| Putnam Convertible Securities Fund | ||||||
| The fund's portfolio | ||||||
| 1/31/20 (Unaudited) | ||||||
| CONVERTIBLE BONDS AND NOTES (70.2%)(a) | ||||||
| Principal amount | Value | |||||
| Aerospace and defense (0.5%) | ||||||
| Kaman Corp. cv. sr. unsec. notes 3.25%, 5/1/24 | $3,640,000 | $4,189,491 | ||||
| 4,189,491 | ||||||
| Automotive (2.4%) | ||||||
| Tesla Motors, Inc. cv. sr. unsec. notes 2.00%, 5/15/24 | 8,437,000 | 18,572,903 | ||||
| 18,572,903 | ||||||
| Biotechnology (2.9%) | ||||||
| BioMarin Pharmaceutical, Inc. cv. sr. unsec. sub. notes 0.599%, 8/1/24 | 3,621,000 | 3,841,620 | ||||
| Exact Sciences Corp. cv. sr. unsec. notes 0.375%, 3/15/27 | 10,209,000 | 11,485,125 | ||||
| Ironwood Pharmaceuticals, Inc. 144A cv. sr. unsec. notes 1.50%, 6/15/26 | 3,145,000 | 3,600,598 | ||||
| Neurocrine Biosciences, Inc. cv. sr. unsec. notes 2.25%, 5/15/24 | 2,305,000 | 3,333,632 | ||||
| 22,260,975 | ||||||
| Broadcasting (2.6%) | ||||||
| Liberty Media Corp. cv. sr. unsec. bonds 1.375%, 10/15/23 | 5,091,000 | 6,860,739 | ||||
| Liberty Media Corp. cv. sr. unsec. notes 1.00%, 1/30/23 | 4,927,000 | 6,613,485 | ||||
| Liberty Media Corp. 144A cv. sr. unsec. unsub. bonds 2.75%, 12/1/49 | 6,593,000 | 6,878,536 | ||||
| 20,352,760 | ||||||
| Cable television (1.4%) | ||||||
| DISH Network Corp. cv. sr. unsec. notes 3.375%, 8/15/26 | 10,972,000 | 10,650,235 | ||||
| 10,650,235 | ||||||
| Commercial and consumer services (3.3%) | ||||||
| FTI Consulting, Inc. cv. sr. unsec. notes 2.00%, 8/15/23 | 4,650,000 | 6,131,630 | ||||
| Priceline Group, Inc. (The) cv. sr. unsec. unsub. notes 0.35%, 6/15/20 | 6,260,000 | 8,698,701 | ||||
| Square, Inc. cv. sr. unsec. notes 0.50%, 5/15/23 | 9,028,000 | 10,897,667 | ||||
| 25,727,998 | ||||||
| Communications equipment (0.4%) | ||||||
| Viavi Solutions, Inc. cv. sr. unsec. unsub. notes 1.00%, 3/1/24 | 2,690,000 | 3,332,257 | ||||
| 3,332,257 | ||||||
| Computers (11.0%) | ||||||
| Akamai Technologies, Inc. cv. sr. unsec. notes 0.125%, 5/1/25 | 6,211,000 | 7,157,425 | ||||
| Akamai Technologies, Inc. 144A cv. sr. unsec. notes 0.375%, 9/1/27 | 6,521,000 | 6,681,024 | ||||
| CyberArk Software, Ltd. 144A cv. sr. unsec. notes zero %, 11/15/24, (Israel) | 5,433,000 | 6,068,197 | ||||
| HubSpot, Inc. cv. sr. unsec. notes 0.25%, 6/1/22 | 2,748,000 | 5,335,896 | ||||
| Lumentum Holdings, Inc. 144A cv. sr. unsec. notes 0.50%, 12/15/26 | 2,650,000 | 2,802,739 | ||||
| MongoDB, Inc. 144A cv. sr. unsec. notes 0.25%, 1/15/26 | 6,660,000 | 7,179,829 | ||||
| Nuance Communications, Inc. cv. sr. unsec. notes 1.25%, 4/1/25 | 4,306,000 | 4,961,876 | ||||
| RealPage, Inc. cv. sr. unsec. notes 1.50%, 11/15/22 | 2,757,000 | 4,079,839 | ||||
