Putnam Dynamic
Asset Allocation
Equity Fund

Annual report
5 | 31 | 22

 

Message from the Trustees

July 14, 2022

Dear Fellow Shareholder:

Financial markets in the first half of 2022 have tested the patience of investors. High inflation and rising interest rates have clouded the outlook for the U.S. economy. The Russia-Ukraine War has disrupted global energy markets, while pandemic-driven lockdowns in China have slowed global growth.

These issues, which are important to monitor and may persist for some time, are likely shorter term in nature than your long-term financial goals. History has shown that markets eventually recover from downturns. At Putnam, dedicated and experienced investors are working for you. They are evaluating risks while trying to achieve strong performance for your fund. Learn more in the interview with your fund manager(s) in the following pages.

Thank you for investing with Putnam.

Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results. Share price, principal value, and return will fluctuate, and you may have a gain or a loss when you sell your shares. Performance of class A shares assumes reinvestment of distributions and does not account for taxes. Fund returns in the bar chart do not reflect a sales charge of 5.75%; had they, returns would have been lower. See page 3 and pages 8–9 for additional performance information. For a portion of the periods, the fund had expense limitations, without which returns would have been lower. To obtain the most recent month-end performance, visit putnam.com.

Lipper peer group average is provided by Lipper, a Refinitiv company.

* Putnam Equity Blended Index is an unmanaged index administered by Putnam Management and comprises 75% the Russell 3000 Index, 19% the MSCI EAFE Index (ND), and 6% the MSCI Emerging Markets Index (GD).

 

This comparison shows your fund’s performance in the context of broad market indexes for the 12 months ended 5/31/22. See page 2 and pages 8–9 for additional fund performance information. Index descriptions can be found on pages 13–14.

All Bloomberg indices are provided by Bloomberg Index Services Limited.

 

Brett, please describe investing conditions over the 12-month reporting period.

At the start of the period, stocks were buoyed by a recovering global economy, the lifting of mobility restrictions, and fiscal and monetary stimulus. However, the spread of new Covid-19 variants, high inflation, and a hawkish policy pivot by the U.S. Federal Reserve dampened investor sentiment. In November 2021, the Fed began tapering its bond-buying program and indicated it would raise interest rates in calendar 2022. Despite increased market volatility, stocks posted double-digit gains in the first half of the period.

In the latter half of the period, investor sentiment turned risk averse. Overseas, Russia’s invasion of Ukraine on February 24, 2022, caused a flight to safety. Investors sold off stocks in favor of safer-haven assets, including U.S. Treasuries. The U.S. dollar strengthened, and global commodity prices soared. At the same time, China entered an extended lockdown period to control an outbreak of Covid. Disruptions to the world’s supply chains slowed global growth.

In March 2022, the Fed raised interest rates for the first time since 2018, adding 0.25% to

 

This table shows the fund’s top 10 holdings by percentage of the fund’s net assets as of 5/31/22. Short-term investments and derivatives, if any, are excluded. Holdings may vary over time.

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

 

borrowing costs. Markets factored in several more interest-rate hikes anticipated in 2022. In May, persistent inflation led the Fed to raise interest rates by an additional 0.50%. Policymakers lowered their U.S. annual growth estimates and increased inflation expectations for 2022. Stocks and bonds took a significant downturn.

For the 12-month reporting period, stocks, as measured by the S&P 500 Index, returned –0.30%. The Bloomberg U.S. Aggregate Bond Index, a measure of investment-grade corporate bonds, returned –8.22%. At period-end, the yield on the benchmark 10-year Treasury note had climbed to 2.74% from 1.58% at the start of the period. At times, yields on shorter-term U.S. Treasuries edged above those of longer-term Treasuries. This created a flat or inverted yield curve, which often signals a recession.

How did the fund perform for the reporting period?

The fund returned –6.69%, underperforming its primary, all-equity benchmark, the Russell 3000 Index, which returned –3.68% for the period. The fund also underperformed its secondary, custom benchmark, the Putnam Equity Blended Index, which returned –5.94%.

What investment decisions influenced the fund’s performance relative to its custom benchmark during the reporting period?

Overall, our asset allocation decisions enhanced performance relative to the custom Putnam Equity Blended Index [the benchmark]. Among our asset allocation strategies, a slight underweight position in international equities relative to the benchmark and slight overweight positions in U.S. large-cap core and U.S. large-cap growth relative to the benchmark

ABOUT DERIVATIVES

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

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

Like any other investment, derivatives may not appreciate in value and may lose money. Derivatives may amplify traditional investment risks through the creation of leverage and may be less liquid than traditional securities. And because derivatives typically represent contractual agreements between two financial institutions, derivatives entail “counterparty risk,” which is the risk that the other party is unable or unwilling to pay. Putnam monitors the counterparty risks we assume. For example, Putnam often enters into collateral agreements that require the counterparties to post collateral on a regular basis to cover their obligations to the fund. Counterparty risk for exchange-traded futures and centrally cleared swaps is mitigated by the daily exchange of margin and other safeguards against default through their respective clearinghouses.

 

benefited performance. A slightly underweight position in emerging market equities relative to the benchmark led to a small gain. A slight overweight position in U.S. large-cap value relative to the benchmark led to a small loss.

Security selection did not have a significant impact on performance. Our quantitative strategies in U.S. large-cap core equities and international equities experienced strength over the period. In quantitative strategies, our team analyzes stock market history to identify characteristics of stocks [factors] that have excess risk-adjusted returns. During the period, our valuation and short interest factors were top performers. Our fundamental U.S. large-cap value strategy also lifted fund performance. These gains were mostly offset by weakness from strategic global macroeconomic trades and a negative contribution from our fundamental U.S. large-cap growth and emerging market equity strategies.

How were derivatives used during the reporting period?

We used futures to help the fund’s exposure to market risk, hedge prepayment and interest-rate risks, gain exposure to interest rates, and equitize cash. We also used forward currency contracts to hedge foreign exchange risk and gain exposure to currencies.

What is your near-term outlook for the markets?

Volatility has been a major constant across markets year to date. Rising inflation, supply chain disruptions, monetary policy tightening, and Russia’s invasion of Ukraine have fueled sell-offs in stocks and bonds. Looking ahead, we expect market volatility to persist and investor sentiment to waver given many uncertainties and fears of a looming recession.

Our near-term outlook on equities is slightly favorable. This view is supported by slightly bullish signals from our quantitative model and the Fed’s aggressive efforts to tackle inflation.

In fixed income, our view on credit is modestly bearish. As the pandemic transitions to an endemic, we believe the U.S. credit cycle will emerge close to where it was [in late 2019] before the pandemic began. We also believe the high-yield index has reached peak credit quality with little room for improvement, at least in the near term. Our outlook for rate-sensitive fixed income is neutral. Yields have moved higher due to a significant shift in Fed expectations. By the end of May 2022, the Fed had raised interest rates by a total of 0.75%. Markets have priced in another increase in June followed by several more in 2022. We expect a balanced distribution of outcomes this year.

Against this backdrop, we continue to have conviction in our investment strategies given our ability to adapt the portfolio to changing market conditions.

Thank you, Brett, 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.

Of special interest

The fund had de minimis exposure to Russian securities at the end of the period. Holdings in Russian securities generally experienced sharp declines in value in late February and early March 2022 and have been subject to liquidity and settlement constraints, as well as, in certain cases, U.S. and other governmental sanctions. We are closely monitoring governmental actions, including the issuance of sanctions, and related market developments.

