# EDGAR Filing Document

**Accession Number:** 0001845809
**File Stem:** 0001193125-25-187238
**Filing Date:** 2025-8
**Character Count:** 3801375
**Document Hash:** 2c1d20bceded77520939921de914e909
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193125-25-187238.hdr.sgml**: 20250825

**ACCESSION NUMBER**: 0001193125-25-187238

**CONFORMED SUBMISSION TYPE**: 485BPOS

**PUBLIC DOCUMENT COUNT**: 126

**FILED AS OF DATE**: 20250825

**DATE AS OF CHANGE**: 20250825

**EFFECTIVENESS DATE**: 20250901

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Putnam ETF Trust
- **CENTRAL INDEX KEY:** 0001845809

**ORGANIZATION NAME:**
- **EIN:** 000000000
- **STATE OF INCORPORATION:** DE

**FILING VALUES:**
- **FORM TYPE:** 485BPOS
- **SEC ACT:** 1940 Act
- **SEC FILE NUMBER:** 811-23643
- **FILM NUMBER:** 251248866

**BUSINESS ADDRESS:**
- **STREET 1:** 100 FEDERAL STREET
- **CITY:** BOSTON
- **STATE:** MA
- **ZIP:** 02111
- **BUSINESS PHONE:** 6177601060

**MAIL ADDRESS:**
- **STREET 1:** 100 FEDERAL STREET
- **CITY:** BOSTON
- **STATE:** MA
- **ZIP:** 02111
**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Putnam ETF Trust
- **CENTRAL INDEX KEY:** 0001845809

**ORGANIZATION NAME:**
- **EIN:** 000000000
- **STATE OF INCORPORATION:** DE

**FILING VALUES:**
- **FORM TYPE:** 485BPOS
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-253222
- **FILM NUMBER:** 251248865

**BUSINESS ADDRESS:**
- **STREET 1:** 100 FEDERAL STREET
- **CITY:** BOSTON
- **STATE:** MA
- **ZIP:** 02111
- **BUSINESS PHONE:** 6177601060

**MAIL ADDRESS:**
- **STREET 1:** 100 FEDERAL STREET
- **CITY:** BOSTON
- **STATE:** MA
- **ZIP:** 02111

## Series and Classes Contracts Data

### Putnam BDC Income ETF (Series ID: S000077137)

| Class ID   | Class Name   | Ticker Symbol   |
|:---|:---|:---|
| C000237307 | -            |  |

### Putnam BioRevolution ETF (Series ID: S000077138)

| Class ID   | Class Name   | Ticker Symbol   |
|:---|:---|:---|
| C000237308 | -            |  |

### Putnam Emerging Markets ex-China ETF (Series ID: S000077139)

| Class ID   | Class Name   | Ticker Symbol   |
|:---|:---|:---|
| C000237309 | -            |  |

### Putnam ESG Core Bond ETF (Series ID: S000077297)

| Class ID   | Class Name   | Ticker Symbol   |
|:---|:---|:---|
| C000237594 | -            |  |

### Putnam ESG High Yield ETF (Series ID: S000077298)

| Class ID   | Class Name   | Ticker Symbol   |
|:---|:---|:---|
| C000237595 | -            |  |

### Putnam ESG Ultra Short ETF (Series ID: S000077299)

| Class ID   | Class Name   | Ticker Symbol   |
|:---|:---|:---|
| C000237596 | -            |  |

### Putnam PanAgora ESG Emerging Markets Equity ETF (Series ID: S000077300)

| Class ID   | Class Name   | Ticker Symbol   |
|:---|:---|:---|
| C000237597 | -            |  |

### Putnam PanAgora ESG International Equity ETF (Series ID: S000077301)

| Class ID   | Class Name   | Ticker Symbol   |
|:---|:---|:---|
| C000237598 | -            |  |

?xml version='1.0' encoding='ASCII'? PUTNAM ETF TRUST

------

#### As filed with the U.S. Securities and Exchange Commission on August 25, 2025

#### Securities Act File No. 333-253222

#### Investment Company Act File No. 811-23643

#### UNITED STATES

#### SECURITIES AND EXCHANGE COMMISSION

#### Washington, D.C. 20549

### FORM N-1A

### REGISTRATION STATEMENT

#### UNDER

---

| | |
|:---|:---|
| **THE SECURITIES ACT OF 1933** | **[X]** |
| **Pre-Effective Amendment No.** | **[ ]** |
| **Post-Effective Amendment No. 27** | **[X]** |

---

#### and/or

### REGISTRATION STATEMENT

#### UNDER
**THE INVESTMENT COMPANY ACT OF 1940 [X]** 

 **Amendment No. 28** 

### PUTNAM ETF TRUST\*

#### (Exact Name of Registrant as Specified in Charter)

#### 100 Federal Street

#### Boston, MA 02110

#### (Address of Principal Executive Offices) (Zip Code)

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

---

| | | |
|:---|:---|:---|
| **Name and address of agent for service:** | **Copy to:** |  |
| **Stephen J. Tate, Vice President** | **Bryan Chegwidden, Esq.** | **James E. Thomas, Esq.** |
| **Putnam ETF Trust** | **Ropes & Gray LLP** | **Ropes & Gray LLP** |
| **100 Federal Street** | **1211 Avenue of the Americas** | **800 Boylston Street** |
| **Boston, Massachusetts 02110** | **New York, New York 10036** | **Boston, Massachusetts 02199** |

---

#### Continuous

#### (Approximate Date of Proposed Offering)
It is proposed that this filing will become effective:

[ ] immediately upon filing pursuant to paragraph (b)

[X ] on September 1, 2025 pursuant to paragraph (b)

[ ] 60 days after filing pursuant to paragraph (a)(1)

[ ] on ______________ pursuant to paragraph (a)(1)

[ ] 75 days after filing pursuant to paragraph (a)(2)

[ ] on ______________ pursuant to paragraph (a)(2) of Rule 485.

If appropriate, check the following box:

[ ] This post-effective amendment designates a new effective date for a previously filed post-effective amendment.

\* This filing relates solely to Putnam BDC Income ETF, Putnam BioRevolution<sup>™</sup> ETF, Putnam Emerging Markets ex-China ETF, Putnam ESG Core Bond ETF, Putnam ESG High Yield ETF, Putnam ESG Ultra Short ETF, Putnam PanAgora ESG Emerging Markets Equity ETF, and Putnam PanAgora ESG International Equity ETF.

------

---

| | |
|:---|:---|
| ![LOGO](g842776dsp03.jpg) | ![LOGO](g842776dsp03b.jpg) |

---

## Putnam

## BDC Income ETF

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp; **Prospectus**  | September 1, 2025 |

---

---

| | |
|:---|:---|
| <br> **Fund Symbol:** PBDC<br>| **Principal U.S. Listing Exchange:** NYSE Arca, Inc. |

---

#### Investment Category: Domestic Equity

#### This prospectus explains what you should know about this fund before you invest. Please read it carefully.
These securities have not been approved or disapproved by the Securities and Exchange Commission ("SEC") nor has the SEC passed upon the accuracy or adequacy of this prospectus. Any statement to the contrary is a crime.

------

---

| | |
|:---|:---|
|  **Table of contents** |  |
|  [Fund summary](#pro842776_1) | 2 |
|  [Fund details](#pro842776_2) | 9 |
|  [Fund management](#pro842776_3) | 20 |
|  [Shareholder information](#pro842776_4) | 21 |
|  [Distribution plans and payments to intermediaries](#pro842776_5) | 25 |
|  [Fund distributions and taxes](#pro842776_6) | 27 |
|  [Financial highlights](#pro842776_7) | 30 |

---

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### Fund summary

#### Goal
The fund seeks current income.

#### Fees and expenses
The following tables describe the fees and expenses you may pay if you buy, hold and sell shares of the fund. **You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.**

#### Annual Fund Operating Expenses

#### (expenses you pay each year as a percentage of the value of your investment)

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Management**<br> **fees** | **Distribution**<br> **and service (12b-1)**<br> **fees** | **Other**<br> **expenses** | **Acquired**<br> **fund fees**<br> **and expenses** | **&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total annual fund** <br> **operating**<br> **expenses<sup>1</sup>** |
| 0.75% |  | 0.00% | 12.74% | 13.49% |

---

<sup>1</sup> Total annual fund operating expenses do not correlate with the ratios of expenses to average net assets reported in the fund's financial highlights tables, which reflect the fund's operating expenses and do not include acquired fund fees and expenses.

#### Example
The following hypothetical example is intended to help you compare the cost of investing in the fund with the cost of investing in other funds. It assumes that you invest $10,000 in the fund for the time periods indicated and then redeem all your shares at the end of those periods. It assumes a 5% return on your investment each year and that the fund's operating expenses remain the same. Your actual costs may be higher or lower.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | 1 year | 3 years | 5 years | 10 years |
| BDC Income ETF | $1292 | $3556 | $5451 | $8949 |

---

#### Portfolio turnover
The fund pays transaction-related costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher turnover rate may indicate higher transaction costs and may result in higher taxes when the fund's shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or the above example, affect fund performance. The fund's turnover rate in the most recent fiscal year was 31%.

2 Prospectus

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Investments, risks, and performance

#### Principal investment strategies
The fund invests mainly in exchange-traded business development companies ("BDCs"). To qualify as a BDC, a company must be organized under the laws of, and have its principal place of business in, the United States, be registered with the Securities and Exchange Commission (the "SEC") and have elected to be regulated as a BDC under the Investment Company Act of 1940, as amended (the "1940 Act"). BDCs are vehicles whose principal business is to invest in, lend capital to or provide services to privately-held U.S. companies or thinly traded U.S. public companies. The Investment Manager, as defined below, will seek BDC investments that contribute to stability of dividend income and return potential. In selecting investments, the Investment Manager expects to evaluate a BDC's credit performance and risk level, potential changes in earnings and dividend levels, the impact of changes in interest rates on the BDC, and differences among BDCs in leverage and balance sheet structures. Given that the fund will invest primarily in BDCs and a significant portion of BDCs have exposure to the financials sector, a significant portion of the fund's assets will have exposure to the financials sector.

The Investment Manager may consider, among other factors, a BDC's valuation, financial strength, growth potential, competitive position in its industry, projected future earnings, cash flows and dividends, and capital policies, as well as overall market conditions, when deciding whether to buy or sell investments.

Under normal circumstances, the fund invests at least 80% of the value of its net assets in BDCs. This policy is non-fundamental and may be changed only after 60 days' notice to shareholders.

The fund may invest up to 20% of its assets in real estate investment trusts ("REITs"), including mortgage REITs. A REIT pools investors' funds for investment primarily in income-producing real estate properties or real estate-related loans (such as mortgages). The real estate properties in which REITs invest typically include properties such as office buildings, retail and industrial facilities, hotels, apartment buildings and healthcare facilities. The fund will limit its investments in REITs to publicly-traded REITs listed on national securities exchanges.

The fund is "non-diversified," which means it may invest a greater percentage of its assets in fewer issuers than a "diversified" fund. The fund expects to invest in a limited number of issuers.

#### Risks
It is important to understand that you can lose money by investing in the fund.

**Risk of investing in business development companies ("BDCs"):** BDCs generally invest in less mature U.S. private companies or thinly traded U.S. public companies which involve greater risk than well-established publicly-

Prospectus 3

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traded companies. While the BDCs in which the fund invests are expected to generate income in the form of dividends, certain BDCs during certain periods of time may not generate dividend income. The fund will indirectly bear its proportionate share of any management fees and other operating expenses incurred by the BDCs and of any performance-based or incentive fees payable by the BDCs in which it invests, in addition to the fund's management fee and any other expenses paid by the fund. A BDC's incentive fee may be very high, vary from year to year and be payable even if the value of the BDC's portfolio declines in a given time period. The use of leverage by BDCs magnifies gains and losses on amounts invested and increases the risks associated with investing in BDCs. A BDC may make investments with a larger amount of risk of volatility and loss of principal than other investment options and may also be highly speculative and aggressive. Certain BDCs may also be difficult to value since many of the assets of BDCs do not have readily ascertainable market values. Therefore, such assets are most often recorded at fair value in accordance with valuation procedures adopted by such companies, which may potentially result in material differences between a BDC's net asset value per share and its market value.

**Risk of fund of funds restrictions:** The fund intends to rely on Section 12(d)(1)(F) of the 1940 Act in making investments in BDCs. A fund relying on Section 12(d)(1)(F) may acquire shares of a BDC provided that, immediately after purchase, not more than 3% of the outstanding voting securities of the BDC are owned by the fund and all affiliated persons of the fund, subject to certain conditions. The 3% limit could constrain the fund from investing in a particular BDC in an amount that would be considered desirable from an investment standpoint. Section 12(d)(1)(F)'s conditions include a requirement either to seek instructions from the fund's security holders with regard to the voting of all proxies with respect to the BDC and to vote such proxies only in accordance with such instructions, or to vote the shares held by the fund in the same proportion as the vote of all other holders of the BDC. This requirement could limit the fund's ability to support or oppose BDC shareholder voting matters. If the fund seeks to invest in a BDC above the 3% limit in Section 12(d)(1)(F), the fund would need to rely on Rule 12d1-4 under the 1940 Act, the SEC's fund of funds rule.

**Risk of investing in the financials sector:** The fund will be sensitive to, and its performance will depend to a greater extent on, the overall condition of the financials sector. Companies in the financials sector may be subject to extensive government regulation that affects the scope of their activities. The profitability of companies in the financials sector may be adversely affected by increases in interest rates, by loan losses, which usually increase in economic downturns, and by credit rating downgrades. In addition, the financials sector is undergoing numerous changes, including continuing consolidations, development of new products and structures and changes to its regulatory framework.

**Fluctuation of** **net asset value and share price risk:** Shares may trade at a larger premium or discount to the fund's net asset value than shares of other

4 Prospectus

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ETFs. The net asset value of the fund will generally fluctuate with changes in the market value of the fund's holdings. The fund's shares can be bought and sold in the secondary market at market prices. Disruptions to creations and redemptions, the existence of extreme market volatility or potential lack of an active trading market for the fund's shares may result in the fund's shares trading significantly above (at a premium) or below (at a discount) net asset value or the intraday value of the fund's holdings. In addition, in stressed market conditions or periods of market disruption or volatility, the market for fund shares may become less liquid in response to deteriorating liquidity in the markets for the fund's underlying portfolio holdings.

**Trading issues risk:** There is no guarantee that the fund will be able to attract market makers and authorized participants. Market makers and authorized participants are not obligated to make a market in the fund's shares or to submit purchase and redemption orders for creation units. The market prices of the fund's shares are expected to fluctuate, in some cases materially, in response to changes in the fund's net asset value, the intraday value of the fund's holdings and supply and demand for the fund's shares. The Investment Manager cannot predict whether the fund's shares will trade above, below or at their net asset value or the intraday value of the fund's holdings. During such periods, investors may incur significant losses if they sell shares.

The securities held by the fund may be traded in markets that close at a different time than the exchange on which the fund's shares are listed. Liquidity in those securities may be reduced after the applicable closing times. Accordingly, during the time when the exchange is open but after the applicable market closing, fixing or settlement times, bid-ask spreads on the exchange and the corresponding premium or discount to the shares' net asset value may widen.

**Large shareholder transaction risk:** The fund is subject to the risk that shareholders will purchase or redeem large quantities of shares of the fund. The fund may be an investment option for mutual funds that are managed by the Investment Manager, as defined below, and its affiliates as "funds of funds." Additionally, other investors from time to time may make substantial investments in the fund. Such shareholders may at times be considered to control the fund. In addition, a large number of shareholders may collectively purchase or redeem fund shares in large amounts rapidly or unexpectedly. Large shareholder transactions may adversely affect the fund's liquidity and net assets. These redemptions may also adversely affect the fund's performance if the fund is forced to sell securities, which may also increase the fund's brokerage costs.

**Authorized participant concentration risk:** Only an authorized participant may engage in creation and redemption transactions directly with the fund. The fund may have a limited number of financial institutions that act as authorized participants, none of which are obligated to engage in creation and/or redemption transactions. To the extent that those authorized participants do not engage in creation and redemption orders, there may be a significantly diminished trading market for fund shares or fund shares may trade at a

Prospectus 5

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discount (or premium) to net asset value and possibly face trading halts and/or de-listing.

**Cash transactions risk:** Unlike certain ETFs, the fund may effect creations and redemptions in cash or partially in cash. Therefore, it may be required to sell portfolio securities and subsequently recognize gains on such sales that the fund might not have recognized if it were to distribute portfolio securities in-kind. As such, investments in the fund's shares may be less tax-efficient than an investment in an ETF that distributes portfolio securities entirely in-kind.

**Market risk** **:** 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, outbreaks of infectious illnesses or other widespread public health issues, and factors related to a specific issuer, asset class, geography, industry or sector. These and other factors may lead to increased volatility and reduced liquidity in the fund's portfolio holdings, may negatively impact the fund's performance, and may exacerbate other risks to which the fund is subject.

**Common stock risk:** The fund will invest in common stocks issued by BDCs. Common stock represents an ownership interest in a company. The value of a company's stock, including a BDC, may fall or fail to rise as a result of factors directly relating to that company, such as decisions made by its management or lower demand for the company's products or services. A stock's value may also fall because of factors affecting not just the company, but also other companies in the same industry or in a number of different industries, such as increases in production costs.

**Small and midsize companies risk:** Stocks of small and midsize companies often trade in smaller volumes, and their prices may fluctuate more than stocks of larger companies. Stocks of these companies may therefore be more vulnerable to adverse developments than those of larger companies.

**Industry or sector concentration risk:** From time to time, the fund may invest a significant portion of its assets in companies in one or more related industries or sectors, which would make the fund more vulnerable to adverse developments affecting those industries or sectors. BDCs, as financial services companies, may be affected by the availability and cost of capital; changes in interest rates; insurance claims activity; industry consolidation; reduced profitability from limitations on loans; proprietary trading; interest rates and fees charged as a result of extensive government regulations; and general market conditions.

**Non-diversified risk:** As a non-diversified fund, the fund invests in fewer issuers and is more vulnerable than a more broadly diversified fund to fluctuations in the values of the securities it holds. Moreover, the gains and losses on a single investment may have a greater impact on the fund's net asset value and may make the fund more volatile than more diversified funds.

6 Prospectus

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**Real estate investment trust ("REIT") risk** **:** Investments in REITs are subject to the risks associated with direct ownership in real estate, including economic downturns that have an adverse effect on real estate markets. Mortgage REITs may be affected by the risk of borrower default, the likelihood of which is increased for mortgage REITs that invest in sub-prime mortgages. REITs, and mortgage REITs in particular, are also subject to interest rate risk. In addition, since REITs depend on payment under their mortgage loans and leases to generate cash to make distributions to their shareholders, investments in REITs may be adversely affected by defaults on such mortgage loans or leases.

**Management and operational risk:** There is no guarantee that the investment techniques, analyses, or judgments that the Investment Manager applies in making investment decisions for the fund will produce the intended outcome or that the investments selected for the fund will perform as well as other securities that were not selected for the fund. The Investment Manager, or the fund's other service providers, may experience disruptions or operating errors that could negatively impact the fund.

The fund may not achieve its goal, and it is not intended to be a complete investment program. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

### Performance
The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund's performance from year to year. The table shows the average annual total returns of the fund and also compares the fund's performance with the average annual total returns of a broad measure of market performance and an additional index with characteristics relevant to the fund. The fund makes updated performance information, including its current net asset value per share, available at www.franklintempleton.com.

*The fund's past performance (before and after taxes) is not necessarily an indication of how the fund will perform in the future.* 

Annual total returns

Prospectus 7

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![LOGO](g842776dsp012.jpg)

---

| | | |
|:---|:---|:---|
|  Best Quarter: | Q2 2023 | 8.36% |
|  Worst Quarter: | Q3 2024 | -0.26% |
| As of June 30, 2025, the fund's year-to-date return was 0.86%. |  |  |

---

#### Average annual total returns
(for periods ended 12/31/24)

---

| | | |
|:---|:---|:---|
| **BDC Income ETF** | **1 year** | **Since<br> Inception<sup>1</sup>** |
|  Return before taxes | 19.33% | 27.58% |
|  Return after taxes on distributions | 14.88% | 22.39% |
|  Return after taxes on distributions and sales of fund shares | 11.31% | 19.10% |
|  Russell 3000 Index (no deduction for fees, expenses or taxes) | 23.81% | 24.79% |
|  S&P BDC Index (no deduction for fees, expenses or taxes) | 16.61% | 25.52% |

---

<sup>1.</sup> Since inception September 29, 2022.

After-tax returns reflect the historical highest individual federal marginal income tax rates and do not reflect state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. These after-tax returns do not apply if you hold your fund shares through a 401(k) plan, an IRA, or another tax-advantaged arrangement.

Important data provider notices and terms are available at www.franklintempletondatasources.com. All data is subject to change.

### Your fund's management

#### Investment Manager
Putnam Investment Management, LLC ("Putnam Management" or the "Investment Manager")

#### Sub-advisors
Franklin Advisers, Inc. ("Franklin Advisers")

Franklin Templeton Investment Management Limited ("FTIML")

8 Prospectus

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#### Portfolio manager
**Michael Petro, CFA** 

Portfolio Manager of Putnam Management and portfolio manager of the fund since 2022.

#### Purchase and sale of fund shares
Shares of the fund are listed and traded on an exchange, and individual fund shares may only be bought and sold in the secondary market through a broker or dealer at market price. These transactions, which do not involve the fund, are made at market prices that may vary throughout the day, rather than at net asset value. Shares of the fund may trade at a price greater than the fund's net asset value (premium) or less than the fund's net asset value (discount). An investor may incur costs attributable to the difference between the highest price a buyer is willing to pay to purchase shares (bid) and the lowest price a seller is willing to accept for shares (ask) when buying or selling fund shares in the secondary market (the "bid-ask spread"). Recent information, including information regarding the fund's net asset value, market price, premiums and discounts, and bid-ask spread, is available at www.franklintempleton.com.

#### Tax information
The fund's distributions will be taxed as ordinary income or capital gains unless you hold the shares through a tax-advantaged arrangement, in which case you will generally be taxed only upon withdrawal of monies from the arrangement.

#### Financial intermediary compensation
If you purchase the fund through a broker/dealer or other financial intermediary (such as a bank or financial professional), the fund and its related companies may pay that intermediary for the sale of fund shares and related services. Please bear in mind that these payments may create a conflict of interest by influencing the broker/dealer or other intermediary to recommend the fund over another investment. Ask your advisor or visit your advisor's website for more information.

### Fund details

#### Principal investment strategies
The fund invests mainly in exchange-traded BDCs. To qualify as a BDC, a company must be organized under the laws of, and have its principal place of business in, the United States, be registered with the SEC and have elected to be regulated as a BDC under the 1940 Act. BDCs are vehicles whose principal business is to invest in, lend capital to or provide services to privately-held U.S. companies or thinly traded U.S. public companies. The Investment Manager, will seek BDC investments that contribute to stability of dividend income and return potential. In selecting investments, the Investment Manager expects to evaluate a BDC's credit performance and risk level, potential changes in earnings and dividend levels, the impact of changes in interest rates on the

Prospectus 9

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BDC, and differences among BDCs in leverage and balance sheet structures. Given that the fund will invest primarily in BDCs, and a significant portion of BDCs have exposure to the financials sector, a significant portion of the fund's assets will have exposure to the financials sector.

Under normal circumstances, the fund invests at least 80% of the value of its net assets in BDCs. This policy is non-fundamental and may be changed only after 60 days' notice to shareholders.

The fund may invest up to 20% of its assets in REITs, including mortgage REITs. A REIT pools investors' funds for investment primarily in income-producing real estate properties or real estate-related loans (such as mortgages). The real estate properties in which REITs invest typically include properties such as office buildings, retail and industrial facilities, hotels, apartment buildings and healthcare facilities. The fund will limit its investments in REITs to publicly-traded REITs listed on national securities exchanges.

The Investment Manager may consider, among other factors, a BDC's valuation, financial strength, growth potential, competitive position in its industry, projected future earnings, cash flows and dividends, and capital policies, as well as overall market conditions when deciding whether to buy or sell investments.

The Investment Manager expects to integrate environmental, social, or governance ("ESG") considerations, where the Investment Manager considers them material and relevant, into its fundamental research process and investment decision-making for the fund, although ESG considerations do not represent a primary focus of the fund.

#### Principal investment risks
The principal and certain additional risks of investing in the fund are described below. These risks and other factors may adversely affect the fund's net asset value, market price and performance. When you sell your shares, they may be worth more or less than what you paid for them, which means that you could lose money as a result of your investment. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund may not achieve its investment objective, and it is not intended to be a complete investment program. The fund's Statement of Additional Information ("SAI") contains additional information about the fund's investment policies and risks.

**Risk of investing in BDCs:** BDCs generally invest in less mature U.S. private companies or thinly traded U.S. public companies which involve greater risk than well-established publicly-traded companies. While the BDCs in which the fund invests are expected to generate income in the form of dividends, certain BDCs during certain periods of time may not generate dividend income. The fund will indirectly bear its proportionate share of any management fees and other operating expenses incurred by the BDCs and of any performance-based

10 Prospectus

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or incentive fees payable by the BDCs in which it invests, in addition to the fund's management fee and any other expenses paid by the fund. A BDC's incentive fee may be very high, vary from year to year and be payable even if the value of the BDC's portfolio declines in a given time period. Incentive fees may create an incentive for a BDC's manager to make investments that are risky or more speculative than would be the case in the absence of such compensation arrangements, and may also encourage the BDC's manager to use leverage to increase the return on the BDC's investments. Any incentive fee payable by a BDC that relates to its net investment income may be computed and paid on income that may include interest that has been accrued but not yet received. If a portfolio company defaults on a loan that is structured to provide accrued interest income, it is possible that accrued interest income previously included in the calculation of the incentive fee will become uncollectible. A BDC's manager may not be obligated to reimburse the BDC's shareholder for any part of the incentive fee it received that was based on accrued interest income that was never received as a result of a subsequent default, and such circumstances would result in the BDC's shareholders (including the fund) paying an incentive fee on income that was never received by the BDC. Such incentive fees may also create an incentive for a BDC's manager to make investments in securities with deferred interest features.

The use of leverage by BDCs magnifies gains and losses on amounts invested and increases the risks associated with investing in BDCs. A BDC may make investments with a larger amount of risk of volatility and loss of principal than other investment options and may also be highly speculative and aggressive. Generally, little public information exists for private and thinly traded companies in which a BDC may invest, and there is a risk that investors may not be able to make a fully informed evaluation of a BDC and its portfolio of investments.

With respect to investments in debt instruments, there is a risk that the issuers of such instruments may default on their payments or declare bankruptcy. Many debt investments in which a BDC may invest will not be rated by a credit rating organization and will be below investment grade quality. These investments are commonly referred to as "junk bonds" and have predominantly speculative characteristics with respect to an issuer's capacity to make payments of interest and principal. Although lower grade securities are potentially higher yielding, they are also characterized by high risk. In addition, the secondary market for lower grade securities may be less liquid than that of higher rated securities. Certain BDCs may also be difficult to value since many of the assets of BDCs do not have readily ascertainable market values. Therefore, such assets are most often recorded at fair value in accordance with valuation procedures adopted by such companies, which may potentially result in material differences between a BDC's net asset value per share and its market value.

Additionally, a BDC may only incur indebtedness in amounts such that the BDC's asset coverage ratio of total assets to total senior securities equals at least 150% after such incurrence. These limitations on asset mix and leverage

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may affect the way that the BDC raises capital. BDCs compete with other entities for the types of investments they make, and such entities are not necessarily subject to the same investment constraints as BDCs. The 1940 Act imposes certain constraints upon the operations of a BDC. For example, BDCs are required to invest at least 70% of their total assets primarily in securities of U.S. private companies or thinly traded U.S. public companies, cash, cash equivalents, U.S. government securities and high-quality debt investments that mature in one year or less. To qualify and remain eligible for the special tax treatment accorded to regulated investment companies and their shareholders under the Internal Revenue Code of 1986, as amended, the BDCs in which the fund invests must meet certain source-of-income, asset diversification and annual distribution requirements. If a BDC in which the fund invests fails to qualify as a regulated investment company, such BDC would be liable for federal, and possibly state, corporate taxes on its taxable income and gains. Such failure by a BDC could substantially reduce the BDC's net assets and the amount of income available for distribution to the fund, which would in turn decrease the total return of the fund in respect of such investment.

**Risk of fund of funds restrictions:** The fund intends to rely on Section 12(d)(1)(F) of the 1940 Act in making investments in BDCs. A fund relying on Section 12(d)(1)(F) may acquire shares of a BDC provided that, immediately after purchase, not more than 3% of the outstanding voting securities of the BDC are owned by the fund and all affiliated persons of the fund, subject to certain conditions. The 3% limit could constrain the fund from investing in a particular BDC in an amount that would be considered desirable from an investment standpoint. Section 12(d)(1)(F)'s conditions include a requirement either to seek instructions from the fund's security holders with regard to the voting of all proxies with respect to the BDC and to vote such proxies only in accordance with such instructions, or to vote the shares held by the fund in the same proportion as the vote of all other holders of the BDC. This requirement could limit the fund's ability to support or oppose BDC shareholder voting matters.

If the fund seeks to invest in a BDC above the 3% limit in Section 12(d)(1)(F), the fund would need to rely on Rule 12d1-4 under the 1940 Act, the SEC's fund of funds rule. Rule 12d1-4 limits the amount that the fund and its affiliates (including other client accounts of the Investment Manager and its affiliates), in the aggregate, can invest in the outstanding voting securities of any one BDC and imposes certain other requirements that must be satisfied before making an investment in a BDC. The fund and its advisory group affiliates may not acquire "control" of a BDC, which is presumed once ownership of a BDC's outstanding voting securities exceeds 25%. The fund is also required to enter into an investment agreement with a BDC prior to investing in the BDC; in some cases, the negotiated substantive terms of these agreements could have an impact on the fund's investment program. In addition, both the fund and the BDC are required to make certain findings under Rule 12d1-4 prior to an investment in the BDC. In addition, the fund and its advisory group are required to mirror vote shares of a BDC (i.e., vote shares in the same proportion as other BDC shareholders) if they own more than 10% of the BDC's shares,

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which would limit the fund's ability to oppose or support shareholder voting matters at that BDC. These various restrictions could inhibit the fund's ability to purchase one or more BDCs (for example, by delaying purchases, which could mean that the fund buys at a higher price) and could adversely affect the fund's ability to optimally implement its investment strategy.

**Risk of investing in the financials sector:** The fund will be sensitive to, and its performance will depend to a greater extent on, the overall condition of the financials sector. Companies in the financials sector may be subject to extensive government regulation that affects the scope of their activities, the prices they can charge and the amount of capital they must maintain. The profitability of companies in the financials sector may be adversely affected by increases in interest rates, by loan losses, which usually increase in economic downturns, and by credit rating downgrades. In addition, the financials sector is undergoing numerous changes, including continuing consolidations, development of new products and structures and changes to its regulatory framework. Furthermore, some companies in the financials sector perceived as benefitting from government intervention in the past may be subject to future government-imposed restrictions on their businesses or face increased government involvement in their operations. Increased government involvement in the financials sector, including measures such as taking ownership positions in financial institutions, could result in a dilution of the fund's investments in financial institutions.

**Fluctuation of** **net asset value and share price risk:** Shares may trade at a larger premium or discount to net asset value than shares of other ETFs. The net asset value of the fund's shares will generally fluctuate with changes in the market value of the fund's holdings. The fund's shares are listed on an exchange and can be bought and sold in the secondary market at market prices. The market prices of shares will fluctuate in accordance with changes in net asset value and supply and demand on the listing exchange. Although the arbitrage process is designed to permit the shares of the fund to trade at market prices that are at or close to net asset value, it is possible that the market price and net asset value will vary significantly. As a result, you may sustain losses if you pay more than the shares' net asset value when you purchase shares or receive less than the shares' net asset value when you sell shares, in the secondary market. During periods of disruptions to creations and redemptions, the existence of extreme market volatility, or lack of an active trading market for the fund's shares, the market price of fund shares is more likely to differ significantly from the fund's net asset value or the intraday value of the fund's holdings. During such periods, you may be unable to sell your shares or may incur significant losses if you sell your shares. There are various methods by which investors can purchase and sell shares and various orders that may be placed. Investors should consult their financial intermediary before purchasing or selling shares of the fund. Disruptions at market makers, authorized participants or market participants may also result in significant differences between the market price of the fund's shares and the fund's net asset value. In addition, in stressed market conditions or periods of market disruption or volatility, the market for shares may become less liquid in

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response to deteriorating liquidity in the markets for the fund's underlying portfolio holdings.

The market price of shares during the trading day, like the price of any exchange-traded security, includes a "bid/ask" spread charged by the exchange specialist, market makers, or other participants that trade the particular security. In times of severe market disruption or volatility, the bid/ask spread can increase significantly. At those times, shares are most likely to be traded at a discount to net asset value, and the discount is likely to be greatest when the price of shares is falling fastest, which may be the time that you most want to sell your shares.

**Trading issues risk:** There is no guarantee that the fund will be able to attract market makers and authorized participants. There are no obligations of market makers to make a market in the fund's shares or of authorized participants to submit purchase or redemption orders for creation units.

The market prices of the fund's shares are expected to fluctuate, in some cases materially, in response to changes in the fund's net asset value, the intraday value of the fund's holdings and supply and demand for the fund's shares. The Investment Manager cannot predict whether the fund's shares will trade above, below or at their net asset value or the intraday value of the fund's holdings. During such periods, investors may incur significant losses if they sell shares.

The securities held by the fund may be traded in markets that close at a different time than the exchange on which the fund's shares are listed. Liquidity in those securities may be reduced after the applicable closing times. Accordingly, during the time when the exchange is open but after the applicable market closing, fixing or settlement times, bid-ask spreads on the exchange and the corresponding premium or discount to the shares' net asset value may widen.

In addition, trading of shares in the secondary market may be halted, for example, due to activation of market-wide "circuit breakers." If trading halts or an unanticipated early closing of the listing exchange occurs, a shareholder may be unable to purchase or sell shares of the fund.

If the fund's shares are delisted from the listing exchange, the Investment Manager may seek to list the fund shares on another market, merge the fund with another exchange-traded fund or traditional mutual fund, or redeem the fund shares at net asset value.

Shares of the fund, similar to shares of other issuers listed on a stock exchange, may be sold short and are therefore subject to the risk of increased volatility and price decreases associated with being sold short.

**Large shareholder transaction risk:** The fund is subject to the risk that shareholders will purchase or redeem large quantities of shares of the fund (such purchases or redemptions, "large shareholder transactions"). The fund may be an investment option for mutual funds that are managed by the

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Investment Manager and its affiliates as "funds of funds." Additionally, other investors from time to time may make substantial investments in the fund. Such shareholders may at times be considered to control the fund. In addition, a large number of shareholders collectively may purchase or redeem fund shares in large amounts rapidly or unexpectedly. A number of circumstances may cause the fund to experience large shareholder transactions, such as changes in the eligibility criteria for the fund; liquidations, reorganizations, repositionings, or other announced fund events; or changes in investment objectives, strategies, policies, risks, or investment personnel. Large redemptions may be more likely during times of market stress or reduced liquidity, exacerbating the potential impact on the fund.

Large shareholder transactions may adversely affect the fund's liquidity and net assets. These transactions could adversely affect the fund's performance if the fund is forced to sell portfolio securities to satisfy redemption requests or purchase securities for the portfolio in connection with the investment of subscription proceeds when the fund would otherwise not do so, and at unfavorable prices, which may increase the fund's brokerage costs and accelerate the realization of taxable income and/or gains to shareholders. The effects of taxable income and/or gains resulting from large shareholder transactions would particularly impact non-redeeming shareholders who do not hold their fund shares in an IRA, 401(k) plan or other tax-advantaged plan. To the extent that such transactions result in short-term capital gains, such gains will generally be taxed at the ordinary income tax rate for shareholders who hold fund shares in a taxable account. In addition, fund returns also may be adversely affected if the fund holds a portion of its assets in liquid, cash-like investments in connection with or in anticipation of shareholder redemptions.

**Authorized participant concentration risk:** Only authorized participants may engage in creation and redemption transactions directly with the fund. The fund may have a limited number of financial institutions that act as authorized participants, none of which are obligated to engage in creation and/or redemption transactions. Decisions by market makers or authorized participants to reduce their role with respect to market making or creation and redemption activities during times of market stress, or a decline in the number of authorized participants due to decisions to exit the business, bankruptcy, or other factors, could inhibit the effectiveness of the arbitrage process in maintaining the relationship between the underlying value of the fund's portfolio securities and the market price of fund shares. To the extent no other authorized participants are able to step forward to create or redeem, shares may trade at a discount (or premium) to net asset value and possibly face delisting.

**Cash transactions risk:** Unlike certain ETFs, the fund may effect creations and redemptions in cash or partially in cash. Therefore, it may be required to sell portfolio securities and subsequently recognize gains on such sales that the fund might not have recognized if it were to distribute portfolio securities in-kind. As such, investments in the fund's shares may be less tax-efficient than an investment in an ETF that distributes portfolio securities entirely in-kind.

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**Environmental, social and governance ("ESG") considerations risk:** Although ESG considerations do not represent a primary focus of the fund, the Investment Manager expects to integrate ESG considerations into the fundamental research process and investment decision-making for the fund, where considered material and relevant, and where data is available. The Investment Manager believes that ESG considerations, like other, more traditional subjects of investment analysis such as market position, growth prospects, and business strategy, have the potential to impact financial risk and investment returns. The Investment Manager believes that ESG considerations are best analyzed in combination with a company's fundamentals, including a company's industry, geography, and strategic position. When considering ESG factors, the Investment Manager uses company disclosures, public data sources, and independent third-party data as inputs into their analytical processes. The consideration of ESG factors as part of the fund's investment process does not mean that the fund pursues a specific ESG or sustainable investment strategy, and the Investment Manager may make investment decisions for the fund other than on the basis of relevant ESG considerations.

**Market risk:** 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 (including perceptions about monetary policy, interest rates, inflation or the risk of default); government actions (including protectionist measures, intervention in the financial markets or other regulation, and changes in fiscal, monetary or tax policies); geopolitical events or changes (including natural disasters, terrorism and war); outbreaks of infectious illnesses or other widespread public health issues (including epidemics and pandemics); and factors related to a specific issuer, asset class, geography, industry, or sector. Foreign financial markets have their own market risks, and they may be more or less volatile than U.S. markets and may move in different directions. During a general downturn in financial markets, multiple asset classes may decline in value simultaneously. These and other factors may lead to increased volatility and reduced liquidity in the fund's portfolio holdings. During those periods, the fund may experience high levels of shareholder redemptions, and may have to sell securities at times when it would otherwise not do so, and at unfavorable prices. These risks may be exacerbated during economic downturns or other periods of economic stress.

The COVID-19 pandemic and efforts to contain its spread have resulted in, among other effects, significant market volatility, exchange trading suspensions and closures, declines in global financial markets, higher default rates, significant changes in fiscal and monetary policies, and economic downturns and recessions. The effects of the COVID-19 pandemic have negatively affected, and may continue to negatively affect, the global economy, the economies of the United States and other individual countries, the financial performance of individual issuers, sectors, industries, asset classes, and markets, and the value, volatility, and liquidity of particular securities and other assets. The effects of the COVID-19 pandemic also are likely to exacerbate

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other risks that apply to the fund, including the risks disclosed in this prospectus, which could negatively impact the fund's performance and lead to losses on your investment in the fund. The duration of the COVID-19 pandemic and its effects cannot be determined with certainty.

The United States and other countries are periodically involved in disputes over trade and other matters, which may result in tariffs, investment restrictions and adverse impacts on affected companies and securities. For example, the United States has imposed tariffs and other trade barriers on Chinese exports, has restricted sales of certain categories of goods to China, and has established barriers to investments in China. Trade disputes may adversely affect the economies of the United States and its trading partners, as well as companies directly or indirectly affected and financial markets generally. The United States government has prohibited U.S. persons from investing in Chinese companies designated as related to the Chinese military. These and possible future restrictions could limit the fund's opportunities for investment and require the sale of securities at a loss or make them illiquid. Moreover, the Chinese government is involved in a longstanding dispute with Taiwan that has included threats of invasion. If the political climate between the United States and China does not improve or continues to deteriorate, if China were to attempt unification of Taiwan by force, or if other geopolitical conflicts develop or get worse, economies, markets and individual securities may be severely affected both regionally and globally, and the value of the fund's assets may go down.

**Common stock risk:** The fund will invest in common stocks issued by BDCs. Common stock represents an ownership interest in a company. The value of a company's stock, including a BDC, may fall or fail to rise as a result of factors directly relating to that company, such as decisions made by its management or lower demand for the company's products or services. A stock's value may also fall because of factors affecting not just the company, but also other companies in the same industry or in a number of different industries, such as increases in production costs. The value of a BDC's stock may also be affected by changes in financial markets that are relatively unrelated to the company or its industry, such as changes in interest rates, currency exchange rates or inflation rates. In addition, a BDC's stock generally pays dividends only after the BDC has invested in other companies and makes required payments to holders of its bonds and other debt. For this reason, the value of a company's stock will usually react more strongly than its bonds and other debt to actual or perceived changes in the company's financial condition or prospects.

**Industry or sector concentration risk:** From time to time, the fund may invest a significant portion of its assets in companies in one or more related industries or sectors, which would make the fund more vulnerable to adverse developments affecting those industries or sectors. BDCs, as financial services companies, may be affected by the availability and cost of capital; changes in interest rates; insurance claims activity; industry consolidation; reduced profitability from limitations on loans; proprietary trading; interest rates and fees

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charged as a result of extensive government regulations; and general market conditions.

**Non-diversified risk:** As a non-diversified fund, the fund invests in fewer issuers and is more vulnerable than a more broadly diversified fund to fluctuations in the values of the securities it holds. Moreover, the gains and losses on a single investment may have a greater impact on the fund's net asset value and may make the fund more volatile than more diversified funds.

**Small and midsize companies risk:** These companies, many of which may have a market capitalization of less than $1 billion, are more likely than larger companies to have limited product lines, markets or financial resources, lack profitability or depend on a small management group. Stocks of these companies often trade in smaller volumes, and their prices may fluctuate more than stocks of larger companies. Stocks of small and midsize companies may therefore be more vulnerable to adverse developments than those of larger companies. In addition, stocks of small and midsize companies, at times, may not perform as well as stocks of larger companies or the stock market in general, and may be out of favor with investors for varying periods of time.

**REITs risk:** The fund may invest up to 20% of its assets in REITs, including mortgage REITs. A REIT pools investors' funds for investment primarily in income-producing real estate properties or real estate-related loans (such as mortgages). The real estate properties in which REITs invest typically include properties such as office buildings, retail and industrial facilities, hotels, apartment buildings and healthcare facilities. The fund will limit its investments in REITs to publicly-traded REITs listed on national securities exchanges. The yields available from investments in REITs depend on the amount of income and capital appreciation generated by the related properties. Investments in REITs are subject to the risks associated with direct ownership in real estate, including economic downturns that have an adverse effect on real estate markets. Mortgage REITs may be affected by the risk of borrower default, the likelihood of which is increased for mortgage REITs that invest in sub-prime mortgages. REITs, and mortgage REITs in particular, are also subject to interest rate risk. Rising interest rates may cause REIT investors to demand a higher annual yield, which may, in turn, cause a decline in the market price of the equity securities issued by a REIT. Rising interest rates also generally increase the costs of obtaining financing, which could cause the value of the fund's REIT investments to decline. During periods when interest rates are declining, mortgages are often refinanced. Refinancing may reduce the yield on investments in mortgage REITs. In addition, since REITs depend on payment under their mortgage loans and leases to generate cash to make distributions to their shareholders, investments in REITs may be adversely affected by defaults on such mortgage loans or leases.

**Liquidity and illiquid investments risk:** The fund may invest up to 15% of its net assets in illiquid investments, which may be considered speculative and which may be difficult to sell. The sale of many of these investments is prohibited or limited by law or contract. Some investments may be difficult to value for purposes of determining the fund's net asset value. Certain other

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investments may not have an active trading market due to adverse market, economic, industry, political, regulatory, geopolitical, environmental, public health, and other conditions, including investors trying to sell large quantities of a particular investment or type of investment, or lack of market makers or other buyers for a particular investment or type of investment. The fund may not be able to sell its illiquid investments when the Investment Manager considers it desirable to do so, or the fund may be able to sell them only at less than their value.

**Management and operational risk:** The fund is actively managed and its performance will reflect, in part, the Investment Manager's ability to make investment decisions that seek to achieve the fund's investment objective. There is no guarantee that the investment techniques, analyses, or judgments that the Investment Manager applies in making investment decisions for the fund will produce the intended outcome or that the investments selected for the fund will perform as well as other securities that were not selected for the fund. As a result, the fund may underperform its benchmark or other funds with a similar investment goal and may realize losses. In addition, the Investment Manager, or the fund's other service providers, may experience disruptions or operating errors that could negatively impact the fund. Although service providers may have operational risk management policies and procedures and take appropriate precautions to avoid and mitigate risks that could lead to disruptions and operating errors, it may not be possible to identify all of the operational risks that may affect the fund or to develop processes and controls to completely eliminate or mitigate their occurrence or effects.

**Portfolio turnover rate** **:** The fund's portfolio turnover rate measures how frequently the fund buys and sells investments. A portfolio turnover rate of 100%, for example, would mean that the fund sold and replaced securities valued at 100% of the fund's assets within a one-year period. Funds with high turnover may be more likely to realize capital gains that must be distributed to shareholders as taxable income. High turnover may also cause a fund to pay more brokerage commissions and other transaction costs (including imputed transaction costs), which may detract from performance. The fund's portfolio turnover rate and the amount of brokerage commissions it pays and transaction costs it incurs will vary over time based on market conditions.

**Other investments:** In addition to the main investment strategies described above, the fund may make other types of investments, such as investments in preferred stocks, convertible securities and debt instruments. The fund may also invest in cash or cash equivalents, including money market instruments or short-term instruments such as commercial paper, bank obligations (e.g., certificates of deposit and bankers' acceptances), repurchase agreements, and U.S. Treasury bills or other government obligations. The fund may also from time to time invest all or a portion of its assets, including any cash balances, in money market and/or short-term bond funds advised by the Investment Manager or its affiliates. The percentage of the fund invested in cash and cash equivalents and such money market and short-term bond funds is expected to vary over time and will depend on various factors, including market conditions,

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purchase and redemption activity by fund shareholders, and the Investment Manager's assessment of the cash level that is appropriate to allow the fund to pursue investment opportunities as they arise and to meet shareholder redemption requests. Large cash positions may dampen performance and may prevent the fund from achieving its goal. These practices may be subject to other risks, as described under *Miscellaneous Investments, Investment Practices and Risks* in the SAI.

**Temporary defensive strategies:** In response to adverse market, economic, political or other conditions, the fund may take temporary defensive positions, such as investing some or all of the fund's assets in cash and cash equivalents, that differ from the fund's usual investment strategies. However, the fund may choose not to use these temporary defensive strategies for a variety of reasons, even in very volatile market conditions. If the fund employs these strategies, the fund may miss out on investment opportunities and may not achieve its goal. Additionally, while temporary defensive strategies are mainly designed to limit losses, they may not work as intended.

**Changes in policies:** The Trustees may change the fund's goal, investment strategies and other policies set forth in this prospectus without shareholder approval, except as otherwise provided in the prospectus or SAI.

### Fund management

#### The fund's investment manager
Putnam Management, 100 Federal Street, Boston MA 02110, is the fund's investment manager, responsible for making investment decisions for the fund and managing the fund's other affairs and business. Putnam Management is an indirect, wholly-owned subsidiary of Franklin Resources Inc. ("Resources"). Together, Putnam Management and its affiliates manage, as of June 30, 2025, $1.61 trillion in assets, and have been in the investment management business since 1947.

Under an agreement with the Investment Manager, Franklin Advisers, One Franklin Parkway, San Mateo, CA 94403-1906, serves as the fund's sub-advisor, responsible for providing certain advisory and related services. Franklin Advisers is a wholly-owned subsidiary of Resources. The Investment Manager (and not the fund) will pay a monthly fee to Franklin Advisers based on the costs of Franklin Advisers in providing these services to the fund, which may include a mark-up determined and revised from time to time in accordance with Franklin Templeton's transfer pricing policy, in line with applicable tax/transfer pricing regulations, but not to exceed 15% over such costs.

The Investment Manager has retained FTIML, Cannon Place, 78 Cannon Street, London, EC4N 6HL, England, to make investment decisions for such fund assets as may be designated from time to time by the Investment Manager. FTIML is not currently managing any fund assets. If FTIML were to manage any fund assets, the Investment Manager (and not the fund) would

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pay a monthly sub-management fee to FTIML for its services at the annual rate of 0.25% of the average net asset value of any fund assets managed by FTIML. FTIML is an indirect subsidiary of Resources.

Pursuant to the arrangements described above, investment professionals who are based in foreign jurisdictions may serve as portfolio managers of the fund or provide other investment services, consistent with local regulations.

The fund pays an annual all-inclusive management fee of 0.75% to the Investment Manager based on the fund's average daily net assets. The management fee is calculated and accrued daily. The management fee covers all of the other expenses of the fund with limited exceptions.

For the fiscal year ended April 30, 2025, the fund paid an effective management fee of 0.75% of the fund's average net assets.

A discussion regarding the basis for the Trustees' approval of the fund's investment management contract and subadvisory contracts is available in the fund's report to shareholders for the period ended October 31, 2023 and in the fund's report on Form N-CSR for the period ended October 31, 2024, respectively.

**Portfolio manager.** The portfolio manager identified below is primarily responsible for the day-to-day management of the fund's portfolio.

**Michael Petro, CFA Portfolio Manager of Putnam Management** 

Mr. Petro has been a portfolio manager of the fund since 2022. He joined Putnam Management in 2002.

The fund's SAI provides additional information about portfolio manager compensation, other accounts that they manage and their ownership of fund shares.

### Shareholder information

#### Valuation of fund shares
The price of the fund's shares is based on its net asset value. The net asset value per share equals the total value of its assets, less its liabilities, divided by the number of its outstanding shares. Shares are only valued as of the scheduled close of regular trading on the NYSE each day the exchange is open.

The fund values its investments for which market quotations are readily available at market value. It values all other investments and assets at their fair value, which may differ from recent market prices. For example, the fund may value a stock traded on a U.S. exchange at its fair value when the exchange closes early or trading in the stock is suspended. It may also value a stock at fair value if recent transactions in the stock have been very limited or if, in the case of a security traded on a market that closes before the NYSE closes, material information about the issuer becomes available after the close of the relevant market. Market quotations are not considered to be readily available

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for many debt securities. These securities are generally valued at fair value on the basis of valuations provided by an independent pricing service approved by the fund's Trustees or dealers selected by the Investment Manager. Pricing services and dealers determine valuations for normal institutional-size trading units of such securities using information with respect to transactions in the bond being valued, market transactions for comparable securities and various relationships, generally recognized by institutional traders, between securities. To the extent a pricing service or dealer is unable to value a security or provides a valuation that the Investment Manager does not believe accurately reflects the security's fair value, the security will be valued at fair value by the Investment Manager.

The fund translates prices for its investments quoted in foreign currencies into U.S. dollars at current exchange rates, which are generally determined as of 4:00 p.m. Eastern Time each day the NYSE is open. As a result, changes in the value of those currencies in relation to the U.S. dollar may affect the fund's net asset value. Because foreign markets may be open at different times than the NYSE, the value of the fund's shares may change on days when shareholders are not able to buy or sell them. Many securities markets and exchanges outside the U.S. close before the close of the NYSE, and the closing prices for securities in those markets or exchanges may not reflect events that occur after the close but before the scheduled close of regular trading on the NYSE. As a result, the fund has adopted fair value pricing procedures, which, among other things, require the fund to fair value foreign equity securities if there has been a movement in the U.S. market that exceeds a specified threshold. Although the threshold may be revised from time to time and the number of days on which fair value prices will be used will depend on market activity, it is possible that fair value prices will be used by the fund to a significant extent. As noted above, the value determined for an investment using the fund's fair value pricing procedures may differ from recent market prices for the investment.

The fund's most recent net asset value is available at www.franklintempleton.com or by calling 1-800-225-1581.

### Additional information about the fund
The fund is an actively managed ETF. Like other ETFs, shares of the fund are generally purchased and redeemed in creation unit aggregations through authorized participants, shares of the fund are listed and traded on a stock exchange, and individual investors can purchase or sell shares in less than creation unit sizes and for cash in the secondary market through a broker.

<u>Derivative actions</u> 

The fund is a series of Putnam ETF Trust (the "Trust"). The Trust's Amended and Restated Agreement and Declaration of Trust imposes certain conditions on derivative actions that are not otherwise required by law, including, in the case of any claim not arising under the federal securities laws, a requirement that the holders of 10% or more of the total outstanding shares of the

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applicable fund join the request to commence the action. Although these conditions are intended to permit legitimate inquiries and claims while avoiding the time, expense, distraction, and other harm that can be caused to a fund or its shareholders as a result of spurious shareholder demands and derivative actions, they may make it more difficult or costly for fund shareholders to bring derivative actions on behalf of the Trust.

<u>Information on the fund's website</u>

The fund will disclose its top 10 holdings and related portfolio information monthly beginning on or after 5 business days after the end of each month at www.franklintempleton.com. The fund discloses its complete portfolio holdings, including the name, identifier, market value and weight of each security and instrument in the portfolio, at www.franklintempleton.com on each business day, before commencement of trading in shares on the listing exchange. The fund will also disclose its complete portfolio holdings as of the end of the prior month on a monthly basis beginning on or before the 15th calendar day after the end of each month. Recent information, including information regarding the fund's net asset value, market price, premiums and discounts, and bid/ask spread, is also available at www.franklintempleton.com.

#### Buying and selling shares in the secondary market
Shares of the fund are listed and traded on an exchange, and individual fund shares may only be bought and sold in the secondary market through a broker. The fund does not impose any minimum investment for shares of the fund purchased on an exchange. These transactions are made at market prices that may vary throughout the day and may be greater than the fund's net asset value (premium) or less than the fund's net asset value (discount). As a result, you may pay more than net asset value when you purchase shares, and receive less than net asset value when you sell shares, in the secondary market. If you buy or sell shares in the secondary market, you will generally incur customary brokerage commissions and charges and you may also incur the cost of the spread between the price at which a dealer will buy fund shares and the somewhat higher price at which a dealer will sell shares. Due to such commissions and charges and spread costs, frequent trading may detract significantly from investment returns.

The fund is designed to offer investors an investment that can be bought and sold frequently in the secondary market without impact on the fund, and such trading activity is designed to enable the market price of fund shares to remain at or close to net asset value. Accordingly, the Board of Trustees has not adopted policies and procedures designed to discourage excessive or short-term trading by these investors.

The fund accommodates frequent purchases and redemptions of creation units by authorized participants and does not place a limit on purchases or redemptions of creation units by these investors. The fund reserves the right, but does not have the obligation, to reject any purchase or redemption transaction (subject to legal and regulatory limits regarding redemption

Prospectus 23

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transactions) at any time. In addition, the fund reserves the right to impose restrictions on disruptive, excessive, or short-term trading.

#### Precautionary notes
<u>Note to registered investment companies</u>

Section 12(d)(1) of the Investment Company Act of 1940, as amended (the "1940 Act"), restricts investments by registered investment companies in the securities of other investment companies, including shares of the fund. Registered investment companies are permitted to invest in the fund beyond the limits set forth in Section 12(d)(1), subject to certain terms and conditions, including that such investment companies enter into an agreement with the fund.

<u>Note to authorized participants regarding continuous offering</u>

Certain legal risks may exist that are unique to authorized participants purchasing creation units directly from the fund. Because new creation units may be issued on an ongoing basis, at any point a "distribution," as such term is used in the Securities Act of 1933 (the "Securities Act"), could be occurring. As a broker-dealer, certain activities that you perform may, depending on the circumstances, result in your being deemed a participant in a distribution, in a manner which could render you a statutory underwriter and subject you to the prospectus delivery and liability provisions of the Securities Act.

For example, you may be deemed a statutory underwriter if you purchase creation units from the fund, break them down into individual fund shares, and sell such shares directly to customers, or if you choose to couple the creation of a supply of new fund shares with an active selling effort involving solicitation of secondary market demand for fund shares. A determination of whether a person is an underwriter for purposes of the Securities Act depends upon all of the facts and circumstances pertaining to that person's activities, and the examples mentioned here should not be considered a complete description of all the activities that could lead to a categorization as an underwriter.

Dealers who are not "underwriters" but are participating in a distribution (as opposed to engaging in ordinary secondary market transactions), and thus dealing with shares as part of an "unsold allotment" within the meaning of Section 4(a)(3)(C) of the Securities Act, will be unable to take advantage of the prospectus delivery exemption provided by Section 4(a)(3) of the Securities Act. This is because the prospectus delivery exemption in Section 4(a)(3) of the Securities Act is not available in respect of such transactions as a result of Section 24(d) of the 1940 Act. As a result, you should note that dealers who are not underwriters but are participating in a distribution (as opposed to engaging in ordinary secondary market transactions) and thus dealing with the shares that are part of an overallotment within the meaning of Section 4(a)(3)(A) of the Securities Act would be unable to take advantage of the prospectus delivery exemption provided by Section 4(a)(3) of the Securities Act. Firms that incur a prospectus-delivery obligation with respect to shares of the fund are reminded that, under Rule 153 under the Securities Act, a

24 Prospectus

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prospectus delivery obligation under Section 5(b)(2) of the Securities Act owed to an exchange member in connection with a sale on an exchange is satisfied by the fact that the prospectus is available at the exchange upon request. The prospectus delivery mechanism provided in Rule 153 is only available with respect to transactions on an exchange.

Certain affiliates of the fund may purchase and resell fund shares pursuant to this prospectus.

<u>Note to secondary market investors</u>

The Depository Trust Company ("DTC"), a limited trust company and securities depository that facilitates the clearance and settlement of trades for its participating banks and broker-dealers, has executed an agreement with the fund's distributor, Franklin Distributors, LLC (the "Distributor"). DTC, or its nominee, is the registered owner of all outstanding shares of the fund. The Investment Manager will not have any record of your ownership. Your ownership of shares will be shown on the records of DTC and the DTC participant broker through which you hold the shares. Your broker will provide you with account statements, confirmations of your purchases and sales, and tax information. Your broker will also be responsible for distributing income and capital gain distributions and for sending you shareholder reports and other information as may be required.

### Costs associated with creations and redemptions
The fund generally imposes a creation transaction fee and a redemption transaction fee to offset transfer and other transaction costs associated with the issuance and redemption of creation units of shares. Information about the procedures regarding creation and redemption of creation units and the applicable transaction fees is included in the SAI.

### Distribution plans and payments to intermediaries

#### Principal distributor
The Distributor distributes creation units for the fund on an agency basis, does not maintain a secondary market in shares of the fund, and has no role in determining the investment policies of the fund or the securities that are purchased or sold by the fund. The Distributor is an indirect, wholly-owned broker/dealer subsidiary of Resources.

The Distributor's address is One Franklin Parkway, San Mateo, CA 94403-1906.

Intermediaries may receive compensation from the Investment Manager, the Distributor, and/or their respective affiliates for providing recordkeeping and

Prospectus 25

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administrative services, as well as other retirement plan expenses, and compensation for services intended to result in the sale of fund shares. These payments are described in more detail in this section and in the SAI.

#### Distribution and service plan
The fund has adopted a distribution and service plan pursuant to Rule 12b-1 under the 1940 Act that authorizes the fund to pay distribution fees in connection with the sale and distribution of its shares and service fees in connection with the provision of ongoing shareholder support services. No Rule 12b-1 fees are currently paid by the fund, and there are no current plans to impose these fees. However, in the event Rule 12b-1 fees are charged in the future, because these fees are paid out of the fund's assets on an ongoing basis, these fees will increase the cost of your investment in the fund.

No dealer, sales representative, or any other person has been authorized to give any information or to make any representations, other than those contained in this prospectus and in the related SAI, in connection with the offer contained in this prospectus. If given or made, such other information or representations must not be relied upon as having been authorized by the fund or the Distributor. This prospectus and the related SAI do not constitute an offer by the fund or by the Distributor to sell shares of the fund to or to buy shares of the fund from any person to whom it is unlawful to make such offer.

#### Payments to intermediaries
Investors may purchase shares of the fund on an exchange through intermediaries (including any broker, intermediary, bank, bank trust department, registered investment advisor, financial planner, retirement plan administrator and any other institution that offers shares of the fund to its customers). In addition to distribution and service plans, the Investment Manager and its affiliates may make payments to intermediaries that do not increase your fund expenses, as described below.

The Investment Manager and its affiliates also pay additional compensation to selected intermediaries in recognition of their marketing support and/or program servicing (each of which is described in more detail below). These payments may create an incentive for an intermediary firm or its representatives to recommend or offer shares of the fund or other Putnam funds to its customers. These additional payments are made by the Investment Manager and its affiliates and do not increase the amount paid by you or the fund as shown under Fund summary — Fees and expenses. The additional payments to intermediaries by the Investment Manager and its affiliates are generally based on one or more of the following factors: average net assets of a fund attributable to that intermediary, sales or net sales of a fund attributable to that intermediary, or reimbursement of ticket charges (fees that an intermediary firm charges its representatives for effecting transactions in fund shares), or on the basis of a negotiated lump sum payment for services provided.

26 Prospectus

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Marketing support payments are generally available to most intermediaries engaging in significant sales of Putnam fund shares. These payments are individually negotiated with each intermediary firm, taking into account the marketing support services provided by the intermediary, including business planning assistance, educating intermediary personnel about the Putnam funds and shareholder financial planning needs, placement on the intermediary's preferred or recommended fund company list, access to sales meetings, sales representatives and management representatives of the intermediary, market data, as well as the size of the intermediary's relationship with the Investment Manager.

Program servicing payments, are paid in some instances to intermediaries in connection with investments in the fund through intermediary platforms and other investment programs. These payments are made for program or platform services provided by the intermediary, including shareholder recordkeeping, reporting, or transaction processing, as well as services rendered in connection with intermediary platform development and maintenance, fund/investment selection and monitoring, or other similar services.

You can find a list of all intermediaries to which the Investment Manager and its affiliates made marketing support and/ or program servicing payments in the SAI, which is on file with the SEC and is also available at www.franklintempleton.com. You can also find other details in the SAI about the payments made by the Investment Manager and its affiliates and the services provided by your intermediary. Your intermediary may charge you fees or commissions in addition to those disclosed in this prospectus. You can also ask your intermediary about any payments it receives from the Investment Manager and its affiliates and any services your intermediary provides, as well as about fees and/or commissions it charges.

#### Other payments
The Investment Manager and its affiliates may make other payments (including payments in connection with educational seminars or conferences) or allow other promotional incentives to intermediaries to the extent permitted by SEC and NASD (as adopted by FINRA) rules and by other applicable laws and regulations.

### Fund distributions and taxes
The fund earns dividends, interest, and other income from its investments, and distributes this income (less expenses) to shareholders as dividends. The fund also realizes capital gains from its investments and distributes these gains (less any losses) as capital gain distributions. If you purchased your shares in the secondary market, your broker is responsible for distributing the income and capital gain distributions to you. The fund normally distributes any net investment income quarterly and any net realized capital gains annually.

For U.S. federal income tax purposes, distributions of net investment income are generally taxable to you as ordinary income. Taxes on distributions of

Prospectus 27

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capital gains are determined by how long the fund owned (or is deemed to have owned) the investments that generated them, rather than by how long you have owned (or are deemed to have owned) your shares. Distributions that the fund properly reports to you as gains from investments that the fund owned for more than one year are generally taxable to you as long-term capital gains includible in net capital gain and taxed to individuals at reduced rates. Distributions of gains from investments that the fund owned for one year or less and gains on the sale of or prepayment on bonds characterized as market discount are generally taxable to you as ordinary income. Distributions that the fund properly reports to you as "qualified dividend income" are taxable at the reduced rates applicable to your net capital gain provided that both you and the fund meet certain holding period and other requirements. Distributions are taxable in the manner described in this paragraph whether you receive them in cash or reinvest them in additional shares of the fund.

Distributions by the fund to retirement plans that qualify for tax-advantaged treatment under U.S. federal income tax laws will not be taxable. Special tax rules apply to investments through such plans. You should consult your tax advisor to determine the suitability of the fund as an investment through such a plan and the tax treatment of distributions (including distributions of amounts attributable to an investment in the fund) from such a plan. Distributions are taxable to you even if they are paid from income or gains earned by the fund before your investment (and thus were included in the price you paid). Contact your financial representative to find out the distribution schedule for your fund.

The fund will not be able to offset gains distributed by one BDC in which it invests against losses in another BDC in which the fund invests. Losses incurred by a BDC will not offset gains incurred by the fund or by another BDC. Sale of shares in a BDC could also cause additional distributable gains to shareholders of the fund. A portion of any such gains may be short-term capital gains that would be distributable as ordinary income to shareholders of the fund. Further, a portion of losses on redemptions of shares in the BDCs may be deferred under the wash sale rules. As a result of these factors, the use of the fund of funds structure by the fund could therefore affect the amount, timing and character of distributions to shareholders.

Any gain resulting from the sale of your shares generally also will be subject to tax. Any such gain or loss will be long term or short term depending on how long you have held your shares.

The above is a general summary of the tax implications of investing in the fund. Please refer to the SAI for further details. You should consult your tax advisor for more information on your own tax situation, including possible foreign, state and local taxes.

#### Other tax considerations
Unlike other ETFs, the securities exchanged for a creation unit will not correspond pro rata to the positions in the fund's portfolio, and the fund will effect its creations and redemptions partially or wholly for cash rather than on an in-kind basis. Because of this, the fund may be unable to realize certain tax

28 Prospectus

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benefits associated with in-kind transfers of portfolio securities that may be realized by other ETFs. Shareholders may be subject to tax on gains they would not otherwise have been subject to and/or at an earlier date than if the fund had effected redemptions wholly on an in-kind basis.

Authorized participants should consult their tax advisors about the U.S. federal, state, local and non-U.S. tax consequences of purchasing and redeeming creation units in the fund.

#### Information about the Summary Prospectus, Prospectus, and SAI
The summary prospectus, prospectus, and SAI for a fund provide information concerning the fund. The summary prospectus, prospectus, and SAI are updated at least annually and any information provided in a summary prospectus, prospectus, or SAI can be changed without a shareholder vote unless specifically stated otherwise. The summary prospectus, prospectus, and the SAI are not contracts between the fund and its shareholders and do not give rise to any contractual rights or obligations or any shareholder rights other than any rights conferred explicitly by federal or state securities laws that may not be waived.

Prospectus 29

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### Financial highlights
The financial highlights table is intended to help you understand the performance of the fund for the past five years, unless otherwise noted. Certain information reflects financial results for a single fund share. Total return represents the rate that an investor would have earned (or lost) on an investment in the fund, assuming reinvestment of all dividends and other distributions. Unless otherwise noted, this information has been audited by the fund's independent registered public accounting firm, PricewaterhouseCoopers, LLP, whose report, along with the fund's financial statements, are available on the fund's website and are included in the fund's Form N-CSR filed with the SEC, which is available upon request.

30 Prospectus

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Financial highlights

(For a common share outstanding throughout the period)

---

| | | | |
|:---|:---|:---|:---|
| **PER-SHARE OPERATING**<br> **PERFORMANCE** | **PER-SHARE OPERATING**<br> **PERFORMANCE** | **PER-SHARE OPERATING**<br> **PERFORMANCE** | **PER-SHARE OPERATING**<br> **PERFORMANCE** |
|  | **Year ended** | **Year ended** | **For the period**<br> **9/29/22**<br> **(commencement <br>of operations)** |
|  | **4/30/25** | **4/30/24** | **to 4/30/23** |
|  **Net asset value, beginning of period** | **$33.90** | **$27.96** | **$25.00** |
|  **Investment operations:** |  |  |  |
|  Net investment income (loss)<sup>a</sup> | 3.28 | 3.34 | 1.73 |
|  Net realized and unrealized gain (loss) on investments | (2.46) | 5.76 | 2.88 |
|  **Total from investment operations** | **.82** | **9.10** | **4.61** |
|  **Less distributions:** |  |  |  |
|  From net investment income | (3.22) | (3.14) | (1.60) |
|  From net realized gain on investments |  | (.02) | (.05) |
|  **Total distributions** | **(3.22)** | **(3.16)** | **(1.65)** |
|  **Net asset value, end of period** | **$31.50** | **$33.90** | **$27.96** |
|  **Total return at net asset value** (%)<sup>b</sup> | **2.30** | **34.14** | **18.71\*** |
|  **RATIOS AND SUPPLEMENTAL DATA** |  |  |  |
|  **Net assets, end of period (in thousands)** | **$193730** | **$77115** | **$29359** |
|  Ratio of expenses to average net assets (%)<sup>c,d</sup> | .75 | .75 | .47\*<sup>,f</sup> |
|  Ratio of net investment income (loss) to average net assets (%)<sup>d</sup> | 9.68 | 10.63 | 6.12\* |
|  Portfolio turnover (%)<sup>e</sup> | 31 | 38 | 29\* |

---

\* Not annualized.

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

(b) Total return assumes dividend reinvestment.

(c) Excludes acquired fund fees and expenses, if any.

(d) Reflects waivers of certain fund expenses in connection with investments in Putnam Government Money Market Fund during the period. As a result of such waivers, the expenses of the fund reflect a reduction of the following amounts:

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| | |
|:---|:---|
| | **Percentage of average** <br> **net assets**  |
| April 30, 2025 | <0.01% |
| April 30, 2024 | <0.01 |

---

Prospectus 31

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---

| | | |
|:---|:---|:---|
|  | April 30, 2023 | <0.01 |
| (e) | Portfolio turnover excludes securities received or delivered in-kind, if any. | Portfolio turnover excludes securities received or delivered in-kind, if any. |
| (f) | Includes one-time proxy cost of 0.03%. | Includes one-time proxy cost of 0.03%. |

---

32 Prospectus

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Appendix- Related Performance Information of Similar Accounts

THE PERFORMANCE INFORMATION PRESENTED BELOW IS FOR THE PUTNAM BUSINESS DEVELOPMENT COMPANIES COMPOSITE (THE "COMPOSITE"). WHILE THE COMPOSITE INCLUDES THE PERFORMANCE OF PUTNAM BDC INCOME ETF (THE "FUND") SINCE THE FUND'S INCEPTION, IT IS NOT SOLELY THE PERFORMANCE OF THE FUND AND SHOULD NOT BE CONSIDERED A SUBSTITUTE FOR THE FUND'S OWN PERFORMANCE. PAST RETURNS ARE NOT INDICATIVE OF FUTURE PERFORMANCE.

Putnam Investment Management, LLC (the "Investment Manager") is the Fund's investment manager. The Investment Manager is an indirect, wholly owned subsidiary of Franklin Resources, Inc. ("Franklin Templeton"), a leading global asset management firm operating as Franklin Templeton. Except for a minority stake owned by employees, Putnam U.S. Holdings I, LLC ("Putnam Holdings"), the direct parent company of Putnam Management, is a wholly owned subsidiary of Franklin Templeton. Investment management for the accounts in the Composite is provided by two wholly owned subsidiaries of Putnam Holdings, each an indirect, wholly owned subsidiary of Franklin Templeton: The Putnam Advisory Company, LLC and the Investment Manager (together, the "Putnam Advisory Entities"). Composite performance information represents actual performance of all accounts that have (i) substantially similar investment policies, objectives, and strategies and (ii) are managed by the Putnam Advisory Entities. The Composite is intended to illustrate the past performance of the Putnam Advisory Entities in managing an account that is substantially similar to the Fund. The Fund's portfolio manager played a primary role in the management of accounts in the Composite during the entire period for which the Composite's performance is shown. Total Fund expenses may be higher than fees reflected in net performance for the Composite.

Included below are the average annual total returns over the 1-year, 3-year, 5-year, and since inception periods ended April 30, 2025 for the Composite. The Composite includes the performance of the Fund and one other account (the "Other Account"). The Other Account, unlike the Fund, is not registered under the Investment Company Act of 1940, as amended (the "1940 Act"), and, therefore, is not subject to certain investment restrictions, diversification requirements, and other regulatory requirements imposed by the 1940 Act and the Internal Revenue Code of 1986. If the Other Account had been registered under the 1940 Act, its returns might have been lower. For each period shown, we have also included information about the average annual total return for the Putnam Business Development Companies Linked Benchmark, which represents the performance of the Wells Fargo Business Development Company Index through May 31, 2021, and the performance of the S&P BDC Index thereafter. The Composite's benchmark was changed prospectively on June 1, 2021, from the Wells Fargo Business Development Company Index to the S&P BDC Index. This Composite benchmark change was made as a result

Prospectus 33

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of the Wells Fargo Business Development Company Index being discontinued. The S&P BDC Index is designed to track leading business development companies ("BDCs") that trade on major U.S. exchanges. The Wells Fargo Business Development Company Index was a float adjusted, capitalization-weighted index that was intended to measure the performance of all BDCs that are listed on the New York Stock Exchange or NASDAQ and satisfy specified market capitalization and other eligibility requirements. The index results assume the reinvestment of dividends or interest paid on the securities constituting the index. Unlike the accounts in the Composite (*i.e.*, the Other Account and the Fund), an index does not incur fees or expenses.

Past performance is not a guarantee of future results. An investment in the Fund can lose value. Composite returns are presented in U.S. dollars and include the reinvestment of dividends and interest. The Fund's return will be reduced by management fees. Gross Composite performance includes the deduction of transaction costs but does not include the deduction of management fees and other expenses that may be incurred in managing an investment account. A portfolio's return will be reduced by advisory and other fees. The net Composite performance below reflects the deduction of a model fee (85 bps), equal to the actual management fee incurred by a portfolio in the Composite or the highest management fee charged to a prospect of the strategy, whichever is higher. Actual management fees may vary among clients with the same investment strategy. The inception date for the Composite was November 30, 2017. As of April 30, 2025 there were 2 accounts (*i.e.*, the Other Account and the Fund) in the Composite with combined assets of approximately $194.2million million. Actual performance of the Other Account and the Fund will be different, and may be higher or lower, than the Composite returns shown below.

#### Average Annual Total Returns (for periods ending April 30, 2025)
34 Prospectus

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---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | Inception Date | 1-year | 3-year | 5-year | Since<br> Inception of<br> Composite<br>|
| &nbsp;&nbsp;&nbsp; Putnam Business Development Companies Composite (gross-of-fees)<br>| 11/30/2017 | 3.09% | 11.59% | 22.71% | 13.50% |
| &nbsp;&nbsp;&nbsp; Putnam Business Development Companies Composite (net-of-fees)<br>| 11/30/2017 | 2.21% | 10.63% | 21.67% | 12.53% |
| &nbsp;&nbsp;&nbsp; Putnam Business Development Companies Composite Linked Benchmark<br>|  | 1.80% | 8.83% | 18.67% | 8.30% |

---

Prospectus 35

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#### For more information about Putnam BDC Income ETF
You can learn more about the fund in the following documents:

#### Annual/Semiannual Report to Shareholders and Form N-CSR Filed with the SEC
Contain additional information about the fund's investments. The fund's annual report also discusses the market conditions and investment strategies that significantly affected the fund's performance during its last fiscal year. In Form N-CSR, you will find the fund's annual and semi-annual financial statements.

#### Statement of Additional Information ("SAI")
Contains more information about the fund, its investments and policies. It is incorporated by reference (is legally a part of this prospectus).

For a free copy of the current annual/semiannual report, financial statements or the SAI, please contact your investment representative or call us at the number below. You also can view the current annual/semiannual report, financial statements and the SAI online through www.franklintempleton.com.

Reports and other information about the fund are available on the EDGAR Database on the SEC's Website at http://www.sec.gov, and copies of this information may be obtained, after paying a duplicating fee, by electronic request at the following email address: publicinfo@sec.gov.

Putnam Investments

100 Federal Street

Boston, MA 02110

1-800-225-1581

811-23643 39500-P 09/25

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| | |
|:---|:---|
| ![LOGO](g842776g1g01a01.jpg) | ![LOGO](g842776g1g01a02.jpg) |

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Putnam

BioRevolution<sup>™</sup> ETF

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp; **Prospectus** | September 1, 2025 |

---

---

| | |
|:---|:---|
| **Fund Symbol:** SYNB | **Principal U.S. Listing Exchange:** NYSE Arca, Inc. |

---

#### Investment Category: Domestic Equity

#### This prospectus explains what you should know about this fund before you invest. Please read it carefully.
These securities have not been approved or disapproved by the Securities and Exchange Commission ("SEC") nor has the SEC passed upon the accuracy or adequacy of this prospectus. Any statement to the contrary is a crime.

------

Table of contents

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| | |
|:---|:---|
|  [Fund summary](#pro919709_1) | 2 |
|  [Fund details](#pro919709_2) | 8 |
|  [Fund management](#pro919709_3) | 20 |
|  [Shareholder information](#pro919709_4) | 21 |
|  [Distribution plans and payments to intermediaries](#pro919709_5) | 25 |
|  [Fund distributions and taxes](#pro919709_6) | 27 |
|  [Financial highlights](#pro919709_7) | 30 |

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### Fund summary

#### Goal
The fund seeks long-term capital appreciation.

#### Fees and expenses
The following tables describe the fees and expenses you may pay if you buy, hold and sell shares of the fund. **You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.**

**Annual Fund Operating Expenses** 

#### (expenses you pay each year as a percentage of the value of your investment)

---

| | | | |
|:---|:---|:---|:---|
| **Management<br> fees** | **Distribution<br> and service (12b-1) fees** | **Other<br> expenses** | **Total annual fund<br> operating expenses** |
|  0.70% |  | 0.00% | 0.70% |

---

#### Example
The following hypothetical example is intended to help you compare the cost of investing in the fund with the cost of investing in other funds. It assumes that you invest $10,000 in the fund for the time periods indicated and then redeem all your shares at the end of those periods. It assumes a 5% return on your investment each year and that the fund's operating expenses remain the same. Your actual costs may be higher or lower.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
|  BioRevolution ETF | $72 | $224 | $390 | $871 |

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#### Portfolio turnover
The fund pays transaction-related costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher turnover rate may indicate higher transaction costs and may result in higher taxes when the fund's shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or the above example, affect fund performance. The fund's turnover rate in the most recent fiscal year was 32%.

### Investments, risks, and performance

#### Principal investment strategies
The fund invests mainly in common stocks (growth or value stocks or both) of companies worldwide of any size with a focus on "biology revolution" companies. Biology revolution companies are companies that the Investment Manager, as defined below, believes offer the opportunity to capitalize on a convergence of technological developments in the life sciences sector that

2 Prospectus

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change the ability to understand and design biology to scale and include technology-enabling companies, biotechnology or "synthetic biology companies", and existing companies that may benefit from the biology revolution in certain cases by reducing operational risks (i.e., providing supply chain redundancy or sourcing of new or rare materials), mitigating environmental risks (i.e., reducing greenhouse gas emissions), and/or fostering consumer demand for the company's products.

Technology-enabling companies have products that contribute to the research, development, production, diagnosis, and treatment of biology. Examples of these products include instruments like DNA sequencers, mass spectrometers, electron microscopes and PCR technology that have helped enable advances in the fields of genomics, proteomic, and cell research. The Investment Manager believes that technology-enabling companies have the potential for increased demand for their products from companies engaged in biological research or development of biological products. "Synthetic biology companies" are companies that manufacture products made from biological materials, including companies that are engaged in redesigning organisms for useful purposes by engineering them to have new abilities to solve problems in medicine, manufacturing, and agriculture. Examples would include companies in the plant-based or alternative meat industries.

Stocks of biology revolution companies are typically, but not always, considered to be growth stocks. Growth stocks are stocks of companies whose revenues, earnings, or cash flows are expected to grow faster than those of similar firms, and whose business growth and other characteristics may lead to an increase in stock price.

Under normal circumstances, the fund invests at least 80% of the fund's net assets in equity securities of biology revolution companies. This policy is non-fundamental and may be changed only after 60 days' notice to shareholders. From time to time, the fund may invest a significant portion of its assets in companies in one or more related industries or sectors, including the health care, consumer discretionary, consumer staples, biotechnology and materials sectors.

The Investment Manager 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. The Investment Manager may also consider other factors that it believes will cause the stock price to rise.

The fund is "non-diversified," which means it may invest a greater percentage of its assets in fewer issuers than a "diversified" fund. The fund expects to invest in a limited number of issuers.

#### Risks
It is important to understand that you can lose money by investing in the fund.

Prospectus 3

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**Risk of investing in biology revolution companies:** Biology revolution companies face intense competition and potentially rapid product obsolescence. Biology revolution companies may be adversely affected by the loss or impairment of intellectual property rights and other proprietary information or changes in government regulations. The potential for an increased amount of required disclosure or lack of access to proprietary scientific information could negatively impact the performance of these companies. The fund may invest in companies that operate in industries that are likely to be impacted by the biology revolution over time. However, certain of these companies do not currently derive a substantial portion of their current revenues from biology revolution activities and there is no assurance that any company will do so in the future, which may adversely affect the ability of the fund to achieve its investment objective.

**Fluctuation of** **net asset value and share price risk:** Shares may trade at a larger premium or discount to the fund's net asset value than shares of other ETFs. The net asset value of the fund will generally fluctuate with changes in the market value of the fund's holdings. The fund's shares can be bought and sold in the secondary market at market prices. Disruptions to creations and redemptions, the existence of extreme market volatility or potential lack of an active trading market for the fund's shares may result in the fund's shares trading significantly above (at a premium) or below (at a discount) net asset value or the intraday value of the fund's holdings. In addition, in stressed market conditions or periods of market disruption or volatility, the market for fund shares may become less liquid in response to deteriorating liquidity in the markets for the fund's underlying portfolio holdings.

**Trading issues risk:** There is no guarantee that the fund will be able to attract market makers and authorized participants. Market makers and authorized participants are not obligated to make a market in the fund's shares or to submit purchase and redemption orders for creation units. The market prices of the fund's shares are expected to fluctuate, in some cases materially, in response to changes in the fund's net asset value, the intraday value of the fund's holdings and supply and demand for the fund's shares. The Investment Manager cannot predict whether the fund's shares will trade above, below or at their net asset value or the intraday value of the fund's holdings. During such periods, investors may incur significant losses if they sell shares.

The securities held by the fund may be traded in markets that close at a different time than the exchange on which the fund's shares are listed. Liquidity in those securities may be reduced after the applicable closing times. Accordingly, during the time when the exchange is open but after the applicable market closing, fixing or settlement times, bid-ask spreads on the exchange and the corresponding premium or discount to the shares' net asset value may widen.

**Large shareholder transaction risk:** The fund is subject to the risk that shareholders will purchase or redeem large quantities of shares of the fund. The fund may be an investment option for mutual funds that are managed by the Investment Manager, as defined below, and its affiliates as "funds of

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funds." Additionally, other investors from time to time may make substantial investments in the fund. Such shareholders may at times be considered to control the fund. In addition, a large number of shareholders may collectively purchase or redeem fund shares in large amounts rapidly or unexpectedly. Large shareholder transactions may adversely affect the fund's liquidity and net assets. These redemptions may also adversely affect the fund's performance if the fund is forced to sell securities, which may also increase the fund's brokerage costs.

**Authorized participant concentration risk:** Only an authorized participant may engage in creation and redemption transactions directly with the fund. The fund may have a limited number of financial institutions that act as authorized participants, none of which are obligated to engage in creation and/or redemption transactions. To the extent that those authorized participants do not engage in creation and redemption orders, there may be a significantly diminished trading market for fund shares or fund shares may trade at a discount (or premium) to net asset value and possibly face trading halts and/or de-listing.

**Cash transactions risk:** Unlike certain ETFs, the fund may effect creations and redemptions in cash or partially in cash. Therefore, it may be required to sell portfolio securities and subsequently recognize gains on such sales that the fund might not have recognized if it were to distribute portfolio securities in-kind. As such, investments in the fund's shares may be less tax-efficient than an investment in an ETF that distributes portfolio securities entirely in-kind.

**Market risk** **:** 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, outbreaks of infectious illnesses or other widespread public health issues, and factors related to a specific issuer, asset class, geography, industry or sector. These and other factors may lead to increased volatility and reduced liquidity in the fund's portfolio holdings, may negatively impact the fund's performance, and may exacerbate other risks to which the fund is subject.

**Common stock risk:** Common stock represents an ownership interest in a company. The value of a company's stock may fall or fail to rise as a result of factors directly relating to that company, such as decisions made by its management or lower demand for the company's products or services. A stock's value may also fall because of factors affecting not just the company, but also other companies in the same industry or in a number of different industries, such as increases in production costs. Growth stocks may be more susceptible to earnings disappointments, and value stocks may fail to rebound. These risks are generally greater for small and midsize companies.

**Foreign** **investments risk:** Foreign investments involve certain special risks. For example, their values may decline in response to changes in currency exchange rates, unfavorable political and legal developments, unreliable or untimely information, and economic and financial instability. In addition, the

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liquidity of these investments may be more limited than for most U.S. investments, which means the fund may at times be unable to sell them at desirable prices. Foreign settlement procedures may also involve additional risks. These risks are generally greater in the case of developing (also known as emerging) markets, which typically have less developed legal and financial systems.

**Small and midsize companies risk:** Stocks of small and midsize companies often trade in smaller volumes, and their prices may fluctuate more than stocks of larger companies. Stocks of these companies may therefore be more vulnerable to adverse developments than those of larger companies.

**Industry or sector concentration risk:** From time to time, the fund may invest a significant portion of its assets in companies in one or more related industries or sectors, including the health care, consumer discretionary, consumer staples, biotechnology and materials sectors, which would make the fund more vulnerable to adverse developments affecting those industries or sectors.

**Non-diversified risk:** As a non-diversified fund, the fund invests in fewer issuers and is more vulnerable than a more broadly diversified fund to fluctuations in the values of the securities it holds. Moreover, the gains and losses on a single investment may have a greater impact on the fund's net asset value and may make the fund more volatile than more diversified funds.

**Management and operational risk:** There is no guarantee that the investment techniques, analyses, or judgments that the Investment Manager applies in making investment decisions for the fund will produce the intended outcome or that the investments selected for the fund will perform as well as other securities that were not selected for the fund. The Investment Manager, or the fund's other service providers, may experience disruptions or operating errors that could negatively impact the fund.

The fund may not achieve its goal, and it is not intended to be a complete investment program. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

### Performance
The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund's performance from year to year. The table shows the average annual total returns of the fund and also compares the fund's performance with the average annual total returns of a broad measure of market performance and an additional index with characteristics relevant to the fund. The fund makes updated performance information, including its current net asset value per share, available at www.franklintempleton.com.

*The fund's past performance (before and after taxes) is not necessarily an indication of how the fund will perform in the future.* 

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Annual total returns

![LOGO](g842776g1g05a01.jpg)

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| | | |
|:---|:---|:---|
|  Best Quarter: | Q4 2023 | 9.17% |
|  Worst Quarter: | Q4 2024 | -9.86% |
|  As of June 30, 2025, the fund's year-to-date return was -4.34%. | As of June 30, 2025, the fund's year-to-date return was -4.34%. | As of June 30, 2025, the fund's year-to-date return was -4.34%. |

---

#### Average annual total returns
(for periods ended 12/31/24)

---

| | | |
|:---|:---|:---|
| **BioRevolution ETF** | **1 year** | **Since** <br> **Inception<sup>1</sup>**  |
| Return before taxes | 2.47% | 8.19% |
| Return after taxes on distributions | 2.29% | 8.09% |
| Return after taxes on distributions and sales of fund shares | 1.58% | 6.30% |
| Russell 3000 Index (no deduction for fees, expenses or taxes) | 23.81% | 24.79% |
| S&P 500 Index (no deduction for fees, expenses or taxes) | 25.02% | 25.62% |

---

<sup>1.</sup> Since inception September 29, 2022.

After-tax returns reflect the historical highest individual federal marginal income tax rates and do not reflect state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. These after-tax returns do not apply if you hold your fund shares through a 401(k) plan, an IRA, or another tax-advantaged arrangement.

Important data provider notices and terms are available at www.franklintempletondatasources.com. All data is subject to change.

### Your fund's management

#### Investment Manager
Putnam Investment Management, LLC ("Putnam Management" or the "Investment Manager")

#### Sub-advisors
Franklin Advisers, Inc. ("Franklin Advisers")

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Franklin Templeton Investment Management Limited ("FTIML")

#### Portfolio manager

#### William Rives, CFA
Portfolio Manager of Putnam Management and portfolio manager of the fund since 2022.

#### Purchase and sale of fund shares
Shares of the fund are listed and traded on an exchange, and individual fund shares may only be bought and sold in the secondary market through a broker or dealer at market price. These transactions, which do not involve the fund, are made at market prices that may vary throughout the day, rather than at net asset value. Shares of the fund may trade at a price greater than the fund's net asset value (premium) or less than the fund's net asset value (discount). An investor may incur costs attributable to the difference between the highest price a buyer is willing to pay to purchase shares (bid) and the lowest price a seller is willing to accept for shares (ask) when buying or selling fund shares in the secondary market (the "bid-ask spread"). Recent information, including information regarding the fund's net asset value, market price, premiums and discounts, and bid-ask spread, is available at www.franklintempleton.com.

#### Tax information
The fund's distributions will be taxed as ordinary income or capital gains unless you hold the shares through a tax-advantaged arrangement, in which case you will generally be taxed only upon withdrawal of monies from the arrangement.

#### Financial intermediary compensation
If you purchase the fund through a broker/dealer or other financial intermediary (such as a bank or financial professional), the fund and its related companies may pay that intermediary for the sale of fund shares and related services. Please bear in mind that these payments may create a conflict of interest by influencing the broker/dealer or other intermediary to recommend the fund over another investment. Ask your advisor or visit your advisor's website for more information.

### Fund details

#### Principal investment strategies
The fund invests mainly in common stocks (growth or value stocks or both) of companies worldwide of any size with a focus on "biology revolution" companies. Biology revolution companies are companies that the Investment Manager believes offer the opportunity to capitalize on a convergence of technological developments in the life sciences sector that change the ability to understand and design biology to scale and include technology-enabling companies, biotechnology or "synthetic biology companies", and existing companies that may benefit from the biology revolution in certain cases by

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reducing operational risks (i.e., providing supply chain redundancy or sourcing of new or rare materials), mitigating environmental risks (i.e., reducing greenhouse gas emissions), and/or fostering consumer demand for the company's products.

Technology-enabling companies have products that contribute to the research, development, production, diagnosis, and treatment of biology. Examples of these products include instruments like DNA sequencers, mass spectrometers, electron microscopes and PCR technology that have helped enable advances in the fields of genomics, proteomic, and cell research. The Investment Manager believes that technology-enabling companies have the potential for increased demand for their products from companies engaged in biological research or development of biological products. "Synthetic biology companies" are companies that manufacture products made from biological materials, including companies that are engaged in redesigning organisms for useful purposes by engineering them to have new abilities to solve problems in medicine, manufacturing, and agriculture. Examples would include companies in the plant-based or alternative meat industries. The Investment Manager believes that the biology revolution can enable novel products, particularly in the health care sector, including, for example, cell & gene therapies and cancer diagnostics. Other examples include biology-based materials to more efficiently manufacture clothing, packaging, electronics, food, construction materials and improved performance of existing products (e.g., pesticides with lower toxicity.)

Stocks of biology revolution companies are typically, but not always, considered to be growth stocks. Growth stocks are stocks of companies whose revenues, earnings, or cash flows are expected to grow faster than those of similar firms, and whose business growth and other characteristics may lead to an increase in stock price.

Under normal circumstances, the fund invests at least 80% of the fund's net assets in equity securities of biology revolution companies. This policy is non-fundamental and may be changed only after 60 days' notice to shareholders. From time to time, the fund may invest a significant portion of its assets in companies in one or more related industries or sectors, including the health care, consumer discretionary, consumer staples, biotechnology and materials sectors.

The Investment Manager 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. The Investment Manager may also consider other factors that it believes will cause the stock price to rise. The Investment Manager may also use derivatives, such as forward contracts, futures, options, certain foreign currency transactions, warrants and swap contracts, for both hedging and non-hedging purposes.

The fund is "non-diversified," which means it may invest a greater percentage of its assets in fewer issuers than a "diversified" fund. The fund expects to invest in a limited number of issuers.

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The Investment Manager expects to integrate environmental, social, or governance ("ESG") considerations, where the Investment Manager considers them material and relevant, into its fundamental research process and investment decision-making for the fund, although ESG considerations do not represent a primary focus of the fund.

#### Principal investment risks
The principal and certain additional risks of investing in the fund are described below. These risks and other factors may adversely affect the fund's net asset value, market price and performance. When you sell your shares, they may be worth more or less than what you paid for them, which means that you could lose money as a result of your investment. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund may not achieve its investment objective, and it is not intended to be a complete investment program. The fund's Statement of Additional Information ("SAI") contains additional information about the fund's investment policies and risks.

**Risk of investing in biology revolution companies:** Biology revolution companies face intense competition and potentially rapid product obsolescence. Biology revolution companies may be adversely affected by the loss or impairment of intellectual property rights and other proprietary information or changes in government regulations or policies. These companies may rely on their domestic government for specific regulatory approvals, which may involve a long and costly process, and, subsequent to approval, they may be subject to product liability litigation and similar claims. The potential for an increased amount of required disclosure or lack of access to proprietary scientific information could negatively impact the performance of these companies. The fund may invest in companies that operate in industries that are likely to be impacted by the biology revolution over time. However, certain of these companies do not currently derive a substantial portion of their current revenues from biology revolution activities and there is no assurance that any company will do so in the future, which may adversely affect the ability of the fund to achieve its investment objective.

**Fluctuation of** **net asset value and share price risk:** Shares may trade at a larger premium or discount to net asset value than shares of other ETFs. The net asset value of the fund's shares will generally fluctuate with changes in the market value of the fund's holdings. The fund's shares are listed on an exchange and can be bought and sold in the secondary market at market prices. The market prices of shares will fluctuate in accordance with changes in net asset value and supply and demand on the listing exchange. Although the arbitrage process is designed to permit the shares of the fund to trade at market prices that are at or close to net asset value, it is possible that the market price and net asset value will vary significantly. As a result, you may sustain losses if you pay more than the shares' net asset value when you purchase shares or receive less than the shares' net asset value when you sell shares, in the secondary market. During periods of disruptions to creations and

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redemptions, the existence of extreme market volatility, or lack of an active trading market for the fund's shares, the market price of fund shares is more likely to differ significantly from the fund's net asset value or the intraday value of the fund's holdings. During such periods, you may be unable to sell your shares or may incur significant losses if you sell your shares. There are various methods by which investors can purchase and sell shares and various orders that may be placed. Investors should consult their financial intermediary before purchasing or selling shares of the fund. Disruptions at market makers, authorized participants or market participants may also result in significant differences between the market price of the fund's shares and the fund's net asset value. In addition, in stressed market conditions or periods of market disruption or volatility, the market for shares may become less liquid in response to deteriorating liquidity in the markets for the fund's underlying portfolio holdings.

The market price of shares during the trading day, like the price of any exchange-traded security, includes a "bid/ask" spread charged by the exchange specialist, market makers, or other participants that trade the particular security. In times of severe market disruption or volatility, the bid/ask spread can increase significantly. At those times, shares are most likely to be traded at a discount to net asset value, and the discount is likely to be greatest when the price of shares is falling fastest, which may be the time that you most want to sell your shares.

**Trading issues risk** **:** There is no guarantee that the fund will be able to attract market makers and authorized participants. There are no obligations of market makers to make a market in the fund's shares or of authorized participants to submit purchase or redemption orders for creation units.

The market prices of the fund's shares are expected to fluctuate, in some cases materially, in response to changes in the fund's net asset value, the intraday value of the fund's holdings and supply and demand for the fund's shares. The Investment Manager cannot predict whether the fund's shares will trade above, below or at their net asset value or the intraday value of the fund's holdings. During such periods, investors may incur significant losses if they sell shares.

The securities held by the fund may be traded in markets that close at a different time than the exchange on which the fund's shares are listed. Liquidity in those securities may be reduced after the applicable closing times. Accordingly, during the time when the exchange is open but after the applicable market closing, fixing or settlement times, bid-ask spreads on the exchange and the corresponding premium or discount to the shares' net asset value may widen.

In addition, trading of shares in the secondary market may be halted, for example, due to activation of market-wide "circuit breakers." If trading halts or an unanticipated early closing of the listing exchange occurs, a shareholder may be unable to purchase or sell shares of the fund.

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If the fund's shares are delisted from the listing exchange, the Investment Manager may seek to list the fund shares on another market, merge the fund with another exchange-traded fund or traditional mutual fund, or redeem the fund shares at net asset value.

Shares of the fund, similar to shares of other issuers listed on a stock exchange, may be sold short and are therefore subject to the risk of increased volatility and price decreases associated with being sold short.

**Large shareholder transaction risk:** The fund is subject to the risk that shareholders will purchase or redeem large quantities of shares of the fund (such purchases or redemptions, "large shareholder transactions"). The fund may be an investment option for mutual funds that are managed by the Investment Manager and its affiliates as "funds of funds." Additionally, other investors from time to time may make substantial investments in the fund. Such shareholders may at times be considered to control the fund. In addition, a large number of shareholders collectively may purchase or redeem fund shares in large amounts rapidly or unexpectedly. A number of circumstances may cause the fund to experience large shareholder transactions, such as changes in the eligibility criteria for the fund; liquidations, reorganizations, repositionings, or other announced fund events; or changes in investment objectives, strategies, policies, risks, or investment personnel. Large redemptions may be more likely during times of market stress or reduced liquidity, exacerbating the potential impact on the fund.

Large shareholder transactions may adversely affect the fund's liquidity and net assets. These transactions could adversely affect the fund's performance if the fund is forced to sell portfolio securities to satisfy redemption requests or purchase securities for the portfolio in connection with the investment of subscription proceeds when the fund would otherwise not do so, and at unfavorable prices, which may increase the fund's brokerage costs and accelerate the realization of taxable income and/or gains to shareholders. The effects of taxable income and/or gains resulting from large shareholder transactions would particularly impact non-redeeming shareholders who do not hold their fund shares in an IRA, 401(k) plan or other tax-advantaged plan. To the extent that such transactions result in short-term capital gains, such gains will generally be taxed at the ordinary income tax rate for shareholders who hold fund shares in a taxable account. In addition, fund returns also may be adversely affected if the fund holds a portion of its assets in liquid, cash-like investments in connection with or in anticipation of shareholder redemptions.

**Authorized participant concentration risk:** Only authorized participants may engage in creation and redemption transactions directly with the fund. The fund may have a limited number of financial institutions that act as authorized participants, none of which are obligated to engage in creation and/or redemption transactions. Decisions by market makers or authorized participants to reduce their role with respect to market making or creation and redemption activities during times of market stress, or a decline in the number of authorized participants due to decisions to exit the business, bankruptcy, or other factors, could inhibit the effectiveness of the arbitrage process in

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maintaining the relationship between the underlying value of the fund's portfolio securities and the market price of fund shares. To the extent no other authorized participants are able to step forward to create or redeem, shares may trade at a discount (or premium) to net asset value and possibly face delisting.

**Cash transactions risk:** Unlike certain ETFs, the fund may effect creations and redemptions in cash or partially in cash. Therefore, it may be required to sell portfolio securities and subsequently recognize gains on such sales that the fund might not have recognized if it were to distribute portfolio securities in-kind. As such, investments in the fund's shares may be less tax-efficient than an investment in an ETF that distributes portfolio securities entirely in-kind.

**Environmental, social and governance ("ESG") considerations risk:** Although ESG considerations do not represent a primary focus of the fund, the Investment Manager expects to integrate ESG considerations into the fundamental research process and investment decision-making for the fund, where considered material and relevant, and where data is available. The Investment Manager believes that ESG considerations, like other, more traditional subjects of investment analysis such as market position, growth prospects, and business strategy, have the potential to impact financial risk and investment returns. The Investment Manager believes that ESG considerations are best analyzed in combination with a company's fundamentals, including a company's industry, geography, and strategic position. When considering ESG factors, the Investment Manager uses company disclosures, public data sources, and independent third-party data as inputs into their analytical processes. The consideration of ESG factors as part of the fund's investment process does not mean that the fund pursues a specific ESG or sustainable investment strategy, and the Investment Manager may make investment decisions for the fund other than on the basis of relevant ESG considerations.

**Market risk** **:** 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 (including perceptions about monetary policy, interest rates, inflation or the risk of default); government actions (including protectionist measures, intervention in the financial markets or other regulation, and changes in fiscal, monetary or tax policies); geopolitical events or changes (including natural disasters, terrorism and war); outbreaks of infectious illnesses or other widespread public health issues (including epidemics and pandemics); and factors related to a specific issuer, asset class, geography, industry, or sector. Foreign financial markets have their own market risks, and they may be more or less volatile than U.S. markets and may move in different directions. During a general downturn in financial markets, multiple asset classes may decline in value simultaneously. These and other factors may lead to increased volatility and reduced liquidity in the fund's portfolio holdings. During those periods, the fund may experience high levels of shareholder redemptions, and may have to sell securities at times when it would otherwise

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not do so, and at unfavorable prices. These risks may be exacerbated during economic downturns or other periods of economic stress.

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

The United States and other countries are periodically involved in disputes over trade and other matters, which may result in tariffs, investment restrictions and adverse impacts on affected companies and securities. For example, the United States has imposed tariffs and other trade barriers on Chinese exports, has restricted sales of certain categories of goods to China, and has established barriers to investments in China. Trade disputes may adversely affect the economies of the United States and its trading partners, as well as companies directly or indirectly affected and financial markets generally. The United States government has prohibited U.S. persons from investing in Chinese companies designated as related to the Chinese military. These and possible future restrictions could limit the fund's opportunities for investment and require the sale of securities at a loss or make them illiquid. Moreover, the Chinese government is involved in a longstanding dispute with Taiwan that has included threats of invasion. If the political climate between the United States and China does not improve or continues to deteriorate, if China were to attempt unification of Taiwan by force, or if other geopolitical conflicts develop or get worse, economies, markets and individual securities may be severely affected both regionally and globally, and the value of the fund's assets may go down.

**Common stock risk** **:** Common stock represents an ownership interest in a company. The value of a company's stock may fall as a result of factors directly relating to that company, such as decisions made by its management or lower demand for the company's products or services. A stock's value may also fall because of factors affecting not just the company, but also other companies in the same industry or in a number of different industries, such as increases in production costs.

The value of a company's stock may also be affected by changes in financial markets that are relatively unrelated to the company or its industry, such as changes in interest rates, currency exchange rates, or inflation rates. In addition, a company's stock generally pays dividends only after the company

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invests in its own business and makes required payments to holders of its bonds and other debt. For this reason, the value of a company's stock will usually react more strongly than its bonds and other debt to actual or perceived changes in the company's financial condition or prospects.

<u>Growth stocks</u>**:** Companies whose stocks the Investment Manager believes are fast-growing may trade at a higher multiple of current earnings than other stocks. The values of these stocks may be more sensitive to changes in current or expected earnings or to heightened levels of inflation than the values of other stocks. If the Investment Manager's assessment of the prospects for a company's earnings growth is wrong, or if their judgment of how other investors will value the company's earnings growth is wrong, then the price of the company's stock may fall or may not approach the value that the Investment Manager has placed on it. In addition, growth stocks, at times, may not perform as well as value stocks or the stock market in general, and may be out of favor with investors for varying periods of time.

<u>Value stocks</u>: Companies whose stocks the Investment Manager believes are undervalued by the market may have experienced adverse business developments or may be subject to special risks that have caused their stocks to be out of favor. If the Investment Manager's assessment of a company's prospects is wrong, or if other investors do not similarly recognize the value of the company, then the price of the company's stock may fall or may not approach the value that the Investment Manager has placed on it. In addition, value stocks, at times, may not perform as well as growth stocks or the stock market in general, and may be out of favor with investors for varying periods of time.

**Foreign investments risk:** Foreign investments involve certain special risks, including:

● Unfavorable changes in currency exchange rates: Foreign investments are typically issued and traded in foreign currencies. As a result, their values may be affected by changes in exchange rates between foreign currencies and the U.S. dollar.

● Political and economic developments: Foreign investments may be subject to the risks of seizure by a foreign government, direct or indirect impact of sovereign debt default, imposition of economic sanctions, tariffs, trade restrictions, currency restrictions or similar actions (or retaliatory measures taken in response to such actions), and tax increases.

● Unreliable or untimely information: There may be less information publicly available about a foreign company than about most publicly-traded U.S. companies, and foreign companies are usually not subject to accounting, auditing and financial reporting standards and practices as stringent as those in the United States. As a result, the Investment Manager's ability to evaluate a foreign company may be more limited than its ability to evaluate a U.S. company. Foreign securities may trade on markets that are closed when U.S. markets are open. As a result, accurate pricing information based on foreign market prices may not always be available.

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● Limited legal recourse: Legal remedies for investors may be more limited than the remedies available in the United States.

● Limited markets: Certain foreign investments may be less liquid (harder to buy and sell) and more volatile than most U.S. investments, which means the fund may at times be unable to sell these foreign investments at desirable prices. For the same reason, the Investment Manager may at times find it difficult to value the fund's foreign investments.

● Trading practices: Brokerage commissions and other fees are generally higher for foreign investments than for U.S. investments. The procedures and rules governing foreign transactions and custody may also involve delays in payment, delivery or recovery of money or investments.

The risks of foreign investments are typically increased in countries with less developed markets, which are sometimes referred to as emerging markets. Emerging markets may have less developed economies and legal and regulatory systems, and may be susceptible to greater political and economic instability than developed foreign markets. Countries with emerging markets are also more likely to experience high levels of inflation or currency devaluation, and investments in emerging markets may be more volatile and less liquid than investments in developed markets. For these and other reasons, investments in emerging markets are often considered speculative.

Certain risks related to foreign investments may also apply to some extent to U.S.-traded investments that are denominated in foreign currencies, investments in U.S. companies or issuers that are traded in foreign markets or investments in U.S. companies or issuers that have significant foreign operations.

**Industry or sector concentration risk:** From time to time, the fund may invest a significant portion of its assets in companies in one or more related industries or sectors, including the health care, consumer discretionary, consumer staples, biotechnology and materials sectors, which would make the fund more vulnerable to adverse developments affecting those industries or sectors.

<u>Health care industries:</u> Companies that the Investment Manager considers to be in the health care industries encompass two main groups of companies. The first group includes companies who manufacture health care supplies or provide health care-related services, including distributors of products, providers of basic health care services and owners and operators of care facilities and organizations. The second group includes companies in the research, development, production and marketing of pharmaceuticals and biotechnology products. The Investment Manager considers a company to be in the health care industries if, at the time of investment, the Investment Manager determines that at least 50% of the company's assets, revenues or profits are derived from these industries, or if an independent industry source considers it to be in these industries. Events that affect the health care industries will have a greater effect on the fund than they would on a fund that is more widely diversified among a number of unrelated industries. Examples

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of such events include technological advances that make existing products and services obsolete, and changes in regulatory policies concerning approvals of new drugs, medical devices or procedures. In addition, changes in governmental payment systems and private payment systems, such as increased use of managed care arrangements, may be more likely to adversely affect the fund than if the fund were more widely diversified.

<u>Consumer</u> <u>staples and consumer discretionary sectors</u><u>:</u> Companies that the Investment Manager considers to be in the consumer staples and consumer discretionary products and services industries include companies primarily engaged in the manufacture, sale or distribution of consumer staples and consumer discretionary products and services. Consumer staples are generally essential products for which demand tends to remain stable over economic cycles, such as food, beverages, tobacco and household and personal care products. Consumer discretionary products and services are generally non-essential products and services for which demand tends to increase as consumers' disposable income increases, such as automobiles, apparel, electronics, home furnishings, and travel and leisure products and services. The Investment Manager considers a company to be in the consumer staples and consumer discretionary products and services industries if at the time of investment the Investment Manager determines that at least 50% of the company's assets, revenues or profits are derived from these industries, or if an independent industry source considers the company to be in these industries. Events that affect the consumer staples and consumer discretionary products and services industries will have a greater effect on the fund than they would on a fund that is more widely diversified among a number of unrelated industries. For example, the consumer staples industries can be significantly affected by demographic and product trends, competitive pricing, marketing campaigns, environmental factors, government regulation, the performance of the overall economy, interest rates and consumer confidence. Similarly, the consumer discretionary industries can be significantly affected by the performance of the overall economy, interest rates, competition, consumer confidence, disposable household income and consumer spending, and changes in demographics and consumer tastes.

<u>Materials</u> <u>sector</u><u>:</u> Companies in the materials sector could be affected by, among other things, commodity prices, government regulation, inflation expectations, resource availability, and economic cycles.

**Non-diversified risk:** As a non-diversified fund, the fund invests in fewer issuers and is more vulnerable than a more broadly diversified fund to fluctuations in the values of the securities it holds. Moreover, the gains and losses on a single investment may have a greater impact on the fund's net asset value and may make the fund more volatile than more diversified funds.

**Small and midsize companies risk:** These companies, many of which may have a market capitalization of less than $1 billion, are more likely than larger companies to have limited product lines, markets or financial resources, lack profitability or depend on a small management group. Stocks of these companies often trade in smaller volumes, and their prices may fluctuate more

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than stocks of larger companies. Stocks of small and midsize companies may therefore be more vulnerable to adverse developments than those of larger companies. In addition, stocks of small and midsize companies, at times, may not perform as well as stocks of larger companies or the stock market in general, and may be out of favor with investors for varying periods of time.

**Derivatives risk** **:** The fund may engage in a variety of transactions involving derivatives, such as forward contracts, futures, options, certain foreign currency transactions, warrants and swap contracts although they do not represent a primary focus of the fund. Derivatives are financial instruments whose value depends upon, or is derived from, the value of something else, such as one or more underlying investments, pools of investments, indexes or currencies. The fund may make use of "short" derivative positions, the values of which typically move in the opposite direction from the price of the underlying investment, pool of investments, index or currency. The fund may use derivatives both for hedging and non-hedging purposes, including as a substitute for a direct investment in the securities of one or more issuers. However, the fund may also choose not to use derivatives based on the Investment Manager's evaluation of market conditions or the availability of suitable derivatives. Investments in derivatives may be applied toward meeting a requirement to invest in a particular kind of investment if the derivatives have economic characteristics similar to that investment.

Derivatives involve special risks and may result in losses. The successful use of derivatives depends on the Investment Manager's ability to manage these sophisticated instruments. Some derivatives are "leveraged," which means they provide the fund with investment exposure greater than the value of the fund's investment in the derivatives. As a result, these derivatives may magnify or otherwise increase investment losses to the fund. The risk of loss from certain short derivative positions is theoretically unlimited. The value of derivatives may move in unexpected ways due to unanticipated market movements, the use of leverage, imperfect correlation between the derivative instrument and the reference asset, or other factors, especially in unusual market conditions, and volatility in the value of derivatives could adversely impact the fund's returns, obligations and exposures.

Other risks arise from the potential inability to terminate or sell derivative positions. Derivatives may be subject to liquidity risk due to the fund's obligation to make payments of margin, collateral, or settlement payments to counterparties. A liquid secondary market may not always exist for the fund's derivative positions. In fact, certain over-the-counter instruments (investments not traded on an exchange) may not be liquid. Over-the-counter instruments also involve the risk that the other party to the derivative transaction may not be willing or able to meet its obligations with respect to the derivative transaction. The risk of a party failing to meet its obligations may increase if the fund has significant exposure to that counterparty. Derivative transactions may also be subject to operational risk, including due to documentation and settlement issues, system failures, inadequate controls and human error, and legal risk due to insufficient documentation, insufficient capacity or authority of

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a counterparty, or issues with respect to the legality or enforceability of the derivative contract. For further information about additional types and risks of derivatives, see *Miscellaneous Investments, Investment Practices and Risks* in the SAI.

**Liquidity and illiquid investments risk:** The fund may invest up to 15% of its net assets in illiquid investments, which may be considered speculative and which may be difficult to sell. The sale of many of these investments is prohibited or limited by law or contract. Some investments may be difficult to value for purposes of determining the fund's net asset value. Certain other investments may not have an active trading market due to adverse market, economic, industry, political, regulatory, geopolitical, environmental, public health, and other conditions, including investors trying to sell large quantities of a particular investment or type of investment, or lack of market makers or other buyers for a particular investment or type of investment. The fund may not be able to sell its illiquid investments when the Investment Manager considers it desirable to do so, or the fund may be able to sell them only at less than their value.

**Management and operational risk:** The fund is actively managed and its performance will reflect, in part, the Investment Manager's ability to make investment decisions that seek to achieve the fund's investment objective. There is no guarantee that the investment techniques, analyses, or judgments that the Investment Manager applies in making investment decisions for the fund will produce the intended outcome or that the investments selected for the fund will perform as well as other securities that were not selected for the fund. As a result, the fund may underperform its benchmark or other funds with a similar investment goal and may realize losses. In addition, the Investment Manager, or the fund's other service providers, may experience disruptions or operating errors that could negatively impact the fund. Although service providers may have operational risk management policies and procedures and take appropriate precautions to avoid and mitigate risks that could lead to disruptions and operating errors, it may not be possible to identify all of the operational risks that may affect the fund or to develop processes and controls to completely eliminate or mitigate their occurrence or effects.

**Portfolio turnover rate** **:** The fund's portfolio turnover rate measures how frequently the fund buys and sells investments. A portfolio turnover rate of 100%, for example, would mean that the fund sold and replaced securities valued at 100% of the fund's assets within a one-year period. Funds with high turnover may be more likely to realize capital gains that must be distributed to shareholders as taxable income. High turnover may also cause a fund to pay more brokerage commissions and other transaction costs (including imputed transaction costs), which may detract from performance. The fund's portfolio turnover rate and the amount of brokerage commissions it pays and transaction costs it incurs will vary over time based on market conditions.

**Other investments:** In addition to the main investment strategies described above, the fund may also invest in cash or cash equivalents, including money market instruments or short-term instruments such as commercial paper, bank

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obligations (e.g., certificates of deposit and bankers' acceptances), repurchase agreements, and U.S. Treasury bills or other government obligations. The fund may also from time to time invest all or a portion of its assets, including any cash balances, in money market and/or short-term bond funds advised by the Investment Manager or its affiliates. The percentage of the fund invested in cash and cash equivalents and such money market and short-term bond funds is expected to vary over time and will depend on various factors, including market conditions, purchase and redemption activity by fund shareholders, and the Investment Manager's assessment of the cash level that is appropriate to allow the fund to pursue investment opportunities as they arise and to meet shareholder redemption requests. Large cash positions may dampen performance and may prevent the fund from achieving its goal. These practices may be subject to other risks, as described under *Miscellaneous Investments, Investment Practices and Risks* in the SAI.

**Temporary defensive strategies:** In response to adverse market, economic, political or other conditions, the fund may take temporary defensive positions, such as investing some or all of the fund's assets in cash and cash equivalents, that differ from the fund's usual investment strategies. However, the fund may choose not to use these temporary defensive strategies for a variety of reasons, even in very volatile market conditions. If the fund employs these strategies, the fund may miss out on investment opportunities and may not achieve its goal. Additionally, while temporary defensive strategies are mainly designed to limit losses, they may not work as intended.

**Changes in policies:** The Trustees may change the fund's goal, investment strategies and other policies set forth in this prospectus without shareholder approval, except as otherwise provided in the prospectus or SAI.

### Fund management

#### The fund's investment manager
Putnam Management, 100 Federal Street, Boston MA 02110, is the fund's investment manager, responsible for making investment decisions for the fund and managing the fund's other affairs and business. Putnam Management is an indirect, wholly-owned subsidiary of Franklin Resources Inc. ("Resources"). Together, Putnam Management and its affiliates manage, as of June 30, 2025, $1.61 trillion in assets, and have been in the investment management business since 1947.

Under an agreement with the Investment Manager, Franklin Advisers, One Franklin Parkway, San Mateo, CA 94403-1906, serves as the fund's sub-advisor, responsible for providing certain advisory and related services. Franklin Advisers is a wholly-owned subsidiary of Resources. The Investment Manager (and not the fund) will pay a monthly fee to Franklin Advisers based on the costs of Franklin Advisers in providing these services to the fund, which may include a mark-up determined and revised from time to time in accordance with Franklin Templeton's transfer pricing policy, in line with

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applicable tax/transfer pricing regulations, but not to exceed 15% over such costs.

The Investment Manager has retained FTIML, Cannon Place, 78 Cannon Street, London, EC4N 6HL, England, to make investment decisions for such fund assets as may be designated from time to time by the Investment Manager. FTIML is not currently managing any fund assets. If FTIML were to manage any fund assets, the Investment Manager (and not the fund) would pay a monthly sub-management fee to FTIML for its services at the annual rate of 0.25% of the average net asset value of any fund assets managed by FTIML. FTIML is an indirect subsidiary of Resources.

Pursuant to the arrangements described above, investment professionals who are based in foreign jurisdictions may serve as portfolio managers of the fund or provide other investment services, consistent with local regulations.

The fund pays an annual all-inclusive management fee of 0.70% to the Investment Manager based on the fund's average daily net assets. The management fee is calculated and accrued daily. The management fee covers all of the other expenses of the fund with limited exceptions.

For the fiscal year ended April 30, 2025, the fund paid an effective management fee (after any applicable waivers) of 0.69% of the fund's average net assets.

A discussion regarding the basis for the Trustees' approval of the fund's investment management contract and subadvisory contracts is available in the fund's report to shareholders for the period ended October 31, 2023 and in the fund's report on Form N-CSR for the period ended October 31, 2024, respectively.

**Portfolio manager.** The portfolio manager identified below is primarily responsible for the day-to-day management of the fund's portfolio.

**William Rives, CFA Portfolio Manager of Putnam Management** 

Mr. Rives has been a portfolio manager of the fund since 2022. He joined Putnam Management in 2013.

The fund's SAI provides additional information about portfolio manager compensation, other accounts that they manage and their ownership of fund shares.

### Shareholder information

#### Valuation of fund shares
The price of the fund's shares is based on its net asset value. The net asset value per share equals the total value of its assets, less its liabilities, divided by the number of its outstanding shares. Shares are only valued as of the scheduled close of regular trading on the NYSE each day the exchange is open.

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The fund values its investments for which market quotations are readily available at market value. It values all other investments and assets at their fair value, which may differ from recent market prices. For example, the fund may value a stock traded on an exchange at its fair value when the relevant exchange closes early or trading in the stock is suspended. It may also value a stock at fair value if recent transactions in the stock have been very limited or if, in the case of a security traded on a market that closes before the NYSE closes, material information about the issuer becomes available after the close of the relevant market.

The fund translates prices for its investments quoted in foreign currencies into U.S. dollars at current exchange rates, which are generally determined as of 4:00 p.m. Eastern Time each day the NYSE is open. As a result, changes in the value of those currencies in relation to the U.S. dollar may affect the fund's net asset value. Because foreign markets may be open at different times than the NYSE, the value of the fund's shares may change on days when shareholders are not able to buy or sell them. Many securities markets and exchanges outside the U.S. close before the close of the NYSE, and the closing prices for securities in those markets or exchanges may not reflect events that occur after the close but before the scheduled close of regular trading on the NYSE. As a result, the fund has adopted fair value pricing procedures, which, among other things, require the fund to fair value foreign equity securities if there has been a movement in the U.S. market that exceeds a specified threshold. Although the threshold may be revised from time to time and the number of days on which fair value prices will be used will depend on market activity, it is possible that fair value prices will be used by the fund to a significant extent. As noted above, the value determined for an investment using the fund's fair value pricing procedures may differ from recent market prices for the investment.

The fund's most recent net asset value is available at www.franklintempleton.com or by calling 1-800-225-1581.

### Additional information about the fund
The fund is an actively managed ETF. Like other ETFs, shares of the fund are generally purchased and redeemed in creation unit aggregations through authorized participants, shares of the fund are listed and traded on a stock exchange, and individual investors can purchase or sell shares in less than creation unit sizes and for cash in the secondary market through a broker.

<u>Derivative actions</u> 

The fund is a series of Putnam ETF Trust (the "Trust"). The Trust's Amended and Restated Agreement and Declaration of Trust imposes certain conditions on derivative actions that are not otherwise required by law, including, in the case of any claim not arising under the federal securities laws, a requirement that the holders of 10% or more of the total outstanding shares of the applicable fund join the request to commence the action. Although these conditions are intended to permit legitimate inquiries and claims while avoiding

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the time, expense, distraction, and other harm that can be caused to a fund or its shareholders as a result of spurious shareholder demands and derivative actions, they may make it more difficult or costly for fund shareholders to bring derivative actions on behalf of the Trust.

<u>Information on the fund's website</u> 

The fund will disclose its top 10 holdings and related portfolio information monthly beginning on or after 5 business days after the end of each month at www.franklintempleton.com. The fund discloses its complete portfolio holdings, including the name, identifier, market value and weight of each security and instrument in the portfolio, at www.franklintempleton.com on each business day, before commencement of trading in shares on the listing exchange. The fund will also disclose its complete portfolio holdings as of the end of the prior month on a monthly basis beginning on or before the 15th calendar day after the end of each month. Recent information, including information regarding the fund's net asset value, market price, premiums and discounts, and bid/ask spread, is also available at www.franklintempleton.com.

#### Buying and selling shares in the secondary market
Shares of the fund are listed and traded on an exchange, and individual fund shares may only be bought and sold in the secondary market through a broker. The fund does not impose any minimum investment for shares of the fund purchased on an exchange. These transactions are made at market prices that may vary throughout the day and may be greater than the fund's net asset value (premium) or less than the fund's net asset value (discount). As a result, you may pay more than net asset value when you purchase shares, and receive less than net asset value when you sell shares, in the secondary market. If you buy or sell shares in the secondary market, you will generally incur customary brokerage commissions and charges and you may also incur the cost of the spread between the price at which a dealer will buy fund shares and the somewhat higher price at which a dealer will sell shares. Due to such commissions and charges and spread costs, frequent trading may detract significantly from investment returns.

The fund is designed to offer investors an investment that can be bought and sold frequently in the secondary market without impact on the fund, and such trading activity is designed to enable the market price of fund shares to remain at or close to net asset value. Accordingly, the Board of Trustees has not adopted policies and procedures designed to discourage excessive or short-term trading by these investors.

The fund accommodates frequent purchases and redemptions of creation units by authorized participants and does not place a limit on purchases or redemptions of creation units by these investors. The fund reserves the right, but does not have the obligation, to reject any purchase or redemption transaction (subject to legal and regulatory limits regarding redemption transactions) at any time. In addition, the fund reserves the right to impose restrictions on disruptive, excessive, or short-term trading.

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#### Precautionary notes
<u>Note to registered investment companies</u> 

Section 12(d)(1) of the Investment Company Act of 1940, as amended (the "1940 Act"), restricts investments by registered investment companies in the securities of other investment companies, including shares of the fund. Registered investment companies are permitted to invest in the fund beyond the limits set forth in Section 12(d)(1), subject to certain terms and conditions, including that such investment companies enter into an agreement with the fund.

<u>Note to authorized participants regarding continuous offering</u> 

Certain legal risks may exist that are unique to authorized participants purchasing creation units directly from the fund. Because new creation units may be issued on an ongoing basis, at any point a "distribution," as such term is used in the Securities Act of 1933 (the "Securities Act"), could be occurring. As a broker-dealer, certain activities that you perform may, depending on the circumstances, result in your being deemed a participant in a distribution, in a manner which could render you a statutory underwriter and subject you to the prospectus delivery and liability provisions of the Securities Act.

For example, you may be deemed a statutory underwriter if you purchase creation units from the fund, break them down into individual fund shares, and sell such shares directly to customers, or if you choose to couple the creation of a supply of new fund shares with an active selling effort involving solicitation of secondary market demand for fund shares. A determination of whether a person is an underwriter for purposes of the Securities Act depends upon all of the facts and circumstances pertaining to that person's activities, and the examples mentioned here should not be considered a complete description of all the activities that could lead to a categorization as an underwriter.

Dealers who are not "underwriters" but are participating in a distribution (as opposed to engaging in ordinary secondary market transactions), and thus dealing with shares as part of an "unsold allotment" within the meaning of Section 4(a)(3)(C) of the Securities Act, will be unable to take advantage of the prospectus delivery exemption provided by Section 4(a)(3) of the Securities Act. This is because the prospectus delivery exemption in Section 4(a)(3) of the Securities Act is not available in respect of such transactions as a result of Section 24(d) of the 1940 Act. As a result, you should note that dealers who are not underwriters but are participating in a distribution (as opposed to engaging in ordinary secondary market transactions) and thus dealing with the shares that are part of an overallotment within the meaning of Section 4(a)(3)(A) of the Securities Act would be unable to take advantage of the prospectus delivery exemption provided by Section 4(a)(3) of the Securities Act. Firms that incur a prospectus-delivery obligation with respect to shares of the fund are reminded that, under Rule 153 under the Securities Act, a prospectus delivery obligation under Section 5(b)(2) of the Securities Act owed to an exchange member in connection with a sale on an exchange is satisfied

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by the fact that the prospectus is available at the exchange upon request. The prospectus delivery mechanism provided in Rule 153 is only available with respect to transactions on an exchange.

Certain affiliates of the fund may purchase and resell fund shares pursuant to this prospectus.

<u>Note to secondary market investors</u> 

The Depository Trust Company ("DTC"), a limited trust company and securities depository that facilitates the clearance and settlement of trades for its participating banks and broker-dealers, has executed an agreement with the fund's distributor, Franklin Distributors, LLC (the "Distributor"). DTC, or its nominee, is the registered owner of all outstanding shares of the fund. The Investment Manager will not have any record of your ownership. Your ownership of shares will be shown on the records of DTC and the DTC participant broker through which you hold the shares. Your broker will provide you with account statements, confirmations of your purchases and sales, and tax information. Your broker will also be responsible for distributing income and capital gain distributions and for sending you shareholder reports and other information as may be required.

### Costs associated with creations and redemptions
The fund generally imposes a creation transaction fee and a redemption transaction fee to offset transfer and other transaction costs associated with the issuance and redemption of creation units of shares. Information about the procedures regarding creation and redemption of creation units and the applicable transaction fees is included in the SAI.

### Distribution plans and payments to intermediaries

#### Principal distributor
The Distributor distributes creation units for the fund on an agency basis, does not maintain a secondary market in shares of the fund, and has no role in determining the investment policies of the fund or the securities that are purchased or sold by the fund. The Distributor is an indirect, wholly-owned broker/dealer subsidiary of Resources.

The Distributor's address is One Franklin Parkway, San Mateo, CA 94403-1906.

Intermediaries may receive compensation from the Investment Manager, the Distributor, and/or their respective affiliates for providing recordkeeping and administrative services, as well as other retirement plan expenses, and

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compensation for services intended to result in the sale of fund shares. These payments are described in more detail in this section and in the SAI.

#### Distribution and service plan
The fund has adopted a distribution and service plan pursuant to Rule 12b-1 under the 1940 Act that authorizes the fund to pay distribution fees in connection with the sale and distribution of its shares and service fees in connection with the provision of ongoing shareholder support services. No Rule 12b-1 fees are currently paid by the fund, and there are no current plans to impose these fees. However, in the event Rule 12b-1 fees are charged in the future, because these fees are paid out of the fund's assets on an ongoing basis, these fees will increase the cost of your investment in the fund.

No dealer, sales representative, or any other person has been authorized to give any information or to make any representations, other than those contained in this prospectus and in the related SAI, in connection with the offer contained in this prospectus. If given or made, such other information or representations must not be relied upon as having been authorized by the fund or the Distributor. This prospectus and the related SAI do not constitute an offer by the fund or by the Distributor to sell shares of the fund to or to buy shares of the fund from any person to whom it is unlawful to make such offer.

#### Payments to intermediaries
Investors may purchase shares of the fund on an exchange through intermediaries (including any broker, intermediary, bank, bank trust department, registered investment advisor, financial planner, retirement plan administrator and any other institution that offers shares of the fund to its customers). In addition to distribution and service plans, the Investment Manager and its affiliates may make payments to intermediaries that do not increase your fund expenses, as described below.

The Investment Manager and its affiliates also pay additional compensation to selected intermediaries in recognition of their marketing support and/or program servicing (each of which is described in more detail below). These payments may create an incentive for an intermediary firm or its representatives to recommend or offer shares of the fund or other Putnam funds to its customers. These additional payments are made by the Investment Manager and its affiliates and do not increase the amount paid by you or the fund as shown under Fund summary — Fees and expenses. The additional payments to intermediaries by the Investment Manager and its affiliates are generally based on one or more of the following factors: average net assets of a fund attributable to that intermediary, sales or net sales of a fund attributable to that intermediary, or reimbursement of ticket charges (fees that an intermediary firm charges its representatives for effecting transactions in fund shares), or on the basis of a negotiated lump sum payment for services provided.

Marketing support payments are generally available to most intermediaries engaging in significant sales of Putnam fund shares. These payments are

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individually negotiated with each intermediary firm, taking into account the marketing support services provided by the intermediary, including business planning assistance, educating intermediary personnel about the Putnam funds and shareholder financial planning needs, placement on the intermediary's preferred or recommended fund company list, access to sales meetings, sales representatives and management representatives of the intermediary, market data, as well as the size of the intermediary's relationship with the Investment Manager.

Program servicing payments, are paid in some instances to intermediaries in connection with investments in the fund through intermediary platforms and other investment programs. These payments are made for program or platform services provided by the intermediary, including shareholder recordkeeping, reporting, or transaction processing, as well as services rendered in connection with intermediary platform development and maintenance, fund/investment selection and monitoring, or other similar services.

You can find a list of all intermediaries to which the Investment Manager and its affiliates made marketing support and/ or program servicing payments in the SAI, which is on file with the SEC and is also available at www.franklintempleton.com. You can also find other details in the SAI about the payments made by the Investment Manager and its affiliates and the services provided by your intermediary. Your intermediary may charge you fees or commissions in addition to those disclosed in this prospectus. You can also ask your intermediary about any payments it receives from the Investment Manager and its affiliates and any services your intermediary provides, as well as about fees and/or commissions it charges.

#### Other payments
The Investment Manager and its affiliates may make other payments (including payments in connection with educational seminars or conferences) or allow other promotional incentives to intermediaries to the extent permitted by SEC and NASD (as adopted by FINRA) rules and by other applicable laws and regulations.

### Fund distributions and taxes
The fund earns dividends, interest, and other income from its investments, and distributes this income (less expenses) to shareholders as dividends. The fund also realizes capital gains from its investments and distributes these gains (less any losses) as capital gain distributions. If you purchased your shares in the secondary market, your broker is responsible for distributing the income and capital gain distributions to you. The fund normally distributes any net investment income and any net realized capital gains annually.

For U.S. federal income tax purposes, distributions of net investment income are generally taxable to you as ordinary income. Taxes on distributions of capital gains are determined by how long the fund owned (or is deemed to have owned) the investments that generated them, rather than by how long

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you have owned (or are deemed to have owned) your shares. Distributions that the fund properly reports to you as gains from investments that the fund owned for more than one year are generally taxable to you as long-term capital gains includible in net capital gain and taxed to individuals at reduced rates. Distributions of gains from investments that the fund owned for one year or less and gains on the sale of or prepayment on bonds characterized as market discount are generally taxable to you as ordinary income. Distributions that the fund properly reports to you as "qualified dividend income" are taxable at the reduced rates applicable to your net capital gain provided that both you and the fund meet certain holding period and other requirements. Distributions are taxable in the manner described in this paragraph whether you receive them in cash or reinvest them in additional shares of the fund.

Distributions by the fund to retirement plans that qualify for tax-advantaged treatment under U.S. federal income tax laws will not be taxable. Special tax rules apply to investments through such plans. You should consult your tax advisor to determine the suitability of the fund as an investment through such a plan and the tax treatment of distributions (including distributions of amounts attributable to an investment in the fund) from such a plan. Distributions are taxable to you even if they are paid from income or gains earned by the fund before your investment (and thus were included in the price you paid). Contact your financial representative to find out the distribution schedule for your fund.

The fund's use of derivatives, if any, may affect the amount, timing and character of distributions to shareholders and, therefore, may increase the amount of taxes payable by shareholders.

Any gain resulting from the sale of your shares generally also will be subject to tax. Any such gain or loss will be long term or short term depending on how long you have held your shares.

The above is a general summary of the tax implications of investing in the fund. Please refer to the SAI for further details. You should consult your tax advisor for more information on your own tax situation, including possible foreign, state and local taxes.

#### Other tax considerations
Unlike other ETFs, the securities exchanged for a creation unit will not correspond pro rata to the positions in the fund's portfolio, and the fund will effect its creations and redemptions partially or wholly for cash rather than on an in-kind basis. Because of this, the fund may be unable to realize certain tax benefits associated with in-kind transfers of portfolio securities that may be realized by other ETFs. Shareholders may be subject to tax on gains they would not otherwise have been subject to and/or at an earlier date than if the fund had effected redemptions wholly on an in-kind basis.

Authorized participants should consult their tax advisors about the U.S. federal, state, local and non-U.S. tax consequences of purchasing and redeeming creation units in the fund.

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#### Information about the Summary Prospectus, Prospectus, and SAI
The summary prospectus, prospectus, and SAI for a fund provide information concerning the fund. The summary prospectus, prospectus, and SAI are updated at least annually and any information provided in a summary prospectus, prospectus, or SAI can be changed without a shareholder vote unless specifically stated otherwise. The summary prospectus, prospectus, and the SAI are not contracts between the fund and its shareholders and do not give rise to any contractual rights or obligations or any shareholder rights other than any rights conferred explicitly by federal or state securities laws that may not be waived.

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### Financial highlights
The financial highlights table is intended to help you understand the performance of the fund for the past five years, unless otherwise noted. Certain information reflects financial results for a single fund share. Total return represents the rate that an investor would have earned (or lost) on an investment in the fund, assuming reinvestment of all dividends and other distributions. Unless otherwise noted, this information has been audited by the fund's independent registered public accounting firm, PricewaterhouseCoopers, LLP, whose report, along with the fund's financial statements, are available on the fund's website and are included in the fund's Form N-CSR filed with the SEC, which is available upon request.

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Financial highlights

(For a common share outstanding throughout the period)

---

| | | | |
|:---|:---|:---|:---|
| **PER-SHARE OPERATING PERFORMANCE** | **PER-SHARE OPERATING PERFORMANCE** | **PER-SHARE OPERATING PERFORMANCE** | **PER-SHARE OPERATING PERFORMANCE** |
|  | **Year ended** | **Year ended** | **For the period <br>9/29/22 <br>(commencement <br>of operations) to**  |
|  | **4/30/25** | **4/30/24** | **4/30/23** |
| &nbsp;&nbsp; **Net asset value, beginning of period** | **$29.35** | **$27.45** | **$25.00** |
| &nbsp;&nbsp; **Investment operations:** |  |  |  |
| &nbsp;&nbsp; Net investment income (loss)<sup>a</sup> | .02 | .04 | (.02) |
| &nbsp;&nbsp; Net realized and unrealized gain (loss) on investments | (1.45) | 1.88 | 2.47 |
| &nbsp;&nbsp; **Total from investment operations** | **(1.43)** | **1.92** | **2.45** |
| &nbsp;&nbsp; **Less distributions:** |  |  |  |
| &nbsp;&nbsp; From net investment income |  | (.02) |  |
| &nbsp;&nbsp; From net realized gain on investments | (.21) |  |  |
| &nbsp;&nbsp; **Total distributions** | **(.21)** | **(.02)** | **--** |
| &nbsp;&nbsp; **Net asset value, end of period** | **$27.71** | **$29.35** | **$27.45** |
| &nbsp;&nbsp; **Total return at net asset value** (%)<sup>b</sup> | **(4.93)** | **7.00** | **9.80\*** |
| &nbsp;&nbsp; **RATIOS AND SUPPLEMENTAL DATA** |  |  |  |
| &nbsp;&nbsp; **Net assets, end of period (in thousands)** | **$4849** | **$5136** | **$4803** |
| &nbsp;&nbsp; Ratio of expenses to average net assets (%)<sup>c,d</sup> | .69 | .69 | .50\*<sup>e</sup> |
| &nbsp;&nbsp; Ratio of net investment income (loss) to average net assets (%)<sup>d</sup> | .07 | .14 | (.08)\* |
| &nbsp;&nbsp; Portfolio turnover (%)<sup>f</sup> | 32 | 49 | 46\* |

---

\* Not annualized.

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

(b) Total return assumes dividend reinvestment.

(c) Excludes acquired fund fees and expenses, if any.

(d) Reflects waivers of certain fund expenses in connection with investments in Putnam Government Money Market Fund during the period. As a result of such waivers, the expenses of the fund reflect a reduction of the following amounts:

---

| | |
|:---|:---|
| | **Percentage of average** <br> **net assets**  |
|  April 30, 2025 | 0.01% |

---

Prospectus 31

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---

| | |
|:---|:---|
|  April 30, 2024 | 0.01 |
|  April 30, 2023 | <0.01 |

---

(e) Includes one-time proxy cost of 0.09%.

(f) Portfolio turnover excludes securities received or delivered in-kind, if any.

32 Prospectus

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#### For more information about Putnam BioRevolution<sup>™</sup> ETF
You can learn more about the fund in the following documents:

#### Annual/Semiannual Report to Shareholders and Form N-CSR Filed with the SEC
Contain additional information about the fund's investments. The fund's annual report also discusses the market conditions and investment strategies that significantly affected the fund's performance during its last fiscal year. In Form N-CSR, you will find the fund's annual and semi-annual financial statements.

#### Statement of Additional Information ("SAI")
Contains more information about the fund, its investments and policies. It is incorporated by reference (is legally a part of this prospectus).

For a free copy of the current annual/semiannual report, financial statements or the SAI, please contact your investment representative or call us at the number below. You also can view the current annual/semiannual report, financial statements and the SAI online through www.franklintempleton.com.

Reports and other information about the fund are available on the EDGAR Database on the SEC's Website at http://www.sec.gov, and copies of this information may be obtained, after paying a duplicating fee, by electronic request at the following email address: publicinfo@sec.gov.

---

| | |
|:---|:---|
| Putnam Investments <br>100 Federal Street <br>Boston, MA 02110 <br>1-800-225-1581 |  |
| 811-23643 | 39498-P 09/25 |

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| | |
|:---|:---|
| ![LOGO](g842776g2sstp1.jpg) | ![LOGO](g842776g2sstp2.jpg) |

---

## Putnam

## Emerging Markets ex-

## China ETF

---

| | |
|:---|:---|
| **Prospectus** | September 1, 2025 |
| Fund Symbol: PEMX **Principal U.S. Listing Exchange**: NYSE Arca, Inc. | Fund Symbol: PEMX **Principal U.S. Listing Exchange**: NYSE Arca, Inc. |

---

#### Investment Category: Emerging Markets Equity

#### This prospectus explains what you should know about this fund before you invest. Please read it carefully.
These securities have not been approved or disapproved by the Securities and Exchange Commission ("SEC") nor has the SEC passed upon the accuracy or adequacy of this prospectus. Any statement to the contrary is a crime.

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### Table of contents

---

| | |
|:---|:---|
|  [Fund summary](#pro55443_1) | 2.0 |
|  [Fund details](#pro55443_2) | 9.0 |
|  [Fund management](#pro55443_3) | 20.0 |
|  [Shareholder information](#pro55443_4) | 21.0 |
|  [Distribution plans and payments to intermediaries](#pro55443_5) | 25.0 |
|  [Fund distributions and taxes](#pro55443_6) | 27.0 |
|  [Financial highlights](#pro55443_7) | 30.0 |

---

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### Fund summary

#### Goal
The fund seeks long-term capital appreciation.

#### Fees and expenses
The following tables describe the fees and expenses you may pay if you buy, hold and sell shares of the fund. **You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.**

#### Annual Fund Operating Expenses

#### (expenses you pay each year as a percentage of the value of your investment)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Management**<br> **fees<sup>1</sup>** | **Distribution**<br> **and service**<br> **(12b-1) fees** | **Other**<br> **expenses** | **Acquired**<br> **fund fees**<br> **and**<br> **expenses** | **Total annual**<br> **fund**<br> **operating<br>expenses<sup>2</sup>** | **Expense<br>reimbursement<sup>3</sup>** | **Total annual**<br> **fund operating<br>expenses after<br>expense**<br> **reimbursement** |
| 0.69% |  | 0.00% | 0.01% | 0.70% | (0.01)% | 0.69% |

---

<sup>1</sup> Management fees have been restated to reflect the reduced management fee effective July 1, 2025. Consequently, the fund's total annual fund operating expenses differ from the ratio of expenses to average net assets shown in the fund's financial highlights.

<sup>2</sup> Total annual fund operating expenses do not correlate with the ratios of expenses to average net assets reported in the fund's financial highlights tables, which reflect the fund's operating expenses and do not include acquired fund fees and expenses.

<sup>3</sup> The Investment Manager has agreed to reduce its fees by an amount equal to the management fees paid by Franklin Templeton affiliated funds with respect to assets the fund invests in such affiliated funds. This arrangement cannot be terminated prior to August 31, 2026 without approval of the Board of Trustees.

#### Example
The following hypothetical example is intended to help you compare the cost of investing in the fund with the cost of investing in other funds. It assumes that you invest $10,000 in the fund for the time periods indicated and then redeem all your shares at the end of those periods. It assumes a 5% return on your investment each year and that the fund's operating expenses remain the same. Only the first year of each period in the example takes into account the expense reimbursement described above. Your actual costs may be higher or lower.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
|  Emerging Markets ex-China ETF | $70 | $223 | $389 | $869 |

---

#### Portfolio turnover
The fund pays transaction-related costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher turnover rate may

2 Prospectus

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indicate higher transaction costs and may result in higher taxes when the fund's shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or the above example, affect fund performance. The fund's turnover rate in the most recent fiscal year was 53%.

### Investments, risks, and performance

#### Principal investment strategies
The fund invests mainly in common stocks (growth or value stocks or both) of emerging market companies of any size that the Investment Manager, as defined below, believes have favorable investment potential. Growth stocks are stocks of companies whose earnings are expected to grow faster than those of similar firms, and whose business growth and other characteristics may lead to an increase in stock price. Value stocks are issued by companies that the Investment Manager believes are currently undervalued by the market. If the Investment Manager is correct and other investors ultimately recognize the value of the company, the price of its stock may rise.

Under normal circumstances, the fund invests at least 80% of the fund's net assets in securities of emerging market companies excluding companies domiciled, or whose stock is listed for trading on an exchange, in China, as well as companies domiciled in Hong Kong. This policy is non-fundamental and may be changed only after 60 days' notice to shareholders. Emerging markets include countries in the MSCI Emerging Market ex-China Index or that the Investment Manager considers to be emerging markets based on its evaluation of their level of economic development or the size and experience of their securities markets. Putnam Management invests significantly in small and mid-size companies. In evaluating potential investments, the Investment Manager seeks high-quality companies with mispriced earnings growth that can potentially deliver excess return over the fund's benchmark. The Investment Manager focuses on companies that it believes to have a durable competitive advantage, strong balance sheets and a potential for above-average profitability. From time to time, the fund may invest a significant portion of its assets in companies in one or more related industries or sectors, including the information technology and financials sectors.

The Investment Manager 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.

The fund is "non-diversified," which means it may invest a greater percentage of its assets in fewer issuers than a "diversified" fund. The fund expects to invest in a limited number of issuers.

#### Risks
It is important to understand that you can lose money by investing in the fund.

Prospectus 3

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**Fluctuation of net asset value and share price risk:** Shares may trade at a larger premium or discount to the fund's net asset value than shares of other ETFs. The net asset value of the fund will generally fluctuate with changes in the market value of the fund's holdings. The fund's shares can be bought and sold in the secondary market at market prices. Disruptions to creations and redemptions, the existence of extreme market volatility or potential lack of an active trading market for the fund's shares may result in the fund's shares trading significantly above (at a premium) or below (at a discount) net asset value or the intraday value of the fund's holdings. In addition, in stressed market conditions or periods of market disruption or volatility, the market for fund shares may become less liquid in response to deteriorating liquidity in the markets for the fund's underlying portfolio holdings.

**Trading issues risk:** The fund has a limited public trading history. There can be no assurance that an active trading market will develop or be maintained or that the market for fund shares will operate as intended, which could lead to the fund's shares trading at wider spreads and larger premiums and discounts to net asset value than other actively managed ETFs. As a result, it may cost investors more to trade fund shares than shares of other ETFs. There is no guarantee that the fund will be able to attract market makers and authorized participants. Market makers and authorized participants are not obligated to make a market in the fund's shares or to submit purchase and redemption orders for creation units. The market prices of the fund's shares are expected to fluctuate, in some cases materially, in response to changes in the fund's net asset value, the intraday value of the fund's holdings and supply and demand for the fund's shares. The Investment Manager cannot predict whether the fund's shares will trade above, below or at their net asset value or the intraday value of the fund's holdings. During such periods, investors may incur significant losses if they sell shares.

The securities held by the fund may be traded in markets that close at a different time than the exchange on which the fund's shares are listed. Liquidity in those securities may be reduced after the applicable closing times. Accordingly, during the time when the exchange is open but after the applicable market closing, fixing or settlement times, bid-ask spreads on the exchange and the corresponding premium or discount to the shares' net asset value may widen.

**Large shareholder transaction risk:** The fund is subject to the risk that shareholders will purchase or redeem large quantities of shares of the fund. The fund may be an investment option for mutual funds that are managed by the Investment Manager, as defined below, and its affiliates as "funds of funds." Additionally, other investors from time to time may make substantial investments in the fund. Such shareholders may at times be considered to control the fund. In addition, a large number of shareholders may collectively purchase or redeem fund shares in large amounts rapidly or unexpectedly. Large shareholder transactions may adversely affect the fund's liquidity and net assets. These redemptions may also adversely affect the fund's

4 Prospectus

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performance if the fund is forced to sell securities, which may also increase the fund's brokerage costs.

**Authorized participant concentration risk:** Only an authorized participant may engage in creation and redemption transactions directly with the fund. The fund may have a limited number of financial institutions that act as authorized participants, none of which are obligated to engage in creation and/or redemption transactions. To the extent that those authorized participants do not engage in creation and redemption orders, there may be a significantly diminished trading market for fund shares or fund shares may trade at a discount (or premium) to net asset value and possibly face trading halts and/or de-listing.

**Cash transactions risk:** Unlike certain ETFs, the fund may effect creations and redemptions in cash or partially in cash. Therefore, it may be required to sell portfolio securities and subsequently recognize gains on such sales that the fund might not have recognized if it were to distribute portfolio securities in-kind. As such, investments in the fund's shares may be less tax-efficient than an investment in an ETF that distributes portfolio securities entirely in-kind.

**Market risk:** 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, outbreaks of infectious illnesses or other widespread public health issues, and factors related to a specific issuer, asset class, geography, industry or sector. These and other factors may lead to increased volatility and reduced liquidity in the fund's portfolio holdings, may negatively impact the fund's performance, and may exacerbate other risks to which the fund is subject.

**Common stock risk:** Common stock represents an ownership interest in a company. The value of a company's stock may fall or fail to rise as a result of factors directly relating to that company, such as decisions made by its management or lower demand for the company's products or services. A stock's value may also fall because of factors affecting not just the company, but also other companies in the same industry or in a number of different industries, such as increases in production costs. Growth stocks may be more susceptible to earnings disappointments, and value stocks may fail to rebound. These risks are generally greater for small and midsize companies.

**Foreign investments risk:** Foreign investments involve certain special risks. For example, their values may decline in response to changes in currency exchange rates, unfavorable political and legal developments, unreliable or untimely information, and economic and financial instability. In addition, the liquidity of these investments may be more limited than for most U.S. investments, which means the fund may at times be unable to sell them at desirable prices. Foreign settlement procedures may also involve additional risks. These risks are generally greater in the case of developing (also known as emerging) markets, which typically have less developed legal and financial systems.

Prospectus 5

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**Geographic focus risk:** From time to time, the fund may invest a significant portion of its assets in companies in one or more related geographic regions, such as Asian or Pacific Basin countries (other than China and Hong Kong), which would make the fund more vulnerable to adverse developments affecting those regions. On March 9, 2022, MSCI Inc. removed Russian securities from the MSCI Emerging Markets ex China Index and other MSCI emerging markets indices and reclassified Russia from emerging markets to "standalone markets" status. Given the economic and political important of China in the overall global economy and, in particular, the Asian and Pacific Basin regions, the fund's performance may be impacted indirectly by financial, political, or other risks and developments relating to China, the Chinese economy, or Chinese companies. Many emerging markets countries are heavily dependent on China, including with respect to trade flows, global supply chains and travel. In addition, the fund may invest in Taiwan, which may be subject to heightened geopolitical risks relating to China.

**Small and midsize companies risk:** Stocks of small and midsize companies often trade in smaller volumes, and their prices may fluctuate more than stocks of larger companies. Stocks of these companies may therefore be more vulnerable to adverse developments than those of larger companies.

**Industry or sector concentration risk:** From time to time, the fund may invest a significant portion of its assets in companies in one or more related industries or sectors, including the information technology and financials sectors, which would make the fund more vulnerable to adverse developments affecting those industries or sectors.

**Non-diversified risk:** As a non-diversified fund, the fund invests in fewer issuers and is more vulnerable than a more broadly diversified fund to fluctuations in the values of the securities it holds. Moreover, the gains and losses on a single investment may have a greater impact on the fund's net asset value and may make the fund more volatile than more diversified funds.

**Management and operational risk:** There is no guarantee that the investment techniques, analyses, or judgments that the Investment Manager applies in making investment decisions for the fund will produce the intended outcome or that the investments selected for the fund will perform as well as other securities that were not selected for the fund. The Investment Manager, or the fund's other service providers, may experience disruptions or operating errors that could negatively impact the fund.

The fund may not achieve its goal, and it is not intended to be a complete investment program. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

### Performance
The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund's performance from year to year. The table shows the average annual total returns of the fund

6 Prospectus

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and also compares the fund's performance with the average annual total returns of a broad measure of market performance and an additional index with characteristics relevant to the fund. The fund makes updated performance information, including its current net asset value per share, available at www.franklintempleton.com.

*The fund's past performance (before and after taxes) is not necessarily an indication of how the fund will perform in the future.* 

Annual total returns

![LOGO](g842776g2g72p86.jpg)

2024

---

| | | |
|:---|:---|:---|
|  Best Quarter: | Q1 2024 | 8.70% |
|  Worst Quarter: | Q4 2024 | -1.57% |
|  As of June 30, 2025, the fund's year-to-date return was 14.41%. | As of June 30, 2025, the fund's year-to-date return was 14.41%. | As of June 30, 2025, the fund's year-to-date return was 14.41%. |

---

#### Average annual total returns
(for periods ended 12/31/24)

---

| | | |
|:---|:---|:---|
| **Emerging Markets ex-China ETF** | **1 year** | **Since<br>Inception** |
|  Return before taxes | 17.55% | 20.91%<sup>1</sup> |
|  Return after taxes on distributions | 16.08% | 19.75%<sup>1</sup> |
|  Return after taxes on distributions and sales of fund shares | 11.19% | 15.95%<sup>1</sup> |
| MSCI All Country World Ex-U.S. Index-NR (reflects no deduction for fees,<br>expenses or taxes but are net of dividend tax withholdings) | 5.53% | 7.83%<sup>1</sup> |
| MSCI Emerging Markets ex-China Index-NR (index reflects no deduction for<br>fees, expenses or taxes but are net of dividend tax withholding) | 3.56% | 11.02%<sup>1</sup> |

---

<sup>1.</sup> Since inception May 17, 2023.

After-tax returns reflect the historical highest individual federal marginal income tax rates and do not reflect state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. These after-tax returns do not apply if you hold your fund shares through a 401(k) plan, an IRA, or another tax-advantaged arrangement.

Important data provider notices and terms are available at <u>www.franklintempletondatasources.com</u>. All data is subject to change.

Prospectus 7

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### Your fund's management

#### Investment Manager
Putnam Investment Management, LLC ("Putnam Management" or the "Investment Manager")

#### Sub-advisors
Franklin Advisers, Inc. ("Franklin Advisers")

Franklin Templeton Investment Management Limited ("FTIML")

#### Portfolio manager

#### Brian S. Freiwald, CFA
Portfolio Manager of Putnam Management and portfolio manager of the fund since 2023.

#### Purchase and sale of fund shares
Shares of the fund are listed and traded on an exchange, and individual fund shares may only be bought and sold in the secondary market through a broker or dealer at market price. These transactions, which do not involve the fund, are made at market prices that may vary throughout the day, rather than at net asset value. Shares of the fund may trade at a price greater than the fund's net asset value (premium) or less than the fund's net asset value (discount). An investor may incur costs attributable to the difference between the highest price a buyer is willing to pay to purchase shares (bid) and the lowest price a seller is willing to accept for shares (ask) when buying or selling fund shares in the secondary market (the "bid-ask spread"). Recent information, including information regarding the fund's net asset value, market price, premiums and discounts, and bid-ask spread, is available at www.franklintempleton.com.

#### Tax information
The fund's distributions will be taxed as ordinary income or capital gains unless you hold the shares through a tax-advantaged arrangement, in which case you will generally be taxed only upon withdrawal of monies from the arrangement.

#### Financial intermediary compensation
If you purchase the fund through a broker/dealer or other financial intermediary (such as a bank or financial professional), the fund and its related companies may pay that intermediary for the sale of fund shares and related services. Please bear in mind that these payments may create a conflict of interest by influencing the broker/dealer or other intermediary to recommend the fund over another investment. Ask your advisor or visit your advisor's website for more information.

8 Prospectus

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### Fund details

#### Principal investment strategies
The fund invests mainly in common stocks (growth or value stocks or both) of emerging market companies of any size that the Investment Manager believes have favorable investment potential. Growth stocks are stocks of companies whose earnings are expected to grow faster than those of similar firms, and whose business growth and other characteristics may lead to an increase in stock price. Value stocks are issued by companies that the Investment Manager believes are currently undervalued by the market. If the Investment Manager is correct and other investors ultimately recognize the value of the company, the price of its stock may rise.

Under normal circumstances, the fund invests at least 80% of the fund's net assets in securities of emerging market companies excluding companies domiciled, or whose stock is listed for trading on an exchange, in China, as well as companies domiciled in Hong Kong. This policy is non-fundamental and may be changed only after 60 days' notice to shareholders. Emerging markets include countries in the MSCI Emerging Market ex-China Index or that the Investment Manager considers to be emerging markets based on its evaluation of their level of economic development or the size and experience of their securities markets. Putnam Management invests significantly in small and mid-size companies. In evaluating potential investments, the Investment Manager seeks high-quality companies with mispriced earnings growth that can potentially deliver excess return over the fund's benchmark. The Investment Manager focuses on companies that it believes to have a durable competitive advantage, strong balance sheets and a potential for above-average profitability. From time to time, the fund may invest a significant portion of its assets in companies in one or more related industries or sectors, including the information technology and financials sectors.

The Investment Manager 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. The Investment Manager may also use derivatives, such as forward contracts, futures, options, warrants and swap contracts, for both hedging and non-hedging purposes.

The Investment Manager expects to integrate environmental, social, or governance ("ESG") considerations, where the Investment Manager considers them material and relevant, into its fundamental research process and investment decision-making for the fund, although ESG considerations do not represent a primary focus of the fund.

The fund is "non-diversified," which means it may invest a greater percentage of its assets in fewer issuers than a "diversified" fund. The fund expects to invest in a limited number of issuers.

Prospectus 9

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#### Principal investment risks
The principal and certain additional risks of investing in the fund are described below. These risks and other factors may adversely affect the fund's net asset value, market price and performance. When you sell your shares, they may be worth more or less than what you paid for them, which means that you could lose money as a result of your investment. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund may not achieve its investment objective, and it is not intended to be a complete investment program. The fund's Statement of Additional Information ("SAI") contains additional information about the fund's investment policies and risks.

**Fluctuation of net asset value and share price risk:** Shares may trade at a larger premium or discount to net asset value than shares of other ETFs. The net asset value of the fund's shares will generally fluctuate with changes in the market value of the fund's holdings. The fund's shares are listed on an exchange and can be bought and sold in the secondary market at market prices. The market prices of shares will fluctuate in accordance with changes in net asset value and supply and demand on the listing exchange. Although the arbitrage process is designed to permit the shares of the fund to trade at market prices that are at or close to net asset value, it is possible that the market price and net asset value will vary significantly. As a result, you may sustain losses if you pay more than the shares' net asset value when you purchase shares or receive less than the shares' net asset value when you sell shares, in the secondary market. During periods of disruptions to creations and redemptions, the existence of extreme market volatility, or lack of an active trading market for the fund's shares, the market price of fund shares is more likely to differ significantly from the fund's net asset value or the intraday value of the fund's holdings. During such periods, you may be unable to sell your shares or may incur significant losses if you sell your shares. There are various methods by which investors can purchase and sell shares and various orders that may be placed. Investors should consult their financial intermediary before purchasing or selling shares of the fund. Disruptions at market makers, authorized participants or market participants may also result in significant differences between the market price of the fund's shares and the fund's net asset value. In addition, in stressed market conditions or periods of market disruption or volatility, the market for shares may become less liquid in response to deteriorating liquidity in the markets for the fund's underlying portfolio holdings.

The market price of shares during the trading day, like the price of any exchange-traded security, includes a "bid/ask" spread charged by the exchange specialist, market makers, or other participants that trade the particular security. In times of severe market disruption or volatility, the bid/ask spread can increase significantly. At those times, shares are most likely to be traded at a discount to net asset value, and the discount is likely to be greatest when the price of shares is falling fastest, which may be the time that you most want to sell your shares.

10 Prospectus

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**Trading issues risk:** The fund has a limited public trading history. Although shares are listed on an exchange, there can be no assurance that an active trading market or requirements to remain listed will be met or maintained, or that the market for fund shares will operate as intended. If the market does not operate as intended, it could lead to the fund's shares trading at wider spreads and larger premiums and discounts to net asset value than other actively managed ETFs, particularly during periods of market disruption or volatility. As a result, it may cost investors more to trade fund shares than shares of other ETFs.

There is no guarantee that the fund will be able to attract market makers and authorized participants. There are no obligations of market makers to make a market in the fund's shares or of authorized participants to submit purchase or redemption orders for creation units.

The market prices of the fund's shares are expected to fluctuate, in some cases materially, in response to changes in the fund's net asset value, the intraday value of the fund's holdings and supply and demand for the fund's shares. The Investment Manager cannot predict whether the fund's shares will trade above, below or at their net asset value or the intraday value of the fund's holdings. During such periods, investors may incur significant losses if they sell shares.

The securities held by the fund may be traded in markets that close at a different time than the exchange on which the fund's shares are listed. Liquidity in those securities may be reduced after the applicable closing times. Accordingly, during the time when the exchange is open but after the applicable market closing, fixing or settlement times, bid-ask spreads on the exchange and the corresponding premium or discount to the shares' net asset value may widen.

In addition, trading of shares in the secondary market may be halted, for example, due to activation of market-wide "circuit breakers." If trading halts or an unanticipated early closing of the listing exchange occurs, a shareholder may be unable to purchase or sell shares of the fund.

If the fund's shares are delisted from the listing exchange, the Investment Manager may seek to list the fund shares on another market, merge the fund with another exchange-traded fund or traditional mutual fund, or redeem the fund shares at net asset value.

Shares of the fund, similar to shares of other issuers listed on a stock exchange, may be sold short and are therefore subject to the risk of increased volatility and price decreases associated with being sold short.

**Large shareholder transaction risk:** The fund is subject to the risk that shareholders will purchase or redeem large quantities of shares of the fund (such purchases or redemptions, "large shareholder transactions"). The fund may be an investment option for mutual funds that are managed by the Investment Manager and its affiliates as "funds of funds." Additionally, other investors from time to time may make substantial investments in the fund.

Prospectus 11

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Such shareholders may at times be considered to control the fund. In addition, a large number of shareholders collectively may purchase or redeem fund shares in large amounts rapidly or unexpectedly. A number of circumstances may cause the fund to experience large shareholder transactions, such as changes in the eligibility criteria for the fund; liquidations, reorganizations, repositionings, or other announced fund events; or changes in investment objectives, strategies, policies, risks, or investment personnel. Large redemptions may be more likely during times of market stress or reduced liquidity, exacerbating the potential impact on the fund.

Large shareholder transactions may adversely affect the fund's liquidity and net assets. These transactions could adversely affect the fund's performance if the fund is forced to sell portfolio securities to satisfy redemption requests or purchase securities for the portfolio in connection with the investment of subscription proceeds when the fund would otherwise not do so, and at unfavorable prices, which may increase the fund's brokerage costs and accelerate the realization of taxable income and/or gains to shareholders. The effects of taxable income and/or gains resulting from large shareholder transactions would particularly impact non-redeeming shareholders who do not hold their fund shares in an IRA, 401(k) plan or other tax-advantaged plan. To the extent that such transactions result in short-term capital gains, such gains will generally be taxed at the ordinary income tax rate for shareholders who hold fund shares in a taxable account. In addition, fund returns also may be adversely affected if the fund holds a portion of its assets in liquid, cash-like investments in connection with or in anticipation of shareholder redemptions.

**Authorized participant concentration risk:** Only authorized participants may engage in creation and redemption transactions directly with the fund. The fund may have a limited number of financial institutions that act as authorized participants, none of which are obligated to engage in creation and/or redemption transactions. Decisions by market makers or authorized participants to reduce their role with respect to market making or creation and redemption activities during times of market stress, or a decline in the number of authorized participants due to decisions to exit the business, bankruptcy, or other factors, could inhibit the effectiveness of the arbitrage process in maintaining the relationship between the underlying value of the fund's portfolio securities and the market price of fund shares. To the extent no other authorized participants are able to step forward to create or redeem, shares may trade at a discount (or premium) to net asset value and possibly face delisting.

**Cash transactions risk:** Unlike certain ETFs, the fund may effect creations and redemptions in cash or partially in cash. Therefore, it may be required to sell portfolio securities and subsequently recognize gains on such sales that the fund might not have recognized if it were to distribute portfolio securities in-kind. As such, investments in the fund's shares may be less tax-efficient than an investment in an ETF that distributes portfolio securities entirely in-kind.

**Environmental, social and governance ("ESG") considerations risk:** Although ESG considerations do not represent a primary focus of the fund, the

12 Prospectus

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Investment Manager expects to integrate ESG considerations into the fundamental research process and investment decision-making for the fund, where considered material and relevant, and where data is available. The Investment Manager believes that ESG considerations, like other, more traditional subjects of investment analysis such as market position, growth prospects, and business strategy, have the potential to impact financial risk and investment returns. The Investment Manager believes that ESG considerations are best analyzed in combination with a company's fundamentals, including a company's industry, geography, and strategic position. When considering ESG factors, the Investment Manager uses company disclosures, public data sources, and independent third-party data as inputs into their analytical processes. The consideration of ESG factors as part of the fund's investment process does not mean that the fund pursues a specific ESG or sustainable investment strategy, and the Investment Manager may make investment decisions for the fund other than on the basis of relevant ESG considerations.

**Market risk:** 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 (including perceptions about monetary policy, interest rates, inflation or the risk of default); government actions (including protectionist measures, intervention in the financial markets or other regulation, and changes in fiscal, monetary or tax policies); geopolitical events or changes (including natural disasters, terrorism and war); outbreaks of infectious illnesses or other widespread public health issues (including epidemics and pandemics); and factors related to a specific issuer, asset class, geography, industry, or sector. Foreign financial markets have their own market risks, and they may be more or less volatile than U.S. markets and may move in different directions. During a general downturn in financial markets, multiple asset classes may decline in value simultaneously. These and other factors may lead to increased volatility and reduced liquidity in the fund's portfolio holdings. During those periods, the fund may experience high levels of shareholder redemptions, and may have to sell securities at times when it would otherwise not do so, and at unfavorable prices. These risks may be exacerbated during economic downturns or other periods of economic stress.

The COVID-19 pandemic and efforts to contain its spread have resulted in, among other effects, significant market volatility, exchange trading suspensions and closures, declines in global financial markets, higher default rates, significant changes in fiscal and monetary policies, and economic downturns and recessions. The effects of the COVID-19 pandemic have negatively affected, and may continue to negatively affect, the global economy, the economies of the United States and other individual countries, the financial performance of individual issuers, sectors, industries, asset classes, and markets, and the value, volatility, and liquidity of particular securities and other assets. The effects of the COVID-19 pandemic also are likely to exacerbate other risks that apply to the fund, including the risks disclosed in this prospectus, which could negatively impact the fund's performance and lead to

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losses on your investment in the fund. The duration of the COVID-19 pandemic and its effects cannot be determined with certainty.

The United States and other countries are periodically involved in disputes over trade and other matters, which may result in tariffs, investment restrictions and adverse impacts on affected companies and securities. For example, the United States has imposed tariffs and other trade barriers on Chinese exports, has restricted sales of certain categories of goods to China, and has established barriers to investments in China. Trade disputes may adversely affect the economies of the United States and its trading partners, as well as companies directly or indirectly affected and financial markets generally. The United States government has prohibited U.S. persons from investing in Chinese companies designated as related to the Chinese military. These and possible future restrictions could limit the fund's opportunities for investment and require the sale of securities at a loss or make them illiquid. Moreover, the Chinese government is involved in a longstanding dispute with Taiwan that has included threats of invasion. If the political climate between the United States and China does not improve or continues to deteriorate, if China were to attempt unification of Taiwan by force, or if other geopolitical conflicts develop or get worse, economies, markets and individual securities may be severely affected both regionally and globally, and the value of the fund's assets may go down.

**Common stock risk:** Common stock represents an ownership interest in a company. The value of a company's stock may fall as a result of factors directly relating to that company, such as decisions made by its management or lower demand for the company's products or services. A stock's value may also fall because of factors affecting not just the company, but also other companies in the same industry or in a number of different industries, such as increases in production costs.

The value of a company's stock may also be affected by changes in financial markets that are relatively unrelated to the company or its industry, such as changes in interest rates, currency exchange rates, or inflation rates. In addition, a company's stock generally pays dividends only after the company invests in its own business and makes required payments to holders of its bonds and other debt. For this reason, the value of a company's stock will usually react more strongly than its bonds and other debt to actual or perceived changes in the company's financial condition or prospects.

<u>Growth stocks</u>**:** Companies whose stocks the Investment Manager believes are fast-growing may trade at a higher multiple of current earnings than other stocks. The values of these stocks may be more sensitive to changes in current or expected earnings or to heightened levels of inflation than the values of other stocks. If the Investment Manager's assessment of the prospects for a company's earnings growth is wrong, or if their judgment of how other investors will value the company's earnings growth is wrong, then the price of the company's stock may fall or may not approach the value that the Investment Manager has placed on it. In addition, growth stocks, at times, may

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not perform as well as value stocks or the stock market in general, and may be out of favor with investors for varying periods of time.

<u>Value stocks:</u> Companies whose stocks the Investment Manager believes are undervalued by the market may have experienced adverse business developments or may be subject to special risks that have caused their stocks to be out of favor. If the Investment Manager's assessment of a company's prospects is wrong, or if other investors do not similarly recognize the value of the company, then the price of the company's stock may fall or may not approach the value that the Investment Manager has placed on it. In addition, value stocks, at times, may not perform as well as growth stocks or the stock market in general, and may be out of favor with investors for varying periods of time.

**Foreign investments risk:** Foreign investments involve certain special risks, including:

● Unfavorable changes in currency exchange rates: Foreign investments are typically issued and traded in foreign currencies. As a result, their values may be affected by changes in exchange rates between foreign currencies and the U.S. dollar.

● Political and economic developments: Foreign investments may be subject to the risks of seizure by a foreign government, direct or indirect impact of sovereign debt default, imposition of economic sanctions, tariffs, trade restrictions, currency restrictions or similar actions (or retaliatory measures taken in response to such actions), and tax increases.

● Unreliable or untimely information: There may be less information publicly available about a foreign company than about most publicly-traded U.S. companies, and foreign companies are usually not subject to accounting, auditing and financial reporting standards and practices as stringent as those in the United States. As a result, the Investment Manager's ability to evaluate a foreign company may be more limited than its ability to evaluate a U.S. company. Foreign securities may trade on markets that are closed when U.S. markets are open. As a result, accurate pricing information based on foreign market prices may not always be available.

● Limited legal recourse: Legal remedies for investors may be more limited than the remedies available in the United States.

● Limited markets: Certain foreign investments may be less liquid (harder to buy and sell) and more volatile than most U.S. investments, which means the fund may at times be unable to sell these foreign investments at desirable prices. For the same reason, the Investment Manager may at times find it difficult to value the fund's foreign investments.

● Trading practices: Brokerage commissions and other fees are generally higher for foreign investments than for U.S. investments. The procedures and rules governing foreign transactions and custody may also involve delays in payment, delivery or recovery of money or investments.

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The risks of foreign investments are typically increased in countries with less developed markets, which are sometimes referred to as emerging markets. Emerging markets may have less developed economies and legal and regulatory systems, and may be susceptible to greater political and economic instability than developed foreign markets. Countries with emerging markets are also more likely to experience high levels of inflation or currency devaluation, and investments in emerging markets may be more volatile and less liquid than investments in developed markets. For these and other reasons, investments in emerging markets are often considered speculative.

Certain risks related to foreign investments may also apply to some extent to U.S.-traded investments that are denominated in foreign currencies, investments in U.S. companies or issuers that are traded in foreign markets or investments in U.S. companies or issuers that have significant foreign operations.

Russia launched a large-scale invasion of Ukraine on February 24, 2022. The extent and duration of the military action, resulting sanctions and resulting future market disruptions, including declines in its stock markets and the value of the ruble against the U.S. dollar, in the region are impossible to predict, but could be significant. Any such disruptions caused by Russian military action or other actions (including cyberattacks and espionage) or resulting actual and threatened responses to such activity, including purchasing and financing restrictions, boycotts or changes in consumer or purchaser preferences, sanctions, tariffs or cyberattacks on Russian entities or individuals, including politicians could have a severe adverse effect on the region, including significant negative impacts on the economy and the markets for certain securities and commodities, such as oil and natural gas, as well as other sectors. How long such military action and related events will last cannot be predicted. These and any related events could have significant impact on fund performance and the value of an investment in the fund. On March 9, 2022, MSCI Inc. removed Russian securities from the MSCI Emerging Markets ex China Index and other MSCI emerging markets indices and reclassified Russia from emerging markets to "standalone markets" status.

**Industry or sector concentration risk:** From time to time, the fund may invest a significant portion of its assets in companies in one or more related industries or sectors, including the information technology and financials sectors, which would make the fund more vulnerable to adverse developments affecting those industries or sectors.

<u>Information technology sector:</u> The fund may invest a significant portion of its assets in companies in the information technology sector (including companies that develop products, processes or services that will provide advances and improvements through information technology to consumers, enterprises and governments). The information technology sector may be significantly affected by technological obsolescence or innovation, short product cycles, falling prices and profits, competitive pressures and general market conditions.

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<u>Financials sector:</u> The fund may invest a significant portion of its assets in companies in the financials sector, such as banks, savings and loan organizations and insurance companies. Financial services companies may be affected by the availability and cost of capital; changes in interest rates, insurance claims activity, industry consolidation and general economic conditions; and reduced profitability from limitations on loans, proprietary trading and interest rates and fees charged as a result of extensive government regulations.

**Geographic focus risk:** From time to time, the fund may invest a significant portion of its assets in companies located in a specific geographic region, such as common stocks of Asian or Pacific Basin countries (other than China and Hong Kong). As a result, the fund's performance could be more volatile than the performance of more geographically diverse funds. Many Asian and Pacific Basin countries may be either developing (also known as emerging) or newly industrialized. These economies may be characterized by frequent currency fluctuations and restrictions, rising unemployment, rapid fluctuation in inflation and interest rates, reliance on exports and international trade, and less efficient markets. Furthermore, political and social unrest in some Asian and Pacific Basin countries could cause economic and market uncertainty in the region. The fund does not invest in China and Hong Kong and may not perform as well as emerging markets funds that invest in these countries. However, given the economic and political important of China in the overall global economy and, in particular, the Asian and Pacific Basin regions, the fund's performance may be impacted indirectly by financial, political, or other risks and developments relating to China, the Chinese economy, or Chinese companies. Many emerging markets countries are heavily dependent on China, including with respect to trade flows, global supply chains and travel. In addition, the fund may invest in Taiwan, which may be subject to heightened geopolitical risks relating to China. For further information about risks of investing in Asian and Pacific Basin countries, see Risks of investing in the Asia Pacific Region in the SAI.

**Non-diversified risk:** As a non-diversified fund, the fund invests in fewer issuers and is more vulnerable than a more broadly diversified fund to fluctuations in the values of the securities it holds. Moreover, the gains and losses on a single investment may have a greater impact on the fund's net asset value and may make the fund more volatile than more diversified funds.

**Small and midsize companies risk:** These companies, many of which may have a market capitalization of less than $1 billion, are more likely than larger companies to have limited product lines, markets or financial resources, lack profitability or depend on a small management group. Stocks of these companies often trade in smaller volumes, and their prices may fluctuate more than stocks of larger companies. Stocks of small and midsize companies may therefore be more vulnerable to adverse developments than those of larger companies. In addition, stocks of small and midsize companies, at times, may not perform as well as stocks of larger companies or the stock market in general, and may be out of favor with investors for varying periods of time.

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**Derivatives risk:** The fund may engage in a variety of transactions involving derivatives, such as forward contracts, futures, options, warrants and swap contracts although they do not represent a primary focus of the fund. Derivatives are financial instruments whose value depends upon, or is derived from, the value of something else, such as one or more underlying investments, pools of investments, indexes or currencies. The fund may make use of "short" derivative positions, the values of which typically move in the opposite direction from the price of the underlying investment, pool of investments, index or currency. The fund may use derivatives both for hedging and non-hedging purposes, including as a substitute for a direct investment in the securities of one or more issuers. However, the fund may also choose not to use derivatives based on the Investment Manager's evaluation of market conditions or the availability of suitable derivatives. Investments in derivatives may be applied toward meeting a requirement to invest in a particular kind of investment if the derivatives have economic characteristics similar to that investment.

Derivatives involve special risks and may result in losses. The successful use of derivatives depends on the Investment Manager's ability to manage these sophisticated instruments. Some derivatives are "leveraged," which means they provide the fund with investment exposure greater than the value of the fund's investment in the derivatives. As a result, these derivatives may magnify or otherwise increase investment losses to the fund. The risk of loss from certain short derivative positions is theoretically unlimited. The value of derivatives may move in unexpected ways due to unanticipated market movements, the use of leverage, imperfect correlation between the derivative instrument and the reference asset, or other factors, especially in unusual market conditions, and volatility in the value of derivatives could adversely impact the fund's returns, obligations and exposures.

Other risks arise from the potential inability to terminate or sell derivative positions. Derivatives may be subject to liquidity risk due to the fund's obligation to make payments of margin, collateral, or settlement payments to counterparties. A liquid secondary market may not always exist for the fund's derivative positions. In fact, certain over-the-counter instruments (investments not traded on an exchange) may not be liquid. Over-the-counter instruments also involve the risk that the other party to the derivative transaction may not be willing or able to meet its obligations with respect to the derivative transaction. The risk of a party failing to meet its obligations may increase if the fund has significant exposure to that counterparty. Derivative transactions may also be subject to operational risk, including due to documentation and settlement issues, system failures, inadequate controls and human error, and legal risk due to insufficient documentation, insufficient capacity or authority of a counterparty, or issues with respect to the legality or enforceability of the derivative contract. For further information about additional types and risks of derivatives, see *Miscellaneous Investments, Investment Practices and Risks* in the SAI.

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**Liquidity and illiquid investments risk:** The fund may invest up to 15% of its net assets in illiquid investments, which may be considered speculative and which may be difficult to sell. The sale of many of these investments is prohibited or limited by law or contract. Some investments may be difficult to value for purposes of determining the fund's net asset value. Certain other investments may not have an active trading market due to adverse market, economic, industry, political, regulatory, geopolitical, environmental, public health, and other conditions, including investors trying to sell large quantities of a particular investment or type of investment, or lack of market makers or other buyers for a particular investment or type of investment. The fund may not be able to sell its illiquid investments when the Investment Manager considers it desirable to do so, or the fund may be able to sell them only at less than their value.

**Management and operational risk:** The fund is actively managed and its performance will reflect, in part, the Investment Manager's ability to make investment decisions that seek to achieve the fund's investment objective. There is no guarantee that the investment techniques, analyses, or judgments that the Investment Manager applies in making investment decisions for the fund will produce the intended outcome or that the investments selected for the fund will perform as well as other securities that were not selected for the fund. As a result, the fund may underperform its benchmark or other funds with a similar investment goal and may realize losses. In addition, the Investment Manager, or the fund's other service providers, may experience disruptions or operating errors that could negatively impact the fund. Although service providers may have operational risk management policies and procedures and take appropriate precautions to avoid and mitigate risks that could lead to disruptions and operating errors, it may not be possible to identify all of the operational risks that may affect the fund or to develop processes and controls to completely eliminate or mitigate their occurrence or effects.

**Portfolio turnover rate:** The fund's portfolio turnover rate measures how frequently the fund buys and sells investments. A portfolio turnover rate of 100%, for example, would mean that the fund sold and replaced securities valued at 100% of the fund's assets within a one-year period. Funds with high turnover may be more likely to realize capital gains that must be distributed to shareholders as taxable income. High turnover may also cause a fund to pay more brokerage commissions and other transaction costs (including imputed transaction costs), which may detract from performance. The fund's portfolio turnover rate and the amount of brokerage commissions it pays and transaction costs it incurs will vary over time based on market conditions.

**Other investments:** In addition to the main investment strategies described above, the fund may make other types of investments, such as preferred stocks, convertible securities, debt instruments and may also invest in cash or cash equivalents, including money market instruments or short-term instruments such as commercial paper, bank obligations (e.g., certificates of deposit and bankers' acceptances), repurchase agreements, and U.S. Treasury bills or other government obligations. The fund may also from time to

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time invest all or a portion of its assets, including any cash balances, in money market and/or short-term bond funds advised by the Investment Manager or its affiliates. The percentage of the fund invested in cash and cash equivalents and such money market and short-term bond funds is expected to vary over time and will depend on various factors, including market conditions, purchase and redemption activity by fund shareholders, and the Investment Manager's assessment of the cash level that is appropriate to allow the fund to pursue investment opportunities as they arise and to meet shareholder redemption requests. Large cash positions may dampen performance and may prevent the fund from achieving its goal. These practices may be subject to other risks, as described under *Miscellaneous Investments, Investment Practices and Risks* in the SAI.

**Temporary defensive strategies:** In response to adverse market, economic, political or other conditions, the fund may take temporary defensive positions, such as investing some or all of the fund's assets in cash and cash equivalents, that differ from the fund's usual investment strategies. However, the fund may choose not to use these temporary defensive strategies for a variety of reasons, even in very volatile market conditions. If the fund employs these strategies, the fund may miss out on investment opportunities and may not achieve its goal. Additionally, while temporary defensive strategies are mainly designed to limit losses, they may not work as intended.

**Changes in policies:** The Trustees may change the fund's goal, investment strategies and other policies set forth in this prospectus without shareholder approval, except as otherwise provided in the prospectus or SAI.

### Fund management

#### The fund's investment manager
Putnam Management, 100 Federal Street, Boston MA 02110, is the fund's investment manager, responsible for making investment decisions for the fund and managing the fund's other affairs and business. Putnam Management is an indirect, wholly-owned subsidiary of Franklin Resources Inc. ("Resources"). Together, Putnam Management and its affiliates manage, as of June 30, 2025, $1.61 trillion in assets, and have been in the investment management business since 1947.

Under an agreement with the Investment Manager, Franklin Advisers, One Franklin Parkway, San Mateo, CA 94403-1906, serves as the fund's sub-advisor, responsible for providing certain advisory and related services. Franklin Advisers is a wholly-owned subsidiary of Resources. The Investment Manager (and not the fund) will pay a monthly fee to Franklin Advisers based on the costs of Franklin Advisers in providing these services to the fund, which may include a mark-up determined and revised from time to time in accordance with Franklin Templeton's transfer pricing policy, in line with applicable tax/transfer pricing regulations, but not to exceed 15% over such costs.

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The Investment Manager has retained FTIML, Cannon Place, 78 Cannon Street, London, EC4N 6HL, England, to make investment decisions for such fund assets as may be designated from time to time by the Investment Manager. FTIML is not currently managing any fund assets. If FTIML were to manage any fund assets, the Investment Manager (and not the fund) would pay a monthly sub-management fee to FTIML for its services at the annual rate of 0.25% of the average net asset value of any fund assets managed by FTIML. FTIML is an indirect subsidiary of Resources.

Pursuant to the arrangements described above, investment professionals who are based in foreign jurisdictions may serve as portfolio managers of the fund or provide other investment services, consistent with local regulations.

Effective July 1, 2025, the fund pays an annual all-inclusive management fee of 0.69% to the Investment Manager based on the fund's average daily net assets. The management fee is calculated and accrued daily. The management fee covers all of the other expenses of the fund with limited exceptions.

Prior to July 1, 2025, the fund paid an annual all-inclusive management fee of 0.85%.

The Investment Manager has agreed to reduce its fees by an amount equal to the management fees paid by Franklin Templeton affiliated funds with respect to assets the fund invests in such affiliated funds. This arrangement cannot be terminated prior to August 31, 2026 without approval of the Board of Trustees.

For the fiscal year ended April 30, 2025, the fund paid an effective management fee (after any applicable waivers) of 0.84% of the fund's average net assets.

A discussion regarding the basis for the Trustees' approval of the fund's investment management contract and subadvisory contracts is available in the fund's report to shareholders for the period ended October 31, 2023 and in the fund's report on Form N-CSR for the period ended October 31, 2024, respectively.

**Portfolio manager.** The portfolio manager identified below is primarily responsible for the day-to-day management of the fund's portfolio.

**Brian S. Freiwald, CFA Portfolio Manager of Putnam Management** Mr. Freiwald has been a portfolio manager of the fund since 2023. He joined Putnam Management in 2011. The fund's SAI provides additional information about portfolio manager compensation, other accounts that they manage and their ownership of fund shares.

### Shareholder information

#### Valuation of fund shares
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The price of the fund's shares is based on its net asset value. The net asset value per share equals the total value of its assets, less its liabilities, divided by the number of its outstanding shares. Shares are only valued as of the scheduled close of regular trading on the NYSE each day the exchange is open.

The fund values its investments for which market quotations are readily available at market value. It values all other investments and assets at their fair value, which may differ from recent market prices. For example, the fund may value a stock traded on an exchange at its fair value when the relevant exchange closes early or trading in the stock is suspended. It may also value a stock at fair value if recent transactions in the stock have been very limited or if, in the case of a security traded on a market that closes before the NYSE closes, material information about the issuer becomes available after the close of the relevant market.

The fund translates prices for its investments quoted in foreign currencies into U.S. dollars at current exchange rates, which are generally determined as of 4:00 p.m. Eastern Time each day the NYSE is open. As a result, changes in the value of those currencies in relation to the U.S. dollar may affect the fund's net asset value. Because foreign markets may be open at different times than the NYSE, the value of the fund's shares may change on days when shareholders are not able to buy or sell them. Many securities markets and exchanges outside the U.S. close before the close of the NYSE, and the closing prices for securities in those markets or exchanges may not reflect events that occur after the close but before the scheduled close of regular trading on the NYSE. As a result, the fund has adopted fair value pricing procedures, which, among other things, require the fund to fair value foreign equity securities if there has been a movement in the U.S. market that exceeds a specified threshold. Although the threshold may be revised from time to time and the number of days on which fair value prices will be used will depend on market activity, it is possible that fair value prices will be used by the fund to a significant extent. As noted above, the value determined for an investment using the fund's fair value pricing procedures may differ from recent market prices for the investment.

The fund's most recent net asset value is available at www.franklintempleton.com or by calling 1-800-225-1581.

### Additional information about the fund
The fund is an actively managed ETF. Like other ETFs, shares of the fund are generally purchased and redeemed in creation unit aggregations through authorized participants, shares of the fund are listed and traded on a stock exchange, and individual investors can purchase or sell shares in less than creation unit sizes and for cash in the secondary market through a broker.

<u>Derivative actions</u> 

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The fund is a series of Putnam ETF Trust (the "Trust"). The Trust's Amended and Restated Agreement and Declaration of Trust imposes certain conditions on derivative actions that are not otherwise required by law, including, in the case of any claim not arising under the federal securities laws, a requirement that the holders of 10% or more of the total outstanding shares of the applicable fund join the request to commence the action. Although these conditions are intended to permit legitimate inquiries and claims while avoiding the time, expense, distraction, and other harm that can be caused to a fund or its shareholders as a result of spurious shareholder demands and derivative actions, they may make it more difficult or costly for fund shareholders to bring derivative actions on behalf of the Trust.

<u>Information on the fund's website</u>

The fund will disclose its top 10 holdings and related portfolio information monthly beginning on or after 5 business days after the end of each month at www.franklintempleton.com. The fund discloses its complete portfolio holdings, including the name, identifier, market value and weight of each security and instrument in the portfolio, at www.franklintempleton.com on each business day, before commencement of trading in shares on the listing exchange. The fund will also disclose its complete portfolio holdings as of the end of the prior month on a monthly basis beginning on or before the 15th calendar day after the end of each month. Recent information, including information regarding the fund's net asset value, market price, premiums and discounts, and bid/ask spread, is also available at www.franklintempleton.com.

#### Buying and selling shares in the secondary market
Shares of the fund are listed and traded on an exchange, and individual fund shares may only be bought and sold in the secondary market through a broker. The fund does not impose any minimum investment for shares of the fund purchased on an exchange. These transactions are made at market prices that may vary throughout the day and may be greater than the fund's net asset value (premium) or less than the fund's net asset value (discount). As a result, you may pay more than net asset value when you purchase shares, and receive less than net asset value when you sell shares, in the secondary market. If you buy or sell shares in the secondary market, you will generally incur customary brokerage commissions and charges and you may also incur the cost of the spread between the price at which a dealer will buy fund shares and the somewhat higher price at which a dealer will sell shares. Due to such commissions and charges and spread costs, frequent trading may detract significantly from investment returns.

The fund is designed to offer investors an investment that can be bought and sold frequently in the secondary market without impact on the fund, and such trading activity is designed to enable the market price of fund shares to remain at or close to net asset value. Accordingly, the Board of Trustees has not adopted policies and procedures designed to discourage excessive or short-term trading by these investors.

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The fund accommodates frequent purchases and redemptions of creation units by authorized participants and does not place a limit on purchases or redemptions of creation units by these investors. The fund reserves the right, but does not have the obligation, to reject any purchase or redemption transaction (subject to legal and regulatory limits regarding redemption transactions) at any time. In addition, the fund reserves the right to impose restrictions on disruptive, excessive, or short-term trading.

#### Precautionary notes
<u>Note to registered investment companies</u>

Section 12(d)(1) of the Investment Company Act of 1940, as amended (the "1940 Act"), restricts investments by registered investment companies in the securities of other investment companies, including shares of the fund. Registered investment companies are permitted to invest in the fund beyond the limits set forth in Section 12(d)(1), subject to certain terms and conditions, including that such investment companies enter into an agreement with the fund.

<u>Note to authorized participants regarding continuous offering</u>

Certain legal risks may exist that are unique to authorized participants purchasing creation units directly from the fund. Because new creation units may be issued on an ongoing basis, at any point a "distribution," as such term is used in the Securities Act of 1933 (the "Securities Act"), could be occurring. As a broker-dealer, certain activities that you perform may, depending on the circumstances, result in your being deemed a participant in a distribution, in a manner which could render you a statutory underwriter and subject you to the prospectus delivery and liability provisions of the Securities Act.

For example, you may be deemed a statutory underwriter if you purchase creation units from the fund, break them down into individual fund shares, and sell such shares directly to customers, or if you choose to couple the creation of a supply of new fund shares with an active selling effort involving solicitation of secondary market demand for fund shares. A determination of whether a person is an underwriter for purposes of the Securities Act depends upon all of the facts and circumstances pertaining to that person's activities, and the examples mentioned here should not be considered a complete description of all the activities that could lead to a categorization as an underwriter.

Dealers who are not "underwriters" but are participating in a distribution (as opposed to engaging in ordinary secondary market transactions), and thus dealing with shares as part of an "unsold allotment" within the meaning of Section 4(a)(3)(C) of the Securities Act, will be unable to take advantage of the prospectus delivery exemption provided by Section 4(a)(3) of the Securities Act. This is because the prospectus delivery exemption in Section 4(a)(3) of the Securities Act is not available in respect of such transactions as a result of Section 24(d) of the 1940 Act. As a result, you should note that dealers who are not underwriters but are participating in a distribution (as opposed to engaging in ordinary secondary market transactions) and thus dealing with the

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shares that are part of an overallotment within the meaning of Section 4(a)(3)(A) of the Securities Act would be unable to take advantage of the prospectus delivery exemption provided by Section 4(a)(3) of the Securities Act. Firms that incur a prospectus-delivery obligation with respect to shares of the fund are reminded that, under Rule 153 under the Securities Act, a prospectus delivery obligation under Section 5(b)(2) of the Securities Act owed to an exchange member in connection with a sale on an exchange is satisfied by the fact that the prospectus is available at the exchange upon request. The prospectus delivery mechanism provided in Rule 153 is only available with respect to transactions on an exchange.

Certain affiliates of the fund may purchase and resell fund shares pursuant to this prospectus.

<u>Note to secondary market investors</u>

The Depository Trust Company ("DTC"), a limited trust company and securities depository that facilitates the clearance and settlement of trades for its participating banks and broker-dealers, has executed an agreement with the fund's distributor, Franklin Distributors, LLC (the "Distributor"). DTC, or its nominee, is the registered owner of all outstanding shares of the fund. The Investment Manager will not have any record of your ownership. Your ownership of shares will be shown on the records of DTC and the DTC participant broker through which you hold the shares. Your broker will provide you with account statements, confirmations of your purchases and sales, and tax information. Your broker will also be responsible for distributing income and capital gain distributions and for sending you shareholder reports and other information as may be required.

### Costs associated with creations and redemptions
The fund generally imposes a creation transaction fee and a redemption transaction fee to offset transfer and other transaction costs associated with the issuance and redemption of creation units of shares. Information about the procedures regarding creation and redemption of creation units and the applicable transaction fees is included in the SAI.

### Distribution plans and payments to intermediaries

#### Principal distributor
The Distributor distributes creation units for the fund on an agency basis, does not maintain a secondary market in shares of the fund, and has no role in determining the investment policies of the fund or the securities that are purchased or sold by the fund. The Distributor is an indirect, wholly-owned broker/dealer subsidiary of Resources.

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The Distributor's address is One Franklin Parkway, San Mateo, CA 94403-1906.

Intermediaries may receive compensation from the Investment Manager, the Distributor, and/or their respective affiliates for providing recordkeeping and administrative services, as well as other retirement plan expenses, and compensation for services intended to result in the sale of fund shares. These payments are described in more detail in this section and in the SAI.

#### Distribution and service plan
The fund has adopted a distribution and service plan pursuant to Rule 12b-1 under the 1940 Act that authorizes the fund to pay distribution fees in connection with the sale and distribution of its shares and service fees in connection with the provision of ongoing shareholder support services. No Rule 12b-1 fees are currently paid by the fund, and there are no current plans to impose these fees. However, in the event Rule 12b-1 fees are charged in the future, because these fees are paid out of the fund's assets on an ongoing basis, these fees will increase the cost of your investment in the fund.

No dealer, sales representative, or any other person has been authorized to give any information or to make any representations, other than those contained in this prospectus and in the related SAI, in connection with the offer contained in this prospectus. If given or made, such other information or representations must not be relied upon as having been authorized by the fund or the Distributor. This prospectus and the related SAI do not constitute an offer by the fund or by the Distributor to sell shares of the fund to or to buy shares of the fund from any person to whom it is unlawful to make such offer.

#### Payments to intermediaries
Investors may purchase shares of the fund on an exchange through intermediaries (including any broker, intermediary, bank, bank trust department, registered investment advisor, financial planner, retirement plan administrator and any other institution that offers shares of the fund to its customers). In addition to distribution and service plans, the Investment Manager and its affiliates may make payments to intermediaries that do not increase your fund expenses, as described below.

The Investment Manager and its affiliates also pay additional compensation to selected intermediaries in recognition of their marketing support and/or program servicing (each of which is described in more detail below). These payments may create an incentive for an intermediary firm or its representatives to recommend or offer shares of the fund or other Putnam funds to its customers. These additional payments are made by the Investment Manager and its affiliates and do not increase the amount paid by you or the fund as shown under Fund summary — Fees and expenses. The additional payments to intermediaries by the Investment Manager and its affiliates are generally based on one or more of the following factors: average net assets of a fund attributable to that intermediary, sales or net sales of a fund attributable to that intermediary, or reimbursement of ticket charges (fees that an

26 Prospectus

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intermediary firm charges its representatives for effecting transactions in fund shares), or on the basis of a negotiated lump sum payment for services provided.

Marketing support payments are generally available to most intermediaries engaging in significant sales of Putnam fund shares. These payments are individually negotiated with each intermediary firm, taking into account the marketing support services provided by the intermediary, including business planning assistance, educating intermediary personnel about the Putnam funds and shareholder financial planning needs, placement on the intermediary's preferred or recommended fund company list, access to sales meetings, sales representatives and management representatives of the intermediary, market data, as well as the size of the intermediary's relationship with the Investment Manager.

Program servicing payments, are paid in some instances to intermediaries in connection with investments in the fund through intermediary platforms and other investment programs. These payments are made for program or platform services provided by the intermediary, including shareholder recordkeeping, reporting, or transaction processing, as well as services rendered in connection with intermediary platform development and maintenance, fund/investment selection and monitoring, or other similar services.

You can find a list of all intermediaries to which the Investment Manager and its affiliates made marketing support and/ or program servicing payments in the SAI, which is on file with the SEC and is also available at www.franklintempleton.com. You can also find other details in the SAI about the payments made by the Investment Manager and its affiliates and the services provided by your intermediary. Your intermediary may charge you fees or commissions in addition to those disclosed in this prospectus. You can also ask your intermediary about any payments it receives from the Investment Manager and its affiliates and any services your intermediary provides, as well as about fees and/or commissions it charges.

#### Other payments
The Investment Manager and its affiliates may make other payments (including payments in connection with educational seminars or conferences) or allow other promotional incentives to intermediaries to the extent permitted by SEC and NASD (as adopted by FINRA) rules and by other applicable laws and regulations.

### Fund distributions and taxes
The fund earns dividends, interest, and other income from its investments, and distributes this income (less expenses) to shareholders as dividends. The fund also realizes capital gains from its investments and distributes these gains (less any losses) as capital gain distributions. If you purchased your shares in the secondary market, your broker is responsible for distributing the income

Prospectus 27

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and capital gain distributions to you. The fund normally distributes any net investment income and any net realized capital gains annually.

For U.S. federal income tax purposes, distributions of net investment income are generally taxable to you as ordinary income. Taxes on distributions of capital gains are determined by how long the fund owned (or is deemed to have owned) the investments that generated them, rather than by how long you have owned (or are deemed to have owned) your shares. Distributions that the fund properly reports to you as gains from investments that the fund owned for more than one year are generally taxable to you as long-term capital gains includible in net capital gain and taxed to individuals at reduced rates. Distributions of gains from investments that the fund owned for one year or less and gains on the sale of or prepayment on bonds characterized as market discount are generally taxable to you as ordinary income. Distributions that the fund properly reports to you as "qualified dividend income" are taxable at the reduced rates applicable to your net capital gain provided that both you and the fund meet certain holding period and other requirements. Distributions are taxable in the manner described in this paragraph whether you receive them in cash or reinvest them in additional shares of the fund.

Distributions by the fund to retirement plans that qualify for tax-advantaged treatment under U.S. federal income tax laws will not be taxable. Special tax rules apply to investments through such plans. You should consult your tax advisor to determine the suitability of the fund as an investment through such a plan and the tax treatment of distributions (including distributions of amounts attributable to an investment in the fund) from such a plan. Distributions are taxable to you even if they are paid from income or gains earned by the fund before your investment (and thus were included in the price you paid). Contact your financial representative to find out the distribution schedule for your fund.

The fund's investments in foreign securities may be subject to foreign withholding or other taxes. In that case, the fund's return on those investments would be decreased. If the fund meets certain requirements relating to its asset holdings, and the fund elects to pass through to its shareholders foreign tax credits or deductions, taxable shareholders generally will be entitled to claim a credit or deduction with respect to these foreign taxes. Even if the fund elects to pass through to its shareholders foreign tax credits or deductions, tax-exempt shareholders and those who invest in the fund through tax-advantaged accounts such as IRAs will not benefit from any such tax credit or deduction. In addition, the fund's investments in foreign securities or foreign currencies may increase or accelerate the fund's recognition of ordinary income and may affect the timing or amount of the fund's distributions.

The fund's use of derivatives, if any, may affect the amount, timing and character of distributions to shareholders and, therefore, may increase the amount of taxes payable by shareholders.

Any gain resulting from the sale of your shares generally also will be subject to tax. Any such gain or loss will be long term or short term depending on how long you have held your shares.

28 Prospectus

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The above is a general summary of the tax implications of investing in the fund. Please refer to the SAI for further details. You should consult your tax advisor for more information on your own tax situation, including possible foreign, state and local taxes.

#### Other tax considerations
Unlike other ETFs, the securities exchanged for a creation unit will not correspond pro rata to the positions in the fund's portfolio, and the fund will effect its creations and redemptions partially or wholly for cash rather than on an in-kind basis. Because of this, the fund may be unable to realize certain tax benefits associated with in-kind transfers of portfolio securities that may be realized by other ETFs. Shareholders may be subject to tax on gains they would not otherwise have been subject to and/or at an earlier date than if the fund had effected redemptions wholly on an in-kind basis.

Authorized participants should consult their tax advisors about the U.S. federal, state, local and non-U.S. tax consequences of purchasing and redeeming creation units in the fund.

#### Information about the Summary Prospectus, Prospectus, and SAI
The summary prospectus, prospectus, and SAI for a fund provide information concerning the fund. The summary prospectus, prospectus, and SAI are updated at least annually and any information provided in a summary prospectus, prospectus, or SAI can be changed without a shareholder vote unless specifically stated otherwise. The summary prospectus, prospectus, and the SAI are not contracts between the fund and its shareholders and do not give rise to any contractual rights or obligations or any shareholder rights other than any rights conferred explicitly by federal or state securities laws that may not be waived.

Prospectus 29

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### Financial highlights
The financial highlights table is intended to help you understand the performance of the fund for the past five years, unless otherwise noted. Certain information reflects financial results for a single fund share. Total return represents the rate that an investor would have earned (or lost) on an investment in the fund, assuming reinvestment of all dividends and other distributions. Unless otherwise noted, this information has been audited by the fund's independent registered public accounting firm, PricewaterhouseCoopers, LLP, whose report, along with the fund's financial statements, are available on the fund's website and are included in the fund's Form N-CSR filed with the SEC, which is available upon request.

30 Prospectus

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(For a common share outstanding throughout the period)

---

| | | |
|:---|:---|:---|
| **PER-SHARE OPERATING PERFORMANCE** | | |
|  | **Year ended** | |
|  | **4/30/25** | **For the period<br>5/17/23<br>(commencement<br>of operations) to<br>4/30/24** |
|  **Net asset value, beginning of period** | $**49.32** | $**40.00** |
|  **Investment operations:** |  |  |
|  Net investment income (loss)<sup>a</sup>  | .79 | .54 |
|  Net realized and unrealized gain (loss) on investments | 4.99 | 9.11 |
|  **Total from investment operations** | **5.78** | **9.65** |
|  **Less distributions:** |  |  |
|  From net investment income | (.49) | (.33) |
|  From net realized gain on investments | (2.09) |  |
|  **Total distributions** | **(2.58)** | **(.33)** |
|  **Other capital** |  |  |
|  **Net asset value, end of period** | $**52.52** | $**49.32** |
|  **Total return at net asset value (%)<sup>b</sup>**  | **11.76** | **24.20** **\*** |
|  **RATIOS AND SUPPLEMENTAL DATA** |  |  |
|  **Net assets, end of period (in thousands)** | $**7878** | $**7398** |
|  Ratio of expenses to average net assets (%)<sup>c,d</sup>  | .84 | .81 \* |
|  Ratio of net investment income (loss) to average net assets (%)<sup>d</sup>  | 1.50 | 1.21 \* |
|  Portfolio turnover (%)<sup>e</sup>  | 53 | 35 \* |

---

\* Not annualized.

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

(b) Total return assumes dividend reinvestment.

(c) Excludes acquired fund fees and expenses, if any.

(d) Reflects waivers of certain fund expenses in connection with investments in Putnam Government Money Market Fund during the period. As a result of such waivers, the expenses of the fund reflect a reduction of 0.01% for the periods ended April 30, 2025 and for the period ended April 30, 2024 as a percentage of average net assets.

(e) Portfolio turnover excludes securities received or delivered in-kind, if any.

Prospectus 31

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#### For more information about Putnam Emerging Markets ex-China ETF
You can learn more about the fund in the following documents:

#### Annual/Semiannual Report to Shareholders and Form N-CSR Filed with the SEC
Contain additional information about the fund's investments. The fund's annual report also discusses the market conditions and investment strategies that significantly affected the fund's performance during its last fiscal year. In Form N-CSR, you will find the fund's annual and semi-annual financial statements.

#### Statement of Additional Information ("SAI")
Contains more information about the fund, its investments and policies. It is incorporated by reference (is legally a part of this prospectus).

For a free copy of the current annual/semiannual report, financial statements or the SAI, please contact your investment representative or call us at the number below. You also can view the current annual/semiannual report, financial statements and the SAI online through www.franklintempleton.com.

Reports and other information about the fund are available on the EDGAR Database on the SEC's Website at http://www.sec.gov, and copies of this information may be obtained, after paying a duplicating fee, by electronic request at the following email address: <u>publicinfo@sec.gov</u>.

Putnam Investments

100 Federal Street

Boston, MA 02110

1-800-225-1581

811-23643 39499-P 09/25

------

![LOGO](g842776g3g41s75.jpg)

## Putnam

## ESG Core Bond ETF

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| | | |
|:---|:---|:---|
| Prospectus | September 1, 2025 |  |
| **Fund Symbol:** PCRB | **Fund Symbol:** PCRB | **Principal U.S. Listing Exchange:** NYSE Arca, Inc. |

---

#### Investment Category: Taxable Income

#### This prospectus explains what you should know about this fund before you invest. Please read it carefully.
These securities have not been approved or disapproved by the Securities and Exchange Commission ("SEC") nor has the SEC passed upon the accuracy or adequacy of this prospectus. Any statement to the contrary is a crime.

------

Table of contents

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| | |
|:---|:---|
|  [Fund summary](#pro861677_1) | 2 |
|  [Fund details](#pro861677_2) | 12 |
|  [Fund management](#pro861677_3) | 27 |
|  [Shareholder information](#pro861677_4) | 28 |
|  [Distribution plans and payments to intermediaries](#pro861677_5) | 32 |
|  [Fund distributions and taxes](#pro861677_6) | 34 |
|  [Financial highlights](#pro861677_7) | 37 |

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### Fund summary

#### Goal
The fund seeks high current income consistent with what the Investment Manager (as defined below) believes to be prudent risk.

#### Fees and expenses
The following tables describe the fees and expenses you may pay if you buy, hold and sell shares of the fund. **You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.** 

#### Annual Fund Operating Expenses

#### (expenses you pay each year as a percentage of the value of your investment)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Management <br> fees** | **Distribution <br> and service**<br> **(12b-1) fees** | **Other <br> expenses** | **Acquired <br> fund fees <br> and**<br> **expenses** | **Total annual**<br> **fund <br> operating<br> expenses<sup>1</sup>** | **Expense <br> reimburse- <br> ment<sup>2</sup>** | **Total annual <br> fund operating <br> expenses after <br> expense reim- <br> bursement** |
| 0.35% |  | 0.00% | 0.02% | 0.37% | (0.01)% | 0.36% |

---

<sup>1</sup> Total annual fund operating expenses do not correlate with the ratios of expenses to average net assets reported in the fund's financial highlights tables, which reflect the fund's operating expenses and do not include acquired fund fees and expenses.

<sup>2</sup> The Investment Manager has agreed to reduce its fees by an amount equal to the management fees paid by Franklin Templeton affiliated funds with respect to assets the fund invests in such affiliated funds. This arrangement cannot be terminated prior to August 31, 2026 without approval of the Board of Trustees.

#### Example
The following hypothetical example is intended to help you compare the cost of investing in the fund with the cost of investing in other funds. It assumes that you invest $10,000 in the fund for the time periods indicated and then redeem all your shares at the end of those periods. It assumes a 5% return on your investment each year and that the fund's operating expenses remain the same. Only the first year of each period in the example takes into account the expense reimbursement described above. Your actual costs may be higher or lower.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
|  ESG Core Bond ETF | $37 | $118 | $206 | $466 |

---

#### Portfolio turnover
The fund pays transaction-related costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher turnover rate may indicate higher transaction costs and may result in higher taxes when the fund's shares are held in a taxable account. These costs, which are not

2 Prospectus

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reflected in annual fund operating expenses or the above example, affect fund performance. The fund's turnover rate in the most recent fiscal year was 237%.

### Investments, risks, and performance

#### Principal investment strategies
The fund invests mainly in a diversified portfolio of investment-grade fixed-income securities with a focus on companies or issuers that the Investment Manager, as defined below, believes meet relevant environmental, social or governance ("ESG") criteria on a sector-specific basis ("ESG criteria").

The fund invests mainly in bonds of governments and private companies located in the United States that are investment-grade in quality with intermediate- to long-term maturities (three years or longer). Investment-grade securities are rated at least BBB or its equivalent at the time of purchase by a nationally recognized securities rating organization, or are unrated investments that the Investment Manager believes are of comparable quality. The fund may also invest in below-investment-grade investments. However, the fund will not invest in securities that are rated lower than B or its equivalent by each rating agency rating the investment, or are unrated securities that the Investment Manager believes are of comparable quality. The fund will not necessarily sell an investment if its rating is reduced (or increased) after purchase. The fund may also invest in foreign fixed income investments, although foreign investments do not represent a primary focus of the fund.

The Investment Manager may consider, among other factors, a company's or issuer's ESG criteria (as described below), credit, interest rate, liquidity and prepayment risks, as well as general market conditions, when deciding whether to buy or sell investments.

Under normal circumstances, the fund invests at least 80% of the value of its net assets in fixed-income securities that meet the Investment Manager's ESG criteria. This policy is non-fundamental and may be changed only after 60 days' notice to shareholders. The Investment Manager may not apply ESG criteria to investments that are not subject to the fund's 80% policy, and such investments may not meet the Investment Manager's ESG criteria. The fund will not necessarily sell an investment if it no longer meets the Investment Manager's ESG criteria after purchase, subject to compliance with the 80% policy.

In evaluating investments for the fund, the Investment Manager identifies relevant ESG criteria for specific sectors, subsectors or countries using an internally developed framework, which may take into account independent third-party ESG data. The Investment Manager identifies specific ESG criteria (i.e., quality of board, product safety and quality, workforce relations, lending criteria, emissions and waste management, energy efficiency, or governmental corruption, among others) and assigns a percentage weighting to those criteria based on the Investment Manager's assessment of which criteria are more or less important. The Investment Manager then categorizes the relevance of

Prospectus 3

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each ESG criterion and assigns each criterion a percentage weighting. As part of this analysis, the Investment Manager may utilize metrics and information such as emissions data, carbon intensity, sources of energy used for operations, renewable energy consumption, water use and re-use, waste diversion from landfill, employee safety and diversity data, FICO credit scores and income statistics for borrowers, supplier audits, product safety, board composition, or the Global Peace Index. After evaluating these criteria and applying the established weightings, the Investment Manager will assign each company, issuer or country, as applicable, a proprietary ESG rating ranging from a 5.0 to a 1.0, with 5.0 indicating the highest (best) ESG rating and 1.0 indicating the lowest (worst) ESG rating. In order to meet the Investment Manager's ESG criteria for purposes of the above-referenced non-fundamental investment policy, a company or issuer must generally be rated 2.5 or above by the Investment Manager.

For corporate credit investments, which may include investment grade-rated and below investment grade-rated securities, the Investment Manager also applies a momentum factor in determining the ESG rating of a company or issuer based on the Investment Manager's view of whether the performance of the company or issuer under the relevant ESG criteria is expected to improve or decline. If an issuer is rated 2.0 or above and has a positive momentum factor, a company or issuer will be viewed as meeting the Investment Manager's criteria for purposes of the above-referenced non-fundamental policy. Conversely, if an issuer has a negative momentum factor, it will be viewed as meeting the Investment Manager's criteria for purposes of the above-referenced non-fundamental policy only if it is rated a 3.0 or above.

While the Investment Manager may consider independent third-party data as a part of its analytical process, the portfolio management team performs its own independent analysis of issuers and does not rely solely on third-party screens.

The fund's approach to ESG investing incorporates fundamental research together with consideration of ESG criteria which may include, but are not limited to, those included in the following descriptions. Environmental criteria include, for example, a company's or issuer's carbon intensity and use of resources like water or minerals. ESG measures in this area might include plans to reduce waste, increase recycling, raise the proportion of energy supplied from renewable sources, reduce greenhouse gas emissions per capita or improve product design to be less resource intensive. Social criteria include, for example, labor practices, supply chain management, and community relations. ESG measures in this area might include programs to improve employee well-being, commitment to workplace equality and diversity, stewardship of supplier relationships and working conditions, lending to underserved populations, or the degree of universal healthcare coverage. Governance criteria include, for example, board composition, executive compensation, and debt structures that improve transparency and bondholders' rights. ESG measures in this area might include improvements in board independence or diversity, alignment of governmental or management

4 Prospectus

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incentives with appropriate strategic ESG objectives, and disclosure of operating and ESG metrics to bondholders.

In the corporate credit sector, the Investment Manager combines fundamental analysis with relevant ESG insights with a forward-looking perspective. The Investment Manager believes that this approach contributes to a more nuanced assessment of an issuer's credit profile.

The Investment Manager believes that securitized debt instruments present unique challenges in applying ESG criteria due to the presence of various asset types, counterparties involved, and the complex structure of the securitized debt market along with a lack of available ESG-related data. In evaluating securitized debt instruments for potential investment, the Investment Manager takes a broad approach, analyzing both the terms of the transaction, including the asset type being securitized, the terms of the transaction, the structure of the securitization, as well as key counterparties. Opportunities are analyzed at the asset level within each securitization and each subsector to identify assets that meet relevant ESG thresholds. Additionally, in evaluating securitized debt instruments, the Investment Manager analyzes relevant ESG criteria regarding the originator, servicers, or other relevant counterparties.

In the sovereign debt sector, the Investment Manager uses quantitative modeling and fundamental research to evaluate countries across a variety of ESG criteria (i.e., natural resource dependence and level of public corruption) and non-ESG criteria (i.e., global economic conditions, market valuations, and technical factors). The Investment Manager believes that sovereign issuers with better ESG scores generally benefit from lower borrowing costs and that ESG criteria may influence the perception of the credit risk of a country's debt.

The Investment Manager evaluates ESG considerations using independent third-party data (where available) and also uses company or issuer disclosures and public data sources. The Investment Manager believes that ESG considerations are best analyzed in combination with a company's or issuer's fundamentals, including a company's or issuer's industry, location, strategic position, and key relationships.

In addition to bonds, the fund may also invest in other fixed-income instruments. In addition to the main investment strategies described above, the fund may make other types of investments, such as assignments of and participations in fixed and floating rate bank loans, investments in hybrid and structured bonds and notes, and preferred securities that would be characterized as debt securities under applicable accounting standards and tax laws. The fund may also use derivatives, such as futures, options, certain foreign currency transactions and swap contracts, for both hedging and non-hedging purposes.

#### Risks
It is important to understand that you can lose money by investing in the fund.

Prospectus 5

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**ESG investing risk**: Investing with a focus on companies or issuers that meet the Investment Manager's ESG criteria may result in the fund investing in certain types of companies, issuers, industries or sectors that the market may not favor. Conversely, investing in such companies or issuers may result in the fund foregoing investment in securities that outperform the fund's investments in certain environments. In evaluating an investment opportunity, the Investment Manager may make investment decisions without the availability of optimal ESG-related data (which may be even less available with securitized debt instruments) or based on information and data that is incomplete or inaccurate. ESG metrics are not uniformly defined and applying such metrics involves subjective assessments. ESG scorings and assessments of issuers can vary across third-party data providers and may change over time. The Investment Manager does not rely exclusively on third-party data providers in evaluating ESG criteria. ESG information from third-party data providers may be incomplete, inaccurate or unavailable, particularly with respect to companies in emerging market countries, which may adversely impact the investment process. The fund does not restrict its investments to "green bonds" (*i.e.,* U.S. dollar-denominated bonds designated as "green" by the Climate Bonds Initiative) and does not restrict investments based solely on "negative screens". In addition, a company's or issuer's business practices, products or services may change over time. As a result of these possibilities, among others, the fund may temporarily hold securities that are inconsistent with the fund's ESG investment criteria. Regulatory changes or interpretations regarding the definitions and/or use of ESG criteria could have a material adverse effect on the fund's ability to invest in accordance with its investment policies and/or achieve its investment objective, as well as the ability of certain classes of investors to invest in funds, such as the fund, whose strategies include ESG criteria. Because fixed-income investments generally represent a promise to pay principal and interest by an issuer, and not an ownership interest, and may involve complex structures, ESG-related investment considerations may have a more limited impact on risk and return (or may have an impact over a different investment time horizon) relative to other asset classes, and this may be particularly true for shorter-term investments. In addition, holders of fixed-income investments do not typically have voting rights, unlike holders of equity investments who have the right to vote on issuer proposals, including ESG-related proposals.

**Model risk**: If the quantitative models or data that are used in managing the fund prove to be incorrect or incomplete, investment decisions made in reliance on the models or data may not produce the desired results and the fund may realize losses. Additionally, market movements are likely to change the risk levels and risk allocations of the fund. Investments made based on quantitative models may perform differently from the market as a whole.

**Fluctuation of net asset value and share price risk**: Shares may trade at a larger premium or discount to the fund's net asset value than shares of other ETFs. The net asset value of the fund will generally fluctuate with changes in the market value of the fund's holdings. The fund's shares can be bought and sold in the secondary market at market prices. Disruptions to creations and

6 Prospectus

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redemptions, the existence of extreme market volatility or potential lack of an active trading market for the fund's shares may result in the fund's shares trading significantly above (at a premium) or below (at a discount) net asset value or the intraday value of the fund's holdings. In addition, in stressed market conditions or periods of market disruption or volatility, the market for fund shares may become less liquid in response to deteriorating liquidity in the markets for the fund's underlying portfolio holdings.

**Trading issues risk**: The fund has a limited public trading history. There can be no assurance that an active trading market will develop or be maintained or that the market for fund shares will operate as intended, which could lead to the fund's shares trading at wider spreads and larger premiums and discounts to net asset value than other actively managed ETFs. As a result, it may cost investors more to trade fund shares than shares of other ETFs. There is no guarantee that the fund will be able to attract market makers and authorized participants. Market makers and authorized participants are not obligated to make a market in the fund's shares or to submit purchase and redemption orders for creation units. The market prices of the fund's shares are expected to fluctuate, in some cases materially, in response to changes in the fund's net asset value, the intraday value of the fund's holdings and supply and demand for the fund's shares. The Investment Manager cannot predict whether the fund's shares will trade above, below or at their net asset value or the intraday value of the fund's holdings. During such periods, investors may incur significant losses if they sell shares.

The securities held by the fund may be traded in markets that close at a different time than the exchange on which the fund's shares are listed. Liquidity in those securities may be reduced after the applicable closing times. Accordingly, during the time when the exchange is open but after the applicable market closing, fixing or settlement times, bid-ask spreads on the exchange and the corresponding premium or discount to the shares' net asset value may widen.

**Large shareholder transaction risk**: The fund is subject to the risk that shareholders will purchase or redeem large quantities of shares of the fund. The fund may be an investment option for mutual funds that are managed by the Investment Manager and its affiliates as "funds of funds." Additionally, other investors from time to time may make substantial investments in the fund. Such shareholders may at times be considered to control the fund. In addition, a large number of shareholders may collectively purchase or redeem fund shares in large amounts rapidly or unexpectedly. Large shareholder transactions may adversely affect the fund's liquidity and net assets. These redemptions may also adversely affect the fund's performance if the fund is forced to sell securities, which may also increase the fund's brokerage costs.

**Authorized participant concentration risk**: Only an authorized participant may engage in creation and redemption transactions directly with the fund. The fund may have a limited number of financial institutions that act as authorized participants, none of which are obligated to engage in creation and/or redemption transactions. To the extent that those authorized participants do

Prospectus 7

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not engage in creation and redemption orders, there may be a significantly diminished trading market for fund shares or fund shares may trade at a discount (or premium) to net asset value and possibly face trading halts and/or de-listing.

**Cash transactions risk**: Unlike certain ETFs, the fund may effect creations and redemptions in cash or partially in cash. Therefore, it may be required to sell portfolio securities and subsequently recognize gains on such sales that the fund might not have recognized if it were to distribute portfolio securities in-kind. As such, investments in the fund's shares may be less tax-efficient than an investment in an ETF that distributes portfolio securities entirely in-kind.

**Market risk**: 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, outbreaks of infectious illnesses or other widespread public health issues, and factors related to a specific issuer, asset class, geography, industry or sector. These and other factors may lead to increased volatility and reduced liquidity in the fund's portfolio holdings, may negatively impact the fund's performance, and may exacerbate other risks to which the fund is subject.

**Fixed** **income investments risk**: The risks associated with fixed income investments include interest rate risk, which is the risk that the value of the fund's investments is likely to fall if interest rates rise. Fixed income investments are also subject to credit risk, which is the risk that issuers of the fund's investments may default on payment of interest or principal. Fixed income investments may be more susceptible to downgrades or defaults during economic downturns or other periods of economic stress. Interest rate risk is generally greater for longer-term bonds, and credit risk is generally greater for below-investment- grade bonds (sometimes referred to as "junk bonds"), which can be more sensitive to changes in markets, credit conditions, and interest rates, and may be considered speculative. Mortgage-backed investments, unlike traditional debt investments, are also subject to prepayment risk, which means that they may increase in value less than other bonds when interest rates decline and decline in value more than other bonds when interest rates rise. The fund may have to invest the proceeds from prepaid investments, including mortgage-backed investments, in other investments with less attractive terms and yields. The fund's investments in mortgage-backed securities, and in certain other securities and derivatives, may be or become illiquid. The fund's investments in mortgage-backed securities may make the fund's net asset value more susceptible to economic, market, political and other developments affecting the residential and commercial real estate markets and the servicing of mortgage loans secured by real estate properties. During periods of difficult economic conditions, delinquencies and losses on commercial mortgage-backed investments in particular generally increase, including as a result of the effects of those conditions on commercial real estate markets, the ability of commercial tenants

8 Prospectus

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to make loan payments, and the ability of a property to attract and retain commercial tenants.

**Derivatives risk**: The fund's use of derivatives may increase the risks of investing in the fund by increasing investment exposure (which may be considered leverage) or, in the case of many over-the-counter instruments, because of the potential inability to terminate or sell derivative positions and the potential failure of the other party to the instrument to meet its obligations. The risk of a party failing to meet its obligations may increase if the fund has significant exposure to that counterparty. The value of derivatives may move in unexpected ways due to unanticipated market movements, the use of leverage, imperfect correlation between the derivative instrument and the reference asset, or other factors, especially in unusual market conditions, and volatility in the value of derivatives could adversely impact the fund's returns, obligations and exposures. Derivatives are also subject to other risks, including liquidity risk (e.g., liquidity demands arising from the requirement to make payments to a derivative counterparty), operational risk (e.g., settlement issues or system failures) and legal risk (e.g., insufficient legal documentation or contract enforceability issues).

**Portfolio turnover rate** **:** The fund's portfolio turnover rate measures how frequently the fund buys and sells investments. A portfolio turnover rate of 100%, for example, would mean that the fund sold and replaced securities valued at 100% of the fund's assets within a one-year period. From time to time the fund may engage in frequent trading. Funds with high turnover may be more likely to realize capital gains that must be distributed to shareholders as taxable income. High turnover may also cause a fund to pay more brokerage commissions and other transaction costs (including imputed transaction costs), which may detract from performance. The fund's portfolio turnover rate and the amount of brokerage commissions it pays and transaction costs it incurs will vary over time based on market conditions.

**Management and operational risk**: There is no guarantee that the investment techniques, analyses, or judgments that the Investment Manager applies in making investment decisions for the fund will produce the intended outcome or that the investments selected for the fund will perform as well as other securities that were not selected for the fund. The Investment Manager, or the fund's other service providers, may experience disruptions or operating errors that could negatively impact the fund.

The fund may not achieve its goal, and it is not intended to be a complete investment program. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

### Performance
The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund's performance from year to year. The table shows the average annual total returns of the fund and also compares the fund's performance with the average annual total

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returns of a broad measure of market performance and an additional index with characteristics relevant to the fund. The fund makes updated performance information, including its current net asset value per share, available at www.franklintempleton.com.

*The fund's past performance (before and after taxes) is not necessarily an indication of how the fund will perform in the future.* 

Annual total returns

![LOGO](g842776g3g14k14.jpg)

---

| | | |
|:---|:---|:---|
|  Best Quarter: | Q3 2024 | 5.31% |
|  Worst Quarter: | Q4 2024 | -2.92% |
|  As of June 30, 2025, the fund's year-to-date return was 4.02%. |  |  |

---

#### Average annual total returns
(for periods ended 12/31/24)

---

| | | |
|:---|:---|:---|
| **ESG Core Bond ETF** | **1 year** | **Since <br> Inception<sup>1</sup>** |
|  Return before taxes | 2.02% | 2.01% |
|  Return after taxes on distributions | 0.23% | 0.30% |
|  Return after taxes on distributions and sales of fund shares | 1.18% | 0.80% |
|  Bloomberg U.S. Aggregate Index (no deduction for fees, expenses or taxes) | 1.25% | 1.71% |

---

<sup>1.</sup> Since inception January 19, 2023.

After-tax returns reflect the historical highest individual federal marginal income tax rates and do not reflect state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. These after-tax returns do not apply if you hold your fund shares through a 401(k) plan, an IRA, or another tax-advantaged arrangement.

Important data provider notices and terms are available at www.franklintempletondatasources.com. All data is subject to change.

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### Your fund's management

#### Investment Manager
Franklin Advisers, Inc. ("Franklin Advisers" or the "Investment Manager")

#### Sub-advisors
Putnam Investment Management, LLC ("Putnam Management")

Franklin Templeton Investment Management Limited ("FTIML")

#### Portfolio managers
**Andrew C. Benson** 

Portfolio Manager of Franklin Advisers and portfolio manager of the fund since 2023.

**Albert W. Chan, CFA** 

Portfolio Manager of Franklin Advisers and portfolio manager of the fund since 2023.

**Tina Chou** 

Portfolio Manager of Franklin Advisers and portfolio manager of the fund since 2024.

**Patrick A. Klein, Ph.D.** 

Portfolio Manager of Franklin Advisers and portfolio manager of the fund since 2024.

**Michael V. Salm** 

Portfolio Manager of Franklin Advisers and portfolio manager of the fund since 2023.

#### Purchase and sale of fund shares
Shares of the fund are listed and traded on an exchange, and individual fund shares may only be bought and sold in the secondary market through a broker or dealer at market price. These transactions, which do not involve the fund, are made at market prices that may vary throughout the day, rather than at net asset value. Shares of the fund may trade at a price greater than the fund's net asset value (premium) or less than the fund's net asset value (discount). An investor may incur costs attributable to the difference between the highest price a buyer is willing to pay to purchase shares (bid) and the lowest price a seller is willing to accept for shares (ask) when buying or selling fund shares in the secondary market (the "bid-ask spread"). Recent information, including information regarding the fund's net asset value, market price, premiums and discounts, and bid-ask spread, is available at www.franklintempleton.com.

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#### Tax information
The fund's distributions will be taxed as ordinary income or capital gains unless you hold the shares through a tax-advantaged arrangement, in which case you will generally be taxed only upon withdrawal of monies from the arrangement.

#### Financial intermediary compensation
If you purchase the fund through a broker/dealer or other financial intermediary (such as a bank or financial professional), the fund and its related companies may pay that intermediary for the sale of fund shares and related services. Please bear in mind that these payments may create a conflict of interest by influencing the broker/dealer or other intermediary to recommend the fund over another investment. Ask your advisor or visit your advisor's website for more information.

### Fund details

#### Principal investment strategies
The fund invests mainly in a diversified portfolio of investment-grade fixed-income securities with a focus on companies or issuers that the Investment Manager believes meet relevant ESG criteria.

The fund invests mainly in bonds of governments and private companies located in the United States that are investment-grade in quality with intermediate- to long-term maturities (three years or longer). Investment-grade securities are rated at least BBB or its equivalent at the time of purchase by a nationally recognized securities rating organization, or are unrated investments that the Investment Manager believes are of comparable quality. The fund may also invest in below-investment-grade investments. However, the fund will not invest in securities that are rated lower than B or its equivalent by each rating agency rating the investment, or are unrated securities that the Investment Manager believes are of comparable quality. The fund will not necessarily sell an investment if its rating is reduced (or increased) after purchase. The fund may also invest in foreign fixed income investments, although foreign investments do not represent a primary focus of the fund.

The Investment Manager may consider, among other factors, a company's or issuer's ESG criteria (as described below), credit, interest rate, liquidity and prepayment risks, as well as general market conditions, when deciding whether to buy or sell investments.

Under normal circumstances, the fund invests at least 80% of the value of its net assets in fixed-income securities that meet the Investment Manager's ESG criteria. This policy is non-fundamental and may be changed only after 60 days' notice to shareholders. The Investment Manager may not apply ESG criteria to investments that are not subject to the fund's 80% policy, and such investments may not meet the Investment Manager's ESG criteria. The fund will not necessarily sell an investment if it no longer meets the Investment

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Manager's ESG criteria after purchase, subject to compliance with the 80% policy.

In evaluating investments for the fund, the Investment Manager identifies relevant ESG criteria for specific sectors, subsectors or countries using an internally developed framework, which may take into account independent third-party ESG data. The Investment Manager identifies specific ESG criteria (i.e., quality of board, product safety and quality, workforce relations, lending criteria, emissions and waste management, energy efficiency, or governmental corruption, among others) and assigns a percentage weighting to those criteria based on the Investment Manager's assessment of which criteria are more or less important. The Investment Manager then categorizes the relevance of each ESG criterion and assigns each criterion a percentage weighting. As part of this analysis, the Investment Manager may utilize metrics and information such as emissions data, carbon intensity, sources of energy used for operations, renewable energy consumption, water use and re-use, waste diversion from landfill, employee safety and diversity data, FICO credit scores and income statistics for borrowers, supplier audits, product safety, board composition, or the Global Peace Index. After evaluating these criteria and applying the established weightings, the Investment Manager will assign each company, issuer or country, as applicable, a proprietary ESG rating ranging from a 5.0 to a 1.0, with 5.0 indicating the highest (best) ESG rating and 1.0 indicating the lowest (worst) ESG rating. In order to meet the Investment Manager's ESG criteria for purposes of the above-referenced non-fundamental investment policy, a company or issuer must generally be rated 2.5 or above by the Investment Manager.

For corporate credit investments, which may include investment grade-rated and below investment grade-rated securities, the Investment Manager also applies a momentum factor in determining the ESG rating of a company or issuer based on the Investment Manager's view of whether the performance of the company or issuer under the relevant ESG criteria is expected to improve or decline. If an issuer is rated 2.0 or above and has a positive momentum factor, a company or issuer will be viewed as meeting the Investment Manager's criteria for purposes of the above-referenced non-fundamental policy. Conversely, if an issuer has a negative momentum factor, it will be viewed as meeting the Investment Manager's criteria for purposes of the above-referenced non-fundamental policy only if it is rated a 3.0 or above.

While the Investment Manager may consider independent third-party data as a part of its analytical process, the portfolio management team performs its own independent analysis of issuers and does not rely solely on third-party screens.

The fund's approach to ESG investing incorporates fundamental research together with consideration of ESG criteria which may include, but are not limited to, those included in the following descriptions. Environmental criteria include, for example, a company's or issuer's carbon intensity and use of resources like water or minerals. ESG measures in this area might include plans to reduce waste, increase recycling, raise the proportion of energy supplied from renewable sources, reduce greenhouse gas emissions per

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capita or improve product design to be less resource intensive. Social criteria include, for example, labor practices, supply chain management, and community relations. ESG measures in this area might include programs to improve employee well-being, commitment to workplace equality and diversity, stewardship of supplier relationships and working conditions, lending to underserved populations, or the degree of universal healthcare coverage. Governance criteria include, for example, board composition, executive compensation, and debt structures that improve transparency and bondholders' rights. ESG measures in this area might include improvements in board independence or diversity, alignment of governmental or management incentives with appropriate strategic ESG objectives, and disclosure of operating and ESG metrics to bondholders.

In the corporate credit sector, the Investment Manager combines fundamental analysis with relevant ESG insights with a forward-looking perspective. The Investment Manager believes that this approach contributes to a more nuanced assessment of an issuer's credit profile.

The Investment Manager believes that securitized debt instruments present unique challenges in applying ESG criteria due to the presence of various asset types, counterparties involved, and the complex structure of the securitized debt market along with a lack of available ESG-related data. In evaluating securitized debt instruments for potential investment, the Investment Manager takes a broad approach, analyzing both the terms of the transaction, including the asset type being securitized, the terms of the transaction, the structure of the securitization, as well as key counterparties. Opportunities are analyzed at the asset level within each securitization and each subsector to identify assets that meet relevant ESG thresholds. Additionally, in evaluating securitized debt instruments, the Investment Manager analyzes relevant ESG criteria regarding the originator, servicers, or other relevant counterparties.

In the sovereign debt sector, the Investment Manager uses quantitative modeling and fundamental research to evaluate countries across a variety of ESG criteria (i.e., natural resource dependence and level of public corruption) and non-ESG criteria (i.e., global economic conditions, market valuations, and technical factors). The Investment Manager believes that sovereign issuers with better ESG scores generally benefit from lower borrowing costs and that ESG criteria may influence the perception of the credit risk of a country's debt.

The Investment Manager evaluates ESG considerations using independent third-party data (where available) and also uses company or issuer disclosures and public data sources. The Investment Manager believes that ESG considerations are best analyzed in combination with a company's or issuer's fundamentals, including a company's or issuer's industry, location, strategic position, and key relationships.

In addition to bonds, the fund may also invest in other fixed-income instruments. In addition to the main investment strategies described above, the fund may make other types of investments, such as assignments of and participations in fixed and floating rate bank loans, investments in hybrid and

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structured bonds and notes, and preferred securities that would be characterized as debt securities under applicable accounting standards and tax laws. The fund may also use derivatives, such as futures, options, certain foreign currency transactions and swap contracts, for both hedging and non-hedging purposes.

Shareholders should be aware that investments made by the fund and results achieved by the fund at any given time are not expected to be the same as those made by other funds for which the Investment Manager acts as investment manager, including funds with names, investment objectives, and policies that are similar to the fund. The Trustees may change the fund's goal, investment strategies and other policies set forth in this prospectus without shareholder approval, except as otherwise provided in the prospectus or statement of additional information.

#### Principal investment risks
The principal and certain additional risks of investing in the fund are described below. These risks and other factors may adversely affect the fund's net asset value, market price and performance. When you sell your shares, they may be worth more or less than what you paid for them, which means that you could lose money as a result of your investment. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund may not achieve its investment objective, and it is not intended to be a complete investment program. The fund's Statement of Additional Information ("SAI") contains additional information about the fund's investment policies and risks.

**ESG investing risk** **:** Investing with a focus on companies or issuers that meet the Investment Manager's ESG criteria may result in the fund investing in certain types of companies, issuers, industries or sectors that the market may not favor. Conversely, investing in such companies or issuers may result in the fund foregoing investment in securities that outperform the fund's investments in certain environments. In evaluating an investment opportunity, the Investment Manager may make investment decisions without the availability of optimal ESG-related data (which may be even less available with securitized debt instruments) or based on information and data that is incomplete or inaccurate. ESG criteria are not uniformly defined and applying such factors involves subjective assessments. ESG scorings and assessments of issuers can vary across third-party data providers and may change over time. The Investment Manager does not rely exclusively on third-party data providers in evaluating ESG criteria. ESG information from third-party data providers may be incomplete, inaccurate or unavailable, particularly with respect to companies in emerging market countries, which may adversely impact the investment process. The fund does not restrict its investments to "green bonds" (i.e., U.S. dollar-denominated bonds designated as "green" by the Climate Bonds Initiative) and does not restrict investments based solely on "negative screens". In addition, a company's or issuer's business practices, products or services may change over time. As a result of these possibilities, among

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others, the fund may temporarily hold securities that are inconsistent with the fund's ESG investment criteria. Regulatory changes or interpretations regarding the definitions and/or use of ESG criteria could have a material adverse effect on the fund's ability to invest in accordance with its investment policies and/or achieve its investment objective, as well as the ability of certain classes of investors to invest in funds, such as the fund, whose strategies include ESG criteria. There may be limitations with respect to availability of ESG data in certain sectors, as well as limited availability of investments with positive ESG assessments in certain sectors. The Investment Manager's evaluation of ESG criteria may change over time.

Because fixed-income investments generally represent a promise to pay principal and interest by an issuer, and not an ownership interest, and may involve complex structures, ESG-related investment considerations may have a more limited impact on risk and return (or may have an impact over a different investment time horizon) relative to other asset classes, and this may be particularly true for shorter-term investments. Third-party ESG data regarding fixed-income investments is generally less available than ESG data for equity investments. In addition, holders of fixed-income investments do not typically have voting rights, unlike holders of equity investments who have the right to vote on issuer proposals.

**Model risk** **:** The Investment Manager uses proprietary models and data supplied by third parties. The fund uses models and data to, among other things, identify and assess trends and market opportunities and provide risk management insights. The fund regularly enhances and updates its models to reflect developing research, fundamental analysis, and access to new data.

If the quantitative models or data used in managing the fund prove to be incorrect or incomplete, investment decisions made in reliance on the models or data may not produce the desired results and may cause the fund to underperform its benchmark or other funds with a similar investment goal, and the fund may realize losses. In addition, models may incorrectly forecast future behavior, leading to potential losses. Use of these models in unforeseen or certain low-probability scenarios (often involving a market disruption of some kind) also may result in losses for the fund.

All models require data. Some of the models that the fund may use are typically constructed based on historical data, and the success of these models is dependent largely on the accuracy and reliability of the supplied historical data. If incorrect data is entered into a model, the resulting output will be incorrect.

**Fluctuation of** **net asset value and share price risk** **:** Shares may trade at a larger premium or discount to net asset value than shares of other ETFs. The net asset value of the fund's shares will generally fluctuate with changes in the market value of the fund's holdings. The fund's shares are listed on an exchange and can be bought and sold in the secondary market at market prices. The market prices of shares will fluctuate in accordance with changes in net asset value and supply and demand on the listing exchange. Although the

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arbitrage process is designed to permit the shares of the fund to trade at market prices that are at or close to net asset value, it is possible that the market price and net asset value will vary significantly. As a result, you may sustain losses if you pay more than the shares' net asset value when you purchase shares or receive less than the shares' net asset value when you sell shares, in the secondary market. During periods of disruptions to creations and redemptions, the existence of extreme market volatility, or lack of an active trading market for the fund's shares, the market price of fund shares is more likely to differ significantly from the fund's net asset value or the intraday value of the fund's holdings. During such periods, you may be unable to sell your shares or may incur significant losses if you sell your shares. There are various methods by which investors can purchase and sell shares and various orders that may be placed. Investors should consult their financial intermediary before purchasing or selling shares of the fund. Disruptions at market makers, authorized participants or market participants may also result in significant differences between the market price of the fund's shares and the fund's net asset value. In addition, in stressed market conditions or periods of market disruption or volatility, the market for shares may become less liquid in response to deteriorating liquidity in the markets for the fund's underlying portfolio holdings.

The market price of shares during the trading day, like the price of any exchange-traded security, includes a "bid/ask" spread charged by the exchange specialist, market makers, or other participants that trade the particular security. In times of severe market disruption or volatility, the bid/ask spread can increase significantly. At those times, shares are most likely to be traded at a discount to net asset value, and the discount is likely to be greatest when the price of shares is falling fastest, which may be the time that you most want to sell your shares.

**Trading issues risk** **:** The fund has a limited public trading history. Although shares are listed on an exchange, there can be no assurance that an active trading market or requirements to remain listed will be met or maintained, or that the market for fund shares will operate as intended. If the market does not operate as intended, it could lead to the fund's shares trading at wider spreads and larger premiums and discounts to net asset value than other actively managed ETFs, particularly during periods of market disruption or volatility. As a result, it may cost investors more to trade fund shares than shares of other ETFs.

There is no guarantee that the fund will be able to attract market makers and authorized participants. There are no obligations of market makers to make a market in the fund's shares or of authorized participants to submit purchase or redemption orders for creation units.

The market prices of the fund's shares are expected to fluctuate, in some cases materially, in response to changes in the fund's net asset value, the intraday value of the fund's holdings and supply and demand for the fund's shares. The Investment Manager cannot predict whether the fund's shares will trade above, below or at their net asset value or the intraday value of the fund's

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holdings. During such periods, investors may incur significant losses if they sell shares.

The securities held by the fund may be traded in markets that close at a different time than the exchange on which the fund's shares are listed. Liquidity in those securities may be reduced after the applicable closing times. Accordingly, during the time when the exchange is open but after the applicable market closing, fixing or settlement times, bid-ask spreads on the exchange and the corresponding premium or discount to the shares' net asset value may widen.

In addition, trading of shares in the secondary market may be halted, for example, due to activation of market-wide "circuit breakers." If trading halts or an unanticipated early closing of the listing exchange occurs, a shareholder may be unable to purchase or sell shares of the fund.

If the fund's shares are delisted from the listing exchange, the Investment Manager may seek to list the fund shares on another market, merge the fund with another exchange-traded fund or traditional mutual fund, or redeem the fund shares at net asset value.

Shares of the fund, similar to shares of other issuers listed on a stock exchange, may be sold short and are therefore subject to the risk of increased volatility and price decreases associated with being sold short.

**Large shareholder transaction risk:** The fund is subject to the risk that shareholders will purchase or redeem large quantities of shares of the fund (such purchases or redemptions, "large shareholder transactions"). The fund may be an investment option for mutual funds that are managed by the Investment Manager and its affiliates as "funds of funds." Additionally, other investors from time to time may make substantial investments in the fund. Such shareholders may at times be considered to control the fund. In addition, a large number of shareholders collectively may purchase or redeem fund shares in large amounts rapidly or unexpectedly. A number of circumstances may cause the fund to experience large shareholder transactions, such as changes in the eligibility criteria for the fund; liquidations, reorganizations, repositionings, or other announced fund events; or changes in investment objectives, strategies, policies, risks, or investment personnel. Large redemptions may be more likely during times of market stress or reduced liquidity, exacerbating the potential impact on the fund.

Large shareholder transactions may adversely affect the fund's liquidity and net assets. These transactions could adversely affect the fund's performance if the fund is forced to sell portfolio securities to satisfy redemption requests or purchase securities for the portfolio in connection with the investment of subscription proceeds when the fund would otherwise not do so, and at unfavorable prices, which may increase the fund's brokerage costs and accelerate the realization of taxable income and/or gains to shareholders. The effects of taxable income and/or gains resulting from large shareholder transactions would particularly impact non-redeeming shareholders who do not hold their fund shares in an IRA, 401(k) plan or other tax-advantaged plan. To

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the extent that such transactions result in short-term capital gains, such gains will generally be taxed at the ordinary income tax rate for shareholders who hold fund shares in a taxable account. In addition, fund returns also may be adversely affected if the fund holds a portion of its assets in liquid, cash-like investments in connection with or in anticipation of shareholder redemptions.

**Authorized participant concentration risk** **:** Only authorized participants may engage in creation and redemption transactions directly with the fund. The fund may have a limited number of financial institutions that act as authorized participants, none of which are obligated to engage in creation and/or redemption transactions. Decisions by market makers or authorized participants to reduce their role with respect to market making or creation and redemption activities during times of market stress, or a decline in the number of authorized participants due to decisions to exit the business, bankruptcy, or other factors, could inhibit the effectiveness of the arbitrage process in maintaining the relationship between the underlying value of the fund's portfolio securities and the market price of fund shares. To the extent no other authorized participants are able to step forward to create or redeem, shares may trade at a discount (or premium) to net asset value and possibly face delisting.

**Cash transactions risk** **:** Unlike certain ETFs, the fund may effect creations and redemptions in cash or partially in cash. Therefore, it may be required to sell portfolio securities and subsequently recognize gains on such sales that the fund might not have recognized if it were to distribute portfolio securities in-kind. As such, investments in the fund's shares may be less tax-efficient than an investment in an ETF that distributes portfolio securities entirely in-kind.

**Market risk** **:** 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 (including perceptions about monetary policy, interest rates, inflation or the risk of default); government actions (including protectionist measures, intervention in the financial markets or other regulation, and changes in fiscal, monetary or tax policies); geopolitical events or changes (including natural disasters, terrorism and war); outbreaks of infectious illnesses or other widespread public health issues (including epidemics and pandemics); and factors related to a specific issuer, asset class, geography, industry, or sector. Foreign financial markets have their own market risks, and they may be more or less volatile than U.S. markets and may move in different directions. During a general downturn in financial markets, multiple asset classes may decline in value simultaneously. These and other factors may lead to increased volatility and reduced liquidity in the fund's portfolio holdings. During those periods, the fund may experience high levels of shareholder redemptions, and may have to sell securities at times when it would otherwise not do so, and at unfavorable prices. These risks may be exacerbated during economic downturns or other periods of economic stress.

The COVID-19 pandemic and efforts to contain its spread have resulted in, among other effects, significant market volatility, exchange trading

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

The United States and other countries are periodically involved in disputes over trade and other matters, which may result in tariffs, investment restrictions and adverse impacts on affected companies and securities. For example, the United States has imposed tariffs and other trade barriers on Chinese exports, has restricted sales of certain categories of goods to China, and has established barriers to investments in China. Trade disputes may adversely affect the economies of the United States and its trading partners, as well as companies directly or indirectly affected and financial markets generally. The United States government has prohibited U.S. persons from investing in Chinese companies designated as related to the Chinese military. These and possible future restrictions could limit the fund's opportunities for investment and require the sale of securities at a loss or make them illiquid. Moreover, the Chinese government is involved in a longstanding dispute with Taiwan that has included threats of invasion. If the political climate between the United States and China does not improve or continues to deteriorate, if China were to attempt unification of Taiwan by force, or if other geopolitical conflicts develop or get worse, economies, markets and individual securities may be severely affected both regionally and globally, and the value of the fund's assets may go down.

**Interest rate risk** **:** The values of bonds and other debt instruments usually rise and fall in response to changes in interest rates. Interest rates can change in response to the supply and demand for credit, government and/or central bank monetary policy and action, inflation rates, and other factors. Declining interest rates generally result in an increase in the value of existing debt instruments, and rising interest rates generally result in a decrease in the value of existing debt instruments. Changes in a debt instrument's value usually will not affect the amount of interest income paid to the fund, but will affect the value of the fund's shares. Interest rate risk is generally greater for investments with longer maturities.

Some investments give the issuer the option to call or redeem an investment before its maturity date. If an issuer calls or redeems an investment during a time of declining interest rates, the Investment Manager might have to reinvest the proceeds in an investment offering a lower yield, and, therefore, the fund

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might not benefit from any increase in value as a result of declining interest rates.

**Credit risk** **:** Investors normally expect to be compensated in proportion to the risk they are assuming. Thus, debt of issuers with poor credit prospects usually offers higher yields than debt of issuers with more secure credit. Higher-rated investments generally have lower credit risk.

The fund invests mainly in investment-grade investments. These are rated at least BBB or its equivalent at the time of purchase by a nationally recognized securities rating organization, or are unrated investments that the Investment Manager believes are of comparable quality.

The fund may also invest in securities rated below investment grade. However, the fund will not invest in securities that are rated lower than B or its equivalent by each rating agency rating the investment, or in unrated securities that the investment manager believes are of comparable quality. The fund will not necessarily sell an investment if its rating is reduced after the fund buys it. Investments rated below BBB or its equivalent are below-investment-grade in quality (sometimes referred to as "junk bonds") and may be considered speculative. This rating reflects a greater possibility that the issuers may be unable to make timely payments of interest and principal and thus default. If a default occurs, or is perceived as likely to occur, the value of the investment will usually be more volatile and is likely to fall. The value of a debt instrument may also be affected by changes in, or perceptions of, the financial condition of the issuer, borrower, counterparty, or other entity, or underlying collateral or assets, or changes in, or perceptions of, specific or general market, economic, industry, political, regulatory, geopolitical, environmental, public health, and other conditions. A default or expected default could also make it difficult for the fund to sell the investment at a price approximating the value the investment manager had previously placed on it. Lower-rated debt usually has a more limited market than higher-rated debt, which may at times make it difficult for the fund to buy or sell certain debt instruments or to establish their fair values. Credit risk is generally greater for zero-coupon bonds and other investments that are issued at less than their face value and that are required to make interest payments only at maturity rather than at intervals during the life of the investment.

Credit ratings are based largely on the issuer's historical financial condition and the rating organizations' investment analysis at the time of rating. The rating assigned to any particular investment does not necessarily reflect the issuer's current financial condition, and does not reflect an assessment of the investment's volatility or liquidity. Although credit ratings are considered when making investment decisions, the Investment Manager performs its own investment analysis and does not rely only on ratings assigned by the rating organizations. The success in achieving the fund's goal may depend more on the Investment Manager's credit analysis when buying lower-rated debt than when buying investment-grade debt. The fund may have to participate in legal proceedings involving the issuer. This could increase the fund's operating expenses and decrease its net asset value.

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Although investment-grade investments generally have lower credit risk, they may share some of the risks of lower-rated investments. U.S. government investments generally have the least credit risk, but are not completely free of credit risk. While some investments, such as U.S. Treasury obligations and Ginnie Mae certificates, are backed by the full faith and credit of the U.S. government, others are backed only by the credit of the issuer. Mortgage-backed securities may be subject to the risk that underlying borrowers will be unable to meet their obligations.

Fixed income investments may be more susceptible to downgrades or defaults during economic downturns or other periods of economic stress, which can significantly strain the financial resources of debt issuers, including the issuers of the bonds in which the fund invests (or has exposure to). This may make it less likely that those issuers can meet their financial obligations when due and may adversely impact the value of their bonds, which could negatively impact the performance of the fund. It is difficult to predict the level of financial stress and duration of such stress issuers may experience.

**Prepayment risk** **:** Traditional debt investments typically pay a fixed rate of interest until maturity, when the entire principal amount is due. In contrast, payments on securitized debt instruments, including mortgage-backed and asset-backed investments, typically include both interest and partial payment of principal. Principal may also be prepaid voluntarily, or as a result of refinancing or foreclosure. The fund may have to invest the proceeds from prepaid investments in other investments with less attractive terms and yields.

Compared to debt that cannot be prepaid, mortgage-backed investments are less likely to increase in value during periods of declining interest rates and have a higher risk of decline in value during periods of rising interest rates. These investments may increase the volatility of the fund. Some mortgage-backed investments receive only the interest portion or the principal portion of payments on the underlying mortgages. The yields and values of these investments are extremely sensitive to changes in interest rates and in the rate of principal payments on the underlying mortgages. The market for these investments may be volatile and limited, which may make them difficult to buy or sell. Asset-backed securities are structured like mortgage-backed securities, but instead of mortgage loans or interests in mortgage loans, the underlying assets may include such items as motor vehicle installment sales or installment loan contracts, leases of various types of real and personal property and receivables from credit card agreements. Asset-backed securities are subject to risks similar to those of mortgage-backed securities.

**Derivatives risk** **:** The fund may engage in a variety of transactions involving derivatives, such as futures, options, certain foreign currency transactions and swap contracts. Derivatives are financial instruments whose value depends upon, or is derived from, the value of something else, such as one or more underlying investments, pools of investments, indexes or currencies. The fund may make use of "short" derivative positions, the values of which typically move in the opposite direction from the price of the underlying investment, pool of investments, index or currency. The fund may use derivatives both for

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hedging and non-hedging purposes. For example, the fund may use derivatives to increase or decrease the fund's exposure to long- or short-term interest rates (in the United States or abroad), adjust the term of the fund's U.S. Treasury security exposure, adjust the fund's positioning on the yield curve (a line that plots interest rates of bonds having equal credit quality but differing maturity dates) or to take tactical positions along the yield curve or to a particular currency or group of currencies, or as a substitute for a direct investment in the securities of one or more issuers. However, the fund may also choose not to use derivatives based on the Investment Manager's evaluation of market conditions or the availability of suitable derivatives. Investments in derivatives may be applied toward meeting a requirement to invest in a particular kind of investment if the derivatives have economic characteristics similar to that investment.

Derivatives involve special risks and may result in losses. The successful use of derivatives depends on the Investment Manager's ability to manage these sophisticated instruments. Some derivatives are "leveraged," which means they provide the fund with investment exposure greater than the value of the fund's investment in the derivatives. As a result, these derivatives may magnify or otherwise increase investment losses to the fund. The risk of loss from certain short derivative positions is theoretically unlimited. The value of derivatives may move in unexpected ways due to unanticipated market movements, the use of leverage, imperfect correlation between the derivative instrument and the reference asset, or other factors, especially in unusual market conditions, and volatility in the value of derivatives could adversely impact the fund's returns, obligations and exposures.

Other risks arise from the potential inability to terminate or sell derivative positions. Derivatives may be subject to liquidity risk due to the fund's obligation to make payments of margin, collateral, or settlement payments to counterparties. A liquid secondary market may not always exist for the fund's derivative positions. In fact, certain over-the-counter instruments (investments not traded on an exchange) may not be liquid. Over-the-counter instruments also involve the risk that the other party to the derivative transaction may not be willing or able to meet its obligations with respect to the derivative transaction. The risk of a party failing to meet its obligations may increase if the fund has significant exposure to that counterparty. Derivative transactions may also be subject to operational risk, including due to documentation and settlement issues, system failures, inadequate controls and human error, and legal risk due to insufficient documentation, insufficient capacity or authority of a counterparty, or issues with respect to the legality or enforceability of the derivative contract. For further information about additional types and risks of derivatives, see *Miscellaneous Investments, Investment Practices and Risks* in the SAI.

Floating rate obligations risk: The fund may purchase taxable floating rate notes for short-term cash management or other investment purposes. Floating rate notes are debt instruments that provide for periodic adjustments in the interest rate. The interest rate on these instruments may be reset daily, weekly

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or on some other reset period and may have a floor or ceiling on interest rate changes. The interest rate of a floating rate instrument may be based on a known lending rate, such as the Secured Overnight Financing Rate, and is reset whenever such rate is adjusted. Interest rate adjustments are designed to help stabilize the instrument's price or maintain a fixed spread to a predetermined benchmark. While this feature may protect against a decline in the instrument's market price when interest rates or benchmark rates rise, it lowers the fund's income when interest rates or benchmark rates fall. The fund's income from its floating rate investments also may increase if interest rates rise. Floating rate obligations are less effective than fixed rate instruments at locking in a particular yield. Nevertheless, such obligations may fluctuate in value in response to interest rate changes if there is a delay between changes in market interest rates and the interest reset date for the obligation, or for other reasons. The fund's ability to receive payments of principal and interest and other amounts in connection with loans held by it will depend primarily on the financial condition of the issuer. The failure by the fund to receive scheduled interest or principal payments on a loan would adversely affect the income of the fund and would likely reduce the value of its assets, which would be reflected in a reduction in the fund's net asset value.

Floating rate notes and bonds may have a stated maturity in excess of one year, but may have features that permit a holder to demand payment of principal plus accrued interest upon a specified number of days' notice. Frequently, such obligations are secured by letters of credit or other credit support arrangements provided by banks. If these obligations are not secured by letters of credit or other credit support arrangements, the fund's right to demand payment will be dependent on the ability of the issuer to pay principal and interest on demand. In addition, these obligations frequently are not rated by credit rating organizations and may involve heightened risk of default by the issuer. The issuer of such obligations normally has a corresponding right, after a given period, to prepay in its discretion the outstanding principal of the obligation plus accrued interest upon a specific number of days' notice to the holders. There is no assurance that the fund will be able to reinvest the proceeds of any prepayment at the same interest rate or on the same terms as those of the original instrument. The absence of an active secondary market for floating rate notes could make it difficult for the fund to dispose of the instruments, and the fund could suffer a loss if the issuer defaults or during periods in which the fund is not entitled to exercise its demand rights. When a reliable trading market for the floating rate instruments held by the fund does not exist and the fund may not demand payment of the principal amount of such instruments within seven days, the instruments may be deemed illiquid and therefore subject to the fund's limitation on investments in illiquid securities.

**Foreign investments risk** **:** The fund may invest in foreign investments, although they do not represent a primary focus of the fund. Foreign investments involve certain special risks. For example, their values may decline in response to changes in currency exchange rates, unfavorable political and legal developments, unreliable or untimely information, and

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economic and financial instability. In addition, the liquidity of these investments may be more limited than for most U.S. investments, which means the fund may at times be unable to sell them at desirable prices. Foreign settlement procedures may also involve additional risks. These risks are generally greater in the case of developing (also known as emerging) markets, which typically have less developed legal and financial systems.

There may be less publicly-available information, or less reliable publicly-available information, about foreign companies (including information related to companies' ESG practices), particularly with respect to emerging market companies, than publicly-available information regarding U.S. companies. As a result, the fund's ability to evaluate a foreign company, including with respect to its ESG or sustainability practices, may be more limited than its ability to evaluate a U.S. company. Certain of these risks may also apply to some extent to U.S.-traded investments that are denominated in foreign currencies, investments in U.S. companies or issuers that are traded in foreign markets, or investments in U.S. companies or issuers that have significant foreign operations.

**Liquidity and illiquid investments risk** **:** The fund may invest up to 15% of its net assets in illiquid investments, which may be considered speculative and which may be difficult to sell. The sale of many of these investments is prohibited or limited by law or contract. Some investments may be difficult to value for purposes of determining the fund's net asset value. Certain other investments may not have an active trading market due to adverse market, economic, industry, political, regulatory, geopolitical, environmental, public health, and other conditions, including investors trying to sell large quantities of a particular investment or type of investment, or lack of market makers or other buyers for a particular investment or type of investment. The fund may not be able to sell its illiquid investments when the Investment Manager considers it desirable to do so, or the fund may be able to sell them only at less than their value.

**Management and operational risk** **:** The fund is actively managed and its performance will reflect, in part, the Investment Manager's ability to make investment decisions that seek to achieve the fund's investment objective. There is no guarantee that the investment techniques, analyses, or judgments that the Investment Manager applies in making investment decisions for the fund will produce the intended outcome or that the investments selected for the fund will perform as well as other securities that were not selected for the fund. As a result, the fund may underperform its benchmark or other funds with a similar investment goal and may realize losses. In addition, the Investment Manager, or the fund's other service providers, may experience disruptions or operating errors that could negatively impact the fund. Although service providers may have operational risk management policies and procedures and take appropriate precautions to avoid and mitigate risks that could lead to disruptions and operating errors, it may not be possible to identify all of the operational risks that may affect the fund or to develop processes and controls to completely eliminate or mitigate their occurrence or effects.

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**Portfolio turnover rate** **:** The fund's portfolio turnover rate measures how frequently the fund buys and sells investments. A portfolio turnover rate of 100%, for example, would mean that the fund sold and replaced securities valued at 100% of the fund's assets within a one-year period. Funds with high turnover may be more likely to realize capital gains that must be distributed to shareholders as taxable income. High turnover may also cause a fund to pay more brokerage commissions and other transaction costs (including imputed transaction costs), which may detract from performance. The fund's portfolio turnover rate and the amount of brokerage commissions it pays and transaction costs it incurs will vary over time based on market conditions.

**Other investments:** In addition to the main investment strategies described above, the fund may make other types of investments, such as investments in preferred stocks, convertible securities, and asset-backed securities. The fund may also invest in cash or cash equivalents, including money market instruments or short-term instruments such as commercial paper, bank obligations (e.g., certificates of deposit and bankers' acceptances), repurchase agreements, and U.S. Treasury bills or other government obligations. The fund may also from time to time invest all or a portion of its assets, including any cash balances, in money market and/or short-term bond funds advised by the Investment Manager or its affiliates. The percentage of the fund invested in cash and cash equivalents and such money market and short-term bond funds is expected to vary over time and will depend on various factors, including market conditions, purchase and redemption activity by fund shareholders, and the Investment Manager's assessment of the cash level that is appropriate to allow the fund to pursue investment opportunities as they arise and to meet shareholder redemption requests. Large cash positions may dampen performance and may prevent the fund from achieving its goal. These practices may be subject to other risks, as described under *Miscellaneous Investments, Investment Practices and Risks* in the SAI.

**Temporary defensive strategies:** In response to adverse market, economic, political or other conditions, the fund may take temporary defensive positions, such as investing some or all of the fund's assets in cash and cash equivalents, that differ from the fund's usual investment strategies. However, the fund may choose not to use these temporary defensive strategies for a variety of reasons, even in very volatile market conditions. If the fund employs these strategies, the fund may miss out on investment opportunities and may not achieve its goal. Additionally, while temporary defensive strategies are mainly designed to limit losses, they may not work as intended.

**Changes in policies:** The Trustees may change the fund's goal, investment strategies and other policies set forth in this prospectus without shareholder approval, except as otherwise provided in the prospectus or SAI.

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### Fund management

#### The fund's investment manager
Franklin Advisers, One Franklin Parkway, San Mateo, CA 94403-1906, is the fund's investment manager, responsible for making investment decisions for the fund and managing the fund's other affairs and business. Franklin Advisers is a wholly-owned subsidiary of Franklin Resources, Inc. ("Resources"). Together, Franklin Advisers and its affiliates manage, as of June 30, 2025, $1.61 trillion in assets, and have been in the investment management business since 1947.

Under an agreement with the Investment Manager, Putnam Management, 100 Federal Street, Boston, MA 02110, serves as the fund's sub-adviser, responsible for providing certain advisory and related services. Putnam Management is an indirect, wholly-owned subsidiary of Resources. The Investment Manager (and not the fund) will pay a monthly fee to Putnam Management based on the costs of Putnam Management in providing these services to the fund, which may include a mark-up determined and revised from time to time in accordance with Franklin Templeton's transfer pricing policy, in line with applicable tax/transfer pricing regulations, but not to exceed 15% over such costs.

The Investment Manager has retained FTIML, Cannon Place, 78 Cannon Street, London, EC4N 6HL, England, to make investment decisions for such fund assets as may be designated from time to time by the Investment Manager. FTIML is not currently managing any fund assets. If FTIML were to manage any fund assets, the Investment Manager (and not the fund) would pay a monthly sub-management fee to FTIML for its services at the annual rate of 0.20% of the average net asset value of any fund assets managed by FTIML. FTIML is an indirect subsidiary of Resources.

Pursuant to the arrangements described above, investment professionals who are based in foreign jurisdictions may serve as portfolio managers of the fund or provide other investment services, consistent with local regulations.

The fund pays an annual all-inclusive management fee of 0.35% to the Investment Manager based on the fund's average daily net assets. The management fee is calculated and accrued daily. The management fee covers all of the other expenses of the fund with limited exceptions.

The Investment Manager has agreed to reduce its fees by an amount equal to the management fees paid by Franklin Templeton affiliated funds with respect to assets the fund invests in such affiliated funds. This arrangement cannot be terminated prior to August 31, 2026 without approval of the Board of Trustees.

For the fiscal year ended April 30, 2025, the fund paid an effective management fee (after any applicable waivers) of 0.34% of the fund's average net assets.

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A discussion regarding the basis for the Trustees' approval of the fund's investment management contract and subadvisory contracts is available in the fund's report on Form N-CSR for the period ended October 31, 2024.

**Portfolio managers.** The portfolio managers identified below are jointly and primarily responsible for the day-to-day management of the fund's portfolio.

**Andrew C. Benson Portfolio Manager of Franklin Advisers** 

Mr. Benson has been a portfolio manager of the fund since 2023. He joined Franklin Templeton in 2024. Prior to joining Franklin Templeton, Mr. Benson was a portfolio manager for Putnam Investment Management, LLC.

**Albert W. Chan, CFA Portfolio Manager of Franklin Advisers** 

Mr. Chan has been a portfolio manager of the fund since 2023. He joined Franklin Templeton in 2024. Prior to joining Franklin Templeton, Mr. Chan was a portfolio manager for Putnam Investment Management, LLC.

**Tina Chou Portfolio Manager of Franklin Advisers** 

Ms. Chou has been a portfolio manager of the fund since September 2024. She joined Franklin Templeton in 2004.

**Patrick A. Klein, Ph.D. Portfolio Manager of Franklin Advisers** 

Mr. Klein has been a portfolio manager of the fund since September 2024. He joined Franklin Templeton in 2005.

**Michael V. Salm Portfolio Manager of Franklin Advisers** 

Mr. Salm has been a portfolio manager of the fund since 2023. He joined Franklin Templeton in 2024. Prior to joining Franklin Templeton, Mr. Salm was a portfolio manager for Putnam Investment Management, LLC.

The fund's SAI provides additional information about portfolio manager compensation, other accounts that they manage and their ownership of fund shares.

### Shareholder information

#### Valuation of fund shares
The price of the fund's shares is based on its net asset value. The net asset value per share equals the total value of its assets, less its liabilities, divided by the number of its outstanding shares. Shares are only valued as of the scheduled close of regular trading on the NYSE each day the exchange is open.

The fund values its investments for which market quotations are readily available at market value. It values all other investments and assets at their fair value, which may differ from recent market prices. For example, the fund may value a stock traded on a U.S. exchange at its fair value when the exchange closes early or trading in the stock is suspended. It may also value a stock at fair value if recent transactions in the stock have been very limited or if, in the case of a security traded on a market that closes before the NYSE closes, material information about the issuer becomes available after the close of the

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relevant market. Market quotations are not considered to be readily available for many debt securities. These securities are generally valued at fair value on the basis of valuations provided by an independent pricing service approved by the fund's Trustees or dealers selected by the Investment Manager. Pricing services and dealers determine valuations for normal institutional-size trading units of such securities using information with respect to transactions in the bond being valued, market transactions for comparable securities and various relationships, generally recognized by institutional traders, between securities. To the extent a pricing service or dealer is unable to value a security or provides a valuation that the Investment Manager does not believe accurately reflects the security's fair value, the security will be valued at fair value by the Investment Manager.

The fund translates prices for its investments quoted in foreign currencies into U.S. dollars at current exchange rates, which are generally determined as of 4:00 p.m. Eastern Time each day the NYSE is open. As a result, changes in the value of those currencies in relation to the U.S. dollar may affect the fund's net asset value. Because foreign markets may be open at different times than the NYSE, the value of the fund's shares may change on days when shareholders are not able to buy or sell them. Many securities markets and exchanges outside the U.S. close before the close of the NYSE, and the closing prices for securities in those markets or exchanges may not reflect events that occur after the close but before the scheduled close of regular trading on the NYSE. As noted above, the value determined for an investment using the fund's fair value pricing procedures may differ from recent market prices for the investment.

The fund's most recent net asset value is available at www.franklintempleton.com or by calling 1-800-225-1581.

### Additional information about the fund
The fund is an actively managed ETF. Like other ETFs, shares of the fund are generally purchased and redeemed in creation unit aggregations through authorized participants, shares of the fund are listed and traded on a stock exchange, and individual investors can purchase or sell shares in less than creation unit sizes and for cash in the secondary market through a broker.

<u>Derivative actions</u> 

The fund is a series of Putnam ETF Trust (the "Trust"). The Trust's Amended and Restated Agreement and Declaration of Trust imposes certain conditions on derivative actions that are not otherwise required by law, including, in the case of any claim not arising under the federal securities laws, a requirement that the holders of 10% or more of the total outstanding shares of the applicable fund join the request to commence the action. Although these conditions are intended to permit legitimate inquiries and claims while avoiding the time, expense, distraction, and other harm that can be caused to a fund or its shareholders as a result of spurious shareholder demands and derivative

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actions, they may make it more difficult or costly for fund shareholders to bring derivative actions on behalf of the Trust.

<u>Information on the fund's website</u> 

The fund will disclose its top 10 holdings and related portfolio information monthly beginning on or after 5 business days after the end of each month at www.franklintempleton.com. The fund discloses its complete portfolio holdings, including the name, identifier, market value and weight of each security and instrument in the portfolio, at www.franklintempleton.com on each business day, before commencement of trading in shares on the listing exchange. The fund will also disclose its complete portfolio holdings as of the end of the prior month on a monthly basis beginning on or before the 15th calendar day after the end of each month. Recent information, including information regarding the fund's net asset value, market price, premiums and discounts, and bid/ask spread, is also available at www.franklintempleton.com.

#### Buying and selling shares in the secondary market
Shares of the fund are listed and traded on an exchange, and individual fund shares may only be bought and sold in the secondary market through a broker. The fund does not impose any minimum investment for shares of the fund purchased on an exchange. These transactions are made at market prices that may vary throughout the day and may be greater than the fund's net asset value (premium) or less than the fund's net asset value (discount). As a result, you may pay more than net asset value when you purchase shares, and receive less than net asset value when you sell shares, in the secondary market. If you buy or sell shares in the secondary market, you will generally incur customary brokerage commissions and charges and you may also incur the cost of the spread between the price at which a dealer will buy fund shares and the somewhat higher price at which a dealer will sell shares. Due to such commissions and charges and spread costs, frequent trading may detract significantly from investment returns.

The fund is designed to offer investors an investment that can be bought and sold frequently in the secondary market without impact on the fund, and such trading activity is designed to enable the market price of fund shares to remain at or close to net asset value. Accordingly, the Board of Trustees has not adopted policies and procedures designed to discourage excessive or short-term trading by these investors.

The fund accommodates frequent purchases and redemptions of creation units by authorized participants and does not place a limit on purchases or redemptions of creation units by these investors. The fund reserves the right, but does not have the obligation, to reject any purchase or redemption transaction (subject to legal and regulatory limits regarding redemption transactions) at any time. In addition, the fund reserves the right to impose restrictions on disruptive, excessive, or short-term trading.

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#### Precautionary notes
<u>Note to registered investment companies</u> 

Section 12(d)(1) of the Investment Company Act of 1940, as amended (the "1940 Act"), restricts investments by registered investment companies in the securities of other investment companies, including shares of the fund. Registered investment companies are permitted to invest in the fund beyond the limits set forth in Section 12(d)(1), subject to certain terms and conditions, including that such investment companies enter into an agreement with the fund.

<u>Note to authorized participants regarding continuous offering</u> 

Certain legal risks may exist that are unique to authorized participants purchasing creation units directly from the fund. Because new creation units may be issued on an ongoing basis, at any point a "distribution," as such term is used in the Securities Act of 1933 (the "Securities Act"), could be occurring. As a broker-dealer, certain activities that you perform may, depending on the circumstances, result in your being deemed a participant in a distribution, in a manner which could render you a statutory underwriter and subject you to the prospectus delivery and liability provisions of the Securities Act.

For example, you may be deemed a statutory underwriter if you purchase creation units from the fund, break them down into individual fund shares, and sell such shares directly to customers, or if you choose to couple the creation of a supply of new fund shares with an active selling effort involving solicitation of secondary market demand for fund shares. A determination of whether a person is an underwriter for purposes of the Securities Act depends upon all of the facts and circumstances pertaining to that person's activities, and the examples mentioned here should not be considered a complete description of all the activities that could lead to a categorization as an underwriter.

Dealers who are not "underwriters" but are participating in a distribution (as opposed to engaging in ordinary secondary market transactions), and thus dealing with shares as part of an "unsold allotment" within the meaning of Section 4(a)(3)(C) of the Securities Act, will be unable to take advantage of the prospectus delivery exemption provided by Section 4(a)(3) of the Securities Act. This is because the prospectus delivery exemption in Section 4(a)(3) of the Securities Act is not available in respect of such transactions as a result of Section 24(d) of the 1940 Act. As a result, you should note that dealers who are not underwriters but are participating in a distribution (as opposed to engaging in ordinary secondary market transactions) and thus dealing with the shares that are part of an overallotment within the meaning of Section 4(a)(3)(A) of the Securities Act would be unable to take advantage of the prospectus delivery exemption provided by Section 4(a)(3) of the Securities Act. Firms that incur a prospectus-delivery obligation with respect to shares of the fund are reminded that, under Rule 153 under the Securities Act, a prospectus delivery obligation under Section 5(b)(2) of the Securities Act owed to an exchange member in connection with a sale on an exchange is satisfied

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by the fact that the prospectus is available at the exchange upon request. The prospectus delivery mechanism provided in Rule 153 is only available with respect to transactions on an exchange.

Certain affiliates of the fund may purchase and resell fund shares pursuant to this prospectus.

<u>Note to secondary market investors</u> 

The Depository Trust Company ("DTC"), a limited trust company and securities depository that facilitates the clearance and settlement of trades for its participating banks and broker-dealers, has executed an agreement with the fund's distributor, Franklin Distributors, LLC (the "Distributor"). DTC, or its nominee, is the registered owner of all outstanding shares of the fund. The Investment Manager will not have any record of your ownership. Your ownership of shares will be shown on the records of DTC and the DTC participant broker through which you hold the shares. Your broker will provide you with account statements, confirmations of your purchases and sales, and tax information. Your broker will also be responsible for distributing income and capital gain distributions and for sending you shareholder reports and other information as may be required.

### Costs associated with creations and

### redemptions
The fund generally imposes a creation transaction fee and a redemption transaction fee to offset transfer and other transaction costs associated with the issuance and redemption of creation units of shares. Information about the procedures regarding creation and redemption of creation units and the applicable transaction fees is included in the SAI.

### Distribution plans and payments to

### intermediaries

#### Principal distributor
The Distributor distributes creation units for the fund on an agency basis, does not maintain a secondary market in shares of the fund, and has no role in determining the investment policies of the fund or the securities that are purchased or sold by the fund. The Distributor is an indirect, wholly-owned broker/dealer subsidiary of Resources.

The Distributor's address is One Franklin Parkway, San Mateo, CA 94403-1906.

Intermediaries may receive compensation from the Investment Manager, the Distributor, and/or their respective affiliates for providing recordkeeping and administrative services, as well as other retirement plan expenses, and

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compensation for services intended to result in the sale of fund shares. These payments are described in more detail in this section and in the SAI.

#### Distribution and service plan
The fund has adopted a distribution and service plan pursuant to Rule 12b-1 under the 1940 Act that authorizes the fund to pay distribution fees in connection with the sale and distribution of its shares and service fees in connection with the provision of ongoing shareholder support services. No Rule 12b-1 fees are currently paid by the fund, and there are no current plans to impose these fees. However, in the event Rule 12b-1 fees are charged in the future, because these fees are paid out of the fund's assets on an ongoing basis, these fees will increase the cost of your investment in the fund.

No dealer, sales representative, or any other person has been authorized to give any information or to make any representations, other than those contained in this prospectus and in the related SAI, in connection with the offer contained in this prospectus. If given or made, such other information or representations must not be relied upon as having been authorized by the fund or the Distributor. This prospectus and the related SAI do not constitute an offer by the fund or by the Distributor to sell shares of the fund to or to buy shares of the fund from any person to whom it is unlawful to make such offer.

#### Payments to intermediaries
Investors may purchase shares of the fund on an exchange through intermediaries (including any broker, intermediary, bank, bank trust department, registered investment advisor, financial planner, retirement plan administrator and any other institution that offers shares of the fund to its customers). In addition to distribution and service plans, the Investment Manager and its affiliates may make payments to intermediaries that do not increase your fund expenses, as described below.

The Investment Manager and its affiliates also pay additional compensation to selected intermediaries in recognition of their marketing support and/or program servicing (each of which is described in more detail below). These payments may create an incentive for an intermediary firm or its representatives to recommend or offer shares of the fund or other Putnam funds to its customers. These additional payments are made by the Investment Manager and its affiliates and do not increase the amount paid by you or the fund as shown under Fund summary — Fees and expenses. The additional payments to intermediaries by the Investment Manager and its affiliates are generally based on one or more of the following factors: average net assets of a fund attributable to that intermediary, sales or net sales of a fund attributable to that intermediary, or reimbursement of ticket charges (fees that an intermediary firm charges its representatives for effecting transactions in fund shares), or on the basis of a negotiated lump sum payment for services provided.

Marketing support payments are generally available to most intermediaries engaging in significant sales of Putnam fund shares. These payments are

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individually negotiated with each intermediary firm, taking into account the marketing support services provided by the intermediary, including business planning assistance, educating intermediary personnel about the Putnam funds and shareholder financial planning needs, placement on the intermediary's preferred or recommended fund company list, access to sales meetings, sales representatives and management representatives of the intermediary, market data, as well as the size of the intermediary's relationship with the Investment Manager.

Program servicing payments, are paid in some instances to intermediaries in connection with investments in the fund through intermediary platforms and other investment programs. These payments are made for program or platform services provided by the intermediary, including shareholder recordkeeping, reporting, or transaction processing, as well as services rendered in connection with intermediary platform development and maintenance, fund/investment selection and monitoring, or other similar services.

You can find a list of all intermediaries to which the Investment Manager and its affiliates made marketing support and/ or program servicing payments in the SAI, which is on file with the SEC and is also available at www.franklintempleton.com. You can also find other details in the SAI about the payments made by the Investment Manager and its affiliates and the services provided by your intermediary. Your intermediary may charge you fees or commissions in addition to those disclosed in this prospectus. You can also ask your intermediary about any payments it receives from the Investment Manager and its affiliates and any services your intermediary provides, as well as about fees and/or commissions it charges.

#### Other payments
The Investment Manager and its affiliates may make other payments (including payments in connection with educational seminars or conferences) or allow other promotional incentives to intermediaries to the extent permitted by SEC and NASD (as adopted by FINRA) rules and by other applicable laws and regulations.

### Fund distributions and taxes
The fund earns dividends, interest, and other income from its investments, and distributes this income (less expenses) to shareholders as dividends. The fund also realizes capital gains from its investments and distributes these gains (less any losses) as capital gain distributions. If you purchased your shares in the secondary market, your broker is responsible for distributing the income and capital gain distributions to you. The fund normally distributes any net investment income monthly and any net realized capital gains annually.

For U.S. federal income tax purposes, distributions of net investment income are generally taxable to you as ordinary income. Taxes on distributions of capital gains are determined by how long the fund owned (or is deemed to have owned) the investments that generated them, rather than by how long

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you have owned (or are deemed to have owned) your shares. Distributions that the fund properly reports to you as gains from investments that the fund owned for more than one year are generally taxable to you as long-term capital gains includible in net capital gain and taxed to individuals at reduced rates. Distributions of gains from investments that the fund owned for one year or less and gains on the sale of or prepayment on bonds characterized as market discount are generally taxable to you as ordinary income. Distributions that the fund properly reports to you as "qualified dividend income" are taxable at the reduced rates applicable to your net capital gain provided that both you and the fund meet certain holding period and other requirements. Distributions are taxable in the manner described in this paragraph whether you receive them in cash or reinvest them in additional shares of the fund.

Distributions by the fund to retirement plans that qualify for tax-advantaged treatment under U.S. federal income tax laws will not be taxable. Special tax rules apply to investments through such plans. You should consult your tax advisor to determine the suitability of the fund as an investment through such a plan and the tax treatment of distributions (including distributions of amounts attributable to an investment in the fund) from such a plan. Distributions are taxable to you even if they are paid from income or gains earned by the fund before your investment (and thus were included in the price you paid). Contact your financial representative to find out the distribution schedule for your fund.

Investments in lower-rated securities may present special tax issues for the fund to the extent actual or anticipated defaults may be more likely with respect to those kinds of securities. Tax rules are not entirely clear about issues such as when an investor in such securities may cease to accrue interest, original issue discount, or market discount; when and to what extent deductions may be taken for bad debts or worthless securities; how payments received on obligations in default should be allocated between principal and income; and whether exchanges of debt obligations in a workout context are taxable.

The fund's investments in certain debt obligations may cause the fund to recognize taxable income in excess of the cash generated by such obligations. Thus, the fund could be required at times to liquidate other investments, including when it is not advantageous to do so, in order to satisfy its distribution requirements.

The fund's investments in foreign securities may be subject to foreign withholding or other taxes. In that case, the fund's return on those investments would be decreased. If the fund meets certain requirements relating to its asset holdings, and the fund elects to pass through to its shareholders foreign tax credits or deductions, taxable shareholders generally will be entitled to claim a credit or deduction with respect to these foreign taxes. Even if the fund elects to pass through to its shareholders foreign tax credits or deductions, tax-exempt shareholders and those who invest in the fund through tax-advantaged accounts such as IRAs will not benefit from any such tax credit or deduction. In addition, the fund's investments in foreign securities or foreign currencies may increase or accelerate the fund's recognition of ordinary income and may affect the timing or amount of the fund's distributions.

Prospectus 35

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The fund's use of derivatives, if any, may affect the amount, timing and character of distributions to shareholders and, therefore, may increase the amount of taxes payable by shareholders.

Any gain resulting from the sale of your shares generally also will be subject to tax. Any such gain or loss will be long term or short term depending on how long you have held your shares.

The above is a general summary of the tax implications of investing in the fund. Please refer to the SAI for further details. You should consult your tax advisor for more information on your own tax situation, including possible foreign, state and local taxes.

#### Other tax considerations
Unlike other ETFs, the securities exchanged for a creation unit will not correspond pro rata to the positions in the fund's portfolio, and the fund will effect its creations and redemptions partially or wholly for cash rather than on an in-kind basis. Because of this, the fund may be unable to realize certain tax benefits associated with in-kind transfers of portfolio securities that may be realized by other ETFs. Shareholders may be subject to tax on gains they would not otherwise have been subject to and/or at an earlier date than if the fund had effected redemptions wholly on an in-kind basis.

Authorized participants should consult their tax advisors about the U.S. federal, state, local and non-U.S. tax consequences of purchasing and redeeming creation units in the fund.

#### Information about the Summary Prospectus, Prospectus, and SAI
The summary prospectus, prospectus, and SAI for a fund provide information concerning the fund. The summary prospectus, prospectus, and SAI are updated at least annually and any information provided in a summary prospectus, prospectus, or SAI can be changed without a shareholder vote unless specifically stated otherwise. The summary prospectus, prospectus, and the SAI are not contracts between the fund and its shareholders and do not give rise to any contractual rights or obligations or any shareholder rights other than any rights conferred explicitly by federal or state securities laws that may not be waived.

36 Prospectus

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### Financial highlights
The financial highlights table is intended to help you understand the performance of the fund for the past five years, unless otherwise noted. Certain information reflects financial results for a single fund share. Total return represents the rate that an investor would have earned (or lost) on an investment in the fund, assuming reinvestment of all dividends and other distributions. Unless otherwise noted, this information has been audited by the fund's independent registered public accounting firm, PricewaterhouseCoopers, LLP, whose report, along with the fund's financial statements, are available on the fund's website and are included in the fund's Form N-CSR filed with the SEC, which is available upon request.

Prospectus 37

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**Financial highlights**

(For a common share outstanding throughout the period)

---

| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp; **PER-SHARE OPERATING**<br> **PERFORMANCE** |  |  |  |
|  | **Year ended** | **Year ended** | |
|  | **4/30/25** | **4/30/24** | **For the**<br> **period**<br> **1/19/23<br>(commencement<br>of**<br> **operations)<br>to 4/30/23** |
| &nbsp;&nbsp;&nbsp; **Net asset value, beginning of period** | **$47.02** | **$49.72** | **$50.00** |
| &nbsp;&nbsp;&nbsp; **Investment operations:** |  |  |  |
| &nbsp;&nbsp;&nbsp; Net investment income (loss)<sup>a</sup> | 2.13 | 2.08 | .55 |
| &nbsp;&nbsp;&nbsp; Net realized and unrealized gain (loss) on investments | 1.63 | (2.63) | (.59) |
| &nbsp;&nbsp;&nbsp; **Total from investment operations** | **3.76** | **(.55)** | **(.04)** |
| &nbsp;&nbsp;&nbsp; **Less distributions:** |  |  |  |
| &nbsp;&nbsp;&nbsp; From net investment income | (2.10) | (2.17) | (.30) |
| &nbsp;&nbsp;&nbsp; From net realized gain on investments | -- | (.02) | -- |
| &nbsp;&nbsp;&nbsp; **Total distributions** | **(2.10)** | **(2.19)** | **(.30)** |
| &nbsp;&nbsp;&nbsp; **Other capital** | .03 | .04 | .06 |
| &nbsp;&nbsp;&nbsp; **Net asset value, end of period** | **$48.71** | **$47.02** | **$49.72** |
| &nbsp;&nbsp;&nbsp; **Total return at net asset value** (%)<sup>b</sup> | **8.19** | **(1.02)** | **0.04\*** |
| &nbsp;&nbsp;&nbsp; **RATIOS AND SUPPLEMENTAL DATA** |  |  |  |
| &nbsp;&nbsp;&nbsp; **Net assets, end of period** |  |  |  |
| &nbsp;&nbsp;&nbsp; **(in thousands)** | **$725838** | **$548926** | **$466145** |
| &nbsp;&nbsp;&nbsp; Ratio of expenses to average net assets (%)<sup>c,d</sup> | .34<sup>e</sup> | .34 | .10\* |
| &nbsp;&nbsp;&nbsp; Ratio of net investment income (loss) to average net assets (%)<sup>d</sup> | 4.39 <sup>e</sup> | 4.34 | 1.12\* |
| &nbsp;&nbsp;&nbsp; Portfolio turnover (%)<sup>g</sup> | 237 | 166 | 37\*<sup>,f</sup> |

---

\* Not annualized.

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

(b) Total return assumes dividend reinvestment.

(c) Excludes acquired fund fees and expenses, if any.

(d) Reflects waivers of certain fund expenses in connection with investments in Putnam Government Money Market Fund during the period. As a result of such waivers, the expenses of the fund reflect a reduction of the following amounts:

38 Prospectus

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---

| | |
|:---|:---|
|  | **Percentage of average<br>net assets** |
| April 30, 2025 | 0.01% |
| April 30, 2024 | 0.01 |
| April 30, 2023<br>| <0.01 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(e) Reflects a waiver of certain fund expenses in connection with investments in Franklin Ultra Short Bond ETF during the period. As a result of such waiver, the expenses of the fund reflect a reduction of less than 0.01% as a percentage of average net assets.<br>&nbsp;&nbsp;&nbsp;&nbsp;(f) Portfolio turnover excludes securities received or delivered in-kind, if any.<br>&nbsp;&nbsp;&nbsp;&nbsp;(g) Portfolio turnover includes TBA purchase and sale commitments.<br>

Prospectus 39

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#### For more information about Putnam ESG Core Bond ETF
You can learn more about the fund in the following documents:

#### Annual/Semiannual Report to Shareholders and Form N-CSR Filed with the SEC
Contain additional information about the fund's investments. The fund's annual report also discusses the market conditions and investment strategies that significantly affected the fund's performance during its last fiscal year. In Form N-CSR, you will find the fund's annual and semi-annual financial statements.

#### Statement of Additional Information ("SAI")
Contains more information about the fund, its investments and policies. It is incorporated by reference (is legally a part of this prospectus).

For a free copy of the current annual/semiannual report, financial statements or the SAI, please contact your investment representative or call us at the number below. You also can view the current annual/semiannual report, financial statements and the SAI online through www.franklintempleton.com.

Reports and other information about the fund are available on the EDGAR Database on the SEC's Website at http://www.sec.gov, and copies of this information may be obtained, after paying a duplicating fee, by electronic request at the following email address: publicinfo@sec.gov.

Putnam Investments

100 Federal Street

Boston, MA 02110

1-800-225-1581

811-23643 39496-P 09/25

------

![LOGO](g842776g4g41s75.jpg)

## Putnam

## ESG High Yield ETF

---

| | | |
|:---|:---|:---|
| Prospectus | September 1, 2025 | September 1, 2025 |
| **Fund Symbol:** PHYD | **Fund Symbol:** PHYD | **Principal U.S. Listing Exchange:** NYSE Arca, Inc. |

---

#### Investment Category: Taxable Income

#### This prospectus explains what you should know about this fund before you invest. Please read it carefully.
These securities have not been approved or disapproved by the Securities and Exchange Commission ("SEC") nor has the SEC passed upon the accuracy or adequacy of this prospectus. Any statement to the contrary is a crime.

------

Table of contents

---

| | |
|:---|:---|
|  [Fund summary](#pro870094_1) | 2 |
|  [Fund details](#pro870094_2) | 11 |
|  [Fund management](#pro870094_3) | 25 |
|  [Shareholder information](#pro870094_4) | 27 |
|  [Distribution plans and payments to intermediaries](#pro870094_5) | 31 |
|  [Fund distributions and taxes](#pro870094_6) | 33 |
|  [Financial highlights](#pro870094_7) | 36 |

---

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### Fund summary

#### Goal
The fund seeks high current income. Capital growth is a secondary goal when consistent with achieving high current income.

#### Fees and expenses
The following tables describe the fees and expenses you may pay if you buy, hold and sell shares of the fund. **You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.** 

#### Annual Fund Operating Expenses

#### (expenses you pay each year as a percentage of the value of your investment)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Management <br> fees** | **Distribution**<br> **and service**<br> **(12b-1) fees** | **Other <br> expenses** | **Acquired**<br> **fund fees**<br> **and**<br> **expenses** | **Total annual**<br> **fund <br> operating<br> expenses<sup>1</sup>** | **Expense <br> reimburse-**<br> **ment<sup>2</sup>** | **Total annual <br> fund operating <br> expenses after <br> expense reim-**<br> **bursement** |
| 0.55% |  | 0.00% | 0.02% | 0.57% | (0.02)% | 0.55% |

---

<sup>1</sup> Total annual fund operating expenses do not correlate with the ratios of expenses to average net assets reported in the fund's financial highlights tables, which reflect the fund's operating expenses and do not include acquired fund fees and expenses.

<sup>2</sup> The Investment Manager has agreed to reduce its fees by an amount equal to the management fees paid by Franklin Templeton affiliated funds with respect to assets the fund invests in such affiliated funds. This arrangement cannot be terminated prior to August 31, 2026 without approval of the Board of Trustees.

#### Example
The following hypothetical example is intended to help you compare the cost of investing in the fund with the cost of investing in other funds. It assumes that you invest $10,000 in the fund for the time periods indicated and then redeem all your shares at the end of those periods. It assumes a 5% return on your investment each year and that the fund's operating expenses remain the same. Only the first year of each period in the example takes into account the expense reimbursement described above. Your actual costs may be higher or lower.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
|  ESG High Yield ETF | $56 | $181 | $316 | $711 |

---

#### Portfolio turnover
The fund pays transaction-related costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher turnover rate may indicate higher transaction costs and may result in higher taxes when the fund's shares are held in a taxable account. These costs, which are not

2 Prospectus

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reflected in annual fund operating expenses or the above example, affect fund performance. The fund's turnover rate in the most recent fiscal year was 36%.

### Investments, risks, and performance

#### Principal investment strategies
The fund invests mainly in bonds that are below investment grade in quality (sometimes referred to as "junk bonds") with a focus on companies or issuers that the fund's Investment Manager, as defined below, believes meet relevant environmental, social or governance ("ESG") criteria on a sector-specific basis ("ESG criteria"). The fund invests mainly in bonds that also have one or more of the following characteristics: (1) are obligations of U.S. companies or issuers and (2) have intermediate- to long-term maturities (three years or longer). The fund may consider, among other factors, a company's or issuer's ESG criteria (as described below), credit, interest rate, liquidity and prepayment risks, as well as general market conditions, when deciding whether to buy or sell investments.

Under normal circumstances, the fund invests at least 80% of the value of its net assets in fixed-income securities rated below investment grade that meet the Investment Manager's ESG criteria. This policy is non-fundamental and may be changed only after 60 days' notice to shareholders. The Investment Manager may not apply ESG criteria to investments that are not subject to the fund's 80% policy and such investments may not meet the Investment Manager's ESG criteria. The fund will not necessarily sell an investment if it no longer meets the Investment Manager's ESG criteria after purchase, subject to compliance with the 80% policy.

In evaluating investments for the fund, the Investment Manager identifies relevant ESG criteria for specific sectors, subsectors or countries using an internally developed framework, which may take into account independent third party ESG data. The Investment Manager identifies specific ESG criteria (i.e., quality of board, quality of management, product safety and quality, workforce relations, emissions and waste management, or energy management, among others) and assigns a percentage weighting to those criteria based on the Investment Manager's assessment of which ESG criteria are more or less important. As part of this analysis, the Investment Manager may utilize metrics and information such as emissions data, carbon intensity, sources of energy used for operations, water use and re-use, water generation, waste diversion from landfill, employee safety and diversity data, supplier audits, product safety, board composition, and incentive compensation structures. After evaluating these criteria and applying the established weightings, the Investment Manager will assign each company, issuer or country, as applicable, a proprietary ESG rating ranging from a 5.0 to a 1.0 with 5.0 indicating the highest (best) ESG rating and 1.0 indicating the lowest (worst) ESG rating. In order to meet the Investment Manager's ESG criteria for purposes of the above-referenced non-fundamental investment policy, a company or issuer must generally be rated 2.5 or above by the Investment

Prospectus 3

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Manager. While the Investment Manager may consider independent third-party data as a part of its analytical process, the portfolio management team performs its own independent analysis of issuers and does not rely solely on third-party screens.

For corporate credit (i.e., investment grade-rated and below investment grade-rated securities), the Investment Manager also applies a momentum factor in determining the ESG rating of a company or issuer based on the Investment Manager's view of whether the performance of the company or issuer under the relevant ESG criteria is expected to improve or decline. If an issuer is rated 2.0 or above and has a positive momentum factor, a company or issuer will be viewed as meeting the Investment Manager's criteria for purposes of the above-referenced non-fundamental policy. Conversely, if an issuer has a negative momentum factor, it will be viewed as meeting the Investment Manager's criteria for purposes of the above-referenced non-fundamental policy only if it's rated a 3.0 or above.

While the Investment Manager may consider independent third-party data as a part of its analytical process, the portfolio management team performs its own independent analysis of issuers and does not rely solely on third-party screens.

The fund's approach to ESG investing incorporates fundamental research together with consideration of ESG criteria which may include, but are not limited to, those included in the following descriptions. Environmental criteria include, for example, a company's or issuer's carbon intensity and use of resources like water or minerals. ESG measures in this area might include plans to reduce waste, increase recycling, raise the proportion of energy supplied from renewable sources, or improve product design to be less resource intensive. Social criteria include, for example, labor practices and supply chain management. ESG measures in this area might include programs to improve employee well-being, commitment to workplace equality and diversity, or improved stewardship of supplier relationships and working conditions. Corporate governance criteria include, for example, board composition and executive compensation, as well as bondholders' rights. ESG measures in this area might include improvements in board independence or diversity, or alignment of management incentives with the company's or issuer's strategic ESG objectives.

In the corporate credit sector, the Investment Manager combines fundamental analysis with relevant ESG insights with a forward-looking perspective. The Investment Manager believes that this approach contributes to a more nuanced assessment of an issuer's credit profile.

The Investment Manager evaluates ESG considerations using independent third-party data (where available), and uses company or issuer disclosures and public data sources. The Investment Manager believes that ESG considerations are best analyzed in combination with a company's or issuer's fundamentals, including a company's or issuer's industry, location, strategic position, and key relationships. In addition to bonds, the fund may also invest in other fixed-income instruments, including bank loans. In addition to the main

4 Prospectus

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investment strategies described above, the fund may make other types of investments, such as investments in equity securities, asset-backed, hybrid and structured bonds and notes, preferred securities that would be characterized as debt securities under applicable accounting standards and tax laws, and assignments of and participations in fixed and floating rate bank loans. The fund may also use derivatives, such as futures, options, certain foreign currency transactions and swap contracts, for both hedging and non-hedging purposes.

#### Risks
It is important to understand that you can lose money by investing in the fund.

**ESG investing risk:** Investing with a focus on companies or issuers that meet the Investment Manager's ESG criteria may result in the fund investing in certain types of companies, issuers, industries or sectors that the market may not favor. Conversely, investing in such companies or issuers may result in the fund foregoing investment in securities that outperform the fund's investments in certain environments. In evaluating an investment opportunity, the Investment Manager may make investment decisions without the availability of optimal ESG-related data (which may be even less available with securitized debt instruments) or based on information and data that is incomplete or inaccurate. ESG metrics are not uniformly defined and applying such metrics involves subjective assessments. ESG scorings and assessments of issuers can vary across third-party data providers and may change over time. The Investment Manager does not rely exclusively on third-party data providers in evaluating ESG criteria. ESG information from third-party data providers may be incomplete, inaccurate or unavailable, particularly with respect to companies in emerging market countries, which may adversely impact the investment process. The fund does not restrict its investments to "green bonds" (*i.e.,* U.S. dollar-denominated bonds designated as "green" by the Climate Bonds Initiative) and does not restrict investments based solely on "negative screens". In addition, a company's or issuer's business practices, products or services may change over time. As a result of these possibilities, among others, the fund may temporarily hold securities that are inconsistent with the fund's ESG investment criteria. Regulatory changes or interpretations regarding the definitions and/or use of ESG criteria could have a material adverse effect on the fund's ability to invest in accordance with its investment policies and/or achieve its investment objective, as well as the ability of certain classes of investors to invest in funds, such as the fund, whose strategies include ESG criteria. Because fixed-income investments generally represent a promise to pay principal and interest by an issuer, and not an ownership interest, and may involve complex structures, ESG-related investment considerations may have a more limited impact on risk and return (or may have an impact over a different investment time horizon) relative to other asset classes, and this may be particularly true for shorter-term investments. In addition, holders of fixed-income investments do not typically have voting rights, unlike holders of equity investments who have the right to vote on issuer proposals, including ESG-related proposals.

Prospectus 5

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**Model risk:** If the quantitative models or data that are used in managing the fund prove to be incorrect or incomplete, investment decisions made in reliance on the models or data may not produce the desired results and the fund may realize losses. Additionally, market movements are likely to change the risk levels and risk allocations of the fund. Investments made based on quantitative models may perform differently from the market as a whole.

**Fluctuation of** **net asset value and share price risk** **:** Shares may trade at a larger premium or discount to the fund's net asset value than shares of other ETFs. The net asset value of the fund will generally fluctuate with changes in the market value of the fund's holdings. The fund's shares can be bought and sold in the secondary market at market prices. Disruptions to creations and redemptions, the existence of extreme market volatility or potential lack of an active trading market for the fund's shares may result in the fund's shares trading significantly above (at a premium) or below (at a discount) net asset value or the intraday value of the fund's holdings. In addition, in stressed market conditions or periods of market disruption or volatility, the market for fund shares may become less liquid in response to deteriorating liquidity in the markets for the fund's underlying portfolio holdings.

**Trading issues risk** **:** The fund has a limited public trading history. There can be no assurance that an active trading market will develop or be maintained or that the market for fund shares will operate as intended, which could lead to the fund's shares trading at wider spreads and larger premiums and discounts to net asset value than other actively managed ETFs. As a result, it may cost investors more to trade fund shares than shares of other ETFs. There is no guarantee that the fund will be able to attract market makers and authorized participants. Market makers and authorized participants are not obligated to make a market in the fund's shares or to submit purchase and redemption orders for creation units. The market prices of the fund's shares are expected to fluctuate, in some cases materially, in response to changes in the fund's net asset value, the intraday value of the fund's holdings and supply and demand for the fund's shares. The Investment Manager cannot predict whether the fund's shares will trade above, below or at their net asset value or the intraday value of the fund's holdings. During such periods, investors may incur significant losses if they sell shares.

The securities held by the fund may be traded in markets that close at a different time than the exchange on which the fund's shares are listed. Liquidity in those securities may be reduced after the applicable closing times. Accordingly, during the time when the exchange is open but after the applicable market closing, fixing or settlement times, bid-ask spreads on the exchange and the corresponding premium or discount to the shares' net asset value may widen.

**Large shareholder transaction risk:** The fund is subject to the risk that shareholders will purchase or redeem large quantities of shares of the fund. The fund may be an investment option for mutual funds that are managed by the Investment Manager and its affiliates as "funds of funds." Additionally, other investors from time to time may make substantial investments in the fund.

6 Prospectus

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Such shareholders may at times be considered to control the fund. In addition, a large number of shareholders may collectively purchase or redeem fund shares in large amounts rapidly or unexpectedly. Large shareholder transactions may adversely affect the fund's liquidity and net assets. These redemptions may also adversely affect the fund's performance if the fund is forced to sell securities, which may also increase the fund's brokerage costs.

**Authorized participant concentration risk** **:** Only an authorized participant may engage in creation and redemption transactions directly with the fund. The fund may have a limited number of financial institutions that act as authorized participants, none of which are obligated to engage in creation and/or redemption transactions. To the extent that those authorized participants do not engage in creation and redemption orders, there may be a significantly diminished trading market for fund shares or fund shares may trade at a discount (or premium) to net asset value and possibly face trading halts and/or de-listing.

**Cash transactions risk** **:** Unlike certain ETFs, the fund may effect creations and redemptions in cash or partially in cash. Therefore, it may be required to sell portfolio securities and subsequently recognize gains on such sales that the fund might not have recognized if it were to distribute portfolio securities in-kind. As such, investments in the fund's shares may be less tax-efficient than an investment in an ETF that distributes portfolio securities entirely in-kind.

**Market risk** **:** 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, outbreaks of infectious illnesses or other widespread public health issues, and factors related to a specific issuer, asset class, geography, industry or sector. These and other factors may lead to increased volatility and reduced liquidity in the fund's portfolio holdings, may negatively impact the fund's performance, and may exacerbate other risks to which the fund is subject.

**Fixed** **income investments risk** **:** The risks associated with fixed income investments include interest rate risk, which is the risk that the value of the fund's investments is likely to fall if interest rates rise. Fixed income investments are also subject to credit risk, which is the risk that issuers of the fund's investments may default on payment of interest or principal. Fixed income investments may be more susceptible to downgrades or defaults during economic downturns or other periods of economic stress. Interest rate risk is generally greater for longer-term fixed income securities, and credit risk is generally greater for below-investment-grade fixed income securities (a significant part of the fund's investments), which can be more sensitive to changes in markets, credit conditions, and interest rates, and may be considered speculative.

The fund invests mostly in higher-yield, higher-risk debt investments that are rated below BBB or its equivalent at the time of purchase by any nationally recognized securities rating organization rating such investments, or in unrated

Prospectus 7

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investments that the Investment Manager believes are of comparable quality. The fund may invest up to 15% of the fund's total assets in debt investments rated below CCC or its equivalent, at the time of purchase, by each rating organization rating such investments, or in unrated investments that the Investment Manager believes are of comparable quality. This includes investments in the lowest rating category of the rating organization. The fund will not necessarily sell an investment if its rating is reduced after the fund buys it. Investments rated below BBB or its equivalent are below-investment-grade in quality. This rating reflects a greater possibility that the issuers may be unable to make timely payments of interest and principal and thus default. If a default occurs, or is perceived as likely to occur, the value of the investment will usually be more volatile and could decrease. The value of a debt instrument may also be affected by changes in, or perceptions of, the financial condition of the issuer, borrower, counterparty, or other entity, or underlying collateral or assets, or changes in, or perceptions of, specific or general market, economic, industry, political, regulatory, geopolitical, environmental, public health, and other conditions. A default or expected default could also make it difficult for the fund to sell the investment at a price approximating the value the Investment Manager had previously placed on it. Lower-rated debt usually has a more limited market than higher-rated debt, which may at times make it difficult for the fund to buy or sell certain debt instruments or to establish their fair values.

**Derivatives risk** **:** The fund's use of derivatives may increase the risks of investing in the fund by increasing investment exposure (which may be considered leverage) or, in the case of many over-the-counter instruments, because of the potential inability to terminate or sell derivative positions and the potential failure of the other party to the instrument to meet its obligations. The risk of a party failing to meet its obligations may increase if the fund has significant exposure to that counterparty. The value of derivatives may move in unexpected ways due to unanticipated market movements, the use of leverage, imperfect correlation between the derivative instrument and the reference asset, or other factors, especially in unusual market conditions, and volatility in the value of derivatives could adversely impact the fund's returns, obligations and exposures. Derivatives are also subject to other risks, including liquidity risk (e.g., liquidity demands arising from the requirement to make payments to a derivative counterparty), operational risk (e.g., settlement issues or system failures) and legal risk (e.g., insufficient legal documentation or contract enforceability issues).

**Model risk:** If the quantitative models or data that are used in managing the fund prove to be incorrect or incomplete, investment decisions made in reliance on the models or data may not produce the desired results and the fund may realize losses. Additionally, market movements are likely to change the risk levels and risk allocations of the fund. Investments made based on quantitative models may perform differently from the market as a whole.

**Floating rate loan risk** **:** To the extent the fund holds floating rate loans, interest rate risk may be reduced but will not be eliminated. While floating rate

8 Prospectus

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loans are normally secured by specific collateral or assets of the issuer (so that holders of the loans, such as the fund, will have a priority claim on those assets in the event of default or bankruptcy of the issuer), the value of collateral may be insufficient to meet the issuer's obligations, and the fund's access to collateral may be limited by bankruptcy or other insolvency laws. The settlement period (the period between the execution of the trade and the delivery of cash to the purchaser) for floating rate loan transactions is typically longer than seven days, and it is possible that sale proceeds from floating rate loan transactions will not be available to meet redemption obligations.

