a_shorterminv.htm

Putnam
Short Term
Investment Fund

Semiannual report
1 | 31 | 17


Message from the Trustees	1

Interview with your fund’s portfolio managers	3

Your fund’s performance	7

Your fund’s expenses	8

Terms and definitions	10

Other information for shareholders	11

Financial statements	12

Consider these risks before investing: Bond prices 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, 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. Funds that invest in government securities are not guaranteed. Mortgage-backed investments, unlike traditional debt investments, are also subject to prepayment risk, which means that they may increase in value less than other bonds when interest rates decline and decline in value more than other bonds when interest rates rise. We may have to invest the proceeds from prepaid investments, including mortgage-backed investments, in other investments with less attractive terms and yields. 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. Credit risk is generally greater for debt not backed by the full faith and credit of the U.S. government, and interest-rate risk is generally greater for longer-term debt. Inflation’s effects may erode your investment’s value over time. Risks associated with derivatives include increased investment exposure (which may be considered leverage) and, in the case of over-the-counter instruments, the potential inability to terminate or sell derivatives positions and the potential failure of the other party to the instrument to meet its obligations. Unlike bonds, funds that invest in bonds have fees and expenses. You can lose money by investing in the fund.

Message from the Trustees

March 16, 2017

Dear Fellow Shareholder:

In the early weeks of 2017, investor sentiment generally brightened at the prospect of moving beyond the challenges of the past year, when political uncertainty, among other issues, tested global financial markets. As stock markets delivered modest gains, the exuberance that greeted the new year calmed somewhat as investors reconsidered a number of ongoing macroeconomic risks. In addition, many bond investors remained cautious as the potential for inflation increased.

As always, we believe investors should continue to focus on time-tested strategies: maintain a well-diversified portfolio, keep a long-term view, and do not overreact to short-term market fluctuations. To help ensure that your portfolio is aligned with your individual goals, time horizon, and tolerance for risk, we also 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 January 31, 2017, as well as an outlook for the coming months.

Thank you for investing with Putnam.

Performance history as of 1/31/17

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 P shares assumes reinvestment of distributions and does not account for taxes. Class P shares do not bear an initial sales charge. For a portion of the periods, the fund had expense limitations, without which returns would have been lower. See below and pages 7–8 for additional performance information. To obtain the most recent month-end performance, please call Putnam at 1-800-225-1581.

* Returns for the six-month period are not annualized, but cumulative.

This comparison shows your fund’s performance in the context of broad market indexes for the six months ended 1/31/17. See above and pages 7–8 for additional fund performance information. Index descriptions can be found on page 10.

2 Short Term Investment Fund

Joanne has an M.B.A. from Northeastern University D’Amore-McKim School of Business, and a B.S. from Westfield State College. She joined Putnam in 1995 and has been in the investment industry since 1992.

Jonathan has a B.A. from Northeastern University. He has been in the investment industry since he joined Putnam in 1990.

In addition to Joanne and Jonathan, your fund’s Portfolio Manager is Michael Lima. Mike has a B.S. from Boston College. He has been in the investment industry since he joined Putnam in 1997.

Please describe conditions in the money market environment during the six-month reporting period ended January 31, 2017.

JOANNE During the period, short-term markets were highly influenced by rising interest rates and the latest round of money market reforms implemented by the Securities and Exchange Commission [SEC], which took effect on October 14, 2016. Early in the reporting period, with the U.S. labor market not at full strength and the U.S. economy vulnerable to economic weakness abroad, the Federal Reserve held interest rates steady. However, minutes released after its September meeting indicated that some members of the Fed’s interest-rate-setting committee believed that the time had come for modest, gradual increases in short-term rates to best promote a more sustainable and balanced economic recovery. Short-term interest rates began to rise as the markets priced in the likelihood that the Fed would raise short-term rates at its December policy meeting. As widely expected, the Fed increased its benchmark federal funds rate on December 14 to a range of 0.50% to 0.75%. The Fed also raised the rate on its Reverse Repurchase Agreement [RRP] program from 0.25% to 0.50%.

Short Term Investment Fund 3

With regard to the SEC’s money market reforms, managers of prime money market funds worked during the period to ensure compliance with the new regulations, including the introduction of a floating net asset value [NAV] and the imposition of liquidity fees and redemption gates, which are designed to limit investor withdrawals during periods of market stress. As investor preferences changed during the transition, cash shifted from prime money market funds to government money market funds, which continue to seek to maintain a stable $1.00 NAV and which are not required to have provisions for imposing fees and gates. To accommodate such withdrawals, prime money market funds held higher levels of cash to meet redemptions — squeezing credit and decreasing demand for short-term debt issued by companies, banks, and municipalities. Ultimately, these developments contributed to higher short-term interest rates and borrowing costs.

As a result of these developments and the market pricing in a potential Fed interest-rate hike, short-term interest rates, as measured by the three-month London Interbank Offered Rate [LIBOR], rose approximately 27 basis points to 1.03% on January 31, 2017. [LIBOR is a widely followed benchmark rate that the world’s largest banks use in determining rates for interbank loans.]

How did the fund perform against this backdrop?

JONATHAN For the six-month reporting period ended January 31, 2017, the fund outperformed its benchmark index and the average return of its Lipper peer group, Institutional Money Market Funds.

What was your investment strategy during the reporting period?

JOANNE Developments in the cash management landscape greatly affected how we positioned the fund’s portfolio during the reporting period. Although Putnam Short Term Investment Fund is not a money market fund subject to the SEC’s new reforms, we maintained a weighted average maturity [WAM] of less than 20 days leading into the October deadline for the implementation of the SEC’s reforms. This allowed us to capture higher-yields on short-term securities as interest rates rose. Given our expectation that the Fed would raise interest rates during the period, we maintained the portfolio’s allocation in floating-rate instruments and fixed-rate short-term instruments maturing in three months or less.

What fund holdings exemplify your investment approach?

