N-Q 1 a_equityincome.htm PUTNAM EQUITY INCOME FUND a_equityincome.htm


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

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY



Investment Company Act file number: (811-02742)
Exact name of registrant as specified in charter: Putnam Equity Income Fund
Address of principal executive offices: 100 Federal Street, Boston, Massachusetts 02110
Name and address of agent for service: Robert T. Burns, Vice President
100 Federal Street
Boston, Massachusetts 02110
Copy to:         Bryan Chegwidden, Esq.
Ropes & Gray LLP
1211 Avenue of the Americas
New York, New York 10036
Registrant’s telephone number, including area code: (617) 292-1000
Date of fiscal year end: November 30, 2019
Date of reporting period: February 28, 2019



Item 1. Schedule of Investments:


Putnam Equity Income Fund
The fund's portfolio
2/28/19 (Unaudited)



COMMON STOCKS (96.2%)(a)
        Shares Value
Aerospace and defense (3.2%)
Northrop Grumman Corp. 826,090 $239,533,056
Raytheon Co. 841,700 156,977,050
396,510,106
Airlines (0.9%)
Southwest Airlines Co. 1,884,300 105,596,172
105,596,172
Auto components (0.8%)
Delphi Automotive PLC 1,186,100 98,576,771
98,576,771
Automobiles (1.0%)
General Motors Co. 2,983,519 117,789,330
117,789,330
Banks (13.2%)
Bank of America Corp. 14,128,594 410,859,514
BB&T Corp. 1,617,400 82,438,878
Citigroup, Inc. 5,320,703 340,418,578
JPMorgan Chase & Co. 4,497,746 469,384,773
KeyCorp 4,013,900 70,885,474
Regions Financial Corp. 8,047,900 131,985,560
Wells Fargo & Co. 2,586,740 129,052,459
1,635,025,236
Beverages (2.1%)
Keurig Dr Pepper, Inc.(S) 1,121,500 28,205,725
Molson Coors Brewing Co. Class B 1,692,600 104,365,716
PepsiCo, Inc. 1,143,200 132,199,648
264,771,089
Biotechnology (2.3%)
Amgen, Inc. 818,100 155,504,448
Gilead Sciences, Inc. 1,936,900 125,937,238
281,441,686
Building products (1.0%)
Johnson Controls International PLC 3,492,141 123,167,813
123,167,813
Capital markets (3.2%)
Charles Schwab Corp. (The) 1,326,800 61,046,068
Goldman Sachs Group, Inc. (The) 541,993 106,610,023
KKR & Co., Inc. Class A 5,665,096 125,935,084
State Street Corp. 1,416,780 101,823,979
395,415,154
Chemicals (2.3%)
Air Products & Chemicals, Inc. 555,100 100,573,018
DowDuPont, Inc. 2,988,649 159,085,786
Sherwin-Williams Co. (The) 44,700 19,364,040
279,022,844
Commercial services and supplies (—%)
New Bigfoot Other Assets GmbH (acquired 8/2/13, cost $52) (Private) (Germany)(NON)(F)(RES) 39 33
New Middle East Other Assets GmbH (acquired 8/2/13, cost $21) (Private) (Germany)(NON)(F)(RES) 16 14
47
Communications equipment (1.3%)
Cisco Systems, Inc. 3,201,307 165,731,663
165,731,663
Consumer finance (0.7%)
Capital One Financial Corp. 950,100 79,409,358
Oportun Financial Corp. (acquired 6/23/15, cost $2,781,056) (Private)(NON)(F)(RES) 975,809 2,092,280
81,501,638
Containers and packaging (0.8%)
Ball Corp. 1,874,600 102,690,588
102,690,588
Diversified telecommunication services (1.9%)
AT&T, Inc. 5,089,900 158,397,688
Verizon Communications, Inc. 1,290,070 73,430,784
231,828,472
Electric utilities (4.2%)
American Electric Power Co., Inc. 2,177,400 176,696,010
Edison International 1,504,100 90,080,549
Exelon Corp. 2,686,300 130,527,317
NextEra Energy, Inc. 656,500 123,238,180
520,542,056
Electrical equipment (0.3%)
Emerson Electric Co. 594,500 40,515,175
40,515,175
Energy equipment and services (0.5%)
Halliburton Co. 1,962,500 60,229,125
60,229,125
Equity real estate investment trusts (REITs) (3.1%)
American Tower Corp. 937,141 165,077,387
Boston Properties, Inc. 696,200 92,378,778
Gaming and Leisure Properties, Inc. 3,379,946 122,962,435
380,418,600
Food and staples retail (5.0%)