**Portfolio turnover rate** **:** The fund's portfolio turnover rate measures how frequently the fund buys and sells investments. A portfolio turnover rate of 100%, for example, would mean that the fund sold and replaced securities valued at 100% of the fund's assets within a one-year period.

From time to time the fund may engage in frequent trading. Funds with high turnover may be more likely to realize capital gains that must be distributed to shareholders as taxable income. High turnover may also cause a fund to pay more brokerage commissions and other transaction costs (including imputed transaction costs), which may detract from performance. The fund's portfolio turnover rate and the amount of brokerage commissions it pays and transaction costs it incurs will vary over time based on market conditions.

**Management and operational risk** **:** There is no guarantee that the investment techniques, analyses, or judgments that the Investment Manager applies in making investment decisions for the fund will produce the intended outcome or that the investments selected for the fund will perform as well as other securities that were not selected for the fund. The Investment Manager, or the fund's other service providers, may experience disruptions or operating errors that could negatively impact the fund.

The fund may not achieve its goal, and it is not intended to be a complete investment program. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

### Performance
The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund's performance from year to year. The table shows the average annual total returns of the fund and also compares the fund's performance with the average annual total returns of a broad measure of market performance and an additional index with characteristics relevant to the fund. The fund makes updated performance information, including its current net asset value per share, available at www.franklintempleton.com.

*The fund's past performance (before and after taxes) is not necessarily an indication of how the fund will perform in the future.* 

Annual total returns

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![LOGO](g842776g4g54t06.jpg)

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| | | |
|:---|:---|:---|
|  Best Quarter: | Q3 2024 | 4.30% |
|  Worst Quarter: | Q4 2024 | 0.12% |
|  As of June 30, 2025, the fund's year-to-date return was 4.76%. |  |  |

---

#### Average annual total returns
(for periods ended 12/31/24)

---

| | | |
|:---|:---|:---|
| **ESG High Yield ETF** | **1 year** | **Since <br> Inception<sup>1</sup>** |
|  Return before taxes | 7.19% | 8.01% |
|  Return after taxes on distributions | 4.26% | 5.09% |
|  Return after taxes on distributions and sales of fund shares | 4.20% | 4.85% |
|  Bloomberg U.S. Aggregate Index (no deduction for fees, expenses or taxes) | 1.25% | 1.71% |
|  JPMorgan Developed High Yield Index (no deduction for fees, expenses or taxes) | 8.68% | 9.48% |

---

<sup>1.</sup> Since inception January 19, 2023.

After-tax returns reflect the historical highest individual federal marginal income tax rates and do not reflect state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. These after-tax returns do not apply if you hold your fund shares through a 401(k) plan, an IRA, or another tax-advantaged arrangement.

Important data provider notices and terms are available at www.franklintempletondatasources.com. All data is subject to change.

### Your fund's management

#### Investment Manager
Franklin Advisers, Inc. ("Franklin Advisers" or the "Investment Manager")

#### Sub-advisors
Putnam Investment Management, LLC ("Putnam Management")

Franklin Templeton Investment Management Limited ("FTIML")

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#### Portfolio managers
**Norman P. Boucher** 

Portfolio Manager of Franklin Advisers and portfolio manager of the fund since 2023.

**Robert L. Salvin** 

Portfolio Manager of Franklin Advisers and portfolio manager of the fund since 2023.

#### Purchase and sale of fund shares
Shares of the fund are listed and traded on an exchange, and individual fund shares may only be bought and sold in the secondary market through a broker or dealer at market price. These transactions, which do not involve the fund, are made at market prices that may vary throughout the day, rather than at net asset value. Shares of the fund may trade at a price greater than the fund's net asset value (premium) or less than the fund's net asset value (discount). An investor may incur costs attributable to the difference between the highest price a buyer is willing to pay to purchase shares (bid) and the lowest price a seller is willing to accept for shares (ask) when buying or selling fund shares in the secondary market (the "bid-ask spread"). Recent information, including information regarding the fund's net asset value, market price, premiums and discounts, and bid-ask spread, is available at www.franklintempleton.com.

#### Tax information
The fund's distributions will be taxed as ordinary income or capital gains unless you hold the shares through a tax-advantaged arrangement, in which case you will generally be taxed only upon withdrawal of monies from the arrangement.

#### Financial intermediary compensation
If you purchase the fund through a broker/dealer or other financial intermediary (such as a bank or financial professional), the fund and its related companies may pay that intermediary for the sale of fund shares and related services. Please bear in mind that these payments may create a conflict of interest by influencing the broker/dealer or other intermediary to recommend the fund over another investment. Ask your advisor or visit your advisor's website for more information.

### Fund details

#### Principal investment strategies
The fund invests mainly in bonds that are below investment grade in quality (sometimes referred to as "junk bonds") with a focus on companies or issuers that the fund's Investment Manager believes meet the relevant ESG criteria. The fund invests mainly in bonds that also have one or more of the following characteristics: (1) are obligations of U.S. companies or issuers and (2) have intermediate- to long-term maturities (three years or longer). The fund may

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consider, among other factors, a company's or issuer's ESG criteria (as described below), credit, interest rate, liquidity and prepayment risks, as well as general market conditions, when deciding whether to buy or sell investments.

Under normal circumstances, the fund invests at least 80% of the value of its net assets in fixed-income securities rated below investment grade that meet the Investment Manager's ESG criteria. This policy is non-fundamental and may be changed only after 60 days' notice to shareholders. The Investment Manager may not apply ESG criteria to investments that are not subject to the fund's 80% policy and such investments may not meet the Investment Manager's ESG criteria. The fund will not necessarily sell an investment if it no longer meets the Investment Manager's ESG criteria after purchase, subject to compliance with the 80% policy.

In evaluating investments for the fund, the Investment Manager identifies relevant ESG criteria for specific sectors, subsectors or countries using an internally developed framework, which may take into account independent third party ESG data. The Investment Manager identifies specific ESG criteria (i.e., quality of board, quality of management, product safety and quality, workforce relations, emissions and waste management, or energy management, among others) and assigns a percentage weighting to those criteria based on the Investment Manager's assessment of which ESG criteria are more or less important. As part of this analysis, the Investment Manager may utilize metrics and information such as emissions data, carbon intensity, sources of energy used for operations, water use and re-use, water generation, waste diversion from landfill, employee safety and diversity data, supplier audits, product safety, board composition, and incentive compensation structures. After evaluating these criteria and applying the established weightings, the Investment Manager will assign each company, issuer or country, as applicable, a proprietary ESG rating ranging from a 5.0 to a 1.0 with 5.0 indicating the highest (best) ESG rating and 1.0 indicating the lowest (worst) ESG rating. In order to meet the Investment Manager's ESG criteria for purposes of the above-referenced non-fundamental investment policy, a company or issuer must generally be rated 2.5 or above by the Investment Manager. While The Investment Manager may consider independent third-party data as a part of its analytical process, the portfolio management team performs its own independent analysis of issuers and does not rely solely on third-party screens.

For corporate credit (i.e., investment grade-rated and below investment grade-rated securities), the Investment Manager also applies a momentum factor in determining the ESG rating of a company or issuer based on the Investment Manager's view of whether the performance of the company or issuer under the relevant ESG criteria is expected to improve or decline. If an issuer is rated 2.0 or above and has a positive momentum factor, a company or issuer will be viewed as meeting the Investment Manager's criteria for purposes of the above-referenced non-fundamental policy. Conversely, if an issuer has a negative momentum factor, it will be viewed as meeting the Investment

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Manager's criteria for purposes of the above-referenced non-fundamental policy only if it's rated a 3.0 or above.

While the Investment Manager may consider independent third-party data as a part of its analytical process, the portfolio management team performs its own independent analysis of issuers and does not rely solely on third-party screens.

The fund's approach to ESG investing incorporates fundamental research together with consideration of ESG criteria which may include, but are not limited to, those included in the following descriptions. Environmental criteria include, for example, a company's or issuer's carbon intensity and use of resources like water or minerals. ESG measures in this area might include plans to reduce waste, increase recycling, raise the proportion of energy supplied from renewable sources, or improve product design to be less resource intensive. Social criteria include, for example, labor practices and supply chain management. ESG measures in this area might include programs to improve employee well-being, commitment to workplace equality and diversity, or improved stewardship of supplier relationships and working conditions. Corporate governance criteria include, for example, board composition and executive compensation, as well as bondholders' rights. ESG measures in this area might include improvements in board independence or diversity, or alignment of management incentives with the company's or issuer's strategic ESG objectives.

In the corporate credit sector, the Investment Manager combines fundamental analysis with relevant ESG insights with a forward-looking perspective. The Investment Manager believes that this approach contributes to a more nuanced assessment of an issuer's credit profile.

The Investment Manager evaluates ESG considerations using independent third-party data (where available), and uses company or issuer disclosures and public data sources. The Investment Manager believes that ESG considerations are best analyzed in combination with a company's or issuer's fundamentals, including a company's or issuer's industry, location, strategic position, and key relationships.

In addition to bonds, the fund may also invest in other fixed-income instruments, including bank loans. In addition to the main investment strategies described above, the fund may make other types of investments, such as investments in equity securities, asset-backed, hybrid and structured bonds and notes, preferred securities that would be characterized as debt securities under applicable accounting standards and tax laws, and assignments of and participations in fixed and floating rate bank loans. The fund may also use derivatives, such as futures, options, certain foreign currency transactions, and credit default total return and interest rate swap contracts, for both hedging and non-hedging purposes.

Shareholders should be aware that investments made by the fund and results achieved by the fund at any given time are not expected to be the same as those made by other funds for which the Investment Manager acts as Investment Manager, including funds with names, investment objectives, and

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policies that are similar to the fund. The Trustees may change the fund's goal, investment strategies and other policies set forth in this prospectus without shareholder approval, except as otherwise provided in the prospectus or Statement of Additional Information.

**Model risk:** The Investment Manager uses proprietary models and data supplied by third parties. The fund uses models and data to, among other things, identify and assess trends and market opportunities and provide risk management insights. The fund regularly enhances and updates its models to reflect developing research, fundamental analysis, and access to new data.

If the quantitative models or data used in managing the fund prove to be incorrect or incomplete, investment decisions made in reliance on the models or data may not produce the desired results and may cause the fund to underperform its benchmark or other funds with a similar investment goal, and the fund may realize losses. In addition, models may incorrectly forecast future behavior, leading to potential losses. Use of these models in unforeseen or certain low-probability scenarios (often involving a market disruption of some kind) also may result in losses for the fund.

All models require data. Some of the models that the fund may use are typically constructed based on historical data, and the success of these models is dependent largely on the accuracy and reliability of the supplied historical data. If incorrect data is entered into a model, the resulting output will be incorrect.

#### Principal investment risks
The principal and certain additional risks of investing in the fund are described below. These risks and other factors may adversely affect the fund's net asset value, market price and performance. When you sell your shares, they may be worth more or less than what you paid for them, which means that you could lose money as a result of your investment. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund may not achieve its investment objective, and it is not intended to be a complete investment program. The fund's Statement of Additional Information ("SAI") contains additional information about the fund's investment policies and risks.

**ESG investing risk** **:** Investing with a focus on companies or issuers that meet the Investment Manager's ESG criteria may result in the fund investing in certain types of companies, issuers, industries or sectors that the market may not favor. Conversely, investing in such companies or issuers may result in the fund foregoing investment in securities that outperform the fund's investments in certain environments. In evaluating an investment opportunity, the Investment Manager may make investment decisions without the availability of optimal ESG-related data (which may be even less available with securitized debt instruments) or based on information and data that is incomplete or inaccurate. ESG criteria are not uniformly defined and applying such factors involves subjective assessments. ESG scorings and assessments of issuers

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can vary across third-party data providers and may change over time. The Investment Manager does not rely exclusively on third-party data providers in evaluating ESG criteria. ESG information from third-party data providers may be incomplete, inaccurate or unavailable, particularly with respect to companies in emerging market countries, which may adversely impact the investment process. The fund does not restrict its investments to "green bonds" (*i.e.,* U.S. dollar-denominated bonds designated as "green" by the Climate Bonds Initiative) and does not restrict investments based solely on "negative screens". In addition, a company's or issuer's business practices, products or services may change over time. As a result of these possibilities, among others, the fund may temporarily hold securities that are inconsistent with the fund's ESG investment criteria. Regulatory changes or interpretations regarding the definitions and/or use of ESG criteria could have a material adverse effect on the fund's ability to invest in accordance with its investment policies and/or achieve its investment objective, as well as the ability of certain classes of investors to invest in funds, such as the fund, whose strategies include ESG criteria. There may be limitations with respect to availability of ESG data in certain sectors, as well as limited availability of investments with positive ESG assessments in certain sectors. The Investment Manager's evaluation of ESG criteria may change over time.

Because fixed-income investments generally represent a promise to pay principal and interest by an issuer, and not an ownership interest, and may involve complex structures, ESG-related investment considerations may have a more limited impact on risk and return (or may have an impact over a different investment time horizon) relative to other asset classes, and this may be particularly true for shorter-term investments. Third-party ESG data regarding fixed-income investments is generally less available than ESG data for equity investments. In addition, holders of fixed-income investments do not typically have voting rights, unlike holders of equity investments who have the right to vote on issuer proposals.

**Fluctuation of** **net asset value and share price risk** **:** Shares may trade at a larger premium or discount to net asset value than shares of other ETFs. The net asset value of the fund's shares will generally fluctuate with changes in the market value of the fund's holdings. The fund's shares are listed on an exchange and can be bought and sold in the secondary market at market prices. The market prices of shares will fluctuate in accordance with changes in net asset value and supply and demand on the listing exchange. Although the arbitrage process is designed to permit the shares of the fund to trade at market prices that are at or close to net asset value, it is possible that the market price and net asset value will vary significantly. As a result, you may sustain losses if you pay more than the shares' net asset value when you purchase shares or receive less than the shares' net asset value when you sell shares, in the secondary market. During periods of disruptions to creations and redemptions, the existence of extreme market volatility, or lack of an active trading market for the fund's shares, the market price of fund shares is more likely to differ significantly from the fund's net asset value or the intraday value of the fund's holdings. During such periods, you may be unable to sell your

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shares or may incur significant losses if you sell your shares. There are various methods by which investors can purchase and sell shares and various orders that may be placed. Investors should consult their financial intermediary before purchasing or selling shares of the fund. Disruptions at market makers, authorized participants or market participants may also result in significant differences between the market price of the fund's shares and the fund's net asset value. In addition, in stressed market conditions or periods of market disruption or volatility, the market for shares may become less liquid in response to deteriorating liquidity in the markets for the fund's underlying portfolio holdings.

The market price of shares during the trading day, like the price of any exchange-traded security, includes a "bid/ask" spread charged by the exchange specialist, market makers, or other participants that trade the particular security. In times of severe market disruption or volatility, the bid/ask spread can increase significantly. At those times, shares are most likely to be traded at a discount to net asset value, and the discount is likely to be greatest when the price of shares is falling fastest, which may be the time that you most want to sell your shares.

**Trading issues risk** **:** The fund has a limited public trading history. Although shares are listed on an exchange, there can be no assurance that an active trading market or requirements to remain listed will be met or maintained, or that the market for fund shares will operate as intended. If the market does not operate as intended, it could lead to the fund's shares trading at wider spreads and larger premiums and discounts to net asset value than other actively managed ETFs, particularly during periods of market disruption or volatility. As a result, it may cost investors more to trade fund shares than shares of other ETFs.

There is no guarantee that the fund will be able to attract market makers and authorized participants. There are no obligations of market makers to make a market in the fund's shares or of authorized participants to submit purchase or redemption orders for creation units.

The market prices of the fund's shares are expected to fluctuate, in some cases materially, in response to changes in the fund's net asset value, the intraday value of the fund's holdings and supply and demand for the fund's shares. The Investment Manager cannot predict whether the fund's shares will trade above, below or at their net asset value or the intraday value of the fund's holdings. During such periods, investors may incur significant losses if they sell shares.

The securities held by the fund may be traded in markets that close at a different time than the exchange on which the fund's shares are listed. Liquidity in those securities may be reduced after the applicable closing times. Accordingly, during the time when the exchange is open but after the applicable market closing, fixing or settlement times, bid-ask spreads on the exchange and the corresponding premium or discount to the shares' net asset value may widen.

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In addition, trading of shares in the secondary market may be halted, for example, due to activation of market-wide "circuit breakers." If trading halts or an unanticipated early closing of the listing exchange occurs, a shareholder may be unable to purchase or sell shares of the fund.

If the fund's shares are delisted from the listing exchange, the Investment Manager may seek to list the fund shares on another market, merge the fund with another exchange-traded fund or traditional mutual fund, or redeem the fund shares at net asset value.

Shares of the fund, similar to shares of other issuers listed on a stock exchange, may be sold short and are therefore subject to the risk of increased volatility and price decreases associated with being sold short.

**Large shareholder transaction risk:** The fund is subject to the risk that shareholders will purchase or redeem large quantities of shares of the fund (such purchases or redemptions, "large shareholder transactions"). The fund may be an investment option for mutual funds that are managed by the Investment Manager and its affiliates as "funds of funds." Additionally, other investors from time to time may make substantial investments in the fund. Such shareholders may at times be considered to control the fund. In addition, a large number of shareholders collectively may purchase or redeem fund shares in large amounts rapidly or unexpectedly. A number of circumstances may cause the fund to experience large shareholder transactions, such as changes in the eligibility criteria for the fund; liquidations, reorganizations, repositionings, or other announced fund events; or changes in investment objectives, strategies, policies, risks, or investment personnel. Large redemptions may be more likely during times of market stress or reduced liquidity, exacerbating the potential impact on the fund.

Large shareholder transactions may adversely affect the fund's liquidity and net assets. These transactions could adversely affect the fund's performance if the fund is forced to sell portfolio securities to satisfy redemption requests or purchase securities for the portfolio in connection with the investment of subscription proceeds when the fund would otherwise not do so, and at unfavorable prices, which may increase the fund's brokerage costs and accelerate the realization of taxable income and/or gains to shareholders. The effects of taxable income and/or gains resulting from large shareholder transactions would particularly impact non-redeeming shareholders who do not hold their fund shares in an IRA, 401(k) plan or other tax-advantaged plan. To the extent that such transactions result in short-term capital gains, such gains will generally be taxed at the ordinary income tax rate for shareholders who hold fund shares in a taxable account. In addition, fund returns also may be adversely affected if the fund holds a portion of its assets in liquid, cash-like investments in connection with or in anticipation of shareholder redemptions.

**Authorized participant concentration risk:** Only authorized participants may engage in creation and redemption transactions directly with the fund. The fund may have a limited number of financial institutions that act as authorized participants, none of which are obligated to engage in creation and/or

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redemption transactions. Decisions by market makers or authorized participants to reduce their role with respect to market making or creation and redemption activities during times of market stress, or a decline in the number of authorized participants due to decisions to exit the business, bankruptcy, or other factors, could inhibit the effectiveness of the arbitrage process in maintaining the relationship between the underlying value of the fund's portfolio securities and the market price of fund shares. To the extent no other authorized participants are able to step forward to create or redeem, shares may trade at a discount (or premium) to net asset value and possibly face delisting.

**Cash transactions risk** **:** Unlike certain ETFs, the fund may effect creations and redemptions in cash or partially in cash. Therefore, it may be required to sell portfolio securities and subsequently recognize gains on such sales that the fund might not have recognized if it were to distribute portfolio securities in-kind. As such, investments in the fund's shares may be less tax-efficient than an investment in an ETF that distributes portfolio securities entirely in-kind.

Market risk: 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 (including perceptions about monetary policy, interest rates, inflation or the risk of default); government actions (including protectionist measures, intervention in the financial markets or other regulation, and changes in fiscal, monetary or tax policies); geopolitical events or changes (including natural disasters, terrorism and war); outbreaks of infectious illnesses or other widespread public health issues (including epidemics and pandemics); and factors related to a specific issuer, asset class, geography, industry, or sector. Foreign financial markets have their own market risks, and they may be more or less volatile than U.S. markets and may move in different directions. During a general downturn in financial markets, multiple asset classes may decline in value simultaneously. These and other factors may lead to increased volatility and reduced liquidity in the fund's portfolio holdings. During those periods, the fund may experience high levels of shareholder redemptions, and may have to sell securities at times when it would otherwise not do so, and at unfavorable prices. These risks may be exacerbated during economic downturns or other periods of economic stress.

The COVID-19 pandemic and efforts to contain its spread have resulted in, among other effects, significant market volatility, exchange trading suspensions and closures, declines in global financial markets, higher default rates, significant changes in fiscal and monetary policies, and economic downturns and recessions. The effects of the COVID-19 pandemic have negatively affected, and may continue to negatively affect, the global economy, the economies of the United States and other individual countries, the financial performance of individual issuers, sectors, industries, asset classes, and markets, and the value, volatility, and liquidity of particular securities and other assets. The effects of the COVID-19 pandemic also are likely to exacerbate other risks that apply to the fund, including the risks disclosed in this

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prospectus, which could negatively impact the fund's performance and lead to losses on your investment in the fund. The duration of the COVID-19 pandemic and its effects cannot be determined with certainty.

The United States and other countries are periodically involved in disputes over trade and other matters, which may result in tariffs, investment restrictions and adverse impacts on affected companies and securities. For example, the United States has imposed tariffs and other trade barriers on Chinese exports, has restricted sales of certain categories of goods to China, and has established barriers to investments in China. Trade disputes may adversely affect the economies of the United States and its trading partners, as well as companies directly or indirectly affected and financial markets generally. The United States government has prohibited U.S. persons from investing in Chinese companies designated as related to the Chinese military. These and possible future restrictions could limit the fund's opportunities for investment and require the sale of securities at a loss or make them illiquid. Moreover, the Chinese government is involved in a longstanding dispute with Taiwan that has included threats of invasion. If the political climate between the United States and China does not improve or continues to deteriorate, if China were to attempt unification of Taiwan by force, or if other geopolitical conflicts develop or get worse, economies, markets and individual securities may be severely affected both regionally and globally, and the value of the fund's assets may go down.

**Interest rate risk** **:** The values of bonds and other debt instruments usually rise and fall in response to changes in interest rates. Interest rates can change in response to the supply and demand for credit, government and/or central bank monetary policy and action, inflation rates, and other factors. Declining interest rates generally result in an increase in the value of existing debt instruments, and rising interest rates generally result in a decrease in the value of existing debt instruments. Changes in a debt instrument's value usually will not affect the amount of interest income paid to the fund, but will affect the value of the fund's shares. Interest rate risk is generally greater for investments with longer maturities.

Some investments give the issuer the option to call or redeem an investment before its maturity date. If an issuer calls or redeems an investment during a time of declining interest rates, the Investment Manager might have to reinvest the proceeds in an investment offering a lower yield, and, therefore, the fund might not benefit from any increase in value as a result of declining interest rates.

**Credit risk** **:** Investors normally expect to be compensated in proportion to the risk they are assuming. Thus, debt of issuers with poor credit prospects usually offers higher yields than debt of issuers with more secure credit. Higher-rated investments generally have lower credit risk.

The fund invests mostly in higher-yield, higher-risk debt investments that are rated below BBB or its equivalent at the time of purchase by any nationally

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recognized securities rating organization rating such investments, or in unrated investments that the investment manager believes are of comparable quality.

The fund may invest up to 15% of the fund's total assets in debt investments rated below CCC or its equivalent, at the time of purchase, by each rating organization rating such investments, or in unrated investments that the investment manager believes are of comparable quality. This includes investments in the lowest rating category of the rating organization. The fund will not necessarily sell an investment if its rating is reduced after the fund buys it. Investments rated below BBB or its equivalent are below-investment-grade in quality. This rating reflects a greater possibility that the issuers may be unable to make timely payments of interest and principal and thus default. If a default occurs, or is perceived as likely to occur, the value of the investment will usually be more volatile and could decrease. The value of a debt instrument may also be affected by changes in, or perceptions of, the financial condition of the issuer, borrower, counterparty, or other entity, or underlying collateral or assets, or changes in, or perceptions of, specific or general market, economic, industry, political, regulatory, geopolitical, environmental, public health, and other conditions. A default or expected default could also make it difficult for the fund to sell the investment at a price approximating the value the investment manager had previously placed on it. Lower-rated debt usually has a more limited market than higher-rated debt, which may at times make it difficult for the fund to buy or sell certain debt instruments or to establish their fair values. Credit risk is generally greater for zero-coupon bonds and other investments that are issued at less than their face value and that are required to make interest payments only at maturity rather than at intervals during the life of the investment.

Credit ratings are based largely on the issuer's historical financial condition and the rating organizations' investment analysis at the time of rating. The rating assigned to any particular investment does not necessarily reflect the issuer's current financial condition, and does not reflect an assessment of the investment's volatility or liquidity. Although credit ratings are considered when making investment decisions, the Investment Manager performs its own investment analysis and does not rely only on ratings assigned by the rating organizations. The success in achieving the fund's goal may depend more on the Investment Manager's credit analysis when buying lower-rated debt than when buying investment-grade debt. The fund may have to participate in legal proceedings involving the issuer. This could increase the fund's operating expenses and decrease its net asset value.

Although investment-grade investments generally have lower credit risk, they may share some of the risks of lower-rated investments.

Fixed income investments may be more susceptible to downgrades or defaults during economic downturns or other periods of economic stress, which can significantly strain the financial resources of debt issuers, including the issuers of the fixed income securities in which the fund invests (or has exposure to). This may make it less likely that those issuers can meet their financial obligations when due and may adversely impact the value of their fixed income

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securities, which could negatively impact the performance of the fund. It is difficult to predict the level of financial stress and duration of such stress issuers may experience.

**Derivatives risk** **:** The fund may engage in a variety of transactions involving derivatives, such as futures, options, certain foreign currency transactions and credit default, total return and interest rate swap contracts. Derivatives are financial instruments whose value depends upon, or is derived from, the value of something else, such as one or more underlying investments, pools of investments, indexes or currencies. The fund may make use of "short" derivative positions, the values of which typically move in the opposite direction from the price of the underlying investment, pool of investments, index or currency. The fund may use derivatives both for hedging and non-hedging purposes. For example, the fund may use derivatives to increase or decrease the fund's exposure to long- or short-term interest rates (in the United States or abroad), adjust the term of the fund's U.S. Treasury security exposure, adjust the fund's positioning on the yield curve (a line that plots interest rates of bonds having equal credit quality but differing maturity dates) or to take tactical positions along the yield curve or to a particular currency or group of currencies, or as a substitute for a direct investment in the securities of one or more issuers. However, the fund may also choose not to use derivatives based on the Investment Manager's evaluation of market conditions or the availability of suitable derivatives. Investments in derivatives may be applied toward meeting a requirement to invest in a particular kind of investment if the derivatives have economic characteristics similar to that investment.

Derivatives involve special risks and may result in losses. The successful use of derivatives depends on the Investment Manager's ability to manage these sophisticated instruments. Some derivatives are "leveraged," which means they provide the fund with investment exposure greater than the value of the fund's investment in the derivatives. As a result, these derivatives may magnify or otherwise increase investment losses to the fund. The risk of loss from certain short derivative positions is theoretically unlimited. The value of derivatives may move in unexpected ways due to unanticipated market movements, the use of leverage, imperfect correlation between the derivative instrument and the reference asset, or other factors, especially in unusual market conditions, and volatility in the value of derivatives could adversely impact the fund's returns, obligations and exposures.

Other risks arise from the potential inability to terminate or sell derivative positions. Derivatives may be subject to liquidity risk due to the fund's obligation to make payments of margin, collateral, or settlement payments to counterparties. A liquid secondary market may not always exist for the fund's derivative positions. In fact, certain over-the-counter instruments (investments not traded on an exchange) may not be liquid. Over-the-counter instruments also involve the risk that the other party to the derivative transaction may not be willing or able to meet its obligations with respect to the derivative transaction. The risk of a party failing to meet its obligations may increase if the fund has significant exposure to that counterparty. Derivative transactions

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may also be subject to operational risk, including due to documentation and settlement issues, system failures, inadequate controls and human error, and legal risk due to insufficient documentation, insufficient capacity or authority of a counterparty, or issues with respect to the legality or enforceability of the derivative contract. For further information about additional types and risks of derivatives, see *Miscellaneous Investments, Investment Practices and Risks* in the SAI.

**Model risk:** The Investment Manager uses proprietary models and data supplied by third parties. The fund uses models and data to, among other things, identify and assess trends and market opportunities and provide risk management insights. The fund regularly enhances and updates its models to reflect developing research, fundamental analysis, and access to new data.

If the quantitative models or data used in managing the fund prove to be incorrect or incomplete, investment decisions made in reliance on the models or data may not produce the desired results and may cause the fund to underperform its benchmark or other funds with a similar investment goal, and the fund may realize losses. In addition, models may incorrectly forecast future behavior, leading to potential losses. Use of these models in unforeseen or certain low-probability scenarios (often involving a market disruption of some kind) also may result in losses for the fund.

All models require data. Some of the models that the fund may use are typically constructed based on historical data, and the success of these models is dependent largely on the accuracy and reliability of the supplied historical data. If incorrect data is entered into a model, the resulting output will be incorrect.

**Floating rate** **loans risk** **:** Floating rate loans are debt obligations with interest rates that adjust or "float" periodically (normally on a monthly or quarterly basis) based on a generally recognized base rate, such as the Secured Overnight Financing Rate, or the prime rate offered by one or more major U.S. banks. While most floating rate loans are below-investment-grade in quality, many also are senior in rank in the event of bankruptcy to most other securities of the borrower, such as common stock or public bonds. Floating rate loans are also normally secured by specific collateral or assets of the borrower so that the holders of the loans will have a priority claim on those assets in the event of default or bankruptcy of the issuer.

Floating rate loans generally are less sensitive to interest rate changes than obligations with fixed interest rates but may decline in value if their interest rates do not rise as much, or as quickly, as interest rates in general. Conversely, floating rate instruments will not generally increase in value if interest rates decline. Changes in interest rates will also affect the amount of interest income the fund earns on its floating rate investments. Most floating rate loans allow for prepayment of principal without penalty. If a borrower prepays a loan, the fund might have to reinvest the proceeds in an investment that may have lower yields than the yield on the prepaid loan or might not be

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able to take advantage of potential gains from increases in the credit quality of the issuer.

The value of collateral, if any, securing a floating rate loan can decline, and may be insufficient to meet the borrower's obligations or difficult to liquidate. In addition, the fund's access to collateral may be limited by bankruptcy or other insolvency proceedings. Floating rate loans may not be fully collateralized and may decline in value. Loans may not be considered "securities," and it is possible that the fund may not be entitled to rely on anti-fraud and other protections under the federal securities laws when it purchases loans.

Although the market for the types of floating rate loans in which the fund invests has become increasingly liquid over time, this market is still developing, and there can be no assurance that adverse developments with respect to this market or particular borrowers will not prevent the fund from selling these loans at their market values when the Investment Manager considers such a sale desirable. In addition, the settlement period (the period between the execution of the trade and the delivery of cash to the purchaser) for floating rate loan transactions may be significantly longer than the settlement period for other investments, and in some cases longer than seven days. Requirements to obtain consent of borrower and/or agent can delay or impede the fund's ability to sell the floating rate loans and can adversely affect the price that can be obtained. It is possible that sale proceeds from floating rate loan transactions will not be available to meet redemption obligations.

**Foreign investments risk** **:** The fund may invest in foreign investments, although they do not represent a primary focus of the fund. Foreign investments involve certain special risks. For example, their values may decline in response to changes in currency exchange rates, unfavorable political and legal developments, unreliable or untimely information, and economic and financial instability. In addition, the liquidity of these investments may be more limited than for most U.S. investments, which means the fund may at times be unable to sell them at desirable prices. Foreign settlement procedures may also involve additional risks. These risks are generally greater in the case of developing (also known as emerging) markets, which typically have less developed legal and financial systems.

There may be less publicly-available information, or less reliable publicly-available information, about foreign companies (including information related to companies' ESG practices), particularly with respect to emerging market companies, than publicly-available information regarding U.S. companies. As a result, the Investment Manager's ability to evaluate a foreign company, including with respect to its ESG or sustainability practices, may be more limited than its ability to evaluate a U.S. company. Certain of these risks may also apply to some extent to U.S.-traded investments that are denominated in foreign currencies, investments in U.S. companies or issuers that are traded in foreign markets, or investments in U.S. companies or issuers that have significant foreign operations.

Prospectus 23

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**Liquidity and illiquid investments risk** **:** The fund may invest up to 15% of its net assets in illiquid investments, which may be considered speculative and which may be difficult to sell. The sale of many of these investments is prohibited or limited by law or contract. Some investments may be difficult to value for purposes of determining the fund's net asset value. Certain other investments may not have an active trading market due to adverse market, economic, industry, political, regulatory, geopolitical, environmental, public health, and other conditions, including investors trying to sell large quantities of a particular investment or type of investment, or lack of market makers or other buyers for a particular investment or type of investment. The fund may not be able to sell its illiquid investments when the Investment Manager considers it desirable to do so, or the fund may be able to sell them only at less than their value.

**Management and operational risk** **:** The fund is actively managed and its performance will reflect, in part, the Investment Manager's ability to make investment decisions that seek to achieve the fund's investment objective. There is no guarantee that the investment techniques, analyses, or judgments that the Investment Manager applies in making investment decisions for the fund will produce the intended outcome or that the investments selected for the fund will perform as well as other securities that were not selected for the fund. As a result, the fund may underperform its benchmark or other funds with a similar investment goal and may realize losses. In addition, the Investment Manager, or the fund's other service providers, may experience disruptions or operating errors that could negatively impact the fund. Although service providers may have operational risk management policies and procedures and take appropriate precautions to avoid and mitigate risks that could lead to disruptions and operating errors, it may not be possible to identify all of the operational risks that may affect the fund or to develop processes and controls to completely eliminate or mitigate their occurrence or effects.

**Portfolio turnover rate** **:** The fund's portfolio turnover rate measures how frequently the fund buys and sells investments. A portfolio turnover rate of 100%, for example, would mean that the fund sold and replaced securities valued at 100% of the fund's assets within a one-year period. Funds with high turnover may be more likely to realize capital gains that must be distributed to shareholders as taxable income. High turnover may also cause a fund to pay more brokerage commissions and other transaction costs (including imputed transaction costs), which may detract from performance. The fund's portfolio turnover rate and the amount of brokerage commissions it pays and transaction costs it incurs will vary over time based on market conditions.

**Other investments:** In addition to the main investment strategies described above, the fund may make other types of investments, such as investments in equity securities, asset-backed, hybrid and structured bonds and notes, preferred securities that would be characterized as debt securities under applicable accounting standards and tax laws, and assignments of and participations in fixed and floating rate loans. The fund may also invest in cash or cash equivalents, including money market instruments or short-term

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instruments such as commercial paper, bank obligations (e.g., certificates of deposit and bankers' acceptances), repurchase agreements, and U.S. Treasury bills or other government obligations. The fund may also from time to time invest all or a portion of its assets, including any cash balances, in money market and/or short-term bond funds advised by the Investment Manager or its affiliates. The percentage of the fund invested in cash and cash equivalents and such money market and short-term bond funds is expected to vary over time and will depend on various factors, including market conditions, purchase and redemption activity by fund shareholders, and the Investment Manager's assessment of the cash level that is appropriate to allow the fund to pursue investment opportunities as they arise and to meet shareholder redemption requests. Large cash positions may dampen performance and may prevent the fund from achieving its goal. These practices may be subject to other risks, as described under *Miscellaneous Investments, Investment Practices and Risks* in the SAI.

**Temporary defensive strategies:** In response to adverse market, economic, political or other conditions, the fund may take temporary defensive positions, such as investing some or all of the fund's assets in cash and cash equivalents, that differ from the fund's usual investment strategies. However, the fund may choose not to use these temporary defensive strategies for a variety of reasons, even in very volatile market conditions. If the fund employs these strategies, the fund may miss out on investment opportunities and may not achieve its goal. Additionally, while temporary defensive strategies are mainly designed to limit losses, they may not work as intended.

**Changes in policies:** The Trustees may change the fund's goal, investment strategies and other policies set forth in this prospectus without shareholder approval, except as otherwise provided in the prospectus or SAI.

### Fund management

#### The fund's investment manager
Franklin Advisers, One Franklin Parkway, San Mateo, CA 94403-1906, is the fund's investment manager, responsible for making investment decisions for the fund and managing the fund's other affairs and business. Franklin Advisers is a wholly-owned subsidiary of Franklin Resources, Inc. ("Resources"). Together, Franklin Advisers and its affiliates manage, as of June 30, 2025, $1.61 trillion in assets, and have been in the investment management business since 1947.

Under an agreement with the Investment Manager, Putnam Management, 100 Federal Street, Boston, MA 02110, serves as the fund's sub-adviser, responsible for providing certain advisory and related services. Putnam Management is an indirect, wholly-owned subsidiary of Resources. The Investment Manager (and not the fund) will pay a monthly fee to Putnam Management based on the costs of Putnam Management in providing these services to the fund, which may include a mark-up determined and revised

Prospectus 25

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from time to time in accordance with Franklin Templeton's transfer pricing policy, in line with applicable tax/transfer pricing regulations, but not to exceed 15% over such costs.

The Investment Manager has retained FTIML, Cannon Place, 78 Cannon Street, London, EC4N 6HL, England, to make investment decisions for such fund assets as may be designated from time to time by the Investment Manager. FTIML is not currently managing any fund assets. If FTIML were to manage any fund assets, the Investment Manager (and not the fund) would pay a monthly sub-management fee to FTIML for its services at the annual rate of 0.20% of the average net asset value of any fund assets managed by FTIML. FTIML is an indirect subsidiary of Resources.

Pursuant to the arrangements described above, investment professionals who are based in foreign jurisdictions may serve as portfolio managers of the fund or provide other investment services, consistent with local regulations.

The fund pays an annual all-inclusive management fee of 0.55% to the Investment Manager based on the fund's average daily net assets. The management fee is calculated and accrued daily. The management fee covers all of the other expenses of the fund with limited exceptions.

The Investment Manager has agreed to reduce its fees by an amount equal to the management fees paid by Franklin Templeton affiliated funds with respect to assets the fund invests in such affiliated funds. This arrangement cannot be terminated prior to August 31, 2026 without approval of the Board of Trustees.

For the fiscal year ended April 30, 2025, the fund paid an effective management fee (after any applicable waivers) of 0.53% of the fund's average net assets.

A discussion regarding the basis for the Trustees' approval of the fund's investment management contract and subadvisory contracts is available in the fund's report on Form N-CSR for the period ended October 31, 2024.

**Portfolio managers.**The portfolio managers identified below are jointly and primarily responsible for the day-to-day management of the fund's portfolio.

**Norman P. Boucher Portfolio Manager of Franklin Advisers** 

Mr. Boucher has been a portfolio manager of the fund since 2023. He joined Franklin Templeton in 2024. Prior to joining Franklin Templeton, Mr. Boucher was a portfolio manager for Putnam Investment Management, LLC.

**Robert L. Salvin Portfolio Manager of Franklin Advisers** 

Mr. Salvin has been a portfolio manager of the fund since 2023. He joined Franklin Templeton in 2024. Prior to joining Franklin Templeton, Mr. Salvin was a portfolio manager for Putnam Investment Management, LLC.

The fund's SAI provides additional information about portfolio manager compensation, other accounts that they manage and their ownership of fund shares.

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Shareholder information

#### Valuation of fund shares
The price of the fund's shares is based on its net asset value. The net asset value per share equals the total value of its assets, less its liabilities, divided by the number of its outstanding shares. Shares are only valued as of the scheduled close of regular trading on the NYSE each day the exchange is open.

The fund values its investments for which market quotations are readily available at market value. It values all other investments and assets at their fair value, which may differ from recent market prices. For example, the fund may value a stock traded on a U.S. exchange at its fair value when the exchange closes early or trading in the stock is suspended. It may also value a stock at fair value if recent transactions in the stock have been very limited or if, in the case of a security traded on a market that closes before the NYSE closes, material information about the issuer becomes available after the close of the relevant market. Market quotations are not considered to be readily available for many debt securities. These securities are generally valued at fair value on the basis of valuations provided by an independent pricing service approved by the fund's Trustees or dealers selected by the Investment Manager. Pricing services and dealers determine valuations for normal institutional-size trading units of such securities using information with respect to transactions in the bond being valued, market transactions for comparable securities and various relationships, generally recognized by institutional traders, between securities. To the extent a pricing service or dealer is unable to value a security or provides a valuation that the Investment Manager does not believe accurately reflects the security's fair value, the security will be valued at fair value by the Investment Manager.

The fund translates prices for its investments quoted in foreign currencies into U.S. dollars at current exchange rates, which are generally determined as of 4:00 p.m. Eastern Time each day the NYSE is open. As a result, changes in the value of those currencies in relation to the U.S. dollar may affect the fund's net asset value. Because foreign markets may be open at different times than the NYSE, the value of the fund's shares may change on days when shareholders are not able to buy or sell them. Many securities markets and exchanges outside the U.S. close before the close of the NYSE, and the closing prices for securities in those markets or exchanges may not reflect events that occur after the close but before the scheduled close of regular trading on the NYSE. As noted above, the value determined for an investment using the fund's fair value pricing procedures may differ from recent market prices for the investment.

The fund's most recent net asset value is available at

www.franklintempleton.com or by calling 1-800-225-1581.

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### Additional information about the fund
The fund is an actively managed ETF. Like other ETFs, shares of the fund are generally purchased and redeemed in creation unit aggregations through authorized participants, shares of the fund are listed and traded on a stock exchange, and individual investors can purchase or sell shares in less than creation unit sizes and for cash in the secondary market through a broker.

<u>Derivative actions</u> 

The fund is a series of Putnam ETF Trust (the "Trust"). The Trust's Amended and Restated Agreement and Declaration of Trust imposes certain conditions on derivative actions that are not otherwise required by law, including, in the case of any claim not arising under the federal securities laws, a requirement that the holders of 10% or more of the total outstanding shares of the applicable fund join the request to commence the action. Although these conditions are intended to permit legitimate inquiries and claims while avoiding the time, expense, distraction, and other harm that can be caused to a fund or its shareholders as a result of spurious shareholder demands and derivative actions, they may make it more difficult or costly for fund shareholders to bring derivative actions on behalf of the Trust.

<u>Information on the fund's website</u> 

The fund will disclose its top 10 holdings and related portfolio information monthly beginning on or after 5 business days after the end of each month at www.franklintempleton.com. The fund discloses its complete portfolio holdings, including the name, identifier, market value and weight of each security and instrument in the portfolio, at www.franklintempleton.com on each business day, before commencement of trading in shares on the listing exchange. The fund will also disclose its complete portfolio holdings as of the end of the prior month on a monthly basis beginning on or before the 15th calendar day after the end of each month. Recent information, including information regarding the fund's net asset value, market price, premiums and discounts, and bid/ask spread, is also available at www.franklintempleton.com.

#### Buying and selling shares in the secondary market
Shares of the fund are listed and traded on an exchange, and individual fund shares may only be bought and sold in the secondary market through a broker. The fund does not impose any minimum investment for shares of the fund purchased on an exchange. These transactions are made at market prices that may vary throughout the day and may be greater than the fund's net asset value (premium) or less than the fund's net asset value (discount). As a result, you may pay more than net asset value when you purchase shares, and receive less than net asset value when you sell shares, in the secondary market. If you buy or sell shares in the secondary market, you will generally incur customary brokerage commissions and charges and you may also incur the cost of the spread between the price at which a dealer will buy fund shares and the somewhat higher price at which a dealer will sell shares. Due to such

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commissions and charges and spread costs, frequent trading may detract significantly from investment returns.

The fund is designed to offer investors an investment that can be bought and sold frequently in the secondary market without impact on the fund, and such trading activity is designed to enable the market price of fund shares to remain at or close to net asset value. Accordingly, the Board of Trustees has not adopted policies and procedures designed to discourage excessive or short-term trading by these investors.

The fund accommodates frequent purchases and redemptions of creation units by authorized participants and does not place a limit on purchases or redemptions of creation units by these investors. The fund reserves the right, but does not have the obligation, to reject any purchase or redemption transaction (subject to legal and regulatory limits regarding redemption transactions) at any time. In addition, the fund reserves the right to impose restrictions on disruptive, excessive, or short-term trading.

#### Precautionary notes
<u>Note to registered investment companies</u> 

Section 12(d)(1) of the Investment Company Act of 1940, as amended (the "1940 Act"), restricts investments by registered investment companies in the securities of other investment companies, including shares of the fund. Registered investment companies are permitted to invest in the fund beyond the limits set forth in Section 12(d)(1), subject to certain terms and conditions, including that such investment companies enter into an agreement with the fund.

<u>Note to authorized participants regarding continuous offering</u> 

Certain legal risks may exist that are unique to authorized participants purchasing creation units directly from the fund. Because new creation units may be issued on an ongoing basis, at any point a "distribution," as such term is used in the Securities Act of 1933 (the "Securities Act"), could be occurring. As a broker-dealer, certain activities that you perform may, depending on the circumstances, result in your being deemed a participant in a distribution, in a manner which could render you a statutory underwriter and subject you to the prospectus delivery and liability provisions of the Securities Act.

For example, you may be deemed a statutory underwriter if you purchase creation units from the fund, break them down into individual fund shares, and sell such shares directly to customers, or if you choose to couple the creation of a supply of new fund shares with an active selling effort involving solicitation of secondary market demand for fund shares. A determination of whether a person is an underwriter for purposes of the Securities Act depends upon all of the facts and circumstances pertaining to that person's activities, and the examples mentioned here should not be considered a complete description of all the activities that could lead to a categorization as an underwriter.

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Dealers who are not "underwriters" but are participating in a distribution (as opposed to engaging in ordinary secondary market transactions), and thus dealing with shares as part of an "unsold allotment" within the meaning of Section 4(a)(3)(C) of the Securities Act, will be unable to take advantage of the prospectus delivery exemption provided by Section 4(a)(3) of the Securities Act. This is because the prospectus delivery exemption in Section 4(a)(3) of the Securities Act is not available in respect of such transactions as a result of Section 24(d) of the 1940 Act. As a result, you should note that dealers who are not underwriters but are participating in a distribution (as opposed to engaging in ordinary secondary market transactions) and thus dealing with the shares that are part of an overallotment within the meaning of Section 4(a)(3)(A) of the Securities Act would be unable to take advantage of the prospectus delivery exemption provided by Section 4(a)(3) of the Securities Act. Firms that incur a prospectus-delivery obligation with respect to shares of the fund are reminded that, under Rule 153 under the Securities Act, a prospectus delivery obligation under Section 5(b)(2) of the Securities Act owed to an exchange member in connection with a sale on an exchange is satisfied by the fact that the prospectus is available at the exchange upon request. The prospectus delivery mechanism provided in Rule 153 is only available with respect to transactions on an exchange.

Certain affiliates of the fund may purchase and resell fund shares pursuant to this prospectus.

<u>Note to secondary market investors</u> 

The Depository Trust Company ("DTC"), a limited trust company and securities depository that facilitates the clearance and settlement of trades for its participating banks and broker-dealers, has executed an agreement with the fund's distributor, Franklin Distributors, LLC (the "Distributor"). DTC, or its nominee, is the registered owner of all outstanding shares of the fund. The Investment Manager will not have any record of your ownership. Your ownership of shares will be shown on the records of DTC and the DTC participant broker through which you hold the shares. Your broker will provide you with account statements, confirmations of your purchases and sales, and tax information. Your broker will also be responsible for distributing income and capital gain distributions and for sending you shareholder reports and other information as may be required.

### Costs associated with creations and redemptions
The fund generally imposes a creation transaction fee and a redemption transaction fee to offset transfer and other transaction costs associated with the issuance and redemption of creation units of shares. Information about the procedures regarding creation and redemption of creation units and the applicable transaction fees is included in the SAI.

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Distribution plans and payments to intermediaries

#### Principal distributor
The Distributor distributes creation units for the fund on an agency basis, does not maintain a secondary market in shares of the fund, and has no role in determining the investment policies of the fund or the securities that are purchased or sold by the fund. The Distributor is an indirect, wholly-owned broker/dealer subsidiary of Resources.

The Distributor's address is One Franklin Parkway, San Mateo, CA 94403-1906.

Intermediaries may receive compensation from the Investment Manager, the Distributor, and/or their respective affiliates for providing recordkeeping and administrative services, as well as other retirement plan expenses, and compensation for services intended to result in the sale of fund shares. These payments are described in more detail in this section and in the SAI.

#### Distribution and service plan
The fund has adopted a distribution and service plan pursuant to Rule 12b-1 under the 1940 Act that authorizes the fund to pay distribution fees in connection with the sale and distribution of its shares and service fees in connection with the provision of ongoing shareholder support services. No Rule 12b-1 fees are currently paid by the fund, and there are no current plans to impose these fees. However, in the event Rule 12b-1 fees are charged in the future, because these fees are paid out of the fund's assets on an ongoing basis, these fees will increase the cost of your investment in the fund.

No dealer, sales representative, or any other person has been authorized to give any information or to make any representations, other than those contained in this prospectus and in the related SAI, in connection with the offer contained in this prospectus. If given or made, such other information or representations must not be relied upon as having been authorized by the fund or the Distributor. This prospectus and the related SAI do not constitute an offer by the fund or by the Distributor to sell shares of the fund to or to buy shares of the fund from any person to whom it is unlawful to make such offer.

#### Payments to intermediaries
Investors may purchase shares of the fund on an exchange through intermediaries (including any broker, intermediary, bank, bank trust department, registered investment advisor, financial planner, retirement plan administrator and any other institution that offers shares of the fund to its customers). In addition to distribution and service plans, the Investment Manager and its affiliates may make payments to intermediaries that do not increase your fund expenses, as described below.

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The Investment Manager and its affiliates also pay additional compensation to selected intermediaries in recognition of their marketing support and/or program servicing (each of which is described in more detail below). These payments may create an incentive for an intermediary firm or its representatives to recommend or offer shares of the fund or other Putnam funds to its customers. These additional payments are made by the Investment Manager and its affiliates and do not increase the amount paid by you or the fund as shown under Fund summary — Fees and expenses. The additional payments to intermediaries by the Investment Manager and its affiliates are generally based on one or more of the following factors: average net assets of a fund attributable to that intermediary, sales or net sales of a fund attributable to that intermediary, or reimbursement of ticket charges (fees that an intermediary firm charges its representatives for effecting transactions in fund shares), or on the basis of a negotiated lump sum payment for services provided.

Marketing support payments are generally available to most intermediaries engaging in significant sales of Putnam fund shares. These payments are individually negotiated with each intermediary firm, taking into account the marketing support services provided by the intermediary, including business planning assistance, educating intermediary personnel about the Putnam funds and shareholder financial planning needs, placement on the intermediary's preferred or recommended fund company list, access to sales meetings, sales representatives and management representatives of the intermediary, market data, as well as the size of the intermediary's relationship with the Investment Manager.

Program servicing payments, are paid in some instances to intermediaries in connection with investments in the fund through intermediary platforms and other investment programs. These payments are made for program or platform services provided by the intermediary, including shareholder recordkeeping, reporting, or transaction processing, as well as services rendered in connection with intermediary platform development and maintenance, fund/investment selection and monitoring, or other similar services.

You can find a list of all intermediaries to which the Investment Manager and its affiliates made marketing support and/ or program servicing payments in the SAI, which is on file with the SEC and is also available at www.franklintempleton.com. You can also find other details in the SAI about the payments made by the Investment Manager and its affiliates and the services provided by your intermediary. Your intermediary may charge you fees or commissions in addition to those

disclosed in this prospectus. You can also ask your intermediary about any payments it receives from the Investment Manager and its affiliates and any services your intermediary provides, as well as about fees and/or commissions it charges.

#### Other payments
The Investment Manager and its affiliates may make other payments (including payments in connection with educational seminars or conferences) or allow

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other promotional incentives to intermediaries to the extent permitted by SEC and NASD (as adopted by FINRA) rules and by other applicable laws and regulations.

Fund distributions and taxes

The fund earns dividends, interest, and other income from its investments, and distributes this income (less expenses) to shareholders as dividends. The fund also realizes capital gains from its investments and distributes these gains (less any losses) as capital gain distributions. If you purchased your shares in the secondary market, your broker is responsible for distributing the income and capital gain distributions to you. The fund normally distributes any net investment income monthly and any net realized capital gains annually.

For U.S. federal income tax purposes, distributions of net investment income are generally taxable to you as ordinary income. Taxes on distributions of capital gains are determined by how long the fund owned (or is deemed to have owned) the investments that generated them, rather than by how long you have owned (or are deemed to have owned) your shares. Distributions that the fund properly reports to you as gains from investments that the fund owned for more than one year are generally taxable to you as long-term capital gains includible in net capital gain and taxed to individuals at reduced rates. Distributions of gains from investments that the fund owned for one year or less and gains on the sale of or prepayment on bonds characterized as market discount are generally taxable to you as ordinary income. Distributions that the fund properly reports to you as "qualified dividend income" are taxable at the reduced rates applicable to your net capital gain provided that both you and the fund meet certain holding period and other requirements. Distributions are taxable in the manner described in this paragraph whether you receive them in cash or reinvest them in additional shares of the fund.

Distributions by the fund to retirement plans that qualify for tax-advantaged treatment under U.S. federal income tax laws will not be taxable. Special tax rules apply to investments through such plans. You should consult your tax advisor to determine the suitability of the fund as an investment through such a plan and the tax treatment of distributions (including distributions of amounts attributable to an investment in the fund) from such a plan. Distributions are taxable to you even if they are paid from income or gains earned by the fund before your investment (and thus were included in the price you paid). Contact your financial representative to find out the distribution schedule for your fund.

Investments in lower-rated securities may present special tax issues for the fund to the extent actual or anticipated defaults may be more likely with respect to those kinds of securities. Tax rules are not entirely clear about issues such as when an investor in such securities may cease to accrue interest, original issue discount, or market discount; when and to what extent deductions may be taken for bad debts or worthless securities; how payments received on obligations in default should be allocated between principal and income; and whether exchanges of debt obligations in a workout context are taxable.

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The fund's investments in certain debt obligations may cause the fund to recognize taxable income in excess of the cash generated by such obligations. Thus, the fund could be required at times to liquidate other investments, including when it is not advantageous to do so, in order to satisfy its distribution requirements.

The fund's investments in foreign securities may be subject to foreign withholding or other taxes. In that case, the fund's return on those investments would be decreased. If the fund meets certain requirements relating to its asset holdings, and the fund elects to pass through to its shareholders foreign tax credits or deductions, taxable shareholders generally will be entitled to claim a credit or deduction with respect to these foreign taxes. Even if the fund elects to pass through to its shareholders foreign tax credits or deductions, tax-exempt shareholders and those who invest in the fund through tax-advantaged accounts such as IRAs will not benefit from any such tax credit or deduction. In addition, the fund's investments in foreign securities or foreign currencies may increase or accelerate the fund's recognition of ordinary income and may affect the timing or amount of the fund's distributions.

The fund's use of derivatives, if any, may affect the amount, timing and character of distributions to shareholders and, therefore, may increase the amount of taxes payable by shareholders.

Any gain resulting from the sale of your shares generally also will be subject to tax. Any such gain or loss will be long term or short term depending on how long you have held your shares.

The above is a general summary of the tax implications of investing in the fund. Please refer to the SAI for further details. You should consult your tax advisor for more information on your own tax situation, including possible foreign, state and local taxes.

#### Other tax considerations
Unlike other ETFs, the securities exchanged for a creation unit will not correspond pro rata to the positions in the fund's portfolio, and the fund will effect its creations and redemptions partially or wholly for cash rather than on an in-kind basis. Because of this, the fund may be unable to realize certain tax benefits associated with in-kind transfers of portfolio securities that may be realized by other ETFs. Shareholders may be subject to tax on gains they would not otherwise have been subject to and/or at an earlier date than if the fund had effected redemptions wholly on an in-kind basis.

Authorized participants should consult their tax advisors about the U.S. federal, state, local and non-U.S. tax consequences of purchasing and redeeming creation units in the fund.

#### Information about the Summary Prospectus, Prospectus, and SAI
The summary prospectus, prospectus, and SAI for a fund provide information concerning the fund. The summary prospectus, prospectus, and SAI are updated at least annually and any information provided in a summary

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prospectus, prospectus, or SAI can be changed without a shareholder vote unless specifically stated otherwise. The summary prospectus, prospectus, and the SAI are not contracts between the fund and its shareholders and do not give rise to any contractual rights or obligations or any shareholder rights other than any rights conferred explicitly by federal or state securities laws that may not be waived.

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### Financial highlights
The financial highlights table is intended to help you understand the performance of the fund for the past five years, unless otherwise noted. Certain information reflects financial results for a single fund share. Total return represents the rate that an investor would have earned (or lost) on an investment in the fund, assuming reinvestment of all dividends and other distributions. Unless otherwise noted, this information has been audited by the fund's independent registered public accounting firm, PricewaterhouseCoopers, LLP, whose report, along with the fund's financial statements, are available on the fund's website and are included in the fund's Form N-CSR filed with the SEC, which is available upon request.

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**Financial highlights** 

(For a common share outstanding throughout the period)

---

| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp; **PER-SHARE OPERATING PERFORMANCE** |  |  |  |
|  | **Year ended** | **Year ended** | |
|  | **4/30/25** | **4/30/24** | **For the period<br>1/19/23<br>(commencement<br>of operations) to<br>4/30/23** |
| &nbsp;&nbsp;&nbsp; **Net asset value, beginning of period** | **$49.94** | **$49.92** | **$50.00** |
| &nbsp;&nbsp;&nbsp; **Investment operations:** |  |  |  |
| &nbsp;&nbsp;&nbsp; Net investment income (loss)<sup>a</sup> | 3.32 | 3.45 | .93 |
| &nbsp;&nbsp;&nbsp; Net realized and unrealized gain (loss) on investments | .60 | .29 | (.53) |
| &nbsp;&nbsp;&nbsp; **Total from investment operations** | **3.92** | **3.74** | **.40** |
| &nbsp;&nbsp;&nbsp; **Less distributions:** |  |  |  |
| &nbsp;&nbsp;&nbsp; From net investment income | (3.32) | (3.74) | (.54) |
| &nbsp;&nbsp;&nbsp; From return of capital |  | (.02) |  |
| &nbsp;&nbsp;&nbsp; **Total distributions** | **(3.32)** | **(3.76)** | **(.54)** |
| &nbsp;&nbsp;&nbsp; **Other capital** | **.07** | **.04** | **.06** |
| &nbsp;&nbsp;&nbsp; **Net asset value, end of period** | **$50.61** | **$49.94** | **$49.92** |
| &nbsp;&nbsp;&nbsp; **Total return at net asset value** (%)<sup>b</sup> | **8.16** | **7.87** | **0.93\*** |
| &nbsp;&nbsp;&nbsp; **RATIOS AND SUPPLEMENTAL DATA** |  |  |  |
| &nbsp;&nbsp;&nbsp; **Net assets, end of period** |  |  |  |
| &nbsp;&nbsp;&nbsp; **(in thousands)** | **$179675** | **$127334** | **$104842** |
| &nbsp;&nbsp;&nbsp; Ratio of expenses to average net assets (%)<sup>c,d</sup> | .53 | .53 | .15\* |
| &nbsp;&nbsp;&nbsp; Ratio of net investment income (loss)to average net assets (%)<sup>d</sup> | 6.51 | 6.93 | 1.88\* |
| &nbsp;&nbsp;&nbsp; Portfolio turnover (%)<sup>e</sup> | 36 | 47 | 10\* |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; \* Not annualized.<br>&nbsp;&nbsp;&nbsp;&nbsp;(a) Per share net investment income (loss) has been determined on the basis of the weighted average number of shares outstanding during the period.<br>&nbsp;&nbsp;&nbsp;&nbsp;(b) Total return assumes dividend reinvestment.<br>&nbsp;&nbsp;&nbsp;&nbsp;(c) Excludes acquired fund fees and expenses, if any.<br>&nbsp;&nbsp;&nbsp;&nbsp;(d) Reflects waivers of certain fund expenses in connection with investments in Putnam Government Money Market Fund during the period. As a result of such waivers, the expenses of the fund reflect a reduction of the following amounts:<br>

Prospectus 37

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---

| | |
|:---|:---|
|  | **Percentage of average<br>net assets** |
| April 30, 2025 | 0.02% |
| April 30, 2024 | 0.02 |
| April 30, 2023 | <0.01 |

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(e) Portfolio turnover excludes securities received or delivered in-kind, if any.

38 Prospectus

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#### For more information about Putnam ESG High Yield ETF
You can learn more about the fund in the following documents:

#### Annual/Semiannual Report to Shareholders and Form N-CSR Filed with the SEC
Contain additional information about the fund's investments. The fund's annual report also discusses the market conditions and investment strategies that significantly affected the fund's performance during its last fiscal year. In Form N-CSR, you will find the fund's annual and semi-annual financial statements.

#### Statement of Additional Information ("SAI")
Contains more information about the fund, its investments and policies. It is incorporated by reference (is legally a part of this prospectus).

For a free copy of the current annual/semiannual report, financial statements or the SAI, please contact your investment representative or call us at the number below. You also can view the current annual/semiannual report, financial statements and the SAI online through www.franklintempleton.com.

Reports and other information about the fund are available on the EDGAR Database on the SEC's Website at http://www.sec.gov, and copies of this information may be obtained, after paying a duplicating fee, by electronic request at the following email address: publicinfo@sec.gov.

Putnam Investments

100 Federal Street

Boston, MA 02110

1-800-225-1581

811-23643 39495-P 09/25

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![LOGO](g842776g5g0816184934069.jpg)

## Putnam

## ESG Ultra Short ETF

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| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp; **Prospectus**  | September 1, 2025 |

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 **Fund Symbol:** PULT **Principal U.S. Listing Exchange:** NYSE Arca, Inc.<br>

#### Investment Category: Taxable Income

#### This prospectus explains what you should know about this fund before you invest. Please read it carefully.
These securities have not been approved or disapproved by the Securities and Exchange Commission ("SEC") nor has the SEC passed upon the accuracy or adequacy of this prospectus. Any statement to the contrary is a crime.

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---

| | |
|:---|:---|
|  **Table of contents** |  |
|  [Fund summary](#pro60370_1) | 2 |
|  [Fund details](#pro60370_2) | 11 |
|  [Fund management](#pro60370_3) | 26 |
|  [Shareholder information](#pro60370_4) | 28 |
|  [Distribution plans and payments to intermediaries](#pro60370_5) | 32 |
|  [Fund distributions and taxes](#pro60370_6) | 34 |
|  [Financial highlights](#pro60370_7) | 37 |

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### Fund summary

#### Goal
The fund seeks as high a rate of current income as the Investment Manager (as defined below) believes is consistent with preservation of capital and maintenance of liquidity.

#### Fees and expenses
The following tables describe the fees and expenses you may pay if you buy, hold and sell shares of the fund. **You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.**

#### Annual Fund Operating Expenses

#### (expenses you pay each year as a percentage of the value of your investment)

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| | | | |
|:---|:---|:---|:---|
| **Management**<br> **fees** | **Distribution**<br> **and service (12b-1) fees** | **Other**<br> **expenses** | **&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total annual fund** <br> **&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;operating expenses**  |
| 0.25% |  | 0.00% | 0.25% |

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#### Example
The following hypothetical example is intended to help you compare the cost of investing in the fund with the cost of investing in other funds. It assumes that you invest $10,000 in the fund for the time periods indicated and then redeem all your shares at the end of those periods. It assumes a 5% return on your investment each year and that the fund's operating expenses remain the same. Your actual costs may be higher or lower.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | 1 year | 3 years | 5 years | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10 years |
| ESG Ultra Short ETF | $26 | $80 | $141 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$318 |

---

#### Portfolio turnover
The fund pays transaction-related costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher turnover rate may indicate higher transaction costs and may result in higher taxes when the fund's shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or the above example, affect fund performance. The fund's turnover rate in the most recent fiscal year was 48%.

### Investments, risks, and performance

#### Principal investment strategies
The fund invests in a diversified short duration portfolio of fixed-income securities comprised of investment-grade money market and other fixed-income securities, including U.S. dollar-denominated foreign securities of these

2 Prospectus

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types, with a focus on companies or issuers that the fund's Investment Manager, as defined below, believes meet relevant environmental, social or governance ("ESG") criteria on a sector-specific basis ("ESG criteria").

The fund's investments may include obligations of the U.S. government, its agencies and instrumentalities, which are backed by the full faith and credit of the United States (e.g., U.S. Treasury bonds and Ginnie Mae mortgage-backed bonds) or by only the credit of a federal agency or government-sponsored entity (e.g., Fannie Mae or Freddie Mac) mortgage-backed bonds), domestic corporate debt obligations, taxable municipal debt securities, securitized debt instruments (such as mortgage- and asset-backed securities), repurchase agreements, certificates of deposit, bankers acceptances, commercial paper (including asset-backed commercial paper), time deposits, Yankee Eurodollar securities and other money market instruments. The fund may also invest in U.S. dollar-denominated foreign securities of these types. Under normal circumstances, the effective duration of the fund's portfolio will generally not be greater than one year. Effective duration provides a measure of a fund's interest-rate sensitivity. The longer a fund's duration, the more sensitive the fund is to shifts in interest rates. Under normal circumstances, the dollar-weighted average portfolio maturity of the fund is not expected to exceed four years.

The Investment Manager may consider, among other factors, a company's or issuer's ESG criteria (as described below), credit, interest rate, liquidity and prepayment risks, as well as general market conditions, when deciding whether to buy or sell investments.

Under normal circumstances, the fund invests at least 80% of the value of its net assets in fixed-income securities that meet the Investment Manager's ESG criteria. This policy is non-fundamental and may be changed only after 60 days' notice to shareholders. The Investment Manager may not apply ESG criteria to investments that are not subject to the fund's 80% policy, and such investments may not meet the Investment Manager's ESG criteria. The fund will not necessarily sell an investment if it no longer meets the Investment Manager's ESG criteria after purchase, subject to compliance with the 80% policy.

In evaluating investments for the fund, the Investment Manager identifies relevant ESG criteria for specific sectors, subsectors or countries using an internally developed framework, which may take into account independent third-party ESG data. The Investment Manager identifies specific ESG criteria (i.e., quality of board, product safety and quality, workforce relations, lending criteria, emissions and waste management, energy efficiency, or governmental corruption, among others) and assigns a percentage weighting to those criteria based on the Investment Manager's assessment of which criteria are more or less important. The Investment Manager then categorizes the relevance of each ESG criterion and assigns each criterion a percentage weighting. As part of this analysis, the Investment Manager may utilize metrics and information such as emissions data, carbon intensity, sources of energy used for operations, renewable energy consumption, water use and re-use, waste

Prospectus 3

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diversion from landfill, employee safety and diversity data, FICO credit scores and income statistics for borrowers, supplier audits, product safety, board composition, or the Global Peace Index. After evaluating these criteria and applying the established weightings, the Investment Manager will assign each company, issuer or country, as applicable, a proprietary ESG rating ranging from a 5.0 to a 1.0, with 5.0 indicating the highest (best) ESG rating and 1.0 indicating the lowest (worst) ESG rating. In order to meet the Investment Manager's ESG criteria for purposes of the above-referenced non-fundamental investment policy, a company or issuer must generally be rated 2.5 or above by the Investment Manager.

For corporate credit (i.e., investment grade-rated and below investment grade-rated securities), the Investment Manager also applies a momentum factor in determining the ESG rating of a company or issuer based on the Investment Manager's view of whether the performance of the company or issuer under the relevant ESG criteria is expected to improve or decline. If an issuer is rated 2.0 or above and has a positive momentum factor, a company or issuer will be viewed as meeting the Investment Manager's criteria for purposes of the above-referenced non-fundamental policy. Conversely, if an issuer has a negative momentum factor, it will be viewed as meeting the Investment Manager's criteria for purposes of the above-referenced non-fundamental policy only if it is rated a 3.0 or above.

While the Investment Manager may consider independent third-party data as a part of its analytical process, the portfolio management team performs its own independent analysis of issuers and does not rely solely on third-party screens.

The fund's approach to ESG investing incorporates fundamental research together with consideration of ESG criteria which may include, but are not limited to, those included in the following descriptions. Environmental criteria include, for example, a company's or issuer's carbon intensity and use of resources like water or minerals. ESG measures in this area might include plans to reduce waste, increase recycling, raise the proportion of energy supplied from renewable sources, reduce greenhouse gas emissions per capita or improve product design to be less resource intensive. Social criteria include, for example, labor practices, supply chain management, and community relations. ESG measures in this area might include programs to improve employee well-being, commitment to workplace equality and diversity, or improved stewardship of supplier relationships and working conditions, lending to underserved populations, or the degree of universal health coverage. Governance criteria include, for example, board composition, executive compensation, and debt structures that improve transparency and bondholders' rights. ESG measures in this area might include improvements in board independence or diversity, alignment of governmental or management incentives with appropriate strategic ESG objectives, and disclosure of operating and ESG metrics to bondholders.

In the corporate credit sector, the Investment Manager combines fundamental analysis with relevant ESG insights with a forward-looking perspective. The

4 Prospectus

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investment manager believes that this approach contributes to a more nuanced assessment of an issuer's credit profile.

The Investment Manager believes that securitized debt instruments present unique challenges in applying ESG criteria due to the presence of various asset types, counterparties involved, and the complex structure of the securitized debt market along with a lack of available ESG-related data. In evaluating securitized debt instruments for potential investment, the Investment Manager takes a broad approach, analyzing both the terms of the transaction, including the asset type being securitized, the terms of the transaction, the structure of the securitization, as well as key counterparties. Opportunities are analyzed at the asset level within each securitization and each subsector to identify assets that meet relevant ESG thresholds. Additionally, in evaluating securitized debt instruments, the Investment Manager analyzes relevant ESG criteria regarding the originator, servicers, or other relevant counterparties.

In the sovereign debt sector, the Investment Manager uses quantitative modeling and fundamental research to evaluate countries across a variety of ESG criteria (i.e., natural resource dependence and level of public corruption) and non-ESG criteria (i.e., global economic conditions, market valuations, and technical factors). The Investment Manager believes that sovereign issuers with better ESG scores generally benefit from lower borrowing costs and that ESG criteria may influence the perception of the credit risk of a country's debt.

The Investment Manager evaluates ESG considerations using independent third-party data (where available) and also uses company or issuer disclosures and public data sources. The Investment Manager believes that ESG considerations are best analyzed in combination with a company's or issuer's fundamentals, including a company's or issuer's industry, location, strategic position, and key relationships.

#### Risks
It is important to understand that you can lose money by investing in the fund.

**ESG investing risk** **:** Investing with a focus on companies or issuers that meet the Investment Manager's ESG criteria may result in the fund investing in certain types of companies, issuers, industries or sectors that the market may not favor. Conversely, investing in such companies or issuers may result in the fund foregoing investment in securities that outperform the fund's investments in certain environments. In evaluating an investment opportunity, the Investment Manager may make investment decisions without the availability of optimal ESG-related data (which may be even less available with securitized debt instruments) or based on information and data that is incomplete or inaccurate. ESG metrics are not uniformly defined and applying such metrics involves subjective assessments. ESG scorings and assessments of issuers can vary across third-party data providers and may change over time. The Investment Manager does not rely exclusively on third-party data providers in evaluating ESG criteria. ESG information from third-party data providers may be incomplete, inaccurate or unavailable, particularly with respect to

Prospectus 5

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companies in emerging market countries, which may adversely impact the investment process. The fund does not restrict its investments to "green bonds" (*i.e.,* U.S. dollar-denominated bonds designated as "green" by the Climate Bonds Initiative) and does not restrict investments based solely on "negative screens". In addition, a company's or issuer's business practices, products or services may change over time. As a result of these possibilities, among others, the fund may temporarily hold securities that are inconsistent with the fund's ESG investment criteria. Regulatory changes or interpretations regarding the definitions and/or use of ESG criteria could have a material adverse effect on the fund's ability to invest in accordance with its investment policies and/or achieve its investment objective, as well as the ability of certain classes of investors to invest in funds, such as the fund, whose strategies include ESG criteria. Because fixed-income investments generally represent a promise to pay principal and interest by an issuer, and not an ownership interest, and may involve complex structures, ESG-related investment considerations may have a more limited impact on risk and return (or may have an impact over a different investment time horizon) relative to other asset classes, and this may be particularly true for shorter-term investments. In addition, holders of fixed-income investments do not typically have voting rights, unlike holders of equity investments who have the right to vote on issuer proposals, including ESG-related proposals.

**Model risk** **:** If the quantitative models or data that are used in managing the fund prove to be incorrect or incomplete, investment decisions made in reliance on the models or data may not produce the desired results and the fund may realize losses. Additionally, market movements are likely to change the risk levels and risk allocations of the fund. Investments made based on quantitative models may perform differently from the market as a whole.

**Fluctuation of** **net asset value and share price risk** **:** Shares may trade at a larger premium or discount to the fund's net asset value than shares of other ETFs. The net asset value of the fund will generally fluctuate with changes in the market value of the fund's holdings. The fund's shares can be bought and sold in the secondary market at market prices. Disruptions to creations and redemptions, the existence of extreme market volatility or potential lack of an active trading market for the fund's shares may result in the fund's shares trading significantly above (at a premium) or below (at a discount) net asset value or the intraday value of the fund's holdings. In addition, in stressed market conditions or periods of market disruption or volatility, the market for fund shares may become less liquid in response to deteriorating liquidity in the markets for the fund's underlying portfolio holdings.

**Trading issues risk** **:** The fund has a limited public trading history. There can be no assurance that an active trading market will develop or be maintained or that the market for fund shares will operate as intended, which could lead to the fund's shares trading at wider spreads and larger premiums and discounts to net asset value than other actively managed ETFs. As a result, it may cost investors more to trade fund shares than shares of other ETFs. There is no guarantee that the fund will be able to attract market makers and authorized

6 Prospectus

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participants. Market makers and authorized participants are not obligated to make a market in the fund's shares or to submit purchase and redemption orders for creation units. The market prices of the fund's shares are expected to fluctuate, in some cases materially, in response to changes in the fund's net asset value, the intraday value of the fund's holdings and supply and demand for the fund's shares. The Investment Manager cannot predict whether the fund's shares will trade above, below or at their net asset value or the intraday value of the fund's holdings. During such periods, investors may incur significant losses if they sell shares.

The securities held by the fund may be traded in markets that close at a different time than the exchange on which the fund's shares are listed. Liquidity in those securities may be reduced after the applicable closing times. Accordingly, during the time when the exchange is open but after the applicable market closing, fixing or settlement times, bid-ask spreads on the exchange and the corresponding premium or discount to the shares' net asset value may widen.

**Large shareholder transaction risk:** The fund is subject to the risk that shareholders will purchase or redeem large quantities of shares of the fund. The fund may be an investment option for mutual funds that are managed by the Investment Manager, as defined below, and its affiliates as "funds of funds." Additionally, other investors from time to time may make substantial investments in the fund. Such shareholders may at times be considered to control the fund. In addition, a large number of shareholders may collectively purchase or redeem fund shares in large amounts rapidly or unexpectedly. Large shareholder transactions may adversely affect the fund's liquidity and net assets. These redemptions may also adversely affect the fund's performance if the fund is forced to sell securities, which may also increase the fund's brokerage costs.

**Authorized participant concentration risk** **:** Only an authorized participant may engage in creation and redemption transactions directly with the fund. The fund may have a limited number of financial institutions that act as authorized participants, none of which are obligated to engage in creation and/or redemption transactions. To the extent that those authorized participants do not engage in creation and redemption orders, there may be a significantly diminished trading market for fund shares or fund shares may trade at a discount (or premium) to net asset value and possibly face trading halts and/or de-listing.

**Cash transactions risk** **:** Unlike certain ETFs, the fund may effect creations and redemptions in cash or partially in cash. Therefore, it may be required to sell portfolio securities and subsequently recognize gains on such sales that the fund might not have recognized if it were to distribute portfolio securities in-kind. As such, investments in the fund's shares may be less tax-efficient than an investment in an ETF that distributes portfolio securities entirely in-kind.

**Market risk** **:** The effects of inflation may erode the value of an investment in the fund over time. The value of investments in the fund's portfolio may fall or

Prospectus 7

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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, outbreaks of infectious illnesses or other widespread public health issues, and factors related to a specific issuer, asset class, geography, industry or sector. These and other factors may lead to increased volatility and reduced liquidity in the fund's portfolio holdings, may negatively impact the fund's performance, and may exacerbate other risks to which the fund is subject.

**Fixed** **income investments risk** **:** The risks associated with fixed income investments include interest rate risk, which is the risk that the value of the fund's investments is likely to fall if interest rates rise. To the extent that the fund holds floating rate loans, interest rate risk may be reduced but will not be eliminated. Fixed income investments are also subject to credit risk, which is the risk that issuers of the fund's investments may default on payment of interest or principal. Credit risk is generally greater for debt not backed by the full faith and credit of the U.S. government. Fixed income investments may be more susceptible to downgrades or defaults during economic downturns or other periods of economic stress. Interest rate risk is generally greater for longer-term bonds, and credit risk is generally greater for below-investment-grade bonds (sometimes referred to as "junk bonds"), which can be more sensitive to changes in markets, credit conditions, and interest rates, and may be considered speculative. While floating rate loans are normally secured by specific collateral or assets of the issuer (so that holders of the loans, such as the fund, will have a priority claim on those assets in the event of default or bankruptcy of the issuer), the value of collateral may be insufficient to meet the issuer's obligations, and the fund's access to collateral may be limited by bankruptcy or other insolvency laws. The settlement period (the period between the execution of the trade and the delivery of cash to the purchaser) for floating rate loan transactions is typically longer than seven days, and it is possible that sale proceeds from floating rate loan transactions will not be available to meet redemption obligations. Mortgage-backed investments, unlike traditional debt investments, are also subject to prepayment risk, which means that they may increase in value less than other bonds when interest rates decline and decline in value more than other bonds when interest rates rise. The fund may have to invest the proceeds from prepaid investments, including mortgage-backed investments, in other investments with less attractive terms and yields. The fund's investments in mortgage-backed securities, and in certain other securities and derivatives, may be or become illiquid.

**Derivatives risk** **:** The fund's use of derivatives may increase the risks of investing in the fund by increasing investment exposure (which may be considered leverage) or, in the case of many over-the-counter instruments, because of the potential inability to terminate or sell derivative positions and the potential failure of the other party to the instrument to meet its obligations. The risk of a party failing to meet its obligations may increase if the fund has significant exposure to that counterparty. The value of derivatives may move in unexpected ways due to unanticipated market movements, the use of leverage, imperfect correlation between the derivative instrument and the

8 Prospectus

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reference asset, or other factors, especially in unusual market conditions, and volatility in the value of derivatives could adversely impact the fund's returns, obligations and exposures. Derivatives are also subject to other risks, including liquidity risk (e.g., liquidity demands arising from the requirement to make payments to a derivative counterparty), operational risk (e.g., settlement issues or system failures) and legal risk (e.g., insufficient legal documentation or contract enforceability issues).

**Portfolio turnover rate** **:** The fund's portfolio turnover rate measures how frequently the fund buys and sells investments. A portfolio turnover rate of 100%, for example, would mean that the fund sold and replaced securities valued at 100% of the fund's assets within a one-year period. From time to time the fund may engage in frequent trading. Funds with high turnover may be more likely to realize capital gains that must be distributed to shareholders as taxable income. High turnover may also cause a fund to pay more brokerage commissions and other transaction costs (including imputed transaction costs), which may detract from performance. The fund's portfolio turnover rate and the amount of brokerage commissions it pays and transaction costs it incurs will vary over time based on market conditions.

**Management and operational risk** **:** There is no guarantee that the investment techniques, analyses, or judgments that the Investment Manager applies in making investment decisions for the fund will produce the intended outcome or that the investments selected for the fund will perform as well as other securities that were not selected for the fund. The Investment Manager, or the fund's other service providers, may experience disruptions or operating errors that could negatively impact the fund.

The fund may not achieve its goal, and it is not intended to be a complete investment program. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

### Performance
The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund's performance from year to year. The table shows the average annual total returns of the fund and also compares the fund's performance with the average annual total returns of a broad measure of market performance and an additional index with characteristics relevant to the fund. The fund makes updated performance information, including its current net asset value per share, available at www.franklintempleton.com.

*The fund's past performance (before and after taxes) is not necessarily an indication of how the fund will perform in the future.* 

Prospectus 9

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Annual total returns

![LOGO](g842776g5g0816184934390.jpg)

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| | | |
|:---|:---|:---|
|  Best Quarter: | Q3 2024 | 1.84% |
|  Worst Quarter: | Q4 2024 | 1.07% |
|  As of June 30, 2025, the fund's year-to-date return was 2.51%. | As of June 30, 2025, the fund's year-to-date return was 2.51%. | As of June 30, 2025, the fund's year-to-date return was 2.51%. |

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#### Average annual total returns
(for periods ended 12/31/24)

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| | | |
|:---|:---|:---|
|  **ESG Ultra Short ETF** | **1 year** | **Since** <br> **Inception<sup>1</sup>**  |
|  Return before taxes | 5.91% | 5.83% |
|  Return after taxes on distributions | 3.61% | 3.58% |
|  Return after taxes on distributions and sales of fund shares | 3.46% | 3.49% |
|  Bloomberg U.S. Aggregate Index (no deduction for fees, expenses or taxes) | 1.25% | 1.71% |
|  ICE BofA U.S. Treasury Bill Index (no deduction for fees, expenses or taxes) | 5.29% | 5.23% |
|  <sup>1.</sup> Since inception January 19, 2023. |  |  |

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After-tax returns reflect the historical highest individual federal marginal income tax rates and do not reflect state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. These after-tax returns do not apply if you hold your fund shares through a 401(k) plan, an IRA, or another tax-advantaged arrangement.

Important data provider notices and terms are available at www.franklintempletondatasources.com. All data is subject to change.

### Your fund's management

#### Investment Manager
Franklin Advisers, Inc. ("Franklin Advisers" or the "Investment Manager")

#### Sub-advisors
Putnam Investment Management, LLC ("Putnam Management")

Franklin Templeton Investment Management Limited ("FTIML")

10 Prospectus

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#### Portfolio managers
**Andrew C. Benson** 

Portfolio Manager of Franklin Advisers and portfolio manager of the fund since 2023.

**Joanne M. Driscoll, CFA** 

Portfolio Manager of Franklin Advisers and portfolio manager of the fund since 2023.

**Michael J. Lima, CFA** 

Portfolio Manager of Franklin Advisers and portfolio manager of the fund since 2023.

#### Purchase and sale of fund shares
Shares of the fund are listed and traded on an exchange, and individual fund shares may only be bought and sold in the secondary market through a broker or dealer at market price. These transactions, which do not involve the fund, are made at market prices that may vary throughout the day, rather than at net asset value. Shares of the fund may trade at a price greater than the fund's net asset value (premium) or less than the fund's net asset value (discount). An investor may incur costs attributable to the difference between the highest price a buyer is willing to pay to purchase shares (bid) and the lowest price a seller is willing to accept for shares (ask) when buying or selling fund shares in the secondary market (the "bid-ask spread"). Recent information, including information regarding the fund's net asset value, market price, premiums and discounts, and bid-ask spread, is available at www.franklintempleton.com.

#### Tax information
The fund's distributions will be taxed as ordinary income or capital gains unless you hold the shares through a tax-advantaged arrangement, in which case you will generally be taxed only upon withdrawal of monies from the arrangement.

#### Financial intermediary compensation
If you purchase the fund through a broker/dealer or other financial intermediary (such as a bank or financial professional), the fund and its related companies may pay that intermediary for the sale of fund shares and related services. Please bear in mind that these payments may create a conflict of interest by influencing the broker/dealer or other intermediary to recommend the fund over another investment. Ask your advisor or visit your advisor's website for more information.

### Fund details

#### Principal investment strategies
The fund invests in a diversified short duration portfolio of fixed-income securities comprised of investment-grade money market and other fixed-

Prospectus 11

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income securities with a focus on companies or issuers that the fund's Investment Manager believes meet relevant ESG criteria.

The fund's investments may include obligations of the U.S. government, its agencies and instrumentalities, which are backed by the full faith and credit of the United States (e.g., U.S. Treasury bonds and Ginnie Mae mortgage-backed bonds) or by only the credit of a federal agency or government-sponsored entity (e.g., Fannie Mae or Freddie Mac mortgage-backed bonds), domestic corporate debt obligations, taxable municipal debt securities, securitized debt instruments (such as mortgage- and asset-backed securities), repurchase agreements, certificates of deposit, bankers acceptances, commercial paper (including asset-backed commercial paper), time deposits, Yankee Eurodollar securities and other money market instruments. The fund may also invest in U.S. dollar-denominated foreign securities of these types. Under normal circumstances, the effective duration of the fund's portfolio will generally not be greater than one year. Effective duration provides a measure of a fund's interest-rate sensitivity. The longer a fund's duration, the more sensitive the fund is to shifts in interest rates. Under normal circumstances, the dollar-weighted average portfolio maturity of the fund is not expected to exceed four years.

The Investment Manager may consider, among other factors, a company's or issuer's ESG criteria (as described below), credit, interest rate, liquidity and prepayment risks, as well as general market conditions, when deciding whether to buy or sell investments.

Under normal circumstances, the fund invests at least 80% of the value of its net assets in fixed-income securities that meet the Investment Manager's ESG criteria. This policy is non-fundamental and may be changed only after 60 days' notice to shareholders. The Investment Manager may not apply ESG criteria to investments that are not subject to the fund's 80% policy and such investments may not meet the Investment Manager's ESG criteria. The fund will not necessarily sell an investment if it no longer meets the Investment Manager's ESG criteria after purchase, subject to compliance with the 80% policy.

In evaluating investments for the fund, the Investment Manager identifies relevant ESG criteria for specific sectors, subsectors or countries using an internally developed framework, which may take into account independent third party ESG data. The Investment Manager identifies specific ESG criteria (i.e., quality of board, product safety and quality, workforce relations, lending criteria, emissions and waste management, energy efficiency, or governmental corruption, among others) and assigns a percentage weighting to those criteria based on the Investment Manager's assessment of which criteria are more or less important. The Investment Manager then categorizes the relevance of each ESG criteria and assigns each criterion a percentage weighting. As part of this analysis, the Investment Manager may utilize metrics and information such as emissions data, carbon intensity, sources of energy used for operations, renewable energy consumption, water use and re-use, waste diversion from landfill, employee safety and diversity data, FICO credit scores

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and income statistics for borrowers, supplier audits, product safety, board composition, or the Global Peace Index. After evaluating these criteria and applying the established weightings, the Investment Manager will assign each company, issuer or country, as applicable, a proprietary ESG rating ranging from a 5.0 to a 1.0 with 5.0 indicating the highest (best) ESG rating and 1.0 indicating the lowest (worst) ESG rating. In order to meet the Investment Manager's ESG criteria for purposes of the above-referenced non-fundamental investment policy, a company or issuer must generally be rated 2.5 or above by the Investment Manager.

For corporate credit (i.e., investment grade-rated and below investment grade-rated securities), the Investment Manager also applies a momentum factor in determining the ESG rating of a company or issuer based on the Investment Manager's view of whether the performance of the company or issuer under the relevant ESG criteria is expected to improve or decline. If an issuer is rated 2.0 or above and has a positive momentum factor, a company or issuer will be viewed as meeting the Investment Manager's criteria for purposes of the above-referenced non-fundamental policy. Conversely, if an issuer has a negative momentum factor, it will be viewed as meeting the Investment Manager's criteria for purposes of the above-referenced non-fundamental policy only if it's rated a 3.0 or above.

While the Investment Manager may consider independent third-party data as a part of its analytical process, the portfolio management team performs its own independent analysis of issuers and does not rely solely on third-party screens.

The fund's approach to ESG investing incorporates fundamental research together with consideration of ESG criteria which may include, but are not limited to, those included in the following descriptions. Environmental criteria include, for example, a company's or issuer's carbon intensity and use of resources like water or minerals. ESG measures in this area might include plans to reduce waste, increase recycling, raise the proportion of energy supplied from renewable sources, greenhouse gas emissions per capita or improve product design to be less resource intensive. Social criteria include, for example, labor practices, supply chain management, and community relations. ESG measures in this area might include programs to improve employee well-being, commitment to workplace equality and diversity, or improved stewardship of supplier relationships and working conditions, lending to underserved populations, or the degree of universal health coverage. Governance criteria include, for example, board composition, executive compensation, debt structures that improve transparency and bondholders' rights. ESG measures in this area might include improvements in board independence or diversity, alignment of governmental or management incentives with appropriate strategic ESG objectives, and disclosure of operating and ESG metrics to bondholders.

In the corporate credit sector, the Investment Manager combines fundamental analysis with relevant ESG insights with a forward-looking perspective. The Investment Manager believes that this approach contributes to a more nuanced assessment of an issuer's credit profile.

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The Investment Manager believes that securitized debt instruments present unique challenges in applying ESG criteria due to the presence of various asset types, counterparties involved, and the complex structure of the securitized debt market along with a lack of available ESG-related data. In evaluating securitized debt instruments for potential investment, the Investment Manager takes a broad approach, analyzing both the terms of the transaction, including the asset type being securitized, the terms of the transaction, structure of the securitization, as well as key counterparties. Opportunities are analyzed at the asset level within each securitization and each subsector to identify assets that meet relevant ESG thresholds. Additionally, in evaluating securitized debt instruments, the Investment Manager analyzes relevant ESG criteria regarding the originator, servicers, or other relevant counterparties.

In the sovereign debt sector, the Investment Manager uses quantitative modeling and fundamental research to evaluate countries across a variety of ESG criteria (i.e., natural resource dependence and level of public corruption) and non-ESG criteria (i.e., global economic conditions, market valuations, and technical factors. The Investment Manager believes that sovereign issuers with better ESG scores generally benefit from lower borrowing costs and that ESG criteria may influence the perception of the credit risk of a country's debt.

The Investment Manager evaluates ESG considerations using independent third-party data (where available), and also uses company or issuer disclosures and public data sources. The Investment Manager believes that ESG considerations are best analyzed in combination with a company's or issuer's fundamentals, including a company's or issuer's industry, location, strategic position, and key relationships.

In addition to bonds, the fund may also invest in other fixed-income instruments, including loans. In addition to the main investment strategies described above, the fund may make other types of investments, such as investments in hybrid and structured bonds and notes, and preferred securities that would be characterized as debt securities under applicable accounting standards and tax laws. The fund may also use derivatives, such as futures, options, and credit default, total return and interest rate swap contracts, for both hedging and non-hedging purposes although they do not represent a primary focus of the fund.

Shareholders should be aware that investments made by the fund and results achieved by the fund at any given time are not expected to be the same as those made by other funds for which the Investment Manager acts as investment manager, including funds with names, investment objectives, and policies that are similar to the fund. The Trustees may change the fund's goal, investment strategies and other policies set forth in this prospectus without shareholder approval, except as otherwise provided in the prospectus or Statement of Additional Information.

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#### Principal investment risks
The principal and certain additional risks of investing in the fund are described below. These risks and other factors may adversely affect the fund's net asset value, market price and performance. When you sell your shares, they may be worth more or less than what you paid for them, which means that you could lose money as a result of your investment. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund may not achieve its investment objective, and it is not intended to be a complete investment program. The fund's Statement of Additional Information ("SAI") contains additional information about the fund's investment policies and risks.

**ESG investing risk** **:** Investing with a focus on companies or issuers that meet the Investment Manager's ESG criteria may result in the fund investing in certain types of companies, issuers, industries or sectors that the market may not favor. Conversely, investing in such companies or issuers may result in the fund foregoing investment in securities that outperform the fund's investments in certain environments. In evaluating an investment opportunity, the Investment Manager may make investment decisions without the availability of optimal ESG-related data (which may be even less available with securitized debt instruments) or based on information and data that is incomplete or inaccurate. ESG criteria are not uniformly defined and applying such factors involves subjective assessments. ESG scorings and assessments of issuers can vary across third-party data providers and may change over time. The Investment Manager does not rely exclusively on third-party data providers in evaluating ESG criteria. ESG information from third-party data providers may be incomplete, inaccurate or unavailable, particularly with respect to companies in emerging market countries, which may adversely impact the investment process. The fund does not restrict its investments to "green bonds" (*i.e.,* U.S. dollar-denominated bonds designated as "green" by the Climate Bonds Initiative) and does not restrict investments based solely on "negative screens". In addition, a company's or issuer's business practices, products or services may change over time. As a result of these possibilities, among others, the fund may temporarily hold securities that are inconsistent with the fund's ESG investment criteria. Regulatory changes or interpretations regarding the definitions and/or use of ESG criteria could have a material adverse effect on the fund's ability to invest in accordance with its investment policies and/or achieve its investment objective, as well as the ability of certain classes of investors to invest in funds, such as the fund, whose strategies include ESG criteria. There may be limitations with respect to availability of ESG data in certain sectors, as well as limited availability of investments with positive ESG assessments in certain sectors. The Investment Manager's evaluation of ESG criteria may change over time.

Because fixed-income investments generally represent a promise to pay principal and interest by an issuer, and not an ownership interest, and may involve complex structures, ESG-related investment considerations may have a more limited impact on risk and return (or may have an impact over a

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different investment time horizon) relative to other asset classes, and this may be particularly true for shorter-term investments. Third-party ESG data regarding fixed-income investments is generally less available than ESG data for equity investments. In addition, holders of fixed-income investments do not typically have voting rights, unlike holders of equity investments who have the right to vote on issuer proposals.

**Model risk** **:** The Investment Manager uses proprietary models and data supplied by third parties. The fund uses models and data to, among other things, identify and assess trends and market opportunities and provide risk management insights. The fund regularly enhances and updates its models to reflect developing research, fundamental analysis, and access to new data.

If the quantitative models or data used in managing the fund prove to be incorrect or incomplete, investment decisions made in reliance on the models or data may not produce the desired results and may cause the fund to underperform its benchmark or other funds with a similar investment goal, and the fund may realize losses. In addition, models may incorrectly forecast future behavior, leading to potential losses. Use of these models in unforeseen or certain low-probability scenarios (often involving a market disruption of some kind) also may result in losses for the fund.

All models require data. Some of the models that the fund may use are typically constructed based on historical data, and the success of these models is dependent largely on the accuracy and reliability of the supplied historical data. If incorrect data is entered into a model, the resulting output will be incorrect.

**Fluctuation of** **net asset value and share price risk** **:** Shares may trade at a larger premium or discount to net asset value than shares of other ETFs. The net asset value of the fund's shares will generally fluctuate with changes in the market value of the fund's holdings. The fund's shares are listed on an exchange and can be bought and sold in the secondary market at market prices. The market prices of shares will fluctuate in accordance with changes in net asset value and supply and demand on the listing exchange. Although the arbitrage process is designed to permit the shares of the fund to trade at market prices that are at or close to net asset value, it is possible that the market price and net asset value will vary significantly. As a result, you may sustain losses if you pay more than the shares' net asset value when you purchase shares or receive less than the shares' net asset value when you sell shares, in the secondary market. During periods of disruptions to creations and redemptions, the existence of extreme market volatility, or lack of an active trading market for the fund's shares, the market price of fund shares is more likely to differ significantly from the fund's net asset value or the intraday value of the fund's holdings. During such periods, you may be unable to sell your shares or may incur significant losses if you sell your shares. There are various methods by which investors can purchase and sell shares and various orders that may be placed. Investors should consult their financial intermediary before purchasing or selling shares of the fund. Disruptions at market makers, authorized participants or market participants may also result in significant

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differences between the market price of the fund's shares and the fund's net asset value. In addition, in stressed market conditions or periods of market disruption or volatility, the market for shares may become less liquid in response to deteriorating liquidity in the markets for the fund's underlying portfolio holdings.

The market price of shares during the trading day, like the price of any exchange-traded security, includes a "bid/ask" spread charged by the exchange specialist, market makers, or other participants that trade the particular security. In times of severe market disruption or volatility, the bid/ask spread can increase significantly. At those times, shares are most likely to be traded at a discount to net asset value, and the discount is likely to be greatest when the price of shares is falling fastest, which may be the time that you most want to sell your shares.

**Trading issues risk** **:** The fund has a limited public trading history. Although shares are listed on an exchange, there can be no assurance that an active trading market or requirements to remain listed will be met or maintained, or that the market for fund shares will operate as intended. If the market does not operate as intended, it could lead to the fund's shares trading at wider spreads and larger premiums and discounts to net asset value than other actively managed ETFs, particularly during periods of market disruption or volatility. As a result, it may cost investors more to trade fund shares than shares of other ETFs.

There is no guarantee that the fund will be able to attract market makers and authorized participants. There are no obligations of market makers to make a market in the fund's shares or of authorized participants to submit purchase or redemption orders for creation units.

The market prices of the fund's shares are expected to fluctuate, in some cases materially, in response to changes in the fund's net asset value, the intraday value of the fund's holdings and supply and demand for the fund's shares. The Investment Manager cannot predict whether the fund's shares will trade above, below or at their net asset value or the intraday value of the fund's holdings. During such periods, investors may incur significant losses if they sell shares.

The securities held by the fund may be traded in markets that close at a different time than the exchange on which the fund's shares are listed. Liquidity in those securities may be reduced after the applicable closing times. Accordingly, during the time when the exchange is open but after the applicable market closing, fixing or settlement times, bid-ask spreads on the exchange and the corresponding premium or discount to the shares' net asset value may widen.

In addition, trading of shares in the secondary market may be halted, for example, due to activation of market-wide "circuit breakers." If trading halts or an unanticipated early closing of the listing exchange occurs, a shareholder may be unable to purchase or sell shares of the fund.

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If the fund's shares are delisted from the listing exchange, the Investment Manager may seek to list the fund shares on another market, merge the fund with another exchange-traded fund or traditional mutual fund, or redeem the fund shares at net asset value.

Shares of the fund, similar to shares of other issuers listed on a stock exchange, may be sold short and are therefore subject to the risk of increased volatility and price decreases associated with being sold short.

**Large shareholder transaction risk:** The fund is subject to the risk that shareholders will purchase or redeem large quantities of shares of the fund (such purchases or redemptions, "large shareholder transactions"). The fund may be an investment option for mutual funds that are managed by the Investment Manager and its affiliates as "funds of funds." Additionally, other investors from time to time may make substantial investments in the fund. Such shareholders may at times be considered to control the fund. In addition, a large number of shareholders collectively may purchase or redeem fund shares in large amounts rapidly or unexpectedly. A number of circumstances may cause the fund to experience large shareholder transactions, such as changes in the eligibility criteria for the fund; liquidations, reorganizations, repositionings, or other announced fund events; or changes in investment objectives, strategies, policies, risks, or investment personnel. Large redemptions may be more likely during times of market stress or reduced liquidity, exacerbating the potential impact on the fund.

Large shareholder transactions may adversely affect the fund's liquidity and net assets. These transactions could adversely affect the fund's performance if the fund is forced to sell portfolio securities to satisfy redemption requests or purchase securities for the portfolio in connection with the investment of subscription proceeds when the fund would otherwise not do so, and at unfavorable prices, which may increase the fund's brokerage costs and accelerate the realization of taxable income and/or gains to shareholders. The effects of taxable income and/or gains resulting from large shareholder transactions would particularly impact non-redeeming shareholders who do not hold their fund shares in an IRA, 401(k) plan or other tax-advantaged plan. To the extent that such transactions result in short-term capital gains, such gains will generally be taxed at the ordinary income tax rate for shareholders who hold fund shares in a taxable account. In addition, fund returns also may be adversely affected if the fund holds a portion of its assets in liquid, cash-like investments in connection with or in anticipation of shareholder redemptions.

**Authorized participant concentration risk** **:** Only authorized participants may engage in creation and redemption transactions directly with the fund. The fund may have a limited number of financial institutions that act as authorized participants, none of which are obligated to engage in creation and/or redemption transactions. Decisions by market makers or authorized participants to reduce their role with respect to market making or creation and redemption activities during times of market stress, or a decline in the number of authorized participants due to decisions to exit the business, bankruptcy, or other factors, could inhibit the effectiveness of the arbitrage process in

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maintaining the relationship between the underlying value of the fund's portfolio securities and the market price of fund shares. To the extent no other authorized participants are able to step forward to create or redeem, shares may trade at a discount (or premium) to net asset value and possibly face delisting.

**Cash transactions risk** **:** Unlike certain ETFs, the fund may effect creations and redemptions in cash or partially in cash. Therefore, it may be required to sell portfolio securities and subsequently recognize gains on such sales that the fund might not have recognized if it were to distribute portfolio securities in-kind. As such, investments in the fund's shares may be less tax-efficient than an investment in an ETF that distributes portfolio securities entirely in-kind.

**Market risk** **:** The effects of inflation may erode the value of an investment in the fund over time. 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 (including perceptions about monetary policy, interest rates, inflation or the risk of default); government actions (including protectionist measures, intervention in the financial markets or other regulation, and changes in fiscal, monetary or tax policies); geopolitical events or changes (including natural disasters, terrorism and war); outbreaks of infectious illnesses or other widespread public health issues (including epidemics and pandemics); and factors related to a specific issuer, asset class, geography, industry, or sector. Foreign financial markets have their own market risks, and they may be more or less volatile than U.S. markets and may move in different directions. During a general downturn in financial markets, multiple asset classes may decline in value simultaneously. These and other factors may lead to increased volatility and reduced liquidity in the fund's portfolio holdings. During those periods, the fund may experience high levels of shareholder redemptions, and may have to sell securities at times when it would otherwise not do so, and at unfavorable prices. These risks may be exacerbated during economic downturns or other periods of economic stress.

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

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The United States and other countries are periodically involved in disputes over trade and other matters, which may result in tariffs, investment restrictions and adverse impacts on affected companies and securities. For example, the United States has imposed tariffs and other trade barriers on Chinese exports, has restricted sales of certain categories of goods to China, and has established barriers to investments in China. Trade disputes may adversely affect the economies of the United States and its trading partners, as well as companies directly or indirectly affected and financial markets generally. The United States government has prohibited U.S. persons from investing in Chinese companies designated as related to the Chinese military. These and possible future restrictions could limit the fund's opportunities for investment and require the sale of securities at a loss or make them illiquid. Moreover, the Chinese government is involved in a longstanding dispute with Taiwan that has included threats of invasion. If the political climate between the United States and China does not improve or continues to deteriorate, if China were to attempt unification of Taiwan by force, or if other geopolitical conflicts develop or get worse, economies, markets and individual securities may be severely affected both regionally and globally, and the value of the fund's assets may go down.

**Interest rate risk** **:** The values of money market and other fixed-income securities usually rise and fall in response to changes in interest rates. Interest rates can change in response to the supply and demand for credit, government and/or central bank monetary policy and action, inflation rates, and other factors. Declining interest rates generally result in an increase in the value of existing fixed-income securities, and rising interest rates generally result in a decrease in the value of existing fixed-income securities. Changes in a fixed-income security's value usually will not affect the amount of interest income paid to the fund, but will affect the value of the fund's shares. Interest rate risk is generally greater for investments with longer maturities.

Under normal circumstances, the dollar-weighted average portfolio maturity of the fund is not expected to exceed four years. Short-term investments may have lower yields than longer-term investments. As mentioned in the fund summary, under normal circumstances the effective duration of the fund's portfolio will generally not be greater than one year. Effective duration provides a measure of a fund's interest-rate sensitivity. The longer a fund's duration, the more sensitive the fund is to shifts in interest rates. As a general rule, a 1% rise in interest rates means a 1% fall in value for every year of duration. Some investments that the fund purchases have an interest rate that changes based on a market interest rate and/or allow the holder to demand payment of principal and accrued interest before the scheduled maturity date. The investment manager measures the maturity of these obligations using the relatively short period until the interest rate resets and/or payment could be demanded. Because the interest rate on these investments can change, these investments are unlikely to be able to lock in favorable longer-term interest rates.

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**Credit risk:** Investors normally expect to be compensated in proportion to the risk they are assuming. Thus, debt of issuers with poor credit prospects usually offers higher yields than debt of issuers with more secure credit. Higher-rated investments generally have lower credit risk.

The fund invests in investment-grade investments. These are rated at least BBB or its equivalent at the time of purchase by a nationally recognized securities rating organization, or are unrated investments that the Investment Manager believes are of comparable quality.

The fund will not necessarily sell an investment if its rating is reduced after the fund buys it. This means the fund may at times hold securities rated below-investment-grade (sometimes referred to as "junk bonds") if the rating for a security held by the fund is reduced to below-investment-grade. Investments rated below BBB or its equivalent are below-investment-grade in quality and may be considered speculative. This rating reflects a greater possibility that the issuers may be unable to make timely payments of interest and principal and thus default. If a default occurs, or is perceived as likely to occur, the value of the investment will usually be more volatile and is likely to fall. The value of a debt instrument may also be affected by changes in, or perceptions of, the financial condition of the issuer, borrower, counterparty, or other entity, or underlying collateral or assets, or changes in, or perceptions of, specific or general market, economic, industry, political, regulatory, geopolitical, environmental, public health, and other conditions. A default or expected default could also make it difficult for the fund to sell the investment at a price approximating the value the investment manager had previously placed on it. Lower-rated debt usually has a more limited market than higher-rated debt, which may at times make it difficult for the fund to buy or sell certain debt instruments or to establish their fair values. Credit risk is generally greater for zero-coupon bonds and other investments that are issued at less than their face value and that are required to make interest payments only at maturity rather than at intervals during the life of the investment.

Credit ratings are based largely on the issuer's historical financial condition and the rating organizations' investment analysis at the time of rating. The rating assigned to any particular investment does not necessarily reflect the issuer's current financial condition, and does not reflect an assessment of the investment's volatility or liquidity. Although credit ratings are considered when making investment decisions, the Investment Manager performs its own investment analysis and does not rely only on ratings assigned by the rating organizations. The success in achieving the fund's goal may depend more on the Investment Manager's credit analysis when buying lower-rated debt than when buying investment-grade debt. The fund may have to participate in legal proceedings involving the issuer. This could increase the fund's operating expenses and decrease its net asset value.

Although investment-grade investments generally have lower credit risk, they may share some of the risks of lower-rated investments. U.S. government investments generally have the least credit risk, but are not completely free of credit risk. While some investments, such as U.S. Treasury obligations and

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Ginnie Mae certificates, are backed by the full faith and credit of the U.S. government, others are backed only by the credit of the issuer. Mortgage-backed securities may be subject to the risk that underlying borrowers will be unable to meet their obligations.

Fixed income investments may be more susceptible to downgrades or defaults during economic downturns or other periods of economic stress, which can significantly strain the financial resources of debt issuers, including the issuers of the bonds in which the fund invests (or has exposure to). This may make it less likely that those issuers can meet their financial obligations when due and may adversely impact the value of their bonds, which could negatively impact the performance of the fund. It is difficult to predict the level of financial stress and duration of such stress issuers may experience.

**Prepayment risk** **:** Traditional debt investments typically pay a fixed rate of interest until maturity, when the entire principal amount is due. In contrast, payments on securitized debt instruments, including mortgage-backed and asset-backed investments, typically include both interest and partial payment of principal. Principal may also be prepaid voluntarily, or as a result of refinancing or foreclosure. The fund may have to invest the proceeds from prepaid investments in other investments with less attractive terms and yields.

Compared to debt that cannot be prepaid, mortgage-backed investments are less likely to increase in value during periods of declining interest rates and have a higher risk of decline in value during periods of rising interest rates. These investments may increase the volatility of the fund. Some mortgage-backed investments receive only the interest portion or the principal portion of payments on the underlying mortgages. The yields and values of these investments are extremely sensitive to changes in interest rates and in the rate of principal payments on the underlying mortgages. The market for these investments may be volatile and limited, which may make them difficult to buy or sell. Asset-backed securities are structured like mortgage-backed securities, but instead of mortgage loans or interests in mortgage loans, the underlying assets may include such items as motor vehicle installment sales or installment loan contracts, leases of various types of real and personal property and receivables from credit card agreements. Asset-backed securities are subject to risks similar to those of mortgage-backed securities.

**Derivatives risk** **:** The fund may engage in a variety of transactions involving derivatives, such as futures, options, credit default, total return and interest rate swap contracts. Derivatives are financial instruments whose value depends upon, or is derived from, the value of something else, such as one or more underlying investments, pools of investments or indexes. The fund may make use of "short" derivative positions, the values of which typically move in the opposite direction from the price of the underlying investment, pool of investments, or index. The fund may use derivatives both for hedging and non-hedging purposes. For example, the fund may use derivatives to increase or decrease the fund's exposure to long- or short-term interest rates (in the United States or abroad), adjust the term of the fund's U.S. Treasury security exposure, adjust the fund's positioning on the yield curve (a line that plots

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interest rates of bonds having equal credit quality but differing maturity dates) or to take tactical positions along the yield curve or as a substitute for a direct investment in the securities of one or more issuers. However, the fund may also choose not to use derivatives based on the Investment Manager's evaluation of market conditions or the availability of suitable derivatives. Investments in derivatives may be applied toward meeting a requirement to invest in a particular kind of investment if the derivatives have economic characteristics similar to that investment.

Derivatives involve special risks and may result in losses. The successful use of derivatives depends on the Investment Manager's ability to manage these sophisticated instruments. Some derivatives are "leveraged," which means they provide the fund with investment exposure greater than the value of the fund's investment in the derivatives. As a result, these derivatives may magnify or otherwise increase investment losses to the fund. The risk of loss from certain short derivative positions is theoretically unlimited. The value of derivatives may move in unexpected ways due to unanticipated market movements, the use of leverage, imperfect correlation between the derivative instrument and the reference asset, or other factors, especially in unusual market conditions, and volatility in the value of derivatives could adversely impact the fund's returns, obligations and exposures.

Other risks arise from the potential inability to terminate or sell derivative positions. Derivatives may be subject to liquidity risk due to the fund's obligation to make payments of margin, collateral, or settlement payments to counterparties. A liquid secondary market may not always exist for the fund's derivative positions. In fact, certain over-the-counter instruments (investments not traded on an exchange) may not be liquid. Over-the-counter instruments also involve the risk that the other party to the derivative transaction may not be willing or able to meet its obligations with respect to the derivative transaction. The risk of a party failing to meet its obligations may increase if the fund has significant exposure to that counterparty. Derivative transactions may also be subject to operational risk, including due to documentation and settlement issues, system failures, inadequate controls and human error, and legal risk due to insufficient documentation, insufficient capacity or authority of a counterparty, or issues with respect to the legality or enforceability of the derivative contract. For further information about additional types and risks of derivatives, see *Miscellaneous Investments, Investment Practices and Risks* in the SAI.

**Floating rate obligations risk** **:** The fund may purchase taxable floating rate notes for short-term cash management or other investment purposes. Floating rate notes are debt instruments that provide for periodic adjustments in the interest rate. The interest rate on these instruments may be reset daily, weekly or on some other reset period and may have a floor or ceiling on interest rate changes. The interest rate of a floating rate instrument may be based on a known lending rate, such as the Secured Overnight Financing Rate, and is reset whenever such rate is adjusted. Interest rate adjustments are designed to help stabilize the instrument's price or maintain a fixed spread to a

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predetermined benchmark. While this feature may protect against a decline in the instrument's market price when interest rates or benchmark rates rise, it lowers the fund's income when interest rates or benchmark rates fall. The fund's income from its floating rate investments also may increase if interest rates rise. Floating rate obligations are less effective than fixed rate instruments at locking in a particular yield. Nevertheless, such obligations may fluctuate in value in response to interest rate changes if there is a delay between changes in market interest rates and the interest reset date for the obligation, or for other reasons. The fund's ability to receive payments of principal and interest and other amounts in connection with loans held by it will depend primarily on the financial condition of the issuer. The failure by the fund to receive scheduled interest or principal payments on a loan would adversely affect the income of the fund and would likely reduce the value of its assets, which would be reflected in a reduction in the fund's net asset value.

Floating rate notes and bonds may have a stated maturity in excess of one year, but may have features that permit a holder to demand payment of principal plus accrued interest upon a specified number of days' notice. Frequently, such obligations are secured by letters of credit or other credit support arrangements provided by banks. If these obligations are not secured by letters of credit or other credit support arrangements, the fund's right to demand payment will be dependent on the ability of the issuer to pay principal and interest on demand. In addition, these obligations frequently are not rated by credit rating organizations and may involve heightened risk of default by the issuer. The issuer of such obligations normally has a corresponding right, after a given period, to prepay in its discretion the outstanding principal of the obligation plus accrued interest upon a specific number of days' notice to the holders. There is no assurance that the fund will be able to reinvest the proceeds of any prepayment at the same interest rate or on the same terms as those of the original instrument. The absence of an active secondary market for floating rate notes could make it difficult for the fund to dispose of the instruments, and the fund could suffer a loss if the issuer defaults or during periods in which the fund is not entitled to exercise its demand rights. When a reliable trading market for the floating rate instruments held by the fund does not exist and the fund may not demand payment of the principal amount of such instruments within seven days, the instruments may be deemed illiquid and therefore subject to the fund's limitation on investments in illiquid securities.

**Foreign investments risk** **:** The fund may invest in foreign investments, although they do not represent a primary focus of the fund. Foreign investments involve certain special risks. For example, their values may decline in response to changes in currency exchange rates, unfavorable political and legal developments, unreliable or untimely information, and economic and financial instability. In addition, the liquidity of these investments may be more limited than for most U.S. investments, which means the fund may at times be unable to sell them at desirable prices. Foreign settlement procedures may also involve additional risks. These risks are generally greater

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in the case of developing (also known as emerging) markets, which typically have less developed legal and financial systems.

There may be less publicly-available information, or less reliable publicly-available information, about foreign companies (including information related to companies' ESG practices), particularly with respect to emerging market companies, than publicly-available information regarding U.S. companies. As a result, the Investment Manager's ability to evaluate a foreign company, including with respect to its ESG or sustainability practices, may be more limited than its ability to evaluate a U.S. company. Certain of these risks may also apply to some extent to U.S.-traded investments that are denominated in foreign currencies, investments in U.S. companies or issuers that are traded in foreign markets, or investments in U.S. companies or issuers that have significant foreign operations.

**Liquidity and illiquid investments risk** **:** The fund may invest up to 15% of its net assets in illiquid investments, which may be considered speculative and which may be difficult to sell. The sale of many of these investments is prohibited or limited by law or contract. Some investments may be difficult to value for purposes of determining the fund's net asset value. Certain other investments may not have an active trading market due to adverse market, economic, industry, political, regulatory, geopolitical, environmental, public health, and other conditions, including investors trying to sell large quantities of a particular investment or type of investment, or lack of market makers or other buyers for a particular investment or type of investment. The fund may not be able to sell its illiquid investments when the Investment Manager considers it desirable to do so, or the fund may be able to sell them only at less than their value.

**Management and operational risk** **:** The fund is actively managed and its performance will reflect, in part, the Investment Manager's ability to make investment decisions that seek to achieve the fund's investment objective. There is no guarantee that the investment techniques, analyses, or judgments that the Investment Manager applies in making investment decisions for the fund will produce the intended outcome or that the investments selected for the fund will perform as well as other securities that were not selected for the fund. As a result, the fund may underperform its benchmark or other funds with a similar investment goal and may realize losses. In addition, the Investment Manager, or the fund's other service providers, may experience disruptions or operating errors that could negatively impact the fund. Although service providers may have operational risk management policies and procedures and take appropriate precautions to avoid and mitigate risks that could lead to disruptions and operating errors, it may not be possible to identify all of the operational risks that may affect the fund or to develop processes and controls to completely eliminate or mitigate their occurrence or effects.

**Portfolio turnover rate** **:** The fund's portfolio turnover rate measures how frequently the fund buys and sells investments. A portfolio turnover rate of 100%, for example, would mean that the fund sold and replaced securities valued at 100% of the fund's assets within a one-year period. Funds with high

Prospectus 25

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turnover may be more likely to realize capital gains that must be distributed to shareholders as taxable income. High turnover may also cause a fund to pay more brokerage commissions and other transaction costs (including imputed transaction costs), which may detract from performance. The fund's portfolio turnover rate and the amount of brokerage commissions it pays and transaction costs it incurs will vary over time based on market conditions.

**Other investments:** In addition to the main investment strategies described above, the fund may make other types of investments, such as investments hybrid and structured bonds and notes, and preferred securities that would be characterized as debt securities under applicable accounting standards and tax laws. The fund may also invest in cash or cash equivalents, including money market instruments or short-term instruments such as commercial paper, bank obligations (e.g., certificates of deposit and bankers' acceptances), repurchase agreements, and U.S. Treasury bills or other government obligations. The fund may also from time to time invest all or a portion of its assets, including any cash balances, in money market and/or short-term bond funds advised by the Investment Manager or its affiliates. The percentage of the fund invested in cash and cash equivalents and such money market and short-term bond funds is expected to vary over time and will depend on various factors, including market conditions, purchase and redemption activity by fund shareholders, and the Investment Manager's assessment of the cash level that is appropriate to allow the fund to pursue investment opportunities as they arise and to meet shareholder redemption requests. Large cash positions may dampen performance and may prevent the fund from achieving its goal. These practices may be subject to other risks, as described under *Miscellaneous Investments, Investment Practices and Risks* in the SAI.

**Temporary defensive strategies:** In response to adverse market, economic, political or other conditions, the fund may take temporary defensive positions, such as investing some or all of the fund's assets in cash and cash equivalents, that differ from the fund's usual investment strategies. However, the fund may choose not to use these temporary defensive strategies for a variety of reasons, even in very volatile market conditions. If the fund employs these strategies, the fund may miss out on investment opportunities and may not achieve its goal. Additionally, while temporary defensive strategies are mainly designed to limit losses, they may not work as intended.

**Changes in policies:** The Trustees may change the fund's goal, investment strategies and other policies set forth in this prospectus without shareholder approval, except as otherwise provided in the prospectus or SAI.

### Fund management

#### The fund's investment manager
Franklin Advisers, One Franklin Parkway, San Mateo, CA 94403-1906, is the fund's investment manager, responsible for making investment decisions for the fund and managing the fund's other affairs and business. Franklin Advisers

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is a wholly-owned subsidiary of Franklin Resources, Inc. ("Resources"). Together, Franklin Advisers and its affiliates manage, as of June 30, 2025, $1.61 trillion in assets, and have been in the investment management business since 1947.

Under an agreement with the Investment Manager, Putnam Management, 100 Federal Street, Boston, MA 02110, serves as the fund's sub-adviser, responsible for providing certain advisory and related services. Putnam Management is an indirect, wholly-owned subsidiary of Resources. The Investment Manager (and not the fund) will pay a monthly fee to Putnam Management based on the costs of Putnam Management in providing these services to the fund, which may include a mark-up determined and revised from time to time in accordance with Franklin Templeton's transfer pricing policy, in line with applicable tax/transfer pricing regulations, but not to exceed 15% over such costs.

The Investment Manager has retained FTIML, Cannon Place, 78 Cannon Street, London, EC4N 6HL, England, to make investment decisions for such fund assets as may be designated from time to time by the Investment Manager. FTIML is not currently managing any fund assets. If FTIML were to manage any fund assets, the Investment Manager (and not the fund) would pay a monthly sub-management fee to FTIML for its services at the annual rate of 0.20% of the average net asset value of any fund assets managed by FTIML. FTIML is an indirect subsidiary of Resources.

Pursuant to the arrangements described above, investment professionals who are based in foreign jurisdictions may serve as portfolio managers of the fund or provide other investment services, consistent with local regulations.

The fund pays an annual all-inclusive management fee of 0.25% to the Investment Manager based on the fund's average daily net assets. The management fee is calculated and accrued daily. The management fee covers all of the other expenses of the fund with limited exceptions.

For the fiscal year ended April 30, 2025, the fund paid an effective management fee of 0.25% of the fund's average net assets.

A discussion regarding the basis for the Trustees' approval of the fund's investment management contract and subadvisory contracts is available in the fund's report on Form N-CSR for the period ended October 31, 2024.

**Portfolio managers.** The portfolio managers identified below are jointly and primarily responsible for the day-to-day management of the fund's portfolio.

**Andrew C. Benson Portfolio Manager of Franklin Advisers** 

Mr. Benson has been a portfolio manager of the fund since 2023. He joined Franklin Templeton in 2024. Prior to joining Franklin Templeton, Mr. Benson was a portfolio manager for Putnam Investment Management, LLC.

**Joann M. Driscoll, CFA Portfolio Manager of Franklin Advisers** 

Ms. Driscoll has been a portfolio manager of the fund since 2023. She joined

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Franklin Templeton in 2024. Prior to joining Franklin Templeton, Ms. Driscoll was a portfolio manager for Putnam Investment Management, LLC.

**Michael J. Lima, CFA Portfolio Manager of Franklin Advisers** 

Mr. Lima has been a portfolio manager of the fund since 2023. He joined Franklin Templeton in 2024. Prior to joining Franklin Templeton, Mr. Lima was a portfolio manager for Putnam Investment Management, LLC.

The fund's SAI provides additional information about portfolio manager compensation, other accounts that they manage and their ownership of fund shares.

### Shareholder information

#### Valuation of fund shares
The price of the fund's shares is based on its net asset value. The net asset value per share equals the total value of its assets, less its liabilities, divided by the number of its outstanding shares. Shares are only valued as of the scheduled close of regular trading on the NYSE each day the exchange is open.

The fund values its investments for which market quotations are readily available at market value. It values all other investments and assets at their fair value, which may differ from recent market prices. For example, the fund may value a stock traded on a U.S. exchange at its fair value when the exchange closes early or trading in the stock is suspended. It may also value a stock at fair value if recent transactions in the stock have been very limited or if, in the case of a security traded on a market that closes before the NYSE closes, material information about the issuer becomes available after the close of the relevant market. Market quotations are not considered to be readily available for many debt securities. These securities are generally valued at fair value on the basis of valuations provided by an independent pricing service approved by the fund's Trustees or dealers selected by the Investment Manager. Pricing services and dealers determine valuations for normal institutional-size trading units of such securities using information with respect to transactions in the bond being valued, market transactions for comparable securities and various relationships, generally recognized by institutional traders, between securities. To the extent a pricing service or dealer is unable to value a security or provides a valuation that the Investment Manager does not believe accurately reflects the security's fair value, the security will be valued at fair value by the Investment Manager.

The fund translates prices for its investments quoted in foreign currencies into U.S. dollars at current exchange rates, which are generally determined as of 4:00 p.m. Eastern Time each day the NYSE is open. As a result, changes in the value of those currencies in relation to the U.S. dollar may affect the fund's net asset value. Because foreign markets may be open at different times than the NYSE, the value of the fund's shares may change on days when shareholders are not able to buy or sell them. Many securities markets and

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exchanges outside the U.S. close before the close of the NYSE, and the closing prices for securities in those markets or exchanges may not reflect events that occur after the close but before the scheduled close of regular trading on the NYSE. As noted above, the value determined for an investment using the fund's fair value pricing procedures may differ from recent market prices for the investment.

The fund's most recent net asset value is available at www.franklintempleton.com or by calling 1-800-225-1581.

### Additional information about the fund
The fund is an actively managed ETF. Like other ETFs, shares of the fund are generally purchased and redeemed in creation unit aggregations through authorized participants, shares of the fund are listed and traded on a stock exchange, and individual investors can purchase or sell shares in less than creation unit sizes and for cash in the secondary market through a broker.

<u>Derivative actions</u> 

The fund is a series of Putnam ETF Trust (the "Trust"). The Trust's Amended and Restated Agreement and Declaration of Trust imposes certain conditions on derivative actions that are not otherwise required by law, including, in the case of any claim not arising under the federal securities laws, a requirement that the holders of 10% or more of the total outstanding shares of the applicable fund join the request to commence the action. Although these conditions are intended to permit legitimate inquiries and claims while avoiding the time, expense, distraction, and other harm that can be caused to a fund or its shareholders as a result of spurious shareholder demands and derivative actions, they may make it more difficult or costly for fund shareholders to bring derivative actions on behalf of the Trust.

<u>Information on the fund's website</u> 

The fund will disclose its top 10 holdings and related portfolio information monthly beginning on or after 5 business days after the end of each month at www.franklintempleton.com. The fund discloses its complete portfolio holdings, including the name, identifier, market value and weight of each security and instrument in the portfolio, at www.franklintempleton.com on each business day, before commencement of trading in shares on the listing exchange. The fund will also disclose its complete portfolio holdings as of the end of the prior month on a monthly basis beginning on or before the 15th calendar day after the end of each month. Recent information, including information regarding the fund's net asset value, market price, premiums and discounts, and bid/ask spread, is also available at www.franklintempleton.com.

#### Buying and selling shares in the secondary market
Shares of the fund are listed and traded on an exchange, and individual fund shares may only be bought and sold in the secondary market through a broker. The fund does not impose any minimum investment for shares of the fund

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purchased on an exchange. These transactions are made at market prices that may vary throughout the day and may be greater than the fund's net asset value (premium) or less than the fund's net asset value (discount). As a result, you may pay more than net asset value when you purchase shares, and receive less than net asset value when you sell shares, in the secondary market. If you buy or sell shares in the secondary market, you will generally incur customary brokerage commissions and charges and you may also incur the cost of the spread between the price at which a dealer will buy fund shares and the somewhat higher price at which a dealer will sell shares. Due to such commissions and charges and spread costs, frequent trading may detract significantly from investment returns.

The fund is designed to offer investors an investment that can be bought and sold frequently in the secondary market without impact on the fund, and such trading activity is designed to enable the market price of fund shares to remain at or close to net asset value. Accordingly, the Board of Trustees has not adopted policies and procedures designed to discourage excessive or short-term trading by these investors.

The fund accommodates frequent purchases and redemptions of creation units by authorized participants and does not place a limit on purchases or redemptions of creation units by these investors. The fund reserves the right, but does not have the obligation, to reject any purchase or redemption transaction (subject to legal and regulatory limits regarding redemption transactions) at any time. In addition, the fund reserves the right to impose restrictions on disruptive, excessive, or short-term trading.

#### Precautionary notes
<u>Note to registered investment companies</u> 

Section 12(d)(1) of the Investment Company Act of 1940, as amended (the "1940 Act"), restricts investments by registered investment companies in the securities of other investment companies, including shares of the fund. Registered investment companies are permitted to invest in the fund beyond the limits set forth in Section 12(d)(1), subject to certain terms and conditions, including that such investment companies enter into an agreement with the fund.

<u>Note to authorized participants regarding continuous offering</u> 

Certain legal risks may exist that are unique to authorized participants purchasing creation units directly from the fund. Because new creation units may be issued on an ongoing basis, at any point a "distribution," as such term is used in the Securities Act of 1933 (the "Securities Act"), could be occurring. As a broker-dealer, certain activities that you perform may, depending on the circumstances, result in your being deemed a participant in a distribution, in a manner which could render you a statutory underwriter and subject you to the prospectus delivery and liability provisions of the Securities Act.

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For example, you may be deemed a statutory underwriter if you purchase creation units from the fund, break them down into individual fund shares, and sell such shares directly to customers, or if you choose to couple the creation of a supply of new fund shares with an active selling effort involving solicitation of secondary market demand for fund shares. A determination of whether a person is an underwriter for purposes of the Securities Act depends upon all of the facts and circumstances pertaining to that person's activities, and the examples mentioned here should not be considered a complete description of all the activities that could lead to a categorization as an underwriter.

Dealers who are not "underwriters" but are participating in a distribution (as opposed to engaging in ordinary secondary market transactions), and thus dealing with shares as part of an "unsold allotment" within the meaning of Section 4(a)(3)(C) of the Securities Act, will be unable to take advantage of the prospectus delivery exemption provided by Section 4(a)(3) of the Securities Act. This is because the prospectus delivery exemption in Section 4(a)(3) of the Securities Act is not available in respect of such transactions as a result of Section 24(d) of the 1940 Act. As a result, you should note that dealers who are not underwriters but are participating in a distribution (as opposed to engaging in ordinary secondary market transactions) and thus dealing with the shares that are part of an overallotment within the meaning of Section 4(a)(3)(A) of the Securities Act would be unable to take advantage of the prospectus delivery exemption provided by Section 4(a)(3) of the Securities Act. Firms that incur a prospectus-delivery obligation with respect to shares of the fund are reminded that, under Rule 153 under the Securities Act, a prospectus delivery obligation under Section 5(b)(2) of the Securities Act owed to an exchange member in connection with a sale on an exchange is satisfied by the fact that the prospectus is available at the exchange upon request. The prospectus delivery mechanism provided in Rule 153 is only available with respect to transactions on an exchange.

Certain affiliates of the fund may purchase and resell fund shares pursuant to this prospectus.

<u>Note to secondary market investors</u> 

The Depository Trust Company ("DTC"), a limited trust company and securities depository that facilitates the clearance and settlement of trades for its participating banks and broker-dealers, has executed an agreement with the fund's distributor, Franklin Distributors, LLC (the "Distributor"). DTC, or its nominee, is the registered owner of all outstanding shares of the fund. The Investment Manager will not have any record of your ownership. Your ownership of shares will be shown on the records of DTC and the DTC participant broker through which you hold the shares. Your broker will provide you with account statements, confirmations of your purchases and sales, and tax information. Your broker will also be responsible for distributing income and capital gain distributions and for sending you shareholder reports and other information as may be required.

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### Costs associated with creations and redemptions
The fund generally imposes a creation transaction fee and a redemption transaction fee to offset transfer and other transaction costs associated with the issuance and redemption of creation units of shares. Information about the procedures regarding creation and redemption of creation units and the applicable transaction fees is included in the SAI.

Distribution plans and payments to intermediaries

#### Principal distributor
The Distributor distributes creation units for the fund on an agency basis, does not maintain a secondary market in shares of the fund, and has no role in determining the investment policies of the fund or the securities that are purchased or sold by the fund. The Distributor is an indirect, wholly-owned broker/dealer subsidiary of Resources.

The Distributor's address is One Franklin Parkway, San Mateo, CA 94403-1906.

Intermediaries may receive compensation from the Investment Manager, the Distributor, and/or their respective affiliates for providing recordkeeping and administrative services, as well as other retirement plan expenses, and compensation for services intended to result in the sale of fund shares. These payments are described in more detail in this section and in the SAI.

#### Distribution and service plan
The fund has adopted a distribution and service plan pursuant to Rule 12b-1 under the 1940 Act that authorizes the fund to pay distribution fees in connection with the sale and distribution of its shares and service fees in connection with the provision of ongoing shareholder support services. No Rule 12b-1 fees are currently paid by the fund, and there are no current plans to impose these fees. However, in the event Rule 12b-1 fees are charged in the future, because these fees are paid out of the fund's assets on an ongoing basis, these fees will increase the cost of your investment in the fund.

No dealer, sales representative, or any other person has been authorized to give any information or to make any representations, other than those contained in this prospectus and in the related SAI, in connection with the offer contained in this prospectus. If given or made, such other information or representations must not be relied upon as having been authorized by the fund or the Distributor. This prospectus and the related SAI do not constitute an offer by the fund or by the Distributor to sell shares of the fund to or to buy shares of the fund from any person to whom it is unlawful to make such offer.

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#### Payments to intermediaries
Investors may purchase shares of the fund on an exchange through intermediaries (including any broker, intermediary, bank, bank trust department, registered investment advisor, financial planner, retirement plan administrator and any other institution that offers shares of the fund to its customers). In addition to distribution and service plans, the Investment Manager and its affiliates may make payments to intermediaries that do not increase your fund expenses, as described below.

The Investment Manager and its affiliates also pay additional compensation to selected intermediaries in recognition of their marketing support and/or program servicing (each of which is described in more detail below). These payments may create an incentive for an intermediary firm or its representatives to recommend or offer shares of the fund or other Putnam funds to its customers. These additional payments are made by the Investment Manager and its affiliates and do not increase the amount paid by you or the fund as shown under Fund summary — Fees and expenses. The additional payments to intermediaries by the Investment Manager and its affiliates are generally based on one or more of the following factors: average net assets of a fund attributable to that intermediary, sales or net sales of a fund attributable to that intermediary, or reimbursement of ticket charges (fees that an intermediary firm charges its representatives for effecting transactions in fund shares), or on the basis of a negotiated lump sum payment for services provided.

Marketing support payments are generally available to most intermediaries engaging in significant sales of Putnam fund shares. These payments are individually negotiated with each intermediary firm, taking into account the marketing support services provided by the intermediary, including business planning assistance, educating intermediary personnel about the Putnam funds and shareholder financial planning needs, placement on the intermediary's preferred or recommended fund company list, access to sales meetings, sales representatives and management representatives of the intermediary, market data, as well as the size of the intermediary's relationship with the Investment Manager.

Program servicing payments, are paid in some instances to intermediaries in connection with investments in the fund through intermediary platforms and other investment programs. These payments are made for program or platform services provided by the intermediary, including shareholder recordkeeping, reporting, or transaction processing, as well as services rendered in connection with intermediary platform development and maintenance, fund/investment selection and monitoring, or other similar services.

You can find a list of all intermediaries to which the Investment Manager and its affiliates made marketing support and/ or program servicing payments in the SAI, which is on file with the SEC and is also available at www.franklintempleton.com. You can also find other details in the SAI about the payments made by the Investment Manager and its affiliates and the

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services provided by your intermediary. Your intermediary may charge you fees or commissions in addition to those disclosed in this prospectus. You can also ask your intermediary about any payments it receives from the Investment Manager and its affiliates and any services your intermediary provides, as well as about fees and/or commissions it charges.

#### Other payments
The Investment Manager and its affiliates may make other payments (including payments in connection with educational seminars or conferences) or allow other promotional incentives to intermediaries to the extent permitted by SEC and NASD (as adopted by FINRA) rules and by other applicable laws and regulations.

### Fund distributions and taxes
The fund earns dividends, interest, and other income from its investments, and distributes this income (less expenses) to shareholders as dividends. The fund also realizes capital gains from its investments and distributes these gains (less any losses) as capital gain distributions. If you purchased your shares in the secondary market, your broker is responsible for distributing the income and capital gain distributions to you. The fund normally distributes any net investment income monthly and any net realized capital gains annually.

For U.S. federal income tax purposes, distributions of net investment income are generally taxable to you as ordinary income. Taxes on distributions of capital gains are determined by how long the fund owned (or is deemed to have owned) the investments that generated them, rather than by how long you have owned (or are deemed to have owned) your shares. Distributions that the fund properly reports to you as gains from investments that the fund owned for more than one year are generally taxable to you as long-term capital gains includible in net capital gain and taxed to individuals at reduced rates. Distributions of gains from investments that the fund owned for one year or less and gains on the sale of or prepayment on bonds characterized as market discount are generally taxable to you as ordinary income. Distributions that the fund properly reports to you as "qualified dividend income" are taxable at the reduced rates applicable to your net capital gain provided that both you and the fund meet certain holding period and other requirements. Distributions are taxable in the manner described in this paragraph whether you receive them in cash or reinvest them in additional shares of the fund.

Distributions by the fund to retirement plans that qualify for tax-advantaged treatment under U.S. federal income tax laws will not be taxable. Special tax rules apply to investments through such plans. You should consult your tax advisor to determine the suitability of the fund as an investment through such a plan and the tax treatment of distributions (including distributions of amounts attributable to an investment in the fund) from such a plan. Distributions are taxable to you even if they are paid from income or gains earned by the fund before your investment (and thus were included in the price you paid). Contact your financial representative to find out the distribution schedule for your fund.

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Investments in lower-rated securities may present special tax issues for the fund to the extent actual or anticipated defaults may be more likely with respect to those kinds of securities. Tax rules are not entirely clear about issues such as when an investor in such securities may cease to accrue interest, original issue discount, or market discount; when and to what extent deductions may be taken for bad debts or worthless securities; how payments received on obligations in default should be allocated between principal and income; and whether exchanges of debt obligations in a workout context are taxable.

The fund's investments in certain debt obligations may cause the fund to recognize taxable income in excess of the cash generated by such obligations. Thus, the fund could be required at times to liquidate other investments, including when it is not advantageous to do so, in order to satisfy its distribution requirements.

The fund's investments in foreign securities may be subject to foreign withholding or other taxes. In that case, the fund's return on those investments would be decreased. If the fund meets certain requirements relating to its asset holdings, and the fund elects to pass through to its shareholders foreign tax credits or deductions, taxable shareholders generally will be entitled to claim a credit or deduction with respect to these foreign taxes. Even if the fund elects to pass through to its shareholders foreign tax credits or deductions, tax-exempt shareholders and those who invest in the fund through tax-advantaged accounts such as IRAs will not benefit from any such tax credit or deduction. In addition, the fund's investments in foreign securities or foreign currencies may increase or accelerate the fund's recognition of ordinary income and may affect the timing or amount of the fund's distributions.

The fund's use of derivatives, if any, may affect the amount, timing and character of distributions to shareholders and, therefore, may increase the amount of taxes payable by shareholders.

Any gain resulting from the sale of your shares generally also will be subject to tax. Any such gain or loss will be long term or short term depending on how long you have held your shares.

The above is a general summary of the tax implications of investing in the fund. Please refer to the SAI for further details. You should consult your tax advisor for more information on your own tax situation, including possible foreign, state and local taxes.

#### Other tax considerations
Unlike other ETFs, the securities exchanged for a creation unit will not correspond pro rata to the positions in the fund's portfolio, and the fund will effect its creations and redemptions partially or wholly for cash rather than on an in-kind basis. Because of this, the fund may be unable to realize certain tax benefits associated with in-kind transfers of portfolio securities that may be realized by other ETFs. Shareholders may be subject to tax on gains they

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would not otherwise have been subject to and/or at an earlier date than if the fund had effected redemptions wholly on an in-kind basis.

Authorized participants should consult their tax advisors about the U.S. federal, state, local and non-U.S. tax consequences of purchasing and redeeming creation units in the fund.

#### Information about the Summary Prospectus, Prospectus, and SAI
The summary prospectus, prospectus, and SAI for a fund provide information concerning the fund. The summary prospectus, prospectus, and SAI are updated at least annually and any information provided in a summary prospectus, prospectus, or SAI can be changed without a shareholder vote unless specifically stated otherwise. The summary prospectus, prospectus, and the SAI are not contracts between the fund and its shareholders and do not give rise to any contractual rights or obligations or any shareholder rights other than any rights conferred explicitly by federal or state securities laws that may not be waived.

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### Financial highlights
The financial highlights table is intended to help you understand the performance of the fund for the past five years, unless otherwise noted. Certain information reflects financial results for a single fund share. Total return represents the rate that an investor would have earned (or lost) on an investment in the fund, assuming reinvestment of all dividends and other distributions. Unless otherwise noted, this information has been audited by the fund's independent registered public accounting firm, PricewaterhouseCoopers, LLP, whose report, along with the fund's financial statements, are available on the fund's website and are included in the fund's Form N-CSR filed with the SEC, which is available upon request.

Prospectus 37

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(For a common share outstanding throughout the period)

---

| | | | |
|:---|:---|:---|:---|
| **PER-SHARE OPERATING**<br> **PERFORMANCE** | **PER-SHARE OPERATING**<br> **PERFORMANCE** | **PER-SHARE OPERATING**<br> **PERFORMANCE** | **PER-SHARE OPERATING**<br> **PERFORMANCE** |
|  | **Year ended** | **Year ended** |  |
|  |  |  | **For the period**<br> **1/19/23**<br> **(commencement <br>of operations) to** |
|  | **4/30/25** | **4/30/24** | **4/30/23** |
|  **Net asset value, beginning of period** | **$50.36** | **$50.21** | **$50.00** |
|  **Investment operations:** |  |  |  |
|  Net investment income (loss)<sup>a</sup> | 2.57 | 2.73 | .71 |
|  Net realized and unrealized gain (loss) on investments | .16 | .18 | (.21) |
|  **Total from investment operations** | **2.73** | **2.91** | **.50** |
|  **Less distributions:** |  |  |  |
|  From net investment income | (2.55) | (2.84) | (.38) |
|  **Total distributions** | **(2.55)** | **(2.84)** | **(.38)** |
|  **Other capital** | .04 | .08 | .09 |
|  **Net asset value, end of period** | **$50.58** | **$50.36** | **$50.21** |
|  **Total return at net asset value** (%)<sup>b</sup> | **5.63** | **6.14** | **1.18\*** |
|  **RATIOS AND SUPPLEMENTAL DATA** |  |  |  |
|  **Net assets, end of period (in thousands)** | **$158063** | **$83093** | **$125536** |
|  Ratio of expenses to average net assets (%)<sup>c,d</sup> | .25 | .25 | .07\* |
|  Ratio of net investment income (loss)to average net assets (%)<sup>d</sup> | 5.08 | 5.44 | 1.41\* |
|  Portfolio turnover (%)<sup>e</sup> | 48 | 84 | 26\* |

---

\* Not annualized.

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

(b) Total return assumes dividend reinvestment.

(c) Excludes acquired fund fees and expenses, if any.

(d) Reflects waivers of certain fund expenses in connection with investments in Putnam Government Money Market Fund during the period. As a result of such waivers, the expenses of the fund reflect a reduction of the following amounts:

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---

| | | |
|:---|:---|:---|
|  |  | **Percentage of average** <br> **net assets**  |
|  | April 30, 2025 | 0.01% |
|  | April 30, 2024 | <0.01 |
|  | April 30, 2023 | <0.01 |
| (e) | Portfolio turnover excludes securities received or delivered in-kind, if any. | Portfolio turnover excludes securities received or delivered in-kind, if any. |

---

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#### For more information about Putnam ESG Ultra Short ETF
You can learn more about the fund in the following documents:

#### Annual/Semiannual Report to Shareholders and Form N-CSR Filed with the SEC
Contain additional information about the fund's investments. The fund's annual report also discusses the market conditions and investment strategies that significantly affected the fund's performance during its last fiscal year. In Form N-CSR, you will find the fund's annual and semi-annual financial statements.

#### Statement of Additional Information ("SAI")
Contains more information about the fund, its investments and policies. It is incorporated by reference (is legally a part of this prospectus).

For a free copy of the current annual/semiannual report, financial statements or the SAI, please contact your investment representative or call us at the number below. You also can view the current annual/semiannual report, financial statements and the SAI online through www.franklintempleton.com.

Reports and other information about the fund are available on the EDGAR Database on the SEC's Website at http://www.sec.gov, and copies of this information may be obtained, after paying a duplicating fee, by electronic request at the following email address: publicinfo@sec.gov.

Putnam Investments

100 Federal Street

Boston, MA 02110

1-800-225-1581

811-23643 39497-P 09/25

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| ![LOGO](g842776g6dsp001.jpg) | ![LOGO](g842776g6dsp001a.jpg) |

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## Putnam

## PanAgora ESG Emerging

## Markets Equity ETF

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| &nbsp;&nbsp;&nbsp; **Prospectus** | September 1, 2025 |

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| **Fund Symbol:** PPEM | **Principal U.S. Listing Exchange:** NYSE Arca, Inc. |

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#### Investment Category: International Equity

#### This prospectus explains what you should know about this fund before you invest. Please read it carefully.
These securities have not been approved or disapproved by the Securities and Exchange Commission ("SEC") nor has the SEC passed upon the accuracy or adequacy of this prospectus. Any statement to the contrary is a crime.

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### Table of contents

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| | |
|:---|:---|
|  [Fund summary](#pro95427_1) | 2 |
|  [Fund details](#pro95427_2) | 10 |
|  [Fund management](#pro95427_3) | 22 |
|  [Shareholder information](#pro95427_4) | 23 |
|  [Distribution plans and payments to intermediaries](#pro95427_5) | 27 |
|  [Fund distributions and taxes](#pro95427_6) | 29 |
|  [Financial highlights](#pro95427_7) | 32 |

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### Fund summary

#### Goal
The fund seeks long-term capital appreciation.

#### Fees and expenses
The following tables describe the fees and expenses you may pay if you buy, hold and sell shares of the fund. **You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.**

#### Annual Fund Operating Expenses

#### (expenses you pay each year as a percentage of the value of your investment)

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| | | | |
|:---|:---|:---|:---|
| **Management <br> fees** | **Distribution <br> and service (12b-1) fees** | **Other <br> expenses** | **Total annual fund <br> operating expenses** |
|  0.60% |  | 0.00% | 0.60% |

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#### Example
The following hypothetical example is intended to help you compare the cost of investing in the fund with the cost of investing in other funds. It assumes that you invest $10,000 in the fund for the time periods indicated and then redeem all your shares at the end of those periods. It assumes a 5% return on your investment each year and that the fund's operating expenses remain the same. Your actual costs may be higher or lower.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **1 year** | **3 years** | **5 years** | **10 years** |
|  Putnam PanAgora ESG Emerging Markets Equity ETF | $61 | $192 | $335 | $750 |

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#### Portfolio turnover
The fund pays transaction-related costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher turnover rate may indicate higher transaction costs and may result in higher taxes when the fund's shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or the above example, affect fund performance. The fund's turnover rate in the most recent fiscal year was 90%.

### Investments, risks, and performance

#### Principal investment strategies
The fund invests mainly in common stocks (growth or value stocks or both) of emerging markets companies of any size with a focus on companies that the Sub-advisor, as defined below, believes offer attractive benchmark-relative returns and exhibit positive environmental, social and governance ("ESG")

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metrics. In evaluating and selecting investments for the fund, the Sub-advisor employs a proprietary framework using quantitative models that identify companies that offer above-market return potential based on their ESG metrics, together with other proprietary factors measuring a company's financial and operational health, and then construct a portfolio that integrates return potential and ESG metrics.

The Sub-advisor uses advanced statistical and machine learning techniques, together with third-party and proprietary data sources, in evaluating companies' ESG metrics and return potential. Metrics designed to evaluate companies' environmental practices may include third-party or proprietary data sources, including those regarding a company's environmental footprint or its environmental efficiencies. Metrics designed to evaluate companies' social practices may include third-party or proprietary data sources, including those regarding board diversity levels at a company. Metrics designed to evaluate companies' governance practices may include third-party or proprietary data sources, including those regarding a company's compensation practices. The ESG metrics and information used in the portfolio construction process may change over time and may not be relevant to all companies that are eligible for investment by the fund.

In addition, the fund will not invest in securities of companies that the Sub-advisor, based on third-party data, determines at the time of investment to have a category 5 controversy rating (an assessment of a company's involvement in incidents with negative ESG implications) or to be substantially engaged in Arctic drilling or in the thermal coal, palm oil, controversial weapons or tobacco industries (each, a "Restricted Company"). In addition, at the time of any periodic rebalancing of the fund's portfolio, the fund will dispose of its position in any security that, at that time, the Sub-advisor determines to be a Restricted Company. Further, the fund will not purchase securities of any company that the Sub-advisor, based on third-party data, determines at the time of investment to have a severe ESG risk rating (which measures a company's exposure to industry-specific material ESG risks and how well a company is managing those risks) or to be classified as non-compliant under the United Nations Global Compact principles (each, a "Benchmark-Constrained Company") if, immediately following such purchase, the fund would have an overweight position in the Benchmark-Constrained Company relative to its benchmark. In addition, at the time of any periodic rebalancing of the fund's portfolio, the fund will dispose of the overweight portion (relative to its benchmark) of its position in any security that, at that time, the Subadvisor determines to be a Benchmark-Constrained Company.

Under normal circumstances, the fund invests at least 80% of its net assets in equity securities of emerging markets companies that meet the Sub-advisor's ESG criteria, as described above. The Sub-advisor will assign each company an ESG rating using proprietary ESG scores. In order to meet the Sub-advisor's ESG criteria, a company must have an ESG score above 0, reflecting more positive characteristics, and, on or after June 12, 2023, must also not be a Restricted Company or a Benchmark-Constrained Company. A negative

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ESG score indicates a lower (or worse) rating. The Sub-advisor assigns companies an ESG score that ranges from –2 to +2, although the range of scores may change over time. This policy is non-fundamental and may be changed only after 60 days' notice to shareholders. The Sub-advisor may not apply ESG criteria to investments that are not subject to the fund's 80% policy, and such investments may not meet the Sub-advisor's ESG criteria.

Emerging markets include countries in the MSCI Emerging Market Index or countries that the Sub-advisor considers to be emerging markets based on an evaluation of their level of economic development or the size and experience of their securities markets.

The fund's equity investments may include common stocks, preferred stocks, convertible securities, warrants, American Depositary Receipts ("ADRs") and Global Depositary Receipts ("GDRs").

The Sub-advisor 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. While the Sub-advisor may consider independent third-party data as a part of its analytical process (and currently uses third-party data in applying certain of the fund's investment policies), the portfolio management team performs its own independent analysis of issuers, through its quantitative model and proprietary scoring system, and does not rely solely on third-party screens.

From time to time, the fund may invest a significant portion of its assets in companies in one or more related industries or sectors. From time to time, the fund may invest a significant portion of its assets in companies in one or more related geographic regions, such as Asian or Pacific Basin countries.

For purposes of the fund's investment strategies, techniques and risks, the term "Investment Manager" includes the Sub-advisor.

#### Risks
It is important to understand that you can lose money by investing in the fund.

**ESG investing risk** **:** Investing with a focus on companies that meet the Sub-advisor's ESG criteria may result in the fund investing in certain types of companies, industries or sectors that the market may not favor. Conversely, investing in such companies may result the fund foregoing investment in securities that outperform the fund's investments in certain environments. In evaluating an investment opportunity, the Sub-advisor may make investment decisions without the availability of optimal ESG-related data (which may be even less available with securitized debt instruments) or based on information and data that is incomplete or inaccurate. ESG metrics are not uniformly defined and applying such metrics involves subjective assessments. ESG scorings and assessments of issuers can vary across third-party data providers and may change over time. ESG information from third-party data providers may be incomplete, inaccurate or unavailable, particularly with respect to

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companies in emerging market countries, which may adversely impact the investment process. In addition, a company's business practices, products or services may change over time. As a result of these possibilities, among others, the fund may temporarily hold securities that are inconsistent with the fund's ESG investment criteria. Regulatory changes or interpretations regarding the definitions and/or use of ESG criteria could have a material adverse effect on the fund's ability to invest in accordance with its investment policies and/or achieve its investment objective, as well as the ability of certain classes of investors to invest in funds, such as the fund, whose strategies include ESG criteria.

**Model and data risk** **:** If the quantitative models or data that are used in managing the fund prove to be incorrect or incomplete, investment decisions made in reliance on the models or data may not produce the desired results and the fund may realize losses. Additionally, market movements are likely to change the risk levels and risk allocations of the fund. Investments made based on quantitative models may perform differently from the market as a whole.

**Fluctuation of net asset value and share price risk:** Shares may trade at a larger premium or discount to the fund's net asset value than shares of other ETFs. The net asset value of the fund will generally fluctuate with changes in the market value of the fund's holdings. The fund's shares can be bought and sold in the secondary market at market prices. Disruptions to creations and redemptions, the existence of extreme market volatility or potential lack of an active trading market for the fund's shares may result in the fund's shares trading significantly above (at a premium) or below (at a discount) net asset value or the intraday value of the fund's holdings. In addition, in stressed market conditions or periods of market disruption or volatility, the market for fund shares may become less liquid in response to deteriorating liquidity in the markets for the fund's underlying portfolio holdings.

**Trading issues risk** **:** The fund has a limited public trading history. There can be no assurance that an active trading market will develop or be maintained or that the market for fund shares will operate as intended, which could lead to the fund's shares trading at wider spreads and larger premiums and discounts to net asset value than other actively managed ETFs. As a result, it may cost investors more to trade fund shares than shares of other ETFs. There is no guarantee that the fund will be able to attract market makers and authorized participants. Market makers and authorized participants are not obligated to make a market in the fund's shares or to submit purchase and redemption orders for creation units. The market prices of the fund's shares are expected to fluctuate, in some cases materially, in response to changes in the fund's net asset value, the intraday value of the fund's holdings and supply and demand for the fund's shares. The Investment Manager cannot predict whether the fund's shares will trade above, below or at their net asset value or the intraday value of the fund's holdings. During such periods, investors may incur significant losses if they sell shares.

Prospectus 5

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The securities held by the fund may be traded in markets that close at a different time than the exchange on which the fund's shares are listed. Liquidity in those securities may be reduced after the applicable closing times. Accordingly, during the time when the exchange is open but after the applicable market closing, fixing or settlement times, bid-ask spreads on the exchange and the corresponding premium or discount to the shares' net asset value may widen.

**Large shareholder transaction risk:** The fund is subject to the risk that shareholders will purchase or redeem large quantities of shares of the fund. The fund may be an investment option for mutual funds that are managed by the Investment Manager, as defined below, and its affiliates as "funds of funds." Additionally, other investors from time to time may make substantial investments in the fund. Such shareholders may at times be considered to control the fund. In addition, a large number of shareholders may collectively purchase or redeem fund shares in large amounts rapidly or unexpectedly. Large shareholder transactions may adversely affect the fund's liquidity and net assets. These redemptions may also adversely affect the fund's performance if the fund is forced to sell securities, which may also increase the fund's brokerage costs.

**Authorized participant concentration risk** **:** Only an authorized participant may engage in creation and redemption transactions directly with the fund. The fund may have a limited number of financial institutions that act as authorized participants, none of which are obligated to engage in creation and/or redemption transactions. To the extent that those authorized participants do not engage in creation and redemption orders, there may be a significantly diminished trading market for fund shares or fund shares may trade at a discount (or premium) to net asset value and possibly face trading halts and/or de-listing.

**Cash transactions risk** **:** Unlike certain ETFs, the fund may effect creations and redemptions in cash or partially in cash. Therefore, it may be required to sell portfolio securities and subsequently recognize gains on such sales that the fund might not have recognized if it were to distribute portfolio securities in-kind. As such, investments in the fund's shares may be less tax-efficient than an investment in an ETF that distributes portfolio securities entirely in-kind.

**Market risk** **:** 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, outbreaks of infectious illnesses or other widespread public health issues, and factors related to a specific issuer, asset class, geography, industry or sector. These and other factors may lead to increased volatility and reduced liquidity in the fund's portfolio holdings, may negatively impact the fund's performance, and may exacerbate other risks to which the fund is subject.

**Common stock risk** **:** Common stock represents an ownership interest in a company. The value of a company's stock may fall or fail to rise as a result of

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factors directly relating to that company, such as decisions made by its management or lower demand for the company's products or services. A stock's value may also fall because of factors affecting not just the company, but also other companies in the same industry or in a number of different industries, such as increases in production costs. Growth stocks may be more susceptible to earnings disappointments, and value stocks may fail to rebound. These risks are generally greater for small and midsize companies.

**Foreign** **investments risk:** The value of international investments traded in foreign currencies may be adversely impacted by fluctuations in exchange rates. International investments, particularly investments in emerging markets, may carry risks associated with potentially less stable economies or governments (such as the risk of seizure by a foreign government, the imposition of currency or other restrictions, or high levels of inflation), and may be or become illiquid. There may be less publicly-available information, or less reliable publicly-available information, about foreign companies (including information related to companies' ESG practices), particularly with respect to emerging market companies, than publicly-available information regarding U.S. companies. As a result, the fund's ability to evaluate a foreign company, including with respect to its ESG or sustainability practices, may be more limited than its ability to evaluate a U.S. company.

**Small and midsize companies risk** **:** Stocks of small and midsize companies often trade in smaller volumes, and their prices may fluctuate more than stocks of larger companies. Stocks of these companies may therefore be more vulnerable to adverse developments than those of larger companies.

**Industry or sector concentration risk** **:** From time to time, the fund may invest a significant portion of its assets in companies in one or more related industries or sectors, which would make the fund more vulnerable to adverse developments affecting those industries or sectors.

**Geographic focus** **:** If the fund invests a substantial percentage of its assets in issuers located in a single country, a small number of countries, or a particular geographic region, such as Asian or Pacific Basin countries, the fund's performance will likely be closely tied to the market, currency, political, economic, regulatory, geopolitical, and other conditions in such countries or region. These conditions could generally have a greater effect on the fund than they would on a more geographically diversified fund, which may result in greater losses and volatility.

**Management and operational risk** **:** There is no guarantee that the investment techniques, analyses, or judgments that the Investment Manager applies in making investment decisions for the fund will produce the intended outcome or that the investments selected for the fund will perform as well as other securities that were not selected for the fund. The Investment Manager, or the fund's other service providers, may experience disruptions or operating errors that could negatively impact the fund.

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The fund may not achieve its goal, and it is not intended to be a complete investment program. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

### Performance
The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund's performance from year to year. The table shows the average annual total returns of the fund and also compares the fund's performance with the average annual total returns of a broad measure of market performance and an additional index with characteristics relevant to the fund. The fund makes updated performance information, including its current net asset value per share, available at www.franklintempleton.com.

*The fund's past performance (before and after taxes) is not necessarily an indication of how the fund will perform in the future.* 

Annual total returns

![LOGO](g842776g6dsp09.jpg)

2024

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|  Best Quarter: | Q3 2024 | 8.53% |
|  Worst Quarter: | Q4 2024 | -7.30% |
|  As of June 30, 2025, the fund's year-to-date return was 17.16%. | As of June 30, 2025, the fund's year-to-date return was 17.16%. | As of June 30, 2025, the fund's year-to-date return was 17.16%. |

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#### Average annual total returns
(for periods ended 12/31/24)

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| **Putnam PanAgora ESG Emerging Markets Equity ETF** | **1 year** | **Since** <br> **Inception<sup>1</sup>**  |
| Return before taxes | 8.37% | 4.98% |
| Return after taxes on distributions | 7.58% | 4.16% |
| Return after taxes on distributions and sales of fund shares | 5.57% | 3.63% |
| MSCI All Country World Ex-U.S. Index-NR (reflects no deduction for fees, expenses or taxes but are net of dividend tax withholdings) | 5.53% | 7.11% |
| MSCI Emerging Markets Index-NR (index reflects no deduction for fees, expenses or taxes but are net of dividend tax withholding) | 7.50% | 4.92% |

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<sup>1.</sup> Since inception January 19, 2023.

After-tax returns reflect the historical highest individual federal marginal income tax rates and do not reflect state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. These after-tax returns do not apply if you hold your fund shares through a 401(k) plan, an IRA, or another tax-advantaged arrangement.

Important data provider notices and terms are available at www.franklintempletondatasources.com. All data is subject to change.

### Your fund's management

#### Investment Manager
Putnam Investment Management, LLC ("Putnam Management" or the "Investment Manager")

#### Sub-advisor
PanAgora Asset Management, Inc. ("PanAgora" or the "Sub-advisor")

#### Portfolio managers
**George D. Mussalli, CFA** 

Global Chief Investment Officer at PanAgora and portfolio manager of the fund since 2023.

**Richard Tan, CFA** 

Managing Director & Head of Stock Selector Equity Investments of PanAgora and portfolio manager of the fund since 2023.

#### Purchase and sale of fund shares
Shares of the fund are listed and traded on an exchange, and individual fund shares may only be bought and sold in the secondary market through a broker or dealer at market price. These transactions, which do not involve the fund, are made at market prices that may vary throughout the day, rather than at net asset value. Shares of the fund may trade at a price greater than the fund's net asset value (premium) or less than the fund's net asset value (discount). An investor may incur costs attributable to the difference between the highest

Prospectus 9

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price a buyer is willing to pay to purchase shares (bid) and the lowest price a seller is willing to accept for shares (ask) when buying or selling fund shares in the secondary market (the "bid-ask spread"). Recent information, including information regarding the fund's net asset value, market price, premiums and discounts, and bid-ask spread, is available at www.franklintempleton.com.

#### Tax information
The fund's distributions will be taxed as ordinary income or capital gains unless you hold the shares through a tax-advantaged arrangement, in which case you will generally be taxed only upon withdrawal of monies from the arrangement.

#### Financial intermediary compensation
If you purchase the fund through a broker/dealer or other financial intermediary (such as a bank or financial professional), the fund and its related companies may pay that intermediary for the sale of fund shares and related services. Please bear in mind that these payments may create a conflict of interest by influencing the broker/dealer or other intermediary to recommend the fund over another investment. Ask your advisor or visit your advisor's website for more information.

### Fund details

#### Principal investment strategies
The fund invests mainly in common stocks (growth or value stocks or both) of emerging markets companies of any size with a focus on companies that the Sub-advisor believes offer attractive benchmark-relative returns and exhibit positive ESG metrics. In evaluating and selecting investments for the fund, the Sub-advisor employs a proprietary framework using quantitative models that identify companies that offer above-market return potential based on their ESG metrics, together with other proprietary factors measuring a company's financial and operational health, and then construct a portfolio that integrates return potential and ESG metrics.

The Sub-advisor uses advanced statistical and machine learning techniques, together with third-party and proprietary data sources, in evaluating companies' ESG metrics and return potential. Metrics designed to evaluate companies' environmental practices may include third-party or proprietary data sources, including those regarding a company's environmental footprint or its environmental efficiencies. Metrics designed to evaluate companies' social practices may include third-party or proprietary data sources, including those regarding board diversity levels at a company. Metrics designed to evaluate companies' governance practices may include third-party or proprietary data sources, including those regarding a company's compensation practices. The ESG metrics and information used in the portfolio construction process may change over time and may not be relevant to all companies that are eligible for investment by the fund.

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In addition, the fund will not invest in securities of companies that the Sub-advisor, based on third-party data, determines at the time of investment to have a category 5 controversy rating (an assessment of a company's involvement in incidents with negative ESG implications) or to be substantially engaged in Arctic drilling or in the thermal coal, palm oil, controversial weapons or tobacco industries (each, a "Restricted Company"). In addition, at the time of any periodic rebalancing of the fund's portfolio, the fund will dispose of its position in any security that, at that time, the Sub-advisor determines to be a Restricted Company. Further, the fund will not purchase securities of any company that the Sub-advisor, based on third-party data, determines at the time of investment to have a severe ESG risk rating (which measures a company's exposure to industry-specific material ESG risks and how well a company is managing those risks) or to be classified as non-compliant under the United Nations Global Compact principles (each, a "Benchmark-Constrained Company") if, immediately following such purchase, the fund would have an overweight position in the Benchmark-Constrained Company relative to its benchmark. In addition, at the time of any periodic rebalancing of the fund's portfolio, the fund will dispose of the overweight portion (relative to its benchmark) of its position in any security that, at that time, the Sub-advisor determines to be a Benchmark-Constrained Company.

Under normal circumstances, the fund invests at least 80% of its net assets in equity securities of emerging markets companies that meet the Sub-advisor's ESG criteria, as described above. The Sub-advisor will assign each company an ESG rating using proprietary ESG scores. In order to meet the Sub-advisor's ESG criteria, a company must have an ESG score above 0, reflecting more positive characteristics, and, on or after June 12, 2023, must also not be a Restricted Company or a Benchmark-Constrained Company. A negative ESG score indicates a lower (or worse) rating. The Sub-advisor assigns companies an ESG score that ranges from –2 to +2, although the range of scores may change over time. This policy is non-fundamental and may be changed only after 60 days' notice to shareholders. The Sub-advisor may not apply ESG criteria to investments that are not subject to the fund's 80% policy, and such investments may not meet the Sub-advisor's ESG criteria.

Emerging markets include countries in the MSCI Emerging Market Index or countries that the Sub-advisor considers to be emerging markets based on an evaluation of their level of economic development or the size and experience of their securities markets.

The fund's equity investments may include common stocks, preferred stocks, convertible securities, warrants, ADRs and GDRs.

The fund may engage in a variety of transactions involving derivatives, such as certain foreign currency transactions, futures, options, warrants, and swap contracts, although they do not represent a primary focus of the fund.

The Sub-advisor 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

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buy or sell investments. While the Sub-advisor may consider independent third-party data as a part of its analytical process (and currently uses third-party data in applying certain of the fund's investment restrictions), the portfolio management team performs its own independent analysis of issuers, through its quantitative model and proprietary scoring system, and does not rely solely on third-party screens.

From time to time, the fund may invest a significant portion of its assets in companies in one or more related industries or sectors. From time to time, the fund may invest a significant portion of its assets in companies in one or more related geographic regions, such as Asian or Pacific Basin countries.

#### Principal investment risks
The principal and certain additional risks of investing in the fund are described below. These risks and other factors may adversely affect the fund's net asset value, market price and performance. When you sell your shares, they may be worth more or less than what you paid for them, which means that you could lose money as a result of your investment. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund may not achieve its investment objective, and it is not intended to be a complete investment program. The fund's Statement of Additional Information ("SAI") contains additional information about the fund's investment policies and risks.

**ESG investing risk** **:** Investing with a focus on companies that meet the Sub-advisor's ESG criteria may result in the fund investing in certain types of companies, industries or sectors that the market may not favor. Conversely, investing in such companies may result in the fund foregoing investment in securities that outperform the fund's investments in certain environments. In evaluating an investment opportunity, the Sub-advisor may make investment decisions without the availability of optimal ESG-related data (which may be even less available with securitized debt instruments) or based on information and data that is incomplete or inaccurate. ESG criteria are not uniformly defined and applying such factors involves subjective assessments. ESG scorings and assessments of issuers can vary across third-party data providers and may change over time. ESG information from third-party data providers may be incomplete, inaccurate or unavailable, particularly with respect to companies in emerging market countries, which may adversely impact the investment process. In addition, a company's business practices, products or services may change over time. As a result of these possibilities, among others, the fund may temporarily hold securities that are inconsistent with the fund's ESG investment criteria. Regulatory changes or interpretations regarding the definitions and/or use of ESG criteria could have a material adverse effect on the fund's ability to invest in accordance with its investment policies and/or achieve its investment objective, as well as the ability of certain classes of investors to invest in funds, such as the fund, whose strategies include ESG criteria. There may be limitations with respect to availability of ESG data in certain sectors, as well as limited availability of investments with

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positive ESG assessments in certain sectors. The Sub-advisor's evaluation of ESG criteria may change over time.

**Model and data risk** **:** Given the nature of the fund's investments and strategies, the Sub-advisor relies heavily on its proprietary models and on data supplied by third parties. The Sub-advisor uses models and data to, among other things, construct sets of transactions and investments, provide risk management insights and assist in hedging the fund's investments. The Sub-advisor regularly enhances and updates its models to reflect its developing research, fundamental analysis, and access to new data. If the quantitative models or data used in managing the fund prove to be incorrect or incomplete, investment decisions made in reliance on the models or data may not produce the desired results and may cause the fund to underperform its benchmark or other funds with a similar investment goal, and the fund may realize losses. For example, the Sub-advisor may, in reliance on faulty models or data, be unsuccessful in its efforts to manage the fund's overall level of volatility and its efforts to diversify risk. Any hedging based on faulty models and data may prove to be unsuccessful. In addition, models may incorrectly forecast future behavior, leading to potential losses on a cash flow and/or mark-to-market basis. Use of these models in unforeseen or certain low-probability scenarios (often involving a market disruption of some kind) also may result in losses for the fund. All models require data. Some of the models that the Sub-advisor may use are typically constructed based on historical data, and the success of these models is dependent largely on the accuracy and reliability of the supplied historical data. If incorrect data is entered into a model, the resulting output will be incorrect. As a result, any investment decisions made in reliance on the incorrect output from a model may not produce the desired results and the fund may realize losses. Even when data is correctly inputted into a model, the resulting information may differ, sometimes substantially, from other available data. For example, "model prices" that are provided by a model will often differ substantially from market prices, particularly for instruments that are complex in nature, such as derivatives. Models also rely on the proper functioning of hardware and technology, which are subject to disruption risk. There is no guarantee that the hardware and technology on which the models rely will be uninterrupted or error free, or that any defects in such hardware or technology will be able to be corrected in a short time period.

**Fluctuation of** **net asset value and share price risk** **:** Shares may trade at a larger premium or discount to net asset value than shares of other ETFs. The net asset value of the fund's shares will generally fluctuate with changes in the market value of the fund's holdings. The fund's shares are listed on an exchange and can be bought and sold in the secondary market at market prices. The market prices of shares will fluctuate in accordance with changes in net asset value and supply and demand on the listing exchange. Although the arbitrage process is designed to permit the shares of the fund to trade at market prices that are at or close to net asset value, it is possible that the market price and net asset value will vary significantly. As a result, you may sustain losses if you pay more than the shares' net asset value when you purchase shares or receive less than the shares' net asset value when you sell

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shares, in the secondary market. During periods of disruptions to creations and redemptions, the existence of extreme market volatility, or lack of an active trading market for the fund's shares, the market price of fund shares is more likely to differ significantly from the fund's net asset value or the intraday value of the fund's holdings. During such periods, you may be unable to sell your shares or may incur significant losses if you sell your shares. There are various methods by which investors can purchase and sell shares and various orders that may be placed. Investors should consult their financial intermediary before purchasing or selling shares of the fund. Disruptions at market makers, authorized participants or market participants may also result in significant differences between the market price of the fund's shares and the fund's net asset value. In addition, in stressed market conditions or periods of market disruption or volatility, the market for shares may become less liquid in response to deteriorating liquidity in the markets for the fund's underlying portfolio holdings.

The market price of shares during the trading day, like the price of any exchange-traded security, includes a "bid/ask" spread charged by the exchange specialist, market makers, or other participants that trade the particular security. In times of severe market disruption or volatility, the bid/ask spread can increase significantly. At those times, shares are most likely to be traded at a discount to net asset value, and the discount is likely to be greatest when the price of shares is falling fastest, which may be the time that you most want to sell your shares.

**Trading issues risk:** The fund has a limited public trading history. Although shares are listed on an exchange, there can be no assurance that an active trading market or requirements to remain listed will be met or maintained, or that the market for fund shares will operate as intended. If the market does not operate as intended, it could lead to the fund's shares trading at wider spreads and larger premiums and discounts to net asset value than other actively managed ETFs, particularly during periods of market disruption or volatility. As a result, it may cost investors more to trade fund shares than shares of other ETFs.

There is no guarantee that the fund will be able to attract market makers and authorized participants. There are no obligations of market makers to make a market in the fund's shares or of authorized participants to submit purchase or redemption orders for creation units.

The market prices of the fund's shares are expected to fluctuate, in some cases materially, in response to changes in the fund's net asset value, the intraday value of the fund's holdings and supply and demand for the fund's shares. The Investment Manager cannot predict whether the fund's shares will trade above, below or at their net asset value or the intraday value of the fund's holdings. During such periods, investors may incur significant losses if they sell shares.

The securities held by the fund may be traded in markets that close at a different time than the exchange on which the fund's shares are listed. Liquidity

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in those securities may be reduced after the applicable closing times. Accordingly, during the time when the exchange is open but after the applicable market closing, fixing or settlement times, bid-ask spreads on the exchange and the corresponding premium or discount to the shares' net asset value may widen.

In addition, trading of shares in the secondary market may be halted, for example, due to activation of market-wide "circuit breakers." If trading halts or an unanticipated early closing of the listing exchange occurs, a shareholder may be unable to purchase or sell shares of the fund.

If the fund's shares are delisted from the listing exchange, the Investment Manager may seek to list the fund shares on another market, merge the fund with another exchange-traded fund or traditional mutual fund, or redeem the fund shares at net asset value.

Shares of the fund, similar to shares of other issuers listed on a stock exchange, may be sold short and are therefore subject to the risk of increased volatility and price decreases associated with being sold short.

**Large shareholder transaction risk** **:** The fund is subject to the risk that shareholders will purchase or redeem large quantities of shares of the fund (such purchases or redemptions, "large shareholder transactions"). The fund may be an investment option for mutual funds that are managed by the Investment Manager and its affiliates as "funds of funds." Additionally, other investors from time to time may make substantial investments in the fund. Such shareholders may at times be considered to control the fund. In addition, a large number of shareholders collectively may purchase or redeem fund shares in large amounts rapidly or unexpectedly. A number of circumstances may cause the fund to experience large shareholder transactions, such as changes in the eligibility criteria for the fund; liquidations, reorganizations, repositionings, or other announced fund events; or changes in investment objectives, strategies, policies, risks, or investment personnel. Large redemptions may be more likely during times of market stress or reduced liquidity, exacerbating the potential impact on the fund.

Large shareholder transactions may adversely affect the fund's liquidity and net assets. These transactions could adversely affect the fund's performance if the fund is forced to sell portfolio securities to satisfy redemption requests or purchase securities for the portfolio in connection with the investment of subscription proceeds when the fund would otherwise not do so, and at unfavorable prices, which may increase the fund's brokerage costs and accelerate the realization of taxable income and/or gains to shareholders. The effects of taxable income and/or gains resulting from large shareholder transactions would particularly impact non-redeeming shareholders who do not hold their fund shares in an IRA, 401(k) plan or other tax-advantaged plan. To the extent that such transactions result in short-term capital gains, such gains will generally be taxed at the ordinary income tax rate for shareholders who hold fund shares in a taxable account. In addition, fund returns also may be

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adversely affected if the fund holds a portion of its assets in liquid, cash-like investments in connection with or in anticipation of shareholder redemptions.

**Authorized participant concentration risk** **:** Only authorized participants may engage in creation and redemption transactions directly with the fund. The fund may have a limited number of financial institutions that act as authorized participants, none of which are obligated to engage in creation and/or redemption transactions. Decisions by market makers or authorized participants to reduce their role with respect to market making or creation and redemption activities during times of market stress, or a decline in the number of authorized participants due to decisions to exit the business, bankruptcy, or other factors, could inhibit the effectiveness of the arbitrage process in maintaining the relationship between the underlying value of the fund's portfolio securities and the market price of fund shares. To the extent no other authorized participants are able to step forward to create or redeem, shares may trade at a discount (or premium) to net asset value and possibly face delisting.

**Cash transactions risk** **:** Unlike certain ETFs, the fund may effect creations and redemptions in cash or partially in cash. Therefore, it may be required to sell portfolio securities and subsequently recognize gains on such sales that the fund might not have recognized if it were to distribute portfolio securities in-kind. As such, investments in the fund's shares may be less tax-efficient than an investment in an ETF that distributes portfolio securities entirely in-kind.

**Market risk** **:** 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 (including perceptions about monetary policy, interest rates, inflation or the risk of default); government actions (including protectionist measures, intervention in the financial markets or other regulation, and changes in fiscal, monetary or tax policies); geopolitical events or changes (including natural disasters, terrorism and war); outbreaks of infectious illnesses or other widespread public health issues (including epidemics and pandemics); and factors related to a specific issuer, asset class, geography, industry, or sector. Foreign financial markets have their own market risks, and they may be more or less volatile than U.S. markets and may move in different directions. During a general downturn in financial markets, multiple asset classes may decline in value simultaneously. These and other factors may lead to increased volatility and reduced liquidity in the fund's portfolio holdings. During those periods, the fund may experience high levels of shareholder redemptions, and may have to sell securities at times when it would otherwise not do so, and at unfavorable prices. These risks may be exacerbated during economic downturns or other periods of economic stress.

The COVID-19 pandemic and efforts to contain its spread have resulted in, among other effects, significant market volatility, exchange trading suspensions and closures, declines in global financial markets, higher default rates, significant changes in fiscal and monetary policies, and economic downturns and recessions. The effects of the COVID-19 pandemic have

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negatively affected, and may continue to negatively affect, the global economy, the economies of the United States and other individual countries, the financial performance of individual issuers, sectors, industries, asset classes, and markets, and the value, volatility, and liquidity of particular securities and other assets. The effects of the COVID-19 pandemic also are likely to exacerbate other risks that apply to the fund, including the risks disclosed in this prospectus, which could negatively impact the fund's performance and lead to losses on your investment in the fund. The duration of the COVID-19 pandemic and its effects cannot be determined with certainty.

The United States and other countries are periodically involved in disputes over trade and other matters, which may result in tariffs, investment restrictions and adverse impacts on affected companies and securities. For example, the United States has imposed tariffs and other trade barriers on Chinese exports, has restricted sales of certain categories of goods to China, and has established barriers to investments in China. Trade disputes may adversely affect the economies of the United States and its trading partners, as well as companies directly or indirectly affected and financial markets generally. The United States government has prohibited U.S. persons from investing in Chinese companies designated as related to the Chinese military. These and possible future restrictions could limit the fund's opportunities for investment and require the sale of securities at a loss or make them illiquid. Moreover, the Chinese government is involved in a longstanding dispute with Taiwan that has included threats of invasion. If the political climate between the United States and China does not improve or continues to deteriorate, if China were to attempt unification of Taiwan by force, or if other geopolitical conflicts develop or get worse, economies, markets and individual securities may be severely affected both regionally and globally, and the value of the fund's assets may go down.

**Geographic focus** **:** If the fund invests a substantial percentage of its assets in issuers located in a single country, a small number of countries, or a particular geographic region, such as Asian or Pacific Basin countries, the fund's performance will likely be closely tied to the market, currency, political, economic, regulatory, geopolitical, and other conditions in such countries or region. These conditions could generally have a greater effect on the fund than they would on a more geographically diversified fund, which may result in greater losses and volatility. Many Asian and Pacific Basin countries may be either developing (also known as emerging) or newly industrialized. These economies may be characterized by frequent currency fluctuations and restrictions, rising unemployment, rapid fluctuation in inflation and interest rates, reliance on exports and international trade, and less efficient markets. Furthermore, political and social unrest in some Asian and Pacific Basin countries could cause economic and market uncertainty in the region. For further information about risks of investing in Asian and Pacific Basin countries, see Risks of investing in the Asia Pacific Region in the SAI.

**Common stock risk** **:** Common stock represents an ownership interest in a company. The value of a company's stock may fall as a result of factors

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directly relating to that company, such as decisions made by its management or lower demand for the company's products or services. A stock's value may also fall because of factors affecting not just the company, but also other companies in the same industry or in a number of different industries, such as increases in production costs.

The value of a company's stock may also be affected by changes in financial markets that are relatively unrelated to the company or its industry, such as changes in interest rates, currency exchange rates, or inflation rates. In addition, a company's stock generally pays dividends only after the company invests in its own business and makes required payments to holders of its bonds and other debt. For this reason, the value of a company's stock will usually react more strongly than its bonds and other debt to actual or perceived changes in the company's financial condition or prospects.

<u>Growth stocks</u>**:** Companies whose stocks the Investment Manager believes are fast-growing may trade at a higher multiple of current earnings than other stocks. The values of these stocks may be more sensitive to changes in current or expected earnings or to heightened levels of inflation than the values of other stocks. If the Investment Manager's assessment of the prospects for a company's earnings growth is wrong, or if their judgment of how other investors will value the company's earnings growth is wrong, then the price of the company's stock may fall or may not approach the value that the Investment Manager has placed on it. In addition, growth stocks, at times, may not perform as well as value stocks or the stock market in general, and may be out of favor with investors for varying periods of time.

<u>Value stocks</u>: Companies whose stocks the Investment Manager believes are undervalued by the market may have experienced adverse business developments or may be subject to special risks that have caused their stocks to be out of favor. If the Investment Manager's assessment of a company's prospects is wrong, or if other investors do not similarly recognize the value of the company, then the price of the company's stock may fall or may not approach the value that the Investment Manager has placed on it. In addition, value stocks, at times, may not perform as well as growth stocks or the stock market in general, and may be out of favor with investors for varying periods of time.

**Foreign investments risk** **:** Foreign investments involve certain special risks, including:

● Unfavorable changes in currency exchange rates: Foreign investments are typically issued and traded in foreign currencies. As a result, their values may be affected by changes in exchange rates between foreign currencies and the U.S. dollar.

● Political and economic developments: Foreign investments may be subject to the risks of seizure by a foreign government, direct or indirect impact of sovereign debt default, imposition of economic sanctions, tariffs, trade restrictions, currency restrictions or similar actions (or retaliatory measures taken in response to such actions), and tax increases.

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● Unreliable or untimely information: There may be less information publicly available about a foreign company (including information related to companies' ESG practices, particularly with respect to emerging market companies) than about most publicly-traded U.S. companies, and foreign companies are usually not subject to accounting, auditing and financial reporting standards and practices as stringent as those in the United States. As a result, the Investment Manager's ability to evaluate a foreign company, including with respect to its ESG or sustainability practices, may be more limited than its ability to evaluate a U.S. company. Foreign securities may trade on markets that are closed when U.S. markets are open. As a result, accurate pricing information based on foreign market prices may not always be available.

● Limited legal recourse: Legal remedies for investors may be more limited than the remedies available in the United States.

● Limited markets: Certain foreign investments may be less liquid (harder to buy and sell) and more volatile than most U.S. investments, which means the fund may at times be unable to sell these foreign investments at desirable prices. For the same reason, the Investment Manager may at times find it difficult to value the fund's foreign investments.

● Trading practices: Brokerage commissions and other fees are generally higher for foreign investments than for U.S. investments. The procedures and rules governing foreign transactions and custody may also involve delays in payment, delivery or recovery of money or investments.

● Sovereign issuers: The willingness and ability of sovereign issuers to pay principal and interest on government securities depends on various economic factors, including the issuer's balance of payments, overall debt level, and cash flow from tax or other revenues. In addition, there may be no legal recourse for investors in the event of default by a sovereign government.

The risks of foreign investments are typically increased in countries with less developed markets, which are sometimes referred to as emerging markets. Emerging markets may have less developed economies and legal and regulatory systems, and may be susceptible to greater political and economic instability than developed foreign markets. Countries with emerging markets are also more likely to experience high levels of inflation or currency devaluation, and investments in emerging markets may be more volatile and less liquid than investments in developed markets. For these and other reasons, investments in emerging markets are often considered speculative.

Certain risks related to foreign investments may also apply to some extent to U.S.-traded investments that are denominated in foreign currencies, investments in U.S. companies or issuers that are traded in foreign markets or investments in U.S. companies or issuers that have significant foreign operations.

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**Industry or sector concentration risk** **:** From time to time, the fund may invest a significant portion of its assets in companies in one or more related industries or sectors, which would make the fund more vulnerable to adverse developments affecting those industries or sectors.

**Derivatives risk** **:** The fund may engage in a variety of transactions involving derivatives, such as futures, options, certain foreign currency transactions, warrants and swap contracts although they do not represent a primary focus of the fund. Derivatives are financial instruments whose value depends upon, or is derived from, the value of something else, such as one or more underlying investments, pools of investments, indexes or currencies. The fund may make use of "short" derivative positions, the values of which typically move in the opposite direction from the price of the underlying investment, pool of investments, index or currency. The fund may use derivatives both for hedging and non-hedging purposes. For example, the fund may use foreign currency transactions to increase or decrease the fund's exposure to a particular currency or group of currencies. The fund may also use derivatives as a substitute for a direct investment in the securities of one or more issuers. However, the fund may also choose not to use derivatives based on the Investment Manager's evaluation of market conditions or the availability of suitable derivatives. Investments in derivatives may be applied toward meeting a requirement to invest in a particular kind of investment if the derivatives have economic characteristics similar to that investment.

Derivatives involve special risks and may result in losses. The successful use of derivatives depends on the Investment Manager's ability to manage these sophisticated instruments. Some derivatives are "leveraged," which means they provide the fund with investment exposure greater than the value of the fund's investment in the derivatives. As a result, these derivatives may magnify or otherwise increase investment losses to the fund. The risk of loss from certain short derivative positions is theoretically unlimited. The value of derivatives may move in unexpected ways due to unanticipated market movements, the use of leverage, imperfect correlation between the derivative instrument and the reference asset, or other factors, especially in unusual market conditions, and volatility in the value of derivatives could adversely impact the fund's returns, obligations and exposures.

Other risks arise from the potential inability to terminate or sell derivative positions. Derivatives may be subject to liquidity risk due to the fund's obligation to make payments of margin, collateral, or settlement payments to counterparties. A liquid secondary market may not always exist for the fund's derivative positions. In fact, certain over-the-counter instruments (investments not traded on an exchange) may not be liquid. Over-the-counter instruments also involve the risk that the other party to the derivative transaction may not be willing or able to meet its obligations with respect to the derivative transaction. The risk of a party failing to meet its obligations may increase if the fund has significant exposure to that counterparty. Derivative transactions may also be subject to operational risk, including due to documentation and settlement issues, system failures, inadequate controls and human error, and

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legal risk due to insufficient documentation, insufficient capacity or authority of a counterparty, or issues with respect to the legality or enforceability of the derivative contract. For further information about additional types and risks of derivatives, see *Miscellaneous Investments, Investment Practices and Risks* in the SAI.

**Small and midsize companies risk** **:** These companies, many of which may have a market capitalization of less than $1 billion, are more likely than larger companies to have limited product lines, markets or financial resources, lack profitability or depend on a small management group. Stocks of these companies often trade in smaller volumes, and their prices may fluctuate more than stocks of larger companies. Stocks of small and midsize companies may therefore be more vulnerable to adverse developments than those of larger companies. In addition, stocks of small and midsize companies, at times, may not perform as well as stocks of larger companies or the stock market in general, and may be out of favor with investors for varying periods of time.

**Liquidity and illiquid investments** **risk:** The fund may invest up to 15% of its net assets in illiquid investments, which may be considered speculative and which may be difficult to sell. The sale of many of these investments is prohibited or limited by law or contract. Some investments may be difficult to value for purposes of determining the fund's net asset value. Certain other investments may not have an active trading market due to adverse market, economic, industry, political, regulatory, geopolitical, environmental, public health, and other conditions, including investors trying to sell large quantities of a particular investment or type of investment, or lack of market makers or other buyers for a particular investment or type of investment. The fund may not be able to sell its illiquid investments when the Investment Manager considers it desirable to do so, or the fund may be able to sell them only at less than their value.

**Management and operational risk** **:** The fund is actively managed and its performance will reflect, in part, the Investment Manager's ability to make investment decisions that seek to achieve the fund's investment objective. There is no guarantee that the investment techniques, analyses, or judgments that the Investment Manager applies in making investment decisions for the fund will produce the intended outcome or that the investments selected for the fund will perform as well as other securities that were not selected for the fund. As a result, the fund may underperform its benchmark or other funds with a similar investment goal and may realize losses. In addition, the Investment Manager, or the fund's other service providers, may experience disruptions or operating errors that could negatively impact the fund. Although service providers may have operational risk management policies and procedures and take appropriate precautions to avoid and mitigate risks that could lead to disruptions and operating errors, it may not be possible to identify all of the operational risks that may affect the fund or to develop processes and controls to completely eliminate or mitigate their occurrence or effects.

**Portfolio turnover rate** **:** The fund's portfolio turnover rate measures how frequently the fund buys and sells investments. A portfolio turnover rate of

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100%, for example, would mean that the fund sold and replaced securities valued at 100% of the fund's assets within a one-year period. Funds with high turnover may be more likely to realize capital gains that must be distributed to shareholders as taxable income. High turnover may also cause a fund to pay more brokerage commissions and other transaction costs (including imputed transaction costs), which may detract from performance. The fund's portfolio turnover rate and the amount of brokerage commissions it pays and transaction costs it incurs will vary over time based on market conditions.

**Other investments:** In addition to the main investment strategies described above, the fund may also invest in cash or cash equivalents, including money market instruments or short-term instruments such as commercial paper, bank obligations (e.g., certificates of deposit and bankers' acceptances), repurchase agreements, and U.S. Treasury bills or other government obligations. The fund may also from time to time invest all or a portion of its assets, including any cash balances, in money market and/or short-term bond funds advised by the Investment Manager or its affiliates. The percentage of the fund invested in cash and cash equivalents and such money market and short-term bond funds is expected to vary over time and will depend on various factors, including market conditions, purchase and redemption activity by fund shareholders, and the Investment Manager's assessment of the cash level that is appropriate to allow the fund to pursue investment opportunities as they arise and to meet shareholder redemption requests. Large cash positions may dampen performance and may prevent the fund from achieving its goal. These practices may be subject to other risks, as described under *Miscellaneous Investments, Investment Practices and Risks* in the SAI.

**Temporary defensive strategies:** In response to adverse market, economic, political or other conditions, the fund may take temporary defensive positions, such as investing some or all of the fund's assets in cash and cash equivalents, that differ from the fund's usual investment strategies. However, the fund may choose not to use these temporary defensive strategies for a variety of reasons, even in very volatile market conditions. If the fund employs these strategies, the fund may miss out on investment opportunities and may not achieve its goal. Additionally, while temporary defensive strategies are mainly designed to limit losses, they may not work as intended.

**Changes in policies:** The Trustees may change the fund's goal, investment strategies and other policies set forth in this prospectus without shareholder approval, except as otherwise provided in the prospectus or SAI.

### Fund management

#### The fund's investment manager
Putnam Management, 100 Federal Street, Boston MA 02110, is the fund's investment manager, responsible for making investment decisions for the fund and managing the fund's other affairs and business. Putnam Management is an indirect, wholly-owned subsidiary of Franklin Resources Inc. ("Resources").

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Together, Putnam Management and its affiliates manage, as of June 30, 2025, $1.61 trillion in assets, and have been in the investment management business since 1947.

Under an agreement with the Investment Manager, PanAgora, One International Place, 24<sup>th</sup> Floor, Boston Massachusetts 02110, serves as the fund's sub-advisor. PanAgora has been retained to make investment decisions for such fund assets as may be designated from time to time by the Investment Manager. The Investment Manager (and not the fund) pays a quarterly sub-advisory fee to PanAgora for its services at the annual rate of 0.21% of the average net assets value of the fund.

The fund pays an annual all-inclusive management fee of 0.60% to the Investment Manager based on the fund's average daily net assets. The management fee is calculated and accrued daily. The management fee covers all of the other expenses of the fund with limited exceptions.

For the fiscal year ended April 30, 2025, the fund paid an effective management fee of 0.60% of the fund's average net assets.

A discussion regarding the basis for the Trustees' approval of the fund's investment management contract and subadvisory contract is available in the fund's report on Form N-CSR for the period ended October 31, 2023.

**Portfolio managers.** The portfolio managers identified below are jointly and primarily responsible for the day-to-day management of the fund's portfolio.

#### George D. Mussalli, CFA Global Chief Investment Officer
Mr. Mussalli has been a portfolio manager of the fund since 2023. He joined PanAgora in 2004.

#### Richard Tan, CFA Managing Director & Head of Stock Selector Equity Investments
Mr. Tan has been a portfolio manager of the fund since 2023. He joined PanAgora in 2008.

The fund's SAI provides additional information about portfolio manager compensation, other accounts that they manage and their ownership of fund shares.

### Shareholder information

#### Valuation of fund shares
The price of the fund's shares is based on its net asset value. The net asset value per share equals the total value of its assets, less its liabilities, divided by the number of its outstanding shares. Shares are only valued as of the scheduled close of regular trading on the NYSE each day the exchange is open.

The fund values its investments for which market quotations are readily available at market value. It values all other investments and assets at their fair

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value, which may differ from recent market prices. For example, the fund may value a stock traded on an exchange at its fair value when the relevant exchange closes early or trading in the stock is suspended. It may also value a stock at fair value if recent transactions in the stock have been very limited or if, in the case of a security traded on a market that closes before the NYSE closes, material information about the issuer becomes available after the close of the relevant market.

The fund translates prices for its investments quoted in foreign currencies into U.S. dollars at current exchange rates, which are generally determined as of 4:00 p.m. Eastern Time each day the NYSE is open. As a result, changes in the value of those currencies in relation to the U.S. dollar may affect the fund's net asset value. Because foreign markets may be open at different times than the NYSE, the value of the fund's shares may change on days when shareholders are not able to buy or sell them. Many securities markets and exchanges outside the U.S. close before the close of the NYSE, and the closing prices for securities in those markets or exchanges may not reflect events that occur after the close but before the scheduled close of regular trading on the NYSE. As a result, the fund has adopted fair value pricing procedures, which, among other things, require the fund to fair value foreign equity securities if there has been a movement in the U.S. market that exceeds a specified threshold. Although the threshold may be revised from time to time and the number of days on which fair value prices will be used will depend on market activity, it is possible that fair value prices will be used by the fund to a significant extent. As noted above, the value determined for an investment using the fund's fair value pricing procedures may differ from recent market prices for the investment.

The fund's most recent net asset value is available at www.franklintempleton.com or by calling 1-800-225-1581.

### Additional information about the fund
The fund is an actively managed ETF. Like other ETFs, shares of the fund are generally purchased and redeemed in creation unit aggregations through authorized participants, shares of the fund are listed and traded on a stock exchange, and individual investors can purchase or sell shares in less than creation unit sizes and for cash in the secondary market through a broker.

<u>Derivative actions</u> 

The fund is a series of Putnam ETF Trust (the "Trust"). The Trust's Amended and Restated Agreement and Declaration of Trust imposes certain conditions on derivative actions that are not otherwise required by law, including, in the case of any claim not arising under the federal securities laws, a requirement that the holders of 10% or more of the total outstanding shares of the applicable fund join the request to commence the action. Although these conditions are intended to permit legitimate inquiries and claims while avoiding the time, expense, distraction, and other harm that can be caused to a fund or its shareholders as a result of spurious shareholder demands and derivative

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actions, they may make it more difficult or costly for fund shareholders to bring derivative actions on behalf of the Trust.

<u>Information on the fund's website</u> 

The fund will disclose its top 10 holdings and related portfolio information monthly beginning on or after 5 business days after the end of each month at www.franklintempleton.com. The fund discloses its complete portfolio holdings, including the name, identifier, market value and weight of each security and instrument in the portfolio, at www.franklintempleton.com on each business day, before commencement of trading in shares on the listing exchange. The fund will also disclose its complete portfolio holdings as of the end of the prior month on a monthly basis beginning on or before the 15th calendar day after the end of each month. Recent information, including information regarding the fund's net asset value, market price, premiums and discounts, and bid/ask spread, is also available at www.franklintempleton.com.

#### Buying and selling shares in the secondary market
Shares of the fund are listed and traded on an exchange, and individual fund shares may only be bought and sold in the secondary market through a broker. The fund does not impose any minimum investment for shares of the fund purchased on an exchange. These transactions are made at market prices that may vary throughout the day and may be greater than the fund's net asset value (premium) or less than the fund's net asset value (discount). As a result, you may pay more than net asset value when you purchase shares, and receive less than net asset value when you sell shares, in the secondary market. If you buy or sell shares in the secondary market, you will generally incur customary brokerage commissions and charges and you may also incur the cost of the spread between the price at which a dealer will buy fund shares and the somewhat higher price at which a dealer will sell shares. Due to such commissions and charges and spread costs, frequent trading may detract significantly from investment returns.

The fund is designed to offer investors an investment that can be bought and sold frequently in the secondary market without impact on the fund, and such trading activity is designed to enable the market price of fund shares to remain at or close to net asset value. Accordingly, the Board of Trustees has not adopted policies and procedures designed to discourage excessive or short-term trading by these investors.

The fund accommodates frequent purchases and redemptions of creation units by authorized participants and does not place a limit on purchases or redemptions of creation units by these investors. The fund reserves the right, but does not have the obligation, to reject any purchase or redemption transaction (subject to legal and regulatory limits regarding redemption transactions) at any time. In addition, the fund reserves the right to impose restrictions on disruptive, excessive, or short-term trading.

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#### Precautionary notes
<u>Note to registered investment companies</u> 

Section 12(d)(1) of the Investment Company Act of 1940, as amended (the "1940 Act"), restricts investments by registered investment companies in the securities of other investment companies, including shares of the fund. Registered investment companies are permitted to invest in the fund beyond the limits set forth in Section 12(d)(1), subject to certain terms and conditions, including that such investment companies enter into an agreement with the fund.

<u>Note to authorized participants regarding continuous offering</u> 

Certain legal risks may exist that are unique to authorized participants purchasing creation units directly from the fund. Because new creation units may be issued on an ongoing basis, at any point a "distribution," as such term is used in the Securities Act of 1933 (the "Securities Act"), could be occurring. As a broker-dealer, certain activities that you perform may, depending on the circumstances, result in your being deemed a participant in a distribution, in a manner which could render you a statutory underwriter and subject you to the prospectus delivery and liability provisions of the Securities Act.

For example, you may be deemed a statutory underwriter if you purchase creation units from the fund, break them down into individual fund shares, and sell such shares directly to customers, or if you choose to couple the creation of a supply of new fund shares with an active selling effort involving solicitation of secondary market demand for fund shares. A determination of whether a person is an underwriter for purposes of the Securities Act depends upon all of the facts and circumstances pertaining to that person's activities, and the examples mentioned here should not be considered a complete description of all the activities that could lead to a categorization as an underwriter.

Dealers who are not "underwriters" but are participating in a distribution (as opposed to engaging in ordinary secondary market transactions), and thus dealing with shares as part of an "unsold allotment" within the meaning of Section 4(a)(3)(C) of the Securities Act, will be unable to take advantage of the prospectus delivery exemption provided by Section 4(a)(3) of the Securities Act. This is because the prospectus delivery exemption in Section 4(a)(3) of the Securities Act is not available in respect of such transactions as a result of Section 24(d) of the 1940 Act. As a result, you should note that dealers who are not underwriters but are participating in a distribution (as opposed to engaging in ordinary secondary market transactions) and thus dealing with the shares that are part of an overallotment within the meaning of Section 4(a)(3)(A) of the Securities Act would be unable to take advantage of the prospectus delivery exemption provided by Section 4(a)(3) of the Securities Act. Firms that incur a prospectus-delivery obligation with respect to shares of the fund are reminded that, under Rule 153 under the Securities Act, a prospectus delivery obligation under Section 5(b)(2) of the Securities Act owed to an exchange member in connection with a sale on an exchange is satisfied

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by the fact that the prospectus is available at the exchange upon request. The prospectus delivery mechanism provided in Rule 153 is only available with respect to transactions on an exchange.

Certain affiliates of the fund may purchase and resell fund shares pursuant to this prospectus.

<u>Note to secondary market investors</u> 

The Depository Trust Company ("DTC"), a limited trust company and securities depository that facilitates the clearance and settlement of trades for its participating banks and broker-dealers, has executed an agreement with the fund's distributor, Franklin Distributors, LLC (the "Distributor"). DTC, or its nominee, is the registered owner of all outstanding shares of the fund. The Investment Manager will not have any record of your ownership. Your ownership of shares will be shown on the records of DTC and the DTC participant broker through which you hold the shares. Your broker will provide you with account statements, confirmations of your purchases and sales, and tax information. Your broker will also be responsible for distributing income and capital gain distributions and for sending you shareholder reports and other information as may be required.

### Costs associated with creations and redemptions
The fund generally imposes a creation transaction fee and a redemption transaction fee to offset transfer and other transaction costs associated with the issuance and redemption of creation units of shares. Information about the procedures regarding creation and redemption of creation units and the applicable transaction fees is included in the SAI.

Distribution plans and payments to intermediaries

#### Principal distributor
The Distributor distributes creation units for the fund on an agency basis, does not maintain a secondary market in shares of the fund, and has no role in determining the investment policies of the fund or the securities that are purchased or sold by the fund. The Distributor is an indirect, wholly-owned broker/dealer subsidiary of Resources.

The Distributor's address is One Franklin Parkway, San Mateo, CA 94403-1906.

Intermediaries may receive compensation from the Investment Manager, the Distributor, and/or their respective affiliates for providing recordkeeping and administrative services, as well as other retirement plan expenses, and

Prospectus 27

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compensation for services intended to result in the sale of fund shares. These payments are described in more detail in this section and in the SAI.

#### Distribution and service plan
The fund has adopted a distribution and service plan pursuant to Rule 12b-1 under the 1940 Act that authorizes the fund to pay distribution fees in connection with the sale and distribution of its shares and service fees in connection with the provision of ongoing shareholder support services. No Rule 12b-1 fees are currently paid by the fund, and there are no current plans to impose these fees. However, in the event Rule 12b-1 fees are charged in the future, because these fees are paid out of the fund's assets on an ongoing basis, these fees will increase the cost of your investment in the fund.

No dealer, sales representative, or any other person has been authorized to give any information or to make any representations, other than those contained in this prospectus and in the related SAI, in connection with the offer contained in this prospectus. If given or made, such other information or representations must not be relied upon as having been authorized by the fund or the Distributor. This prospectus and the related SAI do not constitute an offer by the fund or by the Distributor to sell shares of the fund to or to buy shares of the fund from any person to whom it is unlawful to make such offer.

#### Payments to intermediaries
Investors may purchase shares of the fund on an exchange through intermediaries (including any broker, intermediary, bank, bank trust department, registered investment advisor, financial planner, retirement plan administrator and any other institution that offers shares of the fund to its customers). In addition to distribution and service plans, the Investment Manager and its affiliates may make payments to intermediaries that do not increase your fund expenses, as described below.

The Investment Manager and its affiliates also pay additional compensation to selected intermediaries in recognition of their marketing support and/or program servicing (each of which is described in more detail below). These payments may create an incentive for an intermediary firm or its representatives to recommend or offer shares of the fund or other Putnam funds to its customers. These additional payments are made by the Investment Manager and its affiliates and do not increase the amount paid by you or the fund as shown under Fund summary — Fees and expenses. The additional payments to intermediaries by the Investment Manager and its affiliates are generally based on one or more of the following factors: average net assets of a fund attributable to that intermediary, sales or net sales of a fund attributable to that intermediary, or reimbursement of ticket charges (fees that an intermediary firm charges its representatives for effecting transactions in fund shares), or on the basis of a negotiated lump sum payment for services provided.

Marketing support payments are generally available to most intermediaries engaging in significant sales of Putnam fund shares. These payments are

28 Prospectus

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individually negotiated with each intermediary firm, taking into account the marketing support services provided by the intermediary, including business planning assistance, educating intermediary personnel about the Putnam funds and shareholder financial planning needs, placement on the intermediary's preferred or recommended fund company list, access to sales meetings, sales representatives and management representatives of the intermediary, market data, as well as the size of the intermediary's relationship with the Investment Manager.

Program servicing payments, are paid in some instances to intermediaries in connection with investments in the fund through intermediary platforms and other investment programs. These payments are made for program or platform services provided by the intermediary, including shareholder recordkeeping, reporting, or transaction processing, as well as services rendered in connection with intermediary platform development and maintenance, fund/investment selection and monitoring, or other similar services.

You can find a list of all intermediaries to which the Investment Manager and its affiliates made marketing support and/ or program servicing payments in the SAI, which is on file with the SEC and is also available at www.franklintempleton.com. You can also find other details in the SAI about the payments made by the Investment Manager and its affiliates and the services provided by your intermediary. Your intermediary may charge you fees or commissions in addition to those disclosed in this prospectus. You can also ask your intermediary about any payments it receives from the Investment Manager and its affiliates and any services your intermediary provides, as well as about fees and/or commissions it charges.

#### Other payments
The Investment Manager and its affiliates may make other payments (including payments in connection with educational seminars or conferences) or allow other promotional incentives to intermediaries to the extent permitted by SEC and NASD (as adopted by FINRA) rules and by other applicable laws and regulations.

### Fund distributions and taxes
The fund earns dividends, interest, and other income from its investments, and distributes this income (less expenses) to shareholders as dividends. The fund also realizes capital gains from its investments and distributes these gains (less any losses) as capital gain distributions. If you purchased your shares in the secondary market, your broker is responsible for distributing the income and capital gain distributions to you. The fund normally distributes any net investment income and any net realized capital gains annually.

For U.S. federal income tax purposes, distributions of net investment income are generally taxable to you as ordinary income. Taxes on distributions of capital gains are determined by how long the fund owned (or is deemed to have owned) the investments that generated them, rather than by how long

Prospectus 29

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you have owned (or are deemed to have owned) your shares. Distributions that the fund properly reports to you as gains from investments that the fund owned for more than one year are generally taxable to you as long-term capital gains includible in net capital gain and taxed to individuals at reduced rates. Distributions of gains from investments that the fund owned for one year or less and gains on the sale of or prepayment on bonds characterized as market discount are generally taxable to you as ordinary income. Distributions that the fund properly reports to you as "qualified dividend income" are taxable at the reduced rates applicable to your net capital gain provided that both you and the fund meet certain holding period and other requirements. Distributions are taxable in the manner described in this paragraph whether you receive them in cash or reinvest them in additional shares of the fund.

Distributions by the fund to retirement plans that qualify for tax-advantaged treatment under U.S. federal income tax laws will not be taxable. Special tax rules apply to investments through such plans. You should consult your tax advisor to determine the suitability of the fund as an investment through such a plan and the tax treatment of distributions (including distributions of amounts attributable to an investment in the fund) from such a plan. Distributions are taxable to you even if they are paid from income or gains earned by the fund before your investment (and thus were included in the price you paid). Contact your financial representative to find out the distribution schedule for your fund.

The fund's investments in foreign securities may be subject to foreign withholding or other taxes. In that case, the fund's return on those investments would be decreased. If the fund meets certain requirements relating to its asset holdings, and the fund elects to pass through to its shareholders foreign tax credits or deductions, taxable shareholders generally will be entitled to claim a credit or deduction with respect to these foreign taxes. Even if the fund elects to pass through to its shareholders foreign tax credits or deductions, tax-exempt shareholders and those who invest in the fund through tax-advantaged accounts such as IRAs will not benefit from any such tax credit or deduction. In addition, the fund's investments in foreign securities or foreign currencies may increase or accelerate the fund's recognition of ordinary income and may affect the timing or amount of the fund's distributions.

The fund's use of derivatives, if any, may affect the amount, timing and character of distributions to shareholders and, therefore, may increase the amount of taxes payable by shareholders.

Any gain resulting from the sale of your shares generally also will be subject to tax. Any such gain or loss will be long term or short term depending on how long you have held your shares.

The above is a general summary of the tax implications of investing in the fund. Please refer to the SAI for further details. You should consult your tax advisor for more information on your own tax situation, including possible foreign, state and local taxes.

30 Prospectus

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#### Other tax considerations
Unlike other ETFs, the securities exchanged for a creation unit will not correspond pro rata to the positions in the fund's portfolio, and the fund will effect its creations and redemptions partially or wholly for cash rather than on an in-kind basis. Because of this, the fund may be unable to realize certain tax benefits associated with in-kind transfers of portfolio securities that may be realized by other ETFs. Shareholders may be subject to tax on gains they would not otherwise have been subject to and/or at an earlier date than if the fund had effected redemptions wholly on an in-kind basis.

Authorized participants should consult their tax advisors about the U.S. federal, state, local and non-U.S. tax consequences of purchasing and redeeming creation units in the fund.

#### Information about the Summary Prospectus, Prospectus, and SAI
The summary prospectus, prospectus, and SAI for a fund provide information concerning the fund. The summary prospectus, prospectus, and SAI are updated at least annually and any information provided in a summary prospectus, prospectus, or SAI can be changed without a shareholder vote unless specifically stated otherwise. The summary prospectus, prospectus, and the SAI are not contracts between the fund and its shareholders and do not give rise to any contractual rights or obligations or any shareholder rights other than any rights conferred explicitly by federal or state securities laws that may not be waived.

Prospectus 31

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### Financial highlights
The financial highlights table is intended to help you understand the performance of the fund for the past five years, unless otherwise noted. Certain information reflects financial results for a single fund share. Total return represents the rate that an investor would have earned (or lost) on an investment in the fund, assuming reinvestment of all dividends and other distributions. Unless otherwise noted, this information has been audited by the fund's independent registered public accounting firm, PricewaterhouseCoopers, LLP, whose report, along with the fund's financial statements, are available on the fund's website and are included in the fund's Form N-CSR filed with the SEC, which is available upon request.

32 Prospectus

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(For a common share outstanding throughout the period)

---

| | | | |
|:---|:---|:---|:---|
| **PER-SHARE OPERATING**<br> **PERFORMANCE** | **PER-SHARE OPERATING**<br> **PERFORMANCE** | **PER-SHARE OPERATING**<br> **PERFORMANCE** | **PER-SHARE OPERATING**<br> **PERFORMANCE** |
|  | **Year ended** | **Year ended** | **For the period**<br> **1/19/23<br>(commencement** <br> **of operations) to** |
|  | **4/30/25** | **4/30/24** | **4/30/23** |
| &nbsp;&nbsp; **Net asset value, beginning of period** | **$20.50** | **$19.44** | **$20.00** |
| &nbsp;&nbsp; **Investment operations:** |  |  |  |
| &nbsp;&nbsp; Net investment income (loss)<sup>a</sup> | .45 | .42 | .08 |
| &nbsp;&nbsp; Net realized and unrealized gain (loss) on investments | 1.58 | 1.02 | (.67) |
| &nbsp;&nbsp; **Total from investment operations** | **2.03** | **1.44** | **(.59)** |
| &nbsp;&nbsp; **Less distributions:** |  |  |  |
| &nbsp;&nbsp; From net investment income | (.34) | (.39) |  |
| &nbsp;&nbsp; From net realized gain on investments | (.34) |  |  |
| &nbsp;&nbsp; **Total distributions** | **(.68)** | **(.39)** | **--** |
| &nbsp;&nbsp; **Other capital** | .01 | .01 | .03 |
| &nbsp;&nbsp; **Net asset value, end of period** | **$21.86** | **$20.50** | **$19.44** |
| &nbsp;&nbsp; **Total return at net asset value** (%)<sup>b</sup> | **10.08** | **7.54** | **(2.80)\*** |
| &nbsp;&nbsp; **RATIOS AND SUPPLEMENTAL DATA** |  |  |  |
| &nbsp;&nbsp; **Net assets, end of period (in thousands)** | **$43169** | **$25113** | **$18469** |
| &nbsp;&nbsp; Ratio of expenses to average net assets (%)<sup>c,d</sup> | .60 | .60 | .17\* |
| &nbsp;&nbsp; Ratio of net investment income (loss) to average net assets (%)<sup>d</sup> | 2.06 | 2.16 | .41\* |
| &nbsp;&nbsp; Portfolio turnover (%)<sup>e</sup> | 90 | 87 | 45\* |

---

\* Not annualized.

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

(b) Total return assumes dividend reinvestment.

(c) Excludes acquired fund fees and expenses, if any.

(d) Reflects waivers of certain fund expenses in connection with investments in Putnam Government Money Market Fund during the period. As a result of such waivers, the expenses of the fund reflect a reduction of the following amounts:

Prospectus 33

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---

| | |
|:---|:---|
| | **Percentage of average** <br> **net assets**  |
|  April 30, 2025 | <0.01% |
|  April 30, 2024 | <0.01 |
|  April 30, 2023 | <0.01 |

---

(e) Portfolio turnover excludes securities received or delivered in-kind, if any.

34 Prospectus

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#### For more information about Putnam PanAgora ESG Emerging Markets Equity ETF
You can learn more about the fund in the following documents:

#### Annual/Semiannual Report to Shareholders and Form N-CSR Filed with the SEC
Contain additional information about the fund's investments. The fund's annual report also discusses the market conditions and investment strategies that significantly affected the fund's performance during its last fiscal year. In Form N-CSR, you will find the fund's annual and semi-annual financial statements.

#### Statement of Additional Information ("SAI")
Contains more information about the fund, its investments and policies. It is incorporated by reference (is legally a part of this prospectus).

For a free copy of the current annual/semiannual report, financial statements or the SAI, please contact your investment representative or call us at the number below. You also can view the current annual/semiannual report, financial statements and the SAI online through www.franklintempleton.com.

Reports and other information about the fund are available on the EDGAR Database on the SEC's Website at http://www.sec.gov, and copies of this information may be obtained, after paying a duplicating fee, by electronic request at the following email address: publicinfo@sec.gov.

---

| | |
|:---|:---|
| Putnam Investments<br> 100 Federal Street<br> Boston, MA 02110<br> 1-800-225-1581 |  |
| 811-23643 | 39493-P 09/25 |

---

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---

| | |
|:---|:---|
| ![LOGO](g842776g7dsp001.jpg) | ![LOGO](g842776g7dsp001a.jpg) |

---

## Putnam

## PanAgora ESG

## International Equity ETF

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp; **Prospectus** | September 1, 2025 |

---

---

| | |
|:---|:---|
| **Fund Symbol:** PPIE | **Principal U.S. Listing Exchange:** NYSE Arca, Inc. |

---

#### Investment Category: International Equity

#### This prospectus explains what you should know about this fund before you invest. Please read it carefully.
These securities have not been approved or disapproved by the Securities and Exchange Commission ("SEC") nor has the SEC passed upon the accuracy or adequacy of this prospectus. Any statement to the contrary is a crime.

------

### Table of contents

---

| | |
|:---|:---|
|  [Fund summary](#pro938342_1) | 2 |
|  [Fund details](#pro938342_2) | 10 |
|  [Fund management](#pro938342_3) | 22 |
|  [Shareholder information](#pro938342_4) | 23 |
|  [Distribution plans and payments to intermediaries](#pro938342_5) | 27 |
|  [Fund distributions and taxes](#pro938342_6) | 29 |
|  [Financial highlights](#pro938342_7) | 32 |

---

------

### Fund summary

#### Goal
The fund seeks long-term capital appreciation.

#### Fees and expenses
The following tables describe the fees and expenses you may pay if you buy, hold and sell shares of the fund. **You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.**

#### Annual Fund Operating Expenses

#### (expenses you pay each year as a percentage of the value of your investment)

---

| | | | |
|:---|:---|:---|:---|
| **Management**<br> **fees** | **Distribution**<br> **and service (12b-1) fees** | **Other**<br> **expenses** | **Total annual fund**<br> **operating expenses** |
|  0.49% |  | 0.00% | 0.49% |

---

#### Example
The following hypothetical example is intended to help you compare the cost of investing in the fund with the cost of investing in other funds. It assumes that you invest $10,000 in the fund for the time periods indicated and then redeem all your shares at the end of those periods. It assumes a 5% return on your investment each year and that the fund's operating expenses remain the same. Your actual costs may be higher or lower.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | 1 year | 3 years | 5 years | 10 years |
|  Putnam PanAgora ESG<br> International Equity ETF | $50 | $157 | $274 | $616 |

---

#### Portfolio turnover
The fund pays transaction-related costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher turnover rate may indicate higher transaction costs and may result in higher taxes when the fund's shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or the above example, affect fund performance. The fund's turnover rate in the most recent fiscal year was 66%.

### Investments, risks, and performance

#### Principal investment strategies
The fund invests mainly in common stocks (growth or value stocks or both) of companies of any size outside the United States with a focus on companies that the Sub-advisor, as defined below, believes offer attractive benchmark-relative returns and exhibit positive environmental, social and governance

2 Prospectus

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("ESG") metrics. In evaluating and selecting investments for the fund, the Sub-advisor employs a proprietary framework using quantitative models that identify companies that offer above-market return potential based on their ESG metrics, together with other proprietary factors measuring a company's financial and operational health, and then construct a portfolio that integrates return potential and ESG metrics.

The Sub-advisor uses advanced statistical and machine learning techniques, together with third-party and proprietary data sources, in evaluating companies' ESG metrics and return potential. Metrics designed to evaluate companies' environmental practices may include third-party or proprietary data sources, including those regarding a company's environmental footprint or its environmental efficiencies. Metrics designed to evaluate companies' social practices may include third-party or proprietary data sources, including those regarding board diversity levels or employee sentiment at a company. Metrics designed to evaluate companies' governance practices may include third-party or proprietary data sources, including those regarding a company's shareholder structure. Additionally, the Sub-advisor's quantitative model may also use third-party and/or proprietary data sources to identify companies exhibiting improved ESG profiles or those investing in ESG initiatives. The ESG metrics and information used in the portfolio construction process may change over time and may not be relevant to all companies that are eligible for investment by the fund.

In addition, the fund will not invest in securities of companies that the Sub-advisor, based on third-party data, determines at the time of investment to have a severe ESG risk rating (which measures a company's exposure to industry-specific material ESG risks and how well a company is managing those risks), to have a category 5 controversy rating (an assessment of a company's involvement in incidents with negative ESG implications), to be classified as non-compliant under the United Nations Global Compact principles, or to be substantially engaged in Arctic drilling or in the thermal coal, palm oil, controversial weapons or tobacco industries (each, a "Restricted Company"). In addition, at the time of any periodic rebalancing of the fund's portfolio, the fund will dispose of its position in any security that, at that time, the Sub-advisor determines to be a Restricted Company.

Under normal circumstances, the fund invests at least 80% of its net assets in equity securities of companies that meet the Sub-advisor's ESG criteria, as described above. The Sub-advisor will assign each company an ESG rating using proprietary ESG scores. In order to meet the Sub-advisor's ESG criteria, a company must have an ESG score above 0, reflecting more positive characteristics, and, on or after June 12, 2023, must also not be a Restricted Company. A negative ESG score indicates a lower (or worse) rating. The Sub-advisor assigns companies an ESG score that ranges from –2 to +2, although the range of scores may change over time. This policy is non-fundamental and may be changed only after 60 days' notice to shareholders. The Sub-advisor may not apply ESG criteria to investments that are not subject to the fund's

Prospectus 3

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80% policy, and such investments may not meet the Sub-advisor's ESG criteria.

The fund's equity investments may include common stocks, preferred stocks, convertible securities, warrants, American Depositary Receipts ("ADRs") and Global Depositary Receipts ("GDRs"). The fund invests mainly in developed countries but may also invest in emerging markets.

The Sub-advisor 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. While the Sub-advisor may consider independent third-party data as a part of its analytical process (and currently uses third-party data in applying certain of the fund's investment policies), the portfolio management team performs its own independent analysis of issuers, through its quantitative model and proprietary scoring system, and does not rely solely on third-party screens.

From time to time, the fund may invest a significant portion of its assets in companies in one or more related industries or sectors. The fund may also invest a significant portion of its assets in one or more related geographic regions, such as European and Asian countries.

For purposes of the fund's investment strategies, techniques and risks, the term "Investment Manager" includes the Sub-advisor.

**Risks** 

It is important to understand that you can lose money by investing in the fund.

**ESG investing risk** **:** Investing with a focus on companies that meet the Sub-advisor's ESG criteria may result in the fund investing in certain types of companies, industries or sectors that the market may not favor. Conversely, investing in such companies may result the fund foregoing investment in securities that outperform the fund's investments in certain environments. In evaluating an investment opportunity, the Sub-advisor may make investment decisions without the availability of optimal ESG-related data (which may be even less available with securitized debt instruments) or based on information and data that is incomplete or inaccurate. ESG metrics are not uniformly defined and applying such metrics involves subjective assessments. ESG scorings and assessments of issuers can vary across third-party data providers and may change over time. ESG information from third-party data providers may be incomplete, inaccurate or unavailable, particularly with respect to companies in emerging market countries, which may adversely impact the investment process. In addition, a company's business practices, products or services may change over time. As a result of these possibilities, among others, the fund may temporarily hold securities that are inconsistent with the fund's ESG investment criteria. Regulatory changes or interpretations regarding the definitions and/or use of ESG criteria could have a material adverse effect on the fund's ability to invest in accordance with its investment policies and/or achieve its investment objective, as well as the ability of certain

4 Prospectus

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classes of investors to invest in funds, such as the fund, whose strategies include ESG criteria.

**Model and data risk** **:** If the quantitative models or data that are used in managing the fund prove to be incorrect or incomplete, investment decisions made in reliance on the models or data may not produce the desired results and the fund may realize losses. Additionally, market movements are likely to change the risk levels and risk allocations of the fund. Investments made based on quantitative models may perform differently from the market as a whole.

**Fluctuation of** **net asset value and share price risk** **:** Shares may trade at a larger premium or discount to the fund's net asset value than shares of other ETFs. The net asset value of the fund will generally fluctuate with changes in the market value of the fund's holdings. The fund's shares can be bought and sold in the secondary market at market prices. Disruptions to creations and redemptions, the existence of extreme market volatility or potential lack of an active trading market for the fund's shares may result in the fund's shares trading significantly above (at a premium) or below (at a discount) net asset value or the intraday value of the fund's holdings. In addition, in stressed market conditions or periods of market disruption or volatility, the market for fund shares may become less liquid in response to deteriorating liquidity in the markets for the fund's underlying portfolio holdings.

**Trading issues risk** **:** The fund has a limited public trading history. There can be no assurance that an active trading market will develop or be maintained or that the market for fund shares will operate as intended, which could lead to the fund's shares trading at wider spreads and larger premiums and discounts to net asset value than other actively managed ETFs. As a result, it may cost investors more to trade fund shares than shares of other ETFs. There is no guarantee that the fund will be able to attract market makers and authorized participants. Market makers and authorized participants are not obligated to make a market in the fund's shares or to submit purchase and redemption orders for creation units. The market prices of the fund's shares are expected to fluctuate, in some cases materially, in response to changes in the fund's net asset value, the intraday value of the fund's holdings and supply and demand for the fund's shares. The Investment Manager cannot predict whether the fund's shares will trade above, below or at their net asset value or the intraday value of the fund's holdings. During such periods, investors may incur significant losses if they sell shares.

The securities held by the fund may be traded in markets that close at a different time than the exchange on which the fund's shares are listed. Liquidity in those securities may be reduced after the applicable closing times. Accordingly, during the time when the exchange is open but after the applicable market closing, fixing or settlement times, bid-ask spreads on the exchange and the corresponding premium or discount to the shares' net asset value may widen.

Prospectus 5

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**Large shareholder transaction risk:** The fund is subject to the risk that shareholders will purchase or redeem large quantities of shares of the fund. The fund may be an investment option for mutual funds that are managed by the Investment Manager, as defined below, and its affiliates as "funds of funds." Additionally, other investors from time to time may make substantial investments in the fund. Such shareholders may at times be considered to control the fund. In addition, a large number of shareholders may collectively purchase or redeem fund shares in large amounts rapidly or unexpectedly. Large shareholder transactions may adversely affect the fund's liquidity and net assets. These redemptions may also adversely affect the fund's performance if the fund is forced to sell securities, which may also increase the fund's brokerage costs.

**Authorized participant concentration risk** **:** Only an authorized participant may engage in creation and redemption transactions directly with the fund. The fund may have a limited number of financial institutions that act as authorized participants, none of which are obligated to engage in creation and/or redemption transactions. To the extent that those authorized participants do not engage in creation and redemption orders, there may be a significantly diminished trading market for fund shares or fund shares may trade at a discount (or premium) to net asset value and possibly face trading halts and/or de-listing.

**Cash transactions risk** **:** Unlike certain ETFs, the fund may effect creations and redemptions in cash or partially in cash. Therefore, it may be required to sell portfolio securities and subsequently recognize gains on such sales that the fund might not have recognized if it were to distribute portfolio securities in-kind. As such, investments in the fund's shares may be less tax-efficient than an investment in an ETF that distributes portfolio securities entirely in-kind.

**Market risk** **:** 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, outbreaks of infectious illnesses or other widespread public health issues, and factors related to a specific issuer, asset class, geography, industry or sector. These and other factors may lead to increased volatility and reduced liquidity in the fund's portfolio holdings, may negatively impact the fund's performance, and may exacerbate other risks to which the fund is subject.

**Common stock risk** **:** Common stock represents an ownership interest in a company. The value of a company's stock may fall or fail to rise as a result of factors directly relating to that company, such as decisions made by its management or lower demand for the company's products or services. A stock's value may also fall because of factors affecting not just the company, but also other companies in the same industry or in a number of different industries, such as increases in production costs. Growth stocks may be more susceptible to earnings disappointments, and value stocks may fail to rebound. These risks are generally greater for small and midsize companies.

6 Prospectus

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**Foreign** **investments risk:** The value of international investments traded in foreign currencies may be adversely impacted by fluctuations in exchange rates. International investments, particularly investments in emerging markets, may carry risks associated with potentially less stable economies or governments (such as the risk of seizure by a foreign government, the imposition of currency or other restrictions, or high levels of inflation), and may be or become illiquid. There may be less publicly-available information, or less reliable publicly-available information, about foreign companies (including information related to companies' ESG practices), particularly with respect to emerging market companies, than publicly-available information regarding U.S. companies. As a result, the fund's ability to evaluate a foreign company, including with respect to its ESG or sustainability practices, may be more limited than its ability to evaluate a U.S. company.

**Small and midsize companies risk** **:** Stocks of small and midsize companies often trade in smaller volumes, and their prices may fluctuate more than stocks of larger companies. Stocks of these companies may therefore be more vulnerable to adverse developments than those of larger companies.

**Industry or sector concentration risk** **:** From time to time, the fund may invest a significant portion of its assets in companies in one or more related industries or sectors, which would make the fund more vulnerable to adverse developments affecting those industries or sectors.

**Geographic focus** **:** If the fund invests a substantial percentage of its assets in issuers located in a single country, a small number of countries, or a particular geographic region, such as European and Asian countries, the fund's performance will likely be closely tied to the market, currency, political, economic, regulatory, geopolitical, and other conditions in such countries or region. These conditions could generally have a greater effect on the fund than they would on a more geographically diversified fund, which may result in greater losses and volatility.

**Management and operational risk** **:** There is no guarantee that the investment techniques, analyses, or judgments that the Investment Manager applies in making investment decisions for the fund will produce the intended outcome or that the investments selected for the fund will perform as well as other securities that were not selected for the fund. The Investment Manager, or the fund's other service providers, may experience disruptions or operating errors that could negatively impact the fund.

The fund may not achieve its goal, and it is not intended to be a complete investment program. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

### Performance
The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund's performance from year to year. The table shows the average annual total returns of the fund

Prospectus 7

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and also compares the fund's performance with the average annual total returns of a broad measure of market performance and an additional index with characteristics relevant to the fund. The fund makes updated performance information, including its current net asset value per share, available at www.franklintempleton.com.

*The fund's past performance (before and after taxes) is not necessarily an indication of how the fund will perform in the future.* 

Annual total returns

![LOGO](g842776g7dsp009.jpg)

2024

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| | | |
|:---|:---|:---|
|  Best Quarter: | Q3 2024 | 7.51% |
|  Worst Quarter: | Q4 2024 | -7.19% |
|  As of June 30, 2025, the fund's year-to-date return was 21.61%. | As of June 30, 2025, the fund's year-to-date return was 21.61%. | As of June 30, 2025, the fund's year-to-date return was 21.61%. |

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#### Average annual total returns
(for periods ended 12/31/24)

---

| | | |
|:---|:---|:---|
| **Putnam PanAgora ESG International Equity ETF** | **1 year** | **Since** <br> **Inception<sup>1</sup>**  |
| Return before taxes | 7.93% | 9.58% |
| Return after taxes on distributions | 6.61% | 8.15% |
| Return after taxes on distributions and sales of fund shares | 5.52% | 7.00% |
| MSCI All Country World Ex-U.S. Index-NR (reflects no deduction for fees, expenses or taxes but are net of dividend tax withholdings) | 5.53% | 7.11% |
| MSCI EAFE Index-NR (index reflects no deduction for fees, expenses or taxes but are net of dividend tax withholding) | 3.82% | 7.55% |

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<sup>1.</sup> Since inception January 19, 2023.

After-tax returns reflect the historical highest individual federal marginal income tax rates and do not reflect state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. These after-tax returns do not apply if you hold your fund shares through a 401(k) plan, an IRA, or another tax-advantaged arrangement.

Important data provider notices and terms are available at www.franklintempletondatasources.com. All data is subject to change.

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### Your fund's management

#### Investment Manager
Putnam Investment Management, LLC ("Putnam Management" or the "Investment Manager")

#### Sub-advisor
PanAgora Asset Management, Inc. ("PanAgora" or the "Sub-advisor")

#### Portfolio managers

#### George D. Mussalli, CFA
Global Chief Investment Officer at PanAgora and portfolio manager of the fund since 2023.

#### Richard Tan, CFA
Managing Director & Head of Stock Selector Equity Investments of PanAgora and portfolio manager of the fund since 2023.

#### Purchase and sale of fund shares
Shares of the fund are listed and traded on an exchange, and individual fund shares may only be bought and sold in the secondary market through a broker or dealer at market price. These transactions, which do not involve the fund, are made at market prices that may vary throughout the day, rather than at net asset value. Shares of the fund may trade at a price greater than the fund's net asset value (premium) or less than the fund's net asset value (discount). An investor may incur costs attributable to the difference between the highest price a buyer is willing to pay to purchase shares (bid) and the lowest price a seller is willing to accept for shares (ask) when buying or selling fund shares in the secondary market (the "bid-ask spread"). Recent information, including information regarding the fund's net asset value, market price, premiums and discounts, and bid-ask spread, is available at www.franklintempleton.com.

#### Tax information
The fund's distributions will be taxed as ordinary income or capital gains unless you hold the shares through a tax-advantaged arrangement, in which case you will generally be taxed only upon withdrawal of monies from the arrangement.

#### Financial intermediary compensation
If you purchase the fund through a broker/dealer or other financial intermediary (such as a bank or financial professional), the fund and its related companies may pay that intermediary for the sale of fund shares and related services. Please bear in mind that these payments may create a conflict of interest by influencing the broker/dealer or other intermediary to recommend the fund over another investment. Ask your advisor or visit your advisor's website for more information.

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Fund details

#### Principal investment strategies
The fund invests mainly in common stocks (growth or value stocks or both) of companies of any size outside the United States with a focus on companies that the Sub-advisor believes offer attractive benchmark-relative returns and exhibit positive ESG metrics. In evaluating and selecting investments for the fund, the Sub-advisor employs a proprietary framework using quantitative models that identify companies that offer above-market return potential based on their ESG metrics, together with other proprietary factors measuring a company's financial and operational health, and then construct a portfolio that integrates return potential and ESG metrics.

The Sub-advisor uses advanced statistical and machine learning techniques, together with third-party and proprietary data sources, in evaluating companies' ESG metrics and return potential. Metrics designed to evaluate companies' environmental practices may include third-party or proprietary data sources, including those regarding a company's environmental footprint or its environmental efficiencies. Metrics designed to evaluate companies' social practices may include third-party or proprietary data sources, including those regarding board diversity levels or employee sentiment at a company. Metrics designed to evaluate companies' governance practices may include third-party or proprietary data sources, including those regarding a company's shareholder structure. Additionally, the Sub-advisor's quantitative model may also use third-party and/or proprietary data sources to identify companies exhibiting improved ESG profiles or those investing in ESG initiatives. The ESG metrics and information used in the portfolio construction process may change over time and may not be relevant to all companies that are eligible for investment by the fund.

In addition, the fund will not invest in securities of companies that the Sub-advisor, based on third-party data, determines at the time of investment to have a severe ESG risk rating (which measures a company's exposure to industry-specific material ESG risks and how well a company is managing those risks), to have a category 5 controversy rating (an assessment of a company's involvement in incidents with negative ESG implications), to be classified as non-compliant under the United Nations Global Compact principals, or to be substantially engaged in Arctic drilling or in the thermal coal, palm oil, controversial weapons or tobacco industries (each, a "Restricted Company"). In addition, at the time of any periodic rebalancing of the fund's portfolio, the fund will dispose of its position in any security that, at that time, the Sub-advisor determines to be a Restricted Company.

Under normal circumstances, the fund invests at least 80% of its net assets in equity securities of companies that meet the Sub-advisor's ESG criteria, as described above. The Sub-advisor will assign each company an ESG rating using proprietary ESG scores. In order to meet the Sub-advisor's ESG criteria, a company must have an ESG score above 0, reflecting more positive

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characteristics, and, on or after June 12, 2023, must also not be a Restricted Company. A negative ESG score indicates a lower (or worse) rating. The Sub-advisor assigns companies an ESG score that ranges from –2 to +2, although the range of scores may change over time. This policy is non-fundamental and may be changed only after 60 days' notice to shareholders. The Sub-advisor may not apply ESG criteria to investments that are not subject to the fund's 80% policy, and such investments may not meet the Sub-advisor's ESG criteria.

The fund's equity investments may include common stocks, preferred stocks, convertible securities, warrants, ADRs and GDRs. The fund invests mainly in developed countries but may also invest in emerging markets.

The fund may engage in a variety of transactions involving derivatives, such as futures, options, certain foreign currency transactions, warrants and swap contracts although they do not represent a primary focus of the fund.

The Sub-advisor 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. While the Sub-advisor may consider independent third-party data as a part of its analytical process (and currently uses third-party data in applying certain of the fund's investment restrictions), the portfolio management team performs its own independent analysis of issuers, through its quantitative model and proprietary scoring system, and does not rely solely on third-party screens.

From time to time, the fund may invest a significant portion of its assets in companies in one or more related industries or sectors. The fund may also invest a significant portion of its assets in companies in one or more related geographic regions, such as European and Asian countries.

#### Principal investment risks
The principal and certain additional risks of investing in the fund are described below. These risks and other factors may adversely affect the fund's net asset value, market price and performance. When you sell your shares, they may be worth more or less than what you paid for them, which means that you could lose money as a result of your investment. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund may not achieve its investment objective, and it is not intended to be a complete investment program. The fund's Statement of Additional Information ("SAI") contains additional information about the fund's investment policies and risks.

**ESG investing risk** **:** Investing with a focus on companies that meet the Sub-advisor's ESG criteria may result in the fund investing in certain types of companies, industries or sectors that the market may not favor. Conversely, investing in such companies may result in the fund foregoing investment in securities that outperform the fund's investments in certain environments. In evaluating an investment opportunity, the Sub-advisor may make investment

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decisions without the availability of optimal ESG-related data (which may be even less available with securitized debt instruments) or based on information and data that is incomplete or inaccurate. ESG criteria are not uniformly defined and applying such factors involves subjective assessments. ESG scorings and assessments of issuers can vary across third-party data providers and may change over time. ESG information from third-party data providers may be incomplete, inaccurate or unavailable, particularly with respect to companies in emerging market countries, which may adversely impact the investment process. In addition, a company's business practices, products or services may change over time. As a result of these possibilities, among others, the fund may temporarily hold securities that are inconsistent with the fund's ESG investment criteria. Regulatory changes or interpretations regarding the definitions and/or use of ESG criteria could have a material adverse effect on the fund's ability to invest in accordance with its investment policies and/or achieve its investment objective, as well as the ability of certain classes of investors to invest in funds, such as the fund, whose strategies include ESG criteria. There may be limitations with respect to availability of ESG data in certain sectors, as well as limited availability of investments with positive ESG assessments in certain sectors. The Sub-advisor's evaluation of ESG criteria may change over time.

**Model and data risk** **:** Given the nature of the fund's investments and strategies, the Sub-advisor relies heavily on its proprietary models and on data supplied by third parties. The Sub-advisor uses models and data to, among other things, construct sets of transactions and investments, provide risk management insights and assist in hedging the fund's investments. The Sub-advisor regularly enhances and updates its models to reflect its developing research, fundamental analysis, and access to new data. If the quantitative models or data used in managing the fund prove to be incorrect or incomplete, investment decisions made in reliance on the models or data may not produce the desired results and may cause the fund to underperform its benchmark or other funds with a similar investment goal, and the fund may realize losses. For example, the Sub-advisor may, in reliance on faulty models or data, be unsuccessful in its efforts to manage the fund's overall level of volatility and its efforts to diversify risk. Any hedging based on faulty models and data may prove to be unsuccessful. In addition, models may incorrectly forecast future behavior, leading to potential losses on a cash flow and/or mark-to-market basis. Use of these models in unforeseen or certain low-probability scenarios (often involving a market disruption of some kind) also may result in losses for the fund. All models require data. Some of the models that the Sub-advisor may use are typically constructed based on historical data, and the success of these models is dependent largely on the accuracy and reliability of the supplied historical data. If incorrect data is entered into a model, the resulting output will be incorrect. As a result, any investment decisions made in reliance on the incorrect output from a model may not produce the desired results and the fund may realize losses. Even when data is correctly inputted into a model, the resulting information may differ, sometimes substantially, from other available data. For example, "model prices" that are provided by a model will

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often differ substantially from market prices, particularly for instruments that are complex in nature, such as derivatives. Models also rely on the proper functioning of hardware and technology, which are subject to disruption risk. There is no guarantee that the hardware and technology on which the models rely will be uninterrupted or error free, or that any defects in such hardware or technology will be able to be corrected in a short time period.

**Fluctuation of** **net asset value and share price risk** **:** Shares may trade at a larger premium or discount to net asset value than shares of other ETFs. The net asset value of the fund's shares will generally fluctuate with changes in the market value of the fund's holdings. The fund's shares are listed on an exchange and can be bought and sold in the secondary market at market prices. The market prices of shares will fluctuate in accordance with changes in net asset value and supply and demand on the listing exchange. Although the arbitrage process is designed to permit the shares of the fund to trade at market prices that are at or close to net asset value, it is possible that the market price and net asset value will vary significantly. As a result, you may sustain losses if you pay more than the shares' net asset value when you purchase shares or receive less than the shares' net asset value when you sell shares, in the secondary market. During periods of disruptions to creations and redemptions, the existence of extreme market volatility, or lack of an active trading market for the fund's shares, the market price of fund shares is more likely to differ significantly from the fund's net asset value or the intraday value of the fund's holdings. During such periods, you may be unable to sell your shares or may incur significant losses if you sell your shares. There are various methods by which investors can purchase and sell shares and various orders that may be placed. Investors should consult their financial intermediary before purchasing or selling shares of the fund. Disruptions at market makers, authorized participants or market participants may also result in significant differences between the market price of the fund's shares and the fund's net asset value. In addition, in stressed market conditions or periods of market disruption or volatility, the market for shares may become less liquid in response to deteriorating liquidity in the markets for the fund's underlying portfolio holdings.

The market price of shares during the trading day, like the price of any exchange-traded security, includes a "bid/ask" spread charged by the exchange specialist, market makers, or other participants that trade the particular security. In times of severe market disruption or volatility, the bid/ask spread can increase significantly. At those times, shares are most likely to be traded at a discount to net asset value, and the discount is likely to be greatest when the price of shares is falling fastest, which may be the time that you most want to sell your shares.

**Trading issues risk** **:** The fund has a limited public trading history. Although shares are listed on an exchange, there can be no assurance that an active trading market or requirements to remain listed will be met or maintained, or that the market for fund shares will operate as intended. If the market does not operate as intended, it could lead to the fund's shares trading at wider spreads

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and larger premiums and discounts to net asset value than other actively managed ETFs, particularly during periods of market disruption or volatility. As a result, it may cost investors more to trade fund shares than shares of other ETFs.

There is no guarantee that the fund will be able to attract market makers and authorized participants. There are no obligations of market makers to make a market in the fund's shares or of authorized participants to submit purchase or redemption orders for creation units.

The market prices of the fund's shares are expected to fluctuate, in some cases materially, in response to changes in the fund's net asset value, the intraday value of the fund's holdings and supply and demand for the fund's shares. The Investment Manager cannot predict whether the fund's shares will trade above, below or at their net asset value or the intraday value of the fund's holdings. During such periods, investors may incur significant losses if they sell shares.

The securities held by the fund may be traded in markets that close at a different time than the exchange on which the fund's shares are listed. Liquidity in those securities may be reduced after the applicable closing times. Accordingly, during the time when the exchange is open but after the applicable market closing, fixing or settlement times, bid-ask spreads on the exchange and the corresponding premium or discount to the shares' net asset value may widen.

In addition, trading of shares in the secondary market may be halted, for example, due to activation of market-wide "circuit breakers." If trading halts or an unanticipated early closing of the listing exchange occurs, a shareholder may be unable to purchase or sell shares of the fund.

If the fund's shares are delisted from the listing exchange, the Investment Manager may seek to list the fund shares on another market, merge the fund with another exchange-traded fund or traditional mutual fund, or redeem the fund shares at net asset value.

Shares of the fund, similar to shares of other issuers listed on a stock exchange, may be sold short and are therefore subject to the risk of increased volatility and price decreases associated with being sold short.

**Large shareholder transaction risk:** The fund is subject to the risk that shareholders will purchase or redeem large quantities of shares of the fund (such purchases or redemptions, "large shareholder transactions"). The fund may be an investment option for mutual funds that are managed by the Investment Manager and its affiliates as "funds of funds." Additionally, other investors from time to time may make substantial investments in the fund. Such shareholders may at times be considered to control the fund. In addition, a large number of shareholders collectively may purchase or redeem fund shares in large amounts rapidly or unexpectedly. A number of circumstances may cause the fund to experience large shareholder transactions, such as changes in the eligibility criteria for the fund; liquidations, reorganizations,

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repositionings, or other announced fund events; or changes in investment objectives, strategies, policies, risks, or investment personnel. Large redemptions may be more likely during times of market stress or reduced liquidity, exacerbating the potential impact on the fund.

Large shareholder transactions may adversely affect the fund's liquidity and net assets. These transactions could adversely affect the fund's performance if the fund is forced to sell portfolio securities to satisfy redemption requests or purchase securities for the portfolio in connection with the investment of subscription proceeds when the fund would otherwise not do so, and at unfavorable prices, which may increase the fund's brokerage costs and accelerate the realization of taxable income and/or gains to shareholders. The effects of taxable income and/or gains resulting from large shareholder transactions would particularly impact non-redeeming shareholders who do not hold their fund shares in an IRA, 401(k) plan or other tax-advantaged plan. To the extent that such transactions result in short-term capital gains, such gains will generally be taxed at the ordinary income tax rate for shareholders who hold fund shares in a taxable account. In addition, fund returns also may be adversely affected if the fund holds a portion of its assets in liquid, cash-like investments in connection with or in anticipation of shareholder redemptions.

**Authorized participant concentration risk** **:** Only authorized participants may engage in creation and redemption transactions directly with the fund. The fund may have a limited number of financial institutions that act as authorized participants, none of which are obligated to engage in creation and/or redemption transactions. Decisions by market makers or authorized participants to reduce their role with respect to market making or creation and redemption activities during times of market stress, or a decline in the number of authorized participants due to decisions to exit the business, bankruptcy, or other factors, could inhibit the effectiveness of the arbitrage process in maintaining the relationship between the underlying value of the fund's portfolio securities and the market price of fund shares. To the extent no other authorized participants are able to step forward to create or redeem, shares may trade at a discount (or premium) to net asset value and possibly face delisting.

**Cash transactions risk** **:** Unlike certain ETFs, the fund may effect creations and redemptions in cash or partially in cash. Therefore, it may be required to sell portfolio securities and subsequently recognize gains on such sales that the fund might not have recognized if it were to distribute portfolio securities in-kind. As such, investments in the fund's shares may be less tax-efficient than an investment in an ETF that distributes portfolio securities entirely in-kind.

**Market risk** **:** 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 (including perceptions about monetary policy, interest rates, inflation or the risk of default); government actions (including protectionist measures, intervention in the financial markets or other regulation, and changes in fiscal, monetary or tax policies); geopolitical events or changes

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(including natural disasters, terrorism and war); outbreaks of infectious illnesses or other widespread public health issues (including epidemics and pandemics); and factors related to a specific issuer, asset class, geography, industry, or sector. Foreign financial markets have their own market risks, and they may be more or less volatile than U.S. markets and may move in different directions. During a general downturn in financial markets, multiple asset classes may decline in value simultaneously. These and other factors may lead to increased volatility and reduced liquidity in the fund's portfolio holdings. During those periods, the fund may experience high levels of shareholder redemptions, and may have to sell securities at times when it would otherwise not do so, and at unfavorable prices. These risks may be exacerbated during economic downturns or other periods of economic stress.

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

The United States and other countries are periodically involved in disputes over trade and other matters, which may result in tariffs, investment restrictions and adverse impacts on affected companies and securities. For example, the United States has imposed tariffs and other trade barriers on Chinese exports, has restricted sales of certain categories of goods to China, and has established barriers to investments in China. Trade disputes may adversely affect the economies of the United States and its trading partners, as well as companies directly or indirectly affected and financial markets generally. The United States government has prohibited U.S. persons from investing in Chinese companies designated as related to the Chinese military. These and possible future restrictions could limit the fund's opportunities for investment and require the sale of securities at a loss or make them illiquid. Moreover, the Chinese government is involved in a longstanding dispute with Taiwan that has included threats of invasion. If the political climate between the United States and China does not improve or continues to deteriorate, if China were to attempt unification of Taiwan by force, or if other geopolitical conflicts develop or get worse, economies, markets and individual securities may be severely affected both regionally and globally, and the value of the fund's assets may go down.

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**Geographic focus** **:** If the fund invests a substantial percentage of its assets in issuers located in a single country, a small number of countries, or a particular geographic region, such as European and Asian countries, the fund's performance will likely be closely tied to the market, currency, political, economic, regulatory, geopolitical, and other conditions in such countries or region. These conditions could generally have a greater effect on the fund than they would on a more geographically diversified fund, which may result in greater losses and volatility. 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. Geopolitical concerns, such as the withdrawal of the United Kingdom from the European Union ("EU") and the potential that another member country might exit the Economic and Monetary Union of the EU or the EU, could lead to increased volatility in European markets and negatively affect the fund's investments both in issuers in the exiting country and throughout Europe. Some parts of Asia may be subject to a greater degree of economic, political and social instability than is the case in the United States. Many countries in Asia are developing, both politically and economically, and as a result, companies in certain countries in Asia may be subject to risks like nationalization or other forms of government interference, and some countries may be heavily reliant on only a few industries or commodities. In Japan, the economy is strongly impacted by government intervention and protectionism, as well as international trade, government support of the financial services sector and other troubled sectors, and geopolitical developments. Japan, as well as the other Asian countries, has historically been prone to natural disasters. The occurrence of a natural disaster, including subsequent recovery from a natural disaster, in the region could negatively impact the economy of the affected country or countries. Certain developing economies in Asia are characterized by frequent currency fluctuations, devaluations, and restrictions; unstable employment rates; rapid fluctuation in, among other things, inflation and reliance on exports; and less efficient markets. Currency fluctuations or devaluations in any one country can have a significant effect on the entire region.

**Common stock risk** **:** Common stock represents an ownership interest in a company. The value of a company's stock may fall as a result of factors directly relating to that company, such as decisions made by its management or lower demand for the company's products or services. A stock's value may also fall because of factors affecting not just the company, but also other companies in the same industry or in a number of different industries, such as increases in production costs.

The value of a company's stock may also be affected by changes in financial markets that are relatively unrelated to the company or its industry, such as changes in interest rates, currency exchange rates, or inflation rates. In addition, a company's stock generally pays dividends only after the company invests in its own business and makes required payments to holders of its bonds and other debt. For this reason, the value of a company's stock will usually react more strongly than its bonds and other debt to actual or perceived changes in the company's financial condition or prospects.

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<u>Growth stocks</u>**:** Companies whose stocks the Investment Manager believes are fast-growing may trade at a higher multiple of current earnings than other stocks. The values of these stocks may be more sensitive to changes in current or expected earnings or to heightened levels of inflation than the values of other stocks. If the Investment Manager's assessment of the prospects for a company's earnings growth is wrong, or if their judgment of how other investors will value the company's earnings growth is wrong, then the price of the company's stock may fall or may not approach the value that the Investment Manager has placed on it. In addition, growth stocks, at times, may not perform as well as value stocks or the stock market in general, and may be out of favor with investors for varying periods of time.

<u>Value stocks</u>: Companies whose stocks the Investment Manager believes are undervalued by the market may have experienced adverse business developments or may be subject to special risks that have caused their stocks to be out of favor. If the Investment Manager's assessment of a company's prospects is wrong, or if other investors do not similarly recognize the value of the company, then the price of the company's stock may fall or may not approach the value that the Investment Manager has placed on it. In addition, value stocks, at times, may not perform as well as growth stocks or the stock market in general, and may be out of favor with investors for varying periods of time.

**Foreign investments risk** **:** Foreign investments involve certain special risks, including:

● Unfavorable changes in currency exchange rates: Foreign investments are typically issued and traded in foreign currencies. As a result, their values may be affected by changes in exchange rates between foreign currencies and the U.S. dollar.

● Political and economic developments: Foreign investments may be subject to the risks of seizure by a foreign government, direct or indirect impact of sovereign debt default, imposition of economic sanctions, tariffs, trade restrictions, currency restrictions or similar actions (or retaliatory measures taken in response to such actions), and tax increases.

● Unreliable or untimely information: There may be less information publicly available about a foreign company (including information related to companies' ESG practices, particularly with respect to emerging market companies) than about most publicly-traded U.S. companies, and foreign companies are usually not subject to accounting, auditing and financial reporting standards and practices as stringent as those in the United States. As a result, the Investment Manager's ability to evaluate a foreign company, including with respect to its ESG or sustainability practices, may be more limited than its ability to evaluate a U.S. company. Foreign securities may trade on markets that are closed when U.S. markets are open. As a result, accurate pricing information based on foreign market prices may not always be available.

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● Limited legal recourse: Legal remedies for investors may be more limited than the remedies available in the United States.

● Limited markets: Certain foreign investments may be less liquid (harder to buy and sell) and more volatile than most U.S. investments, which means the fund may at times be unable to sell these foreign investments at desirable prices. For the same reason, the Investment Manager may at times find it difficult to value the fund's foreign investments.

● Trading practices: Brokerage commissions and other fees are generally higher for foreign investments than for U.S. investments. The procedures and rules governing foreign transactions and custody may also involve delays in payment, delivery or recovery of money or investments.

● Sovereign issuers: The willingness and ability of sovereign issuers to pay principal and interest on government securities depends on various economic factors, including the issuer's balance of payments, overall debt level, and cash flow from tax or other revenues. In addition, there may be no legal recourse for investors in the event of default by a sovereign government.

The risks of foreign investments are typically increased in countries with less developed markets, which are sometimes referred to as emerging markets. Emerging markets may have less developed economies and legal and regulatory systems, and may be susceptible to greater political and economic instability than developed foreign markets. Countries with emerging markets are also more likely to experience high levels of inflation or currency devaluation, and investments in emerging markets may be more volatile and less liquid than investments in developed markets. For these and other reasons, investments in emerging markets are often considered speculative.

Certain risks related to foreign investments may also apply to some extent to U.S.-traded investments that are denominated in foreign currencies, investments in U.S. companies or issuers that are traded in foreign markets or investments in U.S. companies or issuers that have significant foreign operations.

**Industry or sector concentration risk** **:** From time to time, the fund may invest a significant portion of its assets in companies in one or more related industries or sectors, which would make the fund more vulnerable to adverse developments affecting those industries or sectors.

**Derivatives risk** **:** The fund may engage in a variety of transactions involving derivatives, such as futures, options, certain foreign currency transactions, warrants and swap contracts although they do not represent a primary focus of the fund. Derivatives are financial instruments whose value depends upon, or is derived from, the value of something else, such as one or more underlying investments, pools of investments, indexes or currencies. The fund may make use of "short" derivative positions, the values of which typically move in the opposite direction from the price of the underlying investment, pool of investments, index or currency. The fund may use derivatives both for hedging

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and non-hedging purposes. For example, the fund may use foreign currency transactions to increase or decrease the fund's exposure to a particular currency or group of currencies. The fund may also use derivatives as a substitute for a direct investment in the securities of one or more issuers. However, the fund may also choose not to use derivatives based on the Investment Manager's evaluation of market conditions or the availability of suitable derivatives. Investments in derivatives may be applied toward meeting a requirement to invest in a particular kind of investment if the derivatives have economic characteristics similar to that investment.

Derivatives involve special risks and may result in losses. The successful use of derivatives depends on the Investment Manager's ability to manage these sophisticated instruments. Some derivatives are "leveraged," which means they provide the fund with investment exposure greater than the value of the fund's investment in the derivatives. As a result, these derivatives may magnify or otherwise increase investment losses to the fund. The risk of loss from certain short derivative positions is theoretically unlimited. The value of derivatives may move in unexpected ways due to unanticipated market movements, the use of leverage, imperfect correlation between the derivative instrument and the reference asset, or other factors, especially in unusual market conditions, and volatility in the value of derivatives could adversely impact the fund's returns, obligations and exposures.

Other risks arise from the potential inability to terminate or sell derivative positions. Derivatives may be subject to liquidity risk due to the fund's obligation to make payments of margin, collateral, or settlement payments to counterparties. A liquid secondary market may not always exist for the fund's derivative positions. In fact, certain over-the-counter instruments (investments not traded on an exchange) may not be liquid. Over-the-counter instruments also involve the risk that the other party to the derivative transaction may not be willing or able to meet its obligations with respect to the derivative transaction. The risk of a party failing to meet its obligations may increase if the fund has significant exposure to that counterparty. Derivative transactions may also be subject to operational risk, including due to documentation and settlement issues, system failures, inadequate controls and human error, and legal risk due to insufficient documentation, insufficient capacity or authority of a counterparty, or issues with respect to the legality or enforceability of the derivative contract. For further information about additional types and risks of derivatives, see *Miscellaneous Investments, Investment Practices and Risks* in the SAI.

**Small and midsize companies risk** **:** These companies, many of which may have a market capitalization of less than $1 billion, are more likely than larger companies to have limited product lines, markets or financial resources, lack profitability or depend on a small management group. Stocks of these companies often trade in smaller volumes, and their prices may fluctuate more than stocks of larger companies. Stocks of small and midsize companies may therefore be more vulnerable to adverse developments than those of larger companies. In addition, stocks of small and midsize companies, at times, may

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not perform as well as stocks of larger companies or the stock market in general, and may be out of favor with investors for varying periods of time.

**Liquidity and illiquid investments** **risk:** The fund may invest up to 15% of its net assets in illiquid investments, which may be considered speculative and which may be difficult to sell. The sale of many of these investments is prohibited or limited by law or contract. Some investments may be difficult to value for purposes of determining the fund's net asset value. Certain other investments may not have an active trading market due to adverse market, economic, industry, political, regulatory, geopolitical, environmental, public health, and other conditions, including investors trying to sell large quantities of a particular investment or type of investment, or lack of market makers or other buyers for a particular investment or type of investment. The fund may not be able to sell its illiquid investments when the Investment Manager considers it desirable to do so, or the fund may be able to sell them only at less than their value.

**Management and operational risk** **:** The fund is actively managed and its performance will reflect, in part, the Investment Manager's ability to make investment decisions that seek to achieve the fund's investment objective. There is no guarantee that the investment techniques, analyses, or judgments that the Investment Manager applies in making investment decisions for the fund will produce the intended outcome or that the investments selected for the fund will perform as well as other securities that were not selected for the fund. As a result, the fund may underperform its benchmark or other funds with a similar investment goal and may realize losses. In addition, the Investment Manager, or the fund's other service providers, may experience disruptions or operating errors that could negatively impact the fund. Although service providers may have operational risk management policies and procedures and take appropriate precautions to avoid and mitigate risks that could lead to disruptions and operating errors, it may not be possible to identify all of the operational risks that may affect the fund or to develop processes and controls to completely eliminate or mitigate their occurrence or effects.

**Portfolio turnover rate** **:** The fund's portfolio turnover rate measures how frequently the fund buys and sells investments. A portfolio turnover rate of 100%, for example, would mean that the fund sold and replaced securities valued at 100% of the fund's assets within a one-year period. Funds with high turnover may be more likely to realize capital gains that must be distributed to shareholders as taxable income. High turnover may also cause a fund to pay more brokerage commissions and other transaction costs (including imputed transaction costs), which may detract from performance. The fund's portfolio turnover rate and the amount of brokerage commissions it pays and transaction costs it incurs will vary over time based on market conditions.

**Other investments:** In addition to the main investment strategies described above, the fund may also invest in cash or cash equivalents, including money market instruments or short-term instruments such as commercial paper, bank obligations (e.g., certificates of deposit and bankers' acceptances), repurchase agreements, and U.S. Treasury bills or other government obligations. The fund

Prospectus 21

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may also from time to time invest all or a portion of its assets, including any cash balances, in money market and/or short-term bond funds advised by the Investment Manager or its affiliates. The percentage of the fund invested in cash and cash equivalents and such money market and short-term bond funds is expected to vary over time and will depend on various factors, including market conditions, purchase and redemption activity by fund shareholders, and the Investment Manager's assessment of the cash level that is appropriate to allow the fund to pursue investment opportunities as they arise and to meet shareholder redemption requests. Large cash positions may dampen performance and may prevent the fund from achieving its goal. These practices may be subject to other risks, as described under *Miscellaneous Investments, Investment Practices and Risks* in the SAI.

**Temporary defensive strategies:** In response to adverse market, economic, political or other conditions, the fund may take temporary defensive positions, such as investing some or all of the fund's assets in cash and cash equivalents, that differ from the fund's usual investment strategies. However, the fund may choose not to use these temporary defensive strategies for a variety of reasons, even in very volatile market conditions. If the fund employs these strategies, the fund may miss out on investment opportunities and may not achieve its goal. Additionally, while temporary defensive strategies are mainly designed to limit losses, they may not work as intended.

**Changes in policies:** The Trustees may change the fund's goal, investment strategies and other policies set forth in this prospectus without shareholder approval, except as otherwise provided in the prospectus or SAI.

### Fund management

#### The fund's investment manager
Putnam Management, 100 Federal Street, Boston MA 02110, is the fund's investment manager, responsible for making investment decisions for the fund and managing the fund's other affairs and business. Putnam Management is an indirect, wholly-owned subsidiary of Franklin Resources Inc. ("Resources"). Together, Putnam Management and its affiliates manage, as of June 30, 2025, $1.61 trillion in assets, and have been in the investment management business since 1947.

Under an agreement with the Investment Manager, PanAgora, One International Place, 24<sup>th</sup> Floor, Boston Massachusetts 02110, serves as the fund's sub-advisor. PanAgora has been retained to make investment decisions for such fund assets as may be designated from time to time by the Investment Manager. The Investment Manager (and not the fund) pays a quarterly sub-advisory fee to PanAgora for its services at the annual rate of 0.17% of the average net assets value of the fund.

The fund pays an annual all-inclusive management fee of 0.49% to the Investment Manager based on the fund's average daily net assets. The

22 Prospectus

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management fee is calculated and accrued daily. The management fee covers all of the other expenses of the fund with limited exceptions.

For the fiscal year ended April 30, 2025, the fund paid an effective management fee of 0.49% of the fund's average net assets.

A discussion regarding the basis for the Trustees' approval of the fund's investment management contract and subadvisory contract is available in the fund's report on Form N-CSR for the period ended October 31, 2023.

**Portfolio managers.** The portfolio managers identified below are jointly and primarily responsible for the day-to-day management of the fund's portfolio.

#### George D. Mussalli, CFA Global Chief Investment Officer
Mr. Mussalli has been a portfolio manager of the fund since 2023. He joined PanAgora in 2004.

#### Richard Tan, CFA Managing Director & Head of Stock Selector Equity Investments
Mr. Tan has been a portfolio manager of the fund since 2023. He joined PanAgora in 2008.

The fund's SAI provides additional information about portfolio manager compensation, other accounts that they manage and their ownership of fund shares.

### Shareholder information

#### Valuation of fund shares
The price of the fund's shares is based on its net asset value. The net asset value per share equals the total value of its assets, less its liabilities, divided by the number of its outstanding shares. Shares are only valued as of the scheduled close of regular trading on the NYSE each day the exchange is open.

The fund values its investments for which market quotations are readily available at market value. It values all other investments and assets at their fair value, which may differ from recent market prices. For example, the fund may value a stock traded on an exchange at its fair value when the relevant exchange closes early or trading in the stock is suspended. It may also value a stock at fair value if recent transactions in the stock have been very limited or if, in the case of a security traded on a market that closes before the NYSE closes, material information about the issuer becomes available after the close of the relevant market.

The fund translates prices for its investments quoted in foreign currencies into U.S. dollars at current exchange rates, which are generally determined as of 4:00 p.m. Eastern Time each day the NYSE is open. As a result, changes in the value of those currencies in relation to the U.S. dollar may affect the fund's net asset value. Because foreign markets may be open at different times than

Prospectus 23

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the NYSE, the value of the fund's shares may change on days when shareholders are not able to buy or sell them. Many securities markets and exchanges outside the U.S. close before the close of the NYSE, and the closing prices for securities in those markets or exchanges may not reflect events that occur after the close but before the scheduled close of regular trading on the NYSE. As a result, the fund has adopted fair value pricing procedures, which, among other things, require the fund to fair value foreign equity securities if there has been a movement in the U.S. market that exceeds a specified threshold. Although the threshold may be revised from time to time and the number of days on which fair value prices will be used will depend on market activity, it is possible that fair value prices will be used by the fund to a significant extent. As noted above, the value determined for an investment using the fund's fair value pricing procedures may differ from recent market prices for the investment.

The fund's most recent net asset value is available at www.franklintempleton.com or by calling 1-800-225-1581.

### Additional information about the fund
The fund is an actively managed ETF. Like other ETFs, shares of the fund are generally purchased and redeemed in creation unit aggregations through authorized participants, shares of the fund are listed and traded on a stock exchange, and individual investors can purchase or sell shares in less than creation unit sizes and for cash in the secondary market through a broker.

<u>Derivative actions</u> 

The fund is a series of Putnam ETF Trust (the "Trust"). The Trust's Amended and Restated Agreement and Declaration of Trust imposes certain conditions on derivative actions that are not otherwise required by law, including, in the case of any claim not arising under the federal securities laws, a requirement that the holders of 10% or more of the total outstanding shares of the applicable fund join the request to commence the action. Although these conditions are intended to permit legitimate inquiries and claims while avoiding the time, expense, distraction, and other harm that can be caused to a fund or its shareholders as a result of spurious shareholder demands and derivative actions, they may make it more difficult or costly for fund shareholders to bring derivative actions on behalf of the Trust.

<u>Information on the fund's website</u> 

The fund will disclose its top 10 holdings and related portfolio information monthly beginning on or after 5 business days after the end of each month at www.franklintempleton.com. The fund discloses its complete portfolio holdings, including the name, identifier, market value and weight of each security and instrument in the portfolio, at www.franklintempleton.com on each business day, before commencement of trading in shares on the listing exchange. The fund will also disclose its complete portfolio holdings as of the end of the prior month on a monthly basis beginning on or before the 15th calendar day after

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the end of each month. Recent information, including information regarding the fund's net asset value, market price, premiums and discounts, and bid/ask spread, is also available at www.franklintempleton.com.

#### Buying and selling shares in the secondary market
Shares of the fund are listed and traded on an exchange, and individual fund shares may only be bought and sold in the secondary market through a broker. The fund does not impose any minimum investment for shares of the fund purchased on an exchange. These transactions are made at market prices that may vary throughout the day and may be greater than the fund's net asset value (premium) or less than the fund's net asset value (discount). As a result, you may pay more than net asset value when you purchase shares, and receive less than net asset value when you sell shares, in the secondary market. If you buy or sell shares in the secondary market, you will generally incur customary brokerage commissions and charges and you may also incur the cost of the spread between the price at which a dealer will buy fund shares and the somewhat higher price at which a dealer will sell shares. Due to such commissions and charges and spread costs, frequent trading may detract significantly from investment returns.

The fund is designed to offer investors an investment that can be bought and sold frequently in the secondary market without impact on the fund, and such trading activity is designed to enable the market price of fund shares to remain at or close to net asset value. Accordingly, the Board of Trustees has not adopted policies and procedures designed to discourage excessive or short-term trading by these investors.

The fund accommodates frequent purchases and redemptions of creation units by authorized participants and does not place a limit on purchases or redemptions of creation units by these investors. The fund reserves the right, but does not have the obligation, to reject any purchase or redemption transaction (subject to legal and regulatory limits regarding redemption transactions) at any time. In addition, the fund reserves the right to impose restrictions on disruptive, excessive, or short-term trading.

#### Precautionary notes
<u>Note to registered investment companies</u> 

Section 12(d)(1) of the Investment Company Act of 1940, as amended (the "1940 Act"), restricts investments by registered investment companies in the securities of other investment companies, including shares of the fund. Registered investment companies are permitted to invest in the fund beyond the limits set forth in Section 12(d)(1), subject to certain terms and conditions, including that such investment companies enter into an agreement with the fund.

<u>Note to authorized participants regarding continuous offering</u> 

Certain legal risks may exist that are unique to authorized participants purchasing creation units directly from the fund. Because new creation units

Prospectus 25

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may be issued on an ongoing basis, at any point a "distribution," as such term is used in the Securities Act of 1933 (the "Securities Act"), could be occurring. As a broker-dealer, certain activities that you perform may, depending on the circumstances, result in your being deemed a participant in a distribution, in a manner which could render you a statutory underwriter and subject you to the prospectus delivery and liability provisions of the Securities Act.

For example, you may be deemed a statutory underwriter if you purchase creation units from the fund, break them down into individual fund shares, and sell such shares directly to customers, or if you choose to couple the creation of a supply of new fund shares with an active selling effort involving solicitation of secondary market demand for fund shares. A determination of whether a person is an underwriter for purposes of the Securities Act depends upon all of the facts and circumstances pertaining to that person's activities, and the examples mentioned here should not be considered a complete description of all the activities that could lead to a categorization as an underwriter.

Dealers who are not "underwriters" but are participating in a distribution (as opposed to engaging in ordinary secondary market transactions), and thus dealing with shares as part of an "unsold allotment" within the meaning of Section 4(a)(3)(C) of the Securities Act, will be unable to take advantage of the prospectus delivery exemption provided by Section 4(a)(3) of the Securities Act. This is because the prospectus delivery exemption in Section 4(a)(3) of the Securities Act is not available in respect of such transactions as a result of Section 24(d) of the 1940 Act. As a result, you should note that dealers who are not underwriters but are participating in a distribution (as opposed to engaging in ordinary secondary market transactions) and thus dealing with the shares that are part of an overallotment within the meaning of Section 4(a)(3)(A) of the Securities Act would be unable to take advantage of the prospectus delivery exemption provided by Section 4(a)(3) of the Securities Act. Firms that incur a prospectus-delivery obligation with respect to shares of the fund are reminded that, under Rule 153 under the Securities Act, a prospectus delivery obligation under Section 5(b)(2) of the Securities Act owed to an exchange member in connection with a sale on an exchange is satisfied by the fact that the prospectus is available at the exchange upon request. The prospectus delivery mechanism provided in Rule 153 is only available with respect to transactions on an exchange.

Certain affiliates of the fund may purchase and resell fund shares pursuant to this prospectus.

<u>Note to secondary market investors</u> 

The Depository Trust Company ("DTC"), a limited trust company and securities depository that facilitates the clearance and settlement of trades for its participating banks and broker-dealers, has executed an agreement with the fund's distributor, Franklin Distributors, LLC (the "Distributor"). DTC, or its nominee, is the registered owner of all outstanding shares of the fund. The Investment Manager will not have any record of your ownership. Your ownership of shares will be shown on the records of DTC and the DTC

26 Prospectus

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participant broker through which you hold the shares. Your broker will provide you with account statements, confirmations of your purchases and sales, and tax information. Your broker will also be responsible for distributing income and capital gain distributions and for sending you shareholder reports and other information as may be required.

### Costs associated with creations and redemptions
The fund generally imposes a creation transaction fee and a redemption transaction fee to offset transfer and other transaction costs associated with the issuance and redemption of creation units of shares. Information about the procedures regarding creation and redemption of creation units and the applicable transaction fees is included in the SAI.

Distribution plans and payments to intermediaries

#### Principal distributor
The Distributor distributes creation units for the fund on an agency basis, does not maintain a secondary market in shares of the fund, and has no role in determining the investment policies of the fund or the securities that are purchased or sold by the fund. The Distributor is an indirect, wholly-owned broker/dealer subsidiary of Resources.

The Distributor's address is One Franklin Parkway, San Mateo, CA 94403-1906.

Intermediaries may receive compensation from the Investment Manager, the Distributor, and/or their respective affiliates for providing recordkeeping and administrative services, as well as other retirement plan expenses, and compensation for services intended to result in the sale of fund shares. These payments are described in more detail in this section and in the SAI.

#### Distribution and service plan
The fund has adopted a distribution and service plan pursuant to Rule 12b-1 under the 1940 Act that authorizes the fund to pay distribution fees in connection with the sale and distribution of its shares and service fees in connection with the provision of ongoing shareholder support services. No Rule 12b-1 fees are currently paid by the fund, and there are no current plans to impose these fees. However, in the event Rule 12b-1 fees are charged in the future, because these fees are paid out of the fund's assets on an ongoing basis, these fees will increase the cost of your investment in the fund.

No dealer, sales representative, or any other person has been authorized to give any information or to make any representations, other than those contained in this prospectus and in the related SAI, in connection with the offer

Prospectus 27

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contained in this prospectus. If given or made, such other information or representations must not be relied upon as having been authorized by the fund or the Distributor. This prospectus and the related SAI do not constitute an offer by the fund or by the Distributor to sell shares of the fund to or to buy shares of the fund from any person to whom it is unlawful to make such offer.

#### Payments to intermediaries
Investors may purchase shares of the fund on an exchange through intermediaries (including any broker, intermediary, bank, bank trust department, registered investment advisor, financial planner, retirement plan administrator and any other institution that offers shares of the fund to its customers). In addition to distribution and service plans, the Investment Manager and its affiliates may make payments to intermediaries that do not increase your fund expenses, as described below.

The Investment Manager and its affiliates also pay additional compensation to selected intermediaries in recognition of their marketing support and/or program servicing (each of which is described in more detail below). These payments may create an incentive for an intermediary firm or its representatives to recommend or offer shares of the fund or other Putnam funds to its customers. These additional payments are made by the Investment Manager and its affiliates and do not increase the amount paid by you or the fund as shown under Fund summary — Fees and expenses. The additional payments to intermediaries by the Investment Manager and its affiliates are generally based on one or more of the following factors: average net assets of a fund attributable to that intermediary, sales or net sales of a fund attributable to that intermediary, or reimbursement of ticket charges (fees that an intermediary firm charges its representatives for effecting transactions in fund shares), or on the basis of a negotiated lump sum payment for services provided.

Marketing support payments are generally available to most intermediaries engaging in significant sales of Putnam fund shares. These payments are individually negotiated with each intermediary firm, taking into account the marketing support services provided by the intermediary, including business planning assistance, educating intermediary personnel about the Putnam funds and shareholder financial planning needs, placement on the intermediary's preferred or recommended fund company list, access to sales meetings, sales representatives and management representatives of the intermediary, market data, as well as the size of the intermediary's relationship with the Investment Manager.

Program servicing payments, are paid in some instances to intermediaries in connection with investments in the fund through intermediary platforms and other investment programs. These payments are made for program or platform services provided by the intermediary, including shareholder recordkeeping, reporting, or transaction processing, as well as services rendered in connection with intermediary platform development and maintenance, fund/investment selection and monitoring, or other similar services.

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You can find a list of all intermediaries to which the Investment Manager and its affiliates made marketing support and/ or program servicing payments in the SAI, which is on file with the SEC and is also available at www.franklintempleton.com. You can also find other details in the SAI about the payments made by the Investment Manager and its affiliates and the services provided by your intermediary. Your intermediary may charge you fees or commissions in addition to those disclosed in this prospectus. You can also ask your intermediary about any payments it receives from the Investment Manager and its affiliates and any services your intermediary provides, as well as about fees and/or commissions it charges.

#### Other payments
The Investment Manager and its affiliates may make other payments (including payments in connection with educational seminars or conferences) or allow other promotional incentives to intermediaries to the extent permitted by SEC and NASD (as adopted by FINRA) rules and by other applicable laws and regulations.

### Fund distributions and taxes
The fund earns dividends, interest, and other income from its investments, and distributes this income (less expenses) to shareholders as dividends. The fund also realizes capital gains from its investments and distributes these gains (less any losses) as capital gain distributions. If you purchased your shares in the secondary market, your broker is responsible for distributing the income and capital gain distributions to you. The fund normally distributes any net investment income and any net realized capital gains annually.

For U.S. federal income tax purposes, distributions of net investment income are generally taxable to you as ordinary income. Taxes on distributions of capital gains are determined by how long the fund owned (or is deemed to have owned) the investments that generated them, rather than by how long you have owned (or are deemed to have owned) your shares. Distributions that the fund properly reports to you as gains from investments that the fund owned for more than one year are generally taxable to you as long-term capital gains includible in net capital gain and taxed to individuals at reduced rates. Distributions of gains from investments that the fund owned for one year or less and gains on the sale of or prepayment on bonds characterized as market discount are generally taxable to you as ordinary income. Distributions that the fund properly reports to you as "qualified dividend income" are taxable at the reduced rates applicable to your net capital gain provided that both you and the fund meet certain holding period and other requirements. Distributions are taxable in the manner described in this paragraph whether you receive them in cash or reinvest them in additional shares of the fund.

Distributions by the fund to retirement plans that qualify for tax-advantaged treatment under U.S. federal income tax laws will not be taxable. Special tax rules apply to investments through such plans. You should consult your tax advisor to determine the suitability of the fund as an investment through such a

Prospectus 29

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plan and the tax treatment of distributions (including distributions of amounts attributable to an investment in the fund) from such a plan. Distributions are taxable to you even if they are paid from income or gains earned by the fund before your investment (and thus were included in the price you paid). Contact your financial representative to find out the distribution schedule for your fund.

The fund's investments in foreign securities may be subject to foreign withholding or other taxes. In that case, the fund's return on those investments would be decreased. If the fund meets certain requirements relating to its asset holdings, and the fund elects to pass through to its shareholders foreign tax credits or deductions, taxable shareholders generally will be entitled to claim a credit or deduction with respect to these foreign taxes. Even if the fund elects to pass through to its shareholders foreign tax credits or deductions, tax-exempt shareholders and those who invest in the fund through tax-advantaged accounts such as IRAs will not benefit from any such tax credit or deduction. In addition, the fund's investments in foreign securities or foreign currencies may increase or accelerate the fund's recognition of ordinary income and may affect the timing or amount of the fund's distributions.

The fund's use of derivatives, if any, may affect the amount, timing and character of distributions to shareholders and, therefore, may increase the amount of taxes payable by shareholders.

Any gain resulting from the sale of your shares generally also will be subject to tax. Any such gain or loss will be long term or short term depending on how long you have held your shares.

The above is a general summary of the tax implications of investing in the fund. Please refer to the SAI for further details. You should consult your tax advisor for more information on your own tax situation, including possible foreign, state and local taxes.

#### Other tax considerations
Unlike other ETFs, the securities exchanged for a creation unit will not correspond pro rata to the positions in the fund's portfolio, and the fund will effect its creations and redemptions partially or wholly for cash rather than on an in-kind basis. Because of this, the fund may be unable to realize certain tax benefits associated with in-kind transfers of portfolio securities that may be realized by other ETFs. Shareholders may be subject to tax on gains they would not otherwise have been subject to and/or at an earlier date than if the fund had effected redemptions wholly on an in-kind basis.

Authorized participants should consult their tax advisors about the U.S. federal, state, local and non-U.S. tax consequences of purchasing and redeeming creation units in the fund.

#### Information about the Summary Prospectus, Prospectus, and SAI
The summary prospectus, prospectus, and SAI for a fund provide information concerning the fund. The summary prospectus, prospectus, and SAI are updated at least annually and any information provided in a summary

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prospectus, prospectus, or SAI can be changed without a shareholder vote unless specifically stated otherwise. The summary prospectus, prospectus, and the SAI are not contracts between the fund and its shareholders and do not give rise to any contractual rights or obligations or any shareholder rights other than any rights conferred explicitly by federal or state securities laws that may not be waived.

Prospectus 31

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### Financial highlights
The financial highlights table is intended to help you understand the performance of the fund for the past five years, unless otherwise noted. Certain information reflects financial results for a single fund share. Total return represents the rate that an investor would have earned (or lost) on an investment in the fund, assuming reinvestment of all dividends and other distributions. Unless otherwise noted, this information has been audited by the fund's independent registered public accounting firm, PricewaterhouseCoopers, LLP, whose report, along with the fund's financial statements, are available on the fund's website and are included in the fund's Form N-CSR filed with the SEC, which is available upon request.

32 Prospectus

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(For a common share outstanding throughout the period)

---

| | | | |
|:---|:---|:---|:---|
| **PER-SHARE OPERATING**<br> **PERFORMANCE** | **PER-SHARE OPERATING**<br> **PERFORMANCE** | **PER-SHARE OPERATING**<br> **PERFORMANCE** | **PER-SHARE OPERATING**<br> **PERFORMANCE** |
|  | **Year ended** | **Year ended** | **For the period**<br> **1/19/23<br>(commencement** <br> **of operations)** |
|  | **4/30/25** | **4/30/24** | **to 4/30/23** |
| &nbsp;&nbsp; **Net asset value, beginning of period** | **$22.23** | **$20.84** | **$20.00** |
| &nbsp;&nbsp; **Investment operations:** |  |  |  |
| &nbsp;&nbsp; Net investment income (loss)<sup>a</sup> | .54 | .52 | .35 |
| &nbsp;&nbsp; Net realized and unrealized gain (loss) on investments | 3.29 | 1.58 | .47 |
| &nbsp;&nbsp; **Total from investment operations** | **3.83** | **2.10** | **.82** |
| &nbsp;&nbsp; **Less distributions:** |  |  |  |
| &nbsp;&nbsp; From net investment income | (.81) | (.71) |  |
| &nbsp;&nbsp; From net realized gain on investments | (.32) |  |  |
| &nbsp;&nbsp; **Total distributions** | **(1.13)** | **(.71)** | **--** |
| &nbsp;&nbsp; **Other capital** | -- <sup>f</sup> | -- <sup>f</sup> | .02 |
| &nbsp;&nbsp; **Net asset value, end of period** | **$24.93** | **$22.23** | **$20.84** |
| &nbsp;&nbsp; **Total return at net asset value** (%)<sup>b</sup> | **17.87** | **10.22** | **4.20 \*** |
| &nbsp;&nbsp; **RATIOS AND SUPPLEMENTAL DATA** |  |  |  |
| &nbsp;&nbsp; **Net assets, end of period (in thousands)** | **$234373** | **$162287** | **$128688** |
| &nbsp;&nbsp; Ratio of expenses to average net assets (%)<sup>c,d</sup> | .49 | .49 | .14\* |
| &nbsp;&nbsp; Ratio of net investment income (loss) to average net assets (%)<sup>d</sup> | 2.28 | 2.44 | 1.73\* |
| &nbsp;&nbsp; Portfolio turnover (%)<sup>e</sup> | 66 | 111 | 42\* |

---

\* Not annualized.

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

(b) Total return assumes dividend reinvestment.

(c) Excludes acquired fund fees and expenses, if any.

Prospectus 33

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(d) Reflects waivers of certain fund expenses in connection with investments in Putnam Government Money Market Fund during the period. As a result of such waivers, the expenses of the fund reflect a reduction of the following amounts:

---

| | |
|:---|:---|
| | **Percentage of average** <br> **net assets**  |
|  April 30, 2025 | <0.01% |
|  April 30, 2024 | <0.01 |
|  April 30, 2023 | <0.01 |

---

(e) Portfolio turnover excludes securities received or delivered in-kind, if any.

(f) Amount represents less than $0.01 per share.

34 Prospectus

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### For more information about Putnam PanAgora ESG International Equity ETF
You can learn more about the fund in the following documents:

#### Annual/Semiannual Report to Shareholders and Form N-CSR Filed with the SEC
Contain additional information about the fund's investments. The fund's annual report also discusses the market conditions and investment strategies that significantly affected the fund's performance during its last fiscal year.In Form N-CSR, you will find the fund's annual and semi-annual financial statements.

#### Statement of Additional Information ("SAI")
Contains more information about the fund, its investments and policies. It is incorporated by reference (is legally a part of this prospectus).

For a free copy of the current annual/semiannual report, financial statements or the SAI, please contact your investment representative or call us at the number below. You also can view the current annual/semiannual report, financial statements and the SAI online through www.franklintempleton.com.

Reports and other information about the fund are available on the EDGAR Database on the SEC's Website at http://www.sec.gov, and copies of this information may be obtained, after paying a duplicating fee, by electronic request at the following email address: publicinfo@sec.gov.

---

| | |
|:---|:---|
| Putnam Investments |  |
| 100 Federal Street |  |
| Boston, MA 02110 |  |
| 1-800-225-1581 |  |
| 811-23643 | 39494-P 09/25 |

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September 1, 2025

Putnam ETF Trust

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| | | |
|:---|:---|:---|
| **Fund** | **Symbol** | **Principal U.S. Listing Exchange** |
| &nbsp;&nbsp;&nbsp;Putnam BDC Income ETF ("BDC Income ETF") | PBDC | NYSE Arca, Inc. |
| &nbsp;&nbsp;&nbsp;Putnam BioRevolution™ ETF ("BioRevolution ETF") | SYNB | NYSE Arca, Inc. |
| &nbsp;&nbsp;&nbsp;Putnam Emerging Markets ex-China ETF ("Emerging Markets ex-China ETF") | PEMX | NYSE Arca, Inc. |
| &nbsp;&nbsp;&nbsp;Putnam ESG Core Bond ETF ("ESG Core Bond ETF") | PCRB | NYSE Arca, Inc. |
| &nbsp;&nbsp;&nbsp;Putnam ESG High Yield ETF ("ESG High Yield ETF") | PHYD | NYSE Arca, Inc. |
| &nbsp;&nbsp;&nbsp;Putnam ESG Ultra Short ETF ("ESG Ultra Short ETF") | PULT | NYSE Arca, Inc. |

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STATEMENT OF ADDITIONAL INFORMATION

This Statement of Additional Information ("SAI") is not a prospectus. If the Fund has more than one form of current prospectus, each reference to the prospectus in this SAI includes all of the Fund's prospectuses, unless otherwise noted. The SAI should be read together with the applicable prospectus. The audited financial statements and report of the Fund's independent registered public accounting firm in the Fund's Form N-CSR, for the fiscal year ended April 30, 2025, are incorporated by reference into this SAI, which means that they are part of this SAI for legal purposes.

Part I of this SAI contains specific information about each Fund listed above (references to the "Fund" mean each Fund listed on this cover page, unless otherwise noted). Part II includes information about the Fund and other Putnam mutual funds and exchange-traded funds (collectively, the "Putnam funds").

For a free copy of the Fund's current prospectus, shareholder reports, and/or financial statements, call Putnam Investor Services at 1-800-225-1581, write P.O. Box 219697, Kansas City, MO 64121-9697 or visit www.franklintempleton.com.

1 PETF4-SAI 09/25

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#### **Table of Contents**

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| | |
|:---|:---|
|  **[PART I](#sai842776_1)** |  |
|  **[FUND ORGANIZATION AND CLASSIFICATION](#sai842776_2)** | **3** |
|  **[INVESTMENT RESTRICTIONS](#sai842776_3)** | **3** |
|  **[CHARGES AND EXPENSES](#sai842776_4)** | **5** |
|  **[PORTFOLIO MANAGERS](#sai842776_5)** | **16** |
|  **[SECURITIES LENDING ACTIVITIES](#sai842776_6)** | **21** |
|  **[FINANCIAL STATEMENTS](#sai842776_7)** | **21** |
|  **[PART II](#sai842776_8)** |  |
|  **[BUYING AND SELLING SHARES](#sai842776_9)** | **22** |
|  **[MISCELLANEOUS INVESTMENTS, INVESTMENT PRACTICES AND RISKS](#sai842776_10)** | **29** |
|  **[EXCHANGE TRADED FUNDS RISK](#sai842776_11)** | **80** |
|  **[TAXES](#sai842776_12)** | **80** |
|  **[MANAGEMENT](#sai842776_13)** | **94** |
|  **[DISCLOSURE OF PORTFOLIO INFORMATION](#sai842776_14)** | **112** |
|  **[INFORMATION SECURITY RISKS](#sai842776_15)** | **114** |
|  **[PROXY VOTING GUIDELINES AND PROCEDURES](#sai842776_16)** | **114** |
|  **[SECURITIES RATINGS](#sai842776_17)** | **114** |
|  **[APPENDIX A - PROXY VOTING PROCEDURES OF THE PUTNAM FUNDS](#sai842776_18)** | **119** |

---

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#### SAI

#### PART I

#### FUND ORGANIZATION AND CLASSIFICATION
Each of ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF is a diversified series of Putnam ETF Trust (the "Trust"). Each of BDC Income ETF, BioRevolution ETF and Emerging Markets ex-China ETF is a non-diversified series of the Trust. The Trust is a Delaware statutory trust organized on December 22, 2020.

The Trust is an open-end management investment company with an unlimited number of authorized shares of beneficial interest. The Trustees may, without shareholder approval, create two or more series of shares representing separate investment portfolios. Any series of shares may be divided without shareholder approval into two or more classes of shares having such preferences and special or relative rights and privileges as the Trustees determine.

Each share has one vote per dollar of net asset value represented by such share.

Shares of all classes vote together as a single class except when otherwise required by law or as determined by the Trustees. The Trustees may take many actions affecting the fund without shareholder approval, including under certain circumstances merging the Fund into another Putnam fund. Shares are freely transferable, are entitled to dividends as declared by the Trustees, and, if the Fund were liquidated, would receive the net assets of the Fund.

The Fund may refuse any order to purchase shares. Although the Fund is not required to hold annual meetings of its shareholders, shareholders holding at least 10% of the outstanding shares entitled to vote have the right to call a meeting to elect or remove Trustees, or to take other actions as provided in the Agreement and Declaration of Trust.

#### Information about the Summary Prospectus, Prospectus, and SAI
The Fund has entered into contractual arrangements with an investment adviser, distributor, transfer 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 Trust's Agreement and Declaration of Trust, any claims asserted by a shareholder against or on behalf of the Trust (or its series), including claims against Trustees and Officers, must be brought in courts of the State of Delaware .

#### INVESTMENT RESTRICTIONS
The Fund has adopted the fundamental investment restrictions below for the protection of shareholders. Fundamental investment restrictions may not be changed without a vote of a majority of the outstanding voting securities. The Investment Company Act of 1940, as amended (the "1940 Act"), provides that a "vote of a majority of the outstanding voting securities" of a fund means the affirmative vote of the lesser of (1) more than 50% of the outstanding fund shares, or (2) 67% or more of the shares present at a meeting if more than 50% of the outstanding fund shares are represented at the meeting in person or by proxy.

#### As fundamental investment restrictions, the Fund may not and will not:
(1) Borrow money in excess of 33 1/3% of the value of its total assets (not including the amount borrowed) at the time the borrowing is made.

(2) Underwrite securities issued by other persons except to the extent that, in connection with the disposition of its portfolio investments, it may be deemed to be an underwriter under certain federal securities laws.

(3) Purchase or sell real estate, although it may purchase securities of issuers which deal in real estate, securities which are secured by interests in real estate, and securities representing interests in real estate, and it may acquire and dispose of real

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estate or interests in real estate acquired through the exercise of its rights as a holder of debt obligations secured by real estate or interests therein.

(4) Purchase or sell commodities or commodity contracts, except as permitted by applicable law and the fund may purchase or sell (a) other instruments backed by commodities and (b) commodities acquired as a result of ownership of securities or other instruments.

(5) Make loans, except by purchase of debt obligations in which the fund may invest consistent with its investment policies (including without limitation debt obligations issued by other Putnam funds), by entering into repurchase agreements, or by lending its portfolio securities.

(6) BDC Income ETF, BioRevolution ETF and Emerging Markets ex-China ETF: With respect to 50% of its total assets, invest in securities of any issuer if, immediately after such investment, more than 5% of the total assets of the fund (taken at current value) would be invested in the securities of such issuer; provided that this limitation does not apply to obligations issued or guaranteed as to interest or principal by the U.S. government or its agencies or instrumentalities or to securities issued by other investment companies.

ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF: With respect to 75% of its total assets, invest in securities of any issuer if, immediately after such investment, more than 5% of the total assets of the fund (taken at current value) would be invested in the securities of such issuer; provided that this limitation does not apply to obligations issued or guaranteed as to interest or principal by the U.S. government or its agencies or instrumentalities or to securities issued by other investment companies.

(7) BDC Income ETF, BioRevolution ETF, and Emerging Markets ex-China ETF: With respect to 50% of its total assets, acquire more than 10% of the outstanding voting securities of any issuer; provided that this limitation does not apply to obligations issued or guaranteed as to interest or principal by the U.S. government or its agencies or instrumentalities or to securities issued by other investment companies.

ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF: With respect to 75% of its total assets, acquire more than 10% of the outstanding voting securities of any issuer; provided that this limitation does not apply to obligations issued or guaranteed as to interest or principal by the U.S. government or its agencies or instrumentalities or to securities issued by other investment companies.

(8) All Funds except BDC Income ETF: Purchase securities (other than securities of the U.S. government, its agencies or instrumentalities) if as a result of such purchase, more than 25% of the fund's total assets would be invested in any one industry.

BDC Income ETF: Invest more than 25% of its total assets in a particular industry or group of industries, except that the Fund will invest more than 25% of its total assets in business development companies ("BDCs"). This limitation is not applicable to investments in obligations issued or guaranteed by the U.S. government, its agencies and instrumentalities or repurchase agreements with respect thereto.

(9) Issue any class of securities which is senior to the fund's shares of beneficial interest, except for permitted borrowings.

For purposes of the Fund's fundamental policy on commodities and commodities contracts (#4 above), notwithstanding any federal legislation or regulatory action by the Commodity Futures Trading Commission ("CFTC") that subject swaps to regulation by the CFTC, the Fund will not consider such instruments to be commodities or commodity contracts for purposes of this policy.

BDC Income ETF: For purposes of the Fund's fundamental policies on diversification (#6 and #7 above), the Fund will consider the term "investment companies" to include any issuer that qualifies as a "regulated investment company" under Section 851(a)

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of the Internal Revenue Code of 1986, as amended, including, without limitation, an issuer that has in effect an election under the Investment Company Act of 1940, as amended, to be treated as a "business development company."

For purposes of the Fund's fundamental policy on industry concentration (#8 above), the Fund's investment manager determines the appropriate industry categories and assigns issuers to them, informed by a variety of considerations, including relevant third party categorization systems. Industry categories and issuer assignments may change over time as industry sectors and issuers evolve. Portfolio allocations shown in shareholder reports and other communications may use broader investment sectors or narrower sub-industry categories.

All percentage limitations on investments will apply at the time of the making of an investment and shall not be considered violated unless an excess or deficiency occurs or exists immediately after and as a result of such investment.

#### The following non-fundamental investment policy may be changed by the Trustees without shareholder approval:
ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF: The Fund will not acquire any securities of registered open-end investment companies or registered unit investment trusts in reliance on Sections 12(d)(1)(F) or (G)of the Investment Company Act of 1940, as amended.

#### CHARGES AND EXPENSES

#### Creation/Redemption Transaction Fees
The following table shows the standard transaction fees for creations and redemptions.

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| | | |
|:---|:---|:---|
| **Fund**<br> **&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** | **&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Standard Creation/Redemption** <br> **Transaction Fee (in kind)** | **Standard Creation/Redemption <br>Transaction Fee (in cash)** |
| &nbsp;&nbsp; BDC Income ETF | $250 | $100 |
| &nbsp;&nbsp; BioRevolution ETF | $250 | $100 |
| &nbsp;&nbsp; Emerging Markets ex-China ETF | $250 | $100 |
| &nbsp;&nbsp; ESG Core Bond ETF | $500 | $100 |
| &nbsp;&nbsp; ESG High Yield ETF | $500 | $100 |
| &nbsp;&nbsp; ESG Ultra Short ETF | $500 | $100 |

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#### Management fees: BDC Income ETF, BioRevolution ETF and Emerging Market ex-China ETF
Putnam Investment Management, LLC (the "Investment Manager") serves as the Fund's investment manager. Under the Fund's management agreement with the Investment Manager (the "Management Contract"), the Fund pays an annual all-inclusive management fee to the Investment Manager as shown below. The management fee is based on the Fund's average daily net assets and is calculated and accrued daily. In consideration of the management fee, the Investment Manager pays all expenses incurred by the Fund, or reimburses the Fund for, all of the Fund's organizational and other operating expenses, excluding only: (i) interest and taxes (including, but not limited to, income, excise, transfer and withholding taxes); (ii) expenses of the Fund incurred with respect to the acquisition and disposition of portfolio securities, commodities or other financial instruments and the execution of portfolio transactions, including brokerage commissions; (iii) expenses incurred in connection with any distribution plan adopted by the Fund in compliance with Rule 12b-1 under the 1940 Act, including distribution fees; (iv) expenses of printing and mailing proxy materials to shareholders of the Fund; (v) all other expenses incidental to holding meetings of the Fund's shareholders, including proxy solicitations therefor; (vi) litigation expenses (including, but not limited to, any indemnification obligation, attorneys' fees, expenses, costs, judgments, amounts paid in settlement, fines, penalties, fees of expert witnesses, document production fees, and all other liabilities whatsoever incurred or paid by the Fund or a person indemnified by the Fund); (vii) the fee payable to the Investment Manager hereunder; (viii) any extraordinary expenses (which, for the avoidance of doubt, do not include expenses related to the organization of any subsidiary for a fund or the ongoing corporate expenses of maintaining such subsidiary) and (ix) acquired fund fees and expenses.

Management Fee:

BDC Income ETF: 0.75%

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BioRevolution ETF: 0.70%

Emerging Markets ex-China ETF: 0.69%\*

\*Prior to July 1, 2025, Emerging Markets ex-China ETF paid an annual all-inclusive management fee of 0.85% to the Investment Manager based on the Fund's average daily net assets.

#### Management fees: ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF
Franklin Advisers, Inc. (the "Investment Manager") serves as the Fund's investment manager. Under the Fund's management agreement with the Investment Manager (the "Management Contract"), the Fund pays an annual all-inclusive management fee to the Investment Manager as shown below. The management fee is based on the Fund's average daily net assets and is calculated and accrued daily. In consideration of the management fee, the Investment Manager pays all expenses incurred by the Fund, or reimburses the Fund for, all of the Fund's organizational and other operating expenses, excluding only: (i) interest and taxes (including, but not limited to, income, excise, transfer and withholding taxes); (ii) expenses of the Fund incurred with respect to the acquisition and disposition of portfolio securities, commodities or other financial instruments and the execution of portfolio transactions, including brokerage commissions; (iii) expenses incurred in connection with any distribution plan adopted by the Fund in compliance with Rule 12b-1 under the 1940 Act, including distribution fees; (iv) expenses of printing and mailing proxy materials to shareholders of the Fund; (v) all other expenses incidental to holding meetings of the Fund's shareholders, including proxy solicitations therefor; (vi) litigation expenses (including, but not limited to, any indemnification obligation, attorneys' fees, expenses, costs, judgments, amounts paid in settlement, fines, penalties, fees of expert witnesses, document production fees, and all other liabilities whatsoever incurred or paid by the Fund or a person indemnified by the Fund); (vii) the fee payable to the Investment Manager hereunder; (viii) any extraordinary expenses (which, for the avoidance of doubt, do not include expenses related to the organization of any subsidiary for a fund or the ongoing corporate expenses of maintaining such subsidiary) and (ix) acquired fund fees and expenses.

Management Fee:

ESG Core Bond ETF: 0.35%

ESG High Yield ETF: 0.55%

ESG Ultra Short ETF: 0.25%

For the past three fiscal years ended April 30, pursuant to the applicable management contract, the Fund incurred the following fees:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Fund name** | **Fiscal year** | **Fiscal year** | **Management** <br>**fee paid** | **Amount of<br> management** <br>**fee waived\*** | **Amount<br>management**<br> **fee would have** <br>**been without<br>waivers** |
|  BDC Income ETF | 2025 |  | $964087 | $1289 | $965376 |
|  | 2024 |  | $352113 | $382 | $352495 |
|  | 2023 | \*\* | $66336 | $86 | $66422 |
|  BioRevolution ETF | 2025 |  | $37138 | $360 | $37498 |
|  | 2024 |  | $36284 | $420 | $36704 |
|  | 2023 | \*\* | $18638 | $67 | $18705 |
|  Emerging Markets ex-China ETF | 2025 |  | $66498 | $658 | $67156 |
|  | 2024 | \*\*\* | $54028 | $133 | $54161 |
|  ESG Core Bond ETF | 2025 |  | $2233606 | $88755 | $2322361 |
|  | 2024 |  | $1630290 | $33237 | $1663527 |
|  | 2023 | \*\*\*\* | $337530 | $31 | $337561 |
|  ESG High Yield ETF | 2025 |  | $849074 | $28870 | $877944 |
|  | 2024 |  | $584823 | $19690 | $604513 |
|  | 2023 | \*\*\*\* | $131259 | $1596 | $132855 |
|  ESG Ultra Short ETF | 2025 |  | $265059 | $2787 | $267846 |
|  | 2024 |  | $254676 | $564 | $255240 |
|  | 2023 | \*\*\*\* | $67876 | $21 | $67897 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;\* For the fiscal year ended April 30, 2025, April 30, 2024 and April 30, 2023 management fees paid by the Fund were reduced by an amount equal to the management fees paid by affiliated funds in which the Fund invested. 

\*\* For the period September 29, 2022 (commencement of operations) to April 30, 2023.

\*\*\* For the period May 17, 2023 (commencement of operations) to April 30, 2024.

\*\*\*\* For the period January 19, 2023 (commencement of operations) to April 30, 2023.

#### Brokerage commissions
For the past three fiscal years ended April 30, the Fund paid the following brokerage commissions:

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| | | | |
|:---|:---|:---|:---|
| **Fund name** | **Fiscal year** | **Fiscal year** | **Broker commissions** |
|  BDC Income ETF | 2025 |  | $195462 \* |
|  | 2024 |  | $84745 |
|  | 2023 | \*\* | $30734 |
|  BioRevolution ETF | 2025 |  | $574 |
|  | 2024 |  | $1109 |
|  | 2023 | \*\* | $2208 |
|  Emerging Markets ex-China ETF | 2025 |  | $14601 |
|  | 2024 | \*\*\* | $14592 |
|  ESG Core Bond ETF | 2025 |  | $0 |
|  | 2024 |  | $0 |
|  | 2023 | \*\*\*\* | $0 |
|  ESG High Yield ETF | 2025 |  | $0 |
|  | 2024 |  | $414 |
|  | 2023 | \*\*\*\* | $1087 |
|  ESG Ultra Short ETF | 2025 |  | $0 |
|  | 2024 |  | $0 |
|  | 2023 | \*\*\*\* | $0 |

---

\* The increase in brokerage commissions paid between the fiscal years ended April 30, 2024 and April 30, 2025 was due to an increase in assets under management.

\*\* For the period September 29, 2022 (commencement of operations) to April 30, 2023.

\*\*\* For the period May 17, 2023 (commencement of operations) to April 30, 2024.

\*\*\*\* For the period January 19, 2023 (commencement of operations) to April 30, 2023.

For the fiscal year ended April 30, 2025, the Fund placed transactions with brokers and dealers through which the Investment Manager and its affiliates receive brokerage or research services as follows:

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| | | |
|:---|:---|:---|
| **Fund name** | **Dollar Value of these<br>transactions** | **Amount of<br>commissions** |
|  BDC Income ETF | $77135830 | $73867 |
|  BioRevolution ETF | $318517 | $32 |
|  Emerging Markets ex-China ETF | $3289049 | $3718 |

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For the fiscal year ended April 30, 2025, ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF did not direct any brokerage transactions related to research services and did not pay any brokerage commissions related to research services.

As of April 30, 2025, the Fund held the following securities of its regular broker-dealers (or affiliates of such broker-dealers):

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---

| | | |
|:---|:---|:---|
| **Fund name** | **Broker-dealer or affiliates** | **Value of securities held** |
|  ESG Core Bond ETF | JPMorgan Chase & Co. | $11049467 |
|  | Bank of America Corp. | $8368722 |
|  | Morgan Stanley | $5511303 |
|  | Goldman Sachs Group, Inc. (The) | $1505874 |
|  ESG Ultra Short ETF | Citigroup, Inc. | $65229 |
|  | Bank of America Corp. | $2261369 |
|  | JPMorgan Chase & Co. | $2108065 |
|  | Wells Fargo & Co. | $624349 |
|  | Mizuho Financial Group | $641274 |
|  | Barclays PLC | $1744241 |
|  | Royal Bank of Canada | $1576661 |
|  | Truist Financial Corp. | $1287618 |

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As of April 30, 2025, BDC Income ETF, BioRevolution ETF, Emerging Markets ex-China ETF and ESG High Yield ETF did not hold securities of its regular broker-dealers (or affiliates of such broker-dealers).

#### Trustee responsibilities and fees
The Trustees are responsible for generally overseeing the conduct of Fund business. Subject to such policies as the Trustees may determine, the Investment Manager furnishes a continuing investment program for the Fund and makes investment decisions on its behalf. Subject to the control of the Trustees, the Investment Manager also manages the Fund's other affairs and business.

The table below shows the value of each Trustee's holdings in the Fund and in all registered investment companies in the Franklin Templeton funds complex overseen by the Trustee as of December 31, 2024.

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Dollar Range of Equity Securities in the Fund ($)** | **Dollar Range of Equity Securities in the Fund ($)** | **Dollar Range of Equity Securities in the Fund ($)** | **Dollar Range of Equity Securities in the Fund ($)** | **Dollar Range of Equity Securities in the Fund ($)** | **Dollar Range of Equity Securities in the Fund ($)** | |
| <br>**Trustees**  | **BDC Income ETF** | **BioRevolution<br>ETF** | **Emerging<br>Markets<br>ex-China<br>ETF** | **ESG Core<br>Bond ETF** | **ESG High Yield<br>ETF** | **ESG Ultra Short<br>ETF** | <br>**Aggregate Dollar Range<br>of Equity Securities in<br>All Registered<br>Investment Companies<br>in the Franklin<br>Templeton Funds<br>Complex Overseen by<br>Trustee ($)** |
|  **Independent Trustees** | **Independent Trustees** | **Independent Trustees** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $50001-$100000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy |  |  |  |  |  |  | $10001-$50000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $1-$10000 | $1-$10000 |  | $1-$10000 | $10001-$50000 | $10001-$50000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
|  **Interested Trustees** | **Interested Trustees** | **Interested Trustees** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust |  |  |  |  |  |  | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds |  |  |  |  |  |  | over $100,000 |

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Each Independent Trustee of the Fund receives an annual retainer fee and an additional fee for each Trustee meeting attended. Independent Trustees also are reimbursed for expenses they incur relating to their services as Trustees. All of the current Independent Trustees of the Fund are Trustees of all the Putnam funds and receive fees for their services.

The Trustees periodically review their fees to ensure that such fees continue to be appropriate in light of their responsibilities as well as in relation to fees paid to trustees of other mutual fund complexes. The Board Policy and Nominating Committee, which consists solely of Independent Trustees of the Fund, estimates that committee and Trustee meeting time, together with the appropriate preparation, requires the equivalent of at least four business days per regular Trustee meeting.

The standing committees of the Board of Trustees, and the number of times each committee met during the fiscal year ended April 30, 2025, are shown in the table below:

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---

| | |
|:---|:---|
|  Audit, Compliance and Risk Committee | 13 |
|  Board Policy and Nominating Committee | 6 |
|  Brokerage Committee | 3 |
|  Contract Committee | 8 |
|  Executive Committee | 1 |
|  Investment Oversight Committees |  |
|  Investment Oversight Committee A | 5 |
|  Investment Oversight Committee B | 5 |
|  Pricing Committee | 8 |
|  Exchange-Traded Fund Committee | 4 |

---

Effective July 1 2025, the following changes were made to the standing committees:

● The Brokerage Committee, the Pricing Committee and the Exchange-Traded Fund Committee were eliminated as standing committees.

