N-CSR 1 a_intermedtermmuniinc.htm PUTNAM FUNDS TRUST a_intermedtermmuniinc.htm


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

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES



Investment Company Act file number: (811-07513)
Exact name of registrant as specified in charter: Putnam Funds Trust
Address of principal executive offices: 100 Federal Street, Boston, Massachusetts 02110
Name and address of agent for service: Stephen Tate, 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: November 30, 2022
Date of reporting period: December 1, 2021 – November 30, 2022



Item 1. Report to Stockholders:

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


 

 

Message from the Trustees

January 11, 2023

Dear Fellow Shareholder:

As an investor, you might be happy to see 2022 in the rearview mirror. High inflation and aggressive interest-rate increases from the U.S. Federal Reserve contributed to market volatility and negative returns for stocks and bonds.

While inflation and interest rates are still high, the possibility remains that 2023 could be a better year for market returns than 2022. Historically, stocks and bonds have recovered from bear markets like the one we have been experiencing. Our investment teams are actively researching securities with attractive performance potential and working to keep portfolio risks in check.

We would like to note recent changes to the Board of Trustees that oversees your fund. In July 2022, we welcomed Jennifer Williams Murphy and Marie Pillai as new Trustees. Both have a wealth of investment advisory and executive management experience. We also want to thank our Trustees who retired from the Board on June 30, 2022. Paul Joskow served with us since 1997, and Ravi Akhoury joined the Board in 2009. We wish them well.

Thank you for investing with Putnam.


 


Municipal bonds finance important public projects, such as schools, roads, and hospitals. The bonds are backed by the issuing city, town, or other government entity or by revenues collected from usage fees. However, unlike U.S. Treasuries and corporate bonds, the interest paid on municipal bonds is generally free from federal income taxes.

Putnam Intermediate-Term Municipal Income Fund offers an additional advantage — the flexibility to invest in municipal bonds issued by any state or local government in the country. The fund invests mainly in investment-grade bonds and normally maintains an average dollar-weighted maturity of between three and ten years. Because an issuer’s fiscal health can affect the prices of its bonds, this flexibility is a distinct advantage.

Putnam Intermediate-Term Municipal Income Fund offers an active, research-intensive investment approach.


2 Intermediate-Term Municipal Income Fund 

 

 


Sources: Putnam, Bloomberg Index Services Limited, as of 11/30/22. Past performance is no guarantee of future results. Yields for U.S. Treasuries, investment-grade corporates, and municipal bonds are represented by the average “yield to worst” — a calculation of the lowest possible yield generated without defaulting — of the Bloomberg U.S. Treasury Index, an unmanaged index of U.S. dollar-denominated, fixed-rate, nominal debt issued by the U.S. Treasury; the Bloomberg U.S. Corporate Bond Index, an unmanaged index of U.S. dollar-denominated, investment-grade, fixed-rate, taxable corporate bonds; and the Bloomberg Municipal Bond Index, an unmanaged index of long-term, fixed-rate, investment-grade tax-exempt bonds, respectively. You cannot invest directly in an index. 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. Income from municipal bonds may be subject to the alternative minimum tax. Annual after-tax income is based on a 40.80% federal income tax rate. This rate reflects the Tax Cuts and Jobs Act of 2017 and includes the 3.80% Medicare surtax. The income data is based on a hypothetical $100,000 investment.


Source: Moody’s Investors Service, Annual U.S. Municipal Bond Defaults and Recoveries, Five-Year Average Cumulative Default Rates, 1970–2021 (April 2022). Most recent data available.

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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 4.00%; had they, returns would have been lower. See below and pages 9–12 for additional performance information. For a portion of the periods, the fund had expense limitations, without which returns would have been lower. To obtain the most recent month-end performance, visit putnam.com.

All Bloomberg indices are provided by Bloomberg Index Services Limited.

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


This comparison shows your fund’s performance in the context of broad market indexes for the 12 months ended 11/30/22. See above and pages 9–12 for additional fund performance information. Index descriptions can be found on pages 15–16.

All Bloomberg indices are provided by Bloomberg Index Services Limited.

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Garrett, how was the market environment for intermediate-term municipal bonds during the 12-month period ended November 30, 2022?

Despite their healthy credit fundamentals, intermediate-term municipal bonds succumbed to market pressures. Municipal bond prices fell and yields rose as the markets began pricing in a more aggressive Federal Reserve environment and a significantly faster pace of monetary policy tightening. Geopolitical tensions also weighed on investor sentiment.

As investors sought cash, municipal bond funds sold holdings to generate liquidity to meet redemptions. This exerted further downward pressure on prices, contributing to increasingly difficult market technicals [supply/demand dynamics] for the asset class. Despite a rally in the final weeks of the fund’s fiscal year, the Bloomberg 7-Year Municipal Bond Index [the fund’s benchmark] returned –6.38% for the 12-month reporting period. It outperformed the broader U.S. fixed income markets, as measured by the Bloomberg U.S. Aggregate Bond Index.

Intermediate-Term Municipal Income Fund 5 

 

 


Allocations are shown as a percentage of the fund’s net assets as of 11/30/22. Cash and net other assets, if any, represent the market value weights of cash, derivatives, short-term securities, and other unclassified assets in the portfolio. Summary information may differ from the information in the portfolio schedule notes included in the financial statements due to the inclusion of derivative securities, any interest accruals, the timing of matured security transactions, the use of different classifications of securities for presentation purposes, and rounding. Holdings and allocations may vary over time.


Credit qualities are shown as a percentage of the fund’s net assets as of 11/30/22. A bond rated BBB or higher (SP-3 or higher, for short-term debt) is considered investment grade. This chart reflects the highest security rating provided by one or more of Standard & Poor’s, Moody’s, and Fitch. Ratings may vary over time.

Cash and net other assets, if any, represent the market value weights of cash, derivatives, and short-term securities in the portfolio. The fund itself has not been rated by an independent rating agency.

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The Fed faced the difficult task of calibrating monetary policy to achieve its price stability goals. Fed policymakers raised their benchmark interest rate six times during the reporting period. With inflation running more than three times the Fed’s target inflation rate of 2.00%, the interest-rate hikes included unusually large 0.75% increases in June, July, September, and November 2022. By period-end, the Fed’s short-term benchmark interest rate had risen from a range of 0.00%–0.25% to 3.75%–4.00%. The magnitude of these interest-rate increases further heightened worries about whether policymakers could cool inflation without tipping economies into recession.

At its September meeting, the Fed affirmed its view that ongoing interest-rate increases were appropriate and forecasted its target rate range to be 4.25%–4.50% by the end of calendar 2022. It also lowered the U.S. growth forecast for 2022, 2023, and 2024. Following its November meeting, Fed Chair Jerome Powell stated that it was “very premature” to expect a pause on interest-rate hikes. Later in the month, however, investors were heartened to see that the inflation rate for October 2022 came in lower than expected. Investors interpreted this as evidence that the Fed was making progress in subduing stubbornly high prices. Just before period-end, the Fed hinted that it might temper the degree of interest-rate hikes as early as December 2022. These developments, coupled with very light new-issue supply and a slowing of outflows from municipal bond funds, helped the benchmark post a gain of 3.42% in November 2022. This was its strongest monthly return since 2009.

What is your current assessment of the health of the municipal bond market?

Municipal credit fundamentals continue to be strong, in our view. Higher employment and increasing wages continue to bolster tax receipts. Home values, a factor in property tax revenues, are facing headwinds in the form of rising mortgage rates. We believe assessed values, another factor in taxes, should continue to reflect growth given the roughly two-year lag between tax assessments and actual property values.

State and local tax collections were up 13.4% year over year through September 2022 compared with the same period in 2021. Unprecedented fiscal support during the Covid-19 pandemic, as well as strong economic growth during the second half of 2020 and 2021, put most state and local governments in their best fiscal shape in more than a decade, in our view. Although we believe pension funding will likely fall in 2022 due to capital market returns, most large public pensions entered 2022 in their best fiscal shape in over 10 years, in our view. Finally, municipal defaults are running below long-term averages year to date through November 30, 2022, and they remain a very small percentage of the market. As such, we believe the credit outlook remains favorable.

How did the fund perform during the period?

For the 12 months ended November 30, 2022, the fund’s class A shares outperformed the median return of its Lipper peer group, Intermediate Municipal Debt Funds, but underperformed its benchmark.

What strategies or holdings influenced the fund’s performance?

During the first half of the reporting period, the fund was overweight lower-investment-grade bonds relative to its Lipper peer group. The fund was positioned with a short duration, or a low sensitivity to changes in interest rates. The fund also had a short average maturity relative to its Lipper peer group due to its underweight exposure to bonds with maturities of 10 years or more. Longer-maturity bonds are typically more

Intermediate-Term Municipal Income Fund 7 

 

 

susceptible to price declines in an environment of rising interest rates.

As the Fed became more hawkish, investors became more risk averse. A sharp sell-off ensued, driving bond yields sharply higher and bond prices, which move in the opposite direction of yields, lower. Credit spreads widened, presenting attractively priced investment opportunities, in our view. We moved the portfolio to a long duration position versus its Lipper peers by adding bonds with maturities in the 7- to 15-year range. Our additions were generally focused on higher-rated investment-grade bonds.

From a sector- or an industry-positioning perspective, the portfolio held overweight positions in private higher education, hospital, and essential-service utility bonds compared with the fund’s Lipper peer group.

The fund remained underweight in its exposure to Puerto Rico municipal debt relative to its Lipper peer group. However, we note that the U.S. territory has experienced recent improvement in credit fundamentals. In March 2022, Puerto Rico came out of bankruptcy after nearly five years with a plan to restructure its debt, resume payments to bondholders, and restore its public pension system. We continue to closely monitor Puerto Rico’s credit fundamentals and remain vigilant for investment opportunities.

What do you see on the horizon that could influence your management of the fund?

U.S. employment and economic activity has held up well despite the Fed’s aggressive tightening, in our view, but monetary policy famously acts with long and variable lags. There are some signs that inflation is beginning to trend lower, but we believe the Fed is likely to remain vigilant and wait for further confirmation that inflation is slowing before making any hints of loosening monetary policy. With the bulk of the tightening likely behind us, in our view, we believe Fed monetary policy is set to enter the fine-tuning stage of the cycle. As such, we believe interest rates are likely to remain range bound with more risk of a substantial move lower than higher.

As 2022 ends, municipal bond credit fundamentals appear to be sound, but we also believe slowing U.S. growth could weigh on those fundamentals. The Fed’s eventual path of moving toward a less hawkish stance, however, should be a tailwind for the asset class, in our view.

Thank you, Garrett, 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.

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Your fund’s performance

This section shows your fund’s performance, price, and distribution information for periods ended November 30, 2022, the end of its most recent fiscal year. In accordance with regulatory requirements for mutual funds, we also include performance information as of the most recent calendar quarter-end and expense information taken from the fund’s current prospectus. Performance should always be considered in light of a fund’s investment strategy. Data represent past performance. Past performance does not guarantee future results. More recent returns may be less or more than those shown. Investment return and principal value will fluctuate, and you may have a gain or a loss when you sell your shares. Performance information does not reflect any deduction for taxes a shareholder may owe on fund distributions or on the redemption of fund shares. For the most recent month-end performance, please visit the Individual Investors section at putnam.com or call Putnam at 1-800-225-1581. Class R6 and Y shares are not available to all investors. See the Terms and definitions section in this report for definitions of the share classes offered by your fund.

