-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KKg0JLJrNhzf54lHitm3Z6ra9JS1/hj++NTuzWrBq5ToYNO8bPZovj6c6SXUugB7 4+vT9FExGsJxE9h/E1ntUQ== 0000928816-05-000443.txt : 20050329 0000928816-05-000443.hdr.sgml : 20050329 20050328173352 ACCESSION NUMBER: 0000928816-05-000443 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20050131 FILED AS OF DATE: 20050329 DATE AS OF CHANGE: 20050328 EFFECTIVENESS DATE: 20050329 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Putnam RetirementReady Funds CENTRAL INDEX KEY: 0001295293 IRS NUMBER: 000000000 STATE OF INCORPORATION: MA FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-21598 FILM NUMBER: 05707474 BUSINESS ADDRESS: STREET 1: ONE POST OFFICE SQUARE CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 617 760-4623 MAIL ADDRESS: STREET 1: ONE POST OFFICE SQUARE CITY: BOSTON STATE: MA ZIP: 02109 N-CSR 1 prf1.txt PUTNAM RETIREMENTREADY FUNDS Putnam RetirementReady[REGISTRATION MARK] Funds Item 1. Report to Stockholders: - ------------------------------- The following is a copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Investment Company Act of 1940: SEMIANNUAL REPORT ON PERFORMANCE AND OUTLOOK 1-31-05 [GRAPHIC OMITTED: CLOCK] [SCALE LOGO OMITTED] From the Trustees [GRAPHIC OMITTED: PHOTO OF JOHN A. HILL AND GEORGE PUTNAM, III] John A. Hill and George Putnam, III Dear Fellow Shareholder: It is a pleasure to present you with the first shareholder report for Putnam's newest mutual fund concept, the Putnam RetirementReady [REGISTRATION MARK] Funds. Designed to offer you a one-step approach to investment diversification, each target-year fund encompasses stock, bond, and capital preservation investments and is managed using a gradually changing asset allocation. Over time, as the target year draws closer, each portfolio will be invested more conservatively so that its level of risk is reduced appropriately for its shortened investment time horizon. Another fund, the RetirementReady Maturity Fund, offers a fixed allocation focusing on bonds and capital preservation investments. Putnam is committed to helping investors and their advisors reach informed investment decisions. Over the past year, we have taken steps to enhance the information we provide to shareholders. Many of these enhancements appear in this report, including a section on ongoing fund expenses, manager compensation information that pertains to the funds, and a section on the funds' Portfolio Leader and Portfolio Members that includes information about these individuals' other fund management responsibilities at Putnam. We also provide information on fund ownership. In addition, starting on page 14, we provide information about the approval by the Trustees of your fund's management contract with Putnam. You can expect to see additional enhancements in the funds' annual report, which will cover the period from February 1 to July 31, 2005. In the following pages, your fund's management team discusses performance, strategy, and its outlook for the remainder of fiscal 2005. As always, we thank you for your support of the Putnam funds. Respectfully yours, /S/ JOHN A. HILL /S/ GEORGE PUTNAM, III John A. Hill George Putnam, III Chairman of the Trustees President of the Funds March 16, 2005 Introduction As discussed in the prospectus you received before becoming a shareholder, each target-dated RetirementReady [REGISTRATION MARK] Fund seeks capital appreciation and current income consistent with a decreasing emphasis on capital appreciation and an increasing emphasis on current income as the fund approaches its target date. The Maturity Fund seeks as high a rate of current income as Putnam Management believes is consistent with preservation of capital. Each of the RetirementReady Funds invests in a strategic combination of Putnam mutual funds whose underlying asset classes and investment styles provide you with exposure to growth- and value- style stocks, large and small companies, and investment-grade and high-yield bonds. For each fund except the Maturity Fund, allocations to the underlying Putnam mutual funds are adjusted periodically, in order to reduce portfolio volatility as the fund approaches its target, or maturity, date. While diversification can help protect your returns from excessive volatility, it cannot protect against market losses. However, by choosing a RetirementReady Fund based on the year you plan to start withdrawing assets (typically in retirement), you may pursue maximum returns while seeking to maintain a level of risk appropriate to your time horizon. This report covers the first half of the funds' 2005 fiscal year, which is an abbreviated period that extends from their inception on November 1, 2004, through January 31, 2005. Fund performance is not included in this initial report because the funds do not yet have a full quarter of results. The report begins with an overview of global equity and fixed-income market performance. This is followed by a listing of the objectives and strategies of the Putnam mutual funds in which the RetirementReady Funds invest. The "Allocation by Fund" chart on page 5 identifies the percent of assets that each RetirementReady Fund had invested in the underlying Putnam funds, as of the last day of the period. This is followed by your management team's views on anticipated developments that could affect the funds over the next six months and their plans for responding to them. Information on your fund's management team on page 7. On page 8 we present information on the funds' expenses in a way that will enable you to compare your fund's expense ratio with the expenses of other funds. The Investment Glossary on page 12 defines key terms used throughout the report. We hope you will find the information in this report useful. Market overview The six-month period ended January 31, 2005, was a time of dramatic change for both stock and bond markets. Although the RetirementReady Funds began operations toward the end of this period, on November 1, 2004, we believe it is valuable to provide you with a perspective for the full six months in order to give you a better understanding of events that affected the different asset classes in which these funds invest. For the majority of 2004, equities and fixed-income markets experienced a period of "benign equilibrium" -- flat to slightly positive returns. However, after the November 2 elections, both stocks and bonds rallied sharply. On the equity side, stocks across industries, investment styles, and market capitalizations posted positive returns; the same was also true for bonds across the credit-quality and maturity spectrums. Since the New Year, stock and bond markets for the most part have reversed direction and given back a portion of those gains. A number of factors affected the market patterns that emerged in late 2004. The positive impact of improving job data, continued high corporate earnings, and low inflation that built up throughout the year seemed to create a pent-up demand for both stocks and bonds. But that demand was stymied by concerns about rising interest rates, the future of the economy, the war in Iraq, and uncertainty surrounding the presidential election. Once some of this negative sentiment and uncertainty lifted, the markets responded. Market overview: Equities The most significant factor affecting the U.S. stock market during the period was the presidential election. As a general rule, markets tend to react negatively to change, making it no surprise that after President Bush's reelection, equities across the board rallied. The lack of terrorist activity at several high-profile events -- including the Athens Olympics and the Democratic and Republican National Conventions in Boston and New York City, respectively -- soothed investors, but did not compel them to act. These factors in essence created a latent demand in the stock market that sent equities, particularly the more sensitive smaller-cap and growth-style stocks, into a strong rally following the November 2 election. Prior to that point, performance differences between investment styles and stocks of different market capitalizations had been relatively minor. On the international stage, two main factors drove stock market performance -- a global "rebalancing" and the devaluation of the U.S. dollar. In local currency terms, the S&P 500 Index, a broad measure of domestic common stock performance, has consistently outperformed international markets since 1997. This trend, however, began to reverse a few years ago as China began the process of industrialization and Europe underwent a number of economic transformations. The result in 2004 was that international stocks outperformed their U.S. counterparts on an absolute basis. The rapid decline of the U.S. dollar, beginning in October and continuing throughout the fourth quarter, further enhanced returns for international stocks. The burgeoning U.S. budget deficit, among other factors, has led to one of the weakest dollars in recent years, and foreign securities further benefited from that trend when their returns were translated back into local currency figures. While the dollar recovered somewhat in January, the trend of international stocks outperforming their domestic counterparts has continued, with most international indexes outperforming the S&P 500 by several percentage points on a year-to-date basis. Market overview: Fixed Income In 2004, all eyes in the domestic bond market focused on the Federal Reserve Board (the Fed) as investors braced for what many felt was an inevitable rise in interest rates. By August, the Fed had firmly demonstrated its commitment to raising rates gradually rather than aggressively, as some had feared. Against this backdrop, the yield curve (the difference in yields between bonds of various maturities) flattened considerably, as the yields on shorter-term bonds climbed. High- yield bonds continued to outperform in this environment, as they have for the past few years, as investors were willing to take on added risk in exchange for the higher interest payments these lower-quality securities generally pay. Mortgage- and asset-backed securities also posted strong returns, as many investors returned to the fixed-income market after the Fed solidified its current pro-growth stance. Like their equity counterparts, international fixed-income securities also benefited from the weakening U.S. dollar. Consequently, investors in non-U.S. markets, like those at home, generally sought out higher yields wherever they could find them. The international high-yield sector performed well for the year, as did emerging- market debt. In addition, companies that were able to take advantage of rising oil prices to improve their financial conditions saw their bond prices rise, especially within the oil services and energy sectors. - ------------------------------------------------------------------------------- MARKET SECTOR PERFORMANCE 6 MONTHS ENDED 1/31/05 - ------------------------------------------------------------------------------- Equities - ------------------------------------------------------------------------------- Russell 3000 Index (broad stock market) 9.32% - ------------------------------------------------------------------------------- S&P 500 Index (broad stock market) 8.16% - ------------------------------------------------------------------------------- MSCI EAFE Index (international stocks) 16.68% - ------------------------------------------------------------------------------- MSCI EMF Index (emerging-market stocks) 29.48% - ------------------------------------------------------------------------------- Bonds - ------------------------------------------------------------------------------- Lehman Aggregate Bond Index (broad bond market) 3.81% - ------------------------------------------------------------------------------- Lehman Credit Index (corporate bonds) 5.06% - ------------------------------------------------------------------------------- JP Morgan Developed High Yield Index (high-yield corporate bonds) 7.47% - ------------------------------------------------------------------------------- These indexes provide an overview of performance in different market sectors for the six months ended 1/31/05. - ------------------------------------------------------------------------------- Underlying Investments for the Putnam RetirementReady Funds Except for the Maturity Fund, each Putnam RetirementReady Fund invests, to varying degrees, in a variety of Putnam mutual funds. This section describes the goals and strategies of the underlying Putnam funds. Putnam Voyager Fund The fund seeks capital appreciation by investing primarily in growth stocks of large-capitalization U.S. companies. Growth stocks are issued by companies that Putnam believes are fast-growing and whose earnings are likely to increase over time. Growth in earnings may lead to an increase in the price of the stock. The fund invests mainly in midsized and large companies, although it can invest in companies of any size. The Putnam Fund for Growth and Income The fund seeks capital growth and current income by investing primarily in common stocks of large-capitalization U.S. companies, with a focus on value stocks that offer the potential for capital growth, current income, or both. Value stocks are those that Putnam believes are currently undervalued by the market. We look for companies undergoing positive change. If we are correct and other investors recognize the value of the company, the price of the stock may rise. The fund invests mainly in large companies. Putnam Capital Opportunities Fund The fund seeks long-term growth of capital by investing primarily in common stocks of small-capitalization U.S. companies that Putnam believes have favorable investment potential. For example, the fund may purchase stocks of companies whose stock price is lower than the value Putnam places on the company. The fund may also consider other factors that Putnam believes will cause the stock price to rise. The fund invests mainly in small and midsized companies. Putnam International Equity Fund The fund seeks capital appreciation by investing primarily in common stocks of companies outside the United States that Putnam believes have favorable investment potential. For example, the fund may purchase stocks of companies whose stock price is lower than the value Putnam places on the company. The fund may also consider other factors that Putnam believes will cause the stock price to rise. The fund invests mainly in midsized and large companies, although it can invest in companies of any size. Although we emphasize investments in developed countries, the fund may also invest in companies located in emerging markets. Putnam Income Fund The fund seeks high current income consistent with what Putnam believes to be prudent risk. The fund invests mainly in bonds that are obligations of companies and governments worldwide denominated in U.S. dollars, are either investment-grade or below investment-grade (junk bonds), and have intermediate- to long-term maturities (three years or longer). Putnam Money Market Fund The fund seeks as high a rate of current income as Putnam Management believes is consistent with preservation of capital and maintenance of liquidity. The fund invests mainly in instruments that are high quality and have short-term maturity. Money market funds are not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other governmental agency. Although the fund seeks to maintain a constant share price of $1.00, it is possible to lose money by investing in the fund.
