N-Q 1 a_smallcapgrowth.htm PUTNAM FUNDS TRUST a_smallcapgrowth.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY



Investment Company Act file number: (811-07513)
Exact name of registrant as specified in charter: Putnam Funds Trust
Address of principal executive offices: 100 Federal Street, Boston, Massachusetts 02110
Name and address of agent for service: Robert T. Burns, Vice President
100 Federal Street
Boston, Massachusetts 02110
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: June 30, 2019
Date of reporting period: September 30, 2018



Item 1. Schedule of Investments:













Putnam Small Cap Growth Fund

The fund's portfolio
9/30/18 (Unaudited)
COMMON STOCKS (97.4%)(a)
Shares Value
Aerospace and defense (4.9%)
BWX Technologies, Inc. 69,709 $4,359,601
HEICO Corp.(S) 108,066 10,007,992
Mercury Systems, Inc.(NON) 194,407 10,754,595
25,122,188
Banks (0.9%)
Cadence BanCorporation 171,459 4,478,509
4,478,509
Beverages (1.0%)
MGP Ingredients, Inc.(S) 65,336 5,160,237
5,160,237
Biotechnology (11.9%)
Acceleron Pharma, Inc.(NON) 60,518 3,463,445
Amicus Therapeutics, Inc.(NON)(S) 193,214 2,335,957
Array BioPharma, Inc.(NON) 181,389 2,757,113
Ascendis Pharma A/S ADR (Denmark)(NON) 40,200 2,848,572
Atara Biotherapeutics, Inc.(NON)(S) 46,646 1,928,812
Emergent BioSolutions, Inc.(NON) 137,087 9,024,437
Exact Sciences Corp.(NON)(S) 48,553 3,831,803
Global Blood Therapeutics, Inc.(NON)(S) 52,550 1,996,900
Ironwood Pharmaceuticals, Inc.(NON)(S) 112,622 2,079,002
Ligand Pharmaceuticals, Inc.(NON)(S) 45,449 12,475,296
Loxo Oncology, Inc.(NON)(S) 13,477 2,302,276
Mirati Therapeutics, Inc.(NON)(S) 50,708 2,388,347
Repligen Corp.(NON) 86,469 4,795,571
Sarepta Therapeutics, Inc.(NON)(S) 30,963 5,000,834
Spark Therapeutics, Inc.(NON)(S) 28,942 1,578,786
Vericel Corp.(NON) 111,534 1,578,206
60,385,357
Building products (3.3%)
Patrick Industries, Inc.(NON) 72,097 4,268,142
Trex Co., Inc.(NON) 158,927 12,234,200
16,502,342
Capital markets (5.1%)
Evercore, Inc. Class A 88,892 8,938,091
Focus Financial Partners, Inc. Class A(NON)(S) 168,179 7,981,775
Hamilton Lane, Inc. Class A 208,085 9,214,004
26,133,870
Chemicals (2.8%)
Ferro Corp.(NON) 345,527 8,023,137
Orion Engineered Carbons SA (Luxembourg) 190,459 6,113,734
14,136,871
Commercial services and supplies (0.8%)
BrightView Holdings, Inc.(NON)(S) 261,227 4,192,693
4,192,693
Construction materials (0.7%)
Summit Materials, Inc. Class A 205,568 3,737,226
3,737,226
Diversified consumer services (4.8%)
Bright Horizons Family Solutions, Inc.(NON) 94,077 11,086,034
Chegg, Inc.(NON) 118,212 3,360,767
Grand Canyon Education, Inc.(NON) 87,921 9,917,489
24,364,290
Electronic equipment, instruments, and components (3.2%)
Littelfuse, Inc. 39,965 7,908,674
Novanta, Inc.(NON) 120,905 8,269,902
16,178,576
Entertainment (1.8%)