Annualized fund performance Total return for periods ended 11/30/22

  Life of fund  5 years  3 years  1 year 
Class A (3/18/13)         
Before sales charge  1.58%  1.36%  –0.21%  –6.72% 
After sales charge  1.15  0.54  –1.56  –10.45 
Class B (3/18/13)         
Before CDSC  1.08  0.77  –0.79  –7.24 
After CDSC  1.08  0.40  –1.74  –11.79 
Class C (3/18/13)         
Before CDSC  0.96  0.62  –0.94  –7.38 
After CDSC  0.96  0.62  –0.94  –8.29 
Class R6 (5/22/18)         
Net asset value  1.86  1.67  0.14  –6.39 
Class Y (3/18/13)         
Net asset value  1.83  1.62  0.06  –6.41 

 

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 4.00% sales charge levied at the time of purchase. Class B share returns after contingent deferred sales charge (CDSC) reflect the applicable CDSC, which is 5% in the first year, declining over time to 1% in the sixth year, and is eliminated thereafter. Class C share returns after CDSC reflect a 1% CDSC for the first year that is eliminated thereafter. Class R6 and Y shares have no initial sales charge or CDSC. Performance for class R6 shares prior to their inception is derived from the historical performance of class Y shares and has not been adjusted for the lower investor servicing fees applicable to class R6 shares; had it, returns would have been higher.

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

Class B and C share performance reflects conversion to class A shares after eight years.

Intermediate-Term Municipal Income Fund 9 

 

 

Comparative annualized index returns For periods ended 11/30/22

  Life of fund  5 years  3 years  1 year 
Bloomberg 7-Year Municipal Bond Index  1.94%  1.51%  –0.36%  –6.38% 
Lipper Intermediate Municipal Debt Funds         
category median*  1.57  1.13  –0.68  –7.62 

 

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

All Bloomberg indices are provided by Bloomberg Index Services Limited.

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

* Over the 1-year, 3-year, 5-year, and life-of-fund periods ended 11/30/22, there were 216, 199, 170, and 134 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 B and C shares would have been valued at $11,102 and $10,974, respectively, and no contingent deferred sales charges would apply. A $10,000 investment in the fund’s class R6 and Y shares would have been valued at $11,961 and $11,927, respectively.

All Bloomberg indices are provided by Bloomberg Index Services Limited.

10 Intermediate-Term Municipal Income Fund 

 

 

Fund price and distribution information For the 12-month period ended 11/30/22

Distributions  Class A  Class B  Class C  Class R6  Class Y 
Number  12  12  12  12  12 
Income1  $0.158473  $0.102284  $0.086671  $0.193723  $0.182351 
Capital gains2             
Long-term gains  0.031700  0.031700  0.031700  0.031700  0.031700 
Short-term gains  0.055800  0.055800  0.055800  0.055800  0.055800 
Total  $0.245973  $0.189784  $0.174171  $0.281223  $0.269851 
  Before  After  Net  Net  Net  Net 
  sales  sales  asset  asset  asset  asset 
Share value  charge  charge  value  value  value  value 
11/30/21  $10.72  $11.17  $10.73  $10.73  $10.72  $10.71 
11/30/22  9.76  10.17  9.77  9.77  9.76  9.76 
  Before  After  Net  Net  Net  Net 
Current rate  sales  sales  asset  asset  asset  asset 
(end of period)  charge  charge  value  value  value  value 
Current dividend rate3  2.15%  2.07%  1.42%  1.29%  2.28%  2.19% 
Taxable equivalent4  3.63  3.50  2.40  2.18  3.85  3.70 
Current 30-day             
SEC yield (with             
expense limitation)5,6  N/A  2.56  2.08  1.92  3.01  2.91 
Taxable equivalent4  N/A  4.32  3.51  3.24  5.08  4.92 
Current 30-day             
SEC yield (without             
expense limitation)6  N/A  2.15  1.65  1.50  2.60  2.49 

 

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 (4.00% for class A shares) was levied at the time of purchase. Final distribution information will appear on your year-end tax forms.

1 For some investors, investment income may be subject to the federal alternative minimum tax.

2 Capital gains, if any, are taxable for federal and, in most cases, state purposes.

3 Most recent distribution, including any return of capital and excluding capital gains, annualized and divided by share price before or after sales charge at period-end.

4 Assumes maximum 40.80% federal tax rate for 2022. Results for investors subject to lower tax rates would not be as advantageous.

5 For a portion of the period, the fund had expense limitations, without which yields would have been lower.

6 Based only on investment income and calculated using the maximum offering price for each share class, in accordance with SEC guidelines.

Intermediate-Term Municipal Income Fund 11 

 

 

Annualized fund performance as of most recent calendar quarter
Total return for periods ended 12/31/22

  Life of fund  5 years  3 years  1 year 
Class A (3/18/13)         
Before sales charge  1.59%  1.27%  –0.22%  –6.51% 
After sales charge  1.16  0.44  –1.57  –10.25 
Class B (3/18/13)         
Before CDSC  1.10  0.63  –0.83  –7.13 
After CDSC  1.10  0.26  –1.78  –11.72 
Class C (3/18/13)         
Before CDSC  0.98  0.49  –0.97  –7.28 
After CDSC  0.98  0.49  –0.97  –8.20 
Class R6 (5/22/18)         
Net asset value  1.86  1.56  0.08  –6.27 
Class Y (3/18/13)         
Net asset value  1.84  1.52  0.03  –6.28 

 

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


Your fund’s expenses

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

Expense ratios

  Class A  Class B  Class C  Class R6  Class Y 
Net expenses for the fiscal year           
ended 11/30/21*  0.89%  1.49%  1.64%  0.57%  0.64% 
Total annual operating expenses for the fiscal           
year ended 11/30/21  1.78%  2.38%  2.53%  1.46%  1.53% 
Annualized expense ratio for the six-month           
period ended 11/30/22†  0.92%  1.52%  1.67%  0.57%  0.67% 

 

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 March 30, 2023.

† 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.

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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 6/1/22 to 11/30/22. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.

  Class A  Class B  Class C  Class R6  Class Y 
Expenses paid per $1,000*†  $4.60  $7.59  $8.34  $2.85  $3.35 
Ending value (after expenses)  $994.50  $991.90  $991.00  $996.50  $995.60 

 

* 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 11/30/22. 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 (183); 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 11/30/22, use the following calculation method. To find the value of your investment on 6/1/22, call Putnam at 1-800-225-1581.


Compare expenses using the SEC’s method

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

  Class A  Class B  Class C  Class R6  Class Y 
Expenses paid per $1,000*†  $4.66  $7.69  $8.44  $2.89  $3.40 
Ending value (after expenses)  $1,020.46  $1,017.45  $1,016.70  $1,022.21  $1,021.71 

 

* 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 11/30/22. 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 (183); and then dividing that result by the number of days in the year (365).

Intermediate-Term Municipal Income Fund 13 

 

 

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, geography, industry, or sector. These and other factors may lead to increased volatility and reduced liquidity in the fund’s portfolio holdings.

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). Bond investments may be more susceptible to downgrades or defaults during economic downturns or other periods of economic stress. Interest-rate risk is generally greater for longer-term bonds, and credit risk is generally greater for below-investment-grade bonds. Unlike bonds, funds that invest in bonds have fees and expenses. Tax-exempt bonds may be issued under the Internal Revenue Code only by limited types of issuers for limited types of projects. As a result, the fund’s investments may be focused in certain market segments and be more vulnerable to fluctuations in the values of the securities it holds than a more broadly invested fund. Interest the fund receives may be taxable. Capital gains, if any, are taxed at the federal and, in most cases, state levels. For some investors, investment income may be subject to the federal alternative minimum tax.

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 negatively impact the fund. You can lose money by investing in the fund.

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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 4.00% maximum sales charge for class A shares.

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

Share classes

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

Class B shares are closed to new investments and are only available by exchange from class B shares of another Putnam fund or through dividend and/or capital gains reinvestment. They are not subject to an initial sales charge and may be subject to a CDSC.

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

Class R6 shares are not subject to an initial sales charge or CDSC and carry no 12b-1 fee. They are generally only available to employer-sponsored retirement plans, corporate and institutional clients, and clients in other approved programs.

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

Fixed income terms

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

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

Comparative indexes

Bloomberg 7-Year Municipal Bond Index is a subset of the Bloomberg Municipal Bond Index that measures the performance of investment-grade issues with remaining maturities of six to eight years.

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.

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

Intermediate-Term Municipal Income Fund 15 

 

 

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.

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 medians reflect performance trends for funds within a category.

16 Intermediate-Term Municipal Income Fund 

 

 

Other information for shareholders

Proxy voting

Putnam is committed to managing our mutual funds in the best interests of our shareholders. The Putnam funds’ proxy voting guidelines and procedures, as well as information regarding how your fund voted proxies relating to portfolio securities during the 12-month period ended June 30, 2022, 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 November 30, 2022, Putnam employees had approximately $471,000,000 and the Trustees had approximately $64,000,000 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.

Intermediate-Term Municipal Income Fund 17 

 

 

Important notice regarding Putnam’s privacy policy

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

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

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

18 Intermediate-Term Municipal Income Fund 

 

 

Trustee approval of management contract

General conclusions

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

At the outset of the review process, members of the Board’s independent staff and independent legal counsel considered any possible changes to the annual contract review materials furnished to the Contract Committee during the course of the previous year’s review and, as applicable, identified those changes to Putnam Management. Following these discussions and in consultation with the Contract Committee, the Independent Trustees’ independent legal counsel requested that Putnam Management and its affiliates furnish specified information, together with any additional information that Putnam Management considered relevant, to the Contract Committee. Over the course of several months ending in June 2022, the Contract Committee met on a number of occasions with representatives of Putnam Management, and separately in executive session, to consider the information that Putnam Management provided. Throughout this process, the Contract Committee was assisted by the members of the Board’s independent staff and by independent legal counsel for The Putnam Funds and the Independent Trustees.

In May 2022, the Contract Committee met in executive session to discuss and consider its recommendations with respect to the continuance of the contracts. At the Trustees’ June 2022 meeting, the Contract Committee met in executive session with the other Independent Trustees to review a summary of the key financial, performance and other data that the Contract Committee considered in the course of its review. The Contract Committee then presented its written report, which summarized the key factors that the Committee had considered and set forth its recommendations. The Contract Committee recommended, and the Independent Trustees approved, the continuance of your fund’s management contract and the approval of your fund’s amended and restated sub-management contract, effective July 1, 2022. (Because PIL is an affiliate of Putnam Management and Putnam Management remains fully responsible for all services provided by PIL, the Trustees have not attempted to evaluate PIL as a separate entity, and all subsequent references to Putnam Management below should be deemed to include reference to PIL as necessary or appropriate in the context.)

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

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

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

These conclusions were based on a comprehensive consideration of all information provided to the Trustees and were not the result of any single factor. Some of the factors that figured particularly in the Trustees’ deliberations and how the Trustees considered these factors are described below, although individual Trustees may have evaluated the information presented differently, giving different weights to various factors. It is also important to recognize that the management arrangements for your fund and the other Putnam funds are the result of many years of review and discussion between the Independent Trustees and Putnam Management, that some aspects of the arrangements may receive greater scrutiny in some years than others and that the Trustees’ conclusions may be based, in part, on their consideration of fee arrangements in previous years. For example,

Intermediate-Term Municipal Income Fund 19 

 

 

with certain exceptions primarily involving newer or repositioned funds, the current fee arrangements under the vast majority of the funds’ management contracts were first implemented at the beginning of 2010 following extensive review by the Contract Committee and discussions with representatives of Putnam Management, as well as approval by shareholders.

Management fee schedules and total expenses

The Trustees reviewed the management fee schedules in effect for all Putnam funds, including fee levels and breakpoints. Under its management contract, your fund has the benefit of breakpoints in its management fee schedule that provide shareholders with reduced fee levels as assets under management in the Putnam family of funds increase. The Trustees also reviewed the total expenses of each Putnam fund, recognizing that in most cases management fees represented the major, but not the sole, determinant of total costs to fund shareholders. (Two funds have implemented so-called “all-in” management fees covering substantially all routine fund operating costs.) The Trustees considered that the proposed amended and restated sub-management contract would lower the sub-management fees paid by Putnam Management to PIL.

