%	(363,028)
				LIBOR-BBA
	4,367,000 E	2,525	12/21/26	3 month USD-	1.55%	(62,439)
				LIBOR-BBA
	17,073,000	(226)	9/22/26	3 month USD-	1.5365%	(221,929)
				LIBOR-BBA
	38,771,000	(514)	9/23/26	1.542%	3 month USD-	483,953
					LIBOR-BBA
	14,974,000	(199)	9/26/26	1.486%	3 month USD-	268,031
					LIBOR-BBA
	35,515,600	(471)	9/27/26	3 month USD-	1.467%	(700,581)
				LIBOR-BBA
	13,273,000	(50)	9/30/18	0.989%	3 month USD-	20,576
					LIBOR-BBA
	9,844,000	(131)	9/30/26	1.3975%	3 month USD-	258,936
					LIBOR-BBA
	142,895 E	(5)	4/24/47	3 month USD-	1.92%	(5,121)
				LIBOR-BBA
	17,344,800 E	(29,484)	11/23/26	1.58%	3 month USD-	162,679
					LIBOR-BBA
	2,691,000	(36)	10/24/26	3 month USD-	1.5905%	(24,426)
				LIBOR-BBA
	4,884,000	(65)	11/1/26	1.7035%	3 month USD-	(6,541)
					LIBOR-BBA
	5,147,000	(68)	11/2/26	1.6895%	3 month USD-	55
					LIBOR-BBA
AUD	23,856,000 E	(222,132)	12/28/21	1.86%	6 month AUD-	62,199
					BBR-BBSW
AUD	11,336,000 E	(80,773)	12/28/26	2.20%	6 month AUD-	133,912
					BBR-BBSW
CAD	55,108,000 E	(65,842)	12/21/21	1.05%	3 month CAD-BA-	(37,410)
					CDOR
CAD	32,683,000 E	40,896	12/21/26	1.45%	3 month CAD-BA-	125,205
					CDOR
CHF	6,580,000 E	(10,587)	12/21/26	6 month CHF-	0.18%	55,336
				LIBOR-BBA
CHF	15,682,000 E	11,353	12/21/21	6 month CHF-	0.50%	48,880
				LIBOR-BBA

Absolute Return 700 Fund   51 

CENTRALLY CLEARED INTEREST RATE SWAP CONTRACTS OUTSTANDING at 10/31/16 cont.
		Upfront		Payments	Payments	Unrealized
		premium	Termination	made by	received by	appreciation/
Notional amount		received (paid)	date	fund per annum	fund per annum	(depreciation)
EUR	27,217,000 E	$(145,076)	12/21/21	6 month EUR-	0.10%	$50,738
				EURIBOR-REUTERS
EUR	15,047,000 E	17,120	12/21/26	6 month EUR-	0.40%	(196,470)
				EURIBOR-REUTERS
GBP	38,390,000 E	118,709	12/21/21	0.65%	6 month GBP-	585,501
					LIBOR-BBA
GBP	6,665,000 E	68,687	12/21/26	0.90%	6 month GBP-	306,174
					LIBOR-BBA
NOK	76,592,000 E	17,127	12/21/26	1.55%	6 month NOK-	116,204
					NIBOR-NIBR
NOK	112,326,000 E	5,658	12/21/21	1.25%	6 month NOK-	79,873
					NIBOR-NIBR
NZD	17,631,000 E	74,541	12/21/21	2.30%	3 month NZD-	157,249
					BBR-FRA
NZD	8,080,000 E	2,553	12/21/26	2.65%	3 month NZD-	104,125
					BBR-FRA
SEK	476,000 E	(283)	12/21/21	3 month SEK-STIBOR-0.10%		(46)
				SIDE
SEK	76,459,000 E	4,435	12/21/26	3 month SEK-STIBOR-0.80%		(15,298)
				SIDE
Total		$(1,463,633)				$(2,088,882)

^E Extended effective date.

OTC TOTAL RETURN SWAP CONTRACTS OUTSTANDING at 10/31/16
		Upfront		Payments	Total return	Unrealized
Swap counterparty/		premium	Termination	received (paid) by	received by	appreciation/
Notional amount		received (paid)	date	fund per annum	or paid by fund	(depreciation)
Bank of America N.A.
baskets	2,460,324	$—	8/2/17	(3 month USD-	A basket (MLTRFCF9)	$(2,977,746)
				LIBOR-BBA plus	of common stocks
				0.10%)
units	59,603	—	8/2/17	3 month USD-	Russell 1000 Total	3,900,631
				LIBOR-BBA minus	Return Index
				0.07%
Barclays Bank PLC
	$368,692	—	1/12/40	4.00% (1 month	Synthetic MBX Index	86
				USD-LIBOR)	4.00% 30 year Fannie
					Mae pools
	160,280	—	1/12/39	6.00% (1 month	Synthetic TRS Index	321
				USD-LIBOR)	6.00% 30 year Fannie
					Mae pools
	652,130	—	1/12/40	4.00% (1 month	Synthetic MBX Index	151
				USD-LIBOR)	4.00% 30 year Fannie
					Mae pools
	22,420	—	1/12/38	6.50% (1 month	Synthetic TRS Index	(37)
				USD-LIBOR)	6.50% 30 year Fannie
					Mae pools

52   Absolute Return 700 Fund 

OTC TOTAL RETURN SWAP CONTRACTS OUTSTANDING at 10/31/16 cont.
		Upfront		Payments	Total return	Unrealized
Swap counterparty/		premium	Termination	received (paid) by	received by	appreciation/
Notional amount		received (paid)	date	fund per annum	or paid by fund	(depreciation)
Barclays Bank PLC cont.
	$2,414,607	$—	1/12/40	4.00% (1 month	Synthetic MBX Index	$560
				USD-LIBOR)	4.00% 30 year Fannie
					Mae pools
	1,090,917	—	1/12/40	4.50% (1 month	Synthetic MBX Index	(5,605)
				USD-LIBOR)	4.50% 30 year Fannie
					Mae pools
	2,469,364	—	1/12/40	4.50% (1 month	Synthetic MBX Index	(12,687)
				USD-LIBOR)	4.50% 30 year Fannie
					Mae pools
	5,262	—	1/12/40	4.50% (1 month	Synthetic MBX Index	(27)
				USD-LIBOR)	4.50% 30 year Fannie
					Mae pools
	736,235	—	1/12/39	(6.00%) 1 month	Synthetic MBX Index	(3,116)
				USD-LIBOR	6.00% 30 year Fannie
					Mae pools
	529,985	—	1/12/38	6.50% (1 month	Synthetic TRS Index	(875)
				USD-LIBOR)	6.50% 30 year Fannie
					Mae pools
	1,195,793	—	1/12/43	(3.50%) 1 month	Synthetic TRS Index	(6,444)
				USD-LIBOR	3.50% 30 year Fannie
					Mae pools
	2,647,938	—	1/12/39	(5.50%) 1 month	Synthetic MBX Index	(8,048)
				USD-LIBOR	5.50% 30 year Fannie
					Mae pools
	1,643,275	—	1/12/40	5.00% (1 month	Synthetic MBX Index	(55)
				USD-LIBOR)	5.00% 30 year Fannie
					Mae pools
	11,304,543	—	1/12/41	5.00% (1 month	Synthetic MBX Index	15,511
				USD-LIBOR)	5.00% 30 year Fannie
					Mae pools
	11,975,043	—	1/12/38	(6.50%) 1 month	Synthetic MBX Index	(63,125)
				USD-LIBOR	6.50% 30 year Fannie
					Mae pools
Citibank, N.A.
	845,655	—	1/12/41	5.00% (1 month	Synthetic MBX Index	1,160
				USD-LIBOR)	5.00% 30 year Fannie
					Mae pools
	400,972	—	1/12/41	5.00% (1 month	Synthetic MBX Index	550
				USD-LIBOR)	5.00% 30 year Fannie
					Mae pools
baskets	1,221	—	12/16/16	(3 month USD-	A basket (CGPUTQL2)	(1,729,107)
				LIBOR-BBA plus	of common stocks
				0.37%)
baskets	782,715	—	11/10/16	3 month USD-	A basket (CGPUTS50)	2,383,011
				LIBOR-BBA minus	of common stocks
				0.75%
units	106,667	—	3/17/17	3 month USD-	MSCI Emerging	(286,925)
				LIBOR-BBA minus	Markets TR Net USD
				0.14%

Absolute Return 700 Fund   53 

OTC TOTAL RETURN SWAP CONTRACTS OUTSTANDING at 10/31/16 cont.
		Upfront		Payments	Total return	Unrealized
Swap counterparty/		premium	Termination	received (paid) by	received by	appreciation/
Notional amount		received (paid)	date	fund per annum	or paid by fund	(depreciation)
Citibank, N.A. cont.
units	26,539	$—	11/23/16	3 month USD-	Russell 1000 Total	$4,711,696
				LIBOR-BBA minus	Return Index
				0.05%
units	40,605	—	10/17/17	3 month USD-	MSCI Emerging	(155,773)
				LIBOR-BBA plus	Markets TR Net USD
				0.28%
Credit Suisse International
	$505,321	—	1/12/41	5.00% (1 month	Synthetic MBX Index	693
				USD-LIBOR)	5.00% 30 year Fannie
					Mae pools
	766,468	—	1/12/41	4.00% (1 month	Synthetic TRS Index	4,451
				USD-LIBOR)	4.00% 30 year Fannie
					Mae pools
	432,317	—	1/12/43	3.50% (1 month	Synthetic TRS Index	2,330
				USD-LIBOR)	3.50% 30 year Fannie
					Mae pools
	2,391,586	—	1/12/43	3.50% (1 month	Synthetic TRS Index	12,888
				USD-LIBOR)	3.50% 30 year Fannie
					Mae pools
	109,068	—	1/12/43	3.50% (1 month	Synthetic TRS Index	588
				USD-LIBOR)	3.50% 30 year Fannie
					Mae pools
	95,809	—	1/12/41	4.00% (1 month	Synthetic TRS Index	556
				USD-LIBOR)	4.00% 30 year Fannie
					Mae pools
	4,913,267	—	1/12/45	4.00% (1 month	Synthetic TRS Index	29,314
				USD-LIBOR)	4.00% 30 year Fannie
					Mae pools
	546,463	—	1/12/45	4.00% (1 month	Synthetic TRS Index	3,260
				USD-LIBOR)	4.00% 30 year Fannie
					Mae pools
	3,508,265	—	1/12/45	3.50% (1 month	Synthetic TRS Index	20,571
				USD-LIBOR)	3.50% 30 year Fannie
					Mae pools
	2,114,268	—	1/12/41	(4.00%) 1 month	Synthetic TRS Index	(12,278)
				USD-LIBOR	4.00% 30 year Fannie
					Mae pools
Deutsche Bank AG
baskets	531,345	—	10/24/17	3 month USD-	A basket (DBCT14SP)	(58,545)
				LIBOR-BBA minus	of common stocks
				0.45%
baskets	531,071	—	10/24/17	(3 month USD-	A basket (DBCTPL8P)	315,491
				LIBOR-BBA plus	of common stocks
				0.31%)
Goldman Sachs International
	$570,079	—	1/12/38	6.50% (1 month	Synthetic TRS Index	(941)
				USD-LIBOR)	6.50% 30 year Fannie
					Mae pools

54   Absolute Return 700 Fund 

OTC TOTAL RETURN SWAP CONTRACTS OUTSTANDING at 10/31/16 cont.
	Upfront		Payments	Total return	Unrealized
Swap counterparty/	premium	Termination	received (paid) by	received by	appreciation/
Notional amount	received (paid)	date	fund per annum	or paid by fund	(depreciation)
Goldman Sachs International cont.
$439,774	$—	1/12/38	6.50% (1 month	Synthetic TRS Index	$(726)
			USD-LIBOR)	6.50% 30 year Fannie
				Mae pools
1,393,041	—	1/12/39	6.00% (1 month	Synthetic TRS Index	2,786
			USD-LIBOR)	6.00% 30 year Fannie
				Mae pools
793,210	—	1/12/38	6.50% (1 month	Synthetic TRS Index	(1,309)
			USD-LIBOR)	6.50% 30 year Fannie
				Mae pools
583,201	—	1/12/38	(6.50%) 1 month	Synthetic MBX Index	(3,074)
			USD-LIBOR	6.50% 30 year Fannie
				Mae pools
219,112	—	1/12/38	(6.50%) 1 month	Synthetic MBX Index	(1,155)
			USD-LIBOR	6.50% 30 year Fannie
				Mae pools
6,114	—	1/12/39	6.00% (1 month	Synthetic TRS Index	12
			USD-LIBOR)	6.00% 30 year Fannie
				Mae pools
539,463	—	1/12/39	6.00% (1 month	Synthetic TRS Index	1,079
			USD-LIBOR)	6.00% 30 year Fannie
				Mae pools
798,924	—	1/12/38	(6.50%) 1 month	Synthetic MBX Index	(4,211)
			USD-LIBOR	6.50% 30 year Fannie
				Mae pools
41,450	—	1/12/38	(6.50%) 1 month	Synthetic MBX Index	(219)
			USD-LIBOR	6.50% 30 year Fannie
				Mae pools
110,500	—	1/12/38	(6.50%) 1 month	Synthetic MBX Index	(582)
			USD-LIBOR	6.50% 30 year Fannie
				Mae pools
14,575	—	1/12/38	6.50% (1 month	Synthetic TRS Index	(24)
			USD-LIBOR)	6.50% 30 year Fannie
				Mae pools
624,748	—	1/12/38	6.50% (1 month	Synthetic TRS Index	(1,031)
			USD-LIBOR)	6.50% 30 year Fannie
				Mae pools
1,012,104	—	1/12/39	6.00% (1 month	Synthetic TRS Index	2,024
			USD-LIBOR)	6.00% 30 year Fannie
				Mae pools
125,960	—	1/12/41	4.00% (1 month	Synthetic TRS Index	731
			USD-LIBOR)	4.00% 30 year Fannie
				Mae pools
3,508,754	—	1/12/45	4.00% (1 month	Synthetic TRS Index	20,935
			USD-LIBOR)	4.00% 30 year Fannie
				Mae pools
1,737,178	—	1/12/43	(3.50%) 1 month	Synthetic TRS Index	(9,361)
			USD-LIBOR	3.50% 30 year Fannie
				Mae pools

