a_george.htm

George Putnam
Balanced
Fund

Annual report
7 | 31 | 19


Message from the Trustees	1
About the fund	2
Interview with your fund’s portfolio managers	5
Your fund’s performance	10
Your fund’s expenses	14
Consider these risks before investing	16
Terms and definitions	17
Other information for shareholders	18
Important notice regarding Putnam’s privacy policy	19
Trustee approval of management contract	20
Audited financial statements	24
Report of Independent Registered Public Accounting Firm	25
Federal tax information	65
About the Trustees	66
Officers	68

IMPORTANT NOTICE: Delivery of paper fund reports

In accordance with regulations adopted by the Securities and Exchange Commission, beginning on January 1, 2021, reports like this one will no longer be sent by mail unless you specifically request it. Instead, they will be on Putnam’s website, and you will be notified by mail whenever a new one is available, and provided with a website link to access the report.

If you wish to stop receiving paper reports sooner, or if you wish to continue to receive paper reports free of charge after January 1, 2021, please see the back cover or insert for instructions. If you invest through a bank or broker, your choice will apply to all funds held in your account. If you invest directly with Putnam, your choice will apply to all Putnam funds in your account.

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Message from the Trustees

September 19, 2019

Dear Fellow Shareholder:

If there is any lesson to be learned from constantly changing financial markets, it is the importance of positioning your investment portfolio for your long-term goals. We believe that one strategy is to diversify across different asset classes and investment approaches.

We also believe your mutual fund investment offers a number of advantages, including constant monitoring by experienced investment professionals who maintain a long-term perspective. Putnam’s portfolio managers and analysts take a research-intensive approach that includes risk management strategies designed to serve you through changing conditions.

Another key strategy, in our view, is seeking the counsel of a financial advisor. For over 80 years, Putnam has recognized the importance of professional investment advice. Your financial advisor can help in many ways, including defining and planning for goals such as retirement, evaluating the level of risk appropriate for you, and reviewing your investments on a regular basis and making adjustments as necessary.

As always, your fund’s Board of Trustees remains committed to protecting the interests of Putnam shareholders like you, and we thank you for investing with Putnam.

Experienced managers pursue a broad range of opportunities

The fund’s typical allocation is 60% stocks and 40% bonds. In managing the stock portion of the portfolio, Kathryn Lakin pursues a risk-aware style, investing in stocks across all sectors that may have value or growth characteristics. For the fund’s fixed-income investments, Paul Scanlon assembles a mix of government and investment-grade bonds. Historically, government bonds have shown relatively low correlation with stocks, which can help to dampen the impact of stock market downturns on fund performance.

Providing the benefits of balanced investing since 1937
Growth of a $10,000 investment since fund inception, 11/5/37 through 7/31/19

Data are historical. Past performance is not a guarantee of 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. For the most recent month-end performance, visit putnam.com. Performance assumes reinvestment of distributions and does not account for taxes. Returns for class A shares do not reflect a sales charge of 5.75%. Had a sales charge been reflected, returns would have been lower. Returns for other classes of shares may vary. The period illustrated is longer than the investment horizon of many investors.

The chart is plotted on a logarithmic scale so that comparable percentage changes appear similar.

George Putnam Balanced Fund 3

Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results. Share price, principal value, and return will fluctuate, and you may have a gain or a loss when you sell your shares. Performance of class A shares assumes reinvestment of distributions and does not account for taxes. Fund returns in the bar chart do not reflect a sales charge of 5.75%; had they, returns would have been lower. See below and pages 10–13 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.

* George Putnam Blended Index is an unmanaged index administered by Putnam Management, 60% of which is the S&P 500 Index and 40% of which is the Bloomberg Barclays U.S. Aggregate Bond Index.

† The fund’s benchmarks (S&P 500 Index and George Putnam Blended Index) were introduced on 12/31/69 and 12/31/78, respectively, and its Lipper group (Balanced Funds) was introduced on 12/31/59; they all post-date the inception of the fund’s class A shares.

This comparison shows your fund’s performance in the context of broad market indexes for the 12 months ended 7/31/19. See above and pages 10–13 for additional fund performance information. Index descriptions can be found on pages 17–18.

4 George Putnam Balanced Fund

Kate is Co-Director of Equity Research. She has a B.A. from Wellesley College and an M.B.A. from Yale School of Management. Kate joined Putnam in 2012 and has been in the investment industry since 2008.

Paul is Co-Head of Fixed Income. He has an M.B.A. from the University of Chicago Booth School of Business and a B.A. from Colgate University. Paul joined Putnam in 1999 and has been in the investment industry since 1986.

Emily E. Shanks is also a Portfolio Manager of the fund.

Could you describe the investing environment for stocks?

KATE Consumer spending remained strong during the reporting period. Record-low unemployment, solid wage reports, and an increase in corporate spending also supported stocks. However, investors feared a rising interest-rate environment. In calendar 2018, the U.S. Federal Reserve [Fed] raised interest rates four times. The U.S.–China trade dispute also eroded investor sentiment. In the final quarter of calendar 2018, major stock markets experienced sharp but brief declines. By the turn of the year, the Fed pivoted on its monetary policy and slowed the pace of its interest-rate hikes. In January and February 2019, major stock markets rallied. U.S. stocks held on to their gains, despite an uptick in market volatility, for the remainder of the period.

International stock market performance lagged that of the United States. Economic growth slowed in China, Europe, and Japan. Higher tariffs and other protectionist barriers contributed to a decline in industrial output. Delays in final Brexit negotiations also reduced investor appetite for non-U.S. stocks. For the 12-month period, U.S. stocks, as measured by the S&P 500 Index, posted a return of 7.99%. International

George Putnam Balanced Fund 5

stocks, as measured by the MSCI EAFE [ND] Index, posted a loss of 2.60% for the period.

How did corporate bonds perform?

PAUL During the early months of the reporting period, the asset class benefited from a strengthening U.S. economy. Corporate profits grew, jobless claims reached multi-year lows, and business confidence rose. In 2018’s fourth quarter, investors grew more risk-averse. U.S.–China trade tensions were an ongoing problem. Investors also feared that the Fed would raise interest rates too fast. Credit-sensitive securities fell in price as yield spreads widened in the final months of 2018.

Credit markets recovered in January 2019 following comments from Fed Chair Jerome Powell that mild inflation would give the central bank greater flexibility to set policy in 2019. Yield spreads tightened for the remainder of the period. At the Fed’s July 2019 meeting, the Fed cut interest rates by a quarter-percentage point. This was the first interest-rate reduction since 2008. Bond prices rose as interest rates fell. For the 12-month reporting period, U.S. investment-grade fixed-income securities posted a return of 8.08%, as measured by the Bloomberg Barclays U.S. Aggregate Bond Index.

How did the fund perform?

PAUL For the 12-month reporting period, the fund’s class A shares before sales charge posted a return of 8.86%, which outperformed 7.99% posted for its primary benchmark, the S&P 500 Index. The fund also outperformed its secondary benchmark, the George Putnam Blended Index, which returned 8.37% for the reporting period.

What were some specific stocks that contributed to performance?

KATE Our decision to sell Qualcomm, the U.S.-based semiconductor manufacturer, proved to be a top contributor. Lower-than-expected sales from core Chinese customers hurt Qualcomm’s performance over the period.

Our investment in life-science technology provider Danaher also aided results. In February 2019, Danaher’s stock moved higher following its announcement that it would acquire the biopharma business of GE Life Sciences. Another highlight for the period was our investment in American restaurant chain Chipotle Mexican Grill. Food-quality issues had hurt Chipotle’s stock performance in early calendar 2018. New management and a customer loyalty program helped revitalize sales and profits, and renew investor confidence in the firm in 2019.

What were some specific stocks that detracted from performance?

KATE Activision Blizzard [ATVI], the U.S. video gaming company, was a primary detractor to results. The company missed quarterly earnings projections as key gaming titles underperformed expectations. Our relative overweight position in DXC Technology, an enterprise IT provider, also dampened results. We were initially encouraged by the firm’s focus on margin expansion and plans to buy back company shares. Revenue growth, however, failed to materialize, and DXC’s quarterly earnings declined over the period.

Underexposure to U.S.-based semiconductor capital equipment maker Applied Materials [AMAT] also hampered results. We sold our position in AMAT in the first half of the period amid shrinking memory chip demand and global trade fears. In the second half of the period, AMAT stock rallied when the company announced it planned to acquire the Japanese wafer company Kokusai.

George Putnam Balanced Fund 7

How did the fund’s corporate bond allocation perform?

PAUL Overall, the fixed-income portion of the portfolio performed strongly during the period. Our allocation to corporate bonds represented 14.2% of total fund assets. Bonds issued by banking and life insurance companies were top performers. Health-care and diversified financial services companies were also notable contributors to performance. Our decision not to own certain sovereign government and government-agency bonds detracted from relative performance.

We also had meaningful allocations in U.S. Treasuries and government-agency securities, which represented 11.9% and 8.5%, respectively, of total assets. These bonds can serve to offset stock market risk, in our view. At times of market volatility, investors tend to shift toward the relative safety of government securities and cash.

What are your near-term expectations for stocks?

KATE We expect continued economic growth in the United States, albeit at more moderate pace for the remainder of 2019. We believe threats of a global trade war will remain an overhang and could disrupt the market rally that we have seen so far this year. We are monitoring the Fed’s interest-rate policy and the potential for additional cuts like the Fed did in July 2019.

We will continue to look to add high-quality names, companies that we believe have durable business models and competitive positions. Our stock selection is based on evaluating the individual merits of a company. We believe our focus on stock-specific risk may help reduce the fund’s exposure to broader macroeconomic downturns.

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

8 George Putnam Balanced Fund

What is your outlook for the corporate bond market?

PAUL For the second half of 2019, we are generally constructive on the U.S. investment-grade corporate bond market. We believe the fundamental and technical backdrop for the asset class remains strong, supporting fair valuations. Regarding fundamentals, preliminary second-quarter 2019 earnings have largely exceeded expectations; earnings per share rose 2.4%, and the median increased 4.0% year over year. Regarding technicals, we expect supply and demand to remain largely balanced over the intermediate term, subject to any surprise changes by global central banks. On the supply side, the issuance of new corporate bonds this year is expected to be 10% less than in 2018. On the demand side, inflows from retail investors have been steady. Demand from international institutions, which represents about 40% of market demand, remains somewhat hampered due to foreign exchange hedging costs.

Regarding valuations, we believe U.S. yield spreads will be supported by what we expect to be a largely stable fundamental and strong technical backdrop. We believe current spread levels are generally appropriate, which means that we do not see a fundamental reason why bond values might fall. At the same time, uncertainties in the market could heighten volatility and hurt bond prices in the intermediate term. Our outlook for global macroeconomic growth is less certain and could be more volatile, subject to unforeseen government policy changes. We remain focused on balance sheet degradation, which we believe could be more sector specific.

Kate and Paul, thanks for your time and for bringing us up to date.

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

Please note that the holdings discussed in this report may not have been held by the fund for the entire period. Portfolio composition is subject to review in accordance with the fund’s investment strategy and may vary in the future. Current and future portfolio holdings are subject to risk.

Of special interest

The fund increased its quarterly distribution rate for class A shares from $0.059 to $0.066 in August 2018 and again to $0.071 in November 2018. The first increase was made possible when the amount of income earned by the fund increased due to rising interest rates. The second increase occurred because the fund had to fully distribute undistributed income accrued during the fiscal year ended July 31, 2018. Similar increases were made to other share classes.

George Putnam Balanced Fund 9

Your fund’s performance

This section shows your fund’s performance, price, and distribution information for periods ended July 31, 2019, 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 R, R5, 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.

Fund performance Total return for periods ended 7/31/19


	Annual
	average		Annual		Annual		Annual
	(life of fund)	10 years	average	5 years	average	3 years	average	1 year
Class A (11/5/37)
Before sales charge	8.66%	152.69%	9.71%	45.94%	7.85%	32.21%	9.76%	8.86%
After sales charge	8.58	138.16	9.07	37.55	6.58	24.61	7.61	2.60
Class B (4/27/92)
Before CDSC	8.55	137.96	9.06	40.58	7.05	29.29	8.94	8.02
After CDSC	8.55	137.96	9.06	38.58	6.74	26.29	8.09	3.02
Class C (7/26/99)
Before CDSC	8.56	134.47	8.90	40.64	7.06	29.25	8.93	8.06
After CDSC	8.56	134.47	8.90	40.64	7.06	29.25	8.93	7.06
Class M (12/1/94)
Before sales charge	7.94	140.60	9.18	42.46	7.33	30.24	9.21	8.34
After sales charge	7.89	132.18	8.79	37.47	6.57	25.69	7.92	4.55
Class R (1/21/03)
Net asset value	8.39	146.54	9.44	44.17	7.59	31.28	9.50	8.58
Class R5 (12/2/13)
Net asset value	8.74	159.60	10.01	48.00	8.16	33.36	10.07	9.17
Class R6 (12/2/13)
Net asset value	8.75	160.95	10.07	48.69	8.26	33.73	10.17	9.27
Class Y (3/31/94)
Net asset value	8.74	159.23	9.99	47.87	8.14	33.19	10.03	9.15

Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results. After-sales-charge returns for class A and M shares reflect the deduction of the maximum 5.75% and 3.50% sales charge, respectively, 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 R, R5, R6, and Y shares have no initial sales charge or CDSC. Performance for class B, C, M, R, and Y shares before their inception is derived from the historical performance of class A shares, adjusted for the applicable sales charge (or CDSC) and the higher operating expenses for such shares, except for class Y shares, for which 12b-1 fees are not applicable. Performance for class R5 and R6 shares prior to their inception is derived from the historical performance

10 George Putnam Balanced Fund

of class Y shares and has not been adjusted for the lower investor servicing fees applicable to class R5 and 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 share performance reflects conversion to class A shares after eight years.

Class C share performance reflects conversion to class A shares after 10 years.

Comparative index returns For periods ended 7/31/19


	Annual
	average		Annual		Annual		Annual
	(life of fund)	10 years	average	5 years	average	3 years	average	1 year
S&P 500 Index	—^*	271.71%	14.03%	71.08%	11.34%	45.66%	13.36%	7.99%
Bloomberg Barclays U.S.
Aggregate Bond Index	—^*	44.56	3.75	16.19	3.05	6.66	2.17	8.08
George Putnam Blended
Index^†	—^*	163.04	10.15	48.42	8.22	29.41	8.98	8.37
Lipper Balanced Funds
category average^‡	—^*	116.74	7.96	30.37	5.40	22.12	6.86	4.66

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

^*The fund’s benchmarks (S&P 500 Index and George Putnam Blended Index) were introduced on 12/31/69 and 12/31/78, respectively, the Bloomberg Barclays U.S. Aggregate Bond Index was introduced on 12/31/75, and the fund’s Lipper group (Balanced Funds) was introduced on 12/31/59; they all post-date the inception of the fund’s class A shares.

^†George Putnam Blended Index is an unmanaged index administered by Putnam Management, 60% of which is the S&P 500 Index and 40% of which is the Bloomberg Barclays U.S. Aggregate Bond Index.

^‡Over the 1-year, 3-year, 5-year, and 10-year periods ended 7/31/19, there were 569, 539, 503, and 428 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 $23,796 and $23,447, respectively, and no contingent deferred sales charges would apply. A $10,000 investment in the fund’s class M shares ($9,650 after sales charge) would have been valued at $23,218. A $10,000 investment in the fund’s class R, R5, R6, and Y shares would have been valued at $24,654, $25,960, $26,095 and $25,923, respectively.

