Putnam New York
Tax Exempt
Income Fund

Annual report
11 | 30 | 22

 

 

Message from the Trustees

January 9, 2023

Dear Fellow Shareholder:

As an investor, you might be happy to see 2022 in the rearview mirror. High inflation and aggressive interest-rate increases from the U.S. Federal Reserve contributed to market volatility and negative returns for stocks and bonds.

While inflation and interest rates are still high, the possibility remains that 2023 could be a better year for market returns than 2022. Historically, stocks and bonds have recovered from bear markets like the one we have been experiencing. Our investment teams are actively researching securities with attractive performance potential and working to keep portfolio risks in check.

We would like to note recent changes to the Board of Trustees that oversees your fund. In July 2022, we welcomed Jennifer Williams Murphy and Marie Pillai as new Trustees. Both have a wealth of investment advisory and executive management experience. We also want to thank our Trustees who retired from the Board on June 30, 2022. Paul Joskow served with us since 1997, and Ravi Akhoury joined the Board in 2009. We wish them well.

Thank you for investing with Putnam.

 

Municipal bonds finance important public projects, such as schools, roads, and hospitals. The bonds are backed by the issuing city, town, or other government entity or by revenues collected from usage fees.

However, unlike U.S. Treasuries or corporate bonds, the interest paid on municipal bonds is generally free from federal income taxes. Moreover, New York residents generally pay no state income taxes on distributions paid from municipal bonds issued in the Empire State. That can make municipal bonds particularly attractive to investors subject to higher personal income tax rates.

Putnam New York Tax Exempt Income Fund offers an active, research-intensive investment approach.

 

 

 

Sources: Putnam, Bloomberg Index Services Limited, as of 11/30/22. Past performance is no guarantee of future results. Yields for U.S. Treasuries, investment-grade corporates, and municipal bonds are represented by the average “yield to worst” — a calculation of the lowest possible yield generated without defaulting — of the Bloomberg U.S. Treasury Index, an unmanaged index of U.S. dollar-denominated, fixed-rate, nominal debt issued by the U.S. Treasury; the Bloomberg U.S. Corporate Bond Index, an unmanaged index of U.S. dollar-denominated, investment-grade, fixed-rate, taxable corporate bonds; and the Bloomberg Municipal Bond Index, an unmanaged index of long-term, fixed-rate, investment-grade tax-exempt bonds, respectively. You cannot invest directly in an index. Bond investments are subject to interest-rate risk (the risk of bond prices falling if interest rates rise) and credit risk (the risk of an issuer defaulting on interest or principal payments). Interest-rate risk is greater for longer-term bonds, and credit risk is greater for below-investment-grade bonds. Income from municipal bonds may be subject to the alternative minimum tax. Annual after-tax income is based on a 40.80% federal income tax rate. This rate reflects the Tax Cuts and Jobs Act of 2017 and includes the 3.80% Medicare surtax. The income data is based on a hypothetical $100,000 investment.

Source: Moody’s Investors Service, Annual U.S. Municipal Bond Defaults and Recoveries, Five-Year Average Cumulative Default Rates, 1970–2021 (April 2022). Most recent data available.

 

 

Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results. Share price, principal value, and return will fluctuate, and you may have a gain or a loss when you sell your shares. Performance of class A shares assumes reinvestment of distributions and does not account for taxes. Fund returns in the bar chart do not reflect a sales charge of 4.00%; had they, returns would have been lower. See below and pages 10–13 for additional performance information. For a portion of the periods, the fund had expense limitations, without which returns would have been lower. To obtain the most recent month-end performance, visit putnam.com.

All Bloomberg indices are provided by Bloomberg Index Services Limited.

Lipper peer group median is provided by Lipper, a Refinitiv company.

This comparison shows your fund’s performance in the context of broad market indexes for the 12 months ended 11/30/22. See above and pages 10–13 for additional fund performance information. Index descriptions can be found on pages 16–17.

All Bloomberg indices are provided by Bloomberg Index Services Limited.

 

 

Paul, how did municipal bonds perform during the 12-month period that ended November 30, 2022?

Despite their healthy credit fundamentals, municipal bonds succumbed to market pressures. Municipal bond prices fell and yields rose as the markets began pricing in a more hawkish Federal Reserve environment and a significantly faster pace of monetary policy tightening. Geopolitical tensions also weighed on investor sentiment.

As investors sought cash, municipal bond funds sold holdings to generate liquidity to meet redemptions. The municipal fund category experienced record outflows of over $113 billion during the 11 months from January 2022 through November 2022. This exerted further downward pressure on prices, resulting in increasingly difficult market technicals [supply/demand dynamics] for the asset class. Despite a rally — albeit a bear market rally — in the final weeks of the fund’s fiscal year, the Bloomberg Municipal Bond Index [the fund’s benchmark] returned –8.64% for the 12-month reporting period. It outperformed the broader U.S. fixed income markets, as measured by the Bloomberg U.S. Aggregate Bond Index.

 

 

Allocations are shown as a percentage of the fund’s net assets as of 11/30/22. Cash and net other assets, if any, represent the market value weights of cash, derivatives, short-term securities, and other unclassified assets in the portfolio. Summary information may differ from the information in the portfolio schedule notes included in the financial statements due to the inclusion of derivative securities, any interest accruals, the timing of matured security transactions, the use of different classifications of securities for presentation purposes, and rounding. Holdings and allocations may vary over time.

Credit qualities are shown as a percentage of the fund’s net assets as of 11/30/22. A bond rated BBB or higher (SP-3 or higher, for short-term debt) is considered investment grade. This chart reflects the highest security rating provided by one or more of Standard & Poor’s, Moody’s, and Fitch. Ratings may vary over time.

Cash and net other assets, if any, represent the market value weights of cash, derivatives, and short-term securities in the portfolio. The fund itself has not been rated by an independent rating agency.

 

 

The Fed faced the difficult task of calibrating monetary policy to achieve its price stability goals. Fed policymakers raised their benchmark interest rate six times during the reporting period. With inflation running more than three times the Fed’s target inflation rate of 2.00%, the interest-rate hikes included unusually large 0.75% increases in June, July, September, and November 2022. By period-end, the Fed’s short-term benchmark interest rate had risen from a range of 0.00%–0.25% to 3.75%–4.00%. The magnitude of these interest-rate increases further heightened worries about whether policymakers could cool inflation without tipping economies into recession.

At its September meeting, the Fed affirmed that ongoing interest-rate increases were appropriate and forecasted its target rate range to be 4.25%–4.50% by the end of calendar 2022. It also lowered the U.S. growth forecast for 2022, 2023, and 2024. Following its November meeting, Fed Chair Jerome Powell stated that it was “very premature” to expect a pause on interest-rate hikes. Later in the month, however, investors were heartened to see that the inflation rate for October 2022 came in lower than expected. Investors interpreted this as evidence that the Fed was making progress in subduing stubbornly high prices. Just before period-end, the Fed hinted that it might temper the degree of interest-rate hikes as early as December 2022. These developments, coupled with very light new-issue supply and a slowing of outflows from municipal bond funds, helped the asset class post a gain of 4.68% in November 2022, as measured by the Bloomberg Municipal Bond Index. This was the strongest monthly return for the benchmark since 1986.

What is your current assessment of the health of New York’s municipal bond market?

New York has relatively high debt levels and capital needs, prompting tax hikes for the 2022 fiscal year [FY]. As a result, tax collections were up 47% year over year in FY 2022, which provided a general fund surplus of almost $32 billion and about $3.3 billion for its rainy-day fund. New York’s pension system is among the best funded in the nation due to consistent funding and proactive management. The state’s average pension funding across all plans was 99% as of FY 2021. New York’s unemployment rate of 4.4% in October 2022 remains above the 3.7% national rate.

How did the fund perform during the reporting period?

For the 12 months ended November 30, 2022, the fund’s class A shares outperformed the median return of its Lipper peer group, New York Municipal Debt Funds, but underperformed its benchmark.

What strategies influenced the fund’s performance during the reporting period?

With the significant sell-off in fixed income assets in early 2022, we believed municipal bonds had become more attractive. We extended the portfolio’s duration, a measure of the fund’s interest-rate sensitivity. At period-end, the fund’s duration was slightly long relative to the average level of its Lipper peer group. We believe this positioning may help the fund outperform its peers if the year-to-date rise in bond yields reverses course.

At period-end, the fund held an overweight exposure to lower-investment-grade bonds and those rated BB relative to its benchmark. We had become more cautious on lower-rated municipal bonds due to our view that the Fed’s aggressive tightening cycle could result in slower U.S. economic growth in 2023. Thus, the fund held an underweight position in high-yield bonds relative to its Lipper peers at period-end. Instead, we favored higher-rated investments.

 

 

Investment-grade securities tend to outperform higher-yielding, lower-rated bonds during economic slowdowns. While credit spreads widened over the period, creating what we perceived as attractive buying opportunities, they were not excessively wide versus previous recessionary periods, in our view.

From a sector- or industry-positioning perspective, we favored charter school, private higher education, and tobacco bonds compared with the fund’s Lipper peer group.

The fund remained underweight in its exposure to Puerto Rico municipal debt relative to its Lipper peer group. However, we note that the U.S. territory has experienced recent improvement in credit fundamentals. In March 2022, Puerto Rico came out of bankruptcy after nearly five years with a plan to restructure its debt, resume payments to bondholders, and restore its public pension system. We continue to closely monitor Puerto Rico’s credit fundamentals and remain vigilant for investment opportunities.

What is your outlook for the municipal bond market as we head into calendar 2023?

In December 2022, after the close of the reporting period, the November 2022 Consumer Price Index came in better than expected, with year-over-year inflation at 7.1%, down from 7.7% in October. It was the smallest 12-month increase since December 2021. Later in the month, the Fed raised its benchmark interest rate by half a percentage point. While the increase was less than the previous four, Fed Chair Powell signaled the fight against inflation was not over, stating that “it will take substantially more evidence to give confidence that inflation is on a sustained downward path.”

Although it appears to us that inflation has peaked in this cycle, we also believe U.S. economic data remains relatively strong. Especially noteworthy, in our view, is the low U.S. unemployment rate, which ranged from 3.5% to 4.0% during the reporting period, and strong consumer spending. This will likely keep the Fed on track to continue ratcheting up interest rates to slow growth and the jobs market, in our opinion. Market expectations are

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

 

 

for the Fed to complete its tightening cycle by the spring of 2023.

Seasonal factors are typically constructive for the municipal bond market in the winter months, and credit fundamentals are sound, in our view. We believe the income and tax advantages provided by municipal bonds continue to offer shareholders a valuable way to diversify their overall portfolio.

Thank you, Paul, for your time and insights today.