Live Nation Entertainment, Inc.(NON) 119,360 6,501,539
World Wrestling Entertainment, Inc. Class A 26,800 2,592,364
9,093,903
Health-care equipment and supplies (9.4%)
AxoGen, Inc.(NON)(S) 103,668 3,820,166
CONMED Corp. 78,180 6,193,420
Insulet Corp.(NON) 67,719 7,174,828
Merit Medical Systems, Inc.(NON) 185,318 11,387,791
Penumbra, Inc.(NON) 27,841 4,167,798
Quidel Corp.(NON) 137,439 8,956,900
Tactile Systems Technology, Inc.(NON)(S) 84,868 6,029,871
47,730,774
Health-care providers and services (1.1%)
HealthEquity, Inc.(NON) 60,576 5,718,980
5,718,980
Health-care technology (2.0%)
Tabula Rasa HealthCare, Inc.(NON)(S) 75,760 6,150,954
Teladoc, Inc.(NON)(S) 48,654 4,201,273
10,352,227
Hotels, restaurants, and leisure (3.8%)
Planet Fitness, Inc. Class A(NON) 102,800 5,554,284
Wingstop, Inc. 201,152 13,732,647
19,286,931
Household products (0.8%)
Central Garden & Pet Co. Class A(NON) 124,528 4,126,858
4,126,858
Insurance (1.1%)
Kinsale Capital Group, Inc. 89,054 5,686,988
5,686,988
IT Services (1.0%)
Evo Payments, Inc. Class A(NON)(S) 214,122 5,117,516
5,117,516
Life sciences tools and services (0.6%)
Codexis, Inc.(NON) 170,872 2,930,455
2,930,455
Machinery (4.3%)
Harsco Corp.(NON) 170,746 4,874,798
John Bean Technologies Corp. (JBT) 93,700 11,178,410
Proto Labs, Inc.(NON) 34,290 5,546,408
21,599,616
Media (1.6%)
Cable One, Inc. 8,969 7,925,098
7,925,098
Pharmaceuticals (1.4%)
Aerie Pharmaceuticals, Inc.(NON)(S) 42,605 2,622,338
Medicines Co. (The)(NON)(S) 55,000 1,645,050
Supernus Pharmaceuticals, Inc.(NON) 53,154 2,676,304
6,943,692
Road and rail (1.0%)
Saia, Inc.(NON) 69,461 5,310,293
5,310,293
Semiconductors and semiconductor equipment (2.9%)
Brooks Automation, Inc. 125,476 4,395,424
Entegris, Inc. 120,986 3,502,545
Integrated Device Technology, Inc.(NON) 146,762 6,899,282
14,797,251
Software (16.6%)
2U, Inc.(NON) 63,103 4,744,715
Alteryx, Inc. Class A(NON)(S) 82,977 4,747,114
Blackline, Inc.(NON) 69,445 3,921,559
Envestnet, Inc.(NON) 129,315 7,881,749
Everbridge, Inc.(NON)(S) 141,600 8,161,824
j2 Global, Inc. 41,883 3,470,007
Mimecast, Ltd.(NON) 83,711 3,505,817
Paylocity Holding Corp.(NON) 76,863 6,173,636
Proofpoint, Inc.(NON) 36,499 3,880,939
PROS Holdings, Inc.(NON)(S) 119,060 4,169,481
Q2 Holdings, Inc.(NON) 73,403 4,444,552
QAD, Inc. Class A 120,676 6,836,295
RealPage, Inc.(NON) 191,130 12,595,467
RingCentral, Inc. Class A(NON) 61,095 5,684,890
SVMK, Inc.(NON) 45,858 735,104
Talend SA ADR(NON) 48,302 3,368,581
84,321,730
Specialty retail (5.8%)
At Home Group, Inc.(NON) 234,501 7,393,817
Five Below, Inc.(NON) 132,593 17,245,046
National Vision Holdings, Inc.(NON) 108,785 4,910,555
29,549,418
Trading companies and distributors (2.8%)
H&E Equipment Services, Inc. 126,637 4,784,346
SiteOne Landscape Supply, Inc.(NON)(S) 124,394 9,371,844
14,156,190
Total common stocks (cost $420,743,882) $495,040,079