- --------------------------------------------------------------------------------------------------- Allocations by Fund as of 1/31/05 - --------------------------------------------------------------------------------------------------- Putnam Putnam Putnam Putnam Fund for Capital International Putnam Putnam Money Growth and Opportunities Equity Voyager Income Market Income Fund Fund Fund Fund Fund - --------------------------------------------------------------------------------------------------- RetirementReady Fund - --------------------------------------------------------------------------------------------------- 2045 Fund 24.9% 15.1% 30.7% 24.5% 3.9% 0.9% - --------------------------------------------------------------------------------------------------- 2040 Fund 25.0% 15.2% 29.8% 24.7% 4.9% 0.4% - --------------------------------------------------------------------------------------------------- 2035 Fund 24.0% 14.2% 27.8% 23.6% 7.8% 2.6% - --------------------------------------------------------------------------------------------------- 2030 Fund 23.0% 13.2% 25.7% 22.7% 11.7% 3.7% - --------------------------------------------------------------------------------------------------- 2025 Fund 22.1% 12.2% 23.7% 21.7% 14.6% 5.7% - --------------------------------------------------------------------------------------------------- 2020 Fund 21.1% 11.2% 17.6% 20.8% 20.6% 8.7% - --------------------------------------------------------------------------------------------------- 2015 Fund 18.3% 10.3% 11.5% 17.9% 28.5% 13.5% - --------------------------------------------------------------------------------------------------- 2010 Fund 13.3% 7.2% 4.2% 13.0% 38.8% 23.5% - --------------------------------------------------------------------------------------------------- Maturity Fund 10.3% 5.2% -- 10.0% 45.1% 29.4% - ---------------------------------------------------------------------------------------------------
Percentages based on market value. Portfolio composition will vary over time. Due to rounding, percentages may not equal 100%. The outlook for your fund The following commentary reflects anticipated developments that could affect your fund over the next six months, as well as your management team's plans for responding to them. Management believes that 2005 will bear much more of a resemblance to the first three quarters of 2004 than the last. We feel it is highly unlikely that the strategy of simply "being in the market," which has worked for the last two years, will continue to pay off. While we believe stocks will record a positive return for the year, gains will not necessarily come from all market-caps and investment styles. Rather, we foresee a "rotation to quality" as stocks with solid earnings and healthy balance sheets begin to outperform their higher-volatility counterparts. On a geographical basis, we believe the dollar will remain weak, if not weaken further, while international markets remain strong on an absolute level. International exposure will likely be a key component of generating solid returns. Domestically, the tightening policy the Fed has put into effect will begin to create a more challenging environment for both stocks and bonds, we believe. We find the high-yield sector less attractive now than in recent months, although yield will likely remain an important component of any fixed-income investment strategy. In this type of environment, we feel broad-based diversification and active management will be vital to performance, and that your fund's ability to deliver both through its investment in a diverse group of actively-managed underlying funds will position it well for the coming months. The views expressed in this report are exclusively those of Putnam Management. They are not meant as investment advice. The underlying Putnam funds can invest in international investments, which involve risks such as currency fluctuations, economic instability, and political developments. The underlying Putnam funds can invest some or all of their assets in small and/or midsize companies and such investments increase the risk of greater price fluctuations. The underlying Putnam funds can also have a significant portion of their holdings in bonds. Mutual funds that invest in bonds are subject to certain risks, including interest-rate risk, credit risk, and inflation risk. As interest rates rise, the prices of bonds fall. Long-term bonds have more exposure to interest-rate risk than short-term bonds. Lower-rated bonds may offer higher yields in return for more risk. Unlike bonds, bond funds have ongoing fees and expenses. These risks apply to any underlying Putnam fund with a significant portion of its assets invested in bonds. A 2% short-term trading fee may be imposed on shares exchanged or sold within 5 days of purchase. Your fund's management Your fund is managed by the members of the Putnam Global Asset Allocation Team. Jeffrey Knight is the Portfolio Leader, and Robert Kea, Bruce MacDonald, and Robert Schoen are Portfolio Members. The Portfolio Leader and Portfolio Members coordinate the management of the funds. Fund manager compensation The total 2004 fund manager compensation that is attributable to the funds is approximately $230,000. This amount includes a portion of 2004 compensation paid by Putnam Management to the fund managers listed in this section for their portfolio management responsibilities, calculated based on the fund assets they manage as a percentage of the total assets they manage. The compensation amount also includes a portion of the 2004 compensation paid to the Chief Investment Officer of the team for his oversight responsibilities, calculated based on the fund assets he oversees taken as a percentage of the total assets he oversees. These percentages are determined as of the funds' fiscal period-end. For personnel who joined Putnam Management during or after 2004, the calculation reflects annualized 2004 compensation or an estimate of 2005 compensation, as applicable. Other Putnam funds managed by the Portfolio Leader and Portfolio Members Jeffrey Knight is also a Portfolio Leader of the Putnam Asset Allocation Funds: Growth, Balanced and Conservative Portfolios and a Portfolio Member of The George Putnam Fund of Boston. Robert Kea, Bruce MacDonald, and Robert Schoen are also Portfolio Members of the Putnam Asset Allocation Funds: Growth, Balanced and Conservative Portfolios. Jeffrey Knight, Robert Kea, Bruce MacDonald, and Robert Schoen may also manage other accounts and variable trust funds advised by Putnam Management or an affiliate. Changes in your fund's Portfolio Leader and Portfolio Members Your fund's Portfolio Leader and Portfolio Members did not change during the period ended January 31, 2005. Fund ownership Your fund's Portfolio Leader and Portfolio Members, as well as the members of Putnam's Executive Board, each invest in one or more of the seven mutual funds that underlie the Putnam RetirementReady Funds. Understanding 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 information below, 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. Expense information also does not include the fees and expenses of the underlying Putnam mutual funds in which the RetirementReady funds invest. For more information, see your fund's prospectus or talk to your financial advisor. Review your fund's expenses The table that begins below shows the expenses you would have paid on a $1,000 investment in each of the RetirementReady Funds from November 1, 2004, the funds' inception date, to the funds' first fiscal period-end, January 31, 2005. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses. You may use the information in this table to estimate the expenses that you paid over the period. Simply divide your account value by $1,000, and then multiply the result by the number in the first line ("Expenses paid per $1,000") for the class of shares you own.
- ----------------------------------------------------------------------------------------------------------------- EXPENSES AND VALUE OF A $1,000 INVESTMENT assuming actual returns from the funds' inception, 11/1/04, to 1/31/05 - ----------------------------------------------------------------------------------------------------------------- RetirementReady Fund Class A Class B Class C Class M Class R - ----------------------------------------------------------------------------------------------------------------- 2045 Fund Fund Expenses paid per $1,000* $0.91 $2.86 $2.86 $2.21 $1.56 Ending value (after expenses) $1,062.50 $1,060.50 $1,060.50 $1,061.20 $1,061.90 - ----------------------------------------------------------------------------------------------------------------- 2040 Fund Fund Expenses paid per $1,000* $0.91 $2.85 $2.85 $2.21 $1.56 Ending value (after expenses) $1,061.30 $1,059.40 $1,059.40 $1,059.90 $1,060.70 - ----------------------------------------------------------------------------------------------------------------- 2035 Fund Fund Expenses paid per $1,000* $0.91 $2.85 $2.85 $2.20 $1.56 Ending value (after expenses) $1,058.20 $1,056.40 $1,056.30 $1,057.00 $1,057.50 - -----------------------------------------------------------------------------------------------------------------
* 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 net assets for the period from 11/1/04 to 1/31/05. The expense ratio may differ for each share class (see the next table in this section). 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. Expenses do not reflect expenses of the underlying funds in which the funds invest.
- ----------------------------------------------------------------------------------------------------------------- EXPENSES AND VALUE OF A $1,000 INVESTMENT assuming actual returns from the funds' inception, 11/1/04, to 1/31/05 - ----------------------------------------------------------------------------------------------------------------- RetirementReady Fund Class A Class B Class C Class M Class R - ----------------------------------------------------------------------------------------------------------------- 2030 Fund Fund Expenses paid per $1,000* $0.91 $2.85 $2.85 $2.20 $1.55 Ending value (after expenses) $1,055.30 $1,053.10 $1,053.10 $1,053.80 $1,054.60 - ----------------------------------------------------------------------------------------------------------------- 2025 Fund Fund Expenses paid per $1,000* $0.91 $2.84 $2.84 $2.20 $1.55 Ending value (after expenses) $1,051.90 $1,049.90 $1,050.00 $1,050.60 $1,051.20 - ----------------------------------------------------------------------------------------------------------------- 2020 Fund Fund Expenses paid per $1,000* $0.90 $2.83 $2.83 $2.19 $1.55 Ending value (after expenses) $1,045.20 $1,043.20 $1,043.20 $1,043.90 $1,044.50 - ----------------------------------------------------------------------------------------------------------------- 2015 Fund Fund Expenses paid per $1,000* $0.90 $2.82 $2.82 $2.18 $1.54 Ending value (after expenses) $1,036.80 $1,035.10 $1,035.10 $1,035.80 $1,036.50 - ----------------------------------------------------------------------------------------------------------------- 2010 Fund Fund Fund Expenses paid per $1,000* $0.89 $2.80 $2.80 $2.17 $1.53 Ending value (after expenses) $1,024.70 $1,022.90 $1,022.80 $1,023.40 $1,024.10 - ----------------------------------------------------------------------------------------------------------------- Maturity Fund Expenses paid per $1,000* $0.89 $2.79 $2.79 $2.16 $1.52 Ending value (after expenses) $1,017.30 $1,015.30 $1,015.30 $1,016.00 $1,016.60 - -----------------------------------------------------------------------------------------------------------------
Compare your fund's expenses with those of other funds The Securities and Exchange Commission (SEC) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund's expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total costs) of investing in the fund with those of other funds. All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.
- ----------------------------------------------------------------------------------------------------------------- EXPENSES AND VALUE OF A $1,000 INVESTMENT+ assuming a hypothetical 5% annualized return from the funds' inception, 11/1/04, to 1/31/05 - ----------------------------------------------------------------------------------------------------------------- RetirementReady Fund Class A Class B Class C Class M Class R - ----------------------------------------------------------------------------------------------------------------- 2045 Fund Fund Expenses paid per $1,000* $0.89 $2.79 $2.79 $2.15 $1.52 Ending value (after expenses) $1,011.72 $1,009.83 $1,009.83 $1,010.46 $1,011.09 Annualized expense ratio 0.35% 1.10% 1.10% 0.85% 0.60% - ----------------------------------------------------------------------------------------------------------------- 2040 Fund Fund Expenses paid per $1,000* $0.89 $2.79 $2.79 $2.15 $1.52 Ending value (after expenses) $1,011.72 $1,009.83 $1,009.83 $1,010.46 $1,011.09 Annualized expense ratio 0.35% 1.10% 1.10% 0.85% 0.60% - ----------------------------------------------------------------------------------------------------------------- 2035 Fund Fund Expenses paid per $1,000* $0.89 $2.79 $2.79 $2.15 $1.52 Ending value (after expenses) $1,011.72 $1,009.83 $1,009.83 $1,010.46 $1,011.09 Annualized expense ratio 0.35% 1.10% 1.10% 0.85% 0.60% - ----------------------------------------------------------------------------------------------------------------- 2030 Fund Fund Expenses paid per $1,000* $0.89 $2.79 $2.79 $2.15 $1.52 Ending value (after expenses) $1,011.72 $1,009.83 $1,009.83 $1,010.46 $1,011.09 Annualized expense ratio 0.35% 1.10% 1.10% 0.85% 0.60% - ----------------------------------------------------------------------------------------------------------------- 2025 Fund Fund Expenses paid per $1,000* $0.89 $2.79 $2.79 $2.15 $1.52 Ending value (after expenses) $1,011.72 $1,009.83 $1,009.83 $1,010.46 $1,011.09 Annualized expense ratio 0.35% 1.10% 1.10% 0.85% 0.60% - -----------------------------------------------------------------------------------------------------------------
* Expenses for each share class are calculated using the fund's annualized expense ratio for each class, which represents the ongoing expenses as a percentage of net assets for the period from 11/1/04 to 1/31/05. 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. Expenses do not reflect expenses of the underlying Putnam funds in which the funds invest. + During the period from 11/1/04 to 1/31/05, your fund limited its expenses; had it not done so, expenses would have been higher.
- ----------------------------------------------------------------------------------------------------------------- EXPENSES AND VALUE OF A $1,000 INVESTMENT+ assuming a hypothetical 5% annualized return from the funds' inception, 11/1/04 to 1/31/05 - ----------------------------------------------------------------------------------------------------------------- RetirementReady Fund Class A Class B Class C Class M Class R - ----------------------------------------------------------------------------------------------------------------- 2020 Fund Fund Expenses paid per $1,000* $0.89 $2.79 $2.79 $2.15 $1.52 Ending value (after expenses) $1,011.72 $1,009.83 $1,009.83 $1,010.46 $1,011.09 Annualized expense ratio 0.35% 1.10% 1.10% 0.85% 0.60% - ----------------------------------------------------------------------------------------------------------------- 2015 Fund Fund Expenses paid per $1,000* $0.89 $2.79 $2.79 $2.15 $1.52 Ending value (after expenses) $1,011.72 $1,009.83 $1,009.83 $1,010.46 $1,011.09 Annualized expense ratio 0.35% 1.10% 1.10% 0.85% 0.60% - ----------------------------------------------------------------------------------------------------------------- 2010 Fund Fund Expenses paid per $1,000* $0.89 $2.79 $2.79 $2.15 $1.52 Ending value (after expenses) $1,011.72 $1,009.83 $1,009.83 $1,010.46 $1,011.09 Annualized expense ratio 0.35% 1.10% 1.10% 0.85% 0.60% - ----------------------------------------------------------------------------------------------------------------- Maturity Fund Expenses paid per $1,000* $0.89 $2.79 $2.79 $2.15 $1.52 Ending value (after expenses) $1,011.72 $1,009.83 $1,010.15 $1,010.46 $1,011.09 Annualized expense ratio 0.35% 1.10% 1.10% 0.85% 0.60% - -----------------------------------------------------------------------------------------------------------------
Terms and definitions 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. Net asset value (NAV) is the price, or value, of one share of a mutual fund, without a sales charge. NAVs fluctuate with market conditions. NAV is calculated by dividing the net assets of each class of shares by the number of outstanding shares in the class. Public offering price (POP) is the price of a mutual fund share plus the maximum sales charge levied at the time of purchase. POP performance figures shown here assume the 5.25% maximum sales charge for class A shares and 3.50% for class M shares. Contingent deferred sales charge (CDSC) is 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 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. Class A shares are generally subject to an initial sales charge and no sales charge on redemption (except on certain redemptions of shares bought without an initial sales charge). Class B shares may be subject to a sales charge upon redemption. Class C shares are not subject to an initial sales charge and are subject to a contingent deferred sales charge 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 sales charge on redemption (except on certain redemptions of shares bought without an initial sales charge). Class R shares are not subject to an initial sales charge or CDSC and are available only to certain defined contribution plans. Comparative indexes JP Morgan Developed High Yield Index is an unmanaged index of high-yield fixed-income securities issued in developed countries. Lehman Aggregate Bond Index is an unmanaged index of U.S. investment-grade fixed-income securities. Lehman Credit Index is an unmanaged index of investment-grade corporate bonds. Morgan Stanley Capital International (MSCI) EAFE Index is an unmanaged index of equity securities from developed countries in Western Europe, the Far East, and Australasia. Morgan Stanley Capital International (MSCI) EMF Index is an unmanaged index of equity securities from emerging markets available to non-U.S. investors. Russell 3000 Index is an unmanaged index of the 3,000 largest U.S. companies. S&P 500 Index is an unmanaged index of common stock performance. Indexes assume reinvestment of all distributions and do not account for fees. Securities and performance of a fund and an index will differ. You cannot invest directly in an index. Trustee approval of management contract The Board of Trustees of the Putnam funds oversees the management of each fund and, as required by law, approves each fund's management contract with Putnam Management. In approving your fund's management contract, the Board of Trustees, with the assistance of its Contract Committee consisting solely of Independent Trustees, requests and evaluates all information it deems reasonably necessary under the circumstances. The Contract Committee reviewed the information provided by Putnam Management and other information developed with the assistance of the Board's independent counsel and independent staff. The Contract Committee reviewed and discussed key aspects of this information with all of the Independent Trustees. Upon completion of this review, the Contract Committee recommended and the Independent Trustees approved your fund's management contract, effective June 11, 2004. The Trustees considered numerous factors they believe relevant in approving your fund's management contract. The Trustees considered the quality of the investment management services expected to be provided by Putnam Management, based in part on Putnam Management's experience and investment performance managing other target retirement products over the one-year and year-to-date periods ended March 31, 2004, relative to certain competitors. The Trustees also considered the rationale behind the selection of the underlying Putnam funds in which your fund invests, including the performance record of these funds. The Trustees also considered the quality and incremental value of the asset allocation and other services to be provided by Putnam Management to your fund, including Putnam's shareholder servicing arrangements. The Trustees considered the experience and skills of the individuals comprising Putnam Management's Global Asset Allocation Team, including the individuals listed under "Your fund's management" in this report, noting the resources that Putnam Management has made available to such personnel and, in general, the ability of Putnam Management to attract and retain high-quality personnel. The Trustees reviewed the proposed management fee for your fund and the proposed voluntary expense limitation to be implemented through your fund's first fiscal year. The Trustees also considered the management fees of the underlying funds in which your fund would invest, and other direct and indirect benefits expected to be received by Putnam Management and its affiliates as a result of their relationships with your fund. With respect to their evaluation of the proposed management fees, the Trustees reviewed an analysis of the fees of other target retirement mutual funds prepared by Putnam Management, taking into consideration the fees of the underlying funds as well as the fund-of funds. Based on this evaluation, the Trustees believe that the proposed fee schedule for your fund represents reasonable compensation in light of the nature and quality of the services to be provided to your fund and the fees paid by competitive funds. This conclusion was based on a comprehensive consideration of all information provided to the Trustees and was not the result of any single factor. Other information for shareholders A note about duplicate mailings In response to investors' requests, the SEC has modified mailing regulations for proxy statements, semiannual and annual reports, and prospectuses. Putnam is now able to send a single copy of these materials to customers who share the same address. This change will automatically apply to all shareholders except those who notify us. If you would prefer to receive your own copy, please call Putnam at 1-800-225-1581. 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 are available on the Putnam Individual Investor Web site, www.putnaminvestments.com/individual, and on the SEC's Web site, www.sec.gov. If you have questions about finding forms on the SEC's Web site, 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 For periods ending on or after July 9, 2004, 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-Q. Shareholders may obtain the fund's Forms N-Q on the SEC's Web site at www.sec.gov. In addition, the fund's Forms N-Q may be reviewed and copied at the SEC's public reference room in Washington, D.C. You may call the SEC at 1-800-SEC-0330 for information about the SEC's Web site or the operation of the public reference room. This page intentionally left blank.