BJ's Wholesale Club Holdings, Inc.(NON)(S) 3,694,239 93,538,131
Kroger Co. (The) 5,223,400 153,202,322
Walgreens Boots Alliance, Inc. 1,183,900 84,281,841
Walmart, Inc. 2,904,700 287,536,253
618,558,547
Health-care equipment and supplies (2.9%)
Becton Dickinson and Co. (BD) 890,895 221,645,767
Danaher Corp. 1,029,100 130,716,282
352,362,049
Health-care providers and services (1.4%)
Cigna Corp. 1,005,100 175,329,644
175,329,644
Hotels, restaurants, and leisure (0.9%)
Hilton Worldwide Holdings, Inc. 1,355,999 112,683,517
112,683,517
Household durables (0.5%)
HC Brillant Services GmbH (acquisition dates ranging from 8/2/13 to 8/31/16, cost $52) (Private) (Germany)(NON)(F)(RES) 78 67
PulteGroup, Inc. 2,510,200 67,775,400
67,775,467
Household products (1.3%)
Procter & Gamble Co. (The) 1,627,500 160,390,125
160,390,125
Independent power and renewable electricity producers (1.0%)
NRG Energy, Inc. 3,004,600 125,231,728
125,231,728
Industrial conglomerates (0.9%)
General Electric Co. 2,826,820 29,370,660
Honeywell International, Inc. 558,200 86,001,874
115,372,534
Insurance (3.2%)
American International Group, Inc. 2,934,178 126,756,490
Assured Guaranty, Ltd. 4,176,980 174,430,685
Hartford Financial Services Group, Inc. (The) 1,904,000 93,981,440
395,168,615
Internet and direct marketing retail (—%)
Global Fashion Group SA (acquired 8/2/13, cost $2,567,154) (Private) (Luxembourg)(NON)(F)(RES) 60,600 554,226
554,226
IT Services (1.8%)
DXC Technology Co. 1,550,200 102,096,172
Fidelity National Information Services, Inc. 1,061,400 114,790,410
216,886,582
Machinery (0.5%)
Stanley Black & Decker, Inc. 461,800 61,156,174
Wabtec Corp. 15,183 1,112,296
62,268,470
Media (2.4%)
Charter Communications, Inc. Class A(NON) 388,659 134,052,376
Comcast Corp. Class A 4,115,200 159,134,784
293,187,160
Metals and mining (1.3%)
Alcoa Corp.(NON) 3,220,000 94,990,000
Freeport-McMoRan, Inc. (Indonesia) 5,268,900 67,968,810
162,958,810
Mortgage real estate investment trusts (REITs) (0.3%)
MFA Financial, Inc. 5,082,805 36,951,992
36,951,992
Oil, gas, and consumable fuels (10.6%)
Anadarko Petroleum Corp. 1,741,482 75,754,467
BP PLC (United Kingdom) 20,336,082 144,142,405
ConocoPhillips 3,145,000 213,388,250
Encana Corp. (Canada) 7,150,700 52,491,175
Enterprise Products Partners LP 4,683,600 129,501,540
EOG Resources, Inc. 702,700 66,053,800
Exxon Mobil Corp. 2,798,092 221,133,211
Kinder Morgan, Inc. 4,281,700 82,037,372
Marathon Oil Corp. 4,331,680 71,905,888
TOTAL SA (France) 2,041,421 116,077,433
Valero Energy Corp. 1,624,300 132,477,908
1,304,963,449
Personal products (0.2%)
Coty, Inc. Class A(NON)(S) 2,601,321 28,614,531
28,614,531
Pharmaceuticals (7.2%)
AstraZeneca PLC ADR (United Kingdom) 3,656,600 152,041,428
Eli Lilly & Co. 1,314,200 165,970,318
Johnson & Johnson 1,869,270 255,417,053
Merck & Co., Inc. 2,412,091 196,078,877
Pfizer, Inc. 2,777,820 120,418,497
889,926,173
Road and rail (1.4%)
Union Pacific Corp. 1,039,700 174,357,690
174,357,690
Semiconductors and semiconductor equipment (3.1%)
Intel Corp. 2,012,700 106,592,592
NXP Semiconductors NV 591,600 54,024,912
ON Semiconductor Corp.(NON) 1,887,700 40,547,796
Qualcomm, Inc. 2,061,900 110,084,841
Texas Instruments, Inc. 672,000 71,084,160
382,334,301
Software (3.2%)
Microsoft Corp. 3,486,000 390,536,580
390,536,580
Specialty retail (1.4%)
Home Depot, Inc. (The) 508,800 94,199,232
O'Reilly Automotive, Inc.(NON) 220,700 82,091,572
176,290,804
Technology hardware, storage, and peripherals (1.9%)
Apple, Inc. 1,330,100 230,306,815
230,306,815
Thrifts and mortgage finance (1.0%)
Radian Group, Inc. 6,220,840 126,656,302
126,656,302
Total common stocks (cost $8,651,486,250) $11,880,439,676