JONATHAN In our effort to maintain the highest-quality securities, the fund held the securities of several creditworthy banks. During the reporting period, we continued to purchase what we believed were attractive opportunities in first-tier corporate commercial paper and first-tier asset-backed commercial paper [ABCP]. We focused on ABCP issuers that are backed by what we believe are diverse, high-quality financial assets, such as trade receivables; commercial, auto, and mortgage loans; and other asset types. These issuers must maintain ample third-party structural support and, in our opinion, have strong management and sponsorship. Lastly, we continued to enter into repurchase agreements with what we believe are strong counterparties that are collateralized by Treasuries, corporate bonds, and agency mortgages typically in the overnight to one-week maturity range to provide liquidity for the fund.

Short Term Investment Fund 5

What is your outlook for short-term interest rates in 2017?

JOANNE At its December 2016 meeting, the Fed indicated that with inflation expectations increasing and the labor market tightening, the central bank projected three quarter-point increases in 2017. With that said, we believe that uncertainties remain as they relate to the incorporation of new policy under the incoming administration, and how fiscal policy in particular will affect inflationary pressures and economic growth in the United States. As a result, we believe the Fed is waiting for more clarity on the fiscal policy outlook. We also believe short-term government rates will feel some pressure during the course of the year from the debt ceiling being reinstated. However, we expect this to be temporary and not restrict the Fed from being able to enact its policy objectives.

Against this backdrop, we will continue to employ strategies that help us maintain a stable $1.00 NAV in the fund while searching for attractive income opportunities among the highest-quality short-term investments that help us maintain liquidity.

Thank you, Joanne and Jonathan, for your time and insights today.

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

Please note that the holdings discussed in this report may not have been held by the fund for the entire period. Portfolio composition is subject to review in accordance with the fund’s investment strategy and may vary in the future. Current and future portfolio holdings are subject to risk. Statements in the Q&A concerning the fund’s performance or portfolio composition relative to those of the fund’s Lipper peer group may reference information produced by Lipper Inc. or through a third party.

6 Short Term Investment Fund

Your fund’s performance

This section shows your fund’s performance, price, and distribution information for periods ended January 31, 2017, the end of the first half of its current 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 call Putnam at 1-800-225-1581. Class P shares are only available to other Putnam funds and other accounts managed by Putnam Management or its affiliates. See the Terms and Definitions section of this report for a definition of the share class offered by your fund.

Fund performance Total return for periods ended 1/31/17


	Life of fund	Annual average	3 years	Annual average	1 year	6 months

Class P (2/19/13)
Net asset value	0.77%	0.19%	0.71%	0.23%	0.49%	0.28%

Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results. Class P shares do not carry an initial sales charge or a contingent deferred sales charge (CDSC).

For a portion of the periods, the fund had expense limitations, without which returns would have been lower.

Comparative index returns For periods ended 1/31/17


	Life of fund	Annual average	3 years	Annual average	1 year	6 months

BofA Merrill Lynch
U.S. Treasury Bill	0.65%	0.16%	0.56%	0.19%	0.40%	0.19%
Index

Lipper Institutional
Money Market Funds	0.44	0.11	0.42	0.14	0.32	0.20
category average^*

Index and Lipper results should be compared with fund performance at net asset value.

^*Over the 6-month, 1-year, 3-year, and life-of-fund periods ended, there were 134, 125, 123, and 120 funds, respectively, in this Lipper category.

Short Term Investment Fund 7

Fund distribution information For the six-month period ended 1/31/17


Distributions				Class P

Number				6

Income				$0.002758

Capital gains				—

Total				$0.002758

Current rate (end of period)				Class P

Current dividend rate ²				0.72%

Current 30-day SEC yield (with expense limitation) ^1,3				0.69

Current 30-day SEC yield (without expense limitation) ³				0.44

The classification of distributions, if any, is an estimate. Final distribution information will appear on your year-end tax forms.

¹For a portion of the period, the fund had an expense limitation, without which the yield would have been lower.

²Most recent distribution, including any return of capital and excluding capital gains, annualized and divided by share price at end of period.

³Based only on investment income.

Fund performance as of most recent calendar quarter Total return for periods ended 12/31/16


	Life of fund	Annual average	3 years	Annual average	1 year	6 months

Class P (2/19/13)
Net asset value	0.71%	0.18%	0.65%	0.22%	0.46%	0.25%

See the discussion following the fund performance table on page 7 for information about the calculation of fund performance.

Your fund’s expenses

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

Expense ratios


	Class P

Net expenses for the fiscal year ended 7/31/16^*	0.03%

Total annual operating expenses for the fiscal year ended 7/31/16	0.28%

Annualized expense ratio for the six-month period ended 1/31/17	0.03%

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.

Expenses are shown as a percentage of average net assets.

^*Reflects Putnam Management’s contractual obligation to limit expenses through 11/30/17.

8 Short Term Investment Fund

Expenses per $1,000

The following table shows the expenses you would have paid on a $1,000 investment in the fund from 8/1/16 to 1/31/17. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.


	Class P

Expenses paid per $1,000^*†	$0.15

Ending value (after expenses)	$1,002.80

^*Expenses are calculated using the fund’s annualized expense ratio, which represents the ongoing expenses as a percentage of average net assets for the six months ended 1/31/17.

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

Estimate the expenses you paid

To estimate the ongoing expenses you paid for the six months ended 1/31/17, use the following calculation method. To find the value of your investment on 8/1/16, 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 P

Expenses paid per $1,000 ^*†	$0.15

Ending value (after expenses)	$1,025.05

^*Expenses are calculated using the fund’s annualized expense ratio, which represents the ongoing expenses as a percentage of average net assets for the six months ended 1/31/17.

^†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.

Short Term Investment Fund 9

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.

Net asset value (NAV) is the price, or value, of one share of a mutual fund, without a sales charge. Net asset values fluctuate with market conditions, and are calculated by dividing the net assets of a class of shares by the number of outstanding shares in that class.

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.

Share class

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, and no management fee is paid by such investors.

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

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, which represent obligations of the U.S. government having a maturity of one year or less, and is intended as an approximate measure of the rate of inflation.

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.