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

As in the past, the Trustees also focused on the competitiveness of each fund’s total expense ratio. The Trustees and Putnam Management and the funds’ investor servicing agent, Putnam Investor Services, Inc. (“PSERV”), have implemented expense limitations that were in effect during your fund’s fiscal year ending in 2021. These expense limitations were: (i) a contractual expense limitation applicable to specified open-end funds, including your fund, of 25 basis points on investor servicing fees and expenses and (ii) a contractual expense limitation applicable to specified open-end funds, including your fund, of 20 basis points on so-called “other expenses” (i.e., all expenses exclusive of management fees, distribution fees, investor servicing fees, investment-related expenses, interest, taxes, brokerage commissions, acquired fund fees and expenses and extraordinary expenses). These expense limitations attempt to maintain competitive expense levels for the funds. Most funds had sufficiently low expenses that these expense limitations were not operative during their fiscal years ending in 2021. However, in the case of your fund, the second expense limitation applied during its fiscal year ending in 2021. Putnam Management and PSERV have agreed to maintain these expense limitations until at least March 30, 2024. In addition, Putnam Management contractually agreed to waive fees and/or reimburse expenses of your fund to the extent that expenses of the fund (excluding payments under the fund’s distribution plans, investor servicing fees, brokerage, interest, taxes, investment-related expenses, extraordinary expenses and acquired fund fees and expenses) would exceed an annual rate of 0.52% of its average net assets through at least March 30, 2024. During its fiscal year ending in 2021, your fund’s expenses were reduced as a result of this expense limitation. Putnam Management and PSERV’s commitment to these expense limitation arrangements, which were intended to support an effort to have fund expenses meet competitive standards, was an important factor in the Trustees’ decision to approve the continuance of your fund’s management contract and to approve your fund’s amended and restated sub-management contract.

The Trustees reviewed comparative fee and expense information for a custom group of competitive funds selected by Broadridge Financial Solutions, Inc. (“Broadridge”). This comparative information included your fund’s percentile ranking for effective management fees and total expenses (excluding any applicable 12b-1 fees), which provides a general indication of your fund’s relative standing. In the custom peer group, your fund ranked in the second quintile in effective management fees (determined for your fund and the other funds in the custom peer group based on fund asset size and the applicable contractual management fee schedule) and in the fifth quintile in total expenses (excluding any applicable 12b-1 fees) as of December 31, 2021. The first quintile represents the least expensive funds and the fifth quintile the most expensive funds. The fee and expense data reported by Broadridge as of

20 Intermediate-Term Municipal Income Fund 

 

 

December 31, 2021 reflected the most recent fiscal year-end data available in Broadridge’s database at that time.

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

The information examined by the Trustees in connection with their annual contract review for the Putnam funds included information regarding services provided and fees charged by Putnam Management and its affiliates to other clients, including collective investment trusts offered in the defined contribution and defined benefit retirement plan markets, sub-advised mutual funds, private funds sponsored by affiliates of Putnam Management, model-only separately managed accounts and Putnam Management’s exchange-traded funds. This information included, in cases where a product’s investment strategy corresponds with a fund’s strategy, comparisons of those fees with fees charged to the Putnam funds, as well as an assessment of the differences in the services provided to these clients as compared to the services provided to the Putnam funds. The Trustees observed that the differences in fee rates between these clients and the Putnam funds are by no means uniform when examined by individual asset sectors, suggesting that differences in the pricing of investment management services to these types of clients may reflect, among other things, historical competitive forces operating in separate marketplaces. The Trustees considered the fact that in many cases fee rates across different asset classes are higher on average for mutual funds than for other clients, and the Trustees also considered the differences between the services that Putnam Management provides to the Putnam funds and those that it provides to its other clients. The Trustees did not rely on these comparisons to any significant extent in concluding that the management fees paid by your fund are reasonable.

Investment performance

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

The Trustees considered that, in the aggregate, the Putnam funds’ performance was generally solid in 2021 against a backdrop of strong U.S. economic and financial market growth. The Trustees considered Putnam Management’s observation that, despite an environment of generally strong growth, there had been various headwinds experienced in 2021. For the one-year period ended December 31, 2021, the Trustees noted that the Putnam funds, on an asset-weighted basis, ranked in the 52nd percentile of their peers as determined by Lipper Inc. (“Lipper”) and, on an asset-weighted-basis, delivered a gross return that trailed their benchmarks by 0.1%. Over the longer-term, the Committee noted that, on an asset-weighted basis, the Putnam funds delivered

Intermediate-Term Municipal Income Fund 21 

 

 

strong aggregate performance relative to their Lipper peers over the three-, five- and ten-year periods ended December 31, 2021, ranking in the 31st, 29th and 21st percentiles, respectively, and that the funds, in the aggregate, outperformed their benchmarks on a gross basis for each of those periods.

In addition to the performance of the individual Putnam funds, the Trustees considered, as they had in prior years, the performance of The Putnam Fund complex versus competitor fund complexes. In particular, the Trustees considered The Putnam Fund complex’s performance as reported in the Barron’s/Lipper Fund Families survey (the “Survey”), which ranks mutual fund companies based on their performance across a variety of asset types. The Trustees noted that The Putnam Fund complex continued to rank highly in the Survey, especially over the longer-term, with The Putnam Funds ranking as the 6th best performing mutual fund complex out of 45 complexes for the ten-year period and 13th out of 49 complexes for the five-year period. The Trustees noted that 2021 marked the fifth consecutive year that The Putnam Funds have ranked in the top ten fund complexes for the ten-year period. The Trustees also considered that The Putnam Fund complex’s Survey performance over the one-year period was solid, with The Putnam Funds ranking 27th out of 51 complexes. In addition to the Survey, the Trustees also considered the Putnam funds’ ratings assigned by Morningstar Inc., noting that 25 of the funds were four- or five-star rated at the end of 2021 (representing a decrease of one fund year-over-year) and that this included nine funds that had achieved a five-star rating (representing an increase of two funds year-over-year). They also noted, however, the disappointing investment performance of some Putnam funds for periods ended December 31, 2021 and considered information provided by Putnam Management regarding the factors contributing to the underperformance and actions being taken to improve the performance of these particular funds. The Trustees indicated their intention to continue to monitor closely the performance of those funds and evaluate whether additional actions to address areas of underperformance may be warranted.

For purposes of the Trustees’ evaluation of the Putnam funds’ investment performance, the Trustees generally focus on a competitive industry ranking of each fund’s total net return over a one-year, three-year and five-year period. For a number of Putnam funds with relatively unique investment mandates for which Putnam Management informed the Trustees that meaningful competitive performance rankings are not considered to be available, the Trustees evaluated performance based on their total gross and net returns and comparisons of those returns to the returns of selected investment benchmarks. In the case of your fund, the Trustees considered that its class A share cumulative total return performance at net asset value was in the following quartiles of its Lipper peer group (Lipper Intermediate Municipal Debt Funds) for the one-year, three-year and five-year periods ended December 31, 2021 (the first quartile representing the best-performing funds and the fourth quartile the worst-performing funds):

One-year period  2nd 
Three-year period  2nd 
Five-year period  2nd 

 

Over the one-year, three-year and five-year periods ended December 31, 2021, there were 213, 191 and 160 funds, respectively, in your fund’s Lipper peer group. (When considering performance information, shareholders should be mindful that past performance is not a guarantee of future results.)

The Trustees considered Putnam Management’s continued efforts to support fund performance through certain initiatives, including structuring compensation for portfolio managers to enhance accountability for fund performance, emphasizing accountability in the portfolio management process and affirming its commitment to a fundamental-driven approach to investing. The Trustees noted further that Putnam Management had made selective hires and internal promotions in 2021 to strengthen its investment team.

Brokerage and soft-dollar allocations; investor servicing

The Trustees considered various potential benefits that Putnam Management may receive in connection with the services it provides under the management contract with your fund. These include benefits related to brokerage allocation and the use of soft dollars, whereby a portion of the commissions paid by a fund for brokerage may be used to acquire research services that are expected to be useful to Putnam Management in managing the assets of the fund and of other clients. Subject to policies established by the Trustees, soft dollars generated by these means

22 Intermediate-Term Municipal Income Fund 

 

 

are used predominantly to acquire brokerage and research services (including third-party research and market data) that enhance Putnam Management’s investment capabilities and supplement Putnam Management’s internal research efforts. The Trustees indicated their continued intent to monitor regulatory and industry developments in this area with the assistance of their Brokerage Committee. In addition, with the assistance of their Brokerage Committee, the Trustees indicated their continued intent to monitor the allocation of the Putnam funds’ brokerage in order to ensure that the principle of seeking best price and execution remains paramount in the portfolio trading process.

Putnam Management may also receive benefits from payments that the funds make to Putnam Management’s affiliates for investor or distribution services. In conjunction with the annual review of your fund’s management and sub-management contracts, the Trustees reviewed your fund’s investor servicing agreement with PSERV and its distributor’s contract and distribution plans with Putnam Retail Management Limited Partnership (“PRM”), both of which are affiliates of Putnam Management. The Trustees concluded that the fees payable by the funds to PSERV and PRM, as applicable, for such services are fair and reasonable in relation to the nature and quality of such services, the fees paid by competitive funds and the costs incurred by PSERV and PRM, as applicable, in providing such services. Furthermore, the Trustees were of the view that the investor services provided by PSERV were required for the operation of the funds, and that they were of a quality at least equal to those provided by other providers.

Intermediate-Term Municipal Income Fund 23 

 

 

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.

24 Intermediate-Term Municipal Income Fund 

 

 

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of Putnam Funds Trust and Shareholders of
Putnam Intermediate-Term Municipal Income Fund:

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the fund’s portfolio, of Putnam Intermediate-Term Municipal Income Fund (one of the funds constituting Putnam Funds Trust, referred to hereafter as the “Fund”) as of November 30, 2022, the related statement of operations for the year ended November 30, 2022, the statement of changes in net assets for each of the two years in the period ended November 30, 2022, including the related notes, and the financial highlights for each of the three years in the period ended November 30, 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 November 30, 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 November 30, 2022 and the financial highlights for each of the three years in the period ended November 30, 2022 in conformity with accounting principles generally accepted in the United States of America.

The financial statements of the Fund as of and for the year ended November 30, 2019 and the financial highlights for each of the periods ended on or prior to November 30, 2019 (not presented herein, other than the financial highlights) were audited by other auditors whose report dated January 9, 2020 expressed an unqualified opinion on those financial statements and financial highlights.

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 November 30, 2022 by correspondence with the custodian and transfer agent. We believe that our audits provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Boston, Massachusetts
January 11, 2023

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.

Intermediate-Term Municipal Income Fund 25 

 

 

The fund’s portfolio 11/30/22

Key to holding’s abbreviations

AGM Assured Guaranty Municipal Corporation 
AMBAC AMBAC Indemnity Corporation 
BAM Build America Mutual 
COP Certificates of Participation 
FRB Floating Rate Bonds: The rate shown is the current interest rate at the close of the reporting period. Rates may be subject to a cap or floor. For certain securities, the rate may represent a fixed rate currently in place at the close of the reporting period. 
FRN Floating Rate Notes: The rate shown is the current interest rate or yield at the close of the reporting period. Rates may be subject to a cap or floor. For certain securities, the rate may represent a fixed rate currently in place at the close of the reporting period. 
G.O. Bonds General Obligation Bonds 
NATL National Public Finance Guarantee Corporation 
PSFG Permanent School Fund Guaranteed 
VRDN Variable Rate Demand Notes, which are floating-rate securities with long-term maturities that carry coupons that reset and are payable upon demand either daily, weekly or monthly. The rate shown is the current interest rate at the close of the reporting period. Rates are set by remarketing agents and may take into consideration market supply and demand, credit quality and the current SIFMA Municipal Swap Index rate, which was 1.85% as of the close of the reporting period. 