| RingCentral, Inc. cv. sr. unsec. notes zero %, 3/15/23 | 3,102,000 | 7,833,191 | ||||
| ServiceNow, Inc. cv. sr. unsec. unsub. notes zero %, 6/1/22 | 4,882,000 | 12,214,154 | ||||
| Splunk, Inc. cv. sr. unsec. notes 1.125%, 9/15/25 | 9,556,000 | 12,034,588 | ||||
| Talend SA 144A cv. sr. unsec. notes 1.75%, 9/1/24 | EUR | 3,500,000 | 3,812,043 | |||
| Twilio, Inc. cv. sr. unsec. notes 0.25%, 6/1/23, (acquired various dates from 11/8/18 to 12/20/19, cost $4,831,785)(RES) | $3,185,000 | 5,834,522 | ||||
| 85,995,323 | ||||||
| Consumer services (3.0%) | ||||||
| Etsy, Inc. 144A cv. sr. unsec. notes 0.125%, 10/1/26 | 6,649,000 | 6,211,210 | ||||
| IAC Financeco 2, Inc. 144A cv. company guaranty sr. unsec. notes 0.875%, 6/15/26 | 6,138,000 | 6,752,439 | ||||
| IAC FinanceCo, Inc. 144A cv. company guaranty sr. unsec. notes 0.875%, 10/1/22 | 2,729,000 | 4,581,806 | ||||
| Wayfair, Inc. cv. sr. unsec. notes 1.125%, 11/1/24 | 5,855,000 | 6,228,256 | ||||
| 23,773,711 | ||||||
| Electrical equipment (0.5%) | ||||||
| II-VI, Inc. cv. sr. unsec. notes 0.25%, 9/1/22 | 3,582,000 | 3,666,456 | ||||
| 3,666,456 | ||||||
| Electronics (6.3%) | ||||||
| Cree, Inc. cv. sr. unsec. notes 0.875%, 9/1/23 | 3,906,000 | 4,150,125 | ||||
| GT Advanced Technologies, Inc. cv. sr. unsec. sub. notes 3.00%, 12/15/20,(F) | 2,944,000 | 294 | ||||
| Inphi Corp. cv. sr. unsec. notes 0.75%, 9/1/21 | 4,365,000 | 6,319,392 | ||||
| Microchip Technology, Inc. cv. sr. unsec. sub. notes 1.625%, 2/15/27 | 20,682,000 | 27,820,475 | ||||
| ON Semiconductor Corp. cv. company guaranty sr. unsec. unsub. notes 1.625%, 10/15/23 | 7,913,000 | 10,562,689 | ||||
| 48,852,975 | ||||||
| Entertainment (1.1%) | ||||||
| Live Nation Entertainment, Inc. cv. sr. unsec. notes 2.50%, 3/15/23 | 7,345,000 | 8,735,055 | ||||
| 8,735,055 | ||||||
| Health-care services (2.6%) | ||||||
| Sarepta Therapeutics, Inc. cv. sr. unsec. notes 1.50%, 11/15/24 | 3,175,000 | 5,681,663 | ||||
| Tabula Rasa HealthCare, Inc. 144A cv. sr. unsec. sub. notes 1.75%, 2/15/26 | 3,410,000 | 3,768,026 | ||||
| Teladoc Health, Inc. cv. sr. unsec. notes 1.375%, 5/15/25 | 5,531,000 | 11,208,083 | ||||
| 20,657,772 | ||||||
| Homebuilding (1.0%) | ||||||
| Horizon Global Corp. cv. sr. unsec. unsub. notes 2.75%, 7/1/22 | 4,018,000 | 3,178,089 | ||||
| Winnebago Industries, Inc. 144A cv. sr. unsec. notes 1.50%, 4/1/25 | 4,365,000 | 4,811,538 | ||||
| 7,989,627 | ||||||
| Insurance (0.6%) | ||||||
| AXA SA 144A cv. sr. unsec. unsub. notes 7.25%, 5/15/21, (France) | 4,320,000 | 4,838,400 | ||||
| 4,838,400 | ||||||
| Investment banking/Brokerage (1.9%) | ||||||
| Ares Capital Corp. cv. sr. unsec. notes 3.75%, 2/1/22 | 4,321,000 | 4,411,985 | ||||
| JPMorgan Chase Financial Co., LLC cv. company guaranty sr. unsec. notes 0.25%, 5/1/23 | 9,395,000 | 10,099,625 | ||||