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

10 Short Term Investment Fund

Other information for shareholders

Important notice regarding delivery of shareholder documents

In accordance with Securities and Exchange Commission (SEC) regulations, Putnam sends a single copy of annual and semiannual shareholder reports, prospectuses, and proxy statements to Putnam shareholders who share the same address, unless a shareholder requests otherwise. If you prefer to receive your own copy of these documents, please call Putnam at 1-800-225-1581, and Putnam will begin sending individual copies within 30 days.

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 SEC’s 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 January 31, 2017, Putnam employees had approximately $465,000,000 and the Trustees had approximately $135,000,000 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.

Short Term Investment Fund 11

Financial statements

These sections of the report, as well as the accompanying Notes, 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 period.

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. Dividend sources are estimated at the time of declaration. Actual results may vary. Any non-taxable return of capital cannot be determined until final tax calculations are completed after the end of the fund’s fiscal year.

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.

12 Short Term Investment Fund

The fund’s portfolio 1/31/17 (Unaudited)


	Principal
REPURCHASE AGREEMENTS (45.7%)*	amount	Value

Interest in $126,000,000 joint tri-party repurchase agreement dated
1/31/17 with Bank of Nova Scotia due 2/1/17 — maturity value of $76,001,140
for an effective yield of 0.540% (collateralized by various U.S. Treasury notes
and bonds with coupon rates ranging from 0.125% to 2.250% and due dates
ranging from 8/15/21 to 11/15/25, valued at $128,521,961)	$76,000,000	$76,000,000

Interest in $50,000,000 tri-party term repurchase agreement dated
1/27/17 with Barclays Capital, Inc. due 2/3/17 — maturity value of $50,005,250
for an effective yield of 0.540% (collateralized by various mortgage backed
securities with coupon rates ranging from 2.500% to 3.000% and a due date
of 1/1/32, valued at $51,003,825)	50,000,000	50,000,000

Interest in $240,000,000 joint tri-party repurchase agreement dated
1/31/17 with Barclays Capital, Inc. due 2/1/17 — maturity value of $87,972,295
for an effective yield of 0.530% (collateralized by various U.S. Treasury notes
and bonds with coupon rates ranging from 0.125% to 3.875% and due dates
ranging from 1/15/23 to 2/15/46, valued at $244,803,606)	87,971,000	87,971,000

Interest in $132,464,000 joint tri-party repurchase agreement dated
1/31/17 with BNP Paribas due 2/1/17 — maturity value of $82,465,283 for
an effective yield of 0.560% (collateralized by various mortgage backed
securities and U.S. Treasury notes with coupon rates ranging from
2.383% to 4.000% and due dates ranging from 11/15/23 to 1/1/47, valued
at $135,115,394)	82,464,000	82,464,000

Interest in $24,000,000 tri-party term repurchase agreement dated
12/22/16 with BNP Paribas due 2/22/17 — maturity value of $24,037,200 for
an effective yield of 0.900% (collateralized by various corporate bonds and
notes with coupon rates ranging from 2.125% to 7.000% and due dates ranging
from 7/18/19 to 10/1/45, valued at $25,226,690) ^IR	24,000,000	24,000,000

Interest in $155,000,000 joint tri-party term repurchase agreement dated
1/26/17 with Citigroup Global Markets, Inc. due 2/2/17 — maturity value
of $131,014,010 for an effective yield of 0.550% (collateralized by various
mortgage backed securities with coupon rates ranging from 1.601% to 6.000%
and due dates ranging from 6/1/20 to 1/1/47, valued at $158,100,000)	131,000,000	131,000,000

Interest in $257,400,000 joint tri-party repurchase agreement dated
1/31/17 with Citigroup Global Markets, Inc. due 2/1/17 — maturity value
of $115,575,798 for an effective yield of 0.560% (collateralized by various
U.S. Treasury notes with coupon rates ranging from 1.375% to 2.250% and due
dates ranging from 7/31/18 to 12/31/23, valued at $262,548,070)	115,574,000	115,574,000

Interest in $159,000,000 tri-party repurchase agreement dated 1/31/17 with
Goldman, Sachs & Co. due 2/1/17 — maturity value of $159,002,429 for
an effective yield of 0.550% (collateralized by various mortgage backed
securities with coupon rates ranging from 3.000% to 5.500% and due dates
ranging from 1/1/27 to 11/1/46, valued at $162,180,001)	159,000,000	159,000,000

Interest in $250,000,000 joint tri-party repurchase agreement dated
1/31/17 with HSBC Bank USA, National Association due 2/1/17 — maturity
value of $105,001,546 for an effective yield of 0.530% (collateralized by various
mortgage backed securities with coupon rates ranging from 3.000% to 6.500%
and due dates ranging from 7/1/22 to 2/1/47, valued at $255,000,102)	105,000,000	105,000,000

Interest in $50,000,000 tri-party term repurchase agreement dated
1/31/17 with J.P. Morgan Securities, LLC due 2/7/17 — maturity value of
$50,005,250 for an effective yield of 0.540% (collateralized by various mortgage
backed securities with coupon rates ranging from 2.000% to 11.000% and due
dates ranging from 2/1/17 to 4/1/51, valued at $51,004,629)	50,000,000	50,000,000

Short Term Investment Fund 13


			Principal
REPURCHASE AGREEMENTS (45.7%)* cont.			amount	Value

Interest in $50,000,000 tri-party repurchase agreement dated 1/31/17 with
J.P. Morgan Securities, LLC due 2/1/17 — maturity value of $50,000,736
for an effective yield of 0.530% (collateralized by a U.S. Treasury note with
a coupon rate of 1.625% and a due date of 5/15/26, valued at $51,001,732)			$50,000,000	$50,000,000

Interest in $67,000,000 tri-party term repurchase agreement dated
1/31/17 with Merrill Lynch, Pierce, Fenner and Smith, Inc. due 2/7/17 —
maturity value of $67,007,035 for an effective yield of 0.540% (collateralized
by a mortgage backed security with a coupon rate of 3.000% and a due date
of 1/1/47, valued at $68,340,001)			67,000,000	67,000,000

