N-CSRS 1 a_georgeputnambalanced.htm GEORGE PUTNAM BALANCED FUND a_georgeputnambalanced.htm


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

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES



Investment Company Act file number: (811-00058)
Exact name of registrant as specified in charter: George Putnam Balanced Fund
Address of principal executive offices: 100 Federal Street, Boston, Massachusetts 02110
Name and address of agent for service: Stephen Tate, Vice President
100 Federal Street
Boston, Massachusetts 02110
Copy to:         Bryan Chegwidden, Esq.
Ropes & Gray LLP
1211 Avenue of the Americas
New York, New York 10036
Registrant’s telephone number, including area code: (617) 292-1000
Date of fiscal year end: July 31, 2023
Date of reporting period: August 1, 2022 – January 31, 2023



Item 1. Report to Stockholders:

The following is a copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Investment Company Act of 1940:




Message from the Trustees

March 14, 2023

Dear Fellow Shareholder:

Stock and bond markets rose in early 2023 as inflation continued to ease and the U.S. Federal Reserve moderated its interest-rate increases. Investors showed optimism that the Fed might slow the economy and reduce inflation without causing a recession. Still, caution may be warranted. While the Fed has reduced the size of its interest-rate increases, it also signaled that more rate hikes are likely if concerns persist about a resurgence in inflation.

Putnam’s investment teams believe a recession is possible this year or next. However, they also are finding what they believe to be attractive investment opportunities in a range of asset classes, including stocks and taxable and tax-exempt bonds. As active researchers, our teams analyze interest-rate and credit risks as they seek out investments for your fund. They also consider how stocks and bonds are likely to perform in uncertain economic conditions.

Thank you for investing with Putnam.




George Putnam Balanced Fund was introduced in 1937, at a time when many investors considered the stock market to be risky. Named for the founder of Putnam Investments, the fund offered an innovative concept for the time — a diversified portfolio with bonds to balance the risk of stocks.

A balanced approach, grounded in research

The fund’s classic balanced approach continues to serve investors today, under the leadership of seasoned portfolio managers who use fundamental research to find opportunities and manage risk.


Diversification does not guarantee a profit or ensure against loss. It is possible to lose money in a diversified portfolio.

2 George Putnam Balanced Fund 

 


Experienced managers pursue a broad range of opportunities.

The fund’s typical allocation is 60% stocks and 40% bonds. In managing the stock portion of the portfolio, Kate Lakin pursues a risk-aware style, investing in stocks across all sectors that may have value or growth characteristics. For the fund’s fixed income investments, Andrew Benson assembles a mix of government and investment-grade bonds. Historically, government bonds have shown relatively low correlation with stocks, which can help to dampen the impact of stock market downturns on fund performance.


Data are historical. Past performance is not a guarantee of 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. For the most recent month-end performance, visit putnam.com. Performance assumes reinvestment of distributions and does not account for taxes. Returns for class A shares do not reflect a sales charge of 5.75%. Had a sales charge been reflected, returns would have been lower. Returns for other classes of shares may vary. The period illustrated is longer than the investment horizon of many investors.

The chart is plotted on a logarithmic scale so that comparable percentage changes appear similar.

George Putnam Balanced Fund 3 

 



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 5.75%; had they, returns would have been lower. See page 5 and pages 11–14 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.

Returns for periods of less than one year are not annualized.

All Bloomberg indices are provided by Bloomberg Index Services Limited.

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

* The George Putnam Blended Index is an unmanaged index administered by Putnam Management, 60% of which is the S&P 500 Index and 40% of which is the Bloomberg U.S. Aggregate Bond Index.

† The fund’s benchmarks, the George Putnam Blended Index and the S&P 500 Index, were introduced on 12/31/78 and 12/31/69, respectively, and its Lipper group (Balanced Funds) was introduced on 12/31/59; they all post-date the inception of the fund’s class A shares.

4 George Putnam Balanced Fund 

 



This comparison shows your fund’s performance in the context of broad market indexes for the six months ended 1/31/23. See page 4 and pages 11–14 for additional fund performance information. Index descriptions can be found on pages 17–18.

All Bloomberg indices are provided by Bloomberg Index Services Limited.

George Putnam Balanced Fund 5 

 




Please describe investing conditions during the reporting period.

Stocks and bonds faced multiple macro-driven headwinds during the period. High inflation, rising interest rates, supply chain disruptions, and the Russia-Ukraine War weighed on investor sentiment.

To help tame multidecade-high inflation, the U.S. Federal Reserve and other global central banks raised interest rates more aggressively early in the period. Business spending declined as borrowing rates increased. U.S. home sales, which had peaked during the pandemic, began to moderate. Investors feared that the Fed’s hawkish interest-rate policy would tip the U.S. economy into a recession.

By November 2022, the pace of inflation, as measured by the Consumer Price Index [CPI], showed signs of easing. The Fed started to pare back its interest-rate hikes in December 2022. As of February 1, 2023, the federal funds rate reached 4.50%–4.75%, its highest level since October 2007.

Positive corporate earnings results and the prospect of lower interest rates helped lift stock performance later in the period. U.S. stocks

6 George Putnam Balanced Fund 

 



Allocations are shown as a percentage of the fund’s net assets as of 1/31/23. 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 portfolio schedule included in the financial statements due to the inclusion of derivative securities, any interest accruals, the exclusion of as-of trades, if any, the use of different classifications of securities for presentation purposes, and rounding. Holdings and allocations may vary over time.


This table shows the fund’s top 10 equity holdings by percentage of the fund’s net assets as of 1/31/23. Short-term investments and derivatives, if any, are excluded. Summary information may differ from the portfolio schedule included in the financial statements due the use of different classifications of securities for presentation purposes. Holdings may vary over time.

George Putnam Balanced Fund 7 

 


returned –0.44%, as measured by the S&P 500 Index, for the reporting period. Bond losses also narrowed over the period. Investment-grade [IG] corporate bonds, as measured by the Bloomberg U.S. Aggregate Bond Index, returned –2.37%.

Corporate credit spreads tightened as risk sentiment improved. [Spreads are the yield advantage credit-sensitive bonds offer over comparable-maturity U.S. Treasuries. Bond prices rise as yield spreads tighten and decline as spreads widen.] The yield on the benchmark 10-year U.S. Treasury rose from 2.67% at the start of the period to 3.52% at period-end.

How did the fund perform for the reporting period?

The fund returned –0.76%, outperforming the fund’s primary benchmark, the George Putnam Blended Index, which returned –0.97%.

What were some stocks that helped fund performance during the reporting period?

NVIDIA, a U.S.-based software firm, was the top equity contributor to fund performance. NVIDIA designs and sells graphics processing units [GPUs] to industries such as gaming and entertainment, automotive, computing, and robotics. The company’s GPUs power everything from gaming consoles and autonomous cars to cryptocurrencies like Bitcoin.

During the period, the global semiconductor industry started to emerge from a cyclical downturn, which provided a tailwind for NVIDIA’s stock. Over the long run, we believe NVIDIA will be a key beneficiary of new generative artificial intelligence [AI] workloads such as ChatGPT. NVIDIA’s GPUs provide the enabling technology to power innovative AI applications. NVIDIA’s stock rose as ChatGPT gained media attention following its launch in November 2022.

Oracle, the world’s largest database management company, was another top equity performer. Oracle’s cloud-based products, which include infrastructure and platform software-as-a-service offerings, have reached critical mass, in our view. Launched in 2016, Oracle’s cloud-based services now generate one-third of the company’s total revenues. Growth in Oracle’s cloud-based revenues helped to offset a decline in the company’s legacy business, which includes on-premises software and hardware. Oracle’s stock price rose on the company’s strengthening fundamentals.


What were some stocks that detracted from fund performance during the reporting period?

Amazon.com, the global e-commerce retailer, was the top equity detractor from fund performance. After soaring during the pandemic, revenues from its cloud computing platform, Amazon Web Services, began to slow. Inflation and supply chain disruptions further squeezed Amazon’s profit margins. Amazon reported negative free cash flows for calendar 2022, which dampened investor interest in the stock. We believe if inflation eases further, the stock will rebound.

Our decision not to own JPMorgan Chase & Co., a leading global financial services firm, modestly detracted from results. The stock performed well as investors became more risk averse. A strong financial franchise with a solid management team, JPMorgan had a valuation that was appropriately priced, in our view. The stock traded at a higher valuation than its peers and the sector. Our approach focuses on identifying differentiated insights at attractive valuations. As such, we have preferred exposure to names such as Apollo Global Management and Prudential, both of which were positive contributors during the period.

8 George Putnam Balanced Fund 

 


How were derivatives used during the reporting period?

We used forward currency contracts to help hedge foreign exchange risk. We also used futures to equitize cash.

How did the fund’s bond allocations perform during the period?

The fund’s bond allocation in the portfolio outperformed the Bloomberg U.S. Aggregate Bond Index by nearly 100 basis points during the period. The bond portfolio’s exposure to U.S. IG corporate credit was additive to performance, led by our positioning in the financials sector. Security selection within the industrials and utilities sectors also added to results, albeit to a lesser degree. Additionally, our tactical mortgage basis positioning [which seeks to capitalize on the difference between longer-term U.S. Treasury yields and the interest rates on 30-year home mortgages] boosted returns. We strategically positioned the bond portfolio to take advantage of fluctuating mortgage rates as they tightened or widened relative to Treasuries during the reporting period.

What is your outlook for bond markets?

We expect continued Treasury rate volatility this year. Given the surge of higher interest rates and those already priced into the market, we expect Treasury rates to stabilize or rally periodically if growth concerns escalate in calendar 2023.

While we see pockets of idiosyncratic opportunity, we have a cautious outlook on U.S. corporate credit with an expectation for elevated volatility. High inflation, central bank tightening, slowing growth, and geopolitical impacts on energy supplies remain considerable headwinds to both fundamentals and market technicals [supply/demand metrics], in our view. However, we believe that we may be nearing a point in the coming months where the Fed’s interest-rate hiking cycle will start to wind down.


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 portfolio schedule included in the financial statements due to the inclusion of derivative securities, any interest accruals, the exclusion of as-of trades, if any, the use of different classifications of securities for presentation purposes, and rounding. Holdings and allocations may vary over time.

George Putnam Balanced Fund 9 

 


We believe that corporate fundamentals, while strong, have likely peaked as higher interest rates and slower growth weighed on financial conditions. We believe technicals are improving modestly as domestic flows have turned positive in 2023. However, elevated foreign exchange hedging costs remain an overhang on the market, in our view. We believe valuations are trending in neutral territory with investment-grade spreads trading near long-term averages. We believe valuations are somewhat more attractive compared with last year. Credit spreads do not reflect near-term recessionary risks, in our view.

Risks to our outlook include policy missteps from global central banks; a more severe slowdown or recession than the market anticipates; ongoing supply chain disruptions; commodity price volatility; heightened geopolitical tensions; and the impact of a surge in Covid-19 cases.

What is your outlook for the economy and the fund?

Last year was very challenging for financial markets and all asset classes. While 2022 is behind us, we expect market volatility will continue until inflation is better understood and central banks become less hawkish.

On the positive side, commodity prices are moving off their highs, supply chains are easing, inventories of goods are piling up, and the U.S. housing market is slowing. These conditions help to de-escalate inflation, in our view. Still, we believe it will take some time before this is reflected in macroeconomic data.

Some data, including CPI, has shown a decline in the pace of inflation. Yet, inflation remains very high, and it has persisted longer than expected. In our view, the Fed seems intent on raising interest rates and keeping them higher for longer than most investors anticipate. Whether or not the Fed will reduce rates depends on a further reduction in inflation and an increase in unemployment, in our view.

As we enter calendar 2023, we remain optimistic. Many sectors and industries that were devastated two years ago, at the start of the pandemic, are now thriving, in our view. We believe that many stocks and bonds will rebound if the Fed slows interest-rate hikes further.

For the fund, we continue to use deep fundamental research to evaluate businesses in the context of macroeconomic challenges. We invest in companies that we believe can weather macro-driven risks and will rebound as conditions shift in calendar 2023. The fund’s portfolio represents our best ideas that we believe will outperform the primary benchmark over the long run.

Thank you both 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.

Of special interest

Effective November 2022, the fund increased its quarterly distribution rate for class A shares from $0.041 to $0.055, as a result of higher levels of income earned by the portfolio. Similar increases were made to other share classes.

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Your fund’s performance

This section shows your fund’s performance, price, and distribution information for periods ended January 31, 2023, the end of the first half of its current 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 R, R5, 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 1/31/23

  Life of fund  10 years  5 years  3 years  1 year  6 months 
Class A (11/5/37)             
Before sales charge  8.56%  7.99%  6.24%  4.94%  –8.01%  –0.76% 
After sales charge  8.48  7.35  4.99  2.89  –13.30  –6.47 
Class B (4/27/92)             
Before CDSC  8.45  7.34  5.45  4.16  –8.72  –1.13 
After CDSC  8.45  7.34  5.13  3.26  –13.19  –5.97 
Class C (7/26/99)             
Before CDSC  8.48  7.34  5.43  4.14  –8.76  –1.15 
After CDSC  8.48  7.34  5.43  4.14  –9.65  –2.12 
Class M (12/1/94)             
Before sales charge  7.85  7.45  5.71  4.42  –8.50  –0.98 
After sales charge  7.80  7.07  4.96  3.19  –11.70  –4.44 
Class R (1/21/03)             
Net asset value  8.29  7.72  5.97  4.69  –8.24  –0.87 
Class R5 (12/2/13)             
Net asset value  8.65  8.28  6.52  5.21  –7.76  –0.57 
Class R6 (12/2/13)             
Net asset value  8.66  8.36  6.61  5.30  –7.74  –0.59 
Class Y (3/31/94)             
Net asset value  8.65  8.27  6.51  5.21  –7.78  –0.59 

 

Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results. After-sales-charge returns for class A and M shares reflect the deduction of the maximum 5.75% and 3.50% sales charge, respectively, 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 R, R5, R6, and Y shares have no initial sales charge or CDSC. Performance for class B, C, M, R, 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 R5 and 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 R5 and R6 shares; had it, returns would have been higher.

Returns for periods of less than one year are not annualized.

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.

George Putnam Balanced Fund 11 

 


Comparative annualized index returns For periods ended 1/31/23

  Life of fund  10 years  5 years  3 years  1 year  6 months 
George Putnam Blended             
Index†  —*  8.48%  6.64%  5.67%  –7.68%  –0.97% 
Bloomberg U.S. Aggregate             
Bond Index  —*  1.43  0.86  –2.35  –8.36  –2.37 
S&P 500 Index  —*  12.68  9.54  9.88  –8.22  –0.44 
Lipper Balanced Funds             
category median ‡  —*  5.76  3.94  3.95  –7.19  1.04 

 

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

Returns for periods of less than one year are not annualized.

All Bloomberg indices are provided by Bloomberg Index Services Limited.

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

* The fund’s benchmarks, the George Putnam Blended Index and the S&P 500 Index, were introduced on 12/31/78 and 12/31/69, respectively; the Bloomberg U.S. Aggregate Bond Index was introduced on 12/31/75; and the fund’s Lipper group (Balanced Funds) was introduced on 12/31/59; they all post-date the inception of the fund’s class A shares.

† The George Putnam Blended Index is an unmanaged index administered by Putnam Management, 60% of which is the S&P 500 Index and 40% of which is the Bloomberg U.S. Aggregate Bond Index.

‡ Over the 6-month, 1-year, 3-year, 5-year, and 10-year, periods ended 1/31/23, there were 437, 433, 399, 379, and 292, respectively, in this Lipper category.

12 George Putnam Balanced Fund 

 


Fund price and distribution information For the six-month period ended 1/31/23

Distributions  Class A  Class B  Class C  Class M  Class R  Class R5  Class R6  Class Y 
Number  2  1  2  2  2  2  2  2 
Income  $0.096  $0.015  $0.019  $0.046  $0.064  $0.114  $0.131  $0.121 
Capital gains                     
Long-term                     
gains  0.400  0.400  0.400  0.400  0.400  0.400  0.400  0.400 
Short-term                     
gains  —  —  —  —  —  —  —  — 
Total  $0.496  $0.415  $0.419  $0.446  $0.464  $0.514  $0.531  $0.521 
  Before  After  Net  Net  Before  After  Net  Net  Net  Net 
  sales  sales  asset  asset  sales  sales  asset  asset  asset  asset 
Share value  charge  charge  value  value  charge  charge  value  value  value  value 
7/31/22  $21.02  $22.30  $20.68  $20.75  $20.63  $21.38  $20.92  $21.31  $21.13  $21.12 
1/31/23  20.35  21.59  20.02  20.08  19.97  20.69  20.26  20.66  20.46  20.46 
Current rate  Before  After  Net  Net  Before  After  Net  Net  Net  Net 
(end of  sales  sales  asset  asset  sales  sales  asset  asset  asset  asset 
period)  charge  charge  value  value  charge  charge  value  value  value  value 
Current                     
dividend rate1  1.08%  1.02%  0.30%  0.34%  0.62%  0.60%  0.73%  1.30%  1.41%  1.31% 
Current                     
30-day                     
SEC yield2  N/A  1.50  0.86  0.86  N/A  1.07  1.35  1.85  1.91  1.83 

 

The classification of distributions, if any, is an estimate. Before-sales-charge share value and current dividend rate for class A and M 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 (5.75% for class A shares and 3.50% for class M shares) was levied at the time of purchase. Final distribution information will appear on your year-end tax forms.

1 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.

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

George Putnam Balanced Fund 13 

 


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

  Life of fund  10 years  5 years  3 years  1 year  6 months 
Class A (11/5/37)             
Before sales charge  8.50%  7.81%  5.85%  3.39%  –15.92%  0.79% 
After sales charge  8.43  7.18  4.60  1.37  –20.76  –5.01 
Class B (4/27/92)             
Before CDSC  8.40  7.17  5.06  2.62  –16.56  0.39 
After CDSC  8.40  7.17  4.75  1.73  –20.65  –4.52 
Class C (7/26/99)             
Before CDSC  8.43  7.17  5.06  2.62  –16.57  0.36 
After CDSC  8.43  7.17  5.06  2.62  –17.39  –0.62 
Class M (12/1/94)             
Before sales charge  7.79  7.28  5.33  2.89  –16.34  0.55 
After sales charge  7.75  6.90  4.58  1.67  –19.27  –2.97 
Class R (1/21/03)             
Net asset value  8.23  7.54  5.58  3.12  –16.16  0.58 
Class R5 (12/2/13)             
Net asset value  8.60  8.11  6.13  3.66  –15.70  0.92 
Class R6 (12/2/13)             
Net asset value  8.61  8.19  6.22  3.74  –15.67  0.91 
Class Y (3/31/94)             
Net asset value  8.60  8.09  6.12  3.67  –15.72  0.91 

 

See the discussion following the fund performance table on page 11 for information about the calculation of fund performance.

