a_internationalequity.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:	(811–07513)


	Exact name of registrant as specified in charter:	Putnam Funds Trust


	Address of principal executive offices:	100 Federal Street, Boston, Massachusetts 02110


	Name and address of agent for service:	Robert T. Burns, Vice President 100 Federal Street Boston, Massachusetts 02110


	Copy to:	Bryan Chegwidden, Esq. Ropes & Gray LLP 1211 Avenue of the Americas New York, New York 10036


	Registrant's telephone number, including area code:	(617) 292–1000


	Date of fiscal year end:	June 30, 2020


	Date of reporting period:	July 1, 2019 — December 31, 2019


	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:

Putnam
International Equity
Fund

Semiannual report
12 | 31 | 19


Message from the Trustees	1
Interview with your fund’s portfolio manager	3
Your fund’s performance	7
Your fund’s expenses	9
Consider these risks before investing	11
Terms and definitions	12
Other information for shareholders	13
Financial statements	14

IMPORTANT NOTICE: Delivery of paper fund reports

In accordance with regulations adopted by the Securities and Exchange Commission, beginning on January 1, 2021, reports like this one will no longer be sent by mail unless you specifically request it. Instead, they will be on Putnam’s website, and you will be notified by mail whenever a new one is available, and provided with a website link to access the report.

If you wish to stop receiving paper reports sooner, or if you wish to continue to receive paper reports free of charge after January 1, 2021, please see the back cover or insert for instructions. If you invest through a bank or broker, your choice will apply to all funds held in your account. If you invest directly with Putnam, your choice will apply to all Putnam funds in your account.

If you already receive these reports electronically, no action is required.

Message from the Trustees

February 10, 2020

Dear Fellow Shareholder:

Global financial markets overcame a number of uncertainties in 2019. Both stock and bond markets experienced bouts of volatility, but performance recovered despite macroeconomic headwinds and risks. Stock markets worldwide delivered solid returns for the calendar year, with all three major U.S. equity indexes reaching record highs in December. The year was also beneficial for bond investors, as global fixed-income markets posted strong returns, thanks in part to policy easing from central banks.

Although no one can predict the direction of the markets in the months ahead, Putnam’s experienced investment professionals actively seek to position their fund portfolios for all types of conditions. They take a research-intensive approach to investing that includes risk management strategies designed to serve investors through changing markets. In all environments, we believe investors should remain focused on time-tested approaches, such as maintaining a well-diversified portfolio, thinking about long-term goals, and speaking regularly with a financial advisor.

Thank you for investing with Putnam.

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 below and pages 7–8 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 the six-month period are not annualized, but cumulative.

This comparison shows your fund’s performance in the context of broad market indexes for the six months ended 12/31/19. See above and pages 7–8 for additional fund performance information. Index descriptions can be found on pages 12–13.

2 International Equity Fund

Vivek has an MBA from XLRI, Jamshedpur, India, and a B.Eng., Computer Science, from Regional Engineering College, Bhopal, India. He joined Putnam in 1999 and has been in the investment industry since 1994.

Vivek, how did stock markets perform over the six-month reporting period?

The global economy continued its more than decade-long growth trend, albeit at a more modest pace, over the period. In the United States, low unemployment, solid wage reports, and healthy consumer spending helped boost investor appetite for stocks. However, setbacks in U.S.–China trade negotiations and weaker global economic growth curbed investor enthusiasm. Production levels in Germany and South Korea, bellwethers of international trade, fell to multi-year lows. China’s annual growth rate dropped to its lowest since 1992. Japan’s economy also softened over the period.

In an effort to stem recessionary fears, central banks around the world began to cut interest rates. In July, the U.S. Federal Reserve [the Fed] lowered its interest rate for the first time since 2008. The Fed reduced interest rates two more times between August and October. Following its October interest-rate cut, the S&P 500 Index, a broad measure of stock performance, closed at a record high. Meanwhile, the European Central Bank [ECB] kept interest rates in negative territory and restarted a round of quantitative easing in November. In December,

International Equity Fund 3

Allocations are shown as a percentage of the fund’s net assets as of 12/31/19. Cash and net other assets, if any, represent the market value weights of cash, derivatives, short-term securities, and other unclassified assets in the portfolio. Summary information may differ from the information in the portfolio schedule notes included in the financial statements due to the inclusion of derivative securities, any interest accruals, the exclusion of as-of trades, if any, and rounding. Holdings and allocations may vary over time.

This table shows the fund’s top 10 holdings by percentage of the fund’s net assets as of 12/31/19. Short-term investments and derivatives, if any, are excluded. Holdings may vary over time.

4 International Equity Fund

the United States and China reached a “phase one” trade deal, and higher tariffs were avoided. Global stock markets rallied, finishing the year strong. For the six-months ended December 31, 2019, the S&P 500 Index posted a return of 10.92%. International stocks, as measured by the MSCI EAFE Index [ND], gained 7.01% over the reporting period.

Given this backdrop, how did the fund perform?

The fund’s class A shares posted a return of 7.71%, outperforming the benchmark, the MSCI EAFE Index [ND] Index, which returned 7.01%. The fund also outperformed its Lipper peer group, International Multi-Cap Core Funds, which averaged 6.79% for the reporting period.

Which stocks contributed the most to fund performance?

Our top contributor was Japanese electronics manufacturer Sony, maker of the world’s best-selling gaming console, PlayStation. We especially liked Sony’s subscription-based revenue model, which is designed to offset cyclical declines in the gaming industry. Sony’s semiconductor business, renamed the imaging and sensing solutions [ISS] unit, also performed well. Sales of ISS’ high-resolution imaging sensors, which are used in smartphone cameras, rose among key manufacturers. Sony’s entertainment content subsidiaries, Sony Music and Sony Pictures, were also strong performing assets. In our view, we would expect to see future growth here as well given recent acquisition and merger activities.

Hoya, a Japanese technology and life-care company, was another highlight for the period. Hoya stands out as the only producer of 3.5-inch glass substrates used in high-capacity data-center hard-disk drives. The firm holds about 70% market share in mask blanks, which are used to produce the latest generation of semiconductor chips. We also were impressed by Hoya’s life-care business, where it is a scale manufacturer of eye lenses, contacts, and medical endoscopes.

Switzerland-based SIG Combibloc Group, which is not in the benchmark, was another top contributor. SIG has carved out a unique position as one of two providers of aseptic carton filling solutions. These sustainable, eco-friendly packaging solutions are used widely in the dairy industry, offering an alternative to plastic containers. In our view, new regulations in Europe, Asia, and South America that require manufacturers to lower their carbon footprint should bode well for SIG’s product demand.

Which stocks detracted the most from fund performance?

The fund’s primary detractors were stocks with substantial exposure to Hong Kong. This region experienced political unrest following a government-proposed extradition bill. Protests against the bill disrupted local business activities as well as reduced Chinese tourism. Our holdings in Prudential, a global life insurance and financial services company; AIA Group, an Asian life insurance provider; and HK Exchanges and Clearing, operator of Hong Kong stock markets, were negatively impacted by these events.

As we enter 2020, we remain optimistic about the long-term growth potential of the Asian savings and insurance market. We believe Hong Kong has started the process of normalization and public demonstrations have slowed. We continue to hold AIA and Prudential in the fund’s portfolio, but sold HK Exchanges before period-end.

International Equity Fund 5

What is your outlook for international stocks and the fund for 2020?

Several of the world’s largest economies, including those in China, Europe, and Japan, introduced stimulus packages in the last quarter of 2019. The U.S.–China “phase one” trade deal in December also helped ease investor fears. Combined, we believe these conditions could boost global economic activity in 2020.

On the other hand, any setbacks in U.S.–China trade negotiations and rising tensions in Iran could become headwinds for global stocks. Another risk is Brexit. The UK could leave the European Union without a comprehensive free trade and services agreement. Our fund is positioned with what we believe is limited exposure to any type of Brexit. Our active stock selection process is focused on a company’s individual merits, rather than solely on any macroeconomic trend. We will continue to invest in what we believe to be high-quality companies with durable revenue streams, a strong competitive edge, and good corporate governance.

Thank you, Vivek, for this update on the fund.

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.

This chart shows the fund’s largest allocation shifts, by percentage, 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.

6 International Equity Fund

Your fund’s performance

This section shows your fund’s performance, price, and distribution information for periods ended December 31, 2019, the end of the first half of its current fiscal year. In accordance with regulatory requirements for mutual funds, we also include 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.