Interest in $300,468,000 joint tri-party repurchase agreement dated
1/31/17 with Merrill Lynch, Pierce, Fenner and Smith, Inc. due 2/1/17 — maturity
value of $106,315,624 for an effective yield of 0.550% (collateralized by various
mortgage backed securities with coupon rates ranging from 2.500% to 3.000%
and due dates ranging from 2/1/30 to 1/1/47, valued at $306,477,361)			106,314,000	106,314,000

Interest in $275,000,000 joint tri-party repurchase agreement dated
1/31/17 with RBC Capital Markets, LLC due 2/1/17 — maturity value of
$105,001,546 for an effective yield of 0.530% (collateralized by various
mortgage backed securities with coupon rates ranging from zero % to 6.055%
and due dates ranging from 1/1/19 to 1/1/47, valued at $280,508,103)			105,000,000	105,000,000

Total repurchase agreements (cost $1,209,323,000)				$1,209,323,000


		Maturity	Principal
COMMERCIAL PAPER (26.3%)*	Yield (%)	date	amount	Value

ABN AMRO Funding USA, LLC 144A	0.862	2/2/17	$12,000,000	$11,999,423

American Honda Finance Corp.	1.003	5/23/17	8,000,000	7,978,496

American Honda Finance Corp.	0.902	4/24/17	18,000,000	17,966,925

Apple, Inc.	0.882	5/1/17	25,000,000	24,951,250

Australia & New Zealand Banking Group, Ltd. (Australia)	0.972	3/22/17	12,000,000	11,986,667

Bank of New York Mellon Corp. (The)	0.902	4/10/17	15,000,000	14,977,173

BMW US Capital, LLC	0.700	2/8/17	11,000,000	10,998,360

BPCE SA (France)	0.740	2/1/17	5,500,000	5,499,894

BPCE SA (France)	0.670	2/6/17	20,000,000	19,997,696

Coca-Cola Co. (The)	0.862	5/11/17	25,000,000	24,943,750

Commonwealth Bank of Australia 144A (Australia)	1.166	8/4/17	5,000,000	4,999,385

Commonwealth Bank of Australia 144A (Australia)	1.146	8/17/17	10,000,000	10,003,250

Cooperatieve Rabobank UA/NY (Netherlands)	0.903	3/8/17	15,000,000	14,988,960

Danaher Corp.	0.801	2/7/17	15,000,000	14,998,046

Danske Corp. (Denmark)	0.892	2/1/17	28,500,000	28,499,276

DnB Bank ASA (Norway)	1.075	4/25/17	3,390,000	3,382,770

DnB Bank ASA 144A (Norway)	1.269	1/19/18	5,000,000	4,999,505

Experian Finance PLC (United Kingdom)	1.001	3/6/17	12,000,000	11,989,267

Experian Finance PLC (United Kingdom)	0.850	2/6/17	13,000,000	12,998,009

Export Development Canada (Canada)	0.701	2/1/17	29,250,000	29,249,517

HSBC USA, Inc. 144A	1.243	4/6/17	5,000,000	4,992,778

HSBC USA, Inc. 144A	1.236	5/3/17	15,000,000	15,010,185

ING US Funding, LLC	0.942	3/3/17	14,000,000	13,990,428

International Business Machines Corp.	0.680	2/1/17	24,000,000	23,999,604

Lloyds Bank PLC (United Kingdom)	0.992	4/25/17	12,000,000	11,974,408

Medtronic Global Holdings SCA (Luxembourg)	0.981	2/21/17	11,000,000	10,994,020

Medtronic Global Holdings SCA (Luxembourg)	0.830	2/10/17	2,000,000	1,999,533

Microsoft Corp.	0.732	2/7/17	28,000,000	27,996,570

National Australia Bank, Ltd. 144A (Australia)	1.273	12/12/17	18,000,000	18,011,106

14 Short Term Investment Fund


		Maturity	Principal
COMMERCIAL PAPER (26.3%)* cont.	Yield (%)	date	amount	Value

Nationwide Building Society (United Kingdom)	0.922	2/22/17	$22,500,000	$22,487,859

Nestle Finance International, Ltd. (Switzerland)	0.882	4/17/17	25,000,000	24,959,889

Procter & Gamble Co. (The)	0.620	2/1/17	1,500,000	1,499,975

Simon Property Group LP	0.800	2/6/17	21,000,000	20,997,659

Societe Generale SA (France)	0.510	2/1/17	22,750,000	22,749,978

Stanley Black & Decker, Inc.	0.850	2/1/17	13,600,000	13,599,992

Swedbank AB (Sweden)	1.177	7/28/17	25,000,000	24,858,218

Swedbank AB (Sweden)	0.530	2/1/17	25,000,000	24,999,943

Toronto-Dominion Holdings USA, Inc. 144A (Canada)	1.053	3/20/17	17,800,000	17,782,912

Total Capital Canada Ltd. (Canada)	0.932	4/19/17	20,000,000	19,954,587

Toyota Motor Credit Corp.	0.955	6/5/17	28,000,000	28,000,952

UnitedHealth Group, Inc.	0.992	3/20/17	12,000,000	11,984,480

UnitedHealth Group, Inc.	0.790	2/1/17	13,000,000	12,999,955

Westpac Banking Corp. 144A (Australia)	1.216	3/8/17	32,000,000	32,014,399

Total commercial paper (cost $695,191,318)				$695,267,049


		Maturity	Principal
ASSET-BACKED COMMERCIAL PAPER (12.5%)*	Yield (%)	date	amount	Value

