1.
Q1 2014 » Putnam Perspectives
Fixed-Income Outlook
Key takeaways
• As Fed tapering unfolds, we expect to see stronger growth from
developed markets, while emerging markets in aggregate may
experience further currency and capital market weakness.
• In the United States, declining labor participation continues
to drive falling unemployment figures, and may harbor the
beginning of a wage inflation surprise.
l
U.S. tax exempt
Overweight
U.S. government and agency debt
Neutral
Fixed-income asset class
Underweight
Arrows in the table indicate the change
from the previous quarter.
Small overweight
Putnam’s outlook
Small underweight
• We expect credit, liquidity, and prepayment risks will continue to
be rewarded by the market in the months ahead, while interestrate risk remains unattractive due to its asymmetric risk profile.
l
Tax-exempt high yield
l
Agency mortgage-backed securities
l
Collateralized mortgage obligations
l
Non-agency residential mortgage-backed securities
l
Commercial mortgage-backed securities
l
U.S. floating-rate bank loans
l
U.S. investment-grade corporates
l
Global high yield
l
Emerging markets
l
U.K. government
l
Core Europe government
l
Peripheral Europe government
Japan government
l
l
CURRENCY SNAPSHOT
Dollar vs. yen: Dollar
Dollar vs. euro: Neutral
Dollar vs. pound: Neutral
PROUD
SPONSOR
A new Fed in a new
economic environment
In 2013, the Federal Reserve was quite
proactive in its communication strategy and
in taking the initial steps to slowly withdraw
economic stimulus. Importantly, the Fed
accomplished this without causing major
disturbances in financial markets and without
destabilizing the real economy. To be clear,
there is much left for the Fed to do, even as it
runs the non-trivial risk of committing policy
mistakes along the way. In short, incoming
Fed Chair Janet Yellen will have the delicate
task of weaning the U.S. economy off five
years’ worth of easy monetary policy. In our
view, the market and economic impact of
the transition away from stimulus is likely to
remain a top story for capital markets for the
duration of 2014.
And yet, despite the ongoing uncertainty
that tapering may generate, we believe the
United States is in a better economic position than it was a quarter ago. Net trade in
December was surprisingly strong, Q4 2013
GDP forecasts are tracking at 3.5%, consumer
spending has proven to be quite resilient, and
signs of rising corporate investment are beginning to appear. December’s disappointing jobs
data notwithstanding, the U.S. economy likely
picked up steam in the fourth quarter.
Looking forward, we believe it is possible
that economic growth in 2014 could be
stronger than forecast, particularly during
the second half of the year. If that occurs,
real interest rates — nominal interest rates
minus the rate of inflation — which have been
negative since 2008, could rise significantly.
We do not believe, however, that rates are
likely to rise quickly enough to derail stronger
economic growth.

2.
Q1 2014 | Fixed-Income Outlook
Falling labor participation remains a problem
Generally speaking, investors believe wage inflation
could become a problem sooner than expected. As the
unemployment rate moves downward, if wage inflation
develops earlier than the Fed is anticipating, we could see
the central bank reduce its stimulus efforts much earlier
than the markets are currently forecasting. We do not see
this coming to pass this winter, but it could be a development that raises significant concerns for the Fed and the
markets later in 2014.
Unemployment continues to drop, primarily due to a
declining labor participation rate. This remains a cause
for concern.
The Fed, under Chairman Ben Bernanke, believed that
an easy money policy — which tapering will not eliminate
this year, but only gradually reduce — would generate
enough cyclical dynamism to counteract any negative
effects of the prolonged downturn. Furthermore, the
Fed continues to believe that the non-accelerating
inflation rate of unemployment (NAIRU) — the rate
to which unemployment can fall without triggering
wage inflation — is around 5.6%. However, our research
suggests, and some institutions share the opinion, that
the NAIRU may be significantly higher than this, primarily
because of various structural problems hampering the
labor participation rate.
Figure 1: ixed-income asset
F
class performance
The fourth quarter of 2013 continued to
be a favorable environment for credit and
liquidity risk.