 

Your fund’s performance

This section shows your fund’s performance, price, and distribution information for periods ended May 31, 2022, the end of its most recent fiscal year. In accordance with regulatory requirements for mutual funds, we also include performance 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 not available to all investors. See the Terms and definitions section in this report for definitions of the share classes offered by your fund.

Annualized fund performance Total return for periods ended 5/31/22

 

Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results. After-sales-charge returns for class A shares reflect the deduction of the maximum 5.75% sales charge levied at the time of purchase. Class P shares have no initial sales charge or CDSC. Performance for class P shares prior to their inception is derived from the historical performance of class A shares and has not been adjusted for the lower investor servicing fees applicable to class P shares; had it, returns would have been higher.

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

Comparative annualized index returns For periods ended 5/31/22

 

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

Lipper peer group average is provided by Lipper, a Refinitiv company.

^* Putnam Equity Blended Index is an unmanaged index administered by Putnam Management and comprises 75% the Russell 3000 Index, 19% the MSCI EAFE Index (ND), and 6% the MSCI Emerging Markets Index (GD).

^† Over the 1-year, 3-year, 5-year, 10-year, and life-of-fund periods ended 5/31/22, there were 656, 594, 521, 350, and 272 funds, respectively, in this Lipper category.

 

Past performance does not indicate future results. At the end of the same time period, a $10,000 investment in the fund’s class P shares would have been valued at $29,497.

Fund price and distribution information For the 12-month period ended 5/31/22

 

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

Annualized fund performance as of most recent calendar quarter
Total return for periods ended 6/30/22

 

See the discussion following the fund performance table on page 8 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

 

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 Investment Management, LLC’s contractual obligation to limit certain fund expenses through September 30, 2022. This obligation may be modified or discontinued only with approval of the Board of Trustees.

^† Expense ratios for each class are for the fund’s most recent fiscal half year. As a result of this, ratios may differ from expense ratios based on one-year data in the financial highlights.

Expenses per $1,000

The following table shows the expenses you would have paid on a $1,000 investment in each class of the fund from 12/1/21 to 5/31/22. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.

 

^* Expenses for each share class are calculated using the fund’s annualized expense ratio for each class, which represents the ongoing expenses as a percentage of average net assets for the six months ended 5/31/22. The expense ratio may differ for each share class.

^† Expenses are calculated by multiplying the expense ratio by the average account value for the period; then multiplying the result by the number of days in the period (182); and then dividing that result by the number of days in the year (365).

 

Estimate the expenses you paid

To estimate the ongoing expenses you paid for the six months ended 5/31/22, use the following calculation method. To find the value of your investment on 12/1/21, 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.

 

^* Expenses for each share class are calculated using the fund’s annualized expense ratio for each class, which represents the ongoing expenses as a percentage of average net assets for the six months ended 5/31/22. The expense ratio may differ for each share class.

^† Expenses are calculated by multiplying the expense ratio by the average account value for the six-month period; then multiplying the result by the number of days in the six-month period (182); and then dividing that result by the number of days in the year (365).

 

Consider these risks before investing

The value of investments in the fund’s portfolio may fall or fail to rise over extended periods of time for a variety of reasons, including general economic, political, or financial market conditions; investor sentiment and market perceptions; government actions; geopolitical events or changes; and factors related to a specific issuer, asset class, geography, industry, or sector. These and other factors may lead to increased volatility and reduced liquidity in the fund’s portfolio holdings.

International investing involves currency, economic, and political risks. Emerging market securities carry illiquidity and volatility risks. Investments in small and/or midsize companies increase the risk of greater price fluctuations. Growth stocks may be more susceptible to earnings disappointments, and value stocks may fail to rebound. 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. If the quantitative models or data that are used in managing the fund prove to be incorrect or incomplete, investment decisions made in reliance on the models or data may not produce the desired results and the fund may realize losses.

Our investment techniques, analyses, and judgments may not produce the outcome we intend. The investments we select for the fund may not perform as well as other securities that we do not select for the fund. We, or the fund’s other service providers, may experience disruptions or operating errors that could have a negative effect on the fund. You can lose money by investing in the fund.

 

Terms and definitions

Important terms

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

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

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

Share classes

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

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 only available to other Putnam funds and other accounts managed by Putnam Management or its affiliates.

Comparative indexes

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

ICE BofA (Intercontinental Exchange Bank of America) U.S. 3-Month Treasury Bill Index is an unmanaged index that seeks to measure the performance of U.S. Treasury bills available in the marketplace.

MSCI EAFE Index (ND) is an unmanaged index of equity securities from developed countries in Western Europe, the Far East, and Australasia. Calculated with net dividends (ND), this total return index reflects the reinvestment of dividends after the deduction of withholding taxes, using a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties.

MSCI Emerging Markets Index (GD) is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. Gross total return (GD) indexes reinvest as much as possible of a company’s dividend distributions.

Putnam Equity Blended Index is an unmanaged index representing global stock market performance and comprises 75% the Russell 3000® Index, 19% the MSCI EAFE Index (ND), and 6% the MSCI Emerging Markets Index (GD).

Russell 3000^® Index is an unmanaged index of the 3,000 largest U.S. companies.

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.

BLOOMBERG^®  is a trademark and service mark of Bloomberg Finance L.P. and its affiliates (collectively “Bloomberg”). Bloomberg or Bloomberg’s licensors own all proprietary rights in the Bloomberg Indices. Neither Bloomberg nor Bloomberg’s licensors approve or endorse this material, or guarantee the accuracy or completeness of any information herein, or make any warranty, express or implied, as to the results to be obtained therefrom, and to the maximum extent allowed by law, neither shall have any liability or responsibility for injury or damages arising in connection therewith.

ICE Data Indices, LLC (“ICE BofA”), used with permission. ICE BofA permits use of the ICE BofA indices and related data on an “as is” basis; makes no warranties regarding same; does not guarantee the suitability, quality, accuracy, timeliness, and/or completeness of the ICE BofA indices or any data included in, related to, or derived therefrom; assumes no liability in connection with the

 

use of the foregoing; and does not sponsor, endorse, or recommend Putnam Investments, or any of its products or services.

Frank Russell Company is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. Russell^® is a trademark of Frank Russell Company.

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

 

Other information for shareholders

Proxy voting

Putnam is committed to managing our mutual funds in the best interests of our shareholders. The Putnam funds’ proxy voting guidelines and procedures, as well as information regarding how your fund voted proxies relating to portfolio securities during the 12-month period ended June 30, 2021, are available in the Individual Investors section of putnam.com and on the Securities and Exchange Commission (SEC) website, www.sec.gov. If you have questions about finding forms on the SEC’s website, you may call the SEC at 1-800-SEC-0330. You may also obtain the Putnam funds’ proxy voting guidelines and procedures at no charge by calling Putnam’s Shareholder Services at 1-800-225-1581.

Fund portfolio holdings

The fund will file a complete schedule of its portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-PORT within 60 days of the end of such fiscal quarter. Shareholders may obtain the fund’s Form N-PORT on the SEC’s website at www.sec.gov.

Prior to its use of Form N-PORT, the fund filed its complete schedule of its portfolio holdings with the SEC on Form N-Q, which is available online at www.sec.gov.