Alpine Securitization, Ltd. (Cayman Islands)	1.084	2/24/17	$5,000,000	$4,997,400

Alpine Securitization, Ltd. (Cayman Islands)	1.083	2/3/17	5,000,000	4,999,719

Atlantic Asset Securitization, LLC	1.053	3/1/17	3,000,000	2,997,832

Bedford Row Funding Corp.	0.700	2/7/17	13,000,000	12,998,306

CAFCO, LLC	1.003	3/15/17	26,000,000	25,973,821

Chariot Funding, LLC 144A	0.901	3/9/17	22,000,000	21,981,390

CHARTA, LLC	1.033	3/20/17	6,500,000	6,492,547

CHARTA, LLC	0.952	3/16/17	7,500,000	7,492,236

CHARTA, LLC	0.943	2/24/17	11,000,000	10,994,280

Collateralized Commercial Paper Co., LLC	1.003	3/9/17	10,000,000	9,991,541

Collateralized Commercial Paper II Co., LLC	1.105	4/24/17	18,000,000	17,957,878

CRC Funding, LLC	0.963	3/8/17	30,000,000	29,975,400

Fairway Finance Co., LLC (Canada)	0.650	2/1/17	14,472,000	14,471,995

Gotham Funding Corp. (Japan)	1.023	3/6/17	23,000,000	22,982,340

Liberty Street Funding, LLC (Canada)	1.073	4/17/17	1,000,000	997,931

Manhattan Asset Funding Co., LLC (Japan)	0.901	2/3/17	10,750,000	10,749,395

Manhattan Asset Funding Co., LLC (Japan)	0.831	2/8/17	6,000,000	5,999,059

Manhattan Asset Funding Co., LLC (Japan)	0.821	2/21/17	8,000,000	7,996,407

MetLife Short Term Funding, LLC 144A	0.902	2/27/17	25,000,000	24,985,750

MetLife Short Term Funding, LLC 144A	0.701	2/7/17	5,000,000	4,999,349

Old Line Funding, LLC 144A	1.030	3/13/17	4,500,000	4,499,951

Old Line Funding, LLC 144A	0.968	5/18/17	13,000,000	12,999,623

Regency Markets No. 1, LLC	0.770	2/9/17	8,000,000	7,998,576

Thunder Bay Funding, LLC 144A	1.155	6/9/17	25,300,000	25,191,663

Victory Receivables Corp. (Japan)	1.103	3/14/17	5,000,000	4,993,934

Working Capital Management Co. (Japan)	1.033	3/14/17	13,000,000	12,987,260

Working Capital Management Co. 144A (Japan)	1.003	3/6/17	13,000,000	12,990,019

Total asset-backed commercial paper (cost $331,673,228)				$331,695,602

Short Term Investment Fund 15


		Maturity	Principal
CERTIFICATES OF DEPOSIT (8.2%)*	Yield (%)	date	amount	Value

Bank of America, NA	0.880	3/3/17	$30,000,000	$29,998,980

Bank of Montreal/Chicago, IL FRN (Canada)	1.218	4/17/17	23,500,000	23,515,205

Bank of Montreal/Chicago, IL FRN (Canada)	1.166	7/6/17	3,500,000	3,500,406

Bank of Nova Scotia/Houston FRN	1.378	3/17/17	15,000,000	15,010,815

Bank of Nova Scotia/Houston FRN	1.302	4/4/17	12,000,000	12,009,144

Canadian Imperial Bank of Commerce/New
York, NY FRN	1.327	3/20/17	20,000,000	20,013,560

Citibank, NA	0.940	3/2/17	15,000,000	15,002,352

Citibank, NA	0.880	2/21/17	17,000,000	17,001,270

National Australia Bank, Ltd./New York FRN (Australia)	1.306	6/8/17	8,000,000	8,006,312

Royal Bank of Canada/New York, NY FRN (Canada)	1.422	10/13/17	5,000,000	5,006,965

Royal Bank of Canada/New York, NY FRN (Canada)	1.251	12/8/17	7,300,000	7,302,292

Skandinaviska Enskilda Banken AB/New York, NY FRN	1.326	2/6/17	14,200,000	14,201,562

Skandinaviska Enskilda Banken AB/New York, NY FRN	1.213	4/26/17	15,000,000	15,009,360

Toronto-Dominion Bank/NY FRN (Canada)	1.221	2/1/17	7,000,000	7,000,112

Wells Fargo Bank, NA	1.261	11/16/17	25,000,000	25,019,450

Total certificates of deposit (cost $217,504,283)				$217,597,785


		Maturity	Principal
TIME DEPOSITS (4.4%)*	Yield (%)	date	amount	Value

Australia & New Zealand Banking Group, Ltd./Cayman
Islands (Cayman Islands)	0.580	2/1/17	$25,750,000	$25,750,000

BNP Paribas/Cayman Islands (France)	0.660	2/1/17	25,750,000	25,750,000

Credit Agricole Corporate and Investment Bank/Grand
Cayman (Cayman Islands)	0.560	2/1/17	13,000,000	13,000,000

National Australia Bank, Ltd./Cayman Islands
(Cayman Islands)	0.550	2/1/17	25,750,000	25,750,000

Svenska Handelsbanken/Cayman Islands (Sweden)	0.550	2/1/17	25,750,000	25,750,000

Total time deposits (cost $116,000,000)				$116,000,000


		Maturity	Principal
U.S. GOVERNMENT AGENCY OBLIGATIONS (1.7%)*	Yield (%)	date	amount	Value

Federal Home Loan Mortgage Corporation unsec.
discount notes Ser. RB	0.446	2/7/17	$43,189,000	$43,186,106

Federal National Mortgage Association unsec.
discount notes	0.501	2/1/17	1,759,000	1,759,000

Total U.S. government agency obligations (cost $44,944,791)				$44,945,106


		Maturity	Principal
U.S. TREASURY OBLIGATIONS (1.1%)*	Yield (%)	date	amount	Value

U.S. Treasury Bills	0.571	5/11/17	$30,000,000	$29,959,380

Total U.S. treasury obligations (cost $29,953,676)				$29,959,380


TOTAL INVESTMENTS

Total investments (cost $2,644,590,296)				$2,644,787,922

16 Short Term Investment Fund

Key to holding’s abbreviations


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

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 August 1, 2016 through January 31, 2017 (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 $2,643,503,299.

^IRRepurchase agreements with a maturity of more than seven days are considered to be illiquid investments.

Debt obligations are considered secured unless otherwise indicated.