Returns for periods of less than one year are not annualized.

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

  Class A  Class B  Class C  Class M  Class R  Class R5  Class R6  Class Y 
Total annual operating                 
expenses for the fiscal year                 
ended 7/31/22  0.94%  1.69%  1.69%  1.44%  1.19%  0.71%  0.61%  0.69% 
Annualized expense ratio                 
for the six-month period                 
ended 1/31/23  0.96%  1.71%  1.71%  1.46%  1.21%  0.72%  0.62%  0.71% 

 

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.

14 George Putnam Balanced Fund 

 


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 8/1/22 to 1/31/23. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.

  Class A  Class B  Class C  Class M  Class R  Class R5  Class R6  Class Y 
Expenses paid per $1,000*†  $4.82  $8.57  $8.57  $7.32  $6.07  $3.62  $3.12  $3.57 
Ending value (after expenses)  $992.40  $988.70  $988.50  $990.20  $991.30  $994.30  $994.10  $994.10 

 

* 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 1/31/23. 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 (184); 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 1/31/23, use the following calculation method. To find the value of your investment on 8/1/22, 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.

  Class A  Class B  Class C  Class M  Class R  Class R5  Class R6  Class Y 
Expenses paid per $1,000*†  $4.89  $8.69  $8.69  $7.43  $6.16  $3.67  $3.16  $3.62 
Ending value (after expenses)  $1,020.37  $1,016.59  $1,016.59  $1,017.85  $1,019.11  $1,021.58  $1,022.08  $1,021.63 

 

* 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 1/31/23. 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 (184); and then dividing that result by the number of days in the year (365).

George Putnam Balanced Fund 15 

 


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.

Growth stocks may be more susceptible to earnings disappointments, and value stocks may fail to rebound. 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 generally greater for longer-term bonds, and credit risk is generally greater for below-investment-grade bonds. Risks associated with derivatives include increased investment exposure (which may be considered leverage) and, in the case of over-the-counter instruments, the potential inability to terminate or sell derivatives positions and the potential failure of the other party to the instrument to meet its obligations.

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 have a negative effect on the fund. You can lose money by investing in the fund.

16 George Putnam Balanced 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 5.75% maximum sales charge for class A shares and 3.50% for class M 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.

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.

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 M shares have a lower initial sales charge and a higher 12b-1 fee than class A shares and no CDSC.

Class R shares are not subject to an initial sales charge or CDSC and are only available to employer-sponsored retirement plans.

Class R5 shares are not subject to an initial sales charge or CDSC and carry no 12b-1 fee. They are only available to employer-sponsored retirement plans.

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.

Comparative indexes

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

George Putnam Blended Index is an unmanaged index administered by Putnam Management, 60% of which is the S&P 500® Index and 40% of which is the Bloomberg U.S. Aggregate Bond Index.

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.

George Putnam Balanced Fund 17 

 


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.

18 George Putnam Balanced Fund 

 


Other information for shareholders

Important notice regarding delivery of shareholder documents

In accordance with Securities and Exchange Commission (SEC) regulations, Putnam sends a single notice of internet availability, or a single printed copy, of annual and semiannual shareholder reports, prospectuses, and proxy statements to Putnam shareholders who share the same address, unless a shareholder requests otherwise. If you prefer to receive your own copy of these documents, please call Putnam at 1-800-225-1581, and Putnam will begin sending individual copies within 30 days.

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 SEC’s 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 January 31, 2023, Putnam employees had approximately $478,000,000 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.

George Putnam Balanced Fund 19 

 


Financial statements

These sections of the report, as well as the accompanying Notes, constitute the fund’s 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. Dividend sources are estimated at the time of declaration. Actual results may vary. Any non-taxable return of capital cannot be determined until final tax calculations are completed after the end of the fund’s fiscal period.

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.

20 George Putnam Balanced Fund 

 


The fund’s portfolio 1/31/23 (Unaudited)
COMMON STOCKS (61.6%)* Shares Value
Automotive (1.2%)
General Motors Co. 44,661 $1,756,071
Hertz Global Holdings, Inc. † S 77,751 1,401,073
Tesla, Inc. † 60,132 10,416,065
United Rentals, Inc. † 12,495 5,509,670
19,082,879
Basic materials (2.3%)
Agnico-Eagle Mines, Ltd. (Canada) 63,732 3,599,130
Alamos Gold, Inc. Class A (Canada) 254,238 2,806,788
Avery Dennison Corp. 14,053 2,662,200
Corteva, Inc. 82,473 5,315,385
CRH PLC ADR (Ireland) S 61,797 2,909,403
DuPont de Nemours, Inc. 97,606 7,217,964
Eastman Chemical Co. 33,890 2,988,081
Linde PLC 3,817 1,263,198
PPG Industries, Inc. 24,985 3,256,545
Sherwin-Williams Co. (The) 21,400 5,063,026
37,081,720
Capital goods (3.5%)
Berry Global Group, Inc. 32,696 2,018,324
Boeing Co. (The) † 7,035 1,498,455
Deere & Co. 6,829 2,887,574
Emerson Electric Co. 35,318 3,186,390
Honeywell International, Inc. 40,011 8,341,493
Ingersoll Rand, Inc. 75,940 4,252,640
Johnson Controls International PLC 128,372 8,930,840
Northrop Grumman Corp. 16,463 7,376,083
Otis Worldwide Corp. 110,159 9,058,375
Raytheon Technologies Corp. 95,211 9,506,812
57,056,986
Commercial and consumer services (2.4%)
Adyen NV (Netherlands) † 1,522 2,300,883
Aramark 59,140 2,633,504
Booking Holdings, Inc. † 3,879 9,441,874
Mastercard, Inc. Class A 63,560 23,555,336
PayPal Holdings, Inc. † 22,551 1,837,681
39,769,278
Communication services (1.2%)
American Tower Corp. R 9,543 2,131,811
Charter Communications, Inc. Class A † 10,280 3,950,707
T-Mobile US, Inc. † 91,885 13,719,349
19,801,867
Computers (3.3%)
Apple, Inc. 309,034 44,590,516
CDW Corp./DE 50,880 9,974,006
54,564,522
Conglomerates (0.1%)
General Electric Co. 19,793 1,592,941
1,592,941


George Putnam Balanced Fund 21


COMMON STOCKS (61.6%)* cont. Shares Value
Consumer (0.1%)
4Front Ventures Corp. † 4,194,781 $1,040,725
1,040,725
Consumer staples (4.2%)
Altria Group, Inc. 46,055 2,074,317
Chipotle Mexican Grill, Inc. † 2,936 4,833,772
Coca-Cola Co. (The) 186,576 11,440,840
Constellation Brands, Inc. Class A 4,859 1,124,956
Costco Wholesale Corp. 12,858 6,572,238
McCormick & Co., Inc. (non-voting shares) 29,377 2,206,800
Netflix, Inc. † 18,896 6,686,539
PepsiCo, Inc. 88,261 15,094,396
Procter & Gamble Co. (The) 127,830 18,200,435
Sea, Ltd. ADR (Singapore) † S 26,351 1,698,322
69,932,615
Electronics (2.8%)
Advanced Micro Devices, Inc. † 143,057 10,750,734
NVIDIA Corp. 108,969 21,289,274
Qualcomm, Inc. 82,943 11,048,837
Vontier Corp. 156,178 3,596,779
46,685,624
Energy (3.7%)
Cenovus Energy, Inc. (Canada) 716,052 14,304,357
ConocoPhillips 59,400 7,239,078
Diamond Offshore Drilling, Inc. † 579,257 6,638,285
Enphase Energy, Inc. † 1,532 339,154
Exxon Mobil Corp. 225,978 26,215,708
Shell PLC (London Exchange) (United Kingdom) 219,959 6,460,690
61,197,272
Financials (7.5%)
AIA Group, Ltd. (Hong Kong) 462,200 5,219,399
Apollo Global Management, Inc. 148,675 10,523,217
Assured Guaranty, Ltd. 177,979 11,141,485
AXA SA (France) 185,659 5,787,631
Bank of America Corp. 273,266 9,695,478
Charles Schwab Corp. (The) 130,459 10,100,136
Citigroup, Inc. 296,005 15,457,381
Gaming and Leisure Properties, Inc. R 138,606 7,423,737
Goldman Sachs Group, Inc. (The) 44,572 16,304,883
KKR & Co., Inc. 139,779 7,801,066
Prudential PLC (United Kingdom) 521,784 8,646,617
Quilter PLC (United Kingdom) 1,876,788 2,241,387
Silvergate Capital Corp. Class A † S 45,216 643,876
Visa, Inc. Class A 44,851 10,325,149
Vornado Realty Trust R S 82,743 2,018,102
123,329,544
Gaming and lottery (0.1%)
Penn Entertainment, Inc. † S 66,150 2,345,018
2,345,018


22 George Putnam Balanced Fund


COMMON STOCKS (61.6%)* cont. Shares Value
Health care (9.4%)
Abbott Laboratories 48,171 $5,325,304
AbbVie, Inc. 38,597 5,702,707
Alkermes PLC † 125,509 3,594,578
Ascendis Pharma A/S ADR (Denmark) † S 30,341 3,764,711
Avantor, Inc. † 102,463 2,448,866
Becton Dickinson and Co. 14,286 3,603,215
Bio-Rad Laboratories, Inc. Class A † 7,588 3,547,086
Biogen, Inc. † 11,424 3,323,242
Boston Scientific Corp. † 130,310 6,026,838
Cigna Corp. 51,197 16,212,554
Danaher Corp. 26,129 6,907,985
Dexcom, Inc. † 26,406 2,827,819
Elevance Health, Inc. 3,483 1,741,465
Eli Lilly and Co. 27,662 9,519,877
Humana, Inc. 6,467 3,309,164
Illumina, Inc. † 2,237 479,165
Innoviva, Inc. † 300,790 3,804,994
Intuitive Surgical, Inc. † 17,999 4,422,174
Johnson & Johnson 63,539 10,383,543
McKesson Corp. 23,325 8,832,711
Medtronic PLC 7,888 660,147
Merck & Co., Inc. 100,017 10,742,826
Pfizer, Inc. 114,595 5,060,515
Regeneron Pharmaceuticals, Inc. † 1,937 1,469,156
Thermo Fisher Scientific, Inc. 16,175 9,225,088
UnitedHealth Group, Inc. 39,285 19,610,679
Zoetis, Inc. 13,653 2,259,435
154,805,844
Homebuilding (0.6%)
PulteGroup, Inc. 168,861 9,606,502
9,606,502
Lodging/Tourism (0.3%)
Hilton Worldwide Holdings, Inc. 37,264 5,406,634
5,406,634
Media (0.3%)
Walt Disney Co. (The) † 44,710 4,850,588
4,850,588
Publishing (0.3%)
S&P Global, Inc. 11,997 4,498,155
4,498,155
Retail (5.2%)
Amazon.com, Inc. † 284,553 29,345,951
Bath & Body Works, Inc. 25,282 1,163,225
BJ’s Wholesale Club Holdings, Inc. † 14,360 1,040,669
CarMax, Inc. † S 38,478 2,710,775
Home Depot, Inc. (The) 66,384 21,519,701
Lululemon Athletica, Inc. (Canada) † 3,964 1,216,472
Nike, Inc. Class B 28,819 3,669,523


George Putnam Balanced Fund 23



COMMON STOCKS (61.6%)* cont. Shares Value
Retail cont.
O’Reilly Automotive, Inc. † 5,903 $4,677,242
Target Corp. 37,279 6,417,207
TJX Cos., Inc. (The) 27,196 2,226,265
Walmart, Inc. 77,822 11,196,251
Warby Parker, Inc. Class A † S 31,530 509,210
85,692,491
Semiconductor (0.6%)
Applied Materials, Inc. 86,644 9,659,940
9,659,940
Software (5.3%)
Intuit, Inc. 23,818 10,067,154
Microsoft Corp. 220,253 54,580,896
Oracle Corp. 257,937 22,817,107
87,465,157
Technology services (3.7%)
Alphabet, Inc. Class A † 383,754 37,930,245
Meta Platforms, Inc. Class A † 67,734 10,090,334
salesforce.com, Inc. † 72,831 12,233,423
60,254,002
Textiles (0.1%)
Levi Strauss & Co. Class A 68,924 1,268,202
1,268,202
Transportation (1.5%)
CSX Corp. 93,824 2,901,038
FedEx Corp. 19,669 3,813,032
Southwest Airlines Co. 92,926 3,323,963
Union Pacific Corp. 73,679 15,044,515
25,082,548
Utilities and power (1.9%)
Ameren Corp. 39,811 3,458,382
Constellation Energy Corp. 12,939 1,104,473
Exelon Corp. 153,748 6,486,628
NextEra Energy, Inc. 62,404 4,657,211
NRG Energy, Inc. 391,880 13,410,134
PG&E Corp. † 184,226 2,929,193
32,046,021
Total common stocks (cost $780,487,802) $1,014,117,075

U.S. GOVERNMENT AND AGENCY
MORTGAGE OBLIGATIONS (8.1%)*		 Principal
amount		 Value
U.S. Government Guaranteed Mortgage Obligations (2.1%)
Government National Mortgage Association Pass-Through Certificates    
5.00%, with due dates from 2/20/49 to 10/20/49 $1,336,265 $1,355,723
4.50%, with due dates from 3/20/49 to 10/20/49 380,415 380,101
4.00%, 4/15/43 1,842,808 1,807,793
3.50%, with due dates from 11/15/47 to 4/20/51 10,148,218 9,629,585
3.00%, with due dates from 7/20/46 to 11/20/46 22,998,292 21,482,559
2.00%, 1/20/51 1,749,632 1,471,746
36,127,507


24 George Putnam Balanced Fund



U.S. GOVERNMENT AND AGENCY
MORTGAGE OBLIGATIONS (8.1%)* cont.		 Principal
amount		 Value
U.S. Government Agency Mortgage Obligations (6.0%)
Federal Home Loan Mortgage Corporation Pass-Through Certificates    
6.00%, 3/1/35 $566 $591
4.50%, 8/1/52 1,987,499 1,968,952
4.00%, with due dates from 7/1/42 to 7/1/49 2,693,163 2,651,445
3.50%, with due dates from 12/1/42 to 4/1/43 255,328 246,555
3.00%, with due dates from 3/1/43 to 2/1/47 1,060,487 983,332
2.50%, with due dates from 7/1/50 to 2/1/51 1,391,801 1,235,584
Federal National Mortgage Association Pass-Through Certificates    
5.50%, with due dates from 7/1/33 to 11/1/38 689,829 716,551
5.00%, with due dates from 8/1/33 to 10/1/52 1,191,538 1,206,306
4.50%, with due dates from 5/1/48 to 2/1/49 1,763,964 1,777,823
4.00%, with due dates from 9/1/45 to 4/1/49 2,081,093 2,049,055
3.50%, 5/1/56 862,423 817,415
3.50%, with due dates from 5/1/43 to 12/1/49 5,288,451 5,035,899
3.00%, with due dates from 2/1/43 to 8/1/51 22,476,908 20,753,623
3.00%, 12/1/30 915,588 890,108
2.50%, with due dates from 7/1/50 to 7/1/51 43,060,286 37,801,966
2.50%, 2/1/36 1,898,024 1,783,901
2.00%, 10/1/50 9,793,027 8,293,754
2.00%, with due dates from 10/1/27 to 8/1/28 2,347,867 2,228,129
Uniform Mortgage-Backed Securities    
4.50%, TBA, 2/1/53 1,000,000 987,734
4.00%, TBA, 2/1/53 3,000,000 2,895,938
3.50%, TBA, 2/1/53 2,000,000 1,877,031
3.00%, TBA, 2/1/53 2,000,000 1,815,312
98,017,004
Total U.S. government and agency mortgage obligations (cost $144,408,372) $134,144,511

U.S. TREASURY OBLIGATIONS (12.8%)* Principal
amount		 Value
U.S. Treasury Bonds    
3.00%, 2/15/49 $2,120,000 $1,874,130
3.00%, 2/15/47 18,620,000 16,346,057
2.75%, 8/15/42 # ∆ 31,400,000 26,851,434
1.875%, 2/15/51 12,090,000 8,329,349
1.25%, 5/15/50 10,760,000 6,322,761
U.S. Treasury Notes    
2.75%, 8/15/32 1,610,000 1,514,909
2.75%, 2/15/28 6,260,000 6,008,866
2.25%, 11/15/27 13,420,000 12,605,619
1.75%, 12/31/24 11,900,000 11,364,035
1.625%, 5/15/31 18,490,000 16,087,022
1.625%, 9/30/26 26,320,000 24,427,222
1.625%, 2/15/26 26,380,000 24,688,309
1.50%, 2/15/30 18,070,000 15,862,072
1.375%, 11/15/31 8,390,000 7,073,491
1.125%, 2/28/25 27,490,000 25,849,191
0.625%, 10/15/24 6,150,000 5,777,637
Total U.S. treasury obligations (cost $240,537,138) $210,982,104