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

Please note that the holdings discussed in this report may not have been held by the fund for the entire period. Portfolio composition is subject to review in accordance with the fund’s investment strategy and may vary in the future. Current and future portfolio holdings are subject to risk. Statements in the Q&A concerning the fund’s performance or portfolio composition relative to those of the fund’s Lipper peer group may reference information produced by Lipper Inc. or through a third party.

 

 

Your fund’s performance

This section shows your fund’s performance, price, and distribution information for periods ended November 30, 2022, the end of its most recent fiscal year. In accordance with regulatory requirements for mutual funds, we also include performance information as of the most recent calendar quarter-end and expense information taken from the fund’s current prospectus. Performance should always be considered in light of a fund’s investment strategy. Data represent past performance. Past performance does not guarantee future results. More recent returns may be less or more than those shown. Investment return and principal value will fluctuate, and you may have a gain or a loss when you sell your shares. Performance information does not reflect any deduction for taxes a shareholder may owe on fund distributions or on the redemption of fund shares. For the most recent month-end performance, please visit the Individual Investors section at putnam.com or call Putnam at 1-800-225-1581. Class R6 and Y shares are not available to all investors. See the Terms and definitions section in this report for definitions of the share classes offered by your fund.

Annualized fund performance Total return for periods ended 11/30/22

 

Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results. After-sales-charge returns for class A shares reflect the deduction of the maximum 4.00% sales charge levied at the time of purchase. Class B share returns after contingent deferred sales charge (CDSC) reflect the applicable CDSC, which is 5% in the first year, declining over time to 1% in the sixth year, and is eliminated thereafter. Class C share returns after CDSC reflect a 1% CDSC for the first year that is eliminated thereafter. Class R6 and Y shares have no initial sales charge or CDSC. Performance for class B, C, and Y shares before their inception is derived from the historical performance of class A shares, adjusted for the applicable sales charge (or CDSC) and the higher operating expenses for such shares, except for class Y shares, for which 12b-1 fees are not applicable. Performance for class R6 shares prior to their inception is derived from the historical performance of class Y shares and has not been adjusted for the lower investor servicing fees applicable to class R6 shares; had it, returns would have been higher.

For a portion of the periods, the fund had expense limitations, without which returns would have been lower.

Class B and C share performance reflects conversion to class A shares after eight years.

 

 

Comparative annualized index returns For periods ended 11/30/22

 

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

All Bloomberg indices are provided by Bloomberg Index Services Limited.

Lipper peer group median is provided by Lipper, a Refinitiv company.

^* Over the 1-year, 3-year, 5-year, 10-year, and life-of-fund periods ended 11/30/22, there were 100, 96, 87, 76, and 3 funds, respectively, in this Lipper category.

Past performance does not indicate future results. At the end of the same time period, a $10,000 investment in the fund’s class B and C shares would have been valued at $10,902 and $10,781, respectively, and no contingent deferred sales charges would apply. A $10,000 investment in the fund’s class R6 and Y shares would each have been valued at $11,724.

All Bloomberg indices are provided by Bloomberg Index Services Limited.

 

 

Fund price and distribution information For the 12-month period ended 11/30/22

 

The classification of distributions, if any, is an estimate. Before-sales-charge share value and current dividend rate for class A shares, if applicable, do not take into account any sales charge levied at the time of purchase. After-sales-charge share value, current dividend rate, and current 30-day SEC yield, if applicable, are calculated assuming that the maximum sales charge (4.00% for class A shares) was levied at the time of purchase. Final distribution information will appear on your year-end tax forms.

¹ For some investors, investment income may be subject to the federal alternative minimum tax.

² Capital gains, if any, are taxable for federal and, in most cases, state purposes.

³ Most recent distribution, including any return of capital and excluding capital gains, annualized and divided by share price before or after sales charge at period-end.

⁴ Assumes (a) maximum 51.70% federal and state combined tax rate for 2022 or (b) maximum 55.58% federal, New York State, and New York City combined tax rate for 2022. Results for investors subject to lower tax rates would not be as advantageous.

⁵ Based only on investment income and calculated using the maximum offering price for each share class, in accordance with SEC guidelines.

 

 

Annualized fund performance as of most recent calendar quarter
Total return for periods ended 12/31/22

 

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

Your fund’s expenses

As a mutual fund investor, you pay ongoing expenses, such as management fees, distribution fees (12b-1 fees), and other expenses. Using the following information, you can estimate how these expenses affect your investment and compare them with the expenses of other funds. You may also pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial representative.

Expense ratios

 

Fiscal year expense information in this table is taken from the most recent prospectus, is subject to change, and may differ from that shown for the annualized expense ratio and in the financial highlights of this report.

Expenses are shown as a percentage of average net assets.

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

 

 

Expenses per $1,000

The following table shows the expenses you would have paid on a $1,000 investment in each class of the fund from 6/1/22 to 11/30/22. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.

 

^* Expenses for each share class are calculated using the fund’s annualized expense ratio for each class, which represents the ongoing expenses as a percentage of average net assets for the six months ended 11/30/22. 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 (183); and then dividing that result by the number of days in the year (365).

Estimate the expenses you paid

To estimate the ongoing expenses you paid for the six months ended 11/30/22, use the following calculation method. To find the value of your investment on 6/1/22, call Putnam at 1-800-225-1581.

Compare expenses using the SEC’s method

The Securities and Exchange Commission (SEC) has established guidelines to help investors assess fund expenses. Per these guidelines, the following table shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total costs) of investing in the fund with those of other funds. All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.

 

^* Expenses for each share class are calculated using the fund’s annualized expense ratio for each class, which represents the ongoing expenses as a percentage of average net assets for the six months ended 11/30/22. The expense ratio may differ for each share class.

^† Expenses are calculated by multiplying the expense ratio by the average account value for the six-month period; then multiplying the result by the number of days in the six-month period (183); and then dividing that result by the number of days in the year (365).

 

 

Consider these risks before investing

The value of investments in the fund’s portfolio may fall or fail to rise over extended periods of time for a variety of reasons, including general economic, political, or financial market conditions; investor sentiment and market perceptions; government actions; geopolitical events or changes; and factors related to a specific issuer, geography, industry, or sector. These and other factors may lead to increased volatility and reduced liquidity in the fund’s portfolio holdings.

The fund’s performance will be closely tied to the economic and political conditions in New York State, and can be more volatile than the performance of a more geographically diversified fund. To the extent the fund invests in securities of issuers located outside of New York State, the fund may also be exposed to the risks affecting other states and U.S. territories. Capital gains, if any, are taxed at the federal and, in most cases, state levels. For some investors, investment income may be subject to the federal alternative minimum tax.

Bond investments are subject to interest-rate risk (the risk of bond prices falling if interest rates rise) and credit risk (the risk of an issuer defaulting on interest or principal payments). Bond investments may be more susceptible to downgrades or defaults during economic downturns or other periods of economic stress. Interest-rate risk is generally greater for longer-term bonds, and credit risk is generally greater for below-investment-grade bonds. Unlike bonds, funds that invest in bonds have fees and expenses. Tax-exempt bonds may be issued under the Internal Revenue Code only by limited types of issuers for limited types of projects. As a result, the fund’s investments may be focused in certain market segments and be more vulnerable to fluctuations in the values of the securities it holds than a more broadly invested fund. Interest the fund receives might be taxable.

Our investment techniques, analyses, and judgments may not produce the outcome we intend. The investments we select for the fund may not perform as well as other securities that we do not select for the fund. We, or the fund’s other service providers, may experience disruptions or operating errors that could negatively impact the fund. You can lose money by investing in the fund.

 

 

Terms and definitions

Important terms

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

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

After sales charge is the price of a mutual fund share plus the maximum sales charge levied at the time of purchase. After-sales-charge performance figures shown here assume the 4.00% maximum sales charge for class A shares.

Contingent deferred sales charge (CDSC) is generally a charge applied at the time of the redemption of class B or C shares and assumes redemption at the end of the period. Your fund’s class B CDSC declines over time from a 5% maximum during the first year to 1% during the sixth year. After the sixth year, the CDSC no longer applies. The CDSC for class C shares is 1% for one year after purchase.

Share classes

Class A shares are generally subject to an initial sales charge and no CDSC (except on certain redemptions of shares bought without an initial sales charge).

Class B shares are closed to new investments and are only available by exchange from class B shares of another Putnam fund or through dividend and/or capital gains reinvestment. They are not subject to an initial sales charge and may be subject to a CDSC.

Class C shares are not subject to an initial sales charge and are subject to a CDSC only if the shares are redeemed during the first year.

Class R6 shares are not subject to an initial sales charge or CDSC and carry no 12b-1 fee. They are generally only available to employer-sponsored retirement plans, corporate and institutional clients, and clients in other approved programs.

Class Y shares are not subject to an initial sales charge or CDSC and carry no 12b-1 fee. They are generally only available to corporate and institutional clients and clients in other approved programs.

Fixed income terms

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

Yield curve is a graph that plots the yields of bonds with equal credit quality against their differing maturity dates, ranging from shortest to longest. It is used as a benchmark for other debt, such as mortgage or bank lending rates.

Comparative indexes

Bloomberg Municipal Bond Index is an unmanaged index of long-term, fixed-rate, investment-grade tax-exempt bonds.

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

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

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.

 

 

BLOOMBERG^®  is a trademark and service mark of Bloomberg Finance L.P. and its affiliates (collectively “Bloomberg”). Bloomberg or Bloomberg’s licensors own all proprietary rights in the Bloomberg Indices. Neither Bloomberg nor Bloomberg’s licensors approve or endorse this material, or guarantee the accuracy or completeness of any information herein, or make any warranty, express or implied, as to the results to be obtained therefrom, and to the maximum extent allowed by law, neither shall have any liability or responsibility for injury or damages arising in connection therewith.

ICE Data Indices, LLC (“ICE BofA”), used with permission. ICE BofA permits use of the ICE BofA indices and related data on an “as is” basis; makes no warranties regarding same; does not guarantee the suitability, quality, accuracy, timeliness, and/or completeness of the ICE BofA indices or any data included in, related to, or derived therefrom; assumes no liability in connection with the use of the foregoing; and does not sponsor, endorse, or recommend Putnam Investments, or any of its products or services.

Lipper,  a Refinitiv company, is a third-party industry-ranking entity that ranks mutual funds. Its rankings do not reflect sales charges. Lipper rankings are based on total return at net asset value relative to other funds that have similar current investment styles or objectives as determined by Lipper. Lipper may change a fund’s category assignment at its discretion. Lipper category medians reflect performance trends for funds within a category.

 

 

Other information for shareholders

Proxy voting

Putnam is committed to managing our mutual funds in the best interests of our shareholders. The Putnam funds’ proxy voting guidelines and procedures, as well as information regarding how your fund voted proxies relating to portfolio securities during the 12-month period ended June 30, 2022, are available in the Individual Investors section of putnam.com and on the Securities and Exchange Commission (SEC) website, www.sec.gov. If you have questions about finding forms on the SEC’s website, you may call the SEC at 1-800-SEC-0330. You may also obtain the Putnam funds’ proxy voting guidelines and procedures at no charge by calling Putnam’s Shareholder Services at 1-800-225-1581.