George Putnam Balanced Fund 11

Fund price and distribution information For the 12-month period ended 7/31/19


Distributions	Class A		Class B	Class C	Class M		Class R	Class R5	Class R6	Class Y
Number	4		4	4	4		4	4	4	4
Income	$0.279		$0.127	$0.141	$0.180		$0.232	$0.330	$0.351	$0.329
Capital gains
Long-term
capital gains	1.044		1.044	1.044	1.044		1.044	1.044	1.044	1.044
Short-term
capital gains	0.314		0.314	0.314	0.314		0.314	0.314	0.314	0.314
Total	$1.637		$1.485	$1.499	$1.538		$1.590	$1.688	$1.709	$1.687
	Before	After	Net	Net	Before	After	Net	Net	Net	Net
	sales	sales	asset	asset	sales	sales	asset	asset	asset	asset
Share value	charge	charge	value	value	charge	charge	value	value	value	value
7/31/18	$20.62	$21.88	$20.39	$20.47	$20.33	$21.07	$20.56	$20.79	$20.71	$20.70
7/31/19	20.63	21.89	20.38	20.46	20.32	21.06	20.56	20.82	20.73	20.72
Current rate	Before	After	Net	Net	Before	After	Net	Net	Net	Net
(end of	sales	sales	asset	asset	sales	sales	asset	asset	asset	asset
period)	charge	charge	value	value	charge	charge	value	value	value	value
Current
dividend rate¹	1.38%	1.30%	0.67%	0.76%	0.94%	0.91%	1.17%	1.59%	1.70%	1.60%
Current
30-day
SEC yield²	N/A	1.11	0.43	0.43	N/A	0.65	0.93	1.45	1.52	1.42

The classification of distributions, if any, is an estimate. Before-sales-charge share value and current dividend rate for class A and M shares, if applicable, do not take into account any sales charge levied at the time of purchase. After-sales-charge share value, current dividend rate, and current 30-day SEC yield, if applicable, are calculated assuming that the maximum sales charge (5.75% for class A shares and 3.50% for class M shares) was levied at the time of purchase. Final distribution information will appear on your year-end tax forms.

¹Most 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.

²Based only on investment income and calculated using the maximum offering price for each share class, in accordance with SEC guidelines.

12 George Putnam Balanced Fund

Fund performance as of most recent calendar quarter Total return for periods ended 6/30/19


	Annual
	average		Annual		Annual		Annual
	(life of fund)	10 years	average	5 years	average	3 years	average	1 year
Class A (11/5/37)
Before sales charge	8.65%	161.63%	10.10%	42.33%	7.32%	34.26%	10.32%	10.10%
After sales charge	8.57	146.59	9.45	34.15	6.05	26.54	8.16	3.77
Class B (4/27/92)
Before CDSC	8.54	146.23	9.43	37.11	6.52	31.28	9.50	9.32
After CDSC	8.54	146.23	9.43	35.11	6.20	28.28	8.66	4.32
Class C (7/26/99)
Before CDSC	8.55	142.68	9.27	37.04	6.51	31.25	9.49	9.25
After CDSC	8.55	142.68	9.27	37.04	6.51	31.25	9.49	8.25
Class M (12/1/94)
Before sales charge	7.93	149.08	9.56	38.78	6.77	32.27	9.77	9.59
After sales charge	7.88	140.37	9.17	33.93	6.02	27.64	8.47	5.76
Class R (1/21/03)
Net asset value	8.38	155.29	9.83	40.51	7.04	33.32	10.06	9.82
Class R5 (12/2/13)
Net asset value	8.74	168.78	10.39	44.36	7.62	35.50	10.66	10.46
Class R6 (12/2/13)
Net asset value	8.74	170.03	10.44	44.96	7.71	35.80	10.74	10.51
Class Y (3/31/94)
Net asset value	8.73	168.25	10.37	44.07	7.58	35.25	10.59	10.40

See the discussion following the fund performance table on page 10 for information about the calculation of fund performance.

George Putnam Balanced Fund 13

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. 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 M	Class R	Class R5	Class R6	Class Y
Total annual operating expenses
for the fiscal year ended 7/31/18	0.99%	1.74%	1.74%	1.49%	1.24%	0.73%	0.63%	0.74%
Annualized expense ratio
for the six-month period
ended 7/31/19^*	0.98%	1.73%	1.73%	1.48%	1.23%	0.72%	0.62%	0.73%

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.

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

Expenses per $1,000

The following table shows the expenses you would have paid on a $1,000 investment in each class of the fund from 2/1/19 to 7/31/19. 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 M	Class R	Class R5	Class R6	Class Y
Expenses paid per $1,000^*†	$5.11	$9.00	$9.00	$7.70	$6.41	$3.76	$3.23	$3.81
Ending value (after expenses)	$1,101.90	$1,097.30	$1,097.50	$1,099.10	$1,100.50	$1,103.40	$1,103.80	$1,103.30

^*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 7/31/19. 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; and then dividing that result by the number of days in the year.

14 George Putnam Balanced Fund

Estimate the expenses you paid

To estimate the ongoing expenses you paid for the six months ended 7/31/19, use the following calculation method. To find the value of your investment on 2/1/19, 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 M	Class R	Class R5	Class R6	Class Y
Expenses paid per $1,000^*†	$4.91	$8.65	$8.65	$7.40	$6.16	$3.61	$3.11	$3.66
Ending value (after expenses)	$1,019.93	$1,016.22	$1,016.22	$1,017.46	$1,018.70	$1,021.22	$1,021.72	$1,021.17

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

George Putnam Balanced Fund 15

Consider these risks before investing

The value of investments in the fund’s portfolio may fall or fail to rise over extended periods of time for a variety of reasons, including general economic, political, or financial market conditions; investor sentiment and market perceptions; government actions; geopolitical events or changes; and factors related to a specific issuer, asset class, geography, industry, or sector. These and other factors may lead to increased volatility and reduced liquidity in the fund’s portfolio holdings. Growth stocks may be more susceptible to earnings disappointments, and value stocks may fail to rebound. 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 generally greater for longer-term bonds, and credit risk is generally greater for below-investment-grade bonds. Risks associated with derivatives include increased investment exposure (which may be considered leverage) and, in the case of over-the-counter instruments, the potential inability to terminate or sell derivatives positions and the potential failure of the other party to the instrument to meet its obligations. You can lose money by investing in the fund.

16 George Putnam Balanced Fund

Terms and definitions

Important terms

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

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

After sales charge is the price of a mutual fund share plus the maximum sales charge levied at the time of purchase. After-sales-charge performance figures shown here assume the 5.75% maximum sales charge for class A shares and 3.50% for class M 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.

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

Share 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 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 M shares have a lower initial sales charge and a higher 12b-1 fee than class A shares and no CDSC.

Class R shares are not subject to an initial sales charge or CDSC and are only available to employer-sponsored retirement plans.

Class R5 shares are not subject to an initial sales charge or CDSC and carry no 12b-1 fee. They are only available to employer-sponsored retirement plans.

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.

Comparative indexes

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

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

George Putnam Blended Index is an unmanaged index administered by Putnam Management, LLC, 60% of which is the S&P 500 Index and 40% of which is the Bloomberg Barclays U.S. Aggregate Bond Index.

George Putnam Balanced Fund 17

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

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

Indexes assume reinvestment of all distributions and do not account for fees. Securities and performance of a fund and an index will differ. You cannot invest directly in an index.

ICE Data Indices, LLC (“ICE BofAML”), used with permission. ICE BofAML permits use of the ICE BofAML 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 BofAML 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 is a third-party industry-ranking entity that ranks mutual funds. Its rankings do not reflect sales charges. Lipper rankings are based on total return at net asset value relative to other funds that have similar current investment styles or objectives as determined by Lipper. Lipper may change a fund’s category assignment at its discretion. Lipper category averages reflect performance trends for funds within a category.

Other information for shareholders

Proxy voting

Putnam is committed to managing our mutual funds in the best interests of our shareholders. The Putnam funds’ proxy voting guidelines and procedures, as well as information regarding how your fund voted proxies relating to portfolio securities during the 12-month period ended June 30, 2019, 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 July 31, 2019, Putnam employees had approximately $478,000,000 and the Trustees had approximately $72,000,000 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.

18 George Putnam Balanced Fund

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.

George Putnam Balanced Fund 19

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 discussed with representatives of Putnam Management the annual contract review materials furnished to the Contract Committee during the course of the previous year’s review, identifying possible changes in these materials that might be necessary or desirable for the coming year. 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 2019, 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 2019, 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 2019 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 and sub-management contracts, effective July 1, 2019. (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 such 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

20 George Putnam Balanced Fund

years. For example, with some minor exceptions, the funds’ current fee arrangements under the 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. 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.)

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 structure for your fund would be appropriate at this time.

Under its management contract, your fund has the benefit of breakpoints in its management fee schedule that provide shareholders with economies of scale in the form of reduced fee rates as assets under management in the Putnam family of funds increase. The Trustees concluded that the fee schedule in effect for your fund represented an appropriate sharing of economies of scale between fund shareholders and Putnam Management.

As in the past, the Trustees also focused on the competitiveness of each fund’s total expense ratio. In order to support the effort to have fund expenses meet competitive standards, 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 2018. These expense limitations were: (i) a contractual expense limitation applicable to all open-end funds 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, including your fund, had sufficiently low expenses that these expense limitations were not operative during their fiscal years ending in 2018. Putnam Management and PSERV have agreed to maintain these expense limitations until at least November 30, 2020. The support of Putnam Management and PSERV for these expense limitation arrangements was an important factor in the Trustees’ decision to approve the continuance of your fund’s management and sub-management contracts.

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 first 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 first quintile in total expenses (excluding any applicable 12b-1 fees) as of December 31, 2018. 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 December 31, 2018 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

George Putnam Balanced Fund 21

regard, the Trustees also reviewed an analysis of Putnam Management’s revenues, expenses and profitability, 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 represented reasonable compensation for the services being provided and represented an appropriate sharing between fund shareholders and Putnam Management of such 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 fees charged by Putnam Management and its affiliates to institutional clients, including defined benefit pension and profit-sharing plans and sub-advised mutual funds. This information included, in cases where an institutional 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 different types of 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 markets. The Trustees considered the fact that in many cases fee rates across different asset classes are higher on average for mutual funds than for institutional 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 the Putnam funds’ 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 the funds’ portfolio teams and with the Chief Investment Officers and other senior members 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, after a strong start to the year, 2018 was a mixed year for The Putnam Funds, with the Putnam open-end Funds’ performance, on an asset-weighted basis, ranking in the 54th percentile of their Lipper Inc. (“Lipper”) peers (excluding those Putnam funds that are evaluated based on their total returns versus selected investment benchmarks). The Trustees also noted that The Putnam Funds were ranked by the Barron’s/Lipper Fund Families survey as the 41st-best performing mutual fund complex out of 57 complexes for the one-year period ended December 31, 2018 and the 29th-best performing mutual fund complex out of 55 complexes for the five-year period ended December 31, 2018. The Trustees observed that The Putnam Funds’ performance over the longer-term continued to be strong, ranking 6th out of 49 mutual fund complexes in the survey over the ten-year period ended 2018. In addition, the Trustees noted that 22 of the funds were four- or five-star rated by Morningstar Inc. at the end of 2018. They also noted, however, the disappointing investment performance of some funds for periods ended December 31, 2018 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, including the effectiveness of any efforts Putnam Management has undertaken to address underperformance and whether additional actions to address areas of underperformance are warranted.

22 George Putnam Balanced Fund

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 with 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 Balanced Funds) for the one-year, three-year and five-year periods ended December 31, 2018 (the first quartile representing the best-performing funds and the fourth quartile the worst-performing funds):


One-year period	1st
Three-year period	1st
Five-year period	1st

For the three-year and five-year periods ended December 31, 2018, your fund’s performance was in the top decile of its Lipper peer group. Over the one-year, three-year and five-year periods ended December 31, 2018, there were 584, 544 and 511 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 initiatives including structuring compensation for portfolio managers and research analysts 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 in 2018 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 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. However, the Trustees noted that a portion of available soft dollars continues to be used to pay fund expenses. The Trustees indicated their continued intent to monitor regulatory and industry developments in this area with the assistance of their Brokerage Committee. The Trustees also 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 contracts 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 services provided were required for the operation of the funds, and that they were of a quality at least equal to those provided by other providers.

George Putnam Balanced 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 year.

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 George Putnam Balanced Fund

Report of Independent Registered Public Accounting Firm

To the Trustees and Shareholders of
George Putnam Balanced Fund

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the fund’s portfolio, of George Putnam Balanced Fund (the “Fund”) as of July 31, 2019, the related statement of operations for the year ended July 31, 2019, the statement of changes in net assets for each of the two years in the period ended July 31, 2019, including the related notes, and the financial highlights for each of the five years in the period ended July 31, 2019 (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 July 31, 2019, 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 July 31, 2019 and the financial highlights for each of the five years in the period ended July 31, 2019 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

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

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

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of July 31, 2019 by correspondence with the custodian, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Boston, Massachusetts
September 19, 2019

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

George Putnam Balanced Fund 25

The fund’s portfolio 7/31/19


COMMON STOCKS (61.5%)*	Shares	Value
Basic materials (2.4%)
Anglo American PLC (United Kingdom)	119,087	$2,940,027
Apollo Global Management, LLC Class A	25,183	831,039
Dow, Inc.	38,476	1,863,777
DuPont de Nemours, Inc.	19,781	1,427,394
Fortune Brands Home & Security, Inc.	90,933	4,995,859
Freeport-McMoRan, Inc. (Indonesia)	453,469	5,015,367
Linde PLC	30,642	5,861,202
Sherwin-Williams Co. (The)	12,175	6,246,262
Summit Materials, Inc. Class A ^†	74,023	1,364,984
W.R. Grace & Co.	9,816	665,623
		31,211,534
Capital goods (3.6%)
AptarGroup, Inc.	4,981	602,801
Avery Dennison Corp.	9,142	1,050,142
Ball Corp.	30,133	2,153,907
Boeing Co. (The)	11,956	4,079,148
Deere & Co.	14,248	2,360,181
Eaton Corp. PLC	79,646	6,546,105
General Dynamics Corp.	21,078	3,919,243
Honeywell International, Inc.	53,061	9,150,900
Johnson Controls International PLC	75,763	3,215,382
Northrop Grumman Corp.	12,891	4,454,743
Roper Technologies, Inc.	7,187	2,613,553
TransDigm Group, Inc. ^†	5,457	2,649,046
United Technologies Corp.	28,238	3,772,597
Waste Connections, Inc.	16,136	1,463,858
		48,031,606
Communication services (1.5%)
AT&T, Inc.	175,273	5,968,046
Charter Communications, Inc. Class A ^†	19,660	7,576,571
SBA Communications Corp. ^{† R}	28,053	6,884,487
		20,429,104
Communications equipment (0.3%)
Cisco Systems, Inc.	63,725	3,530,365
		3,530,365
Computers (1.8%)
Apple, Inc.	111,321	23,715,826
		23,715,826
Conglomerates (0.8%)
3M Co.	12,204	2,132,283
Danaher Corp.	36,431	5,118,556
General Electric Co.	260,655	2,723,845
		9,974,684
Consumer cyclicals (9.4%)
Advance Auto Parts, Inc.	9,130	1,375,343
Amazon.com, Inc. ^†	14,381	26,846,163
Aramark	44,930	1,626,017
BJ’s Wholesale Club Holdings, Inc. ^†	65,971	1,554,277

26 George Putnam Balanced Fund


COMMON STOCKS (61.5%)* cont.	Shares	Value
Consumer cyclicals cont.
Booking Holdings, Inc. ^†	3,484	$6,572,949
Burlington Stores, Inc. ^†	10,695	1,933,121
CarMax, Inc. ^†	21,952	1,926,508
CoStar Group, Inc. ^†	2,885	1,775,429
Ecolab, Inc.	7,874	1,588,422
General Motors Co.	269,335	10,864,974
Hilton Worldwide Holdings, Inc.	52,027	5,023,207
Home Depot, Inc. (The)	68,439	14,624,730
Levi Strauss & Co. Class A ^{† S}	73,439	1,399,747
Mastercard, Inc. Class A	37,855	10,306,781
MGM Resorts International	50,364	1,511,927
NIKE, Inc. Class B	55,792	4,799,786
Stanley Black & Decker, Inc.	19,942	2,943,240
TJX Cos., Inc. (The)	49,447	2,697,828
United Rentals, Inc. ^†	20,787	2,630,595
Walt Disney Co. (The)	51,985	7,434,375
Walmart, Inc.	93,192	10,286,533
Wynn Resorts, Ltd.	31,201	4,058,314
		123,780,266
Consumer staples (5.3%)
Chipotle Mexican Grill, Inc. ^†	5,411	4,304,613
Coca-Cola Co. (The)	277,248	14,591,562
Costco Wholesale Corp.	13,047	3,596,145
Hershey Co. (The)	35,330	5,360,974
McCormick & Co., Inc. (non-voting shares)	22,974	3,642,298
Netflix, Inc. ^†	26,738	8,636,107
PepsiCo, Inc.	25,209	3,221,962
Procter & Gamble Co. (The)	144,638	17,073,070
Tyson Foods, Inc. Class A	36,560	2,906,520
Ulta Beauty, Inc. ^†	6,857	2,394,807
Yum China Holdings, Inc. (China)	87,723	3,991,397
		69,719,455
Electronics (1.9%)
NXP Semiconductors NV	96,557	9,983,028
ON Semiconductor Corp. ^†	307,856	6,621,983
Texas Instruments, Inc.	70,945	8,868,834
		25,473,845
Energy (2.5%)
BP PLC (United Kingdom)	1,426,558	9,407,891
Cairn Energy PLC (United Kingdom) ^†	921,657	1,764,602
Cenovus Energy, Inc. (Canada)	1,092,935	10,160,867
Encana Corp. (Canada)	460,920	2,105,885
Enterprise Products Partners LP	253,011	7,618,161
Kosmos energy, Ltd.	417,144	2,507,035
		33,564,441
Financials (9.8%)
American International Group, Inc.	160,459	8,984,099
Assured Guaranty, Ltd.	224,022	9,787,521
AXA SA (France)	39,957	1,009,892