 


MUNICIPAL BONDS AND NOTES (94.5%)* Rating** Principal amount Value
Alabama (1.1%)
Black Belt Energy Gas Dist. Mandatory Put Bonds (12/1/23), Ser. A, 4.00%, 12/1/48 A2   $100,000 $100,159
Jefferson, Cnty. Rev. Bonds, (Warrants), 5.00%, 9/15/29 AA   100,000 108,660
Southeast Energy Auth. Commodity Supply Mandatory Put Bonds (12/1/29), Ser. A-1, 5.50%, 1/1/53 A1   150,000 159,505
368,324
Alaska (0.3%)
AK State Indl. Dev. & Export Auth. Rev. Bonds, (Tanana Chiefs Conference), Ser. A, 5.00%, 10/1/30 A+/F   100,000 107,905
107,905
California (23.7%)
Bay Area Toll Auth. VRDN (San Francisco Bay Area), Ser. C, 1.38%, 4/1/53 VMIG 1   500,000 500,000
CA Cmnty. Choice Fin. Auth. Mandatory Put Bonds (8/1/28), (Green Bonds), Ser. A-1, 4.00%, 5/1/53 A1   325,000 325,059
CA Hlth. Fac. Fin. Auth. Rev. Bonds, (Adventist Hlth. Syst./West), Ser. A, 4.00%, 3/1/33 A   105,000 105,044
CA State Hlth. Fac. Fin. Auth. Rev. Bonds,
(Sutter Hlth.), Ser. A, 5.00%, 11/15/32		 A1   250,000 271,014
CA State Infrastructure & Econ. Dev. Bank Rev. Bonds, (Performing Arts Center of Los Angeles Cnty.), 5.00%, 12/1/27 A   545,000 596,244
CA State Muni. Fin. Auth. Rev. Bonds        
(Orange Cnty. Civic Ctr.), 5.00%, 6/1/42 AA   160,000 168,212
(Davis II, LLC Orchard Park), BAM, 5.00%, 5/15/31 AA   400,000 443,824
(HumanGood Oblig. Group), Ser. A, 4.00%, 10/1/35 A−/F   175,000 172,833
CA State Poll. Control Fin. Auth. Solid Waste Disp. Mandatory Put Bonds (6/2/24), (Waste Mgt., Inc.), Ser. C, 3.25%, 12/1/27 A−   150,000 147,924


26 Intermediate-Term Municipal Income Fund


MUNICIPAL BONDS AND NOTES (94.5%)* cont. Rating** Principal amount Value
California cont.
CA State Tobacco Securitization Agcy. Rev. Bonds        
(Gold Country Settlement Funding Corp.), Ser. A, 5.00%, 6/1/28 A   $645,000 $681,863
(Sonoma Cnty. Securitization Corp.), 5.00%, 6/1/27 A   280,000 294,627
CA State U. Rev. Bonds, Ser. B, 3.422%, 11/1/25 Aa2   100,000 96,892
CA State, Pub. Wks. Board Rev. Bonds,
(Various Capital), Ser. B, 4.00%, 3/1/36		 Aa3   200,000 205,356
CA Statewide Cmnty. Dev. Auth. Rev. Bonds, (Adventist Hlth. Syst.), 5.00%, 3/1/35 A   225,000 231,619
Long Beach, Arpt. Syst. Rev. Bonds        
Ser. A, AGM, 5.00%, 6/1/40 AA   200,000 219,482
Ser. B, AGM, 5.00%, 6/1/33 AA   225,000 259,540
Los Angeles Cnty., Regl. Fin. Auth. Rev. Bonds, (Vermont Manchester Social), 5.00%, 12/1/34 AA+   200,000 230,240
Los Angeles, Dept. of Arpt. Rev. Bonds, Ser. C, 5.00%, 5/15/27 Aa3   285,000 304,814
Mount San Jacinto Cmnty. College Dist. G.O. Bonds, (Election of 2014), Ser. C, 3.00%, 8/1/35 Aa1   105,000 97,943
Sacramento, City Unified School Dist. G.O. Bonds, Ser. G, AGM, 4.00%, 8/1/31 AA   200,000 210,086
San Bernardino Cnty., FRB, Ser. C, 3.373%, 8/1/23 Aa1   75,000 74,753
San Bernardino, City Unified School Dist. G.O. Bonds, (Election 2012), Ser. D, AGM, 3.00%, 8/1/35 AA   350,000 325,596
San Francisco, City & Cnty. COP, Ser. A, 5.00%, 4/1/30 Aa1   260,000 295,469
San Francisco, City & Cnty. Arpt. Comm. Intl. Arpt. Rev. Bonds, Ser. A        
5.00%, 5/1/35 A1   100,000 107,121
5.00%, 5/1/34 A1   100,000 107,818
San Francisco, Pub. Fac. Fin. Auth. Rev. Bonds        
5.00%, 6/1/31 AA+   170,000 195,461
5.00%, 6/1/30 AA+   195,000 224,593
San Jose Arpt. Rev. Bonds, (Norman Y Mineta San Jose Intl. Arpt.), Ser. A, 5.00%, 3/1/33 A2   300,000 324,111
San Juan, Unified School Dist. G.O. Bonds,
(2016 Election), 3.00%, 8/1/35		 Aa2   240,000 216,067
Yuba, Cmnty. College Dist. G.O. Bonds, Ser. A, 3.00%, 8/1/38 Aa2   615,000 541,458
7,975,063
Colorado (2.0%)
CO State COP, Ser. A, 3.00%, 12/15/36 Aa2   520,000 461,204
High Plains Co. Metro. Dist. G.O. Bonds, NATL, 5.00%, 12/1/29 A2   100,000 108,531
Southlands, Metro. Dist. No. 1 G.O. Bonds, Ser. A-1, 3.50%, 12/1/27 Ba1   100,000 92,031
661,766
Connecticut (4.8%)
CT State Special Tax, 5.00%, 5/1/34 AA   100,000 112,987
CT State Hlth. & Edl. Fac. Auth. VRDN, (Yale U.), Ser. V-2, 0.70%, 7/1/36 VMIG 1   1,500,000 1,500,000
1,612,987


Intermediate-Term Municipal Income Fund 27


MUNICIPAL BONDS AND NOTES (94.5%)* cont. Rating** Principal amount Value
District of Columbia (0.9%)
DC Rev. Bonds, (D.C. Intl. School), 5.00%, 7/1/26 BBB   $165,000 $169,831
Metro. DC Arpt. Auth. Rev. Bonds, Ser. A, 5.00%, 10/1/31 Aa3   130,000 140,613
310,444
Florida (4.0%)
FL State Dev. Fin. Corp. Ed. Fac. Rev. Bonds,
(Nova Southeastern U., Inc.), 5.00%, 4/1/29		 A3   100,000 108,549
Greater Orlando, Aviation Auth. Arpt. Fac. Rev. Bonds, Ser. A, 5.00%, 10/1/25 Aa3   500,000 523,883
Miami-Dade Cnty., Aviation Rev. Bonds, 5.00%, 10/1/29 A1   115,000 117,741
Sarasota Cnty., Pub. Hosp. Dist. Rev. Bonds, 5.00%, 7/1/38 A1   560,000 586,878
1,337,051
Georgia (1.3%)
Burke Cnty., Dev. Auth. Poll. Control        
Mandatory Put Bonds (8/19/25), (GA Pwr. Co.), 2.875%, 12/1/49 Baa1   250,000 246,768
Mandatory Put Bonds (2/3/25), (Oglethorpe Pwr. Corp.), 1.50%, 1/1/40 Baa1   100,000 93,936
Cobb Cnty., Dev. Auth. Student Hsg. Rev. Bonds, (Kennesaw State U. Real Estate), 5.00%, 7/15/30 Baa2   100,000 101,119
441,823
Illinois (4.8%)
Chicago, G.O. Bonds, Ser. A, 4.00%, 1/1/24 BBB+   75,000 74,855
Chicago, O’Hare Intl. Arpt. Rev. Bonds, Ser. C, 5.00%, 1/1/23 A+   100,000 100,147
Chicago, Waste Wtr. Transmission Rev. Bonds, Ser. C        
5.00%, 1/1/28 A   600,000 612,166
5.00%, 1/1/26 A   50,000 51,739
Chicago, Wtr. Wks Rev. Bonds, 5.00%, 11/1/30 A   100,000 103,805
IL State G.O. Bonds        
5.00%, 2/1/26 Baa1   100,000 103,375
Ser. D, 5.00%, 11/1/25 Baa1   125,000 129,019
5.00%, 7/1/23 Baa1   50,000 50,480
4.00%, 1/1/31 Baa1   100,000 97,434
IL State Fin. Auth. Rev. Bonds, (Presbyterian Homes Oblig. Group), Ser. A, 5.00%, 11/1/31 A−/F   100,000 103,249
IL State Sales Tax Rev. Bonds, Ser. C, 4.00%, 6/15/30 A−   100,000 100,735
Northern IL U. Rev. Bonds, Ser. B, BAM, 5.00%, 4/1/25 AA   100,000 103,877
1,630,881
Indiana (0.9%)
IN State. Fin. Auth. Rev. Bonds, (Rose-Hulman Inst. of Tech., Inc.), 5.00%, 6/1/28 A2   100,000 108,273
Rockport, Poll. Control Rev. Bonds,
(AEP Generating Co.), 3.125%, 7/1/25		 A−   200,000 196,596
304,869


28 Intermediate-Term Municipal Income Fund


MUNICIPAL BONDS AND NOTES (94.5%)* cont. Rating** Principal amount Value
Kentucky (1.2%)
KY Bond Dev. Corp. Edl. Fac. Rev. Bonds, (Transylvania U.), Ser. A, 5.00%, 3/1/28 A−   $195,000 $210,297
KY State Pub. Energy Auth. Gas Supply Mandatory Put Bonds (1/1/25), Ser. B, 4.00%, 1/1/49 A1   200,000 199,480
409,777
Louisiana (0.6%)
St. Tammany Parish Hosp. Svcs. Dist. No. 1 Rev. Bonds, Ser. A, 5.00%, 7/1/48 AA−/F   200,000 204,029
204,029
Maryland (0.3%)
MD State Hlth. & Higher Ed. Fac. Auth. Rev. Bonds, (Stevenson U.), 5.00%, 6/1/29 BBB−   100,000 105,819
105,819
Michigan (2.8%)
Great Lakes, Wtr. Auth. Wtr. Supply Syst. Rev. Bonds, Ser. D, 5.00%, 7/1/28 A+   665,000 710,251
MI State Fin. Auth. Rev. Bonds, (Local Govt. Loan Program-Pub. Ltg. Auth.), Ser. B, 5.00%, 7/1/29 BBB−   240,000 243,169
953,420
Minnesota (6.6%)
Deephaven, Charter School Lease Rev. Bonds, (Eagle Ridge Academy), Ser. A, 4.40%, 7/1/25 BB+   25,000 24,891
Duluth, Econ. Dev. Auth. Hlth. Care Fac. Rev. Bonds, (St. Luke’s Hosp. of Duluth Oblig. Group), 5.00%, 6/15/27 BBB−   100,000 103,404
Minneapolis, Hlth. Care Syst. Rev. Bonds        
(Fairview Hlth. Svcs.), Ser. A, 5.00%, 11/15/36 A   265,000 278,796
(Allina Hlth. Oblig. Group), 4.00%, 11/15/37 Aa3   250,000 246,050
Rochester, Hlth. Care Fac. VRDN, (Mayo Clinic), Ser. B, 1.80%, 11/15/38 VMIG 1   500,000 500,000
Winona, Indpt. School Dist. No. 861 G.O. Bonds, Ser. A, 4.00%, 2/1/30 AAA   1,010,000 1,067,746
2,220,887
Missouri (0.5%)
Kansas City, Indl. Dev. Auth. Arpt. Special Oblig. Rev. Bonds, 5.00%, 3/1/27 A2   155,000 163,618
163,618
Nevada (0.6%)
Clark Cnty., School Dist. G.O. Bonds, Ser. A, AGM, 4.00%, 6/15/36 AA   200,000 204,415
Las Vegas, Special Assmt. Bonds, (Dist. No. 607 Local Impt.), 5.00%, 6/1/24 BBB−/P   10,000 10,153
214,568
New Jersey (2.7%)
NJ State G.O. Bonds, (Covid-19 Emergency Bonds), Ser. A, 3.00%, 6/1/32 A2   240,000 228,726
NJ State Econ. Dev. Auth. Rev. Bonds        
Ser. B, 5.00%, 11/1/26 A3   100,000 106,868
(NJ Transit Corp.), Ser. B, 5.00%, 11/1/24 A3   270,000 279,989