| 14,511,610 | ||||||
| Media (1.0%) | ||||||
| Liberty Interactive, LLC 144A cv. sr. unsec. bonds 1.75%, 9/30/46 | 5,050,000 | 7,901,693 | ||||
| 7,901,693 | ||||||
| Medical technology (3.2%) | ||||||
| China Medical Technologies, Inc. cv. sr. unsec. bonds Ser. CMT, 4.00%, 8/15/20, (China) (In default)(NON)(F) | 3,213,000 | 205,632 | ||||
| China Medical Technologies, Inc. 144A cv. sr. unsec. notes 6.25%, 12/17/20, (China) (In default)(NON)(F) | 3,544,000 | 198,464 | ||||
| CONMED Corp. cv. sr. unsec. notes 2.625%, 2/1/24 | 4,035,000 | 5,174,888 | ||||
| Insulet Corp. cv. sr. unsec. notes 1.375%, 11/15/24 | 936,000 | 1,987,502 | ||||
| Insulet Corp. 144A cv. sr. unsec. notes 0.375%, 9/1/26 | 9,609,000 | 10,772,861 | ||||
| Repligen Corp. cv. sr. unsec. notes 0.375%, 7/15/24 | 5,935,000 | 6,567,221 | ||||
| 24,906,568 | ||||||
| Oil and gas (0.4%) | ||||||
| Cheniere Energy, Inc. cv. sr. unsec. unsub. notes 4.25%, 3/15/45 | 3,786,000 | 2,954,766 | ||||
| 2,954,766 | ||||||
| Pharmaceuticals (2.4%) | ||||||
| DexCom, Inc. cv. sr. unsec. unsub. notes 0.75%, 12/1/23 | 9,453,000 | 15,000,729 | ||||
| Supernus Pharmaceuticals, Inc. cv. sr. unsec. notes 0.625%, 4/1/23 | 3,891,000 | 3,537,341 | ||||
| 18,538,070 | ||||||
| Power producers (1.3%) | ||||||
| NRG Energy, Inc. cv. company guaranty sr. unsec. bonds 2.75%, 6/1/48 | 9,555,000 | 10,493,835 | ||||
| 10,493,835 | ||||||
| Real estate (1.7%) | ||||||
| Blackstone Mortgage Trust, Inc. cv. sr. unsec. notes 4.75%, 3/15/23(R) | 5,472,000 | 5,881,168 | ||||
| IH Merger Sub, LLC cv. company guaranty sr. unsec. notes 3.50%, 1/15/22(R) | 5,177,000 | 7,247,051 | ||||
| 13,128,219 | ||||||
| Retail (1.7%) | ||||||
| Guess?, Inc. 144A cv. sr. unsec. notes 2.00%, 4/15/24 | 3,451,000 | 3,725,503 | ||||
| RH 144A cv. sr. unsec. notes zero %, 9/15/24 | 7,946,000 | 9,247,485 | ||||
| 12,972,988 | ||||||
| Schools (1.3%) | ||||||
| Chegg, Inc. 144A cv. sr. unsec. notes 0.125%, 3/15/25 | 9,344,000 | 9,976,579 | ||||
| 9,976,579 | ||||||
| Shipping (0.7%) | ||||||
| Air Transport Services Group, Inc. cv. sr. unsec. notes 1.125%, 10/15/24 | 5,803,000 | 5,515,206 | ||||
| 5,515,206 | ||||||
| Software (8.6%) | ||||||
| Alteryx, Inc. 144A cv. sr. unsec. notes 0.50%, 8/1/24 | 7,896,000 | 8,453,276 | ||||
| Coupa Software, Inc. 144A cv. sr. unsec. notes 0.125%, 6/15/25 | 8,607,000 | 10,812,544 | ||||
| Everbridge, Inc. 144A cv. sr. unsec. notes 0.125%, 12/15/24 | 7,498,000 | 7,989,754 | ||||
| New Relic, Inc. cv. sr. unsec. notes 0.50%, 5/1/23 | 3,779,000 | 3,696,681 | ||||
| Nice Systems, Inc. cv. company guaranty sr. unsec. notes 1.25%, 1/15/24 | 1,998,000 | 4,199,055 | ||||
| Okta, Inc. 144A cv. sr. unsec. notes 0.125%, 9/1/25 | 9,682,000 | 9,788,502 | ||||