Trustee and employee fund ownership

Putnam employees and members of the Board of Trustees place their faith, confidence, and, most importantly, investment dollars in Putnam mutual funds. As of May 31, 2022, Putnam employees had approximately $488,000,000 and the Trustees had approximately $71,000,000 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.

Liquidity risk management program

Putnam, as the administrator of the fund’s liquidity risk management program (appointed by the Board of Trustees), presented the most recent annual report on the program to the Trustees in April 2022. The report covered the structure of the program, including the program documents and related policies and procedures adopted to comply with Rule 22e-4 under the Investment Company Act of 1940, and reviewed the operation of the program from January 2021 through December 2021. The report included a description of the annual liquidity assessment of the fund that Putnam performed in November 2021. The report noted that there were no material compliance exceptions identified under Rule 22e-4 during the period. The report included a review of the governance of the program and the methodology for classification of the fund’s investments. The report also included a discussion of liquidity monitoring during the period, including during the market liquidity challenges caused by the Covid-19 pandemic, and the impact those challenges had on the liquidity of the fund’s investments. Putnam concluded that the program has been operating effectively and adequately to ensure compliance with Rule 22e-4.

 

Important notice regarding Putnam’s privacy policy

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

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

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

 

Audited financial statements

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

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.

 

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of Putnam Funds Trust and Shareholders of
Putnam Dynamic Asset Allocation Equity Fund:

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the fund’s portfolio, of Putnam Dynamic Asset Allocation Equity Fund (one of the funds constituting Putnam Funds Trust, referred to hereafter as the “Fund”) as of May 31, 2022, the related statement of operations for the year ended May 31, 2022, the statement of changes in net assets for each of the two years in the period ended May 31, 2022, including the related notes, and the financial highlights for each of the five years in the period ended May 31, 2022 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of May 31, 2022, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended May 31, 2022 and the financial highlights for each of the five years in the period ended May 31, 2022 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of May 31, 2022 by correspondence with the custodian, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Boston, Massachusetts
July 14, 2022

We have served as the auditor of one or more investment companies in the Putnam Investments family of funds since at least 1957. We have not been able to determine the specific year we began serving as auditor.

 

The fund’s portfolio 5/31/22

COMMON STOCKS (85.3%)*	Shares	Value
Advertising and marketing services (—%)
Publicis Groupe SA (France)	616	$33,720
		33,720
Aerospace and defense (1.5%)
Axon Enterprise, Inc. †	279	28,279
CAE, Inc. (Canada) †	1,207	30,145
Dassault Aviation SA (France)	176	29,796
General Dynamics Corp.	1,062	238,854
HEICO Corp.	249	35,619
Lockheed Martin Corp.	502	220,935
Northrop Grumman Corp.	684	320,091
Raytheon Technologies Corp.	2,243	213,354
Rheinmetall AG (Germany)	228	46,118
		1,163,191
Agency (—%)
Poste Italiane SpA (Italy)	1,520	16,463
		16,463
Agriculture (0.7%)
Archer-Daniels-Midland Co.	361	32,786
Corteva, Inc.	7,701	482,237
Toyo Suisan Kaisha, Ltd. (Japan)	700	26,131
		541,154
Airlines (0.3%)
Copa Holdings SA Class A (Panama) †	519	36,693
Southwest Airlines Co. †	3,588	164,546
		201,239
Automotive (2.1%)
Ford Motor Co.	16,682	228,210
General Motors Co. †	4,006	154,952
Genuine Parts Co.	579	79,167
Porsche Automobil Holding SE (Preference) (Germany)	305	24,944
Rivian Automotive, Inc. Class A †	1,052	33,033
Stellantis NV (Italy)	8,210	123,231
Tesla, Inc. †	922	699,116
Toyota Motor Corp. (Japan)	1,000	16,606
United Rentals, Inc. †	333	99,294
Volkswagen AG (Preference) (Germany)	738	122,622
Volvo AB Class B (Sweden)	1,905	33,461
Yamaha Motor Co., Ltd. (Japan)	1,200	24,269
		1,638,905
Banking (5.1%)
Alinma Bank (Saudi Arabia)	12,748	130,762
Banco Bilbao Vizcaya Argentaria SA (Spain)	22,812	124,914
Banco Santander SA (Spain)	42,077	135,997
Bank Central Asia Tbk PT (Indonesia)	290,300	154,218
Bank Leumi Le-Israel BM (Israel)	10,561	105,183
Bank of America Corp.	9,575	356,190
Bank of Ireland Group PLC (Ireland) †	12,903	87,405
BNP Paribas SA (France)	1,537	87,911

COMMON STOCKS (85.3%)* cont.	Shares	Value
Banking cont.
BOC Hong Kong Holdings, Ltd. (Hong Kong)	12,500	$47,844
China Merchants Bank Co., Ltd. Class H (China)	7,500	47,331
Citigroup, Inc.	10,762	574,799
Commonwealth Bank of Australia (Australia)	63	4,711
DBS Group Holdings, Ltd. (Singapore)	8,300	187,013
East West Bancorp, Inc.	1,200	88,248
Fifth Third Bancorp	885	34,896
Grupo Financiero Banorte SAB de CV Class O (Mexico)	11,208	72,457
ICICI Bank, Ltd. (India)	19,715	189,491
Israel Discount Bank, Ltd. Class A (Israel)	7,036	39,940
JPMorgan Chase & Co.	5,629	744,323
KeyCorp	3,088	61,636
Lloyds Banking Group PLC (United Kingdom)	29,433	16,755
Mitsubishi UFJ Financial Group, Inc. (Japan)	15,500	87,718
Mizrahi Tefahot Bank, Ltd. (Israel)	245	8,062
National Australia Bank, Ltd. (Australia)	241	5,398
PNC Financial Services Group, Inc. (The)	1,069	187,514
Popular, Inc. (Puerto Rico)	420	34,318
State Street Corp.	961	69,663
Sumitomo Mitsui Financial Group, Inc. (Japan)	1,707	52,227
SVB Financial Group †	65	31,757
UBS Group AG (Switzerland)	7,588	142,892
United Overseas Bank, Ltd. (Singapore)	5,000	107,404
Wells Fargo & Co.	742	33,961
Wintrust Financial Corp.	189	16,517
		4,069,455
Beverage (1.4%)
Asahi Group Holdings, Ltd. (Japan)	2,000	67,232
Coca-Cola Co. (The)	5,635	357,146
Coca-Cola Europacific Partners PLC (United Kingdom)	1,545	82,086
Coca-Cola HBC AG (Italy)	1,507	33,231
Diageo PLC (United Kingdom)	4,802	222,991
Keurig Dr Pepper, Inc.	4,600	159,804
PepsiCo, Inc.	1,284	215,391
		1,137,881
Biotechnology (1.1%)
Amgen, Inc.	128	32,863
Exelixis, Inc. †	1,661	30,446
Illumina, Inc. †	105	25,145
Incyte Corp. †	337	25,575
Moderna, Inc. †	694	100,859
Novavax, Inc. †	722	39,948
Regeneron Pharmaceuticals, Inc. †	411	273,208
Vertex Pharmaceuticals, Inc. †	1,397	375,304
		903,348
Broadcasting (—%)
Warner Bros Discovery, Inc. †	1,488	27,454
		27,454