CONVERTIBLE PREFERRED STOCKS (1.1%)(a)
        Shares Value
Danaher Corp. 4.75% cv. pfd.(NON) 61,874 $63,340,729
Global Fashion Group SA zero % cv. pfd. (acquisition dates ranging from 7/11/16 to 9/14/17, cost $309,306) (Luxembourg) (Private)(NON)(F)(RES) 47,052 438,927
Mandatory Exchangeable Trust Securities 144A $5.75 cv. pfd. 302,514 61,646,303
Oportun Financial Corp. Ser. A-1, 8.00% cv. pfd. (acquired 6/23/15, cost $7,592) (Private)(NON)(F)(RES) 2,664 5,712
Oportun Financial Corp. Ser. B-1, 8.00% cv. pfd. (acquired 6/23/15, cost $145,237) (Private)(NON)(F)(RES) 46,107 109,267
Oportun Financial Corp. Ser. C-1, 8.00% cv. pfd. (acquired 6/23/15, cost $341,111) (Private)(NON)(F)(RES) 67,016 256,629
Oportun Financial Corp. Ser. D-1, 8.00% cv. pfd. (acquired 6/23/15, cost $494,779) (Private)(NON)(F)(RES) 97,206 372,238
Oportun Financial Corp. Ser. E-1, 8.00% cv. pfd. (acquired 6/23/15, cost $277,459) (Private)(NON)(F)(RES) 50,539 208,742
Oportun Financial Corp. Ser. F, 8.00% cv. pfd. (acquired 6/23/15, cost $837,565) (Private)(NON)(F)(RES) 109,058 630,128
Oportun Financial Corp. Ser. F-1, 8.00% cv. pfd. (acquired 6/23/15, cost $2,349,227) (Private)(NON)(F)(RES) 824,290 1,767,401
Oportun Financial Corp. Ser. G, 8.00% cv. pfd. (acquired 6/23/15, cost $2,970,584) (Private)(NON)(F)(RES) 1,042,310 2,234,868
Oportun Financial Corp. Ser. H, 8.00% cv. pfd. (acquired 2/6/15, cost $9,110,862) (Private)(NON)(F)(RES) 3,199,825 6,854,025
Total convertible preferred stocks (cost $109,147,417) $137,864,969









U.S. TREASURY OBLIGATIONS (—%)(a)
        Principal amount Value
U.S. Treasury Notes
2.75%, 11/30/20(i) $212,000 $214,192
2.125%, 9/30/21(i) 124,000 123,945
1.75%, 9/30/22(i) 146,000 143,319
Total U.S. treasury obligations (cost $481,456) $481,456