Absolute Return 700 Fund   55 

OTC TOTAL RETURN SWAP CONTRACTS OUTSTANDING at 10/31/16 cont.
		Upfront		Payments	Total return	Unrealized
Swap counterparty/		premium	Termination	received (paid) by	received by	appreciation/
Notional amount		received (paid)	date	fund per annum	or paid by fund	(depreciation)
Goldman Sachs International cont.
	$2,300,616	$—	1/12/44	(3.00%) 1 month	Synthetic TRS Index	$(9,996)
				USD-LIBOR	3.00% 30 year Fannie
					Mae pools
baskets	2,284,023	—	12/15/20	(1 month USD-	A basket (GSCBPUR1)	(1,184,958)
				LIBOR-BBA plus	of common stocks
				0.44%)
units	598,021	—	12/15/20	(0.45%)	Goldman Sachs	556,275
					Volatility Carry US
					Scaled 3x Excess
					Return Strategy
units	18,233	—	12/12/16	1 month USD-	MSCI Emerging	(71,851)
				LIBOR-BBA minus	Markets TR Net USD
				0.17%
units	532,837	—	12/15/20	(0.45%)	Goldman Sachs	562,147
					Volatility Carry US
					Series 30 Excess
					Return Strategy
JPMorgan Chase Bank N.A.
	$861,995	—	1/12/41	4.00% (1 month	Synthetic TRS Index	5,006
				USD-LIBOR)	4.00% 30 year Fannie
					Mae pools
	264,037	—	1/12/41	4.00% (1 month	Synthetic TRS Index	1,533
				USD-LIBOR)	4.00% 30 year Fannie
					Mae pools
baskets	2,230,840	—	4/25/16	3 month USD-	A basket (JPCMPTSH)	7,504,269
				LIBOR-BBA minus	of common stocks
				0.44%
JPMorgan Securities LLC
	$1,824,114	—	1/12/44	4.00% (1 month	Synthetic TRS Index	10,312
				USD-LIBOR)	4.00% 30 year Fannie
					Mae pools
	1,052,479	—	1/12/45	(3.50%) 1 month	Synthetic TRS Index	(6,171)
				USD-LIBOR	3.50% 30 year Fannie
					Mae pools
	1,824,114	—	1/12/44	(4.00%) 1 month	Synthetic TRS Index	(10,312)
				USD-LIBOR	4.00% 30 year Fannie
					Mae pools
	2,242,121	—	1/12/45	(4.00%) 1 month	Synthetic TRS Index	(13,376)
				USD-LIBOR	4.00% 30 year Fannie
					Mae pools
UBS AG
units	334,533	—	8/21/17	1 month USD-	MSCI Emerging	1,428,406
				LIBOR-BBA plus	Markets TR Net USD
				0.35%
Total		$—				$14,859,644

56   Absolute Return 700 Fund 

OTC CREDIT DEFAULT CONTRACTS OUTSTANDING at 10/31/16
		Upfront			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
CMBX NA BBB– Index	BBB–/P	$2,153	$383,000	1/17/47	300 bp	$(30,179)
Credit Suisse International
CMBX NA BB Index	—	(30,173)	215,000	1/17/47	(500 bp)	3,029
CMBX NA BB Index	—	(150,100)	8,504,000	5/11/63	(500 bp)	1,154,650
CMBX NA BBB– Index	BBB–/P	5,156,523	69,763,000	1/17/47	300 bp	(732,637)
Goldman Sachs International
CMBX NA BB Index	—	(457,279)	4,470,000	5/11/63	(500 bp)	228,545
CMBX NA BB Index	—	(89,586)	592,000	1/17/47	(500 bp)	1,835
CMBX NA BBB– Index	BBB–/P	43,204	871,000	5/11/63	300 bp	(27,623)
CMBX NA BBB– Index	BBB–/P	54,404	1,043,000	5/11/63	300 bp	(30,410)
CMBX NA BBB– Index	BBB–/P	635,077	8,592,000	1/17/47	300 bp	(90,231)
CMBX NA BBB– Index	BBB–/P	972,743	13,956,000	1/17/47	300 bp	(205,377)
Total		$6,136,966				$271,602

* 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 October 31, 2016. Securities rated by Fitch are indicated by “/F.” Securities rated by Putnam are indicated by “/P.” The Putnam rating categories are comparable to the Standard & Poor’s classifications.

CENTRALLY CLEARED CREDIT DEFAULT CONTRACTS OUTSTANDING at 10/31/16
	Upfront			Payments
	premium		Termi-	received	Unrealized
	received	Notional	nation	(paid) by fund	appreciation/
Referenced debt* Rating***	(paid)**	amount	date	per annum	(depreciation)
NA HY Series 27 Index B+/P	$1,929,805	$54,709,000	12/20/21	500 bp	$(166,492)
Total	$1,929,805				$(166,492)

* 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 October 31, 2016. Securities rated by Fitch are indicated by “/F.” Securities rated by Putnam are indicated by “/P.” The Putnam rating categories are comparable to the Standard & Poor’s classifications.

Absolute Return 700 Fund   57 

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:

		Valuation inputs
Investments in securities:	Level 1	Level 2	Level 3
Common stocks *:
Basic materials	$10,967,201	$15,677,107	$—­
Capital goods	23,293,213	4,089,667	—­
Communication services	30,385,698	5,640,613	—­
Consumer cyclicals	44,505,851	3,473,048	—­
Consumer staples	36,018,160	5,651,945	—­
Energy	19,123,112	3,510,167	—­
Financials	62,510,314	30,393,650	—­
Health care	37,433,858	357,139	—­
Technology	52,969,959	25,435,528	—­
Transportation	6,121,591	4,477,166	—­
Utilities and power	13,256,908	6,726,970	—­
Total common stocks	336,585,865	105,433,000	—­
Commodity linked notes	—­	144,680,840	—­
Convertible bonds and notes	—­	448,305	—­
Corporate bonds and notes	—­	112,590,444	3,240
Foreign government and agency bonds and notes	—	14,148,293	—
Investment companies	93,751,331	—­	—­
Mortgage-backed securities	—­	145,015,922	—­
Purchased options outstanding	—­	5,312,584	—­
Senior loans	—­	51,673,223	—­
U.S. government and agency mortgage obligations	—­	455,572,416	—­
Warrants	22,105	25,363,825	—­
Short-term investments	140,921,869	97,097,434	—­
Totals by level	$571,281,170	$1,157,336,286	$3,240

58   Absolute Return 700 Fund 

		Valuation inputs
Other financial instruments:	Level 1	Level 2	Level 3
Forward currency contracts	$—­	$1,594,811	$—­
Futures contracts	(2,230,593)	—­	—­
Written options outstanding	—­	(101,354)	—­
Written swap options outstanding	—­	(747,812)	—­
TBA sale commitments	—­	(200,633,268)	—­
Interest rate swap contracts	—­	(625,249)	—­
Total return swap contracts	—­	14,859,644	—­
Credit default contracts	—­	(7,961,661)	—­
Totals by level	$(2,230,593)	$(193,614,889)	$—­

* Common stock classifications are presented at the sector level, which may differ from the fund’s portfolio presentation.

During the reporting period, transfers within the fair value hierarchy, if any (other than certain transfers involving non-U.S. equity securities as described in Note 1), did not represent, in the aggregate, more than 1% of the fund’s net assets measured as of the end of the period. Transfers are accounted for using the end of period pricing valuation method.

The following is a reconciliation of Level 3 assets as of the close of the reporting period:

				Change in net
				unrealized			Total	Total
	Balance	Accrued		appreciation/		transfers		transfers	Balance
Investments	as of	discounts/	Realized	(deprecia-	Cost of	Proceeds	into	out of	as of
in securities:	10/31/15	premiums	gain/(loss)	tion) #	purchases	from sales	Level 3†	Level 3†	10/31/16
Asset-backed
securities	$6,477,000	$—­	$—­	$—­	$—­	$(6,477,000)	$—­	$—­	$—­
Corporate bonds
and notes	$—­	—­	—­	3,240	—­	—­	—­	—­	$3,240
Mortgage-backed
securities	$14,343,168	(1,740,336)	5,134	(135,246)	—­	(406,464)	—­	(12,066,256)	$—­
Totals	$20,820,168	$(1,740,336)	$5,134	$(132,006)	$—­	$(6,883,464)	$—	­ $(12,066,256)	$3,240

^† Transfers during the reporting period are accounted for using the end of period market value and did not represent, in the aggregate, more than 1% of the fund’s net assets measured as of the end of the period.

^# Includes $3,240 related to Level 3 securities still held at period end. Total change in unrealized appreciation/ (depreciation) for securities (including Level 1 and Level 2) can be found in the Statement of operations.

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

Absolute Return 700 Fund   59 

Statement of assets and liabilities 10/31/16

ASSETS
Investment in securities, at value, including $52,474,282 of securities on loan (Note 1):
Unaffiliated issuers (identified cost $1,522,298,923)	$1,555,057,202
Affiliated issuers (identified cost $173,563,494) (Notes 1 and 5)	173,563,494
Foreign currency (cost $2,210,446) (Note 1)	2,214,474
Dividends, interest and other receivables	5,668,677
Receivable for shares of the fund sold	1,980,195
Receivable for investments sold	8,200,301
Receivable for sales of delayed delivery securities (Note 1)	156,706,211
Receivable for variation margin (Note 1)	2,976,285
Unrealized appreciation on forward currency contracts (Note 1)	3,240,507
Unrealized appreciation on OTC swap contracts (Note 1)	22,887,393
Premium paid on OTC swap contracts (Note 1)	727,138
Prepaid assets	26,425
Total assets	1,933,248,302
LIABILITIES
Payable to custodian	335,667
Payable for investments purchased	4,128,351
Payable for purchases of delayed delivery securities (Note 1)	405,436,480
Payable for shares of the fund repurchased	5,479,147
Payable for compensation of Manager (Note 2)	731,616
Payable for custodian fees (Note 2)	147,385
Payable for investor servicing fees (Note 2)	294,493
Payable for Trustee compensation and expenses (Note 2)	122,660
Payable for administrative services (Note 2)	2,370
Payable for distribution fees (Note 2)	257,880
Payable for variation margin (Note 1)	1,702,267
Unrealized depreciation on OTC swap contracts (Note 1)	7,756,147
Premium received on OTC swap contracts (Note 1)	6,864,104
Unrealized depreciation on forward currency contracts (Note 1)	1,645,696
Written options outstanding, at value (premiums $1,965,377) (Notes 1 and 3)	849,166
TBA sale commitments, at value (proceeds receivable $201,291,641) (Note 1)	200,633,268
Collateral on securities loaned, at value (Note 1)	53,420,625
Collateral on certain derivative contracts, at value (Note 1)	20,905,447
Other accrued expenses	266,782
Total liabilities	710,979,551
Net assets	$1,222,268,751

(Continued on next page)

60   Absolute Return 700 Fund 

Statement of assets and liabilities cont.

REPRESENTED BY
Paid-in capital (Unlimited shares authorized) (Notes 1 and 4)	$1,251,177,496
Distributions in excess of net investment income (Note 1)	(17,670,682)
Accumulated net realized loss on investments and foreign currency transactions (Note 1)	(58,015,460)
Net unrealized appreciation of investments and assets and liabilities in foreign currencies	46,777,397
Total — Representing net assets applicable to capital shares outstanding	$1,222,268,751
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE
Net asset value and redemption price per class A share
($316,497,440 divided by 28,049,483 shares)	$11.28
Offering price per class A share (100/94.25 of $11.28)*	$11.97
Net asset value and offering price per class B share ($28,631,808 divided by 2,599,594 shares)**	$11.01
Net asset value and offering price per class C share ($186,452,358 divided by 16,963,049 shares)**	$10.99
Net asset value and redemption price per class M share ($6,815,254 divided by 615,023 shares)	$11.08
Offering price per class M share (100/96.50 of $11.08)*	$11.48
Net asset value, offering price and redemption price per class P share
($71,489,379 divided by 6,319,734 shares)**	$11.31
Net asset value, offering price and redemption price per class R share
($1,860,911 divided by 166,872 shares)	$11.15
Net asset value, offering price and redemption price per class R6 share
($7,817,262 divided by 688,796 shares)	$11.35
Net asset value, offering price and redemption price per class Y share
($602,704,339 divided by 53,292,284 shares)	$11.31

*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.

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

Absolute Return 700 Fund   61 

Statement of operations Year ended 10/31/16

INVESTMENT INCOME
Interest (including interest income of $755,961 from investments in affiliated issuers) (Note 5)	$27,645,567
Dividends (net of foreign tax of $686,695)	17,625,262
Total investment income	45,270,829
EXPENSES
Compensation of Manager (Note 2)	9,599,073
Investor servicing fees (Note 2)	1,797,741
Custodian fees (Note 2)	292,816
Trustee compensation and expenses (Note 2)	88,693
Distribution fees (Note 2)	3,324,982
Administrative services (Note 2)	37,802
Other	660,502
Fees waived and reimbursed by Manager (Note 2)	(13,737)
Total expenses	15,787,872
Expense reduction (Note 2)	(28,985)
Net expenses	15,758,887
Net investment income	29,511,942
Net realized loss on investments (Notes 1 and 3)	(71,523,016)
Net increase from payments by affiliates (Note 2)	2,817
Net realized loss on swap contracts (Note 1)	(44,919,808)
Net realized gain on futures contracts (Note 1)	7,482,976
Net realized loss on foreign currency transactions (Note 1)	(2,159,793)
Net realized gain on written options (Notes 1 and 3)	2,064,480
Net unrealized appreciation of assets and liabilities in foreign currencies during the year	1,046,392
Net unrealized appreciation of investments, futures contracts, swap contracts, written options,
and TBA sale commitments during the year	48,388,315
Net loss on investments	(59,617,637)
Net decrease in net assets resulting from operations	$(30,105,695)