| Pluralsight, Inc. 144A cv. sr. unsec. notes 0.375%, 3/1/24 | 4,698,000 | 4,220,262 | ||||
| SailPoint Technologies Holding, Inc. 144A cv. sr. unsec. notes 0.125%, 9/15/24 | 5,388,000 | 6,044,786 | ||||
| Workday, Inc. cv. sr. unsec. notes 0.25%, 10/1/22 | 3,816,000 | 5,232,071 | ||||
| Zendesk, Inc. cv. sr. unsec. notes 0.25%, 3/15/23 | 4,475,000 | 6,652,909 | ||||
| 67,089,840 | ||||||
| Technology services (5.4%) | ||||||
| DocuSign, Inc. cv. sr. unsec. notes 0.50%, 9/15/23 | 7,180,000 | 9,221,291 | ||||
| iQIYI, Inc. 144A cv. sr. unsec. notes 2.00%, 4/1/25, (China) | 3,199,000 | 3,242,187 | ||||
| j2 Global, Inc. 144A cv. sr. unsec. notes 1.75%, 11/1/26 | 6,586,000 | 6,767,115 | ||||
| Palo Alto Networks, Inc. cv. sr. unsec. notes 0.75%, 7/1/23 | 9,115,000 | 10,126,985 | ||||
| Proofpoint, Inc. 144A cv. sr. unsec. unsub. notes 0.25%, 8/15/24 | 6,593,000 | 7,039,978 | ||||
| Wix.com, Ltd. cv. sr. unsec. notes zero %, 7/1/23, (Israel) | 4,913,000 | 6,066,603 | ||||
| 42,464,159 | ||||||
| Telecommunications (0.6%) | ||||||
| Powerwave Technologies, Inc. cv. unsec. sub. notes 3.875%, 10/1/27, (In default)(NON)(F) | 5,121,000 | 512 | ||||
| Vonage Holdings Corp. 144A cv. sr. unsec. notes 1.75%, 6/1/24 | 5,176,000 | 4,909,919 | ||||
| 4,910,431 | ||||||
| Telephone (0.4%) | ||||||
| GCI Liberty, Inc. 144A cv. sr. unsec. bonds 1.75%, 9/30/46 | 2,060,000 | 2,981,292 | ||||
| 2,981,292 | ||||||
| Total convertible bonds and notes (cost $490,022,710) | $547,941,194 | |||||
| CONVERTIBLE PREFERRED STOCKS (21.7%)(a) | ||||||
| Shares | Value | |||||
| Banking (3.7%) | ||||||
| Bank of America Corp. Ser. L, 7.25% cv. pfd.(S) | 10,445 | $16,426,225 | ||||
| Wells Fargo & Co. Ser. L, 7.50% cv. pfd. | 7,835 | 12,142,683 | ||||
| 28,568,908 | ||||||
| Chemicals (0.9%) | ||||||
| International Flavors & Fragrances, Inc. $3.00 cv. pfd. | 143,055 | 6,935,306 | ||||
| 6,935,306 | ||||||
| Conglomerates (1.6%) | ||||||
| Danaher Corp. 4.75% cv. pfd.(S) | 10,298 | 12,514,130 | ||||
| 12,514,130 | ||||||
| Consumer (1.3%) | ||||||
| Stanley Black & Decker, Inc. $5.25 cv. pfd.(S) | 96,497 | 10,131,220 | ||||
| 10,131,220 | ||||||
| Electric utilities (4.4%) | ||||||
| American Electric Power Co., Inc. $3.06 cv. pfd. | 113,733 | 6,589,690 | ||||
| NextEra Energy, Inc. $2.436 cv. pfd.(S) | 165,303 | 9,030,503 | ||||
| Sempra Energy Ser. A, $6.00 cv. pfd.(S) | 84,275 | 10,650,875 | ||||
| Southern Co. (The) $3.38 cv. pfd. | 144,891 | 8,228,360 | ||||
| 34,499,428 | ||||||
| Electrical equipment (0.9%) | ||||||
| Fortive Corp. Ser. A, 5.00% cv. pfd. | 7,590 | 7,295,173 | ||||
| 7,295,173 | ||||||
| Electronics (2.4%) | ||||||
| Broadcom, Inc. 8.00% cv. pfd. | 16,502 | 18,954,197 | ||||