Fund portfolio holdings

The fund will file a complete schedule of its portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-PORT within 60 days of the end of such fiscal quarter. Shareholders may obtain the fund’s Form N-PORT on the SEC’s website at www.sec.gov.

Prior to its use of Form N-PORT, the fund filed its complete schedule of its portfolio holdings with the SEC on Form N-Q, which is available online at www.sec.gov.

Trustee and employee fund ownership

Putnam employees and members of the Board of Trustees place their faith, confidence, and, most importantly, investment dollars in Putnam mutual funds. As of November 30, 2022, Putnam employees had approximately $471,000,000 and the Trustees had approximately $64,000,000 invested in Putnam mutual funds. These amounts include investments by the Trustees’ and employees’ immediate family members as well as investments through retirement and deferred compensation plans.

 

 

Important notice regarding Putnam’s privacy policy

In order to conduct business with our shareholders, we must obtain certain personal information such as account holders’ names, addresses, Social Security numbers, and dates of birth. Using this information, we are able to maintain accurate records of accounts and transactions.

It is our policy to protect the confidentiality of our shareholder information, whether or not a shareholder currently owns shares of our funds. In particular, it is our policy not to sell information about you or your accounts to outside marketing firms. We have safeguards in place designed to prevent unauthorized access to our computer systems and procedures to protect personal information from unauthorized use.

Under certain circumstances, we must share account information with outside vendors who provide services to us, such as mailings and proxy solicitations. In these cases, the service providers enter into confidentiality agreements with us, and we provide only the information necessary to process transactions and perform other services related to your account. Finally, it is our policy to share account information with your financial representative, if you’ve listed one on your Putnam account.

 

 

Trustee approval of management contract

General conclusions

The Board of Trustees of The Putnam Funds oversees the management of each fund and, as required by law, determines annually whether to approve the continuance of your fund’s management contract with Putnam Investment Management, LLC (“Putnam Management”) and the sub-management contract with respect to your fund between Putnam Management and its affiliate, Putnam Investments Limited (“PIL”). The Board, with the assistance of its Contract Committee, requests and evaluates all information it deems reasonably necessary under the circumstances in connection with its annual contract review. The Contract Committee consists solely of Trustees who are not “interested persons” (as this term is defined in the Investment Company Act of 1940, as amended (the “1940 Act”)) of The Putnam Funds (“Independent Trustees”).

At the outset of the review process, members of the Board’s independent staff and independent legal counsel considered any possible changes to the annual contract review materials furnished to the Contract Committee during the course of the previous year’s review and, as applicable, identified those changes to Putnam Management. Following these discussions and in consultation with the Contract Committee, the Independent Trustees’ independent legal counsel requested that Putnam Management and its affiliates furnish specified information, together with any additional information that Putnam Management considered relevant, to the Contract Committee. Over the course of several months ending in June 2022, the Contract Committee met on a number of occasions with representatives of Putnam Management, and separately in executive session, to consider the information that Putnam Management provided. Throughout this process, the Contract Committee was assisted by the members of the Board’s independent staff and by independent legal counsel for The Putnam Funds and the Independent Trustees.

In May 2022, the Contract Committee met in executive session to discuss and consider its recommendations with respect to the continuance of the contracts. At the Trustees’ June 2022 meeting, the Contract Committee met in executive session with the other Independent Trustees to review a summary of the key financial, performance and other data that the Contract Committee considered in the course of its review. The Contract Committee then presented its written report, which summarized the key factors that the Committee had considered and set forth its recommendations. The Contract Committee recommended, and the Independent Trustees approved, the continuance of your fund’s management contract and the approval of your fund’s amended and restated sub-management contract, effective July 1, 2022. (Because PIL is an affiliate of Putnam Management and Putnam Management remains fully responsible for all services provided by PIL, the Trustees have not attempted to evaluate PIL as a separate entity, and all subsequent references to Putnam Management below should be deemed to include reference to PIL as necessary or appropriate in the context.)

The Independent Trustees’ approval was based on the following conclusions:

• That the fee schedule in effect for your fund represented reasonable compensation in light of the nature and quality of the services being provided to the fund, the fees paid by competitive funds, the costs incurred by Putnam Management in providing services to the fund and the application of certain reductions and waivers noted below; and

• That the fee schedule in effect for your fund represented an appropriate sharing between fund shareholders and Putnam Management of any economies of scale as may exist in the management of the fund at current asset levels.

These conclusions were based on a comprehensive consideration of all information provided to the Trustees and were not the result of any single factor. Some of the factors that figured particularly in the Trustees’ deliberations and how the Trustees considered these factors are described below, although individual Trustees may have evaluated the information presented differently, giving different weights to various factors. It is also important to recognize that the management arrangements for your fund and the other Putnam funds are the result of many years of review and discussion between the Independent Trustees and Putnam Management, that some aspects of the arrangements may receive greater scrutiny in some years than others and that the Trustees’ conclusions may be based, in part, on their consideration of fee arrangements in previous years. For example,

 

 

with certain exceptions primarily involving newer or repositioned funds, the current fee arrangements under the vast majority of the funds’ management contracts were first implemented at the beginning of 2010 following extensive review by the Contract Committee and discussions with representatives of Putnam Management, as well as approval by shareholders.

Management fee schedules and total expenses

The Trustees reviewed the management fee schedules in effect for all Putnam funds, including fee levels and breakpoints. Under its management contract, your fund has the benefit of breakpoints in its management fee schedule that provide shareholders with reduced fee levels as assets under management in the Putnam family of funds increase. The Trustees also reviewed the total expenses of each Putnam fund, recognizing that in most cases management fees represented the major, but not the sole, determinant of total costs to fund shareholders. (Two funds have implemented so-called “all-in” management fees covering substantially all routine fund operating costs.) The Trustees considered that the proposed amended and restated sub-management contract would lower the sub-management fees paid by Putnam Management to PIL.

In reviewing fees and expenses, the Trustees generally focus their attention on material changes in circumstances — for example, changes in assets under management, changes in a fund’s investment strategy, changes in Putnam Management’s operating costs or profitability, or changes in competitive practices in the mutual fund industry — that suggest that consideration of fee changes might be warranted. The Trustees concluded that the circumstances did not indicate that changes to the management fee schedule for your fund would be appropriate at this time.

As in the past, the Trustees also focused on the competitiveness of each fund’s total expense ratio. The Trustees and Putnam Management and the funds’ investor servicing agent, Putnam Investor Services, Inc. (“PSERV”), have implemented expense limitations that were in effect during your fund’s fiscal year ending in 2021. These expense limitations were: (i) a contractual expense limitation applicable to specified open-end funds, including your fund, of 25 basis points on investor servicing fees and expenses and (ii) a contractual expense limitation applicable to specified open-end funds, including your fund, of 20 basis points on so-called “other expenses” (i.e., all expenses exclusive of management fees, distribution fees, investor servicing fees, investment-related expenses, interest, taxes, brokerage commissions, acquired fund fees and expenses and extraordinary expenses). These expense limitations attempt to maintain competitive expense levels for the funds. Most funds, including your fund, had sufficiently low expenses that these expense limitations were not operative during their fiscal years ending in 2021. Putnam Management and PSERV have agreed to maintain these expense limitations until at least March 30, 2024. Putnam Management and PSERV’s commitment to these expense limitation arrangements, which were intended to support an effort to have fund expenses meet competitive standards, was an important factor in the Trustees’ decision to approve the continuance of your fund’s management contract and to approve your fund’s amended and restated sub-management contract.

The Trustees reviewed comparative fee and expense information for a custom group of competitive funds selected by Broadridge Financial Solutions, Inc. (“Broadridge”). This comparative information included your fund’s percentile ranking for effective management fees and total expenses (excluding any applicable 12b-1 fees), which provides a general indication of your fund’s relative standing. In the custom peer group, your fund ranked in the first quintile in effective management fees (determined for your fund and the other funds in the custom peer group based on fund asset size and the applicable contractual management fee schedule) and in the second quintile in total expenses (excluding any applicable 12b-1 fees) as of December 31, 2021. The first quintile represents the least expensive funds and the fifth quintile the most expensive funds. The fee and expense data reported by Broadridge as of December 31, 2021 reflected the most recent fiscal year-end data available in Broadridge’s database at that time.

In connection with their review of fund management fees and total expenses, the Trustees also reviewed the costs of the services provided and the profits realized by Putnam Management and its affiliates from their contractual relationships with the funds. This information included trends in revenues, expenses and profitability of Putnam Management and its affiliates relating to the investment management, investor servicing and distribution services provided to the funds. In

 

 

this regard, the Trustees also reviewed an analysis of the revenues, expenses and profitability of Putnam Management and its affiliates, allocated on a fund-by-fund basis, with respect to the funds’ management, distribution and investor servicing contracts. For each fund, the analysis presented information about revenues, expenses and profitability for each of the agreements separately and for the agreements taken together on a combined basis. The Trustees concluded that, at current asset levels, the fee schedules in place for the Putnam funds, including the fee schedule for your fund, represented reasonable compensation for the services being provided and represented an appropriate sharing between fund shareholders and Putnam Management of any economies of scale as may exist in the management of the Putnam funds at that time.

The information examined by the Trustees in connection with their annual contract review for the Putnam funds included information regarding services provided and fees charged by Putnam Management and its affiliates to other clients, including collective investment trusts offered in the defined contribution and defined benefit retirement plan markets, sub-advised mutual funds, private funds sponsored by affiliates of Putnam Management, model-only separately managed accounts and Putnam Management’s exchange-traded funds. This information included, in cases where a product’s investment strategy corresponds with a fund’s strategy, comparisons of those fees with fees charged to the Putnam funds, as well as an assessment of the differences in the services provided to these clients as compared to the services provided to the Putnam funds. The Trustees observed that the differences in fee rates between these clients and the Putnam funds are by no means uniform when examined by individual asset sectors, suggesting that differences in the pricing of investment management services to these types of clients may reflect, among other things, historical competitive forces operating in separate marketplaces. The Trustees considered the fact that in many cases fee rates across different asset classes are higher on average for mutual funds than for other clients, and the Trustees also considered the differences between the services that Putnam Management provides to the Putnam funds and those that it provides to its other clients. The Trustees did not rely on these comparisons to any significant extent in concluding that the management fees paid by your fund are reasonable.