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

62   Absolute Return 700 Fund 

Statement of changes in net assets

INCREASE (DECREASE) IN NET ASSETS	Year ended 10/31/16	Year ended 10/31/15
Operations
Net investment income	$29,511,942	$20,184,990
Net realized gain (loss) on investments
and foreign currency transactions	(109,052,344)	105,665,575
Net unrealized appreciation (depreciation) of investments
and assets and liabilities in foreign currencies	49,434,707	(80,961,244)
Net increase (decrease) in net assets resulting
from operations	(30,105,695)	44,889,321
Distributions to shareholders (Note 1):
From ordinary income
Net investment income
Class A	(27,122,833)	(4,757,439)
Class B	(1,771,864)	(215,484)
Class C	(12,838,661)	(1,330,345)
Class M	(440,269)	(55,120)
Class P	—	—
Class R	(113,951)	(23,421)
Class R5	(758)	(197)
Class R6	(535,552)	(122,131)
Class Y	(50,507,218)	(10,035,024)
From net realized long-term gain on investments
Class A	(4,184,485)	(14,604,207)
Class B	(308,195)	(1,295,170)
Class C	(2,189,965)	(7,440,380)
Class M	(72,511)	(238,433)
Class R	(18,332)	(84,957)
Class R5	(113)	(502)
Class R6	(79,090)	(303,202)
Class Y	(7,530,467)	(25,810,809)
From return of capital
Class A	(750,198)	—
Class B	(49,008)	—
Class C	(355,108)	—
Class M	(12,177)	—
Class R	(3,152)	—
Class R5	(21)	—
Class R6	(14,813)	—
Class Y	(1,396,992)	—
Increase (decrease) from capital share transactions (Note 4)	(76,126,905)	364,116,512
Total increase (decrease) in net assets	(216,528,333)	342,689,012
NET ASSETS
Beginning of year	1,438,797,084	1,096,108,072
End of year (including distributions in excess of net investment
income of $17,670,682 and undistributed net investment income
of $68,190,173, respectively)	$1,222,268,751	$1,438,797,084

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

Absolute Return 700 Fund   63 

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

INVESTMENT OPERATIONS

LESS DISTRIBUTIONS

RATIOS AND SUPPLEMENTAL DATA

Ratio

Ratio of net

Net asset

Net realized

From

of expenses

investment

value,

and unrealized

Total from

From

net realized

From

Net asset

Total return

Net assets,

to average

income (loss)

Portfolio

beginning

Net investment

gain (loss)

investment

net investment

gain on

return

Total

value, end

at net asset

end of period

net assets

to average

turnover

Period ended­

of period­

income (loss) a

on investments­

operations­

income­

investments­

of capital­

distributions

of period­

value (%) b

(in thousands)

(%) c

net assets (%)

(%)

Class A­

October 31, 2016­

$12.45­

.25­

(.50)

(.25)

(.78)

(.12)

(.02)

(.92)

$11.28­

(1.81)

$316,497­

1.19­d

2.21­d

578­f

October 31, 2015­

12.71­

.20­

.30­

.50­

(.19)

(.57)

—­

(.76)

12.45­

4.04­

424,484­

1.26­

1.60­

563­f

October 31, 2014­

12.17­

.20­

.48­

.68­

(.14)

—­

—­

(.14)

12.71­

5.65­

328,250­

1.24­

1.63­

313­f

October 31, 2013­

11.78­

.24­

.16­

.40­

(.01)

—­

—­

(.01)

12.17­

3.42­

346,385­

1.25­

2.04­

199­g

October 31, 2012­

11.35­

.21­

.66­

.87­

(.44)

—­

—­

(.44)

11.78­

7.97­

331,370­

1.33­e

1.82­e

164­g

Class B­

October 31, 2016­

$12.16­

.16­

(.47)

(.31)

(.70)

(.12)

(.02)

(.84)

$11.01­

(2.50)

$28,632­

1.94­d

1.45­d

578­f

October 31, 2015­

12.44­

.10­

.29­

.39­

(.10)

(.57)

—­

(.67)

12.16­

3.18­

30,905­

2.01­

.85­

563­f

October 31, 2014­

11.91­

.11­

.47­

.58­

(.05)

—­

—­

(.05)

12.44­

4.92­

28,072­

1.99­

.88­

313­f

October 31, 2013­

11.60­

.15­

.16­

.31­

—­

—­

—­

—­

11.91­

2.67­

28,175­

2.00­

1.29­

199­g

October 31, 2012­

11.19­

.12­

.65­

.77­

(.36)

—­

—­

(.36)

11.60­

7.13­

26,015­

2.08­e

1.06­e

164­g

Class C­

October 31, 2016­

$12.16­

.16­

(.48)

(.32)

(.71)

(.12)

(.02)

(.85)

$10.99­

(2.54)

$186,452­

1.94­d

1.46­d

578­f

October 31, 2015­

12.44­

.10­

.29­

.39­

(.10)

(.57)

—­

(.67)

12.16­

3.24­

210,619­

2.01­

.85­

563­f

October 31, 2014­

11.91­

.11­

.47­

.58­

(.05)

—­

—­

(.05)

12.44­

4.91­

160,682­

1.99­

.88­

313­f

October 31, 2013­

11.60­

.15­

.16­

.31­

—­

—­

—­

—­

11.91­

2.67­

148,531­

2.00­

1.29­

199­g

October 31, 2012­

11.19­

.12­

.65­

.77­

(.36)

—­

—­

(.36)

11.60­

7.16­

138,619­

2.08­e

1.06­e

164­g

Class M­

October 31, 2016­

$12.25­

.19­

(.49)

(.30)

(.73)

(.12)

(.02)

(.87)

$11.08­

(2.30)

$6,815­

1.69­d

1.70­d

578­f

October 31, 2015­

12.52­

.14­

.29­

.43­

(.13)

(.57)

—­

(.70)

12.25­

3.55­

7,146­

1.76­

1.10­

563­f

October 31, 2014­

11.99­

.14­

.47­

.61­

(.08)

—­

—­

(.08)

12.52­

5.12­

5,286­

1.74­

1.12­

313­f

October 31, 2013­

11.65­

.18­

.16­

.34­

—­

—­

—­

—­

11.99­

2.92­

4,535­

1.75­

1.53­

199­g

October 31, 2012­

11.23­

.15­

.65­

.80­

(.38)

—­

—­

(.38)

11.65­

7.40­

4,105­

1.83­e

1.31­e

164­g

Class P­

October 31, 2016#

$11.25­

.04­

.02

.06­

—­

—­

—­

—­

11.31­

.53*

$71,489­

.14*

.39*

578­f

Class R­

October 31, 2016­

$12.31­

.22­

(.49)

(.27)

(.75)

(.12)

(.02)

(.89)

$11.15­

(2.05)

$1,861­

1.44­d

1.96­d

578­f

October 31, 2015­

12.57­

.17­

.30­

.47­

(.16)

(.57)

—­

(.73)

12.31­

3.84­

1,564­

1.51­

1.34­

563­f

October 31, 2014­

12.04­

.17­

.48­

.65­

(.12)

—­

—­

(.12)

12.57­

5.40­

1,848­

1.49­

1.39­

313­f

October 31, 2013­

11.68­

.21­

.15­

.36­

—­h

—­

—­

—­h

12.04­

3.11­

2,005­

1.50­

1.77­

199­g

October 31, 2012­

11.25­

.17­

.67­

.84­

(.41)

—­

—­

(.41)

11.68­

7.77­

1,235­

1.58­e

1.52­e

164­g

Class R6­

October 31, 2016­

$12.51­

.29­

(.49)

(.20)

(.82)

(.12)

(.02)

(.96)

$11.35­

(1.40)

$7,817­

.85­d

2.54­d

578­f

October 31, 2015­

12.77­

.24­

.30­

.54­

(.23)

(.57)

—­

(.80)

12.51­

4.39­

8,237­

.93­

1.93­

563­f

October 31, 2014­

12.23­

.24­

.48­

.72­

(.18)

—­

—­

(.18)

12.77­

5.97­

6,678­

.91­

1.96­

313­f

October 31, 2013­

11.81­

.25­

.20­

.45­

(.03)

—­

—­

(.03)

12.23­

3.79­

6,500­

.92­

2.09­

199­g

October 31, 2012†

11.56­

.07­

.18­

.25­

—­

—­

—­

—­

11.81­

2.16*

10­

.31*e

.58*e

164­g

Class Y­

October 31, 2016­

$12.47­

.28­

(.49)

(.21)

(.81)

(.12)

(.02)

(.95)

$11.31­

(1.48)

$602,704­

.94­d

2.47­d

578­f

October 31, 2015­

12.74­

.23­

.29­

.52­

(.22)

(.57)

—­

(.79)

12.47­

4.25­

755,830­

1.01­

1.85­

563­f

October 31, 2014­

12.20­

.23­

.49­

.72­

(.18)

—­

—­

(.18)

12.74­

5.93­

565,281­

.99­

1.88­

313­f

October 31, 2013­

11.81­

.27­

.16­

.43­

(.04)

—­

—­

(.04)

12.20­

3.67­

464,035­

1.00­

2.27­

199­g

October 31, 2012­

11.37­

.23­

.67­

.90­

(.46)

—­

—­

(.46)

11.81­

8.31­

283,356­

1.08­e

2.04­e

164­g

See notes to financial highlights at the end of this section.

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

64   Absolute Return 700 Fund  Absolute Return 700 Fund   65 

Financial highlights cont.

^* Not annualized.

^# For the period August 31, 2016 (commencement of operations) to October 31, 2016.

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

^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 and/or brokerage service arrangements, if any (Note 2). Also excludes acquired fund fees and expenses, if any.

^d Reflects a voluntary waiver of certain fund expenses in effect during the period. As a result of such waivers, the expenses of each class reflect a reduction of the following amounts as a percentage of average net assets (Note 2):

	10/31/16
Class A	<0.01%
Class B	<0.01
Class C	<0.01
Class M	<0.01
Class R	<0.01
Class P	—
Class R6	<0.01
Class Y	<0.01

^e 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):

	10/31/12
Class A	0.05%
Class B	0.05
Class C	0.05
Class M	0.05
Class R	0.05
Class R6	—
Class Y	0.05

^f Portfolio turnover includes TBA purchase and sale commitments.

^g Portfolio turnover excludes TBA purchase and sale commitments. Including TBA purchase and sale commitments to conform with current year presentation, the portfolio turnover would have been the following:

	Portfolio turnover %
October 31, 2013	463%
October 31, 2012	487

^h Amount represents less than $0.01 per share.

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

66   Absolute Return 700 Fund 

Notes to financial statements 10/31/16

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 November 1, 2015 through October, 31 2016.

Putnam Absolute Return 700 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 goal of the fund is to seek to earn a positive total return that exceeds the return on U.S. Treasury bills by 700 basis points (or 7.00%) on an annualized basis over a reasonable period of time (generally at least three years or more) regardless of market conditions. The fund is designed to pursue a consistent absolute return by combining two independent investment strategies — a beta strategy, which provides broad exposure to investment markets, and an alpha strategy, which seeks returns from active trading. The beta strategy seeks to balance risk and to provide positive total return by investing, without limit, in many different asset classes, including U.S., international, and emerging markets equity securities (growth or value stocks or both) and fixed-income securities; mortgage- and asset-backed securities; below-investment-grade securities (sometimes referred to as “junk bonds”); inflation-protected securities; commodities; and real estate investment trusts (REITs). The alpha strategy involves the potential use of active trading strategies designed to provide additional total return through active security selection, tactical asset allocation, currency transactions and options transactions. In pursuing a consistent absolute return, the fund’s strategies are also generally intended to produce lower volatility over a reasonable period of time than has been historically associated with traditional asset classes that have earned similar levels of return over long historical periods. These traditional asset classes might include, for example, equities or equity-like investments.

Putnam Management may consider, among other factors, a company’s valuation, financial strength, growth potential, competitive position in its industry, projected future earnings, cash flows and dividends when deciding whether to buy or sell equity investments, and, among other factors, credit, interest rate and prepayment risks when deciding whether to buy or sell fixed-income investments. Putnam Management may also take into account general market conditions when making investment decisions. Putnam Management typically uses derivatives, such as futures, options, certain foreign currency transactions, warrants and swap contracts, to a significant extent for hedging purposes and to increase the fund’s exposure to the asset classes and strategies mentioned above, which may create investment leverage.

The fund offers class A, class B, class C, class M, class P, class R, class R6 and class Y shares. The fund began offering class P shares on August 31, 2016. Class A and class M shares are sold with a maximum front-end sales charge of 5.75% and 3.50%, respectively. Class A shares generally are not subject to a contingent deferred sales charge, and class M, class P, class R6 and class Y shares are not subject to a contingent deferred sales charge. Class B shares, which convert to class A shares after approximately eight years, are not subject to 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 are subject to 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 P, 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 P and class R6 shares, bear a lower investor servicing fee, which is identified in Note 2. Class P, class R6 and class Y shares are not available to all investors. Effective February 1, 2016, the fund liquidated its class R5 shares.

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.

The fund has entered into contractual arrangements with an investment adviser, administrator, distributor, shareholder servicing agent and custodian, who each provide services to the fund. Unless expressly stated otherwise, shareholders are not parties to, or intended beneficiaries of these contractual arrangements, and these contractual arrangements are not intended to create any shareholder right to enforce them against the service providers or to seek any remedy under them against the service providers, either directly or on behalf of the fund.

Absolute Return 700 Fund   67 

Under the fund’s Declaration of Trust, any claims asserted against or on behalf of the Putnam Funds, including claims against Trustees and Officers, must be brought in state and federal courts located within the Commonwealth of Massachusetts.

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 Portfolio securities and other investments are valued using policies and procedures adopted by the Board of Trustees. The Trustees have formed a Pricing Committee to oversee the implementation of these procedures and have delegated responsibility for valuing the fund’s assets in accordance with these procedures to Putnam Management. Putnam Management has established an internal Valuation Committee that is responsible for making fair value determinations, evaluating the effectiveness of the pricing policies of the fund and reporting to the Pricing Committee.

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 820 Fair Value Measurements and Disclosures (ASC 820). 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 valued 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 (including short-term investments with remaining maturities of 60 days or less) 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 scheduled 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 scheduled close of the New York Stock Exchange. Accordingly, on certain days, the fund will fair value certain foreign equity securities and total return swap contracts 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. The foreign equity 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 and total return swap contracts 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 in accordance with policies and procedures approved by the Trustees. Certain investments,

68   Absolute Return 700 Fund 

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, recovery rates, sales and other multiples and resale restrictions. These securities are classified as Level 2 or as Level 3 depending on the priority of the significant inputs.

To assess the continuing appropriateness of fair valuations, the Valuation Committee reviews and affirms the reasonableness of such valuations on a regular basis after considering all relevant information that is reasonably available. 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 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.

The fund earned certain fees in connection with its senior loan purchasing activities. These fees are treated as market discount and are amortized into income in the Statement of operations.

Securities purchased or sold on a delayed delivery basis may be settled at a future date beyond customary settlement time; interest income is accrued based on the terms of the securities. Losses may arise due to changes in the fair value of the underlying securities or if the counterparty does not perform under the contract.