Fund performance Total return for periods ended 12/31/19


	Annual
	average		Annual		Annual		Annual
	(life of fund)	10 years	average	5 years	average	3 years	average	1 year	6 months
Class A (2/28/91)
Before sales charge	6.98%	68.25%	5.34%	24.74%	4.52%	27.99%	8.57%	25.50%	7.71%
After sales charge	6.76	58.57	4.72	17.57	3.29	20.63	6.45	18.28	1.52
Class B (6/1/94)
Before CDSC	6.74	58.41	4.71	20.12	3.74	25.15	7.76	24.55	7.31
After CDSC	6.74	58.41	4.71	18.12	3.39	22.15	6.90	19.55	2.31
Class C (7/26/99)
Before CDSC	6.70	56.15	4.56	20.10	3.73	25.14	7.76	24.54	7.31
After CDSC	6.70	56.15	4.56	20.10	3.73	25.14	7.76	23.54	6.31
Class R (1/21/03)
Net asset value	6.71	64.11	5.08	23.18	4.26	27.02	8.30	25.19	7.57
Class R5 (7/2/12)
Net asset value	7.22	73.57	5.67	26.71	4.85	29.21	8.92	25.87	7.86
Class R6 (7/2/12)
Net asset value	7.25	74.94	5.75	27.36	4.96	29.60	9.03	26.02	7.91
Class Y (7/12/96)
Net asset value	7.20	72.57	5.61	26.29	4.78	28.94	8.84	25.78	7.85

Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results. After-sales-charge returns for class A shares reflect the deduction of the maximum 5.75% sales charge levied at the time of purchase. Class B share returns after contingent deferred sales charge (CDSC) reflect the applicable CDSC, which is 5% in the first year, declining over time to 1% in the sixth year, and is eliminated thereafter. Class C share returns after CDSC reflect a 1% CDSC for the first year that is eliminated thereafter. Class R, R5, R6, and Y shares have no initial sales charge or CDSC. Performance for class B, C, 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.

International Equity Fund 7

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

The fund has had performance fee adjustments that may have had a positive or negative impact on returns.

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

Class C share performance reflects conversion to class A shares after 10 years.

Comparative index returns For periods ended 12/31/19


	Annual
	average		Annual		Annual		Annual
	(life of fund)	10 years	average	5 years	average	3 years	average	1 year	6 months
MSCI EAFE Index (ND)	5.21%	70.85%	5.50%	31.76%	5.67%	31.52%	9.56%	22.01%	7.01%
Lipper International
Multi-Cap Core Funds	5.65	65.58	5.08	27.81	4.99	27.65	8.44	20.68	6.79
category average^*

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

^*Over the 6-month, 1-year, 3-year, 5-year, 10-year, and life-of-fund periods ended 12/31/19, there were 431, 422, 368, 295, 201, and 4 funds, respectively, in this Lipper category.

Fund price and distribution information For the six-month period ended 12/31/19


Distributions	Class A		Class B	Class C	Class R	Class R5	Class R6	Class Y
Number	1		1	1	1	1	1	1
Income	$0.386		$0.238	$0.255	$0.303	$0.412	$0.471	$0.429
Capital gains	—		—	—	—	—	—	—
Total	$0.386		$0.238	$0.255	$0.303	$0.412	$0.471	$0.429
	Before	After	Net	Net	Net	Net	Net	Net
	sales	sales	asset	asset	asset	asset	asset	asset
Share value	charge	charge	value	value	value	value	value	value
6/30/19	$23.07	$24.48	$21.89	$22.40	$22.66	$23.48	$23.45	$23.35
12/31/19	24.46	25.95	23.25	23.78	24.07	24.91	24.83	24.75

The classification of distributions, if any, is an estimate. Before-sales-charge share value and current dividend rate for class A shares, if applicable, do not take into account any sales charge levied at the time of purchase. After-sales-charge share value, current dividend rate, and current 30-day SEC yield, if applicable, are calculated assuming that the maximum sales charge (5.75% for class A shares) was levied at the time of purchase. Final distribution information will appear on your year-end tax forms.

8 International Equity Fund

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 R	Class R5	Class R6	Class Y
Total annual operating expenses for the
fiscal year ended 6/30/19^*	1.18%	1.93%	1.93%	1.43%	0.84%	0.74%	0.93%
Annualized expense ratio for the
six-month period ended 12/31/1^†	1.15%	1.90%	1.90%	1.40%	0.81%	0.71%	0.90%

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.

^*Restated to reflect current fees.

^†Includes a decrease of 0.06% from annualizing the performance fee adjustment for the six months ended 12/31/19.

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 7/1/19 to 12/31/19. 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 R	Class R5	Class R6	Class Y
Expenses paid per $1,000 ^*†	$6.00	$9.90	$9.90	$7.30	$4.23	$3.71	$4.70
Ending value (after expenses)	$1,077.10	$1,073.10	$1,073.10	$1,075.70	$1,078.60	$1,079.10	$1,078.50

^*Expenses for each share class are calculated using the fund’s annualized expense ratio for each class, which represents the ongoing expenses as a percentage of average net assets for the six months ended 12/31/19. The expense ratio may differ for each share class.

^†Expenses are calculated by multiplying the expense ratio by the average account value for the period; then multiplying the result by the number of days in the period; and then dividing that result by the number of days in the year.

International Equity Fund 9

Estimate the expenses you paid

To estimate the ongoing expenses you paid for the six months ended 12/31/19, use the following calculation method. To find the value of your investment on 7/1/19, 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 R	Class R5	Class R6	Class Y
Expenses paid per $1,000^*†	$5.84	$9.63	$9.63	$7.10	$4.12	$3.61	$4.57
Ending value (after expenses)	$1,019.36	$1,015.58	$1,015.58	$1,018.10	$1,021.06	$1,021.57	$1,020.61

^†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; and then dividing that result by the number of days in the year.

10 International Equity Fund

Consider these risks before investing

International investing involves currency, economic, and political risks. Emerging-market securities carry illiquidity and volatility risks. Investments focused in a single region may be affected by common economic forces and other factors. In addition, events in any one country within the region may impact the other countries or the region as a whole. Because the fund currently, and may in the future, invest significantly in European companies, the fund is particularly susceptible to economic, political, regulatory, or other events or conditions affecting issuers in Europe. European financial markets have in recent years experienced increased volatility due to concerns with some countries’ high levels of sovereign debt, budget deficits, and unemployment. Investments in small and/or midsize companies increase the risk of greater price fluctuations. Growth stocks may be more susceptible to earnings disappointments, and value stocks may fail to rebound. 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. 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. You can lose money by investing in the fund.

International Equity Fund 11

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, and 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.

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

Share classes

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

Class B shares are closed to new investments and are only available by exchange from 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 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 Barclays U.S. Aggregate Bond Index is an unmanaged index of U.S. investment-grade fixed-income securities.

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

MSCI EAFE Index (ND) is an unmanaged index of equity securities from developed countries in Western Europe, the Far East, and Australasia. Calculated with net dividends (ND), this total return index reflects the reinvestment of dividends after the deduction of withholding taxes, using a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties.

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.

12 International Equity Fund

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 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 averages reflect performance trends for funds within a category.

Other information for shareholders

Important notice regarding delivery of shareholder documents

In accordance with Securities and Exchange Commission (SEC) regulations, Putnam sends a single 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, 2019, 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 December 31, 2019, Putnam employees had approximately $482,000,000 and the Trustees had approximately $76,000,000 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.

International Equity Fund 13

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 year.

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.

14 International Equity Fund

The fund’s portfolio 12/31/19 (Unaudited)


COMMON STOCKS (98.4%)*	Shares	Value
Australia (1.5%)
Qantas Airways, Ltd.	2,648,340	$13,231,406
		13,231,406
Canada (1.7%)
TMX Group, Ltd.	175,500	15,197,701
		15,197,701
China (1.0%)
Yum China Holdings, Inc.	186,467	8,952,281
		8,952,281
Finland (1.4%)
Fortum OYJ	479,665	11,836,885
		11,836,885
France (14.3%)
Airbus SE	108,283	15,848,236
AXA SA	818,612	23,056,932
Dassault Systemes SA	84,098	13,824,460
Kering SA	30,453	19,989,922
La Francaise des Jeux SAEM ^†	279,187	7,461,133
Pernod Ricard SA	61,355	10,970,211
Veolia Environnement SA	705,806	18,771,268
Vinci SA	134,178	14,900,238
		124,822,400
Germany (4.4%)
adidas AG	55,301	17,976,621
CompuGroup Medical SE	138,076	9,873,590
HC Brillant Services GmbH (acquired various dates from
8/2/13 to 8/31/16, cost $20) (Private) ^{† ∆∆ F}	30	25
New Bigfoot Other Assets GmbH (acquired 8/2/13, cost $20) (Private) ^†^{∆∆ F}	15	13
New Middle East Other Assets GmbH (acquired 8/2/13, cost $8)
(Private) ^†^{∆∆ F}	6	5
Rheinmetall AG	88,930	10,214,684
		38,064,938
Hong Kong (3.2%)
AIA Group, Ltd.	2,649,400	27,876,073
		27,876,073
Ireland (2.8%)
CRH PLC	394,756	15,794,597
Kerry Group PLC Class A	67,409	8,400,568
		24,195,165
Italy (0.5%)
Nexi SpA ^†	325,173	4,515,562
		4,515,562
Japan (20.1%)
Asahi Group Holdings, Ltd.	352,600	16,106,660
Daikin Industries, Ltd.	76,000	10,687,927
Hoya Corp.	205,900	19,659,360
Kobe Bussan Co., Ltd.	149,300	5,129,270
MinebeaMitsumi, Inc.	539,200	11,127,228
Mitsubishi Corp.	441,500	11,712,914