The funds' portfolios January 31, 2005 (Unaudited) 2045 2040 2035 Fund Fund Fund EQUITY FUNDS* 94.4% 94.2% 89.4% - ------------------------------------------------------------------------------------------------------------------------------ Shares Value Shares Value Shares Value ............................................................................................................................... The Putnam Fund for Growth and Income 136,058 $2,591,894 215,903 $4,112,951 446,858 $8,512,647 ............................................................................................................................... Putnam Capital Opportunities Fund 133,811 1,576,295 212,123 2,498,794 427,192 5,032,320 ............................................................................................................................... Putnam International Equity Fund 137,099 3,198,529 210,211 4,904,209 422,599 9,859,253 ............................................................................................................................... Putnam Voyager Fund 154,482 2,553,584 245,220 4,053,502 507,412 8,387,518 - ------------------------------------------------------------------------------------------------------------------------------ Total Equity Funds (cost $9,682,620, $15,182,186, $30,922,001) $9,920,302 $15,569,456 $31,791,738 - ------------------------------------------------------------------------------------------------------------------------------ FIXED INCOME FUNDS* 4.8% 5.3% 10.4% - ------------------------------------------------------------------------------------------------------------------------------ Shares Value Shares Value Shares Value ............................................................................................................................... Putnam Income Fund 58,673 406,012 116,396 805,465 400,462 2,771,193 ............................................................................................................................... Putnam Money Market Fund 98,687 98,687 70,184 70,184 936,241 936,241 - ------------------------------------------------------------------------------------------------------------------------------ Total Fixed Income Funds (cost $503,240, $872,848, $3,698,134) $504,699 $875,649 $3,707,434 - ------------------------------------------------------------------------------------------------------------------------------ Total Investments $10,425,001 $16,445,105 $35,499,172 - ------------------------------------------------------------------------------------------------------------------------------ Cost of Investments (Note 1) $10,185,860 $16,055,034 $34,620,135 - ------------------------------------------------------------------------------------------------------------------------------ * Percentages indicated are based on net assets of $10,509,210, $16,527,869 and $35,577,047, respectively. The accompanying notes are an integral part of these financial statements. 2030 2025 2020 Fund Fund Fund EQUITY FUNDS* 84.5% 79.6% 70.7% - ------------------------------------------------------------------------------------------------------------------------------ Shares Value Shares Value Shares Value ............................................................................................................................... The Putnam Fund for Growth and Income 647,831 $12,341,170 1,075,818 $20,494,340 1,141,457 $21,744,754 ............................................................................................................................... Putnam Capital Opportunities Fund 599,971 7,067,661 962,457 11,337,742 977,850 11,519,065 ............................................................................................................................... Putnam International Equity Fund 591,889 13,808,779 945,381 22,055,738 776,016 18,104,451 ............................................................................................................................... Putnam Voyager Fund 735,565 12,158,896 1,221,010 20,183,282 1,294,145 21,392,223 - ------------------------------------------------------------------------------------------------------------------------------ Total Equity Funds (cost $44,133,958, $71,876,787, $70,786,848) $45,376,506 $74,071,102 $72,760,493 - ------------------------------------------------------------------------------------------------------------------------------ FIXED INCOME FUNDS* 15.4% 20.3% 29.3% - ------------------------------------------------------------------------------------------------------------------------------ Shares Value Shares Value Shares Value ............................................................................................................................... Putnam Income Fund 908,689 6,288,125 1,967,391 13,614,342 3,067,304 21,225,748 ............................................................................................................................... Putnam Money Market Fund 1,979,846 1,979,846 5,291,392 5,291,392 8,904,837 8,904,837 - ------------------------------------------------------------------------------------------------------------------------------ Total Fixed Income Funds (cost $8,248,071, $18,863,216, $30,058,354) $8,267,971 $18,905,734 $30,130,585 - ------------------------------------------------------------------------------------------------------------------------------ Total Investments $53,644,477 $92,976,836 $102,891,078 - ------------------------------------------------------------------------------------------------------------------------------ Cost of Investments (Note 1) $52,382,029 $90,740,003 $100,845,202 - ------------------------------------------------------------------------------------------------------------------------------ * Percentages indicated are based on net assets of $53,717,959, $93,039,734 and $102,951,348, respectively. The accompanying notes are an integral part of these financial statements. 2015 2010 Maturity Fund Fund Fund EQUITY FUNDS* 58.0% 37.7% 25.4% - ------------------------------------------------------------------------------------------------------------------------------ Shares Value Shares Value Shares Value ............................................................................................................................... The Putnam Fund for Growth and Income 1,145,965 $21,830,618 544,414 $10,371,093 235,329 $4,483,018 ............................................................................................................................... Putnam Capital Opportunities Fund 1,043,572 12,293,272 478,143 5,632,527 191,522 2,256,134 ............................................................................................................................... Putnam International Equity Fund 589,663 13,756,851 140,443 3,276,515 -- -- ............................................................................................................................... Putnam Voyager Fund 1,296,889 21,437,584 614,869 10,163,777 265,809 4,393,814 - ------------------------------------------------------------------------------------------------------------------------------ Total Equity Funds (cost $66,957,302, $28,636,369, $10,890,613) $69,318,325 $29,443,912 $11,132,966 - ------------------------------------------------------------------------------------------------------------------------------ FIXED INCOME FUNDS* 42.0% 62.2% 74.3% - ------------------------------------------------------------------------------------------------------------------------------ Shares Value Shares Value Shares Value ............................................................................................................................... Putnam Income Fund 4,919,612 34,043,712 4,372,893 30,260,422 2,844,789 19,685,937 ............................................................................................................................... Putnam Money Market Fund 16,163,085 16,163,085 18,337,630 18,337,630 12,847,553 12,847,553 - ------------------------------------------------------------------------------------------------------------------------------ Total Fixed Income Funds (cost $50,104,872, $48,490,330, $32,450,566) $50,206,797 $48,598,052 $32,533,490 - ------------------------------------------------------------------------------------------------------------------------------ Total Investments $119,525,122 $78,041,964 $43,666,456 - ------------------------------------------------------------------------------------------------------------------------------ Cost of Investments (Note 1) $117,062,174 $77,126,699 $43,341,179 - ------------------------------------------------------------------------------------------------------------------------------ * Percentages indicated are based on net assets of $119,584,772, $78,107,834 and $43,796,976, respectively. The accompanying notes are an integral part of these financial statements.
Statement of assets and liabilities January 31, 2005 (Unaudited) 2045 2040 2035 Fund Fund Fund - ----------------------------------------------------------------------------------------------------------------- Assets Investments in underlying Putnam Funds, at value (Note 1) $10,425,001 $16,445,105 $35,499,172 Dividends, interest and other receivables 146 86 1,387 Receivable for shares of the fund sold 591,186 1,364,727 2,265,167 Receivable for securities sold 19,799 34,364 24,591 Unamortized offering costs (Note 1) 65,068 65,068 65,068 Receivable from Manager (Note 2) 21,820 22,249 22,519 .................................................................................................................. Total assets 11,123,020 17,931,599 37,877,904 .................................................................................................................. Liabilities Payable for shares of the fund redeemed 19,799 34,365 24,591 Payable for securities purchased 591,327 1,364,810 2,266,506 Payable for distribution fees (Note 2) 889 1,264 2,447 Other accrued expenses 1,795 3,291 7,313 .................................................................................................................. Total liabilities 613,810 1,403,730 2,300,857 .................................................................................................................. Net assets $10,509,210 $16,527,869 $35,577,047 .................................................................................................................. Represented by: Paid-in-capital (Notes 1 and 4) $10,249,273 $16,117,766 $34,636,698 Undistributed net investment income (loss) (Note 1) (17,755) (19,133) (21,500) Accumulated net realized gain (loss) on investments (Note 1) 38,551 39,165 82,812 Net unrealized appreciation of investments 239,141 390,071 879,037 .................................................................................................................. Total -- Representing net assets applicable to capital outstanding $10,509,210 $16,527,869 $35,577,047 .................................................................................................................. Computation of net asset value and offering price Class A Net Assets $4,957,934 $7,525,706 $14,141,167 Number of shares outstanding 74,208 112,528 214,879 Net asset value $66.81 $66.88 $65.81 Offering price per class A share (front-end sales charge of 5.25%) $70.51 $70.59 $69.46 Computation of net asset value Class B Net Assets $1,912 $23,552 $13,781 Number of shares outstanding 29 361 215 Net asset value $65.25 $65.24 $64.01 Computation of net asset value Class C Net Assets $7,853 $1,059 $1,056 Number of shares outstanding 120 16 16 Net asset value $65.25 $65.24 $64.06 Computation of net asset value Class M Net Assets $6,074 $8,100 $11,488 Number of shares outstanding 93 124 179 Net asset value $65.27 $65.21 $64.05 Offering price per class M share (front-end sales charge of 3.50%) $67.64 $67.58 $66.37 Computation of net asset value Class R Net Assets $1,062 $1,061 $1,058 Number of shares outstanding 16 16 17 Net asset value $65.29 $65.27 $64.08 Computation of net asset value Class Y Net Assets $5,534,375 $8,968,391 $21,408,497 Number of shares outstanding 76,325 123,998 300,320 Net asset value $72.51 $72.33 $71.29 .................................................................................................................. Cost of investments (Note 1) $10,185,860 $16,055,034 $34,620,135 - ----------------------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements. 2030 2025 2020 Fund Fund Fund - ----------------------------------------------------------------------------------------------------------------- Assets Investments in underlying Putnam Funds, at value (Note 1) $53,644,477 $92,976,836 $102,891,078 Dividends, interest and other receivables 2,976 8,037 13,899 Receivable for shares of the fund sold 3,250,741 3,929,282 3,609,041 Receivable for securities sold 42,105 34,400 12,642 Unamortized offering costs (Note 1) 65,068 65,068 65,068 Receivable from Manager (Note 2) 23,695 24,539 16,939 .................................................................................................................. Total assets 57,029,062 97,038,162 106,608,667 .................................................................................................................. Liabilities Payable for shares of the fund redeemed 42,105 34,400 12,642 Payable for securities purchased 3,253,617 3,937,044 3,622,473 Payable for distribution fees (Note 2) 3,404 6,284 6,991 Other accrued expenses 11,977 20,700 15,213 .................................................................................................................. Total liabilities 3,311,103 3,998,428 3,657,319 .................................................................................................................. Net assets $53,717,959 $93,039,734 $102,951,348 .................................................................................................................. Represented by: Paid-in-capital (Notes 1 and 4) $52,363,557 $90,643,765 $100,743,276 Undistributed net investment income (loss) (Note 1) (15,552) (5,490) 14,394 Accumulated net realized gain (loss) on investments (Note 1) 107,506 164,626 147,802 Net unrealized appreciation of investments 1,262,448 2,236,833 2,045,876 .................................................................................................................. Total representing net assets applicable to capital outstanding $53,717,959 $93,039,734 $102,951,348 .................................................................................................................. Computation of net asset value and offering price Class A Net Assets $19,534,636 $33,808,340 $36,825,614 Number of shares outstanding 299,718 491,609 583,521 Net asset value $65.18 $68.77 $63.11 Offering price per class A share (front-end sales charge of 5.25%) $68.79 $72.58 $66.61 Computation of net asset value Class B Net Assets $49,754 $54,500 $32,447 Number of shares outstanding 779 816 521 Net asset value $63.90 $66.81 $62.27 Computation of net asset value Class C Net Assets $6,546 $21,875 $29,483 Number of shares outstanding 102 327 473 Net asset value $63.90 $66.88 $62.30 Computation of net asset value Class M Net Assets $28,468 $90,383 $152,947 Number of shares outstanding 446 1,352 2,455 Net asset value $63.89 $66.84 $62.30 Offering price per class M share (front-end sales charge of 3.50%) $66.21 $69.26 $64.56 Computation of net asset value Class R Net Assets $1,055 $1,051 $1,045 Number of shares outstanding 16 16 17 Net asset value $63.94 $66.91 $62.36 Computation of net asset value Class Y Net Assets $34,097,500 $59,063,585 $65,909,812 Number of shares outstanding 486,600 856,982 979,157 Net asset value $70.07 $68.92 $67.31 .................................................................................................................. Cost of investments (Note 1) $52,382,029 $90,740,003 $100,845,202 - ----------------------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements. 2015 2010 Maturity Fund Fund Fund - ----------------------------------------------------------------------------------------------------------------- Assets Investments in underlying Putnam Funds, at value (Note 1) $119,525,122 $78,041,964 $43,666,456 Dividends, interest and other receivables 25,528 29,246 20,404 Receivable for shares of the fund sold 2,127,222 1,469,625 1,064,618 Receivable for securities sold 14,854 119,033 86,380 Unamortized offering costs (Note 1) 65,247 65,247 84,836 Organizational cost (Note 1) -- -- 12,500 Receivable from Manager (Note 2) 15,844 17,535 43,764 .................................................................................................................. Total assets 121,773,817 79,742,650 44,978,958 .................................................................................................................. Liabilities Payable for shares of the fund redeemed 14,854 119,063 86,400 Payable for securities purchased 2,146,482 1,497,891 1,084,339 Payable for distribution fees (Note 2) 7,965 5,917 3,589 Other accrued expenses 19,744 11,945 7,654 .................................................................................................................. Total liabilities 2,189,045 1,634,816 1,181,982 .................................................................................................................. Net assets $119,584,772 $78,107,834 $43,796,976 .................................................................................................................. Represented by: Paid-in-capital (Notes 1 and 4) $116,889,607 $77,057,026 43,427,650 Undistributed net investment income (loss) (Note 1) 51,514 57,725 8,121 Accumulated net realized gain (loss) on investments (Note 1) 180,703 77,818 35,928 Net unrealized appreciation of investments 2,462,948 915,265 325,277 .................................................................................................................. Total representing net assets applicable to capital outstanding $119,584,772 $78,107,834 $43,796,976 .................................................................................................................. Computation of net asset value and offering price Class A Net Assets $39,820,335 $29,559,014 $17,708,645 Number of shares outstanding 615,905 509,854 312,310 Net asset value $64.65 $57.98 $56.70 Offering price per class A share (front-end sales charge of 5.25%) $68.23 $61.19 $59.84 Computation of net asset value Class B Net Assets $6,735 $65,125 $102,066 Number of shares outstanding 105 1,141 1,799 Net asset value $63.93 $57.09 $56.73 Computation of net asset value Class C Net Assets $15,326 $4,685 $1,015 Number of shares outstanding 240 82 18 Net asset value $63.90 $57.11 $56.73 Computation of net asset value Class M Net Assets $73,842 $1,023 $1,016 Number of shares outstanding 1,155 18 18 Net asset value $63.95 $57.14 $56.73 Offering price per class M share (front-end sales charge of 3.50%) $66.27 $59.21 $58.79 Computation of net asset value Class R Net Assets $1,037 $1,024 $1,017 Number of shares outstanding 16 18 18 Net asset value $64.01 $57.16 $56.73 Computation of net asset value Class Y Net Assets $79,667,497 $48,476,963 $25,983,217 Number of shares outstanding 1,230,063 801,986 457,209 Net asset value $64.77 $60.45 $56.83 .................................................................................................................. Cost of investments (Note 1) $117,062,174 $77,126,699 $43,341,179 - ----------------------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements.
