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2. What isa bond?A loan to a corporationor government. Investors lend the money Repaid in specified period of time (up to 30 years) Repaid with specified amount of interest income

3. Risk versus return Amount of income reflects creditworthiness of issuer

4. Taxable or tax free?

5. Consider thetax-equivalent yield Municipal bond yield For illustrative purposes only. * Includes 3.8% Medicare surtax effective 1/1/13

6. Consider thetax-equivalent yield Municipal bond yield An investor subject to a 36.8% tax rate with a 5% tax-free yield will get the equivalent of a 7.91% after-tax yield. For illustrative purposes only. * Includes 3.8% Medicare surtax effective 1/1/13

7. Calculating tax-equivalent yield Tax-free yield 100 – your tax rate Tax-equivalent yield = 5 100 – 36.8 7.91% = For illustrative purposes only.

8. What benefits canbonds provide? Interest income during the life of the bond Potential for capital appreciation if interestrates decline and/or market dynamics change Potential to reduce overall volatility of portfolio composed primarily of equities

9. One predictable thing about the market — it is unpredictable Changes in market performance, 1992–2014 Highestreturn Lowestreturn Past performance does not indicate future results.Indexes are unmanaged and show broad market performance. It is not possible to invest directly in an index.

10. When stocks get shaky,bonds can add stability Annual market results (%) Data is as of 12/31/14 and is historical. Past performance does not guarantee future results. Stocks are represented by the S&P 500 Index, which is an unmanaged index of common stock performance. Bonds are represented by the Barclays Aggregate Bond Index, an unmanaged index of U.S. investment-grade fixed-income securities. It is not possible to invest directly in an index.

11. Active rebalancing Without rebalancing: The market controls asset allocation and investors don’t systematically rotate out of less attractive and into more attractive investments 60% 72% Out-of-balanceportfolio 40% 28% Balancedportfolio Stocks are represented by the S&P 500 Index and bonds by the Barclays U.S. Aggregate Bond Index. Indexes are unmanaged and represent broad market performance. It is not possible to invest directly in an index. Data is historical. Past performance is not a guarantee of future results. Diversification and rebalancing will not necessarily prevent you from losing money; however, they may reduce volatility and potentially limit downside losses.

12. Active rebalancing Without rebalancing: The market controls asset allocation and investors don’t systematically rotate out of less attractive and into more attractive investments 60% 60% 40% 40% Balancedportfolio Balancedportfolio Stocks are represented by the S&P 500 Index and bonds by the Barclays U.S. Aggregate Bond Index. Indexes are unmanaged and represent broad market performance. It is not possible to invest directly in an index. Data is historical. Past performance is not a guarantee of future results. Diversification and rebalancing will not necessarily prevent you from losing money; however, they may reduce volatility and potentially limit downside losses.

13. A BALANCED APPROACH A WORLD OF INVESTING A COMMITMENT TO EXCELLENCE EO001 277723 5/13 | 14

14. Why Putnam for fixed income? Over 75 years of fixed-income investing experience Manages $55.7 billion in fixed-income securities More than 80 investment professionals organized into specialist teams As of 6/30/14.

15. Putnam fixed-income funds cover all bond sectors

16. Building a solid financialfoundation with bonds What is a bond? Taxable or tax free: Which is right for you? When stocks are shaky, bonds often are stable Adding bonds reduces volatility Work with a trusted financial advisor To select the right investments To ensure that accounts are set up with your futurein mind