International Equity Fund 15


COMMON STOCKS (98.4%)* cont.	Shares	Value
Japan cont.
Nintendo Co., Ltd.	33,900	$13,683,609
ORIX Corp.	914,100	15,215,529
Seven & i Holdings Co., Ltd.	294,100	10,760,754
Sony Corp.	414,700	28,227,297
Sumitomo Mitsui Financial Group, Inc.	432,100	15,906,548
Toyota Motor Corp.	244,900	17,243,356
		175,460,452
Luxembourg (—%)
Global Fashion Group SA ^†	34,974	91,014
		91,014
Netherlands (8.0%)
Akzo Nobel NV	95,696	9,729,497
ING Groep NV	1,255,753	15,054,883
Koninklijke Ahold Delhaize NV	530,046	13,255,550
Koninklijke DSM NV	99,808	12,997,932
Unilever NV	322,882	18,554,314
		69,592,176
Norway (1.4%)
DNB ASA	634,919	11,860,480
		11,860,480
South Korea (2.1%)
Samsung Electronics Co., Ltd. (Preference)	464,452	18,120,279
		18,120,279
Sweden (1.2%)
ASSA ABLOY AB Class B	444,513	10,393,414
		10,393,414
Switzerland (11.6%)
Alcon, Inc. ^†	229,422	12,990,624
Barry Callebaut AG	7,203	15,912,393
Coca-Cola HBC AG	445,797	15,146,392
Lonza Group AG	40,462	14,766,665
Novartis AG	285,145	27,076,695
SIG Combibloc Group AG	975,719	15,586,501
		101,479,270
United Arab Emirates (0.6%)
Network International Holdings PLC ^†	647,305	5,496,062
		5,496,062
United Kingdom (19.3%)
Anglo American PLC	622,599	17,920,612
Ashtead Group PLC	554,831	17,741,187
Associated British Foods PLC	277,459	9,548,225
AstraZeneca PLC	279,106	28,123,365
British Land Co., PLC (The) ^R	1,077,121	9,114,106
Compass Group PLC	588,191	14,725,325
Imperial Brands PLC	494,350	12,238,510
M&G PLC ^†	1,524,371	4,789,499
Prudential PLC	1,397,204	26,817,167
Quilter PLC	2,064,178	4,403,445

16 International Equity Fund


COMMON STOCKS (98.4%)* cont.		Shares	Value
United Kingdom cont.
SSE PLC		591,720	$11,274,851
Vodafone Group PLC		5,801,027	11,277,096
			167,973,388
United States (3.3%)
Linde PLC		58,790	12,582,256
NXP Semiconductors NV		124,083	15,790,803
			28,373,059
Total common stocks (cost $750,862,783)			$857,532,005

		Principal
U.S. TREASURY OBLIGATIONS (—%)*		amount	Value
U.S. Treasury Notes
2.875%, 7/31/25 ⁱ		$91,000	$97,595
2.25%, 11/15/25 ⁱ		78,000	80,359
Total U.S. treasury obligations (cost $177,954)			$177,954

	Principal amount/
SHORT-TERM INVESTMENTS (1.4%)*		shares	Value
Putnam Short Term Investment Fund 1.72% ^L	Shares	9,833,708	$9,833,708
U.S. Treasury Bills 1.636%, 4/2/20 ^∆		$874,000	870,631
U.S. Treasury Bills 1.892%, 3/12/20		852,000	849,511
U.S. Treasury Bills 1.649%, 4/9/20		357,000	355,518
U.S. Treasury Bills 1.541%, 4/23/20		140,000	139,332
U.S. Treasury Bills 1.572%, 5/7/20		126,000	125,328
U.S. Treasury Bills 1.563%, 4/16/20		122,000	121,460
U.S. Treasury Bills 1.655%, 2/20/20		15,000	14,969
Total short-term investments (cost $12,309,536)			$12,310,457

TOTAL INVESTMENTS
Total investments (cost $763,350,273)			$870,020,416

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 July 1, 2019 through December 31, 2019 (the reporting period). Within the following notes to the portfolio, references to “Putnam Management” represent Putnam Investment Management, LLC, the fund’s manager, an indirect wholly-owned subsidiary of Putnam Investments, LLC and references to “ASC 820” represent Accounting Standards Codification 820 Fair Value Measurements and Disclosures.

^*Percentages indicated are based on net assets of $871,182,805.

^†This security is non-income-producing.

^∆∆This security is restricted with regard to public resale. The total fair value of this security and any other restricted securities (excluding 144A securities), if any, held at the close of the reporting period was $43, or less than 0.1% of net assets.

^∆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 $266,955 and is included in Investments in securities on the Statement of assets and liabilities (Notes 1 and 8).

^FThis security is valued by Putnam Management at fair value following procedures approved by the Trustees. Securities are classified as Level 3 for ASC 820 based on the securities’ valuation inputs. At the close of the reporting period, fair value pricing was also used for certain foreign securities in the portfolio (Note 1).

International Equity Fund 17

ⁱThis security was pledged, or purchased with cash that was pledged, to the fund for collateral on certain derivative contracts (Note 1).

^LAffiliated 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.

^RReal Estate Investment Trust.

At the close of the reporting period, the fund maintained liquid assets totaling $187,358 to cover certain derivative contracts.

Unless otherwise noted, the rates quoted in Short-term investments security descriptions represent the weighted average yield to maturity.

The dates shown on debt obligations are the original maturity dates.

The fund had the following sector concentrations greater than 10% at the close of the reporting period (as a percentage of net assets):


Financials	18.4%
Consumer staples	15.6
Industrials	13.3
Consumer discretionary	13.2
Health care	12.9


FORWARD CURRENCY CONTRACTS at 12/31/19 (aggregate face value $273,562,907) (Unaudited)
						Unrealized
		Contract	Delivery		Aggregate	appreciation/
Counterparty	Currency	type^*	date	Value	face value	(depreciation)
Bank of America N.A.
	Australian Dollar	Buy	1/15/20	$1,981,162	$1,890,949	$90,213
	British Pound	Sell	3/18/20	4,637,166	4,535,982	(101,184)
	Canadian Dollar	Buy	1/15/20	377,451	369,705	7,746
	Canadian Dollar	Sell	1/15/20	377,451	373,423	(4,028)
	Euro	Sell	3/18/20	3,092,514	3,061,381	(31,133)
	Japanese Yen	Buy	2/19/20	27,655,375	27,704,725	(49,350)
Barclays Bank PLC
	Australian Dollar	Buy	1/15/20	101,294	96,728	4,566
	British Pound	Sell	3/18/20	126,362	125,138	(1,224)
	Canadian Dollar	Sell	1/15/20	500,752	490,455	(10,297)
	Euro	Sell	3/18/20	3,922,075	3,882,427	(39,648)
	Hong Kong Dollar	Buy	2/19/20	8,862,220	8,802,074	60,146
	Japanese Yen	Sell	2/19/20	3,505,378	3,510,653	5,275
Citibank, N.A.
	Australian Dollar	Buy	1/15/20	2,030,301	1,938,020	92,281
	British Pound	Sell	3/18/20	11,837,278	11,473,741	(363,537)
	Canadian Dollar	Buy	1/15/20	5,226,939	5,094,104	132,835
	Danish Krone	Buy	3/18/20	15,920,206	15,760,594	159,612
	Euro	Sell	3/18/20	1,760,212	1,735,055	(25,157)
	New Zealand Dollar	Buy	1/15/20	38,579	35,801	2,778
Goldman Sachs International
	British Pound	Buy	3/18/20	104,594	102,089	2,505