● The Contract Committee assumed the responsibilities of the Brokerage Committee and the Audit, Compliance and Risk Committee assumed the responsibilities of the Pricing Committee.

● The responsibilities of the Exchange-Traded Fund Committee were assumed by the Investment Oversight Committees and the other standing committees as appropriate based on subject matter.

The following table shows the fees paid to each Trustee by the Fund for the fiscal year ended April 30, 2025 and the fees paid to each Trustee by other funds in the Franklin Templeton funds complex for services rendered during the calendar year ended December 31, 2024. Certain Independent Trustees who serve in leadership positions of the Board of Trustees or Board committees receive additional compensation, which is included in the fees shown below.

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| | | | | |
|:---|:---|:---|:---|:---|
| **Trustees** | **Aggregate<br>compensation from<br>the Fund<sup>1</sup>** | **Pension or<br>retirement<br>benefits accrued**<br> **as part of Fund<br>expenses** | **Estimated<br>annual benefits<br>from Franklin**<br> **Templeton**<br> **funds complex**<br> **upon retirement<sup>2</sup>** | **Total<br>compensation<br>from Franklin<br>Templeton funds<br>complex** |
|  **BDC Income ETF** |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $350 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $473 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $350 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $366 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $337 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $350 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $350 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $376 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $362 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $350 | N/A | N/A | $382000 |
|  **Interested Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |
|  **BioRevolution ETF** |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $13 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $18 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $13 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $14 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $13 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $13 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $13 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $14 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $14 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $13 | N/A | N/A | $382000 |
|  **Interested Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |
|  **Emerging Markets ex-China ETF** |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $19 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $26 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $19 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $20 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $18 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $19 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $19 | N/A | N/A | $355320 |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $21 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $20 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $19 | N/A | N/A | $382000 |
|  **Interested Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |
|  **ESG Core Bond ETF** |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $1706 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $2314 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $1706 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $1768 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $1627 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $1706 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $1706 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $1834 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $1756 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $1706 | N/A | N/A | $382000 |
|  **Interested Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |
|  **ESG High Yield ETF** |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $415 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $563 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $415 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $431 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $397 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $415 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $415 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $446 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $427 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $415 | N/A | N/A | $382000 |
|  **Interested Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |
|  **ESG Ultra Short ETF** |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $270 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $366 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $270 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $280 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $258 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $270 | N/A | N/A | $382000 |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $270 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $290 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $278 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $270 | N/A | N/A | $382000 |
|  **Interested Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |

---

<sup>1</sup> Certain Trustees are also owed compensation deferred pursuant to a Trustee Compensation Deferral Plan. As of April 30, 2025, the total amounts of deferred compensation payable by BDC Income ETF, Biorevolution ETF, Emerging Markets ex-China ETF, ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF, including income earned on such amounts, to these Trustees were: Mr. Ahamed – $14, $2, $2, $177, $40, and $45; Ms. Baumann – $11, $2, $1, $140, $32 and $36; Ms. Domotorffy – $12, $2, $1, $158, $36 and $40; Dr. Hill – $9, $1, $1 $107, $24 and $27; and Ms. Pillai – $5, $1, $1, $62, $14 and $16.

<sup>2</sup> Estimated benefits for each Trustee are based on Trustee fee rates for calendar years 2003, 2004 and 2005.

<sup>3</sup> Mr. Leibler retired from the Board of Trustees effective June 30, 2024.

<sup>4</sup> Mr. McGreevey was appointed to the Board of Trustees on May 17, 2024.

<sup>5</sup> Mr. Reynolds and Ms. Trust are not compensated by the Fund for their service as Trustees because of their affiliation with the Investment Manager.

Under a retirement plan for Trustees of Putnam funds (the "Plan"), each Trustee who retires with at least five years of service as a Trustee of the funds is entitled to receive an annual retirement benefit equal to one-half of the average annual attendance and retainer fees paid to such Trustee for calendar years 2003, 2004 and 2005. This retirement benefit is payable during a Trustee's lifetime, beginning the year following retirement, for the number of years of service through December 31, 2006. A death benefit, also available under the Plan, ensures that the Trustee and his or her beneficiaries will receive benefit payments for the lesser of an aggregate period of (i) ten years, or (ii) such Trustee's total years of service.

The Plan Administrator (currently the Board Policy and Nominating Committee) may terminate or amend the Plan at any time, but no termination or amendment will result in a reduction in the amount of benefits (i) currently being paid to a Trustee at the time of such termination or amendment, or (ii) to which a current Trustee would have been entitled had he or she retired immediately prior to such termination or amendment. The Trustees have terminated the Plan with respect to any Trustee first elected to the Board after 2003.

For additional information concerning the Trustees, see "Management" in Part II of this SAI.

#### Share Ownership
Principal Shareholders

Although the Fund does not have information concerning the beneficial ownership of shares held in the names of Depository Trust Company participant brokers ("DTC Participants"), to the best knowledge of the Fund, as of July 31, 2025, the following DTC Participants owned of record 5% or more of the outstanding shares of the Fund.

---

| | | |
|:---|:---|:---|
| **Fund** | **Name and Address** | **Percent of Ownership (%)** |
|  **BDC Income ETF** |  |  |
|  | CHARLES SCHWAB & CO, INC.<br> 211 MAIN ST<br> SAN FRANCISCO CA 94105-1905 | 28.89% |
|  | NATIONAL FINANCIAL SERVICES LLC<br> 499 WASHINGTON BLVD<br> JERSEY CITY, NJ 07310-1995 | 27.93% |

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------

---

| | | |
|:---|:---|:---|
|  | RAYMOND JAMES<br> 880 CARILLON PARKWAY<br> ST. PETERSBURG, FL 33716-110 | 7.25% |
|  | PERSHING LLC<br> 1 PERSHING PLAZA<br> JERSEY CITY, NJ 07399 | 5.74% |
|  | VANGUARD<br> P.O. BOX 1110<br> VALLEY FORGE, PA 19482-1110 | 5.14% |
|  **BioRevolution ETF** |  |  |
|  | J.P. MORGAN SECURITIES LLC/JPMC<br> 20855 STONE OAK PKWY<br> SAN ANTONIO, TX 78258 | 68.95% |
|  | NATIONAL FINANCIAL SERVICES LLC<br> 499 WASHINGTON BLVD<br> JERSEY CITY, NJ 07310-1995 | 17.53% |
|  | CHARLES SCHWAB & CO, INC.<br> 211 MAIN ST<br> SAN FRANCISCO CA 94105-1905 | 5.43% |
|  **Emerging Markets ex-China ETF** |  |  |
|  | CHARLES SCHWAB & CO, INC.<br> 211 MAIN ST<br> SAN FRANCISCO CA 94105-1905 | 73.71% |
|  | NATIONAL FINANCIAL SERVICES LLC<br> 499 WASHINGTON BLVD<br> JERSEY CITY, NJ 07310-1995 | 13.31% |
|  | GOLDMAN SACHS GROUP, INC.<br> 200 WEST STREET<br> NEW YORK, NY10282 | 5.81% |
|  **ESG Core Bond ETF** |  |  |
|  | J.P. MORGAN SECURITIES LLC4<br> CHASE METROTECH CENTER<br> BROOKLYN, NY 11245-0001 | 99.15% |
|  **ESG High Yield ET** | J.P. MORGAN SECURITIES LLC4<br> CHASE METROTECH CENTER<br> BROOKLYN, NY 11245-0001 | 96.44% |

---

------

---

| | | |
|:---|:---|:---|
|  **ESG Ultra Short ETF** |  |  |
|  | J.P. MORGAN SECURITIES LLC4<br> CHASE METROTECH CENTER<br> BROOKLYN, NY 11245-0001 | 76.61% |
|  | CHARLES SCHWAB & CO, INC.<br> 211 MAIN ST<br> SAN FRANCISCO CA 94105-1905 | 10.15% |

---

Shareholders who beneficially own 25% or more of the outstanding shares of the Fund or who are otherwise deemed to "control" the Fund may be able to determine or significantly influence the outcome of matters submitted to a vote of the Fund's shareholders.

As of July 31, 2025, the Trustees and officers of the Trust, as a group, owned less than 1% of the outstanding shares of each class of the Fund.

#### PORTFOLIO MANAGERS

#### Other Accounts Managed by the Portfolio Managers
The table below identifies the portfolio managers, the number of accounts (other than the Fund) for which the portfolio managers have day-to-day management responsibilities and the total assets in such accounts, within each of the following categories: registered investment companies, other pooled investment vehicles, and other accounts. For each category, the number of accounts and total assets in the accounts where fees are based on performance are also indicated, as applicable. Unless noted otherwise, all information is provided as of April 30, 2025.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Portfolio Manager** | **Type of Account**<br>| **Number of<br>Accounts<br>Managed** | **Total Assets<br>Managed<br>(Millions) ($)** | **Number of Accounts<br>Managed for which<br>Advisory Fee is<br>Performance-Based** | **Assets Managed for<br>which Advisory Fee<br>is**<br> **Performance-Based<br>(Millions) ($)** |
|  **BDC Income ETF** | **BDC Income ETF** |  |  |  |  |
|  Michael Petro | Registered Investment<br>Companies | 2 | 337 | 0 | 0 |
|  | Other Pooled<br> Investment Vehicles | 2 | .6 | 0 | 0 |
|  | Other Accounts | 0 | 0 | 0 | 0 |
|  **BioRevolution ETF** |  |  |  |  |  |

---

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  William Rives | Registered Investment Companies | 2 | 638.25 | 0 | 0 |
|  | Other Pooled Investment Vehicles | 0 | 0 | 0 | 0 |
|  | <br> Other Accounts | 0 | 0 | 0 | 0 |
|  **Emerging Markets ex-China ETF** | **Emerging Markets ex-China ETF** |  |  |  |  |
|  Brian S. Freiwald | Registered Investment Companies | 2 | 441.5 | 1 | 418.4 |
|  | Other Pooled Investment Vehicles | 2 | 16.88 | 0 | 0 |
|  | Other Accounts | 4 | 1028.7 | 0 | 0 |
|  **ESG Core Bond ETF** |  |  |  |  |  |
|  Andrew C. Benson | Registered Investment Companies | 10 | 15972 | 0 | 0 |
|  | Other Pooled Investment Vehicles | 10 | 21172.55 | 0 | 0 |
|  | Other Accounts | 20 | 8315 | 0 | 0 |
|  Albert W. Chan | Registered Investment Companies | 9 | 9457.2 | 0 | 0 |
|  | Other Pooled Investment Vehicles | 8 | 1922.66 | 0 | 0 |
|  | Other Accounts | 42 | 3026.63 | 1 | 447.7 |

---

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  Tina Chou | Registered Investment Companies | 8 | 10522 | 0 | 0 |
|  | Other Pooled Investment Vehicles | 2 | 415.66 | 0 | 0 |
|  | Other Accounts | 0 | 0 | 0 | 0 |
|  Patrick A. Klein | Registered Investment Companies | 20 | 21445.71 | 0 | 0 |
|  | Other Pooled Investment Vehicles | 10 | 2649.75 | 0 | 0 |
|  | Other Accounts | 15 | 6483.24 | 2 | 1723.53 |
|  Michael V. Salm | Registered Investment Companies | 24 | 30742.36 | 0 | 0 |
|  | Other Pooled Investment Vehicles | 26 | 22654.31 | 1 | 12.4 |
|  | Other Accounts | 22 | 8455 | 3 | 4029.78 |
|  **ESG High Yield ETF** |  |  |  |  |  |
|  Norman P. Boucher | Registered Investment Companies | 3 | 1664.99 | 0 | 0 |
|  | Other Pooled Investment Vehicles | 4 | 681.76 | 0 | 0 |
|  | Other Accounts | 5 | 647.96 | 0 | 0 |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
|  Robert L. Salvin | Registered Investment Companies | 4 | 2148.99 | 0 |
|  | Other Pooled Investment Vehicles | 3 | 681.76 | 0 |
|  | Other Accounts | 10 | 6089.74 | 0 |
|  **ESG Ultra-Short ETF** |  |  |  |  |
|  Andrew C. Benson | Registered Investment Companies | 10 | 16537.33 | 0 |
|  | Other Pooled Investment Vehicles | 10 | 21172.55 | 0 |
|  | Other Accounts | 20 | 8315 | 0 |
|  Joanne M. Driscoll | Registered Investment Companies | 12 | 33393.33 | 0 |
|  | Other Pooled Investment Vehicles | 6 | 3274.64 | 0 |
|  | Other Accounts | 4 | 1190.47 | 0 |
|  Michael J. Lima | Registered Investment Companies | 12 | 33393.33 | 0 |
|  | Other Pooled Investment Vehicles | 5 | 2426.39 | 0 |
|  | Other Accounts | 8 | 6580.31 | 0 |

---

#### Compensation of portfolio managers
The Investment Manager seeks to maintain a compensation program that is competitively positioned to attract, retain and motivate top-quality investment professionals. Portfolio managers receive a base salary, a cash incentive bonus opportunity, an equity compensation opportunity, and a benefits package. Portfolio manager compensation is reviewed annually, and the level of compensation is based on individual performance, the salary range for a portfolio manager's level of responsibility and Franklin

------

Templeton guidelines. Portfolio managers are provided no financial incentive to favor one fund or account over another. Each portfolio manager's compensation consists of the following three elements:

**Base salary** Each portfolio manager is paid a base salary.

**Annual bonus** Annual bonuses are structured to align the interests of the portfolio manager with those of the Fund's shareholders. Each portfolio manager is eligible to receive an annual bonus. Bonuses generally are split between cash (50% to 65%) and restricted shares of Franklin Resources, Inc. ("Resources") stock and mutual fund shares. The deferred equity-based compensation is intended to build a vested interest of the portfolio manager in the financial performance of both Resources and mutual funds advised by the Investment Manager. The bonus plan is intended to provide a competitive level of annual bonus compensation that is tied to the portfolio manager achieving consistently strong investment performance, which aligns the financial incentives of the portfolio manager and Fund shareholders. The Chief Investment Officer of the Investment Manager and/or other officers of the Investment Manager, with responsibility for the Fund, have discretion in the granting of annual bonuses to portfolio managers in accordance with Franklin Templeton guidelines. The following factors are generally used in determining bonuses under the plan:

● *Investment performance.* Primary consideration is given to the historic investment performance over the 1, 3 and 5 preceding years of all accounts managed by the portfolio manager. The pre-tax performance of each fund managed is measured relative to a relevant peer group and/or applicable benchmark as appropriate.

● *Non-investment performance.* The more qualitative contributions of the portfolio manager to the Investment Manager's business and the investment management team, including professional knowledge, productivity, responsiveness to client needs and communication, are evaluated in determining the amount of any bonus award.

● *Responsibilities.* The characteristics and complexity of funds managed by the portfolio manager are factored in the Investment Manager's appraisal.

**Additional long-term equity-based compensation** Portfolio managers may also be awarded restricted shares or units of Resources stock or restricted shares or units of one or more mutual funds. Awards of such deferred equity-based compensation typically vest over time, so as to create incentives to retain key talent.

**Benefits** Portfolio managers also participate in benefit plans and programs available generally to all employees of the Investment Manager.

#### Portfolio managers' securities ownership
The table below identifies ownership of equity securities of the Fund by the portfolio managers responsible for the day-to-day management of the Fund as of April 30, 2025.

---

| | |
|:---|:---|
| Portfolio Managers | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dollar Range of Ownership of Securities ($) |
|  **BDC Income ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Michael Petro | $100001-$500000 |
|  **BioRevolution ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; William Rives | $100001-$500000 |
|  **Emerging Markets ex-China ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Brian S. Freiwald |  |

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------

---

| | |
|:---|:---|
|  **ESG Core Bond ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Andrew C. Benson |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Albert W. Chan |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Tina Chou |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Patrick A. Klein |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Michael V. Salm |  |
|  **ESG High Yield ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Norman P. Boucher | $10001-$50000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Salvin |  |
|  **ESG Ultra-Short ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Andrew C. Benson | $1-$10000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Joanne M. Driscoll |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Michael J. Lima |  |

---

See "Management—Portfolio Transactions—Potential conflicts of interest in managing multiple accounts" in Part II of this SAI for information on how the Investment Manager addresses potential conflicts of interest resulting from an individual's management of more than one account.

#### SECURITIES LENDING ACTIVITIES
The Fund did not participate in any securities lending activities for the fiscal year ended April 30, 2025.

#### FINANCIAL STATEMENTS
The Fund's Form N-CSR for the fiscal year ended April 30, 2025

(https://www.sec.gov/Archives/edgar/data/1845809/000092881625000751/0000928816-25-000751-index.html,

https://www.sec.gov/Archives/edgar/data/1845809/000092881625000749/0000928816-25-000749-index.html,

https://www.sec.gov/Archives/edgar/data/1845809/000092881625000750/0000928816-25-000750-index.html,

https://www.sec.gov/Archives/edgar/data/1845809/000092881625000747/0000928816-25-000747-index.html,

https://www.sec.gov/Archives/edgar/data/1845809/000092881625000756/0000928816-25-000756-index.html,

https://www.sec.gov/Archives/edgar/data/1845809/000092881625000748/0000928816-25-000748-index.html) contains the Fund's audited financial statements, accompanying notes and the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, all of which are incorporated by reference into this SAI. These audited financial statements are available free of charge upon request by calling the Fund at 1-800-225-1581.

------

Throughout this SAI, references to the fund's investment manager (the "Investment Manager") shall refer to the entity indicated for each fund in the table below:

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp; **Investment**<br>**Manager**<br>| Franklin Advisers, Inc.<br>("Franklin Advisers")<br>| Putnam Investment Management, LLC ("Putnam<br>Management")<br>|
| &nbsp;&nbsp;&nbsp;Funds | Putnam ESG Core Bond ETF<br>Putnam ESG High Yield ETF<br>Putnam ESG Ultra Short ETF | Putnam BDC Income ETF<br>Putnam BioRevolution<sup>TM</sup> ETF<br>Putnam Emerging Markets Ex-China ETF<br>Putnam PanAgora ESG Emerging Markets Equity ETF<br>Putnam PanAgora ESG International Equity ETF<br>|

---

#### THE PUTNAM ETFS

#### STATEMENT OF ADDITIONAL INFORMATION ("SAI")

#### PART II

#### GENERAL DESCRIPTION OF THE FUNDS
Each fund is an actively managed exchange-traded fund ("ETF"). Each fund issues and redeems shares on a continuous basis at net asset value per share ("NAV") in aggregations of a specified number of shares called "Creation Units." Creation Units are generally issued in exchange for portfolio securities and/or cash. Shares are listed and traded on an exchange. Shares trade in the secondary market at market prices that may differ from the shares' NAV. Shares are not individually redeemable, but are redeemable only in Creation Unit aggregations, also in exchange for portfolio securities and/or cash. Shareholders who are not Authorized Participants (as defined herein), therefore, will not be able to purchase or redeem shares directly with or from a fund. Instead, most shareholders who are not Authorized Participants will buy and sell shares in the secondary market through a broker.

#### BUYING AND SELLING SHARES

#### Book-Entry Only System
The Depository Trust Company ("DTC") acts as securities depository for the shares. Shares of each fund are represented by securities registered in the name of DTC or its nominee and deposited with, or on behalf of, DTC. Certificates will not be issued for shares.

DTC, a limited-purpose trust company, was created to hold securities of its participants and to facilitate the clearance and settlement of securities transactions among DTC participants in such securities through electronic book-entry changes in accounts of the DTC participants, thereby eliminating the need for physical movement of securities certificates. DTC participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations, some of whom (and/or their representatives) own DTC. Access to the DTC system is also available to others such as banks, brokers, dealers, and trust companies that clear through or maintain a custodial relationship with a DTC participant, either directly or indirectly.

Beneficial ownership of shares is limited to DTC participants and persons holding interests through DTC participants. Ownership of beneficial interests in shares (owners of beneficial interests are referred to herein as Beneficial Owners) is shown on, and the transfer of ownership is effected only through, records maintained by DTC (with respect to DTC participants) and on the records of DTC participants (with respect to indirect DTC participants and Beneficial Owners that are not DTC participants). Beneficial Owners will receive from or through a DTC participant a written confirmation relating to their purchase of shares.

------

Conveyance of all notices, statements and other communications to Beneficial Owners is effected as follows. Pursuant to the Depositary Agreement between the trust and DTC, DTC is required to make available to the trust upon request and for a fee to be charged to the trust a listing of the shares of each fund held by each DTC participant. The trust shall inquire of each such DTC participant as to the number of Beneficial Owners holding fund shares, directly or indirectly, through such DTC participant. The trust shall provide each such DTC participant with copies of such notice, statement or other communication, in such form, number and at such place as such DTC participant may reasonably request, in order that such notice, statement or communication may be transmitted by such DTC participant, directly or indirectly, to such Beneficial Owners. In addition, the trust shall pay to each such DTC participant a fair and reasonable amount as reimbursement for the expenses attendant to such transmittal, all subject to applicable statutory and regulatory requirements.

Share distributions shall be made to DTC or its nominee, Cede & Co., as the registered holder of all shares. DTC or its nominee, upon receipt of any such distributions, shall credit immediately DTC participants' accounts with payments in amounts proportionate to their respective beneficial interests in shares of each fund as shown on the records of DTC or its nominee. Payments by DTC participants to indirect DTC participants and Beneficial Owners of shares held through such DTC participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in a "street name," and will be the responsibility of such DTC participants.

The trust has no responsibility or liability for any aspect of the records relating to or notices to Beneficial Owners, or payments made on account of beneficial ownership interests in such shares, or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests, or for any other aspect of the relationship between DTC and the DTC participants or the relationship between such DTC participants and the indirect DTC participants and Beneficial Owners owning through such DTC participants.

DTC may decide to discontinue providing its service with respect to shares at any time by giving reasonable notice to the trust and discharging its responsibilities with respect thereto under applicable law. Under such circumstances, the trust shall take action either to find a replacement for DTC to perform its functions at a comparable cost or, if such a replacement is unavailable, to issue and deliver printed certificates representing ownership of shares, unless the trust makes other arrangements with respect thereto satisfactory to the listing exchange.

#### Creation Units
The trust issues and redeems shares of each fund only in Creation Unit aggregations on a continuous basis through Franklin Distributors, LLC ("Franklin Distributors"), the Fund's distributor, without a sales load, at its NAV next determined after receipt, on any Business Day (as defined herein), of an order in proper form. An Authorized Participant that is not a "qualified institutional buyer," as such term is defined under Rule 144A of the 1933 Act, will not be able to receive, as part of a redemption, restricted securities eligible for resale under Rule 144A.

A "Business Day" with respect to each fund is any day on which the listing exchange or the NYSE is open for business. As of the date of the prospectus, the listing exchange and the NYSE observe the following holidays: New Year's Day, Martin Luther King, Jr. Day, President's Day (Washington's Birthday) (U.S.), Good Friday, Memorial Day, Juneteenth National Independence Day, Independence Day (U.S.), Labor Day (U.S.), Thanksgiving Day (U.S.), and Christmas Day.

To be eligible to place orders to purchase a Creation Unit of each fund, an entity must be an "Authorized Participant" which is a member or participant of a clearing agency registered with the SEC, which has a written agreement with Franklin Distributors, the fund's distributor, that allows the Authorized Participant to place orders for the purchase and redemption of Creation Units ("Participant Agreement"). All shares of each fund, however created, will be entered on the records of DTC in the name of Cede & Co. for the account of a DTC participant.

Each fund reserves the right to adjust the prices of fund shares and the number of shares in a Creation Unit in the future to maintain convenient trading ranges for investors. Any adjustments would be accomplished through stock splits or reverse stock splits, which would have no effect on the net assets of each fund.

#### Portfolio Deposit
The consideration for purchase of a Creation Unit generally consists of an in-kind deposit of a portfolio of securities ("Deposit Securities") designated by a fund (or in certain circumstances, cash in lieu of certain Deposit Securities) together with a deposit

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of a specified cash payment ("Cash Component") computed as described herein. Alternatively, each fund may issue and redeem Creation Units in exchange for a specified all-cash payment ("Cash Deposit"). Together, the Deposit Securities (including any cash in lieu amounts) and the Cash Component or, alternatively, the Cash Deposit, constitute the "Portfolio Deposit," which represents the minimum initial and subsequent investment amount for a Creation Unit. In the event each fund requires Deposit Securities (including any cash in lieu amounts) and a Cash Component in consideration for purchasing a Creation Unit, the function of the Cash Component is to compensate for any differences between the NAV per Creation Unit and the Deposit Amount (as defined below). The Cash Component would be an amount equal to the difference between the NAV of the shares (per Creation Unit) and the "Deposit Amount," which is an amount equal to the market value of the Deposit Securities. If the Cash Component is a positive number (the NAV per Creation Unit exceeds the Deposit Amount), the Authorized Participant will deliver the Cash Component. If the Cash Component is a negative number (the NAV per Creation Unit is less than the Deposit Amount), the Authorized Participant will receive the Cash Component. Computation of the Cash Component excludes any stamp duty or other similar fees and expenses payable upon transfer of beneficial ownership of the Deposit Securities, which shall be the sole responsibility of the Authorized Participant.

A fund may determine, upon receiving a purchase order from an Authorized Participant, to accept a basket of securities or cash that differs from Deposit Securities or to permit the substitution of an amount of cash (i.e., a "cash-in-lieu" amount) to be added to the Cash Component to replace any Deposit Security. In cases where a fund purchases portfolio securities with cash, the Authorized Participant will reimburse the fund for, among other things, any difference between the market value at which the securities were purchased by the fund and the cash in lieu amount (which amount, at the Investment Manager's discretion, may be capped), applicable registration fees and taxes. Brokerage commissions incurred in connection with a fund's acquisition of Deposit Securities will be at the expense of the fund and will affect the value of all shares of the fund; but the Investment Manager may adjust the transaction fee to the extent the composition of the Deposit Securities changes or cash in lieu is added to the Cash Component to protect ongoing shareholders.

#### Procedures for Creation Unit Purchases
All purchase orders must be placed for one or more Creation Units. All orders to purchase Creation Units must be received by Franklin Distributors or its agent no later than the closing time of regular trading hours on the listing exchange or the NYSE (ordinarily 4:00 p.m. Eastern Time) (the Closing Time) or at an earlier time set forth in the Participant Agreement or otherwise provided to all Authorized Participants on the date such order is placed in order for the creation of Creation Units to be effected based on the NAV of shares of each fund as next determined on such date after receipt of the order in proper form. The date on which an order to purchase Creation Units (or an order to redeem Creation Units as discussed below) is placed is referred to as the "Transmittal Date." Orders must be transmitted by an Authorized Participant by telephone or other transmission method acceptable to Franklin Distributors pursuant to procedures set forth in the Participant Agreement. Severe economic or market disruptions or changes, or telephone or other communications failure may impede the ability to reach Franklin Distributors or an Authorized Participant.

All orders to purchase Creation Units shall be placed with an Authorized Participant, as applicable, in the form required by such Authorized Participant. In addition, in the event an Authorized Participant places an order on behalf of an investor, the Authorized Participant may request the investor to make certain representations or enter into agreements with respect to the order, including payments of cash to pay the Cash Component, when required. Investors should be aware that their particular broker may not have executed a Participant Agreement and that, therefore, orders to purchase Creation Units have to be placed by the investor's broker through an Authorized Participant that has executed a Participant Agreement. In such cases there may be additional charges to such investor. At any given time, there may be only a limited number of broker-dealers that have executed a Participant Agreement.

Those placing orders to purchase Creation Units should afford sufficient time to permit proper submission of the order to Franklin Distributors or its agent prior to the applicable deadlines on the Transmittal Date. Authorized participants may ascertain the deadlines applicable to DTC and the Federal Reserve Bank wire system by contacting the operations department of the broker or depository institution effecting such transfer of Deposit Securities and Cash Component.

Portfolio Deposits must be delivered through the Federal Reserve System (for cash and government securities) and through DTC (for corporate securities) by an Authorized Participant that has executed a Participant Agreement. The Portfolio Deposit transfer must be ordered by the Authorized Participant on the Transmittal Date in a timely fashion so as to ensure the delivery of the requisite number of Deposit Securities through DTC to the account of each fund by no later than 1:00 p.m. Eastern Time of the next Business Day immediately following the Transmittal Date. In certain cases, Authorized Participants will purchase and

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redeem Creation Units of each fund on the same Transmittal Date. In these instances, each fund reserves the right to settle these transactions on a net basis.

All questions as to the number of Deposit Securities to be delivered, and the validity, form and eligibility (including time of receipt) for the deposit of any tendered securities, will be determined by each fund, whose determination shall be final and binding. For purchase orders composed solely of a Cash Component, the amount of cash equal to the Cash Component must be transferred directly to each fund's custodian through the Federal Reserve Bank wire transfer system in a timely manner so as to be received by each fund's custodian no later than 10:00 a.m. Eastern Time on the next Business Day immediately following such Transmittal Date. An order to purchase Creation Units is deemed received by Franklin Distributors on the Transmittal Date if (i) such order is received by Franklin Distributors or its agent not later than the Closing Time, or 3:00 p.m. Eastern Time in the case of nonconforming orders, on such Transmittal Date; and (ii) all other procedures set forth in the Participant Agreement are properly followed. However, if each fund's custodian does not receive the required Deposit Securities together with the associated Cash Component by 1:00 p.m. or, with respect to purchase orders composed solely of a Cash Component, the Cash Component by 10:00 a.m. on the next Business Day immediately following the Transmittal Date, such order will be deemed not in proper form and canceled. Upon written notice to Franklin Distributors, such canceled order may be resubmitted the following Business Day using a Portfolio Deposit as newly constituted to reflect the next calculated NAV of each fund. The delivery of Creation Units so purchased will occur not later than the second (2nd) Business Day following the day on which the purchase order is deemed received by Franklin Distributors.

Franklin Distributors or its agent will inform the transfer agent, the Investment Manager and each fund's custodian upon receipt of a purchase order. The custodian will then provide such information to the appropriate sub-custodian. The custodian will cause the sub-custodian to maintain an account into which the Deposit Securities (or the cash value of all or part of such securities, in the case of a cash purchase or "cash in lieu" amount) will be delivered. Deposit Securities must be delivered to an account maintained at the applicable local custodian. The trust must also receive, on or before the contractual settlement date, immediately available or same day funds estimated by the custodian to be sufficient to pay the Cash Component next determined after receipt in proper form of the purchase order, together with the purchase transaction fee described in Part I of this SAI.

Once the Trust has accepted a purchase order, the trust will confirm the issuance of a Creation Unit of a fund against receipt of payment, at such NAV as will have been calculated after receipt in proper form of such order. Franklin Distributors or its agent will then transmit a confirmation of acceptance of such order.

Creation Units will not be issued until the transfer of good title to the trust of the Deposit Securities and the payment of the Cash Component have been completed. When the sub-custodian has confirmed to the custodian that the required Deposit Securities (or the cash value thereof) have been delivered to the account of the relevant sub-custodian, Franklin Distributors and the Investment Manager will be notified of such delivery and the trust will issue and cause the delivery of the Creation Units.

Creation Units may be created in advance of receipt by each fund of all or a portion of the applicable Deposit Securities as described below. In these circumstances, the initial deposit will have a value greater than the NAV of the shares on the date the order is placed in proper form since, in addition to available Deposit Securities, cash must be deposited in an amount equal to the sum of (i) the Cash Component (including any transaction fees), plus (ii) 105% of the market value of the undelivered Deposit Securities ("Additional Cash Deposit"). The order shall be deemed to be received on the Business Day on which the order is placed provided that the order is placed in proper form prior to 3:00 p.m. Eastern Time on such date and federal funds in the appropriate amount are deposited with each fund's custodian by 10:00 a.m. Eastern Time the following Business Day. If the order is not placed in proper form by 3:00 p.m. or federal funds in the appropriate amount are not received by 10:00 a.m. the next Business Day, then the order may be deemed to be rejected and the Authorized Participant shall be liable to each fund for losses, if any, resulting therefrom. An additional amount of cash shall be required to be deposited with each fund, pending delivery of the missing Deposit Securities to the extent necessary to maintain the Additional Cash Deposit with each fund in an amount at least equal to 105% of the daily marked to market value of the missing Deposit Securities. In the sole discretion of each fund following the Business Day on which the order was received a fund may use the cash on deposit to purchase the missing Deposit Securities. Authorized Participants will be liable to each fund for the costs incurred by each fund in connection with any such purchases. These costs will be deemed to include the amount by which the actual purchase price of the Deposit Securities exceeds the market value of such Deposit Securities on the day the purchase order was deemed received by Franklin Distributors plus the brokerage and related transaction costs associated with such purchases and the Authorized Participant shall be liable to the fund for any shortfall between the cost to the fund of purchasing any missing Deposit Securities and the

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value of the collateral. Each fund will return any unused portion of the Additional Cash Deposit once all of the missing Deposit Securities have been properly received by Franklin Distributors or purchased by each fund and deposited into each fund.

#### Acceptance of Purchase Orders
Each fund and Franklin Distributors reserve the right to reject or revoke acceptance of a creation order transmitted to it in respect to the fund, if, including but not limited to, the following conditions are present(i) the order is not in proper form; (ii) the investor(s), upon obtaining the shares ordered, would own 80% or more of the currently outstanding shares of each fund; (iii) acceptance of the Deposit Securities would have certain adverse tax consequences to each fund; (iv) acceptance of the Portfolio Deposit would, in the opinion of the fund, be unlawful; or (v) in the event that circumstances outside the control of each fund, make it impossible to process creation orders for all practical purposes. Examples of such circumstances include, without limitation, acts of God; public service or utility problems such as earthquakes, fires, floods, extreme weather conditions, and power outages resulting in telephone, telecopy, and computer failures; wars; civil or military disturbances, including acts of civil or military authority or governmental actions; terrorism; sabotage; epidemics; riots; labor disputes; market conditions or activities causing trading halts; systems failures involving computer or other information systems affecting each fund, the Investment Manager, Franklin Distributors, DTC, NSCC, the transfer agent, or any other participant in the purchase process, and similar extraordinary events. Each fund and Franklin Distributors have the right to require information to determine beneficial share ownership for purposes of (ii) above should it so choose or to rely on a certification from a broker-dealer who is a member of the Financial Industry Regulatory Authority, Inc. as to the cost basis of Deposit Securities. Franklin Distributors or the fund shall notify a prospective purchaser of a Creation Unit and/or the Authorized Participant acting on the purchaser's behalf, of its rejection of the purchaser's order. Each fund, the transfer agent, and Franklin Distributors are under no duty, however, to verify or give notification of any defects or irregularities in any written order or in the delivery of a Portfolio Deposit, nor shall any of them incur any liability for the failure to give any such notification.

#### Redemption of Creation Units
Shares may be redeemed only in Creation Units at their NAV next determined after receipt of a redemption request in proper form by each fund through the transfer agent and only on a Business Day through an Authorized Participant that has entered into a Participant Agreement. Each fund generally will not redeem shares in amounts less than Creation Unit-size aggregations. Beneficial Owners must accumulate enough shares to constitute a Creation Unit in order to have such shares redeemed by each fund. There can be no assurance, however, that there will be sufficient liquidity in the public trading market at any time to permit assembly of a Creation Unit. Investors should expect to incur brokerage and other costs in connection with assembling a sufficient number of shares to constitute a redeemable Creation Unit.

The redemption proceeds for a Creation Unit may consist of a portfolio of securities (Fund Securities) – as announced by the Investment Manager, or its agent, on the Business Day of the request for redemption received in proper form – plus cash in an amount equal to the difference between the NAV of the shares being redeemed, as next determined after a receipt of the request in proper form, and the value of the Fund Securities ("Cash Redemption Amount"), less a redemption transaction fee and any variable fee as listed in Part I of this SAI. In the event that the Fund Securities have a value greater than the NAV of the shares being redeemed, a compensating cash payment to a fund equal to the differential plus the applicable redemption transaction fee is required to be made by or through an Authorized Participant by the redeeming shareholder. Notwithstanding the foregoing, each fund will substitute a cash-in-lieu amount to replace any Fund Security that is a non-deliverable instrument. The amount of the cash paid out in such cases will be equivalent to the value of the instrument listed as a Fund Security.

The right of redemption may be suspended or the date of payment postponed with respect to each fund (i) for any period during which the NYSE is closed (other than customary weekend and holiday closings); (ii) for any period during which trading on the NYSE is suspended or restricted; (iii) for any period during which an emergency exists as a result of which disposal of the shares or determination of each fund's NAV is not reasonably practicable; or (iv) in such other circumstances as is permitted by the SEC.

Orders to redeem Creation Units must be delivered through an Authorized Participant. An order to redeem Creation Units is deemed received by each fund on the Transmittal Date if (i) such order is received in proper form by the transfer agent not later than the Closing Time (or one hour prior to the Closing Time (ordinarily 3:00 p.m. Eastern Time) for nonconforming orders) on such Transmittal Date; (ii) such order is accompanied or followed by the requisite number of shares of each fund and the Cash Redemption Amount specified in such order, which delivery must be made through DTC to each fund's custodian no later than 1:00 p.m., for the shares, and 3:00 p.m., for the Cash Redemption Amount, Eastern Time on the next Business Day following

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such Transmittal Date (the "DTC Cut-Off-Time"); and (iii) all other procedures set forth in the Participant Agreement are properly followed. The requisite Fund Securities and the Cash Redemption Amount will generally be transferred by the second (2nd) Business Day following the date on which such request for redemption is deemed received, which will generally be no more than seven (7) days after such request for redemption but may be up to fifteen days for funds that invest in foreign securities. In certain cases, Authorized Participants will redeem and purchase Creation Units of each fund on the same Transmittal Date. In these instances, each fund reserves the right to settle these transactions on a net basis.

If each fund determines, based on information available to each fund when a redemption request is submitted by an Authorized Participant, that: (i) the short interest of each fund in the marketplace (*i.e.,* the number of shares of the fund that have been sold short but have not yet been covered or closed out) is greater than or equal to 100%; and (ii) the orders in the aggregate from all Authorized Participants redeeming shares on a Business Day represent 25% or more of the outstanding shares of each fund, such Authorized Participant will be required to verify to each fund the accuracy of its representations that are deemed to have been made by submitting a request for redemption. If, after receiving notice of the verification requirement, the Authorized Participant does not verify the accuracy of its representations that are deemed to have been made by submitting a request for redemption in accordance with this requirement, its redemption request will be considered not to have been received in proper form.

To the extent contemplated by an Authorized Participant's agreement, in the event the Authorized Participant has submitted a redemption request in proper form but is unable to transfer all or part of the Creation Units to be redeemed to Franklin Distributors, on behalf of each fund, at or prior to the closing time of regular trading on the listing exchange on the date such redemption request is submitted, Franklin Distributors will nonetheless accept the redemption request in reliance on the undertaking by the Authorized Participant to deliver the missing fund shares as soon as possible, which undertaking shall be secured by the Authorized Participant's delivery and maintenance of collateral consisting of cash having a value (marked to market daily) at least equal to 105% of the value of the missing fund shares. The current procedures for collateralization of missing shares require, among other things, that any cash collateral shall be in the form of U.S. dollars in immediately-available funds and shall be held by each fund and marked to market daily, and that the fees of each fund and any sub-custodians in respect of the delivery, maintenance, and redelivery of the cash collateral shall be payable by the Authorized Participant. The Participant Agreement will permit each fund to purchase the missing fund shares or acquire the Deposit Securities underlying such shares at any time and will subject the Authorized Participant to liability for any shortfall between the cost to each fund of purchasing such shares or Deposit Securities and the value of the collateral.

The calculation of the value of the Fund Securities and the Cash Redemption Amount to be delivered upon redemption will be made by the Investment Manager according to the procedures set forth in the section entitled "Determination of Net Asset Value" computed on the Business Day on which a redemption order is deemed received by the transfer agent. Therefore, if a conforming redemption order in proper form is submitted to the transfer agent by an Authorized Participant not later than Closing Time, or 3:00 p.m. Eastern Time in the case of nonconforming orders, on the Transmittal Date, and the requisite number of shares of each fund are delivered to each fund's custodian prior to the DTC Cut-Off-Time, then the value of the Fund Securities and the Cash Redemption Amount to be delivered will be determined by the Bank of New York Mellon on such Transmittal Date. If, however, a conforming redemption order is submitted to the transfer agent by an Authorized Participant not later than the Closing Time, or 3:00 p.m. Eastern Time in the case of nonconforming orders, on the Transmittal Date but either (i) the requisite number of shares of each fund and the Cash Redemption Amount are not delivered by the DTC Cut-Off-Time as described above on the next Business Day following the Transmittal Date, or (ii) the redemption order is not submitted in proper form, then the redemption order will not be deemed received as of the Transmittal Date. In such case, the value of the Fund Securities and the Cash Redemption Amount to be delivered will be computed as of the Closing Time on the Business Day that such order is deemed received by the transfer agent, i.e., the Business Day on which the shares of each fund are delivered through DTC to Franklin Distributors by the DTC Cut-Off-Time on such Business Day pursuant to a properly submitted redemption order.

A fund may in its discretion exercise its option to redeem shares in cash, and the redeeming Beneficial Owner will be required to receive its redemption proceeds in cash. In addition, an investor may request a redemption in cash that each fund may, in its sole discretion, permit. In either case, the investor will receive a cash payment equal to the NAV of its shares based on the NAV of shares of each fund next determined after the redemption request is received in proper from (minus a redemption transaction fee and additional charge for requested cash redemptions specified above, to offset each fund's brokerage and other transaction costs associated with the disposition of Fund Securities). In addition, each fund reserves the right to honor a redemption request by delivering a basket of securities or cash that differs from the Fund Securities.

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Redemption of shares for Fund Securities will be subject to compliance with applicable federal and state securities laws and each fund (whether or not it otherwise permits cash redemptions) reserves the right to redeem Creation Units for cash to the extent that each fund could not lawfully deliver specific Fund Securities upon redemptions or could not do so without first registering the Fund Securities under such laws. An Authorized Participant or a Beneficial Owner for which it is acting subject to a legal restriction with respect to a particular stock included in the Fund Securities applicable to the redemption of a Creation Unit may be paid an equivalent amount of cash. The Authorized Participant may request the redeeming Beneficial Owner of the shares to complete an order form or to enter into agreements with respect to such matters as compensating cash payment.

In connection with taking delivery of shares for Fund Securities upon redemption of Creation Units, a redeeming shareholder or entity acting on behalf of a redeeming shareholder must maintain appropriate custody arrangements with a qualified broker-dealer, bank or other custody providers in each jurisdiction in which any of the Fund Securities are customarily traded, to which account such Fund Securities will be delivered. If neither the redeeming shareholder nor the entity acting on behalf of a redeeming shareholder has appropriate arrangements to take delivery of the Fund Securities in the applicable foreign jurisdiction and it is not possible to make other such arrangements, or if it is not possible to effect deliveries of the Fund Securities in such jurisdictions, the trust may, in its discretion, exercise its option to redeem such shares in cash, and the redeeming shareholder will be required to receive its redemption proceeds in cash.

Deliveries of redemption proceeds generally will be made within two Business Days. Due to the schedule of holidays in certain countries, however, the delivery of redemption proceeds may take longer than two Business Days after the day on which the redemption request is received in proper form. In such cases, the local market settlement procedures will not commence until the end of the local holiday periods.

#### Creation/Redemption Transaction Fees
The funds generally impose a "Transaction Fee" on investors purchasing or redeeming Creation Units. The Transaction Fee will be limited to amounts that have been determined by the Investment Manager to be appropriate. The purpose of the Transaction Fee is to protect the existing shareholders of the funds from the dilutive costs associated with the purchase and redemption of Creation Units. Where a fund permits cash creations (or redemptions) or cash in lieu of depositing one or more Deposit Securities, the purchaser (or redeemer) may be assessed a higher Transaction Fee to offset the transaction cost to a fund of buying (or selling) those particular Deposit Securities. To the extent a purchase/redemption transaction consists of cash and/or in-kind securities, the standard Transaction Fee applies to in-kind purchases and redemptions of creation units and an additional Transaction Fee may also be imposed. Each fund reserves the right to not impose the additional Transaction Fee or to vary the amount of the additional Transaction Fee, depending on the materiality of the fund's actual transaction costs incurred or where the Adviser believes that not imposing or varying the additional Transaction Fee would be in the fund's interest. Transaction Fees associated with the redemption of Creation Units will not exceed 2% of the value of shares redeemed. To the extent the fund cannot recoup the amount of transaction costs incurred in connection with a redemption from the redeeming shareholder because of the 2% cap or otherwise, those transaction costs will be borne by the fund's remaining shareholders (including, potentially, increased taxable income in respect of the fund, particularly if the redemption consists solely or partially of cash) and negatively affect the fund's performance. Actual transaction costs may vary depending on the time of day an order is received or the nature of the securities. Investors bear the costs of transferring Deposit Securities or Fund Securities to/from each fund to/from their account or on their order. See "Creation/Redemption Transaction Fees" in Part I of this SAI for information on standard Transaction Fees and maximum additional Transaction Fees.

#### Additional Intermediary Payments
For purposes of this section the term "intermediary" includes any broker, dealer, bank, bank trust department, registered investment advisor, financial planner, retirement plan administrator and any other institution that offers shares of the funds to its customers.

The Investment Manager and/or its affiliates pay additional compensation to selected intermediaries under the categories described below. These categories are not mutually exclusive, and a single intermediary may receive payments under all categories. These payments may create an incentive for an intermediary firm or its representatives to recommend or offer shares of the fund or other Putnam funds to its customers. These additional payments are made pursuant to agreements with intermediaries and do not change the price paid by investors for the purchase of a share or the amount a fund will receive as proceeds from such sales or the distribution (12b-1) fees, if any, and the expenses paid by the fund as shown under the heading "Fees and Expenses" in the prospectus.

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**Marketing Support Payments.** The Investment Manager and/or its affiliates make payments to certain intermediaries for marketing support services. These payments are individually negotiated with each intermediary firm, taking into account the marketing support services provided by the intermediary, including business planning assistance, educating intermediary personnel about the Putnam funds and shareholder financial planning needs, placement on the intermediary's preferred or recommended fund company list, access to sales meetings, sales representatives and management representatives of the intermediary, market data, as well as the size of the intermediary's relationship with the Investment Manager.

No intermediaries received marketing support payments from the Investment Manager and its affiliates during the calendar year ended December 31, 2024. Intermediaries may receive marketing support payments in 2025 and in future years from the Investment Manager and/or its affiliates. You can ask your intermediary about any payments it receives from the Investment Manager and/or its affiliates.

**Program Servicing Payments.** The Investment Manager and/or its affiliates also make payments to certain intermediaries that sell shares of the Putnam funds through intermediary platforms and other investment programs to compensate intermediaries for a variety of services they provide. An intermediary may perform program services itself or may arrange with a third party to perform program services. In addition to shareholder recordkeeping, reporting, or transaction processing, program services may include services rendered in connection with intermediary platform development and maintenance, fund/investment selection and monitoring, or other similar services.

The following intermediaries (and such intermediaries' respective affiliates) received program servicing payments from the Investment Manager and its affiliates during the calendar year ended December 31, 2024:

Charles Schwab & Co., Inc.

Cetera Financial Group, Inc.

Fidelity Brokerage Services, LLC

National Financial Services LLC, and

UBS Financial Services Inc.

Additional or different intermediaries may also receive program servicing payments in 2025 and in future years from the Investment Manager and/or its affiliates. Any additions, modifications or deletions to the list of intermediaries identified above that have occurred since December 31, 2024 are not reflected. You can ask your intermediary about any payments it receives from the Investment Manager and/or its affiliates.

**Other Payments**. From time to time, the Investment Manager and/or its affiliate, at its expense, may provide additional compensation to intermediaries that sell or arrange for the sale of shares of the fund to the extent not prohibited by laws or the rules of any self-regulatory agency. Such compensation provided by the Investment Manager and/or its affiliate may include financial assistance to intermediaries that enables the Investment Manager and/or its affiliate to participate in and/or present at intermediary-sponsored conferences or seminars, sales or training programs for invited registered representatives and other intermediary employees, intermediary entertainment, and other intermediary-sponsored events, and travel expenses, including lodging incurred by registered representatives and other employees in connection with prospecting, retention and due diligence trips. The Investment Manager and/or its affiliates make payments for entertainment events it deems appropriate, subject to internal guidelines and applicable law. These payments may vary upon the nature of the event.

#### MISCELLANEOUS INVESTMENTS, INVESTMENT PRACTICES AND RISKS
As noted in the prospectus, in addition to the main investment strategies and the principal risks described in the prospectus, the fund may employ other investment practices and may be subject to other risks, which are described below. Because the following is a combined description of investment strategies of all series of Putnam ETF Trust that disclose their holdings daily, certain matters described herein may not apply to your fund. Unless a strategy or policy described below is specifically prohibited or limited by the investment restrictions discussed in the fund's prospectus or in this SAI, or by applicable law, the fund may engage in each of the practices described below without limit. This section contains information on the investments and investment practices listed below. With respect to funds for which Franklin Templeton Investment Management Limited ("FTIML"), Franklin Advisers, Putnam Management, and/or PanAgora Asset Management, Inc. ("PanAgora") serve as sub-

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adviser (as described in the fund's prospectus), references to the Investment Manager in this section include FTIML, Franklin Advisers, Putnam Management, and/or PanAgora, as appropriate.

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| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;Bank Loans, Loan Participations, and Assignments | Market Risk |
| &nbsp;&nbsp;&nbsp;Benchmark Reference Rate Risk | Master Limited Partnerships (MLPs) |
| &nbsp;&nbsp;&nbsp;Borrowing and Other Forms of Leverage | Money Market Instruments |
| &nbsp;&nbsp;&nbsp;Collateralized Debt and Loan Obligations | Mortgage-backed and Asset-backed Securities |
| &nbsp;&nbsp;&nbsp;Commodities and Commodity-Related Investments | Options on Securities |
| &nbsp;&nbsp;&nbsp;Derivatives | Preferred Stocks and Convertible Securities |
| &nbsp;&nbsp;&nbsp;ESG Considerations | Private Placements and Restricted Securities |
| &nbsp;&nbsp;&nbsp;Exchange-Traded Notes | Real Estate Investment Trusts (REITs) |
| &nbsp;&nbsp;&nbsp;Floating Rate and Variable Rate Demand Notes | Redeemable Securities |
| &nbsp;&nbsp;&nbsp;Foreign Currency Transactions | Repurchase Agreements |
| &nbsp;&nbsp;&nbsp;Foreign Investments and Related Risks | Securities of Other Investment Companies |
| &nbsp;&nbsp;&nbsp;Forward Commitments and Dollar Rolls | Short Sales |
| &nbsp;&nbsp;&nbsp;Futures Contracts and Related Options | Short-Term Trading |
| &nbsp;&nbsp;&nbsp;Hybrid Instruments | Special Purpose Acquisition Companies |
| &nbsp;&nbsp;&nbsp;Illiquid Investments | Structured Investments |
| &nbsp;&nbsp;&nbsp;Inflation-Protected Securities | Swap Agreements |
| &nbsp;&nbsp;&nbsp;Initial Public Offerings (IPOs) | Tax-exempt Securities |
| &nbsp;&nbsp;&nbsp;Inverse Floaters | Temporary Defensive Strategies |
| &nbsp;&nbsp;&nbsp;Large Shareholder Transaction Risk | Trade Policy |
| &nbsp;&nbsp;&nbsp;Legal and Regulatory Risks Relating to Investment Strategy | Warrants |
| &nbsp;&nbsp;&nbsp;Lower-rated Securities | Zero-coupon and Payment-in-kind Bonds |

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#### Bank Loans, Loan Participations, and Assignments
The fund may invest in bank loans. Bank loans are typically senior debt obligations of borrowers (issuers) and, as such, are considered to hold a senior position in the capital structure of the borrower. These may include loans that hold the most senior position, that hold an equal ranking with other senior debt, or loans that are, in the judgment of the Investment Manager, in the category of senior debt of the borrower. This capital structure position generally gives the holders of these loans a priority claim on some or all of the borrower's assets in the event of a default. Many loans are either partially or fully secured by the assets of the borrower, and some impose restrictive covenants which must be met by the borrower, although these covenants have become less common, and the terms of covenants have eroded, in recent years. Loans are typically made by a syndicate of banks, represented by an agent bank which has negotiated and structured the loan and which is responsible generally for collecting interest, principal, and other amounts from the borrower on its own behalf and on behalf of the other lending institutions in the syndicate, and for enforcing its and their other rights against the borrower. Each of the lending institutions, including the agent bank, lends to the borrower a portion of the total amount of the loan, and retains the corresponding interest in the loan.

By purchasing a loan, the fund acquires some or all of the interest of a bank or other lending institution in a loan to a particular borrower. The fund may acquire a loan interest directly by acting as a member of the original lending syndicate. The fund may also invest in a loan in other ways, including through novations, assignments and participating interests. In a novation, the fund assumes all of the rights of a lending institution in a loan, including the right to receive payments of principal and interest and other amounts directly from the borrower and to enforce its rights as a lender directly against the borrower. The fund assumes the position of a co-lender with other syndicate members. In an assignment, the fund purchases a portion of a lender's interest in a loan. In this case, the fund may be required generally to rely upon the assigning bank to demand payment and enforce its rights against the borrower, but would otherwise be entitled to all of such bank's rights in the loan. The fund may also purchase a participating interest in a portion of the rights of a lending institution in a loan. Participation interests typically result in a contractual relationship only with the lending institution, not with the borrower. In such case, the fund will be entitled to receive

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payments of principal, interest and premium, if any, but will not generally be entitled to enforce its rights directly against the agent bank or the borrower, and must rely for that purpose on the lending institution. In addition, with a participation interest, the fund generally will have no rights of set-off against the borrower, and the fund may not directly benefit from the collateral supporting the loan in which it has purchased the participation.

The fund's ability to receive payments of principal and interest and other amounts in connection with loan interests held by it will depend primarily on the financial condition of the borrower (and, in some cases, the lending institution from which it purchases the loan). Adverse changes in the creditworthiness of the borrower may affect the borrower's ability to pay principal and interest, and borrowers that are in bankruptcy or restructuring may never pay off their indebtedness, or may pay only a small fraction of the amount owed. The value of collateral, if any, securing a loan can decline, or may be insufficient to meet the borrower's obligations or difficult to liquidate. In addition, the fund's access to collateral may be limited by bankruptcy or other insolvency laws. The failure by the fund to receive scheduled interest or principal payments on a loan would adversely affect the income of the fund and would likely reduce the value of its assets, which would be reflected in a reduction in the fund's net asset value. Banks and other lending institutions generally perform a credit analysis of the borrower before originating a loan or participating in a lending syndicate. In selecting the loan interests in which the fund will invest, however, the Investment Manager will not rely solely on that credit analysis, but will perform its own investment analysis of the borrowers. The Investment Manager's analysis may include consideration of the borrower's financial strength and managerial experience, debt coverage, additional borrowing requirements or debt maturity schedules, changing financial conditions, and responsiveness to changes in business conditions and interest rates. The Investment Manager will generally not have access to non-public information to which other investors in syndicated loans may have access. Because loans in which the fund may invest are not generally rated by independent credit rating agencies, a decision by the fund to invest in a particular loan will depend almost exclusively on the Investment Manager's, and the original lending institution's, credit analysis of the borrower. Investments in loans may be of any quality, including "distressed" loans, and will be subject to the fund's credit quality policy. The loans in which the fund may invest include those that pay fixed rates of interest and those that pay floating rates – *i.e.*, rates that adjust periodically based on a known lending rate, such as a bank's prime rate.

The fund will in many cases be required to rely upon the lending institution from which it purchases the loan interest to collect and pass on to the fund such payments and to enforce the fund's rights under the loan. This may subject the fund to greater delays, expenses, and risks than if the fund could enforce its rights directly against the borrower. For example, an insolvency, bankruptcy or reorganization of the lending institution may delay or prevent the fund from receiving principal, interest and other amounts with respect to the underlying loan. When the fund is required to rely upon a lending institution to pay to the fund principal, interest and other amounts received by it, the Investment Manager will also evaluate the creditworthiness of the lending institution.

The borrower of a loan in which the fund holds an interest may, either at its own election or pursuant to terms of the loan documentation, prepay amounts of the loan from time to time. The rate of such prepayments may be affected by, among other things, general business and economic conditions, as well as the financial status of the borrower. Prepayment would cause the actual duration of a loan to be shorter than its stated maturity. There is no assurance that the fund will be able to reinvest the proceeds of any loan prepayment at the same interest rate or on the same terms as those of the original loan.

Corporate loans in which the fund may invest are generally made to finance internal growth, mergers, acquisitions, stock repurchases, leveraged buy-outs and other corporate activities. A significant portion of the corporate loan interests purchased by the fund may represent interests in loans made to finance highly leveraged corporate acquisitions, known as "leveraged buy-out" transactions, leveraged recapitalization loans and other types of acquisition financing. The highly leveraged capital structure of the borrowers in such transactions may make such loans especially vulnerable to adverse changes in economic or market conditions.

The market for bank loans may not be highly liquid. In addition, loan interests generally are subject to restrictions on transfer, and only limited opportunities may exist to sell such interests in secondary markets. As a result, the fund may be unable to sell loan interests at a time when it may otherwise be desirable to do so or may be able to sell them only at a price that is less than their fair market value. The fund may hold investments in loans for a very short period of time when opportunities to resell the investments that the Investment Manager believes are attractive arise.

Certain of the loan interests acquired by the fund may involve letters of credit, revolving credit facilities, or other standby financing commitments obligating the fund to make additional loans upon demand by the borrower pursuant to the terms specified in the loan documentation. This obligation may have the effect of requiring the fund to increase its investment in a

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borrower at a time when it would not otherwise have done so. To the extent that the fund is committed to make additional loans under the loan documentation, it will at all times set aside on its books liquid assets in an amount sufficient to meet such commitments.

Certain of the loan interests acquired by the fund may also involve loans made in foreign (*i.e*., non-U.S.) currencies. The fund's investment in such interests would involve the risks of currency fluctuations described in this SAI with respect to investments in the foreign securities.

With respect to its management of investments in bank loans, the Investment Manager will normally seek to avoid receiving material, non-public information ("Confidential Information") about the issuers of bank loans being considered for acquisition by the fund or held in the fund's portfolio. In many instances, borrowers may offer to furnish Confidential Information to prospective investors, and to holders, of the issuer's loans. The Investment Manager's decision not to receive Confidential Information may place the Investment Manager at a disadvantage relative to other investors in loans (which could have an adverse effect on the price the fund pays or receives when buying or selling loans). Also, in instances where holders of loans are asked to grant amendments, waivers or consent, the Investment Manager's ability to assess their significance or desirability may be adversely affected. For these and other reasons, it is possible that the Investment Manager's decision not to receive Confidential Information under normal circumstances could adversely affect the fund's investment performance.

Notwithstanding its intention generally not to receive material, non-public information with respect to its management of investments in loans, the Investment Manager may from time to time come into possession of material, non-public information about the issuers of loan interests that may be held in the fund's portfolio. Possession of such information may in some instances occur despite the Investment Manager's efforts to avoid such possession, but in other instances the Investment Manager may choose to receive such information (for example, in connection with participation in a creditors' committee with respect to a financially distressed issuer). As, and to the extent, required by applicable law, the Investment Manager's ability to trade in these loan interests for the account of the fund could potentially be limited by its possession of such information. Such limitations on the Investment Manager's ability to trade could have an adverse effect on the fund by, for example, preventing the fund from selling a loan interest that is experiencing a material decline in value. In some instances, these trading restrictions could continue in effect for a substantial period of time.

In some instances, other accounts managed by the Investment Manager or an affiliate may hold other securities issued by borrowers in whose loans the fund may hold an interest. These other securities may include, for example, debt securities that are subordinate to the loan interests held in the fund's portfolio, convertible debt or common or preferred equity securities. In certain circumstances, such as if the credit quality of the issuer deteriorates, the interests of holders of these other securities may conflict with the interests of the holders of the issuer's loans. In such cases, the Investment Manager may owe conflicting fiduciary duties to the fund and other client accounts. The Investment Manager will endeavor to carry out its obligations to all of its clients (including the fund) to the fullest extent possible, recognizing that in some cases certain clients may achieve a lower economic return, as a result of these conflicting client interests, than if the Investment Manager's client accounts collectively held only a single category of the issuer's securities.

The settlement period (the period between the execution of the trade and the delivery of cash to the purchaser) for some bank loan transactions may be significantly longer than the settlement period for other investments, and in some cases longer than seven days. Requirements to obtain the consent of the borrower and/or agent can delay or impede the fund's ability to sell bank loan interests and can adversely affect the price that can be obtained. It is possible that sale proceeds from bank loan transactions will not be available to meet redemption obligations, in which case the fund may be required to utilize other sources to meet the redemption obligations, such as cash balances or proceeds from the sale of its more liquid investments or investments with shorter settlement periods.

Some loan interests may not be considered "securities" for certain purposes under the federal securities laws, and, as a result, purchasers, such as the fund, may not be entitled to rely on the anti-fraud protections of the federal securities laws.

If legislation or federal or state regulators impose additional requirements or restrictions on the ability of financial institutions to make loans that are considered highly leveraged transactions, the availability of bank loans for investment by a fund may be adversely affected. In addition, such requirements or restrictions could reduce or eliminate sources of financing for certain borrowers. This would increase the risk of default. If legislation or federal or state regulators require financial institutions to dispose of bank loans that are considered highly leveraged transactions or subject such bank loans to increased regulatory

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scrutiny, financial institutions may determine to sell such bank loans. If a fund attempts to sell a bank loan at a time when a financial institution is engaging in such a sale, the price a fund could get for the bank loan may be adversely affected.

#### Benchmark Reference Rate Risk
Many debt securities, derivatives, and other financial instruments utilize benchmark or reference rates for variable interest rate calculations, including the Euro Interbank Offer Rate, Sterling Overnight Index Average Rate, and the Secured Overnight Financing Rate (each a "Reference Rate"). Instruments in which the fund invests may pay interest at floating rates based on such Reference Rates or may be subject to interest caps or floors based on such Reference Rates. The fund and issuers of instruments in which the fund invests may also obtain financing at floating rates based on such Reference Rates. The elimination of a Reference Rate or any other changes to or reforms of the determination or supervision of Reference Rates could have an adverse impact on the market for, or value of, any instruments or payments linked to those Reference Rates.

For example, some Reference Rates, as well as other types of rates and indices, are described as "benchmarks" and have been the subject of ongoing national and international regulatory reform, including under the European Union regulation on indices used as benchmarks in financial instruments and financial contracts (known as the "Benchmarks Regulation"). The Benchmarks Regulation has been enacted into United Kingdom law by virtue of the European Union (Withdrawal) Act 2018 (as amended), subject to amendments made by the Benchmarks (Amendment and Transitional Provision) (EU Exit) Regulations 2019 (SI 2019/657) and other statutory instruments. Following the implementation of these reforms, the manner of administration of benchmarks has changed and may further change in the future, with the result that relevant benchmarks may perform differently than in the past, the use of benchmarks that are not compliant with the new standards by certain supervised entities may be restricted, and certain benchmarks may be eliminated entirely. Such changes could cause increased market volatility and disruptions in liquidity for instruments that rely on or are impacted by such benchmarks. Additionally, there could be other consequences which cannot be predicted.

#### Borrowing and Other Forms of Leverage
The fund may borrow money to the extent permitted by its investment policies and restrictions and by Section 18 of the 1940 Act. When the fund borrows money, it must pay interest and other fees, which will reduce the fund's returns if such costs exceed the returns on the portfolio securities purchased or retained with such borrowings. In addition, if the fund makes additional investments while borrowings are outstanding, this may be considered a form of leverage.

Each fund has available an unsecured revolving credit facility (the "Global Credit Facility") that may be used as an additional source of liquidity to fund redemptions of shares. There can be no assurance that the Global Credit Facility will remain available to the fund generally or that any available credit under the Global Credit Facility will be available to the fund when the fund seeks to draw on the Global Credit Facility.

Leveraging tends to exaggerate the effect of any increase or decrease in the value of the fund's holding. When the fund borrows money or otherwise leverages its portfolio, the value of an investment in the fund will be more volatile and other investment risks will tend to be compounded. Leveraging also may require that the fund liquidate portfolio securities when it may not be advantageous to do so to satisfy its obligations. Leveraging may expose the fund to losses in excess of the amounts invested. Furthermore, if the fund uses leverage through purchasing derivative instruments, the fund has the risk that losses may exceed the net assets of the fund.

#### Collateralized Debt and Loan Obligations
The fund may invest in collateralized debt obligations ("CDOs"). CDOs are types of asset-backed securitized instruments and include collateralized loan obligations ("CLOs") and other similarly structured securities. Although certain CDOs may benefit from credit enhancement in the form of a senior-subordinate structure, overcollateralization or bond insurance, such enhancement may not always be present, and may fail to protect a fund against the risk of loss on default of the collateral. CDOs may charge management and administrative fees, which are in addition to those of a fund. CDOs may be less liquid than other types of securities.

The risks of an investment in a CDO largely depend on the type of underlying collateral securities and the tranche in which a fund invests. CDOs are subject to the typical risks associated with debt instruments and fixed income and/or asset-backed securities discussed elsewhere in the prospectus and in this SAI, including interest rate risk (which may be exacerbated if the

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interest rate payable on a structured financing changes based on multiples of changes in interest rates or inversely to changes in interest rates), prepayment risk, credit risk (including adverse credit spread moves), liquidity risk and market risk. CDOs carry additional risks including, but not limited to: (i) the possibility that distributions from collateral securities will not be adequate to make interest or other payments and one or more tranches may be subject to up to 100% loss of invested capital; (ii) the possibility that the quality of the collateral may decline in value or default, due to factors such as the availability of any credit enhancement, the level and timing of payments and recoveries on and the characteristics of the underlying receivables, loans, or other assets that are being securitized, remoteness of those assets from the originator or transferor, the adequacy of and ability to realize upon any related collateral, and the capability of the servicer of the securitized assets (particularly where the underlying collateral in a loan portfolio is not individually assessed prior to purchase); (iii) market and illiquidity risks affecting the price of a structured finance investment, if required to be sold, at the time of sale; and (iv) if the particular structured product is invested in a security in which a fund is also invested, this would tend to increase the fund's overall exposure to the credit of the issuer of such securities, at least on an absolute, if not on a relative basis. In addition, due to the complex nature of a CDO, an investment in a CDO may not perform as expected. An investment in a CDO also is subject to the risk that the issuer and the investors may interpret the terms of the instrument differently, giving rise to disputes.

A CLO is an obligation of a trust or other special purpose vehicle typically collateralized by a pool of loans, which may include, among others, domestic and foreign senior secured loans, senior unsecured loans, and subordinate corporate loans, including loans that may be rated below investment grade or equivalent unrated loans. CLOs may charge management and other administrative fees. Payments of principal and interest are passed through to investors in a CLO and divided into several tranches of rated debt securities, which vary in risk and yield, and typically at least one tranche of unrated subordinated securities, which may be debt or equity ("CLO Securities"). CLO Securities generally receive some variation of principal and/or interest installments and, with the exception of certain subordinated securities, bear different interest rates. If there are defaults or if a CLO's collateral otherwise underperforms, scheduled payments to senior tranches typically take priority over less senior tranches.

CLO Securities may be privately placed and thus subject to restrictions on transfer to meet securities law and other legal requirements. In the event that any fund does not satisfy certain of the applicable transfer restrictions at any time that it holds CLO Securities, it may be forced to sell the related CLO Securities and may suffer a loss on sale. CLO Securities may be considered illiquid investments in the event there is no secondary market for the CLO Securities. CLOs are also subject to the same risks associated with CDOs, as described above.

#### Commodities and Commodity-Related Investments
Some funds may gain exposure to commodity markets by investing in physical commodities or commodity-related instruments directly or indirectly. Such instruments include, but are not limited to, futures contracts, swaps, options, forward contracts, and structured notes and equities, debt securities, convertible securities, and warrants of issuers in commodity-related industries.

Commodity prices can be extremely volatile and may be directly or indirectly affected by many factors, including changes in overall market movements, real or perceived inflationary trends, commodity index volatility, changes in interest rates or currency exchange rates, population growth and changing demographics, war, and factors affecting a particular industry or commodity, such as drought, floods, or other weather conditions or natural disasters, livestock disease, trade embargoes, economic sanctions, competition from substitute products, transportation bottlenecks or shortages, insufficient storage capacity, fluctuations in supply and demand, tariffs, and international regulatory, political, and economic developments (*e.g.*, regime changes and changes in economic activity levels). In addition, some commodities are subject to limited pricing flexibility because of supply and demand factors, and others are subject to broad price fluctuations as a result of the volatility of prices for certain raw materials and the instability of supplies of other materials. Certain commodities (and related derivatives) are also susceptible to price declines due to factors such as supply surpluses caused by global events.

Actions of and changes in governments, and political and economic instability, in commodity-producing and -exporting countries may affect the production and marketing of commodities. In addition, commodity-related industries throughout the world are subject to greater political, environmental, and other governmental regulation than many other industries. Changes in government policies and the need for regulatory approvals may adversely affect the products and services of companies in the commodities industries. For example, the exploration, development, and distribution of coal, oil, and gas in the United States are subject to significant federal and state regulation, which may affect rates of return on coal, oil, and gas and the kinds of services that the federal and state governments may offer to companies in those industries. In addition, compliance with environmental and other safety regulations has caused many companies in commodity-related industries to incur production delays and

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significant costs. Government regulation also may impede the development of new technologies. The effect of future regulations affecting commodity-related industries cannot be predicted.

The value of commodity-related derivatives fluctuates based on changes in the values of the underlying commodity, commodity index, futures contract, or other economic variable to which they are related. Additionally, economic leverage will increase the volatility of these instruments as they may result in gains or losses greater than the amount invested in the instrument. See "Derivatives," "Forward Commitments and Dollar Rolls," "Futures Contracts and Related Options," "Hybrid Instruments," "Short Sales," "Structured Investments," "Swap Agreements" and "Warrants" herein for more information on the fund's investments in derivatives, including commodity-related derivatives such as swap agreements, commodity futures contracts, and options on commodity futures contracts.

#### Derivatives
Certain of the instruments in which the fund may invest, such as futures contracts, certain foreign currency transactions, options, warrants, hybrid instruments, forward contracts, swap agreements (including credit default swaps and credit default swap indexes) and structured investments, are considered to be "derivatives." Derivatives are financial instruments whose value depends upon, or is derived from, the value or other attributes of one or more underlying investments, pools of investments, indexes or currencies. Investments in derivatives may be applied toward meeting a requirement to invest in a particular kind of investment if the derivatives have economic characteristics similar to that investment.

The value of derivatives may move in unexpected ways due to unanticipated market movements, the use of leverage, imperfect correlation between the derivative instrument and the reference asset, or other factors, especially in unusual market conditions, and volatility in the value of derivatives could adversely impact the fund's returns, obligations and exposures. Derivatives may be difficult to value and may increase the fund's transactions costs. The successful use of derivatives depends on the ability to manage these sophisticated instruments. There is no assurance that the fund's use of derivative instruments will enable the fund to achieve its investment objective or that the Investment Manager will be able to predict correctly the direction of securities prices, interest rates, currency exchange rates and other economic factors.

The fund's use of derivatives may cause the fund to recognize higher amounts of short-term capital gains, which are generally taxed to individual shareholders at ordinary income tax rates, and higher amounts of ordinary income, and more generally may affect the timing, character and amount of a fund's distributions to shareholders. The fund's use of commodity-linked derivatives can be limited by the fund's intention to qualify as a "regulated investment company" under the Internal Revenue Code of 1986, as amended (the "Code") or bear adversely on the fund's ability to so qualify, as discussed in "Taxes" below.

The fund's use of certain derivatives may in some cases involve forms of financial leverage, which means they provide the fund with investment exposure greater than the value of the fund's investment in the derivatives. The use of leverage involves risk and may increase the volatility of the fund's net asset value.

In its use of derivatives, the fund may take both long positions (the values of which move in the same direction as the prices of the underlying investments, pools of investments, indexes or currencies), and short positions (the values of which move in the opposite direction from the prices of the underlying investments, pools of investments indexes or currencies). Short positions may involve greater risks than long positions, as the risk of loss may be theoretically unlimited (unlike a long position, in which the risk of loss may be limited to the amount invested). The fund may use derivatives that combine "long" and "short" positions in order to capture the difference between underlying investments, pools of investments, indexes or currencies.

Some derivative transactions are required to be centrally cleared and others are available for voluntary clearing. A party to a cleared derivative transaction is subject to the credit and counterparty risk of the clearing house and the clearing member through which it holds its cleared position. Credit risk of market participants with respect to derivatives that are centrally cleared is concentrated in a few clearing houses, and it is not clear how an insolvency proceeding of a clearing house would be conducted and what impact an insolvency of a clearing house would have on the financial system or on the fund's ability to exercise remedies. Also, the fund is subject to risk if it enters into a derivative transaction that is required to be cleared, and no clearing member is willing or able to clear the transaction on the fund's behalf.

Some derivative contracts may be privately negotiated in the over-the-counter market. These contracts also involve exposure to credit risk, since contract performance depends in part on the financial condition of the counterparty, and counterparty risk, since the counterparty may be unable or unwilling to perform its obligations under the contract for reasons unrelated to its financial

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condition, such as operational issues, business interruptions or contract disputes. If a privately negotiated over-the-counter contract calls for payments by the fund, the fund must be prepared to make the payments when due. If a counterparty's creditworthiness declines or the counterparty is otherwise unable or unwilling to perform its obligations under the contract, the fund may not receive payments owed under the contract, or the payments may be delayed and the value of the agreements with the counterparty may decline, potentially resulting in losses to the fund.

Derivatives also are subject to the risk that the fund may be delayed or prevented from recovering margin or other amounts deposited with a clearinghouse, futures commission merchant or other counterparty. If the fund has insufficient cash, it may have to sell securities to meet margin requirements at a time when it may be disadvantageous to do so.

Other risks arise from the potential inability to terminate or sell derivative positions. Derivatives may be subject to liquidity risk due to the fund's obligation to make payments of margin, collateral, or settlement payments to counterparties. A liquid secondary market may not always exist for the fund's derivative positions. In fact, certain over-the-counter instruments may be considered illiquid, and it may not be possible for the fund to liquidate a derivative position at an advantageous time or price, which may result in significant losses.

Legislation and regulation of derivatives in the U.S. and other countries, including margin, clearing, trading and reporting requirements, and leveraging and position limits, may make derivatives more costly and/or less liquid, limit the availability of certain types of derivatives, cause the fund to change its use of derivatives, or otherwise adversely affect a fund's use of derivatives.

The funds are required to comply with the derivatives rule when they engage in derivatives transactions. See "Legal and Regulatory Risks Relating to Investment Strategy" below. Further information about these instruments and the risks involved in their use is included elsewhere in the prospectus and in this SAI.

<u>Combined Positions</u> 

A fund may purchase and write options in combination with each other, or in combination with futures or forward contracts, options on futures contracts, indexed securities, swap agreements or other derivative instruments, to adjust the risk and return characteristics of its overall position. For example, a fund may purchase a put option and write a call option on the same underlying instrument, in order to construct a combined position whose risk and return characteristics are similar to selling a futures contract. Another possible combined position would involve writing a call option at one strike price and buying a call option at a lower price, in order to reduce the risk of the written call option in the event of a substantial price increase. Because combined options positions involve multiple trades, they result in higher transaction costs and may be more difficult to open and close out.

#### ESG Considerations
A fund may integrate environmental, social, or governance ("ESG") considerations into its research process and/or investment decision-making. The Investment Manager believes that ESG considerations, like other, more traditional subjects of investment analysis such as market position, growth prospects, and business strategy, have the potential to impact risk and returns. The relevance and materiality of ESG considerations in a fund's process will differ from strategy to strategy, from sector to sector, and from portfolio manager to portfolio manager, and, in some cases (such as where the Investment Manager lacks relevant ESG data), ESG considerations may not represent a material component of a fund's investment process. The consideration of ESG factors as part of a fund's investment process does not mean that a fund pursues a specific "ESG" or "sustainable" investment strategy, and, depending on the fund, the Investment Manager may sometimes make investment decisions other than on the basis of relevant ESG considerations.

#### Exchange-Traded Notes
The fund may invest in exchange-traded notes ("ETNs"). An ETN is a type of senior, unsecured, unsubordinated debt security whose returns are linked to the performance of a particular market index or other reference assets less applicable fees and expenses. ETNs are listed on an exchange and traded in the secondary market. Investors may hold the ETN until maturity, at which time the issuer is obligated to pay a return linked to the performance of the relevant market index less applicable fees and expenses. ETNs typically do not make periodic interest payments and principal typically is not protected.

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The market value of an ETN may be influenced by, among other things, time to maturity, level of supply and demand of the ETN, economic, legal, political or geographic events that affect the reference assets, volatility and lack of liquidity in the reference assets, changes in the applicable interest rates, the current performance of the market index to which the ETN is linked, and the credit rating of the ETN issuer. The market value of an ETN may differ from the performance of the applicable market index, and there may be times when an ETN trades at a premium or discount. This difference in price may be due to the fact that the supply and demand in the market for ETNs at any point in time is not always identical to the supply and demand in the market for the securities underlying the market index that the ETN seeks to track. A change in the issuer's credit rating may also impact the value of an ETN despite the underlying market index remaining unchanged.

ETNs are also subject to tax risk. No assurance can be given that the Internal Revenue Service (the "IRS") will accept, or a court will uphold, how the fund characterizes and treats ETNs for tax purposes.

An ETN that is tied to a specific market index may not be able to replicate and maintain exactly the composition and relative weighting of securities, commodities or other components in the applicable market index. ETNs also incur certain expenses not incurred by their applicable market index, and the fund would bear a proportionate share of any fees and expenses borne by the ETN in which it invests.

The fund's ability to sell its ETN holdings may be limited by the availability of a secondary market. In addition, although an ETN may be listed on an exchange, the issuer may not be required to maintain the listing, and there can be no assurance that a secondary market will exist for an ETN. Some ETNs that use leverage in an effort to amplify the returns of an underlying market index can, at times, be relatively illiquid and may therefore be difficult to purchase or sell at a fair price. Leveraged ETNs may offer the potential for greater return, but the potential for loss and speed at which losses can be realized also are greater. The extent of the fund's investment in commodity-linked ETNs, if any, is limited by tax considerations. For more information regarding the tax treatment of commodity-linked ETNs, please see "Taxes" below.

ETNs are generally similar to structured investments and hybrid instruments. For discussion of these investments and the risks generally associated with them, see "Hybrid Instruments" and "Structured Investments" in this SAI.

#### Floating Rate and Variable Rate Demand Notes
The fund may purchase taxable or tax-exempt floating rate and variable rate demand notes for short-term cash management or other investment purposes. Floating rate and variable rate demand notes are debt instruments that provide for periodic adjustments in the interest rate. The interest rate on these instruments may be reset daily, weekly or on some other reset period and may have a floor or ceiling on interest rate changes. The interest rate of a floating rate instrument may be based on a known lending rate, such as a bank's prime rate, and is reset whenever such rate is adjusted. The interest rate on a variable rate demand note is reset at specified intervals at a market rate.

Interest rate adjustments are designed to help stabilize the instrument's price or maintain a fixed spread to a predetermined benchmark. While this feature may protect against a decline in the instrument's market price when interest rates or benchmark rates rise, it lowers the fund's income when interest rates or benchmark rates fall. The fund's income from its floating rate and variable rate investments also may increase if interest rates rise. Floating rate and variable rate obligations are less effective than fixed rate instruments at locking in a particular yield. Nevertheless, such obligations may fluctuate in value in response to interest rate changes if there is a delay between changes in market interest rates and the interest reset date for the obligation, or for other reasons.

The fund's ability to receive payments of principal and interest and other amounts in connection with loans held by it will depend primarily on the financial condition of the issuer. The failure by the fund to receive scheduled interest or principal payments on a loan would adversely affect the income of the fund and would likely reduce the value of its assets, which would be reflected in a reduction in the fund's NAV.

Floating rate and variable rate demand notes and bonds may have a stated maturity in excess of one year, but may have features that permit a holder to demand payment of principal plus accrued interest upon a specified number of days' notice. Frequently, such obligations are secured by letters of credit or other credit support arrangements provided by banks. If these obligations are not secured by letters of credit or other credit support arrangements, the fund's right to demand payment will be dependent on the ability of the issuer to pay principal and interest on demand. In addition, these obligations frequently are not rated by credit rating agencies and may involve heightened risk of default by the issuer. The issuer of such obligations normally

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has a corresponding right, after a given period, to prepay in its discretion the outstanding principal of the obligation plus accrued interest upon a specific number of days notice to the holders. There is no assurance that the fund will be able to reinvest the proceeds of any prepayment at the same interest rate or on the same terms as those of the original instrument.

The absence of an active secondary market for floating rate and variable rate demand notes could make it difficult for the fund to dispose of the instruments, and the fund could suffer a loss if the issuer defaults or during periods in which the fund is not entitled to exercise its demand rights. When a reliable trading market for the floating rate and variable rate instruments held by the fund does not exist and the fund may not demand payment of the principal amount of such instruments within seven days, the instruments may be deemed illiquid and therefore subject to the fund's limitation on investments in illiquid securities.

#### Foreign Currency Transactions
The fund may engage in foreign currency exchange transactions, including purchasing and selling foreign currency, foreign currency options, foreign currency forward contracts and foreign currency futures contracts and related options. The fund may engage in these transactions for a variety of reasons, including to manage the exposure to foreign currencies inherent in the fund's investments, to increase its returns, and to offset some of the costs of hedging transactions. Foreign currency transactions involve costs, and, if unsuccessful, may reduce the fund's return.

Generally, the fund may engage in both "transaction hedging" and "position hedging" (e.g., the sale of forward currency with respect to portfolio security positions). The fund may also engage in foreign currency transactions for non-hedging purposes, subject to applicable law. When it engages in transaction hedging, the fund enters into foreign currency transactions with respect to specific receivables or payables, generally arising in connection with the fund's purchase or sale of portfolio securities. The fund will engage in transaction hedging when it desires to "lock in" the U.S. dollar price of a security it has agreed to purchase or sell, or the U.S. dollar equivalent of a dividend or interest payment in a foreign currency. By transaction hedging, the fund will attempt to protect itself against a possible loss resulting from an adverse change in the relationship between the U.S. dollar and the applicable foreign currency during the period between the date on which the security is purchased or sold, or on which the dividend or interest payment is earned, and the date on which such payments are made or received. The fund may also engage in position hedging, in which the fund enters into foreign currency transactions on a particular currency with respect to portfolio positions denominated or quoted in that currency. By position hedging, the fund attempts to protect against a decline in the value relative to the U.S. dollar of the currencies in which its portfolio securities are denominated or quoted (or an increase in the value of the currency in which securities the fund intends to buy are denominated or quoted). While such a transaction would generally offset both positive and negative currency fluctuations, such currency transactions would not offset changes in security values caused by other factors.

The fund may purchase or sell a foreign currency on a spot (*i.e.,* cash) basis at the prevailing spot rate in connection with the settlement of transactions in portfolio securities denominated in that foreign currency or for other hedging or non-hedging purposes. If conditions warrant, for hedging or non-hedging purposes, the fund may also enter into contracts to purchase or sell foreign currencies at a future date ("forward contracts") and purchase and sell foreign currency futures contracts. The fund may also purchase or sell exchange-listed and over-the-counter call and put options on foreign currency futures contracts and on foreign currencies.

A foreign currency futures contract is a standardized exchange-traded contract for the future delivery of a specified amount of a foreign currency at a price set at the time of the contract. Foreign currency futures contracts traded in the United States are designed by and traded on exchanges regulated by the Commodity Futures Trading Commission (the "CFTC"), such as the Chicago Mercantile Exchange, and have margin requirements.

A foreign currency forward contract is a negotiated agreement to exchange currency at a future time, which may be any fixed number of days from the date of the contract as agreed by the parties, at a price set at the time of the contract. The contract price may be higher or lower than the current spot rate. In the case of a cancelable forward contract, the holder has the unilateral right to cancel the contract at maturity by paying a specified fee. Forward foreign currency exchange contracts differ from foreign currency futures contracts in certain respects. For example, the maturity date of a forward contract may be any fixed number of days from the date of the contract agreed upon by the parties, rather than a predetermined date in a given month. Forward contracts may be in any amount agreed upon by the parties rather than predetermined amounts. In addition, forward contracts are traded in the interbank market conducted directly between currency traders (usually large commercial banks) and their customers, so that no intermediary is required. A forward contract generally has no deposit requirement, and no commissions are charged at any stage for trades.

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At the maturity of a forward or futures contract, the fund either may accept or make delivery of the currency specified in the contract or otherwise settle the contract, or at or prior to maturity enter into a closing transaction involving the purchase or sale of an offsetting contract. Closing transactions with respect to forward contracts are usually effected with the currency trader who is a party to the original forward contract. Closing transactions with respect to futures contracts may be effected only on a commodities exchange or board of trade which provides a market in such contracts; a clearing corporation associated with the exchange assumes responsibility for closing out such contracts.

Positions in foreign currency futures contracts and related options may be closed out only on an exchange or board of trade that provides a market in such contracts or options. Although the fund intends to purchase or sell foreign currency futures contracts and related options only on exchanges or boards of trade where there appears to be an active market, there is no assurance that a market on an exchange or board of trade will exist for any particular contract or at any particular time. In such event, it may not be possible to close a futures or related option position and, in the event of adverse price movements, the fund would continue to be required to make daily cash payments of variation margin on its futures positions.

The precise matching of the amounts of foreign currency exchange transactions and the value of the portfolio securities involved will not generally be possible since the future value of such securities in foreign currencies will change as a consequence of market movements in the value of those securities between the dates the currency exchange transactions are entered into and the dates they mature. It is also impossible to forecast with precision the market value of portfolio securities at the expiration or maturity of a forward or futures contract. Accordingly, it may be necessary for the fund to purchase additional foreign currency on the spot market (and bear the expense of such purchase) if the market value of the security or securities being hedged is less than the amount of foreign currency the fund is obligated to deliver and a decision is made to sell the security or securities and make delivery of the foreign currency. Conversely, it may be necessary to sell on the spot market some of the foreign currency received upon the sale of the portfolio security or securities if the market value of such security or securities exceeds the amount of foreign currency the fund is obligated to deliver.

As noted above, the fund may purchase or sell exchange-listed and over-the-counter call and put options on foreign currency futures contracts and on foreign currencies. A put option on a futures contract gives the fund the right to assume a short position in the futures contract until or at the expiration of the option. A put option on a currency gives the fund the right to sell the currency at an exercise price until or at the expiration of the option. A call option on a futures contract gives the fund the right to assume a long position in the futures contract until or at the expiration of the option. A call option on a currency gives the fund the right to purchase the currency at the exercise price until or at the expiration of the option.

Options on foreign currencies operate similarly to options on securities, and are traded primarily in the over-the-counter market, although options on foreign currencies are also listed on several exchanges. Options are traded not only on the currencies of individual nations, but also on the euro, the joint currency of most countries in the European Union.

The fund will only purchase or write foreign currency options when the Investment Manager believes that a liquid secondary market exists for such options. There can be no assurance that a liquid secondary market will exist for a particular option at any specific time. Options on foreign currencies may be affected by all of those factors which influence foreign exchange rates and investments generally.

The fund's currency hedging transactions may call for the delivery of one foreign currency in exchange for another foreign currency and may at times not involve currencies in which its portfolio securities are then denominated. The Investment Manager will engage in such "cross hedging" activities when it believes that such transactions provide significant hedging opportunities for the fund. Cross hedging transactions by the fund involve the risk of imperfect correlation between changes in the values of the currencies to which such transactions relate and changes in the value of the currency or other asset or liability which is the subject of the hedge.

Transaction and position hedging do not eliminate fluctuations in the underlying prices of the securities that the fund owns or intends to purchase or sell. They simply establish a rate of exchange which one can achieve at some future point in time. Additionally, although these techniques tend to minimize the risk of loss due to a decline in the value of the hedged currency, they involve costs to the fund and tend to limit any potential gain which might result from the increase in value of such currency.

The fund may also engage in non-hedging currency transactions. For example, the Investment Manager may believe that exposure to a currency is in the fund's best interest but that securities denominated in that currency are unattractive. In this situation, the fund may purchase a currency forward contract or option in order to increase its exposure to the currency.

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In addition, the fund may seek to increase its current return or to offset some of the costs of hedging against fluctuations in current exchange rates by writing covered call options and covered put options on foreign currencies. The fund receives a premium from writing a call or put option, which increases the fund's current return if the option expires unexercised or is closed out at a net profit. The fund may terminate an option that it has written prior to its expiration by entering into a closing purchase transaction in which it purchases an option having the same terms as the option written.

The value of any currency, including U.S. dollars and foreign currencies, may be affected by complex political and economic factors applicable to the issuing country. In addition, the exchange rates of foreign currencies (and therefore the values of foreign currency options, forward contracts and futures contracts and related options) may be affected significantly, fixed, or supported directly or indirectly by U.S. and foreign government actions. Government intervention may increase risks involved in purchasing or selling foreign currency options, forward contracts and futures contracts and related options, since exchange rates may not be free to fluctuate in response to other market forces. The value of a foreign currency option, forward contract or futures contract or related option reflects the value of an exchange rate, which in turn reflects relative values of two currencies — the U.S. dollar and the foreign currency in question. Although foreign exchange dealers do not charge a fee for currency conversion, they do realize a profit based on the difference (the "spread") between prices at which they are buying and selling various currencies. Thus, a dealer may offer to sell a foreign currency to the fund at one rate, while offering a lesser rate of exchange should the fund desire to resell that currency to the dealer. Because foreign currency transactions occurring in the interbank market involve substantially larger amounts than those that may be involved in the exercise of foreign currency options, forward contracts and futures contracts, the fund may be disadvantaged by having to deal in an odd-lot market for the underlying foreign currencies in connection with options at prices that are less favorable than for round lots. Foreign governmental restrictions or taxes could result in adverse changes in the cost of acquiring or disposing of foreign currencies.

There is no systematic reporting of last sale information for foreign currencies and there is no regulatory requirement that quotations available through dealers or other market sources be firm or revised on a timely basis. Available quotation information is generally representative of very large round-lot transactions in the interbank market and thus may not reflect exchange rates for smaller odd-lot transactions (less than $1 million) where rates may be less favorable. The interbank market in foreign currencies is a global, around-the-clock market. To the extent that options markets are closed while the markets for the underlying currencies remain open, significant price and rate movements may take place in the underlying markets that cannot be reflected in the options markets.

Numerous regulatory changes related to foreign currency transactions are expected to occur over time and could materially and adversely affect the ability of the fund to enter into foreign currency transactions or could increase the cost of foreign currency transactions. In the future, additional foreign currency transactions may be required to be subject to initial as well as variation margin requirements. Foreign currency transactions that are not centrally cleared are subject to the creditworthiness of the counterparty to the foreign currency transaction (usually large commercial banks), and their values may decline substantially if the counterparty's creditworthiness deteriorates. In a cleared foreign currency transaction, performance of the transaction will be effected by a central clearinghouse rather than by the original counterparty to the transaction. Foreign currency transactions that are centrally cleared will be subject to the creditworthiness of the clearing member and the clearing organization involved in the transaction.

The decision as to whether and to what extent the fund will engage in foreign currency exchange transactions will depend on a number of factors, including prevailing market conditions, the composition of the fund's portfolio and the availability of suitable transactions. There can be no assurance that suitable foreign currency transactions will be available for the fund at any time or that the fund will engage in foreign currency exchange transactions at any time or under any circumstances even if suitable transactions are available to it.

Successful use of currency management strategies will depend on the Investment Manager's skill in analyzing currency values. Currency management strategies may increase the volatility of the fund's returns and could result in significant losses to the fund if currencies do not perform as the Investment Manager anticipates. There is no assurance that the Investment Manager's use of currency management strategies will be advantageous to the fund or that it will hedge at appropriate times.

#### Foreign Investments and Related Risks
Foreign securities are normally denominated and traded in foreign currencies. As a result, the value of the fund's foreign investments and the value of its shares may be affected favorably or unfavorably by changes in currency exchange rates relative to the U.S. dollar. In addition, the fund is required to compute and distribute its income in U.S. dollars. Therefore, if the exchange

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rate for a foreign currency declines after a fund's income has been earned and translated into U.S. dollars (but before payment), the fund could be required to liquidate portfolio securities to make such distributions. Similarly, if an exchange rate declines between the time a fund incurs expenses in U.S. dollars and the time such expenses are paid, the amount of such currency required to be converted into U.S. dollars in order to pay such expenses in U.S. dollars will be greater than the equivalent amount in any such currency of such expenses at the time they were incurred.

There may be less information publicly available about a foreign issuer than about a U.S. issuer, and foreign issuers may not be subject to accounting, auditing, custody, disclosure and financial reporting standards and practices comparable to those in the United States. In addition, there may be less (or less effective) regulation of exchanges, brokers and listed companies in some foreign countries. The securities of some foreign issuers are less liquid and at times more volatile than securities of comparable U.S. issuers. Foreign brokerage commissions, custodial expenses and other fees are also generally higher than in the United States.

Foreign settlement procedures and trade regulations may be more complex and involve certain risks (such as delay in payment or delivery of securities or in the recovery of the fund's assets held abroad) and expenses not present in the settlement of investments in U.S. markets. For example, settlement of transactions involving foreign securities or foreign currencies (see below) may occur within a foreign country, and the fund may accept or make delivery of the underlying securities or currency in conformity with any applicable U.S. or foreign restrictions or regulations, and may pay fees, taxes or charges associated with such delivery. In addition, local market holidays or other factors may extend the time for settlement of purchases and sales of the fund's investments in securities that trade on foreign markets. Such investments may also involve the risk that an entity involved in the settlement may not meet its obligations. Extended settlement cycles or other delays in settlement may increase the fund's liquidity risk and require the fund to employ alternative methods (*e.g.*, through borrowings) to satisfy redemption requests during periods of large redemption activity in fund shares.

In addition, foreign securities may be subject to the risk of nationalization or expropriation of assets, imposition of economic sanctions or embargoes (whether imposed by the United States or another country or other governmental or non-governmental organization), currency exchange controls, foreign withholding or other taxes or restrictions on the repatriation of foreign currency, confiscatory taxation, political, social or financial instability and diplomatic developments which could affect the value of the fund's investments in certain foreign countries. Such actions could result in the devaluation of a country's currency or a decline in the value and liquidity of securities of issuers in that country. In some cases (including in the case of sanctions), such actions also could result in a freeze on an issuer's securities which would prevent the fund from selling securities it holds. Governments of many countries have exercised and continue to exercise substantial influence over many aspects of the private sector through the ownership or control of many companies, including some of the largest in these countries. As a result, government actions in the future could have a significant effect on economic conditions which may adversely affect prices of certain portfolio securities. There is also generally less government supervision and regulation of stock exchanges, brokers, and listed companies than in the United States. Moreover, foreign economies may differ favorably or unfavorably from the U.S. economy in such respects as growth of gross national product, rate of inflation, capital reinvestment, resource self-sufficiency and balance of payments position. Dividends or interest on, or proceeds from the sale of, foreign securities may be subject to foreign withholding or other taxes, and special U.S. tax considerations may apply.

*Note on MSCI indices.* Due to the potential for foreign withholding taxes, MSCI, Inc. (MSCI) publishes two versions of its indices reflecting the reinvestment of dividends using two different methodologies: gross dividends and net dividends. While both versions reflect reinvested dividends, they differ with respect to the manner in which taxes associated with dividend payments are treated. In calculating the net dividends version, MSCI incorporates reinvested dividends applying the withholding tax rate applicable to foreign non-resident institutional investors that do not benefit from double taxation treaties. The Investment Manager believes that the net dividends version of MSCI indices better reflects the returns U.S. investors might expect were they to invest directly in the component securities of an MSCI index.

Many foreign countries are heavily dependent upon exports, particularly to developed countries, and, accordingly, have been and may continue to be adversely affected by trade barriers, managed adjustments in relative currency values, and other protectionist measures imposed or negotiated by the United States and other countries with which they trade. These economies also have been and may continue to be negatively impacted by economic conditions in the United States and other trading partners, which can lower the demand for goods produced in those countries.

Legal remedies available to investors in certain foreign countries may be more limited than those available with respect to investments in the United States or in other foreign countries. The laws of some foreign countries may limit the fund's ability to

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invest in securities of certain issuers organized under the laws of those foreign countries. These restrictions may take the form of prior governmental approval requirements, limits on the amount or type of securities held by foreigners and limits on the types of companies in which foreigners may invest (*e.g.*, limits on investment in certain industries). Some countries also limit the investment of foreign persons to only a specific class of securities of an issuer that may have less advantageous terms or rights or preferences than securities of the issuer available for purchase by domestic parties (and such securities may be less liquid than other classes of securities of an issuer), or may directly limit foreign investors' rights (such as voting rights). Although securities subject to such restrictions may be marketable abroad, they may be less liquid than foreign securities of the same class that are not subject to such restrictions. Foreign laws may also impact the availability of derivatives or hedging techniques relating to a foreign country's government securities. In each of these situations, the funds' ability to invest significantly in desired issuers, or the terms of such investments, could be negatively impacted as a result of the relevant legal restriction. Sanctions imposed by the United States government on other countries or persons or issuers operating in such countries could restrict the fund's ability to buy affected securities or to sell any affected securities it has previously purchased, which may subject the fund to greater risk of loss in those securities. Foreign countries may have reporting requirements with respect to the ownership of securities, and those reporting requirements may be subject to interpretation or change without prior notice to investors. No assurance can be given that the fund will satisfy applicable foreign reporting requirements at all times.

For purposes of some foreign holding limits or disclosure thresholds, all positions owned or controlled by the same person or entity, even if in different accounts, may be aggregated for purposes of determining whether the applicable limits or thresholds have been exceeded. Thus, even if the fund does not intend to exceed applicable limits, it is possible that different clients managed by the Investment Manager and its affiliates may be aggregated for this purpose. These limits may adversely affect the fund's ability to invest in the applicable security.

The risks described above, including the risks of nationalization or expropriation of assets, typically are increased in connection with investments in developing countries, also known as "emerging markets." For example, political and economic structures in these countries may be in their infancy and developing rapidly, and such countries may lack the social, political and economic stability characteristic of more developed countries. In such a dynamic environment, there can be no assurance that any or all of these capital markets will present viable investment opportunities for the fund. Certain of these countries have in the past failed to recognize private property rights and have at times nationalized and expropriated the assets of private companies. In such an event, it is possible that the fund could lose the entire value of its investments in the affected market. High rates of inflation or currency devaluations may adversely affect the economies and securities markets of such countries. In addition, the economies of certain developing or emerging market countries may be dependent on a single industry or limited group of industries, which may increase the risks described above and make those countries particularly vulnerable to global economic and market changes. Investments in emerging markets may be considered speculative.

The currencies of certain emerging market countries have experienced devaluations relative to the U.S. dollar, and future devaluations may adversely affect the value of assets denominated in such currencies. Many emerging market countries have experienced substantial, and in some periods extremely high, rates of inflation for many years, and future inflation may adversely affect the economies and securities markets of such countries. When debt and similar obligations issued by foreign issuers are denominated in a currency (*e.g.*, the U.S. dollar or the Euro) other than the local currency of the issuer, the subsequent strengthening of the non-local currency against the local currency will generally increase the burden of repayment on the issuer and may increase significantly the risk of default by the issuer.

In addition, unanticipated political or social developments may affect the value of investments in emerging markets and the availability of additional investments in these markets. The small size, limited trading volume and relative inexperience of the securities markets in these countries may make investments in securities traded in emerging markets illiquid and more volatile than investments in securities traded in more developed countries, and the fund may be required to establish special custodial or other arrangements before making investments in securities traded in emerging markets. There may be little financial or accounting information available with respect to issuers of emerging market securities, and it may be difficult as a result to assess the value or prospects of an investment in such securities. In certain countries with emerging capital markets, reporting standards vary widely. As a result, traditional investment measurements used in the United States, such as price/earnings ratios, may not be applicable.

Practices in relation to settlement of securities transactions in emerging markets involve higher risks than those in developed markets, in part because the fund may need to use brokers and counterparties that are less well capitalized, and custody and registration of assets in some countries may be unreliable. The possibility of fraud, negligence, undue influence being exerted by the issuer, or refusal to recognize ownership exists in some emerging markets, and, along with other factors, could result in

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ownership registration being completely lost. The fund would absorb any loss resulting from such registration problems and may have no successful claim for compensation.

American Depositary Receipts ("ADRs") as well as other "hybrid" forms of ADRs, including European Depositary Receipts ("EDRs") and Global Depositary Receipts ("GDRs"), are certificates evidencing ownership of shares of a foreign issuer. These certificates are issued by depository banks and generally trade on an established market in the United States or elsewhere. The underlying shares are held in trust by a custodian bank or similar financial institution in the issuer's home country. The depository bank may not have physical custody of the underlying securities at all times and may charge fees for various services, including forwarding dividends and interest and corporate actions. ADRs are alternatives to directly purchasing the underlying foreign securities in their national markets and currencies. However, ADRs continue to be subject to many of the risks associated with investing in foreign securities.

Certain of the foregoing risks may also apply to some extent to securities of U.S. issuers that are denominated in foreign currencies or that are traded in foreign markets, or securities of U.S. issuers having significant foreign operations or other exposure to foreign markets. If the fund invests in securities issued by foreign issuers, the fund may be subject to the risks described above even if all of the fund's investments are denominated in U.S. dollars, especially with respect to issuers whose revenues are principally earned in a foreign currency but whose debt obligations have been issued in U.S. dollars or other hard currencies.

**Investing through Stock Connect.** The fund may, directly or indirectly (through, for example, participation notes or other types of equity-linked notes), purchase shares in mainland China-based companies that trade on Chinese stock exchanges such as the Shanghai Stock Exchange and the Shenzhen Stock Exchange ("China A-Shares") through the Shanghai-Hong Kong Stock Connect ("Stock Connect"), or that may be available in the future through additional stock connect programs, a mutual market access program designed to, among other things, enable foreign investment in the People's Republic of China ("PRC") via brokers in Hong Kong.

There are significant risks inherent in investing in China A-Shares through Stock Connect. The underdeveloped state of PRC's investment and banking systems subjects the settlement, clearing, and registration of China A-Shares transactions to heightened risks. Stock Connect can only operate when both PRC and Hong Kong markets are open for trading and when banking services are available in both markets on the corresponding settlement days. As such, if either or both markets are closed on a U.S. trading day, the fund may not be able to dispose of its China A-Shares in a timely manner, which could adversely affect the fund's performance. Because Stock Connect is relatively new, its effects on the market for trading China A-shares are uncertain. In addition, the trading, settlement and information technology ("IT") systems required to operate Stock Connect are relatively new and continuing to evolve. In the event that the relevant systems do not function properly, trading through Stock Connect could be disrupted.

PRC regulations require that, in order to sell its China A-Shares, the fund must pre-deliver the China A-Shares to a broker. If the China A-Shares are not in the broker's possession before the market opens on the day of sale, the sell order will be rejected. This requirement could also limit the fund's ability to dispose of its China A-Shares purchased through Stock Connect in a timely manner. Additionally, Stock Connect is subject to daily quota limitations on purchases of China A Shares. Once the daily quota is reached, orders to purchase additional China A-Shares through Stock Connect will be rejected. The fund's investment in China A-Shares may only be traded through Stock Connect and is not otherwise transferable. Stock Connect utilizes an omnibus clearing structure, and the fund's shares will be registered in its custodian's name on the Central Clearing and Settlement System. This may limit the ability of the Investment Manager to effectively manage the fund, and may expose the fund to the credit risk of its custodian or to greater risk of expropriation. Investment in China A-Shares through Stock Connect may be available only through a single broker that is an affiliate of the fund's custodian, which may affect the quality of execution provided by such broker. Stock Connect restrictions could also limit the ability of the fund to sell its China A-Shares in a timely manner, or to sell them at all. Further, different fees, costs and taxes are imposed on foreign investors acquiring China A-Shares acquired through Stock Connect, and these fees, costs and taxes may be higher than comparable fees, costs and taxes imposed on owners of other securities providing similar investment exposure.

Stock Connect trades are settled in Renminbi ("RMB"), the official currency of PRC, and investors must have timely access to a reliable supply of RMB in Hong Kong, which cannot be guaranteed.

**Investing through Bond Connect:** Chinese debt instruments trade on the China Interbank Bond Market ("CIBM") and may be purchased through a market access program that is designed to, among other things, enable foreign investment in the PRC

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("Bond Connect"). There are significant risks inherent in investing in Chinese debt instruments, similar to the risks of investing in other fixed-income securities in emerging markets. The prices of debt instruments traded on the CIBM may fluctuate significantly due to low trading volume and potential lack of liquidity. The rules to access debt instruments that trade on the CIBM through Bond Connect are relatively new and subject to change, which may adversely affect the fund's ability to invest in these instruments and to enforce its rights as a beneficial owner of these instruments. Trading through Bond Connect is subject to a number of restrictions that may affect the fund's investments and returns. In addition, securities offered through Bond Connect may lose their eligibility for trading through the program at any time. If Bond Connect securities lose their eligibility for trading through the program, they may be sold but can no longer be purchased through Bond Connect. There can be no assurance as to the program's continued existence or whether future developments regarding the program may restrict or adversely affect the fund's investments or returns.

Investments made through Bond Connect are subject to order, clearance and settlement procedures that are relatively untested in China, which could pose risks to the fund. CIBM does not support all trading strategies (such as short selling) and investments in Chinese debt instruments that trade on the CIBM are subject to the risks of suspension of trading without cause or notice, trade failure or trade rejection and default of securities depositories and counterparties. Furthermore, Chinese debt instruments purchased via Bond Connect will be held via a book entry omnibus account in the name of the Hong Kong Monetary Authority Central Money Markets Unit ("CMU") maintained with a China-based depository (either the China Central Depository & Clearing Co. ("CDCC") or the Shanghai Clearing House ("SCH")). The fund's ownership interest in these Chinese debt instruments will not be reflected directly in book entry with CDCC or SCH and will instead only be reflected on the books of the fund's Hong Kong sub-custodian. Therefore, the fund's ability to enforce its rights as a bondholder may depend on CMU's ability or willingness as record-holder of the bonds to enforce the fund's rights as a bondholder. Additionally, the omnibus manner in which Chinese debt instruments are held could expose the fund to the credit risk of the relevant securities depositories and the fund's Hong Kong sub-custodian. While the fund holds a beneficial interest in the instruments it acquires through Bond Connect, the mechanisms that beneficial owners may use to enforce their rights are untested. In addition, courts in China have limited experience in applying the concept of beneficial ownership. Moreover, Chinese debt instruments acquired through Bond Connect generally may not be sold, purchased or otherwise transferred other than through Bond Connect in accordance with applicable rules.

The fund's investments in Chinese debt instruments acquired through Bond Connect are generally subject to a number of regulations and restrictions, including Chinese securities regulations and listing rules, loss recovery limitations and disclosure of interest reporting obligations. The fund will not benefit from access to Hong Kong investor compensation funds, which are set up to protect against defaults of trades, when investing through Bond Connect.

Bond Connect can only operate when both China and Hong Kong markets are open for trading and when banking services are available in both markets on the corresponding settlement days. In addition, the trading, settlement and IT systems required for non-Chinese investors in Bond Connect are relatively new. In the event of systems malfunctions or extreme market conditions, trading via Bond Connect could be disrupted. The rules applicable to taxation of Chinese debt instruments acquired through Bond Connect remain subject to further clarification. Uncertainties in the Chinese tax rules governing taxation of income and gains from investments via Bond Connect could result in unexpected tax liabilities for the fund, which may negatively affect investment returns for shareholder.

Bond Connect trades are settled in RMB, and investors must have timely access to a reliable supply of RMB in Hong Kong, which cannot be guaranteed.

#### Forward Commitments and Dollar Rolls
The fund may enter into contracts to purchase securities for a fixed price at a future date beyond customary settlement time ("forward commitments"). In the case of to-be-announced ("TBA") purchase commitments, the unit price and the estimated principal amount are established when the fund enters into a contract, with the actual principal amount being within a specified range of the estimate. Forward commitments may be considered securities in themselves, and involve a risk of loss if the value of the security to be purchased declines prior to the settlement date, which risk is in addition to the risk of decline in the value of the fund's other assets. Where such purchases are made through dealers, the fund relies on the dealer to consummate the sale. The dealer's failure to do so may result in the loss to the fund of an advantageous yield or price. Although the fund will generally enter into forward commitments with the intention of acquiring securities for its portfolio or for delivery pursuant to options contracts it has entered into, the fund may dispose of a commitment prior to settlement if the Investment Manager deems it appropriate to do so. The fund may realize short-term profits or losses upon the sale of forward commitments.

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The fund may enter into TBA sale commitments to hedge its portfolio positions, to sell securities it owns under delayed delivery arrangements, or to take a short position in mortgage-backed securities. Proceeds of TBA sale commitments are not received until the contractual settlement date. If the TBA sale commitment is closed through the acquisition of an offsetting purchase commitment, the fund realizes a gain or loss on the commitment without regard to any unrealized gain or loss on the underlying security. If the fund delivers securities under the commitment, the fund realizes a gain or loss from the sale of the securities based upon the unit price established at the date the commitment was entered into.

The fund may enter into dollar roll transactions (generally using TBAs) in which it sells a fixed income security for delivery in the current month and simultaneously contracts to purchase similar securities (for example, same type, coupon and maturity) at an agreed upon future time. By engaging in a dollar roll transaction, the fund foregoes principal and interest paid on the security that is sold while the dollar roll is outstanding, but receives the difference between the current sales price and the forward price for the future purchase. In addition, the fund may reinvest the cash proceeds of the sale while the dollar roll is outstanding in an effort to enhance returns. The reinvestment of such proceeds may be considered a form of investment leverage and may increase the fund's risk and volatility. If the income and capital gains from the investment of the cash from the initial sale do not exceed the income, capital appreciation and gain or loss that would have been realized on the securities sold as part of the dollar roll, the use of this technique will result in a lower return than would have been realized without the use of the dollar rolls. The fund accounts for dollar rolls as purchases and sales.

Purchases of securities on a forward commitment basis may involve more risk than other types of purchases. The obligation to purchase securities on a specified future date involves the risk that the market value of the securities that the fund is obligated to purchase may decline below the purchase price. In addition, when entering into a forward commitment transaction, the fund will rely on the other party to consummate the transaction. In the event that the other party files for bankruptcy, becomes insolvent or defaults on its obligation, the fund may be adversely affected. For example, the other party's failure to complete the transaction may result in the loss to the fund of an advantageous yield or price. See also "Legal and Regulatory Risks Relating to Investment Strategy" below.

#### Futures Contracts and Related Options
Subject to applicable law, the fund may invest in futures contracts and related options for hedging and non-hedging purposes, such as to manage the effective duration of the fund's portfolio or as a substitute for direct investment. A futures contract sale creates an obligation by the seller to sell the type of financial instrument or other asset called for in the contract in a specified month for a stated price. A futures contract purchase creates an obligation by the purchaser to buy the type of financial instrument or other asset called for in the contract in a specified month at a stated price. The specific assets bought or sold, respectively, at settlement date may not be determined until on or near that date. The determination is made in accordance with the rules of the exchange on which the futures contract sale or purchase was made. Futures contracts are traded in the United States only on commodity exchanges or boards of trade -- known as "contract markets" -- approved for such trading by the CFTC, and must be executed through a futures commission merchant (brokerage firm) which is a member of the relevant contract market. Examples of futures contracts that the fund may use include, without limitation, U.S. Treasury futures, index futures, corporate or municipal bond futures, U.S. Government agency futures, interest rate futures, commodities futures, futures contracts on sovereign debt, and Eurodollar futures. In addition, as described elsewhere in this SAI, the fund may use foreign currency futures.

The value of a futures contract tends to increase and decrease in tandem with the value of its underlying asset. Therefore, purchasing futures contracts will tend to increase the fund's exposure to positive and negative price fluctuations in the underlying asset, much as if it had purchased the underlying asset directly. When the fund sells a futures contract, by contrast, the value of its futures position will tend to move in a direction contrary to the market for the underlying asset. Selling futures contracts, therefore, will tend to offset both positive and negative market price changes, much as if the underlying asset had been sold.

When the fund enters into a futures contract, the fund is required to deliver to the futures broker an amount of liquid assets known as "initial margin." The nature of initial margin in futures transactions is different from that of margin in security transactions in that futures contract margin does not involve the borrowing of funds to finance the transactions. Rather, initial margin is similar to a performance bond or good faith deposit in that it is returned to the fund upon termination of the futures contract, assuming all contractual obligations have been satisfied. Initial margin requirements are established by the exchanges on which futures contracts trade and by the fund's broker and may, from time to time, change. Futures contracts also involve brokerage costs. Subsequent payments, called "variation margin" or "maintenance margin," to and from the broker are made on a daily basis as the value of the futures contract fluctuates, a process known as "marking to the market." For example, if the fund

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purchases a futures contract on an underlying security and the price of that security rises, the value of the futures contract will increase and the fund will receive from the broker a variation margin payment based on that increase in value. Conversely, if the price of the underlying security declines, the value of the futures contract will decrease and the fund will be required to make a variation margin payment to the broker based on that decrease in value. Upon the closing of a futures contract, the fund will receive or be required to pay additional cash based on a final determinations of variation margin.

Although futures contracts by their terms may call for actual delivery or acceptance of commodities or securities, in most cases the contracts are closed out before the settlement date without the making or taking of delivery. Many futures contracts, such as index futures and futures based on the volatility or variance experienced by an index do not call for actual delivery or acceptance of commodities or securities, but instead require cash settlement of the futures contract on the settlement date specified in the contract. Such contracts may also be closed out before the settlement date. The fund may close some or all of its futures positions at any time prior to their expiration. Closing out a futures contract sale is effected by purchasing a futures contract for the same aggregate amount of the specific type of financial instrument or commodity with the same settlement date. If the price of the initial sale of the futures contract exceeds the price of the offsetting purchase, the seller is paid the difference and realizes a gain. Conversely, if the price of the offsetting purchase exceeds the price of the initial sale, the seller realizes a loss. If the fund is unable to enter into a closing transaction, the amount of the fund's theoretical loss is unlimited. The closing out of a futures contract purchase is effected by the purchaser's entering into a futures contract sale. If the offsetting sale price exceeds the purchase price, the purchaser realizes a gain, and if the purchase price exceeds the offsetting sale price, he realizes a loss. Such closing transactions involve additional commission costs.

A portion of any capital gains from futures contracts in which the fund invests directly will be treated for federal income tax purposes as short-term capital gains that, when distributed to taxable shareholders, will be taxable as ordinary income. The fund's investments in futures may cause the fund to recognize income without receiving cash with which to make the distributions necessary to qualify and be eligible for treatment as a regulated investment company and avoid a fund-level tax. The fund may therefore need to liquidate other investments, including when it is not advantageous to do so, to meet its distribution requirement.

With respect to each fund, the Investment Manager has claimed an exclusion from the definition of the term "commodity pool operator" under the Commodity Exchange Act ("CEA") pursuant to Rule 4.5 under the CEA (the "exclusion") promulgated by the CFTC. Accordingly, the Investment Manager (with respect to these funds) is not subject to registration or regulation as a "commodity pool operator" under the CEA. To remain eligible for the exclusion, each of these funds will be limited in its ability to use certain financial instruments regulated under the CEA ("commodity interests"), including futures, options on futures and certain swaps. In the event that the Investment Manager believes that a fund's investments in commodity interests exceed the thresholds set forth in the exclusion, the Investment Manager may be required to register as a "commodity pool operator" with the CFTC with respect to that fund. The Investment Manager's eligibility to claim the exclusion with respect to a fund will be based upon, among other things, the level and scope of the fund's investment in commodity interests, the purposes of such investments and the manner in which the fund holds out its use of commodity interests. A fund's ability to invest in commodity interests is limited by the Investment Manager's intention to operate the fund in a manner that would permit the Investment Manager to continue to claim the exclusion under Rule 4.5, which may adversely affect the fund's total return. In the event the fund's investments in commodity interests require the Investment Manager to register with the CFTC as a commodity pool operator with respect to a fund, the fund's expenses may increase, adversely affecting that fund's total return, and the commodity pool operators ("CPOs") of any shareholders that are pooled investment vehicles may be unable to rely on certain CPO registration exemptions.

**Index futures**. An index futures contract is a contract to buy or sell units of an index at a specified future date at a price agreed upon when the contract is made. Entering into a contract to buy units of an index is commonly referred to as buying or purchasing a contract or holding a long position in the index. Entering into a contract to sell units of an index is commonly referred to as selling a contract or holding a short position. A unit is the current value of the index. The fund may enter into stock index futures contracts, debt index futures contracts, or other index futures contracts appropriate to its objective(s). The fund may also purchase and sell options on index futures contracts.

For example, the Standard & Poor's 500 Composite Stock Price Index ("S&P 500") is composed of 500 selected U.S. common stocks. The S&P 500 assigns relative weightings to the common stocks that comprise the index, and the value of the index fluctuates with changes in the market values of those common stocks. The stock index futures contract specifies that no delivery of the actual stocks making up the index will take place. Instead, settlement in cash must occur upon the termination of the contract, with the settlement being the difference between the contract price and the actual level of the stock index at the expiration of the contract. For example, if the fund enters into a futures contract to buy 250 units of the S&P 500 at a specified

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future date at a contract price of $150 and the S&P 500 is at $154 on that future date, the fund will gain $1,000 (250 units x gain of $4). If the fund enters into a futures contract to sell 250 units of the stock index at a specified future date at a contract price of $150 and the S&P 500 is at $152 on that future date, the fund will lose $500 (250 units x loss of $2).

**Options on futures contracts.** The fund may purchase and write call and put options on futures contracts it may buy or sell and enter into closing transactions with respect to such options to terminate existing positions. Options on futures contracts possess many of the same characteristics as options on securities and indices. An option on a futures contract gives the holder the right, in return for the premium paid to assume a long position (call) or short position (put) in a futures contract at a specified exercise price at any time during the period of the option (in the case of an American-style option) or on the expiration date (in the case of European-style option). After selling a put or call option on a futures contract, the fund will be required to deposit initial margin and variation margin as described above for futures contracts.

When a call option on a futures contract is exercised, the holder acquires a long position in the futures contract and the writer is assigned the opposite short position. When a put option on a futures contract is exercised, the holder acquires a short position in the futures contract and the writer is assigned the opposite long position. When an option is exercised, the delivery of the futures position by the writer of the option to the holder of the option will be accompanied by delivery of the accumulated balance in the writer's futures margin account, which represents the amount by which the market price of the futures contract, at exercise, exceeds (in the case of a call) or is less than (in the case of a put) the exercise price of the option on the future. If an option is exercised on the last trading day prior to its expiration date, the settlement will be made entirely in cash equal to the difference between the exercise price of the option and the closing level of the underlying asset on which the future is based on the expiration date. Purchasers of options who fail to exercise their options prior to the exercise date suffer a loss of the premium paid. The holder or writer of an option on a futures contract may terminate its position by selling or purchasing an offsetting option on the same financial instrument (subject to the availability of a liquid market).

The fund may use options on futures contracts in lieu of purchasing or writing options directly on the underlying assets or purchasing and writing the underlying futures contracts. For example, to hedge against a possible decrease in the value of its portfolio securities, the fund may purchase put options or write call options on futures contracts rather than selling futures contracts. Similarly, the fund may purchase call options or write put options on futures contracts as a substitute for the purchase of futures contracts to hedge against a possible increase in the price of securities that the fund expects to purchase. Such options generally operate in the same manner, and involve the same risks, as options purchased or written directly on the underlying investments. As an alternative to purchasing or writing call and put options on index futures, the fund may purchase and write call and put options on the underlying indices themselves. Such options would be used in a manner identical to the use of options on index futures.

Compared to the purchase or sale of futures contracts, the purchase of call or put options on futures contracts generally involves less potential risk to the fund because the maximum amount at risk is the premium paid for the options (plus transaction costs). However, there may be circumstances when the purchase of a call or put option on a futures contract would result in a loss to the fund when the purchase or sale of a futures contract would not (or would result in a smaller loss), such as when there is no movement in the prices of the hedged investments.

The writing of an option on a futures contract involves risks similar to those relating to the purchase or sale of futures contracts (which are described below). In addition, by writing a call option, the fund becomes obligated to sell a futures contract if the option is exercised, which may have a value higher than the exercise price. Similarly, by writing a put option, the fund becomes obligated to purchase a futures contract if the option is exercised, which may have a value lower than the exercise price. The writing of an option on a futures contract generates a premium, which may partially offset an increase (in the case of a written call option) or decrease (in the case of a written put option) in the value of the underlying futures contract. However, the loss incurred by the fund in writing options on futures contracts is potentially unlimited and may exceed the amount of the premium received. The fund will also incur transaction costs in connection with the writing of options on futures contracts.

**Risks of transactions in futures contracts and related options**. Successful use of futures contracts and options on futures contracts by the fund is subject to the Investment Manager's ability to predict movements in various factors affecting securities markets (or markets for other assets), including interest rates and market movements, and, in the case of index futures and futures based on the volatility or variance experienced by an index, the Investment Manager's ability to predict the future level of the index or the future volatility or variance experienced by an index. For example, it is possible that, where the fund has sold futures contracts to hedge its portfolio against a decline in the market, the index on which the futures contracts are written may advance and the value of securities held in the fund's portfolio, which may differ from those that comprise the index, may decline.

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If this occurred, the fund would lose money on the futures contracts and experience a decline in value in its portfolio securities. It is also possible that, if the fund has hedged against the possibility of a decline in the market adversely affecting securities held in its portfolio and securities prices increase instead, the fund will lose part or all of the benefit of the increased value of those securities it has hedged because it will have offsetting losses in its futures positions.

The use of futures and options strategies also involves the risk of imperfect correlation among movements in the prices of the securities or other assets underlying the futures contracts and options purchased and sold by the fund, of the futures contracts and options themselves, and, in the case of hedging transactions, of the securities which are the subject of a hedge. To attempt to compensate for imperfect correlations, the fund may purchase or sell futures contracts in a greater amount than the hedged investments if the volatility of the price of the hedged investments is historically greater than the volatility of the futures contracts. Conversely, the fund may purchase or sell fewer futures contracts if the volatility of the price of the hedged investments is historically less than that of the futures contract. In addition to the possibility that there may be an imperfect correlation, or no correlation at all, between movements in the futures contracts used by the fund and the portion of the portfolio being hedged, the prices of futures contracts may not correlate perfectly with movements in the underlying asset due to certain market distortions. First, all participants in the futures market are subject to margin deposit and maintenance requirements. Rather than meeting additional margin deposit requirements, investors may close futures contracts through offsetting transactions which could distort the expected relationship between the underlying asset and futures markets. Second, margin requirements in the futures market are less onerous than margin requirements in the securities market, and as a result the futures market may attract more speculators than the securities market does. Increased participation by speculators in the futures market may also cause temporary price distortions. Due to the possibility of price distortions in the futures market and also because of the imperfect correlation between movements in the underlying asset and movements in the prices of related futures, even a correct forecast of general market trends by the Investment Manager may still not result in a profitable position. In addition, in the case of hedging transactions, an incorrect correlation could result in a loss on both the hedged securities in the fund and the hedging transactions, so that the portfolio return might have been greater had hedging not been attempted.

The risk of a position in a futures contract may be very large compared to the relatively low level of margin a fund is required to deposit. In many cases, a relatively small price movement in a futures contract may result in immediate and substantial loss or gain to the fund relative to the size of a required margin deposit. In addition, if the fund has insufficient cash, it may have to sell securities to meet daily variation margin requirements at a time when it is disadvantageous to do so. The fund will be required to post margin with its futures commission merchant in connection with its transactions in futures contracts. In the event of an insolvency of the futures commission merchant, the fund may not be able to recover all (or any) of the margin it has posted with the futures commission merchant, or to realize the value of any increase in the price of its positions. The fund also may be delayed or prevented from recovering margin or other amounts deposited with a futures commission merchant or futures clearinghouse.

There is no assurance that higher than anticipated trading activity or other unforeseen events might not, at times, result in the institution by exchanges of special procedures that may interfere with the timely execution of customer orders, for example, by rendering certain market clearing facilities inadequate. For example, futures exchanges may limit the amount of fluctuation permitted in certain futures contract prices during a single trading day. The daily limit establishes the maximum amount that the price of a futures contract may vary either up or down from the previous day's settlement price at the end of the trading session. Once the daily limit has been reached in a futures contract subject to the limit, no more trades may be made on that day at a price beyond that limit. The daily limit governs only price movements during a particular trading day and therefore does not limit potential losses and the limit may work to prevent the liquidation of unfavorable positions. Futures prices have occasionally moved to the daily limit for several consecutive trading days with little or no trading, thereby preventing prompt liquidation of positions and subjecting some holders of futures contracts to substantial losses. In addition, exchanges may cancel trades in limited circumstances, for example, if the exchange believes that allowing such trades to stand as executed could have an adverse impact on the stability or integrity of the market. Any such cancellation may adversely affect the performance of the fund. The fund's futures broker may also limit the fund's ability to invest in certain futures contracts. Such restrictions may adversely affect the fund's performance and its ability to achieve its investment objective.

To reduce or eliminate a position held by the fund, the fund may seek to close out such position. The ability to establish and close out positions will be subject to the development and maintenance of a liquid market. It is not certain that this market will develop or continue to exist for a particular futures contract or option. Reasons for the absence of a liquid market on an exchange include the following: (i) there may be insufficient trading interest in certain contracts or options; (ii) restrictions may be imposed by an exchange on opening transactions or closing transactions or both; (iii) trading halts, suspensions or other restrictions may be imposed with respect to particular classes or series of contracts or options, or underlying securities; (iv)

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unusual or unforeseen circumstances may interrupt normal operations on an exchange; (v) the facilities of an exchange or a clearing corporation may not at all times be adequate to handle current trading volume; or (vi) one or more exchanges could, for economic or other reasons, decide or be compelled at some future date to discontinue the trading of contracts or options (or a particular class or series of contracts or options), in which event the market on that exchange for such contracts or options (or in the class or series of contracts or options) would cease to exist, although outstanding contracts or options on the exchange that had been issued by a clearing corporation as a result of trades on that exchange would continue to be settled or exercisable in accordance with their terms. If the fund were unable to liquidate a futures contract or an option on a futures contract due to the absence of a liquid market, the imposition of price limits or otherwise, it could incur substantial losses. The fund would continue to be subject to market risk with respect to the position. Also, except in the case of purchased options, the fund would continue to be required to make daily variation margin payments and might be required to maintain a position being hedged by the futures contract or option. The funds are required to comply with the derivatives rule when they engage in transactions involving futures and options thereon. See "Legal and Regulatory Risks Relating to Investment Strategy" below.

#### Hybrid Instruments
Hybrid instruments are generally considered derivatives and include indexed or structured securities and combine the elements of futures contracts or options with those of debt, preferred equity, commodity or a depository instrument. A hybrid instrument may be a debt security, preferred stock, warrant, convertible security, certificate of deposit or other evidence of indebtedness on which a portion of or all interest payments, and/or the principal or stated amount payable at maturity, redemption or retirement is determined by reference to prices, changes in prices, or differences between prices, of securities, currencies, intangibles, goods, articles or commodities (collectively, "underlying assets"), or by another objective index, economic factor or other measure, including interest rates, currency exchange rates, or commodities or securities indices (collectively, "benchmarks").

Hybrid instruments can be an efficient means of creating exposure to a particular market, or segment of a market, with the objective of enhancing total return. For example, a fund may wish to take advantage of expected declines in interest rates in several European countries but avoid the transaction costs associated with buying and currency-hedging the foreign bond positions. One solution would be to purchase a U.S. dollar-denominated hybrid instrument whose redemption price is linked to the average three-year interest rate in a designated group of countries. The redemption price formula would provide for payoffs of less than par if rates were above the specified level. Furthermore, a fund could limit the downside risk of the security by establishing a minimum redemption price so that the principal paid at maturity could not be below a predetermined minimum level if interest rates were to rise significantly. The purpose of this arrangement, known as a structured security with an embedded put option, would be to give the fund the desired European bond exposure while avoiding currency risk, limiting downside market risk, and lowering transaction costs. Of course, there is no guarantee that the strategy will be successful, and the fund could lose money if, for example, interest rates do not move as anticipated or credit problems develop with the issuer of the hybrid instrument.

The risks of investing in hybrid instruments reflect a combination of the risks of investing in securities, options, futures and currencies. An investment in a hybrid instrument may entail significant risks that are not associated with a similar investment in a traditional debt instrument that has a fixed principal amount, is denominated in U.S. dollars or pays interest either at a fixed rate or a floating rate determined by reference to a common, nationally published benchmark. The risks of a particular hybrid instrument will depend upon the terms of the instrument but may include the possibility of significant changes in the benchmark(s) or the prices of the underlying assets to which the instrument is linked. Such risks generally depend upon factors unrelated to the operations or credit quality of the issuer of the hybrid instrument, which may not be foreseen by the purchaser, such as economic and political events, the supply and demand of the underlying assets and interest rate movements. In addition, the various benchmarks and prices for underlying assets can be highly volatile.

Hybrid instruments are potentially more volatile and carry greater market risks than traditional debt instruments. Depending on the structure of the particular hybrid instrument, changes in a benchmark may be magnified by the terms of the hybrid instrument and have an even more dramatic and substantial effect upon the value of the hybrid instrument. Also, the prices of the hybrid instrument and the benchmark or underlying asset may not move in the same direction or at the same time.

Hybrid instruments may bear interest or pay preferred dividends at below market (or even relatively nominal) rates. Alternatively, hybrid instruments may bear interest at above market rates but bear an increased risk of principal loss (or gain). The latter scenario may result if "leverage" is used to structure the hybrid instrument. Leverage risk occurs when the hybrid instrument is structured so that a given change in a benchmark or underlying asset is multiplied to produce a greater value change in the hybrid instrument, thereby magnifying the risk of loss as well as the potential for gain.

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If the fund attempts to use a hybrid instrument as a hedge against, or as a substitute for, a portfolio investment, the hybrid instrument may not correlate as expected with the portfolio investment, resulting in losses to the fund. While hedging strategies involving hybrid instruments can reduce the risk of loss, they can also reduce the opportunity for gain or even result in losses by offsetting favorable price movements in other fund investments.

Hybrid instruments may also carry liquidity risk since the instruments are often "customized" to meet the portfolio needs of a particular investor, and therefore, the number of investors that are willing and able to buy such instruments in the secondary market may be smaller than that for more traditional debt securities. Under certain conditions, the redemption value of such an investment could be zero. In addition, because the purchase and sale of hybrid investments could take place in an over-the-counter market without the guarantee of a central clearing organization, or in a transaction between the fund and the issuer of the hybrid instrument, the creditworthiness of the counterparty of the issuer of the hybrid instrument would be an additional risk factor the fund would have to consider and monitor, and the value of the hybrid instrument may decline substantially if the issuer's creditworthiness deteriorates. In addition, uncertainty regarding the tax treatment of hybrid instruments may reduce demand for such instruments. Hybrid instruments also may not be subject to regulation by any governmental regulatory authority, including the regulators typically associated with the derivatives and securities markets such as the CFTC and the SEC.

#### Illiquid Investments
An illiquid investment means any investment that a fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.

A fund's illiquid investments may be considered speculative and may be difficult to sell. The sale of many of these investments may be prohibited or limited by law or contract. Illiquid investments may be difficult to value for purposes of calculating a fund's net asset value. A fund may not be able to sell illiquid investments when the Investment Manager considers it desirable to do so, or a fund may be able to sell them only at less than their value. The larger size of certain fund holdings and the lack of liquidity in securities markets may limit a fund's ability to sell illiquid investments, or to sell them at appropriate prices, thereby negatively impacting the fund.

#### Inflation-Protected Securities
The fund may invest in U.S. Treasury Inflation Protected Securities ("U.S. TIPS"), which are fixed income securities issued by the U.S. Department of Treasury, the principal amounts of which are adjusted daily based upon changes in the rate of inflation or deflation. The fund may also invest in other inflation-protected securities issued by non-U.S. governments or by private issuers. Two structures are common. While the U.S. Treasury and some other issuers use a structure that accrues inflation/deflation into the principal value of the bond, many other issuers adjust the coupon accruals for inflation-related changes.

U.S. TIPS pay interest on a semi-annual basis, equal to a fixed percentage of the inflation-adjusted principal amount. The interest rate on these securities is fixed at issuance, but over the life of the security this interest may be paid on an increasing or decreasing principal value that has been adjusted for inflation. U.S. TIPS currently are issued with maturities of five, ten, or thirty years, although it is possible that securities with other maturities will be issued in the future.

Repayment of the original principal upon maturity (as adjusted for inflation) is guaranteed for U.S. TIPS, even during a period of deflation. However, because the principal amount of U.S. TIPS would be adjusted downward during a period of deflation, the fund will be subject to deflation risk with respect to its investments in these securities. In addition, the current market value of U.S. TIPS is not guaranteed, and will fluctuate. If the fund purchases U.S. TIPS in the secondary market whose principal values have been adjusted upward due to inflation since issuance, the fund may experience a loss if there is a subsequent period of deflation. The fund may also invest in other inflation-related securities which may or may not provide a guarantee of principal. If a guarantee of principal is not provided, the adjusted principal value of the security repaid at maturity may be less than the original principal amount.

In addition, inflation-indexed securities do not protect holders from increases in interest rates due to reasons other than inflation (such as changes in currency exchange rates). The periodic adjustment of U.S. TIPS is currently tied to the Consumer Price Index for Urban Consumers ("CPI-U"), which is calculated by the U.S. Department of Treasury. The CPI-U is a measurement of changes in the cost of living, made up of components such as housing, food, transportation and energy. Inflation-protected securities issued by a non-U.S. government are generally adjusted to reflect a comparable inflation index, calculated by that

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government. There can no assurance that the CPI-U or any non-U.S. inflation index will accurately measure the real rate of inflation in the prices of goods and services. If interest rates rise due to reasons other than inflation (for example, due to changes in currency exchange rates), investors in these securities may not be protected to the extent that the increase is not reflected in the security's inflation measure, which could result in losses to the fund. In addition, there can be no assurance that the rate of inflation in a non-U.S. country will be correlated to the rate of inflation in the United States.

Although inflation-indexed bonds securities may protect their holders from long-term inflationary trends, short-term increases in inflation may result in a decline in value. In general, the value of inflation-protected securities is expected to fluctuate in response to changes in real interest rates, which are in turn tied to the relationship between nominal interest rates and the rate of inflation. Therefore, if inflation were to rise at a faster rate than nominal interest rates, real interest rates might decline, leading to an increase in value of inflation-protected securities. In contrast, if nominal interest rates increased at a faster rate than inflation, real interest rates might rise, leading to a decrease in value of inflation-protected securities. If inflation is lower than expected during the period the fund holds the security, the fund may earn less on the security than on a conventional bond.

Any increase in principal value is taxable in the year the increase occurs, even though holders do not receive cash representing the increase at that time. As a result, when the fund invests in inflation-protected securities, it could be required at times to liquidate other investments, including when it is not advantageous to do so, in order to satisfy its distribution requirements as a regulated investment company and to eliminate any fund-level income tax liability under the Code.

#### Initial Public Offerings
The fund may purchase debt or equity securities in initial public offerings ("IPOs"). These securities, which are often issued by unseasoned companies, may be subject to many of the same risks of investing in companies with smaller market capitalizations. Securities issued in an IPO frequently are very volatile in price (and may, therefore, involve greater risk) due to factors such as market psychology prevailing at the time of the IPO, the absence of a prior public market, unseasoned trading, the small number of shares available for trading, and limited availability of information about the issuer. Because of the price volatility of IPO securities, the fund may hold securities purchased in an IPO for a very short period of time. As a result, the fund's investments in IPOs may increase portfolio turnover, which increases brokerage and administrative costs and may result in taxable distributions to shareholders.

There can be no assurance that investments in IPOs will be available to the funds or improve a fund's performance. At any particular time or from time to time the fund may not be able to invest in securities issued in IPOs, or invest to the extent desired because, for example, only a small portion (if any) of the securities being offered in an IPO may be made available to the fund. In addition, under certain market conditions a relatively small number of companies may issue securities in IPOs. Similarly, to the extent that the number of Putnam funds to which IPO securities are allocated increases, the number of securities issued to any one fund may decrease. The investment performance of the fund during periods when it is unable to invest significantly or at all in IPOs may be lower than during periods when the fund is able to do so. When a fund's asset base is small, a significant portion of the fund's performance could be attributable to investments in IPOs because such investments would have a magnified impact on the fund. As the fund increases in size, the impact of IPOs on the fund's performance will generally decrease.

#### Inverse Floaters
Inverse floating rate debt securities (or "inverse floaters") are debt securities structured with variable interest rates that reset in the opposite direction from the market rate of interest to which the inverse floater is indexed. An inverse floater may be considered to be leveraged to the extent that its interest rate varies by a magnitude that exceeds the magnitude of the change in the index rate of interest. As a result, inverse floaters may be more volatile and more sensitive to interest rate changes than other types of debt securities with comparable maturities. Inverse floaters may be subject to legal or contractual restrictions on resale and therefore may be less liquid than other types of securities. Certain inverse floaters may be illiquid.

#### Large Shareholder Transaction Risk
The fund may be an investment option for mutual funds that are managed by the Investment Manager and its affiliates as "funds of funds." Additionally, other investors from time to time may make substantial investments in the fund. Such shareholders may at times be considered to control the fund. Dispositions of a large number of shares by these shareholders may adversely affect the fund's liquidity and net assets to the extent such transactions are executed directly with the fund in the form of redemptions through an authorized participant, rather than executed in the secondary market. In addition, a large number of shareholders

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collectively may purchase or redeem fund shares in large amounts rapidly or unexpectedly (collectively, such transactions are referred to as "large shareholder transactions"). Large shareholder redemptions may also force the fund to sell securities to satisfy redemption requests or purchase securities for the portfolio in connection with the investment of subscription proceeds when the fund would otherwise not do so, and at unfavorable prices, which may increase the fund's brokerage costs and accelerate the realization of taxable income and/or gains to shareholders. The effects of taxable income and/or gains resulting from large shareholder transactions would particularly impact non-redeeming shareholders who do not hold their fund shares in an IRA, 401(k) plan or other tax-advantaged plan. To the extent that such transactions result in short-term capital gains, such gains will generally be taxed at the ordinary income tax rate for shareholders who hold fund shares in a taxable account. In addition, fund returns may be adversely affected if the fund holds a portion of its assets in liquid, cash-like investments in connection with or in anticipation of shareholder redemptions. To the extent these large shareholders transact in shares of the fund on the secondary market, such transactions may account for a large percentage of the trading volume on the exchange and may, therefore, have a material effect (upward or downward) on the market price of the fund's shares. A number of circumstances may cause the fund to experience large redemptions, such as changes in the eligibility criteria for the fund or share class of the fund; liquidations, reorganizations, repositionings, or other announced fund events; or changes in investment objectives, strategies, policies, risks, or investment personnel.

#### Legal and Regulatory Risks Relating to Investment Strategy
The fund may be adversely affected by new (or revised) laws or regulations that may be imposed by the Internal Revenue System or Treasury Department, the CFTC, the SEC, the U.S. Federal Reserve or other banking regulators, or other governmental regulatory authorities or self-regulatory organizations that supervise the financial markets. These agencies are empowered to promulgate a variety of rules pursuant to financial reform legislation in the United States. The fund may also be adversely affected by changes in the enforcement or interpretation of existing statutes and rules by these governmental regulatory authorities or self-regulatory organizations. It is impossible to predict what, if any, changes in regulations may occur, but any regulation that restricts the ability of the fund to trade in securities or otherwise execute its investment strategy could have a material adverse impact on the fund's performance.

The regulatory environment for funds is evolving, and changes in regulation may adversely affect the value of the investments held by the fund and the ability of the fund to execute its investment strategy. In addition, the securities and derivatives (including futures) markets are subject to comprehensive statutes, regulations and margin requirements. The CFTC, the SEC, the Federal Deposit Insurance Corporation, other regulators and self-regulatory organizations and exchanges are authorized to take extraordinary actions in the event of market emergencies. The regulation of securitization and derivative transactions and funds that engage in such transactions is an evolving area of law and is subject to modification by government, self-regulatory organization and judicial action.

Since 2021, the SEC has proposed and, in some cases, finalized several new rules regarding a wide range of topics related to the fund. For example, the SEC has proposed new rules requiring the reporting and public disclosure of a manager's positions in security-based swaps, including CDS, equity total return swaps and related positions. The SEC has also finalized new rules restricting activities that could be considered to be manipulative in connection with security-based swaps, new rules regarding beneficial ownership and public reporting by managers under Section 13 of the Exchange Act, and new rules requiring the central clearing of certain cash and repurchase transactions involving U.S. Treasuries. These and other proposed new rules, whether assessed on an individual or collective basis, could fundamentally change the current regulatory framework for relevant markets and market participants, including having a material impact on activities of private fund advisers and their funds. While it is currently difficult to predict the full impact of these new rules, these rules could make it more difficult for the fund to execute certain investment strategies and may have a material adverse effect on the fund's ability to generate returns.

In October 2016, the SEC adopted a liquidity risk management rule, Rule 22e-4 under the 1940 Act (the "Liquidity Rule") that requires each fund to establish a liquidity risk management program. The funds have implemented a liquidity risk management program, and the fund's trustees (such trustees, as referenced in the table below under the heading "Management- Trustees," shall hereinafter be referred to as the "Trustees," the "Board," or the "Board of Trustees") has appointed the Investment Manager to administer the program. Under the liquidity risk management program, the liquidity risk of each fund is assessed, managed, and periodically reviewed and each portfolio investment held by each fund is classified as a "highly liquid investment," "moderately liquid investment," "less liquid investment" or "illiquid investment." The Liquidity Rule defines "liquidity risk" as the risk that a fund could not meet requests to redeem shares issued by the fund without significant dilution of the remaining investors' interest in the fund. The liquidity of a fund's portfolio investments is determined based on relevant market, trading and investment-specific considerations under the fund's liquidity risk management program. The impact the Liquidity Rule will have

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on the funds, and on the open-end mutual fund industry in general, is not yet fully known, but the rule could impact a fund's performance and its ability to achieve its investment objective(s). Please see "Illiquid Investments" above for more information.

The U.S. government has enacted legislation that provides for regulation of the derivatives market, including clearing, margin, reporting and registration requirements. The CFTC, SEC, and other federal regulators have adopted and continue to develop rules and regulations enacting the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"). The European Union ("EU"), the United Kingdom ("UK"), and some other countries have implemented and are in the process of implementing similar requirements that affect the fund when it enters into derivative transactions with a counterparty organized in that country or otherwise subject to that country's derivatives regulations. For example, the U.S. government, the EU, the UK and certain other jurisdictions have adopted mandatory minimum variation (and in some cases initial) margin requirements for bilateral derivatives. Such requirements could increase the amount of margin the fund needs to provide in connection with its derivative transactions and, therefore, make derivative transactions more expensive. The regulation of the derivatives markets may make derivatives more costly, may limit the availability or reduce the liquidity of derivatives, or may otherwise adversely affect the value or performance of derivatives. Because these requirements are evolving, their ultimate impact on the fund and the financial system is not yet known. While the rules and regulations like those imposing requirements for margin and central clearing of some derivative transactions are designed to reduce systemic risk (e.g., the risk that the interdependence of large derivatives dealers could cause them to suffer liquidity, solvency or other challenges simultaneously), there is no assurance that they will achieve that result, and, as noted, the requirements can expose the fund to new kinds of costs and risks.

In addition, in October 2020, the SEC adopted Rule 18f-4 under the 1940 Act (the "Derivatives Rule"), regulating the use by registered investment companies of derivatives and many related instruments (e.g. reverse repurchase agreements). The Derivatives Rule requires, among other things, that certain entities adopt a derivatives risk management program, comply with limitations on leverage-related risk based on a "value-at-risk" test and update reporting and disclosure procedures. Funds that use derivative instruments in a limited amount are not subject to the full requirements of the Derivatives Rule. In connection with the adoption of the Derivatives Rule, funds are no longer required to comply with the asset segregation framework arising from prior SEC guidance for covering certain derivative instruments and related transactions.

Regulatory changes also may affect counterparty risk. For example, regulatory requirements may limit the ability of the fund to protect its interests in the event of an insolvency of a derivatives counterparty. In the event of a counterparty's (or its affiliate's) insolvency, the fund's ability to exercise remedies, such as the termination of transactions, netting of obligations and realization on collateral, could be stayed or eliminated under special resolution regimes adopted in the United States, the EU, the UK, and various other jurisdictions. Such regimes provide government authorities with broad authority to intervene when a financial institution is experiencing financial difficulty. In particular, with respect to counterparties who are subject to such proceedings in the EU and the UK, the liabilities of such counterparties to the fund could be reduced, eliminated, or converted to equity in such counterparties (sometimes referred to as a "bail in").

The CFTC and domestic exchanges have established (and continue to evaluate and revise) speculative position limits, referred to as "position limits," on the maximum speculative positions which any person, or group of persons acting in concert, may hold or control in particular futures and options on futures contracts. In addition, federal position limits apply to swaps on agricultural, energy and metals commodities that are "economically equivalent," as defined by the CFTC, to certain futures contracts. Uncertainty surrounding which swaps qualify as "economically equivalent" may result in compliance challenges. An overly broad application of the definition could result in unnecessary restrictions in position sizes, whereas an overly narrow application could risk position limit overages. All positions owned or controlled by the same person or entity, even if in different accounts, must be aggregated for purposes of determining whether the applicable position limits have been exceeded unless an exemption applies. Thus, even if the fund does not intend to exceed applicable position limits, it is possible that positions of different clients managed by the Investment Manager and its affiliates or by any sub-adviser and its affiliates may be aggregated for this purpose. Any modification of trading decisions or elimination of open positions that may be required to avoid exceeding such limits may adversely affect the profitability of the fund. Position limits may adversely affect the fund's ability to hold positions in certain futures contracts and related options and swaps. A violation of position limits could also lead to regulatory action materially adverse to the fund's investment strategy.

The SEC has adopted new rules that require managers to file monthly confidential reports with the SEC regarding equity short sales and related activity. Under the new rules, the SEC will publicly disclose aggregated short position information on a monthly basis. The SEC also adopted a rule that will require reporting and public disclosure of securities loan transaction information (not including party names); this may include, but is not limited to, information about securities loans entered into in connection with

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short sales. In addition, other non-U.S. jurisdictions where the fund may trade have adopted reporting requirements. If the fund's short positions or its strategy become generally known, the fund's ability to implement its investment strategy could be adversely affected. In particular, other investors could cause a "short squeeze" in the securities held short by the fund forcing the fund to cover its positions at a loss. Such reporting requirements may also limit the fund's ability to access management and other personnel at certain companies where the fund seeks to take a short position. In addition, if other investors engage in copycat behavior by taking positions in the same issuers as the fund, the cost of borrowing securities to sell short could increase drastically and the availability of such securities to the fund could decrease drastically. Such events could make a fund unable to execute its investment strategy. Short sales are also subject to certain SEC regulations. If the SEC were to adopt additional restrictions on short sales, they could restrict the fund's ability to engage in short sales in certain circumstances. The SEC and regulatory authorities in other jurisdictions may adopt (and in certain cases, have adopted) bans on new or increases in short sales of certain securities, including short positions on such securities acquired through swaps, in response to market events. Bans on short selling and such short positions may make it impossible for the fund to execute certain investment strategies and may have a material adverse effect on the fund's ability to generate returns.

In October 2020, the SEC adopted certain regulatory changes and took other actions related to the ability of an investment company to invest in another investment company. These changes include, among other things, amendments to Rule 12d1-1, the rescission of Rule 12d1-2, the adoption of Rule 12d1-4, and the rescission of certain exemptive relief issued by the SEC permitting such investments in excess of statutory limits. These regulatory changes may adversely impact each fund's investment strategies and operations.

Rules implementing the credit risk retention requirements of the Dodd-Frank Act for asset-backed securities require the sponsor of certain securitization vehicles to retain, and to refrain from transferring, selling, conveying to a third party, or hedging 5% of the credit risk in assets transferred, sold, or conveyed through the issuance of such vehicle, subject to certain exceptions. These requirements may increase the costs to originators, securitizers, and, in certain cases, collateral managers of securitization vehicles in which the fund may invest, which costs could be passed along to the fund as an investor in such transactions.

Some EU-regulated institutions (banks, certain investment firms, and authorized managers of alternative investment funds) are currently restricted from investing in securitizations (including U.S.-related securitizations), unless, in summary: (i) the institution is able to demonstrate that it has undertaken certain due diligence in respect of various matters, including its investment position, the underlying assets, and (in the case of authorized managers of alternative investment funds) the sponsor and the originator of the securitization; and (ii) the originator, sponsor, or original lender of the securitization has explicitly disclosed to the institution that it will retain, on an ongoing basis, a net economic interest of not less than five percent of specified credit risk tranches or asset exposures related to the securitization. In the future, EU insurance and reinsurance undertakings and UCITS funds are expected to become subject to similar restrictions. Although the requirements do not apply to the fund directly, the costs of compliance, in the case of any securitization within the EU risk retention rules in which the fund has invested or is seeking to invest, could be indirectly borne by the fund and the other investors in the securitization.

#### Lower-rated Securities
The fund may invest in lower-rated fixed-income securities (commonly known as "junk bonds") and may hold fixed-income securities that are downgraded to a lower rating after the time of purchase by the fund. Compared to higher-rated fixed-income securities, lower-rated securities generally offer the potential for higher investment returns but subject holders to greater credit, market and liquidity risk, including the possibility of default or bankruptcy. The lower ratings reflect a greater possibility that adverse changes in the financial condition of the issuer or in general economic conditions, or both, or an unanticipated rise in interest rates, may impair the ability of the issuer to make payments of interest and principal. The inability (or perceived inability) of issuers to make timely payment of interest and principal would likely make the values of securities held by the fund more volatile and could limit the fund's ability to sell its securities at prices approximating the values the fund had placed on such securities. The market price of lower-rated securities also generally responds to short-term corporate and market developments to a greater extent than do the price and liquidity of higher-rated securities because such developments are perceived to have a more direct relationship to the ability of an issuer of lower-rated securities to meet its ongoing debt obligations. In addition, the market may be less liquid for lower-rated securities than for higher-rated securities. In the absence of a liquid trading market for securities held by it, the fund at times may be unable to establish the fair value of such securities.

Securities ratings are based largely on the issuer's historical financial condition and the rating agencies' analysis at the time of rating. Consequently, the rating assigned to any particular security is not necessarily a reflection of the issuer's current financial condition, which may be better or worse than the rating would indicate. In addition, the rating assigned to a security by Moody's

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Investors Service, Inc. or Standard & Poor's (or by any other nationally recognized securities rating agency) does not reflect an assessment of the volatility of the security's market value or the liquidity of an investment in the security. See "SECURITIES RATINGS."

Like those of other fixed-income securities, the values of lower-rated securities fluctuate in response to changes in interest rates. A decrease in interest rates will generally result in an increase in the value of the fund's fixed-income assets. Conversely, during periods of rising interest rates, the value of the fund's fixed-income assets will generally decline. The values of lower-rated securities may often be affected to a greater extent than higher-rated securities by changes in general economic conditions and business conditions affecting the issuers of such securities and their industries. Negative publicity or investor perceptions may also adversely affect the values of lower-rated securities, whether or not justified by fundamental factors. Changes by nationally recognized securities rating agencies in their ratings of any fixed-income security, changes in the ability of an issuer to make payments of interest and principal or regulation that limits the ability of certain categories of financial institutions to invest in lower-rated securities may also affect the value of these investments. Changes in the value of portfolio securities generally will not affect income derived from these securities, but will affect the fund's net asset value. The fund will not necessarily dispose of a security when its rating is reduced below its rating at the time of purchase. However, the Investment Manager will monitor the investment to determine whether its retention will assist in meeting the fund's goal(s).

Lower-rated securities may contain redemption, call or prepayment provisions which permit the issuer of such securities to, at its discretion, redeem the securities. During periods of falling interest rates, issuers of these securities are likely to redeem or prepay the securities and refinance them with debt securities with a lower interest rate. To the extent an issuer is able to refinance the securities, or otherwise redeem them, the fund may have to replace the securities with a lower yielding security, which would result in a lower return.

Issuers of lower-rated fixed-income securities may be (i) in poor financial condition, (ii) experiencing poor operating results, (iii) having substantial capital needs or negative net worth, or (iv) facing special competitive or product obsolescence problems, and may include companies involved in bankruptcy or other reorganizations or liquidation proceedings. Issuers of lower-rated securities are also often highly leveraged, and their relatively high debt-to-equity ratios increase the risk that their operations may not generate sufficient cash flow to service their debt obligations, especially during an economic downturn or during sustained periods of rising interest rates. Such issuers may not have more traditional methods of financing available to them and may be unable to repay outstanding obligations at maturity by refinancing. The risk of loss due to default in payment of interest or repayment of principal by issuers of lower-rated securities is significantly greater than for issuers of higher-rated securities because such securities frequently are unsecured and subordinated to the prior payment of senior indebtedness.

At times, a substantial portion of the fund's assets may be invested in an issue of which the fund, by itself or together with other funds and accounts managed by the Investment Manager or its affiliates, holds all or a major portion. Although the Investment Manager generally considers such securities to be liquid because of the availability of an institutional market for such securities, it is possible that, under adverse market or economic conditions or in the event of adverse changes in the financial condition of the issuer, the fund could find it more difficult to sell these securities when the Investment Manager believes it advisable to do so or may be able to sell the securities only at prices lower than if they were more widely held. Under these circumstances, it may also be more difficult to determine the fair value of such securities for purposes of computing the fund's net asset value. In order to enforce its rights in the event of a default, the fund may be required to participate in various legal proceedings or take possession of and manage assets securing the issuer's obligations on such securities. This could increase the fund's operating expenses and adversely affect the fund's net asset value. In the case of tax-exempt funds, any income derived from the fund's ownership or operation of such assets would not be tax-exempt. The ability of a holder of a tax-exempt security to enforce the terms of that security in a bankruptcy proceeding may be more limited than would be the case with respect to securities of private issuers. In addition, the fund's intention to qualify as a "regulated investment company" under the Code may limit the extent to which the fund may exercise its rights by taking possession of such assets.

To the extent the fund invests in lower-rated securities, the achievement of the fund's goals is more dependent on the Investment Manager's investment analysis than would be the case if the fund were investing in higher-rated securities.

#### Market Risk
The value of securities in a 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 (including perceptions about monetary policy, interest rates or the risk of default), government actions (including protectionist measures, intervention in

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the financial markets or other regulation, and changes in fiscal, monetary or tax policies), geopolitical events or changes (including natural disasters, epidemics or pandemics, terrorism and war), and factors related to a specific issuer, geography, industry or sector. In addition, the increasing popularity of passive index-based investing may have the potential to increase security price correlations and volatility. (As passive strategies generally buy or sell securities based simply on inclusion and representation in an index, securities prices will have an increasing tendency to rise or fall based on whether money is flowing into or out of passive strategies rather than based on an analysis of the prospects and valuation of individual securities. This may result in increased market volatility as more money is invested through passive strategies). During a general downturn in financial markets, multiple asset classes may decline in value simultaneously. These and other factors may lead to increased volatility and reduced liquidity in the fund's portfolio holdings, particularly for larger investments. During those periods, the fund may experience high levels of shareholder redemptions, and may have to sell securities at times when it would otherwise not do so, and at unfavorable price.

Legal, political, regulatory and tax changes may cause fluctuations in markets and securities prices. In the past, governmental and non-governmental issuers have defaulted on, or have been forced to restructure, their debts, and many other issuers have faced difficulties obtaining credit. Defaults or restructurings by governments or others of their debts could have substantial adverse effects on economies, financial markets, and asset valuations around the world. In addition, financial regulators, including the U.S. Federal Reserve and the European Central Bank, at times have taken steps to maintain historically low interest rates, such as by purchasing bonds.

Some governmental authorities at times have taken steps to devalue their currencies substantially or have taken other steps to counter actual or anticipated market or other developments. Steps by those regulators and authorities to implement, or to curtail or taper, these activities could have substantial negative effects on financial markets. The withdrawal of support, failure of efforts in response to a financial crisis, or investor perception that these efforts are not succeeding could negatively affect financial markets generally as well as the values and liquidity of certain securities.

The fund is subject to the risk that geopolitical events will disrupt securities markets and adversely affect global economies and markets. War, terrorism, economic uncertainty, and other geopolitical events (including sanctions, tariffs, exchange controls or other cross-border trade barriers) have led, and in the future may lead, to increased short-term market volatility and may have adverse long-term effects on U.S. and world economies and markets generally. In addition, trade disputes (such as the "trade war" between the United States and China that intensified in 2018 and 2019) may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree. Events such as these and their impact on the fund are difficult to predict. For example, Russia's military invasion of Ukraine in February 2022 resulted in the United States, other countries, and certain international organizations levying broad economic sanctions against Russia and Russian individuals. These sanctions and any additional sanctions or other intergovernmental actions that may be undertaken against Russia in the future may result in the devaluation of the ruble, a downgrade in the country's credit rating, and a decline in the value and liquidity of Russian securities. Such actions could result in a freeze of Russian securities, impairing the ability of a fund to buy, sell, receive, or deliver those securities. Retaliatory action by the Russian government could involve the seizure of U.S. and/or European residents' assets, and any such actions are likely to impair the value and liquidity of such assets. Any or all of these potential results could have an adverse/recessionary effect on Russia's economy. All of these factors could have a negative effect on the performance of funds that have significant exposure to Russia.

In addition, the extent and duration of the military action associated with Russia's invasion of Ukraine, resulting sanctions and resulting future market disruptions, including declines in Russian stock markets and the value of the ruble against the U.S. dollar, are impossible to predict, but could be significant. Any disruptions caused by such military action or other actions (including cyberattacks and espionage) or resulting actual and threatened responses to such activity, including purchasing and financing restrictions, boycotts or changes in consumer or purchaser preferences, sanctions, tariffs or cyberattacks on the Russian government, Russian companies, or Russian individuals, including politicians, may negatively impact Russia's economy and Russian issuers of securities in which the fund invests. Actual and threatened responses to such military action may also impact the markets for certain Russian commodities, such as oil and natural gas, as well as other sectors of the Russian economy, and may likely have collateral impacts on such sectors globally. These and any related events could have a significant impact on fund performance and the value of an investment in the fund.

Likewise, natural and environmental disasters, epidemics or pandemics, and systemic market dislocations may be highly disruptive to economies and markets, and may result in significant market volatility, exchange trading suspensions or closures, or a substantial economic downturn or recession. Those events, as well as other changes in foreign and domestic economic and political conditions, also could disrupt the operations of the fund or its service providers or adversely affect individual issuers or related groups of issuers, interest rates, credit ratings, default rates, inflation, supply chains, consumer demand, investor sentiment, and other factors affecting the value or liquidity of the fund's investments.

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An outbreak of respiratory disease caused by a novel coronavirus designated as COVID-19 was first detected in China in December 2019 and subsequently spread internationally. The transmission of COVID-19 and efforts to contain its spread have resulted in, among other things, border closings and other significant travel restrictions and disruptions; significant disruptions to business operations, supply chains and customer activity; lower consumer demand for goods and services; higher levels of unemployment; event cancellations and restrictions; service cancellations, reductions and other changes; significant challenges in healthcare service preparation and delivery; prolonged quarantines; and general concern and uncertainty. These impacts have negatively affected, and may continue to negatively affect, the global economy, the economies of individual countries, and the financial performance of individual issuers, sectors, industries, asset classes, and markets in significant and unforeseen ways. The COVID-19 pandemic also has resulted in significant market volatility, exchange trading suspensions and closures, declines in global financial markets, higher default rates, and economic downturns and recessions, and may continue to have similar effects in the future. In addition, actions taken by government and quasi-governmental authorities and regulators throughout the world in response to the COVID-19 pandemic, including significant fiscal and monetary policies changes, may affect the value, volatility, and liquidity of some securities and other assets. Health crises caused by the COVID-19 pandemic may also exacerbate other pre-existing political, social, economic, market and financial risks. The effects of the outbreak in developing or emerging market countries may be greater due to less established health care systems. The foregoing could impair the fund's ability to maintain operational standards (such as with respect to creations and redemptions of fund shares), disrupt the operations of the fund's service providers, adversely affect the value and liquidity of the fund's investments, and negatively impact the fund's performance and your investment in the fund. Given the significant uncertainty surrounding the magnitude, duration, reach, costs and effects of the COVID-19 pandemic, as well as actions that have been or could be taken by governmental authorities or other third parties, it is difficult to predict its potential impacts on a fund's investments.Securities and financial markets may be susceptible to market manipulation or other fraudulent trade practices, which could disrupt the orderly functioning of these markets, contribute to overall market volatility and adversely affect the values of the fund's investments.

Given the increasing interdependence among global economies and markets, conditions in one country, region or market might adversely affect financial conditions or issuers in other countries, regions or markets. For example, any partial or complete dissolution of the Economic and Monetary Union of the European Union, or any increased uncertainty as to its status, could have significant adverse effects on global currency and financial markets, and on the values of the fund's investments. On January 31, 2020, the United Kingdom formally withdrew from the European Union (commonly known as "Brexit"). An agreement between the United Kingdom and the European Union governing their future trade relationship became effective January 1, 2021. While the full impact of Brexit is unknown, Brexit has already resulted in volatility in European and global markets. Potential negative long-term effects could include, among others, greater market volatility and illiquidity, disruptions to world securities markets, currency fluctuations, deterioration in economic activity, a decrease in business confidence, and an increased likelihood of a recession in the United Kingdom. To the extent the fund has focused its investments in a particular country, region or market, adverse geopolitical and other events impacting that country, region or market could have a disproportionate impact on the fund.

#### Master Limited Partnerships (MLPs)
An MLP generally is a publicly traded company organized as a limited partnership or limited liability company and treated as a partnership for U.S. federal income tax purposes. MLPs may derive income and gains from, among other things, the exploration, development, mining or production, processing, refining, transportation (including pipelines transporting gas, oil, or products thereof), or the marketing of any mineral or natural resources. MLPs generally have two classes of owners, the general partner and limited partners. The general partner of an MLP is typically owned by one or more of the following: a major energy company, an investment fund, or the direct management of the MLP. The general partner may be structured as a private or publicly traded corporation or other entity. The general partner typically controls the operations and management of the MLP through an up to 2% equity interest in the MLP plus, in many cases, ownership of common units and subordinated units. Limited partners own the remainder of the partnership through ownership of common units and have a limited role in the partnership's operations and management.

MLP securities in which certain funds may invest can include, but are not limited to: (i) equity securities of MLPs, including common units, preferred units or convertible subordinated units; (ii) debt securities of MLPs, including debt securities rated below investment grade; (iii) securities of MLP affiliates; (iv) securities of open-end funds, closed-end funds or exchange-traded funds ("ETFs") that invest primarily in MLP securities; or (v) exchange-traded notes whose returns are linked to the returns of MLPs or MLP indices.

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The risks of investing in an MLP are generally those inherent in investing in a partnership as opposed to a corporation. For example, MLP common units represent an equity ownership interest in a partnership, providing limited voting rights and entitling the holder to a share of the company's success through distributions and/or capital appreciation. Unlike shareholders of a corporation, common unit holders do not elect directors annually and generally have the right to vote only on certain significant events, such as mergers, a sale of substantially all of the assets, removal of the general partner or material amendments to the partnership agreement. In addition, state law governing partnerships is often less restrictive than state law governing corporations. Accordingly, there may be fewer protections afforded investors in an MLP than investors in a corporation.

MLP common units and other equity securities can be affected by macro-economic and other factors affecting the stock market in general, expectations of interest rates, investor sentiment towards MLPs, changes in a particular issuer's financial condition, or unfavorable or unanticipated poor performance of a particular issuer (in the case of MLPs, generally measured in terms of distributable cash flow). Prices of common units of individual MLPs and other equity securities can also be affected by fundamentals unique to the partnership or company, including earnings power and coverage ratios.

Additional risks involved with investing in an MLP are risks associated with the specific industry or industries in which the partnership invests. For example, companies operating in the energy MLP sector are subject to risks that are specific to the industry in which they operate. MLPs and other companies that provide crude oil, refined product and natural gas services are subject to supply and demand fluctuations in the markets they serve which may be impacted by a wide range of factors including fluctuating commodity prices, weather, increased conservation or use of alternative fuel sources, increased governmental or environmental regulation, depletion, rising interest rates, declines in domestic or foreign production, accidents or catastrophic events, and economic conditions, among others. Energy MLP companies are subject to varying demand for oil, natural gas or refined products in the markets they serve, as well as changes in the supply of products requiring gathering, transport, processing, or storage due to natural declines in reserves and production in the supply areas serviced by the companies' facilities. Declines in oil or natural gas prices, as well as adverse regulatory decisions, may cause producers to curtail production or reduce capital spending for production or exploration activities, which may in turn reduce the need for the services provided by energy MLP companies. Lower prices may also create lower processing margins. Energy MLPs may also be subject to regulation by the Federal Energy Regulatory Commission ("FERC") with respect to tariff rates that these companies may charge for interstate pipeline transportation services. An adverse determination by FERC with respect to tariff rates of a pipeline MLP could have a material adverse effect on the business, financial conditions, result of operations, cash flows and prospects of that pipeline MLP and its ability to make cash distributions to its equity owners.

#### Money Market Instruments
Money market instruments, or short-term debt instruments, consist of obligations such as commercial paper, bank obligations (*e.g.*, certificates of deposit and bankers' acceptances), repurchase agreements, and various government obligations, such as Treasury bills. These instruments have a remaining maturity of one year or less and are generally of high credit quality. Money market instruments may be structured to be, or may employ a trust or other form so that they are, eligible investments for money market funds. For example, put features can be used to modify the maturity of a security or interest rate adjustment features can be used to enhance price stability. If a structure fails to function as intended, adverse tax or investment consequences may result. Neither the IRS nor any other regulatory authority has ruled definitively on certain legal issues presented by certain structured securities. Future tax or other regulatory determinations could adversely affect the value, liquidity, or tax treatment of the income received from these securities or the nature and timing of distributions made by the funds.

Commercial paper is a money market instrument issued by banks or companies to raise money for short-term purposes. Commercial paper is usually sold on a discounted basis rather than as an interest-bearing instrument. Unlike some other debt obligations, commercial paper is typically unsecured, which increases the credit risk associated with this type of investment. In some cases, commercial paper may be backed by some form of credit enhancement, typically in the form of a guarantee by a commercial bank. Commercial paper backed by guarantees of foreign banks may involve additional risk due to the difficulty of obtaining and enforcing judgments against such banks and the generally less restrictive regulations to which such banks are subject. Commercial paper also may be issued as an asset-backed security (that is, backed by a pool of assets representing the obligations of a number of different issuers), in which case certain of the risks discussed in "Mortgage-backed and Asset-backed securities" would apply. Commercial paper is traded primarily among institutions.

Certificates of deposit are receipts issued by a depository institution in exchange for the deposit of funds. The issuer agrees to pay the amount deposited plus interest to the bearer of the receipt on the date specified on the certificate. The certificate usually can be traded in the secondary market prior to maturity. Certificates of deposit may include those issued by foreign banks

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outside the United States. Such certificates of deposit include Eurodollar and Yankee certificates of deposit. Eurodollar certificates of deposit are U.S. dollar-denominated certificates of deposit issued by branches of foreign and domestic banks located outside the United States. Yankee certificates of deposit are certificates of deposit issued by a U.S. branch of a foreign bank denominated in U.S. dollars and held in the United States.

Bankers' acceptances typically arise from short-term credit arrangements designed to enable businesses to obtain funds to finance commercial transactions. Generally, an acceptance is a time draft drawn on a bank by an exporter or an importer to obtain a stated amount of funds to pay for specific merchandise. The draft is then "accepted" by a bank that, in effect, unconditionally guarantees to pay the face value of the instrument on its maturity date. The acceptance may then be held by the accepting bank as an earning asset or it may be sold in the secondary market at the going rate of discount for a specific maturity. Although maturities for acceptances can be as long as 270 days, most acceptances have maturities of six months or less.

Time deposits are interest-bearing non-negotiable deposits at a bank or a savings and loan association that have a specific maturity date. A time deposit earns a specific rate of interest over a definite period of time. Time deposits cannot be traded on the secondary market and those exceeding seven days and with a withdrawal penalty are considered to be illiquid.

In accordance with rules issued by the SEC, the fund may from time to time invest all or a portion of its assets, including any cash balances in money market and/or short-term bond funds advised by the Investment Manager or its affiliates. In connection with such investments, the Investment Manager may waive a portion of the advisory fees otherwise payable by the fund. See "Charges and expenses" in Part I of this SAI for the amount, if any, waived by the Investment Manager in connection with such investments.

#### Mortgage-backed and Asset-backed Securities
Mortgage-backed securities, including collateralized mortgage obligations ("CMOs"), stripped mortgage-backed securities and securities that reflect an interest in reverse mortgages, represent a participation in, or are secured by, mortgage loans or otherwise are secured by real estate related collateral. Mortgage-backed securities may be issued by agencies or instrumentalities of the U.S. government (and may not be guaranteed or insured by the U.S. government, such as those issued by Freddie Mac, Fannie Mae, and FHLBs), foreign governments (or their agencies or instrumentalities), or non-governmental issuers. Interest and principal payments (including prepayments) on the mortgage loans underlying mortgage-backed securities typically pass through to the holders of the mortgage-backed securities or serve as the source for payments on the mortgage-backed securities. Asset-backed securities are structured like mortgage-backed securities, but instead of mortgage loans or interests in mortgage loans, the underlying assets may include such items as motor vehicle installment sales or installment loan contracts, home equity loans, leases of various types of real, personal and other property and receivables from credit card agreements. Similar to mortgage-backed securities, other types of asset-backed securities may be issued by agencies or instrumentalities of the U.S. government (and may or may not be guaranteed or insured by the U.S. government), foreign governments (or their agencies or instrumentalities), or non-governmental issuers.

Mortgage-backed securities may have yield and maturity characteristics corresponding to the underlying assets. Unlike traditional debt securities, which may pay a fixed rate of interest until maturity, when the entire principal amount comes due, payments on certain mortgage-backed securities include both interest and a partial repayment of principal. Besides the scheduled repayment of principal, repayments of principal may result from the voluntary prepayment or refinancing of the underlying mortgage loans or the foreclosure of collateral securing the underlying mortgage loans. If property owners make unscheduled prepayments on their mortgage loans, these prepayments will result in early payment of the applicable mortgage-backed securities. In that event the fund may be unable to invest the proceeds from the early payment of the mortgage-backed securities in an investment that provides as high a yield as those mortgage-backed securities. Consequently, early payment associated with mortgage-backed securities may cause these securities to experience significantly greater price and yield volatility than that experienced by traditional fixed-income securities. The occurrence of mortgage prepayments is affected by factors including the level of interest rates, general economic conditions, the location and age of the mortgage and other social and demographic conditions. During periods of falling interest rates, the rate of mortgage prepayments tends to increase, thereby tending to decrease the life of mortgage-backed securities. During periods of rising interest rates, the rate of mortgage prepayments usually decreases, thereby tending to increase the life of mortgage-backed securities. If the life of a mortgage-backed security is inaccurately predicted, the fund may not be able to realize the rate of return it expected.

The fund may invest in mortgage-backed securities that represent pools of mortgage loans with variable rates of interest (such loans, "ARMs"). Adjustable-rate mortgage-backed securities, like traditional mortgage-backed securities, are interests in pools of

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mortgage loans that provide investors with payments consisting of both principal and interest as mortgage loans in the underlying mortgage pool are paid off by the borrowers. Unlike fixed-rate mortgage-backed securities, adjustable-rate mortgage-backed securities are collateralized by or represent interests in ARMs. Interest rates for ARMs are reset at periodic intervals, usually by reference to an interest rate index or market interest rate. Although the rate adjustment feature may act as a buffer to reduce sharp changes in the value of ARMs these securities are still subject to changes in value based on, among other things, changes in market interest rates or changes in the issuer's creditworthiness. If rates increase due to a reset, the risk of default by underlying borrowers may increase. Because the interest rates are reset only periodically, changes in the interest rate on ARMs may lag changes in prevailing market interest rates. The market value of an adjustable-rate mortgage-backed security may be adversely affected if interest rates increase faster than the rates of interest payable on the ARMs underlying the security. Also, some ARMs are subject to caps or floors that limit the maximum change in the interest rate during a specified period or over the life of the ARM. As a result, changes in the interest rate on an ARM may not fully reflect changes in prevailing market interest rates during certain periods.

The fund may also invest in mortgage-backed securities that represent pools of "hybrid" ARMs, underlying mortgages that combine fixed-rate and adjustable rate features. A hybrid ARM is a type of mortgage in which the interest rate is fixed for a specified period and then resets periodically, or floats, for the remaining mortgage term. During the initial interest period, hybrid ARMs behave more like fixed-rate mortgage loans. All hybrid ARMs have a reset date, the date on which a hybrid ARM changes from a fixed interest rate to a floating interest rate. At the reset date, a hybrid ARM can adjust by a maximum specified amount based on a margin over an identified index. Like ARMs, hybrid ARMs have periodic and lifetime limitations on the increases that can be made to the interest rates that mortgagors pay. Therefore, if during a floating rate period interest rates rise above the interest rate limits of the hybrid ARM, a fund holding a security backed by that hybrid ARM does not benefit from further increases in interest rates.

Mortgage-backed and asset-backed securities are less effective than other types of securities as a means of "locking in" attractive long-term interest rates. One reason is the need to reinvest prepayments of principal; another is the possibility of significant unscheduled prepayments resulting from declines in interest rates. These prepayments would have to be reinvested at lower rates. The automatic interest rate adjustment feature of mortgages underlying ARMs likewise reduces the ability to lock-in attractive rates. As a result, mortgage-backed and asset-backed securities may have less potential for capital appreciation during periods of declining interest rates than other securities of comparable maturities, although they may have a similar risk of decline in market value during periods of rising interest rates. Prepayments may also significantly shorten the effective maturities of these securities, especially during periods of declining interest rates. Conversely, during periods of rising interest rates, a reduction in prepayments may increase the effective maturities of these securities, subjecting them to a greater risk of decline in market value in response to rising interest rates than traditional debt securities, and, therefore, potentially increasing the volatility of the fund.

At times, some mortgage-backed and asset-backed securities will have higher than market interest rates and therefore will be purchased at a premium above their par value. Prepayments may cause greater losses on securities purchased at a premium than securities that are not purchased at a premium.

Mortgage-backed and asset-backed securities are subject to varying degrees of credit risk, depending on whether they are issued, or are guaranteed or insured, by agencies or instrumentalities of the U.S. government or by non-governmental issuers. Securities issued by private organizations may not be readily marketable, and since the deterioration of worldwide economic and liquidity conditions that became acute in 2008, mortgage-backed and asset-backed securities have been subject to greater liquidity risk. These conditions may occur again. Also, government actions and proposals affecting the terms of underlying home loans, changes in demand for products (e.g., automobiles) financed by those loans, and the inability of borrowers to refinance existing loans (e.g., sub-prime mortgages), have had, and may continue to have, adverse valuation and liquidity effects on mortgage-backed and asset-backed securities., There can be no assurance that in the future the market for mortgage-backed and asset-backed securities will continue to improve and become more liquid.

Mortgage-related securities include, among other things, securities that reflect an interest in a pool of reverse mortgages. In a reverse mortgage, a lender makes a loan to a homeowner based on the homeowner's equity in his or her home. A homeowner must be age 62 or older to qualify for a reverse mortgage but is not necessarily required to have any minimum income. Generally, the homeowner is not required to pay interest or repay principal on the loan until the homeowner dies, sells the home, or ceases to use the home as his or her primary residence. There are three general types of reverse mortgages: (1) single-purpose reverse mortgages, which are offered by certain state and local government agencies and nonprofit organizations; (2) federally-insured reverse mortgages (known as home equity conversion mortgages), which are backed by the U. S. Department

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of Housing and Urban Development; and (3) proprietary reverse mortgages, which are privately offered loans. A mortgage-related security may be backed by a single type of reverse mortgage or by a combination of types of reverse mortgages. Reverse mortgage-related securities include agency and privately issued mortgage-related securities. The principal government guarantor of reverse mortgage-related securities is Ginnie Mae.

Reverse mortgage-related securities may be subject to risks different than other types of mortgage-related securities due to the unique nature of the underlying loans. The date of repayment for these loans is uncertain and may occur sooner or later than anticipated. The timing of payments for the corresponding mortgage-related security may also be uncertain. Because reverse mortgages are offered only to persons 62 and older and there may be no income restrictions, the loans may react differently than traditional home loans to market events. As a result, investors (which may include the fund) in notes issued by reverse mortgage trusts ("RMTs") may be deprived of payments to which they are entitled. This could result in losses to the fund. Investors, including the fund, may determine to pursue negotiations or legal claims or otherwise seek compensation from RMT service providers in certain instances. This may involve the fund incurring costs and expenses associated with such actions.

CMOs may be issued by a U.S. government agency or instrumentality or by a private issuer. Although payment of the principal of, and interest on, the underlying collateral securing privately issued CMOs may be guaranteed by the U.S. government or its agencies or instrumentalities (such as Freddie Mac, Fannie Mae, or Ginnie Mae), these CMOs represent obligations solely of the private issuer and are not insured or guaranteed by the U.S. government, its agencies or instrumentalities or any other person or entity. CMOs may also be less liquid and may exhibit greater price volatility than other types of mortgage- or other asset-backed securities.

CMOs are designed to reduce the risk of prepayment for investors by issuing multiple classes of securities (or "tranches"), each having different maturities, interest rates and payment schedules, and with the principal and interest on the underlying mortgages allocated among the several classes in various ways. Payment of interest or principal on some classes or series of CMOs may be subject to contingencies or some classes or series may bear some or all of the risk of default on the underlying mortgages. CMOs of different classes or series are generally retired in sequence as the underlying mortgage loans in the mortgage pool are repaid. If enough mortgages are repaid ahead of schedule, the classes or series of a CMO with the earliest maturities generally will be retired prior to their maturities. Thus, the early retirement of particular classes or series of a CMO would have the same effect as the prepayment of mortgages underlying other mortgage-backed securities. Conversely, slower than anticipated prepayments can extend the effective maturities of CMOs, subjecting them to a greater risk of decline in market value in response to rising interest rates than traditional debt securities, and, therefore, potentially increasing their volatility.

Prepayments could result in losses on stripped mortgage-backed securities. Stripped mortgage-backed securities are usually structured with two classes that receive different portions of the interest and principal distributions on a pool of mortgage loans. A common type of stripped mortgage-backed security will have one class receiving all of the interest from the mortgage assets (interest only or "IOs"), while the other class will receive all of the principal (principal only or "POs"). The yield to maturity on an IO class of stripped mortgage-backed securities is extremely sensitive not only to changes in prevailing interest rates but also to the rate of principal payments (including prepayments) on the underlying assets. A rapid rate of principal prepayments may have a measurable adverse effect on the stripped mortgage-backed security's yield to maturity to the extent it invests in IOs. If the assets underlying the IO experience greater than anticipated prepayments of principal, the fund may fail to recoup fully its initial investment in these securities. Conversely, POs tend to increase in value if prepayments are greater than anticipated and decline if prepayments are slower than anticipated. Generally, the market value of POs is unusually volatile in response to changes in interest rates. The secondary market for stripped mortgage-backed securities may be more volatile and less liquid than that for other mortgage-backed securities, potentially limiting the fund's ability to buy or sell those securities at any particular time.

The risks associated with other asset-backed securities (including in particular the risks of issuer default and of early prepayment) are generally similar to those described above for CMOs. In addition, because asset-backed securities generally do not have the benefit of a security interest in the underlying assets that is comparable to a mortgage, asset-backed securities present certain additional risks that are not present with mortgage-backed securities. The ability of an issuer of asset-backed securities to enforce its security interest in the underlying assets may be limited. For example, revolving credit receivables are generally unsecured and the debtors on such receivables are entitled to the protection of a number of state and federal consumer credit laws, many of which give debtors the right to set-off certain amounts owed, thereby reducing the balance due. Automobile receivables generally are secured, but by automobiles, rather than by real property.

The value of asset-backed securities may be substantially dependent on the servicing of the underlying assets, and asset-backed securities are therefore subject to risks associated with negligence by, or defalcation of, the servicers of those assets.

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These risks may be heightened in the case of an asset-backed security collateralized by the fees earned by the servicer, as the servicer may have a reduced financial incentive to provide appropriate servicing. In certain circumstances, the mishandling of related documentation may also affect the rights of the security holders in and to the underlying collateral. The insolvency of entities that generate receivables or that utilize the assets may result in added costs and delays in addition to losses associated with a decline in the value of the underlying assets.

Payment of interest on asset-backed securities and repayment of principal largely depends on the cash flows generated by the underlying assets backing the securities and, in certain cases, may be supported by letters of credit, surety bonds, or other credit enhancements. The amount of market risk associated with asset-backed securities depends on many factors, including the deal structure (i.e., determination as to the amount of underlying assets or other support needed to produce the cash flows necessary to service interest and make principal payments), the quality of the underlying assets, the level of credit support, if any, provided for the securities, and the credit quality of the credit-support provider, if any. In recent years, a significant number of asset-backed security insurers have defaulted on their obligations.

Consistent with the fund's investment objective and policies, the fund may invest in other types of mortgage- and asset-backed securities offered currently or in the future, including certain yet-to-be-developed types of mortgage- and asset-backed securities which may be created as the market evolves.

**Additional Information Related to Freddie Mac and Fannie Mae***.* The extreme and unprecedented volatility and disruption that impacted the capital and credit markets beginning in 2008 led to market concerns regarding the ability of Freddie Mac and Fannie Mae to withstand future credit losses associated with securities held in their investment portfolios, and on which they provide guarantees, without the direct support of the federal government. On September 7, 2008, Freddie Mac and Fannie Mae were placed under the conservatorship of the Federal Housing Finance Agency (FHFA). Under the plan of conservatorship, the FHFA assumed control of, and generally has the power to direct, the operations of Freddie Mac and Fannie Mae, and is empowered to exercise all powers collectively held by their respective shareholders, directors and officers, including the power to: (1) take over the assets of and operate Freddie Mac and Fannie Mae with all the powers of the shareholders, the directors and the officers of Freddie Mac and Fannie Mae and conduct all business of Freddie Mac and Fannie Mae; (2) collect all obligations and money due to Freddie Mac and Fannie Mae; (3) perform all functions of Freddie Mac and Fannie Mae which are consistent with the conservator's appointment; (4) preserve and conserve the assets and property of Freddie Mac and Fannie Mae; and (5) contract for assistance in fulfilling any function, activity, action or duty of the conservator.

In connection with the actions taken by the FHFA, the Treasury has entered into certain preferred stock purchase agreements (SPAs) with each of Freddie Mac and Fannie Mae which establish the Treasury as the holder of a new class of senior preferred stock in each of Freddie Mac and Fannie Mae. The senior preferred stock was issued in connection with financial contributions from the Treasury to Freddie Mac and Fannie Mae. Although the SPAs are subject to amendment from time to time, currently the Treasury is obligated to provide such financial contributions up to an aggregate maximum amount determined by a formula set forth in the SPAs, and until such aggregate maximum amount is reached, there is not a specific end date to the Treasury's obligations.

The future status and role of Freddie Mac and Fannie Mae could be impacted by (among other things) the actions taken and restrictions placed on Freddie Mac and Fannie Mae by the FHFA in its role as conservator, the restrictions placed on Freddie Mac's and Fannie Mae's operations and activities under the SPAs, market responses to developments at Freddie Mac and Fannie Mae, downgrades or upgrades in the credit ratings assigned to Freddie Mac and Fannie Mae by nationally recognized statistical rating organizations (NRSROs) or ratings services, and future legislative and regulatory action that alters the operations, ownership, structure and/or mission of these institutions, each of which may, in turn, impact the value of, and cash flows on, any securities guaranteed by Freddie Mac and Fannie Mae.

In addition, the future of Freddie Mac and Fannie Mae, and other U.S. government-sponsored enterprises that are not backed by the full faith and credit of the U.S. government (GSEs), remains in question as the U.S. government continues to consider options ranging from structural reform, nationalization, privatization, or consolidation, to outright elimination. The issues that have led to significant U.S. government support for Freddie Mac and Fannie Mae have sparked serious debate regarding the continued role of the U.S. government in providing mortgage loan liquidity.

#### Options on Securities

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**Writing covered options**. The fund may write (*i.e.*, sell) covered call options and covered put options on optionable securities held in its portfolio or that it has an absolute and immediate right to acquire without additional cash consideration (or, if additional cash consideration is required, cash or other assets determined to be liquid by the Investment Manager in accordance with procedures established by the Trustees, in such amount as are set aside on the fund's books), when in the opinion of the Investment Manager such transactions are consistent with the fund's goal(s) and policies. Call options written by the fund give the purchaser the right to buy the underlying securities from the fund at a stated exercise price, regardless of the security's market price; put options written by the fund give the purchaser the right to sell the underlying securities to the fund at a stated exercise price, regardless of the security's market price.

The fund will receive a premium from writing a put or call option, which increases the fund's return on the underlying security in the event the option expires unexercised or is closed out at a profit. The amount of the premium reflects, among other things, the relationship between the exercise price and the current market value of the underlying security, the volatility of the underlying security, the amount of time remaining until expiration, current interest rates, and the effect of supply and demand in the options market and in the market for the underlying security. By writing a call option, if the fund holds the security, the fund limits its opportunity to profit from any increase in the market value of the underlying security above the exercise price of the option but continues to bear the risk of a decline in the value of the underlying security. If the fund does not hold the underlying security, the fund bears the risk that, if the market price exceeds the option strike price, the fund will suffer a loss equal to the difference at the time of exercise. By writing a put option, the fund assumes the risk that it may be required to purchase the underlying security for an exercise price higher than its then-current market value, resulting in a potential capital loss unless the security subsequently appreciates in value.

The fund may terminate an option that it has written prior to its expiration by entering into a closing purchase transaction, in which it purchases an offsetting option. A closing purchase transaction will ordinarily be effected in order to realize a profit on an outstanding option, to prevent an underlying instrument from being called, to permit the sale of the underlying instrument or to permit the writing of a new option containing different terms on such underlying instrument. The fund realizes a profit or loss from a closing transaction if the cost of the transaction (option premium plus transaction costs) is less or more than the premium received from writing the option. Because increases in the market price of a call option generally reflect increases in the market price of the security underlying the option, any loss resulting from a closing purchase transaction may be offset in whole or in part by unrealized appreciation of the underlying security.

If the fund writes a call option but does not own the underlying security, and when it writes a put option, the fund may be required to deposit cash or securities with its broker as "margin," or collateral, for its obligation to buy or sell the underlying security. As the value of the underlying security varies, the fund may have to deposit additional margin with the broker. Margin requirements are complex and are fixed by individual brokers, subject to minimum requirements currently imposed by the Federal Reserve Board and by stock exchanges and other self-regulatory organizations.

**Purchasing put options**. The fund may purchase put options to protect its portfolio holdings in an underlying security against a decline in market value. Such protection is provided during the life of the put option since the fund, as holder of the option, is able to sell the underlying security at the put exercise price regardless of any decline in the underlying security's market price. If such a price decline occurs, the put option will permit the fund to sell the security at the higher exercise price or to close out the option at a profit. In order for a put option to be profitable, the market price of the underlying security must decline sufficiently below the exercise price to cover the premium and transaction costs. By using put options in this manner, the fund will reduce any profit it might otherwise have realized from appreciation of the underlying security by the premium paid for the put option and by transaction costs. The fund may also purchase put options for other investment purposes, including to take a short position in the security underlying the put option.

**Purchasing call options**. The fund may purchase call options to hedge against an increase in the price of securities that the fund wants ultimately to buy. Such protection is provided during the life of the call option since the fund, as holder of the call option, is able to buy the underlying security at the exercise price regardless of any increase in the underlying security's market price. If such a price increase occurs, a call option will permit the fund to purchase the securities at the exercise price or to close out the option at a profit. In order for a call option to be profitable, the market price of the underlying security must rise sufficiently above the exercise price to cover the premium and transaction costs. The fund may also purchase call options for other investment purposes.

**Risk factors in options transactions**. The successful use of the fund's options strategies depends on the ability of the Investment Manager to forecast correctly interest rate and market movements. For example, if the fund were to write a call option

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based on the Investment Manager's expectation that the price of the underlying security would fall, but the price were to rise instead, the fund could be required to sell the security upon exercise at a price below the current market price. Similarly, if the fund were to write a put option based on the Investment Manager's expectation that the price of the underlying security would rise, but the price were to fall instead, the fund could be required to purchase the security upon exercise at a price higher than the current market price.

When the fund purchases an option, it runs the risk that it will lose its entire investment in the option in a relatively short period of time, unless the fund exercises the option or enters into a closing sale transaction before the option's expiration. If the price of the underlying security does not rise (in the case of a call) or fall (in the case of a put) to an extent sufficient to cover the option premium and transaction costs, the fund will lose part or all of its investment in the option. This contrasts with an investment by the fund in the underlying security, since the fund will not realize a loss if the security's price does not change.

The effective use of options also depends on the fund's ability to terminate option positions at times when the Investment Manager deems it desirable to do so. There is no assurance that the fund will be able to effect closing transactions at any particular time or at an acceptable price. If a secondary market in options were to become unavailable, the fund could no longer engage in closing transactions. Lack of investor interest might adversely affect the liquidity of the market for particular options or series of options. A market may discontinue trading of a particular option or options generally. In addition, a market could become temporarily unavailable if unusual events -- such as volume in excess of trading or clearing capability -- were to interrupt its normal operations. Although the fund may be able to offset to some extent any adverse effects of being unable to terminate an option position, the fund may experience losses in some cases as a result of such inability.

A market may at times find it necessary to impose restrictions on particular types of exchange-traded options transactions, such as opening transactions. For example, if an underlying security ceases to meet qualifications imposed by the market or the Options Clearing Corporation, new series of options on that security will no longer be opened to replace expiring series, and opening transactions in existing series may be prohibited. If an options market were to become unavailable, the fund as a holder of an option would be able to realize profits or limit losses only by exercising the option, and the fund, as option writer, would remain obligated under the option until expiration or exercise.

Disruptions in the markets for the securities underlying options purchased or sold by the fund could result in losses on the options. For example, if a fund is unable to purchase a security underlying a put option it had purchased, the fund may be unable to exercise the put option. If trading is interrupted in an underlying security, the trading of options on that security is normally halted as well. As a result, the fund as purchaser or writer of an option will be unable to close out its positions until options trading resumes, and it may be faced with considerable losses if trading in the security reopens at a substantially different price. In addition, the Options Clearing Corporation or other options markets may impose exercise restrictions in respect of exchange-traded options. If a prohibition on exercise is imposed at the time when trading in the option has also been halted, the fund as purchaser or writer of an option will be locked into its position until one of the two restrictions has been lifted. If the Options Clearing Corporation were to determine that the available supply of an underlying security appears insufficient to permit delivery by the writers of all outstanding calls in the event of exercise, it may prohibit indefinitely the exercise of put options. The fund, as holder of such a put option, could lose its entire investment if it is unable to exercise the put option prior to its expiration.

The fund may use both European-style options, which are only exercisable at a specific expiration time on the expiration date, and American-style options, which are exercisable at any time prior to the expiration date. Since an American-style option allows the holder to exercise its rights any time before the option's expiration, the writer of an American-style option has no control over when it will be required to fulfill its obligations as a writer of the option. (The writer of a European-style option is not subject to this risk because the holder may only exercise the option on its expiration date.)

Options can be traded either through established exchanges ("exchange traded options") or privately negotiated transactions (over-the-counter or "OTC" options). Exchange traded options are standardized with respect to, among other things, the underlying interest, expiration date, contract size and strike price. The terms of OTC options are generally negotiated by the parties to the option contract which allows the parties greater flexibility in customizing the agreement, but OTC options are generally less liquid than exchange traded options. OTC options purchased by the fund and assets held to cover OTC options written by the fund may, under certain circumstances, be considered illiquid securities for purposes of any limitation on the fund's ability to invest in illiquid securities. All option contracts involve credit risk if the counterparty to the option contract (*e.g.*, the clearing house or OTC counterparty) or the third party effecting the transaction in the case of cleared options (*e.g.*, futures commission merchant or broker/dealer) fails to perform. The credit risk in OTC options that are not cleared is dependent on the

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credit worthiness of the individual counterparty to the contract and may be greater than the credit risk associated with cleared options.

Foreign-traded options are subject to many of the same risks presented by internationally-traded securities. In addition, because of time differences between the United States and other countries, and because different holidays are observed in different countries, foreign options markets may be open for trading during hours or on days when U.S. markets are closed. As a result, option premiums may not reflect the current prices of the underlying interest in the United States.

There are significant differences between the securities and options markets that could result in an imperfect correlation between these markets, causing a given transaction not to achieve its objectives. In addition, many options, in particular OTC options, are complex and often valued based on subjective factors. Improper valuations can result in increased cash payment requirements to counterparties or a loss of value to the fund.

The market price of an option is affected by many factors, including changes in the market prices or dividend rates of underlying securities (or in the case of indices, the securities in such indices); the time remaining before expiration; changes in interest rates or exchange rates; and changes in the actual or perceived volatility of the relevant stock market and underlying securities. The market price of an option also may be adversely affected if the market for the option becomes less liquid.

In addition to options on securities and futures, the fund may also enter into options on futures, swaps, or other instruments as described elsewhere in this SAI.

#### Preferred Stocks and Convertible Securities
The fund may invest in preferred stocks or convertible securities. A preferred stock is a class of stock that generally pays dividends at a specified rate and has preference over common stock in the payment of dividends and the liquidation of an issuer's assets but is junior to the debt securities of the issuer in those same respects. Under ordinary circumstances, preferred stock does not carry voting rights. As with all equity securities, the value of preferred stock fluctuates based on changes in a company's financial condition and on overall market and economic conditions. The value of preferred stocks is particularly sensitive to changes in interest rates and is more sensitive to changes in an issuer's creditworthiness than is the value of debt securities. In addition, many preferred stocks may be called or redeemed prior to their maturity by the issuer under certain conditions, which can limit the benefit to investors of a decline in interest rates. Shareholders of preferred stock may suffer a loss of value if dividends are not paid. Additionally, if the issuer of preferred stock experiences economic or financial difficulties, its preferred stock may lose value due to the reduced likelihood that its board of directors will declare a dividend. Certain preferred stocks contain provisions that allow an issuer under certain conditions to skip or defer distributions. If the fund owns a preferred stock that is deferring its distribution, it may be required to report income for tax purposes despite the fact that it is not receiving current income on this position. Preferred stocks often are subject to legal provisions that allow for redemption in the event of certain tax or legal changes or at the issuer's call. In the event of redemption, the fund may not be able to reinvest the proceeds at comparable rates of return. Preferred stocks are subordinated to bonds and other debt securities in an issuer's capital structure in terms of priority for corporate income and liquidation payments, and therefore will be subject to greater credit risk than those debt securities. Preferred stocks may trade less frequently and in a more limited volume and may be subject to more abrupt or erratic price movements than many other securities, such as common stocks, corporate debt securities, and U.S. government securities.

Convertible securities include bonds, debentures, notes, preferred stocks and other securities that may be converted into or exchanged for, at a specific price or formula within a particular period of time, a prescribed amount of common stock or other equity securities of the same or a different issuer. The conversion may occur automatically upon the occurrence of a predetermined event or at the option of either the issuer or the security holder. The holder of a convertible security is generally entitled to participate in the capital appreciation resulting from a market price increase in the issuer's common stock and to receive interest paid or accrued on debt or dividends paid or accrued until the convertible security matures or is redeemed, converted or exchanged. Before conversion, convertible securities have characteristics similar to non-convertible debt or preferred securities, as applicable. Convertible securities rank senior to common stock in an issuer's capital structure and, therefore, normally entail less risk than the issuer's common stock. However, convertible securities may also be subordinate to any senior debt obligations of the issuer, and, therefore, an issuer's convertible securities may entail more risk than such senior debt obligations. Convertible securities usually offer lower interest or dividend yields than non-convertible debt securities of similar credit quality because of the potential for capital appreciation. In addition, convertible securities are often lower-rated securities.

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The market value of a convertible security is a function of its "investment value" and its "conversion value." A security's "investment value" represents the value of the security without its conversion feature (*i.e.*, a nonconvertible fixed income security). The investment value may be determined by reference to its credit quality and the current value of its yield to maturity or probable call date. At any given time, investment value may be dependent upon such factors as the general level of interest rates, the yield of similar nonconvertible securities, the financial strength of the issuer and the seniority of the security in the issuer's capital structure. A security's "conversion value" is determined by multiplying the number of shares the holder is entitled to receive upon conversion or exchange by the current market price of the underlying security. Because of the conversion feature, the market value of a convertible security will normally fluctuate in some proportion to changes in the market value of the underlying security, and, accordingly, convertible securities are subject to risks relating to the activities of the issuer and/or general market and economic conditions.

A convertible security generally will sell at a premium over its conversion value by the extent to which investors place value on the right to acquire the underlying common stock while holding a fixed income security. If the conversion value of a convertible security is significantly below its investment value, the convertible security generally trades like nonconvertible debt or preferred stock and its market value will not be influenced greatly by fluctuations in the market price of the underlying security. Conversely, if the conversion value of a convertible security is near or above its investment value, the market value of the convertible security is typically more heavily influenced by fluctuations in the market price of the underlying security. Generally, the amount of the premium decreases as the convertible security approaches maturity. Convertible securities generally have less potential for gain than common stocks.

The fund's investments in convertible securities may at times include securities that have a mandatory conversion feature, pursuant to which the securities convert automatically into common stock or other equity securities at a specified date and a specified conversion ratio, or that are convertible at the option of the issuer. Because conversion of the security is not at the option of the holder, the fund may be required to convert the security into the underlying common stock even at times when the value of the underlying common stock or other equity security has declined substantially.

The fund's investments in preferred stocks and convertible securities, particularly securities that are convertible into securities of an issuer other than the issuer of the convertible security, may be illiquid. The fund may not be able to dispose of such securities in a timely fashion or for a fair price, which could result in losses to the fund.

#### Private Placements and Restricted Securities
The fund may invest in securities that are purchased in private placements and, accordingly, are subject to restrictions on resale as a matter of contract or under federal securities laws. Because there may be relatively few potential purchasers for such investments, especially under adverse market or economic conditions or in the event of adverse changes in the financial condition of the issuer, the fund could find it more difficult to sell such securities when the Investment Manager believes it advisable to do so or may be able to sell such securities only at prices lower than if such securities were more widely held. There can be no assurance that a liquid market will exist for any such security at any particular time, and a security which when purchased was liquid in the institutional markets may subsequently become illiquid.

Many private placement securities are issued by companies that are not required to file periodic financial reports, leading to challenges in evaluating the company's overall business prospects and gauging how the investment is likely to perform over time. In addition, market quotations for these securities are less readily available. Due to the more limited financial information and lack of publicly available prices, it may be more difficult to determine the fair value of these securities for purposes of computing the fund's net asset value. As a result, the judgment of the Investment Manager may at times play a greater role in valuing these securities than in the case of publicly traded securities, and the fair value prices determined for the fund could differ from those of other market participants.

While such private placements may offer attractive opportunities for investment not otherwise available on the open market, the securities so purchased are often "restricted securities," i.e., securities which cannot be sold to the public without registration under the Securities Act of 1933 (the "Securities Act") or the availability of an exemption from registration (such as Rules 144, 144A or Regulation S), or which are "not readily marketable" because they are subject to other legal or contractual delays in or restrictions on resale. In addition, the issuer typically does not have an obligation to provide liquidity to investors by buying the securities back when the investor wants to sell. Disposing of these securities may involve time-consuming negotiation and legal expenses, and it may be difficult or impossible for the fund to sell them promptly at an acceptable price. The fund may have to bear the extra expense of registering these securities for resale and the risk of substantial delay in effecting the registration.

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Since the offering is not registered with the SEC, investors in a private placement have less protection under the federal securities laws against improper practices than investors in registered securities.

Generally speaking, restricted securities may be sold only to qualified institutional buyers, or in a privately negotiated transaction to a limited number of purchasers, or in limited quantities after they have been held for a specified period of time and other conditions are met pursuant to an exemption from registration, or in a public offering for which a registration statement is in effect under the Securities Act. The fund may be deemed to be an "underwriter" for purposes of the Securities Act when selling restricted securities to the public, and in such event the fund may be liable to purchasers of such securities if the registration statement prepared by the issuer, or the prospectus forming a part of it, is materially inaccurate or misleading. The SEC Staff currently takes the view that any delegation by the Trustees of the authority to determine that a restricted security is readily marketable (as described in the investment restrictions of the funds) must be pursuant to written procedures established by the Trustees and the Trustees have delegated such authority to the Investment Manager.

#### Real Estate Investment Trusts (REITs)
The fund may invest in REITs. REITs are pooled investment vehicles that invest primarily in income-producing real estate or real estate related loans or interests. REITs may concentrate their investments in specific geographic areas or in specific property types (i.e., hotels, shopping malls, residential complexes and office buildings). Like regulated investment companies such as the fund, REITs are not taxed on income distributed to shareholders provided that they comply with certain requirements under the Code. The fund will indirectly bear its proportionate share of any expenses (such as operating expenses and advisory fees) paid by REITs in which it invests in addition to the fund's own expenses.

Investing in REITs may involve certain unique risks in addition to those risks associated with investing in the real estate industry in general (such as possible declines in the value of real estate, lack of availability of mortgage funds, or extended vacancies of property). The market value of REIT shares and the ability of the REITs to distribute income may be adversely affected by several factors, including rising interest rates, changes in the national, state and local economic climate and real estate conditions, perceptions of prospective tenants of the safety, convenience and attractiveness of the properties, the ability of the owners to provide adequate management, maintenance and insurance, the cost of complying with the Americans with Disabilities Act, increased competition from new properties, the impact of present or future environmental legislation and compliance with environmental laws, failing to maintain their exemptions from registration under the Investment Company Act, changes in real estate taxes and other operating expenses, adverse changes in governmental rules and fiscal policies, adverse changes in zoning laws, and other factors beyond the control of the issuers of the REITs.

REITs are generally classified as equity REITs, mortgage REITs or a combination of equity and mortgage REITs ("hybrid REITs"). Equity REITs invest the majority of their assets directly in real property and derive income primarily from the collection of rents. Equity REITs can also realize capital gains by selling properties that have appreciated in value. Mortgage REITs invest the majority of their assets in real estate mortgages and derive income from the collection of interest payments. Equity REITs may be affected by changes in the value of the underlying property owned by the REITs, while mortgage REITs may be affected by the risk of borrower default, the likelihood of which is increased for mortgage REITs that invest in sub-prime mortgages. REITs, and mortgage REITs in particular, are also subject to interest rate risk. Rising interest rates may cause REIT investors to demand a higher annual yield, which may, in turn, cause a decline in the market price of the equity securities issued by a REIT. Rising interest rates also generally increase the costs of obtaining financing, which could cause the value of the fund's REIT investments to decline. During periods when interest rates are declining, mortgages are often refinanced. Refinancing may reduce the yield on investments in mortgage REITs. In addition, since REITs depend on payment under their mortgage loans and leases to generate cash to make distributions to their shareholders, investments in REITs may be adversely affected by defaults on such mortgage loans or leases. A hybrid REIT combines the characteristics of equity REITs and mortgage REITs, generally by holding both ownership interests and mortgage interests in real estate, and thus may be subject to risks associated with both real estate ownership and investments in mortgage-related securities.

Investing in certain REITs, which often have small market capitalizations, may also involve the same risks as investing in other small capitalization companies. REITs may have limited financial resources and their securities may trade less frequently and in limited volume and may be subject to more abrupt or erratic price movements than larger company securities. Historically, small capitalization stocks, such as REITs, have been more volatile in price than the larger capitalization stocks such as those included in the S&P 500 Index. The management of a REIT may be subject to conflicts of interest with respect to the operation of the business of the REIT and may be involved in real estate activities competitive with the REIT. REITs may own properties through

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joint ventures or in other circumstances in which the REIT may not have control over its investments. REITs may incur significant amounts of leverage.

REITs are dependent upon their operators' management skills, are generally not diversified (except to the extent the Code requires), and are subject to heavy cash flow dependency, borrower default or self-liquidation. REITs are also subject to the possibility of failing to qualify for the tax-advantaged treatment available to REITs under the Code or failing to maintain their exemptions from registration under the 1940 Act. In addition, REITs may be adversely affected by changes in federal tax law, for example, by limiting their permissible businesses or investments. REITs may have limited financial resources, may trade less frequently and in a limited volume, and may be subject to more abrupt or erratic price movements than more widely held securities.

The fund's investment in a REIT may result in the fund making distributions that constitute a return of capital to fund shareholders for federal income tax purposes or may require the fund to accrue and distribute income not yet received. In addition, distributions by a fund from REITs will not qualify for the corporate dividends-received deduction, or, generally, for treatment as qualified dividend income.

#### Redeemable Securities
Certain securities held by the fund may permit the issuer at its option to "call" or redeem its securities. Issuers of redeemable securities are generally more likely to exercise a "call" option in periods when interest rates are below the rate at which the original security was issued. If an issuer were to redeem securities held by the fund during a time of declining interest rates, the fund may not be able to reinvest the proceeds in securities providing the same investment return as the securities redeemed. The fund also may fail to recover additional amounts (i.e., premiums) paid for securities with higher interest rates, resulting in an unexpected capital loss.

#### Repurchase Agreements
A repurchase agreement is a contract under which the fund, the buyer under the contract, acquires a security for a relatively short period (usually not more than one week) subject to the obligation of the seller (or repurchase agreement counterparty) to repurchase, and the fund to resell, the security at a fixed time and price, which represents the fund's cost plus interest (or, for repurchase agreements under which the fund acquires a security and then sells it short, the fund's cost of "borrowing" the security). A repurchase agreement with a stated maturity of longer than one week is generally considered an illiquid investment. It is the fund's present intention to enter into repurchase agreements only with banks and registered broker-dealers. The fund may enter into repurchase agreements, including with respect to securities it wishes to sell short. See "Short Sales" in this SAI. Certain of the repurchase agreements related to securities sold short may provide that, at the option of the fund, settlement may be made by delivery of cash equal to the difference between (a) the sum of (i) the market value of the securities sold short at the time the repurchase agreement is closed out and (ii) transaction costs associated with the acquisition in the market by the repurchase agreement counterparty of the securities sold short and (b) the repurchase price specified in the repurchase agreement.

The fund may be exposed to the credit risk of the repurchase agreement counterparty (or seller) in the event that the counterparty is unable or unwilling to close out the repurchase agreement in accordance with its terms or the parties disagree as to the meaning or application of those terms. In such an event, the fund may be subject to expenses, delays, and risk of loss, including: (i) possible declines in the value of the underlying security while the fund seeks to enforce its rights under the agreement; (ii) possible reduced levels of income and lack of access to income during this period; and (iii) the inability to enforce its rights and the expenses involved in attempted enforcement. If the seller defaults, the fund could realize a loss on the sale of the underlying security to the extent that the proceeds of the sale including accrued interest are less than the resale price provided in the agreement including interest. In addition, if the seller should be involved in bankruptcy or insolvency proceedings, the fund may incur delay and costs in selling the underlying security or may suffer a loss of principal and interest if the fund is treated as an unsecured creditor and required to return the underlying collateral to the seller's estate. The fund is also subject to the risk that the repurchase agreement instrument may not perform as expected.

Pursuant to no-action relief granted by the SEC, the fund may transfer uninvested cash balances into a joint account, along with cash of other Putnam funds and certain other accounts. These balances may be invested in one or more repurchase agreements and/or short-term money market instruments.

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The fund may also enter into reverse repurchase agreements. Under a reverse repurchase agreement, the fund sells portfolio assets to another party subject to an agreement by the fund to repurchase the same assets from that party at an agreed upon price and date. During the reverse repurchase agreement period, the fund continues to receive principal and interest payments on the assets and also has the opportunity to earn a return on the collateral furnished by the counterparty to secure its obligation to redeliver the assets. The fund can use the proceeds received from entering into a reverse repurchase agreement to make additional investments, which generally causes the fund's portfolio to behave as if it were leveraged.

When entering into a reverse repurchase agreement, the fund bears the risk of delay and costs involved in recovery of securities if the initial purchaser of the securities fails to return the securities upon repurchase or fails financially. These delays and costs could be greater with respect to foreign securities. Although securities repurchase transactions are generally marked to market daily, the fund also faces the risk that securities subject to a reverse repurchase transaction will decline quickly in value, and the fund will remain obligated to repurchase those securities at a higher price, potentially resulting in a loss. If the buyer in a reverse repurchase agreement files for bankruptcy or becomes insolvent, the fund may be unable to recover the securities it sold and as a result would realize a loss equal to the difference between the value of those securities and the payment it received for them. The size of this loss will depend upon the difference between what the buyer paid for the securities the fund sold to it and the value of those securities (*e.g.*, a buyer may pay $95 for a bond with a market value of $100). In the event of a buyer's bankruptcy or insolvency, the fund's use of proceeds from the sale of its securities may be restricted while the other party or its trustee or receiver determines whether to honor the fund's right to repurchase the securities. The fund's use of reverse repurchase agreements also subjects the fund to interest costs based on the difference between the sale and repurchase price of a security involved in such a transaction. Additionally, reverse repurchase agreements entail the same risks as over-the-counter derivatives. These include the risk that the counterparty to the reverse repurchase agreement may not be able to fulfill its obligations, as discussed above, that the parties may disagree as to the meaning or application of contractual terms, or that the instrument may not perform as expected.

#### Securities of Other Investment Companies
Securities of other investment companies, including shares of open- and closed-end investment companies and unit investment trusts (which may include ETFs), represent interests in collective investment portfolios that, in turn, invest directly in underlying instruments. The fund may invest in other investment companies when it has more uninvested cash than the Investment Manager believes is advisable, when there is a shortage of direct investments available, or when the Investment Manager believes that investment companies offer attractive values.

Investment companies may be structured to perform in a similar fashion to a broad-based securities index or may focus on a particular strategy or class of assets. Passive ETFs typically seek to track the performance or dividend yield of specific indexes or companies in related industries, though unlike the index, an ETF incurs administrative expenses and transaction costs in trading securities. These indexes may be broad-based, sector-based or international. Investing in investment companies involves substantially the same risks as investing directly in the underlying instruments, but also involves expenses at the investment company-level, such as portfolio management fees and operating expenses. These expenses are in addition to the fees and expenses of the fund itself, which may lead to duplication of expenses while the fund owns another investment company's shares. In addition, investing in investment companies involves the risk that they will not perform in exactly the same fashion, or in response to the same factors, as the underlying instruments or index. To the extent the fund invests in other investment companies that are professionally managed, its performance will also depend on the investment and research abilities of investment managers other than the Investment Manager.

Open-end investment companies typically offer their shares continuously at net asset value plus any applicable sales charge and stand ready to redeem shares upon shareholder request. The shares of certain other types of investment companies, such as ETFs and closed-end investment companies, typically trade on a stock exchange or over-the-counter at a premium or a discount to their net asset value. In the case of closed-end investment companies, the number of shares is typically fixed. The securities of closed-end investment companies and ETFs carry the risk that the price the fund pays or receives may be higher or lower than the investment company's net asset value. ETFs also are subject to the risk that the timing and magnitude of cash inflows and outflows from and to investors buying and redeeming shares in the ETF could create cash balances that cause the ETF's performance to deviate from the index (which remains "fully invested" at all times). Performance of an ETF and the index it is designed to track also may diverge because the composition of the index and the securities held by the ETF may occasionally differ. ETFs and closed-end investment companies are also subject to certain additional risks, including the risks of illiquidity and of possible trading halts or interruptions due to policies of the relevant exchange, unusual market conditions or other reasons. There can be no assurance that shares of a closed-end investment company or ETF will continue to be listed on an active

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exchange. The shares of investment companies, particularly closed-end investment companies, may also be leveraged, which would increase the volatility of the fund's net asset value.

**Business development companies ("BDCs").** BDCs are a type of closed-end fund regulated under the 1940 Act, which typically invest in and lend to small-and medium-sized private companies that may lack access to public equity markets for capital raising. Under the 1940 Act, BDCs must invest at least 70% of the value of their total assets in certain asset types, which are typically the securities of private U.S. businesses. Additionally, BDCs must make available significant managerial assistance to the issuers of such securities. BDCs are not taxed on income distributed to shareholders provided they qualify as a regulated investment company under the Code. The funds will indirectly bear their proportionate share of any management and other expenses charged by the BDCs in which they invest.

Because BDCs typically invest in small and medium-sized companies, a BDC's portfolio is subject to the risks inherent in investing in smaller companies, including that portfolio companies may be dependent on a small number of products or services and may be more adversely affected by poor economic or market conditions. Some BDCs invest substantially, or even exclusively, in one sector or industry group and therefore the BDC may be susceptible to adverse conditions and economic or regulatory occurrences affecting the sector or industry group, which tends to increase volatility and result in higher risk. Investments in BDCs are also subject to management risk, including management's ability to meet the BDC's investment objective, and management's ability to manage the BDC's portfolio during periods of market turmoil and as investors' perceptions regarding a BDC or its underlying investments change.

The extent to which the fund can invest in securities of other investment companies, including ETFs, is generally limited by federal securities laws. For more information regarding the tax treatment of ETFs, please see "Taxes" below.

#### Short Sales
The fund may engage in short sales of securities and/or currencies either as a hedge against potential declines in value of a portfolio security or currency or to realize appreciation when a security or currency that the fund does not own declines in value. Short sales are transactions in which the fund sells a security or currency it does not own to a third party by borrowing the security or currency in anticipation of purchasing the same security or currency at the market price on a later date to close out the short position. The fund may also engage in short sales by entering into a repurchase agreement with respect to the security it wishes to sell short. See "Repurchase Agreements" in this SAI. The fund will incur a gain if the price of the security or currency declines between the date of the short sale and the date on which the fund replaces the borrowed security or currency; and the fund will incur a loss if the price of the security or currency increases between those dates. Such a loss is theoretically unlimited since the potential increase in the market price of the security or currency sold short is not limited. Until the security is replaced, the fund must pay the lender (or repurchase agreement counterparty) any dividends or interest that accrues during the period of the loan (or repurchase agreement). To borrow (or enter into a repurchase agreement with respect to) the security, the fund also may be required to pay a premium, which would increase the cost of the security sold. The fund's successful use of short sales is subject to the Investment Manager's ability to accurately predict movements in the market price of the security or currency sold short. Short selling may involve financial leverage because the fund is exposed both to changes in the market price of the security or currency sold short and to changes in the value of securities or currencies purchased with the proceeds of the short sale, effectively leveraging its assets. Under adverse market conditions, a fund may have difficulty purchasing securities to meet its short sale delivery obligations, and may be required to close out its short position at a time when the fund would not choose to do so, and may therefore have to sell portfolio securities to raise the capital necessary to meet its short sale obligations at a time when fundamental investment considerations may not favor such sales. There is also a risk that a borrowed security will need to be returned to the lender on short notice. If a request for return of borrowed securities occurs at a time when other short sellers of the securities are receiving similar requests, a "short squeeze" can occur, and the fund may be compelled to replace borrowed securities previously sold short with purchases on the open market at the most disadvantageous time, possibly at prices significantly in excess of the proceeds received in originally selling the securities short. In addition, the fund may have difficulty purchasing securities to meet its delivery obligations in the case of less liquid securities sold short by the fund, such as certain emerging market country securities or securities of companies with smaller market capitalizations. In connection with short sale transactions, the fund may be required to pledge certain additional assets for the benefit of the securities lender (or repurchase agreement counterparty) and the fund may, while such assets remain pledged, be limited in its ability to invest those assets in accordance with the fund's investment strategies.

Short selling is a technique that may be considered speculative and involves risks beyond the initial capital necessary to secure each transaction. It should be noted that possible losses from short sales differ from those losses that could arise from a cash

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investment in a security because losses from a short sale may be limitless, while the losses from a cash investment in a security cannot exceed the total amount of the investment in the security.

Certain of the repurchase agreements related to securities sold short may provide that, at the option of the fund, in lieu of delivering the securities sold short, settlement may be made by delivery of cash equal to the difference between (a) the sum of (i) the market value of the securities sold short at the time the repurchase agreement is closed out and (ii) transaction costs associated with the acquisition in the market by the repurchase agreement counterparty of the securities sold short and (b) the repurchase price specified in the repurchase agreement. Because that cash amount represents the fund's maximum loss in the event of the insolvency of the counterparty, the fund will, except where the local market practice for foreign securities to be sold short requires payment prior to delivery of such securities, treat such amount, rather than the full notional amount of the repurchase agreement, as its "investment" in securities of the counterparty for purposes of all applicable investment restrictions, including its fundamental policy with respect to diversification.

See "Legal and Regulatory Risks Relating to Investment Strategy" in this SAI.

#### Short-Term Trading
In seeking the fund's objective(s), the Investment Manager will buy or sell portfolio securities whenever the Investment Manager believes it appropriate to do so. From time to time the fund will buy securities intending to seek short-term trading profits. A change in the securities held by the fund is known as "portfolio turnover" and generally involves some expense to the fund. This expense may include brokerage commissions or dealer markups and other transaction costs on both the sale of securities and the reinvestment of the proceeds in other securities. If sales of portfolio securities cause the fund to realize net short-term capital gains, such gains will be taxable as ordinary income when distributed to taxable individual shareholders. As a result of the fund's investment policies, under certain market conditions the fund's portfolio turnover rate may be higher than that of other ETFs. Portfolio turnover rate for a fiscal year is the ratio of the lesser of purchases or sales of portfolio securities to the monthly average of the value of portfolio securities -- excluding securities whose maturities at acquisition were one year or less. The fund's portfolio turnover rate is not a limiting factor when the Investment Manager considers a change in the fund's portfolio.

#### Special Purpose Acquisition Companies
The fund may invest in stock, rights, warrants, and other securities of special purpose acquisition companies ("SPACs") or similar special purpose entities. A SPAC is a publicly traded company that raises investment capital in the form of a blind pool via an IPO for the purpose of acquiring an existing company. The shares of a SPAC are typically issued in "units" that include one share of common stock and one right or warrant (or partial right or warrant) conveying the right to purchase additional shares or partial shares. At a specified time following the SPAC's IPO (generally 1-2 months), the rights and warrants may be separated from the common stock at the election of the holder, after which they become freely tradeable. After going public and until an acquisition is completed, a SPAC generally invests the proceeds of its IPO (less a portion retained to cover expenses), which are held in trust, in U.S. government securities, money market securities and cash. To the extent the SPAC is invested in cash or similar securities, this may impact a fund's ability to meet its investment objective. If a SPAC does not complete an acquisition within a specified period of time after going public, the SPAC is dissolved, at which point the invested funds are returned to the SPAC's shareholders (less certain permitted expenses) and any rights or warrants issued by the SPAC expire worthless.

Because SPACs and similar entities are in essence blank check companies without an operating history or ongoing business other than seeking acquisitions, the value of their securities is particularly dependent on the ability of the entity's management to identify and complete a profitable acquisition. Some SPACs may pursue acquisitions only within certain industries or regions, which may increase the volatility of their prices. In addition, the securities issued by a SPAC, which are typically traded in the over-the-counter market, may be considered illiquid and/or be subject to restrictions on resale.

#### Structured Investments
A structured investment is a security having a return tied to an underlying index or other security or asset class. Structured investments generally are individually negotiated agreements and may be traded over-the-counter. Structured investments are organized and operated to restructure the investment characteristics of the underlying security. This restructuring involves the deposit with or purchase by an entity, such as a corporation or trust, or specified instruments (such as commercial bank loans) and the issuance by that entity or one or more classes of securities ("structured securities") backed by, or representing interests in, the underlying instruments. The cash flow on the underlying instruments may be apportioned among the newly issued

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structured securities to create securities with different investment characteristics, such as varying maturities, payment priorities and interest rate provisions, and the extent of such payments made with respect to structured securities is dependent on the extent of the cash flow on the underlying instruments. Because structured securities typically involve no credit enhancement, their credit risk generally will be equivalent to that of the underlying instruments. Investments in structured securities are generally of a class of structured securities that is either subordinated or unsubordinated to the right of payment of another class. Subordinated structured securities typically have higher yields and present greater risks than unsubordinated structured securities. Structured securities are typically sold in private placement transactions, and there currently is no active trading market for structured securities. Investments in government and government-related and restructured debt instruments are subject to special risks, including the inability or unwillingness to repay principal and interest, requests to reschedule or restructure outstanding debt and requests to extend additional loan amounts.

#### Swap Agreements
The fund may enter into swap agreements and other types of over-the-counter transactions such as caps, floors and collars with broker-dealers or other financial institutions for hedging or investment purposes. A swap involves the exchange by the fund with another party of their respective commitments to pay or receive cash flows, e.g., an exchange of floating rate payments for fixed-rate payments. The purchase of a cap entitles the purchaser, to the extent that a specified index or other underlying financial measure exceeds a predetermined value on a predetermined date or dates, to receive payments on a notional principal amount from the party selling the cap. The purchase of a floor entitles the purchaser, to the extent that a specified index or other underlying financial measure falls or other underlying measure below a predetermined value on a predetermined date or dates, to receive payments on a notional principal amount from the party selling the floor. A collar combines elements of a cap and a floor.

Swap agreements and similar transactions can be individually negotiated and structured to include exposure to a variety of different types of investments or market factors. A swap agreement may be structured with reference to an index of securities that is created and maintained by the swap counterparty. Depending on their structures, swap agreements may increase or decrease the fund's exposure to long-or short-term interest rates (in the United States or abroad), foreign currency values, mortgage securities, mortgage rates, corporate borrowing rates, or other factors such as security prices, inflation rates or the volatility of an index or one or more securities. For example, if the fund agrees to exchange payments in U.S. dollars for payments in a non-U.S. currency, the swap agreement would tend to decrease the fund's exposure to U.S. interest rates and increase its exposure to that non-U.S. currency and interest rates.

The fund may also engage in total return swaps, in which payments made by the fund or the counterparty are based on the total return of a particular reference asset or assets (such as an equity or fixed-income security, a combination of such securities, or an index). Total return swap agreements may be used to obtain exposure to a security, commodity, or market without owning or taking physical custody of such security or investing directly in such market. The fund may also enter into swap agreements on futures contracts including, but not limited to, index futures contracts. Swap agreements on futures contracts are generally subject to the same risks involved in the fund's use of futures contracts, in addition to the risks involved in the fund's use of swap agreements. See "Futures Contracts and Related Options." A total return swap, or a swap on a futures contract, may add leverage to a portfolio by providing investment exposure to an underlying asset or market where the fund does not own or take physical custody of such asset or invest directly in such market.

The value of the fund's swap positions would increase or decrease depending on the changes in value of the underlying rates, currency values, volatility or other indices or measures. Caps and floors have an effect similar to buying or writing options. Depending on how they are used, swap agreements may increase or decrease the overall volatility of the fund's investments and its share price. The fund's ability to engage in certain swap transactions may be limited by tax considerations.

The fund's ability to realize a profit from such transactions will depend on the ability of the financial institutions with which it enters into the transactions to meet their obligations to the fund. If a counterparty's creditworthiness declines, the value of the agreement would be likely to decline, potentially resulting in losses. If a default occurs by the other party to such transaction, the fund will have contractual remedies pursuant to the agreements related to the transaction, which may be limited by applicable law in the case of a counterparty's insolvency. If the returns of an index upon which a swap is based are unavailable or cannot be calculated (including where the index is created and maintained by the swap counterparty), the fund may experience difficulty in valuing the swap or in determining the amounts owed to or by the counterparty, regardless of whether the counterparty has defaulted. Under certain circumstances, suitable transactions may not be available to the fund, or the fund may be unable to close out its position under such transactions at the same time, or at the same price, as if it had purchased comparable publicly

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traded securities. Swaps carry counterparty risks that cannot be fully anticipated. Also, because swap transactions typically involve a contract between the two parties, such swap investments can be extremely illiquid, as it is uncertain as to whether another counterparty would wish to take assignment of the rights under the swap contract at a price acceptable to the fund.

The fund's investments in swaps will generate ordinary income and losses for federal income tax purposes and may cause the fund to recognize income without receiving cash with which to make the distributions necessary to qualify and be eligible for treatment as a regulated investment company and avoid a fund-level tax. The fund may therefore need to liquidate other investments, including when it is not advantageous to do so, to meet its distribution requirement. The fund is not permitted to carry forward any net ordinary losses it realizes in a taxable year to offset ordinary income it realizes in subsequent taxable years.

A credit default swap is an agreement between the fund and a counterparty that enables the fund to buy or sell protection against a credit event related to a particular issuer. One party, acting as a "protection buyer," makes periodic payments to the other party, a "protection seller," in exchange for a promise by the protection seller to make a payment to the protection buyer if a negative credit event (such as a delinquent payment or default) occurs with respect to a referenced bond or group of bonds. Credit default swaps may also be structured based on the debt of a basket of issuers, rather than a single issuer, and may be customized with respect to the default event that triggers purchase or other factors (for example, the Nth default within a basket, or defaults by a particular combination of issuers within the basket, may trigger a payment obligation). The fund may enter into credit default swap contracts for investment purposes. As a credit protection seller in a credit default swap contract, the fund would be required to pay the par (or other agreed-upon) value of a referenced debt obligation to the counterparty in the event of a default by a third party, such as a U.S. or non-U.S. corporate issuer, on the debt obligation. In return for its obligation, the fund would receive from the counterparty a periodic stream of payments over the term of the contract provided that no event of default has occurred. If no default occurs, the fund would keep the stream of payments and would have no payment obligations to the counterparty. As the seller, the fund would be subject to investment exposure on the notional amount of the swap.

The fund may also invest in credit default swap contracts to hedge against the risk of default of the debt of a particular issuer or basket of issuers or to attempt to profit from changes or perceived changes in the creditworthiness of the particular issuer(s) (also known as "buying credit protection"). In these cases, the fund would function as the counterparty referenced in the preceding paragraph. This would involve the risk that the investment may expire worthless and would only generate income in the event of an actual default by the issuer(s) of the underlying obligation(s) (or, as applicable, a credit downgrade or other indication of financial instability). It would also involve the risk that the seller may fail to satisfy its payment obligations to the fund in the event of a default. The purchase of credit default swaps involves costs, which will reduce the fund's return.

Credit default swaps involve a number of special risks. A protection seller may have to pay out amounts following a negative credit event greater than the value of the reference obligation delivered to it by its counterparty and the amount of periodic payments previously received by it from the counterparty. When the fund acts as a seller of a credit default swap, it is exposed to, among other things, leverage risk because if an event of default occurs the seller must pay the buyer the full notional value of the reference obligation. Each party to a credit default swap is subject to the credit risk of its counterparty (the risk that its counterparty may be unwilling or unable to perform its obligations on the swap as they come due). The value of the credit default swap to each party will change based on changes in the actual or perceived creditworthiness of the underlying issuer.

A protection buyer may lose its investment and recover nothing should an event of default not occur. The fund may seek to realize gains on its credit default swap positions, or limit losses on its positions, by selling those positions in the secondary market. There can be no assurance that a liquid secondary market will exist at any given time for any particular credit default swap or for credit default swaps generally.

The market for credit default swaps has at times become more volatile as the creditworthiness of certain counterparties has been questioned and/or downgraded. The parties to a credit default swap are generally required to post collateral to each other. If the fund posts initial or periodic collateral to its counterparty, it may not be able to recover that collateral from the counterparty in accordance with the terms of the swap. In addition, if the fund receives collateral from its counterparty, it may be delayed or prevented from realizing on the collateral in the event of the insolvency or bankruptcy of the counterparty. The fund may exit its obligations under a credit default swap by terminating the contract and paying applicable breakage fees, by selling its position in the secondary market, or by entering into an offsetting credit default swap position, which may cause the fund to incur more losses.

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The fund may also enter into options on swap agreements ("swaptions"). A swaption is a contract that gives a counterparty the right (but not the obligation) to enter into a new swap agreement or to shorten, extend, cancel or otherwise modify an existing swap agreement, at some designated future time on specified terms. The fund may purchase and write (sell) put and call swaptions to the same extent it may make use of standard options on securities or other instruments. Swaptions are generally subject to the same risks involved in the fund's use of options. See "Options on Securities."

Many over-the-counter derivatives (including many swaps) are complex and their valuation often requires subjective modeling and judgment, which increases the risk of mispricing or incorrect valuation. The pricing models used may not produce valuations that are consistent with the values the fund realizes when it closes or sells an over-the-counter derivative. Valuation risk is more pronounced when the fund enters into over-the-counter derivatives with specialized terms because the market value of those derivatives in some cases is determined in part by reference to similar derivatives with more standardized terms. Incorrect valuations may result in increased cash payment requirements to counterparties, undercollateralization and/or errors in calculation of the fund's NAV.

#### Tax-exempt Securities
**General description**. As used in this SAI, the term "Tax-exempt Securities" includes debt obligations issued by a state, a territory or possession of the United States, the District of Columbia, Puerto Rico, Guam and their political subdivisions (for example, counties, cities, towns, villages, districts and authorities), agencies, instrumentalities or other governmental units, the interest from which is, in the opinion of bond counsel, exempt from federal income tax and (if applicable) the corresponding state's personal income tax. Such obligations are issued to obtain funds for various public purposes, including the construction of a wide range of public facilities, such as airports, bridges, highways, housing, hospitals, mass transportation, schools, streets and water and sewer works. Other public purposes for which Tax-exempt Securities may be issued include to refund of outstanding obligations, to obtain funds for general operating expenses, or to obtain funds to lend to other public institutions and facilities in anticipation of the receipt of revenue or the issuance of other obligations.

Tax-exempt Securities can be classified into two principal categories, including "general obligation" bonds and other securities and "revenue" bonds and other securities. General obligation bonds are secured by the issuer's full faith, credit and taxing power for the payment of principal and interest. Revenue securities are payable only from the revenues derived from a particular facility or class of facilities or, in some cases, from the proceeds of a special excise tax or other specific revenue source, such as the user of the facility being financed. Tax-exempt Securities may be structured as fixed-, variable- or floating-rate obligations or as zero-coupon, payment-in-kind and step-coupon securities and may be privately placed or publicly offered.

Short-term Tax-exempt Securities are generally issued by state and local governments and public authorities as interim financing in anticipation of tax collections, revenue receipts or bond sales to finance such public purposes.

In addition, certain types of "private activity" bonds may be issued by public authorities to finance projects of privately-owned entities, such as privately - operated housing facilities; certain local facilities for supplying water, gas or electricity; sewage or solid waste disposal facilities; student loans; or public or private institutions for the construction of educational, hospital, housing and other facilities. Such obligations are included within the term Tax-exempt Securities if the interest paid thereon is, in the opinion of bond counsel, exempt from federal income tax and (if applicable) state personal income tax (such interest may, however, be subject to federal alternative minimum tax). Other types of private activity bonds, the proceeds of which are used for the construction, repair or improvement of, or to obtain equipment for, privately operated industrial or commercial facilities, may also constitute Tax-exempt Securities, although the current federal tax laws place substantial limitations on the size of such issues. The credit quality of private activity bonds is usually directly related to the credit standing of the corporate user of the facility involved.

Tax-exempt Securities share many of the structural features and risks of other bonds, as described elsewhere in this SAI. For example, the fund may purchase callable Tax-exempt Securities, zero-coupon Tax-exempt Securities, or "stripped" Tax-exempt Securities, which entail additional risks. The fund may also purchase structured or asset-backed Tax-exempt Securities, such as the securities (including preferred stock) of special purpose entities that hold interests in the Tax-exempt Securities of one or more issuers and issue "tranched" securities that are entitled to receive payments based on the cash flows from those underlying securities. See "Redeemable securities," "-Zero-coupon and Payment-in-kind Bonds," "-Structured investments," and "Mortgage-backed and Asset-backed Securities" in this SAI. Structured Tax-exempt Securities may involve increased risk that the interest received by the fund may not be exempt from federal or state income tax, or that such interest may result in liability for the alternative minimum tax for shareholders of the fund. For example, in certain cases, the issuers of certain securities held by a

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special purpose entity may not have received an unqualified opinion of bond counsel that the interest from the securities will be exempt from federal income tax and (if applicable) the corresponding state's personal income tax.

Even though Tax-exempt Securities are interest-bearing investments that promise a stable flow of income, their prices are generally inversely affected by changes in interest rates and, therefore, are subject to the risk of market price fluctuations. The values of Tax-exempt Securities with longer remaining maturities typically fluctuate more than those of similarly rated Tax-exempt Securities with shorter remaining maturities. The values of Tax-exempt Securities also may be affected by changes in their actual or perceived credit quality. The credit quality of Tax-exempt Securities can be affected by, among other things, the financial condition of the issuer or guarantor, the issuer's future borrowing plans and sources of revenue, the economic feasibility of the revenue bond project or general borrowing purpose, political or economic developments in the state or region where the security is issued, and the liquidity of the security. The amount of information about the financial condition of an issuer of Tax-exempt Securities may not be as extensive as that which is made available by corporations whose securities are publicly traded. As a result, the achievement of the fund's goals is more dependent on the Investment Manager's investment analysis than would be the case if the fund were investing in securities of better-known issuers. In addition, Tax-exempt Securities may be harder to value than securities issued by corporations that are publicly traded.

The secondary market for some Tax-exempt Securities issued within a state (including issues that are privately placed with the fund) is less liquid than that for taxable debt obligations or other more widely traded municipal obligations. No established resale market exists for certain of the Tax-exempt Securities in which the fund may invest. The market for Tax-exempt Securities rated below investment grade is also likely to be less liquid than the market for higher rated obligations. As a result, the fund may be unable to dispose of these municipal obligations at times when it would otherwise wish to do so at the prices at which they are valued.

Tax-exempt Securities Issued by the Commonwealth of Puerto Rico. Tax-exempt Securities issued by the Commonwealth of Puerto Rico or its political subdivisions, agencies, instrumentalities, or public corporations may be affected by economic, market, political, and social conditions in Puerto Rico. Puerto Rico has recently experienced (and may in the future experience) significant fiscal and economic challenges, including substantial debt service obligations, high levels of unemployment, underfunded public retirement systems, and persistent government budget deficits. These challenges may negatively affect the value of the fund's investments in Puerto Rico Tax-Exempt Securities. Major ratings agencies have downgraded the general obligation debt of Puerto Rico to below investment grade and continue to maintain a negative outlook for this debt, which increases the likelihood that the rating will be lowered further. In both August 2015 and January 2016, Puerto Rico defaulted on its debt by failing to make full payment due on its outstanding bonds, and there can be no assurance that Puerto Rico will be able to satisfy its future debt obligations. Further downgrades or defaults may place additional strain on the Puerto Rico economy and may negatively affect the value, liquidity, and volatility of the fund's investments in Puerto Rico Tax-exempt Securities. In 2016, the Puerto Rico Oversight, Management, and Economic Stability Act, known as "PROMESA," was signed into law. Among other things, PROMESA established a federally-appointed Oversight Board to oversee Puerto Rico's financial operations and provides Puerto Rico a path to restructuring its debts, thus increasing the risk that Puerto Rico may never pay off municipal indebtedness, or may pay only a small fraction of the amount owed. Proceedings under PROMESA remain ongoing, and it is unclear at this time how those proceedings will be resolved or what impact they will have on the value of a fund's investments in Puerto Rico municipal securities.

These challenges and uncertainties have been exacerbated by Hurricane Maria and the resulting natural disaster in Puerto Rico. In September 2017, Hurricane Maria struck Puerto Rico, causing major damage across the Commonwealth, including damage to its water, power, and telecommunications infrastructure. The length of time needed to rebuild Puerto Rico's infrastructure is unclear, but could amount to years, during which the Commonwealth is likely to be in an uncertain economic state. The full extent of the natural disaster's impact on Puerto Rico's economy and foreign investment in Puerto Rico is difficult to estimate.

**Escrow-secured or pre-refunded bonds**. These securities are created when an issuer uses the proceeds from a new bond issue to buy high grade, interest-bearing debt securities, generally direct obligations of the U.S. government, in order to redeem (or "pre-refund"), before maturity, an outstanding bond issue that is not immediately callable. These securities are then deposited in an irrevocable escrow account held by a trustee bank to secure all future payments of principal and interest on the pre-refunded bond until that bond's call date. Pre-refunded bonds often receive an 'AAA' or equivalent rating. Because pre-refunded bonds still bear the same interest rate, and have a very high credit quality, their price may increase. However, as the original bond approaches its call date, the bond's price will fall to its call price. The escrow account securities pledged to pay the principal and interest of the pre-refunded municipal bonds held by the fund nonetheless still subject the fund to interest rate risk and market risk. In addition, while a secondary market exists for pre-refunded municipal bonds, if the fund sells pre-refunded

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municipal bonds prior to maturity, the price received may be more or less than the original cost, depending on market conditions at the time of sale. The interest on pre-refunded bonds issued on or before December 31, 2017 is exempt from federal income tax; the interest on such bonds issued after December 31, 2017 is not exempt from federal income tax.

**Low Income Housing Tax Credits.** The fund may invest in loans and other instruments tied to the Low Income Housing Tax Credit ("LIHTC") program, which seeks to increase the supply of affordable housing by offering tax credits to projects that rehabilitate or create new affordable rental properties. LIHTCs offer investors a dollar-for-dollar reduction in their federal tax liability to incentivize the construction and rehabilitation of affordable housing properties. Certain of these investments may be issued, or are guaranteed or insured, by agencies or instrumentalities of the U.S. government, such as Fannie Mae or Freddie Mac, while other such investments may be issued by non-governmental entities and therefore not guaranteed or insured.

The LIHTC program requires ongoing compliance with numerous eligibility requirements. Failure to comply with these requirements, including failures by persons other than the fund or which are outside the fund's control, may result in recapture of some or all of the related tax credits as well as the possibility of the loss of future credits. In addition to a recapture of credits and the potential loss of future credits, failure to comply with such eligibility requirements may trigger a default event on the underlying bonds. The fund's investments in loans or other instruments tied to LIHTCs are subject to many of the risks facing other fixed income investments, including interest rate, credit, and prepayment risk.

**Tobacco Settlement Revenue Bonds**. The fund may invest in tobacco settlement revenue bonds, which are secured by an issuing state's proportionate share of periodic payments by tobacco companies made under the Master Settlement Agreement ("MSA"). The MSA is an agreement that was reached out of court in November 1998 between 46 states and six U.S. jurisdictions and tobacco manufacturers representing an overwhelming majority of U.S. market share in settlement of certain smoking-related litigation. The MSA provides for annual payments by the manufacturers to the states and jurisdictions in perpetuity in exchange for releasing all claims against the manufacturers and a pledge of no further litigation. The MSA established a base payment schedule and a formula for adjusting payments each year. Tobacco manufacturers pay into a master escrow trust based on their market share, and each state receives a fixed percentage of the payment as set forth in the MSA. Within some states, certain localities may in turn be allocated a specific portion of the state's MSA payment pursuant to an arrangement with the state.

A number of state and local governments have securitized the future flow of payments under the MSA by selling bonds pursuant to indentures, some through distinct governmental entities created for such purpose. The bonds are backed by the future revenue flow that is used for principal and interest payments on the bonds. Annual payments on the bonds, and thus risk to the fund, are dependent on the receipt of future settlement payments by the state or its instrumentality. The actual amount of future settlement payments may vary based on, among other things, annual domestic cigarette shipments, inflation, the financial capability of participating tobacco companies, and certain offsets for disputed payments. Payments made by tobacco manufacturers could be reduced if cigarette shipments continue to decline below the base levels used in establishing manufacturers' payment obligations under the MSA. Demand for cigarettes in the U.S. could continue to decline based on many factors, including, without limitation, anti-smoking campaigns, tax increases, price increases implemented to recoup the cost of payments by tobacco companies under the MSA, reduced ability to advertise, enforcement of laws prohibiting sales to minors, elimination of certain sales venues such as vending machines, the spread of local ordinances restricting smoking in public places, and increases in the use of other nicotine delivery devices (such as electronic cigarettes, smoking cessation products, and smokeless tobacco).

Because tobacco settlement bonds are backed by payments from the tobacco manufacturers, and generally not by the credit of the state or local government issuing the bonds, their creditworthiness depends on the ability of tobacco manufacturers to meet

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their obligations. The bankruptcy of an MSA-participating manufacturer could cause delays or reductions in bond payments, which would affect the fund's net asset value. Under the MSA, a market share loss by MSA-participating tobacco manufacturers to non-MSA participating manufacturers would also cause a downward adjustment in the payment amounts under some circumstances.

The MSA and tobacco manufacturers have been and continue to be subject to various legal claims, including, among others, claims that the MSA violates federal antitrust law. In addition, the United States Department of Justice has alleged in a civil lawsuit that the major tobacco companies defrauded and misled the American public about the health risks associated with smoking cigarettes. An adverse outcome to this lawsuit or to any other litigation matters or regulatory actions relating to the MSA or affecting tobacco manufacturers could adversely affect the payment streams associated with the MSA or cause delays or reductions in bond payments by tobacco manufacturers.

In addition to the risks described above, tobacco settlement revenue bonds are subject to other risks described in this SAI, including the risks of asset-backed securities discussed under "Mortgage-backed and Asset-backed Securities."

**Stand-by commitments**. When the fund purchases Tax-exempt Securities, it has the authority to acquire stand-by commitments from banks and broker-dealers with respect to those Tax-exempt Securities. A stand-by commitment is a right acquired by the fund to sell up to the principal amount of such Tax-exempt Securities back to the seller or a third party (typically an institution such as a bank or broker-dealer) at an agreed-upon price or yield within specified periods prior to their maturity dates. A stand-by commitment may be considered a security independent of the Tax-exempt security to which it relates. The amount payable by a bank or dealer during the time a stand-by commitment is exercisable, absent unusual circumstances, would be substantially the same as the market value of the underlying Tax-exempt security to a third party at any time. The fund expects that stand-by commitments generally will be available without the payment of direct or indirect consideration. The fund does not expect to assign any value to stand-by commitments when determining the fund's net asset value. The fund will be subject to credit risk with respect to an institution providing a stand-by commitment and a decline in the credit quality of the institution could cause losses to the fund.

**Yields**. The yields on Tax-exempt Securities depend on a variety of factors, including general money market conditions, effective marginal tax rates, the financial condition of the issuer, general conditions of the Tax-exempt security market, the size of a particular offering, the maturity of the obligation and the rating of the issue. The ratings of nationally recognized securities rating agencies represent their opinions as to the credit quality of the Tax-exempt Securities which they undertake to rate. It should be emphasized, however, that ratings are general and are not absolute standards of quality. Consequently, Tax-exempt Securities with the same maturity, interest rate and rating may have different yields while Tax-exempt Securities of the same maturity and interest rate but with different ratings may have the same yield. Yield disparities may occur for reasons not directly related to the investment quality of particular issues or the general movement of interest rates and may be due to such factors as changes in the overall demand or supply of various types of Tax-exempt Securities or changes in the investment objectives of investors. Subsequent to purchase by the fund, an issue of Tax-exempt Securities or other investments may cease to be rated, or its rating may be reduced below the minimum rating required for purchase by the fund. The Investment Manager will consider such an event in its determination of whether the fund should continue to hold an investment in its portfolio. Downgrades of Tax-exempt Securities held by a money market fund may require the fund to sell such securities, potentially at a loss.

**"Moral obligation" bonds**. The fund may invest in so-called "moral obligation" bonds, where repayment of the bond is backed by a moral (but not legally binding) commitment of an entity other than the issuer, such as a state legislature, to pay. Such a commitment may be in addition to the legal commitment of the issuer to repay the bond or may represent the only payment obligation with respect to the bond (where, for example, no amount has yet been specifically appropriated to pay the bond. See "-Municipal leases" below.)

**Municipal leases**. The fund may acquire participations in lease obligations or installment purchase contract obligations (collectively, "lease obligations") of municipal authorities or entities. A lease obligation is an obligation in the form of a lease or installment purchase that is issued by a state or local government to acquire equipment and facilities. Income from such obligations generally is exempt from state and local tax in the state of issuance. Lease obligations may be secured or unsecured. Lease obligations do not constitute general obligations of the municipality for which the municipality's taxing power is pledged.

Municipal leases may be subject to greater risks than general obligation or revenue bonds. Although lease obligations do not constitute general obligations of the municipality, a lease obligation ordinarily is backed by the municipality's covenant to budget for, appropriate, and make the payments due under the lease obligation. However, certain of these lease obligations contain "

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non-appropriation" clauses, which provide that the municipality has no obligation to make lease or installment purchase payments in future years unless money is appropriated for such purpose on a yearly basis. In the case of a "non-appropriation" lease, the fund's ability to recover under the lease in the event of non-appropriation or default will be limited solely to the repossession of the leased property, and in any event, foreclosure of that property might prove difficult. If a municipality does not fulfill its payment obligation, it may be difficult to sell the lease obligation and the proceeds of a sale may not cover the fund's loss.

In addition to the "non-appropriation" risk, many municipal lease obligations have not yet developed the depth of marketability associated with municipal bonds. Moreover, such leases may be subject to the temporary abatement of payments in the event the issuer is prevented from maintaining occupancy of the leased premises or utilizing the leased equipment or facilities. Although the obligations may be secured by the leased equipment or facilities, the disposition of the property in the event of non-appropriation or foreclosure might prove difficult, time consuming and costly, and result in a delay in recovering, or the failure to recover fully, the fund's original investment.

**Additional risks**. Securities in which the fund may invest, including Tax-exempt Securities, are subject to the provisions of bankruptcy, insolvency and other laws affecting the rights and remedies of creditors, such as the federal Bankruptcy Code (including special provisions related to municipalities and other public entities), and laws, if any, that may be enacted by Congress or state legislatures extending the time for payment of principal or interest, or both, or imposing other constraints upon enforcement of such obligations. There is also the possibility that, as a result of litigation or other conditions, such as the recent bankruptcy-type proceedings by the Commonwealth of Puerto Rico the power, ability or willingness of issuers to meet their obligations for the payment of interest and principal on their Tax-exempt Securities may be materially affected or their obligations may be found to be invalid or unenforceable. Such litigation or conditions may from time to time have the effect of introducing uncertainties in the market for municipal bonds or certain segments thereof, or of materially affecting the credit risk with respect to particular bonds. Adverse economic, business, legal or political developments might affect all or a substantial portion of the fund's municipal bonds in the same manner.

From time to time, legislation may be introduced or litigation may arise that may restrict or eliminate the federal income tax exemption for interest on debt obligations issued by states and their political subdivisions. Federal tax laws limit the types and amounts of tax-exempt bonds issuable for certain purposes, especially industrial development bonds and private activity bonds. Such limits may affect the future supply and yields of these types of Tax-exempt Securities. Further proposals limiting the issuance of Tax-exempt Securities may well be introduced in the future. Shareholders should consult their tax advisors for the current law on tax-exempt bonds and securities.

#### Temporary Defensive Strategies
In response to adverse market, economic, political or other conditions, the fund may take temporary defensive positions that are inconsistent with its principal investment strategies. However, a fund may choose not to use these temporary defensive strategies for a variety of reasons, even in very volatile market conditions. In implementing temporary defensive strategies, the fund may invest primarily in, among other things, debt securities, preferred stocks, U.S. government and agency obligations, cash or money market instruments (including, to the extent permitted by law or applicable exemptive relief, money market funds), or any other securities the Investment Manager considers consistent with such defensive strategies. When the fund takes temporary defensive positions, the fund may miss out on investment opportunities, and the fund may not achieve its investment objective. In addition, while temporary defensive strategies are mainly designed to limit losses, such strategies may not work as intended.

#### Trade Policy
In 2025, the U.S. government indicated its intent to alter its approach to international trade policy and, in some cases, to renegotiate or potentially terminate certain existing bilateral or multilateral trade agreements and treaties with foreign countries and has made proposals and taken actions related thereto. In addition, the U.S. government has recently imposed tariffs on certain foreign goods and has indicated a willingness to impose tariffs on imports of other products. Some foreign governments, including China, have instituted retaliatory tariffs on certain U.S. goods and have indicated a willingness to impose additional tariffs on U.S. products. Other countries, including Mexico, have threatened retaliatory tariffs on certain U.S. products.

Global trade disruption, significant introductions of trade barriers, and bilateral trade frictions, together with any future downturns in the global economy resulting therefrom, could adversely affect the financial performance of the fund and its investments.

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Trade policy may be an ongoing source of instability, potentially resulting in significant currency fluctuations and/or having other adverse effects on international markets, international trade agreements, and/or other existing cross-border cooperation arrangements (whether economic, tax, fiscal, legal, regulatory, or otherwise). To the extent trade disputes escalate globally, there could be additional significant impacts on the sectors or industries in which the fund invests and other adverse impacts on the fund's overall performance.

#### Warrants
The fund may invest in or acquire warrants, which are instruments that give the fund the right (but not the obligation) to purchase certain securities from an issuer at a specific price (the "strike price") until a stated expiration date. The purchase of warrants involves the risk that the effective price paid for the warrant added to the strike price of the underlying security may exceed the value of the security's market price, such as when there is no movement in the level of the underlying security. Also, the strike price of warrants typically is much lower than the current market price of the underlying securities, yet they are subject to similar price fluctuations. As a result, warrants may be more volatile investments than the underlying securities and may offer greater potential for capital appreciation as well as capital loss. Warrants do not entitle a holder to dividends or voting rights with respect to the underlying securities and do not represent any rights in the assets of the issuing company. Also, the value of the warrant does not necessarily change with the value of the underlying securities and a warrant ceases to have value if it is not exercised prior to the expiration date. These factors can make warrants more speculative than other types of investments.

In addition to warrants on securities, the fund may purchase put warrants and call warrants whose values vary depending on the change in the value of one or more specified securities indices ("index warrants"). Index warrants are generally issued by banks or other financial institutions and give the holder the right, at any time during the term of the warrant, to receive upon exercise of the warrant a cash payment from the issuer based on the value of the underlying index at the time of exercise. In general, if the value of the underlying index rises above the exercise price of the index warrant, the holder of a call warrant will be entitled to receive a cash payment from the issuer upon exercise based on the difference between the value of the index and the exercise price of the warrant; if the value of the underlying index falls, the holder of a put warrant will be entitled to receive a cash payment from the issuer upon exercise based on the difference between the exercise price of the warrant and the value of the index. The holder of a warrant would not be entitled to any payments from the issuer at any time when, in the case of a call warrant, the exercise price is greater than the value of the underlying index, or, in the case of a put warrant, the exercise price is less than the value of the underlying index. If the fund were not to exercise an index warrant prior to its expiration, then the fund would lose the amount of the purchase price paid by it for the warrant.

The fund will normally use index warrants in a manner similar to its use of options on securities indices. The risks of the fund's use of index warrants are generally similar to those relating to its use of index options. Unlike most index options, however, index warrants are issued in limited amounts and are not obligations of a regulated clearing agency, but are backed only by the credit of the bank or other institution which issues the warrant. Also, index warrants generally have longer terms than index options. Index warrants are not likely to be as liquid as certain index options backed by a recognized clearing agency. In addition, the terms of index warrants may limit the fund's ability to exercise the warrants at such time, or in such quantities, as the fund would otherwise wish to do.

#### Zero-coupon and Payment-in-kind Bonds
The fund may invest without limit in so-called "zero-coupon" bonds and "payment-in-kind" bonds. Zero-coupon bonds are issued at a significant discount from their principal amount in lieu of paying interest periodically. Payment-in-kind bonds allow the issuer, at its option, to make current interest payments on the bonds either in cash or in additional bonds. Because zero-coupon and payment-in-kind bonds do not pay current interest in cash, their value is subject to greater fluctuation in response to changes in market interest rates than bonds that pay interest currently. Both zero-coupon and payment-in-kind bonds allow an issuer to avoid the need to generate cash to meet current interest payments. Accordingly, such bonds may involve greater credit risks than bonds paying interest currently in cash. The fund is required to accrue interest income on such investments and to distribute such amounts at least annually to shareholders even though such bonds do not pay current interest in cash. Thus, it may be necessary at times for the fund to liquidate investments, including when it is not advantageous to do so, in order to satisfy its distribution requirements under the Code. The market for zero-coupon and payment-in-kind bonds may be limited, making it difficult for the fund to value them or dispose of its holdings quickly at an acceptable price.

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#### EXCHANGE TRADED FUND RISKS

#### Continuous Offering
The method by which Creation Units of shares are created and traded may raise certain issues under applicable securities laws. Because new Creation Units of shares are issued and sold by a fund on an ongoing basis, at any point a "distribution," as such term is used in the 1933 Act, may occur. Broker-dealers and other persons are cautioned that some activities on their part may, depending on the circumstances, result in their being deemed participants in a distribution in a manner which could render them statutory underwriters and subject them to the prospectus delivery and liability provisions of the 1933 Act.

For example, a broker-dealer firm or its client may be deemed a statutory underwriter if it takes Creation Units after placing an order with Franklin Distributors, each fund's distributor, breaks them down into constituent shares, and sells such shares directly to customers, or if it chooses to couple the creation of a supply of new shares with an active selling effort involving solicitation of secondary market demand for shares. A determination of whether one is an underwriter for purposes of the 1933 Act must take into account all the facts and circumstances pertaining to the activities of the broker-dealer or its client in the particular case, and the examples mentioned above should not be considered a complete description of all the activities that 12 could lead to a categorization as an underwriter.

Broker-dealer firms should also note that dealers who are not "underwriters," but are effecting transactions in shares of a fund, whether or not participating in the distribution of shares, are generally required to deliver a prospectus. This is because the prospectus delivery exemption in Section 4(a)(3) of the 1933 Act is not available in respect of such transactions as a result of Section 24(d) of the 1940 Act. As a result, broker-dealer firms should note that dealers who are not underwriters but are participating in a distribution (as opposed to engaging in ordinary secondary market transactions) and thus dealing with the shares that are part of an overallotment within the meaning of Section 4(a)(3)(A) of the 1933 Act would be unable to take advantage of the prospectus delivery exemption provided by Section 4(a)(3) of the 1933 Act. Firms that incur a prospectus-delivery obligation with respect to shares of each fund are reminded that, under Rule 153 under the 1933 Act, a prospectus-delivery obligation under Section 5(b)(2) of the 1933 Act owed to an exchange member in connection with a sale on an exchange is satisfied by the fact that the prospectus is available from the exchange upon request. The prospectus delivery mechanism provided in Rule 153 is only available with respect to transactions on an exchange.

#### Listing and Trading
Shares of each fund have been approved for listing and trading on an exchange. Each fund's shares trade on an exchange at prices that may differ to some degree from their NAV. The listing exchange may remove a fund's shares from listing if, among other things (i) following the initial 12-month period beginning upon the commencement of trading of the fund, there are fewer than 50 beneficial owners of the fund's shares ; (ii) the listing exchange becomes aware that the fund is no longer eligible to operate in reliance on Rule 6c-11 under the 1940 Act; (iii) the fund no longer complies with certain listing exchange rules; or (iv) such other event shall occur or condition exists that, in the opinion of the listing exchange, makes further dealings on the exchange inadvisable.

The listing exchange will remove a fund's shares from listing and trading upon termination of the trust. There can be no assurance that the requirements of the listing exchange necessary to maintain the listing of the fund's shares will continue to be met. As in the case of other publicly-traded securities, brokers' commissions on transactions will be based on negotiated commission rates at customary levels. The existence of a liquid trading market for certain securities may depend on whether dealers will make a market in such securities. There can be no assurance that such a market will be made or maintained or that any such market will be or remain liquid. The price at which securities may be sold and the value of the fund's shares will be adversely affected if trading markets for the fund's portfolio securities are limited or absent, or if bid/ask spreads are wide.

#### TAXES
The following discussion of U.S. federal income tax consequences is based on the Code, existing U.S. Treasury regulations, and other applicable authority, as of the date of this SAI. These authorities are subject to change by legislative or administrative action, possibly with retroactive effect. The following discussion is only a summary of some of the important U.S. federal income tax considerations generally applicable to investments in the fund. There may be other tax considerations applicable to particular

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shareholders. Shareholders should consult their own tax advisors regarding their particular situation and the possible application of foreign, state and local tax laws.

**Taxation of the fund.** The fund has elected and intends to qualify each year as a regulated investment company under Subchapter M of the Code. In order to qualify for the special tax treatment accorded regulated investment companies and their shareholders, the fund must, among other things:

(a) derive at least 90% of its gross income for each taxable year from (i) dividends, interest, payments with respect to certain securities loans, and gains from the sale or other disposition of stock, securities or foreign currencies, or other income (including but not limited to gains from options, futures, or forward contracts) derived with respect to its business of investing in such stock, securities or currencies, and (ii) net income from interests in "qualified publicly traded partnerships" (as defined below);

(b) diversify its holdings so that, at the end of each quarter of the fund's taxable year, (i) at least 50% of the market value of the fund's total assets is represented by cash and cash items (including receivables), U.S. government securities, securities of other regulated investment companies, and other securities limited in respect of any one issuer to a value not greater than 5% of the value of the fund's total assets and not more than 10% of the outstanding voting securities of such issuer, and (ii) not more than 25% of the value of the fund's total assets is invested, including through corporations in which the fund owns a 20% or more voting stock interest, (x) in the securities (other than those of the U.S. government or other regulated investment companies) of any one issuer or of two or more issuers which the fund controls and which are engaged in the same, similar, or related trades or businesses, or (y) in the securities of one or more qualified publicly traded partnerships (as defined below); and

(c) distribute with respect to each taxable year at least 90% of the sum of its investment company taxable income (as that term is defined in the Code without regard to the deduction for dividends paid—generally, taxable ordinary income and the excess, if any, of net short-term capital gains over net long-term capital losses) and net tax-exempt interest income, for such year.

In general, for purposes of the 90% gross income requirement described in paragraph (a) above, income derived from a partnership will be treated as qualifying income only to the extent such income is attributable to items of income of the partnership which would be qualifying income if realized by the regulated investment company. However, 100% of the net income of a regulated investment company derived from an interest in a "qualified publicly traded partnership" (defined as a partnership (i) interests in which are traded on an established securities market or readily tradable on a secondary market or the substantial equivalent thereof, and (ii) that derives less than 90% of its income from the qualifying income described in paragraph (a)(i) above) will be treated as qualifying income. In general, such entities will be treated as partnerships for federal income tax purposes because they meet the passive income requirement under Code section 7704(c)(2). In addition, although in general the passive loss rules of the Code do not apply to regulated investment companies, such rules do apply to a regulated investment company with respect to items attributable to an interest in a qualified publicly traded partnership.

For purposes of the diversification test in paragraph (b) above, identification of the issuer (or, in some cases, issuers) of a particular fund investment will depend on the terms and conditions of that investment. In some cases, identification of the issuer (or issuers) is uncertain under current law, and an adverse determination or future guidance by the IRS with respect to issuer identification for a particular type of investment may adversely affect the fund's ability to meet the diversification test in (b) above. Also, for the purposes of the diversification test in paragraph (b) above, the term "outstanding voting securities of such issuer" will include the equity securities of a qualified publicly traded partnership.

If the fund qualifies as a regulated investment company that is accorded special tax treatment, the fund will not be subject to U. S. federal income tax on income or gains distributed in a timely manner to its shareholders in the form of dividends (including Capital Gain Dividends, as defined below).

If the fund were to fail to meet the income, diversification or distribution test described above, the fund could in some cases cure such failure, including by paying a fund-level tax, paying interest, making additional distributions, or disposing of certain assets. If the fund were ineligible to or otherwise did not cure such failure for any year, or were otherwise to fail to qualify as a regulated investment company accorded special tax treatment in any taxable year, the fund would be subject to tax on its taxable income at corporate rates, and all distributions from earnings and profits, including any distributions of net tax-exempt income and net long-term capital gains, would be taxable to shareholders as ordinary income. Some portions of such distributions may be eligible for the dividends received deduction in the case of corporate shareholders, and may be eligible to be treated as "qualified dividend income" in the case of shareholders taxed as individuals, provided, in both cases, that the shareholder meets certain holding period and other requirements in respect of the fund's shares (as described below). In addition, the fund could be

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required to recognize unrealized gains, pay substantial taxes and interest and make substantial distributions before requalifying as a regulated investment company that is accorded special tax treatment.

The fund intends to distribute at least annually to its shareholders all or substantially all of its investment company taxable income (computed without regard to the dividends-paid deduction) and its net tax-exempt income (if any). The fund may distribute its net capital gain (that is, the excess of net long-term capital gain over net short-term capital loss, in each case determined with reference to any loss carryforwards). Investment company taxable income (which is retained by the fund) will be subject to tax at regular corporate rates. The fund may also retain for investment its net capital gain. If the fund retains any net capital gain, it will be subject to tax at regular corporate rates on the amount retained, but may designate the retained amount as undistributed capital gains in a notice to its shareholders who will be (i) required to include in income for U.S. federal income tax purposes, as long-term capital gain, their shares of such undistributed amount, and (ii) entitled to credit their proportionate shares of the tax paid by the fund on such undistributed amount against their U.S. federal income tax liabilities, if any, and to claim refunds on a properly-filed U.S. tax return to the extent the credit exceeds such liabilities. If the fund makes this designation, for U.S. federal income tax purposes, the tax basis of shares owned by a shareholder of the fund will be increased by an amount equal to the difference between the amount of undistributed capital gains included in the shareholder's gross income under clause (i) of the preceding sentence and the tax deemed paid by the shareholder under clause (ii) of the preceding sentence. The fund is not required to, and there can be no assurance the fund will, make this designation if it retains all or a portion of its net capital gain in a taxable year.

In determining its net capital gain, including in connection with determining the amount available to support a Capital Gain Dividend (as defined below), its taxable income and its earnings and profits, a regulated investment company generally may also elect to treat part or all of any post-October capital loss (defined as any net capital loss attributable to the portion, if any, of the taxable year after October 31 or, if there is no such loss, the net long-term capital loss or net short-term capital loss attributable to any such portion of the taxable year) or late-year ordinary loss (generally, the sum of its (i) net ordinary loss, if any, from the sale, exchange or other taxable disposition of property, attributable to the portion, if any, of the taxable year after October 31, and its (ii) other net ordinary loss, if any, attributable to the portion, if any, of the taxable year after December 31) as if incurred in the succeeding taxable year.

If the fund fails to distribute in a calendar year at least an amount equal to the sum of 98% of its ordinary income for such year and 98.2% of its capital gain net income for the one-year period ending October 31 of such year, plus any retained amount from the prior year, the fund will be subject to a nondeductible 4% excise tax on the undistributed amounts. For these purposes, ordinary gains and losses from the sale, exchange, or other taxable disposition of property that would otherwise be properly taken into account after October 31 are treated as arising on January 1 of the following calendar year. For purposes of the excise tax, the fund will be treated as having distributed any amount on which it has been subject to corporate income tax in the taxable year ending within the calendar year. A dividend paid to shareholders in January of a year generally is deemed to have been paid by the fund on December 31 of the preceding year, if the dividend was declared and payable to shareholders of record on a date in October, November or December of that preceding year. The fund intends generally to make distributions sufficient to avoid imposition of the 4% excise tax, although there can be no assurance that it will be able to do so.

The fund distributes its net investment income and capital gains to shareholders as dividends at least annually to the extent required to qualify as a regulated investment company under the Code and generally to avoid U.S. federal income or excise tax. Provided it is not treated as a "personal holding company" for U.S. federal income tax purposes, the fund is permitted to treat the portion of redemption proceeds paid to redeeming shareholders that represents the redeeming shareholders' portion of the fund's accumulated earnings and profits as a dividend on the fund's tax return. This practice, which involves the use of tax equalization, will have the effect of reducing the amount of income and gains that the fund is required to distribute as dividends to shareholders in order for the fund to avoid U. S. federal income tax and excise tax. This practice may also reduce the amount of distributions required to be made to non-redeeming shareholders and the amount of any undistributed income will be reflected in the value of the shares of the fund; the total return on a shareholder's investment will not be reduced as a result of this distribution policy.

**Fund distributions.** Distributions from the fund (other than exempt-interest dividends, as discussed below) generally are taxable to shareholders as ordinary income to the extent derived from the fund's investment income and net short-term capital gains. Distributions are taxable whether shareholders receive them in cash or reinvest them in additional shares of the fund or other Putnam funds.

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Taxes on distributions of capital gains are determined by how long the fund owned (or is deemed to have owned) the investments that generated them, rather than how long a shareholder has owned his or her shares. In general, the fund will recognize long-term capital gain or loss on investments it has owned for more than one year, and short-term capital gain or loss on investments it has owned for one year or less. Tax rules can alter the fund's holding period in investments and thereby affect the tax treatment of gain or loss on such investments. Distributions of net capital gain that are properly reported by the fund as capital gain dividends ("Capital Gain Dividends") will be treated as long-term capital gains includible in net capital gain and taxed to individuals at reduced rates. The IRS and the Department of the Treasury have issued regulations that impose special rules in respect of Capital Gain Dividends received through partnership interests constituting "applicable partnership interests" under Section 1061 of the Code. Distributions from capital gains generally are made after applying any available capital loss carryforwards. Distributions of net short-term capital gain (as reduced by any net long-term capital loss for the taxable year) will be taxable to shareholders as ordinary income.

The Code generally imposes a 3.8% Medicare contribution tax on the net investment income of certain individuals, trusts and estates to the extent their income exceeds certain threshold amounts. For these purposes, "net investment income" generally includes, among other things, (i) distributions paid by the fund of net investment income and capital gains (other than exempt-interest dividends) as described herein, and (ii) any net gain from the sale, redemption, exchange or other taxable disposition of fund shares. Shareholders are advised to consult their tax advisers regarding the possible implications of this additional tax on their investment in the fund.

Distributions of investment income reported by the fund as "qualified dividend income" received by an individual will be taxed at the reduced rates applicable to net capital gain. In order for some portion of the dividends received by a fund shareholder to be qualified dividend income, the fund must meet holding period and other requirements with respect to some portion of the dividend-paying stocks in its portfolio and the shareholder must meet holding period and other requirements with respect to the fund's shares. In general, a dividend will not be treated as qualified dividend income (at either the fund or shareholder level) (1) if the dividend is received with respect to any share of stock held for fewer than 61 days during the 121-day period beginning on the date which is 60 days before the date on which such share becomes ex-dividend with respect to such dividend (or, in the case of certain preferred stock, 91 days during the 181-day period beginning 90 days before such date), (2) to the extent that the recipient is under an obligation (whether pursuant to a short sale or otherwise) to make related payments with respect to positions in substantially similar or related property, (3) if the recipient elects to have the dividend income treated as investment interest, or (4) if the dividend is received from a foreign corporation that is (a) not eligible for the benefits of a comprehensive income tax treaty with the United States (with the exception of dividends paid on stock of such a foreign corporation readily tradable on an established securities market in the United States) or (b) treated as a passive foreign investment company. Each fund, other than fixed-income and money market funds, generally expects to report eligible dividends as qualified dividend income.

In general, distributions of investment income reported by the fund as derived from qualified dividend income will be treated as qualified dividend income by a shareholder taxed as an individual provided the shareholder meets the holding period and other requirements described above with respect to such fund's shares. In any event, if the aggregate qualified dividends received by the fund during any taxable year are 95% or more of its gross income (excluding net long-term capital gain over net short-term capital loss), then 100% of the fund's dividends (other than dividends properly reported as Capital Gain Dividends) will be eligible to be treated as qualified dividend income.

Individuals (and certain other non-corporate entities) are generally eligible with respect to tax years beginning after December 31, 2017 and ending on or before December 31, 2025 for a 20% deduction with respect to taxable ordinary dividends from REITs and certain taxable income from publicly traded partnerships. Currently, regulated investment companies may pass through the 20% deduction to shareholders for REIT dividends, but not for income from publicly traded partnerships. Distributions by the fund to its shareholders that the fund properly reports as "section 199A dividends," as defined and subject to certain conditions described below, are treated as qualified REIT dividends in the hands of non-corporate shareholders.

Subject to future regulatory guidance to the contrary, distributions attributable to qualified publicly traded partnership income from a fund's investments in MLPs will ostensibly not qualify for the deduction available to non-corporate taxpayers in respect of such amounts received directly from an MLP.

In general, fixed-income and money market funds receive interest, rather than dividends, from their portfolio securities. As a result, it is not currently expected that any significant portion of such funds' distributions to shareholders will be derived from

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qualified dividend income. For information regarding qualified dividend income received from underlying funds, see "Funds of funds" below.

Certain distributions reported by a Fund as section 163(j) interest dividends may be treated as interest income by shareholders for purposes of the tax rules applicable to interest expense limitations under Code section 163(j). Such treatment by the shareholder is generally subject to holding period requirements and other potential limitations, although the holding period requirements are generally not applicable to dividends declared by money market funds and certain other funds that declare dividends daily and pay such dividends on a monthly or more frequent basis. The amount that a Fund is eligible to report as a Section 163(j) dividend for a tax year is generally limited to the excess of the Fund's business interest income over the sum of the Fund's (i) business interest expense and (ii) other deductions properly allocable to the Fund's business interest income.

In general, dividends of net investment income received by corporate shareholders of the fund will qualify for the dividends-received deduction generally available to corporations only to the extent of the amount of eligible dividends received by the fund from domestic corporations for the taxable year. A dividend received by the fund will not be treated as a dividend eligible for the dividends-received deduction (1) if it has been received with respect to any share of stock that the fund has held for less than 46 days (91 days in the case of certain preferred stock) during the 91-day period beginning on the date which is 45 days before the date on which such share becomes ex-dividend with respect to such dividend (during the 181-day period beginning 90 days before such date in the case of certain preferred stock) or (2) to the extent that the fund is under an obligation (pursuant to a short sale or otherwise) to make related payments with respect to positions in substantially similar or related property. Moreover, the dividends received deduction may otherwise be disallowed or reduced (1) if the corporate shareholder fails to satisfy the foregoing requirements with respect to its shares of the fund or (2) by application of various provisions of the Code (for instance, the dividends-received deduction is reduced in the case of a dividend received on debt-financed portfolio stock (generally, stock acquired with borrowed funds)). For information regarding eligibility for the dividends-received deduction of dividend income derived from an underlying fund, see "Funds of funds" below.

**Exempt-interest dividends.** A fund will be qualified to pay exempt-interest dividends to its shareholders if, at the close of each quarter of the fund's taxable year, at least 50% of the total value of the fund's assets consists of obligations the interest on which is exempt from federal income tax under Section 103(a) of the Code. In some cases, the fund may also pass through to its shareholders the tax-exempt character of any exempt-interest dividends it receives from underlying funds in which it invests (see "Funds of funds," below). Distributions that the fund reports as exempt-interest dividends are treated as interest excludable from shareholders' gross income for federal income tax purposes but may be taxable for federal alternative minimum tax ("AMT") purposes and for state and local purposes. If the fund intends to qualify to pay exempt-interest dividends, the fund may be limited in its ability to enter into taxable transactions involving forward commitments, repurchase agreements, financial futures and options contracts on financial futures, tax-exempt bond indices and other assets.

Part or all of the interest on indebtedness, if any, incurred or continued by a shareholder to purchase or carry shares of the fund paying exempt-interest dividends is not deductible. The portion of interest that is not deductible is equal to the total interest paid or accrued on the indebtedness, multiplied by the percentage of the fund's total distributions (not including distributions from net long-term capital gains) paid to the shareholder that are exempt-interest dividends. Under rules used by the IRS to determine when borrowed funds are considered used for the purpose of purchasing or carrying particular assets, the purchase of shares may be considered to have been made with borrowed funds even though such funds are not directly traceable to the purchase of shares.

In general, exempt-interest dividends, if any, attributable to interest received on certain private activity obligations and certain industrial development bonds will not be tax-exempt to any shareholders who are "substantial users" of the facilities financed by such obligations or bonds or who are "related persons" of such substantial users.

A fund that is qualified to pay exempt-interest dividends will notify its shareholders in a written statement of the portion of distributions for the taxable year that constitutes exempt-interest dividends.

Exempt-interest dividends may be taxable for purposes of the federal AMT. For individual shareholders, exempt-interest dividends that are derived from interest on private activity bonds that are issued after August 7, 1986 (other than a "qualified 501(c)(3) bond," as such term is defined in the Code) generally must be included in an individual's tax base for purposes of calculating the shareholder's liability for U.S. federal AMT. For taxable years beginning after December 31, 2017, corporations are no longer subject to the federal AMT.

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**Funds of funds.** If the fund invests in shares of underlying funds, a portion of its distributable income and gains will consist of distributions from the underlying funds and gains and losses on the disposition of shares of the underlying funds. To the extent that an underlying fund realizes net losses on its investments for a given taxable year, the fund will not be able to recognize its share of those losses (so as to offset distributions of net income or capital gains from other underlying funds) until and only to the extent that it disposes of shares of the underlying fund in a transaction qualifying for sale or exchange treatment or those losses reduce distributions required to be made by the underlying fund. Moreover, even when the fund does make such a disposition, a portion of its loss may be recognized as a long-term capital loss, which will not be treated as favorably for U.S. federal income tax purposes as a short-term capital loss or an ordinary deduction. In particular, the fund will not be able to offset any capital losses from its dispositions of underlying fund shares against its ordinary income (including distributions of any net short-term capital gains realized by an underlying fund).

In addition, in certain circumstances, the "wash sale" rules under Section 1091 of the Code may apply to the fund's sales of underlying fund shares that have generated losses. A wash sale occurs if shares of an underlying fund are sold by the fund at a loss and the fund acquires additional shares of that same underlying fund 30 days before or after the date of the sale. The wash-sale rules could defer losses in the fund's hands on sales of underlying fund shares (to the extent such sales are wash sales) for extended (and, in certain cases, potentially indefinite) periods of time.

As a result of the foregoing rules, and certain other special rules, the amounts of net investment income and net capital gains that the fund will be required to distribute to shareholders may be greater than such amounts would have been had the fund invested directly in the securities held by the underlying funds, rather than investing in shares of the underlying funds. For similar reasons, the amount or timing of distributions from the fund qualifying for treatment as being of a particular character (e.g., as long-term capital gain, exempt interest, eligible for dividends-received deduction, etc.) will not necessarily be the same as it would have been had the fund invested directly in the securities held by the underlying funds.

If the fund receives dividends from an underlying fund that qualifies as a regulated investment company, and the underlying fund reports such dividends as "qualified dividend income," then the fund may, in turn, report a portion of its distributions as "qualified dividend income" as well, provided the fund meets the holding period and other requirements with respect to shares of the underlying fund.

If the fund receives dividends from an underlying fund and the underlying fund reports such dividends as eligible for the dividends-received deduction, then the fund is permitted, in turn, to designate a portion of its distributions as eligible for the dividends-received deduction, provided the fund meets the holding period and other requirements with respect to shares of the underlying fund.

If the fund were to own 20% or more of the voting interests of an underlying fund, subject to a safe harbor in respect of certain fund of funds arrangements, the fund would be required to "look through" the underlying fund to its holdings and combine the appropriate percentage (as determined pursuant to the applicable Treasury Regulations) of the underlying fund's assets with the fund's assets for purposes of satisfying the 25% diversification test described above.

If, at the close of each quarter of the fund's taxable year, at least 50% of its total assets consists of interests in other regulated investment companies (such fund, a "qualified fund of funds"), the fund will be permitted to distribute exempt-interest dividends and thereby pass through to its shareholders the tax-exempt character of any exempt-interest dividends it receives from underlying funds in which it invests, or interest on any tax-exempt obligations in which it directly invests, if any. For further information regarding exempt-interest dividends, see "Exempt-interest dividends," above.

If the fund is a qualified fund of funds, the fund will be entitled to elect to pass through to its shareholders a credit or deduction for foreign taxes (if any) borne in respect of foreign securities income earned by the fund, or by any underlying funds and passed through to the fund. If the fund so elects, shareholders will include in gross income from foreign sources their pro rata shares of such taxes, if any, treated as paid by the fund. Even if the fund is eligible to make such an election for a given year, it may determine not to do so. If the fund elects to pass through to its shareholders foreign tax credits or deductions, tax-exempt shareholders and those who invest in the fund through tax-advantaged accounts such as IRAs will not benefit from any such tax credit or deduction. See "Foreign taxes" below for more information.

**Derivatives, hedging and related transactions; certain exposure to commodities.** In general, option premiums received by the fund are not immediately included in the income of the fund. Instead, the premiums are recognized when the option contract expires, the option is exercised by the holder, or the fund transfers or otherwise terminates the option (*e.g.*, through a closing

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transaction). If a call option written by the fund is exercised and the fund sells or delivers the underlying stock, the fund generally will recognize capital gain or loss equal to (a) the sum of the strike price and the option premium received by the fund minus (b) the fund's basis in the stock. Such gain or loss generally will be short-term or long-term depending upon the holding period of the underlying stock. If securities are purchased by the fund pursuant to the exercise of a put option written by it, the fund generally will subtract the premium received for purposes of computing its cost basis in the securities purchased. Gain or loss arising in respect of a termination of the fund's obligation under an option other than through the exercise of the option will be short-term gain or loss depending on whether the premium income received by the fund is greater or less than the amount paid by the fund (if any) in terminating the transaction. Thus, for example, if an option written by the fund expires unexercised, the fund generally will recognize short-term gain equal to the premium received.

Certain covered call writing activities of the fund may trigger the U.S. federal income tax straddle rules contained primarily in Section 1092 of the Code. Very generally, where applicable, Section 1092 requires (i) that losses be deferred on positions deemed to be offsetting positions with respect to "substantially similar or related property," to the extent of unrealized gain in the latter, and (ii) that the holding period of such a straddle position that has not already been held for the long-term holding period be terminated and begin anew once the position is no longer part of a straddle. Options on single stocks that are not "deep in the money" may constitute qualified covered calls, which generally are not subject to the straddle rules; the holding period on stock underlying qualified covered calls that are "in the money" although not "deep in the money" will be suspended during the period that such calls are outstanding. Thus, the straddle rules and the rules governing qualified covered calls could cause gains that would otherwise constitute long-term capital gains to be treated as short-term capital gains, and distributions that would otherwise constitute "qualified dividend income" or qualify for the dividends-received deduction to fail to satisfy the holding period requirements and therefore to be taxed as ordinary income or to fail to qualify for the dividends-received deduction, as the case may be.

In general, 40% of the gain or loss arising from the closing out of a futures contract traded on an exchange approved by the Commodities Futures Trading Commission is treated as short-term gain or loss, and 60% is treated as long-term gain or loss, although certain foreign currency gains and losses from such contracts may be treated as ordinary in character. Also, such contracts held by the fund at the end of each taxable year (and, for purposes of the 4% excise tax, on certain other dates as prescribed under the Code) are "marked to market" with the result that unrealized gains or losses are treated as though they were realized and the resulting gain or loss is treated as ordinary or 60/40 gain or loss, as applicable.

The fund's investment in swaps, if any, will generate ordinary income and losses for federal income tax purposes. The fund's investments in futures and swaps may cause the fund to recognize income without receiving cash with which to make the distributions necessary to qualify and be eligible for treatment as a regulated investment company and avoid a fund-level tax. The fund may therefore need to liquidate other investments, including when it is not advantageous to do so, to meet its distribution requirement. The fund is not permitted to carry forward any net ordinary losses it realizes in a taxable year to offset ordinary income it realizes in subsequent taxable years.

In addition to the special rules described above in respect of options, futures transactions and swaps, the fund's derivative transactions, including transactions in options, futures contracts, straddles, securities loan and other similar transactions, including for hedging purposes, will be subject to special tax rules (including constructive sale, mark-to-market, straddle, wash sale, and short sale rules), the effect of which may be to accelerate income to the fund, defer losses to the fund, cause adjustments in the holding periods of the fund's securities, convert long-term capital gains into short-term capital gains, short-term capital losses into long-term capital losses, or capital gains into ordinary income. These rules could therefore affect the amount, timing and character of distributions to shareholders. The fund may make any applicable elections pertaining to such transactions consistent with the interests of the fund.

Because these and other tax rules applicable to these types of transactions are in some cases uncertain under current law, an adverse determination or future guidance by the IRS with respect to these rules (which determination or guidance could be retroactive) may affect whether the fund has made sufficient distributions, and otherwise satisfied the relevant requirements, to maintain its qualification as a regulated investment company and avoid a fund-level tax.

A fund's use of commodity-linked derivatives can be limited by the fund's intention to qualify as a regulated investment company and can bear on its ability to so qualify. Income and gains from certain commodity-linked derivatives do not constitute qualifying income to a regulated investment company for purposes of the 90% gross income test described above. The tax treatment of certain other commodity-linked derivative instruments in which the fund might invest is not certain, in particular with respect to whether income or gains from such instruments constitute qualifying income to a regulated investment company. If the fund were

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to treat income or gain from a particular instrument as qualifying income and the income or gain were later determined not to constitute qualifying income and, together with any other nonqualifying income, caused the fund's nonqualifying income to exceed 10% of its gross income in any taxable year, the fund would fail to qualify as a regulated investment company unless it is eligible to and does pay a tax at the fund level.

The tax rules are uncertain with respect to the treatment of income or gains arising in respect of commodity-linked exchange-traded notes ("ETNs") and certain commodity-linked structured notes; also, the timing and character of income or gains arising from ETNs can be uncertain. An adverse determination or future guidance by the IRS (which determination or guidance could be retroactive) may affect the fund's ability to qualify for treatment as a regulated investment company and to avoid a fund-level tax.

To the extent that, in order to achieve exposure to commodities, the fund invests in entities that are treated as pass-through vehicles for U.S. federal income tax purposes, including, for instance, certain ETFs (e.g., ETFs investing in gold bullion) and partnerships other than qualified publicly traded partnerships (as defined earlier), all or a portion of any income and gains from such entities could constitute non-qualifying income to the fund for purposes of the 90% gross income requirement described above. In such a case, the fund's investments in such entities could be limited by its intention to qualify as a regulated investment company and could bear on its ability to so qualify. Certain commodities-related ETFs may qualify as qualified publicly traded partnerships. In such cases, the net income derived from such investments will constitute qualifying income for purposes of the 90% gross income requirement. If, however, such a vehicle were to fail to qualify as a qualified publicly traded partnership in a particular year, a portion of the gross income derived from it in such year could constitute non-qualifying income to the fund for purposes of the 90% gross income requirement and thus could adversely affect the fund's ability to qualify as a regulated investment company for a particular year. In addition, the diversification requirement described above for regulated investment company qualification will limit the fund's investments in one or more vehicles that are qualified publicly traded partnerships to 25% of the fund's total assets as of the close of each quarter of the fund's taxable year.

Certain of the fund's investments in derivative instruments and foreign currency-denominated instruments, and any of the fund's transactions in foreign currencies and hedging activities, are likely to produce a difference between its book income and its taxable income. If such a difference arises, and the fund's book income is less than its taxable income (or, for tax-exempt funds, the sum of its net tax-exempt and taxable income), the fund could be required to make distributions exceeding book income to qualify as a regulated investment company that is accorded special tax treatment and to eliminate fund-level income tax. In the alternative, if the fund's book income exceeds the sum of its taxable income and tax-exempt income, the distribution (if any) of such excess will be treated as (i) a dividend to the extent of the fund's remaining earnings and profits (including earnings and profits arising from tax-exempt income), (ii) thereafter as a return of capital to the extent of the recipient's basis in the shares, and (iii) thereafter as gain from the sale or exchange of a capital asset.

**Investments in REITs.** The fund's investment in REIT equity securities may result in the fund's receipt of cash in excess of the REIT's earnings. If the fund distributes such amounts, such distribution could constitute a return of capital to the fund shareholders for U.S. federal income tax purposes. Dividends received by the fund from a REIT generally will not constitute qualified dividend income and will not qualify for the corporate dividends-received deduction.

Distributions by the fund to its shareholders that the fund properly reports as "section 199A dividends," as defined and subject to certain conditions described below, are treated as qualified REIT dividends in the hands of non-corporate shareholders. Non-corporate shareholders are permitted a federal income tax deduction equal to 20% of qualified REIT dividends received by them, subject to certain limitations. Very generally, a "section 199A dividend" is any dividend or portion thereof that is attributable to certain dividends received by a regulated investment company from REITs, to the extent such dividends are properly reported as such by the regulated investment company in a written notice to its shareholders. A section 199A dividend is treated as a qualified REIT dividend only if the shareholder receiving such dividend holds the dividend-paying regulated investment company shares for at least 46 days of the 91-day period beginning 45 days before the shares become ex-dividend, and is not under an obligation to make related payments with respect to a position in substantially similar or related property. A fund is permitted to report such part of its dividends as section 199A dividends as are eligible, but is not required to do so.

**Mortgage-related securities.** The fund may invest in REITs, including REITs that hold residual interests in real estate mortgage investment conduits ("REMICs") (including by investing in residual interests in collateralized mortgage obligations ("CMOs") with respect to which an election to be treated as a REMIC is in effect), REITs that are themselves taxable mortgage pools ("TMPs") or REITs that invest in TMPs. Under a notice issued by the IRS in October 2006 and Treasury regulations that have not yet been issued, but apply retroactively, a portion of the fund's income from a REIT that is attributable to the REIT's residual interest in a REMIC or TMP (referred to in the Code as an "excess inclusion") will be subject to U.S. federal income tax in all events. This

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notice also provides, and the regulations are expected to provide, that excess inclusion income of a regulated investment company, such as the fund, will be allocated to shareholders of the regulated investment company in proportion to the dividends received by such shareholders, with the same consequences as if the shareholders held the related REMIC or TMP residual interest directly. As a result, a fund investing in such interests may not be a suitable investment for charitable remainder trusts, as noted below.

In general, excess inclusion income allocated to shareholders (i) cannot be offset by net operating losses (subject to a limited exception for certain thrift institutions), (ii) will constitute unrelated business taxable income ("UBTI") to entities (including a qualified pension plan, an individual retirement account, a 401(k) plan, a Keogh plan or other tax-exempt entity) subject to tax on UBTI, thereby potentially requiring such an entity that is allocated excess inclusion income, and otherwise might not be required to file a tax return, to file a tax return and pay tax on such income, and (iii) in the case of a non-U.S. shareholder, will not qualify for any reduction in U.S. federal withholding tax. A shareholder will be subject to U.S. federal income tax on such inclusions notwithstanding any exemption from such income tax otherwise available under the Code. Any investment in residual interests of CMO that has elected to be treated as a REMIC can create complex tax problems, especially if the fund has state or local governments or other tax-exempt organizations as shareholders.

Income of a fund that would be UBTI if earned directly by a tax-exempt entity generally will not constitute UBTI when distributed to a tax-exempt shareholder of the fund. Notwithstanding the foregoing, a tax-exempt shareholder will recognize UBTI by virtue of its investment in the fund if shares in the fund constitute debt-financed property in the hands of the tax-exempt shareholder within the meaning of Code Section 514(b). Furthermore, a tax-exempt shareholder may recognize UBTI if the fund recognizes excess inclusion income derived from direct or indirect investments in REMIC residual interests or TMPs if the amount of such income recognized by the fund exceeds the fund's investment company taxable income (after taking into account deductions for dividends paid by the fund).

Under legislation enacted in December 2006, a charitable remainder trust ("CRT"), as defined in Section 664 of the Code, that realizes UBTI for a taxable year must pay an excise tax annually of an amount equal to such UBTI. Under IRS guidance issued in October 2006, a CRT will not recognize UBTI solely as a result of investing in a fund that recognizes excess inclusion income. Rather, if at any time during any taxable year a CRT (or one of certain other tax-exempt shareholders, such as the United States, a state or political subdivision, or an agency or instrumentality thereof, and certain energy cooperatives) is a record holder of a share in a fund that recognizes excess inclusion income, then the fund will be subject to a tax on that portion of its excess inclusion income for the taxable year that is allocable to such shareholders at the highest federal corporate income tax rate. The extent to which this IRS guidance remains applicable in light of the December 2006 legislation is unclear. To the extent permitted under the 1940 Act, the fund may elect to specially allocate any such tax to the applicable CRT, or other shareholder, and thus reduce such shareholder's distributions for the year by the amount of the tax that relates to such shareholder's interest in the fund. CRTs and other tax-exempt investors are urged to consult their tax advisors concerning the consequences of investing in the fund.

**Return of capital distributions**. If the fund makes a distribution in and with respect to any taxable year to a shareholder in excess of the fund's current and accumulated earnings and profits, the excess distribution will be treated as a return of capital to the extent of such shareholder's tax basis in its shares, and thereafter as capital gain. A return of capital is not taxable, but it reduces a shareholder's tax basis in its shares, thus reducing any loss or increasing any gain on a subsequent taxable disposition by the shareholder of its shares.

Dividends and distributions on the fund's shares generally are subject to federal income tax as described herein to the extent they do not exceed the fund's realized income and gains, even though such dividends and distributions may economically represent a return of a particular shareholder's investment. Such distributions are likely to occur in respect of shares purchased at a time when the fund's net asset value reflects gains that are either unrealized, or realized but not distributed. Such realized income and gains may be required to be distributed even when the fund's net asset value also reflects unrealized losses. Distributions are taxable to a shareholder even if they are paid from income or gains earned by the fund prior to the shareholder's investment (and thus included in the price paid by the shareholder).

**Securities issued or purchased at a discount.** Some debt obligations with a fixed maturity date of more than one year from the date of issuance (and zero-coupon debt obligations with a fixed maturity date of more than one year from the date of issuance) that are acquired by the fund will be treated as debt obligations that are issued originally at a discount. Generally, the amount of the original issue discount ("OID") is treated as interest income and is included in the fund's income (and required to be distributed by the fund) over the term of the debt security, even though payment of that amount is not received until a later time, upon partial or full repayment or disposition of the debt security. In addition, payment-in-kind securities will give rise to

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income which is required to be distributed and is taxable even though the fund holding the security receives no interest payment in cash on the security during the year.

Some debt obligations with a fixed maturity date of more than one year from the date of issuance that are acquired by the fund in the secondary market may be treated as having "market discount." Very generally, market discount is the excess of the stated redemption price of a debt obligation (or in the case of an obligation issued with OID, its "revised issue price") over the purchase price of such obligation. Generally any gain recognized on the disposition of, and any partial payment of principal on, a debt security having market discount is treated as ordinary income to the extent the gain, or principal payment, does not exceed the "accrued market discount" on such debt security. Alternatively, the fund may elect to accrue market discount currently, in which case the fund will be required to include the accrued market discount in the fund's income (as ordinary income) and thus distribute it over the term of the debt security, even though payment of that amount is not received until a later time, upon partial or full repayment or disposition of the debt security. The rate at which the market discount accrues, and thus is included in the fund's income, will depend upon which of the permitted accrual methods the fund elects.

Some debt obligations with a fixed maturity date of one year or less from the date of issuance that are acquired by the fund may be treated as having "acquisition discount" (very generally, the excess of the stated redemption price over the purchase price) or OID. The fund will be required to include the acquisition discount or OID in income over the term of the debt security, even though payment of that amount is not received until a later time, usually when the debt security matures. The fund may make one or more of the elections applicable to debt obligations having acquisition discount or OID, which could affect the character and timing of recognition of income.

If the fund holds the foregoing kinds of obligations, or other obligations subject to special rules under the Code, it may be required to pay out as an income distribution each year an amount which is greater than the total amount of cash interest the fund actually received. Such distributions may be made from the cash assets of the fund or, if necessary, by disposition of portfolio securities including at a time when it may not be advantageous to do so. These dispositions may cause the fund to realize higher amounts of short-term capital gains (generally taxed to shareholders at ordinary income tax rates) and, in the event the fund realizes net capital gains from such transactions, its shareholders may receive a larger capital gain distribution than if the fund had not held such obligations.

**Securities purchased at a premium.** Very generally, where the fund purchases a bond at a price that exceeds the redemption price at maturity (*i*.*e*., a premium), the premium is amortizable over the remaining term of the bond. In the case of a taxable bond, if the fund makes an election applicable to all such bonds it purchases, which election is irrevocable without consent of the IRS, the fund reduces the current taxable income from the bond by the amortized premium and reduces its tax basis in the bond by the amount of such offset; upon the disposition or maturity of such bonds acquired on or after January 4, 2013, the fund is permitted to deduct any remaining premium allocable to a prior period. In the case of a tax-exempt bond, tax rules require the fund to reduce its tax basis by the amount of amortized premium.

**Higher-Risk obligations.** Investments in debt obligations that are at risk of or in default present special tax issues for the fund. Tax rules are not entirely clear about issues such as whether the fund should recognize market discount on a debt obligation and, if so, the amount of market discount the fund should recognize; when the fund may cease to accrue interest, OID or market discount, when and to what extent deductions may be taken for bad debts or worthless securities and how payments received on obligations in default should be allocated between principal and income. These and other related issues will be addressed by the fund when, as and if it invests in such obligations, in order to seek to ensure that it distributes sufficient income to preserve its status as a regulated investment company and does not become subject to U.S. federal income or excise tax.

**Capital loss carryforward.** Distributions from capital gains generally are made after applying any available capital loss carryforwards. Capital loss carryforwards are reduced to the extent they offset current-year net realized capital gains, whether the fund retains or distributes such gains. If a fund incurs or has incurred capital losses in excess of capital gains ("net capital losses"), those losses will be carried forward to one or more subsequent taxable years; any such carryforward losses will retain their character as short-term or long-term.

**Foreign taxes.** If more than 50% of the fund's assets at taxable year end consists of the securities of foreign corporations, the fund may elect to permit shareholders to claim a credit or deduction on their income tax returns for their pro rata portion of qualified taxes paid by the fund to foreign countries in respect of foreign securities the fund has held for at least the minimum period specified in the Code. A qualified fund of funds also may elect to pass through to its shareholders foreign taxes it has paid or foreign taxes passed through to it by any underlying fund that itself elected to pass through such taxes to shareholders (see

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"Funds of funds" above). In such a case, shareholders will include in gross income from foreign sources their pro rata shares of such taxes. A shareholder's ability to claim a foreign tax credit or deduction in respect of foreign taxes paid by the fund may be subject to certain limitations imposed by the Code, as a result of which a shareholder may not get a full credit or deduction for the amount of such taxes. In particular, shareholders must hold their fund shares (without protection from risk of loss) on the ex-dividend date and for at least 15 additional days during the 30-day period surrounding the ex-dividend date to be eligible to claim a foreign tax credit with respect to a given dividend. Shareholders who do not itemize on their U.S. federal income tax returns may claim a credit (but no deduction) for such foreign taxes. Even if the fund is eligible to make such an election for a given year, it may determine not to do so. However, even if the fund elects to pass through to its shareholders foreign tax credits or deductions, tax-exempt shareholders and those who invest in the fund through tax-advantaged accounts such as IRAs will not benefit from any such tax credit or deduction.

**Passive foreign investment companies.** Investments treated as equity for federal income tax purposes in certain "passive foreign investment companies" ("PFICs", as defined below) could subject the fund to a U.S. federal income tax (including interest charges) on distributions received from the company or on the proceeds from the disposition of its investment in such a company. This tax cannot be eliminated by making distributions to fund shareholders; however, this tax can be avoided by making an election to mark such investments to market annually or to treat the passive foreign investment company as a "qualified electing fund." The QEF and mark-to-market elections may have the effect of accelerating the recognition of income (without the receipt of cash) and increasing the amount required to be distributed by the fund to avoid taxation. Making either of these elections therefore may require the fund to liquidate other investments to meet its distribution requirement, which may also accelerate the recognition of gain and affect the fund's total return. Dividends paid by PFICs will not be eligible to be treated as "qualified dividend income." If the fund indirectly invests in PFICs by virtue of the fund's investments in other funds, it may not make such PFIC elections; rather, the underlying funds directly investing in the PFICs would decide whether to make such elections.

Because it is not always possible to identify a foreign corporation as a PFIC, the fund may incur the tax and interest charges described above in some instances.

A PFIC is any foreign corporation: (i) 75 percent or more of the income of which for the taxable year is passive income, or (ii) the average percentage of the assets of which (generally by value, but by adjusted tax basis in certain cases) that produce or are held for the production of passive income is at least 50 percent. Generally, passive income for this purpose means dividends, interest (including income equivalent to interest), royalties, rents, annuities, the excess of gains over losses from certain property transactions and commodities transactions, and foreign currency gains. Passive income for this purpose does not include rents and royalties received by the foreign corporation from active business and certain income received from related persons.

**Foreign currency-denominated transactions and related hedging transactions.** The fund's transactions in foreign currencies, foreign currency-denominated debt obligations and certain foreign currency options, futures contracts and forward contracts (and similar instruments) may give rise to ordinary income or loss to the extent such income or loss results from fluctuations in the value of the foreign currency concerned. Any such net gains could require a larger dividend toward the end of the calendar year. Any such net losses generally will reduce and potentially require the recharacterization of prior ordinary income distributions. Such ordinary income treatment may accelerate fund distributions to shareholders and increase the distributions taxed to shareholders as ordinary income. Any net ordinary losses so created cannot be carried forward by the fund to offset income or gains earned in subsequent taxable years.

**Saleor exchange of shares.** The sale or exchange of fund shares may give rise to a gain or loss. In general, any gain or loss realized upon a taxable disposition of shares will be treated as long-term capital gain or loss if the shares have been held for more than 12 months. Otherwise the gain or loss on the sale or exchange of fund shares will be treated as short-term capital gain or loss. However, if a shareholder sells shares at a loss within six months of purchase, any loss generally will be disallowed for federal income tax purposes to the extent of any exempt-interest dividends received on such shares. This loss disallowance, however, does not apply with respect to dispositions of fund shares held for six months or less with respect to a regular exempt-interest dividend paid by the fund if such fund declares substantially all of its net tax-exempt income as exempt-interest dividends on a daily basis, and pays such dividends at least on a monthly basis. In addition, any loss (not already disallowed as provided in the preceding sentences) realized upon a taxable disposition of shares held for six months or less will be treated as long-term, rather than short-term, to the extent of any Capital Gain Dividends received (or deemed received) by the shareholder with respect to the shares. All or a portion of any loss realized upon a taxable disposition of fund shares will be disallowed if other shares of the same fund are purchased within 30 days before or after the disposition. In such a case, the basis of the newly purchased shares will be adjusted to reflect the disallowed loss.

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**Taxes on purchase and redemption of creation units**. Authorized Participants that are "dealers in securities" for U.S. federal income tax purposes are subject to different rules with respect to holding, acquiring and disposing of securities, including Creation Units. Authorized Participants should consult their own tax advisor with respect to transactions with a fund.

An Authorized Participant who exchanges securities for Creation Units generally will recognize a gain or a loss equal to the difference between the market value of the Creation Units at the time of the exchange and the sum of the exchanger's aggregate basis in the securities surrendered plus any Cash Component it pays. An Authorized Participant who exchanges Creation Units for securities will generally recognize a gain or loss equal to the difference between the exchanger's basis in the Creation Units and the sum of the aggregate market value of the securities received plus any cash equal to the difference between the NAV of the shares being redeemed and the value of the securities. The IRS, however, may assert that a loss realized upon an exchange of securities for Creation Units cannot be deducted currently under the rules governing "wash sales" (for a person who does not mark-to-market its portfolio) or on the basis that there has been no significant change in economic position. Persons exchanging securities should consult their own tax advisor with respect to whether wash sale rules apply and when a loss might be deductible.

Any capital gain or loss realized upon the creation of Creation Units will generally be treated as long-term capital gain or loss if the securities exchanged for such Creation Units have been held for more than one year. Any capital gain or loss realized upon redemption of Creation Units is generally treated as long-term capital gain or loss if the shares have been held for more than one year and as short-term capital gain or loss if the shares have been held for one year or less. Any loss upon a redemption of Creation Units held for six months or less will be treated as a long-term capital loss to the extent of any amounts treated as distributions to the applicable Authorized Participant of long-term capital gain with respect to the Creation Units (including any amounts credited to the Authorized Participant as undistributed capital gains). In addition, any loss realized upon a redemption of fund shares held by an Authorized Participant for six months or less generally will be disallowed, to the extent of any exempt-interest dividends received by the Authorized Participant with respect to the shares.

The fund has the right to reject an order for a purchase of shares of the fund if the purchaser (or group of purchasers) would, upon obtaining the shares so ordered, own 80% or more of the outstanding shares of the fund and if, pursuant to Section 351 of the Code, the fund would have a basis in the securities contributed by such purchaser different from the market value of such securities on the date of deposit. The fund also has the right to require information necessary to determine beneficial share ownership for purposes of the 80% determination.

**Cost basis reporting.** Upon the redemption or exchange of a shareholder's shares in the fund, the fund, or, if such shareholder's shares are then held through a financial intermediary, the financial intermediary, will be required to provide the shareholder and the IRS with cost basis and certain other related tax information about the fund shares the shareholder redeemed or exchanged. This cost basis reporting requirement is effective for shares purchased, including through dividend reinvestment, on or after January 1, 2012. Shareholders should consult their financial representatives for more information regarding available methods for cost basis reporting and how to select a particular method. Shareholders should consult their tax advisors to determine which available cost basis method is best for them.

**Shares purchased through tax-qualified plans.** Special tax rules apply to investments through employer-sponsored retirement plans and other tax-qualified plans or tax-advantaged arrangements. Shareholders should consult their tax advisors to determine the suitability of shares of the fund as an investment through such plans and arrangements and the precise effect of an investment on their particular tax situation.

**Backup withholding.** The fund generally is required to withhold and remit to the U.S. Treasury a percentage of the taxable dividends and other distributions paid to any individual shareholder who fails to furnish the fund with a correct taxpayer identification number (TIN), who has under-reported dividends or interest income, or who fails to certify to the fund that he or she is not subject to such withholding. The backup withholding rules may also apply to distributions that are properly reported as exempt-interest dividends. Backup withholding is not an additional tax. Any amounts withheld may be credited against the shareholder's U.S. federal income tax liability, provided the appropriate information is furnished to the IRS.