Intermediate-Term Municipal Income Fund 29


MUNICIPAL BONDS AND NOTES (94.5%)* cont. Rating** Principal amount Value
New Jersey cont.
NJ State Hlth. Care Fac. Fin. Auth. Rev. Bonds, 5.00%, 9/15/23 A3   $75,000 $76,240
South Jersey, Trans. Auth. Syst. Rev. Bonds, Ser. A, BAM, 5.00%, 11/1/36 AA   200,000 218,014
909,837
New York (8.7%)
Albany, Cap. Resource Corp. Rev. Bonds,
(Empire Commons Student Hsg., Inc.), 5.00%, 5/1/28		 A   100,000 103,319
Long Island, Pwr. Auth. Elec. Syst. Mandatory Put Bonds (9/1/25), Ser. B, 0.85%, 9/1/50 A2   325,000 296,098
Metro. Trans. Auth. Rev. Bonds, Ser. C-1, 4.00%, 11/15/34 A3   100,000 94,001
NY City, G.O. Bonds, Ser. C-1, 5.00%, 8/1/27 Aa2   250,000 274,579
NY City, Transitional Fin. Auth. Rev. Bonds,
(Future Tax Secured Revenue)		        
5.00%, 11/1/40 AAA   750,000 801,340
Ser. A-6, 5.00%, 8/1/29 AAA   275,000 313,020
Port Auth. of NY & NJ Rev. Bonds        
Ser. 197, 5.00%, 11/15/35 Aa3   670,000 689,008
Ser. 221, 4.00%, 7/15/38 Aa3   250,000 242,900
TSASC, Inc. Rev. Bonds, Ser. A, 5.00%, 6/1/26 A   100,000 105,042
2,919,307
Ohio (2.2%)
Hamilton Cnty., Sales Tax Rev. Bonds, Ser. B, AMBAC, zero %, 12/1/26 Aa3   165,000 144,572
Lorain Cnty., Port Auth. Econ. Dev. Facs. Rev. Bonds, (Kendal at Oberlin), 5.00%, 11/15/23
(Escrowed to maturity)		 AAA/P   50,000 51,059
OH State Higher Edl. Fac. Comm. Rev. Bonds, (Cleveland Inst. of Music (The)), 5.00%, 12/1/27 BBB−   175,000 180,240
OH State Hosp. Rev. Bonds, (U. Hosp. Hlth. Syst.), Ser. A, 5.00%, 1/15/31 A2   100,000 103,832
Ohio State Air Qlty. Dev. Auth. Mandatory Put Bonds (6/1/27), (Duke Energy Corp.), Ser. 22B, 4.00%, 9/1/30 Baa2   250,000 250,634
730,337
Pennsylvania (4.5%)
Allegheny Cnty., Hosp. Dev. Auth. Rev. Bonds, (Allegheny Hlth. Network Oblig. Group), Ser. A, 5.00%, 4/1/32 A   200,000 213,573
Cumberland Cnty., Muni. Auth. Rev. Bonds,
(Diakon Lutheran Social Ministries), 5.00%, 1/1/32		 BBB+/F   100,000 101,592
East Hempfield Twp., Indl. Dev. Auth. Rev. Bonds, (Millersville U. Student Hsg. & Svcs., Inc.), 5.00%, 7/1/30 (Prerefunded 7/1/23) AAA/P   40,000 40,476
Geisinger, Auth. Hlth. Syst. Mandatory Put Bonds (2/15/27), (Geisinger Hlth. Syst.), 5.00%, 4/1/43 AA−   150,000 158,624
Monroeville, Fin. Auth. Rev. Bonds, (U. of Pittsburgh Med. Ctr.), Ser. B, 5.00%, 2/15/38 A2   200,000 213,666
PA State Tpk. Comm. Rev. Bonds, Ser. A, 5.00%, 12/1/30 A3   285,000 315,026
Philadelphia, Arpt. Rev. Bonds, Ser. C, 5.00%, 7/1/24 A2   250,000 256,559


30 Intermediate-Term Municipal Income Fund


MUNICIPAL BONDS AND NOTES (94.5%)* cont. Rating** Principal amount Value
Pennsylvania cont.
Pittsburgh, Wtr. & Swr. Auth. Rev. Bonds, Ser. B, AGM, 4.00%, 9/1/34 AA   $150,000 $155,644
West Shore Area Auth. Rev. Bonds, (Messiah Village Lifeways Oblig. Group), Ser. A, 5.00%, 7/1/25 BBB−/F   50,000 50,344
1,505,504
Puerto Rico (0.5%)
Cmnwlth. of PR, FRN, zero %, 11/1/51 BB/P   48,829 17,334
Cmnwlth. of PR, Elec. Pwr. Auth. Rev. Bonds, Ser. VV, NATL, 5.25%, 7/1/26 Baa2   140,000 140,587
Cmnwlth. of PR, Hwy. & Trans. Auth. Rev. Bonds, Ser. N, AMBAC, 5.50%, 7/1/29 BB/P   25,000 25,238
183,159
South Carolina (0.5%)
SC State Trans. Infrastructure Bank Rev. Bonds, Ser. A, 3.00%, 10/1/36 Aa3   200,000 174,964
174,964
Tennessee (1.1%)
Metro. Nashville, Arpt. Auth. Rev. Bonds, Ser. B        
5.50%, 7/1/36 ## A1   100,000 110,668
5.00%, 7/1/33 A2   250,000 267,624
378,292
Texas (14.4%)
Arlington, Higher Ed. Fin. Corp. Rev. Bonds,
(Uplift Ed.), Ser. A, PSFG		        
4.00%, 12/1/31 AAA   200,000 204,951
4.00%, 12/1/31 AAA   165,000 169,059
Austin, Arpt. Syst. Rev. Bonds, 5.00%, 11/15/32 A1   500,000 550,059
Central TX Regl. Mobility Auth. Rev. Bonds, 5.00%, 1/1/37 A3   200,000 210,396
Clifton, Higher Ed. Fin. Corp. Rev. Bonds,
(IDEA Pub. Schools), PSFG, 4.00%, 8/15/30		 AAA   250,000 260,353
Dallas, Area Rapid Transit Rev. Bonds, 5.00%, 12/1/33 AA+   100,000 113,247
Dallas, Hotel Occupancy Tax Rev. Bonds, 4.00%, 8/15/34 A   250,000 248,865
Fort Bend, Indpt. School Dist. Mandatory Put Bonds (8/1/26), Ser. B, PSFG, 0.72%, 8/1/51 AAA   215,000 192,795
Houston, Indpt. School Dist. Mandatory Put Bonds (6/1/25), Ser. A-2, PSFG, 3.50%, 6/1/39 Aaa   250,000 247,344
Lake Houston Redev. Auth. Rev. Bonds,
(City of Houston, Reinvestment Zone No. 10), 5.00%, 9/1/27		 BBB−   125,000 128,228
Nederland, Indpt. School Dist. G.O. Bonds, PSFG, 5.00%, 8/15/31 Aaa   675,000 768,121
Temple, Tax Increment Tax Alloc. Bonds, (Reinvestment Zone No. 1), Ser. A, BAM, 5.00%, 8/1/24 AA   135,000 140,205
TX State G.O. Bonds, 3.00%, 8/1/34 Aaa   675,000 626,330
TX State A&M U. Rev. Bonds, 5.25%, 5/15/37 Aaa   250,000 287,714


Intermediate-Term Municipal Income Fund 31



MUNICIPAL BONDS AND NOTES (94.5%)* cont. Rating** Principal amount Value
Texas cont.
TX State Wtr. Dev. Board Rev. Bonds        
(Revolving Fund), 5.00%, 8/1/29 AAA   $400,000 $456,087
(Wtr. Implementation Fund), 3.00%, 10/15/35 AAA   270,000 251,149
4,854,903
Utah (0.4%)
UT Infrastructure Agcy. Rev. Bonds, Ser. A, 4.00%, 10/15/28 BBB−/F   140,000 136,515
136,515
Washington (3.1%)
Port of Seattle Rev. Bonds        
Ser. B, 5.00%, 8/1/38 AA−   500,000 530,239
5.00%, 4/1/38 AA−   200,000 208,460
Ser. B, 5.00%, 5/1/27 AA−   300,000 319,419
1,058,118
Total municipal bonds and notes (cost $32,325,232) $31,874,167

SHORT-TERM INVESTMENTS (3.2%)* Shares Value
Putnam Short Term Investment Fund Class P 3.95% L 1,062,919 $1,062,919
Total short-term investments (cost $1,062,919) $1,062,919

TOTAL INVESTMENTS
Total investments (cost $33,388,151) $32,937,086
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 December 1, 2021 through November 30, 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 $33,717,343.
** The Moody’s, Standard & Poor’s or Fitch ratings indicated are believed to be the most recent ratings available at the close of the reporting period for the securities listed. Ratings are generally ascribed to securities at the time of issuance. While the agencies may from time to time revise such ratings, they undertake no obligation to do so, and the ratings do not necessarily represent what the agencies would ascribe to these securities at the close of the reporting period. Securities rated by Fitch are indicated by “/F.” Securities rated by Putnam are indicated by “/P.” The Putnam rating categories are comparable to the Standard & Poor’s classifications. If a security is insured, it will usually be rated by the ratings organizations based on the financial strength of the insurer. Ratings are not covered by the Report of Independent Registered Public Accounting Firm. For further details regarding security ratings, please see the Statement of Additional Information.
## Forward commitment, in part or in entirety (Note 1).
L Affiliated company (Note 5). The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period.
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.