3%
3Q 13
4Q 13
2%
1%
0%
-1%
-2%
-3%
U.S.
government
U.S.
tax
exempt
Taxexempt
high
yield
Agency Commercial
U.S.
U.S.
mortgage- mortgage- floating- investmentbacked
backed
rate
grade
securities securities bank loans corporate
debt
Global
high
yield
Emergingmarket
debt
U.K.
gov’t
Source: Putnam research, as of 12/31/13. Past performance is not indicative of future results. See page 10 for index definitions.
2
Eurozone
gov’t
Japan
gov’t

3.
PUTNAM INVESTMENTS | putnam.com
We continue to favor defensive positions with respect to
duration and the yield curve.
Credit, liquidity, and prepayment:
three risks we favor
Asset class views
Against the backdrop of soon-to-be scaled-back stimulus,
the fourth quarter of 2013 continued to be a favorable
environment for credit and liquidity risk — two of the
four major risks that Putnam’s fixed-income teams see as
fundamental to market dynamics. In addition, strategies
oriented toward a third type of risk — prepayment risk,
which includes investments in interest-only collateralized mortgage obligations — generally performed well.
As we will describe in the asset class views that follow, we
continue to see these risks as offering attractive reward
potential as 2014 gets under way.
Securitized sectors:
continued strength outside the index
Our mortgage credit holdings — both commercial
mortgage-backed securities (CMBS) and non-agency
residential mortgage-backed securities (RMBS) — aided
our portfolios in the fourth quarter of 2013. Within CMBS,
we focused our security selection efforts on “mezzanine” bonds rated BBB/Baa, which offered higher yields
and what we believe are acceptable risks. By way of
background, mezzanine CMBS are lower in the capital
structure of a securitized deal backed by commercial mortgage loans, and provide a yield advantage
over higher-rated bonds along with meaningful principal protection. Our non-agency RMBS investments
rebounded from undervalued levels prior to the quarter,
buoyed by investor demand for higher-yielding securities.
Interest-rate risk: a risk to de-emphasize in long
positions where possible
The fourth major fixed-income risk we analyze — interestrate risk — has become less attractive for long positions
in a context of rising interest rates. Viewing this risk as an
opportunity to short, however, puts it in a better light.
Prepayment push and pull
While we continue to find prepayment strategies
attractive, we are mindful of the leadership transition at
the Federal Housing Finance Agency, the independent
regulator overseeing Fannie Mae and Freddie Mac.
Investors are concerned that President Obama’s selection
to head the agency may be in favor of expanding the
number of homeowners who would be eligible to reduce
their mortgage principal balances, which could negatively
affect certain prepayment strategies. However, this
concern has been mitigated by rising interest rates, which
have dampened homeowners’ incentive to refinance, and
also by higher home prices, which have diminished the
need to reduce mortgage principal balances.
In accordance with portfolio mandates, we have thus
tended and continue to favor defensive positions with
respect to duration and the yield curve — in some cases,
we have taken portfolio duration to negative on a net
basis — particularly in the intermediate, 5- to 10-year
portion of the curve. This strategy worked well in
December, as the Fed’s announcement that it would begin
tapering its bond buying caused rates in the 5- to 7-year
portion of the curve to rise.
High yield and bank loans: positive outlook
amid recovery
For the year ended December 31, 2013, issuance of new
high-yield bonds reached a record of more than $398
billion, with a majority of the new-issue activity being used
to refinance older, higher-coupon debt. Leveraged-loan
new-issue activity totaled $669 billion, far surpassing the
previous annual high of $388 billion in 2007. Like issuance
in the high-yield market, leveraged-loan issuance was
dominated by repricing and refinancing of existing debt.
By credit rating, CCC/Caa-rated bonds and loans outperformed higher-rated bonds and loans by a sizable margin.
3

4.
Q1 2014 | Fixed-Income Outlook
Figure 2. Rates moved higher as the Fed
discussed winding down its
bond-buying programs
We do not believe that rates are likely to rise
quickly enough to derail stronger economic
growth in 2014.
3%
12/31/13
9/30/13
2%
1%
s
ye
ar
30
ye
10
ye
7
ar
s
s
ar
s
5
ye
ar
s
ar
ye
3
1m
o
1 nth
ye
ar
0%
Source: U.S. Department of the Treasury, as of 12/31/13.