Statement of operations For the period ended January 31, 2005* (Unaudited) 2045 2040 2035 Fund Fund Fund - ----------------------------------------------------------------------------------------------------------------- Investment income Income distributions from underlying funds $46,021 $72,302 $161,336 .................................................................................................................. Expenses (Note 2) Compensation of Manager (Note 2) 951 1,485 3,361 Distribution fees (Note 2) 1,993 3,136 6,182 Audit fees 355 841 1,953 Registration fees 1,206 1,897 4,076 Other fees 234 553 1,283 Amortization of offering costs (Note 1) 21,928 21,928 21,928 Fees waived and reimbursed by Manager (Note 2) (22,771) (23,734) (25,879) .................................................................................................................. Total expenses 3,896 6,106 12,904 .................................................................................................................. Net investment income 42,125 66,196 148,432 .................................................................................................................. Net realized gain on sale of underlying fund shares 38,551 39,165 82,812 Net unrealized appreciation of underlying fund shares 239,141 390,071 879,037 .................................................................................................................. Net gain on investments 277,692 429,236 961,849 .................................................................................................................. Net increase in net assets resulting from operations $319,817 $495,432 $1,110,281 - ----------------------------------------------------------------------------------------------------------------- * Commencement of operations November 1, 2004. The accompanying notes are an integral part of these financial statements. 2030 2025 2020 Fund Fund Fund - ----------------------------------------------------------------------------------------------------------------- Investment income Income distributions from underlying funds $242,099 $428,596 $440,758 .................................................................................................................. Expenses (Note 2) Compensation of Manager (Note 2) 5,105 9,030 10,101 Distribution fees (Note 2) 9,187 16,430 17,979 Audit fees 3,510 6,054 6,769 Registration fees 6,163 10,669 3,996 Other fees 2,306 3,978 4,448 Amortization of offering costs (Note 1) 21,928 21,928 21,928 Fees waived and reimbursed by Manager (Note 2) (28,801) (33,569) (27,040) .................................................................................................................. Total expenses 19,398 34,520 38,181 .................................................................................................................. Net investment income 222,701 394,076 402,577 .................................................................................................................. Net realized gain on sale of underlying fund shares 107,506 164,626 147,802 Net unrealized appreciation of underlying fund shares 1,262,448 2,236,833 2,045,876 .................................................................................................................. Net gain on investments 1,369,954 2,401,459 2,193,678 .................................................................................................................. Net increase in net assets resulting from operations $1,592,655 $2,795,535 $2,596,255 - ----------------------------------------------------------------------------------------------------------------- * Commencement of operations November 1, 2004. The accompanying notes are an integral part of these financial statements. 2015 2010 Maturity Fund Fund Fund - ----------------------------------------------------------------------------------------------------------------- Investment income Income distributions from underlying funds $538,657 $324,416 $173,659 .................................................................................................................. Expenses (Note 2) Compensation of Manager (Note 2) 12,825 8,082 4,417 Distribution fees (Note 2) 21,099 15,499 8,889 Audit fees 9,179 5,404 3,601 Registration fees 4,535 2,990 1,685 Other fees 6,033 3,550 2,367 Amortization of offering costs (Note 1) 21,749 21,749 32,445 Organizational cost (Note 1) -- -- 12,500 Fees waived and reimbursed by Manager (Note 2) (28,669) (25,617) (48,181) .................................................................................................................. Total expenses 46,751 31,657 17,723 .................................................................................................................. Net investment income 491,906 292,759 155,936 .................................................................................................................. Net realized gain on sale of underlying fund shares 180,703 77,818 35,928 Net unrealized appreciation of underlying fund shares 2,462,948 915,265 325,277 .................................................................................................................. Net gain on investments 2,643,651 993,083 361,205 .................................................................................................................. Net increase in net assets resulting from operations $3,135,557 $1,285,842 $517,141 - ----------------------------------------------------------------------------------------------------------------- * Commencement of operations November 1, 2004. The accompanying notes are an integral part of these financial statements.
Statement of changes in net assets For the period ended January 31, 2005* (Unaudited) 2045 2040 2035 Fund Fund Fund - ----------------------------------------------------------------------------------------------------------------- Increase in net assets Operations: Net investment income $42,125 $66,196 $148,432 Net realized gain on underlying fund shares 38,551 39,165 82,812 Net unrealized appreciation on underlying fund shares 239,141 390,071 879,037 .................................................................................................................. Net increase in net assets resulting from operations 319,817 495,432 1,110,281 .................................................................................................................. Distributions to shareholders from net investment income (Note 1) Class A (26,219) (40,513) (70,868) Class B (8) (7) (86) Class C (8) (7) (6) Class M (9) (48) (21) Class R (9) (8) (7) Class Y (33,627) (44,746) (98,944) Increase from capital share transactions (Note 4) 10,249,273 16,117,766 34,636,698 .................................................................................................................. Total increase in net assets 10,509,210 16,527,869 35,577,047 .................................................................................................................. Net assets: Beginning of period -- -- -- .................................................................................................................. End of period $10,509,210 $16,527,869 $35,577,047 - ----------------------------------------------------------------------------------------------------------------- * Commencement of operations November 1, 2004. The accompanying notes are an integral part of these financial statements. 2030 2025 2020 Fund Fund Fund - ----------------------------------------------------------------------------------------------------------------- Increase in net assets Operations: Net investment income $222,701 $394,076 $402,577 Net realized gain on underlying fund shares 107,506 164,626 147,802 Net unrealized appreciation on underlying fund shares 1,262,448 2,236,833 2,045,876 .................................................................................................................. Net increase in net assets resulting from operations 1,592,655 2,795,535 2,596,255 .................................................................................................................. Distributions to shareholders from net investment income (Note 1) Class A (98,122) (156,581) (155,610) Class B (6) (79) (90) Class C (6) (5) (14) Class M (19) (210) (151) Class R (6) (6) (5) Class Y (140,095) (242,685) (232,313) Increase from capital share transactions (Note 4) 52,363,558 90,643,765 100,743,276 .................................................................................................................. Total increase in net assets 53,717,959 93,039,734 102,951,348 .................................................................................................................. Net assets: Beginning of period -- -- -- .................................................................................................................. End of period $53,717,959 $93,039,734 $102,951,348 - ----------------------------------------------------------------------------------------------------------------- * Commencement of operations November 1, 2004. The accompanying notes are an integral part of these financial statements. 2015 2010 Maturity Fund Fund Fund - ----------------------------------------------------------------------------------------------------------------- Increase in net assets Operations: Net investment income $491,906 $292,759 $155,936 Net realized gain on underlying fund shares 180,703 77,818 35,928 Net unrealized appreciation on underlying fund shares 2,462,948 915,265 325,277 .................................................................................................................. Net increase in net assets resulting from operations 3,135,557 1,285,842 517,141 .................................................................................................................. Distributions to shareholders from net investment income (Note 1) Class A (151,730) (100,806) (55,792) Class B (23) (9) (232) Class C (46) (5) (2) Class M (71) (3) (3) Class R (4) (3) (4) Class Y (288,518) (134,208) (91,782) Increase from capital share transactions (Note 4) 116,889,607 77,057,026 43,327,650 .................................................................................................................. Total increase in net assets 119,584,772 78,107,834 43,696,976 .................................................................................................................. Net assets: Beginning of period (Note 5) -- -- 100,000 .................................................................................................................. End of period $119,584,772 $78,107,834 $43,796,976 - ----------------------------------------------------------------------------------------------------------------- * Commencement of operations November 1, 2004. The accompanying notes are an integral part of these financial statements.
Financial highlights (For a common share outstanding throughout the period) CLASS A - --------------------------------------------------------------------------------------------------------------------------------- Investment Operations Net Net Realized and Net Asset Unrealized Asset Value, Net Gain (Loss) Total from Value, Beginning Investment on Investment Total End Period ended of Period Income (a) Investments Operations Distributions of Period - --------------------------------------------------------------------------------------------------------------------------------- Putnam Retirement Ready 2045 Fund January 31, 2005** + $63.42 $0.34 $3.63 $3.97 $(0.58) $66.81 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2040 Fund January 31, 2005** + 63.50 0.36 3.54 3.90 (0.52) 66.88 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2035 Fund January 31, 2005** + 62.61 0.35 3.30 3.65 (0.45) 65.81 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2030 Fund January 31, 2005** + 62.16 0.35 3.09 3.44 (0.42) 65.18 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2025 Fund January 31, 2005** + 65.75 0.37 3.05 3.42 (0.40) 68.77 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2020 Fund January 31, 2005** + 60.69 0.30 2.45 2.75 (0.33) 63.11 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2015 Fund January 31, 2005** + 62.62 0.29 2.02 2.31 (0.28) 64.65 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2010 Fund January 31, 2005** + 56.79 0.24 1.17 1.41 (0.22) 57.98 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady Maturity Fund January 31, 2005** + 55.96 0.22 0.75 0.97 (0.23) 56.70 - --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- Ratios and Supplemental Data Total Ratio of Net Investment Ratio of Investment Return at Net Assets, Expenses Income (Loss) Net Asset End of Period to Average Net to Average Portfolio Period ended Value (%)(b) (in thousands) Assets (%)(c)(d) Net Assets (%)(d) Turnover (%) - --------------------------------------------------------------------------------------------------------------------------------- Putnam Retirement Ready 2045 Fund January 31, 2005** + 6.25* $4,958 0.09* 0.54* 8.56* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2040 Fund January 31, 2005** + 6.13* 7,526 0.09* 0.59* 6.34* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2035 Fund January 31, 2005** + 5.82* 14,141 0.09* 0.58* 5.97* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2030 Fund January 31, 2005** + 5.53* 19,535 0.09* 0.57* 5.35* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2025 Fund January 31, 2005** + 5.19* 33,808 0.09* 0.56* 4.87* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2020 Fund January 31, 2005** + 4.52* 36,826 0.09* 0.51* 5.10* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2015 Fund January 31, 2005** + 3.68* 39,820 0.09* 0.47* 5.74* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2010 Fund January 31, 2005** + 2.47* 29,559 0.09* 0.44* 6.75* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady Maturity Fund January 31, 2005** + 1.73* 17,709 0.09* 0.42* 8.89* - ---------------------------------------------------------------------------------------------------------------------------------
+ Unaudited. * Not annualized. ** For the period November 1, 2004 (commencement of operations) to January 31, 2005. (a) Per share net investment income (loss) has been determined on the basis of the weighted average number of shares outstanding during the period. (b) Total return does not reflect the effect of sales charges. (c) Expense ratios do not include expenses of the underlying funds. (d) Reflects an involuntary contractual expense limitation in effect during the period. As a result of such limitation the expenses for the period ended January 31, 2005 reflect a reduction of the following based on each fund's average net assets. 1/31/05 ------------ Putnam RetirementReady 2045 Fund 0.30% Putnam RetirementReady 2040 Fund 0.20 Putnam RetirementReady 2035 Fund 0.10 Putnam RetirementReady 2030 Fund 0.07 Putnam RetirementReady 2025 Fund 0.05 Putnam RetirementReady 2020 Fund 0.03 Putnam RetirementReady 2015 Fund 0.03 Putnam RetirementReady 2010 Fund 0.04 Putnam RetirementReady Maturity Fund 0.14 The accompanying notes are an integral part of these financial statements.