George Putnam Balanced Fund 27


COMMON STOCKS (61.5%)* cont.	Shares	Value
Financials cont.
Bank of America Corp.	546,677	$16,772,050
BlackRock, Inc.	9,335	4,365,793
Citigroup, Inc.	186,463	13,268,707
E*Trade Financial Corp.	105,243	5,134,806
Gaming and Leisure Properties, Inc. ^R	162,727	6,136,435
Goldman Sachs Group, Inc. (The)	41,334	9,098,853
Intercontinental Exchange, Inc.	40,023	3,516,421
JPMorgan Chase & Co.	66,039	7,660,524
KKR & Co., Inc. Class A	196,497	5,256,295
Oportun Financial Corp. (acquired 6/23/15, cost $386,984) (Private) ^†^{∆∆ F}	135,784	308,267
PNC Financial Services Group, Inc. (The)	52,220	7,462,238
Prudential PLC (United Kingdom)	374,356	7,720,677
Raymond James Financial, Inc.	52,295	4,218,638
Visa, Inc. Class A	64,786	11,531,894
Wells Fargo & Co.	87,988	4,259,499
Yellow Cake PLC 144A (United Kingdom) ^†	884,353	2,280,465
		128,773,074
Health care (7.8%)
Abbott Laboratories	77,966	6,790,839
AbbVie, Inc.	64,721	4,311,713
Allergan PLC	14,579	2,339,930
Amgen, Inc.	22,994	4,290,221
Baxter International, Inc.	38,074	3,197,074
Becton Dickinson and Co.	3,272	827,162
Boston Scientific Corp. ^†	107,084	4,546,787
Bristol-Myers Squibb Co.	63,412	2,816,127
Cigna Corp.	60,430	10,268,266
Cooper Cos., Inc. (The)	6,656	2,245,734
CVS Health Corp.	52,984	2,960,216
Edwards Lifesciences Corp. ^†	11,770	2,505,245
Eli Lilly & Co.	33,102	3,606,463
Gilead Sciences, Inc.	31,582	2,069,253
IDEXX Laboratories, Inc. ^†	7,415	2,091,401
Johnson & Johnson	66,086	8,605,719
Medicines Co. (The) ^{† S}	22,995	824,141
Medtronic PLC	20,542	2,094,051
Merck & Co., Inc.	112,674	9,350,815
Mettler-Toledo International, Inc. ^†	1,681	1,272,097
Pfizer, Inc.	148,480	5,766,963
Stryker Corp.	19,329	4,054,838
Thermo Fisher Scientific, Inc.	18,158	5,042,113
UnitedHealth Group, Inc.	28,043	6,982,987
Vertex Pharmaceuticals, Inc. ^†	25,246	4,206,489
		103,066,644
Software (4.9%)
Activision Blizzard, Inc.	98,679	4,809,614
Adobe, Inc. ^†	29,795	8,904,534
Dassault Systemes SA (France)	28,205	4,269,751
DouYu International Holdings, Ltd. ADR (China) ^{† S}	239,636	2,341,244

28 George Putnam Balanced Fund


COMMON STOCKS (61.5%)* cont.	Shares	Value
Software cont.
Electronic Arts, Inc. ^†	41,028	$3,795,090
Microsoft Corp.	270,498	36,860,762
NetEase, Inc. ADR (China)	17,821	4,113,443
		65,094,438
Technology services (6.1%)
Alphabet, Inc. Class A ^†	22,738	27,699,432
DXC Technology Co.	160,704	8,962,462
Facebook, Inc. Class A ^†	88,914	17,269,766
Fidelity National Information Services, Inc.	84,353	11,240,037
Fiserv, Inc. ^†	67,394	7,105,303
Salesforce.com, Inc. ^†	48,459	7,486,916
		79,763,916
Transportation (1.1%)
Air Canada (Canada) ^†	65,832	2,265,064
FedEx Corp.	7,331	1,250,155
Norfolk Southern Corp.	19,337	3,695,687
Union Pacific Corp.	38,734	6,970,183
		14,181,089
Utilities and power (2.3%)
Ameren Corp.	48,261	3,652,875
American Electric Power Co., Inc.	98,701	8,666,935
Edison International	26,586	1,981,720
Exelon Corp.	132,252	5,959,275
NextEra Energy, Inc.	28,107	5,822,927
NRG Energy, Inc.	124,136	4,238,003
		30,321,735
Total common stocks (cost $702,036,706)		$810,632,022

U.S. GOVERNMENT AND AGENCY	Principal
MORTGAGE OBLIGATIONS (9.3%)*	amount	Value
U.S. Government Guaranteed Mortgage Obligations (3.0%)
Government National Mortgage Association Pass-Through Certificates
5.00%, TBA, 8/1/49	$1,000,000	$1,045,938
5.00%, 2/20/49	3,977,345	4,310,965
4.50%, 3/20/49	631,233	672,309
4.00%, 4/15/43	4,685,740	4,976,350
3.50%, TBA, 8/1/49	7,000,000	7,237,891
3.50%, with due dates from 2/20/43 to 2/20/48	12,208,541	12,669,110
3.00%, with due dates from 7/20/46 to 10/20/46	7,905,765	8,086,165
		38,998,728
U.S. Government Agency Mortgage Obligations (6.3%)
Federal Home Loan Mortgage Corporation Pass-Through Certificates
3.50%, 12/1/49	$137,750	$142,782
6.00%, 3/1/35	1,221	1,377
4.00%, with due dates from 7/1/42 to 7/1/49	10,073,510	10,551,467
3.50%, with due dates from 12/1/42 to 4/1/43	492,652	515,372
3.00%, with due dates from 3/1/43 to 2/1/47	2,958,221	3,005,871

George Putnam Balanced Fund 29


U.S. GOVERNMENT AND AGENCY	Principal
MORTGAGE OBLIGATIONS (9.3%)* cont.	amount	Value
U.S. Government Agency Mortgage Obligations cont.
Federal National Mortgage Association Pass-Through Certificates
5.50%, with due dates from 7/1/33 to 11/1/38	$1,536,971	$1,707,572
5.00%, with due dates from 8/1/33 to 1/1/39	443,129	482,278
4.50%, with due dates from 5/1/48 to 2/1/49	9,404,877	10,054,172
4.00%, with due dates from 12/1/44 to 6/1/48	8,811,137	9,249,384
3.50%, with due dates from 5/1/43 to 1/1/57	4,814,146	5,009,276
3.00%, with due dates from 12/1/30 to 3/1/47	10,765,775	10,970,547
2.00%, with due dates from 10/1/27 to 8/1/28	6,691,893	6,619,517
Uniform Mortgage-Backed Securities
4.50%, TBA, 8/1/49	3,000,000	3,145,078
4.00%, TBA, 8/1/49	6,000,000	6,211,406
3.50%, TBA, 8/1/49	14,000,000	14,336,875
3.00%, TBA, 8/1/49	1,000,000	1,008,984
		83,011,958
Total U.S. government and agency mortgage obligations (cost $120,546,234)		$122,010,686

	Principal
U.S. TREASURY OBLIGATIONS (11.9%)*	amount	Value
U.S. Treasury Bonds
3.00%, 2/15/47	$12,910,000	$14,145,527
2.75%, 8/15/42	21,110,000	22,152,636
U.S. Treasury Notes
2.625%, 6/15/21	13,990,000	14,172,088
2.25%, 2/15/21	23,000,000	23,099,457
2.125%, 12/31/22	9,100,000	9,184,175
2.00%, 2/15/22	1,000,000	1,003,516
2.00%, 11/30/20	14,840,000	14,842,202
1.875%, 11/30/21	13,000,000	13,000,508
1.75%, 6/30/22	17,000,000	16,957,765
1.625%, 10/31/23	13,820,000	13,693,029
1.625%, 11/30/20 ⁱ	133,000	132,738
1.50%, 5/31/20	14,040,000	13,970,897
1.375%, 8/31/23 ⁱ	243,000	239,892
1.125%, 2/28/21 ⁱ	216,000	214,231
Total U.S. treasury obligations (cost $153,475,266)		$156,808,661

	Principal
CORPORATE BONDS AND NOTES (14.1%)*	amount	Value
Basic materials (0.8%)
Celanese US Holdings, LLC company guaranty sr. unsec. notes
3.50%, 5/8/24 (Germany)	$289,000	$296,833
Celanese US Holdings, LLC company guaranty sr. unsec. unsub.
notes 4.625%, 11/15/22 (Germany)	668,000	705,144
CF Industries, Inc. 144A company guaranty sr. notes
4.50%, 12/1/26	1,595,000	1,694,101
Glencore Funding, LLC 144A company guaranty sr. unsec. unsub.
notes 4.625%, 4/29/24	1,036,000	1,095,408
Glencore Funding, LLC 144A company guaranty sr. unsec. unsub.
notes 4.00%, 4/16/25	703,000	722,841

30 George Putnam Balanced Fund


	Principal
CORPORATE BONDS AND NOTES (14.1%)* cont.	amount	Value
Basic materials cont.
International Flavors & Fragrances, Inc. sr. unsec. notes
4.45%, 9/26/28	$625,000	$683,214
International Paper Co. sr. unsec. notes 8.70%, 6/15/38	10,000	14,439
Nutrien, Ltd. sr. unsec. sub. bonds 4.20%, 4/1/29 (Canada)	953,000	1,028,555
Sherwin-Williams Co. (The) sr. unsec. unsub. bonds 3.45%, 6/1/27	801,000	821,128
Westlake Chemical Corp. company guaranty sr. unsec. unsub.
bonds 4.375%, 11/15/47	147,000	142,027
Westlake Chemical Corp. company guaranty sr. unsec. unsub.
notes 3.60%, 8/15/26	1,140,000	1,159,384
WestRock MWV, LLC company guaranty sr. unsec. unsub. notes
8.20%, 1/15/30	1,040,000	1,409,997
WestRock MWV, LLC company guaranty sr. unsec. unsub. notes
7.95%, 2/15/31	187,000	251,179
Weyerhaeuser Co. sr. unsec. unsub. notes 7.375%, 3/15/32 ^R	553,000	767,144
		10,791,394
Capital goods (0.4%)
Johnson Controls International PLC sr. unsec. unsub. bonds
4.50%, 2/15/47	1,145,000	1,185,255
L3Harris Technologies, Inc. 144A sr. unsec. sub. notes
4.40%, 6/15/28	510,000	562,585
L3Harris Technologies, Inc. 144A sr. unsec. sub. notes
3.85%, 12/15/26	940,000	992,138
Northrop Grumman Corp. sr. unsec. unsub. notes 3.25%, 1/15/28	889,000	916,018
Oshkosh Corp. sr. unsec. sub. notes 4.60%, 5/15/28	1,025,000	1,083,323
Waste Connections, Inc. sr. unsec. sub. bonds 3.50%, 5/1/29	1,010,000	1,051,758
		5,791,077
Communication services (1.4%)
American Tower Corp. sr. unsec. unsub. bonds 3.55%, 7/15/27 ^R	686,000	705,054
American Tower Corp. sr. unsec. unsub. bonds 3.375%, 10/15/26 ^R	385,000	394,248
AT&T, Inc. sr. unsec. notes 4.10%, 2/15/28	1,539,000	1,634,984
AT&T, Inc. sr. unsec. sub. notes 2.95%, 7/15/26	62,000	62,197
AT&T, Inc. sr. unsec. unsub. bonds 4.35%, 3/1/29	1,335,000	1,441,725
AT&T, Inc. sr. unsec. unsub. notes 4.75%, 5/15/46	132,000	139,534
CC Holdings GS V, LLC/Crown Castle GS III Corp. company guaranty
sr. notes 3.849%, 4/15/23	240,000	250,014
Charter Communications Operating, LLC/Charter
Communications Operating Capital Corp. company guaranty sr.
sub. bonds 6.484%, 10/23/45	1,055,000	1,245,480
Charter Communications Operating, LLC/Charter
Communications Operating Capital Corp. company guaranty sr.
sub. notes 4.908%, 7/23/25	274,000	295,424
Charter Communications Operating, LLC/Charter
Communications Operating Capital C company guaranty sr. sub.
bonds 5.375%, 5/1/47	506,000	532,644
Comcast Cable Communications Holdings, Inc. company
guaranty sr. unsec. notes 9.455%, 11/15/22	645,000	789,749
Comcast Corp. company guaranty sr. unsec. unsub. bonds
3.999%, 11/1/49	605,000	639,751
Comcast Corp. company guaranty sr. unsec. unsub. notes
6.50%, 11/15/35	268,000	364,552

George Putnam Balanced Fund 31


	Principal
CORPORATE BONDS AND NOTES (14.1%)* cont.	amount	Value
Communication services cont.
Comcast Corp. company guaranty sr. unsec. unsub. notes
3.15%, 3/1/26	$490,000	$507,760
Cox Communications, Inc. 144A sr. unsec. bonds 3.50%, 8/15/27	637,000	651,685
Crown Castle International Corp. sr. unsec. bonds 3.80%, 2/15/28 ^R	458,000	478,519
Crown Castle International Corp. sr. unsec. bonds 3.65%, 9/1/27 ^R	549,000	568,257
Crown Castle International Corp. sr. unsec. notes 4.875%, 4/15/22 ^R	313,000	331,389
Crown Castle International Corp. sr. unsec. notes 4.75%, 5/15/47 ^R	185,000	205,023
Crown Castle International Corp. sr. unsec. notes 3.15%, 7/15/23 ^R	85,000	86,660
Equinix, Inc. sr. unsec. notes 5.375%, 5/15/27 ^R	741,000	795,426
Rogers Communications, Inc. company guaranty sr. unsec. bonds
8.75%, 5/1/32 (Canada)	95,000	137,421
Rogers Communications, Inc. company guaranty sr. unsec. unsub.
notes 4.50%, 3/15/43 (Canada)	215,000	234,214
Sprint Spectrum Co., LLC/Sprint Spectrum Co. II, LLC/Sprint
Spectrum Co. III, LLC 144A company guaranty sr. notes
3.36%, 9/20/21	537,188	538,799
Telefonica Emisiones SA company guaranty sr. unsec. bonds
4.895%, 3/6/48 (Spain)	1,050,000	1,149,207
Verizon Communications, Inc. sr. unsec. unsub. notes
4.329%, 9/21/28	2,680,000	2,973,435
Videotron, Ltd./Videotron Ltee. 144A sr. unsec. notes 5.125%,
4/15/27 (Canada)	490,000	513,275
Vodafone Group PLC sr. unsec. unsub. notes 4.375%, 5/30/28
(United Kingdom)	700,000	760,305
		18,426,731
Consumer cyclicals (1.5%)
Alimentation Couche-Tard, Inc. 144A company guaranty sr. unsec.
notes 3.55%, 7/26/27 (Canada)	995,000	1,017,855
Amazon.com, Inc. sr. unsec. notes 4.05%, 8/22/47	1,105,000	1,255,990
Amazon.com, Inc. sr. unsec. notes 3.15%, 8/22/27	654,000	685,452
Autonation, Inc. company guaranty sr. unsec. notes 4.50%, 10/1/25	255,000	266,384
Autonation, Inc. company guaranty sr. unsec. unsub. notes
5.50%, 2/1/20	847,000	857,837
BMW US Capital, LLC 144A company guaranty sr. unsec. notes
3.95%, 8/14/28	671,000	725,950
BMW US Capital, LLC 144A company guaranty sr. unsec. notes
3.40%, 8/13/21	390,000	397,297
CBS Corp. company guaranty sr. unsec. bonds 4.20%, 6/1/29	360,000	382,159
CBS Corp. company guaranty sr. unsec. unsub. bonds
2.90%, 1/15/27	457,000	445,484
CBS Corp. company guaranty sr. unsec. unsub. notes
4.60%, 1/15/45	615,000	647,075
CBS Corp. company guaranty sr. unsec. unsub. notes
4.00%, 1/15/26	198,000	208,193
Fox Corp. 144A company guaranty sr. unsec. notes 4.03%, 1/25/24	445,000	471,243
General Motors Financial Co., Inc. company guaranty sr. unsec.
notes 4.00%, 10/6/26	287,000	289,796
General Motors Financial Co., Inc. company guaranty sr. unsec.
unsub. notes 4.30%, 7/13/25	252,000	259,538
General Motors Financial Co., Inc. company guaranty sr. unsec.
unsub. notes 4.00%, 1/15/25	175,000	178,127