Default rate at pre-crisis lows
At period-end, the high-yield default rate stood at 0.66%,
its lowest level since December 2007, and considerably
below the long-term average of 4.0%. The leveragedloan credit default rate, which combines bonds and loans,
was at 1.03%, its lowest level since October 2011. From an
industry perspective within the high-yield market, transportation was the best-performing group while cable and
satellite was the weakest-performing group.
Solid fundamentals for high-yield and bank loan markets
We continue to view the fundamental backdrop for
high-yield bonds and bank loans as solid: U.S. economic
growth could strengthen in 2014, issuers appear to be in
reasonably good financial shape, and default rates may
remain near historically low levels. Specifically, we believe
the high-yield default rate could remain below 2% through
2014 and possibly longer. While high-yield and bank-loan
spreads compressed during the fourth quarter of 2013,
they were still well above the euphorically tight levels that
we saw in 2007 and remained closer to their historical
averages. Consequently, in light of our default forecast,
we believe spreads are fairly attractive.
We believe the high-yield default rate could remain below 2%
through 2014 and possibly longer.
4

5.
PUTNAM INVESTMENTS | putnam.com
Investment-grade credit
below their 10-year average, we see the sector as offering
some potential for investors to benefit from narrowing
spreads given strong credit fundamentals. This is especially the case in financials, where many of the recent
regulatory changes tend to be beneficial for bondholders.
During the fourth quarter, we continued to see strong
fundamentals among investment-grade bond issuers.
Profit margins have remained high, and balance sheets
tend to be in good shape. In addition, where companies
are becoming increasingly leveraged, they are generally issuing debt at low cost with long-dated maturities.
Although investment-grade credit has rallied significantly
since the 2008 financial crisis and spreads have tightened
Spreads generally compressed, but
in many cases remained close to their
historical averages.
Figure 3. urrent spreads relative
C
to historical norms
1000 n verage excess yield over Treasuries
1000 A
(OAS, 1/1/98–12/31/07)
950
950
C
n urrent excess yield over Treasuries
800
800
(OAS as of 12/31/13)
600
600
650
650
573
573
425
425
437
437
400
400
298
298
200
200
114
130130 114
0 0
34 34
3737
Agencies
Agencies
56 56
3535
89 89
123123 175
175
112112
150
150
100
100
Agency
Agency Investment-grade AAA CMBS
Investment-grade AAA CMBS
MBS
MBS
corporates
corporates
High yield
High yield
Non-agency
Non-agency
RMBS
RMBS
Agency IO IO
Agency
EmergingEmergingmarket debt
market debt
Sources: Barclays, Bloomberg, Putnam, as of 12/31/13.
Data are provided for informational use only. Past performance is no guarantee of future results. All spreads are in basis points and measure optionadjusted yield spread relative to comparable maturity U.S. Treasuries with the exception of non-agency RMBS, which are loss-adjusted spreads to
swaps calculated using Putnam’s projected assumptions on defaults and severities, and agency IO, which is calculated using assumptions derived
from Putnam’s proprietary prepayment model. Agencies are represented by Barclays U.S. Agency Index. Agency MBS are represented by Barclays
U.S. Mortgage Backed Securities Index. Investment-grade corporates are represented by Barclays U.S. Corporate Index. High yield is represented by
Barclays U.S. Corporate High Yield Index. AAA CMBS are represented by the Aaa portion of Barclays Investment Grade CMBS Index. EMD is represented by Barclays Global Emerging Markets Index. Non-agency is estimated using average market level of a sample of below-investment-grade
securities backed by Alt-A collateral. Agency IO is estimated from a basket of Putnam-monitored interest-only securities. Option-adjusted spread
(OAS) measures the yield spread over duration equivalent Treasuries for securities with different embedded options.
5

6.
Q1 2014 | Fixed-Income Outlook
Bond returns gained ground versus
Treasuries amid central bank policy
uncertainty and change.