COMMON STOCKS (85.3%)* cont.	Shares	Value
Cable television (0.5%)
Charter Communications, Inc. Class A †	264	$133,830
Cogeco Communications, Inc. (Canada)	596	49,594
Comcast Corp. Class A	4,987	220,824
		404,248
Chemicals (1.5%)
Arkema SA (France)	260	31,503
Asian Paints, Ltd. (India)	711	25,927
Brenntag SE (Germany)	1,058	81,738
Celanese Corp.	226	35,374
CF Industries Holdings, Inc.	341	33,681
Covestro AG (Germany)	705	32,166
Dow, Inc.	534	36,301
DuPont de Nemours, Inc.	2,066	140,178
Eastman Chemical Co.	1,432	157,749
Fertiglobe PLC (United Arab Emirates)	27,070	39,198
Linde PLC	231	74,729
LyondellBasell Industries NV Class A	307	35,075
Nitto Denko Corp. (Japan)	900	65,103
Olin Corp.	689	45,329
PPG Industries, Inc.	790	99,927
Sherwin-Williams Co. (The)	583	156,267
Shin-Etsu Chemical Co., Ltd. (Japan)	700	99,193
		1,189,438
Commercial and consumer services (2.0%)
Aramark	2,828	97,481
Booking Holdings, Inc. †	258	578,839
Booz Allen Hamilton Holding Corp.	467	40,097
Brambles, Ltd. (Australia)	5,032	39,157
Cintas Corp.	93	37,045
CK Hutchison Holdings, Ltd. (Hong Kong)	15,500	109,645
Equifax, Inc.	123	24,917
Expedia Group, Inc. †	193	24,961
FleetCor Technologies, Inc. †	141	35,082
Gartner, Inc. †	661	173,446
Mastercard, Inc. Class A	930	332,819
Network International Holdings PLC (United Arab Emirates) †	11,623	31,799
PayPal Holdings, Inc. †	322	27,438
Sofina SA (Belgium)	33	7,778
Terminix Global Holdings, Inc. †	791	34,337
Worldline SA/France (France) †	650	26,550
		1,621,391
Communications equipment (0.2%)
Ciena Corp. †	604	30,695
Telefonaktiebolaget LM Ericsson Class B (Sweden)	13,250	107,574
		138,269
Computers (5.2%)
Apple, Inc.	19,692	2,930,957
Cisco Systems, Inc./Delaware	6,671	300,529
Dropbox, Inc. Class A †	1,441	30,030

COMMON STOCKS (85.3%)* cont.	Shares	Value
Computers cont.
Fortinet, Inc. †	68	$20,002
MSCI, Inc.	192	84,931
Nutanix, Inc. Class A †	1,337	21,659
Pure Storage, Inc. Class A †	4,471	106,097
Roper Technologies, Inc.	71	31,413
ServiceNow, Inc. †	300	140,241
Snowflake, Inc. Class A †	1,139	145,393
SS&C Technologies Holdings, Inc.	510	32,635
Synopsys, Inc. †	945	301,644
		4,145,531
Conglomerates (0.6%)
3M Co.	201	30,007
AMETEK, Inc.	1,402	170,301
General Electric Co.	685	53,629
Marubeni Corp. (Japan)	9,500	99,581
Mitsubishi Corp. (Japan)	2,700	92,697
		446,215
Construction (0.6%)
Compagnie de Saint-Gobain (France)	1,919	113,834
CRH PLC (Ireland)	5,069	209,756
Eiffage SA (France)	700	69,364
James Hardie Industries PLC (CDI) (Australia)	2,292	59,122
		452,076
Consumer (0.3%)
Chow Tai Fook Jewellery Group, Ltd. (Hong Kong)	13,000	22,480
LVMH Moet Hennessy Louis Vuitton SA (France)	253	162,704
Pandora A/S (Denmark)	691	55,954
		241,138
Consumer finance (0.7%)
Capital One Financial Corp.	947	121,084
Discover Financial Services	231	26,216
OneMain Holdings, Inc.	667	29,388
SLM Corp.	2,084	40,826
Synchrony Financial	1,576	58,375
Visa, Inc. Class A	1,383	293,431
		569,320
Consumer goods (1.3%)
Colgate-Palmolive Co.	3,594	283,243
Estee Lauder Cos., Inc. (The) Class A	436	111,027
L’Oreal SA (France)	412	145,649
Procter & Gamble Co. (The)	3,208	474,399
Ulta Beauty, Inc. †	90	38,079
		1,052,397
Consumer services (0.4%)
Airbnb, Inc. Class A †	444	53,666
DoorDash, Inc. Class A †	388	29,841
JD.com, Inc. Class A (China) †	2,419	68,376
JD.com, Inc. ADR (China) †	585	32,830
MercadoLibre, Inc. (Argentina) †	32	25,148

COMMON STOCKS (85.3%)* cont.	Shares	Value
Consumer services cont.
Netflix, Inc. †	76	$15,005
Uber Technologies, Inc. †	4,894	113,541
		338,407
Containers (—%)
Crown Holdings, Inc.	248	25,901
		25,901
Distribution (0.2%)
Copart, Inc. †	260	29,778
Ferguson PLC (United Kingdom)	773	92,934
ITOCHU Corp. (Japan)	1,700	48,642
		171,354
Electric utilities (1.8%)
AES Corp. (The)	5,546	122,234
Ameren Corp.	1,217	115,846
American Electric Power Co., Inc.	3,648	372,205
Constellation Energy Corp.	1,853	115,035
DTE Energy Co.	250	33,178
Duke Energy Corp.	347	39,044
E.ON SE (Germany)	10,488	106,782
Edison International	482	33,697
Enel SpA (Italy)	7,141	46,387
ENGIE SA (France)	2,797	37,610
Eversource Energy	381	35,174
Exelon Corp.	3,677	180,725
FirstEnergy Corp.	640	27,494
Fortum OYJ (Finland)	1,430	26,475
PPL Corp.	658	19,858
RWE AG (Germany)	785	34,588
Southern Co. (The)	223	16,872
WEC Energy Group, Inc.	338	35,514
Xcel Energy, Inc.	522	39,327
		1,438,045
Electrical equipment (0.8%)
Allegion PLC (Ireland)	222	24,786
Emerson Electric Co.	636	56,388
Fortive Corp.	3,040	187,781
Honeywell International, Inc.	1,288	249,383
Legrand SA (France)	475	41,157
Schneider Electric SE (France)	395	54,871
		614,366
Electronics (4.3%)
Advanced Micro Devices, Inc. †	1,539	156,762
Agilent Technologies, Inc.	962	122,713
Garmin, Ltd.	382	40,347
GoerTek, Inc. Class A (China)	5,900	36,042
Hoya Corp. (Japan)	1,700	181,465
Intel Corp.	687	30,517
Marvell Technology, Inc.	1,857	109,842
MediaTek, Inc. (Taiwan)	2,000	61,962