SHORT-TERM INVESTMENTS (3.6%)(a)
        Principal amount/
shares		 Value
Interest in $494,641,000 joint tri-party repurchase agreement dated 2/28/19 with Citigroup Global Markets, Inc. due 3/1/19 - maturity value of $62,120,521 for an effective yield of 2.620% (collateralized by various U.S. Treasury notes and bonds with coupon rates ranging from 0.375% to 3.000% and due dates ranging from 12/31/21 to 2/15/47, valued at $504,615,703) $62,116,000 $62,116,000
Interest in $450,000,000 joint tri-party repurchase agreement dated 2/28/19 with HSBC Bank USA, National Association due 3/1/19 - maturity value of $50,459,602 for an effective yield of 2.570% (collateralized by various mortgage backed securities with coupon rates ranging from 3.500% to 6.000% and due dates ranging from 1/1/38 to 7/1/55, valued at $459,032,768) 50,456,000 50,456,000
Putnam Cash Collateral Pool, LLC 2.67%(AFF) Shares 73,492,808 73,492,808
Putnam Short Term Investment Fund 2.58%(AFF) Shares 242,928,327 242,928,327
U.S. Treasury Bills 2.427%, 5/23/19(SEGSF) $4,266,000 4,242,444
U.S. Treasury Bills 2.461%, 7/25/19(SEGSF) 1,805,000 1,787,376
U.S. Treasury Bills 2.514%, 6/6/19(SEGSF) 1,264,000 1,255,823
U.S. Treasury Bills 2.375%, 3/21/19(SEGSF) 893,000 891,836
U.S. Treasury Bills 2.421%, 5/16/19(SEGSF) 814,000 809,893
U.S. Treasury Bills 2.479%, 4/11/19(SEGSF) 371,000 369,982
U.S. Treasury Bills 2.548%, 6/13/19(SEGSF) 369,000 366,444
U.S. Treasury Bills 2.431%, 5/2/19(SEGSF) 278,000 276,855
U.S. Treasury Bills 2.464%, 4/18/19(SEGSF) 210,000 209,332
Total short-term investments (cost $439,203,121) $439,203,120
TOTAL INVESTMENTS
Total investments (cost $9,200,318,244) $12,457,989,221









FORWARD CURRENCY CONTRACTS at 2/28/19 (aggregate face value $378,928,136) (Unaudited)
  Counterparty Currency Contract type* Delivery
date		 Value Aggregate face value Unrealized
appreciation/
(depreciation)
Bank of America N.A.
Euro Sell 3/20/19 $15,360,489 $15,461,659 $101,170
Barclays Bank PLC
British Pound Sell 3/20/19 89,104,522 86,009,948 (3,094,574)
Citibank, N.A.
Canadian Dollar Sell 4/17/19 28,770,973 27,921,735 (849,238)
Goldman Sachs International
British Pound Sell 3/20/19 129,184,765 124,729,552 (4,455,213)
Canadian Dollar Sell 4/17/19 26,161,786 25,388,499 (773,287)
Euro Sell 3/20/19 51,677,836 52,031,454 353,618
State Street Bank and Trust Co.
Euro Sell 3/20/19 47,063,496 47,385,289 321,793
Unrealized appreciation 776,581
Unrealized (depreciation) (9,172,312)
Total $(8,395,731)
* The exchange currency for all contracts listed is the United States Dollar.