| 18,954,197 | ||||||
| Health-care services (0.6%) | ||||||
| Change Healthcare, Inc. $3.00 cv. pfd. | 88,205 | 5,059,439 | ||||
| 5,059,439 | ||||||
| Medical technology (0.9%) | ||||||
| Elanco Animal Health, Inc. $2.50 cv. pfd.(NON) | 126,057 | 6,903,007 | ||||
| 6,903,007 | ||||||
| Pharmaceuticals (1.7%) | ||||||
| Becton Dickinson and Co. Ser. A, $3.063 cv. pfd. | 202,852 | 13,305,638 | ||||
| 13,305,638 | ||||||
| Real estate (1.1%) | ||||||
| QTS Realty Trust, Inc. Ser. B, $6.50 cv. pfd. | 62,839 | 8,393,405 | ||||
| 8,393,405 | ||||||
| Regional Bells (—%) | ||||||
| Cincinnati Bell, Inc. Ser. B, $3.378 cum. cv. pfd. | 190 | 9,293 | ||||
| 9,293 | ||||||
| Telecommunications (1.5%) | ||||||
| Crown Castle International Corp. Ser. A, 6.875% cv. pfd. | 8,573 | 11,390,797 | ||||
| 11,390,797 | ||||||
| Water Utilities (0.7%) | ||||||
| Aqua America, Inc. $3.00 cv. pfd.(NON) | 85,605 | 5,806,587 | ||||
| 5,806,587 | ||||||
| Total convertible preferred stocks (cost $147,976,890) | $169,766,528 | |||||
| COMMON STOCKS (3.4%)(a) | ||||||
| Shares | Value | |||||
| AbbVie, Inc. | 21,475 | $1,739,905 | ||||
| Advanced Micro Devices, Inc.(NON) | 115,640 | 5,435,080 | ||||
| Amgen, Inc. | 8,035 | 1,735,962 | ||||
| Anthem, Inc. | 15,725 | 4,171,528 | ||||
| Bank of America Corp. | 75,510 | 2,478,993 | ||||
| GT Advanced Technologies, Inc.(NON)(F) | 552 | 29,664 | ||||
| Hess Corp. | 27,149 | 1,535,819 | ||||
| Lam Research Corp. | 15,430 | 4,601,380 | ||||
| NXP Semiconductors NV | 20,395 | 2,587,310 | ||||
| T-Mobile US, Inc.(NON) | 29,411 | 2,329,057 | ||||
| Total common stocks (cost $21,739,176) | $26,644,698 | |||||
| CORPORATE BONDS AND NOTES (1.0%)(a) | ||||||
| Principal amount | Value | |||||
| Nutanix, Inc. cv. sr. unsec. notes zero %, 1/15/23 | $4,119,000 | $4,192,392 | ||||
| Talos Production, LLC/Talos Production Finance, Inc. company guaranty notes 11.00%, 4/3/22 (acquired various dates from 5/8/18 to 6/6/18, cost $1,870,030)(RES) | 1,788,508 | 1,851,106 | ||||
| Twitter, Inc. 144A sr. unsec. notes 3.875%, 12/15/27 | 1,876,000 | 1,878,344 | ||||
| Total corporate bonds and notes (cost $7,860,656) | $7,921,842 | |||||
| SHORT-TERM INVESTMENTS (5.3%)(a) | ||||||
| Shares | Value | |||||
| Putnam Short Term Investment Fund 1.70%(AFF) | 23,955,286 | $23,955,286 | ||||
| Putnam Cash Collateral Pool, LLC 1.81%(AFF) | 17,353,350 | 17,353,350 | ||||
| Total short-term investments (cost $41,308,636) | $41,308,636 | |||||
| TOTAL INVESTMENTS | ||||||
| Total investments (cost $708,908,068) | $793,582,898 | |||||
| Key to holding's currency abbreviations | ||||||
| EUR | Euro | |||||
| USD / $ | United States Dollar | |||||