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

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

DIVERSIFICATION BY COUNTRY

Distribution of investments by country of risk at the close of the reporting period, excluding collateral received, if any (as a percentage of Portfolio Value):


United States	74.8%	United Kingdom	2.2%

Canada	4.9	Denmark	1.1

Australia	3.2	Switzerland	0.9

Japan	3.0	Netherlands	0.6

Sweden	2.9	Luxembourg	0.5

Cayman Islands	2.8	Norway	0.3

France	2.8	Total	100.0%

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

Asset-backed commercial paper	$—	$331,695,602		$—

Certificates of deposit	—	217,597,785		—

Commercial paper	—	695,267,049		—

Repurchase agreements	—	1,209,323,000		—

Time deposits	—	116,000,000		—

U.S. government agency obligations	—	44,945,106		—

U.S. treasury obligations	—	29,959,380		—

Totals by level	$—	$2,644,787,922		$—

During the reporting period, transfers within the fair value hierarchy, if any, 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 accompanying notes are an integral part of these financial statements.

Short Term Investment Fund 17

Statement of assets and liabilities 1/31/17 (Unaudited)


ASSETS

Investment in securities, at value (Note 1):
Unaffiliated issuers (identified cost $1,435,267,296)	$1,435,464,922
Repurchase agreements (identified cost $1,209,323,000)	1,209,323,000

Cash	811

Interest and other receivables	620,114

Receivable for shares of the fund sold	24,409,110

Total assets	2,669,817,957


LIABILITIES

Payable for shares of the fund repurchased	21,822,268

Payable for custodian fees (Note 2)	44,934

Payable for investor servicing fees (Note 2)	41,933

Payable for Trustee compensation and expenses (Note 2)	194,501

Payable for administrative services (Note 2)	25,235

Distributions payable to shareholders	4,077,798

Other accrued expenses	107,989

Total liabilities	26,314,658

Net assets	$2,643,503,299


REPRESENTED BY

Paid-in capital (Unlimited shares authorized) (Notes 1 and 4)	$2,643,330,870

Distributions in excess of net investment income (Note 1)	(33,972)

Accumulated net realized gain on investments (Note 1)	8,775

Net unrealized appreciation of investments	197,626

Total — Representing net assets applicable to capital shares outstanding	$2,643,503,299


COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE

Net asset value, offering price and redemption price per class P share
($2,643,503,299 divided by 2,643,330,870 shares)	$1.00

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

18 Short Term Investment Fund

Statement of changes in net assets


DECREASE IN NET ASSETS	Six months ended 1/31/17*	Year ended 7/31/16

Operations

Net investment income	$7,818,418	$10,166,697

Net realized gain (loss) on investments	(1)	8,776

Net unrealized appreciation of investments	122,965	31,858

Net increase in net assets resulting from operations	7,941,382	10,207,331

Distributions to shareholders (Note 1):
From ordinary income
Net investment income

Class P	(7,894,602)	(10,223,385)

Decrease from capital share transactions (Note 4)	(673,698,273)	(294,683,020)

Total decrease in net assets	(673,651,493)	(294,699,074)


NET ASSETS

Beginning of period	3,317,154,792	3,611,853,866

End of period (including distributions in excess of net
investment income of $33,972 and undistributed net
investment income of $42,212, respectively)	$2,643,503,299	$3,317,154,792

^*Unaudited.

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

20 Short Term Investment Fund

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

INVESTMENT OPERATIONS

LESS DISTRIBUTIONS

RATIOS AND SUPPLEMENTAL DATA

Ratio

Net realized

of net investment

Net asset value,

and unrealized

Total from

From

Total return

Net assets,

Ratio of expenses

income (loss)

beginning

Net investment

gain (loss)

investment

net investment

Total

Net asset value,

at net asset value

end of period

to average

Portfolio

Period ended

of period

income (loss)

on investments^a

operations

income

distributions

end of period

(%)^b

(in thousands)

net assets (%)^c,d

net assets (%)^d

turnover (%)

Class P

January 31, 2017^**

$1.00

0.0027

—

0.0027

(0.0028)

(0.0028)

$1.00

.28^*

$2,643,503

.02^*

.27^*

— ^*

July 31, 2016

1.00

0.0031

—

0.0031

(0.0031)

(0.0031)

1.00

.31

3,317,155

.03

.31

—

July 31, 2015

1.00

0.0009

—

0.0009

(0.0008)

(0.0008)

1.00

.08

3,611,854

.03

.09

July 31, 2014

1.00

0.0007

—

0.0007

(0.0007)

(0.0007)

1.00

.07

3,510,328

.03

.07

July 31, 2013^†

1.00

0.0002

—

0.0002

(0.0002)

(0.0002)

1.00

.02^*

2,682,411

.03^*

.02^*

—

^*Not annualized.

^**Unaudited.

^†For the period February 19, 2013 (commencement of operations) to July 31, 2013.

^aAmount represents less than $0.0001 per share.

^bTotal return assumes dividend reinvestment.

^cIncludes amounts paid through expense offset arrangements, if any (Note 2). Also excludes acquired fund fees and expenses, if any.

^dReflects an involuntary contractual expense limitation in effect during the period. As a result of such limitation, the expenses of the fund reflect a reduction of the following amounts (Note 2):


	Percentage of
	average net assets

January 31, 2017	0.13%

July 31, 2016	0.25

July 31, 2015	0.25

July 31, 2014	0.25

July 31, 2013	0.11

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


22 Short Term Investment Fund	Short Term Investment Fund 23

Notes to financial statements 1/31/17 (Unaudited)

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 August 1, 2016 through January 31, 2017.