COMMON STOCKS (85.3%)* cont.	Shares	Value
Electronics cont.
Minebea Mitsumi, Inc. (Japan)	1,500	$27,911
Monolithic Power Systems, Inc.	81	36,482
Murata Manufacturing Co., Ltd. (Japan)	700	45,103
NVIDIA Corp.	4,878	910,821
NXP Semiconductors NV	401	76,094
Qualcomm, Inc.	4,621	661,819
Samsung Electronics Co., Ltd. (South Korea)	4,989	271,686
Sartorius AG (Preference) (Germany)	118	47,572
Shenzhen Inovance Technology Co., Ltd. Class A (China)	4,600	42,253
Shimadzu Corp. (Japan)	1,800	65,923
Sinbon Electronics Co., Ltd. (Taiwan)	3,000	26,759
STMicroelectronics NV (France)	2,147	85,913
Techtronic Industries Co., Ltd. (TTI) (Hong Kong)	4,500	58,369
Texas Instruments, Inc.	456	80,603
Thales SA (France)	1,173	143,167
Vontier Corp.	2,663	71,422
		3,391,547
Energy (oil field) (0.2%)
Halliburton Co.	3,121	126,401
Schlumberger, Ltd.	834	38,331
		164,732
Engineering and construction (—%)
Vinci SA (France)	20	1,930
		1,930
Entertainment (0.5%)
Dolby Laboratories, Inc. Class A	413	32,057
Leejam Sports Co. JSC (Saudi Arabia)	930	24,892
Live Nation Entertainment, Inc. †	1,120	106,456
Sony Group Corp. (Japan)	2,300	216,391
Vail Resorts, Inc.	140	35,309
		415,105
Financial (1.1%)
3i Group PLC (United Kingdom)	1,030	16,508
Ally Financial, Inc.	3,323	146,345
Apollo Global Management, Inc.	2,213	127,558
Carlyle Group, Inc. (The)	915	35,255
Deutsche Boerse AG (Germany)	558	93,616
Hana Financial Group, Inc. (South Korea)	1,451	57,934
Hong Kong Exchanges and Clearing, Ltd. (Hong Kong)	1,000	42,866
KB Financial Group, Inc. (South Korea)	2,962	144,837
London Stock Exchange Group PLC (United Kingdom)	774	72,217
MGIC Investment Corp.	2,496	34,769
Partners Group Holding AG (Switzerland)	86	92,509
		864,414
Food (0.9%)
China Mengniu Dairy Co., Ltd. (China)	17,000	86,796
Coles Group, Ltd. (Australia)	6,866	86,345
Dino Polska SA (Poland) †	719	50,405
Hershey Co. (The)	390	82,567

COMMON STOCKS (85.3%)* cont.	Shares	Value
Food cont.
Jeronimo Martins SGPS SA (Portugal)	3,244	$66,461
Nestle SA (Switzerland)	998	122,119
Nissin Food Products Co., Ltd. (Japan)	400	26,144
Shoprite Holdings, Ltd. (South Africa)	3,567	49,126
Tyson Foods, Inc. Class A	427	38,263
Yakult Honsha Co., Ltd. (Japan)	1,900	104,396
		712,622
Forest products and packaging (0.3%)
Avery Dennison Corp.	397	68,506
WestRock Co.	743	36,028
Weyerhaeuser Co. R	3,196	126,306
		230,840
Gaming and lottery (0.2%)
Aristocrat Leisure, Ltd. (Australia)	2,429	58,712
Boyd Gaming Corp.	520	30,560
Flutter Entertainment PLC (Ireland) †	178	21,925
La Francaise des Jeux SAEM (France)	679	24,781
		135,978
Health care services (2.4%)
AmerisourceBergen Corp.	247	38,233
Anthem, Inc.	582	296,593
Apollo Hospitals Enterprise, Ltd. (India)	708	36,322
Bio-Rad Laboratories, Inc. Class A †	67	36,032
Cardinal Health, Inc.	553	31,145
Cigna Corp.	154	41,317
CVS Health Corp.	336	32,508
Eurofins Scientific (Luxembourg)	385	35,923
HCA Healthcare, Inc.	503	105,831
Humana, Inc.	77	34,976
ICON PLC (Ireland) †	223	49,905
IQVIA Holdings, Inc. †	890	191,573
Laboratory Corp. of America Holdings †	225	55,512
Max Healthcare Institute, Ltd. (India)	9,365	45,848
McKesson Corp.	1,337	439,459
Molina Healthcare, Inc. †	296	85,905
Mouwasat Medical Services Co. (Saudi Arabia)	484	28,114
UnitedHealth Group, Inc.	629	312,475
		1,897,671
Homebuilding (0.4%)
Berkeley Group Holdings PLC (The) (United Kingdom)	518	27,436
Daiwa House Industry Co., Ltd. (Japan)	2,800	67,343
PulteGroup, Inc.	3,416	154,608
Toll Brothers, Inc.	712	35,935
		285,322
Household furniture and appliances (—%)
Dixon Technologies (India), Ltd. (India)	276	13,551
		13,551

COMMON STOCKS (85.3%)* cont.	Shares	Value
Industrial (0.5%)
Carrier Global Corp.	857	$33,689
Johnson Controls International PLC	6,598	359,657
		393,346
Insurance (2.4%)
AIA Group, Ltd. (Hong Kong)	18,600	190,254
Allianz SE (Germany)	150	31,418
Allstate Corp. (The)	258	35,266
American Financial Group, Inc.	232	32,782
American International Group, Inc.	2,905	170,466
Arch Capital Group, Ltd. †	379	17,987
Assured Guaranty, Ltd.	2,407	141,652
Aviva PLC (United Kingdom)	11,299	61,301
AXA SA (France)	5,028	127,177
Axis Capital Holdings, Ltd.	622	36,431
Berkshire Hathaway, Inc. Class B †	307	97,006
Chubb, Ltd.	171	36,131
Dai-ichi Life Holdings, Inc. (Japan)	3,200	65,528
Equitable Holdings, Inc.	4,984	151,563
Everest Re Group, Ltd.	121	34,183
Gjensidige Forsikring ASA (Norway)	1,037	22,623
Japan Post Holdings Co., Ltd. (Japan)	14,900	111,216
Marsh & McLennan Cos., Inc.	202	32,310
MetLife, Inc.	4,029	271,514
NN Group NV (Netherlands)	244	12,148
Old Republic International Corp.	1,319	31,550
Prudential PLC (United Kingdom)	3,817	49,869
Reinsurance Group of America, Inc.	308	38,762
Unum Group	1,454	52,998
W.R. Berkley Corp.	570	40,544
Zurich Insurance Group AG (Switzerland)	94	43,053
		1,935,732
Investment banking/Brokerage (1.7%)
Ameriprise Financial, Inc.	671	185,377
BlackRock, Inc.	50	33,454
Blackstone, Inc.	317	37,339
Charles Schwab Corp. (The)	3,942	276,335
Evercore, Inc. Class A	311	35,516
Exor NV (Netherlands)	543	40,116
Goldman Sachs Group, Inc. (The)	1,790	585,061
Investor AB Class B (Sweden)	3,772	70,835
SEI Investments Co.	545	31,844
Virtu Financial, Inc. Class A	1,010	26,391
		1,322,268
Lodging/Tourism (0.3%)
Hilton Worldwide Holdings, Inc. †	919	129,450
InterContinental Hotels Group PLC (United Kingdom)	550	34,272
Marriott International, Inc./MD Class A †	126	21,619
Travel + Leisure Co.	592	30,257
Wyndham Hotels & Resorts, Inc.	474	37,982
		253,580