Investment performance

The quality of the investment process provided by Putnam Management represented a major factor in the Trustees’ evaluation of the quality of services provided by Putnam Management under your fund’s management contract. The Trustees were assisted in their review of Putnam Management’s investment process and performance by the work of the investment oversight committees of the Trustees and the full Board of Trustees, which meet on a regular basis with individual portfolio managers and with senior management of Putnam Management’s Investment Division throughout the year. The Trustees concluded that Putnam Management generally provides a high-quality investment process — based on the experience and skills of the individuals assigned to the management of fund portfolios, the resources made available to them and in general Putnam Management’s ability to attract and retain high-quality personnel — but also recognized that this does not guarantee favorable investment results for every fund in every time period.

The Trustees considered that, in the aggregate, the Putnam funds’ performance was generally solid in 2021 against a backdrop of strong U.S. economic and financial market growth. The Trustees considered Putnam Management’s observation that, despite an environment of generally strong growth, there had been various headwinds experienced in 2021. For the one-year period ended December 31, 2021, the Trustees noted that the Putnam funds, on an asset-weighted basis, ranked in the 52nd percentile of their peers as determined by Lipper Inc. (“Lipper”) and, on an asset-weighted-basis, delivered a gross return that trailed their benchmarks by 0.1%. Over the longer-term, the Committee noted that, on an asset-weighted basis, the Putnam funds delivered strong aggregate performance relative to their Lipper peers over the three-, five- and ten-year periods ended December 31, 2021, ranking in the 31st, 29th and 21st percentiles, respectively, and that the funds, in the aggregate, outperformed their benchmarks on a gross basis for each of those periods.

In addition to the performance of the individual Putnam funds, the Trustees considered, as they had in prior years, the performance of The Putnam Fund complex versus competitor fund complexes. In particular, the Trustees considered The Putnam Fund complex’s performance as reported in the Barron’s/Lipper Fund Families survey (the “Survey”), which ranks mutual fund companies

 

 

based on their performance across a variety of asset types. The Trustees noted that The Putnam Fund complex continued to rank highly in the Survey, especially over the longer-term, with The Putnam Funds ranking as the 6th best performing mutual fund complex out of 45 complexes for the ten-year period and 13th out of 49 complexes for the five-year period. The Trustees noted that 2021 marked the fifth consecutive year that The Putnam Funds have ranked in the top ten fund complexes for the ten-year period. The Trustees also considered that The Putnam Fund complex’s Survey performance over the one-year period was solid, with The Putnam Funds ranking 27th out of 51 complexes. In addition to the Survey, the Trustees also considered the Putnam funds’ ratings assigned by Morningstar Inc., noting that 25 of the funds were four- or five-star rated at the end of 2021 (representing a decrease of one fund year-over-year) and that this included nine funds that had achieved a five-star rating (representing an increase of two funds year-over-year). They also noted, however, the disappointing investment performance of some Putnam funds for periods ended December 31, 2021 and considered information provided by Putnam Management regarding the factors contributing to the underperformance and actions being taken to improve the performance of these particular funds. The Trustees indicated their intention to continue to monitor closely the performance of those funds and evaluate whether additional actions to address areas of underperformance may be warranted.

For purposes of the Trustees’ evaluation of the Putnam funds’ investment performance, the Trustees generally focus on a competitive industry ranking of each fund’s total net return over a one-year, three-year and five-year period. For a number of Putnam funds with relatively unique investment mandates for which Putnam Management informed the Trustees that meaningful competitive performance rankings are not considered to be available, the Trustees evaluated performance based on their total gross and net returns and comparisons of those returns to the returns of selected investment benchmarks. In the case of your fund, the Trustees considered that its class A share cumulative total return performance at net asset value was in the following quartiles of its Lipper peer group (Lipper New York Municipal Debt Funds) for the one-year, three-year and five-year periods ended December 31, 2021 (the first quartile representing the best-performing funds and the fourth quartile the worst-performing funds):

 

Over the one-year, three-year and five-year periods ended December 31, 2021, there were 99, 92 and 81 funds, respectively, in your fund’s Lipper peer group. (When considering performance information, shareholders should be mindful that past performance is not a guarantee of future results.)

The Trustees considered Putnam Management’s continued efforts to support fund performance through certain initiatives, including structuring compensation for portfolio managers to enhance accountability for fund performance, emphasizing accountability in the portfolio management process and affirming its commitment to a fundamental-driven approach to investing. The Trustees noted further that Putnam Management had made selective hires and internal promotions in 2021 to strengthen its investment team.

Brokerage and soft-dollar allocations; investor servicing

The Trustees considered various potential benefits that Putnam Management may receive in connection with the services it provides under the management contract with your fund. These include benefits related to brokerage allocation and the use of soft dollars, whereby a portion of the commissions paid by a fund for brokerage may be used to acquire research services that are expected to be useful to Putnam Management in managing the assets of the fund and of other clients. Subject to policies established by the Trustees, soft dollars generated by these means are used predominantly to acquire brokerage and research services (including third-party research and market data) that enhance Putnam Management’s investment capabilities and supplement Putnam Management’s internal research efforts. The Trustees indicated their continued intent to monitor regulatory and industry developments in this area with the assistance of their Brokerage Committee. In addition, with the assistance of their Brokerage Committee, the Trustees indicated their continued intent to monitor the allocation of the Putnam funds’ brokerage in order to ensure that the principle of seeking best price and execution remains paramount in the portfolio trading process.

 

 

Putnam Management may also receive benefits from payments that the funds make to Putnam Management’s affiliates for investor or distribution services. In conjunction with the annual review of your fund’s management and sub-management contracts, the Trustees reviewed your fund’s investor servicing agreement with PSERV and its distributor’s contract and distribution plans with Putnam Retail Management Limited Partnership (“PRM”), both of which are affiliates of Putnam Management. The Trustees concluded that the fees payable by the funds to PSERV and PRM, as applicable, for such services are fair and reasonable in relation to the nature and quality of such services, the fees paid by competitive funds and the costs incurred by PSERV and PRM, as applicable, in providing such services. Furthermore, the Trustees were of the view that the investor services provided by PSERV were required for the operation of the funds, and that they were of a quality at least equal to those provided by other providers.

 

 

Audited financial statements

These sections of the report, as well as the accompanying Notes, preceded by the Report of Independent Registered Public Accounting Firm, constitute the fund’s audited financial statements.

The fund’s portfolio lists all the fund’s investments and their values as of the last day of the reporting period. Holdings are organized by asset type and industry sector, country, or state to show areas of concentration and diversification.

Statement of assets and liabilities shows how the fund’s net assets and share price are determined. All investment and non-investment assets are added together. Any unpaid expenses and other liabilities are subtracted from this total. The result is divided by the number of shares to determine the net asset value per share, which is calculated separately for each class of shares. (For funds with preferred shares, the amount subtracted from total assets includes the liquidation preference of preferred shares.)

Statement of operations shows the fund’s net investment gain or loss. This is done by first adding up all the fund’s earnings — from dividends and interest income — and subtracting its operating expenses to determine net investment income (or loss). Then, any net gain or loss the fund realized on the sales of its holdings — as well as any unrealized gains or losses over the period — is added to or subtracted from the net investment result to determine the fund’s net gain or loss for the fiscal period.

Statement of changes in net assets shows how the fund’s net assets were affected by the fund’s net investment gain or loss, by distributions to shareholders, and by changes in the number of the fund’s shares. It lists distributions and their sources (net investment income or realized capital gains) over the current reporting period and the most recent fiscal year-end. The distributions listed here may not match the sources listed in the Statement of operations because the distributions are determined on a tax basis and may be paid in a different period from the one in which they were earned.

Financial highlights provide an overview of the fund’s investment results, per-share distributions, expense ratios, net investment income ratios, and portfolio turnover in one summary table, reflecting the five most recent reporting periods. In a semiannual report, the highlights table also includes the current reporting period.

 

 

Report of Independent Registered Public Accounting Firm

To the Board of Trustees and Shareholders of
Putnam New York Tax Exempt Income Fund:

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the fund’s portfolio, of Putnam New York Tax Exempt Income Fund (the “Fund”) as of November 30, 2022, the related statement of operations for the year ended November 30, 2022, the statement of changes in net assets for each of the two years in the period ended November 30, 2022, including the related notes, and the financial highlights for each of the three years in the period ended November 30, 2022 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of November 30, 2022, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended November 30, 2022 and the financial highlights for each of the three years in the period ended November 30, 2022 in conformity with accounting principles generally accepted in the United States of America.

The financial statements of the Fund as of and for the year ended November 30, 2019 and the financial highlights for each of the periods ended on or prior to November 30, 2019 (not presented herein, other than the financial highlights) were audited by other auditors whose report dated January 8, 2020 expressed an unqualified opinion on those financial statements and financial highlights.

Basis for Opinion

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

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

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of November 30, 2022 by correspondence with the custodian, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Boston, Massachusetts
January 9, 2023

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

 

 

The fund’s portfolio 11/30/22

Key to holding’s abbreviations

 

MUNICIPAL BONDS AND NOTES (102.7%)*	Rating**		Principal amount	Value
Alaska (1.1%)
AK State Indl. Dev. & Export Auth. Rev. Bonds, (Tanana Chiefs Conference), Ser. A
4.00%, 10/1/37	A+/F		$4,635,000	$4,516,897
4.00%, 10/1/35	A+/F		4,280,000	4,201,900
				8,718,797
Guam (0.2%)
Territory of GU, Intl. Arpt. Auth. Rev. Bonds, (Antonio B Won Pat Intl. Arpt. Auth.), Ser. A
5.375%, 10/1/40 ##	Baa2		525,000	507,492
5.25%, 10/1/36 ##	Baa2		680,000	660,312
5.125%, 10/1/34 ##	Baa2		390,000	380,829
				1,548,633
New York (101.3%)
Albany, Cap. Resource Corp. Rev. Bonds
(Albany College of Pharmacy & Hlth. Sciences), Ser. A, 5.00%, 12/1/33	BBB+		325,000	328,535
(Albany College of Pharmacy & Hlth. Sciences), Ser. A, 5.00%, 12/1/32	BBB+		495,000	501,234
(Empire Commons Student Hsg., Inc.), Ser. A, 5.00%, 5/1/32	A		265,000	270,906
(Albany College of Pharmacy & Hlth. Sciences), Ser. A, 5.00%, 12/1/31	BBB+		115,000	116,600
(Empire Commons Student Hsg., Inc.), Ser. A, 5.00%, 5/1/31	A		1,150,000	1,181,513
(Albany College of Pharmacy & Hlth. Sciences), Ser. A, 5.00%, 12/1/30	BBB+		250,000	253,834
(Empire Commons Student Hsg., Inc.), Ser. A, 5.00%, 5/1/30	A		700,000	719,856
(Empire Commons Student Hsg., Inc.), Ser. A, 5.00%, 5/1/29	A		590,000	608,063
(Empire Commons Student Hsg., Inc.), 5.00%, 5/1/28	A		200,000	206,639
(Empire Commons Student Hsg., Inc.), Ser. A, 5.00%, 5/1/25	A		580,000	596,700
Brookhaven, Local Dev. Corp. Rev. Bonds
(Jeffersons Ferry), 5.25%, 11/1/36	BBB/F		1,200,000	1,226,736
(Brookhaven Memorial Hosp. Med. Ctr., Inc. Oblig. Group), 4.00%, 10/1/45	A−		2,000,000	1,859,135