32 Intermediate-Term Municipal Income Fund



On Mandatory Put Bonds, the rates shown are the current interest rates at the close of the reporting period and the dates shown represent the next mandatory put dates. Rates are set by remarketing agents and may take into consideration market supply and demand, credit quality and the current SIFMA Municipal Swap Index, 1 Month US LIBOR or 3 Month US LIBOR rates, which were 1.85%, 4.14% and 4.78%, respectively, as of the close of the reporting period.
The dates shown parenthetically on prerefunded bonds represent the next prerefunding dates.
The dates shown on debt obligations are the original maturity dates.
The fund had the following sector concentrations greater than 10% at the close of the reporting period (as a percentage of net assets):
Transportation 20.5%
Local Debt 16.8
Education 11.8
Utilities 11.0

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
Municipal bonds and notes $— $31,874,167 $—
Short-term investments — 1,062,919 —
Totals by level $— $32,937,086 $—


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


Intermediate-Term Municipal Income Fund 33


Statement of assets and liabilities 11/30/22

ASSETS   
Investment in securities, at value (Note 1):   
Unaffiliated issuers (identified cost $32,325,232)  $31,874,167 
Affiliated issuers (identified cost $1,062,919) (Notes 1 and 5)  1,062,919 
Interest and other receivables  376,162 
Receivable for shares of the fund sold  552,628 
Receivable from Manager (Note 2)  21,121 
Prepaid assets  25,795 
Total assets  33,912,792 
 
LIABILITIES   
Payable for purchases of delayed delivery securities (Note 1)  108,591 
Payable for shares of the fund repurchased  17,170 
Payable for custodian fees (Note 2)  3,289 
Payable for investor servicing fees (Note 2)  7,388 
Payable for Trustee compensation and expenses (Note 2)  1,005 
Payable for administrative services (Note 2)  119 
Payable for distribution fees (Note 2)  5,795 
Payable for auditing and tax fees  39,643 
Other accrued expenses  12,449 
Total liabilities  195,449 
 
Net assets  $33,717,343 
 
REPRESENTED BY   
Paid-in capital (Unlimited shares authorized) (Notes 1 and 4)  $34,296,934 
Total distributable earnings (Note 1)  (579,591) 
Total — Representing net assets applicable to capital shares outstanding  $33,717,343 
 
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE   
Net asset value and redemption price per class A share ($14,699,114 divided by 1,505,486 shares)  $9.76 
Offering price per class A share (100/96.00 of $9.76)*  $10.17 
Net asset value and offering price per class B share ($14,125 divided by 1,446 shares)**  $9.77 
Net asset value and offering price per class C share ($305,462 divided by 31,274 shares)**  $9.77 
Net asset value, offering price and redemption price per class R6 share   
($1,465,595 divided by 150,195 shares)  $9.76 
Net asset value, offering price and redemption price per class Y share   
($17,233,047 divided by 1,765,285 shares)  $9.76 

 

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

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

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

34 Intermediate-Term Municipal Income Fund 

 

 

Statement of operations Year ended 11/30/22

INVESTMENT INCOME   
Interest (including interest income of $13,783 from investments in affiliated issuers) (Note 5)  $608,276 
Total investment income  608,276 
 
EXPENSES   
Compensation of Manager (Note 2)  97,360 
Investor servicing fees (Note 2)  30,036 
Custodian fees (Note 2)  7,393 
Trustee compensation and expenses (Note 2)  913 
Distribution fees (Note 2)  35,397 
Administrative services (Note 2)  640 
Auditing and tax fees  39,786 
Blue sky expense  78,324 
Other  25,287 
Fees waived and reimbursed by Manager (Note 2)  (131,094) 
Total expenses  184,042 
Expense reduction (Note 2)  (1,022) 
Net expenses  183,020 
 
Net investment income  425,256 
 
REALIZED AND UNREALIZED GAIN (LOSS)   
Net realized gain (loss) on:   
Securities from unaffiliated issuers (Notes 1 and 3)  (143,770) 
Total net realized loss  (143,770) 
Change in net unrealized appreciation (depreciation) on:   
Securities from unaffiliated issuers  (980,025) 
Total change in net unrealized depreciation  (980,025) 
 
Net loss on investments  (1,123,795) 
 
Net decrease in net assets resulting from operations  $(698,539) 

 

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

Intermediate-Term Municipal Income Fund 35 

 

 

Statement of changes in net assets

INCREASE IN NET ASSETS  Year ended 11/30/22  Year ended 11/30/21 
Operations     
Net investment income  $425,256  $183,914 
Net realized gain (loss) on investments  (143,770)  119,787 
Change in net unrealized depreciation of investments  (980,025)  (13,196) 
Net increase (decrease) in net assets resulting     
from operations  (698,539)  290,505 
Distributions to shareholders (Note 1):     
From ordinary income     
Taxable net investment income     
Class A  (3,349)  (5,055) 
Class B  (4)  (28) 
Class C  (98)  (195) 
Class R6  (268)  (193) 
Class Y  (1,632)  (629) 
Net realized short-term gain on investments     
Class A  (63,037)  (136,987) 
Class B  (89)  (749) 
Class C  (2,146)  (5,273) 
Class R6  (4,341)  (5,238) 
Class Y  (6,520)  (17,044) 
From tax-exempt net investment income     
Class A  (207,718)  (143,589) 
Class B  (150)  (288) 
Class C  (2,329)  (2,794) 
Class R6  (17,364)  (11,169) 
Class Y  (179,861)  (20,400) 
From net realized long-term gain on investments     
Class A  (35,828)  (33,261) 
Class B  (50)  (182) 
Class C  (1,219)  (1,280) 
Class R6  (2,468)  (1,272) 
Class Y  (3,721)  (4,138) 
Increase from capital share transactions (Note 4)  20,610,546  683,859 
Total increase in net assets  19,379,815  584,600 
 
NET ASSETS     
Beginning of year  14,337,528  13,752,928 
End of year  $33,717,343  $14,337,528 

 

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

36 Intermediate-Term Municipal Income Fund 

 

 

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Intermediate-Term Municipal Income Fund 37 

 

 

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

  INVESTMENT OPERATIONS      LESS DISTRIBUTIONS          RATIOS AND SUPPLEMENTAL DATA   
                      Ratio  Ratio of net   
  Net asset    Net realized                of expenses  investment   
  value,    and unrealized  Total from  From net  From net    Net asset  Total return  Net assets,  to average  income (loss)  Portfolio 
  beginning  Net investment  gain (loss)  investment  investment  realized gain  Total  value, end  at net asset  end of period  net assets  to average  turnover 
Period ended­  of period­  income (loss)  on investments­  operations­  income­  on investments­  distributions  of period­  value (%)a  (in thousands)  (%)b,c  net assets (%)c  (%) 
Class A                           
November 30, 2022­  $10.72­  .16­  (.87)  (.71)  (.16)  (.09)  (.25)  $9.76­  (6.72)  $14,699­  .90­  1.67­  29­ 
November 30, 2021  10.80­  .14­  .09­  .23­  (.14)  (.17)  (.31)  10.72­  2.17­  11,682­  .89­  1.29­  31­ 
November 30, 2020  10.64­  .17­  .27­  .44­  (.17)  (.11)  (.28)  10.80­  4.26­  11,488­  .88­  1.57­  45­ 
November 30, 2019  10.11­  .20­  .52­  .72­  (.19)  —­  (.19)  10.64­  7.16­  9,684­  .89­  1.91­  63­ 
November 30, 2018  10.26­  .19­  (.14)  .05­  (.19)  (.01)  (.20)  10.11­  .49­  7,797­  .86­  1.81­  69­ 
Class B                           
November 30, 2022­  $10.73­  .11  (.88)  (.77)  (.10)  (.09)  (.19)  $9.77­  (7.24)  $14­  1.50­  1.02­  29­ 
November 30, 2021  10.81­  .08­  .09­  .17­  (.08)  (.17)  (.25)  10.73­  1.55­  17­  1.49­  .73­  31­ 
November 30, 2020  10.64­  .10­  .28­  .38­  (.10)  (.11)  (.21)  10.81­  3.65­  60­  1.48­  .99­  45­ 
November 30, 2019  10.11­  .13­  .53­  .66­  (.13)  —­  (.13)  10.64­  6.53­  58­  1.49­  1.32­  63­ 
November 30, 2018  10.26­  .13­  (.14)  (.01)  (.13)  (.01)  (.14)  10.11­  (.11)  57­  1.46­  1.22­  69­ 
Class C                           
November 30, 2022­  $10.73­  .09­  (.87)  (.78)  (.09)  (.09)  (.18)  $9.77­  (7.38)  $305­  1.65­  .85­  29­ 
November 30, 2021  10.81­  .06­  .09­  .15­  (.06)  (.17)  (.23)  10.73­  1.40­  424­  1.64­  .55­  31­ 
November 30, 2020  10.64­  .08­  .29­  .37­  (.09)  (.11)  (.20)  10.81­  3.51­  428­  1.63­  .83­  45­ 
November 30, 2019  10.11­  .12­  .52­  .64­  (.11)  —­  (.11)  10.64­  6.37­  384­  1.64­  1.18­  63­ 
November 30, 2018  10.26­  .11­  (.14)  (.03)  (.11)  (.01)  (.12)  10.11­  (.26)  383­  1.61­  1.07­  69­ 
Class R6                           
November 30, 2022­  $10.72­  .20­  (.88)  (.68)  (.19)  (.09)  (.28)  $9.76­  (6.39)  $1,466­  .57­  2.04­  29­ 
November 30, 2021  10.80­  .18­  .09­  .27­  (.18)  (.17)  (.35)  10.72­  2.49­  892­  .57­  1.57­  31­ 
November 30, 2020  10.63­  .20­  .29­  .49­  (.21)  (.11)  (.32)  10.80­  4.68­  419­  .57­  1.91­  45­ 
November 30, 2019  10.11­  .23­  .51­  .74­  (.22)  —­  (.22)  10.63­  7.39­  536­  .57­  2.23­  63­ 
November 30, 2018 † ­  10.13­  .12­  (.02)  .10­  (.12)  —­  (.12)  10.11­  .95*  473­  .29*  1.26*  69­ 
Class Y                           
November 30, 2022­  $10.71­  .19  (.87)  (.68)  (.18)  (.09)  (.27)  $9.76­  (6.41)  $17,233­  .65­  2.19­  29­ 
November 30, 2021  10.80­  .17­  .08­  .25­  (.17)  (.17)  (.34)  10.71­  2.33­  1,322­  .64­  1.54­  31­ 
November 30, 2020  10.63­  .19­  .29­  .48­  (.20)  (.11)  (.31)  10.80­  4.62­  1,358­  .63­  1.79­  45­ 
November 30, 2019  10.11­  .22­  .52­  .74­  (.22)  —­  (.22)  10.63­  7.33­  1,262­  .64­  2.16­  63­ 
November 30, 2018  10.26­  .21­  (.14)  .07­  (.21)  (.01)  (.22)  10.11­  .75­  1,884­  .61­  2.06­  69­ 

 

* Not annualized.

† For the period May 22, 2018 (commencement of operations) to November 30, 2018.

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

b Includes amounts paid through expense offset and/or brokerage service arrangements, if any (Note 2). Also excludes acquired fund fees and expenses, if any.

c Reflects an involuntary contractual expense limitation in effect during the period. As a result of such limitation, the expenses of each class reflect a reduction of the following amounts (Note 2):

      Percentage of average net assets 
  11/30/22  11/30/21  11/30/20  11/30/19  11/30/18 
Class A  0.58%  0.89%  1.10%  1.47%  1.01% 
Class B  0.58  0.89  1.10  1.47  1.01 
Class C  0.58  0.89  1.10  1.47  1.01 
Class R6  0.58  0.89  1.10  1.47  0.53 
Class Y  0.58  0.89  1.10  1.47  1.01 

 

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

38 Intermediate-Term Municipal Income Fund  Intermediate-Term Municipal Income Fund 39 

 

 

Notes to financial statements 11/30/22

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 December 1, 2021 through November 30, 2022.

Putnam Intermediate-Term Municipal Income 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 level of current income exempt from federal income tax as Putnam Management believes is consistent with preservation of capital. The fund invests mainly in bonds that pay interest that is exempt from federal income tax (but that may be subject to federal alternative minimum tax (AMT)). The fund normally maintains an average dollar-weighted maturity between three and ten years. The bonds the fund invests in are mainly investment-grade in quality. Under normal circumstances, Putnam Management invests at least 80% of the fund’s net assets in tax-exempt investments, which for purposes of this policy include investments paying interest subject to the federal AMT for individuals. This investment policy cannot be changed without the approval of the fund’s shareholders. 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 offers the following share classes. The expenses for each class of shares may differ based on the distribution and investor servicing fees of each class, which are identified in Note 2.