32 George Putnam Balanced Fund


	Principal
CORPORATE BONDS AND NOTES (14.1%)* cont.	amount	Value
Consumer cyclicals cont.
Hilton Domestic Operating Co., Inc. company guaranty sr. unsec.
sub. notes 4.25%, 9/1/24	$205,000	$207,604
Hilton Domestic Operating Co., Inc. 144A company guaranty sr.
unsec. unsub. bonds 4.875%, 1/15/30	100,000	102,750
Hilton Worldwide Finance, LLC/Hilton Worldwide Finance Corp.
company guaranty sr. unsec. notes 4.875%, 4/1/27	840,000	870,450
IHS Markit, Ltd. 144A company guaranty notes 4.75%, 2/15/25
(United Kingdom)	1,415,000	1,519,356
IHS Markit, Ltd. 144A company guaranty sr. unsec. notes 4.00%,
3/1/26 (United Kingdom)	350,000	364,000
Interpublic Group of Cos., Inc. (The) sr. unsec. sub. bonds
4.65%, 10/1/28	1,668,000	1,844,279
Lear Corp. sr. unsec. unsub. bonds 3.80%, 9/15/27	824,000	817,198
Omnicom Group, Inc. company guaranty sr. unsec. unsub. notes
3.60%, 4/15/26	416,000	429,768
QVC, Inc. company guaranty sr. notes 4.85%, 4/1/24	390,000	402,254
S&P Global, Inc. company guaranty sr. unsec. unsub. notes
4.40%, 2/15/26	539,000	596,124
Sirius XM Radio, Inc. 144A sr. unsec. bonds 5.00%, 8/1/27	1,115,000	1,145,663
Standard Industries, Inc. 144A sr. unsec. notes 5.00%, 2/15/27	1,315,000	1,338,013
TWDC Enterprises 18 Corp. 144A company guaranty sr. unsec.
bonds 4.75%, 9/15/44	30,000	37,004
TWDC Enterprises 18 Corp. 144A company guaranty sr. unsec.
notes 7.75%, 1/20/24	1,060,000	1,281,219
		19,044,062
Consumer staples (0.7%)
Anheuser-Busch InBev Worldwide, Inc. company guaranty sr.
unsec. unsub. bonds 5.55%, 1/23/49	239,000	296,695
Anheuser-Busch InBev Worldwide, Inc. company guaranty sr.
unsec. unsub. bonds 4.95%, 1/15/42	200,000	225,143
Anheuser-Busch InBev Worldwide, Inc. company guaranty sr.
unsec. unsub. notes 4.75%, 1/23/29	286,000	325,795
Anheuser-Busch InBev Worldwide, Inc. company guaranty sr.
unsec. unsub. notes 4.15%, 1/23/25	239,000	257,249
Ashtead Capital, Inc. 144A notes 4.375%, 8/15/27	1,155,000	1,160,775
CVS Pass-Through Trust 144A sr. mtge. notes 7.507%, 1/10/32	563,735	695,374
ERAC USA Finance, LLC 144A company guaranty sr. unsec. notes
7.00%, 10/15/37	1,434,000	1,960,653
ERAC USA Finance, LLC 144A company guaranty sr. unsec. notes
5.625%, 3/15/42	566,000	682,001
Keurig Dr Pepper, Inc. company guaranty sr. unsec. unsub. notes
4.597%, 5/25/28	1,490,000	1,633,228
Keurig Dr Pepper, Inc. company guaranty sr. unsec. unsub. notes
4.417%, 5/25/25	181,000	194,411
Lamb Weston Holdings, Inc. 144A company guaranty sr. unsec.
unsub. notes 4.875%, 11/1/26	816,000	846,600
Walgreens Boots Alliance, Inc. sr. unsec. bonds 3.45%, 6/1/26	588,000	599,498
		8,877,422

George Putnam Balanced Fund 33


	Principal
CORPORATE BONDS AND NOTES (14.1%)* cont.	amount	Value
Energy (1.2%)
BG Energy Capital PLC 144A company guaranty sr. unsec. unsub.
notes 4.00%, 10/15/21 (United Kingdom)	$250,000	$258,491
BP Capital Markets America, Inc. company guaranty sr. unsec.
notes 3.119%, 5/4/26	770,000	791,762
BP Capital Markets America, Inc. company guaranty sr. unsec.
unsub. notes 3.937%, 9/21/28	690,000	749,394
Cheniere Corpus Christi Holdings, LLC company guaranty sr. notes
5.125%, 6/30/27	395,000	430,017
Concho Resources, Inc. company guaranty sr. unsec. notes
3.75%, 10/1/27	999,000	1,028,988
Energy Transfer Operating LP company guaranty sr. unsec. bonds
6.25%, 4/15/49	137,000	162,907
Energy Transfer Partners LP jr. unsec. sub. FRB Ser. B, 6.625%,
perpetual maturity	2,076,000	1,972,200
Energy Transfer Partners LP sr. unsec. unsub. notes 7.60%, 2/1/24	470,000	544,170
Energy Transfer Partners LP sr. unsec. unsub. notes 5.20%, 2/1/22	265,000	277,303
EOG Resources, Inc. sr. unsec. unsub. notes 4.15%, 1/15/26	1,480,000	1,620,115
Equinor ASA company guaranty sr. unsec. notes 5.10%,
8/17/40 (Norway)	550,000	689,804
Lukoil International Finance BV 144A company guaranty sr. unsec.
notes 4.563%, 4/24/23 (Russia)	315,000	329,963
Marathon Petroleum Corp. sr. unsec. unsub. notes 6.50%, 3/1/41	175,000	220,026
Sabine Pass Liquefaction, LLC sr. bonds 4.20%, 3/15/28	175,000	182,909
Sabine Pass Liquefaction, LLC sr. notes 5.00%, 3/15/27	878,000	957,043
Targa Resources Partners LP/Targa Resources Partners Finance
Corp. company guaranty sr. unsec. unsub. notes 5.00%, 1/15/28	560,000	567,700
Total Capital International SA company guaranty sr. unsec. unsub.
notes 2.829%, 1/10/30 (France)	2,050,000	2,060,024
Transcanada Trust company guaranty jr. unsec. sub. FRB 5.30%,
3/15/77 (Canada)	1,285,000	1,278,704
Williams Partners LP sr. unsec. sub. notes 4.30%, 3/4/24	1,557,000	1,646,196
Williams Partners LP sr. unsec. sub. notes 3.60%, 3/15/22	275,000	281,696
		16,049,412
Financials (4.6%)
Air Lease Corp. sr. unsec. sub. bonds 4.625%, 10/1/28	455,000	494,201
Air Lease Corp. sr. unsec. unsub. notes 3.625%, 4/1/27	801,000	816,727
Ally Financial, Inc. sub. unsec. notes 5.75%, 11/20/25	493,000	550,311
American International Group, Inc. jr. unsec. sub. FRB
8.175%, 5/15/58	856,000	1,146,612
Aon PLC company guaranty sr. unsec. unsub. notes
4.25%, 12/12/42	1,265,000	1,297,614
Australia & New Zealand Banking Group, Ltd./United
Kingdom 144A jr. unsec. sub. FRB 6.75%, perpetual maturity
(United Kingdom)	200,000	220,500
Aviation Capital Group, LLC 144A sr. unsec. unsub. notes
7.125%, 10/15/20	265,000	278,815
AXA SA 144A jr. unsec. sub. FRN 6.379%, perpetual
maturity (France)	135,000	155,588
Banco Santander SA unsec. sub. notes 5.179%, 11/19/25 (Spain)	1,200,000	1,306,177
Bank of America Corp. jr. unsec. sub. bonds Ser. JJ, 5.125%,
perpetual maturity	1,135,000	1,147,826

34 George Putnam Balanced Fund


	Principal
CORPORATE BONDS AND NOTES (14.1%)* cont.	amount	Value
Financials cont.
Bank of America Corp. jr. unsec. sub. FRN Ser. AA, 6.10%,
perpetual maturity	$314,000	$343,045
Bank of America Corp. unsec. sub. FRN (BBA LIBOR USD 3 Month
+ 0.76%), 3.17%, 9/15/26	275,000	261,365
Bank of America Corp. unsec. sub. notes 6.11%, 1/29/37	600,000	766,918
Bank of Montreal unsec. sub. FRN 3.803%, 12/15/32 (Canada)	390,000	397,192
BB&T Corp. jr. unsec. sub. FRB 4.80%, 12/31/99	580,000	574,780
Berkshire Hathaway Finance Corp. company guaranty sr. unsec.
notes 4.30%, 5/15/43	808,000	920,120
BGC Partners, Inc. sr. unsec. notes 5.125%, 5/27/21	155,000	158,610
BPCE SA 144A unsec. sub. notes 5.15%, 7/21/24 (France)	810,000	875,250
BPCE SA 144A unsec. sub. notes 4.50%, 3/15/25 (France)	1,060,000	1,114,518
Camden Property Trust sr. unsec. unsub. notes 4.875%, 6/15/23 ^R	1,213,000	1,310,899
Cantor Fitzgerald LP 144A unsec. notes 6.50%, 6/17/22	824,000	884,050
Capital One Bank USA NA unsec. sub. notes 3.375%, 2/15/23	462,000	471,845
Capital One Financial Corp. unsec. sub. notes 4.20%, 10/29/25	227,000	238,569
CBRE Services, Inc. company guaranty sr. unsec. notes
5.25%, 3/15/25	197,000	218,029
CBRE Services, Inc. company guaranty sr. unsec. unsub. notes
4.875%, 3/1/26	545,000	597,402
CIT Group, Inc. sr. unsec. unsub. notes 5.25%, 3/7/25	1,894,000	2,076,298
Citigroup, Inc. sr. unsec. FRB 3.668%, 7/24/28	10,000	10,410
Citigroup, Inc. unsec. sub. bonds 4.75%, 5/18/46	1,540,000	1,748,441
Citigroup, Inc. unsec. sub. bonds 4.45%, 9/29/27	1,354,000	1,459,834
CNO Financial Group, Inc. sr. unsec. unsub. notes 5.25%, 5/30/25	241,000	259,678
Cooperatieve Centrale Raiffeisen-Boerenleenbank BA/
Netherlands company guaranty unsec. sub. notes 4.625%,
12/1/23 (Netherlands)	250,000	266,947
Cooperative Rabobank UA company guaranty unsec. sub. notes
3.75%, 7/21/26 (Netherlands)	285,000	292,354
Credit Agricole SA 144A unsec. sub. FRN 4.00%, 1/10/33 (France)	340,000	343,850
Credit Suisse Group AG 144A sr. unsec. bonds 3.869%,
1/12/29 (Switzerland)	443,000	457,668
Credit Suisse Group AG 144A unsec. sub. notes 6.50%,
8/8/23 (Switzerland)	729,000	804,954
Digital Realty Trust LP company guaranty sr. unsec. bonds
4.45%, 7/15/28 ^R	1,395,000	1,516,615
Fairfax Financial Holdings, Ltd. sr. unsec. notes 4.85%,
4/17/28 (Canada)	1,225,000	1,305,651
Fairfax US, Inc. 144A company guaranty sr. unsec. notes
4.875%, 8/13/24	330,000	348,805
Fifth Third Bancorp jr. unsec. sub. FRB 5.10%, perpetual maturity	217,000	215,038
Five Corners Funding Trust 144A sr. unsec. bonds 4.419%, 11/15/23	425,000	452,977
Goldman Sachs Group, Inc. (The) sr. unsec. FRB 4.223%, 5/1/29	1,459,000	1,571,440
Goldman Sachs Group, Inc. (The) sr. unsec. unsub. notes
3.85%, 1/26/27	1,477,000	1,549,645
Goldman Sachs Group, Inc. (The) unsec. sub. notes 6.75%, 10/1/37	282,000	372,771
Hartford Financial Services Group, Inc. (The) sr. unsec. unsub.
notes 6.625%, 3/30/40	1,495,000	1,989,844
Hospitality Properties Trust sr. unsec. notes 4.375%, 2/15/30 ^R	243,000	232,573

George Putnam Balanced Fund 35


	Principal
CORPORATE BONDS AND NOTES (14.1%)* cont.	amount	Value
Financials cont.
HSBC Bank USA NA/New York NY unsec. sub. notes Ser. BKNT,
5.625%, 8/15/35 (United Kingdom)	$250,000	$302,415
HSBC USA, Inc. sr. unsec. unsub. notes 3.50%, 6/23/24	105,000	109,760
ING Bank NV 144A unsec. sub. notes 5.80%, 9/25/23 (Netherlands)	2,225,000	2,448,332
JPMorgan Chase & Co. jr. unsec. bonds 6.10%, perpetual maturity	195,000	208,163
JPMorgan Chase & Co. jr. unsec. sub. FRB Ser. Z, 5.30%,
perpetual maturity	918,000	927,180
JPMorgan Chase & Co. sr. unsec. unsub. FRB 3.964%, 11/15/48	3,710,000	3,974,120
KKR Group Finance Co. VI, LLC 144A company guaranty sr. unsec.
bonds 3.75%, 7/1/29	105,000	108,226
Lloyds Banking Group PLC unsec. sub. notes 4.65%, 3/24/26
(United Kingdom)	315,000	327,477
Lloyds Banking Group PLC unsec. sub. notes 4.50%, 11/4/24
(United Kingdom)	530,000	550,840
Marsh & McLennan Cos., Inc. sr. unsec. sub. notes 4.375%, 3/15/29	672,000	747,770
Massachusetts Mutual Life Insurance Co. 144A unsec. sub. notes
8.875%, 6/1/39	904,000	1,495,806
MetLife Capital Trust IV 144A jr. unsec. sub. notes 7.875%, 12/15/37	2,564,000	3,290,304
Prudential Financial, Inc. jr. unsec. sub. FRN 5.625%, 6/15/43	158,000	169,060
Prudential Financial, Inc. jr. unsec. sub. FRN 5.20%, 3/15/44	1,485,000	1,546,256
Royal Bank of Canada unsec. sub. notes Ser. GMTN, 4.65%,
1/27/26 (Canada)	322,000	351,467
Royal Bank of Scotland Group PLC sr. unsec. unsub. FRB 4.892%,
5/18/29 (United Kingdom)	700,000	744,819
Royal Bank of Scotland Group PLC sr. unsec. unsub. notes 3.875%,
9/12/23 (United Kingdom)	200,000	203,660
Santander UK PLC 144A unsec. sub. notes 5.00%, 11/7/23
(United Kingdom)	430,000	451,574
Sumitomo Mitsui Financial Group, Inc. 144A unsec. sub. bonds
4.436%, 4/2/24 (Japan)	412,000	434,714
Teachers Insurance & Annuity Association of America 144A unsec.
sub. notes 6.85%, 12/16/39	263,000	375,221
Toronto-Dominion Bank (The) unsec. sub. FRB 3.625%,
9/15/31 (Canada)	759,000	770,796
U.S. Bancorp unsec. sub. notes 3.00%, 7/30/29	2,955,000	2,974,538
UBS AG unsec. sub. notes 5.125%, 5/15/24 (Switzerland)	2,640,000	2,798,453
Wells Fargo & Co. jr. unsec. sub. FRB Ser. U, 5.875%,
perpetual maturity	580,000	635,100
Westpac Banking Corp. unsec. sub. bonds 4.421%,
7/24/39 (Australia)	670,000	698,542
Willis Towers Watson PLC company guaranty sr. unsec. unsub.
notes 5.75%, 3/15/21	710,000	744,755
		61,212,104
Health care (1.2%)
Allergan Funding SCS company guaranty sr. unsec. notes 3.45%,
3/15/22 (Luxembourg)	186,000	189,477
Amgen, Inc. sr. unsec. bonds 4.663%, 6/15/51	710,000	784,357
Amgen, Inc. sr. unsec. unsub. notes 2.60%, 8/19/26	273,000	269,505
Becton Dickinson and Co. sr. unsec. unsub. bonds 3.70%, 6/6/27	491,000	514,120
Bristol-Myers Squibb Co. 144A sr. unsec. bonds 3.40%, 7/26/29	2,325,000	2,430,122
Cigna Corp. 144A sr. unsub. notes 3.75%, 7/15/23	2,793,000	2,900,882