18 International Equity Fund


FORWARD CURRENCY CONTRACTS at 12/31/19 (aggregate face value $273,562,907) (Unaudited) cont.
						Unrealized
		Contract	Delivery		Aggregate	appreciation/
Counterparty	Currency	type^*	date	Value	face value	(depreciation)
HSBC Bank USA, National Association
	Australian Dollar	Buy	1/15/20	$5,184,030	$5,044,435	$139,595
	Canadian Dollar	Sell	1/15/20	307,290	303,462	(3,828)
	Chinese Yuan (Offshore)	Sell	2/19/20	8,971,912	8,855,290	(116,622)
	Euro	Sell	3/18/20	10,837,039	10,759,253	(77,786)
	Hong Kong Dollar	Buy	2/19/20	660,398	656,836	3,562
	Japanese Yen	Sell	2/19/20	6,364,077	6,374,011	9,934
	New Zealand Dollar	Buy	1/15/20	1,650,680	1,531,729	118,951
	New Zealand Dollar	Sell	1/15/20	1,650,680	1,654,042	3,362
JPMorgan Chase Bank N.A.
	Australian Dollar	Buy	1/15/20	4,426,115	4,311,882	114,233
	British Pound	Buy	3/18/20	473,327	463,034	10,293
	Euro	Buy	3/18/20	27,475,711	27,197,054	278,657
	Japanese Yen	Buy	2/19/20	319,091	319,659	(568)
	New Zealand Dollar	Buy	1/15/20	1,650,680	1,654,250	(3,570)
	Norwegian Krone	Sell	3/18/20	6,471,140	6,292,362	(178,778)
	Singapore Dollar	Buy	2/19/20	10,549,813	10,464,438	85,375
	South Korean Won	Sell	2/19/20	16,378,707	16,336,663	(42,044)
	Swedish Krona	Buy	3/18/20	10,270,439	10,112,149	158,290
	Swiss Franc	Sell	3/18/20	19,185,153	18,776,077	(409,076)
NatWest Markets PLC
	Australian Dollar	Buy	1/15/20	66,266	63,261	3,005
State Street Bank and Trust Co.
	Australian Dollar	Buy	1/15/20	291,176	277,970	13,206
	Israeli Shekel	Buy	1/15/20	4,910,292	4,894,839	15,453
	Japanese Yen	Buy	2/19/20	15,825,623	15,864,795	(39,172)
Toronto-Dominion Bank
	Canadian Dollar	Buy	1/15/20	2,360,051	2,334,911	25,140
	Canadian Dollar	Sell	1/15/20	2,360,051	2,301,776	(58,275)
	Euro	Buy	3/18/20	3,877,334	3,859,845	17,489
UBS AG
	Australian Dollar	Buy	1/15/20	5,377,632	5,109,308	268,324
	Euro	Sell	3/18/20	5,681,385	5,624,578	(56,807)
	Japanese Yen	Sell	2/19/20	3,200,758	3,217,347	16,589
	Norwegian Krone	Buy	3/18/20	41,345	39,560	1,785
	Swedish Krona	Buy	3/18/20	59,940	59,029	911
WestPac Banking Corp.
	British Pound	Sell	3/18/20	7,810,817	7,741,927	(68,890)
	Euro	Buy	3/18/20	84,523	84,091	432
Unrealized appreciation						1,842,543
Unrealized (depreciation)						(1,680,974)
Total						$161,569

^*The exchange currency for all contracts listed is the United States Dollar.

International Equity Fund 19

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:
Australia	$—	$13,231,406		$—
Canada	15,197,701	—		—
China	8,952,281	—		—
Finland	11,836,885	—		—
France	124,822,400	—		—
Germany	38,064,895	—		43
Hong Kong	—	27,876,073		—
Ireland	24,195,165	—		—
Italy	4,515,562	—		—
Japan	—	175,460,452		—
Luxembourg	91,014	—		—
Netherlands	69,592,176	—		—
Norway	11,860,480	—		—
South Korea	—	18,120,279		—
Sweden	10,393,414	—		—
Switzerland	101,479,270	—		—
United Arab Emirates	5,496,062	—		—
United Kingdom	167,973,388	—		—
United States	28,373,059	—		—
Total common stocks	622,843,752	234,688,210		43

U.S. treasury obligations	—	177,954		—
Short-term investments	9,833,708	2,476,749		—
Totals by level	$632,677,460	$237,342,913		$43

			Valuation inputs
Other financial instruments:	Level 1	Level 2		Level 3
Forward currency contracts	$—	$161,569		$—
Totals by level	$—	$161,569		$—

At the start and close of the reporting period, Level 3 investments in securities represented less than 1% of the fund’s net assets and were not considered a significant portion of the fund’s portfolio.

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

20 International Equity Fund

Statement of assets and liabilities 12/31/19 (Unaudited)


ASSETS
Investment in securities, at value (Notes 1 and 8):
Unaffiliated issuers (identified cost $753,516,565)	$860,186,708
Affiliated issuers (identified cost $9,833,708) (Notes 1 and 5)	9,833,708
Foreign currency (cost $688,672) (Note 1)	672,358
Cash	412,391
Dividends, interest and other receivables	821,709
Foreign tax reclaim	1,742,694
Receivable for shares of the fund sold	456,109
Receivable for investments sold	18,074
Unrealized appreciation on forward currency contracts (Note 1)	1,842,543
Prepaid assets	60,840
Total assets	876,047,134

LIABILITIES
Payable for shares of the fund repurchased	766,531
Payable for compensation of Manager (Note 2)	472,149
Payable for custodian fees (Note 2)	112,611
Payable for investor servicing fees (Note 2)	319,967
Payable for Trustee compensation and expenses (Note 2)	725,534
Payable for administrative services (Note 2)	8,314
Payable for distribution fees (Note 2)	442,874
Unrealized depreciation on forward currency contracts (Note 1)	1,680,974
Collateral on certain derivative contracts, at value (Notes 1 and 8)	177,954
Other accrued expenses	157,421
Total liabilities	4,864,329

Net assets	$871,182,805

REPRESENTED BY
Paid-in capital (Unlimited shares authorized) (Notes 1 and 4)	$806,829,587
Total distributable earnings (Note 1)	64,353,218
Total — Representing net assets applicable to capital shares outstanding	$871,182,805

(Continued on next page)

International Equity Fund 21

Statement of assets and liabilities cont.


COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE
Net asset value and redemption price per class A share
($690,579,262 divided by 28,231,198 shares)	$24.46
Offering price per class A share (100/94.25 of $24.46)^*	$25.95
Net asset value and offering price per class B share ($6,374,586 divided by 274,188 shares)^**	$23.25
Net asset value and offering price per class C share ($19,114,641 divided by 803,751 shares)^**	$23.78
Net asset value, offering price and redemption price per class R share
($2,296,376 divided by 95,412 shares)	$24.07
Net asset value, offering price and redemption price per class R5 share
($612,468 divided by 24,584 shares)	$24.91
Net asset value, offering price and redemption price per class R6 share
($41,320,518 divided by 1,663,930 shares)	$24.83
Net asset value, offering price and redemption price per class Y share
($110,884,954 divided by 4,480,228 shares)	$24.75

^*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.

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

22 International Equity Fund

Statement of operations Six months ended 12/31/19 (Unaudited)


INVESTMENT INCOME
Dividends (net of foreign tax of $367,379)	$8,194,729
Interest (including interest income of $150,395 from investments in affiliated issuers) (Note 5)	164,945
Total investment income	8,359,674

EXPENSES
Compensation of Manager (Note 2)	2,696,183
Investor servicing fees (Note 2)	970,076
Custodian fees (Note 2)	40,963
Trustee compensation and expenses (Note 2)	1,734
Distribution fees (Note 2)	991,101
Administrative services (Note 2)	13,285
Other	69,749
Total expenses	4,783,091
Expense reduction (Note 2)	(4,378)
Net expenses	4,778,713

Net investment income	3,580,961

REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Securities from unaffiliated issuers (Notes 1 and 3)	12,443,046
Foreign currency transactions (Note 1)	(241,209)
Forward currency contracts (Note 1)	(371,890)
Total net realized gain	11,829,947
Change in net unrealized appreciation (depreciation) on:
Securities from unaffiliated issuers	47,163,382
Assets and liabilities in foreign currencies	(52,386)
Forward currency contracts	(1,049,354)
Total change in net unrealized appreciation	46,061,642

Net gain on investments	57,891,589

Net increase in net assets resulting from operations	$61,472,550

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

International Equity Fund 23

Statement of changes in net assets


DECREASE IN NET ASSETS	Six months ended 12/31/19*	Year ended 6/30/19
Operations
Net investment income	$3,580,961	$13,557,199
Net realized gain (loss) on investments
and foreign currency transactions	11,829,947	(23,345,367)
Change in net unrealized appreciation (depreciation)
of investments and assets and liabilities
in foreign currencies	46,061,642	(29,378,318)
Net increase (decrease) in net assets resulting
from operations	61,472,550	(39,166,486)
Distributions to shareholders (Note 1):
From ordinary income
Net investment income
Class A	(10,765,880)	(10,737,282)
Class B	(64,843)	(49,849)
Class C	(203,631)	(15,759)
Class M	—	(118,064)
Class R	(29,989)	(41,239)
Class R5	(9,960)	(37,977)
Class R6	(763,284)	(2,136,558)
Class Y	(1,892,631)	(3,164,037)
From return of capital
Class A	—	(987,371)
Class B	—	(9,362)
Class C	—	(21,738)
Class M	—	(15,849)
Class R	—	(4,796)
Class R5	—	(2,910)
Class R6	—	(155,680)
Class Y	—	(253,141)
From net realized long-term gain on investments
Class A	—	(19,647,216)
Class B	—	(186,290)
Class C	—	(432,555)
Class M	—	(315,365)
Class R	—	(95,425)
Class R5	—	(57,912)
Class R6	—	(3,097,803)
Class Y	—	(5,037,129)
Increase in capital from settlement payments	—	20,847
Increase (decrease) from capital share transactions
(Notes 4 and 9)	(108,932,294)	27,627,546
Total decrease in net assets	(61,189,962)	(58,139,400)

NET ASSETS
Beginning of period	932,372,767	990,512,167
End of period	$871,182,805	$932,372,767

^*Unaudited.

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

24 International Equity Fund

This page left blank intentionally.