MUNICIPAL BONDS AND NOTES (102.7%)* cont.	Rating**		Principal amount	Value
New York cont.
Broome Cnty., Local Dev. Corp. Rev. Bonds
(United Hlth. Svcs. Hosp. Oblig. Group), AGM, 4.00%, 4/1/50	AA		$1,300,000	$1,170,937
(Good Shepherd Village at Endwell Oblig. Group), 4.00%, 1/1/47	BBB−/F		1,160,000	861,301
(Good Shepherd Village at Endwell Oblig. Group), 4.00%, 7/1/41	BBB−/F		1,530,000	1,210,357
(United Hlth. Svcs. Hosp. Oblig. Group), AGM, 4.00%, 4/1/40	AA		1,350,000	1,307,190
(United Hlth. Svcs. Hosp. Oblig. Group), AGM, 4.00%, 4/1/39	AA		1,295,000	1,262,687
(United Hlth. Svcs. Hosp. Oblig. Group), AGM, 4.00%, 4/1/38	AA		1,185,000	1,160,937
(United Hlth. Svcs. Hosp. Oblig. Group), AGM, 4.00%, 4/1/34	AA		1,000,000	1,006,822
Buffalo & Erie Cnty., Indl. Land Dev. Corp. Rev. Bonds
(Orchard Pk.), 5.00%, 11/15/37	BBB/F		4,470,000	4,510,140
(Charter School for Applied Tech.), Ser. A, 5.00%, 6/1/35	BBB		2,000,000	2,070,697
(Orchard Pk.), 5.00%, 11/15/30	BBB/F		500,000	508,627
(D’Youville College), 4.00%, 11/1/50	BBB		6,535,000	5,841,881
(D’Youville College), 4.00%, 11/1/40	BBB		1,000,000	937,724
(D’Youville College), 4.00%, 11/1/35	BBB		1,025,000	996,641
Buffalo & Fort Erie, Pub. Bridge Auth. Rev. Bonds
5.00%, 1/1/42	A+		2,250,000	2,340,808
(Toll Bridge Syst.), 5.00%, 1/1/24	A+		250,000	256,103
Build NY City Resource Corp. Rev. Bonds
(Global Cmnty. Charter School), 5.00%, 6/15/57	BB+		1,300,000	1,172,245
(Grand Concourse Academy Charter School), 5.00%, 7/1/52	BBB−		1,425,000	1,423,739
(Global Cmnty. Charter School), 5.00%, 6/15/52	BB+		1,520,000	1,399,236
(Manhattan College), 5.00%, 8/1/47	A−		1,000,000	1,021,681
(Grand Concourse Academy Charter School), 5.00%, 7/1/42	BBB−		550,000	557,275
(Global Cmnty. Charter School), 5.00%, 6/15/42	BB+		850,000	808,267
(Children’s Aid Society (The)), 5.00%, 7/1/40	A+		3,175,000	3,223,957
(South Bronx Charter School for Intl. Cultures & the Arts), Ser. A, 5.00%, 4/15/33	BB+		2,000,000	1,982,339
(Bronx Charter School for Excellence), Ser. A, 5.00%, 4/1/33	BBB−		620,000	622,081
(New World Preparatory Charter School), Ser. A, 4.00%, 6/15/56	BB−/P		450,000	324,675
(New World Preparatory Charter School), Ser. A, 4.00%, 6/15/51	BB−/P		690,000	516,191
(Children’s Aid Society (The)), 4.00%, 7/1/49	A+		1,000,000	909,929
(Children’s Aid Society (The)), 4.00%, 7/1/44	A+		450,000	417,466
(New World Preparatory Charter School), Ser. A, 4.00%, 6/15/41	BB−/P		525,000	429,403
(Children’s Aid Society (The)), 4.00%, 7/1/38	A+		290,000	287,569
(Children’s Aid Society (The)), 4.00%, 7/1/36	A+		125,000	124,774
(Academic Leadership Charter School), 4.00%, 6/15/36	BBB−		400,000	369,322

MUNICIPAL BONDS AND NOTES (102.7%)* cont.	Rating**		Principal amount	Value
New York cont.
Build NY City Resource Corp. Rev. Bonds
(Academic Leadership Charter School), 4.00%, 6/15/31	BBB−		$100,000	$97,278
(Academic Leadership Charter School), 4.00%, 6/15/30	BBB−		100,000	98,105
(Academic Leadership Charter School), 4.00%, 6/15/29	BBB−		110,000	108,533
(Academic Leadership Charter School), 4.00%, 6/15/28	BBB−		100,000	99,162
(Academic Leadership Charter School), 4.00%, 6/15/27	BBB−		100,000	99,391
Build NY City Resource Corp. 144A Rev. Bonds
(Inwood Academy Leadership Charter School), Ser. A, 5.125%, 5/1/38	BB/P		1,100,000	1,071,935
(Brilla College Preparatory Charter Schools), 4.00%, 11/1/51	BB+		1,000,000	736,767
(Brilla College Preparatory Charter Schools), 4.00%, 11/1/41	BB+		1,780,000	1,430,653
(Brilla College Preparatory Charter Schools), 4.00%, 11/1/31	BB+		1,265,000	1,171,418
Build NY City Resource Corp. Solid Waste Disp. 144A Rev. Bonds, (Pratt Paper NY, Inc.), 5.00%, 1/1/35	B+/P		1,750,000	1,770,248
Dutchess Cnty., Local Dev. Corp. Rev. Bonds
(Marist College), 5.00%, 7/1/52	A2		9,000,000	9,349,972
(Culinary Inst. of America (The)), 5.00%, 7/1/35	Baa2		155,000	158,474
(Culinary Inst. of America (The)), 5.00%, 7/1/32	Baa2		1,065,000	1,098,423
(Nuvance Hlth. Oblig. Group), Ser. B, 4.00%, 7/1/49	BBB+		2,250,000	1,944,844
(Culinary Inst. of America (The)), 4.00%, 7/1/40	Baa2		100,000	90,677
(Culinary Inst. of America (The)), 4.00%, 7/1/39	Baa2		100,000	91,538
(Culinary Inst. of America (The)), 4.00%, 7/1/38	Baa2		200,000	184,435
(Culinary Inst. of America (The)), 4.00%, 7/1/37	Baa2		175,000	162,824
(Culinary Inst. of America (The)), 4.00%, 7/1/36	Baa2		175,000	164,513
(Culinary Inst. of America (The)), 4.00%, 7/1/35	Baa2		175,000	166,067
Dutchess Cnty., Local Dev. Corp. 144A Rev. Bonds, (Bard College), Ser. A
5.00%, 7/1/51	BB+		2,400,000	2,176,803
5.00%, 7/1/45	BB+		8,500,000	7,871,066
5.00%, 7/1/40	BB+		1,000,000	948,385
Erie Cnty., Fiscal Stability Auth. Rev. Bonds, (Sales Tax & State Aid), Ser. D
5.00%, 9/1/39	Aa1		515,000	554,738
5.00%, 9/1/38	Aa1		1,500,000	1,617,945
5.00%, 9/1/36	Aa1		1,500,000	1,627,826
5.00%, 9/1/35	Aa1		1,250,000	1,361,600
Hempstead Town, Local Dev. Corp. Rev. Bonds
(Molloy College), 5.00%, 7/1/48	BBB		1,000,000	1,012,286
(Hofstra U.), 5.00%, 7/1/47	A2		1,000,000	1,025,099
(Molloy College), 5.00%, 7/1/44	BBB		2,300,000	2,318,670
(Molloy College), 5.00%, 7/1/43	BBB		1,025,000	1,043,279
(Hofstra U.), 5.00%, 7/1/42	A2		1,200,000	1,239,623
(Molloy College), 5.00%, 7/1/38	BBB		865,000	885,660

MUNICIPAL BONDS AND NOTES (102.7%)* cont.	Rating**		Principal amount	Value
New York cont.
Hempstead Town, Local Dev. Corp. Rev. Bonds
(Molloy College), 5.00%, 7/1/38	BBB		$480,000	$489,611
(Molloy College), 5.00%, 7/1/37	BBB		315,000	322,062
(Adelphi U.), 5.00%, 2/1/34	A−		200,000	215,194
(Adelphi U.), 5.00%, 2/1/33	A−		205,000	221,476
(Adelphi U.), 5.00%, 6/1/32	A−		200,000	221,648
(Adelphi U.), 5.00%, 2/1/32	A−		230,000	249,070
(Adelphi U.), 5.00%, 2/1/31	A−		200,000	217,201
(Adelphi U.), 5.00%, 6/1/30	A−		200,000	220,514
(Adelphi U.), 5.00%, 2/1/30	A−		155,000	168,471
(Adelphi U.), 5.00%, 6/1/27	A−		600,000	640,292
(Adelphi U.), 5.00%, 6/1/26	A−		345,000	363,537
(Adelphi U.), 4.00%, 2/1/39	A−		1,000,000	948,068
Huntington, Local Dev. Corp. Rev. Bonds, (Gurwin Indpt. Hsg. Oblig. Group), Ser. A, 5.25%, 7/1/56	B−/P		1,000,000	774,743
Liberty, Dev. Corp. Rev. Bonds, (Goldman Sachs Headquarters)
5.50%, 10/1/37	A2		4,010,000	4,489,920
5.25%, 10/1/35	A2		4,000,000	4,394,406
Long Island, Pwr. Auth. Elec. Syst. Rev. Bonds
Ser. B, 5.00%, 9/1/46	A2		2,500,000	2,592,536
Ser. B, 5.00%, 9/1/45	A2		2,000,000	2,083,303
5.00%, 9/1/42	A2		2,000,000	2,098,873
5.00%, 9/1/37	A2		1,000,000	1,063,561
5.00%, 9/1/36	A2		1,000,000	1,068,336
Ser. B, 5.00%, 9/1/36	A2		6,500,000	6,856,502
5.00%, 9/1/35	A2		1,000,000	1,072,324
5.00%, 9/1/34	A2		1,000,000	1,077,407
5.00%, 9/1/33	A2		500,000	540,986
Ser. A, 3.00%, 9/1/40	A2		1,000,000	827,953
Metro. Trans. Auth. Rev. Bonds
(Green Bonds), Ser. C, BAM, 5.00%, 11/15/42	AA		10,000,000	10,561,196
Ser. B, 5.00%, 11/15/33	A3		5,220,000	5,325,155
Ser. D-1, 5.00%, 11/15/33	A3		960,000	971,509
Ser. A-1, 4.00%, 11/15/49	A3		2,000,000	1,668,122
(Green Bond), Ser. A-1, 4.00%, 11/15/47	A3		3,000,000	2,528,050
Metro. Trans. Auth. Dedicated Tax Rev. Bonds
Ser. A, 5.25%, 11/15/33	AA		6,340,000	6,841,649
(Green Bonds), Ser. B-1, 5.00%, 11/15/36	AA		3,500,000	3,665,829
(Green Bonds), Ser. B-1, 5.00%, 11/15/34	AA		3,500,000	3,725,016
Metro. Trans. Auth. Hudson Rail Yards Trust Oblig. Rev. Bonds, Ser. A, 5.00%, 11/15/51	A3		9,500,000	9,502,550
Monroe Cnty., Indl. Dev. Corp. Rev. Bonds
(Rochester Gen. Hosp.), 5.00%, 12/1/46	BBB+		3,000,000	3,032,672
(Rochester Gen. Hosp.), Ser. A, 5.00%, 12/1/37	BBB+		2,000,000	2,000,958
(Rochester Gen. Hosp.), 5.00%, 12/1/35	BBB+		600,000	617,565
(U. of Rochester), Ser. A, 5.00%, 7/1/33	Aa3		1,000,000	1,045,659
(Rochester Gen. Hosp.), Ser. A, 5.00%, 12/1/32	BBB+		1,250,000	1,251,181
(St. John Fisher College), Ser. A, 5.00%, 6/1/29	A−		800,000	817,532
(U. of Rochester), 4.00%, 7/1/50	Aa3		3,500,000	3,282,946