36 George Putnam Balanced Fund


	Principal
CORPORATE BONDS AND NOTES (14.1%)* cont.	amount	Value
Health care cont.
CVS Health Corp. sr. unsec. unsub. notes 3.70%, 3/9/23	$715,000	$737,703
Elanco Animal Health, Inc. sr. unsec. notes Ser. WI, 4.90%, 8/28/28	1,595,000	1,766,890
HCA, Inc. company guaranty sr. bonds 5.25%, 6/15/26	143,000	158,679
HCA, Inc. company guaranty sr. notes 4.125%, 6/15/29	505,000	517,307
HCA, Inc. company guaranty sr. sub. bonds 5.50%, 6/15/47	270,000	291,722
HCA, Inc. company guaranty sr. sub. notes 5.00%, 3/15/24	475,000	515,270
Quest Diagnostics, Inc. company guaranty sr. unsec. notes
4.75%, 1/30/20	121,000	122,290
Service Corp. International sr. unsec. notes 4.625%, 12/15/27	185,000	189,625
Shire Acquisitions Investments Ireland DAC company guaranty sr.
unsec. unsub. notes 3.20%, 9/23/26 (Ireland)	823,000	834,650
Shire Acquisitions Investments Ireland DAC company guaranty sr.
unsec. unsub. notes 2.875%, 9/23/23 (Ireland)	503,000	508,274
UnitedHealth Group, Inc. sr. unsec. unsub. notes 3.85%, 6/15/28	1,417,000	1,537,286
Zoetis, Inc. sr. unsec. notes 3.90%, 8/20/28	728,000	780,609
		15,048,768
Miscellaneous (0.1%)
CVS Pass-Through Trust 144A sr. mtge. notes 4.704%, 1/10/36	586,002	623,905
		623,905
Technology (1.2%)
Alphabet, Inc. sr. unsec. notes 1.998%, 8/15/26	748,000	731,132
Apple, Inc. sr. unsec. notes 3.45%, 5/6/24	245,000	257,930
Apple, Inc. sr. unsec. unsub. notes 4.375%, 5/13/45	342,000	392,774
Apple, Inc. sr. unsec. unsub. notes 3.85%, 5/4/43	486,000	519,132
Broadcom Corp./Broadcom Cayman Finance, Ltd. company
guaranty sr. unsec. unsub. notes 3.875%, 1/15/27	1,527,000	1,493,707
Diamond 1 Finance Corp./Diamond 2 Finance Corp. 144A
company guaranty sr. notes 6.02%, 6/15/26	1,356,000	1,499,252
Diamond 1 Finance Corp./Diamond 2 Finance Corp. 144A sr. bonds
8.35%, 7/15/46	271,000	345,526
Fidelity National Information Services, Inc. sr. unsec. notes
3.75%, 5/21/29	1,001,000	1,060,222
Fidelity National Information Services, Inc. sr. unsec. notes
3.00%, 8/15/26	62,000	62,883
Fidelity National Information Services, Inc. sr. unsec. sub. notes
Ser. 10Y, 4.25%, 5/15/28	487,000	533,642
Fiserv, Inc. sr. unsec. bonds 3.50%, 7/1/29	540,000	552,431
Fiserv, Inc. sr. unsec. sub. bonds 4.20%, 10/1/28	1,295,000	1,414,021
Legrand France SA sr. unsec. unsub. notes 8.50%, 2/15/25 (France)	488,000	630,267
Microchip Technology, Inc. company guaranty sr. notes
4.333%, 6/1/23	1,195,000	1,243,313
Microsoft Corp. sr. unsec. unsub. notes 3.70%, 8/8/46	1,150,000	1,246,530
Oracle Corp. sr. unsec. unsub. notes 2.65%, 7/15/26	531,000	533,077
Salesforce.com, Inc. sr. unsec. unsub. notes 3.70%, 4/11/28	1,900,000	2,056,090
VMware, Inc. sr. unsec. notes 3.90%, 8/21/27	374,000	379,745
Western Digital Corp. company guaranty sr. unsec. notes
4.75%, 2/15/26	1,185,000	1,171,669
		16,123,343

George Putnam Balanced Fund 37


	Principal
CORPORATE BONDS AND NOTES (14.1%)* cont.	amount	Value
Transportation (—%)
Penske Truck Leasing Co. LP/PTL Finance Corp. 144A sr. unsec.
bonds 3.40%, 11/15/26	$595,000	$602,133
		602,133
Utilities and power (1.0%)
AES Corp./Virginia (The) sr. unsec. unsub. notes 5.125%, 9/1/27	392,000	414,971
American Electric Power Co., Inc. sr. unsec. unsub. notes Ser. J,
4.30%, 12/1/28	528,000	582,478
Appalachian Power Co. sr. unsec. unsub. notes Ser. L,
5.80%, 10/1/35	560,000	681,639
Commonwealth Edison Co. sr. mtge. bonds 5.875%, 2/1/33	610,000	784,502
Consolidated Edison Co. of New York, Inc. sr. unsec. unsub. notes
4.20%, 3/15/42	255,000	278,191
Duke Energy Carolinas, LLC sr. mtge. notes 4.25%, 12/15/41	520,000	579,589
Duke Energy Ohio, Inc. sr. bonds 3.65%, 2/1/29	280,000	301,176
El Paso Natural Gas Co., LLC company guaranty sr. unsec. unsub.
notes 8.375%, 6/15/32	490,000	671,516
Enbridge, Inc. sr. unsec. unsub. bonds 4.25%, 12/1/26 (Canada)	416,000	452,749
Enterprise Products Operating, LLC company guaranty sr. unsec.
unsub. bonds 4.25%, 2/15/48	560,000	576,454
FirstEnergy Corp. sr. unsec. unsub. bonds Ser. B, 3.90%, 7/15/27	67,000	70,811
FirstEnergy Corp. sr. unsec. unsub. bonds Ser. C, 4.85%, 7/15/47	159,000	182,903
FirstEnergy Transmission, LLC 144A sr. unsec. unsub. notes
5.45%, 7/15/44	1,120,000	1,348,559
IPALCO Enterprises, Inc. sr. sub. notes 3.70%, 9/1/24	340,000	349,515
Kinder Morgan Energy Partners LP company guaranty sr. unsec.
notes 5.40%, 9/1/44	199,000	220,544
Kinder Morgan, Inc. company guaranty sr. unsec. unsub. notes
3.15%, 1/15/23	720,000	731,976
NRG Energy, Inc. 144A company guaranty sr. bonds 4.45%, 6/15/29	1,259,000	1,298,232
NRG Energy, Inc. 144A company guaranty sr. notes 3.75%, 6/15/24	620,000	634,411
Oncor Electric Delivery Co., LLC sr. notes 5.75%, 3/15/29	445,000	553,510
PPL Capital Funding, Inc. company guaranty sr. unsec. unsub.
notes 4.20%, 6/15/22	145,000	150,889
Vistra Operations Co., LLC 144A sr. bonds 4.30%, 7/15/29	442,000	444,502
Vistra Operations Co., LLC 144A sr. notes 3.55%, 7/15/24	523,000	526,617
WEC Energy Group, Inc. jr. unsec. sub. FRN Ser. A, (BBA LIBOR USD
3 Month + 2.11%), 4.631%, 5/15/67	1,945,000	1,616,684
		13,452,418
Total corporate bonds and notes (cost $174,572,267)		$186,042,769

	Principal
MORTGAGE-BACKED SECURITIES (0.9%)*	amount	Value
Bellemeade Re, Ltd. 144A FRB Ser. 17-1, Class M1, (1 Month
US LIBOR + 1.70%), 3.966%, 10/25/27 (Bermuda)	$298,159	$300,023
Citigroup Commercial Mortgage Trust
Ser. 14-GC21, Class C, 4.78%, 5/10/47 ^W	508,000	525,856
Ser. 14-GC21, Class AS, 4.026%, 5/10/47	520,000	550,800
COMM Mortgage Trust
FRB Ser. 12-LC4, Class C, 5.538%, 12/10/44 ^W	500,000	520,838
FRB Ser. 14-CR18, Class C, 4.733%, 7/15/47 ^W	2,392,000	2,512,344

38 George Putnam Balanced Fund


	Principal
MORTGAGE-BACKED SECURITIES (0.9%)* cont.	amount	Value
COMM Mortgage Trust
Ser. 13-CR13, Class AM, 4.449%, 11/10/46 ^W	$777,000	$831,778
Ser. 12-CR1, Class AM, 3.912%, 5/15/45	1,046,000	1,076,101
Eagle RE, Ltd. 144A FRB Ser. 18-1, Class M1, (1 Month US LIBOR
+ 1.70%), 3.966%, 11/25/28	760,000	754,300
Federal Home Loan Mortgage Corporation Structured Agency
Credit Risk Debt FRN Ser. 14-HQ2, Class M2, (1 Month US LIBOR
+ 2.20%), 4.466%, 9/25/24	413,781	419,503
Federal National Mortgage Association
Connecticut Avenue Securities FRB Ser. 16-C01, Class 1M2,
(1 Month US LIBOR + 6.75%), 9.016%, 8/25/28	919,467	1,025,686
Connecticut Avenue Securities FRB Ser. 16-C02, Class 1M2,
(1 Month US LIBOR + 6.00%), 8.266%, 9/25/28	148,755	163,867
Ser. 01-79, Class BI, IO, 0.284%, 3/25/45 ^W	647,179	5,501
FIRSTPLUS Home Loan Owner Trust Ser. 97-3, Class B1, 7.79%,
11/10/23 (In default) ^†	194,241	19
Home Re, Ltd. 144A FRB Ser. 18-1, Class M1, (1 Month US LIBOR
+ 1.60%), 3.866%, 10/25/28 (Bermuda)	592,000	592,370
JPMorgan Chase Commercial Mortgage Securities Trust FRB
Ser. 12-C6, Class D, 5.147%, 5/15/45 ^W	772,000	777,033
JPMorgan Chase Commercial Mortgage Securities Trust 144A FRB
Ser. 12-C8, Class D, 4.65%, 10/15/45 ^W	404,000	411,852
Morgan Stanley Capital I Trust 144A FRB Ser. 12-C4, Class D,
5.42%, 3/15/45 ^W	1,794,000	1,787,499
TIAA Real Estate CDO, Ltd. 144A Ser. 03-1A, Class E,
8.00%, 12/28/38	2,032,334	153,043
Total mortgage-backed securities (cost $13,174,651)		$12,408,413

CONVERTIBLE PREFERRED STOCKS (0.1%)*	Shares	Value
Oportun Financial Corp. Ser. A-1, 8.00% cv. pfd. (acquired 6/23/15, cost
$1,057) (Private) ^†^{∆∆ F}	371	$842
Oportun Financial Corp. Ser. B-1, 8.00% cv. pfd. (acquired 6/23/15, cost
$20,210) (Private) ^†^{∆∆ F}	6,416	16,099
Oportun Financial Corp. Ser. C-1, 8.00% cv. pfd. (acquired 6/23/15, cost
$47,464) (Private) ^†^{∆∆ F}	9,325	37,809
Oportun Financial Corp. Ser. D-1, 8.00% cv. pfd. (acquired 6/23/15, cost
$68,847) (Private) ^†^{∆∆ F}	13,526	54,843
Oportun Financial Corp. Ser. E-1, 8.00% cv. pfd. (acquired 6/23/15, cost
$38,611) (Private) ^†^{∆∆ F}	7,033	30,757
Oportun Financial Corp. Ser. F, 8.00% cv. pfd. (acquired 6/23/15, cost
$116,544) (Private) ^†^{∆∆ F}	15,175	92,838
Oportun Financial Corp. Ser. F-1, 8.00% cv. pfd. (acquired 6/23/15, cost
$326,895) (Private) ^†^{∆∆ F}	114,700	260,401
Oportun Financial Corp. Ser. G, 8.00% cv. pfd. (acquired 6/23/15, cost
$413,355) (Private) ^†^{∆∆ F}	145,037	329,274
Oportun Financial Corp. Ser. H, 8.00% cv. pfd. (acquired 2/6/15, cost
$633,655) (Private) ^†^{∆∆ F}	222,546	504,734
Total convertible preferred stocks (cost $1,666,638)		$1,327,597

George Putnam Balanced Fund 39


	Principal
MUNICIPAL BONDS AND NOTES (0.1%)*	amount	Value
CA State G.O. Bonds, (Build America Bonds), 7.50%, 4/1/34	$215,000	$322,696
North TX, Tollway Auth. Rev. Bonds, (Build America Bonds),
6.718%, 1/1/49	350,000	546,585
OH State U. Rev. Bonds, (Build America Bonds), 4.91%, 6/1/40	275,000	342,397
Total municipal bonds and notes (cost $841,225)		$1,211,678


	Principal amount/
SHORT-TERM INVESTMENTS (3.8%)*		shares	Value
Putnam Cash Collateral Pool, LLC 2.49% ^d	Shares	3,897,725	$3,897,725
Putnam Short Term Investment Fund 2.48% ^L	Shares	46,255,634	46,255,634
State Street Institutional U.S. Government Money Market Fund,
Premier Class 2.26% ^P	Shares	250,000	250,000
U.S. Treasury Bills zero% 04/25/19 ⁱ		$131,000	130,411
Total short-term investments (cost $50,533,770)			$50,533,770

TOTAL INVESTMENTS
Total investments (cost $1,216,846,757)			$1,340,975,596

Key to holding’s abbreviations


ADR	American Depository Receipts: represents ownership of foreign securities on deposit with a
	custodian bank
BKNT	Bank Note
DAC	Designated Activity Company
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.
GMTN	Global Medium Term Notes
G.O. Bonds	General Obligation Bonds
IO	Interest Only
TBA	To Be Announced Commitments

Notes to the fund’s portfolio

Unless noted otherwise, the notes to the fund’s portfolio are for the close of the fund’s reporting period, which ran from August 1, 2018 through July 31, 2019 (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 $1,318,890,780.

^†This security is non-income-producing.

^∆∆This security is restricted with regard to public resale. The total fair value of this security and any other restricted securities (excluding 144A securities), if any, held at the close of the reporting period was $1,635,864, or 0.1% of net assets.

^dAffiliated company. See Notes 1 and x to the financial statements regarding securities lending. The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period.

^FThis security is valued by Putnam Management at fair value following procedures approved by the Trustees. Securities are classified as Level 3 for ASC 820 based on the securities’ valuation inputs. At the close of the reporting period, fair value pricing was also used for certain foreign securities in the portfolio (Note 1).

40 George Putnam Balanced Fund

ⁱThis security was pledged, or purchased with cash that was pledged, to the fund for collateral on certain derivative contracts (Note 1).

^LAffiliated 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.

^PThis security was pledged, or purchased with cash that was pledged, to the fund for collateral on certain derivative contracts. The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period.

^RReal Estate Investment Trust.

^SSecurity on loan, in part or in entirety, at the close of the reporting period (Note 1).

^WThe rate shown represents the weighted average coupon associated with the underlying mortgage pools. Rates may be subject to a cap or floor.

At the close of the reporting period, the fund maintained liquid assets totaling $33,951,543 to cover, delayed delivery securities.

Unless otherwise noted, the rates quoted in Short-term investments security descriptions represent the weighted average yield to maturity.

Debt obligations are considered secured unless otherwise indicated.

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

See Note 1 to the financial statements regarding TBA commitments.