George Putnam Balanced Fund 25


CORPORATE BONDS AND NOTES (14.4%)* Principal
amount		 Value
Basic materials (1.0%)
Cabot Corp. sr. unsec. bonds 5.00%, 6/30/32   $985,000 $960,210
Celanese US Holdings, LLC company guaranty sr. unsec. notes 6.165%, 7/15/27 (Germany)   1,480,000 1,499,108
Celanese US Holdings, LLC company guaranty sr. unsec. notes 3.50%, 5/8/24 (Germany)   289,000 282,883
Celanese US Holdings, LLC company guaranty sr. unsec. notes 1.40%, 8/5/26 (Germany)   750,000 646,063
CF Industries, Inc. company guaranty sr. unsec. bonds 4.95%, 6/1/43   1,539,000 1,400,658
CF Industries, Inc. 144A company guaranty sr. notes 4.50%, 12/1/26   76,000 74,955
Georgia-Pacific, LLC 144A sr. unsec. sub. notes 2.10%, 4/30/27   1,525,000 1,389,621
Glencore Funding, LLC 144A company guaranty sr. unsec. notes 4.125%, 3/12/24   344,000 339,948
Glencore Funding, LLC 144A company guaranty sr. unsec. notes 2.50%, 9/1/30   1,998,000 1,693,070
Huntsman International, LLC sr. unsec. notes 4.50%, 5/1/29   1,600,000 1,500,327
International Flavors & Fragrances, Inc. sr. unsec. notes 4.45%, 9/26/28   625,000 604,295
International Flavors & Fragrances, Inc. 144A company guaranty sr. unsec. bonds 3.468%, 12/1/50   204,000 151,332
International Flavors & Fragrances, Inc. 144A sr. unsec. notes 2.30%, 11/1/30   356,000 295,060
Nutrien, Ltd. sr. unsec. notes 4.00%, 12/15/26 (Canada)   1,170,000 1,153,275
Sherwin-Williams Co. (The) sr. unsec. unsub. bonds 3.45%, 6/1/27   801,000 769,220
Westlake Corp. sr. unsec. bonds 3.125%, 8/15/51   1,857,000 1,237,495
Westlake Corp. sr. unsec. bonds 2.875%, 8/15/41   928,000 652,811
WestRock MWV, LLC company guaranty sr. unsec. unsub. notes 8.20%, 1/15/30   1,040,000 1,218,686
WestRock MWV, LLC company guaranty sr. unsec. unsub. notes 7.95%, 2/15/31   187,000 217,686
Weyerhaeuser Co. sr. unsec. unsub. notes 7.375%, 3/15/32 R   156,000 180,142
16,266,845
Capital goods (0.6%)
Berry Global, Inc. 144A company guaranty sr. notes 1.65%, 1/15/27   1,045,000 914,177
Berry Global, Inc. 144A company guaranty sr. notes 1.57%, 1/15/26   1,225,000 1,107,367
Boeing Co. (The) sr. unsec. notes 2.196%, 2/4/26   1,405,000 1,298,962
Boeing Co. (The) sr. unsec. unsub. bonds 3.375%, 6/15/46   310,000 221,801
L3Harris Technologies, Inc. sr. unsec. notes 3.85%, 12/15/26   1,848,000 1,797,549
Northrop Grumman Corp. sr. unsec. unsub. notes 3.25%, 1/15/28   1,619,000 1,537,448
Oshkosh Corp. sr. unsec. unsub. notes 3.10%, 3/1/30   164,000 143,832
Otis Worldwide Corp. sr. unsec. notes 2.293%, 4/5/27   662,000 606,924
Waste Connections, Inc. sr. unsec. bonds 4.20%, 1/15/33   325,000 315,720
Waste Connections, Inc. sr. unsec. notes 4.25%, 12/1/28   1,318,000 1,297,438
9,241,218
Communication services (1.3%)
American Tower Corp. sr. unsec. notes 3.125%, 1/15/27 R   1,710,000 1,600,760
American Tower Corp. sr. unsec. notes 2.90%, 1/15/30 R   921,000 804,670
American Tower Corp. sr. unsec. sub. notes 2.75%, 1/15/27 R   686,000 632,235
AT&T, Inc. company guaranty sr. unsec. unsub. notes 2.30%, 6/1/27   1,227,000 1,121,398


26 George Putnam Balanced Fund


CORPORATE BONDS AND NOTES (14.4%)* cont. Principal
amount		 Value
Communication services cont.
AT&T, Inc. sr. unsec. bonds 3.55%, 9/15/55   $62,000 $45,364
AT&T, Inc. sr. unsec. unsub. bonds 2.55%, 12/1/33   1,634,000 1,321,207
AT&T, Inc. sr. unsec. unsub. bonds 2.25%, 2/1/32   1,107,000 903,923
AT&T, Inc. sr. unsec. unsub. notes 4.75%, 5/15/46   132,000 121,669
Charter Communications Operating, LLC/Charter Communications Operating Capital Corp. company guaranty sr. notes 2.25%, 1/15/29   274,000 229,674
Charter Communications Operating, LLC/Charter Communications Operating Capital Corp. company guaranty sr. sub. bonds 6.484%, 10/23/45   1,055,000 1,037,851
Charter Communications Operating, LLC/Charter Communications Operating Capital Corp. sr. bonds 3.70%, 4/1/51   65,000 43,183
Comcast Corp. company guaranty sr. unsec. notes 3.45%, 2/1/50   1,618,000 1,281,120
Comcast Corp. company guaranty sr. unsec. unsub. bonds 3.999%, 11/1/49   921,000 792,286
Comcast Corp. company guaranty sr. unsec. unsub. bonds 2.35%, 1/15/27   289,000 268,159
Cox Communications, Inc. 144A sr. unsec. bonds 3.50%, 8/15/27   637,000 606,343
Crown Castle, Inc. sr. unsec. bonds 3.80%, 2/15/28 R   458,000 437,059
Crown Castle, Inc. sr. unsec. bonds 3.65%, 9/1/27 R   549,000 523,830
Crown Castle, Inc. sr. unsec. notes 4.75%, 5/15/47 R   185,000 167,199
Crown Castle, Inc. sr. unsec. sub. bonds 3.30%, 7/1/30 R   890,000 809,022
Crown Castle, Inc. sr. unsec. sub. bonds 2.25%, 1/15/31   1,275,000 1,064,165
Equinix, Inc. sr. unsec. sub. notes 3.20%, 11/18/29 R   1,483,000 1,342,431
Rogers Communications, Inc. company guaranty sr. unsec. bonds 8.75%, 5/1/32 (Canada)   95,000 113,011
T-Mobile USA, Inc. company guaranty sr. notes 3.875%, 4/15/30   48,000 44,956
T-Mobile USA, Inc. company guaranty sr. notes 3.75%, 4/15/27   1,762,000 1,694,827
T-Mobile USA, Inc. company guaranty sr. unsec. notes 2.625%, 2/15/29   628,000 548,872
Verizon Communications, Inc. sr. unsec. bonds 3.70%, 3/22/61   960,000 729,246
Verizon Communications, Inc. sr. unsec. notes 3.15%, 3/22/30   700,000 635,719
Verizon Communications, Inc. sr. unsec. notes 2.55%, 3/21/31   480,000 409,702
Verizon Communications, Inc. sr. unsec. unsub. notes 4.329%, 9/21/28   1,904,000 1,878,006
21,207,887
Conglomerates (0.1%)
General Electric Co. jr. unsec. sub. FRN (ICE LIBOR USD 3 Month + 3.33%), 8.099%, perpetual maturity   909,000 905,819
905,819
Consumer cyclicals (1.1%)
Alimentation Couche-Tard, Inc. 144A company guaranty sr. unsec. notes 3.55%, 7/26/27 (Canada)   995,000 936,544
Alimentation Couche-Tard, Inc. 144A sr. unsec. notes 2.95%, 1/25/30 (Canada)   919,000 803,098
Amazon.com, Inc. sr. unsec. notes 3.15%, 8/22/27   654,000 625,280
Amazon.com, Inc. sr. unsec. unsub. bonds 2.70%, 6/3/60   1,542,000 1,009,580
Amazon.com, Inc. sr. unsec. unsub. notes 2.10%, 5/12/31   579,000 493,276
Autonation, Inc. company guaranty sr. unsec. notes 4.50%, 10/1/25   255,000 250,859


George Putnam Balanced Fund 27


CORPORATE BONDS AND NOTES (14.4%)* cont. Principal
amount		 Value
Consumer cyclicals cont.
Autonation, Inc. company guaranty sr. unsec. unsub. notes 3.80%, 11/15/27   $380,000 $357,213
BMW US Capital, LLC 144A company guaranty sr. unsec. notes 3.45%, 4/1/27   630,000 606,364
Booking Holdings, Inc. sr. unsec. sub. notes 4.625%, 4/13/30   1,255,000 1,259,961
Discovery Communications, LLC company guaranty sr. unsec. unsub. notes 3.625%, 5/15/30   27,000 23,750
General Motors Financial Co., Inc. company guaranty sr. unsec. notes 4.00%, 10/6/26   287,000 276,450
General Motors Financial Co., Inc. company guaranty sr. unsec. unsub. notes 4.00%, 1/15/25   175,000 171,123
General Motors Financial Co., Inc. sr. unsec. notes 6.40%, 1/9/33   800,000 831,611
General Motors Financial Co., Inc. sr. unsec. notes 1.25%, 1/8/26   252,000 225,939
General Motors Financial Co., Inc. sr. unsec. sub. notes 1.50%, 6/10/26   390,000 346,758
Global Payments, Inc. sr. unsec. notes 2.90%, 5/15/30   248,000 212,845
Interpublic Group of Cos., Inc. (The) sr. unsec. sub. bonds 4.65%, 10/1/28   1,668,000 1,644,634
Lennar Corp. company guaranty sr. unsec. unsub. notes 4.75%, 11/29/27   1,449,000 1,429,336
Omnicom Group, Inc. company guaranty sr. unsec. unsub. notes 3.60%, 4/15/26   416,000 403,269
Paramount Global sr. unsec. unsub. notes 4.20%, 6/1/29   360,000 334,075
Paramount Global sr. unsec. unsub. notes 4.00%, 1/15/26   198,000 192,099
Paramount Global sr. unsec. unsub. notes 2.90%, 1/15/27   457,000 420,384
S&P Global, Inc. company guaranty sr. unsec. bonds 2.50%, 12/1/29   1,550,000 1,373,456
S&P Global, Inc. company guaranty sr. unsec. notes 1.25%, 8/15/30   423,000 337,340
Stellantis Finance US, Inc. 144A company guaranty sr. unsec. notes 1.711%, 1/29/27   800,000 705,762
ViacomCBS, Inc. sr. unsec. notes 4.20%, 5/19/32   8,000 6,867
Walt Disney Co. (The) company guaranty sr. unsec. bonds 4.75%, 9/15/44   30,000 29,377
Warnermedia Holdings, Inc. 144A company guaranty sr. unsec. notes 3.755%, 3/15/27   2,386,000 2,236,200
17,543,450
Consumer staples (0.7%)
Anheuser-Busch Cos., LLC/Anheuser-Busch InBev Worldwide, Inc. company guaranty sr. unsec. unsub. bonds 4.90%, 2/1/46   1,009,000 984,866
Ashtead Capital, Inc. 144A company guaranty sr. unsec. notes 2.45%, 8/12/31   660,000 532,205
Ashtead Capital, Inc. 144A notes 4.375%, 8/15/27   1,155,000 1,107,687
Ashtead Capital, Inc. 144A notes 4.00%, 5/1/28   1,190,000 1,119,076
CVS Pass-Through Trust 144A sr. mtge. notes 7.507%, 1/10/32   451,689 488,226
ERAC USA Finance, LLC 144A company guaranty sr. unsec. notes 7.00%, 10/15/37   1,434,000 1,667,706
ERAC USA Finance, LLC 144A company guaranty sr. unsec. notes 5.625%, 3/15/42   566,000 576,491
ERAC USA Finance, LLC 144A company guaranty sr. unsec. notes 3.85%, 11/15/24   875,000 852,511


28 George Putnam Balanced Fund


CORPORATE BONDS AND NOTES (14.4%)* cont. Principal
amount		 Value
Consumer staples cont.
GSK Consumer Healthcare Capital US, LLC company guaranty sr. unsec. unsub. notes 3.375%, 3/24/27   $740,000 $700,466
Keurig Dr Pepper, Inc. company guaranty sr. unsec. bonds 3.20%, 5/1/30   187,000 169,013
Keurig Dr Pepper, Inc. company guaranty sr. unsec. unsub. notes 2.55%, 9/15/26   810,000 755,580
Kraft Heinz Foods Co. company guaranty sr. unsec. sub. notes 3.875%, 5/15/27   215,000 209,454
Netflix, Inc. sr. unsec. unsub. notes 5.875%, 11/15/28   648,000 672,254
Netflix, Inc. sr. unsec. unsub. notes 4.375%, 11/15/26   1,660,000 1,647,766
11,483,301
Energy (0.8%)
BP Capital Markets America, Inc. company guaranty sr. unsec. notes 3.119%, 5/4/26   770,000 740,062
BP Capital Markets America, Inc. company guaranty sr. unsec. unsub. notes 3.937%, 9/21/28   690,000 677,108
Cheniere Corpus Christi Holdings, LLC company guaranty sr. notes 5.875%, 3/31/25   463,000 467,462
Cheniere Corpus Christi Holdings, LLC company guaranty sr. notes 5.125%, 6/30/27   808,000 814,085
Cheniere Energy Partners LP company guaranty sr. unsec. unsub. notes 3.25%, 1/31/32   522,000 435,781
Continental Resources, Inc. 144A company guaranty sr. unsec. bonds 2.875%, 4/1/32   2,045,000 1,606,781
Diamondback Energy, Inc. company guaranty sr. unsec. notes 3.25%, 12/1/26   780,000 737,901
DT Midstream, Inc. 144A sr. bonds 4.30%, 4/15/32   560,000 514,432
EQT Corp. sr. unsec. notes 5.678%, 10/1/25   640,000 640,835
Equinor ASA company guaranty sr. unsec. notes 5.10%, 8/17/40 (Norway)   550,000 572,936
Kinetik Holdings LP 144A company guaranty sr. unsec. notes 5.875%, 6/15/30   890,000 845,500
ONEOK, Inc. company guaranty sr. unsec. unsub. notes 6.10%, 11/15/32   1,015,000 1,067,301
Patterson-UTI Energy, Inc. sr. unsec. sub. notes 5.15%, 11/15/29   458,000 427,885
Sabine Pass Liquefaction, LLC sr. bonds 4.20%, 3/15/28   175,000 169,601
Sabine Pass Liquefaction, LLC sr. notes 5.00%, 3/15/27   878,000 879,622
Targa Resources Partners LP/Targa Resources Partners Finance Corp. company guaranty sr. unsec. unsub. notes 4.875%, 2/1/31   835,000 780,579
Transcanada Trust company guaranty jr. unsec. sub. FRB 5.30%, 3/15/77 (Canada)   1,285,000 1,148,469
Venture Global Calcasieu Pass, LLC 144A company guaranty sr. notes 6.25%, 1/15/30   295,000 300,540
12,826,880
Financials (5.4%)
AerCap Ireland Capital DAC/AerCap Global Aviation Trust company guaranty sr. unsec. bonds 3.30%, 1/30/32 (Ireland)   2,190,000 1,838,744
AerCap Ireland Capital DAC/AerCap Global Aviation Trust company guaranty sr. unsec. notes 4.50%, 9/15/23 (Ireland)   915,000 909,958
Air Lease Corp. sr. unsec. notes Ser. MTN, 3.00%, 2/1/30   1,625,000 1,399,552
Air Lease Corp. sr. unsec. sub. bonds 4.625%, 10/1/28   328,000 316,866


George Putnam Balanced Fund 29


CORPORATE BONDS AND NOTES (14.4%)* cont. Principal
amount		 Value
Financials cont.
Air Lease Corp. sr. unsec. sub. notes 3.25%, 10/1/29   $928,000 $821,077
Ally Financial, Inc. company guaranty sr. unsec. notes 8.00%, 11/1/31   725,000 798,476
American Express Co. sr. unsec. unsub. notes 3.375%, 5/3/24   1,450,000 1,425,043
Aon PLC company guaranty sr. unsec. unsub. notes 4.25%, 12/12/42   1,265,000 1,015,203
Ares Capital Corp. sr. unsec. sub. notes 3.875%, 1/15/26   1,555,000 1,462,735
Australia and New Zealand Banking Group, Ltd. 144A unsec. sub. FRB 2.57%, 11/25/35 (Australia)   920,000 709,513
Australia and New Zealand Banking Group, Ltd./United Kingdom 144A jr. unsec. sub. FRB 6.75%, perpetual maturity (United Kingdom)   200,000 201,700
Banco Santander SA sr. unsec. unsub. FRN 1.722%, 9/14/27 (Spain)   3,800,000 3,336,975
Banco Santander SA unsec. sub. notes 5.179%, 11/19/25 (Spain)   1,200,000 1,196,162
Bank of America Corp. jr. unsec. sub. FRN Ser. AA, 6.10%, perpetual maturity   314,000 314,126
Bank of America Corp. sr. unsec. FRN Ser. MTN, 2.551%, 2/4/28   655,000 597,838
Bank of America Corp. unsec. sub. FRB 3.846%, 3/8/37   3,450,000 3,006,448
Bank of America Corp. unsec. sub. FRN (ICE LIBOR USD 3 Month + 0.76%), 5.529%, 9/15/26   275,000 271,589
Bank of America Corp. unsec. sub. notes 6.11%, 1/29/37   600,000 648,588
Bank of Montreal unsec. sub. FRN 3.803%, 12/15/32 (Canada)   390,000 357,051
Berkshire Hathaway Finance Corp. company guaranty sr. unsec. bonds 2.85%, 10/15/50   5,000 3,601
Berkshire Hathaway Finance Corp. company guaranty sr. unsec. notes 4.30%, 5/15/43   808,000 773,435
BNP Paribas SA 144A jr. unsec. sub. FRN 4.625%, perpetual maturity (France)   305,000 249,493
BNP Paribas SA 144A unsec. sub. FRB 2.588%, 8/12/35 (France)   695,000 546,136
BPCE SA 144A unsec. sub. FRB 3.648%, 1/14/37 (France)   482,000 385,871
BPCE SA 144A unsec. sub. notes 5.15%, 7/21/24 (France)   810,000 801,368
BPCE SA 144A unsec. sub. notes 4.50%, 3/15/25 (France)   1,060,000 1,032,095
Camden Property Trust sr. unsec. unsub. notes 4.875%, 6/15/23 R   1,213,000 1,210,697
Capital One Financial Corp. sr. unsec. unsub. notes 3.75%, 3/9/27   1,146,000 1,101,609
Capital One Financial Corp. unsec. sub. notes 4.20%, 10/29/25   227,000 222,122
Citigroup, Inc. jr. unsec. sub. FRN 3.875%, perpetual maturity   1,580,000 1,442,382
Citigroup, Inc. sr. unsec. FRB 3.668%, 7/24/28   10,000 9,472
Citigroup, Inc. sr. unsec. FRN 5.61%, 9/29/26   1,755,000 1,783,176
Citigroup, Inc. unsec. sub. bonds 4.75%, 5/18/46   1,540,000 1,415,098
Citigroup, Inc. unsec. sub. bonds 4.45%, 9/29/27   3,039,000 2,981,603
CNO Financial Group, Inc. sr. unsec. unsub. notes 5.25%, 5/30/25   241,000 240,889
Commonwealth Bank of Australia 144A unsec. sub. notes 2.688%, 3/11/31 (Australia)   535,000 430,123
Cooperatieve Rabobank UA 144A sr. unsec. FRN 1.98%, 12/15/27 (Netherlands)   285,000 253,280
Corebridge Financial, Inc. 144A sr. unsec. notes 3.85%, 4/5/29   765,000 714,006
Credit Agricole SA 144A unsec. sub. FRN 4.00%, 1/10/33 (France)   340,000 307,528
Credit Suisse AG sr. unsec. notes 4.75%, 8/9/24   600,000 588,035
Credit Suisse AG sr. unsec. notes 1.00%, 5/5/23   3,100,000 3,062,969