COMMON STOCKS (85.3%)* cont.	Shares	Value
Machinery (0.6%)
AGCO Corp.	221	$28,317
Caterpillar, Inc.	144	31,082
CNH Industrial NV (United Kingdom)	2,164	32,262
Cummins, Inc.	150	31,368
Deere & Co.	406	145,259
Donaldson Co., Inc.	565	29,538
Fuji Electric Co., Ltd. (Japan)	700	32,922
Komatsu, Ltd. (Japan)	1,100	27,206
Otis Worldwide Corp.	996	74,102
Spirax_Sarco engineering PLC (United Kingdom)	342	45,576
Toro Co. (The)	399	32,914
		510,546
Manufacturing (0.6%)
A.O. Smith Corp.	541	32,525
Acuity Brands, Inc.	179	31,329
Dover Corp.	215	28,791
Eaton Corp. PLC	1,043	144,560
GEA Group AG (Germany)	1,157	46,133
Graco, Inc.	471	29,814
Nordson Corp.	241	52,509
Parker Hannifin Corp.	66	17,963
Textron, Inc.	1,227	80,111
Toshiba Corp. (Japan)	300	13,452
		477,187
Media (0.4%)
Bollore SA (France)	1,989	10,611
FactSet Research Systems, Inc.	75	28,634
Interpublic Group of Cos., Inc. (The)	813	26,203
Universal Music Group NV (Netherlands)	8,109	182,108
Walt Disney Co. (The) †	283	31,255
		278,811
Medical services (—%)
Service Corp. International	457	32,004
		32,004
Medical technology (2.4%)
Abbott Laboratories	3,704	435,072
ABIOMED, Inc. †	119	31,380
Baxter International, Inc.	451	34,299
Boston Scientific Corp. †	812	33,300
Danaher Corp.	1,127	297,326
Edwards Lifesciences Corp. †	1,355	136,652
Fisher & Paykel Healthcare Corp., Ltd. (New Zealand)	914	12,472
Getinge AB Class B (Sweden)	1,304	37,808
Hologic, Inc. †	956	71,958
IDEXX Laboratories, Inc. †	235	92,031
Intuitive Surgical, Inc. †	494	112,454
Masimo Corp. †	286	40,163
Medtronic PLC	1,741	174,361
QuidelOrtho Corp. †	348	33,070

COMMON STOCKS (85.3%)* cont.	Shares	Value
Medical technology cont.
Sartorius Stedim Biotech (France)	113	$39,038
Shenzhen Mindray Bio-Medical Electronics Co., Ltd. Class A (China)	800	36,308
Sonic Healthcare, Ltd. (Australia)	3,880	101,996
Teleflex, Inc.	99	28,486
Thermo Fisher Scientific, Inc.	342	194,109
		1,942,283
Metals (1.3%)
Alcoa Corp.	524	32,341
Anglo American PLC (London Exchange) (United Kingdom)	3,922	192,010
Anglo American PLC (Johannesburg Exchange) (United Kingdom)	1,487	72,228
BHP Group, Ltd. (ASE Exchange) (Australia)	1,956	62,294
BHP Group, Ltd. (London Exchange) (Australia)	427	13,569
BlueScope Steel, Ltd. (Australia)	2,576	33,351
Freeport-McMoRan, Inc. (Indonesia)	6,139	239,912
Glencore PLC (United Kingdom)	6,036	39,695
Hindalco Industries, Ltd. (India)	4,233	23,050
Misumi Group, Inc. (Japan)	300	6,762
Rio Tinto PLC (United Kingdom)	1,872	135,751
Rio Tinto, Ltd. (Australia)	1,059	86,572
South32, Ltd. (Australia)	7,850	27,971
Vale Indonesia Tbk PT (Indonesia) †	50,400	28,413
Vat Group AG (Switzerland)	40	11,919
		1,005,838
Miscellaneous (—%)
Centre Testing International Group Co., Ltd. Class A (China)	11,002	36,393
		36,393
Natural gas utilities (0.3%)
Eni SpA (Italy)	650	9,846
Kinder Morgan, Inc.	5,306	104,475
NiSource, Inc.	1,170	36,797
Osaka Gas Co., Ltd. (Japan)	1,800	33,620
Tokyo Gas Co., Ltd. (Japan)	3,300	64,343
		249,081
Oil and gas (4.2%)
APA Corp.	1,079	50,724
BP PLC (United Kingdom)	30,332	164,407
Cheniere Energy, Inc.	252	34,466
Chevron Corp.	1,374	239,983
ConocoPhillips	3,277	368,203
DCC PLC (Ireland)	813	57,531
Enterprise Products Partners LP	3,229	88,539
EOG Resources, Inc.	540	73,958
Equinor ASA (Norway)	3,248	122,963
Exxon Mobil Corp.	4,967	476,832
Marathon Oil Corp.	7,881	247,700
Marathon Petroleum Corp.	943	95,988
Occidental Petroleum Corp.	591	40,962
Orsted AS (Denmark)	184	20,817
Petroleo Brasileiro SA (Preference) (Brazil)	4,800	30,360

COMMON STOCKS (85.3%)* cont.	Shares	Value
Oil and gas cont.
Phillips 66	383	$38,610
PTT Exploration & Production PCL (Thailand)	12,400	61,420
Reliance Industries, Ltd. (India)	5,074	172,113
Shell PLC (London Exchange) (United Kingdom)	12,102	358,425
Shell PLC (Euronext Amsterdan Exchange) (United Kingdom)	6,701	198,921
Targa Resources Corp.	1,663	119,769
Valero Energy Corp.	2,373	307,541
Woodside Energy Group, Ltd. (Australia)	353	7,508
Woodside Energy Group, Ltd. (Australia) †	77	1,644
		3,379,384
Pharmaceuticals (5.4%)
AbbVie, Inc.	3,780	557,058
AstraZeneca PLC (United Kingdom)	1,323	175,031
AstraZeneca PLC ADR (United Kingdom)	3,037	201,900
Bristol-Myers Squibb Co.	1,339	101,028
DexCom, Inc. †	262	78,060
Eli Lilly and Co.	1,599	501,191
Euroapi SA (France) †	45	654
GlaxoSmithKline PLC (United Kingdom)	4,889	106,796
Ipsen SA (France)	429	42,968
Johnson & Johnson	1,440	258,524
Lonza Group AG (Switzerland)	223	134,473
Merck & Co., Inc.	9,167	843,639
Merck KGaA (Germany)	924	173,638
Novartis AG (Switzerland)	2,451	222,510
Novo Nordisk A/S Class B (Denmark)	1,896	209,925
Ono Pharmaceutical Co., Ltd. (Japan)	800	21,140
Pfizer, Inc.	4,582	243,029
Roche Holding AG (Switzerland)	724	246,458
Sanofi (France)	1,496	159,755
		4,277,777
Power producers (0.4%)
NRG Energy, Inc.	5,642	259,758
Vistra Corp.	1,623	42,799
		302,557
Publishing (0.1%)
New York Times Co. (The) Class A	852	29,385
News Corp. Class A	1,557	27,092
Thomson Reuters Corp. (Canada)	598	59,188
		115,665
Railroads (0.8%)
CSX Corp.	8,143	258,866
Union Pacific Corp.	1,612	354,286
		613,152
Real estate (1.8%)
American Campus Communities, Inc. R	630	40,950
Apartment Income REIT Corp. R	674	30,236
AvalonBay Communities, Inc. R	123	25,579
Boston Properties, Inc. R	1,035	115,071