SHORT-TERM INVESTMENTS (18.5%)(a)
Principal amount/shares Value
Putnam Cash Collateral Pool, LLC 2.25%(AFF) Shares 79,202,145 $79,202,145
Putnam Short Term Investment Fund 2.24%(AFF) Shares 11,085,541 11,085,541
U.S. Treasury Bills 2.04%, 11/8/18 $3,356,000 3,348,667
U.S. Treasury Bills 1.98%, 10/4/18 146,000 145,975
Total short-term investments (cost $93,782,635) $93,782,328

TOTAL INVESTMENTS
Total investments (cost $514,526,517) $588,822,407













Key to holding's abbreviations
ADR American Depository Receipts: represents ownership of foreign securities on deposit with a custodian bank
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 July 1, 2018 through September 30, 2018 (the reporting period). Within the following notes to the portfolio, references to "Putnam Management" represent Putnam Investment Management, LLC, the fund's manager, an indirect wholly-owned subsidiary of Putnam Investments, LLC, references to "ASC 820" represent Accounting Standards Codification 820 Fair Value Measurements and Disclosures and references to "OTC", if any, represent over-the-counter.
(a) Percentages indicated are based on net assets of $508,028,929.
(NON) This security is non-income-producing.
(AFF) Affiliated company. For investments in Putnam Cash Collateral Pool, LLC and Putnam Short Term Investment Fund, the rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period. Transactions during the period with any company which is under common ownership or control were as follows:

Name of affiliate Fair value as of 6/30/18 Purchase cost Sale proceeds Investment income Shares outstanding and fair value as of 9/30/18
Short-term investments
Putnam Cash Collateral Pool, LLC*# $37,057,260 $103,283,294 $61,138,409 $197,764 $79,202,145
Putnam Short Term Investment Fund** 9,465,394 110,443,375 108,823,228 121,423 11,085,541
Total Short-term investments $46,522,654 $213,726,669 $169,961,637 $319,187 $90,287,686
* No management fees are charged to Putnam Cash Collateral Pool, LLC. There were no realized or unrealized gains or losses during the period.
# 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. The fund received cash collateral of $79,202,145, which 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. The rate quoted in the security description is the annualized 7-day yield at the close of the reporting period. At the close of the reporting period, the value of securities loaned amounted to $77,841,789. Certain of these securities were sold prior to the close of the reporting period.
** Management fees charged to Putnam Short Term Investment Fund have been waived by Putnam Management. There were no realized or unrealized gains or losses during the period.

(S) This security is on loan, in part or in entirety, at the close of the reporting period.
Unless otherwise noted, the rates quoted in Short-term investments security descriptions represent the weighted average yield to maturity.
The dates shown on debt obligations are the original maturity dates.

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 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 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. 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.












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*:
    Communication services $17,019,001 $— $—
    Consumer discretionary 73,200,639 — —
    Consumer staples 9,287,095 — —
    Financials 36,299,367 — —
    Health care 134,061,485 — —
    Industrials 86,883,322 — —
    Information technology 120,415,073 — —
    Materials 17,874,097 — —
Total common stocks 495,040,079 — —
Short-term investments 11,085,541 82,696,787 —
Totals by level $506,125,620 $82,696,787 $—
* 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 the Security valuation note above), 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.

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



Item 2. Controls and Procedures:
(a) The registrant's principal executive officer and principal financial officer have concluded, based on their evaluation of the effectiveness of the design and operation of the registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the design and operation of such procedures are generally effective to provide reasonable assurance that information required to be disclosed by the registrant in this report is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms.

(b) Changes in internal control over financial reporting: Not applicable
Item 3. Exhibits:
Separate certifications for the principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are filed herewith.

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

Putnam Funds Trust
By (Signature and Title):
/s/ Janet C. Smith
Janet C. Smith
Principal Accounting Officer
Date: November 28, 2018

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: November 28, 2018

By (Signature and Title):
/s/ Janet C. Smith
Janet C. Smith
Principal Financial Officer
Date: November 28, 2018