Financial highlights (Continued) (For a common share outstanding throughout the period) CLASS B - --------------------------------------------------------------------------------------------------------------------------------- Investment Operations Net Net Realized and Net Asset Net Unrealized Asset Value, Investment Gain (Loss) Total from Value, Beginning Income on Investment Total End Period ended of Period (Loss) (a) Investments Operations Distributions of Period - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2045 Fund January 31, 2005** + $62.00 $0.18 $3.58 $3.76 $(0.51) $65.25 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2040 Fund January 31, 2005** + 62.00 0.25 3.44 3.69 (0.45) 65.24 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2035 Fund January 31, 2005** + 61.00 0.36 3.09 3.45 (0.44) 64.01 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2030 Fund January 31, 2005** + 61.00 0.30 2.95 3.25 (0.35) 63.90 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2025 Fund January 31, 2005** + 64.00 0.05 3.15 3.20 (0.39) 66.81 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2020 Fund January 31, 2005** + 60.00 0.20 2.39 2.59 (0.32) 62.27 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2015 Fund January 31, 2005** + 62.00 0.20 1.98 2.18 (0.25) 63.93 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2010 Fund January 31, 2005** + 56.00 0.07 1.22 1.29 (0.20) 57.09 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady Maturity Fund January 31, 2005** + 56.00 0.12 0.74 0.86 (0.13) 56.73 - --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- Ratios and Supplemental Data Total Ratio of Net Investment Ratio of Investment Return at Net Assets, Expenses Income (Loss) Net Asset End of Period to Average Net to Average Portfolio Period ended Value (%)(b) (in thousands) Assets (%)(c)(d) Net Assets (%)(d) Turnover (%) - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2045 Fund January 31, 2005** + 6.05* $2 0.28* 0.26* 8.56* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2040 Fund January 31, 2005** + 5.94* 24 0.28* 0.38* 6.34* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2035 Fund January 31, 2005** + 5.64* 14 0.28* 0.52* 5.97* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2030 Fund January 31, 2005** + 5.31* 50 0.28* 0.21* 5.35* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2025 Fund January 31, 2005** + 4.99* 55 0.28* 0.13* 4.87* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2020 Fund January 31, 2005** + 4.32* 32 0.28* 0.35* 5.10* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2015 Fund January 31, 2005** + 3.51* 7 0.28* 0.34* 5.74* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2010 Fund January 31, 2005** + 2.29* 65 0.28* 0.16* 6.75* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady Maturity Fund January 31, 2005** + 1.53* 102 0.28* 0.22* 8.89* - ---------------------------------------------------------------------------------------------------------------------------------
+ Unaudited. * Not annualized. ** For the period November 1, 2004 (commencement of operations) to January 31, 2005. (a) Per share net investment income (loss) has been determined on the basis of the weighted average number of shares outstanding during the period. (b) Total return does not reflect the effect of sales charges. (c) Expense ratios do not include expenses of the underlying funds. (d) Reflects an involuntary contractual expense limitation in effect during the period. As a result of such limitation the expenses for the period ended January 31, 2005 reflect a reduction of the following based on each fund's average net assets. 1/31/05 ------------ Putnam RetirementReady 2045 Fund 0.30% Putnam RetirementReady 2040 Fund 0.20 Putnam RetirementReady 2035 Fund 0.10 Putnam RetirementReady 2030 Fund 0.07 Putnam RetirementReady 2025 Fund 0.05 Putnam RetirementReady 2020 Fund 0.03 Putnam RetirementReady 2015 Fund 0.03 Putnam RetirementReady 2010 Fund 0.04 Putnam RetirementReady Maturity Fund 0.14 The accompanying notes are an integral part of these financial statements.
Financial highlights (Continued) (For a common share outstanding throughout the period) CLASS C - --------------------------------------------------------------------------------------------------------------------------------- Investment Operations Net Net Realized and Net Asset Net Unrealized Asset Value, Investment Gain (Loss) Total from Value, Beginning Income on Investment Total End Period ended of Period (Loss) (a) Investments Operations Distributions of Period - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2045 Fund January 31, 2005** + $62.00 $0.21 $3.55 $3.76 $(0.51) $65.25 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2040 Fund January 31, 2005** + 62.00 0.25 3.44 3.69 (0.45) 65.24 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2035 Fund January 31, 2005** + 61.00 0.24 3.20 3.44 (0.38) 64.06 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2030 Fund January 31, 2005** + 61.00 0.09 3.16 3.25 (0.35) 63.90 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2025 Fund January 31, 2005** + 64.00 0.06 3.14 3.20 (0.32) 66.88 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2020 Fund January 31, 2005** + 60.00 0.07 2.53 2.60 (0.30) 62.30 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2015 Fund January 31, 2005** + 62.00 0.14 2.04 2.18 (0.28) 63.90 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2010 Fund January 31, 2005** + 56.00 0.11 1.17 1.28 (0.17) 57.11 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady Maturity Fund January 31, 2005** + 56.00 0.12 0.74 0.86 (0.13) 56.73 - --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- Ratios and Supplemental Data Total Ratio of Net Investment Ratio of Investment Return at Net Assets, Expenses Income (Loss) Net Asset End of Period to Average Net to Average Portfolio Period ended Value (%)(b) (in thousands) Assets (%)(c)(d) Net Assets (%)(d) Turnover (%) - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2045 Fund January 31, 2005** + 6.05* $8 0.28* 0.34* 8.56* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2040 Fund January 31, 2005** + 5.94* 1 0.28* 0.38* 6.34* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2035 Fund January 31, 2005** + 5.63* 1 0.28* 0.37* 5.97* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2030 Fund January 31, 2005** + 5.31* 7 0.28* 0.21* 5.35* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2025 Fund January 31, 2005** + 5.00* 22 0.28* 0.13* 4.87* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2020 Fund January 31, 2005** + 4.32* 29 0.28* 0.17* 5.10* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2015 Fund January 31, 2005** + 3.51* 15 0.28* 0.24* 5.74* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2010 Fund January 31, 2005** + 2.28* 5 0.28* 0.21* 6.75* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady Maturity Fund January 31, 2005** + 1.53* 1 0.28* 0.22* 8.89* - ---------------------------------------------------------------------------------------------------------------------------------
+ Unaudited. * Not annualized. ** For the period November 1, 2004 (commencement of operations) to January 31, 2005. (a) Per share net investment income (loss) has been determined on the basis of the weighted average number of shares outstanding during the period. (b) Total return does not reflect the effect of sales charges. (c) Expense ratios do not include expenses of the underlying funds. (d) Reflects an involuntary contractual expense limitation in effect during the period. As a result of such limitation the expenses for the period ended January 31, 2005 reflect a reduction of the following based on each fund's average net assets. 1/31/05 ------------ Putnam RetirementReady 2045 Fund 0.30% Putnam RetirementReady 2040 Fund 0.20 Putnam RetirementReady 2035 Fund 0.10 Putnam RetirementReady 2030 Fund 0.07 Putnam RetirementReady 2025 Fund 0.05 Putnam RetirementReady 2020 Fund 0.03 Putnam RetirementReady 2015 Fund 0.03 Putnam RetirementReady 2010 Fund 0.04 Putnam RetirementReady Maturity Fund 0.14 The accompanying notes are an integral part of these financial statements.
Financial highlights (Continued) (For a common share outstanding throughout the period) CLASS M - --------------------------------------------------------------------------------------------------------------------------------- Investment Operations Net Net Realized and Net Asset Net Unrealized Asset Value, Investment Gain (Loss) Total from Value, Beginning Income on Investment Total End Period ended of Period (Loss) (a) Investments Operations Distributions of Period - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2045 Fund January 31, 2005** + $62.00 $0.29 $3.52 $3.81 $(0.54) $65.27 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2040 Fund January 31, 2005** + 62.00 0.37 3.36 3.73 (0.52) 65.21 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2035 Fund January 31, 2005** + 61.00 0.14 3.35 3.49 (0.44) 64.05 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2030 Fund January 31, 2005** + 61.00 0.09 3.20 3.29 (0.40) 63.89 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2025 Fund January 31, 2005** + 64.00 0.18 3.06 3.24 (0.40) 66.84 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2020 Fund January 31, 2005** + 60.00 0.10 2.54 2.64 (0.34) 62.30 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2015 Fund January 31, 2005** + 62.00 0.13 2.09 2.22 (0.27) 63.95 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2010 Fund January 31, 2005** + 56.00 0.17 1.14 1.31 (0.17) 57.14 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady Maturity Fund January 31, 2005** + 56.00 0.16 0.73 0.89 (0.16) 56.73 - --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- Ratios and Supplemental Data Total Ratio of Net Investment Ratio of Investment Return at Net Assets, Expenses Income (Loss) Net Asset End of Period to Average Net to Average Portfolio Period ended Value (%)(b) (in thousands) Assets (%)(c)(d) Net Assets (%)(d) Turnover (%) - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2045 Fund January 31, 2005** + 6.12* $6 0.21* 0.24* 8.56* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2040 Fund January 31, 2005** + 5.99* 8 0.21* 0.57* 6.34* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2035 Fund January 31, 2005** + 5.70* 11 0.21* 0.39* 5.97* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2030 Fund January 31, 2005** + 5.38* 28 0.21* 0.27* 5.35* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2025 Fund January 31, 2005** + 5.06* 90 0.21* 0.35* 4.87* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2020 Fund January 31, 2005** + 4.39* 153 0.21* 0.24* 5.10* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2015 Fund January 31, 2005** + 3.58* 74 0.21* 0.30* 5.74* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2010 Fund January 31, 2005** + 2.34* 1 0.21* 0.30* 6.75* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady Maturity Fund January 31, 2005** + 1.60* 1 0.21* 0.28* 8.89* - ---------------------------------------------------------------------------------------------------------------------------------
+ Unaudited. * Not annualized. ** For the period November 1, 2004 (commencement of operations) to January 31, 2005. (a) Per share net investment income (loss) has been determined on the basis of the weighted average number of shares outstanding during the period. (b) Total return does not reflect the effect of sales charges. (c) Expense ratios do not include expenses of the underlying funds. (d) Reflects an involuntary contractual expense limitation in effect during the period. As a result of such limitation the expenses for the period ended January 31, 2005 reflect a reduction of the following based on each fund's average net assets. 1/31/05 ------------ Putnam RetirementReady 2045 Fund 0.30% Putnam RetirementReady 2040 Fund 0.20 Putnam RetirementReady 2035 Fund 0.10 Putnam RetirementReady 2030 Fund 0.07 Putnam RetirementReady 2025 Fund 0.05 Putnam RetirementReady 2020 Fund 0.03 Putnam RetirementReady 2015 Fund 0.03 Putnam RetirementReady 2010 Fund 0.04 Putnam RetirementReady Maturity Fund 0.14 The accompanying notes are an integral part of these financial statements.
Financial highlights (Continued) (For a common share outstanding throughout the period) CLASS R - --------------------------------------------------------------------------------------------------------------------------------- Investment Operations Net Net Realized and Net Asset Net Unrealized Asset Value, Investment Gain (Loss) Total from Value, Beginning Income on Investment Total End Period ended of Period (Loss) (a) Investments Operations Distributions of Period - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2045 Fund January 31, 2005** + $62.00 $0.34 $3.51 $3.85 $(0.56) $65.29 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2040 Fund January 31, 2005** + 62.00 0.33 3.44 3.77 (0.50) 65.27 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2035 Fund January 31, 2005** + 61.00 0.32 3.20 3.52 (0.44) 64.08 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2030 Fund January 31, 2005** + 61.00 0.32 3.02 3.34 (0.40) 63.94 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2025 Fund January 31, 2005** + 64.00 0.31 2.98 3.29 (0.38) 66.91 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2020 Fund January 31, 2005** + 60.00 0.26 2.41 2.67 (0.31) 62.36 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2015 Fund January 31, 2005** + 62.00 0.25 2.02 2.27 (0.26) 64.01 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2010 Fund January 31, 2005** + 56.00 0.20 1.15 1.35 (0.19) 57.16 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady Maturity Fund January 31, 2005** + 56.00 0.19 0.74 0.93 (0.20) 56.73 - --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- Ratios and Supplemental Data Total Ratio of Net Investment Ratio of Investment Return at Net Assets, Expenses Income (Loss) Net Asset End of Period to Average Net to Average Portfolio Period ended Value (%)(b) (in thousands) Assets (%)(c)(d) Net Assets (%)(d) Turnover (%) - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2045 Fund January 31, 2005** + 6.19* $1 0.15* 0.51* 8.56* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2040 Fund January 31, 2005** + 6.07* 1 0.15* 0.50* 6.34* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2035 Fund January 31, 2005** + 5.75* 1 0.15* 0.49* 5.97* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2030 Fund January 31, 2005** + 5.46* 1 0.15* 0.49* 5.35* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2025 Fund January 31, 2005** + 5.12* 1 0.15* 0.48* 4.87* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2020 Fund January 31, 2005** + 4.45* 1 0.15* 0.43* 5.10* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2015 Fund January 31, 2005** + 3.65* 1 0.15* 0.39* 5.74* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2010 Fund January 31, 2005** + 2.41* 1 0.15* 0.36* 6.75* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady Maturity Fund January 31, 2005** + 1.66* 1 0.15* 0.34* 8.89* - ---------------------------------------------------------------------------------------------------------------------------------
+ Unaudited. * Not annualized. ** For the period November 1, 2004 (commencement of operations) to January 31, 2005. (a) Per share net investment income (loss) has been determined on the basis of the weighted average number of shares outstanding during the period. (b) Total return does not reflect the effect of sales charges. (c) Expense ratios do not include expenses of the underlying funds. (d) Reflects an involuntary contractual expense limitation in effect during the period. As a result of such limitation the expenses for the period ended January 31, 2005 reflect a reduction of the following based on each fund's average net assets. 1/31/05 ------------ Putnam RetirementReady 2045 Fund 0.30% Putnam RetirementReady 2040 Fund 0.20 Putnam RetirementReady 2035 Fund 0.10 Putnam RetirementReady 2030 Fund 0.07 Putnam RetirementReady 2025 Fund 0.05 Putnam RetirementReady 2020 Fund 0.03 Putnam RetirementReady 2015 Fund 0.03 Putnam RetirementReady 2010 Fund 0.04 Putnam RetirementReady Maturity Fund 0.14 The accompanying notes are an integral part of these financial statements.