Putnam Short Term Investment 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 as high a rate of current income as Putnam Management believes is consistent with preservation of capital and maintenance of liquidity. The fund invests in a diversified portfolio of fixed-income securities comprised of short duration, investment-grade money market and other fixed-income securities. The fund’s investments may include obligations of the U.S. government, its agencies and instrumentalities, which are backed by the full faith and credit of the United States (e.g., U.S. Treasury bonds and Ginnie Mae mortgage-backed bonds) or by only the credit of a federal agency or government-sponsored entity (e.g., Fannie Mae or Freddie Mac mortgage-backed bonds), domestic corporate debt obligations, municipal debt securities, securitized debt instruments (such as mortgage- and asset-backed securities), repurchase agreements, certificates of deposit, bankers acceptances, commercial paper (including asset-backed commercial paper), time deposits, Yankee Eurodollar securities and other money market instruments. The fund may also invest in U.S. dollar-denominated foreign securities of these types. Under normal circumstances, the effective duration of the fund’s portfolio will generally not be greater than one year. Effective duration provides a measure of a fund’s interest-rate sensitivity. The longer a fund’s duration, the more sensitive the fund is to shifts in interest rates. The fund will maintain a dollar-weighted average portfolio maturity of three years or less. Putnam Management may consider, among other factors, credit, interest rate and prepayment risks, as well as general market conditions, when deciding whether to buy or sell investments. The fund may also use derivatives, such as futures, options, and swap contracts, for both hedging and non-hedging purposes.

The fund offers class P shares, which are sold without a front-end sales charge and generally are not subject to a contingent deferred sales charge. Class P shares are only available to other Putnam funds and other accounts managed by Putnam Management or its affiliates. Shares of the fund are sold at net asset value.

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.

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.

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

24 Short Term Investment Fund

is responsible for making fair value determinations, evaluating the effectiveness of the pricing policies of the fund and reporting to the Pricing Committee.

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. 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, 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. 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.

Joint trading account Pursuant to an exemptive order from the SEC, the fund may transfer uninvested cash balances into a joint trading account along with the cash of other registered investment companies and certain other accounts managed by Putnam Management. These balances may be invested in issues of short-term investments having maturities of up to 90 days.

Repurchase agreements The fund, or any joint trading account, through its custodian, receives delivery of the underlying securities, the fair value of which at the time of purchase is required to be in an amount at least equal to the resale price, including accrued interest. Collateral for certain tri-party repurchase agreements is held at the counterparty’s custodian in a segregated account for the benefit of the fund and the counterparty. Putnam Management is responsible for determining that the value of these underlying securities is at all times at least equal to the resale price, including accrued interest. In the event of default or bankruptcy by the other party to the agreement, retention of the collateral may be subject to legal proceedings.

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.

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

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 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.

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

Short Term Investment Fund 25

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 aggregate identified cost on a tax basis is $2,644,590,296, resulting in gross unrealized appreciation and depreciation of $222,720 and $25,094, respectively, or net unrealized appreciation of $197,626.

Distributions to shareholders Income dividends are recorded daily by the fund and are paid monthly. 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. Dividend sources are estimated at the time of declaration. Actual results may vary. Any non-taxable return of capital cannot be determined until final tax calculations are completed after the end of the fund’s fiscal year. 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.

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 for management and investment advisory services monthly based on the average net assets of the fund. Such fee is based on the annual rate of 0.25% of the average net assets of the fund. Putnam Management has contractually agreed to waive its management fee from the fund through November 30, 2017. During the reporting period, the fund waived $3,679,283 as a result of this waiver.

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 0.20% of the average net assets of the portion of the fund managed by PIL.

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

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

Putnam Investor Services, Inc., an affiliate of Putnam Management, provides investor servicing agent functions to the fund. Putnam Investor Services, Inc. was paid a monthly fee for investor servicing at an annual rate of 0.01% of the fund’s average net assets. The amounts incurred for investor servicing agent functions during the reporting period are included in Investor servicing fees in the Statement of operations.

The fund has entered into expense offset arrangements with Putnam Investor Services, Inc. and State Street whereby Putnam Investor Services, Inc.’s and State Street’s fees are reduced by credits allowed on cash balances. For the reporting period, the fund’s expenses were reduced by $67 under the expense offset arrangements.

Each Independent Trustee of the fund receives an annual Trustee fee, of which $1,784, 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.

26 Short Term Investment Fund

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 not adopted a distribution plan pursuant to Rule 12b–1 under the Investment Company Act of 1940.

Note 3: Purchases and sales of securities

During the reporting period, the cost of purchases and the proceeds from sales (including maturities) of short-term investment securities aggregated $121,013,225,116 and $121,578,965,602, respectively.

During the reporting period, the cost of purchases and the proceeds from sales of long-term investment securities were as follows:


	Cost of purchases	Proceeds from sales

Investments in securities (Long-term)	$—	$—

U.S. government securities (Long-term)	—	77,650,000

Total	$—	$77,650,000

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.

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:


	SIX MONTHS ENDED 1/31/17		YEAR ENDED 7/31/16
Class P	Shares	Amount	Shares	Amount

Shares sold	7,185,080,551	$7,185,080,551	16,816,320,587	$16,816,320,587

Shares issued in connection with
reinvestment of distributions	—	—	—	—

	7,185,080,551	7,185,080,551	16,816,320,587	16,816,320,587

Shares repurchased	(7,858,778,824)	(7,858,778,824)	(17,111,003,607)	(17,111,003,607)

Net decrease	(673,698,273)	$(673,698,273)	(294,683,020)	$(294,683,020)

Note 5: 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.

Short Term Investment Fund 27

Note 6: 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.


	Bank of Nova Scotia	Barclays Capital, Inc.	BNP Paribas	Citigroup Global Markets, Inc.	Goldman, Sachs & Co.	HSBC Bank USA, National Association	J. P. Morgan Securities, LLC	Merrill Lynch, Pierce, Fenner and Smith, Inc.	RBC Capital Markets, LLC	Total

Assets:

Repurchase agreements^**	$76,000,000	$137,971,000	$106,464,000	$246,574,000	$159,000,000	$105,000,000	$100,000,000	$173,314,000	$105,000,000	$1,209,323,000

Total Assets	$76,000,000	$137,971,000	$106,464,000	$246,574,000	$159,000,000	$105,000,000	$100,000,000	$173,314,000	$105,000,000	$1,209,323,000

Liabilities:

Total Liabilities	$—	$—	$—	$—	$—	$—	$—	$—	$—	$—

Total Financial and Derivative	$76,000,000	$137,971,000	$106,464,000	$246,574,000	$159,000,000	$105,000,000	$100,000,000	$173,314,000	$105,000,000	$1,209,323,000
Net Assets

Total collateral received (pledged)^†##	$76,000,000	$137,971,000	$106,464,000	$246,574,000	$159,000,000	$105,000,000	$100,000,000	$173,314,000	$105,000,000

Net amount	$—	$—	$—	$—	$—	$—	$—	$—	$—

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

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

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

Note 7: New pronouncements

In October 2016, the SEC 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 their impact, if any, on the fund’s financial statements.