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


FORWARD CURRENCY CONTRACTS at 7/31/19 (aggregate face value $51,959,330)
						Unrealized
		Contract	Delivery		Aggregate	appreciation/
Counterparty	Currency	type^*	date	Value	face value	(depreciation)
Bank of America N.A.
	British Pound	Sell	9/18/19	$8,871,017	$9,259,752	$388,735
Barclays Bank PLC
	British Pound	Sell	9/18/19	4,966,711	5,176,417	209,706
	Canadian Dollar	Sell	10/16/19	2,620,856	2,637,883	17,027
Citibank, N.A.
	British Pound	Sell	9/18/19	3,288,144	3,427,324	139,180
	Canadian Dollar	Sell	10/16/19	3,421,840	3,444,289	22,449
	Euro	Sell	9/18/19	3,990,874	4,053,773	62,899
Goldman Sachs International
	British Pound	Sell	9/18/19	4,700,378	4,898,616	198,238
	Canadian Dollar	Sell	10/16/19	4,345,357	4,373,902	28,545
HSBC Bank USA, National Association
	Chinese Yuan (Offshore)	Sell	8/21/19	7,882,174	8,150,913	268,739
JPMorgan Chase Bank N.A.
	Canadian Dollar	Sell	10/16/19	3,781,702	3,806,303	24,601
	Chinese Yuan (Offshore)	Sell	8/21/19	2,723,569	2,730,158	6,589
Unrealized appreciation						1,366,708
Unrealized (depreciation)						—
Total						$1,366,708

^*The exchange currency for all contracts listed is the United States Dollar.

George Putnam Balanced Fund 41


TBA SALE COMMITMENTS OUTSTANDING at 7/31/19 (proceeds receivable $9,313,750)
	Principal	Settlement
Agency	amount	date	Value
Government National Mortgage Association, 4.00%, 8/1/49	$5,000,000	8/21/19	$5,192,188
Government National Mortgage Association, 3.50%, 8/1/49	4,000,000	8/21/19	4,135,937
Total			$9,328,125

ASC 820 establishes a three-level hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of the fund’s investments. The three levels are defined as follows:

Level 1: Valuations based on quoted prices for identical securities in active markets.

Level 2: Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3: Valuations based on inputs that are unobservable and significant to the fair value measurement.

The following is a summary of the inputs used to value the fund’s net assets as of the close of the reporting period:


			Valuation inputs
Investments in securities:	Level 1	Level 2		Level 3
Common stocks^*:
Basic materials	$28,271,507	$2,940,027		$—
Capital goods	48,031,606	—		—
Communication services	20,429,104	—		—
Conglomerates	9,974,684	—		—
Consumer cyclicals	123,780,266	—		—
Consumer staples	69,719,455	—		—
Energy	22,391,948	11,172,493		—
Financials	117,453,773	11,011,034		308,267
Health care	103,066,644	—		—
Technology	193,308,639	4,269,751		—
Transportation	14,181,089	—		—
Utilities and power	30,321,735	—		—
Total common stocks	780,930,450	29,393,305		308,267

Convertible preferred stocks	—	—		1,327,597
Corporate bonds and notes	—	186,042,769		—
Mortgage-backed securities	—	12,408,413		—
Municipal bonds and notes	—	1,211,678		—
U.S. government and agency mortgage obligations	—	122,010,686		—
U.S. treasury obligations	—	156,808,661		—
Short-term investments	46,505,634	4,028,136		—
Totals by level	$827,436,084	$511,903,648		$1,635,864

			Valuation inputs
Other financial instruments:	Level 1	Level 2		Level 3
Forward currency contracts	$—	$1,366,708		$—
TBA sale commitments	—	(9,328,125)		—
Totals by level	$—	$(7,961,417)		$—

^*Common stock classifications are presented at the sector level, which may differ from the fund’s portfolio presentation.

At the start and close of the reporting period, Level 3 investments in securities represented less than 1% of the fund’s net assets and were not considered a significant portion of the fund’s portfolio.

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

42 George Putnam Balanced Fund

Statement of assets and liabilities 7/31/19


ASSETS
Investment in securities, at value, including $3,763,951 of securities on loan (Notes 1 and 8):
Unaffiliated issuers (identified cost $1,166,693,398)	$1,290,822,237
Affiliated issuers (identified cost $50,153,359) (Notes 1 and 5)	50,153,359
Foreign currency (cost $278) (Note 1)	279
Dividends, interest and other receivables	4,533,623
Receivable for shares of the fund sold	6,737,794
Receivable for investments sold	2,519,577
Receivable for sales of delayed delivery securities (Note 1)	8,615,010
Receivable for sales of TBA securities (Note 1)	9,332,639
Unrealized appreciation on forward currency contracts (Note 1)	1,366,708
Prepaid assets	57,638
Total assets	1,374,138,864

LIABILITIES
Payable for investments purchased	3,943,935
Payable for purchases of TBA securities (Note 1)	32,939,640
Payable for shares of the fund repurchased	2,162,571
Payable for compensation of Manager (Note 2)	578,152
Payable for custodian fees (Note 2)	37,183
Payable for investor servicing fees (Note 2)	285,036
Payable for Trustee compensation and expenses (Note 2)	541,028
Payable for administrative services (Note 2)	4,722
Payable for distribution fees (Note 2)	327,665
TBA sale commitments, at value (proceeds receivable $9,313,750) (Note 1)	9,328,125
Collateral on securities loaned, at value (Note 1)	3,897,725
Collateral on certain derivative contracts, at value (Notes 1 and 8)	967,272
Other accrued expenses	235,030
Total liabilities	55,248,084

Net assets	$1,318,890,780

REPRESENTED BY
Paid-in capital (Unlimited shares authorized) (Notes 1 and 4)	$1,136,678,304
Total distributable earnings (Note 1)	182,212,476
Total — Representing net assets applicable to capital shares outstanding	$1,318,890,780

(Continued on next page)

George Putnam Balanced Fund 43

Statement of assets and liabilities cont.


COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE
Net asset value and redemption price per class A share
($1,041,440,867 divided by 50,470,497 shares)	$20.63
Offering price per class A share (100/94.25 of $20.63)^*	$21.89
Net asset value and offering price per class B share ($14,843,553 divided by 728,176 shares)^**	$20.38
Net asset value and offering price per class C share ($61,417,363 divided by 3,001,616 shares)^**	$20.46
Net asset value and redemption price per class M share
($65,487,668 divided by 3,223,112 shares)	$20.32
Offering price per class M share (100/96.50 of $20.32)^*	$21.06
Net asset value, offering price and redemption price per class R share
($998,654 divided by 48,576 shares)	$20.56
Net asset value, offering price and redemption price per class R5 share
($15,803 divided by 759 shares)	$20.82
Net asset value, offering price and redemption price per class R6 share
($29,858,837 divided by 1,440,591 shares)	$20.73
Net asset value, offering price and redemption price per class Y share
($104,828,035 divided by 5,058,912 shares)	$20.72

^*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.

44 George Putnam Balanced Fund

Statement of operations Year ended 7/31/19


INVESTMENT INCOME
Interest (including interest income of $1,199,837 from investments in affiliated issuers) (Note 5)	$15,843,127
Dividends (net of foreign tax of $61,338)	13,629,776
Securities lending (net of expenses) (Notes 1 and 5)	94,188
Total investment income	29,567,091

EXPENSES
Compensation of Manager (Note 2)	6,363,277
Investor servicing fees (Note 2)	1,927,396
Custodian fees (Note 2)	42,897
Trustee compensation and expenses (Note 2)	53,664
Distribution fees (Note 2)	3,583,903
Administrative services (Note 2)	36,463
Other	519,931
Total expenses	12,527,531
Expense reduction (Note 2)	(63,274)
Net expenses	12,464,257

Net investment income	17,102,834

REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Securities from unaffiliated issuers (Notes 1 and 3)	73,409,609
Foreign currency transactions (Note 1)	(26,049)
Forward currency contracts (Note 1)	1,168,533
Futures contracts (Note 1)	(21,518)
Written options (Note 1)	(2,632)
Total net realized gain	74,527,943
Change in net unrealized appreciation (depreciation) on:
Securities from unaffiliated issuers and TBA sale commitments	12,206,082
Assets and liabilities in foreign currencies	(458)
Forward currency contracts	1,152,982
Futures contracts	(18,717)
Total change in net unrealized appreciation	13,339,889

Net gain on investments	87,867,832

Net increase in net assets resulting from operations	$104,970,666

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

George Putnam Balanced Fund 45

Statement of changes in net assets


INCREASE IN NET ASSETS	Year ended 7/31/19	Year ended 7/31/18
Operations
Net investment income	$17,102,834	$13,802,827
Net realized gain on investments
and foreign currency transactions	74,527,943	89,364,014
Change in net unrealized appreciation of investments
and assets and liabilities in foreign currencies	13,339,889	4,665,250
Net increase in net assets resulting from operations	104,970,666	107,832,091
Distributions to shareholders (Note 1):
From ordinary income
Net investment income
Class A	(13,785,181)	(11,515,415)
Class B	(99,703)	(76,475)
Class C	(330,052)	(181,180)
Class M	(612,219)	(496,191)
Class R	(9,753)	(7,817)
Class R5	(240)	(195)
Class R6	(414,141)	(268,930)
Class Y	(1,344,408)	(1,070,994)
Net realized short-term gain on investments
Class A	(15,067,455)	—
Class B	(249,377)	—
Class C	(633,964)	—
Class M	(1,035,979)	—
Class R	(11,943)	—
Class R5	(219)	—
Class R6	(350,615)	—
Class Y	(1,197,716)	—
From net realized long-term gain on investments
Class A	(50,096,888)	—
Class B	(829,138)	—
Class C	(2,107,829)	—
Class M	(3,444,465)	—
Class R	(39,708)	—
Class R5	(730)	—
Class R6	(1,165,739)	—
Class Y	(3,982,213)	—
Increase (decrease) from capital share transactions (Note 4)	75,914,400	(59,603,484)
Total increase in net assets	84,075,391	34,611,410

NET ASSETS
Beginning of year	1,234,815,389	1,200,203,979
End of year	$1,318,890,780	$1,234,815,389

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

46 George Putnam Balanced Fund

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


	INVESTMENT OPERATIONS				LESS DISTRIBUTIONS					RATIOS AND SUPPLEMENTAL DATA
												Ratio of net
	Net asset		Net realized		From						Ratio	investment
	value,		and unrealized	Total from	net	From		Net asset	Total return	Net assets,	of expenses	income (loss)	Portfolio
	beginning	Net investment	gain (loss)	investment	investment	net realized gain	Total	value, end	at net asset	end of period	to average	to average	turnover
Period ended	of period	income (loss)^a	on investments	operations	income	on investments	distributions	of period	value (%)^b	(in thousands)	net assets (%)^c	net assets (%)	(%)^d
Class A
July 31, 2019	$20.62	.28	1.37	1.65	(.28)	(1.36)	(1.64)	$20.63	8.86	$1,041,441	.98	1.44	143
July 31, 2018	19.09	.23	1.53	1.76	(.23)	—	(.23)	20.62	9.28	1,004,781	.99	1.18	179
July 31, 2017	17.38	.23	1.69	1.92	(.21)	—	(.21)	19.09	11.14	972,570	1.01	1.29	204
July 31, 2016	17.22	.22	.14	.36	(.20)	—	(.20)	17.38	2.17	953,549	1.00^e	1.33^e	154
July 31, 2015	16.12	.19	1.10	1.29	(.19)	—	(.19)	17.22	8.04	999,928	.97	1.11	130
Class B
July 31, 2019	$20.39	.14	1.34	1.48	(.13)	(1.36)	(1.49)	$20.38	8.02	$14,844	1.73	.70	143
July 31, 2018	18.87	.08	1.52	1.60	(.08)	—	(.08)	20.39	8.49	17,258	1.74	.43	179
July 31, 2017	17.18	.10	1.67	1.77	(.08)	—	(.08)	18.87	10.33	20,188	1.76	.55	204
July 31, 2016	17.02	.10	.14	.24	(.08)	—	(.08)	17.18	1.42	21,592	1.75^e	.58^e	154
July 31, 2015	15.94	.06	1.09	1.15	(.07)	—	(.07)	17.02	7.21	24,133	1.72	.36	130
Class C
July 31, 2019	$20.47	.13	1.36	1.49	(.14)	(1.36)	(1.50)	$20.46	8.06	$61,417	1.73	.68	143
July 31, 2018	18.95	.08	1.52	1.60	(.08)	—	(.08)	20.47	8.45	40,002	1.74	.43	179
July 31, 2017	17.26	.10	1.67	1.77	(.08)	—	(.08)	18.95	10.29	45,970	1.76	.54	204
July 31, 2016	17.10	.09	.15	.24	(.08)	—	(.08)	17.26	1.45	41,700	1.75^e	.58^e	154
July 31, 2015	16.01	.06	1.10	1.16	(.07)	—	(.07)	17.10	7.26	36,720	1.72	.36	130
Class M
July 31, 2019	$20.33	.18	1.35	1.53	(.18)	(1.36)	(1.54)	$20.32	8.34	$65,488	1.48	.94	143
July 31, 2018	18.82	.13	1.52	1.65	(.14)	—	(.14)	20.33	8.77	70,239	1.49	.68	179
July 31, 2017	17.15	.14	1.66	1.80	(.13)	—	(.13)	18.82	10.53	70,919	1.51	.79	204
July 31, 2016	16.99	.14	.14	.28	(.12)	—	(.12)	17.15	1.69	66,779	1.50^e	.83^e	154
July 31, 2015	15.90	.10	1.10	1.20	(.11)	—	(.11)	16.99	7.56	75,297	1.47	.61	130
Class R
July 31, 2019	$20.56	.23	1.36	1.59	(.23)	(1.36)	(1.59)	$20.56	8.58	$999	1.23	1.19	143
July 31, 2018	19.03	.18	1.53	1.71	(.18)	—	(.18)	20.56	9.02	838	1.24	.93	179
July 31, 2017	17.33	.18	1.70	1.88	(.18)	—	(.18)	19.03	10.90	1,090	1.26	.99	204
July 31, 2016	17.16	.19	.13	.32	(.15)	—	(.15)	17.33	1.93	409	1.25^e	1.13^e	154
July 31, 2015	16.07	.15	1.09	1.24	(.15)	—	(.15)	17.16	7.74	1,102	1.22	.86	130
Class R5
July 31, 2019	$20.79	.32	1.40	1.72	(.33)	(1.36)	(1.69)	$20.82	9.17	$16	.72	1.56	143
July 31, 2018	19.24	.27^f	1.56	1.83	(.28)	—	(.28)	20.79	9.60	14	.73	1.30^f	179
July 31, 2017	17.45	.30^f	1.69	1.99	(.20)	—	(.20)	19.24	11.46	13	.74	1.71^f	204
July 31, 2016	17.28	.26	.16	.42	(.25)	—	(.25)	17.45	2.49	76,674	.73^e	1.59^e	154
July 31, 2015	16.18	.23	1.11	1.34	(.24)	—	(.24)	17.28	8.28	71,647	.72	1.34	130

See notes to financial highlights at the end of this section.

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


48 George Putnam Balanced Fund	George Putnam Balanced Fund 49

Financial highlights cont.

INVESTMENT OPERATIONS

LESS DISTRIBUTIONS

RATIOS AND SUPPLEMENTAL DATA

Ratio of net

Net asset

Net realized

From

Ratio

investment

value,

and unrealized

Total from

net

From

Net asset

Total return

Net assets,

of expenses

income (loss)

Portfolio

beginning

Net investment

gain (loss)

investment

investment

net realized gain

Total

value, end

at net asset

end of period

to average

turnover

Period ended

of period

income (loss)^a

on investments

operations

income

on investments

distributions

of period

value (%)^b

(in thousands)

net assets (%)^c

net assets (%)

(%)^d

Class R6

July 31, 2019

$20.71

.36

1.37

1.73

(.35)

(1.36)

(1.71)

$20.73

9.27

$29,859

.62

1.80

143

July 31, 2018

19.17

.31

1.53

1.84

(.30)

—

(.30)

20.71

9.69

19,694

.63

1.54

179

July 31, 2017

17.45

.30

1.70

2.00

(.28)

—

(.28)

19.17

11.57

11,738

.64

1.64

204

July 31, 2016

17.28

.28

.15

.43

(.26)

—

(.26)

17.45

2.58

8,013

.63^e

1.71^e

154

July 31, 2015

16.18

.25

1.10

1.35

(.25)

—

(.25)

17.28

8.39

8,239

.62

1.46

130

Class Y

July 31, 2019

$20.70

.33

1.38

1.71

(.33)

(1.36)

(1.69)

$20.72

9.15

$104,828

.73

1.68

143

July 31, 2018

19.16

.28

1.54

1.82

(.28)

—

(.28)

20.70

9.56

81,989

.74

1.43

179

July 31, 2017

17.45

.28

1.69

1.97

(.26)

—

(.26)

19.16

11.37

77,716

.76

1.54

204

July 31, 2016

17.28

.26

.15

.41

(.24)

—

(.24)

17.45

2.48

58,289

.75^e

1.60^e

154

July 31, 2015

16.17

.23

1.11

1.34

(.23)

—

(.23)

17.28

8.34

114,920

.72

1.36

130

^aPer share net investment income (loss) has been determined on the basis of the weighted average number of shares outstanding during the period.