Key to holding's abbreviations
ADR American Depository Receipts: represents ownership of foreign securities on deposit with a custodian bank
Notes to the fund's portfolio
Unless noted otherwise, the notes to the fund's portfolio are for the close of the fund's reporting period, which ran from December 1, 2018 through February 28, 2019 (the reporting period). Within the following notes to the portfolio, references to "Putnam Management" represent Putnam Investment Management, LLC, the fund's manager, an indirect wholly-owned subsidiary of Putnam Investments, LLC, references to "ASC 820" represent Accounting Standards Codification 820 Fair Value Measurements and Disclosures and references to "OTC", if any, represent over-the-counter.
(a) Percentages indicated are based on net assets of $12,354,434,827.
(NON) This security is non-income-producing.
(RES) This security is restricted with regard to public resale. The total fair value of this security and any other restricted securities (excluding 144A securities), if any, held at the close of the reporting period was $15,524,557, or 0.1% of net assets.
(AFF) Affiliated company. For investments in Putnam Cash Collateral Pool, LLC and Putnam Short Term Investment Fund the rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period. Transactions during the period with any company which is under common ownership or control were as follows:
Name of affiliate Fair value
as of
11/30/18		 Purchase
cost		 Sale
proceeds		 Investment
income		 Shares outstanding
and fair
value as  of
2/28/19
Short-term investments
Putnam Cash Collateral Pool, LLC*# $135,744,665 $158,969,106 $221,220,963 $774,669 $73,492,808
Putnam Short Term Investment Fund** 297,757,049 60,170,431 114,999,153 1,541,127 242,928,327
Total Short-term investments $433,501,714 $219,139,537 $336,220,116 $2,315,796 $316,421,135
* No management fees are charged to Putnam Cash Collateral Pool, LLC. There were no realized or unrealized gains or losses during the period.
# The fund may lend securities, through its agent, to qualified borrowers in order to earn additional income. The loans are collateralized by cash in an amount at least equal to the fair value of the securities loaned. The fair value of securities loaned is determined daily and any additional required collateral is allocated to the fund on the next business day. The remaining maturities of the securities lending transactions are considered overnight and continuous. The risk of borrower default will be borne by the fund’s agent; the fund will bear the risk of loss with respect to the investment of the cash collateral. The fund received cash collateral of $73,492,808, which is invested in Putnam Cash Collateral Pool, LLC, a limited liability company managed by an affiliate of Putnam Management. Investments in Putnam Cash Collateral Pool, LLC are valued at its closing net asset value each business day. There are no management fees charged to Putnam Cash Collateral Pool, LLC. The rate quoted in the security description is the annualized 7-day yield at the close of the reporting period. At the close of the reporting period, the value of securities loaned amounted to $70,722,421.
** Management fees charged to Putnam Short Term Investment Fund have been waived by Putnam Management. There were no realized or unrealized gains or losses during the period.
(SEGSF) This security, in part or in entirety, was pledged and segregated with the custodian for collateral on certain derivative contracts at the close of the reporting period. Collateral at period end totaled $9,827,649.
(F) This security is valued by Putnam Management at fair value following procedures approved by the Trustees. Securities are classified as Level 3 for ASC 820 based on the securities' valuation inputs.
(i) This security was pledged, or purchased with cash that was pledged, to the fund for collateral on certain derivative contracts.
(S) This security is on loan, in part or in entirety, at the close of the reporting period.
At the close of the reporting period, the fund maintained liquid assets totaling $9,448,246 to cover certain derivative contracts.
Unless otherwise noted, the rates quoted in Short-term investments security descriptions represent the weighted average yield to maturity.
144A after the name of an issuer represents securities exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.
The dates shown on debt obligations are the original maturity dates.
Security valuation: Portfolio securities and other investments are valued using policies and procedures adopted by the Board of Trustees. The Trustees have formed a Pricing Committee to oversee the implementation of these procedures and have delegated responsibility for valuing the fund’s assets in accordance with these procedures to Putnam Management. Putnam Management has established an internal Valuation Committee that is responsible for making fair value determinations, evaluating the effectiveness of the pricing policies of the fund and reporting to the Pricing Committee.
Investments for which market quotations are readily available are valued at the last reported sales price on their principal exchange, or official closing price for certain markets, and are classified as Level 1 securities under ASC 820. If no sales are reported, as in the case of some securities that are traded OTC, a security is valued at its last reported bid price and is generally categorized as a Level 2 security.
Investments in open-end investment companies (excluding exchange-traded funds), if any, which can be classified as Level 1 or Level 2 securities, are valued based on their net asset value. The net asset value of such investment companies equals the total value of their assets less their liabilities and divided by the number of their outstanding shares.
Market quotations are not considered to be readily available for certain debt obligations (including short-term investments with remaining maturities of 60 days or less) and other investments; such investments are valued on the basis of valuations furnished by an independent pricing service approved by the Trustees or dealers selected by Putnam Management. Such services or dealers determine valuations for normal institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships, generally recognized by institutional traders, between securities (which consider such factors as security prices, yields, maturities and ratings). These securities will generally be categorized as Level 2.