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

Foreign currency translation The accounting records of the fund are maintained in U.S. dollars. The fair 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 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 returns on securities owned, to enhance the return on a security owned, to gain exposure to securities and to manage downside risks.

Absolute Return 700 Fund   69 

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.

Options on swaps are similar to options on securities except that the premium paid or received is to buy or grant the right to enter into a previously agreed upon interest rate or credit default contract. Forward premium swap option contracts include premiums that have extended settlement dates. The delayed settlement of the premiums is factored into the daily valuation of the option contracts. In the case of interest rate cap and floor contracts, in return for a premium, ongoing payments between two parties are based on interest rates exceeding a specified rate, in the case of a cap contract, or falling below a specified rate in the case of a floor contract.

Written option contracts outstanding at period end, if any, are listed after the fund’s portfolio.

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.

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 to currencies.

The U.S. dollar value of forward currency contracts is determined using current forward currency exchange rates supplied by a quotation service. The fair value of the contract will fluctuate with changes in currency exchange rates. The contract is marked to market daily and the change in fair 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.

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 and centrally cleared interest rate swap can be purchased or sold with an upfront premium. For OTC interest rate swap contracts, 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 settled through a central clearing agent

70   Absolute Return 700 Fund 

and are recorded in variation margin on the Statement of assets and liabilities and recorded as unrealized gain or loss. Payments, including upfront premiums, received or made are recorded as realized gains or losses at the reset date or 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 variation 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.

OTC and centrally cleared interest rate swap contracts outstanding, including their respective notional amounts at period end, if any, are listed after the fund’s portfolio.

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 manage exposure to specific securities, to gain exposure to a basket of securities, 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, including their respective notional amounts at period end, if any, are listed after the fund’s portfolio.

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

In OTC and centrally cleared credit default contracts, the protection buyer typically makes 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. For OTC credit default contracts, 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. Centrally cleared credit default contracts provide the same rights to the protection buyer and seller except the payments between parties, including upfront premiums, are settled through a central clearing agent through variation margin payments. Upfront and periodic payments received or paid by the fund for OTC and centrally cleared credit default contracts are recorded as realized gains or losses at the reset date or close of the contract. The OTC and centrally cleared credit default contracts are marked to market daily based upon quotations from an independent pricing service or market makers. Any change in value of OTC credit default contracts is recorded as an unrealized gain or loss. Daily fluctuations in the value of centrally cleared credit default contracts are recorded in variation margin on the Statement of assets and liabilities and recorded as unrealized gain or loss. Upon the occurrence of a credit event, the difference between the par value and fair value of the reference obligation, net of any proportional amount of the upfront payment, is recorded as a realized gain or loss.

Absolute Return 700 Fund   71 

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 and centrally cleared 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 for OTC credit default contracts by having a master netting arrangement between the fund and the counterparty and for centrally cleared credit default contracts through the daily exchange of variation margin. Counterparty risk is further mitigated with respect to centrally cleared credit default swap contracts due to the clearinghouse guarantee fund and other resources that are available in the event of a clearing member default. 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.

OTC and centrally cleared credit default contracts outstanding, including their respective notional amounts at period end, if any, are listed after the fund’s portfolio.

TBA 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 and par amount have been established, the actual securities have not been specified. 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.

The fund may also enter into TBA sale commitments to hedge its portfolio positions, to sell mortgage-backed securities it owns under delayed delivery arrangements or to take a short position in mortgage-backed securities. Proceeds of TBA sale commitments are not received until the contractual settlement date. During the time a TBA sale commitment is outstanding, either equivalent deliverable securities or an offsetting TBA purchase commitment deliverable on or before the sale commitment date are held as “cover” for the transaction, or other liquid assets in an amount equal to the notional value of the TBA sale commitment are segregated. If the TBA sale commitment is closed through the acquisition of an offsetting TBA purchase commitment, the fund realizes a gain or loss. If the fund delivers securities under the commitment, the fund realizes a gain or a loss from the sale of the securities based upon the unit price established at the date the commitment was entered into.

TBA commitments, which are accounted for as purchase and sale transactions, may be considered securities themselves, and involve a risk of loss due to changes in the value of the security prior to the settlement date as well as the risk that the counterparty to the transaction will not perform its obligations. Counterparty risk is mitigated by having a master agreement between the fund and the counterparty.

Unsettled TBA commitments are valued at their fair value according to the procedures described under “Security valuation” above. The contract is marked to market daily and the change in fair value is recorded by the fund as an unrealized gain or loss. Based on market circumstances, Putnam Management will determine whether to take delivery of the underlying securities or to dispose of the TBA commitments prior to settlement.

TBA purchase commitments outstanding at period end, if any, are listed within the fund’s portfolio and TBA sale commitments outstanding at period end, if any, are listed after the fund’s portfolio.

Master agreements The fund is a party to ISDA (International Swaps and Derivatives Association, Inc.) Master Agreements that govern OTC derivative and foreign exchange contracts and Master Securities Forward Transaction Agreements that govern transactions involving mortgage-backed and other asset-backed securities that may result in delayed delivery (Master Agreements) with certain counterparties 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 posted to the fund which cannot be sold or repledged totaled $1,232,306 at the close of the reporting period.

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.

72   Absolute Return 700 Fund 

With respect to ISDA Master Agreements, 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 or 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 $5,975,715 on open derivative contracts subject to the Master Agreements. Collateral posted by the fund at period end for these agreements totaled $6,388,362 and may include amounts related to unsettled agreements.

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 fair value of the securities loaned. The fair value of securities loaned is determined daily and any additional required collateral is allocated to the fund on the next business day. The remaining maturities of the securities lending transactions are considered overnight and continuous. 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, net of expenses, is included in 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 received cash collateral of $53,420,625 and the value of securities loaned amounted to $52,474,282.

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.

Lines of credit The fund participates, along with other Putnam funds, in a $317.5 million unsecured committed line of credit and a $235.5 million unsecured uncommitted line of credit, both provided by State Street. Prior to September 22, 2016, the fund participated in a $392.5 million syndicated unsecured committed line of credit provided by State Street ($292.5 million) and Northern Trust Company ($100 million)  and the same unsecured uncommitted line of credit.  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 higher of (1) the Federal Funds rate and (2) the overnight LIBOR 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 0.04% of the committed line of credit plus a $25,000 flat fee (0.04% prior to September 22, 2016) and 0.04% of the uncommitted line of credit has been paid by the participating funds. In addition, a commitment fee of 0.21% (0.16% prior to September 22, 2016) 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 three fiscal years 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,

Absolute Return 700 Fund   73 

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.

Under the Regulated Investment Company Modernization Act of 2010, the fund will be permitted to carry forward capital losses incurred for an unlimited period and the carry forwards will retain their character as either short-term or long-term capital losses. At October 31, 2016, the fund had the following capital loss carryovers available, to the extent allowed by the Code, to offset future net capital gain, if any:

	Loss carryover
Short-term	Long-term	Total
$53,351,564	$—	$53,351,564

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, from foreign currency gains and losses, from defaulted bond interest, from unrealized gains and losses on certain futures contracts, from net operating loss, from income on swap contracts, from interest-only securities, from distributions in excess, and from a return of capital due to distributions which exceed those required under the excise rules. 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. At the close of the reporting period, the fund reclassified $22,041,691 to increase distributions in excess of net investment income, $22,384,299 to decrease paid-in capital and $44,425,990 to decrease accumulated net realized loss.

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	$74,604,569
Unrealized depreciation	(48,675,773)
Net unrealized appreciation	25,928,796
Capital loss carryforward	(53,531,564)
Cost for federal income tax purposes	$1,702,514,171

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 (base 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 all open-end mutual funds sponsored by Putnam Management (excluding net assets of funds that are invested in, or that are invested in by, other Putnam funds to the extent necessary to avoid “double counting” of those assets). Such annual rates may vary as follows:

1.030%	of the first $5 billion,	0.830%	of the next $50 billion,
0.980%	of the next $5 billion,	0.810%	of the next $50 billion,
0.930%	of the next $10 billion,	0.800%	of the next $100 billion and
0.880%	of the next $10 billion,	0.795%	of any excess thereafter.

The applicable base fee is increased or decreased for each month by an amount based on the performance of the fund. The amount of the increase or decrease is calculated monthly based on a performance adjustment rate that is equal to 0.04 multiplied by the difference between the fund’s annualized performance (measured by the fund’s class A shares) and the annualized performance of the BofA Merrill Lynch U.S. Treasury Bill Index plus 7.00% over the thirty-six month period then ended (the “performance period”). The maximum annualized performance adjustment rate is +/– 0.28%. Each month, the performance adjustment rate is multiplied by the fund’s average net assets over the performance period and the result is divided by twelve. The resulting dollar amount is added

74   Absolute Return 700 Fund 

to, or subtracted from, the base fee for that month. The monthly base fee is determined based on the fund’s average net assets for the month, while the performance adjustment is determined based on the fund’s average net assets over the performance period of up to thirty-six months. This means it is possible that, if the fund underperforms significantly over the performance period, and the fund’s assets have declined significantly over that period, the negative performance adjustment may exceed the base fee. In this event, Putnam Management would make a payment to the fund.

Because the performance adjustment is based on the fund’s performance relative to its applicable benchmark index, and not its absolute performance, the performance adjustment could increase Putnam Management’s fee even if the fund’s shares lose value during the performance period provided that the fund outperformed its benchmark index, and could decrease Putnam Management’s fee even if the fund’s shares increase in value during the performance period provided that the fund underperformed its benchmark index.

For the reporting period, the base fee represented an effective rate (excluding the impact from any expense waivers in effect) of 0.876% of the fund’s average net assets before a decrease of $2,077,431 (0.156% of the fund’s average net assets) based on performance.

Putnam Management has contractually agreed to waive fees (and, to the extent necessary, bear other expenses) of the fund through February 28, 2018, to the extent that the total expenses of the fund (before any applicable performance-based upward or downward adjustments to the fund’s management fee and excluding payments under the fund’s distribution plans, brokerage, interest, taxes, investor servicing fees, investment-related expenses, extraordinary expenses, and acquired fund fees and expenses) would exceed an annual rate of 0.97% of the fund’s average net assets. During the reporting period, the fund’s expenses were not reduced as a result of this limit.

Putnam Management has also contractually agreed, through February 28, 2018, 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 not reduced as a result of this limit.

Putnam Management may from time to time voluntarily undertake to waive fees and/or reimburse certain fund expenses. Any such waiver or reimbursement would be voluntary and may be modified or discontinued by Putnam Management at any time without notice. For the reporting period, Putnam Management voluntarily waived $13,737.

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. PIL did not manage any portion of the assets of the fund during the reporting period. If Putnam Management were to engage the services of PIL, Putnam Management would pay 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 Putnam Advisory Company, LLC (PAC), an affiliate of Putnam Management, is authorized by the Trustees to manage a separate portion of the assets of the fund, as designated from time to time by Putnam Management or PIL. PAC did not manage any portion of the assets of the fund during the reporting period. If Putnam Management or PIL were to engage the services of PAC, Putnam Management or PIL, as applicable, would pay a quarterly sub-advisory fee to PAC for its services at the annual rate of 0.35% of the average net assets of the portion of the fund’s assets for which PAC is engaged as sub-adviser.

Putnam Management has agreed to reimburse the fund $2,817 for a compliance exception which occurred during the reporting period. The effect of the loss incurred and the reimbursement by Putnam Management of such amounts had no material impact on total return.

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 for class A, class B, class C, class M, class R, and class Y shares that included (1) a per account fee for each direct and underlying non-defined

Absolute Return 700 Fund   75 

contribution account (“retail account”) of the fund; (2) a specified rate of the fund’s assets attributable to defined contribution plan accounts; and (3) a specified rate based on the average net assets in retail accounts. Putnam Investor Services has agreed that the aggregate investor servicing fees for each fund’s retail and defined contribution accounts for these share classes will not exceed an annual rate of 0.25% of the fund’s average assets attributable to such accounts. Class P shares paid a monthly fee based on the average net assets of class P shares at an annual rate of 0.01%. Class R5 shares paid a monthly fee based on the average net assets of class R5 shares at an annual rate of 0.12%. Effective February 1, 2016 has liquidated its class R5 shares. Class R6 shares paid a monthly fee based on the average net assets of class R6 shares at an annual rate of 0.05%.

Prior to September 1, 2016, Putnam Investor Services, Inc. received fees for investor servicing for class A, class B, class C, class M, class R, and class Y shares that included (1) a per account fee for each retail account of the fund and each of the other funds in its specified category, which was totaled and then allocated to each fund in the category based on its average daily net assets; (2) a specified rate of the fund’s assets attributable to defined contribution plan accounts; and (3) a specified rate based on the average net assets in retail accounts. Prior to September 1, 2016, Putnam Investor Services had agreed that the aggregate investor servicing fees for each fund’s retail and defined contribution accounts for these share classes would not exceed an annual rate of 0.320% of the fund’s average assets attributable to such accounts.

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

Class A	$508,577	Class R	2,573
Class B	40,554	Class R5	3
Class C	277,447	Class R6	3,962
Class M	9,392	Class Y	954,109
Class P	1,124	Total	$1,797,741

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. The fund also reduced expenses through brokerage/service arrangements. For the reporting period, the fund’s expenses were reduced by $3,035 under the expense offset arrangements and by $25,950 under the brokerage/ service arrangements.

Each Independent Trustee of the fund receives an annual Trustee fee, of which $952, 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

76   Absolute Return 700 Fund 

class R shares, respectively. During the reporting period, the class specific expenses related to distribution fees were as follows:

Class A	$933,521	Class M	51,542
Class B	296,943	Class R	9,409
Class C	2,033,567	Total	$3,324,982

For the reporting period, Putnam Retail Management Limited Partnership, acting as underwriter, received net commissions of $125,755 and $1,490 from the sale of class A and class M shares, respectively, and received $11,659 and $15,292 in contingent deferred sales charges from redemptions of class B and class C shares, respectively.

A deferred sales charge of up to 1.00% is assessed on certain redemptions of class A shares. For the reporting period, Putnam Retail Management Limited Partnership, acting as underwriter, received $588 on class A redemptions.

Note 3: Purchases and sales of securities

During the reporting period, the cost of purchases and the proceeds from sales, excluding short-term investments, were as follows:

	Cost of purchases	Proceeds from sales
Investments in securities, including TBA commitments (Long-term)	$7,885,788,209	$8,062,012,563
U.S. government securities (Long-term)	—	—
Total	$7,885,788,209	$8,062,012,563

The fund may purchase or sell investments from or to other Putnam funds in the ordinary course of business, which can reduce the fund’s transaction costs, at prices determined in accordance with SEC requirements and policies approved by the Trustees. During the reporting period, purchases or sales of long-term securities from or to other Putnam funds, if any, did not represent more than 5% of the fund’s total cost of purchases and/or total proceeds from sales.