^bTotal return assumes dividend reinvestment and does not reflect the effect of sales charges.

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

^dPortfolio turnover includes TBA purchase and sales transactions.

^eReflects a voluntary waiver of certain fund expenses in effect during the period. As a result of such waivers, the expenses of each class reflect a reduction of less than .01% as a percentage of average net assets per share for each class (Note 2).

^fThe net investment income ratio and per share amount shown for the period ended may not correspond with the expected class specific differences for the period due to the timing of redemptions out of the class.

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


50 George Putnam Balanced Fund	George Putnam Balanced Fund 51

Notes to financial statements 7/31/19

Within the following Notes to financial statements, references to “State Street” represent State Street Bank and Trust Company, references to “the SEC” represent the Securities and Exchange Commission, references to “Putnam Management” represent Putnam Investment Management, LLC, the fund’s manager, an indirect wholly-owned subsidiary of Putnam Investments, LLC and references to “OTC”, if any, represent over-the-counter. Unless otherwise noted, the “reporting period” represents the period from August 1, 2018 through July 31, 2019.

George Putnam Balanced Fund (the fund) is a Massachusetts business trust, which is registered under the Investment Company Act of 1940, as amended, as a diversified open-end management investment company. The goal of the fund is to seek to provide a balanced investment composed of a well-diversified portfolio of stocks and bonds which produce both capital growth and current income. The fund invests mainly in a combination of bonds and common stocks (growth or value stocks or both) of large U.S. companies, with a greater focus on common stocks. For example, Putnam Management may purchase stocks of companies with stock prices that reflect a value lower than that which Putnam Management places on the company. Putnam Management may also consider other factors that Putnam Management believes will cause the stock price to rise. The fund buys bonds of governments and private companies that are mostly investment-grade in quality with intermediate- to long-term maturities (three years or longer). Putnam Management may consider, among other factors, a company’s valuation, financial strength, growth potential, competitive position in its industry, projected future earnings, cash flows and dividends when deciding whether to buy or sell equity investments, and, among other factors, credit, interest rate and prepayment risks, as well as general market conditions, when deciding whether to buy or sell fixed-income investments. The fund may also use derivatives, such as futures, options, warrants and swap contracts, for both hedging and non-hedging purposes.

The fund offers class A, class B, class C, class M, class R, class R5, class R6 and class Y shares. 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. Class A and class M shares are sold with a maximum front-end sales charge of 5.75% and 3.50%, respectively. Class A shares generally are not subject to a contingent deferred sales charge, and class M, class R, class R5, class R6 and class Y shares are not subject to a contingent deferred sales charge. Class B shares, which convert to class A shares after approximately eight years, are not subject to a front-end sales charge and are subject to a contingent deferred sales charge if those shares are redeemed within six years of purchase. Class C shares are subject to a one-year 1.00% contingent deferred sales charge and generally convert to class A shares after approximately ten years. Class R shares, which are not available to all investors, are sold at net asset value. The expenses for class A, class B, class C, class M and class R shares may differ based on the distribution fee of each class, which is identified in Note 2. Class R5, class R6 and class Y shares, which are sold at net asset value, are generally subject to the same expenses as class A, class B, class C, class M and class R shares, but do not bear a distribution fee, and in the case of class R5 and class R6 shares, bear a lower investor servicing fee, which is identified in Note 2. Class R5, class R6 and class Y shares are 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 reported amounts of increases and decreases in net assets from operations. Actual results could differ from those

52 George Putnam Balanced Fund

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.

Investments for which market quotations are readily available are valued at the last reported sales price on their principal exchange, or official closing price for certain markets, and are classified as Level 1 securities under Accounting Standards Codification 820 Fair Value Measurements and Disclosures (ASC 820). If no sales are reported, as in the case of some securities that are traded OTC, a security is valued at its last reported bid price and is generally categorized as a Level 2 security.

Investments in open-end investment companies (excluding exchange-traded funds), if any, which can be classified as Level 1 or Level 2 securities, are valued based on their net asset value. The net asset value of such investment companies equals the total value of their assets less their liabilities and divided by the number of their outstanding shares.

Market quotations are not considered to be readily available for certain debt obligations (including short-term investments with remaining maturities of 60 days or less) and other investments; such investments are valued on the basis of valuations furnished by an independent pricing service approved by the Trustees or dealers selected by Putnam Management. Such services or dealers determine valuations for normal institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships, generally recognized by institutional traders, between securities (which consider such factors as security prices, yields, maturities and ratings). These securities will generally be categorized as Level 2.

Many securities markets and exchanges outside the U.S. close prior to the scheduled close of the New York Stock Exchange and therefore the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but before the scheduled close of the New York Stock Exchange. Accordingly, on certain days, the fund will fair value certain foreign equity securities taking into account multiple factors including movements in the U.S. securities markets, currency valuations and comparisons to the valuation of American Depository Receipts, exchange-traded funds and futures contracts. The foreign equity securities, which would generally be classified as Level 1 securities, will be transferred to Level 2 of the fair value hierarchy when they are valued at fair value. The number of days on which fair value prices will be used will depend on market activity and it is possible that fair value prices will be used by the fund to a significant extent. At the close of the reporting period, fair value pricing was used for certain foreign securities in the portfolio. Securities quoted in foreign currencies, if any, are translated into U.S. dollars at the current exchange rate.

To the extent a pricing service or dealer is unable to value a security or provides a valuation that Putnam Management does not believe accurately reflects the security’s fair value, the security will be valued at fair value by Putnam Management in accordance with policies and procedures approved by the Trustees. Certain investments, including certain restricted and illiquid securities and derivatives, are also valued at fair value following procedures approved by the Trustees. These valuations consider such factors as significant market or specific security events such as interest rate or credit quality changes, various relationships with other securities, discount rates, U.S. Treasury, U.S. swap and credit yields, index levels, convexity exposures, recovery rates, sales and other multiples and resale restrictions. These securities are classified as Level 2 or as Level 3 depending on the priority of the significant inputs.

To assess the continuing appropriateness of fair valuations, the Valuation Committee reviews and affirms the reasonableness of such valuations on a regular basis after considering all relevant information that is reasonably available. Such valuations and procedures are reviewed periodically by the Trustees. Certain securities may be valued on the basis of a price provided by a single source. The fair value of securities is generally determined as

George Putnam Balanced Fund 53

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 and including amortization and accretion of premiums and discounts on debt securities, is recorded on the accrual basis. Dividend income, net of any applicable withholding taxes, is recognized on the ex-dividend date except that certain dividends from foreign securities, if any, are recognized as soon as the fund is informed of the ex-dividend date. Non-cash dividends, if any, are recorded at the fair value of the securities received. Dividends representing a return of capital or capital gains, if any, are reflected as a reduction of cost and/or as a realized gain.

Securities purchased or sold on a delayed delivery 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.

Stripped securities The fund may invest in stripped securities which represent a participation in securities that may be structured in classes with rights to receive different portions of the interest and principal. Interest-only securities receive all of the interest and principal-only securities receive all of the principal. If the interest-only securities experience greater than anticipated prepayments of principal, the fund may fail to recoup fully its initial investment in these securities. Conversely, principal-only securities increase in value if prepayments are greater than anticipated and decline if prepayments are slower than anticipated. The fair value of these securities is highly sensitive to changes in interest rates.

Foreign currency translation The accounting records of the fund are maintained in U.S. dollars. The fair value of foreign securities, currency holdings, and other assets and liabilities is recorded in the books and records of the fund after translation to U.S. dollars based on the exchange rates on that day. The cost of each security is determined using historical exchange rates. Income and withholding taxes are translated at prevailing exchange rates when earned or incurred. The fund does not isolate that portion of realized or unrealized gains or losses resulting from changes in the foreign exchange rate on investments from fluctuations arising from changes in the market prices of the securities. Such gains and losses are included with the net realized and unrealized gain or loss on investments. Net realized gains and losses on foreign currency transactions represent net realized exchange gains or losses on disposition of foreign currencies, currency gains and losses realized between the trade and settlement dates on securities transactions and the difference between the amount of investment income and foreign withholding taxes recorded on the fund’s books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized appreciation and depreciation of assets and liabilities in foreign currencies arise from changes in the value of assets and liabilities other than investments at the period end, resulting from changes in the exchange rate.

Options contracts The fund uses options contracts to hedge against changes in values of securities it owns, owned or expects to own.

The potential risk to the fund is that the change in value of options contracts may not correspond to the change in value of the hedged instruments. In addition, losses may arise from changes in the value of the underlying instruments if there is an illiquid secondary market for the contracts, if interest or exchange rates move unexpectedly or if the counterparty to the contract is unable to perform. Realized gains and losses on purchased options are included in realized gains and losses on investment securities. If a written call option is exercised, the premium originally received is recorded as an addition to sales proceeds. If a written put option is exercised, the premium originally received is recorded as a reduction to the cost of investments.

Exchange-traded options are valued at the last sale price or, if no sales are reported, the last bid price for purchased options and the last ask price for written options. OTC traded options are valued using prices supplied by dealers.

Options on swaps are similar to options on securities except that the premium paid or received is to buy or grant the right to enter into a previously agreed upon interest rate or credit default contract. Forward premium swap option contracts include premiums that have extended settlement dates. The delayed settlement of the premiums is factored into the daily valuation of the option contracts. In the case of interest rate cap and floor contracts, in return for a premium, ongoing payments between two parties are based on interest rates exceeding a specified rate, in the case of a cap contract, or falling below a specified rate in the case of a floor contract.

54 George Putnam Balanced Fund

Written option contracts outstanding at period end, if any, are listed after the fund’s portfolio.

Futures contracts The fund uses futures contracts to equitize cash.

The potential risk to the fund is that the change in value of futures contracts may not correspond to the change in value of the hedged instruments. In addition, losses may arise from changes in the value of the underlying instruments, if there is an illiquid secondary market for the contracts, if interest or exchange rates move unexpectedly or if the counterparty to the contract is unable to perform. With futures, there is minimal counterparty credit risk to the fund since futures are exchange traded and the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Risks may exceed amounts recognized on the Statement of assets and liabilities. When the contract is closed, the fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.

Futures contracts are valued at the quoted daily settlement prices established by the exchange on which they trade. The fund and the broker agree to exchange an amount of cash equal to the daily fluctuation in the value of the futures contract. Such receipts or payments are known as “variation margin.” Futures contracts outstanding at period end, if any, are listed after the fund’s portfolio.

Forward currency contracts The fund buys and sells forward currency contracts, which are agreements between two parties to buy and sell currencies at a set price on a future date. These contracts are used to hedge foreign exchange risk.

The U.S. dollar value of forward currency contracts is determined using current forward currency exchange rates supplied by a quotation service. The fair value of the contract will fluctuate with changes in currency exchange rates. The contract is marked to market daily and the change in fair value is recorded as an unrealized gain or loss. The fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed when the contract matures or by delivery of the currency. The fund could be exposed to risk if the value of the currency changes unfavorably, if the counterparties to the contracts are unable to meet the terms of their contracts or if the fund is unable to enter into a closing position. Risks may exceed amounts recognized on the Statement of assets and liabilities.

Forward currency contracts outstanding at period end, if any, are listed after the fund’s portfolio.

TBA commitments The fund may enter into TBA (to be announced) commitments to purchase securities for a fixed unit price at a future date beyond customary settlement time. Although the unit price and par amount have been established, the actual securities have not been specified. However, it is anticipated that the amount of the commitments will not significantly differ from the principal amount. The fund holds, and maintains until settlement date, cash or high-grade debt obligations in an amount sufficient to meet the purchase price, or the fund may enter into offsetting contracts for the forward sale of other securities it owns. Income on the securities will not be earned until settlement date.

The fund may also enter into TBA sale commitments to hedge its portfolio positions, to sell mortgage-backed securities it owns under delayed delivery arrangements or to take a short position in mortgage-backed securities. Proceeds of TBA sale commitments are not received until the contractual settlement date. During the time a TBA sale commitment is outstanding, either equivalent deliverable securities or an offsetting TBA purchase commitment deliverable on or before the sale commitment date are held as “cover” for the transaction, or other liquid assets in an amount equal to the notional value of the TBA sale commitment are segregated. If the TBA sale commitment is closed through the acquisition of an offsetting TBA purchase commitment, the fund realizes a gain or loss. If the fund delivers securities under the commitment, the fund realizes a gain or a loss from the sale of the securities based upon the unit price established at the date the commitment was entered into.

TBA commitments, which are accounted for as purchase and sale transactions, may be considered securities themselves, and involve a risk of loss due to changes in the value of the security prior to the settlement date as well as the risk that the counterparty to the transaction will not perform its obligations. Counterparty risk is mitigated by having a master agreement between the fund and the counterparty.

Unsettled TBA commitments are valued at their fair value according to the procedures described under “Security valuation” above. The contract is marked to market daily and the change in fair value is recorded by the fund as an unrealized gain or loss. Based on market circumstances, Putnam Management will determine whether to take delivery of the underlying securities or to dispose of the TBA commitments prior to settlement.

TBA purchase commitments outstanding at period end, if any, are listed within the fund’s portfolio and TBA sale commitments outstanding at period end, if any, are listed after the fund’s portfolio.

George Putnam Balanced Fund 55

Master agreements The fund is a party to ISDA (International Swaps and Derivatives Association, Inc.) Master Agreements that govern OTC derivative and foreign exchange contracts and Master Securities Forward Transaction Agreements that govern transactions involving mortgage-backed and other asset-backed securities that may result in delayed delivery (Master Agreements) with certain counterparties entered into from time to time. The Master Agreements may contain provisions regarding, among other things, the parties’ general obligations, representations, agreements, collateral requirements, events of default and early termination. With respect to certain counterparties, in accordance with the terms of the Master Agreements, collateral posted to the fund is held in a segregated account by the fund’s custodian and, with respect to those amounts which can be sold or repledged, are presented in the fund’s portfolio.

Collateral pledged by the fund is segregated by the fund’s custodian and identified in the fund’s portfolio. Collateral can be in the form of cash or debt securities issued by the U.S. Government or related agencies or other securities as agreed to by the fund and the applicable counterparty. Collateral requirements are determined based on the fund’s net position with each counterparty.

With respect to ISDA Master Agreements, termination events applicable to the fund may occur upon a decline in the fund’s net assets below a specified threshold over a certain period of time. Termination events applicable to counterparties may occur upon a decline in the counterparty’s long-term or short-term credit ratings below a specified level. In each case, upon occurrence, the other party may elect to terminate early and cause settlement of all derivative and foreign exchange contracts outstanding, including the payment of any losses and costs resulting from such early termination, as reasonably determined by the terminating party. Any decision by one or more of the fund’s counterparties to elect early termination could impact the fund’s future derivative activity.

At the close of the reporting period, the fund did not have a net liability position on open derivative contracts subject to the Master Agreements.

Securities lending The fund may lend securities, through its agent, to qualified borrowers in order to earn additional income. The loans are collateralized by cash in an amount at least equal to the fair value of the securities loaned. The fair value of securities loaned is determined daily and any additional required collateral is allocated to the fund on the next business day. The remaining maturities of the securities lending transactions are considered overnight and continuous. The risk of borrower default will be borne by the fund’s agent; the fund will bear the risk of loss with respect to the investment of the cash collateral. Income from securities lending, net of expenses, is included in investment income on the Statement of operations. Cash collateral is invested in Putnam Cash Collateral Pool, LLC, a limited liability company managed by an affiliate of Putnam Management. Investments in Putnam Cash Collateral Pool, LLC are valued at its closing net asset value each business day. There are no management fees charged to Putnam Cash Collateral Pool, LLC. At the close of the reporting period, the fund received cash collateral of $3,897,725 and the value of securities loaned amounted to $3,763,951.

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 $317.5 million 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 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 LIBOR for the committed line of credit and the Federal Funds rate plus 1.30% 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 taxable income within the prescribed time period and otherwise comply with the provisions of the Internal Revenue Code of 1986, as amended (the Code), applicable to regulated investment companies. It is also the intention of the fund to distribute an amount sufficient to avoid imposition of any excise tax under Section 4982 of the Code.