Share class  Sales charge  Contingent deferred sales charge  Conversion feature 
    1.00% on certain redemptions of shares   
Class A  Up to 4.00%  bought with no initial sales charge  None 
      Converts to class A shares 
Class B*  None  5.00% phased out over six years  after 8 years 
      Converts to class A shares 
Class C  None  1.00% eliminated after one year  after 8 years 
Class R6†  None  None  None 
Class Y†  None  None  None 

 

* Purchases of class B shares are closed to new and existing investors except by exchange from class B shares of another Putnam fund or through dividend and/or capital gains reinvestment.

† Not available to all investors.

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

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 Amended and Restated Agreement and 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

40 Intermediate-Term Municipal Income Fund 

 

 

reported amounts of increases and decreases in net assets from operations. Actual results could differ from those estimates. Subsequent events after the Statement of assets and liabilities date through the date that the financial statements were issued have been evaluated in the preparation of the financial statements.

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

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

Tax-exempt bonds and notes are generally valued on the basis of valuations provided by an independent pricing service approved by the Trustees. Such services use information with respect to transactions in bonds, quotations from bond dealers, market transactions in comparable securities and various relationships between securities in determining value. These securities will generally be categorized as Level 2.

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.

Certain investments, including certain restricted and illiquid securities and derivatives, are also valued at fair value following procedures approved by the Trustees. 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. 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. The fair value of securities is generally determined as the amount that the fund could reasonably expect to realize from an orderly disposition of such securities over a reasonable period of time. By its nature, a fair value price is a good faith estimate of the value of a security in a current sale and does not reflect an actual market price, which may be different by a material amount.

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

Interest income, net of any applicable withholding taxes, if any, and including amortization and accretion of premiums and discounts on debt securities, is recorded on the accrual basis.

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

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

Lines of credit The fund participates, along with other Putnam funds, in a $100 million ($317.5 million prior to October 14, 2022) unsecured committed line of credit and a $235.5 million unsecured uncommitted line of credit, both provided by State Street. Borrowings may be made for temporary or emergency purposes, including the

Intermediate-Term Municipal Income Fund 41 

 

 

funding of shareholder redemption requests and trade settlements. Interest is charged to the fund based on the fund’s borrowing at a rate equal to 1.25% plus the higher of (1) the Federal Funds rate and (2) the Overnight Bank Funding Rate for the committed line of credit and 1.30% plus the higher of (1) the Federal Funds rate and (2) the Overnight Bank Funding Rate for the uncommitted line of credit. A closing fee equal to 0.04% of the committed line of credit and 0.04% of the uncommitted line of credit has been paid by the participating funds. In addition, a commitment fee of 0.21% per annum on any unutilized portion of the committed line of credit is allocated to the participating funds based on their relative net assets and paid quarterly. During the reporting period, the fund had no borrowings against these arrangements.

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

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

Under the Regulated Investment Company Modernization Act of 2010, the fund will be permitted to carry forward capital losses incurred for an unlimited period and the carry forwards will retain their character as either short-term or long-term capital losses. At November 30, 2022, the fund had the following capital loss carryovers available, to the extent allowed by the Code, to offset future net capital gain, if any:

  Loss carryover   
Short-term  Long-term  Total 
$86,558  $57,499  $144,057 

 

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. For the reporting period, there were no material temporary or permanent differences. Reclassifications are made to the fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryovers) under income tax regulations. At the close of the reporting period, the fund reclassified $5,995 to decrease undistributed net investment income and $5,995 to decrease accumulated net realized loss.

Tax cost of investments includes adjustments to net unrealized appreciation (depreciation) which may not necessarily be final tax cost basis adjustments, but closely approximate the tax basis unrealized gains and losses that may be realized and distributed to shareholders. The tax basis components of distributable earnings and the federal tax cost as of the close of the reporting period were as follows:

Unrealized appreciation  $322,893 
Unrealized depreciation  (768,479) 
Net unrealized depreciation  (445,586) 
Undistributed ordinary income  10,054 
Capital loss carryforward  (144,057) 
Cost for federal income tax purposes  $33,382,672 

 

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.

 

42 Intermediate-Term Municipal Income Fund 

 

 

Note 2: Management fee, administrative services and other transactions

The fund pays Putnam Management a management fee (based on the fund’s average net assets and computed and paid monthly) at annual rates that may vary based on the average of the aggregate net assets of all open-end mutual funds sponsored by Putnam Management (excluding net assets of funds that are invested in, or that are invested in by, other Putnam funds to the extent necessary to avoid “double counting” of those assets). Such annual rates may vary as follows:

0.590%  of the first $5 billion,  0.390%  of the next $50 billion, 
0.540%  of the next $5 billion,  0.370%  of the next $50 billion, 
0.490%  of the next $10 billion,  0.360%  of the next $100 billion and 
0.440%  of the next $10 billion,  0.355%  of any excess thereafter. 

 

For the reporting period, the management fee represented an effective rate (excluding the impact from any expense waivers in effect) of 0.428% of the fund’s average net assets.

Putnam Management has contractually agreed, through March 30, 2024, to waive fees and/or reimburse the fund’s expenses to the extent necessary to limit the cumulative expenses of the fund, exclusive of brokerage, interest, taxes, investment-related expenses, extraordinary expenses, acquired fund fees and expenses and payments under the fund’s investor servicing contract, investment management contract and distribution plans, on a fiscal year-to-date basis to an annual rate of 0.20% of the fund’s average net assets over such fiscal year-to-date period. During the reporting period, the fund’s expenses were reduced by $106,575 as a result of this limit.

Putnam Management has also contractually agreed to waive fees (and, to the extent necessary, bear other expenses) of the fund through March 30, 2024, to the extent that total expenses of the fund (excluding brokerage, interest, taxes, investment-related expenses, payments under distribution plans, extraordinary expenses, payments under the fund’s investor servicing contract and acquired fund fees and expenses, but including payments under the fund’s investment management contract) would exceed an annual rate of 0.52% of the fund’s average net assets. During the reporting period, the fund’s expenses were reduced by $24,519 as a result of this limit.

Putnam Investments Limited (PIL), an affiliate of Putnam Management, is authorized by the Trustees to manage a separate portion of the assets of the fund as determined by Putnam Management from time to time. 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% (prior to July 1, 2022, the annual rate was 0.40%) of the average net assets of the portion of the fund managed by PIL.

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

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

Putnam Investor Services, Inc., an affiliate of Putnam Management, provides investor servicing agent functions to the fund. Putnam Investor Services, Inc. received fees for investor servicing for class A, class B, class C, and class Y shares that included (1) a per account fee for each direct and underlying non-defined contribution account (retail account) of the fund; (2) a specified rate of the fund’s assets attributable to defined contribution plan accounts; and (3) a specified rate based on the average net assets in retail accounts. Putnam Investor Services, Inc. has agreed that the aggregate investor servicing fees for each fund’s retail and defined contribution accounts for these share classes will not exceed an annual rate of 0.25% of the fund’s average assets attributable to such accounts.

Class R6 shares paid a monthly fee based on the average net assets of class R6 shares at an annual rate of 0.05%.

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

Class A  $17,237  Class R6  436 
Class B  20  Class Y  11,967 
Class C  376  Total  $30,036 

 

Intermediate-Term Municipal Income Fund 43 

 

 

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 $1,022 under the expense offset arrangements.

Each Independent Trustee of the fund receives an annual Trustee fee, of which $26, as a quarterly retainer, has been allocated to the fund, and an additional fee for each Trustees meeting attended. Trustees also are reimbursed for expenses they incur relating to their services as Trustees.

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

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

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

  Maximum %  Approved %  Amount 
Class A  0.35%  0.25%  $32,388 
Class B  1.00%  0.85%  129 
Class C  1.00%  1.00%  2,880 
Total      $35,397 

 

For the reporting period, Putnam Retail Management Limited Partnership, acting as underwriter, received net commissions of $3,490 from the sale of class A shares and received no monies in contingent deferred sales charges from redemptions of class B and class C shares.

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

Note 3: Purchases and sales of securities

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

  Cost of purchases  Proceeds from sales 
Investments in securities (Long-term)  $23,400,786  $6,022,881 
U.S. government securities (Long-term)  —  — 
Total  $23,400,786  $6,022,881 

 

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.

 

44 Intermediate-Term Municipal Income Fund 

 

 

Note 4: Capital shares

At the close of the reporting period, there were an unlimited number of shares of beneficial interest authorized. Transactions, including, if applicable, direct exchanges pursuant to share conversions, in capital shares were as follows:

  YEAR ENDED 11/30/22  YEAR ENDED 11/30/21 
Class A  Shares  Amount  Shares  Amount 
Shares sold  1,002,127  $9,841,709  242,713  $2,610,216 
Shares issued in connection with         
reinvestment of distributions  30,723  309,785  30,063  318,892 
  1,032,850  10,151,494  272,776  2,929,108 
Shares repurchased  (617,122)  (5,996,185)  (246,526)  (2,647,571) 
Net increase  415,728  $4,155,309  26,250  $281,537 
 
  YEAR ENDED 11/30/22  YEAR ENDED 11/30/21 
Class B  Shares  Amount  Shares  Amount 
Shares sold  —  $—  —  $— 
Shares issued in connection with         
reinvestment of distributions  29  293  102  1,091 
  29  293  102  1,091 
Shares repurchased  (180)  (1,798)  (4,044)  (43,478) 
Net decrease  (151)  $(1,505)  (3,942)  $(42,387) 
 
  YEAR ENDED 11/30/22  YEAR ENDED 11/30/21 
Class C  Shares  Amount  Shares  Amount 
Shares sold  12,779  $125,499  42,999  $459,443 
Shares issued in connection with         
reinvestment of distributions  561  5,780  894  9,542 
  13,340  131,279  43,893  468,985 
Shares repurchased  (21,561)  (220,402)  (43,985)  (474,878) 
Net decrease  (8,221)  $(89,123)  (92)  $(5,893) 
 
  YEAR ENDED 11/30/22  YEAR ENDED 11/30/21 
Class R6  Shares  Amount  Shares  Amount 
Shares sold  121,419  $1,184,754  52,780  $564,756 
Shares issued in connection with         
reinvestment of distributions  2,435  24,441  1,675  17,872 
  123,854  1,209,195  54,455  582,628 
Shares repurchased  (56,928)  (571,040)  (9,992)  (107,030) 
Net increase  66,926  $638,155  44,463  $475,598 

 

Intermediate-Term Municipal Income Fund 45 

 

 

  YEAR ENDED 11/30/22  YEAR ENDED 11/30/21 
Class Y  Shares  Amount  Shares  Amount 
Shares sold  2,246,517  $21,851,327  9,944  $107,094 
Shares issued in connection with         
reinvestment of distributions  19,649  191,682  3,961  42,211 
  2,266,166  22,043,009  13,905  149,305 
Shares repurchased  (624,280)  (6,135,299)  (16,288)  (174,301) 
Net increase (decrease)  1,641,886  $15,907,710  (2,383)  $(24,996) 

 

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

 

  Shares owned  Percentage of ownership  Value 
Class A  1,136  0.08%  $11,087 
Class R6  1,115  0.74%  10,882 

 

Note 5: Affiliated transactions

Transactions during the reporting period with any company which is under common ownership or control were as follows:

          Shares 
          outstanding 
          and fair 
  Fair value as  Purchase  Sale  Investment  value as 
Name of affiliate  of 11/30/21  cost  proceeds  income  of 11/30/22 
Short-term investments           
Putnam Short Term           
Investment Fund*  $1,373,137  $22,153,939  $22,464,157  $13,783  $1,062,919 
Total Short-term           
investments  $1,373,137  $22,153,939  $22,464,157  $13,783  $1,062,919 

 

* 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.