International Equity Fund 25

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


	INVESTMENT OPERATIONS				LESS DISTRIBUTIONS							RATIOS AND SUPPLEMENTAL DATA
														Ratio of net
	Net asset	Net	Net realized			From							Ratio of	investment
	value,	investment	and unrealized	Total from	From	net realized			Non-recurring	Net asset	Total return	Net assets,	expenses	income (loss)
	beginning	income	gain (loss) on	investment	net investment	gain on	From	Total	reimburse-	value, end	at net asset	end of period	to average	to average	Portfolio
Period ended	of period	(loss)^a	investments	operations	income	investments	return of capital	distributions	ments	of period	value (%)^b	(in thousands)	net assets (%)^c	net assets (%)	turnover (%)
Class A
December 31, 2019^**	$23.07	.09	1.69	1.78	(.39)	—	—	(.39)	—	$24.46	7.71^*	$690,579	.58^*	.40^*	27^*
June 30, 2019	25.36	.35	(1.36)	(1.01)	(.44)	(.80)	(.04)	(1.28)	—^d	23.07	(3.04)	673,425	1.21^e	1.55	77
June 30, 2018	23.80	.30	1.35	1.65	(.09)	—	—	(.09)	—	25.36	6.90	663,773	1.22	1.15	61
June 30, 2017	20.49	.28	3.67	3.95	(.64)	—	—	(.64)	—	23.80	19.76	656,450	1.23	1.27	67
June 30, 2016	24.31	.32	(3.55)	(3.23)	(.59)	—	—	(.59)	—	20.49	(13.46)	647,864	1.27^h	1.47^h	77
June 30, 2015	25.33	.29	(1.09)	(.80)	(.22)	—	—	(.22)	—	24.31	(3.12)	834,109	1.26	1.19	69
Class B
December 31, 2019^**	$21.89	.01	1.59	1.60	(.24)	—	—	(.24)	—	$23.25	7.31^*	$6,375	.95^*	.04^*	27^*
June 30, 2019	24.05	.16	(1.27)	(1.11)	(.21)	(.80)	(.04)	(1.05)	—^d	21.89	(3.79)	7,041	1.96^e	.73	77
June 30, 2018	22.66	.08	1.31	1.39	—	—	—	—	—	24.05	6.13	6,606	1.97	.33	61
June 30, 2017	19.51	.10	3.51	3.61	(.46)	—	—	(.46)	—	22.66	18.84	8,315	1.98	.46	67
June 30, 2016	23.14	.14	(3.37)	(3.23)	(.40)	—	—	(.40)	—	19.51	(14.09)	10,121	2.02^h	.66^h	77
June 30, 2015	24.08	.09	(1.02)	(.93)	(.01)	—	—	(.01)	—	23.14	(3.86)	14,821	2.01	.39	69
Class C
December 31, 2019^**	$22.40	.01	1.63	1.64	(.26)	—	—	(.26)	—	$23.78	7.31^*	$19,115	.95^*	.04^*	27^*
June 30, 2019	24.35	.16	(1.24)	(1.08)	(.03)	(.80)	(.04)	(.87)	—^d	22.40	(3.78)	20,888	1.96^e	.72	77
June 30, 2018	22.94	.03^f	1.38	1.41	—	—	—	—	—	24.35	6.15	15,737	1.97	.12^f	61
June 30, 2017	19.77	.11	3.54	3.65	(.48)	—	—	(.48)	—	22.94	18.79	41,292	1.98	.51	67
June 30, 2016	23.47	.15	(3.42)	(3.27)	(.43)	—	—	(.43)	—	19.77	(14.08)	47,141	2.02^h	.72^h	77
June 30, 2015	24.45	.11	(1.05)	(.94)	(.04)	—	—	(.04)	—	23.47	(3.83)	59,397	2.01	.46	69
Class R
December 31, 2019^**	$22.66	.07	1.64	1.71	(.30)	—	—	(.30)	—	$24.07	7.57^*	$2,296	.70^*	.30^*	27^*
June 30, 2019	24.88	.28	(1.32)	(1.04)	(.34)	(.80)	(.04)	(1.18)	—^d	22.66	(3.26)	2,796	1.46^e	1.25	77
June 30, 2018	23.37	.22	1.34	1.56	(.05)	—	—	(.05)	—	24.88	6.66	3,446	1.47	.87	61
June 30, 2017	20.15	.23	3.59	3.82	(.60)	—	—	(.60)	—	23.37	19.39	3,671	1.48	1.08	67
June 30, 2016	23.87	.27	(3.49)	(3.22)	(.50)	—	—	(.50)	—	20.15	(13.66)	2,962	1.52^h	1.23^h	77
June 30, 2015	24.90	.23	(1.08)	(.85)	(.18)	—	—	(.18)	—	23.87	(3.37)	4,454	1.51	.99	69
Class R5
December 31, 2019^**	$23.48	.17	1.67	1.84	(.41)	—	—	(.41)	—	$24.91	7.86^*	$612	.41^*	.71^*	27^*
June 30, 2019	25.81	.45	(1.42)	(.97)	(.52)	(.80)	(.04)	(1.36)	—^d	23.48	(2.73)	1,641	.87^e	1.93	77
June 30, 2018	24.15	.41	1.36	1.77	(.11)	—	—	(.11)	—	25.81	7.30	1,946	.89	1.57	61
June 30, 2017	20.79	.23^g	3.85	4.08	(.72)	—	—	(.72)	—	24.15	20.14	1,452	.89	1.07^g	67
June 30, 2016	24.66	.40	(3.60)	(3.20)	(.67)	—	—	(.67)	—	20.79	(13.18)	16,211	.96^h	1.81^h	77
June 30, 2015	25.72	.44	(1.19)	(.75)	(.31)	—	—	(.31)	—	24.66	(2.84)	19,900	.96	1.79	69

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

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


26 International Equity Fund	International Equity Fund 27

Financial highlights cont.

INVESTMENT OPERATIONS

LESS DISTRIBUTIONS

RATIOS AND SUPPLEMENTAL DATA

Ratio of net

Net asset

Net

Net realized

From

Ratio of

investment

value,

investment

and unrealized

Total from

From

net realized

Non-recurring

Net asset

Total return

Net assets,

expenses

income (loss)

beginning

income

gain (loss) on

investment

net investment

gain on

From

Total

reimburse-

value, end

at net asset

end of period

to average

Portfolio

Period ended

of period

(loss)^a

investments

operations

income

investments

return of capital

distributions

ments

of period

value (%)^b

(in thousands)

net assets (%)^c

net assets (%)

turnover (%)

Class R6

December 31, 2019^**

$23.45

.16

1.69

1.85

(.47)

—

(.47)

—

$24.83

7.91^*

$41,321

.36^*

.68^*

27^*

June 30, 2019

25.78

.47

(1.41)

(.94)

(.55)

(.80)

(.04)

(1.39)

—^d

23.45

(2.60)

96,661

.77^e

2.01

June 30, 2018

24.19

.43

1.36

1.79

(.20)

—

(.20)

—

25.78

7.36

107,395

.79

1.64

June 30, 2017

20.82

.41

3.70

4.11

(.74)

—

(.74)

—

24.19

20.29

91,020

.79

1.83

June 30, 2016

24.69

.59

(3.77)

(3.18)

(.69)

—

(.69)

—

20.82

(13.08)

66,136

.86^h

2.75^h

June 30, 2015

25.74

.39

(1.12)

(.73)

(.32)

—

(.32)

—

24.69

(2.75)

17,443

.86

1.61

Class Y

December 31, 2019^**

$23.35

.13

1.70

1.83

(.43)

—

(.43)

—

$24.75

7.85^*

$110,885

.45^*

.54^*

27^*

June 30, 2019

25.67

.39

(1.37)

(.98)

(.50)

(.80)

(.04)

(1.34)

—^d

23.35

(2.81)

121,179

.96^e

1.66

June 30, 2018

24.09

.40

1.34

1.74

(.16)

—

(.16)

—

25.67

7.19

180,977

.97

1.53

June 30, 2017

20.74

.36

3.69

4.05

(.70)

—

(.70)

—

24.09

20.07

120,283

.98

1.61

June 30, 2016

24.61

.40

(3.60)

(3.20)

(.67)

—

(.67)

—

20.74

(13.23)

93,588

1.02^h

1.79^h

June 30, 2015

25.66

.36

(1.12)

(.76)

(.29)

—

(.29)

—

24.61

(2.91)

92,613

1.01

1.49

^*Not annualized.

^**Unaudited.

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

^bTotal return assumes dividend reinvestment and does not reflect the effect of sales charges.

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

^dReflects a non-recurring reimbursement pursuant to a settlement between the Securities and Exchange Commission (the SEC) and Canadian Imperial Holdings, Inc. and CIBC World Markets Corp., which amounted to less than $0.01 per share outstanding on March 6, 2019.

^eIncludes one time merger costs of 0.03%.

^fThe net investment income ratio and per share amount shown for the period ended June 30, 2018 may not correspond with the expected class specific differences for the period due to the timing of redemptions out of the class.

^gThe net investment income ratio and per share amount shown for the period ended June 30, 2017 may not correspond with the expected class specific differences for the period due to the timing of redemptions out of the class.

^hReflects a voluntary waiver of certain fund expenses in effect during the period. As a result of such waivers, the expenses of each class reflect a reduction of less than 0.01% as a percentage of average net assets.