56 George Putnam Balanced Fund

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.

The fund may also be subject to taxes imposed by governments of countries in which it invests. Such taxes are generally based on either income or gains earned or repatriated. The fund accrues and applies such taxes to net investment income, net realized gains and net unrealized gains as income and/or capital gains are earned. In some cases, the fund may be entitled to reclaim all or a portion of such taxes, and such reclaim amounts, if any, are reflected as an asset on the fund’s books. In many cases, however, the fund may not receive such amounts for an extended period of time, depending on the country of investment.

Distributions to shareholders Distributions to shareholders from net investment income are recorded by the fund on the ex-dividend date. 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. These differences include temporary and/or permanent differences from losses on wash sale transactions, from foreign currency gains and losses, from realized gains and losses on passive foreign investment companies, from interest-only securities, from partnership income, and from capital gain distribution designated to the prior year. Reclassifications are made to the fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryovers) under income tax regulations. At the close of the reporting period, the fund reclassified $742,019 to increase undistributed net investment income, $49,815,540 to decrease paid-in capital and $49,073,521 to increase accumulated net realized gain.

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	$147,390,306
Unrealized depreciation	$(26,131,873)
Net unrealized appreciation	$121,258,433
Undistributed ordinary income	$17,872,424
Undistributed short-term gain	$1,853,880
Undistributed long-term gain	$41,227,992
Cost for federal income tax purposes	$1,211,755,746

For the fiscal year ended July 31, 2018, the fund had undistributed net investment income of $15,256,559.

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:


0.680%	of the first $5 billion,	0.480%	of the next $50 billion,
0.630%	of the next $5 billion,	0.460%	of the next $50 billion,
0.580%	of the next $10 billion,	0.450%	of the next $100 billion and
0.530%	of the next $10 billion,	0.445%	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 0.521% of the fund’s average net assets.

George Putnam Balanced Fund 57

Putnam Management has contractually agreed, through November 30, 2020, 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 not reduced 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 0.40% 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, class M, class R, class R5, class R6, 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 R5 shares paid a monthly fee based on the average net assets of class R5 shares at an annual rate of 0.15%.

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	$1,577,121	Class R5	22
Class B	24,647	Class R6	12,015
Class C	73,833	Class Y	132,109
Class M	106,310	Total	$1,927,396
Class R	1,339

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. The fund also reduced expenses through brokerage/service arrangements. For the reporting period, the fund’s expenses were reduced by $19,736 under the expense offset arrangements and by $43,538 under the brokerage/service arrangements.

Each Independent Trustee of the fund receives an annual Trustee fee, of which $904, 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

58 George Putnam Balanced Fund

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%	$2,464,983
Class B	1.00%	1.00%	153,841
Class C	1.00%	1.00%	462,780
Class M	1.00%	0.75%	498,105
Class R	1.00%	0.50%	4,194
Total			$3,583,903

For the reporting period, Putnam Retail Management Limited Partnership, acting as underwriter, received net commissions of $125,609 and $1,649 from the sale of class A and class M shares, respectively, and received $5,815 and $1,550 in contingent deferred sales charges from redemptions of class B and class C shares, respectively.

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 $13 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, including TBA commitments (Long-term)	$1,571,252,886	$1,588,699,188
U.S. government securities (Long-term)	127,103,485	113,804,292
Securities sold short	—	—
Total	$1,698,356,371	$1,702,503,480

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.

George Putnam Balanced Fund 59

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 7/31/19		YEAR ENDED 7/31/18
Class A	Shares	Amount	Shares	Amount
Shares sold	3,381,318	$66,091,632	2,623,160	$52,100,389
Shares issued in connection with
reinvestment of distributions	3,961,602	74,358,017	538,589	10,669,427
	7,342,920	140,449,649	3,161,749	62,769,816
Shares repurchased	(5,592,320)	(109,303,080)	(5,384,483)	(107,154,734)
Net increase (decrease)	1,750,600	$31,146,569	(2,222,734)	$(44,384,918)

	YEAR ENDED 7/31/19		YEAR ENDED 7/31/18
Class B	Shares	Amount	Shares	Amount
Shares sold	53,844	$1,039,800	28,573	$560,901
Shares issued in connection with
reinvestment of distributions	60,668	1,121,676	3,698	72,531
	114,512	2,161,476	32,271	633,432
Shares repurchased	(232,836)	(4,498,174)	(255,672)	(5,022,282)
Net decrease	(118,324)	$(2,336,698)	(223,401)	$(4,388,850)

	YEAR ENDED 7/31/19		YEAR ENDED 7/31/18
Class C	Shares	Amount	Shares	Amount
Shares sold	1,335,751	$25,958,369	450,485	$8,902,182
Shares issued in connection with
reinvestment of distributions	152,759	2,837,732	8,228	162,099
	1,488,510	28,796,101	458,713	9,064,281
Shares repurchased	(440,624)	(8,558,494)	(931,063)	(18,283,984)
Net increase (decrease)	1,047,886	$20,237,607	(472,350)	$(9,219,703)

	YEAR ENDED 7/31/19		YEAR ENDED 7/31/18
Class M	Shares	Amount	Shares	Amount
Shares sold	414,653	$7,908,044	395,812	$7,807,586
Shares issued in connection with
reinvestment of distributions	274,983	5,073,820	25,267	494,053
	689,636	12,981,864	421,079	8,301,639
Shares repurchased	(921,296)	(17,830,553)	(733,700)	(14,479,627)
Net decrease	(231,660)	$(4,848,689)	(312,621)	$(6,177,988)

60 George Putnam Balanced Fund


	YEAR ENDED 7/31/19		YEAR ENDED 7/31/18
Class R	Shares	Amount	Shares	Amount
Shares sold	9,097	$179,756	8,725	$173,197
Shares issued in connection with
reinvestment of distributions	3,275	61,231	375	7,383
	12,372	240,987	9,100	180,580
Shares repurchased	(4,565)	(94,156)	(25,635)	(500,595)
Net increase (decrease)	7,807	$146,831	(16,535)	$(320,015)

	YEAR ENDED 7/31/19		YEAR ENDED 7/31/18
Class R5	Shares	Amount	Shares	Amount
Shares sold	—	$—	—	$—
Shares issued in connection with
reinvestment of distributions	63	1,189	10	195
	63	1,189	10	195
Shares repurchased	—	—	—	—
Net increase	63	$1,189	10	$195

	YEAR ENDED 7/31/19		YEAR ENDED 7/31/18
Class R6	Shares	Amount	Shares	Amount
Shares sold	661,871	$13,118,638	445,251	$8,754,766
Shares issued in connection with
reinvestment of distributions	102,319	1,930,495	13,469	268,930
	764,190	15,049,133	458,720	9,023,696
Shares repurchased	(274,589)	(5,311,669)	(119,993)	(2,419,968)
Net increase	489,601	$9,737,464	338,727	$6,603,728

	YEAR ENDED 7/31/19		YEAR ENDED 7/31/18
Class Y	Shares	Amount	Shares	Amount
Shares sold	2,102,971	$41,845,266	1,043,066	$20,865,351
Shares issued in connection with
reinvestment of distributions	343,481	6,478,983	50,121	996,021
	2,446,452	48,324,249	1,093,187	21,861,372
Shares repurchased	(1,347,546)	(26,494,122)	(1,188,436)	(23,577,305)
Net increase (decrease)	1,098,906	$21,830,127	(95,249)	$(1,715,933)

At the close of the reporting period, Putnam Investments, LLC owned 759 class R5 shares of the fund (100% of class R5 shares outstanding), valued at $15,803.

George Putnam Balanced Fund 61

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 7/31/18	cost	proceeds	income	of 7/31/19
Short-term investments
Putnam Cash Collateral
Pool, LLC^*	$12,806,160	$136,767,317	$145,675,752	$304,977	$3,897,725
Putnam Short Term
Investment Fund^**	66,260,491	291,587,232	311,592,089	1,199,837	46,255,634
Total Short-term
investments	$79,066,651	$428,354,549	$457,267,841	$1,504,814	$50,153,359

^*No management fees are charged to Putnam Cash Collateral Pool, LLC (Note 1). Investment income shown is included in securities lending income on the Statement of operations. There were no realized or unrealized gains or losses during the period.

^**Management fees charged to Putnam Short Term Investment Fund have been waived by Putnam Management. There were no realized or unrealized gains or losses during the period.

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. Investments in foreign securities involve certain risks, including those related to economic instability, unfavorable political developments, and currency fluctuations. The fund may invest a significant portion of its assets in securitized debt instruments, including mortgage-backed and asset-backed investments. The yields and values of these investments are sensitive to changes in interest rates, the rate of principal payments on the underlying assets and the market’s perception of the issuers. The market for these investments may be volatile and limited, which may make them difficult to buy or sell.

Note 7: Summary of derivative activity

The volume of activity for the reporting period for any derivative type that was held during the period is listed below and was based on an average of the holdings at the end of each fiscal quarter:


Purchased equity option contracts (contract amount)	$—^*
Written equity option contracts (contract amount)	$—^*
Futures contracts (number of contracts)	30
Forward currency contracts (contract amount)	$63,800,000

^*For the reporting period there were no holdings at the end of each fiscal quarter and the transactions were considered minimal.

62 George Putnam Balanced Fund

The following is a summary of the fair value of derivative instruments as of the close of the reporting period:


Fair value of derivative instruments as of the close of the reporting period
	ASSET DERIVATIVES		LIABILITY DERIVATIVES
Derivatives not
accounted for as	Statement of		Statement of
hedging instruments	assets and		assets and
under ASC 815	liabilities location	Fair value	liabilities location	Fair value
Foreign exchange
contracts	Receivables	$1,366,708	Payables	$—
Total		$1,366,708		$—

The following is a summary of realized and change in unrealized gains or losses of derivative instruments in the Statement of operations for the reporting period (Note 1):


Amount of realized gain or (loss) on derivatives recognized in net gain or (loss) on investments
Derivatives not
accounted for as			Forward
hedging instruments			currency
under ASC 815	Options	Futures	contracts	Total
Foreign exchange
contracts	$—	$—	$1,168,533	$1,168,533
Equity contracts	4,167	(21,518)	—	(17,351)
Total	$4,167	$(21,518)	$1,168,533	$1,151,182

Change in unrealized appreciation or (depreciation) on derivatives recognized in net gain or (loss)
on investments
Derivatives not accounted for as hedging			Forward currency
instruments under ASC 815		Futures	contracts	Total
Foreign exchange contracts		$—	$1,152,982	$1,152,982
Equity contracts		(18,717)	—	(18,717)
Total		$(18,717)	$1,152,982	$1,134,265

George Putnam Balanced Fund 63

Note 8: Offsetting of financial and derivative assets and liabilities

The following table summarizes any derivatives, repurchase agreements and reverse repurchase agreements, at the end of the reporting period, that are subject to an enforceable master netting agreement or similar agreement. For securities lending transactions or borrowing transactions associated with securities sold short, if any, see Note 1. For financial reporting purposes, the fund does not offset financial assets and financial liabilities that are subject to the master netting agreements in the Statement of assets and liabilities.


	Bank of America N.A.	Barclays Bank PLC	Citibank, N.A.	Goldman Sachs International	HSBC Bank USA, National Association	JPMorgan Chase Bank N.A.	Total
Assets:
Forward currency	$388,735	$226,733	$224,528	$226,783	$268,739	$31,190	$1,366,708
contracts^#
Total Assets	$388,735	$226,733	$224,528	$226,783	$268,739	$31,190	$1,366,708
Liabilities:
Forward currency	—	—	—	—	—	—	—
contracts^#
Total Liabilities	$—	$—	$—	$—	$—	$—	$—
Total Financial and
Derivative	$388,735	$226,733	$224,528	$226,783	$268,739	$31,190	$1,366,708
Net Assets
Total collateral
received	$346,969	$130,411	$110,000	$140,000	$239,892	$—
(pledged)^†##
Net amount	$41,766	$96,322	$114,528	$86,783	$28,847	$31,190
Controlled collateral
received (including	$346,969	$130,411	$110,000	$140,000	$239,892	$—	$967,272
TBA commitments)^**
Uncontrolled
collateral received	$—	$—	$—	$—	$—	$—	$—
Collateral (pledged)
(including TBA	$—	$—	$—	$—	$—	$—	$—
commitments)^**

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

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

^#Covered by master netting agreement (Note 1).

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

Note 9: New accounting pronouncements

In March 2017, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2017–08, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310–20): Premium Amortization on Purchased Callable Debt Securities. The amendments in the ASU shorten the amortization period for certain callable debt securities held at a premium, to be amortized to the earliest call date. The ASU is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2018. Management is currently evaluating the impact, if any, of applying this provision.

64 George Putnam Balanced Fund

Federal tax information

The Form 1099 that will be mailed to you in January 2020 will show the tax status of all distributions paid to your account in calendar 2019.

Pursuant to §852 of the Internal Revenue Code, as amended, the fund hereby designates $113,184,172 as a capital gain dividend with respect to the taxable year ended July 31, 2019, or, if subsequently determined to be different, the net capital gain of such year.

The fund designated 28.61% of ordinary income distributions as qualifying for the dividends received deduction for corporations.

For the reporting period, the fund hereby designates 32.40%, or the maximum amount allowable, of its taxable ordinary income distributions as qualified dividends taxed at the individual net capital gain rates.

For the reporting period, pursuant to §871(k) of the Internal Revenue Code, the fund hereby designates $9,189,682 of distributions paid as qualifying to be taxed as interest-related dividends, and $18,547,268 to be taxed as short-term capital gain dividends for nonresident alien shareholders.

George Putnam Balanced Fund 65

Officers

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


Robert T. Burns (Born 1961)	Richard T. Kircher (Born 1962)
Vice President and Chief Legal Officer	Vice President and BSA Compliance Officer
Since 2011	Since 2019
General Counsel, Putnam Investments,	Assistant Director, Operational Compliance, Putnam
Putnam Management, and Putnam Retail Management	Investments and Putnam Retail Management

James F. Clark (Born 1974)	Susan G. Malloy (Born 1957)
Vice President and Chief Compliance Officer	Vice President and Assistant Treasurer
Since 2016	Since 2007
Chief Compliance Officer and Chief Risk Officer,	Head of Accounting and Middle Office Services,
Putnam Investments and Chief Compliance Officer,	Putnam Investments and Putnam Management
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	Mark C. Trenchard (Born 1962)
Since 2004	Vice President
	Since 2002
	Director of Operational Compliance, Putnam
	Investments and Putnam Retail 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.

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

This report is for the information of shareholders of George Putnam Balanced 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.


Fiscal year ended	Audit Fees	Audit-Related Fees	Tax Fees	All Other Fees


July 31, 2019	$116,074	$1,281	$16,873	$ —
July 31, 2018	$132,581	$ —	$16,873	$ —


Fiscal year ended	Audit-Related Fees	Tax Fees	All Other Fees	Total Non-Audit Fees

July 31, 2019	$ —	$546,984	$ —	$ —
July 31, 2018	$ —	$524,401	$ —	$ —


	CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES


	Exact name of registrant as specified in charter:	George Putnam Fund of Boston


	Address of principal executive offices:	100 Federal Street, Boston, Massachusetts 02110


	Name and address of agent for service:	Robert T. Burns, Vice President 100 Federal Street Boston, Massachusetts 02110


	Copy to:	Bryan Chegwidden, Esq. Ropes & Gray LLP 1211 Avenue of the Americas New York, New York 10036


	Registrant's telephone number, including area code:	(617) 292–1000


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


	(c) In February 2018, the Code of Ethics of Putnam Investments was amended. The key changes to the Code of Ethics are as follows: (i) Prohibition of investing in public coin offerings or token offerings, (ii) Removal of monetary fines as available sanctions for violations of the Code of Ethics, and (iii) Expanded definition of “Immediate Family Member”.


	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:


	For the fiscal years ended July 31, 2019 and July 31, 2018, the fund's independent auditor billed aggregate non-audit fees in the amounts of $565,138and $542,944 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.


	UNITED STATES SECURITIES AND EXCHANGE COMMISSION


	Washington, D.C. 20549


	FORM N-CSR


	Item 1. Report to Stockholders:


	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 Distributions Committee. The Audit, Compliance and Distributions 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 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:


	Item 8. Portfolio Managers of Closed-End Investment Companies


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


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


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


	Item 12. Disclosures of Securities Lending Activities for Closed-End Management Investment Companies:


	(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.


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


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


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