In order for a foreign investor to qualify for exemption from the backup withholding tax rates and for reduced withholding tax rates under income tax treaties, the foreign investor must comply with special certification and filing requirements. Foreign investors in a fund should consult their tax advisors in this regard.

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**Tax shelter reporting regulations.** Under U.S. Treasury regulations, if a shareholder recognizes a loss on disposition of fund shares of at least $2 million in any single taxable year or $4 million in any combination of taxable years for an individual shareholder or $10 million in any single taxable year or $20 million in any combination of taxable years for a corporate shareholder, the shareholder must file with the IRS a disclosure statement on Form 8886. Direct shareholders of portfolio securities are in many cases excepted from this reporting requirement, but under current guidance, shareholders of a regulated investment company are not excepted. Future guidance may extend the current exception from this reporting requirement to shareholders of most or all regulated investment companies. The fact that a loss is reportable under these regulations does not affect the legal determination of whether the taxpayer's treatment of the loss is proper. Shareholders should consult their tax advisers to determine the applicability of these regulations in light of their individual circumstances.

**Non-U.S. shareholders.** Distributions by the fund to shareholders that are not "U.S. persons" within the meaning of the Code ("foreign shareholders") properly reported by the fund as (1) Capital Gain Dividends, (2) interest-related dividends, (3) short-term capital gain dividends, each as defined below and subject to certain conditions described below, and (4) exempt-interest dividends generally are not subject to withholding of U.S. federal income tax.

In general, the Code defines (1) "short-term capital gain dividends" as distributions of net short-term capital gains in excess of net long-term capital losses and (2) "interest-related dividends" as distributions from U.S. source interest income of types similar to those not subject to U.S. federal income tax if earned directly by an individual foreign shareholder, in each case to the extent such distributions are properly reported as such by the fund in a written notice to shareholders. The exceptions to withholding for Capital Gain Dividends and short-term capital gain dividends do not apply to (A) distributions to an individual foreign shareholder who is present in the United States for a period or periods aggregating 183 days or more during the year of the distribution and (B) distributions attributable to gain that is treated as effectively connected with the conduct by the foreign shareholder of a trade or business within the United States under special rules regarding the disposition of U.S. real property interests as described below. The exception to withholding for interest-related dividends does not apply to distributions to a foreign shareholder (A) that has not provided a satisfactory statement that the beneficial owner is not a U.S. person, (B) to the extent that the dividend is attributable to certain interest on an obligation if the foreign shareholder is the issuer or is a 10% shareholder of the issuer, (C) that is within certain foreign countries that have inadequate information exchange with the United States, or (D) to the extent the dividend is attributable to interest paid by a person that is a related person of the foreign shareholder and the foreign shareholder is a controlled foreign corporation. If the fund invests in other regulated investment companies that pay Capital Gain Dividends, short-term capital gain dividends or interest-related dividends to the fund, such distributions retain their character as not subject to withholding if properly reported when paid by the fund to foreign shareholders. The fund is permitted to report such part of its dividends as interest-related and/or short-term capital gain dividends as are eligible, but is not required to do so. In the case of shares held through an intermediary, the intermediary may withhold even if the fund reports all or a portion of a payment as an interest-related or short-term capital gain dividend to shareholders.

The fact that a fund achieves its goals by investing in underlying funds generally does not adversely affect the fund's ability to pass on to foreign shareholders the full benefit of the interest-related dividends and short-term capital gain dividends that it receives from its investments in underlying funds, except possibly to the extent that (1) interest-related dividends received by the fund are offset by deductions allocable to the fund's qualified interest income or (2) short-term capital gain dividends received by the fund are offset by the fund's net short- or long-term capital losses, in which case the amount of a distribution from the fund to a foreign shareholder that is properly reported as either an interest-related dividend or a short-term capital gain dividend, respectively, may be less than the amount that such shareholder would have received had they invested directly in the underlying funds.

Distributions by the fund to foreign shareholders other than Capital Gain Dividends, interest-related dividends, and short-term capital gain dividends and exempt-interest dividends (*e.g.*, dividends attributable to dividend and foreign-source interest income or to short-term capital gains or U.S.-source interest income to which the exception from withholding described above does not apply) are generally subject to withholding of U.S. federal income tax at a rate of 30% (or lower applicable treaty rate).

Under U.S. federal tax law, a beneficial holder of shares who is a foreign shareholder is not, in general, subject to U.S. federal income tax on gains (and is not allowed a deduction for losses) realized on the sale of shares of the fund, unless (i) such gain is effectively connected with the conduct of a trade or business carried on by such holder within the United States; (ii) in the case of an individual holder, the holder is present in the United States for a period or periods aggregating 183 days or more during the year of the sale and certain other conditions are met; or (iii) the special rules relating to gain attributable to the sale or exchange of "U.S. real property interests" ("USRPIs") apply to the foreign shareholder's sale of shares of the fund (as described below).

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If a beneficial holder who is a foreign shareholder has a trade or business in the United States, and the dividends are effectively connected with the conduct by the beneficial holder of a trade or business in the United States, the dividend will be subject to U.S. federal net income taxation at regular income tax rates and, in the case of a foreign corporation, may also be subject to a branch profits tax. If a foreign shareholder is eligible for the benefits of a tax treaty, any effectively connected income or gain will generally be subject to U.S. federal income tax on a net basis only if it is also attributable to a permanent establishment maintained by the shareholder in the United States. More generally, foreign shareholders who are residents in a country with an income tax treaty with the United States may obtain different tax results than those described herein, and are urged to consult their tax advisors.

Special rules would apply if the fund were a qualified investment entity ("QIE") because it is either a "U.S. real property holding corporation" ("USRPHC") or would be a USRPHC but for the operation of certain exceptions to the definition of USRPIs described below. Very generally, a USRPHC is a domestic corporation that holds USRPIs the fair market value of which equals or exceeds 50% of the sum of the fair market values of the corporation's USRPIs, interests in real property located outside the United States, and other trade or business assets. USRPIs generally are defined as any interest in U.S. real property and any interest (other than solely as a creditor) in a USRPHC or, very generally, an entity that has been a USRPHC in the last five years. A fund that holds, directly or indirectly, significant interests in REITs may be a USRPHC. Interests in domestically controlled QIEs, including regulated investment companies and REITs that are QIEs, not-greater-than-10% interests in publicly traded classes of stock in REITs and not-greater-than-5% interests in publicly traded classes of stock in regulated investment companies generally are not USRPIs, but these exceptions do not apply for purposes of determining whether a fund is a QIE.

If an interest in the fund were a USRPI, the fund would be required to withhold U.S. tax on the proceeds of a share redemption by a greater-than-5% foreign shareholder, in which case such foreign shareholder generally would also be required to file U.S. tax returns and pay any additional taxes due in connection with the redemption.

If the fund were a QIE under a special "look-through" rule, any distributions by the fund to a foreign shareholder (including, in certain cases, distributions made by the fund in redemption of its shares) attributable directly or indirectly to (i) distributions received by the fund from a lower-tier regulated investment company or REIT that the fund is required to treat as USRPI gain in its hands and (ii) gains realized on the disposition of USRPIs by the fund would retain their character as gains realized from USRPIs in the hands of the fund's foreign shareholders and would be subject to U.S. tax withholding. In addition, such distributions could result in the foreign shareholder being required to file a U.S. tax return and pay tax on the distributions at regular U.S. federal income tax rates. The consequences to a foreign shareholder, including the rate of such withholding and character of such distributions (*e.g.*, as ordinary income or USRPI gain), would vary depending upon the extent of the foreign shareholder's current and past ownership of the fund.

Foreign shareholders of the fund also may be subject to "wash sale" rules to prevent the avoidance of the tax-filing and -payment obligations discussed above through the sale and repurchase of fund shares.

Foreign shareholders should consult their tax advisers and, if holding shares through intermediaries, their intermediaries, concerning the application of these rules to their investment in the fund.

**Other reporting and withholding requirements**. Sections 1471-1474 of the Code and the U.S. Treasury and IRS guidance issued thereunder (collectively, "FATCA") generally require a fund to obtain information sufficient to identify the status of each of its shareholders under FATCA or under an applicable intergovernmental agreement (an "IGA") between the United States and a foreign government. If a shareholder fails to provide the requested information or otherwise fails to comply with FATCA or an IGA, the fund may be required to withhold under FATCA at a rate of 30% with respect to that shareholder on ordinary dividends it pays. The IRS and the Department of Treasury have issued proposed regulations providing that these withholding rules will not be applicable to the gross proceeds of share redemptions or Capital Gain Dividends the fund pays. If a payment by the fund is subject to FATCA withholding, the fund is required to withhold even if such payment would otherwise be exempt from withholding under the rules applicable to foreign shareholders described above (*e.g.*, short-term capital gain dividends and interest-related dividends).

Each prospective investor is urged to consult its tax advisor regarding the applicability of FATCA and any other reporting requirements with respect to the prospective investor's own situation, including investments through an intermediary.

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**General Considerations.** The U.S. federal income tax discussion set forth above is for general information only. Prospective investors should consult their tax advisers regarding the specific federal tax consequences of purchasing, holding, and disposing of shares of the fund, as well as the effects of state, local and foreign tax law and any proposed tax law changes.

#### MANAGEMENT

#### Trustees

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|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;**Name, Address<sup>1</sup>, Year<br>of Birth, Position(s)<br>Held with Fund and<br>Length of Service as a<br>Fund Trustee<sup>2</sup>** | **Principal Occupation(s) During<br>Past 5 Years** | **Number of Funds<br>in the Franklin<br>Templeton Funds<br>Complex<br>Overseen by<br>Trustee<sup>3</sup>** | **Other Directorships Held by Trustee** |
| &nbsp;&nbsp;&nbsp;**Liaquat Ahamed** (Born 1952), Trustee since 2012 | Author; won Pulitzer Prize for *Lords of Finance: The Bankers Who Broke the World.* | 102 | Chair of the Sun Valley Writers Conference, a literary not-for-profit organization; and a Trustee of the Journal of Philosophy.  |
| &nbsp;&nbsp;&nbsp;**Barbara M. Baumann** (Born 1955), Trustee since 2010, Vice Chair from 2022 to 2024, Chair since 2024 | President of Cross Creek Energy Corporation, a strategic consultant to domestic energy firms and direct investor in energy projects. | 102 | Director of Devon Energy Corporation, a publicly traded independent natural gas and oil exploration and production company; Director of National Fuel Gas Company, a publicly traded energy company that engages in the production, gathering, transportation, distribution and marketing of natural gas; Senior Advisor to the energy private equity firm First Reserve; member of the Finance Committee of the Children's Hospital of Colorado; member of the Investment Committee of the Board of The Denver Foundation; and previously a Director of publicly traded companies Buckeye Partners LP, UNS Energy Corporation, CVR Energy Company, and SM Energy Corporation.  |
| &nbsp;&nbsp;&nbsp;**Katinka Domotorffy** (Born 1975), Trustee since 2012 | Voting member of the Investment Committees of the Anne Ray Foundation and Margaret A. Cargill Foundation, part of the Margaret A. Cargill Philanthropies.  | 102 | Director of the Great Lakes Science Center and of College Now Greater Cleveland. |
| &nbsp;&nbsp;&nbsp;**Catharine Bond Hill** (Born 1954), Trustee since 2017 | Managing Director of Ithaka S+R, a not-for-profit service that helps the academic community navigate economic and technological change. From 2006 to 2016, Dr. Hill served as the 10th president of Vassar College. | 102 | Director of Yale-NUS College; and Trustee of Yale University. |
| &nbsp;&nbsp;&nbsp;**Gregory G. McGreevey** (Born 1962), Trustee | Until 2023, Senior Managing Director, Investments, Invesco | 102 | Previously, a Director of Invesco Mortgage Capital, Inc., a publicly traded  |

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| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;**Name, Address<sup>1</sup>, Year<br>of Birth, Position(s)<br>Held with Fund and<br>Length of Service as a<br>Fund Trustee<sup>2</sup>** | **Principal Occupation(s) During<br>Past 5 Years** | **Number of Funds<br>in the Franklin<br>Templeton Funds<br>Complex<br>Overseen by<br>Trustee<sup>3</sup>** | **Other Directorships Held by Trustee** |
| &nbsp;&nbsp;&nbsp;since 2024 | Ltd., a global investment firm. |  | real estate investment trust. |
| &nbsp;&nbsp;&nbsp;**\*Jennifer Williams Murphy** (Born 1964), Trustee since 2022 | Chief Executive Officer and Founder of Runa Digital Assets, LLC, an institutional investment advisory firm specializing in active management of digital assets. Until 2021, Chief Operating Officer of Western Asset Management, LLC, a global investment adviser, and Chief Executive Officer and President of Western Asset Mortgage Capital Corporation, a mortgage finance real estate investment trust.  | 102 | Previously, a Director of Western Asset Mortgage Capital Corporation. |
| &nbsp;&nbsp;&nbsp;**Marie Pillai** (Born 1954), Trustee since 2022 | Senior Advisor, Hunter Street Partners, LP, an asset-oriented private investment firm; Director of Choice Bank, a private, community bank based in North Dakota. Until 2019, Vice President, Chief Investment Officer and Treasurer of General Mills, Inc., a global food company. | 102 | Member of the Investment Committee of the Bush Foundation, a nonprofit organization supporting community problem-solving in Minnesota, North Dakota and South Dakota; Member of the Finance Council and Corporate Board of the Archdiocese of Saint Paul and Minneapolis; Member of the Curriculum Committee of the Center for Board Certified Fiduciaries, a public benefit corporation providing coursework for developing fiduciaries; previously a Board Member of Catholic Charities of St. Paul and Minneapolis; former Director of the Catholic Community Foundation of Minnesota; and former Investment Advisory Board Member of the University of Minnesota.  |
| &nbsp;&nbsp;&nbsp;**George Putnam III** (Born 1951), Trustee since 1984 | Chair of New Generation Research, Inc., a publisher of financial advisory and other research services, and President of New Generation Advisors, LLC, a registered investment adviser to private funds. | 102 | Director of The Boston Family Office, LLC, a registered investment adviser; a Director of the Gloucester Marine Genomics Institute; a Trustee of the Lowell Observatory Foundation; and previously a Trustee of the Marine Biological Laboratory.  |
| &nbsp;&nbsp;&nbsp;**Manoj P. Singh** (Born 1952), Trustee since 2017 | Until 2015, Chief Operating Officer and Global Managing Director at Deloitte Touche Tohmatsu, Ltd., a global professional services organization, serving on the Deloitte U.S. Board of Directors and the boards of Deloitte member | 102 | Director of ReNew Energy Global Plc, a publicly traded renewable energy company; Director of Abt Associates, a global research firm working in the fields of health, social and environmental policy, and international development; Trustee of Carnegie Mellon University; |

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| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;**Name, Address<sup>1</sup>, Year<br>of Birth, Position(s)<br>Held with Fund and<br>Length of Service as a<br>Fund Trustee<sup>2</sup>** | **Principal Occupation(s) During<br>Past 5 Years** | **Number of Funds<br>in the Franklin<br>Templeton Funds<br>Complex<br>Overseen by<br>Trustee<sup>3</sup>** | **Other Directorships Held by Trustee** |
|  | firms in China, Mexico and Southeast Asia. |  | Director of Pratham USA, an organization dedicated to children's education in India; member of the advisory board of Altimetrik, a business transformation and technology solutions firm; and Director of DXC Technology, a global IT services and consulting company.  |
| &nbsp;&nbsp;&nbsp;**Mona K. Sutphen** (Born 1967), Trustee since 2020 | Partner, Investment Strategies at The Vistria Group, a private investment firm focused on middle-market companies in the healthcare, education, and financial services industries. From 2014 to 2018, Partner at Macro Advisory Partners, a global consulting firm. | 102 | Director of Spotify Technology S.A., a publicly traded audio content streaming service; Director of Unitek Learning, a private nursing and medical services education provider in the United States; Board Member, International Rescue Committee; Co-Chair of the Board of Human Rights First; Trustee of Mount Holyoke College; member of the Advisory Board for the Center on Global Energy Policy at Columbia University's School of International and Public Affairs; previously Director of Pattern Energy and Pioneer Natural Resources, publicly traded energy companies; and previously Managing Director of UBS AG.  |
| &nbsp;&nbsp;&nbsp; **Interested Trustees** |  |  |  |
| &nbsp;&nbsp;&nbsp;**\*\*Robert L. Reynolds** (Born 1952), Trustee since 2008 | Chair of Great-West Lifeco U.S. LLC. Prior to 2019, also President and Chief Executive Officer of Great-West Financial, a financial services company that provides retirement savings plans, life insurance, and annuity and executive benefits products, and of Great-West Lifeco U.S. LLC, a holding company that owns Putnam Investments, LLC and Great-West Financial, and a member of Great-West Financial's Board of Directors. Until 2023, President and Chief Executive Officer of Putnam Investments, LLC, President and Chief Executive Officer of Putnam Management, and member of Putnam Investments' Board of Directors. | 102 | Director of the Concord Museum; Director of Dana-Farber Cancer Institute; Director of the U.S. Ski & Snowboard Foundation; Chair of the Boston Advisory Board of the American Ireland Fund; Council Co-Chair of the American Enterprise Institute; Member of U.S. Chamber of Commerce, Center for Capital Markets Competitiveness; Chair of Massachusetts High Technology Council; Member of the Chief Executives Club of Boston; Member of the Massachusetts General Hospital President's Council; Chairman of the Board of Directors of the Ron Burton Training Village; Director and former Chair of the Massachusetts Competitive Partnership; former Chair of the West Virginia University Foundation; and former Executive Committee Member of the Greater Boston Chamber of |

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| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;**Name, Address<sup>1</sup>, Year<br>of Birth, Position(s)<br>Held with Fund and<br>Length of Service as a<br>Fund Trustee<sup>2</sup>** | **Principal Occupation(s) During<br>Past 5 Years** | **Number of Funds<br>in the Franklin<br>Templeton Funds<br>Complex<br>Overseen by<br>Trustee<sup>3</sup>** | **Other Directorships Held by Trustee** |
|  |  |  | Commerce. |
| &nbsp;&nbsp;&nbsp;**\*\*\* Jane E. Trust** (Born 1962), Trustee since 2024 | Since 2020, Senior Vice President, Fund Board Management, Franklin Templeton. Since 2015, Officer and/or Trustee/Director of 123 funds associated with Franklin Templeton Fund Advisor, LLC ("FTFA") or its affiliates, and President and Chief Executive Officer of FTFA. From 2018 to 2020, Senior Managing Director of Legg Mason & Co., LLC ("Legg Mason & Co."). From 2016 to 2018, Managing Director of Legg Mason & Co. In 2015, Senior Vice President of FTFA.  | 225 | None. |

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<sup>1</sup> The address of each Trustee is 100 Federal Street, Boston, MA 02110.

<sup>2</sup> Each Trustee serves for an indefinite term, until his or her resignation, retirement during the year he or she reaches age 75, death or removal.

<sup>3</sup> The Franklin Templeton funds complex is composed of the registered investment companies advised by the Investment Manager or by its affiliates.

\* Ms. Murphy is the founder, controlling member, and Chief Executive Officer of Runa Digital Assets, LLC ("RDA"), the investment manager of Runa Digital Partners, LP ("RDP"), a private investment fund. Ms. Murphy also holds a controlling interest in RDP's general partner and is a limited partner in RDP. A subsidiary of Franklin Resources, Inc. ("Franklin Templeton") and certain individuals employed by Franklin Templeton or its affiliates have made passive investments as limited partners in RDP (one of whom serves on the advisory board for RDA, which has no governance or oversight authority over RDA), representing in the aggregate approximately 38% of RDP as of April 30, 2025. In addition, if certain conditions are met, Franklin Templeton will be entitled to receive a portion of any incentive compensation allocable to RDP's general partner. For so long as Franklin Templeton maintains its investment in RDP, Ms. Murphy also has agreed upon request to advise and consult with Franklin Templeton and its affiliates on the market for digital assets. Ms. Murphy provides similar service to other limited partners in RDP that request her advice. With regard to Ms. Murphy, the relationships described above may give rise to a potential conflict of interest with respect to the funds.

\*\* Trustee who is an "interested person" (as defined in the 1940 Act) of the fund and the Investment Manager. Mr. Reynolds is deemed an "interested person" by virtue of his position as an officer of the fund and his direct beneficial interest in shares of Franklin Templeton, of which the Investment Manager is an indirect wholly-owned subsidiary. Mr. Reynolds is the President of your fund and each of the other Putnam funds, and prior to January 1, 2024, Mr. Reynolds was President and Chief Executive Officer of Putnam Management and Putnam Investments, LLC ("Putnam Investments"), the previous parent company to Putnam Management.

\*\*\* Trustee who is an "interested person" (as defined in the 1940 Act) of the fund and the Investment Manager. Ms. Trust is deemed an "interested person" by virtue of her positions with certain affiliates of the Investment Manager.

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#### Trustee Qualifications
Each of the fund's Trustees, with the exception of Ms. Trust and Mr. McGreevey, was most recently elected by shareholders of the fund during 2022, although most of the Trustees have served on the Board for many years. The Board Policy and Nominating Committee is responsible for recommending proposed nominees for election to the full Board of Trustees for its approval. As part of its deliberative process, the Committee considers the experience, qualifications, skills and attributes, including diversity of background, experience, and views, that it determines would most benefit the funds overseen by the Board of Trustees at the time.

In recommending the election of the board members as Trustees, the Committee generally considered the educational, business and professional experience of each Trustee in determining his or her qualifications to serve as a Trustee of the fund, including the Trustee's record of service as a director or trustee of public and private organizations. (This included, but was not limited to, consideration of the specific experience noted in the preceding table.) In the case of most members of the Board, the Committee considered his or her previous service as a member of the Board of Trustees, which demonstrated a high level of diligence and commitment to the interests of fund shareholders and an ability to work effectively and collegially with other members of the Board.

The Committee also considered, among other factors, the particular attributes described below with respect to the various individual Trustees and considered the attributes as indicative of the person's ability to deal effectively with the types of financial, regulatory, and/or investment matters that typically arise in the course of a Trustee's work:

<u>Independent Trustees</u> 

Liaquat Ahamed -- Mr. Ahamed's experience as Chief Executive Officer of a major investment management organization and as head of the investment division at the World Bank, as well as his experience as an author of economic literature.

Barbara M. Baumann -- Ms. Baumann's experience in the energy industry as a consultant, an investor, and in both financial and operational management positions at a global energy company, and her service as a director of multiple NYSE companies.

Katinka Domotorffy -- Ms. Domotorffy's experience as Chief Investment Officer and Global Head of Quantitative Investment Strategies at a major asset management organization.

Catharine Bond Hill -- Dr. Hill's education and experience as an economist and as president and provost of colleges in the United States.

Gregory G. McGreevey -- Mr. McGreevey's experience as a Senior Managing Director of a global investment firm and as a director of a publicly traded real estate investment trust.

Jennifer Williams Murphy -- Ms. Murphy's experience as Chief Operating Officer of a major global investment management organization and as Chief Executive Officer of an investment advisory firm specializing in digital assets.

Marie Pillai -- Ms. Pillai's experience as Vice President, Chief Investment Officer, and Treasurer of a global food company, her experience in similar positions at a global engineering company, and her experience in corporate and operational finance roles at a global consumer products company.

George Putnam III -- Mr. Putnam's training and experience as an attorney, his experience as the founder and Chief Executive Officer of an investment management firm and his experience as an author of various publications on the subject of investments.

Manoj P. Singh -- Mr. Singh's experience as chief operating officer and global managing director of a global professional services organization that provided accounting, consulting, tax, risk management, and financial advisory services.

Mona K. Sutphen -- Ms. Sutphen's extensive experience advising corporate, philanthropic and institutional investors on the intersection of geopolitics, policy and markets, as well as her prior service as White House Deputy Chief of Staff for Policy and as a US Foreign Service Officer, her work advising financial services companies on macro risks, and her service as director of public companies.

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<u>Interested Trustees</u> 

Robert L. Reynolds -- Mr. Reynolds's extensive experience as a senior executive of a major mutual fund organization in the United States and his previous role as President and Chief Executive Officer of Putnam Management and Putnam Investments, LLC, the previous parent company to Putnam Management and PAC.

Jane E. Trust -- Ms. Trust's investment management and risk oversight experience as an executive and portfolio manager and leadership roles within Franklin Templeton and affiliated entities.

#### Officers
The other officers of the fund, in addition to Robert L. Reynolds, the fund's President, are shown below. All of the officers of your fund listed below are employees of the Investment Manager or its affiliates or are members of the Trustees' independent administrative staff.

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp; **Name, Address<sup>1</sup>, Year of Birth, Position(s)**<br> **Held with Fund** | **Length of Service**<br> **with the Putnam**<br> **Funds<sup>2</sup>**  | **Principal Occupation(s) During Past 5 Years and**<br> **Position(s) with Fund's Investment Adviser and**<br> **Distributor<sup>3</sup>**  |
| &nbsp;&nbsp;&nbsp; **Jonathan S. Horwitz<sup>4</sup>** (Born 1955)<br> Executive Vice President, Principal Executive Officer, and Compliance Liaison | Since 2004 | Executive Vice President, Principal Executive Officer, and Compliance Liaison, The Putnam Funds.  |
| &nbsp;&nbsp;&nbsp; **Stephen J. Tate** (Born 1974)<br> Vice President and Chief Legal Officer | Since 2021 | Deputy General Counsel, Franklin Templeton, and Secretary, Putnam U.S. Holdings I, LLC ("Putnam Holdings") and Putnam Management (2024 – Present). General Counsel and related positions, Putnam Investments, Putnam Management and Putnam Retail Management (2004-2023).  |
| &nbsp;&nbsp;&nbsp; **James F. Clark<sup>3</sup>** (Born 1974)<br> Vice President and Chief Compliance Officer | Since 2016 | Chief Compliance Officer, Putnam Holdings and Putnam Management (2016 – Present). Associate General Counsel, Putnam Investments, Putnam Management and Putnam Retail Management (2003-2015).  |
| &nbsp;&nbsp;&nbsp; **Michael J. Higgins<sup>4</sup>** (Born 1976)<br> Vice President, Treasurer, and Clerk <br>| Since 2010 | Vice President, Treasurer, and Clerk, The Putnam Funds. |
| &nbsp;&nbsp;&nbsp; **Kelley Hunt** (Born 1984)<br> AML Compliance Officer <br>| Since 2024 | Manager, U.S. Financial Crime Compliance, Franklin Templeton. |
| &nbsp;&nbsp;&nbsp; **Jeffrey White** (Born 1971)<br> Vice President, Principal Financial Officer, Principal Accounting Officer, and Assistant Treasurer <br>| Since 2024 | Vice President, Fund Administration and Reporting, Franklin Templeton. |
| &nbsp;&nbsp;&nbsp; **Denere P. Poulack<sup>4</sup>** (Born 1968)<br> Assistant Vice President, Assistant Clerk, and Assistant Treasurer <br>| Since 2004 | Assistant Vice President, Assistant Clerk, and Assistant Treasurer, The Putnam Funds. |

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<sup>1</sup> The address of each Officer, other than as noted below, is 100 Federal Street, Boston, MA 02110. Ms. Hunt's address is 100 Fountain Parkway, St. Petersburg, FL 33716. Mr. White's address is One Franklin Parkway, San Mateo, CA 94403.

<sup>2</sup> Each officer serves for an indefinite term, until his or her resignation, retirement, death or removal.

<sup>3</sup> Prior positions and/or officer appointments with the fund or the fund's investment adviser and distributor have been omitted.

<sup>4</sup> Officers of the fund indicated are members of the Trustees' independent administrative staff. Compensation for these individuals is fixed by the Trustees and reimbursed to the Investment Manager by the funds, except in certain cases where a fund has a unitary fee and/or expense limitation arrangement whereby the Investment Manager is responsible for all or a portion of these individuals' compensation.

Except as stated above, the principal occupations of the officers and Trustees for the last five years have been with the employers as shown above, although in some cases they have held different positions with such employers.

#### Leadership Structure and Standing Committees of the Board of Trustees
**For details regarding the number of times the standing committees of the Board of Trustees met during a fund's last fiscal year, see "Trustee responsibilities and fees" in Part I of this SAI.** 

**Board Leadership Structure**. Currently, 10 of the 12 Trustees of your fund are Independent Trustees, meaning that they are not considered "interested persons" of your fund or the Investment Manager. These Independent Trustees must vote separately to approve all financial arrangements and other agreements with the Investment Manager and other affiliated parties. The role of independent trustees has been characterized as that of a "watchdog" charged with oversight to protect shareholders' interests against overreaching and abuse by those who are in a position to control or influence a fund. Your fund's Independent Trustees meet regularly as a group in executive session (*i.e*., without representatives of the Investment Manager or its affiliates present). An Independent Trustee currently serves as chair of the Board.

Taking into account the number, the diversity and the complexity of the funds overseen by the Board and the aggregate amount of assets under management, your fund's Trustees have determined that the efficient conduct of the Board's affairs makes it desirable to delegate responsibility for certain specific matters to committees of the Board. The Executive Committee, Audit, Compliance and Risk Committee, and Board Policy and Nominating Committee are authorized to take action on certain matters as specified in their charters or in policies and procedures relating to the governance of the funds; with respect to other matters, these committees review and evaluate and make recommendations to the Trustees as they deem appropriate. The other committees also review and evaluate matters specified in their charters and make recommendations to the Trustees as they deem appropriate. Each committee may utilize the resources of your fund's independent staff, counsel and independent registered public accountants as well as other experts. The committees meet as often as appropriate, either in conjunction with regular meetings of the Trustees or otherwise. The membership and chair of each committee are appointed by the Trustees upon recommendation of the Board Policy and Nominating Committee. Each committee is chaired by an Independent Trustee and, except as noted below, the membership and chairs of each committee consist exclusively of Independent Trustees.

The Trustees have determined that this committee structure also allows the Board to focus more effectively on the oversight of risk as part of its broader oversight of the fund's affairs. While risk management is the primary responsibility of the Investment Manager, the Trustees receive reports regarding investment risks, compliance risks and other risks. The Board and certain committees also meet periodically with the funds' Chief Compliance Officer to receive compliance reports. In addition, the Board and its Investment Oversight Committees meet periodically with the portfolio managers of the funds to receive reports regarding the management of the funds. The Board's committee structure allows separate committees to focus on different aspects of these risks and their potential impact on some or all of the funds and to discuss with the Investment Manager how it monitors and controls risks.

The Board recognizes that the reports it receives concerning risk management matters are, by their nature, typically summaries of the relevant information. Moreover, the Board recognizes that not all risks that may affect your fund can be identified in advance; that it may not be practical or cost effective to eliminate or to mitigate certain risks; that it may be necessary to bear certain risks (such as investment-related risks) in seeking to achieve your fund's investment objectives; and that the processes,

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procedures and controls employed to address certain risks may be limited in their effectiveness. As a result of the foregoing and for other reasons, the Board's risk management oversight is subject to substantial limitations.

**Audit, Compliance and Risk Committee**. The Audit, Compliance and Risk Committee provides oversight on matters relating to the integrity of the funds' financial statements, compliance with legal and regulatory requirements, the performance of each fund's internal audit function, Codes of Ethics issues, and certain aspects of overseeing the Investment Manager's risk assessment and risk management. This oversight is discharged by regularly meeting with management and the funds' independent registered public accountants and remaining current with respect to industry developments. Duties of this Committee also include the review and evaluation of all matters and relationships pertaining to the funds' independent registered public accountants, including their independence, and the review of the Investment Manager's oversight of the funds' significant other service providers (unless another committee, or the Board, has this responsibility). The Committee also oversees all dividends and distributions by the funds by making recommendations to the Trustees regarding the amount and timing of dividends and distributions paid by the funds, and determining such matters when the Trustees are not in session. The Committee also oversees the policies and procedures pursuant to which the Investment Manager prepares recommendations for dividends and distributions, and meets regularly with representatives of the Investment Manager to review the implementation of these policies and procedures. The Committee reports to the Trustees and makes recommendations to the Trustees regarding these matters.

The Committee also oversees the valuation of assets of the funds overseen by the Board of Trustees and reviews the funds' policies and procedures for achieving accurate and timely pricing of fund shares. The Committee oversees implementation of these policies, including fair value determinations of individual investments made by the Investment Manager or other designated agents of the funds. The Committee also reviews (i) compliance by money market funds with Rule 2a-7 under the 1940 Act, (ii) in-kind redemptions by fund affiliates, (iii) the correction of occasional pricing errors, and (iv) the Investment Manager's oversight of pricing vendors. The Committee reports to the Trustees and makes recommendations to the Trustees regarding these matters.

The members of the Committee include only Independent Trustees. Each member of the Committee also is "independent," as that term is interpreted for purposes of Rule 10A-3(b)(1) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and the listing standards of the NYSE. The Board has adopted a written charter for the Committee. The current members are Messrs. Singh (Chair) and McGreevey and Mses. Pillai and Sutphen.

**Board Policy and Nominating Committee.** The Board Policy and Nominating Committee reviews matters pertaining to the operations of the Board of Trustees and its Committees, the compensation of the Trustees and their staff, and the conduct of legal affairs for the funds. The Committee evaluates and recommends all candidates for election as Trustees and recommends the appointment of members and chairs of each board committee. The Committee will consider nominees for Trustee recommended by shareholders of a fund provided that such recommendations are submitted by the date disclosed in the fund's proxy statement and otherwise comply with applicable securities laws, including Rule 14a-8 under the Exchange Act. The Committee also reviews policy matters affecting the operation of the Board and its independent staff. In addition, the Committee oversees the voting of proxies associated with portfolio investments of the funds with the goal of ensuring that these proxies are voted in the best interest of the funds' shareholders. The Committee reports to the Trustees and makes recommendations to the Trustees regarding these matters. The Committee generally believes that the Board benefits from diversity of background, experience and views among its members, and considers this as a factor in evaluating the composition of the Board, but has not adopted any specific policy in this regard. The Committee is composed entirely of Independent Trustees. The current members are Dr. Hill (Chair), Mses. Baumann and Sutphen, and Mr. Putnam.

**Contract Committee**. The Contract Committee reviews and evaluates at least annually arrangements pertaining to (i) the engagement of the Investment Manager and its affiliates to provide services to the funds, (ii) the expenditure of the funds' assets for distribution purposes pursuant to Distribution Plans of the funds, and (iii) the engagement of other persons to provide material services to the funds, including in particular those instances where the cost of services is shared between the funds and the Investment Manager and its affiliates or where the Investment Manager or its affiliates have a material interest. The Committee also reviews the proposed organization of new fund products and proposed structural changes to existing funds. In addition, the Committee reviews communications with, and the quality of services provided to, shareholders and oversees the marketing and sale of fund shares by Franklin Distributors. The Committee reports to the Trustees and makes recommendations to the Trustees regarding these matters.

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The Committee also reviews the funds' policies regarding the execution of portfolio trades and the Investment Manager's (and its affiliates') practices and procedures relating to the implementation of those policies. The Committee reviews periodic reports on the cost and quality of execution of portfolio transactions and the extent to which brokerage commissions have been used (i) by the Investment Manager (or its affiliates) to obtain brokerage and research services generally useful to it (or its affiliates) in managing the portfolios of the funds and of its other clients, and (ii) by the funds to pay for certain fund expenses. The Committee reports to the Trustees and makes recommendations to the Trustees regarding these matters.

The Committee is composed entirely of Independent Trustees. The current members are Messrs. Putnam (Chair) and Ahamed, Mses. Baumann and Domotorffy, and Dr. Hill.

**Executive Committee**. The functions of the Executive Committee are twofold. The first is to ensure that the funds' business may be conducted at times when it is not feasible to convene a meeting of the Trustees or for the Trustees to act by written consent. The Committee may exercise any or all of the power and authority of the Trustees when the Trustees are not in session. The second is to review annual and ongoing goals, objectives and priorities for the Board and to facilitate coordination of all efforts between the Trustees and the Investment Manager on behalf of the shareholders of the funds. The Committee currently consists of Ms. Baumann (Chair) and Messrs. Putnam and Singh.

**Investment Oversight Committees.** The Investment Oversight Committees regularly meet with investment personnel of the Investment Manager and its affiliates to review the investment performance and strategies of the funds in light of their stated goals and policies. The Committees seek to identify any compliance issues that are unique to the applicable categories of funds and work with the appropriate board committees to ensure that any such issues are properly addressed. The Committees review the proposed investment objectives, policies and restrictions of new fund products and proposed changes to investment objectives, policies and restrictions of existing funds. The Committees also review matters relating to the exemptive order(s) and rules specifically applicable to the ETFs and any other matters arising from time to time relating to the ETFs that are not otherwise within the general subject matter purview of another committee. The current members of Investment Oversight Committee A are Mses. Domotorffy (Chair), Baumann, and Trust, Dr. Hill, and Messrs. McGreevey and Putnam, and the current members of Investment Oversight Committee B are Mses. Pillai (Chair), Murphy and Sutphen, and Messrs. Ahamed, Reynolds, and Singh.

#### Indemnification
Subject to certain exceptions specified therein, the Trust's Amended and Restated Agreement and Declaration of Trust provides that the Trust and each fund will indemnify its Trustees and officers to the fullest extent permitted by law against liability and against all expenses reasonably incurred or paid by him or her in connection with any claim, action, suit or proceeding in which he or she becomes involved as a party or otherwise by virtue of his or her being or having been a trustee or officer of the Trust and against amounts paid or incurred by him or her in the settlement thereof. Each fund, at its expense, provides liability insurance for the benefit of its Trustees and officers.

**For details of Trustees' fees paid by the fund and information concerning retirement guidelines for the Trustees, see "Charges and expenses" in Part I of this SAI.** 

#### The Investment Manager and its Affiliates
*Putnam Investment Management, LLC* 

If so disclosed in the fund's prospectus, Putnam Management serves as Investment Manager to the fund. Putnam Management is one of America's oldest money management firms. Putnam Management has been managing mutual funds since 1937.

*Franklin Advisers, Inc.* 

If so disclosed in the fund's prospectus, Franklin Advisers serves as Investment Manager to the fund. Franklin Advisers, Inc., a global investment organization, is a California corporation formed on October 31, 1985.

#### Additional information about Putnam Management and Franklin Advisers

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Putnam Management and Franklin Advisers are indirect, wholly-owned subsidiaries of Franklin Templeton, a Delaware corporation. Franklin Templeton, whose principal executive offices are at One Franklin Parkway, San Mateo, California 94403, is a global investment management organization.

Trustees and officers of the fund who are also officers of Putnam Management, Franklin Advisers or their affiliates or who are stockholders of Franklin Templeton or its affiliates will benefit from the advisory fees, sales commissions, distribution fees and transfer agency fees paid or allowed by the fund.

#### The Management Contract
Under a management contract between the fund and the Investment Manager (the "Management Contract"), subject to such policies as the Trustees may determine, the Investment Manager, at its expense, furnishes continuously an investment program for the fund and makes investment decisions on behalf of the fund. Subject to the control of the Trustees, the Investment Manager also manages, supervises and conducts the other affairs and business of the fund, furnishes all necessary investment and management facilities, including salaries of personnel, required for it to execute its duties faithfully, furnishes office space and equipment, provides bookkeeping and clerical services (including determination of the fund's net asset value, but excluding shareholder accounting services) and typically places orders for the purchase and sale of the fund's portfolio securities (in some cases, Putnam Management and Franklin Advisers, in their capacities as sub-advisers to a fund, may place orders for the purchase and sale of the fund's portfolio securities, and references elsewhere in this SAI to the Investment Manager placing orders for the purchase and sale of portfolio securities shall be deemed to include Putnam Management and Franklin Advisers in their capacities as sub-advisers, as appropriate in the context). The Investment Manager may place fund portfolio transactions with broker-dealers that furnish the Investment Manager, without cost to it, certain research services of value to the Investment Manager and its affiliates in advising the fund and other clients. In so doing, the Investment Manager may cause the fund to pay greater brokerage commissions than it might otherwise pay.

Franklin Templeton Services, LLC ("FT Services") has entered into an agreement with the Investment Manager to provide certain administrative services and facilities for the fund. FT Services is an indirect, wholly-owned subsidiary of Franklin Templeton and is an affiliate of the Investment Manager, the fund's investment manager. The administrative services FT Services provides include preparing and maintaining books, records, and tax and financial reports, and monitoring compliance with regulatory requirements. The Investment Manager pays FT Services a monthly fee equal to 105% of the internal costs incurred by FTS for providing administrative services to the Putnam ETFs. The Investment Manager will also reimburse FT Services for fees paid by FT Services to any third-party service provider for sub-administration and other services for the fund.

#### For details of the Investment Manager's compensation under the Management Contract, see "Charges and expenses" in Part I of this SAI.
The Management Contract provides that the Investment Manager shall not be subject to any liability to the fund or to any shareholder of the fund for any act or omission in the course of or connected with rendering services to the fund in the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of its duties on the part of the Investment Manager.

The Management Contract may be terminated without penalty by vote of the Trustees or the shareholders of the fund, or by the Investment Manager, on not less than 60 days' written notice. Subject to certain exceptions, it may be amended only by a vote of the shareholders of the fund. The Management Contract also terminates without payment of any penalty in the event of its assignment. The Management Contract provides that it will continue in effect only so long as such continuance is approved at least annually by vote of either the Trustees or the shareholders, and, in either case, by a majority of the Trustees who are not "interested persons" of the Investment Manager or the fund. In each of the foregoing cases, the vote of the shareholders is the affirmative vote of a "majority of the outstanding voting securities" as defined in the 1940 Act.

FT Services has entered into a Sub-Administration and Accounting Agreement with The Bank of New York Mellon ("BNY Mellon"), under which FT Services has delegated to BNY Mellon responsibility for providing certain administrative, pricing, and bookkeeping services for the fund. FT Services pays BNY Mellon a monthly fee based on a combination of fixed annual charges and charges based on the fund's assets and the number and types of securities held by the fund and reimburses BNY Mellon for certain out-of-pocket expenses.

#### The Sub-Advisers

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*Putnam Investment Management, LLC* 

If so disclosed in the fund's prospectus, Putnam Management, an affiliate of Franklin Advisers, has been retained as a sub-adviser by Franklin Advisers, at Franklin Advisers' own expense, to make investment decisions for such fund assets as may be designated from time to time for its management by Franklin Advisers and to provide certain other advisory and related services pursuant to a subadvisory agreement between Franklin Advisers and Putnam Management. The other advisory and related services may include the facilitation of derivative transactions, sharing of investment research if so requested by Franklin Advisers, and proxy voting, and these services are subject to change over time.

The subadvisory agreement provides that Putnam Management shall not be subject to any liability to Franklin Advisers, the fund or any shareholder of the fund for any act or omission in the course of or connected with rendering services to the fund in the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations and duties on the part of Putnam Management.

The subadvisory agreement may be terminated with respect to the fund without penalty by vote of the Trustees or shareholders of the fund, or by Franklin Advisers or Putnam Management upon 60 days' written notice. The subadvisory agreement also terminates without payment of any penalty in the event of its assignment or upon any termination of the management contract between Franklin Advisers and the fund. The subadvisory agreement provides that it will continue in effect only so long as such continuance is approved at least annually by vote of either the Trustees or the shareholders, and, in either case, by a majority of the Trustees who are not parties to the subadvisory agreement or "interested persons" thereof. In each of the foregoing cases, the vote of the shareholders is the affirmative vote of a "majority of the outstanding voting securities" as defined in the 1940 Act.

For additional information about Putnam Management, see "Putnam Investment Management, LLC" under "The Investment Manager and its Affiliates" above.

*Franklin Advisers, Inc.* 

If so disclosed in the fund's prospectus, Franklin Advisers, an affiliate of Putnam Management, has been retained as a sub-adviser to provide by Putnam Management, at Putnam Management's own expense, to make investment decisions for such fund assets as may be designated from time to time for its management by Putnam Management and to provide certain other advisory and related services pursuant to a subadvisory agreement between Putnam Management and Franklin Advisers. The other advisory and related services may include the facilitation of foreign exchange transactions, sharing of investment research if so requested by Putnam Management, and managing the fund's investments in cash or cash equivalents, and these services are subject to change over time.

The subadvisory agreement provides that Franklin Advisers shall not be subject to any liability to Putnam Management, the fund or any shareholder of the fund for any act or omission in the course of or connected with rendering services to the fund in the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations and duties on the part of Franklin Advisers.

The subadvisory agreement may be terminated with respect to the fund without penalty by vote of the Trustees or shareholders of the fund, or by Putnam Management or Franklin Advisers or upon 60 days' written notice. The subadvisory agreement also terminates without payment of any penalty in the event of its assignment or upon any termination of the management contract between Putnam Management and the fund. The subadvisory agreement provides that it will continue in effect only so long as such continuance is approved at least annually by vote of either the Trustees or the shareholders, and, in either case, by a majority of the Trustees who are not parties to the subadvisory agreement or "interested persons" thereof. In each of the foregoing cases, the vote of the shareholders is the affirmative vote of a "majority of the outstanding voting securities" as defined in the 1940 Act.

For additional information about Franklin Advisers, see "Franklin Advisers, Inc." under "The Investment Manager and its Affiliates" above.

*Franklin Templeton Investment Management Limited*

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If so disclosed in the fund's prospectus, FTIML, an affiliate of the Investment Manager, has been retained as a sub-adviser for a portion of the assets of the fund, as determined from time to time by the Investment Manager pursuant to a sub-advisory agreement between the Investment Manager and FTIML. Under the terms of the sub-advisory agreement, FTIML, at its own expense, manages the investment and reinvestment of that portion of each such fund's portfolio that is allocated to FTIML from time to time by the Investment Manager, with FTIML determining what securities and other property will be purchased, retained or sold with respect to such portion, and placing all purchase and sale orders with respect to such portion, subject to the supervision of the Investment Manager. The Investment Manager may also, at its discretion, request FTIML to provide assistance with purchasing and selling securities for the fund, including placement of orders with certain broker-dealers, and to perform research and obtain and evaluate data relevant to the fund's investment strategies and policies.

Pursuant to the terms of the sub-advisory agreement, FTIML will pay all expenses incurred by it in connection with its activities under this agreement other than the cost of securities (including brokerage commissions, if any) purchased for the fund. The sub-advisory agreement provides that, in the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations and duties on the part of FTIML, neither FTIML, nor any of its directors, officers, employees or affiliates, shall be subject to liability to the Investment Manager, the fund or any shareholder of the fund for any error of judgment or mistake of law or any other act or omission in the course of, or connected with, rendering services to the fund or for any losses that may be sustained in the purchase, holding or sale of any security by the fund.

The sub-advisory agreement may be terminated at any time with respect to a fund without penalty by vote of the Trustees or the shareholders of the fund upon not more than sixty days' written notice to the Investment Manager and FTIML, and by FTIML or the Investment Manager on not more than 60 days' written notice to the other party. The sub-advisory agreement also terminates without payment of any penalty in the event of its assignment. Subject to applicable law, it may be amended by a majority of the Trustees who are not "interested persons" of the Investment Manager or the fund. The sub-advisory agreement provides that it will continue in effect only so long as such continuance is approved at least annually by vote of either the Trustees or the shareholders, and, in either case, by a majority of the Trustees who are not "interested persons" of the Investment Manager or the fund. In each of the foregoing cases, the vote of the shareholders is the affirmative vote of a "majority of the outstanding voting securities" as defined in the 1940 Act.

*PanAgora Asset Management, Inc.*

If so disclosed in the fund's prospectus, PanAgora, an affiliate of Putnam Management, has been retained as the sub-adviser for a portion of the assets of the fund, as determined from time to time by Putnam Management, by Putnam Management pursuant to a sub-advisory agreement between Putnam Management and PanAgora.

PanAgora, a Delaware corporation organized in 1985 and incorporated in 1989, is located at One International Place, 24th Floor, Boston, Massachusetts 02110. In addition, certain PanAgora employees own non-voting interests in PanAgora. Assuming all employee stock and options are issued and exercised, up to 20% of the economic interest in PanAgora would be owned by PanAgora employees.

Under certain terms of the sub-advisory agreement, PanAgora, at its own expense, furnishes continuously an investment program for that portion of each such fund that is allocated to PanAgora from time to time by Putnam Management, and makes investment decisions on behalf of such portion of the fund, subject to the supervision of the Board of Trustees and Putnam Management.

PanAgora, at its expense, furnishes all necessary investment and management facilities, including salaries of personnel, required for it to execute its duties. The sub-advisory agreement provides that PanAgora shall not be subject to any liability to Putnam Management, the fund or any shareholder of the fund for any act or omission in the course of or connected with rendering services to the fund in the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations and duties on the part of PanAgora.

The sub-advisory agreement may be terminated with respect to a fund without penalty by vote of the Trustees or the shareholders of the fund, or by PanAgora or Putnam Management, on not more than 60 days' nor less than 30 days' written notice. The sub-advisory agreement also terminates without payment of any penalty in the event of its assignment. Subject to applicable law, it may be amended by a majority of the Trustees who are not "interested persons" of Putnam Management or the fund. The sub-advisory agreement provides that it will continue in effect only so long as such continuance is approved at least annually by vote of either the Trustees or the shareholders, and, in either case, by a majority of the Trustees who are not

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"interested persons" of Putnam Management or the fund. In each of the foregoing cases, the vote of the shareholders is the affirmative vote of a "majority of the outstanding voting securities" as defined in the 1940 Act.

#### Portfolio Transactions

#### Potential conflicts of interest in managing multiple accounts.
*Investment Manager* 

Like other investment professionals with multiple clients, the fund's Portfolio Manager(s) may face certain potential conflicts of interest in connection with managing both the fund and the other accounts listed under **"PORTFOLIO MANAGER(S)" "Other accounts managed"** at the same time. The paragraphs below describe some of these potential conflicts, which the Investment Manager believes are faced by investment professionals at most major financial firms. As described below, the Investment Manager and the Trustees have adopted compliance policies and procedures that attempt to address certain of these potential conflicts.

The management of accounts with different advisory fee rates and/or fee structures, including accounts that pay advisory fees based on account performance ("performance fee accounts"), may raise potential conflicts of interest by creating an incentive to favor higher-fee accounts. These potential conflicts may include, among others:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The most attractive investments could be allocated to higher-fee accounts or performance fee accounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The trading of higher-fee accounts could be favored as to timing and/or execution price. For example, higher-fee accounts could be permitted to sell securities earlier than other accounts when a prompt sale is desirable or to buy securities at an earlier and more opportune time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The trading of other accounts could be used to benefit higher-fee accounts (front-running).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The investment management team could focus their time and efforts primarily on higher-fee accounts due to a personal stake in compensation.

The Investment Manager attempts to address these potential conflicts of interest relating to higher-fee accounts through various compliance policies that are generally intended to place all accounts, regardless of fee structure, on the same footing for investment management purposes. For example, under the Investment Manager's policies:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Performance fee accounts must be included in all standard trading and allocation procedures with all other accounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All accounts must be allocated to a specific category of account and trade in parallel with allocations of similar accounts based on the procedures generally applicable to all accounts in those groups (e.g., based on relative risk budgets of accounts).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All trading must be effected through Putnam's trading desks and normal queues and procedures must be followed (i.e., no special treatment is permitted for performance fee accounts or higher-fee accounts based on account fee structure).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Front running is strictly prohibited.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Except as provided in Part I of this SAI, the fund's Portfolio Manager(s) may not be guaranteed or specifically allocated any portion of a performance fee.

As part of these policies, the Investment Manager has also implemented trade oversight and review procedures in order to monitor whether particular accounts (including higher-fee accounts or performance fee accounts) are being favored over time.

Potential conflicts of interest may also arise when the Portfolio Manager(s) have personal investments in other accounts that may create an incentive to favor those accounts. As a general matter and subject to limited exceptions, the Investment Manager's investment professionals do not have the opportunity to invest in client accounts, other than Putnam funds. However, in the ordinary course of business, the Investment Manager or related persons may from time to time establish "pilot" or "incubator" accounts for the purpose of testing proposed investment strategies and products before offering them to clients. These pilot accounts may be in the form of registered investment companies, private funds such as partnerships or separate accounts established by the Investment Manager or an affiliate. The Investment Manager or an affiliate supplies the funding for these accounts. Putnam employees, including the fund's Portfolio Manager(s), may also invest in certain pilot accounts. The Investment Manager, and to the extent applicable, the Portfolio Manager(s) will benefit from the favorable investment performance of pilot accounts. Pilot funds and accounts may, and frequently do, invest in the same securities as the client accounts. The Investment Manager's policy is to treat pilot accounts in the same manner as client accounts for purposes of trading allocation – neither favoring nor disfavoring them except as is legally required. For example, pilot accounts are normally

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included in the Investment Manager's daily block trades to the same extent as client accounts (except that pilot accounts do not participate in initial public offerings).

A potential conflict of interest may arise when the fund and other accounts purchase or sell the same securities. On occasions when the Portfolio Manager(s) consider the purchase or sale of a security to be in the best interests of the fund as well as other accounts, the Investment Manager's trading desk may, to the extent permitted by applicable laws and regulations and where practicable, aggregate the securities to be sold or purchased in order to obtain the best execution and lower brokerage commissions, if any. Aggregation of trades may create the potential for unfairness to the fund or another account if one account is favored over another in allocating the securities purchased or sold – for example, by allocating a disproportionate amount of a security that is likely to increase in value to a favored account. The Investment Manager's trade allocation policies generally provide that each day's transactions in securities that are purchased or sold by multiple accounts are, insofar as possible, averaged as to price and allocated between such accounts (including the fund) in a manner which in the Investment Manager's opinion is equitable to each account and in accordance with the amount being purchased or sold by each account. However, accounts advised or sub-advised by FTIML will only place trades at an execution-only commission rate, whereas other Putnam accounts may pay an additional amount for research and other products and services (a "bundled" or "full service" rate). The Investment Manager may aggregate trades in FTIML accounts with other Putnam accounts that pay a bundled rate as long as all participating accounts pay the same execution rate. To the extent that non- FTIML accounts pay a bundled rate, the FTIML and other the Investment Manager accounts would not be paying the same total commission rate. Certain other exceptions exist for specialty, regional or sector accounts. Trade allocations are reviewed on a periodic basis as part of the Investment Manager's trade oversight procedures in an attempt to ensure fairness over time across accounts.

"Cross trades," in which one Putnam account sells a particular security to another account (potentially saving transaction costs for both accounts), may also pose a potential conflict of interest. Cross trades may be seen to involve a potential conflict of interest if, for example, one account is permitted to sell a security to another account at a higher price than an independent third party would pay, or if such trades result in more attractive investments being allocated to higher-fee accounts. The Investment Manager and the fund's Trustees have adopted compliance procedures that provide that any transactions between the fund and another Putnam-advised account are to be made at an independent current market price, as required by law.

Another potential conflict of interest may arise based on the different goals and strategies of the fund and other accounts. For example, another account may have a shorter-term investment horizon or different goals, policies or restrictions than the fund. Depending on goals or other factors, the Portfolio Manager(s) may give advice and make decisions for another account that may differ from advice given, or the timing or nature of decisions made, with respect to the fund. In addition, investment decisions are the product of many factors in addition to basic suitability for the particular account involved. Thus, a particular security may be bought or sold for certain accounts even though it could have been bought or sold for other accounts at the same time. More rarely, a particular security may be bought for one or more accounts managed by the Portfolio Manager(s) when one or more other accounts are selling the security (including short sales). There may be circumstances when purchases or sales of portfolio securities for one or more accounts may have an adverse effect on other accounts. As noted above, the Investment Manager has implemented trade oversight and review procedures to monitor whether any account is systematically favored over time.

Under federal securities laws, a short sale of a security by another client of the Investment Manager or its affiliates (other than another registered investment company) within five business days prior to a public offering of the same securities (the timing of which is generally not known to Putnam in advance) may prohibit the fund from participating in the public offering, which could cause the fund to miss an otherwise favorable investment opportunity or to pay a higher price for the securities in the secondary markets.

The fund's Portfolio Manager(s) may also face other potential conflicts of interest in managing the fund, and the description above is not a complete description of every conflict that could be deemed to exist in managing both the fund and other accounts. For information on restrictions imposed on personal securities transactions of the fund's Portfolio Manager(s), please see "Personal Investments by Employees of the Investment Manager and Franklin Distributors and Officers and Trustees of the Fund."

*PanAgora* 

The portfolio managers' management of other accounts may give rise to potential conflicts of interest in connection with their management of the fund's investments, on the one hand, and the investments of the other accounts, on the other. The other accounts include retirement plans and separately managed accounts ("SMA's"), as well as incubated accounts. The other

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accounts might have similar investment objectives as the fund, or hold, purchase or sell securities that are eligible to be held, purchased or sold by the fund. While the portfolio managers' management of other accounts may give rise to the following potential conflicts of interest, PanAgora does not believe that the conflicts, if any, are material or, to the extent any such conflicts are material, PanAgora believes that it has designed policies and procedures to manage those conflicts in an appropriate way.

A potential conflict of interest may arise as a result of the portfolio managers' day-to-day management of the fund. Because of their positions with the fund, the portfolio managers know the size, timing and possible market impact of the fund's trades. It is theoretically possible that the portfolio managers could use this information to the advantage of other accounts they manage and to the possible detriment of the fund. However, PanAgora has adopted policies and procedures reasonably designed to allocate investment opportunities on a fair and equitable basis over time.

A potential conflict of interest may arise as a result of the portfolio managers' management of the fund, and other accounts, which, in theory, may allow them to allocate investment opportunities in a way that favors other accounts over the fund. This conflict of interest may be exacerbated to the extent that PanAgora or the portfolio managers receive, or expect to receive, greater compensation from their management of the other accounts than the fund. Notwithstanding this theoretical conflict of interest, it is PanAgora's policy to manage each account based on its investment objectives and related restrictions and, as discussed above, PanAgora has adopted policies and procedures reasonably designed to allocate investment opportunities on a fair and equitable basis over time and in a manner consistent with each account's investment objectives and related restrictions. For example, while the portfolio managers may buy for other accounts securities that differ in identity or quantity from securities bought for the fund, such securities might not be suitable for the fund given its investment objective and related restrictions.

For information about other funds and accounts managed by the fund's Portfolio Manager(s), please refer to "Who oversees and manages the fund(s)?" in the prospectus and **"PORTFOLIO MANAGER(S)" "Other accounts managed"** in Part I of the SAI.

#### Brokerage and research services.
Transactions on stock exchanges, commodities markets and futures markets and other agency transactions involve the payment by the fund of negotiated brokerage commissions. Such commissions may vary among different brokers. A particular broker may charge different commissions according to such factors as execution venue and exchange. Although the fund does not typically pay commissions for principal transactions in the over-the-counter markets, such as the markets for most fixed income securities and certain derivatives, an undisclosed amount of profit or "mark-up" is included in the price the fund pays. In underwritten offerings, the price paid by the fund includes a disclosed, fixed commission or discount retained by the underwriter or dealer. **See "Charges and expenses" in Part I of this SAI for information concerning commissions paid by the fund**.

It has for many years been a common practice in the investment advisory business for broker-dealers that execute portfolio transactions for the clients of advisers of investment companies and other institutional investors to provide those advisers with brokerage and research services, as defined in Section 28(e) of the Exchange Act. Consistent with this practice, the Investment Manager receives brokerage and research services from broker-dealers with which the Investment Manager places the fund's portfolio transactions. The products and services that broker-dealers may provide to the Investment Manager's managers and analysts include, among others, trading systems and other brokerage services, economic and political analysis, fundamental and macro investment research, industry and company reviews, statistical information, market data, evaluations of investments, strategies, markets and trading venues, recommendations as to the purchase and sale of investments, performance measurement services and meetings with management of current or prospective portfolio companies or with industry experts. Some of these services are of value to the Investment Manager and its affiliates in advising various of their clients (including the fund), although not all of these services are necessarily useful and of value in managing the fund. Research services provided by broker-dealers are supplemental to the Investment Manager's own research efforts and relieve the Investment Manager of expenses it might otherwise have borne in generating such research. The management fee paid by the fund is not reduced because the Investment Manager and its affiliates receive brokerage and research services even though the Investment Manager might otherwise be required to purchase some of these services for cash. The Investment Manager may also use portfolio transactions to generate "soft dollar" credits to pay for "mixed-use" services (i.e., products or services that may be used both for investment/brokerage- and non-investment/brokerage-related purposes), but in such instances the Investment Manager uses its own resources to pay for that portion of the mixed-use product or service that in its good-faith judgment does not relate to investment or brokerage purposes. The Investment Manager may also allocate trades to generate soft dollar credits for third-party investment research reports and related fundamental research.

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The Investment Manager places all orders for the purchase and sale of portfolio investments for the funds, and buys and sells investments for the funds, through a substantial number of brokers and dealers. In selecting broker-dealers to execute the funds' portfolio transactions, the Investment Manager uses its best efforts to obtain for each fund the most favorable price and execution reasonably available under the circumstances, except to the extent it may be permitted to pay higher brokerage commissions as described below. In seeking the most favorable price and execution and in considering the overall reasonableness of the brokerage commissions paid, the Investment Manager, having in mind the fund's best interests, considers all factors it deems relevant, including, in no particular order of importance, and by way of illustration, the price, size and type of the transaction, the nature of the market for the security or other investment, the amount of the commission, research and brokerage services provided by a broker-dealer, the timing of the transaction taking into account market prices and trends, the reputation, experience and financial stability of the broker-dealer involved, the benefit of any capital committed by a broker-dealer to facilitate the efficient execution of the transaction and the quality of service rendered by the broker-dealer in other transactions.

The Investment Manager may cause the fund to pay a broker-dealer that provides "brokerage and research services" (as defined in the Exchange Act and as described above) to the Investment Manager an amount of disclosed commission for effecting securities transactions on stock exchanges and other transactions for the fund on an agency basis in excess of the commission another broker-dealer would have charged for effecting that transaction. The Investment Manager may also instruct an executing broker to "step out" a portion of the trades placed with a broker to other brokers that provide brokerage and research services to the Investment Manager. The Investment Manager's authority to cause the fund to pay any such greater commissions or to instruct a broker to "step out" a portion of a trade is subject to the requirements of applicable law and such policies as the Trustees may adopt from time to time. It is the position of the staff of the SEC that Section 28(e) of the Exchange Act does not apply to the payment of such greater commissions in "principal" transactions. Accordingly, the Investment Manager will use its best effort to obtain the most favorable price and execution available with respect to such transactions, as described above.

The Management Contract provides that commissions, fees, brokerage or similar payments received by the Investment Manager or an affiliate in connection with the purchase and sale of portfolio investments of the fund, less any direct expenses approved by the Trustees, shall be recaptured by the fund through a reduction of the fee payable by the fund under the Management Contract. The Investment Manager seeks to recapture for the fund soliciting dealer fees on the tender of the fund's portfolio securities in tender or exchange offers. Any such fees which may be recaptured are likely to be minor in amount.

For those funds sub-advised by FTIML and where FTIML places trades on behalf of those funds, the rules of the United Kingdom's Financial Conduct Authority (the "FCA Rules") apply with respect to the receipt of investment research. Under the FCA Rules, FTIML may not obtain research using brokerage commissions paid by funds sub-advised by FTIML. FTIML will use only "hard dollars" (i.e., from its own resources) to acquire external research used by London-based personnel, including fixed income personnel, except with respect to Minor Non-Monetary Benefits.

Minor Non-Monetary Benefits include, among other categories:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Research from independent research providers who are not engaged in execution services and are not part of a financial services group that offers execution or brokerage services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Research on listed and unlisted small and medium-sized enterprises with a market capitalization below £200 million;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>•</u> Research focusing on fixed income, currency, and commodity investment strategies; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Written research that is openly available to other firms or to the general public.

FTIML may use soft dollar commissions generated by trades of the Investment Manager and other Putnam affiliates other than FTIML to obtain research received by employees of FTIML that qualify as a Minor Non-Monetary Benefit.

#### Principal Underwriter
Franklin Distributors, located at One Franklin Parkway, San Mateo, CA 94403-1906, is the principal underwriter of shares of the fund and the other continuously offered Putnam funds. Franklin Distributors is a registered broker-dealer, a member of the Financial Industry Regulatory Authority, and an indirect, wholly-owned subsidiary of Franklin Templeton. See "Charges and expenses" in Part I of this SAI for information on payments received by Franklin Distributors or Foreside Fund Services, LLC, the principal underwriter for the certain of the funds prior to August 2, 2024.

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#### Personal Investments by Employees of Putnam Management, Franklin Advisers, FTIML and Franklin Distributors and Officers and Trustees of the Fund
Employees of Putnam Management, Franklin Advisers, FTIML and Franklin Distributors and officers and Trustees of the fund are subject to significant restrictions on engaging in personal securities transactions. These restrictions are set forth in the Codes of Ethics adopted by Putnam Management, Franklin Advisers, FTIML and Franklin Distributors and by the fund (the "Code of Ethics"). The Code of Ethics, in accordance with Rule 17j-1 under the 1940 Act, contains provisions and requirements designed to identify and address certain conflicts of interest between personal investment activities and the interests of the fund.

The Code of Ethics does not prohibit personnel from investing in securities that may be purchased or held by the fund. However, the Code of Ethics, consistent with standards recommended by the Investment Company Institute's Advisory Group on Personal Investing and requirements established by Rule 17j-1 and rules adopted under the Investment Advisers Act of 1940, among other things, prohibits personal securities investments without pre-clearance, imposes time periods during which personal transactions may not be made in certain securities by employees with access to investment information, and requires the timely submission of broker confirmations and quarterly reporting of personal securities transactions. Additional restrictions apply to portfolio managers, traders, research analysts and others involved in the investment advisory process.

The Code of Ethics does not prohibit unaffiliated officers and Trustees from investing in securities that may be held by the fund; however, the Putnam Funds Code of Ethics regulates the personal securities transactions of unaffiliated Trustees of the fund, including limiting the time periods during which they may personally buy and sell certain securities and requiring them to submit reports of personal securities transactions under certain circumstances.

The fund's Trustees, in compliance with Rule 17j-1, approved the Code of Ethics and are required to approve any material changes to the Code of Ethics. The Trustees also provide continued oversight of personal investment policies and annually evaluate the implementation and effectiveness of the Code of Ethics.

#### Transfer Agent
The Bank of New York Mellon (BNY Mellon), 240 Greenwich Street, New York, New York 10286, acts as the fund's transfer agent and dividend-paying agent. The Investment Manager, and not the fund, bears the cost of these services under the terms of its management contract with the fund.

#### Custodian
BNY Mellon acts as custodian of the fund's securities and other assets. BNY Mellon is located at 240 Greenwich Street, New York, New York 10286.

#### Auditor
PricewaterhouseCoopers LLP, 101 Seaport Boulevard, Boston, Massachusetts 02210, is the fund's independent registered public accounting firm providing audit services, tax return review and other tax consulting services and assistance and consultation in connection with the review of various Securities and Exchange Commission filings.

#### Counsel to the Fund
Ropes & Gray LLP serves as counsel to the fund, and is located at Prudential Tower, 800 Boylston Street, Boston, Massachusetts 02199.

#### DETERMINATION OF NET ASSET VALUE
The fund determines the net asset value per share once each day the NYSE is open. Currently, the NYSE is closed Saturdays, Sundays and the following holidays: New Year's Day, Rev. Dr. Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Juneteenth, the Fourth of July, Labor Day, Thanksgiving Day and Christmas Day. The fund determines net asset value as of the close of regular trading on the NYSE, normally 4:00 p.m. Eastern Time. The net asset value per share equals the total value of its assets, less its liabilities, divided by the number of its outstanding shares.

------

Securities and other assets ("Securities") for which market quotations are readily available, as defined by Rule 2a-5 under the 1940 Act, are valued at prices which, in the opinion of the Investment Manager, most nearly represent the market values of such Securities. Currently, prices for these Securities are determined using the last reported sale price (or official closing price for Securities listed on certain markets) or, if no sales are reported (as in the case of some Securities traded over-the-counter), the mean between the last reported bid and ask prices, the "mid price" (prior to July 22, 2024, the last reported bid price was used). All other Securities are valued by the Investment Manager or other parties at their fair value following procedures approved by the Trustees.

Reliable market quotations are not considered to be readily available for, among other Securities, long-term corporate bonds and notes, certain preferred stocks, tax-exempt securities, and certain foreign securities. These investments are valued at fair value, generally on the basis of valuations furnished by approved pricing services, which determine valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities that are generally recognized by institutional traders. Other Securities, such as various types of options, are valued at fair value on the basis of valuations furnished by broker-dealers or other market intermediaries.

The Investment Manager values all other Securities at fair value using its internal resources. The valuation procedures applied in any specific instance are likely to vary from case to case. However, consideration is generally given to the financial position of the issuer and other fundamental analytical data relating to the investment and to the nature of the restrictions on disposition of the Securities (including any registration expenses that might be borne by the fund in connection with such disposition). In addition, specific factors are also generally considered, such as the cost of the investment, the market value of any unrestricted Securities of the same class, the size of the holding, the prices of any recent transactions or offers with respect to such Securities and any available analysts' reports regarding the issuer. In the case of Securities that are restricted as to resale, the Investment Manager determines fair value based on the inherent worth of the Security without regard to the restrictive feature, adjusted for any diminution in value resulting from the restrictive feature.

Generally, trading in certain Securities (such as foreign securities) is substantially completed each day at various times before the close of the NYSE. The closing prices for these Securities in markets or on exchanges outside the U.S. that close before the close of the NYSE may not fully reflect events that occur after such close but before the close of the NYSE. As a result, the fund has adopted fair value pricing procedures, which, among other things, require the fund to fair value foreign equity securities if there has been a movement in the U.S. market that exceeds a specified threshold. Although the threshold may be revised from time to time and the number of days on which fair value prices will be used will vary, it is possible that fair value prices will be used by the fund to a significant extent. In addition, Securities held by some of the funds may be traded in foreign markets that are open for business on days that the fund is not, and the trading of such Securities on those days may have an impact on the value of a shareholder's investment at a time when the shareholder cannot buy and sell shares of the fund.

Currency exchange rates used in valuing Securities are normally determined as of 4:00 p.m. Eastern Time.

Occasionally, events affecting such exchange rates may occur between the time of the determination of exchange rates and the close of the NYSE, which, in the absence of fair valuation, would not be reflected in the computation of the fund's net asset value. If events materially affecting the currency exchange rates occur during such period, then the exchange rates used in valuing affected Securities will be valued by the Investment Manager at their fair value following procedures approved by the Trustees.

In addition, because of the amount of time required to collect and process trading information as to large numbers of securities issues, the values of certain Securities (such as convertible bonds, U.S. government securities and tax-exempt securities) are determined based on market quotations collected before the close of the NYSE. Occasionally, events affecting the value of such Securities may occur between the time of the determination of value and the close of the NYSE, which, in the absence of fair value prices, would not be reflected in the computation of the fund's net asset value. If events materially affecting the value of such Securities occur during such period, then these Securities will be valued by the Investment Manager at their fair value following procedures approved by the Trustees. It is expected that any such instance would be very rare.

The fair value of Securities is generally determined as the amount that the fund could reasonably expect to realize from an orderly disposition of such Securities over a reasonable period of time. By its nature, a fair value price is a good faith estimate of the value of a Security at a given point in time and does not reflect an actual market price.

The fund may also value its Securities at fair value under other circumstances pursuant to procedures approved by the Trustees.

#### Money Market Funds

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"Retail money market funds" and "government money market funds" each as defined by Rule 2a-7 under the 1940 Act generally value their portfolio securities at amortized cost according to Rule 2a-7 under the 1940 Act.

Since the net income of a money market fund is declared as a dividend each time it is determined, the net asset value per share of a retail money market fund and government money market fund typically remains at $1.00 per share immediately after such determination and dividend declaration. Any increase in the value of a shareholder's investment in a money market fund representing the reinvestment of dividend income is reflected by an increase in the number of shares of that fund in the shareholder's account on the last business day of each month. It is expected that a money market fund's net income will normally be positive each time it is determined. However, if because of realized losses on sales of portfolio investments, a sudden rise in interest rates, or for any other reason the net income of a fund determined at any time is a negative amount, a money market fund may offset such amount allocable to each then shareholder's account from dividends accrued during the month with respect to such account. If, at the time of payment of a dividend, such negative amount exceeds a shareholder's accrued dividends, a money market fund may reduce the number of outstanding shares by treating the shareholder as having contributed to the capital of the fund that number of full and fractional shares which represent the amount of the excess. Each shareholder is deemed to have agreed to such contribution in these circumstances by his or her investment in a money market fund.

#### SHAREHOLDER LIABILITY
The Trust is a statutory trust organized under Delaware law. Delaware law provides that, except to the extent otherwise provided in the Amended and Restated Agreement and Declaration of Trust, shareholders shall be entitled to the same limitations of personal liability extended to stockholders of private corporations for profit organized under the general corporation law of Delaware. The courts of some states, however, may decline to apply Delaware law on this point. The Amended and Restated Agreement and Declaration of Trust contains an express disclaimer of shareholder liability for the debts, liabilities, obligations, and expenses incurred by, contracted for, or otherwise existing with respect to, the Trust or the funds.

The Amended and Restated Agreement and Declaration of Trust provides that the Trust shall not have any claim against shareholders except for the payment of the purchase price of shares and requires that each agreement, obligation, or instrument entered into or executed by the Trust or the Trustees relating to the Trust or to a fund shall include a provision limiting the obligations created thereby to the Trust or to one or more funds and its or their assets. The Amended and Restated Agreement and Declaration of Trust further provides that shareholders of a fund shall not have a claim on or right to any assets belonging to any other fund.

#### DISCLOSURE OF PORTFOLIO INFORMATION
The Trustees of the Putnam funds have adopted policies with respect to the disclosure of the fund's portfolio holdings by the fund, the Investment Manager, or their affiliates. These policies provide that information about the fund's portfolio generally may not be released to any party prior to (i) the day after the posting of such information on franklintempleton.com, (ii) the filing of the information with the SEC in a required filing, or (iii) the dissemination of such information to all shareholders simultaneously. Certain limited exceptions pursuant to the fund's policies are described below. In addition, these policies do not apply to the sharing of fund portfolio holdings information with investment personnel involved in the management of other funds that invest in such fund and that are managed by the Investment Manager or its affiliates. The Trustees will periodically receive reports from the fund's Chief Compliance Officer regarding the operation of these policies and procedures, including any arrangements to make non-public disclosures of the fund's portfolio information to third parties. The Investment Manager and its affiliates are not permitted to receive compensation or other consideration in connection with disclosing information about the fund's portfolio holdings to third parties.

#### Public Disclosures
On each Business Day, before commencement of trading in shares on the listing exchange, each fund will disclose its complete portfolio holdings on its website. The fund will disclose its top 10 holdings and related portfolio information monthly beginning on or after 5 business days after the end of each month on franklintempleton.com. The find will also disclose on its website its complete holdings as of the end of the prior month on a monthly basis beginning on or before the 15th calendar day after the end of each month..

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The fund will also file its portfolio holdings with the SEC twice each year on Form N-CSR (with respect to each annual period and semi-annual period). In addition, the fund will file reports of portfolio holdings on Form N-PORT 60 days after each fiscal quarter (for the respective fiscal quarter), with the schedule of portfolio holdings filed on Form N-PORT for the third month of the first and third fiscal quarter made publicly available. Shareholders may obtain the Form N-CSR filings and the publicly available portions of Form N-PORT filings on the SEC's website at http://www.sec.gov. Form N-CSR filings are available upon filing and information reported on Form N-PORT filings for the third month of a fiscal quarter is available 60 days after the end of the fiscal quarter. You may call the SEC at 1-800-SEC-0330 for information about the SEC's website.

The Investment Manager or its affiliates may include fund portfolio information that has already been made public through a Web posting or SEC filing in marketing literature and other communications to shareholders, advisors or other parties, provided that, in the case of information made public through the Web, the information is disclosed no earlier than the day after the date of posting to the website.

#### Other Disclosures
In order to address potential conflicts between the interest of fund shareholders, on the one hand, and those of the Investment Manager, Franklin Distributors or any affiliated person of those entities or of the fund, on the other hand, the fund's policies require that non-public disclosures of information regarding the fund's portfolio may be made only if there is a legitimate business purpose consistent with fiduciary duties to all shareholders of the fund. In addition, the party receiving the non-public information must sign a non-disclosure agreement unless otherwise approved by the Chief Compliance Officer of the fund. Arrangements to make non-public disclosures of the fund's portfolio information must be approved by the Chief Compliance Officer of the fund. The Chief Compliance Officer will report on an ongoing basis to a committee of the fund's Board of Trustees consisting only of Trustees who are not "interested persons" of the fund or the Investment Manager regarding any such arrangement that the fund may enter into with third parties other than service providers to the fund.

Daily portfolio composition files ("PCFs") that identify a basket of specified securities that may overlap with the actual or expected portfolio holdings of a fund will be provided as frequently as daily to each fund's service providers to facilitate the provision of services to each fund and to certain other entities in connection with the dissemination of information necessary for transactions in Creation Units. Each business day prior to the opening of the listing exchange, a PCF containing a list of the names and the required number of shares of each Deposit Security for each fund will be provided for dissemination through the facilities of the NSCC; through other fee-based services to NSCC members; subscribers to the fee-based services, including Authorized Participants; and to entities that publish and/or analyze such information in connection with the process of purchasing or redeeming Creation Units or trading fund shares in the secondary market. In addition to making PCFs available to the NSCC, each fund will disclose the PCF or portions thereof as frequently as daily on franklintempleton.com.

The fund may also periodically provide non-public information about its portfolio holdings to rating and ranking organizations and other providers of industry data, such as Lipper Inc., Morningstar Inc., Bloomberg and Thomson Reuters, in connection with those firms' research on and classification of the fund and in order to gather information about how the fund's attributes (such as volatility, turnover, and expenses) compare with those of peer funds. The fund may also periodically provide non-public information about its portfolio holdings to consultants that provide portfolio analysis services or other investment research or trading analytics. Such recipients of portfolio holdings include Barclays, FactSet, ITG, Trade Informatics, ConsenSys, ENSO Financial Analytics, Bloomberg and Credit Suisse. Any such rating, ranking, or consulting or other firm would be required to keep the fund's portfolio information confidential and would be prohibited from trading based on the information or otherwise using the information except as necessary in providing services to the fund. Such firms may receive portfolio holdings information only from certain funds and such information may be provided in greater or lesser detail depending on the nature of the services provided by the relevant firm.

In addition, the Investment Manager offers model separately managed account portfolios to sponsoring broker-dealers ("Program Sponsors") that in turn offer those portfolios to their customers. The Investment Manager also provides investment advisory services to retail separately managed account clients through managed account programs sponsored by broker-dealers and other financial intermediaries (together, "SMAs"). The model SMA portfolios may follow investment programs that are similar or identical in material respects to those of specific Putnam funds or other client accounts and, as a result, there may be substantial overlap between the securities holdings and transactions of an model SMA portfolio and those of any similarly managed funds or accounts. If such model portfolios are substantially similar to those of a U.S. registered fund, such model portfolios may be provided to Program Sponsors so long as: (1) the recipient Program Sponsors has executed a non-disclosure agreement or other agreement containing or incorporating confidentiality provisions that restrict the use and dissemination of confidential

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portfolio holdings information received by the Program Sponsor as described in the following sentence, or other provisions that impose similar restrictions on such use and dissemination and*,* (2) the model SMA portfolio has been deemed sufficiently liquid by the Investment Manager's liquidity committee or the Investment Manager, as determined in their reasonable judgment. Such agreement must provide that the Program Sponsor agrees that: (1) it is subject to a duty of confidentiality; (2) it will use confidential model portfolio information only to the extent necessary to perform its obligations under the agreement; and (3) it will not disclose confidential model portfolio information except to personnel or parties who have a need to know such confidential information in connection with, or in order to fulfill the purposes contemplated by, the agreement.

#### INFORMATION SECURITY RISKS
*Cyber security risk.* With the increased use of interconnected technologies such as the Internet and the dependence on computer systems to perform necessary business functions, investment companies such as the fund and its service providers may be prone to operational, information security and related risks resulting from third-party cyber-attacks and/or other technological malfunctions. Cyber-attacks may include stealing or corrupting data maintained online or digitally, preventing legitimate users from accessing information or services on a website, releasing confidential information without authorization, and causing operational disruption. Successful cyber-attacks against, or security or technology breakdowns of, the fund or its adviser, custodian, transfer agent, or other affiliated or third-party service providers may adversely affect the fund and its shareholders. For example, cyber-attacks may interfere with the processing of shareholder transactions, impact the fund's ability to calculate its net asset value, cause the release of private shareholder information or confidential fund information, impede trading, cause reputational damage, and subject the fund or others to regulatory fines, penalties or financial losses, reimbursement or other compensation costs, and additional compliance costs. Similar types of cyber security risks also are present for issuers of securities in which the fund invests, which could result in material adverse consequences for such issuers, and may cause the fund's investment in such securities to lose value. The fund and the Investment Manager or sub-adviser (as applicable) may have limited ability to prevent or mitigate cyber-attacks or security or technology breakdowns affecting the fund's third-party service providers. While the Investment Manager and sub-adviser (as applicable) have established business continuity plans and systems designed to prevent or reduce the impact of cyber-attacks, such plans and systems are subject to inherent limitations.

#### PROXY VOTING GUIDELINES AND PROCEDURES
The Board of Trustees have delegated proxy voting authority for the securities held in the funds' portfolios to Putnam Management and have approved Putnam Management's current proxy voting guidelines and procedures. Putnam Management retained an independent proxy voting service to assist in vote analysis, implementation, recordkeeping and reporting services. The proxy voting guidelines summarize Putnam Management's positions on various issues of concern to investors and provide direction to the proxy voting service as to how fund portfolio securities should be voted on proposals dealing with particular issues. The proxy voting procedures explain the role of Putnam Management personnel and the proxy voting service in the proxy voting process, describe the procedures for referring matters involving investment considerations to the investment personnel of Putnam Management, and describe the procedures for handling potential conflicts of interest. Putnam Management's proxy voting guidelines and procedures are included in this SAI as Appendix A. The Trustees will review the funds' proxy voting from time to time and will review annually Putnam Management's proxy voting guidelines and procedures. Information regarding how the funds' proxies relating to portfolio securities were voted during the 12-month period ended June 30, 2024 is available on www.franklintempleton.com, and on the SEC's website at 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 Putnam Management's proxy voting guidelines and procedures by calling Putnam's Shareholder Services at 1-800-225-1581.

#### SECURITIES RATINGS
The ratings of securities in which the fund may invest will be measured at the time of purchase and, to the extent a security is assigned a different rating by one or more of the various rating agencies, the Investment Manager may use the highest rating assigned by any agency. The Investment Manager will not necessarily sell an investment if its rating is reduced. Below are descriptions of ratings, as provided by the rating agencies, which represent opinions as to the quality of various debt instruments.

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#### Moody's Investors Service, Inc.
**Global Long-Term Rating Scale** (original maturity of 1 year or more)

**Aaa** – Obligations rated Aaa are judged to be of the highest quality, subject to the lowest level of credit risk.

**Aa** – Obligations rated Aa are judged to be of high quality and are subject to very low credit risk.

**A** – Obligations rated A are judged to be upper-medium grade and are subject to low credit risk.

**Baa** – Obligations rated Baa are judged to be medium-grade and subject to moderate credit risk and as such may possess certain speculative characteristics.

**Ba** – Obligations rated Ba are judged to be speculative and are subject to substantial credit risk.

**B** – Obligations rated B are considered speculative and are subject to high credit risk.

**Caa** – Obligations rated Caa are judged to be speculative of poor standing and are subject to very high credit risk.

**Ca** – Obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest.

**C** – Obligations rated C are the lowest rated and are typically in default, with little prospect for recovery of principal or interest.

Note: Moody's appends numerical modifiers 1, 2, and 3 to each generic rating classification from Aa through Caa. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category. Additionally, a "(hyb)" indicator is appended to all ratings of hybrid securities issued by banks, insurers, finance companies, and securities firms.

By their terms, hybrid securities allow for the omission of scheduled dividends, interest, or principal payments, which can potentially result in impairment if such an omission occurs. Hybrid securities may also be subject to contractually allowable write-downs of principal that could result in impairment. Together with the hybrid indicator, the long-term obligation rating assigned to a hybrid security is an expression of the relative credit risk associated with that security.

**Global Short-Term Rating Scale** (original maturity of 13 months or less)

**P-1** – Issuers (or supporting institutions) rated Prime-1 have a superior ability to repay short-term debt obligations.

**P-2** – Issuers (or supporting institutions) rated Prime-2 have a strong ability to repay short-term debt obligations.

**P-3** – Issuers (or supporting institutions) rated Prime-3 have an acceptable ability to repay short-term obligations.

**NP** – Issuers (or supporting institutions) rated Not Prime do not fall within any of the Prime rating categories.

US Municipal Short-Term Obligation Ratings

**MIG 1** – This designation denotes superior credit quality. Excellent protection is afforded by established cash flows, highly reliable liquidity support, or demonstrated broad-based access to the market for refinancing.

**MIG 2** – This designation denotes strong credit quality. Margins of protection are ample, although not as large as in the preceding group.

**MIG 3** – This designation denotes acceptable credit quality. Liquidity and cash-flow protection may be narrow, and market access for refinancing is likely to be less well-established.

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**SG** – This designation denotes speculative grade credit quality. Debt instruments in this category may lack sufficient margins of protection.

#### US Municipal Demand Obligation Ratings
**VMIG 1** – This designation denotes superior credit quality. Excellent protection is afforded by the superior short-term credit strength of the liquidity provider and structural and legal protections that ensure the timely payment of purchase price upon demand.

**VMIG 2** – This designation denotes strong credit quality. Good protection is afforded by the strong short-term credit strength of the liquidity provider and structural and legal protections that ensure the timely payment of purchase price upon demand.

**VMIG 3** – This designation denotes acceptable credit quality. Adequate protection is afforded by the satisfactory short-term credit strength of the liquidity provider and structural and legal protections that ensure the timely payment of purchase price upon demand.

**SG** – This designation denotes speculative-grade credit quality. Demand features rated in this category may be supported by a liquidity provider that does not have an investment grade short-term rating or may lack the structural and/or legal protections necessary to ensure the timely payment of purchase price upon demand.

#### Standard & Poor's
**Long-Term Issue Credit Ratings** (original maturity of one year or more)

**AAA** – An obligation rated 'AAA' has the highest rating assigned by Standard & Poor's. The obligor's capacity to meet its financial commitment on the obligation is extremely strong.

**AA** – An obligation rated 'AA' differs from the highest-rated obligations only to a small degree. The obligor's capacity to meet its financial commitment on the obligation is very strong.

**A** – An obligation rated 'A' is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories. However, the obligor's capacity to meet its financial commitment on the obligation is still strong.

**BBB** – An obligation rated 'BBB' exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.

**BB; B; CCC; CC** and **C** – Obligations rated 'BB', 'B', 'CCC', 'CC', and 'C' are regarded as having significant speculative characteristics. 'BB' indicates the lowest degree of speculation and 'C' the highest. While such obligations will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions.

**BB** – An obligation rated 'BB' is less vulnerable to nonpayment than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation.

**B** – An obligation rated 'B' is more vulnerable to nonpayment than obligations rated 'BB', but the obligor currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial, or economic conditions will likely impair the obligor's capacity or willingness to meet its financial commitment on the obligation.

**CCC** – An obligation rated 'CCC' is currently vulnerable to nonpayment, and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation.

**CC** – An obligation rated 'CC' is currently highly vulnerable to nonpayment. The 'CC' rating is used when a default has not yet occurred, but Standard & Poor's expects default to be a virtual certainty, regardless of the anticipated time to default.

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**C** – An obligation rated 'C' is currently highly vulnerable to nonpayment, and the obligation is expected to have lower relative seniority or lower ultimate recovery compared to obligations that are rated higher.

**D** – An obligation rated 'D' is in default or in breach of an imputed promise. For non-hybrid capital instruments, the 'D' rating category is used when payments on an obligation are not made on the date due, unless Standard & Poor's believes that such payments will be made within five business days in the absence of a stated grace period or within the earlier of the stated grace period or 30 calendar days. The 'D' rating also will be used upon the filing of a bankruptcy petition or the taking of similar action and where default on an obligation is a virtual certainty, for example due to automatic stay provisions. An obligation's rating is lowered to 'D' if it is subject to a distressed exchange offer.

**NR** – This indicates that no rating has been requested, or that there is insufficient information on which to base a rating, or that Standard & Poor's does not rate a particular obligation as a matter of policy.

Note: The ratings from 'AA' to 'CCC' may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories.

**Short-Term Issue Credit Ratings** (original maturity of 365 days or less)

**A-1** – A short-term obligation rated'A-1' is rated in the highest category by Standard & Poor's. The obligor's capacity to meet its financial commitment on the obligation is strong. Within this category, certain obligations are designated with a plus sign (+). This indicates that the obligor's capacity to meet its financial commitment on these obligations is extremely strong.

**A-2** – A short-term obligation rated 'A-2' is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rating categories. However, the obligor's capacity to meet its financial commitment on the obligation is satisfactory.

**A-3** – A short-term obligation rated 'A-3' exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.

**B** – A short-term obligation rated 'B' is regarded as vulnerable and has significant speculative characteristics. The obligor currently has the capacity to meet its financial commitments; however, it faces major ongoing uncertainties which could lead to the obligor's inadequate capacity to meet its financial commitments.

**C** – A short-term obligation rated 'C' is currently vulnerable to nonpayment and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation.

**D** – A short-term obligation rated 'D' is in default or in breach of an imputed promise. For non-hybrid capital instruments, the 'D' rating category is used when payments on an obligation are not made on the due date, unless Standard & Poor's believes that such payments will be made within any stated grace period. However, any stated grace period longer than five business days will be treated as five business days. The 'D' rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action and where default on an obligation is a virtual certainty, for example due to automatic stay provisions. An obligation's rating is lowered to 'D' if it is subject to a distressed exchange offer.

**Municipal Short-Term Note Ratings** (original maturity of 3 years or less)

**SP-1** – Strong capacity to pay principal and interest. An issue determined to possess a very strong capacity to pay debt service is given a plus (+) designation.

**SP-2** – Satisfactory capacity to pay principal and interest, with some vulnerability to adverse financial and economic changes over the term of the notes.

**SP-3** – Speculative capacity to pay principal and interest.

#### Fitch Ratings

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#### Long-Term Rating Scales
**AAA** – Highest credit quality. 'AAA' ratings denote the lowest expectation of default risk. They are assigned only in cases of exceptionally strong capacity for payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events.

**AA** – Very high credit quality. 'AA' ratings denote expectations of very low default risk. They indicate very strong capacity for payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events.

**A** – High credit quality. 'A' ratings denote expectations of low default risk. The capacity for payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to adverse business or economic conditions than is the case for higher ratings.

**BBB** – Good credit quality. 'BBB' ratings indicate that expectations of default risk are currently low. The capacity for payment of financial commitments is considered adequate but adverse business or economic conditions are more likely to impair this capacity.

**BB** – Speculative. 'BB' ratings indicate an elevated vulnerability to default risk, particularly in the event of adverse changes in business or economic conditions over time; however, business or financial flexibility exists which supports the servicing of financial commitments.

**B** – Highly speculative. 'B' ratings indicate that material default risk is present, but a limited margin of safety remains. Financial commitments are currently being met; however, capacity for continued payment is vulnerable to deterioration in the business and economic environment.

**CCC** – Substantial credit risk. Default is a real possibility.

**CC** – Very high levels of credit risk. Default of some kind appears probable.

**C** – Exceptionally high levels of credit risk. Default is imminent or inevitable, or the issuer is in standstill. Conditions that are indicative of a 'C' category rating for an issuer include:

a. the issuer has entered into a grace or cure period following non-payment of a material financial obligation;

b. the issuer has entered into a temporary negotiated waiver or standstill agreement following a payment default on a material financial obligation; or

c. Fitch Ratings otherwise believes a condition of 'RD' or 'D' to be imminent or inevitable, including through the formal announcement of a distressed debt exchange.

**RD** – Restricted default. 'RD' ratings indicate an issuer that in Fitch Ratings' opinion has experienced an uncured payment default on a bond, loan or other material financial obligation but which has not entered into bankruptcy filings, administration, receivership, liquidation or other formal winding-up procedure, and which has not otherwise ceased operating. This would include:

a. the selective payment default on a specific class or currency of debt;

b. the uncured expiry of any applicable grace period, cure period or default forbearance period following a payment default on a bank loan, capital markets security or other material financial obligation;

c. the extension of multiple waivers or forbearance periods upon a payment default on one or more material financial obligations, either in series or in parallel; or

d. execution of a distressed debt exchange on one or more material financial obligations.

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**D** – Default. 'D' ratings indicate an issuer that in Fitch Ratings' opinion has entered into bankruptcy filings, administration, receivership, liquidation or other formal winding-up procedure, or which has otherwise ceased business.

Default ratings are not assigned prospectively to entities or their obligations; within this context, non-payment on an instrument that contains a deferral feature or grace period will generally not be considered a default until after the expiration of the deferral or grace period, unless a default is otherwise driven by bankruptcy or other similar circumstance, or by a distressed debt exchange.

"Imminent" default typically refers to the occasion where a payment default has been intimated by the issuer, and is all but inevitable. This may, for example, be where an issuer has missed a scheduled payment, but (as is typical) has a grace period during which it may cure the payment default. Another alternative would be where an issuer has formally announced a distressed debt exchange, but the date of the exchange still lies several days or weeks in the immediate future.

In all cases, the assignment of a default rating reflects the agency's opinion as to the most appropriate rating category consistent with the rest of its universe of ratings, and may differ from the definition of default under the terms of an issuer's financial obligations or local commercial practice.

Note: The modifiers "+" or "-" may be appended to a rating to denote relative status within major rating categories. Such suffixes are not added to the 'AAA' Long-Term Issuer Default Rating (IDR) category, or to Long-Term IDR categories below 'B'.

#### Short-Term Ratings
**F1** – Highest short-term credit quality. Indicates the strongest intrinsic capacity for timely payment of financial commitments; may have an added "+" to denote any exceptionally strong credit feature.

**F2** – Good short-term credit quality. Good intrinsic capacity for timely payment of financial commitments.

**F3** – Fair short-term credit quality. The intrinsic capacity for timely payment of financial commitments is adequate.

**B** – Speculative short-term credit quality. Minimal capacity for timely payment of financial commitments, plus heightened vulnerability to near term adverse changes in financial and economic conditions.

**C** – High short-term default risk. Default is a real possibility.

**RD** – Restricted default. Indicates an entity that has defaulted on one or more of its financial commitments, although it continues to meet other financial obligations, typically applicable to entity ratings only.

**D** – Default. Indicates a broad-based default event for an entity, or the default of a short-term obligation.

#### Appendix A

### Putnam Investments
<u>Proxy Voting Procedures</u> 

*Introduction and Summary* 

Many of Putnam's investment management clients have delegated to Putnam the authority to vote proxies for shares in the client accounts Putnam manages. Putnam believes that the voting of proxies can be an important tool for institutional investors to promote best practices in corporate governance and votes all proxies in the best interests of its clients as investors. In Putnam's

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view, strong corporate governance policies, most notably oversight by an independent board of qualified directors, best serve investors' interests. Putnam will vote proxies and maintain records of voting of shares for which Putnam has proxy voting authority in accordance with its fiduciary obligations and applicable law.

Putnam's voting policies are rooted in our views that (1) strong, independent corporate governance is important to long-term company financial performance, and (2) long-term investors' active engagement with company management, including through the proxy voting process, strengthens issuer accountability and overall market discipline, potentially reducing risk and improving returns over time. Our voting program is offered as a part of our investment management services, at no incremental fee to Putnam, and, while there can be no guarantees, it is intended to offer potential investment benefits over a long-term horizon. Our voting policies are designed with investment considerations in mind, not as a means to pursue particular political, social, or other goals. As a result, we may not support certain proposals whose costs to the issuer (including implementation costs, practicability, and other factors), in Putnam's view, outweigh their investment merits.

This memorandum sets forth Putnam's policies for voting proxies. It covers all accounts for which Putnam has proxy voting authority. These accounts include the Putnam Mutual Funds<sup>1</sup> and Putnam Exchange-Traded Funds, US and international institutional accounts and funds managed or sub-advised by The Putnam Advisory Company, LLC and Putnam Fiduciary Trust Company, LLC. In addition, the policies include US mutual funds and other accounts sub-advised by Putnam Investment Management, LLC.<sup>2</sup>

*Proxy Committee* 

Putnam has a Proxy Committee composed of senior professionals, including from the Putnam Equity investment team and the Putnam Equity Sustainability Strategy group. The Chief Investment Officer of Putnam Equity appoints the members of the Proxy Committee. The Proxy Committee is responsible for setting general policy as to proxies. Specifically, the Committee:

1. Reviews these procedures and the Proxy Voting Guidelines annually and approves any amendments considered to be advisable.

2. Considers special proxy issues as they may from time to time arise.

*3.* Must approve all vote overrides recommended by investment professionals.

*Proxy Voting Administration* 

The Putnam Sustainability Strategy group administers Putnam's proxy voting through a Proxy Voting Team. The Proxy Voting Team has the following duties:

1. Annually prepares the Proxy Voting Guidelines and distributes them to the Proxy Committee for review.

2. Coordinates the Proxy Committee's review of any new or unusual proxy issues and serves as Secretary thereto.

3. Manages the process of referring issues to portfolio managers for voting instructions.

4. Oversees the work of any third-party vendor hired to process proxy votes (as of the date of these procedures Putnam has engaged Institutional Shareholder Services (ISS) to process proxy votes) and the process of setting up the voting process with ISS and custodial banks for new clients.

<sup>1</sup> Effective January 27, 2023, the Board of Trustees of the Putnam Mutual Funds delegated proxy voting authority to Putnam Investment Management, LLC, the investment manager to the Putnam Mutual Funds.

<sup>2</sup> The Putnam Proxy Voting Procedures and Guidelines will apply also to certain funds and institutional and other accounts managed by Franklin Advisers, Inc. ("FAV") but formerly managed or sub-advised by one of the Putnam adviser entities identified above, pursuant to sub-advisory agreements in effect from time to time between FAV and the relevant Putnam entity(ies).

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5. Coordinates responses to investment professionals' questions on proxy issues and proxy policies, including forwarding specialized proxy research from ISS and other vendors and forwards information to investment professionals prepared by other areas at Putnam.

6. Implements the exception process with respect to referred items on securities held solely in accounts managed by the Global Asset Allocation ("GAA") team within Franklin Templeton Investment Solutions described in more detail in the Proxy Referral section below.

7. Maintains required records of proxy votes on behalf of the appropriate Putnam client accounts.

8. Prepares and distributes reports required by Putnam clients.

*Proxy Voting Guidelines* 

Putnam maintains written voting guidelines ("Guidelines") setting forth voting positions determined by the Proxy Committee on those issues believed most likely to arise day to day. The Guidelines may call for votes to be cast normally in favor of or opposed to a matter or may deem the matter an item to be referred to investment professionals on a case-by-case basis. A copy of the Guidelines is attached to this memorandum as Exhibit A.

In light of our views on the importance of issuer governance and investor engagement, which we believe are applicable across our various strategies and clients, regardless of a specific portfolio's investment objective, Putnam will vote all proxies in accordance with the Guidelines, subject to two exceptions as follows:

1. If the portfolio managers of client accounts holding the stock of a company with a proxy vote believe that following the Guidelines in any specific case would not be in the clients' best interests, they may request the Proxy Voting Team not to follow the guidelines in such case. The request must be in writing and include an explanation of the rationale for doing so. The Proxy Voting Team will review any such request with the Proxy Committee (or, in cases with limited time, with the Chair of the Proxy Committee acting on the Proxy Committee's behalf) prior to implementing the request.

2. Putnam may accept instructions to vote proxies under client specific guidelines subject to review and acceptance by the Investment Division and the Legal and Compliance Department.

*Other* 

1. Putnam may elect not to vote when the security is no longer held.

2. Putnam will **abstain** on items that require case-by-case review when a vote recommendation from the appropriate investment professional(s) cannot be obtained due to restrictive voting deadlines or other prohibitive operational or administrative requirements.

3. Where securities held in Putnam client accounts, including the Putnam mutual funds, have been loaned to third parties in connection with a securities lending program administered by Putnam (through securities lending agents overseen by Putnam), Putnam has instructed lending agents to recall U.S. securities on loan to vote proxies, in accordance with Putnam's securities lending procedures. Due to differences in non-U.S. markets, Putnam does not currently seek to recall non-U.S. securities on loan. In addition, where Putnam does not administer a client's securities lending program, this recall policy does not apply, since Putnam generally does not have information on loan details or authority to effect recalls in those cases. It is possible that, for impracticability or other reasons, a recalled security may not be returned to the relevant custodian in time to allow Putnam to vote the relevant proxy.

4. Putnam will make its reasonable best efforts to vote all proxies except when impeded by circumstances that are reasonably beyond its control and responsibility, such as custodial proxy voting services, in part or whole, not available or not established by a client, or custodial error.

*Proxy Voting Referrals* 

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Under the Guidelines, certain proxy matters will be referred to Portfolio Managers. The Portfolio Manager receiving the referral request may delegate the vote decision to an appropriate Analyst from among a list of eligible analysts (such list to be approved by the Chief Investment Officer of the Putnam Equity group and the Director of Equity Research for the Putnam Equity group). The Analyst will be required to make the affirmation and disclosures identified in (3) below. Normally specific referral items will be referred to the portfolio team leader (or another member of the portfolio team he or she designates) whose accounts hold the greatest number of shares of the issuer of the proxies through the Proxy Referral Administration Database. The referral request contains (1) a field that will be used by the portfolio team leader or member for recommending a vote on each referral item, (2) a field for describing any contacts relating to the proxy referral item the portfolio team may have had with any Franklin Templeton employee outside Putnam Equity or with any person other than a proxy solicitor acting in the normal course of proxy solicitation, and (3) a field for portfolio managers to affirm that they are making vote recommendations in the best interest of client accounts and have disclosed to Compliance any potential conflicts of interest relevant to their vote recommendation.

Putnam may vote any referred items on securities held solely in accounts managed by the GAA team within Franklin Templeton Investment Solutions (and not held by any other investment product team) in accordance with the recommendation of Putnam's third-party proxy voting service provider. The Proxy Voting Team will first give the relevant portfolio manager(s) on the GAA team the opportunity to review the referred items and vote on them. If the portfolio manager(s) on the GAA team do not decide to make any active voting decision on any of the referred items, the items will be voted in accordance with the service provider's recommendation. If the security is also held by other investment teams at Putnam Equity, the items will be referred to the largest holder who is not a member of the GAA team.

The portfolio team leader or members who have been requested to provide a recommendation on a proxy referral item will complete the referral request. Upon receiving each completed referral request from the applicable Portfolio Manager or Analyst, the Proxy Voting Team will review the completed request for accuracy and completeness, and will follow up with investment personnel as appropriate.

*Conflicts of Interest* 

A potential conflict of interest may arise when voting proxies of an issuer which has a significant business relationship with Putnam. For example, Putnam could manage a defined benefit or defined contribution pension plan for the issuer. Putnam's policy is to vote proxies based solely on the investment merits of the proposal. In order to guard against conflicts, the following procedures have been adopted:

1. The Proxy Committee is composed of senior professionals, including Portfolio Managers in Putnam Equity and the Putnam Equity Sustainability Strategy group. None of these individuals or groups reports to Franklin Templeton's marketing businesses.

2. No Franklin Templeton employee outside Putnam Equity may contact any portfolio manager about any proxy vote without first contacting the Proxy Voting Team or a senior lawyer in the Legal and Compliance Department. There is no prohibition on employees seeking to communicate investment-related information to investment professionals except for Putnam's restrictions on dissemination of material, non-public information. However, the Proxy Voting Team will coordinate the delivery of such information to investment professionals to avoid appearances of conflict.

3. Investment professionals responding to referral requests must disclose any contacts with third parties other than normal contact with proxy solicitation firms and must affirm that they are making vote recommendations in the best interest of client accounts and have disclosed to the Proxy Voting Team any potential conflicts of interest relevant to their vote recommendation.

4. The Proxy Voting Team will review the name of the issuer of each proxy that contains a referral item against various sources of Putnam business relationships maintained by the Legal and Compliance Department or Client Service for potential material business relationships (i.e., conflicts of interest). For referrals, the Proxy Voting Team will complete the Proxy Voting Conflict of Interest Disclosure Form (attached as Exhibit B and C) via the Proxy Referral Administration Database and will prepare a quarterly report for the Putnam Chief Compliance Officer identifying all completed Conflict of Interest Disclosure forms.

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5. Putnam's Proxy Voting Guidelines may only be overridden with the written recommendation from a member of the Investment Division and concurrence of the Proxy Committee (or, in cases with limited time, with the Chair of the Proxy Committee on the Proxy Committee's behalf).

*Recordkeeping* 

The Putnam Equity Sustainability Strategy Group will retain copies of the following books and records:

1. A copy of the Proxy Voting Procedures and Guidelines as are from time to time in effect;

2. A copy of each proxy statement received with respect to securities in client accounts;

3. Records of each vote cast for each client;

4. Internal documents generated in connection with a proxy referral, such as emails, memoranda, etc.

5. Written reports to clients on proxy voting and all client requests for information and Putnam's response.

All records will be maintained for seven years. A proxy vendor may on Putnam's behalf maintain the records noted in 2 and 3 above if it commits to providing copies promptly upon request.

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<u>Exhibit A to Proxy Procedures</u> 

### Putnam Investments Proxy Voting Guidelines
The proxy voting guidelines below summarize Putnam's positions on various issues of concern to investors and indicate how client portfolio securities will be voted on proposals dealing with a particular issue. The proxy voting service is instructed to vote all proxies relating to client portfolio securities in accordance with these guidelines, except as otherwise instructed by the Proxy Voting Team.

Putnam's voting policies are rooted in our views that (1) strong, independent corporate governance is important to long-term company financial performance, and (2) long-term investors' active engagement with company management, including through the proxy voting process, strengthens issuer accountability and overall market discipline, potentially reducing risk and improving returns over time. Our voting program is offered as a part of our investment management services, at no incremental fee to Putnam, and, while there can be no guarantees, it is intended to offer potential investment benefits over a long-term horizon. Our voting policies are designed with investment considerations in mind, not as a means to pursue particular political, social, or other goals. As a result, we may not support certain proposals whose costs to the issuer (including implementation costs, practicability, and other factors), in Putnam's view, outweigh their investment merits.

These proxy voting policies are intended to be decision-making guidelines. The guidelines are not exhaustive and do not include all potential voting issues. In addition, as contemplated by and subject to Putnam's Proxy Voting Procedures, because proxy issues and the circumstances of individual companies are so varied, portfolio teams may recommend votes that may vary from the general policy choices set forth in the guidelines.

The following guidelines are grouped according to the types of proposals generally presented to shareholders. Part I deals with proposals which have been approved and recommended by a company's board of directors. Part II deals with proposals submitted by shareholders for inclusion in proxy statements. Part III addresses unique considerations pertaining to non-US issuers.

I. Board-Approved Proposals

Proxies will be voted **for** board-approved proposals, except as follows:

A. **Matters Relating to the Board of Directors** 

#### Uncontested Election of Directors
The board of directors has the important role of overseeing management and its performance on behalf of shareholders. When evaluating a company's board, Putnam may consider the diversity of professional backgrounds and personal characteristics. Putnam believes that companies generally benefit from diversity on the board, including diversity with respect to gender, ethnicity, race, skills, perspectives and experience.

Proxies will be voted **for** the election of the company's nominees for directors (and/or subsidiary directors) and **for** board-approved proposals on other matters relating to the board of directors (provided that such nominees and other matters have been approved by an independent nominating committee), except as follows:

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| Ø | Putnam will **withhold votes** from the entire board of directors if:  |

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● The board does not have a majority of independent directors,

● The board does not have nominating, audit and compensation committees composed solely of independent directors, or

● The board has more than <u>15</u> members or fewer than <u>five</u> members, absent special circumstances.

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| Ø | Putnam may refrain from withholding votes from the board due to insufficient key committee independence due to director resignation, change in board structure, or other specific circumstances, provided that the company has stated (for example in an 8-K), or it can otherwise be determined, that the board will address committee composition to ensure compliance with the applicable corporate governance code in a timely manner after the shareholder meeting and the company has a history of appropriate board independence.  |

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Unless otherwise indicated, for the purposes of determining whether a board has a majority of independent directors and independent nominating, audit, and compensation committees, an independent director is a director who (1) meets all requirements to serve as an independent director of a company under the final NYSE Corporate Governance Rules (e.g., no material business relationships with the company and no present or recent employment relationship with the company (including employment of an immediate family member as an executive officer)), and (2) has not accepted directly or indirectly any consulting, advisory, or other compensatory fee (excluding immaterial fees for transactional services as defined by the NYSE Corporate Governance rules) from the company other than in his or her capacity as a member of the board of directors or any board committee. Putnam believes that the receipt of such compensation for services other than service as a director raises significant independence issues.

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| Ø | Putnam will **withhold votes** from any nominee for director who is considered an independent director by the company and who has received compensation within the last three years from the company for the provision of professional services (e.g., investment banking, consulting, legal or financial advisory fees).  |

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| Ø | Putnam will **withhold votes** from any nominee for director who attends fewer than 75% of board and committee meetings. Putnam may refrain from withholding votes on a **case-by-case** basis if a valid reason for the absence exists, such as illness, personal emergency, potential conflict of interest, etc.  |

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| Ø | Putnam will **withhold votes** from any incumbent nominee for director who served on a board that has not acted to implement a policy requested in a shareholder proposal that received the support of a majority of the votes actually cast on the matter at its previous two annual meetings, or  |

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| Ø | Putnam will **withhold votes** from any incumbent nominee for director who served on a board that adopted, renewed, or made a material adverse modification to a shareholder rights plan (commonly referred to as a "poison pill") without shareholder approval during the current or prior calendar year. (This is applicable to any type of poison pill, for example, advance-warning type pill, EGM pill, and Trust Defense Plans in Japan.)  |

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Putnam will refrain from opposing the board members who served at the time of the adoption of the poison pill if the duration is one year or less, if the plan contains other suitable restrictions; or if the company publicly discloses convincing rationale for its adoption and seeks shareholder approval of future renewals of the poison pill. (Suitable restrictions could include but are not limited to, a higher threshold for passive investors. Convincing rationale could include circumstances such as, but not limited to, extreme market disruption or conditions, stock volatility, substantial merger, active investor interest, or takeover attempts.)

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| Ø | Putnam will vote on a **case-by-case** basis and may consider voting against the Nominating Committee Chair if there is a lack of evidence of board diversity.  |

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Putnam is concerned about over-committed directors. In some cases, directors may serve on too many boards to make a meaningful contribution. This may be particularly true for senior executives of public companies (or other directors with substantially full-time employment) who serve on more than a few outside boards.

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| Ø | Putnam will vote **against** any non-executive nominee for director who serves on more than four (4) public company boards, except where Putnam would otherwise be withholding votes for the entire board of directors. For the purpose of this guideline, boards of affiliated registered investment companies and other similar entities such as UCITS will count as one board. Generally, Putnam will withhold support from directors serving on more than four unaffiliated public company boards, although an exception may be made in the case of a director who represents an investing firm with the sole purpose of managing a portfolio of investments that includes the company.  |

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| Ø | Putnam will **withhold** votes from any nominee for director who serves as an executive officer of any public company ("home company") while serving on more than two (2) public company board**s** other than the home company board. (Putnam will withhold votes from the nominee at each company where Putnam client portfolios own shares.) In addition, if Putnam client portfolios are shareholders of the executive's home company, Putnam will withhold votes from members of the company's governance committee. For the purpose of this guideline, boards of affiliated registered investment companies and other similar entities such as UCITS will count as one board.  |

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| Ø | Putnam will **withhold votes** from any nominee for director of a public company (Company A) who is employed as a senior executive of another public company (Company B) if a director of Company B serves as a senior executive of Company A (commonly referred to as an "interlocking directorate").  |

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Board independence depends not only on its members' individual relationships, but also the board's overall attitude toward management. Independent boards are committed to good corporate governance practices and, by providing objective independent judgment, enhancing shareholder value. Putnam may withhold votes on a case-by-case basis from some or all directors that, through their lack of independence, have failed to observe good corporate governance practices or, through specific corporate action, have demonstrated a disregard for the interest of shareholders.

Note: Designation of executive director is based on company disclosure.

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| Ø | Putnam will vote **against** proposals that provide that a director may be removed only for cause. Putnam will generally vote **for** proposals that permit the removal of directors with or without cause.  |

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| Ø | Putnam will vote **against** proposals authorizing a board to fill a director vacancy without shareholder approval.  |

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| Ø | Putnam will vote on a **case-by-case** basis on subsidiary director nominees if Putnam will be voting against the nominees of the parent company's board.  |

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| Ø | Putnam will vote on a **case-by-case** basis for director nominees, including nominees for positions on Supervisory Boards or Supervisory Committees, or similar board entities (depending on board structure), for (re)election when cumulative voting applies.  |

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| Ø | Putnam will vote **for** proposals to approve annual directors' fees, except that Putnam will vote on a **case-by-case** basis if Putnam's independent proxy voting service has recommended a vote against such proposal. Additionally, Putnam will vote **for** proposals to approve the grant of equity awards to directors, except that Putnam will consider these proposals on a **case-by-case**basis if Putnam's proxy service provider is recommending a vote against the proposal.  |

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#### Classified Boards

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| Ø | Putnam will vote **against** proposals to classify a board, absent special circumstances indicating that shareholder interests would be better served by this structure.  |

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#### Ratification of Auditors

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| Ø | Putnam will vote on a **case-by-case**basis on proposals to ratify the selection of independent auditors if there is evidence that the audit firm's independence or the integrity of an audit is compromised. (Otherwise, Putnam will vote **for**.)  |

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#### Contested Elections of Directors

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| Ø | Putnam will vote on a **case-by-case** basis in contested elections of directors.  |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. <u>Executive Compensation</u>

Putnam will vote on a **case-by-case** basis on board-approved proposals relating to executive compensation, except as follows:

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| Ø | Putnam will vote **for** stock option and restricted stock plans that will result in an average annual dilution of 1.67% or less (based on the disclosed term of the plan and including all equity-based plans), except where Putnam would otherwise be withholding votes for the entire board of directors in which case Putnam will evaluate the plans on a **case-by-case** basis.  |

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| Ø | Putnam will vote **against** stock option and restricted stock plans that will result in an average annual dilution of greater than 1.67% (based on the disclosed term of the plan and including all equity plans).  |

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| Ø | Putnam will vote **against** any stock option or restricted stock plan where the company's actual grants of stock options and restricted stock under all equity-based compensation plans during the prior three (3) fiscal years have resulted in an average annual dilution of greater than 1.67%.  |

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● Additionally, if the annualized dilution cannot be calculated, Putnam will vote **for** plans where the Total Potential Dilution is 5% or less. If the annualized dilution cannot be calculated and the Total Potential Dilution exceeds 5%, then Putnam will vote **against**. Note: Such plans must first pass all of Putnam's other screens.

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| Ø | Putnam will vote proposals to issue equity grants to executives on a **case-by-case** basis.  |

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| Ø | Putnam will vote **against** stock option plans that permit replacing or repricing of underwater options (and **against** any proposal to authorize such replacement or repricing of underwater options).  |

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| Ø | Putnam will vote **against** stock option plans that permit issuance of options with an exercise price below the stock's current market price.  |

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| Ø | Putnam will vote **against** stock option plans/ restricted stock plans with evergreen features providing for automatic share replenishment.  |

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| Ø | Putnam will vote **for** bonus plans under which payments are treated as performance-based compensation that is deductible under Section 162(m) of the Internal Revenue Code of 1986, as amended, except as follows:  |

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Vote on a **case-by-case** basis on such proposals if any of the following circumstances exist:

● the amount per employee under the plan is unlimited, or

● the maximum award pool is undisclosed, or

● the incentive bonus plan's performance criteria are undisclosed, or

● the independent proxy voting service recommends a vote against.

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| Ø | Putnam will vote in favor of the annual presentation of advisory votes on executive compensation (Say-on-Pay).  |

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| Ø | Putnam will generally vote **for** advisory votes on executive compensation (Say-on-Pay). However, Putnam will vote **against** an advisory vote if the company fails to effectively link executive compensation to company performance according to benchmarking performed by the independent proxy voting service.  |

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● Putnam will review the proposal on a **case-by-case** basis if there is no recommendation of the independent proxy voting service .

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| Ø | Putnam will vote on a **case-by-case** basis on severance agreements (e.g., golden and tin parachutes)  |

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| Ø | Putnam will **withhold** votes from members of a Board of Directors which has approved compensation arrangements Putnam's investment personnel have determined are grossly unreasonable at the next election at which such director is up for re-election.  |

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| Ø | Putnam will vote **for** employee stock purchase plans that have the following features: (1) the shares purchased under the plan are acquired for no less than 85% of their market value, (2) the offering period under the plan is 27 months or less, and (3) dilution is 10% or less.  |

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| Ø | Putnam will vote **for** Non-qualified Employee Stock Purchase Plans with all the following features:  |

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1) Broad-based participation (i.e., all employees of the company with the exclusion of individuals with 5 percent or more of beneficial ownership of the company). 

2) Limits on employee contribution, which may be a fixed dollar amount or expressed as a percent of base salary. 

3) Company matching contribution up to 25 percent of employee's contribution, which is effectively a discount of 20 percent from market value. 

4) No discount on the stock price on the date of purchase since there is a company matching contribution.

Putnam will vote **against** Non-qualified Employee Stock Purchase Plans when any of the plan features do not meet the above criteria.

Putnam may vote against executive compensation proposals on a **case-by-case** basis where compensation is excessive by reasonable corporate standards, or where a company fails to provide transparent disclosure of executive compensation. In voting on proposals relating to executive compensation, Putnam will consider whether the proposal has been approved by an independent compensation committee of the board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. <u>Capitalization</u>

Putnam will vote on a case-by-case basis on board-approved proposals involving changes to a company's capitalization, except as follows:

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| Ø | Putnam will vote **for** proposals relating to the authorization of additional common stock, except that Putnam will evaluate such proposals on a **case-by-case**basis if (i) they relate to a specific transaction or to common stock with special voting rights, (ii) the company has a non-shareholder approved poison pill in place, or (iii) the company has had sizeable stock placements to insiders within the past three years at prices substantially below market value without shareholder approval.  |

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| Ø | Putnam will vote **for** proposals to effect stock splits (excluding reverse stock splits.)  |

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| Ø | Putnam will vote **for** proposals authorizing share repurchase programs, except that Putnam will vote on a **case-by-case** basis if there are concerns that there may be abusive practices related to the share repurchase programs.  |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. <u>Acquisitions, Mergers, Reorganizations and</u> 

#### Other Transactions
Putnam will vote on a **case-by-case** basis on business transactions such as acquisitions, mergers, reorganizations involving business combinations, liquidations and sale of all or substantially all of a company's assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. <u>Anti-Takeover Measures</u>

Putnam will vote **against** board-approved proposals to adopt anti-takeover measures such as supermajority voting provisions, issuance of blank check preferred stock, the creation of a separate class of stock with disparate voting rights, control share acquisition provisions, targeted share placements, and ability to make greenmail payments, except as follows:

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| Ø | Putnam will vote on a **case-by-case** basis on proposals to ratify or approve shareholder rights plans;  |

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| Ø | Putnam will vote on a **case-by-case** basis on proposals to adopt fair price provisions.  |

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| Ø | Putnam will vote on a **case-by-case** basis on proposals to issue blank check preferred stock in the case of REITs (only).  |

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| Ø | Putnam will generally vote **for** proposals that enable or expand shareholders' ability to take action by written consent.  |

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| Ø | Putnam will vote on a **case-by-case** basis on proposals to <u>increase</u> shares of an existing class of stock with disparate voting rights from another share class.  |

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| Ø | Putnam will vote on a **case-by-case** basis on **shareholder or board-approved** proposals to eliminate supermajority voting provisions at controlled companies (companies in which an individual or a group voting collectively holds a majority of the voting interest).  |

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| Ø | Putnam will vote on a **case-by-case basis** on **board-approved** proposals to adopt supermajority voting provisions at controlled companies (companies in which an individual or a group voting collectively holds a majority of the voting interest).  |

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| Ø | Putnam will vote on a **case-by-case** basis on proposals to issue blank check preferred stock if appropriate "*de-clawed"* language is present. Specifically, appropriate *de-clawed* language will include cases where the Company states (i.e., through 8-K, proxy statement or other public disclosure) it will not use the preferred stock for anti-takeover purposes, or in order to implement a shareholder rights plan, or discloses a commitment to submit any future issuances of preferred stock to be used in a shareholder rights plan/anti-takeover purpose to a shareholder vote prior to its adoption.  |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. <u>Other Business Matters</u>

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| Ø | Putnam will vote **for** board-approved proposals approving routine business matters such as changing the company's name and procedural matters relating to the shareholder meeting, except as follows:  |

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| Ø | Putnam will vote on a **case-by-case** basis on proposals to amend a company's charter or bylaws (except for charter amendments necessary or to effect stock splits, to change a company's name, to authorize additional shares of common stock or other matters which are considered routine (for example, director age or term limits), technical in nature, fall within Putnam's guidelines (for example, regarding board size or virtual meetings), are required pursuant to regulatory and/or listing rules, have little or no economic impact or will not negatively impact shareholder rights).  |

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| Ø | Additionally, Putnam believes the bundling of items, whether the items are related or unrelated, is generally not in shareholders' best interest. We may vote **against** the entire bundled proposal if we would normally vote against any of the items if presented individually. In these cases, we will review the bundled proposal on a **case-by-case** basis.  |

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| Ø | Putnam generally supports quorum requirements if the level is set high enough to ensure a broad range of shareholders is represented in person or by proxy but low enough so that the Company can transact necessary business. Putnam will vote on a **case-by-case** basis on proposals seeking to change quorum requirements; however, Putnam will normally support proposals that seek to comply with market or exchange requirements.  |

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| Ø | Putnam will vote on a **case-by-case** basis on proposals seeking to change a company's state of incorporation. However, Putnam will vote **for** mergers and reorganizations involving business combinations designed solely to reincorporate a company in Delaware.  |

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| Ø | Putnam will vote **against** authorization to transact other unidentified, substantive business at the meeting.  |

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| Ø | Putnam will vote **against** proposals where there is a lack of information to make an informed voting decision.  |

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| Ø | Putnam will vote as follows on proposals to adjourn shareholder meetings:  |

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If Putnam is withholding support for the board of the company at the meeting, any proposal to adjourn should be referred for **case-by-case** analysis.

If Putnam is not withholding support for the board, Putnam will vote in favor of adjourning, unless the vote concerns an issue that is being referred back to Putnam for case-by-case review. Under such circumstances, the proposal to adjourn should also be referred to Putnam for **case-by-case** analysis.

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| Ø | Putnam will vote **against** management proposals to adopt a specific state's courts, or a specific U.S. district court as the exclusive forum for certain disputes, except that Putnam will vote **for** proposals adopting the State of Delaware, or the Delaware Chancery Court, as the exclusive forum, for corporate law matters for issuers incorporated in Delaware. Requiring shareholders to bring actions solely in one state may discourage the pursuit of derivative claims by increasing their difficulty and cost. However, Putnam's guideline recognizes the expertise of the Delaware state court system in handling disputes involving Delaware corporations. In addition, Putnam will **withhold votes** from the chair of the Nominating/Governance committee if a company amends its Bylaws, or takes other actions, to adopt a specific state's courts (other than Delaware courts, for issuers incorporated in Delaware) or a specific U.S. district court as the exclusive forum for certain disputes <u>without</u> shareholder approval.  |

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| Ø | Putnam will vote on a case-by-case basis on management proposals seeking to adopt a bylaw amendment allowing the company to shift legal fees and costs to unsuccessful plaintiffs in intra-corporate litigation (fee-shifting bylaw). Additionally, Putnam will vote against the Chair of the Nominating/Governance committee if a company adopts a fee-shifting bylaw amendment without shareholder approval.  |

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Ø Putnam will support management/shareholder proxy access proposals as long as the proposals align with the following principles for a shareholder (or up to 20 shareholders together as a group) to receive proxy access:

1) The required minimum aggregate ownership of the Company's outstanding common stock is no greater than 3%; 

2) The required minimum holding period for the shareholder proponent(s) is no greater than two years; and

3) The shareholder(s) are permitted to nominate at least 20% of director candidates for election to the board. 

Proposals requesting shares be held for 3 years will be reviewed on a **case-by-case**basis. Putnam will vote **agains**<u>t</u> proposals requesting shares be held for more than three years. Proposals that meet Putnam's stated criteria and include other requirements relating to issues such as, but not limited to, shares on loan or compensation agreements with nominees, will be reviewed on a **case-by-case** basis.

Additionally, shareholder proposals seeking an amendment to a company's proxy access policy which include any one of the supported criteria under Putnam's guidelines, for example, a 2-year holding period for shareholders, will be reviewed on a **case-by-case**basis.

Putnam supports management / shareholder proposals giving shareholders the right to call a special meeting as long as the ownership requirement in such proposals is at least **15%** of the company's outstanding common stock and not more than **25%**.

In general, Putnam will vote **for** management or shareholder proposals to reduce the ownership requirement below a company's existing threshold, as long as the new threshold is at least **15%** and not greater than **25%** of the company's outstanding common stock.

Putnam will vote **against** any proposal with an ownership requirement exceeding **25%** of the company's common stock or an ownership requirement that is less than **15%** of the company's outstanding common stock.

In cases where there are competing management and shareholder proposals giving shareholders the right to call a special meeting, Putnam will generally vote **for** the proposal which has the lower minimum shareholder ownership threshold, as long as that threshold is within Putnam's recommended minimum/maximum thresholds. If only one of the competing proposals has a threshold that falls within Putnam's threshold range, Putnam will normally support that proposal as long as

------

it represents an improvement (reduction) from the previous requisite ownership level. Putnam will normally vote **against** both proposals if neither proposal has a requisite ownership level between **15%** and **25%** of the company's outstanding common stock**.**

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|:---|:---|
| Ø | Putnam will generally vote **fo**<u>r</u> management or shareholder proposals to allow a company to hold virtual-only or hybrid shareholder meetings or to amend its articles/charter/by-laws to allow for virtual-only or hybrid shareholder meetings, provided the proposal does not preclude in-person meetings (at any given time), and does not otherwise limit or impair shareholder participation; and if the company has provided clear disclosure to ensure that shareholders can effectively participate in virtual-only shareholder meetings and meaningfully communicate with company management and directors. Additionally, Putnam may consider the rationale of the proposal and whether there have been concerns about the company's previous meeting practices.  |

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Disclosure should address the following:

● the ability of shareholders to ask questions during the meeting

o including time guidelines for shareholder questions

o rules around what types of questions are allowed

o and rules for how questions and comments will be recognized and disclosed to meeting participants

o the manner in which appropriate questions received during the meeting will be addressed by the board

● procedures, if any, for posting appropriate questions received during the meeting and the company's answers on the investor page of their website as soon as is practical after the meeting

● technical and logistical issues related to accessing the virtual meeting platform; and

● procedures for accessing technical support to assist in the event of any difficulties accessing the virtual meeting

Putnam may vote against proposals that do not meet these criteria.

Additionally, Putnam may vote **agains**t the Chair of the Governance Committee when the board is planning to hold a virtual-only shareholder meeting and the company has not provided sufficient disclosure (as noted above) or shareholder access to the meeting.

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|:---|:---|
| Ø | Putnam will vote **for** proposals to approve a company's board-approved climate transition action plan ("say on climate" proposals in which the company's board proposes that shareholders indicate their support for the company's plan), unless the proxy voting service has recommended a vote against the proposal, in which case Putnam will vote on a **case-by-case** basis on the proposal.  |

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|:---|:---|
| Ø | Putnam will vote on a **case-by-case** basis on board-approved proposals that conflict with shareholder proposals.  |

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II. Shareholder Proposals

Shareholder proposals are non-binding votes that are often opposed by management. Some proposals relate to matters that are financially immaterial to the company's business, while others may be impracticable or costly for a company to implement. At the same time, well-crafted shareholder proposals may serve the purpose of raising issues that are material to a company's business for management's consideration and response. Putnam seeks to weigh the costs of different types of proposals against their expected financial benefits. More specifically:

Putnam will vote **in accordance with the recommendation of the company's board of directors** on all shareholder proposals, except as follows:

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|:---|:---|
| Ø | Putnam will vote **for** shareholder proposals that are consistent with Putnam's proxy voting guidelines for board-approved proposals.  |

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|:---|:---|
| Ø | Putnam will vote **for** shareholder proposals to declassify a board, absent special circumstances which would indicate that shareholder interests are better served by a classified board structure.  |

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|:---|:---|
| Ø | Putnam will vote **for** shareholder proposals to require shareholder approval of shareholder rights plans.  |

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|:---|:---|
| Ø | Putnam will vote **for** shareholder proposals asking that director nominees receive support from holders of a majority of votes cast or a majority of shares outstanding of the company in order to be (re) elected.  |

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|:---|:---|
| Ø | Putnam will review on a **case-by-case** basis, shareholder proposals requesting that the board adopt a policy whereby, in the event of a significant restatement of financial results or significant extraordinary write-off, the board will recoup, to the fullest extent practicable, for the benefit of the company, all performance-based bonuses or awards that were made to senior executives based on having met or exceeded specific performance targets to the extent that the specified performance targets were not met.  |

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|:---|:---|
| Ø | Putnam will vote **for** shareholder proposals urging the board to seek shareholder approval of any future supplemental executive retirement plan ("SERP"), or individual retirement arrangement, for senior executives that provides credit for additional years of service not actually worked, preferential benefit formulas not provided under the company's tax-qualified retirement plans, accelerated vesting of retirement benefits or retirement perquisites and fringe benefits that are not generally offered to other company employees. (Implementation of this policy shall not breach any existing employment agreement or vested benefit.)  |

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|:---|:---|
| Ø | Putnam will vote **for** shareholder proposals requiring companies to report on their executive retirement benefits. (Deferred compensation, split-dollar life insurance, SERPs and pension benefits)  |

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|:---|:---|
| Ø | Putnam will vote **for** shareholder proposals requesting that a company establish a pay-for-superior-performance standard whereby the company discloses defined financial and/or stock price performance criteria (along with the detailed list of comparative peer group) to allow shareholders to sufficiently determine the pay and performance correlation established in the company's performance-based equity program. In addition, no <u>multi-year</u> award should be paid out unless the company's performance exceeds, <u>during the current CEO's tenure (three or more years)</u>, its peer median or mean performance on selected financial and stock price performance criteria.  |

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|:---|:---|
| Ø | Putnam will vote **for** shareholder proposals urging the board to disclose in a separate report to shareholders, the Company's relationships with its executive compensation consultants or firms. Specifically, the report should identify the entity that retained each consultant (the company, the board or the compensation committee) and the types of services provided by the consultant in the past five years (non-compensation-related services to the company or to senior management and a list of all public company clients where the Company's executives serve as a director.)  |

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|:---|:---|
| Ø | Putnam will vote **for** shareholder proposals requiring companies to accelerate vesting of equity awards under management severance agreements only if both of the following conditions are met:  |

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● the company undergoes a change in control, and

● the change in control results in the termination of employment for the person receiving the severance payment.

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|:---|:---|
| Ø | Putnam will vote **for** shareholder proposals requiring that the chair's position be filled by an independent director (separate chair/CEO). However, Putnam will vote on a **case-by-case** basis on such proposals when the company's board has a lead-independent director (or already has an independent or separate chair) <u>and</u> Putnam is supporting the nominees for the board of directors.  |

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|:---|:---|
| Ø | Putnam will vote **for** shareholder proposals seeking the submission of golden coffins to a shareholder vote or the elimination of the practice altogether.  |

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| Ø | Putnam will vote **for** shareholder proposals seeking a policy that forbids any director who receives more than 25% withhold votes cast (based on for and withhold votes) from serving on any key board committee for two years and asking the board to find replacement directors for the committees if need be.  |

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|:---|:---|
| Ø | Putnam will vote **for** shareholder proposals urging the board to seek shareholder approval of severance agreements (e.g., golden and tin parachutes).  |

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● However, Putnam will vote **against** such proposals when the company has a policy that minimally requires shareholder approval of severance agreements for executives that provides for cash severance benefits exceeding 2.99 times the sum of the executive's base salary plus target annual non-equity incentive plan bonus opportunity.

Putnam will vote on a **case-by-case** basis on approving such compensation arrangements.

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|:---|:---|
| Ø | Putnam will vote **for** shareholder proposals requiring companies to make cash payments under management severance agreements only if both of the following conditions are met: the company undergoes a change in control, and the change in control results in the termination of employment for the person receiving the severance payment.  |

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|:---|:---|
| Ø | Putnam will vote on a **case-by-case** basis on shareholder proposals to limit a company's ability to make excise tax gross-up payments under management severance agreements as well as proposals to limit income or other tax gross-up payments.  |

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|:---|:---|
| Ø | Putnam will vote **in accordance with the recommendation of the company's board of directors** on shareholder proposals regarding corporate political spending, unless Putnam is voting against the directors, in which case the proposal would be reviewed on a **case-by-case** basis.  |

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|:---|:---|
| Ø | Putnam will vote on a **case-by-case** basis on shareholder proposals that conflict with board-approved proposals.  |

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#### Environmental and Social

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|:---|:---|
| Ø | Putnam believes that sustainable environmental practices and sustainable social policies are important components of long-term value creation. Companies should evaluate the potential risks to their business operations that are directly related to environmental and social factors (among others). In evaluating shareholder proposals relating to environmental and social initiatives, Putnam takes into account (1) the relevance and materiality of the proposal to the company's business, (2) whether the proposal is well crafted (e.g., whether it references science-based targets, or standard global protocols), and (3) the practicality or reasonableness of implementing the proposal.  |

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Putnam may support well-crafted and well-targeted proposals that request additional reporting or disclosure on a company's plans to mitigate risk to the company related to the following issues and/or their strategies related to these issues: Environmental issues, including but not limited to, climate change, greenhouse gas emissions, renewable energy, and broader sustainability issues; and Social issues, including but not limited to, fair pay, employee diversity and development, safety, labor rights, supply chain management*,* privacy and data security.

In addition, Putnam will consider proposals related to Artificial Intelligence ("AI") on a case-by-case basis.

Putnam will consider factors such as (i) the industry in which the company operates, (ii) the company's current level of disclosure, (iii) the company's level of oversight, (iv) the company's management of risk arising out of these matters, (v) whether the company has suffered a material financial impact. Other factors may also be considered.

Putnam will consider the recommendation of its third-party proxy service provider and may consider other factors such as third-party evaluations of ESG performance.

Additionally, Putnam may vote on a **case-by-case** basis on proposals which ask a company to take action beyond reporting where our third-party proxy service provider has identified one or more reasons to warrant a vote FOR.

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III. Voting Shares of Non-US Issuers

Many non-US jurisdictions impose material burdens on voting proxies. There are three primary types of limits as follows:

1) Share blocking. Shares must be frozen for certain periods of time to vote via proxy. 

2) Share re-registration. Shares must be re-registered out of the name of the local custodian or nominee into the name of the client for the meeting and, in many cases, then re-registered back. Shares are normally blocked in this period.

3) Powers of Attorney. Detailed documentation from a client must be given to the local sub-custodian. In many cases Putnam is not authorized to deliver this information or sign the relevant documents.

Putnam's policy is to weigh the benefits to clients from voting in these jurisdictions against the detriments of not doing so. For example, in a share blocking jurisdiction, it will normally not be in a client's interest to freeze shares simply to participate in a non-contested routine meeting. More specifically, Putnam will normally not vote shares in non-US jurisdictions imposing burdensome proxy voting requirements except in significant votes (such as contested elections and major corporate transactions) where directed by portfolio managers.

Putnam recognizes that the laws governing non**-**US issuers will vary significantly from US law and from jurisdiction to jurisdiction. Accordingly, it may not be possible or even advisable to apply these guidelines mechanically to non-US issuers. However, Putnam believes that shareholders of all companies are protected by the existence of a sound corporate governance and disclosure framework. Accordingly, Putnam will vote proxies of non**-**US issuers **in accordance with the foregoing guidelines where applicable**, except as follows:

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|:---|:---|
| Ø | Putnam will vote **for** shareholder proposals calling for a majority of the directors to be independent of management.  |

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|:---|:---|
| Ø | Putnam will vote **for** shareholder proposals that implement corporate governance standards similar to those established under U.S. federal law and the listing requirements of U.S. stock exchanges, and that do not otherwise violate the laws of the jurisdiction under which the company is incorporated.  |

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|:---|:---|
| Ø | Putnam will vote on a **case-by-case** basis on proposals relating to (1) the issuance of common stock in excess of 20% of a company's outstanding common stock where shareholders do not have preemptive rights, or (2) the issuance of common stock in excess of 100% of a company's outstanding common stock where shareholders have preemptive rights.  |

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|:---|:---|
| Ø | Putnam will vote **for** proposals to authorize share repurchase programs that are recommended for approval by Putnam's proxy voting service provider, otherwise Putnam will vote **against** such proposals; except that Putnam will vote on a **case-by-case basis** if there are concerns that there may be abusive practices related to the share repurchase programs.  |

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|:---|:---|
| Ø | Putnam will vote **against** authorizations to repurchase shares or issue shares or convertible debt instruments with or without preemptive rights when such authorization can be used as a takeover defense without shareholder approval. Putnam will not apply this policy to a company with a shareholder who controls more than 50% of its voting rights.  |

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|:---|:---|
| Ø | Putnam will generally vote **for** proposals that include debt issuances, however substantive/non-routine proposals, and proposals that fall outside of normal market practice or reasonable standards, will be reviewed on a **case-by-case** basis.  |

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| Ø | Putnam will vote **for** board-approved routine, market-practice proposals. These proposals are limited to (1) those issues that will have little or no economic impact, such as technical, editorial, or mandatory regulatory compliance items, (2) those issues that will not adversely affect and/or which clearly improve shareholder rights/values, and which do not violate Putnam's proxy voting guidelines, or (3) those issues that do not seek to deviate from existing laws or regulations. Examples include but are not limited to, related party transactions (non-strategic), profit-and-loss transfer agreements (Germany), authority to increase paid-in capital (Taiwan). Should any unusual circumstances be identified concerning a normally routine issue, such proposals will be referred back to Putnam for internal review.  |

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| Ø | Putnam will generally vote **for** proposals regarding amendments seeking to expand business lines or to amend the corporate purpose, provided the proposal would not include a significant or material departure from the company's current business, and/or will provide the company with greater flexibility in the performance of its activities.  |

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|:---|:---|
| Ø | Putnam will normally vote **for** management proposals concerning allocation of income and the distribution of dividends. However, Putnam portfolio teams will override this guideline when they conclude that the proposals are outside the market norms (i.e., those seen as consistently and unusually small or large compared to market practices).  |

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| Ø | Putnam will generally vote **for** proposals seeking to adjust the par value of common stock. However, non-routine, substantive proposals will be reviewed on a **case-by-case** basis.  |

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| Ø | Putnam will vote **against** proposals that would authorize the company to reduce the notice period for calling special or extraordinary general meetings to less than 21-Days.  |

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| Ø | Putnam will generally vote **for** proposals relating to transfer of reserves/increase of reserves (i.e., France, Japan). However, Putnam will vote on a **case-by-case** basis if the proposal falls outside of normal market practice.  |

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|:---|:---|
| Ø | Putnam will generally vote **for** proposals to increase the maximum variable pay ratio. However, Putnam will vote on a **case-by-case** basis if we are voting against a company's remuneration report or if the proposal seeks an increase in excess of 200%.  |

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| Ø | Putnam will review stock option plans on a **case-by-case** basis which allow for the options exercise price to be reduced by dividend payments (if the plan would normally pass Putnam's Guidelines).  |

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| Ø | Putnam will generally vote **for** requests to provide loan guarantees however, Putnam will vote on a **case-by-case** basis if the total amount of guarantees is in excess of 100% of the company's audited net assets.  |

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| Ø | Putnam will generally support remuneration report/policy proposals (i.e., advisory/binding) where a company's executive compensation is linked directly with the performance of the business and executive. Putnam will generally support compensation proposals which incorporate a mix of reasonable salary and performance based short- and long-term incentives. Companies should demonstrate that their remuneration policies are designed and managed to incentivize and retain executives while growing the company's long-term shareholder value.  |

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Generally, Putnam will vote **against** remuneration report/policy proposals (i.e., advisory/binding) in the following cases:

● Disconnect between pay and performance

● No performance metrics disclosed;

● No relative performance metrics utilized;

● Single performance metric was used and it was an absolute measure;

● Performance goals were lowered when management failed or was unlikely to meet original goals;

● Long Term Incentive Plan is subject to retesting (e.g., Australia);

● Service contracts longer than 12 months (e.g., United Kingdom);

● Allows vesting below median for relative performance metrics;

● Ex-gratia / non-contractual payments have been made (e.g., United Kingdom and Australia);

● Contains provisions to automatically vest upon change-of-control; or

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● Other poor compensation practices or structures.

● Pension provisions for new executives is not at the same level as the majority of the wider workforce; pension provisions for incumbent executives are not set to decrease over time (United Kingdom)

● Proposed CEO salary increases are not justifiably appropriate in comparison to wider workforce or rationale for exception increases is not fully disclosed (United Kingdom)

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| Ø | Putnam will vote on a **case-by-case basis** on bonus payments to executive directors or senior management; however, Putnam will vote **against** payments that include outsiders or independent statutory auditors.  |

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#### Matters Relating to Board of Directors

#### Uncontested Board Elections

#### Asia: China, Hong Kong, India, Indonesia, Philippines, Taiwan and Thailand

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| Ø | Putnam will **vote against** the entire board of directors if  |

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o fewer than one-third of the directors are independent directors, or

◾ the board has not established <u>audit</u>, <u>compensation</u> and <u>nominating</u> committees each composed of a majority of independent directors, or

◾ the chair of the audit, compensation or nominating committee is not an independent director.

Commentary: Companies listed in China (or dual-listed in China and Hong Kong) often have a separate supervisory committee in addition to a standard board of directors containing audit, compensation, and nominating committees. The supervisory committee provides oversight of the financial affairs of the company and supervises members of the board and management, while the board of directors makes decisions related to the company's business and investment strategies. The supervisory committee normally comprises employee representatives and shareholder representatives. Shareholder representatives are elected by shareholders of the company while employee representatives are elected by the company's staff. Shareholder representatives may be independent or may be affiliated with the company or its substantial shareholders. Current laws and regulations neither provide a basis for evaluation of supervisor independence nor do they require a supervisor to be independent.

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| Ø | Putnam will generally vote in favor of nominees to the Supervisory Committee  |

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#### Australia

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| Ø | Putnam will vote **against** the entire board of directors if  |

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● fewer than a majority of the directors are independent, or

● the board has not established an audit committee composed solely of non-executive directors, a majority of whom, including the chair of the committee (who should not be the board chair), should be independent directors, or

● the board has not established nominating and compensation committees each composed of a majority of independent, non-executive directors, with an independent chair.

#### Brazil

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| Ø | Putnam will vote <u>against</u> proposals requesting cumulative voting unless there are more candidates than number of seats available, in which case vote for.  |

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| Ø | Putnam will vote **for** proposals for the proportional allocation of cumulative votes if Putnam is supporting the entire slate of nominees. Putnam will vote **against** such proposals if Putnam is not supporting the entire slate.  |

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| Ø | Putnam will **abstain** on individual director allocation proposals if Putnam is voting for the proportional allocation of cumulative votes. Putnam will vote on a **case-by-case**basis on individual director allocation proposals if Putnam is voting against the proportional allocation of votes.  |

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|:---|:---|
| Ø | Putnam will vote **for** proposals to cumulate votes of common and preferred shareholders if the nominees are known and Putnam is supporting the applicable nominees; Putnam will vote **against** such proposals if Putnam is not supporting the known nominees, or if the nominees are unknown.  |

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| Ø | Putnam will generally vote **against** proposals seeking the recasting of votes for amended slate (as new candidates could be included in the amended slate without prior disclosure to shareholders).  |

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| Ø | Putnam will vote **against** proposals regarding instructions if meeting is held on second call if election of directors is part of the recasting as the slate can be amended without (prior) disclosure to shareholders.  |

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| Ø | Putnam will vote **against** proposals regarding the casting of minority votes to the candidate with largest number of votes.  |

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#### Canada
Canadian corporate governance requirements mirror corporate governance reforms that have been adopted by the NYSE and other U.S. national securities exchanges and stock markets. As a result, Putnam will vote on matters relating to the board of directors of Canadian issuers **in accordance with the guidelines applicable to U.S. issuers.**

<u>Commentary</u>: Like the UK's Combined Code on Corporate Governance, the policies on corporate governance issued by Canadian securities regulators embody the "comply and explain" approach to corporate governance. Because Putnam believes that the board independence standards contained in the proxy voting guidelines are integral to the protection of investors in Canadian companies, these standards will be applied in a prescriptive manner.

#### Continental Europe (ex-Germany)

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| Ø | Putnam will vote **against** the entire board of directors if  |

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● fewer than a majority of the directors are <u>i</u> ndependent directors, or

● the board has not established <u>audit, nominating</u> and <u>compensation</u> committees each composed of a majority of independent directors.

<u>Commentary</u>: An "independent director" under the European Commission's guidelines is one who is free of any business, family or other relationship, with the company, its controlling shareholder or the management of either, that creates a conflict of interest such as to impair his judgment. A "non-executive director" is one who is not engaged in the daily management of the company.

In France, Employee Representatives are employed by the company and represent rank and file employees. These representatives are elected by company employees. The law also provides for the appointment of employee shareholder representatives, if the employee shareholdings exceed 3% of the share capital. Employee shareholder representatives are elected by the company's shareholders (via general meeting).

#### Germany

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| Ø | For companies subject to "co-determination," Putnam will vote <u>for</u> the election of nominees to the supervisory board, except:  |

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| Ø | Putnam will vote <u>against</u> the Supervisory Board if  |

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● the board has not established an audit committee comprising an Independent chair.

● the audit committee chair serves as board chair.

● the board contains more than two former management board members.

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| Ø | Putnam will vote <u>against</u> the election of a former member of the company's managerial board to chair of the supervisory board.  |

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<u>Commentary</u>: German corporate governance is characterized by a two-tier board system - a managerial board composed of the company's executive officers, and a supervisory board. The supervisory board appoints the members of the managerial board. Shareholders elect members of the supervisory board, except that in the case of companies with a large number of employees, company employees are allowed to elect some of the supervisory board members (one-half of supervisory board members are elected by company employees at companies with more than 2,000 employees; one-third of the supervisory board members are elected by company employees at companies with more than 500 employees but fewer than 2,000). This practice is known as co-determination.

#### Israel
**Non-Controlled Banks**<u>:</u> Director elections at Non-Controlled banks are overseen by the Supervisor of the Banks and nominees for election as "other" (non-external) directors and external directors (under Companies Law and Directive 301) are put forward by an external and independent committee. As such,

Ø Putnam's guidelines regarding board Nominating Committees will not apply

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|:---|:---|
| Ø | Putnam will vote on a **case-by-case** on nominees when there are more nominees than seats available.  |

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#### Italy
Election of directors and statutory auditors:

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|:---|:---|
| Ø | Putnam will apply the director guidelines to the majority shareholder supported list and vote accordingly (**for** or **against**) if multiple lists of director candidates are presented. If there is no majority shareholder supported slate of nominees, Putnam will support the shareholder slate of nominees that is recommended for approval by Putnam's service provider.  |

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|:---|:---|
| Ø | Putnam will vote **against** the entire list of director nominees if the list is bundled as one proposal and if Putnam would otherwise be voting against any one director nominee.  |

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|:---|:---|
| Ø | Putnam will generally vote **for** the majority shareholder supported list of statutory auditor nominees.  |

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Note: Pursuant to Italian law, directors and statutory auditors are elected through a slate voting system whereby candidates are presented in lists submitted by shareholders representing a minimum percentage of share capital.

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|:---|:---|
| Ø | Putnam will withhold votes from any director not identified in the proxy materials. (Example: Co-opted director nominees.)  |

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#### Japan

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|:---|:---|
| Ø | For companies that have established a U.S.-style corporate governance structure, Putnam will **withhold votes** from the entire board of directors if:  |

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● the board does not have a majority of outside directors,

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● the board has not established nominating and compensation committees composed of a majority of outside directors,

● the board has not established an audit committee composed of a majority of independent directors, or

● the board does not have at least two independent directors for companies with a controlling shareholder.

Ø For companies that have established a statutory auditor board structure:

● Putnam will **withhold votes** from the appointment of members of a company's board of statutory auditors if a majority of the members of the board of statutory auditors is not independent.

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|:---|:---|
| Ø | For companies that have established a statutory auditor board structure, Putnam will **withhold votes** from the entire board of directors if:  |

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● the board does not have at least two outside directors, or

● the board does not have at least two independent directors for companies with a controlling shareholder.

● Putnam will vote **against** any statutory auditor nominee who attends fewer than 75% of board and committee meeting without valid reasons for the absences (i.e., illness, personal emergency, etc.) (Note that Corporate Law requires disclosure of outsiders' attendance but not that of insiders, who are presumed to have no more important time commitments.)

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|:---|:---|
| Ø | For companies that have established an audit committee board structure (one-tier / one committee), Putnam will **withhold votes** from the entire board of directors if:  |

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● the board does not have at least two outside directors,

● the board does not have at least two independent directors for companies with a controlling shareholder, or

● the board has not established an audit committee composed of a majority of independent directors

#### Election of Executive Director and Election of Supervisory Director - REIT
REITs have a unique two-tier board structure with generally one or more executive directors and two or more supervisory directors. The number of supervisory directors must be greater than, not equal to, the number of executive directors. Shareholders are asked to vote on both types of directors. Putnam will vote as follows, provided each board of executive / supervisory directors meets legal requirements.

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|:---|:---|
| Ø | Putnam will generally vote <u>for</u> the election of Executive Director  |

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|:---|:---|
| Ø | Putnam will generally vote <u>for</u> the election of Supervisory Directors  |

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<u>Commentary</u>:

#### Definition of outside director and independent director:
The Japanese Companies Act focuses on two director classifications: Insider or Outsider. An outside director is a director who is not a director, executive, executive director, or employee of the company or its parent company, subsidiaries or affiliates. Further, a director, executive, executive director or employee, who have executive responsibilities, of the company or subsidiaries can regain eligibility ten years after his or her resignation, provided certain other requirements are met. An outside director is designated as an "independent" director based on the Tokyo Stock Exchange listing rules. An outside director is "independent" if that person can make decisions completely independent from the managers of the company, its parent, subsidiaries, or affiliates

------

and does not have a material relationship with the company (i.e., major client, trading partner, or other business relationship; familial relationship with current director or executive; etc.).

The guidelines have incorporated these definitions in applying the board independence standards above.

#### Korea
Putnam will **withhold votes** from the entire board of directors if:

● For large companies (i.e., those with assets of at least KRW 2 trillion); the board does not have at least three independent directors or less than a majority of directors are independent directors,

● For small companies (i.e., those with assets of less than KRW 2 trillion), fewer than one-fourth of the directors are independent directors,

● The board has not established a nominating committee with at least half of the members being outside directors, or

● the board has not established an audit committee composed of at least three members and in which at least two-thirds of its members are independent directors.

<u>Commentary</u>: For purposes of these guidelines, an "outside director" is a director who is independent from the management or controlling shareholders of the company and holds no interests that might impair performing his or her duties impartially from the company, management or controlling shareholder. In determining whether a director is an outside director, Putnam will also apply the standards included in Article 382 of the Korean Commercial Act*,* i.e., no employment relationship with the company for a period of two years before serving on the committee, no director or employment relationship with the company's largest shareholder, etc.) and may consider other business relationships that would affect the independence of an outside director.

---

| | |
|:---|:---|
| Ø | Putnam will generally vote **for** proposals to amend the Executive Officer Retirement Allowance Policy unless the recipients of the grants include non-executives; the proposal would have a negative impact on shareholders, or the proposal appear to be outside of normal market practice, in which case Putnam will vote **against**.  |

---

#### Malaysia

---

| | |
|:---|:---|
| Ø | Putnam will vote <u>against</u> the entire board of directors if:  |

---

● less than 50% of the directors are independent directors, or less than a majority of the directors are independent directors for large companies,

● the board has not established an audit committee with all members being independent directors, including the committee chair,

● the board has not established a nominating committee with all members being non-executive directors, a majority of whom are independent, including the committee chair; the board chair should not serve as a member of the nomination committee, or

● the board has not established a compensation committee with all members being non-executive directors, a majority of whom are independent; the board chair should not serve as a member of the remuneration committee.

#### Nordic Markets – Finland, Norway, Sweden

---

| | |
|:---|:---|
| Ø | Putnam will vote <u>against</u> the entire board of directors if:  |

---

#### Board Independence:

------

● The board does not have a majority of directors independent from the company and management. (Sweden, Finland, Norway)

● The board does not have at least two directors independent from the company and its major shareholders holding > 10% of the Company's share capital. (Sweden, Finland, Norway)

● An executive director is a member of the board. (Norway)

#### Audit Committee:
● The audit committee does not consist of a majority of directors independent from the company and management. (Sweden, Finland)

● The audit committee does not have at least one director independent from the company and its major shareholders holding > 10% of the Company's share capital. (Sweden, Finland)

● The audit committee is not majority independent. (Norway)

#### Remuneration Committee:
● The remuneration committee is not fully independent of the company, excluding the chair. (Sweden)

● The remuneration committee is not majority independent of the company. (Finland)

● The remuneration committee does not consist fully of non-executive directors. (Finland)

● The remuneration committee is not fully independent of management (Norway)

● The remuneration committee is not majority independent from the company and its major shareholders holding > 50% of the Company's share capital. (Sweden, Finland, Norway)

#### Board Nomination Committee:
● The nomination committee does not consist of a majority of directors independent from the company. (Finland)

● An executive is a member of the nomination committee. (Finland)

**External Nomination Committee:** Vote against the establishment of the nomination committee and its guidelines when:

● The external committee is not majority independent of the company and management. (Sweden)

● The external committee does not have at least one director not affiliated to largest shareholder on the committee. (Sweden)

● The external committee does not meet best practice based on ISS analysis. (Finland)

● The external committee is not majority independent of the board and management. (Norway)

● The external committee has more than one member of the board of the directors sitting on the committee. (Norway)

● There is insufficient disclosure provided for new nominees (Norway)

● An executive is a member of the committee. (Norway)

------

#### Russia

---

| | |
|:---|:---|
| Ø | Putnam will vote on a <u>case-by-case basis</u> for the election of nominees to the board of directors.  |

---

<u>Commentary</u>: In Russia, director elections are handled through a cumulative voting process. Cumulative voting allows shareholders to cast all of their votes for a single nominee for the board of directors, or to allocate their votes among nominees in any other way. In contrast, in "regular" voting, shareholders may not give more than one vote per share to any single nominee. Cumulative voting can help to strengthen the ability of minority shareholders to elect a director.

#### Singapore

---

| | |
|:---|:---|
| Ø | Putnam will vote **against** from the entire board of directors if  |

---

● in the case of a board with an independent director serving as chair, fewer than one-third of the directors are independent directors; or, in the case of a board not chaired by an independent director, fewer than half of the directors are independent directors,

● the board has not established <u>audit</u> and <u>compensation</u> committees, each with an independent director serving as chair, with at least a majority of the members being independent directors, and with all of the directors being non-executive directors, or

● the board has not established a <u>nominating</u> committee, with an independent director serving as chair, and with at least a majority of the members being independent directors.

#### United Kingdom, Ireland
<u>Commentary</u>:

**Application of guidelines**: Although the Combined Code has adopted the "comply and explain" approach to corporate governance, Putnam believes that the guidelines discussed above with respect to board independence standards are integral to the protection of investors in UK companies. As a result, these guidelines will be applied in a prescriptive manner.

**Definition of independence**: For the purposes of these guidelines, a non-executive director shall be considered independent if the director meets the independence standards in section A.3.1 of the Combined Code (i.e., no material business or employment relationships with the company, no remuneration from the company for non-board services, no close family ties with senior employees or directors of the company, etc.), except that Putnam does not view service on the board for more than nine years as affecting a director's independence.

**Smaller companies**: A smaller company is one that is below the FTSE 350 throughout the year immediately prior to the reporting year.

---

| | |
|:---|:---|
| Ø | Putnam will **withhold votes** from the entire board of directors if:  |

---

● the board, excluding the Non-Executive Chair, is not comprised of at least half independent non-executive directors,

● the board has not established a Nomination committee composed of a majority of independent non-executive directors, excluding the Non-Executive Chair, or

● the board has not established a Compensation committee composed of (1) at least three directors (in the case of smaller companies, as defined by the Combined Code, two directors) and (2) solely of independent non-executive directors. The company chair may be a member of, but not chair, the Committee provided he or she was considered independent on appointment as chair, or

------

● The board has not established an Audit Committee composed of, (1) at least three directors (in the case of smaller companies as defined by the Combined Code, two directors) and (2) solely of independent non-executive directors. The board chair may not serve on the audit committee of large or small companies.

#### All other jurisdictions

---

| | |
|:---|:---|
| Ø | In the absence of jurisdiction specific guidelines, Putnam will vote as follows for boards/supervisory boards:  |

---

o Putnam will vote **against** the entire board of directors if

◾ fewer than a majority of the directors are independent directors, or

◾ the board has not established audit, nominating and compensation committees each composed of a majority of independent directors.

#### Additional Commentary regarding all Non-US jurisdictions:
Whether a director is considered "independent" or not will be determined by reference to local corporate law or listing standards.

Some jurisdictions may legally require or allow companies to have a certain number of employee representatives, employee shareholder representatives (e.g., France) and/or shareholder representatives on their board. Putnam generally does not consider these representatives independent. The presence of employee representatives or employee shareholder representatives on the board and key committees is generally legally mandated. In most markets, shareholders do not have the ability to vote on the election of employee representatives or employee shareholder representatives. In some markets, significant shareholders have a legal right to nominate shareholder representatives. Shareholders are required to approve the election of shareholder representatives to the board. Unlike employee representatives, there are no legal requirements regarding the presence of shareholder representatives on the board or its committees.

---

| | |
|:---|:---|
| Ø | Putnam will **not include** employee or employee shareholder representatives in the independence calculation of the board or key committees, nor in the calculation of the size of the board.  |

---

---

| | |
|:---|:---|
| Ø | Putnam will **include** shareholder representatives in the independence calculation of the board and key committees, and in the calculation of the size of the board.  |

---

---

| | |
|:---|:---|
| Ø | Putnam will generally support shareholder or employee representatives if included in the agenda Putnam will vote on a **case-by-case** basis when there are more candidates than seats. Additionally, Putnam will vote **against** such nominees when there is insufficient information disclosed.  |

---

Ø Putnam Investments' policies regarding the provision of professional services and transactional relationship with regard to directors will apply.

---

| | |
|:---|:---|
| Ø | Putnam will vote **for** independent nominees for alternate director, unless such nominees do not meet Putnam's individual director standards.  |

---

#### Shareholder nominated directors/self-nominated directors

---

| | |
|:---|:---|
| Ø | Putnam will vote <u>against</u> shareholder nominees if Putnam supports the board of directors.  |

---

---

| | |
|:---|:---|
| Ø | Putnam will vote on a <u>case-by case</u> basis if Putnam will be voting against the current board.  |

---

---

| | |
|:---|:---|
| Ø | Putnam will vote on a case-by-case basis if the proposal regarding a self-nominated/shareholder nominated director nominee would add an additional seat to the board if the nominee is approved.  |

---

#### Other Business Matters

------

#### Japan
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>A. Article Amendments</u> 

---

| | |
|:---|:---|
| Ø | The Japanese Companies Act gives companies the option to adopt a U.S.-Style corporate structure (i.e., a board of directors and audit, nominating, and compensation committees). Putnam will vote **for** proposals to amend a company's articles of incorporation to adopt the U.S.-Style "Board with Committees" structure. However, the independence of the outside directors is critical to effective corporate governance under this new system. Putnam will, therefore, scrutinize the backgrounds of the outside director nominees at such companies, and will vote **against** the amendment where Putnam believes the board lacks the necessary level of independence from the company or a substantial shareholder.  |

---

---

| | |
|:---|:---|
| Ø | Putnam will vote on a **case-by-case** basis on granting the board the authority to repurchase shares at its discretion.  |

---

---

| | |
|:---|:---|
| Ø | Putnam will vote **against** amendments to delete a requirement directing the company to reduce authorized capital by the number of treasury shares cancelled. If issued share capital decreases while authorized capital remains unchanged, then the company will have greater leeway to issue new shares (for example as a private placement or a takeover defense).  |

---

---

| | |
|:---|:---|
| Ø | Putnam will vote **against** proposals to authorize appointment of special directors. Under the new Corporate Law, companies are allowed to appoint, from among their directors, "special directors" who will be authorized to make decisions regarding the purchase or sale of important assets and major borrowing or lending, on condition that the board has at least six directors, including at least one non-executive director. At least three special directors must participate in the decision-making process and decisions shall be made by a majority vote of the special directors. However, the law does not require any of the special directors to be non-executives, so in effect companies may use this mechanism to bypass outsiders.  |

---

---

| | |
|:---|:---|
| Ø | Putnam will generally vote **for** proposals to create new class of shares or to conduct a share consolidation of outstanding shares to squeeze out minority shareholders.  |

---

---

| | |
|:---|:---|
| Ø | Putnam will vote **against** proposals seeking to enable companies to establish specific rules governing the exercise of shareholder rights. (Note: Such as, shareholders' right to submit shareholder proposals or call special meetings.)  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>B. Compensation Related Matters</u> 

---

| | |
|:---|:---|
| Ø | Putnam will vote **against** option plans which allow the grant of options to suppliers, customers, and other outsiders.  |

---

---

| | |
|:---|:---|
| Ø | Putnam will vote **against** stock option grants to independent internal statutory auditors. The granting of stock options to internal auditors, at the discretion of the directors, can compromise the independence of the auditors and provide incentives to ignore accounting problems, which could affect the stock price over the long term.  |

---

---

| | |
|:---|:---|
| Ø | Putnam will vote **against** the payment of retirement bonuses to directors and statutory auditors when one or more of the individuals to whom the grants are being proposed has not served in an executive capacity for the company. Putnam will also vote **against** payment of retirement bonuses to any directors or statutory auditors who have been designated by the company as independent. Retirement bonus proposals are all-or-nothing, meaning that split votes against individual payments cannot be made. If any one individual does not meet Putnam's criteria, Putnam will vote **against** the entire bundled item.  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>C. Other Business Matters</u> 

---

| | |
|:---|:---|
| Ø | Putnam votes **for** mergers by absorptions of wholly-owned subsidiaries by their parent companies. These deals do not require the issuance of shares, and do not result in any dilution or new obligations for shareholders of the parent company. These transactions are routine.  |

---

---

| | |
|:---|:---|
| Ø | Putnam will vote **for** the acquisition if it is between parent and wholly-owned subsidiary.  |

---

------

---

| | |
|:---|:---|
| Ø | Putnam will vote **for** the formation of a holding company, if routine. Holding companies are once again legal in Japan and a number of companies, large and small, have sought approval to adopt a holding company structure. Most of the proposals are intended to help clarify operational authority for the different business areas in which the company is engaged and promote effective allocation of corporate resources. As most of the reorganization proposals do not entail any share issuances or any change in shareholders' ultimate ownership interest in the operating units, Putnam will treat most such proposals as routine.  |

---

---

| | |
|:---|:---|
| Ø | Putnam will vote **against** proposals that authorize the board to vary the AGM record date.  |

---

---

| | |
|:---|:---|
| Ø | Putnam will vote **for** proposals to abolish the retirement bonus system  |

---

---

| | |
|:---|:---|
| Ø | Putnam will vote **for** board-approved director/officer indemnification proposals  |

---

---

| | |
|:---|:---|
| Ø | Putnam will vote on a **case-by-case** basis on private placements (Third-party share issuances). Where Putnam views the share issuance necessary to avoid bankruptcy or to put the company back on solid financial footing, Putnam will generally vote **for**. When a private placement allows a particular shareholder to obtain a controlling stake in the company at a discount to market prices, or where the private placement otherwise disadvantages ordinary shareholders, Putnam will vote **against**.  |

---

---

| | |
|:---|:---|
| Ø | Putnam will generally vote **against** shareholder rights plans (poison pills). However, if all of the following criteria are met, Putnam will evaluate such poison pills on a **case-by-case** basis:  |

---

1) The poison pill must have a duration of no more than three years.

2) The trigger threshold must be no less than 20 percent of issued capital. 

3) The company must have no other types of takeover defenses in place.

4) The company must establish a committee to evaluate any takeover offers, and the members of that committee must all meet Putnam's' definition of independence.

5) At least 20 percent, and no fewer than two, of the directors must meet Putnam's definition of independence. These independent directors must also meet Putnam's guidelines on board meeting attendance. 

6) The directors must stand for reelection on an annual basis.

7) The company must release its proxy materials no less than three weeks before the meeting date.

---

| | |
|:---|:---|
| Ø | Putnam will vote **against** proposals to allow the board to decide on income allocation without shareholder vote.  |

---

---

| | |
|:---|:---|
| Ø | Putnam will vote **against** proposals to limit the liability of External Audit Firms ("Accounting Auditors")  |

---

---

| | |
|:---|:---|
| Ø | Putnam will vote **against** proposals seeking a reduction in board size that eliminates all vacant seats.  |

---

---

| | |
|:---|:---|
| Ø | Putnam may generally vote **against** proposals seeking an increase in authorized capital that leaves the company with as little as 25 percent of the authorized capital outstanding (general request). However, such proposals will be evaluated on a company specific basis, taking into consideration such factors as current authorization outstanding, existence (or lack thereof) of preemptive rights and rationale for the increase.  |

---

---

| | |
|:---|:---|
| Ø | Putnam will vote **for** corporate split agreement and transfer of sales operations to newly created wholly-owned subsidiaries where the transaction is a purely internal one which does not affect shareholders' ownership interests in the various operations. All other proposals will be referred back to Putnam for **case-by-case** review. These reorganizations usually accompany the switch to a holding company structure, but may be used in other contexts.  |

---

#### United Kingdom

------

---

| | |
|:---|:---|
| Ø | Putnam will not apply the U.S. standard 15% discount cap for employee share purchase schemes at U.K. companies. As such, Putnam will generally vote **for** 'Save-As-You-Earn' schemes in the U.K which allow for no more than a 20% purchase discount, and which otherwise comply with U.K. law and Putnam standards.  |

---

#### France

---

| | |
|:---|:---|
| Ø | Putnam will not apply the U.S. standard 15% discount cap for employee share purchase schemes at French companies. As such, Putnam will generally vote **for** employee share purchase schemes in France that allow for no greater than a 30% purchase discount, or 40% purchase discount if the vesting period is equal to or greater than ten years, and which otherwise comply with French law and Putnam standards.  |

---

---

| | |
|:---|:---|
| Ø | Putnam will generally vote **for** the Remuneration Report (established based on SRD II), however Putnam will vote on a **case-by-case** basis when Putnam is voting against both the ex-Post Remuneration Report (CEO) and ex-Ante Remuneration Policy (CEO, or proposal including CEO remuneration package) in the current year, and Putnam's third party service provider(s) is recommending a vote against.  |

---

#### Canada

---

| | |
|:---|:---|
| Ø | Putnam will generally vote **for** Advance Notice provisions for submitting director nominations not less than 30 days prior to the date of the annual meeting. For Advance Notice provisions where the minimum number of days to submit a shareholder nominee is less than 30 days prior to the meeting date, Putnam will vote on a **case-by-case** basis. Putnam will also vote on a **case-by-case** basis if the company's policy expressly prohibits the commencement of a new notice period in the event the originally scheduled meeting is adjourned or postponed**.**  |

---

#### Hong Kong

---

| | |
|:---|:---|
| Ø | Putnam will vote <u>for</u> proposals to approve a general mandate permitting the company to engage in non-pro rata share issuances of up to 20% of total equity in a year if the company's board meets Putnam's independence standards; if the company's board does not meet Putnam's independence standards, then Putnam will vote against these proposals.  |

---

---

| | |
|:---|:---|
| Ø | Additionally, Putnam will vote <u>for</u> proposals to approve the reissuance of shares acquired by the company under a share repurchase program, provided that: (1) Putnam supported (or would have supported, in accordance with these guidelines) the share repurchase program, (2) the reissued shares represent no more than 10% of the company's outstanding shares (measured immediately before the reissuance), and (3) the reissued shares are sold for no less than 85% of current market value.  |

---

This policy supplements policies regarding share issuances as stated above under section

III. Voting Shares of Non-US Issuers.

#### Taiwan

---

| | |
|:---|:---|
| Ø | Putnam will vote **against** proposals to release the board of directors from the non-compete restrictions specified in Taiwanese Company Law. However, Putnam will vote **for** such proposals if the directors are engaged in activities with a wholly- owned subsidiary of the company.  |

---

#### Australia

---

| | |
|:---|:---|
| Ø | Putnam will vote **for** proposals to carve out, from the general cap on non-pro rata share issues of 15% of total equity in a rolling 12-month period, a particular proposed issue of shares or a particular issue of shares made previously within the 12-month period, if the company's board meets Putnam's independence standards; if the company's board does <u>not</u> meet Putnam's independence standards, then Putnam will vote **against** these proposals.  |

---

---

| | |
|:---|:---|
| Ø | Putnam will vote **for** proposals renewing partial takeover provisions.  |

---

------

---

| | |
|:---|:---|
| Ø | Putnam will vote on a **case-by-case** basis on Board-Spill proposals.  |

---

#### Turkey

---

| | |
|:---|:---|
| Ø | Putnam will vote on a **case-by-case** basis on proposals involving related party transactions. However, Putnam will vote **against** when such proposals do not provide information on the specific transaction(s) to be entered into with the board members or executives.  |

---

------

#### Exhibit B to Proxy Procedures
<u>PUTNAM INVESTMENTS</u> 

<u>PROXY VOTING CONFLICT</u> 

OF INTEREST DISCLOSURE FORM

1. *Company name*:

2. *Date of Meeting*:

3. *Referral Item(s)*:

4. *Description of Putnam's Business Relationship with Issuer of Proxy which may give rise to a conflict of interest*:

a. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

*5.* *Describe procedures used to address any conflict of interest:* 

6. *Describe any contacts from parties outside Putnam Management (other than routine communications from proxy solicitors) with respect to the referral item not otherwise reported in an investment professional's recommendation*:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

CERTIFICATION

The undersigned officer of Putnam Investments certifies that, to the best of his or her knowledge, any recommendation of an investment professional provided under circumstances where a conflict of interest exists was made solely on the investment merits and without regard to any other consideration.

---

| |
|:---|
| Name: |
| Proxy Voting Team |

---

------

#### Exhibit C to Proxy Procedures
<u>PUTNAM INVESTMENTS</u> 

<u>PROXY VOTING CONFLICT</u> 

OF INTEREST DISCLOSURE FORM

1. *Company name*:

2. *Date of Meeting*:

3. *Referral Item(s)*:

4. *Description of Putnam ' s Business Relationship with Issuer of Proxy which may give rise to a conflict of interest:* <u>None</u> 

5. *Describe procedures used to address any conflict of interest*: N/A

6. *Describe any contacts from parties outside Putnam Management (other than routine communications from proxy solicitors) with respect to the referral item not otherwise reported in an investment professional's recommendation*:

None

CERTIFICATION

The undersigned officer of Putnam Investments certifies that, to the best of his or her knowledge, any recommendation of an investment professional provided under circumstances where a conflict of interest exists was made solely on the investment merits and without regard to any other consideration.

---

| |
|:---|
| Name: |
| Proxy Voting Team |

---

------

September 1, 2025

Putnam ETF Trust

---

| | | |
|:---|:---|:---|
| **Fund** | **Symbol** | **Principal U.S. Listing Exchange** |
| &nbsp;&nbsp;&nbsp;Putnam BDC Income ETF ("BDC Income ETF") | PBDC | NYSE Arca, Inc. |
| &nbsp;&nbsp;&nbsp;Putnam BioRevolution™ ETF ("BioRevolution ETF") | SYNB | NYSE Arca, Inc. |
| &nbsp;&nbsp;&nbsp;Putnam Emerging Markets ex-China ETF ("Emerging Markets ex-China ETF") | PEMX | NYSE Arca, Inc. |
| &nbsp;&nbsp;&nbsp;Putnam ESG Core Bond ETF ("ESG Core Bond ETF") | PCRB | NYSE Arca, Inc. |
| &nbsp;&nbsp;&nbsp;Putnam ESG High Yield ETF ("ESG High Yield ETF") | PHYD | NYSE Arca, Inc. |
| &nbsp;&nbsp;&nbsp;Putnam ESG Ultra Short ETF ("ESG Ultra Short ETF") | PULT | NYSE Arca, Inc. |

---

#### STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information ("SAI") is not a prospectus. If the Fund has more than one form of current prospectus, each reference to the prospectus in this SAI includes all of the Fund's prospectuses, unless otherwise noted. The SAI should be read together with the applicable prospectus. The audited financial statements and report of the Fund's independent registered public accounting firm in the Fund's Form N-CSR, for the fiscal year ended April 30, 2025, are incorporated by reference into this SAI, which means that they are part of this SAI for legal purposes.

Part I of this SAI contains specific information about each Fund listed above (references to the "Fund" mean each Fund listed on this cover page, unless otherwise noted). Part II includes information about the Fund and other Putnam mutual funds and exchange-traded funds (collectively, the "Putnam funds").

For a free copy of the Fund's current prospectus, shareholder reports, and/or financial statements, call Putnam Investor Services at 1-800-225-1581, write P.O. Box 219697, Kansas City, MO 64121-9697 or visit www.franklintempleton.com.

1 PETF4-SAI 09/25

------

#### **Table of Contents**

---

| | |
|:---|:---|
|  **PART I** |  |
|  **[FUND ORGANIZATION AND CLASSIFICATION](#sai919709_1)** | **3** |
|  **[INVESTMENT RESTRICTIONS](#sai919709_2)** | **3** |
|  **[CHARGES AND EXPENSES](#sai919709_3)** | **5** |
|  **[PORTFOLIO MANAGERS](#sai919709_4)** | **16** |
|  **[SECURITIES LENDING ACTIVITIES](#sai919709_5)** | **21** |
|  **[FINANCIAL STATEMENTS](#sai919709_6)** | **21** |
|  **PART II** |  |
|  **[BUYING AND SELLING SHARES](#sai919709_7)** | **22** |
|  **[MISCELLANEOUS INVESTMENTS, INVESTMENT PRACTICES AND RISKS](#sai919709_8)** | **29** |
|  **[EXCHANGE TRADED FUNDS RISK](#sai919709_9)** | **79** |
|  **[TAXES](#sai919709_10)** | **80** |
|  **[MANAGEMENT](#sai919709_11)** | **94** |
|  **[DISCLOSURE OF PORTFOLIO INFORMATION](#sai919709_12)** | **112** |
|  **[INFORMATION SECURITY RISKS](#sai919709_13)** | **114** |
|  **[PROXY VOTING GUIDELINES AND PROCEDURES](#sai919709_14)** | **114** |
|  **[SECURITIES RATINGS](#sai919709_15)** | **114** |
|  **[APPENDIX A - PROXY VOTING PROCEDURES OF THE PUTNAM FUNDS](#sai919709_16)** | **119** |

---

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#### SAI

#### PART I

#### FUND ORGANIZATION AND CLASSIFICATION
Each of ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF is a diversified series of Putnam ETF Trust (the "Trust"). Each of BDC Income ETF, BioRevolution ETF and Emerging Markets ex-China ETF is a non-diversified series of the Trust. The Trust is a Delaware statutory trust organized on December 22, 2020.

The Trust is an open-end management investment company with an unlimited number of authorized shares of beneficial interest. The Trustees may, without shareholder approval, create two or more series of shares representing separate investment portfolios. Any series of shares may be divided without shareholder approval into two or more classes of shares having such preferences and special or relative rights and privileges as the Trustees determine.

Each share has one vote per dollar of net asset value represented by such share.

Shares of all classes vote together as a single class except when otherwise required by law or as determined by the Trustees. The Trustees may take many actions affecting the fund without shareholder approval, including under certain circumstances merging the Fund into another Putnam fund. Shares are freely transferable, are entitled to dividends as declared by the Trustees, and, if the Fund were liquidated, would receive the net assets of the Fund.

The Fund may refuse any order to purchase shares. Although the Fund is not required to hold annual meetings of its shareholders, shareholders holding at least 10% of the outstanding shares entitled to vote have the right to call a meeting to elect or remove Trustees, or to take other actions as provided in the Agreement and Declaration of Trust.

#### Information about the Summary Prospectus, Prospectus, and SAI
The Fund has entered into contractual arrangements with an investment adviser, distributor, transfer 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 Trust's Agreement and Declaration of Trust, any claims asserted by a shareholder against or on behalf of the Trust (or its series), including claims against Trustees and Officers, must be brought in courts of the State of Delaware.

#### INVESTMENT RESTRICTIONS
The Fund has adopted the fundamental investment restrictions below for the protection of shareholders. Fundamental investment restrictions may not be changed without a vote of a majority of the outstanding voting securities. The Investment Company Act of 1940, as amended (the "1940 Act"), provides that a "vote of a majority of the outstanding voting securities" of a fund means the affirmative vote of the lesser of (1) more than 50% of the outstanding fund shares, or (2) 67% or more of the shares present at a meeting if more than 50% of the outstanding fund shares are represented at the meeting in person or by proxy.

#### As fundamental investment restrictions, the Fund may not and will not:
(1) Borrow money in excess of 33 1/3% of the value of its total assets (not including the amount borrowed) at the time the borrowing is made.

(2) Underwrite securities issued by other persons except to the extent that, in connection with the disposition of its portfolio investments, it may be deemed to be an underwriter under certain federal securities laws.

(3) Purchase or sell real estate, although it may purchase securities of issuers which deal in real estate, securities which are secured by interests in real estate, and securities representing interests in real estate, and it may acquire and dispose of real

------

estate or interests in real estate acquired through the exercise of its rights as a holder of debt obligations secured by real estate or interests therein.

(4) Purchase or sell commodities or commodity contracts, except as permitted by applicable law and the fund may purchase or sell (a) other instruments backed by commodities and (b) commodities acquired as a result of ownership of securities or other instruments.

(5) Make loans, except by purchase of debt obligations in which the fund may invest consistent with its investment policies (including without limitation debt obligations issued by other Putnam funds), by entering into repurchase agreements, or by lending its portfolio securities.

(6) BDC Income ETF, BioRevolution ETF and Emerging Markets ex-China ETF: With respect to 50% of its total assets, invest in securities of any issuer if, immediately after such investment, more than 5% of the total assets of the fund (taken at current value) would be invested in the securities of such issuer; provided that this limitation does not apply to obligations issued or guaranteed as to interest or principal by the U.S. government or its agencies or instrumentalities or to securities issued by other investment companies.

ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF: With respect to 75% of its total assets, invest in securities of any issuer if, immediately after such investment, more than 5% of the total assets of the fund (taken at current value) would be invested in the securities of such issuer; provided that this limitation does not apply to obligations issued or guaranteed as to interest or principal by the U.S. government or its agencies or instrumentalities or to securities issued by other investment companies.

(7) BDC Income ETF, BioRevolution ETF, and Emerging Markets ex-China ETF: With respect to 50% of its total assets, acquire more than 10% of the outstanding voting securities of any issuer; provided that this limitation does not apply to obligations issued or guaranteed as to interest or principal by the U.S. government or its agencies or instrumentalities or to securities issued by other investment companies.

ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF: With respect to 75% of its total assets, acquire more than 10% of the outstanding voting securities of any issuer; provided that this limitation does not apply to obligations issued or guaranteed as to interest or principal by the U.S. government or its agencies or instrumentalities or to securities issued by other investment companies.

(8) All Funds except BDC Income ETF: Purchase securities (other than securities of the U.S. government, its agencies or instrumentalities) if as a result of such purchase, more than 25% of the fund's total assets would be invested in any one industry.

BDC Income ETF: Invest more than 25% of its total assets in a particular industry or group of industries, except that the Fund will invest more than 25% of its total assets in business development companies ("BDCs"). This limitation is not applicable to investments in obligations issued or guaranteed by the U.S. government, its agencies and instrumentalities or repurchase agreements with respect thereto.

(9) Issue any class of securities which is senior to the fund's shares of beneficial interest, except for permitted borrowings.

For purposes of the Fund's fundamental policy on commodities and commodities contracts (#4 above), notwithstanding any federal legislation or regulatory action by the Commodity Futures Trading Commission ("CFTC") that subject swaps to regulation by the CFTC, the Fund will not consider such instruments to be commodities or commodity contracts for purposes of this policy.

BDC Income ETF: For purposes of the Fund's fundamental policies on diversification (#6 and #7 above), the Fund will consider the term "investment companies" to include any issuer that qualifies as a "regulated investment company" under Section 851(a)

------

of the Internal Revenue Code of 1986, as amended, including, without limitation, an issuer that has in effect an election under the Investment Company Act of 1940, as amended, to be treated as a "business development company."

For purposes of the Fund's fundamental policy on industry concentration (#8 above), the Fund's investment manager determines the appropriate industry categories and assigns issuers to them, informed by a variety of considerations, including relevant third party categorization systems. Industry categories and issuer assignments may change over time as industry sectors and issuers evolve. Portfolio allocations shown in shareholder reports and other communications may use broader investment sectors or narrower sub-industry categories.

All percentage limitations on investments will apply at the time of the making of an investment and shall not be considered violated unless an excess or deficiency occurs or exists immediately after and as a result of such investment.

#### The following non-fundamental investment policy may be changed by the Trustees without shareholder approval:
ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF: The Fund will not acquire any securities of registered open-end investment companies or registered unit investment trusts in reliance on Sections 12(d)(1)(F) or (G)of the Investment Company Act of 1940, as amended.

#### CHARGES AND EXPENSES

#### Creation/Redemption Transaction Fees
The following table shows the standard transaction fees for creations and redemptions.

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| | | |
|:---|:---|:---|
| **Fund**<br>| **Standard Creation/Redemption <br>Transaction Fee (in kind)** | **Standard Creation/Redemption <br>Transaction Fee (in cash)** |
| &nbsp;&nbsp; BDC Income ETF | $250 | $100 |
| &nbsp;&nbsp; BioRevolution ETF | $250 | $100 |
| &nbsp;&nbsp; Emerging Markets ex-China ETF | $250 | $100 |
| &nbsp;&nbsp; ESG Core Bond ETF | $500 | $100 |
| &nbsp;&nbsp; ESG High Yield ETF | $500 | $100 |
| &nbsp;&nbsp; ESG Ultra Short ETF | $500 | $100 |

---

#### Management fees: BDC Income ETF, BioRevolution ETF and Emerging Market ex-China ETF
Putnam Investment Management, LLC (the "Investment Manager") serves as the Fund's investment manager. Under the Fund's management agreement with the Investment Manager (the "Management Contract"), the Fund pays an annual all-inclusive management fee to the Investment Manager as shown below. The management fee is based on the Fund's average daily net assets and is calculated and accrued daily. In consideration of the management fee, the Investment Manager pays all expenses incurred by the Fund, or reimburses the Fund for, all of the Fund's organizational and other operating expenses, excluding only: (i) interest and taxes (including, but not limited to, income, excise, transfer and withholding taxes); (ii) expenses of the Fund incurred with respect to the acquisition and disposition of portfolio securities, commodities or other financial instruments and the execution of portfolio transactions, including brokerage commissions; (iii) expenses incurred in connection with any distribution plan adopted by the Fund in compliance with Rule 12b-1 under the 1940 Act, including distribution fees; (iv) expenses of printing and mailing proxy materials to shareholders of the Fund; (v) all other expenses incidental to holding meetings of the Fund's shareholders, including proxy solicitations therefor; (vi) litigation expenses (including, but not limited to, any indemnification obligation, attorneys' fees, expenses, costs, judgments, amounts paid in settlement, fines, penalties, fees of expert witnesses, document production fees, and all other liabilities whatsoever incurred or paid by the Fund or a person indemnified by the Fund); (vii) the fee payable to the Investment Manager hereunder; (viii) any extraordinary expenses (which, for the avoidance of doubt, do not include expenses related to the organization of any subsidiary for a fund or the ongoing corporate expenses of maintaining such subsidiary) and (ix) acquired fund fees and expenses.

Management Fee:

BDC Income ETF: 0.75%

------

BioRevolution ETF: 0.70%

Emerging Markets ex-China ETF: 0.69%\*

\*Prior to July 1, 2025, Emerging Markets ex-China ETF paid an annual all-inclusive management fee of 0.85% to the Investment Manager based on the Fund's average daily net assets.

#### Management fees: ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF
Franklin Advisers, Inc. (the "Investment Manager") serves as the Fund's investment manager. Under the Fund's management agreement with the Investment Manager (the "Management Contract"), the Fund pays an annual all-inclusive management fee to the Investment Manager as shown below. The management fee is based on the Fund's average daily net assets and is calculated and accrued daily. In consideration of the management fee, the Investment Manager pays all expenses incurred by the Fund, or reimburses the Fund for, all of the Fund's organizational and other operating expenses, excluding only: (i) interest and taxes (including, but not limited to, income, excise, transfer and withholding taxes); (ii) expenses of the Fund incurred with respect to the acquisition and disposition of portfolio securities, commodities or other financial instruments and the execution of portfolio transactions, including brokerage commissions; (iii) expenses incurred in connection with any distribution plan adopted by the Fund in compliance with Rule 12b-1 under the 1940 Act, including distribution fees; (iv) expenses of printing and mailing proxy materials to shareholders of the Fund; (v) all other expenses incidental to holding meetings of the Fund's shareholders, including proxy solicitations therefor; (vi) litigation expenses (including, but not limited to, any indemnification obligation, attorneys' fees, expenses, costs, judgments, amounts paid in settlement, fines, penalties, fees of expert witnesses, document production fees, and all other liabilities whatsoever incurred or paid by the Fund or a person indemnified by the Fund); (vii) the fee payable to the Investment Manager hereunder; (viii) any extraordinary expenses (which, for the avoidance of doubt, do not include expenses related to the organization of any subsidiary for a fund or the ongoing corporate expenses of maintaining such subsidiary) and (ix) acquired fund fees and expenses.

Management Fee:

ESG Core Bond ETF: 0.35%

ESG High Yield ETF: 0.55%

ESG Ultra Short ETF: 0.25%

For the past three fiscal years ended April 30, pursuant to the applicable management contract, the Fund incurred the following fees:

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---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Fund name** | **Fiscal year** | **Fiscal year** | **Management fee paid** | **Amount of management** <br>**fee waived\*** | **Amount management <br> fee would have been <br>without waivers** |
|  BDC Income ETF | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2025 |  | $964087 | $1289 | $965376 |
|  | 2024 |  | $352113 | $382 | $352495 |
|  | 2023 | \*\* | $66336 | $86 | $66422 |
|  BioRevolution ETF | 2025 |  | $37138 | $360 | $37498 |
|  | 2024 |  | $36284 | $420 | $36704 |
|  | 2023 | \*\* | $18638 | $67 | $18705 |
|  Emerging Markets ex-China ETF | 2025 |  | $66498 | $658 | $67156 |
|  | 2024 | \*\*\* | $54028 | $133 | $54161 |
|  ESG Core Bond ETF | 2025 |  | $2233606 | $88755 | $2322361 |
|  | 2024 |  | $1630290 | $33237 | $1663527 |
|  | 2023 | \*\*\*\* | $337530 | $31 | $337561 |
|  ESG High Yield ETF | 2025 |  | $849074 | $28870 | $877944 |
|  | 2024 |  | $584823 | $19690 | $604513 |
|  | 2023 | \*\*\*\* | $131259 | $1596 | $132855 |
|  ESG Ultra Short ETF | 2025 |  | $265059 | $2787 | $267846 |
|  | 2024 |  | $254676 | $564 | $255240 |
|  | 2023 | \*\*\*\* | $67876 | $21 | $67897 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;\* For the fiscal year ended April 30, 2025, April 30, 2024 and April 30, 2023 management fees paid by the Fund were reduced by an amount equal to the management fees paid by affiliated funds in which the Fund invested. 

\*\* For the period September 29, 2022 (commencement of operations) to April 30, 2023.

\*\*\* For the period May 17, 2023 (commencement of operations) to April 30, 2024.

\*\*\*\* For the period January 19, 2023 (commencement of operations) to April 30, 2023.

#### Brokerage commissions
For the past three fiscal years ended April 30, the Fund paid the following brokerage commissions:

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---

| | | | |
|:---|:---|:---|:---|
| **Fund name** | **Fiscal year** | **Fiscal year** | **Broker commissions** |
|  BDC Income ETF | 2025 |  | $195462 \* |
|  | 2024 |  | $84745 |
|  | 2023 | \*\* | $30734 |
|  BioRevolution ETF | 2025 |  | $574 |
|  | 2024 |  | $1109 |
|  | 2023 | \*\* | $2208 |
|  Emerging Markets ex-China ETF | 2025 |  | $14601 |
|  | 2024 | \*\*\* | $14592 |
|  ESG Core Bond ETF | 2025 |  | $0 |
|  | 2024 |  | $0 |
|  | 2023 | \*\*\*\* | $0 |
|  ESG High Yield ETF | 2025 |  | $0 |
|  | 2024 |  | $414 |
|  | 2023 | \*\*\*\* | $1087 |
|  ESG Ultra Short ETF | 2025 |  | $0 |
|  | 2024 |  | $0 |
|  | 2023 | \*\*\*\* | $0 |

---

\* The increase in brokerage commissions paid between the fiscal years ended April 30, 2024 and April 30, 2025 was due to an increase in assets under management.

\*\* For the period September 29, 2022 (commencement of operations) to April 30, 2023.

\*\*\* For the period May 17, 2023 (commencement of operations) to April 30, 2024.

\*\*\*\* For the period January 19, 2023 (commencement of operations) to April 30, 2023.

For the fiscal year ended April 30, 2025, the Fund placed transactions with brokers and dealers through which the Investment Manager and its affiliates receive brokerage or research services as follows:

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| | | |
|:---|:---|:---|
| **Fund name** | **Dollar Value of these transactions** | **Amount**<br> **of commissions** |
|  BDC Income ETF | $77135830 | $73867 |
|  BioRevolution ETF | $318517 | $32 |
|  Emerging Markets ex-China ETF | $3289049 | $3718 |

---

For the fiscal year ended April 30, 2025, ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF did not direct any brokerage transactions related to research services and did not pay any brokerage commissions related to research services.

As of April 30, 2025, the Fund held the following securities of its regular broker-dealers (or affiliates of such broker-dealers):

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---

| | | |
|:---|:---|:---|
| **Fund name** | **Broker-dealer or affiliates** | **Value of securities held** |
|  ESG Core Bond ETF | JPMorgan Chase & Co. | $11049467 |
|  | Bank of America Corp. | $8368722 |
|  | Morgan Stanley | $5511303 |
|  | Goldman Sachs Group, Inc. (The) | $1505874 |
|  ESG Ultra Short ETF | Citigroup, Inc. | $65229 |
|  | Bank of America Corp. | $2261369 |
|  | JPMorgan Chase & Co. | $2108065 |
|  | Wells Fargo & Co. | $624349 |
|  | Mizuho Financial Group | $641274 |
|  | Barclays PLC | $1744241 |
|  | Royal Bank of Canada | $1576661 |
|  | Truist Financial Corp. | $1287618 |

---

As of April 30, 2025, BDC Income ETF, BioRevolution ETF, Emerging Markets ex-China ETF and ESG High Yield ETF did not hold securities of its regular broker-dealers (or affiliates of such broker-dealers).

#### Trustee responsibilities and fees
The Trustees are responsible for generally overseeing the conduct of Fund business. Subject to such policies as the Trustees may determine, the Investment Manager furnishes a continuing investment program for the Fund and makes investment decisions on its behalf. Subject to the control of the Trustees, the Investment Manager also manages the Fund's other affairs and business.

The table below shows the value of each Trustee's holdings in the Fund and in all registered investment companies in the Franklin Templeton funds complex overseen by the Trustee as of December 31, 2024.

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---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | | **Dollar Range of Equity Securities in the Fund ($)** | **Dollar Range of Equity Securities in the Fund ($)** | **Dollar Range of Equity Securities in the Fund ($)** | **Dollar Range of Equity Securities in the Fund ($)** | **Dollar Range of Equity Securities in the Fund ($)** | |
| <br>**Trustees**  | **BDC Income ETF** | **BioRevolution<br>ETF** | **Emerging<br>Markets<br>ex-China<br>ETF** | **ESG Core<br>Bond ETF** | **ESG High<br>Yield ETF** | **ESG Ultra<br>Short ETF** | <br>**Aggregate Dollar Range<br>of Equity Securities in<br>All Registered<br>Investment Companies<br>in the Franklin<br>Templeton Funds<br>Complex Overseen by<br>Trustee ($)** |
|  **Independent Trustees** | **Independent Trustees** | **Independent Trustees** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $50001-$100000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy |  |  |  |  |  |  | $10001-$50000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $1-$10000 | $1-$10000 |  | $1-$10000 | $10001-$50000 | $10001-$50000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
|  **Interested Trustees** | **Interested Trustees** | **Interested Trustees** | **Interested Trustees** | **Interested Trustees** | **Interested Trustees** | **Interested Trustees** | **Interested Trustees** |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust |  |  |  |  |  |  | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds |  |  |  |  |  |  | over $100,000 |

---

Each Independent Trustee of the Fund receives an annual retainer fee and an additional fee for each Trustee meeting attended. Independent Trustees also are reimbursed for expenses they incur relating to their services as Trustees. All of the current Independent Trustees of the Fund are Trustees of all the Putnam funds and receive fees for their services.

The Trustees periodically review their fees to ensure that such fees continue to be appropriate in light of their responsibilities as well as in relation to fees paid to trustees of other mutual fund complexes. The Board Policy and Nominating Committee, which consists solely of Independent Trustees of the Fund, estimates that committee and Trustee meeting time, together with the appropriate preparation, requires the equivalent of at least four business days per regular Trustee meeting.

The standing committees of the Board of Trustees, and the number of times each committee met during the fiscal year ended April 30, 2025, are shown in the table below:

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---

| | |
|:---|:---|
|  Audit, Compliance and Risk Committee | 13 |
|  Board Policy and Nominating Committee | 6 |
|  Brokerage Committee | 3 |
|  Contract Committee | 8 |
|  Executive Committee | 1 |
|  Investment Oversight Committees |  |
|  Investment Oversight Committee A | 5 |
|  Investment Oversight Committee B | 5 |
|  Pricing Committee | 8 |
|  Exchange-Traded Fund Committee | 4 |

---

Effective July 1 2025, the following changes were made to the standing committees:

● The Brokerage Committee, the Pricing Committee and the Exchange-Traded Fund Committee were eliminated as standing committees.

● The Contract Committee assumed the responsibilities of the Brokerage Committee and the Audit, Compliance and Risk Committee assumed the responsibilities of the Pricing Committee.

● The responsibilities of the Exchange-Traded Fund Committee were assumed by the Investment Oversight Committees and the other standing committees as appropriate based on subject matter.

The following table shows the fees paid to each Trustee by the Fund for the fiscal year ended April 30, 2025 and the fees paid to each Trustee by other funds in the Franklin Templeton funds complex for services rendered during the calendar year ended December 31, 2024. Certain Independent Trustees who serve in leadership positions of the Board of Trustees or Board committees receive additional compensation, which is included in the fees shown below.

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| | | | | |
|:---|:---|:---|:---|:---|
| **Trustees**  | **Aggregate<br>compensation from<br>the Fund<sup>1</sup>** | **Pension or<br>retirement<br>benefits accrued**<br> **as part of Fund<br>expenses** | **Estimated<br>annual benefits<br>from Franklin**<br> **Templeton**<br> **funds complex**<br> **upon retirement<sup>2</sup>** | **Total<br>compensation<br>from Franklin<br>Templeton funds<br>complex** |
|  **BDC Income ETF** |  |  |  |  |
|  **Independent Trustees**  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $350 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $473 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $350 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $366 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $337 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $350 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $350 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $376 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $362 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $350 | N/A | N/A | $382000 |
|  **Interested Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |
|  **BioRevolution ETF** |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $13 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $18 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $13 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $14 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $13 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $13 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $13 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $14 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $14 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $13 | N/A | N/A | $382000 |
|  **Interested Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |
|  **Emerging Markets ex-China ETF** |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $19 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $26 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $19 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $20 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $18 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $19 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $19 | N/A | N/A | $355320 |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $21 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $20 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $19 | N/A | N/A | $382000 |
|  **Interested Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |
|  **ESG Core Bond ETF** |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $1706 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $2314 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $1706 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $1768 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $1627 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $1706 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $1706 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $1834 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $1756 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $1706 | N/A | N/A | $382000 |
|  **Interested Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |
|  **ESG High Yield ETF** |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $415 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $563 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $415 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $431 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $397 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $415 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $415 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $446 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $427 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $415 | N/A | N/A | $382000 |
|  **Interested Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |
|  **ESG Ultra Short ETF** |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $270 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $366 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $270 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $280 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $258 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $270 | N/A | N/A | $382000 |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $270 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $290 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $278 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $270 | N/A | N/A | $382000 |
|  **Interested Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |

---

<sup>1</sup> Certain Trustees are also owed compensation deferred pursuant to a Trustee Compensation Deferral Plan. As of April 30, 2025, the total amounts of deferred compensation payable by BDC Income ETF, Biorevolution ETF, Emerging Markets ex-China ETF, ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF, including income earned on such amounts, to these Trustees were: Mr. Ahamed – $14, $2, $2, $177, $40, and $45; Ms. Baumann - $11, $2, $1, $140, $32 and $36; Ms. Domotorffy - $12, $2, $1, $158, $36 and $40; Dr. Hill - $9, $1, $1 $107, $24 and $27; and Ms. Pillai - $5, $1, $1, $62, $14 and $16.

<sup>2</sup> Estimated benefits for each Trustee are based on Trustee fee rates for calendar years 2003, 2004 and 2005.

<sup>3</sup> Mr. Leibler retired from the Board of Trustees effective June 30, 2024.

<sup>4</sup> Mr. McGreevey was appointed to the Board of Trustees on May 17, 2024.

<sup>5</sup> Mr. Reynolds and Ms. Trust are not compensated by the Fund for their service as Trustees because of their affiliation with the Investment Manager.

Under a retirement plan for Trustees of Putnam funds (the "Plan"), each Trustee who retires with at least five years of service as a Trustee of the funds is entitled to receive an annual retirement benefit equal to one-half of the average annual attendance and retainer fees paid to such Trustee for calendar years 2003, 2004 and 2005. This retirement benefit is payable during a Trustee's lifetime, beginning the year following retirement, for the number of years of service through December 31, 2006. A death benefit, also available under the Plan, ensures that the Trustee and his or her beneficiaries will receive benefit payments for the lesser of an aggregate period of (i) ten years, or (ii) such Trustee's total years of service.

The Plan Administrator (currently the Board Policy and Nominating Committee) may terminate or amend the Plan at any time, but no termination or amendment will result in a reduction in the amount of benefits (i) currently being paid to a Trustee at the time of such termination or amendment, or (ii) to which a current Trustee would have been entitled had he or she retired immediately prior to such termination or amendment. The Trustees have terminated the Plan with respect to any Trustee first elected to the Board after 2003.

For additional information concerning the Trustees, see "Management" in Part II of this SAI.

#### Share Ownership
Principal Shareholders

Although the Fund does not have information concerning the beneficial ownership of shares held in the names of Depository Trust Company participant brokers ("DTC Participants"), to the best knowledge of the Fund, as of July 31, 2025, the following DTC Participants owned of record 5% or more of the outstanding shares of the Fund.

---

| | | |
|:---|:---|:---|
| **Fund** | **Name and Address** | **Percent of Ownership (%)** |
|  **BDC Income ETF** |  |  |
|  | CHARLES SCHWAB & CO, INC.<br> 211 MAIN ST<br> SAN FRANCISCO CA 94105-1905 | 28.89% |
|  | NATIONAL FINANCIAL SERVICES LLC<br> 499 WASHINGTON BLVD<br> JERSEY CITY, NJ 07310-1995 | 27.93% |

---

------

---

| | | |
|:---|:---|:---|
|  | RAYMOND JAMES<br> 880 CARILLON PARKWAY<br> ST. PETERSBURG, FL 33716-110 | 7.25% |
|  | PERSHING LLC<br> 1 PERSHING PLAZA<br> JERSEY CITY, NJ 07399 | 5.74% |
|  | VANGUARD<br> P.O. BOX 1110<br> VALLEY FORGE, PA 19482-1110 | 5.14% |
|  **BioRevolution ETF** |  |  |
|  | J.P. MORGAN SECURITIES LLC/JPMC<br> 20855 STONE OAK PKWY<br> SAN ANTONIO, TX 78258 | 68.95% |
|  | NATIONAL FINANCIAL SERVICES LLC<br> 499 WASHINGTON BLVD<br> JERSEY CITY, NJ 07310-1995 | 17.53% |
|  | CHARLES SCHWAB & CO, INC.<br> 211 MAIN ST<br> SAN FRANCISCO CA 94105-1905 | 5.43% |
|  **Emerging Markets ex-China ETF** |  |  |
|  | CHARLES SCHWAB & CO, INC.<br> 211 MAIN ST<br> SAN FRANCISCO CA 94105-1905 | 73.71% |
|  | NATIONAL FINANCIAL SERVICES LLC<br> 499 WASHINGTON BLVD<br> JERSEY CITY, NJ 07310-1995 | 13.31% |
|  | GOLDMAN SACHS GROUP, INC.<br> 200 WEST STREET<br> NEW YORK, NY10282 | 5.81% |
|  **ESG Core Bond ETF** |  |  |
|  | J.P. MORGAN SECURITIES LLC4<br> CHASE METROTECH CENTER<br> BROOKLYN, NY 11245-0001 | 99.15% |
|  **ESG High Yield ET** | J.P. MORGAN SECURITIES LLC4<br> CHASE METROTECH CENTER<br> BROOKLYN, NY 11245-0001 | 96.44% |

---

------

---

| | | |
|:---|:---|:---|
|  **ESG Ultra Short ETF** |  |  |
|  | J.P. MORGAN SECURITIES LLC4<br> CHASE METROTECH CENTER<br> BROOKLYN, NY 11245-0001 | 76.61% |
|  | CHARLES SCHWAB & CO, INC.<br> 211 MAIN ST<br> SAN FRANCISCO CA 94105-1905 | 10.15% |

---

Shareholders who beneficially own 25% or more of the outstanding shares of the Fund or who are otherwise deemed to "control" the Fund may be able to determine or significantly influence the outcome of matters submitted to a vote of the Fund's shareholders.

As of July 31, 2025, the Trustees and officers of the Trust, as a group, owned less than 1% of the outstanding shares of each class of the Fund.

#### PORTFOLIO MANAGERS

#### Other Accounts Managed by the Portfolio Managers
The table below identifies the portfolio managers, the number of accounts (other than the Fund) for which the portfolio managers have day-to-day management responsibilities and the total assets in such accounts, within each of the following categories: registered investment companies, other pooled investment vehicles, and other accounts. For each category, the number of accounts and total assets in the accounts where fees are based on performance are also indicated, as applicable. Unless noted otherwise, all information is provided as of April 30, 2025.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Portfolio Manager** | **Type of Account** | **Number of<br>Accounts<br>Managed** | **Total Assets<br>Managed<br>(Millions) ($)** | **Number of Accounts<br>Managed for which<br>Advisory Fee is<br>Performance-Based** | **Assets Managed for<br>which Advisory Fee<br>is**<br> **Performance-Based<br>(Millions) ($)** |
|  **BDC Income ETF** | **BDC Income ETF** |  |  |  |  |
|  Michael Petro | Registered Investment Companies | 2 | 337 | 0 | 0 |
|  | Other Pooled Investment Vehicles | 2 | .6 | 0 | 0 |
|  | Other Accounts | 0 | 0 | 0 | 0 |
|  **BioRevolution ETF** | **BioRevolution ETF** | **BioRevolution ETF** |  |  |  |

---

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  William Rives | Registered Investment Companies | 2 | 638.25 | 0 | 0 |
|  | Other Pooled Investment Vehicles | 0 | 0 | 0 | 0 |
|  | <br> Other Accounts | 0 | 0 | 0 | 0 |
|  **Emerging Markets ex-China ETF** | **Emerging Markets ex-China ETF** |  |  |  |  |
|  Brian S. Freiwald | Registered Investment Companies | 2 | 441.5 | 1 | 418.4 |
|  | Other Pooled Investment Vehicles | 2 | 16.88 | 0 | 0 |
|  | <br> Other Accounts | 4 | 1028.7 | 0 | 0 |
| **ESG Core Bond ETF** | **ESG Core Bond ETF** | **ESG Core Bond ETF** |  |  |  |
|  Andrew C. Benson  | Registered Investment Companies | 10 | 15972 | 0 | 0 |
|  | Other Pooled Investment Vehicles | 10 | 21172.55 | 0 | 0 |
|  | <br> Other Accounts | 20 | 8315 | 0 | 0 |
|  Albert W. Chan | Registered Investment Companies | 9 | 9457.2 | 0 | 0 |
|  | Other Pooled Investment Vehicles | 8 | 1922.66 | 0 | 0 |
|  | <br> Other Accounts | 42 | 3026.63 | 1 | 447.7 |

---

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  Tina Chou | Registered Investment Companies | 8 | 10522 | 0 | 0 |
|  | Other Pooled Investment Vehicles | 2 | 415.66 | 0 | 0 |
|  | <br> Other Accounts | 0 | 0 | 0 | 0 |
|  Patrick A. Klein | Registered Investment Companies | 20 | 21445.71 | 0 | 0 |
|  | Other Pooled Investment Vehicles | 10 | 2649.75 | 0 | 0 |
|  | <br> Other Accounts | 15 | 6483.24 | 2 | 1723.53 |
|  Michael V. Salm | Registered Investment Companies | 24 | 30742.36 | 0 | 0 |
|  | Other Pooled Investment Vehicles | 26 | 22654.31 | 1 | 12.4 |
|  | <br> Other Accounts | 22 | 8455 | 3 | 4029.78 |
|  **ESG High Yield ETF** |  |  |  |  |  |
|  Norman P. Boucher | Registered Investment Companies | 3 | 1664.99 | 0 | 0 |
|  | Other Pooled Investment Vehicles | 4 | 681.76 | 0 | 0 |
|  | <br> Other Accounts | 5 | 647.96 | 0 | 0 |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
|  Robert L. Salvin | Registered Investment Companies | 4 | 2148.99 | 0 |
|  | Other Pooled Investment Vehicles | 3 | 681.76 | 0 |
|  | <br> Other Accounts | 10 | 6089.74 | 0 |
|  **ESG Ultra-Short ETF** |  |  |  |  |
|  Andrew C. Benson | Registered Investment Companies | 10 | 16537.33 | 0 |
|  | Other Pooled Investment Vehicles | 10 | 21172.55 | 0 |
|  | <br> Other Accounts | 20 | 8315 | 0 |
|  Joanne M. Driscoll | Registered Investment Companies | 12 | 33393.33 | 0 |
|  | Other Pooled Investment Vehicles | 6 | 3274.64 | 0 |
|  | <br> Other Accounts | 4 | 1190.47 | 0 |
|  Michael J. Lima | Registered Investment Companies | 12 | 33393.33 | 0 |
|  | Other Pooled Investment Vehicles | 5 | 2426.39 | 0 |
|  | <br> Other Accounts | 8 | 6580.31 | 0 |

---

#### Compensation of portfolio managers
The Investment Manager seeks to maintain a compensation program that is competitively positioned to attract, retain and motivate top-quality investment professionals. Portfolio managers receive a base salary, a cash incentive bonus opportunity, an equity compensation opportunity, and a benefits package. Portfolio manager compensation is reviewed annually, and the level of compensation is based on individual performance, the salary range for a portfolio manager's level of responsibility and Franklin

------

Templeton guidelines. Portfolio managers are provided no financial incentive to favor one fund or account over another. Each portfolio manager's compensation consists of the following three elements:

**Base salary** Each portfolio manager is paid a base salary.

**Annual bonus** Annual bonuses are structured to align the interests of the portfolio manager with those of the Fund's shareholders. Each portfolio manager is eligible to receive an annual bonus. Bonuses generally are split between cash (50% to 65%) and restricted shares of Franklin Resources, Inc. ("Resources") stock and mutual fund shares. The deferred equity-based compensation is intended to build a vested interest of the portfolio manager in the financial performance of both Resources and mutual funds advised by the Investment Manager. The bonus plan is intended to provide a competitive level of annual bonus compensation that is tied to the portfolio manager achieving consistently strong investment performance, which aligns the financial incentives of the portfolio manager and Fund shareholders. The Chief Investment Officer of the Investment Manager and/or other officers of the Investment Manager, with responsibility for the Fund, have discretion in the granting of annual bonuses to portfolio managers in accordance with Franklin Templeton guidelines. The following factors are generally used in determining bonuses under the plan:

● *Investment performance.* Primary consideration is given to the historic investment performance over the 1, 3 and 5 preceding years of all accounts managed by the portfolio manager. The pre-tax performance of each fund managed is measured relative to a relevant peer group and/or applicable benchmark as appropriate.

● *Non-investment performance.* The more qualitative contributions of the portfolio manager to the Investment Manager's business and the investment management team, including professional knowledge, productivity, responsiveness to client needs and communication, are evaluated in determining the amount of any bonus award.

● *Responsibilities.* The characteristics and complexity of funds managed by the portfolio manager are factored in the Investment Manager's appraisal.

**Additional long-term equity-based compensation** Portfolio managers may also be awarded restricted shares or units of Resources stock or restricted shares or units of one or more mutual funds. Awards of such deferred equity-based compensation typically vest over time, so as to create incentives to retain key talent.

**Benefits** Portfolio managers also participate in benefit plans and programs available generally to all employees of the Investment Manager.

#### Portfolio managers' securities ownership
The table below identifies ownership of equity securities of the Fund by the portfolio managers responsible for the day-to-day management of the Fund as of April 30, 2025.

---

| | |
|:---|:---|
| Portfolio Managers | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dollar Range of Ownership of Securities ($) |
|  **BDC Income ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Michael Petro | $100001-$500000 |
|  **BioRevolution ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; William Rives | $100001-$500000 |
|  **Emerging Markets ex-China ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Brian S. Freiwald |  |

---

------

---

| | |
|:---|:---|
|  **ESG Core Bond ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Andrew C. Benson |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Albert W. Chan |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Tina Chou |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Patrick A. Klein |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Michael V. Salm |  |
|  **ESG High Yield ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Norman P. Boucher | $10001-$50000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Salvin |  |
|  **ESG Ultra-Short ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Andrew C. Benson | $1-$10000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Joanne M. Driscoll |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Michael J. Lima |  |

---

See "Management—Portfolio Transactions—Potential conflicts of interest in managing multiple accounts" in Part II of this SAI for information on how the Investment Manager addresses potential conflicts of interest resulting from an individual's management of more than one account.

#### SECURITIES LENDING ACTIVITIES
The Fund did not participate in any securities lending activities for the fiscal year ended April 30, 2025.

#### FINANCIAL STATEMENTS
The Fund's Form N-CSR for the fiscal year ended April 30, 2025 (https://www.sec.gov/Archives/edgar/data/1845809/000092881625000751/0000928816-25-000751-index.html,

https://www.sec.gov/Archives/edgar/data/1845809/000092881625000749/0000928816-25-000749-index.html,

https://www.sec.gov/Archives/edgar/data/1845809/000092881625000750/0000928816-25-000750-index.html,

https://www.sec.gov/Archives/edgar/data/1845809/000092881625000747/0000928816-25-000747-index.html,

https://www.sec.gov/Archives/edgar/data/1845809/000092881625000756/0000928816-25-000756-index.html,

https://www.sec.gov/Archives/edgar/data/1845809/000092881625000748/0000928816-25-000748-index.html) contains the Fund's audited financial statements, accompanying notes and the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, all of which are incorporated by reference into this SAI. These audited financial statements are available free of charge upon request by calling the Fund at 1-800-225-1581.

------

September 1, 2025

Putnam ETF Trust

---

| | | |
|:---|:---|:---|
| **Fund** | **Symbol** | **Principal U.S. Listing Exchange** |
| &nbsp;&nbsp;&nbsp;Putnam BDC Income ETF ("BDC Income ETF") | PBDC | NYSE Arca, Inc. |
| &nbsp;&nbsp;&nbsp;Putnam BioRevolution™ ETF ("BioRevolution ETF") | SYNB | NYSE Arca, Inc. |
| &nbsp;&nbsp;&nbsp;Putnam Emerging Markets ex-China ETF ("Emerging Markets ex-China ETF") | PEMX | NYSE Arca, Inc. |
| &nbsp;&nbsp;&nbsp;Putnam ESG Core Bond ETF ("ESG Core Bond ETF") | PCRB | NYSE Arca, Inc. |
| &nbsp;&nbsp;&nbsp;Putnam ESG High Yield ETF ("ESG High Yield ETF") | PHYD | NYSE Arca, Inc. |
| &nbsp;&nbsp;&nbsp;Putnam ESG Ultra Short ETF ("ESG Ultra Short ETF") | PULT | NYSE Arca, Inc. |

---

#### STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information ("SAI") is not a prospectus. If the Fund has more than one form of current prospectus, each reference to the prospectus in this SAI includes all of the Fund's prospectuses, unless otherwise noted. The SAI should be read together with the applicable prospectus. The audited financial statements and report of the Fund's independent registered public accounting firm in the Fund's Form N-CSR, for the fiscal year ended April 30, 2025, are incorporated by reference into this SAI, which means that they are part of this SAI for legal purposes.

Part I of this SAI contains specific information about each Fund listed above (references to the "Fund" mean each Fund listed on this cover page, unless otherwise noted). Part II includes information about the Fund and other Putnam mutual funds and exchange-traded funds (collectively, the "Putnam funds").

For a free copy of the Fund's current prospectus, shareholder reports, and/or financial statements, call Putnam Investor Services at 1-800-225-1581, write P.O. Box 219697, Kansas City, MO 64121-9697 or visit www.franklintempleton.com.

1 PETF4-SAI 09/25

------

#### **Table of Contents**

#### PART I

---

| | |
|:---|:---|
|  **[FUND ORGANIZATION AND CLASSIFICATION](#sai55443_1)** | **3** |
|  **[INVESTMENT RESTRICTIONS](#sai55443_2)** | **3** |
|  **[CHARGES AND EXPENSES](#sai55443_3)** | **5** |
|  **[PORTFOLIO MANAGERS](#sai55443_4)** | **16** |
|  **[SECURITIES LENDING ACTIVITIES](#sai55443_5)** | **21** |
|  **[FINANCIAL STATEMENTS](#sai55443_6)** | **21** |

---

#### PART II

---

| | |
|:---|:---|
|  **[BUYING AND SELLING SHARES](#sai55443_7)** | **22** |
|  **[MISCELLANEOUS INVESTMENTS, INVESTMENT PRACTICES AND RISKS](#sai55443_8)** | **29** |
|  **[EXCHANGE TRADED FUNDS RISK](#sai55443_9)** | **79** |
|  **[TAXES](#sai55443_10)** | **80** |
|  **[MANAGEMENT](#sai55443_11)** | **94** |
|  **[DISCLOSURE OF PORTFOLIO INFORMATION](#sai55443_12)** | **112** |
|  **[INFORMATION SECURITY RISKS](#sai55443_13)** | **114** |
|  **[PROXY VOTING GUIDELINES AND PROCEDURES](#sai55443_14)** | **114** |
|  **[SECURITIES RATINGS](#sai55443_15)** | **114** |
|  **[APPENDIX A - PROXY VOTING PROCEDURES OF THE PUTNAM FUNDS](#sai55443_16)** | **119** |

---

------

#### SAI

#### PART I

#### FUND ORGANIZATION AND CLASSIFICATION
Each of ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF is a diversified series of Putnam ETF Trust (the "Trust"). Each of BDC Income ETF, BioRevolution ETF and Emerging Markets ex-China ETF is a non-diversified series of the Trust. The Trust is a Delaware statutory trust organized on December 22, 2020.

The Trust is an open-end management investment company with an unlimited number of authorized shares of beneficial interest. The Trustees may, without shareholder approval, create two or more series of shares representing separate investment portfolios. Any series of shares may be divided without shareholder approval into two or more classes of shares having such preferences and special or relative rights and privileges as the Trustees determine.

Each share has one vote per dollar of net asset value represented by such share.

Shares of all classes vote together as a single class except when otherwise required by law or as determined by the Trustees. The Trustees may take many actions affecting the fund without shareholder approval, including under certain circumstances merging the Fund into another Putnam fund. Shares are freely transferable, are entitled to dividends as declared by the Trustees, and, if the Fund were liquidated, would receive the net assets of the Fund.

The Fund may refuse any order to purchase shares. Although the Fund is not required to hold annual meetings of its shareholders, shareholders holding at least 10% of the outstanding shares entitled to vote have the right to call a meeting to elect or remove Trustees, or to take other actions as provided in the Agreement and Declaration of Trust.

#### Information about the Summary Prospectus, Prospectus, and SAI
The Fund has entered into contractual arrangements with an investment adviser, distributor, transfer 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 Trust's Agreement and Declaration of Trust, any claims asserted by a shareholder against or on behalf of the Trust (or its series), including claims against Trustees and Officers, must be brought in courts of the State of Delaware .

#### INVESTMENT RESTRICTIONS
The Fund has adopted the fundamental investment restrictions below for the protection of shareholders. Fundamental investment restrictions may not be changed without a vote of a majority of the outstanding voting securities. The Investment Company Act of 1940, as amended (the "1940 Act"), provides that a "vote of a majority of the outstanding voting securities" of a fund means the affirmative vote of the lesser of (1) more than 50% of the outstanding fund shares, or (2) 67% or more of the shares present at a meeting if more than 50% of the outstanding fund shares are represented at the meeting in person or by proxy.

#### As fundamental investment restrictions, the Fund may not and will not:
(1) Borrow money in excess of 33 1/3% of the value of its total assets (not including the amount borrowed) at the time the borrowing is made.

(2) Underwrite securities issued by other persons except to the extent that, in connection with the disposition of its portfolio investments, it may be deemed to be an underwriter under certain federal securities laws.

(3) Purchase or sell real estate, although it may purchase securities of issuers which deal in real estate, securities which are secured by interests in real estate, and securities representing interests in real estate, and it may acquire and dispose of real

------

estate or interests in real estate acquired through the exercise of its rights as a holder of debt obligations secured by real estate or interests therein.

(4) Purchase or sell commodities or commodity contracts, except as permitted by applicable law and the fund may purchase or sell (a) other instruments backed by commodities and (b) commodities acquired as a result of ownership of securities or other instruments.

(5) Make loans, except by purchase of debt obligations in which the fund may invest consistent with its investment policies (including without limitation debt obligations issued by other Putnam funds), by entering into repurchase agreements, or by lending its portfolio securities.

(6) BDC Income ETF, BioRevolution ETF and Emerging Markets ex-China ETF: With respect to 50% of its total assets, invest in securities of any issuer if, immediately after such investment, more than 5% of the total assets of the fund (taken at current value) would be invested in the securities of such issuer; provided that this limitation does not apply to obligations issued or guaranteed as to interest or principal by the U.S. government or its agencies or instrumentalities or to securities issued by other investment companies.

ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF: With respect to 75% of its total assets, invest in securities of any issuer if, immediately after such investment, more than 5% of the total assets of the fund (taken at current value) would be invested in the securities of such issuer; provided that this limitation does not apply to obligations issued or guaranteed as to interest or principal by the U.S. government or its agencies or instrumentalities or to securities issued by other investment companies.

(7) BDC Income ETF, BioRevolution ETF, and Emerging Markets ex-China ETF: With respect to 50% of its total assets, acquire more than 10% of the outstanding voting securities of any issuer; provided that this limitation does not apply to obligations issued or guaranteed as to interest or principal by the U.S. government or its agencies or instrumentalities or to securities issued by other investment companies.

ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF: With respect to 75% of its total assets, acquire more than 10% of the outstanding voting securities of any issuer; provided that this limitation does not apply to obligations issued or guaranteed as to interest or principal by the U.S. government or its agencies or instrumentalities or to securities issued by other investment companies.

(8) All Funds except BDC Income ETF: Purchase securities (other than securities of the U.S. government, its agencies or instrumentalities) if as a result of such purchase, more than 25% of the fund's total assets would be invested in any one industry.

BDC Income ETF: Invest more than 25% of its total assets in a particular industry or group of industries, except that the Fund will invest more than 25% of its total assets in business development companies ("BDCs"). This limitation is not applicable to investments in obligations issued or guaranteed by the U.S. government, its agencies and instrumentalities or repurchase agreements with respect thereto.

(9) Issue any class of securities which is senior to the fund's shares of beneficial interest, except for permitted borrowings.

For purposes of the Fund's fundamental policy on commodities and commodities contracts (#4 above), notwithstanding any federal legislation or regulatory action by the Commodity Futures Trading Commission ("CFTC") that subject swaps to regulation by the CFTC, the Fund will not consider such instruments to be commodities or commodity contracts for purposes of this policy.

BDC Income ETF: For purposes of the Fund's fundamental policies on diversification (#6 and #7 above), the Fund will consider the term "investment companies" to include any issuer that qualifies as a "regulated investment company" under Section 851(a)

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of the Internal Revenue Code of 1986, as amended, including, without limitation, an issuer that has in effect an election under the Investment Company Act of 1940, as amended, to be treated as a "business development company."

For purposes of the Fund's fundamental policy on industry concentration (#8 above), the Fund's investment manager determines the appropriate industry categories and assigns issuers to them, informed by a variety of considerations, including relevant third party categorization systems. Industry categories and issuer assignments may change over time as industry sectors and issuers evolve. Portfolio allocations shown in shareholder reports and other communications may use broader investment sectors or narrower sub-industry categories.

All percentage limitations on investments will apply at the time of the making of an investment and shall not be considered violated unless an excess or deficiency occurs or exists immediately after and as a result of such investment.

#### The following non-fundamental investment policy may be changed by the Trustees without shareholder approval:
ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF: The Fund will not acquire any securities of registered open-end investment companies or registered unit investment trusts in reliance on Sections 12(d)(1)(F) or (G)of the Investment Company Act of 1940, as amended.

#### CHARGES AND EXPENSES

#### Creation/Redemption Transaction Fees
The following table shows the standard transaction fees for creations and redemptions.

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| | | |
|:---|:---|:---|
| **Fund** | **&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Standard Creation/Redemption** <br> **Transaction Fee (in kind)** | **&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Standard Creation/Redemption** <br> **Transaction Fee (in cash)**  |
| &nbsp;&nbsp; BDC Income ETF | $250 | $100 |
| &nbsp;&nbsp; BioRevolution ETF | $250 | $100 |
| &nbsp;&nbsp; Emerging Markets ex-China ETF | $250 | $100 |
| &nbsp;&nbsp; ESG Core Bond ETF | $500 | $100 |
| &nbsp;&nbsp; ESG High Yield ETF | $500 | $100 |
| &nbsp;&nbsp; ESG Ultra Short ETF | $500 | $100 |

---

#### Management fees: BDC Income ETF, BioRevolution ETF and Emerging Market ex-China ETF
Putnam Investment Management, LLC (the "Investment Manager") serves as the Fund's investment manager. Under the Fund's management agreement with the Investment Manager (the "Management Contract"), the Fund pays an annual all-inclusive management fee to the Investment Manager as shown below. The management fee is based on the Fund's average daily net assets and is calculated and accrued daily. In consideration of the management fee, the Investment Manager pays all expenses incurred by the Fund, or reimburses the Fund for, all of the Fund's organizational and other operating expenses, excluding only: (i) interest and taxes (including, but not limited to, income, excise, transfer and withholding taxes); (ii) expenses of the Fund incurred with respect to the acquisition and disposition of portfolio securities, commodities or other financial instruments and the execution of portfolio transactions, including brokerage commissions; (iii) expenses incurred in connection with any distribution plan adopted by the Fund in compliance with Rule 12b-1 under the 1940 Act, including distribution fees; (iv) expenses of printing and mailing proxy materials to shareholders of the Fund; (v) all other expenses incidental to holding meetings of the Fund's shareholders, including proxy solicitations therefor; (vi) litigation expenses (including, but not limited to, any indemnification obligation, attorneys' fees, expenses, costs, judgments, amounts paid in settlement, fines, penalties, fees of expert witnesses, document production fees, and all other liabilities whatsoever incurred or paid by the Fund or a person indemnified by the Fund); (vii) the fee payable to the Investment Manager hereunder; (viii) any extraordinary expenses (which, for the avoidance of doubt, do not include expenses related to the organization of any subsidiary for a fund or the ongoing corporate expenses of maintaining such subsidiary) and (ix) acquired fund fees and expenses.

Management Fee:

BDC Income ETF: 0.75%

------

BioRevolution ETF: 0.70%

Emerging Markets ex-China ETF: 0.69%\*

\*Prior to July 1, 2025, Emerging Markets ex-China ETF paid an annual all-inclusive management fee of 0.85% to the Investment Manager based on the Fund's average daily net assets.

#### Management fees: ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF
Franklin Advisers, Inc. (the "Investment Manager") serves as the Fund's investment manager. Under the Fund's management agreement with the Investment Manager (the "Management Contract"), the Fund pays an annual all-inclusive management fee to the Investment Manager as shown below. The management fee is based on the Fund's average daily net assets and is calculated and accrued daily. In consideration of the management fee, the Investment Manager pays all expenses incurred by the Fund, or reimburses the Fund for, all of the Fund's organizational and other operating expenses, excluding only: (i) interest and taxes (including, but not limited to, income, excise, transfer and withholding taxes); (ii) expenses of the Fund incurred with respect to the acquisition and disposition of portfolio securities, commodities or other financial instruments and the execution of portfolio transactions, including brokerage commissions; (iii) expenses incurred in connection with any distribution plan adopted by the Fund in compliance with Rule 12b-1 under the 1940 Act, including distribution fees; (iv) expenses of printing and mailing proxy materials to shareholders of the Fund; (v) all other expenses incidental to holding meetings of the Fund's shareholders, including proxy solicitations therefor; (vi) litigation expenses (including, but not limited to, any indemnification obligation, attorneys' fees, expenses, costs, judgments, amounts paid in settlement, fines, penalties, fees of expert witnesses, document production fees, and all other liabilities whatsoever incurred or paid by the Fund or a person indemnified by the Fund); (vii) the fee payable to the Investment Manager hereunder; (viii) any extraordinary expenses (which, for the avoidance of doubt, do not include expenses related to the organization of any subsidiary for a fund or the ongoing corporate expenses of maintaining such subsidiary) and (ix) acquired fund fees and expenses.

Management Fee:

ESG Core Bond ETF: 0.35%

ESG High Yield ETF: 0.55%

ESG Ultra Short ETF: 0.25%

For the past three fiscal years ended April 30, pursuant to the applicable management contract, the Fund incurred the following fees:

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---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Fund name** | **Fiscal year** | **Fiscal year** | **Management fee <br>paid** | **Amount of<br> management fee <br>waived\*** | **Amount<br> management fee** <br>**would have been<br>without waivers** |
|  BDC Income ETF | 2025 |  | $964087 | $1289 | $965376 |
|  | 2024 |  | $352113 | $382 | $352495 |
|  | 2023 | \*\* | $66336 | $86 | $66422 |
|  BioRevolution ETF | 2025 |  | $37138 | $360 | $37498 |
|  | 2024 |  | $36284 | $420 | $36704 |
|  | 2023 | \*\* | $18638 | $67 | $18705 |
|  Emerging Markets ex-China ETF | 2025 |  | $66498 | $658 | $67156 |
|  | 2024 | \*\*\* | $54028 | $133 | $54161 |
|  ESG Core Bond ETF | 2025 |  | $2233606 | $88755 | $2322361 |
|  | 2024 |  | $1630290 | $33237 | $1663527 |
|  | 2023 | \*\*\*\* | $337530 | $31 | $337561 |
|  ESG High Yield ETF | 2025 |  | $849074 | $28870 | $877944 |
|  | 2024 |  | $584823 | $19690 | $604513 |
|  | 2023 | \*\*\*\* | $131259 | $1596 | $132855 |
|  ESG Ultra Short ETF | 2025 |  | $265059 | $2787 | $267846 |
|  | 2024 |  | $254676 | $564 | $255240 |
|  | 2023 | \*\*\*\* | $67876 | $21 | $67897 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;\* For the fiscal year ended April 30, 2025, April 30, 2024 and April 30, 2023 management fees paid by the Fund were reduced by an amount equal to the management fees paid by affiliated funds in which the Fund invested. 

\*\* For the period September 29, 2022 (commencement of operations) to April 30, 2023.

\*\*\* For the period May 17, 2023 (commencement of operations) to April 30, 2024.

\*\*\*\* For the period January 19, 2023 (commencement of operations) to April 30, 2023.

#### Brokerage commissions
For the past three fiscal years ended April 30, the Fund paid the following brokerage commissions:

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---

| | | | |
|:---|:---|:---|:---|
| **Fund name** | **Fiscal year** | **Fiscal year** | **Broker commissions** |
|  BDC Income ETF | 2025 |  | $195462 \* |
|  | 2024 |  | $84745 |
|  | 2023 | \*\* | $30734 |
|  BioRevolution ETF | 2025 |  | $574 |
|  | 2024 |  | $1109 |
|  | 2023 | \*\* | $2208 |
|  Emerging Markets ex-China ETF | 2025 |  | $14601 |
|  | 2024 | \*\*\* | $14592 |
|  ESG Core Bond ETF | 2025 |  | $0 |
|  | 2024 |  | $0 |
|  | 2023 | \*\*\*\* | $0 |
|  ESG High Yield ETF | 2025 |  | $0 |
|  | 2024 |  | $414 |
|  | 2023 | \*\*\*\* | $1087 |
|  ESG Ultra Short ETF | 2025 |  | $0 |
|  | 2024 |  | $0 |
|  | 2023 | \*\*\*\* | $0 |

---

\* The increase in brokerage commissions paid between the fiscal years ended April 30, 2024 and April 30, 2025 was due to an increase in assets under management.

\*\* For the period September 29, 2022 (commencement of operations) to April 30, 2023.

\*\*\* For the period May 17, 2023 (commencement of operations) to April 30, 2024.

\*\*\*\* For the period January 19, 2023 (commencement of operations) to April 30, 2023.

For the fiscal year ended April 30, 2025, the Fund placed transactions with brokers and dealers through which the Investment Manager and its affiliates receive brokerage or research services as follows:

---

| | | |
|:---|:---|:---|
| **Fund name** | **Dollar Value of these<br>transactions** | **Amount of<br>commissions** |
|  BDC Income ETF | $77135830 | $73867 |
|  BioRevolution ETF | $318517 | $32 |
|  Emerging Markets ex-China ETF | $3289049 | $3718 |

---

For the fiscal year ended April 30, 2025, ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF did not direct any brokerage transactions related to research services and did not pay any brokerage commissions related to research services.

As of April 30, 2025, the Fund held the following securities of its regular broker-dealers (or affiliates of such broker-dealers):

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---

| | | |
|:---|:---|:---|
| **Fund name** | **Broker-dealer or affiliates** | **Value of securities held** |
|  ESG Core Bond ETF | JPMorgan Chase & Co. | $11049467 |
|  | Bank of America Corp. | $8368722 |
|  | Morgan Stanley | $5511303 |
|  | Goldman Sachs Group, Inc. (The) | $1505874 |
|  ESG Ultra Short ETF | Citigroup, Inc. | $65229 |
|  | Bank of America Corp. | $2261369 |
|  | JPMorgan Chase & Co. | $2108065 |
|  | Wells Fargo & Co. | $624349 |
|  | Mizuho Financial Group | $641274 |
|  | Barclays PLC | $1744241 |
|  | Royal Bank of Canada | $1576661 |
|  | Truist Financial Corp. | $1287618 |

---

As of April 30, 2025, BDC Income ETF, BioRevolution ETF, Emerging Markets ex-China ETF and ESG High Yield ETF did not hold securities of its regular broker-dealers (or affiliates of such broker-dealers).

#### Trustee responsibilities and fees
The Trustees are responsible for generally overseeing the conduct of Fund business. Subject to such policies as the Trustees may determine, the Investment Manager furnishes a continuing investment program for the Fund and makes investment decisions on its behalf. Subject to the control of the Trustees, the Investment Manager also manages the Fund's other affairs and business.

The table below shows the value of each Trustee's holdings in the Fund and in all registered investment companies in the Franklin Templeton funds complex overseen by the Trustee as of December 31, 2024.

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---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | | **Dollar Range of Equity Securities in the Fund ($)** | **Dollar Range of Equity Securities in the Fund ($)** | **Dollar Range of Equity Securities in the Fund ($)** | **Dollar Range of Equity Securities in the Fund ($)** | **Dollar Range of Equity Securities in the Fund ($)** | |
| <br>**Trustees**  | <br>**BDC Income**<br>**ETF** | **BioRevolution<br>ETF** | **Emerging<br>Markets<br>ex-China<br>ETF** | **ESG Core<br>Bond ETF** | **ESG High Yield<br>ETF** | **ESG Ultra<br>Short ETF** | <br>**Aggregate Dollar Range<br>of Equity Securities in<br>All Registered<br>Investment Companies<br>in the Franklin<br>Templeton Funds<br>Complex Overseen by<br>Trustee ($)** |
|  **Independent Trustees** | **Independent Trustees** | **Independent Trustees** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $50001-$100000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy |  |  |  |  |  |  | $10001-$50000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $1-$10000 | $1-$10000 |  | $1-$10000 | $10001-$50000 | $10001-$50000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
|  **Interested Trustees** | **Interested Trustees** | **Interested Trustees** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust |  |  |  |  |  |  | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds |  |  |  |  |  |  | over $100,000 |

---

Each Independent Trustee of the Fund receives an annual retainer fee and an additional fee for each Trustee meeting attended. Independent Trustees also are reimbursed for expenses they incur relating to their services as Trustees. All of the current Independent Trustees of the Fund are Trustees of all the Putnam funds and receive fees for their services.

The Trustees periodically review their fees to ensure that such fees continue to be appropriate in light of their responsibilities as well as in relation to fees paid to trustees of other mutual fund complexes. The Board Policy and Nominating Committee, which consists solely of Independent Trustees of the Fund, estimates that committee and Trustee meeting time, together with the appropriate preparation, requires the equivalent of at least four business days per regular Trustee meeting.

The standing committees of the Board of Trustees, and the number of times each committee met during the fiscal year ended April 30, 2025, are shown in the table below:

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---

| | |
|:---|:---|
|  Audit, Compliance and Risk Committee | 13 |
|  Board Policy and Nominating Committee | 6 |
|  Brokerage Committee | 3 |
|  Contract Committee | 8 |
|  Executive Committee | 1 |
|  Investment Oversight Committees |  |
|  Investment Oversight Committee A | 5 |
|  Investment Oversight Committee B | 5 |
|  Pricing Committee | 8 |
|  Exchange-Traded Fund Committee | 4 |

---

Effective July 1 2025, the following changes were made to the standing committees:

● The Brokerage Committee, the Pricing Committee and the Exchange-Traded Fund Committee were eliminated as standing committees.

● The Contract Committee assumed the responsibilities of the Brokerage Committee and the Audit, Compliance and Risk Committee assumed the responsibilities of the Pricing Committee.

● The responsibilities of the Exchange-Traded Fund Committee were assumed by the Investment Oversight Committees and the other standing committees as appropriate based on subject matter.

The following table shows the fees paid to each Trustee by the Fund for the fiscal year ended April 30, 2025 and the fees paid to each Trustee by other funds in the Franklin Templeton funds complex for services rendered during the calendar year ended December 31, 2024. Certain Independent Trustees who serve in leadership positions of the Board of Trustees or Board committees receive additional compensation, which is included in the fees shown below.

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| | | | | |
|:---|:---|:---|:---|:---|
| **Trustees**  | **Aggregate<br>compensation from<br>the Fund<sup>1</sup>** | **Pension or<br>retirement<br>benefits accrued<br>as part of Fund<br>expenses** | **Estimated<br>annual benefits<br>from Franklin<br>Templeton<br>funds complex<br>upon retirement<sup>2</sup>** | **Total<br>compensation<br>from Franklin<br>Templeton funds<br>complex** |
|  **BDC Income ETF** |  |  |  |  |
|  **Independent Trustees**  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $350 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $473 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $350 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $366 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $337 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $350 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $350 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $376 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $362 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $350 | N/A | N/A | $382000 |
|  **Interested Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |
|  **BioRevolution ETF** |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $13 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $18 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $13 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $14 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $13 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $13 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $13 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $14 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $14 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $13 | N/A | N/A | $382000 |
|  **Interested Trustees**  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |
|  **Emerging Markets ex-China ETF** |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $19 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $26 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $19 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $20 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $18 | N/A | N/A | $189590 |

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| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $19 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $19 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $21 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $20 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $19 | N/A | N/A | $382000 |
|  **Interested Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |
|  **ESG Core Bond ETF** |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $1706 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $2314 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $1706 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $1768 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $1627 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $1706 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $1706 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $1834 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $1756 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $1706 | N/A | N/A | $382000 |
|  **Interested Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |
|  **ESG High Yield ETF** |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $415 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $563 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $415 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $431 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $397 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $415 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $415 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $446 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $427 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $415 | N/A | N/A | $382000 |
|  **Interested Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |
|  **ESG Ultra Short ETF** |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $270 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $366 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $270 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $280 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $258 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $270 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $270 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $290 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $278 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $270 | N/A | N/A | $382000 |
|  **Interested Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |

---

<sup>1</sup> Certain Trustees are also owed compensation deferred pursuant to a Trustee Compensation Deferral Plan. As of April 30, 2025, the total amounts of deferred compensation payable by BDC Income ETF, Biorevolution ETF, Emerging Markets ex-China ETF, ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF, including income earned on such amounts, to these Trustees were: Mr. Ahamed – $14, $2, $2, $177, $40, and $45; Ms. Baumann - $11, $2, $1, $140, $32 and $36; Ms. Domotorffy - $12, $2, $1, $158, $36 and $40; Dr. Hill - $9, $1, $1 $107, $24 and $27; and Ms. Pillai - $5, $1, $1, $62, $14 and $16.

<sup>2</sup> Estimated benefits for each Trustee are based on Trustee fee rates for calendar years 2003, 2004 and 2005.

<sup>3</sup> Mr. Leibler retired from the Board of Trustees effective June 30, 2024.

<sup>4</sup> Mr. McGreevey was appointed to the Board of Trustees on May 17, 2024.

<sup>5</sup> Mr. Reynolds and Ms. Trust are not compensated by the Fund for their service as Trustees because of their affiliation with the Investment Manager.

Under a retirement plan for Trustees of Putnam funds (the "Plan"), each Trustee who retires with at least five years of service as a Trustee of the funds is entitled to receive an annual retirement benefit equal to one-half of the average annual attendance and retainer fees paid to such Trustee for calendar years 2003, 2004 and 2005. This retirement benefit is payable during a Trustee's lifetime, beginning the year following retirement, for the number of years of service through December 31, 2006. A death benefit, also available under the Plan, ensures that the Trustee and his or her beneficiaries will receive benefit payments for the lesser of an aggregate period of (i) ten years, or (ii) such Trustee's total years of service.

The Plan Administrator (currently the Board Policy and Nominating Committee) may terminate or amend the Plan at any time, but no termination or amendment will result in a reduction in the amount of benefits (i) currently being paid to a Trustee at the time of such termination or amendment, or (ii) to which a current Trustee would have been entitled had he or she retired immediately prior to such termination or amendment. The Trustees have terminated the Plan with respect to any Trustee first elected to the Board after 2003.

For additional information concerning the Trustees, see "Management" in Part II of this SAI.

#### Share Ownership
Principal Shareholders

Although the Fund does not have information concerning the beneficial ownership of shares held in the names of Depository Trust Company participant brokers ("DTC Participants"), to the best knowledge of the Fund, as of July 31, 2025, the following DTC Participants owned of record 5% or more of the outstanding shares of the Fund.

---

| | | |
|:---|:---|:---|
| **Fund** | **Name and Address** | **Percent of Ownership (%)** |
|  **BDC Income ETF** |  |  |
|  | CHARLES SCHWAB & CO, INC.<br> 211 MAIN ST<br> SAN FRANCISCO CA 94105-1905 | 28.89% |
|  | NATIONAL FINANCIAL SERVICES LLC<br> 499 WASHINGTON BLVD<br> JERSEY CITY, NJ 07310-1995 | 27.93% |

---

------

---

| | | |
|:---|:---|:---|
|  | RAYMOND JAMES<br> 880 CARILLON PARKWAY<br> ST. PETERSBURG, FL 33716-110 | 7.25% |
|  | PERSHING LLC<br> 1 PERSHING PLAZA<br> JERSEY CITY, NJ 07399 | 5.74% |
|  | VANGUARD<br> P.O. BOX 1110<br> VALLEY FORGE, PA 19482-1110 | 5.14% |
|  **BioRevolution ETF** |  |  |
|  | J.P. MORGAN SECURITIES LLC/JPMC<br> 20855 STONE OAK PKWY<br> SAN ANTONIO, TX 78258 | 68.95% |
|  | NATIONAL FINANCIAL SERVICES LLC<br> 499 WASHINGTON BLVD<br> JERSEY CITY, NJ 07310-1995 | 17.53% |
|  | CHARLES SCHWAB & CO, INC.<br> 211 MAIN ST<br> SAN FRANCISCO CA 94105-1905 | 5.43% |
|  **Emerging Markets ex-China ETF** |  |  |
|  | CHARLES SCHWAB & CO, INC.<br> 211 MAIN ST<br> SAN FRANCISCO CA 94105-1905 | 73.71% |
|  | NATIONAL FINANCIAL SERVICES LLC<br> 499 WASHINGTON BLVD<br> JERSEY CITY, NJ 07310-1995 | 13.31% |
|  | GOLDMAN SACHS GROUP, INC.<br> 200 WEST STREET<br> NEW YORK, NY10282 | 5.81% |
|  **ESG Core Bond ETF** |  |  |
|  | J.P. MORGAN SECURITIES LLC4<br> CHASE METROTECH CENTER<br> BROOKLYN, NY 11245-0001 | 99.15% |
|  **ESG High Yield ET** | J.P. MORGAN SECURITIES LLC4<br> CHASE METROTECH CENTER<br> BROOKLYN, NY 11245-0001 | 96.44% |

---

------

---

| | | |
|:---|:---|:---|
|  **ESG Ultra Short ETF** |  |  |
|  | J.P. MORGAN SECURITIES LLC4<br> CHASE METROTECH CENTER<br> BROOKLYN, NY 11245-0001 | 76.61% |
|  | CHARLES SCHWAB & CO, INC.<br> 211 MAIN ST<br> SAN FRANCISCO CA 94105-1905 | 10.15% |

---

Shareholders who beneficially own 25% or more of the outstanding shares of the Fund or who are otherwise deemed to "control" the Fund may be able to determine or significantly influence the outcome of matters submitted to a vote of the Fund's shareholders.

As of July 31, 2025, the Trustees and officers of the Trust, as a group, owned less than 1% of the outstanding shares of each class of the Fund.

#### PORTFOLIO MANAGERS

#### Other Accounts Managed by the Portfolio Managers
The table below identifies the portfolio managers, the number of accounts (other than the Fund) for which the portfolio managers have day-to-day management responsibilities and the total assets in such accounts, within each of the following categories: registered investment companies, other pooled investment vehicles, and other accounts. For each category, the number of accounts and total assets in the accounts where fees are based on performance are also indicated, as applicable. Unless noted otherwise, all information is provided as of April 30, 2025.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Portfolio Manager** | **Type of Account** | **Number of<br>Accounts<br>Managed** | **Total Assets<br>Managed<br>(Millions) ($)** | **Number of Accounts<br>Managed for which<br>Advisory Fee is<br>Performance-Based** | **Assets Managed for<br>which Advisory Fee<br>is**<br> **Performance-Based**<br> (Millions) ($) |
|  **BDC Income ETF** | **BDC Income ETF** |  |  |  |  |
|  Michael Petro | Registered<br> Investment<br> Companies | 2 | 337 | 0 | 0 |
|  | Other Pooled<br> Investment<br> Vehicles | 2 | .6 | 0 | 0 |
|  | Other Accounts | 0 | 0 | 0 | 0 |

---

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  **BioRevolution ETF** |  |  |  |  |  |
|  William Rives | Registered<br> Investment<br> Companies | 2 | 638.25 | 0 | 0 |
|  | Other Pooled<br> Investment<br> Vehicles | 0 | 0 | 0 | 0 |
|  | Other Accounts | 0 | 0 | 0 | 0 |
|  **Emerging Markets ex-China ETF** |  |  |  |  |  |
|  Brian S. Freiwald | Registered<br> Investment<br> Companies | 2 | 441.5 | 1 | 418.4 |
|  | Other Pooled<br> Investment<br> Vehicles | 2 | 16.88 | 0 | 0 |
|  | Other Accounts | 4 | 1028.7 | 0 | 0 |
|  **ESG Core Bond ETF** |  |  |  |  |  |
|  Andrew C. Benson | Registered<br> Investment<br> Companies | 10 | 15972 | 0 | 0 |
|  | Other Pooled<br> Investment<br> Vehicles | 10 | 21172.55 | 0 | 0 |
|  | Other Accounts | 20 | 8315 | 0 | 0 |

---

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  Albert W. Chan | Registered<br> Investment<br> Companies | 9 | 9457.2 | 0 | 0 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> Other Pooled<br> Investment<br> Vehicles | 8 | 1922.66 | 0 | 0 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> Other Accounts | 42 | 3026.63 | 1 | 447.7 |
|  Tina Chou | Registered<br> Investment<br> Companies | 8 | 10522 | 0 | 0 |
|  | Other Pooled<br> Investment<br> Vehicles | 2 | 415.66 | 0 | 0 |
|  | Other Accounts | 0 | 0 | 0 | 0 |
|  Patrick A. Klein | Registered<br> Investment<br> Companies | 20 | 21445.71 | 0 | 0 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> Other Pooled<br> Investment<br> Vehicles | 10 | 2649.75 | 0 | 0 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> Other Accounts | 15 | 6483.24 | 2 | 1723.53 |
|  Michael V. Salm | Registered<br> Investment<br> Companies | 24 | 30742.36 | 0 | 0 |
|  | Other Pooled<br> Investment<br> Vehicles | 26 | 22654.31 | 1 | 12.4 |
|  | Other Accounts | 22 | 8455 | 3 | 4029.78 |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| **ESG High Yield ETF** | **ESG High Yield ETF** |  |  |  |
|  Norman P. Boucher | Registered<br> Investment<br> Companies | 3 | 1664.99 | 0 |
|  | Other Pooled<br> Investment<br> Vehicles | 4 | 681.76 | 0 |
|  | Other Accounts | 5 | 647.96 | 0 |
|  Robert L. Salvin | Registered<br> Investment<br> Companies | 4 | 2148.99 | 0 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> Other Pooled<br> Investment<br> Vehicles | 3 | 681.76 | 0 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> Other Accounts | 10 | 6089.74 | 0 |
| **ESG Ultra-Short ETF** | **ESG Ultra-Short ETF** |  |  |  |
|  Andrew C. Benson | Registered<br> Investment<br> Companies | 10 | 16537.33 | 0 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> Other Pooled<br> Investment<br> Vehicles | 10 | 21172.55 | 0 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> Other Accounts | 20 | 8315 | 0 |
|  Joanne M. Driscoll | Registered<br> Investment<br> Companies | 12 | 33393.33 | 0 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> Other Pooled<br> Investment<br> Vehicles | 6 | 3274.64 | 0 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> Other Accounts | 4 | 1190.47 | 0 |
|  Michael J. Lima | Registered<br> Investment<br> Companies | 12 | 33393.33 | 0 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> Other Pooled<br> Investment<br> Vehicles | 5 | 2426.39 | 0 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> Other Accounts | 8 | 6580.31 | 0 |

---

#### Compensation of portfolio managers
The Investment Manager seeks to maintain a compensation program that is competitively positioned to attract, retain and motivate top-quality investment professionals. Portfolio managers receive a base salary, a cash incentive bonus opportunity, an equity compensation opportunity, and a benefits package. Portfolio manager compensation is reviewed annually, and the level of compensation is based on individual performance, the salary range for a portfolio manager's level of responsibility and Franklin

------

Templeton guidelines. Portfolio managers are provided no financial incentive to favor one fund or account over another. Each portfolio manager's compensation consists of the following three elements:

**Base salary** Each portfolio manager is paid a base salary.

**Annual bonus** Annual bonuses are structured to align the interests of the portfolio manager with those of the Fund's shareholders. Each portfolio manager is eligible to receive an annual bonus. Bonuses generally are split between cash (50% to 65%) and restricted shares of Franklin Resources, Inc. ("Resources") stock and mutual fund shares. The deferred equity-based compensation is intended to build a vested interest of the portfolio manager in the financial performance of both Resources and mutual funds advised by the Investment Manager. The bonus plan is intended to provide a competitive level of annual bonus compensation that is tied to the portfolio manager achieving consistently strong investment performance, which aligns the financial incentives of the portfolio manager and Fund shareholders. The Chief Investment Officer of the Investment Manager and/or other officers of the Investment Manager, with responsibility for the Fund, have discretion in the granting of annual bonuses to portfolio managers in accordance with Franklin Templeton guidelines. The following factors are generally used in determining bonuses under the plan:

● *Investment performance.* Primary consideration is given to the historic investment performance over the 1, 3 and 5 preceding years of all accounts managed by the portfolio manager. The pre-tax performance of each fund managed is measured relative to a relevant peer group and/or applicable benchmark as appropriate.

● *Non-investment performance.* The more qualitative contributions of the portfolio manager to the Investment Manager's business and the investment management team, including professional knowledge, productivity, responsiveness to client needs and communication, are evaluated in determining the amount of any bonus award.

● *Responsibilities.* The characteristics and complexity of funds managed by the portfolio manager are factored in the Investment Manager's appraisal.

**Additional long-term equity-based compensation** Portfolio managers may also be awarded restricted shares or units of Resources stock or restricted shares or units of one or more mutual funds. Awards of such deferred equity-based compensation typically vest over time, so as to create incentives to retain key talent.

**Benefits** Portfolio managers also participate in benefit plans and programs available generally to all employees of the Investment Manager.

#### Portfolio managers' securities ownership
The table below identifies ownership of equity securities of the Fund by the portfolio managers responsible for the day-to-day management of the Fund as of April 30, 2025.

---

| | |
|:---|:---|
| Portfolio Managers | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dollar Range of Ownership of Securities ($)  |
|  **BDC Income ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Michael Petro | $100001-$500000 |
|  **BioRevolution ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; William Rives | $100001-$500000 |
|  **Emerging Markets ex-China ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Brian S. Freiwald |  |

---

------

---

| | |
|:---|:---|
|  **ESG Core Bond ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Andrew C. Benson |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Albert W. Chan |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Tina Chou |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Patrick A. Klein |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Michael V. Salm  |  |
|  **ESG High Yield ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Norman P. Boucher | $10001-$50000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Salvin |  |
|  **ESG Ultra-Short ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Andrew C. Benson | $1-$10000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Joanne M. Driscoll |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Michael J. Lima |  |

---

See "Management—Portfolio Transactions—Potential conflicts of interest in managing multiple accounts" in Part II of this SAI for information on how the Investment Manager addresses potential conflicts of interest resulting from an individual's management of more than one account.

#### SECURITIES LENDING ACTIVITIES
The Fund did not participate in any securities lending activities for the fiscal year ended April 30, 2025.

#### FINANCIAL STATEMENTS
The Fund's Form N-CSR for the fiscal year ended April 30, 2025

(https://www.sec.gov/Archives/edgar/data/1845809/000092881625000751/0000928816-25-000751-index.html,

https://www.sec.gov/Archives/edgar/data/1845809/000092881625000749/0000928816-25-000749-index.html,

https://www.sec.gov/Archives/edgar/data/1845809/000092881625000750/0000928816-25-000750-index.html,

https://www.sec.gov/Archives/edgar/data/1845809/000092881625000747/0000928816-25-000747-index.html,

https://www.sec.gov/Archives/edgar/data/1845809/000092881625000756/0000928816-25-000756-index.html,

https://www.sec.gov/Archives/edgar/data/1845809/000092881625000748/0000928816-25-000748-index.html) contains the Fund's audited financial statements, accompanying notes and the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, all of which are incorporated by reference into this SAI. These audited financial statements are available free of charge upon request by calling the Fund at 1-800-225-1581.

------

September 1, 2025

Putnam ETF Trust

---

| | | |
|:---|:---|:---|
| **Fund** | **Symbol** | **Principal U.S. Listing Exchange** |
| &nbsp;&nbsp; Putnam BDC Income ETF ("BDC Income<br> ETF") | PBDC | NYSE Arca, Inc. |
| &nbsp;&nbsp; Putnam BioRevolution™ ETF<br> ("BioRevolution ETF") | SYNB | NYSE Arca, Inc. |
| &nbsp;&nbsp; Putnam Emerging Markets ex-China ETF<br> ("Emerging Markets ex-China ETF") | PEMX | NYSE Arca, Inc. |
| &nbsp;&nbsp; Putnam ESG Core Bond ETF ("ESG<br> Core Bond ETF") | PCRB | NYSE Arca, Inc. |
| &nbsp;&nbsp; Putnam ESG High Yield ETF ("ESG High<br> Yield ETF") | PHYD | NYSE Arca, Inc. |
| &nbsp;&nbsp; Putnam ESG Ultra Short ETF ("ESG<br> Ultra Short ETF") | PULT | NYSE Arca, Inc. |

---

**STATEMENT OF ADDITIONAL INFORMATION** 

This Statement of Additional Information ("SAI") is not a prospectus. If the Fund has more than one form of current prospectus, each reference to the prospectus in this SAI includes all of the Fund's prospectuses, unless otherwise noted. The SAI should be read together with the applicable prospectus. The audited financial statements and report of the Fund's independent registered public accounting firm in the Fund's Form N-CSR, for the fiscal year ended April 30, 2025, are incorporated by reference into this SAI, which means that they are part of this SAI for legal purposes.

Part I of this SAI contains specific information about each Fund listed above (references to the "Fund" mean each Fund listed on this cover page, unless otherwise noted). Part II includes information about the Fund and other Putnam mutual funds and exchange-traded funds (collectively, the "Putnam funds").

For a free copy of the Fund's current prospectus, shareholder reports, and/or financial statements, call Putnam Investor Services at

1-800-225-1581, write P.O. Box 219697, Kansas City, MO 64121-9697 or visit www.franklintempleton.com.

1 PETF4-SAI 09/25

------

#### **Table of Contents**

---

| | |
|:---|:---|
|  **[PART I](#sai861677_1a)** |  |
|  **[FUND ORGANIZATION AND CLASSIFICATION](#sai861677_1)** | **3** |
|  **[INVESTMENT RESTRICTIONS](#sai861677_2)** | **3** |
|  **[CHARGES AND EXPENSES](#sai861677_3)** | **5** |
|  **[PORTFOLIO MANAGERS](#sai861677_4)** | **16** |
|  **[SECURITIES LENDING ACTIVITIES](#sai861677_5)** | **21** |
|  **[FINANCIAL STATEMENTS](#sai861677_6)** | **21** |
|  **[PART II](#sai861677_6a)** |  |
|  **[BUYING AND SELLING SHARES](#sai861677_7)** | **22** |
|  **[MISCELLANEOUS INVESTMENTS, INVESTMENT PRACTICES AND RISKS](#sai861677_8)** | **29** |
|  **[EXCHANGE TRADED FUNDS RISK](#sai861677_9)** | **79** |
|  **[TAXES](#sai861677_10)** | **80** |
|  **[MANAGEMENT](#sai861677_11)** | **94** |
|  **[DISCLOSURE OF PORTFOLIO INFORMATION](#sai861677_12)** | **112** |
|  **[INFORMATION SECURITY RISKS](#sai861677_13)** | **114** |
|  **[PROXY VOTING GUIDELINES AND PROCEDURES](#sai861677_14)** | **114** |
|  **[SECURITIES RATINGS](#sai861677_15)** | **114** |
|  **[APPENDIX A - PROXY VOTING PROCEDURES OF THE PUTNAM FUNDS](#sai861677_16)** | **119** |

---

------

#### SAI

#### PART I
**FUND ORGANIZATION AND CLASSIFICATION**

Each of ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF is a diversified series of Putnam ETF Trust (the "Trust"). Each of BDC Income ETF, BioRevolution ETF and Emerging Markets ex-China ETF is a non-diversified series of the Trust. The Trust is a Delaware statutory trust organized on December 22, 2020.

The Trust is an open-end management investment company with an unlimited number of authorized shares of beneficial interest. The Trustees may, without shareholder approval, create two or more series of shares representing separate investment portfolios. Any series of shares may be divided without shareholder approval into two or more classes of shares having such preferences and special or relative rights and privileges as the Trustees determine.

Each share has one vote per dollar of net asset value represented by such share.

Shares of all classes vote together as a single class except when otherwise required by law or as determined by the Trustees. The Trustees may take many actions affecting the fund without shareholder approval, including under certain circumstances merging the Fund into another Putnam fund. Shares are freely transferable, are entitled to dividends as declared by the Trustees, and, if the Fund were liquidated, would receive the net assets of the Fund.

The Fund may refuse any order to purchase shares. Although the Fund is not required to hold annual meetings of its shareholders, shareholders holding at least 10% of the outstanding shares entitled to vote have the right to call a meeting to elect or remove Trustees, or to take other actions as provided in the Agreement and Declaration of Trust.

#### Information about the Summary Prospectus, Prospectus, and SAI
The Fund has entered into contractual arrangements with an investment adviser, distributor, transfer 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 Trust's Agreement and Declaration of Trust, any claims asserted by a shareholder against or on behalf of the Trust (or its series), including claims against Trustees and Officers, must be brought in courts of the State of Delaware .

#### INVESTMENT RESTRICTIONS
The Fund has adopted the fundamental investment restrictions below for the protection of shareholders. Fundamental investment restrictions may not be changed without a vote of a majority of the outstanding voting securities. The Investment Company Act of 1940, as amended (the "1940 Act"), provides that a "vote of a majority of the outstanding voting securities" of a fund means the affirmative vote of the lesser of (1) more than 50% of the outstanding fund shares, or (2) 67% or more of the shares present at a meeting if more than 50% of the outstanding fund shares are represented at the meeting in person or by proxy.

#### As fundamental investment restrictions, the Fund may not and will not:
(1) Borrow money in excess of 33 1/3% of the value of its total assets (not including the amount borrowed) at the time the borrowing is made.

(2) Underwrite securities issued by other persons except to the extent that, in connection with the disposition of its portfolio investments, it may be deemed to be an underwriter under certain federal securities laws.

(3) Purchase or sell real estate, although it may purchase securities of issuers which deal in real estate, securities which are secured by interests in real estate, and securities representing interests in real

------

estate, and it may acquire and dispose of real estate or interests in real estate acquired through the exercise of its rights as a holder of debt obligations secured by real estate or interests therein.

(4) Purchase or sell commodities or commodity contracts, except as permitted by applicable law and the fund may purchase or sell (a) other instruments backed by commodities and (b) commodities acquired as a result of ownership of securities or other instruments.

(5) Make loans, except by purchase of debt obligations in which the fund may invest consistent with its investment policies (including without limitation debt obligations issued by other Putnam funds), by entering into repurchase agreements, or by lending its portfolio securities.

(6) BDC Income ETF, BioRevolution ETF and Emerging Markets ex-China ETF: With respect to 50% of its total assets, invest in securities of any issuer if, immediately after such investment, more than 5% of the total assets of the fund (taken at current value) would be invested in the securities of such issuer; provided that this limitation does not apply to obligations issued or guaranteed as to interest or principal by the U.S. government or its agencies or instrumentalities or to securities issued by other investment companies.

ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF: With respect to 75% of its total assets, invest in securities of any issuer if, immediately after such investment, more than 5% of the total assets of the fund (taken at current value) would be invested in the securities of such issuer; provided that this limitation does not apply to obligations issued or guaranteed as to interest or principal by the U.S. government or its agencies or instrumentalities or to securities issued by other investment companies.

(7) BDC Income ETF, BioRevolution ETF, and Emerging Markets ex-China ETF: With respect to 50% of its total assets, acquire more than 10% of the outstanding voting securities of any issuer; provided that this limitation does not apply to obligations issued or guaranteed as to interest or principal by the U.S. government or its agencies or instrumentalities or to securities issued by other investment companies.

ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF: With respect to 75% of its total assets, acquire more than 10% of the outstanding voting securities of any issuer; provided that this limitation does not apply to obligations issued or guaranteed as to interest or principal by the U.S. government or its agencies or instrumentalities or to securities issued by other investment companies.

(8) All Funds except BDC Income ETF: Purchase securities (other than securities of the U.S. government, its agencies or instrumentalities) if as a result of such purchase, more than 25% of the fund's total assets would be invested in any one industry.

BDC Income ETF: Invest more than 25% of its total assets in a particular industry or group of industries, except that the Fund will invest more than 25% of its total assets in business development companies ("BDCs"). This limitation is not applicable to investments in obligations issued or guaranteed by the U.S. government, its agencies and instrumentalities or repurchase agreements with respect thereto.

(9) Issue any class of securities which is senior to the fund's shares of beneficial interest, except for permitted borrowings.

For purposes of the Fund's fundamental policy on commodities and commodities contracts (#4 above), notwithstanding any federal legislation or regulatory action by the Commodity Futures Trading Commission ("CFTC") that subject swaps to regulation by the CFTC, the Fund will not consider such instruments to be commodities or commodity contracts for purposes of this policy.

BDC Income ETF: For purposes of the Fund's fundamental policies on diversification (#6 and #7 above), the Fund will consider the term "investment companies" to include any issuer that qualifies as a "regulated investment company" under Section 851(a)

------

of the Internal Revenue Code of 1986, as amended, including, without limitation, an issuer that has in effect an election under the Investment Company Act of 1940, as amended, to be treated as a "business development company."

For purposes of the Fund's fundamental policy on industry concentration (#8 above), the Fund's investment manager determines the appropriate industry categories and assigns issuers to them, informed by a variety of considerations, including relevant third party categorization systems. Industry categories and issuer assignments may change over time as industry sectors and issuers evolve. Portfolio allocations shown in shareholder reports and other communications may use broader investment sectors or narrower sub-industry categories.

All percentage limitations on investments will apply at the time of the making of an investment and shall not be considered violated unless an excess or deficiency occurs or exists immediately after and as a result of such investment.

#### The following non-fundamental investment policy may be changed by the Trustees without shareholder approval:
ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF: The Fund will not acquire any securities of registered open-end investment companies or registered unit investment trusts in reliance on Sections 12(d)(1)(F) or (G)of the Investment Company Act of 1940, as amended.

#### CHARGES AND EXPENSES

#### Creation/Redemption Transaction Fees
The following table shows the standard transaction fees for creations and redemptions.

---

| | | |
|:---|:---|:---|
| **Fund** | **Standard Creation/Redemption <br>Transaction Fee (in kind)** | **Standard Creation/Redemption<br>Transaction Fee (in cash)** |
|  BDC Income ETF | $250 | $100 |
|  BioRevolution ETF | $250 | $100 |
|  Emerging Markets ex-China ETF | $250 | $100 |
|  ESG Core Bond ETF | $500 | $100 |
|  ESG High Yield ETF | $500 | $100 |
|  ESG Ultra Short ETF | $500 | $100 |

---

#### Management fees: BDC Income ETF, BioRevolution ETF and Emerging Market ex-China ETF
Putnam Investment Management, LLC (the "Investment Manager") serves as the Fund's investment manager. Under the Fund's management agreement with the Investment Manager (the "Management Contract"), the Fund pays an annual all-inclusive management fee to the Investment Manager as shown below. The management fee is based on the Fund's average daily net assets and is calculated and accrued daily. In consideration of the management fee, the Investment Manager pays all expenses incurred by the Fund, or reimburses the Fund for, all of the Fund's organizational and other operating expenses, excluding only: (i) interest and taxes (including, but not limited to, income, excise, transfer and withholding taxes); (ii) expenses of the Fund incurred with respect to the acquisition and disposition of portfolio securities, commodities or other financial instruments and the execution of portfolio transactions, including brokerage commissions; (iii) expenses incurred in connection with any distribution plan adopted by the Fund in compliance with Rule 12b-1 under the 1940 Act, including distribution fees; (iv) expenses of printing and mailing proxy materials to shareholders of the Fund; (v) all other expenses incidental to holding meetings of the Fund's shareholders, including proxy solicitations therefor; (vi) litigation expenses (including, but not limited to, any indemnification obligation, attorneys' fees, expenses, costs, judgments, amounts paid in settlement, fines, penalties, fees of expert witnesses, document production fees, and all other liabilities whatsoever incurred or paid by the Fund or a person indemnified by the Fund); (vii) the fee payable to the Investment Manager hereunder; (viii) any extraordinary expenses (which, for the avoidance of doubt, do not include expenses related to the organization of any subsidiary for a fund or the ongoing corporate expenses of maintaining such subsidiary) and (ix) acquired fund fees and expenses.

Management Fee:

BDC Income ETF: 0.75%

------

BioRevolution ETF: 0.70%

Emerging Markets ex-China ETF: 0.69%\*

\*Prior to July 1, 2025, Emerging Markets ex-China ETF paid an annual all-inclusive management fee of 0.85% to the Investment Manager based on the Fund's average daily net assets.

#### Management fees: ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF
Franklin Advisers, Inc. (the "Investment Manager") serves as the Fund's investment manager. Under the Fund's management agreement with the Investment Manager (the "Management Contract"), the Fund pays an annual all-inclusive management fee to the Investment Manager as shown below. The management fee is based on the Fund's average daily net assets and is calculated and accrued daily. In consideration of the management fee, the Investment Manager pays all expenses incurred by the Fund, or reimburses the Fund for, all of the Fund's organizational and other operating expenses, excluding only: (i) interest and taxes (including, but not limited to, income, excise, transfer and withholding taxes); (ii) expenses of the Fund incurred with respect to the acquisition and disposition of portfolio securities, commodities or other financial instruments and the execution of portfolio transactions, including brokerage commissions; (iii) expenses incurred in connection with any distribution plan adopted by the Fund in compliance with Rule 12b-1 under the 1940 Act, including distribution fees; (iv) expenses of printing and mailing proxy materials to shareholders of the Fund; (v) all other expenses incidental to holding meetings of the Fund's shareholders, including proxy solicitations therefor; (vi) litigation expenses (including, but not limited to, any indemnification obligation, attorneys' fees, expenses, costs, judgments, amounts paid in settlement, fines, penalties, fees of expert witnesses, document production fees, and all other liabilities whatsoever incurred or paid by the Fund or a person indemnified by the Fund); (vii) the fee payable to the Investment Manager hereunder; (viii) any extraordinary expenses (which, for the avoidance of doubt, do not include expenses related to the organization of any subsidiary for a fund or the ongoing corporate expenses of maintaining such subsidiary) and (ix) acquired fund fees and expenses.

Management Fee:

ESG Core Bond ETF: 0.35%

ESG High Yield ETF: 0.55%

ESG Ultra Short ETF: 0.25%

------

For the past three fiscal years ended April 30, pursuant to the applicable management contract, the Fund incurred the following fees:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Fund name** | **Fiscal year** | **Fiscal year** | **Management**<br>**fee paid** | **Amount of**<br>**management**<br>**fee waived\*** | **Amount**<br>**management**<br>**fee would have**<br>**been without**<br>**waivers** |
|  BDC Income ETF | 2025 |  | $964087 | $1289 | $965376 |
|  | 2024 |  | $352113 | $382 | $352495 |
|  | 2023 | \*\* | $66336 | $86 | $66422 |
|  BioRevolution ETF | 2025 |  | $37138 | $360 | $37498 |
|  | 2024 |  | $36284 | $420 | $36704 |
|  | 2023 | \*\* | $18638 | $67 | $18705 |
|  Emerging Markets ex-China ETF | 2025 |  | $66498 | $658 | $67156 |
|  | 2024 | \*\*\* | $54028 | $133 | $54161 |
|  ESG Core Bond ETF | 2025 |  | $2233606 | $88755 | $2322361 |
|  | 2024 |  | $1630290 | $33237 | $1663527 |
|  | 2023 | \*\*\*\* | $337530 | $31 | $337561 |
|  ESG High Yield ETF | 2025 |  | $849074 | $28870 | $877944 |
|  | 2024 |  | $584823 | $19690 | $604513 |
|  | 2023 | \*\*\*\* | $131259 | $1596 | $132855 |
|  ESG Ultra Short ETF | 2025 |  | $265059 | $2787 | $267846 |
|  | 2024 |  | $254676 | $564 | $255240 |
|  | 2023 | \*\*\*\* | $67876 | $21 | $67897 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;\* For the fiscal year ended April 30, 2025, April 30, 2024 and April 30, 2023 management fees paid by the Fund were reduced by an amount equal to the management fees paid by affiliated funds in which the Fund invested. 

\*\* For the period September 29, 2022 (commencement of operations) to April 30, 2023.

\*\*\* For the period May 17, 2023 (commencement of operations) to April 30, 2024.

\*\*\*\* For the period January 19, 2023 (commencement of operations) to April 30, 2023.

------

#### Brokerage commissions
For the past three fiscal years ended April 30, the Fund paid the following brokerage commissions:

---

| | | | |
|:---|:---|:---|:---|
| **Fund name** | **Fiscal year** | **Fiscal year** | **Broker commissions** |
|  BDC Income ETF | 2025 |  | $195462 \* |
|  | 2024 |  | $84745 |
|  | 2023 | \*\* | $30734 |
|  BioRevolution ETF | 2025 |  | $574 |
|  | 2024 |  | $1109 |
|  | 2023 | \*\* | $2208 |
|  Emerging Markets ex-China ETF | 2025 |  | $14601 |
|  | 2024 | \*\*\* | $14592 |
|  ESG Core Bond ETF | 2025 |  | $0 |
|  | 2024 |  | $0 |
|  | 2023 | \*\*\*\* | $0 |
|  ESG High Yield ETF | 2025 |  | $0 |
|  | 2024 |  | $414 |
|  | 2023 | \*\*\*\* | $1087 |
|  ESG Ultra Short ETF | 2025 |  | $0 |
|  | 2024 |  | $0 |
|  | 2023 | \*\*\*\* | $0 |

---

\* The increase in brokerage commissions paid between the fiscal years ended April 30, 2024 and April 30, 2025 was due to an increase in assets under management.

\*\* For the period September 29, 2022 (commencement of operations) to April 30, 2023.

\*\*\* For the period May 17, 2023 (commencement of operations) to April 30, 2024.

\*\*\*\* For the period January 19, 2023 (commencement of operations) to April 30, 2023.

For the fiscal year ended April 30, 2025, the Fund placed transactions with brokers and dealers through which the Investment Manager and its affiliates receive brokerage or research services as follows:

---

| | | |
|:---|:---|:---|
| **Fund name** | **Dollar Value of these** <br>**transactions** | **Amount of**<br> **commissions** |
|  BDC Income ETF | $77135830 | $73867 |
|  BioRevolution ETF | $318517 | $32 |
|  Emerging Markets ex-China ETF | $3289049 | $3718 |

---

For the fiscal year ended April 30, 2025, ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF did not direct any brokerage transactions related to research services and did not pay any brokerage commissions related to research services.

------

As of April 30, 2025, the Fund held the following securities of its regular broker-dealers (or affiliates of such broker-dealers):

---

| | | |
|:---|:---|:---|
| **Fund name** | **Broker-dealer or affiliates** | **Value of securities held** |
|  ESG Core Bond ETF | JPMorgan Chase & Co. | $11049467 |
|  | Bank of America Corp. | $8368722 |
|  | Morgan Stanley | $5511303 |
|  | Goldman Sachs Group, Inc. (The) | $1505874 |
|  ESG Ultra Short ETF | Citigroup, Inc. | $65229 |
|  | Bank of America Corp. | $2261369 |
|  | JPMorgan Chase & Co. | $2108065 |
|  | Wells Fargo & Co. | $624349 |
|  | Mizuho Financial Group | $641274 |
|  | Barclays PLC | $1744241 |
|  | Royal Bank of Canada | $1576661 |
|  | Truist Financial Corp. | $1287618 |

---

As of April 30, 2025, BDC Income ETF, BioRevolution ETF, Emerging Markets ex-China ETF and ESG High Yield ETF did not hold securities of its regular broker-dealers (or affiliates of such broker-dealers).

#### Trustee responsibilities and fees
The Trustees are responsible for generally overseeing the conduct of Fund business. Subject to such policies as the Trustees may determine, the Investment Manager furnishes a continuing investment program for the Fund and makes investment decisions on its behalf. Subject to the control of the Trustees, the Investment Manager also manages the Fund's other affairs and business.

------

The table below shows the value of each Trustee's holdings in the Fund and in all registered investment companies in the Franklin Templeton funds complex overseen by the Trustee as of December 31, 2024.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Dollar Range of Equity Securities in the Fund ($)** | **Dollar Range of Equity Securities in the Fund ($)** | **Dollar Range of Equity Securities in the Fund ($)** | **Dollar Range of Equity Securities in the Fund ($)** | **Dollar Range of Equity Securities in the Fund ($)** | **Dollar Range of Equity Securities in the Fund ($)** | |
| <br>**Trustees**  | **BDC Income**<br>**ETF** | **BioRevolution<br>ETF** | **Emerging<br>Markets<br>ex-China<br>ETF** | **ESG Core<br>Bond ETF** | **ESG High**<br>**Yield ETF** | **ESG Ultra<br>Short ETF** | <br>**Aggregate Dollar Range<br>of Equity Securities in<br>All Registered<br>Investment Companies<br>in the Franklin<br>Templeton Funds<br>Complex Overseen by<br>Trustee ($)** |
|  **Independent Trustees** | **Independent Trustees** | **Independent Trustees** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $50001-$100000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy |  |  |  |  |  |  | $10001-$50000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $1-$10000 | $1-$10000 |  | $1-$10000 | $10001-$50000 | $10001-$50000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
|  **Interested Trustees** | **Interested Trustees** | **Interested Trustees** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust |  |  |  |  |  |  | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds |  |  |  |  |  |  | over $100,000 |

---

------

Each Independent Trustee of the Fund receives an annual retainer fee and an additional fee for each Trustee meeting attended. Independent Trustees also are reimbursed for expenses they incur relating to their services as Trustees. All of the current Independent Trustees of the Fund are Trustees of all the Putnam funds and receive fees for their services.

The Trustees periodically review their fees to ensure that such fees continue to be appropriate in light of their responsibilities as well as in relation to fees paid to trustees of other mutual fund complexes. The Board Policy and Nominating Committee, which consists solely of Independent Trustees of the Fund, estimates that committee and Trustee meeting time, together with the appropriate preparation, requires the equivalent of at least four business days per regular Trustee meeting.

The standing committees of the Board of Trustees, and the number of times each committee met during the fiscal year ended April 30, 2025, are shown in the table below:

---

| | |
|:---|:---|
|  Audit, Compliance and Risk Committee | 13 |
|  Board Policy and Nominating Committee | 6 |
|  Brokerage Committee | 3 |
|  Contract Committee | 8 |
|  Executive Committee | 1 |
|  Investment Oversight Committees |  |
|  Investment Oversight Committee A | 5 |
|  Investment Oversight Committee B | 5 |
|  Pricing Committee | 8 |
|  Exchange-Traded Fund Committee | 4 |

---

Effective July 1 2025, the following changes were made to the standing committees:

● The Brokerage Committee, the Pricing Committee and the Exchange-Traded Fund Committee were eliminated as standing committees.

● The Contract Committee assumed the responsibilities of the Brokerage Committee and the Audit, Compliance and Risk Committee assumed the responsibilities of the Pricing Committee.

● The responsibilities of the Exchange-Traded Fund Committee were assumed by the Investment Oversight Committees and the other standing committees as appropriate based on subject matter.

------

The following table shows the fees paid to each Trustee by the Fund for the fiscal year ended April 30, 2025 and the fees paid to each Trustee by other funds in the Franklin Templeton funds complex for services rendered during the calendar year ended December 31, 2024. Certain Independent Trustees who serve in leadership positions of the Board of Trustees or Board committees receive additional compensation, which is included in the fees shown below.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Trustees** | **Aggregate<br>compensation**<br> **from the Fund<sup>1</sup>** | **Pension or**<br> **retirement benefits<br>accrued as part of<br>Fund expenses** | **Estimated annual<br>benefits from Franklin<br>Templeton funds<br>complex upon<br>retirement<sup>2</sup>** | **Total compensation<br>from Franklin<br>Templeton funds<br>complex** |
|  **BDC Income ETF** |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $350 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $473 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $350 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $366 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $337 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $350 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $350 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $376 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $362 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $350 | N/A | N/A | $382000 |
|  **Interested Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |
|  **BioRevolution ETF** |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $13 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $18 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $13 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $14 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $13 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $13 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $13 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $14 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $14 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $13 | N/A | N/A | $382000 |
|  **Interested Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |
|  **Emerging Markets ex-China ETF** |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $19 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $26 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $19 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $20 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $18 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $19 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $19 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $21 | $0 | $130333 | $407000 |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $20 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $19 | N/A | N/A | $382000 |
|  **Interested Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |
|  **ESG Core Bond ETF** |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $1706 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $2314 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $1706 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $1768 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $1627 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $1706 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $1706 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $1834 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $1756 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $1706 | N/A | N/A | $382000 |
|  **Interested Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |
|  **ESG High Yield ETF** |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $415 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $563 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $415 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $431 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $397 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $415 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $415 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $446 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $427 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $415 | N/A | N/A | $382000 |
|  **Interested Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |
|  **ESG Ultra Short ETF** |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $270 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $366 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $270 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $280 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $258 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $270 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $270 | N/A | N/A | $355320 |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $290 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $278 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $270 | N/A | N/A | $382000 |
|  **Interested Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |

---

<sup>1</sup> Certain Trustees are also owed compensation deferred pursuant to a Trustee Compensation Deferral Plan. As of April 30, 2025, the total amounts of deferred compensation payable by BDC Income ETF, Biorevolution ETF, Emerging Markets ex-China ETF, ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF, including income earned on such amounts, to these Trustees were: Mr. Ahamed – $14, $2, $2, $177, $40, and $45; Ms. Baumann - $11, $2, $1, $140, $32 and $36; Ms. Domotorffy - $12, $2, $1, $158, $36 and $40; Dr. Hill - $9, $1, $1 $107, $24 and $27; and Ms. Pillai - $5, $1, $1, $62, $14 and $16.

<sup>2</sup> Estimated benefits for each Trustee are based on Trustee fee rates for calendar years 2003, 2004 and 2005.

<sup>3</sup> Mr. Leibler retired from the Board of Trustees effective June 30, 2024.

<sup>4</sup> Mr. McGreevey was appointed to the Board of Trustees on May 17, 2024.

<sup>5</sup> Mr. Reynolds and Ms. Trust are not compensated by the Fund for their service as Trustees because of their affiliation with the Investment Manager.

Under a retirement plan for Trustees of Putnam funds (the "Plan"), each Trustee who retires with at least five years of service as a Trustee of the funds is entitled to receive an annual retirement benefit equal to one-half of the average annual attendance and retainer fees paid to such Trustee for calendar years 2003, 2004 and 2005. This retirement benefit is payable during a Trustee's lifetime, beginning the year following retirement, for the number of years of service through December 31, 2006. A death benefit, also available under the Plan, ensures that the Trustee and his or her beneficiaries will receive benefit payments for the lesser of an aggregate period of (i) ten years, or (ii) such Trustee's total years of service.

The Plan Administrator (currently the Board Policy and Nominating Committee) may terminate or amend the Plan at any time, but no termination or amendment will result in a reduction in the amount of benefits (i) currently being paid to a Trustee at the time of such termination or amendment, or (ii) to which a current Trustee would have been entitled had he or she retired immediately prior to such termination or amendment. The Trustees have terminated the Plan with respect to any Trustee first elected to the Board after 2003.

For additional information concerning the Trustees, see "Management" in Part II of this SAI.

#### Share Ownership
Principal Shareholders

Although the Fund does not have information concerning the beneficial ownership of shares held in the names of Depository Trust Company participant brokers ("DTC Participants"), to the best knowledge of the Fund, as of July 31, 2025, the following DTC Participants owned of record 5% or more of the outstanding shares of the Fund.

---

| | | |
|:---|:---|:---|
| **Fund** | **Name and Address** | **Percent of Ownership (%)** |
|  **BDC Income ETF** |  |  |
|  | CHARLES SCHWAB & CO, INC.<br> 211 MAIN ST<br> SAN FRANCISCO CA 94105-1905 | 28.89% |

---

------

---

| | | |
|:---|:---|:---|
|  | NATIONAL FINANCIAL SERVICES LLC<br> 499 WASHINGTON BLVD<br> JERSEY CITY, NJ 07310-1995 | 27.93% |
|  | RAYMOND JAMES<br> 880 CARILLON PARKWAY<br> ST. PETERSBURG, FL 33716-110 | 7.25% |
|  | PERSHING LLC<br> 1 PERSHING PLAZA<br> JERSEY CITY, NJ 07399 | 5.74% |
|  | VANGUARD<br> P.O. BOX 1110<br> VALLEY FORGE, PA 19482-1110 | 5.14% |
| **BioRevolution ETF** |  |  |
|  | J.P. MORGAN SECURITIES LLC/JPMC<br> 20855 STONE OAK PKWY<br> SAN ANTONIO, TX 78258 | 68.95% |
|  | NATIONAL FINANCIAL SERVICES LLC<br> 499 WASHINGTON BLVD<br> JERSEY CITY, NJ 07310-1995 | 17.53% |
|  | CHARLES SCHWAB & CO, INC.<br> 211 MAIN ST<br> SAN FRANCISCO CA 94105-1905 | 5.43% |
| **Emerging Markets ex-China ETF** |  |  |
|  | CHARLES SCHWAB & CO, INC.<br> 211 MAIN ST<br> SAN FRANCISCO CA 94105-1905 | 73.71% |
|  | NATIONAL FINANCIAL SERVICES LLC<br> 499 WASHINGTON BLVD<br> JERSEY CITY, NJ 07310-1995 | 13.31% |
|  | GOLDMAN SACHS GROUP, INC.<br> 200 WEST STREET<br> NEW YORK, NY10282 | 5.81% |
| **ESG Core Bond ETF** |  |  |
|  | J.P. MORGAN SECURITIES LLC4<br> CHASE METROTECH CENTER<br> BROOKLYN, NY 11245-0001 | 99.15% |

---

------

---

| | | |
|:---|:---|:---|
| **ESG High Yield ET** |  |  |
|  | J.P. MORGAN SECURITIES LLC4<br> CHASE METROTECH CENTER<br> BROOKLYN, NY 11245-0001 | 96.44% |
| **ESG Ultra Short ETF** |  |  |
|  | J.P. MORGAN SECURITIES LLC4<br> CHASE METROTECH CENTER<br> BROOKLYN, NY 11245-0001 | 76.61% |
|  | CHARLES SCHWAB & CO, INC.<br> 211 MAIN ST<br> SAN FRANCISCO CA 94105-1905 | 10.15% |

---

Shareholders who beneficially own 25% or more of the outstanding shares of the Fund or who are otherwise deemed to "control" the Fund may be able to determine or significantly influence the outcome of matters submitted to a vote of the Fund's shareholders.

As of July 31, 2025, the Trustees and officers of the Trust, as a group, owned less than 1% of the outstanding shares of each class of the Fund.

#### PORTFOLIO MANAGERS

#### Other Accounts Managed by the Portfolio Managers
The table below identifies the portfolio managers, the number of accounts (other than the Fund) for which the portfolio managers have day-to-day management responsibilities and the total assets in such accounts, within each of the following categories: registered investment companies, other pooled investment vehicles, and other accounts. For each category, the number of accounts and total assets in the accounts where fees are based on performance are also indicated, as applicable. Unless noted otherwise, all information is provided as of April 30, 2025.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Portfolio Manager** | **Type of Account** | **Number of<br>Accounts<br>Managed** | **Total Assets<br>Managed<br>(Millions) ($)** | **Number of Accounts<br>Managed for which<br>Advisory Fee is<br>Performance-Based** | **Assets Managed for<br>which Advisory**<br> **Fee is**<br> **Performance-Based**<br> (Millions) ($) |
|  **BDC Income ETF** | **BDC Income ETF** |  |  |  |  |
|  Michael Petro | Registered<br> Investment<br> Companies | 2 | 337 | 0 | 0 |
|  | Other Pooled<br> Investment Vehicles | 2 | .6 | 0 | 0 |
|  | Other Accounts | 0 | 0 | 0 | 0 |

---

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  **BioRevolution ETF** | **BioRevolution ETF** |  |  |  |  |
|  William Rives | Registered<br> Investment<br> Companies | 2 | 638.25 | 0 | 0 |
|  | Other Pooled Investment Vehicles | 0 | 0 | 0 | 0 |
|  | Other Accounts | 0 | 0 | 0 | 0 |
|  **Emerging Markets ex-China ETF** | **Emerging Markets ex-China ETF** |  |  |  |  |
|  Brian S. Freiwald | Registered<br> Investment<br> Companies | 2 | 441.5 | 1 | 418.4 |
|  | Other Pooled<br> Investment Vehicles | 2 | 16.88 | 0 | 0 |
|  | Other Accounts | 4 | 1028.7 | 0 | 0 |
|  **ESG Core Bond ETF** | **ESG Core Bond ETF** |  |  |  |  |
|  Andrew C. Benson | Registered<br> Investment<br> Companies | 10 | 15972 | 0 | 0 |
|  | Other Pooled<br> Investment Vehicles | 10 | 21172.55 | 0 | 0 |
|  | Other Accounts | 20 | 8315 | 0 | 0 |
|  Albert W. Chan | Registered<br> Investment<br> Companies | 9 | 9457.2 | 0 | 0 |
|  | Other Pooled<br> Investment Vehicles | 8 | 1922.66 | 0 | 0 |
|  | Other Accounts | 42 | 3026.63 | 1 | 447.7 |

---

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  Tina Chou | Registered<br> Investment<br> Companies | 8 | 10522 | 0 | 0 |
|  | Other Pooled<br> Investment Vehicles | 2 | 415.66 | 0 | 0 |
|  | Other Accounts | 0 | 0 | 0 | 0 |
|  Patrick A. Klein | Registered<br> Investment<br> Companies | 20 | 21445.71 | 0 | 0 |
|  | Other Pooled<br> Investment Vehicles | 10 | 2649.75 | 0 | 0 |
|  | Other Accounts | 15 | 6483.24 | 2 | 1723.53 |
|  Michael V. Salm | Registered<br> Investment<br> Companies | 24 | 30742.36 | 0 | 0 |
|  | Other Pooled<br> Investment Vehicles | 26 | 22654.31 | 1 | 12.4 |
|  | Other Accounts | 22 | 8455 | 3 | 4029.78 |
| **ESG High Yield ETF** | **ESG High Yield ETF** |  |  |  |  |
|  Norman P. Boucher | Registered<br> Investment<br> Companies | 3 | 1664.99 | 0 | 0 |
|  | Other Pooled<br> Investment Vehicles | 4 | 681.76 | 0 | 0 |
|  | Other Accounts | 5 | 647.96 | 0 | 0 |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
|  Robert L. Salvin | Registered<br> Investment<br> Companies | 4 | 2148.99 | 0 |
|  | Other Pooled<br> Investment Vehicles | 3 | 681.76 | 0 |
|  | Other Accounts | 10 | 6089.74 | 0 |
| **ESG Ultra-Short ETF** | **ESG Ultra-Short ETF** |  |  |  |
|  Andrew C. Benson | Registered<br> Investment<br> Companies | 10 | 16537.33 | 0 |
|  | Other Pooled<br> Investment Vehicles | 10 | 21172.55 | 0 |
|  | Other Accounts | 20 | 8315 | 0 |
|  Joanne M. Driscoll | Registered<br> Investment<br> Companies | 12 | 33393.33 | 0 |
|  | Other Pooled<br> Investment Vehicles | 6 | 3274.64 | 0 |
|  | Other Accounts | 4 | 1190.47 | 0 |
|  Michael J. Lima | Registered<br> Investment<br> Companies | 12 | 33393.33 | 0 |
|  | Other Pooled<br> Investment Vehicles | 5 | 2426.39 | 0 |
|  | Other Accounts | 8 | 6580.31 | 0 |

---

#### Compensation of portfolio managers
The Investment Manager seeks to maintain a compensation program that is competitively positioned to attract, retain and motivate top-quality investment professionals. Portfolio managers receive a base salary, a cash incentive bonus opportunity, an equity compensation opportunity, and a benefits package. Portfolio manager compensation is reviewed annually, and the level of compensation is based on individual performance, the salary range for a portfolio manager's level of responsibility and Franklin

------

Templeton guidelines. Portfolio managers are provided no financial incentive to favor one fund or account over another. Each portfolio manager's compensation consists of the following three elements:

**Base salary** Each portfolio manager is paid a base salary.

**Annual bonus** Annual bonuses are structured to align the interests of the portfolio manager with those of the Fund's shareholders. Each portfolio manager is eligible to receive an annual bonus. Bonuses generally are split between cash (50% to 65%) and restricted shares of Franklin Resources, Inc. ("Resources") stock and mutual fund shares. The deferred equity-based compensation is intended to build a vested interest of the portfolio manager in the financial performance of both Resources and mutual funds advised by the Investment Manager. The bonus plan is intended to provide a competitive level of annual bonus compensation that is tied to the portfolio manager achieving consistently strong investment performance, which aligns the financial incentives of the portfolio manager and Fund shareholders. The Chief Investment Officer of the Investment Manager and/or other officers of the Investment Manager, with responsibility for the Fund, have discretion in the granting of annual bonuses to portfolio managers in accordance with Franklin Templeton guidelines. The following factors are generally used in determining bonuses under the plan:

● *Investment performance.* Primary consideration is given to the historic investment performance over the 1, 3 and 5 preceding years of all accounts managed by the portfolio manager. The pre-tax performance of each fund managed is measured relative to a relevant peer group and/or applicable benchmark as appropriate.

● *Non-investment performance.* The more qualitative contributions of the portfolio manager to the Investment Manager's business and the investment management team, including professional knowledge, productivity, responsiveness to client needs and communication, are evaluated in determining the amount of any bonus award.

● *Responsibilities.* The characteristics and complexity of funds managed by the portfolio manager are factored in the Investment Manager's appraisal.

**Additional long-term equity-based compensation** Portfolio managers may also be awarded restricted shares or units of Resources stock or restricted shares or units of one or more mutual funds. Awards of such deferred equity-based compensation typically vest over time, so as to create incentives to retain key talent.

**Benefits** Portfolio managers also participate in benefit plans and programs available generally to all employees of the Investment Manager.

#### Portfolio managers' securities ownership
The table below identifies ownership of equity securities of the Fund by the portfolio managers responsible for the day-to-day management of the Fund as of April 30, 2025.

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Portfolio Managers | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dollar Range of Ownership of Securities ($)  |
|  **BDC Income ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Michael Petro | $100001-$500000 |
|  **BioRevolution ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; William Rives | $100001-$500000 |
|  **Emerging Markets ex-China ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Brian S. Freiwald |  |

---

------

---

| | |
|:---|:---|
|  **ESG Core Bond ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Andrew C. Benson |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Albert W. Chan |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Tina Chou |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Patrick A. Klein |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Michael V. Salm |  |
|  **ESG High Yield ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Norman P. Boucher | $10001-$50000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Salvin |  |
|  **ESG Ultra-Short ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Andrew C. Benson | $1-$10000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Joanne M. Driscoll |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Michael J. Lima |  |

---

See "Management—Portfolio Transactions—Potential conflicts of interest in managing multiple accounts" in Part II of this SAI for information on how the Investment Manager addresses potential conflicts of interest resulting from an individual's management of more than one account.

#### SECURITIES LENDING ACTIVITIES
The Fund did not participate in any securities lending activities for the fiscal year ended April 30, 2025.

#### FINANCIAL STATEMENTS
The Fund's Form N-CSR for the fiscal year ended April 30, 2025 (https://www.sec.gov/Archives/edgar/data/1845809/000092881625000751/0000928816-25-000751-index.html,

https://www.sec.gov/Archives/edgar/data/1845809/000092881625000749/0000928816-25-000749-index.html,

https://www.sec.gov/Archives/edgar/data/1845809/000092881625000750/0000928816-25-000750-index.html,

https://www.sec.gov/Archives/edgar/data/1845809/000092881625000747/0000928816-25-000747-index.html,

https://www.sec.gov/Archives/edgar/data/1845809/000092881625000756/0000928816-25-000756-index.html,

https://www.sec.gov/Archives/edgar/data/1845809/000092881625000748/0000928816-25-000748-index.html) contains the Fund's audited financial statements, accompanying notes and the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, all of which are incorporated by reference into this SAI. These audited financial statements are available free of charge upon request by calling the Fund at 1-800-225-1581.

------

September 1, 2025

Putnam ETF Trust

---

| | | |
|:---|:---|:---|
| **Fund** | **Symbol** | **Principal U.S. Listing Exchange** |
| &nbsp;&nbsp;&nbsp;Putnam BDC Income ETF ("BDC Income ETF") | PBDC | NYSE Arca, Inc. |
| &nbsp;&nbsp;&nbsp;Putnam BioRevolution™ ETF ("BioRevolution ETF") | SYNB | NYSE Arca, Inc. |
| &nbsp;&nbsp;&nbsp;Putnam Emerging Markets ex-China ETF ("Emerging Markets ex-China ETF") | PEMX | NYSE Arca, Inc. |
| &nbsp;&nbsp;&nbsp;Putnam ESG Core Bond ETF ("ESG Core Bond ETF") | PCRB | NYSE Arca, Inc. |
| &nbsp;&nbsp;&nbsp;Putnam ESG High Yield ETF ("ESG High Yield ETF") | PHYD | NYSE Arca, Inc. |
| &nbsp;&nbsp;&nbsp;Putnam ESG Ultra Short ETF ("ESG Ultra Short ETF") | PULT | NYSE Arca, Inc. |

---

#### STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information ("SAI") is not a prospectus. If the Fund has more than one form of current prospectus, each reference to the prospectus in this SAI includes all of the Fund's prospectuses, unless otherwise noted. The SAI should be read together with the applicable prospectus. The audited financial statements and report of the Fund's independent registered public accounting firm in the Fund's Form N-CSR, for the fiscal year ended April 30, 2025, are incorporated by reference into this SAI, which means that they are part of this SAI for legal purposes.

Part I of this SAI contains specific information about each Fund listed above (references to the "Fund" mean each Fund listed on this cover page, unless otherwise noted). Part II includes information about the Fund and other Putnam mutual funds and exchange-traded funds (collectively, the "Putnam funds").

For a free copy of the Fund's current prospectus, shareholder reports, and/or financial statements, call Putnam Investor Services at 1-800-225-1581, write P.O. Box 219697, Kansas City, MO 64121-9697 or visit www.franklintempleton.com.

1 PETF4-SAI 09/25

------

#### **Table of Contents**

#### PART I

---

| | |
|:---|:---|
|  **[FUND ORGANIZATION AND CLASSIFICATION](#sai870094_1)** | **3** |
|  **[INVESTMENT RESTRICTIONS](#sai870094_2)** | **3** |
|  **[CHARGES AND EXPENSES](#sai870094_3)** | **5** |
|  **[PORTFOLIO MANAGERS](#sai870094_4)** | **19** |
|  **[SECURITIES LENDING ACTIVITIES](#sai870094_5)** | **24** |
|  **[FINANCIAL STATEMENTS](#sai870094_6)** | **24** |

---

#### PART II

---

| | |
|:---|:---|
|  **[BUYING AND SELLING SHARES](#sai870094_7)** | **22** |
|  **[MISCELLANEOUS INVESTMENTS, INVESTMENT PRACTICES AND RISKS](#sai870094_8)** | **29** |
|  **[EXCHANGE TRADED FUNDS RISK](#sai870094_9)** | **79** |
|  **[TAXES](#sai870094_10)** | **80** |
|  **[MANAGEMENT](#sai870094_11)** | **94** |
|  **[DISCLOSURE OF PORTFOLIO INFORMATION](#sai870094_12)** | **112** |
|  **[INFORMATION SECURITY RISKS](#sai870094_13)** | **114** |
|  **[PROXY VOTING GUIDELINES AND PROCEDURES](#sai870094_14)** | **114** |
|  **[SECURITIES RATINGS](#sai870094_15)** | **114** |
|  **[APPENDIX A - PROXY VOTING PROCEDURES OF THE PUTNAM FUNDS](#sai870094_16)** | **119** |

---

------

#### SAI

#### PART I

#### FUND ORGANIZATION AND CLASSIFICATION
Each of ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF is a diversified series of Putnam ETF Trust (the "Trust"). Each of BDC Income ETF, BioRevolution ETF and Emerging Markets ex-China ETF is a non-diversified series of the Trust. The Trust is a Delaware statutory trust organized on December 22, 2020.

The Trust is an open-end management investment company with an unlimited number of authorized shares of beneficial interest. The Trustees may, without shareholder approval, create two or more series of shares representing separate investment portfolios. Any series of shares may be divided without shareholder approval into two or more classes of shares having such preferences and special or relative rights and privileges as the Trustees determine.

Each share has one vote per dollar of net asset value represented by such share.

Shares of all classes vote together as a single class except when otherwise required by law or as determined by the Trustees. The Trustees may take many actions affecting the fund without shareholder approval, including under certain circumstances merging the Fund into another Putnam fund. Shares are freely transferable, are entitled to dividends as declared by the Trustees, and, if the Fund were liquidated, would receive the net assets of the Fund.

The Fund may refuse any order to purchase shares. Although the Fund is not required to hold annual meetings of its shareholders, shareholders holding at least 10% of the outstanding shares entitled to vote have the right to call a meeting to elect or remove Trustees, or to take other actions as provided in the Agreement and Declaration of Trust.

#### Information about the Summary Prospectus, Prospectus, and SAI
The Fund has entered into contractual arrangements with an investment adviser, distributor, transfer 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 Trust's Agreement and Declaration of Trust, any claims asserted by a shareholder against or on behalf of the Trust (or its series), including claims against Trustees and Officers, must be brought in courts of the State of Delaware .

#### INVESTMENT RESTRICTIONS
The Fund has adopted the fundamental investment restrictions below for the protection of shareholders. Fundamental investment restrictions may not be changed without a vote of a majority of the outstanding voting securities. The Investment Company Act of 1940, as amended (the "1940 Act"), provides that a "vote of a majority of the outstanding voting securities" of a fund means the affirmative vote of the lesser of (1) more than 50% of the outstanding fund shares, or (2) 67% or more of the shares present at a meeting if more than 50% of the outstanding fund shares are represented at the meeting in person or by proxy.

#### As fundamental investment restrictions, the Fund may not and will not:
(1) Borrow money in excess of 33 1/3% of the value of its total assets (not including the amount borrowed) at the time the borrowing is made.

(2) Underwrite securities issued by other persons except to the extent that, in connection with the disposition of its portfolio investments, it may be deemed to be an underwriter under certain federal securities laws.

------

(3) Purchase or sell real estate, although it may purchase securities of issuers which deal in real estate, securities which are secured by interests in real estate, and securities representing interests in real estate, and it may acquire and dispose of real estate or interests in real estate acquired through the exercise of its rights as a holder of debt obligations secured by real estate or interests therein.

(4) Purchase or sell commodities or commodity contracts, except as permitted by applicable law and the fund may purchase or sell (a) other instruments backed by commodities and (b) commodities acquired as a result of ownership of securities or other instruments.

(5) Make loans, except by purchase of debt obligations in which the fund may invest consistent with its investment policies (including without limitation debt obligations issued by other Putnam funds), by entering into repurchase agreements, or by lending its portfolio securities.

(6) BDC Income ETF, BioRevolution ETF and Emerging Markets ex-China ETF: With respect to 50% of its total assets, invest in securities of any issuer if, immediately after such investment, more than 5% of the total assets of the fund (taken at current value) would be invested in the securities of such issuer; provided that this limitation does not apply to obligations issued or guaranteed as to interest or principal by the U.S. government or its agencies or instrumentalities or to securities issued by other investment companies.

ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF: With respect to 75% of its total assets, invest in securities of any issuer if, immediately after such investment, more than 5% of the total assets of the fund (taken at current value) would be invested in the securities of such issuer; provided that this limitation does not apply to obligations issued or guaranteed as to interest or principal by the U.S. government or its agencies or instrumentalities or to securities issued by other investment companies.

(7) BDC Income ETF, BioRevolution ETF, and Emerging Markets ex-China ETF: With respect to 50% of its total assets, acquire more than 10% of the outstanding voting securities of any issuer; provided that this limitation does not apply to obligations issued or guaranteed as to interest or principal by the U.S. government or its agencies or instrumentalities or to securities issued by other investment companies.

ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF: With respect to 75% of its total assets, acquire more than 10% of the outstanding voting securities of any issuer; provided that this limitation does not apply to obligations issued or guaranteed as to interest or principal by the U.S. government or its agencies or instrumentalities or to securities issued by other investment companies.

(8) All Funds except BDC Income ETF: Purchase securities (other than securities of the U.S. government, its agencies or instrumentalities) if as a result of such purchase, more than 25% of the fund's total assets would be invested in any one industry.