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


28 International Equity Fund	International Equity Fund 29

Notes to financial statements 12/31/19 (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 July 1, 2019 through December 31, 2019.

Putnam International Equity 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 capital appreciation. The fund invests mainly in common stocks (growth or value stocks or both) of large and midsize companies outside the United States that Putnam Management believes have favorable investment potential. For example, the fund may purchase stocks of companies with stock prices that reflect a value lower than that which Putnam Management places on the company. Under normal circumstances, Putnam Management invests at least 80% of the fund’s net assets in equity investments. This policy may be changed only after 60 days’ notice to shareholders. Putnam Management may also consider other factors that it believes will cause the stock price to rise. The fund invests mainly in developed countries, but may invest in emerging markets. 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 investments. Putnam Management may also use derivatives, such as futures, options, certain foreign currency transactions, warrants and swap contracts, for both hedging and non-hedging purposes.

The fund offers class A, class B, class C, class R, class R5, class R6 and class Y shares. Effective November 25, 2019, all class M shares were converted to class A shares and are no longer available for purchase. 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. Class A shares are sold with a maximum front-end sales charge of 5.75%. Class A shares generally are not subject to a contingent deferred sales charge, and class R, class R5, class R6 and class Y shares are not subject to a contingent deferred sales charge. Prior to November 25, 2019, class M shares were sold with a maximum front-end-sales charge of 3.50% and were not subject to a contingent deferred sales charge. Class B shares, which convert to class A shares after approximately eight years, are not subject to a front-end sales charge and are subject to a contingent deferred sales charge if those shares are redeemed within six years of purchase. Class C shares are subject to a one-year 1.00% contingent deferred sales charge and generally convert to class A shares after approximately ten years. Class R shares, which are not available to all investors, are sold at net asset value. The expenses for class A, class B, class C and class R shares may differ based on the distribution fee of each class, which is identified in Note 2. Class R5, class R6 and class Y shares, which are sold at net asset value, are generally subject to the same expenses as class A, class B, class C and class R shares, but do not bear a distribution fee, and in the case of class R5 and class R6 shares, bear a lower investor servicing fee, which is identified in Note 2. Class R5, class R6 and class Y shares are 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.

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

30 International Equity Fund

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 multiples and resale restrictions. These securities are classified as Level 2 or as Level 3 depending on the priority of the significant inputs.

To assess the continuing appropriateness of fair valuations, the Valuation Committee reviews and affirms the reasonableness of such valuations on a regular basis after considering all relevant information that is reasonably available. Such valuations and procedures are reviewed periodically by the Trustees. The fair value of securities is generally determined as the amount that the fund could reasonably expect to realize from an orderly disposition

International Equity Fund 31

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 and including amortization and accretion of premiums and discounts on debt securities, 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.

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.

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.

Master agreements The fund is a party to ISDA (International Swaps and Derivatives Association, Inc.) Master Agreements (Master Agreements) with certain counterparties that govern OTC derivative and foreign exchange contracts entered into from time to time. The Master Agreements may contain provisions regarding, among other things, the parties’ general obligations, representations, agreements, collateral requirements, events of default and early termination. With respect to certain counterparties, in accordance with the terms of the Master Agreements, collateral posted to the fund is held in a segregated account by the fund’s custodian and, with respect to those amounts which can be sold or repledged, is presented in the fund’s portfolio. Collateral posted to the fund which cannot be sold or repledged totaled $170,692 at the close of the reporting period.

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

Termination events applicable to the fund may occur upon a decline in the fund’s net assets below a specified threshold over a certain period of time. Termination events applicable to counterparties may occur upon a decline in the counterparty’s long-term and short-term credit ratings below a specified level. In each case, upon occurrence, the other party may elect to terminate early and cause settlement of all derivative and foreign

32 International Equity Fund

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 $183,541 on open derivative contracts subject to the Master Agreements. Collateral posted by the fund at period end for these agreements totaled $266,955 and may include amounts related to unsettled agreements.

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 $317.5 million 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 LIBOR for the committed line of credit and the Federal Funds rate plus 1.30% 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.

Under the Regulated Investment Company Modernization Act of 2010, the fund will be permitted to carry forward capital losses incurred for an unlimited period and the carry forwards will retain their character as either short-term or long-term capital losses. At June 30, 2019, the fund had the following capital loss carryovers available, to the extent allowed by the Code, to offset future net capital gain, if any:


	Loss carryover
Short-term	Long-term	Total
$40,302,835	$1,501,835	$41,804,670

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 $764,902,165, resulting in gross unrealized appreciation and depreciation of $113,561,668 and $8,281,848, respectively, or net unrealized appreciation of $105,279,820.

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

International Equity Fund 33

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 (base 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:


0.850%	of the first $5 billion,	0.650%	of the next $50 billion,
0.800%	of the next $5 billion,	0.630%	of the next $50 billion,
0.750%	of the next $10 billion,	0.620%	of the next $100 billion and
0.700%	of the next $10 billion,	0.615%	of any excess thereafter.

In addition, the monthly management fee consists of the monthly base fee plus or minus a performance adjustment for the month. The performance adjustment is determined based on performance over the thirty-six month period then ended. Each month, the performance adjustment is calculated by multiplying the performance adjustment rate and the fund’s average net assets over the performance period and dividing the result by twelve. The resulting dollar amount is added to, or subtracted from the base fee for that month. The performance adjustment rate is equal to 0.03 multiplied by the difference between the fund’s annualized performance (measured by the fund’s class A shares) and the annualized performance of the MSCI EAFE Index (Net Dividends) measured over the performance period. The maximum annualized performance adjustment rate is +/- 0.15%. The monthly base fee is determined based on the fund’s average net assets for the month, while the performance adjustment is determined based on the fund’s average net assets over the thirty-six month performance period. This means it is possible that, if the fund underperforms significantly over the performance period, and the fund’s assets have declined significantly over that period, the negative performance adjustment may exceed the base fee. In this event, Putnam Management would make a payment to the fund.

In connection with the merger of Putnam Europe Equity Fund (“acquired fund”) into the fund on June 24, 2019, the management contract was amended such that the combined fund’s performance adjustment is calculated based on the combined assets of the fund and the acquired fund for any portion of a performance period that is prior to the merger, unless the use of the combined assets results in a fee payable by the fund under the amended management contract that is higher than the management fee that would have been paid under the fund’s current management contract. Under those circumstances, Putnam Management has agreed to reduce its management fee to reflect the lower amount that would have been payable under the fund’s current fee schedule, which would only take into account the assets of the fund for the period prior to the closing of the mergers. As a result of these management contract changes, the fund’s shareholders may pay a lower management fee, but would never pay a higher management fee, under the amended management contract than they would have paid under the fund’s current management contract.

Because the performance adjustment is based on the fund’s performance relative to its applicable benchmark index, and not its absolute performance, the performance adjustment could increase Putnam Management’s fee even if the fund’s shares lose value during the performance period provided that the fund outperformed its benchmark index, and could decrease Putnam Management’s fee even if the fund’s shares increase in value during the performance period provided that the fund underperformed its benchmark index.

For the reporting period, the management fee represented an effective rate (excluding the impact of any expense waiver in effect) of 0.316% of the fund’s average net assets, which included an effective base fee of 0.346% and a decrease of 0.030% ($253,545) based on performance.

Putnam Management has contractually agreed, through October 30, 2020, 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

34 International Equity Fund

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. Putnam Management pays a quarterly sub-management fee to PIL for its services at an annual rate of 0.35% of the average net assets of the portion of the fund managed by PIL.

The Putnam Advisory Company, LLC (PAC), an affiliate of Putnam Management, is authorized by the Trustees to manage a separate portion of the assets of the fund, as designated from time to time by Putnam Management or PIL. PAC did not manage any portion of the assets of the fund during the reporting period. If Putnam Management or PIL were to engage the services of PAC, Putnam Management or PIL, as applicable, would pay a quarterly sub-advisory fee to PAC for its services at the annual rate of 0.35% of the average net assets of the portion of the fund’s assets for which PAC is engaged as sub-adviser.

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. Effective November 25, 2019, the fund converted all of its class M shares to class A shares and class M shares were no longer able to be purchased.

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	$785,013	Class R5	651
Class B	7,727	Class R6	12,414
Class C	23,152	Class Y	129,935
Class M	8,252	Total	$970,076
Class R	2,932

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. The fund also reduced expenses through brokerage/service arrangements. For the reporting period, the fund’s expenses were reduced by $4,378 under the expense offset arrangements and by no monies under the brokerage/service arrangements.

Each Independent Trustee of the fund receives an annual Trustee fee, of which $567, 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

International Equity Fund 35

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%	$828,925
Class B	1.00%	1.00%	32,564
Class C	1.00%	1.00%	97,436
ClassM ^*	1.00%	0.75%	25,970
Class R	1.00%	0.50%	6,206
Total			$991,101

^*Effective November 25, 2019, the fund converted all of its class M shares to class A shares and class M shares were no longer able to be purchased.

For the reporting period, Putnam Retail Management Limited Partnership, acting as underwriter, received net commissions of $13,022 and $17 from the sale of class A and class M shares, respectively, and received $2,885 and $363 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 $1 on class A redemptions.