Many securities markets and exchanges outside the U.S. close prior to the scheduled close of the New York Stock Exchange and therefore the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but before the scheduled close of the New York Stock Exchange. Accordingly, on certain days, the fund will fair value certain foreign equity securities taking into account multiple factors including movements in the U.S. securities markets, currency valuations and comparisons to the valuation of American Depository Receipts, exchange-traded funds and futures contracts. The foreign equity securities, which would generally be classified as Level 1 securities, will be transferred to Level 2 of the fair value hierarchy when they are valued at fair value. The number of days on which fair value prices will be used will depend on market activity and it is possible that fair value prices will be used by the fund to a significant extent. Securities quoted in foreign currencies, if any, are translated into U.S. dollars at the current exchange rate.
To the extent a pricing service or dealer is unable to value a security or provides a valuation that Putnam Management does not believe accurately reflects the security's fair value, the security will be valued at fair value by Putnam Management in accordance with policies and procedures approved by the Trustees. Certain investments, including certain restricted and illiquid securities and derivatives, are also valued at fair value following procedures approved by the Trustees. These valuations consider such factors as significant market or specific security events such as interest rate or credit quality changes, various relationships with other securities, discount rates, U.S. Treasury, U.S. swap and credit yields, index levels, convexity exposures, recovery rates, sales and other multiples and resale restrictions. These securities are classified as Level 2 or as Level 3 depending on the priority of the significant inputs.
To assess the continuing appropriateness of fair valuations, the Valuation Committee reviews and affirms the reasonableness of such valuations on a regular basis after considering all relevant information that is reasonably available. Such valuations and procedures are reviewed periodically by the Trustees. The fair value of securities is generally determined as the amount that the fund could reasonably expect to realize from an orderly disposition of such securities over a reasonable period of time. By its nature, a fair value price is a good faith estimate of the value of a security in a current sale and does not reflect an actual market price, which may be different by a material amount.
Repurchase agreements: The fund, or any joint trading account, through its custodian, receives delivery of the underlying securities, the fair value of which at the time of purchase is required to be in an amount at least equal to the resale price, including accrued interest. Collateral for certain tri-party repurchase agreements, which totaled $114,837,397, is held at the counterparty’s custodian in a segregated account for the benefit of the fund and the counterparty. Putnam Management is responsible for determining that the value of these underlying securities is at all times at least equal to the resale price, including accrued interest. In the event of default or bankruptcy by the other party to the agreement, retention of the collateral may be subject to legal proceedings.
Forward currency contracts: The fund buys and sells forward currency contracts, which are agreements between two parties to buy and sell currencies at a set price on a future date. These contracts were used to hedge foreign exchange risk.
The U.S. dollar value of forward currency contracts is determined using current forward currency exchange rates supplied by a quotation service. The fair value of the contract will fluctuate with changes in currency exchange rates. The contract is marked to market daily and the change in fair value is recorded as an unrealized gain or loss. The fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed when the contract matures or by delivery of the currency. The fund could be exposed to risk if the value of the currency changes unfavorably, if the counterparties to the contracts are unable to meet the terms of their contracts or if the fund is unable to enter into a closing position.
For the fund's average contract amount on forward currency contracts, see the appropriate table at the end of these footnotes.
Master agreements: The fund is a party to ISDA (International Swaps and Derivatives Association, Inc.) Master Agreements (Master Agreements) with certain counterparties that govern OTC derivative and foreign exchange contracts entered into from time to time. The Master Agreements may contain provisions regarding, among other things, the parties’ general obligations, representations, agreements, collateral requirements, events of default and early termination. With respect to certain counterparties, in accordance with the terms of the Master Agreements, collateral posted to the fund is held in a segregated account by the fund’s custodian and, with respect to those amounts which can be sold or repledged, is presented in the fund’s portfolio.
Collateral pledged by the fund is segregated by the fund’s custodian and identified in the fund’s portfolio. Collateral can be in the form of cash or debt securities issued by the U.S. Government or related agencies or other securities as agreed to by the fund and the applicable counterparty. Collateral requirements are determined based on the fund’s net position with each counterparty.
Termination events applicable to the fund may occur upon a decline in the fund’s net assets below a specified threshold over a certain period of time. Termination events applicable to counterparties may occur upon a decline in the counterparty’s long-term and short-term credit ratings below a specified level. In each case, upon occurrence, the other party may elect to terminate early and cause settlement of all derivative and foreign exchange contracts outstanding, including the payment of any losses and costs resulting from such early termination, as reasonably determined by the terminating party. Any decision by one or more of the fund’s counterparties to elect early termination could impact the fund’s future derivative activity.
At the close of the reporting period, the fund had a net liability position of $8,818,694 on open derivative contracts subject to the Master Agreements. Collateral posted by the fund at period end for these agreements totaled $9,827,649 and may include amounts related to unsettled agreements.