28 Short Term Investment Fund	Short Term Investment Fund 29

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

30 Short Term Investment Fund


Absolute Return	Retirement Income Fund Lifestyle 1 — a portfolio
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^®
	RetirementReady^® Funds — portfolios with
Global Sector	adjusting allocations to stocks, bonds, and
Global Consumer Fund	money market instruments, becoming more
Global Energy Fund	conservative over time.
Global Financials Fund
Global Health Care Fund	RetirementReady^® 2060 Fund
Global Industrials Fund	RetirementReady^® 2055 Fund
Global Natural Resources Fund	RetirementReady^® 2050 Fund
Global Sector Fund	RetirementReady^® 2045 Fund
Global Technology Fund	RetirementReady^® 2040 Fund
Global Telecommunications Fund	RetirementReady^® 2035 Fund
Global Utilities Fund	RetirementReady^® 2030 Fund
	RetirementReady^® 2025 Fund
Asset Allocation	RetirementReady^® 2020 Fund
George Putnam Balanced Fund

Global Asset Allocation Funds — four
investment portfolios that spread your money
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.

Short Term Investment Fund 31

Services for shareholders

Investor services

Systematic investment plan Tell us how much you wish to invest regularly — weekly, semimonthly, or monthly — and the amount you choose will be transferred automatically from your checking or savings account. There’s no additional fee for this service, and you can suspend it at any time. This plan may be a great way to save for college expenses or to plan for your retirement.

Please note that regular investing does not guarantee a profit or protect against loss in a declining market. Before arranging a systematic investment plan, consider your financial ability to continue making purchases in periods when prices are low.

Systematic exchange You can make regular transfers from one Putnam fund to another Putnam fund. There are no additional fees for this service, and you can cancel or change your options at any time.

Dividends PLUS You can choose to have the dividend distributions from one of your Putnam funds automatically reinvested in another Putnam fund at no additional charge.

Free exchange privilege You can exchange money between Putnam funds free of charge, as long as they are the same class of shares. A signature guarantee is required if you are exchanging more than $500,000. The fund reserves the right to revise or terminate the exchange privilege.

Reinstatement privilege If you’ve sold Putnam shares or received a check for a dividend or capital gain, you may reinvest the proceeds with Putnam within 90 days of the transaction and they will be reinvested at the fund’s current net asset value — with no sales charge. However, reinstatement of class B shares may have special tax consequences. Ask your financial or tax representative for details.

Check-writing service You have ready access to many Putnam accounts. It’s as simple as writing a check, and there are no special fees or service charges. For more information about the check-writing service, call Putnam or visit our website.

Dollar cost averaging When you’re investing for long-term goals, it’s time, not timing, that counts. Investing on a systematic basis is a better strategy than trying to figure out when the markets will go up or down. This means investing the same amount of money regularly over a long period. This method of investing is called dollar cost averaging. When a fund’s share price declines, your investment dollars buy more shares at lower prices. When it increases, they buy fewer shares. Over time, you will pay a lower average price per share.

For more information

Visit the Individual Investors section at putnam.com A secure section of our website contains complete information on your account, including balances and transactions, updated daily. You may also conduct transactions, such as exchanges, additional investments, and address changes. Log on today to get your password.

Call us toll free at 1-800-225-1581 Ask a helpful Putnam representative or your financial advisor for details about any of these or other services, or see your prospectus.

32 Short Term Investment 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-Advisor	Robert J. Darretta	and Clerk
Putnam Investments Limited	Katinka Domotorffy
57–59 St James’s Street	Catharine Hill	Janet C. Smith
London, England SW1A 1LD	John A. Hill	Vice President,
	Paul L. Joskow	Principal Financial Officer,
Marketing Services	Robert E. Patterson	Principal Accounting Officer,
Putnam Retail Management	George Putnam, III	and Assistant Treasurer
One Post Office Square	Robert L. Reynolds
Boston, MA 02109	Manoj Singh	Susan G. Malloy
	W. Thomas Stephens	Vice President and
Custodian		Assistant Treasurer
State Street Bank	Officers
and Trust Company	Robert L. Reynolds	Mark C. Trenchard
	President	Vice President and
Legal Counsel		BSA Compliance Officer
Ropes & Gray LLP	Jonathan S. Horwitz
	Executive Vice President,	Nancy E. Florek
	Principal Executive Officer,	Vice President, Director of
	and Compliance Liaison	Proxy Voting and Corporate
		Governance, Assistant Clerk,
	Robert T. Burns	and Associate Treasurer
	Vice President and
	Chief Legal Officer

This report is for the information of shareholders of Putnam Short Term Investment Fund. 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.


INVESTMENT INCOME

Interest	$8,315,470

Total investment income	8,315,470


EXPENSES

Compensation of Manager (Note 2)	3,679,283

Investor servicing fees (Note 2)	146,057

Custodian fees (Note 2)	34,966

Trustee compensation and expenses (Note 2)	71,267

Administrative services (Note 2)	49,073

Other	195,756

Fees waived and reimbursed by Manager (Note 2)	(3,679,283)

Total expenses	497,119

Expense reduction (Note 2)	(67)

Net expenses	497,052

Net investment income	7,818,418


Net realized loss on investments (Notes 1 and 3)	(1)

Net unrealized appreciation of investments during the period	122,965

Net gain on investments	122,964

Net increase in net assets resulting from operations	$7,941,382


	CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES


	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 reporting period:	August 1, 2016 — January 31, 2017


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


	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:


	UNITED STATES SECURITIES AND EXCHANGE COMMISSION


	FORM N-CSR


	Item 1. Report to Stockholders:


	Item 8. Portfolio Managers of Closed-End Investment Companies


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


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


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


	(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.


	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.


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


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