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

	Written swap
	option contract	Written swap	Written option	Written option
	amounts	option premiums	contract amounts	premiums
Written options outstanding at the
beginning of the reporting period	$359,703,900	$2,771,131	$9,185,614	$375,089
Options opened	789,354,600	4,513,114	182,086,771	5,604,479
Options exercised	(53,501,000)	(396,686)	—	—
Options expired	(546,576,600)	(1,004,712)	(26,657,532)	(3,830,657)
Options closed	(539,087,900)	(4,121,101)	(163,894,305)	(1,945,280)
Written options outstanding at the
end of the reporting period	$9,893,000	$1,761,746	$720,548	$203,631

Absolute Return 700 Fund   77 

Note 4: Capital shares

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

	YEAR ENDED 10/31/16		YEAR ENDED 10/31/15
Class A	Shares	Amount	Shares	Amount
Shares sold	8,485,535	$96,195,520	14,651,151	$182,222,249
Shares issued in connection with
reinvestment of distributions	2,643,023	29,258,269	1,467,086	17,883,782
	11,128,558	125,453,789	16,118,237	200,106,031
Shares repurchased	(17,181,781)	(192,121,727)	(7,843,842)	(97,635,567)
Net increase (decrease)	(6,053,223)	$(66,667,938)	8,274,395	$102,470,464
	YEAR ENDED 10/31/16		YEAR ENDED 10/31/15
Class B	Shares	Amount	Shares	Amount
Shares sold	323,489	$3,552,976	442,256	$5,403,665
Shares issued in connection with
reinvestment of distributions	187,218	2,036,933	120,767	1,447,992
	510,707	5,589,909	563,023	6,851,657
Shares repurchased	(451,971)	(4,967,560)	(279,664)	(3,418,487)
Net increase	58,736	$622,349	283,359	$3,433,170
	YEAR ENDED 10/31/16		YEAR ENDED 10/31/15
Class C	Shares	Amount	Shares	Amount
Shares sold	3,905,830	$43,522,340	6,221,011	$75,762,490
Shares issued in connection with
reinvestment of distributions	1,261,930	13,691,939	643,103	7,704,376
	5,167,760	57,214,279	6,864,114	83,466,866
Shares repurchased	(5,531,597)	(60,447,293)	(2,458,918)	(29,986,816)
Net increase (decrease)	(363,837)	$(3,233,014)	4,405,196	$53,480,050
	YEAR ENDED 10/31/16		YEAR ENDED 10/31/15
Class M	Shares	Amount	Shares	Amount
Shares sold	136,636	$1,516,928	190,105	$2,330,574
Shares issued in connection with
reinvestment of distributions	47,208	515,511	23,860	287,513
	183,844	2,032,439	213,965	2,618,087
Shares repurchased	(152,423)	(1,678,415)	(52,508)	(641,138)
Net increase	31,421	$354,024	161,457	$1,976,949

	FOR THE PERIOD 8/31/16
	(COMMENCEMENT OF OPERATIONS) TO 10/31/16
Class P	Shares	Amount
Shares sold	7,352,537	$82,848,988
Shares issued in connection with reinvestment of distributions	—	—
	7,352,537	82,848,988
Shares repurchased	(1,032,803)	(11,669,937)
Net increase	6,319,734	$71,179,051

78   Absolute Return 700 Fund 

	YEAR ENDED 10/31/16		YEAR ENDED 10/31/15
Class R	Shares	Amount	Shares	Amount
Shares sold	62,957	$718,135	67,626	$831,699
Shares issued in connection with
reinvestment of distributions	11,740	128,670	8,972	108,378
	74,697	846,805	76,598	940,077
Shares repurchased	(34,948)	(386,053)	(96,445)	(1,179,424)
Net increase (decrease)	39,749	$460,752	(19,847)	$(239,347)
	YEAR ENDED 10/31/16*		YEAR ENDED 10/31/15
Class R5	Shares	Amount	Shares	Amount
Shares sold	—	$—	—	$—
Shares issued in connection with
reinvestment of distributions	80	892	57	698
	80	892	57	698
Shares repurchased	(1,016)	(11,105)	—	—
Net increase (decrease)	(936)	$(10,213)	57	$698
	YEAR ENDED 10/31/16		YEAR ENDED 10/31/15
Class R6	Shares	Amount	Shares	Amount
Shares sold	169,473	$1,885,231	221,045	$2,771,512
Shares issued in connection with
reinvestment of distributions	56,708	629,455	34,806	425,333
	226,181	2,514,686	255,851	3,196,845
Shares repurchased	(195,706)	(2,196,423)	(120,331)	(1,507,936)
Net increase	30,475	$318,263	135,520	$1,688,909
	YEAR ENDED 10/31/16		YEAR ENDED 10/31/15**
Class Y	Shares	Amount	Shares	Amount
Shares sold	34,204,621	$386,945,474	37,918,421	$472,773,490
Shares issued in connection with
reinvestment of distributions	4,778,382	52,896,684	2,564,915	31,266,314
	38,983,003	439,842,158	40,483,336	504,039,804
Shares repurchased	(46,283,292)	(518,992,337)	(24,266,245)	(302,734,185)
Net increase (decrease)	(7,300,289)	$(79,150,179)	16,217,091	$201,305,619

* Effective February 1, 2016, the fund has liquidated its class R5 shares.

**The funds’ October 31, 2015 Shares sold and Shares repurchased have been revised as a result of an immaterial error related to an overstatement of the funds’ subscriptions and redemptions activity.

The previously reported amounts were:

	Shares	Amount
Shares sold	41,212,501	513,819,058
Shares repurchased	(27,560,325)	(343,779,753)

Absolute Return 700 Fund   79 

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

	Shares owned	Percentage of ownership	Value
Class P	889	0.01%	$10,055
Class R6	1,019	0.15	11,566

Note 5: Affiliated transactions

Transactions during the reporting period with any company which is under common ownership or control, or involving securities of companies in which the fund owned at least 5% of the outstanding voting securities, were as follows:

	Fair value at the				Fair value at
	beginning of the			Investment	the end of the
Name of affiliate	reporting period	Purchase cost	Sale proceeds	income	reporting period
Putnam Cash Collateral
Pool, LLC*	$—	$71,773,550	$18,352,925	$—	$53,420,625
Putnam Money Market
Liquidity Fund**	1	3,414,550	3,414,551	52	—
Putnam Short Term
Investment Fund***	115,794,966	801,247,626	796,899,723	755,909	120,142,869
Totals	$115,794,967	$876,435,726	$818,667,199	$755,961	$173,563,494

* No management fees are charged to Putnam Cash Collateral Pool, LLC (See Note 1).

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

***Management fees charged to Putnam Short Term Investment Fund have been waived by Putnam Management.

Note 6: Senior loan commitments

Senior loans are purchased or sold on a when-issued or delayed delivery basis and may be settled a month or more after the trade date, which from time to time can delay the actual investment of available cash balances; interest income is accrued based on the terms of the securities. Senior loans can be acquired through an agent, by assignment from another holder of the loan, or as a participation interest in another holder’s portion of the loan. When the fund invests in a loan or participation, the fund is subject to the risk that an intermediate participant between the fund and the borrower will fail to meet its obligations to the fund, in addition to the risk that the borrower under the loan may default on its obligations.

Note 7: 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.

80   Absolute Return 700 Fund 

Note 8: Summary of derivative activity

The volume of activity for the reporting period for any derivative type that was held during the period is listed below and was based on an average of the holdings at the end of each fiscal quarter:

Purchased equity option contracts (contract amount)	$1,500,000
Purchased TBA commitment option contracts (contract amount)	$13,000,000
Purchased currency options (contract amount)	$—*
Purchased swap option contracts (contract amount)	$137,400,000
Written equity option contracts (contract amount) (Note 3)	$930,000
Written TBA commitment option contracts (contract amount) (Note 3)	$26,000,000
Written swap option contracts (contract amount) (Note 3)	$138,200,000
Futures contracts (number of contracts)	5,000
Forward currency contracts (contract amount)	$436,900,000
Centrally cleared interest rate swap contracts (notional)	$1,817,600,000
OTC total return swap contracts (notional)	$2,287,300,000
OTC credit default contracts (notional)	$163,400,000
Centrally cleared credit default contracts (notional)	$103,100,000
Warrants (number of warrants)	6,000,000

* For the reporting period there were no holdings at the end of each fiscal quarter and the transactions were considered minimal.

The following is a summary of the fair value of derivative instruments as of the close of the reporting period:

Fair value 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	Fair value	liabilities location	Fair value
	Receivables, Net		Payables, Net
	assets — Unrealized		assets — Unrealized
Credit contracts	appreciation	$2,115,197	depreciation	$10,076,858*
Foreign exchange	Investments,
contracts	Receivables	3,240,507	Payables	1,645,696
	Investments,
	Receivables, Net		Payables, Net
	assets — Unrealized		assets — Unrealized
Equity contracts	appreciation	52,864,326*	depreciation	7,805,665*
	Investments,
	Receivables, Net		Payables, Net
	assets  — Unrealized		assets  — Unrealized
Interest rate contracts	appreciation	5,394,440*	depreciation	8,599,951*
Total		$63,614,470		$28,128,170

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

Absolute Return 700 Fund  81 

The following is a summary of realized and change in unrealized gains or losses of derivative instruments in 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 for as				Forward
hedging instruments				currency
under ASC 815	Warrants	Options	Futures	contracts	Swaps	Total
Credit contracts	$—	$—	$—	$—	$(15,689,010)	$(15,689,010)
Foreign exchange
contracts	—	(197,416)	—	(1,941,059)	—	(2,138,475)
Equity contracts	(2,679,168)	(11,835,210)	(2,935,095)	—	(41,021,754)	(58,471,227)
Interest rate contracts	—	(1,273,137)	10,418,071	—	11,790,956	20,935,890
Total	$(2,679,168)	$(13,305,763)	$7,482,976	$(1,941,059)	$(44,919,808)	$(55,362,822)

Change in unrealized appreciation or (depreciation) on derivatives recognized in net gain or (loss)
on investments
Derivatives not
accounted for as				Forward
hedging instruments				currency
under ASC 815	Warrants	Options	Futures	contracts	Swaps	Total
Credit contracts	$—	$—	$—	$—	$(14,024,812)	$(14,024,812)
Foreign exchange
contracts	—	—	—	815,156	—	815,156
Equity contracts	5,309,315	5,315,952	8,418,606	—	10,687,165	29,731,038
Interest
rate contracts	—	603,809	(1,849,855)	—	(1,921,181)	(3,167,227)
Total	$5,309,315	$5,919,761	$6,568,751	$815,156	$(5,258,828) $13,354,155

82   Absolute Return 700 Fund 

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Absolute Return 700 Fund   83 

Note 9: Offsetting of financial and derivative assets and liabilities

The following table summarizes any derivatives, repurchase agreements and reverse repurchase agreements, at the end of the reporting period, that are subject to an enforceable master netting agreement or similar agreement. For securities lending transactions or borrowing transactions associated with securities sold short, if any, see Note 1. For financial reporting purposes, the fund does not offset financial assets and financial liabilities that are subject to the master netting agreements in the Statement of assets and liabilities.

					ASSETS								LIABILITIES
	Centrally			Centrally						Centrally			Centrally							Total
	cleared	OTC Total		cleared						cleared	OTC Total		cleared						Total	collateral
	interest	return	OTC Credit	credit		Forward	Purchased			interest	return	OTC Credit	credit		Forward	Written			Financial and	received
	rate swap	swap	default	default	Futures	currency	swap	Purchased	Total	rate swap	swap	default	default	Futures	currency	swap	Written	Total	Derivative	(pledged)	Net
	contracts§	contracts*#	contracts*#	contracts§	contracts§	contracts#	options**#	options**#	Assets	contracts§	contracts*#	contracts*#	contracts§	contracts§	contracts#	options #	options #	Liabilities	Net Assets	†##	amount
Bank of America N.A.	$—	$3,900,631	$—	$—	$—	$345,479	$—	$1,023,526	$5,269,636	$—	$2,977,746	$—	$—	$—	$211,940	$—	$—	$3,189,686	$2,079,950	$2,079,950	$—
Barclays Bank PLC	—	16,629	—	—	—	22,380	—	—	$39,009	—	100,019	32,332	—	—	198,247	—	—	$330,598	$(291,589)	$(221.978)	$(69,611)
Barclays Capital Inc.	2,056,309	—	—	57,583	—	—	—	—	$2,113,892	1,696,102	—	—	—	—	—	—	—	$1,696,102	$417,790	$—	$417,790
(clearing broker)
Citibank, N.A.	—	7,096,417	—	—	—	146,533	—	2,680,097	$9,923,047	—	2,171,805	—	—	—	84,863	—	11,991	$2,268,659	$7,654,388	$7,460,000	$194,388
Credit Suisse International	—	74,651	1,337,952	—	—	148,500	—	—	$1,561,103	—	12,278	5,889,160	—	—	223,067	—	—	$6,124,505	$(4,563,402)	$(4,391,561)	$(171,841)
Deutsche Bank AG	—	315,491	—	—	—	—	—	—	$315,491	—	58,545	—	—	—	—	—	39,000	$97,545	$217,946	$(699,930)	$917,876
Goldman Sachs International	—	1,145,989	777,245	—	—	702,961	—	—	$2,626,195		1,289,438	2,059,069	—	—	301,431	—	—	$3,649,938	$(1,023,743)	$(1,023,743)	$—
HSBC Bank USA,
National Association	—	—	—	—	—	23,829	—	—	$23,829	—	—	—	—	—	56,760	—	—	$56,760	$(32,931)	$—	$(32,931)
JPMorgan Chase Bank N.A.	—	7,510,808	—	—	—	1,476,504	—	1,608,961	$10,596,273	—	—	—	—	—	195,079	747,812	50,363	$993,254	$9,603,019	$9,603,019	$—
JPMorgan Securities LLC	—	10,312	—	—	—	—	—	—	$10,312	—	29,859	—	—	—	—	—	—	$29,859	$(19,547)	$—	$(19,547)
Merrill Lynch, Pierce,	—	—	—	—	862,393	—	—	—	$862,393	—	—	—	—	6,165	—	—	—	$6,165	$856,228	$—	$856,228
Fenner & Smith, Inc.
Royal Bank of Scotland	—	—	—	—	—	297,352	—	—	$297,352	—	—	—	—	—	313,688	—	—	$313,688	$(16,336)	$—	$(16,336)
PLC (The)
State Street Bank and	—	—	—	—	—	76,969	—	—	$76,969	—	—	—	—	—	32,454	—	—	$32,454	$44,515	$—	$44,515
Trust Co.
UBS AG	—	1,428,406	—	—	—	—	—	—	$1,428,406	—	—	—	—	—	—	—	—	$—	$1,428,406	$1,232,306	$196,100
WestPac Banking Corp.	—	—	—	—	—	—	—	—	$—	—	—	—	—	—	28,167	—	—	$28,167	$(28,167)	$—	$(28,167)
Total	2,056,309	$21,499,334	2,115,197	57,583	862,393	3,240,507	—	5,312,584	$35,143,907	1,696,102	6,639,690	7,980,561	—	6,165	1,645,696	747,812	101,354	$18,817,380	$16,326,527

* Excludes premiums, if any. Included in unrealized appreciation and depreciation on OTC swap contracts on the Statement of assets and liabilities.