BDC Income ETF: Invest more than 25% of its total assets in a particular industry or group of industries, except that the Fund will invest more than 25% of its total assets in business development companies ("BDCs"). This limitation is not applicable to investments in obligations issued or guaranteed by the U.S. government, its agencies and instrumentalities or repurchase agreements with respect thereto.

(9) Issue any class of securities which is senior to the fund's shares of beneficial interest, except for permitted borrowings.

------

For purposes of the Fund's fundamental policy on commodities and commodities contracts (#4 above), notwithstanding any federal legislation or regulatory action by the Commodity Futures Trading Commission ("CFTC") that subject swaps to regulation by the CFTC, the Fund will not consider such instruments to be commodities or commodity contracts for purposes of this policy.

BDC Income ETF: For purposes of the Fund's fundamental policies on diversification (#6 and #7 above), the Fund will consider the term "investment companies" to include any issuer that qualifies as a "regulated investment company" under Section 851(a) of the Internal Revenue Code of 1986, as amended, including, without limitation, an issuer that has in effect an election under the Investment Company Act of 1940, as amended, to be treated as a "business development company."

For purposes of the Fund's fundamental policy on industry concentration (#8 above), the Fund's investment manager determines the appropriate industry categories and assigns issuers to them, informed by a variety of considerations, including relevant third party categorization systems. Industry categories and issuer assignments may change over time as industry sectors and issuers evolve. Portfolio allocations shown in shareholder reports and other communications may use broader investment sectors or narrower sub-industry categories.

All percentage limitations on investments will apply at the time of the making of an investment and shall not be considered violated unless an excess or deficiency occurs or exists immediately after and as a result of such investment.

#### The following non-fundamental investment policy may be changed by the Trustees without shareholder approval:
ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF: The Fund will not acquire any securities of registered open-end investment companies or registered unit investment trusts in reliance on Sections 12(d)(1)(F) or (G)of the Investment Company Act of 1940, as amended.

#### CHARGES AND EXPENSES

#### Creation/Redemption Transaction Fees
The following table shows the standard transaction fees for creations and redemptions.

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| | | |
|:---|:---|:---|
| **Fund**<br> **&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** | **&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Standard Creation/Redemption** <br> **Transaction Fee (in kind)** | **&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Standard Creation/Redemption** <br> **Transaction Fee (in cash)**  |
| &nbsp;&nbsp; BDC Income ETF | $250 | $100 |
| &nbsp;&nbsp; BioRevolution ETF | $250 | $100 |
| &nbsp;&nbsp; Emerging Markets ex-China ETF | $250 | $100 |
| &nbsp;&nbsp; ESG Core Bond ETF | $500 | $100 |
| &nbsp;&nbsp; ESG High Yield ETF | $500 | $100 |
| &nbsp;&nbsp; ESG Ultra Short ETF | $500 | $100 |

---

------

#### Management fees: BDC Income ETF, BioRevolution ETF and Emerging Market ex-China ETF
Putnam Investment Management, LLC (the "Investment Manager") serves as the Fund's investment manager. Under the Fund's management agreement with the Investment Manager (the "Management Contract"), the Fund pays an annual all-inclusive management fee to the Investment Manager as shown below. The management fee is based on the Fund's average daily net assets and is calculated and accrued daily. In consideration of the management fee, the Investment Manager pays all expenses incurred by the Fund, or reimburses the Fund for, all of the Fund's organizational and other operating expenses, excluding only: (i) interest and taxes (including, but not limited to, income, excise, transfer and withholding taxes); (ii) expenses of the Fund incurred with respect to the acquisition and disposition of portfolio securities, commodities or other financial instruments and the execution of portfolio transactions, including brokerage commissions; (iii) expenses incurred in connection with any distribution plan adopted by the Fund in compliance with Rule 12b-1 under the 1940 Act, including distribution fees; (iv) expenses of printing and mailing proxy materials to shareholders of the Fund; (v) all other expenses incidental to holding meetings of the Fund's shareholders, including proxy solicitations therefor; (vi) litigation expenses (including, but not limited to, any indemnification obligation, attorneys' fees, expenses, costs, judgments, amounts paid in settlement, fines, penalties, fees of expert witnesses, document production fees, and all other liabilities whatsoever incurred or paid by the Fund or a person indemnified by the Fund); (vii) the fee payable to the Investment Manager hereunder; (viii) any extraordinary expenses (which, for the avoidance of doubt, do not include expenses related to the organization of any subsidiary for a fund or the ongoing corporate expenses of maintaining such subsidiary) and (ix) acquired fund fees and expenses.

Management Fee:

BDC Income ETF: 0.75%

BioRevolution ETF: 0.70%

Emerging Markets ex-China ETF: 0.69%\*

\*Prior to July 1, 2025, Emerging Markets ex-China ETF paid an annual all-inclusive management fee of 0.85% to the Investment Manager based on the Fund's average daily net assets.

#### Management fees: ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF
Franklin Advisers, Inc. (the "Investment Manager") serves as the Fund's investment manager. Under the Fund's management agreement with the Investment Manager (the "Management Contract"), the Fund pays an annual all-inclusive management fee to the Investment Manager as shown below. The management fee is based on the Fund's average daily net assets and is

------

calculated and accrued daily. In consideration of the management fee, the Investment Manager pays all expenses incurred by the Fund, or reimburses the Fund for, all of the Fund's organizational and other operating expenses, excluding only: (i) interest and taxes (including, but not limited to, income, excise, transfer and withholding taxes); (ii) expenses of the Fund incurred with respect to the acquisition and disposition of portfolio securities, commodities or other financial instruments and the execution of portfolio transactions, including brokerage commissions; (iii) expenses incurred in connection with any distribution plan adopted by the Fund in compliance with Rule 12b-1 under the 1940 Act, including distribution fees; (iv) expenses of printing and mailing proxy materials to shareholders of the Fund; (v) all other expenses incidental to holding meetings of the Fund's shareholders, including proxy solicitations therefor; (vi) litigation expenses (including, but not limited to, any indemnification obligation, attorneys' fees, expenses, costs, judgments, amounts paid in settlement, fines, penalties, fees of expert witnesses, document production fees, and all other liabilities whatsoever incurred or paid by the Fund or a person indemnified by the Fund); (vii) the fee payable to the Investment Manager hereunder; (viii) any extraordinary expenses (which, for the avoidance of doubt, do not include expenses related to the organization of any subsidiary for a fund or the ongoing corporate expenses of maintaining such subsidiary) and (ix) acquired fund fees and expenses.

Management Fee:

ESG Core Bond ETF: 0.35%

ESG High Yield ETF: 0.55%

ESG Ultra Short ETF: 0.25%

------

For the past three fiscal years ended April 30, pursuant to the applicable management contract, the Fund incurred the following fees:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Fund name** | **Fiscal year** | **Fiscal year** | **Management** <br>**fee paid** | **Amount of<br> management** <br>**fee waived\*** | **Amount**<br> **management**<br> **fee would have** <br> **been without**<br> **waivers** |
|  BDC Income ETF | 2025 |  | $964087 | $1289 | $965376 |
|  | 2024 |  | $352113 | $382 | $352495 |
|  | 2023 | \*\* | $66336 | $86 | $66422 |
|  BioRevolution ETF | 2025 |  | $37138 | $360 | $37498 |
|  | 2024 |  | $36284 | $420 | $36704 |
|  | 2023 | \*\* | $18638 | $67 | $18705 |
|  Emerging Markets ex-China ETF | 2025 |  | $66498 | $658 | $67156 |
|  | 2024 | \*\*\* | $54028 | $133 | $54161 |
|  ESG Core Bond ETF | 2025 |  | $2233606 | $88755 | $2322361 |
|  | 2024 |  | $1630290 | $33237 | $1663527 |
|  | 2023 | \*\*\*\* | $337530 | $31 | $337561 |
|  ESG High Yield ETF | 2025 |  | $849074 | $28870 | $877944 |
|  | 2024 |  | $584823 | $19690 | $604513 |
|  | 2023 | \*\*\*\* | $131259 | $1596 | $132855 |
|  ESG Ultra Short ETF | 2025 |  | $265059 | $2787 | $267846 |
|  | 2024 |  | $254676 | $564 | $255240 |
|  | 2023 | \*\*\*\* | $67876 | $21 | $67897 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;\* For the fiscal year ended April 30, 2025, April 30, 2024 and April 30, 2023 management fees paid by the Fund were reduced by an amount equal to the management fees paid by affiliated funds in which the Fund invested. 

\*\* For the period September 29, 2022 (commencement of operations) to April 30, 2023.

\*\*\* For the period May 17, 2023 (commencement of operations) to April 30, 2024.

\*\*\*\* For the period January 19, 2023 (commencement of operations) to April 30, 2023.

------

#### Brokerage commissions
For the past three fiscal years ended April 30, the Fund paid the following brokerage commissions:

---

| | | | |
|:---|:---|:---|:---|
| **Fund name** | **Fiscal year** | **Fiscal year** | **Broker commissions** |
|  BDC Income ETF | 2025 |  | $195462 \* |
|  | 2024 |  | $84745 |
|  | 2023 | \*\* | $30734 |
|  BioRevolution ETF | 2025 |  | $574 |
|  | 2024 |  | $1109 |
|  | 2023 | \*\* | $2208 |
|  Emerging Markets ex-China ETF | 2025 |  | $14601 |
|  | 2024 | \*\*\* | $14592 |
|  ESG Core Bond ETF | 2025 |  | $0 |
|  | 2024 |  | $0 |
|  | 2023 | \*\*\*\* | $0 |
|  ESG High Yield ETF | 2025 |  | $0 |
|  | 2024 |  | $414 |
|  | 2023 | \*\*\*\* | $1087 |
|  ESG Ultra Short ETF | 2025 |  | $0 |
|  | 2024 |  | $0 |
|  | 2023 | \*\*\*\* | $0 |

---

\* The increase in brokerage commissions paid between the fiscal years ended April 30, 2024 and April 30, 2025 was due to an increase in assets under management.

\*\* For the period September 29, 2022 (commencement of operations) to April 30, 2023.

\*\*\* For the period May 17, 2023 (commencement of operations) to April 30, 2024.

\*\*\*\* For the period January 19, 2023 (commencement of operations) to April 30, 2023.

------

For the fiscal year ended April 30, 2025, the Fund placed transactions with brokers and dealers through which the Investment Manager and its affiliates receive brokerage or research services as follows:

---

| | | |
|:---|:---|:---|
| **Fund name** | **Dollar Value of these<br>transactions** | **Amount of<br>commissions** |
|  BDC Income ETF | $77135830 | $73867 |
|  BioRevolution ETF | $318517 | $32 |
|  Emerging Markets ex-China ETF | $3289049 | $3718 |

---

For the fiscal year ended April 30, 2025, ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF did not direct any brokerage transactions related to research services and did not pay any brokerage commissions related to research services.

------

As of April 30, 2025, the Fund held the following securities of its regular broker-dealers (or affiliates of such broker-dealers):

---

| | | |
|:---|:---|:---|
| **Fund name** | **Broker-dealer or affiliates** | **Value of securities held** |
|  ESG Core Bond ETF | JPMorgan Chase & Co. | $11049467 |
|  | Bank of America Corp. | $8368722 |
|  | Morgan Stanley | $5511303 |
|  | Goldman Sachs Group, Inc. (The) | $1505874 |
|  ESG Ultra Short ETF | Citigroup, Inc. | $65229 |
|  | Bank of America Corp. | $2261369 |
|  | JPMorgan Chase & Co. | $2108065 |
|  | Wells Fargo & Co. | $624349 |
|  | Mizuho Financial Group | $641274 |
|  | Barclays PLC | $1744241 |
|  | Royal Bank of Canada | $1576661 |
|  | Truist Financial Corp. | $1287618 |

---

As of April 30, 2025, BDC Income ETF, BioRevolution ETF, Emerging Markets ex-China ETF and ESG High Yield ETF did not hold securities of its regular broker-dealers (or affiliates of such broker-dealers).

#### Trustee responsibilities and fees
The Trustees are responsible for generally overseeing the conduct of Fund business. Subject to such policies as the Trustees may determine, the Investment Manager furnishes a continuing investment program for the Fund and makes investment decisions on its behalf. Subject to the control of the Trustees, the Investment Manager also manages the Fund's other affairs and business.

------

The table below shows the value of each Trustee's holdings in the Fund and in all registered investment companies in the Franklin Templeton funds complex overseen by the Trustee as of December 31, 2024.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | | **Dollar Range of Equity Securities in the Fund ($)** | **Dollar Range of Equity Securities in the Fund ($)** | **Dollar Range of Equity Securities in the Fund ($)** | **Dollar Range of Equity Securities in the Fund ($)** | **Dollar Range of Equity Securities in the Fund ($)** | |
| <br>**Trustees**  | **BDC Income**<br>**ETF** | **BioRevolution<br>ETF** | **Emerging<br>Markets<br>ex-China<br>ETF** | **ESG Core<br>Bond ETF** | **ESG High**<br>**Yield ETF** | **ESG Ultra<br>Short ETF** | <br>**Aggregate Dollar Range<br>of Equity Securities in<br>All Registered<br>Investment Companies<br>in the Franklin<br>Templeton Funds<br>Complex Overseen by<br>Trustee ($)** |
|  **Independent Trustees** | **Independent Trustees** | **Independent Trustees** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $50001-$100000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy |  |  |  |  |  |  | $10001-$50000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $1-$10000 | $1-$10000 |  | $1-$10000 | $10001-$50000 | $10001-$50000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
|  **Interested Trustees** | **Interested Trustees** | **Interested Trustees** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust |  |  |  |  |  |  | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds |  |  |  |  |  |  | over $100,000 |

---

------

Each Independent Trustee of the Fund receives an annual retainer fee and an additional fee for each Trustee meeting attended. Independent Trustees also are reimbursed for expenses they incur relating to their services as Trustees. All of the current Independent Trustees of the Fund are Trustees of all the Putnam funds and receive fees for their services.

The Trustees periodically review their fees to ensure that such fees continue to be appropriate in light of their responsibilities as well as in relation to fees paid to trustees of other mutual fund complexes. The Board Policy and Nominating Committee, which consists solely of Independent Trustees of the Fund, estimates that committee and Trustee meeting time, together with the appropriate preparation, requires the equivalent of at least four business days per regular Trustee meeting.

The standing committees of the Board of Trustees, and the number of times each committee met during the fiscal year ended April 30, 2025, are shown in the table below:

---

| | |
|:---|:---|
|  Audit, Compliance and Risk Committee | 13 |
|  Board Policy and Nominating Committee | 6 |
|  Brokerage Committee | 3 |
|  Contract Committee | 8 |
|  Executive Committee | 1 |
|  Investment Oversight Committees |  |
|  Investment Oversight Committee A | 5 |
|  Investment Oversight Committee B | 5 |
|  Pricing Committee | 8 |
|  Exchange-Traded Fund Committee | 4 |

---

Effective July 1 2025, the following changes were made to the standing committees:

● The Brokerage Committee, the Pricing Committee and the Exchange-Traded Fund Committee were eliminated as standing committees.

● The Contract Committee assumed the responsibilities of the Brokerage Committee and the Audit, Compliance and Risk Committee assumed the responsibilities of the Pricing Committee.

● The responsibilities of the Exchange-Traded Fund Committee were assumed by the Investment Oversight Committees and the other standing committees as appropriate based on subject matter.

------

The following table shows the fees paid to each Trustee by the Fund for the fiscal year ended April 30, 2025 and the fees paid to each Trustee by other funds in the Franklin Templeton funds complex for services rendered during the calendar year ended December 31, 2024. Certain Independent Trustees who serve in leadership positions of the Board of Trustees or Board committees receive additional compensation, which is included in the fees shown below.

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| | | | | |
|:---|:---|:---|:---|:---|
| **Trustees** | **Aggregate<br>compensation from<br>the Fund<sup>1</sup>** | **Pension or<br>retirement<br>benefits accrued**<br> **as part of Fund<br>expenses** | **Estimated<br>annual benefits<br>from Franklin**<br> **Templeton**<br> **funds complex**<br> **upon retirement<sup>2</sup>** | **Total<br>compensation<br>from Franklin<br>Templeton funds<br>complex** |
|  **BDC Income ETF** |  |  |  |  |
|  **Independent Trustees**  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $350 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $473 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $350 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $366 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $337 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $350 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $350 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $376 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $362 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $350 | N/A | N/A | $382000 |
|  **Interested Trustees**  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |
|  **BioRevolution ETF** |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $13 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $18 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $13 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $14 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $13 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $13 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $13 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $14 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $14 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $13 | N/A | N/A | $382000 |
|  **Interested Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |
|  **Emerging Markets ex-China ETF** |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $19 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $26 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $19 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $20 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $18 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $19 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $19 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $21 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $20 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $19 | N/A | N/A | $382000 |
|  **Interested Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |

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| | | | | |
|:---|:---|:---|:---|:---|
|  **ESG Core Bond ETF** |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $1706 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $2314 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $1706 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $1768 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $1627 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $1706 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $1706 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $1834 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $1756 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $1706 | N/A | N/A | $382000 |
|  **Interested Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; ESG High Yield ETF |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
|  **Liaquat Ahamed** | **$415** | **N/A** | **N/A** | **$382000** |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $563 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $415 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $431 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $397 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $415 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $415 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $446 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $427 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $415 | N/A | N/A | $382000 |
|  **Interested Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |

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------

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| | | | | |
|:---|:---|:---|:---|:---|
|  **ESG Ultra Short ETF** |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $270 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $366 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $270 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $280 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $258 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $270 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $270 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $290 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $278 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $270 | N/A | N/A | $382000 |
|  **Interested Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |

---

<sup>1</sup> Certain Trustees are also owed compensation deferred pursuant to a Trustee Compensation Deferral Plan. As of April 30, 2025, the total amounts of deferred compensation payable by BDC Income ETF, Biorevolution ETF, Emerging Markets ex-China ETF, ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF, including income earned on such amounts, to these Trustees were: Mr. Ahamed – $14, $2, $2, $177, $40, and $45; Ms. Baumann - $11, $2, $1, $140, $32 and $36; Ms. Domotorffy - $12, $2, $1, $158, $36 and $40; Dr. Hill - $9, $1, $1 $107, $24 and $27; and Ms. Pillai - $5, $1, $1, $62, $14 and $16.

<sup>2</sup> Estimated benefits for each Trustee are based on Trustee fee rates for calendar years 2003, 2004 and 2005.

<sup>3</sup> Mr. Leibler retired from the Board of Trustees effective June 30, 2024.

<sup>4</sup> Mr. McGreevey was appointed to the Board of Trustees on May 17, 2024.

<sup>5</sup> Mr. Reynolds and Ms. Trust are not compensated by the Fund for their service as Trustees because of their affiliation with the Investment Manager.

Under a retirement plan for Trustees of Putnam funds (the "Plan"), each Trustee who retires with at least five years of service as a Trustee of the funds is entitled to receive an annual retirement benefit equal to one-half of the average annual attendance and retainer fees paid to such Trustee for calendar years 2003, 2004 and 2005. This retirement benefit is payable during a Trustee's lifetime, beginning the year following retirement, for the number of years of service through December 31, 2006. A death benefit, also available under the Plan, ensures that the Trustee and his or her beneficiaries will receive benefit payments for the lesser of an aggregate period of (i) ten years, or (ii) such Trustee's total years of service.

The Plan Administrator (currently the Board Policy and Nominating Committee) may terminate or amend the Plan at any time, but no termination or amendment will result in a reduction in the amount of benefits (i) currently being paid to a Trustee at the time of such termination or amendment, or (ii) to which a current Trustee would have been entitled had he or she retired immediately prior to such termination or amendment. The Trustees have terminated the Plan with respect to any Trustee first elected to the Board after 2003.

------

For additional information concerning the Trustees, see "Management" in Part II of this SAI.

#### Share Ownership
Principal Shareholders

Although the Fund does not have information concerning the beneficial ownership of shares held in the names of Depository Trust Company participant brokers ("DTC Participants"), to the best knowledge of the Fund, as of July 31, 2025, the following DTC Participants owned of record 5% or more of the outstanding shares of the Fund.

---

| | | |
|:---|:---|:---|
| **Fund** | **Name and Address** | **Percent of Ownership (%)** |
|  **BDC Income ETF** |  |  |
|  | CHARLES SCHWAB & CO, INC.<br> 211 MAIN ST<br> SAN FRANCISCO CA 94105-1905 | 28.89% |
|  | NATIONAL FINANCIAL SERVICES LLC<br> 499 WASHINGTON BLVD<br> JERSEY CITY, NJ 07310-1995 | 27.93% |
|  | RAYMOND JAMES<br> 880 CARILLON PARKWAY<br> ST. PETERSBURG, FL 33716-110 | 7.25% |
|  | PERSHING LLC<br> 1 PERSHING PLAZA<br> JERSEY CITY, NJ 07399 | 5.74% |
|  | VANGUARD<br> P.O. BOX 1110<br> VALLEY FORGE, PA 19482-1110 | 5.14% |
|  **BioRevolution ETF** |  |  |
|  | J.P. MORGAN SECURITIES LLC/JPMC<br> 20855 STONE OAK PKWY<br> SAN ANTONIO, TX 78258 | 68.95% |
|  | NATIONAL FINANCIAL SERVICES LLC<br> 499 WASHINGTON BLVD<br> JERSEY CITY, NJ 07310-1995 | 17.53% |
|  | CHARLES SCHWAB & CO, INC.<br> 211 MAIN ST<br> SAN FRANCISCO CA 94105-1905 | 5.43% |

---

------

---

| | | |
|:---|:---|:---|
|  **Emerging Markets ex-China ETF** |  |  |
|  | CHARLES SCHWAB & CO, INC.<br> 211 MAIN ST<br> SAN FRANCISCO CA 94105-1905 | 73.71% |
|  | NATIONAL FINANCIAL SERVICES LLC<br> 499 WASHINGTON BLVD<br> JERSEY CITY, NJ 07310-1995 | 13.31% |
|  | GOLDMAN SACHS GROUP, INC.<br> 200 WEST STREET<br> NEW YORK, NY10282 | 5.81% |
|  **ESG Core Bond ETF** |  |  |
|  | J.P. MORGAN SECURITIES LLC4<br> CHASE METROTECH CENTER<br> BROOKLYN, NY 11245-0001 | 99.15% |
|  **ESG High Yield ET** |  |  |
|  | J.P. MORGAN SECURITIES LLC4<br> CHASE METROTECH CENTER<br> BROOKLYN, NY 11245-0001 | 96.44% |
|  **ESG Ultra Short ETF** |  |  |
|  | J.P. MORGAN SECURITIES LLC4<br> CHASE METROTECH CENTER<br> BROOKLYN, NY 11245-0001 | 76.61% |
|  | CHARLES SCHWAB & CO, INC.<br> 211 MAIN ST<br> SAN FRANCISCO CA 94105-1905 | 10.15% |

---

Shareholders who beneficially own 25% or more of the outstanding shares of the Fund or who are otherwise deemed to "control" the Fund may be able to determine or significantly influence the outcome of matters submitted to a vote of the Fund's shareholders.

As of July 31, 2025, the Trustees and officers of the Trust, as a group, owned less than 1% of the outstanding shares of each class of the Fund.

------

#### PORTFOLIO MANAGERS

#### Other Accounts Managed by the Portfolio Managers
The table below identifies the portfolio managers, the number of accounts (other than the Fund) for which the portfolio managers have day-to-day management responsibilities and the total assets in such accounts, within each of the following categories: registered investment companies, other pooled investment vehicles, and other accounts. For each category, the number of accounts and total assets in the accounts where fees are based on performance are also indicated, as applicable. Unless noted otherwise, all information is provided as of April 30, 2025.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Portfolio Manager** | **Type of Account** | **Number of<br>Accounts<br>Managed** | **Total Assets<br>Managed<br>(Millions) ($)** | **Number of Accounts<br>Managed for which<br>Advisory Fee is<br>Performance-Based** | **Assets Managed for<br>which Advisory<br>Fee is<br>Performance-Based<br>(Millions) ($)** |
|  **BDC Income ETF** | **BDC Income ETF** |  |  |  |  |
|  Michael Petro | Registered<br> Investment<br> Companies | 2 | 337 | 0 | 0 |
|  | Other Pooled<br> Investment Vehicles | 2 | .6 | 0 | 0 |
|  | Other Accounts | 0 | 0 | 0 | 0 |
|  **BioRevolution ETF** | **BioRevolution ETF** |  |  |  |  |
|  William Rives | Registered<br> Investment<br> Companies | 2 | 638.25 | 0 | 0 |
|  | Other Pooled<br> Investment Vehicles | 0 | 0 | 0 | 0 |
|  | Other Accounts | 0 | 0 | 0 | 0 |
|  **Emerging Markets ex-China ETF** | **Emerging Markets ex-China ETF** |  |  |  |  |
|  Brian S. Freiwald | Registered<br> Investment<br> Companies | 2 | 441.5 | 1 | 418.4 |
|  | Other Pooled<br> Investment Vehicles | 2 | 16.88 | 0 | 0 |
|  | Other Accounts | 4 | 1028.7 | 0 | 0 |

---

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  **ESG Core Bond ETF** | **ESG Core Bond ETF** |  |  |  |  |
|  Andrew C. Benson | Registered<br> Investment<br> Companies | 10 | 15972 | 0 | 0 |
|  | Other Pooled<br> Investment Vehicles | 10 | 21172.55 | 0 | 0 |
|  | Other Accounts | 20 | 8315 | 0 | 0 |
|  Albert W. Chan | Registered<br> Investment<br> Companies | 9 | 9457.2 | 0 | 0 |
|  | Other Pooled<br> Investment Vehicles | 8 | 1922.66 | 0 | 0 |
|  | Other Accounts | 42 | 3026.63 | 1 | 447.7 |
|  Tina Chou | Registered<br> Investment<br> Companies | 8 | 10522 | 0 | 0 |
|  | Other Pooled<br> Investment Vehicles | 2 | 415.66 | 0 | 0 |
|  | Other Accounts | 0 | 0 | 0 | 0 |
|  Patrick A. Klein | Registered<br> Investment<br> Companies | 20 | 21445.71 | 0 | 0 |
|  | Other Pooled<br> Investment Vehicles | 10 | 2649.75 | 0 | 0 |
|  | Other Accounts | 15 | 6483.24 | 2 | 1723.53 |
|  Michael V. Salm | Registered<br> Investment<br> Companies | 24 | 30742.36 | 0 | 0 |
|  | Other Pooled<br> Investment Vehicles | 26 | 22654.31 | 1 | 12.4 |
|  | Other Accounts | 22 | 8455 | 3 | 4029.78 |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| **ESG High Yield ETF** | **ESG High Yield ETF** |  |  |  |
|  Norman P. Boucher  | Registered<br> Investment<br> Companies | 3 | 1664.99 | 0 |
|  | Other Pooled<br> Investment Vehicles | 4 | 681.76 | 0 |
|  | Other Accounts | 5 | 647.96 | 0 |
|  Robert L. Salvin  | Registered<br> Investment<br> Companies | 4 | 2148.99 | 0 |
|  | Other Pooled<br> Investment Vehicles | 3 | 681.76 | 0 |
|  | Other Accounts | 10 | 6089.74 | 0 |
| **ESG Ultra-Short ETF** | **ESG Ultra-Short ETF** |  |  |  |
|  Andrew C. Benson | Registered<br> Investment<br> Companies | 10 | 16537.33 | 0 |
|  | Other Pooled<br> Investment Vehicles | 10 | 21172.55 | 0 |
|  | Other Accounts | 20 | 8315 | 0 |
|  Joanne M. Driscoll | Registered<br> Investment<br> Companies | 12 | 33393.33 | 0 |
|  | Other Pooled<br> Investment Vehicles | 6 | 3274.64 | 0 |
|  | Other Accounts | 4 | 1190.47 | 0 |
|  Michael J. Lima | Registered<br> Investment<br> Companies | 12 | 33393.33 | 0 |
|  | Other Pooled<br> Investment Vehicles | 5 | 2426.39 | 0 |
|  | Other Accounts | 8 | 6580.31 | 0 |

---

------

#### Compensation of portfolio managers
The Investment Manager seeks to maintain a compensation program that is competitively positioned to attract, retain and motivate top-quality investment professionals. Portfolio managers receive a base salary, a cash incentive bonus opportunity, an equity compensation opportunity, and a benefits package. Portfolio manager compensation is reviewed annually, and the level of compensation is based on individual performance, the salary range for a portfolio manager's level of responsibility and Franklin Templeton guidelines. Portfolio managers are provided no financial incentive to favor one fund or account over another. Each portfolio manager's compensation consists of the following three elements:

**Base salary** Each portfolio manager is paid a base salary.

**Annual bonus** Annual bonuses are structured to align the interests of the portfolio manager with those of the Fund's shareholders. Each portfolio manager is eligible to receive an annual bonus. Bonuses generally are split between cash (50% to 65%) and restricted shares of Franklin Resources, Inc. ("Resources") stock and mutual fund shares. The deferred equity-based compensation is intended to build a vested interest of the portfolio manager in the financial performance of both Resources and mutual funds advised by the Investment Manager. The bonus plan is intended to provide a competitive level of annual bonus compensation that is tied to the portfolio manager achieving consistently strong investment performance, which aligns the financial incentives of the portfolio manager and Fund shareholders. The Chief Investment Officer of the Investment Manager and/or other officers of the Investment Manager, with responsibility for the Fund, have discretion in the granting of annual bonuses to portfolio managers in accordance with Franklin Templeton guidelines. The following factors are generally used in determining bonuses under the plan:

● *Investment performance.* Primary consideration is given to the historic investment performance over the 1, 3 and 5 preceding years of all accounts managed by the portfolio manager. The pre-tax performance of each fund managed is measured relative to a relevant peer group and/or applicable benchmark as appropriate.

● *Non-investment performance.* The more qualitative contributions of the portfolio manager to the Investment Manager's business and the investment management team, including professional knowledge, productivity, responsiveness to client needs and communication, are evaluated in determining the amount of any bonus award.

● *Responsibilities.* The characteristics and complexity of funds managed by the portfolio manager are factored in the Investment Manager's appraisal.

**Additional long-term equity-based compensation** Portfolio managers may also be awarded restricted shares or units of Resources stock or restricted shares or units of one or more mutual funds. Awards of such deferred equity-based compensation typically vest over time, so as to create incentives to retain key talent.

------

**Benefits** Portfolio managers also participate in benefit plans and programs available generally to all employees of the Investment Manager.

#### Portfolio managers' securities ownership
The table below identifies ownership of equity securities of the Fund by the portfolio managers responsible for the day-to-day management of the Fund as of April 30, 2025.

---

| | |
|:---|:---|
| Portfolio Managers | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dollar Range of Ownership of Securities ($) |
|  **BDC Income ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Michael Petro | $100001-$500000 |
|  **BioRevolution ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; William Rives | $100001-$500000 |
|  **Emerging Markets ex-China ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Brian S. Freiwald |  |

---

------

---

| | |
|:---|:---|
|  **ESG Core Bond ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Andrew C. Benson |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Albert W. Chan |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Tina Chou |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Patrick A. Klein |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Michael V. Salm |  |
|  **ESG High Yield ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Norman P. Boucher | $10001-$50000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Salvin |  |
|  **ESG Ultra-Short ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Andrew C. Benson | $1-$10000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Joanne M. Driscoll |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Michael J. Lima |  |

---

See "Management—Portfolio Transactions—Potential conflicts of interest in managing multiple accounts" in Part II of this SAI for information on how the Investment Manager addresses potential conflicts of interest resulting from an individual's management of more than one account.

#### SECURITIES LENDING ACTIVITIES
The Fund did not participate in any securities lending activities for the fiscal year ended April 30, 2025.

#### FINANCIAL STATEMENTS
The Fund's Form N-CSR for the fiscal year ended April 30, 2025

(https://www.sec.gov/Archives/edgar/data/1845809/000092881625000751/0000928816-25-000751-index.html,

https://www.sec.gov/Archives/edgar/data/1845809/000092881625000749/0000928816-25-000749-index.html,

https://www.sec.gov/Archives/edgar/data/1845809/000092881625000750/0000928816-25-000750-index.html,

https://www.sec.gov/Archives/edgar/data/1845809/000092881625000747/0000928816-25-000747-index.html,

https://www.sec.gov/Archives/edgar/data/1845809/000092881625000756/0000928816-25-000756-index.html,

https://www.sec.gov/Archives/edgar/data/1845809/000092881625000748/0000928816-25-000748-index.html) contains the Fund's audited financial statements, accompanying notes and the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, all of which are incorporated by reference into this SAI. These audited financial statements are available free of charge upon request by calling the Fund at 1-800-225-1581.

------

September 1, 2025

Putnam ETF Trust

---

| | | |
|:---|:---|:---|
| **Fund** | **Symbol** | **Principal U.S. Listing Exchange** |
| &nbsp;&nbsp;&nbsp;Putnam BDC Income ETF ("BDC Income ETF") | PBDC | NYSE Arca, Inc. |
| &nbsp;&nbsp;&nbsp;Putnam BioRevolution™ ETF ("BioRevolution ETF") | SYNB | NYSE Arca, Inc. |
| &nbsp;&nbsp;&nbsp;Putnam Emerging Markets ex-China ETF ("Emerging Markets ex-China ETF") | PEMX | NYSE Arca, Inc. |
| &nbsp;&nbsp;&nbsp;Putnam ESG Core Bond ETF ("ESG Core Bond ETF") | PCRB | NYSE Arca, Inc. |
| &nbsp;&nbsp;&nbsp;Putnam ESG High Yield ETF ("ESG High Yield ETF") | PHYD | NYSE Arca, Inc. |
| &nbsp;&nbsp;&nbsp;Putnam ESG Ultra Short ETF ("ESG Ultra Short ETF") | PULT | NYSE Arca, Inc. |

---

STATEMENT OF ADDITIONAL INFORMATION

This Statement of Additional Information ("SAI") is not a prospectus. If the Fund has more than one form of current prospectus, each reference to the prospectus in this SAI includes all of the Fund's prospectuses, unless otherwise noted. The SAI should be read together with the applicable prospectus. The audited financial statements and report of the Fund's independent registered public accounting firm in the Fund's Form N-CSR, for the fiscal year ended April 30, 2025, are incorporated by reference into this SAI, which means that they are part of this SAI for legal purposes.

Part I of this SAI contains specific information about each Fund listed above (references to the "Fund" mean each Fund listed on this cover page, unless otherwise noted). Part II includes information about the Fund and other Putnam mutual funds and exchange-traded funds (collectively, the "Putnam funds").

For a free copy of the Fund's current prospectus, shareholder reports, and/or financial statements, call Putnam Investor Services at 1-800-225-1581, write P.O. Box 219697, Kansas City, MO 64121-9697 or visit www.franklintempleton.com.

1 PETF4-SAI 09/25

------

#### **Table of Contents**

---

| | |
|:---|:---|
|  **[PART I](#sai60370_1)** |  |
|  **[FUND ORGANIZATION AND CLASSIFICATION](#sai60370_2)** | **3** |
|  **[INVESTMENT RESTRICTIONS](#sai60370_3)** | **3** |
|  **[CHARGES AND EXPENSES](#sai60370_4)** | **5** |
|  **[PORTFOLIO MANAGERS](#sai60370_5)** | **16** |
|  **[SECURITIES LENDING ACTIVITIES](#sai60370_6)** | **22** |
|  **[FINANCIAL STATEMENTS](#sai60370_7)** | **22** |
|  **[PART II](#sai60370_8)** |  |
|  **[BUYING AND SELLING SHARES](#sai60370_9)** | **22** |
|  **[MISCELLANEOUS INVESTMENTS, INVESTMENT PRACTICES AND RISKS](#sai60370_10)** | **29** |
|  **[EXCHANGE TRADED FUNDS RISK](#sai60370_11)** | **79** |
|  **[TAXES](#sai60370_12)** | **80** |
|  **[MANAGEMENT](#sai60370_13)** | **94** |
|  **[DISCLOSURE OF PORTFOLIO INFORMATION](#sai60370_14)** | **112** |
|  **[INFORMATION SECURITY RISKS](#sai60370_15)** | **114** |
|  **[PROXY VOTING GUIDELINES AND PROCEDURES](#sai60370_16)** | **114** |
|  **[SECURITIES RATINGS](#sai60370_17)** | **114** |
|  **[APPENDIX A - PROXY VOTING PROCEDURES OF THE PUTNAM FUNDS](#sai60370_18)** | **119** |

---

------

#### SAI

#### PART I

#### FUND ORGANIZATION AND CLASSIFICATION
Each of ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF is a diversified series of Putnam ETF Trust (the "Trust"). Each of BDC Income ETF, BioRevolution ETF and Emerging Markets ex-China ETF is a non-diversified series of the Trust. The Trust is a Delaware statutory trust organized on December 22, 2020.

The Trust is an open-end management investment company with an unlimited number of authorized shares of beneficial interest. The Trustees may, without shareholder approval, create two or more series of shares representing separate investment portfolios. Any series of shares may be divided without shareholder approval into two or more classes of shares having such preferences and special or relative rights and privileges as the Trustees determine.

Each share has one vote per dollar of net asset value represented by such share.

Shares of all classes vote together as a single class except when otherwise required by law or as determined by the Trustees. The Trustees may take many actions affecting the fund without shareholder approval, including under certain circumstances merging the Fund into another Putnam fund. Shares are freely transferable, are entitled to dividends as declared by the Trustees, and, if the Fund were liquidated, would receive the net assets of the Fund.

The Fund may refuse any order to purchase shares. Although the Fund is not required to hold annual meetings of its shareholders, shareholders holding at least 10% of the outstanding shares entitled to vote have the right to call a meeting to elect or remove Trustees, or to take other actions as provided in the Agreement and Declaration of Trust.

#### Information about the Summary Prospectus, Prospectus, and SAI
The Fund has entered into contractual arrangements with an investment adviser, distributor, transfer 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 Trust's Agreement and Declaration of Trust, any claims asserted by a shareholder against or on behalf of the Trust (or its series), including claims against Trustees and Officers, must be brought in courts of the State of Delaware.

#### INVESTMENT RESTRICTIONS
The Fund has adopted the fundamental investment restrictions below for the protection of shareholders. Fundamental investment restrictions may not be changed without a vote of a majority of the outstanding voting securities. The Investment Company Act of 1940, as amended (the "1940 Act"), provides that a "vote of a majority of the outstanding voting securities" of a fund means the affirmative vote of the lesser of (1) more than 50% of the outstanding fund shares, or (2) 67% or more of the shares present at a meeting if more than 50% of the outstanding fund shares are represented at the meeting in person or by proxy.

#### As fundamental investment restrictions, the Fund may not and will not:
(1) Borrow money in excess of 33 1/3% of the value of its total assets (not including the amount borrowed) at the time the borrowing is made.

(2) Underwrite securities issued by other persons except to the extent that, in connection with the disposition of its portfolio investments, it may be deemed to be an underwriter under certain federal securities laws.

(3) Purchase or sell real estate, although it may purchase securities of issuers which deal in real estate, securities which are secured by interests in real

------

estate, and securities representing interests in real estate, and it may acquire and dispose of real estate or interests in real estate acquired through the exercise of its rights as a holder of debt obligations secured by real estate or interests therein.

(4) Purchase or sell commodities or commodity contracts, except as permitted by applicable law and the fund may purchase or sell (a) other instruments backed by commodities and (b) commodities acquired as a result of ownership of securities or other instruments.

(5) Make loans, except by purchase of debt obligations in which the fund may invest consistent with its investment policies (including without limitation debt obligations issued by other Putnam funds), by entering into repurchase agreements, or by lending its portfolio securities.

(6) BDC Income ETF, BioRevolution ETF and Emerging Markets ex-China ETF: With respect to 50% of its total assets, invest in securities of any issuer if, immediately after such investment, more than 5% of the total assets of the fund (taken at current value) would be invested in the securities of such issuer; provided that this limitation does not apply to obligations issued or guaranteed as to interest or principal by the U.S. government or its agencies or instrumentalities or to securities issued by other investment companies.

ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF: With respect to 75% of its total assets, invest in securities of any issuer if, immediately after such investment, more than 5% of the total assets of the fund (taken at current value) would be invested in the securities of such issuer; provided that this limitation does not apply to obligations issued or guaranteed as to interest or principal by the U.S. government or its agencies or instrumentalities or to securities issued by other investment companies.

(7) BDC Income ETF, BioRevolution ETF, and Emerging Markets ex-China ETF: With respect to 50% of its total assets, acquire more than 10% of the outstanding voting securities of any issuer; provided that this limitation does not apply to obligations issued or guaranteed as to interest or principal by the U.S. government or its agencies or instrumentalities or to securities issued by other investment companies.

ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF: With respect to 75% of its total assets, acquire more than 10% of the outstanding voting securities of any issuer; provided that this limitation does not apply to obligations issued or guaranteed as to interest or principal by the U.S. government or its agencies or instrumentalities or to securities issued by other investment companies.

(8) All Funds except BDC Income ETF: Purchase securities (other than securities of the U.S. government, its agencies or instrumentalities) if as a result of such purchase, more than 25% of the fund's total assets would be invested in any one industry.

BDC Income ETF: Invest more than 25% of its total assets in a particular industry or group of industries, except that the Fund will invest more than 25% of its total assets in business development companies ("BDCs"). This limitation is not applicable to investments in obligations issued or guaranteed by the U.S. government, its agencies and instrumentalities or repurchase agreements with respect thereto.

(9) Issue any class of securities which is senior to the fund's shares of beneficial interest, except for permitted borrowings.

For purposes of the Fund's fundamental policy on commodities and commodities contracts (#4 above), notwithstanding any federal legislation or regulatory action by the Commodity Futures Trading Commission ("CFTC") that subject swaps to regulation by the CFTC, the Fund will not consider such instruments to be commodities or commodity contracts for purposes of this policy.

BDC Income ETF: For purposes of the Fund's fundamental policies on diversification (#6 and #7 above), the Fund will consider the term "investment companies" to include any issuer that qualifies as a "regulated investment company" under Section 851(a)

------

of the Internal Revenue Code of 1986, as amended, including, without limitation, an issuer that has in effect an election under the Investment Company Act of 1940, as amended, to be treated as a "business development company."

For purposes of the Fund's fundamental policy on industry concentration (#8 above), the Fund's investment manager determines the appropriate industry categories and assigns issuers to them, informed by a variety of considerations, including relevant third party categorization systems. Industry categories and issuer assignments may change over time as industry sectors and issuers evolve. Portfolio allocations shown in shareholder reports and other communications may use broader investment sectors or narrower sub-industry categories.

All percentage limitations on investments will apply at the time of the making of an investment and shall not be considered violated unless an excess or deficiency occurs or exists immediately after and as a result of such investment.

#### The following non-fundamental investment policy may be changed by the Trustees without shareholder approval:
ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF: The Fund will not acquire any securities of registered open-end investment companies or registered unit investment trusts in reliance on Sections 12(d)(1)(F) or (G)of the Investment Company Act of 1940, as amended.

#### CHARGES AND EXPENSES

#### Creation/Redemption Transaction Fees
The following table shows the standard transaction fees for creations and redemptions.

---

| | | |
|:---|:---|:---|
| **Fund**<br> **&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** | **&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Standard Creation/Redemption** <br> **Transaction Fee (in kind)** | **&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Standard Creation/Redemption** <br> **Transaction Fee (in cash)** |
| &nbsp;&nbsp; BDC Income ETF | $250 | $100 |
| &nbsp;&nbsp; BioRevolution ETF | $250 | $100 |
| &nbsp;&nbsp; Emerging Markets ex-China ETF | $250 | $100 |
| &nbsp;&nbsp; ESG Core Bond ETF | $500 | $100 |
| &nbsp;&nbsp; ESG High Yield ETF | $500 | $100 |
| &nbsp;&nbsp; ESG Ultra Short ETF | $500 | $100 |

---

#### Management fees: BDC Income ETF, BioRevolution ETF and Emerging Market ex-China ETF
Putnam Investment Management, LLC (the "Investment Manager") serves as the Fund's investment manager. Under the Fund's management agreement with the Investment Manager (the "Management Contract"), the Fund pays an annual all-inclusive management fee to the Investment Manager as shown below. The management fee is based on the Fund's average daily net assets and is calculated and accrued daily. In consideration of the management fee, the Investment Manager pays all expenses incurred by the Fund, or reimburses the Fund for, all of the Fund's organizational and other operating expenses, excluding only: (i) interest and taxes (including, but not limited to, income, excise, transfer and withholding taxes); (ii) expenses of the Fund incurred with respect to the acquisition and disposition of portfolio securities, commodities or other financial instruments and the execution of portfolio transactions, including brokerage commissions; (iii) expenses incurred in connection with any distribution plan adopted by the Fund in compliance with Rule 12b-1 under the 1940 Act, including distribution fees; (iv) expenses of printing and mailing proxy materials to shareholders of the Fund; (v) all other expenses incidental to holding meetings of the Fund's shareholders, including proxy solicitations therefor; (vi) litigation expenses (including, but not limited to, any indemnification obligation, attorneys' fees, expenses, costs, judgments, amounts paid in settlement, fines, penalties, fees of expert witnesses, document production fees, and all other liabilities whatsoever incurred or paid by the Fund or a person indemnified by the Fund); (vii) the fee payable to the Investment Manager hereunder; (viii) any extraordinary expenses (which, for the avoidance of doubt, do not include expenses related to the organization of any subsidiary for a fund or the ongoing corporate expenses of maintaining such subsidiary) and (ix) acquired fund fees and expenses.

Management Fee:

BDC Income ETF: 0.75%

------

BioRevolution ETF: 0.70%

Emerging Markets ex-China ETF: 0.69%\*

\*Prior to July 1, 2025, Emerging Markets ex-China ETF paid an annual all-inclusive management fee of 0.85% to the Investment Manager based on the Fund's average daily net assets.

#### Management fees: ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF
Franklin Advisers, Inc. (the "Investment Manager") serves as the Fund's investment manager. Under the Fund's management agreement with the Investment Manager (the "Management Contract"), the Fund pays an annual all-inclusive management fee to the Investment Manager as shown below. The management fee is based on the Fund's average daily net assets and is calculated and accrued daily. In consideration of the management fee, the Investment Manager pays all expenses incurred by the Fund, or reimburses the Fund for, all of the Fund's organizational and other operating expenses, excluding only: (i) interest and taxes (including, but not limited to, income, excise, transfer and withholding taxes); (ii) expenses of the Fund incurred with respect to the acquisition and disposition of portfolio securities, commodities or other financial instruments and the execution of portfolio transactions, including brokerage commissions; (iii) expenses incurred in connection with any distribution plan adopted by the Fund in compliance with Rule 12b-1 under the 1940 Act, including distribution fees; (iv) expenses of printing and mailing proxy materials to shareholders of the Fund; (v) all other expenses incidental to holding meetings of the Fund's shareholders, including proxy solicitations therefor; (vi) litigation expenses (including, but not limited to, any indemnification obligation, attorneys' fees, expenses, costs, judgments, amounts paid in settlement, fines, penalties, fees of expert witnesses, document production fees, and all other liabilities whatsoever incurred or paid by the Fund or a person indemnified by the Fund); (vii) the fee payable to the Investment Manager hereunder; (viii) any extraordinary expenses (which, for the avoidance of doubt, do not include expenses related to the organization of any subsidiary for a fund or the ongoing corporate expenses of maintaining such subsidiary) and (ix) acquired fund fees and expenses.

Management Fee:

ESG Core Bond ETF: 0.35%

ESG High Yield ETF: 0.55%

ESG Ultra Short ETF: 0.25%

------

For the past three fiscal years ended April 30, pursuant to the applicable management contract, the Fund incurred the following fees:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Fund name** | **Fiscal year** | **Fiscal year** | **Management fee** <br>**paid** | **Amount of**<br> **management fee** <br>**waived\*** | **Amount management**<br> **fee would have been <br>without waivers** |
|  BDC Income ETF | 2025 |  | $964087 | $1289 | $965376 |
|  | 2024 |  | $352113 | $382 | $352495 |
|  | 2023 | \*\* | $66336 | $86 | $66422 |
|  BioRevolution ETF | 2025 |  | $37138 | $360 | $37498 |
|  | 2024 |  | $36284 | $420 | $36704 |
|  | 2023 | \*\* | $18638 | $67 | $18705 |
|  Emerging Markets ex-China ETF | 2025 |  | $66498 | $658 | $67156 |
|  | 2024 | \*\*\* | $54028 | $133 | $54161 |
|  ESG Core Bond ETF | 2025 |  | $2233606 | $88755 | $2322361 |
|  | 2024 |  | $1630290 | $33237 | $1663527 |
|  | 2023 | \*\*\*\* | $337530 | $31 | $337561 |
|  ESG High Yield ETF | 2025 |  | $849074 | $28870 | $877944 |
|  | 2024 |  | $584823 | $19690 | $604513 |
|  | 2023 | \*\*\*\* | $131259 | $1596 | $132855 |
|  ESG Ultra Short ETF | 2025 |  | $265059 | $2787 | $267846 |
|  | 2024 |  | $254676 | $564 | $255240 |
|  | 2023 | \*\*\*\* | $67876 | $21 | $67897 |

---

&nbsp;&nbsp;&nbsp;&nbsp;\* For the fiscal year ended April 30, 2025, April 30, 2024 and April 30, 2023 management fees paid by the Fund were reduced by an amount equal to the management fees paid by affiliated funds in which the Fund invested. 

\*\* For the period September 29, 2022 (commencement of operations) to April 30, 2023.

\*\*\* For the period May 17, 2023 (commencement of operations) to April 30, 2024.

\*\*\*\* For the period January 19, 2023 (commencement of operations) to April 30, 2023.

------

#### Brokerage commissions
For the past three fiscal years ended April 30, the Fund paid the following brokerage commissions:

---

| | | | |
|:---|:---|:---|:---|
| **Fund name** | **Fiscal year** | **Fiscal year** | **Broker commissions** |
|  BDC Income ETF | 2025 |  | $195462 \* |
|  | 2024 |  | $84745 |
|  | 2023 | \*\* | $30734 |
|  BioRevolution ETF | 2025 |  | $574 |
|  | 2024 |  | $1109 |
|  | 2023 | \*\* | $2208 |
|  Emerging Markets ex-China ETF | 2025 |  | $14601 |
|  | 2024 | \*\*\* | $14592 |
|  ESG Core Bond ETF | 2025 |  | $0 |
|  | 2024 |  | $0 |
|  | 2023 | \*\*\*\* | $0 |
|  ESG High Yield ETF | 2025 |  | $0 |
|  | 2024 |  | $414 |
|  | 2023 | \*\*\*\* | $1087 |
|  ESG Ultra Short ETF | 2025 |  | $0 |
|  | 2024 |  | $0 |
|  | 2023 | \*\*\*\* | $0 |

---

\* The increase in brokerage commissions paid between the fiscal years ended April 30, 2024 and April 30, 2025 was due to an increase in assets under management.

\*\* For the period September 29, 2022 (commencement of operations) to April 30, 2023.

\*\*\* For the period May 17, 2023 (commencement of operations) to April 30, 2024.

\*\*\*\* For the period January 19, 2023 (commencement of operations) to April 30, 2023.

For the fiscal year ended April 30, 2025, the Fund placed transactions with brokers and dealers through which the Investment Manager and its affiliates receive brokerage or research services as follows:

---

| | | |
|:---|:---|:---|
| **Fund name** | **Dollar Value of these<br>transactions** | **Amount of<br>commissions** |
|  BDC Income ETF | $77135830 | $73867 |
|  BioRevolution ETF | $318517 | $32 |
|  Emerging Markets ex-China ETF | $3289049 | $3718 |

---

For the fiscal year ended April 30, 2025, ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF did not direct any brokerage transactions related to research services and did not pay any brokerage commissions related to research services.

------

As of April 30, 2025, the Fund held the following securities of its regular broker-dealers (or affiliates of such broker-dealers):

---

| | | |
|:---|:---|:---|
| **Fund name** | **Broker-dealer or affiliates** | **Value of securities held** |
|  ESG Core Bond ETF | JPMorgan Chase & Co. | $11049467 |
|  | Bank of America Corp. | $8368722 |
|  | Morgan Stanley | $5511303 |
|  | Goldman Sachs Group, Inc. (The) | $1505874 |
|  ESG Ultra Short ETF | Citigroup, Inc. | $65229 |
|  | Bank of America Corp. | $2261369 |
|  | JPMorgan Chase & Co. | $2108065 |
|  | Wells Fargo & Co. | $624349 |
|  | Mizuho Financial Group | $641274 |
|  | Barclays PLC | $1744241 |
|  | Royal Bank of Canada | $1576661 |
|  | Truist Financial Corp. | $1287618 |

---

As of April 30, 2025, BDC Income ETF, BioRevolution ETF, Emerging Markets ex-China ETF and ESG High Yield ETF did not hold securities of its regular broker-dealers (or affiliates of such broker-dealers).

#### Trustee responsibilities and fees
The Trustees are responsible for generally overseeing the conduct of Fund business. Subject to such policies as the Trustees may determine, the Investment Manager furnishes a continuing investment program for the Fund and makes investment decisions on its behalf. Subject to the control of the Trustees, the Investment Manager also manages the Fund's other affairs and business.

------

The table below shows the value of each Trustee's holdings in the Fund and in all registered investment companies in the Franklin Templeton funds complex overseen by the Trustee as of December 31, 2024.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | | **Dollar Range of Equity Securities in the Fund ($)** | **Dollar Range of Equity Securities in the Fund ($)** | **Dollar Range of Equity Securities in the Fund ($)** | **Dollar Range of Equity Securities in the Fund ($)** | **Dollar Range of Equity Securities in the Fund ($)** | |
| <br>**Trustees**  | <br>**BDC Income**<br>**ETF** | **BioRevolution<br>ETF** | **Emerging<br>Markets<br>ex-China<br>ETF** | **ESG Core<br>Bond ETF** | **ESG High<br>Yield ETF** | **ESG Ultra<br>Short ETF** | <br>**Aggregate Dollar Range**<br>**of Equity Securities in**<br>**All Registered<br>Investment Companies<br>in the Franklin**<br>**Templeton Funds**<br>**Complex Overseen by<br>Trustee ($)** |
|  **Independent Trustees** | **Independent Trustees** | **Independent Trustees** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $50001-$100000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy |  |  |  |  |  |  | $10001-$50000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $1-$10000 | $1-$10000 |  | $1-$10000 | $10001-$50000 | $10001-$50000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $1-$10000 | $1-$10000 |  | $1-$10000 | $1-$10000 | $1-$10000 | over $100,000 |
|  **Interested Trustees** | **Interested Trustees** | **Interested Trustees** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust |  |  |  |  |  |  | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds |  |  |  |  |  |  | over $100,000 |

---

Each Independent Trustee of the Fund receives an annual retainer fee and an additional fee for each Trustee meeting attended. Independent Trustees also are reimbursed for expenses they incur relating to their services as Trustees. All of the current Independent Trustees of the Fund are Trustees of all the Putnam funds and receive fees for their services.

The Trustees periodically review their fees to ensure that such fees continue to be appropriate in light of their responsibilities as well as in relation to fees paid to trustees of other mutual fund complexes. The Board Policy and Nominating Committee, which consists solely of Independent Trustees of the Fund, estimates that committee and Trustee meeting time, together with the appropriate preparation, requires the equivalent of at least four business days per regular Trustee meeting.

------

The standing committees of the Board of Trustees, and the number of times each committee met during the fiscal year ended April 30, 2025, are shown in the table below:

---

| | |
|:---|:---|
|  Audit, Compliance and Risk Committee | 13 |
|  Board Policy and Nominating Committee | 6 |
|  Brokerage Committee | 3 |
|  Contract Committee | 8 |
|  Executive Committee | 1 |
|  Investment Oversight Committees |  |
|  Investment Oversight Committee A | 5 |
|  Investment Oversight Committee B | 5 |
|  Pricing Committee | 8 |
|  Exchange-Traded Fund Committee | 4 |

---

Effective July 1 2025, the following changes were made to the standing committees:

● The Brokerage Committee, the Pricing Committee and the Exchange-Traded Fund Committee were eliminated as standing committees.

● The Contract Committee assumed the responsibilities of the Brokerage Committee and the Audit, Compliance and Risk Committee assumed the responsibilities of the Pricing Committee.

● The responsibilities of the Exchange-Traded Fund Committee were assumed by the Investment Oversight Committees and the other standing committees as appropriate based on subject matter.

------

The following table shows the fees paid to each Trustee by the Fund for the fiscal year ended April 30, 2025 and the fees paid to each Trustee by other funds in the Franklin Templeton funds complex for services rendered during the calendar year ended December 31, 2024. Certain Independent Trustees who serve in leadership positions of the Board of Trustees or Board committees receive additional compensation, which is included in the fees shown below.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Trustees** | **Aggregate<br>compensation from<br>the Fund<sup>1</sup>** | **Pension or<br>retirement<br>benefits accrued<br>as part of Fund<br>expenses** | **Estimated<br>annual benefits<br>from Franklin<br>Templeton<br>funds complex<br>upon retirement<sup>2</sup>** | **Total<br>compensation<br>from Franklin<br>Templeton funds<br>complex** |
|  **BDC Income ETF** |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $350 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $473 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $350 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $366 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $337 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $350 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $350 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $376 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $362 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $350 | N/A | N/A | $382000 |
|  **Interested Trustees**  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |
|  **BioRevolution ETF** |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $13 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $18 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $13 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $14 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $13 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $13 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $13 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $14 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $14 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $13 | N/A | N/A | $382000 |
|  **Interested Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |
|  **Emerging Markets ex-China ETF** |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $19 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $26 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $19 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $20 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $18 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $19 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $19 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $21 | $0 | $130333 | $407000 |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $20 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $19 | N/A | N/A | $382000 |
|  **Interested Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |
|  **ESG Core Bond ETF** |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $1706 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $2314 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $1706 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $1768 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $1627 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $1706 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $1706 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $1834 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $1756 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $1706 | N/A | N/A | $382000 |
|  **Interested Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |
|  **ESG High Yield ETF** |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $415 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $563 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $415 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $431 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $397 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $415 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $415 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $446 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $427 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $415 | N/A | N/A | $382000 |
|  **Interested Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |
|  **ESG Ultra Short ETF** |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $270 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $366 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $270 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $280 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $258 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $270 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $270 | N/A | N/A | $355320 |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $290 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $278 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $270 | N/A | N/A | $382000 |
|  **Interested Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |

---

<sup>1</sup> Certain Trustees are also owed compensation deferred pursuant to a Trustee Compensation Deferral Plan. As of April 30, 2025, the total amounts of deferred compensation payable by BDC Income ETF, Biorevolution ETF, Emerging Markets ex-China ETF, ESG Core Bond ETF, ESG High Yield ETF and ESG Ultra Short ETF, including income earned on such amounts, to these Trustees were: Mr. Ahamed – $14, $2, $2, $177, $40, and $45; Ms. Baumann - $11, $2, $1, $140, $32 and $36; Ms. Domotorffy - $12, $2, $1, $158, $36 and $40; Dr. Hill - $9, $1, $1 $107, $24 and $27; and Ms. Pillai - $5, $1, $1, $62, $14 and $16.

<sup>2</sup> Estimated benefits for each Trustee are based on Trustee fee rates for calendar years 2003, 2004 and 2005.

<sup>3</sup> Mr. Leibler retired from the Board of Trustees effective June 30, 2024.

<sup>4</sup> Mr. McGreevey was appointed to the Board of Trustees on May 17, 2024.

<sup>5</sup> Mr. Reynolds and Ms. Trust are not compensated by the Fund for their service as Trustees because of their affiliation with the Investment Manager.

Under a retirement plan for Trustees of Putnam funds (the "Plan"), each Trustee who retires with at least five years of service as a Trustee of the funds is entitled to receive an annual retirement benefit equal to one-half of the average annual attendance and retainer fees paid to such Trustee for calendar years 2003, 2004 and 2005. This retirement benefit is payable during a Trustee's lifetime, beginning the year following retirement, for the number of years of service through December 31, 2006. A death benefit, also available under the Plan, ensures that the Trustee and his or her beneficiaries will receive benefit payments for the lesser of an aggregate period of (i) ten years, or (ii) such Trustee's total years of service.

The Plan Administrator (currently the Board Policy and Nominating Committee) may terminate or amend the Plan at any time, but no termination or amendment will result in a reduction in the amount of benefits (i) currently being paid to a Trustee at the time of such termination or amendment, or (ii) to which a current Trustee would have been entitled had he or she retired immediately prior to such termination or amendment. The Trustees have terminated the Plan with respect to any Trustee first elected to the Board after 2003.

For additional information concerning the Trustees, see "Management" in Part II of this SAI.

#### Share Ownership
Principal Shareholders

Although the Fund does not have information concerning the beneficial ownership of shares held in the names of Depository Trust Company participant brokers ("DTC Participants"), to the best knowledge of the Fund, as of July 31, 2025, the following DTC Participants owned of record 5% or more of the outstanding shares of the Fund.

---

| | | |
|:---|:---|:---|
| **Fund** | **Name and Address** | **Percent of Ownership (%)** |
|  **BDC Income ETF** |  |  |
|  | CHARLES SCHWAB & CO, INC.<br> 211 MAIN ST<br> SAN FRANCISCO CA 94105-1905 | 28.89% |
|  | NATIONAL FINANCIAL SERVICES LLC<br> 499 WASHINGTON BLVD<br> JERSEY CITY, NJ 07310-1995 | 27.93% |
|  | RAYMOND JAMES<br> 880 CARILLON PARKWAY<br> ST. PETERSBURG, FL 33716-110 | 7.25% |

---

------

---

| | | |
|:---|:---|:---|
|  | PERSHING LLC<br> 1 PERSHING PLAZA<br> JERSEY CITY, NJ 07399 | 5.74% |
|  | VANGUARD<br> P.O. BOX 1110<br> VALLEY FORGE, PA 19482-1110 | 5.14% |
|  **BioRevolution ETF** |  |  |
|  | J.P. MORGAN SECURITIES LLC/JPMC<br> 20855 STONE OAK PKWY<br> SAN ANTONIO, TX 78258 | 68.95% |
|  | NATIONAL FINANCIAL SERVICES LLC<br> 499 WASHINGTON BLVD<br> JERSEY CITY, NJ 07310-1995 | 17.53% |
|  | CHARLES SCHWAB & CO, INC.<br> 211 MAIN ST<br> SAN FRANCISCO CA 94105-1905 | 5.43% |
|  **Emerging Markets ex-China ETF** |  |  |
|  | CHARLES SCHWAB & CO, INC.<br> 211 MAIN ST<br> SAN FRANCISCO CA 94105-1905 | 73.71% |
|  | NATIONAL FINANCIAL SERVICES LLC<br> 499 WASHINGTON BLVD<br> JERSEY CITY, NJ 07310-1995 | 13.31% |
|  | GOLDMAN SACHS GROUP, INC.<br> 200 WEST STREET<br> NEW YORK, NY10282 | 5.81% |
|  **ESG Core Bond ETF** |  |  |
|  | J.P. MORGAN SECURITIES LLC4<br> CHASE METROTECH CENTER<br> BROOKLYN, NY 11245-0001 | 99.15% |
|  **ESG High Yield ET** | J.P. MORGAN SECURITIES LLC4<br> CHASE METROTECH CENTER<br> BROOKLYN, NY 11245-0001 | 96.44% |

---

------

---

| | | |
|:---|:---|:---|
|  **ESG Ultra Short ETF** |  |  |
|  | J.P. MORGAN SECURITIES LLC4<br> CHASE METROTECH CENTER<br> BROOKLYN, NY 11245-0001 | 76.61% |
|  | CHARLES SCHWAB & CO, INC.<br> 211 MAIN ST<br> SAN FRANCISCO CA 94105-1905 | 10.15% |

---

Shareholders who beneficially own 25% or more of the outstanding shares of the Fund or who are otherwise deemed to "control" the Fund may be able to determine or significantly influence the outcome of matters submitted to a vote of the Fund's shareholders.

As of July 31, 2025, the Trustees and officers of the Trust, as a group, owned less than 1% of the outstanding shares of each class of the Fund.

#### PORTFOLIO MANAGERS

#### Other Accounts Managed by the Portfolio Managers
The table below identifies the portfolio managers, the number of accounts (other than the Fund) for which the portfolio managers have day-to-day management responsibilities and the total assets in such accounts, within each of the following categories: registered investment companies, other pooled investment vehicles, and other accounts. For each category, the number of accounts and total assets in the accounts where fees are based on performance are also indicated, as applicable. Unless noted otherwise, all information is provided as of April 30, 2025.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Portfolio Manager** | **Type of Account** | **Number of<br>Accounts<br>Managed** | **Total Assets<br>Managed<br>(Millions) ($)** | **Number of Accounts<br>Managed for which<br>Advisory Fee is<br>Performance-Based** | **Assets Managed for<br>which Advisory**<br> **Fee is**<br> **Performance-Based<br>(Millions) ($)** |
|  **BDC Income ETF** | **BDC Income ETF** |  |  |  |  |
|  Michael Petro | Registered<br> Investment<br> Companies | 2 | 337 | 0 | 0 |
|  | Other Pooled<br> Investment Vehicles | 2 | .6 | 0 | 0 |
|  | Other Accounts | 0 | 0 | 0 | 0 |

---

------

 **BioRevolution ETF**<br>

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  William Rives | Registered<br> Investment<br> Companies | 2 | 638.25 | 0 | 0 |
|  | Other Pooled<br> Investment Vehicles | 0 | 0 | 0 | 0 |
|  | Other Accounts | 0 | 0 | 0 | 0 |
|  **Emerging Markets ex-China ETF** | **Emerging Markets ex-China ETF** |  |  |  |  |
|  Brian S. Freiwald  | Registered<br> Investment<br> Companies | 2 | 441.5 | 1 | 418.4 |
|  | Other Pooled<br> Investment Vehicles | 2 | 16.88 | 0 | 0 |
|  | Other Accounts | 4 | 1028.7 | 0 | 0 |
|  **ESG Core Bond ETF** |  |  |  |  |  |
|  Andrew C. Benson | Registered<br> Investment<br> Companies | 10 | 15972 | 0 | 0 |
|  | Other Pooled<br> Investment Vehicles | 10 | 21172.55 | 0 | 0 |
|  | Other Accounts | 20 | 8315 | 0 | 0 |
|  Albert W. Chan | Registered<br> Investment<br> Companies | 9 | 9457.2 | 0 | 0 |
|  | Other Pooled<br> Investment Vehicles | 8 | 1922.66 | 0 | 0 |
|  | Other Accounts | 42 | 3026.63 | 1 | 447.7 |

---

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  Tina Chou | Registered<br> Investment<br> Companies | 8 | 10522 | 0 | 0 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> Other Pooled<br> Investment Vehicles | 2 | 415.66 | 0 | 0 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> Other Accounts | 0 | 0 | 0 | 0 |
|  Patrick A. Klein | Registered<br> Investment<br> Companies | 20 | 21445.71 | 0 | 0 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> Other Pooled<br> Investment Vehicles | 10 | 2649.75 | 0 | 0 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> Other Accounts | 15 | 6483.24 | 2 | 1723.53 |
|  Michael V. Salm | Registered<br> Investment<br> Companies | 24 | 30742.36 | 0 | 0 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> Other Pooled<br> Investment Vehicles | 26 | 22654.31 | 1 | 12.4 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br> Other Accounts | 22 | 8455 | 3 | 4029.78 |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
|  ESG High Yield ETF | ESG High Yield ETF |  |  |  |
|  Norman P. Boucher | Registered<br> Investment<br> Companies | 3 | 1664.99 | 0 |
|  | Other Pooled<br> Investment Vehicles | 4 | 681.76 | 0 |
|  | Other Accounts | 5 | 647.96 | 0 |
|  Robert L. Salvin | Registered<br> Investment<br> Companies | 4 | 2148.99 | 0 |
|  | Other Pooled<br> Investment Vehicles | 3 | 681.76 | 0 |
|  | Other Accounts | 10 | 6089.74 | 0 |
|  ESG Ultra-Short ETF | ESG Ultra-Short ETF |  |  |  |
|  Andrew C. Benson | Registered<br> Investment<br> Companies | 10 | 16537.33 | 0 |
|  | Other Pooled<br> Investment Vehicles | 10 | 21172.55 | 0 |
|  | Other Accounts | 20 | 8315 | 0 |
|  Joanne M. Driscoll | Registered<br> Investment<br> Companies | 12 | 33393.33 | 0 |
|  | Other Pooled<br> Investment Vehicles | 6 | 3274.64 | 0 |
|  | Other Accounts | 4 | 1190.47 | 0 |
|  Michael J. Lima  | Registered<br> Investment<br> Companies | 12 | 33393.33 | 0 |
|  | Other Pooled<br> Investment Vehicles | 5 | 2426.39 | 0 |
|  | Other Accounts | 8 | 6580.31 | 0 |

---

#### Compensation of portfolio managers
The Investment Manager seeks to maintain a compensation program that is competitively positioned to attract, retain and motivate top-quality investment professionals. Portfolio managers receive a base salary, a cash incentive bonus opportunity, an equity compensation opportunity, and a benefits package. Portfolio manager compensation is reviewed annually, and the level of compensation is based on individual performance, the salary range for a portfolio manager's level of responsibility and Franklin

------

Templeton guidelines. Portfolio managers are provided no financial incentive to favor one fund or account over another. Each portfolio manager's compensation consists of the following three elements:

**Base salary** Each portfolio manager is paid a base salary.

**Annual bonus** Annual bonuses are structured to align the interests of the portfolio manager with those of the Fund's shareholders. Each portfolio manager is eligible to receive an annual bonus. Bonuses generally are split between cash (50% to 65%) and restricted shares of Franklin Resources, Inc. ("Resources") stock and mutual fund shares. The deferred equity-based compensation is intended to build a vested interest of the portfolio manager in the financial performance of both Resources and mutual funds advised by the Investment Manager. The bonus plan is intended to provide a competitive level of annual bonus compensation that is tied to the portfolio manager achieving consistently strong investment performance, which aligns the financial incentives of the portfolio manager and Fund shareholders. The Chief Investment Officer of the Investment Manager and/or other officers of the Investment Manager, with responsibility for the Fund, have discretion in the granting of annual bonuses to portfolio managers in accordance with Franklin Templeton guidelines. The following factors are generally used in determining bonuses under the plan:

------

● *Investment performance.* Primary consideration is given to the historic investment performance over the 1, 3 and 5 preceding years of all accounts managed by the portfolio manager. The pre-tax performance of each fund managed is measured relative to a relevant peer group and/or applicable benchmark as appropriate.

● *Non-investment performance.* The more qualitative contributions of the portfolio manager to the Investment Manager's business and the investment management team, including professional knowledge, productivity, responsiveness to client needs and communication, are evaluated in determining the amount of any bonus award.

● *Responsibilities.* The characteristics and complexity of funds managed by the portfolio manager are factored in the Investment Manager's appraisal.

**Additional long-term equity-based compensation** Portfolio managers may also be awarded restricted shares or units of Resources stock or restricted shares or units of one or more mutual funds. Awards of such deferred equity-based compensation typically vest over time, so as to create incentives to retain key talent.

**Benefits** Portfolio managers also participate in benefit plans and programs available generally to all employees of the Investment Manager.

#### Portfolio managers' securities ownership
The table below identifies ownership of equity securities of the Fund by the portfolio managers responsible for the day-to-day management of the Fund as of April 30, 2025.

---

| | |
|:---|:---|
| Portfolio Managers | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dollar Range of Ownership of Securities ($)  |
|  **BDC Income ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Michael Petro | $100001-$500000 |
|  **BioRevolution ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; William Rives | $100001-$500000 |
|  **Emerging Markets ex-China ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Brian S. Freiwald |  |

---

------

---

| | |
|:---|:---|
|  **ESG Core Bond ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Andrew C. Benson |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Albert W. Chan |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Tina Chou |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Patrick A. Klein |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Michael V. Salm |  |
|  **ESG High Yield ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Norman P. Boucher | $10001-$50000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Salvin |  |
|  **ESG Ultra-Short ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Andrew C. Benson | $1-$10000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Joanne M. Driscoll |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Michael J. Lima |  |

---

See "Management—Portfolio Transactions—Potential conflicts of interest in managing multiple accounts" in Part II of this SAI for information on how the Investment Manager addresses potential conflicts of interest resulting from an individual's management of more than one account.

#### SECURITIES LENDING ACTIVITIES
The Fund did not participate in any securities lending activities for the fiscal year ended April 30, 2025.

#### FINANCIAL STATEMENTS
The Fund's Form N-CSR for the fiscal year ended April 30, 2025 (https://www.sec.gov/Archives/edgar/data/1845809/000092881625000751/0000928816-25-000751-index.html,

https://www.sec.gov/Archives/edgar/data/1845809/000092881625000749/0000928816-25-000749-index.html,

https://www.sec.gov/Archives/edgar/data/1845809/000092881625000750/0000928816-25-000750-index.html,

https://www.sec.gov/Archives/edgar/data/1845809/000092881625000747/0000928816-25-000747-index.html,

https://www.sec.gov/Archives/edgar/data/1845809/000092881625000756/0000928816-25-000756-index.html,

https://www.sec.gov/Archives/edgar/data/1845809/000092881625000748/0000928816-25-000748-index.html) contains the Fund's audited financial statements, accompanying notes and the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, all of which are incorporated by reference into this SAI. These audited financial statements are available free of charge upon request by calling the Fund at 1-800-225-1581.

------

September 1, 2025

Putnam ETF Trust

---

| | | |
|:---|:---|:---|
| Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Symbol | Principal U.S. Listing Exchange |
| &nbsp;&nbsp; Putnam PanAgora ESG Emerging<br> Markets Equity ETF ("ESG Emerging<br> Markets Equity ETF") | PPEM | NYSE Arca, Inc. |
| &nbsp;&nbsp; Putnam PanAgora ESG International<br> Equity ETF ("ESG International Equity<br> ETF") | PPIE | NYSE Arca, Inc. |

---

#### STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information ("SAI") is not a prospectus. If the Fund has more than one form of current prospectus, each reference to the prospectus in this SAI includes all of the Fund's prospectuses, unless otherwise noted. The SAI should be read together with the applicable prospectus. The audited financial statements and report of the Fund's independent registered public accounting firm in the Fund's Form N-CSR, for the fiscal year ended April 30, 2025, are incorporated by reference into this SAI, which means that they are part of this SAI for legal purposes.

Part I of this SAI contains specific information about each Fund listed above (references to the "Fund" mean each Fund listed on this cover page, unless otherwise noted). Part II includes information about the Fund and other Putnam mutual funds and exchange-traded funds (collectively, the "Putnam funds").

For a free copy of the Fund's current prospectus, shareholder reports, and/or financial statements, call Putnam Investor Services at 1-800-225-1581, write P.O. Box 219697, Kansas City, MO 64121-9697 or visit www.franklintempleton.com.

1 PAN04-SAI 09/25

------

#### **Table of Contents**

---

| | |
|:---|:---|
|  **PART I** |  |
|  **[FUND ORGANIZATION AND CLASSIFICATION](#sai95427_1)** | **3** |
|  **[INVESTMENT RESTRICTIONS](#sai95427_2)** | **3** |
|  **[CHARGES AND EXPENSES](#sai95427_3)** | **4** |
|  **[PORTFOLIO MANAGERS](#sai95427_4)** | **10** |
|  **[SECURITIES LENDING ACTIVITIES](#sai95427_5)** | **12** |
|  **[FINANCIAL STATEMENTS](#sai95427_6)** | **12** |
|  **PART II** |  |
|  **[BUYING AND SELLING SHARES](#sai95427_7)** | **13** |
|  **[MISCELLANEOUS INVESTMENTS, INVESTMENT PRACTICES AND RISKS](#sai95427_8)** | **20** |
|  **[EXCHANGE TRADED FUNDS RISK](#sai95427_9)** | **71** |
|  **[TAXES](#sai95427_10)** | **71** |
|  **[MANAGEMENT](#sai95427_11)** | **85** |
|  **[DISCLOSURE OF PORTFOLIO INFORMATION](#sai95427_12)** | **103** |
|  **[INFORMATION SECURITY RISKS](#sai95427_13)** | **105** |
|  **[PROXY VOTING GUIDELINES AND PROCEDURES](#sai95427_14)** | **105** |
|  **[SECURITIES RATINGS](#sai95427_15)** | **105** |
|  **[APPENDIX A - PROXY VOTING PROCEDURES OF THE PUTNAM FUNDS](#sai95427_16)** | **110** |

---

------

#### SAI

#### PART I

#### FUND ORGANIZATION AND CLASSIFICATION
The Fund is a diversified series of Putnam ETF Trust (the "Trust"). The Trust is a Delaware statutory trust organized on December 22, 2020.

The Trust is an open-end management investment company with an unlimited number of authorized shares of beneficial interest. The Trustees may, without shareholder approval, create two or more series of shares representing separate investment portfolios. Any series of shares may be divided without shareholder approval into two or more classes of shares having such preferences and special or relative rights and privileges as the Trustees determine.

Each share has one vote per dollar of net asset value represented by such share.

Shares of all classes vote together as a single class except when otherwise required by law or as determined by the Trustees. The Trustees may take many actions affecting the fund without shareholder approval, including under certain circumstances merging the Fund into another Putnam fund. Shares are freely transferable, are entitled to dividends as declared by the Trustees, and, if the Fund were liquidated, would receive the net assets of the Fund.

The Fund may refuse any order to purchase shares. Although the Fund is not required to hold annual meetings of its shareholders, shareholders holding at least 10% of the outstanding shares entitled to vote have the right to call a meeting to elect or remove Trustees, or to take other actions as provided in the Agreement and Declaration of Trust.

#### Information about the Summary Prospectus, Prospectus, and SAI
The Fund has entered into contractual arrangements with an investment adviser, distributor, transfer 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 Trust's Agreement and Declaration of Trust, any claims asserted by a shareholder against or on behalf of the Trust (or its series), including claims against Trustees and Officers, must be brought in courts of the State of Delaware .

#### INVESTMENT RESTRICTIONS
The Fund has adopted the fundamental investment restrictions below for the protection of shareholders. Fundamental investment restrictions may not be changed without a vote of a majority of the outstanding voting securities. The Investment Company Act of 1940, as amended (the "1940 Act"), provides that a "vote of a majority of the outstanding voting securities" of a fund means the affirmative vote of the lesser of (1) more than 50% of the outstanding fund shares, or (2) 67% or more of the shares present at a meeting if more than 50% of the outstanding fund shares are represented at the meeting in person or by proxy.

#### As fundamental investment restrictions, the Fund may not and will not:
(1) Borrow money in excess of 33 1/3% of the value of its total assets (not including the amount borrowed) at the time the borrowing is made.

(2) Underwrite securities issued by other persons except to the extent that, in connection with the disposition of its portfolio investments, it may be deemed to be an underwriter under certain federal securities laws.

(3) Purchase or sell real estate, although it may purchase securities of issuers which deal in real estate, securities which are secured by interests in real estate, and securities representing interests in real estate, and it may acquire and dispose of real

------

estate or interests in real estate acquired through the exercise of its rights as a holder of debt obligations secured by real estate or interests therein.

(4) Purchase or sell commodities or commodity contracts, except as permitted by applicable law, and the Fund may purchase or sell (a) other instruments backed by commodities and (b) commodities acquired as a result of ownership of securities or other instruments.

(5) Make loans, except by purchase of debt obligations in which the Fund may invest consistent with its investment policies (including without limitation debt obligations issued by other Putnam funds), by entering into repurchase agreements, or by lending its portfolio securities.

(6) With respect to 75% of its total assets, invest in securities of any issuer if, immediately after such investment, more than 5% of the total assets of the Fund (taken at current value) would be invested in the securities of such issuer; provided that this limitation does not apply to obligations issued or guaranteed as to interest or principal by the U.S. government or its agencies or instrumentalities or to securities issued by other investment companies.

(7) With respect to 75% of its total assets, acquire more than 10% of the outstanding voting securities of any issuer; provided that this limitation does not apply to obligations issued or guaranteed as to interest or principal by the U.S. government or its agencies or instrumentalities or to securities issued by other investment companies.

(8) Purchase securities (other than securities of the U.S. government, its agencies or instrumentalities) if as a result of such purchase, more than 25% of the Fund's total assets would be invested in any one industry.

(9) Issue any class of securities which is senior to the Fund's shares of beneficial interest, except for permitted borrowings.

For purposes of the Fund's fundamental policy on commodities and commodities contracts (#4 above), notwithstanding any federal legislation or regulatory action by the Commodity Futures Trading Commission ("CFTC") that subject swaps to regulation by the CFTC, the Fund will not consider such instruments to be commodities or commodity contracts for purposes of this policy.

For purposes of the Fund's fundamental policy on industry concentration (#8 above), the Fund's investment manager determines the appropriate industry categories and assigns issuers to them, informed by a variety of considerations, including relevant third party categorization systems. Industry categories and issuer assignments may change over time as industry sectors and issuers evolve. Portfolio allocations shown in shareholder reports and other communications may use broader investment sectors or narrower sub-industry categories.

All percentage limitations on investments will apply at the time of the making of an investment and shall not be considered violated unless an excess or deficiency occurs or exists immediately after and as a result of such investment.

#### The following non-fundamental investment policy may be changed by the Trustees without shareholder approval:
The Fund will not acquire any securities of registered open-end investment companies or registered unit investment trusts in reliance on Sections 12(d)(1)(F) or (G)of the Investment Company Act of 1940, as amended.

#### CHARGES AND EXPENSES

#### Creation/Redemption Transaction Fees
The following table shows the standard transaction fees for creations and redemptions.

---

| | |
|:---|:---|
| **Standard Creation/Redemption Transaction Fee (in kind)** | **Standard Creation/Redemption Transaction Fee (in cash)** |
| $250 | $100 |

---

------

#### Management fees
Putnam Investment Management, LLC (the "Investment Manager") serves as the Fund's investment manager. Under the Fund's management agreement with the Investment Manager (the "Management Contract"), the Fund pays an annual all-inclusive management fee to the Investment Manager as shown below. The management fee is based on the Fund's average daily net assets and is calculated and accrued daily. In consideration of the management fee, the Investment Manager pays all expenses incurred by the Fund, or reimburses the Fund for, all of the Fund's organizational and other operating expenses, excluding only: (i) interest and taxes (including, but not limited to, income, excise, transfer and withholding taxes); (ii) expenses of the Fund incurred with respect to the acquisition and disposition of portfolio securities, commodities or other financial instruments and the execution of portfolio transactions, including brokerage commissions; (iii) expenses incurred in connection with any distribution plan adopted by the Fund in compliance with Rule 12b-1 under the 1940 Act, including distribution fees; (iv) expenses of printing and mailing proxy materials to shareholders of the Fund; (v) all other expenses incidental to holding meetings of the Fund's shareholders, including proxy solicitations therefor; (vi) litigation expenses (including, but not limited to, any indemnification obligation, attorneys' fees, expenses, costs, judgments, amounts paid in settlement, fines, penalties, fees of expert witnesses, document production fees, and all other liabilities whatsoever incurred or paid by the Fund or a person indemnified by the Fund); (vii) the fee payable to the Investment Manager hereunder; (viii) any extraordinary expenses (which, for the avoidance of doubt, do not include expenses related to the organization of any subsidiary for a fund or the ongoing corporate expenses of maintaining such subsidiary) and (ix) acquired fund fees and expenses.

Management Fee:

ESG Emerging Markets Equity ETF: 0.60%

ESG International Equity ETF: 0.49%

For the past three fiscal years ended April 30, pursuant to the applicable management contract, the Fund incurred the following fees:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Fund name** | Fiscal year | Management<br>fee paid | Amount of<br>management<br>fee waived\* | Amount<br>management<br>fee would have<br>been without<br>waivers |
|  ESG Emerging Markets Equity ETF | 2025 | $201714 | $657 | $202371 |
|  | 2024 | $122615 | $311 | $122926 |
|  | 2023\*\* | $24549 | $24 | $24573 |
|  ESG International Equity ETF | 2025 | $996676 | $2289 | $998965 |
|  | 2024 | $672215 | $1453 | $673668 |
|  | 2023\*\* | $131762 | $380 | $132142 |

---

\*For the fiscal year ended April 20, 2025, April 30, 2024 and April 20, 2023 management fees paid by the Fund were reduced by an amount equal to the management fees paid by Putnam Government Money Market Fund with respect to assets invested by the Fund in Putnam Government Money Market Fund.

\*\*For the period from January 19, 2023 (commencement of operations) to April 30, 2023.

#### Brokerage commissions
For the past three fiscal years ended April 30, the Fund paid the following brokerage commissions:

------

---

| | | |
|:---|:---|:---|
| **Fund name** | Fiscal year | Broker commissions |
|  ESG Emerging Markets Equity ETF | 2025 | $54926 |
|  | 2024 | $29936 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;2023\* | $18902 |
|  ESG International Equity ETF | 2025 | $148290 |
|  | 2024 | $145768 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;2023\* | $91499 |

---

\*For the period from January 19, 2023 (commencement of operations) to April 30, 2023.

For the fiscal year ended April 30, 2025, the Fund placed transactions with brokers and dealers through which the Investment Manager and its affiliates receive brokerage or research services as follows:

---

| | | |
|:---|:---|:---|
| **Fund name** | Dollar Value of these<br>transactions | Amount of<br>commissions |
|  ESG Emerging Markets Equity ETF | $75725135 | $54926 |
|  ESG International Equity ETF | $329773244 | $148290 |

---

As of April 30, 2025, the Fund did not hold securities of its regular broker-dealers (or affiliates of such broker-dealers).

#### Trustee responsibilities and fees
The Trustees are responsible for generally overseeing the conduct of Fund business. Subject to such policies as the Trustees may determine, the Investment Manager furnishes a continuing investment program for the Fund and makes investment decisions on its behalf. Subject to the control of the Trustees, the Investment Manager also manages the Fund's other affairs and business.

The table below shows the value of each Trustee's holdings in the Fund and in all registered investment companies in the Franklin Templeton funds complex overseen by the Trustee as of December 31, 2024.

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| | | | |
|:---|:---|:---|:---|
|  | Dollar Range of Equity Securities in the Fund ($) | Dollar Range of Equity Securities in the Fund ($) | |
| **Trustees** | ESG Emerging Markets<br>Equity ETF | ESG International Equity<br>ETF | Aggregate Dollar Range<br>of Equity Securities in<br>All Registered<br>Investment Companies<br>in the Franklin<br>Templeton Funds<br>Complex Overseen by<br>Trustee ($) |
|  **Independent Trustees** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy |  |  | $10001-$50000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $1-$10000 | $1-$10000 | over $100,000 |
| **Interested Trustees** | **Interested Trustees** | **Interested Trustees** | **Interested Trustees** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust |  |  | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds |  |  | over $100,000 |

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Each Independent Trustee of the Fund receives an annual retainer fee and an additional fee for each Trustee meeting attended. Independent Trustees also are reimbursed for expenses they incur relating to their services as Trustees. All of the current Independent Trustees of the Fund are Trustees of all the Putnam funds and receive fees for their services.

The Trustees periodically review their fees to ensure that such fees continue to be appropriate in light of their responsibilities as well as in relation to fees paid to trustees of other mutual fund complexes. The Board Policy and Nominating Committee, which consists solely of Independent Trustees of the Fund, estimates that committee and Trustee meeting time, together with the appropriate preparation, requires the equivalent of at least four business days per regular Trustee meeting.

The standing committees of the Board of Trustees, and the number of times each committee met during the fiscal year ended April 30, 2025, are shown in the table below:

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| | |
|:---|:---|
|  Audit, Compliance and Risk Committee | 13 |
|  Board Policy and Nominating Committee | 6 |
|  Brokerage Committee | 3 |
|  Contract Committee | 8 |
|  Executive Committee | 1 |
|  Investment Oversight Committees |  |
|  Investment Oversight Committee A | 5 |
|  Investment Oversight Committee B | 5 |
|  Pricing Committee | 8 |
|  Exchange-Traded Fund Committee | 4 |

---

Effective July 1 2025, the following changes were made to the standing committees:

• The Brokerage Committee, the Pricing Committee and the Exchange-Traded Fund Committee were eliminated as standing committees.

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• The Contract Committee assumed the responsibilities of the Brokerage Committee and the Audit, Compliance and Risk Committee assumed the responsibilities of the Pricing Committee.

• The responsibilities of the Exchange-Traded Fund Committee were assumed by the Investment Oversight Committees and the other standing committees as appropriate based on subject matter.

The following table shows the fees paid to each Trustee by the Fund for the fiscal year ended April 30, 2025 and the fees paid to each Trustee by other funds in the Franklin Templeton funds complex for services rendered during the calendar year ended December 31, 2024. Certain Independent Trustees who serve in leadership positions of the Board of Trustees or Board committees receive additional compensation, which is included in the fees shown below.

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| | | | | |
|:---|:---|:---|:---|:---|
| **Trustees**  | Aggregate<br>compensation from<br>the Fund<sup>1</sup> | Pension or<br>retirement<br>benefits accrued<br>as part of Fund<br>expenses | Estimated<br>annual benefits<br>from Franklin<br>Templeton<br>funds complex<br>upon retirement<sup>2</sup> | Total<br>compensation<br>from Franklin<br>Templeton funds<br>complex |
|  **ESG Emerging Markets Equity ETF** | **ESG Emerging Markets Equity ETF** |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $87 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $117 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $87 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $90 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $83 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $87 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $87 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $93 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $89 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $87 | N/A | N/A | $382000 |
| **Interested Trustees** | **Interested Trustees** | **Interested Trustees** | **Interested Trustees** | **Interested Trustees** |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |
|  **ESG International Equity ETF** | **ESG International Equity ETF** |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $532 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $721 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $532 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $552 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $507 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $532 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $532 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $571 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $548 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $532 | N/A | N/A | $382000 |
| **Interested Trustees** | **Interested Trustees** | **Interested Trustees** | **Interested Trustees** | **Interested Trustees** |
| &nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |

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<sup>1</sup> Certain Trustees are also owed compensation deferred pursuant to a Trustee Compensation Deferral Plan. As of April 30, 2025, the total amounts of deferred compensation payable by ESG Emerging Markets Equity ETF and ESG International Equity ETF, including income earned on such amounts, to these Trustees were: Mr. Ahamed – $7 and $50; Ms. Baumann - $6 and $40; Ms. Domotorffy - $7 and $45; Dr. Hill - $17 and $115; and Ms. Pillai - $3 and $17, respectively.

<sup>2</sup> Estimated benefits for each Trustee are based on Trustee fee rates for calendar years 2003, 2004 and 2005.

<sup>3</sup> Mr. Leibler retired from the Board of Trustees effective June 30, 2024.

<sup>4</sup> Mr. McGreevey was appointed to the Board of Trustees on May 17, 2024.

<sup>5</sup> Mr. Reynolds and Ms. Trust are not compensated by the Fund for their service as Trustees because of their affiliation with the Investment Manager.

Under a retirement plan for Trustees of Putnam funds (the "Plan"), each Trustee who retires with at least five years of service as a Trustee of the funds is entitled to receive an annual retirement benefit equal to one-half of the average annual attendance and retainer fees paid to such Trustee for calendar years 2003, 2004 and 2005. This retirement benefit is payable during a Trustee's lifetime, beginning the year following retirement, for the number of years of service through December 31, 2006. A death benefit, also available under the Plan, ensures that the Trustee and his or her beneficiaries will receive benefit payments for the lesser of an aggregate period of (i) ten years, or (ii) such Trustee's total years of service.

The Plan Administrator (currently the Board Policy and Nominating Committee) may terminate or amend the Plan at any time, but no termination or amendment will result in a reduction in the amount of benefits (i) currently being paid to a Trustee at the time of such termination or amendment, or (ii) to which a current Trustee would have been entitled had he or she retired immediately prior to such termination or amendment. The Trustees have terminated the Plan with respect to any Trustee first elected to the Board after 2003.

For additional information concerning the Trustees, see "Management" in Part II of this SAI.

**Share Ownership** 

Principal Shareholders

Although the Fund does not have information concerning the beneficial ownership of shares held in the names of Depository Trust Company participant brokers ("DTC Participants"), to the best knowledge of the Fund, as of July 31, 2025, the following DTC Participants owned of record 5% or more of the outstanding shares of the Fund.

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| | | |
|:---|:---|:---|
| **Fund** | Name and Address | Percent of Ownership (%) |
|  **ESG Emerging Markets Equity ETF** | J.P. MORGAN SECURITIES LLC<br> 4 CHASE METROTECH CENTER<br> BROOKLYN, NY 11245-0001 | 88.97%\* |
|  | WELLS FARGO<br> 420 MONTGOMERY STREET<br> SAN FRANCISCO, CA 94104 | 8.51% |
|  **ESG International Equity ETF** | J.P. MORGAN SECURITIES LLC<br> 4 CHASE METROTECH CENTER<br> BROOKLYN, NY 11245-0001 | 96.66%\* |

---

\*Shareholders who beneficially own 25% or more of the outstanding shares of the Fund or who are otherwise deemed to "control" the Fund may be able to determine or significantly influence the outcome of matters submitted to a vote of the Fund's shareholders.

As of July 31, 2025, the Trustees and officers of the Trust, as a group, owned less than 1% of the outstanding shares of each class of the Fund.

------

#### PORTFOLIO MANAGERS

#### Other Accounts Managed by the Portfolio Managers
The table below identifies the portfolio managers, the number of accounts (other than the Fund) for which the portfolio managers have day-to-day management responsibilities and the total assets in such accounts, within each of the following categories: registered investment companies, other pooled investment vehicles, and other accounts. For each category, the number of accounts and total assets in the accounts where fees are based on performance are also indicated, as applicable. Unless noted otherwise, all information is provided as of April 30, 2025.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Portfolio Manager** | **Type of Account**<br>| **Number of<br>Accounts<br>Managed** | **Total Assets<br>Managed<br>(Millions) ($)** | **Number of Accounts<br>Managed for which<br>Advisory Fee is<br>Performance-Based** | **Assets Managed for<br>which Advisory Fee<br>is <br>Performance-Based<br>(Millions) ($)** |
|  **ESG Emerging Markets Equity ETF** | **ESG Emerging Markets Equity ETF** | **ESG Emerging Markets Equity ETF** | **ESG Emerging Markets Equity ETF** | **ESG Emerging Markets Equity ETF** | **ESG Emerging Markets Equity ETF** |
|  George D. Mussalli | Registered<br>Investment<br>Companies | 2 | 298.8 | 0 | 0 |
|  | Other Pooled<br>Investment Vehicles | 12 | 14498.9 | 0 | 0 |
|  | Other Accounts | 52 | 10410.4 | 10 | 5243.2 |
|  Richard Tan | Registered<br>Investment<br>Companies | 1 | 235.1 | 0 | 0 |
|  | Other Pooled<br>Investment Vehicles | 5 | 8137.6 | 0 | 0 |
|  | Other Accounts | 32 | 3140.3 | 4 | 839.2 |
|  **ESG International Equity ETF** | **ESG International Equity ETF** | **ESG International Equity ETF** | **ESG International Equity ETF** | **ESG International Equity ETF** | **ESG International Equity ETF** |
|  George D. Mussalli | Registered<br>Investment<br>Companies | 2 | 107.0 | 0 | 0 |
|  | Other Pooled<br>Investment Vehicles | 12 | 14498.9 | 0 | 0 |
|  | Other Accounts | 52 | 10410.4 | 10 | 5243.2 |

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------

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  Richard Tan | Registered<br>Investment<br>Companies | 1 | 43.2 | 0 | 0 |
|  | Other Pooled<br>Investment Vehicles | 5 | 8137.6 | 0 | 0 |
|  | Other Accounts | 32 | 3140.3 | 4 | 839.2 |

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#### Compensation of portfolio managers
All PanAgora Asset Management, Inc. ("PanAgora") investment professionals receive industry competitive salaries (based on an annual benchmarking study) and have the opportunity to be rewarded with meaningful performance-based annual bonuses. All employees of PanAgora are evaluated by comparing their performance against tailored and specific objectives. These goals are developed and monitored through the cooperation of employees and their immediate supervisors. Portfolio managers have specific goals regarding the investment performance of the accounts they manage and not revenue associated with these accounts. Long-term investment performance is typically assessed based on performance over multiple time periods against competitors or, for certain strategies, against other relevant investment benchmarks. Actual incentive compensation may be higher or lower than the target, based on individual, group, and subjective performance, and also reflect the performance of PanAgora as a firm. Such targets are reviewed each year to adjust for changes in responsibility and market conditions.

In addition, certain PanAgora employees own non-voting interests in PanAgora via PanAgora's management equity plan. Assuming all employee stock and options are issued and exercised, up to 20% of the economic interests in PanAgora can be owned, in the aggregate, by PanAgora employees. To ensure the retention benefit of the plan, the ownership is subject to a vesting schedule. The ownership is primarily shared by members of the senior management team as well as senior investment and research professionals.

#### Portfolio managers' securities ownership
The table below identifies ownership of equity securities of the Fund by the portfolio managers responsible for the day-to-day management of the Fund as of April 30, 2025.

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| | |
|:---|:---|
| Portfolio Managers<br>| Dollar Range of Ownership of Securities ($)<br>|
|  **ESG Emerging Markets Equity ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; George D. Mussalli |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Richard Tan |  |
|  **ESG International Equity ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp; George D. Mussalli | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $100001 - $500000 |
| &nbsp;&nbsp;&nbsp;&nbsp; Richard Tan |  |

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See "Management—Portfolio Transactions—Potential conflicts of interest in managing multiple accounts" in Part II of this SAI for information on how the Investment Manager addresses potential conflicts of interest resulting from an individual's management of more than one account.

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#### SECURITIES LENDING ACTIVITIES
The Fund did not participate in any securities lending activities for the fiscal year ended April 30, 2025.

#### FINANCIAL STATEMENTS
The Fund's Form N-CSR for the fiscal year ended April 30, 2025

([https://www.sec.gov/ix?doc=/Archives/edgar/data/1845809/000092881625000754/tsr-20250430.htm](http://www.sec.gov/Archives/edgar/data/../../../ix?doc=/Archives/edgar/data/1845809/000092881625000754/tsr-20250430.htm),

[https://www.sec.gov/ix?doc=/Archives/edgar/data/1845809/000092881625000755/tsr-20250430.htm](http://www.sec.gov/Archives/edgar/data/../../../ix?doc=/Archives/edgar/data/1845809/000092881625000755/tsr-20250430.htm)) contains the Fund's audited financial statements, accompanying notes and the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, all of which are incorporated by reference into this SAI. These audited financial statements are available free of charge upon request by calling the Fund at 1-800-225-1581.

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Throughout this SAI, references to the fund's investment manager (the "Investment Manager") shall refer to the entity indicated for each fund in the table below:

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;Investment<br>Manager | Franklin Advisers, Inc.<br>("Franklin Advisers") | Putnam Investment Management, LLC ("Putnam Management") |
| &nbsp;&nbsp;&nbsp;Funds | Putnam ESG Core Bond ETF<br> Putnam ESG High Yield ETF<br> Putnam ESG Ultra Short ETF | Putnam BDC Income ETF<br> Putnam BioRevolution<sup>TM</sup> ETF<br> Putnam Emerging Markets Ex-China ETF<br> Putnam PanAgora ESG Emerging Markets Equity ETF<br> Putnam PanAgora ESG International Equity ETF |

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#### THE PUTNAM ETFS

#### STATEMENT OF ADDITIONAL INFORMATION ("SAI")

#### PART II

#### GENERAL DESCRIPTION OF THE FUNDS
Each fund is an actively managed exchange-traded fund ("ETF"). Each fund issues and redeems shares on a continuous basis at net asset value per share ("NAV") in aggregations of a specified number of shares called "Creation Units." Creation Units are generally issued in exchange for portfolio securities and/or cash. Shares are listed and traded on an exchange. Shares trade in the secondary market at market prices that may differ from the shares' NAV. Shares are not individually redeemable, but are redeemable only in Creation Unit aggregations, also in exchange for portfolio securities and/or cash. Shareholders who are not Authorized Participants (as defined herein), therefore, will not be able to purchase or redeem shares directly with or from a fund. Instead, most shareholders who are not Authorized Participants will buy and sell shares in the secondary market through a broker.

#### BUYING AND SELLING SHARES

#### Book-Entry Only System
The Depository Trust Company ("DTC") acts as securities depository for the shares. Shares of each fund are represented by securities registered in the name of DTC or its nominee and deposited with, or on behalf of, DTC. Certificates will not be issued for shares.

DTC, a limited-purpose trust company, was created to hold securities of its participants and to facilitate the clearance and settlement of securities transactions among DTC participants in such securities through electronic book-entry changes in accounts of the DTC participants, thereby eliminating the need for physical movement of securities certificates. DTC participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations, some of whom (and/or their representatives) own DTC. Access to the DTC system is also available to others such as banks, brokers, dealers, and trust companies that clear through or maintain a custodial relationship with a DTC participant, either directly or indirectly.

Beneficial ownership of shares is limited to DTC participants and persons holding interests through DTC participants. Ownership of beneficial interests in shares (owners of beneficial interests are referred to herein as Beneficial Owners) is shown on, and the transfer of ownership is effected only through, records maintained by DTC (with respect to DTC participants) and on the records of DTC participants (with respect to indirect DTC participants and Beneficial Owners that are not DTC participants). Beneficial Owners will receive from or through a DTC participant a written confirmation relating to their purchase of shares.

------

Conveyance of all notices, statements and other communications to Beneficial Owners is effected as follows. Pursuant to the Depositary Agreement between the trust and DTC, DTC is required to make available to the trust upon request and for a fee to be charged to the trust a listing of the shares of each fund held by each DTC participant. The trust shall inquire of each such DTC participant as to the number of Beneficial Owners holding fund shares, directly or indirectly, through such DTC participant. The trust shall provide each such DTC participant with copies of such notice, statement or other communication, in such form, number and at such place as such DTC participant may reasonably request, in order that such notice, statement or communication may be transmitted by such DTC participant, directly or indirectly, to such Beneficial Owners. In addition, the trust shall pay to each such DTC participant a fair and reasonable amount as reimbursement for the expenses attendant to such transmittal, all subject to applicable statutory and regulatory requirements.

Share distributions shall be made to DTC or its nominee, Cede & Co., as the registered holder of all shares. DTC or its nominee, upon receipt of any such distributions, shall credit immediately DTC participants' accounts with payments in amounts proportionate to their respective beneficial interests in shares of each fund as shown on the records of DTC or its nominee. Payments by DTC participants to indirect DTC participants and Beneficial Owners of shares held through such DTC participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in a "street name," and will be the responsibility of such DTC participants.

The trust has no responsibility or liability for any aspect of the records relating to or notices to Beneficial Owners, or payments made on account of beneficial ownership interests in such shares, or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests, or for any other aspect of the relationship between DTC and the DTC participants or the relationship between such DTC participants and the indirect DTC participants and Beneficial Owners owning through such DTC participants.

DTC may decide to discontinue providing its service with respect to shares at any time by giving reasonable notice to the trust and discharging its responsibilities with respect thereto under applicable law. Under such circumstances, the trust shall take action either to find a replacement for DTC to perform its functions at a comparable cost or, if such a replacement is unavailable, to issue and deliver printed certificates representing ownership of shares, unless the trust makes other arrangements with respect thereto satisfactory to the listing exchange.

#### Creation Units
The trust issues and redeems shares of each fund only in Creation Unit aggregations on a continuous basis through Franklin Distributors, LLC ("Franklin Distributors"), the Fund's distributor, without a sales load, at its NAV next determined after receipt, on any Business Day (as defined herein), of an order in proper form. An Authorized Participant that is not a "qualified institutional buyer," as such term is defined under Rule 144A of the 1933 Act, will not be able to receive, as part of a redemption, restricted securities eligible for resale under Rule 144A.

A "Business Day" with respect to each fund is any day on which the listing exchange or the NYSE is open for business. As of the date of the prospectus, the listing exchange and the NYSE observe the following holidays: New Year's Day, Martin Luther King, Jr. Day, President's Day (Washington's Birthday) (U.S.), Good Friday, Memorial Day, Juneteenth National Independence Day, Independence Day (U.S.), Labor Day (U.S.), Thanksgiving Day (U.S.), and Christmas Day.

To be eligible to place orders to purchase a Creation Unit of each fund, an entity must be an "Authorized Participant" which is a member or participant of a clearing agency registered with the SEC, which has a written agreement with Franklin Distributors, the fund's distributor, that allows the Authorized Participant to place orders for the purchase and redemption of Creation Units ("Participant Agreement"). All shares of each fund, however created, will be entered on the records of DTC in the name of Cede & Co. for the account of a DTC participant.

Each fund reserves the right to adjust the prices of fund shares and the number of shares in a Creation Unit in the future to maintain convenient trading ranges for investors. Any adjustments would be accomplished through stock splits or reverse stock splits, which would have no effect on the net assets of each fund.

#### Portfolio Deposit
The consideration for purchase of a Creation Unit generally consists of an in-kind deposit of a portfolio of securities ("Deposit Securities") designated by a fund (or in certain circumstances, cash in lieu of certain Deposit Securities) together with a deposit

------

of a specified cash payment ("Cash Component") computed as described herein. Alternatively, each fund may issue and redeem Creation Units in exchange for a specified all-cash payment ("Cash Deposit"). Together, the Deposit Securities (including any cash in lieu amounts) and the Cash Component or, alternatively, the Cash Deposit, constitute the "Portfolio Deposit," which represents the minimum initial and subsequent investment amount for a Creation Unit. In the event each fund requires Deposit Securities (including any cash in lieu amounts) and a Cash Component in consideration for purchasing a Creation Unit, the function of the Cash Component is to compensate for any differences between the NAV per Creation Unit and the Deposit Amount (as defined below). The Cash Component would be an amount equal to the difference between the NAV of the shares (per Creation Unit) and the "Deposit Amount," which is an amount equal to the market value of the Deposit Securities. If the Cash Component is a positive number (the NAV per Creation Unit exceeds the Deposit Amount), the Authorized Participant will deliver the Cash Component. If the Cash Component is a negative number (the NAV per Creation Unit is less than the Deposit Amount), the Authorized Participant will receive the Cash Component. Computation of the Cash Component excludes any stamp duty or other similar fees and expenses payable upon transfer of beneficial ownership of the Deposit Securities, which shall be the sole responsibility of the Authorized Participant.

A fund may determine, upon receiving a purchase order from an Authorized Participant, to accept a basket of securities or cash that differs from Deposit Securities or to permit the substitution of an amount of cash (i.e., a "cash-in-lieu" amount) to be added to the Cash Component to replace any Deposit Security. In cases where a fund purchases portfolio securities with cash, the Authorized Participant will reimburse the fund for, among other things, any difference between the market value at which the securities were purchased by the fund and the cash in lieu amount (which amount, at the Investment Manager's discretion, may be capped), applicable registration fees and taxes. Brokerage commissions incurred in connection with a fund's acquisition of Deposit Securities will be at the expense of the fund and will affect the value of all shares of the fund; but the Investment Manager may adjust the transaction fee to the extent the composition of the Deposit Securities changes or cash in lieu is added to the Cash Component to protect ongoing shareholders.

#### Procedures for Creation Unit Purchases
All purchase orders must be placed for one or more Creation Units. All orders to purchase Creation Units must be received by Franklin Distributors or its agent no later than the closing time of regular trading hours on the listing exchange or the NYSE (ordinarily 4:00 p.m. Eastern Time) (the Closing Time) or at an earlier time set forth in the Participant Agreement or otherwise provided to all Authorized Participants on the date such order is placed in order for the creation of Creation Units to be effected based on the NAV of shares of each fund as next determined on such date after receipt of the order in proper form. The date on which an order to purchase Creation Units (or an order to redeem Creation Units as discussed below) is placed is referred to as the "Transmittal Date." Orders must be transmitted by an Authorized Participant by telephone or other transmission method acceptable to Franklin Distributors pursuant to procedures set forth in the Participant Agreement. Severe economic or market disruptions or changes, or telephone or other communications failure may impede the ability to reach Franklin Distributors or an Authorized Participant.

All orders to purchase Creation Units shall be placed with an Authorized Participant, as applicable, in the form required by such Authorized Participant. In addition, in the event an Authorized Participant places an order on behalf of an investor, the Authorized Participant may request the investor to make certain representations or enter into agreements with respect to the order, including payments of cash to pay the Cash Component, when required. Investors should be aware that their particular broker may not have executed a Participant Agreement and that, therefore, orders to purchase Creation Units have to be placed by the investor's broker through an Authorized Participant that has executed a Participant Agreement. In such cases there may be additional charges to such investor. At any given time, there may be only a limited number of broker-dealers that have executed a Participant Agreement.

Those placing orders to purchase Creation Units should afford sufficient time to permit proper submission of the order to Franklin Distributors or its agent prior to the applicable deadlines on the Transmittal Date. Authorized participants may ascertain the deadlines applicable to DTC and the Federal Reserve Bank wire system by contacting the operations department of the broker or depository institution effecting such transfer of Deposit Securities and Cash Component.

Portfolio Deposits must be delivered through the Federal Reserve System (for cash and government securities) and through DTC (for corporate securities) by an Authorized Participant that has executed a Participant Agreement. The Portfolio Deposit transfer must be ordered by the Authorized Participant on the Transmittal Date in a timely fashion so as to ensure the delivery of the requisite number of Deposit Securities through DTC to the account of each fund by no later than 1:00 p.m. Eastern Time of the next Business Day immediately following the Transmittal Date. In certain cases, Authorized Participants will purchase and

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redeem Creation Units of each fund on the same Transmittal Date. In these instances, each fund reserves the right to settle these transactions on a net basis.

All questions as to the number of Deposit Securities to be delivered, and the validity, form and eligibility (including time of receipt) for the deposit of any tendered securities, will be determined by each fund, whose determination shall be final and binding. For purchase orders composed solely of a Cash Component, the amount of cash equal to the Cash Component must be transferred directly to each fund's custodian through the Federal Reserve Bank wire transfer system in a timely manner so as to be received by each fund's custodian no later than 10:00 a.m. Eastern Time on the next Business Day immediately following such Transmittal Date. An order to purchase Creation Units is deemed received by Franklin Distributors on the Transmittal Date if (i) such order is received by Franklin Distributors or its agent not later than the Closing Time, or 3:00 p.m. Eastern Time in the case of nonconforming orders, on such Transmittal Date; and (ii) all other procedures set forth in the Participant Agreement are properly followed. However, if each fund's custodian does not receive the required Deposit Securities together with the associated Cash Component by 1:00 p.m. or, with respect to purchase orders composed solely of a Cash Component, the Cash Component by 10:00 a.m. on the next Business Day immediately following the Transmittal Date, such order will be deemed not in proper form and canceled. Upon written notice to Franklin Distributors, such canceled order may be resubmitted the following Business Day using a Portfolio Deposit as newly constituted to reflect the next calculated NAV of each fund. The delivery of Creation Units so purchased will occur not later than the second (2nd) Business Day following the day on which the purchase order is deemed received by Franklin Distributors.

Franklin Distributors or its agent will inform the transfer agent, the Investment Manager and each fund's custodian upon receipt of a purchase order. The custodian will then provide such information to the appropriate sub-custodian. The custodian will cause the sub-custodian to maintain an account into which the Deposit Securities (or the cash value of all or part of such securities, in the case of a cash purchase or "cash in lieu" amount) will be delivered. Deposit Securities must be delivered to an account maintained at the applicable local custodian. The trust must also receive, on or before the contractual settlement date, immediately available or same day funds estimated by the custodian to be sufficient to pay the Cash Component next determined after receipt in proper form of the purchase order, together with the purchase transaction fee described in Part I of this SAI.

Once the Trust has accepted a purchase order, the trust will confirm the issuance of a Creation Unit of a fund against receipt of payment, at such NAV as will have been calculated after receipt in proper form of such order. Franklin Distributors or its agent will then transmit a confirmation of acceptance of such order.

Creation Units will not be issued until the transfer of good title to the trust of the Deposit Securities and the payment of the Cash Component have been completed. When the sub-custodian has confirmed to the custodian that the required Deposit Securities (or the cash value thereof) have been delivered to the account of the relevant sub-custodian, Franklin Distributors and the Investment Manager will be notified of such delivery and the trust will issue and cause the delivery of the Creation Units.

Creation Units may be created in advance of receipt by each fund of all or a portion of the applicable Deposit Securities as described below. In these circumstances, the initial deposit will have a value greater than the NAV of the shares on the date the order is placed in proper form since, in addition to available Deposit Securities, cash must be deposited in an amount equal to the sum of (i) the Cash Component (including any transaction fees), plus (ii) 105% of the market value of the undelivered Deposit Securities ("Additional Cash Deposit"). The order shall be deemed to be received on the Business Day on which the order is placed provided that the order is placed in proper form prior to 3:00 p.m. Eastern Time on such date and federal funds in the appropriate amount are deposited with each fund's custodian by 10:00 a.m. Eastern Time the following Business Day. If the order is not placed in proper form by 3:00 p.m. or federal funds in the appropriate amount are not received by 10:00 a.m. the next Business Day, then the order may be deemed to be rejected and the Authorized Participant shall be liable to each fund for losses, if any, resulting therefrom. An additional amount of cash shall be required to be deposited with each fund, pending delivery of the missing Deposit Securities to the extent necessary to maintain the Additional Cash Deposit with each fund in an amount at least equal to 105% of the daily marked to market value of the missing Deposit Securities. In the sole discretion of each fund following the Business Day on which the order was received a fund may use the cash on deposit to purchase the missing Deposit Securities. Authorized Participants will be liable to each fund for the costs incurred by each fund in connection with any such purchases. These costs will be deemed to include the amount by which the actual purchase price of the Deposit Securities exceeds the market value of such Deposit Securities on the day the purchase order was deemed received by Franklin Distributors plus the brokerage and related transaction costs associated with such purchases and the Authorized Participant shall be liable to the fund for any shortfall between the cost to the fund of purchasing any missing Deposit Securities and the

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value of the collateral. Each fund will return any unused portion of the Additional Cash Deposit once all of the missing Deposit Securities have been properly received by Franklin Distributors or purchased by each fund and deposited into each fund.

#### Acceptance of Purchase Orders
Each fund and Franklin Distributors reserve the right to reject or revoke acceptance of a creation order transmitted to it in respect to the fund, if, including but not limited to, the following conditions are present(i) the order is not in proper form; (ii) the investor(s), upon obtaining the shares ordered, would own 80% or more of the currently outstanding shares of each fund; (iii) acceptance of the Deposit Securities would have certain adverse tax consequences to each fund; (iv) acceptance of the Portfolio Deposit would, in the opinion of the fund, be unlawful; or (v) in the event that circumstances outside the control of each fund, make it impossible to process creation orders for all practical purposes. Examples of such circumstances include, without limitation, acts of God; public service or utility problems such as earthquakes, fires, floods, extreme weather conditions, and power outages resulting in telephone, telecopy, and computer failures; wars; civil or military disturbances, including acts of civil or military authority or governmental actions; terrorism; sabotage; epidemics; riots; labor disputes; market conditions or activities causing trading halts; systems failures involving computer or other information systems affecting each fund, the Investment Manager, Franklin Distributors, DTC, NSCC, the transfer agent, or any other participant in the purchase process, and similar extraordinary events. Each fund and Franklin Distributors have the right to require information to determine beneficial share ownership for purposes of (ii) above should it so choose or to rely on a certification from a broker-dealer who is a member of the Financial Industry Regulatory Authority, Inc. as to the cost basis of Deposit Securities. Franklin Distributors or the fund shall notify a prospective purchaser of a Creation Unit and/or the Authorized Participant acting on the purchaser's behalf, of its rejection of the purchaser's order. Each fund, the transfer agent, and Franklin Distributors are under no duty, however, to verify or give notification of any defects or irregularities in any written order or in the delivery of a Portfolio Deposit, nor shall any of them incur any liability for the failure to give any such notification.

#### Redemption of Creation Units
Shares may be redeemed only in Creation Units at their NAV next determined after receipt of a redemption request in proper form by each fund through the transfer agent and only on a Business Day through an Authorized Participant that has entered into a Participant Agreement. Each fund generally will not redeem shares in amounts less than Creation Unit-size aggregations. Beneficial Owners must accumulate enough shares to constitute a Creation Unit in order to have such shares redeemed by each fund. There can be no assurance, however, that there will be sufficient liquidity in the public trading market at any time to permit assembly of a Creation Unit. Investors should expect to incur brokerage and other costs in connection with assembling a sufficient number of shares to constitute a redeemable Creation Unit.

The redemption proceeds for a Creation Unit may consist of a portfolio of securities (Fund Securities) – as announced by the Investment Manager, or its agent, on the Business Day of the request for redemption received in proper form – plus cash in an amount equal to the difference between the NAV of the shares being redeemed, as next determined after a receipt of the request in proper form, and the value of the Fund Securities ("Cash Redemption Amount"), less a redemption transaction fee and any variable fee as listed in Part I of this SAI. In the event that the Fund Securities have a value greater than the NAV of the shares being redeemed, a compensating cash payment to a fund equal to the differential plus the applicable redemption transaction fee is required to be made by or through an Authorized Participant by the redeeming shareholder. Notwithstanding the foregoing, each fund will substitute a cash-in-lieu amount to replace any Fund Security that is a non-deliverable instrument. The amount of the cash paid out in such cases will be equivalent to the value of the instrument listed as a Fund Security.

The right of redemption may be suspended or the date of payment postponed with respect to each fund (i) for any period during which the NYSE is closed (other than customary weekend and holiday closings); (ii) for any period during which trading on the NYSE is suspended or restricted; (iii) for any period during which an emergency exists as a result of which disposal of the shares or determination of each fund's NAV is not reasonably practicable; or (iv) in such other circumstances as is permitted by the SEC.

Orders to redeem Creation Units must be delivered through an Authorized Participant. An order to redeem Creation Units is deemed received by each fund on the Transmittal Date if (i) such order is received in proper form by the transfer agent not later than the Closing Time (or one hour prior to the Closing Time (ordinarily 3:00 p.m. Eastern Time) for nonconforming orders) on such Transmittal Date; (ii) such order is accompanied or followed by the requisite number of shares of each fund and the Cash Redemption Amount specified in such order, which delivery must be made through DTC to each fund's custodian no later than 1:00 p.m., for the shares, and 3:00 p.m., for the Cash Redemption Amount, Eastern Time on the next Business Day following

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such Transmittal Date (the "DTC Cut-Off-Time"); and (iii) all other procedures set forth in the Participant Agreement are properly followed. The requisite Fund Securities and the Cash Redemption Amount will generally be transferred by the second (2nd) Business Day following the date on which such request for redemption is deemed received, which will generally be no more than seven (7) days after such request for redemption but may be up to fifteen days for funds that invest in foreign securities. In certain cases, Authorized Participants will redeem and purchase Creation Units of each fund on the same Transmittal Date. In these instances, each fund reserves the right to settle these transactions on a net basis.

If each fund determines, based on information available to each fund when a redemption request is submitted by an Authorized Participant, that: (i) the short interest of each fund in the marketplace (*i.e.,* the number of shares of the fund that have been sold short but have not yet been covered or closed out) is greater than or equal to 100%; and (ii) the orders in the aggregate from all Authorized Participants redeeming shares on a Business Day represent 25% or more of the outstanding shares of each fund, such Authorized Participant will be required to verify to each fund the accuracy of its representations that are deemed to have been made by submitting a request for redemption. If, after receiving notice of the verification requirement, the Authorized Participant does not verify the accuracy of its representations that are deemed to have been made by submitting a request for redemption in accordance with this requirement, its redemption request will be considered not to have been received in proper form.

To the extent contemplated by an Authorized Participant's agreement, in the event the Authorized Participant has submitted a redemption request in proper form but is unable to transfer all or part of the Creation Units to be redeemed to Franklin Distributors, on behalf of each fund, at or prior to the closing time of regular trading on the listing exchange on the date such redemption request is submitted, Franklin Distributors will nonetheless accept the redemption request in reliance on the undertaking by the Authorized Participant to deliver the missing fund shares as soon as possible, which undertaking shall be secured by the Authorized Participant's delivery and maintenance of collateral consisting of cash having a value (marked to market daily) at least equal to 105% of the value of the missing fund shares. The current procedures for collateralization of missing shares require, among other things, that any cash collateral shall be in the form of U.S. dollars in immediately-available funds and shall be held by each fund and marked to market daily, and that the fees of each fund and any sub-custodians in respect of the delivery, maintenance, and redelivery of the cash collateral shall be payable by the Authorized Participant. The Participant Agreement will permit each fund to purchase the missing fund shares or acquire the Deposit Securities underlying such shares at any time and will subject the Authorized Participant to liability for any shortfall between the cost to each fund of purchasing such shares or Deposit Securities and the value of the collateral.

The calculation of the value of the Fund Securities and the Cash Redemption Amount to be delivered upon redemption will be made by the Investment Manager according to the procedures set forth in the section entitled "Determination of Net Asset Value" computed on the Business Day on which a redemption order is deemed received by the transfer agent. Therefore, if a conforming redemption order in proper form is submitted to the transfer agent by an Authorized Participant not later than Closing Time, or 3:00 p.m. Eastern Time in the case of nonconforming orders, on the Transmittal Date, and the requisite number of shares of each fund are delivered to each fund's custodian prior to the DTC Cut-Off-Time, then the value of the Fund Securities and the Cash Redemption Amount to be delivered will be determined by the Bank of New York Mellon on such Transmittal Date. If, however, a conforming redemption order is submitted to the transfer agent by an Authorized Participant not later than the Closing Time, or 3:00 p.m. Eastern Time in the case of nonconforming orders, on the Transmittal Date but either (i) the requisite number of shares of each fund and the Cash Redemption Amount are not delivered by the DTC Cut-Off-Time as described above on the next Business Day following the Transmittal Date, or (ii) the redemption order is not submitted in proper form, then the redemption order will not be deemed received as of the Transmittal Date. In such case, the value of the Fund Securities and the Cash Redemption Amount to be delivered will be computed as of the Closing Time on the Business Day that such order is deemed received by the transfer agent, i.e., the Business Day on which the shares of each fund are delivered through DTC to Franklin Distributors by the DTC Cut-Off-Time on such Business Day pursuant to a properly submitted redemption order.

A fund may in its discretion exercise its option to redeem shares in cash, and the redeeming Beneficial Owner will be required to receive its redemption proceeds in cash. In addition, an investor may request a redemption in cash that each fund may, in its sole discretion, permit. In either case, the investor will receive a cash payment equal to the NAV of its shares based on the NAV of shares of each fund next determined after the redemption request is received in proper from (minus a redemption transaction fee and additional charge for requested cash redemptions specified above, to offset each fund's brokerage and other transaction costs associated with the disposition of Fund Securities). In addition, each fund reserves the right to honor a redemption request by delivering a basket of securities or cash that differs from the Fund Securities.

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Redemption of shares for Fund Securities will be subject to compliance with applicable federal and state securities laws and each fund (whether or not it otherwise permits cash redemptions) reserves the right to redeem Creation Units for cash to the extent that each fund could not lawfully deliver specific Fund Securities upon redemptions or could not do so without first registering the Fund Securities under such laws. An Authorized Participant or a Beneficial Owner for which it is acting subject to a legal restriction with respect to a particular stock included in the Fund Securities applicable to the redemption of a Creation Unit may be paid an equivalent amount of cash. The Authorized Participant may request the redeeming Beneficial Owner of the shares to complete an order form or to enter into agreements with respect to such matters as compensating cash payment.

In connection with taking delivery of shares for Fund Securities upon redemption of Creation Units, a redeeming shareholder or entity acting on behalf of a redeeming shareholder must maintain appropriate custody arrangements with a qualified broker-dealer, bank or other custody providers in each jurisdiction in which any of the Fund Securities are customarily traded, to which account such Fund Securities will be delivered. If neither the redeeming shareholder nor the entity acting on behalf of a redeeming shareholder has appropriate arrangements to take delivery of the Fund Securities in the applicable foreign jurisdiction and it is not possible to make other such arrangements, or if it is not possible to effect deliveries of the Fund Securities in such jurisdictions, the trust may, in its discretion, exercise its option to redeem such shares in cash, and the redeeming shareholder will be required to receive its redemption proceeds in cash.

Deliveries of redemption proceeds generally will be made within two Business Days. Due to the schedule of holidays in certain countries, however, the delivery of redemption proceeds may take longer than two Business Days after the day on which the redemption request is received in proper form. In such cases, the local market settlement procedures will not commence until the end of the local holiday periods.

#### Creation/Redemption Transaction Fees
The funds generally impose a "Transaction Fee" on investors purchasing or redeeming Creation Units. The Transaction Fee will be limited to amounts that have been determined by the Investment Manager to be appropriate. The purpose of the Transaction Fee is to protect the existing shareholders of the funds from the dilutive costs associated with the purchase and redemption of Creation Units. Where a fund permits cash creations (or redemptions) or cash in lieu of depositing one or more Deposit Securities, the purchaser (or redeemer) may be assessed a higher Transaction Fee to offset the transaction cost to a fund of buying (or selling) those particular Deposit Securities. To the extent a purchase/redemption transaction consists of cash and/or in-kind securities, the standard Transaction Fee applies to in-kind purchases and redemptions of creation units and an additional Transaction Fee may also be imposed. Each fund reserves the right to not impose the additional Transaction Fee or to vary the amount of the additional Transaction Fee, depending on the materiality of the fund's actual transaction costs incurred or where the Adviser believes that not imposing or varying the additional Transaction Fee would be in the fund's interest. Transaction Fees associated with the redemption of Creation Units will not exceed 2% of the value of shares redeemed. To the extent the fund cannot recoup the amount of transaction costs incurred in connection with a redemption from the redeeming shareholder because of the 2% cap or otherwise, those transaction costs will be borne by the fund's remaining shareholders (including, potentially, increased taxable income in respect of the fund, particularly if the redemption consists solely or partially of cash) and negatively affect the fund's performance. Actual transaction costs may vary depending on the time of day an order is received or the nature of the securities. Investors bear the costs of transferring Deposit Securities or Fund Securities to/from each fund to/from their account or on their order. See "Creation/Redemption Transaction Fees" in Part I of this SAI for information on standard Transaction Fees and maximum additional Transaction Fees.

#### Additional Intermediary Payments
For purposes of this section the term "intermediary" includes any broker, dealer, bank, bank trust department, registered investment advisor, financial planner, retirement plan administrator and any other institution that offers shares of the funds to its customers.

The Investment Manager and/or its affiliates pay additional compensation to selected intermediaries under the categories described below. These categories are not mutually exclusive, and a single intermediary may receive payments under all categories. These payments may create an incentive for an intermediary firm or its representatives to recommend or offer shares of the fund or other Putnam funds to its customers. These additional payments are made pursuant to agreements with intermediaries and do not change the price paid by investors for the purchase of a share or the amount a fund will receive as proceeds from such sales or the distribution (12b-1) fees, if any, and the expenses paid by the fund as shown under the heading "Fees and Expenses" in the prospectus.

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**Marketing Support Payments.** The Investment Manager and/or its affiliates make payments to certain intermediaries for marketing support services. These payments are individually negotiated with each intermediary firm, taking into account the marketing support services provided by the intermediary, including business planning assistance, educating intermediary personnel about the Putnam funds and shareholder financial planning needs, placement on the intermediary's preferred or recommended fund company list, access to sales meetings, sales representatives and management representatives of the intermediary, market data, as well as the size of the intermediary's relationship with the Investment Manager.

No intermediaries received marketing support payments from the Investment Manager and its affiliates during the calendar year ended December 31, 2024. Intermediaries may receive marketing support payments in 2025 and in future years from the Investment Manager and/or its affiliates. You can ask your intermediary about any payments it receives from the Investment Manager and/or its affiliates.

**Program Servicing Payments.** The Investment Manager and/or its affiliates also make payments to certain intermediaries that sell shares of the Putnam funds through intermediary platforms and other investment programs to compensate intermediaries for a variety of services they provide. An intermediary may perform program services itself or may arrange with a third party to perform program services. In addition to shareholder recordkeeping, reporting, or transaction processing, program services may include services rendered in connection with intermediary platform development and maintenance, fund/investment selection and monitoring, or other similar services.

The following intermediaries (and such intermediaries' respective affiliates) received program servicing payments from the Investment Manager and its affiliates during the calendar year ended December 31, 2024:

Charles Schwab & Co., Inc.

Cetera Financial Group, Inc.

Fidelity Brokerage Services, LLC

National Financial Services LLC, and

UBS Financial Services Inc.

Additional or different intermediaries may also receive program servicing payments in 2025 and in future years from the Investment Manager and/or its affiliates. Any additions, modifications or deletions to the list of intermediaries identified above that have occurred since December 31, 2024 are not reflected. You can ask your intermediary about any payments it receives from the Investment Manager and/or its affiliates.

**Other Payments**. From time to time, the Investment Manager and/or its affiliate, at its expense, may provide additional compensation to intermediaries that sell or arrange for the sale of shares of the fund to the extent not prohibited by laws or the rules of any self-regulatory agency. Such compensation provided by the Investment Manager and/or its affiliate may include financial assistance to intermediaries that enables the Investment Manager and/or its affiliate to participate in and/or present at intermediary-sponsored conferences or seminars, sales or training programs for invited registered representatives and other intermediary employees, intermediary entertainment, and other intermediary-sponsored events, and travel expenses, including lodging incurred by registered representatives and other employees in connection with prospecting, retention and due diligence trips. The Investment Manager and/or its affiliates make payments for entertainment events it deems appropriate, subject to internal guidelines and applicable law. These payments may vary upon the nature of the event.

#### MISCELLANEOUS INVESTMENTS, INVESTMENT PRACTICES AND RISKS
As noted in the prospectus, in addition to the main investment strategies and the principal risks described in the prospectus, the fund may employ other investment practices and may be subject to other risks, which are described below. Because the following is a combined description of investment strategies of all series of Putnam ETF Trust that disclose their holdings daily, certain matters described herein may not apply to your fund. Unless a strategy or policy described below is specifically prohibited or limited by the investment restrictions discussed in the fund's prospectus or in this SAI, or by applicable law, the fund may engage in each of the practices described below without limit. This section contains information on the investments and investment practices listed below. With respect to funds for which Franklin Templeton Investment Management Limited ("FTIML"), Franklin Advisers, Putnam Management, and/or PanAgora Asset Management, Inc. ("PanAgora") serve as sub-

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adviser (as described in the fund's prospectus), references to the Investment Manager in this section include FTIML, Franklin Advisers, Putnam Management, and/or PanAgora, as appropriate.

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| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;Bank Loans, Loan Participations, and Assignments | Market Risk |
| &nbsp;&nbsp;&nbsp;Benchmark Reference Rate Risk | Master Limited Partnerships (MLPs) |
| &nbsp;&nbsp;&nbsp;Borrowing and Other Forms of Leverage | Money Market Instruments |
| &nbsp;&nbsp;&nbsp;Collateralized Debt and Loan Obligations | Mortgage-backed and Asset-backed Securities |
| &nbsp;&nbsp;&nbsp;Commodities and Commodity-Related Investments | Options on Securities |
| &nbsp;&nbsp;&nbsp;Derivatives | Preferred Stocks and Convertible Securities |
| &nbsp;&nbsp;&nbsp;ESG Considerations | Private Placements and Restricted Securities |
| &nbsp;&nbsp;&nbsp;Exchange-Traded Notes | Real Estate Investment Trusts (REITs) |
| &nbsp;&nbsp;&nbsp;Floating Rate and Variable Rate Demand Notes | Redeemable Securities |
| &nbsp;&nbsp;&nbsp;Foreign Currency Transactions | Repurchase Agreements |
| &nbsp;&nbsp;&nbsp;Foreign Investments and Related Risks | Securities of Other Investment Companies |
| &nbsp;&nbsp;&nbsp;Forward Commitments and Dollar Rolls | Short Sales |
| &nbsp;&nbsp;&nbsp;Futures Contracts and Related Options | Short-Term Trading |
| &nbsp;&nbsp;&nbsp;Hybrid Instruments | Special Purpose Acquisition Companies |
| &nbsp;&nbsp;&nbsp;Illiquid Investments | Structured Investments |
| &nbsp;&nbsp;&nbsp;Inflation-Protected Securities | Swap Agreements |
| &nbsp;&nbsp;&nbsp;Initial Public Offerings (IPOs) | Tax-exempt Securities |
| &nbsp;&nbsp;&nbsp;Inverse Floaters | Temporary Defensive Strategies |
| &nbsp;&nbsp;&nbsp;Large Shareholder Transaction Risk | Trade Policy |
| &nbsp;&nbsp;&nbsp;Legal and Regulatory Risks Relating to Investment Strategy | Warrants |
| &nbsp;&nbsp;&nbsp;Lower-rated Securities | Zero-coupon and Payment-in-kind Bonds |

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#### Bank Loans, Loan Participations, and Assignments
The fund may invest in bank loans. Bank loans are typically senior debt obligations of borrowers (issuers) and, as such, are considered to hold a senior position in the capital structure of the borrower. These may include loans that hold the most senior position, that hold an equal ranking with other senior debt, or loans that are, in the judgment of the Investment Manager, in the category of senior debt of the borrower. This capital structure position generally gives the holders of these loans a priority claim on some or all of the borrower's assets in the event of a default. Many loans are either partially or fully secured by the assets of the borrower, and some impose restrictive covenants which must be met by the borrower, although these covenants have become less common, and the terms of covenants have eroded, in recent years. Loans are typically made by a syndicate of banks, represented by an agent bank which has negotiated and structured the loan and which is responsible generally for collecting interest, principal, and other amounts from the borrower on its own behalf and on behalf of the other lending institutions in the syndicate, and for enforcing its and their other rights against the borrower. Each of the lending institutions, including the agent bank, lends to the borrower a portion of the total amount of the loan, and retains the corresponding interest in the loan.

By purchasing a loan, the fund acquires some or all of the interest of a bank or other lending institution in a loan to a particular borrower. The fund may acquire a loan interest directly by acting as a member of the original lending syndicate. The fund may also invest in a loan in other ways, including through novations, assignments and participating interests. In a novation, the fund assumes all of the rights of a lending institution in a loan, including the right to receive payments of principal and interest and other amounts directly from the borrower and to enforce its rights as a lender directly against the borrower. The fund assumes the position of a co-lender with other syndicate members. In an assignment, the fund purchases a portion of a lender's interest in a loan. In this case, the fund may be required generally to rely upon the assigning bank to demand payment and enforce its rights against the borrower, but would otherwise be entitled to all of such bank's rights in the loan. The fund may also purchase a participating interest in a portion of the rights of a lending institution in a loan. Participation interests typically result in a contractual relationship only with the lending institution, not with the borrower. In such case, the fund will be entitled to receive

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payments of principal, interest and premium, if any, but will not generally be entitled to enforce its rights directly against the agent bank or the borrower, and must rely for that purpose on the lending institution. In addition, with a participation interest, the fund generally will have no rights of set-off against the borrower, and the fund may not directly benefit from the collateral supporting the loan in which it has purchased the participation.

The fund's ability to receive payments of principal and interest and other amounts in connection with loan interests held by it will depend primarily on the financial condition of the borrower (and, in some cases, the lending institution from which it purchases the loan). Adverse changes in the creditworthiness of the borrower may affect the borrower's ability to pay principal and interest, and borrowers that are in bankruptcy or restructuring may never pay off their indebtedness, or may pay only a small fraction of the amount owed. The value of collateral, if any, securing a loan can decline, or may be insufficient to meet the borrower's obligations or difficult to liquidate. In addition, the fund's access to collateral may be limited by bankruptcy or other insolvency laws. The failure by the fund to receive scheduled interest or principal payments on a loan would adversely affect the income of the fund and would likely reduce the value of its assets, which would be reflected in a reduction in the fund's net asset value. Banks and other lending institutions generally perform a credit analysis of the borrower before originating a loan or participating in a lending syndicate. In selecting the loan interests in which the fund will invest, however, the Investment Manager will not rely solely on that credit analysis, but will perform its own investment analysis of the borrowers. The Investment Manager's analysis may include consideration of the borrower's financial strength and managerial experience, debt coverage, additional borrowing requirements or debt maturity schedules, changing financial conditions, and responsiveness to changes in business conditions and interest rates. The Investment Manager will generally not have access to non-public information to which other investors in syndicated loans may have access. Because loans in which the fund may invest are not generally rated by independent credit rating agencies, a decision by the fund to invest in a particular loan will depend almost exclusively on the Investment Manager's, and the original lending institution's, credit analysis of the borrower. Investments in loans may be of any quality, including "distressed" loans, and will be subject to the fund's credit quality policy. The loans in which the fund may invest include those that pay fixed rates of interest and those that pay floating rates –*i.e.*, rates that adjust periodically based on a known lending rate, such as a bank's prime rate.

The fund will in many cases be required to rely upon the lending institution from which it purchases the loan interest to collect and pass on to the fund such payments and to enforce the fund's rights under the loan. This may subject the fund to greater delays, expenses, and risks than if the fund could enforce its rights directly against the borrower. For example, an insolvency, bankruptcy or reorganization of the lending institution may delay or prevent the fund from receiving principal, interest and other amounts with respect to the underlying loan. When the fund is required to rely upon a lending institution to pay to the fund principal, interest and other amounts received by it, the Investment Manager will also evaluate the creditworthiness of the lending institution.

The borrower of a loan in which the fund holds an interest may, either at its own election or pursuant to terms of the loan documentation, prepay amounts of the loan from time to time. The rate of such prepayments may be affected by, among other things, general business and economic conditions, as well as the financial status of the borrower. Prepayment would cause the actual duration of a loan to be shorter than its stated maturity. There is no assurance that the fund will be able to reinvest the proceeds of any loan prepayment at the same interest rate or on the same terms as those of the original loan.

Corporate loans in which the fund may invest are generally made to finance internal growth, mergers, acquisitions, stock repurchases, leveraged buy-outs and other corporate activities. A significant portion of the corporate loan interests purchased by the fund may represent interests in loans made to finance highly leveraged corporate acquisitions, known as "leveraged buy-out" transactions, leveraged recapitalization loans and other types of acquisition financing. The highly leveraged capital structure of the borrowers in such transactions may make such loans especially vulnerable to adverse changes in economic or market conditions.

The market for bank loans may not be highly liquid. In addition, loan interests generally are subject to restrictions on transfer, and only limited opportunities may exist to sell such interests in secondary markets. As a result, the fund may be unable to sell loan interests at a time when it may otherwise be desirable to do so or may be able to sell them only at a price that is less than their fair market value. The fund may hold investments in loans for a very short period of time when opportunities to resell the investments that the Investment Manager believes are attractive arise.

Certain of the loan interests acquired by the fund may involve letters of credit, revolving credit facilities, or other standby financing commitments obligating the fund to make additional loans upon demand by the borrower pursuant to the terms specified in the loan documentation. This obligation may have the effect of requiring the fund to increase its investment in a

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borrower at a time when it would not otherwise have done so. To the extent that the fund is committed to make additional loans under the loan documentation, it will at all times set aside on its books liquid assets in an amount sufficient to meet such commitments.

Certain of the loan interests acquired by the fund may also involve loans made in foreign (*i.e*., non-U.S.) currencies. The fund's investment in such interests would involve the risks of currency fluctuations described in this SAI with respect to investments in the foreign securities.

With respect to its management of investments in bank loans, the Investment Manager will normally seek to avoid receiving material, non-public information ("Confidential Information") about the issuers of bank loans being considered for acquisition by the fund or held in the fund's portfolio. In many instances, borrowers may offer to furnish Confidential Information to prospective investors, and to holders, of the issuer's loans. The Investment Manager's decision not to receive Confidential Information may place the Investment Manager at a disadvantage relative to other investors in loans (which could have an adverse effect on the price the fund pays or receives when buying or selling loans). Also, in instances where holders of loans are asked to grant amendments, waivers or consent, the Investment Manager's ability to assess their significance or desirability may be adversely affected. For these and other reasons, it is possible that the Investment Manager's decision not to receive Confidential Information under normal circumstances could adversely affect the fund's investment performance.

Notwithstanding its intention generally not to receive material, non-public information with respect to its management of investments in loans, the Investment Manager may from time to time come into possession of material, non-public information about the issuers of loan interests that may be held in the fund's portfolio. Possession of such information may in some instances occur despite the Investment Manager's efforts to avoid such possession, but in other instances the Investment Manager may choose to receive such information (for example, in connection with participation in a creditors' committee with respect to a financially distressed issuer). As, and to the extent, required by applicable law, the Investment Manager's ability to trade in these loan interests for the account of the fund could potentially be limited by its possession of such information. Such limitations on the Investment Manager's ability to trade could have an adverse effect on the fund by, for example, preventing the fund from selling a loan interest that is experiencing a material decline in value. In some instances, these trading restrictions could continue in effect for a substantial period of time.

In some instances, other accounts managed by the Investment Manager or an affiliate may hold other securities issued by borrowers in whose loans the fund may hold an interest. These other securities may include, for example, debt securities that are subordinate to the loan interests held in the fund's portfolio, convertible debt or common or preferred equity securities. In certain circumstances, such as if the credit quality of the issuer deteriorates, the interests of holders of these other securities may conflict with the interests of the holders of the issuer's loans. In such cases, the Investment Manager may owe conflicting fiduciary duties to the fund and other client accounts. The Investment Manager will endeavor to carry out its obligations to all of its clients (including the fund) to the fullest extent possible, recognizing that in some cases certain clients may achieve a lower economic return, as a result of these conflicting client interests, than if the Investment Manager's client accounts collectively held only a single category of the issuer's securities.

The settlement period (the period between the execution of the trade and the delivery of cash to the purchaser) for some bank loan transactions may be significantly longer than the settlement period for other investments, and in some cases longer than seven days. Requirements to obtain the consent of the borrower and/or agent can delay or impede the fund's ability to sell bank loan interests and can adversely affect the price that can be obtained. It is possible that sale proceeds from bank loan transactions will not be available to meet redemption obligations, in which case the fund may be required to utilize other sources to meet the redemption obligations, such as cash balances or proceeds from the sale of its more liquid investments or investments with shorter settlement periods.

Some loan interests may not be considered "securities" for certain purposes under the federal securities laws, and, as a result, purchasers, such as the fund, may not be entitled to rely on the anti-fraud protections of the federal securities laws.

If legislation or federal or state regulators impose additional requirements or restrictions on the ability of financial institutions to make loans that are considered highly leveraged transactions, the availability of bank loans for investment by a fund may be adversely affected. In addition, such requirements or restrictions could reduce or eliminate sources of financing for certain borrowers. This would increase the risk of default. If legislation or federal or state regulators require financial institutions to dispose of bank loans that are considered highly leveraged transactions or subject such bank loans to increased regulatory

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scrutiny, financial institutions may determine to sell such bank loans. If a fund attempts to sell a bank loan at a time when a financial institution is engaging in such a sale, the price a fund could get for the bank loan may be adversely affected.

#### Benchmark Reference Rate Risk
Many debt securities, derivatives, and other financial instruments utilize benchmark or reference rates for variable interest rate calculations, including the Euro Interbank Offer Rate, Sterling Overnight Index Average Rate, and the Secured Overnight Financing Rate (each a "Reference Rate"). Instruments in which the fund invests may pay interest at floating rates based on such Reference Rates or may be subject to interest caps or floors based on such Reference Rates. The fund and issuers of instruments in which the fund invests may also obtain financing at floating rates based on such Reference Rates. The elimination of a Reference Rate or any other changes to or reforms of the determination or supervision of Reference Rates could have an adverse impact on the market for, or value of, any instruments or payments linked to those Reference Rates.

For example, some Reference Rates, as well as other types of rates and indices, are described as "benchmarks" and have been the subject of ongoing national and international regulatory reform, including under the European Union regulation on indices used as benchmarks in financial instruments and financial contracts (known as the "Benchmarks Regulation"). The Benchmarks Regulation has been enacted into United Kingdom law by virtue of the European Union (Withdrawal) Act 2018 (as amended), subject to amendments made by the Benchmarks (Amendment and Transitional Provision) (EU Exit) Regulations 2019 (SI 2019/657) and other statutory instruments. Following the implementation of these reforms, the manner of administration of benchmarks has changed and may further change in the future, with the result that relevant benchmarks may perform differently than in the past, the use of benchmarks that are not compliant with the new standards by certain supervised entities may be restricted, and certain benchmarks may be eliminated entirely. Such changes could cause increased market volatility and disruptions in liquidity for instruments that rely on or are impacted by such benchmarks. Additionally, there could be other consequences which cannot be predicted.

#### Borrowing and Other Forms of Leverage
The fund may borrow money to the extent permitted by its investment policies and restrictions and by Section 18 of the 1940 Act. When the fund borrows money, it must pay interest and other fees, which will reduce the fund's returns if such costs exceed the returns on the portfolio securities purchased or retained with such borrowings. In addition, if the fund makes additional investments while borrowings are outstanding, this may be considered a form of leverage.

Each fund has available an unsecured revolving credit facility (the "Global Credit Facility") that may be used as an additional source of liquidity to fund redemptions of shares. There can be no assurance that the Global Credit Facility will remain available to the fund generally or that any available credit under the Global Credit Facility will be available to the fund when the fund seeks to draw on the Global Credit Facility.

Leveraging tends to exaggerate the effect of any increase or decrease in the value of the fund's holding. When the fund borrows money or otherwise leverages its portfolio, the value of an investment in the fund will be more volatile and other investment risks will tend to be compounded. Leveraging also may require that the fund liquidate portfolio securities when it may not be advantageous to do so to satisfy its obligations. Leveraging may expose the fund to losses in excess of the amounts invested. Furthermore, if the fund uses leverage through purchasing derivative instruments, the fund has the risk that losses may exceed the net assets of the fund.

#### Collateralized Debt and Loan Obligations
The fund may invest in collateralized debt obligations ("CDOs"). CDOs are types of asset-backed securitized instruments and include collateralized loan obligations ("CLOs") and other similarly structured securities. Although certain CDOs may benefit from credit enhancement in the form of a senior-subordinate structure, overcollateralization or bond insurance, such enhancement may not always be present, and may fail to protect a fund against the risk of loss on default of the collateral. CDOs may charge management and administrative fees, which are in addition to those of a fund. CDOs may be less liquid than other types of securities.

The risks of an investment in a CDO largely depend on the type of underlying collateral securities and the tranche in which a fund invests. CDOs are subject to the typical risks associated with debt instruments and fixed income and/or asset-backed securities discussed elsewhere in the prospectus and in this SAI, including interest rate risk (which may be exacerbated if the

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interest rate payable on a structured financing changes based on multiples of changes in interest rates or inversely to changes in interest rates), prepayment risk, credit risk (including adverse credit spread moves), liquidity risk and market risk. CDOs carry additional risks including, but not limited to: (i) the possibility that distributions from collateral securities will not be adequate to make interest or other payments and one or more tranches may be subject to up to 100% loss of invested capital; (ii) the possibility that the quality of the collateral may decline in value or default, due to factors such as the availability of any credit enhancement, the level and timing of payments and recoveries on and the characteristics of the underlying receivables, loans, or other assets that are being securitized, remoteness of those assets from the originator or transferor, the adequacy of and ability to realize upon any related collateral, and the capability of the servicer of the securitized assets (particularly where the underlying collateral in a loan portfolio is not individually assessed prior to purchase); (iii) market and illiquidity risks affecting the price of a structured finance investment, if required to be sold, at the time of sale; and (iv) if the particular structured product is invested in a security in which a fund is also invested, this would tend to increase the fund's overall exposure to the credit of the issuer of such securities, at least on an absolute, if not on a relative basis. In addition, due to the complex nature of a CDO, an investment in a CDO may not perform as expected. An investment in a CDO also is subject to the risk that the issuer and the investors may interpret the terms of the instrument differently, giving rise to disputes.

A CLO is an obligation of a trust or other special purpose vehicle typically collateralized by a pool of loans, which may include, among others, domestic and foreign senior secured loans, senior unsecured loans, and subordinate corporate loans, including loans that may be rated below investment grade or equivalent unrated loans. CLOs may charge management and other administrative fees. Payments of principal and interest are passed through to investors in a CLO and divided into several tranches of rated debt securities, which vary in risk and yield, and typically at least one tranche of unrated subordinated securities, which may be debt or equity ("CLO Securities"). CLO Securities generally receive some variation of principal and/or interest installments and, with the exception of certain subordinated securities, bear different interest rates. If there are defaults or if a CLO's collateral otherwise underperforms, scheduled payments to senior tranches typically take priority over less senior tranches.

CLO Securities may be privately placed and thus subject to restrictions on transfer to meet securities law and other legal requirements. In the event that any fund does not satisfy certain of the applicable transfer restrictions at any time that it holds CLO Securities, it may be forced to sell the related CLO Securities and may suffer a loss on sale. CLO Securities may be considered illiquid investments in the event there is no secondary market for the CLO Securities. CLOs are also subject to the same risks associated with CDOs, as described above.

#### Commodities and Commodity-Related Investments
Some funds may gain exposure to commodity markets by investing in physical commodities or commodity-related instruments directly or indirectly. Such instruments include, but are not limited to, futures contracts, swaps, options, forward contracts, and structured notes and equities, debt securities, convertible securities, and warrants of issuers in commodity-related industries.

Commodity prices can be extremely volatile and may be directly or indirectly affected by many factors, including changes in overall market movements, real or perceived inflationary trends, commodity index volatility, changes in interest rates or currency exchange rates, population growth and changing demographics, war, and factors affecting a particular industry or commodity, such as drought, floods, or other weather conditions or natural disasters, livestock disease, trade embargoes, economic sanctions, competition from substitute products, transportation bottlenecks or shortages, insufficient storage capacity, fluctuations in supply and demand, tariffs, and international regulatory, political, and economic developments (*e.g.*, regime changes and changes in economic activity levels). In addition, some commodities are subject to limited pricing flexibility because of supply and demand factors, and others are subject to broad price fluctuations as a result of the volatility of prices for certain raw materials and the instability of supplies of other materials. Certain commodities (and related derivatives) are also susceptible to price declines due to factors such as supply surpluses caused by global events.

Actions of and changes in governments, and political and economic instability, in commodity-producing and -exporting countries may affect the production and marketing of commodities. In addition, commodity-related industries throughout the world are subject to greater political, environmental, and other governmental regulation than many other industries. Changes in government policies and the need for regulatory approvals may adversely affect the products and services of companies in the commodities industries. For example, the exploration, development, and distribution of coal, oil, and gas in the United States are subject to significant federal and state regulation, which may affect rates of return on coal, oil, and gas and the kinds of services that the federal and state governments may offer to companies in those industries. In addition, compliance with environmental and other safety regulations has caused many companies in commodity-related industries to incur production delays and

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significant costs. Government regulation also may impede the development of new technologies. The effect of future regulations affecting commodity-related industries cannot be predicted.

The value of commodity-related derivatives fluctuates based on changes in the values of the underlying commodity, commodity index, futures contract, or other economic variable to which they are related. Additionally, economic leverage will increase the volatility of these instruments as they may result in gains or losses greater than the amount invested in the instrument. See "Derivatives," "Forward Commitments and Dollar Rolls," "Futures Contracts and Related Options," "Hybrid Instruments," "Short Sales," "Structured Investments," "Swap Agreements" and "Warrants" herein for more information on the fund's investments in derivatives, including commodity-related derivatives such as swap agreements, commodity futures contracts, and options on commodity futures contracts.

#### Derivatives
Certain of the instruments in which the fund may invest, such as futures contracts, certain foreign currency transactions, options, warrants, hybrid instruments, forward contracts, swap agreements (including credit default swaps and credit default swap indexes) and structured investments, are considered to be "derivatives." Derivatives are financial instruments whose value depends upon, or is derived from, the value or other attributes of one or more underlying investments, pools of investments, indexes or currencies. Investments in derivatives may be applied toward meeting a requirement to invest in a particular kind of investment if the derivatives have economic characteristics similar to that investment.

The value of derivatives may move in unexpected ways due to unanticipated market movements, the use of leverage, imperfect correlation between the derivative instrument and the reference asset, or other factors, especially in unusual market conditions, and volatility in the value of derivatives could adversely impact the fund's returns, obligations and exposures. Derivatives may be difficult to value and may increase the fund's transactions costs. The successful use of derivatives depends on the ability to manage these sophisticated instruments. There is no assurance that the fund's use of derivative instruments will enable the fund to achieve its investment objective or that the Investment Manager will be able to predict correctly the direction of securities prices, interest rates, currency exchange rates and other economic factors.

The fund's use of derivatives may cause the fund to recognize higher amounts of short-term capital gains, which are generally taxed to individual shareholders at ordinary income tax rates, and higher amounts of ordinary income, and more generally may affect the timing, character and amount of a fund's distributions to shareholders. The fund's use of commodity-linked derivatives can be limited by the fund's intention to qualify as a "regulated investment company" under the Internal Revenue Code of 1986, as amended (the "Code") or bear adversely on the fund's ability to so qualify, as discussed in "Taxes" below.

The fund's use of certain derivatives may in some cases involve forms of financial leverage, which means they provide the fund with investment exposure greater than the value of the fund's investment in the derivatives. The use of leverage involves risk and may increase the volatility of the fund's net asset value.

In its use of derivatives, the fund may take both long positions (the values of which move in the same direction as the prices of the underlying investments, pools of investments, indexes or currencies), and short positions (the values of which move in the opposite direction from the prices of the underlying investments, pools of investments indexes or currencies). Short positions may involve greater risks than long positions, as the risk of loss may be theoretically unlimited (unlike a long position, in which the risk of loss may be limited to the amount invested). The fund may use derivatives that combine "long" and "short" positions in order to capture the difference between underlying investments, pools of investments, indexes or currencies.

Some derivative transactions are required to be centrally cleared and others are available for voluntary clearing. A party to a cleared derivative transaction is subject to the credit and counterparty risk of the clearing house and the clearing member through which it holds its cleared position. Credit risk of market participants with respect to derivatives that are centrally cleared is concentrated in a few clearing houses, and it is not clear how an insolvency proceeding of a clearing house would be conducted and what impact an insolvency of a clearing house would have on the financial system or on the fund's ability to exercise remedies. Also, the fund is subject to risk if it enters into a derivative transaction that is required to be cleared, and no clearing member is willing or able to clear the transaction on the fund's behalf.

Some derivative contracts may be privately negotiated in the over-the-counter market. These contracts also involve exposure to credit risk, since contract performance depends in part on the financial condition of the counterparty, and counterparty risk, since the counterparty may be unable or unwilling to perform its obligations under the contract for reasons unrelated to its financial

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condition, such as operational issues, business interruptions or contract disputes. If a privately negotiated over-the-counter contract calls for payments by the fund, the fund must be prepared to make the payments when due. If a counterparty's creditworthiness declines or the counterparty is otherwise unable or unwilling to perform its obligations under the contract, the fund may not receive payments owed under the contract, or the payments may be delayed and the value of the agreements with the counterparty may decline, potentially resulting in losses to the fund.

Derivatives also are subject to the risk that the fund may be delayed or prevented from recovering margin or other amounts deposited with a clearinghouse, futures commission merchant or other counterparty. If the fund has insufficient cash, it may have to sell securities to meet margin requirements at a time when it may be disadvantageous to do so.

Other risks arise from the potential inability to terminate or sell derivative positions. Derivatives may be subject to liquidity risk due to the fund's obligation to make payments of margin, collateral, or settlement payments to counterparties. A liquid secondary market may not always exist for the fund's derivative positions. In fact, certain over-the-counter instruments may be considered illiquid, and it may not be possible for the fund to liquidate a derivative position at an advantageous time or price, which may result in significant losses.

Legislation and regulation of derivatives in the U.S. and other countries, including margin, clearing, trading and reporting requirements, and leveraging and position limits, may make derivatives more costly and/or less liquid, limit the availability of certain types of derivatives, cause the fund to change its use of derivatives, or otherwise adversely affect a fund's use of derivatives.

The funds are required to comply with the derivatives rule when they engage in derivatives transactions. See "Legal and Regulatory Risks Relating to Investment Strategy" below. Further information about these instruments and the risks involved in their use is included elsewhere in the prospectus and in this SAI.

<u>Combined Positions</u> 

A fund may purchase and write options in combination with each other, or in combination with futures or forward contracts, options on futures contracts, indexed securities, swap agreements or other derivative instruments, to adjust the risk and return characteristics of its overall position. For example, a fund may purchase a put option and write a call option on the same underlying instrument, in order to construct a combined position whose risk and return characteristics are similar to selling a futures contract. Another possible combined position would involve writing a call option at one strike price and buying a call option at a lower price, in order to reduce the risk of the written call option in the event of a substantial price increase. Because combined options positions involve multiple trades, they result in higher transaction costs and may be more difficult to open and close out.

#### ESG Considerations
A fund may integrate environmental, social, or governance ("ESG") considerations into its research process and/or investment decision-making. The Investment Manager believes that ESG considerations, like other, more traditional subjects of investment analysis such as market position, growth prospects, and business strategy, have the potential to impact risk and returns. The relevance and materiality of ESG considerations in a fund's process will differ from strategy to strategy, from sector to sector, and from portfolio manager to portfolio manager, and, in some cases (such as where the Investment Manager lacks relevant ESG data), ESG considerations may not represent a material component of a fund's investment process. The consideration of ESG factors as part of a fund's investment process does not mean that a fund pursues a specific "ESG" or "sustainable" investment strategy, and, depending on the fund, the Investment Manager may sometimes make investment decisions other than on the basis of relevant ESG considerations.

#### Exchange-Traded Notes
The fund may invest in exchange-traded notes ("ETNs"). An ETN is a type of senior, unsecured, unsubordinated debt security whose returns are linked to the performance of a particular market index or other reference assets less applicable fees and expenses. ETNs are listed on an exchange and traded in the secondary market. Investors may hold the ETN until maturity, at which time the issuer is obligated to pay a return linked to the performance of the relevant market index less applicable fees and expenses. ETNs typically do not make periodic interest payments and principal typically is not protected.

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The market value of an ETN may be influenced by, among other things, time to maturity, level of supply and demand of the ETN, economic, legal, political or geographic events that affect the reference assets, volatility and lack of liquidity in the reference assets, changes in the applicable interest rates, the current performance of the market index to which the ETN is linked, and the credit rating of the ETN issuer. The market value of an ETN may differ from the performance of the applicable market index, and there may be times when an ETN trades at a premium or discount. This difference in price may be due to the fact that the supply and demand in the market for ETNs at any point in time is not always identical to the supply and demand in the market for the securities underlying the market index that the ETN seeks to track. A change in the issuer's credit rating may also impact the value of an ETN despite the underlying market index remaining unchanged.

ETNs are also subject to tax risk. No assurance can be given that the Internal Revenue Service (the "IRS") will accept, or a court will uphold, how the fund characterizes and treats ETNs for tax purposes.

An ETN that is tied to a specific market index may not be able to replicate and maintain exactly the composition and relative weighting of securities, commodities or other components in the applicable market index. ETNs also incur certain expenses not incurred by their applicable market index, and the fund would bear a proportionate share of any fees and expenses borne by the ETN in which it invests.

The fund's ability to sell its ETN holdings may be limited by the availability of a secondary market. In addition, although an ETN may be listed on an exchange, the issuer may not be required to maintain the listing, and there can be no assurance that a secondary market will exist for an ETN. Some ETNs that use leverage in an effort to amplify the returns of an underlying market index can, at times, be relatively illiquid and may therefore be difficult to purchase or sell at a fair price. Leveraged ETNs may offer the potential for greater return, but the potential for loss and speed at which losses can be realized also are greater. The extent of the fund's investment in commodity-linked ETNs, if any, is limited by tax considerations. For more information regarding the tax treatment of commodity-linked ETNs, please see "Taxes" below.

ETNs are generally similar to structured investments and hybrid instruments. For discussion of these investments and the risks generally associated with them, see "Hybrid Instruments" and "Structured Investments" in this SAI.

#### Floating Rate and Variable Rate Demand Notes
The fund may purchase taxable or tax-exempt floating rate and variable rate demand notes for short-term cash management or other investment purposes. Floating rate and variable rate demand notes are debt instruments that provide for periodic adjustments in the interest rate. The interest rate on these instruments may be reset daily, weekly or on some other reset period and may have a floor or ceiling on interest rate changes. The interest rate of a floating rate instrument may be based on a known lending rate, such as a bank's prime rate, and is reset whenever such rate is adjusted. The interest rate on a variable rate demand note is reset at specified intervals at a market rate.

Interest rate adjustments are designed to help stabilize the instrument's price or maintain a fixed spread to a predetermined benchmark. While this feature may protect against a decline in the instrument's market price when interest rates or benchmark rates rise, it lowers the fund's income when interest rates or benchmark rates fall. The fund's income from its floating rate and variable rate investments also may increase if interest rates rise. Floating rate and variable rate obligations are less effective than fixed rate instruments at locking in a particular yield. Nevertheless, such obligations may fluctuate in value in response to interest rate changes if there is a delay between changes in market interest rates and the interest reset date for the obligation, or for other reasons.

The fund's ability to receive payments of principal and interest and other amounts in connection with loans held by it will depend primarily on the financial condition of the issuer. The failure by the fund to receive scheduled interest or principal payments on a loan would adversely affect the income of the fund and would likely reduce the value of its assets, which would be reflected in a reduction in the fund's NAV.

Floating rate and variable rate demand notes and bonds may have a stated maturity in excess of one year, but may have features that permit a holder to demand payment of principal plus accrued interest upon a specified number of days' notice. Frequently, such obligations are secured by letters of credit or other credit support arrangements provided by banks. If these obligations are not secured by letters of credit or other credit support arrangements, the fund's right to demand payment will be dependent on the ability of the issuer to pay principal and interest on demand. In addition, these obligations frequently are not rated by credit rating agencies and may involve heightened risk of default by the issuer. The issuer of such obligations normally

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has a corresponding right, after a given period, to prepay in its discretion the outstanding principal of the obligation plus accrued interest upon a specific number of days notice to the holders. There is no assurance that the fund will be able to reinvest the proceeds of any prepayment at the same interest rate or on the same terms as those of the original instrument.

The absence of an active secondary market for floating rate and variable rate demand notes could make it difficult for the fund to dispose of the instruments, and the fund could suffer a loss if the issuer defaults or during periods in which the fund is not entitled to exercise its demand rights. When a reliable trading market for the floating rate and variable rate instruments held by the fund does not exist and the fund may not demand payment of the principal amount of such instruments within seven days, the instruments may be deemed illiquid and therefore subject to the fund's limitation on investments in illiquid securities.

#### Foreign Currency Transactions
The fund may engage in foreign currency exchange transactions, including purchasing and selling foreign currency, foreign currency options, foreign currency forward contracts and foreign currency futures contracts and related options. The fund may engage in these transactions for a variety of reasons, including to manage the exposure to foreign currencies inherent in the fund's investments, to increase its returns, and to offset some of the costs of hedging transactions. Foreign currency transactions involve costs, and, if unsuccessful, may reduce the fund's return.

Generally, the fund may engage in both "transaction hedging" and "position hedging" (e.g., the sale of forward currency with respect to portfolio security positions). The fund may also engage in foreign currency transactions for non-hedging purposes, subject to applicable law. When it engages in transaction hedging, the fund enters into foreign currency transactions with respect to specific receivables or payables, generally arising in connection with the fund's purchase or sale of portfolio securities. The fund will engage in transaction hedging when it desires to "lock in" the U.S. dollar price of a security it has agreed to purchase or sell, or the U.S. dollar equivalent of a dividend or interest payment in a foreign currency. By transaction hedging, the fund will attempt to protect itself against a possible loss resulting from an adverse change in the relationship between the U.S. dollar and the applicable foreign currency during the period between the date on which the security is purchased or sold, or on which the dividend or interest payment is earned, and the date on which such payments are made or received. The fund may also engage in position hedging, in which the fund enters into foreign currency transactions on a particular currency with respect to portfolio positions denominated or quoted in that currency. By position hedging, the fund attempts to protect against a decline in the value relative to the U.S. dollar of the currencies in which its portfolio securities are denominated or quoted (or an increase in the value of the currency in which securities the fund intends to buy are denominated or quoted). While such a transaction would generally offset both positive and negative currency fluctuations, such currency transactions would not offset changes in security values caused by other factors.

The fund may purchase or sell a foreign currency on a spot (*i.e.,* cash) basis at the prevailing spot rate in connection with the settlement of transactions in portfolio securities denominated in that foreign currency or for other hedging or non-hedging purposes. If conditions warrant, for hedging or non-hedging purposes, the fund may also enter into contracts to purchase or sell foreign currencies at a future date ("forward contracts") and purchase and sell foreign currency futures contracts. The fund may also purchase or sell exchange-listed and over-the-counter call and put options on foreign currency futures contracts and on foreign currencies.

A foreign currency futures contract is a standardized exchange-traded contract for the future delivery of a specified amount of a foreign currency at a price set at the time of the contract. Foreign currency futures contracts traded in the United States are designed by and traded on exchanges regulated by the Commodity Futures Trading Commission (the "CFTC"), such as the Chicago Mercantile Exchange, and have margin requirements.

A foreign currency forward contract is a negotiated agreement to exchange currency at a future time, which may be any fixed number of days from the date of the contract as agreed by the parties, at a price set at the time of the contract. The contract price may be higher or lower than the current spot rate. In the case of a cancelable forward contract, the holder has the unilateral right to cancel the contract at maturity by paying a specified fee. Forward foreign currency exchange contracts differ from foreign currency futures contracts in certain respects. For example, the maturity date of a forward contract may be any fixed number of days from the date of the contract agreed upon by the parties, rather than a predetermined date in a given month. Forward contracts may be in any amount agreed upon by the parties rather than predetermined amounts. In addition, forward contracts are traded in the interbank market conducted directly between currency traders (usually large commercial banks) and their customers, so that no intermediary is required. A forward contract generally has no deposit requirement, and no commissions are charged at any stage for trades.

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At the maturity of a forward or futures contract, the fund either may accept or make delivery of the currency specified in the contract or otherwise settle the contract, or at or prior to maturity enter into a closing transaction involving the purchase or sale of an offsetting contract. Closing transactions with respect to forward contracts are usually effected with the currency trader who is a party to the original forward contract. Closing transactions with respect to futures contracts may be effected only on a commodities exchange or board of trade which provides a market in such contracts; a clearing corporation associated with the exchange assumes responsibility for closing out such contracts.

Positions in foreign currency futures contracts and related options may be closed out only on an exchange or board of trade that provides a market in such contracts or options. Although the fund intends to purchase or sell foreign currency futures contracts and related options only on exchanges or boards of trade where there appears to be an active market, there is no assurance that a market on an exchange or board of trade will exist for any particular contract or at any particular time. In such event, it may not be possible to close a futures or related option position and, in the event of adverse price movements, the fund would continue to be required to make daily cash payments of variation margin on its futures positions.

The precise matching of the amounts of foreign currency exchange transactions and the value of the portfolio securities involved will not generally be possible since the future value of such securities in foreign currencies will change as a consequence of market movements in the value of those securities between the dates the currency exchange transactions are entered into and the dates they mature. It is also impossible to forecast with precision the market value of portfolio securities at the expiration or maturity of a forward or futures contract. Accordingly, it may be necessary for the fund to purchase additional foreign currency on the spot market (and bear the expense of such purchase) if the market value of the security or securities being hedged is less than the amount of foreign currency the fund is obligated to deliver and a decision is made to sell the security or securities and make delivery of the foreign currency. Conversely, it may be necessary to sell on the spot market some of the foreign currency received upon the sale of the portfolio security or securities if the market value of such security or securities exceeds the amount of foreign currency the fund is obligated to deliver.

As noted above, the fund may purchase or sell exchange-listed and over-the-counter call and put options on foreign currency futures contracts and on foreign currencies. A put option on a futures contract gives the fund the right to assume a short position in the futures contract until or at the expiration of the option. A put option on a currency gives the fund the right to sell the currency at an exercise price until or at the expiration of the option. A call option on a futures contract gives the fund the right to assume a long position in the futures contract until or at the expiration of the option. A call option on a currency gives the fund the right to purchase the currency at the exercise price until or at the expiration of the option.

Options on foreign currencies operate similarly to options on securities, and are traded primarily in the over-the-counter market, although options on foreign currencies are also listed on several exchanges. Options are traded not only on the currencies of individual nations, but also on the euro, the joint currency of most countries in the European Union.

The fund will only purchase or write foreign currency options when the Investment Manager believes that a liquid secondary market exists for such options. There can be no assurance that a liquid secondary market will exist for a particular option at any specific time. Options on foreign currencies may be affected by all of those factors which influence foreign exchange rates and investments generally.

The fund's currency hedging transactions may call for the delivery of one foreign currency in exchange for another foreign currency and may at times not involve currencies in which its portfolio securities are then denominated. The Investment Manager will engage in such "cross hedging" activities when it believes that such transactions provide significant hedging opportunities for the fund. Cross hedging transactions by the fund involve the risk of imperfect correlation between changes in the values of the currencies to which such transactions relate and changes in the value of the currency or other asset or liability which is the subject of the hedge.

Transaction and position hedging do not eliminate fluctuations in the underlying prices of the securities that the fund owns or intends to purchase or sell. They simply establish a rate of exchange which one can achieve at some future point in time. Additionally, although these techniques tend to minimize the risk of loss due to a decline in the value of the hedged currency, they involve costs to the fund and tend to limit any potential gain which might result from the increase in value of such currency.

The fund may also engage in non-hedging currency transactions. For example, the Investment Manager may believe that exposure to a currency is in the fund's best interest but that securities denominated in that currency are unattractive. In this situation, the fund may purchase a currency forward contract or option in order to increase its exposure to the currency.

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In addition, the fund may seek to increase its current return or to offset some of the costs of hedging against fluctuations in current exchange rates by writing covered call options and covered put options on foreign currencies. The fund receives a premium from writing a call or put option, which increases the fund's current return if the option expires unexercised or is closed out at a net profit. The fund may terminate an option that it has written prior to its expiration by entering into a closing purchase transaction in which it purchases an option having the same terms as the option written.

The value of any currency, including U.S. dollars and foreign currencies, may be affected by complex political and economic factors applicable to the issuing country. In addition, the exchange rates of foreign currencies (and therefore the values of foreign currency options, forward contracts and futures contracts and related options) may be affected significantly, fixed, or supported directly or indirectly by U.S. and foreign government actions. Government intervention may increase risks involved in purchasing or selling foreign currency options, forward contracts and futures contracts and related options, since exchange rates may not be free to fluctuate in response to other market forces. The value of a foreign currency option, forward contract or futures contract or related option reflects the value of an exchange rate, which in turn reflects relative values of two currencies — the U.S. dollar and the foreign currency in question. Although foreign exchange dealers do not charge a fee for currency conversion, they do realize a profit based on the difference (the "spread") between prices at which they are buying and selling various currencies. Thus, a dealer may offer to sell a foreign currency to the fund at one rate, while offering a lesser rate of exchange should the fund desire to resell that currency to the dealer. Because foreign currency transactions occurring in the interbank market involve substantially larger amounts than those that may be involved in the exercise of foreign currency options, forward contracts and futures contracts, the fund may be disadvantaged by having to deal in an odd-lot market for the underlying foreign currencies in connection with options at prices that are less favorable than for round lots. Foreign governmental restrictions or taxes could result in adverse changes in the cost of acquiring or disposing of foreign currencies.

There is no systematic reporting of last sale information for foreign currencies and there is no regulatory requirement that quotations available through dealers or other market sources be firm or revised on a timely basis. Available quotation information is generally representative of very large round-lot transactions in the interbank market and thus may not reflect exchange rates for smaller odd-lot transactions (less than $1 million) where rates may be less favorable. The interbank market in foreign currencies is a global, around-the-clock market. To the extent that options markets are closed while the markets for the underlying currencies remain open, significant price and rate movements may take place in the underlying markets that cannot be reflected in the options markets.

Numerous regulatory changes related to foreign currency transactions are expected to occur over time and could materially and adversely affect the ability of the fund to enter into foreign currency transactions or could increase the cost of foreign currency transactions. In the future, additional foreign currency transactions may be required to be subject to initial as well as variation margin requirements. Foreign currency transactions that are not centrally cleared are subject to the creditworthiness of the counterparty to the foreign currency transaction (usually large commercial banks), and their values may decline substantially if the counterparty's creditworthiness deteriorates. In a cleared foreign currency transaction, performance of the transaction will be effected by a central clearinghouse rather than by the original counterparty to the transaction. Foreign currency transactions that are centrally cleared will be subject to the creditworthiness of the clearing member and the clearing organization involved in the transaction.

The decision as to whether and to what extent the fund will engage in foreign currency exchange transactions will depend on a number of factors, including prevailing market conditions, the composition of the fund's portfolio and the availability of suitable transactions. There can be no assurance that suitable foreign currency transactions will be available for the fund at any time or that the fund will engage in foreign currency exchange transactions at any time or under any circumstances even if suitable transactions are available to it.

Successful use of currency management strategies will depend on the Investment Manager's skill in analyzing currency values. Currency management strategies may increase the volatility of the fund's returns and could result in significant losses to the fund if currencies do not perform as the Investment Manager anticipates. There is no assurance that the Investment Manager's use of currency management strategies will be advantageous to the fund or that it will hedge at appropriate times.

#### Foreign Investments and Related Risks
Foreign securities are normally denominated and traded in foreign currencies. As a result, the value of the fund's foreign investments and the value of its shares may be affected favorably or unfavorably by changes in currency exchange rates relative to the U.S. dollar. In addition, the fund is required to compute and distribute its income in U.S. dollars. Therefore, if the exchange

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rate for a foreign currency declines after a fund's income has been earned and translated into U.S. dollars (but before payment), the fund could be required to liquidate portfolio securities to make such distributions. Similarly, if an exchange rate declines between the time a fund incurs expenses in U.S. dollars and the time such expenses are paid, the amount of such currency required to be converted into U.S. dollars in order to pay such expenses in U.S. dollars will be greater than the equivalent amount in any such currency of such expenses at the time they were incurred.

There may be less information publicly available about a foreign issuer than about a U.S. issuer, and foreign issuers may not be subject to accounting, auditing, custody, disclosure and financial reporting standards and practices comparable to those in the United States. In addition, there may be less (or less effective) regulation of exchanges, brokers and listed companies in some foreign countries. The securities of some foreign issuers are less liquid and at times more volatile than securities of comparable U.S. issuers. Foreign brokerage commissions, custodial expenses and other fees are also generally higher than in the United States.

Foreign settlement procedures and trade regulations may be more complex and involve certain risks (such as delay in payment or delivery of securities or in the recovery of the fund's assets held abroad) and expenses not present in the settlement of investments in U.S. markets. For example, settlement of transactions involving foreign securities or foreign currencies (see below) may occur within a foreign country, and the fund may accept or make delivery of the underlying securities or currency in conformity with any applicable U.S. or foreign restrictions or regulations, and may pay fees, taxes or charges associated with such delivery. In addition, local market holidays or other factors may extend the time for settlement of purchases and sales of the fund's investments in securities that trade on foreign markets. Such investments may also involve the risk that an entity involved in the settlement may not meet its obligations. Extended settlement cycles or other delays in settlement may increase the fund's liquidity risk and require the fund to employ alternative methods (*e.g.*, through borrowings) to satisfy redemption requests during periods of large redemption activity in fund shares.

In addition, foreign securities may be subject to the risk of nationalization or expropriation of assets, imposition of economic sanctions or embargoes (whether imposed by the United States or another country or other governmental or non-governmental organization), currency exchange controls, foreign withholding or other taxes or restrictions on the repatriation of foreign currency, confiscatory taxation, political, social or financial instability and diplomatic developments which could affect the value of the fund's investments in certain foreign countries. Such actions could result in the devaluation of a country's currency or a decline in the value and liquidity of securities of issuers in that country. In some cases (including in the case of sanctions), such actions also could result in a freeze on an issuer's securities which would prevent the fund from selling securities it holds. Governments of many countries have exercised and continue to exercise substantial influence over many aspects of the private sector through the ownership or control of many companies, including some of the largest in these countries. As a result, government actions in the future could have a significant effect on economic conditions which may adversely affect prices of certain portfolio securities. There is also generally less government supervision and regulation of stock exchanges, brokers, and listed companies than in the United States. Moreover, foreign economies may differ favorably or unfavorably from the U.S. economy in such respects as growth of gross national product, rate of inflation, capital reinvestment, resource self-sufficiency and balance of payments position. Dividends or interest on, or proceeds from the sale of, foreign securities may be subject to foreign withholding or other taxes, and special U.S. tax considerations may apply.

*Note on MSCI indices.* Due to the potential for foreign withholding taxes, MSCI, Inc. (MSCI) publishes two versions of its indices reflecting the reinvestment of dividends using two different methodologies: gross dividends and net dividends. While both versions reflect reinvested dividends, they differ with respect to the manner in which taxes associated with dividend payments are treated. In calculating the net dividends version, MSCI incorporates reinvested dividends applying the withholding tax rate applicable to foreign non-resident institutional investors that do not benefit from double taxation treaties. The Investment Manager believes that the net dividends version of MSCI indices better reflects the returns U.S. investors might expect were they to invest directly in the component securities of an MSCI index.

Many foreign countries are heavily dependent upon exports, particularly to developed countries, and, accordingly, have been and may continue to be adversely affected by trade barriers, managed adjustments in relative currency values, and other protectionist measures imposed or negotiated by the United States and other countries with which they trade. These economies also have been and may continue to be negatively impacted by economic conditions in the United States and other trading partners, which can lower the demand for goods produced in those countries.

Legal remedies available to investors in certain foreign countries may be more limited than those available with respect to investments in the United States or in other foreign countries. The laws of some foreign countries may limit the fund's ability to

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invest in securities of certain issuers organized under the laws of those foreign countries. These restrictions may take the form of prior governmental approval requirements, limits on the amount or type of securities held by foreigners and limits on the types of companies in which foreigners may invest (*e.g.*, limits on investment in certain industries). Some countries also limit the investment of foreign persons to only a specific class of securities of an issuer that may have less advantageous terms or rights or preferences than securities of the issuer available for purchase by domestic parties (and such securities may be less liquid than other classes of securities of an issuer), or may directly limit foreign investors' rights (such as voting rights). Although securities subject to such restrictions may be marketable abroad, they may be less liquid than foreign securities of the same class that are not subject to such restrictions. Foreign laws may also impact the availability of derivatives or hedging techniques relating to a foreign country's government securities. In each of these situations, the funds' ability to invest significantly in desired issuers, or the terms of such investments, could be negatively impacted as a result of the relevant legal restriction. Sanctions imposed by the United States government on other countries or persons or issuers operating in such countries could restrict the fund's ability to buy affected securities or to sell any affected securities it has previously purchased, which may subject the fund to greater risk of loss in those securities. Foreign countries may have reporting requirements with respect to the ownership of securities, and those reporting requirements may be subject to interpretation or change without prior notice to investors. No assurance can be given that the fund will satisfy applicable foreign reporting requirements at all times.

For purposes of some foreign holding limits or disclosure thresholds, all positions owned or controlled by the same person or entity, even if in different accounts, may be aggregated for purposes of determining whether the applicable limits or thresholds have been exceeded. Thus, even if the fund does not intend to exceed applicable limits, it is possible that different clients managed by the Investment Manager and its affiliates may be aggregated for this purpose. These limits may adversely affect the fund's ability to invest in the applicable security.

The risks described above, including the risks of nationalization or expropriation of assets, typically are increased in connection with investments in developing countries, also known as "emerging markets." For example, political and economic structures in these countries may be in their infancy and developing rapidly, and such countries may lack the social, political and economic stability characteristic of more developed countries. In such a dynamic environment, there can be no assurance that any or all of these capital markets will present viable investment opportunities for the fund. Certain of these countries have in the past failed to recognize private property rights and have at times nationalized and expropriated the assets of private companies. In such an event, it is possible that the fund could lose the entire value of its investments in the affected market. High rates of inflation or currency devaluations may adversely affect the economies and securities markets of such countries. In addition, the economies of certain developing or emerging market countries may be dependent on a single industry or limited group of industries, which may increase the risks described above and make those countries particularly vulnerable to global economic and market changes. Investments in emerging markets may be considered speculative.

The currencies of certain emerging market countries have experienced devaluations relative to the U.S. dollar, and future devaluations may adversely affect the value of assets denominated in such currencies. Many emerging market countries have experienced substantial, and in some periods extremely high, rates of inflation for many years, and future inflation may adversely affect the economies and securities markets of such countries. When debt and similar obligations issued by foreign issuers are denominated in a currency (*e.g.*, the U.S. dollar or the Euro) other than the local currency of the issuer, the subsequent strengthening of the non-local currency against the local currency will generally increase the burden of repayment on the issuer and may increase significantly the risk of default by the issuer.

In addition, unanticipated political or social developments may affect the value of investments in emerging markets and the availability of additional investments in these markets. The small size, limited trading volume and relative inexperience of the securities markets in these countries may make investments in securities traded in emerging markets illiquid and more volatile than investments in securities traded in more developed countries, and the fund may be required to establish special custodial or other arrangements before making investments in securities traded in emerging markets. There may be little financial or accounting information available with respect to issuers of emerging market securities, and it may be difficult as a result to assess the value or prospects of an investment in such securities. In certain countries with emerging capital markets, reporting standards vary widely. As a result, traditional investment measurements used in the United States, such as price/earnings ratios, may not be applicable.

Practices in relation to settlement of securities transactions in emerging markets involve higher risks than those in developed markets, in part because the fund may need to use brokers and counterparties that are less well capitalized, and custody and registration of assets in some countries may be unreliable. The possibility of fraud, negligence, undue influence being exerted by the issuer, or refusal to recognize ownership exists in some emerging markets, and, along with other factors, could result in

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ownership registration being completely lost. The fund would absorb any loss resulting from such registration problems and may have no successful claim for compensation.

American Depositary Receipts ("ADRs") as well as other "hybrid" forms of ADRs, including European Depositary Receipts ("EDRs") and Global Depositary Receipts ("GDRs"), are certificates evidencing ownership of shares of a foreign issuer. These certificates are issued by depository banks and generally trade on an established market in the United States or elsewhere. The underlying shares are held in trust by a custodian bank or similar financial institution in the issuer's home country. The depository bank may not have physical custody of the underlying securities at all times and may charge fees for various services, including forwarding dividends and interest and corporate actions. ADRs are alternatives to directly purchasing the underlying foreign securities in their national markets and currencies. However, ADRs continue to be subject to many of the risks associated with investing in foreign securities.

Certain of the foregoing risks may also apply to some extent to securities of U.S. issuers that are denominated in foreign currencies or that are traded in foreign markets, or securities of U.S. issuers having significant foreign operations or other exposure to foreign markets. If the fund invests in securities issued by foreign issuers, the fund may be subject to the risks described above even if all of the fund's investments are denominated in U.S. dollars, especially with respect to issuers whose revenues are principally earned in a foreign currency but whose debt obligations have been issued in U.S. dollars or other hard currencies.

**Investing through Stock Connect.** The fund may, directly or indirectly (through, for example, participation notes or other types of equity-linked notes), purchase shares in mainland China-based companies that trade on Chinese stock exchanges such as the Shanghai Stock Exchange and the Shenzhen Stock Exchange ("China A-Shares") through the Shanghai-Hong Kong Stock Connect ("Stock Connect"), or that may be available in the future through additional stock connect programs, a mutual market access program designed to, among other things, enable foreign investment in the People's Republic of China ("PRC") via brokers in Hong Kong.

There are significant risks inherent in investing in China A-Shares through Stock Connect. The underdeveloped state of PRC's investment and banking systems subjects the settlement, clearing, and registration of China A-Shares transactions to heightened risks. Stock Connect can only operate when both PRC and Hong Kong markets are open for trading and when banking services are available in both markets on the corresponding settlement days. As such, if either or both markets are closed on a U.S. trading day, the fund may not be able to dispose of its China A-Shares in a timely manner, which could adversely affect the fund's performance. Because Stock Connect is relatively new, its effects on the market for trading China A-shares are uncertain. In addition, the trading, settlement and information technology ("IT") systems required to operate Stock Connect are relatively new and continuing to evolve. In the event that the relevant systems do not function properly, trading through Stock Connect could be disrupted.

PRC regulations require that, in order to sell its China A-Shares, the fund must pre-deliver the China A-Shares to a broker. If the China A-Shares are not in the broker's possession before the market opens on the day of sale, the sell order will be rejected. This requirement could also limit the fund's ability to dispose of its China A-Shares purchased through Stock Connect in a timely manner. Additionally, Stock Connect is subject to daily quota limitations on purchases of China A Shares. Once the daily quota is reached, orders to purchase additional China A-Shares through Stock Connect will be rejected. The fund's investment in China A-Shares may only be traded through Stock Connect and is not otherwise transferable. Stock Connect utilizes an omnibus clearing structure, and the fund's shares will be registered in its custodian's name on the Central Clearing and Settlement System. This may limit the ability of the Investment Manager to effectively manage the fund, and may expose the fund to the credit risk of its custodian or to greater risk of expropriation. Investment in China A-Shares through Stock Connect may be available only through a single broker that is an affiliate of the fund's custodian, which may affect the quality of execution provided by such broker. Stock Connect restrictions could also limit the ability of the fund to sell its China A-Shares in a timely manner, or to sell them at all. Further, different fees, costs and taxes are imposed on foreign investors acquiring China A-Shares acquired through Stock Connect, and these fees, costs and taxes may be higher than comparable fees, costs and taxes imposed on owners of other securities providing similar investment exposure.

Stock Connect trades are settled in Renminbi ("RMB"), the official currency of PRC, and investors must have timely access to a reliable supply of RMB in Hong Kong, which cannot be guaranteed.

**Investing through Bond Connect:** Chinese debt instruments trade on the China Interbank Bond Market ("CIBM") and may be purchased through a market access program that is designed to, among other things, enable foreign investment in the PRC

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("Bond Connect"). There are significant risks inherent in investing in Chinese debt instruments, similar to the risks of investing in other fixed-income securities in emerging markets. The prices of debt instruments traded on the CIBM may fluctuate significantly due to low trading volume and potential lack of liquidity. The rules to access debt instruments that trade on the CIBM through Bond Connect are relatively new and subject to change, which may adversely affect the fund's ability to invest in these instruments and to enforce its rights as a beneficial owner of these instruments. Trading through Bond Connect is subject to a number of restrictions that may affect the fund's investments and returns. In addition, securities offered through Bond Connect may lose their eligibility for trading through the program at any time. If Bond Connect securities lose their eligibility for trading through the program, they may be sold but can no longer be purchased through Bond Connect. There can be no assurance as to the program's continued existence or whether future developments regarding the program may restrict or adversely affect the fund's investments or returns.

Investments made through Bond Connect are subject to order, clearance and settlement procedures that are relatively untested in China, which could pose risks to the fund. CIBM does not support all trading strategies (such as short selling) and investments in Chinese debt instruments that trade on the CIBM are subject to the risks of suspension of trading without cause or notice, trade failure or trade rejection and default of securities depositories and counterparties. Furthermore, Chinese debt instruments purchased via Bond Connect will be held via a book entry omnibus account in the name of the Hong Kong Monetary Authority Central Money Markets Unit ("CMU") maintained with a China-based depository (either the China Central Depository & Clearing Co. ("CDCC") or the Shanghai Clearing House ("SCH")). The fund's ownership interest in these Chinese debt instruments will not be reflected directly in book entry with CDCC or SCH and will instead only be reflected on the books of the fund's Hong Kong sub-custodian. Therefore, the fund's ability to enforce its rights as a bondholder may depend on CMU's ability or willingness as record-holder of the bonds to enforce the fund's rights as a bondholder. Additionally, the omnibus manner in which Chinese debt instruments are held could expose the fund to the credit risk of the relevant securities depositories and the fund's Hong Kong sub-custodian. While the fund holds a beneficial interest in the instruments it acquires through Bond Connect, the mechanisms that beneficial owners may use to enforce their rights are untested. In addition, courts in China have limited experience in applying the concept of beneficial ownership. Moreover, Chinese debt instruments acquired through Bond Connect generally may not be sold, purchased or otherwise transferred other than through Bond Connect in accordance with applicable rules.

The fund's investments in Chinese debt instruments acquired through Bond Connect are generally subject to a number of regulations and restrictions, including Chinese securities regulations and listing rules, loss recovery limitations and disclosure of interest reporting obligations. The fund will not benefit from access to Hong Kong investor compensation funds, which are set up to protect against defaults of trades, when investing through Bond Connect.

Bond Connect can only operate when both China and Hong Kong markets are open for trading and when banking services are available in both markets on the corresponding settlement days. In addition, the trading, settlement and IT systems required for non-Chinese investors in Bond Connect are relatively new. In the event of systems malfunctions or extreme market conditions, trading via Bond Connect could be disrupted. The rules applicable to taxation of Chinese debt instruments acquired through Bond Connect remain subject to further clarification. Uncertainties in the Chinese tax rules governing taxation of income and gains from investments via Bond Connect could result in unexpected tax liabilities for the fund, which may negatively affect investment returns for shareholder.

Bond Connect trades are settled in RMB, and investors must have timely access to a reliable supply of RMB in Hong Kong, which cannot be guaranteed.

#### Forward Commitments and Dollar Rolls
The fund may enter into contracts to purchase securities for a fixed price at a future date beyond customary settlement time ("forward commitments"). In the case of to-be-announced ("TBA") purchase commitments, the unit price and the estimated principal amount are established when the fund enters into a contract, with the actual principal amount being within a specified range of the estimate. Forward commitments may be considered securities in themselves, and involve a risk of loss if the value of the security to be purchased declines prior to the settlement date, which risk is in addition to the risk of decline in the value of the fund's other assets. Where such purchases are made through dealers, the fund relies on the dealer to consummate the sale. The dealer's failure to do so may result in the loss to the fund of an advantageous yield or price. Although the fund will generally enter into forward commitments with the intention of acquiring securities for its portfolio or for delivery pursuant to options contracts it has entered into, the fund may dispose of a commitment prior to settlement if the Investment Manager deems it appropriate to do so. The fund may realize short-term profits or losses upon the sale of forward commitments.

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The fund may enter into TBA sale commitments to hedge its portfolio positions, to sell securities it owns under delayed delivery arrangements, or to take a short position in mortgage-backed securities. Proceeds of TBA sale commitments are not received until the contractual settlement date. If the TBA sale commitment is closed through the acquisition of an offsetting purchase commitment, the fund realizes a gain or loss on the commitment without regard to any unrealized gain or loss on the underlying security. If the fund delivers securities under the commitment, the fund realizes a gain or loss from the sale of the securities based upon the unit price established at the date the commitment was entered into.

The fund may enter into dollar roll transactions (generally using TBAs) in which it sells a fixed income security for delivery in the current month and simultaneously contracts to purchase similar securities (for example, same type, coupon and maturity) at an agreed upon future time. By engaging in a dollar roll transaction, the fund foregoes principal and interest paid on the security that is sold while the dollar roll is outstanding, but receives the difference between the current sales price and the forward price for the future purchase. In addition, the fund may reinvest the cash proceeds of the sale while the dollar roll is outstanding in an effort to enhance returns. The reinvestment of such proceeds may be considered a form of investment leverage and may increase the fund's risk and volatility. If the income and capital gains from the investment of the cash from the initial sale do not exceed the income, capital appreciation and gain or loss that would have been realized on the securities sold as part of the dollar roll, the use of this technique will result in a lower return than would have been realized without the use of the dollar rolls. The fund accounts for dollar rolls as purchases and sales.

Purchases of securities on a forward commitment basis may involve more risk than other types of purchases. The obligation to purchase securities on a specified future date involves the risk that the market value of the securities that the fund is obligated to purchase may decline below the purchase price. In addition, when entering into a forward commitment transaction, the fund will rely on the other party to consummate the transaction. In the event that the other party files for bankruptcy, becomes insolvent or defaults on its obligation, the fund may be adversely affected. For example, the other party's failure to complete the transaction may result in the loss to the fund of an advantageous yield or price. See also "Legal and Regulatory Risks Relating to Investment Strategy" below.

#### Futures Contracts and Related Options
Subject to applicable law, the fund may invest in futures contracts and related options for hedging and non-hedging purposes, such as to manage the effective duration of the fund's portfolio or as a substitute for direct investment. A futures contract sale creates an obligation by the seller to sell the type of financial instrument or other asset called for in the contract in a specified month for a stated price. A futures contract purchase creates an obligation by the purchaser to buy the type of financial instrument or other asset called for in the contract in a specified month at a stated price. The specific assets bought or sold, respectively, at settlement date may not be determined until on or near that date. The determination is made in accordance with the rules of the exchange on which the futures contract sale or purchase was made. Futures contracts are traded in the United States only on commodity exchanges or boards of trade — known as "contract markets" — approved for such trading by the CFTC, and must be executed through a futures commission merchant (brokerage firm) which is a member of the relevant contract market. Examples of futures contracts that the fund may use include, without limitation, U.S. Treasury futures, index futures, corporate or municipal bond futures, U.S. Government agency futures, interest rate futures, commodities futures, futures contracts on sovereign debt, and Eurodollar futures. In addition, as described elsewhere in this SAI, the fund may use foreign currency futures.

The value of a futures contract tends to increase and decrease in tandem with the value of its underlying asset. Therefore, purchasing futures contracts will tend to increase the fund's exposure to positive and negative price fluctuations in the underlying asset, much as if it had purchased the underlying asset directly. When the fund sells a futures contract, by contrast, the value of its futures position will tend to move in a direction contrary to the market for the underlying asset. Selling futures contracts, therefore, will tend to offset both positive and negative market price changes, much as if the underlying asset had been sold.

When the fund enters into a futures contract, the fund is required to deliver to the futures broker an amount of liquid assets known as "initial margin." The nature of initial margin in futures transactions is different from that of margin in security transactions in that futures contract margin does not involve the borrowing of funds to finance the transactions. Rather, initial margin is similar to a performance bond or good faith deposit in that it is returned to the fund upon termination of the futures contract, assuming all contractual obligations have been satisfied. Initial margin requirements are established by the exchanges on which futures contracts trade and by the fund's broker and may, from time to time, change. Futures contracts also involve brokerage costs. Subsequent payments, called "variation margin" or "maintenance margin," to and from the broker are made on a daily basis as the value of the futures contract fluctuates, a process known as "marking to the market." For example, if the fund

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purchases a futures contract on an underlying security and the price of that security rises, the value of the futures contract will increase and the fund will receive from the broker a variation margin payment based on that increase in value. Conversely, if the price of the underlying security declines, the value of the futures contract will decrease and the fund will be required to make a variation margin payment to the broker based on that decrease in value. Upon the closing of a futures contract, the fund will receive or be required to pay additional cash based on a final determinations of variation margin.

Although futures contracts by their terms may call for actual delivery or acceptance of commodities or securities, in most cases the contracts are closed out before the settlement date without the making or taking of delivery. Many futures contracts, such as index futures and futures based on the volatility or variance experienced by an index do not call for actual delivery or acceptance of commodities or securities, but instead require cash settlement of the futures contract on the settlement date specified in the contract. Such contracts may also be closed out before the settlement date. The fund may close some or all of its futures positions at any time prior to their expiration. Closing out a futures contract sale is effected by purchasing a futures contract for the same aggregate amount of the specific type of financial instrument or commodity with the same settlement date. If the price of the initial sale of the futures contract exceeds the price of the offsetting purchase, the seller is paid the difference and realizes a gain. Conversely, if the price of the offsetting purchase exceeds the price of the initial sale, the seller realizes a loss. If the fund is unable to enter into a closing transaction, the amount of the fund's theoretical loss is unlimited. The closing out of a futures contract purchase is effected by the purchaser's entering into a futures contract sale. If the offsetting sale price exceeds the purchase price, the purchaser realizes a gain, and if the purchase price exceeds the offsetting sale price, he realizes a loss. Such closing transactions involve additional commission costs.

A portion of any capital gains from futures contracts in which the fund invests directly will be treated for federal income tax purposes as short-term capital gains that, when distributed to taxable shareholders, will be taxable as ordinary income. The fund's investments in futures may cause the fund to recognize income without receiving cash with which to make the distributions necessary to qualify and be eligible for treatment as a regulated investment company and avoid a fund-level tax. The fund may therefore need to liquidate other investments, including when it is not advantageous to do so, to meet its distribution requirement.

With respect to each fund, the Investment Manager has claimed an exclusion from the definition of the term "commodity pool operator" under the Commodity Exchange Act ("CEA") pursuant to Rule 4.5 under the CEA (the "exclusion") promulgated by the CFTC. Accordingly, the Investment Manager (with respect to these funds) is not subject to registration or regulation as a "commodity pool operator" under the CEA. To remain eligible for the exclusion, each of these funds will be limited in its ability to use certain financial instruments regulated under the CEA ("commodity interests"), including futures, options on futures and certain swaps. In the event that the Investment Manager believes that a fund's investments in commodity interests exceed the thresholds set forth in the exclusion, the Investment Manager may be required to register as a "commodity pool operator" with the CFTC with respect to that fund. The Investment Manager's eligibility to claim the exclusion with respect to a fund will be based upon, among other things, the level and scope of the fund's investment in commodity interests, the purposes of such investments and the manner in which the fund holds out its use of commodity interests. A fund's ability to invest in commodity interests is limited by the Investment Manager's intention to operate the fund in a manner that would permit the Investment Manager to continue to claim the exclusion under Rule 4.5, which may adversely affect the fund's total return. In the event the fund's investments in commodity interests require the Investment Manager to register with the CFTC as a commodity pool operator with respect to a fund, the fund's expenses may increase, adversely affecting that fund's total return, and the commodity pool operators ("CPOs") of any shareholders that are pooled investment vehicles may be unable to rely on certain CPO registration exemptions.

**Index futures**. An index futures contract is a contract to buy or sell units of an index at a specified future date at a price agreed upon when the contract is made. Entering into a contract to buy units of an index is commonly referred to as buying or purchasing a contract or holding a long position in the index. Entering into a contract to sell units of an index is commonly referred to as selling a contract or holding a short position. A unit is the current value of the index. The fund may enter into stock index futures contracts, debt index futures contracts, or other index futures contracts appropriate to its objective(s). The fund may also purchase and sell options on index futures contracts.

For example, the Standard & Poor's 500 Composite Stock Price Index ("S&P 500") is composed of 500 selected U.S. common stocks. The S&P 500 assigns relative weightings to the common stocks that comprise the index, and the value of the index fluctuates with changes in the market values of those common stocks. The stock index futures contract specifies that no delivery of the actual stocks making up the index will take place. Instead, settlement in cash must occur upon the termination of the contract, with the settlement being the difference between the contract price and the actual level of the stock index at the expiration of the contract. For example, if the fund enters into a futures contract to buy 250 units of the S&P 500 at a specified

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future date at a contract price of $150 and the S&P 500 is at $154 on that future date, the fund will gain $1,000 (250 units x gain of $4). If the fund enters into a futures contract to sell 250 units of the stock index at a specified future date at a contract price of $150 and the S&P 500 is at $152 on that future date, the fund will lose $500 (250 units x loss of $2).

**Options on futures contracts.** The fund may purchase and write call and put options on futures contracts it may buy or sell and enter into closing transactions with respect to such options to terminate existing positions. Options on futures contracts possess many of the same characteristics as options on securities and indices. An option on a futures contract gives the holder the right, in return for the premium paid to assume a long position (call) or short position (put) in a futures contract at a specified exercise price at any time during the period of the option (in the case of an American-style option) or on the expiration date (in the case of European-style option). After selling a put or call option on a futures contract, the fund will be required to deposit initial margin and variation margin as described above for futures contracts.

When a call option on a futures contract is exercised, the holder acquires a long position in the futures contract and the writer is assigned the opposite short position. When a put option on a futures contract is exercised, the holder acquires a short position in the futures contract and the writer is assigned the opposite long position. When an option is exercised, the delivery of the futures position by the writer of the option to the holder of the option will be accompanied by delivery of the accumulated balance in the writer's futures margin account, which represents the amount by which the market price of the futures contract, at exercise, exceeds (in the case of a call) or is less than (in the case of a put) the exercise price of the option on the future. If an option is exercised on the last trading day prior to its expiration date, the settlement will be made entirely in cash equal to the difference between the exercise price of the option and the closing level of the underlying asset on which the future is based on the expiration date. Purchasers of options who fail to exercise their options prior to the exercise date suffer a loss of the premium paid. The holder or writer of an option on a futures contract may terminate its position by selling or purchasing an offsetting option on the same financial instrument (subject to the availability of a liquid market).

The fund may use options on futures contracts in lieu of purchasing or writing options directly on the underlying assets or purchasing and writing the underlying futures contracts. For example, to hedge against a possible decrease in the value of its portfolio securities, the fund may purchase put options or write call options on futures contracts rather than selling futures contracts. Similarly, the fund may purchase call options or write put options on futures contracts as a substitute for the purchase of futures contracts to hedge against a possible increase in the price of securities that the fund expects to purchase. Such options generally operate in the same manner, and involve the same risks, as options purchased or written directly on the underlying investments. As an alternative to purchasing or writing call and put options on index futures, the fund may purchase and write call and put options on the underlying indices themselves. Such options would be used in a manner identical to the use of options on index futures.

Compared to the purchase or sale of futures contracts, the purchase of call or put options on futures contracts generally involves less potential risk to the fund because the maximum amount at risk is the premium paid for the options (plus transaction costs). However, there may be circumstances when the purchase of a call or put option on a futures contract would result in a loss to the fund when the purchase or sale of a futures contract would not (or would result in a smaller loss), such as when there is no movement in the prices of the hedged investments.

The writing of an option on a futures contract involves risks similar to those relating to the purchase or sale of futures contracts (which are described below). In addition, by writing a call option, the fund becomes obligated to sell a futures contract if the option is exercised, which may have a value higher than the exercise price. Similarly, by writing a put option, the fund becomes obligated to purchase a futures contract if the option is exercised, which may have a value lower than the exercise price. The writing of an option on a futures contract generates a premium, which may partially offset an increase (in the case of a written call option) or decrease (in the case of a written put option) in the value of the underlying futures contract. However, the loss incurred by the fund in writing options on futures contracts is potentially unlimited and may exceed the amount of the premium received. The fund will also incur transaction costs in connection with the writing of options on futures contracts.

**Risks of transactions in futures contracts and related options.** Successful use of futures contracts and options on futures contracts by the fund is subject to the Investment Manager's ability to predict movements in various factors affecting securities markets (or markets for other assets), including interest rates and market movements, and, in the case of index futures and futures based on the volatility or variance experienced by an index, the Investment Manager's ability to predict the future level of the index or the future volatility or variance experienced by an index. For example, it is possible that, where the fund has sold futures contracts to hedge its portfolio against a decline in the market, the index on which the futures contracts are written may advance and the value of securities held in the fund's portfolio, which may differ from those that comprise the index, may decline.

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If this occurred, the fund would lose money on the futures contracts and experience a decline in value in its portfolio securities. It is also possible that, if the fund has hedged against the possibility of a decline in the market adversely affecting securities held in its portfolio and securities prices increase instead, the fund will lose part or all of the benefit of the increased value of those securities it has hedged because it will have offsetting losses in its futures positions.

The use of futures and options strategies also involves the risk of imperfect correlation among movements in the prices of the securities or other assets underlying the futures contracts and options purchased and sold by the fund, of the futures contracts and options themselves, and, in the case of hedging transactions, of the securities which are the subject of a hedge. To attempt to compensate for imperfect correlations, the fund may purchase or sell futures contracts in a greater amount than the hedged investments if the volatility of the price of the hedged investments is historically greater than the volatility of the futures contracts. Conversely, the fund may purchase or sell fewer futures contracts if the volatility of the price of the hedged investments is historically less than that of the futures contract. In addition to the possibility that there may be an imperfect correlation, or no correlation at all, between movements in the futures contracts used by the fund and the portion of the portfolio being hedged, the prices of futures contracts may not correlate perfectly with movements in the underlying asset due to certain market distortions. First, all participants in the futures market are subject to margin deposit and maintenance requirements. Rather than meeting additional margin deposit requirements, investors may close futures contracts through offsetting transactions which could distort the expected relationship between the underlying asset and futures markets. Second, margin requirements in the futures market are less onerous than margin requirements in the securities market, and as a result the futures market may attract more speculators than the securities market does. Increased participation by speculators in the futures market may also cause temporary price distortions. Due to the possibility of price distortions in the futures market and also because of the imperfect correlation between movements in the underlying asset and movements in the prices of related futures, even a correct forecast of general market trends by the Investment Manager may still not result in a profitable position. In addition, in the case of hedging transactions, an incorrect correlation could result in a loss on both the hedged securities in the fund and the hedging transactions, so that the portfolio return might have been greater had hedging not been attempted.

The risk of a position in a futures contract may be very large compared to the relatively low level of margin a fund is required to deposit. In many cases, a relatively small price movement in a futures contract may result in immediate and substantial loss or gain to the fund relative to the size of a required margin deposit. In addition, if the fund has insufficient cash, it may have to sell securities to meet daily variation margin requirements at a time when it is disadvantageous to do so. The fund will be required to post margin with its futures commission merchant in connection with its transactions in futures contracts. In the event of an insolvency of the futures commission merchant, the fund may not be able to recover all (or any) of the margin it has posted with the futures commission merchant, or to realize the value of any increase in the price of its positions. The fund also may be delayed or prevented from recovering margin or other amounts deposited with a futures commission merchant or futures clearinghouse.

There is no assurance that higher than anticipated trading activity or other unforeseen events might not, at times, result in the institution by exchanges of special procedures that may interfere with the timely execution of customer orders, for example, by rendering certain market clearing facilities inadequate. For example, futures exchanges may limit the amount of fluctuation permitted in certain futures contract prices during a single trading day. The daily limit establishes the maximum amount that the price of a futures contract may vary either up or down from the previous day's settlement price at the end of the trading session. Once the daily limit has been reached in a futures contract subject to the limit, no more trades may be made on that day at a price beyond that limit. The daily limit governs only price movements during a particular trading day and therefore does not limit potential losses and the limit may work to prevent the liquidation of unfavorable positions. Futures prices have occasionally moved to the daily limit for several consecutive trading days with little or no trading, thereby preventing prompt liquidation of positions and subjecting some holders of futures contracts to substantial losses. In addition, exchanges may cancel trades in limited circumstances, for example, if the exchange believes that allowing such trades to stand as executed could have an adverse impact on the stability or integrity of the market. Any such cancellation may adversely affect the performance of the fund. The fund's futures broker may also limit the fund's ability to invest in certain futures contracts. Such restrictions may adversely affect the fund's performance and its ability to achieve its investment objective.

To reduce or eliminate a position held by the fund, the fund may seek to close out such position. The ability to establish and close out positions will be subject to the development and maintenance of a liquid market. It is not certain that this market will develop or continue to exist for a particular futures contract or option. Reasons for the absence of a liquid market on an exchange include the following: (i) there may be insufficient trading interest in certain contracts or options; (ii) restrictions may be imposed by an exchange on opening transactions or closing transactions or both; (iii) trading halts, suspensions or other restrictions may be imposed with respect to particular classes or series of contracts or options, or underlying securities; (iv)

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unusual or unforeseen circumstances may interrupt normal operations on an exchange; (v) the facilities of an exchange or a clearing corporation may not at all times be adequate to handle current trading volume; or (vi) one or more exchanges could, for economic or other reasons, decide or be compelled at some future date to discontinue the trading of contracts or options (or a particular class or series of contracts or options), in which event the market on that exchange for such contracts or options (or in the class or series of contracts or options) would cease to exist, although outstanding contracts or options on the exchange that had been issued by a clearing corporation as a result of trades on that exchange would continue to be settled or exercisable in accordance with their terms. If the fund were unable to liquidate a futures contract or an option on a futures contract due to the absence of a liquid market, the imposition of price limits or otherwise, it could incur substantial losses. The fund would continue to be subject to market risk with respect to the position. Also, except in the case of purchased options, the fund would continue to be required to make daily variation margin payments and might be required to maintain a position being hedged by the futures contract or option. The funds are required to comply with the derivatives rule when they engage in transactions involving futures and options thereon. See "Legal and Regulatory Risks Relating to Investment Strategy" below.

#### Hybrid Instruments
Hybrid instruments are generally considered derivatives and include indexed or structured securities and combine the elements of futures contracts or options with those of debt, preferred equity, commodity or a depository instrument. A hybrid instrument may be a debt security, preferred stock, warrant, convertible security, certificate of deposit or other evidence of indebtedness on which a portion of or all interest payments, and/or the principal or stated amount payable at maturity, redemption or retirement is determined by reference to prices, changes in prices, or differences between prices, of securities, currencies, intangibles, goods, articles or commodities (collectively, "underlying assets"), or by another objective index, economic factor or other measure, including interest rates, currency exchange rates, or commodities or securities indices (collectively, "benchmarks").

Hybrid instruments can be an efficient means of creating exposure to a particular market, or segment of a market, with the objective of enhancing total return. For example, a fund may wish to take advantage of expected declines in interest rates in several European countries but avoid the transaction costs associated with buying and currency-hedging the foreign bond positions. One solution would be to purchase a U.S. dollar-denominated hybrid instrument whose redemption price is linked to the average three-year interest rate in a designated group of countries. The redemption price formula would provide for payoffs of less than par if rates were above the specified level. Furthermore, a fund could limit the downside risk of the security by establishing a minimum redemption price so that the principal paid at maturity could not be below a predetermined minimum level if interest rates were to rise significantly. The purpose of this arrangement, known as a structured security with an embedded put option, would be to give the fund the desired European bond exposure while avoiding currency risk, limiting downside market risk, and lowering transaction costs. Of course, there is no guarantee that the strategy will be successful, and the fund could lose money if, for example, interest rates do not move as anticipated or credit problems develop with the issuer of the hybrid instrument.

The risks of investing in hybrid instruments reflect a combination of the risks of investing in securities, options, futures and currencies. An investment in a hybrid instrument may entail significant risks that are not associated with a similar investment in a traditional debt instrument that has a fixed principal amount, is denominated in U.S. dollars or pays interest either at a fixed rate or a floating rate determined by reference to a common, nationally published benchmark. The risks of a particular hybrid instrument will depend upon the terms of the instrument but may include the possibility of significant changes in the benchmark(s) or the prices of the underlying assets to which the instrument is linked. Such risks generally depend upon factors unrelated to the operations or credit quality of the issuer of the hybrid instrument, which may not be foreseen by the purchaser, such as economic and political events, the supply and demand of the underlying assets and interest rate movements. In addition, the various benchmarks and prices for underlying assets can be highly volatile.

Hybrid instruments are potentially more volatile and carry greater market risks than traditional debt instruments. Depending on the structure of the particular hybrid instrument, changes in a benchmark may be magnified by the terms of the hybrid instrument and have an even more dramatic and substantial effect upon the value of the hybrid instrument. Also, the prices of the hybrid instrument and the benchmark or underlying asset may not move in the same direction or at the same time.

Hybrid instruments may bear interest or pay preferred dividends at below market (or even relatively nominal) rates. Alternatively, hybrid instruments may bear interest at above market rates but bear an increased risk of principal loss (or gain). The latter scenario may result if "leverage" is used to structure the hybrid instrument. Leverage risk occurs when the hybrid instrument is structured so that a given change in a benchmark or underlying asset is multiplied to produce a greater value change in the hybrid instrument, thereby magnifying the risk of loss as well as the potential for gain.

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If the fund attempts to use a hybrid instrument as a hedge against, or as a substitute for, a portfolio investment, the hybrid instrument may not correlate as expected with the portfolio investment, resulting in losses to the fund. While hedging strategies involving hybrid instruments can reduce the risk of loss, they can also reduce the opportunity for gain or even result in losses by offsetting favorable price movements in other fund investments.

Hybrid instruments may also carry liquidity risk since the instruments are often "customized" to meet the portfolio needs of a particular investor, and therefore, the number of investors that are willing and able to buy such instruments in the secondary market may be smaller than that for more traditional debt securities. Under certain conditions, the redemption value of such an investment could be zero. In addition, because the purchase and sale of hybrid investments could take place in an over-the-counter market without the guarantee of a central clearing organization, or in a transaction between the fund and the issuer of the hybrid instrument, the creditworthiness of the counterparty of the issuer of the hybrid instrument would be an additional risk factor the fund would have to consider and monitor, and the value of the hybrid instrument may decline substantially if the issuer's creditworthiness deteriorates. In addition, uncertainty regarding the tax treatment of hybrid instruments may reduce demand for such instruments. Hybrid instruments also may not be subject to regulation by any governmental regulatory authority, including the regulators typically associated with the derivatives and securities markets such as the CFTC and the SEC.

#### Illiquid Investments
An illiquid investment means any investment that a fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.

A fund's illiquid investments may be considered speculative and may be difficult to sell. The sale of many of these investments may be prohibited or limited by law or contract. Illiquid investments may be difficult to value for purposes of calculating a fund's net asset value. A fund may not be able to sell illiquid investments when the Investment Manager considers it desirable to do so, or a fund may be able to sell them only at less than their value. The larger size of certain fund holdings and the lack of liquidity in securities markets may limit a fund's ability to sell illiquid investments, or to sell them at appropriate prices, thereby negatively impacting the fund.

#### Inflation-Protected Securities
The fund may invest in U.S. Treasury Inflation Protected Securities ("U.S. TIPS"), which are fixed income securities issued by the U.S. Department of Treasury, the principal amounts of which are adjusted daily based upon changes in the rate of inflation or deflation. The fund may also invest in other inflation-protected securities issued by non-U.S. governments or by private issuers. Two structures are common. While the U.S. Treasury and some other issuers use a structure that accrues inflation/deflation into the principal value of the bond, many other issuers adjust the coupon accruals for inflation-related changes.

U.S. TIPS pay interest on a semi-annual basis, equal to a fixed percentage of the inflation-adjusted principal amount. The interest rate on these securities is fixed at issuance, but over the life of the security this interest may be paid on an increasing or decreasing principal value that has been adjusted for inflation. U.S. TIPS currently are issued with maturities of five, ten, or thirty years, although it is possible that securities with other maturities will be issued in the future.

Repayment of the original principal upon maturity (as adjusted for inflation) is guaranteed for U.S. TIPS, even during a period of deflation. However, because the principal amount of U.S. TIPS would be adjusted downward during a period of deflation, the fund will be subject to deflation risk with respect to its investments in these securities. In addition, the current market value of U.S. TIPS is not guaranteed, and will fluctuate. If the fund purchases U.S. TIPS in the secondary market whose principal values have been adjusted upward due to inflation since issuance, the fund may experience a loss if there is a subsequent period of deflation. The fund may also invest in other inflation-related securities which may or may not provide a guarantee of principal. If a guarantee of principal is not provided, the adjusted principal value of the security repaid at maturity may be less than the original principal amount.

In addition, inflation-indexed securities do not protect holders from increases in interest rates due to reasons other than inflation (such as changes in currency exchange rates). The periodic adjustment of U.S. TIPS is currently tied to the Consumer Price Index for Urban Consumers ("CPI-U"), which is calculated by the U.S. Department of Treasury. The CPI-U is a measurement of changes in the cost of living, made up of components such as housing, food, transportation and energy. Inflation-protected securities issued by a non-U.S. government are generally adjusted to reflect a comparable inflation index, calculated by that

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government. There can no assurance that the CPI-U or any non-U.S. inflation index will accurately measure the real rate of inflation in the prices of goods and services. If interest rates rise due to reasons other than inflation (for example, due to changes in currency exchange rates), investors in these securities may not be protected to the extent that the increase is not reflected in the security's inflation measure, which could result in losses to the fund. In addition, there can be no assurance that the rate of inflation in a non-U.S. country will be correlated to the rate of inflation in the United States.

Although inflation-indexed bonds securities may protect their holders from long-term inflationary trends, short-term increases in inflation may result in a decline in value. In general, the value of inflation-protected securities is expected to fluctuate in response to changes in real interest rates, which are in turn tied to the relationship between nominal interest rates and the rate of inflation. Therefore, if inflation were to rise at a faster rate than nominal interest rates, real interest rates might decline, leading to an increase in value of inflation-protected securities. In contrast, if nominal interest rates increased at a faster rate than inflation, real interest rates might rise, leading to a decrease in value of inflation-protected securities. If inflation is lower than expected during the period the fund holds the security, the fund may earn less on the security than on a conventional bond.

Any increase in principal value is taxable in the year the increase occurs, even though holders do not receive cash representing the increase at that time. As a result, when the fund invests in inflation-protected securities, it could be required at times to liquidate other investments, including when it is not advantageous to do so, in order to satisfy its distribution requirements as a regulated investment company and to eliminate any fund-level income tax liability under the Code.

#### Initial Public Offerings
The fund may purchase debt or equity securities in initial public offerings ("IPOs"). These securities, which are often issued by unseasoned companies, may be subject to many of the same risks of investing in companies with smaller market capitalizations. Securities issued in an IPO frequently are very volatile in price (and may, therefore, involve greater risk) due to factors such as market psychology prevailing at the time of the IPO, the absence of a prior public market, unseasoned trading, the small number of shares available for trading, and limited availability of information about the issuer. Because of the price volatility of IPO securities, the fund may hold securities purchased in an IPO for a very short period of time. As a result, the fund's investments in IPOs may increase portfolio turnover, which increases brokerage and administrative costs and may result in taxable distributions to shareholders.

There can be no assurance that investments in IPOs will be available to the funds or improve a fund's performance. At any particular time or from time to time the fund may not be able to invest in securities issued in IPOs, or invest to the extent desired because, for example, only a small portion (if any) of the securities being offered in an IPO may be made available to the fund. In addition, under certain market conditions a relatively small number of companies may issue securities in IPOs. Similarly, to the extent that the number of Putnam funds to which IPO securities are allocated increases, the number of securities issued to any one fund may decrease. The investment performance of the fund during periods when it is unable to invest significantly or at all in IPOs may be lower than during periods when the fund is able to do so. When a fund's asset base is small, a significant portion of the fund's performance could be attributable to investments in IPOs because such investments would have a magnified impact on the fund. As the fund increases in size, the impact of IPOs on the fund's performance will generally decrease.

#### Inverse Floaters
Inverse floating rate debt securities (or "inverse floaters") are debt securities structured with variable interest rates that reset in the opposite direction from the market rate of interest to which the inverse floater is indexed. An inverse floater may be considered to be leveraged to the extent that its interest rate varies by a magnitude that exceeds the magnitude of the change in the index rate of interest. As a result, inverse floaters may be more volatile and more sensitive to interest rate changes than other types of debt securities with comparable maturities. Inverse floaters may be subject to legal or contractual restrictions on resale and therefore may be less liquid than other types of securities. Certain inverse floaters may be illiquid.

#### Large Shareholder Transaction Risk
The fund may be an investment option for mutual funds that are managed by the Investment Manager and its affiliates as "funds of funds." Additionally, other investors from time to time may make substantial investments in the fund. Such shareholders may at times be considered to control the fund. Dispositions of a large number of shares by these shareholders may adversely affect the fund's liquidity and net assets to the extent such transactions are executed directly with the fund in the form of redemptions through an authorized participant, rather than executed in the secondary market. In addition, a large number of shareholders

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collectively may purchase or redeem fund shares in large amounts rapidly or unexpectedly (collectively, such transactions are referred to as "large shareholder transactions"). Large shareholder redemptions may also force the fund to sell securities to satisfy redemption requests or purchase securities for the portfolio in connection with the investment of subscription proceeds when the fund would otherwise not do so, and at unfavorable prices, which may increase the fund's brokerage costs and accelerate the realization of taxable income and/or gains to shareholders. The effects of taxable income and/or gains resulting from large shareholder transactions would particularly impact non-redeeming shareholders who do not hold their fund shares in an IRA, 401(k) plan or other tax-advantaged plan. To the extent that such transactions result in short-term capital gains, such gains will generally be taxed at the ordinary income tax rate for shareholders who hold fund shares in a taxable account. In addition, fund returns may be adversely affected if the fund holds a portion of its assets in liquid, cash-like investments in connection with or in anticipation of shareholder redemptions. To the extent these large shareholders transact in shares of the fund on the secondary market, such transactions may account for a large percentage of the trading volume on the exchange and may, therefore, have a material effect (upward or downward) on the market price of the fund's shares. A number of circumstances may cause the fund to experience large redemptions, such as changes in the eligibility criteria for the fund or share class of the fund; liquidations, reorganizations, repositionings, or other announced fund events; or changes in investment objectives, strategies, policies, risks, or investment personnel.

#### Legal and Regulatory Risks Relating to Investment Strategy
The fund may be adversely affected by new (or revised) laws or regulations that may be imposed by the Internal Revenue System or Treasury Department, the CFTC, the SEC, the U.S. Federal Reserve or other banking regulators, or other governmental regulatory authorities or self-regulatory organizations that supervise the financial markets. These agencies are empowered to promulgate a variety of rules pursuant to financial reform legislation in the United States. The fund may also be adversely affected by changes in the enforcement or interpretation of existing statutes and rules by these governmental regulatory authorities or self-regulatory organizations. It is impossible to predict what, if any, changes in regulations may occur, but any regulation that restricts the ability of the fund to trade in securities or otherwise execute its investment strategy could have a material adverse impact on the fund's performance.

The regulatory environment for funds is evolving, and changes in regulation may adversely affect the value of the investments held by the fund and the ability of the fund to execute its investment strategy. In addition, the securities and derivatives (including futures) markets are subject to comprehensive statutes, regulations and margin requirements. The CFTC, the SEC, the Federal Deposit Insurance Corporation, other regulators and self-regulatory organizations and exchanges are authorized to take extraordinary actions in the event of market emergencies. The regulation of securitization and derivative transactions and funds that engage in such transactions is an evolving area of law and is subject to modification by government, self-regulatory organization and judicial action.

Since 2021, the SEC has proposed and, in some cases, finalized several new rules regarding a wide range of topics related to the fund. For example, the SEC has proposed new rules requiring the reporting and public disclosure of a manager's positions in security-based swaps, including CDS, equity total return swaps and related positions. The SEC has also finalized new rules restricting activities that could be considered to be manipulative in connection with security-based swaps, new rules regarding beneficial ownership and public reporting by managers under Section 13 of the Exchange Act, and new rules requiring the central clearing of certain cash and repurchase transactions involving U.S. Treasuries. These and other proposed new rules, whether assessed on an individual or collective basis, could fundamentally change the current regulatory framework for relevant markets and market participants, including having a material impact on activities of private fund advisers and their funds. While it is currently difficult to predict the full impact of these new rules, these rules could make it more difficult for the fund to execute certain investment strategies and may have a material adverse effect on the fund's ability to generate returns.

In October 2016, the SEC adopted a liquidity risk management rule, Rule 22e-4 under the 1940 Act (the "Liquidity Rule") that requires each fund to establish a liquidity risk management program. The funds have implemented a liquidity risk management program, and the fund's trustees (such trustees, as referenced in the table below under the heading "Management- Trustees," shall hereinafter be referred to as the "Trustees," the "Board," or the "Board of Trustees") has appointed the Investment Manager to administer the program. Under the liquidity risk management program, the liquidity risk of each fund is assessed, managed, and periodically reviewed and each portfolio investment held by each fund is classified as a "highly liquid investment," "moderately liquid investment," "less liquid investment" or "illiquid investment." The Liquidity Rule defines "liquidity risk" as the risk that a fund could not meet requests to redeem shares issued by the fund without significant dilution of the remaining investors' interest in the fund. The liquidity of a fund's portfolio investments is determined based on relevant market, trading and investment-specific considerations under the fund's liquidity risk management program. The impact the Liquidity Rule will have

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on the funds, and on the open-end mutual fund industry in general, is not yet fully known, but the rule could impact a fund's performance and its ability to achieve its investment objective(s). Please see "Illiquid Investments" above for more information.

The U.S. government has enacted legislation that provides for regulation of the derivatives market, including clearing, margin, reporting and registration requirements. The CFTC, SEC, and other federal regulators have adopted and continue to develop rules and regulations enacting the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"). The European Union ("EU"), the United Kingdom ("UK"), and some other countries have implemented and are in the process of implementing similar requirements that affect the fund when it enters into derivative transactions with a counterparty organized in that country or otherwise subject to that country's derivatives regulations. For example, the U.S. government, the EU, the UK and certain other jurisdictions have adopted mandatory minimum variation (and in some cases initial) margin requirements for bilateral derivatives. Such requirements could increase the amount of margin the fund needs to provide in connection with its derivative transactions and, therefore, make derivative transactions more expensive. The regulation of the derivatives markets may make derivatives more costly, may limit the availability or reduce the liquidity of derivatives, or may otherwise adversely affect the value or performance of derivatives. Because these requirements are evolving, their ultimate impact on the fund and the financial system is not yet known. While the rules and regulations like those imposing requirements for margin and central clearing of some derivative transactions are designed to reduce systemic risk (e.g., the risk that the interdependence of large derivatives dealers could cause them to suffer liquidity, solvency or other challenges simultaneously), there is no assurance that they will achieve that result, and, as noted, the requirements can expose the fund to new kinds of costs and risks.

In addition, in October 2020, the SEC adopted Rule 18f-4 under the 1940 Act (the "Derivatives Rule"), regulating the use by registered investment companies of derivatives and many related instruments (e.g. reverse repurchase agreements). The Derivatives Rule requires, among other things, that certain entities adopt a derivatives risk management program, comply with limitations on leverage-related risk based on a "value-at-risk" test and update reporting and disclosure procedures. Funds that use derivative instruments in a limited amount are not subject to the full requirements of the Derivatives Rule. In connection with the adoption of the Derivatives Rule, funds are no longer required to comply with the asset segregation framework arising from prior SEC guidance for covering certain derivative instruments and related transactions.

Regulatory changes also may affect counterparty risk. For example, regulatory requirements may limit the ability of the fund to protect its interests in the event of an insolvency of a derivatives counterparty. In the event of a counterparty's (or its affiliate's) insolvency, the fund's ability to exercise remedies, such as the termination of transactions, netting of obligations and realization on collateral, could be stayed or eliminated under special resolution regimes adopted in the United States, the EU, the UK, and various other jurisdictions. Such regimes provide government authorities with broad authority to intervene when a financial institution is experiencing financial difficulty. In particular, with respect to counterparties who are subject to such proceedings in the EU and the UK, the liabilities of such counterparties to the fund could be reduced, eliminated, or converted to equity in such counterparties (sometimes referred to as a "bail in").

The CFTC and domestic exchanges have established (and continue to evaluate and revise) speculative position limits, referred to as "position limits," on the maximum speculative positions which any person, or group of persons acting in concert, may hold or control in particular futures and options on futures contracts. In addition, federal position limits apply to swaps on agricultural, energy and metals commodities that are "economically equivalent," as defined by the CFTC, to certain futures contracts. Uncertainty surrounding which swaps qualify as "economically equivalent" may result in compliance challenges. An overly broad application of the definition could result in unnecessary restrictions in position sizes, whereas an overly narrow application could risk position limit overages. All positions owned or controlled by the same person or entity, even if in different accounts, must be aggregated for purposes of determining whether the applicable position limits have been exceeded unless an exemption applies. Thus, even if the fund does not intend to exceed applicable position limits, it is possible that positions of different clients managed by the Investment Manager and its affiliates or by any sub-adviser and its affiliates may be aggregated for this purpose. Any modification of trading decisions or elimination of open positions that may be required to avoid exceeding such limits may adversely affect the profitability of the fund. Position limits may adversely affect the fund's ability to hold positions in certain futures contracts and related options and swaps. A violation of position limits could also lead to regulatory action materially adverse to the fund's investment strategy.

The SEC has adopted new rules that require managers to file monthly confidential reports with the SEC regarding equity short sales and related activity. Under the new rules, the SEC will publicly disclose aggregated short position information on a monthly basis. The SEC also adopted a rule that will require reporting and public disclosure of securities loan transaction information (not including party names); this may include, but is not limited to, information about securities loans entered into in connection with

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short sales. In addition, other non-U.S. jurisdictions where the fund may trade have adopted reporting requirements. If the fund's short positions or its strategy become generally known, the fund's ability to implement its investment strategy could be adversely affected. In particular, other investors could cause a "short squeeze" in the securities held short by the fund forcing the fund to cover its positions at a loss. Such reporting requirements may also limit the fund's ability to access management and other personnel at certain companies where the fund seeks to take a short position. In addition, if other investors engage in copycat behavior by taking positions in the same issuers as the fund, the cost of borrowing securities to sell short could increase drastically and the availability of such securities to the fund could decrease drastically. Such events could make a fund unable to execute its investment strategy. Short sales are also subject to certain SEC regulations. If the SEC were to adopt additional restrictions on short sales, they could restrict the fund's ability to engage in short sales in certain circumstances. The SEC and regulatory authorities in other jurisdictions may adopt (and in certain cases, have adopted) bans on new or increases in short sales of certain securities, including short positions on such securities acquired through swaps, in response to market events. Bans on short selling and such short positions may make it impossible for the fund to execute certain investment strategies and may have a material adverse effect on the fund's ability to generate returns.

In October 2020, the SEC adopted certain regulatory changes and took other actions related to the ability of an investment company to invest in another investment company. These changes include, among other things, amendments to Rule 12d1-1, the rescission of Rule 12d1-2, the adoption of Rule 12d1-4, and the rescission of certain exemptive relief issued by the SEC permitting such investments in excess of statutory limits. These regulatory changes may adversely impact each fund's investment strategies and operations.

Rules implementing the credit risk retention requirements of the Dodd-Frank Act for asset-backed securities require the sponsor of certain securitization vehicles to retain, and to refrain from transferring, selling, conveying to a third party, or hedging 5% of the credit risk in assets transferred, sold, or conveyed through the issuance of such vehicle, subject to certain exceptions. These requirements may increase the costs to originators, securitizers, and, in certain cases, collateral managers of securitization vehicles in which the fund may invest, which costs could be passed along to the fund as an investor in such transactions.

Some EU-regulated institutions (banks, certain investment firms, and authorized managers of alternative investment funds) are currently restricted from investing in securitizations (including U.S.-related securitizations), unless, in summary: (i) the institution is able to demonstrate that it has undertaken certain due diligence in respect of various matters, including its investment position, the underlying assets, and (in the case of authorized managers of alternative investment funds) the sponsor and the originator of the securitization; and (ii) the originator, sponsor, or original lender of the securitization has explicitly disclosed to the institution that it will retain, on an ongoing basis, a net economic interest of not less than five percent of specified credit risk tranches or asset exposures related to the securitization. In the future, EU insurance and reinsurance undertakings and UCITS funds are expected to become subject to similar restrictions. Although the requirements do not apply to the fund directly, the costs of compliance, in the case of any securitization within the EU risk retention rules in which the fund has invested or is seeking to invest, could be indirectly borne by the fund and the other investors in the securitization.

#### Lower-rated Securities
The fund may invest in lower-rated fixed-income securities (commonly known as "junk bonds") and may hold fixed-income securities that are downgraded to a lower rating after the time of purchase by the fund. Compared to higher-rated fixed-income securities, lower-rated securities generally offer the potential for higher investment returns but subject holders to greater credit, market and liquidity risk, including the possibility of default or bankruptcy. The lower ratings reflect a greater possibility that adverse changes in the financial condition of the issuer or in general economic conditions, or both, or an unanticipated rise in interest rates, may impair the ability of the issuer to make payments of interest and principal. The inability (or perceived inability) of issuers to make timely payment of interest and principal would likely make the values of securities held by the fund more volatile and could limit the fund's ability to sell its securities at prices approximating the values the fund had placed on such securities. The market price of lower-rated securities also generally responds to short-term corporate and market developments to a greater extent than do the price and liquidity of higher-rated securities because such developments are perceived to have a more direct relationship to the ability of an issuer of lower-rated securities to meet its ongoing debt obligations. In addition, the market may be less liquid for lower-rated securities than for higher-rated securities. In the absence of a liquid trading market for securities held by it, the fund at times may be unable to establish the fair value of such securities.

Securities ratings are based largely on the issuer's historical financial condition and the rating agencies' analysis at the time of rating. Consequently, the rating assigned to any particular security is not necessarily a reflection of the issuer's current financial condition, which may be better or worse than the rating would indicate. In addition, the rating assigned to a security by Moody's

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Investors Service, Inc. or Standard & Poor's (or by any other nationally recognized securities rating agency) does not reflect an assessment of the volatility of the security's market value or the liquidity of an investment in the security. See "SECURITIES RATINGS."

Like those of other fixed-income securities, the values of lower-rated securities fluctuate in response to changes in interest rates. A decrease in interest rates will generally result in an increase in the value of the fund's fixed-income assets. Conversely, during periods of rising interest rates, the value of the fund's fixed-income assets will generally decline. The values of lower-rated securities may often be affected to a greater extent than higher-rated securities by changes in general economic conditions and business conditions affecting the issuers of such securities and their industries. Negative publicity or investor perceptions may also adversely affect the values of lower-rated securities, whether or not justified by fundamental factors. Changes by nationally recognized securities rating agencies in their ratings of any fixed-income security, changes in the ability of an issuer to make payments of interest and principal or regulation that limits the ability of certain categories of financial institutions to invest in lower-rated securities may also affect the value of these investments. Changes in the value of portfolio securities generally will not affect income derived from these securities, but will affect the fund's net asset value. The fund will not necessarily dispose of a security when its rating is reduced below its rating at the time of purchase. However, the Investment Manager will monitor the investment to determine whether its retention will assist in meeting the fund's goal(s).

Lower-rated securities may contain redemption, call or prepayment provisions which permit the issuer of such securities to, at its discretion, redeem the securities. During periods of falling interest rates, issuers of these securities are likely to redeem or prepay the securities and refinance them with debt securities with a lower interest rate. To the extent an issuer is able to refinance the securities, or otherwise redeem them, the fund may have to replace the securities with a lower yielding security, which would result in a lower return.

Issuers of lower-rated fixed-income securities may be (i) in poor financial condition, (ii) experiencing poor operating results, (iii) having substantial capital needs or negative net worth, or (iv) facing special competitive or product obsolescence problems, and may include companies involved in bankruptcy or other reorganizations or liquidation proceedings. Issuers of lower-rated securities are also often highly leveraged, and their relatively high debt-to-equity ratios increase the risk that their operations may not generate sufficient cash flow to service their debt obligations, especially during an economic downturn or during sustained periods of rising interest rates. Such issuers may not have more traditional methods of financing available to them and may be unable to repay outstanding obligations at maturity by refinancing. The risk of loss due to default in payment of interest or repayment of principal by issuers of lower-rated securities is significantly greater than for issuers of higher-rated securities because such securities frequently are unsecured and subordinated to the prior payment of senior indebtedness.

At times, a substantial portion of the fund's assets may be invested in an issue of which the fund, by itself or together with other funds and accounts managed by the Investment Manager or its affiliates, holds all or a major portion. Although the Investment Manager generally considers such securities to be liquid because of the availability of an institutional market for such securities, it is possible that, under adverse market or economic conditions or in the event of adverse changes in the financial condition of the issuer, the fund could find it more difficult to sell these securities when the Investment Manager believes it advisable to do so or may be able to sell the securities only at prices lower than if they were more widely held. Under these circumstances, it may also be more difficult to determine the fair value of such securities for purposes of computing the fund's net asset value. In order to enforce its rights in the event of a default, the fund may be required to participate in various legal proceedings or take possession of and manage assets securing the issuer's obligations on such securities. This could increase the fund's operating expenses and adversely affect the fund's net asset value. In the case of tax-exempt funds, any income derived from the fund's ownership or operation of such assets would not be tax-exempt. The ability of a holder of a tax-exempt security to enforce the terms of that security in a bankruptcy proceeding may be more limited than would be the case with respect to securities of private issuers. In addition, the fund's intention to qualify as a "regulated investment company" under the Code may limit the extent to which the fund may exercise its rights by taking possession of such assets.

To the extent the fund invests in lower-rated securities, the achievement of the fund's goals is more dependent on the Investment Manager's investment analysis than would be the case if the fund were investing in higher-rated securities.

#### Market Risk
The value of securities in a 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 (including perceptions about monetary policy, interest rates or the risk of default), government actions (including protectionist measures, intervention in

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the financial markets or other regulation, and changes in fiscal, monetary or tax policies), geopolitical events or changes (including natural disasters, epidemics or pandemics, terrorism and war), and factors related to a specific issuer, geography, industry or sector. In addition, the increasing popularity of passive index-based investing may have the potential to increase security price correlations and volatility. (As passive strategies generally buy or sell securities based simply on inclusion and representation in an index, securities prices will have an increasing tendency to rise or fall based on whether money is flowing into or out of passive strategies rather than based on an analysis of the prospects and valuation of individual securities. This may result in increased market volatility as more money is invested through passive strategies). During a general downturn in financial markets, multiple asset classes may decline in value simultaneously. These and other factors may lead to increased volatility and reduced liquidity in the fund's portfolio holdings, particularly for larger investments. During those periods, the fund may experience high levels of shareholder redemptions, and may have to sell securities at times when it would otherwise not do so, and at unfavorable price.

Legal, political, regulatory and tax changes may cause fluctuations in markets and securities prices. In the past, governmental and non-governmental issuers have defaulted on, or have been forced to restructure, their debts, and many other issuers have faced difficulties obtaining credit. Defaults or restructurings by governments or others of their debts could have substantial adverse effects on economies, financial markets, and asset valuations around the world. In addition, financial regulators, including the U.S. Federal Reserve and the European Central Bank, at times have taken steps to maintain historically low interest rates, such as by purchasing bonds. Some governmental authorities at times have taken steps to devalue their currencies substantially or have taken other steps to counter actual or anticipated market or other developments. Steps by those regulators and authorities to implement, or to curtail or taper, these activities could have substantial negative effects on financial markets. The withdrawal of support, failure of efforts in response to a financial crisis, or investor perception that these efforts are not succeeding could negatively affect financial markets generally as well as the values and liquidity of certain securities.

The fund is subject to the risk that geopolitical events will disrupt securities markets and adversely affect global economies and markets. War, terrorism, economic uncertainty, and other geopolitical events (including sanctions, tariffs, exchange controls or other cross-border trade barriers) have led, and in the future may lead, to increased short-term market volatility and may have adverse long-term effects on U.S. and world economies and markets generally. In addition, trade disputes (such as the "trade war" between the United States and China that intensified in 2018 and 2019) may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree. Events such as these and their impact on the fund are difficult to predict. For example, Russia's military invasion of Ukraine in February 2022 resulted in the United States, other countries, and certain international organizations levying broad economic sanctions against Russia and Russian individuals. These sanctions and any additional sanctions or other intergovernmental actions that may be undertaken against Russia in the future may result in the devaluation of the ruble, a downgrade in the country's credit rating, and a decline in the value and liquidity of Russian securities. Such actions could result in a freeze of Russian securities, impairing the ability of a fund to buy, sell, receive, or deliver those securities. Retaliatory action by the Russian government could involve the seizure of U.S. and/or European residents' assets, and any such actions are likely to impair the value and liquidity of such assets. Any or all of these potential results could have an adverse/recessionary effect on Russia's economy. All of these factors could have a negative effect on the performance of funds that have significant exposure to Russia.

In addition, the extent and duration of the military action associated with Russia's invasion of Ukraine, resulting sanctions and resulting future market disruptions, including declines in Russian stock markets and the value of the ruble against the U.S. dollar, are impossible to predict, but could be significant. Any disruptions caused by such military action or other actions (including cyberattacks and espionage) or resulting actual and threatened responses to such activity, including purchasing and financing restrictions, boycotts or changes in consumer or purchaser preferences, sanctions, tariffs or cyberattacks on the Russian government, Russian companies, or Russian individuals, including politicians, may negatively impact Russia's economy and Russian issuers of securities in which the fund invests. Actual and threatened responses to such military action may also impact the markets for certain Russian commodities, such as oil and natural gas, as well as other sectors of the Russian economy, and may likely have collateral impacts on such sectors globally. These and any related events could have a significant impact on fund performance and the value of an investment in the fund.

Likewise, natural and environmental disasters, epidemics or pandemics, and systemic market dislocations may be highly disruptive to economies and markets, and may result in significant market volatility, exchange trading suspensions or closures, or a substantial economic downturn or recession. Those events, as well as other changes in foreign and domestic economic and political conditions, also could disrupt the operations of the fund or its service providers or adversely affect individual issuers or related groups of issuers, interest rates, credit ratings, default rates, inflation, supply chains, consumer demand, investor sentiment, and other factors affecting the value or liquidity of the fund's investments.

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An outbreak of respiratory disease caused by a novel coronavirus designated as COVID-19 was first detected in China in December 2019 and subsequently spread internationally. The transmission of COVID-19 and efforts to contain its spread have resulted in, among other things, border closings and other significant travel restrictions and disruptions; significant disruptions to business operations, supply chains and customer activity; lower consumer demand for goods and services; higher levels of unemployment; event cancellations and restrictions; service cancellations, reductions and other changes; significant challenges in healthcare service preparation and delivery; prolonged quarantines; and general concern and uncertainty. These impacts have negatively affected, and may continue to negatively affect, the global economy, the economies of individual countries, and the financial performance of individual issuers, sectors, industries, asset classes, and markets in significant and unforeseen ways. The COVID-19 pandemic also has resulted in significant market volatility, exchange trading suspensions and closures, declines in global financial markets, higher default rates, and economic downturns and recessions, and may continue to have similar effects in the future. In addition, actions taken by government and quasi-governmental authorities and regulators throughout the world in response to the COVID-19 pandemic, including significant fiscal and monetary policies changes, may affect the value, volatility, and liquidity of some securities and other assets. Health crises caused by the COVID-19 pandemic may also exacerbate other pre-existing political, social, economic, market and financial risks. The effects of the outbreak in developing or emerging market countries may be greater due to less established health care systems. The foregoing could impair the fund's ability to maintain operational standards (such as with respect to creations and redemptions of fund shares), disrupt the operations of the fund's service providers, adversely affect the value and liquidity of the fund's investments, and negatively impact the fund's performance and your investment in the fund. Given the significant uncertainty surrounding the magnitude, duration, reach, costs and effects of the COVID-19 pandemic, as well as actions that have been or could be taken by governmental authorities or other third parties, it is difficult to predict its potential impacts on a fund's investments.

Securities and financial markets may be susceptible to market manipulation or other fraudulent trade practices, which could disrupt the orderly functioning of these markets, contribute to overall market volatility and adversely affect the values of the fund's investments.

Given the increasing interdependence among global economies and markets, conditions in one country, region or market might adversely affect financial conditions or issuers in other countries, regions or markets. For example, any partial or complete dissolution of the Economic and Monetary Union of the European Union, or any increased uncertainty as to its status, could have significant adverse effects on global currency and financial markets, and on the values of the fund's investments. On January 31, 2020, the United Kingdom formally withdrew from the European Union (commonly known as "Brexit"). An agreement between the United Kingdom and the European Union governing their future trade relationship became effective January 1, 2021. While the full impact of Brexit is unknown, Brexit has already resulted in volatility in European and global markets. Potential negative long-term effects could include, among others, greater market volatility and illiquidity, disruptions to world securities markets, currency fluctuations, deterioration in economic activity, a decrease in business confidence, and an increased likelihood of a recession in the United Kingdom. To the extent the fund has focused its investments in a particular country, region or market, adverse geopolitical and other events impacting that country, region or market could have a disproportionate impact on the fund.

#### Master Limited Partnerships (MLPs)
An MLP generally is a publicly traded company organized as a limited partnership or limited liability company and treated as a partnership for U.S. federal income tax purposes. MLPs may derive income and gains from, among other things, the exploration, development, mining or production, processing, refining, transportation (including pipelines transporting gas, oil, or products thereof), or the marketing of any mineral or natural resources. MLPs generally have two classes of owners, the general partner and limited partners. The general partner of an MLP is typically owned by one or more of the following: a major energy company, an investment fund, or the direct management of the MLP. The general partner may be structured as a private or publicly traded corporation or other entity. The general partner typically controls the operations and management of the MLP through an up to 2% equity interest in the MLP plus, in many cases, ownership of common units and subordinated units. Limited partners own the remainder of the partnership through ownership of common units and have a limited role in the partnership's operations and management.

MLP securities in which certain funds may invest can include, but are not limited to: (i) equity securities of MLPs, including common units, preferred units or convertible subordinated units; (ii) debt securities of MLPs, including debt securities rated below investment grade; (iii) securities of MLP affiliates; (iv) securities of open-end funds, closed-end funds or exchange-traded funds ("ETFs") that invest primarily in MLP securities; or (v) exchange-traded notes whose returns are linked to the returns of MLPs or MLP indices.

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The risks of investing in an MLP are generally those inherent in investing in a partnership as opposed to a corporation. For example, MLP common units represent an equity ownership interest in a partnership, providing limited voting rights and entitling the holder to a share of the company's success through distributions and/or capital appreciation. Unlike shareholders of a corporation, common unit holders do not elect directors annually and generally have the right to vote only on certain significant events, such as mergers, a sale of substantially all of the assets, removal of the general partner or material amendments to the partnership agreement. In addition, state law governing partnerships is often less restrictive than state law governing corporations. Accordingly, there may be fewer protections afforded investors in an MLP than investors in a corporation.

MLP common units and other equity securities can be affected by macro-economic and other factors affecting the stock market in general, expectations of interest rates, investor sentiment towards MLPs, changes in a particular issuer's financial condition, or unfavorable or unanticipated poor performance of a particular issuer (in the case of MLPs, generally measured in terms of distributable cash flow). Prices of common units of individual MLPs and other equity securities can also be affected by fundamentals unique to the partnership or company, including earnings power and coverage ratios.

Additional risks involved with investing in an MLP are risks associated with the specific industry or industries in which the partnership invests. For example, companies operating in the energy MLP sector are subject to risks that are specific to the industry in which they operate. MLPs and other companies that provide crude oil, refined product and natural gas services are subject to supply and demand fluctuations in the markets they serve which may be impacted by a wide range of factors including fluctuating commodity prices, weather, increased conservation or use of alternative fuel sources, increased governmental or environmental regulation, depletion, rising interest rates, declines in domestic or foreign production, accidents or catastrophic events, and economic conditions, among others. Energy MLP companies are subject to varying demand for oil, natural gas or refined products in the markets they serve, as well as changes in the supply of products requiring gathering, transport, processing, or storage due to natural declines in reserves and production in the supply areas serviced by the companies' facilities. Declines in oil or natural gas prices, as well as adverse regulatory decisions, may cause producers to curtail production or reduce capital spending for production or exploration activities, which may in turn reduce the need for the services provided by energy MLP companies. Lower prices may also create lower processing margins. Energy MLPs may also be subject to regulation by the Federal Energy Regulatory Commission ("FERC") with respect to tariff rates that these companies may charge for interstate pipeline transportation services. An adverse determination by FERC with respect to tariff rates of a pipeline MLP could have a material adverse effect on the business, financial conditions, result of operations, cash flows and prospects of that pipeline MLP and its ability to make cash distributions to its equity owners.

#### Money Market Instruments
Money market instruments, or short-term debt instruments, consist of obligations such as commercial paper, bank obligations (*e.g.*, certificates of deposit and bankers' acceptances), repurchase agreements, and various government obligations, such as Treasury bills. These instruments have a remaining maturity of one year or less and are generally of high credit quality. Money market instruments may be structured to be, or may employ a trust or other form so that they are, eligible investments for money market funds. For example, put features can be used to modify the maturity of a security or interest rate adjustment features can be used to enhance price stability. If a structure fails to function as intended, adverse tax or investment consequences may result. Neither the IRS nor any other regulatory authority has ruled definitively on certain legal issues presented by certain structured securities. Future tax or other regulatory determinations could adversely affect the value, liquidity, or tax treatment of the income received from these securities or the nature and timing of distributions made by the funds.

Commercial paper is a money market instrument issued by banks or companies to raise money for short-term purposes. Commercial paper is usually sold on a discounted basis rather than as an interest-bearing instrument. Unlike some other debt obligations, commercial paper is typically unsecured, which increases the credit risk associated with this type of investment. In some cases, commercial paper may be backed by some form of credit enhancement, typically in the form of a guarantee by a commercial bank. Commercial paper backed by guarantees of foreign banks may involve additional risk due to the difficulty of obtaining and enforcing judgments against such banks and the generally less restrictive regulations to which such banks are subject. Commercial paper also may be issued as an asset-backed security (that is, backed by a pool of assets representing the obligations of a number of different issuers), in which case certain of the risks discussed in "Mortgage-backed and Asset-backed securities" would apply. Commercial paper is traded primarily among institutions.

Certificates of deposit are receipts issued by a depository institution in exchange for the deposit of funds. The issuer agrees to pay the amount deposited plus interest to the bearer of the receipt on the date specified on the certificate. The certificate usually can be traded in the secondary market prior to maturity. Certificates of deposit may include those issued by foreign banks

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outside the United States. Such certificates of deposit include Eurodollar and Yankee certificates of deposit. Eurodollar certificates of deposit are U.S. dollar-denominated certificates of deposit issued by branches of foreign and domestic banks located outside the United States. Yankee certificates of deposit are certificates of deposit issued by a U.S. branch of a foreign bank denominated in U.S. dollars and held in the United States.

Bankers' acceptances typically arise from short-term credit arrangements designed to enable businesses to obtain funds to finance commercial transactions. Generally, an acceptance is a time draft drawn on a bank by an exporter or an importer to obtain a stated amount of funds to pay for specific merchandise. The draft is then "accepted" by a bank that, in effect, unconditionally guarantees to pay the face value of the instrument on its maturity date. The acceptance may then be held by the accepting bank as an earning asset or it may be sold in the secondary market at the going rate of discount for a specific maturity. Although maturities for acceptances can be as long as 270 days, most acceptances have maturities of six months or less.

Time deposits are interest-bearing non-negotiable deposits at a bank or a savings and loan association that have a specific maturity date. A time deposit earns a specific rate of interest over a definite period of time. Time deposits cannot be traded on the secondary market and those exceeding seven days and with a withdrawal penalty are considered to be illiquid.

In accordance with rules issued by the SEC, the fund may from time to time invest all or a portion of its assets, including any cash balances in money market and/or short-term bond funds advised by the Investment Manager or its affiliates. In connection with such investments, the Investment Manager may waive a portion of the advisory fees otherwise payable by the fund. See "Charges and expenses" in Part I of this SAI for the amount, if any, waived by the Investment Manager in connection with such investments.

#### Mortgage-backed and Asset-backed Securities
Mortgage-backed securities, including collateralized mortgage obligations ("CMOs"), stripped mortgage-backed securities and securities that reflect an interest in reverse mortgages, represent a participation in, or are secured by, mortgage loans or otherwise are secured by real estate related collateral. Mortgage-backed securities may be issued by agencies or instrumentalities of the U.S. government (and may not be guaranteed or insured by the U.S. government, such as those issued by Freddie Mac, Fannie Mae, and FHLBs), foreign governments (or their agencies or instrumentalities), or non-governmental issuers. Interest and principal payments (including prepayments) on the mortgage loans underlying mortgage-backed securities typically pass through to the holders of the mortgage-backed securities or serve as the source for payments on the mortgage-backed securities. Asset-backed securities are structured like mortgage-backed securities, but instead of mortgage loans or interests in mortgage loans, the underlying assets may include such items as motor vehicle installment sales or installment loan contracts, home equity loans, leases of various types of real, personal and other property and receivables from credit card agreements. Similar to mortgage-backed securities, other types of asset-backed securities may be issued by agencies or instrumentalities of the U.S. government (and may or may not be guaranteed or insured by the U.S. government), foreign governments (or their agencies or instrumentalities), or non-governmental issuers.

Mortgage-backed securities may have yield and maturity characteristics corresponding to the underlying assets. Unlike traditional debt securities, which may pay a fixed rate of interest until maturity, when the entire principal amount comes due, payments on certain mortgage-backed securities include both interest and a partial repayment of principal. Besides the scheduled repayment of principal, repayments of principal may result from the voluntary prepayment or refinancing of the underlying mortgage loans or the foreclosure of collateral securing the underlying mortgage loans. If property owners make unscheduled prepayments on their mortgage loans, these prepayments will result in early payment of the applicable mortgage-backed securities. In that event the fund may be unable to invest the proceeds from the early payment of the mortgage-backed securities in an investment that provides as high a yield as those mortgage-backed securities. Consequently, early payment associated with mortgage-backed securities may cause these securities to experience significantly greater price and yield volatility than that experienced by traditional fixed-income securities. The occurrence of mortgage prepayments is affected by factors including the level of interest rates, general economic conditions, the location and age of the mortgage and other social and demographic conditions. During periods of falling interest rates, the rate of mortgage prepayments tends to increase, thereby tending to decrease the life of mortgage-backed securities. During periods of rising interest rates, the rate of mortgage prepayments usually decreases, thereby tending to increase the life of mortgage-backed securities. If the life of a mortgage-backed security is inaccurately predicted, the fund may not be able to realize the rate of return it expected.

The fund may invest in mortgage-backed securities that represent pools of mortgage loans with variable rates of interest (such loans, "ARMs"). Adjustable-rate mortgage-backed securities, like traditional mortgage-backed securities, are interests in pools of

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mortgage loans that provide investors with payments consisting of both principal and interest as mortgage loans in the underlying mortgage pool are paid off by the borrowers. Unlike fixed-rate mortgage-backed securities, adjustable-rate mortgage-backed securities are collateralized by or represent interests in ARMs. Interest rates for ARMs are reset at periodic intervals, usually by reference to an interest rate index or market interest rate. Although the rate adjustment feature may act as a buffer to reduce sharp changes in the value of ARMs these securities are still subject to changes in value based on, among other things, changes in market interest rates or changes in the issuer's creditworthiness. If rates increase due to a reset, the risk of default by underlying borrowers may increase. Because the interest rates are reset only periodically, changes in the interest rate on ARMs may lag changes in prevailing market interest rates. The market value of an adjustable-rate mortgage-backed security may be adversely affected if interest rates increase faster than the rates of interest payable on the ARMs underlying the security. Also, some ARMs are subject to caps or floors that limit the maximum change in the interest rate during a specified period or over the life of the ARM. As a result, changes in the interest rate on an ARM may not fully reflect changes in prevailing market interest rates during certain periods.

The fund may also invest in mortgage-backed securities that represent pools of "hybrid" ARMs, underlying mortgages that combine fixed-rate and adjustable rate features. A hybrid ARM is a type of mortgage in which the interest rate is fixed for a specified period and then resets periodically, or floats, for the remaining mortgage term. During the initial interest period, hybrid ARMs behave more like fixed-rate mortgage loans. All hybrid ARMs have a reset date, the date on which a hybrid ARM changes from a fixed interest rate to a floating interest rate. At the reset date, a hybrid ARM can adjust by a maximum specified amount based on a margin over an identified index. Like ARMs, hybrid ARMs have periodic and lifetime limitations on the increases that can be made to the interest rates that mortgagors pay. Therefore, if during a floating rate period interest rates rise above the interest rate limits of the hybrid ARM, a fund holding a security backed by that hybrid ARM does not benefit from further increases in interest rates.

Mortgage-backed and asset-backed securities are less effective than other types of securities as a means of "locking in" attractive long-term interest rates. One reason is the need to reinvest prepayments of principal; another is the possibility of significant unscheduled prepayments resulting from declines in interest rates. These prepayments would have to be reinvested at lower rates. The automatic interest rate adjustment feature of mortgages underlying ARMs likewise reduces the ability to lock-in attractive rates. As a result, mortgage-backed and asset-backed securities may have less potential for capital appreciation during periods of declining interest rates than other securities of comparable maturities, although they may have a similar risk of decline in market value during periods of rising interest rates. Prepayments may also significantly shorten the effective maturities of these securities, especially during periods of declining interest rates. Conversely, during periods of rising interest rates, a reduction in prepayments may increase the effective maturities of these securities, subjecting them to a greater risk of decline in market value in response to rising interest rates than traditional debt securities, and, therefore, potentially increasing the volatility of the fund.

At times, some mortgage-backed and asset-backed securities will have higher than market interest rates and therefore will be purchased at a premium above their par value. Prepayments may cause greater losses on securities purchased at a premium than securities that are not purchased at a premium.

Mortgage-backed and asset-backed securities are subject to varying degrees of credit risk, depending on whether they are issued, or are guaranteed or insured, by agencies or instrumentalities of the U.S. government or by non-governmental issuers. Securities issued by private organizations may not be readily marketable, and since the deterioration of worldwide economic and liquidity conditions that became acute in 2008, mortgage-backed and asset-backed securities have been subject to greater liquidity risk. These conditions may occur again. Also, government actions and proposals affecting the terms of underlying home loans, changes in demand for products (e.g., automobiles) financed by those loans, and the inability of borrowers to refinance existing loans (e.g., sub-prime mortgages), have had, and may continue to have, adverse valuation and liquidity effects on mortgage-backed and asset-backed securities., There can be no assurance that in the future the market for mortgage-backed and asset-backed securities will continue to improve and become more liquid.

Mortgage-related securities include, among other things, securities that reflect an interest in a pool of reverse mortgages. In a reverse mortgage, a lender makes a loan to a homeowner based on the homeowner's equity in his or her home. A homeowner must be age 62 or older to qualify for a reverse mortgage but is not necessarily required to have any minimum income. Generally, the homeowner is not required to pay interest or repay principal on the loan until the homeowner dies, sells the home, or ceases to use the home as his or her primary residence. There are three general types of reverse mortgages: (1) single-purpose reverse mortgages, which are offered by certain state and local government agencies and nonprofit organizations; (2) federally-insured reverse mortgages (known as home equity conversion mortgages), which are backed by the U. S. Department

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of Housing and Urban Development; and (3) proprietary reverse mortgages, which are privately offered loans. A mortgage-related security may be backed by a single type of reverse mortgage or by a combination of types of reverse mortgages. Reverse mortgage-related securities include agency and privately issued mortgage-related securities. The principal government guarantor of reverse mortgage-related securities is Ginnie Mae.

Reverse mortgage-related securities may be subject to risks different than other types of mortgage-related securities due to the unique nature of the underlying loans. The date of repayment for these loans is uncertain and may occur sooner or later than anticipated. The timing of payments for the corresponding mortgage-related security may also be uncertain. Because reverse mortgages are offered only to persons 62 and older and there may be no income restrictions, the loans may react differently than traditional home loans to market events. As a result, investors (which may include the fund) in notes issued by reverse mortgage trusts ("RMTs") may be deprived of payments to which they are entitled. This could result in losses to the fund. Investors, including the fund, may determine to pursue negotiations or legal claims or otherwise seek compensation from RMT service providers in certain instances. This may involve the fund incurring costs and expenses associated with such actions.

CMOs may be issued by a U.S. government agency or instrumentality or by a private issuer. Although payment of the principal of, and interest on, the underlying collateral securing privately issued CMOs may be guaranteed by the U.S. government or its agencies or instrumentalities (such as Freddie Mac, Fannie Mae, or Ginnie Mae), these CMOs represent obligations solely of the private issuer and are not insured or guaranteed by the U.S. government, its agencies or instrumentalities or any other person or entity. CMOs may also be less liquid and may exhibit greater price volatility than other types of mortgage- or other asset-backed securities.

CMOs are designed to reduce the risk of prepayment for investors by issuing multiple classes of securities (or "tranches"), each having different maturities, interest rates and payment schedules, and with the principal and interest on the underlying mortgages allocated among the several classes in various ways. Payment of interest or principal on some classes or series of CMOs may be subject to contingencies or some classes or series may bear some or all of the risk of default on the underlying mortgages. CMOs of different classes or series are generally retired in sequence as the underlying mortgage loans in the mortgage pool are repaid. If enough mortgages are repaid ahead of schedule, the classes or series of a CMO with the earliest maturities generally will be retired prior to their maturities. Thus, the early retirement of particular classes or series of a CMO would have the same effect as the prepayment of mortgages underlying other mortgage-backed securities. Conversely, slower than anticipated prepayments can extend the effective maturities of CMOs, subjecting them to a greater risk of decline in market value in response to rising interest rates than traditional debt securities, and, therefore, potentially increasing their volatility.

Prepayments could result in losses on stripped mortgage-backed securities. Stripped mortgage-backed securities are usually structured with two classes that receive different portions of the interest and principal distributions on a pool of mortgage loans. A common type of stripped mortgage-backed security will have one class receiving all of the interest from the mortgage assets (interest only or "IOs"), while the other class will receive all of the principal (principal only or "POs"). The yield to maturity on an IO class of stripped mortgage-backed securities is extremely sensitive not only to changes in prevailing interest rates but also to the rate of principal payments (including prepayments) on the underlying assets. A rapid rate of principal prepayments may have a measurable adverse effect on the stripped mortgage-backed security's yield to maturity to the extent it invests in IOs. If the assets underlying the IO experience greater than anticipated prepayments of principal, the fund may fail to recoup fully its initial investment in these securities. Conversely, POs tend to increase in value if prepayments are greater than anticipated and decline if prepayments are slower than anticipated. Generally, the market value of POs is unusually volatile in response to changes in interest rates. The secondary market for stripped mortgage-backed securities may be more volatile and less liquid than that for other mortgage-backed securities, potentially limiting the fund's ability to buy or sell those securities at any particular time.

The risks associated with other asset-backed securities (including in particular the risks of issuer default and of early prepayment) are generally similar to those described above for CMOs. In addition, because asset-backed securities generally do not have the benefit of a security interest in the underlying assets that is comparable to a mortgage, asset-backed securities present certain additional risks that are not present with mortgage-backed securities. The ability of an issuer of asset-backed securities to enforce its security interest in the underlying assets may be limited. For example, revolving credit receivables are generally unsecured and the debtors on such receivables are entitled to the protection of a number of state and federal consumer credit laws, many of which give debtors the right to set-off certain amounts owed, thereby reducing the balance due. Automobile receivables generally are secured, but by automobiles, rather than by real property.

The value of asset-backed securities may be substantially dependent on the servicing of the underlying assets, and asset-backed securities are therefore subject to risks associated with negligence by, or defalcation of, the servicers of those assets.

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These risks may be heightened in the case of an asset-backed security collateralized by the fees earned by the servicer, as the servicer may have a reduced financial incentive to provide appropriate servicing. In certain circumstances, the mishandling of related documentation may also affect the rights of the security holders in and to the underlying collateral. The insolvency of entities that generate receivables or that utilize the assets may result in added costs and delays in addition to losses associated with a decline in the value of the underlying assets.

Payment of interest on asset-backed securities and repayment of principal largely depends on the cash flows generated by the underlying assets backing the securities and, in certain cases, may be supported by letters of credit, surety bonds, or other credit enhancements. The amount of market risk associated with asset-backed securities depends on many factors, including the deal structure (i.e., determination as to the amount of underlying assets or other support needed to produce the cash flows necessary to service interest and make principal payments), the quality of the underlying assets, the level of credit support, if any, provided for the securities, and the credit quality of the credit-support provider, if any. In recent years, a significant number of asset-backed security insurers have defaulted on their obligations.

Consistent with the fund's investment objective and policies, the fund may invest in other types of mortgage- and asset-backed securities offered currently or in the future, including certain yet-to-be-developed types of mortgage- and asset-backed securities which may be created as the market evolves.

**Additional Information Related to Freddie Mac and Fannie Mae***.* The extreme and unprecedented volatility and disruption that impacted the capital and credit markets beginning in 2008 led to market concerns regarding the ability of Freddie Mac and Fannie Mae to withstand future credit losses associated with securities held in their investment portfolios, and on which they provide guarantees, without the direct support of the federal government. On September 7, 2008, Freddie Mac and Fannie Mae were placed under the conservatorship of the Federal Housing Finance Agency (FHFA). Under the plan of conservatorship, the FHFA assumed control of, and generally has the power to direct, the operations of Freddie Mac and Fannie Mae, and is empowered to exercise all powers collectively held by their respective shareholders, directors and officers, including the power to: (1) take over the assets of and operate Freddie Mac and Fannie Mae with all the powers of the shareholders, the directors and the officers of Freddie Mac and Fannie Mae and conduct all business of Freddie Mac and Fannie Mae; (2) collect all obligations and money due to Freddie Mac and Fannie Mae; (3) perform all functions of Freddie Mac and Fannie Mae which are consistent with the conservator's appointment; (4) preserve and conserve the assets and property of Freddie Mac and Fannie Mae; and (5) contract for assistance in fulfilling any function, activity, action or duty of the conservator.

In connection with the actions taken by the FHFA, the Treasury has entered into certain preferred stock purchase agreements (SPAs) with each of Freddie Mac and Fannie Mae which establish the Treasury as the holder of a new class of senior preferred stock in each of Freddie Mac and Fannie Mae. The senior preferred stock was issued in connection with financial contributions from the Treasury to Freddie Mac and Fannie Mae. Although the SPAs are subject to amendment from time to time, currently the Treasury is obligated to provide such financial contributions up to an aggregate maximum amount determined by a formula set forth in the SPAs, and until such aggregate maximum amount is reached, there is not a specific end date to the Treasury's obligations.

The future status and role of Freddie Mac and Fannie Mae could be impacted by (among other things) the actions taken and restrictions placed on Freddie Mac and Fannie Mae by the FHFA in its role as conservator, the restrictions placed on Freddie Mac's and Fannie Mae's operations and activities under the SPAs, market responses to developments at Freddie Mac and Fannie Mae, downgrades or upgrades in the credit ratings assigned to Freddie Mac and Fannie Mae by nationally recognized statistical rating organizations (NRSROs) or ratings services, and future legislative and regulatory action that alters the operations, ownership, structure and/or mission of these institutions, each of which may, in turn, impact the value of, and cash flows on, any securities guaranteed by Freddie Mac and Fannie Mae.

In addition, the future of Freddie Mac and Fannie Mae, and other U.S. government-sponsored enterprises that are not backed by the full faith and credit of the U.S. government (GSEs), remains in question as the U.S. government continues to consider options ranging from structural reform, nationalization, privatization, or consolidation, to outright elimination. The issues that have led to significant U.S. government support for Freddie Mac and Fannie Mae have sparked serious debate regarding the continued role of the U.S. government in providing mortgage loan liquidity.

#### Options on Securities

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**Writing covered options**. The fund may write (*i.e.*, sell) covered call options and covered put options on optionable securities held in its portfolio or that it has an absolute and immediate right to acquire without additional cash consideration (or, if additional cash consideration is required, cash or other assets determined to be liquid by the Investment Manager in accordance with procedures established by the Trustees, in such amount as are set aside on the fund's books), when in the opinion of the Investment Manager such transactions are consistent with the fund's goal(s) and policies. Call options written by the fund give the purchaser the right to buy the underlying securities from the fund at a stated exercise price, regardless of the security's market price; put options written by the fund give the purchaser the right to sell the underlying securities to the fund at a stated exercise price, regardless of the security's market price.

The fund will receive a premium from writing a put or call option, which increases the fund's return on the underlying security in the event the option expires unexercised or is closed out at a profit. The amount of the premium reflects, among other things, the relationship between the exercise price and the current market value of the underlying security, the volatility of the underlying security, the amount of time remaining until expiration, current interest rates, and the effect of supply and demand in the options market and in the market for the underlying security. By writing a call option, if the fund holds the security, the fund limits its opportunity to profit from any increase in the market value of the underlying security above the exercise price of the option but continues to bear the risk of a decline in the value of the underlying security. If the fund does not hold the underlying security, the fund bears the risk that, if the market price exceeds the option strike price, the fund will suffer a loss equal to the difference at the time of exercise. By writing a put option, the fund assumes the risk that it may be required to purchase the underlying security for an exercise price higher than its then-current market value, resulting in a potential capital loss unless the security subsequently appreciates in value.

The fund may terminate an option that it has written prior to its expiration by entering into a closing purchase transaction, in which it purchases an offsetting option. A closing purchase transaction will ordinarily be effected in order to realize a profit on an outstanding option, to prevent an underlying instrument from being called, to permit the sale of the underlying instrument or to permit the writing of a new option containing different terms on such underlying instrument. The fund realizes a profit or loss from a closing transaction if the cost of the transaction (option premium plus transaction costs) is less or more than the premium received from writing the option. Because increases in the market price of a call option generally reflect increases in the market price of the security underlying the option, any loss resulting from a closing purchase transaction may be offset in whole or in part by unrealized appreciation of the underlying security.

If the fund writes a call option but does not own the underlying security, and when it writes a put option, the fund may be required to deposit cash or securities with its broker as "margin," or collateral, for its obligation to buy or sell the underlying security. As the value of the underlying security varies, the fund may have to deposit additional margin with the broker. Margin requirements are complex and are fixed by individual brokers, subject to minimum requirements currently imposed by the Federal Reserve Board and by stock exchanges and other self-regulatory organizations.

**Purchasing put options**. The fund may purchase put options to protect its portfolio holdings in an underlying security against a decline in market value. Such protection is provided during the life of the put option since the fund, as holder of the option, is able to sell the underlying security at the put exercise price regardless of any decline in the underlying security's market price. If such a price decline occurs, the put option will permit the fund to sell the security at the higher exercise price or to close out the option at a profit. In order for a put option to be profitable, the market price of the underlying security must decline sufficiently below the exercise price to cover the premium and transaction costs. By using put options in this manner, the fund will reduce any profit it might otherwise have realized from appreciation of the underlying security by the premium paid for the put option and by transaction costs. The fund may also purchase put options for other investment purposes, including to take a short position in the security underlying the put option.

**Purchasing call options**. The fund may purchase call options to hedge against an increase in the price of securities that the fund wants ultimately to buy. Such protection is provided during the life of the call option since the fund, as holder of the call option, is able to buy the underlying security at the exercise price regardless of any increase in the underlying security's market price. If such a price increase occurs, a call option will permit the fund to purchase the securities at the exercise price or to close out the option at a profit. In order for a call option to be profitable, the market price of the underlying security must rise sufficiently above the exercise price to cover the premium and transaction costs. The fund may also purchase call options for other investment purposes.

**Risk factors in options transactions**. The successful use of the fund's options strategies depends on the ability of the Investment Manager to forecast correctly interest rate and market movements. For example, if the fund were to write a call option

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based on the Investment Manager's expectation that the price of the underlying security would fall, but the price were to rise instead, the fund could be required to sell the security upon exercise at a price below the current market price. Similarly, if the fund were to write a put option based on the Investment Manager's expectation that the price of the underlying security would rise, but the price were to fall instead, the fund could be required to purchase the security upon exercise at a price higher than the current market price.

When the fund purchases an option, it runs the risk that it will lose its entire investment in the option in a relatively short period of time, unless the fund exercises the option or enters into a closing sale transaction before the option's expiration. If the price of the underlying security does not rise (in the case of a call) or fall (in the case of a put) to an extent sufficient to cover the option premium and transaction costs, the fund will lose part or all of its investment in the option. This contrasts with an investment by the fund in the underlying security, since the fund will not realize a loss if the security's price does not change.

The effective use of options also depends on the fund's ability to terminate option positions at times when the Investment Manager deems it desirable to do so. There is no assurance that the fund will be able to effect closing transactions at any particular time or at an acceptable price. If a secondary market in options were to become unavailable, the fund could no longer engage in closing transactions. Lack of investor interest might adversely affect the liquidity of the market for particular options or series of options. A market may discontinue trading of a particular option or options generally. In addition, a market could become temporarily unavailable if unusual events — such as volume in excess of trading or clearing capability — were to interrupt its normal operations. Although the fund may be able to offset to some extent any adverse effects of being unable to terminate an option position, the fund may experience losses in some cases as a result of such inability.

A market may at times find it necessary to impose restrictions on particular types of exchange-traded options transactions, such as opening transactions. For example, if an underlying security ceases to meet qualifications imposed by the market or the Options Clearing Corporation, new series of options on that security will no longer be opened to replace expiring series, and opening transactions in existing series may be prohibited. If an options market were to become unavailable, the fund as a holder of an option would be able to realize profits or limit losses only by exercising the option, and the fund, as option writer, would remain obligated under the option until expiration or exercise.

Disruptions in the markets for the securities underlying options purchased or sold by the fund could result in losses on the options. For example, if a fund is unable to purchase a security underlying a put option it had purchased, the fund may be unable to exercise the put option. If trading is interrupted in an underlying security, the trading of options on that security is normally halted as well. As a result, the fund as purchaser or writer of an option will be unable to close out its positions until options trading resumes, and it may be faced with considerable losses if trading in the security reopens at a substantially different price. In addition, the Options Clearing Corporation or other options markets may impose exercise restrictions in respect of exchange-traded options. If a prohibition on exercise is imposed at the time when trading in the option has also been halted, the fund as purchaser or writer of an option will be locked into its position until one of the two restrictions has been lifted. If the Options Clearing Corporation were to determine that the available supply of an underlying security appears insufficient to permit delivery by the writers of all outstanding calls in the event of exercise, it may prohibit indefinitely the exercise of put options. The fund, as holder of such a put option, could lose its entire investment if it is unable to exercise the put option prior to its expiration.

The fund may use both European-style options, which are only exercisable at a specific expiration time on the expiration date, and American-style options, which are exercisable at any time prior to the expiration date. Since an American-style option allows the holder to exercise its rights any time before the option's expiration, the writer of an American-style option has no control over when it will be required to fulfill its obligations as a writer of the option. (The writer of a European-style option is not subject to this risk because the holder may only exercise the option on its expiration date.)

Options can be traded either through established exchanges ("exchange traded options") or privately negotiated transactions (over-the-counter or "OTC" options). Exchange traded options are standardized with respect to, among other things, the underlying interest, expiration date, contract size and strike price. The terms of OTC options are generally negotiated by the parties to the option contract which allows the parties greater flexibility in customizing the agreement, but OTC options are generally less liquid than exchange traded options. OTC options purchased by the fund and assets held to cover OTC options written by the fund may, under certain circumstances, be considered illiquid securities for purposes of any limitation on the fund's ability to invest in illiquid securities. All option contracts involve credit risk if the counterparty to the option contract (e.g., the clearing house or OTC counterparty) or the third party effecting the transaction in the case of cleared options (e.g., futures commission merchant or broker/dealer) fails to perform. The credit risk in OTC options that are not cleared is dependent on the

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credit worthiness of the individual counterparty to the contract and may be greater than the credit risk associated with cleared options.

Foreign-traded options are subject to many of the same risks presented by internationally-traded securities. In addition, because of time differences between the United States and other countries, and because different holidays are observed in different countries, foreign options markets may be open for trading during hours or on days when U.S. markets are closed. As a result, option premiums may not reflect the current prices of the underlying interest in the United States.

There are significant differences between the securities and options markets that could result in an imperfect correlation between these markets, causing a given transaction not to achieve its objectives. In addition, many options, in particular OTC options, are complex and often valued based on subjective factors. Improper valuations can result in increased cash payment requirements to counterparties or a loss of value to the fund.

The market price of an option is affected by many factors, including changes in the market prices or dividend rates of underlying securities (or in the case of indices, the securities in such indices); the time remaining before expiration; changes in interest rates or exchange rates; and changes in the actual or perceived volatility of the relevant stock market and underlying securities. The market price of an option also may be adversely affected if the market for the option becomes less liquid.

In addition to options on securities and futures, the fund may also enter into options on futures, swaps, or other instruments as described elsewhere in this SAI.

#### Preferred Stocks and Convertible Securities
The fund may invest in preferred stocks or convertible securities. A preferred stock is a class of stock that generally pays dividends at a specified rate and has preference over common stock in the payment of dividends and the liquidation of an issuer's assets but is junior to the debt securities of the issuer in those same respects. Under ordinary circumstances, preferred stock does not carry voting rights. As with all equity securities, the value of preferred stock fluctuates based on changes in a company's financial condition and on overall market and economic conditions. The value of preferred stocks is particularly sensitive to changes in interest rates and is more sensitive to changes in an issuer's creditworthiness than is the value of debt securities. In addition, many preferred stocks may be called or redeemed prior to their maturity by the issuer under certain conditions, which can limit the benefit to investors of a decline in interest rates. Shareholders of preferred stock may suffer a loss of value if dividends are not paid. Additionally, if the issuer of preferred stock experiences economic or financial difficulties, its preferred stock may lose value due to the reduced likelihood that its board of directors will declare a dividend. Certain preferred stocks contain provisions that allow an issuer under certain conditions to skip or defer distributions. If the fund owns a preferred stock that is deferring its distribution, it may be required to report income for tax purposes despite the fact that it is not receiving current income on this position. Preferred stocks often are subject to legal provisions that allow for redemption in the event of certain tax or legal changes or at the issuer's call. In the event of redemption, the fund may not be able to reinvest the proceeds at comparable rates of return. Preferred stocks are subordinated to bonds and other debt securities in an issuer's capital structure in terms of priority for corporate income and liquidation payments, and therefore will be subject to greater credit risk than those debt securities. Preferred stocks may trade less frequently and in a more limited volume and may be subject to more abrupt or erratic price movements than many other securities, such as common stocks, corporate debt securities, and U.S. government securities.

Convertible securities include bonds, debentures, notes, preferred stocks and other securities that may be converted into or exchanged for, at a specific price or formula within a particular period of time, a prescribed amount of common stock or other equity securities of the same or a different issuer. The conversion may occur automatically upon the occurrence of a predetermined event or at the option of either the issuer or the security holder. The holder of a convertible security is generally entitled to participate in the capital appreciation resulting from a market price increase in the issuer's common stock and to receive interest paid or accrued on debt or dividends paid or accrued until the convertible security matures or is redeemed, converted or exchanged. Before conversion, convertible securities have characteristics similar to non-convertible debt or preferred securities, as applicable. Convertible securities rank senior to common stock in an issuer's capital structure and, therefore, normally entail less risk than the issuer's common stock. However, convertible securities may also be subordinate to any senior debt obligations of the issuer, and, therefore, an issuer's convertible securities may entail more risk than such senior debt obligations. Convertible securities usually offer lower interest or dividend yields than non-convertible debt securities of similar credit quality because of the potential for capital appreciation. In addition, convertible securities are often lower-rated securities.

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The market value of a convertible security is a function of its "investment value" and its "conversion value." A security's "investment value" represents the value of the security without its conversion feature (*i.e.*, a nonconvertible fixed income security). The investment value may be determined by reference to its credit quality and the current value of its yield to maturity or probable call date. At any given time, investment value may be dependent upon such factors as the general level of interest rates, the yield of similar nonconvertible securities, the financial strength of the issuer and the seniority of the security in the issuer's capital structure. A security's "conversion value" is determined by multiplying the number of shares the holder is entitled to receive upon conversion or exchange by the current market price of the underlying security. Because of the conversion feature, the market value of a convertible security will normally fluctuate in some proportion to changes in the market value of the underlying security, and, accordingly, convertible securities are subject to risks relating to the activities of the issuer and/or general market and economic conditions.

A convertible security generally will sell at a premium over its conversion value by the extent to which investors place value on the right to acquire the underlying common stock while holding a fixed income security. If the conversion value of a convertible security is significantly below its investment value, the convertible security generally trades like nonconvertible debt or preferred stock and its market value will not be influenced greatly by fluctuations in the market price of the underlying security. Conversely, if the conversion value of a convertible security is near or above its investment value, the market value of the convertible security is typically more heavily influenced by fluctuations in the market price of the underlying security. Generally, the amount of the premium decreases as the convertible security approaches maturity. Convertible securities generally have less potential for gain than common stocks.

The fund's investments in convertible securities may at times include securities that have a mandatory conversion feature, pursuant to which the securities convert automatically into common stock or other equity securities at a specified date and a specified conversion ratio, or that are convertible at the option of the issuer. Because conversion of the security is not at the option of the holder, the fund may be required to convert the security into the underlying common stock even at times when the value of the underlying common stock or other equity security has declined substantially.

The fund's investments in preferred stocks and convertible securities, particularly securities that are convertible into securities of an issuer other than the issuer of the convertible security, may be illiquid. The fund may not be able to dispose of such securities in a timely fashion or for a fair price, which could result in losses to the fund.

#### Private Placements and Restricted Securities
The fund may invest in securities that are purchased in private placements and, accordingly, are subject to restrictions on resale as a matter of contract or under federal securities laws. Because there may be relatively few potential purchasers for such investments, especially under adverse market or economic conditions or in the event of adverse changes in the financial condition of the issuer, the fund could find it more difficult to sell such securities when the Investment Manager believes it advisable to do so or may be able to sell such securities only at prices lower than if such securities were more widely held. There can be no assurance that a liquid market will exist for any such security at any particular time, and a security which when purchased was liquid in the institutional markets may subsequently become illiquid.

Many private placement securities are issued by companies that are not required to file periodic financial reports, leading to challenges in evaluating the company's overall business prospects and gauging how the investment is likely to perform over time. In addition, market quotations for these securities are less readily available. Due to the more limited financial information and lack of publicly available prices, it may be more difficult to determine the fair value of these securities for purposes of computing the fund's net asset value. As a result, the judgment of the Investment Manager may at times play a greater role in valuing these securities than in the case of publicly traded securities, and the fair value prices determined for the fund could differ from those of other market participants.

While such private placements may offer attractive opportunities for investment not otherwise available on the open market, the securities so purchased are often "restricted securities," i.e., securities which cannot be sold to the public without registration under the Securities Act of 1933 (the "Securities Act") or the availability of an exemption from registration (such as Rules 144, 144A or Regulation S), or which are "not readily marketable" because they are subject to other legal or contractual delays in or restrictions on resale. In addition, the issuer typically does not have an obligation to provide liquidity to investors by buying the securities back when the investor wants to sell. Disposing of these securities may involve time-consuming negotiation and legal expenses, and it may be difficult or impossible for the fund to sell them promptly at an acceptable price. The fund may have to bear the extra expense of registering these securities for resale and the risk of substantial delay in effecting the registration.

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Since the offering is not registered with the SEC, investors in a private placement have less protection under the federal securities laws against improper practices than investors in registered securities.

Generally speaking, restricted securities may be sold only to qualified institutional buyers, or in a privately negotiated transaction to a limited number of purchasers, or in limited quantities after they have been held for a specified period of time and other conditions are met pursuant to an exemption from registration, or in a public offering for which a registration statement is in effect under the Securities Act. The fund may be deemed to be an "underwriter" for purposes of the Securities Act when selling restricted securities to the public, and in such event the fund may be liable to purchasers of such securities if the registration statement prepared by the issuer, or the prospectus forming a part of it, is materially inaccurate or misleading. The SEC Staff currently takes the view that any delegation by the Trustees of the authority to determine that a restricted security is readily marketable (as described in the investment restrictions of the funds) must be pursuant to written procedures established by the Trustees and the Trustees have delegated such authority to the Investment Manager.

#### Real Estate Investment Trusts (REITs)
The fund may invest in REITs. REITs are pooled investment vehicles that invest primarily in income-producing real estate or real estate related loans or interests. REITs may concentrate their investments in specific geographic areas or in specific property types (i.e., hotels, shopping malls, residential complexes and office buildings). Like regulated investment companies such as the fund, REITs are not taxed on income distributed to shareholders provided that they comply with certain requirements under the Code. The fund will indirectly bear its proportionate share of any expenses (such as operating expenses and advisory fees) paid by REITs in which it invests in addition to the fund's own expenses.

Investing in REITs may involve certain unique risks in addition to those risks associated with investing in the real estate industry in general (such as possible declines in the value of real estate, lack of availability of mortgage funds, or extended vacancies of property). The market value of REIT shares and the ability of the REITs to distribute income may be adversely affected by several factors, including rising interest rates, changes in the national, state and local economic climate and real estate conditions, perceptions of prospective tenants of the safety, convenience and attractiveness of the properties, the ability of the owners to provide adequate management, maintenance and insurance, the cost of complying with the Americans with Disabilities Act, increased competition from new properties, the impact of present or future environmental legislation and compliance with environmental laws, failing to maintain their exemptions from registration under the Investment Company Act, changes in real estate taxes and other operating expenses, adverse changes in governmental rules and fiscal policies, adverse changes in zoning laws, and other factors beyond the control of the issuers of the REITs.

REITs are generally classified as equity REITs, mortgage REITs or a combination of equity and mortgage REITs ("hybrid REITs"). Equity REITs invest the majority of their assets directly in real property and derive income primarily from the collection of rents. Equity REITs can also realize capital gains by selling properties that have appreciated in value. Mortgage REITs invest the majority of their assets in real estate mortgages and derive income from the collection of interest payments. Equity REITs may be affected by changes in the value of the underlying property owned by the REITs, while mortgage REITs may be affected by the risk of borrower default, the likelihood of which is increased for mortgage REITs that invest in sub-prime mortgages. REITs, and mortgage REITs in particular, are also subject to interest rate risk. Rising interest rates may cause REIT investors to demand a higher annual yield, which may, in turn, cause a decline in the market price of the equity securities issued by a REIT. Rising interest rates also generally increase the costs of obtaining financing, which could cause the value of the fund's REIT investments to decline. During periods when interest rates are declining, mortgages are often refinanced. Refinancing may reduce the yield on investments in mortgage REITs. In addition, since REITs depend on payment under their mortgage loans and leases to generate cash to make distributions to their shareholders, investments in REITs may be adversely affected by defaults on such mortgage loans or leases. A hybrid REIT combines the characteristics of equity REITs and mortgage REITs, generally by holding both ownership interests and mortgage interests in real estate, and thus may be subject to risks associated with both real estate ownership and investments in mortgage-related securities.

Investing in certain REITs, which often have small market capitalizations, may also involve the same risks as investing in other small capitalization companies. REITs may have limited financial resources and their securities may trade less frequently and in limited volume and may be subject to more abrupt or erratic price movements than larger company securities. Historically, small capitalization stocks, such as REITs, have been more volatile in price than the larger capitalization stocks such as those included in the S&P 500 Index. The management of a REIT may be subject to conflicts of interest with respect to the operation of the business of the REIT and may be involved in real estate activities competitive with the REIT. REITs may own properties through

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joint ventures or in other circumstances in which the REIT may not have control over its investments. REITs may incur significant amounts of leverage.

REITs are dependent upon their operators' management skills, are generally not diversified (except to the extent the Code requires), and are subject to heavy cash flow dependency, borrower default or self-liquidation. REITs are also subject to the possibility of failing to qualify for the tax-advantaged treatment available to REITs under the Code or failing to maintain their exemptions from registration under the 1940 Act. In addition, REITs may be adversely affected by changes in federal tax law, for example, by limiting their permissible businesses or investments. REITs may have limited financial resources, may trade less frequently and in a limited volume, and may be subject to more abrupt or erratic price movements than more widely held securities.

The fund's investment in a REIT may result in the fund making distributions that constitute a return of capital to fund shareholders for federal income tax purposes or may require the fund to accrue and distribute income not yet received. In addition, distributions by a fund from REITs will not qualify for the corporate dividends-received deduction, or, generally, for treatment as qualified dividend income.

#### Redeemable Securities
Certain securities held by the fund may permit the issuer at its option to "call" or redeem its securities. Issuers of redeemable securities are generally more likely to exercise a "call" option in periods when interest rates are below the rate at which the original security was issued. If an issuer were to redeem securities held by the fund during a time of declining interest rates, the fund may not be able to reinvest the proceeds in securities providing the same investment return as the securities redeemed.

The fund also may fail to recover additional amounts (i.e., premiums) paid for securities with higher interest rates, resulting in an unexpected capital loss.

#### Repurchase Agreements
A repurchase agreement is a contract under which the fund, the buyer under the contract, acquires a security for a relatively short period (usually not more than one week) subject to the obligation of the seller (or repurchase agreement counterparty) to repurchase, and the fund to resell, the security at a fixed time and price, which represents the fund's cost plus interest (or, for repurchase agreements under which the fund acquires a security and then sells it short, the fund's cost of "borrowing" the security). A repurchase agreement with a stated maturity of longer than one week is generally considered an illiquid investment. It is the fund's present intention to enter into repurchase agreements only with banks and registered broker-dealers. The fund may enter into repurchase agreements, including with respect to securities it wishes to sell short. See "Short Sales" in this SAI. Certain of the repurchase agreements related to securities sold short may provide that, at the option of the fund, settlement may be made by delivery of cash equal to the difference between (a) the sum of (i) the market value of the securities sold short at the time the repurchase agreement is closed out and (ii) transaction costs associated with the acquisition in the market by the repurchase agreement counterparty of the securities sold short and (b) the repurchase price specified in the repurchase agreement.

The fund may be exposed to the credit risk of the repurchase agreement counterparty (or seller) in the event that the counterparty is unable or unwilling to close out the repurchase agreement in accordance with its terms or the parties disagree as to the meaning or application of those terms. In such an event, the fund may be subject to expenses, delays, and risk of loss, including: (i) possible declines in the value of the underlying security while the fund seeks to enforce its rights under the agreement; (ii) possible reduced levels of income and lack of access to income during this period; and (iii) the inability to enforce its rights and the expenses involved in attempted enforcement. If the seller defaults, the fund could realize a loss on the sale of the underlying security to the extent that the proceeds of the sale including accrued interest are less than the resale price provided in the agreement including interest. In addition, if the seller should be involved in bankruptcy or insolvency proceedings, the fund may incur delay and costs in selling the underlying security or may suffer a loss of principal and interest if the fund is treated as an unsecured creditor and required to return the underlying collateral to the seller's estate. The fund is also subject to the risk that the repurchase agreement instrument may not perform as expected.

Pursuant to no-action relief granted by the SEC, the fund may transfer uninvested cash balances into a joint account, along with cash of other Putnam funds and certain other accounts. These balances may be invested in one or more repurchase agreements and/or short-term money market instruments.

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The fund may also enter into reverse repurchase agreements. Under a reverse repurchase agreement, the fund sells portfolio assets to another party subject to an agreement by the fund to repurchase the same assets from that party at an agreed upon price and date. During the reverse repurchase agreement period, the fund continues to receive principal and interest payments on the assets and also has the opportunity to earn a return on the collateral furnished by the counterparty to secure its obligation to redeliver the assets. The fund can use the proceeds received from entering into a reverse repurchase agreement to make additional investments, which generally causes the fund's portfolio to behave as if it were leveraged.

When entering into a reverse repurchase agreement, the fund bears the risk of delay and costs involved in recovery of securities if the initial purchaser of the securities fails to return the securities upon repurchase or fails financially. These delays and costs could be greater with respect to foreign securities. Although securities repurchase transactions are generally marked to market daily, the fund also faces the risk that securities subject to a reverse repurchase transaction will decline quickly in value, and the fund will remain obligated to repurchase those securities at a higher price, potentially resulting in a loss. If the buyer in a reverse repurchase agreement files for bankruptcy or becomes insolvent, the fund may be unable to recover the securities it sold and as a result would realize a loss equal to the difference between the value of those securities and the payment it received for them. The size of this loss will depend upon the difference between what the buyer paid for the securities the fund sold to it and the value of those securities (e.g., a buyer may pay $95 for a bond with a market value of $100). In the event of a buyer's bankruptcy or insolvency, the fund's use of proceeds from the sale of its securities may be restricted while the other party or its trustee or receiver determines whether to honor the fund's right to repurchase the securities. The fund's use of reverse repurchase agreements also subjects the fund to interest costs based on the difference between the sale and repurchase price of a security involved in such a transaction. Additionally, reverse repurchase agreements entail the same risks as over-the-counter derivatives. These include the risk that the counterparty to the reverse repurchase agreement may not be able to fulfill its obligations, as discussed above, that the parties may disagree as to the meaning or application of contractual terms, or that the instrument may not perform as expected.

#### Securities of Other Investment Companies
Securities of other investment companies, including shares of open- and closed-end investment companies and unit investment trusts (which may include ETFs), represent interests in collective investment portfolios that, in turn, invest directly in underlying instruments. The fund may invest in other investment companies when it has more uninvested cash than the Investment Manager believes is advisable, when there is a shortage of direct investments available, or when the Investment Manager believes that investment companies offer attractive values.

Investment companies may be structured to perform in a similar fashion to a broad-based securities index or may focus on a particular strategy or class of assets. Passive ETFs typically seek to track the performance or dividend yield of specific indexes or companies in related industries, though unlike the index, an ETF incurs administrative expenses and transaction costs in trading securities. These indexes may be broad-based, sector-based or international. Investing in investment companies involves substantially the same risks as investing directly in the underlying instruments, but also involves expenses at the investment company-level, such as portfolio management fees and operating expenses. These expenses are in addition to the fees and expenses of the fund itself, which may lead to duplication of expenses while the fund owns another investment company's shares. In addition, investing in investment companies involves the risk that they will not perform in exactly the same fashion, or in response to the same factors, as the underlying instruments or index. To the extent the fund invests in other investment companies that are professionally managed, its performance will also depend on the investment and research abilities of investment managers other than the Investment Manager.

Open-end investment companies typically offer their shares continuously at net asset value plus any applicable sales charge and stand ready to redeem shares upon shareholder request. The shares of certain other types of investment companies, such as ETFs and closed-end investment companies, typically trade on a stock exchange or over-the-counter at a premium or a discount to their net asset value. In the case of closed-end investment companies, the number of shares is typically fixed. The securities of closed-end investment companies and ETFs carry the risk that the price the fund pays or receives may be higher or lower than the investment company's net asset value. ETFs also are subject to the risk that the timing and magnitude of cash inflows and outflows from and to investors buying and redeeming shares in the ETF could create cash balances that cause the ETF's performance to deviate from the index (which remains "fully invested" at all times). Performance of an ETF and the index it is designed to track also may diverge because the composition of the index and the securities held by the ETF may occasionally differ. ETFs and closed-end investment companies are also subject to certain additional risks, including the risks of illiquidity and of possible trading halts or interruptions due to policies of the relevant exchange, unusual market conditions or other reasons. There can be no assurance that shares of a closed-end investment company or ETF will continue to be listed on an active

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exchange. The shares of investment companies, particularly closed-end investment companies, may also be leveraged, which would increase the volatility of the fund's net asset value.

**Business development companies ("BDCs").** BDCs are a type of closed-end fund regulated under the 1940 Act, which typically invest in and lend to small-and medium-sized private companies that may lack access to public equity markets for capital raising. Under the 1940 Act, BDCs must invest at least 70% of the value of their total assets in certain asset types, which are typically the securities of private U.S. businesses. Additionally, BDCs must make available significant managerial assistance to the issuers of such securities. BDCs are not taxed on income distributed to shareholders provided they qualify as a regulated investment company under the Code. The funds will indirectly bear their proportionate share of any management and other expenses charged by the BDCs in which they invest.

Because BDCs typically invest in small and medium-sized companies, a BDC's portfolio is subject to the risks inherent in investing in smaller companies, including that portfolio companies may be dependent on a small number of products or services and may be more adversely affected by poor economic or market conditions. Some BDCs invest substantially, or even exclusively, in one sector or industry group and therefore the BDC may be susceptible to adverse conditions and economic or regulatory occurrences affecting the sector or industry group, which tends to increase volatility and result in higher risk. Investments in BDCs are also subject to management risk, including management's ability to meet the BDC's investment objective, and management's ability to manage the BDC's portfolio during periods of market turmoil and as investors' perceptions regarding a BDC or its underlying investments change.

The extent to which the fund can invest in securities of other investment companies, including ETFs, is generally limited by federal securities laws. For more information regarding the tax treatment of ETFs, please see "Taxes" below.

#### Short Sales
The fund may engage in short sales of securities and/or currencies either as a hedge against potential declines in value of a portfolio security or currency or to realize appreciation when a security or currency that the fund does not own declines in value. Short sales are transactions in which the fund sells a security or currency it does not own to a third party by borrowing the security or currency in anticipation of purchasing the same security or currency at the market price on a later date to close out the short position. The fund may also engage in short sales by entering into a repurchase agreement with respect to the security it wishes to sell short. See "Repurchase Agreements" in this SAI. The fund will incur a gain if the price of the security or currency declines between the date of the short sale and the date on which the fund replaces the borrowed security or currency; and the fund will incur a loss if the price of the security or currency increases between those dates. Such a loss is theoretically unlimited since the potential increase in the market price of the security or currency sold short is not limited. Until the security is replaced, the fund must pay the lender (or repurchase agreement counterparty) any dividends or interest that accrues during the period of the loan (or repurchase agreement). To borrow (or enter into a repurchase agreement with respect to) the security, the fund also may be required to pay a premium, which would increase the cost of the security sold. The fund's successful use of short sales is subject to the Investment Manager's ability to accurately predict movements in the market price of the security or currency sold short. Short selling may involve financial leverage because the fund is exposed both to changes in the market price of the security or currency sold short and to changes in the value of securities or currencies purchased with the proceeds of the short sale, effectively leveraging its assets. Under adverse market conditions, a fund may have difficulty purchasing securities to meet its short sale delivery obligations, and may be required to close out its short position at a time when the fund would not choose to do so, and may therefore have to sell portfolio securities to raise the capital necessary to meet its short sale obligations at a time when fundamental investment considerations may not favor such sales. There is also a risk that a borrowed security will need to be returned to the lender on short notice. If a request for return of borrowed securities occurs at a time when other short sellers of the securities are receiving similar requests, a "short squeeze" can occur, and the fund may be compelled to replace borrowed securities previously sold short with purchases on the open market at the most disadvantageous time, possibly at prices significantly in excess of the proceeds received in originally selling the securities short. In addition, the fund may have difficulty purchasing securities to meet its delivery obligations in the case of less liquid securities sold short by the fund, such as certain emerging market country securities or securities of companies with smaller market capitalizations. In connection with short sale transactions, the fund may be required to pledge certain additional assets for the benefit of the securities lender (or repurchase agreement counterparty) and the fund may, while such assets remain pledged, be limited in its ability to invest those assets in accordance with the fund's investment strategies.

Short selling is a technique that may be considered speculative and involves risks beyond the initial capital necessary to secure each transaction. It should be noted that possible losses from short sales differ from those losses that could arise from a cash

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investment in a security because losses from a short sale may be limitless, while the losses from a cash investment in a security cannot exceed the total amount of the investment in the security.

Certain of the repurchase agreements related to securities sold short may provide that, at the option of the fund, in lieu of delivering the securities sold short, settlement may be made by delivery of cash equal to the difference between (a) the sum of (i) the market value of the securities sold short at the time the repurchase agreement is closed out and (ii) transaction costs associated with the acquisition in the market by the repurchase agreement counterparty of the securities sold short and (b) the repurchase price specified in the repurchase agreement. Because that cash amount represents the fund's maximum loss in the event of the insolvency of the counterparty, the fund will, except where the local market practice for foreign securities to be sold short requires payment prior to delivery of such securities, treat such amount, rather than the full notional amount of the repurchase agreement, as its "investment" in securities of the counterparty for purposes of all applicable investment restrictions, including its fundamental policy with respect to diversification.

See "Legal and Regulatory Risks Relating to Investment Strategy" in this SAI.

#### Short-Term Trading
In seeking the fund's objective(s), the Investment Manager will buy or sell portfolio securities whenever the Investment Manager believes it appropriate to do so. From time to time the fund will buy securities intending to seek short-term trading profits. A change in the securities held by the fund is known as "portfolio turnover" and generally involves some expense to the fund. This expense may include brokerage commissions or dealer markups and other transaction costs on both the sale of securities and the reinvestment of the proceeds in other securities. If sales of portfolio securities cause the fund to realize net short-term capital gains, such gains will be taxable as ordinary income when distributed to taxable individual shareholders. As a result of the fund's investment policies, under certain market conditions the fund's portfolio turnover rate may be higher than that of other ETFs. Portfolio turnover rate for a fiscal year is the ratio of the lesser of purchases or sales of portfolio securities to the monthly average of the value of portfolio securities — excluding securities whose maturities at acquisition were one year or less. The fund's portfolio turnover rate is not a limiting factor when the Investment Manager considers a change in the fund's portfolio.

#### Special Purpose Acquisition Companies
The fund may invest in stock, rights, warrants, and other securities of special purpose acquisition companies ("SPACs") or similar special purpose entities. A SPAC is a publicly traded company that raises investment capital in the form of a blind pool via an IPO for the purpose of acquiring an existing company. The shares of a SPAC are typically issued in "units" that include one share of common stock and one right or warrant (or partial right or warrant) conveying the right to purchase additional shares or partial shares. At a specified time following the SPAC's IPO (generally 1-2 months), the rights and warrants may be separated from the common stock at the election of the holder, after which they become freely tradeable. After going public and until an acquisition is completed, a SPAC generally invests the proceeds of its IPO (less a portion retained to cover expenses), which are held in trust, in U.S. government securities, money market securities and cash. To the extent the SPAC is invested in cash or similar securities, this may impact a fund's ability to meet its investment objective. If a SPAC does not complete an acquisition within a specified period of time after going public, the SPAC is dissolved, at which point the invested funds are returned to the SPAC's shareholders (less certain permitted expenses) and any rights or warrants issued by the SPAC expire worthless.

Because SPACs and similar entities are in essence blank check companies without an operating history or ongoing business other than seeking acquisitions, the value of their securities is particularly dependent on the ability of the entity's management to identify and complete a profitable acquisition. Some SPACs may pursue acquisitions only within certain industries or regions, which may increase the volatility of their prices. In addition, the securities issued by a SPAC, which are typically traded in the over-the-counter market, may be considered illiquid and/or be subject to restrictions on resale.

#### Structured Investments
A structured investment is a security having a return tied to an underlying index or other security or asset class. Structured investments generally are individually negotiated agreements and may be traded over-the-counter. Structured investments are organized and operated to restructure the investment characteristics of the underlying security. This restructuring involves the deposit with or purchase by an entity, such as a corporation or trust, or specified instruments (such as commercial bank loans) and the issuance by that entity or one or more classes of securities ("structured securities") backed by, or representing interests in, the underlying instruments. The cash flow on the underlying instruments may be apportioned among the newly issued

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structured securities to create securities with different investment characteristics, such as varying maturities, payment priorities and interest rate provisions, and the extent of such payments made with respect to structured securities is dependent on the extent of the cash flow on the underlying instruments. Because structured securities typically involve no credit enhancement, their credit risk generally will be equivalent to that of the underlying instruments. Investments in structured securities are generally of a class of structured securities that is either subordinated or unsubordinated to the right of payment of another class. Subordinated structured securities typically have higher yields and present greater risks than unsubordinated structured securities. Structured securities are typically sold in private placement transactions, and there currently is no active trading market for structured securities. Investments in government and government-related and restructured debt instruments are subject to special risks, including the inability or unwillingness to repay principal and interest, requests to reschedule or restructure outstanding debt and requests to extend additional loan amounts.