Figure 4. Spread sectors’ excess
returns relative to Treasuries
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
ABS
CMBS
Corporates
MBS
U.S. agency
Source: Barclays, as of 12/31/13. Past performance is not indicative of future results.
Tailwinds for developed markets, obstacles for
emerging-market debt
Rate volatility may not derail credit opportunities
Higher rate volatility, which markets have been grappling
with since the second quarter, affects most fixed-income
assets negatively, including longer duration corporate
credit. However, when rising rates are associated with
an economic recovery, it often bodes well for corporate
spreads; consequently, we believe spreads may continue
to tighten modestly in 2014. From a sector perspective,
securities issued by financial institutions, particularly
large, money center banks, continued to perform well
through the end of 2013. Regulation has transformed the
banking industry by limiting risky activities and increasing
capital requirements, which has resulted in a sustained
improvement in credit spreads.
In concert with improving economic data in the United
States, Japan’s economy strongly rebounded through the
end of 2013, while core European economies performed
better than we expected and the outlook for peripheral
Europe improved. During the fourth quarter, our overweight allocations to peripheral European government
bonds in Portugal, Italy, Ireland, Spain, and Greece, which
were held against a net short position in Germany, aided
portfolio results. All told, a supportive economic backdrop
encouraged investors to put capital to work in the global
sovereign credit markets.
We believe the Bank of Japan may need to engineer a further
burst of inflation via the exchange rate this spring.
6

7.
PUTNAM INVESTMENTS | putnam.com
Japan’s reflation strategy
One of the most dramatic policy-driven stories for
non-U.S. markets has been unfolding in Japan. We do,
however, see reasons to be wary of the efficacy of Japan’s
reflation strategy. Much of the current rise in inflation is
due to exchange-rate dynamics, and we believe the Bank
of Japan (BoJ) may need to engineer a further burst of
inflation via the exchange rate this spring. In the near term,
as well, Japan’s consumption tax hike will be a risk for the
Japanese economy — indeed, its timing could prompt
additional monetary easing by the BoJ.
Japanese officials are sensitive to the Group of Ten
(G10) countries’ views on the exchange rate, and it is
clear that governments in both South Korea and Europe
are unhappy with a dramatically weaker yen. The United
States, by contrast, does not appear all that concerned,
and instead appears sympathetic to the argument that
Japan is using policy to create a path out of deflation. In
our view, the yen could drop another 5% from year-end
2013 levels before the Japanese provoke the United States
to lend political support to Japan’s disgruntled regional
and global competitors.
Figure 5. igh-yield spreads and defaults generally
H
move in tandem over credit cycles
High-yield default rate
Spread to worst
Current spread: 437 bps (as of 12/31/13)
20-year median spread: 523 bps
Average default rate: 4.0%
Default rate
1990–91
recession
2000
1600
2001
recession
1200
800
8
400
4
0
0
’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 12/31/13
Source: JPMorgan, High Yield Market Monitor, 12/31/13. A basis point (bp) is one-hundredth of a percent. One hundred basis points equals one
percent. Spread to worst measures the difference between the best- and worst-performing yields in two securities or asset classes.
7
Spreads (bps)
12
Today, the gap between spreads
and defaults remains wide, signaling
opportunity for investors
2007–09
recession
20%
16
High-yield spreads dropped
below their long-term average;
defaults remain low.

8.
Q1 2014 | Fixed-Income Outlook
European equilibrium, smoke, and mirrors
In Europe, we believe slow growth will continue. Having
said that, some regional differentiation will be apparent.
Spain is doing much better than it had been just 18 months
ago, and even Italy looks somewhat healthy now that its
political crisis has passed. Importantly, fiscal pressure in
the form of austerity programs is slated to ease somewhat this year. In a positive scenario, this could boost GDP
growth, improve revenue growth for corporations, and
result in better margins for companies that streamlined
their operations during the period of austerity.
In a dourer scenario, growth may remain too weak to
pull up inflation, which is uncomfortably low. This puts the
European Central Bank (ECB) in a tight spot: Essentially
at the threshold of instituting negative rates, it has very
limited monetary policy ammunition left to help mitigate
disflationary or deflationary pressures. In the meantime,
however, tightening peripheral European spreads represent a form of financial easing, for which the ECB is quite
grateful.