MUNICIPAL BONDS AND NOTES (102.7%)* cont.	Rating**		Principal amount	Value
New York cont.
Monroe Cnty., Indl. Dev. Corp. Rev. Bonds
(Rochester Regl. Hlth. Oblig. Group), 4.00%, 12/1/46	BBB+		$1,250,000	$1,076,713
(Highland Hosp.), 4.00%, 7/1/40	A2		3,890,000	3,774,897
(U. of Rochester), Ser. C, 4.00%, 7/1/36	Aa3		850,000	852,480
(U. of Rochester), Ser. D, 4.00%, 7/1/36	Aa3		750,000	752,188
(U. of Rochester), Ser. C, 4.00%, 7/1/35	Aa3		1,000,000	1,007,808
(U. of Rochester), Ser. D, 4.00%, 7/1/34	Aa3		1,000,000	1,013,905
(U. of Rochester), Ser. C, 4.00%, 7/1/33	Aa3		1,500,000	1,530,489
(U. of Rochester), Ser. C, 4.00%, 7/1/32	Aa3		1,600,000	1,644,275
(U. of Rochester), Ser. D, 4.00%, 7/1/32	Aa3		1,000,000	1,027,672
Monroe Cnty., Indl. Dev. Corp. 144A Rev. Bonds, (True North Rochester Preparatory Charter School), 5.00%, 6/1/59	Baa3		4,120,000	4,015,118
Nassau Cnty., Local Econ. Assistance Corp. Rev. Bonds, (Catholic Hlth. Svcs. of Long Island Oblig. Group)
5.00%, 7/1/33	A−		1,355,000	1,382,688
5.00%, 7/1/32	A−		1,500,000	1,533,134
Nassau Cnty., Tobacco Settlement Corp. Rev. Bonds, Ser. A-2, 5.25%, 6/1/26	Caa1		5,098,565	4,993,437
New Rochelle, Corp. Local Dev. Rev. Bonds, (Iona College), Ser. A, 5.00%, 7/1/40	Baa2		350,000	356,252
Niagara Falls, Rev. Bonds, Ser. A, BAM, 4.00%, 10/1/44	AA		500,000	504,450
Niagara Frontier Trans. Auth. Rev. Bonds, (Buffalo Niagara Intl. Arpt.), Ser. A
5.00%, 4/1/39	A3		1,040,000	1,066,435
5.00%, 4/1/37	A3		1,000,000	1,031,515
5.00%, 4/1/35	A3		200,000	207,916
5.00%, 4/1/24	A3		2,000,000	2,048,786
NY City, G.O. Bonds
Ser. B-1, 5.25%, 10/1/47	Aa2		4,800,000	5,312,977
Ser. B-1, 5.25%, 10/1/43	Aa2		1,500,000	1,675,273
Ser. F-1, 5.00%, 4/1/43 T	Aa2		9,440,000	9,924,319
Ser. E-1, 5.00%, 3/1/40	Aa2		5,000,000	5,282,660
Ser. B-1, 5.00%, 12/1/35	Aa2		2,000,000	2,126,815
Ser. A, 4.00%, 8/1/42	Aa2		10,000,000	9,795,767
Ser. D-1, 4.00%, 3/1/42	Aa2		3,000,000	2,940,550
NY City, VRDN
Ser. I-8, 1.05%, 4/1/36	VMIG 1		3,655,000	3,655,000
Ser. I-2, 1.00%, 3/1/40	VMIG 1		15,500,000	15,500,000
NY City, Hlth. & Hosp. Corp. Rev. Bonds, Ser. A
4.00%, 2/15/48	Aa3		880,000	846,654
4.00%, 2/15/45	Aa3		1,810,000	1,763,173
NY City, Hsg. Dev. Corp. Rev. Bonds
(Sustainable Neighborhoods), Ser. A-1, 4.15%, 11/1/38 T	AA2		24,480,000	24,421,809
Ser. J, 3.25%, 11/1/59	AA+		7,570,000	5,422,010
(Sustainable Dev.), Ser. A-1, 3.05%, 11/1/42	AA+		3,195,000	2,518,257

MUNICIPAL BONDS AND NOTES (102.7%)* cont.	Rating**		Principal amount	Value
New York cont.
NY City, Indl. Dev. Agcy. Rev. Bonds
(Yankee Stadium, LLC), AGM, 4.00%, 3/1/45	AA		$1,000,000	$932,959
(Queens Ballpark Co., LLC), Ser. A, AGM, 3.00%, 1/1/46	AA		4,550,000	3,397,219
(Queens Ballpark Co., LLC), AGM, 3.00%, 1/1/33	AA		3,810,000	3,525,913
NY City, Indl. Dev. Agcy. Arpt. Fac. Rev. Bonds, (Sr. Trips), Ser. A, 5.00%, 7/1/28	BBB+		1,500,000	1,500,647
NY City, Muni. Wtr. & Swr. Syst. Fin. Auth. Rev. Bonds
Ser. AA-1, 5.00%, 6/15/48	Aa1		2,090,000	2,240,473
(2nd Gen. Resolution), 5.00%, 6/15/46	Aa1		12,460,000	12,829,635
Ser. BB-1, 3.00%, 6/15/44	Aa1		2,500,000	2,013,996
NY City, Muni. Wtr. & Swr. Syst. Fin. Auth. VRDN, Ser. DD-1, 1.00%, 6/15/43	VMIG 1		6,835,000	6,835,000
NY City, Transitional Fin. Auth. Rev. Bonds
5.50%, 11/1/45	AAA		10,000,000	11,393,382
(Future Tax Secd.), Ser. B, 5.25%, 11/1/38	AAA		3,835,000	4,351,593
5.00%, 2/1/47	AAA		9,280,000	9,957,442
Ser. F-1, 5.00%, 2/1/41	AAA		3,000,000	3,275,612
5.00%, 8/1/40	AAA		14,000,000	14,958,346
Ser. B-1, 5.00%, 8/1/40	AAA		6,575,000	6,866,457
Ser. A-1, 5.00%, 5/1/37	AAA		1,000,000	1,047,313
(Future Tax Secd.), Ser. A-1, 4.00%, 8/1/48	AAA		1,000,000	946,750
(Future Tax Secd.), 4.00%, 5/1/39	AAA		5,000,000	4,974,562
4.00%, 11/1/38	AAA		2,450,000	2,451,526
(Future Tax Secd.), Ser. F-1, 4.00%, 11/1/38	AAA		1,250,000	1,250,822
(Future Tax Secd.), 4.00%, 8/1/38	AAA		5,000,000	5,002,213
(Future Tax Secd.), Ser. F-1, 4.00%, 11/1/37	AAA		2,500,000	2,513,673
NY City, Transitional Fin. Auth. Bldg. Aid Rev. Bonds
Ser. S-1, 5.00%, 7/15/43	Aa2		6,500,000	6,745,136
Ser. S-1, 5.00%, 7/15/40	Aa2		4,550,000	4,668,246
Ser. S-2, 5.00%, 7/15/40	Aa2		8,110,000	8,365,664
Ser. S-2A, 5.00%, 7/15/36	Aa2		3,250,000	3,482,902
Ser. S-1A, 5.00%, 7/15/35	Aa2		5,000,000	5,629,841
Ser. S-3A, 5.00%, 7/15/34	Aa2		4,250,000	4,612,388
NY City, Trust for Cultural Resources Rev. Bonds, (Lincoln Ctr. for the Performing Arts, Inc.)
4.00%, 12/1/35	A		1,000,000	999,305
4.00%, 12/1/34	A		1,000,000	1,007,966
NY Counties, Tobacco Trust II Rev. Bonds, (Tobacco Settlement Pass Through), 5.75%, 6/1/43	BBB+		825,000	841,464
NY Counties, Tobacco Trust IV Rev. Bonds, (Tobacco Settlement Pass Through), Ser. A, 5.00%, 6/1/38	B−		7,185,000	6,959,093
NY Counties, Tobacco Trust VI Rev. Bonds, (Tobacco Settlement Pass Through)
Ser. A-2B, 5.00%, 6/1/51	BB+/P		3,300,000	3,050,546
Ser. B, 5.00%, 6/1/41	A−		250,000	255,138
Ser. B, 5.00%, 6/1/36	A−		265,000	269,389
NY State Bridge Auth. Rev. Bonds, Ser. A
4.00%, 1/1/46	Aa3		1,725,000	1,662,429
4.00%, 1/1/41	Aa3		200,000	197,393