| 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 November 1, 2019 through January 31, 2020 (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 780,725,838. | |||||
| (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 $7,685,628, or 1.0% 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 10/31/19 |
Purchase cost |
Sale proceeds |
Investment income |
Shares
outstanding and fair value as of 1/31/20 |
|
| Short-term investments | ||||||
| Putnam Cash Collateral Pool, LLC*# | $3,069,365 | $34,663,205 | $20,379,220 | $24,280 | $17,353,350 | |
| Putnam Short Term Investment Fund** | 24,582,676 | 89,488,997 | 90,116,387 | 99,095 | 23,955,286 | |
| Total Short-term investments | $27,652,041 | $124,152,202 | $110,495,607 | $123,375 | $41,308,636 | |
| * 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 $17,353,350, 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 $16,661,830. | ||||||
| ** 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. | ||||||
| (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. | |||||
| (R) | Real Estate Investment Trust. | |||||
| (S) | This security is on loan, in part or in entirety, at the close of the reporting period. | |||||
| Debt obligations are considered secured unless otherwise indicated. | ||||||
| 144A after the name of an issuer represents securities exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. | ||||||
| The dates shown parenthetically on prerefunded bonds represent the next prerefunding dates. | ||||||
| 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. | ||||||
| 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. Short-term securities with remaining maturities of 60 days or less are valued using an independent pricing service approved by the Trustees, and are classified as Level 2 securities. | ||||||
| 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. | ||||||
| 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 |
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| Investments in securities: | Level 1 | Level 2 | Level 3 | |
| Common stocks*: | ||||
| Communication services | $2,329,057 | $— | $— | |
| Energy | 1,535,819 | — | — | |
| Financials | 2,478,993 | — | — | |
| Health care | 7,647,395 | — | — | |
| Technology | 12,623,770 | — | 29,664 | |
| Total common stocks | 26,615,034 | — | 29,664 | |
| Convertible bonds and notes | — | 547,536,292 | 404,902 | |
| Convertible preferred stocks | 64,113,313 | 105,653,215 | — | |
| Corporate bonds and notes | — | 7,921,842 | — | |
| Short-term investments | 23,955,286 | 17,353,350 | — | |
| Totals by level | $114,683,633 | $678,464,699 | $434,566 | |
| * 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. | ||||
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 |
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