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 (Long-term)	$231,413,257	$354,154,598
U.S. government securities (Long-term)	—	—
Total	$231,413,257	$354,154,598

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.

36 International Equity Fund

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 12/31/19		YEAR ENDED 6/30/19
Class A	Shares	Amount	Shares	Amount
Shares sold	769,923	$18,134,113	775,313	$17,439,750
Shares issued in connection with
reinvestment of distributions	418,453	10,164,257	1,527,204	29,490,324
Shares issued in connection with the
merger of Putnam Europe Equity Fund	—	—	4,760,840	109,400,759
	1,188,376	28,298,370	7,063,357	156,330,833
Shares repurchased	(2,148,530)	(49,769,656)	(4,043,089)	(91,427,651)
Net increase (decrease)	(960,154)	$(21,471,286)	3,020,268	$64,903,182

	SIX MONTHS ENDED 12/31/19		YEAR ENDED 6/30/19
Class B	Shares	Amount	Shares	Amount
Shares sold	1,992	$43,705	5,214	$109,291
Shares issued in connection with
reinvestment of distributions	2,634	60,826	12,888	237,018
Shares issued in connection with the
merger of Putnam Europe Equity Fund	—	—	113,672	2,478,764
	4,626	104,531	131,774	2,825,073
Shares repurchased	(52,136)	(1,136,280)	(84,786)	(1,841,330)
Net increase (decrease)	(47,510)	$(1,031,749)	46,988	$983,743

	SIX MONTHS ENDED 12/31/19		YEAR ENDED 6/30/19
Class C	Shares	Amount	Shares	Amount
Shares sold	13,099	$293,918	54,870	$1,199,367
Shares issued in connection with
reinvestment of distributions	8,253	194,926	24,068	452,953
Shares issued in connection with the
merger of Putnam Europe Equity Fund	—	—	432,503	9,651,813
	21,352	488,844	511,441	11,304,133
Shares repurchased	(150,102)	(3,375,362)	(225,213)	(4,931,420)
Net increase (decrease)	(128,750)	$(2,886,518)	286,228	$6,372,713

	SIX MONTHS ENDED 12/31/19^*		YEAR ENDED 6/30/19
Class M	Shares	Amount	Shares	Amount
Shares sold	4,378	$97,737	20,479	$443,121
Shares issued in connection with
reinvestment of distributions	—	—	23,220	436,540
	4,378	97,737	43,699	879,661
Shares repurchased	(394,524)	(9,121,318)	(85,443)	(1,855,814)
Net decrease	(390,146)	$(9,023,581)	(41,744)	$(976,153)

International Equity Fund 37


	SIX MONTHS ENDED 12/31/19		YEAR ENDED 6/30/19
Class R	Shares	Amount	Shares	Amount
Shares sold	10,656	$242,313	21,541	$470,562
Shares issued in connection with
reinvestment of distributions	1,047	25,033	5,316	100,950
Shares issued in connection with the
merger of Putnam Europe Equity Fund	—	—	8,881	200,434
	11,703	267,346	35,738	771,946
Shares repurchased	(39,714)	(897,837)	(50,788)	(1,133,955)
Net decrease	(28,011)	$(630,491)	(15,050)	$(362,009)

	SIX MONTHS ENDED 12/31/19		YEAR ENDED 6/30/19
Class R5	Shares	Amount	Shares	Amount
Shares sold	530	$12,445	4,504	$102,740
Shares issued in connection with
reinvestment of distributions	403	9,960	5,036	98,799
	933	22,405	9,540	201,539
Shares repurchased	(46,263)	(1,045,785)	(15,017)	(344,525)
Net decrease	(45,330)	$(1,023,380)	(5,477)	$(142,986)

	SIX MONTHS ENDED 12/31/19		YEAR ENDED 6/30/19
Class R6	Shares	Amount	Shares	Amount
Shares sold	152,631	$3,593,437	715,430	$16,610,011
Shares issued in connection with
reinvestment of distributions	30,400	749,653	275,194	5,388,300
Shares issued in connection with the
merger of Putnam Europe Equity Fund	—	—	145,730	3,403,291
	183,031	4,343,090	1,136,354	25,401,602
Shares repurchased	(2,641,634)	(60,743,472)	(1,179,188)	(27,427,356)
Net decrease	(2,458,603)	$(56,400,382)	(42,834)	$(2,025,754)

	SIX MONTHS ENDED 12/31/19		YEAR ENDED 6/30/19
Class Y	Shares	Amount	Shares	Amount
Shares sold	388,457	$9,150,933	1,691,837	$39,005,798
Shares issued in connection with
reinvestment of distributions	71,152	1,748,914	402,506	7,856,912
Shares issued in connection with the
merger of Putnam Europe Equity Fund	—	—	943,384	21,939,143
	459,609	10,899,847	3,037,727	68,801,853
Shares repurchased	(1,169,500)	(27,364,754)	(4,898,323)	(109,927,043)
Net decrease	(709,891)	$(16,464,907)	(1,860,596)	$(41,125,190)

^*Effective November 25, 2019, the fund converted all of its class M shares to class A shares and class M shares were no longer able to be purchased.

38 International Equity 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 6/30/19	cost	proceeds	income	of 12/31/19
Short-term investments
Putnam Short Term
Investment Fund*	$3,901,482	$146,791,728	$140,859,502	$150,395	$9,833,708
Total Short-term
investments	$3,901,482	$146,791,728	$140,859,502	$150,395	$9,833,708

^*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.

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:


Forward currency contracts (contract amount)	$378,900,000

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	Receivables	$1,842,543	Payables	$1,680,974
Total		$1,842,543		$1,680,974

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	Forward currency
hedging instruments under ASC 815	contracts	Total
Foreign exchange contracts	$(371,890)	$(371,890)
Total	$(371,890)	$(371,890)

International Equity Fund 39


Change in unrealized appreciation or (depreciation) on derivatives recognized in net gain or (loss)
on investments
Derivatives not accounted for as	Forward currency
hedging instruments under ASC 815	contracts	Total
Foreign exchange contracts	$(1,049,354)	$(1,049,354)
Total	$(1,049,354)	$(1,049,354)

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.	Goldman Sachs International	HSBC Bank USA, National Association	JPMorgan Chase Bank N.A.	NatWest Markets PLC	State Street Bank and Trust Co.	Toronto- Dominion Bank	UBS AG	WestPac Banking Corp.	Total
Assets:
Forward currency contracts^#	$97,959	$69,987	$387,506	$2,505	$275,404	$646,848	$3,005	$28,659	$42,629	$287,609	$432	$1,842,543
Total Assets	$97,959	$69,987	$387,506	$2,505	$275,404	$646,848	$3,005	$28,659	$42,629	$287,609	$432	$1,842,543
Liabilities:
Forward currency contracts^#	185,695	51,169	388,694	—	198,236	634,036	—	39,172	58,275	56,807	68,890	1,680,974
Total Liabilities	$185,695	$51,169	$388,694	$—	$198,236	$634,036	$—	$39,172	$58,275	$56,807	$68,890	$1,680,974
Total Financial and Derivative
Net Assets	$(87,736)	$18,818	$(1,188)	$2,505	$77,168	$12,812	$3,005	$(10,513)	$(15,646)	$230,802	$(68,458)	$161,569
Total collateral received
(pledged)^†##	$(87,736)	$18,818	$—	$—	$77,168	$—	$—	$(10,513)	$—	$170,692	$—
Net amount	$—	$—	$(1,188)	$2,505	$—	$12,812	$3,005	$—	$(15,646)	$60,110	$(68,458)
Controlled collateral received
(including TBA commitments)^**	$—	$97,595	$—	$—	$80,359	$—	$—	$—	$—	$—	$—	$177,954
Uncontrolled collateral received	$—	$—	$—	$—	$—	$—	$—	$—	$—	$170,692	$—	$170,692
Collateral (pledged) (including TBA
commitments)^**	$(146,427)	$—	$—	$—	$—	$—	$—	$(120,528)	$—	$—	$—	$(266,955)

^**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.


40 International Equity Fund	International Equity Fund 41

Note 9: Acquisition of Putnam Europe Equity Fund

On June 24, 2019, the fund issued 4,760,840, 113,672, 432,503, 8,881, 145,730 and 943,384 class A, class B, class C, class R, class R6 and class Y shares, respectively, for 4,299,930, 101,951, 388,772, 7,953, 133,310 and 860,228 class A, class B, class C, class R, class R6 and class Y shares of Putnam Europe Equity Fund to acquire that fund’s net assets in a tax-free exchange approved by the shareholders. The purpose of the transaction was to combine two Putnam funds with substantially similar investment objectives and investment strategies into a single Putnam fund with a larger asset base and therefore potentially lower expenses for fund shareholders. The investment portfolio of Putnam Europe Equity Fund, with a fair value of $114,321,793 and an identified cost of $108,885,656 at June 21, 2019, was the principal asset acquired by the fund. The net assets of the fund and Putnam Europe Equity Fund on June 21, 2019, were $784,077,607 and $147,074,204, respectively. On June 21, 2019, Putnam Europe Equity Fund had undistributed net investment (loss) of $2,422,503, accumulated net realized (loss) of $18,863,089 and unrealized appreciation of $5,430,551. The aggregate net assets of the fund immediately following the acquisition were $931,151,811.