Policy in Europe remains a game of smoke and mirrors.
In his press conference on January 9, 2014, ECB President
Mario Draghi beat the stronger-forward-guidance drum
and reiterated an old and untried promise to do more
if circumstances require. The OMT (Outright Monetary
Transactions), through which the ECB might purchase
European sovereign debt in the secondary market, is such
a promise. In the eyes of many policymakers, it has thankfully never had to be utilized.
Figure 6: unicipal bond credit spreads
M
have narrowed from historical wides
The most attractive relative values
continue to populate in the BBB-rated
segment of the muni market.
Municipal bond spreads by quality rating
500
AA
A
BBB
400
300
200
100
0
1999
2000
2001
2002
2003
2004
2005
2006
Sources: Putnam, as of 12/31/13. Credit ratings are as determined by Putnam.
8
2007
2008
2009
2010
2011
2012
12/31/13

9.
PUTNAM INVESTMENTS | putnam.com
Essentially at the threshold of instituting negative rates,
the ECB has very limited monetary policy ammunition left.
Emerging markets under pressure
By contrast, emerging markets have come off a rough
quarter, both in terms of deteriorating growth data
and in response to the rise in developed-market rates.
Indeed, a large wave of investors took tapering as their
signal to move money out of emerging-market sovereign
and corporate debt (EMD), as these were perceived to
be too risky relative to “safer” developed-market debt
securities offering higher-trending yields. Also, many
investors moved out of emerging-market equities in the
fourth quarter of 2013, which put downward pressure on
emerging-market currencies and amplified the decline
in EMD.
A productive emphasis on revenue bonds
For example, we have found improving fundamentals and
still-attractive spreads among revenue credits, which are
typically issued by state and local government entities to
finance specific revenue-generating projects. We have
also maintained an overweight exposure to municipal
bonds rated A and BBB. While we believed that the
budget challenges faced by many municipalities were
significant in the final months of 2013, we were confident
that conditions would improve as long as the broader
economy did not stall. Our overweight position in essential
service revenue bonds was offset by our underweight
positioning in local G.O. (general obligation) bonds —
securities issued at the city or county level. In terms of
sectors, we tended to favor airlines, higher education,
utility, and health-care bonds.
Looking forward, we see opportunities in select areas
of higher-yielding sovereign debt. While these positions
may be perceived as riskier in terms of credit risk, they are
generally short-term bonds, which are less exposed to the
negative effects of rising interest rates.
Technicals and tax policy may raise concerns
Technical factors in the market will likely continue to
be a source of uncertainty. Tax-exempt municipal fund
outflows for 2013 topped $60 billion — the most in 20
years — and have put downward pressure on prices.
Although we have seen some value-conscious retail and
institutional buyers come into the market to help support
prices, we think it is unlikely that we will see volatility
subside until outflows and rate volatility diminish.
Municipal bonds: strong fundamentals despite
rate headwinds and headline risks
The past quarter, and most of 2013 for that matter, proved
to be a volatile time for municipal bonds, and market
conditions remain turbulent. Uncertainty about interest
rates and the headline risk from a few isolated credit situations diverted investor attention from the overall health of
the municipal bond market. However, we believe that the
underlying fundamentals in the municipal bond market
are quite strong.
With regard to tax policy, many issues remain
unresolved, including the debt ceiling and the potential
for broader tax reform — both of which could affect the
value of municipal bonds. Although these conditions
could contribute to volatility, that in itself may offer
attractive buying opportunities to investors focused on
the fundamentals.
9

10.
Q1 2014 | Fixed-Income Outlook
Among currencies, the dollar and euro
find support
After a considerable run, the Japanese yen position has
been all but flattened in the portfolio. Over the medium
term, it is expected that the BoJ will have to do much
more than is currently slated and should provide further
impetus for USD/JPY to move higher.
Our U.S. dollar position is moderate long. Labor market
data have been consistent with the Fed’s intention to taper
asset purchases in January. However, with Janet Yellen
leading the Fed, the market expects forward guidance to
be strengthened to ensure that when tapering does occur,
the front end will remain anchored. Short-term rates
are likely to come under pressure as the U.S. economy
continues to outperform and the market begins to challenge the FOMC forward guidance, and this should be
supportive of the U.S. dollar.