30 George Putnam Balanced Fund


CORPORATE BONDS AND NOTES (14.4%)* cont. Principal
amount		 Value
Financials cont.
Credit Suisse Group AG 144A sr. unsec. bonds 3.869%, 1/12/29 (Switzerland)   $443,000 $375,836
Credit Suisse Group AG 144A sr. unsec. FRN 2.193%, 6/5/26 (Switzerland)   320,000 281,175
Credit Suisse Group AG 144A unsec. sub. notes 6.50%, 8/8/23 (Switzerland)   729,000 717,263
Deutsche Bank AG sr. unsec. unsub. FRN 2.222%, 9/18/24 (Germany)   1,315,000 1,287,249
Deutsche Bank AG/New York, NY sr. unsec. unsub. FRN 2.311%, 11/16/27 (Germany)   1,035,000 914,755
Deutsche Bank AG/New York, NY unsec. sub. FRB 3.729%, 1/14/32 (Germany)   1,730,000 1,390,284
Digital Realty Trust LP company guaranty sr. unsec. bonds 4.45%, 7/15/28 R   1,395,000 1,351,862
Fairfax Financial Holdings, Ltd. sr. unsec. notes 4.85%, 4/17/28 (Canada)   1,225,000 1,189,845
Fairfax US, Inc. 144A company guaranty sr. unsec. notes 4.875%, 8/13/24   330,000 324,756
Fidelity National Financial, Inc. sr. unsec. bonds 3.20%, 9/17/51   573,000 360,479
Fifth Third Bancorp jr. unsec. sub. FRB 5.10%, perpetual maturity   217,000 212,041
First-Citizens Bank & Trust Co. unsec. sub. notes 6.125%, 3/9/28   1,259,000 1,319,720
Five Corners Funding Trust 144A sr. unsec. bonds 4.419%, 11/15/23   425,000 421,250
GLP Capital LP/GLP Financing II, Inc. company guaranty sr. unsec. bonds 3.25%, 1/15/32 R   505,000 418,705
Goldman Sachs Group, Inc. (The) jr. unsec. sub. FRN 3.65%, 7/28/51   620,000 539,152
Goldman Sachs Group, Inc. (The) sr. unsec. FRB 4.223%, 5/1/29   804,000 775,266
Goldman Sachs Group, Inc. (The) sr. unsec. unsub. notes 3.85%, 1/26/27   1,477,000 1,427,478
Goldman Sachs Group, Inc. (The) sr. unsec. unsub. notes 2.60%, 2/7/30   3,535,000 3,074,598
Goldman Sachs Group, Inc. (The) sr. unsec. unsub. notes 5.70%, 11/1/24   1,470,000 1,491,546
Intercontinental Exchange, Inc. sr. unsec. bonds 2.65%, 9/15/40   963,000 716,693
Intercontinental Exchange, Inc. sr. unsec. bonds 1.85%, 9/15/32   482,000 379,428
Intesa Sanpaolo SpA 144A unsec. sub. bonds 4.198%, 6/1/32 (Italy)   1,710,000 1,360,577
iStar, Inc. sr. unsec. notes 4.25%, 8/1/25 R   915,000 908,138
JPMorgan Chase & Co. jr. unsec. bonds 6.10%, perpetual maturity   195,000 194,513
JPMorgan Chase & Co. jr. unsec. sub. FRB Ser. HH, 4.60%, perpetual maturity   1,113,000 1,046,220
JPMorgan Chase & Co. jr. unsec. sub. FRB Ser. W, (ICE LIBOR USD 3 Month + 1.00%), 5.606%, 5/15/47   664,000 524,560
JPMorgan Chase & Co. jr. unsec. sub. FRN 3.65%, perpetual maturity   195,000 177,694
JPMorgan Chase & Co. sr. unsec. unsub. FRB 3.964%, 11/15/48   1,710,000 1,463,503
JPMorgan Chase & Co. sr. unsec. unsub. FRN 3.782%, 2/1/28   2,088,000 2,006,999
KKR Group Finance Co. VI, LLC 144A company guaranty sr. unsec. bonds 3.75%, 7/1/29   105,000 97,071
Lloyds Banking Group PLC unsec. sub. FRB 3.369%, 12/14/46 (United Kingdom)   735,000 529,058
Lloyds Banking Group PLC unsec. sub. notes 4.65%, 3/24/26 (United Kingdom)   315,000 309,825


George Putnam Balanced Fund 31


CORPORATE BONDS AND NOTES (14.4%)* cont. Principal
amount		 Value
Financials cont.
Marsh & McLennan Cos., Inc. sr. unsec. sub. notes 4.375%, 3/15/29   $1,422,000 $1,406,398
Massachusetts Mutual Life Insurance Co. 144A unsec. sub. bonds 3.729%, 10/15/70   1,457,000 1,057,881
MetLife Capital Trust IV 144A jr. unsec. sub. notes 7.875%, 12/15/37   2,564,000 2,820,395
Morgan Stanley unsec. sub. notes Ser. GMTN, 4.35%, 9/8/26   3,409,000 3,341,907
PNC Financial Services Group, Inc. (The) unsec. sub. FRB 4.626%, 6/6/33   2,085,000 2,016,004
Prologis LP sr. unsec. unsub. notes 2.25%, 4/15/30 R   467,000 402,819
Prologis LP sr. unsec. unsub. notes 2.125%, 4/15/27 R   194,000 177,817
Prudential Financial, Inc. jr. unsec. sub. FRN 5.20%, 3/15/44   1,485,000 1,458,935
Royal Bank of Canada unsec. sub. notes Ser. GMTN, 4.65%, 1/27/26 (Canada)   322,000 320,020
Societe Generale SA 144A jr. unsec. sub. notes 5.375%, perpetual maturity (France)   1,180,000 1,014,717
Sumitomo Mitsui Financial Group, Inc. 144A unsec. sub. bonds 4.436%, 4/2/24 (Japan)   412,000 406,586
Teachers Insurance & Annuity Association of America 144A unsec. sub. notes 6.85%, 12/16/39   263,000 304,178
Toronto-Dominion Bank (The) sr. unsec. notes 4.108%, 6/8/27 (Canada)   734,000 722,025
Truist Financial Corp. jr. unsec. sub. FRB Ser. N, 4.80%, 9/1/24   580,000 555,765
UBS AG unsec. sub. notes 5.125%, 5/15/24 (Switzerland)   2,640,000 2,616,425
US Bancorp unsec. sub. FRB 2.491%, 11/3/36   1,815,000 1,450,464
VICI Properties LP sr. unsec. unsub. notes 4.75%, 2/15/28 R   760,000 735,929
VICI Properties LP/VICI Note Co., Inc. 144A company guaranty sr. unsec. notes 3.75%, 2/15/27 R   285,000 263,324
Wells Fargo & Co. jr. unsec. sub. FRB Ser. U, 5.875%, perpetual maturity   580,000 577,216
Wells Fargo & Co. jr. unsec. sub. FRN 3.90%, perpetual maturity   610,000 562,344
Wells Fargo Bank, NA unsec. sub. notes Ser. BKNT, 6.60%, 1/15/38   1,095,000 1,263,057
Westpac Banking Corp. unsec. sub. bonds 4.421%, 7/24/39 (Australia)   670,000 583,195
Westpac Banking Corp. unsec. sub. bonds 2.963%, 11/16/40 (Australia)   597,000 429,817
92,257,389
Health care (1.1%)
Amgen, Inc. sr. unsec. bonds 4.663%, 6/15/51   710,000 652,663
Amgen, Inc. sr. unsec. unsub. notes 2.60%, 8/19/26   273,000 256,643
Becton Dickinson and Co. sr. unsec. notes 2.823%, 5/20/30   820,000 729,417
Bristol-Myers Squibb Co. sr. unsec. notes 2.75%, 2/15/23   3,100,000 3,097,893
Cigna Corp. company guaranty sr. unsec. unsub. notes 3.75%, 7/15/23   1,008,000 1,002,452
CVS Pass-Through Trust 144A sr. mtge. notes 4.704%, 1/10/36   496,540 466,470
DH Europe Finance II SARL company guaranty sr. unsec. notes 2.60%, 11/15/29 (Luxembourg)   600,000 538,514
GE Healthcare Holding, LLC 144A company guaranty sr. unsec. notes 5.65%, 11/15/27   675,000 699,369
HCA, Inc. company guaranty sr. bonds 5.25%, 6/15/26   143,000 143,167
HCA, Inc. company guaranty sr. unsec. notes 5.375%, 9/1/26   458,000 460,698


32 George Putnam Balanced Fund


CORPORATE BONDS AND NOTES (14.4%)* cont. Principal
amount		 Value
Health care cont.
HCA, Inc. company guaranty sr. unsec. unsub. notes 5.375%, 2/1/25   $475,000 $476,794
Humana, Inc. sr. unsec. unsub. notes 5.75%, 3/1/28   1,025,000 1,070,042
Service Corp. International sr. unsec. notes 4.625%, 12/15/27   185,000 175,879
Service Corp. International sr. unsec. notes 3.375%, 8/15/30   165,000 138,656
Service Corp. International sr. unsec. sub. notes 4.00%, 5/15/31   1,335,000 1,167,431
Thermo Fisher Scientific, Inc. sr. unsec. notes 4.80%, 11/21/27   1,650,000 1,694,142
UnitedHealth Group, Inc. sr. unsec. notes 2.95%, 10/15/27   1,450,000 1,368,105
UnitedHealth Group, Inc. sr. unsec. unsub. notes 5.25%, 2/15/28   1,855,000 1,933,890
Viatris, Inc. company guaranty sr. unsec. notes 2.30%, 6/22/27   565,000 498,179
Zoetis, Inc. sr. unsec. notes 3.90%, 8/20/28   1,210,000 1,182,075
Zoetis, Inc. sr. unsec. sub. notes 2.00%, 5/15/30   306,000 259,066
18,011,545
Technology (1.0%)
Alphabet, Inc. sr. unsec. bonds 2.25%, 8/15/60   1,200,000 738,518
Alphabet, Inc. sr. unsec. notes 1.998%, 8/15/26   748,000 696,059
Apple, Inc. sr. unsec. notes 1.65%, 5/11/30   15,000 12,631
Apple, Inc. sr. unsec. unsub. notes 4.375%, 5/13/45   342,000 332,868
Apple, Inc. sr. unsec. unsub. notes 3.85%, 5/4/43   486,000 441,732
Broadcom, Inc. company guaranty sr. unsec. bonds 4.15%, 11/15/30   1,119,000 1,043,839
Broadcom, Inc. 144A sr. unsec. bonds 4.926%, 5/15/37   1,515,000 1,390,562
Broadcom, Inc. 144A sr. unsec. bonds 3.187%, 11/15/36   676,000 516,901
Dell International, LLC/EMC Corp. company guaranty sr. bonds 8.35%, 7/15/46   67,000 80,867
Meta Platforms, Inc. sr. unsec. unsub. bonds 4.45%, 8/15/52   856,000 747,540
Meta Platforms, Inc. sr. unsec. unsub. notes 3.50%, 8/15/27   474,000 455,193
Microchip Technology, Inc. company guaranty sr. notes 4.333%, 6/1/23   710,000 707,708
Microsoft Corp. sr. unsec. unsub. bonds 2.921%, 3/17/52   1,150,000 879,293
Oracle Corp. sr. unsec. bonds 3.95%, 3/25/51   435,000 338,105
Oracle Corp. sr. unsec. bonds 3.65%, 3/25/41   1,750,000 1,385,069
Oracle Corp. sr. unsec. notes 1.65%, 3/25/26   1,385,000 1,263,121
Salesforce, Inc. sr. unsec. bonds 3.05%, 7/15/61   1,463,000 1,009,135
Salesforce, Inc. sr. unsec. bonds 2.90%, 7/15/51   1,462,000 1,044,322
Sensata Technologies, Inc. 144A company guaranty sr. unsec. notes 3.75%, 2/15/31   1,310,000 1,111,990
ServiceNow, Inc. sr. unsec. notes 1.40%, 9/1/30   1,520,000 1,201,323
Workday, Inc. sr. unsec. notes 3.70%, 4/1/29   555,000 523,786
15,920,562
Transportation (0.2%)
Penske Truck Leasing Co. LP/PTL Finance Corp. 144A sr. unsec. bonds 3.40%, 11/15/26   595,000 554,981
Penske Truck Leasing Co. LP/PTL Finance Corp. 144A sr. unsec. notes 4.40%, 7/1/27   2,165,000 2,112,924
2,667,905
Utilities and power (1.1%)
AES Corp. (The) sr. unsec. unsub. notes 2.45%, 1/15/31   1,045,000 863,960
American Electric Power Co., Inc. sr. unsec. unsub. notes Ser. J, 4.30%, 12/1/28   528,000 516,271


George Putnam Balanced Fund 33



CORPORATE BONDS AND NOTES (14.4%)* cont. Principal
amount		 Value
Utilities and power cont.
American Transmission Systems, Inc. 144A sr. unsec. bonds 2.65%, 1/15/32   $385,000 $327,734
Appalachian Power Co. sr. unsec. unsub. notes Ser. L, 5.80%, 10/1/35   560,000 576,149
Boardwalk Pipelines LP company guaranty sr. unsec. notes 3.60%, 9/1/32   264,000 229,540
Commonwealth Edison Co. sr. mtge. bonds 5.875%, 2/1/33   610,000 647,053
Consolidated Edison Co. of New York, Inc. sr. unsec. unsub. notes 4.20%, 3/15/42   255,000 227,572
Duke Energy Carolinas, LLC sr. mtge. notes 4.25%, 12/15/41   520,000 474,054
Duke Energy Ohio, Inc. sr. bonds 3.65%, 2/1/29   280,000 267,561
El Paso Natural Gas Co., LLC company guaranty sr. unsec. unsub. notes 8.375%, 6/15/32   490,000 572,574
Enbridge, Inc. sr. unsec. unsub. bonds 4.25%, 12/1/26 (Canada)   416,000 407,432
Energy Transfer LP jr. unsec. sub. FRN 6.625%, perpetual maturity   2,076,000 1,733,834
Energy Transfer LP sr. unsec. unsub. notes 7.60%, 2/1/24   470,000 478,247
Energy Transfer LP sr. unsec. unsub. notes 6.50%, 2/1/42   137,000 144,511
Enterprise Products Operating, LLC company guaranty sr. unsec. notes 2.80%, 1/31/30   1,704,000 1,510,303
Enterprise Products Operating, LLC company guaranty sr. unsec. unsub. bonds 4.25%, 2/15/48   560,000 483,630
IPALCO Enterprises, Inc. sr. notes 4.25%, 5/1/30   813,000 751,786
IPALCO Enterprises, Inc. sr. sub. notes 3.70%, 9/1/24   340,000 330,866
Kinder Morgan Energy Partners LP company guaranty sr. unsec. notes 5.40%, 9/1/44   199,000 190,008
Kinder Morgan, Inc. company guaranty sr. unsec. unsub. bonds 5.20%, 6/1/33   215,000 214,244
NRG Energy, Inc. 144A company guaranty sr. notes 3.75%, 6/15/24   620,000 600,365
NRG Energy, Inc. 144A sr. notes 2.45%, 12/2/27   900,000 772,673
Oncor Electric Delivery Co., LLC sr. notes 5.75%, 3/15/29   445,000 471,879
Pacific Gas and Electric Co. notes 2.10%, 8/1/27   235,000 206,178
Pacific Gas and Electric Co. sr. bonds 5.90%, 6/15/32   536,000 539,023
Pacific Gas and Electric Co. sr. bonds 4.95%, 7/1/50   565,000 471,696
Pacific Gas and Electric Co. sr. notes 3.30%, 12/1/27   1,050,000 959,411
PacifiCorp sr. bonds 2.70%, 9/15/30   656,000 583,100
Vistra Operations Co., LLC 144A company guaranty sr. notes 4.30%, 7/15/29   442,000 408,603
Vistra Operations Co., LLC 144A company guaranty sr. notes 3.55%, 7/15/24   523,000 505,511
WEC Energy Group, Inc. jr. unsec. sub. FRN Ser. A, (ICE LIBOR USD 3 Month + 2.11%), 6.719%, 5/15/67   1,945,000 1,654,417
18,120,185
Total corporate bonds and notes (cost $257,354,784) $236,452,986


34 George Putnam Balanced Fund



MORTGAGE-BACKED SECURITIES (0.8%)* Principal
amount		 Value
Citigroup Commercial Mortgage Trust      
Ser. 14-GC21, Class C, 4.78%, 5/10/47 W   $508,000 $483,154
Ser. 18-B2, Class A4, 4.009%, 3/10/51   1,749,000 1,681,912
COMM Mortgage Trust      
FRB Ser. 12-LC4, Class C, 5.298%, 12/10/44 W   241,000 238,349
FRB Ser. 14-CR18, Class C, 4.747%, 7/15/47 W   2,392,000 2,258,168
CSAIL Commercial Mortgage Trust Ser. 19-C17, Class AS, 3.278%, 9/15/52   1,066,000 923,571
Eagle Re, Ltd. 144A FRB Ser. 18-1, Class M1, (ICE LIBOR USD 1 Month + 1.70%), 6.206%, 11/25/28 (Bermuda)   261,538 260,712
Federal National Mortgage Association      
Connecticut Avenue Securities FRB Ser. 16-C01, Class 1M2, (ICE LIBOR USD 1 Month + 6.75%), 11.256%, 8/25/28   246,563 262,031
Connecticut Avenue Securities FRB Ser. 17-C01, Class 1EB1, (ICE LIBOR USD 1 Month + 1.25%), 5.756%, 7/25/29   60,142 59,926
REMICs Ser. 01-79, Class BI, IO, 0.247%, 3/25/45 W   276,895 1,717
FIRSTPLUS Home Loan Owner Trust Ser. 97-3, Class B1, 7.79%, 11/10/23 (In default) †   194,241 19
JPMorgan Chase Commercial Mortgage Securities Trust FRB Ser. 12-C6, Class D, 4.964%, 5/15/45 W   714,640 703,135
Morgan Stanley Bank of America Merrill Lynch Trust Ser. 16-C28, Class A4, 3.544%, 1/15/49   3,360,000 3,188,637
Morgan Stanley Capital I Trust Ser. 18-L1, Class A4, 4.407%, 10/15/51 W   2,264,000 2,200,647
Morgan Stanley Capital I Trust 144A FRB Ser. 12-C4, Class D, 5.164%, 3/15/45 W   539,102 498,669
TIAA Real Estate CDO, Ltd. 144A Ser. 03-1A, Class E, 8.00%, 12/28/38 (In default) †   2,032,334 20
Total mortgage-backed securities (cost $15,162,374) $12,760,667