Assuming the acquisition had been completed on July 1, 2018, the fund’s pro forma results of operations for the reporting period are as follows (unaudited):


Net investment Income	$16,492,536
Net (loss) on investments	$(61,325,391)
Net (decrease) in net assets resulting from operations	$(44,832,855)

Because the combined investment portfolios have been managed as a single portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of Putnam Europe Equity Fund that have been included in the fund’s Statement of operations for the current fiscal period.

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

International Equity Fund 43


Absolute Return	Asset Allocation
Fixed Income Absolute Return Fund	Dynamic Risk Allocation Fund
Multi-Asset Absolute Return Fund	George Putnam Balanced Fund

Putnam PanAgora^**	Dynamic Asset Allocation Balanced Fund
Putnam PanAgora Managed Futures Strategy	Dynamic Asset Allocation Conservative Fund
Putnam PanAgora Market Neutral Fund	Dynamic Asset Allocation Growth Fund
Putnam PanAgora Risk Parity Fund
	Retirement Income Fund Lifestyle 1

	RetirementReady^® 2060 Fund
	RetirementReady^® 2055 Fund
	RetirementReady^® 2050 Fund
	RetirementReady^® 2045 Fund
	RetirementReady^® 2040 Fund
	RetirementReady^® 2035 Fund
	RetirementReady^® 2030 Fund
	RetirementReady^® 2025 Fund
	RetirementReady^® 2020 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.

^**Sub-advised by PanAgora Asset Management.

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

44 International Equity Fund

Fund information

Founded over 80 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, asset allocation, absolute return, and global sector categories.


Investment Manager	Trustees	Michael J. Higgins
Putnam Investment	Kenneth R. Leibler, Chair	Vice President, Treasurer,
Management, LLC	Liaquat Ahamed	and Clerk
100 Federal Street	Ravi Akhoury
Boston, MA 02110	Barbara M. Baumann	Jonathan S. Horwitz
	Katinka Domotorffy	Executive Vice President,
Investment Sub-Advisors	Catharine Bond Hill	Principal Executive Officer,
Putnam Investments Limited	Paul L. Joskow	and Compliance Liaison
16 St James’s Street	Robert E. Patterson
London, England SW1A 1ER	George Putnam, III	Richard T. Kircher
	Robert L. Reynolds	Vice President and BSA
The Putnam Advisory Company, LLC	Manoj P. Singh	Compliance Officer
100 Federal Street
Boston, MA 02110	Officers	Susan G. Malloy
	Robert L. Reynolds	Vice President and
Marketing Services	President	Assistant Treasurer
Putnam Retail Management
100 Federal Street	Robert T. Burns	Denere P. Poulack
Boston, MA 02110	Vice President and	Assistant Vice President, Assistant
	Chief Legal Officer	Clerk, and Assistant Treasurer
Custodian
State Street Bank	James F. Clark	Janet C. Smith
and Trust Company	Vice President, Chief Compliance	Vice President,
	Officer, and Chief Risk Officer	Principal Financial Officer,
Legal Counsel		Principal Accounting Officer,
Ropes & Gray LLP	Nancy E. Florek	and Assistant Treasurer
	Vice President, Director of
	Proxy Voting and Corporate	Mark C. Trenchard
	Governance, Assistant Clerk,	Vice President
	and Assistant Treasurer

This report is for the information of shareholders of Putnam International Equity 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 180 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.


	Putnam Funds Trust


	By (Signature and Title):


	/s/ Janet C. Smith Janet C. Smith Principal Accounting Officer


	Date: February 28, 2020


	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: February 28, 2020


	By (Signature and Title):


	/s/ Janet C. Smith Janet C. Smith Principal Financial Officer


	Date: February 28, 2020


	Certifications
	I, Jonathan S. Horwitz, the Principal Executive Officer of the funds listed on Attachment A, certify that:
	1. I have reviewed each report on Form N-CSR of the funds listed on Attachment A:
	2. Based on my knowledge, each report does not contain any untrue statements of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by each report;
	3. Based on my knowledge, the financial statements, and other financial information included in each report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in each report;
	4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
	a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which each report is being prepared;
	b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 180 days prior to the filing date of each report based on such evaluation; and
	d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
	5. The registrant's other certifying officer and I have disclosed to each registrant's auditors and the audit committee of each registrant's board of directors (or persons performing the equivalent functions):
	a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect each registrant's ability to record, process, summarize, and report financial information; and
	b) any fraud, whether or not material, that involves management or other employees who have a significant role in each registrant's internal control over financial reporting.
	Date: February 28, 2020
	/s/ Jonathan S. Horwitz
	_______________________
	Jonathan S. Horwitz
	Principal Executive Officer
	Certifications
	I, Janet C. Smith, the Principal Financial Officer of the funds listed on Attachment A, certify that:
	1. I have reviewed each report on Form N-CSR of the funds listed on Attachment A:
	2. Based on my knowledge, each report does not contain any untrue statements of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by each report;
	3. Based on my knowledge, the financial statements, and other financial information included in each report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in each report;
	4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
	a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which each report is being prepared;
	b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 180 days prior to the filing date of each report based on such evaluation; and
	d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
	5. The registrant's other certifying officer and I have disclosed to each registrant's auditors and the audit committee of each registrant's board of directors (or persons performing the equivalent functions):
	a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect each registrant's ability to record, process, summarize, and report financial information; and
	b) any fraud, whether or not material, that involves management or other employees who have a significant role in each registrant's internal control over financial reporting.
	Date: February 28, 2020
	/s/ Janet C. Smith
	_______________________
	Janet C. Smith
	Principal Financial Officer
	Attachment A
	Period (s) ended December 31, 2019
	Putnam International Equity Fund
	Putnam International Value Fund
	Putnam Small Cap Growth Fund
	Putnam Sustainable Leaders Fund
	Putnam VT Diversified Income Fund
	Putnam VT Equity Income Fund
	Putnam VT George Putnam Balanced Fund
	Putnam VT Global Asset Allocation Fund
	Putnam VT Global Equity Fund
	Putnam VT Global Health Care Fund
	Putnam VT Government Money Market Fund
	Putnam VT Growth Opportunities Fund
	Putnam VT High Yield Fund
	Putnam VT Income Fund
	Putnam VT International Equity Fund
	Putnam VT International Growth Fund
	Putnam VT International Value Fund
	Putnam VT Mortgage Securities Fund
	Putnam VT Multi-Asset Absolute Return Fund
	Putnam VT Multi-Cap Core Fund
	Putnam VT Research Fund
	Putnam VT Small Cap Growth Fund
	Putnam VT Small Cap Value Fund
	Putnam VT Sustainable Future Fund
	Putnam VT Sustainable Leaders Fund


	Section 906 Certifications
	I, Jonathan S. Horwitz, the Principal Executive Officer of the Funds listed on Attachment A, certify that, to my knowledge:
	1. The form N-CSR of the Funds listed on Attachment A for the period ended December 31, 2019 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
	2. The information contained in the Form N-CSR of the Funds listed on Attachment A for the period ended December 31, 2019 fairly presents, in all material respects, the financial condition and results of operations of the Funds listed on Attachment A.
	Date: February 28, 2020
	/s/ Jonathan S. Horwitz
	______________________
	Jonathan S. Horwitz
	Principal Executive Officer
	Section 906 Certifications
	I, Janet C. Smith, the Principal Financial Officer of the Funds listed on Attachment A, certify that, to my knowledge:
	1. The form N-CSR of the Funds listed on Attachment A for the period ended December 31, 2019 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
	2. The information contained in the Form N-CSR of the Funds listed on Attachment A for the period ended December 31, 2019 fairly presents, in all material respects, the financial condition and results of operations of the Funds listed on Attachment A.
	Date: February 28, 2020
	/s/ Janet C. Smith
	______________________
	Janet C. Smith
	Principal Financial Officer
	Attachment A
	Period (s) ended December 31, 2019
	Putnam International Equity Fund
	Putnam International Value Fund
	Putnam Small Cap Growth Fund
	Putnam Sustainable Leaders Fund
	Putnam VT Diversified Income Fund
	Putnam VT Equity Income Fund
	Putnam VT George Putnam Balanced Fund
	Putnam VT Global Asset Allocation Fund
	Putnam VT Global Equity Fund
	Putnam VT Global Health Care Fund
	Putnam VT Government Money Market Fund
	Putnam VT Growth Opportunities Fund
	Putnam VT High Yield Fund
	Putnam VT Income Fund
	Putnam VT International Equity Fund
	Putnam VT International Growth Fund
	Putnam VT International Value Fund
	Putnam VT Mortgage Securities Fund
	Putnam VT Multi-Asset Absolute Return Fund
	Putnam VT Multi-Cap Core Fund
	Putnam VT Research Fund
	Putnam VT Small Cap Growth Fund
	Putnam VT Small Cap Value Fund
	Putnam VT Sustainable Future Fund
	Putnam VT Sustainable Leaders Fund