Financial highlights (For a common share outstanding throughout the period) CLASS Y - --------------------------------------------------------------------------------------------------------------------------------- Investment Operations Net Net Realized and Net Asset Net Unrealized Asset Value, Investment Gain (Loss) Total from Value, Beginning Income on Investment Total End Period ended of Period (Loss) (a) Investments Operations Distributions of Period - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2045 Fund January 31, 2005** + $68.76 $0.40 $3.95 $4.35 $(0.60) $72.51 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2040 Fund January 31, 2005** + 68.61 0.37 3.89 4.26 (0.54) 72.33 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2035 Fund January 31, 2005** + 67.76 0.37 3.63 4.00 (0.47) 71.29 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2030 Fund January 31, 2005** + 66.78 0.35 3.38 3.73 (0.44) 70.07 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2025 Fund January 31, 2005** + 65.87 0.37 3.10 3.47 (0.42) 68.92 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2020 Fund January 31, 2005** + 64.69 0.31 2.66 2.97 (0.35) 67.31 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2015 Fund January 31, 2005** + 62.71 0.31 2.05 2.36 (0.30) 64.77 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2010 Fund January 31, 2005** + 59.18 0.27 1.23 1.50 (0.23) 60.45 - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady Maturity Fund January 31, 2005** + 56.08 0.25 0.76 1.01 (0.26) 56.83 - --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- Ratios and Supplemental Data Total Ratio of Net Investment Ratio of Investment Return at Net Assets, Expenses Income (Loss) Net Asset End of Period to Average Net to Average Portfolio Period ended Value (%)(b) (in thousands) Assets (%)(c)(d) Net Assets (%)(d) Turnover (%) - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2045 Fund January 31, 2005** + 6.31* $5,534 0.03* 0.58* 8.56* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2040 Fund January 31, 2005** + 6.20* 8,968 0.03* 0.55* 6.34* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2035 Fund January 31, 2005** + 5.90* 21,408 0.03* 0.55* 5.97* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2030 Fund January 31, 2005** + 5.57* 34,098 0.03* 0.54* 5.35* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2025 Fund January 31, 2005** + 5.26* 59,064 0.03 0.55* 4.87* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2020 Fund January 31, 2005** + 4.58* 65,910 0.03* 0.50* 5.10* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2015 Fund January 31, 2005** + 3.76* 79,667 0.03* 0.49* 5.74* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady 2010 Fund January 31, 2005** + 2.54* 48,477 0.03* 0.47* 6.75* - --------------------------------------------------------------------------------------------------------------------------------- Putnam RetirementReady Maturity Fund January 31, 2005** + 1.79* 25,983 0.03* 0.47* 8.89* - ---------------------------------------------------------------------------------------------------------------------------------
+ Unaudited. * Not annualized. ** For the period November 1, 2004 (commencement of operations) to January 31, 2005. (a) Per share net investment income (loss) has been determined on the basis of the weighted average number of shares outstanding during the period. (b) Total return does not reflect the effect of sales charges. (c) Expense ratios do not include expenses of the underlying funds. (d) Reflects an involuntary contractual expense limitation in effect during the period. As a result of such limitation the expenses for the period ended January 31, 2005 reflect a reduction of the following based on each fund's average net assets. 1/31/05 ------------ Putnam RetirementReady 2045 Fund 0.30% Putnam RetirementReady 2040 Fund 0.20 Putnam RetirementReady 2035 Fund 0.10 Putnam RetirementReady 2030 Fund 0.07 Putnam RetirementReady 2025 Fund 0.05 Putnam RetirementReady 2020 Fund 0.03 Putnam RetirementReady 2015 Fund 0.03 Putnam RetirementReady 2010 Fund 0.04 Putnam RetirementReady Maturity Fund 0.14 The accompanying notes are an integral part of these financial statements. Notes to financial statements January 31, 2005 (Unaudited) Note 1 Significant accounting policies Each of Putnam RetirementReady Funds: Putnam RetirementReady 2045 Fund, Putnam RetirementReady 2040 Fund, Putnam Retirement Ready 2035 Fund, Putnam RetirementReady 2030 Fund, Putnam RetirementReady 2025 Fund, Putnam RetirementReady 2020 Fund, Putnam RetirementReady 2015 Fund, Putnam RetirementReady 2010 Fund and Putnam RetirementReady Maturity Fund, (collectively the "funds") is a series of Putnam Retirement Ready Funds, a Massachusetts business trust organized on June 8, 2004 (the "Trust"). Each fund is a diversified open-ended investment company under the Investment Company Act of 1940, as amended, each of which is represented by a series of shares of beneficial interest. Each fund except the Maturity Fund seeks capital appreciation and current income consistent with a decreasing emphasis on capital appreciation and an increasing emphasis on current income as it approaches its target date. The Maturity Fund seeks as high a rate of current income as Putnam Investment Management, LLC ("Putnam Management") believes is consistent with preservation of capital. Currently there are nine separate funds, of which eight have a target date specified by the calendar year in the name of each fund. The target dates are in five-year increments beginning with the year 2010. The ninth fund is named Putnam RetirementReady Maturity Fund. As the other funds reach their target date, they will merge with the Maturity Fund. These financial statements report on each fund which may invest in the following Putnam funds: Putnam Income Fund, Putnam Capital Opportunities Fund, The Putnam Fund for Growth and Income, Putnam Money Market Fund, Putnam International Equity Fund and Putnam Voyager Fund (the "underlying Putnam funds"), which are managed by Putnam Management. The financial statements of the underlying Putnam funds contain additional information about the expenses and investments of the underlying Putnam funds and are available upon request. Each fund offers class A, class B, class C, class M, class R and class Y shares. Class A shares are sold with a maximum front-end sales charge of 5.25%. Class B shares, which convert to class A shares after approximately eight years, do not pay a front-end sales charge but pay a higher ongoing distribution fee than class A, class M and class R shares, 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 the same fees and expenses as class B shares, except that class C shares have a one-year 1.00% contingent deferred sales charge and do not convert to class A shares. Class M shares are sold with a maximum front-end sales charge of 3.50% and pay an ongoing distribution fee that is higher than class A and class R shares but lower than class B and class C shares. Class R shares are sold without a front-end sales charge and pay an ongoing distribution fee that is higher than class A shares, but lower than class B, class C and class M shares. Class R shares are offered to qualified employee-benefit plans. 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. Class Y shares are sold to certain eligible purchasers including certain defined contribution plans (including corporate IRAs), bank trust departments and trust companies. A 2.00% redemption fee may apply to any shares that are redeemed (either by selling or exchanging into another fund) within 5 days of purchase. The redemption fee is accounted for as an addition to paid-in-capital. Investment income, realized and unrealized gains and losses and expenses of each fund are borne pro-rata based on the relative net assets of each class to the total net assets of each 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. Shares of each class would receive their pro-rata share of the net assets of the fund, if that fund were liquidated. In addition, the Trustees declare separate dividends on each class of shares. The following is a summary of significant accounting policies consistently followed by the funds in the preparation of their 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 during the reporting period. Actual results could differ from those estimates. A) Security valuation The price of each fund's shares is based on its net asset value (NAV), which is in turn based on the NAVs of the underlying Putnam funds in which it invests. The NAV per share of each class equals the total value of its assets, less its liabilities, divided by the number of its outstanding shares. Shares are only valued as of the close of regular trading on the New York Stock Exchange each day the exchange is open. Each underlying Putnam fund values its investments for which market quotations are readily available at market value. It values short-term investments that will mature within 60 days at amortized cost, which approximates market value. It values all other investments and assets at their fair value. Each underlying Putnam fund translates prices for its investments quoted in foreign currencies into U.S. dollars at current exchange rates. As a result, changes in the value of those currencies in relation to the U.S. dollar may affect an underlying Putnam fund's NAV. Because foreign markets may be open at different times than the New York Stock Exchange, the value of a fund's shares may change on days when shareholders are not able to buy or sell them. If events materially affecting the values of an underlying Putnam fund's foreign investments occur between the close of foreign markets and the close of regular trading on the New York Stock Exchange, these investments will be valued at their fair value. In addition, the closing prices for securities in foreign markets or on foreign exchanges that close prior to the close of the New York Stock Exchange may not fully reflect events that occur after such close but before the close of the New York Stock Exchange. As a result, each underlying Putnam Fund has adopted fair value pricing procedures, which, among other things, require the funds' to fair value foreign equity securities if there has been a movement in the U.S. market that exceeds a specified threshold. Although the threshold may be revised from time to time and the number of days on which fair value prices will be used will depend on market activity, it is possible that fair value prices will be used to a significant extent. B) Security transactions and related investment income Security transactions, shares of the underlying Putnam funds, are recorded on the trade date (date the order to buy or sell is executed). Gains or losses from the sale of the underlying Putnam funds are determined on the identified cost basis. Income and capital gain distributions from the underlying funds are recorded on the ex-dividend date. C) Federal taxes It is the policy of each fund to distribute all of its taxable income within the prescribed time and otherwise comply with the provisions of the Internal Revenue Code of 1986 (the "Code") applicable to regulated investment companies. It is also the intention of each fund to distribute an amount sufficient to avoid imposition of any excise tax under Section 4982 of the Code, as amended. Therefore, 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. D) Distributions to shareholders Distributions to shareholders from net investment income are recorded by each 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. Reclassifications are made to each fund's capital accounts to reflect income and gains available for distribution (or available capital loss carryovers) under income tax regulations. E) Expenses of the trust Expenses directly charged or attributable to any fund will be paid from the assets of that fund. Generally, expenses of the trust will be allocated among and charged to the assets of each fund on a basis that the Trustees deem fair and equitable, which may be based on the relative assets of each fund or the nature of the services performed and relative applicability to each fund. F) Organization and offering Expenses incurred by each fund in connection with its organization, its registration with the Securities and Exchange Commission and with various states and the initial public offering of its shares were $86,966, except Maturity Fund which incurred $127,496 plus $12,500 in organization costs. The organization fees are expensed as occurred and the offering costs will be amortized over a twelve month period on a straight line basis. Note 2 Management fee, administrative services and other transactions Putnam Management is paid for management and investment advisory services monthly at an annual rate of 0.05% based on the average net assets of each fund. In order to limit each fund's expenses, Putnam Management has agreed to limit its compensation (and, to the extent necessary, bear other expenses) through July 31, 2007, to the extent that each funds' net expenses (exclusive of brokerage, interest, taxes, extraordinary expenses, fees and expenses of the underlying funds in which each fund invests and payments under the fund's distribution plan) would exceed an annual rate of 10% of each fund's average net assets. Each fund has adopted distribution plans (the "Plans") with respect to its class A, class B, class C, class M and class R shares pursuant to Rule 12b-1 under the Investment Company Act of 1940. The purpose of the Plans is to compensate Putnam Retail Management, a wholly-owned subsidiary of Putnam, LLC and Putnam Retail Management GP, Inc., for services provided and expenses incurred in distributing shares of the funds. The Plans provide for payments by each fund to Putnam Retail Management at an annual rate of up to 0.35%, 1.00%, 1.00%, 1.00% and 1.00% of the average net assets attributable to class A, class B, class C, class M and class R shares, respectively. The Trustees have approved payments on class A, class M and class R shares to 0.25%, 0.75% and 0.50% of average net assets, respectively. For the period ended January 31, 2005, Putnam Retail Management, acting as underwriter, received the following: Class A Class M Net Net Commissions Commissions - ----------------------------------------------------------------------- RetirementReady 2045 Fund $-- $-- 2040 Fund -- -- 2035 Fund -- -- 2030 Fund 8 -- 2025 Fund 20 -- 2020 Fund -- -- 2015 Fund -- -- 2010 Fund -- -- Maturity Fund -- -- - ----------------------------------------------------------------------- A deferred sales charge of up to 1.00% and 0.65% is assessed on certain redemptions of class A and class M shares, respectively. For the period ended January 31, 2005, Putnam Management acting as underwriter, received no monies on class A and class M redemptions, respectively. Note 3 Purchases and sales of securities During the period ended January 31, 2005, cost of purchases and proceeds from sales of underlying Putnam funds were as follows: Fund Purchases Sales - ---------------------------------------------------------------- RetirementReady 2045 Fund $10,832,549 $685,240 2040 Fund 16,810,503 794,634 2035 Fund 36,220,262 1,682,939 2030 Fund 54,537,685 2,263,162 2025 Fund 94,197,745 3,622,368 2020 Fund 104,903,845 4,206,445 2015 Fund 123,246,288 6,364,817 2010 Fund 81,426,766 4,377,885 Maturity Fund 46,455,813 3,150,562 - ---------------------------------------------------------------- Note 4 Capital shares At January 31, 2005, there was an unlimited number of shares of beneficial interest authorized. Transactions in capital shares were as follows: RetirementReady 2045 Fund For the period November 1, 2004 (commencement of operations) to January 31, 2005 - ---------------------------------------------------------------- Class A Shares Amount - ---------------------------------------------------------------- Shares sold 76,859 $5,032,024 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 386 26,219 - ---------------------------------------------------------------- 77,245 5,058,243 Shares repurchased (3,037) (202,919) - ---------------------------------------------------------------- Net increase 74,208 $4,855,324 - ---------------------------------------------------------------- Class B - ---------------------------------------------------------------- Shares sold 29 $1,866 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions --* 8 - ---------------------------------------------------------------- 29 1,874 Shares repurchased -- -- - ---------------------------------------------------------------- Net increase 29 $1,874 - ---------------------------------------------------------------- Class C - ---------------------------------------------------------------- Shares sold 120 $7,894 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions --* 8 - ---------------------------------------------------------------- 120 7,902 Shares repurchased -- -- - ---------------------------------------------------------------- Net increase 120 $7,902 - ---------------------------------------------------------------- Class M - ---------------------------------------------------------------- Shares sold 93 $6,100 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions --* 9 - ---------------------------------------------------------------- 93 6,109 Shares repurchased -- -- - ---------------------------------------------------------------- Net increase 93 $6,109 - ---------------------------------------------------------------- Class R - ---------------------------------------------------------------- Shares sold 16 $1,000 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions --* 9 - ---------------------------------------------------------------- 16 1,009 Shares repurchased -- -- - ---------------------------------------------------------------- Net increase 16 $1,009 - ---------------------------------------------------------------- Class Y - ---------------------------------------------------------------- Shares sold 80,427 $5,673,827 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 456 33,627 - ---------------------------------------------------------------- 80,883 5,707,454 Shares repurchased (4,558) (330,399) - ---------------------------------------------------------------- Net increase 76,325 $5,377,055 - ---------------------------------------------------------------- RetirementReady 2040 Fund For the period November 1, 2004 (commencement of operations) to January 31, 2005 - ---------------------------------------------------------------- Class A Shares Amount - ---------------------------------------------------------------- Shares sold 117,239 $7,654,424 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 595 40,513 - ---------------------------------------------------------------- 117,834 7,694,937 Shares repurchased (5,306) (356,563) - ---------------------------------------------------------------- Net increase 112,528 $7,338,374 - ---------------------------------------------------------------- Class B - ---------------------------------------------------------------- Shares sold 361 $23,494 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions --* 7 - ---------------------------------------------------------------- 361 23,501 Shares repurchased -- -- - ---------------------------------------------------------------- Net increase 361 $23,501 - ---------------------------------------------------------------- Class C - ---------------------------------------------------------------- Shares sold 16 $1,000 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions --* 7 - ---------------------------------------------------------------- 16 1,007 Shares repurchased -- -- - ---------------------------------------------------------------- Net increase 16 $1,007 - ---------------------------------------------------------------- Class M - ---------------------------------------------------------------- Shares sold 123 $8,000 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 1 48 - ---------------------------------------------------------------- 124 8,048 Shares repurchased -- -- - ---------------------------------------------------------------- Net increase 124 $8,048 - ---------------------------------------------------------------- Class R - ---------------------------------------------------------------- Shares sold 16 $1,000 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions --* 8 - ---------------------------------------------------------------- 16 1,008 Shares repurchased -- -- - ---------------------------------------------------------------- Net increase 16 $1,008 - ---------------------------------------------------------------- Class Y - ---------------------------------------------------------------- Shares sold 126,952 $8,958,099 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 608 44,746 - ---------------------------------------------------------------- 127,560 9,002,845 Shares repurchased (3,562) (257,017) - ---------------------------------------------------------------- Net increase 123,998 $8,745,828 - ---------------------------------------------------------------- RetirementReady 2035 Fund For the period November 1, 2004 (commencement of operations) to January 31, 2005 - ---------------------------------------------------------------- Class A Shares Amount - ---------------------------------------------------------------- Shares sold 223,757 $14,366,742 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 1,059 70,868 - ---------------------------------------------------------------- 224,816 14,437,610 Shares repurchased (9,937) (657,806) - ---------------------------------------------------------------- Net increase 214,879 $13,779,804 - ---------------------------------------------------------------- Class B - ---------------------------------------------------------------- Shares sold 214 $13,749 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 1 86 - ---------------------------------------------------------------- 215 13,835 Shares repurchased -- -- - ---------------------------------------------------------------- Net increase 215 $13,835 - ---------------------------------------------------------------- Class C - ---------------------------------------------------------------- Shares sold 16 $1,000 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions --* 6 - ---------------------------------------------------------------- 16 1,006 Shares repurchased -- -- - ---------------------------------------------------------------- Net increase 16 $1,006 - ---------------------------------------------------------------- Class M - ---------------------------------------------------------------- Shares sold 179 $11,438 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions --* 21 - ---------------------------------------------------------------- 179 11,459 Shares repurchased -- -- - ---------------------------------------------------------------- Net increase 179 $11,459 - ---------------------------------------------------------------- Class R - ---------------------------------------------------------------- Shares sold 17 $1,000 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions --* 7 - ---------------------------------------------------------------- 17 1,007 Shares repurchased -- -- - ---------------------------------------------------------------- Net increase 17 $1,007 - ---------------------------------------------------------------- Class Y - ---------------------------------------------------------------- Shares sold 309,708 $21,495,101 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 1,366 98,944 - ---------------------------------------------------------------- 311,074 21,594,045 Shares repurchased (10,754) (764,458) - ---------------------------------------------------------------- Net increase 300,320 $20,829,587 - ---------------------------------------------------------------- RetirementReady 2030 Fund For the period November 1, 2004 (commencement of operations) to January 31, 2005 - ---------------------------------------------------------------- Class A Shares Amount - ---------------------------------------------------------------- Shares sold 315,801 $20,004,737 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 1,483 98,122 - ---------------------------------------------------------------- 317,284 20,102,859 Shares repurchased (17,566) (1,150,138) - ---------------------------------------------------------------- Net increase 299,718 $18,952,721 - ---------------------------------------------------------------- Class B - ---------------------------------------------------------------- Shares sold 779 $49,125 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions --* 6 - ---------------------------------------------------------------- 779 49,131 Shares repurchased -- -- - ---------------------------------------------------------------- Net increase 779 $49,131 - ---------------------------------------------------------------- Class C - ---------------------------------------------------------------- Shares sold 102 $6,502 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions --* 6 - ---------------------------------------------------------------- 102 6,508 Shares repurchased -- -- - ---------------------------------------------------------------- Net increase 102 $6,508 - ---------------------------------------------------------------- Class M - ---------------------------------------------------------------- Shares sold 445 $28,381 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 1 19 - ---------------------------------------------------------------- 446 28,400 Shares repurchased -- -- - ---------------------------------------------------------------- Net increase 446 $28,400 - ---------------------------------------------------------------- Class R - ---------------------------------------------------------------- Shares sold 16 $1,000 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions --* 6 - ---------------------------------------------------------------- 16 1,006 Shares repurchased -- -- - ---------------------------------------------------------------- Net increase 16 $1,006 - ---------------------------------------------------------------- Class Y - ---------------------------------------------------------------- Shares sold 494,931 $33,905,872 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 1,970 140,095 - ---------------------------------------------------------------- 496,901 34,045,967 Shares repurchased (10,301) (720,175) - ---------------------------------------------------------------- Net increase 486,600 $33,325,792 - ---------------------------------------------------------------- RetirementReady 2025 Fund For the period November 1, 2004 (commencement of operations) to January 31, 2005 - ---------------------------------------------------------------- Class A Shares Amount - ---------------------------------------------------------------- Shares sold 508,043 $33,989,959 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 2,245 156,581 - ---------------------------------------------------------------- 510,288 34,146,540 Shares repurchased (18,679) (1,285,205) - ---------------------------------------------------------------- Net increase 491,609 $32,861,335 - ---------------------------------------------------------------- Class B - ---------------------------------------------------------------- Shares sold 911 $61,432 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 1 79 - ---------------------------------------------------------------- 912 61,511 Shares repurchased (96) (6,580) - ---------------------------------------------------------------- Net increase 816 $54,931 - ---------------------------------------------------------------- Class C - ---------------------------------------------------------------- Shares sold 327 $22,047 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions --* 5 - ---------------------------------------------------------------- 327 22,052 Shares repurchased -- -- - ---------------------------------------------------------------- Net increase 327 $22,052 - ---------------------------------------------------------------- Class M - ---------------------------------------------------------------- Shares sold 1,349 $90,523 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 3 210 - ---------------------------------------------------------------- 1,352 90,733 Shares repurchased -- -- - ---------------------------------------------------------------- Net increase 1,352 $90,733 - ---------------------------------------------------------------- Class R - ---------------------------------------------------------------- Shares sold 16 $1,000 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions --* 6 - ---------------------------------------------------------------- 16 1,006 Shares repurchased -- -- - ---------------------------------------------------------------- Net increase 16 $1,006 - ---------------------------------------------------------------- Class Y - ---------------------------------------------------------------- Shares sold 879,676 $59,178,844 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 3,473 242,685 - ---------------------------------------------------------------- 883,149 59,421,529 Shares repurchased (26,167) (1,807,821) - ---------------------------------------------------------------- Net increase 856,982 $57,613,708 - ---------------------------------------------------------------- RetirementReady 2020 Fund For the period November 1, 2004 (commencement of operations) to January 31, 2005 - ---------------------------------------------------------------- Class A Shares Amount - ---------------------------------------------------------------- Shares sold 604,805 $37,297,780 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 2,435 155,610 - ---------------------------------------------------------------- 607,240 37,453,390 Shares repurchased (23,719) (1,493,332) - ---------------------------------------------------------------- Net increase 583,521 $35,960,058 - ---------------------------------------------------------------- Class B - ---------------------------------------------------------------- Shares sold 622 $38,709 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 1 90 - ---------------------------------------------------------------- 623 38,799 Shares repurchased (102) (6,336) - ---------------------------------------------------------------- Net increase 521 $32,463 - ---------------------------------------------------------------- Class C - ---------------------------------------------------------------- Shares sold 473 $29,652 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions --* 14 - ---------------------------------------------------------------- 473 29,666 Shares repurchased -- -- - ---------------------------------------------------------------- Net increase 473 $29,666 - ---------------------------------------------------------------- Class M - ---------------------------------------------------------------- Shares sold 2,453 $153,694 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 2 151 - ---------------------------------------------------------------- 2,455 153,845 Shares repurchased -- -- - ---------------------------------------------------------------- Net increase 2,455 $153,845 - ---------------------------------------------------------------- Class R - ---------------------------------------------------------------- Shares sold 17 $1,000 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions --* 5 - ---------------------------------------------------------------- 17 1,005 Shares repurchased -- -- - ---------------------------------------------------------------- Net increase 17 $1,005 - ---------------------------------------------------------------- Class Y - ---------------------------------------------------------------- Shares sold 1,008,020 $66,498,249 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 3,409 232,313 - ---------------------------------------------------------------- 1,011,429 66,730,562 Shares repurchased (32,272) (2,164,323) - ---------------------------------------------------------------- Net increase 979,157 $64,566,239 - ---------------------------------------------------------------- RetirementReady 2015 Fund For the period November 1, 2004 (commencement of operations) to January 31, 2005 - ---------------------------------------------------------------- Class A Shares Amount - ---------------------------------------------------------------- Shares sold 638,445 $40,398,771 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 2,324 151,730 - ---------------------------------------------------------------- 640,769 40,550,501 Shares repurchased (24,864) (1,601,872) - ---------------------------------------------------------------- Net increase 615,905 $38,948,629 - ---------------------------------------------------------------- Class B - ---------------------------------------------------------------- Shares sold 105 $6,682 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions --* 23 - ---------------------------------------------------------------- 105 6,705 Shares repurchased -- -- - ---------------------------------------------------------------- Net increase 105 $6,705 - ---------------------------------------------------------------- Class C - ---------------------------------------------------------------- Shares sold 240 $15,382 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions --* 46 - ---------------------------------------------------------------- 240 15,428 Shares repurchased -- -- - ---------------------------------------------------------------- Net increase 240 $15,428 - ---------------------------------------------------------------- Class M - ---------------------------------------------------------------- Shares sold 1,155 $73,794 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions --* 71 - ---------------------------------------------------------------- 1,115 73,865 Shares repurchased -- -- - ---------------------------------------------------------------- Net increase 1,155 $73,865 - ---------------------------------------------------------------- Class R - ---------------------------------------------------------------- Shares sold 16 $1,000 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions --* 4 - ---------------------------------------------------------------- 16 1,004 Shares repurchased -- -- - ---------------------------------------------------------------- Net increase 16 $1,004 - ---------------------------------------------------------------- Class Y - ---------------------------------------------------------------- Shares sold 1,288,859 $81,642,179 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 4,412 288,518 - ---------------------------------------------------------------- 1,293,271 81,930,697 Shares repurchased (63,208) (4,086,721) - ---------------------------------------------------------------- Net increase 1,230,063 $77,843,976 - ---------------------------------------------------------------- RetirementReady 2010 Fund For the period November 1, 2004 (commencement of operations) to January 31, 2005 - ---------------------------------------------------------------- Class A Shares Amount - ---------------------------------------------------------------- Shares sold 533,484 $30,512,792 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 1,730 100,806 - ---------------------------------------------------------------- 535,214 30,613,598 Shares repurchased (25,360) (1,472,693) - ---------------------------------------------------------------- Net increase 509,854 $29,140,905 - ---------------------------------------------------------------- Class B - ---------------------------------------------------------------- Shares sold 1,253 $71,397 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions --* 9 - ---------------------------------------------------------------- 1,253 71,406 Shares repurchased (112) (6,374) - ---------------------------------------------------------------- Net increase 1,141 $65,032 - ---------------------------------------------------------------- Class C - ---------------------------------------------------------------- Shares sold 82 $4,650 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions --* 5 - ---------------------------------------------------------------- 82 4,655 Shares repurchased -- -- - ---------------------------------------------------------------- Net increase 82 $4,655 - ---------------------------------------------------------------- Class M - ---------------------------------------------------------------- Shares sold 18 $1,000 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions --* 3 - ---------------------------------------------------------------- 18 1,003 Shares repurchased -- -- - ---------------------------------------------------------------- Net increase 18 $1,003 - ---------------------------------------------------------------- Class R - ---------------------------------------------------------------- Shares sold 18 $1,000 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions --* 3 - ---------------------------------------------------------------- 18 1,003 Shares repurchased -- -- - ---------------------------------------------------------------- Net increase 18 $1,003 - ---------------------------------------------------------------- Class Y - ---------------------------------------------------------------- Shares sold 840,518 $50,166,748 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 2,210 134,208 - ---------------------------------------------------------------- 842,728 50,300,956 Shares repurchased (40,742) (2,456,528) - ---------------------------------------------------------------- Net increase 801,986 $47,844,428 - ---------------------------------------------------------------- RetirementReady Maturity Fund For the period November 1, 2004 (commencement of operations) to January 31, 2005 - ---------------------------------------------------------------- Class A Shares Amount - ---------------------------------------------------------------- Shares sold 331,619 $18,655,878 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 984 55,792 - ---------------------------------------------------------------- 332,603 18,711,670 Shares repurchased (20,293) (1,151,864) - ---------------------------------------------------------------- Net increase 312,310 $17,559,806 - ---------------------------------------------------------------- Class B - ---------------------------------------------------------------- Shares sold 9 $525 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 4 232 - ---------------------------------------------------------------- 13 757 Shares repurchased -- -- - ---------------------------------------------------------------- Net increase 13 $757 - ---------------------------------------------------------------- Class C - ---------------------------------------------------------------- Shares sold 18 $1,000 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions --* 2 - ---------------------------------------------------------------- 18 1,002 Shares repurchased -- -- - ---------------------------------------------------------------- Net increase 18 $1,002 - ---------------------------------------------------------------- Class M - ---------------------------------------------------------------- Shares sold 18 $1,000 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions --* 3 - ---------------------------------------------------------------- 18 1,003 Shares repurchased -- -- - ---------------------------------------------------------------- Net increase 18 $1,003 - ---------------------------------------------------------------- Class R - ---------------------------------------------------------------- Shares sold 18 $1,000 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions --* 4 - ---------------------------------------------------------------- 18 1,004 Shares repurchased -- -- - ---------------------------------------------------------------- Net increase 18 $1,004 - ---------------------------------------------------------------- Class Y - ---------------------------------------------------------------- Shares sold 483,121 $27,236,029 - ---------------------------------------------------------------- Shares issued in connection with reinvestment of distributions 1,617 91,782 - ---------------------------------------------------------------- 484,738 27,327,811 Shares repurchased (27,529) (1,563,733) - ---------------------------------------------------------------- Net increase 457,209 $25,764,078 - ---------------------------------------------------------------- * Represents fractional shares issued in connection with reinvestment of distributions. Note 5 Initial capitalization and offering of shares The Trust was established as a Massachusetts business trust on June 8, 2004. During the period June 8, 2004, to September 14, 2004, the Trust had no operations other than those related to organizational matters, including the initial capital contribution of $100,000 and the issuance of 1,786 Putnam RetirementReady Maturity Fund class B shares to Putnam LLC. The Trust commenced investment operations on November 1, 2004. At January 31, 2005, Putnam LLC owned the following shares of each fund: Percentage of Value at Shares owned shares outstanding January 31, 2004 - ---------------------------------------------------------------------------- 2045 Fund class B 16 55.2% $1,060 2045 Fund class C 16 13.3 1,060 2045 Fund class M 16 17.2 1,061 2045 Fund class R 16 100.0 1.062 2040 Fund class B 16 4.4 1,060 2040 Fund class C 16 100.0 1,060 2040 Fund class M 16 12.9 1,059 2040 Fund class R 16 100.0 1,061 2035 Fund class B 17 7.7 1.056 2035 Fund class C 16 100.0 1,056 2035 Fund class M 17 9.2 1,057 2035 Fund class R 17 100.0 1,057 2030 Fund class B 16 2.1 1,053 2030 Fund class C 16 16.2 1.053 2030 Fund class M 16 3.7 1.053 2030 Fund class R 16 100.0 1,054 2025 Fund class B 16 1.9 1,050 2025 Fund class C 16 4.8 1,050 2025 Fund class M 16 1.2 1,051 2025 Fund class R 16 100.0 1,051 2020 Fund class B 17 3.2 1,043 2020 Fund class C 17 3.5 1,043 2020 Fund class M 17 0.7 1,044 2020 Fund class R 17 100.0 1,045 2015 Fund class B 16 15.4 1,035 2015 Fund class C 16 6.8 1,035 2015 Fund class M 16 1.4 1,036 2015 Fund class R 16 100.0 1,037 2010 Fund class B 18 1.6 1.023 2010 Fund class C 18 21.8 1,023 2010 Fund class M 18 100.0 1,023 2010 Fund class R 18 100.0 1,024 Maturity Fund class B 1,786 99.3 101,320 Maturity Fund class C 18 100.0 1,015 Maturity Fund class M 18 100.0 1,016 Maturity Fund class R 18 100.0 1,017 - ---------------------------------------------------------------------------- Note 6 Regulatory matters and litigation Putnam Management has entered into agreements with the Securities and Exchange Commission and the Massachusetts Securities Division settling charges connected with excessive short-term trading by Putnam employees and, in the case of the charges brought by the Massachusetts Securities Division, by participants in some Putnam-administered 401(k) plans. Pursuant to these settlement agreements, Putnam Management will pay a total of $193.5 million in penalties and restitution, with $153.5 million being paid to shareholders and the funds. The restitution amount will be allocated to shareholders pursuant to a plan developed by an independent consultant, with payments to shareholders currently expected by the end of the summer. The SEC's and Massachusetts Securities Division's allegations and related matters also serve as the general basis for numerous lawsuits, including purported class action lawsuits filed against Putnam Management and certain related parties, including certain Putnam funds. Putnam Management will bear any costs incurred by Putnam funds in connection with these lawsuits. Putnam Management believes that the likelihood that the pending private lawsuits and purported class action lawsuits will have a material adverse financial impact on the fund is remote, and the pending actions are not likely to materially affect its ability to provide investment management services to its clients, including the Putnam funds. Brokerage commissions (Unaudited) Brokerage commissions are paid to firms that execute trades on behalf of your mutual fund. When choosing these firms, Putnam is required by law to seek the best execution of the trades, taking all relevant factors into consideration, including expected quality of execution and commission rate. The RetirementReady Funds, however, invest in shares of other Putnam mutual funds, rather than in stocks and bonds. For that reason, the funds do not incur brokerage charges. Putnam puts your interests first Beginning in January 2004, Putnam began introducing a number of voluntary initiatives designed to reduce fund expenses, provide investors with more useful information, and help safeguard the interests of all Putnam investors. Visit www.putnaminvestments.com for details. Cost-cutting initiatives Reduced sales charges The maximum sales charge for class A shares has been reduced to 5.25% for equity funds (formerly 5.75%) and 4.50% for most income funds (formerly 4.75%).* Lower class B purchase limit To help ensure that investors are in the most cost-effective share class, the maximum amount that can be invested in class B shares has been reduced to $100,000. (Larger trades or accumulated amounts will be directed to class A shares.) Ongoing expenses will be limited Through calendar 2005, total ongoing expenses, including management fees for all funds, will be maintained at or below the average of each fund's industry peers in its Lipper load-fund universe. For more information, please see the Statement of Additional information. Improved disclosure Putnam fund prospectuses and shareholder reports have been revised to disclose additional information that will help shareholders compare funds and weigh their costs and risks along with their potential benefits. Shareholders will find easy-to-understand information about fund expense ratios, portfolio manager compensation, risk comparisons, brokerage commissions, and employee and trustee ownership of Putnam funds. Disclosure of breakpoint discounts has also been enhanced to alert investors to potential cost savings. Protecting investors' interests Short-term trading fee introduced To discourage short-term trading, which can interfere with a fund's long-term strategy, a 2% short-term trading fee will be imposed on any Putnam fund shares (other than money market funds) redeemed or exchanged within five calendar days of purchase. * The maximum sales charge for class A shares of Putnam Limited Duration Government Income Fund (formerly Putnam Intermediate U.S. Government Income Fund) and Putnam Floating Rate Income Fund remains 3.25%. Fund information One of the largest mutual fund families in the United States, Putnam Investments has a heritage of investment leadership dating back to Judge Samuel Putnam, whose Prudent Man Rule has defined fiduciary tradition and practice since 1830. Founded over 65 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 presently manage over 100 mutual funds in growth, value, blend, fixed income, and international. Investment Manager Putnam Investment Management, LLC One Post Office Square Boston, MA 02109 Marketing Services Putnam Retail Management One Post Office Square Boston, MA 02109 Custodian Putnam Fiduciary Trust Company Legal Counsel Ropes & Gray LLP Trustees John A. Hill, Chairman Jameson Adkins Baxter Charles B. Curtis Myra R. Drucker Charles E. Haldeman, Jr. Ronald J. Jackson Paul L. Joskow Elizabeth T. Kennan John H. Mullin, III Robert E. Patterson George Putnam, III W. Thomas Stephens Richard B. Worley Officers George Putnam, III President Charles E. Porter Executive Vice President, Associate Treasurer and Principal Executive Officer Jonathan S. Horwitz Senior Vice President and Treasurer Steven D. Krichmar Vice President and Principal Financial Officer Michael T. Healy Assistant Treasurer and Principal Accounting Officer Daniel T. Gallagher Vice President and Legal and Compliance Liaison Officer Beth S. Mazor Vice President James P. Pappas Vice President Richard S. Robie, III Vice President Mark C. Trenchard Vice President and BSA Compliance Officer Francis J. McNamara, III Vice President and Chief Legal Officer Charles A. Ruys de Perez Vice President and Chief Compliance Officer Judith Cohen Clerk and Assistant Treasurer This report is for the information of shareholders of the Putnam RetirementReady [REGISTRATION MARK] Funds. 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 www.putnaminvestments.com. Investors should carefully consider the investment objective, risks, charges, and expenses of a fund, which are described in its prospectus. For this and other information or to request a 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. [LOGO OMITTED] PUTNAM INVESTMENTS The Putnam Funds One Post Office Square Boston, Massachusetts 02109 PRSRT STD U.S. POSTAGE PAID PUTNAM INVESTMENTS Call 1-800-225-1581 or visit our Web site www.putnaminvestments.com. SA097-222383 3/05 Not FDIC Insured May Lose Value No Bank Guarantee PUTNAM INVESTMENTS [SCALE LOGO OMITTED] - ---------------------------------------------------------------------------- Putnam RetirementReady Funds Supplement to Semiannual Report dated 1/31/05 The following information has been prepared to provide class Y shareholders with information specific to their holdings. Class Y shares are offered exclusively to clients that meet the eligibility requirements specified in the fund's prospectus for such shares. The semiannual report covers the first half of the funds' 2005 fiscal year, which is an abbreviated period that extends from their inception on November 1, 2004, through January 31, 2005. Fund performance is not included in this initial report because the funds do not yet have a full quarter of results. For the most recent month-end performance, please visit www.putnaminvestments.com. 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. If you have questions, please consult your fund prospectus or call Putnam toll free at 1-800-752-9894. A short-term trading fee of up to 2% may apply. - ---------------------------------------------------------------------------- Please see pages 8-11 of the accompanying shareholder report for a discussion of the information appearing in the tables below: - ----------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------- RETIREMENTREADY FUNDS Maturity 2010 2015 2020 2025 2030 2035 2040 2045 Fund Fund Fund Fund Fund Fund Fund Fund Fund - --------------------------------------------------------------------------------------------------------------------------------- EXPENSES AND Expenses paid per $0.25 $0.26 $0.26 $0.26 $0.26 $0.26 $0.26 $0.26 $0.26 VALUE OF A $1,000* $1,000 INVESTMENT assuming actual Ending value returns for the (after expenses) $1,017.90 $1,025.40 $1,037.60 $1,045.80 $1,052.60 $1,055.70 $1,059.00 $1,062.00 $1,063.10 6 months ended 1/31/05 - --------------------------------------------------------------------------------------------------------------------------------- EXPENSES AND Expenses paid per $0.25 $0.25 $0.25 $0.25 $0.25 $0.25 $0.25 $0.25 $0.25 VALUE OF A $1,000* $1,000 INVESTMENT assuming a hypothetical 5% annualized Ending value return (after expenses) $1,012.35 $1,012.35 $1,012.35 $1,012.35 $1,012.35 $1,012.35 $1,012.35 $1,012.35 $1,012.35 for the 6 months ended 1/31/05 - --------------------------------------------------------------------------------------------------------------------------------- Your fund's 0.10% 0.10% 0.10% 0.10% 0.10% 0.10% 0.10% 0.10% 0.10% annualized expense ratio+ - ---------------------------------------------------------------------------------------------------------------------------------
* 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 net assets for the period from 11/1/04 to 1/31/05. 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. Expenses do not reflect expenses of the underlying Putnam funds in which the funds invest. + During the period from 11/1/04 to 1/31/05, your fund limited its expenses; had it not done so, expenses would have been higher. Item 2. Code of Ethics: - ----------------------- Not applicable Item 3. Audit Committee Financial Expert: - ----------------------------------------- Not applicable Item 4. Principal Accountant Fees and Services: - ----------------------------------------------- Not applicable Item 5. Audit Committee: Not applicable - ------------------------- Item 6. Schedule of Investments: Not applicable - -------------------------------- Item 7. Disclosure of Proxy Voting Policies and Procedures For Closed-End - ------------------------------------------------------------------------- Management Investment Companies: Not applicable -------------------------------- Item 8. Purchases of Equity Securities by Closed-End Management Investment - -------------------------------------------------------------------------- Companies and Affiliated Purchasers: Not applicable ------------------------------------ Item 9. Submission of Matters to a Vote of Security Holders: - ------------------------------------------------------------ Not applicable Item 10. Controls and Procedures: - --------------------------------- (a) The registrant's principal executive officer and principal financial officer have concluded, based on their evaluation of the effectiveness of the design and operation of the registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the design and operation of such procedures are generally effective to provide reasonable assurance that information required to be disclosed by the registrant in this report is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms. (b) Changes in internal control over financial reporting: Not applicable Item 11. Exhibits: - ------------------ (a) Not applicable (b) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2 under the Investment Company Act of 1940, as amended, and the officer certifications as required by Section 906 of the Sarbanes-Oxley Act of 2002 are filed herewith. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. NAME OF REGISTRANT By (Signature and Title): /s/Michael T. Healy -------------------------- Michael T. Healy Principal Accounting Officer Date: March 28, 2005 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title): /s/Charles E. Porter --------------------------- Charles E. Porter Principal Executive Officer Date: March 28, 2005 By (Signature and Title): /s/Steven D. Krichmar --------------------------- Steven D. Krichmar Principal Financial Officer Date: March 28, 2005 EX-99.CERT 2 exnn2.txt EX-99.CERT Certifications - -------------- I, Charles E. Porter, a Principal Executive Officer of the funds listed on Attachment A, certify that: 1. I have reviewed each report on Form N-CSR of the funds listed on Attachment A: 2. Based on my knowledge, each report does not contain any untrue statements of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by each report; 3. Based on my knowledge, the financial statements, and other financial information included in each report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in each report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which each report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of each report based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to each registrant's auditors and the audit committee of each registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect each registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in each registrant's internal control over financial reporting. /s/Charles E. Porter Date: March 28, 2005 - ---------------------- ---------------------- Charles E. Porter, Principal Executive Officer Certifications - -------------- I, Steven D. Krichmar, the Principal Financial Officer of the funds listed on Attachment A, certify that: 1. I have reviewed each report on Form N-CSR of the funds listed on Attachment A: 2. Based on my knowledge, each report does not contain any untrue statements of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by each report; 3. Based on my knowledge, the financial statements, and other financial information included in each report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in each report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which each report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of each report based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to each registrant's auditors and the audit committee of each registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect each registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in each registrant's internal control over financial reporting. /s/Steven D. Krichmar Date: March 28, 2005 - ---------------------- ---------------------- Steven D. Krichmar, Principal Financial Officer Attachment A - -------------- Period(s) ended January 31, 2005 001 The George Putnam Fund of Boston 003 Putnam Investors Fund 006 Putnam Vista Fund 007 Putnam Voyager Fund 024 Putnam OTC & Emerging Growth Fund 035 Putnam ATM_Free Insured Municipal Fund 036 Putnam Tax-Free High Yield Fund 073 Putnam Premier Income Trust 2AP Putnam Growth Opportunities Fund 2AQ Putnam Research Fund 48P Putnam RetirementReady Funds EX-99.906 CERT 3 exnnos3.txt EX-99.906 CERT Section 906 Certifications - --------------------------- 1. The form N-CSR of the Funds listed on Attachment A for the period ended January 31, 2005 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Form N-CSR of the Funds listed on Attachment A for the period ended January 31, 2005 fairly presents, in all material respects, the financial condition and results of operations of the Funds listed on Attachment A. /s/Charles E. Porter Date: March 28, 2005 - ---------------------- ------------------------ Charles E. Porter, Principal Executive Officer Section 906 Certifications - --------------------------- I, Steven D. Krichmar, a Principal Financial Officer of the Funds listed on Attachment A, certify that, to my knowledge: 1. The form N-CSR of the Funds listed on Attachment A for the period ended January 31, 2005 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Form N-CSR of the Funds listed on Attachment A for the period ended January 31, 2005 fairly presents, in all material respects, the financial condition and results of operations of the Funds listed on Attachment A. /s/Steven D. Krichmar Date: March 28, 2005 - ---------------------- ------------------------ Steven D. Krichmar, Principal Financial Officer Attachment A - -------------- Period(s) ended January 31, 2005 001 The George Putnam Fund of Boston 003 Putnam Investors Fund 006 Putnam Vista Fund 007 Putnam Voyager Fund 024 Putnam OTC & Emerging Growth Fund 035 Putnam ATM_Free Insured Municipal Fund 036 Putnam Tax-Free High Yield Fund 073 Putnam Premier Income Trust 2AP Putnam Growth Opportunities Fund 2AQ Putnam Research Fund 48P Putnam RetirementReady Funds -----END PRIVACY-ENHANCED MESSAGE-----