#### Swap Agreements
The fund may enter into swap agreements and other types of over-the-counter transactions such as caps, floors and collars with broker-dealers or other financial institutions for hedging or investment purposes. A swap involves the exchange by the fund with another party of their respective commitments to pay or receive cash flows, e.g., an exchange of floating rate payments for fixed-rate payments. The purchase of a cap entitles the purchaser, to the extent that a specified index or other underlying financial measure exceeds a predetermined value on a predetermined date or dates, to receive payments on a notional principal amount from the party selling the cap. The purchase of a floor entitles the purchaser, to the extent that a specified index or other underlying financial measure falls or other underlying measure below a predetermined value on a predetermined date or dates, to receive payments on a notional principal amount from the party selling the floor. A collar combines elements of a cap and a floor.

Swap agreements and similar transactions can be individually negotiated and structured to include exposure to a variety of different types of investments or market factors. A swap agreement may be structured with reference to an index of securities that is created and maintained by the swap counterparty. Depending on their structures, swap agreements may increase or decrease the fund's exposure to long-or short-term interest rates (in the United States or abroad), foreign currency values, mortgage securities, mortgage rates, corporate borrowing rates, or other factors such as security prices, inflation rates or the volatility of an index or one or more securities. For example, if the fund agrees to exchange payments in U.S. dollars for payments in a non-U.S. currency, the swap agreement would tend to decrease the fund's exposure to U.S. interest rates and increase its exposure to that non-U.S. currency and interest rates.

The fund may also engage in total return swaps, in which payments made by the fund or the counterparty are based on the total return of a particular reference asset or assets (such as an equity or fixed-income security, a combination of such securities, or an index). Total return swap agreements may be used to obtain exposure to a security, commodity, or market without owning or taking physical custody of such security or investing directly in such market. The fund may also enter into swap agreements on futures contracts including, but not limited to, index futures contracts. Swap agreements on futures contracts are generally subject to the same risks involved in the fund's use of futures contracts, in addition to the risks involved in the fund's use of swap agreements. See "Futures Contracts and Related Options." A total return swap, or a swap on a futures contract, may add leverage to a portfolio by providing investment exposure to an underlying asset or market where the fund does not own or take physical custody of such asset or invest directly in such market.

The value of the fund's swap positions would increase or decrease depending on the changes in value of the underlying rates, currency values, volatility or other indices or measures. Caps and floors have an effect similar to buying or writing options. Depending on how they are used, swap agreements may increase or decrease the overall volatility of the fund's investments and its share price. The fund's ability to engage in certain swap transactions may be limited by tax considerations.

The fund's ability to realize a profit from such transactions will depend on the ability of the financial institutions with which it enters into the transactions to meet their obligations to the fund. If a counterparty's creditworthiness declines, the value of the agreement would be likely to decline, potentially resulting in losses. If a default occurs by the other party to such transaction, the fund will have contractual remedies pursuant to the agreements related to the transaction, which may be limited by applicable law in the case of a counterparty's insolvency. If the returns of an index upon which a swap is based are unavailable or cannot be calculated (including where the index is created and maintained by the swap counterparty), the fund may experience difficulty in valuing the swap or in determining the amounts owed to or by the counterparty, regardless of whether the counterparty has defaulted. Under certain circumstances, suitable transactions may not be available to the fund, or the fund may be unable to close out its position under such transactions at the same time, or at the same price, as if it had purchased comparable publicly

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traded securities. Swaps carry counterparty risks that cannot be fully anticipated. Also, because swap transactions typically involve a contract between the two parties, such swap investments can be extremely illiquid, as it is uncertain as to whether another counterparty would wish to take assignment of the rights under the swap contract at a price acceptable to the fund.

The fund's investments in swaps will generate ordinary income and losses for federal income tax purposes and may cause the fund to recognize income without receiving cash with which to make the distributions necessary to qualify and be eligible for treatment as a regulated investment company and avoid a fund-level tax. The fund may therefore need to liquidate other investments, including when it is not advantageous to do so, to meet its distribution requirement. The fund is not permitted to carry forward any net ordinary losses it realizes in a taxable year to offset ordinary income it realizes in subsequent taxable years.

A credit default swap is an agreement between the fund and a counterparty that enables the fund to buy or sell protection against a credit event related to a particular issuer. One party, acting as a "protection buyer," makes periodic payments to the other party, a "protection seller," in exchange for a promise by the protection seller to make a payment to the protection buyer if a negative credit event (such as a delinquent payment or default) occurs with respect to a referenced bond or group of bonds. Credit default swaps may also be structured based on the debt of a basket of issuers, rather than a single issuer, and may be customized with respect to the default event that triggers purchase or other factors (for example, the Nth default within a basket, or defaults by a particular combination of issuers within the basket, may trigger a payment obligation). The fund may enter into credit default swap contracts for investment purposes. As a credit protection seller in a credit default swap contract, the fund would be required to pay the par (or other agreed-upon) value of a referenced debt obligation to the counterparty in the event of a default by a third party, such as a U.S. or non-U.S. corporate issuer, on the debt obligation. In return for its obligation, the fund would receive from the counterparty a periodic stream of payments over the term of the contract provided that no event of default has occurred. If no default occurs, the fund would keep the stream of payments and would have no payment obligations to the counterparty. As the seller, the fund would be subject to investment exposure on the notional amount of the swap.

The fund may also invest in credit default swap contracts to hedge against the risk of default of the debt of a particular issuer or basket of issuers or to attempt to profit from changes or perceived changes in the creditworthiness of the particular issuer(s) (also known as "buying credit protection"). In these cases, the fund would function as the counterparty referenced in the preceding paragraph. This would involve the risk that the investment may expire worthless and would only generate income in the event of an actual default by the issuer(s) of the underlying obligation(s) (or, as applicable, a credit downgrade or other indication of financial instability). It would also involve the risk that the seller may fail to satisfy its payment obligations to the fund in the event of a default. The purchase of credit default swaps involves costs, which will reduce the fund's return.

Credit default swaps involve a number of special risks. A protection seller may have to pay out amounts following a negative credit event greater than the value of the reference obligation delivered to it by its counterparty and the amount of periodic payments previously received by it from the counterparty. When the fund acts as a seller of a credit default swap, it is exposed to, among other things, leverage risk because if an event of default occurs the seller must pay the buyer the full notional value of the reference obligation. Each party to a credit default swap is subject to the credit risk of its counterparty (the risk that its counterparty may be unwilling or unable to perform its obligations on the swap as they come due). The value of the credit default swap to each party will change based on changes in the actual or perceived creditworthiness of the underlying issuer.

A protection buyer may lose its investment and recover nothing should an event of default not occur. The fund may seek to realize gains on its credit default swap positions, or limit losses on its positions, by selling those positions in the secondary market. There can be no assurance that a liquid secondary market will exist at any given time for any particular credit default swap or for credit default swaps generally.

The market for credit default swaps has at times become more volatile as the creditworthiness of certain counterparties has been questioned and/or downgraded. The parties to a credit default swap are generally required to post collateral to each other. If the fund posts initial or periodic collateral to its counterparty, it may not be able to recover that collateral from the counterparty in accordance with the terms of the swap. In addition, if the fund receives collateral from its counterparty, it may be delayed or prevented from realizing on the collateral in the event of the insolvency or bankruptcy of the counterparty. The fund may exit its obligations under a credit default swap by terminating the contract and paying applicable breakage fees, by selling its position in the secondary market, or by entering into an offsetting credit default swap position, which may cause the fund to incur more losses.

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The fund may also enter into options on swap agreements ("swaptions"). A swaption is a contract that gives a counterparty the right (but not the obligation) to enter into a new swap agreement or to shorten, extend, cancel or otherwise modify an existing swap agreement, at some designated future time on specified terms. The fund may purchase and write (sell) put and call swaptions to the same extent it may make use of standard options on securities or other instruments. Swaptions are generally subject to the same risks involved in the fund's use of options. See "Options on Securities."

Many over-the-counter derivatives (including many swaps) are complex and their valuation often requires subjective modeling and judgment, which increases the risk of mispricing or incorrect valuation. The pricing models used may not produce valuations that are consistent with the values the fund realizes when it closes or sells an over-the-counter derivative. Valuation risk is more pronounced when the fund enters into over-the-counter derivatives with specialized terms because the market value of those derivatives in some cases is determined in part by reference to similar derivatives with more standardized terms. Incorrect valuations may result in increased cash payment requirements to counterparties, undercollateralization and/or errors in calculation of the fund's NAV.

#### Tax-exempt Securities
**General description.** As used in this SAI, the term "Tax-exempt Securities" includes debt obligations issued by a state, a territory or possession of the United States, the District of Columbia, Puerto Rico, Guam and their political subdivisions (for example, counties, cities, towns, villages, districts and authorities), agencies, instrumentalities or other governmental units, the interest from which is, in the opinion of bond counsel, exempt from federal income tax and (if applicable) the corresponding state's personal income tax. Such obligations are issued to obtain funds for various public purposes, including the construction of a wide range of public facilities, such as airports, bridges, highways, housing, hospitals, mass transportation, schools, streets and water and sewer works. Other public purposes for which Tax-exempt Securities may be issued include to refund of outstanding obligations, to obtain funds for general operating expenses, or to obtain funds to lend to other public institutions and facilities in anticipation of the receipt of revenue or the issuance of other obligations.

Tax-exempt Securities can be classified into two principal categories, including "general obligation" bonds and other securities and "revenue" bonds and other securities. General obligation bonds are secured by the issuer's full faith, credit and taxing power for the payment of principal and interest. Revenue securities are payable only from the revenues derived from a particular facility or class of facilities or, in some cases, from the proceeds of a special excise tax or other specific revenue source, such as the user of the facility being financed. Tax-exempt Securities may be structured as fixed-, variable- or floating-rate obligations or as zero-coupon, payment-in-kind and step-coupon securities and may be privately placed or publicly offered.

Short-term Tax-exempt Securities are generally issued by state and local governments and public authorities as interim financing in anticipation of tax collections, revenue receipts or bond sales to finance such public purposes.

In addition, certain types of "private activity" bonds may be issued by public authorities to finance projects of privately-owned entities, such as privately - operated housing facilities; certain local facilities for supplying water, gas or electricity; sewage or solid waste disposal facilities; student loans; or public or private institutions for the construction of educational, hospital, housing and other facilities. Such obligations are included within the term Tax-exempt Securities if the interest paid thereon is, in the opinion of bond counsel, exempt from federal income tax and (if applicable) state personal income tax (such interest may, however, be subject to federal alternative minimum tax). Other types of private activity bonds, the proceeds of which are used for the construction, repair or improvement of, or to obtain equipment for, privately operated industrial or commercial facilities, may also constitute Tax-exempt Securities, although the current federal tax laws place substantial limitations on the size of such issues. The credit quality of private activity bonds is usually directly related to the credit standing of the corporate user of the facility involved.

Tax-exempt Securities share many of the structural features and risks of other bonds, as described elsewhere in this SAI. For example, the fund may purchase callable Tax-exempt Securities, zero-coupon Tax-exempt Securities, or "stripped" Tax-exempt Securities, which entail additional risks. The fund may also purchase structured or asset-backed Tax-exempt Securities, such as the securities (including preferred stock) of special purpose entities that hold interests in the Tax-exempt Securities of one or more issuers and issue "tranched" securities that are entitled to receive payments based on the cash flows from those underlying securities. See "Redeemable securities," "-Zero-coupon and Payment-in-kind Bonds," "-Structured investments," and "Mortgage-backed and Asset-backed Securities" in this SAI. Structured Tax-exempt Securities may involve increased risk that the interest received by the fund may not be exempt from federal or state income tax, or that such interest may result in liability for the alternative minimum tax for shareholders of the fund. For example, in certain cases, the issuers of certain securities held by a

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special purpose entity may not have received an unqualified opinion of bond counsel that the interest from the securities will be exempt from federal income tax and (if applicable) the corresponding state's personal income tax.

Even though Tax-exempt Securities are interest-bearing investments that promise a stable flow of income, their prices are generally inversely affected by changes in interest rates and, therefore, are subject to the risk of market price fluctuations. The values of Tax-exempt Securities with longer remaining maturities typically fluctuate more than those of similarly rated Tax-exempt Securities with shorter remaining maturities. The values of Tax-exempt Securities also may be affected by changes in their actual or perceived credit quality. The credit quality of Tax-exempt Securities can be affected by, among other things, the financial condition of the issuer or guarantor, the issuer's future borrowing plans and sources of revenue, the economic feasibility of the revenue bond project or general borrowing purpose, political or economic developments in the state or region where the security is issued, and the liquidity of the security. The amount of information about the financial condition of an issuer of Tax-exempt Securities may not be as extensive as that which is made available by corporations whose securities are publicly traded. As a result, the achievement of the fund's goals is more dependent on the Investment Manager's investment analysis than would be the case if the fund were investing in securities of better-known issuers. In addition, Tax-exempt Securities may be harder to value than securities issued by corporations that are publicly traded.

The secondary market for some Tax-exempt Securities issued within a state (including issues that are privately placed with the fund) is less liquid than that for taxable debt obligations or other more widely traded municipal obligations. No established resale market exists for certain of the Tax-exempt Securities in which the fund may invest. The market for Tax-exempt Securities rated below investment grade is also likely to be less liquid than the market for higher rated obligations. As a result, the fund may be unable to dispose of these municipal obligations at times when it would otherwise wish to do so at the prices at which they are valued.

Tax-exempt Securities Issued by the Commonwealth of Puerto Rico. Tax-exempt Securities issued by the Commonwealth of Puerto Rico or its political subdivisions, agencies, instrumentalities, or public corporations may be affected by economic, market, political, and social conditions in Puerto Rico. Puerto Rico has recently experienced (and may in the future experience) significant fiscal and economic challenges, including substantial debt service obligations, high levels of unemployment, underfunded public retirement systems, and persistent government budget deficits. These challenges may negatively affect the value of the fund's investments in Puerto Rico Tax-Exempt Securities. Major ratings agencies have downgraded the general obligation debt of Puerto Rico to below investment grade and continue to maintain a negative outlook for this debt, which increases the likelihood that the rating will be lowered further. In both August 2015 and January 2016, Puerto Rico defaulted on its debt by failing to make full payment due on its outstanding bonds, and there can be no assurance that Puerto Rico will be able to satisfy its future debt obligations. Further downgrades or defaults may place additional strain on the Puerto Rico economy and may negatively affect the value, liquidity, and volatility of the fund's investments in Puerto Rico Tax-exempt Securities. In 2016, the Puerto Rico Oversight, Management, and Economic Stability Act, known as "PROMESA," was signed into law. Among other things, PROMESA established a federally-appointed Oversight Board to oversee Puerto Rico's financial operations and provides Puerto Rico a path to restructuring its debts, thus increasing the risk that Puerto Rico may never pay off municipal indebtedness, or may pay only a small fraction of the amount owed. Proceedings under PROMESA remain ongoing, and it is unclear at this time how those proceedings will be resolved or what impact they will have on the value of a fund's investments in Puerto Rico municipal securities.

These challenges and uncertainties have been exacerbated by Hurricane Maria and the resulting natural disaster in Puerto Rico. In September 2017, Hurricane Maria struck Puerto Rico, causing major damage across the Commonwealth, including damage to its water, power, and telecommunications infrastructure. The length of time needed to rebuild Puerto Rico's infrastructure is unclear, but could amount to years, during which the Commonwealth is likely to be in an uncertain economic state. The full extent of the natural disaster's impact on Puerto Rico's economy and foreign investment in Puerto Rico is difficult to estimate.

**Escrow-secured or pre-refunded bonds.** These securities are created when an issuer uses the proceeds from a new bond issue to buy high grade, interest-bearing debt securities, generally direct obligations of the U.S. government, in order to redeem (or "pre-refund"), before maturity, an outstanding bond issue that is not immediately callable. These securities are then deposited in an irrevocable escrow account held by a trustee bank to secure all future payments of principal and interest on the pre-refunded bond until that bond's call date. Pre-refunded bonds often receive an 'AAA' or equivalent rating. Because pre-refunded bonds still bear the same interest rate, and have a very high credit quality, their price may increase. However, as the original bond approaches its call date, the bond's price will fall to its call price. The escrow account securities pledged to pay the principal and interest of the pre-refunded municipal bonds held by the fund nonetheless still subject the fund to interest rate risk and market risk. In addition, while a secondary market exists for pre-refunded municipal bonds, if the fund sells pre-refunded

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municipal bonds prior to maturity, the price received may be more or less than the original cost, depending on market conditions at the time of sale. The interest on pre-refunded bonds issued on or before December 31, 2017 is exempt from federal income tax; the interest on such bonds issued after December 31, 2017 is not exempt from federal income tax.

**Low Income Housing Tax Credits.** The fund may invest in loans and other instruments tied to the Low Income Housing Tax Credit ("LIHTC") program, which seeks to increase the supply of affordable housing by offering tax credits to projects that rehabilitate or create new affordable rental properties. LIHTCs offer investors a dollar-for-dollar reduction in their federal tax liability to incentivize the construction and rehabilitation of affordable housing properties. Certain of these investments may be issued, or are guaranteed or insured, by agencies or instrumentalities of the U.S. government, such as Fannie Mae or Freddie Mac, while other such investments may be issued by non-governmental entities and therefore not guaranteed or insured.

The LIHTC program requires ongoing compliance with numerous eligibility requirements. Failure to comply with these requirements, including failures by persons other than the fund or which are outside the fund's control, may result in recapture of some or all of the related tax credits as well as the possibility of the loss of future credits. In addition to a recapture of credits and the potential loss of future credits, failure to comply with such eligibility requirements may trigger a default event on the underlying bonds. The fund's investments in loans or other instruments tied to LIHTCs are subject to many of the risks facing other fixed income investments, including interest rate, credit, and prepayment risk.

**Tobacco Settlement Revenue Bonds**. The fund may invest in tobacco settlement revenue bonds, which are secured by an issuing state's proportionate share of periodic payments by tobacco companies made under the Master Settlement Agreement ("MSA"). The MSA is an agreement that was reached out of court in November 1998 between 46 states and six U.S. jurisdictions and tobacco manufacturers representing an overwhelming majority of U.S. market share in settlement of certain smoking-related litigation. The MSA provides for annual payments by the manufacturers to the states and jurisdictions in perpetuity in exchange for releasing all claims against the manufacturers and a pledge of no further litigation. The MSA established a base payment schedule and a formula for adjusting payments each year. Tobacco manufacturers pay into a master escrow trust based on their market share, and each state receives a fixed percentage of the payment as set forth in the MSA. Within some states, certain localities may in turn be allocated a specific portion of the state's MSA payment pursuant to an arrangement with the state.

A number of state and local governments have securitized the future flow of payments under the MSA by selling bonds pursuant to indentures, some through distinct governmental entities created for such purpose. The bonds are backed by the future revenue flow that is used for principal and interest payments on the bonds. Annual payments on the bonds, and thus risk to the fund, are dependent on the receipt of future settlement payments by the state or its instrumentality. The actual amount of future settlement payments may vary based on, among other things, annual domestic cigarette shipments, inflation, the financial capability of participating tobacco companies, and certain offsets for disputed payments. Payments made by tobacco manufacturers could be reduced if cigarette shipments continue to decline below the base levels used in establishing manufacturers' payment obligations under the MSA. Demand for cigarettes in the U.S. could continue to decline based on many factors, including, without limitation, anti-smoking campaigns, tax increases, price increases implemented to recoup the cost of payments by tobacco companies under the MSA, reduced ability to advertise, enforcement of laws prohibiting sales to minors, elimination of certain sales venues such as vending machines, the spread of local ordinances restricting smoking in public places, and increases in the use of other nicotine delivery devices (such as electronic cigarettes, smoking cessation products, and smokeless tobacco).

Because tobacco settlement bonds are backed by payments from the tobacco manufacturers, and generally not by the credit of the state or local government issuing the bonds, their creditworthiness depends on the ability of tobacco manufacturers to meet

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their obligations. The bankruptcy of an MSA-participating manufacturer could cause delays or reductions in bond payments, which would affect the fund's net asset value. Under the MSA, a market share loss by MSA-participating tobacco manufacturers to non-MSA participating manufacturers would also cause a downward adjustment in the payment amounts under some circumstances.

The MSA and tobacco manufacturers have been and continue to be subject to various legal claims, including, among others, claims that the MSA violates federal antitrust law. In addition, the United States Department of Justice has alleged in a civil lawsuit that the major tobacco companies defrauded and misled the American public about the health risks associated with smoking cigarettes. An adverse outcome to this lawsuit or to any other litigation matters or regulatory actions relating to the MSA or affecting tobacco manufacturers could adversely affect the payment streams associated with the MSA or cause delays or reductions in bond payments by tobacco manufacturers.

In addition to the risks described above, tobacco settlement revenue bonds are subject to other risks described in this SAI, including the risks of asset-backed securities discussed under "Mortgage-backed and Asset-backed Securities."

**Stand-by commitments.** When the fund purchases Tax-exempt Securities, it has the authority to acquire stand-by commitments from banks and broker-dealers with respect to those Tax-exempt Securities. A stand-by commitment is a right acquired by the fund to sell up to the principal amount of such Tax-exempt Securities back to the seller or a third party (typically an institution such as a bank or broker-dealer) at an agreed-upon price or yield within specified periods prior to their maturity dates. A stand-by commitment may be considered a security independent of the Tax-exempt security to which it relates. The amount payable by a bank or dealer during the time a stand-by commitment is exercisable, absent unusual circumstances, would be substantially the same as the market value of the underlying Tax-exempt security to a third party at any time. The fund expects that stand-by commitments generally will be available without the payment of direct or indirect consideration. The fund does not expect to assign any value to stand-by commitments when determining the fund's net asset value. The fund will be subject to credit risk with respect to an institution providing a stand-by commitment and a decline in the credit quality of the institution could cause losses to the fund.

**Yields**. The yields on Tax-exempt Securities depend on a variety of factors, including general money market conditions, effective marginal tax rates, the financial condition of the issuer, general conditions of the Tax-exempt security market, the size of a particular offering, the maturity of the obligation and the rating of the issue. The ratings of nationally recognized securities rating agencies represent their opinions as to the credit quality of the Tax-exempt Securities which they undertake to rate. It should be emphasized, however, that ratings are general and are not absolute standards of quality. Consequently, Tax-exempt Securities with the same maturity, interest rate and rating may have different yields while Tax-exempt Securities of the same maturity and interest rate but with different ratings may have the same yield. Yield disparities may occur for reasons not directly related to the investment quality of particular issues or the general movement of interest rates and may be due to such factors as changes in the overall demand or supply of various types of Tax-exempt Securities or changes in the investment objectives of investors. Subsequent to purchase by the fund, an issue of Tax-exempt Securities or other investments may cease to be rated, or its rating may be reduced below the minimum rating required for purchase by the fund. The Investment Manager will consider such an event in its determination of whether the fund should continue to hold an investment in its portfolio. Downgrades of Tax-exempt Securities held by a money market fund may require the fund to sell such securities, potentially at a loss.

**"Moral obligation" bonds**. The fund may invest in so-called "moral obligation" bonds, where repayment of the bond is backed by a moral (but not legally binding) commitment of an entity other than the issuer, such as a state legislature, to pay. Such a commitment may be in addition to the legal commitment of the issuer to repay the bond or may represent the only payment obligation with respect to the bond (where, for example, no amount has yet been specifically appropriated to pay the bond. See "-Municipal leases" below.)

**Municipal leases**. The fund may acquire participations in lease obligations or installment purchase contract obligations (collectively, "lease obligations") of municipal authorities or entities. A lease obligation is an obligation in the form of a lease or installment purchase that is issued by a state or local government to acquire equipment and facilities. Income from such obligations generally is exempt from state and local tax in the state of issuance. Lease obligations may be secured or unsecured. Lease obligations do not constitute general obligations of the municipality for which the municipality's taxing power is pledged.

Municipal leases may be subject to greater risks than general obligation or revenue bonds. Although lease obligations do not constitute general obligations of the municipality, a lease obligation ordinarily is backed by the municipality's covenant to budget for, appropriate, and make the payments due under the lease obligation. However, certain of these lease obligations contain

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"non-appropriation" clauses, which provide that the municipality has no obligation to make lease or installment purchase payments in future years unless money is appropriated for such purpose on a yearly basis. In the case of a "non-appropriation" lease, the fund's ability to recover under the lease in the event of non-appropriation or default will be limited solely to the repossession of the leased property, and in any event, foreclosure of that property might prove difficult. If a municipality does not fulfill its payment obligation, it may be difficult to sell the lease obligation and the proceeds of a sale may not cover the fund's loss.

In addition to the "non-appropriation" risk, many municipal lease obligations have not yet developed the depth of marketability associated with municipal bonds. Moreover, such leases may be subject to the temporary abatement of payments in the event the issuer is prevented from maintaining occupancy of the leased premises or utilizing the leased equipment or facilities. Although the obligations may be secured by the leased equipment or facilities, the disposition of the property in the event of non-appropriation or foreclosure might prove difficult, time consuming and costly, and result in a delay in recovering, or the failure to recover fully, the fund's original investment.

**Additional risks**. Securities in which the fund may invest, including Tax-exempt Securities, are subject to the provisions of bankruptcy, insolvency and other laws affecting the rights and remedies of creditors, such as the federal Bankruptcy Code (including special provisions related to municipalities and other public entities), and laws, if any, that may be enacted by Congress or state legislatures extending the time for payment of principal or interest, or both, or imposing other constraints upon enforcement of such obligations. There is also the possibility that, as a result of litigation or other conditions, such as the recent bankruptcy-type proceedings by the Commonwealth of Puerto Rico the power, ability or willingness of issuers to meet their obligations for the payment of interest and principal on their Tax-exempt Securities may be materially affected or their obligations may be found to be invalid or unenforceable. Such litigation or conditions may from time to time have the effect of introducing uncertainties in the market for municipal bonds or certain segments thereof, or of materially affecting the credit risk with respect to particular bonds. Adverse economic, business, legal or political developments might affect all or a substantial portion of the fund's municipal bonds in the same manner.

From time to time, legislation may be introduced or litigation may arise that may restrict or eliminate the federal income tax exemption for interest on debt obligations issued by states and their political subdivisions. Federal tax laws limit the types and amounts of tax-exempt bonds issuable for certain purposes, especially industrial development bonds and private activity bonds. Such limits may affect the future supply and yields of these types of Tax-exempt Securities. Further proposals limiting the issuance of Tax-exempt Securities may well be introduced in the future. Shareholders should consult their tax advisors for the current law on tax-exempt bonds and securities.

#### Temporary Defensive Strategies
In response to adverse market, economic, political or other conditions, the fund may take temporary defensive positions that are inconsistent with its principal investment strategies. However, a fund may choose not to use these temporary defensive strategies for a variety of reasons, even in very volatile market conditions. In implementing temporary defensive strategies, the fund may invest primarily in, among other things, debt securities, preferred stocks, U.S. government and agency obligations, cash or money market instruments (including, to the extent permitted by law or applicable exemptive relief, money market funds), or any other securities the Investment Manager considers consistent with such defensive strategies. When the fund takes temporary defensive positions, the fund may miss out on investment opportunities, and the fund may not achieve its investment objective. In addition, while temporary defensive strategies are mainly designed to limit losses, such strategies may not work as intended.

#### Trade Policy
In 2025, the U.S. government indicated its intent to alter its approach to international trade policy and, in some cases, to renegotiate or potentially terminate certain existing bilateral or multilateral trade agreements and treaties with foreign countries and has made proposals and taken actions related thereto. In addition, the U.S. government has recently imposed tariffs on certain foreign goods and has indicated a willingness to impose tariffs on imports of other products. Some foreign governments, including China, have instituted retaliatory tariffs on certain U.S. goods and have indicated a willingness to impose additional tariffs on U.S. products. Other countries, including Mexico, have threatened retaliatory tariffs on certain U.S. products.

Global trade disruption, significant introductions of trade barriers, and bilateral trade frictions, together with any future downturns in the global economy resulting therefrom, could adversely affect the financial performance of the fund and its investments.

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Trade policy may be an ongoing source of instability, potentially resulting in significant currency fluctuations and/or having other adverse effects on international markets, international trade agreements, and/or other existing cross-border cooperation arrangements (whether economic, tax, fiscal, legal, regulatory, or otherwise). To the extent trade disputes escalate globally, there could be additional significant impacts on the sectors or industries in which the fund invests and other adverse impacts on the fund's overall performance.

#### Warrants
The fund may invest in or acquire warrants, which are instruments that give the fund the right (but not the obligation) to purchase certain securities from an issuer at a specific price (the "strike price") until a stated expiration date. The purchase of warrants involves the risk that the effective price paid for the warrant added to the strike price of the underlying security may exceed the value of the security's market price, such as when there is no movement in the level of the underlying security. Also, the strike price of warrants typically is much lower than the current market price of the underlying securities, yet they are subject to similar price fluctuations. As a result, warrants may be more volatile investments than the underlying securities and may offer greater potential for capital appreciation as well as capital loss. Warrants do not entitle a holder to dividends or voting rights with respect to the underlying securities and do not represent any rights in the assets of the issuing company. Also, the value of the warrant does not necessarily change with the value of the underlying securities and a warrant ceases to have value if it is not exercised prior to the expiration date. These factors can make warrants more speculative than other types of investments.

In addition to warrants on securities, the fund may purchase put warrants and call warrants whose values vary depending on the change in the value of one or more specified securities indices ("index warrants"). Index warrants are generally issued by banks or other financial institutions and give the holder the right, at any time during the term of the warrant, to receive upon exercise of the warrant a cash payment from the issuer based on the value of the underlying index at the time of exercise. In general, if the value of the underlying index rises above the exercise price of the index warrant, the holder of a call warrant will be entitled to receive a cash payment from the issuer upon exercise based on the difference between the value of the index and the exercise price of the warrant; if the value of the underlying index falls, the holder of a put warrant will be entitled to receive a cash payment from the issuer upon exercise based on the difference between the exercise price of the warrant and the value of the index. The holder of a warrant would not be entitled to any payments from the issuer at any time when, in the case of a call warrant, the exercise price is greater than the value of the underlying index, or, in the case of a put warrant, the exercise price is less than the value of the underlying index. If the fund were not to exercise an index warrant prior to its expiration, then the fund would lose the amount of the purchase price paid by it for the warrant.

The fund will normally use index warrants in a manner similar to its use of options on securities indices. The risks of the fund's use of index warrants are generally similar to those relating to its use of index options. Unlike most index options, however, index warrants are issued in limited amounts and are not obligations of a regulated clearing agency, but are backed only by the credit of the bank or other institution which issues the warrant. Also, index warrants generally have longer terms than index options. Index warrants are not likely to be as liquid as certain index options backed by a recognized clearing agency. In addition, the terms of index warrants may limit the fund's ability to exercise the warrants at such time, or in such quantities, as the fund would otherwise wish to do.

#### Zero-coupon and Payment-in-kind Bonds
The fund may invest without limit in so-called "zero-coupon" bonds and "payment-in-kind" bonds. Zero-coupon bonds are issued at a significant discount from their principal amount in lieu of paying interest periodically. Payment-in-kind bonds allow the issuer, at its option, to make current interest payments on the bonds either in cash or in additional bonds. Because zero-coupon and payment-in-kind bonds do not pay current interest in cash, their value is subject to greater fluctuation in response to changes in market interest rates than bonds that pay interest currently. Both zero-coupon and payment-in-kind bonds allow an issuer to avoid the need to generate cash to meet current interest payments. Accordingly, such bonds may involve greater credit risks than bonds paying interest currently in cash. The fund is required to accrue interest income on such investments and to distribute such amounts at least annually to shareholders even though such bonds do not pay current interest in cash. Thus, it may be necessary at times for the fund to liquidate investments, including when it is not advantageous to do so, in order to satisfy its distribution requirements under the Code. The market for zero-coupon and payment-in-kind bonds may be limited, making it difficult for the fund to value them or dispose of its holdings quickly at an acceptable price.

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#### EXCHANGE TRADED FUND RISKS

#### Continuous Offering
The method by which Creation Units of shares are created and traded may raise certain issues under applicable securities laws. Because new Creation Units of shares are issued and sold by a fund on an ongoing basis, at any point a "distribution," as such term is used in the 1933 Act, may occur. Broker-dealers and other persons are cautioned that some activities on their part may, depending on the circumstances, result in their being deemed participants in a distribution in a manner which could render them statutory underwriters and subject them to the prospectus delivery and liability provisions of the 1933 Act.

For example, a broker-dealer firm or its client may be deemed a statutory underwriter if it takes Creation Units after placing an order with Franklin Distributors, each fund's distributor, breaks them down into constituent shares, and sells such shares directly to customers, or if it chooses to couple the creation of a supply of new shares with an active selling effort involving solicitation of secondary market demand for shares. A determination of whether one is an underwriter for purposes of the 1933 Act must take into account all the facts and circumstances pertaining to the activities of the broker-dealer or its client in the particular case, and the examples mentioned above should not be considered a complete description of all the activities that 12 could lead to a categorization as an underwriter.

Broker-dealer firms should also note that dealers who are not "underwriters," but are effecting transactions in shares of a fund, whether or not participating in the distribution of shares, are generally required to deliver a prospectus. This is because the prospectus delivery exemption in Section 4(a)(3) of the 1933 Act is not available in respect of such transactions as a result of Section 24(d) of the 1940 Act. As a result, broker-dealer firms should note that dealers who are not underwriters but are participating in a distribution (as opposed to engaging in ordinary secondary market transactions) and thus dealing with the shares that are part of an overallotment within the meaning of Section 4(a)(3)(A) of the 1933 Act would be unable to take advantage of the prospectus delivery exemption provided by Section 4(a)(3) of the 1933 Act. Firms that incur a prospectus-delivery obligation with respect to shares of each fund are reminded that, under Rule 153 under the 1933 Act, a prospectus-delivery obligation under Section 5(b)(2) of the 1933 Act owed to an exchange member in connection with a sale on an exchange is satisfied by the fact that the prospectus is available from the exchange upon request. The prospectus delivery mechanism provided in Rule 153 is only available with respect to transactions on an exchange.

#### Listing and Trading
Shares of each fund have been approved for listing and trading on an exchange. Each fund's shares trade on an exchange at prices that may differ to some degree from their NAV. The listing exchange may remove a fund's shares from listing if, among other things (i) following the initial 12-month period beginning upon the commencement of trading of the fund, there are fewer than 50 beneficial owners of the fund's shares ; (ii) the listing exchange becomes aware that the fund is no longer eligible to operate in reliance on Rule 6c-11 under the 1940 Act; (iii) the fund no longer complies with certain listing exchange rules; or (iv) such other event shall occur or condition exists that, in the opinion of the listing exchange, makes further dealings on the exchange inadvisable.

The listing exchange will remove a fund's shares from listing and trading upon termination of the trust. There can be no assurance that the requirements of the listing exchange necessary to maintain the listing of the fund's shares will continue to be met. As in the case of other publicly-traded securities, brokers' commissions on transactions will be based on negotiated commission rates at customary levels. The existence of a liquid trading market for certain securities may depend on whether dealers will make a market in such securities. There can be no assurance that such a market will be made or maintained or that any such market will be or remain liquid. The price at which securities may be sold and the value of the fund's shares will be adversely affected if trading markets for the fund's portfolio securities are limited or absent, or if bid/ask spreads are wide.

#### TAXES
The following discussion of U.S. federal income tax consequences is based on the Code, existing U.S. Treasury regulations, and other applicable authority, as of the date of this SAI. These authorities are subject to change by legislative or administrative action, possibly with retroactive effect. The following discussion is only a summary of some of the important U.S. federal income tax considerations generally applicable to investments in the fund. There may be other tax considerations applicable to particular

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shareholders. Shareholders should consult their own tax advisors regarding their particular situation and the possible application of foreign, state and local tax laws.

**Taxation of the fund.** The fund has elected and intends to qualify each year as a regulated investment company under Subchapter M of the Code. In order to qualify for the special tax treatment accorded regulated investment companies and their shareholders, the fund must, among other things:

(a) derive at least 90% of its gross income for each taxable year from (i) dividends, interest, payments with respect to certain securities loans, and gains from the sale or other disposition of stock, securities or foreign currencies, or other income (including but not limited to gains from options, futures, or forward contracts) derived with respect to its business of investing in such stock, securities or currencies, and (ii) net income from interests in "qualified publicly traded partnerships" (as defined below);

(b) diversify its holdings so that, at the end of each quarter of the fund's taxable year, (i) at least 50% of the market value of the fund's total assets is represented by cash and cash items (including receivables), U.S. government securities, securities of other regulated investment companies, and other securities limited in respect of any one issuer to a value not greater than 5% of the value of the fund's total assets and not more than 10% of the outstanding voting securities of such issuer, and (ii) not more than 25% of the value of the fund's total assets is invested, including through corporations in which the fund owns a 20% or more voting stock interest, (x) in the securities (other than those of the U.S. government or other regulated investment companies) of any one issuer or of two or more issuers which the fund controls and which are engaged in the same, similar, or related trades or businesses, or (y) in the securities of one or more qualified publicly traded partnerships (as defined below); and

(c) distribute with respect to each taxable year at least 90% of the sum of its investment company taxable income (as that term is defined in the Code without regard to the deduction for dividends paid—generally, taxable ordinary income and the excess, if any, of net short-term capital gains over net long-term capital losses) and net tax-exempt interest income, for such year.

In general, for purposes of the 90% gross income requirement described in paragraph (a) above, income derived from a partnership will be treated as qualifying income only to the extent such income is attributable to items of income of the partnership which would be qualifying income if realized by the regulated investment company. However, 100% of the net income of a regulated investment company derived from an interest in a "qualified publicly traded partnership" (defined as a partnership (i) interests in which are traded on an established securities market or readily tradable on a secondary market or the substantial equivalent thereof, and (ii) that derives less than 90% of its income from the qualifying income described in paragraph (a)(i) above) will be treated as qualifying income. In general, such entities will be treated as partnerships for federal income tax purposes because they meet the passive income requirement under Code section 7704(c)(2). In addition, although in general the passive loss rules of the Code do not apply to regulated investment companies, such rules do apply to a regulated investment company with respect to items attributable to an interest in a qualified publicly traded partnership.

For purposes of the diversification test in paragraph (b) above, identification of the issuer (or, in some cases, issuers) of a particular fund investment will depend on the terms and conditions of that investment. In some cases, identification of the issuer (or issuers) is uncertain under current law, and an adverse determination or future guidance by the IRS with respect to issuer identification for a particular type of investment may adversely affect the fund's ability to meet the diversification test in (b) above. Also, for the purposes of the diversification test in paragraph (b) above, the term "outstanding voting securities of such issuer" will include the equity securities of a qualified publicly traded partnership.

If the fund qualifies as a regulated investment company that is accorded special tax treatment, the fund will not be subject to U. S. federal income tax on income or gains distributed in a timely manner to its shareholders in the form of dividends (including Capital Gain Dividends, as defined below).

If the fund were to fail to meet the income, diversification or distribution test described above, the fund could in some cases cure such failure, including by paying a fund-level tax, paying interest, making additional distributions, or disposing of certain assets. If the fund were ineligible to or otherwise did not cure such failure for any year, or were otherwise to fail to qualify as a regulated investment company accorded special tax treatment in any taxable year, the fund would be subject to tax on its taxable income at corporate rates, and all distributions from earnings and profits, including any distributions of net tax-exempt income and net long-term capital gains, would be taxable to shareholders as ordinary income. Some portions of such distributions may be eligible for the dividends received deduction in the case of corporate shareholders, and may be eligible to be treated as "qualified dividend income" in the case of shareholders taxed as individuals, provided, in both cases, that the shareholder meets certain holding period and other requirements in respect of the fund's shares (as described below). In addition, the fund could be

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required to recognize unrealized gains, pay substantial taxes and interest and make substantial distributions before requalifying as a regulated investment company that is accorded special tax treatment.

The fund intends to distribute at least annually to its shareholders all or substantially all of its investment company taxable income (computed without regard to the dividends-paid deduction) and its net tax-exempt income (if any). The fund may distribute its net capital gain (that is, the excess of net long-term capital gain over net short-term capital loss, in each case determined with reference to any loss carryforwards). Investment company taxable income (which is retained by the fund) will be subject to tax at regular corporate rates. The fund may also retain for investment its net capital gain. If the fund retains any net capital gain, it will be subject to tax at regular corporate rates on the amount retained, but may designate the retained amount as undistributed capital gains in a notice to its shareholders who will be (i) required to include in income for U.S. federal income tax purposes, as long-term capital gain, their shares of such undistributed amount, and (ii) entitled to credit their proportionate shares of the tax paid by the fund on such undistributed amount against their U.S. federal income tax liabilities, if any, and to claim refunds on a properly-filed U.S. tax return to the extent the credit exceeds such liabilities. If the fund makes this designation, for U.S. federal income tax purposes, the tax basis of shares owned by a shareholder of the fund will be increased by an amount equal to the difference between the amount of undistributed capital gains included in the shareholder's gross income under clause (i) of the preceding sentence and the tax deemed paid by the shareholder under clause (ii) of the preceding sentence. The fund is not required to, and there can be no assurance the fund will, make this designation if it retains all or a portion of its net capital gain in a taxable year.

In determining its net capital gain, including in connection with determining the amount available to support a Capital Gain Dividend (as defined below), its taxable income and its earnings and profits, a regulated investment company generally may also elect to treat part or all of any post-October capital loss (defined as any net capital loss attributable to the portion, if any, of the taxable year after October 31 or, if there is no such loss, the net long-term capital loss or net short-term capital loss attributable to any such portion of the taxable year) or late-year ordinary loss (generally, the sum of its (i) net ordinary loss, if any, from the sale, exchange or other taxable disposition of property, attributable to the portion, if any, of the taxable year after October 31, and its (ii) other net ordinary loss, if any, attributable to the portion, if any, of the taxable year after December 31) as if incurred in the succeeding taxable year.

If the fund fails to distribute in a calendar year at least an amount equal to the sum of 98% of its ordinary income for such year and 98.2% of its capital gain net income for the one-year period ending October 31 of such year, plus any retained amount from the prior year, the fund will be subject to a nondeductible 4% excise tax on the undistributed amounts. For these purposes, ordinary gains and losses from the sale, exchange, or other taxable disposition of property that would otherwise be properly taken into account after October 31 are treated as arising on January 1 of the following calendar year. For purposes of the excise tax, the fund will be treated as having distributed any amount on which it has been subject to corporate income tax in the taxable year ending within the calendar year. A dividend paid to shareholders in January of a year generally is deemed to have been paid by the fund on December 31 of the preceding year, if the dividend was declared and payable to shareholders of record on a date in October, November or December of that preceding year. The fund intends generally to make distributions sufficient to avoid imposition of the 4% excise tax, although there can be no assurance that it will be able to do so.

The fund distributes its net investment income and capital gains to shareholders as dividends at least annually to the extent required to qualify as a regulated investment company under the Code and generally to avoid U.S. federal income or excise tax. Provided it is not treated as a "personal holding company" for U.S. federal income tax purposes, the fund is permitted to treat the portion of redemption proceeds paid to redeeming shareholders that represents the redeeming shareholders' portion of the fund's accumulated earnings and profits as a dividend on the fund's tax return. This practice, which involves the use of tax equalization, will have the effect of reducing the amount of income and gains that the fund is required to distribute as dividends to shareholders in order for the fund to avoid U. S. federal income tax and excise tax. This practice may also reduce the amount of distributions required to be made to non-redeeming shareholders and the amount of any undistributed income will be reflected in the value of the shares of the fund; the total return on a shareholder's investment will not be reduced as a result of this distribution policy.

**Fund distributions.** Distributions from the fund (other than exempt-interest dividends, as discussed below) generally are taxable to shareholders as ordinary income to the extent derived from the fund's investment income and net short-term capital gains. Distributions are taxable whether shareholders receive them in cash or reinvest them in additional shares of the fund or other Putnam funds.

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Taxes on distributions of capital gains are determined by how long the fund owned (or is deemed to have owned) the investments that generated them, rather than how long a shareholder has owned his or her shares. In general, the fund will recognize long-term capital gain or loss on investments it has owned for more than one year, and short-term capital gain or loss on investments it has owned for one year or less. Tax rules can alter the fund's holding period in investments and thereby affect the tax treatment of gain or loss on such investments. Distributions of net capital gain that are properly reported by the fund as capital gain dividends ("Capital Gain Dividends") will be treated as long-term capital gains includible in net capital gain and taxed to individuals at reduced rates. The IRS and the Department of the Treasury have issued regulations that impose special rules in respect of Capital Gain Dividends received through partnership interests constituting "applicable partnership interests" under Section 1061 of the Code. Distributions from capital gains generally are made after applying any available capital loss carryforwards. Distributions of net short-term capital gain (as reduced by any net long-term capital loss for the taxable year) will be taxable to shareholders as ordinary income.

The Code generally imposes a 3.8% Medicare contribution tax on the net investment income of certain individuals, trusts and estates to the extent their income exceeds certain threshold amounts. For these purposes, "net investment income" generally includes, among other things, (i) distributions paid by the fund of net investment income and capital gains (other than exempt-interest dividends) as described herein, and (ii) any net gain from the sale, redemption, exchange or other taxable disposition of fund shares. Shareholders are advised to consult their tax advisers regarding the possible implications of this additional tax on their investment in the fund.

Distributions of investment income reported by the fund as "qualified dividend income" received by an individual will be taxed at the reduced rates applicable to net capital gain. In order for some portion of the dividends received by a fund shareholder to be qualified dividend income, the fund must meet holding period and other requirements with respect to some portion of the dividend-paying stocks in its portfolio and the shareholder must meet holding period and other requirements with respect to the fund's shares. In general, a dividend will not be treated as qualified dividend income (at either the fund or shareholder level) (1) if the dividend is received with respect to any share of stock held for fewer than 61 days during the 121-day period beginning on the date which is 60 days before the date on which such share becomes ex-dividend with respect to such dividend (or, in the case of certain preferred stock, 91 days during the 181-day period beginning 90 days before such date), (2) to the extent that the recipient is under an obligation (whether pursuant to a short sale or otherwise) to make related payments with respect to positions in substantially similar or related property, (3) if the recipient elects to have the dividend income treated as investment interest, or (4) if the dividend is received from a foreign corporation that is (a) not eligible for the benefits of a comprehensive income tax treaty with the United States (with the exception of dividends paid on stock of such a foreign corporation readily tradable on an established securities market in the United States) or (b) treated as a passive foreign investment company. Each fund, other than fixed-income and money market funds, generally expects to report eligible dividends as qualified dividend income.

In general, distributions of investment income reported by the fund as derived from qualified dividend income will be treated as qualified dividend income by a shareholder taxed as an individual provided the shareholder meets the holding period and other requirements described above with respect to such fund's shares. In any event, if the aggregate qualified dividends received by the fund during any taxable year are 95% or more of its gross income (excluding net long-term capital gain over net short-term capital loss), then 100% of the fund's dividends (other than dividends properly reported as Capital Gain Dividends) will be eligible to be treated as qualified dividend income.

Individuals (and certain other non-corporate entities) are generally eligible with respect to tax years beginning after December 31, 2017 and ending on or before December 31, 2025 for a 20% deduction with respect to taxable ordinary dividends from REITs and certain taxable income from publicly traded partnerships. Currently, regulated investment companies may pass through the 20% deduction to shareholders for REIT dividends, but not for income from publicly traded partnerships. Distributions by the fund to its shareholders that the fund properly reports as "section 199A dividends," as defined and subject to certain conditions described below, are treated as qualified REIT dividends in the hands of non-corporate shareholders.

Subject to future regulatory guidance to the contrary, distributions attributable to qualified publicly traded partnership income from a fund's investments in MLPs will ostensibly not qualify for the deduction available to non-corporate taxpayers in respect of such amounts received directly from an MLP.

In general, fixed-income and money market funds receive interest, rather than dividends, from their portfolio securities. As a result, it is not currently expected that any significant portion of such funds' distributions to shareholders will be derived from

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qualified dividend income. For information regarding qualified dividend income received from underlying funds, see "Funds of funds" below.

Certain distributions reported by a Fund as section 163(j) interest dividends may be treated as interest income by shareholders for purposes of the tax rules applicable to interest expense limitations under Code section 163(j). Such treatment by the shareholder is generally subject to holding period requirements and other potential limitations, although the holding period requirements are generally not applicable to dividends declared by money market funds and certain other funds that declare dividends daily and pay such dividends on a monthly or more frequent basis. The amount that a Fund is eligible to report as a Section 163(j) dividend for a tax year is generally limited to the excess of the Fund's business interest income over the sum of the Fund's (i) business interest expense and (ii) other deductions properly allocable to the Fund's business interest income.

In general, dividends of net investment income received by corporate shareholders of the fund will qualify for the dividends-received deduction generally available to corporations only to the extent of the amount of eligible dividends received by the fund from domestic corporations for the taxable year. A dividend received by the fund will not be treated as a dividend eligible for the dividends-received deduction (1) if it has been received with respect to any share of stock that the fund has held for less than 46 days (91 days in the case of certain preferred stock) during the 91-day period beginning on the date which is 45 days before the date on which such share becomes ex-dividend with respect to such dividend (during the 181-day period beginning 90 days before such date in the case of certain preferred stock) or (2) to the extent that the fund is under an obligation (pursuant to a short sale or otherwise) to make related payments with respect to positions in substantially similar or related property. Moreover, the dividends received deduction may otherwise be disallowed or reduced (1) if the corporate shareholder fails to satisfy the foregoing requirements with respect to its shares of the fund or (2) by application of various provisions of the Code (for instance, the dividends-received deduction is reduced in the case of a dividend received on debt-financed portfolio stock (generally, stock acquired with borrowed funds)). For information regarding eligibility for the dividends-received deduction of dividend income derived from an underlying fund, see "Funds of funds" below.

**Exempt-interest dividends.** A fund will be qualified to pay exempt-interest dividends to its shareholders if, at the close of each quarter of the fund's taxable year, at least 50% of the total value of the fund's assets consists of obligations the interest on which is exempt from federal income tax under Section 103(a) of the Code. In some cases, the fund may also pass through to its shareholders the tax-exempt character of any exempt-interest dividends it receives from underlying funds in which it invests (see "Funds of funds," below). Distributions that the fund reports as exempt-interest dividends are treated as interest excludable from shareholders' gross income for federal income tax purposes but may be taxable for federal alternative minimum tax ("AMT") purposes and for state and local purposes. If the fund intends to qualify to pay exempt-interest dividends, the fund may be limited in its ability to enter into taxable transactions involving forward commitments, repurchase agreements, financial futures and options contracts on financial futures, tax-exempt bond indices and other assets.

Part or all of the interest on indebtedness, if any, incurred or continued by a shareholder to purchase or carry shares of the fund paying exempt-interest dividends is not deductible. The portion of interest that is not deductible is equal to the total interest paid or accrued on the indebtedness, multiplied by the percentage of the fund's total distributions (not including distributions from net long-term capital gains) paid to the shareholder that are exempt-interest dividends. Under rules used by the IRS to determine when borrowed funds are considered used for the purpose of purchasing or carrying particular assets, the purchase of shares may be considered to have been made with borrowed funds even though such funds are not directly traceable to the purchase of shares.

In general, exempt-interest dividends, if any, attributable to interest received on certain private activity obligations and certain industrial development bonds will not be tax-exempt to any shareholders who are "substantial users" of the facilities financed by such obligations or bonds or who are "related persons" of such substantial users.

A fund that is qualified to pay exempt-interest dividends will notify its shareholders in a written statement of the portion of distributions for the taxable year that constitutes exempt-interest dividends.

Exempt-interest dividends may be taxable for purposes of the federal AMT. For individual shareholders, exempt-interest dividends that are derived from interest on private activity bonds that are issued after August 7, 1986 (other than a "qualified 501(c)(3) bond," as such term is defined in the Code) generally must be included in an individual's tax base for purposes of calculating the shareholder's liability for U.S. federal AMT. For taxable years beginning after December 31, 2017, corporations are no longer subject to the federal AMT.

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 **Funds of funds.** If the fund invests in shares of underlying funds, a portion of its distributable income and gains will consist of distributions from the underlying funds and gains and losses on the disposition of shares of the underlying funds. To the extent that an underlying fund realizes net losses on its investments for a given taxable year, the fund will not be able to recognize its share of those losses (so as to offset distributions of net income or capital gains from other underlying funds) until and only to the extent that it disposes of shares of the underlying fund in a transaction qualifying for sale or exchange treatment or those losses reduce distributions required to be made by the underlying fund. Moreover, even when the fund does make such a disposition, a portion of its loss may be recognized as a long-term capital loss, which will not be treated as favorably for U.S. federal income tax purposes as a short-term capital loss or an ordinary deduction. In particular, the fund will not be able to offset any capital losses from its dispositions of underlying fund shares against its ordinary income (including distributions of any net short-term capital gains realized by an underlying fund).

In addition, in certain circumstances, the "wash sale" rules under Section 1091 of the Code may apply to the fund's sales of underlying fund shares that have generated losses. A wash sale occurs if shares of an underlying fund are sold by the fund at a loss and the fund acquires additional shares of that same underlying fund 30 days before or after the date of the sale. The wash-sale rules could defer losses in the fund's hands on sales of underlying fund shares (to the extent such sales are wash sales) for extended (and, in certain cases, potentially indefinite) periods of time.

As a result of the foregoing rules, and certain other special rules, the amounts of net investment income and net capital gains that the fund will be required to distribute to shareholders may be greater than such amounts would have been had the fund invested directly in the securities held by the underlying funds, rather than investing in shares of the underlying funds. For similar reasons, the amount or timing of distributions from the fund qualifying for treatment as being of a particular character (e.g., as long-term capital gain, exempt interest, eligible for dividends-received deduction, etc.) will not necessarily be the same as it would have been had the fund invested directly in the securities held by the underlying funds.

If the fund receives dividends from an underlying fund that qualifies as a regulated investment company, and the underlying fund reports such dividends as "qualified dividend income," then the fund may, in turn, report a portion of its distributions as "qualified dividend income" as well, provided the fund meets the holding period and other requirements with respect to shares of the underlying fund.

If the fund receives dividends from an underlying fund and the underlying fund reports such dividends as eligible for the dividends-received deduction, then the fund is permitted, in turn, to designate a portion of its distributions as eligible for the dividends-received deduction, provided the fund meets the holding period and other requirements with respect to shares of the underlying fund.

If the fund were to own 20% or more of the voting interests of an underlying fund, subject to a safe harbor in respect of certain fund of funds arrangements, the fund would be required to "look through" the underlying fund to its holdings and combine the appropriate percentage (as determined pursuant to the applicable Treasury Regulations) of the underlying fund's assets with the fund's assets for purposes of satisfying the 25% diversification test described above.

If, at the close of each quarter of the fund's taxable year, at least 50% of its total assets consists of interests in other regulated investment companies (such fund, a "qualified fund of funds"), the fund will be permitted to distribute exempt-interest dividends and thereby pass through to its shareholders the tax-exempt character of any exempt-interest dividends it receives from underlying funds in which it invests, or interest on any tax-exempt obligations in which it directly invests, if any. For further information regarding exempt-interest dividends, see "Exempt-interest dividends," above.

If the fund is a qualified fund of funds, the fund will be entitled to elect to pass through to its shareholders a credit or deduction for foreign taxes (if any) borne in respect of foreign securities income earned by the fund, or by any underlying funds and passed through to the fund. If the fund so elects, shareholders will include in gross income from foreign sources their pro rata shares of such taxes, if any, treated as paid by the fund. Even if the fund is eligible to make such an election for a given year, it may determine not to do so. If the fund elects to pass through to its shareholders foreign tax credits or deductions, tax-exempt shareholders and those who invest in the fund through tax-advantaged accounts such as IRAs will not benefit from any such tax credit or deduction. See "Foreign taxes" below for more information.

**Derivatives, hedging and related transactions; certain exposure to commodities.** In general, option premiums received by the fund are not immediately included in the income of the fund. Instead, the premiums are recognized when the option contract expires, the option is exercised by the holder, or the fund transfers or otherwise terminates the option (*e.g.*, through a closing

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transaction). If a call option written by the fund is exercised and the fund sells or delivers the underlying stock, the fund generally will recognize capital gain or loss equal to (a) the sum of the strike price and the option premium received by the fund minus (b) the fund's basis in the stock. Such gain or loss generally will be short-term or long-term depending upon the holding period of the underlying stock. If securities are purchased by the fund pursuant to the exercise of a put option written by it, the fund generally will subtract the premium received for purposes of computing its cost basis in the securities purchased. Gain or loss arising in respect of a termination of the fund's obligation under an option other than through the exercise of the option will be short-term gain or loss depending on whether the premium income received by the fund is greater or less than the amount paid by the fund (if any) in terminating the transaction. Thus, for example, if an option written by the fund expires unexercised, the fund generally will recognize short-term gain equal to the premium received.

Certain covered call writing activities of the fund may trigger the U.S. federal income tax straddle rules contained primarily in Section 1092 of the Code. Very generally, where applicable, Section 1092 requires (i) that losses be deferred on positions deemed to be offsetting positions with respect to "substantially similar or related property," to the extent of unrealized gain in the latter, and (ii) that the holding period of such a straddle position that has not already been held for the long-term holding period be terminated and begin anew once the position is no longer part of a straddle. Options on single stocks that are not "deep in the money" may constitute qualified covered calls, which generally are not subject to the straddle rules; the holding period on stock underlying qualified covered calls that are "in the money" although not "deep in the money" will be suspended during the period that such calls are outstanding. Thus, the straddle rules and the rules governing qualified covered calls could cause gains that would otherwise constitute long-term capital gains to be treated as short-term capital gains, and distributions that would otherwise constitute "qualified dividend income" or qualify for the dividends-received deduction to fail to satisfy the holding period requirements and therefore to be taxed as ordinary income or to fail to qualify for the dividends-received deduction, as the case may be.

In general, 40% of the gain or loss arising from the closing out of a futures contract traded on an exchange approved by the Commodities Futures Trading Commission is treated as short-term gain or loss, and 60% is treated as long-term gain or loss, although certain foreign currency gains and losses from such contracts may be treated as ordinary in character. Also, such contracts held by the fund at the end of each taxable year (and, for purposes of the 4% excise tax, on certain other dates as prescribed under the Code) are "marked to market" with the result that unrealized gains or losses are treated as though they were realized and the resulting gain or loss is treated as ordinary or 60/40 gain or loss, as applicable.

The fund's investment in swaps, if any, will generate ordinary income and losses for federal income tax purposes. The fund's investments in futures and swaps may cause the fund to recognize income without receiving cash with which to make the distributions necessary to qualify and be eligible for treatment as a regulated investment company and avoid a fund-level tax. The fund may therefore need to liquidate other investments, including when it is not advantageous to do so, to meet its distribution requirement. The fund is not permitted to carry forward any net ordinary losses it realizes in a taxable year to offset ordinary income it realizes in subsequent taxable years.

In addition to the special rules described above in respect of options, futures transactions and swaps, the fund's derivative transactions, including transactions in options, futures contracts, straddles, securities loan and other similar transactions, including for hedging purposes, will be subject to special tax rules (including constructive sale, mark-to-market, straddle, wash sale, and short sale rules), the effect of which may be to accelerate income to the fund, defer losses to the fund, cause adjustments in the holding periods of the fund's securities, convert long-term capital gains into short-term capital gains, short-term capital losses into long-term capital losses, or capital gains into ordinary income. These rules could therefore affect the amount, timing and character of distributions to shareholders. The fund may make any applicable elections pertaining to such transactions consistent with the interests of the fund.

Because these and other tax rules applicable to these types of transactions are in some cases uncertain under current law, an adverse determination or future guidance by the IRS with respect to these rules (which determination or guidance could be retroactive) may affect whether the fund has made sufficient distributions, and otherwise satisfied the relevant requirements, to maintain its qualification as a regulated investment company and avoid a fund-level tax.

A fund's use of commodity-linked derivatives can be limited by the fund's intention to qualify as a regulated investment company and can bear on its ability to so qualify. Income and gains from certain commodity-linked derivatives do not constitute qualifying income to a regulated investment company for purposes of the 90% gross income test described above. The tax treatment of certain other commodity-linked derivative instruments in which the fund might invest is not certain, in particular with respect to whether income or gains from such instruments constitute qualifying income to a regulated investment company. If the fund were

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to treat income or gain from a particular instrument as qualifying income and the income or gain were later determined not to constitute qualifying income and, together with any other nonqualifying income, caused the fund's nonqualifying income to exceed 10% of its gross income in any taxable year, the fund would fail to qualify as a regulated investment company unless it is eligible to and does pay a tax at the fund level.

The tax rules are uncertain with respect to the treatment of income or gains arising in respect of commodity-linked exchange-traded notes ("ETNs") and certain commodity-linked structured notes; also, the timing and character of income or gains arising from ETNs can be uncertain. An adverse determination or future guidance by the IRS (which determination or guidance could be retroactive) may affect the fund's ability to qualify for treatment as a regulated investment company and to avoid a fund-level tax.

To the extent that, in order to achieve exposure to commodities, the fund invests in entities that are treated as pass-through vehicles for U.S. federal income tax purposes, including, for instance, certain ETFs (e.g., ETFs investing in gold bullion) and partnerships other than qualified publicly traded partnerships (as defined earlier), all or a portion of any income and gains from such entities could constitute non-qualifying income to the fund for purposes of the 90% gross income requirement described above. In such a case, the fund's investments in such entities could be limited by its intention to qualify as a regulated investment company and could bear on its ability to so qualify. Certain commodities-related ETFs may qualify as qualified publicly traded partnerships. In such cases, the net income derived from such investments will constitute qualifying income for purposes of the 90% gross income requirement. If, however, such a vehicle were to fail to qualify as a qualified publicly traded partnership in a particular year, a portion of the gross income derived from it in such year could constitute non-qualifying income to the fund for purposes of the 90% gross income requirement and thus could adversely affect the fund's ability to qualify as a regulated investment company for a particular year. In addition, the diversification requirement described above for regulated investment company qualification will limit the fund's investments in one or more vehicles that are qualified publicly traded partnerships to 25% of the fund's total assets as of the close of each quarter of the fund's taxable year.

Certain of the fund's investments in derivative instruments and foreign currency-denominated instruments, and any of the fund's transactions in foreign currencies and hedging activities, are likely to produce a difference between its book income and its taxable income. If such a difference arises, and the fund's book income is less than its taxable income (or, for tax-exempt funds, the sum of its net tax-exempt and taxable income), the fund could be required to make distributions exceeding book income to qualify as a regulated investment company that is accorded special tax treatment and to eliminate fund-level income tax. In the alternative, if the fund's book income exceeds the sum of its taxable income and tax-exempt income, the distribution (if any) of such excess will be treated as (i) a dividend to the extent of the fund's remaining earnings and profits (including earnings and profits arising from tax-exempt income), (ii) thereafter as a return of capital to the extent of the recipient's basis in the shares, and (iii) thereafter as gain from the sale or exchange of a capital asset.

**Investments in REITs.** The fund's investment in REIT equity securities may result in the fund's receipt of cash in excess of the REIT's earnings. If the fund distributes such amounts, such distribution could constitute a return of capital to the fund shareholders for U.S. federal income tax purposes. Dividends received by the fund from a REIT generally will not constitute qualified dividend income and will not qualify for the corporate dividends-received deduction.

Distributions by the fund to its shareholders that the fund properly reports as "section 199A dividends," as defined and subject to certain conditions described below, are treated as qualified REIT dividends in the hands of non-corporate shareholders. Non-corporate shareholders are permitted a federal income tax deduction equal to 20% of qualified REIT dividends received by them, subject to certain limitations. Very generally, a "section 199A dividend" is any dividend or portion thereof that is attributable to certain dividends received by a regulated investment company from REITs, to the extent such dividends are properly reported as such by the regulated investment company in a written notice to its shareholders. A section 199A dividend is treated as a qualified REIT dividend only if the shareholder receiving such dividend holds the dividend-paying regulated investment company shares for at least 46 days of the 91-day period beginning 45 days before the shares become ex-dividend, and is not under an obligation to make related payments with respect to a position in substantially similar or related property. A fund is permitted to report such part of its dividends as section 199A dividends as are eligible, but is not required to do so.

**Mortgage-related securities.** The fund may invest in REITs, including REITs that hold residual interests in real estate mortgage investment conduits ("REMICs") (including by investing in residual interests in collateralized mortgage obligations ("CMOs") with respect to which an election to be treated as a REMIC is in effect), REITs that are themselves taxable mortgage pools ("TMPs") or REITs that invest in TMPs. Under a notice issued by the IRS in October 2006 and Treasury regulations that have not yet been issued, but apply retroactively, a portion of the fund's income from a REIT that is attributable to the REIT's residual interest in a REMIC or TMP (referred to in the Code as an "excess inclusion") will be subject to U.S. federal income tax in all events. This

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notice also provides, and the regulations are expected to provide, that excess inclusion income of a regulated investment company, such as the fund, will be allocated to shareholders of the regulated investment company in proportion to the dividends received by such shareholders, with the same consequences as if the shareholders held the related REMIC or TMP residual interest directly. As a result, a fund investing in such interests may not be a suitable investment for charitable remainder trusts, as noted below.

In general, excess inclusion income allocated to shareholders (i) cannot be offset by net operating losses (subject to a limited exception for certain thrift institutions), (ii) will constitute unrelated business taxable income ("UBTI") to entities (including a qualified pension plan, an individual retirement account, a 401(k) plan, a Keogh plan or other tax-exempt entity) subject to tax on UBTI, thereby potentially requiring such an entity that is allocated excess inclusion income, and otherwise might not be required to file a tax return, to file a tax return and pay tax on such income, and (iii) in the case of a non-U.S. shareholder, will not qualify for any reduction in U.S. federal withholding tax. A shareholder will be subject to U.S. federal income tax on such inclusions notwithstanding any exemption from such income tax otherwise available under the Code. Any investment in residual interests of CMO that has elected to be treated as a REMIC can create complex tax problems, especially if the fund has state or local governments or other tax-exempt organizations as shareholders.

Income of a fund that would be UBTI if earned directly by a tax-exempt entity generally will not constitute UBTI when distributed to a tax-exempt shareholder of the fund. Notwithstanding the foregoing, a tax-exempt shareholder will recognize UBTI by virtue of its investment in the fund if shares in the fund constitute debt-financed property in the hands of the tax-exempt shareholder within the meaning of Code Section 514(b). Furthermore, a tax-exempt shareholder may recognize UBTI if the fund recognizes excess inclusion income derived from direct or indirect investments in REMIC residual interests or TMPs if the amount of such income recognized by the fund exceeds the fund's investment company taxable income (after taking into account deductions for dividends paid by the fund).

Under legislation enacted in December 2006, a charitable remainder trust ("CRT"), as defined in Section 664 of the Code, that realizes UBTI for a taxable year must pay an excise tax annually of an amount equal to such UBTI. Under IRS guidance issued in October 2006, a CRT will not recognize UBTI solely as a result of investing in a fund that recognizes excess inclusion income. Rather, if at any time during any taxable year a CRT (or one of certain other tax-exempt shareholders, such as the United States, a state or political subdivision, or an agency or instrumentality thereof, and certain energy cooperatives) is a record holder of a share in a fund that recognizes excess inclusion income, then the fund will be subject to a tax on that portion of its excess inclusion income for the taxable year that is allocable to such shareholders at the highest federal corporate income tax rate. The extent to which this IRS guidance remains applicable in light of the December 2006 legislation is unclear. To the extent permitted under the 1940 Act, the fund may elect to specially allocate any such tax to the applicable CRT, or other shareholder, and thus reduce such shareholder's distributions for the year by the amount of the tax that relates to such shareholder's interest in the fund. CRTs and other tax-exempt investors are urged to consult their tax advisors concerning the consequences of investing in the fund.

**Return of capital distributions.** If the fund makes a distribution in and with respect to any taxable year to a shareholder in excess of the fund's current and accumulated earnings and profits, the excess distribution will be treated as a return of capital to the extent of such shareholder's tax basis in its shares, and thereafter as capital gain. A return of capital is not taxable, but it reduces a shareholder's tax basis in its shares, thus reducing any loss or increasing any gain on a subsequent taxable disposition by the shareholder of its shares. Dividends and distributions on the fund's shares generally are subject to federal income tax as described herein to the extent they do not exceed the fund's realized income and gains, even though such dividends and distributions may economically represent a return of a particular shareholder's investment. Such distributions are likely to occur in respect of shares purchased at a time when the fund's net asset value reflects gains that are either unrealized, or realized but not distributed. Such realized income and gains may be required to be distributed even when the fund's net asset value also reflects unrealized losses. Distributions are taxable to a shareholder even if they are paid from income or gains earned by the fund prior to the shareholder's investment (and thus included in the price paid by the shareholder).

**Securities issued or purchased at a discount.** Some debt obligations with a fixed maturity date of more than one year from the date of issuance (and zero-coupon debt obligations with a fixed maturity date of more than one year from the date of issuance) that are acquired by the fund will be treated as debt obligations that are issued originally at a discount. Generally, the amount of the original issue discount ("OID") is treated as interest income and is included in the fund's income (and required to be distributed by the fund) over the term of the debt security, even though payment of that amount is not received until a later time, upon partial or full repayment or disposition of the debt security. In addition, payment-in-kind securities will give rise to

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income which is required to be distributed and is taxable even though the fund holding the security receives no interest payment in cash on the security during the year.

Some debt obligations with a fixed maturity date of more than one year from the date of issuance that are acquired by the fund in the secondary market may be treated as having "market discount." Very generally, market discount is the excess of the stated redemption price of a debt obligation (or in the case of an obligation issued with OID, its "revised issue price") over the purchase price of such obligation. Generally any gain recognized on the disposition of, and any partial payment of principal on, a debt security having market discount is treated as ordinary income to the extent the gain, or principal payment, does not exceed the "accrued market discount" on such debt security. Alternatively, the fund may elect to accrue market discount currently, in which case the fund will be required to include the accrued market discount in the fund's income (as ordinary income) and thus distribute it over the term of the debt security, even though payment of that amount is not received until a later time, upon partial or full repayment or disposition of the debt security. The rate at which the market discount accrues, and thus is included in the fund's income, will depend upon which of the permitted accrual methods the fund elects.

Some debt obligations with a fixed maturity date of one year or less from the date of issuance that are acquired by the fund may be treated as having "acquisition discount" (very generally, the excess of the stated redemption price over the purchase price) or OID. The fund will be required to include the acquisition discount or OID in income over the term of the debt security, even though payment of that amount is not received until a later time, usually when the debt security matures. The fund may make one or more of the elections applicable to debt obligations having acquisition discount or OID, which could affect the character and timing of recognition of income.

If the fund holds the foregoing kinds of obligations, or other obligations subject to special rules under the Code, it may be required to pay out as an income distribution each year an amount which is greater than the total amount of cash interest the fund actually received. Such distributions may be made from the cash assets of the fund or, if necessary, by disposition of portfolio securities including at a time when it may not be advantageous to do so. These dispositions may cause the fund to realize higher amounts of short-term capital gains (generally taxed to shareholders at ordinary income tax rates) and, in the event the fund realizes net capital gains from such transactions, its shareholders may receive a larger capital gain distribution than if the fund had not held such obligations.

**Securities purchased at a premium.** Very generally, where the fund purchases a bond at a price that exceeds the redemption price at maturity (*i*.*e*., a premium), the premium is amortizable over the remaining term of the bond. In the case of a taxable bond, if the fund makes an election applicable to all such bonds it purchases, which election is irrevocable without consent of the IRS, the fund reduces the current taxable income from the bond by the amortized premium and reduces its tax basis in the bond by the amount of such offset; upon the disposition or maturity of such bonds acquired on or after January 4, 2013, the fund is permitted to deduct any remaining premium allocable to a prior period. In the case of a tax-exempt bond, tax rules require the fund to reduce its tax basis by the amount of amortized premium.

**Higher-Risk obligations.** Investments in debt obligations that are at risk of or in default present special tax issues for the fund. Tax rules are not entirely clear about issues such as whether the fund should recognize market discount on a debt obligation and, if so, the amount of market discount the fund should recognize; when the fund may cease to accrue interest, OID or market discount, when and to what extent deductions may be taken for bad debts or worthless securities and how payments received on obligations in default should be allocated between principal and income. These and other related issues will be addressed by the fund when, as and if it invests in such obligations, in order to seek to ensure that it distributes sufficient income to preserve its status as a regulated investment company and does not become subject to U.S. federal income or excise tax.

**Capital loss carryforward.** Distributions from capital gains generally are made after applying any available capital loss carryforwards. Capital loss carryforwards are reduced to the extent they offset current-year net realized capital gains, whether the fund retains or distributes such gains. If a fund incurs or has incurred capital losses in excess of capital gains ("net capital losses"), those losses will be carried forward to one or more subsequent taxable years; any such carryforward losses will retain their character as short-term or long-term.

**Foreign taxes.** If more than 50% of the fund's assets at taxable year end consists of the securities of foreign corporations, the fund may elect to permit shareholders to claim a credit or deduction on their income tax returns for their pro rata portion of qualified taxes paid by the fund to foreign countries in respect of foreign securities the fund has held for at least the minimum period specified in the Code. A qualified fund of funds also may elect to pass through to its shareholders foreign taxes it has paid or foreign taxes passed through to it by any underlying fund that itself elected to pass through such taxes to shareholders (see

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"Funds of funds" above). In such a case, shareholders will include in gross income from foreign sources their pro rata shares of such taxes. A shareholder's ability to claim a foreign tax credit or deduction in respect of foreign taxes paid by the fund may be subject to certain limitations imposed by the Code, as a result of which a shareholder may not get a full credit or deduction for the amount of such taxes. In particular, shareholders must hold their fund shares (without protection from risk of loss) on the ex-dividend date and for at least 15 additional days during the 30-day period surrounding the ex-dividend date to be eligible to claim a foreign tax credit with respect to a given dividend. Shareholders who do not itemize on their U.S. federal income tax returns may claim a credit (but no deduction) for such foreign taxes. Even if the fund is eligible to make such an election for a given year, it may determine not to do so. However, even if the fund elects to pass through to its shareholders foreign tax credits or deductions, tax-exempt shareholders and those who invest in the fund through tax-advantaged accounts such as IRAs will not benefit from any such tax credit or deduction.

**Passive foreign investment companies.** Investments treated as equity for federal income tax purposes in certain "passive foreign investment companies" ("PFICs", as defined below) could subject the fund to a U.S. federal income tax (including interest charges) on distributions received from the company or on the proceeds from the disposition of its investment in such a company. This tax cannot be eliminated by making distributions to fund shareholders; however, this tax can be avoided by making an election to mark such investments to market annually or to treat the passive foreign investment company as a "qualified electing fund." The QEF and mark-to-market elections may have the effect of accelerating the recognition of income (without the receipt of cash) and increasing the amount required to be distributed by the fund to avoid taxation. Making either of these elections therefore may require the fund to liquidate other investments to meet its distribution requirement, which may also accelerate the recognition of gain and affect the fund's total return. Dividends paid by PFICs will not be eligible to be treated as "qualified dividend income." If the fund indirectly invests in PFICs by virtue of the fund's investments in other funds, it may not make such PFIC elections; rather, the underlying funds directly investing in the PFICs would decide whether to make such elections.

Because it is not always possible to identify a foreign corporation as a PFIC, the fund may incur the tax and interest charges described above in some instances.

A PFIC is any foreign corporation: (i) 75 percent or more of the income of which for the taxable year is passive income, or (ii) the average percentage of the assets of which (generally by value, but by adjusted tax basis in certain cases) that produce or are held for the production of passive income is at least 50 percent. Generally, passive income for this purpose means dividends, interest (including income equivalent to interest), royalties, rents, annuities, the excess of gains over losses from certain property transactions and commodities transactions, and foreign currency gains. Passive income for this purpose does not include rents and royalties received by the foreign corporation from active business and certain income received from related persons.

**Foreign currency-denominated transactions and related hedging transactions.** The fund's transactions in foreign currencies, foreign currency-denominated debt obligations and certain foreign currency options, futures contracts and forward contracts (and similar instruments) may give rise to ordinary income or loss to the extent such income or loss results from fluctuations in the value of the foreign currency concerned. Any such net gains could require a larger dividend toward the end of the calendar year. Any such net losses generally will reduce and potentially require the recharacterization of prior ordinary income distributions. Such ordinary income treatment may accelerate fund distributions to shareholders and increase the distributions taxed to shareholders as ordinary income. Any net ordinary losses so created cannot be carried forward by the fund to offset income or gains earned in subsequent taxable years.

**Sale or exchange of shares.** The sale or exchange of fund shares may give rise to a gain or loss. In general, any gain or loss realized upon a taxable disposition of shares will be treated as long-term capital gain or loss if the shares have been held for more than 12 months. Otherwise the gain or loss on the sale or exchange of fund shares will be treated as short-term capital gain or loss. However, if a shareholder sells shares at a loss within six months of purchase, any loss generally will be disallowed for federal income tax purposes to the extent of any exempt-interest dividends received on such shares. This loss disallowance, however, does not apply with respect to dispositions of fund shares held for six months or less with respect to a regular exempt-interest dividend paid by the fund if such fund declares substantially all of its net tax-exempt income as exempt-interest dividends on a daily basis, and pays such dividends at least on a monthly basis. In addition, any loss (not already disallowed as provided in the preceding sentences) realized upon a taxable disposition of shares held for six months or less will be treated as long-term, rather than short-term, to the extent of any Capital Gain Dividends received (or deemed received) by the shareholder with respect to the shares. All or a portion of any loss realized upon a taxable disposition of fund shares will be disallowed if other shares of the same fund are purchased within 30 days before or after the disposition. In such a case, the basis of the newly purchased shares will be adjusted to reflect the disallowed loss.

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**Taxes on purchase and redemption of creation units**. Authorized Participants that are "dealers in securities" for U.S. federal income tax purposes are subject to different rules with respect to holding, acquiring and disposing of securities, including Creation Units. Authorized Participants should consult their own tax advisor with respect to transactions with a fund.

An Authorized Participant who exchanges securities for Creation Units generally will recognize a gain or a loss equal to the difference between the market value of the Creation Units at the time of the exchange and the sum of the exchanger's aggregate basis in the securities surrendered plus any Cash Component it pays. An Authorized Participant who exchanges Creation Units for securities will generally recognize a gain or loss equal to the difference between the exchanger's basis in the Creation Units and the sum of the aggregate market value of the securities received plus any cash equal to the difference between the NAV of the shares being redeemed and the value of the securities. The IRS, however, may assert that a loss realized upon an exchange of securities for Creation Units cannot be deducted currently under the rules governing "wash sales"(for a person who does not mark-to-market its portfolio) or on the basis that there has been no significant change in economic position. Persons exchanging securities should consult their own tax advisor with respect to whether wash sale rules apply and when a loss might be deductible.

Any capital gain or loss realized upon the creation of Creation Units will generally be treated as long-term capital gain or loss if the securities exchanged for such Creation Units have been held for more than one year. Any capital gain or loss realized upon redemption of Creation Units is generally treated as long-term capital gain or loss if the shares have been held for more than one year and as short-term capital gain or loss if the shares have been held for one year or less. Any loss upon a redemption of Creation Units held for six months or less will be treated as a long-term capital loss to the extent of any amounts treated as distributions to the applicable Authorized Participant of long-term capital gain with respect to the Creation Units (including any amounts credited to the Authorized Participant as undistributed capital gains). In addition, any loss realized upon a redemption of fund shares held by an Authorized Participant for six months or less generally will be disallowed, to the extent of any exempt-interest dividends received by the Authorized Participant with respect to the shares.

The fund has the right to reject an order for a purchase of shares of the fund if the purchaser (or group of purchasers) would, upon obtaining the shares so ordered, own 80% or more of the outstanding shares of the fund and if, pursuant to Section 351 of the Code, the fund would have a basis in the securities contributed by such purchaser different from the market value of such securities on the date of deposit. The fund also has the right to require information necessary to determine beneficial share ownership for purposes of the 80% determination.

**Cost basis reporting.** Upon the redemption or exchange of a shareholder's shares in the fund, the fund, or, if such shareholder's shares are then held through a financial intermediary, the financial intermediary, will be required to provide the shareholder and the IRS with cost basis and certain other related tax information about the fund shares the shareholder redeemed or exchanged. This cost basis reporting requirement is effective for shares purchased, including through dividend reinvestment, on or after January 1, 2012. Shareholders should consult their financial representatives for more information regarding available methods for cost basis reporting and how to select a particular method. Shareholders should consult their tax advisors to determine which available cost basis method is best for them.

**Shares purchased through tax-qualified plans.** Special tax rules apply to investments through employer-sponsored retirement plans and other tax-qualified plans or tax-advantaged arrangements. Shareholders should consult their tax advisors to determine the suitability of shares of the fund as an investment through such plans and arrangements and the precise effect of an investment on their particular tax situation.

**Backup withholding.** The fund generally is required to withhold and remit to the U.S. Treasury a percentage of the taxable dividends and other distributions paid to any individual shareholder who fails to furnish the fund with a correct taxpayer identification number (TIN), who has under-reported dividends or interest income, or who fails to certify to the fund that he or she is not subject to such withholding. The backup withholding rules may also apply to distributions that are properly reported as exempt-interest dividends. Backup withholding is not an additional tax. Any amounts withheld may be credited against the shareholder's U.S. federal income tax liability, provided the appropriate information is furnished to the IRS.

In order for a foreign investor to qualify for exemption from the backup withholding tax rates and for reduced withholding tax rates under income tax treaties, the foreign investor must comply with special certification and filing requirements. Foreign investors in a fund should consult their tax advisors in this regard.

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**Tax shelter reporting regulations.** Under U.S. Treasury regulations, if a shareholder recognizes a loss on disposition of fund shares of at least $2 million in any single taxable year or $4 million in any combination of taxable years for an individual shareholder or $10 million in any single taxable year or $20 million in any combination of taxable years for a corporate shareholder, the shareholder must file with the IRS a disclosure statement on Form 8886. Direct shareholders of portfolio securities are in many cases excepted from this reporting requirement, but under current guidance, shareholders of a regulated investment company are not excepted. Future guidance may extend the current exception from this reporting requirement to shareholders of most or all regulated investment companies. The fact that a loss is reportable under these regulations does not affect the legal determination of whether the taxpayer's treatment of the loss is proper. Shareholders should consult their tax advisers to determine the applicability of these regulations in light of their individual circumstances.

**Non-U.S. shareholders.** Distributions by the fund to shareholders that are not "U.S. persons" within the meaning of the Code ("foreign shareholders") properly reported by the fund as (1) Capital Gain Dividends, (2) interest-related dividends, (3) short-term capital gain dividends, each as defined below and subject to certain conditions described below, and (4) exempt-interest dividends generally are not subject to withholding of U.S. federal income tax.

In general, the Code defines (1) "short-term capital gain dividends" as distributions of net short-term capital gains in excess of net long-term capital losses and (2) "interest-related dividends" as distributions from U.S. source interest income of types similar to those not subject to U.S. federal income tax if earned directly by an individual foreign shareholder, in each case to the extent such distributions are properly reported as such by the fund in a written notice to shareholders. The exceptions to withholding for Capital Gain Dividends and short-term capital gain dividends do not apply to (A) distributions to an individual foreign shareholder who is present in the United States for a period or periods aggregating 183 days or more during the year of the distribution and (B) distributions attributable to gain that is treated as effectively connected with the conduct by the foreign shareholder of a trade or business within the United States under special rules regarding the disposition of U.S. real property interests as described below. The exception to withholding for interest-related dividends does not apply to distributions to a foreign shareholder (A) that has not provided a satisfactory statement that the beneficial owner is not a U.S. person, (B) to the extent that the dividend is attributable to certain interest on an obligation if the foreign shareholder is the issuer or is a 10% shareholder of the issuer, (C) that is within certain foreign countries that have inadequate information exchange with the United States, or (D) to the extent the dividend is attributable to interest paid by a person that is a related person of the foreign shareholder and the foreign shareholder is a controlled foreign corporation. If the fund invests in other regulated investment companies that pay Capital Gain Dividends, short-term capital gain dividends or interest-related dividends to the fund, such distributions retain their character as not subject to withholding if properly reported when paid by the fund to foreign shareholders. The fund is permitted to report such part of its dividends as interest-related and/or short-term capital gain dividends as are eligible, but is not required to do so. In the case of shares held through an intermediary, the intermediary may withhold even if the fund reports all or a portion of a payment as an interest-related or short-term capital gain dividend to shareholders.

The fact that a fund achieves its goals by investing in underlying funds generally does not adversely affect the fund's ability to pass on to foreign shareholders the full benefit of the interest-related dividends and short-term capital gain dividends that it receives from its investments in underlying funds, except possibly to the extent that (1) interest-related dividends received by the fund are offset by deductions allocable to the fund's qualified interest income or (2) short-term capital gain dividends received by the fund are offset by the fund's net short- or long-term capital losses, in which case the amount of a distribution from the fund to a foreign shareholder that is properly reported as either an interest-related dividend or a short-term capital gain dividend, respectively, may be less than the amount that such shareholder would have received had they invested directly in the underlying funds.

Distributions by the fund to foreign shareholders other than Capital Gain Dividends, interest-related dividends, and short-term capital gain dividends and exempt-interest dividends (*e.g.*, dividends attributable to dividend and foreign-source interest income or to short-term capital gains or U.S.-source interest income to which the exception from withholding described above does not apply) are generally subject to withholding of U.S. federal income tax at a rate of 30% (or lower applicable treaty rate).

Under U.S. federal tax law, a beneficial holder of shares who is a foreign shareholder is not, in general, subject to U.S. federal income tax on gains (and is not allowed a deduction for losses) realized on the sale of shares of the fund, unless (i) such gain is effectively connected with the conduct of a trade or business carried on by such holder within the United States; (ii) in the case of an individual holder, the holder is present in the United States for a period or periods aggregating 183 days or more during the year of the sale and certain other conditions are met; or (iii) the special rules relating to gain attributable to the sale or exchange of "U.S. real property interests" ("USRPIs") apply to the foreign shareholder's sale of shares of the fund (as described below).

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If a beneficial holder who is a foreign shareholder has a trade or business in the United States, and the dividends are effectively connected with the conduct by the beneficial holder of a trade or business in the United States, the dividend will be subject to U.S. federal net income taxation at regular income tax rates and, in the case of a foreign corporation, may also be subject to a branch profits tax. If a foreign shareholder is eligible for the benefits of a tax treaty, any effectively connected income or gain will generally be subject to U.S. federal income tax on a net basis only if it is also attributable to a permanent establishment maintained by the shareholder in the United States. More generally, foreign shareholders who are residents in a country with an income tax treaty with the United States may obtain different tax results than those described herein, and are urged to consult their tax advisors.

Special rules would apply if the fund were a qualified investment entity ("QIE") because it is either a "U.S. real property holding corporation" ("USRPHC") or would be a USRPHC but for the operation of certain exceptions to the definition of USRPIs described below. Very generally, a USRPHC is a domestic corporation that holds USRPIs the fair market value of which equals or exceeds 50% of the sum of the fair market values of the corporation's USRPIs, interests in real property located outside the United States, and other trade or business assets. USRPIs generally are defined as any interest in U.S. real property and any interest (other than solely as a creditor) in a USRPHC or, very generally, an entity that has been a USRPHC in the last five years. A fund that holds, directly or indirectly, significant interests in REITs may be a USRPHC. Interests in domestically controlled QIEs, including regulated investment companies and REITs that are QIEs, not-greater-than-10% interests in publicly traded classes of stock in REITs and not-greater-than-5% interests in publicly traded classes of stock in regulated investment companies generally are not USRPIs, but these exceptions do not apply for purposes of determining whether a fund is a QIE.

If an interest in the fund were a USRPI, the fund would be required to withhold U.S. tax on the proceeds of a share redemption by a greater-than-5% foreign shareholder, in which case such foreign shareholder generally would also be required to file U.S. tax returns and pay any additional taxes due in connection with the redemption.

If the fund were a QIE under a special "look-through" rule, any distributions by the fund to a foreign shareholder (including, in certain cases, distributions made by the fund in redemption of its shares) attributable directly or indirectly to (i) distributions received by the fund from a lower-tier regulated investment company or REIT that the fund is required to treat as USRPI gain in its hands and (ii) gains realized on the disposition of USRPIs by the fund would retain their character as gains realized from USRPIs in the hands of the fund's foreign shareholders and would be subject to U.S. tax withholding. In addition, such distributions could result in the foreign shareholder being required to file a U.S. tax return and pay tax on the distributions at regular U.S. federal income tax rates. The consequences to a foreign shareholder, including the rate of such withholding and character of such distributions (*e.g.*, as ordinary income or USRPI gain), would vary depending upon the extent of the foreign shareholder's current and past ownership of the fund.

Foreign shareholders of the fund also may be subject to "wash sale" rules to prevent the avoidance of the tax-filing and -payment obligations discussed above through the sale and repurchase of fund shares.

Foreign shareholders should consult their tax advisers and, if holding shares through intermediaries, their intermediaries, concerning the application of these rules to their investment in the fund.

**Other reporting and withholding requirements**. Sections 1471-1474 of the Code and the U.S. Treasury and IRS guidance issued thereunder (collectively, "FATCA") generally require a fund to obtain information sufficient to identify the status of each of its shareholders under FATCA or under an applicable intergovernmental agreement (an "IGA") between the United States and a foreign government. If a shareholder fails to provide the requested information or otherwise fails to comply with FATCA or an IGA, the fund may be required to withhold under FATCA at a rate of 30% with respect to that shareholder on ordinary dividends it pays. The IRS and the Department of Treasury have issued proposed regulations providing that these withholding rules will not be applicable to the gross proceeds of share redemptions or Capital Gain Dividends the fund pays. If a payment by the fund is subject to FATCA withholding, the fund is required to withhold even if such payment would otherwise be exempt from withholding under the rules applicable to foreign shareholders described above (*e.g.*, short-term capital gain dividends and interest-related dividends).

Each prospective investor is urged to consult its tax advisor regarding the applicability of FATCA and any other reporting requirements with respect to the prospective investor's own situation, including investments through an intermediary.

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 **General Considerations.** The U.S. federal income tax discussion set forth above is for general information only. Prospective investors should consult their tax advisers regarding the specific federal tax consequences of purchasing, holding, and disposing of shares of the fund, as well as the effects of state, local and foreign tax law and any proposed tax law changes.

#### MANAGEMENT

#### Trustees

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|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;Name, Address<sup>1</sup>, Year<br>of Birth, Position(s)<br>Held with Fund and<br>Length of Service as a<br>Fund Trustee<sup>2</sup> | Principal Occupation(s) During<br>Past 5 Years | Number of Funds<br>in the Franklin<br>Templeton Funds<br>Complex<br>Overseen by<br>Trustee<sup>3</sup> | Other Directorships Held by Trustee |
| &nbsp;&nbsp;&nbsp;**Liaquat Ahamed** (Born 1952), Trustee since 2012 | Author; won Pulitzer Prize for *Lords of Finance: The Bankers Who Broke the World.* | 102 | Chair of the Sun Valley Writers Conference, a literary not-for-profit organization; and a Trustee of the Journal of Philosophy. |
| &nbsp;&nbsp;&nbsp;**Barbara M. Baumann** (Born 1955), Trustee since 2010, Vice Chair from 2022 to 2024, Chair since 2024 | President of Cross Creek Energy Corporation, a strategic consultant to domestic energy firms and direct investor in energy projects. | 102 | Director of Devon Energy Corporation, a publicly traded independent natural gas and oil exploration and production company; Director of National Fuel Gas Company, a publicly traded energy company that engages in the production, gathering, transportation, distribution and marketing of natural gas; Senior Advisor to the energy private equity firm First Reserve; member of the Finance Committee of the Children's Hospital of Colorado; member of the Investment Committee of the Board of The Denver Foundation; and previously a Director of publicly traded companies Buckeye Partners LP, UNS Energy Corporation, CVR Energy Company, and SM Energy Corporation. |
| &nbsp;&nbsp;&nbsp;**Katinka Domotorffy** (Born 1975), Trustee since 2012 | Voting member of the Investment Committees of the Anne Ray Foundation and Margaret A. Cargill Foundation, part of the Margaret A. Cargill Philanthropies. | 102 | Director of the Great Lakes Science Center and of College Now Greater Cleveland. |
| &nbsp;&nbsp;&nbsp;**Catharine Bond Hill** (Born 1954), Trustee since 2017 | Managing Director of Ithaka S+R, a not-for-profit service that helps the academic community navigate economic and technological change. From 2006 to 2016, Dr. Hill served as the 10th president of Vassar College. | 102 | Director of Yale-NUS College; and Trustee of Yale University. |
| &nbsp;&nbsp;&nbsp;**Gregory G. McGreevey** (Born 1962), Trustee | Until 2023, Senior Managing Director, Investments, Invesco | 102 | Previously, a Director of Invesco Mortgage Capital, Inc., a publicly traded |

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| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;Name, Address<sup>1</sup>, Year<br>of Birth, Position(s)<br>Held with Fund and<br>Length of Service as a<br>Fund Trustee<sup>2</sup> | Principal Occupation(s) During<br>Past 5 Years | Number of Funds<br>in the Franklin<br>Templeton Funds<br>Complex<br>Overseen by<br>Trustee<sup>3</sup> | Other Directorships Held by Trustee |
| &nbsp;&nbsp;&nbsp;since 2024 | Ltd., a global investment firm. |  | real estate investment trust. |
| &nbsp;&nbsp;&nbsp;**\*Jennifer Williams Murphy** (Born 1964), Trustee since 2022 | Chief Executive Officer and Founder of Runa Digital Assets, LLC, an institutional investment advisory firm specializing in active management of digital assets. Until 2021, Chief Operating Officer of Western Asset Management, LLC, a global investment adviser, and Chief Executive Officer and President of Western Asset Mortgage Capital Corporation, a mortgage finance real estate investment trust. | 102 | Previously, a Director of Western Asset Mortgage Capital Corporation. |
| &nbsp;&nbsp;&nbsp;**Marie Pillai** (Born 1954), Trustee since 2022 | Senior Advisor, Hunter Street Partners, LP, an asset-oriented private investment firm; Director of Choice Bank, a private, community bank based in North Dakota. Until 2019, Vice President, Chief Investment Officer and Treasurer of General Mills, Inc., a global food company. | 102 | Member of the Investment Committee of the Bush Foundation, a nonprofit organization supporting community problem-solving in Minnesota, North Dakota and South Dakota; Member of the Finance Council and Corporate Board of the Archdiocese of Saint Paul and Minneapolis; Member of the Curriculum Committee of the Center for Board Certified Fiduciaries, a public benefit corporation providing coursework for developing fiduciaries; previously a Board Member of Catholic Charities of St. Paul and Minneapolis; former Director of the Catholic Community Foundation of Minnesota; and former Investment Advisory Board Member of the University of Minnesota. |
| &nbsp;&nbsp;&nbsp;**George Putnam III** (Born 1951), Trustee since 1984 | Chair of New Generation Research, Inc., a publisher of financial advisory and other research services, and President of New Generation Advisors, LLC, a registered investment adviser to private funds. | 102 | Director of The Boston Family Office, LLC, a registered investment adviser; a Director of the Gloucester Marine Genomics Institute; a Trustee of the Lowell Observatory Foundation; and previously a Trustee of the Marine Biological Laboratory. |
| &nbsp;&nbsp;&nbsp;**Manoj P. Singh** (Born 1952),<br>Trustee since 2017 | Until 2015, Chief Operating Officer and Global Managing Director at Deloitte Touche Tohmatsu, Ltd., a global professional services organization, serving on the Deloitte U.S. Board of Directors and the boards of Deloitte member | 102 | Director of ReNew Energy Global Plc, a publicly traded renewable energy company; Director of Abt Associates, a global research firm working in the fields of health, social and environmental policy, and international development; Trustee of Carnegie Mellon University; |

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| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;Name, Address<sup>1</sup>, Year<br>of Birth, Position(s)<br>Held with Fund and<br>Length of Service as a<br>Fund Trustee<sup>2</sup> | Principal Occupation(s) During<br>Past 5 Years | Number of Funds<br>in the Franklin<br>Templeton Funds<br>Complex<br>Overseen by<br>Trustee<sup>3</sup> | Other Directorships Held by Trustee |
|  | firms in China, Mexico and Southeast Asia. |  | Director of Pratham USA, an organization dedicated to children's education in India; member of the advisory board of Altimetrik, a business transformation and technology solutions firm; and Director of DXC Technology, a global IT services and consulting company. |
| &nbsp;&nbsp;&nbsp;**Mona K. Sutphen** (Born 1967), Trustee since 2020 | Partner, Investment Strategies at The Vistria Group, a private investment firm focused on middle-market companies in the healthcare, education, and financial services industries. From 2014 to 2018, Partner at Macro Advisory Partners, a global consulting firm. | 102 | Director of Spotify Technology S.A., a publicly traded audio content streaming service; Director of Unitek Learning, a private nursing and medical services education provider in the United States; Board Member, International Rescue Committee; Co-Chair of the Board of Human Rights First; Trustee of Mount Holyoke College; member of the Advisory Board for the Center on Global Energy Policy at Columbia University's School of International and Public Affairs; previously Director of Pattern Energy and Pioneer Natural Resources, publicly traded energy companies; and previously Managing Director of UBS AG. |
| &nbsp;&nbsp;&nbsp;Interested Trustees |  |  |  |
| &nbsp;&nbsp;&nbsp;**\*\*Robert L. Reynolds** (Born 1952), Trustee since 2008 | Chair of Great-West Lifeco U.S. LLC. Prior to 2019, also President and Chief Executive Officer of Great-West Financial, a financial services company that provides retirement savings plans, life insurance, and annuity and executive benefits products, and of Great-West Lifeco U.S. LLC, a holding company that owns Putnam Investments, LLC and Great-West Financial, and a member of Great-West Financial's Board of Directors. Until 2023, President and Chief Executive Officer of Putnam Investments, LLC, President and Chief Executive Officer of Putnam Management, and member of Putnam Investments' Board of Directors. | 102 | Director of the Concord Museum; Director of Dana-Farber Cancer Institute; Director of the U.S. Ski & Snowboard Foundation; Chair of the Boston Advisory Board of the American Ireland Fund; Council Co-Chair of the American Enterprise Institute; Member of U.S. Chamber of Commerce, Center for Capital Markets Competitiveness; Chair of Massachusetts High Technology Council; Member of the Chief Executives Club of Boston; Member of the Massachusetts General Hospital President's Council; Chairman of the Board of Directors of the Ron Burton Training Village; Director and former Chair of the Massachusetts Competitive Partnership; former Chair of the West Virginia University Foundation; and former Executive Committee Member of the Greater Boston Chamber of |

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| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;Name, Address<sup>1</sup>, Year<br>of Birth, Position(s)<br>Held with Fund and<br>Length of Service as a<br>Fund Trustee<sup>2</sup> | Principal Occupation(s) During<br>Past 5 Years | Number of Funds<br>in the Franklin<br>Templeton Funds<br>Complex<br>Overseen by<br>Trustee<sup>3</sup> | Other Directorships Held by Trustee |
|  |  |  | Commerce. |
| &nbsp;&nbsp;&nbsp;**\*\*\* Jane E. Trust** (Born 1962), Trustee since 2024 | Since 2020, Senior Vice President, Fund Board Management, Franklin Templeton. Since 2015, Officer and/or Trustee/Director of 123 funds associated with Franklin Templeton Fund Advisor, LLC ("FTFA") or its affiliates, and President and Chief Executive Officer of FTFA. From 2018 to 2020, Senior Managing Director of Legg Mason & Co., LLC ("Legg Mason & Co."). From 2016 to 2018, Managing Director of Legg Mason & Co. In 2015, Senior Vice President of FTFA. | 225 | None. |

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<sup>1</sup> The address of each Trustee is 100 Federal Street, Boston, MA 02110.

<sup>2</sup> Each Trustee serves for an indefinite term, until his or her resignation, retirement during the year he or she reaches age 75, death or removal.

<sup>3</sup> The Franklin Templeton funds complex is composed of the registered investment companies advised by the Investment Manager or by its affiliates.

\* Ms. Murphy is the founder, controlling member, and Chief Executive Officer of Runa Digital Assets, LLC ("RDA"), the investment manager of Runa Digital Partners, LP ("RDP"), a private investment fund. Ms. Murphy also holds a controlling interest in RDP's general partner and is a limited partner in RDP. A subsidiary of Franklin Resources, Inc. ("Franklin Templeton") and certain individuals employed by Franklin Templeton or its affiliates have made passive investments as limited partners in RDP (one of whom serves on the advisory board for RDA, which has no governance or oversight authority over RDA), representing in the aggregate approximately 38% of RDP as of April 30, 2025. In addition, if certain conditions are met, Franklin Templeton will be entitled to receive a portion of any incentive compensation allocable to RDP's general partner. For so long as Franklin Templeton maintains its investment in RDP, Ms. Murphy also has agreed upon request to advise and consult with Franklin Templeton and its affiliates on the market for digital assets. Ms. Murphy provides similar service to other limited partners in RDP that request her advice. With regard to Ms. Murphy, the relationships described above may give rise to a potential conflict of interest with respect to the funds.

\*\* Trustee who is an "interested person" (as defined in the 1940 Act) of the fund and the Investment Manager. Mr. Reynolds is deemed an "interested person" by virtue of his position as an officer of the fund and his direct beneficial interest in shares of Franklin Templeton, of which the Investment Manager is an indirect wholly-owned subsidiary. Mr. Reynolds is the President of your fund and each of the other Putnam funds, and prior to January 1, 2024, Mr. Reynolds was President and Chief Executive Officer of Putnam Management and Putnam Investments, LLC ("Putnam Investments"), the previous parent company to Putnam Management.

\*\*\* Trustee who is an "interested person" (as defined in the 1940 Act) of the fund and the Investment Manager. Ms. Trust is deemed an "interested person" by virtue of her positions with certain affiliates of the Investment Manager.

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#### Trustee Qualifications
Each of the fund's Trustees, with the exception of Ms. Trust and Mr. McGreevey, was most recently elected by shareholders of the fund during 2022, although most of the Trustees have served on the Board for many years. The Board Policy and Nominating Committee is responsible for recommending proposed nominees for election to the full Board of Trustees for its approval. As part of its deliberative process, the Committee considers the experience, qualifications, skills and attributes, including diversity of background, experience, and views, that it determines would most benefit the funds overseen by the Board of Trustees at the time.

In recommending the election of the board members as Trustees, the Committee generally considered the educational, business and professional experience of each Trustee in determining his or her qualifications to serve as a Trustee of the fund, including the Trustee's record of service as a director or trustee of public and private organizations. (This included, but was not limited to, consideration of the specific experience noted in the preceding table.) In the case of most members of the Board, the Committee considered his or her previous service as a member of the Board of Trustees, which demonstrated a high level of diligence and commitment to the interests of fund shareholders and an ability to work effectively and collegially with other members of the Board.

The Committee also considered, among other factors, the particular attributes described below with respect to the various individual Trustees and considered the attributes as indicative of the person's ability to deal effectively with the types of financial, regulatory, and/or investment matters that typically arise in the course of a Trustee's work:

<u>Independent Trustees</u> 

Liaquat Ahamed – Mr. Ahamed's experience as Chief Executive Officer of a major investment management organization and as head of the investment division at the World Bank, as well as his experience as an author of economic literature.

Barbara M. Baumann – Ms. Baumann's experience in the energy industry as a consultant, an investor, and in both financial and operational management positions at a global energy company, and her service as a director of multiple NYSE companies.

Katinka Domotorffy – Ms. Domotorffy's experience as Chief Investment Officer and Global Head of Quantitative Investment Strategies at a major asset management organization.

Catharine Bond Hill – Dr. Hill's education and experience as an economist and as president and provost of colleges in the United States.

Gregory G. McGreevey – Mr. McGreevey's experience as a Senior Managing Director of a global investment firm and as a director of a publicly traded real estate investment trust.

Jennifer Williams Murphy – Ms. Murphy's experience as Chief Operating Officer of a major global investment management organization and as Chief Executive Officer of an investment advisory firm specializing in digital assets.

Marie Pillai – Ms. Pillai's experience as Vice President, Chief Investment Officer, and Treasurer of a global food company, her experience in similar positions at a global engineering company, and her experience in corporate and operational finance roles at a global consumer products company.

George Putnam III – Mr. Putnam's training and experience as an attorney, his experience as the founder and Chief Executive Officer of an investment management firm and his experience as an author of various publications on the subject of investments.

Manoj P. Singh – Mr. Singh's experience as chief operating officer and global managing director of a global professional services organization that provided accounting, consulting, tax, risk management, and financial advisory services.

Mona K. Sutphen – Ms. Sutphen's extensive experience advising corporate, philanthropic and institutional investors on the intersection of geopolitics, policy and markets, as well as her prior service as White House Deputy Chief of Staff for Policy and as a US Foreign Service Officer, her work advising financial services companies on macro risks, and her service as director of public companies.

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 <u>Interested Trustees</u> 

Robert L. Reynolds — Mr. Reynolds's extensive experience as a senior executive of a major mutual fund organization in the United States and his previous role as President and Chief Executive Officer of Putnam Management and Putnam Investments, LLC, the previous parent company to Putnam Management and PAC.

Jane E. Trust — Ms. Trust's investment management and risk oversight experience as an executive and portfolio manager and leadership roles within Franklin Templeton and affiliated entities.

#### Officers
The other officers of the fund, in addition to Robert L. Reynolds, the fund's President, are shown below. All of the officers of your fund listed below are employees of the Investment Manager or its affiliates or are members of the Trustees' independent administrative staff.

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|:---|:---|:---|
| &nbsp;&nbsp;&nbsp; **Name, Address<sup>1</sup>, Year of Birth, Position(s)<br>Held with Fund**<br>| **Length of Service<br>with the Putnam<br>Funds<sup>2</sup>**<br>| **Principal Occupation(s) During Past 5 Years and<br>Position(s) with Fund's Investment Adviser and<br>Distributor<sup>3</sup>**<br>|
| &nbsp;&nbsp;&nbsp; **Jonathan S. Horwitz<sup>4</sup>** (Born 1955) <br> Executive Vice President, Principal Executive Officer, and Compliance Liaison | Since 2004 | Executive Vice President, Principal Executive Officer, and Compliance Liaison, The Putnam Funds. |
| &nbsp;&nbsp;&nbsp; **Stephen J. Tate** (Born 1974)<br> Vice President and Chief Legal Officer | Since 2021 | Deputy General Counsel, Franklin Templeton, and Secretary, Putnam U.S. Holdings I, LLC ("Putnam Holdings") and Putnam Management (2024 – Present). General Counsel and related positions, Putnam Investments, Putnam Management and Putnam Retail Management (2004-2023). |
| &nbsp;&nbsp;&nbsp; **James F. Clark<sup>3</sup>** (Born 1974)<br> Vice President and Chief Compliance Officer | Since 2016 | Chief Compliance Officer, Putnam Holdings and Putnam Management (2016 – Present). Associate General Counsel, Putnam Investments, Putnam Management and Putnam Retail Management (2003-2015). |
| &nbsp;&nbsp;&nbsp; **Michael J. Higgins<sup>4</sup>** (Born 1976)<br> Vice President, Treasurer, and Clerk | Since 2010 | Vice President, Treasurer, and Clerk, The Putnam Funds. |
| &nbsp;&nbsp;&nbsp; **Kelley Hunt** (Born 1984)<br> AML Compliance Officer | Since 2024 | Manager, U.S. Financial Crime Compliance, Franklin Templeton. |
| &nbsp;&nbsp;&nbsp; **Jeffrey White** (Born 1971)<br> Vice President, Principal Financial Officer, Principal Accounting Officer, and Assistant Treasurer | Since 2024 | Vice President, Fund Administration and Reporting, Franklin Templeton. |
| &nbsp;&nbsp;&nbsp; **Denere P. Poulack<sup>4</sup>** (Born 1968)<br> Assistant Vice President, Assistant Clerk, and Assistant Treasurer | Since 2004 | Assistant Vice President, Assistant Clerk, and Assistant Treasurer, The Putnam Funds. |

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<sup>1</sup> The address of each Officer, other than as noted below, is 100 Federal Street, Boston, MA 02110. Ms. Hunt's address is 100 Fountain Parkway, St. Petersburg, FL 33716. Mr. White's address is One Franklin Parkway, San Mateo, CA 94403.

<sup>2</sup> Each officer serves for an indefinite term, until his or her resignation, retirement, death or removal.

<sup>3</sup> Prior positions and/or officer appointments with the fund or the fund's investment adviser and distributor have been omitted.

<sup>4</sup> Officers of the fund indicated are members of the Trustees' independent administrative staff. Compensation for these individuals is fixed by the Trustees and reimbursed to the Investment Manager by the funds, except in certain cases where a fund has a unitary fee and/or expense limitation arrangement whereby the Investment Manager is responsible for all or a portion of these individuals' compensation.

Except as stated above, the principal occupations of the officers and Trustees for the last five years have been with the employers as shown above, although in some cases they have held different positions with such employers.

#### Leadership Structure and Standing Committees of the Board of Trustees
**For details regarding the number of times the standing committees of the Board of Trustees met during a fund's last fiscal year, see "Trustee responsibilities and fees" in Part I of this SAI.** 

**Board Leadership Structure**. Currently, 10 of the 12 Trustees of your fund are Independent Trustees, meaning that they are not considered "interested persons" of your fund or the Investment Manager. These Independent Trustees must vote separately to approve all financial arrangements and other agreements with the Investment Manager and other affiliated parties. The role of independent trustees has been characterized as that of a "watchdog" charged with oversight to protect shareholders' interests against overreaching and abuse by those who are in a position to control or influence a fund. Your fund's Independent Trustees meet regularly as a group in executive session (*i.e*., without representatives of the Investment Manager or its affiliates present). An Independent Trustee currently serves as chair of the Board.

Taking into account the number, the diversity and the complexity of the funds overseen by the Board and the aggregate amount of assets under management, your fund's Trustees have determined that the efficient conduct of the Board's affairs makes it desirable to delegate responsibility for certain specific matters to committees of the Board. The Executive Committee, Audit, Compliance and Risk Committee, and Board Policy and Nominating Committee are authorized to take action on certain matters as specified in their charters or in policies and procedures relating to the governance of the funds; with respect to other matters, these committees review and evaluate and make recommendations to the Trustees as they deem appropriate. The other committees also review and evaluate matters specified in their charters and make recommendations to the Trustees as they deem appropriate. Each committee may utilize the resources of your fund's independent staff, counsel and independent registered public accountants as well as other experts. The committees meet as often as appropriate, either in conjunction with regular meetings of the Trustees or otherwise. The membership and chair of each committee are appointed by the Trustees upon recommendation of the Board Policy and Nominating Committee. Each committee is chaired by an Independent Trustee and, except as noted below, the membership and chairs of each committee consist exclusively of Independent Trustees.

The Trustees have determined that this committee structure also allows the Board to focus more effectively on the oversight of risk as part of its broader oversight of the fund's affairs. While risk management is the primary responsibility of the Investment Manager, the Trustees receive reports regarding investment risks, compliance risks and other risks. The Board and certain committees also meet periodically with the funds' Chief Compliance Officer to receive compliance reports. In addition, the Board and its Investment Oversight Committees meet periodically with the portfolio managers of the funds to receive reports regarding the management of the funds. The Board's committee structure allows separate committees to focus on different aspects of these risks and their potential impact on some or all of the funds and to discuss with the Investment Manager how it monitors and controls risks.

The Board recognizes that the reports it receives concerning risk management matters are, by their nature, typically summaries of the relevant information. Moreover, the Board recognizes that not all risks that may affect your fund can be identified in advance; that it may not be practical or cost effective to eliminate or to mitigate certain risks; that it may be necessary to bear certain risks (such as investment-related risks) in seeking to achieve your fund's investment objectives; and that the processes,

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procedures and controls employed to address certain risks may be limited in their effectiveness. As a result of the foregoing and for other reasons, the Board's risk management oversight is subject to substantial limitations.

**Audit, Compliance and Risk Committee**. The Audit, Compliance and Risk Committee provides oversight on matters relating to the integrity of the funds' financial statements, compliance with legal and regulatory requirements, the performance of each fund's internal audit function, Codes of Ethics issues, and certain aspects of overseeing the Investment Manager's risk assessment and risk management. This oversight is discharged by regularly meeting with management and the funds' independent registered public accountants and remaining current with respect to industry developments. Duties of this Committee also include the review and evaluation of all matters and relationships pertaining to the funds' independent registered public accountants, including their independence, and the review of the Investment Manager's oversight of the funds' significant other service providers (unless another committee, or the Board, has this responsibility). The Committee also oversees all dividends and distributions by the funds by making recommendations to the Trustees regarding the amount and timing of dividends and distributions paid by the funds, and determining such matters when the Trustees are not in session. The Committee also oversees the policies and procedures pursuant to which the Investment Manager prepares recommendations for dividends and distributions, and meets regularly with representatives of the Investment Manager to review the implementation of these policies and procedures. The Committee reports to the Trustees and makes recommendations to the Trustees regarding these matters.

The Committee also oversees the valuation of assets of the funds overseen by the Board of Trustees and reviews the funds' policies and procedures for achieving accurate and timely pricing of fund shares. The Committee oversees implementation of these policies, including fair value determinations of individual investments made by the Investment Manager or other designated agents of the funds. The Committee also reviews (i) compliance by money market funds with Rule 2a-7 under the 1940 Act, (ii) in-kind redemptions by fund affiliates, (iii) the correction of occasional pricing errors, and (iv) the Investment Manager's oversight of pricing vendors. The Committee reports to the Trustees and makes recommendations to the Trustees regarding these matters.

The members of the Committee include only Independent Trustees. Each member of the Committee also is "independent," as that term is interpreted for purposes of Rule 10A-3(b)(1) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and the listing standards of the NYSE. The Board has adopted a written charter for the Committee. The current members are Messrs. Singh (Chair) and McGreevey and Mses. Pillai and Sutphen.

**Board Policy and Nominating Committee.** The Board Policy and Nominating Committee reviews matters pertaining to the operations of the Board of Trustees and its Committees, the compensation of the Trustees and their staff, and the conduct of legal affairs for the funds. The Committee evaluates and recommends all candidates for election as Trustees and recommends the appointment of members and chairs of each board committee. The Committee will consider nominees for Trustee recommended by shareholders of a fund provided that such recommendations are submitted by the date disclosed in the fund's proxy statement and otherwise comply with applicable securities laws, including Rule 14a-8 under the Exchange Act. The Committee also reviews policy matters affecting the operation of the Board and its independent staff. In addition, the Committee oversees the voting of proxies associated with portfolio investments of the funds with the goal of ensuring that these proxies are voted in the best interest of the funds' shareholders. The Committee reports to the Trustees and makes recommendations to the Trustees regarding these matters. The Committee generally believes that the Board benefits from diversity of background, experience and views among its members, and considers this as a factor in evaluating the composition of the Board, but has not adopted any specific policy in this regard. The Committee is composed entirely of Independent Trustees. The current members are Dr. Hill (Chair), Mses. Baumann and Sutphen, and Mr. Putnam.

**Contract Committee.** The Contract Committee reviews and evaluates at least annually arrangements pertaining to (i) the engagement of the Investment Manager and its affiliates to provide services to the funds, (ii) the expenditure of the funds' assets for distribution purposes pursuant to Distribution Plans of the funds, and (iii) the engagement of other persons to provide material services to the funds, including in particular those instances where the cost of services is shared between the funds and the Investment Manager and its affiliates or where the Investment Manager or its affiliates have a material interest. The Committee also reviews the proposed organization of new fund products and proposed structural changes to existing funds. In addition, the Committee reviews communications with, and the quality of services provided to, shareholders and oversees the marketing and sale of fund shares by Franklin Distributors. The Committee reports to the Trustees and makes recommendations to the Trustees regarding these matters.

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The Committee is composed entirely of Independent Trustees. The current members are Messrs. Putnam (Chair) and Ahamed, Mses. Baumann and Domotorffy, and Dr. Hill. The Committee also reviews the funds' policies regarding the execution of portfolio trades and the Investment Manager's (and its affiliates') practices and procedures relating to the implementation of those policies. The Committee reviews periodic reports on the cost and quality of execution of portfolio transactions and the extent to which brokerage commissions have been used (i) by the Investment Manager (or its affiliates) to obtain brokerage and research services generally useful to it (or its affiliates) in managing the portfolios of the funds and of its other clients, and (ii) by the funds to pay for certain fund expenses. The Committee reports to the Trustees and makes recommendations to the Trustees regarding these matters.

The Committee is composed entirely of Independent Trustees. The current members are Messrs. Putnam (Chair) and Ahamed, Mses. Baumann and Domotorffy, and Dr. Hill.

**Executive Committee**. The functions of the Executive Committee are twofold. The first is to ensure that the funds' business may be conducted at times when it is not feasible to convene a meeting of the Trustees or for the Trustees to act by written consent. The Committee may exercise any or all of the power and authority of the Trustees when the Trustees are not in session. The second is to review annual and ongoing goals, objectives and priorities for the Board and to facilitate coordination of all efforts between the Trustees and the Investment Manager on behalf of the shareholders of the funds. The Committee currently consists of Ms. Baumann (Chair) and Messrs. Putnam and Singh.

**Investment Oversight Committees.** The Investment Oversight Committees regularly meet with investment personnel of the Investment Manager and its affiliates to review the investment performance and strategies of the funds in light of their stated goals and policies. The Committees seek to identify any compliance issues that are unique to the applicable categories of funds and work with the appropriate board committees to ensure that any such issues are properly addressed. The Committees review the proposed investment objectives, policies and restrictions of new fund products and proposed changes to investment objectives, policies and restrictions of existing funds. The Committees also review matters relating to the exemptive order(s) and rules specifically applicable to the ETFs and any other matters arising from time to time relating to the ETFs that are not otherwise within the general subject matter purview of another committee. The current members of Investment Oversight Committee A are Mses. Domotorffy (Chair), Baumann, and Trust, Dr. Hill, and Messrs. McGreevey and Putnam, and the current members of Investment Oversight Committee B are Mses. Pillai (Chair), Murphy and Sutphen, and Messrs. Ahamed, Reynolds, and Singh.

#### Indemnification
Subject to certain exceptions specified therein, the Trust's Amended and Restated Agreement and Declaration of Trust provides that the Trust and each fund will indemnify its Trustees and officers to the fullest extent permitted by law against liability and against all expenses reasonably incurred or paid by him or her in connection with any claim, action, suit or proceeding in which he or she becomes involved as a party or otherwise by virtue of his or her being or having been a trustee or officer of the Trust and against amounts paid or incurred by him or her in the settlement thereof. Each fund, at its expense, provides liability insurance for the benefit of its Trustees and officers.

**For details of Trustees' fees paid by the fund and information concerning retirement guidelines for the Trustees, see "Charges and expenses" in Part I of this SAI.** 

#### The Investment Manager and its Affiliates
*Putnam Investment Management, LLC* 

If so disclosed in the fund's prospectus, Putnam Management serves as Investment Manager to the fund. Putnam Management is one of America's oldest money management firms. Putnam Management has been managing mutual funds since 1937.

*Franklin Advisers, Inc.* 

If so disclosed in the fund's prospectus, Franklin Advisers serves as Investment Manager to the fund. Franklin Advisers, Inc., a global investment organization, is a California corporation formed on October 31, 1985.

#### Additional information about Putnam Management and Franklin Advisers

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Putnam Management and Franklin Advisers are indirect, wholly-owned subsidiaries of Franklin Templeton, a Delaware corporation. Franklin Templeton, whose principal executive offices are at One Franklin Parkway, San Mateo, California 94403, is a global investment management organization.

Trustees and officers of the fund who are also officers of Putnam Management, Franklin Advisers or their affiliates or who are stockholders of Franklin Templeton or its affiliates will benefit from the advisory fees, sales commissions, distribution fees and transfer agency fees paid or allowed by the fund.

#### The Management Contract
Under a management contract between the fund and the Investment Manager (the "Management Contract"), subject to such policies as the Trustees may determine, the Investment Manager, at its expense, furnishes continuously an investment program for the fund and makes investment decisions on behalf of the fund. Subject to the control of the Trustees, the Investment Manager also manages, supervises and conducts the other affairs and business of the fund, furnishes all necessary investment and management facilities, including salaries of personnel, required for it to execute its duties faithfully, furnishes office space and equipment, provides bookkeeping and clerical services (including determination of the fund's net asset value, but excluding shareholder accounting services) and typically places orders for the purchase and sale of the fund's portfolio securities (in some cases, Putnam Management and Franklin Advisers, in their capacities as sub-advisers to a fund, may place orders for the purchase and sale of the fund's portfolio securities, and references elsewhere in this SAI to the Investment Manager placing orders for the purchase and sale of portfolio securities shall be deemed to include Putnam Management and Franklin Advisers in their capacities as sub-advisers, as appropriate in the context). The Investment Manager may place fund portfolio transactions with broker-dealers that furnish the Investment Manager, without cost to it, certain research services of value to the Investment Manager and its affiliates in advising the fund and other clients. In so doing, the Investment Manager may cause the fund to pay greater brokerage commissions than it might otherwise pay.

Franklin Templeton Services, LLC ("FT Services") has entered into an agreement with the Investment Manager to provide certain administrative services and facilities for the fund. FT Services is an indirect, wholly-owned subsidiary of Franklin Templeton and is an affiliate of the Investment Manager, the fund's investment manager. The administrative services FT Services provides include preparing and maintaining books, records, and tax and financial reports, and monitoring compliance with regulatory requirements.The Investment Manager pays FT Services a monthly fee equal to 105% of the internal costs incurred by FTS for providing administrative services to the Putnam ETFs. The Investment Manager will also reimburse FT Services for fees paid by FT Services to any third-party service provider for sub-administration and other services for the fund.

#### For details of the Investment Manager's compensation under the Management Contract, see "Charges and expenses" in Part I of this SAI.
The Management Contract provides that the Investment Manager shall not be subject to any liability to the fund or to any shareholder of the fund for any act or omission in the course of or connected with rendering services to the fund in the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of its duties on the part of the Investment Manager.

The Management Contract may be terminated without penalty by vote of the Trustees or the shareholders of the fund, or by the Investment Manager, on not less than 60 days' written notice. Subject to certain exceptions, it may be amended only by a vote of the shareholders of the fund. The Management Contract also terminates without payment of any penalty in the event of its assignment. The Management Contract provides that it will continue in effect only so long as such continuance is approved at least annually by vote of either the Trustees or the shareholders, and, in either case, by a majority of the Trustees who are not "interested persons" of the Investment Manager or the fund. In each of the foregoing cases, the vote of the shareholders is the affirmative vote of a "majority of the outstanding voting securities" as defined in the 1940 Act.

FT Services has entered into a Sub-Administration and Accounting Agreement with The Bank of New York Mellon ("BNY Mellon"), under which FT Services has delegated to BNY Mellon responsibility for providing certain administrative, pricing, and bookkeeping services for the fund. FT Services pays BNY Mellon a monthly fee based on a combination of fixed annual charges and charges based on the fund's assets and the number and types of securities held by the fund and reimburses BNY Mellon for certain out-of-pocket expenses.

#### The Sub-Advisers

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 *Putnam Investment Management, LLC* 

If so disclosed in the fund's prospectus, Putnam Management, an affiliate of Franklin Advisers, has been retained as a sub-adviser by Franklin Advisers, at Franklin Advisers' own expense, to make investment decisions for such fund assets as may be designated from time to time for its management by Franklin Advisers and to provide certain other advisory and related services pursuant to a subadvisory agreement between Franklin Advisers and Putnam Management. The other advisory and related services may include the facilitation of derivative transactions, sharing of investment research if so requested by Franklin Advisers, and proxy voting, and these services are subject to change over time.

The subadvisory agreement provides that Putnam Management shall not be subject to any liability to Franklin Advisers, the fund or any shareholder of the fund for any act or omission in the course of or connected with rendering services to the fund in the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations and duties on the part of Putnam Management.

The subadvisory agreement may be terminated with respect to the fund without penalty by vote of the Trustees or shareholders of the fund, or by Franklin Advisers or Putnam Management upon 60 days' written notice. The subadvisory agreement also terminates without payment of any penalty in the event of its assignment or upon any termination of the management contract between Franklin Advisers and the fund. The subadvisory agreement provides that it will continue in effect only so long as such continuance is approved at least annually by vote of either the Trustees or the shareholders, and, in either case, by a majority of the Trustees who are not parties to the subadvisory agreement or "interested persons" thereof. In each of the foregoing cases, the vote of the shareholders is the affirmative vote of a "majority of the outstanding voting securities" as defined in the 1940 Act.

For additional information about Putnam Management, see "Putnam Investment Management, LLC" under "The Investment Manager and its Affiliates" above.

*Franklin Advisers, Inc.* 

If so disclosed in the fund's prospectus, Franklin Advisers, an affiliate of Putnam Management, has been retained as a sub-adviser to provide by Putnam Management, at Putnam Management's own expense, to make investment decisions for such fund assets as may be designated from time to time for its management by Putnam Management and to provide certain other advisory and related services pursuant to a subadvisory agreement between Putnam Management and Franklin Advisers. The other advisory and related services may include the facilitation of foreign exchange transactions, sharing of investment research if so requested by Putnam Management, and managing the fund's investments in cash or cash equivalents, and these services are subject to change over time.

The subadvisory agreement provides that Franklin Advisers shall not be subject to any liability to Putnam Management, the fund or any shareholder of the fund for any act or omission in the course of or connected with rendering services to the fund in the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations and duties on the part of Franklin Advisers.

The subadvisory agreement may be terminated with respect to the fund without penalty by vote of the Trustees or shareholders of the fund, or by Putnam Management or Franklin Advisers or upon 60 days' written notice. The subadvisory agreement also terminates without payment of any penalty in the event of its assignment or upon any termination of the management contract between Putnam Management and the fund. The subadvisory agreement provides that it will continue in effect only so long as such continuance is approved at least annually by vote of either the Trustees or the shareholders, and, in either case, by a majority of the Trustees who are not parties to the subadvisory agreement or "interested persons" thereof. In each of the foregoing cases, the vote of the shareholders is the affirmative vote of a "majority of the outstanding voting securities" as defined in the 1940 Act.

For additional information about Franklin Advisers, see "Franklin Advisers, Inc." under "The Investment Manager and its Affiliates" above.

<u>Franklin Templeton Investment Management Limited</u> 

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If so disclosed in the fund's prospectus, FTIML, an affiliate of the Investment Manager, has been retained as a sub-adviser for a portion of the assets of the fund, as determined from time to time by the Investment Manager pursuant to a sub-advisory agreement between the Investment Manager and FTIML. Under the terms of the sub-advisory agreement, FTIML, at its own expense, manages the investment and reinvestment of that portion of each such fund's portfolio that is allocated to FTIML from time to time by the Investment Manager, with FTIML determining what securities and other property will be purchased, retained or sold with respect to such portion, and placing all purchase and sale orders with respect to such portion, subject to the supervision of the Investment Manager. The Investment Manager may also, at its discretion, request FTIML to provide assistance with purchasing and selling securities for the fund, including placement of orders with certain broker-dealers, and to perform research and obtain and evaluate data relevant to the fund's investment strategies and policies.

Pursuant to the terms of the sub-advisory agreement, FTIML will pay all expenses incurred by it in connection with its activities under this agreement other than the cost of securities (including brokerage commissions, if any) purchased for the fund. The sub-advisory agreement provides that, in the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations and duties on the part of FTIML, neither FTIML, nor any of its directors, officers, employees or affiliates, shall be subject to liability to the Investment Manager, the fund or any shareholder of the fund for any error of judgment or mistake of law or any other act or omission in the course of, or connected with, rendering services to the fund or for any losses that may be sustained in the purchase, holding or sale of any security by the fund.

The sub-advisory agreement may be terminated at any time with respect to a fund without penalty by vote of the Trustees or the shareholders of the fund upon not more than sixty days' written notice to the Investment Manager and FTIML, and by FTIML or the Investment Manager on not more than 60 days' written notice to the other party. The sub-advisory agreement also terminates without payment of any penalty in the event of its assignment. Subject to applicable law, it may be amended by a majority of the Trustees who are not "interested persons" of the Investment Manager or the fund. The sub-advisory agreement provides that it will continue in effect only so long as such continuance is approved at least annually by vote of either the Trustees or the shareholders, and, in either case, by a majority of the Trustees who are not "interested persons" of the Investment Manager or the fund. In each of the foregoing cases, the vote of the shareholders is the affirmative vote of a "majority of the outstanding voting securities" as defined in the 1940 Act.

*PanAgora Asset Management, Inc.*

If so disclosed in the fund's prospectus, PanAgora, an affiliate of Putnam Management, has been retained as the sub-adviser for a portion of the assets of the fund, as determined from time to time by Putnam Management, by Putnam Management pursuant to a sub-advisory agreement between Putnam Management and PanAgora.

PanAgora, a Delaware corporation organized in 1985 and incorporated in 1989, is located at One International Place, 24th Floor, Boston, Massachusetts 02110. In addition, certain PanAgora employees own non-voting interests in PanAgora. Assuming all employee stock and options are issued and exercised, up to 20% of the economic interest in PanAgora would be owned by PanAgora employees.

Under certain terms of the sub-advisory agreement, PanAgora, at its own expense, furnishes continuously an investment program for that portion of each such fund that is allocated to PanAgora from time to time by Putnam Management, and makes investment decisions on behalf of such portion of the fund, subject to the supervision of the Board of Trustees and Putnam Management.

PanAgora, at its expense, furnishes all necessary investment and management facilities, including salaries of personnel, required for it to execute its duties. The sub-advisory agreement provides that PanAgora shall not be subject to any liability to Putnam Management, the fund or any shareholder of the fund for any act or omission in the course of or connected with rendering services to the fund in the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations and duties on the part of PanAgora.

The sub-advisory agreement may be terminated with respect to a fund without penalty by vote of the Trustees or the shareholders of the fund, or by PanAgora or Putnam Management, on not more than 60 days' nor less than 30 days' written notice. The sub-advisory agreement also terminates without payment of any penalty in the event of its assignment. Subject to applicable law, it may be amended by a majority of the Trustees who are not "interested persons" of Putnam Management or the fund. The sub-advisory agreement provides that it will continue in effect only so long as such continuance is approved at least annually by vote of either the Trustees or the shareholders, and, in either case, by a majority of the Trustees who are not

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"interested persons" of Putnam Management or the fund. In each of the foregoing cases, the vote of the shareholders is the affirmative vote of a "majority of the outstanding voting securities" as defined in the 1940 Act.

#### Portfolio Transactions

#### Potential conflicts of interest in managing multiple accounts.
*Investment Manager* 

Like other investment professionals with multiple clients, the fund's Portfolio Manager(s) may face certain potential conflicts of interest in connection with managing both the fund and the other accounts listed under **"PORTFOLIO MANAGER(S)" "Other accounts managed"** at the same time. The paragraphs below describe some of these potential conflicts, which the Investment Manager believes are faced by investment professionals at most major financial firms. As described below, the Investment Manager and the Trustees have adopted compliance policies and procedures that attempt to address certain of these potential conflicts.

The management of accounts with different advisory fee rates and/or fee structures, including accounts that pay advisory fees based on account performance ("performance fee accounts"), may raise potential conflicts of interest by creating an incentive to favor higher-fee accounts. These potential conflicts may include, among others:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The most attractive investments could be allocated to higher-fee accounts or performance fee accounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The trading of higher-fee accounts could be favored as to timing and/or execution price. For example, higher-fee accounts could be permitted to sell securities earlier than other accounts when a prompt sale is desirable or to buy securities at an earlier and more opportune time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The trading of other accounts could be used to benefit higher-fee accounts (front-running).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The investment management team could focus their time and efforts primarily on higher-fee accounts due to a personal stake in compensation.

The Investment Manager attempts to address these potential conflicts of interest relating to higher-fee accounts through various compliance policies that are generally intended to place all accounts, regardless of fee structure, on the same footing for investment management purposes. For example, under the Investment Manager's policies:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Performance fee accounts must be included in all standard trading and allocation procedures with all other accounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All accounts must be allocated to a specific category of account and trade in parallel with allocations of similar accounts based on the procedures generally applicable to all accounts in those groups (e.g., based on relative risk budgets of accounts).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All trading must be effected through Putnam's trading desks and normal queues and procedures must be followed (i.e., no special treatment is permitted for performance fee accounts or higher-fee accounts based on account fee structure).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Front running is strictly prohibited.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Except as provided in Part I of this SAI, the fund's Portfolio Manager(s) may not be guaranteed or specifically allocated any portion of a performance fee.

As part of these policies, the Investment Manager has also implemented trade oversight and review procedures in order to monitor whether particular accounts (including higher-fee accounts or performance fee accounts) are being favored over time.

Potential conflicts of interest may also arise when the Portfolio Manager(s) have personal investments in other accounts that may create an incentive to favor those accounts. As a general matter and subject to limited exceptions, the Investment Manager's investment professionals do not have the opportunity to invest in client accounts, other than Putnam funds. However, in the ordinary course of business, the Investment Manager or related persons may from time to time establish "pilot" or "incubator" accounts for the purpose of testing proposed investment strategies and products before offering them to clients. These pilot accounts may be in the form of registered investment companies, private funds such as partnerships or separate accounts established by the Investment Manager or an affiliate. The Investment Manager or an affiliate supplies the funding for these accounts. Putnam employees, including the fund's Portfolio Manager(s), may also invest in certain pilot accounts. The Investment Manager, and to the extent applicable, the Portfolio Manager(s) will benefit from the favorable investment performance of pilot accounts. Pilot funds and accounts may, and frequently do, invest in the same securities as the client accounts. The Investment Manager's policy is to treat pilot accounts in the same manner as client accounts for purposes of trading allocation – neither favoring nor disfavoring them except as is legally required. For example, pilot accounts are normally

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included in the Investment Manager's daily block trades to the same extent as client accounts (except that pilot accounts do not participate in initial public offerings).

A potential conflict of interest may arise when the fund and other accounts purchase or sell the same securities. On occasions when the Portfolio Manager(s) consider the purchase or sale of a security to be in the best interests of the fund as well as other accounts, the Investment Manager's trading desk may, to the extent permitted by applicable laws and regulations and where practicable, aggregate the securities to be sold or purchased in order to obtain the best execution and lower brokerage commissions, if any. Aggregation of trades may create the potential for unfairness to the fund or another account if one account is favored over another in allocating the securities purchased or sold – for example, by allocating a disproportionate amount of a security that is likely to increase in value to a favored account. The Investment Manager's trade allocation policies generally provide that each day's transactions in securities that are purchased or sold by multiple accounts are, insofar as possible, averaged as to price and allocated between such accounts (including the fund) in a manner which in the Investment Manager's opinion is equitable to each account and in accordance with the amount being purchased or sold by each account. However, accounts advised or sub-advised by FTIML will only place trades at an execution-only commission rate, whereas other Putnam accounts may pay an additional amount for research and other products and services (a "bundled" or "full service" rate). The Investment Manager may aggregate trades in FTIML accounts with other Putnam accounts that pay a bundled rate as long as all participating accounts pay the same execution rate. To the extent that non- FTIML accounts pay a bundled rate, the FTIML and other the Investment Manager accounts would not be paying the same total commission rate. Certain other exceptions exist for specialty, regional or sector accounts. Trade allocations are reviewed on a periodic basis as part of the Investment Manager's trade oversight procedures in an attempt to ensure fairness over time across accounts.

"Cross trades," in which one Putnam account sells a particular security to another account (potentially saving transaction costs for both accounts), may also pose a potential conflict of interest. Cross trades may be seen to involve a potential conflict of interest if, for example, one account is permitted to sell a security to another account at a higher price than an independent third party would pay, or if such trades result in more attractive investments being allocated to higher-fee accounts. The Investment Manager and the fund's Trustees have adopted compliance procedures that provide that any transactions between the fund and another Putnam-advised account are to be made at an independent current market price, as required by law.

Another potential conflict of interest may arise based on the different goals and strategies of the fund and other accounts. For example, another account may have a shorter-term investment horizon or different goals, policies or restrictions than the fund. Depending on goals or other factors, the Portfolio Manager(s) may give advice and make decisions for another account that may differ from advice given, or the timing or nature of decisions made, with respect to the fund. In addition, investment decisions are the product of many factors in addition to basic suitability for the particular account involved. Thus, a particular security may be bought or sold for certain accounts even though it could have been bought or sold for other accounts at the same time. More rarely, a particular security may be bought for one or more accounts managed by the Portfolio Manager(s) when one or more other accounts are selling the security (including short sales). There may be circumstances when purchases or sales of portfolio securities for one or more accounts may have an adverse effect on other accounts. As noted above, the Investment Manager has implemented trade oversight and review procedures to monitor whether any account is systematically favored over time.

Under federal securities laws, a short sale of a security by another client of the Investment Manager or its affiliates (other than another registered investment company) within five business days prior to a public offering of the same securities (the timing of which is generally not known to Putnam in advance) may prohibit the fund from participating in the public offering, which could cause the fund to miss an otherwise favorable investment opportunity or to pay a higher price for the securities in the secondary markets.

The fund's Portfolio Manager(s) may also face other potential conflicts of interest in managing the fund, and the description above is not a complete description of every conflict that could be deemed to exist in managing both the fund and other accounts. For information on restrictions imposed on personal securities transactions of the fund's Portfolio Manager(s), please see "Personal Investments by Employees of the Investment Manager and Franklin Distributors and Officers and Trustees of the Fund."

*PanAgora* 

The portfolio managers' management of other accounts may give rise to potential conflicts of interest in connection with their management of the fund's investments, on the one hand, and the investments of the other accounts, on the other. The other

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accounts include retirement plans and separately managed accounts ("SMA's"), as well as incubated accounts. The other accounts might have similar investment objectives as the fund, or hold, purchase or sell securities that are eligible to be held, purchased or sold by the fund. While the portfolio managers' management of other accounts may give rise to the following potential conflicts of interest, PanAgora does not believe that the conflicts, if any, are material or, to the extent any such conflicts are material, PanAgora believes that it has designed policies and procedures to manage those conflicts in an appropriate way.

A potential conflict of interest may arise as a result of the portfolio managers' day-to-day management of the fund. Because of their positions with the fund, the portfolio managers know the size, timing and possible market impact of the fund's trades. It is theoretically possible that the portfolio managers could use this information to the advantage of other accounts they manage and to the possible detriment of the fund. However, PanAgora has adopted policies and procedures reasonably designed to allocate investment opportunities on a fair and equitable basis over time.

A potential conflict of interest may arise as a result of the portfolio managers' management of the fund, and other accounts, which, in theory, may allow them to allocate investment opportunities in a way that favors other accounts over the fund. This conflict of interest may be exacerbated to the extent that PanAgora or the portfolio managers receive, or expect to receive, greater compensation from their management of the other accounts than the fund. Notwithstanding this theoretical conflict of interest, it is PanAgora's policy to manage each account based on its investment objectives and related restrictions and, as discussed above, PanAgora has adopted policies and procedures reasonably designed to allocate investment opportunities on a fair and equitable basis over time and in a manner consistent with each account's investment objectives and related restrictions. For example, while the portfolio managers may buy for other accounts securities that differ in identity or quantity from securities bought for the fund, such securities might not be suitable for the fund given its investment objective and related restrictions.

For information about other funds and accounts managed by the fund's Portfolio Manager(s), please refer to "Who oversees and manages the fund(s)?" in the prospectus and **"PORTFOLIO MANAGER(S)" "Other accounts managed"** in Part I of the SAI.

#### Brokerage and research services.
Transactions on stock exchanges, commodities markets and futures markets and other agency transactions involve the payment by the fund of negotiated brokerage commissions. Such commissions may vary among different brokers. A particular broker may charge different commissions according to such factors as execution venue and exchange. Although the fund does not typically pay commissions for principal transactions in the over-the-counter markets, such as the markets for most fixed income securities and certain derivatives, an undisclosed amount of profit or "mark-up" is included in the price the fund pays. In underwritten offerings, the price paid by the fund includes a disclosed, fixed commission or discount retained by the underwriter or dealer. **See "Charges and expenses" in Part I of this SAI for information concerning commissions paid by the fund**.

It has for many years been a common practice in the investment advisory business for broker-dealers that execute portfolio transactions for the clients of advisers of investment companies and other institutional investors to provide those advisers with brokerage and research services, as defined in Section 28(e) of the Exchange Act. Consistent with this practice, the Investment Manager receives brokerage and research services from broker-dealers with which the Investment Manager places the fund's portfolio transactions. The products and services that broker-dealers may provide to the Investment Manager's managers and analysts include, among others, trading systems and other brokerage services, economic and political analysis, fundamental and macro investment research, industry and company reviews, statistical information, market data, evaluations of investments, strategies, markets and trading venues, recommendations as to the purchase and sale of investments, performance measurement services and meetings with management of current or prospective portfolio companies or with industry experts. Some of these services are of value to the Investment Manager and its affiliates in advising various of their clients (including the fund), although not all of these services are necessarily useful and of value in managing the fund. Research services provided by broker-dealers are supplemental to the Investment Manager's own research efforts and relieve the Investment Manager of expenses it might otherwise have borne in generating such research. The management fee paid by the fund is not reduced because the Investment Manager and its affiliates receive brokerage and research services even though the Investment Manager might otherwise be required to purchase some of these services for cash. The Investment Manager may also use portfolio transactions to generate "soft dollar" credits to pay for "mixed-use" services (i.e., products or services that may be used both for investment/brokerage- and non-investment/brokerage-related purposes), but in such instances the Investment Manager uses its own resources to pay for that portion of the mixed-use product or service that in its good-faith judgment does not relate to investment or brokerage purposes. The Investment Manager may also allocate trades to generate soft dollar credits for third-party investment research reports and related fundamental research.

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The Investment Manager places all orders for the purchase and sale of portfolio investments for the funds, and buys and sells investments for the funds, through a substantial number of brokers and dealers. In selecting broker-dealers to execute the funds' portfolio transactions, the Investment Manager uses its best efforts to obtain for each fund the most favorable price and execution reasonably available under the circumstances, except to the extent it may be permitted to pay higher brokerage commissions as described below. In seeking the most favorable price and execution and in considering the overall reasonableness of the brokerage commissions paid, the Investment Manager, having in mind the fund's best interests, considers all factors it deems relevant, including, in no particular order of importance, and by way of illustration, the price, size and type of the transaction, the nature of the market for the security or other investment, the amount of the commission, research and brokerage services provided by a broker-dealer, the timing of the transaction taking into account market prices and trends, the reputation, experience and financial stability of the broker-dealer involved, the benefit of any capital committed by a broker-dealer to facilitate the efficient execution of the transaction and the quality of service rendered by the broker-dealer in other transactions.

The Investment Manager may cause the fund to pay a broker-dealer that provides "brokerage and research services" (as defined in the Exchange Act and as described above) to the Investment Manager an amount of disclosed commission for effecting securities transactions on stock exchanges and other transactions for the fund on an agency basis in excess of the commission another broker-dealer would have charged for effecting that transaction. The Investment Manager may also instruct an executing broker to "step out" a portion of the trades placed with a broker to other brokers that provide brokerage and research services to the Investment Manager. The Investment Manager's authority to cause the fund to pay any such greater commissions or to instruct a broker to "step out" a portion of a trade is subject to the requirements of applicable law and such policies as the Trustees may adopt from time to time. It is the position of the staff of the SEC that Section 28(e) of the Exchange Act does not apply to the payment of such greater commissions in "principal" transactions. Accordingly, the Investment Manager will use its best effort to obtain the most favorable price and execution available with respect to such transactions, as described above.

The Management Contract provides that commissions, fees, brokerage or similar payments received by the Investment Manager or an affiliate in connection with the purchase and sale of portfolio investments of the fund, less any direct expenses approved by the Trustees, shall be recaptured by the fund through a reduction of the fee payable by the fund under the Management Contract. The Investment Manager seeks to recapture for the fund soliciting dealer fees on the tender of the fund's portfolio securities in tender or exchange offers. Any such fees which may be recaptured are likely to be minor in amount.

For those funds sub-advised by FTIML and where FTIML places trades on behalf of those funds, the rules of the United Kingdom's Financial Conduct Authority (the "FCA Rules") apply with respect to the receipt of investment research. Under the FCA Rules, FTIML may not obtain research using brokerage commissions paid by funds sub-advised by FTIML. FTIML will use only "hard dollars" (i.e., from its own resources) to acquire external research used by London-based personnel, including fixed income personnel, except with respect to Minor Non-Monetary Benefits.

Minor Non-Monetary Benefits include, among other categories:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Research from independent research providers who are not engaged in execution services and are not part of a financial services group that offers execution or brokerage services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Research on listed and unlisted small and medium-sized enterprises with a market capitalization below £200 million;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Research focusing on fixed income, currency, and commodity investment strategies; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Written research that is openly available to other firms or to the general public.

FTIML may use soft dollar commissions generated by trades of the Investment Manager and other Putnam affiliates other than FTIML to obtain research received by employees of FTIML that qualify as a Minor Non-Monetary Benefit.

#### Principal Underwriter
Franklin Distributors, located at One Franklin Parkway, San Mateo, CA 94403-1906, is the principal underwriter of shares of the fund and the other continuously offered Putnam funds. Franklin Distributors is a registered broker-dealer, a member of the Financial Industry Regulatory Authority, and an indirect, wholly-owned subsidiary of Franklin Templeton. See "Charges and expenses" in Part I of this SAI for information on payments received by Franklin Distributors or Foreside Fund Services, LLC, the principal underwriter for the certain of the funds prior to August 2, 2024.

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#### Personal Investments by Employees of Putnam Management, Franklin Advisers, FTIML and Franklin Distributors and Officers and Trustees of the Fund
Employees of Putnam Management, Franklin Advisers, FTIML and Franklin Distributors and officers and Trustees of the fund are subject to significant restrictions on engaging in personal securities transactions. These restrictions are set forth in the Codes of Ethics adopted by Putnam Management, Franklin Advisers, FTIML and Franklin Distributors and by the fund (the "Code of Ethics"). The Code of Ethics, in accordance with Rule 17j-1 under the 1940 Act, contains provisions and requirements designed to identify and address certain conflicts of interest between personal investment activities and the interests of the fund.

The Code of Ethics does not prohibit personnel from investing in securities that may be purchased or held by the fund. However, the Code of Ethics, consistent with standards recommended by the Investment Company Institute's Advisory Group on Personal Investing and requirements established by Rule 17j-1 and rules adopted under the Investment Advisers Act of 1940, among other things, prohibits personal securities investments without pre-clearance, imposes time periods during which personal transactions may not be made in certain securities by employees with access to investment information, and requires the timely submission of broker confirmations and quarterly reporting of personal securities transactions. Additional restrictions apply to portfolio managers, traders, research analysts and others involved in the investment advisory process.

The Code of Ethics does not prohibit unaffiliated officers and Trustees from investing in securities that may be held by the fund; however, the Putnam Funds Code of Ethics regulates the personal securities transactions of unaffiliated Trustees of the fund, including limiting the time periods during which they may personally buy and sell certain securities and requiring them to submit reports of personal securities transactions under certain circumstances.

The fund's Trustees, in compliance with Rule 17j-1, approved the Code of Ethics and are required to approve any material changes to the Code of Ethics. The Trustees also provide continued oversight of personal investment policies and annually evaluate the implementation and effectiveness of the Code of Ethics.

#### Transfer Agent
The Bank of New York Mellon (BNY Mellon), 240 Greenwich Street, New York, New York 10286, acts as the fund's transfer agent and dividend-paying agent. The Investment Manager, and not the fund, bears the cost of these services under the terms of its management contract with the fund.

#### Custodian
BNY Mellon acts as custodian of the fund's securities and other assets. BNY Mellon is located at 240 Greenwich Street, New York, New York 10286.

#### Auditor
PricewaterhouseCoopers LLP, 101 Seaport Boulevard, Boston, Massachusetts 02210, is the fund's independent registered public accounting firm providing audit services, tax return review and other tax consulting services and assistance and consultation in connection with the review of various Securities and Exchange Commission filings.

#### Counsel to the Fund
Ropes & Gray LLP serves as counsel to the fund, and is located at Prudential Tower, 800 Boylston Street, Boston, Massachusetts 02199.

#### DETERMINATION OF NET ASSET VALUE
The fund determines the net asset value per share once each day the NYSE is open. Currently, the NYSE is closed Saturdays, Sundays and the following holidays: New Year's Day, Rev. Dr. Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Juneteenth, the Fourth of July, Labor Day, Thanksgiving Day and Christmas Day. The fund determines net asset value as of the close of regular trading on the NYSE, normally 4:00 p.m. Eastern Time. The net asset value per share equals the total value of its assets, less its liabilities, divided by the number of its outstanding shares.

------

Securities and other assets ("Securities") for which market quotations are readily available, as defined by Rule 2a-5 under the 1940 Act, are valued at prices which, in the opinion of the Investment Manager, most nearly represent the market values of such Securities. Currently, prices for these Securities are determined using the last reported sale price (or official closing price for Securities listed on certain markets) or, if no sales are reported (as in the case of some Securities traded over-the-counter), the mean between the last reported bid and ask prices, the "mid price" (prior to July 22, 2024, the last reported bid price was used). All other Securities are valued by the Investment Manager or other parties at their fair value following procedures approved by the Trustees.

Reliable market quotations are not considered to be readily available for, among other Securities, long-term corporate bonds and notes, certain preferred stocks, tax-exempt securities, and certain foreign securities. These investments are valued at fair value, generally on the basis of valuations furnished by approved pricing services, which determine valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities that are generally recognized by institutional traders. Other Securities, such as various types of options, are valued at fair value on the basis of valuations furnished by broker-dealers or other market intermediaries.

The Investment Manager values all other Securities at fair value using its internal resources. The valuation procedures applied in any specific instance are likely to vary from case to case. However, consideration is generally given to the financial position of the issuer and other fundamental analytical data relating to the investment and to the nature of the restrictions on disposition of the Securities (including any registration expenses that might be borne by the fund in connection with such disposition). In addition, specific factors are also generally considered, such as the cost of the investment, the market value of any unrestricted Securities of the same class, the size of the holding, the prices of any recent transactions or offers with respect to such Securities and any available analysts' reports regarding the issuer. In the case of Securities that are restricted as to resale, the Investment Manager determines fair value based on the inherent worth of the Security without regard to the restrictive feature, adjusted for any diminution in value resulting from the restrictive feature.

Generally, trading in certain Securities (such as foreign securities) is substantially completed each day at various times before the close of the NYSE. The closing prices for these Securities in markets or on exchanges outside the U.S. that close before the close of the NYSE may not fully reflect events that occur after such close but before the close of the NYSE. As a result, the fund has adopted fair value pricing procedures, which, among other things, require the fund to fair value foreign equity securities if there has been a movement in the U.S. market that exceeds a specified threshold. Although the threshold may be revised from time to time and the number of days on which fair value prices will be used will vary, it is possible that fair value prices will be used by the fund to a significant extent. In addition, Securities held by some of the funds may be traded in foreign markets that are open for business on days that the fund is not, and the trading of such Securities on those days may have an impact on the value of a shareholder's investment at a time when the shareholder cannot buy and sell shares of the fund.

Currency exchange rates used in valuing Securities are normally determined as of 4:00 p.m. Eastern Time.

Occasionally, events affecting such exchange rates may occur between the time of the determination of exchange rates and the close of the NYSE, which, in the absence of fair valuation, would not be reflected in the computation of the fund's net asset value. If events materially affecting the currency exchange rates occur during such period, then the exchange rates used in valuing affected Securities will be valued by the Investment Manager at their fair value following procedures approved by the Trustees.

In addition, because of the amount of time required to collect and process trading information as to large numbers of securities issues, the values of certain Securities (such as convertible bonds, U.S. government securities and tax-exempt securities) are determined based on market quotations collected before the close of the NYSE. Occasionally, events affecting the value of such Securities may occur between the time of the determination of value and the close of the NYSE, which, in the absence of fair value prices, would not be reflected in the computation of the fund's net asset value. If events materially affecting the value of such Securities occur during such period, then these Securities will be valued by the Investment Manager at their fair value following procedures approved by the Trustees. It is expected that any such instance would be very rare.

The fair value of Securities is generally determined as the amount that the fund could reasonably expect to realize from an orderly disposition of such Securities over a reasonable period of time. By its nature, a fair value price is a good faith estimate of the value of a Security at a given point in time and does not reflect an actual market price.

The fund may also value its Securities at fair value under other circumstances pursuant to procedures approved by the Trustees.

#### Money Market Funds

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"Retail money market funds"and "government money market funds" each as defined by Rule 2a-7 under the 1940 Act generally value their portfolio securities at amortized cost according to Rule 2a-7 under the 1940 Act.

Since the net income of a money market fund is declared as a dividend each time it is determined, the net asset value per share of a retail money market fund and government money market fund typically remains at $1.00 per share immediately after such determination and dividend declaration. Any increase in the value of a shareholder's investment in a money market fund representing the reinvestment of dividend income is reflected by an increase in the number of shares of that fund in the shareholder's account on the last business day of each month. It is expected that a money market fund's net income will normally be positive each time it is determined. However, if because of realized losses on sales of portfolio investments, a sudden rise in interest rates, or for any other reason the net income of a fund determined at any time is a negative amount, a money market fund may offset such amount allocable to each then shareholder's account from dividends accrued during the month with respect to such account. If, at the time of payment of a dividend, such negative amount exceeds a shareholder's accrued dividends, a money market fund may reduce the number of outstanding shares by treating the shareholder as having contributed to the capital of the fund that number of full and fractional shares which represent the amount of the excess. Each shareholder is deemed to have agreed to such contribution in these circumstances by his or her investment in a money market fund.

#### SHAREHOLDER LIABILITY
The Trust is a statutory trust organized under Delaware law. Delaware law provides that, except to the extent otherwise provided in the Amended and Restated Agreement and Declaration of Trust, shareholders shall be entitled to the same limitations of personal liability extended to stockholders of private corporations for profit organized under the general corporation law of Delaware. The courts of some states, however, may decline to apply Delaware law on this point. The Amended and Restated Agreement and Declaration of Trust contains an express disclaimer of shareholder liability for the debts, liabilities, obligations, and expenses incurred by, contracted for, or otherwise existing with respect to, the Trust or the funds.

The Amended and Restated Agreement and Declaration of Trust provides that the Trust shall not have any claim against shareholders except for the payment of the purchase price of shares and requires that each agreement, obligation, or instrument entered into or executed by the Trust or the Trustees relating to the Trust or to a fund shall include a provision limiting the obligations created thereby to the Trust or to one or more funds and its or their assets. The Amended and Restated Agreement and Declaration of Trust further provides that shareholders of a fund shall not have a claim on or right to any assets belonging to any other fund.

#### DISCLOSURE OF PORTFOLIO INFORMATION
The Trustees of the Putnam funds have adopted policies with respect to the disclosure of the fund's portfolio holdings by the fund, the Investment Manager, or their affiliates. These policies provide that information about the fund's portfolio generally may not be released to any party prior to (i) the day after the posting of such information on franklintempleton.com, (ii) the filing of the information with the SEC in a required filing, or (iii) the dissemination of such information to all shareholders simultaneously. Certain limited exceptions pursuant to the fund's policies are described below. In addition, these policies do not apply to the sharing of fund portfolio holdings information with investment personnel involved in the management of other funds that invest in such fund and that are managed by the Investment Manager or its affiliates. The Trustees will periodically receive reports from the fund's Chief Compliance Officer regarding the operation of these policies and procedures, including any arrangements to make non-public disclosures of the fund's portfolio information to third parties. The Investment Manager and its affiliates are not permitted to receive compensation or other consideration in connection with disclosing information about the fund's portfolio holdings to third parties.

#### Public Disclosures
On each Business Day, before commencement of trading in shares on the listing exchange, each fund will disclose its complete portfolio holdings on its website. The fund will disclose its top 10 holdings and related portfolio information monthly beginning on or after 5 business days after the end of each month on franklintempleton.com. The find will also disclose on its website its complete holdings as of the end of the prior month on a monthly basis beginning on or before the 15th calendar day after the end of each month..

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The fund will also file its portfolio holdings with the SEC twice each year on Form N-CSR (with respect to each annual period and semi-annual period). In addition, the fund will file reports of portfolio holdings on Form N-PORT 60 days after each fiscal quarter (for the respective fiscal quarter), with the schedule of portfolio holdings filed on Form N-PORT for the third month of the first and third fiscal quarter made publicly available. Shareholders may obtain the Form N-CSR filings and the publicly available portions of Form N-PORT filings on the SEC's website at http://www.sec.gov. Form N-CSR filings are available upon filing and information reported on Form N-PORT filings for the third month of a fiscal quarter is available 60 days after the end of the fiscal quarter. You may call the SEC at 1-800-SEC-0330 for information about the SEC's website.

The Investment Manager or its affiliates may include fund portfolio information that has already been made public through a Web posting or SEC filing in marketing literature and other communications to shareholders, advisors or other parties, provided that, in the case of information made public through the Web, the information is disclosed no earlier than the day after the date of posting to the website.

#### Other Disclosures
In order to address potential conflicts between the interest of fund shareholders, on the one hand, and those of the Investment Manager, Franklin Distributors or any affiliated person of those entities or of the fund, on the other hand, the fund's policies require that non-public disclosures of information regarding the fund's portfolio may be made only if there is a legitimate business purpose consistent with fiduciary duties to all shareholders of the fund. In addition, the party receiving the non-public information must sign a non-disclosure agreement unless otherwise approved by the Chief Compliance Officer of the fund. Arrangements to make non-public disclosures of the fund's portfolio information must be approved by the Chief Compliance Officer of the fund. The Chief Compliance Officer will report on an ongoing basis to a committee of the fund's Board of Trustees consisting only of Trustees who are not "interested persons" of the fund or the Investment Manager regarding any such arrangement that the fund may enter into with third parties other than service providers to the fund.

Daily portfolio composition files ("PCFs") that identify a basket of specified securities that may overlap with the actual or expected portfolio holdings of a fund will be provided as frequently as daily to each fund's service providers to facilitate the provision of services to each fund and to certain other entities in connection with the dissemination of information necessary for transactions in Creation Units. Each business day prior to the opening of the listing exchange, a PCF containing a list of the names and the required number of shares of each Deposit Security for each fund will be provided for dissemination through the facilities of the NSCC; through other fee-based services to NSCC members; subscribers to the fee-based services, including Authorized Participants; and to entities that publish and/or analyze such information in connection with the process of purchasing or redeeming Creation Units or trading fund shares in the secondary market. In addition to making PCFs available to the NSCC, each fund will disclose the PCF or portions thereof as frequently as daily on franklintempleton.com.

The fund may also periodically provide non-public information about its portfolio holdings to rating and ranking organizations and other providers of industry data, such as Lipper Inc., Morningstar Inc., Bloomberg and Thomson Reuters, in connection with those firms' research on and classification of the fund and in order to gather information about how the fund's attributes (such as volatility, turnover, and expenses) compare with those of peer funds. The fund may also periodically provide non-public information about its portfolio holdings to consultants that provide portfolio analysis services or other investment research or trading analytics. Such recipients of portfolio holdings include Barclays, FactSet, ITG, Trade Informatics, ConsenSys, ENSO Financial Analytics, Bloomberg and Credit Suisse. Any such rating, ranking, or consulting or other firm would be required to keep the fund's portfolio information confidential and would be prohibited from trading based on the information or otherwise using the information except as necessary in providing services to the fund. Such firms may receive portfolio holdings information only from certain funds and such information may be provided in greater or lesser detail depending on the nature of the services provided by the relevant firm.

In addition, the Investment Manager offers model separately managed account portfolios to sponsoring broker-dealers ("Program Sponsors") that in turn offer those portfolios to their customers. The Investment Manager also provides investment advisory services to retail separately managed account clients through managed account programs sponsored by broker-dealers and other financial intermediaries (together, "SMAs"). The model SMA portfolios may follow investment programs that are similar or identical in material respects to those of specific Putnam funds or other client accounts and, as a result, there may be substantial overlap between the securities holdings and transactions of an model SMA portfolio and those of any similarly managed funds or accounts. If such model portfolios are substantially similar to those of a U.S. registered fund, such model portfolios may be provided to Program Sponsors so long as: (1) the recipient Program Sponsors has executed a non-disclosure agreement or other agreement containing or incorporating confidentiality provisions that restrict the use and dissemination of confidential

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portfolio holdings information received by the Program Sponsor as described in the following sentence, or other provisions that impose similar restrictions on such use and dissemination and*,* (2) the model SMA portfolio has been deemed sufficiently liquid by the Investment Manager's liquidity committee or the Investment Manager, as determined in their reasonable judgment. Such agreement must provide that the Program Sponsor agrees that: (1) it is subject to a duty of confidentiality; (2) it will use confidential model portfolio information only to the extent necessary to perform its obligations under the agreement; and (3) it will not disclose confidential model portfolio information except to personnel or parties who have a need to know such confidential information in connection with, or in order to fulfill the purposes contemplated by, the agreement.

#### INFORMATION SECURITY RISKS
*Cyber security risk.* With the increased use of interconnected technologies such as the Internet and the dependence on computer systems to perform necessary business functions, investment companies such as the fund and its service providers may be prone to operational, information security and related risks resulting from third-party cyber-attacks and/or other technological malfunctions. Cyber-attacks may include stealing or corrupting data maintained online or digitally, preventing legitimate users from accessing information or services on a website, releasing confidential information without authorization, and causing operational disruption. Successful cyber-attacks against, or security or technology breakdowns of, the fund or its adviser, custodian, transfer agent, or other affiliated or third-party service providers may adversely affect the fund and its shareholders. For example, cyber-attacks may interfere with the processing of shareholder transactions, impact the fund's ability to calculate its net asset value, cause the release of private shareholder information or confidential fund information, impede trading, cause reputational damage, and subject the fund or others to regulatory fines, penalties or financial losses, reimbursement or other compensation costs, and additional compliance costs. Similar types of cyber security risks also are present for issuers of securities in which the fund invests, which could result in material adverse consequences for such issuers, and may cause the fund's investment in such securities to lose value. The fund and the Investment Manager or sub-adviser (as applicable) may have limited ability to prevent or mitigate cyber-attacks or security or technology breakdowns affecting the fund's third-party service providers. While the Investment Manager and sub-adviser (as applicable) have established business continuity plans and systems designed to prevent or reduce the impact of cyber-attacks, such plans and systems are subject to inherent limitations.

#### PROXY VOTING GUIDELINES AND PROCEDURES
The Board of Trustees have delegated proxy voting authority for the securities held in the funds' portfolios to Putnam Management and have approved Putnam Management's current proxy voting guidelines and procedures. Putnam Management retained an independent proxy voting service to assist in vote analysis, implementation, recordkeeping and reporting services. The proxy voting guidelines summarize Putnam Management's positions on various issues of concern to investors and provide direction to the proxy voting service as to how fund portfolio securities should be voted on proposals dealing with particular issues. The proxy voting procedures explain the role of Putnam Management personnel and the proxy voting service in the proxy voting process, describe the procedures for referring matters involving investment considerations to the investment personnel of Putnam Management, and describe the procedures for handling potential conflicts of interest. Putnam Management's proxy voting guidelines and procedures are included in this SAI as Appendix A. The Trustees will review the funds' proxy voting from time to time and will review annually Putnam Management's proxy voting guidelines and procedures. Information regarding how the funds' proxies relating to portfolio securities were voted during the 12-month period ended June 30, 2024 is available on www.franklintempleton.com, and on the SEC's website at 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 Putnam Management's proxy voting guidelines and procedures by calling Putnam's Shareholder Services at 1-800-225-1581.

#### SECURITIES RATINGS
The ratings of securities in which the fund may invest will be measured at the time of purchase and, to the extent a security is assigned a different rating by one or more of the various rating agencies, the Investment Manager may use the highest rating assigned by any agency. The Investment Manager will not necessarily sell an investment if its rating is reduced. Below are descriptions of ratings, as provided by the rating agencies, which represent opinions as to the quality of various debt instruments.

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#### Moody's Investors Service, Inc.
**Global Long-Term Rating Scale** (original maturity of 1 year or more)

**Aaa** – Obligations rated Aaa are judged to be of the highest quality, subject to the lowest level of credit risk.

**Aa** – Obligations rated Aa are judged to be of high quality and are subject to very low credit risk.

**A** – Obligations rated A are judged to be upper-medium grade and are subject to low credit risk.

**Baa** – Obligations rated Baa are judged to be medium-grade and subject to moderate credit risk and as such may possess certain speculative characteristics.

**Ba** – Obligations rated Ba are judged to be speculative and are subject to substantial credit risk.

**B** – Obligations rated B are considered speculative and are subject to high credit risk.

**Caa** – Obligations rated Caa are judged to be speculative of poor standing and are subject to very high credit risk.

**Ca** – Obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest.

**C** – Obligations rated C are the lowest rated and are typically in default, with little prospect for recovery of principal or interest.

Note: Moody's appends numerical modifiers 1, 2, and 3 to each generic rating classification from Aa through Caa. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category. Additionally, a "(hyb)" indicator is appended to all ratings of hybrid securities issued by banks, insurers, finance companies, and securities firms.

By their terms, hybrid securities allow for the omission of scheduled dividends, interest, or principal payments, which can potentially result in impairment if such an omission occurs. Hybrid securities may also be subject to contractually allowable write-downs of principal that could result in impairment. Together with the hybrid indicator, the long-term obligation rating assigned to a hybrid security is an expression of the relative credit risk associated with that security.

**Global Short-Term Rating Scale** (original maturity of 13 months or less)

**P-1** – Issuers (or supporting institutions) rated Prime-1 have a superior ability to repay short-term debt obligations.

**P-2** – Issuers (or supporting institutions) rated Prime-2 have a strong ability to repay short-term debt obligations.

**P-3** – Issuers (or supporting institutions) rated Prime-3 have an acceptable ability to repay short-term obligations.

**NP** – Issuers (or supporting institutions) rated Not Prime do not fall within any of the Prime rating categories.

US Municipal Short-Term Obligation Ratings

**MIG 1** – This designation denotes superior credit quality. Excellent protection is afforded by established cash flows, highly reliable liquidity support, or demonstrated broad-based access to the market for refinancing.

**MIG 2** – This designation denotes strong credit quality. Margins of protection are ample, although not as large as in the preceding group.

**MIG 3** – This designation denotes acceptable credit quality. Liquidity and cash-flow protection may be narrow, and market access for refinancing is likely to be less well-established.

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**SG** – This designation denotes speculative grade credit quality. Debt instruments in this category may lack sufficient margins of protection.

#### US Municipal Demand Obligation Ratings
**VMIG 1** – This designation denotes superior credit quality. Excellent protection is afforded by the superior short-term credit strength of the liquidity provider and structural and legal protections that ensure the timely payment of purchase price upon demand.

**VMIG 2** – This designation denotes strong credit quality. Good protection is afforded by the strong short-term credit strength of the liquidity provider and structural and legal protections that ensure the timely payment of purchase price upon demand.

**VMIG 3** – This designation denotes acceptable credit quality. Adequate protection is afforded by the satisfactory short-term credit strength of the liquidity provider and structural and legal protections that ensure the timely payment of purchase price upon demand.

**SG** – This designation denotes speculative-grade credit quality. Demand features rated in this category may be supported by a liquidity provider that does not have an investment grade short-term rating or may lack the structural and/or legal protections necessary to ensure the timely payment of purchase price upon demand.

#### Standard & Poor's
**Long-Term Issue Credit Ratings** (original maturity of one year or more)

**AAA** – An obligation rated 'AAA' has the highest rating assigned by Standard & Poor's. The obligor's capacity to meet its financial commitment on the obligation is extremely strong.

**AA** – An obligation rated 'AA' differs from the highest-rated obligations only to a small degree. The obligor's capacity to meet its financial commitment on the obligation is very strong.

**A** – An obligation rated 'A' is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories. However, the obligor's capacity to meet its financial commitment on the obligation is still strong.

**BBB** – An obligation rated 'BBB' exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.

**BB; B; CCC; CC** and **C** – Obligations rated 'BB', 'B', 'CCC', 'CC', and 'C' are regarded as having significant speculative characteristics. 'BB' indicates the lowest degree of speculation and 'C' the highest. While such obligations will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions.

**BB** – An obligation rated 'BB' is less vulnerable to nonpayment than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation.

**B** – An obligation rated 'B' is more vulnerable to nonpayment than obligations rated 'BB', but the obligor currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial, or economic conditions will likely impair the obligor's capacity or willingness to meet its financial commitment on the obligation.

**CCC** – An obligation rated 'CCC' is currently vulnerable to nonpayment, and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation.

**CC** – An obligation rated 'CC' is currently highly vulnerable to nonpayment. The 'CC' rating is used when a default has not yet occurred, but Standard & Poor's expects default to be a virtual certainty, regardless of the anticipated time to default.

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**C** – An obligation rated 'C' is currently highly vulnerable to nonpayment, and the obligation is expected to have lower relative seniority or lower ultimate recovery compared to obligations that are rated higher.

**D** – An obligation rated 'D' is in default or in breach of an imputed promise. For non-hybrid capital instruments, the 'D' rating category is used when payments on an obligation are not made on the date due, unless Standard & Poor's believes that such payments will be made within five business days in the absence of a stated grace period or within the earlier of the stated grace period or 30 calendar days. The 'D' rating also will be used upon the filing of a bankruptcy petition or the taking of similar action and where default on an obligation is a virtual certainty, for example due to automatic stay provisions. An obligation's rating is lowered to 'D' if it is subject to a distressed exchange offer.

**NR** – This indicates that no rating has been requested, or that there is insufficient information on which to base a rating, or that Standard & Poor's does not rate a particular obligation as a matter of policy.

Note: The ratings from 'AA' to 'CCC' may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories.

**Short-Term Issue Credit Ratings** (original maturity of 365 days or less)

**A-1** – A short-term obligation rated'A-1' is rated in the highest category by Standard & Poor's. The obligor's capacity to meet its financial commitment on the obligation is strong. Within this category, certain obligations are designated with a plus sign (+). This indicates that the obligor's capacity to meet its financial commitment on these obligations is extremely strong.

**A-2** – A short-term obligation rated 'A-2' is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rating categories. However, the obligor's capacity to meet its financial commitment on the obligation is satisfactory.

**A-3** – A short-term obligation rated 'A-3' exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.

**B** – A short-term obligation rated 'B' is regarded as vulnerable and has significant speculative characteristics. The obligor currently has the capacity to meet its financial commitments; however, it faces major ongoing uncertainties which could lead to the obligor's inadequate capacity to meet its financial commitments.

**C** – A short-term obligation rated 'C' is currently vulnerable to nonpayment and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation.

**D** – A short-term obligation rated 'D' is in default or in breach of an imputed promise. For non-hybrid capital instruments, the 'D' rating category is used when payments on an obligation are not made on the due date, unless Standard & Poor's believes that such payments will be made within any stated grace period. However, any stated grace period longer than five business days will be treated as five business days. The 'D' rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action and where default on an obligation is a virtual certainty, for example due to automatic stay provisions. An obligation's rating is lowered to 'D' if it is subject to a distressed exchange offer.

**Municipal Short-Term Note Ratings** (original maturity of 3 years or less)

**SP-1** – Strong capacity to pay principal and interest. An issue determined to possess a very strong capacity to pay debt service is given a plus (+) designation.

**SP-2** – Satisfactory capacity to pay principal and interest, with some vulnerability to adverse financial and economic changes over the term of the notes.

**SP-3** – Speculative capacity to pay principal and interest.

#### Fitch Ratings

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#### Long-Term Rating Scales
**AAA** – Highest credit quality. 'AAA' ratings denote the lowest expectation of default risk. They are assigned only in cases of exceptionally strong capacity for payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events.

**AA** – Very high credit quality. 'AA' ratings denote expectations of very low default risk. They indicate very strong capacity for payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events.

**A** – High credit quality. 'A' ratings denote expectations of low default risk. The capacity for payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to adverse business or economic conditions than is the case for higher ratings.

**BBB** – Good credit quality. 'BBB' ratings indicate that expectations of default risk are currently low. The capacity for payment of financial commitments is considered adequate but adverse business or economic conditions are more likely to impair this capacity.

**BB** – Speculative. 'BB' ratings indicate an elevated vulnerability to default risk, particularly in the event of adverse changes in business or economic conditions over time; however, business or financial flexibility exists which supports the servicing of financial commitments.

**B** – Highly speculative. 'B' ratings indicate that material default risk is present, but a limited margin of safety remains. Financial commitments are currently being met; however, capacity for continued payment is vulnerable to deterioration in the business and economic environment.

**CCC** – Substantial credit risk. Default is a real possibility.

**CC** – Very high levels of credit risk. Default of some kind appears probable.

**C** – Exceptionally high levels of credit risk. Default is imminent or inevitable, or the issuer is in standstill. Conditions that are indicative of a 'C' category rating for an issuer include:

a. the issuer has entered into a grace or cure period following non-payment of a material financial obligation;

b. the issuer has entered into a temporary negotiated waiver or standstill agreement following a payment default on a material financial obligation; or

c. Fitch Ratings otherwise believes a condition of 'RD' or 'D' to be imminent or inevitable, including through the formal announcement of a distressed debt exchange.

**RD** – Restricted default. 'RD' ratings indicate an issuer that in Fitch Ratings' opinion has experienced an uncured payment default on a bond, loan or other material financial obligation but which has not entered into bankruptcy filings, administration, receivership, liquidation or other formal winding-up procedure, and which has not otherwise ceased operating. This would include:

a. the selective payment default on a specific class or currency of debt;

b. the uncured expiry of any applicable grace period, cure period or default forbearance period following a payment default on a bank loan, capital markets security or other material financial obligation;

c. the extension of multiple waivers or forbearance periods upon a payment default on one or more material financial obligations, either in series or in parallel; or

d. execution of a distressed debt exchange on one or more material financial obligations.

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**D** – Default. 'D' ratings indicate an issuer that in Fitch Ratings' opinion has entered into bankruptcy filings, administration, receivership, liquidation or other formal winding-up procedure, or which has otherwise ceased business.

Default ratings are not assigned prospectively to entities or their obligations; within this context, non-payment on an instrument that contains a deferral feature or grace period will generally not be considered a default until after the expiration of the deferral or grace period, unless a default is otherwise driven by bankruptcy or other similar circumstance, or by a distressed debt exchange.

"Imminent" default typically refers to the occasion where a payment default has been intimated by the issuer, and is all but inevitable. This may, for example, be where an issuer has missed a scheduled payment, but (as is typical) has a grace period during which it may cure the payment default. Another alternative would be where an issuer has formally announced a distressed debt exchange, but the date of the exchange still lies several days or weeks in the immediate future.

In all cases, the assignment of a default rating reflects the agency's opinion as to the most appropriate rating category consistent with the rest of its universe of ratings, and may differ from the definition of default under the terms of an issuer's financial obligations or local commercial practice.

Note: The modifiers "+" or "-" may be appended to a rating to denote relative status within major rating categories. Such suffixes are not added to the 'AAA' Long-Term Issuer Default Rating (IDR) category, or to Long-Term IDR categories below 'B'.

#### Short-Term Ratings
**F1** – Highest short-term credit quality. Indicates the strongest intrinsic capacity for timely payment of financial commitments; may have an added "+" to denote any exceptionally strong credit feature.

**F2** – Good short-term credit quality. Good intrinsic capacity for timely payment of financial commitments.

**F3** – Fair short-term credit quality. The intrinsic capacity for timely payment of financial commitments is adequate.

**B** – Speculative short-term credit quality. Minimal capacity for timely payment of financial commitments, plus heightened vulnerability to near term adverse changes in financial and economic conditions.

**C** – High short-term default risk. Default is a real possibility.

**RD** – Restricted default. Indicates an entity that has defaulted on one or more of its financial commitments, although it continues to meet other financial obligations, typically applicable to entity ratings only.

**D** – Default. Indicates a broad-based default event for an entity, or the default of a short-term obligation.

#### Appendix A

### Putnam Investments
<u>Proxy Voting Procedures</u> 

*Introduction and Summary* 

Many of Putnam's investment management clients have delegated to Putnam the authority to vote proxies for shares in the client accounts Putnam manages. Putnam believes that the voting of proxies can be an important tool for institutional investors to promote best practices in corporate governance and votes all proxies in the best interests of its clients as investors. In Putnam's

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view, strong corporate governance policies, most notably oversight by an independent board of qualified directors, best serve investors' interests. Putnam will vote proxies and maintain records of voting of shares for which Putnam has proxy voting authority in accordance with its fiduciary obligations and applicable law.

Putnam's voting policies are rooted in our views that (1) strong, independent corporate governance is important to long-term company financial performance, and (2) long-term investors' active engagement with company management, including through the proxy voting process, strengthens issuer accountability and overall market discipline, potentially reducing risk and improving returns over time. Our voting program is offered as a part of our investment management services, at no incremental fee to Putnam, and, while there can be no guarantees, it is intended to offer potential investment benefits over a long-term horizon. Our voting policies are designed with investment considerations in mind, not as a means to pursue particular political, social, or other goals. As a result, we may not support certain proposals whose costs to the issuer (including implementation costs, practicability, and other factors), in Putnam's view, outweigh their investment merits.

This memorandum sets forth Putnam's policies for voting proxies. It covers all accounts for which Putnam has proxy voting authority. These accounts include the Putnam Mutual Funds<sup>1</sup> and Putnam Exchange-Traded Funds, US and international institutional accounts and funds managed or sub-advised by The Putnam Advisory Company, LLC and Putnam Fiduciary Trust Company, LLC. In addition, the policies include US mutual funds and other accounts sub-advised by Putnam Investment Management, LLC.<sup>2</sup>

*Proxy Committee* 

Putnam has a Proxy Committee composed of senior professionals, including from the Putnam Equity investment team and the Putnam Equity Sustainability Strategy group. The Chief Investment Officer of Putnam Equity appoints the members of the Proxy Committee. The Proxy Committee is responsible for setting general policy as to proxies. Specifically, the Committee:

1. Reviews these procedures and the Proxy Voting Guidelines annually and approves any amendments considered to be advisable.

2. Considers special proxy issues as they may from time to time arise.

3. Must approve all vote overrides recommended by investment professionals.

*Proxy Voting Administration* 

The Putnam Sustainability Strategy group administers Putnam's proxy voting through a Proxy Voting Team. The Proxy Voting Team has the following duties:

1. Annually prepares the Proxy Voting Guidelines and distributes them to the Proxy Committee for review.

2. Coordinates the Proxy Committee's review of any new or unusual proxy issues and serves as Secretary thereto.

3. Manages the process of referring issues to portfolio managers for voting instructions.

4. Oversees the work of any third-party vendor hired to process proxy votes (as of the date of these procedures Putnam has engaged Institutional Shareholder Services (ISS) to process proxy votes) and the process of setting up the voting process with ISS and custodial banks for new clients.

<sup>1</sup> Effective January 27, 2023, the Board of Trustees of the Putnam Mutual Funds delegated proxy voting authority to Putnam Investment Management, LLC, the investment manager to the Putnam Mutual Funds.

<sup>2</sup> The Putnam Proxy Voting Procedures and Guidelines will apply also to certain funds and institutional and other accounts managed by Franklin Advisers, Inc. ("FAV") but formerly managed or sub-advised by one of the Putnam adviser entities identified above, pursuant to sub-advisory agreements in effect from time to time between FAV and the relevant Putnam entity(ies).

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5. Coordinates responses to investment professionals' questions on proxy issues and proxy policies, including forwarding specialized proxy research from ISS and other vendors and forwards information to investment professionals prepared by other areas at Putnam.

6. Implements the exception process with respect to referred items on securities held solely in accounts managed by the Global Asset Allocation ("GAA") team within Franklin Templeton Investment Solutions described in more detail in the Proxy Referral section below.

7. Maintains required records of proxy votes on behalf of the appropriate Putnam client accounts.

8. Prepares and distributes reports required by Putnam clients.

*Proxy Voting Guidelines* 

Putnam maintains written voting guidelines ("Guidelines") setting forth voting positions determined by the Proxy Committee on those issues believed most likely to arise day to day. The Guidelines may call for votes to be cast normally in favor of or opposed to a matter or may deem the matter an item to be referred to investment professionals on a case-by-case basis. A copy of the Guidelines is attached to this memorandum as Exhibit A.

In light of our views on the importance of issuer governance and investor engagement, which we believe are applicable across our various strategies and clients, regardless of a specific portfolio's investment objective, Putnam will vote all proxies in accordance with the Guidelines, subject to two exceptions as follows:

1. If the portfolio managers of client accounts holding the stock of a company with a proxy vote believe that following the Guidelines in any specific case would not be in the clients' best interests, they may request the Proxy Voting Team not to follow the guidelines in such case. The request must be in writing and include an explanation of the rationale for doing so. The Proxy Voting Team will review any such request with the Proxy Committee (or, in cases with limited time, with the Chair of the Proxy Committee acting on the Proxy Committee's behalf) prior to implementing the request.

2. Putnam may accept instructions to vote proxies under client specific guidelines subject to review and acceptance by the Investment Division and the Legal and Compliance Department.

*Other* 

1. Putnam may elect not to vote when the security is no longer held.

2. Putnam will **abstain** on items that require case-by-case review when a vote recommendation from the appropriate investment professional(s) cannot be obtained due to restrictive voting deadlines or other prohibitive operational or administrative requirements.

3. Where securities held in Putnam client accounts, including the Putnam mutual funds, have been loaned to third parties in connection with a securities lending program administered by Putnam (through securities lending agents overseen by Putnam), Putnam has instructed lending agents to recall U.S. securities on loan to vote proxies, in accordance with Putnam's securities lending procedures. Due to differences in non-U.S. markets, Putnam does not currently seek to recall non-U.S. securities on loan. In addition, where Putnam does not administer a client's securities lending program, this recall policy does not apply, since Putnam generally does not have information on loan details or authority to effect recalls in those cases. It is possible that, for impracticability or other reasons, a recalled security may not be returned to the relevant custodian in time to allow Putnam to vote the relevant proxy.

4. Putnam will make its reasonable best efforts to vote all proxies except when impeded by circumstances that are reasonably beyond its control and responsibility, such as custodial proxy voting services, in part or whole, not available or not established by a client, or custodial error.

<u>Proxy Voting Referrals</u> 

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Under the Guidelines, certain proxy matters will be referred to Portfolio Managers. The Portfolio Manager receiving the referral request may delegate the vote decision to an appropriate Analyst from among a list of eligible analysts (such list to be approved by the Chief Investment Officer of the Putnam Equity group and the Director of Equity Research for the Putnam Equity group). The Analyst will be required to make the affirmation and disclosures identified in (3) below. Normally specific referral items will be referred to the portfolio team leader (or another member of the portfolio team he or she designates) whose accounts hold the greatest number of shares of the issuer of the proxies through the Proxy Referral Administration Database. The referral request contains (1) a field that will be used by the portfolio team leader or member for recommending a vote on each referral item, (2) a field for describing any contacts relating to the proxy referral item the portfolio team may have had with any Franklin Templeton employee outside Putnam Equity or with any person other than a proxy solicitor acting in the normal course of proxy solicitation, and (3) a field for portfolio managers to affirm that they are making vote recommendations in the best interest of client accounts and have disclosed to Compliance any potential conflicts of interest relevant to their vote recommendation.

Putnam may vote any referred items on securities held solely in accounts managed by the GAA team within Franklin Templeton Investment Solutions (and not held by any other investment product team) in accordance with the recommendation of Putnam's third-party proxy voting service provider. The Proxy Voting Team will first give the relevant portfolio manager(s) on the GAA team the opportunity to review the referred items and vote on them. If the portfolio manager(s) on the GAA team do not decide to make any active voting decision on any of the referred items, the items will be voted in accordance with the service provider's recommendation. If the security is also held by other investment teams at Putnam Equity, the items will be referred to the largest holder who is not a member of the GAA team.

The portfolio team leader or members who have been requested to provide a recommendation on a proxy referral item will complete the referral request. Upon receiving each completed referral request from the applicable Portfolio Manager or Analyst, the Proxy Voting Team will review the completed request for accuracy and completeness, and will follow up with investment personnel as appropriate.

*Conflicts of Interest* 

A potential conflict of interest may arise when voting proxies of an issuer which has a significant business relationship with Putnam. For example, Putnam could manage a defined benefit or defined contribution pension plan for the issuer. Putnam's policy is to vote proxies based solely on the investment merits of the proposal. In order to guard against conflicts, the following procedures have been adopted:

1. The Proxy Committee is composed of senior professionals, including Portfolio Managers in Putnam Equity and the Putnam Equity Sustainability Strategy group. None of these individuals or groups reports to Franklin Templeton's marketing businesses.

2. No Franklin Templeton employee outside Putnam Equity may contact any portfolio manager about any proxy vote without first contacting the Proxy Voting Team or a senior lawyer in the Legal and Compliance Department. There is no prohibition on employees seeking to communicate investment-related information to investment professionals except for Putnam's restrictions on dissemination of material, non-public information. However, the Proxy Voting Team will coordinate the delivery of such information to investment professionals to avoid appearances of conflict.

3. Investment professionals responding to referral requests must disclose any contacts with third parties other than normal contact with proxy solicitation firms and must affirm that they are making vote recommendations in the best interest of client accounts and have disclosed to the Proxy Voting Team any potential conflicts of interest relevant to their vote recommendation.

4. The Proxy Voting Team will review the name of the issuer of each proxy that contains a referral item against various sources of Putnam business relationships maintained by the Legal and Compliance Department or Client Service for potential material business relationships (i.e., conflicts of interest). For referrals, the Proxy Voting Team will complete the Proxy Voting Conflict of Interest Disclosure Form (attached as Exhibit B and C) via the Proxy Referral Administration Database and will prepare a quarterly report for the Putnam Chief Compliance Officer identifying all completed Conflict of Interest Disclosure forms.

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5. Putnam's Proxy Voting Guidelines may only be overridden with the written recommendation from a member of the Investment Division and concurrence of the Proxy Committee (or, in cases with limited time, with the Chair of the Proxy Committee on the Proxy Committee's behalf).

*Recordkeeping* 

The Putnam Equity Sustainability Strategy Group will retain copies of the following books and records:

1. A copy of the Proxy Voting Procedures and Guidelines as are from time to time in effect;

2. A copy of each proxy statement received with respect to securities in client accounts;

3. Records of each vote cast for each client;

4. Internal documents generated in connection with a proxy referral, such as emails, memoranda, etc.

5. Written reports to clients on proxy voting and all client requests for information and Putnam's response.

All records will be maintained for seven years. A proxy vendor may on Putnam's behalf maintain the records noted in 2 and 3 above if it commits to providing copies promptly upon request.

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<u>Exhibit A to Proxy Procedures</u> 

### Putnam Investments Proxy Voting Guidelines
The proxy voting guidelines below summarize Putnam's positions on various issues of concern to investors and indicate how client portfolio securities will be voted on proposals dealing with a particular issue. The proxy voting service is instructed to vote all proxies relating to client portfolio securities in accordance with these guidelines, except as otherwise instructed by the Proxy Voting Team.

Putnam's voting policies are rooted in our views that (1) strong, independent corporate governance is important to long-term company financial performance, and (2) long-term investors' active engagement with company management, including through the proxy voting process, strengthens issuer accountability and overall market discipline, potentially reducing risk and improving returns over time. Our voting program is offered as a part of our investment management services, at no incremental fee to Putnam, and, while there can be no guarantees, it is intended to offer potential investment benefits over a long-term horizon. Our voting policies are designed with investment considerations in mind, not as a means to pursue particular political, social, or other goals. As a result, we may not support certain proposals whose costs to the issuer (including implementation costs, practicability, and other factors), in Putnam's view, outweigh their investment merits.

These proxy voting policies are intended to be decision-making guidelines. The guidelines are not exhaustive and do not include all potential voting issues. In addition, as contemplated by and subject to Putnam's Proxy Voting Procedures, because proxy issues and the circumstances of individual companies are so varied, portfolio teams may recommend votes that may vary from the general policy choices set forth in the guidelines.

The following guidelines are grouped according to the types of proposals generally presented to shareholders. Part I deals with proposals which have been approved and recommended by a company's board of directors. Part II deals with proposals submitted by shareholders for inclusion in proxy statements. Part III addresses unique considerations pertaining to non-US issuers.

I. Board-Approved Proposals

Proxies will be voted **for** board-approved proposals, except as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.**Matters Relating to the Board of Directors**

#### Uncontested Election of Directors
The board of directors has the important role of overseeing management and its performance on behalf of shareholders. When evaluating a company's board, Putnam may consider the diversity of professional backgrounds and personal characteristics. Putnam believes that companies generally benefit from diversity on the board, including diversity with respect to gender, ethnicity, race, skills, perspectives and experience.

Proxies will be voted **for** the election of the company's nominees for directors (and/or subsidiary directors) and **for** board-approved proposals on other matters relating to the board of directors (provided that such nominees and other matters have been approved by an independent nominating committee), except as follows:

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|:---|:---|
| ➣ | Putnam will <u>withhold votes</u> from the entire board of directors if:  |

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• The board does not have a majority of independent directors,

• The board does not have nominating, audit and compensation committees composed solely of independent directors, or

• The board has more than <u>15</u> members or fewer than <u>five</u> members, absent special circumstances.

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|:---|:---|
| ➣ | Putnam may refrain from withholding votes from the board due to insufficient key committee independence due to director resignation, change in board structure, or other specific circumstances, provided that the company has stated (for example in an 8-K), or it can otherwise be determined, that the board will address committee composition to ensure compliance with the applicable corporate governance code in a timely manner after the shareholder meeting and the company has a history of appropriate board independence.  |

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Unless otherwise indicated, for the purposes of determining whether a board has a majority of independent directors and independent nominating, audit, and compensation committees, an independent director is a director who (1) meets all requirements to serve as an independent director of a company under the final NYSE Corporate Governance Rules (e.g., no material business relationships with the company and no present or recent employment relationship with the company (including employment of an immediate family member as an executive officer)), and (2) has not accepted directly or indirectly any consulting, advisory, or other compensatory fee (excluding immaterial fees for transactional services as defined by the NYSE Corporate Governance rules) from the company other than in his or her capacity as a member of the board of directors or any board committee. Putnam believes that the receipt of such compensation for services other than service as a director raises significant independence issues.

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|:---|:---|
| ➣ | Putnam will <u>withhold votes</u> from any nominee for director who is considered an independent director by the company and who has received compensation within the last three years from the company for the provision of professional services (e.g., investment banking, consulting, legal or financial advisory fees).  |

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| ➣ | Putnam will <u>withhold votes</u> from any nominee for director who attends fewer than 75% of board and committee meetings. Putnam may refrain from withholding votes on a <u>case-by-case</u> basis if a valid reason for the absence exists, such as illness, personal emergency, potential conflict of interest, etc.  |

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|:---|:---|
| ➣ | Putnam will <u>withhold votes</u> from any incumbent nominee for director who served on a board that has not acted to implement a policy requested in a shareholder proposal that received the support of a majority of the votes actually cast on the matter at its previous two annual meetings, or  |

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|:---|:---|
| ➣ | Putnam will <u>withhold votes</u> from any incumbent nominee for director who served on a board that adopted, renewed, or made a material adverse modification to a shareholder rights plan (commonly referred to as a "poison pill") without shareholder approval during the current or prior calendar year. (This is applicable to any type of poison pill, for example, advance-warning type pill, EGM pill, and Trust Defense Plans in Japan.)  |

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Putnam will refrain from opposing the board members who served at the time of the adoption of the poison pill if the duration is one year or less, if the plan contains other suitable restrictions; or if the company publicly discloses convincing rationale for its adoption and seeks shareholder approval of future renewals of the poison pill. (Suitable restrictions could include but are not limited to, a higher threshold for passive investors. Convincing rationale could include circumstances such as, but not limited to, extreme market disruption or conditions, stock volatility, substantial merger, active investor interest, or takeover attempts.)

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|:---|:---|
| ➣ | Putnam will vote on a **case-by-case** basis and may consider voting against the Nominating Committee Chair if there is a lack of evidence of board diversity.  |

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Putnam is concerned about over-committed directors. In some cases, directors may serve on too many boards to make a meaningful contribution. This may be particularly true for senior executives of public companies (or other directors with substantially full-time employment) who serve on more than a few outside boards.

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|:---|:---|
| ➣ | Putnam will vote **against** any non-executive nominee for director who serves on more than four (4) public company boards, except where Putnam would otherwise be withholding votes for the entire board of directors. For the purpose of this guideline, boards of affiliated registered investment companies and other similar entities such as UCITS will count as one board. Generally, Putnam will withhold support from directors serving on more than four unaffiliated public company boards, although an exception may be made in the case of a director who represents an investing firm with the sole purpose of managing a portfolio of investments that includes the company.  |

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|:---|:---|
| ➣ | Putnam will **withhold** votes from any nominee for director who serves as an executive officer of any public company ("home company") while serving on more than two (2) public company board**s** other than the home company board. (Putnam will withhold votes from the nominee at each company where Putnam client portfolios own shares.) In addition, if Putnam client portfolios are shareholders of the executive's home company, Putnam will withhold votes from members of the company's governance committee. For the purpose of this guideline, boards of affiliated registered investment companies and other similar entities such as UCITS will count as one board.  |

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| ➣ | Putnam will **withhold votes** from any nominee for director of a public company (Company A) who is employed as a senior executive of another public company (Company B) if a director of Company B serves as a senior executive of Company A (commonly referred to as an "interlocking directorate").  |

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Board independence depends not only on its members' individual relationships, but also the board's overall attitude toward management. Independent boards are committed to good corporate governance practices and, by providing objective independent judgment, enhancing shareholder value. Putnam may withhold votes on a case-by-case basis from some or all directors that, through their lack of independence, have failed to observe good corporate governance practices or, through specific corporate action, have demonstrated a disregard for the interest of shareholders.

Note: Designation of executive director is based on company disclosure.

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| ➣ | Putnam will vote <u>against</u> proposals that provide that a director may be removed only for cause. Putnam will generally vote <u>for</u> proposals that permit the removal of directors with or without cause.  |

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| ➣ | Putnam will vote <u>against</u> proposals authorizing a board to fill a director vacancy without shareholder approval.  |

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| ➣ | Putnam will vote on a <u>case-by-case</u> basis on subsidiary director nominees if Putnam will be voting against the nominees of the parent company's board.  |

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| ➣ | Putnam will vote on a <u>case-by-case</u> basis for director nominees, including nominees for positions on Supervisory Boards or Supervisory Committees, or similar board entities (depending on board structure), for (re)election when cumulative voting applies.  |

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| ➣ | Putnam will vote <u>for</u> proposals to approve annual directors' fees, except that Putnam will vote on a <u>case-by-case</u> basis if Putnam's independent proxy voting service has recommended a vote against such proposal. Additionally, Putnam will vote <u>for</u> proposals to approve the grant of equity awards to directors, except that Putnam will consider these proposals on a <u>case-by-case</u>basis if Putnam's proxy service provider is recommending a vote against the proposal.  |

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#### Classified Boards

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| ➣ | Putnam will vote <u>against</u> proposals to classify a board, absent special circumstances indicating that shareholder interests would be better served by this structure.  |

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#### Ratification of Auditors

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| ➣ | Putnam will vote on a <u>case-by-case</u>basis on proposals to ratify the selection of independent auditors if there is evidence that the audit firm's independence or the integrity of an audit is compromised. (Otherwise, Putnam will vote <u>for</u>.)  |

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#### Contested Elections of Directors

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| ➣ | Putnam will vote on a <u>case-by-case</u> basis in contested elections of directors.  |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. <u>Executive Compensation</u>

Putnam will vote on a **case-by-case** basis on board-approved proposals relating to executive compensation, except as follows:

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| ➣ | Putnam will vote **for** stock option and restricted stock plans that will result in an average annual dilution of 1.67% or less (based on the disclosed term of the plan and including all equity-based plans), except where Putnam would otherwise be withholding votes for the entire board of directors in which case Putnam will evaluate the plans on a **case-by-case** basis.  |

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| ➣ | Putnam will vote <u>against</u> stock option and restricted stock plans that will result in an average annual dilution of greater than 1.67% (based on the disclosed term of the plan and including all equity plans).  |

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| ➣ | Putnam will vote **against** any stock option or restricted stock plan where the company's actual grants of stock options and restricted stock under all equity-based compensation plans during the prior three (3) fiscal years have resulted in an average annual dilution of greater than 1.67%.  |

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• Additionally, if the annualized dilution cannot be calculated, Putnam will vote <u>for</u> plans where the Total Potential Dilution is 5% or less. If the annualized dilution cannot be calculated and the Total Potential Dilution exceeds 5%, then Putnam will vote <u>against</u>. Note: Such plans must first pass all of Putnam's other screens.

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| ➣ | Putnam will vote proposals to issue equity grants to executives on a <u>case-by-case</u> basis.  |

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| ➣ | Putnam will vote <u>against</u> stock option plans that permit replacing or repricing of underwater options (and <u>against</u> any proposal to authorize such replacement or repricing of underwater options).  |

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| ➣ | Putnam will vote <u>against</u> stock option plans that permit issuance of options with an exercise price below the stock's current market price.  |

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| ➣ | Putnam will vote <u>against</u> stock option plans/ restricted stock plans with evergreen features providing for automatic share replenishment.  |

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| ➣ | Putnam will vote **for** bonus plans under which payments are treated as performance-based compensation that is deductible under Section 162(m) of the Internal Revenue Code of 1986, as amended, except as follows:  |

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Vote on a **case-by-case** basis on such proposals if any of the following circumstances exist:

• the amount per employee under the plan is unlimited, or

• the maximum award pool is undisclosed, or

• the incentive bonus plan's performance criteria are undisclosed, or

• the independent proxy voting service recommends a vote against.

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| ➣ | Putnam will vote in favor of the annual presentation of advisory votes on executive compensation (Say-on-Pay).  |

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| ➣ | Putnam will generally vote **for** advisory votes on executive compensation (Say-on-Pay). However, Putnam will vote **against** an advisory vote if the company fails to effectively link executive compensation to company performance according to benchmarking performed by the independent proxy voting service.  |

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• Putnam will review the proposal on a **case-by-case** basis if there is no recommendation of the independent proxy voting service.

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| ➣ | Putnam will vote on a **case-by-case** basis on severance agreements (e.g., golden and tin parachutes)  |

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| ➣ | Putnam will <u>withhold</u>votes from members of a Board of Directors which has approved compensation arrangements Putnam's investment personnel have determined are grossly unreasonable at the next election at which such director is up for re-election.  |

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| ➣ | Putnam will vote <u>for</u> employee stock purchase plans that have the following features: (1) the shares purchased under the plan are acquired for no less than 85% of their market value, (2) the offering period under the plan is 27 months or less, and (3) dilution is 10% or less.  |

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| ➣ | Putnam will vote <u>for</u> Non-qualified Employee Stock Purchase Plans with all the following features:  |

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1) Broad-based participation (i.e., all employees of the company with the exclusion of individuals with 5 percent or more of beneficial ownership of the company). 

2) Limits on employee contribution, which may be a fixed dollar amount or expressed as a percent of base salary. 

3) Company matching contribution up to 25 percent of employee's contribution, which is effectively a discount of 20 percent from market value. 

4) No discount on the stock price on the date of purchase since there is a company matching contribution.

Putnam will vote <u>against</u> Non-qualified Employee Stock Purchase Plans when any of the plan features do not meet the above criteria.

Putnam may vote against executive compensation proposals on a <u>case-by-case</u> basis where compensation is excessive by reasonable corporate standards, or where a company fails to provide transparent disclosure of executive compensation. In voting on proposals relating to executive compensation, Putnam will consider whether the proposal has been approved by an independent compensation committee of the board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. <u>Capitalization</u>

Putnam will vote on a case-by-case basis on board-approved proposals involving changes to a company's capitalization, except as follows:

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| ➣ | Putnam will vote <u>for</u> proposals relating to the authorization of additional common stock, except that Putnam will evaluate such proposals on a <u>case-by-case</u>basis if (i) they relate to a specific transaction or to common stock with special voting rights, (ii) the company has a non-shareholder approved poison pill in place, or (iii) the company has had sizeable stock placements to insiders within the past three years at prices substantially below market value without shareholder approval.  |

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| ➣ | Putnam will vote <u>for</u> proposals to effect stock splits (excluding reverse stock splits.)  |

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| ➣ | Putnam will vote <u>for</u> proposals authorizing share repurchase programs, except that Putnam will vote on a <u>case-by-case</u> basis if there are concerns that there may be abusive practices related to the share repurchase programs.  |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. <u>Acquisitions, Mergers, Reorganizations and</u> 

#### Other Transactions
Putnam will vote on a <u>case-by-case</u> basis on business transactions such as acquisitions, mergers, reorganizations involving business combinations, liquidations and sale of all or substantially all of a company's assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. <u>Anti-Takeover Measures</u>

Putnam will vote **against** board-approved proposals to adopt anti-takeover measures such as supermajority voting provisions, issuance of blank check preferred stock, the creation of a separate class of stock with disparate voting rights, control share acquisition provisions, targeted share placements, and ability to make greenmail payments, except as follows:

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| ➣ | Putnam will vote on a <u>case-by-case</u> basis on proposals to ratify or approve shareholder rights plans;  |

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| ➣ | Putnam will vote on a <u>case-by-case</u> basis on proposals to adopt fair price provisions.  |

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| ➣ | Putnam will vote on a <u>case-by-case</u> basis on proposals to issue blank check preferred stock in the case of REITs (only).  |

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| ➣ | Putnam will generally vote **for** proposals that enable or expand shareholders' ability to take action by written consent.  |

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| ➣ | Putnam will vote on a <u>case-by-case</u> basis on proposals to <u>increase</u> shares of an existing class of stock with disparate voting rights from another share class.  |

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| ➣ | Putnam will vote on a **case-by-case** basis on **shareholder or board-approved** proposals to eliminate supermajority voting provisions at controlled companies (companies in which an individual or a group voting collectively holds a majority of the voting interest).  |

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| ➣ | Putnam will vote on a **<u>case-by-case</u> basis** on **board-approved** proposals to adopt supermajority voting provisions at controlled companies (companies in which an individual or a group voting collectively holds a majority of the voting interest).  |

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| ➣ | Putnam will vote on a **case-by-case** basis on proposals to issue blank check preferred stock if appropriate "*de-clawed"* language is present. Specifically, appropriate *de-clawed* language will include cases where the Company states (i.e., through 8-K, proxy statement or other public disclosure) it will not use the preferred stock for anti-takeover purposes, or in order to implement a shareholder rights plan, or discloses a commitment to submit any future issuances of preferred stock to be used in a shareholder rights plan/anti-takeover purpose to a shareholder vote prior to its adoption.  |

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**F.** <u>Other Business Matters</u> 

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| ➣ | Putnam will vote **for** board-approved proposals approving routine business matters such as changing the company's name and procedural matters relating to the shareholder meeting, except as follows:  |

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| ➣ | Putnam will vote on a <u>case-by-case</u> basis on proposals to amend a company's charter or bylaws (except for charter amendments necessary or to effect stock splits, to change a company's name, to authorize additional shares of common stock or other matters which are considered routine (for example, director age or term limits), technical in nature, fall within Putnam's guidelines (for example, regarding board size or virtual meetings), are required pursuant to regulatory and/or listing rules, have little or no economic impact or will not negatively impact shareholder rights).  |

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| ➣ | Additionally, Putnam believes the bundling of items, whether the items are related or unrelated, is generally not in shareholders' best interest. We may vote <u>against</u> the entire bundled proposal if we would normally vote against any of the items if presented individually. In these cases, we will review the bundled proposal on a <u>case-by-case</u> basis.  |

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| ➣ | Putnam generally supports quorum requirements if the level is set high enough to ensure a broad range of shareholders is represented in person or by proxy but low enough so that the Company can transact necessary business. Putnam will vote on a <u>case-by-case</u> basis on proposals seeking to change quorum requirements; however, Putnam will normally support proposals that seek to comply with market or exchange requirements.  |

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| ➣ | Putnam will vote on a <u>case-by-case</u> basis on proposals seeking to change a company's state of incorporation. However, Putnam will vote <u>for</u> mergers and reorganizations involving business combinations designed solely to reincorporate a company in Delaware.  |

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| ➣ | Putnam will vote <u>against</u> authorization to transact other unidentified, substantive business at the meeting.  |

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| ➣ | Putnam will vote <u>against</u> proposals where there is a lack of information to make an informed voting decision.  |

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| ➣ | Putnam will vote as follows on proposals to adjourn shareholder meetings:  |

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If Putnam is withholding support for the board of the company at the meeting, any proposal to adjourn should be referred for <u>case-by-case</u> analysis.

If Putnam is not withholding support for the board, Putnam will vote in favor of adjourning, unless the vote concerns an issue that is being referred back to Putnam for case-by-case review. Under such circumstances, the proposal to adjourn should also be referred to Putnam for **case-by-case** analysis.

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| ➣ | Putnam will vote <u>against</u> management proposals to adopt a specific state's courts, or a specific U.S. district court as the exclusive forum for certain disputes, except that Putnam will vote <u>for</u> proposals adopting the State of Delaware, or the Delaware Chancery Court, as the exclusive forum, for corporate law matters for issuers incorporated in Delaware. Requiring shareholders to bring actions solely in one state may discourage the pursuit of derivative claims by increasing their difficulty and cost. However, Putnam's guideline recognizes the expertise of the Delaware state court system in handling disputes involving Delaware corporations. In addition, Putnam will <u>withhold votes</u> from the chair of the Nominating/Governance committee if a company amends its Bylaws, or takes other actions, to adopt a specific state's courts (other than Delaware courts, for issuers incorporated in Delaware) or a specific U.S. district court as the exclusive forum for certain disputes <u>without</u> shareholder approval.  |

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|:---|:---|
| ➣ | Putnam will vote on a case-by-case basis on management proposals seeking to adopt a bylaw amendment allowing the company to shift legal fees and costs to unsuccessful plaintiffs in intra-corporate litigation (fee-shifting bylaw). Additionally, Putnam will vote against the Chair of the Nominating/Governance committee if a company adopts a fee-shifting bylaw amendment without shareholder approval.  |

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➣ Putnam will support management/shareholder proxy access proposals as long as the proposals align with the following principles for a shareholder (or up to 20 shareholders together as a group) to receive proxy access:

1) The required minimum aggregate ownership of the Company's outstanding common stock is no greater than 3%; 

2) The required minimum holding period for the shareholder proponent(s) is no greater than two years; and

3) The shareholder(s) are permitted to nominate at least 20% of director candidates for election to the board. 

Proposals requesting shares be held for 3 years will be reviewed on a <u>case-by-case</u>basis. Putnam will vote <u>**agains**t</u> proposals requesting shares be held for more than three years. Proposals that meet Putnam's stated criteria and include other requirements relating to issues such as, but not limited to, shares on loan or compensation agreements with nominees, will be reviewed on a <u>case-by-case</u> basis.

Additionally, shareholder proposals seeking an amendment to a company's proxy access policy which include any one of the supported criteria under Putnam's guidelines, for example, a 2-year holding period for shareholders, will be reviewed on a **case-by-case** basis.

Putnam supports management / shareholder proposals giving shareholders the right to call a special meeting as long as the ownership requirement in such proposals is at least **15%** of the company's outstanding common stock and not more than **25%**.

In general, Putnam will vote <u>for</u> management or shareholder proposals to reduce the ownership requirement below a company's existing threshold, as long as the new threshold is at least **15%** and not greater than **25%** of the company's outstanding common stock.

Putnam will vote <u>against</u> any proposal with an ownership requirement exceeding **25%** of the company's common stock or an ownership requirement that is less than **15%** of the company's outstanding common stock.

In cases where there are competing management and shareholder proposals giving shareholders the right to call a special meeting, Putnam will generally vote **for** the proposal which has the lower minimum shareholder ownership threshold, as long as that threshold is within Putnam's recommended minimum/maximum thresholds. If only one of the competing proposals has a threshold that falls within Putnam's threshold range, Putnam will normally support that proposal as long as

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it represents an improvement (reduction) from the previous requisite ownership level. Putnam will normally vote **against** both proposals if neither proposal has a requisite ownership level between **15%** and **25%** of the company's outstanding common stock.

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| | |
|:---|:---|
| ➣ | Putnam will generally vote **fo**<u>r</u> management or shareholder proposals to allow a company to hold virtual-only or hybrid shareholder meetings or to amend its articles/charter/by-laws to allow for virtual-only or hybrid shareholder meetings, provided the proposal does not preclude in-person meetings (at any given time), and does not otherwise limit or impair shareholder participation; and if the company has provided clear disclosure to ensure that shareholders can effectively participate in virtual-only shareholder meetings and meaningfully communicate with company management and directors. Additionally, Putnam may consider the rationale of the proposal and whether there have been concerns about the company's previous meeting practices.  |

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Disclosure should address the following:

• the ability of shareholders to ask questions during the meeting

<sup>○</sup> including time guidelines for shareholder questions

<sup>○</sup> rules around what types of questions are allowed

<sup>○</sup> and rules for how questions and comments will be recognized and disclosed to meeting participants

<sup>○</sup> the manner in which appropriate questions received during the meeting will be addressed by the board

• procedures, if any, for posting appropriate questions received during the meeting and the company's answers on the investor page of their website as soon as is practical after the meeting

• technical and logistical issues related to accessing the virtual meeting platform; and

• procedures for accessing technical support to assist in the event of any difficulties accessing the virtual meeting

Putnam may vote against proposals that do not meet these criteria.

Additionally, Putnam may vote **agains**t the Chair of the Governance Committee when the board is planning to hold a virtual-only shareholder meeting and the company has not provided sufficient disclosure (as noted above) or shareholder access to the meeting.

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| | |
|:---|:---|
| ➣ | Putnam will vote <u>for</u> proposals to approve a company's board-approved climate transition action plan ("say on climate" proposals in which the company's board proposes that shareholders indicate their support for the company's plan), unless the proxy voting service has recommended a vote against the proposal, in which case Putnam will vote on a <u>case-by-case</u> basis on the proposal.  |

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|:---|:---|
| ➣ | Putnam will vote on a <u>case-by-case</u> basis on board-approved proposals that conflict with shareholder proposals.  |

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II. Shareholder Proposals

Shareholder proposals are non-binding votes that are often opposed by management. Some proposals relate to matters that are financially immaterial to the company's business, while others may be impracticable or costly for a company to implement. At the same time, well-crafted shareholder proposals may serve the purpose of raising issues that are material to a company's business for management's consideration and response. Putnam seeks to weigh the costs of different types of proposals against their expected financial benefits. More specifically:

Putnam will vote**in accordance with the recommendation of the company's board of directors** on all shareholder proposals, except as follows:

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|:---|:---|
| ➣ | Putnam will vote **for** shareholder proposals that are consistent with Putnam's proxy voting guidelines for board-approved proposals.  |

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|:---|:---|
| ➣ | Putnam will vote **for** shareholder proposals to declassify a board, absent special circumstances which would indicate that shareholder interests are better served by a classified board structure.  |

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|:---|:---|
| ➣ | Putnam will vote **for** shareholder proposals to require shareholder approval of shareholder rights plans.  |

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|:---|:---|
| ➣ | Putnam will vote **for** shareholder proposals asking that director nominees receive support from holders of a majority of votes cast or a majority of shares outstanding of the company in order to be (re) elected.  |

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|:---|:---|
| ➣ | Putnam will review on a **case-by-case** basis, shareholder proposals requesting that the board adopt a policy whereby, in the event of a significant restatement of financial results or significant extraordinary write-off, the board will recoup, to the fullest extent practicable, for the benefit of the company, all performance-based bonuses or awards that were made to senior executives based on having met or exceeded specific performance targets to the extent that the specified performance targets were not met.  |

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|:---|:---|
| ➣ | Putnam will vote **for** shareholder proposals urging the board to seek shareholder approval of any future supplemental executive retirement plan ("SERP"), or individual retirement arrangement, for senior executives that provides credit for additional years of service not actually worked, preferential benefit formulas not provided under the company's tax-qualified retirement plans, accelerated vesting of retirement benefits or retirement perquisites and fringe benefits that are not generally offered to other company employees. (Implementation of this policy shall not breach any existing employment agreement or vested benefit.)  |

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|:---|:---|
| ➣ | Putnam will vote **for** shareholder proposals requiring companies to report on their executive retirement benefits. (Deferred compensation, split-dollar life insurance, SERPs and pension benefits)  |

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|:---|:---|
| ➣ | Putnam will vote **for** shareholder proposals requesting that a company establish a pay-for-superior-performance standard whereby the company discloses defined financial and/or stock price performance criteria (along with the detailed list of comparative peer group) to allow shareholders to sufficiently determine the pay and performance correlation established in the company's performance-based equity program. In addition, no <u>multi-year</u> award should be paid out unless the company's performance exceeds, <u>during the current CEO's tenure (three or more years)</u>, its peer median or mean performance on selected financial and stock price performance criteria.  |

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|:---|:---|
| ➣ | Putnam will vote **for** shareholder proposals urging the board to disclose in a separate report to shareholders, the Company's relationships with its executive compensation consultants or firms. Specifically, the report should identify the entity that retained each consultant (the company, the board or the compensation committee) and the types of services provided by the consultant in the past five years (non-compensation-related services to the company or to senior management and a list of all public company clients where the Company's executives serve as a director.)  |

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|:---|:---|
| ➣ | Putnam will vote <u>for</u> shareholder proposals requiring companies to accelerate vesting of equity awards under management severance agreements only if both of the following conditions are met:  |

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• the company undergoes a change in control, and

• the change in control results in the termination of employment for the person receiving the severance payment.

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|:---|:---|
| ➣ | Putnam will vote **for** shareholder proposals requiring that the chair's position be filled by an independent director (separate chair/CEO). However, Putnam will vote on a **case-by-case** basis on such proposals when the company's board has a lead-independent director (or already has an independent or separate chair) <u>and</u> Putnam is supporting the nominees for the board of directors.  |

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|:---|:---|
| ➣ | Putnam will vote for shareholder proposals seeking the submission of golden coffins to a shareholder vote or the elimination of the practice altogether.  |

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|:---|:---|
| ➣ | Putnam will vote <u>for</u> shareholder proposals seeking a policy that forbids any director who receives more than 25% withhold votes cast (based on for and withhold votes) from serving on any key board committee for two years and asking the board to find replacement directors for the committees if need be.  |

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|:---|:---|
| ➣ | Putnam will vote <u>for</u>shareholder proposals urging the board to seek shareholder approval of severance agreements (e.g., golden and tin parachutes).  |

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• However, Putnam will vote **against** such proposals when the company has a policy that minimally requires shareholder approval of severance agreements for executives that provides for cash severance benefits exceeding 2.99 times the sum of the executive's base salary plus target annual non-equity incentive plan bonus opportunity.

Putnam will vote on a **case-by-case** basis on approving such compensation arrangements.

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|:---|:---|
| ➣ | Putnam will vote **for** shareholder proposals requiring companies to make cash payments under management severance agreements only if both of the following conditions are met: the company undergoes a change in control, and the change in control results in the termination of employment for the person receiving the severance payment.  |

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|:---|:---|
| ➣ | Putnam will vote on a **case-by-case** basis on shareholder proposals to limit a company's ability to make excise tax gross-up payments under management severance agreements as well as proposals to limit income or other tax gross-up payments.  |

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|:---|:---|
| ➣ | Putnam will vote <u>in accordance with the recommendation of the company's board of directors</u> on shareholder proposals regarding corporate political spending, unless Putnam is voting against the directors, in which case the proposal would be reviewed on a <u>case-by-case</u> basis.  |

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|:---|:---|
| ➣ | Putnam will vote on a <u>case-by-case</u> basis on shareholder proposals that conflict with board-approved proposals.  |

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#### Environmental and Social

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|:---|:---|
| ➣ | Putnam believes that sustainable environmental practices and sustainable social policies are important components of long-term value creation. Companies should evaluate the potential risks to their business operations that are directly related to environmental and social factors (among others). In evaluating shareholder proposals relating to environmental and social initiatives, Putnam takes into account (1) the relevance and materiality of the proposal to the company's business, (2) whether the proposal is well crafted (e.g., whether it references science-based targets, or standard global protocols), and (3) the practicality or reasonableness of implementing the proposal.  |

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Putnam may support well-crafted and well-targeted proposals that request additional reporting or disclosure on a company's plans to mitigate risk to the company related to the following issues and/or their strategies related to these issues: Environmental issues, including but not limited to, climate change, greenhouse gas emissions, renewable energy, and broader sustainability issues; and Social issues, including but not limited to, fair pay, employee diversity and development, safety, labor rights, supply chain management, privacy and data security.

In addition, Putnam will consider proposals related to Artificial Intelligence ("AI") on a case-by-case basis.

Putnam will consider factors such as (i) the industry in which the company operates, (ii) the company's current level of disclosure, (iii) the company's level of oversight, (iv) the company's management of risk arising out of these matters, (v) whether the company has suffered a material financial impact. Other factors may also be considered.

Putnam will consider the recommendation of its third-party proxy service provider and may consider other factors such as third-party evaluations of ESG performance.

Additionally, Putnam may vote on a **case-by-case** basis on proposals which ask a company to take action beyond reporting where our third-party proxy service provider has identified one or more reasons to warrant a vote FOR.

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III. Voting Shares of Non-US Issuers

Many non-US jurisdictions impose material burdens on voting proxies. There are three primary types of limits as follows:

1) Share blocking. Shares must be frozen for certain periods of time to vote via proxy. 

2) Share re-registration. Shares must be re-registered out of the name of the local custodian or nominee into the name of the client for the meeting and, in many cases, then re-registered back. Shares are normally blocked in this period.

3) Powers of Attorney. Detailed documentation from a client must be given to the local sub-custodian. In many cases Putnam is not authorized to deliver this information or sign the relevant documents.

Putnam's policy is to weigh the benefits to clients from voting in these jurisdictions against the detriments of not doing so. For example, in a share blocking jurisdiction, it will normally not be in a client's interest to freeze shares simply to participate in a non-contested routine meeting. More specifically, Putnam will normally not vote shares in non-US jurisdictions imposing burdensome proxy voting requirements except in significant votes (such as contested elections and major corporate transactions) where directed by portfolio managers.

Putnam recognizes that the laws governing non-US issuers will vary significantly from US law and from jurisdiction to jurisdiction. Accordingly, it may not be possible or even advisable to apply these guidelines mechanically to non-US issuers. However, Putnam believes that shareholders of all companies are protected by the existence of a sound corporate governance and disclosure framework. Accordingly, Putnam will vote proxies of non-US issuers **in accordance with the foregoing guidelines where applicable**<u>,</u> **except as follows:**

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|:---|:---|
| ➣ | Putnam will vote <u>for</u> shareholder proposals calling for a majority of the directors to be independent of management.  |

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|:---|:---|
| ➣ | Putnam will vote <u>for</u> shareholder proposals that implement corporate governance standards similar to those established under U.S. federal law and the listing requirements of U.S. stock exchanges, and that do not otherwise violate the laws of the jurisdiction under which the company is incorporated.  |

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|:---|:---|
| ➣ | Putnam will vote on a <u>case-by-case</u> basis on proposals relating to (1) the issuance of common stock in excess of 20% of a company's outstanding common stock where shareholders do not have preemptive rights, or (2) the issuance of common stock in excess of 100% of a company's outstanding common stock where shareholders have preemptive rights.  |

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| | |
|:---|:---|
| ➣ | Putnam will vote **for** proposals to authorize share repurchase programs that are recommended for approval by Putnam's proxy voting service provider, otherwise Putnam will vote **against** such proposals; except that Putnam will vote on a **case-by-case basis** if there are concerns that there may be abusive practices related to the share repurchase programs.  |

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|:---|:---|
| ➣ | Putnam will vote **against** authorizations to repurchase shares or issue shares or convertible debt instruments with or without preemptive rights when such authorization can be used as a takeover defense without shareholder approval. Putnam will not apply this policy to a company with a shareholder who controls more than 50% of its voting rights.  |

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| | |
|:---|:---|
| ➣ | Putnam will generally vote for proposals that include debt issuances, however substantive/non-routine proposals, and proposals that fall outside of normal market practice or reasonable standards, will be reviewed on a <u>case-by-case</u> basis.  |

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|:---|:---|
| ➣ | Putnam will vote <u>for</u> board-approved routine, market-practice proposals. These proposals are limited to (1) those issues that will have little or no economic impact, such as technical, editorial, or mandatory regulatory compliance items, (2) those issues that will not adversely affect and/or which clearly improve shareholder rights/values, and which do not violate Putnam's proxy voting guidelines, or (3) those issues that do not seek to deviate from existing laws or regulations. Examples include but are not limited to, related party transactions (non-strategic), profit-and-loss transfer agreements (Germany), authority to increase paid-in capital (Taiwan). Should any unusual circumstances be identified concerning a normally routine issue, such proposals will be referred back to Putnam for internal review.  |

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|:---|:---|
| ➣ | Putnam will generally vote **for** proposals regarding amendments seeking to expand business lines or to amend the corporate purpose, provided the proposal would not include a significant or material departure from the company's current business, and/or will provide the company with greater flexibility in the performance of its activities.  |

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|:---|:---|
| ➣ | Putnam will normally vote <u>for</u> management proposals concerning allocation of income and the distribution of dividends. However, Putnam portfolio teams will override this guideline when they conclude that the proposals are outside the market norms (i.e., those seen as consistently and unusually small or large compared to market practices).  |

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|:---|:---|
| ➣ | Putnam will generally vote <u>for</u> proposals seeking to adjust the par value of common stock. However, non-routine, substantive proposals will be reviewed on a <u>case-by-case</u> basis.  |

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|:---|:---|
| ➣ | Putnam will vote **against** proposals that would authorize the company to reduce the notice period for calling special or extraordinary general meetings to less than 21-Days.  |

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|:---|:---|
| ➣ | Putnam will generally vote <u>for</u> proposals relating to transfer of reserves/increase of reserves (i.e., France, Japan). However, Putnam will vote on a <u>case-by-case</u> basis if the proposal falls outside of normal market practice.  |

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|:---|:---|
| ➣ | Putnam will generally vote <u>for</u> proposals to increase the maximum variable pay ratio. However, Putnam will vote on a <u>case-by-case</u> basis if we are voting against a company's remuneration report or if the proposal seeks an increase in excess of 200%.  |

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➣ Putnam will review stock option plans on a <u>case-by-case</u> basis which allow for the options exercise price to be reduced by dividend payments (if the plan would normally pass Putnam's Guidelines).

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|:---|:---|
| ➣ | Putnam will generally vote <u>for</u> requests to provide loan guarantees however, Putnam will vote on a <u>case-by-case</u> basis if the total amount of guarantees is in excess of 100% of the company's audited net assets.  |

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|:---|:---|
| ➣ | Putnam will generally support remuneration report/policy proposals (i.e., advisory/binding) where a company's executive compensation is linked directly with the performance of the business and executive. Putnam will generally support compensation proposals which incorporate a mix of reasonable salary and performance based short- and long-term incentives. Companies should demonstrate that their remuneration policies are designed and managed to incentivize and retain executives while growing the company's long-term shareholder value.  |

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Generally, Putnam will vote <u>against</u> remuneration report/policy proposals (i.e., advisory/binding) in the following cases:

• Disconnect between pay and performance

• No performance metrics disclosed;

• No relative performance metrics utilized;

• Single performance metric was used and it was an absolute measure;

• Performance goals were lowered when management failed or was unlikely to meet original goals;

• Long Term Incentive Plan is subject to retesting (e.g., Australia);

• Service contracts longer than 12 months (e.g., United Kingdom);

• Allows vesting below median for relative performance metrics;

• Ex-gratia / non-contractual payments have been made (e.g., United Kingdom and Australia);

• Contains provisions to automatically vest upon change-of-control; or

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• Other poor compensation practices or structures.

• Pension provisions for new executives is not at the same level as the majority of the wider workforce; pension provisions for incumbent executives are not set to decrease over time (United Kingdom)

• Proposed CEO salary increases are not justifiably appropriate in comparison to wider workforce or rationale for exception increases is not fully disclosed (United Kingdom)

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|:---|:---|
| ➣ | Putnam will vote on a <u>case-by-case basis</u> on bonus payments to executive directors or senior management; however, Putnam will vote <u>against</u> payments that include outsiders or independent statutory auditors.  |

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#### Matters Relating to Board of Directors

#### Uncontested Board Elections

#### Asia: China, Hong Kong, India, Indonesia, Philippines, Taiwan and Thailand

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|:---|:---|
| ➣ | Putnam will **vote <u>against</u>** the entire board of directors if  |

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<sup>○</sup> fewer than one-third of the directors are independent directors, or

◾ the board has not established <u>audit</u>, <u>compensation</u> and <u>nominating</u> committees each composed of a majority of independent directors, or

◾ the chair of the audit, compensation or nominating committee is not an independent director.

Commentary: Companies listed in China (or dual-listed in China and Hong Kong) often have a separate supervisory committee in addition to a standard board of directors containing audit, compensation, and nominating committees. The supervisory committee provides oversight of the financial affairs of the company and supervises members of the board and management, while the board of directors makes decisions related to the company's business and investment strategies. The supervisory committee normally comprises employee representatives and shareholder representatives. Shareholder representatives are elected by shareholders of the company while employee representatives are elected by the company's staff. Shareholder representatives may be independent or may be affiliated with the company or its substantial shareholders. Current laws and regulations neither provide a basis for evaluation of supervisor independence nor do they require a supervisor to be independent.

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|:---|:---|
| ➣ | Putnam will generally vote in favor of nominees to the Supervisory Committee  |

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#### Australia

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|:---|:---|
| ➣ | Putnam will vote <u>against</u> the entire board of directors if  |

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• fewer than a majority of the directors are independent, or

• the board has not established an audit committee composed solely of non-executive directors, a majority of whom, including the chair of the committee (who should not be the board chair), should be independent directors, or

• the board has not established nominating and compensation committees each composed of a majority of independent, non-executive directors, with an independent chair.

#### Brazil

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|:---|:---|
| ➣ | Putnam will vote **against** proposals requesting cumulative voting unless there are more candidates than number of seats available, in which case vote for.  |

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|:---|:---|
| ➣ | Putnam will vote **for** proposals for the proportional allocation of cumulative votes if Putnam is supporting the entire slate of nominees. Putnam will vote **against** such proposals if Putnam is not supporting the entire slate.  |

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|:---|:---|
| ➣ | Putnam will **abstain** on individual director allocation proposals if Putnam is voting for the proportional allocation of cumulative votes. Putnam will vote on a **case-by-case** basis on individual director allocation proposals if Putnam is voting against the proportional allocation of votes.  |

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|:---|:---|
| ➣ | Putnam will vote **for** proposals to cumulate votes of common and preferred shareholders if the nominees are known and Putnam is supporting the applicable nominees; Putnam will vote **against** such proposals if Putnam is not supporting the known nominees, or if the nominees are unknown.  |

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|:---|:---|
| ➣ | Putnam will generally vote **against** proposals seeking the recasting of votes for amended slate (as new candidates could be included in the amended slate without prior disclosure to shareholders).  |

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|:---|:---|
| ➣ | Putnam will vote **against** proposals regarding instructions if meeting is held on second call if election of directors is part of the recasting as the slate can be amended without (prior) disclosure to shareholders.  |

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|:---|:---|
| ➣ | Putnam will vote **against** proposals regarding the casting of minority votes to the candidate with largest number of votes.  |

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#### Canada
Canadian corporate governance requirements mirror corporate governance reforms that have been adopted by the NYSE and other U.S. national securities exchanges and stock markets. As a result, Putnam will vote on matters relating to the board of directors of Canadian issuers **in accordance with the guidelines applicable to U.S. issuers.**

<u>Commentary</u>: Like the UK's Combined Code on Corporate Governance, the policies on corporate governance issued by Canadian securities regulators embody the "comply and explain" approach to corporate governance. Because Putnam believes that the board independence standards contained in the proxy voting guidelines are integral to the protection of investors in Canadian companies, these standards will be applied in a prescriptive manner.

#### Continental Europe (ex-Germany)

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|:---|:---|
| ➣ | Putnam will vote **against** the entire board of directors if  |

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• fewer than a majority of the directors are <u>i</u> ndependent directors, or

• the board has not established <u>audit, nominating</u> and <u>compensation</u> committees each composed of a majority of independent directors.

<u>Commentary</u>: An "independent director" under the European Commission's guidelines is one who is free of any business, family or other relationship, with the company, its controlling shareholder or the management of either, that creates a conflict of interest such as to impair his judgment. A "non-executive director" is one who is not engaged in the daily management of the company.

In France, Employee Representatives are employed by the company and represent rank and file employees. These representatives are elected by company employees. The law also provides for the appointment of employee shareholder representatives, if the employee shareholdings exceed 3% of the share capital. Employee shareholder representatives are elected by the company's shareholders (via general meeting).

#### Germany

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|:---|:---|
| ➣ | For companies subject to "co-determination," Putnam will vote <u>for</u> the election of nominees to the supervisory board, except:  |

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|:---|:---|
| ➣ | Putnam will vote <u>against</u> the Supervisory Board if  |

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• the board has not established an audit committee comprising an Independent chair.

• the audit committee chair serves as board chair.

• the board contains more than two former management board members.

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|:---|:---|
| ➣ | Putnam will vote <u>against</u> the election of a former member of the company's managerial board to chair of the supervisory board.  |

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<u>Commentary</u>: German corporate governance is characterized by a two-tier board system - a managerial board composed of the company's executive officers, and a supervisory board. The supervisory board appoints the members of the managerial board. Shareholders elect members of the supervisory board, except that in the case of companies with a large number of employees, company employees are allowed to elect some of the supervisory board members (one-half of supervisory board members are elected by company employees at companies with more than 2,000 employees; one-third of the supervisory board members are elected by company employees at companies with more than 500 employees but fewer than 2,000). This practice is known as co-determination.

#### Israel
**Non-Controlled Banks**: Director elections at Non-Controlled banks are overseen by the Supervisor of the Banks and nominees for election as "other" (non-external) directors and external directors (under Companies Law and Directive 301) are put forward by an external and independent committee. As such,

➣ Putnam's guidelines regarding board Nominating Committees will not apply

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|:---|:---|
| ➣ | Putnam will vote on a **case-by-case** on nominees when there are more nominees than seats available.  |

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#### Italy
Election of directors and statutory auditors:

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| | |
|:---|:---|
| ➣ | Putnam will apply the director guidelines to the majority shareholder supported list and vote accordingly (**for** or **against**) if multiple lists of director candidates are presented. If there is no majority shareholder supported slate of nominees, Putnam will support the shareholder slate of nominees that is recommended for approval by Putnam's service provider.  |

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|:---|:---|
| ➣ | Putnam will vote **against** the entire list of director nominees if the list is bundled as one proposal and if Putnam would otherwise be voting against any one director nominee.  |

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|:---|:---|
| ➣ | Putnam will generally vote **for** the majority shareholder supported list of statutory auditor nominees.  |

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Note: Pursuant to Italian law, directors and statutory auditors are elected through a slate voting system whereby candidates are presented in lists submitted by shareholders representing a minimum percentage of share capital.

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| | |
|:---|:---|
| ➣ | Putnam will withhold votes from any director not identified in the proxy materials. (Example: Co-opted director nominees.)  |

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#### Japan

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| | |
|:---|:---|
| ➣ | For companies that have established a U.S.-style corporate governance structure, Putnam will **withhold votes** from the entire board of directors if:  |

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• the board does not have a majority of outside directors,

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• the board has not established nominating and compensation committees composed of a majority of outside directors,

• the board has not established an audit committee composed of a majority of independent directors, or

• the board does not have at least two independent directors for companies with a controlling shareholder.

➣ For companies that have established a statutory auditor board structure:

• Putnam will **withhold votes** from the appointment of members of a company's board of statutory auditors if a majority of the members of the board of statutory auditors is not independent.

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| | |
|:---|:---|
| ➣ | For companies that have established a statutory auditor board structure, Putnam will **withhold votes** from the entire board of directors if:  |

---

• the board does not have at least two outside directors, or

• the board does not have at least two independent directors for companies with a controlling shareholder.

• Putnam will vote **against** any statutory auditor nominee who attends fewer than 75% of board and committee meeting without valid reasons for the absences (i.e., illness, personal emergency, etc.) (Note that Corporate Law requires disclosure of outsiders' attendance but not that of insiders, who are presumed to have no more important time commitments.)

---

| | |
|:---|:---|
| ➣ | For companies that have established an audit committee board structure (one-tier / one committee), Putnam will <u>withhold votes</u> from the entire board of directors if:  |

---

• the board does not have at least two outside directors,

• the board does not have at least two independent directors for companies with a controlling shareholder, or

• the board has not established an audit committee composed of a majority of independent directors

#### Election of Executive Director and Election of Supervisory Director - REIT
REITs have a unique two-tier board structure with generally one or more executive directors and two or more supervisory directors. The number of supervisory directors must be greater than, not equal to, the number of executive directors. Shareholders are asked to vote on both types of directors. Putnam will vote as follows, provided each board of executive / supervisory directors meets legal requirements.

---

| | |
|:---|:---|
| ➣ | Putnam will generally vote <u>for</u> the election of Executive Director  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will generally vote <u>for</u> the election of Supervisory Directors  |

---

<u>Commentary:</u> 

**Definition of outside director and independent director:** 

The Japanese Companies Act focuses on two director classifications: Insider or Outsider. An outside director is a director who is not a director, executive, executive director, or employee of the company or its parent company, subsidiaries or affiliates. Further, a director, executive, executive director or employee, who have executive responsibilities, of the company or subsidiaries can regain eligibility ten years after his or her resignation, provided certain other requirements are met. An outside director is designated as an "independent" director based on the Tokyo Stock Exchange listing rules. An outside director is "independent" if that person can make decisions completely independent from the managers of the company, its parent, subsidiaries, or affiliates

------

and does not have a material relationship with the company (i.e., major client, trading partner, or other business relationship; familial relationship with current director or executive; etc.).

The guidelines have incorporated these definitions in applying the board independence standards above.

#### Korea
Putnam will **withhold votes** from the entire board of directors if:

• For large companies (i.e., those with assets of at least KRW 2 trillion); the board does not have at least three independent directors or less than a majority of directors are independent directors,

• For small companies (i.e., those with assets of less than KRW 2 trillion), fewer than one-fourth of the directors are independent directors,

• The board has not established a nominating committee with at least half of the members being outside directors, or

• the board has not established an audit committee composed of at least three members and in which at least two-thirds of its members are independent directors.

*<u>Commentary</u>:* For purposes of these guidelines, an "outside director" is a director who is independent from the management or controlling shareholders of the company and holds no interests that might impair performing his or her duties impartially from the company, management or controlling shareholder. In determining whether a director is an outside director, Putnam will also apply the standards included in Article 382 of the Korean Commercial Act*,* i.e., no employment relationship with the company for a period of two years before serving on the committee, no director or employment relationship with the company's largest shareholder, etc.) and may consider other business relationships that would affect the independence of an outside director.

---

| | |
|:---|:---|
| ➣ | Putnam will generally vote <u>for</u> proposals to amend the Executive Officer Retirement Allowance Policy unless the recipients of the grants include non-executives; the proposal would have a negative impact on shareholders, or the proposal appear to be outside of normal market practice, in which case Putnam will vote <u>against</u>.  |

---

#### Malaysia

---

| | |
|:---|:---|
| ➣ | Putnam will vote <u>against</u> the entire board of directors if:  |

---

• less than 50% of the directors are independent directors, or less than a majority of the directors are independent directors for large companies,

• the board has not established an audit committee with all members being independent directors, including the committee chair,

• the board has not established a nominating committee with all members being non-executive directors, a majority of whom are independent, including the committee chair; the board chair should not serve as a member of the nomination committee, or

• the board has not established a compensation committee with all members being non-executive directors, a majority of whom are independent; the board chair should not serve as a member of the remuneration committee.

#### Nordic Markets – Finland, Norway, Sweden

---

| | |
|:---|:---|
| ➣ | Putnam will vote <u>against</u> the entire board of directors if:  |

---

#### Board Independence:

------

• The board does not have a majority of directors independent from the company and management. (Sweden, Finland, Norway)

• The board does not have at least two directors independent from the company and its major shareholders holding > 10% of the Company's share capital. (Sweden, Finland, Norway)

• An executive director is a member of the board. (Norway)

#### Audit Committee:
• The audit committee does not consist of a majority of directors independent from the company and management. (Sweden, Finland)

• The audit committee does not have at least one director independent from the company and its major shareholders holding > 10% of the Company's share capital. (Sweden, Finland)

• The audit committee is not majority independent. (Norway)

#### Remuneration Committee:
• The remuneration committee is not fully independent of the company, excluding the chair. (Sweden)

• The remuneration committee is not majority independent of the company. (Finland)

• The remuneration committee does not consist fully of non-executive directors. (Finland)

• The remuneration committee is not fully independent of management (Norway)

• The remuneration committee is not majority independent from the company and its major shareholders holding > 50% of the Company's share capital. (Sweden, Finland, Norway)

#### Board Nomination Committee:
• The nomination committee does not consist of a majority of directors independent from the company. (Finland)

• An executive is a member of the nomination committee. (Finland)

**External Nomination Committee:** Vote against the establishment of the nomination committee and its guidelines when:

• The external committee is not majority independent of the company and management. (Sweden)

• The external committee does not have at least one director not affiliated to largest shareholder on the committee. (Sweden)

• The external committee does not meet best practice based on ISS analysis. (Finland)

• The external committee is not majority independent of the board and management. (Norway)

• The external committee has more than one member of the board of the directors sitting on the committee. (Norway)

• There is insufficient disclosure provided for new nominees (Norway)

• An executive is a member of the committee. (Norway)

------

#### Russia

---

| | |
|:---|:---|
| ➣ | Putnam will vote on a <u>case-by-case basis</u> for the election of nominees to the board of directors.  |

---

<u>Commentary</u>: In Russia, director elections are handled through a cumulative voting process. Cumulative voting allows shareholders to cast all of their votes for a single nominee for the board of directors, or to allocate their votes among nominees in any other way. In contrast, in "regular" voting, shareholders may not give more than one vote per share to any single nominee. Cumulative voting can help to strengthen the ability of minority shareholders to elect a director.

#### Singapore

---

| | |
|:---|:---|
| ➣ | Putnam will vote <u>against</u> from the entire board of directors if  |

---

• in the case of a board with an independent director serving as chair, fewer than one-third of the directors are independent directors; or, in the case of a board not chaired by an independent director, fewer than half of the directors are independent directors,

• the board has not established <u>audit</u> and <u>compensation</u> committees, each with an independent director serving as chair, with at least a majority of the members being independent directors, and with all of the directors being non-executive directors, or

• the board has not established a <u>nominating</u> committee, with an independent director serving as chair, and with at least a majority of the members being independent directors.

#### United Kingdom, Ireland
<u>Commentary:</u> 

**Application of guidelines**: Although the Combined Code has adopted the "comply and explain" approach to corporate governance, Putnam believes that the guidelines discussed above with respect to board independence standards are integral to the protection of investors in UK companies. As a result, these guidelines will be applied in a prescriptive manner.

**Definition of independence**: For the purposes of these guidelines, a non-executive director shall be considered independent if the director meets the independence standards in section A.3.1 of the Combined Code (i.e., no material business or employment relationships with the company, no remuneration from the company for non-board services, no close family ties with senior employees or directors of the company, etc.), except that Putnam does not view service on the board for more than nine years as affecting a director's independence.

**Smaller companies**: A smaller company is one that is below the FTSE 350 throughout the year immediately prior to the reporting year.

---

| | |
|:---|:---|
| ➣ | Putnam will <u>withhold votes</u> from the entire board of directors if:  |

---

• the board, excluding the Non-Executive Chair, is not comprised of at least half independent non-executive directors,

• the board has not established a Nomination committee composed of a majority of independent non-executive directors, excluding the Non-Executive Chair, or

• the board has not established a Compensation committee composed of (1) at least three directors (in the case of smaller companies, as defined by the Combined Code, two directors) and (2) solely of independent non-executive directors. The company chair may be a member of, but not chair, the Committee provided he or she was considered independent on appointment as chair, or

------

• The board has not established an Audit Committee composed of, (1) at least three directors (in the case of smaller companies as defined by the Combined Code, two directors) and (2) solely of independent non-executive directors. The board chair may not serve on the audit committee of large or small companies.

#### All other jurisdictions

---

| | |
|:---|:---|
| ➣ | In the absence of jurisdiction specific guidelines, Putnam will vote as follows for boards/supervisory boards:  |

---

---

| | |
|:---|:---|
| <sup>○</sup> | Putnam will vote <u>against</u> the entire board of directors if  |

---

• fewer than a majority of the directors are independent directors, or

• the board has not established audit, nominating and compensation committees each composed of a majority of independent directors.

#### Additional Commentary regarding all Non-US jurisdictions:
Whether a director is considered "independent" or not will be determined by reference to local corporate law or listing standards.

Some jurisdictions may legally require or allow companies to have a certain number of employee representatives, employee shareholder representatives (e.g., France) and/or shareholder representatives on their board. Putnam generally does not consider these representatives independent. The presence of employee representatives or employee shareholder representatives on the board and key committees is generally legally mandated. In most markets, shareholders do not have the ability to vote on the election of employee representatives or employee shareholder representatives. In some markets, significant shareholders have a legal right to nominate shareholder representatives. Shareholders are required to approve the election of shareholder representatives to the board. Unlike employee representatives, there are no legal requirements regarding the presence of shareholder representatives on the board or its committees.

---

| | |
|:---|:---|
| ➣ | Putnam will **not include** employee or employee shareholder representatives in the independence calculation of the board or key committees, nor in the calculation of the size of the board.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will **include** shareholder representatives in the independence calculation of the board and key committees, and in the calculation of the size of the board.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will generally support shareholder or employee representatives if included in the agenda Putnam will vote on a **case-by-case** basis when there are more candidates than seats. Additionally, Putnam will vote **against** such nominees when there is insufficient information disclosed.  |

---

➣ Putnam Investments' policies regarding the provision of professional services and transactional relationship with regard to directors will apply.

---

| | |
|:---|:---|
| ➣ | Putnam will vote **for** independent nominees for alternate director, unless such nominees do not meet Putnam's individual director standards.  |

---

#### Shareholder nominated directors/self-nominated directors

---

| | |
|:---|:---|
| ➣ | Putnam will vote <u>against</u> shareholder nominees if Putnam supports the board of directors.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote on a <u>case-by case</u> basis if Putnam will be voting against the current board.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote on a case-by-case basis if the proposal regarding a self-nominated/shareholder nominated director nominee would add an additional seat to the board if the nominee is approved.  |

---

#### Other Business Matters

------

#### Japan
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>A. Article Amendments</u> 

---

| | |
|:---|:---|
| ➣ | The Japanese Companies Act gives companies the option to adopt a U.S.-Style corporate structure (i.e., a board of directors and audit, nominating, and compensation committees). Putnam will vote **for** proposals to amend a company's articles of incorporation to adopt the U.S.-Style "Board with Committees" structure. However, the independence of the outside directors is critical to effective corporate governance under this new system. Putnam will, therefore, scrutinize the backgrounds of the outside director nominees at such companies, and will vote **against** the amendment where Putnam believes the board lacks the necessary level of independence from the company or a substantial shareholder.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote on a **case-by-case** basis on granting the board the authority to repurchase shares at its discretion.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote **against** amendments to delete a requirement directing the company to reduce authorized capital by the number of treasury shares cancelled. If issued share capital decreases while authorized capital remains unchanged, then the company will have greater leeway to issue new shares (for example as a private placement or a takeover defense).  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote <u>against</u> proposals to authorize appointment of special directors. Under the new Corporate Law, companies are allowed to appoint, from among their directors, "special directors" who will be authorized to make decisions regarding the purchase or sale of important assets and major borrowing or lending, on condition that the board has at least six directors, including at least one non-executive director. At least three special directors must participate in the decision-making process and decisions shall be made by a majority vote of the special directors. However, the law does not require any of the special directors to be non-executives, so in effect companies may use this mechanism to bypass outsiders.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will generally vote **for** proposals to create new class of shares or to conduct a share consolidation of outstanding shares to squeeze out minority shareholders.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote **against** proposals seeking to enable companies to establish specific rules governing the exercise of shareholder rights. (Note: Such as, shareholders' right to submit shareholder proposals or call special meetings.)  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>B. Compensation Related Matters</u> 

---

| | |
|:---|:---|
| ➣ | Putnam will vote **against** option plans which allow the grant of options to suppliers, customers, and other outsiders.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote **against** stock option grants to independent internal statutory auditors. The granting of stock options to internal auditors, at the discretion of the directors, can compromise the independence of the auditors and provide incentives to ignore accounting problems, which could affect the stock price over the long term.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote **against** the payment of retirement bonuses to directors and statutory auditors when one or more of the individuals to whom the grants are being proposed has not served in an executive capacity for the company. Putnam will also vote **against** payment of retirement bonuses to any directors or statutory auditors who have been designated by the company as independent. Retirement bonus proposals are all-or-nothing, meaning that split votes against individual payments cannot be made. If any one individual does not meet Putnam's criteria, Putnam will vote **against** the entire bundled item.  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>C. Other Business Matters</u> 

---

| | |
|:---|:---|
| ➣ | Putnam votes **for** mergers by absorptions of wholly-owned subsidiaries by their parent companies. These deals do not require the issuance of shares, and do not result in any dilution or new obligations for shareholders of the parent company. These transactions are routine.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote **for** the acquisition if it is between parent and wholly-owned subsidiary.  |

---

------

---

| | |
|:---|:---|
| ➣ | Putnam will vote <u>for</u> the formation of a holding company, if routine. Holding companies are once again legal in Japan and a number of companies, large and small, have sought approval to adopt a holding company structure. Most of the proposals are intended to help clarify operational authority for the different business areas in which the company is engaged and promote effective allocation of corporate resources. As most of the reorganization proposals do not entail any share issuances or any change in shareholders' ultimate ownership interest in the operating units, Putnam will treat most such proposals as routine.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote **against** proposals that authorize the board to vary the AGM record date.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote **for** proposals to abolish the retirement bonus system  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote **for** board-approved director/officer indemnification proposals  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote on a **case-by-case** basis on private placements (Third-party share issuances). Where Putnam views the share issuance necessary to avoid bankruptcy or to put the company back on solid financial footing, Putnam will generally vote **for**. When a private placement allows a particular shareholder to obtain a controlling stake in the company at a discount to market prices, or where the private placement otherwise disadvantages ordinary shareholders, Putnam will vote **against**.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will generally vote <u>against</u> shareholder rights plans (poison pills). However, if all of the following criteria are met, Putnam will evaluate such poison pills on a <u>case-by-case</u> basis:  |

---

1) The poison pill must have a duration of no more than three years.

2) The trigger threshold must be no less than 20 percent of issued capital. 

3) The company must have no other types of takeover defenses in place.

4) The company must establish a committee to evaluate any takeover offers, and the members of that committee must all meet Putnam's' definition of independence.

5) At least 20 percent, and no fewer than two, of the directors must meet Putnam's definition of independence. These independent directors must also meet Putnam's guidelines on board meeting attendance. 

6) The directors must stand for reelection on an annual basis.

7) The company must release its proxy materials no less than three weeks before the meeting date.

---

| | |
|:---|:---|
| ➣ | Putnam will vote <u>against</u> proposals to allow the board to decide on income allocation without shareholder vote.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote <u>against</u> proposals to limit the liability of External Audit Firms ("Accounting Auditors")  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote <u>against</u> proposals seeking a reduction in board size that eliminates all vacant seats.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam may generally vote <u>against</u> proposals seeking an increase in authorized capital that leaves the company with as little as 25 percent of the authorized capital outstanding (general request). However, such proposals will be evaluated on a company specific basis, taking into consideration such factors as current authorization outstanding, existence (or lack thereof) of preemptive rights and rationale for the increase.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote **for** corporate split agreement and transfer of sales operations to newly created wholly-owned subsidiaries where the transaction is a purely internal one which does not affect shareholders' ownership interests in the various operations. All other proposals will be referred back to Putnam for **case-by-case** review. These reorganizations usually accompany the switch to a holding company structure, but may be used in other contexts.  |

---

#### United Kingdom

------

---

| | |
|:---|:---|
| ➣ | Putnam will not apply the U.S. standard 15% discount cap for employee share purchase schemes at U.K. companies. As such, Putnam will generally vote <u>for</u> 'Save-As-You-Earn' schemes in the U.K which allow for no more than a 20% purchase discount, and which otherwise comply with U.K. law and Putnam standards.  |

---

#### France

---

| | |
|:---|:---|
| ➣ | Putnam will not apply the U.S. standard 15% discount cap for employee share purchase schemes at French companies. As such, Putnam will generally vote <u>for</u> employee share purchase schemes in France that allow for no greater than a 30% purchase discount, or 40% purchase discount if the vesting period is equal to or greater than ten years, and which otherwise comply with French law and Putnam standards.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will generally vote <u>for</u> the Remuneration Report (established based on SRD II), however Putnam will vote on a <u>case-by-case</u> basis when Putnam is voting against both the ex-Post Remuneration Report (CEO) and ex-Ante Remuneration Policy (CEO, or proposal including CEO remuneration package) in the current year, and Putnam's third party service provider(s) is recommending a vote against.  |

---

#### Canada

---

| | |
|:---|:---|
| ➣ | Putnam will generally vote <u>for</u> Advance Notice provisions for submitting director nominations not less than 30 days prior to the date of the annual meeting. For Advance Notice provisions where the minimum number of days to submit a shareholder nominee is less than 30 days prior to the meeting date, Putnam will vote on a <u>case-by-case</u> basis. Putnam will also vote on a <u>case-by-case</u> basis if the company's policy expressly prohibits the commencement of a new notice period in the event the originally scheduled meeting is adjourned or postponed.  |

---

#### Hong Kong

---

| | |
|:---|:---|
| ➣ | Putnam will vote <u>for</u> proposals to approve a general mandate permitting the company to engage in non-pro rata share issuances of up to 20% of total equity in a year if the company's board meets Putnam's independence standards; if the company's board does not meet Putnam's independence standards, then Putnam will vote against these proposals.  |

---

---

| | |
|:---|:---|
| ➣ | Additionally, Putnam will vote for proposals to approve the reissuance of shares acquired by the company under a share repurchase program, provided that: (1) Putnam supported (or would have supported, in accordance with these guidelines) the share repurchase program, (2) the reissued shares represent no more than 10% of the company's outstanding shares (measured immediately before the reissuance), and (3) the reissued shares are sold for no less than 85% of current market value.  |

---

This policy supplements policies regarding share issuances as stated above under section

III. Voting Shares of Non-US Issuers.

#### Taiwan

---

| | |
|:---|:---|
| ➣ | Putnam will vote <u>against</u> proposals to release the board of directors from the non-compete restrictions specified in Taiwanese Company Law. However, Putnam will vote <u>for</u> such proposals if the directors are engaged in activities with a wholly- owned subsidiary of the company.  |

---

#### Australia

---

| | |
|:---|:---|
| ➣ | Putnam will vote <u>for</u> proposals to carve out, from the general cap on non-pro rata share issues of 15% of total equity in a rolling 12-month period, a particular proposed issue of shares or a particular issue of shares made previously within the 12-month period, if the company's board meets Putnam's independence standards; if the company's board does <u>not</u> meet Putnam's independence standards, then Putnam will vote <u>against</u> these proposals.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote for proposals renewing partial takeover provisions.  |

---

------

➣ Putnam will vote on a <u>case-by-case</u> basis on Board-Spill proposals. <br>

#### Turkey

---

| | |
|:---|:---|
| ➣ | Putnam will vote on a <u>case-by-case</u> basis on proposals involving related party transactions. However, Putnam will vote <u>against</u> when such proposals do not provide information on the specific transaction(s) to be entered into with the board members or executives.  |

---

------

#### Exhibit B to Proxy Procedures
<u>PUTNAM INVESTMENTS</u> 

<u>PROXY VOTING CONFLICT</u> 

OF INTEREST DISCLOSURE FORM

1. *Company name*:

2. *Date of Meeting:* 

3. *Referral Item(s):* 

4. *Description of Putnam's Business Relationship with Issuer of Proxy which may give rise to a conflict of interest:* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. *5.* *Describe procedures used to address any conflict of interest:* 

6. *Describe any contacts from parties outside Putnam Management (other than routine communications from proxy solicitors) with respect to the referral item not otherwise reported in an investment professional's recommendation:* 

CERTIFICATION

The undersigned officer of Putnam Investments certifies that, to the best of his or her knowledge, any recommendation of an investment professional provided under circumstances where a conflict of interest exists was made solely on the investment merits and without regard to any other consideration.

Name:

Proxy Voting Team

------

#### Exhibit C to Proxy Procedures
<u>PUTNAM INVESTMENTS</u> 

<u>PROXY VOTING CONFLICT</u> 

OF INTEREST DISCLOSURE FORM

1. *Company name*:

2. *Date of Meeting*:

3. *Referral Item(s)*:

4. *Description of Putnam's Business Relationship with Issuer of Proxy which may give rise to a conflict of interest:* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>None</u> 

5. *Describe procedures used to address any conflict of interest*: N/A

6. *Describe any contacts from parties outside Putnam Management (other than routine communications from proxy solicitors) with respect to the referral item not otherwise reported in an investment professional's recommendation*:

None

CERTIFICATION

The undersigned officer of Putnam Investments certifies that, to the best of his or her knowledge, any recommendation of an investment professional provided under circumstances where a conflict of interest exists was made solely on the investment merits and without regard to any other consideration.

Name:

Proxy Voting Team

------

September 1, 2025

Putnam ETF Trust

---

| | | |
|:---|:---|:---|
| **Fund** | **Symbol** | **Principal U.S. Listing Exchange** |
| &nbsp;&nbsp; Putnam PanAgora ESG Emerging<br> Markets Equity ETF ("ESG Emerging Markets Equity ETF")<br>| PPEM<br>| NYSE Arca, Inc.<br>|
| &nbsp;&nbsp; Putnam PanAgora ESG International<br> Equity ETF ("ESG International Equity<br> ETF")<br>| PPIE<br>| NYSE Arca, Inc.<br>|

---

#### STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information ("SAI") is not a prospectus. If the Fund has more than one form of current prospectus, each reference to the prospectus in this SAI includes all of the Fund's prospectuses, unless otherwise noted. The SAI should be read together with the applicable prospectus. The audited financial statements and report of the Fund's independent registered public accounting firm in the Fund's Form N-CSR, for the fiscal year ended April 30, 2025, are incorporated by reference into this SAI, which means that they are part of this SAI for legal purposes.

Part I of this SAI contains specific information about each Fund listed above (references to the "Fund" mean each Fund listed on this cover page, unless otherwise noted). Part II includes information about the Fund and other Putnam mutual funds and exchange-traded funds (collectively, the "Putnam funds").

For a free copy of the Fund's current prospectus, shareholder reports, and/or financial statements, call Putnam Investor Services at 1-800-225-1581, write P.O. Box 219697, Kansas City, MO 64121-9697 or visit www.franklintempleton.com.

PAN04-SAI 09/25

------

#### **Table of Contents**

---

| | |
|:---|:---|
|  **PART I** |  |
|  **[FUND ORGANIZATION AND CLASSIFICATION](#sai938342_1)** | **3** |
|  **[INVESTMENT RESTRICTIONS](#sai938342_2)** | **3** |
|  **[CHARGES AND EXPENSES](#sai938342_3)** | **4** |
|  **[PORTFOLIO MANAGERS](#sai938342_4)** | **10** |
|  **[SECURITIES LENDING ACTIVITIES](#sai938342_5)** | **12** |
|  **[FINANCIAL STATEMENTS](#sai938342_6)** | **12** |
|  **PART II** |  |
|  **[BUYING AND SELLING SHARES](#sai938342_7)** | **13** |
|  **[MISCELLANEOUS INVESTMENTS, INVESTMENT PRACTICES AND RISKS](#sai938342_8)** | **20** |
|  **[EXCHANGE TRADED FUNDS RISK](#sai938342_9)** | **71** |
|  **[TAXES](#sai938342_10)** | **71** |
|  **[MANAGEMENT](#sai938342_11)** | **85** |
|  **[DISCLOSURE OF PORTFOLIO INFORMATION](#sai938342_12)** | **103** |
|  **[INFORMATION SECURITY RISKS](#sai938342_13)** | **105** |
|  **[PROXY VOTING GUIDELINES AND PROCEDURES](#sai938342_14)** | **105** |
|  **[SECURITIES RATINGS](#sai938342_15)** | **105** |
|  **[APPENDIX A—PROXY VOTING PROCEDURES OF THE PUTNAM FUNDS](#sai938342_16)** | **110** |

---

------

#### SAI

#### PART I

#### FUND ORGANIZATION AND CLASSIFICATION
The Fund is a diversified series of Putnam ETF Trust (the "Trust"). The Trust is a Delaware statutory trust organized on December 22, 2020.

The Trust is an open-end management investment company with an unlimited number of authorized shares of beneficial interest. The Trustees may, without shareholder approval, create two or more series of shares representing separate investment portfolios. Any series of shares may be divided without shareholder approval into two or more classes of shares having such preferences and special or relative rights and privileges as the Trustees determine.

Each share has one vote per dollar of net asset value represented by such share.

Shares of all classes vote together as a single class except when otherwise required by law or as determined by the Trustees. The Trustees may take many actions affecting the fund without shareholder approval, including under certain circumstances merging the Fund into another Putnam fund. Shares are freely transferable, are entitled to dividends as declared by the Trustees, and, if the Fund were liquidated, would receive the net assets of the Fund.

The Fund may refuse any order to purchase shares. Although the Fund is not required to hold annual meetings of its shareholders, shareholders holding at least 10% of the outstanding shares entitled to vote have the right to call a meeting to elect or remove Trustees, or to take other actions as provided in the Agreement and Declaration of Trust.

#### Information about the Summary Prospectus, Prospectus, and SAI
The Fund has entered into contractual arrangements with an investment adviser, distributor, transfer 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 Trust's Agreement and Declaration of Trust, any claims asserted by a shareholder against or on behalf of the Trust (or its series), including claims against Trustees and Officers, must be brought in courts of the State of Delaware.

#### INVESTMENT RESTRICTIONS
The Fund has adopted the fundamental investment restrictions below for the protection of shareholders. Fundamental investment restrictions may not be changed without a vote of a majority of the outstanding voting securities. The Investment Company Act of 1940, as amended (the "1940 Act"), provides that a "vote of a majority of the outstanding voting securities" of a fund means the affirmative vote of the lesser of (1) more than 50% of the outstanding fund shares, or (2) 67% or more of the shares present at a meeting if more than 50% of the outstanding fund shares are represented at the meeting in person or by proxy.

#### As fundamental investment restrictions, the Fund may not and will not:
(1) Borrow money in excess of 33 1/3% of the value of its total assets (not including the amount borrowed) at the time the borrowing is made.

(2) Underwrite securities issued by other persons except to the extent that, in connection with the disposition of its portfolio investments, it may be deemed to be an underwriter under certain federal securities laws.

(3) Purchase or sell real estate, although it may purchase securities of issuers which deal in real estate, securities which are secured by interests in real estate, and securities representing interests in real estate, and it may acquire and dispose of real

------

estate or interests in real estate acquired through the exercise of its rights as a holder of debt obligations secured by real estate or interests therein.

(4) Purchase or sell commodities or commodity contracts, except as permitted by applicable law, and the Fund may purchase or sell (a) other instruments backed by commodities and (b) commodities acquired as a result of ownership of securities or other instruments.

(5) Make loans, except by purchase of debt obligations in which the Fund may invest consistent with its investment policies (including without limitation debt obligations issued by other Putnam funds), by entering into repurchase agreements, or by lending its portfolio securities.

(6) With respect to 75% of its total assets, invest in securities of any issuer if, immediately after such investment, more than 5% of the total assets of the Fund (taken at current value) would be invested in the securities of such issuer; provided that this limitation does not apply to obligations issued or guaranteed as to interest or principal by the U.S. government or its agencies or instrumentalities or to securities issued by other investment companies.

(7) With respect to 75% of its total assets, acquire more than 10% of the outstanding voting securities of any issuer; provided that this limitation does not apply to obligations issued or guaranteed as to interest or principal by the U.S. government or its agencies or instrumentalities or to securities issued by other investment companies.

(8) Purchase securities (other than securities of the U.S. government, its agencies or instrumentalities) if as a result of such purchase, more than 25% of the Fund's total assets would be invested in any one industry.

(9) Issue any class of securities which is senior to the Fund's shares of beneficial interest, except for permitted borrowings.

For purposes of the Fund's fundamental policy on commodities and commodities contracts (#4 above), notwithstanding any federal legislation or regulatory action by the Commodity Futures Trading Commission ("CFTC") that subject swaps to regulation by the CFTC, the Fund will not consider such instruments to be commodities or commodity contracts for purposes of this policy.

For purposes of the Fund's fundamental policy on industry concentration (#8 above), the Fund's investment manager determines the appropriate industry categories and assigns issuers to them, informed by a variety of considerations, including relevant third party categorization systems. Industry categories and issuer assignments may change over time as industry sectors and issuers evolve. Portfolio allocations shown in shareholder reports and other communications may use broader investment sectors or narrower sub-industry categories.

All percentage limitations on investments will apply at the time of the making of an investment and shall not be considered violated unless an excess or deficiency occurs or exists immediately after and as a result of such investment.

#### The following non-fundamental investment policy may be changed by the Trustees without shareholder approval:
The Fund will not acquire any securities of registered open-end investment companies or registered unit investment trusts in reliance on Sections 12(d)(1)(F) or (G)of the Investment Company Act of 1940, as amended.

#### CHARGES AND EXPENSES

#### Creation/Redemption Transaction Fees
The following table shows the standard transaction fees for creations and redemptions.

---

| | |
|:---|:---|
| **Standard Creation/Redemption Transaction Fee (in kind)** | **Standard Creation/Redemption Transaction Fee (in cash)** |
| $250 | $100 |

---

------

#### Management fees
Putnam Investment Management, LLC (the "Investment Manager") serves as the Fund's investment manager. Under the Fund's management agreement with the Investment Manager (the "Management Contract"), the Fund pays an annual all-inclusive management fee to the Investment Manager as shown below. The management fee is based on the Fund's average daily net assets and is calculated and accrued daily. In consideration of the management fee, the Investment Manager pays all expenses incurred by the Fund, or reimburses the Fund for, all of the Fund's organizational and other operating expenses, excluding only: (i) interest and taxes (including, but not limited to, income, excise, transfer and withholding taxes); (ii) expenses of the Fund incurred with respect to the acquisition and disposition of portfolio securities, commodities or other financial instruments and the execution of portfolio transactions, including brokerage commissions; (iii) expenses incurred in connection with any distribution plan adopted by the Fund in compliance with Rule 12b-1 under the 1940 Act, including distribution fees; (iv) expenses of printing and mailing proxy materials to shareholders of the Fund; (v) all other expenses incidental to holding meetings of the Fund's shareholders, including proxy solicitations therefor; (vi) litigation expenses (including, but not limited to, any indemnification obligation, attorneys' fees, expenses, costs, judgments, amounts paid in settlement, fines, penalties, fees of expert witnesses, document production fees, and all other liabilities whatsoever incurred or paid by the Fund or a person indemnified by the Fund); (vii) the fee payable to the Investment Manager hereunder; (viii) any extraordinary expenses (which, for the avoidance of doubt, do not include expenses related to the organization of any subsidiary for a fund or the ongoing corporate expenses of maintaining such subsidiary) and (ix) acquired fund fees and expenses.

Management Fee:

ESG Emerging Markets Equity ETF: 0.60%

ESG International Equity ETF: 0.49%

For the past three fiscal years ended April 30, pursuant to the applicable management contract, the Fund incurred the following fees:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Fund name** | **Fiscal year** | **Fiscal year** | **Management<br>fee paid** | **Amount of<br>management<br>fee waived\*** | **Amount<br>management<br>fee would have<br>been without<br>waivers** |
|  ESG Emerging Markets Equity ETF | 2025 |  | $201714 | $657 | $202371 |
|  | 2024 |  | $122615 | $311 | $122926 |
|  | 2023 | \*\* | $24549 | $24 | $24573 |
|  ESG International Equity ETF | 2025 |  | $996676 | $2289 | $998965 |
|  | 2024 |  | $672215 | $1453 | $673668 |
|  | 2023 | \*\* | $131762 | $380 | $132142 |

---

\*For the fiscal year ended April 20, 2025, April 30, 2024 and April 20, 2023 management fees paid by the Fund were reduced by an amount equal to the management fees paid by Putnam Government Money Market Fund with respect to assets invested by the Fund in Putnam Government Money Market Fund.

\*\*For the period from January 19, 2023 (commencement of operations) to April 30, 2023.

#### Brokerage commissions
For the past three fiscal years ended April 30, the Fund paid the following brokerage commissions:

------

---

| | | |
|:---|:---|:---|
| **Fund name** | **Fiscal year** | **Broker commissions** |
|  ESG Emerging Markets Equity ETF | 2025 | $54926 |
|  | 2024 | $29936 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;2023\* | $18902 |
|  ESG International Equity ETF | 2025 | $148290 |
|  | 2024 | $145768 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;2023\* | $91499 |

---

\*For the period from January 19, 2023 (commencement of operations) to April 30, 2023.

For the fiscal year ended April 30, 2025, the Fund placed transactions with brokers and dealers through which the Investment Manager and its affiliates receive brokerage or research services as follows:

---

| | | |
|:---|:---|:---|
| **Fund name** | **Dollar Value of these**<br>**transactions** | **Amount of**<br>**commissions** |
|  ESG Emerging Markets Equity ETF | $75725135 | $54926 |
|  ESG International Equity ETF | $329773244 | $148290 |

---

As of April 30, 2025, the Fund did not hold securities of its regular broker-dealers (or affiliates of such broker-dealers).

#### Trustee responsibilities and fees
The Trustees are responsible for generally overseeing the conduct of Fund business. Subject to such policies as the Trustees may determine, the Investment Manager furnishes a continuing investment program for the Fund and makes investment decisions on its behalf. Subject to the control of the Trustees, the Investment Manager also manages the Fund's other affairs and business.

The table below shows the value of each Trustee's holdings in the Fund and in all registered investment companies in the Franklin Templeton funds complex overseen by the Trustee as of December 31, 2024.

------

---

| | | | |
|:---|:---|:---|:---|
| | **Dollar Range of Equity Securities in the Fund ($)** | **Dollar Range of Equity Securities in the Fund ($)** | |
| <br>**Trustees** | **ESG Emerging Markets**<br>**Equity ETF** | **ESG International Equity**<br>**ETF** |<br>**Aggregate Dollar Range**<br>**of Equity Securities in**<br>**All Registered**<br>**Investment Companies**<br>**in the Franklin**<br>**Templeton Funds**<br>**Complex Overseen by**<br>**Trustee ($)** |
|  **Independent Trustees** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy |  |  | $10001-$50000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $1-$10000 | $1-$10000 | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $1-$10000 | $1-$10000 | over $100,000 |
| **Interested Trustees** | **Interested Trustees** | **Interested Trustees** | **Interested Trustees** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust |  |  | over $100,000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds |  |  | over $100,000 |

---

Each Independent Trustee of the Fund receives an annual retainer fee and an additional fee for each Trustee meeting attended. Independent Trustees also are reimbursed for expenses they incur relating to their services as Trustees. All of the current Independent Trustees of the Fund are Trustees of all the Putnam funds and receive fees for their services.

The Trustees periodically review their fees to ensure that such fees continue to be appropriate in light of their responsibilities as well as in relation to fees paid to trustees of other mutual fund complexes. The Board Policy and Nominating Committee, which consists solely of Independent Trustees of the Fund, estimates that committee and Trustee meeting time, together with the appropriate preparation, requires the equivalent of at least four business days per regular Trustee meeting.

The standing committees of the Board of Trustees, and the number of times each committee met during the fiscal year ended April 30, 2025, are shown in the table below:

---

| | |
|:---|:---|
|  Audit, Compliance and Risk Committee | 13 |
|  Board Policy and Nominating Committee | 6 |
|  Brokerage Committee | 3 |
|  Contract Committee | 8 |
|  Executive Committee | 1 |
|  Investment Oversight Committees |  |
|  Investment Oversight Committee A | 5 |
|  Investment Oversight Committee B | 5 |
|  Pricing Committee | 8 |
|  Exchange-Traded Fund Committee | 4 |

---

Effective July 1 2025, the following changes were made to the standing committees:

• The Brokerage Committee, the Pricing Committee and the Exchange-Traded Fund Committee were eliminated as standing committees.

------

• The Contract Committee assumed the responsibilities of the Brokerage Committee and the Audit, Compliance and Risk Committee assumed the responsibilities of the Pricing Committee.

• The responsibilities of the Exchange-Traded Fund Committee were assumed by the Investment Oversight Committees and the other standing committees as appropriate based on subject matter.

The following table shows the fees paid to each Trustee by the Fund for the fiscal year ended April 30, 2025 and the fees paid to each Trustee by other funds in the Franklin Templeton funds complex for services rendered during the calendar year ended December 31, 2024. Certain Independent Trustees who serve in leadership positions of the Board of Trustees or Board committees receive additional compensation, which is included in the fees shown below.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Trustees**  | **Aggregate<br>compensation from**<br>**the Fund<sup>1</sup>** | **Pension or<br>retirement<br>benefits accrued<br>as part of Fund<br>expenses** | **Estimated<br>annual benefits<br>from Franklin<br>Templeton<br>funds complex<br>upon retirement<sup>2</sup>** | **Total<br>compensation<br>from Franklin<br>Templeton funds<br>complex** |
|  **ESG Emerging Markets Equity ETF** |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $87 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $117 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $87 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $90 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $83 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $87 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $87 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $93 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $89 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $87 | N/A | N/A | $382000 |
| **Interested Trustees**  | **Interested Trustees**  | **Interested Trustees**  | **Interested Trustees**  | **Interested Trustees**  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |
|  **ESG International Equity ETF** |  |  |  |  |
|  **Independent Trustees** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liaquat Ahamed | $532 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Barbara M. Baumann | $721 | N/A | N/A | $464500 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Katinka Domotorffy | $532 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Catharine Bond Hill | $552 | N/A | N/A | $368660 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Kenneth R. Leibler<sup>3</sup> | N/A | N/A | N/A | $295160 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Gregory G. McGreevey<sup>4</sup> | $507 | N/A | N/A | $189590 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Jennifer Williams Murphy | $532 | N/A | N/A | $382000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Marie Pillai | $532 | N/A | N/A | $355320 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; George Putnam III | $571 | $0 | $130333 | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Manoj P. Singh | $548 | N/A | N/A | $407000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mona K. Sutphen | $532 | N/A | N/A | $382000 |
| **Interested Trustees** | **Interested Trustees** | **Interested Trustees** | **Interested Trustees** | **Interested Trustees** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Robert L. Reynolds<sup>5</sup> | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Jane E. Trust<sup>5</sup> | N/A | N/A | N/A | N/A |

---

------

<sup>1</sup> Certain Trustees are also owed compensation deferred pursuant to a Trustee Compensation Deferral Plan. As of April 30, 2025, the total amounts of deferred compensation payable by ESG Emerging Markets Equity ETF and ESG International Equity ETF, including income earned on such amounts, to these Trustees were: Mr. Ahamed – $7 and $50; Ms. Baumann - $6 and $40; Ms. Domotorffy - $7 and $45; Dr. Hill - $17 and $115; and Ms. Pillai - $3 and $17, respectively.

<sup>2</sup> Estimated benefits for each Trustee are based on Trustee fee rates for calendar years 2003, 2004 and 2005.

<sup>3</sup> Mr. Leibler retired from the Board of Trustees effective June 30, 2024.

<sup>4</sup> Mr. McGreevey was appointed to the Board of Trustees on May 17, 2024.

<sup>5</sup> Mr. Reynolds and Ms. Trust are not compensated by the Fund for their service as Trustees because of their affiliation with the Investment Manager.

Under a retirement plan for Trustees of Putnam funds (the "Plan"), each Trustee who retires with at least five years of service as a Trustee of the funds is entitled to receive an annual retirement benefit equal to one-half of the average annual attendance and retainer fees paid to such Trustee for calendar years 2003, 2004 and 2005. This retirement benefit is payable during a Trustee's lifetime, beginning the year following retirement, for the number of years of service through December 31, 2006. A death benefit, also available under the Plan, ensures that the Trustee and his or her beneficiaries will receive benefit payments for the lesser of an aggregate period of (i) ten years, or (ii) such Trustee's total years of service.

The Plan Administrator (currently the Board Policy and Nominating Committee) may terminate or amend the Plan at any time, but no termination or amendment will result in a reduction in the amount of benefits (i) currently being paid to a Trustee at the time of such termination or amendment, or (ii) to which a current Trustee would have been entitled had he or she retired immediately prior to such termination or amendment. The Trustees have terminated the Plan with respect to any Trustee first elected to the Board after 2003.

For additional information concerning the Trustees, see "Management" in Part II of this SAI.

#### Share Ownership
Principal Shareholders

Although the Fund does not have information concerning the beneficial ownership of shares held in the names of Depository Trust Company participant brokers ("DTC Participants"), to the best knowledge of the Fund, as of July 31, 2025, the following DTC Participants owned of record 5% or more of the outstanding shares of the Fund.

---

| | | |
|:---|:---|:---|
| **Fund** | **Name and Address** | **Percent of Ownership (%)** |
|  **ESG Emerging Markets Equity ETF** | J.P. MORGAN SECURITIES LLC<br> 4 CHASE METROTECH CENTER<br> BROOKLYN, NY 11245-0001 | 88.97%\* |
|  | WELLS FARGO<br> 420 MONTGOMERY STREET<br> SAN FRANCISCO, CA 94104 | 8.51% |
|  **ESG International Equity ETF** | J.P. MORGAN SECURITIES LLC<br> 4 CHASE METROTECH CENTER<br> BROOKLYN, NY 11245-0001 | 96.66%\* |

---

\*Shareholders who beneficially own 25% or more of the outstanding shares of the Fund or who are otherwise deemed to "control" the Fund may be able to determine or significantly influence the outcome of matters submitted to a vote of the Fund's shareholders.

As of July 31, 2025, the Trustees and officers of the Trust, as a group, owned less than 1% of the outstanding shares of each class of the Fund.

------

#### PORTFOLIO MANAGERS

#### Other Accounts Managed by the Portfolio Managers
The table below identifies the portfolio managers, the number of accounts (other than the Fund) for which the portfolio managers have day-to-day management responsibilities and the total assets in such accounts, within each of the following categories: registered investment companies, other pooled investment vehicles, and other accounts. For each category, the number of accounts and total assets in the accounts where fees are based on performance are also indicated, as applicable. Unless noted otherwise, all information is provided as of April 30, 2025.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Portfolio Manager** | **Type of Account** | **Number of**<br>**Accounts**<br>**Managed** | **Total Assets<br>Managed<br>(Millions) ($)** | **Number of Accounts<br>Managed for which<br>Advisory Fee is<br>Performance-Based** | **Assets Managed for<br>which Advisory Fee<br>is<br>Performance-Based<br>(Millions) ($)** |
|  **ESG Emerging Markets Equity ETF** | **ESG Emerging Markets Equity ETF** | **ESG Emerging Markets Equity ETF** |  |  |  |
|  George D. Mussalli  | Registered<br> Investment<br> Companies | 2 | 298.8 | 0 | 0 |
|  | Other Pooled<br> Investment Vehicles | 12 | 14498.9 | 0 | 0 |
|  | Other Accounts | 52 | 10410.4 | 10 | 5243.2 |
|  Richard Tan  | Registered<br> Investment<br> Companies | 1 | 235.1 | 0 | 0 |
|  | Other Pooled<br> Investment Vehicles | 5 | 8137.6 | 0 | 0 |
|  | Other Accounts | 32 | 3140.3 | 4 | 839.2 |
|  **ESG International Equity ETF** | **ESG International Equity ETF** | **ESG International Equity ETF** |  |  |  |
|  George D. Mussalli  | Registered<br> Investment<br> Companies | 2 | 107.0 | 0 | 0 |
|  | Other Pooled<br> Investment Vehicles | 12 | 14498.9 | 0 | 0 |
|  | Other Accounts | 52 | 10410.4 | 10 | 5243.2 |

---

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  Richard Tan  | Registered<br> Investment<br> Companies | 1 | 43.2 | 0 | 0 |
|  | Other Pooled<br> Investment Vehicles | 5 | 8137.6 | 0 | 0 |
|  | Other Accounts | 32 | 3140.3 | 4 | 839.2 |

---

#### Compensation of portfolio managers
All PanAgora Asset Management, Inc. ("PanAgora") investment professionals receive industry competitive salaries (based on an annual benchmarking study) and have the opportunity to be rewarded with meaningful performance-based annual bonuses. All employees of PanAgora are evaluated by comparing their performance against tailored and specific objectives. These goals are developed and monitored through the cooperation of employees and their immediate supervisors. Portfolio managers have specific goals regarding the investment performance of the accounts they manage and not revenue associated with these accounts. Long-term investment performance is typically assessed based on performance over multiple time periods against competitors or, for certain strategies, against other relevant investment benchmarks. Actual incentive compensation may be higher or lower than the target, based on individual, group, and subjective performance, and also reflect the performance of PanAgora as a firm. Such targets are reviewed each year to adjust for changes in responsibility and market conditions.

In addition, certain PanAgora employees own non-voting interests in PanAgora via PanAgora's management equity plan. Assuming all employee stock and options are issued and exercised, up to 20% of the economic interests in PanAgora can be owned, in the aggregate, by PanAgora employees. To ensure the retention benefit of the plan, the ownership is subject to a vesting schedule. The ownership is primarily shared by members of the senior management team as well as senior investment and research professionals.

#### Portfolio managers' securities ownership
The table below identifies ownership of equity securities of the Fund by the portfolio managers responsible for the day-to-day management of the Fund as of April 30, 2025.

---

| | |
|:---|:---|
| Portfolio Managers<br>| Dollar Range of Ownership of Securities ($) <br>|
|  **ESG Emerging Markets Equity ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; George D. Mussalli |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Richard Tan |  |
|  **ESG International Equity ETF** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; George D. Mussalli | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $100001 - $500000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Richard Tan |  |

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See "Management—Portfolio Transactions—Potential conflicts of interest in managing multiple accounts" in Part II of this SAI for information on how the Investment Manager addresses potential conflicts of interest resulting from an individual's management of more than one account.

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#### SECURITIES LENDING ACTIVITIES
The Fund did not participate in any securities lending activities for the fiscal year ended April 30, 2025.

#### FINANCIAL STATEMENTS
The Fund's Form N-CSR for the fiscal year ended April 30, 2025

([https://www.sec.gov/ix?doc=/Archives/edgar/data/1845809/000092881625000754/tsr-20250430.htm](http://www.sec.gov/Archives/edgar/data/../../../ix?doc=/Archives/edgar/data/1845809/000092881625000754/tsr-20250430.htm),

[https://www.sec.gov/ix?doc=/Archives/edgar/data/1845809/000092881625000755/tsr-20250430.htm](http://www.sec.gov/Archives/edgar/data/../../../ix?doc=/Archives/edgar/data/1845809/000092881625000755/tsr-20250430.htm)) contains the Fund's audited financial statements, accompanying notes and the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, all of which are incorporated by reference into this SAI. These audited financial statements are available free of charge upon request by calling the Fund at 1-800-225-1581.

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Throughout this SAI, references to the fund's investment manager (the "Investment Manager") shall refer to the entity indicated for each fund in the table below:

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp; **Investment**<br> **Manager** | Franklin Advisers, Inc.<br> ("Franklin Advisers") | Putnam Investment Management, LLC ("Putnam Management") |
| &nbsp;&nbsp;&nbsp;**Funds** | Putnam ESG Core Bond ETF<br> Putnam ESG High Yield ETF<br> Putnam ESG Ultra Short ETF | Putnam BDC Income ETF<br> Putnam BioRevolution<sup>TM</sup> ETF<br> Putnam Emerging Markets Ex-China ETF<br> Putnam PanAgora ESG Emerging Markets Equity ETF<br> Putnam PanAgora ESG International Equity ETF |

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#### THE PUTNAM ETFS

#### STATEMENT OF ADDITIONAL INFORMATION ("SAI")

#### PART II

#### GENERAL DESCRIPTION OF THE FUNDS
Each fund is an actively managed exchange-traded fund ("ETF"). Each fund issues and redeems shares on a continuous basis at net asset value per share ("NAV") in aggregations of a specified number of shares called "Creation Units." Creation Units are generally issued in exchange for portfolio securities and/or cash. Shares are listed and traded on an exchange. Shares trade in the secondary market at market prices that may differ from the shares' NAV. Shares are not individually redeemable, but are redeemable only in Creation Unit aggregations, also in exchange for portfolio securities and/or cash. Shareholders who are not Authorized Participants (as defined herein), therefore, will not be able to purchase or redeem shares directly with or from a fund. Instead, most shareholders who are not Authorized Participants will buy and sell shares in the secondary market through a broker.

#### BUYING AND SELLING SHARES

#### Book-Entry Only System
The Depository Trust Company ("DTC") acts as securities depository for the shares. Shares of each fund are represented by securities registered in the name of DTC or its nominee and deposited with, or on behalf of, DTC. Certificates will not be issued for shares.

DTC, a limited-purpose trust company, was created to hold securities of its participants and to facilitate the clearance and settlement of securities transactions among DTC participants in such securities through electronic book-entry changes in accounts of the DTC participants, thereby eliminating the need for physical movement of securities certificates. DTC participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations, some of whom (and/or their representatives) own DTC. Access to the DTC system is also available to others such as banks, brokers, dealers, and trust companies that clear through or maintain a custodial relationship with a DTC participant, either directly or indirectly.

Beneficial ownership of shares is limited to DTC participants and persons holding interests through DTC participants. Ownership of beneficial interests in shares (owners of beneficial interests are referred to herein as Beneficial Owners) is shown on, and the transfer of ownership is effected only through, records maintained by DTC (with respect to DTC participants) and on the records of DTC participants (with respect to indirect DTC participants and Beneficial Owners that are not DTC participants). Beneficial Owners will receive from or through a DTC participant a written confirmation relating to their purchase of shares.

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Conveyance of all notices, statements and other communications to Beneficial Owners is effected as follows. Pursuant to the Depositary Agreement between the trust and DTC, DTC is required to make available to the trust upon request and for a fee to be charged to the trust a listing of the shares of each fund held by each DTC participant. The trust shall inquire of each such DTC participant as to the number of Beneficial Owners holding fund shares, directly or indirectly, through such DTC participant. The trust shall provide each such DTC participant with copies of such notice, statement or other communication, in such form, number and at such place as such DTC participant may reasonably request, in order that such notice, statement or communication may be transmitted by such DTC participant, directly or indirectly, to such Beneficial Owners. In addition, the trust shall pay to each such DTC participant a fair and reasonable amount as reimbursement for the expenses attendant to such transmittal, all subject to applicable statutory and regulatory requirements.

Share distributions shall be made to DTC or its nominee, Cede & Co., as the registered holder of all shares. DTC or its nominee, upon receipt of any such distributions, shall credit immediately DTC participants' accounts with payments in amounts proportionate to their respective beneficial interests in shares of each fund as shown on the records of DTC or its nominee. Payments by DTC participants to indirect DTC participants and Beneficial Owners of shares held through such DTC participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in a "street name," and will be the responsibility of such DTC participants.

The trust has no responsibility or liability for any aspect of the records relating to or notices to Beneficial Owners, or payments made on account of beneficial ownership interests in such shares, or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests, or for any other aspect of the relationship between DTC and the DTC participants or the relationship between such DTC participants and the indirect DTC participants and Beneficial Owners owning through such DTC participants.

DTC may decide to discontinue providing its service with respect to shares at any time by giving reasonable notice to the trust and discharging its responsibilities with respect thereto under applicable law. Under such circumstances, the trust shall take action either to find a replacement for DTC to perform its functions at a comparable cost or, if such a replacement is unavailable, to issue and deliver printed certificates representing ownership of shares, unless the trust makes other arrangements with respect thereto satisfactory to the listing exchange.

#### Creation Units
The trust issues and redeems shares of each fund only in Creation Unit aggregations on a continuous basis through Franklin Distributors, LLC ("Franklin Distributors"), the Fund's distributor, without a sales load, at its NAV next determined after receipt, on any Business Day (as defined herein), of an order in proper form. An Authorized Participant that is not a "qualified institutional buyer," as such term is defined under Rule 144A of the 1933 Act, will not be able to receive, as part of a redemption, restricted securities eligible for resale under Rule 144A.

A "Business Day" with respect to each fund is any day on which the listing exchange or the NYSE is open for business. As of the date of the prospectus, the listing exchange and the NYSE observe the following holidays: New Year's Day, Martin Luther King, Jr. Day, President's Day (Washington's Birthday) (U.S.), Good Friday, Memorial Day, Juneteenth National Independence Day, Independence Day (U.S.), Labor Day (U.S.), Thanksgiving Day (U.S.), and Christmas Day.

To be eligible to place orders to purchase a Creation Unit of each fund, an entity must be an "Authorized Participant" which is a member or participant of a clearing agency registered with the SEC, which has a written agreement with Franklin Distributors, the fund's distributor, that allows the Authorized Participant to place orders for the purchase and redemption of Creation Units ("Participant Agreement"). All shares of each fund, however created, will be entered on the records of DTC in the name of Cede & Co. for the account of a DTC participant.

Each fund reserves the right to adjust the prices of fund shares and the number of shares in a Creation Unit in the future to maintain convenient trading ranges for investors. Any adjustments would be accomplished through stock splits or reverse stock splits, which would have no effect on the net assets of each fund.

#### Portfolio Deposit
The consideration for purchase of a Creation Unit generally consists of an in-kind deposit of a portfolio of securities ("Deposit Securities") designated by a fund (or in certain circumstances, cash in lieu of certain Deposit Securities) together with a deposit

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of a specified cash payment ("Cash Component") computed as described herein. Alternatively, each fund may issue and redeem Creation Units in exchange for a specified all-cash payment ("Cash Deposit"). Together, the Deposit Securities (including any cash in lieu amounts) and the Cash Component or, alternatively, the Cash Deposit, constitute the "Portfolio Deposit," which represents the minimum initial and subsequent investment amount for a Creation Unit. In the event each fund requires Deposit Securities (including any cash in lieu amounts) and a Cash Component in consideration for purchasing a Creation Unit, the function of the Cash Component is to compensate for any differences between the NAV per Creation Unit and the Deposit Amount (as defined below). The Cash Component would be an amount equal to the difference between the NAV of the shares (per Creation Unit) and the "Deposit Amount," which is an amount equal to the market value of the Deposit Securities. If the Cash Component is a positive number (the NAV per Creation Unit exceeds the Deposit Amount), the Authorized Participant will deliver the Cash Component. If the Cash Component is a negative number (the NAV per Creation Unit is less than the Deposit Amount), the Authorized Participant will receive the Cash Component. Computation of the Cash Component excludes any stamp duty or other similar fees and expenses payable upon transfer of beneficial ownership of the Deposit Securities, which shall be the sole responsibility of the Authorized Participant.

A fund may determine, upon receiving a purchase order from an Authorized Participant, to accept a basket of securities or cash that differs from Deposit Securities or to permit the substitution of an amount of cash (i.e., a "cash-in-lieu" amount) to be added to the Cash Component to replace any Deposit Security. In cases where a fund purchases portfolio securities with cash, the Authorized Participant will reimburse the fund for, among other things, any difference between the market value at which the securities were purchased by the fund and the cash in lieu amount (which amount, at the Investment Manager's discretion, may be capped), applicable registration fees and taxes. Brokerage commissions incurred in connection with a fund's acquisition of Deposit Securities will be at the expense of the fund and will affect the value of all shares of the fund; but the Investment Manager may adjust the transaction fee to the extent the composition of the Deposit Securities changes or cash in lieu is added to the Cash Component to protect ongoing shareholders.

#### Procedures for Creation Unit Purchases
All purchase orders must be placed for one or more Creation Units. All orders to purchase Creation Units must be received by Franklin Distributors or its agent no later than the closing time of regular trading hours on the listing exchange or the NYSE (ordinarily 4:00 p.m. Eastern Time) (the Closing Time) or at an earlier time set forth in the Participant Agreement or otherwise provided to all Authorized Participants on the date such order is placed in order for the creation of Creation Units to be effected based on the NAV of shares of each fund as next determined on such date after receipt of the order in proper form. The date on which an order to purchase Creation Units (or an order to redeem Creation Units as discussed below) is placed is referred to as the "Transmittal Date." Orders must be transmitted by an Authorized Participant by telephone or other transmission method acceptable to Franklin Distributors pursuant to procedures set forth in the Participant Agreement. Severe economic or market disruptions or changes, or telephone or other communications failure may impede the ability to reach Franklin Distributors or an Authorized Participant.

All orders to purchase Creation Units shall be placed with an Authorized Participant, as applicable, in the form required by such Authorized Participant. In addition, in the event an Authorized Participant places an order on behalf of an investor, the Authorized Participant may request the investor to make certain representations or enter into agreements with respect to the order, including payments of cash to pay the Cash Component, when required. Investors should be aware that their particular broker may not have executed a Participant Agreement and that, therefore, orders to purchase Creation Units have to be placed by the investor's broker through an Authorized Participant that has executed a Participant Agreement. In such cases there may be additional charges to such investor. At any given time, there may be only a limited number of broker-dealers that have executed a Participant Agreement.

Those placing orders to purchase Creation Units should afford sufficient time to permit proper submission of the order to Franklin Distributors or its agent prior to the applicable deadlines on the Transmittal Date. Authorized participants may ascertain the deadlines applicable to DTC and the Federal Reserve Bank wire system by contacting the operations department of the broker or depository institution effecting such transfer of Deposit Securities and Cash Component.

Portfolio Deposits must be delivered through the Federal Reserve System (for cash and government securities) and through DTC (for corporate securities) by an Authorized Participant that has executed a Participant Agreement. The Portfolio Deposit transfer must be ordered by the Authorized Participant on the Transmittal Date in a timely fashion so as to ensure the delivery of the requisite number of Deposit Securities through DTC to the account of each fund by no later than 1:00 p.m. Eastern Time of the next Business Day immediately following the Transmittal Date. In certain cases, Authorized Participants will purchase and

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redeem Creation Units of each fund on the same Transmittal Date. In these instances, each fund reserves the right to settle these transactions on a net basis.

All questions as to the number of Deposit Securities to be delivered, and the validity, form and eligibility (including time of receipt) for the deposit of any tendered securities, will be determined by each fund, whose determination shall be final and binding. For purchase orders composed solely of a Cash Component, the amount of cash equal to the Cash Component must be transferred directly to each fund's custodian through the Federal Reserve Bank wire transfer system in a timely manner so as to be received by each fund's custodian no later than 10:00 a.m. Eastern Time on the next Business Day immediately following such Transmittal Date. An order to purchase Creation Units is deemed received by Franklin Distributors on the Transmittal Date if (i) such order is received by Franklin Distributors or its agent not later than the Closing Time, or 3:00 p.m. Eastern Time in the case of nonconforming orders, on such Transmittal Date; and (ii) all other procedures set forth in the Participant Agreement are properly followed. However, if each fund's custodian does not receive the required Deposit Securities together with the associated Cash Component by 1:00 p.m. or, with respect to purchase orders composed solely of a Cash Component, the Cash Component by 10:00 a.m. on the next Business Day immediately following the Transmittal Date, such order will be deemed not in proper form and canceled. Upon written notice to Franklin Distributors, such canceled order may be resubmitted the following Business Day using a Portfolio Deposit as newly constituted to reflect the next calculated NAV of each fund. The delivery of Creation Units so purchased will occur not later than the second (2nd) Business Day following the day on which the purchase order is deemed received by Franklin Distributors.

Franklin Distributors or its agent will inform the transfer agent, the Investment Manager and each fund's custodian upon receipt of a purchase order. The custodian will then provide such information to the appropriate sub-custodian. The custodian will cause the sub-custodian to maintain an account into which the Deposit Securities (or the cash value of all or part of such securities, in the case of a cash purchase or "cash in lieu" amount) will be delivered. Deposit Securities must be delivered to an account maintained at the applicable local custodian. The trust must also receive, on or before the contractual settlement date, immediately available or same day funds estimated by the custodian to be sufficient to pay the Cash Component next determined after receipt in proper form of the purchase order, together with the purchase transaction fee described in Part I of this SAI.

Once the Trust has accepted a purchase order, the trust will confirm the issuance of a Creation Unit of a fund against receipt of payment, at such NAV as will have been calculated after receipt in proper form of such order. Franklin Distributors or its agent will then transmit a confirmation of acceptance of such order.

Creation Units will not be issued until the transfer of good title to the trust of the Deposit Securities and the payment of the Cash Component have been completed. When the sub-custodian has confirmed to the custodian that the required Deposit Securities (or the cash value thereof) have been delivered to the account of the relevant sub-custodian, Franklin Distributors and the Investment Manager will be notified of such delivery and the trust will issue and cause the delivery of the Creation Units.

Creation Units may be created in advance of receipt by each fund of all or a portion of the applicable Deposit Securities as described below. In these circumstances, the initial deposit will have a value greater than the NAV of the shares on the date the order is placed in proper form since, in addition to available Deposit Securities, cash must be deposited in an amount equal to the sum of (i) the Cash Component (including any transaction fees), plus (ii) 105% of the market value of the undelivered Deposit Securities ("Additional Cash Deposit"). The order shall be deemed to be received on the Business Day on which the order is placed provided that the order is placed in proper form prior to 3:00 p.m. Eastern Time on such date and federal funds in the appropriate amount are deposited with each fund's custodian by 10:00 a.m. Eastern Time the following Business Day. If the order is not placed in proper form by 3:00 p.m. or federal funds in the appropriate amount are not received by 10:00 a.m. the next Business Day, then the order may be deemed to be rejected and the Authorized Participant shall be liable to each fund for losses, if any, resulting therefrom. An additional amount of cash shall be required to be deposited with each fund, pending delivery of the missing Deposit Securities to the extent necessary to maintain the Additional Cash Deposit with each fund in an amount at least equal to 105% of the daily marked to market value of the missing Deposit Securities. In the sole discretion of each fund following the Business Day on which the order was received a fund may use the cash on deposit to purchase the missing Deposit Securities. Authorized Participants will be liable to each fund for the costs incurred by each fund in connection with any such purchases. These costs will be deemed to include the amount by which the actual purchase price of the Deposit Securities exceeds the market value of such Deposit Securities on the day the purchase order was deemed received by Franklin Distributors plus the brokerage and related transaction costs associated with such purchases and the Authorized Participant shall be liable to the fund for any shortfall between the cost to the fund of purchasing any missing Deposit Securities and the

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value of the collateral. Each fund will return any unused portion of the Additional Cash Deposit once all of the missing Deposit Securities have been properly received by Franklin Distributors or purchased by each fund and deposited into each fund.

#### Acceptance of Purchase Orders
Each fund and Franklin Distributors reserve the right to reject or revoke acceptance of a creation order transmitted to it in respect to the fund, if, including but not limited to, the following conditions are present (i) the order is not in proper form; (ii) the investor(s), upon obtaining the shares ordered, would own 80% or more of the currently outstanding shares of each fund; (iii) acceptance of the Deposit Securities would have certain adverse tax consequences to each fund; (iv) acceptance of the Portfolio Deposit would, in the opinion of the fund, be unlawful; or (v) in the event that circumstances outside the control of each fund, make it impossible to process creation orders for all practical purposes. Examples of such circumstances include, without limitation, acts of God; public service or utility problems such as earthquakes, fires, floods, extreme weather conditions, and power outages resulting in telephone, telecopy, and computer failures; wars; civil or military disturbances, including acts of civil or military authority or governmental actions; terrorism; sabotage; epidemics; riots; labor disputes; market conditions or activities causing trading halts; systems failures involving computer or other information systems affecting each fund, the Investment Manager, Franklin Distributors, DTC, NSCC, the transfer agent, or any other participant in the purchase process, and similar extraordinary events. Each fund and Franklin Distributors have the right to require information to determine beneficial share ownership for purposes of (ii) above should it so choose or to rely on a certification from a broker-dealer who is a member of the Financial Industry Regulatory Authority, Inc. as to the cost basis of Deposit Securities. Franklin Distributors or the fund shall notify a prospective purchaser of a Creation Unit and/or the Authorized Participant acting on the purchaser's behalf, of its rejection of the purchaser's order. Each fund, the transfer agent, and Franklin Distributors are under no duty, however, to verify or give notification of any defects or irregularities in any written order or in the delivery of a Portfolio Deposit, nor shall any of them incur any liability for the failure to give any such notification.

#### Redemption of Creation Units
Shares may be redeemed only in Creation Units at their NAV next determined after receipt of a redemption request in proper form by each fund through the transfer agent and only on a Business Day through an Authorized Participant that has entered into a Participant Agreement. Each fund generally will not redeem shares in amounts less than Creation Unit-size aggregations. Beneficial Owners must accumulate enough shares to constitute a Creation Unit in order to have such shares redeemed by each fund. There can be no assurance, however, that there will be sufficient liquidity in the public trading market at any time to permit assembly of a Creation Unit. Investors should expect to incur brokerage and other costs in connection with assembling a sufficient number of shares to constitute a redeemable Creation Unit.

The redemption proceeds for a Creation Unit may consist of a portfolio of securities (Fund Securities) – as announced by the Investment Manager, or its agent, on the Business Day of the request for redemption received in proper form – plus cash in an amount equal to the difference between the NAV of the shares being redeemed, as next determined after a receipt of the request in proper form, and the value of the Fund Securities ("Cash Redemption Amount"), less a redemption transaction fee and any variable fee as listed in Part I of this SAI. In the event that the Fund Securities have a value greater than the NAV of the shares being redeemed, a compensating cash payment to a fund equal to the differential plus the applicable redemption transaction fee is required to be made by or through an Authorized Participant by the redeeming shareholder. Notwithstanding the foregoing, each fund will substitute a cash-in-lieu amount to replace any Fund Security that is a non-deliverable instrument. The amount of the cash paid out in such cases will be equivalent to the value of the instrument listed as a Fund Security.

The right of redemption may be suspended or the date of payment postponed with respect to each fund (i) for any period during which the NYSE is closed (other than customary weekend and holiday closings); (ii) for any period during which trading on the NYSE is suspended or restricted; (iii) for any period during which an emergency exists as a result of which disposal of the shares or determination of each fund's NAV is not reasonably practicable; or (iv) in such other circumstances as is permitted by the SEC.

Orders to redeem Creation Units must be delivered through an Authorized Participant. An order to redeem Creation Units is deemed received by each fund on the Transmittal Date if (i) such order is received in proper form by the transfer agent not later than the Closing Time (or one hour prior to the Closing Time (ordinarily 3:00 p.m. Eastern Time) for nonconforming orders) on such Transmittal Date; (ii) such order is accompanied or followed by the requisite number of shares of each fund and the Cash Redemption Amount specified in such order, which delivery must be made through DTC to each fund's custodian no later than 1:00 p.m., for the shares, and 3:00 p.m., for the Cash Redemption Amount, Eastern Time on the next Business Day following

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such Transmittal Date (the "DTC Cut-Off-Time"); and (iii) all other procedures set forth in the Participant Agreement are properly followed. The requisite Fund Securities and the Cash Redemption Amount will generally be transferred by the second (2nd) Business Day following the date on which such request for redemption is deemed received, which will generally be no more than seven (7) days after such request for redemption but may be up to fifteen days for funds that invest in foreign securities. In certain cases, Authorized Participants will redeem and purchase Creation Units of each fund on the same Transmittal Date. In these instances, each fund reserves the right to settle these transactions on a net basis.

If each fund determines, based on information available to each fund when a redemption request is submitted by an Authorized Participant, that: (i) the short interest of each fund in the marketplace (*i.e.,* the number of shares of the fund that have been sold short but have not yet been covered or closed out) is greater than or equal to 100%; and (ii) the orders in the aggregate from all Authorized Participants redeeming shares on a Business Day represent 25% or more of the outstanding shares of each fund, such Authorized Participant will be required to verify to each fund the accuracy of its representations that are deemed to have been made by submitting a request for redemption. If, after receiving notice of the verification requirement, the Authorized Participant does not verify the accuracy of its representations that are deemed to have been made by submitting a request for redemption in accordance with this requirement, its redemption request will be considered not to have been received in proper form.

To the extent contemplated by an Authorized Participant's agreement, in the event the Authorized Participant has submitted a redemption request in proper form but is unable to transfer all or part of the Creation Units to be redeemed to Franklin Distributors, on behalf of each fund, at or prior to the closing time of regular trading on the listing exchange on the date such redemption request is submitted, Franklin Distributors will nonetheless accept the redemption request in reliance on the undertaking by the Authorized Participant to deliver the missing fund shares as soon as possible, which undertaking shall be secured by the Authorized Participant's delivery and maintenance of collateral consisting of cash having a value (marked to market daily) at least equal to 105% of the value of the missing fund shares. The current procedures for collateralization of missing shares require, among other things, that any cash collateral shall be in the form of U.S. dollars in immediately-available funds and shall be held by each fund and marked to market daily, and that the fees of each fund and any sub-custodians in respect of the delivery, maintenance, and redelivery of the cash collateral shall be payable by the Authorized Participant. The Participant Agreement will permit each fund to purchase the missing fund shares or acquire the Deposit Securities underlying such shares at any time and will subject the Authorized Participant to liability for any shortfall between the cost to each fund of purchasing such shares or Deposit Securities and the value of the collateral.