MUNICIPAL BONDS AND NOTES (0.1%)* Principal
amount		 Value
CA State G.O. Bonds, (Build America Bonds), 7.50%, 4/1/34   $215,000 $271,563
North TX, Tollway Auth. Rev. Bonds, (Build America Bonds), 6.718%, 1/1/49   350,000 448,967
OH State U. Rev. Bonds, (Build America Bonds), 4.91%, 6/1/40   275,000 285,030
Total municipal bonds and notes (cost $841,039) $1,005,560

SHORT-TERM INVESTMENTS (3.1%)* Shares Value
Putnam Cash Collateral Pool, LLC 4.60% d 12,148,151 $12,148,151
Putnam Short Term Investment Fund Class P 4.58% L 39,481,539 39,481,539
State Street Institutional U.S. Government Money Market Fund, Premier Class 4.18% P 131,000 131,000
Total short-term investments (cost $51,760,690) $51,760,690

TOTAL INVESTMENTS
Total investments (cost $1,490,552,199) $1,661,223,593


George Putnam Balanced Fund 35



Key to holding’s abbreviations
ADR American Depository Receipts: Represents ownership of foreign securities on deposit with a custodian bank.
BKNT Bank Note
DAC Designated Activity Company
FRB Floating Rate Bonds: The rate shown is the current interest rate at the close of the reporting period. Rates may be subject to a cap or floor. For certain securities, the rate may represent a fixed rate currently in place at the close of the reporting period.
FRN Floating Rate Notes: The rate shown is the current interest rate or yield at the close of the reporting period. Rates may be subject to a cap or floor. For certain securities, the rate may represent a fixed rate currently in place at the close of the reporting period.
GMTN Global Medium Term Notes
G.O. Bonds General Obligation Bonds
ICE Intercontinental Exchange
IO Interest Only
LIBOR London Interbank Offered Rate
MTN Medium Term Notes
REMICs Real Estate Mortgage Investment Conduits
TBA To Be Announced Commitments
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 August 1, 2022 through January 31, 2023 (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 $1,646,414,466.
† This security is non-income-producing.
# This security, in part or in entirety, was pledged and segregated with the broker to cover margin requirements for futures contracts at the close of the reporting period. Collateral at period end totaled $914,703 and is included in Investments in securities on the Statement of assets and liabilities (Notes 1 and 8).
∆ This security, in part or in entirety, was pledged and segregated with the custodian for collateral on certain derivative contracts at the close of the reporting period. Collateral at period end totaled $656,087 and is included in Investments in securities on the Statement of assets and liabilities (Notes 1 and 8).
d Affiliated company. See Notes 1 and 5 to the financial statements regarding securities lending. The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period.
L Affiliated company (Note 5). The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period.
P This security was pledged, or purchased with cash that was pledged, to the fund for collateral on certain derivative contracts and TBA commitments. The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period.
R Real Estate Investment Trust.
S Security on loan, in part or in entirety, at the close of the reporting period (Note 1).
W The rate shown represents the weighted average coupon associated with the underlying mortgage pools. Rates may be subject to a cap or floor.
Unless otherwise noted, the rates quoted in Short-term investments security descriptions represent the weighted average yield to maturity.
Debt obligations are considered secured unless otherwise indicated.


36 George Putnam Balanced Fund



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.
See Note 1 to the financial statements regarding TBA commitments.
The dates shown on debt obligations are the original maturity dates.

FORWARD CURRENCY CONTRACTS at 1/31/23 (aggregate face value $69,400,468) (Unaudited)
Counterparty Currency Contract
type*		 Delivery
date		 Value Aggregate
face value		 Unrealized
appreciation/
(depreciation)
Bank of America N.A.
Canadian Dollar Sell 4/19/23 $3,076,369 $3,023,973 $(52,396)
Barclays Bank PLC
British Pound Sell 3/15/23 7,624,944 7,557,069 (67,875)
Canadian Dollar Sell 4/19/23 1,948,609 1,915,803 (32,806)
Euro Sell 3/15/23 3,782,007 3,668,920 (113,087)
Citibank, N.A.
Canadian Dollar Sell 4/19/23 5,792,508 5,694,311 (98,197)
Goldman Sachs International
Canadian Dollar Sell 4/19/23 3,082,384 3,029,795 (52,589)
Euro Sell 3/15/23 3,936,680 3,817,895 (118,785)
HSBC Bank USA, National Association
Danish Krone Sell 3/15/23 2,790,937 2,672,665 (118,272)
Hong Kong Dollar Buy 2/15/23 2,586,100 2,587,712 (1,612)
Hong Kong Dollar Sell 2/15/23 2,586,100 2,603,573 17,473
Hong Kong Dollar Sell 5/17/23 2,594,103 2,595,890 1,787
JPMorgan Chase Bank N.A.
Singapore Dollar Buy 2/15/23 2,409,062 2,406,479 2,583
Singapore Dollar Sell 2/15/23 2,409,062 2,243,789 (165,273)
Singapore Dollar Sell 5/17/23 2,414,304 2,411,605 (2,699)
Morgan Stanley & Co. International PLC
Canadian Dollar Sell 4/19/23 3,083,512 3,030,446 (53,066)
State Street Bank and Trust Co.
Canadian Dollar Sell 4/19/23 129,727 127,510 (2,217)
Hong Kong Dollar Buy 2/15/23 2,458,165 2,459,817 (1,652)
Hong Kong Dollar Sell 2/15/23 2,458,165 2,456,195 (1,970)
Hong Kong Dollar Sell 5/17/23 2,465,772 2,467,099 1,327
Toronto-Dominion Bank
British Pound Sell 3/15/23 2,515,447 2,465,013 (50,434)
UBS AG
Canadian Dollar Sell 4/19/23 2,987,251 2,936,432 (50,819)
Euro Sell 3/15/23 1,874,163 1,818,128 (56,035)
WestPac Banking Corp.
British Pound Sell 3/15/23 5,457,970 5,410,349 (47,621)
Unrealized appreciation 23,170
Unrealized (depreciation) (1,087,405)
Total $(1,064,235)
* The exchange currency for all contracts listed is the United States Dollar.


George Putnam Balanced Fund 37



FUTURES CONTRACTS OUTSTANDING at 1/31/23 (Unaudited)
Number of
contracts		 Notional
amount		 Value Expiration
date		 Unrealized
appreciation/
(depreciation)
S&P 500 Index E-Mini (Long) 58 $11,822,140 $11,861,000 Mar-23 $572,252
Unrealized appreciation 572,252
Unrealized (depreciation) —
Total $572,252

ASC 820 establishes a three-level hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of the fund’s investments. The three levels are defined as follows:

Level 1: Valuations based on quoted prices for identical securities in active markets.

Level 2: Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3: Valuations based on inputs that are unobservable and significant to the fair value measurement.

The following is a summary of the inputs used to value the fund’s net assets as of the close of the reporting period:

Valuation inputs
Investments in securities: Level 1 Level 2 Level 3
Common stocks*:
Basic materials $37,081,720 $— $—
Capital goods 57,056,986 — —
Communication services 19,801,867 — —
Conglomerates 1,592,941 — —
Consumer cyclicals 171,259,589 2,300,883 —
Consumer staples 69,932,615 — —
Energy 54,736,582 6,460,690 —
Financials 101,434,510 21,895,034 —
Health care 154,805,844 — —
Technology 258,629,245 — —
Transportation 25,082,548 — —
Utilities and power 32,046,021 — —
Total common stocks 983,460,468 30,656,607 —
Corporate bonds and notes — 236,452,986 —
Mortgage-backed securities — 12,760,667 —
Municipal bonds and notes — 1,005,560 —
U.S. government and agency mortgage obligations — 134,144,511 —
U.S. treasury obligations — 210,982,104 —
Short-term investments 131,000 51,629,690 —
Totals by level $983,591,468 $677,632,125 $—
Valuation inputs
Other financial instruments: Level 1 Level 2 Level 3
Forward currency contracts $— $(1,064,235) $—
Futures contracts 572,252 — —
Totals by level $572,252 $(1,064,235) $—
* Common stock classifications are presented at the sector level, which may differ from the fund’s portfolio presentation.


The accompanying notes are an integral part of these financial statements.


38 George Putnam Balanced Fund


Statement of assets and liabilities 1/31/23 (Unaudited)

ASSETS   
Investment in securities, at value, including $12,230,515 of securities on loan (Notes 1 and 8):   
Unaffiliated issuers (identified cost $1,438,922,509)  $1,609,593,903 
Affiliated issuers (identified cost $51,629,690) (Notes 1 and 5)  51,629,690 
Cash  25,404 
Foreign currency (cost $458) (Note 1)  460 
Dividends, interest and other receivables  5,658,997 
Receivable for shares of the fund sold  1,492,326 
Receivable for investments sold  6,360,197 
Receivable for variation margin on futures contracts (Note 1)  166,750 
Unrealized appreciation on forward currency contracts (Note 1)  23,170 
Prepaid assets  81,840 
Total assets  1,675,032,737 
 
LIABILITIES   
Payable for investments purchased  4,823,071 
Payable for purchases of TBA securities (Note 1)  7,418,935 
Payable for shares of the fund repurchased  1,004,784 
Payable for compensation of Manager (Note 2)  716,432 
Payable for custodian fees (Note 2)  16,323 
Payable for investor servicing fees (Note 2)  356,786 
Payable for Trustee compensation and expenses (Note 2)  381,549 
Payable for administrative services (Note 2)  3,113 
Payable for distribution fees (Note 2)  365,707 
Collateral on certain derivative contracts and TBA commitments, at value (Notes 1 and 8)  131,000 
Collateral on securities loaned, at value (Note 1)  12,148,151 
Unrealized depreciation on forward currency contracts (Note 1)  1,087,405 
Other accrued expenses  165,015 
Total liabilities  28,618,271 
 
Net assets  $1,646,414,466 
 
REPRESENTED BY   
Paid-in capital (Unlimited shares authorized) (Notes 1 and 4)  $1,524,149,950 
Total distributable earnings (Note 1)  122,264,516 
Total — Representing net assets applicable to capital shares outstanding  $1,646,414,466 

 

(Continued on next page)

George Putnam Balanced Fund 39 

 


Statement of assets and liabilities cont.

COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE   
Net asset value and redemption price per class A share   
($1,171,252,953 divided by 57,559,297 shares)  $20.35 
Offering price per class A share (100/94.25 of $20.35)*  $21.59 
Net asset value and offering price per class B share ($5,152,527 divided by 257,386 shares)**  $20.02 
Net asset value and offering price per class C share ($102,648,562 divided by 5,111,066 shares)**  $20.08 
Net asset value and redemption price per class M share   
($49,158,251 divided by 2,461,663 shares)  $19.97 
Offering price per class M share (100/96.50 of $19.97)*  $20.69 
Net asset value, offering price and redemption price per class R share   
($1,127,088 divided by 55,644 shares)  $20.26 
Net asset value, offering price and redemption price per class R5 share   
($10,028 divided by 485 shares)†  $20.66 
Net asset value, offering price and redemption price per class R6 share   
($77,223,533 divided by 3,773,873 shares)  $20.46 
Net asset value, offering price and redemption price per class Y share   
($239,841,524 divided by 11,724,983 shares)  $20.46 

 

*On single retail sales of less than $50,000. On sales of $50,000 or more the offering price is reduced.

**Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.

†Net asset value may not recalculate due to rounding of fractional shares.

The accompanying notes are an integral part of these financial statements.

40 George Putnam Balanced Fund 

 


Statement of operations Six months ended 1/31/23 (Unaudited)

INVESTMENT INCOME   
Interest (including interest income of $868,716 from investments in affiliated issuers) (Note 5)  $9,804,504 
Dividends (net of foreign tax of $40,766)  7,094,803 
Securities lending (net of expenses) (Notes 1 and 5)  25,070 
Total investment income  16,924,377 
 
EXPENSES   
Compensation of Manager (Note 2)  4,247,656 
Investor servicing fees (Note 2)  1,083,046 
Custodian fees (Note 2)  27,126 
Trustee compensation and expenses (Note 2)  35,819 
Distribution fees (Note 2)  2,196,458 
Administrative services (Note 2)  35,461 
Other  296,585 
Total expenses  7,922,151 
Expense reduction (Note 2)  (8,342) 
Net expenses  7,913,809 
 
Net investment income  9,010,568 
 
REALIZED AND UNREALIZED GAIN (LOSS)   
Net realized gain (loss) on:   
Securities from unaffiliated issuers (Notes 1 and 3)  (44,366,549) 
Futures contracts (Note 1)  (2,477,812) 
Foreign currency transactions (Note 1)  5,355 
Forward currency contracts (Note 1)  2,383,404 
Total net realized loss  (44,455,602) 
Change in net unrealized appreciation (depreciation) on:   
Securities from unaffiliated issuers and TBA sale commitments  20,983,899 
Assets and liabilities in foreign currencies  (284) 
Forward currency contracts  (2,054,676) 
Futures contracts  572,252 
Total change in net unrealized appreciation  19,501,191 
 
Net loss on investments  (24,954,411) 
 
Net decrease in net assets resulting from operations  $(15,943,843) 

 

The accompanying notes are an integral part of these financial statements.

George Putnam Balanced Fund 41 

 


Statement of changes in net assets

DECREASE IN NET ASSETS  Six months ended 1/31/23*  Year ended 7/31/22 
Operations     
Net investment income  $9,010,568  $13,279,901 
Net realized gain (loss) on investments     
and foreign currency transactions  (44,455,602)  47,924,842 
Change in net unrealized appreciation (depreciation)     
of investments and assets and liabilities     
in foreign currencies  19,501,191  (217,029,051) 
Net decrease in net assets resulting from operations  (15,943,843)  (155,824,308) 
Distributions to shareholders (Note 1):     
From ordinary income     
Net investment income     
Class A  (5,523,652)  (11,663,665) 
Class B  (4,176)  (24,276) 
Class C  (100,160)  (300,958) 
Class M  (111,352)  (217,558) 
Class R  (4,231)  (12,163) 
Class R5  (54)  (228) 
Class R6  (429,094)  (847,822) 
Class Y  (1,428,776)  (3,249,483) 
Net realized short-term gain on investments     
Class A  —  (31,186,072) 
Class B  —  (249,011) 
Class C  —  (3,025,106) 
Class M  —  (1,358,147) 
Class R  —  (46,557) 
Class R5  —  (479) 
Class R6  —  (1,673,574) 
Class Y  —  (6,877,015) 
From net realized long-term gain on investments     
Class A  (22,865,402)  (60,809,448) 
Class B  (111,368)  (485,545) 
Class C  (2,094,991)  (5,898,628) 
Class M  (964,956)  (2,648,238) 
Class R  (21,846)  (90,782) 
Class R5  (190)  (934) 
Class R6  (1,360,881)  (3,263,286) 
Class Y  (4,635,978)  (13,409,433) 
Increase (decrease) from capital share transactions (Note 4)  (20,403,993)  84,980,267 
Total decrease in net assets  (76,004,943)  (218,182,449) 
 
NET ASSETS     
Beginning of period  1,722,419,409  1,940,601,858 
End of period  $1,646,414,466  $1,722,419,409 

 

*Unaudited.

The accompanying notes are an integral part of these financial statements.

42 George Putnam Balanced Fund 

 


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George Putnam Balanced Fund 43 

 


Financial highlights
(For a common share outstanding throughout the period)