ASC 820 establishes a three-level hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of the fund’s investments. The three levels are defined as follows:
Level 1: Valuations based on quoted prices for identical securities in active markets.
Level 2: Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.
Level 3: Valuations based on inputs that are unobservable and significant to the fair value measurement.
The following is a summary of the inputs used to value the fund’s net assets as  of the close of the reporting period:
 
Valuation inputs
Investments in securities: Level 1 Level 2 Level 3
Common stocks*:
Communication services $525,015,632 $— $—
Consumer discretionary 573,115,822 — 554,293
Consumer staples 1,072,334,292 — —
Energy 1,365,192,574 — —
Financials 2,668,626,657 — 2,092,280
Health care 1,699,059,552 — —
Industrials 1,017,787,960 — 47
Information technology 1,385,795,941 — —
Materials 544,672,242 — —
Real Estate 380,418,600 — —
Utilities 645,773,784 — —
Total common stocks 11,877,793,056 — 2,646,620
Convertible preferred stocks 63,340,729 61,646,303 12,877,937
U.S. treasury obligations — 481,456 —
Short-term investments 242,928,327 196,274,793 —
Totals by level $12,184,062,112 $258,402,552 $15,524,557
 
Valuation inputs
Other financial instruments: Level 1 Level 2 Level 3
Forward currency contracts $— $(8,395,731) $—
Totals by level $— $(8,395,731) $—
* Common stock classifications are presented at the sector level, which may differ from the fund's portfolio presentation.
At the start and close of the reporting period, Level 3 investments in securities represented less than 1% of the fund's net assets and were not considered a significant portion of the fund's portfolio.
Fair Value of Derivative Instruments as  of
the close of the reporting period
  Asset derivatives Liability derivatives
Derivatives not accounted for as hedging instruments
under ASC 815		 Fair value Fair value
Foreign exchange contracts $776,581 $9,172,312
Total $776,581 $9,172,312

The volume of activity for the reporting period for any derivative type that was held at the close of the period is listed below and was based on an average of the holdings of that derivative at the end of each fiscal quarter in the reporting period:
Forward currency contracts (contract amount) $421,400,000

For additional information regarding the fund please see the fund's most recent annual or semiannual shareholder report filed on the Securities and Exchange Commission's Web site, www.sec.gov, or visit Putnam's Individual Investor Web site at www.putnaminvestments.com


Item 2. 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 3. Exhibits:
Separate certifications for the principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are filed herewith.

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

Putnam Equity Income Fund
By (Signature and Title):
/s/ Janet C. Smith
Janet C. Smith
Principal Accounting Officer
Date: April 26, 2019

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By (Signature and Title):
/s/ Jonathan S. Horwitz
Jonathan S. Horwitz
Principal Executive Officer
Date: April 26, 2019

By (Signature and Title):
/s/ Janet C. Smith
Janet C. Smith
Principal Financial Officer
Date: April 26, 2019