The calculation of the value of the Fund Securities and the Cash Redemption Amount to be delivered upon redemption will be made by the Investment Manager according to the procedures set forth in the section entitled "Determination of Net Asset Value" computed on the Business Day on which a redemption order is deemed received by the transfer agent. Therefore, if a conforming redemption order in proper form is submitted to the transfer agent by an Authorized Participant not later than Closing Time, or 3:00 p.m. Eastern Time in the case of nonconforming orders, on the Transmittal Date, and the requisite number of shares of each fund are delivered to each fund's custodian prior to the DTC Cut-Off-Time, then the value of the Fund Securities and the Cash Redemption Amount to be delivered will be determined by the Bank of New York Mellon on such Transmittal Date. If, however, a conforming redemption order is submitted to the transfer agent by an Authorized Participant not later than the Closing Time, or 3:00 p.m. Eastern Time in the case of nonconforming orders, on the Transmittal Date but either (i) the requisite number of shares of each fund and the Cash Redemption Amount are not delivered by the DTC Cut-Off-Time as described above on the next Business Day following the Transmittal Date, or (ii) the redemption order is not submitted in proper form, then the redemption order will not be deemed received as of the Transmittal Date. In such case, the value of the Fund Securities and the Cash Redemption Amount to be delivered will be computed as of the Closing Time on the Business Day that such order is deemed received by the transfer agent, i.e., the Business Day on which the shares of each fund are delivered through DTC to Franklin Distributors by the DTC Cut-Off-Time on such Business Day pursuant to a properly submitted redemption order.

A fund may in its discretion exercise its option to redeem shares in cash, and the redeeming Beneficial Owner will be required to receive its redemption proceeds in cash. In addition, an investor may request a redemption in cash that each fund may, in its sole discretion, permit. In either case, the investor will receive a cash payment equal to the NAV of its shares based on the NAV of shares of each fund next determined after the redemption request is received in proper from (minus a redemption transaction fee and additional charge for requested cash redemptions specified above, to offset each fund's brokerage and other transaction costs associated with the disposition of Fund Securities). In addition, each fund reserves the right to honor a redemption request by delivering a basket of securities or cash that differs from the Fund Securities.

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Redemption of shares for Fund Securities will be subject to compliance with applicable federal and state securities laws and each fund (whether or not it otherwise permits cash redemptions) reserves the right to redeem Creation Units for cash to the extent that each fund could not lawfully deliver specific Fund Securities upon redemptions or could not do so without first registering the Fund Securities under such laws. An Authorized Participant or a Beneficial Owner for which it is acting subject to a legal restriction with respect to a particular stock included in the Fund Securities applicable to the redemption of a Creation Unit may be paid an equivalent amount of cash. The Authorized Participant may request the redeeming Beneficial Owner of the shares to complete an order form or to enter into agreements with respect to such matters as compensating cash payment.

In connection with taking delivery of shares for Fund Securities upon redemption of Creation Units, a redeeming shareholder or entity acting on behalf of a redeeming shareholder must maintain appropriate custody arrangements with a qualified broker-dealer, bank or other custody providers in each jurisdiction in which any of the Fund Securities are customarily traded, to which account such Fund Securities will be delivered. If neither the redeeming shareholder nor the entity acting on behalf of a redeeming shareholder has appropriate arrangements to take delivery of the Fund Securities in the applicable foreign jurisdiction and it is not possible to make other such arrangements, or if it is not possible to effect deliveries of the Fund Securities in such jurisdictions, the trust may, in its discretion, exercise its option to redeem such shares in cash, and the redeeming shareholder will be required to receive its redemption proceeds in cash.

Deliveries of redemption proceeds generally will be made within two Business Days. Due to the schedule of holidays in certain countries, however, the delivery of redemption proceeds may take longer than two Business Days after the day on which the redemption request is received in proper form. In such cases, the local market settlement procedures will not commence until the end of the local holiday periods.

#### Creation/Redemption Transaction Fees
The funds generally impose a "Transaction Fee" on investors purchasing or redeeming Creation Units. The Transaction Fee will be limited to amounts that have been determined by the Investment Manager to be appropriate. The purpose of the Transaction Fee is to protect the existing shareholders of the funds from the dilutive costs associated with the purchase and redemption of Creation Units. Where a fund permits cash creations (or redemptions) or cash in lieu of depositing one or more Deposit Securities, the purchaser (or redeemer) may be assessed a higher Transaction Fee to offset the transaction cost to a fund of buying (or selling) those particular Deposit Securities. To the extent a purchase/redemption transaction consists of cash and/or in-kind securities, the standard Transaction Fee applies to in-kind purchases and redemptions of creation units and an additional Transaction Fee may also be imposed. Each fund reserves the right to not impose the additional Transaction Fee or to vary the amount of the additional Transaction Fee, depending on the materiality of the fund's actual transaction costs incurred or where the Adviser believes that not imposing or varying the additional Transaction Fee would be in the fund's interest. Transaction Fees associated with the redemption of Creation Units will not exceed 2% of the value of shares redeemed. To the extent the fund cannot recoup the amount of transaction costs incurred in connection with a redemption from the redeeming shareholder because of the 2% cap or otherwise, those transaction costs will be borne by the fund's remaining shareholders (including, potentially, increased taxable income in respect of the fund, particularly if the redemption consists solely or partially of cash) and negatively affect the fund's performance. Actual transaction costs may vary depending on the time of day an order is received or the nature of the securities. Investors bear the costs of transferring Deposit Securities or Fund Securities to/from each fund to/from their account or on their order. See "Creation/Redemption Transaction Fees" in Part I of this SAI for information on standard Transaction Fees and maximum additional Transaction Fees.

#### Additional Intermediary Payments
For purposes of this section the term "intermediary" includes any broker, dealer, bank, bank trust department, registered investment advisor, financial planner, retirement plan administrator and any other institution that offers shares of the funds to its customers.

The Investment Manager and/or its affiliates pay additional compensation to selected intermediaries under the categories described below. These categories are not mutually exclusive, and a single intermediary may receive payments under all categories. These payments may create an incentive for an intermediary firm or its representatives to recommend or offer shares of the fund or other Putnam funds to its customers. These additional payments are made pursuant to agreements with intermediaries and do not change the price paid by investors for the purchase of a share or the amount a fund will receive as proceeds from such sales or the distribution (12b-1) fees, if any, and the expenses paid by the fund as shown under the heading "Fees and Expenses" in the prospectus.

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**Marketing Support Payments.** The Investment Manager and/or its affiliates make payments to certain intermediaries for marketing support services. These payments are individually negotiated with each intermediary firm, taking into account the marketing support services provided by the intermediary, including business planning assistance, educating intermediary personnel about the Putnam funds and shareholder financial planning needs, placement on the intermediary's preferred or recommended fund company list, access to sales meetings, sales representatives and management representatives of the intermediary, market data, as well as the size of the intermediary's relationship with the Investment Manager.

No intermediaries received marketing support payments from the Investment Manager and its affiliates during the calendar year ended December 31, 2024. Intermediaries may receive marketing support payments in 2025 and in future years from the Investment Manager and/or its affiliates. You can ask your intermediary about any payments it receives from the Investment Manager and/or its affiliates.

**Program Servicing Payments.** The Investment Manager and/or its affiliates also make payments to certain intermediaries that sell shares of the Putnam funds through intermediary platforms and other investment programs to compensate intermediaries for a variety of services they provide. An intermediary may perform program services itself or may arrange with a third party to perform program services. In addition to shareholder recordkeeping, reporting, or transaction processing, program services may include services rendered in connection with intermediary platform development and maintenance, fund/investment selection and monitoring, or other similar services.

The following intermediaries (and such intermediaries' respective affiliates) received program servicing payments from the Investment Manager and its affiliates during the calendar year ended December 31, 2024:

Charles Schwab & Co., Inc.

Cetera Financial Group, Inc.

Fidelity Brokerage Services, LLC

National Financial Services LLC, and

UBS Financial Services Inc.

Additional or different intermediaries may also receive program servicing payments in 2025 and in future years from the Investment Manager and/or its affiliates. Any additions, modifications or deletions to the list of intermediaries identified above that have occurred since December 31, 2024 are not reflected. You can ask your intermediary about any payments it receives from the Investment Manager and/or its affiliates.

**Other Payments**. From time to time, the Investment Manager and/or its affiliate, at its expense, may provide additional compensation to intermediaries that sell or arrange for the sale of shares of the fund to the extent not prohibited by laws or the rules of any self-regulatory agency. Such compensation provided by the Investment Manager and/or its affiliate may include financial assistance to intermediaries that enables the Investment Manager and/or its affiliate to participate in and/or present at intermediary-sponsored conferences or seminars, sales or training programs for invited registered representatives and other intermediary employees, intermediary entertainment, and other intermediary-sponsored events, and travel expenses, including lodging incurred by registered representatives and other employees in connection with prospecting, retention and due diligence trips. The Investment Manager and/or its affiliates make payments for entertainment events it deems appropriate, subject to internal guidelines and applicable law. These payments may vary upon the nature of the event.

#### MISCELLANEOUS INVESTMENTS, INVESTMENT PRACTICES AND RISKS
As noted in the prospectus, in addition to the main investment strategies and the principal risks described in the prospectus, the fund may employ other investment practices and may be subject to other risks, which are described below. Because the following is a combined description of investment strategies of all series of Putnam ETF Trust that disclose their holdings daily, certain matters described herein may not apply to your fund. Unless a strategy or policy described below is specifically prohibited or limited by the investment restrictions discussed in the fund's prospectus or in this SAI, or by applicable law, the fund may engage in each of the practices described below without limit. This section contains information on the investments and investment practices listed below. With respect to funds for which Franklin Templeton Investment Management Limited ("FTIML"), Franklin Advisers, Putnam Management, and/or PanAgora Asset Management, Inc. ("PanAgora") serve as sub-

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adviser (as described in the fund's prospectus), references to the Investment Manager in this section include FTIML, Franklin Advisers, Putnam Management, and/or PanAgora, as appropriate.

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| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;Bank Loans, Loan Participations, and Assignments | Market Risk |
| &nbsp;&nbsp;&nbsp;Benchmark Reference Rate Risk | Master Limited Partnerships (MLPs) |
| &nbsp;&nbsp;&nbsp;Borrowing and Other Forms of Leverage | Money Market Instruments |
| &nbsp;&nbsp;&nbsp;Collateralized Debt and Loan Obligations | Mortgage-backed and Asset-backed Securities |
| &nbsp;&nbsp;&nbsp;Commodities and Commodity-Related Investments | Options on Securities |
| &nbsp;&nbsp;&nbsp;Derivatives | Preferred Stocks and Convertible Securities |
| &nbsp;&nbsp;&nbsp;ESG Considerations | Private Placements and Restricted Securities |
| &nbsp;&nbsp;&nbsp;Exchange-Traded Notes | Real Estate Investment Trusts (REITs) |
| &nbsp;&nbsp;&nbsp;Floating Rate and Variable Rate Demand Notes | Redeemable Securities |
| &nbsp;&nbsp;&nbsp;Foreign Currency Transactions | Repurchase Agreements |
| &nbsp;&nbsp;&nbsp;Foreign Investments and Related Risks | Securities of Other Investment Companies |
| &nbsp;&nbsp;&nbsp;Forward Commitments and Dollar Rolls | Short Sales |
| &nbsp;&nbsp;&nbsp;Futures Contracts and Related Options | Short-Term Trading |
| &nbsp;&nbsp;&nbsp;Hybrid Instruments | Special Purpose Acquisition Companies |
| &nbsp;&nbsp;&nbsp;Illiquid Investments | Structured Investments |
| &nbsp;&nbsp;&nbsp;Inflation-Protected Securities | Swap Agreements |
| &nbsp;&nbsp;&nbsp;Initial Public Offerings (IPOs) | Tax-exempt Securities |
| &nbsp;&nbsp;&nbsp;Inverse Floaters | Temporary Defensive Strategies |
| &nbsp;&nbsp;&nbsp;Large Shareholder Transaction Risk | Trade Policy |
| &nbsp;&nbsp;&nbsp;Legal and Regulatory Risks Relating to Investment Strategy | Warrants |
| &nbsp;&nbsp;&nbsp;Lower-rated Securities | Zero-coupon and Payment-in-kind Bonds |

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#### Bank Loans, Loan Participations, and Assignments
The fund may invest in bank loans. Bank loans are typically senior debt obligations of borrowers (issuers) and, as such, are considered to hold a senior position in the capital structure of the borrower. These may include loans that hold the most senior position, that hold an equal ranking with other senior debt, or loans that are, in the judgment of the Investment Manager, in the category of senior debt of the borrower. This capital structure position generally gives the holders of these loans a priority claim on some or all of the borrower's assets in the event of a default. Many loans are either partially or fully secured by the assets of the borrower, and some impose restrictive covenants which must be met by the borrower, although these covenants have become less common, and the terms of covenants have eroded, in recent years. Loans are typically made by a syndicate of banks, represented by an agent bank which has negotiated and structured the loan and which is responsible generally for collecting interest, principal, and other amounts from the borrower on its own behalf and on behalf of the other lending institutions in the syndicate, and for enforcing its and their other rights against the borrower. Each of the lending institutions, including the agent bank, lends to the borrower a portion of the total amount of the loan, and retains the corresponding interest in the loan.

By purchasing a loan, the fund acquires some or all of the interest of a bank or other lending institution in a loan to a particular borrower. The fund may acquire a loan interest directly by acting as a member of the original lending syndicate. The fund may also invest in a loan in other ways, including through novations, assignments and participating interests. In a novation, the fund assumes all of the rights of a lending institution in a loan, including the right to receive payments of principal and interest and other amounts directly from the borrower and to enforce its rights as a lender directly against the borrower. The fund assumes the position of a co-lender with other syndicate members. In an assignment, the fund purchases a portion of a lender's interest in a loan. In this case, the fund may be required generally to rely upon the assigning bank to demand payment and enforce its rights against the borrower, but would otherwise be entitled to all of such bank's rights in the loan. The fund may also purchase a participating interest in a portion of the rights of a lending institution in a loan. Participation interests typically result in a contractual relationship only with the lending institution, not with the borrower. In such case, the fund will be entitled to receive

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payments of principal, interest and premium, if any, but will not generally be entitled to enforce its rights directly against the agent bank or the borrower, and must rely for that purpose on the lending institution. In addition, with a participation interest, the fund generally will have no rights of set-off against the borrower, and the fund may not directly benefit from the collateral supporting the loan in which it has purchased the participation.

The fund's ability to receive payments of principal and interest and other amounts in connection with loan interests held by it will depend primarily on the financial condition of the borrower (and, in some cases, the lending institution from which it purchases the loan). Adverse changes in the creditworthiness of the borrower may affect the borrower's ability to pay principal and interest, and borrowers that are in bankruptcy or restructuring may never pay off their indebtedness, or may pay only a small fraction of the amount owed. The value of collateral, if any, securing a loan can decline, or may be insufficient to meet the borrower's obligations or difficult to liquidate. In addition, the fund's access to collateral may be limited by bankruptcy or other insolvency laws. The failure by the fund to receive scheduled interest or principal payments on a loan would adversely affect the income of the fund and would likely reduce the value of its assets, which would be reflected in a reduction in the fund's net asset value. Banks and other lending institutions generally perform a credit analysis of the borrower before originating a loan or participating in a lending syndicate. In selecting the loan interests in which the fund will invest, however, the Investment Manager will not rely solely on that credit analysis, but will perform its own investment analysis of the borrowers. The Investment Manager's analysis may include consideration of the borrower's financial strength and managerial experience, debt coverage, additional borrowing requirements or debt maturity schedules, changing financial conditions, and responsiveness to changes in business conditions and interest rates. The Investment Manager will generally not have access to non-public information to which other investors in syndicated loans may have access. Because loans in which the fund may invest are not generally rated by independent credit rating agencies, a decision by the fund to invest in a particular loan will depend almost exclusively on the Investment Manager's, and the original lending institution's, credit analysis of the borrower. Investments in loans may be of any quality, including "distressed" loans, and will be subject to the fund's credit quality policy. The loans in which the fund may invest include those that pay fixed rates of interest and those that pay floating rates – *i.e.*, rates that adjust periodically based on a known lending rate, such as a bank's prime rate.

The fund will in many cases be required to rely upon the lending institution from which it purchases the loan interest to collect and pass on to the fund such payments and to enforce the fund's rights under the loan. This may subject the fund to greater delays, expenses, and risks than if the fund could enforce its rights directly against the borrower. For example, an insolvency, bankruptcy or reorganization of the lending institution may delay or prevent the fund from receiving principal, interest and other amounts with respect to the underlying loan. When the fund is required to rely upon a lending institution to pay to the fund principal, interest and other amounts received by it, the Investment Manager will also evaluate the creditworthiness of the lending institution.

The borrower of a loan in which the fund holds an interest may, either at its own election or pursuant to terms of the loan documentation, prepay amounts of the loan from time to time. The rate of such prepayments may be affected by, among other things, general business and economic conditions, as well as the financial status of the borrower. Prepayment would cause the actual duration of a loan to be shorter than its stated maturity. There is no assurance that the fund will be able to reinvest the proceeds of any loan prepayment at the same interest rate or on the same terms as those of the original loan.

Corporate loans in which the fund may invest are generally made to finance internal growth, mergers, acquisitions, stock repurchases, leveraged buy-outs and other corporate activities. A significant portion of the corporate loan interests purchased by the fund may represent interests in loans made to finance highly leveraged corporate acquisitions, known as "leveraged buy-out" transactions, leveraged recapitalization loans and other types of acquisition financing. The highly leveraged capital structure of the borrowers in such transactions may make such loans especially vulnerable to adverse changes in economic or market conditions.

The market for bank loans may not be highly liquid. In addition, loan interests generally are subject to restrictions on transfer, and only limited opportunities may exist to sell such interests in secondary markets. As a result, the fund may be unable to sell loan interests at a time when it may otherwise be desirable to do so or may be able to sell them only at a price that is less than their fair market value. The fund may hold investments in loans for a very short period of time when opportunities to resell the investments that the Investment Manager believes are attractive arise.

Certain of the loan interests acquired by the fund may involve letters of credit, revolving credit facilities, or other standby financing commitments obligating the fund to make additional loans upon demand by the borrower pursuant to the terms specified in the loan documentation. This obligation may have the effect of requiring the fund to increase its investment in a

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borrower at a time when it would not otherwise have done so. To the extent that the fund is committed to make additional loans under the loan documentation, it will at all times set aside on its books liquid assets in an amount sufficient to meet such commitments.

Certain of the loan interests acquired by the fund may also involve loans made in foreign (*i.e*., non-U.S.) currencies. The fund's investment in such interests would involve the risks of currency fluctuations described in this SAI with respect to investments in the foreign securities.

With respect to its management of investments in bank loans, the Investment Manager will normally seek to avoid receiving material, non-public information ("Confidential Information") about the issuers of bank loans being considered for acquisition by the fund or held in the fund's portfolio. In many instances, borrowers may offer to furnish Confidential Information to prospective investors, and to holders, of the issuer's loans. The Investment Manager's decision not to receive Confidential Information may place the Investment Manager at a disadvantage relative to other investors in loans (which could have an adverse effect on the price the fund pays or receives when buying or selling loans). Also, in instances where holders of loans are asked to grant amendments, waivers or consent, the Investment Manager's ability to assess their significance or desirability may be adversely affected. For these and other reasons, it is possible that the Investment Manager's decision not to receive Confidential Information under normal circumstances could adversely affect the fund's investment performance.

Notwithstanding its intention generally not to receive material, non-public information with respect to its management of investments in loans, the Investment Manager may from time to time come into possession of material, non-public information about the issuers of loan interests that may be held in the fund's portfolio. Possession of such information may in some instances occur despite the Investment Manager's efforts to avoid such possession, but in other instances the Investment Manager may choose to receive such information (for example, in connection with participation in a creditors' committee with respect to a financially distressed issuer). As, and to the extent, required by applicable law, the Investment Manager's ability to trade in these loan interests for the account of the fund could potentially be limited by its possession of such information. Such limitations on the Investment Manager's ability to trade could have an adverse effect on the fund by, for example, preventing the fund from selling a loan interest that is experiencing a material decline in value. In some instances, these trading restrictions could continue in effect for a substantial period of time.

In some instances, other accounts managed by the Investment Manager or an affiliate may hold other securities issued by borrowers in whose loans the fund may hold an interest. These other securities may include, for example, debt securities that are subordinate to the loan interests held in the fund's portfolio, convertible debt or common or preferred equity securities. In certain circumstances, such as if the credit quality of the issuer deteriorates, the interests of holders of these other securities may conflict with the interests of the holders of the issuer's loans. In such cases, the Investment Manager may owe conflicting fiduciary duties to the fund and other client accounts. The Investment Manager will endeavor to carry out its obligations to all of its clients (including the fund) to the fullest extent possible, recognizing that in some cases certain clients may achieve a lower economic return, as a result of these conflicting client interests, than if the Investment Manager's client accounts collectively held only a single category of the issuer's securities.

The settlement period (the period between the execution of the trade and the delivery of cash to the purchaser) for some bank loan transactions may be significantly longer than the settlement period for other investments, and in some cases longer than seven days. Requirements to obtain the consent of the borrower and/or agent can delay or impede the fund's ability to sell bank loan interests and can adversely affect the price that can be obtained. It is possible that sale proceeds from bank loan transactions will not be available to meet redemption obligations, in which case the fund may be required to utilize other sources to meet the redemption obligations, such as cash balances or proceeds from the sale of its more liquid investments or investments with shorter settlement periods.

Some loan interests may not be considered "securities" for certain purposes under the federal securities laws, and, as a result, purchasers, such as the fund, may not be entitled to rely on the anti-fraud protections of the federal securities laws.

If legislation or federal or state regulators impose additional requirements or restrictions on the ability of financial institutions to make loans that are considered highly leveraged transactions, the availability of bank loans for investment by a fund may be adversely affected. In addition, such requirements or restrictions could reduce or eliminate sources of financing for certain borrowers. This would increase the risk of default. If legislation or federal or state regulators require financial institutions to dispose of bank loans that are considered highly leveraged transactions or subject such bank loans to increased regulatory

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scrutiny, financial institutions may determine to sell such bank loans. If a fund attempts to sell a bank loan at a time when a financial institution is engaging in such a sale, the price a fund could get for the bank loan may be adversely affected.

#### Benchmark Reference Rate Risk
Many debt securities, derivatives, and other financial instruments utilize benchmark or reference rates for variable interest rate calculations, including the Euro Interbank Offer Rate, Sterling Overnight Index Average Rate, and the Secured Overnight Financing Rate (each a "Reference Rate"). Instruments in which the fund invests may pay interest at floating rates based on such Reference Rates or may be subject to interest caps or floors based on such Reference Rates. The fund and issuers of instruments in which the fund invests may also obtain financing at floating rates based on such Reference Rates. The elimination of a Reference Rate or any other changes to or reforms of the determination or supervision of Reference Rates could have an adverse impact on the market for, or value of, any instruments or payments linked to those Reference Rates.

For example, some Reference Rates, as well as other types of rates and indices, are described as "benchmarks" and have been the subject of ongoing national and international regulatory reform, including under the European Union regulation on indices used as benchmarks in financial instruments and financial contracts (known as the "Benchmarks Regulation"). The Benchmarks Regulation has been enacted into United Kingdom law by virtue of the European Union (Withdrawal) Act 2018 (as amended), subject to amendments made by the Benchmarks (Amendment and Transitional Provision) (EU Exit) Regulations 2019 (SI 2019/657) and other statutory instruments. Following the implementation of these reforms, the manner of administration of benchmarks has changed and may further change in the future, with the result that relevant benchmarks may perform differently than in the past, the use of benchmarks that are not compliant with the new standards by certain supervised entities may be restricted, and certain benchmarks may be eliminated entirely. Such changes could cause increased market volatility and disruptions in liquidity for instruments that rely on or are impacted by such benchmarks. Additionally, there could be other consequences which cannot be predicted.

#### Borrowing and Other Forms of Leverage
The fund may borrow money to the extent permitted by its investment policies and restrictions and by Section 18 of the 1940 Act. When the fund borrows money, it must pay interest and other fees, which will reduce the fund's returns if such costs exceed the returns on the portfolio securities purchased or retained with such borrowings. In addition, if the fund makes additional investments while borrowings are outstanding, this may be considered a form of leverage.

Each fund has available an unsecured revolving credit facility (the "Global Credit Facility") that may be used as an additional source of liquidity to fund redemptions of shares. There can be no assurance that the Global Credit Facility will remain available to the fund generally or that any available credit under the Global Credit Facility will be available to the fund when the fund seeks to draw on the Global Credit Facility.

Leveraging tends to exaggerate the effect of any increase or decrease in the value of the fund's holding. When the fund borrows money or otherwise leverages its portfolio, the value of an investment in the fund will be more volatile and other investment risks will tend to be compounded. Leveraging also may require that the fund liquidate portfolio securities when it may not be advantageous to do so to satisfy its obligations. Leveraging may expose the fund to losses in excess of the amounts invested. Furthermore, if the fund uses leverage through purchasing derivative instruments, the fund has the risk that losses may exceed the net assets of the fund.

#### Collateralized Debt and Loan Obligations
The fund may invest in collateralized debt obligations ("CDOs"). CDOs are types of asset-backed securitized instruments and include collateralized loan obligations ("CLOs") and other similarly structured securities. Although certain CDOs may benefit from credit enhancement in the form of a senior-subordinate structure, overcollateralization or bond insurance, such enhancement may not always be present, and may fail to protect a fund against the risk of loss on default of the collateral. CDOs may charge management and administrative fees, which are in addition to those of a fund. CDOs may be less liquid than other types of securities.

The risks of an investment in a CDO largely depend on the type of underlying collateral securities and the tranche in which a fund invests. CDOs are subject to the typical risks associated with debt instruments and fixed income and/or asset-backed securities discussed elsewhere in the prospectus and in this SAI, including interest rate risk (which may be exacerbated if the

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interest rate payable on a structured financing changes based on multiples of changes in interest rates or inversely to changes in interest rates), prepayment risk, credit risk (including adverse credit spread moves), liquidity risk and market risk. CDOs carry additional risks including, but not limited to: (i) the possibility that distributions from collateral securities will not be adequate to make interest or other payments and one or more tranches may be subject to up to 100% loss of invested capital; (ii) the possibility that the quality of the collateral may decline in value or default, due to factors such as the availability of any credit enhancement, the level and timing of payments and recoveries on and the characteristics of the underlying receivables, loans, or other assets that are being securitized, remoteness of those assets from the originator or transferor, the adequacy of and ability to realize upon any related collateral, and the capability of the servicer of the securitized assets (particularly where the underlying collateral in a loan portfolio is not individually assessed prior to purchase); (iii) market and illiquidity risks affecting the price of a structured finance investment, if required to be sold, at the time of sale; and (iv) if the particular structured product is invested in a security in which a fund is also invested, this would tend to increase the fund's overall exposure to the credit of the issuer of such securities, at least on an absolute, if not on a relative basis. In addition, due to the complex nature of a CDO, an investment in a CDO may not perform as expected. An investment in a CDO also is subject to the risk that the issuer and the investors may interpret the terms of the instrument differently, giving rise to disputes.

A CLO is an obligation of a trust or other special purpose vehicle typically collateralized by a pool of loans, which may include, among others, domestic and foreign senior secured loans, senior unsecured loans, and subordinate corporate loans, including loans that may be rated below investment grade or equivalent unrated loans. CLOs may charge management and other administrative fees. Payments of principal and interest are passed through to investors in a CLO and divided into several tranches of rated debt securities, which vary in risk and yield, and typically at least one tranche of unrated subordinated securities, which may be debt or equity ("CLO Securities"). CLO Securities generally receive some variation of principal and/or interest installments and, with the exception of certain subordinated securities, bear different interest rates. If there are defaults or if a CLO's collateral otherwise underperforms, scheduled payments to senior tranches typically take priority over less senior tranches.

CLO Securities may be privately placed and thus subject to restrictions on transfer to meet securities law and other legal requirements. In the event that any fund does not satisfy certain of the applicable transfer restrictions at any time that it holds CLO Securities, it may be forced to sell the related CLO Securities and may suffer a loss on sale. CLO Securities may be considered illiquid investments in the event there is no secondary market for the CLO Securities. CLOs are also subject to the same risks associated with CDOs, as described above.

#### Commodities and Commodity-Related Investments
Some funds may gain exposure to commodity markets by investing in physical commodities or commodity-related instruments directly or indirectly. Such instruments include, but are not limited to, futures contracts, swaps, options, forward contracts, and structured notes and equities, debt securities, convertible securities, and warrants of issuers in commodity-related industries.

Commodity prices can be extremely volatile and may be directly or indirectly affected by many factors, including changes in overall market movements, real or perceived inflationary trends, commodity index volatility, changes in interest rates or currency exchange rates, population growth and changing demographics, war, and factors affecting a particular industry or commodity, such as drought, floods, or other weather conditions or natural disasters, livestock disease, trade embargoes, economic sanctions, competition from substitute products, transportation bottlenecks or shortages, insufficient storage capacity, fluctuations in supply and demand, tariffs, and international regulatory, political, and economic developments (*e.g.*, regime changes and changes in economic activity levels). In addition, some commodities are subject to limited pricing flexibility because of supply and demand factors, and others are subject to broad price fluctuations as a result of the volatility of prices for certain raw materials and the instability of supplies of other materials. Certain commodities (and related derivatives) are also susceptible to price declines due to factors such as supply surpluses caused by global events.

Actions of and changes in governments, and political and economic instability, in commodity-producing and -exporting countries may affect the production and marketing of commodities. In addition, commodity-related industries throughout the world are subject to greater political, environmental, and other governmental regulation than many other industries. Changes in government policies and the need for regulatory approvals may adversely affect the products and services of companies in the commodities industries. For example, the exploration, development, and distribution of coal, oil, and gas in the United States are subject to significant federal and state regulation, which may affect rates of return on coal, oil, and gas and the kinds of services that the federal and state governments may offer to companies in those industries. In addition, compliance with environmental and other safety regulations has caused many companies in commodity-related industries to incur production delays and

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significant costs. Government regulation also may impede the development of new technologies. The effect of future regulations affecting commodity-related industries cannot be predicted.

The value of commodity-related derivatives fluctuates based on changes in the values of the underlying commodity, commodity index, futures contract, or other economic variable to which they are related. Additionally, economic leverage will increase the volatility of these instruments as they may result in gains or losses greater than the amount invested in the instrument. See "Derivatives," "Forward Commitments and Dollar Rolls," "Futures Contracts and Related Options," "Hybrid Instruments," "Short Sales," "Structured Investments," "Swap Agreements" and "Warrants" herein for more information on the fund's investments in derivatives, including commodity-related derivatives such as swap agreements, commodity futures contracts, and options on commodity futures contracts.

#### Derivatives
Certain of the instruments in which the fund may invest, such as futures contracts, certain foreign currency transactions, options, warrants, hybrid instruments, forward contracts, swap agreements (including credit default swaps and credit default swap indexes) and structured investments, are considered to be "derivatives." Derivatives are financial instruments whose value depends upon, or is derived from, the value or other attributes of one or more underlying investments, pools of investments, indexes or currencies. Investments in derivatives may be applied toward meeting a requirement to invest in a particular kind of investment if the derivatives have economic characteristics similar to that investment.

The value of derivatives may move in unexpected ways due to unanticipated market movements, the use of leverage, imperfect correlation between the derivative instrument and the reference asset, or other factors, especially in unusual market conditions, and volatility in the value of derivatives could adversely impact the fund's returns, obligations and exposures. Derivatives may be difficult to value and may increase the fund's transactions costs. The successful use of derivatives depends on the ability to manage these sophisticated instruments. There is no assurance that the fund's use of derivative instruments will enable the fund to achieve its investment objective or that the Investment Manager will be able to predict correctly the direction of securities prices, interest rates, currency exchange rates and other economic factors.

The fund's use of derivatives may cause the fund to recognize higher amounts of short-term capital gains, which are generally taxed to individual shareholders at ordinary income tax rates, and higher amounts of ordinary income, and more generally may affect the timing, character and amount of a fund's distributions to shareholders. The fund's use of commodity-linked derivatives can be limited by the fund's intention to qualify as a "regulated investment company" under the Internal Revenue Code of 1986, as amended (the "Code") or bear adversely on the fund's ability to so qualify, as discussed in "Taxes" below.

The fund's use of certain derivatives may in some cases involve forms of financial leverage, which means they provide the fund with investment exposure greater than the value of the fund's investment in the derivatives. The use of leverage involves risk and may increase the volatility of the fund's net asset value.

In its use of derivatives, the fund may take both long positions (the values of which move in the same direction as the prices of the underlying investments, pools of investments, indexes or currencies), and short positions (the values of which move in the opposite direction from the prices of the underlying investments, pools of investments indexes or currencies). Short positions may involve greater risks than long positions, as the risk of loss may be theoretically unlimited (unlike a long position, in which the risk of loss may be limited to the amount invested). The fund may use derivatives that combine "long" and "short" positions in order to capture the difference between underlying investments, pools of investments, indexes or currencies.

Some derivative transactions are required to be centrally cleared and others are available for voluntary clearing. A party to a cleared derivative transaction is subject to the credit and counterparty risk of the clearing house and the clearing member through which it holds its cleared position. Credit risk of market participants with respect to derivatives that are centrally cleared is concentrated in a few clearing houses, and it is not clear how an insolvency proceeding of a clearing house would be conducted and what impact an insolvency of a clearing house would have on the financial system or on the fund's ability to exercise remedies. Also, the fund is subject to risk if it enters into a derivative transaction that is required to be cleared, and no clearing member is willing or able to clear the transaction on the fund's behalf.

Some derivative contracts may be privately negotiated in the over-the-counter market. These contracts also involve exposure to credit risk, since contract performance depends in part on the financial condition of the counterparty, and counterparty risk, since the counterparty may be unable or unwilling to perform its obligations under the contract for reasons unrelated to its financial

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condition, such as operational issues, business interruptions or contract disputes. If a privately negotiated over-the-counter contract calls for payments by the fund, the fund must be prepared to make the payments when due. If a counterparty's creditworthiness declines or the counterparty is otherwise unable or unwilling to perform its obligations under the contract, the fund may not receive payments owed under the contract, or the payments may be delayed and the value of the agreements with the counterparty may decline, potentially resulting in losses to the fund.

Derivatives also are subject to the risk that the fund may be delayed or prevented from recovering margin or other amounts deposited with a clearinghouse, futures commission merchant or other counterparty. If the fund has insufficient cash, it may have to sell securities to meet margin requirements at a time when it may be disadvantageous to do so.

Other risks arise from the potential inability to terminate or sell derivative positions. Derivatives may be subject to liquidity risk due to the fund's obligation to make payments of margin, collateral, or settlement payments to counterparties. A liquid secondary market may not always exist for the fund's derivative positions. In fact, certain over-the-counter instruments may be considered illiquid, and it may not be possible for the fund to liquidate a derivative position at an advantageous time or price, which may result in significant losses.

Legislation and regulation of derivatives in the U.S. and other countries, including margin, clearing, trading and reporting requirements, and leveraging and position limits, may make derivatives more costly and/or less liquid, limit the availability of certain types of derivatives, cause the fund to change its use of derivatives, or otherwise adversely affect a fund's use of derivatives.

The funds are required to comply with the derivatives rule when they engage in derivatives transactions. See "Legal and Regulatory Risks Relating to Investment Strategy" below. Further information about these instruments and the risks involved in their use is included elsewhere in the prospectus and in this SAI.

<u>Combined Positions</u> 

A fund may purchase and write options in combination with each other, or in combination with futures or forward contracts, options on futures contracts, indexed securities, swap agreements or other derivative instruments, to adjust the risk and return characteristics of its overall position. For example, a fund may purchase a put option and write a call option on the same underlying instrument, in order to construct a combined position whose risk and return characteristics are similar to selling a futures contract. Another possible combined position would involve writing a call option at one strike price and buying a call option at a lower price, in order to reduce the risk of the written call option in the event of a substantial price increase. Because combined options positions involve multiple trades, they result in higher transaction costs and may be more difficult to open and close out.

#### ESG Considerations
A fund may integrate environmental, social, or governance ("ESG") considerations into its research process and/or investment decision-making. The Investment Manager believes that ESG considerations, like other, more traditional subjects of investment analysis such as market position, growth prospects, and business strategy, have the potential to impact risk and returns. The relevance and materiality of ESG considerations in a fund's process will differ from strategy to strategy, from sector to sector, and from portfolio manager to portfolio manager, and, in some cases (such as where the Investment Manager lacks relevant ESG data), ESG considerations may not represent a material component of a fund's investment process. The consideration of ESG factors as part of a fund's investment process does not mean that a fund pursues a specific "ESG" or "sustainable" investment strategy, and, depending on the fund, the Investment Manager may sometimes make investment decisions other than on the basis of relevant ESG considerations.

#### Exchange-Traded Notes
The fund may invest in exchange-traded notes ("ETNs"). An ETN is a type of senior, unsecured, unsubordinated debt security whose returns are linked to the performance of a particular market index or other reference assets less applicable fees and expenses. ETNs are listed on an exchange and traded in the secondary market. Investors may hold the ETN until maturity, at which time the issuer is obligated to pay a return linked to the performance of the relevant market index less applicable fees and expenses. ETNs typically do not make periodic interest payments and principal typically is not protected.

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The market value of an ETN may be influenced by, among other things, time to maturity, level of supply and demand of the ETN, economic, legal, political or geographic events that affect the reference assets, volatility and lack of liquidity in the reference assets, changes in the applicable interest rates, the current performance of the market index to which the ETN is linked, and the credit rating of the ETN issuer. The market value of an ETN may differ from the performance of the applicable market index, and there may be times when an ETN trades at a premium or discount. This difference in price may be due to the fact that the supply and demand in the market for ETNs at any point in time is not always identical to the supply and demand in the market for the securities underlying the market index that the ETN seeks to track. A change in the issuer's credit rating may also impact the value of an ETN despite the underlying market index remaining unchanged.

ETNs are also subject to tax risk. No assurance can be given that the Internal Revenue Service (the "IRS") will accept, or a court will uphold, how the fund characterizes and treats ETNs for tax purposes.

An ETN that is tied to a specific market index may not be able to replicate and maintain exactly the composition and relative weighting of securities, commodities or other components in the applicable market index. ETNs also incur certain expenses not incurred by their applicable market index, and the fund would bear a proportionate share of any fees and expenses borne by the ETN in which it invests.

The fund's ability to sell its ETN holdings may be limited by the availability of a secondary market. In addition, although an ETN may be listed on an exchange, the issuer may not be required to maintain the listing, and there can be no assurance that a secondary market will exist for an ETN. Some ETNs that use leverage in an effort to amplify the returns of an underlying market index can, at times, be relatively illiquid and may therefore be difficult to purchase or sell at a fair price. Leveraged ETNs may offer the potential for greater return, but the potential for loss and speed at which losses can be realized also are greater. The extent of the fund's investment in commodity-linked ETNs, if any, is limited by tax considerations. For more information regarding the tax treatment of commodity-linked ETNs, please see "Taxes" below.

ETNs are generally similar to structured investments and hybrid instruments. For discussion of these investments and the risks generally associated with them, see "Hybrid Instruments" and "Structured Investments" in this SAI.

#### Floating Rate and Variable Rate Demand Notes
The fund may purchase taxable or tax-exempt floating rate and variable rate demand notes for short-term cash management or other investment purposes. Floating rate and variable rate demand notes are debt instruments that provide for periodic adjustments in the interest rate. The interest rate on these instruments may be reset daily, weekly or on some other reset period and may have a floor or ceiling on interest rate changes. The interest rate of a floating rate instrument may be based on a known lending rate, such as a bank's prime rate, and is reset whenever such rate is adjusted. The interest rate on a variable rate demand note is reset at specified intervals at a market rate.

Interest rate adjustments are designed to help stabilize the instrument's price or maintain a fixed spread to a predetermined benchmark. While this feature may protect against a decline in the instrument's market price when interest rates or benchmark rates rise, it lowers the fund's income when interest rates or benchmark rates fall. The fund's income from its floating rate and variable rate investments also may increase if interest rates rise. Floating rate and variable rate obligations are less effective than fixed rate instruments at locking in a particular yield. Nevertheless, such obligations may fluctuate in value in response to interest rate changes if there is a delay between changes in market interest rates and the interest reset date for the obligation, or for other reasons.

The fund's ability to receive payments of principal and interest and other amounts in connection with loans held by it will depend primarily on the financial condition of the issuer. The failure by the fund to receive scheduled interest or principal payments on a loan would adversely affect the income of the fund and would likely reduce the value of its assets, which would be reflected in a reduction in the fund's NAV.

Floating rate and variable rate demand notes and bonds may have a stated maturity in excess of one year, but may have features that permit a holder to demand payment of principal plus accrued interest upon a specified number of days' notice. Frequently, such obligations are secured by letters of credit or other credit support arrangements provided by banks. If these obligations are not secured by letters of credit or other credit support arrangements, the fund's right to demand payment will be dependent on the ability of the issuer to pay principal and interest on demand. In addition, these obligations frequently are not rated by credit rating agencies and may involve heightened risk of default by the issuer. The issuer of such obligations normally

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has a corresponding right, after a given period, to prepay in its discretion the outstanding principal of the obligation plus accrued interest upon a specific number of days notice to the holders. There is no assurance that the fund will be able to reinvest the proceeds of any prepayment at the same interest rate or on the same terms as those of the original instrument.

The absence of an active secondary market for floating rate and variable rate demand notes could make it difficult for the fund to dispose of the instruments, and the fund could suffer a loss if the issuer defaults or during periods in which the fund is not entitled to exercise its demand rights. When a reliable trading market for the floating rate and variable rate instruments held by the fund does not exist and the fund may not demand payment of the principal amount of such instruments within seven days, the instruments may be deemed illiquid and therefore subject to the fund's limitation on investments in illiquid securities.

#### Foreign Currency Transactions
The fund may engage in foreign currency exchange transactions, including purchasing and selling foreign currency, foreign currency options, foreign currency forward contracts and foreign currency futures contracts and related options. The fund may engage in these transactions for a variety of reasons, including to manage the exposure to foreign currencies inherent in the fund's investments, to increase its returns, and to offset some of the costs of hedging transactions. Foreign currency transactions involve costs, and, if unsuccessful, may reduce the fund's return.

Generally, the fund may engage in both "transaction hedging" and "position hedging" (e.g., the sale of forward currency with respect to portfolio security positions). The fund may also engage in foreign currency transactions for non-hedging purposes, subject to applicable law. When it engages in transaction hedging, the fund enters into foreign currency transactions with respect to specific receivables or payables, generally arising in connection with the fund's purchase or sale of portfolio securities. The fund will engage in transaction hedging when it desires to "lock in" the U.S. dollar price of a security it has agreed to purchase or sell, or the U.S. dollar equivalent of a dividend or interest payment in a foreign currency. By transaction hedging, the fund will attempt to protect itself against a possible loss resulting from an adverse change in the relationship between the U.S. dollar and the applicable foreign currency during the period between the date on which the security is purchased or sold, or on which the dividend or interest payment is earned, and the date on which such payments are made or received. The fund may also engage in position hedging, in which the fund enters into foreign currency transactions on a particular currency with respect to portfolio positions denominated or quoted in that currency. By position hedging, the fund attempts to protect against a decline in the value relative to the U.S. dollar of the currencies in which its portfolio securities are denominated or quoted (or an increase in the value of the currency in which securities the fund intends to buy are denominated or quoted). While such a transaction would generally offset both positive and negative currency fluctuations, such currency transactions would not offset changes in security values caused by other factors.

The fund may purchase or sell a foreign currency on a spot (*i.e.,* cash) basis at the prevailing spot rate in connection with the settlement of transactions in portfolio securities denominated in that foreign currency or for other hedging or non-hedging purposes. If conditions warrant, for hedging or non-hedging purposes, the fund may also enter into contracts to purchase or sell foreign currencies at a future date ("forward contracts") and purchase and sell foreign currency futures contracts. The fund may also purchase or sell exchange-listed and over-the-counter call and put options on foreign currency futures contracts and on foreign currencies.

A foreign currency futures contract is a standardized exchange-traded contract for the future delivery of a specified amount of a foreign currency at a price set at the time of the contract. Foreign currency futures contracts traded in the United States are designed by and traded on exchanges regulated by the Commodity Futures Trading Commission (the "CFTC"), such as the Chicago Mercantile Exchange, and have margin requirements.

A foreign currency forward contract is a negotiated agreement to exchange currency at a future time, which may be any fixed number of days from the date of the contract as agreed by the parties, at a price set at the time of the contract. The contract price may be higher or lower than the current spot rate. In the case of a cancelable forward contract, the holder has the unilateral right to cancel the contract at maturity by paying a specified fee. Forward foreign currency exchange contracts differ from foreign currency futures contracts in certain respects. For example, the maturity date of a forward contract may be any fixed number of days from the date of the contract agreed upon by the parties, rather than a predetermined date in a given month. Forward contracts may be in any amount agreed upon by the parties rather than predetermined amounts. In addition, forward contracts are traded in the interbank market conducted directly between currency traders (usually large commercial banks) and their customers, so that no intermediary is required. A forward contract generally has no deposit requirement, and no commissions are charged at any stage for trades.

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At the maturity of a forward or futures contract, the fund either may accept or make delivery of the currency specified in the contract or otherwise settle the contract, or at or prior to maturity enter into a closing transaction involving the purchase or sale of an offsetting contract. Closing transactions with respect to forward contracts are usually effected with the currency trader who is a party to the original forward contract. Closing transactions with respect to futures contracts may be effected only on a commodities exchange or board of trade which provides a market in such contracts; a clearing corporation associated with the exchange assumes responsibility for closing out such contracts.

Positions in foreign currency futures contracts and related options may be closed out only on an exchange or board of trade that provides a market in such contracts or options. Although the fund intends to purchase or sell foreign currency futures contracts and related options only on exchanges or boards of trade where there appears to be an active market, there is no assurance that a market on an exchange or board of trade will exist for any particular contract or at any particular time. In such event, it may not be possible to close a futures or related option position and, in the event of adverse price movements, the fund would continue to be required to make daily cash payments of variation margin on its futures positions.

The precise matching of the amounts of foreign currency exchange transactions and the value of the portfolio securities involved will not generally be possible since the future value of such securities in foreign currencies will change as a consequence of market movements in the value of those securities between the dates the currency exchange transactions are entered into and the dates they mature. It is also impossible to forecast with precision the market value of portfolio securities at the expiration or maturity of a forward or futures contract. Accordingly, it may be necessary for the fund to purchase additional foreign currency on the spot market (and bear the expense of such purchase) if the market value of the security or securities being hedged is less than the amount of foreign currency the fund is obligated to deliver and a decision is made to sell the security or securities and make delivery of the foreign currency. Conversely, it may be necessary to sell on the spot market some of the foreign currency received upon the sale of the portfolio security or securities if the market value of such security or securities exceeds the amount of foreign currency the fund is obligated to deliver.

As noted above, the fund may purchase or sell exchange-listed and over-the-counter call and put options on foreign currency futures contracts and on foreign currencies. A put option on a futures contract gives the fund the right to assume a short position in the futures contract until or at the expiration of the option. A put option on a currency gives the fund the right to sell the currency at an exercise price until or at the expiration of the option. A call option on a futures contract gives the fund the right to assume a long position in the futures contract until or at the expiration of the option. A call option on a currency gives the fund the right to purchase the currency at the exercise price until or at the expiration of the option.

Options on foreign currencies operate similarly to options on securities, and are traded primarily in the over-the-counter market, although options on foreign currencies are also listed on several exchanges. Options are traded not only on the currencies of individual nations, but also on the euro, the joint currency of most countries in the European Union.

The fund will only purchase or write foreign currency options when the Investment Manager believes that a liquid secondary market exists for such options. There can be no assurance that a liquid secondary market will exist for a particular option at any specific time. Options on foreign currencies may be affected by all of those factors which influence foreign exchange rates and investments generally.

The fund's currency hedging transactions may call for the delivery of one foreign currency in exchange for another foreign currency and may at times not involve currencies in which its portfolio securities are then denominated. The Investment Manager will engage in such "cross hedging" activities when it believes that such transactions provide significant hedging opportunities for the fund. Cross hedging transactions by the fund involve the risk of imperfect correlation between changes in the values of the currencies to which such transactions relate and changes in the value of the currency or other asset or liability which is the subject of the hedge.

Transaction and position hedging do not eliminate fluctuations in the underlying prices of the securities that the fund owns or intends to purchase or sell. They simply establish a rate of exchange which one can achieve at some future point in time. Additionally, although these techniques tend to minimize the risk of loss due to a decline in the value of the hedged currency, they involve costs to the fund and tend to limit any potential gain which might result from the increase in value of such currency.

The fund may also engage in non-hedging currency transactions. For example, the Investment Manager may believe that exposure to a currency is in the fund's best interest but that securities denominated in that currency are unattractive. In this situation, the fund may purchase a currency forward contract or option in order to increase its exposure to the currency.

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In addition, the fund may seek to increase its current return or to offset some of the costs of hedging against fluctuations in current exchange rates by writing covered call options and covered put options on foreign currencies. The fund receives a premium from writing a call or put option, which increases the fund's current return if the option expires unexercised or is closed out at a net profit. The fund may terminate an option that it has written prior to its expiration by entering into a closing purchase transaction in which it purchases an option having the same terms as the option written.

The value of any currency, including U.S. dollars and foreign currencies, may be affected by complex political and economic factors applicable to the issuing country. In addition, the exchange rates of foreign currencies (and therefore the values of foreign currency options, forward contracts and futures contracts and related options) may be affected significantly, fixed, or supported directly or indirectly by U.S. and foreign government actions. Government intervention may increase risks involved in purchasing or selling foreign currency options, forward contracts and futures contracts and related options, since exchange rates may not be free to fluctuate in response to other market forces. The value of a foreign currency option, forward contract or futures contract or related option reflects the value of an exchange rate, which in turn reflects relative values of two currencies — the U.S. dollar and the foreign currency in question. Although foreign exchange dealers do not charge a fee for currency conversion, they do realize a profit based on the difference (the "spread") between prices at which they are buying and selling various currencies. Thus, a dealer may offer to sell a foreign currency to the fund at one rate, while offering a lesser rate of exchange should the fund desire to resell that currency to the dealer. Because foreign currency transactions occurring in the interbank market involve substantially larger amounts than those that may be involved in the exercise of foreign currency options, forward contracts and futures contracts, the fund may be disadvantaged by having to deal in an odd-lot market for the underlying foreign currencies in connection with options at prices that are less favorable than for round lots. Foreign governmental restrictions or taxes could result in adverse changes in the cost of acquiring or disposing of foreign currencies.

There is no systematic reporting of last sale information for foreign currencies and there is no regulatory requirement that quotations available through dealers or other market sources be firm or revised on a timely basis. Available quotation information is generally representative of very large round-lot transactions in the interbank market and thus may not reflect exchange rates for smaller odd-lot transactions (less than $1 million) where rates may be less favorable. The interbank market in foreign currencies is a global, around-the-clock market. To the extent that options markets are closed while the markets for the underlying currencies remain open, significant price and rate movements may take place in the underlying markets that cannot be reflected in the options markets.

Numerous regulatory changes related to foreign currency transactions are expected to occur over time and could materially and adversely affect the ability of the fund to enter into foreign currency transactions or could increase the cost of foreign currency transactions. In the future, additional foreign currency transactions may be required to be subject to initial as well as variation margin requirements. Foreign currency transactions that are not centrally cleared are subject to the creditworthiness of the counterparty to the foreign currency transaction (usually large commercial banks), and their values may decline substantially if the counterparty's creditworthiness deteriorates. In a cleared foreign currency transaction, performance of the transaction will be effected by a central clearinghouse rather than by the original counterparty to the transaction. Foreign currency transactions that are centrally cleared will be subject to the creditworthiness of the clearing member and the clearing organization involved in the transaction.

The decision as to whether and to what extent the fund will engage in foreign currency exchange transactions will depend on a number of factors, including prevailing market conditions, the composition of the fund's portfolio and the availability of suitable transactions. There can be no assurance that suitable foreign currency transactions will be available for the fund at any time or that the fund will engage in foreign currency exchange transactions at any time or under any circumstances even if suitable transactions are available to it.

Successful use of currency management strategies will depend on the Investment Manager's skill in analyzing currency values. Currency management strategies may increase the volatility of the fund's returns and could result in significant losses to the fund if currencies do not perform as the Investment Manager anticipates. There is no assurance that the Investment Manager's use of currency management strategies will be advantageous to the fund or that it will hedge at appropriate times.

#### Foreign Investments and Related Risks
Foreign securities are normally denominated and traded in foreign currencies. As a result, the value of the fund's foreign investments and the value of its shares may be affected favorably or unfavorably by changes in currency exchange rates relative to the U.S. dollar. In addition, the fund is required to compute and distribute its income in U.S. dollars. Therefore, if the exchange

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rate for a foreign currency declines after a fund's income has been earned and translated into U.S. dollars (but before payment), the fund could be required to liquidate portfolio securities to make such distributions. Similarly, if an exchange rate declines between the time a fund incurs expenses in U.S. dollars and the time such expenses are paid, the amount of such currency required to be converted into U.S. dollars in order to pay such expenses in U.S. dollars will be greater than the equivalent amount in any such currency of such expenses at the time they were incurred.

There may be less information publicly available about a foreign issuer than about a U.S. issuer, and foreign issuers may not be subject to accounting, auditing, custody, disclosure and financial reporting standards and practices comparable to those in the United States. In addition, there may be less (or less effective) regulation of exchanges, brokers and listed companies in some foreign countries. The securities of some foreign issuers are less liquid and at times more volatile than securities of comparable U.S. issuers. Foreign brokerage commissions, custodial expenses and other fees are also generally higher than in the United States.

Foreign settlement procedures and trade regulations may be more complex and involve certain risks (such as delay in payment or delivery of securities or in the recovery of the fund's assets held abroad) and expenses not present in the settlement of investments in U.S. markets. For example, settlement of transactions involving foreign securities or foreign currencies (see below) may occur within a foreign country, and the fund may accept or make delivery of the underlying securities or currency in conformity with any applicable U.S. or foreign restrictions or regulations, and may pay fees, taxes or charges associated with such delivery. In addition, local market holidays or other factors may extend the time for settlement of purchases and sales of the fund's investments in securities that trade on foreign markets. Such investments may also involve the risk that an entity involved in the settlement may not meet its obligations. Extended settlement cycles or other delays in settlement may increase the fund's liquidity risk and require the fund to employ alternative methods (*e.g.*, through borrowings) to satisfy redemption requests during periods of large redemption activity in fund shares.

In addition, foreign securities may be subject to the risk of nationalization or expropriation of assets, imposition of economic sanctions or embargoes (whether imposed by the United States or another country or other governmental or non-governmental organization), currency exchange controls, foreign withholding or other taxes or restrictions on the repatriation of foreign currency, confiscatory taxation, political, social or financial instability and diplomatic developments which could affect the value of the fund's investments in certain foreign countries. Such actions could result in the devaluation of a country's currency or a decline in the value and liquidity of securities of issuers in that country. In some cases (including in the case of sanctions), such actions also could result in a freeze on an issuer's securities which would prevent the fund from selling securities it holds. Governments of many countries have exercised and continue to exercise substantial influence over many aspects of the private sector through the ownership or control of many companies, including some of the largest in these countries. As a result, government actions in the future could have a significant effect on economic conditions which may adversely affect prices of certain portfolio securities. There is also generally less government supervision and regulation of stock exchanges, brokers, and listed companies than in the United States. Moreover, foreign economies may differ favorably or unfavorably from the U.S. economy in such respects as growth of gross national product, rate of inflation, capital reinvestment, resource self-sufficiency and balance of payments position. Dividends or interest on, or proceeds from the sale of, foreign securities may be subject to foreign withholding or other taxes, and special U.S. tax considerations may apply.

*Note on MSCI indices.* Due to the potential for foreign withholding taxes, MSCI, Inc. (MSCI) publishes two versions of its indices reflecting the reinvestment of dividends using two different methodologies: gross dividends and net dividends. While both versions reflect reinvested dividends, they differ with respect to the manner in which taxes associated with dividend payments are treated. In calculating the net dividends version, MSCI incorporates reinvested dividends applying the withholding tax rate applicable to foreign non-resident institutional investors that do not benefit from double taxation treaties. The Investment Manager believes that the net dividends version of MSCI indices better reflects the returns U.S. investors might expect were they to invest directly in the component securities of an MSCI index.

Many foreign countries are heavily dependent upon exports, particularly to developed countries, and, accordingly, have been and may continue to be adversely affected by trade barriers, managed adjustments in relative currency values, and other protectionist measures imposed or negotiated by the United States and other countries with which they trade. These economies also have been and may continue to be negatively impacted by economic conditions in the United States and other trading partners, which can lower the demand for goods produced in those countries.

Legal remedies available to investors in certain foreign countries may be more limited than those available with respect to investments in the United States or in other foreign countries. The laws of some foreign countries may limit the fund's ability to

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invest in securities of certain issuers organized under the laws of those foreign countries. These restrictions may take the form of prior governmental approval requirements, limits on the amount or type of securities held by foreigners and limits on the types of companies in which foreigners may invest (*e.g.*, limits on investment in certain industries). Some countries also limit the investment of foreign persons to only a specific class of securities of an issuer that may have less advantageous terms or rights or preferences than securities of the issuer available for purchase by domestic parties (and such securities may be less liquid than other classes of securities of an issuer), or may directly limit foreign investors' rights (such as voting rights). Although securities subject to such restrictions may be marketable abroad, they may be less liquid than foreign securities of the same class that are not subject to such restrictions. Foreign laws may also impact the availability of derivatives or hedging techniques relating to a foreign country's government securities. In each of these situations, the funds' ability to invest significantly in desired issuers, or the terms of such investments, could be negatively impacted as a result of the relevant legal restriction. Sanctions imposed by the United States government on other countries or persons or issuers operating in such countries could restrict the fund's ability to buy affected securities or to sell any affected securities it has previously purchased, which may subject the fund to greater risk of loss in those securities. Foreign countries may have reporting requirements with respect to the ownership of securities, and those reporting requirements may be subject to interpretation or change without prior notice to investors. No assurance can be given that the fund will satisfy applicable foreign reporting requirements at all times.

For purposes of some foreign holding limits or disclosure thresholds, all positions owned or controlled by the same person or entity, even if in different accounts, may be aggregated for purposes of determining whether the applicable limits or thresholds have been exceeded. Thus, even if the fund does not intend to exceed applicable limits, it is possible that different clients managed by the Investment Manager and its affiliates may be aggregated for this purpose. These limits may adversely affect the fund's ability to invest in the applicable security.

The risks described above, including the risks of nationalization or expropriation of assets, typically are increased in connection with investments in developing countries, also known as "emerging markets." For example, political and economic structures in these countries may be in their infancy and developing rapidly, and such countries may lack the social, political and economic stability characteristic of more developed countries. In such a dynamic environment, there can be no assurance that any or all of these capital markets will present viable investment opportunities for the fund. Certain of these countries have in the past failed to recognize private property rights and have at times nationalized and expropriated the assets of private companies. In such an event, it is possible that the fund could lose the entire value of its investments in the affected market. High rates of inflation or currency devaluations may adversely affect the economies and securities markets of such countries. In addition, the economies of certain developing or emerging market countries may be dependent on a single industry or limited group of industries, which may increase the risks described above and make those countries particularly vulnerable to global economic and market changes. Investments in emerging markets may be considered speculative.

The currencies of certain emerging market countries have experienced devaluations relative to the U.S. dollar, and future devaluations may adversely affect the value of assets denominated in such currencies. Many emerging market countries have experienced substantial, and in some periods extremely high, rates of inflation for many years, and future inflation may adversely affect the economies and securities markets of such countries. When debt and similar obligations issued by foreign issuers are denominated in a currency (*e.g.*, the U.S. dollar or the Euro) other than the local currency of the issuer, the subsequent strengthening of the non-local currency against the local currency will generally increase the burden of repayment on the issuer and may increase significantly the risk of default by the issuer.

In addition, unanticipated political or social developments may affect the value of investments in emerging markets and the availability of additional investments in these markets. The small size, limited trading volume and relative inexperience of the securities markets in these countries may make investments in securities traded in emerging markets illiquid and more volatile than investments in securities traded in more developed countries, and the fund may be required to establish special custodial or other arrangements before making investments in securities traded in emerging markets. There may be little financial or accounting information available with respect to issuers of emerging market securities, and it may be difficult as a result to assess the value or prospects of an investment in such securities. In certain countries with emerging capital markets, reporting standards vary widely. As a result, traditional investment measurements used in the United States, such as price/earnings ratios, may not be applicable.

Practices in relation to settlement of securities transactions in emerging markets involve higher risks than those in developed markets, in part because the fund may need to use brokers and counterparties that are less well capitalized, and custody and registration of assets in some countries may be unreliable. The possibility of fraud, negligence, undue influence being exerted by the issuer, or refusal to recognize ownership exists in some emerging markets, and, along with other factors, could result in

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ownership registration being completely lost. The fund would absorb any loss resulting from such registration problems and may have no successful claim for compensation.

American Depositary Receipts ("ADRs") as well as other "hybrid" forms of ADRs, including European Depositary Receipts ("EDRs") and Global Depositary Receipts ("GDRs"), are certificates evidencing ownership of shares of a foreign issuer. These certificates are issued by depository banks and generally trade on an established market in the United States or elsewhere. The underlying shares are held in trust by a custodian bank or similar financial institution in the issuer's home country. The depository bank may not have physical custody of the underlying securities at all times and may charge fees for various services, including forwarding dividends and interest and corporate actions. ADRs are alternatives to directly purchasing the underlying foreign securities in their national markets and currencies. However, ADRs continue to be subject to many of the risks associated with investing in foreign securities.

Certain of the foregoing risks may also apply to some extent to securities of U.S. issuers that are denominated in foreign currencies or that are traded in foreign markets, or securities of U.S. issuers having significant foreign operations or other exposure to foreign markets. If the fund invests in securities issued by foreign issuers, the fund may be subject to the risks described above even if all of the fund's investments are denominated in U.S. dollars, especially with respect to issuers whose revenues are principally earned in a foreign currency but whose debt obligations have been issued in U.S. dollars or other hard currencies.

**Investing through Stock Connect.** The fund may, directly or indirectly (through, for example, participation notes or other types of equity-linked notes), purchase shares in mainland China-based companies that trade on Chinese stock exchanges such as the Shanghai Stock Exchange and the Shenzhen Stock Exchange ("China A-Shares") through the Shanghai-Hong Kong Stock Connect ("Stock Connect"), or that may be available in the future through additional stock connect programs, a mutual market access program designed to, among other things, enable foreign investment in the People's Republic of China ("PRC") via brokers in Hong Kong.

There are significant risks inherent in investing in China A-Shares through Stock Connect. The underdeveloped state of PRC's investment and banking systems subjects the settlement, clearing, and registration of China A-Shares transactions to heightened risks. Stock Connect can only operate when both PRC and Hong Kong markets are open for trading and when banking services are available in both markets on the corresponding settlement days. As such, if either or both markets are closed on a U.S. trading day, the fund may not be able to dispose of its China A-Shares in a timely manner, which could adversely affect the fund's performance. Because Stock Connect is relatively new, its effects on the market for trading China A-shares are uncertain. In addition, the trading, settlement and information technology ("IT") systems required to operate Stock Connect are relatively new and continuing to evolve. In the event that the relevant systems do not function properly, trading through Stock Connect could be disrupted.

PRC regulations require that, in order to sell its China A-Shares, the fund must pre-deliver the China A-Shares to a broker. If the China A-Shares are not in the broker's possession before the market opens on the day of sale, the sell order will be rejected. This requirement could also limit the fund's ability to dispose of its China A-Shares purchased through Stock Connect in a timely manner. Additionally, Stock Connect is subject to daily quota limitations on purchases of China A Shares. Once the daily quota is reached, orders to purchase additional China A-Shares through Stock Connect will be rejected. The fund's investment in China A-Shares may only be traded through Stock Connect and is not otherwise transferable. Stock Connect utilizes an omnibus clearing structure, and the fund's shares will be registered in its custodian's name on the Central Clearing and Settlement System. This may limit the ability of the Investment Manager to effectively manage the fund, and may expose the fund to the credit risk of its custodian or to greater risk of expropriation. Investment in China A-Shares through Stock Connect may be available only through a single broker that is an affiliate of the fund's custodian, which may affect the quality of execution provided by such broker. Stock Connect restrictions could also limit the ability of the fund to sell its China A-Shares in a timely manner, or to sell them at all. Further, different fees, costs and taxes are imposed on foreign investors acquiring China A-Shares acquired through Stock Connect, and these fees, costs and taxes may be higher than comparable fees, costs and taxes imposed on owners of other securities providing similar investment exposure.

Stock Connect trades are settled in Renminbi ("RMB"), the official currency of PRC, and investors must have timely access to a reliable supply of RMB in Hong Kong, which cannot be guaranteed.

**Investing through Bond Connect:** Chinese debt instruments trade on the China Interbank Bond Market ("CIBM") and may be purchased through a market access program that is designed to, among other things, enable foreign investment in the PRC

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("Bond Connect"). There are significant risks inherent in investing in Chinese debt instruments, similar to the risks of investing in other fixed-income securities in emerging markets. The prices of debt instruments traded on the CIBM may fluctuate significantly due to low trading volume and potential lack of liquidity. The rules to access debt instruments that trade on the CIBM through Bond Connect are relatively new and subject to change, which may adversely affect the fund's ability to invest in these instruments and to enforce its rights as a beneficial owner of these instruments. Trading through Bond Connect is subject to a number of restrictions that may affect the fund's investments and returns. In addition, securities offered through Bond Connect may lose their eligibility for trading through the program at any time. If Bond Connect securities lose their eligibility for trading through the program, they may be sold but can no longer be purchased through Bond Connect. There can be no assurance as to the program's continued existence or whether future developments regarding the program may restrict or adversely affect the fund's investments or returns.

Investments made through Bond Connect are subject to order, clearance and settlement procedures that are relatively untested in China, which could pose risks to the fund. CIBM does not support all trading strategies (such as short selling) and investments in Chinese debt instruments that trade on the CIBM are subject to the risks of suspension of trading without cause or notice, trade failure or trade rejection and default of securities depositories and counterparties. Furthermore, Chinese debt instruments purchased via Bond Connect will be held via a book entry omnibus account in the name of the Hong Kong Monetary Authority Central Money Markets Unit ("CMU") maintained with a China-based depository (either the China Central Depository & Clearing Co. ("CDCC") or the Shanghai Clearing House ("SCH")). The fund's ownership interest in these Chinese debt instruments will not be reflected directly in book entry with CDCC or SCH and will instead only be reflected on the books of the fund's Hong Kong sub-custodian. Therefore, the fund's ability to enforce its rights as a bondholder may depend on CMU's ability or willingness as record-holder of the bonds to enforce the fund's rights as a bondholder. Additionally, the omnibus manner in which Chinese debt instruments are held could expose the fund to the credit risk of the relevant securities depositories and the fund's Hong Kong sub-custodian. While the fund holds a beneficial interest in the instruments it acquires through Bond Connect, the mechanisms that beneficial owners may use to enforce their rights are untested. In addition, courts in China have limited experience in applying the concept of beneficial ownership. Moreover, Chinese debt instruments acquired through Bond Connect generally may not be sold, purchased or otherwise transferred other than through Bond Connect in accordance with applicable rules.

The fund's investments in Chinese debt instruments acquired through Bond Connect are generally subject to a number of regulations and restrictions, including Chinese securities regulations and listing rules, loss recovery limitations and disclosure of interest reporting obligations. The fund will not benefit from access to Hong Kong investor compensation funds, which are set up to protect against defaults of trades, when investing through Bond Connect.

Bond Connect can only operate when both China and Hong Kong markets are open for trading and when banking services are available in both markets on the corresponding settlement days. In addition, the trading, settlement and IT systems required for non-Chinese investors in Bond Connect are relatively new. In the event of systems malfunctions or extreme market conditions, trading via Bond Connect could be disrupted. The rules applicable to taxation of Chinese debt instruments acquired through Bond Connect remain subject to further clarification. Uncertainties in the Chinese tax rules governing taxation of income and gains from investments via Bond Connect could result in unexpected tax liabilities for the fund, which may negatively affect investment returns for shareholder.

Bond Connect trades are settled in RMB, and investors must have timely access to a reliable supply of RMB in Hong Kong, which cannot be guaranteed.

#### Forward Commitments and Dollar Rolls
The fund may enter into contracts to purchase securities for a fixed price at a future date beyond customary settlement time ("forward commitments"). In the case of to-be-announced ("TBA") purchase commitments, the unit price and the estimated principal amount are established when the fund enters into a contract, with the actual principal amount being within a specified range of the estimate. Forward commitments may be considered securities in themselves, and involve a risk of loss if the value of the security to be purchased declines prior to the settlement date, which risk is in addition to the risk of decline in the value of the fund's other assets. Where such purchases are made through dealers, the fund relies on the dealer to consummate the sale. The dealer's failure to do so may result in the loss to the fund of an advantageous yield or price. Although the fund will generally enter into forward commitments with the intention of acquiring securities for its portfolio or for delivery pursuant to options contracts it has entered into, the fund may dispose of a commitment prior to settlement if the Investment Manager deems it appropriate to do so. The fund may realize short-term profits or losses upon the sale of forward commitments.

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The fund may enter into TBA sale commitments to hedge its portfolio positions, to sell securities it owns under delayed delivery arrangements, or to take a short position in mortgage-backed securities. Proceeds of TBA sale commitments are not received until the contractual settlement date. If the TBA sale commitment is closed through the acquisition of an offsetting purchase commitment, the fund realizes a gain or loss on the commitment without regard to any unrealized gain or loss on the underlying security. If the fund delivers securities under the commitment, the fund realizes a gain or loss from the sale of the securities based upon the unit price established at the date the commitment was entered into.

The fund may enter into dollar roll transactions (generally using TBAs) in which it sells a fixed income security for delivery in the current month and simultaneously contracts to purchase similar securities (for example, same type, coupon and maturity) at an agreed upon future time. By engaging in a dollar roll transaction, the fund foregoes principal and interest paid on the security that is sold while the dollar roll is outstanding, but receives the difference between the current sales price and the forward price for the future purchase. In addition, the fund may reinvest the cash proceeds of the sale while the dollar roll is outstanding in an effort to enhance returns. The reinvestment of such proceeds may be considered a form of investment leverage and may increase the fund's risk and volatility. If the income and capital gains from the investment of the cash from the initial sale do not exceed the income, capital appreciation and gain or loss that would have been realized on the securities sold as part of the dollar roll, the use of this technique will result in a lower return than would have been realized without the use of the dollar rolls. The fund accounts for dollar rolls as purchases and sales.

Purchases of securities on a forward commitment basis may involve more risk than other types of purchases. The obligation to purchase securities on a specified future date involves the risk that the market value of the securities that the fund is obligated to purchase may decline below the purchase price. In addition, when entering into a forward commitment transaction, the fund will rely on the other party to consummate the transaction. In the event that the other party files for bankruptcy, becomes insolvent or defaults on its obligation, the fund may be adversely affected. For example, the other party's failure to complete the transaction may result in the loss to the fund of an advantageous yield or price. See also "Legal and Regulatory Risks Relating to Investment Strategy" below.

#### Futures Contracts and Related Options
Subject to applicable law, the fund may invest in futures contracts and related options for hedging and non-hedging purposes, such as to manage the effective duration of the fund's portfolio or as a substitute for direct investment. A futures contract sale creates an obligation by the seller to sell the type of financial instrument or other asset called for in the contract in a specified month for a stated price. A futures contract purchase creates an obligation by the purchaser to buy the type of financial instrument or other asset called for in the contract in a specified month at a stated price. The specific assets bought or sold, respectively, at settlement date may not be determined until on or near that date. The determination is made in accordance with the rules of the exchange on which the futures contract sale or purchase was made. Futures contracts are traded in the United States only on commodity exchanges or boards of trade — known as "contract markets" — approved for such trading by the CFTC, and must be executed through a futures commission merchant (brokerage firm) which is a member of the relevant contract market. Examples of futures contracts that the fund may use include, without limitation, U.S. Treasury futures, index futures, corporate or municipal bond futures, U.S. Government agency futures, interest rate futures, commodities futures, futures contracts on sovereign debt, and Eurodollar futures. In addition, as described elsewhere in this SAI, the fund may use foreign currency futures.

The value of a futures contract tends to increase and decrease in tandem with the value of its underlying asset. Therefore, purchasing futures contracts will tend to increase the fund's exposure to positive and negative price fluctuations in the underlying asset, much as if it had purchased the underlying asset directly. When the fund sells a futures contract, by contrast, the value of its futures position will tend to move in a direction contrary to the market for the underlying asset. Selling futures contracts, therefore, will tend to offset both positive and negative market price changes, much as if the underlying asset had been sold.

When the fund enters into a futures contract, the fund is required to deliver to the futures broker an amount of liquid assets known as "initial margin." The nature of initial margin in futures transactions is different from that of margin in security transactions in that futures contract margin does not involve the borrowing of funds to finance the transactions. Rather, initial margin is similar to a performance bond or good faith deposit in that it is returned to the fund upon termination of the futures contract, assuming all contractual obligations have been satisfied. Initial margin requirements are established by the exchanges on which futures contracts trade and by the fund's broker and may, from time to time, change. Futures contracts also involve brokerage costs. Subsequent payments, called "variation margin" or "maintenance margin," to and from the broker are made on a daily basis as the value of the futures contract fluctuates, a process known as "marking to the market." For example, if the fund

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purchases a futures contract on an underlying security and the price of that security rises, the value of the futures contract will increase and the fund will receive from the broker a variation margin payment based on that increase in value. Conversely, if the price of the underlying security declines, the value of the futures contract will decrease and the fund will be required to make a variation margin payment to the broker based on that decrease in value. Upon the closing of a futures contract, the fund will receive or be required to pay additional cash based on a final determinations of variation margin.

Although futures contracts by their terms may call for actual delivery or acceptance of commodities or securities, in most cases the contracts are closed out before the settlement date without the making or taking of delivery. Many futures contracts, such as index futures and futures based on the volatility or variance experienced by an index do not call for actual delivery or acceptance of commodities or securities, but instead require cash settlement of the futures contract on the settlement date specified in the contract. Such contracts may also be closed out before the settlement date. The fund may close some or all of its futures positions at any time prior to their expiration. Closing out a futures contract sale is effected by purchasing a futures contract for the same aggregate amount of the specific type of financial instrument or commodity with the same settlement date. If the price of the initial sale of the futures contract exceeds the price of the offsetting purchase, the seller is paid the difference and realizes a gain. Conversely, if the price of the offsetting purchase exceeds the price of the initial sale, the seller realizes a loss. If the fund is unable to enter into a closing transaction, the amount of the fund's theoretical loss is unlimited. The closing out of a futures contract purchase is effected by the purchaser's entering into a futures contract sale. If the offsetting sale price exceeds the purchase price, the purchaser realizes a gain, and if the purchase price exceeds the offsetting sale price, he realizes a loss. Such closing transactions involve additional commission costs.

A portion of any capital gains from futures contracts in which the fund invests directly will be treated for federal income tax purposes as short-term capital gains that, when distributed to taxable shareholders, will be taxable as ordinary income. The fund's investments in futures may cause the fund to recognize income without receiving cash with which to make the distributions necessary to qualify and be eligible for treatment as a regulated investment company and avoid a fund-level tax. The fund may therefore need to liquidate other investments, including when it is not advantageous to do so, to meet its distribution requirement.

With respect to each fund, the Investment Manager has claimed an exclusion from the definition of the term "commodity pool operator" under the Commodity Exchange Act ("CEA") pursuant to Rule 4.5 under the CEA (the "exclusion") promulgated by the CFTC. Accordingly, the Investment Manager (with respect to these funds) is not subject to registration or regulation as a "commodity pool operator" under the CEA. To remain eligible for the exclusion, each of these funds will be limited in its ability to use certain financial instruments regulated under the CEA ("commodity interests"), including futures, options on futures and certain swaps. In the event that the Investment Manager believes that a fund's investments in commodity interests exceed the thresholds set forth in the exclusion, the Investment Manager may be required to register as a "commodity pool operator" with the CFTC with respect to that fund. The Investment Manager's eligibility to claim the exclusion with respect to a fund will be based upon, among other things, the level and scope of the fund's investment in commodity interests, the purposes of such investments and the manner in which the fund holds out its use of commodity interests. A fund's ability to invest in commodity interests is limited by the Investment Manager's intention to operate the fund in a manner that would permit the Investment Manager to continue to claim the exclusion under Rule 4.5, which may adversely affect the fund's total return. In the event the fund's investments in commodity interests require the Investment Manager to register with the CFTC as a commodity pool operator with respect to a fund, the fund's expenses may increase, adversely affecting that fund's total return, and the commodity pool operators ("CPOs") of any shareholders that are pooled investment vehicles may be unable to rely on certain CPO registration exemptions.

**Index futures**. An index futures contract is a contract to buy or sell units of an index at a specified future date at a price agreed upon when the contract is made. Entering into a contract to buy units of an index is commonly referred to as buying or purchasing a contract or holding a long position in the index. Entering into a contract to sell units of an index is commonly referred to as selling a contract or holding a short position. A unit is the current value of the index. The fund may enter into stock index futures contracts, debt index futures contracts, or other index futures contracts appropriate to its objective(s). The fund may also purchase and sell options on index futures contracts.

For example, the Standard & Poor's 500 Composite Stock Price Index ("S&P 500") is composed of 500 selected U.S. common stocks. The S&P 500 assigns relative weightings to the common stocks that comprise the index, and the value of the index fluctuates with changes in the market values of those common stocks. The stock index futures contract specifies that no delivery of the actual stocks making up the index will take place. Instead, settlement in cash must occur upon the termination of the contract, with the settlement being the difference between the contract price and the actual level of the stock index at the expiration of the contract. For example, if the fund enters into a futures contract to buy 250 units of the S&P 500 at a specified

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future date at a contract price of $150 and the S&P 500 is at $154 on that future date, the fund will gain $1,000 (250 units x gain of $4). If the fund enters into a futures contract to sell 250 units of the stock index at a specified future date at a contract price of $150 and the S&P 500 is at $152 on that future date, the fund will lose $500 (250 units x loss of $2).

**Options on futures contracts.** The fund may purchase and write call and put options on futures contracts it may buy or sell and enter into closing transactions with respect to such options to terminate existing positions. Options on futures contracts possess many of the same characteristics as options on securities and indices. An option on a futures contract gives the holder the right, in return for the premium paid to assume a long position (call) or short position (put) in a futures contract at a specified exercise price at any time during the period of the option (in the case of an American-style option) or on the expiration date (in the case of European-style option). After selling a put or call option on a futures contract, the fund will be required to deposit initial margin and variation margin as described above for futures contracts.

When a call option on a futures contract is exercised, the holder acquires a long position in the futures contract and the writer is assigned the opposite short position. When a put option on a futures contract is exercised, the holder acquires a short position in the futures contract and the writer is assigned the opposite long position. When an option is exercised, the delivery of the futures position by the writer of the option to the holder of the option will be accompanied by delivery of the accumulated balance in the writer's futures margin account, which represents the amount by which the market price of the futures contract, at exercise, exceeds (in the case of a call) or is less than (in the case of a put) the exercise price of the option on the future. If an option is exercised on the last trading day prior to its expiration date, the settlement will be made entirely in cash equal to the difference between the exercise price of the option and the closing level of the underlying asset on which the future is based on the expiration date. Purchasers of options who fail to exercise their options prior to the exercise date suffer a loss of the premium paid. The holder or writer of an option on a futures contract may terminate its position by selling or purchasing an offsetting option on the same financial instrument (subject to the availability of a liquid market).

The fund may use options on futures contracts in lieu of purchasing or writing options directly on the underlying assets or purchasing and writing the underlying futures contracts. For example, to hedge against a possible decrease in the value of its portfolio securities, the fund may purchase put options or write call options on futures contracts rather than selling futures contracts. Similarly, the fund may purchase call options or write put options on futures contracts as a substitute for the purchase of futures contracts to hedge against a possible increase in the price of securities that the fund expects to purchase. Such options generally operate in the same manner, and involve the same risks, as options purchased or written directly on the underlying investments. As an alternative to purchasing or writing call and put options on index futures, the fund may purchase and write call and put options on the underlying indices themselves. Such options would be used in a manner identical to the use of options on index futures.

Compared to the purchase or sale of futures contracts, the purchase of call or put options on futures contracts generally involves less potential risk to the fund because the maximum amount at risk is the premium paid for the options (plus transaction costs). However, there may be circumstances when the purchase of a call or put option on a futures contract would result in a loss to the fund when the purchase or sale of a futures contract would not (or would result in a smaller loss), such as when there is no movement in the prices of the hedged investments.

The writing of an option on a futures contract involves risks similar to those relating to the purchase or sale of futures contracts (which are described below). In addition, by writing a call option, the fund becomes obligated to sell a futures contract if the option is exercised, which may have a value higher than the exercise price. Similarly, by writing a put option, the fund becomes obligated to purchase a futures contract if the option is exercised, which may have a value lower than the exercise price. The writing of an option on a futures contract generates a premium, which may partially offset an increase (in the case of a written call option) or decrease (in the case of a written put option) in the value of the underlying futures contract. However, the loss incurred by the fund in writing options on futures contracts is potentially unlimited and may exceed the amount of the premium received. The fund will also incur transaction costs in connection with the writing of options on futures contracts.

**Risks of transactions in futures contracts and related options**. Successful use of futures contracts and options on futures contracts by the fund is subject to the Investment Manager's ability to predict movements in various factors affecting securities markets (or markets for other assets), including interest rates and market movements, and, in the case of index futures and futures based on the volatility or variance experienced by an index, the Investment Manager's ability to predict the future level of the index or the future volatility or variance experienced by an index. For example, it is possible that, where the fund has sold futures contracts to hedge its portfolio against a decline in the market, the index on which the futures contracts are written may advance and the value of securities held in the fund's portfolio, which may differ from those that comprise the index, may decline.

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If this occurred, the fund would lose money on the futures contracts and experience a decline in value in its portfolio securities. It is also possible that, if the fund has hedged against the possibility of a decline in the market adversely affecting securities held in its portfolio and securities prices increase instead, the fund will lose part or all of the benefit of the increased value of those securities it has hedged because it will have offsetting losses in its futures positions.

The use of futures and options strategies also involves the risk of imperfect correlation among movements in the prices of the securities or other assets underlying the futures contracts and options purchased and sold by the fund, of the futures contracts and options themselves, and, in the case of hedging transactions, of the securities which are the subject of a hedge. To attempt to compensate for imperfect correlations, the fund may purchase or sell futures contracts in a greater amount than the hedged investments if the volatility of the price of the hedged investments is historically greater than the volatility of the futures contracts. Conversely, the fund may purchase or sell fewer futures contracts if the volatility of the price of the hedged investments is historically less than that of the futures contract. In addition to the possibility that there may be an imperfect correlation, or no correlation at all, between movements in the futures contracts used by the fund and the portion of the portfolio being hedged, the prices of futures contracts may not correlate perfectly with movements in the underlying asset due to certain market distortions. First, all participants in the futures market are subject to margin deposit and maintenance requirements. Rather than meeting additional margin deposit requirements, investors may close futures contracts through offsetting transactions which could distort the expected relationship between the underlying asset and futures markets. Second, margin requirements in the futures market are less onerous than margin requirements in the securities market, and as a result the futures market may attract more speculators than the securities market does. Increased participation by speculators in the futures market may also cause temporary price distortions. Due to the possibility of price distortions in the futures market and also because of the imperfect correlation between movements in the underlying asset and movements in the prices of related futures, even a correct forecast of general market trends by the Investment Manager may still not result in a profitable position. In addition, in the case of hedging transactions, an incorrect correlation could result in a loss on both the hedged securities in the fund and the hedging transactions, so that the portfolio return might have been greater had hedging not been attempted.

The risk of a position in a futures contract may be very large compared to the relatively low level of margin a fund is required to deposit. In many cases, a relatively small price movement in a futures contract may result in immediate and substantial loss or gain to the fund relative to the size of a required margin deposit. In addition, if the fund has insufficient cash, it may have to sell securities to meet daily variation margin requirements at a time when it is disadvantageous to do so. The fund will be required to post margin with its futures commission merchant in connection with its transactions in futures contracts. In the event of an insolvency of the futures commission merchant, the fund may not be able to recover all (or any) of the margin it has posted with the futures commission merchant, or to realize the value of any increase in the price of its positions. The fund also may be delayed or prevented from recovering margin or other amounts deposited with a futures commission merchant or futures clearinghouse.

There is no assurance that higher than anticipated trading activity or other unforeseen events might not, at times, result in the institution by exchanges of special procedures that may interfere with the timely execution of customer orders, for example, by rendering certain market clearing facilities inadequate. For example, futures exchanges may limit the amount of fluctuation permitted in certain futures contract prices during a single trading day. The daily limit establishes the maximum amount that the price of a futures contract may vary either up or down from the previous day's settlement price at the end of the trading session. Once the daily limit has been reached in a futures contract subject to the limit, no more trades may be made on that day at a price beyond that limit. The daily limit governs only price movements during a particular trading day and therefore does not limit potential losses and the limit may work to prevent the liquidation of unfavorable positions. Futures prices have occasionally moved to the daily limit for several consecutive trading days with little or no trading, thereby preventing prompt liquidation of positions and subjecting some holders of futures contracts to substantial losses. In addition, exchanges may cancel trades in limited circumstances, for example, if the exchange believes that allowing such trades to stand as executed could have an adverse impact on the stability or integrity of the market. Any such cancellation may adversely affect the performance of the fund. The fund's futures broker may also limit the fund's ability to invest in certain futures contracts. Such restrictions may adversely affect the fund's performance and its ability to achieve its investment objective.

To reduce or eliminate a position held by the fund, the fund may seek to close out such position. The ability to establish and close out positions will be subject to the development and maintenance of a liquid market. It is not certain that this market will develop or continue to exist for a particular futures contract or option. Reasons for the absence of a liquid market on an exchange include the following: (i) there may be insufficient trading interest in certain contracts or options; (ii) restrictions may be imposed by an exchange on opening transactions or closing transactions or both; (iii) trading halts, suspensions or other restrictions may be imposed with respect to particular classes or series of contracts or options, or underlying securities; (iv)

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unusual or unforeseen circumstances may interrupt normal operations on an exchange; (v) the facilities of an exchange or a clearing corporation may not at all times be adequate to handle current trading volume; or (vi) one or more exchanges could, for economic or other reasons, decide or be compelled at some future date to discontinue the trading of contracts or options (or a particular class or series of contracts or options), in which event the market on that exchange for such contracts or options (or in the class or series of contracts or options) would cease to exist, although outstanding contracts or options on the exchange that had been issued by a clearing corporation as a result of trades on that exchange would continue to be settled or exercisable in accordance with their terms. If the fund were unable to liquidate a futures contract or an option on a futures contract due to the absence of a liquid market, the imposition of price limits or otherwise, it could incur substantial losses. The fund would continue to be subject to market risk with respect to the position. Also, except in the case of purchased options, the fund would continue to be required to make daily variation margin payments and might be required to maintain a position being hedged by the futures contract or option. The funds are required to comply with the derivatives rule when they engage in transactions involving futures and options thereon. See "Legal and Regulatory Risks Relating to Investment Strategy" below.

#### Hybrid Instruments
Hybrid instruments are generally considered derivatives and include indexed or structured securities and combine the elements of futures contracts or options with those of debt, preferred equity, commodity or a depository instrument. A hybrid instrument may be a debt security, preferred stock, warrant, convertible security, certificate of deposit or other evidence of indebtedness on which a portion of or all interest payments, and/or the principal or stated amount payable at maturity, redemption or retirement is determined by reference to prices, changes in prices, or differences between prices, of securities, currencies, intangibles, goods, articles or commodities (collectively, "underlying assets"), or by another objective index, economic factor or other measure, including interest rates, currency exchange rates, or commodities or securities indices (collectively, "benchmarks").

Hybrid instruments can be an efficient means of creating exposure to a particular market, or segment of a market, with the objective of enhancing total return. For example, a fund may wish to take advantage of expected declines in interest rates in several European countries but avoid the transaction costs associated with buying and currency-hedging the foreign bond positions. One solution would be to purchase a U.S. dollar-denominated hybrid instrument whose redemption price is linked to the average three-year interest rate in a designated group of countries. The redemption price formula would provide for payoffs of less than par if rates were above the specified level. Furthermore, a fund could limit the downside risk of the security by establishing a minimum redemption price so that the principal paid at maturity could not be below a predetermined minimum level if interest rates were to rise significantly. The purpose of this arrangement, known as a structured security with an embedded put option, would be to give the fund the desired European bond exposure while avoiding currency risk, limiting downside market risk, and lowering transaction costs. Of course, there is no guarantee that the strategy will be successful, and the fund could lose money if, for example, interest rates do not move as anticipated or credit problems develop with the issuer of the hybrid instrument.

The risks of investing in hybrid instruments reflect a combination of the risks of investing in securities, options, futures and currencies. An investment in a hybrid instrument may entail significant risks that are not associated with a similar investment in a traditional debt instrument that has a fixed principal amount, is denominated in U.S. dollars or pays interest either at a fixed rate or a floating rate determined by reference to a common, nationally published benchmark. The risks of a particular hybrid instrument will depend upon the terms of the instrument but may include the possibility of significant changes in the benchmark(s) or the prices of the underlying assets to which the instrument is linked. Such risks generally depend upon factors unrelated to the operations or credit quality of the issuer of the hybrid instrument, which may not be foreseen by the purchaser, such as economic and political events, the supply and demand of the underlying assets and interest rate movements. In addition, the various benchmarks and prices for underlying assets can be highly volatile.

Hybrid instruments are potentially more volatile and carry greater market risks than traditional debt instruments. Depending on the structure of the particular hybrid instrument, changes in a benchmark may be magnified by the terms of the hybrid instrument and have an even more dramatic and substantial effect upon the value of the hybrid instrument. Also, the prices of the hybrid instrument and the benchmark or underlying asset may not move in the same direction or at the same time.

Hybrid instruments may bear interest or pay preferred dividends at below market (or even relatively nominal) rates. Alternatively, hybrid instruments may bear interest at above market rates but bear an increased risk of principal loss (or gain). The latter scenario may result if "leverage" is used to structure the hybrid instrument. Leverage risk occurs when the hybrid instrument is structured so that a given change in a benchmark or underlying asset is multiplied to produce a greater value change in the hybrid instrument, thereby magnifying the risk of loss as well as the potential for gain.

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If the fund attempts to use a hybrid instrument as a hedge against, or as a substitute for, a portfolio investment, the hybrid instrument may not correlate as expected with the portfolio investment, resulting in losses to the fund. While hedging strategies involving hybrid instruments can reduce the risk of loss, they can also reduce the opportunity for gain or even result in losses by offsetting favorable price movements in other fund investments.

Hybrid instruments may also carry liquidity risk since the instruments are often "customized" to meet the portfolio needs of a particular investor, and therefore, the number of investors that are willing and able to buy such instruments in the secondary market may be smaller than that for more traditional debt securities. Under certain conditions, the redemption value of such an investment could be zero. In addition, because the purchase and sale of hybrid investments could take place in an over-the-counter market without the guarantee of a central clearing organization, or in a transaction between the fund and the issuer of the hybrid instrument, the creditworthiness of the counterparty of the issuer of the hybrid instrument would be an additional risk factor the fund would have to consider and monitor, and the value of the hybrid instrument may decline substantially if the issuer's creditworthiness deteriorates. In addition, uncertainty regarding the tax treatment of hybrid instruments may reduce demand for such instruments. Hybrid instruments also may not be subject to regulation by any governmental regulatory authority, including the regulators typically associated with the derivatives and securities markets such as the CFTC and the SEC.

#### Illiquid Investments
An illiquid investment means any investment that a fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.

A fund's illiquid investments may be considered speculative and may be difficult to sell. The sale of many of these investments may be prohibited or limited by law or contract. Illiquid investments may be difficult to value for purposes of calculating a fund's net asset value. A fund may not be able to sell illiquid investments when the Investment Manager considers it desirable to do so, or a fund may be able to sell them only at less than their value. The larger size of certain fund holdings and the lack of liquidity in securities markets may limit a fund's ability to sell illiquid investments, or to sell them at appropriate prices, thereby negatively impacting the fund.

#### Inflation-Protected Securities
The fund may invest in U.S. Treasury Inflation Protected Securities ("U.S. TIPS"), which are fixed income securities issued by the U.S. Department of Treasury, the principal amounts of which are adjusted daily based upon changes in the rate of inflation or deflation. The fund may also invest in other inflation-protected securities issued by non-U.S. governments or by private issuers. Two structures are common. While the U.S. Treasury and some other issuers use a structure that accrues inflation/deflation into the principal value of the bond, many other issuers adjust the coupon accruals for inflation-related changes.

U.S. TIPS pay interest on a semi-annual basis, equal to a fixed percentage of the inflation-adjusted principal amount. The interest rate on these securities is fixed at issuance, but over the life of the security this interest may be paid on an increasing or decreasing principal value that has been adjusted for inflation. U.S. TIPS currently are issued with maturities of five, ten, or thirty years, although it is possible that securities with other maturities will be issued in the future.

Repayment of the original principal upon maturity (as adjusted for inflation) is guaranteed for U.S. TIPS, even during a period of deflation. However, because the principal amount of U.S. TIPS would be adjusted downward during a period of deflation, the fund will be subject to deflation risk with respect to its investments in these securities. In addition, the current market value of U.S. TIPS is not guaranteed, and will fluctuate. If the fund purchases U.S. TIPS in the secondary market whose principal values have been adjusted upward due to inflation since issuance, the fund may experience a loss if there is a subsequent period of deflation. The fund may also invest in other inflation-related securities which may or may not provide a guarantee of principal. If a guarantee of principal is not provided, the adjusted principal value of the security repaid at maturity may be less than the original principal amount.

In addition, inflation-indexed securities do not protect holders from increases in interest rates due to reasons other than inflation (such as changes in currency exchange rates). The periodic adjustment of U.S. TIPS is currently tied to the Consumer Price Index for Urban Consumers ("CPI-U"), which is calculated by the U.S. Department of Treasury. The CPI-U is a measurement of changes in the cost of living, made up of components such as housing, food, transportation and energy. Inflation-protected securities issued by a non-U.S. government are generally adjusted to reflect a comparable inflation index, calculated by that

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government. There can no assurance that the CPI-U or any non-U.S. inflation index will accurately measure the real rate of inflation in the prices of goods and services. If interest rates rise due to reasons other than inflation (for example, due to changes in currency exchange rates), investors in these securities may not be protected to the extent that the increase is not reflected in the security's inflation measure, which could result in losses to the fund. In addition, there can be no assurance that the rate of inflation in a non-U.S. country will be correlated to the rate of inflation in the United States.

Although inflation-indexed bonds securities may protect their holders from long-term inflationary trends, short-term increases in inflation may result in a decline in value. In general, the value of inflation-protected securities is expected to fluctuate in response to changes in real interest rates, which are in turn tied to the relationship between nominal interest rates and the rate of inflation. Therefore, if inflation were to rise at a faster rate than nominal interest rates, real interest rates might decline, leading to an increase in value of inflation-protected securities. In contrast, if nominal interest rates increased at a faster rate than inflation, real interest rates might rise, leading to a decrease in value of inflation-protected securities. If inflation is lower than expected during the period the fund holds the security, the fund may earn less on the security than on a conventional bond.

Any increase in principal value is taxable in the year the increase occurs, even though holders do not receive cash representing the increase at that time. As a result, when the fund invests in inflation-protected securities, it could be required at times to liquidate other investments, including when it is not advantageous to do so, in order to satisfy its distribution requirements as a regulated investment company and to eliminate any fund-level income tax liability under the Code.

#### Initial Public Offerings
The fund may purchase debt or equity securities in initial public offerings ("IPOs"). These securities, which are often issued by unseasoned companies, may be subject to many of the same risks of investing in companies with smaller market capitalizations. Securities issued in an IPO frequently are very volatile in price (and may, therefore, involve greater risk) due to factors such as market psychology prevailing at the time of the IPO, the absence of a prior public market, unseasoned trading, the small number of shares available for trading, and limited availability of information about the issuer. Because of the price volatility of IPO securities, the fund may hold securities purchased in an IPO for a very short period of time. As a result, the fund's investments in IPOs may increase portfolio turnover, which increases brokerage and administrative costs and may result in taxable distributions to shareholders.

There can be no assurance that investments in IPOs will be available to the funds or improve a fund's performance. At any particular time or from time to time the fund may not be able to invest in securities issued in IPOs, or invest to the extent desired because, for example, only a small portion (if any) of the securities being offered in an IPO may be made available to the fund. In addition, under certain market conditions a relatively small number of companies may issue securities in IPOs. Similarly, to the extent that the number of Putnam funds to which IPO securities are allocated increases, the number of securities issued to any one fund may decrease. The investment performance of the fund during periods when it is unable to invest significantly or at all in IPOs may be lower than during periods when the fund is able to do so. When a fund's asset base is small, a significant portion of the fund's performance could be attributable to investments in IPOs because such investments would have a magnified impact on the fund. As the fund increases in size, the impact of IPOs on the fund's performance will generally decrease.

#### Inverse Floaters
Inverse floating rate debt securities (or "inverse floaters") are debt securities structured with variable interest rates that reset in the opposite direction from the market rate of interest to which the inverse floater is indexed. An inverse floater may be considered to be leveraged to the extent that its interest rate varies by a magnitude that exceeds the magnitude of the change in the index rate of interest. As a result, inverse floaters may be more volatile and more sensitive to interest rate changes than other types of debt securities with comparable maturities. Inverse floaters may be subject to legal or contractual restrictions on resale and therefore may be less liquid than other types of securities. Certain inverse floaters may be illiquid.

#### Large Shareholder Transaction Risk
The fund may be an investment option for mutual funds that are managed by the Investment Manager and its affiliates as "funds of funds." Additionally, other investors from time to time may make substantial investments in the fund. Such shareholders may at times be considered to control the fund. Dispositions of a large number of shares by these shareholders may adversely affect the fund's liquidity and net assets to the extent such transactions are executed directly with the fund in the form of redemptions through an authorized participant, rather than executed in the secondary market. In addition, a large number of shareholders

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collectively may purchase or redeem fund shares in large amounts rapidly or unexpectedly (collectively, such transactions are referred to as "large shareholder transactions"). Large shareholder redemptions may also force the fund to sell securities to satisfy redemption requests or purchase securities for the portfolio in connection with the investment of subscription proceeds when the fund would otherwise not do so, and at unfavorable prices, which may increase the fund's brokerage costs and accelerate the realization of taxable income and/or gains to shareholders. The effects of taxable income and/or gains resulting from large shareholder transactions would particularly impact non-redeeming shareholders who do not hold their fund shares in an IRA, 401(k) plan or other tax-advantaged plan. To the extent that such transactions result in short-term capital gains, such gains will generally be taxed at the ordinary income tax rate for shareholders who hold fund shares in a taxable account. In addition, fund returns may be adversely affected if the fund holds a portion of its assets in liquid, cash-like investments in connection with or in anticipation of shareholder redemptions. To the extent these large shareholders transact in shares of the fund on the secondary market, such transactions may account for a large percentage of the trading volume on the exchange and may, therefore, have a material effect (upward or downward) on the market price of the fund's shares. A number of circumstances may cause the fund to experience large redemptions, such as changes in the eligibility criteria for the fund or share class of the fund; liquidations, reorganizations, repositionings, or other announced fund events; or changes in investment objectives, strategies, policies, risks, or investment personnel.

#### Legal and Regulatory Risks Relating to Investment Strategy
The fund may be adversely affected by new (or revised) laws or regulations that may be imposed by the Internal Revenue System or Treasury Department, the CFTC, the SEC, the U.S. Federal Reserve or other banking regulators, or other governmental regulatory authorities or self-regulatory organizations that supervise the financial markets. These agencies are empowered to promulgate a variety of rules pursuant to financial reform legislation in the United States. The fund may also be adversely affected by changes in the enforcement or interpretation of existing statutes and rules by these governmental regulatory authorities or self-regulatory organizations. It is impossible to predict what, if any, changes in regulations may occur, but any regulation that restricts the ability of the fund to trade in securities or otherwise execute its investment strategy could have a material adverse impact on the fund's performance.

The regulatory environment for funds is evolving, and changes in regulation may adversely affect the value of the investments held by the fund and the ability of the fund to execute its investment strategy. In addition, the securities and derivatives (including futures) markets are subject to comprehensive statutes, regulations and margin requirements. The CFTC, the SEC, the Federal Deposit Insurance Corporation, other regulators and self-regulatory organizations and exchanges are authorized to take extraordinary actions in the event of market emergencies. The regulation of securitization and derivative transactions and funds that engage in such transactions is an evolving area of law and is subject to modification by government, self-regulatory organization and judicial action.

Since 2021, the SEC has proposed and, in some cases, finalized several new rules regarding a wide range of topics related to the fund. For example, the SEC has proposed new rules requiring the reporting and public disclosure of a manager's positions in security-based swaps, including CDS, equity total return swaps and related positions. The SEC has also finalized new rules restricting activities that could be considered to be manipulative in connection with security-based swaps, new rules regarding beneficial ownership and public reporting by managers under Section 13 of the Exchange Act, and new rules requiring the central clearing of certain cash and repurchase transactions involving U.S. Treasuries. These and other proposed new rules, whether assessed on an individual or collective basis, could fundamentally change the current regulatory framework for relevant markets and market participants, including having a material impact on activities of private fund advisers and their funds. While it is currently difficult to predict the full impact of these new rules, these rules could make it more difficult for the fund to execute certain investment strategies and may have a material adverse effect on the fund's ability to generate returns.

In October 2016, the SEC adopted a liquidity risk management rule, Rule 22e-4 under the 1940 Act (the "Liquidity Rule") that requires each fund to establish a liquidity risk management program. The funds have implemented a liquidity risk management program, and the fund's trustees (such trustees, as referenced in the table below under the heading "Management- Trustees," shall hereinafter be referred to as the "Trustees," the "Board," or the "Board of Trustees") has appointed the Investment Manager to administer the program. Under the liquidity risk management program, the liquidity risk of each fund is assessed, managed, and periodically reviewed and each portfolio investment held by each fund is classified as a "highly liquid investment," "moderately liquid investment," "less liquid investment" or "illiquid investment." The Liquidity Rule defines "liquidity risk" as the risk that a fund could not meet requests to redeem shares issued by the fund without significant dilution of the remaining investors' interest in the fund. The liquidity of a fund's portfolio investments is determined based on relevant market, trading and investment-specific considerations under the fund's liquidity risk management program. The impact the Liquidity Rule will have

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on the funds, and on the open-end mutual fund industry in general, is not yet fully known, but the rule could impact a fund's performance and its ability to achieve its investment objective(s). Please see "Illiquid Investments" above for more information.

The U.S. government has enacted legislation that provides for regulation of the derivatives market, including clearing, margin, reporting and registration requirements. The CFTC, SEC, and other federal regulators have adopted and continue to develop rules and regulations enacting the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"). The European Union ("EU"), the United Kingdom ("UK"), and some other countries have implemented and are in the process of implementing similar requirements that affect the fund when it enters into derivative transactions with a counterparty organized in that country or otherwise subject to that country's derivatives regulations. For example, the U.S. government, the EU, the UK and certain other jurisdictions have adopted mandatory minimum variation (and in some cases initial) margin requirements for bilateral derivatives. Such requirements could increase the amount of margin the fund needs to provide in connection with its derivative transactions and, therefore, make derivative transactions more expensive. The regulation of the derivatives markets may make derivatives more costly, may limit the availability or reduce the liquidity of derivatives, or may otherwise adversely affect the value or performance of derivatives. Because these requirements are evolving, their ultimate impact on the fund and the financial system is not yet known. While the rules and regulations like those imposing requirements for margin and central clearing of some derivative transactions are designed to reduce systemic risk (e.g., the risk that the interdependence of large derivatives dealers could cause them to suffer liquidity, solvency or other challenges simultaneously), there is no assurance that they will achieve that result, and, as noted, the requirements can expose the fund to new kinds of costs and risks.

In addition, in October 2020, the SEC adopted Rule 18f-4 under the 1940 Act (the "Derivatives Rule"), regulating the use by registered investment companies of derivatives and many related instruments (e.g. reverse repurchase agreements). The Derivatives Rule requires, among other things, that certain entities adopt a derivatives risk management program, comply with limitations on leverage-related risk based on a "value-at-risk" test and update reporting and disclosure procedures. Funds that use derivative instruments in a limited amount are not subject to the full requirements of the Derivatives Rule. In connection with the adoption of the Derivatives Rule, funds are no longer required to comply with the asset segregation framework arising from prior SEC guidance for covering certain derivative instruments and related transactions.

Regulatory changes also may affect counterparty risk. For example, regulatory requirements may limit the ability of the fund to protect its interests in the event of an insolvency of a derivatives counterparty. In the event of a counterparty's (or its affiliate's) insolvency, the fund's ability to exercise remedies, such as the termination of transactions, netting of obligations and realization on collateral, could be stayed or eliminated under special resolution regimes adopted in the United States, the EU, the UK, and various other jurisdictions. Such regimes provide government authorities with broad authority to intervene when a financial institution is experiencing financial difficulty. In particular, with respect to counterparties who are subject to such proceedings in the EU and the UK, the liabilities of such counterparties to the fund could be reduced, eliminated, or converted to equity in such counterparties (sometimes referred to as a "bail in").

The CFTC and domestic exchanges have established (and continue to evaluate and revise) speculative position limits, referred to as "position limits," on the maximum speculative positions which any person, or group of persons acting in concert, may hold or control in particular futures and options on futures contracts. In addition, federal position limits apply to swaps on agricultural, energy and metals commodities that are "economically equivalent," as defined by the CFTC, to certain futures contracts. Uncertainty surrounding which swaps qualify as "economically equivalent" may result in compliance challenges. An overly broad application of the definition could result in unnecessary restrictions in position sizes, whereas an overly narrow application could risk position limit overages. All positions owned or controlled by the same person or entity, even if in different accounts, must be aggregated for purposes of determining whether the applicable position limits have been exceeded unless an exemption applies. Thus, even if the fund does not intend to exceed applicable position limits, it is possible that positions of different clients managed by the Investment Manager and its affiliates or by any sub-adviser and its affiliates may be aggregated for this purpose. Any modification of trading decisions or elimination of open positions that may be required to avoid exceeding such limits may adversely affect the profitability of the fund. Position limits may adversely affect the fund's ability to hold positions in certain futures contracts and related options and swaps. A violation of position limits could also lead to regulatory action materially adverse to the fund's investment strategy.

The SEC has adopted new rules that require managers to file monthly confidential reports with the SEC regarding equity short sales and related activity. Under the new rules, the SEC will publicly disclose aggregated short position information on a monthly basis. The SEC also adopted a rule that will require reporting and public disclosure of securities loan transaction information (not including party names); this may include, but is not limited to, information about securities loans entered into in connection with

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short sales. In addition, other non-U.S. jurisdictions where the fund may trade have adopted reporting requirements. If the fund's short positions or its strategy become generally known, the fund's ability to implement its investment strategy could be adversely affected. In particular, other investors could cause a "short squeeze" in the securities held short by the fund forcing the fund to cover its positions at a loss. Such reporting requirements may also limit the fund's ability to access management and other personnel at certain companies where the fund seeks to take a short position. In addition, if other investors engage in copycat behavior by taking positions in the same issuers as the fund, the cost of borrowing securities to sell short could increase drastically and the availability of such securities to the fund could decrease drastically. Such events could make a fund unable to execute its investment strategy. Short sales are also subject to certain SEC regulations. If the SEC were to adopt additional restrictions on short sales, they could restrict the fund's ability to engage in short sales in certain circumstances. The SEC and regulatory authorities in other jurisdictions may adopt (and in certain cases, have adopted) bans on new or increases in short sales of certain securities, including short positions on such securities acquired through swaps, in response to market events. Bans on short selling and such short positions may make it impossible for the fund to execute certain investment strategies and may have a material adverse effect on the fund's ability to generate returns.

In October 2020, the SEC adopted certain regulatory changes and took other actions related to the ability of an investment company to invest in another investment company. These changes include, among other things, amendments to Rule 12d1-1, the rescission of Rule 12d1-2, the adoption of Rule 12d1-4, and the rescission of certain exemptive relief issued by the SEC permitting such investments in excess of statutory limits. These regulatory changes may adversely impact each fund's investment strategies and operations.

Rules implementing the credit risk retention requirements of the Dodd-Frank Act for asset-backed securities require the sponsor of certain securitization vehicles to retain, and to refrain from transferring, selling, conveying to a third party, or hedging 5% of the credit risk in assets transferred, sold, or conveyed through the issuance of such vehicle, subject to certain exceptions. These requirements may increase the costs to originators, securitizers, and, in certain cases, collateral managers of securitization vehicles in which the fund may invest, which costs could be passed along to the fund as an investor in such transactions.

Some EU-regulated institutions (banks, certain investment firms, and authorized managers of alternative investment funds) are currently restricted from investing in securitizations (including U.S.-related securitizations), unless, in summary: (i) the institution is able to demonstrate that it has undertaken certain due diligence in respect of various matters, including its investment position, the underlying assets, and (in the case of authorized managers of alternative investment funds) the sponsor and the originator of the securitization; and (ii) the originator, sponsor, or original lender of the securitization has explicitly disclosed to the institution that it will retain, on an ongoing basis, a net economic interest of not less than five percent of specified credit risk tranches or asset exposures related to the securitization. In the future, EU insurance and reinsurance undertakings and UCITS funds are expected to become subject to similar restrictions. Although the requirements do not apply to the fund directly, the costs of compliance, in the case of any securitization within the EU risk retention rules in which the fund has invested or is seeking to invest, could be indirectly borne by the fund and the other investors in the securitization.

#### Lower-rated Securities
The fund may invest in lower-rated fixed-income securities (commonly known as "junk bonds") and may hold fixed-income securities that are downgraded to a lower rating after the time of purchase by the fund. Compared to higher-rated fixed-income securities, lower-rated securities generally offer the potential for higher investment returns but subject holders to greater credit, market and liquidity risk, including the possibility of default or bankruptcy. The lower ratings reflect a greater possibility that adverse changes in the financial condition of the issuer or in general economic conditions, or both, or an unanticipated rise in interest rates, may impair the ability of the issuer to make payments of interest and principal. The inability (or perceived inability) of issuers to make timely payment of interest and principal would likely make the values of securities held by the fund more volatile and could limit the fund's ability to sell its securities at prices approximating the values the fund had placed on such securities. The market price of lower-rated securities also generally responds to short-term corporate and market developments to a greater extent than do the price and liquidity of higher-rated securities because such developments are perceived to have a more direct relationship to the ability of an issuer of lower-rated securities to meet its ongoing debt obligations. In addition, the market may be less liquid for lower-rated securities than for higher-rated securities. In the absence of a liquid trading market for securities held by it, the fund at times may be unable to establish the fair value of such securities.

Securities ratings are based largely on the issuer's historical financial condition and the rating agencies' analysis at the time of rating. Consequently, the rating assigned to any particular security is not necessarily a reflection of the issuer's current financial condition, which may be better or worse than the rating would indicate. In addition, the rating assigned to a security by Moody's

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Investors Service, Inc. or Standard & Poor's (or by any other nationally recognized securities rating agency) does not reflect an assessment of the volatility of the security's market value or the liquidity of an investment in the security. See "SECURITIES RATINGS."

Like those of other fixed-income securities, the values of lower-rated securities fluctuate in response to changes in interest rates. A decrease in interest rates will generally result in an increase in the value of the fund's fixed-income assets. Conversely, during periods of rising interest rates, the value of the fund's fixed-income assets will generally decline. The values of lower-rated securities may often be affected to a greater extent than higher-rated securities by changes in general economic conditions and business conditions affecting the issuers of such securities and their industries. Negative publicity or investor perceptions may also adversely affect the values of lower-rated securities, whether or not justified by fundamental factors. Changes by nationally recognized securities rating agencies in their ratings of any fixed-income security, changes in the ability of an issuer to make payments of interest and principal or regulation that limits the ability of certain categories of financial institutions to invest in lower-rated securities may also affect the value of these investments. Changes in the value of portfolio securities generally will not affect income derived from these securities, but will affect the fund's net asset value. The fund will not necessarily dispose of a security when its rating is reduced below its rating at the time of purchase. However, the Investment Manager will monitor the investment to determine whether its retention will assist in meeting the fund's goal(s).

Lower-rated securities may contain redemption, call or prepayment provisions which permit the issuer of such securities to, at its discretion, redeem the securities. During periods of falling interest rates, issuers of these securities are likely to redeem or prepay the securities and refinance them with debt securities with a lower interest rate. To the extent an issuer is able to refinance the securities, or otherwise redeem them, the fund may have to replace the securities with a lower yielding security, which would result in a lower return.

Issuers of lower-rated fixed-income securities may be (i) in poor financial condition, (ii) experiencing poor operating results, (iii) having substantial capital needs or negative net worth, or (iv) facing special competitive or product obsolescence problems, and may include companies involved in bankruptcy or other reorganizations or liquidation proceedings. Issuers of lower-rated securities are also often highly leveraged, and their relatively high debt-to-equity ratios increase the risk that their operations may not generate sufficient cash flow to service their debt obligations, especially during an economic downturn or during sustained periods of rising interest rates. Such issuers may not have more traditional methods of financing available to them and may be unable to repay outstanding obligations at maturity by refinancing. The risk of loss due to default in payment of interest or repayment of principal by issuers of lower-rated securities is significantly greater than for issuers of higher-rated securities because such securities frequently are unsecured and subordinated to the prior payment of senior indebtedness.

At times, a substantial portion of the fund's assets may be invested in an issue of which the fund, by itself or together with other funds and accounts managed by the Investment Manager or its affiliates, holds all or a major portion. Although the Investment Manager generally considers such securities to be liquid because of the availability of an institutional market for such securities, it is possible that, under adverse market or economic conditions or in the event of adverse changes in the financial condition of the issuer, the fund could find it more difficult to sell these securities when the Investment Manager believes it advisable to do so or may be able to sell the securities only at prices lower than if they were more widely held. Under these circumstances, it may also be more difficult to determine the fair value of such securities for purposes of computing the fund's net asset value. In order to enforce its rights in the event of a default, the fund may be required to participate in various legal proceedings or take possession of and manage assets securing the issuer's obligations on such securities. This could increase the fund's operating expenses and adversely affect the fund's net asset value. In the case of tax-exempt funds, any income derived from the fund's ownership or operation of such assets would not be tax-exempt. The ability of a holder of a tax-exempt security to enforce the terms of that security in a bankruptcy proceeding may be more limited than would be the case with respect to securities of private issuers. In addition, the fund's intention to qualify as a "regulated investment company" under the Code may limit the extent to which the fund may exercise its rights by taking possession of such assets.

To the extent the fund invests in lower-rated securities, the achievement of the fund's goals is more dependent on the Investment Manager's investment analysis than would be the case if the fund were investing in higher-rated securities.

#### Market Risk
The value of securities in a 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 (including perceptions about monetary policy, interest rates or the risk of default), government actions (including protectionist measures, intervention in

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the financial markets or other regulation, and changes in fiscal, monetary or tax policies), geopolitical events or changes (including natural disasters, epidemics or pandemics, terrorism and war), and factors related to a specific issuer, geography, industry or sector. In addition, the increasing popularity of passive index-based investing may have the potential to increase security price correlations and volatility. (As passive strategies generally buy or sell securities based simply on inclusion and representation in an index, securities prices will have an increasing tendency to rise or fall based on whether money is flowing into or out of passive strategies rather than based on an analysis of the prospects and valuation of individual securities. This may result in increased market volatility as more money is invested through passive strategies). During a general downturn in financial markets, multiple asset classes may decline in value simultaneously. These and other factors may lead to increased volatility and reduced liquidity in the fund's portfolio holdings, particularly for larger investments. During those periods, the fund may experience high levels of shareholder redemptions, and may have to sell securities at times when it would otherwise not do so, and at unfavorable price.

Legal, political, regulatory and tax changes may cause fluctuations in markets and securities prices. In the past, governmental and non-governmental issuers have defaulted on, or have been forced to restructure, their debts, and many other issuers have faced difficulties obtaining credit. Defaults or restructurings by governments or others of their debts could have substantial adverse effects on economies, financial markets, and asset valuations around the world. In addition, financial regulators, including the U.S. Federal Reserve and the European Central Bank, at times have taken steps to maintain historically low interest rates, such as by purchasing bonds. Some governmental authorities at times have taken steps to devalue their currencies substantially or have taken other steps to counter actual or anticipated market or other developments. Steps by those regulators and authorities to implement, or to curtail or taper, these activities could have substantial negative effects on financial markets. The withdrawal of support, failure of efforts in response to a financial crisis, or investor perception that these efforts are not succeeding could negatively affect financial markets generally as well as the values and liquidity of certain securities.

The fund is subject to the risk that geopolitical events will disrupt securities markets and adversely affect global economies and markets. War, terrorism, economic uncertainty, and other geopolitical events (including sanctions, tariffs, exchange controls or other cross-border trade barriers) have led, and in the future may lead, to increased short-term market volatility and may have adverse long-term effects on U.S. and world economies and markets generally. In addition, trade disputes (such as the "trade war" between the United States and China that intensified in 2018 and 2019) may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree. Events such as these and their impact on the fund are difficult to predict. For example, Russia's military invasion of Ukraine in February 2022 resulted in the United States, other countries, and certain international organizations levying broad economic sanctions against Russia and Russian individuals. These sanctions and any additional sanctions or other intergovernmental actions that may be undertaken against Russia in the future may result in the devaluation of the ruble, a downgrade in the country's credit rating, and a decline in the value and liquidity of Russian securities. Such actions could result in a freeze of Russian securities, impairing the ability of a fund to buy, sell, receive, or deliver those securities. Retaliatory action by the Russian government could involve the seizure of U.S. and/or European residents' assets, and any such actions are likely to impair the value and liquidity of such assets. Any or all of these potential results could have an adverse/recessionary effect on Russia's economy. All of these factors could have a negative effect on the performance of funds that have significant exposure to Russia.

In addition, the extent and duration of the military action associated with Russia's invasion of Ukraine, resulting sanctions and resulting future market disruptions, including declines in Russian stock markets and the value of the ruble against the U.S. dollar, are impossible to predict, but could be significant. Any disruptions caused by such military action or other actions (including cyberattacks and espionage) or resulting actual and threatened responses to such activity, including purchasing and financing restrictions, boycotts or changes in consumer or purchaser preferences, sanctions, tariffs or cyberattacks on the Russian government, Russian companies, or Russian individuals, including politicians, may negatively impact Russia's economy and Russian issuers of securities in which the fund invests. Actual and threatened responses to such military action may also impact the markets for certain Russian commodities, such as oil and natural gas, as well as other sectors of the Russian economy, and may likely have collateral impacts on such sectors globally. These and any related events could have a significant impact on fund performance and the value of an investment in the fund.

Likewise, natural and environmental disasters, epidemics or pandemics, and systemic market dislocations may be highly disruptive to economies and markets, and may result in significant market volatility, exchange trading suspensions or closures, or a substantial economic downturn or recession. Those events, as well as other changes in foreign and domestic economic and political conditions, also could disrupt the operations of the fund or its service providers or adversely affect individual issuers or related groups of issuers, interest rates, credit ratings, default rates, inflation, supply chains, consumer demand, investor sentiment, and other factors affecting the value or liquidity of the fund's investments.

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An outbreak of respiratory disease caused by a novel coronavirus designated as COVID-19 was first detected in China in December 2019 and subsequently spread internationally. The transmission of COVID-19 and efforts to contain its spread have resulted in, among other things, border closings and other significant travel restrictions and disruptions; significant disruptions to business operations, supply chains and customer activity; lower consumer demand for goods and services; higher levels of unemployment; event cancellations and restrictions; service cancellations, reductions and other changes; significant challenges in healthcare service preparation and delivery; prolonged quarantines; and general concern and uncertainty. These impacts have negatively affected, and may continue to negatively affect, the global economy, the economies of individual countries, and the financial performance of individual issuers, sectors, industries, asset classes, and markets in significant and unforeseen ways. The COVID-19 pandemic also has resulted in significant market volatility, exchange trading suspensions and closures, declines in global financial markets, higher default rates, and economic downturns and recessions, and may continue to have similar effects in the future. In addition, actions taken by government and quasi-governmental authorities and regulators throughout the world in response to the COVID-19 pandemic, including significant fiscal and monetary policies changes, may affect the value, volatility, and liquidity of some securities and other assets. Health crises caused by the COVID-19 pandemic may also exacerbate other pre-existing political, social, economic, market and financial risks. The effects of the outbreak in developing or emerging market countries may be greater due to less established health care systems. The foregoing could impair the fund's ability to maintain operational standards (such as with respect to creations and redemptions of fund shares), disrupt the operations of the fund's service providers, adversely affect the value and liquidity of the fund's investments, and negatively impact the fund's performance and your investment in the fund. Given the significant uncertainty surrounding the magnitude, duration, reach, costs and effects of the COVID-19 pandemic, as well as actions that have been or could be taken by governmental authorities or other third parties, it is difficult to predict its potential impacts on a fund's investments.

Securities and financial markets may be susceptible to market manipulation or other fraudulent trade practices, which could disrupt the orderly functioning of these markets, contribute to overall market volatility and adversely affect the values of the fund's investments.

Given the increasing interdependence among global economies and markets, conditions in one country, region or market might adversely affect financial conditions or issuers in other countries, regions or markets. For example, any partial or complete dissolution of the Economic and Monetary Union of the European Union, or any increased uncertainty as to its status, could have significant adverse effects on global currency and financial markets, and on the values of the fund's investments. On January 31, 2020, the United Kingdom formally withdrew from the European Union (commonly known as "Brexit"). An agreement between the United Kingdom and the European Union governing their future trade relationship became effective January 1, 2021. While the full impact of Brexit is unknown, Brexit has already resulted in volatility in European and global markets. Potential negative long-term effects could include, among others, greater market volatility and illiquidity, disruptions to world securities markets, currency fluctuations, deterioration in economic activity, a decrease in business confidence, and an increased likelihood of a recession in the United Kingdom. To the extent the fund has focused its investments in a particular country, region or market, adverse geopolitical and other events impacting that country, region or market could have a disproportionate impact on the fund.

#### Master Limited Partnerships (MLPs)
An MLP generally is a publicly traded company organized as a limited partnership or limited liability company and treated as a partnership for U.S. federal income tax purposes. MLPs may derive income and gains from, among other things, the exploration, development, mining or production, processing, refining, transportation (including pipelines transporting gas, oil, or products thereof), or the marketing of any mineral or natural resources. MLPs generally have two classes of owners, the general partner and limited partners. The general partner of an MLP is typically owned by one or more of the following: a major energy company, an investment fund, or the direct management of the MLP. The general partner may be structured as a private or publicly traded corporation or other entity. The general partner typically controls the operations and management of the MLP through an up to 2% equity interest in the MLP plus, in many cases, ownership of common units and subordinated units. Limited partners own the remainder of the partnership through ownership of common units and have a limited role in the partnership's operations and management.

MLP securities in which certain funds may invest can include, but are not limited to: (i) equity securities of MLPs, including common units, preferred units or convertible subordinated units; (ii) debt securities of MLPs, including debt securities rated below investment grade; (iii) securities of MLP affiliates; (iv) securities of open-end funds, closed-end funds or exchange-traded funds ("ETFs") that invest primarily in MLP securities; or (v) exchange-traded notes whose returns are linked to the returns of MLPs or MLP indices.

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The risks of investing in an MLP are generally those inherent in investing in a partnership as opposed to a corporation. For example, MLP common units represent an equity ownership interest in a partnership, providing limited voting rights and entitling the holder to a share of the company's success through distributions and/or capital appreciation. Unlike shareholders of a corporation, common unit holders do not elect directors annually and generally have the right to vote only on certain significant events, such as mergers, a sale of substantially all of the assets, removal of the general partner or material amendments to the partnership agreement. In addition, state law governing partnerships is often less restrictive than state law governing corporations. Accordingly, there may be fewer protections afforded investors in an MLP than investors in a corporation.

MLP common units and other equity securities can be affected by macro-economic and other factors affecting the stock market in general, expectations of interest rates, investor sentiment towards MLPs, changes in a particular issuer's financial condition, or unfavorable or unanticipated poor performance of a particular issuer (in the case of MLPs, generally measured in terms of distributable cash flow). Prices of common units of individual MLPs and other equity securities can also be affected by fundamentals unique to the partnership or company, including earnings power and coverage ratios.

Additional risks involved with investing in an MLP are risks associated with the specific industry or industries in which the partnership invests. For example, companies operating in the energy MLP sector are subject to risks that are specific to the industry in which they operate. MLPs and other companies that provide crude oil, refined product and natural gas services are subject to supply and demand fluctuations in the markets they serve which may be impacted by a wide range of factors including fluctuating commodity prices, weather, increased conservation or use of alternative fuel sources, increased governmental or environmental regulation, depletion, rising interest rates, declines in domestic or foreign production, accidents or catastrophic events, and economic conditions, among others. Energy MLP companies are subject to varying demand for oil, natural gas or refined products in the markets they serve, as well as changes in the supply of products requiring gathering, transport, processing, or storage due to natural declines in reserves and production in the supply areas serviced by the companies' facilities. Declines in oil or natural gas prices, as well as adverse regulatory decisions, may cause producers to curtail production or reduce capital spending for production or exploration activities, which may in turn reduce the need for the services provided by energy MLP companies. Lower prices may also create lower processing margins. Energy MLPs may also be subject to regulation by the Federal Energy Regulatory Commission ("FERC") with respect to tariff rates that these companies may charge for interstate pipeline transportation services. An adverse determination by FERC with respect to tariff rates of a pipeline MLP could have a material adverse effect on the business, financial conditions, result of operations, cash flows and prospects of that pipeline MLP and its ability to make cash distributions to its equity owners.

#### Money Market Instruments
Money market instruments, or short-term debt instruments, consist of obligations such as commercial paper, bank obligations (*e.g.*, certificates of deposit and bankers' acceptances), repurchase agreements, and various government obligations, such as Treasury bills. These instruments have a remaining maturity of one year or less and are generally of high credit quality. Money market instruments may be structured to be, or may employ a trust or other form so that they are, eligible investments for money market funds. For example, put features can be used to modify the maturity of a security or interest rate adjustment features can be used to enhance price stability. If a structure fails to function as intended, adverse tax or investment consequences may result. Neither the IRS nor any other regulatory authority has ruled definitively on certain legal issues presented by certain structured securities. Future tax or other regulatory determinations could adversely affect the value, liquidity, or tax treatment of the income received from these securities or the nature and timing of distributions made by the funds.

Commercial paper is a money market instrument issued by banks or companies to raise money for short-term purposes. Commercial paper is usually sold on a discounted basis rather than as an interest-bearing instrument. Unlike some other debt obligations, commercial paper is typically unsecured, which increases the credit risk associated with this type of investment. In some cases, commercial paper may be backed by some form of credit enhancement, typically in the form of a guarantee by a commercial bank. Commercial paper backed by guarantees of foreign banks may involve additional risk due to the difficulty of obtaining and enforcing judgments against such banks and the generally less restrictive regulations to which such banks are subject. Commercial paper also may be issued as an asset-backed security (that is, backed by a pool of assets representing the obligations of a number of different issuers), in which case certain of the risks discussed in "Mortgage-backed and Asset-backed securities" would apply. Commercial paper is traded primarily among institutions.

Certificates of deposit are receipts issued by a depository institution in exchange for the deposit of funds. The issuer agrees to pay the amount deposited plus interest to the bearer of the receipt on the date specified on the certificate. The certificate usually can be traded in the secondary market prior to maturity. Certificates of deposit may include those issued by foreign banks

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outside the United States. Such certificates of deposit include Eurodollar and Yankee certificates of deposit. Eurodollar certificates of deposit are U.S. dollar-denominated certificates of deposit issued by branches of foreign and domestic banks located outside the United States. Yankee certificates of deposit are certificates of deposit issued by a U.S. branch of a foreign bank denominated in U.S. dollars and held in the United States.

Bankers' acceptances typically arise from short-term credit arrangements designed to enable businesses to obtain funds to finance commercial transactions. Generally, an acceptance is a time draft drawn on a bank by an exporter or an importer to obtain a stated amount of funds to pay for specific merchandise. The draft is then "accepted" by a bank that, in effect, unconditionally guarantees to pay the face value of the instrument on its maturity date. The acceptance may then be held by the accepting bank as an earning asset or it may be sold in the secondary market at the going rate of discount for a specific maturity. Although maturities for acceptances can be as long as 270 days, most acceptances have maturities of six months or less.

Time deposits are interest-bearing non-negotiable deposits at a bank or a savings and loan association that have a specific maturity date. A time deposit earns a specific rate of interest over a definite period of time. Time deposits cannot be traded on the secondary market and those exceeding seven days and with a withdrawal penalty are considered to be illiquid.

In accordance with rules issued by the SEC, the fund may from time to time invest all or a portion of its assets, including any cash balances in money market and/or short-term bond funds advised by the Investment Manager or its affiliates. In connection with such investments, the Investment Manager may waive a portion of the advisory fees otherwise payable by the fund. See "Charges and expenses" in Part I of this SAI for the amount, if any, waived by the Investment Manager in connection with such investments.

#### Mortgage-backed and Asset-backed Securities
Mortgage-backed securities, including collateralized mortgage obligations ("CMOs"), stripped mortgage-backed securities and securities that reflect an interest in reverse mortgages, represent a participation in, or are secured by, mortgage loans or otherwise are secured by real estate related collateral. Mortgage-backed securities may be issued by agencies or instrumentalities of the U.S. government (and may not be guaranteed or insured by the U.S. government, such as those issued by Freddie Mac, Fannie Mae, and FHLBs), foreign governments (or their agencies or instrumentalities), or non-governmental issuers. Interest and principal payments (including prepayments) on the mortgage loans underlying mortgage-backed securities typically pass through to the holders of the mortgage-backed securities or serve as the source for payments on the mortgage-backed securities. Asset-backed securities are structured like mortgage-backed securities, but instead of mortgage loans or interests in mortgage loans, the underlying assets may include such items as motor vehicle installment sales or installment loan contracts, home equity loans, leases of various types of real, personal and other property and receivables from credit card agreements. Similar to mortgage-backed securities, other types of asset-backed securities may be issued by agencies or instrumentalities of the U.S. government (and may or may not be guaranteed or insured by the U.S. government), foreign governments (or their agencies or instrumentalities), or non-governmental issuers.

Mortgage-backed securities may have yield and maturity characteristics corresponding to the underlying assets. Unlike traditional debt securities, which may pay a fixed rate of interest until maturity, when the entire principal amount comes due, payments on certain mortgage-backed securities include both interest and a partial repayment of principal. Besides the scheduled repayment of principal, repayments of principal may result from the voluntary prepayment or refinancing of the underlying mortgage loans or the foreclosure of collateral securing the underlying mortgage loans. If property owners make unscheduled prepayments on their mortgage loans, these prepayments will result in early payment of the applicable mortgage-backed securities. In that event the fund may be unable to invest the proceeds from the early payment of the mortgage-backed securities in an investment that provides as high a yield as those mortgage-backed securities. Consequently, early payment associated with mortgage-backed securities may cause these securities to experience significantly greater price and yield volatility than that experienced by traditional fixed-income securities. The occurrence of mortgage prepayments is affected by factors including the level of interest rates, general economic conditions, the location and age of the mortgage and other social and demographic conditions. During periods of falling interest rates, the rate of mortgage prepayments tends to increase, thereby tending to decrease the life of mortgage-backed securities. During periods of rising interest rates, the rate of mortgage prepayments usually decreases, thereby tending to increase the life of mortgage-backed securities. If the life of a mortgage-backed security is inaccurately predicted, the fund may not be able to realize the rate of return it expected.

The fund may invest in mortgage-backed securities that represent pools of mortgage loans with variable rates of interest (such loans, "ARMs"). Adjustable-rate mortgage-backed securities, like traditional mortgage-backed securities, are interests in pools of

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mortgage loans that provide investors with payments consisting of both principal and interest as mortgage loans in the underlying mortgage pool are paid off by the borrowers. Unlike fixed-rate mortgage-backed securities, adjustable-rate mortgage-backed securities are collateralized by or represent interests in ARMs. Interest rates for ARMs are reset at periodic intervals, usually by reference to an interest rate index or market interest rate. Although the rate adjustment feature may act as a buffer to reduce sharp changes in the value of ARMs these securities are still subject to changes in value based on, among other things, changes in market interest rates or changes in the issuer's creditworthiness. If rates increase due to a reset, the risk of default by underlying borrowers may increase. Because the interest rates are reset only periodically, changes in the interest rate on ARMs may lag changes in prevailing market interest rates. The market value of an adjustable-rate mortgage-backed security may be adversely affected if interest rates increase faster than the rates of interest payable on the ARMs underlying the security. Also, some ARMs are subject to caps or floors that limit the maximum change in the interest rate during a specified period or over the life of the ARM. As a result, changes in the interest rate on an ARM may not fully reflect changes in prevailing market interest rates during certain periods.

The fund may also invest in mortgage-backed securities that represent pools of "hybrid" ARMs, underlying mortgages that combine fixed-rate and adjustable rate features. A hybrid ARM is a type of mortgage in which the interest rate is fixed for a specified period and then resets periodically, or floats, for the remaining mortgage term. During the initial interest period, hybrid ARMs behave more like fixed-rate mortgage loans. All hybrid ARMs have a reset date, the date on which a hybrid ARM changes from a fixed interest rate to a floating interest rate. At the reset date, a hybrid ARM can adjust by a maximum specified amount based on a margin over an identified index. Like ARMs, hybrid ARMs have periodic and lifetime limitations on the increases that can be made to the interest rates that mortgagors pay. Therefore, if during a floating rate period interest rates rise above the interest rate limits of the hybrid ARM, a fund holding a security backed by that hybrid ARM does not benefit from further increases in interest rates.

Mortgage-backed and asset-backed securities are less effective than other types of securities as a means of "locking in" attractive long-term interest rates. One reason is the need to reinvest prepayments of principal; another is the possibility of significant unscheduled prepayments resulting from declines in interest rates. These prepayments would have to be reinvested at lower rates. The automatic interest rate adjustment feature of mortgages underlying ARMs likewise reduces the ability to lock-in attractive rates. As a result, mortgage-backed and asset-backed securities may have less potential for capital appreciation during periods of declining interest rates than other securities of comparable maturities, although they may have a similar risk of decline in market value during periods of rising interest rates. Prepayments may also significantly shorten the effective maturities of these securities, especially during periods of declining interest rates. Conversely, during periods of rising interest rates, a reduction in prepayments may increase the effective maturities of these securities, subjecting them to a greater risk of decline in market value in response to rising interest rates than traditional debt securities, and, therefore, potentially increasing the volatility of the fund.

At times, some mortgage-backed and asset-backed securities will have higher than market interest rates and therefore will be purchased at a premium above their par value. Prepayments may cause greater losses on securities purchased at a premium than securities that are not purchased at a premium.

Mortgage-backed and asset-backed securities are subject to varying degrees of credit risk, depending on whether they are issued, or are guaranteed or insured, by agencies or instrumentalities of the U.S. government or by non-governmental issuers. Securities issued by private organizations may not be readily marketable, and since the deterioration of worldwide economic and liquidity conditions that became acute in 2008, mortgage-backed and asset-backed securities have been subject to greater liquidity risk. These conditions may occur again. Also, government actions and proposals affecting the terms of underlying home loans, changes in demand for products (e.g., automobiles) financed by those loans, and the inability of borrowers to refinance existing loans (e.g., sub-prime mortgages), have had, and may continue to have, adverse valuation and liquidity effects on mortgage-backed and asset-backed securities., There can be no assurance that in the future the market for mortgage-backed and asset-backed securities will continue to improve and become more liquid.

Mortgage-related securities include, among other things, securities that reflect an interest in a pool of reverse mortgages. In a reverse mortgage, a lender makes a loan to a homeowner based on the homeowner's equity in his or her home. A homeowner must be age 62 or older to qualify for a reverse mortgage but is not necessarily required to have any minimum income. Generally, the homeowner is not required to pay interest or repay principal on the loan until the homeowner dies, sells the home, or ceases to use the home as his or her primary residence. There are three general types of reverse mortgages: (1) single-purpose reverse mortgages, which are offered by certain state and local government agencies and nonprofit organizations; (2) federally-insured reverse mortgages (known as home equity conversion mortgages), which are backed by the U. S. Department

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of Housing and Urban Development; and (3) proprietary reverse mortgages, which are privately offered loans. A mortgage-related security may be backed by a single type of reverse mortgage or by a combination of types of reverse mortgages. Reverse mortgage-related securities include agency and privately issued mortgage-related securities. The principal government guarantor of reverse mortgage-related securities is Ginnie Mae.

Reverse mortgage-related securities may be subject to risks different than other types of mortgage-related securities due to the unique nature of the underlying loans. The date of repayment for these loans is uncertain and may occur sooner or later than anticipated. The timing of payments for the corresponding mortgage-related security may also be uncertain. Because reverse mortgages are offered only to persons 62 and older and there may be no income restrictions, the loans may react differently than traditional home loans to market events. As a result, investors (which may include the fund) in notes issued by reverse mortgage trusts ("RMTs") may be deprived of payments to which they are entitled. This could result in losses to the fund. Investors, including the fund, may determine to pursue negotiations or legal claims or otherwise seek compensation from RMT service providers in certain instances. This may involve the fund incurring costs and expenses associated with such actions.

CMOs may be issued by a U.S. government agency or instrumentality or by a private issuer. Although payment of the principal of, and interest on, the underlying collateral securing privately issued CMOs may be guaranteed by the U.S. government or its agencies or instrumentalities (such as Freddie Mac, Fannie Mae, or Ginnie Mae), these CMOs represent obligations solely of the private issuer and are not insured or guaranteed by the U.S. government, its agencies or instrumentalities or any other person or entity. CMOs may also be less liquid and may exhibit greater price volatility than other types of mortgage- or other asset-backed securities.

CMOs are designed to reduce the risk of prepayment for investors by issuing multiple classes of securities (or "tranches"), each having different maturities, interest rates and payment schedules, and with the principal and interest on the underlying mortgages allocated among the several classes in various ways. Payment of interest or principal on some classes or series of CMOs may be subject to contingencies or some classes or series may bear some or all of the risk of default on the underlying mortgages. CMOs of different classes or series are generally retired in sequence as the underlying mortgage loans in the mortgage pool are repaid. If enough mortgages are repaid ahead of schedule, the classes or series of a CMO with the earliest maturities generally will be retired prior to their maturities. Thus, the early retirement of particular classes or series of a CMO would have the same effect as the prepayment of mortgages underlying other mortgage-backed securities. Conversely, slower than anticipated prepayments can extend the effective maturities of CMOs, subjecting them to a greater risk of decline in market value in response to rising interest rates than traditional debt securities, and, therefore, potentially increasing their volatility.

Prepayments could result in losses on stripped mortgage-backed securities. Stripped mortgage-backed securities are usually structured with two classes that receive different portions of the interest and principal distributions on a pool of mortgage loans. A common type of stripped mortgage-backed security will have one class receiving all of the interest from the mortgage assets (interest only or "IOs"), while the other class will receive all of the principal (principal only or "POs"). The yield to maturity on an IO class of stripped mortgage-backed securities is extremely sensitive not only to changes in prevailing interest rates but also to the rate of principal payments (including prepayments) on the underlying assets. A rapid rate of principal prepayments may have a measurable adverse effect on the stripped mortgage-backed security's yield to maturity to the extent it invests in IOs. If the assets underlying the IO experience greater than anticipated prepayments of principal, the fund may fail to recoup fully its initial investment in these securities. Conversely, POs tend to increase in value if prepayments are greater than anticipated and decline if prepayments are slower than anticipated. Generally, the market value of POs is unusually volatile in response to changes in interest rates. The secondary market for stripped mortgage-backed securities may be more volatile and less liquid than that for other mortgage-backed securities, potentially limiting the fund's ability to buy or sell those securities at any particular time.

The risks associated with other asset-backed securities (including in particular the risks of issuer default and of early prepayment) are generally similar to those described above for CMOs. In addition, because asset-backed securities generally do not have the benefit of a security interest in the underlying assets that is comparable to a mortgage, asset-backed securities present certain additional risks that are not present with mortgage-backed securities. The ability of an issuer of asset-backed securities to enforce its security interest in the underlying assets may be limited. For example, revolving credit receivables are generally unsecured and the debtors on such receivables are entitled to the protection of a number of state and federal consumer credit laws, many of which give debtors the right to set-off certain amounts owed, thereby reducing the balance due. Automobile receivables generally are secured, but by automobiles, rather than by real property.

The value of asset-backed securities may be substantially dependent on the servicing of the underlying assets, and asset-backed securities are therefore subject to risks associated with negligence by, or defalcation of, the servicers of those assets.

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These risks may be heightened in the case of an asset-backed security collateralized by the fees earned by the servicer, as the servicer may have a reduced financial incentive to provide appropriate servicing. In certain circumstances, the mishandling of related documentation may also affect the rights of the security holders in and to the underlying collateral. The insolvency of entities that generate receivables or that utilize the assets may result in added costs and delays in addition to losses associated with a decline in the value of the underlying assets.

Payment of interest on asset-backed securities and repayment of principal largely depends on the cash flows generated by the underlying assets backing the securities and, in certain cases, may be supported by letters of credit, surety bonds, or other credit enhancements. The amount of market risk associated with asset-backed securities depends on many factors, including the deal structure (i.e., determination as to the amount of underlying assets or other support needed to produce the cash flows necessary to service interest and make principal payments), the quality of the underlying assets, the level of credit support, if any, provided for the securities, and the credit quality of the credit-support provider, if any. In recent years, a significant number of asset-backed security insurers have defaulted on their obligations.

Consistent with the fund's investment objective and policies, the fund may invest in other types of mortgage- and asset-backed securities offered currently or in the future, including certain yet-to-be-developed types of mortgage- and asset-backed securities which may be created as the market evolves.

**Additional Information Related to Freddie Mac and Fannie Mae***.* The extreme and unprecedented volatility and disruption that impacted the capital and credit markets beginning in 2008 led to market concerns regarding the ability of Freddie Mac and Fannie Mae to withstand future credit losses associated with securities held in their investment portfolios, and on which they provide guarantees, without the direct support of the federal government. On September 7, 2008, Freddie Mac and Fannie Mae were placed under the conservatorship of the Federal Housing Finance Agency (FHFA). Under the plan of conservatorship, the FHFA assumed control of, and generally has the power to direct, the operations of Freddie Mac and Fannie Mae, and is empowered to exercise all powers collectively held by their respective shareholders, directors and officers, including the power to: (1) take over the assets of and operate Freddie Mac and Fannie Mae with all the powers of the shareholders, the directors and the officers of Freddie Mac and Fannie Mae and conduct all business of Freddie Mac and Fannie Mae; (2) collect all obligations and money due to Freddie Mac and Fannie Mae; (3) perform all functions of Freddie Mac and Fannie Mae which are consistent with the conservator's appointment; (4) preserve and conserve the assets and property of Freddie Mac and Fannie Mae; and (5) contract for assistance in fulfilling any function, activity, action or duty of the conservator.

In connection with the actions taken by the FHFA, the Treasury has entered into certain preferred stock purchase agreements (SPAs) with each of Freddie Mac and Fannie Mae which establish the Treasury as the holder of a new class of senior preferred stock in each of Freddie Mac and Fannie Mae. The senior preferred stock was issued in connection with financial contributions from the Treasury to Freddie Mac and Fannie Mae. Although the SPAs are subject to amendment from time to time, currently the Treasury is obligated to provide such financial contributions up to an aggregate maximum amount determined by a formula set forth in the SPAs, and until such aggregate maximum amount is reached, there is not a specific end date to the Treasury's obligations.

The future status and role of Freddie Mac and Fannie Mae could be impacted by (among other things) the actions taken and restrictions placed on Freddie Mac and Fannie Mae by the FHFA in its role as conservator, the restrictions placed on Freddie Mac's and Fannie Mae's operations and activities under the SPAs, market responses to developments at Freddie Mac and Fannie Mae, downgrades or upgrades in the credit ratings assigned to Freddie Mac and Fannie Mae by nationally recognized statistical rating organizations (NRSROs) or ratings services, and future legislative and regulatory action that alters the operations, ownership, structure and/or mission of these institutions, each of which may, in turn, impact the value of, and cash flows on, any securities guaranteed by Freddie Mac and Fannie Mae.

In addition, the future of Freddie Mac and Fannie Mae, and other U.S. government-sponsored enterprises that are not backed by the full faith and credit of the U.S. government (GSEs), remains in question as the U.S. government continues to consider options ranging from structural reform, nationalization, privatization, or consolidation, to outright elimination. The issues that have led to significant U.S. government support for Freddie Mac and Fannie Mae have sparked serious debate regarding the continued role of the U.S. government in providing mortgage loan liquidity.

#### Options on Securities

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**Writing covered options**. The fund may write (*i.e.*, sell) covered call options and covered put options on optionable securities held in its portfolio or that it has an absolute and immediate right to acquire without additional cash consideration (or, if additional cash consideration is required, cash or other assets determined to be liquid by the Investment Manager in accordance with procedures established by the Trustees, in such amount as are set aside on the fund's books), when in the opinion of the Investment Manager such transactions are consistent with the fund's goal(s) and policies. Call options written by the fund give the purchaser the right to buy the underlying securities from the fund at a stated exercise price, regardless of the security's market price; put options written by the fund give the purchaser the right to sell the underlying securities to the fund at a stated exercise price, regardless of the security's market price.

The fund will receive a premium from writing a put or call option, which increases the fund's return on the underlying security in the event the option expires unexercised or is closed out at a profit. The amount of the premium reflects, among other things, the relationship between the exercise price and the current market value of the underlying security, the volatility of the underlying security, the amount of time remaining until expiration, current interest rates, and the effect of supply and demand in the options market and in the market for the underlying security. By writing a call option, if the fund holds the security, the fund limits its opportunity to profit from any increase in the market value of the underlying security above the exercise price of the option but continues to bear the risk of a decline in the value of the underlying security. If the fund does not hold the underlying security, the fund bears the risk that, if the market price exceeds the option strike price, the fund will suffer a loss equal to the difference at the time of exercise. By writing a put option, the fund assumes the risk that it may be required to purchase the underlying security for an exercise price higher than its then-current market value, resulting in a potential capital loss unless the security subsequently appreciates in value.

The fund may terminate an option that it has written prior to its expiration by entering into a closing purchase transaction, in which it purchases an offsetting option. A closing purchase transaction will ordinarily be effected in order to realize a profit on an outstanding option, to prevent an underlying instrument from being called, to permit the sale of the underlying instrument or to permit the writing of a new option containing different terms on such underlying instrument. The fund realizes a profit or loss from a closing transaction if the cost of the transaction (option premium plus transaction costs) is less or more than the premium received from writing the option. Because increases in the market price of a call option generally reflect increases in the market price of the security underlying the option, any loss resulting from a closing purchase transaction may be offset in whole or in part by unrealized appreciation of the underlying security.

If the fund writes a call option but does not own the underlying security, and when it writes a put option, the fund may be required to deposit cash or securities with its broker as "margin," or collateral, for its obligation to buy or sell the underlying security. As the value of the underlying security varies, the fund may have to deposit additional margin with the broker. Margin requirements are complex and are fixed by individual brokers, subject to minimum requirements currently imposed by the Federal Reserve Board and by stock exchanges and other self-regulatory organizations.

**Purchasing put options**. The fund may purchase put options to protect its portfolio holdings in an underlying security against a decline in market value. Such protection is provided during the life of the put option since the fund, as holder of the option, is able to sell the underlying security at the put exercise price regardless of any decline in the underlying security's market price. If such a price decline occurs, the put option will permit the fund to sell the security at the higher exercise price or to close out the option at a profit. In order for a put option to be profitable, the market price of the underlying security must decline sufficiently below the exercise price to cover the premium and transaction costs. By using put options in this manner, the fund will reduce any profit it might otherwise have realized from appreciation of the underlying security by the premium paid for the put option and by transaction costs. The fund may also purchase put options for other investment purposes, including to take a short position in the security underlying the put option.

**Purchasing call options**. The fund may purchase call options to hedge against an increase in the price of securities that the fund wants ultimately to buy. Such protection is provided during the life of the call option since the fund, as holder of the call option, is able to buy the underlying security at the exercise price regardless of any increase in the underlying security's market price. If such a price increase occurs, a call option will permit the fund to purchase the securities at the exercise price or to close out the option at a profit. In order for a call option to be profitable, the market price of the underlying security must rise sufficiently above the exercise price to cover the premium and transaction costs. The fund may also purchase call options for other investment purposes.

**Risk factors in options transactions**. The successful use of the fund's options strategies depends on the ability of the Investment Manager to forecast correctly interest rate and market movements. For example, if the fund were to write a call option

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based on the Investment Manager's expectation that the price of the underlying security would fall, but the price were to rise instead, the fund could be required to sell the security upon exercise at a price below the current market price. Similarly, if the fund were to write a put option based on the Investment Manager's expectation that the price of the underlying security would rise, but the price were to fall instead, the fund could be required to purchase the security upon exercise at a price higher than the current market price.

When the fund purchases an option, it runs the risk that it will lose its entire investment in the option in a relatively short period of time, unless the fund exercises the option or enters into a closing sale transaction before the option's expiration. If the price of the underlying security does not rise (in the case of a call) or fall (in the case of a put) to an extent sufficient to cover the option premium and transaction costs, the fund will lose part or all of its investment in the option. This contrasts with an investment by the fund in the underlying security, since the fund will not realize a loss if the security's price does not change.

The effective use of options also depends on the fund's ability to terminate option positions at times when the Investment Manager deems it desirable to do so. There is no assurance that the fund will be able to effect closing transactions at any particular time or at an acceptable price. If a secondary market in options were to become unavailable, the fund could no longer engage in closing transactions. Lack of investor interest might adversely affect the liquidity of the market for particular options or series of options. A market may discontinue trading of a particular option or options generally. In addition, a market could become temporarily unavailable if unusual events — such as volume in excess of trading or clearing capability — were to interrupt its normal operations. Although the fund may be able to offset to some extent any adverse effects of being unable to terminate an option position, the fund may experience losses in some cases as a result of such inability.

A market may at times find it necessary to impose restrictions on particular types of exchange-traded options transactions, such as opening transactions. For example, if an underlying security ceases to meet qualifications imposed by the market or the Options Clearing Corporation, new series of options on that security will no longer be opened to replace expiring series, and opening transactions in existing series may be prohibited. If an options market were to become unavailable, the fund as a holder of an option would be able to realize profits or limit losses only by exercising the option, and the fund, as option writer, would remain obligated under the option until expiration or exercise.

Disruptions in the markets for the securities underlying options purchased or sold by the fund could result in losses on the options. For example, if a fund is unable to purchase a security underlying a put option it had purchased, the fund may be unable to exercise the put option. If trading is interrupted in an underlying security, the trading of options on that security is normally halted as well. As a result, the fund as purchaser or writer of an option will be unable to close out its positions until options trading resumes, and it may be faced with considerable losses if trading in the security reopens at a substantially different price. In addition, the Options Clearing Corporation or other options markets may impose exercise restrictions in respect of exchange-traded options. If a prohibition on exercise is imposed at the time when trading in the option has also been halted, the fund as purchaser or writer of an option will be locked into its position until one of the two restrictions has been lifted. If the Options Clearing Corporation were to determine that the available supply of an underlying security appears insufficient to permit delivery by the writers of all outstanding calls in the event of exercise, it may prohibit indefinitely the exercise of put options. The fund, as holder of such a put option, could lose its entire investment if it is unable to exercise the put option prior to its expiration.

The fund may use both European-style options, which are only exercisable at a specific expiration time on the expiration date, and American-style options, which are exercisable at any time prior to the expiration date. Since an American-style option allows the holder to exercise its rights any time before the option's expiration, the writer of an American-style option has no control over when it will be required to fulfill its obligations as a writer of the option. (The writer of a European-style option is not subject to this risk because the holder may only exercise the option on its expiration date.)

Options can be traded either through established exchanges ("exchange traded options") or privately negotiated transactions (over-the-counter or "OTC" options). Exchange traded options are standardized with respect to, among other things, the underlying interest, expiration date, contract size and strike price. The terms of OTC options are generally negotiated by the parties to the option contract which allows the parties greater flexibility in customizing the agreement, but OTC options are generally less liquid than exchange traded options. OTC options purchased by the fund and assets held to cover OTC options written by the fund may, under certain circumstances, be considered illiquid securities for purposes of any limitation on the fund's ability to invest in illiquid securities. All option contracts involve credit risk if the counterparty to the option contract (*e.g.*, the clearing house or OTC counterparty) or the third party effecting the transaction in the case of cleared options (*e.g.*, futures commission merchant or broker/dealer) fails to perform. The credit risk in OTC options that are not cleared is dependent on the

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credit worthiness of the individual counterparty to the contract and may be greater than the credit risk associated with cleared options.

Foreign-traded options are subject to many of the same risks presented by internationally-traded securities. In addition, because of time differences between the United States and other countries, and because different holidays are observed in different countries, foreign options markets may be open for trading during hours or on days when U.S. markets are closed. As a result, option premiums may not reflect the current prices of the underlying interest in the United States.

There are significant differences between the securities and options markets that could result in an imperfect correlation between these markets, causing a given transaction not to achieve its objectives. In addition, many options, in particular OTC options, are complex and often valued based on subjective factors. Improper valuations can result in increased cash payment requirements to counterparties or a loss of value to the fund.

The market price of an option is affected by many factors, including changes in the market prices or dividend rates of underlying securities (or in the case of indices, the securities in such indices); the time remaining before expiration; changes in interest rates or exchange rates; and changes in the actual or perceived volatility of the relevant stock market and underlying securities. The market price of an option also may be adversely affected if the market for the option becomes less liquid.

In addition to options on securities and futures, the fund may also enter into options on futures, swaps, or other instruments as described elsewhere in this SAI.

#### Preferred Stocks and Convertible Securities
The fund may invest in preferred stocks or convertible securities. A preferred stock is a class of stock that generally pays dividends at a specified rate and has preference over common stock in the payment of dividends and the liquidation of an issuer's assets but is junior to the debt securities of the issuer in those same respects. Under ordinary circumstances, preferred stock does not carry voting rights. As with all equity securities, the value of preferred stock fluctuates based on changes in a company's financial condition and on overall market and economic conditions. The value of preferred stocks is particularly sensitive to changes in interest rates and is more sensitive to changes in an issuer's creditworthiness than is the value of debt securities. In addition, many preferred stocks may be called or redeemed prior to their maturity by the issuer under certain conditions, which can limit the benefit to investors of a decline in interest rates. Shareholders of preferred stock may suffer a loss of value if dividends are not paid. Additionally, if the issuer of preferred stock experiences economic or financial difficulties, its preferred stock may lose value due to the reduced likelihood that its board of directors will declare a dividend. Certain preferred stocks contain provisions that allow an issuer under certain conditions to skip or defer distributions. If the fund owns a preferred stock that is deferring its distribution, it may be required to report income for tax purposes despite the fact that it is not receiving current income on this position. Preferred stocks often are subject to legal provisions that allow for redemption in the event of certain tax or legal changes or at the issuer's call. In the event of redemption, the fund may not be able to reinvest the proceeds at comparable rates of return. Preferred stocks are subordinated to bonds and other debt securities in an issuer's capital structure in terms of priority for corporate income and liquidation payments, and therefore will be subject to greater credit risk than those debt securities. Preferred stocks may trade less frequently and in a more limited volume and may be subject to more abrupt or erratic price movements than many other securities, such as common stocks, corporate debt securities, and U.S. government securities.

Convertible securities include bonds, debentures, notes, preferred stocks and other securities that may be converted into or exchanged for, at a specific price or formula within a particular period of time, a prescribed amount of common stock or other equity securities of the same or a different issuer. The conversion may occur automatically upon the occurrence of a predetermined event or at the option of either the issuer or the security holder. The holder of a convertible security is generally entitled to participate in the capital appreciation resulting from a market price increase in the issuer's common stock and to receive interest paid or accrued on debt or dividends paid or accrued until the convertible security matures or is redeemed, converted or exchanged. Before conversion, convertible securities have characteristics similar to non-convertible debt or preferred securities, as applicable. Convertible securities rank senior to common stock in an issuer's capital structure and, therefore, normally entail less risk than the issuer's common stock. However, convertible securities may also be subordinate to any senior debt obligations of the issuer, and, therefore, an issuer's convertible securities may entail more risk than such senior debt obligations. Convertible securities usually offer lower interest or dividend yields than non-convertible debt securities of similar credit quality because of the potential for capital appreciation. In addition, convertible securities are often lower-rated securities.

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The market value of a convertible security is a function of its "investment value" and its "conversion value." A security's "investment value" represents the value of the security without its conversion feature (*i.e.*, a nonconvertible fixed income security). The investment value may be determined by reference to its credit quality and the current value of its yield to maturity or probable call date. At any given time, investment value may be dependent upon such factors as the general level of interest rates, the yield of similar nonconvertible securities, the financial strength of the issuer and the seniority of the security in the issuer's capital structure. A security's "conversion value" is determined by multiplying the number of shares the holder is entitled to receive upon conversion or exchange by the current market price of the underlying security. Because of the conversion feature, the market value of a convertible security will normally fluctuate in some proportion to changes in the market value of the underlying security, and, accordingly, convertible securities are subject to risks relating to the activities of the issuer and/or general market and economic conditions.

A convertible security generally will sell at a premium over its conversion value by the extent to which investors place value on the right to acquire the underlying common stock while holding a fixed income security. If the conversion value of a convertible security is significantly below its investment value, the convertible security generally trades like nonconvertible debt or preferred stock and its market value will not be influenced greatly by fluctuations in the market price of the underlying security. Conversely, if the conversion value of a convertible security is near or above its investment value, the market value of the convertible security is typically more heavily influenced by fluctuations in the market price of the underlying security. Generally, the amount of the premium decreases as the convertible security approaches maturity. Convertible securities generally have less potential for gain than common stocks.

The fund's investments in convertible securities may at times include securities that have a mandatory conversion feature, pursuant to which the securities convert automatically into common stock or other equity securities at a specified date and a specified conversion ratio, or that are convertible at the option of the issuer. Because conversion of the security is not at the option of the holder, the fund may be required to convert the security into the underlying common stock even at times when the value of the underlying common stock or other equity security has declined substantially.

The fund's investments in preferred stocks and convertible securities, particularly securities that are convertible into securities of an issuer other than the issuer of the convertible security, may be illiquid. The fund may not be able to dispose of such securities in a timely fashion or for a fair price, which could result in losses to the fund.

#### Private Placements and Restricted Securities
The fund may invest in securities that are purchased in private placements and, accordingly, are subject to restrictions on resale as a matter of contract or under federal securities laws. Because there may be relatively few potential purchasers for such investments, especially under adverse market or economic conditions or in the event of adverse changes in the financial condition of the issuer, the fund could find it more difficult to sell such securities when the Investment Manager believes it advisable to do so or may be able to sell such securities only at prices lower than if such securities were more widely held. There can be no assurance that a liquid market will exist for any such security at any particular time, and a security which when purchased was liquid in the institutional markets may subsequently become illiquid.

Many private placement securities are issued by companies that are not required to file periodic financial reports, leading to challenges in evaluating the company's overall business prospects and gauging how the investment is likely to perform over time. In addition, market quotations for these securities are less readily available. Due to the more limited financial information and lack of publicly available prices, it may be more difficult to determine the fair value of these securities for purposes of computing the fund's net asset value. As a result, the judgment of the Investment Manager may at times play a greater role in valuing these securities than in the case of publicly traded securities, and the fair value prices determined for the fund could differ from those of other market participants.

While such private placements may offer attractive opportunities for investment not otherwise available on the open market, the securities so purchased are often "restricted securities," i.e., securities which cannot be sold to the public without registration under the Securities Act of 1933 (the "Securities Act") or the availability of an exemption from registration (such as Rules 144, 144A or Regulation S), or which are "not readily marketable" because they are subject to other legal or contractual delays in or restrictions on resale. In addition, the issuer typically does not have an obligation to provide liquidity to investors by buying the securities back when the investor wants to sell. Disposing of these securities may involve time-consuming negotiation and legal expenses, and it may be difficult or impossible for the fund to sell them promptly at an acceptable price. The fund may have to bear the extra expense of registering these securities for resale and the risk of substantial delay in effecting the registration.

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Since the offering is not registered with the SEC, investors in a private placement have less protection under the federal securities laws against improper practices than investors in registered securities.

Generally speaking, restricted securities may be sold only to qualified institutional buyers, or in a privately negotiated transaction to a limited number of purchasers, or in limited quantities after they have been held for a specified period of time and other conditions are met pursuant to an exemption from registration, or in a public offering for which a registration statement is in effect under the Securities Act. The fund may be deemed to be an "underwriter" for purposes of the Securities Act when selling restricted securities to the public, and in such event the fund may be liable to purchasers of such securities if the registration statement prepared by the issuer, or the prospectus forming a part of it, is materially inaccurate or misleading. The SEC Staff currently takes the view that any delegation by the Trustees of the authority to determine that a restricted security is readily marketable (as described in the investment restrictions of the funds) must be pursuant to written procedures established by the Trustees and the Trustees have delegated such authority to the Investment Manager.

#### Real Estate Investment Trusts (REITs)
The fund may invest in REITs. REITs are pooled investment vehicles that invest primarily in income-producing real estate or real estate related loans or interests. REITs may concentrate their investments in specific geographic areas or in specific property types (i.e., hotels, shopping malls, residential complexes and office buildings). Like regulated investment companies such as the fund, REITs are not taxed on income distributed to shareholders provided that they comply with certain requirements under the Code. The fund will indirectly bear its proportionate share of any expenses (such as operating expenses and advisory fees) paid by REITs in which it invests in addition to the fund's own expenses.

Investing in REITs may involve certain unique risks in addition to those risks associated with investing in the real estate industry in general (such as possible declines in the value of real estate, lack of availability of mortgage funds, or extended vacancies of property). The market value of REIT shares and the ability of the REITs to distribute income may be adversely affected by several factors, including rising interest rates, changes in the national, state and local economic climate and real estate conditions, perceptions of prospective tenants of the safety, convenience and attractiveness of the properties, the ability of the owners to provide adequate management, maintenance and insurance, the cost of complying with the Americans with Disabilities Act, increased competition from new properties, the impact of present or future environmental legislation and compliance with environmental laws, failing to maintain their exemptions from registration under the Investment Company Act, changes in real estate taxes and other operating expenses, adverse changes in governmental rules and fiscal policies, adverse changes in zoning laws, and other factors beyond the control of the issuers of the REITs.

REITs are generally classified as equity REITs, mortgage REITs or a combination of equity and mortgage REITs ("hybrid REITs"). Equity REITs invest the majority of their assets directly in real property and derive income primarily from the collection of rents. Equity REITs can also realize capital gains by selling properties that have appreciated in value. Mortgage REITs invest the majority of their assets in real estate mortgages and derive income from the collection of interest payments. Equity REITs may be affected by changes in the value of the underlying property owned by the REITs, while mortgage REITs may be affected by the risk of borrower default, the likelihood of which is increased for mortgage REITs that invest in sub-prime mortgages. REITs, and mortgage REITs in particular, are also subject to interest rate risk. Rising interest rates may cause REIT investors to demand a higher annual yield, which may, in turn, cause a decline in the market price of the equity securities issued by a REIT. Rising interest rates also generally increase the costs of obtaining financing, which could cause the value of the fund's REIT investments to decline. During periods when interest rates are declining, mortgages are often refinanced. Refinancing may reduce the yield on investments in mortgage REITs. In addition, since REITs depend on payment under their mortgage loans and leases to generate cash to make distributions to their shareholders, investments in REITs may be adversely affected by defaults on such mortgage loans or leases. A hybrid REIT combines the characteristics of equity REITs and mortgage REITs, generally by holding both ownership interests and mortgage interests in real estate, and thus may be subject to risks associated with both real estate ownership and investments in mortgage-related securities.

Investing in certain REITs, which often have small market capitalizations, may also involve the same risks as investing in other small capitalization companies. REITs may have limited financial resources and their securities may trade less frequently and in limited volume and may be subject to more abrupt or erratic price movements than larger company securities. Historically, small capitalization stocks, such as REITs, have been more volatile in price than the larger capitalization stocks such as those included in the S&P 500 Index. The management of a REIT may be subject to conflicts of interest with respect to the operation of the business of the REIT and may be involved in real estate activities competitive with the REIT. REITs may own properties through

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joint ventures or in other circumstances in which the REIT may not have control over its investments. REITs may incur significant amounts of leverage.

REITs are dependent upon their operators' management skills, are generally not diversified (except to the extent the Code requires), and are subject to heavy cash flow dependency, borrower default or self-liquidation. REITs are also subject to the possibility of failing to qualify for the tax-advantaged treatment available to REITs under the Code or failing to maintain their exemptions from registration under the 1940 Act. In addition, REITs may be adversely affected by changes in federal tax law, for example, by limiting their permissible businesses or investments. REITs may have limited financial resources, may trade less frequently and in a limited volume, and may be subject to more abrupt or erratic price movements than more widely held securities.

The fund's investment in a REIT may result in the fund making distributions that constitute a return of capital to fund shareholders for federal income tax purposes or may require the fund to accrue and distribute income not yet received. In addition, distributions by a fund from REITs will not qualify for the corporate dividends-received deduction, or, generally, for treatment as qualified dividend income.

#### Redeemable Securities
Certain securities held by the fund may permit the issuer at its option to "call" or redeem its securities. Issuers of redeemable securities are generally more likely to exercise a "call" option in periods when interest rates are below the rate at which the original security was issued. If an issuer were to redeem securities held by the fund during a time of declining interest rates, the fund may not be able to reinvest the proceeds in securities providing the same investment return as the securities redeemed. The fund also may fail to recover additional amounts (i.e., premiums) paid for securities with higher interest rates, resulting in an unexpected capital loss.

#### Repurchase Agreements
A repurchase agreement is a contract under which the fund, the buyer under the contract, acquires a security for a relatively short period (usually not more than one week) subject to the obligation of the seller (or repurchase agreement counterparty) to repurchase, and the fund to resell, the security at a fixed time and price, which represents the fund's cost plus interest (or, for repurchase agreements under which the fund acquires a security and then sells it short, the fund's cost of "borrowing" the security). A repurchase agreement with a stated maturity of longer than one week is generally considered an illiquid investment. It is the fund's present intention to enter into repurchase agreements only with banks and registered broker-dealers. The fund may enter into repurchase agreements, including with respect to securities it wishes to sell short. See "Short Sales" in this SAI. Certain of the repurchase agreements related to securities sold short may provide that, at the option of the fund, settlement may be made by delivery of cash equal to the difference between (a) the sum of (i) the market value of the securities sold short at the time the repurchase agreement is closed out and (ii) transaction costs associated with the acquisition in the market by the repurchase agreement counterparty of the securities sold short and (b) the repurchase price specified in the repurchase agreement.

The fund may be exposed to the credit risk of the repurchase agreement counterparty (or seller) in the event that the counterparty is unable or unwilling to close out the repurchase agreement in accordance with its terms or the parties disagree as to the meaning or application of those terms. In such an event, the fund may be subject to expenses, delays, and risk of loss, including: (i) possible declines in the value of the underlying security while the fund seeks to enforce its rights under the agreement; (ii) possible reduced levels of income and lack of access to income during this period; and (iii) the inability to enforce its rights and the expenses involved in attempted enforcement. If the seller defaults, the fund could realize a loss on the sale of the underlying security to the extent that the proceeds of the sale including accrued interest are less than the resale price provided in the agreement including interest. In addition, if the seller should be involved in bankruptcy or insolvency proceedings, the fund may incur delay and costs in selling the underlying security or may suffer a loss of principal and interest if the fund is treated as an unsecured creditor and required to return the underlying collateral to the seller's estate. The fund is also subject to the risk that the repurchase agreement instrument may not perform as expected.

Pursuant to no-action relief granted by the SEC, the fund may transfer uninvested cash balances into a joint account, along with cash of other Putnam funds and certain other accounts. These balances may be invested in one or more repurchase agreements and/or short-term money market instruments.

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The fund may also enter into reverse repurchase agreements. Under a reverse repurchase agreement, the fund sells portfolio assets to another party subject to an agreement by the fund to repurchase the same assets from that party at an agreed upon price and date. During the reverse repurchase agreement period, the fund continues to receive principal and interest payments on the assets and also has the opportunity to earn a return on the collateral furnished by the counterparty to secure its obligation to redeliver the assets. The fund can use the proceeds received from entering into a reverse repurchase agreement to make additional investments, which generally causes the fund's portfolio to behave as if it were leveraged.

When entering into a reverse repurchase agreement, the fund bears the risk of delay and costs involved in recovery of securities if the initial purchaser of the securities fails to return the securities upon repurchase or fails financially. These delays and costs could be greater with respect to foreign securities. Although securities repurchase transactions are generally marked to market daily, the fund also faces the risk that securities subject to a reverse repurchase transaction will decline quickly in value, and the fund will remain obligated to repurchase those securities at a higher price, potentially resulting in a loss. If the buyer in a reverse repurchase agreement files for bankruptcy or becomes insolvent, the fund may be unable to recover the securities it sold and as a result would realize a loss equal to the difference between the value of those securities and the payment it received for them. The size of this loss will depend upon the difference between what the buyer paid for the securities the fund sold to it and the value of those securities (*e.g.*, a buyer may pay $95 for a bond with a market value of $100). In the event of a buyer's bankruptcy or insolvency, the fund's use of proceeds from the sale of its securities may be restricted while the other party or its trustee or receiver determines whether to honor the fund's right to repurchase the securities. The fund's use of reverse repurchase agreements also subjects the fund to interest costs based on the difference between the sale and repurchase price of a security involved in such a transaction. Additionally, reverse repurchase agreements entail the same risks as over-the-counter derivatives. These include the risk that the counterparty to the reverse repurchase agreement may not be able to fulfill its obligations, as discussed above, that the parties may disagree as to the meaning or application of contractual terms, or that the instrument may not perform as expected.

#### Securities of Other Investment Companies
Securities of other investment companies, including shares of open- and closed-end investment companies and unit investment trusts (which may include ETFs), represent interests in collective investment portfolios that, in turn, invest directly in underlying instruments. The fund may invest in other investment companies when it has more uninvested cash than the Investment Manager believes is advisable, when there is a shortage of direct investments available, or when the Investment Manager believes that investment companies offer attractive values.

Investment companies may be structured to perform in a similar fashion to a broad-based securities index or may focus on a particular strategy or class of assets. Passive ETFs typically seek to track the performance or dividend yield of specific indexes or companies in related industries, though unlike the index, an ETF incurs administrative expenses and transaction costs in trading securities. These indexes may be broad-based, sector-based or international. Investing in investment companies involves substantially the same risks as investing directly in the underlying instruments, but also involves expenses at the investment company-level, such as portfolio management fees and operating expenses. These expenses are in addition to the fees and expenses of the fund itself, which may lead to duplication of expenses while the fund owns another investment company's shares. In addition, investing in investment companies involves the risk that they will not perform in exactly the same fashion, or in response to the same factors, as the underlying instruments or index. To the extent the fund invests in other investment companies that are professionally managed, its performance will also depend on the investment and research abilities of investment managers other than the Investment Manager.

Open-end investment companies typically offer their shares continuously at net asset value plus any applicable sales charge and stand ready to redeem shares upon shareholder request. The shares of certain other types of investment companies, such as ETFs and closed-end investment companies, typically trade on a stock exchange or over-the-counter at a premium or a discount to their net asset value. In the case of closed-end investment companies, the number of shares is typically fixed. The securities of closed-end investment companies and ETFs carry the risk that the price the fund pays or receives may be higher or lower than the investment company's net asset value. ETFs also are subject to the risk that the timing and magnitude of cash inflows and outflows from and to investors buying and redeeming shares in the ETF could create cash balances that cause the ETF's performance to deviate from the index (which remains "fully invested" at all times). Performance of an ETF and the index it is designed to track also may diverge because the composition of the index and the securities held by the ETF may occasionally differ. ETFs and closed-end investment companies are also subject to certain additional risks, including the risks of illiquidity and of possible trading halts or interruptions due to policies of the relevant exchange, unusual market conditions or other reasons. There can be no assurance that shares of a closed-end investment company or ETF will continue to be listed on an active

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exchange. The shares of investment companies, particularly closed-end investment companies, may also be leveraged, which would increase the volatility of the fund's net asset value.

**Business development companies ("BDCs").** BDCs are a type of closed-end fund regulated under the 1940 Act, which typically invest in and lend to small-and medium-sized private companies that may lack access to public equity markets for capital raising. Under the 1940 Act, BDCs must invest at least 70% of the value of their total assets in certain asset types, which are typically the securities of private U.S. businesses. Additionally, BDCs must make available significant managerial assistance to the issuers of such securities. BDCs are not taxed on income distributed to shareholders provided they qualify as a regulated investment company under the Code. The funds will indirectly bear their proportionate share of any management and other expenses charged by the BDCs in which they invest.

Because BDCs typically invest in small and medium-sized companies, a BDC's portfolio is subject to the risks inherent in investing in smaller companies, including that portfolio companies may be dependent on a small number of products or services and may be more adversely affected by poor economic or market conditions. Some BDCs invest substantially, or even exclusively, in one sector or industry group and therefore the BDC may be susceptible to adverse conditions and economic or regulatory occurrences affecting the sector or industry group, which tends to increase volatility and result in higher risk. Investments in BDCs are also subject to management risk, including management's ability to meet the BDC's investment objective, and management's ability to manage the BDC's portfolio during periods of market turmoil and as investors' perceptions regarding a BDC or its underlying investments change.

The extent to which the fund can invest in securities of other investment companies, including ETFs, is generally limited by federal securities laws. For more information regarding the tax treatment of ETFs, please see "Taxes" below.

#### Short Sales
The fund may engage in short sales of securities and/or currencies either as a hedge against potential declines in value of a portfolio security or currency or to realize appreciation when a security or currency that the fund does not own declines in value. Short sales are transactions in which the fund sells a security or currency it does not own to a third party by borrowing the security or currency in anticipation of purchasing the same security or currency at the market price on a later date to close out the short position. The fund may also engage in short sales by entering into a repurchase agreement with respect to the security it wishes to sell short. See "Repurchase Agreements" in this SAI. The fund will incur a gain if the price of the security or currency declines between the date of the short sale and the date on which the fund replaces the borrowed security or currency; and the fund will incur a loss if the price of the security or currency increases between those dates. Such a loss is theoretically unlimited since the potential increase in the market price of the security or currency sold short is not limited. Until the security is replaced, the fund must pay the lender (or repurchase agreement counterparty) any dividends or interest that accrues during the period of the loan (or repurchase agreement). To borrow (or enter into a repurchase agreement with respect to) the security, the fund also may be required to pay a premium, which would increase the cost of the security sold. The fund's successful use of short sales is subject to the Investment Manager's ability to accurately predict movements in the market price of the security or currency sold short. Short selling may involve financial leverage because the fund is exposed both to changes in the market price of the security or currency sold short and to changes in the value of securities or currencies purchased with the proceeds of the short sale, effectively leveraging its assets. Under adverse market conditions, a fund may have difficulty purchasing securities to meet its short sale delivery obligations, and may be required to close out its short position at a time when the fund would not choose to do so, and may therefore have to sell portfolio securities to raise the capital necessary to meet its short sale obligations at a time when fundamental investment considerations may not favor such sales. There is also a risk that a borrowed security will need to be returned to the lender on short notice. If a request for return of borrowed securities occurs at a time when other short sellers of the securities are receiving similar requests, a "short squeeze" can occur, and the fund may be compelled to replace borrowed securities previously sold short with purchases on the open market at the most disadvantageous time, possibly at prices significantly in excess of the proceeds received in originally selling the securities short. In addition, the fund may have difficulty purchasing securities to meet its delivery obligations in the case of less liquid securities sold short by the fund, such as certain emerging market country securities or securities of companies with smaller market capitalizations. In connection with short sale transactions, the fund may be required to pledge certain additional assets for the benefit of the securities lender (or repurchase agreement counterparty) and the fund may, while such assets remain pledged, be limited in its ability to invest those assets in accordance with the fund's investment strategies.

Short selling is a technique that may be considered speculative and involves risks beyond the initial capital necessary to secure each transaction. It should be noted that possible losses from short sales differ from those losses that could arise from a cash

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investment in a security because losses from a short sale may be limitless, while the losses from a cash investment in a security cannot exceed the total amount of the investment in the security.

Certain of the repurchase agreements related to securities sold short may provide that, at the option of the fund, in lieu of delivering the securities sold short, settlement may be made by delivery of cash equal to the difference between (a) the sum of (i) the market value of the securities sold short at the time the repurchase agreement is closed out and (ii) transaction costs associated with the acquisition in the market by the repurchase agreement counterparty of the securities sold short and (b) the repurchase price specified in the repurchase agreement. Because that cash amount represents the fund's maximum loss in the event of the insolvency of the counterparty, the fund will, except where the local market practice for foreign securities to be sold short requires payment prior to delivery of such securities, treat such amount, rather than the full notional amount of the repurchase agreement, as its "investment" in securities of the counterparty for purposes of all applicable investment restrictions, including its fundamental policy with respect to diversification.

See "Legal and Regulatory Risks Relating to Investment Strategy" in this SAI.

#### Short-Term Trading
In seeking the fund's objective(s), the Investment Manager will buy or sell portfolio securities whenever the Investment Manager believes it appropriate to do so. From time to time the fund will buy securities intending to seek short-term trading profits. A change in the securities held by the fund is known as "portfolio turnover" and generally involves some expense to the fund. This expense may include brokerage commissions or dealer markups and other transaction costs on both the sale of securities and the reinvestment of the proceeds in other securities. If sales of portfolio securities cause the fund to realize net short-term capital gains, such gains will be taxable as ordinary income when distributed to taxable individual shareholders. As a result of the fund's investment policies, under certain market conditions the fund's portfolio turnover rate may be higher than that of other ETFs. Portfolio turnover rate for a fiscal year is the ratio of the lesser of purchases or sales of portfolio securities to the monthly average of the value of portfolio securities — excluding securities whose maturities at acquisition were one year or less. The fund's portfolio turnover rate is not a limiting factor when the Investment Manager considers a change in the fund's portfolio.

#### Special Purpose Acquisition Companies
The fund may invest in stock, rights, warrants, and other securities of special purpose acquisition companies ("SPACs") or similar special purpose entities. A SPAC is a publicly traded company that raises investment capital in the form of a blind pool via an IPO for the purpose of acquiring an existing company. The shares of a SPAC are typically issued in "units" that include one share of common stock and one right or warrant (or partial right or warrant) conveying the right to purchase additional shares or partial shares. At a specified time following the SPAC's IPO (generally 1-2 months), the rights and warrants may be separated from the common stock at the election of the holder, after which they become freely tradeable. After going public and until an acquisition is completed, a SPAC generally invests the proceeds of its IPO (less a portion retained to cover expenses), which are held in trust, in U.S. government securities, money market securities and cash. To the extent the SPAC is invested in cash or similar securities, this may impact a fund's ability to meet its investment objective. If a SPAC does not complete an acquisition within a specified period of time after going public, the SPAC is dissolved, at which point the invested funds are returned to the SPAC's shareholders (less certain permitted expenses) and any rights or warrants issued by the SPAC expire worthless.

Because SPACs and similar entities are in essence blank check companies without an operating history or ongoing business other than seeking acquisitions, the value of their securities is particularly dependent on the ability of the entity's management to identify and complete a profitable acquisition. Some SPACs may pursue acquisitions only within certain industries or regions, which may increase the volatility of their prices. In addition, the securities issued by a SPAC, which are typically traded in the over-the-counter market, may be considered illiquid and/or be subject to restrictions on resale.

#### Structured Investments
A structured investment is a security having a return tied to an underlying index or other security or asset class. Structured investments generally are individually negotiated agreements and may be traded over-the-counter. Structured investments are organized and operated to restructure the investment characteristics of the underlying security. This restructuring involves the deposit with or purchase by an entity, such as a corporation or trust, or specified instruments (such as commercial bank loans) and the issuance by that entity or one or more classes of securities ("structured securities") backed by, or representing interests in, the underlying instruments. The cash flow on the underlying instruments may be apportioned among the newly issued

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structured securities to create securities with different investment characteristics, such as varying maturities, payment priorities and interest rate provisions, and the extent of such payments made with respect to structured securities is dependent on the extent of the cash flow on the underlying instruments. Because structured securities typically involve no credit enhancement, their credit risk generally will be equivalent to that of the underlying instruments. Investments in structured securities are generally of a class of structured securities that is either subordinated or unsubordinated to the right of payment of another class. Subordinated structured securities typically have higher yields and present greater risks than unsubordinated structured securities. Structured securities are typically sold in private placement transactions, and there currently is no active trading market for structured securities. Investments in government and government-related and restructured debt instruments are subject to special risks, including the inability or unwillingness to repay principal and interest, requests to reschedule or restructure outstanding debt and requests to extend additional loan amounts.

#### Swap Agreements
The fund may enter into swap agreements and other types of over-the-counter transactions such as caps, floors and collars with broker-dealers or other financial institutions for hedging or investment purposes. A swap involves the exchange by the fund with another party of their respective commitments to pay or receive cash flows, e.g., an exchange of floating rate payments for fixed-rate payments. The purchase of a cap entitles the purchaser, to the extent that a specified index or other underlying financial measure exceeds a predetermined value on a predetermined date or dates, to receive payments on a notional principal amount from the party selling the cap. The purchase of a floor entitles the purchaser, to the extent that a specified index or other underlying financial measure falls or other underlying measure below a predetermined value on a predetermined date or dates, to receive payments on a notional principal amount from the party selling the floor. A collar combines elements of a cap and a floor.

Swap agreements and similar transactions can be individually negotiated and structured to include exposure to a variety of different types of investments or market factors. A swap agreement may be structured with reference to an index of securities that is created and maintained by the swap counterparty. Depending on their structures, swap agreements may increase or decrease the fund's exposure to long-or short-term interest rates (in the United States or abroad), foreign currency values, mortgage securities, mortgage rates, corporate borrowing rates, or other factors such as security prices, inflation rates or the volatility of an index or one or more securities. For example, if the fund agrees to exchange payments in U.S. dollars for payments in a non-U.S. currency, the swap agreement would tend to decrease the fund's exposure to U.S. interest rates and increase its exposure to that non-U.S. currency and interest rates.

The fund may also engage in total return swaps, in which payments made by the fund or the counterparty are based on the total return of a particular reference asset or assets (such as an equity or fixed-income security, a combination of such securities, or an index). Total return swap agreements may be used to obtain exposure to a security, commodity, or market without owning or taking physical custody of such security or investing directly in such market. The fund may also enter into swap agreements on futures contracts including, but not limited to, index futures contracts. Swap agreements on futures contracts are generally subject to the same risks involved in the fund's use of futures contracts, in addition to the risks involved in the fund's use of swap agreements. See "Futures Contracts and Related Options." A total return swap, or a swap on a futures contract, may add leverage to a portfolio by providing investment exposure to an underlying asset or market where the fund does not own or take physical custody of such asset or invest directly in such market.

The value of the fund's swap positions would increase or decrease depending on the changes in value of the underlying rates, currency values, volatility or other indices or measures. Caps and floors have an effect similar to buying or writing options. Depending on how they are used, swap agreements may increase or decrease the overall volatility of the fund's investments and its share price. The fund's ability to engage in certain swap transactions may be limited by tax considerations.

The fund's ability to realize a profit from such transactions will depend on the ability of the financial institutions with which it enters into the transactions to meet their obligations to the fund. If a counterparty's creditworthiness declines, the value of the agreement would be likely to decline, potentially resulting in losses. If a default occurs by the other party to such transaction, the fund will have contractual remedies pursuant to the agreements related to the transaction, which may be limited by applicable law in the case of a counterparty's insolvency. If the returns of an index upon which a swap is based are unavailable or cannot be calculated (including where the index is created and maintained by the swap counterparty), the fund may experience difficulty in valuing the swap or in determining the amounts owed to or by the counterparty, regardless of whether the counterparty has defaulted. Under certain circumstances, suitable transactions may not be available to the fund, or the fund may be unable to close out its position under such transactions at the same time, or at the same price, as if it had purchased comparable publicly

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traded securities. Swaps carry counterparty risks that cannot be fully anticipated. Also, because swap transactions typically involve a contract between the two parties, such swap investments can be extremely illiquid, as it is uncertain as to whether another counterparty would wish to take assignment of the rights under the swap contract at a price acceptable to the fund.

The fund's investments in swaps will generate ordinary income and losses for federal income tax purposes and may cause the fund to recognize income without receiving cash with which to make the distributions necessary to qualify and be eligible for treatment as a regulated investment company and avoid a fund-level tax. The fund may therefore need to liquidate other investments, including when it is not advantageous to do so, to meet its distribution requirement. The fund is not permitted to carry forward any net ordinary losses it realizes in a taxable year to offset ordinary income it realizes in subsequent taxable years.

A credit default swap is an agreement between the fund and a counterparty that enables the fund to buy or sell protection against a credit event related to a particular issuer. One party, acting as a "protection buyer," makes periodic payments to the other party, a "protection seller," in exchange for a promise by the protection seller to make a payment to the protection buyer if a negative credit event (such as a delinquent payment or default) occurs with respect to a referenced bond or group of bonds. Credit default swaps may also be structured based on the debt of a basket of issuers, rather than a single issuer, and may be customized with respect to the default event that triggers purchase or other factors (for example, the Nth default within a basket, or defaults by a particular combination of issuers within the basket, may trigger a payment obligation). The fund may enter into credit default swap contracts for investment purposes. As a credit protection seller in a credit default swap contract, the fund would be required to pay the par (or other agreed-upon) value of a referenced debt obligation to the counterparty in the event of a default by a third party, such as a U.S. or non-U.S. corporate issuer, on the debt obligation. In return for its obligation, the fund would receive from the counterparty a periodic stream of payments over the term of the contract provided that no event of default has occurred. If no default occurs, the fund would keep the stream of payments and would have no payment obligations to the counterparty. As the seller, the fund would be subject to investment exposure on the notional amount of the swap.

The fund may also invest in credit default swap contracts to hedge against the risk of default of the debt of a particular issuer or basket of issuers or to attempt to profit from changes or perceived changes in the creditworthiness of the particular issuer(s) (also known as "buying credit protection"). In these cases, the fund would function as the counterparty referenced in the preceding paragraph. This would involve the risk that the investment may expire worthless and would only generate income in the event of an actual default by the issuer(s) of the underlying obligation(s) (or, as applicable, a credit downgrade or other indication of financial instability). It would also involve the risk that the seller may fail to satisfy its payment obligations to the fund in the event of a default. The purchase of credit default swaps involves costs, which will reduce the fund's return.

Credit default swaps involve a number of special risks. A protection seller may have to pay out amounts following a negative credit event greater than the value of the reference obligation delivered to it by its counterparty and the amount of periodic payments previously received by it from the counterparty. When the fund acts as a seller of a credit default swap, it is exposed to, among other things, leverage risk because if an event of default occurs the seller must pay the buyer the full notional value of the reference obligation. Each party to a credit default swap is subject to the credit risk of its counterparty (the risk that its counterparty may be unwilling or unable to perform its obligations on the swap as they come due). The value of the credit default swap to each party will change based on changes in the actual or perceived creditworthiness of the underlying issuer.

A protection buyer may lose its investment and recover nothing should an event of default not occur. The fund may seek to realize gains on its credit default swap positions, or limit losses on its positions, by selling those positions in the secondary market. There can be no assurance that a liquid secondary market will exist at any given time for any particular credit default swap or for credit default swaps generally.

The market for credit default swaps has at times become more volatile as the creditworthiness of certain counterparties has been questioned and/or downgraded. The parties to a credit default swap are generally required to post collateral to each other. If the fund posts initial or periodic collateral to its counterparty, it may not be able to recover that collateral from the counterparty in accordance with the terms of the swap. In addition, if the fund receives collateral from its counterparty, it may be delayed or prevented from realizing on the collateral in the event of the insolvency or bankruptcy of the counterparty. The fund may exit its obligations under a credit default swap by terminating the contract and paying applicable breakage fees, by selling its position in the secondary market, or by entering into an offsetting credit default swap position, which may cause the fund to incur more losses.

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The fund may also enter into options on swap agreements ("swaptions"). A swaption is a contract that gives a counterparty the right (but not the obligation) to enter into a new swap agreement or to shorten, extend, cancel or otherwise modify an existing swap agreement, at some designated future time on specified terms. The fund may purchase and write (sell) put and call swaptions to the same extent it may make use of standard options on securities or other instruments. Swaptions are generally subject to the same risks involved in the fund's use of options. See "Options on Securities."

Many over-the-counter derivatives (including many swaps) are complex and their valuation often requires subjective modeling and judgment, which increases the risk of mispricing or incorrect valuation. The pricing models used may not produce valuations that are consistent with the values the fund realizes when it closes or sells an over-the-counter derivative. Valuation risk is more pronounced when the fund enters into over-the-counter derivatives with specialized terms because the market value of those derivatives in some cases is determined in part by reference to similar derivatives with more standardized terms. Incorrect valuations may result in increased cash payment requirements to counterparties, undercollateralization and/or errors in calculation of the fund's NAV.

#### Tax-exempt Securities
**General description**. As used in this SAI, the term "Tax-exempt Securities" includes debt obligations issued by a state, a territory or possession of the United States, the District of Columbia, Puerto Rico, Guam and their political subdivisions (for example, counties, cities, towns, villages, districts and authorities), agencies, instrumentalities or other governmental units, the interest from which is, in the opinion of bond counsel, exempt from federal income tax and (if applicable) the corresponding state's personal income tax. Such obligations are issued to obtain funds for various public purposes, including the construction of a wide range of public facilities, such as airports, bridges, highways, housing, hospitals, mass transportation, schools, streets and water and sewer works. Other public purposes for which Tax-exempt Securities may be issued include to refund of outstanding obligations, to obtain funds for general operating expenses, or to obtain funds to lend to other public institutions and facilities in anticipation of the receipt of revenue or the issuance of other obligations.

Tax-exempt Securities can be classified into two principal categories, including "general obligation" bonds and other securities and "revenue" bonds and other securities. General obligation bonds are secured by the issuer's full faith, credit and taxing power for the payment of principal and interest. Revenue securities are payable only from the revenues derived from a particular facility or class of facilities or, in some cases, from the proceeds of a special excise tax or other specific revenue source, such as the user of the facility being financed. Tax-exempt Securities may be structured as fixed-, variable- or floating-rate obligations or as zero-coupon, payment-in-kind and step-coupon securities and may be privately placed or publicly offered.

Short-term Tax-exempt Securities are generally issued by state and local governments and public authorities as interim financing in anticipation of tax collections, revenue receipts or bond sales to finance such public purposes.

In addition, certain types of "private activity" bonds may be issued by public authorities to finance projects of privately-owned entities, such as privately – operated housing facilities; certain local facilities for supplying water, gas or electricity; sewage or solid waste disposal facilities; student loans; or public or private institutions for the construction of educational, hospital, housing and other facilities. Such obligations are included within the term Tax-exempt Securities if the interest paid thereon is, in the opinion of bond counsel, exempt from federal income tax and (if applicable) state personal income tax (such interest may, however, be subject to federal alternative minimum tax). Other types of private activity bonds, the proceeds of which are used for the construction, repair or improvement of, or to obtain equipment for, privately operated industrial or commercial facilities, may also constitute Tax-exempt Securities, although the current federal tax laws place substantial limitations on the size of such issues. The credit quality of private activity bonds is usually directly related to the credit standing of the corporate user of the facility involved.

Tax-exempt Securities share many of the structural features and risks of other bonds, as described elsewhere in this SAI. For example, the fund may purchase callable Tax-exempt Securities, zero-coupon Tax-exempt Securities, or "stripped" Tax-exempt Securities, which entail additional risks. The fund may also purchase structured or asset-backed Tax-exempt Securities, such as the securities (including preferred stock) of special purpose entities that hold interests in the Tax-exempt Securities of one or more issuers and issue "tranched" securities that are entitled to receive payments based on the cash flows from those underlying securities. See "Redeemable securities," "-Zero-coupon and Payment-in-kind Bonds," "-Structured investments," and "Mortgage-backed and Asset-backed Securities" in this SAI. Structured Tax-exempt Securities may involve increased risk that the interest received by the fund may not be exempt from federal or state income tax, or that such interest may result in liability for the alternative minimum tax for shareholders of the fund. For example, in certain cases, the issuers of certain securities held by a

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special purpose entity may not have received an unqualified opinion of bond counsel that the interest from the securities will be exempt from federal income tax and (if applicable) the corresponding state's personal income tax.

Even though Tax-exempt Securities are interest-bearing investments that promise a stable flow of income, their prices are generally inversely affected by changes in interest rates and, therefore, are subject to the risk of market price fluctuations. The values of Tax-exempt Securities with longer remaining maturities typically fluctuate more than those of similarly rated Tax-exempt Securities with shorter remaining maturities. The values of Tax-exempt Securities also may be affected by changes in their actual or perceived credit quality. The credit quality of Tax-exempt Securities can be affected by, among other things, the financial condition of the issuer or guarantor, the issuer's future borrowing plans and sources of revenue, the economic feasibility of the revenue bond project or general borrowing purpose, political or economic developments in the state or region where the security is issued, and the liquidity of the security. The amount of information about the financial condition of an issuer of Tax-exempt Securities may not be as extensive as that which is made available by corporations whose securities are publicly traded. As a result, the achievement of the fund's goals is more dependent on the Investment Manager's investment analysis than would be the case if the fund were investing in securities of better-known issuers. In addition, Tax-exempt Securities may be harder to value than securities issued by corporations that are publicly traded.

The secondary market for some Tax-exempt Securities issued within a state (including issues that are privately placed with the fund) is less liquid than that for taxable debt obligations or other more widely traded municipal obligations. No established resale market exists for certain of the Tax-exempt Securities in which the fund may invest. The market for Tax-exempt Securities rated below investment grade is also likely to be less liquid than the market for higher rated obligations. As a result, the fund may be unable to dispose of these municipal obligations at times when it would otherwise wish to do so at the prices at which they are valued.

Tax-exempt Securities Issued by the Commonwealth of Puerto Rico. Tax-exempt Securities issued by the Commonwealth of Puerto Rico or its political subdivisions, agencies, instrumentalities, or public corporations may be affected by economic, market, political, and social conditions in Puerto Rico. Puerto Rico has recently experienced (and may in the future experience) significant fiscal and economic challenges, including substantial debt service obligations, high levels of unemployment, underfunded public retirement systems, and persistent government budget deficits. These challenges may negatively affect the value of the fund's investments in Puerto Rico Tax-Exempt Securities. Major ratings agencies have downgraded the general obligation debt of Puerto Rico to below investment grade and continue to maintain a negative outlook for this debt, which increases the likelihood that the rating will be lowered further. In both August 2015 and January 2016, Puerto Rico defaulted on its debt by failing to make full payment due on its outstanding bonds, and there can be no assurance that Puerto Rico will be able to satisfy its future debt obligations. Further downgrades or defaults may place additional strain on the Puerto Rico economy and may negatively affect the value, liquidity, and volatility of the fund's investments in Puerto Rico Tax-exempt Securities. In 2016, the Puerto Rico Oversight, Management, and Economic Stability Act, known as "PROMESA," was signed into law. Among other things, PROMESA established a federally-appointed Oversight Board to oversee Puerto Rico's financial operations and provides Puerto Rico a path to restructuring its debts, thus increasing the risk that Puerto Rico may never pay off municipal indebtedness, or may pay only a small fraction of the amount owed. Proceedings under PROMESA remain ongoing, and it is unclear at this time how those proceedings will be resolved or what impact they will have on the value of a fund's investments in Puerto Rico municipal securities.

These challenges and uncertainties have been exacerbated by Hurricane Maria and the resulting natural disaster in Puerto Rico. In September 2017, Hurricane Maria struck Puerto Rico, causing major damage across the Commonwealth, including damage to its water, power, and telecommunications infrastructure. The length of time needed to rebuild Puerto Rico's infrastructure is unclear, but could amount to years, during which the Commonwealth is likely to be in an uncertain economic state. The full extent of the natural disaster's impact on Puerto Rico's economy and foreign investment in Puerto Rico is difficult to estimate.

**Escrow-secured or pre-refunded bonds**. These securities are created when an issuer uses the proceeds from a new bond issue to buy high grade, interest-bearing debt securities, generally direct obligations of the U.S. government, in order to redeem (or "pre-refund"), before maturity, an outstanding bond issue that is not immediately callable. These securities are then deposited in an irrevocable escrow account held by a trustee bank to secure all future payments of principal and interest on the pre-refunded bond until that bond's call date. Pre-refunded bonds often receive an 'AAA' or equivalent rating. Because pre-refunded bonds still bear the same interest rate, and have a very high credit quality, their price may increase. However, as the original bond approaches its call date, the bond's price will fall to its call price. The escrow account securities pledged to pay the principal and interest of the pre-refunded municipal bonds held by the fund nonetheless still subject the fund to interest rate risk and market risk. In addition, while a secondary market exists for pre-refunded municipal bonds, if the fund sells pre-refunded

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municipal bonds prior to maturity, the price received may be more or less than the original cost, depending on market conditions at the time of sale. The interest on pre-refunded bonds issued on or before December 31, 2017 is exempt from federal income tax; the interest on such bonds issued after December 31, 2017 is not exempt from federal income tax.

**Low Income Housing Tax Credits.** The fund may invest in loans and other instruments tied to the Low Income Housing Tax Credit ("LIHTC") program, which seeks to increase the supply of affordable housing by offering tax credits to projects that rehabilitate or create new affordable rental properties. LIHTCs offer investors a dollar-for-dollar reduction in their federal tax liability to incentivize the construction and rehabilitation of affordable housing properties. Certain of these investments may be issued, or are guaranteed or insured, by agencies or instrumentalities of the U.S. government, such as Fannie Mae or Freddie Mac, while other such investments may be issued by non-governmental entities and therefore not guaranteed or insured.

The LIHTC program requires ongoing compliance with numerous eligibility requirements. Failure to comply with these requirements, including failures by persons other than the fund or which are outside the fund's control, may result in recapture of some or all of the related tax credits as well as the possibility of the loss of future credits. In addition to a recapture of credits and the potential loss of future credits, failure to comply with such eligibility requirements may trigger a default event on the underlying bonds. The fund's investments in loans or other instruments tied to LIHTCs are subject to many of the risks facing other fixed income investments, including interest rate, credit, and prepayment risk.

**Tobacco Settlement Revenue Bonds**. The fund may invest in tobacco settlement revenue bonds, which are secured by an issuing state's proportionate share of periodic payments by tobacco companies made under the Master Settlement Agreement ("MSA"). The MSA is an agreement that was reached out of court in November 1998 between 46 states and six U.S. jurisdictions and tobacco manufacturers representing an overwhelming majority of U.S. market share in settlement of certain smoking-related litigation. The MSA provides for annual payments by the manufacturers to the states and jurisdictions in perpetuity in exchange for releasing all claims against the manufacturers and a pledge of no further litigation. The MSA established a base payment schedule and a formula for adjusting payments each year. Tobacco manufacturers pay into a master escrow trust based on their market share, and each state receives a fixed percentage of the payment as set forth in the MSA. Within some states, certain localities may in turn be allocated a specific portion of the state's MSA payment pursuant to an arrangement with the state.

A number of state and local governments have securitized the future flow of payments under the MSA by selling bonds pursuant to indentures, some through distinct governmental entities created for such purpose. The bonds are backed by the future revenue flow that is used for principal and interest payments on the bonds. Annual payments on the bonds, and thus risk to the fund, are dependent on the receipt of future settlement payments by the state or its instrumentality. The actual amount of future settlement payments may vary based on, among other things, annual domestic cigarette shipments, inflation, the financial capability of participating tobacco companies, and certain offsets for disputed payments. Payments made by tobacco manufacturers could be reduced if cigarette shipments continue to decline below the base levels used in establishing manufacturers' payment obligations under the MSA. Demand for cigarettes in the U.S. could continue to decline based on many factors, including, without limitation, anti-smoking campaigns, tax increases, price increases implemented to recoup the cost of payments by tobacco companies under the MSA, reduced ability to advertise, enforcement of laws prohibiting sales to minors, elimination of certain sales venues such as vending machines, the spread of local ordinances restricting smoking in public places, and increases in the use of other nicotine delivery devices (such as electronic cigarettes, smoking cessation products, and smokeless tobacco).

Because tobacco settlement bonds are backed by payments from the tobacco manufacturers, and generally not by the credit of the state or local government issuing the bonds, their creditworthiness depends on the ability of tobacco manufacturers to meet

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their obligations. The bankruptcy of an MSA-participating manufacturer could cause delays or reductions in bond payments, which would affect the fund's net asset value. Under the MSA, a market share loss by MSA-participating tobacco manufacturers to non-MSA participating manufacturers would also cause a downward adjustment in the payment amounts under some circumstances.

The MSA and tobacco manufacturers have been and continue to be subject to various legal claims, including, among others, claims that the MSA violates federal antitrust law. In addition, the United States Department of Justice has alleged in a civil lawsuit that the major tobacco companies defrauded and misled the American public about the health risks associated with smoking cigarettes. An adverse outcome to this lawsuit or to any other litigation matters or regulatory actions relating to the MSA or affecting tobacco manufacturers could adversely affect the payment streams associated with the MSA or cause delays or reductions in bond payments by tobacco manufacturers.

In addition to the risks described above, tobacco settlement revenue bonds are subject to other risks described in this SAI, including the risks of asset-backed securities discussed under "Mortgage-backed and Asset-backed Securities."

**Stand-by commitments**. When the fund purchases Tax-exempt Securities, it has the authority to acquire stand-by commitments from banks and broker-dealers with respect to those Tax-exempt Securities. A stand-by commitment is a right acquired by the fund to sell up to the principal amount of such Tax-exempt Securities back to the seller or a third party (typically an institution such as a bank or broker-dealer) at an agreed-upon price or yield within specified periods prior to their maturity dates. A stand-by commitment may be considered a security independent of the Tax-exempt security to which it relates. The amount payable by a bank or dealer during the time a stand-by commitment is exercisable, absent unusual circumstances, would be substantially the same as the market value of the underlying Tax-exempt security to a third party at any time. The fund expects that stand-by commitments generally will be available without the payment of direct or indirect consideration. The fund does not expect to assign any value to stand-by commitments when determining the fund's net asset value. The fund will be subject to credit risk with respect to an institution providing a stand-by commitment and a decline in the credit quality of the institution could cause losses to the fund.

**Yields**. The yields on Tax-exempt Securities depend on a variety of factors, including general money market conditions, effective marginal tax rates, the financial condition of the issuer, general conditions of the Tax-exempt security market, the size of a particular offering, the maturity of the obligation and the rating of the issue. The ratings of nationally recognized securities rating agencies represent their opinions as to the credit quality of the Tax-exempt Securities which they undertake to rate. It should be emphasized, however, that ratings are general and are not absolute standards of quality. Consequently, Tax-exempt Securities with the same maturity, interest rate and rating may have different yields while Tax-exempt Securities of the same maturity and interest rate but with different ratings may have the same yield. Yield disparities may occur for reasons not directly related to the investment quality of particular issues or the general movement of interest rates and may be due to such factors as changes in the overall demand or supply of various types of Tax-exempt Securities or changes in the investment objectives of investors. Subsequent to purchase by the fund, an issue of Tax-exempt Securities or other investments may cease to be rated, or its rating may be reduced below the minimum rating required for purchase by the fund. The Investment Manager will consider such an event in its determination of whether the fund should continue to hold an investment in its portfolio. Downgrades of Tax-exempt Securities held by a money market fund may require the fund to sell such securities, potentially at a loss.

**"Moral obligation" bonds**. The fund may invest in so-called "moral obligation" bonds, where repayment of the bond is backed by a moral (but not legally binding) commitment of an entity other than the issuer, such as a state legislature, to pay. Such a commitment may be in addition to the legal commitment of the issuer to repay the bond or may represent the only payment obligation with respect to the bond (where, for example, no amount has yet been specifically appropriated to pay the bond. See "-Municipal leases" below.)

**Municipal leases**. The fund may acquire participations in lease obligations or installment purchase contract obligations (collectively, "lease obligations") of municipal authorities or entities. A lease obligation is an obligation in the form of a lease or installment purchase that is issued by a state or local government to acquire equipment and facilities. Income from such obligations generally is exempt from state and local tax in the state of issuance. Lease obligations may be secured or unsecured. Lease obligations do not constitute general obligations of the municipality for which the municipality's taxing power is pledged.

Municipal leases may be subject to greater risks than general obligation or revenue bonds. Although lease obligations do not constitute general obligations of the municipality, a lease obligation ordinarily is backed by the municipality's covenant to budget for, appropriate, and make the payments due under the lease obligation. However, certain of these lease obligations contain

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"non-appropriation" clauses, which provide that the municipality has no obligation to make lease or installment purchase payments in future years unless money is appropriated for such purpose on a yearly basis. In the case of a "non-appropriation" lease, the fund's ability to recover under the lease in the event of non-appropriation or default will be limited solely to the repossession of the leased property, and in any event, foreclosure of that property might prove difficult. If a municipality does not fulfill its payment obligation, it may be difficult to sell the lease obligation and the proceeds of a sale may not cover the fund's loss.

In addition to the "non-appropriation" risk, many municipal lease obligations have not yet developed the depth of marketability associated with municipal bonds. Moreover, such leases may be subject to the temporary abatement of payments in the event the issuer is prevented from maintaining occupancy of the leased premises or utilizing the leased equipment or facilities. Although the obligations may be secured by the leased equipment or facilities, the disposition of the property in the event of non-appropriation or foreclosure might prove difficult, time consuming and costly, and result in a delay in recovering, or the failure to recover fully, the fund's original investment.

**Additional risks**. Securities in which the fund may invest, including Tax-exempt Securities, are subject to the provisions of bankruptcy, insolvency and other laws affecting the rights and remedies of creditors, such as the federal Bankruptcy Code (including special provisions related to municipalities and other public entities), and laws, if any, that may be enacted by Congress or state legislatures extending the time for payment of principal or interest, or both, or imposing other constraints upon enforcement of such obligations. There is also the possibility that, as a result of litigation or other conditions, such as the recent bankruptcy-type proceedings by the Commonwealth of Puerto Rico the power, ability or willingness of issuers to meet their obligations for the payment of interest and principal on their Tax-exempt Securities may be materially affected or their obligations may be found to be invalid or unenforceable. Such litigation or conditions may from time to time have the effect of introducing uncertainties in the market for municipal bonds or certain segments thereof, or of materially affecting the credit risk with respect to particular bonds. Adverse economic, business, legal or political developments might affect all or a substantial portion of the fund's municipal bonds in the same manner.

From time to time, legislation may be introduced or litigation may arise that may restrict or eliminate the federal income tax exemption for interest on debt obligations issued by states and their political subdivisions. Federal tax laws limit the types and amounts of tax-exempt bonds issuable for certain purposes, especially industrial development bonds and private activity bonds. Such limits may affect the future supply and yields of these types of Tax-exempt Securities. Further proposals limiting the issuance of Tax-exempt Securities may well be introduced in the future. Shareholders should consult their tax advisors for the current law on tax-exempt bonds and securities.

#### Temporary Defensive Strategies
In response to adverse market, economic, political or other conditions, the fund may take temporary defensive positions that are inconsistent with its principal investment strategies. However, a fund may choose not to use these temporary defensive strategies for a variety of reasons, even in very volatile market conditions. In implementing temporary defensive strategies, the fund may invest primarily in, among other things, debt securities, preferred stocks, U.S. government and agency obligations, cash or money market instruments (including, to the extent permitted by law or applicable exemptive relief, money market funds), or any other securities the Investment Manager considers consistent with such defensive strategies. When the fund takes temporary defensive positions, the fund may miss out on investment opportunities, and the fund may not achieve its investment objective. In addition, while temporary defensive strategies are mainly designed to limit losses, such strategies may not work as intended.

#### Trade Policy
In 2025, the U.S. government indicated its intent to alter its approach to international trade policy and, in some cases, to renegotiate or potentially terminate certain existing bilateral or multilateral trade agreements and treaties with foreign countries and has made proposals and taken actions related thereto. In addition, the U.S. government has recently imposed tariffs on certain foreign goods and has indicated a willingness to impose tariffs on imports of other products. Some foreign governments, including China, have instituted retaliatory tariffs on certain U.S. goods and have indicated a willingness to impose additional tariffs on U.S. products. Other countries, including Mexico, have threatened retaliatory tariffs on certain U.S. products.

Global trade disruption, significant introductions of trade barriers, and bilateral trade frictions, together with any future downturns in the global economy resulting therefrom, could adversely affect the financial performance of the fund and its investments.

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Trade policy may be an ongoing source of instability, potentially resulting in significant currency fluctuations and/or having other adverse effects on international markets, international trade agreements, and/or other existing cross-border cooperation arrangements (whether economic, tax, fiscal, legal, regulatory, or otherwise). To the extent trade disputes escalate globally, there could be additional significant impacts on the sectors or industries in which the fund invests and other adverse impacts on the fund's overall performance.

#### Warrants
The fund may invest in or acquire warrants, which are instruments that give the fund the right (but not the obligation) to purchase certain securities from an issuer at a specific price (the "strike price") until a stated expiration date. The purchase of warrants involves the risk that the effective price paid for the warrant added to the strike price of the underlying security may exceed the value of the security's market price, such as when there is no movement in the level of the underlying security. Also, the strike price of warrants typically is much lower than the current market price of the underlying securities, yet they are subject to similar price fluctuations. As a result, warrants may be more volatile investments than the underlying securities and may offer greater potential for capital appreciation as well as capital loss. Warrants do not entitle a holder to dividends or voting rights with respect to the underlying securities and do not represent any rights in the assets of the issuing company. Also, the value of the warrant does not necessarily change with the value of the underlying securities and a warrant ceases to have value if it is not exercised prior to the expiration date. These factors can make warrants more speculative than other types of investments.

In addition to warrants on securities, the fund may purchase put warrants and call warrants whose values vary depending on the change in the value of one or more specified securities indices ("index warrants"). Index warrants are generally issued by banks or other financial institutions and give the holder the right, at any time during the term of the warrant, to receive upon exercise of the warrant a cash payment from the issuer based on the value of the underlying index at the time of exercise. In general, if the value of the underlying index rises above the exercise price of the index warrant, the holder of a call warrant will be entitled to receive a cash payment from the issuer upon exercise based on the difference between the value of the index and the exercise price of the warrant; if the value of the underlying index falls, the holder of a put warrant will be entitled to receive a cash payment from the issuer upon exercise based on the difference between the exercise price of the warrant and the value of the index. The holder of a warrant would not be entitled to any payments from the issuer at any time when, in the case of a call warrant, the exercise price is greater than the value of the underlying index, or, in the case of a put warrant, the exercise price is less than the value of the underlying index. If the fund were not to exercise an index warrant prior to its expiration, then the fund would lose the amount of the purchase price paid by it for the warrant.

The fund will normally use index warrants in a manner similar to its use of options on securities indices. The risks of the fund's use of index warrants are generally similar to those relating to its use of index options. Unlike most index options, however, index warrants are issued in limited amounts and are not obligations of a regulated clearing agency, but are backed only by the credit of the bank or other institution which issues the warrant. Also, index warrants generally have longer terms than index options. Index warrants are not likely to be as liquid as certain index options backed by a recognized clearing agency. In addition, the terms of index warrants may limit the fund's ability to exercise the warrants at such time, or in such quantities, as the fund would otherwise wish to do.

#### Zero-coupon and Payment-in-kind Bonds
The fund may invest without limit in so-called "zero-coupon" bonds and "payment-in-kind" bonds. Zero-coupon bonds are issued at a significant discount from their principal amount in lieu of paying interest periodically. Payment-in-kind bonds allow the issuer, at its option, to make current interest payments on the bonds either in cash or in additional bonds. Because zero-coupon and payment-in-kind bonds do not pay current interest in cash, their value is subject to greater fluctuation in response to changes in market interest rates than bonds that pay interest currently. Both zero-coupon and payment-in-kind bonds allow an issuer to avoid the need to generate cash to meet current interest payments. Accordingly, such bonds may involve greater credit risks than bonds paying interest currently in cash. The fund is required to accrue interest income on such investments and to distribute such amounts at least annually to shareholders even though such bonds do not pay current interest in cash. Thus, it may be necessary at times for the fund to liquidate investments, including when it is not advantageous to do so, in order to satisfy its distribution requirements under the Code. The market for zero-coupon and payment-in-kind bonds may be limited, making it difficult for the fund to value them or dispose of its holdings quickly at an acceptable price.

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#### EXCHANGE TRADED FUND RISKS

#### Continuous Offering
The method by which Creation Units of shares are created and traded may raise certain issues under applicable securities laws. Because new Creation Units of shares are issued and sold by a fund on an ongoing basis, at any point a "distribution," as such term is used in the 1933 Act, may occur. Broker-dealers and other persons are cautioned that some activities on their part may, depending on the circumstances, result in their being deemed participants in a distribution in a manner which could render them statutory underwriters and subject them to the prospectus delivery and liability provisions of the 1933 Act.

For example, a broker-dealer firm or its client may be deemed a statutory underwriter if it takes Creation Units after placing an order with Franklin Distributors, each fund's distributor, breaks them down into constituent shares, and sells such shares directly to customers, or if it chooses to couple the creation of a supply of new shares with an active selling effort involving solicitation of secondary market demand for shares. A determination of whether one is an underwriter for purposes of the 1933 Act must take into account all the facts and circumstances pertaining to the activities of the broker-dealer or its client in the particular case, and the examples mentioned above should not be considered a complete description of all the activities that 12 could lead to a categorization as an underwriter.

Broker-dealer firms should also note that dealers who are not "underwriters," but are effecting transactions in shares of a fund, whether or not participating in the distribution of shares, are generally required to deliver a prospectus. This is because the prospectus delivery exemption in Section 4(a)(3) of the 1933 Act is not available in respect of such transactions as a result of Section 24(d) of the 1940 Act. As a result, broker-dealer firms should note that dealers who are not underwriters but are participating in a distribution (as opposed to engaging in ordinary secondary market transactions) and thus dealing with the shares that are part of an overallotment within the meaning of Section 4(a)(3)(A) of the 1933 Act would be unable to take advantage of the prospectus delivery exemption provided by Section 4(a)(3) of the 1933 Act. Firms that incur a prospectus-delivery obligation with respect to shares of each fund are reminded that, under Rule 153 under the 1933 Act, a prospectus-delivery obligation under Section 5(b)(2) of the 1933 Act owed to an exchange member in connection with a sale on an exchange is satisfied by the fact that the prospectus is available from the exchange upon request. The prospectus delivery mechanism provided in Rule 153 is only available with respect to transactions on an exchange.

#### Listing and Trading
Shares of each fund have been approved for listing and trading on an exchange. Each fund's shares trade on an exchange at prices that may differ to some degree from their NAV. The listing exchange may remove a fund's shares from listing if, among other things (i) following the initial 12-month period beginning upon the commencement of trading of the fund, there are fewer than 50 beneficial owners of the fund's shares ; (ii) the listing exchange becomes aware that the fund is no longer eligible to operate in reliance on Rule 6c-11 under the 1940 Act; (iii) the fund no longer complies with certain listing exchange rules; or (iv) such other event shall occur or condition exists that, in the opinion of the listing exchange, makes further dealings on the exchange inadvisable.

The listing exchange will remove a fund's shares from listing and trading upon termination of the trust. There can be no assurance that the requirements of the listing exchange necessary to maintain the listing of the fund's shares will continue to be met. As in the case of other publicly-traded securities, brokers' commissions on transactions will be based on negotiated commission rates at customary levels. The existence of a liquid trading market for certain securities may depend on whether dealers will make a market in such securities. There can be no assurance that such a market will be made or maintained or that any such market will be or remain liquid. The price at which securities may be sold and the value of the fund's shares will be adversely affected if trading markets for the fund's portfolio securities are limited or absent, or if bid/ask spreads are wide.

#### TAXES
The following discussion of U.S. federal income tax consequences is based on the Code, existing U.S. Treasury regulations, and other applicable authority, as of the date of this SAI. These authorities are subject to change by legislative or administrative action, possibly with retroactive effect. The following discussion is only a summary of some of the important U.S. federal income tax considerations generally applicable to investments in the fund. There may be other tax considerations applicable to particular

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shareholders. Shareholders should consult their own tax advisors regarding their particular situation and the possible application of foreign, state and local tax laws.

**Taxation of the fund.** The fund has elected and intends to qualify each year as a regulated investment company under Subchapter M of the Code. In order to qualify for the special tax treatment accorded regulated investment companies and their shareholders, the fund must, among other things:

(a) derive at least 90% of its gross income for each taxable year from (i) dividends, interest, payments with respect to certain securities loans, and gains from the sale or other disposition of stock, securities or foreign currencies, or other income (including but not limited to gains from options, futures, or forward contracts) derived with respect to its business of investing in such stock, securities or currencies, and (ii) net income from interests in "qualified publicly traded partnerships" (as defined below);

(b) diversify its holdings so that, at the end of each quarter of the fund's taxable year, (i) at least 50% of the market value of the fund's total assets is represented by cash and cash items (including receivables), U.S. government securities, securities of other regulated investment companies, and other securities limited in respect of any one issuer to a value not greater than 5% of the value of the fund's total assets and not more than 10% of the outstanding voting securities of such issuer, and (ii) not more than 25% of the value of the fund's total assets is invested, including through corporations in which the fund owns a 20% or more voting stock interest, (x) in the securities (other than those of the U.S. government or other regulated investment companies) of any one issuer or of two or more issuers which the fund controls and which are engaged in the same, similar, or related trades or businesses, or (y) in the securities of one or more qualified publicly traded partnerships (as defined below); and

(c) distribute with respect to each taxable year at least 90% of the sum of its investment company taxable income (as that term is defined in the Code without regard to the deduction for dividends paid—generally, taxable ordinary income and the excess, if any, of net short-term capital gains over net long-term capital losses) and net tax-exempt interest income, for such year.

In general, for purposes of the 90% gross income requirement described in paragraph (a) above, income derived from a partnership will be treated as qualifying income only to the extent such income is attributable to items of income of the partnership which would be qualifying income if realized by the regulated investment company. However, 100% of the net income of a regulated investment company derived from an interest in a "qualified publicly traded partnership" (defined as a partnership (i) interests in which are traded on an established securities market or readily tradable on a secondary market or the substantial equivalent thereof, and (ii) that derives less than 90% of its income from the qualifying income described in paragraph (a)(i) above) will be treated as qualifying income. In general, such entities will be treated as partnerships for federal income tax purposes because they meet the passive income requirement under Code section 7704(c)(2). In addition, although in general the passive loss rules of the Code do not apply to regulated investment companies, such rules do apply to a regulated investment company with respect to items attributable to an interest in a qualified publicly traded partnership.

For purposes of the diversification test in paragraph (b) above, identification of the issuer (or, in some cases, issuers) of a particular fund investment will depend on the terms and conditions of that investment. In some cases, identification of the issuer (or issuers) is uncertain under current law, and an adverse determination or future guidance by the IRS with respect to issuer identification for a particular type of investment may adversely affect the fund's ability to meet the diversification test in (b) above. Also, for the purposes of the diversification test in paragraph (b) above, the term "outstanding voting securities of such issuer" will include the equity securities of a qualified publicly traded partnership.

If the fund qualifies as a regulated investment company that is accorded special tax treatment, the fund will not be subject to U. S. federal income tax on income or gains distributed in a timely manner to its shareholders in the form of dividends (including Capital Gain Dividends, as defined below).

If the fund were to fail to meet the income, diversification or distribution test described above, the fund could in some cases cure such failure, including by paying a fund-level tax, paying interest, making additional distributions, or disposing of certain assets. If the fund were ineligible to or otherwise did not cure such failure for any year, or were otherwise to fail to qualify as a regulated investment company accorded special tax treatment in any taxable year, the fund would be subject to tax on its taxable income at corporate rates, and all distributions from earnings and profits, including any distributions of net tax-exempt income and net long-term capital gains, would be taxable to shareholders as ordinary income. Some portions of such distributions may be eligible for the dividends received deduction in the case of corporate shareholders, and may be eligible to be treated as "qualified dividend income" in the case of shareholders taxed as individuals, provided, in both cases, that the shareholder meets certain holding period and other requirements in respect of the fund's shares (as described below). In addition, the fund could be

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required to recognize unrealized gains, pay substantial taxes and interest and make substantial distributions before requalifying as a regulated investment company that is accorded special tax treatment.

The fund intends to distribute at least annually to its shareholders all or substantially all of its investment company taxable income (computed without regard to the dividends-paid deduction) and its net tax-exempt income (if any). The fund may distribute its net capital gain (that is, the excess of net long-term capital gain over net short-term capital loss, in each case determined with reference to any loss carryforwards). Investment company taxable income (which is retained by the fund) will be subject to tax at regular corporate rates. The fund may also retain for investment its net capital gain. If the fund retains any net capital gain, it will be subject to tax at regular corporate rates on the amount retained, but may designate the retained amount as undistributed capital gains in a notice to its shareholders who will be (i) required to include in income for U.S. federal income tax purposes, as long-term capital gain, their shares of such undistributed amount, and (ii) entitled to credit their proportionate shares of the tax paid by the fund on such undistributed amount against their U.S. federal income tax liabilities, if any, and to claim refunds on a properly-filed U.S. tax return to the extent the credit exceeds such liabilities. If the fund makes this designation, for U.S. federal income tax purposes, the tax basis of shares owned by a shareholder of the fund will be increased by an amount equal to the difference between the amount of undistributed capital gains included in the shareholder's gross income under clause (i) of the preceding sentence and the tax deemed paid by the shareholder under clause (ii) of the preceding sentence. The fund is not required to, and there can be no assurance the fund will, make this designation if it retains all or a portion of its net capital gain in a taxable year.

In determining its net capital gain, including in connection with determining the amount available to support a Capital Gain Dividend (as defined below), its taxable income and its earnings and profits, a regulated investment company generally may also elect to treat part or all of any post-October capital loss (defined as any net capital loss attributable to the portion, if any, of the taxable year after October 31 or, if there is no such loss, the net long-term capital loss or net short-term capital loss attributable to any such portion of the taxable year) or late-year ordinary loss (generally, the sum of its (i) net ordinary loss, if any, from the sale, exchange or other taxable disposition of property, attributable to the portion, if any, of the taxable year after October 31, and its (ii) other net ordinary loss, if any, attributable to the portion, if any, of the taxable year after December 31) as if incurred in the succeeding taxable year.

If the fund fails to distribute in a calendar year at least an amount equal to the sum of 98% of its ordinary income for such year and 98.2% of its capital gain net income for the one-year period ending October 31 of such year, plus any retained amount from the prior year, the fund will be subject to a nondeductible 4% excise tax on the undistributed amounts. For these purposes, ordinary gains and losses from the sale, exchange, or other taxable disposition of property that would otherwise be properly taken into account after October 31 are treated as arising on January 1 of the following calendar year. For purposes of the excise tax, the fund will be treated as having distributed any amount on which it has been subject to corporate income tax in the taxable year ending within the calendar year. A dividend paid to shareholders in January of a year generally is deemed to have been paid by the fund on December 31 of the preceding year, if the dividend was declared and payable to shareholders of record on a date in October, November or December of that preceding year. The fund intends generally to make distributions sufficient to avoid imposition of the 4% excise tax, although there can be no assurance that it will be able to do so.

The fund distributes its net investment income and capital gains to shareholders as dividends at least annually to the extent required to qualify as a regulated investment company under the Code and generally to avoid U.S. federal income or excise tax. Provided it is not treated as a "personal holding company" for U.S. federal income tax purposes, the fund is permitted to treat the portion of redemption proceeds paid to redeeming shareholders that represents the redeeming shareholders' portion of the fund's accumulated earnings and profits as a dividend on the fund's tax return. This practice, which involves the use of tax equalization, will have the effect of reducing the amount of income and gains that the fund is required to distribute as dividends to shareholders in order for the fund to avoid U. S. federal income tax and excise tax. This practice may also reduce the amount of distributions required to be made to non-redeeming shareholders and the amount of any undistributed income will be reflected in the value of the shares of the fund; the total return on a shareholder's investment will not be reduced as a result of this distribution policy.

**Fund distributions.** Distributions from the fund (other than exempt-interest dividends, as discussed below) generally are taxable to shareholders as ordinary income to the extent derived from the fund's investment income and net short-term capital gains. Distributions are taxable whether shareholders receive them in cash or reinvest them in additional shares of the fund or other Putnam funds.

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Taxes on distributions of capital gains are determined by how long the fund owned (or is deemed to have owned) the investments that generated them, rather than how long a shareholder has owned his or her shares. In general, the fund will recognize long-term capital gain or loss on investments it has owned for more than one year, and short-term capital gain or loss on investments it has owned for one year or less. Tax rules can alter the fund's holding period in investments and thereby affect the tax treatment of gain or loss on such investments. Distributions of net capital gain that are properly reported by the fund as capital gain dividends ("Capital Gain Dividends") will be treated as long-term capital gains includible in net capital gain and taxed to individuals at reduced rates. The IRS and the Department of the Treasury have issued regulations that impose special rules in respect of Capital Gain Dividends received through partnership interests constituting "applicable partnership interests" under Section 1061 of the Code. Distributions from capital gains generally are made after applying any available capital loss carryforwards. Distributions of net short-term capital gain (as reduced by any net long-term capital loss for the taxable year) will be taxable to shareholders as ordinary income.

The Code generally imposes a 3.8% Medicare contribution tax on the net investment income of certain individuals, trusts and estates to the extent their income exceeds certain threshold amounts. For these purposes, "net investment income" generally includes, among other things, (i) distributions paid by the fund of net investment income and capital gains (other than exempt-interest dividends) as described herein, and (ii) any net gain from the sale, redemption, exchange or other taxable disposition of fund shares. Shareholders are advised to consult their tax advisers regarding the possible implications of this additional tax on their investment in the fund.

Distributions of investment income reported by the fund as "qualified dividend income" received by an individual will be taxed at the reduced rates applicable to net capital gain. In order for some portion of the dividends received by a fund shareholder to be qualified dividend income, the fund must meet holding period and other requirements with respect to some portion of the dividend-paying stocks in its portfolio and the shareholder must meet holding period and other requirements with respect to the fund's shares. In general, a dividend will not be treated as qualified dividend income (at either the fund or shareholder level) (1) if the dividend is received with respect to any share of stock held for fewer than 61 days during the 121-day period beginning on the date which is 60 days before the date on which such share becomes ex-dividend with respect to such dividend (or, in the case of certain preferred stock, 91 days during the 181-day period beginning 90 days before such date), (2) to the extent that the recipient is under an obligation (whether pursuant to a short sale or otherwise) to make related payments with respect to positions in substantially similar or related property, (3) if the recipient elects to have the dividend income treated as investment interest, or (4) if the dividend is received from a foreign corporation that is (a) not eligible for the benefits of a comprehensive income tax treaty with the United States (with the exception of dividends paid on stock of such a foreign corporation readily tradable on an established securities market in the United States) or (b) treated as a passive foreign investment company. Each fund, other than fixed-income and money market funds, generally expects to report eligible dividends as qualified dividend income.

In general, distributions of investment income reported by the fund as derived from qualified dividend income will be treated as qualified dividend income by a shareholder taxed as an individual provided the shareholder meets the holding period and other requirements described above with respect to such fund's shares. In any event, if the aggregate qualified dividends received by the fund during any taxable year are 95% or more of its gross income (excluding net long-term capital gain over net short-term capital loss), then 100% of the fund's dividends (other than dividends properly reported as Capital Gain Dividends) will be eligible to be treated as qualified dividend income.

Individuals (and certain other non-corporate entities) are generally eligible with respect to tax years beginning after December 31, 2017 and ending on or before December 31, 2025 for a 20% deduction with respect to taxable ordinary dividends from REITs and certain taxable income from publicly traded partnerships. Currently, regulated investment companies may pass through the 20% deduction to shareholders for REIT dividends, but not for income from publicly traded partnerships. Distributions by the fund to its shareholders that the fund properly reports as "section 199A dividends," as defined and subject to certain conditions described below, are treated as qualified REIT dividends in the hands of non-corporate shareholders.

Subject to future regulatory guidance to the contrary, distributions attributable to qualified publicly traded partnership income from a fund's investments in MLPs will ostensibly not qualify for the deduction available to non-corporate taxpayers in respect of such amounts received directly from an MLP.

In general, fixed-income and money market funds receive interest, rather than dividends, from their portfolio securities. As a result, it is not currently expected that any significant portion of such funds' distributions to shareholders will be derived from

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qualified dividend income. For information regarding qualified dividend income received from underlying funds, see "Funds of funds" below.

Certain distributions reported by a Fund as section 163(j) interest dividends may be treated as interest income by shareholders for purposes of the tax rules applicable to interest expense limitations under Code section 163(j). Such treatment by the shareholder is generally subject to holding period requirements and other potential limitations, although the holding period requirements are generally not applicable to dividends declared by money market funds and certain other funds that declare dividends daily and pay such dividends on a monthly or more frequent basis. The amount that a Fund is eligible to report as a Section 163(j) dividend for a tax year is generally limited to the excess of the Fund's business interest income over the sum of the Fund's (i) business interest expense and (ii) other deductions properly allocable to the Fund's business interest income.

In general, dividends of net investment income received by corporate shareholders of the fund will qualify for the dividends-received deduction generally available to corporations only to the extent of the amount of eligible dividends received by the fund from domestic corporations for the taxable year. A dividend received by the fund will not be treated as a dividend eligible for the dividends-received deduction (1) if it has been received with respect to any share of stock that the fund has held for less than 46 days (91 days in the case of certain preferred stock) during the 91-day period beginning on the date which is 45 days before the date on which such share becomes ex-dividend with respect to such dividend (during the 181-day period beginning 90 days before such date in the case of certain preferred stock) or (2) to the extent that the fund is under an obligation (pursuant to a short sale or otherwise) to make related payments with respect to positions in substantially similar or related property. Moreover, the dividends received deduction may otherwise be disallowed or reduced (1) if the corporate shareholder fails to satisfy the foregoing requirements with respect to its shares of the fund or (2) by application of various provisions of the Code (for instance, the dividends-received deduction is reduced in the case of a dividend received on debt-financed portfolio stock (generally, stock acquired with borrowed funds)). For information regarding eligibility for the dividends-received deduction of dividend income derived from an underlying fund, see "Funds of funds" below.

**Exempt-interest dividends.** A fund will be qualified to pay exempt-interest dividends to its shareholders if, at the close of each quarter of the fund's taxable year, at least 50% of the total value of the fund's assets consists of obligations the interest on which is exempt from federal income tax under Section 103(a) of the Code. In some cases, the fund may also pass through to its shareholders the tax-exempt character of any exempt-interest dividends it receives from underlying funds in which it invests (see "Funds of funds," below). Distributions that the fund reports as exempt-interest dividends are treated as interest excludable from shareholders' gross income for federal income tax purposes but may be taxable for federal alternative minimum tax ("AMT") purposes and for state and local purposes. If the fund intends to qualify to pay exempt-interest dividends, the fund may be limited in its ability to enter into taxable transactions involving forward commitments, repurchase agreements, financial futures and options contracts on financial futures, tax-exempt bond indices and other assets.

Part or all of the interest on indebtedness, if any, incurred or continued by a shareholder to purchase or carry shares of the fund paying exempt-interest dividends is not deductible. The portion of interest that is not deductible is equal to the total interest paid or accrued on the indebtedness, multiplied by the percentage of the fund's total distributions (not including distributions from net long-term capital gains) paid to the shareholder that are exempt-interest dividends. Under rules used by the IRS to determine when borrowed funds are considered used for the purpose of purchasing or carrying particular assets, the purchase of shares may be considered to have been made with borrowed funds even though such funds are not directly traceable to the purchase of shares.

In general, exempt-interest dividends, if any, attributable to interest received on certain private activity obligations and certain industrial development bonds will not be tax-exempt to any shareholders who are "substantial users" of the facilities financed by such obligations or bonds or who are "related persons" of such substantial users.

A fund that is qualified to pay exempt-interest dividends will notify its shareholders in a written statement of the portion of distributions for the taxable year that constitutes exempt-interest dividends.

Exempt-interest dividends may be taxable for purposes of the federal AMT. For individual shareholders, exempt-interest dividends that are derived from interest on private activity bonds that are issued after August 7, 1986 (other than a "qualified 501(c)(3) bond," as such term is defined in the Code) generally must be included in an individual's tax base for purposes of calculating the shareholder's liability for U.S. federal AMT. For taxable years beginning after December 31, 2017, corporations are no longer subject to the federal AMT.

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**Funds of funds.** If the fund invests in shares of underlying funds, a portion of its distributable income and gains will consist of distributions from the underlying funds and gains and losses on the disposition of shares of the underlying funds. To the extent that an underlying fund realizes net losses on its investments for a given taxable year, the fund will not be able to recognize its share of those losses (so as to offset distributions of net income or capital gains from other underlying funds) until and only to the extent that it disposes of shares of the underlying fund in a transaction qualifying for sale or exchange treatment or those losses reduce distributions required to be made by the underlying fund. Moreover, even when the fund does make such a disposition, a portion of its loss may be recognized as a long-term capital loss, which will not be treated as favorably for U.S. federal income tax purposes as a short-term capital loss or an ordinary deduction. In particular, the fund will not be able to offset any capital losses from its dispositions of underlying fund shares against its ordinary income (including distributions of any net short-term capital gains realized by an underlying fund).

In addition, in certain circumstances, the "wash sale" rules under Section 1091 of the Code may apply to the fund's sales of underlying fund shares that have generated losses. A wash sale occurs if shares of an underlying fund are sold by the fund at a loss and the fund acquires additional shares of that same underlying fund 30 days before or after the date of the sale. The wash-sale rules could defer losses in the fund's hands on sales of underlying fund shares (to the extent such sales are wash sales) for extended (and, in certain cases, potentially indefinite) periods of time.

As a result of the foregoing rules, and certain other special rules, the amounts of net investment income and net capital gains that the fund will be required to distribute to shareholders may be greater than such amounts would have been had the fund invested directly in the securities held by the underlying funds, rather than investing in shares of the underlying funds. For similar reasons, the amount or timing of distributions from the fund qualifying for treatment as being of a particular character (e.g., as long-term capital gain, exempt interest, eligible for dividends-received deduction, etc.) will not necessarily be the same as it would have been had the fund invested directly in the securities held by the underlying funds.

If the fund receives dividends from an underlying fund that qualifies as a regulated investment company, and the underlying fund reports such dividends as "qualified dividend income," then the fund may, in turn, report a portion of its distributions as "qualified dividend income" as well, provided the fund meets the holding period and other requirements with respect to shares of the underlying fund.

If the fund receives dividends from an underlying fund and the underlying fund reports such dividends as eligible for the dividends-received deduction, then the fund is permitted, in turn, to designate a portion of its distributions as eligible for the dividends-received deduction, provided the fund meets the holding period and other requirements with respect to shares of the underlying fund.

If the fund were to own 20% or more of the voting interests of an underlying fund, subject to a safe harbor in respect of certain fund of funds arrangements, the fund would be required to "look through" the underlying fund to its holdings and combine the appropriate percentage (as determined pursuant to the applicable Treasury Regulations) of the underlying fund's assets with the fund's assets for purposes of satisfying the 25% diversification test described above.

If, at the close of each quarter of the fund's taxable year, at least 50% of its total assets consists of interests in other regulated investment companies (such fund, a "qualified fund of funds"), the fund will be permitted to distribute exempt-interest dividends and thereby pass through to its shareholders the tax-exempt character of any exempt-interest dividends it receives from underlying funds in which it invests, or interest on any tax-exempt obligations in which it directly invests, if any. For further information regarding exempt-interest dividends, see "Exempt-interest dividends," above.

If the fund is a qualified fund of funds, the fund will be entitled to elect to pass through to its shareholders a credit or deduction for foreign taxes (if any) borne in respect of foreign securities income earned by the fund, or by any underlying funds and passed through to the fund. If the fund so elects, shareholders will include in gross income from foreign sources their pro rata shares of such taxes, if any, treated as paid by the fund. Even if the fund is eligible to make such an election for a given year, it may determine not to do so. If the fund elects to pass through to its shareholders foreign tax credits or deductions, tax-exempt shareholders and those who invest in the fund through tax-advantaged accounts such as IRAs will not benefit from any such tax credit or deduction. See "Foreign taxes" below for more information.

**Derivatives, hedging and related transactions; certain exposure to commodities.** In general, option premiums received by the fund are not immediately included in the income of the fund. Instead, the premiums are recognized when the option contract expires, the option is exercised by the holder, or the fund transfers or otherwise terminates the option (*e.g.*, through a closing

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transaction). If a call option written by the fund is exercised and the fund sells or delivers the underlying stock, the fund generally will recognize capital gain or loss equal to (a) the sum of the strike price and the option premium received by the fund minus (b) the fund's basis in the stock. Such gain or loss generally will be short-term or long-term depending upon the holding period of the underlying stock. If securities are purchased by the fund pursuant to the exercise of a put option written by it, the fund generally will subtract the premium received for purposes of computing its cost basis in the securities purchased. Gain or loss arising in respect of a termination of the fund's obligation under an option other than through the exercise of the option will be short-term gain or loss depending on whether the premium income received by the fund is greater or less than the amount paid by the fund (if any) in terminating the transaction. Thus, for example, if an option written by the fund expires unexercised, the fund generally will recognize short-term gain equal to the premium received.

Certain covered call writing activities of the fund may trigger the U.S. federal income tax straddle rules contained primarily in Section 1092 of the Code. Very generally, where applicable, Section 1092 requires (i) that losses be deferred on positions deemed to be offsetting positions with respect to "substantially similar or related property," to the extent of unrealized gain in the latter, and (ii) that the holding period of such a straddle position that has not already been held for the long-term holding period be terminated and begin anew once the position is no longer part of a straddle. Options on single stocks that are not "deep in the money" may constitute qualified covered calls, which generally are not subject to the straddle rules; the holding period on stock underlying qualified covered calls that are "in the money" although not "deep in the money" will be suspended during the period that such calls are outstanding. Thus, the straddle rules and the rules governing qualified covered calls could cause gains that would otherwise constitute long-term capital gains to be treated as short-term capital gains, and distributions that would otherwise constitute "qualified dividend income" or qualify for the dividends-received deduction to fail to satisfy the holding period requirements and therefore to be taxed as ordinary income or to fail to qualify for the dividends-received deduction, as the case may be.

In general, 40% of the gain or loss arising from the closing out of a futures contract traded on an exchange approved by the Commodities Futures Trading Commission is treated as short-term gain or loss, and 60% is treated as long-term gain or loss, although certain foreign currency gains and losses from such contracts may be treated as ordinary in character. Also, such contracts held by the fund at the end of each taxable year (and, for purposes of the 4% excise tax, on certain other dates as prescribed under the Code) are "marked to market" with the result that unrealized gains or losses are treated as though they were realized and the resulting gain or loss is treated as ordinary or 60/40 gain or loss, as applicable.

The fund's investment in swaps, if any, will generate ordinary income and losses for federal income tax purposes. The fund's investments in futures and swaps may cause the fund to recognize income without receiving cash with which to make the distributions necessary to qualify and be eligible for treatment as a regulated investment company and avoid a fund-level tax. The fund may therefore need to liquidate other investments, including when it is not advantageous to do so, to meet its distribution requirement. The fund is not permitted to carry forward any net ordinary losses it realizes in a taxable year to offset ordinary income it realizes in subsequent taxable years.

In addition to the special rules described above in respect of options, futures transactions and swaps, the fund's derivative transactions, including transactions in options, futures contracts, straddles, securities loan and other similar transactions, including for hedging purposes, will be subject to special tax rules (including constructive sale, mark-to-market, straddle, wash sale, and short sale rules), the effect of which may be to accelerate income to the fund, defer losses to the fund, cause adjustments in the holding periods of the fund's securities, convert long-term capital gains into short-term capital gains, short-term capital losses into long-term capital losses, or capital gains into ordinary income. These rules could therefore affect the amount, timing and character of distributions to shareholders. The fund may make any applicable elections pertaining to such transactions consistent with the interests of the fund.

Because these and other tax rules applicable to these types of transactions are in some cases uncertain under current law, an adverse determination or future guidance by the IRS with respect to these rules (which determination or guidance could be retroactive) may affect whether the fund has made sufficient distributions, and otherwise satisfied the relevant requirements, to maintain its qualification as a regulated investment company and avoid a fund-level tax.

A fund's use of commodity-linked derivatives can be limited by the fund's intention to qualify as a regulated investment company and can bear on its ability to so qualify. Income and gains from certain commodity-linked derivatives do not constitute qualifying income to a regulated investment company for purposes of the 90% gross income test described above. The tax treatment of certain other commodity-linked derivative instruments in which the fund might invest is not certain, in particular with respect to whether income or gains from such instruments constitute qualifying income to a regulated investment company. If the fund were

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to treat income or gain from a particular instrument as qualifying income and the income or gain were later determined not to constitute qualifying income and, together with any other nonqualifying income, caused the fund's nonqualifying income to exceed 10% of its gross income in any taxable year, the fund would fail to qualify as a regulated investment company unless it is eligible to and does pay a tax at the fund level.

The tax rules are uncertain with respect to the treatment of income or gains arising in respect of commodity-linked exchange-traded notes ("ETNs") and certain commodity-linked structured notes; also, the timing and character of income or gains arising from ETNs can be uncertain. An adverse determination or future guidance by the IRS (which determination or guidance could be retroactive) may affect the fund's ability to qualify for treatment as a regulated investment company and to avoid a fund-level tax.

To the extent that, in order to achieve exposure to commodities, the fund invests in entities that are treated as pass-through vehicles for U.S. federal income tax purposes, including, for instance, certain ETFs (e.g., ETFs investing in gold bullion) and partnerships other than qualified publicly traded partnerships (as defined earlier), all or a portion of any income and gains from such entities could constitute non-qualifying income to the fund for purposes of the 90% gross income requirement described above. In such a case, the fund's investments in such entities could be limited by its intention to qualify as a regulated investment company and could bear on its ability to so qualify. Certain commodities-related ETFs may qualify as qualified publicly traded partnerships. In such cases, the net income derived from such investments will constitute qualifying income for purposes of the 90% gross income requirement. If, however, such a vehicle were to fail to qualify as a qualified publicly traded partnership in a particular year, a portion of the gross income derived from it in such year could constitute non-qualifying income to the fund for purposes of the 90% gross income requirement and thus could adversely affect the fund's ability to qualify as a regulated investment company for a particular year. In addition, the diversification requirement described above for regulated investment company qualification will limit the fund's investments in one or more vehicles that are qualified publicly traded partnerships to 25% of the fund's total assets as of the close of each quarter of the fund's taxable year.

Certain of the fund's investments in derivative instruments and foreign currency-denominated instruments, and any of the fund's transactions in foreign currencies and hedging activities, are likely to produce a difference between its book income and its taxable income. If such a difference arises, and the fund's book income is less than its taxable income (or, for tax-exempt funds, the sum of its net tax-exempt and taxable income), the fund could be required to make distributions exceeding book income to qualify as a regulated investment company that is accorded special tax treatment and to eliminate fund-level income tax. In the alternative, if the fund's book income exceeds the sum of its taxable income and tax-exempt income, the distribution (if any) of such excess will be treated as (i) a dividend to the extent of the fund's remaining earnings and profits (including earnings and profits arising from tax-exempt income), (ii) thereafter as a return of capital to the extent of the recipient's basis in the shares, and (iii) thereafter as gain from the sale or exchange of a capital asset.

**Investments in REITs.** The fund's investment in REIT equity securities may result in the fund's receipt of cash in excess of the REIT's earnings. If the fund distributes such amounts, such distribution could constitute a return of capital to the fund shareholders for U.S. federal income tax purposes. Dividends received by the fund from a REIT generally will not constitute qualified dividend income and will not qualify for the corporate dividends-received deduction.

Distributions by the fund to its shareholders that the fund properly reports as "section 199A dividends," as defined and subject to certain conditions described below, are treated as qualified REIT dividends in the hands of non-corporate shareholders. Non-corporate shareholders are permitted a federal income tax deduction equal to 20% of qualified REIT dividends received by them, subject to certain limitations. Very generally, a "section 199A dividend" is any dividend or portion thereof that is attributable to certain dividends received by a regulated investment company from REITs, to the extent such dividends are properly reported as such by the regulated investment company in a written notice to its shareholders. A section 199A dividend is treated as a qualified REIT dividend only if the shareholder receiving such dividend holds the dividend-paying regulated investment company shares for at least 46 days of the 91-day period beginning 45 days before the shares become ex-dividend, and is not under an obligation to make related payments with respect to a position in substantially similar or related property. A fund is permitted to report such part of its dividends as section 199A dividends as are eligible, but is not required to do so.

**Mortgage-related securities.** The fund may invest in REITs, including REITs that hold residual interests in real estate mortgage investment conduits ("REMICs") (including by investing in residual interests in collateralized mortgage obligations ("CMOs") with respect to which an election to be treated as a REMIC is in effect), REITs that are themselves taxable mortgage pools ("TMPs") or REITs that invest in TMPs. Under a notice issued by the IRS in October 2006 and Treasury regulations that have not yet been issued, but apply retroactively, a portion of the fund's income from a REIT that is attributable to the REIT's residual interest in a REMIC or TMP (referred to in the Code as an "excess inclusion") will be subject to U.S. federal income tax in all events. This

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notice also provides, and the regulations are expected to provide, that excess inclusion income of a regulated investment company, such as the fund, will be allocated to shareholders of the regulated investment company in proportion to the dividends received by such shareholders, with the same consequences as if the shareholders held the related REMIC or TMP residual interest directly. As a result, a fund investing in such interests may not be a suitable investment for charitable remainder trusts, as noted below.

In general, excess inclusion income allocated to shareholders (i) cannot be offset by net operating losses (subject to a limited exception for certain thrift institutions), (ii) will constitute unrelated business taxable income ("UBTI") to entities (including a qualified pension plan, an individual retirement account, a 401(k) plan, a Keogh plan or other tax-exempt entity) subject to tax on UBTI, thereby potentially requiring such an entity that is allocated excess inclusion income, and otherwise might not be required to file a tax return, to file a tax return and pay tax on such income, and (iii) in the case of a non-U.S. shareholder, will not qualify for any reduction in U.S. federal withholding tax. A shareholder will be subject to U.S. federal income tax on such inclusions notwithstanding any exemption from such income tax otherwise available under the Code. Any investment in residual interests of CMO that has elected to be treated as a REMIC can create complex tax problems, especially if the fund has state or local governments or other tax-exempt organizations as shareholders.

Income of a fund that would be UBTI if earned directly by a tax-exempt entity generally will not constitute UBTI when distributed to a tax-exempt shareholder of the fund. Notwithstanding the foregoing, a tax-exempt shareholder will recognize UBTI by virtue of its investment in the fund if shares in the fund constitute debt-financed property in the hands of the tax-exempt shareholder within the meaning of Code Section 514(b). Furthermore, a tax-exempt shareholder may recognize UBTI if the fund recognizes excess inclusion income derived from direct or indirect investments in REMIC residual interests or TMPs if the amount of such income recognized by the fund exceeds the fund's investment company taxable income (after taking into account deductions for dividends paid by the fund).

Under legislation enacted in December 2006, a charitable remainder trust ("CRT"), as defined in Section 664 of the Code, that realizes UBTI for a taxable year must pay an excise tax annually of an amount equal to such UBTI. Under IRS guidance issued in October 2006, a CRT will not recognize UBTI solely as a result of investing in a fund that recognizes excess inclusion income. Rather, if at any time during any taxable year a CRT (or one of certain other tax-exempt shareholders, such as the United States, a state or political subdivision, or an agency or instrumentality thereof, and certain energy cooperatives) is a record holder of a share in a fund that recognizes excess inclusion income, then the fund will be subject to a tax on that portion of its excess inclusion income for the taxable year that is allocable to such shareholders at the highest federal corporate income tax rate. The extent to which this IRS guidance remains applicable in light of the December 2006 legislation is unclear. To the extent permitted under the 1940 Act, the fund may elect to specially allocate any such tax to the applicable CRT, or other shareholder, and thus reduce such shareholder's distributions for the year by the amount of the tax that relates to such shareholder's interest in the fund. CRTs and other tax-exempt investors are urged to consult their tax advisors concerning the consequences of investing in the fund.

**Return of capital distributions**. If the fund makes a distribution in and with respect to any taxable year to a shareholder in excess of the fund's current and accumulated earnings and profits, the excess distribution will be treated as a return of capital to the extent of such shareholder's tax basis in its shares, and thereafter as capital gain. A return of capital is not taxable, but it reduces a shareholder's tax basis in its shares, thus reducing any loss or increasing any gain on a subsequent taxable disposition by the shareholder of its shares.

Dividends and distributions on the fund's shares generally are subject to federal income tax as described herein to the extent they do not exceed the fund's realized income and gains, even though such dividends and distributions may economically represent a return of a particular shareholder's investment. Such distributions are likely to occur in respect of shares purchased at a time when the fund's net asset value reflects gains that are either unrealized, or realized but not distributed. Such realized income and gains may be required to be distributed even when the fund's net asset value also reflects unrealized losses. Distributions are taxable to a shareholder even if they are paid from income or gains earned by the fund prior to the shareholder's investment (and thus included in the price paid by the shareholder).

**Securities issued or purchased at a discount.** Some debt obligations with a fixed maturity date of more than one year from the date of issuance (and zero-coupon debt obligations with a fixed maturity date of more than one year from the date of issuance) that are acquired by the fund will be treated as debt obligations that are issued originally at a discount. Generally, the amount of the original issue discount ("OID") is treated as interest income and is included in the fund's income (and required to be distributed by the fund) over the term of the debt security, even though payment of that amount is not received until a later time, upon partial or full repayment or disposition of the debt security. In addition, payment-in-kind securities will give rise to

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income which is required to be distributed and is taxable even though the fund holding the security receives no interest payment in cash on the security during the year.

Some debt obligations with a fixed maturity date of more than one year from the date of issuance that are acquired by the fund in the secondary market may be treated as having "market discount." Very generally, market discount is the excess of the stated redemption price of a debt obligation (or in the case of an obligation issued with OID, its "revised issue price") over the purchase price of such obligation. Generally any gain recognized on the disposition of, and any partial payment of principal on, a debt security having market discount is treated as ordinary income to the extent the gain, or principal payment, does not exceed the "accrued market discount" on such debt security. Alternatively, the fund may elect to accrue market discount currently, in which case the fund will be required to include the accrued market discount in the fund's income (as ordinary income) and thus distribute it over the term of the debt security, even though payment of that amount is not received until a later time, upon partial or full repayment or disposition of the debt security. The rate at which the market discount accrues, and thus is included in the fund's income, will depend upon which of the permitted accrual methods the fund elects.

Some debt obligations with a fixed maturity date of one year or less from the date of issuance that are acquired by the fund may be treated as having "acquisition discount" (very generally, the excess of the stated redemption price over the purchase price) or OID. The fund will be required to include the acquisition discount or OID in income over the term of the debt security, even though payment of that amount is not received until a later time, usually when the debt security matures. The fund may make one or more of the elections applicable to debt obligations having acquisition discount or OID, which could affect the character and timing of recognition of income.

If the fund holds the foregoing kinds of obligations, or other obligations subject to special rules under the Code, it may be required to pay out as an income distribution each year an amount which is greater than the total amount of cash interest the fund actually received. Such distributions may be made from the cash assets of the fund or, if necessary, by disposition of portfolio securities including at a time when it may not be advantageous to do so. These dispositions may cause the fund to realize higher amounts of short-term capital gains (generally taxed to shareholders at ordinary income tax rates) and, in the event the fund realizes net capital gains from such transactions, its shareholders may receive a larger capital gain distribution than if the fund had not held such obligations.

**Securities purchased at a premium.** Very generally, where the fund purchases a bond at a price that exceeds the redemption price at maturity (*i*.*e*., a premium), the premium is amortizable over the remaining term of the bond. In the case of a taxable bond, if the fund makes an election applicable to all such bonds it purchases, which election is irrevocable without consent of the IRS, the fund reduces the current taxable income from the bond by the amortized premium and reduces its tax basis in the bond by the amount of such offset; upon the disposition or maturity of such bonds acquired on or after January 4, 2013, the fund is permitted to deduct any remaining premium allocable to a prior period. In the case of a tax-exempt bond, tax rules require the fund to reduce its tax basis by the amount of amortized premium.

**Higher-Risk obligations.** Investments in debt obligations that are at risk of or in default present special tax issues for the fund. Tax rules are not entirely clear about issues such as whether the fund should recognize market discount on a debt obligation and, if so, the amount of market discount the fund should recognize; when the fund may cease to accrue interest, OID or market discount, when and to what extent deductions may be taken for bad debts or worthless securities and how payments received on obligations in default should be allocated between principal and income. These and other related issues will be addressed by the fund when, as and if it invests in such obligations, in order to seek to ensure that it distributes sufficient income to preserve its status as a regulated investment company and does not become subject to U.S. federal income or excise tax.

**Capital loss carryforward.** Distributions from capital gains generally are made after applying any available capital loss carryforwards. Capital loss carryforwards are reduced to the extent they offset current-year net realized capital gains, whether the fund retains or distributes such gains. If a fund incurs or has incurred capital losses in excess of capital gains ("net capital losses"), those losses will be carried forward to one or more subsequent taxable years; any such carryforward losses will retain their character as short-term or long-term.

**Foreign taxes.** If more than 50% of the fund's assets at taxable year end consists of the securities of foreign corporations, the fund may elect to permit shareholders to claim a credit or deduction on their income tax returns for their pro rata portion of qualified taxes paid by the fund to foreign countries in respect of foreign securities the fund has held for at least the minimum period specified in the Code. A qualified fund of funds also may elect to pass through to its shareholders foreign taxes it has paid or foreign taxes passed through to it by any underlying fund that itself elected to pass through such taxes to shareholders (see

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"Funds of funds" above). In such a case, shareholders will include in gross income from foreign sources their pro rata shares of such taxes. A shareholder's ability to claim a foreign tax credit or deduction in respect of foreign taxes paid by the fund may be subject to certain limitations imposed by the Code, as a result of which a shareholder may not get a full credit or deduction for the amount of such taxes. In particular, shareholders must hold their fund shares (without protection from risk of loss) on the ex-dividend date and for at least 15 additional days during the 30-day period surrounding the ex-dividend date to be eligible to claim a foreign tax credit with respect to a given dividend. Shareholders who do not itemize on their U.S. federal income tax returns may claim a credit (but no deduction) for such foreign taxes. Even if the fund is eligible to make such an election for a given year, it may determine not to do so. However, even if the fund elects to pass through to its shareholders foreign tax credits or deductions, tax-exempt shareholders and those who invest in the fund through tax-advantaged accounts such as IRAs will not benefit from any such tax credit or deduction.

**Passive foreign investment companies.** Investments treated as equity for federal income tax purposes in certain "passive foreign investment companies" ("PFICs", as defined below) could subject the fund to a U.S. federal income tax (including interest charges) on distributions received from the company or on the proceeds from the disposition of its investment in such a company. This tax cannot be eliminated by making distributions to fund shareholders; however, this tax can be avoided by making an election to mark such investments to market annually or to treat the passive foreign investment company as a "qualified electing fund." The QEF and mark-to-market elections may have the effect of accelerating the recognition of income (without the receipt of cash) and increasing the amount required to be distributed by the fund to avoid taxation. Making either of these elections therefore may require the fund to liquidate other investments to meet its distribution requirement, which may also accelerate the recognition of gain and affect the fund's total return. Dividends paid by PFICs will not be eligible to be treated as "qualified dividend income." If the fund indirectly invests in PFICs by virtue of the fund's investments in other funds, it may not make such PFIC elections; rather, the underlying funds directly investing in the PFICs would decide whether to make such elections.

Because it is not always possible to identify a foreign corporation as a PFIC, the fund may incur the tax and interest charges described above in some instances.

A PFIC is any foreign corporation: (i) 75 percent or more of the income of which for the taxable year is passive income, or (ii) the average percentage of the assets of which (generally by value, but by adjusted tax basis in certain cases) that produce or are held for the production of passive income is at least 50 percent. Generally, passive income for this purpose means dividends, interest (including income equivalent to interest), royalties, rents, annuities, the excess of gains over losses from certain property transactions and commodities transactions, and foreign currency gains. Passive income for this purpose does not include rents and royalties received by the foreign corporation from active business and certain income received from related persons.

**Foreign currency-denominated transactions and related hedging transactions.** The fund's transactions in foreign currencies, foreign currency-denominated debt obligations and certain foreign currency options, futures contracts and forward contracts (and similar instruments) may give rise to ordinary income or loss to the extent such income or loss results from fluctuations in the value of the foreign currency concerned. Any such net gains could require a larger dividend toward the end of the calendar year. Any such net losses generally will reduce and potentially require the recharacterization of prior ordinary income distributions. Such ordinary income treatment may accelerate fund distributions to shareholders and increase the distributions taxed to shareholders as ordinary income. Any net ordinary losses so created cannot be carried forward by the fund to offset income or gains earned in subsequent taxable years.

**Saleor exchange of shares.** The sale or exchange of fund shares may give rise to a gain or loss. In general, any gain or loss realized upon a taxable disposition of shares will be treated as long-term capital gain or loss if the shares have been held for more than 12 months. Otherwise the gain or loss on the sale or exchange of fund shares will be treated as short-term capital gain or loss. However, if a shareholder sells shares at a loss within six months of purchase, any loss generally will be disallowed for federal income tax purposes to the extent of any exempt-interest dividends received on such shares. This loss disallowance, however, does not apply with respect to dispositions of fund shares held for six months or less with respect to a regular exempt-interest dividend paid by the fund if such fund declares substantially all of its net tax-exempt income as exempt-interest dividends on a daily basis, and pays such dividends at least on a monthly basis. In addition, any loss (not already disallowed as provided in the preceding sentences) realized upon a taxable disposition of shares held for six months or less will be treated as long-term, rather than short-term, to the extent of any Capital Gain Dividends received (or deemed received) by the shareholder with respect to the shares. All or a portion of any loss realized upon a taxable disposition of fund shares will be disallowed if other shares of the same fund are purchased within 30 days before or after the disposition. In such a case, the basis of the newly purchased shares will be adjusted to reflect the disallowed loss.

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**Taxes on purchase and redemption of creation units**. Authorized Participants that are "dealers in securities" for U.S. federal income tax purposes are subject to different rules with respect to holding, acquiring and disposing of securities, including Creation Units. Authorized Participants should consult their own tax advisor with respect to transactions with a fund.

An Authorized Participant who exchanges securities for Creation Units generally will recognize a gain or a loss equal to the difference between the market value of the Creation Units at the time of the exchange and the sum of the exchanger's aggregate basis in the securities surrendered plus any Cash Component it pays. An Authorized Participant who exchanges Creation Units for securities will generally recognize a gain or loss equal to the difference between the exchanger's basis in the Creation Units and the sum of the aggregate market value of the securities received plus any cash equal to the difference between the NAV of the shares being redeemed and the value of the securities. The IRS, however, may assert that a loss realized upon an exchange of securities for Creation Units cannot be deducted currently under the rules governing "wash sales" (for a person who does not mark-to-market its portfolio) or on the basis that there has been no significant change in economic position. Persons exchanging securities should consult their own tax advisor with respect to whether wash sale rules apply and when a loss might be deductible.

Any capital gain or loss realized upon the creation of Creation Units will generally be treated as long-term capital gain or loss if the securities exchanged for such Creation Units have been held for more than one year. Any capital gain or loss realized upon redemption of Creation Units is generally treated as long-term capital gain or loss if the shares have been held for more than one year and as short-term capital gain or loss if the shares have been held for one year or less. Any loss upon a redemption of Creation Units held for six months or less will be treated as a long-term capital loss to the extent of any amounts treated as distributions to the applicable Authorized Participant of long-term capital gain with respect to the Creation Units (including any amounts credited to the Authorized Participant as undistributed capital gains). In addition, any loss realized upon a redemption of fund shares held by an Authorized Participant for six months or less generally will be disallowed, to the extent of any exempt-interest dividends received by the Authorized Participant with respect to the shares.

The fund has the right to reject an order for a purchase of shares of the fund if the purchaser (or group of purchasers) would, upon obtaining the shares so ordered, own 80% or more of the outstanding shares of the fund and if, pursuant to Section 351 of the Code, the fund would have a basis in the securities contributed by such purchaser different from the market value of such securities on the date of deposit. The fund also has the right to require information necessary to determine beneficial share ownership for purposes of the 80% determination.

**Cost basis reporting.** Upon the redemption or exchange of a shareholder's shares in the fund, the fund, or, if such shareholder's shares are then held through a financial intermediary, the financial intermediary, will be required to provide the shareholder and the IRS with cost basis and certain other related tax information about the fund shares the shareholder redeemed or exchanged. This cost basis reporting requirement is effective for shares purchased, including through dividend reinvestment, on or after January 1, 2012. Shareholders should consult their financial representatives for more information regarding available methods for cost basis reporting and how to select a particular method. Shareholders should consult their tax advisors to determine which available cost basis method is best for them.

**Shares purchased through tax-qualified plans.** Special tax rules apply to investments through employer-sponsored retirement plans and other tax-qualified plans or tax-advantaged arrangements. Shareholders should consult their tax advisors to determine the suitability of shares of the fund as an investment through such plans and arrangements and the precise effect of an investment on their particular tax situation.

**Backup withholding.** The fund generally is required to withhold and remit to the U.S. Treasury a percentage of the taxable dividends and other distributions paid to any individual shareholder who fails to furnish the fund with a correct taxpayer identification number (TIN), who has under-reported dividends or interest income, or who fails to certify to the fund that he or she is not subject to such withholding. The backup withholding rules may also apply to distributions that are properly reported as exempt-interest dividends. Backup withholding is not an additional tax. Any amounts withheld may be credited against the shareholder's U.S. federal income tax liability, provided the appropriate information is furnished to the IRS.

In order for a foreign investor to qualify for exemption from the backup withholding tax rates and for reduced withholding tax rates under income tax treaties, the foreign investor must comply with special certification and filing requirements. Foreign investors in a fund should consult their tax advisors in this regard.

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**Tax shelter reporting regulations.** Under U.S. Treasury regulations, if a shareholder recognizes a loss on disposition of fund shares of at least $2 million in any single taxable year or $4 million in any combination of taxable years for an individual shareholder or $10 million in any single taxable year or $20 million in any combination of taxable years for a corporate shareholder, the shareholder must file with the IRS a disclosure statement on Form 8886. Direct shareholders of portfolio securities are in many cases excepted from this reporting requirement, but under current guidance, shareholders of a regulated investment company are not excepted. Future guidance may extend the current exception from this reporting requirement to shareholders of most or all regulated investment companies. The fact that a loss is reportable under these regulations does not affect the legal determination of whether the taxpayer's treatment of the loss is proper. Shareholders should consult their tax advisers to determine the applicability of these regulations in light of their individual circumstances.

**Non-U.S. shareholders.** Distributions by the fund to shareholders that are not "U.S. persons" within the meaning of the Code ("foreign shareholders") properly reported by the fund as (1) Capital Gain Dividends, (2) interest-related dividends, (3) short-term capital gain dividends, each as defined below and subject to certain conditions described below, and (4) exempt-interest dividends generally are not subject to withholding of U.S. federal income tax.

In general, the Code defines (1) "short-term capital gain dividends" as distributions of net short-term capital gains in excess of net long-term capital losses and (2) "interest-related dividends" as distributions from U.S. source interest income of types similar to those not subject to U.S. federal income tax if earned directly by an individual foreign shareholder, in each case to the extent such distributions are properly reported as such by the fund in a written notice to shareholders. The exceptions to withholding for Capital Gain Dividends and short-term capital gain dividends do not apply to (A) distributions to an individual foreign shareholder who is present in the United States for a period or periods aggregating 183 days or more during the year of the distribution and (B) distributions attributable to gain that is treated as effectively connected with the conduct by the foreign shareholder of a trade or business within the United States under special rules regarding the disposition of U.S. real property interests as described below. The exception to withholding for interest-related dividends does not apply to distributions to a foreign shareholder (A) that has not provided a satisfactory statement that the beneficial owner is not a U.S. person, (B) to the extent that the dividend is attributable to certain interest on an obligation if the foreign shareholder is the issuer or is a 10% shareholder of the issuer, (C) that is within certain foreign countries that have inadequate information exchange with the United States, or (D) to the extent the dividend is attributable to interest paid by a person that is a related person of the foreign shareholder and the foreign shareholder is a controlled foreign corporation. If the fund invests in other regulated investment companies that pay Capital Gain Dividends, short-term capital gain dividends or interest-related dividends to the fund, such distributions retain their character as not subject to withholding if properly reported when paid by the fund to foreign shareholders. The fund is permitted to report such part of its dividends as interest-related and/or short-term capital gain dividends as are eligible, but is not required to do so. In the case of shares held through an intermediary, the intermediary may withhold even if the fund reports all or a portion of a payment as an interest-related or short-term capital gain dividend to shareholders.

The fact that a fund achieves its goals by investing in underlying funds generally does not adversely affect the fund's ability to pass on to foreign shareholders the full benefit of the interest-related dividends and short-term capital gain dividends that it receives from its investments in underlying funds, except possibly to the extent that (1) interest-related dividends received by the fund are offset by deductions allocable to the fund's qualified interest income or (2) short-term capital gain dividends received by the fund are offset by the fund's net short- or long-term capital losses, in which case the amount of a distribution from the fund to a foreign shareholder that is properly reported as either an interest-related dividend or a short-term capital gain dividend, respectively, may be less than the amount that such shareholder would have received had they invested directly in the underlying funds.

Distributions by the fund to foreign shareholders other than Capital Gain Dividends, interest-related dividends, and short-term capital gain dividends and exempt-interest dividends (*e.g.*, dividends attributable to dividend and foreign-source interest income or to short-term capital gains or U.S.-source interest income to which the exception from withholding described above does not apply) are generally subject to withholding of U.S. federal income tax at a rate of 30% (or lower applicable treaty rate).

Under U.S. federal tax law, a beneficial holder of shares who is a foreign shareholder is not, in general, subject to U.S. federal income tax on gains (and is not allowed a deduction for losses) realized on the sale of shares of the fund, unless (i) such gain is effectively connected with the conduct of a trade or business carried on by such holder within the United States; (ii) in the case of an individual holder, the holder is present in the United States for a period or periods aggregating 183 days or more during the year of the sale and certain other conditions are met; or (iii) the special rules relating to gain attributable to the sale or exchange of "U.S. real property interests" ("USRPIs") apply to the foreign shareholder's sale of shares of the fund (as described below).

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If a beneficial holder who is a foreign shareholder has a trade or business in the United States, and the dividends are effectively connected with the conduct by the beneficial holder of a trade or business in the United States, the dividend will be subject to U.S. federal net income taxation at regular income tax rates and, in the case of a foreign corporation, may also be subject to a branch profits tax. If a foreign shareholder is eligible for the benefits of a tax treaty, any effectively connected income or gain will generally be subject to U.S. federal income tax on a net basis only if it is also attributable to a permanent establishment maintained by the shareholder in the United States. More generally, foreign shareholders who are residents in a country with an income tax treaty with the United States may obtain different tax results than those described herein, and are urged to consult their tax advisors.

Special rules would apply if the fund were a qualified investment entity ("QIE") because it is either a "U.S. real property holding corporation" ("USRPHC") or would be a USRPHC but for the operation of certain exceptions to the definition of USRPIs described below. Very generally, a USRPHC is a domestic corporation that holds USRPIs the fair market value of which equals or exceeds 50% of the sum of the fair market values of the corporation's USRPIs, interests in real property located outside the United States, and other trade or business assets. USRPIs generally are defined as any interest in U.S. real property and any interest (other than solely as a creditor) in a USRPHC or, very generally, an entity that has been a USRPHC in the last five years. A fund that holds, directly or indirectly, significant interests in REITs may be a USRPHC. Interests in domestically controlled QIEs, including regulated investment companies and REITs that are QIEs, not-greater-than-10% interests in publicly traded classes of stock in REITs and not-greater-than-5% interests in publicly traded classes of stock in regulated investment companies generally are not USRPIs, but these exceptions do not apply for purposes of determining whether a fund is a QIE.

If an interest in the fund were a USRPI, the fund would be required to withhold U.S. tax on the proceeds of a share redemption by a greater-than-5% foreign shareholder, in which case such foreign shareholder generally would also be required to file U.S. tax returns and pay any additional taxes due in connection with the redemption.

If the fund were a QIE under a special "look-through" rule, any distributions by the fund to a foreign shareholder (including, in certain cases, distributions made by the fund in redemption of its shares) attributable directly or indirectly to (i) distributions received by the fund from a lower-tier regulated investment company or REIT that the fund is required to treat as USRPI gain in its hands and (ii) gains realized on the disposition of USRPIs by the fund would retain their character as gains realized from USRPIs in the hands of the fund's foreign shareholders and would be subject to U.S. tax withholding. In addition, such distributions could result in the foreign shareholder being required to file a U.S. tax return and pay tax on the distributions at regular U.S. federal income tax rates. The consequences to a foreign shareholder, including the rate of such withholding and character of such distributions (*e.g.*, as ordinary income or USRPI gain), would vary depending upon the extent of the foreign shareholder's current and past ownership of the fund.

Foreign shareholders of the fund also may be subject to "wash sale" rules to prevent the avoidance of the tax-filing and -payment obligations discussed above through the sale and repurchase of fund shares.

Foreign shareholders should consult their tax advisers and, if holding shares through intermediaries, their intermediaries, concerning the application of these rules to their investment in the fund.

**Other reporting and withholding requirements**. Sections 1471-1474 of the Code and the U.S. Treasury and IRS guidance issued thereunder (collectively, "FATCA") generally require a fund to obtain information sufficient to identify the status of each of its shareholders under FATCA or under an applicable intergovernmental agreement (an "IGA") between the United States and a foreign government. If a shareholder fails to provide the requested information or otherwise fails to comply with FATCA or an IGA, the fund may be required to withhold under FATCA at a rate of 30% with respect to that shareholder on ordinary dividends it pays. The IRS and the Department of Treasury have issued proposed regulations providing that these withholding rules will not be applicable to the gross proceeds of share redemptions or Capital Gain Dividends the fund pays. If a payment by the fund is subject to FATCA withholding, the fund is required to withhold even if such payment would otherwise be exempt from withholding under the rules applicable to foreign shareholders described above (*e.g.*, short-term capital gain dividends and interest-related dividends).

Each prospective investor is urged to consult its tax advisor regarding the applicability of FATCA and any other reporting requirements with respect to the prospective investor's own situation, including investments through an intermediary.

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**General Considerations.** The U.S. federal income tax discussion set forth above is for general information only. Prospective investors should consult their tax advisers regarding the specific federal tax consequences of purchasing, holding, and disposing of shares of the fund, as well as the effects of state, local and foreign tax law and any proposed tax law changes.

#### MANAGEMENT

#### Trustees

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| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp; **Name, Address<sup>1</sup>, Year** <br> **of Birth, Position(s)**<br> **Held with Fund and**<br> **Length of Service as a** <br> **Fund Trustee<sup>2</sup>** | **Principal Occupation(s) During** <br> **Past 5 Years** | **Number of Funds** <br> **in the Franklin**<br> **Templeton Funds** <br> **Complex**<br> **Overseen by**<br> **Trustee<sup>3</sup>** | **Other Directorships Held by Trustee** |
| &nbsp;&nbsp;&nbsp;**Liaquat Ahamed** (Born 1952), Trustee since 2012 | Author; won Pulitzer Prize for *Lords of Finance: The Bankers Who Broke the World.* | 102 | Chair of the Sun Valley Writers Conference, a literary not-for-profit organization; and a Trustee of the Journal of Philosophy. |
| &nbsp;&nbsp;&nbsp;**Barbara M. Baumann** (Born 1955), Trustee since 2010, Vice Chair from 2022 to 2024, Chair since 2024 | President of Cross Creek Energy Corporation, a strategic consultant to domestic energy firms and direct investor in energy projects. | 102 | Director of Devon Energy Corporation, a publicly traded independent natural gas and oil exploration and production company; Director of National Fuel Gas Company, a publicly traded energy company that engages in the production, gathering, transportation, distribution and marketing of natural gas; Senior Advisor to the energy private equity firm First Reserve; member of the Finance Committee of the Children's Hospital of Colorado; member of the Investment Committee of the Board of The Denver Foundation; and previously a Director of publicly traded companies Buckeye Partners LP, UNS Energy Corporation, CVR Energy Company, and SM Energy Corporation. |
| &nbsp;&nbsp;&nbsp;**Katinka Domotorffy** (Born 1975), Trustee since 2012 | Voting member of the Investment Committees of the Anne Ray Foundation and Margaret A. Cargill Foundation, part of the Margaret A. Cargill Philanthropies. | 102 | Director of the Great Lakes Science Center and of College Now Greater Cleveland. |
| &nbsp;&nbsp;&nbsp;**Catharine Bond Hill** (Born 1954), Trustee since 2017 | Managing Director of Ithaka S+R, a not-for-profit service that helps the academic community navigate economic and technological change. From 2006 to 2016, Dr. Hill served as the 10th president of Vassar College. | 102 | Director of Yale-NUS College; and Trustee of Yale University. |
| &nbsp;&nbsp;&nbsp;**Gregory G. McGreevey** (Born 1962), Trustee | Until 2023, Senior Managing Director, Investments, Invesco | 102 | Previously, a Director of Invesco Mortgage Capital, Inc., a publicly traded |

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| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp; **Name, Address<sup>1</sup>, Year** <br> **of Birth, Position(s)**<br> **Held with Fund and**<br> **Length of Service as a** <br> **Fund Trustee<sup>2</sup>** | **Principal Occupation(s) During** <br> **Past 5 Years** | **Number of Funds** <br> **in the Franklin**<br> **Templeton Funds** <br> **Complex**<br> **Overseen by**<br> **Trustee<sup>3</sup>** | **Other Directorships Held by Trustee** |
| &nbsp;&nbsp;&nbsp;since 2024 | Ltd., a global investment firm. |  | real estate investment trust. |
| &nbsp;&nbsp;&nbsp;**\*Jennifer Williams Murphy** (Born 1964), Trustee since 2022 | Chief Executive Officer and Founder of Runa Digital Assets, LLC, an institutional investment advisory firm specializing in active management of digital assets. Until 2021, Chief Operating Officer of<br> Western Asset Management, LLC, a global investment adviser, and Chief Executive Officer and President of Western Asset Mortgage Capital Corporation, a mortgage finance real estate investment trust. | 102 | Previously, a Director of Western Asset Mortgage Capital Corporation. |
| &nbsp;&nbsp;&nbsp;**Marie Pillai** (Born 1954), Trustee since 2022 | Senior Advisor, Hunter Street Partners, LP, an asset-oriented private investment firm; Director of Choice Bank, a private, community bank based in North Dakota. Until 2019, Vice President, Chief Investment Officer and Treasurer of General Mills, Inc., a global food company. | 102 | Member of the Investment Committee of the Bush Foundation, a nonprofit organization supporting community problem-solving in Minnesota, North Dakota and South Dakota; Member of the Finance Council and Corporate Board of the Archdiocese of Saint Paul and Minneapolis; Member of the Curriculum Committee of the Center for Board Certified Fiduciaries, a public benefit corporation providing coursework for developing fiduciaries; previously a Board Member of Catholic Charities of St. Paul and Minneapolis; former Director of the Catholic Community Foundation of Minnesota; and former Investment Advisory Board Member of the University of Minnesota. |
| &nbsp;&nbsp;&nbsp;**George Putnam III** (Born 1951), Trustee since 1984 | Chair of New Generation Research, Inc., a publisher of financial advisory and other research services, and President of New Generation Advisors, LLC, a registered investment adviser to private funds. | 102 | Director of The Boston Family Office, LLC, a registered investment adviser; a Director of the Gloucester Marine Genomics Institute; a Trustee of the Lowell Observatory Foundation; and previously a Trustee of the Marine Biological Laboratory. |
| &nbsp;&nbsp;&nbsp;**Manoj P. Singh** (Born 1952), Trustee since 2017 | Until 2015, Chief Operating Officer and Global Managing Director at Deloitte Touche Tohmatsu, Ltd., a global professional services organization, serving on the Deloitte U.S. Board of Directors and the boards of Deloitte member | 102 | Director of ReNew Energy Global Plc, a publicly traded renewable energy company; Director of Abt Associates, a global research firm working in the fields of health, social and environmental policy, and international development; Trustee of Carnegie Mellon University; |

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| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp; **Name, Address<sup>1</sup>, Year** <br> **of Birth, Position(s)**<br> **Held with Fund and**<br> **Length of Service as a** <br> **Fund Trustee<sup>2</sup>** | **Principal Occupation(s) During** <br> **Past 5 Years** | **Number of Funds** <br> **in the Franklin**<br> **Templeton Funds** <br> **Complex**<br> **Overseen by**<br> **Trustee<sup>3</sup>** | **Other Directorships Held by Trustee** |
|  | firms in China, Mexico and Southeast Asia. |  | Director of Pratham USA, an organization dedicated to children's education in India; member of the advisory board of Altimetrik, a business transformation and technology solutions firm; and Director of DXC Technology, a global IT services and consulting company. |
| &nbsp;&nbsp;&nbsp;**Mona K. Sutphen** (Born 1967), Trustee since 2020 | Partner, Investment Strategies at The Vistria Group, a private investment firm focused on middle-market companies in the healthcare, education, and financial services industries. From 2014 to 2018, Partner at Macro Advisory Partners, a global consulting firm. | 102 | Director of Spotify Technology S.A., a publicly traded audio content streaming service; Director of Unitek Learning, a private nursing and medical services education provider in the United States; Board Member, International Rescue Committee; Co-Chair of the Board of Human Rights First; Trustee of Mount Holyoke College; member of the Advisory Board for the Center on Global Energy Policy at Columbia University's School of International and Public Affairs; previously Director of Pattern Energy and Pioneer Natural Resources, publicly traded energy companies; and previously Managing Director of UBS AG. |
| &nbsp;&nbsp;&nbsp; **Interested Trustees** |  |  |  |
| &nbsp;&nbsp;&nbsp;**\*\*Robert L. Reynolds** (Born 1952), Trustee since 2008 | Chair of Great-West Lifeco U.S. LLC. Prior to 2019, also President and Chief Executive Officer of Great-West Financial, a financial services company that provides retirement savings plans, life insurance, and annuity and executive benefits products, and of Great-West Lifeco U.S. LLC, a holding company that owns Putnam Investments, LLC and Great-West Financial, and a member of Great-West Financial's Board of Directors. Until 2023, President and Chief Executive Officer of Putnam Investments, LLC, President and Chief Executive Officer of Putnam Management, and member of Putnam Investments' Board of Directors. | 102 | Director of the Concord Museum; Director of Dana-Farber Cancer Institute; Director of the U.S. Ski & Snowboard Foundation; Chair of the Boston Advisory Board of the American Ireland Fund; Council Co-Chair of the American Enterprise Institute; Member of U.S. Chamber of Commerce, Center for Capital Markets Competitiveness; Chair of Massachusetts High Technology Council; Member of the Chief Executives Club of Boston; Member of the Massachusetts General Hospital President's Council; Chairman of the Board of Directors of the Ron Burton Training Village; Director and former Chair of the Massachusetts Competitive Partnership; former Chair of the West Virginia University Foundation; and former Executive Committee Member of the Greater Boston Chamber of |

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| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp; **Name, Address<sup>1</sup>, Year** <br> **of Birth, Position(s)**<br> **Held with Fund and**<br> **Length of Service as a** <br> **Fund Trustee<sup>2</sup>** | **Principal Occupation(s) During** <br> **Past 5 Years** | **Number of Funds** <br> **in the Franklin**<br> **Templeton Funds** <br> **Complex**<br> **Overseen by**<br> **Trustee<sup>3</sup>** | **Other Directorships Held by Trustee** |
|  |  |  | Commerce. |
| &nbsp;&nbsp;&nbsp;**\*\*\* Jane E. Trust** (Born 1962), Trustee since 2024 | Since 2020, Senior Vice President, Fund Board Management, Franklin Templeton. Since 2015, Officer and/or Trustee/Director of 123 funds associated with Franklin Templeton Fund Advisor, LLC ("FTFA") or its affiliates, and President and Chief Executive Officer of FTFA. From 2018 to 2020, Senior Managing Director of Legg Mason & Co., LLC ("Legg Mason & Co."). From 2016 to 2018, Managing Director of Legg Mason & Co. In 2015, Senior Vice President of FTFA. | 225 | None. |

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<sup>1</sup> The address of each Trustee is 100 Federal Street, Boston, MA 02110.

<sup>2</sup> Each Trustee serves for an indefinite term, until his or her resignation, retirement during the year he or she reaches age 75, death or removal.

<sup>3</sup> The Franklin Templeton funds complex is composed of the registered investment companies advised by the Investment Manager or by its affiliates.

\* Ms. Murphy is the founder, controlling member, and Chief Executive Officer of Runa Digital Assets, LLC ("RDA"), the investment manager of Runa Digital Partners, LP ("RDP"), a private investment fund. Ms. Murphy also holds a controlling interest in RDP's general partner and is a limited partner in RDP. A subsidiary of Franklin Resources, Inc. ("Franklin Templeton") and certain individuals employed by Franklin Templeton or its affiliates have made passive investments as limited partners in RDP (one of whom serves on the advisory board for RDA, which has no governance or oversight authority over RDA), representing in the aggregate approximately 38% of RDP as of April 30, 2025. In addition, if certain conditions are met, Franklin Templeton will be entitled to receive a portion of any incentive compensation allocable to RDP's general partner. For so long as Franklin Templeton maintains its investment in RDP, Ms. Murphy also has agreed upon request to advise and consult with Franklin Templeton and its affiliates on the market for digital assets. Ms. Murphy provides similar service to other limited partners in RDP that request her advice. With regard to Ms. Murphy, the relationships described above may give rise to a potential conflict of interest with respect to the funds.

\*\* Trustee who is an "interested person" (as defined in the 1940 Act) of the fund and the Investment Manager. Mr. Reynolds is deemed an "interested person" by virtue of his position as an officer of the fund and his direct beneficial interest in shares of Franklin Templeton, of which the Investment Manager is an indirect wholly-owned subsidiary. Mr. Reynolds is the President of your fund and each of the other Putnam funds, and prior to January 1, 2024, Mr. Reynolds was President and Chief Executive Officer of Putnam Management and Putnam Investments, LLC ("Putnam Investments"), the previous parent company to Putnam Management.

\*\*\* Trustee who is an "interested person" (as defined in the 1940 Act) of the fund and the Investment Manager. Ms. Trust is deemed an "interested person" by virtue of her positions with certain affiliates of the Investment Manager.

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#### Trustee Qualifications
Each of the fund's Trustees, with the exception of Ms. Trust and Mr. McGreevey, was most recently elected by shareholders of the fund during 2022, although most of the Trustees have served on the Board for many years. The Board Policy and Nominating Committee is responsible for recommending proposed nominees for election to the full Board of Trustees for its approval. As part of its deliberative process, the Committee considers the experience, qualifications, skills and attributes, including diversity of background, experience, and views, that it determines would most benefit the funds overseen by the Board of Trustees at the time.

In recommending the election of the board members as Trustees, the Committee generally considered the educational, business and professional experience of each Trustee in determining his or her qualifications to serve as a Trustee of the fund, including the Trustee's record of service as a director or trustee of public and private organizations. (This included, but was not limited to, consideration of the specific experience noted in the preceding table.) In the case of most members of the Board, the Committee considered his or her previous service as a member of the Board of Trustees, which demonstrated a high level of diligence and commitment to the interests of fund shareholders and an ability to work effectively and collegially with other members of the Board.

The Committee also considered, among other factors, the particular attributes described below with respect to the various individual Trustees and considered the attributes as indicative of the person's ability to deal effectively with the types of financial, regulatory, and/or investment matters that typically arise in the course of a Trustee's work:

<u>Independent Trustees</u> 

Liaquat Ahamed – Mr. Ahamed's experience as Chief Executive Officer of a major investment management organization and as head of the investment division at the World Bank, as well as his experience as an author of economic literature.

Barbara M. Baumann – Ms. Baumann's experience in the energy industry as a consultant, an investor, and in both financial and operational management positions at a global energy company, and her service as a director of multiple NYSE companies.

Katinka Domotorffy – Ms. Domotorffy's experience as Chief Investment Officer and Global Head of Quantitative Investment Strategies at a major asset management organization.

Catharine Bond Hill – Dr. Hill's education and experience as an economist and as president and provost of colleges in the United States.

Gregory G. McGreevey – Mr. McGreevey's experience as a Senior Managing Director of a global investment firm and as a director of a publicly traded real estate investment trust.

Jennifer Williams Murphy – Ms. Murphy's experience as Chief Operating Officer of a major global investment management organization and as Chief Executive Officer of an investment advisory firm specializing in digital assets.

Marie Pillai – Ms. Pillai's experience as Vice President, Chief Investment Officer, and Treasurer of a global food company, her experience in similar positions at a global engineering company, and her experience in corporate and operational finance roles at a global consumer products company.

George Putnam III – Mr. Putnam's training and experience as an attorney, his experience as the founder and Chief Executive Officer of an investment management firm and his experience as an author of various publications on the subject of investments.

Manoj P. Singh – Mr. Singh's experience as chief operating officer and global managing director of a global professional services organization that provided accounting, consulting, tax, risk management, and financial advisory services.

Mona K. Sutphen – Ms. Sutphen's extensive experience advising corporate, philanthropic and institutional investors on the intersection of geopolitics, policy and markets, as well as her prior service as White House Deputy Chief of Staff for Policy and as a US Foreign Service Officer, her work advising financial services companies on macro risks, and her service as director of public companies.

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<u>Interested</u> Trustees

Robert L. Reynolds – Mr. Reynolds's extensive experience as a senior executive of a major mutual fund organization in the United States and his previous role as President and Chief Executive Officer of Putnam Management and Putnam Investments, LLC, the previous parent company to Putnam Management and PAC.

Jane E. Trust – Ms. Trust's investment management and risk oversight experience as an executive and portfolio manager and leadership roles within Franklin Templeton and affiliated entities.

#### Officers
The other officers of the fund, in addition to Robert L. Reynolds, the fund's President, are shown below. All of the officers of your fund listed below are employees of the Investment Manager or its affiliates or are members of the Trustees' independent administrative staff.

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp; **Name, Address<sup>1</sup>, Year of Birth, Position(s)**<br> **Held with Fund**  | **Length of Service**<br> **with the Putnam**<br> **Funds<sup>2</sup>** | **Principal Occupation(s) During Past 5 Years and**<br> **Position(s) with Fund's Investment Adviser and**<br> **Distributor<sup>3</sup>** |
| &nbsp;&nbsp;&nbsp; **Jonathan S. Horwitz<sup>4</sup>** (Born 1955)<br> Executive Vice President, Principal Executive Officer, and Compliance Liaison | Since 2004 | Executive Vice President, Principal Executive Officer, and Compliance Liaison, The Putnam Funds. |
| &nbsp;&nbsp;&nbsp; **Stephen J. Tate** (Born 1974)<br> Vice President and Chief Legal Officer | Since 2021 | Deputy General Counsel, Franklin Templeton, and Secretary, Putnam U.S. Holdings I, LLC ("Putnam Holdings") and Putnam Management (2024 – Present). General Counsel and related positions, Putnam Investments, Putnam Management and Putnam Retail Management (2004-2023). |
| &nbsp;&nbsp;&nbsp; **James F. Clark<sup>3</sup>** (Born 1974)<br> Vice President and Chief Compliance Officer | Since 2016 | Chief Compliance Officer, Putnam Holdings and Putnam Management (2016 – Present). Associate General Counsel, Putnam Investments, Putnam Management and Putnam Retail Management (2003-2015). |
| &nbsp;&nbsp;&nbsp; **Michael J. Higgins<sup>4</sup>** (Born 1976)<br> Vice President, Treasurer, and Clerk | Since 2010 | Vice President, Treasurer, and Clerk, The Putnam Funds. |
| &nbsp;&nbsp;&nbsp; **Kelley Hunt** (Born 1984)<br> AML Compliance Officer | Since 2024 | Manager, U.S. Financial Crime Compliance, Franklin Templeton. |
| &nbsp;&nbsp;&nbsp; **Jeffrey White** (Born 1971)<br> Vice President, Principal Financial Officer, Principal Accounting Officer, and Assistant Treasurer | Since 2024 | Vice President, Fund Administration and Reporting, Franklin Templeton. |
| &nbsp;&nbsp;&nbsp; **Denere P. Poulack<sup>4</sup>** (Born 1968)<br> Assistant Vice President, Assistant Clerk, and Assistant Treasurer | Since 2004 | Assistant Vice President, Assistant Clerk, and Assistant Treasurer, The Putnam Funds. |

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<sup>1</sup> The address of each Officer, other than as noted below, is 100 Federal Street, Boston, MA 02110. Ms. Hunt's address is 100 Fountain Parkway, St. Petersburg, FL 33716. Mr. White's address is One Franklin Parkway, San Mateo, CA 94403.

<sup>2</sup> Each officer serves for an indefinite term, until his or her resignation, retirement, death or removal.

<sup>3</sup> Prior positions and/or officer appointments with the fund or the fund's investment adviser and distributor have been omitted.

<sup>4</sup> Officers of the fund indicated are members of the Trustees' independent administrative staff. Compensation for these individuals is fixed by the Trustees and reimbursed to the Investment Manager by the funds, except in certain cases where a fund has a unitary fee and/or expense limitation arrangement whereby the Investment Manager is responsible for all or a portion of these individuals' compensation.

Except as stated above, the principal occupations of the officers and Trustees for the last five years have been with the employers as shown above, although in some cases they have held different positions with such employers.

#### Leadership Structure and Standing Committees of the Board of Trustees
**For details regarding the number of times the standing committees of the Board of Trustees met during a fund's last fiscal year, see "Trustee responsibilities and fees" in Part I of this SAI.** 

**Board Leadership Structure**. Currently, 10 of the 12 Trustees of your fund are Independent Trustees, meaning that they are not considered "interested persons" of your fund or the Investment Manager. These Independent Trustees must vote separately to approve all financial arrangements and other agreements with the Investment Manager and other affiliated parties. The role of independent trustees has been characterized as that of a "watchdog" charged with oversight to protect shareholders' interests against overreaching and abuse by those who are in a position to control or influence a fund. Your fund's Independent Trustees meet regularly as a group in executive session (*i.e*., without representatives of the Investment Manager or its affiliates present). An Independent Trustee currently serves as chair of the Board.

Taking into account the number, the diversity and the complexity of the funds overseen by the Board and the aggregate amount of assets under management, your fund's Trustees have determined that the efficient conduct of the Board's affairs makes it desirable to delegate responsibility for certain specific matters to committees of the Board. The Executive Committee, Audit, Compliance and Risk Committee, and Board Policy and Nominating Committee are authorized to take action on certain matters as specified in their charters or in policies and procedures relating to the governance of the funds; with respect to other matters, these committees review and evaluate and make recommendations to the Trustees as they deem appropriate. The other committees also review and evaluate matters specified in their charters and make recommendations to the Trustees as they deem appropriate. Each committee may utilize the resources of your fund's independent staff, counsel and independent registered public accountants as well as other experts. The committees meet as often as appropriate, either in conjunction with regular meetings of the Trustees or otherwise. The membership and chair of each committee are appointed by the Trustees upon recommendation of the Board Policy and Nominating Committee. Each committee is chaired by an Independent Trustee and, except as noted below, the membership and chairs of each committee consist exclusively of Independent Trustees.

The Trustees have determined that this committee structure also allows the Board to focus more effectively on the oversight of risk as part of its broader oversight of the fund's affairs. While risk management is the primary responsibility of the Investment Manager, the Trustees receive reports regarding investment risks, compliance risks and other risks. The Board and certain committees also meet periodically with the funds' Chief Compliance Officer to receive compliance reports. In addition, the Board and its Investment Oversight Committees meet periodically with the portfolio managers of the funds to receive reports regarding the management of the funds. The Board's committee structure allows separate committees to focus on different aspects of these risks and their potential impact on some or all of the funds and to discuss with the Investment Manager how it monitors and controls risks.

The Board recognizes that the reports it receives concerning risk management matters are, by their nature, typically summaries of the relevant information. Moreover, the Board recognizes that not all risks that may affect your fund can be identified in advance; that it may not be practical or cost effective to eliminate or to mitigate certain risks; that it may be necessary to bear certain risks (such as investment-related risks) in seeking to achieve your fund's investment objectives; and that the processes,

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procedures and controls employed to address certain risks may be limited in their effectiveness. As a result of the foregoing and for other reasons, the Board's risk management oversight is subject to substantial limitations.

**Audit, Compliance and Risk Committee**. The Audit, Compliance and Risk Committee provides oversight on matters relating to the integrity of the funds' financial statements, compliance with legal and regulatory requirements, the performance of each fund's internal audit function, Codes of Ethics issues, and certain aspects of overseeing the Investment Manager's risk assessment and risk management. This oversight is discharged by regularly meeting with management and the funds' independent registered public accountants and remaining current with respect to industry developments. Duties of this Committee also include the review and evaluation of all matters and relationships pertaining to the funds' independent registered public accountants, including their independence, and the review of the Investment Manager's oversight of the funds' significant other service providers (unless another committee, or the Board, has this responsibility). The Committee also oversees all dividends and distributions by the funds by making recommendations to the Trustees regarding the amount and timing of dividends and distributions paid by the funds, and determining such matters when the Trustees are not in session. The Committee also oversees the policies and procedures pursuant to which the Investment Manager prepares recommendations for dividends and distributions, and meets regularly with representatives of the Investment Manager to review the implementation of these policies and procedures. The Committee reports to the Trustees and makes recommendations to the Trustees regarding these matters.

The Committee also oversees the valuation of assets of the funds overseen by the Board of Trustees and reviews the funds' policies and procedures for achieving accurate and timely pricing of fund shares. The Committee oversees implementation of these policies, including fair value determinations of individual investments made by the Investment Manager or other designated agents of the funds. The Committee also reviews (i) compliance by money market funds with Rule 2a-7 under the 1940 Act, (ii) in-kind redemptions by fund affiliates, (iii) the correction of occasional pricing errors, and (iv) the Investment Manager's oversight of pricing vendors. The Committee reports to the Trustees and makes recommendations to the Trustees regarding these matters.

The members of the Committee include only Independent Trustees. Each member of the Committee also is "independent," as that term is interpreted for purposes of Rule 10A-3(b)(1) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and the listing standards of the NYSE. The Board has adopted a written charter for the Committee. The current members are Messrs. Singh (Chair) and McGreevey and Mses. Pillai and Sutphen.

**Board Policy and Nominating Committee.** The Board Policy and Nominating Committee reviews matters pertaining to the operations of the Board of Trustees and its Committees, the compensation of the Trustees and their staff, and the conduct of legal affairs for the funds. The Committee evaluates and recommends all candidates for election as Trustees and recommends the appointment of members and chairs of each board committee. The Committee will consider nominees for Trustee recommended by shareholders of a fund provided that such recommendations are submitted by the date disclosed in the fund's proxy statement and otherwise comply with applicable securities laws, including Rule 14a-8 under the Exchange Act. The Committee also reviews policy matters affecting the operation of the Board and its independent staff. In addition, the Committee oversees the voting of proxies associated with portfolio investments of the funds with the goal of ensuring that these proxies are voted in the best interest of the funds' shareholders. The Committee reports to the Trustees and makes recommendations to the Trustees regarding these matters. The Committee generally believes that the Board benefits from diversity of background, experience and views among its members, and considers this as a factor in evaluating the composition of the Board, but has not adopted any specific policy in this regard. The Committee is composed entirely of Independent Trustees. The current members are Dr. Hill (Chair), Mses. Baumann and Sutphen, and Mr. Putnam.

**Contract Committee**. The Contract Committee reviews and evaluates at least annually arrangements pertaining to (i) the engagement of the Investment Manager and its affiliates to provide services to the funds, (ii) the expenditure of the funds' assets for distribution purposes pursuant to Distribution Plans of the funds, and (iii) the engagement of other persons to provide material services to the funds, including in particular those instances where the cost of services is shared between the funds and the Investment Manager and its affiliates or where the Investment Manager or its affiliates have a material interest. The Committee also reviews the proposed organization of new fund products and proposed structural changes to existing funds. In addition, the Committee reviews communications with, and the quality of services provided to, shareholders and oversees the marketing and sale of fund shares by Franklin Distributors. The Committee reports to the Trustees and makes recommendations to the Trustees regarding these matters.

------

The Committee also reviews the funds' policies regarding the execution of portfolio trades and the Investment Manager's (and its affiliates') practices and procedures relating to the implementation of those policies. The Committee reviews periodic reports on the cost and quality of execution of portfolio transactions and the extent to which brokerage commissions have been used (i) by the Investment Manager (or its affiliates) to obtain brokerage and research services generally useful to it (or its affiliates) in managing the portfolios of the funds and of its other clients, and (ii) by the funds to pay for certain fund expenses. The Committee reports to the Trustees and makes recommendations to the Trustees regarding these matters.

The Committee is composed entirely of Independent Trustees. The current members are Messrs. Putnam (Chair) and Ahamed, Mses. Baumann and Domotorffy, and Dr. Hill.

**Executive Committee**. The functions of the Executive Committee are twofold. The first is to ensure that the funds' business may be conducted at times when it is not feasible to convene a meeting of the Trustees or for the Trustees to act by written consent. The Committee may exercise any or all of the power and authority of the Trustees when the Trustees are not in session. The second is to review annual and ongoing goals, objectives and priorities for the Board and to facilitate coordination of all efforts between the Trustees and the Investment Manager on behalf of the shareholders of the funds. The Committee currently consists of Ms. Baumann (Chair) and Messrs. Putnam and Singh.

**Investment Oversight Committees.** The Investment Oversight Committees regularly meet with investment personnel of the Investment Manager and its affiliates to review the investment performance and strategies of the funds in light of their stated goals and policies. The Committees seek to identify any compliance issues that are unique to the applicable categories of funds and work with the appropriate board committees to ensure that any such issues are properly addressed. The Committees review the proposed investment objectives, policies and restrictions of new fund products and proposed changes to investment objectives, policies and restrictions of existing funds. The Committees also review matters relating to the exemptive order(s) and rules specifically applicable to the ETFs and any other matters arising from time to time relating to the ETFs that are not otherwise within the general subject matter purview of another committee. The current members of Investment Oversight Committee A are Mses. Domotorffy (Chair), Baumann, and Trust, Dr. Hill, and Messrs. McGreevey and Putnam, and the current members of Investment Oversight Committee B are Mses. Pillai (Chair), Murphy and Sutphen, and Messrs. Ahamed, Reynolds, and Singh.

#### Indemnification
Subject to certain exceptions specified therein, the Trust's Amended and Restated Agreement and Declaration of Trust provides that the Trust and each fund will indemnify its Trustees and officers to the fullest extent permitted by law against liability and against all expenses reasonably incurred or paid by him or her in connection with any claim, action, suit or proceeding in which he or she becomes involved as a party or otherwise by virtue of his or her being or having been a trustee or officer of the Trust and against amounts paid or incurred by him or her in the settlement thereof. Each fund, at its expense, provides liability insurance for the benefit of its Trustees and officers.

**For details of Trustees' fees paid by the fund and information concerning retirement guidelines for the Trustees, see "Charges and expenses" in Part I of this SAI.** 

#### The Investment Manager and its Affiliates
*Putnam Investment Management, LLC* 

If so disclosed in the fund's prospectus, Putnam Management serves as Investment Manager to the fund. Putnam Management is one of America's oldest money management firms. Putnam Management has been managing mutual funds since 1937.

*Franklin Advisers, Inc.* 

If so disclosed in the fund's prospectus, Franklin Advisers serves as Investment Manager to the fund. Franklin Advisers, Inc., a global investment organization, is a California corporation formed on October 31, 1985.

#### Additional information about Putnam Management and Franklin Advisers

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Putnam Management and Franklin Advisers are indirect, wholly-owned subsidiaries of Franklin Templeton, a Delaware corporation. Franklin Templeton, whose principal executive offices are at One Franklin Parkway, San Mateo, California 94403, is a global investment management organization.

Trustees and officers of the fund who are also officers of Putnam Management, Franklin Advisers or their affiliates or who are stockholders of Franklin Templeton or its affiliates will benefit from the advisory fees, sales commissions, distribution fees and transfer agency fees paid or allowed by the fund.

#### The Management Contract
Under a management contract between the fund and the Investment Manager (the "Management Contract"), subject to such policies as the Trustees may determine, the Investment Manager, at its expense, furnishes continuously an investment program for the fund and makes investment decisions on behalf of the fund. Subject to the control of the Trustees, the Investment Manager also manages, supervises and conducts the other affairs and business of the fund, furnishes all necessary investment and management facilities, including salaries of personnel, required for it to execute its duties faithfully, furnishes office space and equipment, provides bookkeeping and clerical services (including determination of the fund's net asset value, but excluding shareholder accounting services) and typically places orders for the purchase and sale of the fund's portfolio securities (in some cases, Putnam Management and Franklin Advisers, in their capacities as sub-advisers to a fund, may place orders for the purchase and sale of the fund's portfolio securities, and references elsewhere in this SAI to the Investment Manager placing orders for the purchase and sale of portfolio securities shall be deemed to include Putnam Management and Franklin Advisers in their capacities as sub-advisers, as appropriate in the context). The Investment Manager may place fund portfolio transactions with broker-dealers that furnish the Investment Manager, without cost to it, certain research services of value to the Investment Manager and its affiliates in advising the fund and other clients. In so doing, the Investment Manager may cause the fund to pay greater brokerage commissions than it might otherwise pay.