MUNICIPAL BONDS AND NOTES (102.7%)* cont.	Rating**		Principal amount	Value
New York cont.
NY State Bridge Auth. Rev. Bonds, Ser. A
4.00%, 1/1/40	Aa3		$325,000	$323,389
4.00%, 1/1/39	Aa3		250,000	250,465
4.00%, 1/1/38	Aa3		175,000	176,074
NY State Convention Ctr. Dev. Corp. Rev. Bonds, (Hotel Unit Fee)
5.00%, 11/15/45	A2		3,000,000	3,049,298
zero %, 11/15/50	A2		7,000,000	1,678,384
NY State Dorm. Auth. Rev. Bonds
(NYU), Ser. 1, AMBAC, 5.50%, 7/1/40	Aa2		6,000,000	7,145,704
(NYU), Ser. 1, AMBAC, 5.50%, 7/1/31	Aa2		6,170,000	6,967,484
(Iona College), Ser. A, 5.00%, 7/1/51	Baa2		350,000	358,336
(St. Joseph’s College), 5.00%, 7/1/51	BBB−/F		725,000	742,447
(Iona College), 5.00%, 7/1/42	Baa2		225,000	234,573
(The New School), Ser. A, 5.00%, 7/1/42	A3		750,000	777,761
(The New School), Ser. A, 5.00%, 7/1/41	A3		1,000,000	1,036,749
(The New School), Ser. A, 5.00%, 7/1/40	A3		900,000	933,951
(The New School), Ser. A, 5.00%, 7/1/39	A3		750,000	787,089
(Wagner College), 5.00%, 7/1/38	BBB−/F		840,000	857,256
(Iona College), 5.00%, 7/1/37	Baa2		200,000	212,626
(Wagner College), 5.00%, 7/1/37	BBB−/F		770,000	788,660
(Wagner College), 5.00%, 7/1/36	BBB−/F		730,000	751,372
(Wagner College), 5.00%, 7/1/35	BBB−/F		1,000,000	1,034,070
(Wagner College), 5.00%, 7/1/33	BBB−/F		1,000,000	1,049,195
(Iona College), 5.00%, 7/1/32	Baa2		525,000	574,360
(Iona College), 5.00%, 7/1/31	Baa2		625,000	681,976
(Iona College), 5.00%, 7/1/29	Baa2		250,000	269,789
(Fordham U.), 4.00%, 7/1/46	A2		11,000,000	10,454,244
(Northwell Hlth.), 4.00%, 5/1/45	A3		10,000,000	9,393,088
(St. Joseph’s College), 4.00%, 7/1/40	BBB−/F		200,000	183,814
(St. Joseph’s College), 4.00%, 7/1/35	BBB−/F		600,000	576,050
(St. Joseph’s College/Brooklyn NY), Ser. A, 4.00%, 7/1/34	BBB−/F		850,000	825,482
NY State Dorm. Auth. Non-State Supported Debt Rev. Bonds
(Culinary Inst. of America), 5.50%, 7/1/33	Baa2		1,180,000	1,191,739
(School Dist. Fin. Program), Ser. C, AGC, 5.125%, 10/1/36	AA		40,000	40,091
(North Shore Long Island Jewish Oblig. Group), Ser. A, 5.00%, 5/1/43	A3		2,500,000	2,534,881
(Pratt Inst.), 5.00%, 7/1/39	A2		2,750,000	2,825,791
(St. John’s U.), Ser. A, 5.00%, 7/1/37	A3		1,400,000	1,439,054
(North Shore Long Island Jewish Oblig. Group), Ser. A, 5.00%, 5/1/37	A3		3,000,000	3,062,548
(NYU), Ser. A, 5.00%, 7/1/36	Aa2		1,000,000	1,085,025
(NYU Hosp. Ctr.), 5.00%, 7/1/33	A+		360,000	376,832
(School Dist. Fin. Program), Ser. C, AGC, 5.00%, 10/1/31	AA		20,000	20,042
(NYU Hosp. Ctr.), 5.00%, 7/1/30	A+		1,000,000	1,052,199
(Rochester Inst. of Tech.), Ser. A, 4.00%, 7/1/44	A1		5,770,000	5,416,899

MUNICIPAL BONDS AND NOTES (102.7%)* cont.	Rating**		Principal amount	Value
New York cont.
NY State Dorm. Auth. Non-State Supported Debt Rev. Bonds
(NYU), Ser. A, 4.00%, 7/1/35	Aa2		$1,000,000	$1,014,641
(NYU), Ser. A, 4.00%, 7/1/34	Aa2		1,195,000	1,220,834
NY State Dorm. Auth. Non-State Supported Debt 144A Rev. Bonds, (Orange Regl. Med. Ctr.)
5.00%, 12/1/37	Baa3		4,300,000	4,311,544
5.00%, 12/1/36	Baa3		700,000	703,353
NY State Dorm. Auth. Personal Income Tax Rev. Bonds
Ser. B, 5.00%, 2/15/41	Aa1		9,910,000	10,394,284
Ser. B, U.S. Govt. Coll., 5.00%, 2/15/41 (Prerefunded 8/15/27)	AAA/P		10,000	11,009
Ser. B-C, 5.00%, 2/15/41	Aa1		4,995,000	5,141,157
Ser. B-C, U.S. Govt. Coll., 5.00%, 2/15/41 (Prerefunded 2/15/25)	AAA/P		5,000	5,250
Ser. B, 5.00%, 2/15/39	Aa1		2,995,000	3,154,548
Ser. B, U.S. Govt. Coll., 5.00%, 2/15/39 (Prerefunded 8/15/27)	AAA/P		5,000	5,505
Ser. D, 4.00%, 2/15/47	Aa1		7,000,000	6,667,163
Ser. A, 3.00%, 3/15/38	Aa1		1,320,000	1,153,081
NY State Energy Research & Dev. Auth. Poll. Control Rev. Bonds, (NY State Elec. & Gas Corp.), Ser. D, 3.50%, 10/1/29	A−		5,000,000	4,922,321
NY State Env. Fac. Corp. Rev. Bonds, (NY State Revolving Fund 2010 Master)
4.00%, 8/15/51	Aaa		1,400,000	1,358,145
4.00%, 8/15/46	Aaa		1,000,000	985,189
NY State Env. Fac. Corp. Solid Waste Disp. Mandatory Put Bonds (9/2/25), (Casella Waste Syst., Inc.), Ser. R-1, 2.75%, 9/1/50	B		550,000	521,388
NY State Hsg. Fin. Agcy. VRDN (8 East 102nd St., LLC), Ser. A, 1.94%, 5/1/44	VMIG 1		9,280,000	9,280,000
NY State Liberty Dev. Corp. Rev. Bonds
(7 World Trade Ctr. II, LLC), 3.50%, 9/15/52	A2		3,000,000	2,323,372
(7 World Trade Ctr. II, LLC), 3.00%, 9/15/43	Aaa		4,000,000	3,272,626
(Port Auth. of NY & NJ), Ser. 1 WTC, 3.00%, 2/15/42	AA−		1,500,000	1,169,847
(One Bryant Pk., LLC), Class 3, 2.80%, 9/15/69	Baa1		5,500,000	4,965,572
NY State Liberty Dev. Corp. 144A Rev. Bonds, (3 World Trade Ctr., LLC)
Class 2, 5.15%, 11/15/34	BB/P		515,000	511,810
Class 1-3, 5.00%, 11/15/44	BB−/P		15,975,000	15,099,717
NY State Mtge. Agcy. Rev. Bonds, Ser. 189, 3.85%, 10/1/34	Aa1		165,000	164,401
NY State Pwr. Auth. Rev. Bonds, Ser. A, 4.00%, 11/15/55 T	Aa2		10,950,000	10,363,732
NY State Thruway Auth. Rev. Bonds
Ser. A, 5.00%, 1/1/46	A2		2,000,000	2,049,436
(Green Bonds-Bidding Group 2), Ser. C, 4.125%, 3/15/56	AA+		8,500,000	7,958,496
Ser. B, 4.00%, 1/1/45	A2		9,000,000	8,480,538

MUNICIPAL BONDS AND NOTES (102.7%)* cont.	Rating**		Principal amount	Value
New York cont.
NY State Trans. Special Fac. Dev. Corp. Rev. Bonds
(Laguardia Arpt. Term. B Redev. Program), Ser. A, 5.00%, 7/1/46	Baa2		$4,500,000	$4,470,265
(Delta Air Lines, Inc.), 5.00%, 10/1/40	Baa3		7,250,000	7,249,499
(Delta Air Lines, Inc. — LaGuardia Arpt. Term. C&D), 5.00%, 1/1/36	Baa3		5,000,000	5,025,135
(Delta Air Lines, Inc.), 5.00%, 10/1/35	Baa3		750,000	757,207
(JFK Intl. Air Term., LLC), 5.00%, 12/1/34	Baa1		5,000,000	5,132,859
(Delta Air Lines, Inc. — LaGuardia Arpt. Term. C&D), 5.00%, 1/1/34	Baa3		2,000,000	2,018,096
(Delta Air Lines, Inc. — LaGuardia Arpt. Term. C&D), 5.00%, 1/1/32	Baa3		1,000,000	1,015,108
(JFK Intl. Arpt. Term. 4, LLC), 4.00%, 12/1/41	Baa1		900,000	786,166
(JFK Intl. Arpt. Term. 4, LLC), 4.00%, 12/1/38	Baa1		600,000	539,959
(American Airlines, Inc.), 3.00%, 8/1/31	B/F		1,630,000	1,458,220
NY State Urban Dev. Corp. Personal Income Tax Rev. Bonds, (Group C), Ser. A , 5.00%, 3/15/38	Aa1		6,515,000	6,770,496
NY State, Liberty Dev. Corp. Rev. Bonds
Ser. A, AGM, 3.00%, 11/15/51	AA		7,000,000	5,158,841
(4 World Trade Ctr.), 3.00%, 11/15/51	A+		7,120,000	4,998,617
Oneida Cnty., Local Dev. Corp. Rev. Bonds, (Mohawk Valley Hlth. Syst.), Ser. A, AGM
4.00%, 12/1/49	AA		4,000,000	3,613,978
4.00%, 12/1/38	AA		1,250,000	1,223,896
4.00%, 12/1/37	AA		1,000,000	990,795
4.00%, 12/1/36	AA		1,250,000	1,244,686
4.00%, 12/1/35	AA		1,000,000	1,000,798
Onondaga, Civic Dev. Corp. Rev. Bonds, (Le Moyne College)
5.00%, 7/1/51	Baa2		700,000	709,257
5.00%, 7/1/46	Baa2		450,000	458,536
5.00%, 1/1/43	Baa2		740,000	752,145
Ser. B, 5.00%, 7/1/35	Baa2		410,000	427,128
5.00%, 7/1/34	Baa2		445,000	453,509
Ser. B, 5.00%, 7/1/34	Baa2		285,000	298,364
Ser. B, 5.00%, 7/1/33	Baa2		305,000	320,576
Ser. B, 5.00%, 7/1/32	Baa2		265,000	280,068
4.00%, 7/1/42	Baa2		525,000	470,864
4.00%, 7/1/41	Baa2		215,000	193,449
Ser. B, 4.00%, 7/1/40	Baa2		300,000	271,700
4.00%, 7/1/39	Baa2		450,000	411,438
Ser. B, 4.00%, 7/1/39	Baa2		825,000	754,302
4.00%, 7/1/38	Baa2		150,000	138,170
Ser. B, 4.00%, 7/1/38	Baa2		455,000	419,117
Ser. B, 4.00%, 7/1/37	Baa2		490,000	455,416
4.00%, 7/1/36	Baa2		325,000	305,210
Ser. B, 4.00%, 7/1/36	Baa2		425,000	399,121
4.00%, 7/1/34	Baa2		300,000	287,645
Port Auth. of NY & NJ Rev. Bonds
5.50%, 8/1/52	Aa3		5,000,000	5,397,997
Ser. 217, 5.00%, 11/1/44	Aa3		2,700,000	2,883,457