Note 6: 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.

On July 27, 2017, the United Kingdom’s Financial Conduct Authority (“FCA”), which regulates LIBOR, announced its intention to cease compelling banks to provide the quotations needed to sustain LIBOR after 2021. ICE Benchmark Administration, the administrator of LIBOR, ceased publication of most LIBOR settings on a representative basis at the end of 2021 and is expected to cease publication of a majority of U.S. dollar LIBOR settings on a representative basis after June 30, 2023. In addition, global regulators have announced that, with limited exceptions, no new LIBOR-based contracts should be entered into after 2021. LIBOR has historically been a common benchmark interest rate index used to make adjustments to variable-rate loans. It is used throughout global banking and financial industries to determine interest rates for a variety of financial instruments and borrowing arrangements. Actions by regulators have resulted in the establishment of alternative reference rates to LIBOR in most major currencies. Various financial industry groups have been planning for the transition away from LIBOR, but there are obstacles to converting certain longer-term securities and transactions to new reference rates. Markets are developing slowly and questions around liquidity in these rates and how to appropriately adjust these rates to mitigate any economic value transfer at the time of transition remain a significant concern. Neither the effect of the transition process nor its ultimate success can yet be known. The transition process might lead to increased volatility and illiquidity in markets that rely on LIBOR to determine interest rates. It could also lead to a reduction in the value of some LIBOR-based investments and reduce the effectiveness of related transactions, such as hedges. While some LIBOR-based instruments may contemplate a scenario where LIBOR is no longer available

46 Intermediate-Term Municipal Income Fund 

 

 

by providing for an alternative rate-setting methodology, not all may have such provisions and there may be significant uncertainty regarding the effectiveness of any such alternative methodologies. Since the usefulness of LIBOR as a benchmark could deteriorate during the transition period, these effects could occur at any time.

Beginning in January 2020, global financial markets have experienced, and may continue to experience, significant volatility resulting from the spread of a virus known as Covid–19. The outbreak of Covid–19 has resulted in travel and border restrictions, quarantines, supply chain disruptions, lower consumer demand, and general market uncertainty. The effects of Covid–19 have adversely affected, and may continue to adversely affect, the global economy, the economies of certain nations, and individual issuers, all of which may negatively impact the fund’s performance.

Intermediate-Term Municipal Income Fund 47 

 

 

Federal tax information (Unaudited)

The fund has designated 98.70% of dividends paid from net investment income during the reporting period as tax exempt for Federal income tax purposes.

The Form 1099 that will be mailed to you in January 2023 will show the tax status of all distributions paid to your account in calendar 2022.

48 Intermediate-Term Municipal Income Fund 

 

 

Shareholder meeting results (Unaudited)

June 29, 2022 special meeting

At the meeting, each of the nominees for Trustees was elected, with all funds of the Trust voting together as a single class, as follows:

  Votes for  Votes withheld 
Liaquat Ahamed  3,583,882,479  32,417,735 
Barbara M. Baumann  3,584,377,892  31,922,322 
Katinka Domotorffy  3,584,956,517  31,343,697 
Catharine Bond Hill  3,586,682,827  29,617,387 
Kenneth R. Leibler  3,569,431,371  46,868,843 
Jennifer Williams Murphy  3,581,263,937  35,036,277 
Marie Pillai  3,578,125,932  38,174,282 
George Putnam, III  3,576,315,198  39,985,016 
Robert L. Reynolds  3,579,411,077  36,889,137 
Manoj P. Singh  3,582,573,738  33,726,476 
Mona K. Sutphen  3,588,302,923  27,997,291 

 

All tabulations are rounded to the nearest whole number.

Intermediate-Term Municipal Income Fund 49 

 

 


50 Intermediate-Term Municipal Income Fund 

 

 


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

The address of each Trustee is 100 Federal Street, Boston, MA 02110.

As of November 30, 2022, there were 102 funds in the Putnam fund complex, including 96 Putnam Funds and six funds in Putnam ETF Trust. Each Trustee serves as Trustee of all Putnam Funds. In addition to serving as Trustees of the Putnam Funds, Dr. Hill, Mses. Domotorffy and Sutphen, and Mr. Ahamed serve as Trustees of Putnam ETF Trust. Each Trustee serves for an indefinite term, until his or her resignation, retirement at age 75, removal, or death.

Intermediate-Term Municipal Income Fund 51 

 

 

Officers

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

James F. Clark (Born 1974)  Alan G. McCormack (Born 1964) 
Vice President and Chief Compliance Officer  Vice President and Derivatives Risk Manager 
Since 2016  Since 2022 
Chief Compliance Officer and Chief Risk Officer,  Head of Quantitative Equities and Risk, 
Putnam Investments, and Chief Compliance Officer,  Putnam Investments 
Putnam Management   
  Denere P. Poulack (Born 1968) 
Nancy E. Florek (Born 1957)  Assistant Vice President, Assistant Clerk, 
Vice President, Director of Proxy Voting and Corporate  and Assistant Treasurer 
Governance, Assistant Clerk, and Assistant Treasurer  Since 2004 
Since 2000   
  Janet C. Smith (Born 1965) 
Michael J. Higgins (Born 1976)  Vice President, Principal Financial Officer, Principal 
Vice President, Treasurer, and Clerk  Accounting Officer, and Assistant Treasurer 
Since 2010  Since 2007 
  Head of Fund Administration Services, 
Jonathan S. Horwitz (Born 1955)  Putnam Investments and Putnam Management 
Executive Vice President, Principal Executive Officer,   
and Compliance Liaison  Stephen J. Tate (Born 1974) 
Since 2004  Vice President and Chief Legal Officer 
  Since 2021 
Richard T. Kircher (Born 1962)  General Counsel, Putnam Investments, 
Vice President and BSA Compliance Officer  Putnam Management, and Putnam Retail Management 
Since 2019   
Assistant Director, Operational Compliance, Putnam  Mark C. Trenchard (Born 1962) 
Investments and Putnam Retail Management  Vice President 
  Since 2002 
Martin Lemaire (Born 1984)  Director of Operational Compliance, Putnam 
Vice President and Derivatives Risk Manager  Investments and Putnam Retail Management 
Since 2022   
Risk Manager and Risk Analyst, Putnam Investments   
 
Susan G. Malloy (Born 1957)   
Vice President and Assistant Treasurer   
Since 2007   
Head of Accounting and Middle Office Services,   
Putnam Investments and Putnam Management   

 

The principal occupations of the officers for the past five years have been with the employers as shown above, although in some cases they have held different positions with such employers. The address of each officer is 100 Federal Street, Boston, MA 02110.

52 Intermediate-Term Municipal Income Fund 

 

 

Fund information

Founded over 80 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 funds across income, value, blend, growth, sustainable, asset allocation, absolute return, and global sector categories.

Investment Manager  Trustees  Richard T. Kircher 
Putnam Investment  Kenneth R. Leibler, Chair  Vice President and 
Management, LLC  Barbara M. Baumann, Vice Chair  BSA Compliance Officer 
100 Federal Street  Liaquat Ahamed   
Boston, MA 02110  Katinka Domotorffy  Martin Lemaire 
  Catharine Bond Hill  Vice President and 
Investment Sub-Advisor  Jennifer Williams Murphy  Derivatives Risk Manager 
Putnam Investments Limited  Marie Pillai   
16 St James’s Street  George Putnam, III  Susan G. Malloy 
London, England SW1A 1ER  Robert L. Reynolds  Vice President and 
  Manoj P. Singh  Assistant Treasurer 
Marketing Services  Mona K. Sutphen   
Putnam Retail Management    Alan G. McCormack 
Limited Partnership  Officers  Vice President and 
100 Federal Street  Robert L. Reynolds  Derivatives Risk Manager 
Boston, MA 02110  President   
    Denere P. Poulack 
Custodian  James F. Clark  Assistant Vice President, 
State Street Bank  Vice President, Chief Compliance  Assistant Clerk, and 
and Trust Company  Officer, and Chief Risk Officer  Assistant Treasurer 
     
Legal Counsel  Nancy E. Florek  Janet C. Smith 
Ropes & Gray LLP  Vice President, Director of  Vice President, 
Proxy Voting and Corporate  Principal Financial Officer, 
Independent Registered  Governance, Assistant Clerk,  Principal Accounting Officer, 
Public Accounting Firm  and Assistant Treasurer  and Assistant Treasurer 
PricewaterhouseCoopers LLP     
  Michael J. Higgins  Stephen J. Tate 
  Vice President, Treasurer,  Vice President and 
  and Clerk  Chief Legal Officer 
     
  Jonathan S. Horwitz  Mark C. Trenchard 
  Executive Vice President,  Vice President 
Principal Executive Officer,   
  and Compliance Liaison   

 

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

 


Item 2. Code of Ethics:
(a) The fund’s principal executive, financial and accounting officers are employees of Putnam Investment Management, LLC, the Fund’s investment manager. As such they are subject to a comprehensive Code of Ethics adopted and administered by Putnam Investments which is designed to protect the interests of the firm and its clients. The Fund has adopted a Code of Ethics which incorporates the Code of Ethics of Putnam Investments with respect to all of its officers and Trustees who are employees of Putnam Investment Management, LLC. For this reason, the Fund has not adopted a separate code of ethics governing its principal executive, financial and accounting officers.

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

Item 4. Principal Accountant Fees and Services:
The following table presents fees billed in each of the last two fiscal years for services rendered to the fund by the fund’s independent auditor:


Fiscal year ended Audit Fees Audit-Related Fees Tax Fees All Other Fees
November 30, 2022 $32,257 $ — $7,484 $ —
November 30, 2021 $30,492 $ — $7,135 $ —

For the fiscal years ended November 30, 2022 and November 30, 2021, the fund’s independent auditor billed aggregate non-audit fees in the amounts of $305,767 and $$272,034 respectively, to the fund, Putnam Management and any entity controlling, controlled by or under common control with Putnam Management that provides ongoing services to the fund.

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

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

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

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

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

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


Fiscal year ended Audit-Related Fees Tax Fees All Other Fees Total Non-Audit Fees
November 30, 2022 $ — $298,283 $ — $ —
November 30, 2021 $ — $264,899 $ — $ —

Item 5. Audit Committee of Listed Registrants
Not applicable

Item 6. Schedule of Investments:
The registrant’s schedule of investments in unaffiliated issuers is included in the report to shareholders in Item 1 above.

Item 7. Disclosure of Proxy Voting Policies and Procedures For Closed-End Management Investment Companies:
Not applicable

Item 8. Portfolio Managers of Closed-End Investment Companies
Not Applicable

Item 9. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers:
Not applicable

Item 10. Submission of Matters to a Vote of Security Holders:
Not applicable

Item 11. Controls and Procedures:
(a) The registrant’s principal executive officer and principal financial officer have concluded, based on their evaluation of the effectiveness of the design and operation of the registrant’s disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the design and operation of such procedures are generally effective to provide reasonable assurance that information required to be disclosed by the registrant in this report is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms.

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

Item 12. Disclosures of Securities Lending Activities for Closed-End Management Investment Companies:
Not Applicable

Item 13. Exhibits:
(a)(1) The Code of Ethics of The Putnam Funds, which incorporates the Code of Ethics of Putnam Investments, is filed herewith.

(a)(2) Separate certifications for the principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are filed herewith.

(b) The certifications required by Rule 30a-2(b) under the Investment Company Act of 1940, as amended, are filed herewith.

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

Putnam Funds Trust
By (Signature and Title):
/s/ Janet C. Smith
Janet C. Smith
Principal Accounting Officer

Date: January 24, 2023
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: January 24, 2023
By (Signature and Title):
/s/ Janet C. Smith
Janet C. Smith
Principal Financial Officer

Date: January 24, 2023