Tapering expectations continue to have an impact on
the Australian dollar and other current account deficit
countries that had been supported by safe-haven fixedincome flows. This should keep the Australian dollar
biased to the downside, but the carry associated with
being short does not make it the most attractive short.
We also favor an underweight to the Canadian dollar. As
Canada suffers from a widening in its current account and
basis balance, the Canadian dollar will likely continue to
lose ground against the U.S. dollar over the medium term.
We modestly favor the euro as the surprise rate cut by
the ECB was not the beginning of more aggressive policy,
but rather a statement that the council has done enough
given its expectations for growth and inflation. The risk
of the euro weakening remains somewhat limited as the
eurozone is set to run a current account surplus exceeding
2% of GDP this year, eurozone banks continue to shed
and repatriate overseas assets, and economic data slowly
improve.
In emerging markets, the environment has changed
substantially and our positioning is much more neutral.
The surprise by the FOMC and arrival of Yellen at the helm
of the FOMC increase the chance of a much more benign
change to U.S. monetary policy, although with the plan
for tapering, conviction for emerging-market currencies
is lower than before. Those currencies with weak external
balances, such as those of Indonesia, India, Turkey, and
South Africa, are less likely to participate in any rallies as
fixed-income flows dry up and start to reverse course.
The British pound sterling positioning remains modest.
Growth data remain strong and are challenging the
forward guidance as laid out by the Bank of England, but
the pound has been the strongest currency over the past
several months, reflecting this strength. The pound should
be supported over the medium term, but positioning
could be a challenge in the short term.
Agency mortgage-backed securities are represented by the Barclays U.S. Mortgage
Backed Securities Index, which covers agency mortgage-backed pass-through
securities (both fixed-rate and hybrid ARM) issued by Ginnie Mae (GNMA), Fannie Mae
(FNMA), and Freddie Mac (FHLMC).
Japan government is represented by the Barclays Japanese Aggregate Bond Index,
a broad-based investment-grade benchmark consisting of fixed-rate Japanese
yen-denominated securities.
Tax-exempt high yield is represented by the Barclays Municipal Bond High Yield Index,
which consists of below-investment-grade or unrated bonds with outstanding par
values of at least $3 million and at least one year remaining until their maturity dates.
Commercial mortgage-backed securities are represented by the Barclays U.S.
CMBS Investment Grade Index, which measures the market of commercial mortgagebacked securities with a minimum deal size of $500 million. The two subcomponents
of the U.S. CMBS Investment Grade Index are U.S. aggregate-eligible securities and
non-eligible securities. To be included in the U.S. Aggregate Index, the securities must
meet the guidelines for ERISA eligibility.
U.K. government is represented by the Barclays Sterling Aggregate Bond Index, which
contains fixed-rate, investment-grade, sterling-denominated securities, including gilt
and non-gilt bonds.
U.S. floating-rate bank loans are represented by the SP/LSTA Leveraged Loan
Index, an unmanaged index of U.S. leveraged loans.
Emerging-market debt is represented by the JPMorgan Emerging Markets Global
Diversified Index, which is composed of U.S. dollar-denominated Brady bonds,
eurobonds, traded loans, and local market debt instruments issued by sovereign
and quasi-sovereign entities.
U.S. government and agency debt is represented by the Barclays U.S. Aggregate
Bond Index, an unmanaged index of U.S. investment-grade fixed-income securities.
U.S. investment-grade corporate debt is represented by the Barclays U.S. Corporate
Index, a broad-based benchmark that measures the U.S. taxable investment-grade
corporate bond market.
Eurozone government is represented by the Barclays European Aggregate Bond
Index, which tracks fixed-rate, investment-grade securities issued in the following
European currencies: euro, Norwegian krone, Danish krone, Swedish krona, Czech
koruna, Hungarian forint, Polish zloty, and Swiss franc.
U.S. tax exempt is represented by the Barclays Municipal Bond Index, an unmanaged
index of long-term fixed-rate investment-grade tax-exempt bonds.