COMMON STOCKS (85.3%)* cont.	Shares	Value
Real estate cont.
Brixmor Property Group, Inc. R	1,177	$28,695
Camden Property Trust R	205	29,415
CBRE Group, Inc. Class A †	1,492	123,597
CK Asset Holdings, Ltd. (Hong Kong)	12,142	79,255
Country Garden Services Holdings Co., Ltd. (China)	5,000	19,579
CubeSmart R	2,154	95,918
Dexus (Australia) R	4,529	34,018
Duke Realty Corp. R	569	30,060
Equity Lifestyle Properties, Inc. R	443	33,535
Extra Space Storage, Inc. R	182	32,432
First Industrial Realty Trust, Inc. R	504	26,788
Gaming and Leisure Properties, Inc. R	4,201	196,691
Goodman Group (Australia) R	7,039	103,377
Iida Group Holdings Co., Ltd. (Japan)	1,300	20,521
Invitation Homes, Inc. R	677	25,536
Jones Lang LaSalle, Inc. †	125	24,665
Lamar Advertising Co. Class A R	297	29,091
Life Storage, Inc. R	742	86,636
New Residential Investment Corp. R	3,301	37,301
Nomura Real Estate Holdings, Inc. (Japan)	1,200	29,983
Prologis, Inc. R	238	30,340
Public Storage R	107	35,378
Simon Property Group, Inc. R	270	30,956
Starwood Property Trust, Inc. R	1,435	34,282
Sumitomo Realty & Development Co., Ltd. (Japan)	600	16,144
		1,446,029
Regional Bells (0.4%)
AT&T, Inc.	13,120	279,325
		279,325
Restaurants (0.3%)
Chipotle Mexican Grill, Inc. †	69	96,776
McDonald’s Corp.	47	11,854
McDonald’s Holdings Co. (Japan), Ltd. (Japan)	1,200	46,687
Starbucks Corp.	1,145	89,883
Wendy’s Co. (The)	1,681	31,334
		276,534
Retail (6.1%)
Amazon.com, Inc. †	591	1,420,876
AutoZone, Inc. †	137	282,172
BJ’s Wholesale Club Holdings, Inc. †	2,081	120,427
Cie Financiere Richemont SA Class A (Switzerland)	276	30,734
Costco Wholesale Corp.	488	227,516
Home Depot, Inc. (The)	627	189,824
Industria de Diseno Textil SA (Spain)	2,473	59,489
JD Sports Fashion PLC (United Kingdom)	40,205	62,213
Koninklijke Ahold Delhaize NV (Netherlands)	3,734	103,097
Li Ning Co., Ltd. (China)	6,000	46,259
Lowe’s Cos., Inc.	169	33,006
Lululemon Athletica, Inc. (Canada) †	390	114,149

COMMON STOCKS (85.3%)* cont.	Shares	Value
Retail cont.
Moncler SpA (Italy)	2,002	$96,233
Nike, Inc. Class B	1,477	175,541
O’Reilly Automotive, Inc. †	783	498,904
Tapestry, Inc.	904	31,188
Target Corp.	2,161	349,822
TJX Cos., Inc. (The)	557	35,408
WalMart de Mexico (Walmex) SAB de CV (Mexico)	24,473	90,503
Walmart, Inc.	5,971	768,050
Wesfarmers, Ltd. (Australia)	2,619	88,622
		4,824,033
Semiconductor (1.1%)
Applied Materials, Inc.	1,079	126,556
ASML Holding NV (Netherlands)	210	121,097
KLA Corp.	105	38,309
Lam Research Corp.	73	37,962
Renesas Electronics Corp. (Japan) †	5,900	69,264
Taiwan Semiconductor Manufacturing Co., Ltd. (Taiwan)	22,000	421,853
Tokyo Electron, Ltd. (Japan)	100	45,795
		860,836
Shipping (0.3%)
A.P. Moeller-Maersck A/S Class B (Denmark)	19	55,265
International Container Terminal Services, Inc. (Philippines)	13,000	53,625
Nippon Yusen KK (Japan)	1,000	82,912
United Parcel Service, Inc. Class B	167	30,436
		222,238
Software (6.4%)
Adobe, Inc. †	1,214	505,607
Atlassian Corp PLC Class A (Australia) †	640	113,485
Autodesk, Inc. †	188	39,057
Cadence Design Systems, Inc. †	2,572	395,393
Electronic Arts, Inc.	265	36,742
Intuit, Inc.	1,301	539,213
Manhattan Associates, Inc. †	356	43,051
Microsoft Corp.	10,526	2,861,704
NTT Data Corp. (Japan)	2,600	40,691
Oracle Corp.	1,557	111,979
Sage Group PLC (The) (United Kingdom)	7,637	63,223
Square Enix Holdings Co., Ltd. (Japan)	1,300	64,557
Tata Consultancy Services, Ltd. (India)	3,305	143,372
Totvs SA (Brazil)	11,281	67,341
Workday, Inc. Class A †	156	24,383
		5,049,798
Staffing (0.1%)
ManpowerGroup, Inc.	414	37,099
Recruit Holdings Co., Ltd. (Japan)	1,600	58,479
		95,578
Technology services (5.5%)
Accenture PLC Class A	2,368	706,753
Alibaba Group Holding, Ltd. (China) †	11,577	139,549

COMMON STOCKS (85.3%)* cont.	Shares	Value
Technology services cont.
Alibaba Group Holding, Ltd. ADR (China) †	191	$18,346
Alphabet, Inc. Class A †	536	1,219,529
Alphabet, Inc. Class C †	253	577,037
Capgemini SE (France)	705	136,932
DocuSign, Inc. †	340	28,529
DXC Technology Co. †	1,146	40,362
eBay, Inc.	596	29,007
Fidelity National Information Services, Inc.	1,566	163,647
GoDaddy, Inc. Class A †	392	29,420
Meituan Class B (China) †	1,200	28,596
Meta Platforms, Inc. Class A †	1,818	352,037
NAVER Corp. (South Korea)	335	77,301
Nomura Research Institute, Ltd. (Japan)	2,600	71,392
Palo Alto Networks, Inc. †	457	229,770
Pinterest, Inc. Class A †	6,190	121,634
Roku, Inc. †	289	27,426
salesforce.com, Inc. †	410	65,698
SCSK Corp. (Japan)	1,000	16,718
Spotify Technology SA (Sweden) †	302	34,057
Tencent Holdings, Ltd. (China)	4,100	188,964
Zebra Technologies Corp. Class A †	166	56,140
		4,358,844
Telecommunications (1.1%)
American Tower Corp. R	1,266	324,261
Crown Castle International Corp. R	1,041	197,426
Koninklijke KPN NV (Netherlands)	19,319	70,383
MTN Group, Ltd. (South Africa)	6,332	68,249
SK Telecom Co., Ltd. (South Korea)	698	32,175
T-Mobile US, Inc. †	703	93,703
Telstra Corp., Ltd. (Australia)	34,943	97,130
		883,327
Telephone (0.6%)
Deutsche Telekom AG (Germany)	1,333	27,366
KDDI Corp. (Japan)	3,800	132,287
Nippon Telegraph & Telephone Corp. (Japan)	3,400	103,347
Verizon Communications, Inc.	4,523	231,985
		494,985
Textiles (0.1%)
Hermes International (France)	77	91,992
		91,992
Tobacco (0.6%)
Imperial Brands PLC (United Kingdom)	4,344	98,115
Philip Morris International, Inc.	3,833	407,244
		505,359
Toys (0.2%)
Nintendo Co., Ltd. (Japan)	300	133,529
		133,529