  INVESTMENT OPERATIONS  LESS DISTRIBUTIONS  RATIOS AND SUPPLEMENTAL DATA 
                        Ratio of net   
  Net asset    Net realized                Ratio  investment   
  value,    and unrealized  Total from  From net  From    Net asset  Total return  Net assets,  of expenses  income (loss)  Portfolio 
  beginning  Net investment  gain (loss)  investment  investment  net realized gain  Total  value, end  at net asset  end of period  to average  to average  turnover 
Period ended­  of period­  income (loss)a  on investments­  operations­  income­  on investments­  distributions  of period­  value (%)b  (in thousands)  net assets (%)c  net assets (%)  (%)d 
Class A­                           
January 31, 2023**  $21.02­  .11­  (.28)  (.17)  (.10)  (.40)  (.50)  $20.35­  (.76)*  $1,171,253­  .48*  .56*  25* 
July 31, 2022­  24.62­  .17­  (1.93)  (1.76)  (.20)  (1.64)  (1.84)  21.02­  (7.87)  1,225,429­  .94­  .73­  66­ 
July 31, 2021  21.68­  .16­  4.19­  4.35­  (.16)  (1.25)  (1.41)  24.62­  20.84­  1,383,459­  .94­  .68­  93­ 
July 31, 2020  20.63­  .25­  2.13­  2.38­  (.52)  (.81)  (1.33)  21.68­  12.04­  1,147,249­  .97­  1.23­  97­ 
July 31, 2019  20.62­  .28­  1.37­  1.65­  (.28)  (1.36)  (1.64)  20.63­  8.86­  1,041,441­  .98­  1.44­  143­ 
July 31, 2018  19.09­  .23­  1.53­  1.76­  (.23)  —­  (.23)  20.62­  9.28­  1,004,781­  .99­  1.18­  179­ 
Class B                           
January 31, 2023**   $20.68­  .04­  (.28)  (.24)  (.02)  (.40)  (.42)  $20.02­  (1.13)*  $5,153­  .86*  .19*  25* 
July 31, 2022­  24.27­  (.01)  (1.89)  (1.90)  (.05)  (1.64)  (1.69)  20.68­  (8.56)  7,078­  1.69­  (.04)  66­ 
July 31, 2021  21.41­  (.01)  4.12­  4.11­  —­f  (1.25)  (1.25)  24.27­  19.89­  11,732­  1.69­  (.06)  93­ 
July 31, 2020  20.38­  .10­  2.11­  2.21­  (.37)  (.81)  (1.18)  21.41­  11.23­  13,533­  1.72­  .49­  97­ 
July 31, 2019  20.39­  .14­  1.34­  1.48­  (.13)  (1.36)  (1.49)  20.38­  8.02­  14,844­  1.73­  .70­  143­ 
July 31, 2018  18.87­  .08­  1.52­  1.60­  (.08)  —­  (.08)  20.39­  8.49­  17,258­  1.74­  .43­  179­ 
Class C                           
January 31, 2023**   $20.75­  .04­  (.29)  (.25)  (.02)  (.40)  (.42)  $20.08­  (1.15)*  $102,649­  .86*  .19*  25* 
July 31, 2022­  24.35­  (.01)  (1.89)  (1.90)  (.06)  (1.64)  (1.70)  20.75­  (8.57)  115,907­  1.69­  (.02)  66­ 
July 31, 2021  21.48­  (.02)  4.15­  4.13­  (.01)  (1.25)  (1.26)  24.35­  19.90­  128,300­  1.69­  (.07)  93­ 
July 31, 2020  20.46­  .09­  2.12­  2.21­  (.38)  (.81)  (1.19)  21.48­  11.20­  86,199­  1.72­  .47­  97­ 
July 31, 2019  20.47­  .13­  1.36­  1.49­  (.14)  (1.36)  (1.50)  20.46­  8.06­  61,417­  1.73­  .68­  143­ 
July 31, 2018  18.95­  .08­  1.52­  1.60­  (.08)  —­  (.08)  20.47­  8.45­  40,002­  1.74­  .43­  179­ 
Class M                           
January 31, 2023**   $20.63­  .06­  (.27)  (.21)  (.05)  (.40)  (.45)  $19.97­  (.98)*  $49,158­  .73*  .31*  25* 
July 31, 2022­  24.20­  .05­  (1.89)  (1.84)  (.09)  (1.64)  (1.73)  20.63­  (8.36)  50,466­  1.44­  .22­  66­ 
July 31, 2021  21.34­  .04­  4.12­  4.16­  (.05)  (1.25)  (1.30)  24.20­  20.20­  59,887­  1.44­  .19­  93­ 
July 31, 2020  20.32­  .15­  2.09­  2.24­  (.41)  (.81)  (1.22)  21.34­  11.46­  54,871­  1.47­  .75­  97­ 
July 31, 2019  20.33­  .18­  1.35­  1.53­  (.18)  (1.36)  (1.54)  20.32­  8.34­  65,488­  1.48­  .94­  143­ 
July 31, 2018  18.82­  .13­  1.52­  1.65­  (.14)  —­  (.14)  20.33­  8.77­  70,239­  1.49­  .68­  179­ 
Class R                           
January 31, 2023**   $20.92­  .09­  (.29)  (.20)  (.06)  (.40)  (.46)  $20.26­  (.87)*  $1,127­  .61*  .44*  25* 
July 31, 2022­  24.51­  .11­  (1.92)  (1.81)  (.14)  (1.64)  (1.78)  20.92­  (8.10)  1,795­  1.19­  .47­  66­ 
July 31, 2021  21.60­  .10­  4.16­  4.26­  (.10)  (1.25)  (1.35)  24.51­  20.50­  2,001­  1.19­  .43­  93­ 
July 31, 2020  20.56­  .20­  2.12­  2.32­  (.47)  (.81)  (1.28)  21.60­  11.76­  1,113­  1.22­  .98­  97­ 
July 31, 2019  20.56­  .23­  1.36­  1.59­  (.23)  (1.36)  (1.59)  20.56­  8.58­  999­  1.23­  1.19­  143­ 
July 31, 2018  19.03­  .18­  1.53­  1.71­  (.18)  —­  (.18)  20.56­  9.02­  838­  1.24­  .93­  179­ 

 

See notes to financial highlights at the end of this section.

The accompanying notes are an integral part of these financial statements.

44 George Putnam Balanced Fund  George Putnam Balanced Fund 45 

 


Financial highlights cont.

  INVESTMENT OPERATIONS  LESS DISTRIBUTIONS  RATIOS AND SUPPLEMENTAL DATA 
                        Ratio of net   
  Net asset    Net realized                Ratio  investment   
  value,    and unrealized  Total from  From net  From    Net asset  Total return  Net assets,  of expenses  income (loss)  Portfolio 
  beginning  Net investment  gain (loss)  investment  investment  net realized gain  Total  value, end  at net asset  end of period  to average  to average  turnover 
Period ended­  of period­  income (loss)a  on investments­  operations­  income­  on investments­  distributions  of period­  value (%)b  (in thousands)  net assets (%)c  net assets (%)  (%)d 
Class R5                           
January 31, 2023**   $21.31­  .10­  (.24)  (.14)  (.11)  (.40)  (.51)  $20.66­  (.57)*  $10­  .36*  .49*  25* 
July 31, 2022­  24.94­  .20­  (1.93)  (1.73)  (.26)  (1.64)  (1.90)  21.31­  (7.68)  20­  .71­  .86­  66­ 
July 31, 2021  21.89­  .21­  4.24­  4.45­  (.15)  (1.25)  (1.40)  24.94­  21.11­  21­  .71­  .92­  93­ 
July 31, 2020  20.82­  .29­  2.17­  2.46­  (.58)  (.81)  (1.39)  21.89­  12.33­  223­  .72­  1.41­  97­ 
July 31, 2019  20.79­  .32­  1.40­  1.72­  (.33)  (1.36)  (1.69)  20.82­  9.17­  16­  .72­  1.56­  143­ 
July 31, 2018  19.24­  .27­e  1.56­  1.83­  (.28)  —­  (.28)  20.79­  9.60­  14­  .73­  1.30­e  179­ 
Class R6                           
January 31, 2023**   $21.13­  .15­  (.29)  (.14)  (.13)  (.40)  (.53)  $20.46­  (.59)*  $77,224­  .31*  .74*  25* 
July 31, 2022­  24.75­  .24­  (1.94)  (1.70)  (.28)  (1.64)  (1.92)  21.13­  (7.60)  65,091­  .61­  1.05­  66­ 
July 31, 2021  21.79­  .23­  4.21­  4.44­  (.23)  (1.25)  (1.48)  24.75­  21.22­  69,239­  .61­  1.01­  93­ 
July 31, 2020  20.73­  .32­  2.15­  2.47­  (.60)  (.81)  (1.41)  21.79­  12.42­  46,529­  .62­  1.56­  97­ 
July 31, 2019  20.71­  .36­  1.37­  1.73­  (.35)  (1.36)  (1.71)  20.73­  9.27­  29,859­  .62­  1.80­  143­ 
July 31, 2018  19.17­  .31­  1.53­  1.84­  (.30)  —­  (.30)  20.71­  9.69­  19,694­  .63­  1.54­  179­ 
Class Y                           
January 31, 2023**   $21.12­  .14­  (.28)  (.14)  (.12)  (.40)  (.52)  $20.46­  (.59)*  $239,842­  .36*  .69*  25* 
July 31, 2022­  24.74­  .22­  (1.94)  (1.72)  (.26)  (1.64)  (1.90)  21.12­  (7.68)  256,633­  .69­  .97­  66­ 
July 31, 2021  21.78­  .21­  4.21­  4.42­  (.21)  (1.25)  (1.46)  24.74­  21.13­  285,962­  .69­  .93­  93­ 
July 31, 2020  20.72­  .30­  2.15­  2.45­  (.58)  (.81)  (1.39)  21.78­  12.32­  192,044­  .72­  1.45­  97­ 
July 31, 2019  20.70­  .33­  1.38­  1.71­  (.33)  (1.36)  (1.69)  20.72­  9.15­  104,828­  .73­  1.68­  143­ 
July 31, 2018  19.16­  .28­  1.54­  1.82­  (.28)  —­  (.28)  20.70­  9.56­  81,989­  .74­  1.43­  179­ 

 

* Not annualized.

** Unaudited.

a Per share net investment income (loss) has been determined on the basis of the weighted average number of shares outstanding during the period.

b Total return assumes dividend reinvestment and does not reflect the effect of sales charges.

c Includes amounts paid through expense offset and/or brokerage/service arrangements, if any (Note 2). Also excludes acquired fund fees and expenses, if any.

d Portfolio turnover includes TBA purchase and sales transactions.

e The net investment income ratio and per share amount shown for the period ended may not correspond with the expected class specific differences for the period due to the timing of redemptions out of the class.

f Amount represents less than $0.01 per share.

The accompanying notes are an integral part of these financial statements.

46 George Putnam Balanced Fund  George Putnam Balanced Fund 47 

 


Notes to financial statements 1/31/23 (Unaudited)

Within the following Notes to financial statements, references to “State Street” represent State Street Bank and Trust Company, references to “the SEC” represent the Securities and Exchange Commission, 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 “OTC”, if any, represent over-the-counter. Unless otherwise noted, the “reporting period” represents the period from August 1, 2022 through January 31, 2023.

George Putnam Balanced Fund (the fund) is a Massachusetts business trust, which is registered under the Investment Company Act of 1940, as amended, as a diversified open-end management investment company. The goal of the fund is to seek to provide a balanced investment composed of a well-diversified portfolio of stocks and bonds which produce both capital growth and current income. The fund invests mainly in a combination of bonds and common stocks (growth or value stocks or both) of large U.S. companies, with a greater focus on common stocks. For example, Putnam Management may purchase stocks of companies with stock prices that reflect a value lower than that which Putnam Management places on the company. Putnam Management may also consider other factors that Putnam Management believes will cause the stock price to rise. The fund buys bonds of governments and private companies that are mostly investment-grade in quality with intermediate- to long-term maturities (three years or longer). Putnam Management may consider, among other factors, a company’s valuation, financial strength, growth potential, competitive position in its industry, projected future earnings, cash flows and dividends when deciding whether to buy or sell equity investments, and, among other factors, credit, interest rate and prepayment risks, as well as general market conditions, when deciding whether to buy or sell fixed-income investments. The fund may also use derivatives, such as futures, options, warrants and swap contracts, for both hedging and non-hedging purposes.

The fund offers the following share classes. The expenses for each class of shares may differ based on the distribution and investor servicing fees of each class, which are identified in Note 2.

Share class  Sales charge  Contingent deferred sales charge  Conversion feature 
    1.00% on certain redemptions of shares   
Class A  Up to 5.75%  bought with no initial sales charge  None 
      Converts to class A shares 
Class B*  None  5.00% phased out over six years  after 8 years 
      Converts to class A shares 
Class C  None  1.00% eliminated after one year  after 8 years 
Class M†  Up to 3.50%  None  None 
Class R†  None  None  None 
Class R5†  None  None  None 
Class R6†  None  None  None 
Class Y†  None  None  None 

 

* Purchases of class B shares are closed to new and existing investors except by exchange from class B shares of another Putnam fund or through dividend and/or capital gains reinvestment.

† Not available to all investors.

In the normal course of business, the fund enters into contracts that may include agreements to indemnify another party under given circumstances. The fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be, but have not yet been, made against the fund. However, the fund’s management team expects the risk of material loss to be remote.

The fund has entered into contractual arrangements with an investment adviser, administrator, distributor, shareholder servicing agent and custodian, who each provide services to the fund. Unless expressly stated otherwise, shareholders are not parties to, or intended beneficiaries of these contractual arrangements, and these contractual arrangements are not intended to create any shareholder right to enforce them against the service providers or to seek any remedy under them against the service providers, either directly or on behalf of the fund.

Under the fund’s Amended and Restated Agreement and Declaration of Trust, any claims asserted against or on behalf of the Putnam Funds, including claims against Trustees and Officers, must be brought in state and federal courts located within the Commonwealth of Massachusetts.

48 George Putnam Balanced Fund 

 


Note 1: Significant accounting policies

The following is a summary of significant accounting policies consistently followed by the fund in the preparation of its financial statements. The preparation of financial statements is in conformity with accounting principles generally accepted in the United States of America and requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and the reported amounts of increases and decreases in net assets from operations. Actual results could differ from those estimates. Subsequent events after the Statement of assets and liabilities date through the date that the financial statements were issued have been evaluated in the preparation of the financial statements.

Investment income, realized and unrealized gains and losses and expenses of the fund are borne pro-rata based on the relative net assets of each class to the total net assets of the fund, except that each class bears expenses unique to that class (including the distribution fees applicable to such classes). Each class votes as a class only with respect to its own distribution plan or other matters on which a class vote is required by law or determined by the Trustees. If the fund were liquidated, shares of each class would receive their pro-rata share of the net assets of the fund. In addition, the Trustees declare separate dividends on each class of shares.

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 Accounting Standards Codification 820 Fair Value Measurements and Disclosures (ASC 820). If no sales are reported, as in the case of some securities that are traded OTC, a security is valued at its last reported bid price and is generally categorized as a Level 2 security.

Investments in open-end investment companies (excluding exchange-traded funds), if any, which can be classified as Level 1 or Level 2 securities, are valued based on their net asset value. The net asset value of such investment companies equals the total value of their assets less their liabilities and divided by the number of their outstanding shares.

Market quotations are not considered to be readily available for certain debt obligations (including short-term investments with remaining maturities of 60 days or less) and other investments; such investments are valued on the basis of valuations furnished by an independent pricing service approved by the Trustees or dealers selected by Putnam Management. Such services or dealers determine valuations for normal institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships, generally recognized by institutional traders, between securities (which consider such factors as security prices, yields, maturities and ratings). These securities will generally be categorized as Level 2.

Many securities markets and exchanges outside the U.S. close prior to the scheduled close of the New York Stock Exchange and therefore the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but before the scheduled close of the New York Stock Exchange. Accordingly, on certain days, the fund will fair value certain foreign equity securities taking into account multiple factors including movements in the U.S. securities markets, currency valuations and comparisons to the valuation of American Depository Receipts, exchange-traded funds and futures contracts. The foreign equity securities, which would generally be classified as Level 1 securities, will be transferred to Level 2 of the fair value hierarchy when they are valued at fair value. The number of days on which fair value prices will be used will depend on market activity and it is possible that fair value prices will be used by the fund to a significant extent. At the close of the reporting period, fair value pricing was used for certain foreign securities in the portfolio. Securities quoted in foreign currencies, if any, are translated into U.S. dollars at the current exchange rate.

To the extent a pricing service or dealer is unable to value a security or provides a valuation that Putnam Management does not believe accurately reflects the security’s fair value, the security will be valued at fair value by Putnam Management in accordance with policies and procedures approved by the Trustees. Certain investments, including certain restricted and illiquid securities and derivatives, are also valued at fair value following procedures approved by the Trustees. These valuations consider such factors as significant market or specific security events such as interest rate or credit quality changes, various relationships with other securities, discount rates, U.S. Treasury, U.S. swap and credit yields, index levels, convexity exposures, recovery rates, sales and other

George Putnam Balanced Fund 49 

 


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. Certain securities may be valued on the basis of a price provided by a single source. 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.

Security transactions and related investment income Security transactions are recorded on the trade date (the date the order to buy or sell is executed). Gains or losses on securities sold are determined on the identified cost basis.

Interest income, net of any applicable withholding taxes, if any, is recorded on the accrual basis. Amortization and accretion of premiums and discounts on debt securities, if any, is recorded on the accrual basis. Dividend income, net of any applicable withholding taxes, is recognized on the ex-dividend date except that certain dividends from foreign securities, if any, are recognized as soon as the fund is informed of the ex-dividend date. Non-cash dividends, if any, are recorded at the fair value of the securities received. Dividends representing a return of capital or capital gains, if any, are reflected as a reduction of cost and/or as a realized gain.

Securities purchased or sold on a delayed delivery basis may be settled at a future date beyond customary settlement time; interest income is accrued based on the terms of the securities. Losses may arise due to changes in the fair value of the underlying securities or if the counterparty does not perform under the contract.

Stripped securities The fund may invest in stripped securities which represent a participation in securities that may be structured in classes with rights to receive different portions of the interest and principal. Interest-only securities receive all of the interest and principal-only securities receive all of the principal. If the interest-only securities experience greater than anticipated prepayments of principal, the fund may fail to recoup fully its initial investment in these securities. Conversely, principal-only securities increase in value if prepayments are greater than anticipated and decline if prepayments are slower than anticipated. The fair value of these securities is highly sensitive to changes in interest rates.

Foreign currency translation The accounting records of the fund are maintained in U.S. dollars. The fair value of foreign securities, currency holdings, and other assets and liabilities is recorded in the books and records of the fund after translation to U.S. dollars based on the exchange rates on that day. The cost of each security is determined using historical exchange rates. Income and withholding taxes are translated at prevailing exchange rates when earned or incurred. The fund does not isolate that portion of realized or unrealized gains or losses resulting from changes in the foreign exchange rate on investments from fluctuations arising from changes in the market prices of the securities. Such gains and losses are included with the net realized and unrealized gain or loss on investments. Net realized gains and losses on foreign currency transactions represent net realized exchange gains or losses on disposition of foreign currencies, currency gains and losses realized between the trade and settlement dates on securities transactions and the difference between the amount of investment income and foreign withholding taxes recorded on the fund’s books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized appreciation and depreciation of assets and liabilities in foreign currencies arise from changes in the value of assets and liabilities other than investments at the period end, resulting from changes in the exchange rate.

Futures contracts The fund uses futures contracts to equitize cash.

The potential risk to the fund is that the change in value of futures contracts may not correspond to the change in value of the hedged instruments. In addition, losses may arise from changes in the value of the underlying instruments, if there is an illiquid secondary market for the contracts, if interest or exchange rates move unexpectedly or if the counterparty to the contract is unable to perform. With futures, there is minimal counterparty credit risk to the fund since futures are exchange traded and the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Risks may exceed amounts recognized on the Statement of assets and liabilities. When the contract is closed, the fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.

Futures contracts are valued at the quoted daily settlement prices established by the exchange on which they trade. The fund and the broker agree to exchange an amount of cash equal to the daily fluctuation in the value of the futures contract. Such receipts or payments are known as “variation margin.”

50 George Putnam Balanced Fund 

 


Futures contracts outstanding at period end, if any, are listed after the fund’s portfolio.

Forward currency contracts The fund buys and sells forward currency contracts, which are agreements between two parties to buy and sell currencies at a set price on a future date. These contracts are used to hedge foreign exchange risk.

The U.S. dollar value of forward currency contracts is determined using current forward currency exchange rates supplied by a quotation service. The fair value of the contract will fluctuate with changes in currency exchange rates. The contract is marked to market daily and the change in fair value is recorded as an unrealized gain or loss. The fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed when the contract matures or by delivery of the currency. The fund could be exposed to risk if the value of the currency changes unfavorably, if the counterparties to the contracts are unable to meet the terms of their contracts or if the fund is unable to enter into a closing position. Risks may exceed amounts recognized on the Statement of assets and liabilities.