MUNICIPAL BONDS AND NOTES (102.7%)* cont.	Rating**		Principal amount	Value
New York cont.
Port Auth. of NY & NJ Rev. Bonds
Ser. 194, 5.00%, 10/15/41	Aa3		$5,450,000	$5,640,933
Ser. 197, 5.00%, 11/15/34	Aa3		2,500,000	2,583,801
4.00%, 11/1/41	Aa3		3,250,000	3,219,001
Ser. 222, 4.00%, 7/15/40	Aa3		500,000	499,340
Ser. 217, 4.00%, 11/1/37	Aa3		3,800,000	3,822,120
Ser. 222, 4.00%, 7/15/37	Aa3		4,055,000	4,080,656
Poughkeepsie City, G.O. Bonds
5.00%, 6/1/31	Ba1		600,000	625,094
5.00%, 6/1/25	Ba1		230,000	238,678
5.00%, 6/1/24	Ba1		460,000	470,805
5.00%, 6/1/23	Ba1		1,125,000	1,134,553
Saratoga Cnty., Cap. Resource Rev. Bonds, (Skidmore College)
Ser. A, 5.00%, 7/1/45	A1		2,500,000	2,670,504
Ser. 21A, 4.00%, 7/1/37	A1		1,385,000	1,361,517
Ser. 21A, 4.00%, 7/1/35	A1		1,285,000	1,283,239
Schenectady Cnty., Cap. Resource Corp. Rev. Bonds, (Union College)
5.25%, 7/1/52	A1		700,000	752,000
5.00%, 7/1/32	A1		600,000	690,172
Southold, Local Dev. Corp. Rev. Bonds, (Peconic Landing at Southold, Inc.), 5.00%, 12/1/45	BBB−/F		2,250,000	2,228,753
St. Lawrence Cnty., Indl. Dev. Agcy. Civic Dev. Corp. Rev. Bonds, (Clarkson U.)
Ser. A, 5.00%, 9/1/41	Baa1		100,000	104,071
Ser. B, 5.00%, 9/1/41	Baa1		200,000	208,141
Ser. A, 5.00%, 9/1/40	Baa1		100,000	104,162
Ser. B, 5.00%, 9/1/40	Baa1		200,000	208,323
Ser. A, 5.00%, 9/1/39	Baa1		125,000	130,643
Ser. B, 5.00%, 9/1/39	Baa1		195,000	203,803
Ser. A, 5.00%, 9/1/38	Baa1		125,000	130,940
Ser. B, 5.00%, 9/1/38	Baa1		200,000	209,505
Ser. A, 5.00%, 9/1/37	Baa1		100,000	105,181
Ser. B, 5.00%, 9/1/37	Baa1		220,000	231,398
Ser. A, 5.00%, 9/1/36	Baa1		100,000	105,599
Ser. B, 5.00%, 9/1/36	Baa1		200,000	211,198
Ser. B, 5.00%, 9/1/35	Baa1		200,000	212,069
Ser. B, 5.00%, 9/1/34	Baa1		200,000	213,302
Ser. B, 5.00%, 9/1/33	Baa1		150,000	160,886
Ser. B, 5.00%, 9/1/32	Baa1		150,000	161,831
Suffolk Cnty., G.O. Bonds
Ser. A, 5.00%, 6/15/33	A+		2,400,000	2,758,393
Ser. A, 5.00%, 6/15/29	A+		600,000	669,773
Ser. B, 5.00%, 10/1/28	A+		675,000	746,862
Ser. A, 5.00%, 6/15/28	A+		550,000	605,991
Suffolk Cnty., Indl. Dev. Agcy. Rev. Bonds, (Nissequogue Cogen Partners Fac.), 5.50%, 1/1/23	BBB−/P		395,000	395,213

MUNICIPAL BONDS AND NOTES (102.7%)* cont.	Rating**		Principal amount	Value
New York cont.
Suffolk, Tobacco Asset Securitization Corp. Rev. Bonds
4.00%, 6/1/50	BBB−		$3,000,000	$3,004,340
4.00%, 6/1/41	A−		1,300,000	1,185,248
4.00%, 6/1/40	A−		1,250,000	1,148,793
4.00%, 6/1/39	A−		1,250,000	1,156,995
4.00%, 6/1/38	A−		815,000	760,143
4.00%, 6/1/37	A−		1,250,000	1,176,752
Ser. B-2, zero %, 6/1/66	BB/P		5,000,000	524,816
Syracuse, Regl. Arpt. Auth. Rev. Bonds
5.00%, 7/1/34	Baa1		775,000	810,791
5.00%, 7/1/33	Baa1		750,000	799,188
4.00%, 7/1/36	Baa1		400,000	380,303
4.00%, 7/1/35	Baa1		350,000	336,356
Tompkins Cnty., Dev. Corp. Rev. Bonds
(Kendal at Ithaca, Inc.), 5.00%, 7/1/44	BBB+		2,570,000	2,546,452
(Ithaca College), 5.00%, 7/1/41	A3		715,000	730,965
(Ithaca College), 5.00%, 7/1/37	A3		250,000	258,679
(Ithaca College), 5.00%, 7/1/35	A3		150,000	156,084
(Ithaca College), 5.00%, 7/1/34	A3		150,000	157,049
Triborough Bridge & Tunnel Auth. Rev. Bonds
(Metro. Trans. Auth. Payroll Mobility Tax), Ser. D-2, 5.50%, 5/15/52	AA+		3,250,000	3,696,887
(Metro. Trans. Auth. Bridges & Tunnels), Ser. A, 5.00%, 11/15/49	Aa3		500,000	530,950
Ser. B, 5.00%, 11/15/38	Aa3		1,000,000	1,057,516
Ser. B, zero %, 11/15/32	Aa3		3,900,000	2,667,448
Ser. A, zero %, 11/15/30	A1		7,000,000	5,221,115
Triborough Bridge & Tunnel Auth. Sales Tax Rev. Bonds, 5.00%, 5/15/47	AA+		6,500,000	7,052,434
Troy, Cap. Resource Corp. Rev. Bonds, (Rensselaer Polytechnic Inst.), Ser. A
5.00%, 9/1/39	A3		1,250,000	1,310,205
5.00%, 9/1/38	A3		1,300,000	1,368,060
5.00%, 9/1/37	A3		1,375,000	1,451,422
5.00%, 9/1/36	A3		1,500,000	1,589,069
5.00%, 9/1/35	A3		1,000,000	1,064,025
5.00%, 9/1/34	A3		2,250,000	2,406,670
5.00%, 9/1/32	A3		1,625,000	1,760,943
5.00%, 9/1/31	A3		1,500,000	1,631,828
5.00%, 9/1/30	A3		1,000,000	1,100,332
4.00%, 9/1/40	A3		1,375,000	1,246,228
TSASC, Inc. Rev. Bonds, Ser. A, 5.00%, 6/1/41	A−		15,490,000	15,675,141
Westchester Cnty., Indl. Dev. Agcy. Civic Fac. Rev. Bonds
(Pace U.), Ser. A, 5.50%, 5/1/42	BBB−		4,405,000	4,425,594
(Kendal on Hudson), Ser. B, 5.00%, 1/1/41	BBB+/F		500,000	492,724
(Kendal on Hudson), Ser. B, 5.00%, 1/1/37	BBB+/F		525,000	525,707
(Kendal on Hudson), Ser. B, 5.00%, 1/1/32	BBB+/F		500,000	509,816

MUNICIPAL BONDS AND NOTES (102.7%)* cont.	Rating**		Principal amount	Value
New York cont.
Westchester Cnty., Local Dev. Corp. Rev. Bonds
(Westchester Med. Ctr.), 5.00%, 11/1/46	Baa2		$3,500,000	$3,502,857
(Purchase Hsg. Corp. II), 5.00%, 6/1/42	BBB		1,235,000	1,240,918
Westchester Cnty., Local Dev. Corp. 144A Rev. Bonds, (Purchase Sr. Learning Cmnty.), 5.00%, 7/1/46	B−/P		2,205,000	1,790,447
Westchester Tobacco Asset Securitization Corp. Rev. Bonds, Ser. B, 5.00%, 6/1/41	A−		1,250,000	1,282,350
Yonkers, Econ. Dev. Corp. Edl. Rev. Bonds, (Charter School of Edl. Excellence), Ser. A
5.00%, 10/15/54	BB/P		505,000	443,927
5.00%, 10/15/49	BB/P		665,000	592,968
5.00%, 10/15/39	BB/P		545,000	505,081
Yonkers, G.O. Bonds, Ser. A, AGM, 5.00%, 11/15/31	AA		2,200,000	2,343,993
				825,462,322
Puerto Rico (0.1%)
Cmnwlth. of PR, Sales Tax Fin. Corp. (COFINA) Rev. Bonds, Class 2, zero %, 8/1/47	BBB/P		1,548,906	542,206
				542,206
Total municipal bonds and notes (cost $880,639,444)				$836,271,958

UNITIZED TRUST (—%)*	Shares	Value
CMS Liquidating Trust 144A † F	600	$15,552
Total unitized trust (cost $—)		$15,552

SHORT-TERM INVESTMENTS (0.1%)*		Shares	Value
Putnam Short Term Investment Fund Class P 3.95% L		603,241	$603,241
Total short-term investments (cost $603,241)			$603,241

TOTAL INVESTMENTS
Total investments (cost $881,242,685)	$836,890,751

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, 2021 through November 30, 2022 (the reporting period). Within the following notes to the portfolio, references to “Putnam Management” represent Putnam Investment Management, LLC, the fund’s manager, an indirect wholly-owned subsidiary of Putnam Investments, LLC and references to “ASC 820” represent Accounting Standards Codification 820 Fair Value Measurements and Disclosures.
*	Percentages indicated are based on net assets of $814,629,351.
**	The Moody’s, Standard & Poor’s or Fitch ratings indicated are believed to be the most recent ratings available at the close of the reporting period for the securities listed. Ratings are generally ascribed to securities at the time of issuance. While the agencies may from time to time revise such ratings, they undertake no obligation to do so, and the ratings do not necessarily represent what the agencies would ascribe to these securities at the close of the reporting period. Securities rated by Fitch are indicated by “/F.” Securities rated by Putnam are indicated by “/P.” The Putnam rating categories are comparable to the Standard & Poor’s classifications. If a security is insured, it will usually be rated by the ratings organizations based on the financial strength of the insurer. Ratings are not covered by the Report of Independent Registered Public Accounting Firm. For further details regarding security ratings, please see the Statement of Additional Information.
†	This security is non-income-producing.