** Included with Investments in securities on the Statement of assets and liabilities.

^† Additional collateral may be required from certain brokers based on individual agreements.

^# Covered by master netting agreement (Note 1).

^## Any over-collateralization of total financial and derivative net assets is not shown. Collateral may include amounts related to unsettled agreements.

^§ Includes current day’s variation margin only as reported on the Statement of assets and liabilities, which is not collateralized. Cumulative appreciation/(depreciation) for futures contracts and centrally cleared swap contracts is represented in the tables listed after the fund’s portfolio.

84   Absolute Return 700 Fund  Absolute Return 700 Fund   85 

Note 10: New pronouncements

In October 2016, the Securities and Exchange Commission adopted amendments to rules under the Investment Company Act of 1940 (“final rules”) intended to modernize the reporting and disclosure of information by registered investment companies. The final rules amend Regulation S-X and require funds to provide standardized, enhanced derivative disclosure in fund financial statements in a format designed for individual investors. The amendments to Regulation S-X also update the disclosures for other investments and investments in, and advances to affiliates and amend the rules regarding the general form and content of fund financial statements. The compliance date for the amendments to Regulation S-X is August 1, 2017. Putnam Management is currently evaluating the amendments and its impact, if any, on the fund’s financial statements.

86   Absolute Return 700 Fund 

Federal tax information (Unaudited)

For the reporting period, pursuant to §871(k) of the Internal Revenue Code, the fund hereby designates $14,789,719 of distributions paid as qualifying to be taxed as interest-related dividends.

For the reporting period, a portion of the fund’s distribution represents a return of capital and is therefore not taxable to shareholders.

The Form 1099 that will be mailed to you in January 2017 will show the tax status of all distributions paid to your account in calendar 2016.

Absolute Return 700 Fund   87 

About the Trustees

88   Absolute Return 700 Fund 

* Mr. Reynolds is an “interested person” (as defined in the Investment Company Act of 1940) of the fund and Putnam Investments. 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 October 31, 2016, there were 115 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.

Absolute Return 700 Fund   89 

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 Officer,	Vice President, Principal Financial Officer, Principal
and Compliance Liaison	Accounting Officer, and Assistant Treasurer
Since 2004	Since 2007
	Director of Fund Administration Services,
Robert T. Burns (Born 1961)	Putnam Investments and Putnam Management
Vice President and Chief Legal Officer
Since 2011	Susan G. Malloy (Born 1957)
General Counsel, Putnam Investments,	Vice President and Assistant Treasurer
Putnam Management, and Putnam Retail Management	Since 2007
	Director of Accounting & Control Services,
James F. Clark (Born 1974)	Putnam Investments and Putnam Management
Vice President and Chief Compliance Officer
Since 2016	Mark C. Trenchard (Born 1962)
Chief Compliance Officer, Putnam Investments	Vice President and BSA Compliance Officer
and Putnam Management	Since 2002
	Director of Operational Compliance, Putnam
Michael J. Higgins (Born 1976)	Investments and Putnam Retail Management
Vice President, Treasurer, and Clerk
Since 2010	Nancy E. Florek (Born 1957)
	Vice President, Director of Proxy Voting and Corporate
	Governance, Assistant Clerk, and Associate Treasurer
	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.

90   Absolute Return 700 Fund 

Putnam family of funds

The following is a list of Putnam’s open-end mutual funds offered to the public. Investors should carefully consider the investment objective, risks, charges, and expenses of a fund before investing. For a prospectus, or a summary prospectus if available, containing this and other information for any Putnam fund or product, contact your financial advisor or call Putnam Investor Services at 1-800-225-1581. Please read the prospectus carefully before investing.

Growth	Multi-Cap Value Fund
Growth Opportunities Fund	Small Cap Value Fund
International Growth Fund
Multi-Cap Growth Fund	Income
Small Cap Growth Fund	American Government Income Fund
	Diversified Income Trust
Blend	Emerging Markets Income Fund
Asia Pacific Equity Fund	Floating Rate Income Fund
Capital Opportunities Fund	Global Income Trust
Capital Spectrum Fund	Government Money Market Fund*
Emerging Markets Equity Fund	High Yield Advantage Fund
Equity Spectrum Fund	High Yield Trust
Europe Equity Fund	Income Fund
Global Equity Fund	Money Market Fund**
International Capital Opportunities Fund	Short Duration Income Fund
International Equity Fund	U.S. Government Income Trust
Investors Fund
Low Volatility Equity Fund	Tax-free Income
Multi-Cap Core Fund	AMT-Free Municipal Fund
Research Fund	Intermediate-Term Municipal Income Fund
Strategic Volatility Equity Fund	Short-Term Municipal Income Fund
	Tax Exempt Income Fund
Value	Tax-Free High Yield Fund
Convertible Securities Fund
Equity Income Fund	State tax-free income funds†:
Global Dividend Fund	Arizona, California, Massachusetts, Michigan,
The Putnam Fund for Growth and Income	Minnesota, New Jersey, New York, Ohio,
International Value Fund	and Pennsylvania.

Absolute Return 700 Fund   91 

Absolute Return	Retirement Income Lifestyle Funds — portfolios
Absolute Return 100 Fund®	with managed allocations to stocks, bonds,
Absolute Return 300 Fund®	and money market investments to generate
Absolute Return 500 Fund®	retirement income.
Absolute Return 700 Fund®
	Retirement Income Fund Lifestyle 1
Global Sector	Retirement Income Fund Lifestyle 2
Global Consumer Fund	Retirement Income Fund Lifestyle 3
Global Energy Fund
Global Financials Fund	RetirementReady® Funds — portfolios with
Global Health Care Fund	adjusting allocations to stocks, bonds, and
Global Industrials Fund	money market instruments, becoming more
Global Natural Resources Fund	conservative over time.
Global Sector Fund
Global Technology Fund	RetirementReady® 2060 Fund
Global Telecommunications Fund	RetirementReady® 2055 Fund
Global Utilities Fund	RetirementReady® 2050 Fund
	RetirementReady® 2045 Fund
Asset Allocation	RetirementReady® 2040 Fund
George Putnam Balanced Fund	RetirementReady® 2035 Fund
	RetirementReady® 2030 Fund
Global Asset Allocation Funds — four	RetirementReady®2025 Fund
investment portfolios that spread your money	RetirementReady® 2020 Fund
across a variety of stocks, bonds, and money
market instruments.
Dynamic Asset Allocation Balanced Fund
Dynamic Asset Allocation Conservative Fund
Dynamic Asset Allocation Growth Fund
Dynamic Risk Allocation Fund

* You could lose money by investing in the fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund’s sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.

** You could lose money by investing in the fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. The fund may impose a fee upon sale of your shares or may temporarily suspend your ability to sell shares if the fund’s liquidity falls below required minimums because of market conditions or other factors. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund’s sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.

† Not available in all states.

Check your account balances and the most recent month-end performance in the Individual Investors section at putnam.com.

92   Absolute Return 700 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	James F. Clark
Putnam Investment	Jameson A. Baxter, Chair	Vice President and
Management, LLC	Kenneth R. Leibler, Vice Chair	Chief Compliance Officer
One Post Office Square	Liaquat Ahamed
Boston, MA 02109	Ravi Akhoury	Michael J. Higgins
	Barbara M. Baumann	Vice President, Treasurer,
Investment Sub-Advisors	Robert J. Darretta	and Clerk
Putnam Investments Limited	Katinka Domotorffy
57–59 St James’s Street	John A. Hill	Janet C. Smith
London, England SW1A 1LD	Paul L. Joskow	Vice President,
	Robert E. Patterson	Principal Financial Officer,
The Putnam Advisory Company, LLC	George Putnam, III	Principal Accounting Officer,
One Post Office Square	Robert L. Reynolds	and Assistant Treasurer
Boston, MA 02109	W. Thomas Stephens
		Susan G. Malloy
Marketing Services	Officers	Vice President and
Putnam Retail Management	Robert L. Reynolds	Assistant Treasurer
One Post Office Square	President
Boston, MA 02109		Mark C. Trenchard
	Jonathan S. Horwitz	Vice President and
Custodian	Executive Vice President,	BSA Compliance Officer
State Street Bank	Principal Executive Officer, and
and Trust Company	Compliance Liaison	Nancy E. Florek
		Vice President, Director of
Legal Counsel	Robert T. Burns	Proxy Voting and Corporate
Ropes & Gray LLP	Vice President and	Governance, Assistant Clerk,
	Chief Legal Officer	and Associate Treasurer
Independent Registered
Public Accounting Firm
PricewaterhouseCoopers LLP

This report is for the information of shareholders of Putnam Absolute Return 700 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 November 2015, the Code of Ethics of Putnam Investment Management, LLC was amended.  The key changes to the Code of Ethics are as follows: (i) Non-Access Persons are no longer required to pre-clear their trades, (ii) a new provision governing conflicts of interest has been added, (iii) modifying certain provisions of the pre-clearance requirements, Contra-Trading Rule and 60-Day Short-Term Rule, (iv) modifying and adding language relating to reporting of unethical or illegal acts, including anti-retaliation provision, and (v) certain other changes.

Item 3. Audit Committee Financial Expert:

The Funds' Audit, Compliance and Distributions 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, Compliance and Distributions 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. Darretta, Mr. Patterson, Mr. Hill, 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, and the funds' amended and restated agreement and Declaration of Trust provides, 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, Compliance and Distribution 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
October 31, 2016	$149,549	$ —	$15,470	$ —
October 31, 2015	$135,596	$ —	$15,333	$ —

For the fiscal years ended October 31, 2016 and October 31, 2015, the fund's independent auditor billed aggregate non-audit fees in the amounts of $575,223 and $876,320 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, Compliance and Distributions Committee. The Audit, Compliance and Distributions 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, Compliance and Distributions 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
October 31, 2016	$ —	$559,753	$ —	$ —
October 31, 2015	$ —	$860,987	$ —	$ —

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: December 27, 2016

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: December 27, 2016

By (Signature and Title):

/s/ Janet C. Smith
Janet C. Smith
Principal Financial Officer

Date: December 27, 2016

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: December 27, 2016

/s/ Jonathan S. Horwitz

_______________________

Jonathan S. Horwitz

Principal Executive Officer

Certifications

I, Janet C. Smith, 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: December 27, 2016

/s/ Janet C. Smith

_______________________

Janet C. Smith

Principal Financial Officer

Attachment A

Period (s) ended October 31, 2016

               Putnam Managed Municipal Income Trust

               Putnam Municipal Opportunities Trust

               Putnam Multi-Cap Value Fund

               The Putnam Fund for Growth and Income

               Putnam Capital Opportunities Fund

               Putnam Income Fund

               Putnam Global Income Trust

               Putnam Global Equity Fund

               Putnam Convertible Securities Fund

               Putnam Absolute Return 100 Fund

               Putnam Absolute Return 300 Fund

               Putnam Absolute Return 500 Fund

               Putnam Absolute Return 700 Fund

               Putnam Capital Spectrum Fund

               Putnam Equity Spectrum Fund

               Putnam Asia Pacific Equity Fund

               Putnam Global Sector Fund

               Putnam Multi-Cap Core 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 October 31, 2016 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 October 31, 2016 fairly presents, in all material respects, the financial condition and results of operations of the Funds listed on Attachment A.

Date: December 27, 2016

/s/ Jonathan S. Horwitz

______________________

Jonathan S. Horwitz

Principal Executive Officer

Section 906 Certifications

I, Janet C. Smith, 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 October 31, 2016 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 October 31, 2016 fairly presents, in all material respects, the financial condition and results of operations of the Funds listed on Attachment A.

Date: December 27, 2016

/s/ Janet C. Smith

______________________

Janet C. Smith

Principal Financial Officer

Attachment A

N-CSR

Period (s) ended October 31, 2016

               Putnam Managed Municipal Income Trust

               Putnam Municipal Opportunities Trust

               Putnam Multi-Cap Value Fund

               The Putnam Fund for Growth and Income

               Putnam Capital Opportunities Fund

               Putnam Income Fund

               Putnam Global Income Trust

               Putnam Global Equity Fund

               Putnam Convertible Securities Fund

               Putnam Absolute Return 100 Fund

               Putnam Absolute Return 300 Fund

               Putnam Absolute Return 500 Fund

               Putnam Absolute Return 700 Fund

               Putnam Capital Spectrum Fund

               Putnam Equity Spectrum Fund

               Putnam Asia Pacific Equity Fund

               Putnam Global Sector Fund

               Putnam Multi-Cap Core Fund

EX-99.CODE ETH

working@PUTNAM  [GRAPHIC OMITTED: PUTNAM INVESTMENTS LOGO] 

Putnam's
Code of Ethics

July 2016

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 that Putnam’s employees comply with all applicable laws and avoid any actual, apparent, or potential conflict of interest that could be perceived to interfere with the fiduciary duty Putnam owes to its clients or with Putnam’s interests. It is the duty of Putnam’s employees ethically to handle all actual, apparent, and potential conflicts of interest that may arise. 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 Oversight Committee.