COMMON STOCKS (85.3%)* cont.	Shares	Value
Transportation services (0.2%)
Deutsche Post AG (Germany)	3,464	$143,234
SG Holdings Co., Ltd. (Japan)	600	10,784
Yamato Holdings Co., Ltd. (Japan)	1,800	31,178
		185,196
Trucks and parts (—%)
Allison Transmission Holdings, Inc.	896	35,849
		35,849
Utilities and power (0.1%)
China Longyuan Power Group Corp., Ltd. Class H (China)	26,000	55,493
		55,493
Waste Management (0.4%)
Clean Harbors, Inc. †	342	31,943
Republic Services, Inc.	1,095	146,555
Waste Connections, Inc.	552	70,402
Waste Management, Inc.	210	33,287
		282,187
Total common stocks (cost $53,702,558)		$67,901,354

INVESTMENT COMPANIES (3.4%)*	Shares	Value
iShares Core MSCI Emerging Markets ETF	3,144	$165,280
iShares MSCI Taiwan ETF (Taiwan)	564	32,182
SPDR S&P 500 ETF Trust	5,341	2,205,459
SPDR S&P MidCap 400 ETF Trust	669	307,225
Total investment companies (cost $2,781,633)		$2,710,146

CONVERTIBLE PREFERRED STOCKS (0.2%)*	Shares	Value
Danaher Corp. 5.00% cv. pfd.	50	$70,995
T-Mobile US, Inc. 144A 5.25% cv. pfd. †	81	92,458
Total convertible preferred stocks (cost $134,129)		$163,453

UNITS (0.1%)*	Units	Value
Banco BTG Pactual SA (Brazil)	10,600	$56,518
Total units (cost $55,003)		$56,518

WARRANTS (0.0%)* †	Expiration date	Strike price	Warrants	Value
Occidental Petroleum Corp.	8/3/27	$22.00	49	$2,320
Total warrants (cost $243)				$2,320

SHORT-TERM INVESTMENTS (11.0%)*		Principal amount/ shares	Value
Interest in $491,698,000 joint tri-party repurchase agreement dated 5/31/2022 with BofA Securities, Inc. due 6/1/2022 — maturity value of $5,588,124 for an effective yield of 0.800% (collateralized by Agency Mortgage-Backed Securities with coupon rates ranging from 1.500% to 5.970% and due dates ranging from 10/1/2028 to 5/1/2052, valued at $501,531,961)		$5,588,000	$5,588,000
Putnam Short Term Investment Fund Class P 0.83% L	Shares	2,600,002	2,600,002
U.S. Treasury Bills 0.814%, 7/12/22 #		$300,000	299,729
U.S. Treasury Bills 0.562%, 6/21/22 #		300,000	299,901
Total short-term investments (cost $8,787,632)			$8,787,632

TOTAL INVESTMENTS
Total investments (cost $65,461,198)	$79,621,423

Key to holding’s abbreviations
ADR	American Depository Receipts: Represents ownership of foreign securities on deposit with a custodian bank.
ETF	Exchange Traded Fund
JSC	Joint Stock Company
SPDR	S&P Depository Receipts

Notes to the fund’s portfolio
	Unless noted otherwise, the notes to the fund’s portfolio are for the close of the fund’s reporting period, which ran from June 1, 2021 through May 31, 2022 (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 and references to “ASC 820” represent Accounting Standards Codification 820 Fair Value Measurements and Disclosures.
*	Percentages indicated are based on net assets of $79,584,613.
†	This security is non-income-producing.
#	This security, in part or in entirety, was pledged and segregated with the broker to cover margin requirements for futures contracts at the close of the reporting period. Collateral at period end totaled $509,647 and is included in Investments in securities on the Statement of assets and liabilities (Notes 1 and 9).
L	Affiliated company (Note 5). The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period.
R	Real Estate Investment Trust.
	At the close of the reporting period, the fund maintained liquid assets totaling $37,588 to cover certain derivative contracts and the settlement of certain securities.
	Unless otherwise noted, the rates quoted in Short-term investments security descriptions represent the weighted average yield to maturity.
	Debt obligations are considered secured unless otherwise indicated.
	144A after the name of an issuer represents securities exempt from registration under Rule 144A 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	77.4%		South Korea	0.7%
Japan	3.5		Hong Kong	0.7
United Kingdom	3.3		Taiwan	0.7
France	2.1		Netherlands	0.7
Switzerland	1.3		Ireland	0.6
Australia	1.3		Indonesia	0.5
Germany	1.3		Other	4.0
China	1.1		Total	100.0%
India	0.8

34 Dynamic Asset Allocation Equity Fund

FORWARD CURRENCY CONTRACTS at 5/31/22 (aggregate face value $3,801,992)
Counterparty	Currency	Contract type*	Delivery date	Value	Aggregate face value	Unrealized appreciation/ (depreciation)
Bank of America N.A.
	Australian Dollar	Buy	7/20/22	$119,500	$127,281	$(7,781)
	Euro	Buy	6/15/22	298,197	309,005	(10,808)
	New Taiwan Dollar	Buy	8/17/22	167,681	165,044	2,637
Citibank, N.A.
	Danish Krone	Sell	6/15/22	89,508	92,783	3,275
	Japanese Yen	Buy	8/17/22	609,698	604,815	4,883
HSBC Bank USA, National Association
	British Pound	Sell	6/15/22	167,972	178,374	10,402
	Chinese Yuan (Offshore)	Buy	8/17/22	561,524	557,501	4,023
	Swedish Krona	Buy	6/15/22	29,419	29,636	(217)
JPMorgan Chase Bank N.A.
	Norwegian Krone	Sell	6/15/22	48,421	50,899	2,478
	Singapore Dollar	Buy	8/17/22	11,971	11,844	127
	South Korean Won	Sell	8/17/22	49,312	48,350	(962)
Morgan Stanley & Co. International PLC
	Euro	Sell	6/15/22	190,885	195,232	4,347
	Swiss Franc	Buy	6/15/22	469,343	488,553	(19,210)
NatWest Markets PLC
	Euro	Sell	6/15/22	190,992	195,333	4,341
	Japanese Yen	Buy	8/17/22	39,839	39,525	314
State Street Bank and Trust Co.
	Swedish Krona	Buy	6/15/22	120,124	120,932	(808)
Toronto-Dominion Bank
	Hong Kong Dollar	Sell	8/17/22	199,242	199,176	(66)
UBS AG
	Canadian Dollar	Sell	7/20/22	129,389	130,939	1,550
WestPac Banking Corp.
	Japanese Yen	Sell	8/17/22	259,732	256,770	(2,962)
Unrealized appreciation						38,377
Unrealized (depreciation)						(42,814)
Total						$(4,437)
* The exchange currency for all contracts listed is the United States Dollar.

FUTURES CONTRACTS OUTSTANDING at 5/31/22
	Number of contracts	Notional amount	Value	Expiration date	Unrealized appreciation/ (depreciation)
MSCI EAFE Index (Long)	3	$305,681	$305,550	Jun-22	$(834)
Russell 2000 Index E-Mini (Long)	46	4,287,299	4,282,370	Jun-22	(332,951)
S&P 500 Index E-Mini (Long)	19	3,925,543	3,924,688	Jun-22	(130,453)
Unrealized appreciation					—
Unrealized (depreciation)					(464,238)
Total					$(464,238)

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: