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485BPOS
2018-12-31
PUTNAM TAX EXEMPT INCOME FUND
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N-1A
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PTAEX
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2019-01-30
2019-01-30
0.0400
0
0
0.0325
0
0
0
0
0
0.0043
0.0043
0.0043
0.0043
0.0043
0.0043
0.0085
0.0100
0.0050
0.0012
0.0012
0.0012
0.0012
0.0012
0.0077
0.0140
0.0155
0.0105
0.0053
0.0055
475
643
258
429
54
56
636
743
490
648
170
176
811
966
845
886
296
307
1316
1508
1845
1566
665
689
143
158
443
490
766
845
1508
1845
0.1794
0.0249
0.1078
0.0880
-0.0410
0.0993
0.0265
0.0038
0.0588
0.0070
before taxes
before taxes
before taxes
before taxes
before taxes
-0.0333
-0.0480
-0.0107
-0.0286
0.0091
-0.0348
-0.0076
0.0128
0.0300
0.0283
0.0302
0.0288
0.0409
0.0293
0.0310
0.0382
0.0494
0.0485
0.0455
0.0472
0.0560
0.0490
0.0479
0.0485
Fund summary
Goal
Putnam Tax
Exempt Income Fund seeks as high a level of current income exempt from federal income tax as we believe to be consistent with preservation
of capital.
Fees and expenses
The following
table describes the fees and expenses you may pay if you buy and hold shares of the fund. You may qualify for sales charge discounts
if you and your family invest, or agree to invest in the future, at least $100,000 in class A shares or $50,000 in class M shares
of Putnam funds. More information about these and other discounts is available from your financial advisor and in <i>How do I buy
fund shares?</i> beginning on page 13 of the fund’s prospectus, in the Appendix to the fund’s prospectus, and in <i>How
to buy shares </i>beginning on page II-1 of the fund’s statement of additional information (SAI).
Shareholder fees (fees paid directly from your investment)
Annual fund operating expenses (expenses you pay each year as a percentage of the value of your investment)
Portfolio turnover
The fund pays
transaction-related costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio).
A higher turnover rate may indicate higher transaction costs and may result in higher taxes when the fund’s shares are held
in a taxable account. These costs, which are not reflected in annual fund operating expenses or the above example, affect fund
performance. The fund’s turnover rate in the most recent fiscal year was 42%.
0.42
You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in class A shares or $50,000 in class M shares of Putnam funds. More information about these and other discounts is available from your financial advisor and in How do I buy fund shares? beginning on page 13 of the fund's prospectus, in the Appendix to the fund's prospectus, and in How to buy shares beginning on page II-1 of the fund's statement of additional information (SAI).
50000
Example
The following
hypothetical example is intended to help you compare the cost of investing in the fund with the cost of investing in other funds.
It assumes that you invest $10,000 in the fund for the time periods indicated and then, except as indicated, redeem all your shares
at the end of those periods. It assumes a 5% return on your investment each year and that the fund’s operating expenses remain
the same. Your actual costs may be higher or lower.
Investments, risks, and performance
Investments<br />
We invest mainly
in bonds that pay interest that is exempt from federal income tax (but that may be subject to federal alternative minimum tax (AMT)),
are investment-grade in quality, and have intermediate- to long-term maturities (i.e., three years or longer). Under normal circumstances,
we invest at least 80% of the fund’s net assets in tax-exempt investments, which for purposes of this policy exclude investments
paying interest subject to the federal AMT for individuals. This investment policy cannot be changed without the approval of the
fund’s shareholders. We 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.
Risks
It is important to understand that you can lose money by investing in the fund.<br />
<br />
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.<br />
<br />
The risks associated with bond investments include interest rate risk, which means the value of the fund’s investments is likely to fall if interest
rates rise. Bond investments also are subject to credit risk, which is the risk that the issuers of the fund’s investments
may default on payment of interest or principal. Since the fund invests in tax-exempt bonds, which, to be treated as tax-exempt
under the Internal Revenue Code, may be issued only by limited types of issuers for limited types of projects, the fund’s
investments may be focused in certain market segments. Consequently, the fund may be more vulnerable to fluctuations in the values
of the securities it holds than a fund that invests more broadly. Interest rate risk is generally greater for longer-term bonds,
and credit risk is generally greater for below-investment-grade bonds, which can be more sensitive to changes in markets, credit
conditions and interest rates. Interest the fund receives might be taxable.<br />
<br />
The fund may not achieve its goal, and it is not intended to be a complete investment program. An investment in the fund is not insured or guaranteed
by the Federal Deposit Insurance Corporation or any other government agency.
It is important to understand that you can lose money by investing in the fund.
An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
Performance
The performance
information below gives some indication of the risks associated with an investment in the fund by showing the fund’s performance
year to year and over time. The bar chart does not reflect the impact of sales charges. If it did, performance would be lower.
Please remember that past performance is not necessarily an indication of future results. Monthly performance figures for the fund
are available at putnam.com.
The performance information below gives some indication of the risks associated with an investment in the fund by showing the fund's performance year to year and over time.
putnam.com
Please remember that past performance is not necessarily an indication of future results.
Annual total returns for class A shares before sales charges
The bar chart does not reflect the impact of sales charges.
Best calendar quarter<br />
<b>Q3 2009</b>  9.43%<br />
<br />
Worst calender quarter<br />
<b>Q4 2010</b>  −4.78%<br />
Best calendar quarter
2009-09-30
0.0943
Worst calendar quarter
2010-12-31
-0.0478
Average annual total returns after sales charges (for periods ended 12/31/18)
After-tax returns reflect the historical highest individual federal marginal income tax rates and do not reflect state and
local taxes.
Actual after-tax returns depend on an investor's tax situation and may differ from those shown.
After-tax returns are shown for class A shares only and will vary for other classes.
After-tax returns reflect the historical highest individual federal marginal income tax rates and do not reflect state and local taxes. Actual after-tax
returns depend on an investor’s tax situation and may differ from those shown. After-tax returns are shown for class A shares
only and will vary for other classes. These after-tax returns do not apply if you hold your fund shares through a 401(k) plan,
an IRA, or another tax-advantaged arrangement.<br />
<br />
Class B share performance reflects conversion to class A shares after eight years.
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Applies only to certain redemptions of shares bought with no initial sales charge.
This charge is phased out over six years
This charge is eliminated after one year
Represents a blended rate.
Other expenses are based on expenses of class Y shares for the fund's last fiscal year, restated to reflect the lower investor
Performance for class R6 shares prior to their inception (5/22/18) 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.