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Table of Contents

Definitions	4
Section 1 — Personal Securities Rules for All Employees	6
1.1. Pre-clearance Requirements	6
1.2. Restricted List	7
1.3. Prohibited Transactions	8
1.4. Policy Regarding Frequency of Personal Trading	8
Section 2 — Putnam Mutual Funds	9
2.1. Holding Putnam Mutual Fund Shares at Putnam	9
2.2. Putnam Mutual Funds — Linked Accounts	9
2.3. Putnam Mutual Funds — Closed-End Fund Rules	9
Section 3 — Additional Rules for Access Persons and Certain Investment Professionals	10
3.1. 60-Day Short-Term Rule — All Access Persons	10
3.2. 7-Day Pre-Trade Rule (Portfolio Managers and Analysts)	10
3.3. 7-Day Post-Trade Rule (Portfolio Managers and Analysts)	11
3.4. Contra-Trading Rule (Portfolio Managers)	11
3.5. No Personal Benefit (Portfolio Managers and Analysts)	12
Section 4 — Reporting Requirements	13
4.1. Brokerage/SecuritiesAccounts—Initial and Annual Requirements	13
4.2. Separate Provisions for Brokerage/Securities Accounts That Are Professionally Managed(Discretionary)
Accounts—Initial and Annual Requirements	13
4.3. Account ConfirmationsandStatements	14
4.4. Approved Brokers — U.S. Employees Only	14
Section 5 — Additional Reporting, Certification, and Training Requirements	15
5.1. Initial/Annual Holdings Report — Access Persons Only	15
5.2. Quarterly Transaction Report — Access Persons Only	15
5.3. Annual Certification — All Employees	16
5.4. Training Requirements — All Employees	16
5.5. Maintenance and Distribution of the Code of Ethics	16
5.6. Procedures and Timeliness	16
Section 6 — General Ethics Rules for All Employees	17

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6.1. Conflicts of Interest	17
6.2. Outside Business Activities	17
6.3. Charitable or Non-profit Roles/Role as Trustee or Fiduciary Outside Putnam Investments	18
6.4. Family Members’ Conflict Policy	18
6.5. CFA institute Code of Ethics and Standards of Professional Conduct	19
6.6. Business Ethics, Ombudsman, and Hotlines	19
Section 7 — Material, Non-Public Information and Insider Trading	20
7.1. Material, Non-Public Information and Insider Trading	20
7.2. Reporting and Restrictions	20
7.3. Special Provisions Applicable to Putnam Affiliates	20
7.4. Putnam Equity Plan, TH Lee Funds, and Putnam Hedge Funds	21
7.5. PIL Employees	21
Section 8 — Sanctions	22
8.1. Sanctions for Violations of Sections 1–3	22
8.2. Sanctions for Violations of Sections 4–6	22
8.3. Sanctions for Violations of Section 7	22
Section 9 — Procedures for Determinations and Exemptions	23
Appendix — CFA Institute Code of Ethics and Standards of Professional Conduct	24

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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

All employees of the Global Investment Strategies Group/Division

All employees of the International RFP Group

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 Group

» Communications and Public Relations Division

» Defined Contribution Investment Only Group

» Global Distribution Division (including Putnam Retail Management, Putnam Global Institutional Management, and Japan businesses)

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, including certain employees in rotational programs

Business or financial relationship refers to any type of existing or prospective arrangement between Putnam, on the one hand, and another entity or person, on the other hand, in which Putnam provides or receives financial consideration, goods, services, or advice. It also includes any investment by Putnam for itself or its clients. This means that there is a business or financial relationship between Putnam and each portfolio company.

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.

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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:	James Clark	(617) 760-8939
Deputy Code of Ethics Officer:	Akiko Lindholm	(617) 760-2177
Compliance Specialist:	Dana Scribner-Shea	(617) 760-7182
Compliance Specialist:	Jennifer Waden	(617) 760-0554

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, including but not limited to, equity or debt issued by a privately held company, private funds, hedge funds, or other privately offered securities.

Putnam means any or all of Putnam Investments, LLC and its subsidiaries (other than PanAgora Asset Management, Inc. and any of its subsidiaries), 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.

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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).

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. Eastern Time.

1.1. Pre-clearance Requirements

The pre-clearance requirements under this section apply to employees who are Access Persons.

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

• Stocks of companies

• Bonds and other debt instruments, including new offerings (including preferred stock, corporate, municipal, high-yield, and convertible bonds)

• Options, warrants, and all other derivatives of any underlying securities that themselves require pre-clearance

• 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, which must receive pre-approval from the Code of Ethics Oversight Committee (sales of private placements, hedge funds, or other private investment funds do not need to be pre-cleared; however, they must be reported)

• 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

• Loans, or guarantees of obligations, being made to non-family members with whom Putnam has a business or financial relationship

• Exercising rights to purchase shares of a company’s stock (other than involuntary exercises)

• Exercising options or warrants to acquire shares of a company’s stock (other than involuntary exercises as set forth under Section 1.1(c))

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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

• Options and futures and all other derivatives based on an index of securities

• Exchange-traded funds (ETFs), exchange-traded notes (ETNs), and exchange-traded commodities (ETCs)

• 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. RestrictedList

The Restricted List rule under this section applies to employees who are Access Persons.

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. Bonds are generally restricted at the issuer level.

Large-/Mid-Cap Exemption An employee may trade up to $25,000 in principal amount of the 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.

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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 (i.e., buying a put option or selling a call option without owning a number of shares at least equal to the delivery obligation under the contract, is prohibited). Purchasing a put option or selling a call option would not be considered acceptable if the only position covering such option would be another option position, such as purchasing a call option or selling a put option, to avoid aviolation.

3. Purchasing equity 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 consid- eration 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 Section7)

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. Opening a discretionary account (see Section 4.2) and trading securities requiring pre-clearance, without obtaining proper advance approval for that account as required

1.4. Policy Regarding Frequency of Personal Trading

Putnam employees are not limited to a pre-determined number of trades in securities during a specified time frame. However, excessive trading by an employee can divert the employee’s attention from his or her responsibilities as an employee and increases the possibility of engaging in transactions that are in actual or apparent conflict with Putnam’s client accounts. In addition, excessive short-term trading by an employee in shares of a Putnam-managed fund can also create actual or apparent conflicts with other shareholders of such fund and may have other detrimental effects as described in the prospectus or other disclosure document for such fund. Putnam reserves the right to monitor the number of trades (including for these purposes trades in securities that are required to be pre-cleared under Section 1.1(a), shares of Putnam-managed funds, and other securities that are required to be reported under Section 5.1 or 5.2, such as ETFs, ETNs, ETCs, options, futures, and other derivative securities) executed by an employee and members of his or her Immediate Family and may review any such activity that appears to be excessive with the employee’s manager(s) and/or the Code of Ethics Oversight Committee, as deemed appropriate by the Code of Ethics Officer. The Code of Ethics Oversight Committee shall have the authority to address any circumstances of excessive trading in securities or excessive short-term trading in shares of a Putnam-managed fund in accordance with Section 8 of this Code.

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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, health savings, 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 all account statements and confirmations to be sent to the Code of Ethics staff, if approved.

2.2. Putnam Mutual Funds — Linked Accounts

All employees are required to ensure that their Immediate Family members’ accounts holding Putnam mutual funds are linked to comply with the requirements stated above and to permit monitoring for excessive short-term trading in accordance with Section 1.4. 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.

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 Portfolio Managers to Putnam Closed-End Funds, Group Heads in the Investment Division, Operating Committee members, and officers of the Putnam Funds

Portfolio Managers to Putnam closed-end funds, Group Heads 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.

9 

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 the same security within the past 60 days. This rule applies to transactions across all accounts of the employee. All trades for the previous 60 days in all accounts will be compared to the trade date for the transaction in question to determine whether a violation has occurred. Thus, if within a 60-day period, 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. To further illustrate the rule, if an employee buys a security for $15 on one day, buys it again for $10 a year later, and then less than 60 days after the second purchase 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 more than 60 days earlier. Access Persons may also not open an option transaction for a contract that expires in 60 days or less. The holding period for securities acquired upon exercise of a purchased call option shall be calculated using the date of acquisition of the option (rather than the date of exercise of the option) as the starting point for the 60-day holding period. Further, this rule also applies to common stock and option exercise transactions. For example, an employee may purchase calls/call spreads, and he or she may buy/sell a common stock of the same security (because transactions in options and common stock shares are treated differently); however, if the employee plans to exercise the option, he or she needs to ensure that it is not in the opposite direction of the common stock transaction (at a profit) that he or she traded within the past 60 days. 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 (see Sections 3.2 and 3.3), any profit must be disgorged and paid 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. For certain designated sleeved funds or portfolios, if a portfolio manager (but not the Director of Global Equity Research, who is not eligible for this exception) does not actually manage the sleeves of the funds or portfolios, but rather is a named portfolio manager for the overall fund(s), and if the portfolio manager does not have any actual knowledge of day-to-day trade activities and upcoming changes in ratings of securities in the sleeves of the funds or portfolios, the Code of Ethics Officer, the Deputy Code of Ethics Officer or their designee may override this rule.

3.2(b) Analysts

(i) Before an analyst makes an initial purchase or outperform recommendation (including an initial recommendation change) 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 an initial sell or an underperform recommendation (including an initial recommendation change) 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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For certain designated sleeved funds or portfolios, if an analyst (but not the Director of Global Equity Research, who is not eligible for this exception) does not actually manage the sleeves of the funds or portfolios, but rather is a named portfolio manager for the overall fund(s), and if the analyst does not have any actual knowledge of day-to-day trade activities and upcoming changes in ratings of securities in the sleeves of the funds or portfolios, the Code of Ethics Officer, the Deputy Code of Ethics Officer, or their designee may override this rule.

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. For certain designated sleeved funds or portfolios, if a portfolio manager (but not the Director of Global Equity Research, who is not eligible for this exception) does not actually manage the sleeves of the funds or portfolios, but rather is a named portfolio manager for the overall fund(s), and if the portfolio manager does not have any actual knowledge of day-to-day trade activities and upcoming changes in ratings of securities in the sleeves of the funds or portfolios, the Code of Ethics Officer, the Deputy Code of Ethics Officer or their designee may override this rule.

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 initial buy or outperform recommendation (including an initial recommendation change) 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 initial sell or underperform recommendation (including an initial recommendation change) for that security or related derivative security (including the removal of a security from the portfolio of Putnam Research Fund). For certain designated sleeved funds or portfolios, if an analyst (but not the Director of Global Equity Research, who is not eligible for this exception) does not actually manage the sleeves of the funds or portfolios, but rather is a named portfolio manager for the overall fund(s), and if the analyst does not have any actual knowledge of day-to-day trade activities and upcoming changes in ratings of securities in the sleeves of the funds or portfolios, the Code of Ethics Officer, the Deputy Code of Ethics Officer or their designee may override this rule.

3.4. Contra-Trading Rule (Portfolio Managers)

No portfolio manager shall, without prior clearance and written approval (which may be satisfied by email) from the Chief Investment Officer and Code of Ethics Officer, 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. Contact the Code of Ethics Officer for a copy of the Contra-Trading Rule Clearance Form. For certain designated sleeved funds or portfolios, the Code of Ethics Officer, the Deputy Code of Ethics Officer or their designee may permit a sale in the portfolio manager’s personal account without obtaining written approval from the Chief Investment Officer and Code of Ethics Officer, if the portfolio manager (but not the Director of Global Equity Research, who is not eligible for this exception) does not actually manage the sleeves of the funds or portfolios, but rather is a named portfolio manager for the overall fund(s), and if the portfolio manager does not have any actual knowledge of day-to-day trade activities and upcoming changes in ratings of securities in the sleeves of the funds or portfolios.

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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.

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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 (see Definitions)) are required to report the existence of any accounts that 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, and TreasuryDirect accounts, which can only purchase Treasury securities.

To satisfy this requirement, a new employee must complete the Code of Ethics and Broker Account Certification, and Access Persons must also complete Initial Holdings Certification in the Code of Ethics PTA system, and supply the Code of Ethics Department with a copy of the most recent statement for each account, 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 to the Code of Ethics Department prior to opening, or immediately after opening, the account 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.

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 and you have no direct or indirect influence or control over the discretionary account, 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 (new employees have 30 days to obtain the appropriate approval). You do not need to pre-clear or report securities transactions in these accounts. Please note that a discretionary account may not purchase an IPO or hold Putnam open-end mutual funds. The broker or advisor maintaining discretion over the account must be an independent third party, not affiliated with or related to a family member of the Putnam employee in any way.

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

1. Complete an initial certification in which both the employee and the broker/advisor certify that the Putnam employee or Immediate Family member does not participate in investment decisions on the account;

2. Complete an annual certification in which the employee certifies that the Putnam employee or Immediate Family member does not participate in investment decisions on the account, and does not have direct or indirect influence or control over theaccount;

3. Respond, and arrange for the employee’s broker/advisor to respond, to such inquiries as deemed advisable by the Code of Ethics staff in their assessment of whether the account is discretionary; and

4. Ensure that copies of broker statements are delivered to Putnam investments.

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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, 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 that his or her broker has complied with this request. Employees in non-U.S. offices may be subject to different requirements with respect to the frequency of providing account confirmations and statements. Any such different requirements will be communicated to the employees by the Code of Ethics staff.

If it is discovered that 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). In cases where Putnam has an electronic reporting relationship established with a firm, Putnam may rely on this electronic reporting for monitoring and record keeping in lieu of receiving trade confirmations and statements via mail.

4.4. Approved Brokers — U.S. Employees Only

U.S. employees of Putnam are required to hold each of their personal accounts (including any retirement, pension, deferred compensation, or similar accounts) at a Putnam-approved broker that provides Putnam with an electronic broker feed. The list of approved brokers is posted to the Putnam Compliance intranet homepage and the Code of Ethics PTA system. In limited circumstances, employees may be allowed to hold personal accounts at a non-Putnam-approved broker (examples include retirement accounts at current employers of Immediate Family members and accounts that cannot legally be transferred to Putnam-approved brokers). In such a case, the employee must notify the Code of Ethics Officer in writing and provide the reason why the account cannot be transferred to a Putnam-approved broker or why the employee otherwise requests an exception be granted by the Code of Ethics Officer or Deputy Code of Ethics Officer. In the event an exception is granted, the employee must arrange for trade confirmations and account statements (quarterly) to be sent to the Code of Ethics staff.

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Section 5 — Additional Reporting, Certification, and Training Requirements

5.1. Initial/Annual Holdings Report — Access Persons Only

Access Persons must disclose and certify 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). Each of the initial and annual holdings reports must contain the following information:

Initial holdings report:

• The title, number of shares, and principal amount of each security in which the Access Person had any direct or indirect beneficial ownership when the person became an Access Person,

• The name of any broker, dealer, or bank with whom the Access Person maintained an account in which any securities could be held for the direct or indirect benefit of the Access Person as of the date the person became an Access Person; and

• The date that the report is submitted by the Access Person.

