Putnam launches short-term, intermediate-term municipal funds

By Toni Weeks

San Luis Obispo, Calif., March 18 - Putnam Funds Trust announced in an N-1A filing with the Securities and Exchange Commission that it has launched two new municipal funds.

The Putnam Short-Term Municipal Income Fund and the Putnam Intermediate-Term Municipal Income Fund both seek as high a level of current income exempt from federal income tax consistent with preservation of capital.

The short-term fund invests mainly in bonds that pay interest exempt from federal income tax, but may be subject to federal alternative minimum tax. The bonds are primarily investment grade in quality and have short-term maturities of three years or less. The strategy is the same for the intermediate-term fund, but that fund targets bonds with intermediate-term maturities of three to 10 years.

Susan McCormack, Thalia Meehan and Paul Drury are the portfolio managers for both funds.

Both funds launched with class A, class B, class C, class M and class Y shares. Ticker symbols for the short-term fund are PSMEX, PSMFX, PSMTX, PSMMX and PSMYX, respectively. Those of the intermediate-term fund are PIMEX, PIMBX, PIMFX, PIMMX and PIMYX, respectively.

Shareholder fees for the short-term fund are 1% for class A and 0.75% for class M shares. Class A, B and C shares all have a 1% deferred sales load, with the class B fee eliminated after two years and that of class C shares after one year. Class M shares have a deferred sales load of 0.3%.

Shareholder fees for the intermediate fund include a 4% and 3.25% maximum sales charge for class A and class M shares, respectively. Class A and class C shares will incur a 1% maximum deferred sales charge, with the fee for class C shares eliminated after one year, while class B's 5% deferred sales charge will be phased out over six years.

Management fees for the short-term fund are 0.35%. Including these, and taking into account a fee waiver agreement with the adviser, total annual fees are 0.8% for class A, 1% for class B, 1.55% for class C, 0.85% for class M and 0.55% for class Y shares.

Management fees for the intermediate-term fund are 0.44%. Total annual fees are expected to be 0.85% for class A, 1.45% for class B, 1.6% for class C, 1.1% for class M and 0.6% for class Y shares.

Boston-based Putnam Investment Management, LLC will act as the funds' investment adviser.

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