Forward currency contracts outstanding at period end, if any, are listed after the fund’s portfolio.

TBA commitments The fund may enter into TBA (to be announced) commitments to purchase securities for a fixed unit price at a future date beyond customary settlement time. Although the unit price and par amount have been established, the actual securities have not been specified. However, it is anticipated that the amount of the commitments will not significantly differ from the principal amount. The fund holds, and maintains until settlement date, cash or high-grade debt obligations in an amount sufficient to meet the purchase price, or the fund may enter into offsetting contracts for the forward sale of other securities it owns. Income on the securities will not be earned until settlement date.

The fund may also enter into TBA sale commitments to hedge its portfolio positions, to sell mortgage-backed securities it owns under delayed delivery arrangements or to take a short position in mortgage-backed securities. Proceeds of TBA sale commitments are not received until the contractual settlement date. During the time a TBA sale commitment is outstanding, either equivalent deliverable securities or an offsetting TBA purchase commitment deliverable on or before the sale commitment date are held as “cover” for the transaction, or other liquid assets in an amount equal to the notional value of the TBA sale commitment are segregated. If the TBA sale commitment is closed through the acquisition of an offsetting TBA purchase commitment, the fund realizes a gain or loss. If the fund delivers securities under the commitment, the fund realizes a gain or a loss from the sale of the securities based upon the unit price established at the date the commitment was entered into.

TBA commitments, which are accounted for as purchase and sale transactions, may be considered securities themselves, and involve a risk of loss due to changes in the value of the security prior to the settlement date as well as the risk that the counterparty to the transaction will not perform its obligations. Counterparty risk is mitigated by having a master agreement between the fund and the counterparty.

Unsettled TBA commitments are valued at their fair value according to the procedures described under “Security valuation” above. The contract is marked to market daily and the change in fair value is recorded by the fund as an unrealized gain or loss. Based on market circumstances, Putnam Management will determine whether to take delivery of the underlying securities or to dispose of the TBA commitments prior to settlement.

TBA purchase commitments outstanding at period end, if any, are listed within the fund’s portfolio and TBA sale commitments outstanding at period end, if any, are listed after the fund’s portfolio.

Master agreements The fund is a party to ISDA (International Swaps and Derivatives Association, Inc.) Master Agreements that govern OTC derivative and foreign exchange contracts and Master Securities Forward Transaction Agreements that govern transactions involving mortgage-backed and other asset-backed securities that may result in delayed delivery (Master Agreements) with certain counterparties entered into from time to time. The Master Agreements may contain provisions regarding, among other things, the parties’ general obligations, representations, agreements, collateral requirements, events of default and early termination. With respect to certain counterparties, in accordance with the terms of the Master Agreements, collateral pledged to the fund is held in a segregated account by the fund’s custodian and, with respect to those amounts which can be sold or repledged, are presented in the fund’s portfolio.

Collateral pledged by the fund is segregated by the fund’s custodian and identified in the fund’s portfolio. Collateral can be in the form of cash or debt securities issued by the U.S. Government or related agencies or other securities as agreed to by the fund and the applicable counterparty. Collateral requirements are determined based on the fund’s net position with each counterparty.

George Putnam Balanced Fund 51 

 


With respect to ISDA Master Agreements, termination events applicable to the fund may occur upon a decline in the fund’s net assets below a specified threshold over a certain period of time. Termination events applicable to counterparties may occur upon a decline in the counterparty’s long-term or short-term credit ratings below a specified level. In each case, upon occurrence, the other party may elect to terminate early and cause settlement of all derivative and foreign exchange contracts outstanding, including the payment of any losses and costs resulting from such early termination, as reasonably determined by the terminating party. Any decision by one or more of the fund’s counterparties to elect early termination could impact the fund’s future derivative activity.

At the close of the reporting period, the fund had a net liability position of $1,064,235 on open derivative contracts subject to the Master Agreements. Collateral pledged by the fund at period end for these agreements totaled $656,087 and may include amounts related to unsettled agreements.

Securities lending 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. Income from securities lending, net of expenses, is included in investment income on the Statement of operations. Cash collateral 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. At the close of the reporting period, the fund received cash collateral of $12,148,151 and the value of securities loaned amounted to $12,230,515.

Interfund lending The fund, along with other Putnam funds, may participate in an interfund lending program pursuant to an exemptive order issued by the SEC. This program allows the fund to borrow from or lend to other Putnam funds that permit such transactions. Interfund lending transactions are subject to each fund’s investment policies and borrowing and lending limits. Interest earned or paid on the interfund lending transaction will be based on the average of certain current market rates. During the reporting period, the fund did not utilize the program.

Lines of credit The fund participates, along with other Putnam funds, in a $100 million ($317.5 million prior to October 14, 2022) unsecured committed line of credit and a $235.5 million unsecured uncommitted line of credit, both provided by State Street. Borrowings may be made for temporary or emergency purposes, including the funding of shareholder redemption requests and trade settlements. Interest is charged to the fund based on the fund’s borrowing at a rate equal to 1.25% plus the higher of (1) the Federal Funds rate and (2) the Overnight Bank Funding Rate for the committed line of credit and 1.30% plus the higher of (1) the Federal Funds rate and (2) the Overnight Bank Funding Rate for the uncommitted line of credit. A closing fee equal to 0.04% of the committed line of credit and 0.04% of the uncommitted line of credit has been paid by the participating funds. In addition, a commitment fee of 0.21% per annum on any unutilized portion of the committed line of credit is allocated to the participating funds based on their relative net assets and paid quarterly. During the reporting period, the fund had no borrowings against these arrangements.

Federal taxes It is the policy of the fund to distribute all of its taxable income within the prescribed time period and otherwise comply with the provisions of the Internal Revenue Code of 1986, as amended (the Code), applicable to regulated investment companies. It is also the intention of the fund to distribute an amount sufficient to avoid imposition of any excise tax under Section 4982 of the Code.

The fund is subject to the provisions of Accounting Standards Codification 740 Income Taxes (ASC 740). ASC 740 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The fund did not have a liability to record for any unrecognized tax benefits in the accompanying financial statements. No provision has been made for federal taxes on income, capital gains or unrealized appreciation on securities held nor for excise tax on income and capital gains. Each of the fund’s federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service.

The fund may also be subject to taxes imposed by governments of countries in which it invests. Such taxes are generally based on either income or gains earned or repatriated. The fund accrues and applies such taxes to net investment income, net realized gains and net unrealized gains as income and/or capital gains are earned. In some cases, the fund may be entitled to reclaim all or a portion of such taxes, and such reclaim amounts, if any, are reflected as an asset on the fund’s books. In many cases, however, the fund may not receive such amounts for an extended period of time, depending on the country of investment.

52 George Putnam Balanced Fund 

 


Tax cost of investments includes adjustments to net unrealized appreciation (depreciation) which may not necessarily be final tax cost basis adjustments, but closely approximate the tax basis unrealized gains and losses that may be realized and distributed to shareholders. The aggregate identified cost on a tax basis is $1,492,108,563, resulting in gross unrealized appreciation and depreciation of $280,142,478 and $111,519,431, respectively, or net unrealized appreciation of $168,623,047.

Distributions to shareholders Distributions to shareholders from net investment income are recorded by the fund on the ex-dividend date. Distributions from capital gains, if any, are recorded on the ex-dividend date and paid at least annually. The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Dividend sources are estimated at the time of declaration. Actual results may vary. Any non-taxable return of capital cannot be determined until final tax calculations are completed after the end of the fund’s fiscal year. Reclassifications are made to the fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryovers) under income tax regulations.

Note 2: Management fee, administrative services and other transactions

The fund pays Putnam Management a management fee (based on the fund’s average net assets and computed and paid monthly) at annual rates that may vary based on the average of the aggregate net assets of all open-end mutual funds sponsored by Putnam Management (excluding net assets of funds that are invested in, or that are invested in by, other Putnam funds to the extent necessary to avoid “double counting” of those assets). Such annual rates may vary as follows:

0.680%  of the first $5 billion,  0.480%  of the next $50 billion, 
0.630%  of the next $5 billion,  0.460%  of the next $50 billion, 
0.580%  of the next $10 billion,  0.450%  of the next $100 billion and 
0.530%  of the next $10 billion,  0.445%  of any excess thereafter. 

 

For the reporting period, the management fee represented an effective rate (excluding the impact from any expense waivers in effect) of 0.262% of the fund’s average net assets.

Putnam Management has contractually agreed, through November 30, 2023, to waive fees and/or reimburse the fund’s expenses to the extent necessary to limit the cumulative expenses of the fund, exclusive of brokerage, interest, taxes, investment-related expenses, extraordinary expenses, acquired fund fees and expenses and payments under the fund’s investor servicing contract, investment management contract and distribution plans, on a fiscal year-to-date basis to an annual rate of 0.20% of the fund’s average net assets over such fiscal year-to-date period. During the reporting period, the fund’s expenses were not reduced as a result of this limit.

Putnam Investments Limited (PIL), an affiliate of Putnam Management, is authorized by the Trustees to manage a separate portion of the assets of the fund as determined by Putnam Management from time to time. PIL did not manage any portion of the assets of the fund during the reporting period. If Putnam Management were to engage the services of PIL, Putnam Management would pay a quarterly sub-management fee to PIL for its services at an annual rate of 0.25% of the average net assets of the equity and asset allocation portion of the fund managed by PIL and 0.20% of the average net assets of the fixed-income portion of the fund managed by PIL.

The fund reimburses Putnam Management an allocated amount for the compensation and related expenses of certain officers of the fund and their staff who provide administrative services to the fund. The aggregate amount of all such reimbursements is determined annually by the Trustees.

Custodial functions for the fund’s assets are provided by State Street. Custody fees are based on the fund’s asset level, the number of its security holdings and transaction volumes.

Putnam Investor Services, Inc., an affiliate of Putnam Management, provides investor servicing agent functions to the fund. Putnam Investor Services, Inc. received fees for investor servicing for class A, class B, class C, class M, class R and class Y shares that included (1) a per account fee for each direct and underlying non-defined contribution account (retail account) of the fund; (2) a specified rate of the fund’s assets attributable to defined contribution plan accounts; and (3) a specified rate based on the average net assets in retail accounts. Putnam Investor Services, Inc. has agreed that the aggregate investor servicing fees for each fund’s retail and defined contribution accounts for these share classes will not exceed an annual rate of 0.25% of the fund’s average assets attributable to such accounts.

George Putnam Balanced Fund 53 

 


Class R5 shares paid a monthly fee based on the average net assets of class R5 shares at an annual rate of 0.15%. Class R6 shares paid a monthly fee based on the average net assets of class R6 shares at an annual rate of 0.05%. During the reporting period, the expenses for each class of shares related to investor servicing fees were as follows:

Class A  $792,926  Class R  888 
Class B  3,915  Class R5  8 
Class C  72,572  Class R6  16,852 
Class M  32,801  Class Y  163,084 
    Total  $1,083,046 

 

The fund has entered into expense offset arrangements with Putnam Investor Services, Inc. and State Street whereby Putnam Investor Services, Inc.’s and State Street’s fees are reduced by credits allowed on cash balances. For the reporting period, the fund’s expenses were reduced by $8,342 under the expense offset arrangements.

Each Independent Trustee of the fund receives an annual Trustee fee, of which $1,427, as a quarterly retainer, has been allocated to the fund, and an additional fee for each Trustees meeting attended. Trustees also are reimbursed for expenses they incur relating to their services as Trustees.

The fund has adopted a Trustee Fee Deferral Plan (the Deferral Plan) which allows the Trustees to defer the receipt of all or a portion of Trustees fees payable on or after July 1, 1995. The deferred fees remain invested in certain Putnam funds until distribution in accordance with the Deferral Plan.

The fund has adopted an unfunded noncontributory defined benefit pension plan (the Pension Plan) covering all Trustees of the fund who have served as a Trustee for at least five years and were first elected prior to 2004. Benefits under the Pension Plan are equal to 50% of the Trustee’s average annual attendance and retainer fees for the three years ended December 31, 2005. The retirement benefit is payable during a Trustee’s lifetime, beginning the year following retirement, for the number of years of service through December 31, 2006. Pension expense for the fund is included in Trustee compensation and expenses in the Statement of operations. Accrued pension liability is included in Payable for Trustee compensation and expenses in the Statement of assets and liabilities. The Trustees have terminated the Pension Plan with respect to any Trustee first elected after 2003.

The fund has adopted distribution plans (the Plans) with respect to the following share classes pursuant to Rule 12b–1 under the Investment Company Act of 1940. The purpose of the Plans is to compensate Putnam Retail Management Limited Partnership, an indirect wholly-owned subsidiary of Putnam Investments, LLC, for services provided and expenses incurred in distributing shares of the fund. The Plans provide payments by the fund to Putnam Retail Management Limited Partnership at an annual rate of up to the following amounts (Maximum %) of the average net assets attributable to each class. The Trustees have approved payment by the fund at the following annual rate (Approved %) of the average net assets attributable to each class. During the reporting period, the class-specific expenses related to distribution fees were as follows:

  Maximum %  Approved %  Amount 
Class A  0.35%  0.25%  $1,452,670 
Class B  1.00%  1.00%  28,692 
Class C  1.00%  1.00%  531,630 
Class M  1.00%  0.75%  180,205 
Class R  1.00%  0.50%  3,261 
Total      $2,196,458 

 

For the reporting period, Putnam Retail Management Limited Partnership, acting as underwriter, received net commissions of $63,303 and no monies from the sale of class A and class M shares, respectively, and received $48 and $534 in contingent deferred sales charges from redemptions of class B and class C shares, respectively.

A deferred sales charge of up to 1.00% is assessed on certain redemptions of class A shares. For the reporting period, Putnam Retail Management Limited Partnership, acting as underwriter, received $69 on class A redemptions.

54 George Putnam Balanced Fund 

 


Note 3: Purchases and sales of securities

During the reporting period, the cost of purchases and the proceeds from sales, excluding short-term investments, were as follows:

  Cost of purchases  Proceeds from sales 
Investments in securities, including TBA commitments (Long-term)  $378,487,380  $401,427,256 
U.S. government securities (Long-term)  22,892,624  58,821,170 
Total  $401,380,004  $460,248,426 

 

The fund may purchase or sell investments from or to other Putnam funds in the ordinary course of business, which can reduce the fund’s transaction costs, at prices determined in accordance with SEC requirements and policies approved by the Trustees. During the reporting period, purchases or sales of long-term securities from or to other Putnam funds, if any, did not represent more than 5% of the fund’s total cost of purchases and/or total proceeds from sales.

Note 4: Capital shares

At the close of the reporting period, there were an unlimited number of shares of beneficial interest authorized. Transactions, including, if applicable, direct exchanges pursuant to share conversions, in capital shares were as follows:

  SIX MONTHS ENDED 1/31/23  YEAR ENDED 7/31/22 
Class A  Shares  Amount  Shares  Amount 
Shares sold  2,041,635  $40,420,506  4,801,580  $111,126,092 
Shares issued in connection with         
reinvestment of distributions  1,370,061  27,164,295  4,236,158  98,997,950 
  3,411,696  67,584,801  9,037,738  210,124,042 
Shares repurchased  (4,161,937)  (82,638,056)  (6,917,445)  (155,961,978) 
Net increase (decrease)  (750,241)  $(15,053,255)  2,120,293  $54,162,064 
 
  SIX MONTHS ENDED 1/31/23  YEAR ENDED 7/31/22 
Class B  Shares  Amount  Shares  Amount 
Shares sold  2,950  $55,419  24,499  $567,900 
Shares issued in connection with         
reinvestment of distributions  5,779  112,466  31,883  736,812 
  8,729  167,885  56,382  1,304,712 
Shares repurchased  (93,648)  (1,847,280)  (197,432)  (4,367,146) 
Net decrease  (84,919)  $(1,679,395)  (141,050)  $(3,062,434) 
 
  SIX MONTHS ENDED 1/31/23  YEAR ENDED 7/31/22 
Class C  Shares  Amount  Shares  Amount 
Shares sold  308,287  $6,083,207  1,430,249  $32,810,526 
Shares issued in connection with         
reinvestment of distributions  112,220  2,192,123  397,085  9,211,540 
  420,507  8,275,330  1,827,334  42,022,066 
Shares repurchased  (895,988)  (17,497,627)  (1,509,560)  (33,433,169) 
Net increase (decrease)  (475,481)  $(9,222,297)  317,774  $8,588,897 

 

George Putnam Balanced Fund 55 

 


  SIX MONTHS ENDED 1/31/23  YEAR ENDED 7/31/22 
Class M  Shares  Amount  Shares  Amount 
Shares sold  107,455  $2,100,279  203,523  $4,599,997 
Shares issued in connection with         
reinvestment of distributions  55,373  1,076,308  183,505  4,223,800 
  162,828  3,176,587  387,028  8,823,797 
Shares repurchased  (146,912)  (2,858,174)  (415,491)  (9,190,288) 
Net increase (decrease)  15,916  $318,413  (28,463)  $(366,491) 
 
  SIX MONTHS ENDED 1/31/23  YEAR ENDED 7/31/22 
Class R  Shares  Amount  Shares  Amount 
Shares sold  7,833  $150,983  12,808  $294,570 
Shares issued in connection with         
reinvestment of distributions  1,316  25,998  6,416  149,498 
  9,149  176,981  19,224  444,068 
Shares repurchased  (39,346)  (751,689)  (15,021)  (336,076) 
Net increase (decrease)  (30,197)  $(574,708)  4,203  $107,992 
 
  SIX MONTHS ENDED 1/31/23  YEAR ENDED 7/31/22 
Class R5  Shares  Amount  Shares  Amount 
Shares sold  —  $—  —  $— 
Shares issued in connection with         
reinvestment of distributions  12  244  69  1,641 
  12  244  69  1,641 
Shares repurchased  (458)  (10,000)  —  — 
Net increase (decrease)  (446)  $(9,756)  69  $1,641 
 
  SIX MONTHS ENDED 1/31/23  YEAR ENDED 7/31/22 
Class R6  Shares  Amount  Shares  Amount 
Shares sold  1,245,830  $25,033,643  1,020,489  $23,482,835 
Shares issued in connection with         
reinvestment of distributions  89,753  1,789,975  246,609  5,784,503 
  1,335,583  26,823,618  1,267,098  29,267,338 
Shares repurchased  (642,088)  (12,783,901)  (984,500)  (22,080,833) 
Net increase  693,495  $14,039,717  282,598  $7,186,505 
 
  SIX MONTHS ENDED 1/31/23  YEAR ENDED 7/31/22 
Class Y  Shares  Amount  Shares  Amount 
Shares sold  1,756,744  $35,174,882  4,099,049  $95,377,912 
Shares issued in connection with         
reinvestment of distributions  303,379  6,048,795  1,001,255  23,482,467 
  2,060,123  41,223,677  5,100,304  118,860,379 
Shares repurchased  (2,484,554)  (49,446,389)  (4,510,332)  (100,498,286) 
Net increase (decrease)  (424,431)  $(8,222,712)  589,972  $18,362,093 

 

At the close of the reporting period, Putnam Investments, LLC owned 485 class R5 shares of the fund (100% of class R5 shares outstanding), valued at $10,028.