Annual holdings report:

• The title, number of shares, and principal amount of each security in which the Access Person had any direct or indirect beneficial ownership,

• The name of any broker, dealer, or bank with whom the Access Person maintained an account in which any securities could be held for the direct or indirect benefit of the Access Person; and

• The date that the report is submitted by the Access Person.

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. If the 20th of a month after the end of a quarter falls on a holiday or weekend, the Code of Ethics Officer may extend the deadline. 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, and not just those requiring pre-clearance. The quarterly transaction report must contain the following information:

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

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

• The price of the security at which the transaction was effected,

• The name of the broker, dealer, or bank with or through which the transaction was effected, and

• The date that the report is submitted by the Access Person

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5.3. Annual Certification — AllEmployees

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 email 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. Email 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 andTimeliness

Most 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.

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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. Conflicts of Interest

Your obligation to act ethically at all times includes the ethical handling of actual, apparent, and potential conflicts of interest between personal and business affairs. Please note that when this Section 6.1 refers to a “conflict of interest,” it is referring to actual, apparent, and potential conflicts of interest. Conflicts of interest may arise in various circumstances, some of which are covered in the specific situations set forth in the other portions of this Section 6. However, it is not possible to set forth each specific situation under which a conflict of interest may arise.

A conflict of interest arises when a person’s personal affairs interfere with the interests of Putnam or Putnam’s clients. A conflict of interest can also arise when an employee or a member of his or her Immediate Family takes an action or has an interest that may make it difficult to perform his or her work objectively and effectively. Conflicts of interest may arise when an employee or a member of his or her Immediate Family receives or grants improper personal benefits as a result of his or her position or in the event that an employee or a member of his or her Immediate Family enters into transactions or agreements with any entity or person with whom Putnam has a business or financial relationship. Putnam employees must recognize (including through their personal trading and conduct) that the firm’s clients always come first, that the employees and the firm must avoid any actual or potential abuse of our positions of trust and responsibility, and that the employees and the firm must never take inappropriate advantage of our positions.

Given that actual, apparent, and potential conflicts of interest may often not be clear-cut, if you have any question or doubt whatsoever, you should consult the Code of Ethics Officer or Deputy Code of Ethics Officer prior to engaging in the activity in question. Any employee who becomes aware of a conflict, potential conflict, or the appearance of a conflict is strongly encouraged to bring it to the attention of the Code of Ethics Officer or Deputy Code of Ethics Officer.

6.2. 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 email 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 otherissues.

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

6.3(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.

6.3(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.

6.3(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.

6.4. FamilyMembers’ 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.

6.4(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 Chief Financial Officer 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 Chief Financial Officer and the Code of Ethics Officer.

6.4(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.

6.4(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.

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6.5. 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 (see the Appendix for a copy). 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.

6.6. Business Ethics, Ombudsman, andHotlines

6.6(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.

6.6(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.

6.6(c) An employee who does not feel comfortable reporting activity in the manner described in 6.6(a) 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).

6.6(d) Employees will not be retaliated against for reporting information in good faith and in accordance with this Code. Putnam will not terminate employment, demote, transfer to an undesirable assignment, or otherwise discriminate against or harass an employee for calling attention to suspected unethical or illegal acts. It is a violation of this Code to intimidate or impose any other form of retaliation on an employee who reports any actual or suspected illegal or unethical conduct. Putnam takes claims of retaliation very seriously and will promptly investigate allegations of retaliation, subjecting anyone found responsible for retaliating against an employee who reported unethical or illegal conduct to disciplinary action up to and including termination of employment. However, an employee who knowingly makes a false report may be subject to discipline.

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

7.1. Material, Non-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 imprisonment. 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 andRestrictions

Any employee who believes he or she is (or may be) in possession of material, non-public information must immediately contact Putnam’s Chief Compliance 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, and not share this information with anyone outside of Putnam’s Legal and Compliance Division. This provision does not, however, prevent any employee who suspects possible violations of law or regulation from providing such information to Putnam’s Controller, Chief Compliance Officer, or Code of Ethics Officer through the Ombudsman or hotlines or through Putnam’s Human Resources department as described in Section 6.6 or to any governmental agency or entity, or self-regulatory authority, including but not limited to the Securities and Exchange Commission or the Financial Industry Regulatory Authority, or from making other disclosures that are protected under the whistleblower provisions of state or federal law or regulation.

After reviewing the facts and circumstances, Putnam’s Chief Compliance 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.

7.3. Special Provisions Applicable to PutnamAffiliates

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.

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7.4. Putnam Equity Plan, TH Lee Funds, and Putnam HedgeFunds

Great-West Lifeco Inc. stock shares owned by Putnam Investments, LLC Equity Incentive Plan (or any successor plan) shareholders are administered by the Putnam HR department; therefore, holdings of such shares do not need to be reported under this Code. In addition, the exercise of rights under the Putnam Investment, LLC Equity Incentive Plan to acquire Great-West Lifeco Inc. stock and the sale of such stock during specified window periods does not need to be pre-cleared under this Code, and such transaction does not need to be reported on the quarterly transaction report for Access Persons. However, if an employee holds Great-West Lifeco Inc. stock shares outside of the Putnam Investments, LLC Equity Incentive Plan (for example, in a brokerage account), such brokerage account and the holding must be reported under this Code.

Investments in Putnam hedge funds and in certain TH Lee private funds by employees are administered by the Putnam HR department. Therefore, employees do not need to pre-clear or report such funds under this Code.

7.5. PIL Employees

For PIL employees, certain topics are covered by the Market Abuse rules of the U.K. Financial Conduct Authority. PIL employees receive information on this topic in their annual instructor-led code of ethics and compliance training.

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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 that 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, Operating Committee member, and any employee who reports		All other employees not included
directly to an Operating Committee member (administrative assistants will be excluded		in the criteria for inclusion in the
from the higher sanction schedule)		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

*Sanctions for trades that occur after an employee is denied pre-clearance may be higher.

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, Operating Committee member, and any employee who reports		All other employees not included
directly to an Operating Committee member (administrative assistants will be excluded		in the criteria for inclusion in the
from the higher sanction schedule)		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.

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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

CFA INSTITUTE CODE OF ETHICS AND STANDARDS OF PROFESSIONAL CONDUCT

PREAMBLE

The CFA Institute Code of Ethics and Standards of Professional Conduct are fundamental to the values of CFA Institute and essential to achieving its mission to lead the investment profession globally by promoting the highest standards of ethics, education, and professional excellence for the ultimate benefit of society. High ethical standards are critical to maintaining the public’s trust in financial markets and in the investment profession. Since their creation in the 1960s, the Code and Standards have promoted the integrity of CFA Institute members and served as a model for measuring the ethics of investment professionals globally, regardless of job function, cultural differences, or local laws and regulations. All CFA Institute members (including holders of the Chartered Financial Analyst ® [CFA ® ] designation) and CFA candidates must abide by the Code and Standards and are encouraged to notify their employer of this responsibility. Violations may result in disciplinary sanctions by CFA Institute. Sanctions can include revocation of membership, revocation of candidacy in the CFA Program, and revocation of the right to use the CFA designation.

THE CODE OF ETHICS

Members of CFA Institute (including CFA charterholders) and candidates for the CFA designation (“Members and Candidates”) must:

• Act with integrity, competence, diligence, respect and in an ethical manner with the public, clients, prospective clients, employers, employees, colleagues in the investment profession, and other participants in the global capital markets.

• Place the integrity of the investment profession and the interests of clients above their own personal interests.

• Use reasonable care and exercise independent professional judgment when conducting investment analysis, making investment recommendations, taking investment actions, and engaging in other professional activities.

• Practice and encourage others to practice in a professional and ethical manner that will reflect credit on themselves and the profession.

• Promote the integrity and viability of the global capital markets for the ultimate benefit of society.

• Maintain and improve their professional competence and strive to maintain and improve the competence of other investment professionals.

STANDARDS OF PROFESSIONAL CONDUCT

I. PROFESSIONALISM

A. Knowledge of the Law. Members and Candidates must under-stand and comply with all applicable laws, rules, and regulations (including the CFA Institute Code of Ethics and Standards of Professional Conduct) of any government, regulatory organization, licensing agency, or professional association governing their professional activities. In the event of conflict, Members and Candidates must comply with the more strict law, rule, or regulation. Members and Candidates must not knowingly participate or assist in and must dissociate from any violation of such laws, rules, or regulations.

B. Independence and Objectivity. Members and Candidates must use reasonable care and judgment to achieve and maintain independence and objectivity in their professional activities. Members and Candidates must not offer, solicit, or accept any gift, benefit, compensation, or consideration that reasonably could be expected to compromise their own or another’s independence and objectivity.

C. Misrepresentation. Members and Candidates must not knowingly make any misrepresentations relating to investment analysis, recommendations, actions, or other professional activities.

D. Misconduct. Members and Candidates must not engage in any professional conduct involving dishonesty, fraud, or deceit or commit any act that reflects adversely on their professional reputation, integrity, or competence.

II. INTEGRITY OF CAPITAL MARKETS

A. Material Nonpublic Information. Members and Candidates who possess material nonpublic information that could affect the value of an investment must not act or cause others to act on the information.

B. Market Manipulation. Members and Candidates must not engage in practices that distort prices or artificially inflate trading volume with the intent to mislead market participants.

III. DUTIES TO CLIENTS

A. Loyalty, Prudence, and Care. Members and Candidates have a duty of loyalty to their clients and must act with reasonable care and exercise prudent judgment. Members and Candidates must act for the benefit of their clients and place their clients’ interests before their employer’s or their own interests.

B. Fair Dealing. Members and Candidates must deal fairly and objectively with all clients when providing investment analysis, making investment recommendations, taking investment action, or engaging in other professional activities.

C. Suitability.

1. When Members and Candidates are in an advisory relationship with a client, they must:

a. Make a reasonable inquiry into a client’s or prospective client’s investment experience, risk and return objectives, and financial constraints prior to making any investment recommendation or taking investment action and must reassess and update this information regularly.

b. Determine that an investment is suitable to the client’s financial situation and consistent with the client’s written objectives, mandates, and constraints before making an investment recommendation or taking investment action.

c. Judge the suitability of investments in the context of the client’s total portfolio.

2. When Members and Candidates are responsible for managing a portfolio to a specific mandate, strategy, or style, they must make only investment recommendations or take only investment actions that are consistent with the stated objectives and constraints of the portfolio.

D. Performance Presentation. When communicating investment performance information, Members and Candidates must make reasonable efforts to ensure that it is fair, accurate, and complete.

E. Preservation of Confidentiality. Members and Candidates must keep information about current, former, and prospective clients confidential unless:

1. The information concerns illegal activities on the part of the client or prospective client,

2. Disclosure is required by law, or

3. The client or prospective client permits disclosure of the information.

IV. DUTIES TO EMPLOYERS

A. Loyalty. In matters related to their employment, Members and Candidates must act for the benefit of their employer and not deprive their employer of the advantage of their skills and abilities, divulge confidential information, or otherwise cause harm to their employer.

B. Additional Compensation Arrangements. Members and Candidates must not accept gifts, benefits, compensation, or consideration that competes with or might reasonably be expected to create a conflict of interest with their employer’s interest unless they obtain written consent from all parties involved.

C. Responsibilities of Supervisors. Members and Candidates must make reasonable efforts to ensure that anyone subject to their supervision or authority complies with applicable laws, rules, regulations, and the Code and Standards.

V. INVESTMENT ANALYSIS, RECOMMENDATIONS, AND ACTIONS

A. Diligence and Reasonable Basis. Members and Candidates must:

1. Exercise diligence, independence, and thoroughness in analyzing investments, making investment recommendations, and taking investment actions.

2. Have a reasonable and adequate basis, supported by appropriate research and investigation, for any investment analysis, recommendation, or action.

B. Communication with Clients and Prospective Clients. Members and Candidates must:

1. Disclose to clients and prospective clients the basic format and general principles of the investment processes they use to analyze investments, select securities, and construct port-folios and must promptly disclose any changes that might materially affect those processes.

2. Disclose to clients and prospective clients significant limitations and risks associated with the investment process.

3. Use reasonable judgment in identifying which factors are important to their investment analyses, recommendations, or actions and include those factors in communications with clients and prospective clients.

4. Distinguish between fact and opinion in the presentation of investment analysis and recommendations.

C. Record Retention. Members and Candidates must develop and maintain appropriate records to support their investment analyses, recommendations, actions, and other investment-related communications with clients and prospective clients.

VI. CONFLICTS OF INTEREST

A. Disclosure of Conflicts. Members and Candidates must make full and fair disclosure of all matters that could reasonably be expected to impair their independence and objectivity or interfere with respective duties to their clients, prospective clients, and employer. Members and Candidates must ensure that such disclosures are prominent, are delivered in plain language, and communicate the relevant information effectively.

B. Priority of Transactions. Investment transactions for clients and employers must have priority over investment transactions in which a Member or Candidate is the beneficial owner.

C. Referral Fees. Members and Candidates must disclose to their employer, clients, and prospective clients, as appropriate, any compensation, consideration, or benefit received from or paid to others for the recommendation of products or services.

VII. RESPONSIBILITIES AS A CFA INSTITUTE MEMBER OR CFA CANDIDATE

A. Conduct as Participants in CFA Institute Programs. Members and Candidates must not engage in any conduct that compromises the reputation or integrity of CFA Institute or the CFA designation or the integrity, validity, or security of the CFA Institute programs.

B. Reference to CFA Institute, the CFA Designation, and the CFA Program. When referring to CFA Institute, CFA Institute membership, the CFA designation, or candidacy in the CFA Program, Members and Candidates must not misrepresent or exaggerate the meaning or implications of membership in CFA Institute, holding the CFA designation, or candidacy in the CFA program.

© 2014 CFA Institute	www.cfainstitute.org
Putnam Investments | One Post Office Square | Boston, MA 02109 | putnam.com	301951 7/16

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, Compliance and Distributions 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, Compliance and Distributions 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.

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.

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:

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(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 or her 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-C(1) and any related violations shall be reported by him to the Audit, Compliance and Distributions Committee as provided in Section I-C(2).

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, Compliance and Distributions 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 or her responsibilities under this Code, either generally or as to specific instances, to such officer or Trustee of the Funds as he or she may designate.

As revised June 24, 2016.

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