Global high yield is represented by the BofA Merrill Lynch Global High Yield
Constrained Index, an unmanaged index of global high-yield fixed-income securities.
You cannot invest directly in an index.
10

11.
PUTNAM INVESTMENTS | putnam.com
This material is provided for limited purposes. It is not
intended as an offer or solicitation for the purchase or sale of
any financial instrument, or any Putnam product or strategy.
References to specific securities, asset classes, and financial
markets are for illustrative purposes only and are not intended
to be, and should not be interpreted as, recommendations
or investment advice. The opinions expressed in this article
represent the current, good-faith views of the author(s) at the
time of publication. The views are provided for informational
purposes only and are subject to change. This material does
not take into account any investor’s particular investment
objectives, strategies, tax status, or investment horizon. The
views and strategies described herein may not be suitable
for all investors. Investors should consult a financial advisor
for advice suited to their individual financial needs. Putnam
Investments cannot guarantee the accuracy or completeness
of any statements or data contained in the article. Predictions,
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subject to change. Any forward-looking statements speak
only as of the date they are made, and Putnam assumes no
duty to update them. Forward-looking statements are subject
to numerous assumptions, risks, and uncertainties. Actual
results could differ materially from those anticipated. Past
performance is not a guarantee of future results. As with
any investment, there is a potential for profit as well as the
possibility of loss.
Putnam’s veteran fixed-income
team offers a depth and breadth
of insight
Successful investing in today’s markets requires
a broad-based approach, the flexibility to exploit
a range of sectors and investment opportunities,
and a keen understanding of the complex
global interrelationships that drive the markets.
That is why Putnam has more than 70 fixedincome professionals focusing on delivering
comprehensive coverage of every aspect of the
fixed-income markets, based not only on sector,
but also on the broad sources of risk — and
opportunities — most likely to drive returns.
D. William Kohli
Co-Head of Fixed Income
Global Strategies
Investing since 1987
Joined Putnam in 1994
Michael V. Salm
Co-Head of Fixed Income
Liquid Markets and Securitized Products
Investing since 1989
Joined Putnam in 1997
The information provided relates to Putnam Investments and
its affiliates, which include The Putnam Advisory Company,
LLC and Putnam Investments Limited®.
Prepared for use in Canada by Putnam Investments Inc.
[Investissements Putnam Inc.] (o/a Putnam Management in
Manitoba). Where permitted, advisory services are provided
in Canada by Putnam Investments Inc. [Investissements
Putnam Inc.] (o/a Putnam Management in Manitoba) and its
affiliate, The Putnam Advisory Company, LLC.
Paul D. Scanlon, CFA®
Co-Head of Fixed Income
Global Credit
Investing since 1986
Joined Putnam in 1999
11

12.
Consider these risks before investing: International investing involves certain risks, such as currency fluctuations,
economic instability, and political developments. Additional risks may be associated with emerging-market securities,
including illiquidity and volatility. Lower-rated bonds may offer higher yields in return for more risk. Funds that invest
in government securities are not guaranteed. Mortgage-backed securities are subject to prepayment risk. Derivatives
also involve the risk, in the case of many over-the-counter instruments, of the potential inability to terminate or sell
derivatives positions and the potential failure of the other party to the instrument to meet its obligations.
Bond investments are subject to interest-rate risk, which means the prices of the fund’s bond investments are likely to
fall if interest rates rise. Bond investments also are subject to credit risk, which is the risk that the issuer of the bond may
default on payment of interest or principal. Interest-rate risk is generally greater for longer-term bonds, and credit risk
is generally greater for below-investment-grade bonds, which may be considered speculative. Unlike bonds, funds that
invest in bonds have ongoing fees and expenses.
You can lose money by investing in a mutual fund.
If you are a U.S. retail investor, please request a prospectus, or a summary prospectus if available, from your
financial representative or by calling Putnam at 1-800-225-1581. The prospectus includes investment objectives,
risks, fees, expenses, and other information that you should read and consider carefully before investing.
In the United States, mutual funds are distributed by Putnam Retail Management.
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