56 George Putnam Balanced Fund 

 


Note 5: Affiliated transactions

Transactions during the reporting period with any company which is under common ownership or control were as follows:

          Shares 
          outstanding 
          and fair 
  Fair value as  Purchase  Sale  Investment  value as 
Name of affiliate  of 7/31/22  cost  proceeds  income  of 1/31/23 
Short-term investments           
Putnam Cash Collateral           
Pool, LLC*  $17,251,575  $61,837,549  $66,940,973  $251,831  $12,148,151 
Putnam Short Term           
Investment Fund**  33,250,005  165,079,729  158,848,195  868,716  39,481,539 
Total Short-term           
investments  $50,501,580  $226,917,278  $225,789,168  $1,120,547  $51,629,690 

 

* No management fees are charged to Putnam Cash Collateral Pool, LLC (Note 1).Investment income shown is included in securities lending income on the Statement of operations. There were no realized or unrealized gains or losses during the period.

** 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.

Note 6: Market, credit and other risks

In the normal course of business, the fund trades financial instruments and enters into financial transactions where risk of potential loss exists due to changes in the market (market risk) or failure of the contracting party to the transaction to perform (credit risk). The fund may be exposed to additional credit risk that an institution or other entity with which the fund has unsettled or open transactions will default. Investments in foreign securities involve certain risks, including those related to economic instability, unfavorable political developments, and currency fluctuations.

The fund may invest a significant portion of its assets in securitized debt instruments, including mortgage-backed and asset-backed investments. The yields and values of these investments are sensitive to changes in interest rates, the rate of principal payments on the underlying assets and the market’s perception of the issuers. The market for these investments may be volatile and limited, which may make them difficult to buy or sell.

On July 27, 2017, the United Kingdom’s Financial Conduct Authority (“FCA”), which regulates LIBOR, announced its intention to cease compelling banks to provide the quotations needed to sustain LIBOR after 2021. ICE Benchmark Administration, the administrator of LIBOR, ceased publication of most LIBOR settings on a representative basis at the end of 2021 and is expected to cease publication of a majority of U.S. dollar LIBOR settings on a representative basis after June 30, 2023. In addition, global regulators have announced that, with limited exceptions, no new LIBOR-based contracts should be entered into after 2021. LIBOR has historically been a common benchmark interest rate index used to make adjustments to variable-rate loans. It is used throughout global banking and financial industries to determine interest rates for a variety of financial instruments and borrowing arrangements. Actions by regulators have resulted in the establishment of alternative reference rates to LIBOR in most major currencies. Various financial industry groups have been planning for the transition away from LIBOR, but there are obstacles to converting certain longer-term securities and transactions to new reference rates. Markets are developing slowly and questions around liquidity in these rates and how to appropriately adjust these rates to mitigate any economic value transfer at the time of transition remain a significant concern. Neither the effect of the transition process nor its ultimate success can yet be known. The transition process might lead to increased volatility and illiquidity in markets that rely on LIBOR to determine interest rates. It could also lead to a reduction in the value of some LIBOR-based investments and reduce the effectiveness of related transactions, such as hedges. While some LIBOR-based instruments may contemplate a scenario where LIBOR is no longer available by providing for an alternative rate-setting methodology, not all may have such provisions and there may be significant uncertainty regarding the effectiveness of any such alternative methodologies. Since the usefulness of LIBOR as a benchmark could deteriorate during the transition period, these effects could occur at any time.

George Putnam Balanced Fund 57 

 


The Covid–19 pandemic and efforts to contain its spread have resulted in, among other effects, significant market volatility, exchange trading suspensions and closures, declines in global financial markets, higher default rates, significant changes in fiscal and monetary policies, and economic downturns and recessions. The effects of the Covid–19 pandemic have negatively affected, and may continue to negatively affect, the global economy, the economies of the United States and other individual countries, the financial performance of individual issuers, sectors, industries, asset classes, and markets, and the value, volatility, and liquidity of particular securities and other assets. The effects of the Covid–19 pandemic also are likely to exacerbate other risks that apply to the fund, which could negatively impact the fund’s performance and lead to losses on your investment in the fund. The duration of the Covid–19 pandemic and its effects cannot be determined with certainty.

Note 7: Summary of derivative activity

The volume of activity for the reporting period for any derivative type that was held during the period is listed below and was based on an average of the holdings at the end of each fiscal quarter:

Futures contracts (number of contracts)  30 
Forward currency contracts (contract amount)  $62,500,000 

 

The following is a summary of the fair value of derivative instruments as of the close of the reporting period:

Fair value of derivative instruments as of the close of the reporting period   
  ASSET DERIVATIVES  LIABILITY DERIVATIVES 
Derivatives not         
accounted for as  Statement of    Statement of   
hedging instruments  assets and    assets and   
under ASC 815  liabilities location  Fair value  liabilities location  Fair value 
Foreign exchange         
contracts  Investments, Receivables  23,170  Payables  1,087,405 
  Investments,       
  Receivables, Net       
  assets — Unrealized    Payables, Net assets —   
Equity contracts  appreciation  572,252*  Unrealized depreciation  — 
Total    $595,422    $1,087,405 

 

* Includes cumulative appreciation/depreciation of futures contracts as reported in the fund’s portfolio. Only current day’s variation margin is reported within the Statement of assets and liabilities.

The following is a summary of realized and change in unrealized gains or losses of derivative instruments in the Statement of operations for the reporting period (Note 1):

Amount of realized gain or (loss) on derivatives recognized in net gain or (loss) on investments   
Derivatives not accounted for as hedging    Forward currency   
instruments under ASC 815  Futures  contracts  Total 
Foreign exchange contracts  $—  $2,383,404  $2,383,404 
Equity contracts  (2,477,812)  —  (2,477,812) 
Total  $(2,477,812)  $2,383,404  $(94,408) 
 
Change in unrealized appreciation or (depreciation) on derivatives recognized in net gain or (loss)   
on investments       
Derivatives not accounted for as hedging    Forward currency   
instruments under ASC 815  Futures  contracts  Total 
Foreign exchange contracts  $—  $(2,054,676)  $(2,054,676) 
Equity contracts  572,252  —  572,252 
Total  $572,252  $(2,054,676)  $(1,482,424) 

 

58 George Putnam Balanced Fund 

 


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George Putnam Balanced Fund 59 

 


Note 8: Offsetting of financial and derivative assets and liabilities

The following table summarizes any derivatives, repurchase agreements and reverse repurchase agreements, at the end of the reporting period, that are subject to an enforceable master netting agreement or similar agreement. For securities lending transactions or borrowing transactions associated with securities sold short, if any, see Note 1. For financial reporting purposes, the fund does not offset financial assets and financial liabilities that are subject to the master netting agreements in the Statement of assets and liabilities.

  Bank of
America N.A.		 Barclays Bank
PLC		 Citibank, N.A. Citigroup
Global
Markets, Inc.		 Goldman
Sachs
International		 HSBC Bank USA, National Association JPMorgan
Chase Bank N.A.		 JPMorgan
Securities LLC		 Morgan
Stanley & Co. International
PLC		 State Street
Bank and
Trust Co.		 Toronto-
Dominion
Bank		 UBS AG WestPac
Banking Corp.		 Total
Assets:                             
Futures contracts§  $—  $—  $—  $—  $—  $—  $—  $166,750  $—  $—  $—  $—  $—  $166,750 
Forward currency contracts#  —  —  —  —  —  19,260  2,583  —  —  1,327  —  —  —  23,170 
Total Assets  $—  $—  $—  $—  $—  $19,260  $2,583  $166,750  $—  $1,327  $—  $—  $—  $189,920 
Liabilities:                             
Futures contracts§  —  —  —  —  —  —  —  —  —  —  —  —  —  — 
Forward currency contracts#  52,396  213,768  98,197  —  171,374  119,884  167,972  —  53,066  5,839  50,434  106,854  47,621  1,087,405 
Total Liabilities  $52,396  $213,768  $98,197  $—  $171,374  $119,884  $167,972  $—  $53,066  $5,839  $50,434  $106,854  $47,621  $1,087,405 
Total Financial and                             
Derivative Net Assets  $(52,396)  $(213,768)  $(98,197)  $—  $(171,374)  $(100,624)  $(165,389)  $166,750  $(53,066)  $(4,512)  $(50,434)  $(106,854)  $(47,621)  $(897,485) 
Total collateral received                             
(pledged)†##  $—  $(213,768)  $(23,432)  $—  $(123,233)  $(100,624)  $(117,158)  $—  $—  $(4,512)  $—  $(29,507)  $—   
Net amount  $(52,396)  $—  $(74,765)  $—  $(48,141)  $—  $(48,231)  $166,750  $(53,066)  $—  $(50,434)  $(77,347)  $(47,621)   
Controlled collateral                             
received (including                             
TBA commitments)**  $—  $—  $—  $13,000  $—  $—  $—  $118,000  $—  $—  $—  $—  $—  $131,000 
Uncontrolled collateral                             
received  $—  $—  $—  $—  $—  $—  $—  $—  $—  $—  $—  $—  $—  $— 
Collateral (pledged) (including                             
TBA commitments)**  $—  $(228,242)  $(23,432)  $—  $(123,233)  $(113,687)  $(117,158)  $—  $—  $(20,828)  $—  $(29,507)  $—  $(656,087) 

 

** Included with Investments in securities on the Statement of assets and liabilities.

† Additional collateral may be required from certain brokers based on individual agreements.

# Covered by master netting agreement (Note 1).

##Any over-collateralization of total financial and derivative net assets is not shown. Collateral may include amounts related to unsettled agreements.

§ Includes current day’s variation margin only as reported on the Statement of assets and liabilities, which is not collateralized. Cumulative appreciation/(depreciation) for futures contracts and centrally cleared swap contracts is represented in the tables listed after the fund’s portfolio. Collateral pledged for initial margin on futures contracts, which is not included in the table above, amounted to $914,703.

60 George Putnam Balanced Fund  George Putnam Balanced Fund 61 

 


Shareholder meeting results (Unaudited)

September 8, 2022 special meeting

A proposal to change an amendment to fund’s fundamental investment policy regarding the acquisition of voting securities of any issuer, was approved on September 8, 2022 as follows:

Votes for  Votes against  Abstentions  Broker non-votes 
35,670,237  1,255,638  2,527,599  12,842,651 

 

All tabulations are rounded to the nearest whole number.

62 George Putnam Balanced Fund 

 


Putnam family of funds

The following is a list of Putnam’s open-end mutual funds offered to the public. Investors should carefully consider the investment objective, risks, charges, and expenses of a fund before investing. For a prospectus, or a summary prospectus if available, containing this and other information for any Putnam fund or product, contact your financial advisor or call Putnam Investor Services at 1-800-225-1581. Please read the prospectus carefully before investing.

Blend  Income 
Core Equity Fund  Convertible Securities Fund 
Emerging Markets Equity Fund  Core Bond Fund 
Focused Equity Fund  Diversified Income Trust 
Focused International Equity Fund  Floating Rate Income Fund 
International Capital Opportunities Fund  Global Income Trust 
International Equity Fund  Government Money Market Fund* 
Research Fund  High Yield Fund 
Income Fund 
Global Sector  Money Market Fund† 
Global Health Care Fund  Mortgage Opportunities Fund 
Global Technology Fund  Mortgage Securities Fund 
Short Duration Bond Fund 
Growth  Ultra Short Duration Income Fund 
Growth Opportunities Fund   
Small Cap Growth Fund  Tax-free Income 
Sustainable Future Fund  Intermediate-Term Municipal Income Fund 
Sustainable Leaders Fund  Short-Term Municipal Income Fund 
Strategic Intermediate Municipal Fund 
Value  Tax Exempt Income Fund 
International Value Fund  Tax-Free High Yield Fund 
Large Cap Value Fund   
Small Cap Value Fund  State tax-free income funds:‡ 
  California, Massachusetts, Minnesota, 
  New Jersey, New York, Ohio, and Pennsylvania 

 

George Putnam Balanced Fund 63 

 


Asset Allocation  Asset Allocation (cont.) 
George Putnam Balanced Fund  Retirement Advantage Maturity Fund 
Retirement Advantage 2065 Fund 
Dynamic Asset Allocation Balanced Fund  Retirement Advantage 2060 Fund 
Dynamic Asset Allocation Conservative Fund  Retirement Advantage 2055 Fund 
Dynamic Asset Allocation Growth Fund  Retirement Advantage 2050 Fund 
Retirement Advantage 2045 Fund 
Multi-Asset Income Fund  Retirement Advantage 2040 Fund 
  Retirement Advantage 2035 Fund 
  Retirement Advantage 2030 Fund 
  Retirement Advantage 2025 Fund 
  Sustainable Retirement Maturity Fund 
  Sustainable Retirement 2065 Fund 
  Sustainable Retirement 2060 Fund 
  Sustainable Retirement 2055 Fund 
  Sustainable Retirement 2050 Fund 
  Sustainable Retirement 2045 Fund 
  Sustainable Retirement 2040 Fund 
  Sustainable Retirement 2035 Fund 
  Sustainable Retirement 2030 Fund 
  Sustainable Retirement 2025 Fund 

 

* You could lose money by investing in the fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund’s sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.

† You could lose money by investing in the fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. The fund may impose a fee upon sale of your shares or may temporarily suspend your ability to sell shares if the fund’s liquidity falls below required minimums because of market conditions or other factors. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund’s sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.

‡ Not available in all states.

Check your account balances and the most recent month-end performance in the Individual Investors section at putnam.com.

64 George Putnam Balanced Fund 

 


Fund information

Founded over 85 years ago, Putnam Investments was built around the concept that a balance between risk and reward is the hallmark of a well-rounded financial program. We manage funds across income, value, blend, growth, sustainable, and asset allocation categories.

Investment Manager  Trustees  Richard T. Kircher 
Putnam Investment  Kenneth R. Leibler, Chair  Vice President and 
Management, LLC  Barbara M. Baumann, Vice Chair  BSA Compliance Officer 
100 Federal Street  Liaquat Ahamed   
Boston, MA 02110  Katinka Domotorffy  Martin Lemaire 
  Catharine Bond Hill  Vice President and 
Investment Sub-Advisor  Jennifer Williams Murphy  Derivatives Risk Manager 
Putnam Investments Limited  Marie Pillai 
16 St James’s Street  George Putnam III  Susan G. Malloy 
London, England SW1A 1ER  Robert L. Reynolds  Vice President and 
Manoj P. Singh  Assistant Treasurer 
Marketing Services  Mona K. Sutphen 
Putnam Retail Management    Alan G. McCormack 
Limited Partnership  Officers  Vice President and 
100 Federal Street  Robert L. Reynolds  Derivatives Risk Manager 
Boston, MA 02110  President 
    Denere P. Poulack 
Custodian  James F. Clark  Assistant Vice President, 
State Street Bank  Vice President, Chief Compliance  Assistant Clerk, and 
and Trust Company  Officer, and Chief Risk Officer  Assistant Treasurer 
   
Legal Counsel  Nancy E. Florek  Janet C. Smith 
Ropes & Gray LLP  Vice President, Assistant Clerk,  Vice President, 
  and Assistant Treasurer  Principal Financial Officer, 
Principal Accounting Officer, 
  Michael J. Higgins  and Assistant Treasurer 
  Vice President, Treasurer, 
  and Clerk  Stephen J. Tate 
Vice President and 
  Jonathan S. Horwitz  Chief Legal Officer 
  Executive Vice President, 
  Principal Executive Officer,  Mark C. Trenchard 
  and Compliance Liaison  Vice President 

 

This report is for the information of shareholders of George Putnam Balanced Fund. It may also be used as sales literature when preceded or accompanied by the current prospectus, the most recent copy of Putnam’s Quarterly Performance Summary, and Putnam’s Quarterly Ranking Summary. For more recent performance, please visit putnam.com. Investors should carefully consider the investment objectives, risks, charges, and expenses of a fund, which are described in its prospectus. For this and other information or to request a prospectus or summary prospectus, call 1-800-225-1581 toll free. Please read the prospectus carefully before investing. The fund’s Statement of Additional Information contains additional information about the fund’s Trustees and is available without charge upon request by calling 1-800-225-1581.



Item 2. Code of Ethics:
Not applicable

Item 3. Audit Committee Financial Expert:
Not applicable

Item 4. Principal Accountant Fees and Services:
Not applicable

Item 5. Audit Committee of Listed Registrants
Not applicable

Item 6. Schedule of Investments:
The registrant’s schedule of investments in unaffiliated issuers is included in the report to shareholders in Item 1 above.

Item 7. Disclosure of Proxy Voting Policies and Procedures For Closed-End Management Investment Companies:
Not applicable

Item 8. Portfolio Managers of Closed-End Investment Companies
Not Applicable

Item 9. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers:
Not applicable

Item 10. Submission of Matters to a Vote of Security Holders:
Not applicable

Item 11. Controls and Procedures:
(a) The registrant’s principal executive officer and principal financial officer have concluded, based on their evaluation of the effectiveness of the design and operation of the registrant’s disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the design and operation of such procedures are generally effective to provide reasonable assurance that information required to be disclosed by the registrant in this report is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms.

(b) Changes in internal control over financial reporting: Not applicable

Item 12. Disclosures of Securities Lending Activities for Closed-End Investment Companies:
Not Applicable

Item 13. Exhibits:
(a)(1) Not applicable

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

(b) The certifications required by Rule 30a-2(b) under the Investment Company Act of 1940, as amended, are filed herewith.

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

George Putnam Balanced Fund
By (Signature and Title):
/s/ Janet C. Smith
Janet C. Smith
Principal Accounting Officer

Date: March 29, 2023
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By (Signature and Title):
/s/ Jonathan S. Horwitz
Jonathan S. Horwitz
Principal Executive Officer

Date: March 29, 2023
By (Signature and Title):
/s/ Janet C. Smith
Janet C. Smith
Principal Financial Officer

Date: March 29, 2023