Franklin Templeton Services, LLC ("FT Services") has entered into an agreement with the Investment Manager to provide certain administrative services and facilities for the fund. FT Services is an indirect, wholly-owned subsidiary of Franklin Templeton and is an affiliate of the Investment Manager, the fund's investment manager. The administrative services FT Services provides include preparing and maintaining books, records, and tax and financial reports, and monitoring compliance with regulatory requirements. The Investment Manager pays FT Services a monthly fee equal to 105% of the internal costs incurred by FTS for providing administrative services to the Putnam ETFs. The Investment Manager will also reimburse FT Services for fees paid by FT Services to any third-party service provider for sub-administration and other services for the fund.

#### For details of the Investment Manager's compensation under the Management Contract, see "Charges and expenses" in Part I of this SAI.
The Management Contract provides that the Investment Manager shall not be subject to any liability to the fund or to any shareholder of the fund for any act or omission in the course of or connected with rendering services to the fund in the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of its duties on the part of the Investment Manager.

The Management Contract may be terminated without penalty by vote of the Trustees or the shareholders of the fund, or by the Investment Manager, on not less than 60 days' written notice. Subject to certain exceptions, it may be amended only by a vote of the shareholders of the fund. The Management Contract also terminates without payment of any penalty in the event of its assignment. The Management Contract provides that it will continue in effect only so long as such continuance is approved at least annually by vote of either the Trustees or the shareholders, and, in either case, by a majority of the Trustees who are not "interested persons" of the Investment Manager or the fund. In each of the foregoing cases, the vote of the shareholders is the affirmative vote of a "majority of the outstanding voting securities" as defined in the 1940 Act.

FT Services has entered into a Sub-Administration and Accounting Agreement with The Bank of New York Mellon ("BNY Mellon"), under which FT Services has delegated to BNY Mellon responsibility for providing certain administrative, pricing, and bookkeeping services for the fund. FT Services pays BNY Mellon a monthly fee based on a combination of fixed annual charges and charges based on the fund's assets and the number and types of securities held by the fund and reimburses BNY Mellon for certain out-of-pocket expenses.

#### The Sub-Advisers

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*Putnam Investment Management, LLC* 

If so disclosed in the fund's prospectus, Putnam Management, an affiliate of Franklin Advisers, has been retained as a sub-adviser by Franklin Advisers, at Franklin Advisers' own expense, to make investment decisions for such fund assets as may be designated from time to time for its management by Franklin Advisers and to provide certain other advisory and related services pursuant to a subadvisory agreement between Franklin Advisers and Putnam Management. The other advisory and related services may include the facilitation of derivative transactions, sharing of investment research if so requested by Franklin Advisers, and proxy voting, and these services are subject to change over time.

The subadvisory agreement provides that Putnam Management shall not be subject to any liability to Franklin Advisers, the fund or any shareholder of the fund for any act or omission in the course of or connected with rendering services to the fund in the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations and duties on the part of Putnam Management.

The subadvisory agreement may be terminated with respect to the fund without penalty by vote of the Trustees or shareholders of the fund, or by Franklin Advisers or Putnam Management upon 60 days' written notice. The subadvisory agreement also terminates without payment of any penalty in the event of its assignment or upon any termination of the management contract between Franklin Advisers and the fund. The subadvisory agreement provides that it will continue in effect only so long as such continuance is approved at least annually by vote of either the Trustees or the shareholders, and, in either case, by a majority of the Trustees who are not parties to the subadvisory agreement or "interested persons" thereof. In each of the foregoing cases, the vote of the shareholders is the affirmative vote of a "majority of the outstanding voting securities" as defined in the 1940 Act.

For additional information about Putnam Management, see "Putnam Investment Management, LLC" under "The Investment Manager and its Affiliates" above.

*Franklin Advisers, Inc.* 

If so disclosed in the fund's prospectus, Franklin Advisers, an affiliate of Putnam Management, has been retained as a sub-adviser to provide by Putnam Management, at Putnam Management's own expense, to make investment decisions for such fund assets as may be designated from time to time for its management by Putnam Management and to provide certain other advisory and related services pursuant to a subadvisory agreement between Putnam Management and Franklin Advisers. The other advisory and related services may include the facilitation of foreign exchange transactions, sharing of investment research if so requested by Putnam Management, and managing the fund's investments in cash or cash equivalents, and these services are subject to change over time.

The subadvisory agreement provides that Franklin Advisers shall not be subject to any liability to Putnam Management, the fund or any shareholder of the fund for any act or omission in the course of or connected with rendering services to the fund in the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations and duties on the part of Franklin Advisers.

The subadvisory agreement may be terminated with respect to the fund without penalty by vote of the Trustees or shareholders of the fund, or by Putnam Management or Franklin Advisers or upon 60 days' written notice. The subadvisory agreement also terminates without payment of any penalty in the event of its assignment or upon any termination of the management contract between Putnam Management and the fund. The subadvisory agreement provides that it will continue in effect only so long as such continuance is approved at least annually by vote of either the Trustees or the shareholders, and, in either case, by a majority of the Trustees who are not parties to the subadvisory agreement or "interested persons" thereof. In each of the foregoing cases, the vote of the shareholders is the affirmative vote of a "majority of the outstanding voting securities" as defined in the 1940 Act.

For additional information about Franklin Advisers, see "Franklin Advisers, Inc." under "The Investment Manager and its Affiliates" above.

*Franklin Templeton Investment Management Limited* 

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If so disclosed in the fund's prospectus, FTIML, an affiliate of the Investment Manager, has been retained as a sub-adviser for a portion of the assets of the fund, as determined from time to time by the Investment Manager pursuant to a sub-advisory agreement between the Investment Manager and FTIML. Under the terms of the sub-advisory agreement, FTIML, at its own expense, manages the investment and reinvestment of that portion of each such fund's portfolio that is allocated to FTIML from time to time by the Investment Manager, with FTIML determining what securities and other property will be purchased, retained or sold with respect to such portion, and placing all purchase and sale orders with respect to such portion, subject to the supervision of the Investment Manager. The Investment Manager may also, at its discretion, request FTIML to provide assistance with purchasing and selling securities for the fund, including placement of orders with certain broker-dealers, and to perform research and obtain and evaluate data relevant to the fund's investment strategies and policies.

Pursuant to the terms of the sub-advisory agreement, FTIML will pay all expenses incurred by it in connection with its activities under this agreement other than the cost of securities (including brokerage commissions, if any) purchased for the fund. The sub-advisory agreement provides that, in the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations and duties on the part of FTIML, neither FTIML, nor any of its directors, officers, employees or affiliates, shall be subject to liability to the Investment Manager, the fund or any shareholder of the fund for any error of judgment or mistake of law or any other act or omission in the course of, or connected with, rendering services to the fund or for any losses that may be sustained in the purchase, holding or sale of any security by the fund.

The sub-advisory agreement may be terminated at any time with respect to a fund without penalty by vote of the Trustees or the shareholders of the fund upon not more than sixty days' written notice to the Investment Manager and FTIML, and by FTIML or the Investment Manager on not more than 60 days' written notice to the other party. The sub-advisory agreement also terminates without payment of any penalty in the event of its assignment. Subject to applicable law, it may be amended by a majority of the Trustees who are not "interested persons" of the Investment Manager or the fund. The sub-advisory agreement provides that it will continue in effect only so long as such continuance is approved at least annually by vote of either the Trustees or the shareholders, and, in either case, by a majority of the Trustees who are not "interested persons" of the Investment Manager or the fund. In each of the foregoing cases, the vote of the shareholders is the affirmative vote of a "majority of the outstanding voting securities" as defined in the 1940 Act.

*PanAgora Asset Management, Inc.* 

If so disclosed in the fund's prospectus, PanAgora, an affiliate of Putnam Management, has been retained as the sub-adviser for a portion of the assets of the fund, as determined from time to time by Putnam Management, by Putnam Management pursuant to a sub-advisory agreement between Putnam Management and PanAgora.

PanAgora, a Delaware corporation organized in 1985 and incorporated in 1989, is located at One International Place, 24th Floor, Boston, Massachusetts 02110. In addition, certain PanAgora employees own non-voting interests in PanAgora. Assuming all employee stock and options are issued and exercised, up to 20% of the economic interest in PanAgora would be owned by PanAgora employees.

Under certain terms of the sub-advisory agreement, PanAgora, at its own expense, furnishes continuously an investment program for that portion of each such fund that is allocated to PanAgora from time to time by Putnam Management, and makes investment decisions on behalf of such portion of the fund, subject to the supervision of the Board of Trustees and Putnam Management.

PanAgora, at its expense, furnishes all necessary investment and management facilities, including salaries of personnel, required for it to execute its duties. The sub-advisory agreement provides that PanAgora shall not be subject to any liability to Putnam Management, the fund or any shareholder of the fund for any act or omission in the course of or connected with rendering services to the fund in the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations and duties on the part of PanAgora.

The sub-advisory agreement may be terminated with respect to a fund without penalty by vote of the Trustees or the shareholders of the fund, or by PanAgora or Putnam Management, on not more than 60 days' nor less than 30 days' written notice. The sub-advisory agreement also terminates without payment of any penalty in the event of its assignment. Subject to applicable law, it may be amended by a majority of the Trustees who are not "interested persons" of Putnam Management or the fund. The sub-advisory agreement provides that it will continue in effect only so long as such continuance is approved at least annually by vote of either the Trustees or the shareholders, and, in either case, by a majority of the Trustees who are not

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"interested persons" of Putnam Management or the fund. In each of the foregoing cases, the vote of the shareholders is the affirmative vote of a "majority of the outstanding voting securities" as defined in the 1940 Act.

#### Portfolio Transactions

#### Potential conflicts of interest in managing multiple accounts.
*Investment Manager* 

Like other investment professionals with multiple clients, the fund's Portfolio Manager(s) may face certain potential conflicts of interest in connection with managing both the fund and the other accounts listed under **"PORTFOLIO MANAGER(S)" "Other accounts managed"** at the same time. The paragraphs below describe some of these potential conflicts, which the Investment Manager believes are faced by investment professionals at most major financial firms. As described below, the Investment Manager and the Trustees have adopted compliance policies and procedures that attempt to address certain of these potential conflicts.

The management of accounts with different advisory fee rates and/or fee structures, including accounts that pay advisory fees based on account performance ("performance fee accounts"), may raise potential conflicts of interest by creating an incentive to favor higher-fee accounts. These potential conflicts may include, among others:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The most attractive investments could be allocated to higher-fee accounts or performance fee accounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The trading of higher-fee accounts could be favored as to timing and/or execution price. For example, higher-fee accounts could be permitted to sell securities earlier than other accounts when a prompt sale is desirable or to buy securities at an earlier and more opportune time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The trading of other accounts could be used to benefit higher-fee accounts (front-running).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The investment management team could focus their time and efforts primarily on higher-fee accounts due to a personal stake in compensation.

The Investment Manager attempts to address these potential conflicts of interest relating to higher-fee accounts through various compliance policies that are generally intended to place all accounts, regardless of fee structure, on the same footing for investment management purposes. For example, under the Investment Manager's policies:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Performance fee accounts must be included in all standard trading and allocation procedures with all other accounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All accounts must be allocated to a specific category of account and trade in parallel with allocations of similar accounts based on the procedures generally applicable to all accounts in those groups (e.g., based on relative risk budgets of accounts).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All trading must be effected through Putnam's trading desks and normal queues and procedures must be followed (i.e., no special treatment is permitted for performance fee accounts or higher-fee accounts based on account fee structure).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Front running is strictly prohibited.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Except as provided in Part I of this SAI, the fund's Portfolio Manager(s) may not be guaranteed or specifically allocated any portion of a performance fee.

As part of these policies, the Investment Manager has also implemented trade oversight and review procedures in order to monitor whether particular accounts (including higher-fee accounts or performance fee accounts) are being favored over time.

Potential conflicts of interest may also arise when the Portfolio Manager(s) have personal investments in other accounts that may create an incentive to favor those accounts. As a general matter and subject to limited exceptions, the Investment Manager's investment professionals do not have the opportunity to invest in client accounts, other than Putnam funds. However, in the ordinary course of business, the Investment Manager or related persons may from time to time establish "pilot" or "incubator" accounts for the purpose of testing proposed investment strategies and products before offering them to clients. These pilot accounts may be in the form of registered investment companies, private funds such as partnerships or separate accounts established by the Investment Manager or an affiliate. The Investment Manager or an affiliate supplies the funding for these accounts. Putnam employees, including the fund's Portfolio Manager(s), may also invest in certain pilot accounts. The Investment Manager, and to the extent applicable, the Portfolio Manager(s) will benefit from the favorable investment performance of pilot accounts. Pilot funds and accounts may, and frequently do, invest in the same securities as the client accounts. The Investment Manager's policy is to treat pilot accounts in the same manner as client accounts for purposes of trading allocation – neither favoring nor disfavoring them except as is legally required. For example, pilot accounts are normally

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included in the Investment Manager's daily block trades to the same extent as client accounts (except that pilot accounts do not participate in initial public offerings).

A potential conflict of interest may arise when the fund and other accounts purchase or sell the same securities. On occasions when the Portfolio Manager(s) consider the purchase or sale of a security to be in the best interests of the fund as well as other accounts, the Investment Manager's trading desk may, to the extent permitted by applicable laws and regulations and where practicable, aggregate the securities to be sold or purchased in order to obtain the best execution and lower brokerage commissions, if any. Aggregation of trades may create the potential for unfairness to the fund or another account if one account is favored over another in allocating the securities purchased or sold – for example, by allocating a disproportionate amount of a security that is likely to increase in value to a favored account. The Investment Manager's trade allocation policies generally provide that each day's transactions in securities that are purchased or sold by multiple accounts are, insofar as possible, averaged as to price and allocated between such accounts (including the fund) in a manner which in the Investment Manager's opinion is equitable to each account and in accordance with the amount being purchased or sold by each account. However, accounts advised or sub-advised by FTIML will only place trades at an execution-only commission rate, whereas other Putnam accounts may pay an additional amount for research and other products and services (a "bundled" or "full service" rate). The Investment Manager may aggregate trades in FTIML accounts with other Putnam accounts that pay a bundled rate as long as all participating accounts pay the same execution rate. To the extent that non- FTIML accounts pay a bundled rate, the FTIML and other the Investment Manager accounts would not be paying the same total commission rate. Certain other exceptions exist for specialty, regional or sector accounts. Trade allocations are reviewed on a periodic basis as part of the Investment Manager's trade oversight procedures in an attempt to ensure fairness over time across accounts.

"Cross trades," in which one Putnam account sells a particular security to another account (potentially saving transaction costs for both accounts), may also pose a potential conflict of interest. Cross trades may be seen to involve a potential conflict of interest if, for example, one account is permitted to sell a security to another account at a higher price than an independent third party would pay, or if such trades result in more attractive investments being allocated to higher-fee accounts. The Investment Manager and the fund's Trustees have adopted compliance procedures that provide that any transactions between the fund and another Putnam-advised account are to be made at an independent current market price, as required by law.

Another potential conflict of interest may arise based on the different goals and strategies of the fund and other accounts. For example, another account may have a shorter-term investment horizon or different goals, policies or restrictions than the fund. Depending on goals or other factors, the Portfolio Manager(s) may give advice and make decisions for another account that may differ from advice given, or the timing or nature of decisions made, with respect to the fund. In addition, investment decisions are the product of many factors in addition to basic suitability for the particular account involved. Thus, a particular security may be bought or sold for certain accounts even though it could have been bought or sold for other accounts at the same time. More rarely, a particular security may be bought for one or more accounts managed by the Portfolio Manager(s) when one or more other accounts are selling the security (including short sales). There may be circumstances when purchases or sales of portfolio securities for one or more accounts may have an adverse effect on other accounts. As noted above, the Investment Manager has implemented trade oversight and review procedures to monitor whether any account is systematically favored over time.

Under federal securities laws, a short sale of a security by another client of the Investment Manager or its affiliates (other than another registered investment company) within five business days prior to a public offering of the same securities (the timing of which is generally not known to Putnam in advance) may prohibit the fund from participating in the public offering, which could cause the fund to miss an otherwise favorable investment opportunity or to pay a higher price for the securities in the secondary markets.

The fund's Portfolio Manager(s) may also face other potential conflicts of interest in managing the fund, and the description above is not a complete description of every conflict that could be deemed to exist in managing both the fund and other accounts. For information on restrictions imposed on personal securities transactions of the fund's Portfolio Manager(s), please see "Personal Investments by Employees of the Investment Manager and Franklin Distributors and Officers and Trustees of the Fund."

*PanAgora* 

The portfolio managers' management of other accounts may give rise to potential conflicts of interest in connection with their management of the fund's investments, on the one hand, and the investments of the other accounts, on the other. The other accounts include retirement plans and separately managed accounts ("SMA's"), as well as incubated accounts. The other

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accounts might have similar investment objectives as the fund, or hold, purchase or sell securities that are eligible to be held, purchased or sold by the fund. While the portfolio managers' management of other accounts may give rise to the following potential conflicts of interest, PanAgora does not believe that the conflicts, if any, are material or, to the extent any such conflicts are material, PanAgora believes that it has designed policies and procedures to manage those conflicts in an appropriate way.

A potential conflict of interest may arise as a result of the portfolio managers' day-to-day management of the fund. Because of their positions with the fund, the portfolio managers know the size, timing and possible market impact of the fund's trades. It is theoretically possible that the portfolio managers could use this information to the advantage of other accounts they manage and to the possible detriment of the fund. However, PanAgora has adopted policies and procedures reasonably designed to allocate investment opportunities on a fair and equitable basis over time.

A potential conflict of interest may arise as a result of the portfolio managers' management of the fund, and other accounts, which, in theory, may allow them to allocate investment opportunities in a way that favors other accounts over the fund. This conflict of interest may be exacerbated to the extent that PanAgora or the portfolio managers receive, or expect to receive, greater compensation from their management of the other accounts than the fund. Notwithstanding this theoretical conflict of interest, it is PanAgora's policy to manage each account based on its investment objectives and related restrictions and, as discussed above, PanAgora has adopted policies and procedures reasonably designed to allocate investment opportunities on a fair and equitable basis over time and in a manner consistent with each account's investment objectives and related restrictions. For example, while the portfolio managers may buy for other accounts securities that differ in identity or quantity from securities bought for the fund, such securities might not be suitable for the fund given its investment objective and related restrictions.

For information about other funds and accounts managed by the fund's Portfolio Manager(s), please refer to "Who oversees and manages the fund(s)?" in the prospectus and **"PORTFOLIO MANAGER(S)" "Other accounts managed"** in Part I of the SAI.

#### Brokerage and research services.
Transactions on stock exchanges, commodities markets and futures markets and other agency transactions involve the payment by the fund of negotiated brokerage commissions. Such commissions may vary among different brokers. A particular broker may charge different commissions according to such factors as execution venue and exchange. Although the fund does not typically pay commissions for principal transactions in the over-the-counter markets, such as the markets for most fixed income securities and certain derivatives, an undisclosed amount of profit or "mark-up" is included in the price the fund pays. In underwritten offerings, the price paid by the fund includes a disclosed, fixed commission or discount retained by the underwriter or dealer. **See "Charges and expenses" in Part I of this SAI for information concerning commissions paid by the fund**.

It has for many years been a common practice in the investment advisory business for broker-dealers that execute portfolio transactions for the clients of advisers of investment companies and other institutional investors to provide those advisers with brokerage and research services, as defined in Section 28(e) of the Exchange Act. Consistent with this practice, the Investment Manager receives brokerage and research services from broker-dealers with which the Investment Manager places the fund's portfolio transactions. The products and services that broker-dealers may provide to the Investment Manager's managers and analysts include, among others, trading systems and other brokerage services, economic and political analysis, fundamental and macro investment research, industry and company reviews, statistical information, market data, evaluations of investments, strategies, markets and trading venues, recommendations as to the purchase and sale of investments, performance measurement services and meetings with management of current or prospective portfolio companies or with industry experts. Some of these services are of value to the Investment Manager and its affiliates in advising various of their clients (including the fund), although not all of these services are necessarily useful and of value in managing the fund. Research services provided by broker-dealers are supplemental to the Investment Manager's own research efforts and relieve the Investment Manager of expenses it might otherwise have borne in generating such research. The management fee paid by the fund is not reduced because the Investment Manager and its affiliates receive brokerage and research services even though the Investment Manager might otherwise be required to purchase some of these services for cash. The Investment Manager may also use portfolio transactions to generate "soft dollar" credits to pay for "mixed-use" services (i.e., products or services that may be used both for investment/brokerage- and non-investment/brokerage-related purposes), but in such instances the Investment Manager uses its own resources to pay for that portion of the mixed-use product or service that in its good-faith judgment does not relate to investment or brokerage purposes. The Investment Manager may also allocate trades to generate soft dollar credits for third-party investment research reports and related fundamental research.

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The Investment Manager places all orders for the purchase and sale of portfolio investments for the funds, and buys and sells investments for the funds, through a substantial number of brokers and dealers. In selecting broker-dealers to execute the funds' portfolio transactions, the Investment Manager uses its best efforts to obtain for each fund the most favorable price and execution reasonably available under the circumstances, except to the extent it may be permitted to pay higher brokerage commissions as described below. In seeking the most favorable price and execution and in considering the overall reasonableness of the brokerage commissions paid, the Investment Manager, having in mind the fund's best interests, considers all factors it deems relevant, including, in no particular order of importance, and by way of illustration, the price, size and type of the transaction, the nature of the market for the security or other investment, the amount of the commission, research and brokerage services provided by a broker-dealer, the timing of the transaction taking into account market prices and trends, the reputation, experience and financial stability of the broker-dealer involved, the benefit of any capital committed by a broker-dealer to facilitate the efficient execution of the transaction and the quality of service rendered by the broker-dealer in other transactions.

The Investment Manager may cause the fund to pay a broker-dealer that provides "brokerage and research services" (as defined in the Exchange Act and as described above) to the Investment Manager an amount of disclosed commission for effecting securities transactions on stock exchanges and other transactions for the fund on an agency basis in excess of the commission another broker-dealer would have charged for effecting that transaction. The Investment Manager may also instruct an executing broker to "step out" a portion of the trades placed with a broker to other brokers that provide brokerage and research services to the Investment Manager. The Investment Manager's authority to cause the fund to pay any such greater commissions or to instruct a broker to "step out" a portion of a trade is subject to the requirements of applicable law and such policies as the Trustees may adopt from time to time. It is the position of the staff of the SEC that Section 28(e) of the Exchange Act does not apply to the payment of such greater commissions in "principal" transactions. Accordingly, the Investment Manager will use its best effort to obtain the most favorable price and execution available with respect to such transactions, as described above.

The Management Contract provides that commissions, fees, brokerage or similar payments received by the Investment Manager or an affiliate in connection with the purchase and sale of portfolio investments of the fund, less any direct expenses approved by the Trustees, shall be recaptured by the fund through a reduction of the fee payable by the fund under the Management Contract. The Investment Manager seeks to recapture for the fund soliciting dealer fees on the tender of the fund's portfolio securities in tender or exchange offers. Any such fees which may be recaptured are likely to be minor in amount.

For those funds sub-advised by FTIML and where FTIML places trades on behalf of those funds, the rules of the United Kingdom's Financial Conduct Authority (the "FCA Rules") apply with respect to the receipt of investment research. Under the FCA Rules, FTIML may not obtain research using brokerage commissions paid by funds sub-advised by FTIML. FTIML will use only "hard dollars" (i.e., from its own resources) to acquire external research used by London-based personnel, including fixed income personnel, except with respect to Minor Non-Monetary Benefits.

Minor Non-Monetary Benefits include, among other categories:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>•</u> Research from independent research providers who are not engaged in execution services and are not part of a financial services group that offers execution or brokerage services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>•</u> Research on listed and unlisted small and medium-sized enterprises with a market capitalization below £200 million;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>•</u> Research focusing on fixed income, currency, and commodity investment strategies; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>•</u> Written research that is openly available to other firms or to the general public.

FTIML may use soft dollar commissions generated by trades of the Investment Manager and other Putnam affiliates other than FTIML to obtain research received by employees of FTIML that qualify as a Minor Non-Monetary Benefit.

#### Principal Underwriter
Franklin Distributors, located at One Franklin Parkway, San Mateo, CA 94403-1906, is the principal underwriter of shares of the fund and the other continuously offered Putnam funds. Franklin Distributors is a registered broker-dealer, a member of the Financial Industry Regulatory Authority, and an indirect, wholly-owned subsidiary of Franklin Templeton. See "Charges and expenses" in Part I of this SAI for information on payments received by Franklin Distributors or Foreside Fund Services, LLC, the principal underwriter for the certain of the funds prior to August 2, 2024.

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#### Personal Investments by Employees of Putnam Management, Franklin Advisers, FTIML and Franklin Distributors and Officers and Trustees of the Fund
Employees of Putnam Management, Franklin Advisers, FTIML and Franklin Distributors and officers and Trustees of the fund are subject to significant restrictions on engaging in personal securities transactions. These restrictions are set forth in the Codes of Ethics adopted by Putnam Management, Franklin Advisers, FTIML and Franklin Distributors and by the fund (the "Code of Ethics"). The Code of Ethics, in accordance with Rule 17j-1 under the 1940 Act, contains provisions and requirements designed to identify and address certain conflicts of interest between personal investment activities and the interests of the fund.

The Code of Ethics does not prohibit personnel from investing in securities that may be purchased or held by the fund. However, the Code of Ethics, consistent with standards recommended by the Investment Company Institute's Advisory Group on Personal Investing and requirements established by Rule 17j-1 and rules adopted under the Investment Advisers Act of 1940, among other things, prohibits personal securities investments without pre-clearance, imposes time periods during which personal transactions may not be made in certain securities by employees with access to investment information, and requires the timely submission of broker confirmations and quarterly reporting of personal securities transactions. Additional restrictions apply to portfolio managers, traders, research analysts and others involved in the investment advisory process.

The Code of Ethics does not prohibit unaffiliated officers and Trustees from investing in securities that may be held by the fund; however, the Putnam Funds Code of Ethics regulates the personal securities transactions of unaffiliated Trustees of the fund, including limiting the time periods during which they may personally buy and sell certain securities and requiring them to submit reports of personal securities transactions under certain circumstances.

The fund's Trustees, in compliance with Rule 17j-1, approved the Code of Ethics and are required to approve any material changes to the Code of Ethics. The Trustees also provide continued oversight of personal investment policies and annually evaluate the implementation and effectiveness of the Code of Ethics.

#### Transfer Agent
The Bank of New York Mellon (BNY Mellon), 240 Greenwich Street, New York, New York 10286, acts as the fund's transfer agent and dividend-paying agent. The Investment Manager, and not the fund, bears the cost of these services under the terms of its management contract with the fund.

#### Custodian
BNY Mellon acts as custodian of the fund's securities and other assets. BNY Mellon is located at 240 Greenwich Street, New York, New York 10286.

#### Auditor
PricewaterhouseCoopers LLP, 101 Seaport Boulevard, Boston, Massachusetts 02210, is the fund's independent registered public accounting firm providing audit services, tax return review and other tax consulting services and assistance and consultation in connection with the review of various Securities and Exchange Commission filings.

#### Counsel to the Fund
Ropes & Gray LLP serves as counsel to the fund, and is located at Prudential Tower, 800 Boylston Street, Boston, Massachusetts 02199.

#### DETERMINATION OF NET ASSET VALUE
The fund determines the net asset value per share once each day the NYSE is open. Currently, the NYSE is closed Saturdays, Sundays and the following holidays: New Year's Day, Rev. Dr. Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Juneteenth, the Fourth of July, Labor Day, Thanksgiving Day and Christmas Day. The fund determines net asset value as of the close of regular trading on the NYSE, normally 4:00 p.m. Eastern Time. The net asset value per share equals the total value of its assets, less its liabilities, divided by the number of its outstanding shares.

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Securities and other assets ("Securities") for which market quotations are readily available, as defined by Rule 2a-5 under the 1940 Act, are valued at prices which, in the opinion of the Investment Manager, most nearly represent the market values of such Securities. Currently, prices for these Securities are determined using the last reported sale price (or official closing price for Securities listed on certain markets) or, if no sales are reported (as in the case of some Securities traded over-the-counter), the mean between the last reported bid and ask prices, the "mid price" (prior to July 22, 2024, the last reported bid price was used). All other Securities are valued by the Investment Manager or other parties at their fair value following procedures approved by the Trustees.

Reliable market quotations are not considered to be readily available for, among other Securities, long-term corporate bonds and notes, certain preferred stocks, tax-exempt securities, and certain foreign securities. These investments are valued at fair value, generally on the basis of valuations furnished by approved pricing services, which determine valuations for normal, institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities that are generally recognized by institutional traders. Other Securities, such as various types of options, are valued at fair value on the basis of valuations furnished by broker-dealers or other market intermediaries.

The Investment Manager values all other Securities at fair value using its internal resources. The valuation procedures applied in any specific instance are likely to vary from case to case. However, consideration is generally given to the financial position of the issuer and other fundamental analytical data relating to the investment and to the nature of the restrictions on disposition of the Securities (including any registration expenses that might be borne by the fund in connection with such disposition). In addition, specific factors are also generally considered, such as the cost of the investment, the market value of any unrestricted Securities of the same class, the size of the holding, the prices of any recent transactions or offers with respect to such Securities and any available analysts' reports regarding the issuer. In the case of Securities that are restricted as to resale, the Investment Manager determines fair value based on the inherent worth of the Security without regard to the restrictive feature, adjusted for any diminution in value resulting from the restrictive feature.

Generally, trading in certain Securities (such as foreign securities) is substantially completed each day at various times before the close of the NYSE. The closing prices for these Securities in markets or on exchanges outside the U.S. that close before the close of the NYSE may not fully reflect events that occur after such close but before the close of the NYSE. As a result, the fund has adopted fair value pricing procedures, which, among other things, require the fund to fair value foreign equity securities if there has been a movement in the U.S. market that exceeds a specified threshold. Although the threshold may be revised from time to time and the number of days on which fair value prices will be used will vary, it is possible that fair value prices will be used by the fund to a significant extent. In addition, Securities held by some of the funds may be traded in foreign markets that are open for business on days that the fund is not, and the trading of such Securities on those days may have an impact on the value of a shareholder's investment at a time when the shareholder cannot buy and sell shares of the fund.

Currency exchange rates used in valuing Securities are normally determined as of 4:00 p.m. Eastern Time.

Occasionally, events affecting such exchange rates may occur between the time of the determination of exchange rates and the close of the NYSE, which, in the absence of fair valuation, would not be reflected in the computation of the fund's net asset value. If events materially affecting the currency exchange rates occur during such period, then the exchange rates used in valuing affected Securities will be valued by the Investment Manager at their fair value following procedures approved by the Trustees.

In addition, because of the amount of time required to collect and process trading information as to large numbers of securities issues, the values of certain Securities (such as convertible bonds, U.S. government securities and tax-exempt securities) are determined based on market quotations collected before the close of the NYSE. Occasionally, events affecting the value of such Securities may occur between the time of the determination of value and the close of the NYSE, which, in the absence of fair value prices, would not be reflected in the computation of the fund's net asset value. If events materially affecting the value of such Securities occur during such period, then these Securities will be valued by the Investment Manager at their fair value following procedures approved by the Trustees. It is expected that any such instance would be very rare.

The fair value of Securities is generally determined as the amount that the fund could reasonably expect to realize from an orderly disposition of such Securities over a reasonable period of time. By its nature, a fair value price is a good faith estimate of the value of a Security at a given point in time and does not reflect an actual market price.

The fund may also value its Securities at fair value under other circumstances pursuant to procedures approved by the Trustees.

#### Money Market Funds

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"Retail money market funds" and "government money market funds" each as defined by Rule 2a-7 under the 1940 Act generally value their portfolio securities at amortized cost according to Rule 2a-7 under the 1940 Act.

Since the net income of a money market fund is declared as a dividend each time it is determined, the net asset value per share of a retail money market fund and government money market fund typically remains at $1.00 per share immediately after such determination and dividend declaration. Any increase in the value of a shareholder's investment in a money market fund representing the reinvestment of dividend income is reflected by an increase in the number of shares of that fund in the shareholder's account on the last business day of each month. It is expected that a money market fund's net income will normally be positive each time it is determined. However, if because of realized losses on sales of portfolio investments, a sudden rise in interest rates, or for any other reason the net income of a fund determined at any time is a negative amount, a money market fund may offset such amount allocable to each then shareholder's account from dividends accrued during the month with respect to such account. If, at the time of payment of a dividend, such negative amount exceeds a shareholder's accrued dividends, a money market fund may reduce the number of outstanding shares by treating the shareholder as having contributed to the capital of the fund that number of full and fractional shares which represent the amount of the excess. Each shareholder is deemed to have agreed to such contribution in these circumstances by his or her investment in a money market fund.

#### SHAREHOLDER LIABILITY
The Trust is a statutory trust organized under Delaware law. Delaware law provides that, except to the extent otherwise provided in the Amended and Restated Agreement and Declaration of Trust, shareholders shall be entitled to the same limitations of personal liability extended to stockholders of private corporations for profit organized under the general corporation law of Delaware. The courts of some states, however, may decline to apply Delaware law on this point. The Amended and Restated Agreement and Declaration of Trust contains an express disclaimer of shareholder liability for the debts, liabilities, obligations, and expenses incurred by, contracted for, or otherwise existing with respect to, the Trust or the funds.

The Amended and Restated Agreement and Declaration of Trust provides that the Trust shall not have any claim against shareholders except for the payment of the purchase price of shares and requires that each agreement, obligation, or instrument entered into or executed by the Trust or the Trustees relating to the Trust or to a fund shall include a provision limiting the obligations created thereby to the Trust or to one or more funds and its or their assets. The Amended and Restated Agreement and Declaration of Trust further provides that shareholders of a fund shall not have a claim on or right to any assets belonging to any other fund.

#### DISCLOSURE OF PORTFOLIO INFORMATION
The Trustees of the Putnam funds have adopted policies with respect to the disclosure of the fund's portfolio holdings by the fund, the Investment Manager, or their affiliates. These policies provide that information about the fund's portfolio generally may not be released to any party prior to (i) the day after the posting of such information on franklintempleton.com, (ii) the filing of the information with the SEC in a required filing, or (iii) the dissemination of such information to all shareholders simultaneously. Certain limited exceptions pursuant to the fund's policies are described below. In addition, these policies do not apply to the sharing of fund portfolio holdings information with investment personnel involved in the management of other funds that invest in such fund and that are managed by the Investment Manager or its affiliates. The Trustees will periodically receive reports from the fund's Chief Compliance Officer regarding the operation of these policies and procedures, including any arrangements to make non-public disclosures of the fund's portfolio information to third parties. The Investment Manager and its affiliates are not permitted to receive compensation or other consideration in connection with disclosing information about the fund's portfolio holdings to third parties.

#### Public Disclosures
On each Business Day, before commencement of trading in shares on the listing exchange, each fund will disclose its complete portfolio holdings on its website. The fund will disclose its top 10 holdings and related portfolio information monthly beginning on or after 5 business days after the end of each month on franklintempleton.com. The find will also disclose on its website its complete holdings as of the end of the prior month on a monthly basis beginning on or before the 15th calendar day after the end of each month.

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The fund will also file its portfolio holdings with the SEC twice each year on Form N-CSR (with respect to each annual period and semi-annual period). In addition, the fund will file reports of portfolio holdings on Form N-PORT 60 days after each fiscal quarter (for the respective fiscal quarter), with the schedule of portfolio holdings filed on Form N-PORT for the third month of the first and third fiscal quarter made publicly available. Shareholders may obtain the Form N-CSR filings and the publicly available portions of Form N-PORT filings on the SEC's website at http://www.sec.gov. Form N-CSR filings are available upon filing and information reported on Form N-PORT filings for the third month of a fiscal quarter is available 60 days after the end of the fiscal quarter. You may call the SEC at 1-800-SEC-0330 for information about the SEC's website.

The Investment Manager or its affiliates may include fund portfolio information that has already been made public through a Web posting or SEC filing in marketing literature and other communications to shareholders, advisors or other parties, provided that, in the case of information made public through the Web, the information is disclosed no earlier than the day after the date of posting to the website.

#### Other Disclosures
In order to address potential conflicts between the interest of fund shareholders, on the one hand, and those of the Investment Manager, Franklin Distributors or any affiliated person of those entities or of the fund, on the other hand, the fund's policies require that non-public disclosures of information regarding the fund's portfolio may be made only if there is a legitimate business purpose consistent with fiduciary duties to all shareholders of the fund. In addition, the party receiving the non-public information must sign a non-disclosure agreement unless otherwise approved by the Chief Compliance Officer of the fund. Arrangements to make non-public disclosures of the fund's portfolio information must be approved by the Chief Compliance Officer of the fund. The Chief Compliance Officer will report on an ongoing basis to a committee of the fund's Board of Trustees consisting only of Trustees who are not "interested persons" of the fund or the Investment Manager regarding any such arrangement that the fund may enter into with third parties other than service providers to the fund.

Daily portfolio composition files ("PCFs") that identify a basket of specified securities that may overlap with the actual or expected portfolio holdings of a fund will be provided as frequently as daily to each fund's service providers to facilitate the provision of services to each fund and to certain other entities in connection with the dissemination of information necessary for transactions in Creation Units. Each business day prior to the opening of the listing exchange, a PCF containing a list of the names and the required number of shares of each Deposit Security for each fund will be provided for dissemination through the facilities of the NSCC; through other fee-based services to NSCC members; subscribers to the fee-based services, including Authorized Participants; and to entities that publish and/or analyze such information in connection with the process of purchasing or redeeming Creation Units or trading fund shares in the secondary market. In addition to making PCFs available to the NSCC, each fund will disclose the PCF or portions thereof as frequently as daily on franklintempleton.com.

The fund may also periodically provide non-public information about its portfolio holdings to rating and ranking organizations and other providers of industry data, such as Lipper Inc., Morningstar Inc., Bloomberg and Thomson Reuters, in connection with those firms' research on and classification of the fund and in order to gather information about how the fund's attributes (such as volatility, turnover, and expenses) compare with those of peer funds. The fund may also periodically provide non-public information about its portfolio holdings to consultants that provide portfolio analysis services or other investment research or trading analytics. Such recipients of portfolio holdings include Barclays, FactSet, ITG, Trade Informatics, ConsenSys, ENSO Financial Analytics, Bloomberg and Credit Suisse. Any such rating, ranking, or consulting or other firm would be required to keep the fund's portfolio information confidential and would be prohibited from trading based on the information or otherwise using the information except as necessary in providing services to the fund. Such firms may receive portfolio holdings information only from certain funds and such information may be provided in greater or lesser detail depending on the nature of the services provided by the relevant firm.

In addition, the Investment Manager offers model separately managed account portfolios to sponsoring broker-dealers ("Program Sponsors") that in turn offer those portfolios to their customers. The Investment Manager also provides investment advisory services to retail separately managed account clients through managed account programs sponsored by broker-dealers and other financial intermediaries (together, "SMAs"). The model SMA portfolios may follow investment programs that are similar or identical in material respects to those of specific Putnam funds or other client accounts and, as a result, there may be substantial overlap between the securities holdings and transactions of an model SMA portfolio and those of any similarly managed funds or accounts. If such model portfolios are substantially similar to those of a U.S. registered fund, such model portfolios may be provided to Program Sponsors so long as: (1) the recipient Program Sponsors has executed a non-disclosure agreement or other agreement containing or incorporating confidentiality provisions that restrict the use and dissemination of confidential

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portfolio holdings information received by the Program Sponsor as described in the following sentence, or other provisions that impose similar restrictions on such use and dissemination and*,* (2) the model SMA portfolio has been deemed sufficiently liquid by the Investment Manager's liquidity committee or the Investment Manager, as determined in their reasonable judgment. Such agreement must provide that the Program Sponsor agrees that: (1) it is subject to a duty of confidentiality; (2) it will use confidential model portfolio information only to the extent necessary to perform its obligations under the agreement; and (3) it will not disclose confidential model portfolio information except to personnel or parties who have a need to know such confidential information in connection with, or in order to fulfill the purposes contemplated by, the agreement.

#### INFORMATION SECURITY RISKS
*Cyber security risk.* With the increased use of interconnected technologies such as the Internet and the dependence on computer systems to perform necessary business functions, investment companies such as the fund and its service providers may be prone to operational, information security and related risks resulting from third-party cyber-attacks and/or other technological malfunctions. Cyber-attacks may include stealing or corrupting data maintained online or digitally, preventing legitimate users from accessing information or services on a website, releasing confidential information without authorization, and causing operational disruption. Successful cyber-attacks against, or security or technology breakdowns of, the fund or its adviser, custodian, transfer agent, or other affiliated or third-party service providers may adversely affect the fund and its shareholders. For example, cyber-attacks may interfere with the processing of shareholder transactions, impact the fund's ability to calculate its net asset value, cause the release of private shareholder information or confidential fund information, impede trading, cause reputational damage, and subject the fund or others to regulatory fines, penalties or financial losses, reimbursement or other compensation costs, and additional compliance costs. Similar types of cyber security risks also are present for issuers of securities in which the fund invests, which could result in material adverse consequences for such issuers, and may cause the fund's investment in such securities to lose value. The fund and the Investment Manager or sub-adviser (as applicable) may have limited ability to prevent or mitigate cyber-attacks or security or technology breakdowns affecting the fund's third-party service providers. While the Investment Manager and sub-adviser (as applicable) have established business continuity plans and systems designed to prevent or reduce the impact of cyber-attacks, such plans and systems are subject to inherent limitations.

#### PROXY VOTING GUIDELINES AND PROCEDURES
The Board of Trustees have delegated proxy voting authority for the securities held in the funds' portfolios to Putnam Management and have approved Putnam Management's current proxy voting guidelines and procedures. Putnam Management retained an independent proxy voting service to assist in vote analysis, implementation, recordkeeping and reporting services. The proxy voting guidelines summarize Putnam Management's positions on various issues of concern to investors and provide direction to the proxy voting service as to how fund portfolio securities should be voted on proposals dealing with particular issues. The proxy voting procedures explain the role of Putnam Management personnel and the proxy voting service in the proxy voting process, describe the procedures for referring matters involving investment considerations to the investment personnel of Putnam Management, and describe the procedures for handling potential conflicts of interest. Putnam Management's proxy voting guidelines and procedures are included in this SAI as Appendix A. The Trustees will review the funds' proxy voting from time to time and will review annually Putnam Management's proxy voting guidelines and procedures. Information regarding how the funds' proxies relating to portfolio securities were voted during the 12-month period ended June 30, 2024 is available on www.franklintempleton.com, and on the SEC's website at 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 Putnam Management's proxy voting guidelines and procedures by calling Putnam's Shareholder Services at 1-800-225-1581.

#### SECURITIES RATINGS
The ratings of securities in which the fund may invest will be measured at the time of purchase and, to the extent a security is assigned a different rating by one or more of the various rating agencies, the Investment Manager may use the highest rating assigned by any agency. The Investment Manager will not necessarily sell an investment if its rating is reduced. Below are descriptions of ratings, as provided by the rating agencies, which represent opinions as to the quality of various debt instruments.

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#### Moody's Investors Service, Inc.
**Global Long-Term Rating Scale** (original maturity of 1 year or more)

**Aaa** – Obligations rated Aaa are judged to be of the highest quality, subject to the lowest level of credit risk.

**Aa** – Obligations rated Aa are judged to be of high quality and are subject to very low credit risk.

**A** – Obligations rated A are judged to be upper-medium grade and are subject to low credit risk.

**Baa** – Obligations rated Baa are judged to be medium-grade and subject to moderate credit risk and as such may possess certain speculative characteristics.

**Ba** – Obligations rated Ba are judged to be speculative and are subject to substantial credit risk.

**B** – Obligations rated B are considered speculative and are subject to high credit risk.

**Caa** – Obligations rated Caa are judged to be speculative of poor standing and are subject to very high credit risk.

**Ca** – Obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest.

**C** – Obligations rated C are the lowest rated and are typically in default, with little prospect for recovery of principal or interest.

Note: Moody's appends numerical modifiers 1, 2, and 3 to each generic rating classification from Aa through Caa. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category. Additionally, a "(hyb)" indicator is appended to all ratings of hybrid securities issued by banks, insurers, finance companies, and securities firms.

By their terms, hybrid securities allow for the omission of scheduled dividends, interest, or principal payments, which can potentially result in impairment if such an omission occurs. Hybrid securities may also be subject to contractually allowable write-downs of principal that could result in impairment. Together with the hybrid indicator, the long-term obligation rating assigned to a hybrid security is an expression of the relative credit risk associated with that security.

**Global Short-Term Rating Scale** (original maturity of 13 months or less)

**P-1** – Issuers (or supporting institutions) rated Prime-1 have a superior ability to repay short-term debt obligations.

**P-2** – Issuers (or supporting institutions) rated Prime-2 have a strong ability to repay short-term debt obligations.

**P-3** – Issuers (or supporting institutions) rated Prime-3 have an acceptable ability to repay short-term obligations.

**NP** – Issuers (or supporting institutions) rated Not Prime do not fall within any of the Prime rating categories.

US Municipal Short-Term Obligation Ratings

**MIG 1** – This designation denotes superior credit quality. Excellent protection is afforded by established cash flows, highly reliable liquidity support, or demonstrated broad-based access to the market for refinancing.

**MIG 2** – This designation denotes strong credit quality. Margins of protection are ample, although not as large as in the preceding group.

**MIG 3** – This designation denotes acceptable credit quality. Liquidity and cash-flow protection may be narrow, and market access for refinancing is likely to be less well-established.

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**SG** – This designation denotes speculative grade credit quality. Debt instruments in this category may lack sufficient margins of protection.

#### US Municipal Demand Obligation Ratings
**VMIG 1** – This designation denotes superior credit quality. Excellent protection is afforded by the superior short-term credit strength of the liquidity provider and structural and legal protections that ensure the timely payment of purchase price upon demand.

**VMIG 2** – This designation denotes strong credit quality. Good protection is afforded by the strong short-term credit strength of the liquidity provider and structural and legal protections that ensure the timely payment of purchase price upon demand.

**VMIG 3** – This designation denotes acceptable credit quality. Adequate protection is afforded by the satisfactory short-term credit strength of the liquidity provider and structural and legal protections that ensure the timely payment of purchase price upon demand.

**SG** – This designation denotes speculative-grade credit quality. Demand features rated in this category may be supported by a liquidity provider that does not have an investment grade short-term rating or may lack the structural and/or legal protections necessary to ensure the timely payment of purchase price upon demand.

#### Standard & Poor's
**Long-Term Issue Credit Ratings** (original maturity of one year or more)

**AAA** – An obligation rated 'AAA' has the highest rating assigned by Standard & Poor's. The obligor's capacity to meet its financial commitment on the obligation is extremely strong.

**AA** – An obligation rated 'AA' differs from the highest-rated obligations only to a small degree. The obligor's capacity to meet its financial commitment on the obligation is very strong.

**A** – An obligation rated 'A' is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories. However, the obligor's capacity to meet its financial commitment on the obligation is still strong.

**BBB** – An obligation rated 'BBB' exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.

**BB; B; CCC; CC** and **C** – Obligations rated 'BB', 'B', 'CCC', 'CC', and 'C' are regarded as having significant speculative characteristics. 'BB' indicates the lowest degree of speculation and 'C' the highest. While such obligations will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions.

**BB** – An obligation rated 'BB' is less vulnerable to nonpayment than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation.

**B** – An obligation rated 'B' is more vulnerable to nonpayment than obligations rated 'BB', but the obligor currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial, or economic conditions will likely impair the obligor's capacity or willingness to meet its financial commitment on the obligation.

**CCC** – An obligation rated 'CCC' is currently vulnerable to nonpayment, and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation.

**CC** – An obligation rated 'CC' is currently highly vulnerable to nonpayment. The 'CC' rating is used when a default has not yet occurred, but Standard & Poor's expects default to be a virtual certainty, regardless of the anticipated time to default.

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**C** – An obligation rated 'C' is currently highly vulnerable to nonpayment, and the obligation is expected to have lower relative seniority or lower ultimate recovery compared to obligations that are rated higher.

**D** – An obligation rated 'D' is in default or in breach of an imputed promise. For non-hybrid capital instruments, the 'D' rating category is used when payments on an obligation are not made on the date due, unless Standard & Poor's believes that such payments will be made within five business days in the absence of a stated grace period or within the earlier of the stated grace period or 30 calendar days. The 'D' rating also will be used upon the filing of a bankruptcy petition or the taking of similar action and where default on an obligation is a virtual certainty, for example due to automatic stay provisions. An obligation's rating is lowered to 'D' if it is subject to a distressed exchange offer.

**NR** – This indicates that no rating has been requested, or that there is insufficient information on which to base a rating, or that Standard & Poor's does not rate a particular obligation as a matter of policy.

Note: The ratings from 'AA' to 'CCC' may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories.

**Short-Term Issue Credit Ratings** (original maturity of 365 days or less)

**A-1** – A short-term obligation rated'A-1' is rated in the highest category by Standard & Poor's. The obligor's capacity to meet its financial commitment on the obligation is strong. Within this category, certain obligations are designated with a plus sign (+). This indicates that the obligor's capacity to meet its financial commitment on these obligations is extremely strong.

**A-2** – A short-term obligation rated 'A-2' is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rating categories. However, the obligor's capacity to meet its financial commitment on the obligation is satisfactory.

**A-3** – A short-term obligation rated 'A-3' exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.

**B** – A short-term obligation rated 'B' is regarded as vulnerable and has significant speculative characteristics. The obligor currently has the capacity to meet its financial commitments; however, it faces major ongoing uncertainties which could lead to the obligor's inadequate capacity to meet its financial commitments.

**C** – A short-term obligation rated 'C' is currently vulnerable to nonpayment and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation.

**D** – A short-term obligation rated 'D' is in default or in breach of an imputed promise. For non-hybrid capital instruments, the 'D' rating category is used when payments on an obligation are not made on the due date, unless Standard & Poor's believes that such payments will be made within any stated grace period. However, any stated grace period longer than five business days will be treated as five business days. The 'D' rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action and where default on an obligation is a virtual certainty, for example due to automatic stay provisions. An obligation's rating is lowered to 'D' if it is subject to a distressed exchange offer.

**Municipal Short-Term Note Ratings** (original maturity of 3 years or less)

**SP-1** – Strong capacity to pay principal and interest. An issue determined to possess a very strong capacity to pay debt service is given a plus (+) designation.

**SP-2** – Satisfactory capacity to pay principal and interest, with some vulnerability to adverse financial and economic changes over the term of the notes.

**SP-3** – Speculative capacity to pay principal and interest.

#### Fitch Ratings

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#### Long-Term Rating Scales
**AAA** – Highest credit quality. 'AAA' ratings denote the lowest expectation of default risk. They are assigned only in cases of exceptionally strong capacity for payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events.

**AA** – Very high credit quality. 'AA' ratings denote expectations of very low default risk. They indicate very strong capacity for payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events.

**A** – High credit quality. 'A' ratings denote expectations of low default risk. The capacity for payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to adverse business or economic conditions than is the case for higher ratings.

**BBB** – Good credit quality. 'BBB' ratings indicate that expectations of default risk are currently low. The capacity for payment of financial commitments is considered adequate but adverse business or economic conditions are more likely to impair this capacity.

**BB** – Speculative. 'BB' ratings indicate an elevated vulnerability to default risk, particularly in the event of adverse changes in business or economic conditions over time; however, business or financial flexibility exists which supports the servicing of financial commitments.

**B** – Highly speculative. 'B' ratings indicate that material default risk is present, but a limited margin of safety remains. Financial commitments are currently being met; however, capacity for continued payment is vulnerable to deterioration in the business and economic environment.

**CCC** – Substantial credit risk. Default is a real possibility.

**CC** – Very high levels of credit risk. Default of some kind appears probable.

**C** – Exceptionally high levels of credit risk. Default is imminent or inevitable, or the issuer is in standstill. Conditions that are indicative of a 'C' category rating for an issuer include:

a. the issuer has entered into a grace or cure period following non-payment of a material financial obligation;

b. the issuer has entered into a temporary negotiated waiver or standstill agreement following a payment default on a material financial obligation; or

c. Fitch Ratings otherwise believes a condition of 'RD' or 'D' to be imminent or inevitable, including through the formal announcement of a distressed debt exchange.

**RD** – Restricted default. 'RD' ratings indicate an issuer that in Fitch Ratings' opinion has experienced an uncured payment default on a bond, loan or other material financial obligation but which has not entered into bankruptcy filings, administration, receivership, liquidation or other formal winding-up procedure, and which has not otherwise ceased operating. This would include:

a. the selective payment default on a specific class or currency of debt;

b. the uncured expiry of any applicable grace period, cure period or default forbearance period following a payment default on a bank loan, capital markets security or other material financial obligation;

c. the extension of multiple waivers or forbearance periods upon a payment default on one or more material financial obligations, either in series or in parallel; or

d. execution of a distressed debt exchange on one or more material financial obligations.

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**D** – Default. 'D' ratings indicate an issuer that in Fitch Ratings' opinion has entered into bankruptcy filings, administration, receivership, liquidation or other formal winding-up procedure, or which has otherwise ceased business.

Default ratings are not assigned prospectively to entities or their obligations; within this context, non-payment on an instrument that contains a deferral feature or grace period will generally not be considered a default until after the expiration of the deferral or grace period, unless a default is otherwise driven by bankruptcy or other similar circumstance, or by a distressed debt exchange.

"Imminent" default typically refers to the occasion where a payment default has been intimated by the issuer, and is all but inevitable. This may, for example, be where an issuer has missed a scheduled payment, but (as is typical) has a grace period during which it may cure the payment default. Another alternative would be where an issuer has formally announced a distressed debt exchange, but the date of the exchange still lies several days or weeks in the immediate future.

In all cases, the assignment of a default rating reflects the agency's opinion as to the most appropriate rating category consistent with the rest of its universe of ratings, and may differ from the definition of default under the terms of an issuer's financial obligations or local commercial practice.

Note: The modifiers "+" or "-" may be appended to a rating to denote relative status within major rating categories. Such suffixes are not added to the 'AAA' Long-Term Issuer Default Rating (IDR) category, or to Long-Term IDR categories below 'B'.

#### Short-Term Ratings
**F1** – Highest short-term credit quality. Indicates the strongest intrinsic capacity for timely payment of financial commitments; may have an added "+" to denote any exceptionally strong credit feature.

**F2** – Good short-term credit quality. Good intrinsic capacity for timely payment of financial commitments.

**F3** – Fair short-term credit quality. The intrinsic capacity for timely payment of financial commitments is adequate.

**B** – Speculative short-term credit quality. Minimal capacity for timely payment of financial commitments, plus heightened vulnerability to near term adverse changes in financial and economic conditions.

**C** – High short-term default risk. Default is a real possibility.

**RD** – Restricted default. Indicates an entity that has defaulted on one or more of its financial commitments, although it continues to meet other financial obligations, typically applicable to entity ratings only.

**D** – Default. Indicates a broad-based default event for an entity, or the default of a short-term obligation.

#### Appendix A

### Putnam Investments
<u>Proxy Voting Procedures</u> 

*Introduction and Summary* 

Many of Putnam's investment management clients have delegated to Putnam the authority to vote proxies for shares in the client accounts Putnam manages. Putnam believes that the voting of proxies can be an important tool for institutional investors to promote best practices in corporate governance and votes all proxies in the best interests of its clients as investors. In Putnam's

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view, strong corporate governance policies, most notably oversight by an independent board of qualified directors, best serve investors' interests. Putnam will vote proxies and maintain records of voting of shares for which Putnam has proxy voting authority in accordance with its fiduciary obligations and applicable law.

Putnam's voting policies are rooted in our views that (1) strong, independent corporate governance is important to long-term company financial performance, and (2) long-term investors' active engagement with company management, including through the proxy voting process, strengthens issuer accountability and overall market discipline, potentially reducing risk and improving returns over time. Our voting program is offered as a part of our investment management services, at no incremental fee to Putnam, and, while there can be no guarantees, it is intended to offer potential investment benefits over a long-term horizon. Our voting policies are designed with investment considerations in mind, not as a means to pursue particular political, social, or other goals. As a result, we may not support certain proposals whose costs to the issuer (including implementation costs, practicability, and other factors), in Putnam's view, outweigh their investment merits.

This memorandum sets forth Putnam's policies for voting proxies. It covers all accounts for which Putnam has proxy voting authority. These accounts include the Putnam Mutual Funds<sup>1</sup> and Putnam Exchange-Traded Funds, US and international institutional accounts and funds managed or sub-advised by The Putnam Advisory Company, LLC and Putnam Fiduciary Trust Company, LLC. In addition, the policies include US mutual funds and other accounts sub-advised by Putnam Investment Management, LLC.<sup>2</sup>

*Proxy Committee* 

Putnam has a Proxy Committee composed of senior professionals, including from the Putnam Equity investment team and the Putnam Equity Sustainability Strategy group. The Chief Investment Officer of Putnam Equity appoints the members of the Proxy Committee. The Proxy Committee is responsible for setting general policy as to proxies. Specifically, the Committee:

1. Reviews these procedures and the Proxy Voting Guidelines annually and approves any amendments considered to be advisable.

2. Considers special proxy issues as they may from time to time arise.

*3.* Must approve all vote overrides recommended by investment professionals.

*Proxy Voting Administration* 

The Putnam Sustainability Strategy group administers Putnam's proxy voting through a Proxy Voting Team. The Proxy Voting Team has the following duties:

1. Annually prepares the Proxy Voting Guidelines and distributes them to the Proxy Committee for review.

2. Coordinates the Proxy Committee's review of any new or unusual proxy issues and serves as Secretary thereto.

3. Manages the process of referring issues to portfolio managers for voting instructions.

4. Oversees the work of any third-party vendor hired to process proxy votes (as of the date of these procedures Putnam has engaged Institutional Shareholder Services (ISS) to process proxy votes) and the process of setting up the voting process with ISS and custodial banks for new clients.

<sup>1</sup> Effective January 27, 2023, the Board of Trustees of the Putnam Mutual Funds delegated proxy voting authority to Putnam Investment Management, LLC, the investment manager to the Putnam Mutual Funds.

<sup>2</sup> The Putnam Proxy Voting Procedures and Guidelines will apply also to certain funds and institutional and other accounts managed by Franklin Advisers, Inc. ("FAV") but formerly managed or sub-advised by one of the Putnam adviser entities identified above, pursuant to sub-advisory agreements in effect from time to time between FAV and the relevant Putnam entity(ies).

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5. Coordinates responses to investment professionals' questions on proxy issues and proxy policies, including forwarding specialized proxy research from ISS and other vendors and forwards information to investment professionals prepared by other areas at Putnam.

6. Implements the exception process with respect to referred items on securities held solely in accounts managed by the Global Asset Allocation ("GAA") team within Franklin Templeton Investment Solutions described in more detail in the Proxy Referral section below.

7. Maintains required records of proxy votes on behalf of the appropriate Putnam client accounts.

8. Prepares and distributes reports required by Putnam clients.

*Proxy Voting Guidelines* 

Putnam maintains written voting guidelines ("Guidelines") setting forth voting positions determined by the Proxy Committee on those issues believed most likely to arise day to day. The Guidelines may call for votes to be cast normally in favor of or opposed to a matter or may deem the matter an item to be referred to investment professionals on a case-by-case basis. A copy of the Guidelines is attached to this memorandum as Exhibit A.

In light of our views on the importance of issuer governance and investor engagement, which we believe are applicable across our various strategies and clients, regardless of a specific portfolio's investment objective, Putnam will vote all proxies in accordance with the Guidelines, subject to two exceptions as follows:

1. If the portfolio managers of client accounts holding the stock of a company with a proxy vote believe that following the Guidelines in any specific case would not be in the clients' best interests, they may request the Proxy Voting Team not to follow the guidelines in such case. The request must be in writing and include an explanation of the rationale for doing so. The Proxy Voting Team will review any such request with the Proxy Committee (or, in cases with limited time, with the Chair of the Proxy Committee acting on the Proxy Committee's behalf) prior to implementing the request.

2. Putnam may accept instructions to vote proxies under client specific guidelines subject to review and acceptance by the Investment Division and the Legal and Compliance Department.

*Other* 

1. Putnam may elect not to vote when the security is no longer held.

2. Putnam will **abstain** on items that require case-by-case review when a vote recommendation from the appropriate investment professional(s) cannot be obtained due to restrictive voting deadlines or other prohibitive operational or administrative requirements.

3. Where securities held in Putnam client accounts, including the Putnam mutual funds, have been loaned to third parties in connection with a securities lending program administered by Putnam (through securities lending agents overseen by Putnam), Putnam has instructed lending agents to recall U.S. securities on loan to vote proxies, in accordance with Putnam's securities lending procedures. Due to differences in non-U.S. markets, Putnam does not currently seek to recall non-U.S. securities on loan. In addition, where Putnam does not administer a client's securities lending program, this recall policy does not apply, since Putnam generally does not have information on loan details or authority to effect recalls in those cases. It is possible that, for impracticability or other reasons, a recalled security may not be returned to the relevant custodian in time to allow Putnam to vote the relevant proxy.

4. Putnam will make its reasonable best efforts to vote all proxies except when impeded by circumstances that are reasonably beyond its control and responsibility, such as custodial proxy voting services, in part or whole, not available or not established by a client, or custodial error.

*Proxy Voting Referrals* 

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Under the Guidelines, certain proxy matters will be referred to Portfolio Managers. The Portfolio Manager receiving the referral request may delegate the vote decision to an appropriate Analyst from among a list of eligible analysts (such list to be approved by the Chief Investment Officer of the Putnam Equity group and the Director of Equity Research for the Putnam Equity group). The Analyst will be required to make the affirmation and disclosures identified in (3) below. Normally specific referral items will be referred to the portfolio team leader (or another member of the portfolio team he or she designates) whose accounts hold the greatest number of shares of the issuer of the proxies through the Proxy Referral Administration Database. The referral request contains (1) a field that will be used by the portfolio team leader or member for recommending a vote on each referral item, (2) a field for describing any contacts relating to the proxy referral item the portfolio team may have had with any Franklin Templeton employee outside Putnam Equity or with any person other than a proxy solicitor acting in the normal course of proxy solicitation, and (3) a field for portfolio managers to affirm that they are making vote recommendations in the best interest of client accounts and have disclosed to Compliance any potential conflicts of interest relevant to their vote recommendation.

Putnam may vote any referred items on securities held solely in accounts managed by the GAA team within Franklin Templeton Investment Solutions (and not held by any other investment product team) in accordance with the recommendation of Putnam's third-party proxy voting service provider. The Proxy Voting Team will first give the relevant portfolio manager(s) on the GAA team the opportunity to review the referred items and vote on them. If the portfolio manager(s) on the GAA team do not decide to make any active voting decision on any of the referred items, the items will be voted in accordance with the service provider's recommendation. If the security is also held by other investment teams at Putnam Equity, the items will be referred to the largest holder who is not a member of the GAA team.

The portfolio team leader or members who have been requested to provide a recommendation on a proxy referral item will complete the referral request. Upon receiving each completed referral request from the applicable Portfolio Manager or Analyst, the Proxy Voting Team will review the completed request for accuracy and completeness, and will follow up with investment personnel as appropriate.

*Conflicts of Interest* 

A potential conflict of interest may arise when voting proxies of an issuer which has a significant business relationship with Putnam. For example, Putnam could manage a defined benefit or defined contribution pension plan for the issuer. Putnam's policy is to vote proxies based solely on the investment merits of the proposal. In order to guard against conflicts, the following procedures have been adopted:

1. The Proxy Committee is composed of senior professionals, including Portfolio Managers in Putnam Equity and the Putnam Equity Sustainability Strategy group. None of these individuals or groups reports to Franklin Templeton's marketing businesses.

2. No Franklin Templeton employee outside Putnam Equity may contact any portfolio manager about any proxy vote without first contacting the Proxy Voting Team or a senior lawyer in the Legal and Compliance Department. There is no prohibition on employees seeking to communicate investment-related information to investment professionals except for Putnam's restrictions on dissemination of material, non-public information. However, the Proxy Voting Team will coordinate the delivery of such information to investment professionals to avoid appearances of conflict.

3. Investment professionals responding to referral requests must disclose any contacts with third parties other than normal contact with proxy solicitation firms and must affirm that they are making vote recommendations in the best interest of client accounts and have disclosed to the Proxy Voting Team any potential conflicts of interest relevant to their vote recommendation.

4. The Proxy Voting Team will review the name of the issuer of each proxy that contains a referral item against various sources of Putnam business relationships maintained by the Legal and Compliance Department or Client Service for potential material business relationships (i.e., conflicts of interest). For referrals, the Proxy Voting Team will complete the Proxy Voting Conflict of Interest Disclosure Form (attached as Exhibit B and C) via the Proxy Referral Administration Database and will prepare a quarterly report for the Putnam Chief Compliance Officer identifying all completed Conflict of Interest Disclosure forms.

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5. Putnam's Proxy Voting Guidelines may only be overridden with the written recommendation from a member of the Investment Division and concurrence of the Proxy Committee (or, in cases with limited time, with the Chair of the Proxy Committee on the Proxy Committee's behalf).

*Recordkeeping* 

The Putnam Equity Sustainability Strategy Group will retain copies of the following books and records:

1. A copy of the Proxy Voting Procedures and Guidelines as are from time to time in effect;

2. A copy of each proxy statement received with respect to securities in client accounts;

3. Records of each vote cast for each client;

4. Internal documents generated in connection with a proxy referral, such as emails, memoranda, etc.

5. Written reports to clients on proxy voting and all client requests for information and Putnam's response.

All records will be maintained for seven years. A proxy vendor may on Putnam's behalf maintain the records noted in 2 and 3 above if it commits to providing copies promptly upon request.

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<u>Exhibit A to Proxy Procedures</u> 

### Putnam Investments Proxy Voting Guidelines
The proxy voting guidelines below summarize Putnam's positions on various issues of concern to investors and indicate how client portfolio securities will be voted on proposals dealing with a particular issue. The proxy voting service is instructed to vote all proxies relating to client portfolio securities in accordance with these guidelines, except as otherwise instructed by the Proxy Voting Team.

Putnam's voting policies are rooted in our views that (1) strong, independent corporate governance is important to long-term company financial performance, and (2) long-term investors' active engagement with company management, including through the proxy voting process, strengthens issuer accountability and overall market discipline, potentially reducing risk and improving returns over time. Our voting program is offered as a part of our investment management services, at no incremental fee to Putnam, and, while there can be no guarantees, it is intended to offer potential investment benefits over a long-term horizon. Our voting policies are designed with investment considerations in mind, not as a means to pursue particular political, social, or other goals. As a result, we may not support certain proposals whose costs to the issuer (including implementation costs, practicability, and other factors), in Putnam's view, outweigh their investment merits.

These proxy voting policies are intended to be decision-making guidelines. The guidelines are not exhaustive and do not include all potential voting issues. In addition, as contemplated by and subject to Putnam's Proxy Voting Procedures, because proxy issues and the circumstances of individual companies are so varied, portfolio teams may recommend votes that may vary from the general policy choices set forth in the guidelines.

The following guidelines are grouped according to the types of proposals generally presented to shareholders. Part I deals with proposals which have been approved and recommended by a company's board of directors. Part II deals with proposals submitted by shareholders for inclusion in proxy statements. Part III addresses unique considerations pertaining to non-US issuers.

I. Board-Approved Proposals

Proxies will be voted **for** board-approved proposals, except as follows:

A. Matters Relating to the Board of Directors

#### Uncontested Election of Directors
The board of directors has the important role of overseeing management and its performance on behalf of shareholders. When evaluating a company's board, Putnam may consider the diversity of professional backgrounds and personal characteristics. Putnam believes that companies generally benefit from diversity on the board, including diversity with respect to gender, ethnicity, race, skills, perspectives and experience.

Proxies will be voted **for** the election of the company's nominees for directors (and/or subsidiary directors) and **for** board-approved proposals on other matters relating to the board of directors (provided that such nominees and other matters have been approved by an independent nominating committee), except as follows:

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| ➣ | Putnam will **withhold votes** from the entire board of directors if:  |

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● The board does not have a majority of independent directors,

● The board does not have nominating, audit and compensation committees composed solely of independent directors, or

● The board has more than <u>15</u> members or fewer than <u>five</u> members, absent special circumstances.

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| ➣ | Putnam may refrain from withholding votes from the board due to insufficient key committee independence due to director resignation, change in board structure, or other specific circumstances, provided that the company has stated (for example in an 8-K), or it can otherwise be determined, that the board will address committee composition to ensure compliance with the applicable corporate governance code in a timely manner after the shareholder meeting and the company has a history of appropriate board independence.  |

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Unless otherwise indicated, for the purposes of determining whether a board has a majority of independent directors and independent nominating, audit, and compensation committees, an independent director is a director who (1) meets all requirements to serve as an independent director of a company under the final NYSE Corporate Governance Rules (e.g., no material business relationships with the company and no present or recent employment relationship with the company (including employment of an immediate family member as an executive officer)), and (2) has not accepted directly or indirectly any consulting, advisory, or other compensatory fee (excluding immaterial fees for transactional services as defined by the NYSE Corporate Governance rules) from the company other than in his or her capacity as a member of the board of directors or any board committee. Putnam believes that the receipt of such compensation for services other than service as a director raises significant independence issues.

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| ➣ | Putnam will **withhold votes** from any nominee for director who is considered an independent director by the company and who has received compensation within the last three years from the company for the provision of professional services (e.g., investment banking, consulting, legal or financial advisory fees).  |

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| ➣ | Putnam will **withhold votes** from any nominee for director who attends fewer than 75% of board and committee meetings. Putnam may refrain from withholding votes on a **case-by-case** basis if a valid reason for the absence exists, such as illness, personal emergency, potential conflict of interest, etc.  |

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| ➣ | Putnam will **withhold votes** from any incumbent nominee for director who served on a board that has not acted to implement a policy requested in a shareholder proposal that received the support of a majority of the votes actually cast on the matter at its previous two annual meetings, or  |

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| ➣ | Putnam will **withhold votes** from any incumbent nominee for director who served on a board that adopted, renewed, or made a material adverse modification to a shareholder rights plan (commonly referred to as a "poison pill") without shareholder approval during the current or prior calendar year. (This is applicable to any type of poison pill, for example, advance-warning type pill, EGM pill, and Trust Defense Plans in Japan.)  |

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Putnam will refrain from opposing the board members who served at the time of the adoption of the poison pill if the duration is one year or less, if the plan contains other suitable restrictions; or if the company publicly discloses convincing rationale for its adoption and seeks shareholder approval of future renewals of the poison pill. (Suitable restrictions could include but are not limited to, a higher threshold for passive investors. Convincing rationale could include circumstances such as, but not limited to, extreme market disruption or conditions, stock volatility, substantial merger, active investor interest, or takeover attempts.)

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| ➣ | Putnam will vote on a **case-by-case** basis and may consider voting against the Nominating Committee Chair if there is a lack of evidence of board diversity.  |

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Putnam is concerned about over-committed directors. In some cases, directors may serve on too many boards to make a meaningful contribution. This may be particularly true for senior executives of public companies (or other directors with substantially full-time employment) who serve on more than a few outside boards.

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| ➣ | Putnam will vote **against** any non-executive nominee for director who serves on more than four (4) public company boards, except where Putnam would otherwise be withholding votes for the entire board of directors. For the purpose of this guideline, boards of affiliated registered investment companies and other similar entities such as UCITS will count as one board. Generally, Putnam will withhold support from directors serving on more than four unaffiliated public company boards, although an exception may be made in the case of a director who represents an investing firm with the sole purpose of managing a portfolio of investments that includes the company.  |

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| ➣ | Putnam will **withhold** votes from any nominee for director who serves as an executive officer of any public company ("home company") while serving on more than two (2) public company board**s** other than the home company board. (Putnam will withhold votes from the nominee at each company where Putnam client portfolios own shares.) In addition, if Putnam client portfolios are shareholders of the executive's home company, Putnam will withhold votes from members of the company's governance committee. For the purpose of this guideline, boards of affiliated registered investment companies and other similar entities such as UCITS will count as one board.  |

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| ➣ | Putnam will **withhold votes** from any nominee for director of a public company (Company A) who is employed as a senior executive of another public company (Company B) if a director of Company B serves as a senior executive of Company A (commonly referred to as an "interlocking directorate").  |

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Board independence depends not only on its members' individual relationships, but also the board's overall attitude toward management. Independent boards are committed to good corporate governance practices and, by providing objective independent judgment, enhancing shareholder value. Putnam may withhold votes on a case-by-case basis from some or all directors that, through their lack of independence, have failed to observe good corporate governance practices or, through specific corporate action, have demonstrated a disregard for the interest of shareholders.

Note: Designation of executive director is based on company disclosure.

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| ➣ | Putnam will vote **against** proposals that provide that a director may be removed only for cause. Putnam will generally vote **for** proposals that permit the removal of directors with or without cause.  |

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| ➣ | Putnam will vote **against** proposals authorizing a board to fill a director vacancy without shareholder approval.  |

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| ➣ | Putnam will vote on a **case-by-case** basis on subsidiary director nominees if Putnam will be voting against the nominees of the parent company's board.  |

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| ➣ | Putnam will vote on a **case-by-case** basis for director nominees, including nominees for positions on Supervisory Boards or Supervisory Committees, or similar board entities (depending on board structure), for (re)election when cumulative voting applies.  |

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| ➣ | Putnam will vote **for** proposals to approve annual directors' fees, except that Putnam will vote on a **case-by-case** basis if Putnam's independent proxy voting service has recommended a vote against such proposal. Additionally, Putnam will vote **for** proposals to approve the grant of equity awards to directors, except that Putnam will consider these proposals on a **case-by-case**basis if Putnam's proxy service provider is recommending a vote against the proposal.  |

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#### Classified Boards

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| ➣ | Putnam will vote **against** proposals to classify a board, absent special circumstances indicating that shareholder interests would be better served by this structure.  |

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#### Ratification of Auditors

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| ➣ | Putnam will vote on a **case-by-case**basis on proposals to ratify the selection of independent auditors if there is evidence that the audit firm's independence or the integrity of an audit is compromised. (Otherwise, Putnam will vote **for**.)  |

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#### Contested Elections of Directors

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| ➣ | Putnam will vote on a **case-by-case** basis in contested elections of directors.  |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. <u>Executive Compensation</u>

Putnam will vote on a **case-by-case** basis on board-approved proposals relating to executive compensation, except as follows:

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| ➣ | Putnam will vote **for** stock option and restricted stock plans that will result in an average annual dilution of 1.67% or less (based on the disclosed term of the plan and including all equity-based plans), except where Putnam would otherwise be withholding votes for the entire board of directors in which case Putnam will evaluate the plans on a **case-by-case** basis.  |

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| ➣ | Putnam will vote **against** stock option and restricted stock plans that will result in an average annual dilution of greater than 1.67% (based on the disclosed term of the plan and including all equity plans).  |

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| ➣ | Putnam will vote **against** any stock option or restricted stock plan where the company's actual grants of stock options and restricted stock under all equity-based compensation plans during the prior three (3) fiscal years have resulted in an average annual dilution of greater than 1.67%.  |

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● Additionally, if the annualized dilution cannot be calculated, Putnam will vote **for** plans where the Total Potential Dilution is 5% or less. If the annualized dilution cannot be calculated and the Total Potential Dilution exceeds 5%, then Putnam will vote **against**. Note: Such plans must first pass all of Putnam's other screens.

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| ➣ | Putnam will vote proposals to issue equity grants to executives on a **case-by-case** basis.  |

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| ➣ | Putnam will vote **against** stock option plans that permit replacing or repricing of underwater options (and **against** any proposal to authorize such replacement or repricing of underwater options).  |

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| ➣ | Putnam will vote **against** stock option plans that permit issuance of options with an exercise price below the stock's current market price.  |

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| ➣ | Putnam will vote **against** stock option plans/ restricted stock plans with evergreen features providing for automatic share replenishment.  |

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| ➣ | Putnam will vote **for** bonus plans under which payments are treated as performance-based compensation that is deductible under Section 162(m) of the Internal Revenue Code of 1986, as amended, except as follows:  |

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|:---|:---|
| Vote | on a **case-by-case** basis on such proposals if any of the following circumstances exist:  |

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● the amount per employee under the plan is unlimited, or

● the maximum award pool is undisclosed, or

● the incentive bonus plan's performance criteria are undisclosed, or

● the independent proxy voting service recommends a vote against.

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|:---|:---|
| ➣ | Putnam will vote in favor of the annual presentation of advisory votes on executive compensation (Say-on-Pay).  |

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|:---|:---|
| ➣ | Putnam will generally vote **for** advisory votes on executive compensation (Say-on-Pay). However, Putnam will vote **against** an advisory vote if the company fails to effectively link executive compensation to company performance according to benchmarking performed by the independent proxy voting service.  |

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● Putnam will review the proposal on a **case-by-case** basis if there is no recommendation of the independent proxy voting service .

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|:---|:---|
| ➣ | Putnam will vote on a **case-by-case** basis on severance agreements (e.g., golden and tin parachutes)  |

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|:---|:---|
| ➣ | Putnam will **withhold** votes from members of a Board of Directors which has approved compensation arrangements Putnam's investment personnel have determined are grossly unreasonable at the next election at which such director is up for re-election.  |

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|:---|:---|
| ➣ | Putnam will vote **for** employee stock purchase plans that have the following features: (1) the shares purchased under the plan are acquired for no less than 85% of their market value, (2) the offering period under the plan is 27 months or less, and (3) dilution is 10% or less.  |

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|:---|:---|
| ➣ | Putnam will vote **for** Non-qualified Employee Stock Purchase Plans with all the following features:  |

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1) Broad-based participation (i.e., all employees of the company with the exclusion of individuals with 5 percent or more of beneficial ownership of the company). 

2) Limits on employee contribution, which may be a fixed dollar amount or expressed as a percent of base salary. 

3) Company matching contribution up to 25 percent of employee's contribution, which is effectively a discount of 20 percent from market value. 

4) No discount on the stock price on the date of purchase since there is a company matching contribution.

Putnam will vote **against** Non-qualified Employee Stock Purchase Plans when any of the plan features do not meet the above criteria.

Putnam may vote against executive compensation proposals on a **case-by-case** basis where compensation is excessive by reasonable corporate standards, or where a company fails to provide transparent disclosure of executive compensation. In voting on proposals relating to executive compensation, Putnam will consider whether the proposal has been approved by an independent compensation committee of the board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. <u>Capitalization</u>

Putnam will vote on a case-by-case basis on board-approved proposals involving changes to a company's capitalization, except as follows:

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|:---|:---|
| ➣ | Putnam will vote **for** proposals relating to the authorization of additional common stock, except that Putnam will evaluate such proposals on a **case-by-case**basis if (i) they relate to a specific transaction or to common stock with special voting rights, (ii) the company has a non-shareholder approved poison pill in place, or (iii) the company has had sizeable stock placements to insiders within the past three years at prices substantially below market value without shareholder approval.  |

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|:---|:---|
| ➣ | Putnam will vote **for** proposals to effect stock splits (excluding reverse stock splits.)  |

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|:---|:---|
| ➣ | Putnam will vote **for** proposals authorizing share repurchase programs, except that Putnam will vote on a **case-by-case** basis if there are concerns that there may be abusive practices related to the share repurchase programs.  |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. <u>Acquisitions, Mergers, Reorganizations and</u> 

#### Other Transactions
Putnam will vote on a **case-by-case** basis on business transactions such as acquisitions, mergers, reorganizations involving business combinations, liquidations and sale of all or substantially all of a company's assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. <u>Anti-Takeover Measures</u>

Putnam will vote **against** board-approved proposals to adopt anti-takeover measures such as supermajority voting provisions, issuance of blank check preferred stock, the creation of a separate class of stock with disparate voting rights, control share acquisition provisions, targeted share placements, and ability to make greenmail payments, except as follows:

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|:---|:---|
| ➣ | Putnam will vote on a **case-by-case** basis on proposals to ratify or approve shareholder rights plans;  |

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|:---|:---|
| ➣ | Putnam will vote on a **case-by-case** basis on proposals to adopt fair price provisions.  |

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| | |
|:---|:---|
| ➣ | Putnam will vote on a **case-by-case** basis on proposals to issue blank check preferred stock in the case of REITs (only).  |

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| | |
|:---|:---|
| ➣ | Putnam will generally vote **for** proposals that enable or expand shareholders' ability to take action by written consent.  |

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|:---|:---|
| ➣ | Putnam will vote on a **case-by-case** basis on proposals to <u>increase</u> shares of an existing class of stock with disparate voting rights from another share class.  |

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|:---|:---|
| ➣ | Putnam will vote on a **case-by-case** basis on **shareholder or board-approved** proposals to eliminate supermajority voting provisions at controlled companies (companies in which an individual or a group voting collectively holds a majority of the voting interest).  |

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| | |
|:---|:---|
| ➣ | Putnam will vote on a **case-by-case basis** on **board-approved** proposals to adopt supermajority voting provisions at controlled companies (companies in which an individual or a group voting collectively holds a majority of the voting interest).  |

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| | |
|:---|:---|
| ➣ | Putnam will vote on a **case-by-case** basis on proposals to issue blank check preferred stock if appropriate "*de-clawed"* language is present. Specifically, appropriate *de-clawed* language will include cases where the Company states (i.e., through 8-K, proxy statement or other public disclosure) it will not use the preferred stock for anti-takeover purposes, or in order to implement a shareholder rights plan, or discloses a commitment to submit any future issuances of preferred stock to be used in a shareholder rights plan/anti-takeover purpose to a shareholder vote prior to its adoption.  |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. <u>Other Business Matters</u>

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| | |
|:---|:---|
| ➣ | Putnam will vote **for** board-approved proposals approving routine business matters such as changing the company's name and procedural matters relating to the shareholder meeting, except as follows:  |

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|:---|:---|
| ➣ | Putnam will vote on a **case-by-case** basis on proposals to amend a company's charter or bylaws (except for charter amendments necessary or to effect stock splits, to change a company's name, to authorize additional shares of common stock or other matters which are considered routine (for example, director age or term limits), technical in nature, fall within Putnam's guidelines (for example, regarding board size or virtual meetings), are required pursuant to regulatory and/or listing rules, have little or no economic impact or will not negatively impact shareholder rights).  |

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| | |
|:---|:---|
| ➣ | Additionally, Putnam believes the bundling of items, whether the items are related or unrelated, is generally not in shareholders' best interest. We may vote **against** the entire bundled proposal if we would normally vote against any of the items if presented individually. In these cases, we will review the bundled proposal on a **case-by-case** basis.  |

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|:---|:---|
| ➣ | Putnam generally supports quorum requirements if the level is set high enough to ensure a broad range of shareholders is represented in person or by proxy but low enough so that the Company can transact necessary business. Putnam will vote on a **case-by-case** basis on proposals seeking to change quorum requirements; however, Putnam will normally support proposals that seek to comply with market or exchange requirements.  |

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| | |
|:---|:---|
| ➣ | Putnam will vote on a **case-by-case** basis on proposals seeking to change a company's state of incorporation. However, Putnam will vote **for** mergers and reorganizations involving business combinations designed solely to reincorporate a company in Delaware.  |

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| | |
|:---|:---|
| ➣ | Putnam will vote **against** authorization to transact other unidentified, substantive business at the meeting.  |

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| | |
|:---|:---|
| ➣ | Putnam will vote **against** proposals where there is a lack of information to make an informed voting decision.  |

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| | |
|:---|:---|
| ➣ | Putnam will vote as follows on proposals to adjourn shareholder meetings:  |

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If Putnam is withholding support for the board of the company at the meeting, any proposal to adjourn should be referred for **case-by-case** analysis.

If Putnam is not withholding support for the board, Putnam will vote in favor of adjourning, unless the vote concerns an issue that is being referred back to Putnam for case-by-case review. Under such circumstances, the proposal to adjourn should also be referred to Putnam for **case-by-case** analysis.

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| | |
|:---|:---|
| ➣ | Putnam will vote **against** management proposals to adopt a specific state's courts, or a specific U.S. district court as the exclusive forum for certain disputes, except that Putnam will vote **for** proposals adopting the State of Delaware, or the Delaware Chancery Court, as the exclusive forum, for corporate law matters for issuers incorporated in Delaware. Requiring shareholders to bring actions solely in one state may discourage the pursuit of derivative claims by increasing their difficulty and cost. However, Putnam's guideline recognizes the expertise of the Delaware state court system in handling disputes involving Delaware corporations. In addition, Putnam will **withhold votes** from the chair of the Nominating/Governance committee if a company amends its Bylaws, or takes other actions, to adopt a specific state's courts (other than Delaware courts, for issuers incorporated in Delaware) or a specific U.S. district court as the exclusive forum for certain disputes <u>without</u> shareholder approval.  |

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| | |
|:---|:---|
| ➣ | Putnam will vote on a case-by-case basis on management proposals seeking to adopt a bylaw amendment allowing the company to shift legal fees and costs to unsuccessful plaintiffs in intra-corporate litigation (fee-shifting bylaw). Additionally, Putnam will vote against the Chair of the Nominating/Governance committee if a company adopts a fee-shifting bylaw amendment without shareholder approval.  |

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➣ Putnam will support management/shareholder proxy access proposals as long as the proposals align with the following principles for a shareholder (or up to 20 shareholders together as a group) to receive proxy access:

1) The required minimum aggregate ownership of the Company's outstanding common stock is no greater than 3%; 

2) The required minimum holding period for the shareholder proponent(s) is no greater than two years; and

3) The shareholder(s) are permitted to nominate at least 20% of director candidates for election to the board. 

Proposals requesting shares be held for 3 years will be reviewed on a **case-by-case**basis. Putnam will vote **agains**<u>t</u> proposals requesting shares be held for more than three years. Proposals that meet Putnam's stated criteria and include other requirements relating to issues such as, but not limited to, shares on loan or compensation agreements with nominees, will be reviewed on a **case-by-case** basis.

Additionally, shareholder proposals seeking an amendment to a company's proxy access policy which include any one of the supported criteria under Putnam's guidelines, for example, a 2-year holding period for shareholders, will be reviewed on a **case-by-case**basis.

Putnam supports management / shareholder proposals giving shareholders the right to call a special meeting as long as the ownership requirement in such proposals is at least **15%** of the company's outstanding common stock and not more than **25%**.

In general, Putnam will vote **for** management or shareholder proposals to reduce the ownership requirement below a company's existing threshold, as long as the new threshold is at least **15%** and not greater than **25%** of the company's outstanding common stock.

Putnam will vote **against** any proposal with an ownership requirement exceeding **25%** of the company's common stock or an ownership requirement that is less than **15%** of the company's outstanding common stock.

In cases where there are competing management and shareholder proposals giving shareholders the right to call a special meeting, Putnam will generally vote **for** the proposal which has the lower minimum shareholder ownership threshold, as long as that threshold is within Putnam's recommended minimum/maximum thresholds. If only one of the competing proposals has a threshold that falls within Putnam's threshold range, Putnam will normally support that proposal as long as

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it represents an improvement (reduction) from the previous requisite ownership level. Putnam will normally vote **against** both proposals if neither proposal has a requisite ownership level between **15%** and **25%** of the company's outstanding common stock**.**

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|:---|:---|
| ➣ | Putnam will generally vote **fo**<u>r</u> management or shareholder proposals to allow a company to hold virtual-only or hybrid shareholder meetings or to amend its articles/charter/by-laws to allow for virtual-only or hybrid shareholder meetings, provided the proposal does not preclude in-person meetings (at any given time), and does not otherwise limit or impair shareholder participation; and if the company has provided clear disclosure to ensure that shareholders can effectively participate in virtual-only shareholder meetings and meaningfully communicate with company management and directors. Additionally, Putnam may consider the rationale of the proposal and whether there have been concerns about the company's previous meeting practices.  |

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Disclosure should address the following:

● the ability of shareholders to ask questions during the meeting

o including time guidelines for shareholder questions

o rules around what types of questions are allowed

o and rules for how questions and comments will be recognized and disclosed to meeting participants

o the manner in which appropriate questions received during the meeting will be addressed by the board

● procedures, if any, for posting appropriate questions received during the meeting and the company's answers on the investor page of their website as soon as is practical after the meeting

● technical and logistical issues related to accessing the virtual meeting platform; and

● procedures for accessing technical support to assist in the event of any difficulties accessing the virtual meeting

Putnam may vote against proposals that do not meet these criteria.

Additionally, Putnam may vote **agains**t the Chair of the Governance Committee when the board is planning to hold a virtual-only shareholder meeting and the company has not provided sufficient disclosure (as noted above) or shareholder access to the meeting.

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|:---|:---|
| ➣ | Putnam will vote **for** proposals to approve a company's board-approved climate transition action plan ("say on climate" proposals in which the company's board proposes that shareholders indicate their support for the company's plan), unless the proxy voting service has recommended a vote against the proposal, in which case Putnam will vote on a **case-by-case** basis on the proposal.  |

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|:---|:---|
| ➣ | Putnam will vote on a **case-by-case** basis on board-approved proposals that conflict with shareholder proposals.  |

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II. Shareholder Proposals

Shareholder proposals are non-binding votes that are often opposed by management. Some proposals relate to matters that are financially immaterial to the company's business, while others may be impracticable or costly for a company to implement. At the same time, well-crafted shareholder proposals may serve the purpose of raising issues that are material to a company's business for management's consideration and response. Putnam seeks to weigh the costs of different types of proposals against their expected financial benefits. More specifically:

Putnam will vote **in accordance with the recommendation of the company's board of directors** on all shareholder proposals, except as follows:

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|:---|:---|
| ➣ | Putnam will vote **for** shareholder proposals that are consistent with Putnam's proxy voting guidelines for board-approved proposals.  |

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|:---|:---|
| ➣ | Putnam will vote **for** shareholder proposals to declassify a board, absent special circumstances which would indicate that shareholder interests are better served by a classified board structure.  |

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|:---|:---|
| ➣ | Putnam will vote **for** shareholder proposals to require shareholder approval of shareholder rights plans.  |

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|:---|:---|
| ➣ | Putnam will vote **for** shareholder proposals asking that director nominees receive support from holders of a majority of votes cast or a majority of shares outstanding of the company in order to be (re) elected.  |

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|:---|:---|
| ➣ | Putnam will review on a **case-by-case** basis, shareholder proposals requesting that the board adopt a policy whereby, in the event of a significant restatement of financial results or significant extraordinary write-off, the board will recoup, to the fullest extent practicable, for the benefit of the company, all performance-based bonuses or awards that were made to senior executives based on having met or exceeded specific performance targets to the extent that the specified performance targets were not met.  |

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|:---|:---|
| ➣ | Putnam will vote **for** shareholder proposals urging the board to seek shareholder approval of any future supplemental executive retirement plan ("SERP"), or individual retirement arrangement, for senior executives that provides credit for additional years of service not actually worked, preferential benefit formulas not provided under the company's tax-qualified retirement plans, accelerated vesting of retirement benefits or retirement perquisites and fringe benefits that are not generally offered to other company employees. (Implementation of this policy shall not breach any existing employment agreement or vested benefit.)  |

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|:---|:---|
| ➣ | Putnam will vote **for** shareholder proposals requiring companies to report on their executive retirement benefits. (Deferred compensation, split-dollar life insurance, SERPs and pension benefits)  |

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|:---|:---|
| ➣ | Putnam will vote **for** shareholder proposals requesting that a company establish a pay-for-superior-performance standard whereby the company discloses defined financial and/or stock price performance criteria (along with the detailed list of comparative peer group) to allow shareholders to sufficiently determine the pay and performance correlation established in the company's performance-based equity program. In addition, no <u>multi-year</u> award should be paid out unless the company's performance exceeds, <u>during the current CEO's tenure (three or more years)</u>, its peer median or mean performance on selected financial and stock price performance criteria.  |

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|:---|:---|
| ➣ | Putnam will vote **for** shareholder proposals urging the board to disclose in a separate report to shareholders, the Company's relationships with its executive compensation consultants or firms. Specifically, the report should identify the entity that retained each consultant (the company, the board or the compensation committee) and the types of services provided by the consultant in the past five years (non-compensation-related services to the company or to senior management and a list of all public company clients where the Company's executives serve as a director.)  |

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|:---|:---|
| ➣ | Putnam will vote **for** shareholder proposals requiring companies to accelerate vesting of equity awards under management severance agreements only if both of the following conditions are met:  |

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● the company undergoes a change in control, and

● the change in control results in the termination of employment for the person receiving the severance payment.

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|:---|:---|
| ➣ | Putnam will vote **for** shareholder proposals requiring that the chair's position be filled by an independent director (separate chair/CEO). However, Putnam will vote on a **case-by-case** basis on such proposals when the company's board has a lead-independent director (or already has an independent or separate chair) <u>and</u> Putnam is supporting the nominees for the board of directors.  |

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|:---|:---|
| ➣ | Putnam will vote **for** shareholder proposals seeking the submission of golden coffins to a shareholder vote or the elimination of the practice altogether.  |

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|:---|:---|
| ➣ | Putnam will vote **for** shareholder proposals seeking a policy that forbids any director who receives more than 25% withhold votes cast (based on for and withhold votes) from serving on any key board committee for two years and asking the board to find replacement directors for the committees if need be.  |

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|:---|:---|
| ➣ | Putnam will vote **for** shareholder proposals urging the board to seek shareholder approval of severance agreements (e.g., golden and tin parachutes).  |

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● However, Putnam will vote **against** such proposals when the company has a policy that minimally requires shareholder approval of severance agreements for executives that provides for cash severance benefits exceeding 2.99 times the sum of the executive's base salary plus target annual non-equity incentive plan bonus opportunity.

Putnam will vote on a **case-by-case** basis on approving such compensation arrangements.

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|:---|:---|
| ➣ | Putnam will vote **for** shareholder proposals requiring companies to make cash payments under management severance agreements only if both of the following conditions are met: the company undergoes a change in control, and the change in control results in the termination of employment for the person receiving the severance payment.  |

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|:---|:---|
| ➣ | Putnam will vote on a **case-by-case** basis on shareholder proposals to limit a company's ability to make excise tax gross-up payments under management severance agreements as well as proposals to limit income or other tax gross-up payments.  |

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|:---|:---|
| ➣ | Putnam will vote **in accordance with the recommendation of the company's board of directors** on shareholder proposals regarding corporate political spending, unless Putnam is voting against the directors, in which case the proposal would be reviewed on a **case-by-case** basis.  |

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|:---|:---|
| ➣ | Putnam will vote on a **case-by-case** basis on shareholder proposals that conflict with board-approved proposals.  |

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#### Environmental and Social

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|:---|:---|
| ➣ | Putnam believes that sustainable environmental practices and sustainable social policies are important components of long-term value creation. Companies should evaluate the potential risks to their business operations that are directly related to environmental and social factors (among others). In evaluating shareholder proposals relating to environmental and social initiatives, Putnam takes into account (1) the relevance and materiality of the proposal to the company's business, (2) whether the proposal is well crafted (e.g., whether it references science-based targets, or standard global protocols), and (3) the practicality or reasonableness of implementing the proposal.  |

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Putnam may support well-crafted and well-targeted proposals that request additional reporting or disclosure on a company's plans to mitigate risk to the company related to the following issues and/or their strategies related to these issues: Environmental issues, including but not limited to, climate change, greenhouse gas emissions, renewable energy, and broader sustainability issues; and Social issues, including but not limited to, fair pay, employee diversity and development, safety, labor rights, supply chain management*,* privacy and data security.

In addition, Putnam will consider proposals related to Artificial Intelligence ("AI") on a case-by-case basis.

Putnam will consider factors such as (i) the industry in which the company operates, (ii) the company's current level of disclosure, (iii) the company's level of oversight, (iv) the company's management of risk arising out of these matters, (v) whether the company has suffered a material financial impact. Other factors may also be considered.

Putnam will consider the recommendation of its third-party proxy service provider and may consider other factors such as third-party evaluations of ESG performance.

Additionally, Putnam may vote on a **case-by-case** basis on proposals which ask a company to take action beyond reporting where our third-party proxy service provider has identified one or more reasons to warrant a vote FOR.

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III. Voting Shares of Non-US Issuers

Many non-US jurisdictions impose material burdens on voting proxies. There are three primary types of limits as follows:

1) Share blocking. Shares must be frozen for certain periods of time to vote via proxy. 

2) Share re-registration. Shares must be re-registered out of the name of the local custodian or nominee into the name of the client for the meeting and, in many cases, then re-registered back. Shares are normally blocked in this period.

3) Powers of Attorney. Detailed documentation from a client must be given to the local sub-custodian. In many cases Putnam is not authorized to deliver this information or sign the relevant documents.

Putnam's policy is to weigh the benefits to clients from voting in these jurisdictions against the detriments of not doing so. For example, in a share blocking jurisdiction, it will normally not be in a client's interest to freeze shares simply to participate in a non-contested routine meeting. More specifically, Putnam will normally not vote shares in non-US jurisdictions imposing burdensome proxy voting requirements except in significant votes (such as contested elections and major corporate transactions) where directed by portfolio managers.

Putnam recognizes that the laws governing non**-**US issuers will vary significantly from US law and from jurisdiction to jurisdiction. Accordingly, it may not be possible or even advisable to apply these guidelines mechanically to non-US issuers. However, Putnam believes that shareholders of all companies are protected by the existence of a sound corporate governance and disclosure framework. Accordingly, Putnam will vote proxies of non**-**US issuers **in accordance with the foregoing guidelines where applicable**, except as follows:

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|:---|:---|
| ➣ | Putnam will vote **for** shareholder proposals calling for a majority of the directors to be independent of management.  |

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|:---|:---|
| ➣ | Putnam will vote **for** shareholder proposals that implement corporate governance standards similar to those established under U.S. federal law and the listing requirements of U.S. stock exchanges, and that do not otherwise violate the laws of the jurisdiction under which the company is incorporated.  |

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|:---|:---|
| ➣ | Putnam will vote on a **case-by-case** basis on proposals relating to (1) the issuance of common stock in excess of 20% of a company's outstanding common stock where shareholders do not have preemptive rights, or (2) the issuance of common stock in excess of 100% of a company's outstanding common stock where shareholders have preemptive rights.  |

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|:---|:---|
| ➣ | Putnam will vote **for** proposals to authorize share repurchase programs that are recommended for approval by Putnam's proxy voting service provider, otherwise Putnam will vote **against** such proposals; except that Putnam will vote on a **case-by-case basis** if there are concerns that there may be abusive practices related to the share repurchase programs.  |

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|:---|:---|
| ➣ | Putnam will vote **against** authorizations to repurchase shares or issue shares or convertible debt instruments with or without preemptive rights when such authorization can be used as a takeover defense without shareholder approval. Putnam will not apply this policy to a company with a shareholder who controls more than 50% of its voting rights.  |

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|:---|:---|
| ➣ | Putnam will generally vote **for** proposals that include debt issuances, however substantive/non-routine proposals, and proposals that fall outside of normal market practice or reasonable standards, will be reviewed on a **case-by-case** basis.  |

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|:---|:---|
| ➣ | Putnam will vote **for** board-approved routine, market-practice proposals. These proposals are limited to (1) those issues that will have little or no economic impact, such as technical, editorial, or mandatory regulatory compliance items, (2) those issues that will not adversely affect and/or which clearly improve shareholder rights/values, and which do not violate Putnam's proxy voting guidelines, or (3) those issues that do not seek to deviate from existing laws or regulations. Examples include but are not limited to, related party transactions (non-strategic), profit-and-loss transfer agreements (Germany), authority to increase paid-in capital (Taiwan). Should any unusual circumstances be identified concerning a normally routine issue, such proposals will be referred back to Putnam for internal review.  |

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|:---|:---|
| ➣ | Putnam will generally vote **for** proposals regarding amendments seeking to expand business lines or to amend the corporate purpose, provided the proposal would not include a significant or material departure from the company's current business, and/or will provide the company with greater flexibility in the performance of its activities.  |

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|:---|:---|
| ➣ | Putnam will normally vote **for** management proposals concerning allocation of income and the distribution of dividends. However, Putnam portfolio teams will override this guideline when they conclude that the proposals are outside the market norms (i.e., those seen as consistently and unusually small or large compared to market practices).  |

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|:---|:---|
| ➣ | Putnam will generally vote **for** proposals seeking to adjust the par value of common stock. However, non-routine, substantive proposals will be reviewed on a **case-by-case** basis.  |

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|:---|:---|
| ➣ | Putnam will vote **against** proposals that would authorize the company to reduce the notice period for calling special or extraordinary general meetings to less than 21-Days.  |

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|:---|:---|
| ➣ | Putnam will generally vote **for** proposals relating to transfer of reserves/increase of reserves (i.e., France, Japan). However, Putnam will vote on a **case-by-case** basis if the proposal falls outside of normal market practice.  |

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|:---|:---|
| ➣ | Putnam will generally vote **for** proposals to increase the maximum variable pay ratio. However, Putnam will vote on a **case-by-case** basis if we are voting against a company's remuneration report or if the proposal seeks an increase in excess of 200%.  |

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|:---|:---|
| ➣ | Putnam will review stock option plans on a **case-by-case** basis which allow for the options exercise price to be reduced by dividend payments (if the plan would normally pass Putnam's Guidelines).  |

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|:---|:---|
| ➣ | Putnam will generally vote **for** requests to provide loan guarantees however, Putnam will vote on a **case-by-case** basis if the total amount of guarantees is in excess of 100% of the company's audited net assets.  |

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|:---|:---|
| ➣ | Putnam will generally support remuneration report/policy proposals (i.e., advisory/binding) where a company's executive compensation is linked directly with the performance of the business and executive. Putnam will generally support compensation proposals which incorporate a mix of reasonable salary and performance based short- and long-term incentives. Companies should demonstrate that their remuneration policies are designed and managed to incentivize and retain executives while growing the company's long-term shareholder value.  |

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Generally, Putnam will vote **against** remuneration report/policy proposals (i.e., advisory/binding) in the following cases:

● Disconnect between pay and performance

● No performance metrics disclosed;

● No relative performance metrics utilized;

● Single performance metric was used and it was an absolute measure;

● Performance goals were lowered when management failed or was unlikely to meet original goals;

● Long Term Incentive Plan is subject to retesting (e.g., Australia);

● Service contracts longer than 12 months (e.g., United Kingdom);

● Allows vesting below median for relative performance metrics;

● Ex-gratia / non-contractual payments have been made (e.g., United Kingdom and Australia);

● Contains provisions to automatically vest upon change-of-control; or

------

● Other poor compensation practices or structures.

● Pension provisions for new executives is not at the same level as the majority of the wider workforce; pension provisions for incumbent executives are not set to decrease over time (United Kingdom)

● Proposed CEO salary increases are not justifiably appropriate in comparison to wider workforce or rationale for exception increases is not fully disclosed (United Kingdom)

---

| | |
|:---|:---|
| ➣ | Putnam will vote on a **case-by-case basis** on bonus payments to executive directors or senior management; however, Putnam will vote **against** payments that include outsiders or independent statutory auditors.  |

---

#### Matters Relating to Board of Directors

#### Uncontested Board Elections

#### Asia: China, Hong Kong, India, Indonesia, Philippines, Taiwan and Thailand

---

| | |
|:---|:---|
| ➣ | Putnam will **vote against** the entire board of directors if  |

---

o fewer than one-third of the directors are independent directors, or

∎ the board has not established <u>audit</u>, <u>compensation</u> and <u>nominating</u> committees each composed of a majority of independent directors, or

∎ the chair of the audit, compensation or nominating committee is not an independent director.

Commentary: Companies listed in China (or dual-listed in China and Hong Kong) often have a separate supervisory committee in addition to a standard board of directors containing audit, compensation, and nominating committees. The supervisory committee provides oversight of the financial affairs of the company and supervises members of the board and management, while the board of directors makes decisions related to the company's business and investment strategies. The supervisory committee normally comprises employee representatives and shareholder representatives. Shareholder representatives are elected by shareholders of the company while employee representatives are elected by the company's staff. Shareholder representatives may be independent or may be affiliated with the company or its substantial shareholders. Current laws and regulations neither provide a basis for evaluation of supervisor independence nor do they require a supervisor to be independent.

---

| | |
|:---|:---|
| ➣ | Putnam will generally vote in favor of nominees to the Supervisory Committee  |

---

#### Australia

---

| | |
|:---|:---|
| ➣ | Putnam will vote **against** the entire board of directors if  |

---

● fewer than a majority of the directors are independent, or

● the board has not established an audit committee composed solely of non-executive directors, a majority of whom, including the chair of the committee (who should not be the board chair), should be independent directors, or

● the board has not established nominating and compensation committees each composed of a majority of independent, non-executive directors, with an independent chair.

#### Brazil

---

| | |
|:---|:---|
| ➣ | Putnam will vote <u>against</u> proposals requesting cumulative voting unless there are more candidates than number of seats available, in which case vote for.  |

---

------

---

| | |
|:---|:---|
| ➣ | Putnam will vote **for** proposals for the proportional allocation of cumulative votes if Putnam is supporting the entire slate of nominees. Putnam will vote **against** such proposals if Putnam is not supporting the entire slate.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will **abstain** on individual director allocation proposals if Putnam is voting for the proportional allocation of cumulative votes. Putnam will vote on a **case-by-case**basis on individual director allocation proposals if Putnam is voting against the proportional allocation of votes.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote **for** proposals to cumulate votes of common and preferred shareholders if the nominees are known and Putnam is supporting the applicable nominees; Putnam will vote **against** such proposals if Putnam is not supporting the known nominees, or if the nominees are unknown.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will generally vote **against** proposals seeking the recasting of votes for amended slate (as new candidates could be included in the amended slate without prior disclosure to shareholders).  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote **against** proposals regarding instructions if meeting is held on second call if election of directors is part of the recasting as the slate can be amended without (prior) disclosure to shareholders.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote **against** proposals regarding the casting of minority votes to the candidate with largest number of votes.  |

---

#### Canada
Canadian corporate governance requirements mirror corporate governance reforms that have been adopted by the NYSE and other U.S. national securities exchanges and stock markets. As a result, Putnam will vote on matters relating to the board of directors of Canadian issuers **in accordance with the guidelines applicable to U.S. issuers.**

<u>Commentary</u>: Like the UK's Combined Code on Corporate Governance, the policies on corporate governance issued by Canadian securities regulators embody the "comply and explain" approach to corporate governance. Because Putnam believes that the board independence standards contained in the proxy voting guidelines are integral to the protection of investors in Canadian companies, these standards will be applied in a prescriptive manner.

#### Continental Europe (ex-Germany)

---

| | |
|:---|:---|
| ➣ | Putnam will vote **against** the entire board of directors if  |

---

● fewer than a majority of the directors are <u>i</u> ndependent directors, or

● the board has not established <u>audit, nominating</u> and <u>compensation</u> committees each composed of a majority of independent directors.

<u>Commentary</u>: An "independent director" under the European Commission's guidelines is one who is free of any business, family or other relationship, with the company, its controlling shareholder or the management of either, that creates a conflict of interest such as to impair his judgment. A "non-executive director" is one who is not engaged in the daily management of the company.

In France, Employee Representatives are employed by the company and represent rank and file employees. These representatives are elected by company employees. The law also provides for the appointment of employee shareholder representatives, if the employee shareholdings exceed 3% of the share capital. Employee shareholder representatives are elected by the company's shareholders (via general meeting).

#### Germany

---

| | |
|:---|:---|
| ➣ | For companies subject to "co-determination," Putnam will vote <u>for</u> the election of nominees to the supervisory board, except:  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote <u>against</u> the Supervisory Board if  |

---

------

● the board has not established an audit committee comprising an Independent chair.

● the audit committee chair serves as board chair.

● the board contains more than two former management board members.

---

| | |
|:---|:---|
| ➣ | Putnam will vote <u>against</u> the election of a former member of the company's managerial board to chair of the supervisory board.  |

---

<u>Commentary</u>: German corporate governance is characterized by a two-tier board system—a managerial board composed of the company's executive officers, and a supervisory board. The supervisory board appoints the members of the managerial board. Shareholders elect members of the supervisory board, except that in the case of companies with a large number of employees, company employees are allowed to elect some of the supervisory board members (one-half of supervisory board members are elected by company employees at companies with more than 2,000 employees; one-third of the supervisory board members are elected by company employees at companies with more than 500 employees but fewer than 2,000). This practice is known as co-determination.

#### Israel
**Non-Controlled Banks**<u>:</u> Director elections at Non-Controlled banks are overseen by the Supervisor of the Banks and nominees for election as "other" (non-external) directors and external directors (under Companies Law and Directive 301) are put forward by an external and independent committee. As such,

➣ Putnam's guidelines regarding board Nominating Committees will not apply

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| | |
|:---|:---|
| ➣ | Putnam will vote on a **case-by-case** on nominees when there are more nominees than seats available.  |

---

#### Italy
Election of directors and statutory auditors:

---

| | |
|:---|:---|
| ➣ | Putnam will apply the director guidelines to the majority shareholder supported list and vote accordingly (**for** or **against**) if multiple lists of director candidates are presented. If there is no majority shareholder supported slate of nominees, Putnam will support the shareholder slate of nominees that is recommended for approval by Putnam's service provider.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote **against** the entire list of director nominees if the list is bundled as one proposal and if Putnam would otherwise be voting against any one director nominee.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will generally vote **for** the majority shareholder supported list of statutory auditor nominees.  |

---

Note: Pursuant to Italian law, directors and statutory auditors are elected through a slate voting system whereby candidates are presented in lists submitted by shareholders representing a minimum percentage of share capital.

---

| | |
|:---|:---|
| ➣ | Putnam will withhold votes from any director not identified in the proxy materials. (Example: Co-opted director nominees.)  |

---

#### Japan

---

| | |
|:---|:---|
| ➣ | For companies that have established a U.S.-style corporate governance structure, Putnam will **withhold votes** from the entire board of directors if:  |

---

● the board does not have a majority of outside directors,

------

● the board has not established nominating and compensation committees composed of a majority of outside directors,

● the board has not established an audit committee composed of a majority of independent directors, or

● the board does not have at least two independent directors for companies with a controlling shareholder.

➣ For companies that have established a statutory auditor board structure:

● Putnam will **withhold votes** from the appointment of members of a company's board of statutory auditors if a majority of the members of the board of statutory auditors is not independent.

---

| | |
|:---|:---|
| ➣ | For companies that have established a statutory auditor board structure, Putnam will **withhold votes** from the entire board of directors if:  |

---

● the board does not have at least two outside directors, or

● the board does not have at least two independent directors for companies with a controlling shareholder.

● Putnam will vote **against** any statutory auditor nominee who attends fewer than 75% of board and committee meeting without valid reasons for the absences (i.e., illness, personal emergency, etc.) (Note that Corporate Law requires disclosure of outsiders' attendance but not that of insiders, who are presumed to have no more important time commitments.)

---

| | |
|:---|:---|
| ➣ | For companies that have established an audit committee board structure (one-tier / one committee), Putnam will **withhold votes** from the entire board of directors if:  |

---

● the board does not have at least two outside directors,

● the board does not have at least two independent directors for companies with a controlling shareholder, or

● the board has not established an audit committee composed of a majority of independent directors

#### Election of Executive Director and Election of Supervisory Director - REIT
REITs have a unique two-tier board structure with generally one or more executive directors and two or more supervisory directors. The number of supervisory directors must be greater than, not equal to, the number of executive directors. Shareholders are asked to vote on both types of directors. Putnam will vote as follows, provided each board of executive / supervisory directors meets legal requirements.

---

| | |
|:---|:---|
| ➣ | Putnam will generally vote <u>for</u> the election of Executive Director  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will generally vote <u>for</u> the election of Supervisory Directors  |

---

<u>Commentary</u>:

#### Definition of outside director and independent director:
The Japanese Companies Act focuses on two director classifications: Insider or Outsider. An outside director is a director who is not a director, executive, executive director, or employee of the company or its parent company, subsidiaries or affiliates. Further, a director, executive, executive director or employee, who have executive responsibilities, of the company or subsidiaries can regain eligibility ten years after his or her resignation, provided certain other requirements are met. An outside director is designated as an "independent" director based on the Tokyo Stock Exchange listing rules. An outside director is "independent" if that person can make decisions completely independent from the managers of the company, its parent, subsidiaries, or affiliates

------

and does not have a material relationship with the company (i.e., major client, trading partner, or other business relationship; familial relationship with current director or executive; etc.).

The guidelines have incorporated these definitions in applying the board independence standards above.

#### Korea
Putnam will **withhold votes** from the entire board of directors if:

● For large companies (i.e., those with assets of at least KRW 2 trillion); the board does not have at least three independent directors or less than a majority of directors are independent directors,

● For small companies (i.e., those with assets of less than KRW 2 trillion), fewer than one-fourth of the directors are independent directors,

● The board has not established a nominating committee with at least half of the members being outside directors, or

● the board has not established an audit committee composed of at least three members and in which at least two-thirds of its members are independent directors.

<u>Commentary</u>: For purposes of these guidelines, an "outside director" is a director who is independent from the management or controlling shareholders of the company and holds no interests that might impair performing his or her duties impartially from the company, management or controlling shareholder. In determining whether a director is an outside director, Putnam will also apply the standards included in Article 382 of the Korean Commercial Act*,* i.e., no employment relationship with the company for a period of two years before serving on the committee, no director or employment relationship with the company's largest shareholder, etc.) and may consider other business relationships that would affect the independence of an outside director.

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| | |
|:---|:---|
| ➣ | Putnam will generally vote **for** proposals to amend the Executive Officer Retirement Allowance Policy unless the recipients of the grants include non-executives; the proposal would have a negative impact on shareholders, or the proposal appear to be outside of normal market practice, in which case Putnam will vote **against**.  |

---

#### Malaysia

---

| | |
|:---|:---|
| ➣ | Putnam will vote <u>against</u> the entire board of directors if:  |

---

● less than 50% of the directors are independent directors, or less than a majority of the directors are independent directors for large companies,

● the board has not established an audit committee with all members being independent directors, including the committee chair,

● the board has not established a nominating committee with all members being non-executive directors, a majority of whom are independent, including the committee chair; the board chair should not serve as a member of the nomination committee, or

● the board has not established a compensation committee with all members being non-executive directors, a majority of whom are independent; the board chair should not serve as a member of the remuneration committee.

#### Nordic Markets – Finland, Norway, Sweden

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| | |
|:---|:---|
| ➣ | Putnam will vote <u>against</u> the entire board of directors if:  |

---

#### Board Independence:

------

● The board does not have a majority of directors independent from the company and management. (Sweden, Finland, Norway)

● The board does not have at least two directors independent from the company and its major shareholders holding > 10% of the Company's share capital. (Sweden, Finland, Norway)

● An executive director is a member of the board. (Norway)

#### Audit Committee:
● The audit committee does not consist of a majority of directors independent from the company and management. (Sweden, Finland)

● The audit committee does not have at least one director independent from the company and its major shareholders holding > 10% of the Company's share capital. (Sweden, Finland)

● The audit committee is not majority independent. (Norway)

#### Remuneration Committee:
● The remuneration committee is not fully independent of the company, excluding the chair. (Sweden)

● The remuneration committee is not majority independent of the company. (Finland)

● The remuneration committee does not consist fully of non-executive directors. (Finland)

● The remuneration committee is not fully independent of management (Norway)

● The remuneration committee is not majority independent from the company and its major shareholders holding > 50% of the Company's share capital. (Sweden, Finland, Norway)

#### Board Nomination Committee:
● The nomination committee does not consist of a majority of directors independent from the company. (Finland)

● An executive is a member of the nomination committee. (Finland)

**External Nomination Committee:** Vote against the establishment of the nomination committee and its guidelines when:

● The external committee is not majority independent of the company and management. (Sweden)

● The external committee does not have at least one director not affiliated to largest shareholder on the committee. (Sweden)

● The external committee does not meet best practice based on ISS analysis. (Finland)

● The external committee is not majority independent of the board and management. (Norway)

● The external committee has more than one member of the board of the directors sitting on the committee. (Norway)

● There is insufficient disclosure provided for new nominees (Norway)

● An executive is a member of the committee. (Norway)

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#### Russia

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| | |
|:---|:---|
| ➣ | Putnam will vote on a <u>case-by-case basis</u> for the election of nominees to the board of directors.  |

---

<u>Commentary</u>: In Russia, director elections are handled through a cumulative voting process. Cumulative voting allows shareholders to cast all of their votes for a single nominee for the board of directors, or to allocate their votes among nominees in any other way. In contrast, in "regular" voting, shareholders may not give more than one vote per share to any single nominee. Cumulative voting can help to strengthen the ability of minority shareholders to elect a director.

#### Singapore

---

| | |
|:---|:---|
| ➣ | Putnam will vote **against** from the entire board of directors if  |

---

● in the case of a board with an independent director serving as chair, fewer than one-third of the directors are independent directors; or, in the case of a board not chaired by an independent director, fewer than half of the directors are independent directors,

● the board has not established <u>audit</u> and <u>compensation</u> committees, each with an independent director serving as chair, with at least a majority of the members being independent directors, and with all of the directors being non-executive directors, or

● the board has not established a <u>nominating</u> committee, with an independent director serving as chair, and with at least a majority of the members being independent directors.

#### United Kingdom, Ireland
<u>Commentary</u>:

**Application of guidelines**: Although the Combined Code has adopted the "comply and explain" approach to corporate governance, Putnam believes that the guidelines discussed above with respect to board independence standards are integral to the protection of investors in UK companies. As a result, these guidelines will be applied in a prescriptive manner.

**Definition of independence**: For the purposes of these guidelines, a non-executive director shall be considered independent if the director meets the independence standards in section A.3.1 of the Combined Code (i.e., no material business or employment relationships with the company, no remuneration from the company for non-board services, no close family ties with senior employees or directors of the company, etc.), except that Putnam does not view service on the board for more than nine years as affecting a director's independence.

**Smaller companies**: A smaller company is one that is below the FTSE 350 throughout the year immediately prior to the reporting year.

---

| | |
|:---|:---|
| ➣ | Putnam will **withhold votes** from the entire board of directors if:  |

---

● the board, excluding the Non-Executive Chair, is not comprised of at least half independent non-executive directors,

● the board has not established a Nomination committee composed of a majority of independent non-executive directors, excluding the Non-Executive Chair, or

● the board has not established a Compensation committee composed of (1) at least three directors (in the case of smaller companies, as defined by the Combined Code, two directors) and (2) solely of independent non-executive directors. The company chair may be a member of, but not chair, the Committee provided he or she was considered independent on appointment as chair, or

------

● The board has not established an Audit Committee composed of, (1) at least three directors (in the case of smaller companies as defined by the Combined Code, two directors) and (2) solely of independent non-executive directors. The board chair may not serve on the audit committee of large or small companies.

#### All other jurisdictions

---

| | |
|:---|:---|
| ➣ | In the absence of jurisdiction specific guidelines, Putnam will vote as follows for boards/supervisory boards:  |

---

o Putnam will vote **against** the entire board of directors if

∎ fewer than a majority of the directors are independent directors, or

∎ the board has not established audit, nominating and compensation committees each composed of a majority of independent directors.

#### Additional Commentary regarding all Non-US jurisdictions:
Whether a director is considered "independent" or not will be determined by reference to local corporate law or listing standards.

Some jurisdictions may legally require or allow companies to have a certain number of employee representatives, employee shareholder representatives (e.g., France) and/or shareholder representatives on their board. Putnam generally does not consider these representatives independent. The presence of employee representatives or employee shareholder representatives on the board and key committees is generally legally mandated. In most markets, shareholders do not have the ability to vote on the election of employee representatives or employee shareholder representatives. In some markets, significant shareholders have a legal right to nominate shareholder representatives. Shareholders are required to approve the election of shareholder representatives to the board. Unlike employee representatives, there are no legal requirements regarding the presence of shareholder representatives on the board or its committees.

---

| | |
|:---|:---|
| ➣ | Putnam will **not include** employee or employee shareholder representatives in the independence calculation of the board or key committees, nor in the calculation of the size of the board.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will **include** shareholder representatives in the independence calculation of the board and key committees, and in the calculation of the size of the board.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will generally support shareholder or employee representatives if included in the agenda Putnam will vote on a **case-by-case** basis when there are more candidates than seats. Additionally, Putnam will vote **against** such nominees when there is insufficient information disclosed.  |

---

➣ Putnam Investments' policies regarding the provision of professional services and transactional relationship with regard to directors will apply.

---

| | |
|:---|:---|
| ➣ | Putnam will vote **for** independent nominees for alternate director, unless such nominees do not meet Putnam's individual director standards.  |

---

#### Shareholder nominated directors/self-nominated directors

---

| | |
|:---|:---|
| ➣ | Putnam will vote <u>against</u> shareholder nominees if Putnam supports the board of directors.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote on a <u>case-by case</u> basis if Putnam will be voting against the current board.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote on a case-by-case basis if the proposal regarding a self-nominated/shareholder nominated director nominee would add an additional seat to the board if the nominee is approved.  |

---

#### Other Business Matters

------

#### Japan
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>A. Article Amendments</u> 

---

| | |
|:---|:---|
| ➣ | The Japanese Companies Act gives companies the option to adopt a U.S.-Style corporate structure (i.e., a board of directors and audit, nominating, and compensation committees). Putnam will vote **for** proposals to amend a company's articles of incorporation to adopt the U.S.-Style "Board with Committees" structure. However, the independence of the outside directors is critical to effective corporate governance under this new system. Putnam will, therefore, scrutinize the backgrounds of the outside director nominees at such companies, and will vote **against** the amendment where Putnam believes the board lacks the necessary level of independence from the company or a substantial shareholder.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote on a **case-by-case** basis on granting the board the authority to repurchase shares at its discretion.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote **against** amendments to delete a requirement directing the company to reduce authorized capital by the number of treasury shares cancelled. If issued share capital decreases while authorized capital remains unchanged, then the company will have greater leeway to issue new shares (for example as a private placement or a takeover defense).  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote **against** proposals to authorize appointment of special directors. Under the new Corporate Law, companies are allowed to appoint, from among their directors, "special directors" who will be authorized to make decisions regarding the purchase or sale of important assets and major borrowing or lending, on condition that the board has at least six directors, including at least one non-executive director. At least three special directors must participate in the decision-making process and decisions shall be made by a majority vote of the special directors. However, the law does not require any of the special directors to be non-executives, so in effect companies may use this mechanism to bypass outsiders.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will generally vote **for** proposals to create new class of shares or to conduct a share consolidation of outstanding shares to squeeze out minority shareholders.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote **against** proposals seeking to enable companies to establish specific rules governing the exercise of shareholder rights. (Note: Such as, shareholders' right to submit shareholder proposals or call special meetings.)  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>B. Compensation Related Matters</u>

---

| | |
|:---|:---|
| ➣ | Putnam will vote **against** option plans which allow the grant of options to suppliers, customers, and other outsiders.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote **against** stock option grants to independent internal statutory auditors. The granting of stock options to internal auditors, at the discretion of the directors, can compromise the independence of the auditors and provide incentives to ignore accounting problems, which could affect the stock price over the long term.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote **against** the payment of retirement bonuses to directors and statutory auditors when one or more of the individuals to whom the grants are being proposed has not served in an executive capacity for the company. Putnam will also vote **against** payment of retirement bonuses to any directors or statutory auditors who have been designated by the company as independent. Retirement bonus proposals are all-or-nothing, meaning that split votes against individual payments cannot be made. If any one individual does not meet Putnam's criteria, Putnam will vote **against** the entire bundled item.  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>C. Other Business Matters</u>

---

| | |
|:---|:---|
| ➣ | Putnam votes **for** mergers by absorptions of wholly-owned subsidiaries by their parent companies. These deals do not require the issuance of shares, and do not result in any dilution or new obligations for shareholders of the parent company. These transactions are routine.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote **for** the acquisition if it is between parent and wholly-owned subsidiary.  |

---

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---

| | |
|:---|:---|
| ➣ | Putnam will vote **for** the formation of a holding company, if routine. Holding companies are once again legal in Japan and a number of companies, large and small, have sought approval to adopt a holding company structure. Most of the proposals are intended to help clarify operational authority for the different business areas in which the company is engaged and promote effective allocation of corporate resources. As most of the reorganization proposals do not entail any share issuances or any change in shareholders' ultimate ownership interest in the operating units, Putnam will treat most such proposals as routine.  |

---

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| | |
|:---|:---|
| ➣ | Putnam will vote **against** proposals that authorize the board to vary the AGM record date.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote **for** proposals to abolish the retirement bonus system  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote **for** board-approved director/officer indemnification proposals  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote on a **case-by-case** basis on private placements (Third-party share issuances). Where Putnam views the share issuance necessary to avoid bankruptcy or to put the company back on solid financial footing, Putnam will generally vote **for**. When a private placement allows a particular shareholder to obtain a controlling stake in the company at a discount to market prices, or where the private placement otherwise disadvantages ordinary shareholders, Putnam will vote **against**.  |

---

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| | |
|:---|:---|
| ➣ | Putnam will generally vote **against** shareholder rights plans (poison pills). However, if all of the following criteria are met, Putnam will evaluate such poison pills on a **case-by-case** basis:  |

---

1) The poison pill must have a duration of no more than three years.

2) The trigger threshold must be no less than 20 percent of issued capital. 

3) The company must have no other types of takeover defenses in place.

4) The company must establish a committee to evaluate any takeover offers, and the members of that committee must all meet Putnam's' definition of independence.

5) At least 20 percent, and no fewer than two, of the directors must meet Putnam's definition of independence. These independent directors must also meet Putnam's guidelines on board meeting attendance. 

6) The directors must stand for reelection on an annual basis.

7) The company must release its proxy materials no less than three weeks before the meeting date.

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| | |
|:---|:---|
| ➣ | Putnam will vote **against** proposals to allow the board to decide on income allocation without shareholder vote.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote **against** proposals to limit the liability of External Audit Firms ("Accounting Auditors")  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote **against** proposals seeking a reduction in board size that eliminates all vacant seats.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam may generally vote **against** proposals seeking an increase in authorized capital that leaves the company with as little as 25 percent of the authorized capital outstanding (general request). However, such proposals will be evaluated on a company specific basis, taking into consideration such factors as current authorization outstanding, existence (or lack thereof) of preemptive rights and rationale for the increase.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote **for** corporate split agreement and transfer of sales operations to newly created wholly-owned subsidiaries where the transaction is a purely internal one which does not affect shareholders' ownership interests in the various operations. All other proposals will be referred back to Putnam for **case-by-case** review. These reorganizations usually accompany the switch to a holding company structure, but may be used in other contexts.  |

---

#### United Kingdom

------

---

| | |
|:---|:---|
| ➣ | Putnam will not apply the U.S. standard 15% discount cap for employee share purchase schemes at U.K. companies. As such, Putnam will generally vote **for** 'Save-As-You-Earn' schemes in the U.K which allow for no more than a 20% purchase discount, and which otherwise comply with U.K. law and Putnam standards.  |

---

#### France

---

| | |
|:---|:---|
| ➣ | Putnam will not apply the U.S. standard 15% discount cap for employee share purchase schemes at French companies. As such, Putnam will generally vote **for** employee share purchase schemes in France that allow for no greater than a 30% purchase discount, or 40% purchase discount if the vesting period is equal to or greater than ten years, and which otherwise comply with French law and Putnam standards.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will generally vote **for** the Remuneration Report (established based on SRD II), however Putnam will vote on a **case-by-case** basis when Putnam is voting against both the ex-Post Remuneration Report (CEO) and ex-Ante Remuneration Policy (CEO, or proposal including CEO remuneration package) in the current year, and Putnam's third party service provider(s) is recommending a vote against.  |

---

#### Canada

---

| | |
|:---|:---|
| ➣ | Putnam will generally vote **for** Advance Notice provisions for submitting director nominations not less than 30 days prior to the date of the annual meeting. For Advance Notice provisions where the minimum number of days to submit a shareholder nominee is less than 30 days prior to the meeting date, Putnam will vote on a **case-by-case** basis. Putnam will also vote on a **case-by-case** basis if the company's policy expressly prohibits the commencement of a new notice period in the event the originally scheduled meeting is adjourned or postponed**.**  |

---

#### Hong Kong

---

| | |
|:---|:---|
| ➣ | Putnam will vote <u>for</u> proposals to approve a general mandate permitting the company to engage in non-pro rata share issuances of up to 20% of total equity in a year if the company's board meets Putnam's independence standards; if the company's board does not meet Putnam's independence standards, then Putnam will vote against these proposals.  |

---

---

| | |
|:---|:---|
| ➣ | Additionally, Putnam will vote <u>for</u> proposals to approve the reissuance of shares acquired by the company under a share repurchase program, provided that: (1) Putnam supported (or would have supported, in accordance with these guidelines) the share repurchase program, (2) the reissued shares represent no more than 10% of the company's outstanding shares (measured immediately before the reissuance), and (3) the reissued shares are sold for no less than 85% of current market value.  |

---

This policy supplements policies regarding share issuances as stated above under section

III. Voting Shares of Non-US Issuers.

#### Taiwan

---

| | |
|:---|:---|
| ➣ | Putnam will vote **against** proposals to release the board of directors from the non-compete restrictions specified in Taiwanese Company Law. However, Putnam will vote **for** such proposals if the directors are engaged in activities with a wholly- owned subsidiary of the company.  |

---

#### Australia

---

| | |
|:---|:---|
| ➣ | Putnam will vote **for** proposals to carve out, from the general cap on non-pro rata share issues of 15% of total equity in a rolling 12-month period, a particular proposed issue of shares or a particular issue of shares made previously within the 12-month period, if the company's board meets Putnam's independence standards; if the company's board does <u>not</u> meet Putnam's independence standards, then Putnam will vote **against** these proposals.  |

---

---

| | |
|:---|:---|
| ➣ | Putnam will vote **for** proposals renewing partial takeover provisions.  |

---

------

---

| | |
|:---|:---|
| ➣ | Putnam will vote on a **case-by-case** basis on Board-Spill proposals.  |

---

#### Turkey

---

| | |
|:---|:---|
| ➣ | Putnam will vote on a **case-by-case** basis on proposals involving related party transactions. However, Putnam will vote **against** when such proposals do not provide information on the specific transaction(s) to be entered into with the board members or executives.  |

---

------

#### Exhibit B to Proxy Procedures
<u>PUTNAM INVESTMENTS</u> 

<u>PROXY VOTING CONFLICT</u> 

OF INTEREST DISCLOSURE FORM

1. *Company name*:

2. *Date of Meeting:* 

3. *Referral Item(s):* 

4. *Description of Putnam's Business Relationship with Issuer of Proxy which may give rise to a conflict of interest:* 

a. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

5. *Describe procedures used to address any conflict of interest:* 

6. *Describe any contacts from parties outside Putnam Management (other than routine communications from proxy solicitors) with respect to the referral item not otherwise reported in an investment professional's recommendation:* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

CERTIFICATION

The undersigned officer of Putnam Investments certifies that, to the best of his or her knowledge, any recommendation of an investment professional provided under circumstances where a conflict of interest exists was made solely on the investment merits and without regard to any other consideration.

---

| |
|:---|
| Name: |
| Proxy Voting Team |

---

------

#### Exhibit C to Proxy Procedures
<u>PUTNAM INVESTMENTS</u> 

<u>PROXY VOTING CONFLICT</u> 

OF INTEREST DISCLOSURE FORM

1. *Company name*:

2. *Date of Meeting*:

3. *Referral Item(s)*:

4. *Description of Putnam ' s Business Relationship with Issuer of Proxy which may give rise to a conflict of interest:* <u>None</u> 

5. *Describe procedures used to address any conflict of interest*: N/A

6. *Describe any contacts from parties outside Putnam Management (other than routine communications from proxy solicitors) with respect to the referral item not otherwise reported in an investment professional's recommendation*:

None

CERTIFICATION

The undersigned officer of Putnam Investments certifies that, to the best of his or her knowledge, any recommendation of an investment professional provided under circumstances where a conflict of interest exists was made solely on the investment merits and without regard to any other consideration.

---

| |
|:---|
| Name: |
| Proxy Voting Team |

---

------

**Item 28**. **Exhibits**

---

| | |
|:---|:---|
|  (a)(1) | Certificate of Trust dated December 21, 2020 – [filed with initial Registration Statement on Form N-1A ("Initial Registration Statement") on February 17, 2021.](http://www.sec.gov/Archives/edgar/data/1845809/000092881621000211/b_etfcertoftrust.htm) |
|  (a)(2) | Amended and Restated Declaration of Trust dated April 20, 2021 – [Incorporated by reference to Pre-Effective Amendment No. 1 to the Registrant's Registration Statement (No. 333-253222) filed on May 14, 2021.](http://www.sec.gov/Archives/edgar/data/1845809/000092881621000557/b_eftex99a2.htm) |
|  (a)(3) | Amended Schedule A to the Amended and Restated Declaration of Trust dated September 23, 2022 – [Incorporated by reference to Post-Effective Amendment No. 9 to the Registrant's Registration Statement (No. 333-253222) filed on September 28, 2022.](http://www.sec.gov/Archives/edgar/data/1845809/000092881622001051/b_etfex99a3.htm) |
| (b) | Amended and Restated Bylaws dated June 23, 2023 – [Incorporated by reference to Post-Effective Amendment No. 15 to the Registrant's Registration Statement (No. 333-253222) filed on August 24, 2023.](http://www.sec.gov/Archives/edgar/data/1845809/000092881623001253/b_etfex99b2.htm) |
|  (c)(1) | Portions of Agreement and Declaration of Trust Relating to Shareholders' Rights – [Incorporated by reference to Pre-Effective Amendment No. 1 to the Registrant's Registration Statement (No. 333-253222) filed on May 14, 2021.](http://www.sec.gov/Archives/edgar/data/1845809/000092881621000557/c_etfex99c1.htm) |
|  (c)(2) | Portions of Bylaws Relating to Shareholders' Rights – [Incorporated by reference to Post-Effective Amendment No. 15 to the Registrant's Registration Statement (No. 333-253222) filed on August 24, 2023.](http://www.sec.gov/Archives/edgar/data/1845809/000092881623001253/c_etfex99c.htm) |
|  (d)(1) | Assignment and Assumption Agreement between Franklin Advisers, Inc. ("FAV") and Putnam Investment Management, LLC ("PIM") dated July 15, 2024 for Putnam ESG Core Bond ETF, Putnam ESG High Yield ETF and Putnam ESG Ultra Short ETF. – [Incorporated by reference to Post-Effective Amendment No. 22 to the Registrant's Registration Statement (No. 333-253222) filed on December 27, 2024.](http://www.sec.gov/Archives/edgar/data/1845809/000092881624002123/b_etfex99d1.htm) |
|  (d)(2) | [Management Contract with PIM dated January 1, 2024 for Putnam BDC Income ETF, Putnam BioRevolution ETF, Putnam Emerging Markets ex-China ETF, Putnam PanAgora ESG International Equity ETF, Putnam PanAgora ESG Emerging Markets Equity ETF, Putnam ESG Core Bond ETF (assigned to FAV pursuant to (d)(1) above), Putnam ESG High Yield ETF (assigned to FAV pursuant to (d)(1) above) and Putnam ESG Ultra Short ETF (assigned to FAV pursuant to (d)(1) above). Schedule B dated July 1, 2025.](d842776dex99d2.htm) |
|  (d)(3) | [Management Contract with PIM dated January 1, 2024 for Putnam Focused Large Cap Growth ETF, Putnam Focused Large Cap Value ETF, Putnam Sustainable Future ETF and Putnam Sustainable Leaders ETF. Schedule A dated February 14, 2024 and Schedule B dated July 1, 2025.](d842776dex99d3.htm) |
|  (d)(4) | [Management Contract with FAV dated August 1, 2025 for Franklin California Municipal Income ETF, Franklin Massachusetts Municipal Income ETF, Franklin Minnesota Municipal Income ETF, Franklin Municipal High Yield ETF, Franklin Municipal Income ETF, Franklin New Jersey Municipal Income ETF, Franklin New York Municipal Income ETF, Franklin Ohio Municipal Income ETF, Franklin Pennsylvania Municipal Income ETF, and Franklin Short-Term Municipal Income ETF.](d842776dex99d4.htm) |
|  (d)(5) | Sub-Advisory Agreement between PIM and Franklin Templeton Investment Management Limited ("FTIML") dated November 1, 2024. – [Incorporated by reference to Post-Effective Amendment No. 22 to the Registrant's Registration Statement (No. 333-253222) filed on December 27, 2024.](http://www.sec.gov/Archives/edgar/data/81259/000092881624001991/c_pimftimlmod.htm) |
|  (d)(6) | [Sub-Advisory Agreement between FAV and Franklin Templeton Investment Management Limited ("FTIML") dated November 1, 2024. Schedule A amended as of August 1, 2025.](d842776dex99d6.htm) |
|  (d)(7) | Subadvisory Agreement between PIM and FAV dated July 15, 2024 – [Incorporated by reference to Post- Effective Amendment No. 19 to the Registrant's Registration Statement (No. 333-253222) filed on August 27, 2024.](http://www.sec.gov/Archives/edgar/data/1845809/000092881624001264/d_pea19ex99d3.htm) |
|  (d)(8) | [Subadvisory Agreement between FAV and PIM dated July 15, 2024. Schedule A amended as of August 1, 2025.](d842776dex99d8.htm) |
|  (d)(9) | Subadvisory Agreement between PIM and PanAgora Asset Management, Inc. dated January 1, 2024 — [Incorporated by reference to Post-Effective Amendment No. 19 to the Registrant's Registration Statement (No. 333-253222) filed on August 27, 2024.](http://www.sec.gov/Archives/edgar/data/1845809/000092881624001264/e_pea19ex99d4.htm) |
|  (e)(1) | Amended and Restated Distributor's Contract with Franklin Distributors, LLC dated August 2, 2024 – [Incorporated by reference to Post-Effective Amendment No. 22 to the Registrant's Registration Statement (No. 333-253222) filed on December 27, 2024.](http://www.sec.gov/Archives/edgar/data/1845809/000092881624002123/c_etfex99e1.htm) |

---

------

---

| | |
|:---|:---|
|  (e)(2) | [Form of Authorized Participant Agreement.](d842776dex99e2.htm) |
| (f) | Not applicable. |
|  (g)(1) | [Custody Agreement with The Bank of New York Mellon ("BNY") dated June 6, 2025.](d842776dex99g1.htm) |
|  (h)(1) | [Transfer Agency and Service Agreement with BNY dated July 16, 2025.](d842776dex99h1.htm) |
|  (h)(2) | [Sub-Administration and Accounting Agreement with BNY dated July 24, 2025.](d842776dex99h2.htm) |
|  (h)(3)(i) | Form of Indemnification Agreement. – [Incorporated by reference to Post-Effective Amendment No. 22 to the Registrant's Registration Statement (No. 333-253222) filed on December 27, 2024.](http://www.sec.gov/Archives/edgar/data/1845809/000092881624002123/d_etfex99h39i.htm) |
|  (h)(4)(ii) | Schedule of Indemnification Agreements conforming in all material respects to the Form of Indemnification Agreement filed as Exhibit (h)(39)(i) but which have not been filed as exhibits to the Registrant's Registration Statement in reliance on Rule 483(d)(2) under the Securities Act of 1933, as amended – [Incorporated by reference to Post-Effective Amendment No. 19 to the Registrant's Registration Statement (No. 333-253222) filed on August 27, 2024.](http://www.sec.gov/Archives/edgar/data/1845809/000092881624001264/j_pea19ex99h39ii.htm) |
|  (h)(5) | Expense Limitation Agreement with PIM and FAV dated July 1, 2024. – [Incorporated by reference to Post- Effective Amendment No. 22 to the Registrant's Registration Statement (No. 333-253222) filed on December 27, 2024.](http://www.sec.gov/Archives/edgar/data/868648/000092881624001677/a_exlmtpifamod1.htm) |
|  (h)(6) | Subcontract for Fund Administrative Services between FAV and Franklin Templeton Services, LLC dated July 15, 2024 – [Incorporated by reference to Post-Effective Amendment No. 22 to the Registrant's Registration Statement (No. 333-253222) filed on December 27, 2024.](http://www.sec.gov/Archives/edgar/data/1845809/000092881624002123/e_etfex99h41.htm) |
|  (h)(7) | Subcontract for Fund Administrative Services between PIM and Franklin Templeton Services, LLC dated July 15, 2024 – [Incorporated by reference to Post-Effective Amendment No. 22 to the Registrant's Registration Statement (No. 333-253222) filed on December 27, 2024.](http://www.sec.gov/Archives/edgar/data/1845809/000092881624002123/f_etfex99h42.htm) |
|  (i)(1) | Opinion of Ropes & Gray LLP with respect to Putnam ESG Core Bond ETF, Putnam ESG High Yield ETF, Putnam ESG Ultra Short ETF, Putnam PanAgora ESG Emerging Markets Equity ETF, and Putnam PanAgora ESG International Equity ETF – [Incorporated by reference to Post-Effective Amendment No. 14 to the Registrant's Registration Statement (No. 333-253222) filed on January 18, 2023.](http://www.sec.gov/Archives/edgar/data/1845809/000092881623000041/h_esgetfex99i.htm) |
|  (i)(2) | Opinion of Ropes & Gray LLP with respect to Franklin California Municipal Income ETF, Franklin Massachusetts Municipal Income ETF, Franklin Minnesota Municipal Income ETF, Franklin Municipal High Yield ETF, Franklin Municipal Income ETF, Franklin New Jersey Municipal Income ETF, Franklin New York Municipal Income ETF, Franklin Ohio Municipal Income ETF, Franklin Pennsylvania Municipal Income ETF, and Franklin Short-Term Municipal Income ETF—to be filed by amendment. |
|  (j)(1) | [Consent of Independent Registered Public Accounting Firm for Putnam BDC Income ETF, Putnam BioRevolution<sup>™</sup> ETF, Putnam Emerging Markets ex-China ETF, Putnam ESG Core Bond ETF, Putnam ESG High Yield ETF, Putnam ESG Ultra Short ETF, Putnam PanAgora ESG Emerging Markets Equity ETF, and Putnam PanAgora ESG International Equity ETF — PricewaterhouseCoopers LLP.](d842776dex99j1.htm) |
| (k) | Not applicable. |
| (l) | Investment Letter from Putnam Investments, LLC to the Registrant – [Incorporated by reference to Pre- Effective Amendment No. 1 to the Registrant's Registration Statement (No. 333-253222) filed on May 14, 2021.](http://www.sec.gov/Archives/edgar/data/1845809/000092881621000557/o_etfex99l.htm) |
| (m) | 12b-1 Distribution Plan and Agreement dated April 20, 2021 – [Incorporated by reference to Pre-Effective Amendment No. 1 to the Registrant's Registration Statement (No. 333-253222) filed on May 14, 2021.](http://www.sec.gov/Archives/edgar/data/1845809/000092881621000557/p_etfex99m.htm) |
| (n) | Not applicable. |
|  (p)(1) | The Putnam Funds Code of Ethics dated June 28, 2024 – [Incorporated by reference to Post-Effective Amendment No. 19 to the Registrant's Registration Statement (No. 333-253222) filed on August 27, 2024.](http://www.sec.gov/Archives/edgar/data/1845809/000092881624001264/o_pea19ex99p1.htm) |
|  (p)(2) | Franklin Templeton Personal Investments and Insider Trading Policy dated March 4, 2024 – [Incorporated by reference to Post-Effective Amendment No. 19 to the Registrant's Registration Statement (No. 333-253222) filed on August 27, 2024.](http://www.sec.gov/Archives/edgar/data/1845809/000092881624001264/p_pea19ex99p2.htm) |
|  (p)(3) | [PanAgora Asset Management, Inc. Code of Ethics dated January 1, 2025.](d842776dex99p3.htm) |

---

#### Item 29. Persons Controlled by or Under Common Control with the Registrant
None

------

#### Item 30. Indemnification
Reference is made to Article VII, sections 7.5 through 7.7, of the Registrant's Amended and Restated Agreement and Declaration of Trust. In addition, the Registrant maintains a trustees and officers liability insurance policy under which the Registrant and its trustees and officers are named insureds. Certain service providers to the Registrant also have contractually agreed to indemnify and hold harmless the trustees against liability arising in connection with the service provider's performance of services under the relevant agreement.

The Registrant has also agreed to contractually indemnify each Trustee. The agreement between the Registrant and each Trustee, in addition to delineating certain procedural aspects relating to indemnification and advancement of expenses to the fullest extent permitted by the Registrant's Amended and Restated Agreement and Declaration of Trust and Bylaws and the laws of state of Delaware, the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940, as now or hereafter in force, provides that the Registrant and each series of the Registrant shall indemnify and hold harmless the Trustee against any and all expenses actually and reasonably incurred by the Trustee in any proceeding arising out of or in connection with the Trustee's service to the Registrant, unless the Trustee has been adjudicated in a final adjudication on the merits to have engaged in certain disabling conduct.

Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to trustees, officers and controlling persons of the Registrant by the Registrant pursuant to the Registrant's organizational instruments or otherwise, the Registrant is aware that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act of 1933, as amended, and, therefore, is unenforceable.

#### Item 31. Business and Other Connections of the Investment Adviser
The officers and directors of Franklin Advisers, Inc. ("Franklin Advisers") also serve as officers and/or directors for (1) Franklin Advisers' corporate parent, Franklin Resources, Inc. and/or (2) other investment companies in Franklin Templeton Investments. For additional information please see Part B of this Registration Statement and Schedules A and D of Part 1A of Form ADV of Franklin Advisers (SEC File 801-26292), incorporated herein by reference, which sets forth the officers and directors of Franklin Advisers and information as to any business, profession, vocation or employment of a substantial nature engaged in by those officers and directors during the past two years.

Except as set forth below, the directors and officers of each of Putnam Investment Management, LLC ("Putnam Management") and Franklin Templeton Investment Management Limited ("FTIML") have been engaged during the past two fiscal years in no business, profession, vocation or employment of a substantial nature other than as directors or officers of Putnam Management, FTIML, or certain of Putnam Management's corporate affiliates. Certain officers of Putnam Management serve as officers of some or all of the Putnam funds. Information as to the business, profession, vocation or employment of a substantial nature of Putnam Management and the directors and officers of Putnam Management within the past two fiscal years is included in the Form ADV filed by Putnam Management (File No. 801-7974), which is incorporated herein by reference. Information as to the business, profession, vocation or employment of a substantial nature of FTIML and the directors and officers of FTIML within the past two fiscal years is included in the Form ADV filed by FTIML (File No. 801-55170), which is incorporated herein by reference.

---

| | |
|:---|:---|
| **Name and Title** | **Non-Putnam business, profession, vocation or employment** |
| N/A |  |

---

#### Item 32. Principal Underwriters
(a) Franklin Distributors, LLC ("Franklin Distributors"), the distributor of the Registrant, is also a distributor of funds that are series of the following registrants:

Franklin Alternative Strategies Funds

Franklin California Tax-Free Income Fund

Franklin California Tax-Free Trust

Franklin Custodian Funds

Franklin ETF Trust

Franklin Federal Tax-Free Income Fund

Franklin Fund Allocator Series

Franklin Global Trust

Franklin Gold and Precious Metals Fund

------

Franklin High Income Trust

Franklin Investors Securities Trust

Franklin Managed Trust

Franklin Municipal Securities Trust

Franklin Mutual Series Funds

Franklin New York Tax-Free Income Fund

Franklin New York Tax-Free Trust

Franklin Real Estate Securities Trust

Franklin Strategic Series

Franklin Tax-Free Trust

Franklin Templeton ETF Trust

Franklin Templeton Trust

Franklin Templeton Variable Insurance Products Trust

Franklin U.S. Government Money Fund

Franklin Value Investors Trust

Institutional Fiduciary Trust

Templeton Developing Markets Trust

Templeton Funds

Templeton Global Investment Trust

Templeton Global Smaller Companies Fund

Templeton Growth Fund, Inc.

Templeton Income Trust

Templeton Institutional Funds

George Putnam Balanced Fund

Putnam Asset Allocation Funds

Putnam California Tax Exempt Income Fund

Putnam Convertible Securities Fund

Putnam Diversified Income Trust

Putnam ETF Trust

Putnam Focused International Equity Fund

Putnam Funds Trust

Putnam Global Health Care Fund

Putnam Global Income Trust

Putnam High Yield Fund

Putnam Income Fund

Putnam International Equity Fund

Putnam Investment Funds

Putnam Large Cap Value Fund

Putnam Massachusetts Tax Exempt Income Fund

Putnam Minnesota Tax Exempt Income Fund

Putnam Money Market Fund

Putnam Mortgage Securities Fund

Putnam New Jersey Tax Exempt Income Fund

Putnam New York Tax Exempt Income Fund

Putnam Ohio Tax Exempt Income Fund

Putnam Pennsylvania Tax Exempt Income Fund

Putnam Sustainable Leaders Fund

Putnam Target Date Funds

Putnam Tax Exempt Income Fund

Putnam Tax-Free Income Trust

Putnam Variable Trust

Legg Mason ETF Investment Trust

Legg Mason Global Asset Management Trust

Legg Mason Partners Income Trust

Legg Mason Partners Institutional Trust

Legg Mason Partners Investment Trust

------

Legg Mason Partners Money Market Trust

Legg Mason Partners Variable Equity Trust

Legg Mason Partners Variable Income Trust

Western Asset Funds, Inc.

Franklin Distributors is the placement agent for funds that are series of Master Portfolio Trust.

(b) The information required by this Item 32 with respect to each director and officer of Franklin Distributors is listed below:

---

| | | |
|:---|:---|:---|
| NAME AND PRINCIPAL<br> BUSINESS ADDRESS | POSITION AND OFFICES WITH UNDERWRITER –<br>FRANKLIN DISTRIBUTORS | POSITIONS AND OFFICES WITH REGISTRANT |
| Adam Spector | Chief Executive Officer |  |
| 1735 Market Street, Suite 1800 |  |  |
| Philadelphia, PA 19103 |  |  |
| Jeffrey Masom | President |  |
| 100 International Drive |  |  |
| Baltimore, MD 21202 |  |  |
| Kenneth Cieprisz | Vice President and Chief Compliance |  |
| 280 Park Avenue | Officer |  |
| New York, NY 10017 |  |  |
| David Paterson | Chief Financial Officer and Designated |  |
| 47 West 200 South, 2nd Floor | Financial Principal |  |
| Salt Lake City, UT 84101 |  |  |

---

(c) Not applicable.

#### Item 33. Location of Accounts and Records
Persons maintaining physical possession of accounts, books and other documents required to be maintained by Section 31(a) of the Investment Company Act of 1940, as amended, and the Rules promulgated thereunder are the Registrant's Clerk, Michael J. Higgins; the Registrant's investment advisers, Franklin Advisers, Putnam Management and PanAgora Asset Management, Inc ("PanAgora"); the Registrant's principal underwriter, Franklin Distributors; and the Registrant's custodian and transfer agent, The Bank of New York Mellon. The address of the Clerk and Putnam Management is 100 Federal Street, Boston, Massachusetts 02110. PanAgora Asset Management, Inc. is located at One International Place, 24th Floor, Boston, Massachusetts 02110. Franklin Advisers and Franklin Distributors are located at One Franklin Parkway, San Mateo, California 94405-1906. The Bank of New York Mellon is located at 240 Greenwich Street, New York, New York 10286.

#### Item 34. Management Services
Not Applicable

#### Item 35. Undertakings
Not Applicable

------

#### SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended (the "Securities Act"), and the Investment Company Act of 1940, as amended, the Registrant, Putnam ETF Trust, hereby certifies that it meets all of the requirements for effectiveness of this Registration Statement under Rule 485(b) under the Securities Act and has duly caused this Post-Effective Amendment to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Boston, and The Commonwealth of Massachusetts on this 25th day of August, 2025.

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| | |
|:---|:---|
| **PUTNAM ETF TRUST** | **PUTNAM ETF TRUST** |
| By: | /s/ Jonathan S. Horwitz |
|  | Jonathan S. Horwitz |
|  | Executive Vice President, Principal Executive Officer |
|  | and Compliance Liaison |

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Pursuant to the requirements of the Securities Act of 1933, as amended, this Amendment to the Registration Statement has been signed below by the following persons in the capacities and on this 25th day of August, 2025:

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| | |
|:---|:---|
| **Signature** | **Title** |
| /s/ Barbara M. Baumann\* |  |
| Barbara M. Baumann | Chair, Board of Trustees |
| /s/ Robert L. Reynolds\* |  |
| Robert L. Reynolds | President and Trustee |
| /s/ Jonathan S. Horwitz\* | Executive Vice President, Principal Executive |
| Jonathan S. Horwitz | Officer and Compliance Liaison |
| /s/ Michael J. Higgins\* |  |
| Michael J. Higgins | Vice President, Treasurer, and Clerk |
| /s/ Jeffrey W. White\* | Vice President, Principal Financial Officer, Principal |
| Jeffrey W. White | Accounting Officer and Assistant Treasurer |
| /s/ Liaquat Ahamed\* |  |
| Liaquat Ahamed | Trustee |
| /s/ Katinka Domotorffy\* |  |
| Katinka Domotorffy | Trustee |
| /s/ Catharine Bond Hill\* |  |
| Catharine Bond Hill | Trustee |
| /s/ Gregory G. McGreevey\* | Trustee |

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| | |
|:---|:---|
| Gregory G. McGreevey |  |
| /s/ Jennifer Williams Murphy\* |  |
| Jennifer Williams Murphy | Trustee |
| /s/ Marie Pillai\* |  |
| Marie Pillai | Trustee |
| /s/ George Putnam III\* |  |
| George Putnam III | Trustee |
| /s/ Manoj P. Singh\* |  |
| Manoj P. Singh | Trustee |
| /s/ Mona K. Sutphen\* |  |
| Mona K. Sutphen | Trustee |
| /s/ Jane E. Trust\* |  |
| Jane E. Trust | Trustee |

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| | |
|:---|:---|
| \*By: | /s/ Jonathan S. Horwitz |
|  | Jonathan S. Horwitz, as Attorney-in-Fact |

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\* Attorney in Fact, pursuant to Power of Attorney.

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#### EXHIBIT INDEX

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| | |
|:---|:---|
|  (d)(2) | [Management Contract with PIM dated January 1, 2024 for Putnam BDC Income ETF, Putnam BioRevolution ETF, Putnam Emerging Markets ex-China ETF, Putnam PanAgora ESG International Equity ETF, Putnam PanAgora ESG Emerging Markets Equity ETF, Putnam ESG Core Bond ETF (assigned to FAV pursuant to (d)(1)), Putnam ESG High Yield ETF (assigned to FAV pursuant to (d)(1) above) and Putnam ESG Ultra Short ETF (assigned to FAV pursuant to (d)(1)). Schedule B dated July 1, 2025.](d842776dex99d2.htm) |
|  (d)(3) | [Management Contract with PIM dated January 1, 2024 for Putnam Focused Large Cap Growth ETF, Putnam Focused Large Cap Value ETF, Putnam Sustainable Future ETF and Putnam Sustainable Leaders ETF. Schedule A dated February 14, 2024 and Schedule B dated July 1, 2025.](d842776dex99d3.htm) |
|  (d)(4) | [Management Contract with FAV dated August 1, 2025 for Franklin California Municipal Income ETF, Franklin Massachusetts Municipal Income ETF, Franklin Minnesota Municipal Income ETF, Franklin Municipal High Yield ETF, Franklin Municipal Income ETF, Franklin New Jersey Municipal Income ETF, Franklin New York Municipal Income ETF, Franklin Ohio Municipal Income ETF, Franklin Pennsylvania Municipal Income ETF, and Franklin Short-Term Municipal Income ETF.](d842776dex99d4.htm) |
|  (d)(6) | [Sub-Advisory Agreement between FAV and Franklin Templeton Investment Management Limited ("FTIML") dated November 1, 2024. Schedule A amended as of August 1, 2025.](d842776dex99d6.htm) |
|  (d)(8) | [Subadvisory Agreement between FAV and PIM dated July 15, 2024. Schedule A amended as of August 1, 2025.](d842776dex99d8.htm) |
|  (e)(2) | [Form of Authorized Participant Agreement.](d842776dex99e2.htm) |
|  (g)(1) | [Custody Agreement with The Bank of New York Mellon ("BNY") dated June 6, 2025.](d842776dex99g1.htm) |
|  (h)(1) | [Transfer Agency and Service Agreement with BNY dated July 16, 2025.](d842776dex99h1.htm) |
|  (h)(2) | [Sub-Administration and Accounting Agreement with BNY dated July 24, 2025.](d842776dex99h2.htm) |
|  (j)(1) | [Consent of Independent Registered Public Accounting Firm for Putnam BDC Income ETF, Putnam BioRevolution<sup>™</sup> ETF, Putnam Emerging Markets ex-China ETF, Putnam ESG Core Bond ETF, Putnam ESG High Yield ETF, Putnam ESG Ultra Short ETF, Putnam PanAgora ESG Emerging Markets Equity ETF, and Putnam PanAgora ESG International Equity ETF - PricewaterhouseCoopers LLP.](d842776dex99j1.htm) |
|  (p)(3) | [PanAgora Asset Management, Inc. Code of Ethics dated January 1, 2025.](d842776dex99p3.htm) |

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## Ex-99.(D)(2)

**PUTNAM ETF TRUST** 

**MANAGEMENT CONTRACT** 

This Management Contract (the "Contract") is dated as of January 1, 2024 between PUTNAM ETF TRUST, a Delaware statutory trust (the "Fund"), and PUTNAM INVESTMENT MANAGEMENT, LLC, a Delaware limited liability company (the "Manager").

In consideration of the mutual covenants herein contained, it is agreed as follows:

1. SERVICES TO BE RENDERED BY MANAGER TO FUND.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Manager, at its expense, will furnish continuously an investment program for the Fund or, in the case of a Fund that has divided its shares into two or more series under Section 18(f)(2) of the Investment Company Act of 1940, as amended (the "1940 Act"), each series of the Fund identified from time to time on <u>Schedule A</u> to this Contract (each reference in this Contract to "a Fund" or to "the Fund" is also deemed to be a reference to any existing series of the Fund, as appropriate in the particular context), will determine what investments will be purchased, held, sold or exchanged by the Fund and what portion, if any, of the assets of the Fund will be held uninvested and will, on behalf of the Fund, make changes in such investments. Subject always to the control of the Trustees of the Fund and except for the functions carried out by such officers of the Fund and persons assisting them as may be determined from time to time by the Trustees, the Manager will also manage, supervise and conduct the other affairs and business of the Fund and matters incidental thereto. In the performance of its duties, the Manager will comply with the provisions of the Agreement and Declaration of Trust and By-Laws of the Fund and the stated investment objectives, policies and restrictions of the Fund, will use its best efforts to safeguard and promote the welfare of the Fund and to comply with other policies which the Trustees may from time to time determine.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Manager, at its expense, except as such expense is paid by the Fund as provided in Section 1(e), will furnish (1) all necessary investment and management facilities, including salaries of personnel, required for it to execute its duties faithfully; (2) suitable office space for the Fund; and (3) administrative facilities, including bookkeeping, clerical personnel and equipment necessary for the efficient conduct of the affairs of the Fund, including determination of the net asset value of the Fund, but excluding shareholder accounting services. The Manager will pay the compensation, if any, of the officers of the Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Manager, at its expense, will place all orders for the purchase and sale of portfolio investments for the Fund's account with brokers or dealers selected by the Manager. In the selection of such brokers or dealers and the placing of such orders, the Manager will use its best efforts to obtain for the Fund the most favorable price and execution available, except to the extent it may be permitted to pay higher brokerage commissions for brokerage and research services as described below. In using its best efforts to obtain for the Fund the most favorable price and execution available, the Manager, bearing in mind the Fund's best interests at all times, will consider all factors it deems relevant, including by way of illustration, price, the size of the transaction, the nature of the market for the security, the amount of the commission, the timing

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Manager will vote all proxies solicited by or with respect to issuers of securities in which assets of a Fund may be invested from time to time in accordance with its proxy voting policy in effect from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) In consideration of the fees payable by the Fund to the Manager pursuant to Section 3, the Manager will also pay all expenses incurred by the Fund, or reimburse the Fund for, all of the Fund's organizational and other operating expenses, excluding only (i) interest and taxes (including, but not limited to, income, excise, transfer and withholding taxes); (ii) expenses of the Fund incurred with respect to the acquisition and disposition of portfolio securities, commodities or other financial instruments and the execution of portfolio transactions, including brokerage commissions; (iii) expenses incurred in connection with any distribution plan adopted by the Fund in compliance with Rule 12b-1 under the 1940 Act, including distribution fees; (iv) expenses of printing and mailing proxy materials to shareholders of the Fund; (v) all other expenses incidental to holding meetings of the Fund's shareholders, including proxy solicitations therefor; (vi) litigation expenses (including, but not limited to, any indemnification obligation, attorneys' fees, expenses, costs, judgments, amounts paid in settlement, fines, penalties, fees of expert witnesses, document production fees, and all other liabilities whatsoever incurred or paid by the Fund or a person indemnified by the Fund); (vii) the fee payable to the Manager hereunder; (viii) any extraordinary expenses (which, for the avoidance of doubt, do not include expenses related to the organization of any subsidiary for a Fund or the ongoing corporate expenses of maintaining such subsidiary) and (ix) acquired fund fees and expenses. The Manager shall promptly inform the Trustees of any expenses, or category of expenses, determined to be "extraordinary expenses" for purposes of this Section 1(e).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Subject to the prior approval of a majority of the Trustees, including a majority of the Trustees who are not "interested persons" and, to the extent required by the 1940 Act and the rules and regulations under the 1940 Act, subject to any applicable guidance or interpretation of the Securities and Exchange Commission or its staff, by the shareholders of the Fund, the Manager may, from time to time, delegate to a sub-adviser or sub-administrator any of the

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Manager's duties under this Contract, including the management of all or a portion of the assets being managed. In all instances, however, the Manager must oversee the provision of delegated services, the Manager must bear the separate costs of employing any sub-adviser or sub-administrator, and no delegation will relieve the Manager of any of its obligations under this Contract.

2. OTHER AGREEMENTS, ETC.

It is understood that any of the shareholders, Trustees, officers and employees of the Fund may be a shareholder, director, officer or employee of, or be otherwise interested in, the Manager, and in any person controlled by or under common control with the Manager, and that the Manager and any person controlled by or under common control with the Manager may have an interest in the Fund. It is also understood that the Manager and any person controlled by or under common control with the Manager may have advisory, management, service or other contracts with other organizations and persons and may have other interests and business.

3. COMPENSATION TO BE PAID BY THE FUND TO THE MANAGER.

The Fund will pay to the Manager as compensation for the Manager's services rendered, for the facilities furnished and for the expenses borne by the Manager pursuant to paragraphs (a), (b), and (c) of Section 1, a fee, based on the Fund's Average Net Assets, computed and paid monthly at the annual rates set forth on <u>Schedule</u> <u>B</u> attached to this Contract, as from time to time amended. The Fund's "Average Net Assets" means the average of all of the determinations of the Fund's net asset value at the close of business on each business day during each period for which such computation is made. The fee is payable for each month within 15 days after the close of the month.

If the Manager serves for less than the whole of a month, the foregoing compensation will be prorated.

4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.

This Contract will automatically terminate, without the payment of any penalty, in the event of its assignment, provided that no delegation of responsibilities by the Manager pursuant to Section 1(f) will be deemed to constitute an assignment. No provision of this Contract may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought. No amendment of this Contract is effective until approved in a manner consistent with the 1940 Act, the rules and regulations under the 1940 Act and any applicable guidance or interpretation of the Securities and Exchange Commission or its staff.

5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.

This Contract is effective upon its execution and will remain in full force and effect as to a Fund continuously thereafter (unless terminated automatically as set forth in Section 4 or terminated in accordance with the following paragraph) through June 30, 2025, and will continue in effect from year to year thereafter so long as its continuance is approved at least annually by

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(i) the Trustees, or the shareholders by the affirmative vote of a majority of the outstanding shares of the respective Fund, and (ii) a majority of the Trustees who are not interested persons of the Fund or of the Manager in a manner consistent with the 1940 Act, the rules and regulations under the 1940 Act and any applicable guidance or interpretation of the Securities and Exchange Commission or its staff.

Either party hereto may at any time terminate this Contract as to a Fund by not less than 60 days' written notice delivered or mailed by registered mail, postage prepaid, to the other party. Action with respect to a Fund may be taken either (i) by vote of a majority of the Trustees or (ii) by the affirmative vote of a majority of the outstanding shares of the respective Fund.

Termination of this Contract pursuant to this Section 5 will be without the payment of any penalty.

6. CERTAIN DEFINITIONS.

For the purposes of this Contract, the "affirmative vote of a majority of the outstanding shares" of a Fund means the affirmative vote, at a duly called and held meeting of shareholders of the respective Fund, (a) of the holders of 67% or more of the shares of the Fund present (in person or by proxy) and entitled to vote at the meeting, if the holders of more than 50% of the outstanding shares of the Fund entitled to vote at the meeting are present in person or by proxy or (b) of the holders of more than 50% of the outstanding shares of the Fund entitled to vote at the meeting, whichever is less.

For the purposes of this Contract, the terms "affiliated person," "control," "interested person" and "assignment" have their respective meanings defined in the 1940 Act, subject, however, to the rules and regulations under the 1940 Act and any applicable guidance or interpretation of the Securities and Exchange Commission or its staff; the term "approve at least annually" will be construed in a manner consistent with the 1940 Act and the rules and regulations under the 1940 Act and any applicable guidance or interpretation of the Securities and Exchange Commission or its staff; and the term "brokerage and research services" has the meaning given in the Securities Exchange Act of 1934 and the rules and regulations under the Securities Exchange Act of 1934 and under any applicable guidance or interpretation of the Securities and Exchange Commission or its staff.

7. NON-LIABILITY OF MANAGER.

In the absence of willful misfeasance, bad faith or gross negligence on the part of the Manager, or reckless disregard of its obligations and duties hereunder, the Manager shall not be subject to any liability to the Fund or to any shareholder of the Fund for any act or omission in the course of, or connected with, rendering services hereunder.

8. NO THIRD-PARTY BENEFICIARIES.

No shareholder or any person other than the Fund and the Manager is a party to this Contract or shall be entitled to any right or benefit arising under or in respect of this Contract; there are no third-party beneficiaries of this Contract. Without limiting the generality of the foregoing, nothing in this Contract is intended to, or shall be read to, (i) create in any shareholder

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or person other than the Fund in question (including without limitation any shareholder in any Fund) any direct, indirect, derivative, or other rights against the Manager, or (ii) create or give rise to any duty or obligation on the part of the Manager (including without limitation any fiduciary duty) to any shareholder or person other than the Fund, and all of the rights, duties, and obligations referred to in the foregoing clauses (i) and (ii) are hereby expressly excluded from this Contract.

9. LIMITATION OF LIABILITY OF THE TRUSTEES, OFFICERS, AND SHAREHOLDERS.

Notice is hereby given that this instrument is executed on behalf of the Trustees of the Fund as Trustees and not individually and that the obligations of or arising out of this instrument are not binding upon any of the Trustees, officers or shareholders individually but are binding only upon the assets and property of the respective Fund.

*[The remainder of this page is intentionally left blank.]* 

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IN WITNESS WHEREOF, PUTNAM ETF TRUST and PUTNAM INVESTMENT MANAGEMENT, LLC have each caused this instrument to be signed on its behalf by its President or a Vice President thereunto duly authorized, all as of the day and year first above written.

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| | |
|:---|:---|
| PUTNAM ETF TRUST, on behalf of the series listed on <u>Schedule A</u> | PUTNAM ETF TRUST, on behalf of the series listed on <u>Schedule A</u> |
| By: | /s/ Jonathan S. Horwitz |
|  | Jonathan S. Horwitz<br> Executive Vice President, Principal Executive Officer and Compliance Liaison |
| PUTNAM INVESTMENT MANAGEMENT, LLC | PUTNAM INVESTMENT MANAGEMENT, LLC |
| By: | /s/ Stephen J. Tate |
|  | Stephen J. Tate<br> General Counsel and Chief Legal Officer |

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<u>Schedule</u> <u>A</u>

PUTNAM BDC INCOME ETF

PUTNAM BIOREVOLUTION ETF

PUTNAM EMERGING MARKETS EX-CHINA ETF

PUTNAM ESG CORE BOND ETF

PUTNAM ESG HIGH YIELD ETF

PUTNAM ESG ULTRA SHORT ETF

PUTNAM PANAGORA ESG INTERNATIONAL EQUITY ETF

PUTNAM PANAGORA ESG EMERGING MARKETS EQUITY ETF

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<u>Schedule</u> <u>B</u>

(Amended as of July 1, 2025)

PUTNAM BDC INCOME ETF:

Fee:

0.75% of Average Net Assets

PUTNAM BIOREVOLUTION ETF:

Fee:

0.70% of Average Net Assets

PUTNAM EMERGING MARKETS EX-CHINA ETF:

Fee:

0.69% of Average Net Assets (Effective July 1, 2025)

PUTNAM ESG CORE BOND ETF:

Fee:

0.35% of Average Net Assets

PUTNAM ESG HIGH YIELD ETF:

Fee:

0.55% of Average Net Assets

PUTNAM ESG ULTRA SHORT ETF:

Fee:

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0.25% of Average Net Assets

PUTNAM PANAGORA ESG EMERGING MARKETS EQUITY ETF:

Fee:

0.60% of Average Net Assets

PUTNAM PANAGORA ESG INTERNATIONAL EQUITY ETF:

Fee:

0.49% of Average Net Assets

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| | |
|:---|:---|
| PUTNAM ETF TRUST | PUTNAM ETF TRUST |
| By: | /s/ Jonathan S. Horwitz |
|  | Jonathan S. Horwitz<br> Executive Vice President, Principal Executive Officer and Compliance Liaison |
| PUTNAM INVESTMENT MANAGEMENT, LLC | PUTNAM INVESTMENT MANAGEMENT, LLC |
| By: | /s/ Thomas C. Merchant |
|  | Thomas C. Merchant |
|  | Chief Legal Officer |

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## Ex-99.(D)(3)

**PUTNAM ETF TRUST** 

**MANAGEMENT CONTRACT** 

This Management Contract (the "Contract") is dated as of January 1, 2024 between PUTNAM ETF TRUST, a Delaware statutory trust (the "Fund"), and PUTNAM INVESTMENT MANAGEMENT, LLC, a Delaware limited liability company (the "Manager").

In consideration of the mutual covenants herein contained, it is agreed as follows:

1. SERVICES TO BE RENDERED BY MANAGER TO FUND.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Manager, at its expense, will furnish continuously an investment program for the Fund or, in the case of a Fund that has divided its shares into two or more series under Section 18(f)(2) of the Investment Company Act of 1940, as amended (the "1940 Act"), each series of the Fund identified from time to time on <u>Schedule</u> <u>A</u> to this Contract (each reference in this Contract to "a Fund" or to "the Fund" is also deemed to be a reference to any existing series of the Fund, as appropriate in the particular context), will determine what investments will be purchased, held, sold or exchanged by the Fund and what portion, if any, of the assets of the Fund will be held uninvested and will, on behalf of the Fund, make changes in such investments. Subject always to the control of the Trustees of the Fund, the Manager will also manage, supervise and conduct the other affairs and business of the Fund and matters incidental thereto. In the performance of its duties, the Manager will comply with the provisions of the Agreement and Declaration of Trust and By-Laws of the Fund and the stated investment objectives, policies and restrictions of the Fund, will use its best efforts to safeguard and promote the welfare of the Fund and to comply with other policies which the Trustees may from time to time determine.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Manager, at its expense, except as such expense is paid by the Fund as provided in Section 1(e), will furnish (1) all necessary investment and management facilities, including salaries of personnel, required for it to execute its duties faithfully; (2) suitable office space for the Fund; and (3) administrative facilities, including bookkeeping, clerical personnel and equipment necessary for the efficient conduct of the affairs of the Fund, including determination of the net asset value of the Fund, but excluding shareholder accounting services. The Manager will pay the compensation, if any, of the officers of the Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Manager, at its expense, will place all orders for the purchase and sale of portfolio investments for the Fund's account with brokers or dealers selected by the Manager. In the selection of such brokers or dealers and the placing of such orders, the Manager will use its best efforts to obtain for the Fund the most favorable price and execution available, except to the extent it may be permitted to pay higher brokerage commissions for brokerage and research services as described below. In using its best efforts to obtain for the Fund the most favorable price and execution available, the Manager, bearing in mind the Fund's best interests at all times, will consider all factors it deems relevant, including by way of illustration, price, the size of the transaction, the nature of the market for the security, the amount of the commission, the timing of the transaction taking into account market prices and trends, the reputation, experience and financial stability of the broker or dealer involved and the quality of service rendered by the

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Manager will vote all proxies solicited by or with respect to issuers of securities in which assets of a Fund may be invested from time to time in accordance with its proxy voting policy in effect from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) In consideration of the fees payable by the Fund to the Manager pursuant to Section 3, the Manager will also pay all expenses incurred by the Fund, or reimburse the Fund for, all of the Fund's organizational and other operating expenses, excluding only (i) interest and taxes (including, but not limited to, income, excise, transfer and withholding taxes); (ii) expenses of the Fund incurred with respect to the acquisition and disposition of portfolio securities, commodities or other financial instruments and the execution of portfolio transactions, including brokerage commissions; (iii) expenses incurred in connection with any distribution plan adopted by the Fund in compliance with Rule 12b-1 under the 1940 Act, including distribution fees; (iv) expenses of printing and mailing proxy materials to shareholders of the Fund; (v) all other expenses incidental to holding meetings of the Fund's shareholders, including proxy solicitations therefor; (vi) litigation expenses (including, but not limited to, any indemnification obligation, attorneys' fees, expenses, costs, judgments, amounts paid in settlement, fines, penalties, fees of expert witnesses, document production fees, and all other liabilities whatsoever incurred or paid by the Fund or a person indemnified by the Fund); (vii) the fee payable to the Manager hereunder; (viii) any extraordinary expenses (which, for the avoidance of doubt, do not include expenses related to the organization of any subsidiary for a Fund or the ongoing corporate expenses of maintaining such subsidiary) and (ix) acquired fund fees and expenses. The Manager shall promptly inform the Trustees of any expenses, or category of expenses, determined to be "extraordinary expenses" for purposes of this Section 1(e).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Subject to the prior approval of a majority of the Trustees, including a majority of the Trustees who are not "interested persons" and, to the extent required by the 1940 Act and the rules and regulations under the 1940 Act, subject to any applicable guidance or interpretation of the Securities and Exchange Commission or its staff, by the shareholders of the Fund, the Manager may, from time to time, delegate to a sub-adviser or sub-administrator any of the Manager's duties under this Contract, including the management of all or a portion of the assets being managed. In all instances, however, the Manager must oversee the provision of delegated

------

services, the Manager must bear the separate costs of employing any sub-adviser or sub-administrator, and no delegation will relieve the Manager of any of its obligations under this Contract.

2. OTHER AGREEMENTS, ETC.

It is understood that any of the shareholders, Trustees, officers and employees of the Fund may be a shareholder, director, officer or employee of, or be otherwise interested in, the Manager, and in any person controlled by or under common control with the Manager, and that the Manager and any person controlled by or under common control with the Manager may have an interest in the Fund. It is also understood that the Manager and any person controlled by or under common control with the Manager may have advisory, management, service or other contracts with other organizations and persons and may have other interests and business.

3. COMPENSATION TO BE PAID BY THE FUND TO THE MANAGER.

The Fund will pay to the Manager as compensation for the Manager's services rendered, for the facilities furnished and for the expenses borne by the Manager pursuant to paragraphs (a), (b), and (c) of Section 1, a fee, based on the Fund's Average Net Assets, computed and paid monthly at the annual rates set forth on <u>Schedule</u> <u>B</u> attached to this Contract, as from time to time amended. The Fund's "Average Net Assets" means the average of all of the determinations of the Fund's net asset value at the close of business on each business day during each period for which such computation is made. The fee is payable for each month within 15 days after the close of the month.

If the Manager serves for less than the whole of a month, the foregoing compensation will be prorated.

4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.

This Contract will automatically terminate, without the payment of any penalty, in the event of its assignment, provided that no delegation of responsibilities by the Manager pursuant to Section 1(f) will be deemed to constitute an assignment. No provision of this Contract may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought. No amendment of this Contract is effective until approved in a manner consistent with the 1940 Act, the rules and regulations under the 1940 Act and any applicable guidance or interpretation of the Securities and Exchange Commission or its staff.

5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.

This Contract is effective upon its execution and will remain in full force and effect as to a Fund continuously thereafter (unless terminated automatically as set forth in Section 4 or terminated in accordance with the following paragraph) through June 30, 2025, and will continue in effect from year to year thereafter so long as its continuance is approved at least annually by (i) the Trustees, or the shareholders by the affirmative vote of a majority of the outstanding shares of the respective Fund, and (ii) a majority of the Trustees who are not interested persons

------

of the Fund or of the Manager in a manner consistent with the 1940 Act, the rules and regulations under the 1940 Act and any applicable guidance or interpretation of the Securities and Exchange Commission or its staff.

Either party hereto may at any time terminate this Contract as to a Fund by not less than 60 days' written notice delivered or mailed by registered mail, postage prepaid, to the other party. Action with respect to a Fund may be taken either (i) by vote of a majority of the Trustees or (ii) by the affirmative vote of a majority of the outstanding shares of the respective Fund.

Termination of this Contract pursuant to this Section 5 will be without the payment of any penalty.

6. CERTAIN DEFINITIONS.

For the purposes of this Contract, the "affirmative vote of a majority of the outstanding shares" of a Fund means the affirmative vote, at a duly called and held meeting of shareholders of the respective Fund, (a) of the holders of 67% or more of the shares of the Fund present (in person or by proxy) and entitled to vote at the meeting, if the holders of more than 50% of the outstanding shares of the Fund entitled to vote at the meeting are present in person or by proxy or (b) of the holders of more than 50% of the outstanding shares of the Fund entitled to vote at the meeting, whichever is less.

For the purposes of this Contract, the terms "affiliated person," "control," "interested person" and "assignment" have their respective meanings defined in the 1940 Act, subject, however, to the rules and regulations under the 1940 Act and any applicable guidance or interpretation of the Securities and Exchange Commission or its staff; the term "approve at least annually" will be construed in a manner consistent with the 1940 Act and the rules and regulations under the 1940 Act and any applicable guidance or interpretation of the Securities and Exchange Commission or its staff; and the term "brokerage and research services" has the meaning given in the Securities Exchange Act of 1934 and the rules and regulations under the Securities Exchange Act of 1934 and under any applicable guidance or interpretation of the Securities and Exchange Commission or its staff.

7. NON-LIABILITY OF MANAGER.

In the absence of willful misfeasance, bad faith or gross negligence on the part of the Manager, or reckless disregard of its obligations and duties hereunder, the Manager shall not be subject to any liability to the Fund or to any shareholder of the Fund for any act or omission in the course of, or connected with, rendering services hereunder.

8. NO THIRD-PARTY BENEFICIARIES.

No shareholder or any person other than the Fund and the Manager is a party to this Contract or shall be entitled to any right or benefit arising under or in respect of this Contract; there are no third-party beneficiaries of this Contract. Without limiting the generality of the foregoing, nothing in this Contract is intended to, or shall be read to, (i) create in any shareholder or person other than the Fund in question (including without limitation any shareholder in any Fund) any direct, indirect, derivative, or other rights against the Manager, or (ii) create or give

------

rise to any duty or obligation on the part of the Manager (including without limitation any fiduciary duty) to any shareholder or person other than the Fund, and all of the rights, duties, and obligations referred to in the foregoing clauses (i) and (ii) are hereby expressly excluded from this Contract.

9. LIMITATION OF LIABILITY OF THE TRUSTEES, OFFICERS, AND SHAREHOLDERS.

Notice is hereby given that this instrument is executed on behalf of the Trustees of the Fund as Trustees and not individually and that the obligations of or arising out of this instrument are not binding upon any of the Trustees, officers or shareholders individually but are binding only upon the assets and property of the respective Fund.

*[The remainder of this page is intentionally left blank.]* 

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IN WITNESS WHEREOF, PUTNAM ETF TRUST and PUTNAM INVESTMENT MANAGEMENT, LLC have each caused this instrument to be signed on its behalf by its President or a Vice President thereunto duly authorized, all as of the day and year first above written.

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| | |
|:---|:---|
| PUTNAM ETF TRUST, on behalf of the series listed on <u>Schedule A</u> | PUTNAM ETF TRUST, on behalf of the series listed on <u>Schedule A</u> |
| By: | /s/ Jonathan S. Horwitz |
|  | Jonathan S. Horwitz<br> Executive Vice President, Principal Executive Officer and Compliance Liaison |
| PUTNAM INVESTMENT MANAGEMENT, LLC | PUTNAM INVESTMENT MANAGEMENT, LLC |
| By: | /s/ Stephen J. Tate |
|  | Stephen J. Tate<br> General Counsel and Chief Legal Officer |

---

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<u>Schedule</u> <u>A</u>

(Amended as of February 14, 2024)

PUTNAM FOCUSED LARGE CAP GROWTH ETF

PUTNAM FOCUSED LARGE CAP VALUE ETF (Effective February 14, 2024)

PUTNAM SUSTAINABLE FUTURE ETF

PUTNAM SUSTAINABLE LEADERS ETF

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| | |
|:---|:---|
| PUTNAM ETF TRUST | PUTNAM ETF TRUST |
| By: | /s/ Jonathan S. Horwitz |
|  | Jonathan S. Horwitz<br> Executive Vice President, Principal Executive Officer and Compliance Liaison |
| PUTNAM INVESTMENT MANAGEMENT, LLC | PUTNAM INVESTMENT MANAGEMENT, LLC |
| By: | /s/ Stephen J. Tate |
|  | Stephen J. Tate<br> General Counsel and Chief Legal Officer |

---

------

<u>Schedule</u> <u>B</u>

(Amended as of July 1, 2025)

PUTNAM FOCUSED LARGE CAP GROWTH ETF:

Fee:

0.49% of Average Net Assets (Effective July 1, 2025)

PUTNAM FOCUSED LARGE CAP VALUE ETF:

Fee:

0.55% of Average Net Assets

PUTNAM SUSTAINABLE FUTURE ETF:

Fee:

0.64% of Average Net Assets

PUTNAM SUSTAINABLE LEADERS ETF:

Fee:

0.59% of Average Net Assets

---

| | |
|:---|:---|
| PUTNAM ETF TRUST | PUTNAM ETF TRUST |
| By: | /s/ Jonathan S. Horwitz |
|  | Jonathan S. Horwitz<br> Executive Vice President, Principal Executive Officer and Compliance Liaison |
| PUTNAM INVESTMENT MANAGEMENT, LLC | PUTNAM INVESTMENT MANAGEMENT, LLC |
| By: | /s/ Thomas C. Merchant |
|  | Thomas C. Merchant<br> Chief Legal Officer |

---

## Ex-99.(D)(4)

**PUTNAM ETF TRUST** 

**MANAGEMENT CONTRACT** 

This Management Contract (the "Contract") is dated as of August 1, 2025 between PUTNAM ETF TRUST, a Delaware statutory trust (the "Fund"), and FRANKLIN ADVISERS, INC., a corporation organized and existing under the laws of the State of California (the "Manager").

In consideration of the mutual covenants herein contained, it is agreed as follows:

1. SERVICES TO BE RENDERED BY MANAGER TO FUND.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Manager, at its expense, will furnish continuously an investment program for the Fund or, in the case of a Fund that has divided its shares into two or more series under Section 18(f)(2) of the Investment Company Act of 1940, as amended (the "1940 Act"), each series of the Fund identified from time to time on <u>Schedule</u> <u>A</u> to this Contract (each reference in this Contract to "a Fund" or to "the Fund" is also deemed to be a reference to any existing series of the Fund, as appropriate in the particular context), will determine what investments will be purchased, held, sold or exchanged by the Fund and what portion, if any, of the assets of the Fund will be held uninvested and will, on behalf of the Fund, make changes in such investments. Subject always to the control of the Trustees of the Fund, the Manager will also manage, supervise and conduct the other affairs and business of the Fund and matters incidental thereto. In the performance of its duties, the Manager will comply with the provisions of the Agreement and Declaration of Trust and By-Laws of the Fund and the stated investment objectives, policies and restrictions of the Fund, will use its best efforts to safeguard and promote the welfare of the Fund and to comply with other policies which the Trustees may from time to time determine.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Manager, at its expense, except as such expense is paid by the Fund as provided in Section 1(e), will furnish (1) all necessary investment and management facilities, including salaries of personnel, required for it to execute its duties faithfully; (2) suitable office space for the Fund; and (3) administrative facilities, including bookkeeping, clerical personnel and equipment necessary for the efficient conduct of the affairs of the Fund, including determination of the net asset value of the Fund, but excluding shareholder accounting services. The Manager will pay the compensation, if any, of the officers of the Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Manager, at its expense, will place all orders for the purchase and sale of portfolio investments for the Fund's account with brokers or dealers selected by the Manager. In the selection of such brokers or dealers and the placing of such orders, the Manager will use its best efforts to obtain for the Fund the most favorable price and execution available, except to the extent it may be permitted to pay higher brokerage commissions for brokerage and research services as described below. In using its best efforts to obtain for the Fund the most favorable price and execution available, the Manager, bearing in mind the Fund's best interests at all times, will consider all factors it deems relevant, including by way of illustration, price, the size of the transaction, the nature of the market for the security, the amount of the commission, the timing of the transaction taking into account market prices and trends, the reputation, experience and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Manager will vote all proxies solicited by or with respect to issuers of securities in which assets of a Fund may be invested from time to time in accordance with its proxy voting policy in effect from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) In consideration of the fees payable by the Fund to the Manager pursuant to Section 3, the Manager will also pay all expenses incurred by the Fund, or reimburse the Fund for, all of the Fund's organizational and other operating expenses, excluding only (i) interest and taxes (including, but not limited to, income, excise, transfer and withholding taxes); (ii) expenses of the Fund incurred with respect to the acquisition and disposition of portfolio securities, commodities or other financial instruments and the execution of portfolio transactions, including brokerage commissions; (iii) expenses incurred in connection with any distribution plan adopted by the Fund in compliance with Rule 12b-1 under the 1940 Act, including distribution fees; (iv) expenses of printing and mailing proxy materials to shareholders of the Fund; (v) all other expenses incidental to holding meetings of the Fund's shareholders, including proxy solicitations therefor; (vi) litigation expenses (including, but not limited to, any indemnification obligation, attorneys' fees, expenses, costs, judgments, amounts paid in settlement, fines, penalties, fees of expert witnesses, document production fees, and all other liabilities whatsoever incurred or paid by the Fund or a person indemnified by the Fund); (vii) the fee payable to the Manager hereunder; (viii) any extraordinary expenses (which, for the avoidance of doubt, do not include expenses related to the organization of any subsidiary for a Fund or the ongoing corporate expenses of maintaining such subsidiary) and (ix) acquired fund fees and expenses. The Manager shall promptly inform the Trustees of any expenses, or category of expenses, determined to be "extraordinary expenses" for purposes of this Section 1(e).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Subject to the prior approval of a majority of the Trustees, including a majority of the Trustees who are not "interested persons" and, to the extent required by the 1940 Act and the rules and regulations under the 1940 Act, subject to any applicable guidance or interpretation of the Securities and Exchange Commission or its staff, by the shareholders of the Fund, the Manager may, from time to time, delegate to a sub-adviser or sub-administrator any of the Manager's duties under this Contract, including the management of all or a portion of the assets

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being managed. In all instances, however, the Manager must oversee the provision of delegated services, the Manager must bear the separate costs of employing any sub-adviser or sub-administrator, and no delegation will relieve the Manager of any of its obligations under this Contract.

2. OTHER AGREEMENTS, ETC.

It is understood that any of the shareholders, Trustees, officers and employees of the Fund may be a shareholder, director, officer or employee of, or be otherwise interested in, the Manager, and in any person controlled by or under common control with the Manager, and that the Manager and any person controlled by or under common control with the Manager may have an interest in the Fund. It is also understood that the Manager and any person controlled by or under common control with the Manager may have advisory, management, service or other contracts with other organizations and persons and may have other interests and business.

3. COMPENSATION TO BE PAID BY THE FUND TO THE MANAGER.

The Fund will pay to the Manager as compensation for the Manager's services rendered, for the facilities furnished and for the expenses borne by the Manager pursuant to paragraphs (a), (b), and (c) of Section 1, a fee, based on the Fund's Average Net Assets, computed and paid monthly at the annual rates set forth on <u>Schedule</u> <u>B</u> attached to this Contract, as from time to time amended. The Fund's "Average Net Assets" means the average of all of the determinations of the Fund's net asset value at the close of business on each business day during each period for which such computation is made. The fee is payable for each month within 15 days after the close of the month.

If the Manager serves for less than the whole of a month, the foregoing compensation will be prorated.

4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.

This Contract will automatically terminate, without the payment of any penalty, in the event of its assignment, provided that no delegation of responsibilities by the Manager pursuant to Section 1(f) will be deemed to constitute an assignment. No provision of this Contract may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought. No amendment of this Contract is effective until approved in a manner consistent with the 1940 Act, the rules and regulations under the 1940 Act and any applicable guidance or interpretation of the Securities and Exchange Commission or its staff.

5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.

This Contract is effective upon its execution and will remain in full force and effect as to a Fund continuously thereafter (unless terminated automatically as set forth in Section 4 or terminated in accordance with the following paragraph) through June 30, 2027, and will continue in effect from year to year thereafter so long as its continuance is approved at least annually by (i) the Trustees, or the shareholders by the affirmative vote of a majority of the outstanding

------

shares of the respective Fund, and (ii) a majority of the Trustees who are not interested persons of the Fund or of the Manager in a manner consistent with the 1940 Act, the rules and regulations under the 1940 Act and any applicable guidance or interpretation of the Securities and Exchange Commission or its staff.

Either party hereto may at any time terminate this Contract as to a Fund by not less than 60 days' written notice delivered or mailed by registered mail, postage prepaid, to the other party. Action with respect to a Fund may be taken either (i) by vote of a majority of the Trustees or (ii) by the affirmative vote of a majority of the outstanding shares of the respective Fund.

Termination of this Contract pursuant to this Section 5 will be without the payment of any penalty.

6. CERTAIN DEFINITIONS.

For the purposes of this Contract, the "affirmative vote of a majority of the outstanding shares" of a Fund means the affirmative vote, at a duly called and held meeting of shareholders of the respective Fund, (a) of the holders of 67% or more of the shares of the Fund present (in person or by proxy) and entitled to vote at the meeting, if the holders of more than 50% of the outstanding shares of the Fund entitled to vote at the meeting are present in person or by proxy or (b) of the holders of more than 50% of the outstanding shares of the Fund entitled to vote at the meeting, whichever is less.

For the purposes of this Contract, the terms "affiliated person," "control," "interested person" and "assignment" have their respective meanings defined in the 1940 Act, subject, however, to the rules and regulations under the 1940 Act and any applicable guidance or interpretation of the Securities and Exchange Commission or its staff; the term "approve at least annually" will be construed in a manner consistent with the 1940 Act and the rules and regulations under the 1940 Act and any applicable guidance or interpretation of the Securities and Exchange Commission or its staff; and the term "brokerage and research services" has the meaning given in the Securities Exchange Act of 1934 and the rules and regulations under the Securities Exchange Act of 1934 and under any applicable guidance or interpretation of the Securities and Exchange Commission or its staff.

7. NON-LIABILITY OF MANAGER.

In the absence of willful misfeasance, bad faith or gross negligence on the part of the Manager, or reckless disregard of its obligations and duties hereunder, the Manager shall not be subject to any liability to the Fund or to any shareholder of the Fund for any act or omission in the course of, or connected with, rendering services hereunder.

8. NO THIRD-PARTY BENEFICIARIES.

No shareholder or any person other than the Fund and the Manager is a party to this Contract or shall be entitled to any right or benefit arising under or in respect of this Contract; there are no third-party beneficiaries of this Contract. Without limiting the generality of the foregoing, nothing in this Contract is intended to, or shall be read to, (i) create in any shareholder or person other than the Fund in question (including without limitation any shareholder in any

------

Fund) any direct, indirect, derivative, or other rights against the Manager, or (ii) create or give rise to any duty or obligation on the part of the Manager (including without limitation any fiduciary duty) to any shareholder or person other than the Fund, and all of the rights, duties, and obligations referred to in the foregoing clauses (i) and (ii) are hereby expressly excluded from this Contract.

9. LIMITATION OF LIABILITY OF THE TRUSTEES, OFFICERS, AND SHAREHOLDERS.

Notice is hereby given that this instrument is executed on behalf of the Trustees of the Fund as Trustees and not individually and that the obligations of or arising out of this instrument are not binding upon any of the Trustees, officers or shareholders individually but are binding only upon the assets and property of the respective Fund.

*[The remainder of this page is intentionally left blank.]* 

------

IN WITNESS WHEREOF, PUTNAM ETF TRUST and FRANKLIN ADVISERS, INC. have each caused this instrument to be signed on its behalf by its President or a Vice President thereunto duly authorized, all as of the day and year first above written.

---

| | |
|:---|:---|
| PUTNAM ETF TRUST, on behalf of the series listed on <u>Schedule A</u> | PUTNAM ETF TRUST, on behalf of the series listed on <u>Schedule A</u> |
| By: | /s/ Jonathan S. Horwitz |
|  | Jonathan S. Horwitz<br> Executive Vice President, Principal Executive Officer and Compliance Liaison |
| FRANKLIN ADVISERS, INC. | FRANKLIN ADVISERS, INC. |
| By: | /s/ Thomas Merchant |
|  | Thomas Merchant<br> Chief Legal Officer |

---

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<u>Schedule</u> <u>A</u>

FRANKLIN CALIFORNIA MUNICIPAL INCOME ETF

FRANKLIN MASSACHUSETTS MUNICIPAL INCOME ETF

FRANKLIN MINNESOTA MUNICIPAL INCOME ETF

FRANKLIN MUNICIPAL INCOME ETF

FRANKLIN MUNICIPAL HIGH YIELD ETF

FRANKLIN NEW JERSEY MUNICIPAL INCOME ETF

FRANKLIN NEW YORK MUNICIPAL INCOME ETF

FRANKLIN OHIO MUNICIPAL INCOME ETF

FRANKLIN PENNSYLVANIA MUNICIPAL INCOME ETF

FRANKLIN SHORT-TERM MUNICIPAL INCOME ETF

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<u>Schedule</u> <u>B</u>

FRANKLIN CALIFORNIA MUNICIPAL INCOME ETF:

Fee:

0.35% of Average Net Assets

FRANKLIN MASSACHUSETTS MUNICIPAL INCOME ETF:

Fee:

0.35% of Average Net Assets

FRANKLIN MINNESOTA MUNICIPAL INCOME ETF:

Fee:

0.35% of Average Net Assets

FRANKLIN MUNICIPAL INCOME ETF:

Fee:

0.30% of Average Net Assets

FRANKLIN MUNICIPAL HIGH YIELD ETF:

Fee:

0.35% of Average Net Assets

FRANKLIN NEW JERSEY MUNICIPAL INCOME ETF:

Fee:

0.35% of Average Net Assets

FRANKLIN NEW YORK MUNICIPAL INCOME ETF:

Fee:

0.35% of Average Net Assets

FRANKLIN OHIO MUNICIPAL INCOME ETF:

Fee:

0.35% of Average Net Assets

FRANKLIN PENNSYLVANIA MUNICIPAL INCOME ETF:

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Fee:

0.35% of Average Net Assets

FRANKLIN SHORT-TERM MUNICIPAL INCOME ETF:

Fee:

0.20% of Average Net Assets

## Ex-99.(D)(6)

**<u>SUBADVISORY AGREEMENT</u>**

THIS SUBADVISORY AGREEMENT (the "Agreement") is made as of November 1, 2024 by and between FRANKLIN ADVISERS, INC., a corporation organized and existing under the laws of the State of California (hereinafter called "FAV"), and FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED ("FTIML"), a corporation existing under the laws of the United Kingdom.

WHEREAS, FAV and FTIML are each registered as an investment adviser under the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and engaged in the business of supplying investment management services as an independent contractor; and

WHEREAS, FAV has been retained to render investment advisory services to each of the funds listed on Schedule A hereto (together the "Funds" and each, a "Fund"), including the funds that are series of an investment management company registered with the U.S. Securities and Exchange Commission (the "SEC") pursuant to the Investment Company Act of 1940, as amended (the "1940 Act") as shown on Schedule A; and

WHEREAS, Putnam Investments Limited ("PIL"), an affiliate of FTIML, previously provided sub-advisory services with respect to the Funds pursuant to a Sub-Management Contract dated as of January 1, 2024, which contract was assigned to and assumed by FAV with respect to the Funds with effect as of July 15, 2024;

WHEREAS, in connection with the transfer of substantially all of PIL's assets and liabilities to FTIML on or around the date hereof, the parties are entering into this Agreement to provide for the continuation of services by FTIML, as successor to PIL's advisory business; and

WHEREAS, FAV desires to appoint FTIML as investment sub-adviser to provide certain investment advisory and related services to the Funds, and FTIML is willing to serve in such capacity.

NOW, THEREFORE, in consideration of the mutual covenants herein contained, and each of the parties hereto intending to be legally bound, it is agreed as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. FAV hereby retains FTIML and FTIML hereby accepts such engagement, to furnish certain investment advisory and related services with respect to certain assets of the Fund, as more fully set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to the overall policies, direction and review of the Fund's Board of Trustees (the "Board") and to the instructions and supervision of FAV, FTIML will provide certain investment advisory and related services for a portion of the Fund as agreed upon from time to time by FAV and FTIML, including:

(i) managing the investment and reinvestment of that portion of the Fund's portfolio allocated for
investment to it by FAV, if any, from time to time with FTIML determining what

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securities and other property will be purchased, retained or sold with respect to such portion, and placing all purchase and sale orders with respect to such portion;

(ii) providing assistance with purchasing and selling securities and other property for the Fund, including the
placement of orders with broker-dealers selected by FTIML, even if FAV has not delegated investment discretion with respect to such assets; and

(iii) performing research and obtaining and evaluating pertinent economic, statistical, and financial data relevant
to the investment strategies and policies of the Fund, as set forth in the Fund's prospectus and statement of additional information, and sharing such research and data with FAV upon request.

The assets with respect to which FTIML provides the services set forth above are referred to as the "Sub-Advised Portion."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In performing these services, FTIML shall adhere to the Fund's investment goal(s), policies and restrictions as contained in the Fund's current prospectus and statement of additional information, and in the Agreement and Declaration of Trust and Bylaws of the Fund and to the investment guidelines most recently established by FAV (all as may be amended from time to time) and shall comply with the provisions of the 1940 Act and the rules and regulations of the SEC thereunder in all material respects and with the provisions of the United States Internal Revenue Code of 1986, as amended, which are applicable to regulated investment companies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Unless otherwise instructed by FAV or the Board, and subject to the provisions of this Agreement and to any guidelines or limitations specified from time to time by FAV or by the Board, FTIML shall report daily all transactions effected by FTIML on behalf of the Fund to FAV and to other entities as reasonably directed by FAV or the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) FTIML shall provide the Board at least quarterly, in advance of the regular meetings of the Board, a report of its activities hereunder on behalf of the Fund, in such form and detail as requested by the Board. FTIML shall also make one or more of its personnel available to attend such meetings of the Board as the Board may reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) In carrying out its duties hereunder, FTIML shall comply with all reasonable instructions of the Fund, the Board or FAV in connection therewith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. (a) Where applicable based on the services it provides pursuant to Section 1 above, FTIML shall, in the name of the Fund, place or direct the placement of orders for the execution of portfolio transactions in accordance with the Fund's policies with respect thereto and as set forth in the Fund's Registration Statement, as amended from time to time, and under the Securities Act of 1933, as amended, Securities Exchange Act of 1934, as amended (the "1934 Act"), and the 1940 Act. In connection with the placement of orders for the execution of the Sub-Advised Portion's portfolio transactions, FTIML shall create and maintain all necessary brokerage records of the Fund in accordance with all applicable laws, rules and regulations, including but not limited to, records required by Section 31(a) of the 1940 Act. All records shall be the property of the Fund and shall be available for inspection and use by the SEC, the Fund or any person retained by the Fund. Where applicable, such records shall be maintained by FTIML for the period and in the place required by Rule 31a-2 under the 1940 Act.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Where applicable based on the services it provides pursuant to Section 1 above, FTIML shall select brokers and dealers for the execution of the Fund's transactions with respect to the Sub-Advised Portion. In selecting brokers or dealers to execute such orders and subject to any policies and procedures adopted by the Trust's Board, FTIML is expressly authorized to consider the fact that a broker or dealer has furnished statistical, research or other information or services which may enhance FTIML's investment research and portfolio management capability generally. It is further understood in accordance with Section 28(e) of the 1934 Act that FTIML may negotiate with and assign to a broker a commission which may exceed the commission which another broker would have charged for effecting the transaction if FTIML determines in good faith that the amount of commission charged was reasonable in relation to the value of brokerage and/or research services (as defined in Section 28(e)) provided by such broker, viewed in terms either of the Fund or FTIML's overall responsibilities to FTIML's discretionary accounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. It is understood that the services provided by FTIML are not to be deemed exclusive. FAV acknowledges that FTIML may have investment responsibilities, or render investment advice to, or perform other investment advisory services, for individuals or entities, including other investment companies registered pursuant to the 1940 Act ("Clients"), which may invest in the same type of securities as the Fund. FAV agrees that FTIML may give advice or exercise investment responsibility and take such other action with respect to such Clients which may differ from advice given or the timing or nature of action taken with respect to the Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. FTIML agrees to use its best efforts in performing the services to be provided by it pursuant to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. FTIML will treat confidentially and as proprietary information of the Fund all records and other information relative to the Fund and prior, present or potential shareholders, and will not use such records and information for any purpose other than performance of its responsibilities and duties hereunder, except after prior notification to and approval in writing by the Fund, which approval shall not be unreasonably withheld and may not be withheld where FTIML may be exposed to civil or criminal contempt proceedings for failure to comply when requested to divulge such information by duly constituted authorities, or when so requested by the Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. (a) In payment for the investment advisory services to be rendered by FTIML under Section 1(a)(i) hereunder with respect to the Sub-Advised Portion of one or more Funds from time to time, FAV shall pay a monthly fee in U.S. dollars to FTIML calculated daily at the following annual rate for each applicable Fund: 0.25% of the average aggregate net asset value of any assets in equity and asset allocation Sub-Advised Portions and 0.20% per annum of the average net asset value of any assets in fixed income Sub-Advised Portions of the Funds. For the purposes of calculating such fee, the net asset value of the Sub-Advised Portion and the value of the net assets of the Fund shall be determined in the same manner that the Fund uses to compute its net asset value for purposes of pricing purchases and redemptions of its shares, all as set forth more fully in the Fund's then current prospectus and statement of additional information.

With respect to each of Putnam Master Intermediate Income Trust and Putnam Premier Income Trust, FAV will pay to FTIML as compensation for the FTIML's services rendered, a fee, computed and paid quarterly at the annual rate of 0.20% of Average Weekly Assets in a Sub-Advised Portion. "Average Weekly Assets" means the average of the weekly determinations of the difference between the total assets of the Fund (including any assets attributable to leverage

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for investment purposes) attributable to a Sub-Advised Portion and the total liabilities of the Fund (excluding liabilities incurred in connection with leverage for investment purposes) attributable to such Sub-Advised Portion, determined at the close of the last business day of each week, for each week which ends during the quarter. Such fee shall be payable for each quarter within 30 days after the close of such quarter. As used in this Section 6, "leverage for investment purposes" means any incurrence of indebtedness the proceeds of which are to be invested in accordance with the Fund's investment objective.

For purposes of calculating Average Weekly Assets (as defined below), liabilities associated with any instruments or transactions used to leverage the Fund's portfolio for investment purposes (whether or not such instruments or transactions are "covered" within the meaning of the Investment Company Act of 1940 and the rules and regulations thereunder, giving effect to any interpretations of the Securities and Exchange Commission and its staff) are not considered liabilities. For purposes of calculating Average Weekly Assets, the total assets of the Fund will be deemed to include (a) any proceeds from the sale or transfer of an asset (the "Underlying Asset") of the Fund to a counterparty in a reverse repurchase or dollar roll transaction and (b) the value of such Underlying Asset as of the relevant measuring date. "Average Weekly Assets" means the average of the weekly determinations of the difference between the total assets of the Fund (including any assets attributable to leverage for investment purposes) attributable to a Sub-Advised Portion and the total liabilities of the Fund (excluding liabilities incurred in connection with leverage for investment purposes) attributable to such Sub-Advised Portion, determined at the close of the last business day of each week, for each week which ends during the quarter. Such fee shall be payable for each quarter within 30 days after the close of such quarter.

In the event that the FAV's management fee from either of Putnam Master Intermediate Income Trust or Putnam Premier Income Trust is reduced pursuant to the investment management contract between such Fund and FAV because during any Measurement Period (as defined below) the amount of interest payments and fees with respect to indebtedness or other obligation of the Fund incurred for investment leverage purposes, plus additional expenses attributable to any such leverage for investment purposes, exceeds the portion of the Fund's net income and net short-term capital gains (but not long-term capital gains) accruing during such Measurement Period as a result of the fact that such indebtedness or other obligation was outstanding during the Measurement Period, the fee payable to FTIML with respect to such Fund shall be reduced in the same proportion as the fee paid to FAV with respect to such Fund is so reduced. "Measurement Period" shall be any period for which payments of interest or fees (whether designated as such or implied) are payable in connection with any indebtedness or other obligation of the Fund incurred for investment purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The sub-advisory fee under this Agreement shall be payable on the first business day of the first month following the effective day of this Agreement and shall be reduced by the amount of any advance payments made by FAV relating to the previous month. If this Agreement is terminated prior to the end of any month, the monthly fee shall be prorated for the portion of any month in which this Agreement is in effect which is not a complete month according to the proportion which the number of calendar days in the month during which the Agreement is in effect bears to the total number of calendar days in the month, and shall be payable within 10 days after the date of termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. In the absence of willful misfeasance, bad faith, gross negligence, or reckless disregard of its obligations or duties hereunder on the part of FTIML, neither FTIML nor any of its directors, officers, employees or affiliates shall be subject to liability to FAV or the Fund or to

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any shareholder of the Fund for any error of judgment or mistake of law or any other act or omission in the course of, or connected with, rendering services hereunder or for any losses that may be sustained in the purchase, holding or sale of any security by the Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. During the term of this Agreement, FTIML will pay all expenses incurred by it in connection with its activities under this Agreement other than the cost of securities (including brokerage commissions, if any) purchased for the Fund. The Fund and FAV will be responsible for all of their respective expenses and liabilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. This Agreement shall be effective as of the date given above and shall continue in effect for two years. It is renewable annually thereafter so long as such continuance is specifically approved at least annually (i) by a vote of the Board or by the vote of a majority of the outstanding voting securities of the Fund, and (ii) by the vote of a majority of the Trustees of the Trust who are not parties to this Agreement or interested persons thereof, cast in person at a meeting called for the purpose of voting on such approval.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. This Agreement may be terminated at any time, without payment of any penalty, by the Board or by vote of a majority of the outstanding voting securities of the Fund, upon not more than sixty (60) days' written notice to FAV and FTIML, and by FAV or FTIML upon not more than sixty (60) days' written notice to the other party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. This Agreement shall terminate automatically in the event of any assignment thereof, as defined in the 1940 Act, and upon any termination of the Management Contract between FAV and the Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. This Agreement shall not be amended with respect to any Fund unless such amendment be approved at a meeting by the vote, cast at a meeting called for the purpose of voting on such approval, of a majority of the Trustees of the related Fund who are not interested persons of such Fund or of FAV and FTIML.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. In compliance with the requirements of Rule 31a-3 under the 1940 Act, FTIML hereby agrees that all records which it maintains for the Fund are the property of the Fund and further agrees to surrender promptly to the Fund, or to any third party at the Fund's direction, any of such records upon the Fund's request. FTIML further agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records required to be maintained by Rule 31a-1 under the 1940 Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule, or otherwise, the remainder of this Agreement shall not be affected thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. The terms "majority of the outstanding voting securities" of the Fund and "interested persons" shall have the meanings as set forth in the 1940 Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. This Agreement shall be interpreted in accordance with and governed by the laws of the State of California of the United States of America.

------

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and attested by their duly authorized officers.

---

| | |
|:---|:---|
| FRANKLIN ADVISERS, INC. | FRANKLIN ADVISERS, INC. |
| By: | /s/ Thomas Merchant |
|  | Thomas Merchant |
| Title: | Chief Legal Officer |
| FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED | FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED |
| By: | /s/ Euan Wilson |
|  | Euan Wilson |
| Title: | Director |

---

------

<u>Schedule A\*</u> 

(amended as of August 1, 2025)

**Putnam California Tax Exempt Income Fund** 

**Putnam Diversified Income Trust** 

**Putnam Asset Allocation Funds** 

-Putnam Dynamic Asset Allocation Balanced Fund

-Putnam Dynamic Asset Allocation Conservative Fund

-Putnam Dynamic Asset Allocation Growth Fund

-Putnam Multi-Asset Income Fund

**Putnam ETF Trust** 

-Franklin California Municipal Income ETF (effective August 1, 2025)

-Franklin Massachusetts Municipal Income ETF (effective August 1, 2025)

-Franklin Minnesota Municipal Income ETF (effective August 1, 2025)

-Franklin Municipal High Yield ETF (effective August 1, 2025)

-Franklin Municipal Income ETF (effective August 1, 2025)

-Franklin New Jersey Municipal Income ETF (effective August 1, 2025)

-Franklin New York Municipal Income ETF (effective August 1, 2025)

-Franklin Ohio Municipal Income ETF (effective August 1, 2025)

-Franklin Pennsylvania Municipal Income ETF (effective August 1, 2025)

-Franklin Short-Term Municipal Income ETF (effective August 1, 2025)

-Putnam ESG Core Bond ETF

-Putnam ESG High Yield ETF

-Putnam ESG Ultra Short ETF

**Putnam Funds Trust** 

-Putnam Core Bond Fund

-Putnam Dynamic Asset Allocation Equity Fund

-Putnam Floating Rate Income Fund

-Putnam Mortgage Opportunities Fund

-Putnam Short Duration Bond Fund

-Putnam Short Term Investment Fund

-Putnam Short-Term Municipal Income Fund

-Putnam Ultra Short Duration Income Fund

-Putnam Ultra Short MAC Series

**Putnam Global Income Trust** 

**Putnam High Yield Fund** 

**Putnam Income Fund** 

**Putnam Investment Funds** 

-Putnam Government Money Market Fund

**Putnam Massachusetts Tax Exempt Income Fund** 

**Putnam Minnesota Tax Exempt Income Fund** 

**Putnam Money Market Fund** 

**Putnam Mortgage Securities Fund** 

**Putnam New Jersey Tax Exempt Income Fund** 

**Putnam New York Tax Exempt Income Fund** 

**Putnam Ohio Tax Exempt Income Fund** 

**Putnam Pennsylvania Tax Exempt Income Fund** 

**Putnam Target Date Funds** 

-Putnam Retirement Advantage Maturity Fund

-Putnam Retirement Advantage 2070 Fund (effective August 1, 2025)

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-Putnam Retirement Advantage 2065 Fund

-Putnam Retirement Advantage 2060 Fund

-Putnam Retirement Advantage 2055 Fund

-Putnam Retirement Advantage 2050 Fund

-Putnam Retirement Advantage 2045 Fund

-Putnam Retirement Advantage 2040 Fund

-Putnam Retirement Advantage 2035 Fund

-Putnam Retirement Advantage 2030 Fund

-Putnam Sustainable Retirement Maturity Fund

-Putnam Sustainable Retirement 2070 Fund (effective August 1, 2025)

-Putnam Sustainable Retirement 2065 Fund

-Putnam Sustainable Retirement 2060 Fund

-Putnam Sustainable Retirement 2055 Fund

-Putnam Sustainable Retirement 2050 Fund

-Putnam Sustainable Retirement 2045 Fund

-Putnam Sustainable Retirement 2040 Fund

-Putnam Sustainable Retirement 2035 Fund

-Putnam Sustainable Retirement 2030 Fund

**Putnam Tax Exempt Income Fund** 

**Putnam Tax-Free Income Trust** 

-Putnam Strategic Intermediate Municipal Fund

-Putnam Tax-Free High Yield Fund

**Putnam Variable Trust** 

-Putnam VT Diversified Income Fund

-Putnam VT Global Asset Allocation Fund

-Putnam VT Government Money Market Fund

-Putnam VT High Yield Fund

-Putnam VT Income Fund

-Putnam VT Mortgage Securities Fund

\* FTIML is authorized to act as sub-adviser for each Fund listed in this Schedule A, but a Sub-Advised Portion may not be assigned to FTIML by FAV pursuant to Section 1(a)(i) with respect to a particular Fund at any given time. Sub-Advised Portions will be determined, and compensation under this Agreement will be paid, based on the corporate accounting records of the parties' parent company with respect to portfolio management duty assignments. 

---

| | |
|:---|:---|
| FRANKLIN ADVISERS, INC. | FRANKLIN ADVISERS, INC. |
| By: | /s/ Thomas Merchant |
|  | Thomas Merchant |
| Title: | Chief Legal Officer |
| FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED | FRANKLIN TEMPLETON INVESTMENT MANAGEMENT LIMITED |
| By: | /s/ Euan Wilson |
|  | Euan Wilson |
| Title: | Director |

---

## Ex-99.(D)(8)

**<u>SUBADVISORY AGREEMENT</u>**

THIS SUBADVISORY AGREEMENT made as of July 15, 2024 by and between FRANKLIN ADVISERS, INC., a corporation organized and existing under the laws of the State of California (hereinafter called "FAV"), and PUTNAM INVESTMENT MANAGEMENT, LLC, a limited liability company organized and existing under the laws of the State of Delaware ("PIM").

WHEREAS, FAV and PIM are each registered as an investment adviser under the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and engaged in the business of supplying investment management services as an independent contractor; and

WHEREAS, FAV has been retained to render investment advisory services to each of the funds listed on Schedule A hereto (each, a "Fund"), including the Funds that are series of an investment management company registered with the U.S. Securities and Exchange Commission (the "SEC") pursuant to the Investment Company Act of 1940, as amended (the "1940 Act") as shown on Schedule A; and

WHEREAS, FAV desires to retain PIM to render certain investment advisory and related services to the Fund pursuant to the terms and provisions of this Agreement, and PIM is interested in furnishing said services.

NOW, THEREFORE, in consideration of the covenants and the mutual promises hereinafter set forth, the parties hereto, intending to be legally bound hereby, mutually agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. FAV hereby retains PIM and PIM hereby accepts such engagement, to furnish certain investment advisory and related services with respect to certain assets of the Fund, as more fully set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to the overall policies, direction and review of the Fund's Board of Trustees (the "Board") and to the instructions and supervision of FAV, PIM will provide certain investment advisory and related services for a portion of the Fund as agreed upon from time to time by FAV and PIM, including:

(i) managing the investment and reinvestment of that portion of the Fund's portfolio allocated for
investment to it by FAV, if any, from time to time with PIM determining what securities and other property will be purchased, retained or sold with respect to such portion, and placing all purchase and sale orders with respect to such portion;

(ii) Providing assistance with purchasing and selling securities and other property for the Fund, including the
placement of orders with broker-dealers selected by PIM, even if FAV has not delegated investment discretion with respect to such assets;

(iii) purchasing, holding, making payments and transfers with respect to, and generally dealing in any manner with
and in, any derivatives contract, transaction or arrangement,

------

transaction covered under master securities forward transaction or similar agreement, securities lending or repurchase transaction (in each case whether cleared or uncleared and whether or not exchange-traded) ("Trading Arrangements") that is permitted for investment by the prospectus and the statement of additional information of the Fund and all necessary or appropriate documentation relating thereto, and in connection with such Trading Arrangements, taking such related actions (including, without limitation, account arrangements, collateral or margin posting, and regulatory reporting and disclosure and executing or causing to be executed any and all required or appropriate documentation with respect thereto), all on such terms and conditions as PIM shall determine; <br>

(iv) performing research and obtaining and evaluating pertinent economic, statistical, and financial data
relevant to the investment strategies and policies of the Fund, as set forth in the Fund's prospectus and statement of additional information, and sharing such research and data with FAV upon request; and

(v) voting all proxies solicited by or with respect to issuers of securities in which assets of the Fund may be
invested from time to time in accordance with its proxy voting policy in effect from time to time.

The assets with respect to which PIM provides the services set forth in Sections 1(a)(i) through (v) are referred to as the "Sub-Advised Portion."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In performing these services, PIM shall adhere to the Fund's investment goal(s), policies and restrictions as contained in the Fund's current prospectus and statement of additional information, and in the Agreement and Declaration of Trust and Bylaws of the Fund or Trust, as applicable, and to the investment guidelines most recently established by FAV (all as may be amended from time to time) and shall comply with the provisions of the 1940 Act and the rules and regulations of the SEC thereunder in all material respects and with the provisions of the United States Internal Revenue Code of 1986, as amended, which are applicable to regulated investment companies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Unless otherwise instructed by FAV or the Board, and subject to the provisions of this Agreement and to any guidelines or limitations specified from time to time by FAV or by the Board, PIM shall report daily all transactions effected by PIM on behalf of the Fund to FAV and to other entities as reasonably directed by FAV or the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) PIM shall provide the Board at least quarterly, in advance of the regular meetings of the Board, a report of its activities hereunder on behalf of the Fund, in such form and detail as requested by the Board. PIM shall also make one or more of its personnel available to attend such meetings of the Board as the Board may reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) In carrying out its duties hereunder, PIM shall comply with all reasonable instructions of the Fund, the Board or FAV in connection therewith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Subject to approval by the Board and any necessary approval of the Fund's shareholders, PIM, at its expense, may select and contract with one or more subadvisers, registered under the Advisers Act, to perform some or all of the services for the Fund for which it is responsible under this Agreement. PIM will compensate any subadviser for its services to the Fund. PIM will evaluate any subadvisers and will make recommendations to the Board about the hiring, termination and replacement of a subadviser. PIM also may terminate the services of any

------

subadviser at any time in its sole discretion, provided that it provides advance notification to the Board, and shall at the time of such termination assume the responsibilities of such subadviser unless and until a successor subadviser is selected and the requisite approval of the Fund's shareholders, if any is required, is obtained. PIM will continue to have responsibility for all advisory services furnished by any subadviser and will supervise each subadviser in its performance of its duties for the Fund with a view to preventing violations of the federal securities laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. (a) Where applicable based on the services it provides pursuant to Section 1 above, PIM shall, in the name of the Fund, place or direct the placement of orders for the execution of portfolio transactions in accordance with the Fund's policies with respect thereto and as set forth in the Fund's Registration Statement, as amended from time to time, and under the Securities Act of 1933, as amended (the "1933 Act"), Securities Exchange Act of 1934, as amended (the "1934 Act"), and the 1940 Act. In connection with the placement of orders for the execution of the Sub-Advised Portion's portfolio transactions, PIM shall create and maintain all necessary brokerage records of the Fund in accordance with all applicable laws, rules and regulations, including but not limited to, records required by Section 31(a) of the 1940 Act. All records shall be the property of the Fund and shall be available for inspection and use by the SEC, the Fund or any person retained by the Fund. Where applicable, such records shall be maintained by PIM for the period and in the place required by Rule 31a-2 under the 1940 Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Where applicable based on the services it provides pursuant to Section 1 above, PIM shall select brokers and dealers for the execution of the Fund's transactions with respect to the Sub-Advised Portion. In selecting brokers or dealers to execute such orders and subject to any policies and procedures adopted by the Trust's Board, PIM is expressly authorized to consider the fact that a broker or dealer has furnished statistical, research or other information or services which may enhance PIM's investment research and portfolio management capability generally. It is further understood in accordance with Section 28(e) of the 1934 Act that PIM may negotiate with and assign to a broker a commission which may exceed the commission which another broker would have charged for effecting the transaction if PIM determines in good faith that the amount of commission charged was reasonable in relation to the value of brokerage and/or research services (as defined in Section 28(e)) provided by such broker, viewed in terms either of the Fund or PIM's overall responsibilities to PIM's discretionary accounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. (a) PIM shall, unless otherwise expressly provided and authorized, have no authority to act for or represent FAV or the Fund in any way, or in any way be deemed an agent for FAV or the Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) It is understood that the services provided by PIM are not to be deemed exclusive. FAV acknowledges that PIM may have investment responsibilities, or render investment advice to, or perform other investment advisory services, for individuals or entities, including other investment companies registered pursuant to the 1940 Act ("Clients"), which may invest in the same type of securities as the Fund. FAV agrees that PIM may give advice or exercise investment responsibility and take such other action with respect to such Clients which may differ from advice given or the timing or nature of action taken with respect to the Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. PIM agrees to use its best efforts in performing the services to be provided by it pursuant to this Agreement.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. PIM will treat confidentially and as proprietary information of the Fund all records and other information relative to the Fund and prior, present or potential shareholders, and will not use such records and information for any purpose other than performance of its responsibilities and duties hereunder, except after prior notification to and approval in writing by the Fund, which approval shall not be unreasonably withheld and may not be withheld where PIM may be exposed to civil or criminal contempt proceedings for failure to comply when requested to divulge such information by duly constituted authorities, or when so requested by the Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. (a) In payment for the investment sub-advisory services to be rendered by PIM under Section 1(a)(i)) hereunder with respect to Putnam Dynamic Asset Allocation Balanced Fund, Putnam Dynamic Asset Allocation Conservative Fund, Putnam Dynamic Asset Allocation Equity Fund, Dynamic Asset Allocation Growth Fund and Putnam VT Global Asset Allocation Fund, FAV shall pay a monthly fee in U.S. dollars to PIM calculated daily at the following annual rate: 0.25% of the average aggregate net asset value of the assets in the Sub-Advised Portion. For the purposes of calculating such fee, the net asset value of the Sub-Advised Portion and the value of the net assets of the Fund shall be determined in the same manner that the Fund uses to compute its net asset value for purposes of pricing purchases and redemptions of its shares, all as set forth more fully in the Fund's then current prospectus and statement of additional information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In payment for the services to be rendered by PIM under Sections 1(a)(ii)-(v), FAV shall pay a monthly fee in U.S. dollars to PIM based on the costs of PIM in providing services to the Fund, which may include a mark-up determined and revised from time-to-time in accordance with the transfer pricing policy of the parties' parent company (specifically, the global service fee model thereunder) in line with applicable tax/transfer pricing regulations, but not to exceed 15% over such costs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If this Agreement is terminated prior to the end of any month, the monthly fee shall be prorated for the portion of any month in which this Agreement is in effect which is not a complete month according to the proportion which the number of calendar days in the month during which the Agreement is in effect bears to the total number of calendar days in the month, and shall be payable within 10 days after the date of termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. (a) In the absence of willful misfeasance, bad faith, gross negligence, or reckless disregard of its obligations or duties hereunder on the part of PIM, neither PIM nor any of its directors, officers, employees or affiliates shall be subject to liability to FAV or the Fund or to any shareholder of the Fund for any error of judgment or mistake of law or any other act or omission in the course of, or connected with, rendering services hereunder or for any losses that may be sustained in the purchase, holding or sale of any security by the Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding paragraph 7(a), to the extent that FAV is found by a court of competent jurisdiction, or the SEC or any other regulatory agency, to be liable to the Fund or any shareholder (a "liability") for any acts undertaken by PIM pursuant to authority delegated as described in Paragraph 1(a), PIM shall indemnify and save FAV and each of its affiliates, officers, directors and employees (each an "Indemnified Party") harmless from, against, for and in respect of all losses, damages, costs and expenses incurred by an Indemnified Party with respect to such liability, together with all legal and other expenses reasonably incurred by any such Indemnified Party, in connection with such liability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) No provision of this Agreement shall be construed to protect any director or officer of FAV or PIM from liability in violation of Sections 17(h) or (i) of the 1940 Act.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. During the term of this Agreement, PIM will pay all expenses incurred by it in connection with its activities under this Agreement other than the cost of securities (including brokerage commissions, if any) purchased for the Fund. The Fund and FAV will be responsible for all of their respective expenses and liabilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. This Agreement shall be effective as of the date given above and shall continue in effect for two years. It is renewable annually thereafter so long as such continuance is specifically approved at least annually (i) by a vote of the Board or by the vote of a majority of the outstanding voting securities of the Fund, and (ii) by the vote of a majority of the Trustees of the Trust who are not parties to this Agreement or interested persons thereof, cast in person at a meeting called for the purpose of voting on such approval.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. This Agreement may be terminated at any time, without payment of any penalty, by the Board or by vote of a majority of the outstanding voting securities of the Fund, upon sixty (60) days' written notice to FAV and PIM, and by FAV or PIM upon sixty (60) days' written notice to the other party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. This Agreement shall terminate automatically in the event of any assignment thereof, as defined in the 1940 Act, and upon any termination of the Management Contract between FAV and the Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. In compliance with the requirements of Rule 31a-3 under the 1940 Act, PIM hereby agrees that all records which it maintains for the Fund are the property of the Fund and further agrees to surrender promptly to the Fund, or to any third party at the Fund's direction, any of such records upon the Fund's request. PIM further agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records required to be maintained by Rule 31a-1 under the 1940 Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule, or otherwise, the remainder of this Agreement shall not be affected thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. The terms "majority of the outstanding voting securities" of the Fund and "interested persons" shall have the meanings as set forth in the 1940 Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. This Agreement shall be interpreted in accordance with and governed by the laws of the State of California of the United States of America.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. PIM acknowledges that it has received notice of and accepts the limitations of the Trust's liability as set forth in its Agreement and Declaration of Trust. PIM agrees that the Trust's obligations hereunder shall be limited to the assets of the Fund, and that PIM shall not seek satisfaction of any such obligation from any shareholders of the Fund nor from any trustee, officer, employee or agent of the Trust.

------

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and attested by their duly authorized officers.

---

| | |
|:---|:---|
| FRANKLIN ADVISERS, INC. | FRANKLIN ADVISERS, INC. |
| By: | /s/ Thomas C. Merchant |
|  | Thomas C. Merchant |
|  | Chief Legal Officer |
| PUTNAM INVESTMENT MANAGEMENT, LLC | PUTNAM INVESTMENT MANAGEMENT, LLC |
| By: | /s/ Stephen J. Tate |
|  | Stephen J. Tate |
|  | Secretary |

---

------

**<u>Schedule A</u>**

(amended as of August 1, 2025)

**Putnam California Tax Exempt Income Fund** 

**Putnam Diversified Income Trust** 

**Putnam Asset Allocation Funds** 

-Putnam Dynamic Asset Allocation Balanced Fund

-Putnam Dynamic Asset Allocation Conservative Fund

-Putnam Dynamic Asset Allocation Growth Fund

-Putnam Multi-Asset Income Fund

**Putnam ETF Trust** 

-Franklin California Municipal Income ETF (effective August 1, 2025)

-Franklin Massachusetts Municipal Income ETF (effective August 1, 2025)

-Franklin Minnesota Municipal Income ETF (effective August 1, 2025)

-Franklin Municipal High Yield ETF (effective August 1, 2025)

-Franklin Municipal Income ETF (effective August 1, 2025)

-Franklin New Jersey Municipal Income ETF (effective August 1, 2025)

-Franklin New York Municipal Income ETF (effective August 1, 2025)

-Franklin Ohio Municipal Income ETF (effective August 1, 2025)

-Franklin Pennsylvania Municipal Income ETF (effective August 1, 2025)

-Franklin Short-Term Municipal Income ETF (effective August 1, 2025)

-Putnam ESG Core Bond ETF

-Putnam ESG High Yield ETF

-Putnam ESG Ultra Short ETF

**Putnam Funds Trust** 

-Putnam Core Bond Fund

-Putnam Dynamic Asset Allocation Equity Fund

-Putnam Floating Rate Income Fund

-Putnam Mortgage Opportunities Fund

-Putnam Short Duration Bond Fund

-Putnam Short Term Investment Fund

-Putnam Short-Term Municipal Income Fund

-Putnam Ultra Short Duration Income Fund

-Putnam Ultra Short MAC Series

**Putnam Global Income Trust** 

**Putnam High Yield Fund** 

**Putnam Income Fund** 

**Putnam Investment Funds** 

-Putnam Government Money Market Fund

**Putnam Massachusetts Tax Exempt Income Fund** 

**Putnam Minnesota Tax Exempt Income Fund** 

**Putnam Money Market Fund** 

**Putnam Mortgage Securities Fund** 

**Putnam New Jersey Tax Exempt Income Fund** 

**Putnam New York Tax Exempt Income Fund** 

**Putnam Ohio Tax Exempt Income Fund** 

**Putnam Pennsylvania Tax Exempt Income Fund** 

**Putnam Target Date Funds** 

-Putnam Retirement Advantage Maturity Fund

-Putnam Retirement Advantage 2070 Fund (effective August 1, 2025)

------

-Putnam Retirement Advantage 2065 Fund

-Putnam Retirement Advantage 2060 Fund

-Putnam Retirement Advantage 2055 Fund

-Putnam Retirement Advantage 2050 Fund

-Putnam Retirement Advantage 2045 Fund

-Putnam Retirement Advantage 2040 Fund

-Putnam Retirement Advantage 2035 Fund

-Putnam Retirement Advantage 2030 Fund

-Putnam Sustainable Retirement Maturity Fund

-Putnam Sustainable Retirement 2070 Fund (effective August 1, 2025)

-Putnam Sustainable Retirement 2065 Fund

-Putnam Sustainable Retirement 2060 Fund

-Putnam Sustainable Retirement 2055 Fund

-Putnam Sustainable Retirement 2050 Fund

-Putnam Sustainable Retirement 2045 Fund

-Putnam Sustainable Retirement 2040 Fund

-Putnam Sustainable Retirement 2035 Fund

-Putnam Sustainable Retirement 2030 Fund

**Putnam Tax Exempt Income Fund** 

**Putnam Tax-Free Income Trust** 

-Putnam Strategic Intermediate Municipal Fund

-Putnam Tax-Free High Yield Fund

**Putnam Variable Trust** 

-Putnam VT Diversified Income Fund

-Putnam VT Global Asset Allocation Fund

-Putnam VT Government Money Market Fund

-Putnam VT High Yield Fund

-Putnam VT Income Fund

-Putnam VT Mortgage Securities Fund

---

| | |
|:---|:---|
| FRANKLIN ADVISERS, INC. | FRANKLIN ADVISERS, INC. |
| By: | /s/ Thomas C. Merchant |
|  | Thomas C. Merchant |
|  | Chief Legal Officer |
| PUTNAM INVESTMENT MANAGEMENT, LLC | PUTNAM INVESTMENT MANAGEMENT, LLC |
| By: | /s/ Stephen J. Tate |
|  | Stephen J. Tate |
|  | Secretary |

---

## Ex-99.(E)(2)

**AUTHORIZED PARTICIPANT AGREEMENT** 

This Authorized Participant Agreement (this "**Agreement**") is entered into by and between ________________ (the "**Participant**") and **Franklin Distributors, LLC** (the "**Distributor**"), principal underwriter of each trust listed on Annex A (the "**Trust**") and its separate series (each, a "**Fund**" and collectively, the "**Funds**"). Capitalized terms used herein and not otherwise defined have the meaning assigned to them in <u>Section</u> <u>14</u> of this Agreement.

WHEREAS, the Trust is registered with the Securities and Exchange Commission under the Investment Company Act of 1940, as amended (the "**1940 Act**"), as an open-end management investment company;

WHEREAS, the Trust offers shares of the Funds, each constituting individual investment portfolios that relate solely to the assets specifically allocated to such portfolios;

WHEREAS, each Fund is listed for trading on one or more U.S. national securities exchanges or associations and operates as an "**Exchange Traded Fund**" or "**ETF**";

WHEREAS, the Distributor serves as the principal underwriter of the Trust acting on an agency basis in connection with the sale and distribution of shares of each Fund of the Trust ("**Shares**");

WHEREAS, The Bank of New York Mellon acts as the transfer agent for the Trust (the "**Transfer Agent**");

WHEREAS, the Shares of each Fund offered by the Trust (now or in the future) may be directly purchased from or redeemed to the Trust at a price based on the NAV per Share (subject to applicable Law and the terms hereof) only by or through an entity that has entered into an Authorized Participant Agreement with the Distributor; and

WHEREAS the Distributor and the Participant intend that the Trust shall be a third party beneficiary of this Agreement and shall receive the benefits contemplated by this Agreement.

NOW THEREFORE, the parties hereto, intending to be legally bound and in consideration of the premises and of the mutual agreements contained herein, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, agree as follows:

**1.**  **<u>ORDERS FOR PURCHASE AND REDEMPTION GENERALLY</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.  ***<u>Participant Status</u>*** . In connection with each Order to purchase or redeem Shares directly
with the Trust at their NAV, the Participant shall be deemed to repeat and affirm each of the covenants, representations and warranties made by Participant made in <u>Section</u> <u>6</u> hereof.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.  ***<u>Creation Units</u>*** . Shares of a Fund may only be purchased or redeemed by a Participant
directly from the Trust, through the Distributor, in aggregations constituting a Creation Unit **.** The number of Shares of a Fund constituting a Creation Unit will be stated in the Prospectus of the Trust relating to that Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.  ***<u>Authority to Transact</u>*** . The Participant is authorized to purchase and redeem Creation
Units of the Funds, subject to applicable Law and the terms hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.  ***<u>Funds May Have Different APs</u>*** . The Participant acknowledges and agrees that one or more
other participants may be granted the right to purchase or redeem Shares of a particular Fund and that the Funds for which Participant serves as a participant may be different than the Funds for which other participants serve as participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.  ***<u>Procedures for Orders</u>*** . The procedures for placing and execution of Purchase Requests
and Redemption Orders are described in the Prospectus for each Fund and in the Participant Supplement. All Orders shall be placed and executed in accordance with the terms and procedures set forth in the Prospectus and the Participant Supplement.
Orders received in proper form in accordance with such terms and procedures shall be processed at the NAV per Share of the relevant Fund next determined after such Order is received in proper form, as determined by the Distributor in its sole
discretion. The Participant acknowledges and agrees that the Funds may determine their NAV per Share at different times and certain Funds may establish procedures regarding the time that Orders are placed by the Participant. The Participant agrees
to comply with any and all requirements stated in the Prospectus and in the Participant Supplement to the extent applicable to it. The Trust and the Distributor reserve the right to revise or augment the procedures relating to the manner of
purchasing or redeeming Creation Units at any time. The Distributor will make commercially reasonable efforts to provide notice to the Participant of any changes to the Participant Supplement with respect to the placement of Orders. The Participant
agrees to comply with such procedures as they may be revised or augmented from time to time. Revised or augmented procedures shall not apply retroactively to Orders submitted prior to such time the Distributor has sent notice of such change in
procedure, unless required by applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f.  ***<u>Consent to Recording</u>*** . It is contemplated that the phone lines, websites or other
electronic portals used by the Distributor, the Trust, the Transfer Agent, the Participant or their Affiliated Persons with respect to any Orders may be recorded, and the Parties hereby consent to the recording of all calls and electronic
transactions in respect of Orders with any of those Parties and by the Transfer Agent, provided that the recording Party, shall promptly provide copies of such recordings to the Participant upon the reasonable written request of the Participant,
unless such recordings have been erased or destroyed prior to receipt of such request in the normal course of business in accordance with the recording Party's general record keeping policies and procedures. The Parties agree that either Party

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and the Transfer Agent may use such recordings in connection with any dispute or proceeding relating to this Agreement. In the event that the Distributor, the Trust, the Participant or their Affiliated Persons become legally compelled to disclose to any third party any such recordings, such disclosing Party, to the extent legally permissible, agrees to provide each recorded Party with reasonable advance written notice identifying the recordings to be so disclosed. <br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g.  ***<u>Irrevocability</u>*** . All Orders are irrevocable and considered final when placed by a
Participant. Accordingly, the Participant acknowledges and agrees that it may not be possible to cancel or modify an Order once the Participant has placed it, and the Participant agrees to exercise caution before placing all Orders. Any attempt the
Participant makes to revise or cancel an Order may be deemed a request to place a new Order that may modify or cancel the previous Order, at the sole discretion of the Trust. The Participant shall be responsible for any and all reasonable expenses
and costs incurred by the Trust in connection with any modified or cancelled Order. It is acknowledged and agreed that the Trust, and the Distributor on behalf of the Trust, has the absolute right to reject any Purchase Request or Redemption Order
(to the extent permitted by Law and the Prospectus) transmitted to it by the Distributor. It is further acknowledged and agreed that the Transfer Agent may reject any Purchase Request or Redemption Order not received in the form designated by the
Trust or the Distributor. The Distributor shall notify the Participant as soon as reasonably practicable of any such rejection of an Order. It is acknowledged and agreed that notice may not be reasonably practicable until after the time the
Distributor stops accepting Orders for that day. The Distributor or the Transfer Agent, as applicable, will promptly return to the Participant upon rejection of an Order to purchase or redeem Shares all consideration, including Shares and any Cash
Amount (in the case of a Redemption Order), Deposit Instruments and/or cash (if applicable) and the Cash Amount (in the case of a Purchase Request) tendered by the Participant in connection with such Order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h.  ***<u>Prospectus and Trade Confirmation Delivery</u>*** . The Participant consents to the delivery of
the Prospectus, trade confirmations, annual or semi-annual or other periodic reports regarding the Funds, shareholder information and notices and other information regarding the Funds ()"**Fund Information**") electronically. The
Participant agrees to maintain a valid email address, software applicable for reading such documents in "PDF" format (or other equivalent format that the Funds may use from time to time) and continuous internet access for purposes of
receiving the Fund Information and further agrees to promptly notify the Distributor if its email address for this purpose changes. The Participant may, at any time, request reasonable quantities of paper copies of the Fund Information and any
supplements or amendments thereto or recirculation thereof, and the Distributor agrees to provide them promptly to the Participant. Participant shall deliver, or cause to be delivered, a copy of the Prospectus to shareholders as required by
applicable Law.

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**2.**  **<u>EXECUTION OF PURCHASE REQUESTS</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.  ***<u>Portfolio Deposit</u>*** . To effect the purchase of a Creation Unit of a Fund, the Participant
agrees to deliver to the Trust, on behalf of the Fund, the Deposit Instruments or cash, in circumstances where the Trust determines to require an all-cash creation process, plus any applicable Cash Amount. The
Participant understands that a Creation Unit will not be issued until the requisite number of Deposit Instruments and the Cash Component or, if applicable, cash in the amount required by the Trust for a cash creation, as well as applicable
transaction fees, are transferred to the Trust on or before the Contractual Settlement Date for the Order, in accordance with the terms of the Prospectus and the Participant Supplement. The Participant agrees that any Cash Component and any Cash
Amount payable to the Fund will be made available to the Trust, on behalf of the Fund, in immediately available same day funds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.  ***<u>Cash in Lieu</u>*** . The Trust may, in its sole discretion (as limited by its ETF Exemptive
Order), permit or require the substitution of an amount of cash to be added to any Cash Amount to replace any Deposit Instrument ("cash in lieu").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.  ***<u>Delivery of Collateral or Portfolio Deposit</u>*** . As described in the Prospectus and the
Participant Supplement from time to time, in the event that the basket of Deposit Instruments to be delivered by the Participant in connection with any Purchase Request are missing some of the required Deposit Instruments on the Contractual
Settlement Date for such Purchase Request, the Distributor, the Trust and the Transfer Agent may agree not to treat such Purchase Order as a failed trade or a failed settlement provided that the Participant, on or prior to the close of business on
the Contractual Settlement Date, in anticipation of delivery of all or a portion of the requisite Deposit Instruments, delivers to the Trust, in accordance with the delivery instructions provided by the Distributor, cash collateral, free of all
liens other than that in favor of the Trust, in an amount not less than 105% of the market value of the missing Deposit Instruments. The Trust may, in its discretion, require additional cash collateral to be posted if, in the sole discretion of the
Trust, the Deposit Instruments to be delivered warrant an increased collateral ratio or the existing collateral is insufficient to protect the Fund from market or other risks relating to the undelivered instrument. Such cash collateral shall be marked-to-the-market daily so that the amount posted is never less than 105% (or such higher percentage as determined by the Trust) of
the market value of the missing Deposit Instruments until the earlier of the acquisition of such Deposit Instruments by the Trust (a "**buy-in**") or delivery of the missing Deposit Instruments
by the Participant. The Fund may at anytime effect a buy-in with respect to the missing Deposit Instruments and use such cash collateral to purchase the missing Deposit Instruments without further consultation
with the Participant, and the Participant shall be responsible for any shortfall experienced by the Trust in effecting such buy-in as well as related transaction expenses. The Participant shall be responsible
for any and all expenses and costs incurred by the Trust, including all Cash Amounts and/or Cash Components, in connection with Purchase Requests by such

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Participant or any Participant Client or other person submitting a Purchase Request through Participant. The Participant understands and agrees that in the event collateral or the Portfolio Deposit are not fully transferred to the Trust by the time specified, a Purchase Request may be cancelled by the Trust and the Participant will be solely responsible for any and all expenses and costs incurred by the applicable Fund or the Distributor related to the cancelled Purchase Request. <br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.  ***<u>Rejection of Purchase Requests</u>*** . The Trust or the Distributor may reject any order to
purchase Creation Units for any reason, including if an order to purchase Shares is not submitted in proper form, and the Transfer Agent may reject an order not received in the form designated by the Trust or the Distributor. In addition, a Fund
expects to reject a purchase request transmitted to it by the Distributor if: (a) the Participant or Participant Client or group of Participants or Participant Clients, upon obtaining the Creation Units of Shares of a Fund, would own eighty
percent (80%) or more of the outstanding Shares of such Fund; (b) the acceptance of the Deposit Instruments would have certain adverse tax consequences, such as causing the Fund to no longer to meet regulated investment company status under the
Code for federal tax purposes; (c) the acceptance of the Deposit Instruments would, in the opinion of the Fund, be unlawful, as in the case of a purchaser who was banned from trading in securities; (d) the acceptance of the Deposit
Instruments would otherwise, in the discretion of the Fund, or its investment adviser or sub-adviser, have an adverse effect on the Fund or on the rights of the Fund's beneficial owners; or
(e) there exist circumstances outside the control of the Fund that make it impossible to process purchases of Creation Units of Shares for all practical purposes. The Participant acknowledges that the Trust or the Distributor on behalf of the
Trust reserve the right to suspend sales of Shares in accordance with the terms of the Prospectus and applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.  ***<u>Title to Securities; Restricted Shares</u>*** . The Participant represents on behalf of itself
and any Participant Client and any other person for which it acts that upon delivery of a portfolio of Deposit Instruments to the Custodian and/or the relevant subcustodian for the benefit of the Trust in accordance with the terms of the Prospectus,
the Trust will acquire good, marketable and unencumbered title to such securities or instruments, free and clear of any and all liens, restrictions, hypothecations, charges, duties imposed on the transfer of assets and encumbrances and not subject
to any adverse claims, including, without limitation, any restriction upon the sale or transfer of such securities or instruments imposed by (a) any agreement or arrangement entered into by the Participant or any Participant Client, or
(b) any provision of the 1933 Act, and any regulations thereunder (except that (I) securities of issuers other than U.S. issuers shall not be required to have been registered under the 1933 Act if exempt from such registration and
(II) securities of U.S. issuers shall not be required to have been registered under the 1933 Act if (1) exempt from such registration or (2) eligible for sale without registration pursuant to Rule 144A under the 1933 Act and such
security is included by a Fund as a Deposit Instrument (a **"Rule 144A Security** ")), or of the applicable laws or regulations of any other applicable jurisdiction and (c) any such securities being

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"restricted securities" as such term is used in Rule 144(a)(3)(i) promulgated under the 1933 Act, in the hands of the Participant immediately prior to any such delivery. This representation excludes restriction due to the status of the Trust, any of the Funds or the Funds' investment adviser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f.  ***<u>Corporate Actions</u>*** . With respect to any Purchase Request, the Trust, on behalf of each
applicable Fund, shall return to the Participant or the Participant Client any dividend, distribution, interest or other corporate action paid to the Trust in respect of any Deposit Instrument that is transferred to the Trust that, based on the
valuation of such Deposit Instrument on the Business Day on which the Trust receives and accepts the Purchase Request in proper form, should have been paid to the Participant or the Participant Client in accordance with the terms of the instrument
or corporate action. Likewise, the Participant acknowledges and agrees to return to the Trust any dividend, distribution, interest or other corporate action paid to the Participant or any Participant Client in respect of any Deposit Instrument that
is transferred to the Trust that, based on the valuation of such Deposit Instrument on the Business Day on which the Trust receives and accepts the Purchase Request in proper form, should have been paid to the Trust. The Trust is entitled to reduce
the amount of money or other proceeds due to the Participant or Participant Client that, based on the valuation of such Deposit Instrument at the time of transfer, should be paid to the Trust, in accordance with the terms of the instrument or
corporate action. If the Trust so reduces the amount of money or other proceeds due to the Participant or the Participant Client, the Participant is entitled, in turn, to retain such dividend, distribution, interest or other corporation action.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g.  ***<u>Ownership of Deposit Securities</u>*** . Notwithstanding anything to the contrary contained
herein, and subject to the provisions of paragraph c. of this <u>Section</u> <u>2</u>, for the purposes of the laws of the State of New York, the Participant agrees that this Agreement is a contract for the sale of the Deposit
Instruments *in praesenti*, and that ownership of, and all attendant rights to and benefits of, the Deposit Instruments shall be vested in the Trust as of the Business Day on which the Trust receives and accepts the related Purchase Request in
proper form and in accordance with the foregoing terms and procedures.

**3.**  **<u>EXECUTION OF REDEMPTION ORDERS</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.  ***<u>Creation Units</u>*** . To effect the redemption of a Creation Unit of a Fund, the Participant
agrees to deliver to the Trust, the requisite number of Shares comprising the number of Creation Units being redeemed plus any applicable Cash Amount and/or Cash Component. Proceeds of a redemption of a Creation Unit shall consist of Redemption
Instruments and/or any applicable Cash Amount, less any applicable Cash Component. As described in the Prospectus and the Participant Supplement, in the event that some or all of the Shares comprising a Creation Unit to be delivered by the
Participant in connection with any Redemption Order are missing on the Contractual Settlement date for such redemption Order, the Distributor, the Trust and the Transfer Agent may agree not to treat such

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redemption Order as a failed trade or a failed settlement provided that the Participant, on or prior to the close of business on the Contractual Settlement Date, for the benefit of a Fund in anticipation of delivery of all or a portion of the Creation Unit, delivers to the Trust, in accordance with the delivery instructions provided by the Distributor, cash collateral, free of all liens other than that in favor of the Trust, in an amount not less than 105% (or such higher percentage as determined by the Trust in its sole discretion) of the market value of the missing Shares. The Trust may require additional cash collateral to be posted if, in the sole discretion of the Trust, the existing collateral is insufficient to protect the Fund from market or other risks relating to the undelivered Shares. Such cash collateral shall be marked-to-the-market daily so that the amount posted is never less than 105% (or such higher percentage as determined by the Trust in its sole discretion) of the market value of the missing Shares until the earlier of a buy-in by the Trust or delivery of the missing Shares by the Participant. The Fund may at anytime effect a buy-in with respect to the missing Shares and use such cash collateral to purchase Shares without further consultation with Participant, and the Participant shall be responsible for any shortfall experienced by the Trust in effecting such buy-in as well as related transaction expenses. The Participant shall be responsible for any and all expenses and costs incurred by the Trust, including all Cash Components, in connection with any Redemption Orders by such Participant or any Participant Client or other person submitting a Redemption Order through Participant. <br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.  ***<u>Cash in Lieu</u>*** . The Trust may, in its sole discretion (as limited by its ETF Exemptive
Order), permit or require the substitution of an amount of cash to be added to any Cash Amount to replace any Redemption Instrument ("cash in lieu").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.  ***<u>Delivery of Shares</u>*** . The Participant understands and agrees that in the event Shares are
not transferred to the Trust (or the Custodian for the benefit of the Trust) by the time specified, a Redemption Order may be cancelled by the Trust and the Participant will be solely responsible for all expenses and costs incurred by the Trust
and/or the Distributor related to a cancelled Order submitted by the Participant for itself, a Participant Client or any other person. The Distributor will provide notice to the Participant, as soon as reasonably practicable, of any such
cancellation of a Redemption Order submitted by the Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.  ***<u>Legal and Beneficial Ownership</u>*** . The Participant represents and warrants that it will
not attempt to place a Redemption Order for the purpose of redeeming any Creation Unit of Shares of any Fund unless it or the Participant Client, as the case may be, owns outright (within the meaning of Rule 200 of Regulation SHO) or has full legal
authority and legal right to tender for redemption the requisite number of Shares of the relevant Fund to be redeemed as a Creation Unit and to the entire proceeds of the redemption and that such Shares have not been sold short, loaned or pledged to
another party and are not the subject of a repurchase agreement, securities lending agreement or any other arrangement affecting the Participant's ability to tender the Shares for redemption and the Fund's ability to settle the
Redemption Order on the Contractual Settlement Date and to take legal or

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beneficial ownership of such Shares pursuant to the redemption. In the event that the Distributor and/or the Trust have reason to believe that the Participant does not have the requisite number of Shares of the relevant Fund to be redeemed as a Creation Unit, the Distributor and/or the Trust may require the Participant to deliver or execute supporting documentation in order for the Redemption Order to be in proper form. Failure to deliver or execute the requested supporting documentation may result in a Participant's Redemption Order being rejected as not in proper form. <br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.  ***<u>Corporate Actions</u>*** . With respect to any Redemption Order, the Participant acknowledges
and agrees to return to the Trust any dividend, distribution, interest or other corporate action paid to it or a Participant Client in respect of any Redemption Instrument that is transferred to the Participant or any Participant Client that, based
on the valuation of such Redemption Instrument at the time of transfer, should have been paid to the Fund. It is acknowledged and agreed that the Trust is entitled to reduce the amount of money or other proceeds due to the Participant or any
Participant Client by an amount equal to any dividend, distribution, interest or other corporate action to be paid to the Participant or to the Participant Client in respect of any Redemption Instrument that is transferred to the Participant or any
Participant Client that, based on the valuation of such Redemption Instrument at the time of transfer, should be paid to the Fund. Likewise, the Trust, on behalf of the applicable Fund, shall to return to the Participant or any Participant Client
any dividend, distribution, interest or other corporate action paid to it in respect of any Share that is transferred to the Trust, on behalf of the applicable Fund, that, based on the valuation of such Share at the time of transfer, should have
been paid to the Participant or the Participant Client.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f.  ***<u>Cash Amount and Cash Component</u>*** . In situations where a Cash Amount and/or a Cash
Component will be applied to a Redemption Order, the Participant hereby agrees that it will make available or transfer cash in an amount equal to the Cash Amount and/or Cash Component, as applicable. Computation of this amount shall exclude any
stamp tax or duty, sales or use tax, recording tax, value added tax and other similar governmental charges, fees and expenses payable upon the transfer of beneficial ownership of the Redemption Instruments or the Shares (regardless of whether such
stamp tax or similar fee is imposed by law on the Fund so that such deduction reflects a reimbursement of the Fund). Payment of stamp tax or duties, transfer tax, sales or use tax, recording tax, value added tax and similar governmental charges,
taxes, fees and expenses payable upon transfer of beneficial ownership of the Redemption Instruments or the Shares shall be the sole responsibility of the Participant and not of the Trust and, to the extent that the Trust, the Distributor or their
agents are required by Law to pay any such tax or charge, the Participant agrees promptly to indemnify the Trust or the Distributor, as applicable, for any such payment, together with any applicable penalties, additions to tax or interest thereon.
This Section 3(f) shall survive termination of this Agreement. The Participant hereby agrees to ensure that the Cash Amount and/or Cash Component will be received by the Trust in immediately available same day

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funds on or before the Contractual Settlement Date or such earlier time as may be designated by the Trust.

**4.**  **<u>BENEFICIAL OWNERSHIP LIMITATION</u>** 

The Participant represents, warrants and covenants to the Distributor, the Transfer Agent and the Trust that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. immediately after each acquisition of Shares by the Participant pursuant to this Agreement (based upon the
number of outstanding Shares of such Fund made publicly available by the Trust) either: (i) it does not hold for its account or for the account of any Beneficial Owner of Shares of the relevant Fund, including, without limitation, the account
of any Participant Client for which the Participant is acting in respect to such Redemption Order, eighty percent (80%) or more of the outstanding Shares of such relevant Fund or (ii) if it does hold for its account or the account of any
Beneficial Owner, eighty percent (80%) or more of the outstanding Shares of the relevant Fund, that such a circumstance would not result in the Fund acquiring a basis in the portfolio of Deposit Instruments transferred to the Fund with respect to a
Purchase Request in such Fund different from the fair market value of such Deposit Instruments on the date of such Purchase Request. This representation and warranty shall be deemed repeated with respect to each Order for one or more Creation Units
of Shares of any Fund. The Trust and the Transfer Agent and Distributor shall have the right to require information from the Participant regarding Share ownership of each Fund, and to rely thereon to the extent necessary to make a determination
regarding ownership of eighty percent (80%) or more of the currently outstanding Shares of any Fund by a Beneficial Owner or the ownership by such Participant or Participant Client in a circumstance that would not result in the Fund acquiring a
basis in the Deposit Instruments that is different from the fair market value of such Deposit Instruments on the date of such Purchase Request as a condition to the acceptance of a deposit of Deposit Instruments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. immediately after each acquisition of a Rule 144A Security by the Participant pursuant to this Agreement, it
or any Beneficial Owner of the Rule 144A Security will be a "qualified institutional buyer" as defined in Rule 144A under the 1933 Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. it has established an anti-money laundering program ("AML Program") that, at a minimum,
(i) designates a compliance officer to administer and oversee the AML Program, (ii) provides ongoing employee training, (iii) includes an independent audit function to test the effectiveness of the AML Program, (iv) establishes
internal policies, procedures, and controls that are tailored to its particular business, (v) includes a customer identification program consistent with the rules under Section 326 of the USA Patriot Act, (vi) provides for the filing
of all necessary anti-money laundering reports including, but not limited to, currency transaction reports and suspicious activity reports, (vii) provides for screening all new and existing

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customers against reports and suspicious activity reports, (viii) provides for screening all new and existing customers against the U.S. trade and economic sanctions programs administered by the U.S. Department of the Treasury's Office of Foreign Asset Control and against any other government list that is or becomes required under the USA Patriot Act, and (ix) allows for appropriate regulators to examine its anti-money laundering books and records. The Participant agrees that, throughout the term of this Agreement, it will maintain the AML Program in substantial conformity with the foregoing provisions as may be amended or supplemented by applicable U.S. federal regulations. The Participant also agrees to provide any required information about itself (including the Participant's beneficial ownership) that may be reasonably requested by Distributor to fulfill Distributor's know-your-customer and customer identification obligations, Any change in the foregoing shall result in the automatic termination of this Agreement, and Participant shall give prompt notice to the Distributor, Transfer Agent and the Trusts of such change. <br>

**5.**  **<u>AUTHORIZED PERSONS</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.  ***<u>Phone Orders and Website Orders</u>*** . Except as otherwise provided herein, Orders shall be
placed by the Participant in accordance with the Prospectus and the procedures set out in the Participant Supplement, each as provided to the Participant and currently in effect. It is acknowledged and agreed that these procedures may be revised,
supplemented and updated from time to time and made available in the Prospectus and/or the Participant Supplement and provided to the Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.  ***<u>Certification</u>*** . Concurrently with the execution of this Agreement and as requested from
time to time by the Trust and/or the Distributor but no less frequently than annually, the Participant shall deliver to the Distributor and the Trust, with copies to the Transfer Agent, a certificate (the form of which is set out in <u>Annex B</u>)
signed by the Participant's Secretary or other duly authorized official setting out the names, titles, signatures, e-mail addresses and telephone and facsimile numbers of all Authorized Persons. Such
certificate may be accepted and relied upon by the Distributor, the Transfer Agent and the Trust as conclusive evidence of the facts set forth therein and shall be considered to be in full force and effect until delivery to the Distributor and the
Trust of a superseding or amended certificate or other notice in a form approved by the Trust bearing a subsequent date. It shall be the responsibility of the Participant to ensure that the Distributor has a current list of all Authorized Persons.
Upon the termination or revocation of authority of an Authorized Person by the Participant, the Participant shall give prompt written notice of such fact to the Distributor and the Transfer Agent and such notice shall be effective upon receipt by
the Distributor and the Transfer Agent so long as such notice is provided to the Distributor and the Transfer Agent reasonably in advance of any orders or instructions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.  ***<u>PIN Numbers.</u>*** The Transfer Agent shall issue to each Authorized Person a unique personal
identification number ()"**PIN Number**") by which such Authorized Person

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and the Participant shall be identified and instructions issued by the Participant hereunder shall be authenticated. The PIN Number shall be kept confidential and provided to Authorized Persons only. The Participant represents and warrants that it has (or will establish), and will maintain, safeguards and controls against the unauthorized access to and use of PIN Numbers and that such safeguards and controls are commercially reasonable and not less than equivalent to those used by the Participant to safeguard information about its own business. If for some reason an Authorized Person's PIN Number is compromised, the Participant or such Authorized Person shall contact the Transfer Agent immediately in order for a new PIN Number to be issued. The Participant may revoke the PIN Number at any time upon written notice to the Transfer Agent. Upon receipt of such written request, the Transfer Agent shall promptly deactivate the PIN Number. If a Participant's PIN Number is changed, the new PIN Number will become effective on a date and time mutually agreed upon by the Participant and the Transfer Agent. Upon receipt of notice of termination of the authority of an Authorized Person from the Participant, the Transfer Agent shall deactivate the PIN Number of such Authorized Person. The Distributor and Transfer Agent shall be entitled to assume that all instructions issued using the Participant's PIN Number have been properly placed by an Authorized Person. The Participant will immediately notify the Trust and the Distributor of any actual, probable or reasonably suspected breach of security of its systems and/or of any actual, probable or reasonably suspected unauthorized access to a PIN Number (each, a "**Security Breach**") by sending notice to NetworkOperationsSecurityCenter@franklintempleton.com. The Participant, at its sole cost, shall: (i) promptly investigate, remedy and take any other action it or the Trust or the Distributor reasonably deems necessary regarding any Security Breach and any dispute, inquiry or claim that concerns the Security Breach; and (ii) shall provide reasonable assurance to the Trust and the Distributor that such Security Breach will not recur. The Participant agrees that the Distributor, the Transfer Agent and the Trust shall not be liable for losses incurred by the Participant as a result of unauthorized use of the Participant's PIN Number, unless the Participant shall have notified the Transfer Agent in writing a reasonable time prior to any orders or instructions that such person is not an Authorized Person as provided above and such notification has been received by the Transfer Agent. This limitation of liability shall survive termination of this Agreement. <br>

**6.**  **<u>CERTAIN REPRESENATIONS AND WARRANTIES OF PARTICIPANT AND/OR DISTRIBUTOR</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.  ***<u>Ability to Enter Into Agreement</u>*** . The Participant and Distributor hereby represents and
warrants that it (i) is duly organized, validly existing and in good standing under the laws of its state of organization, (ii) has the power and authority, and the legal right, to own its assets and to transact the business in which it is
engaged, and (iii) has the power and authority, and the legal right, to execute, deliver and perform its obligations under this Agreement and has taken all necessary action required by its governing documents or other applicable requirements of
Law to authorize the execution, delivery and performance of this Agreement. Each of the Participant

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and Distributor hereby represents and warrants that this Agreement, when executed and delivered by the Participant or the Distributor, as applicable, will constitute a legal, valid and binding obligation of it and be enforceable against it in accordance with the terms of the Agreement, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). <br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.  ***<u>Clearing Status</u>*** . The Participant hereby represents and warrants that with respect to
all Orders for the creation or redemption of Creation Units of any Fund, (i) it is a DTC Participant, (ii) it has the ability to transact through the CNS Clearing Process, and (iv) it has the ability to transact outside the CNS
Clearing Process through such processes designated by such Fund. The Participant represents, covenants and warrants that with respect to Purchase Orders or Redemption Orders of Creation Units of Shares of any Fund it has the ability to transact
through the Federal Reserve System. Any change in the foregoing status of the Participant shall automatically terminate this Agreement, and Authorized Participant shall give prompt written notice to the Distributor and the Transfer Agent of such
change.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.  ***<u>Broker Dealer Status</u>*** . The Participant hereby covenants, represents and warrants that it
is (i) registered with the SEC as a broker-dealer under the 1934 Act and a member of FINRA, or exempt from, or it is otherwise not required to be licensed as, a broker-dealer or a member of FINRA; and (ii) registered, licensed or otherwise
qualified to act as a broker or dealer in the states or other jurisdictions where it conducts its activities or its otherwise exempt. The Participant agrees that it will maintain such registrations, qualifications, and membership in good standing
and in full force and effect throughout the term of this Agreement. The Participant further agrees to comply with all applicable Federal laws, the laws of the states or other jurisdictions concerned, and the rules and regulations promulgated
thereunder and with the Constitution, By-Laws and NASD/FINRA Conduct Rules of FINRA, to the extent such laws, rules and regulations relate to Participant's Orders, offers and sales and related
transactions in, and activities with respect to, the Shares, and that it will not offer or sell Shares of any Fund of the Trust in any state or jurisdiction where they may not lawfully be offered and/or sold.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.  ***<u>Foreign Status</u>*** . If the Participant is offering and selling Shares of any Fund of the
Trust in jurisdictions outside the several states, territories and possessions of the United States and is not otherwise required to be registered, qualified, or a member of FINRA as set forth in the preceding paragraph, the Participant nevertheless
agrees to observe the applicable Law of the jurisdiction in which such offer and/or sale is made, to comply with the full disclosure requirements of the 1933 Act and the regulations promulgated thereunder and to conduct its business in accordance
with the NASD/FINRA Conduct Rules to the extent the foregoing relates to the Participant's transactions in, and activities with respect to, the Shares. Notwithstanding anything to the contrary herein, the Participant represents,

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warrants and covenants to the Distributor that Participant is an entity organized in the United States and all Orders will be placed within the United States.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.  ***<u>Potential Distributor Status</u>*** . The Participant understands and acknowledges that the
method by which Shares will be created and traded may raise certain issues under applicable securities laws, rules and regulations. For example, because new Creation Units may be issued and sold by the Trust on an ongoing basis, at any point a
"distribution", as such term is used in the 1933 Act, may occur. The Distributor and the Trust hereby caution Participant that some activities on its part, depending on the circumstances, may result in its being deemed a
participant in a distribution in a manner which could render it a statutory underwriter and subject it to the prospectus delivery and liability provisions of the 1933 Act. The Participant also understands and acknowledges that dealers who are not
"underwriters" but are effecting transactions in Shares, whether or not participating in the distribution of Shares, are generally required to deliver a Prospectus. For the avoidance of doubt, the Participant does not admit to being an
underwriter of the Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f.  ***Third-Party Platforms*** . The Participant understands, acknowledges and agrees that Orders in
Shares may be effected through an electronic or other platform maintained by an affiliate of the Transfer Agent or another third-party. The Participant hereby covenants, represents and warrants that it shall abide by the terms and conditions for the
use of any such platforms, including, without limitation, any limitations placed on the Participant's use of such platforms and any confidentiality provision or security procedure associated with such platforms, in each case in accordance with
the terms of the agreement governing such platforms.

**7.**  **<u>ROLE OF PARTICIPANT</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.  ***<u>Independent Contractor</u>*** . The Participant each acknowledges and agrees that for all
purposes of this Agreement, the Participant will be deemed to be an independent contractor, and will have no authority to act as agent for the Trust or the Distributor in any matter or in any respect. Nothing in this Agreement shall obligate the
Participant to create or redeem one or more Creation Units of Shares or to offer or sell the Shares. The Participant agrees to make itself and its employees available upon request during normal business hours to consult with a Fund or the
Distributor or their designees concerning the performance of the Participant's responsibilities under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.  ***<u>Maintenance of Records</u>*** . The Participant agrees to maintain records of all Orders
relating to Shares made by or through it as required by applicable Law, and to furnish copies of such records to the Trust or the Distributor upon the reasonable request of the Trust or the Distributor.

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**8.**  **<u>MARKETING MATERIALS AND REPRESENTATIONS</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. The Participant represents, warrants and agrees that it will not make any representations concerning Shares
other than those consistent with in the Trust's then current Prospectus or in any promotional materials or sales literature furnished to the Participant by the Trust or the Distributor. The Participant agrees not to furnish or cause to be
furnished to any person or display or publish any information or materials relating to Shares (including, without limitation, promotional materials and sales literature, advertisements, press releases, announcements, statements, posters, signs or
other similar materials), except such information and materials as may be furnished to the Participant by the Trust or the Distributor and such other information and materials as may be approved in writing by the Trust or the Distributor. The
Participant understands that the Trust and the Funds will not be advertised or marketed as open-end investment companies (i.e., as mutual funds) which offer redeemable securities, and that any advertising
materials will prominently disclose that the individual Shares are not redeemable units of beneficial interest in the Trust. In addition, the Participant understands that any advertising material that addresses redemptions of Shares, including the
Prospectus, will disclose that Shares are not individually redeemable and that the owners of Shares may acquire Shares and tender Shares for redemption to the Trust in Creation Unit aggregations only.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Notwithstanding anything to the contrary in this Agreement, the Participant and its affiliates may prepare
and circulate in the regular course of their businesses research reports, sales commentary, market color and other similar material that includes information, opinions or recommendations relating to the Shares, provided that such materials comply
with applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Participant agrees that, so long as this Agreement remains in effect, it may be identified or named as an
"Authorized Participant," or any similar designation, in any materials relating to any Fund, the Trust or as may be necessary to meet applicable legal requirements.

**9.**  **<u>IRREVOCABLE PROXY</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.  ***<u>Appointment of Irrevocable Proxy</u>*** . The Participant, from time to time, may be a
beneficial owner and/or an owner of record of Shares (within the meaning of Rule 200 of Regulation SHO). To the extent that it is a beneficial owner of Shares (within the meaning of Rule 200 of Regulation SHO), the Participant does hereby
irrevocably appoint the Distributor as its true and lawful attorney and proxy with full authorization and power to vote (or abstain from voting) the Participant's beneficially owned Shares of each Fund, which the Participant is or may be
entitled to vote at any meeting of a Fund held after the date this Agreement is executed, whether annual or special and whether or not a postponed or adjourned meeting, or, if applicable, to give written or electronic consent with respect thereto,
and to otherwise represent the Participant at the meeting with all powers possessed by the

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Participant if personally present at the meeting. The Participant hereby revokes all prior proxies for such meetings, affirms that this proxy is given in connection with the Agreement and that this proxy is coupled with an interest and is valid and irrevocable during the term set forth in paragraph c of this Section 9, and ratifies and confirms all that the proxy may lawfully do or cause to be done by virtue hereof. <br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.  ***<u>Powers of Attorney and Proxy</u>*** . The Distributor, as attorney and proxy for the
Participant under this paragraph: (i) is hereby given full power of substitution and revocation, (ii) may act through such agents, nominees or substitute attorneys and proxies as it may from time to time appoint, and (iii) may provide
voting instructions to such agents, nominees or substitute attorneys and proxies in any lawful manner deemed appropriate by it, including in writing, by telephone, telex, facsimile, electronically (including through the Internet) or otherwise. The
powers of the Distributor as attorney and proxy under this paragraph shall include (without limiting its general powers hereunder) the power to receive and waive any notice of any meeting on behalf of the Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.  ***<u>Term of Power of Attorney and Proxy</u>*** . The appointment of the Distributor as attorney and
proxy shall be deemed renewed each time Participant acquires Shares as a beneficial owner. The Distributor shall serve as an irrevocable attorney and proxy for the Participant under this Section for so long (and only so long) as this Agreement
remains in effect. This irrevocable proxy automatically shall be assigned to any successor distributor for the Trust with respect to any Fund if the Distributor ceases to act as Distributor to that Fund. The Distributor may assign this irrevocable
proxy to a successor distributor of the Trust with written notice to the Participant. In the event applicable law prevents the assignment of the irrevocable power of attorney and proxy, or deems such power of attorney and proxy to expire due to the
passage of time, the Participant hereby agrees to execute and deliver such additional documentation as may be necessary to cause the Distributor, or a successor distributor (as applicable), to serve as its attorney and proxy for the purposes
discussed in this Agreement.

**10.**  **<u>INDEMNIFICATION; LIMITATION OF LIABILITY</u>** 

This Section shall survive the termination of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. The Participant hereby agrees to indemnify and hold harmless the Distributor, the Trust, the Transfer Agent,
their respective subsidiaries, Affiliated Persons, directors, officers, employees and agents, and each person, if any, who controls such persons within the meaning of Section 15 of the 1933 Act (each a "**Participant-Indemnified Party**") from and against any loss, liability, cost and expense (including reasonable attorneys' fees, collectively "**Losses**") incurred by such Participant-Indemnified Party as a result of (i) any breach by the
Participant of any provision of this Agreement that relates to the Participant; (ii) any failure on the part of the Participant to perform any of its obligations set forth in this Agreement; (iii) any failure by the Participant to comply
with applicable Law; (iv)

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representations by the Participant, its employees or its agents or other representatives or any Participant Client about the Shares, any participant Indemnified Party or the Trust that is not included in the Trust's then-current Prospectus; (v) any untrue statement or alleged untrue statement of a material fact contained in any research reports or marketing material prepared by Participant regarding the Funds or any of them or any alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading to the extent that such statement or omission relates to the Shares or any Participant Indemnified Party unless, in either case, such representation, statements or omission was made or included by the Participant at the written direction of the Trust or the Distributor or taken verbatim (in context and without omission) from the Prospectus or marketing material prepared by the Distributor or the Trust; and (vi) actions of such Participant-Indemnified Party in reliance upon any instructions issued to the Trust, the Distributor or the Transfer Agent reasonably believed by the Trust, the Distributor and/or the Transfer Agent to be genuine and to have been given by the Participant or an Authorized Person. The foregoing shall not apply to any Losses incurred by such Participant-Indemnified Party arising out of the Participant-Indemnified Party's own fraud, bad faith, willful misconduct, gross negligence or reckless disregard of its duties hereunder. <br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. The Distributor hereby agrees to indemnify and hold harmless the Participant, and each of its respective
subsidiaries, Affiliated Persons, directors, officers, employees and agents, and each person, if any, who controls such persons within the meaning of Section 15 of the 1933 Act (each a "Distributor-Indemnified Party") from and
against any Losses incurred by such Distributor-Indemnified Party as a result of (i) any breach by the Distributor of any provision of this Agreement that relates to the Distributor; (ii) any failure on the part of the Distributor to
perform any of its obligations set forth in this Agreement; (iii) any failure by the Distributor to comply with applicable Law; (iv) any untrue statement or alleged untrue statement of a material fact contained in the Prospectus or any
alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading other than any statement made in reliance upon
information provided to the Distributor, the Trust or any other person on behalf of the Trust or the Fund by the Participant in writing and (v) actions of such Distributor-Indemnified Party in reliance upon any representations reasonably
believed by the Participant to be genuine and to have been given by the Distributor. The foregoing shall not apply to any Losses incurred by such Distributor-Indemnified Party arising out of the Distributor-Indemnified Party's own fraud, bad
faith, willful misconduct, gross negligence or reckless disregard of its duties hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Notwithstanding anything to the contrary in this Agreement, the Distributor, and the Fund will not indemnify
the Participant for any violations of the federal or state securities laws (or other applicable Law) committed by the Participant through its failure to deliver a Prospectus in connection with the offer or sale of Shares and for

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any oral or written representation or warranty by Participant that is not contained in the Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Notwithstanding anything to the contrary in this Agreement, none of the Participant, the Distributor and the
Transfer Agent shall be liable to each other for any Losses under this Agreement arising out of (i) mistakes or errors in data provided in connection with Orders except for data provided by the other or (ii) mistakes or errors by or out of
interruptions or delays of communications with a service provider to the Trust.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. Each of the Participant, the Distributor and the Transfer Agent undertakes to perform such duties and only
such duties as are expressly set forth herein, or expressly incorporated herein by reference, and no implied covenants or obligations shall be read into this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. In the absence of fraud, bad faith, gross negligence, or reckless or willful misconduct on its part, neither
the Distributor nor the Transfer Agent, whether acting directly or through agents or attorneys, shall be liable for any action taken, suffered or omitted or for any error of judgment made by any of them in the performance of their duties hereunder.
Neither the Distributor, the Participant, nor the Transfer Agent shall be liable for any error of judgment made in good faith unless the party exercising such good faith shall have been grossly negligence in ascertaining the pertinent facts
necessary to make such judgment. In no event shall any Party be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if such Parties have been advised of the likelihood
of such loss or damage and regardless of the form of action. In no event shall any Party be liable for the acts or omission of the CNS Clearing Process, DTC, NSCC, the Federal Reserve System, the Custodian or any securities depository, clearing
corporation, exchange or communications service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. No party shall be responsible or liable for any failure or delay in the performance of its obligations or
those of its agents under this Agreement arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including without limitation: acts of God; earthquakes; extreme weather events, including blizzards,
hurricanes, tornados and thunder storms, fires; floods; wards; civil or military disturbances; blackouts; terrorism; breakdowns in communications systems; riots; loss or malfunction of utilities or computer or internet services; labor disputes; acts
of civil or military authority or governmental actions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h. Neither the Transfer Agent nor the Distributor shall be required to advance, expend or risk its own funds or
otherwise incur or become exposed to financial liability in the performance of its duties hereunder.

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**11.**  **<u>THIRD PARTY BENEFICIARIES</u>** 

The Distributor and the Participant acknowledge and agree that this Agreement is entered into for, among other things, the benefit of the Trust and intend that the Trust shall be a third-party beneficiary of this Agreement and be entitled to enforce all of the terms hereof, including, without limitation, the rights granted in its favor and in favor of the Distributor, the Transfer Agent or the Custodian under this Agreement.

**12.**  **<u>NOTICES</u>** 

All notices, communications, requests and demands to or upon the respective Parties hereto to be effective shall be in writing (and if sent by mail, sent via certified or registered mail, return receipt requested) or be by confirmed facsimile transmission or email with confirmed delivery status notification. All notices shall be deemed to have been duly given or made when delivered by hand, or three Business Days after being deposited in the mail, postage prepaid, or, in the case of facsimile transmission or email transmission, when sent, addressed as follows or at such other address as such party may designate in writing (a change in a party's contact information below in accordance with this Section shall not be deemed as an amendment to this Agreement). Notwithstanding the above, delivery of any amendment or supplement to the Prospectus or Participant Supplement shall be made via email to the Authorized Persons listed on <u>Annex B</u>.

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| | |
|:---|:---|
| DISTRIBUTOR: | PARTICIPANT: |
| **Attn: Intermediary Client Onboarding <br>100 First Stamford Place**<br> **5<sup>th</sup> Floor <br>Stamford, CT 06902 <br>Telephone: (203) 703-6000 <br>Facsimile: (877) 563-3019**<br> **Email: Contracts-**<br> **us_ico@franklintempleton.com** | **Attn: <br>Telephone: <br>Facsimile:**<br> **Email:** |
| TRANSFER AGENT: | IF TO THE TRUST: |
| **Attn: ETF Services Group <br>101 Barclay Street**<br> **New York, NY 10286** | **Attn: Navid J. Tofigh**<br> **Senior Associate General Counsel**<br> **One Franklin Parkway**<br> **San Mateo, CA 94403-1906**<br> **<br>Telephone: (650) 312-3492**<br> **Facsimile:**<br> **Email: navid.tofigh@franklintempleton.com** |

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**13.**  **<u>COMMENCEMENT OF TRADING</u>** 

The Participant may not submit an Order pursuant to this Agreement until five Business Days after effectiveness of this Agreement or a date agreed upon by the Distributor and the Participant; provided, however, that this Agreement shall be immediately effective if the execution of this Agreement supersedes another Authorized Participant Agreement among the Parties that is currently in effect.

**14.**  **<u>DEFINITIONS</u>** 

The capitalized terms used in this Agreement are defined as follows. Any capitalized terms used herein that are not defined shall have the meaning set forth in the Prospectus or in the Participant Supplement. The terms defined below shall include the plural or singular thereof as the context may require.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. "1933 Act" means the Securities Act of 1933, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. "1934 Act" means the Securities Exchange Act of 1934, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. "1940 Act" has the meaning provided in the recitals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. "Affiliated Person" shall have the meaning given to it by Section 2(a)(3) of the 1940 Act,
subject to such exemptions as may be granted by the Securities and Exchange Commission by any rule, regulation or order applicable to the Trust or its investment adviser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. "Agreement" has the meaning set forth in the preamble hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. "Authorized Person" means a person that is authorized to give instructions relating to any
activity contemplated by this Agreement or any other notice, request or instruction on behalf of the Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. "Beneficial Owner" shall have the meaning given to it by Rule 16a-1(a)(2) of the 1934 Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h. "Business Day" shall mean each day the exchange on which a Fund is listed is open for regular
trading.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. "Cash Amount" means, (1) in the case of a purchase of a Creation Unit, an amount of cash
equal to the difference between the total aggregate value of the Deposit Instruments and the NAV of the Creation Unit; and (2) in the case of a redemption of a Creation Unit, an amount of cash equal to the difference between the NAV of the
Creation Unit being redeemed and the total aggregate value of the Redemption Instruments delivered by the Fund in consideration for the Creation Unit, in such case including any cash in lieu amounts.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j. "Cash Component" means an amount of cash sufficient to pay any applicable transaction fee,
redemption fee and any additional fixed and/or variable charges applicable to purchase or redemption transactions effected fully or partially in cash (when, in the sole discretion of the Trust, cash transactions are available or specified), in each
case, as disclosed in the Prospectus for the applicable Fund. Without limiting the generality of the foregoing, the term "Cash Component" shall also include any fees, costs and expenses (including, without limitation, reasonable
attorneys fees) incurred by a Fund in taking possession of, liquidation of or other use of any collateral posted in lieu of delivery of Deposit Instruments or Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;k. "CNS Clearing Process" means the applicable clearing process specified for any Fund, including
but not limited to those effected through the facilities of DTC, the CNS System, Euroclear, the Custodian, local subcustodians and/or any subset or combination thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;l. "CNS System" means the Continuous Net Settlement clearing processes of NSCC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;m. "Code" means the Internal Revenue Code of 1986, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;n. "Contractual Settlement Date" means the date as specified in the Prospectus or in the
Participant Supplement upon which delivery of Deposit Instruments, Shares and/or any Cash Amount and/or Cash Component, as applicable, must be made by the Participant to the Trust.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o. "Creation Unit" means an aggregation of a specified number of Shares as stated in the Prospectus
for the applicable Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;p. "Custodian" means The Bank of New York Mellon or such other custodian as the Trust may specify
from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;q. "Deposit Instruments" means an in-kind deposit of a
designated portfolio of equity or fixed-income securities or other financial instruments as determined from time to time in the sole discretion of the Trust in accordance with the terms of the Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;r. "Distributor" has the meaning set out in the preamble hereto and shall apply to any other
distributor as the Trust may specify from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;s. "DTC" means The Depository Trust Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;t. "DTC Participant" means a person that is eligible and authorized to participate in the DTC
direct registration system.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;u. "ETF Exemptive Order" means the exemptive order issued by the SEC to the Trust (Investment
Company Act Release No. 31920), as the same may be amended from time to time.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;v. "Federal Reserve System" means the central banking system of the United States.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;w. "FINRA" means the Financial Industry Regulatory Authority, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;x. "Fund" has the meaning set out in the recitals and may include Funds that are formed and offered
after the date of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;y. "Fund Information" has the meaning set out in <u>Section</u> <u>1(h)</u> hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;z. "Law" means any rule, regulation, statute, order, ordinance, guideline, pronouncement, code or
other legally enforceable requirement, including common law, state and federal laws or securities laws and laws of foreign jurisdictions and, with respect to a Party, the rules and regulations of any SRO of which such Party or, to the extent
relevant to the performance of a Party's obligations under this Agreement, such Party's Affiliated Person, is a member or securities market on which Shares are listed.

aa. "Losses" has the meaning set out in <u>Section</u> <u>10(a)</u> hereto.

bb. "NAV" means net asset value.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;cc. "NSCC" means the National Securities Clearing Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;dd. "Orders" means either Purchase Requests or Redemption Orders or both, as the context requires.

ee. "Participant" has the meaning set out in the preamble hereto.

ff. "Participant Client" means any party on whose behalf the Participant acts in connection with an Order (whether a customer or otherwise).

gg. "Participating Party" means a Participant who is a member of the NSCC and a participant in the CNS System of NSCC.

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| | |
|:---|:---|
| hh. | "Participant Supplement" means the handbook and other supplemental materials that accompany, or are made available in connection with, this Agreement that provide revised or additional procedures with respect to a Participant's transactions with the Distributor and the Trust, as they may be amended from time to time by the Distributor or the Trust and made available to the Participant. The Participant Supplement is incorporated by reference into this Agreement and hereby made a part hereof. It is acknowledged and agreed that the Participant Supplement may be made available solely in an electronic format accessible via the internet. Any changes to the Participant Supplement made available to the Participant subsequent to the date of this Agreement shall also be deemed incorporated by reference herein.  |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. "Party" means the Distributor, the Participant and the third-party beneficiaries named in <u>Section</u> <u>11</u> hereto.

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jj. "Pin Number" has the meaning set out in <u>Section</u> <u>5(c)</u> hereto.

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| | |
|:---|:---|
| kk. | "Portfolio Deposit" means the requisite Deposit Instruments and, if applicable, a Cash Amount.  |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ll. "Prospectus" means each Fund's current prospectus, any prospectus supplement and the
statement of additional information included in the Trust's effective registration statement, as supplemented and/or amended from time to time, the contents of which are hereby incorporated into this Agreement by reference.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;mm. "Purchase Request" means an irrevocable order to purchase Shares by a Participant.

nn. "Redemption Instruments" means in-kind redemption proceeds of a designated portfolio of securities or other financial instruments as determined from time to time in the sole discretion of the Trust.

oo. "Redemption Order" means a request to redeem Shares by a Participant.

pp. "Rule 144A Security" has the meaning set forth in <u>Section</u> <u>2(e)</u> hereof.

qq. "SEC" means the U.S. Securities and Exchange Commission.

rr. "Security Breach" has the meaning set out in <u>Section</u> <u>5(c)</u> hereof.

ss. "Shares" has the meaning set out in the recitals and shall refer to (i) shares of beneficial interest for a Trust organized as a business, statutory or similar trust or as a partnership and (ii) shares of common stock for a Trust organized as a corporation.

tt. "SRO" means any self-regulatory organization as such term is defined under the 1934 Act.

uu. "Transfer Agent" means The Bank of New York Mellon and shall apply to any other transfer agent as the Trust may specify from time to time upon notice to the Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vv. "Trust" means the registered investment company or companies listed on <u>Annex A</u>, as such <u>Annex A</u> may be revised or supplemented from time to time by the Distributor and provided to the Participant. To the extent more than one Trust is listed on <u>Annex A</u> hereto, this Agreement shall apply to each Trust individually
and all references to the "Trust" shall include each Trust as if such Trust was specifically named in the body of this Agreement.

**15.**  **<u>INCORPORATION BY REFERENCE AND PROSPECTUS CONTROLLING</u>** 

The Participant acknowledges receipt of the Participant Supplement, represents that it has reviewed such document and understands the terms thereof, and further acknowledges that

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the information and procedures contained therein are incorporated herein by reference. The Participant also acknowledges and agrees that the Prospectus for each Fund may contain, among other things, procedures relating to the creation and redemption of Shares. The Participant hereby acknowledges and agrees that it has the responsibility of reviewing and obtaining familiarity with the Prospectus for the Shares of each Fund in which it transacts. In the event that any information contained in the Participant Supplement is in conflict with the information disclosed in the Prospectus for a Fund, the information contained in the Prospectus shall be controlling.

**16.**  **<u>EFFECTIVENESS, TERMINATION, AMENDMENT AND ASSIGNMENT</u>** 

This Agreement shall become effective in this form upon delivery to and execution by the Distributor. This Agreement may be terminated immediately pursuant to any automatic termination provision included herein or at any time by any Party upon sixty days prior written notice to the other Parties and may be terminated earlier by a Party at any time in the event of a breach by the other Party of any provision of this Agreement or the procedures described or incorporated herein. This Agreement supersedes any prior such agreement of the same subject matter between or among the Parties, including without limitation all prior authorized participant agreements with respect to the Trust. This Agreement may not be amended except by a writing signed by all the Parties hereto. For the avoidance of doubt, it is acknowledged and agreed that changes in procedures stated in the Prospectus or Participant Supplement shall not be considered an amendment to this Agreement and shall be effective immediately. This Agreement may not be assigned by the Participant, except in connection with the sale of all or substantially all of the Participant's business to another party. In the event that another principal underwriter replaces the Distributor as the principal underwriter of the Trust, this Agreement will be deemed to be assigned by the Distributor to such replacement principal underwriter upon notice to, but without any further consent of, the Participant or the Distributor.

**17.**  **<u>ACKNOWLEDGEMENT</u>** 

The Participant acknowledges receipt of the Prospectus and the Participant Supplement, represents it has reviewed the Prospectus and the Participant Supplement, understands the terms thereof, and it further acknowledges that the procedures contained in the Prospectus and in the Participant Supplement pertaining to the creation and redemption of Shares are incorporated herein by reference.

**18.**  **<u>GOVERNING LAW</u>** 

This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York. THE PARTIES IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE OR UNITED STATES FEDERAL COURT SITTING IN NEW YORK CITY AND THE APPELATE COURTS THEREFROM OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT. EACH PARTY HERETO IRREVOCABLY

------

WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.

**19.**  **<u>DELEGATION</u>** 

It is acknowledged and agreed by the Parties that any action contemplated to be taken by the Trust (including on behalf of itself or any Fund), in the sole discretion of the Trust, may be taken or accomplished by a designee of the Trust.

**20.**  **<u>COUNTERPARTS; SEVERANCE</u>** 

This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. If any provision of this Agreement is held by any court or any act, regulation, rule or decision of any other governmental or supranational body or authority or regulatory or self-regulatory organization to be invalid, illegal or unenforceable for any reason, it shall be invalid, illegal or unenforceable only to the extent so held and shall not affect the validity, legality or enforceability of the other provisions of this Agreement so long as this Agreement, as so modified, continues to express, without material change, the original intentional of the parties as to the subject matter of this Agreement and the deletion of such portion of this Agreement will not substantially impair the respect benefits, obligations or expectations of the Parties to this Agreement.

------

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered as of the day and year written below.

DATED:

---

| |
|:---|
| **[Authorized Participant]** |
| By: |
| Name: |
| Title: |

---

---

| |
|:---|
| **FRANKLIN DISTRIBUTORS, LLC** |
| By: |
| Name: |
| Title: |

---

---

| |
|:---|
| **Accepted by:** |
| THE BANK OF NEW YORK MELLON, as |
| Transfer Agent |
| By: |
| Name: |
| Title: |

---

------

**Annex A** 

**FRANKLIN TEMPLETON ETF TRUST** 

**FRANKLIN ETF TRUST** 

**LEGG MASON ETF INVESTMENT TRUST** 

**PUTNAM ETF TRUST** 

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**ANNEX B** 

**CERTIFICATE DESIGNATING AUTHORIZED PERSONS** 

The following employees of **__________** (each, an "Authorized Person") are authorized, in accordance with the Authorized Participant Agreement between **__________** and Franklin Distributors LLC, as such Agreement may be amended from time to time, to act as agent of **__________** to submit purchase request and redemption orders ("Orders") on behalf of **__________** and to give instructions or any other notice or request on behalf of **__________** with respect to such Orders or any other activity contemplated by the Authorized Participant Agreement.

**<u>SECTION A</u>**—List of Current Authorized Persons

---

| | |
|:---|:---|
| Name: | Name: |
| Title: | Title: |
| E-mail: | E-mail: |
| Telephone: | Telephone: |
| Fax: | Fax: |
| Signature: | Signature: |
| Name: | Name: |
| Title: | Title: |
| E-mail: | E-mail: |
| Telephone: | Telephone: |
| Fax: | Fax: |
| Signature: | Signature: |
| Name: | Name: |
| Title: | Title: |
| E-mail: | E-mail: |
| Telephone: | Telephone: |
| Fax: | Fax: |
| Signature: | Signature: |
| Name: | Name: |
| Title: | Title: |
| E-mail: | E-mail: |
| Telephone: | Telephone: |
| Fax: | Fax: |
| Signature: | Signature: |

---

------

---

| | |
|:---|:---|
| Name: | Name: |
| Title: | Title: |
| E-mail: | E-mail: |
| Telephone: | Telephone: |
| Fax: | Fax: |
| Signature: | Signature: |

---

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**<u>SECTION B</u>**—List of Changes to Authorized Persons

---

| | |
|:---|:---|
| The following persons who were not designated as Authorized Persons on Participant's previous Certificate have been added as Authorized Persons: | The following persons who were included on the Participant's previous Certificate are no longer Authorized Persons: |
| 1. | 1. |
| 2. | 2. |
| 3. | 3. |
| 4. | 4. |

---

The undersigned, does hereby certify that the persons listed in Section A above have been duly authorized to act as Authorized Persons pursuant to the Authorized Participant Agreement.

---

| |
|:---|
| By: |
| Name: |
| Title: |
| Date: |

---

## Ex-99.(G)(1)

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| | |
|:---|:---|
| **BNY AND CUSTOMER CONFIDENTIAL** | **EXECUTION** |

---

![LOGO](g842776dsp270.jpg)

**CUSTODY AGREEMENT** 

**By and Between** 

**THE BANK OF NEW YORK MELLON** 

**And** 

**Putnam ETF Trust** 

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**BNY AND CUSTOMER CONFIDENTIAL** 

**TABLE OF CONTENTS** 

---

| | |
|:---|:---|
| **1. DEFINITIONS** | **1** |
| **2. APPOINTMENT OF CUSTODIAN; ACCOUNTS** | **4** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 Appointment of Custodian | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 Establishment of Accounts | 5 |
| **3. AUTHORIZED PERSONS AND INSTRUCTIONS; ELECTRONIC ACCESS** | **6** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 Authorized Persons | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 Instructions | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 BNY Actions Without Instructions | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4 Funds Transfers | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5 Electronic Access | 8 |
| **4. SUBCUSTODIANS, DEPOSITORIES AND AGENTS** | **8** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 Use of Subcustodians and Depositories | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 Liability for Subcustodians | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 Liability for Depositories | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4 Use of Agents | 10 |
| **5. CORPORATE ACTIONS** | **10** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 Notification | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 Exercise of Rights | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 Partial Redemptions, Payments, Etc. | 10 |
| **6. SETTLEMENT** | **11** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 Settlement Instructions | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 Settlement Funds | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 Settlement Practices | 11 |
| **7. TAX MATTERS** | **11** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 Tax Obligations | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 Payments | 12 |
| **8. CREDITS AND ADVANCES** | **12** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 Contractual Settlement and Income | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2 Advances | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3 Payment | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4 Securing Payment | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.5 Setoff | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.6 Currency Conversion | 14 |
| **9. STATEMENTS; BOOKS AND RECORDS; THIRD PARTY DATA** | **14** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1 Statements | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2 Books and Records/Compliance Matters | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3 Third Party Data | 16 |
| **10. DISCLOSURES** | **16** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1 Required Disclosure | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2 Foreign Exchange Transactions | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3 Investment of Cash | 17 |

---

i

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| | |
|:---|:---|
| **11. REGULATORY MATTERS** | **17** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1 USA PATRIOT Act | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.2 Sanctions; Anti-Money Laundering | 18 |
| **12. COMPENSATION** | **19** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.1 Fees and Expenses | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.2 Other Compensation | 19 |
| **13. REPRESENTATIONS, WARRANTIES AND COVENANTS** | **19** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.1 BNY | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.2 Customer | 20 |
| **14. LIABILITY** | **21** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.1 Standard of Care | 21 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.2 Limitation of Liability | 21 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.3 Force Majeure | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.4 Indemnification | 23 |
| **15. CONFIDENTIALITY** | **24** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.1 Confidentiality Obligations. | 24 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.2 Exceptions | 26 |
| **16. TERM AND TERMINATION** | **26** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.1 Term | 26 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.2 Termination | 27 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.3 Effect of Termination | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.4 Survival | 28 |
| **17. GENERAL** | **28** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.1 Non-Custody Assets | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.2 Assignment | 29 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.3 Amendment | 30 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.4 Governing Law/Forum | 30 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.5 Business Continuity/Disaster Recovery/Information Security | 30 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.6 Non-Fiduciary Status | 32 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.7 Notices | 32 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.8 Entire Agreement | 32 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.9 No Third Party Beneficiaries | 32 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.10 Counterparts/Facsimile | 32 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.11 Interpretation | 33 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.12 No Waiver | 33 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.13 Headings | 33 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.14 Severability | 33 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.15 Key Performance Indicators | 33 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.16 Limitation of Customer Liabilities | 34 |

---

ii

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**CUSTODY AGREEMENT** 

This Custody Agreement is made and entered into as of the latest date set forth on the signature page hereto (the "**Effective Date**") by and between THE BANK OF NEW YORK MELLON, a New York state chartered bank ("**BNY**"), and Putnam ETF Trust, on behalf of its series listed on Appendix I (each a "**Customer**"). BNY and Customer are collectively referred to as the "**Parties**" and individually as a "**Party**".

**RECITALS** 

WHEREAS, Customer wishes to appoint BNY as the custodian of certain of its assets, and BNY is willing to provide such services on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and intending to be legally bound, the Parties agree as follows.

**1.** **DEFINITIONS** 

Whenever used in this Agreement, the following words have the meanings set forth below:

"**1940 Act**" means the U.S. Investment Company Act of 1940, as amended.

"**Account**" or "**Accounts**" has the meaning set forth in Section 2.2.

"**Act**" has the meaning set forth in Section 10.1(a).

"**Affiliate**" means, with respect to any entity, any other entity that directly or indirectly controls, is controlled by or under common control with such entity.

"**Affiliate Securities**" has the meaning set forth in Section 8.4.

"**Agreement**" means, collectively, this Custody Agreement, any Exhibits hereto and any other documents incorporated herein by reference.

"**Anticipated Improvement**" has the meaning set forth in Section 17.15(b)(ii).

"**Anti-Money Laundering Laws**" means all anti-money laundering and counter-terrorist financing laws, rules, regulations, executive orders and requirements administered by any governmental authority of the United States (including the U.S. Bank Secrecy Act, the U.S.A. PATRIOT Act, the Money Laundering Control Act, and regulations of the U.S. Treasury Department which implement such acts) or any other applicable domestic or foreign authority with jurisdiction over Customer.

"**Assets**" has the meaning set forth in Section 2.1(a).

"**Authorized Person**" has the meaning set forth in Section 3.1.

"**BNY**" has the meaning set forth in the introductory paragraph.

"**Cash**" means the money and currency of any jurisdiction which BNY accepts for deposit in an Account.

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"**Confidential Information**" means, with respect to a Party, the terms of this Agreement and all non-public business and financial information of such Party (including, with respect to Customer, information regarding the Accounts and including, with respect to BNY, information regarding its practices and procedures related to the services provided hereunder) disclosed to the other Party in connection with this Agreement. For the avoidance of doubt, Confidential Information shall include (a) any data or information that is competitively sensitive material, and not generally known to the public, including, but not limited to, information about product plans, marketing strategies, finances, operations, customer relationships, customer profiles, customer lists, sales estimates, business plans, and internal performance results relating to the past, present or future business activities of Customer or BNY and their respective subsidiaries and affiliated companies; (b) any scientific or technical information, design, process, procedure, formula, index methodology, or improvement that is commercially valuable and secret in the sense that its confidentiality affords Customer or BNY, as applicable, a competitive advantage over its competitors; (c) all confidential or proprietary concepts, documentation, reports, data, specifications, computer software, source code, object code, flow charts, databases, inventions, know-how, and trade secrets, whether or not patentable or copyrightable; and (d) anything designated as confidential.

"**Customer**" has the meaning set forth in the introductory paragraph.

"**Customer Data**" has the meaning set forth in Section 17.5(b).

"**Data Terms Website**" means *http://www.bny.com/products/assetservicing/vendoragreement.pdf* or any successor website the address of which is provided by BNY to Customer.

"**Defaulting Party**" has the meaning set forth in Section 16.2(a).

"**Depository**" means the Depository Trust Company, Euroclear, Clearstream Banking S.A, the Canadian Depository System, CLS Bank and any other securities depository, book-entry system or clearing agency authorized to act as a system for the central handling of securities pursuant to the laws of the applicable jurisdiction, and any successors to, and/or nominees of, any of the foregoing.

"**Documents**" shall mean such other documents, including but not limited to, Board resolutions, including resolutions of the Customer's Board authorizing the execution, delivery and performance of this Agreement by the Customer, and opinions of outside counsel, as BNY may reasonably request from time to time, in connection with its provision of services under this Agreement.

"**Effective Date**" has the meaning set forth in the introductory paragraph.

"**Electronic Access Services**" means such services made available by BNY or a BNY Affiliate to Customer to electronically access information relating to the Accounts and/or transmit Instructions.

"**Electronic Signature**" means an image, representation or symbol inserted into an electronic copy of the Agreement by electronic, digital or other technological methods.

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"**Foreign Depository**" means an "Eligible Securities Depository" (as defined in Rule 17f-7 under the 1940 Act) identified by BNY to Customer from time to time.

"**Initial Term**" has the meaning set forth in Section 16.1(a).

"**Instructions**" means, with respect to this Agreement, instructions issued to BNY by way of (a) one of the following methods (each as and to the extent specified by BNY as available for use in connection with the services hereunder): (i) the Electronic Access Services; (ii) third-party electronic communication services containing, where applicable, appropriate authorization codes, passwords or authentication keys, or otherwise appearing on their face to have been transmitted by an Authorized Person or (iii) third-party institutional trade matching utilities used to effect transactions in accordance with such utility's customary procedures or (b) such other method as may be agreed upon by the Parties and that appear on their face to have been transmitted by an Authorized Person in accordance with such methods.

"**ISP**" has the meaning set forth in Section 17.5(b).

"**KPI**" or "**KPIs**" has the meaning set forth in Section 17.15(a).

"**Market Data**" means pricing, valuations or other commercially sourced data applicable to any Security. Market Data also includes security identifiers, bond ratings and classification data.

"**Market Data Providers**" means vendors and analytics providers and any other Person providing Market Data to BNY.

"**New Customer**" has the meaning set forth in Section 17.3.

"**New Series**" has the meaning set forth in Section 17.3.

"**Non-Custody Assets**" has the meaning set forth in Section 17.1.

"**Non-Renewal Notice**" has the meaning set forth in Section 16.1(b).

"**Oral Instructions**" means, with respect to this Agreement, spoken Instructions issued to BNY and reasonably believed by BNY to be from an Authorized Person.

"**Other Party**" has the meaning set forth in Section 16.2(a).

"**Party**" or "**Parties**" has the meaning set forth in the introductory paragraph.

"**Person**" or "**Persons**" means any entity or individual.

"**Plan Period**" has the meaning set forth in Section 17.15(b)(ii).

"**Rectification Trigger**" has the meaning set forth in Section 17.15(b).

"**Rectification Plan**" has the meaning set forth in Section 17.15(b)(ii).

"**Renewal Term**" has the meaning set forth in Section 16.1(b).

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"**Sanctions**" means all economic sanctions laws, rules, regulations, executive orders and requirements administered by any governmental authority of the United States (including the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury) or any other applicable domestic or foreign authority with jurisdiction over Customer.

"**Securities**" means all (a) debt and equity securities and (b) instruments representing rights or interests therein, including rights to receive, subscribe to or purchase the foregoing; in each case as may be agreed upon from time to time by BNY and Customer and which are from time to time delivered to or received by BNY and/or any Subcustodian for deposit in an Account.

"**Security Incident**" means any known (i) loss or unauthorized access, disclosure, use, alteration or destruction of Customer's Confidential Information provided to BNY in accordance with the Agreement and when in BNY's possession or under BNY's control.

"**Series**" means the respective portfolios, if any, of Customer listed on Appendix I to this Agreement. If no portfolios are listed on Appendix I to this Agreement, then a reference to a Series means Customer.

"**Standard of Care**" has the meaning set forth in Section 14.1.

"**Subcustodian**" means a bank or other financial institution (other than a Depository) that is selected and used by BNY or a BNY Affiliate (acting as subcustodian) in connection with the settlement of transactions and/or custody of Assets hereunder, and any successors to, and/or nominees of, any of the foregoing.

"**Tax Information**" means all accurate, relevant and necessary information with respect to the Accounts or with respect to Customer's identification or classification for purposes of Tax Obligations, in each case as may be required by applicable tax laws or by a tax authority inquiry, or as may be requested by BNY in connection with the matters in Section 7.

"**Tax Obligations**" means taxes, withholding, certification and reporting requirements, claims for exemptions or refund, interest, penalties, additions to tax and other related expenses.

"**Third Party Data**" has the meaning set forth in Section 9.3(a)

"**UCC**" has the meaning set forth in Section 2.2.

**2.** **APPOINTMENT OF CUSTODIAN; ACCOUNTS** 

**2.1** **Appointment of Custodian** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Customer, on behalf of its Series, hereby appoints BNY as custodian of all Securities and Cash to be held
under, and in accordance with the terms of, this Agreement (collectively, "**Assets** "), and BNY hereby accepts such appointment. BNY agrees to keep safely all Cash, securities and other assets of each Series, delivered to BNY in
accordance with the provisions of this Agreement and applicable statutes, laws, rules and regulations applicable to the services based on the market in which such Assets are held, and agrees to perform the duties of

------

such custodian in accordance with the provisions of this Agreement and all statutes, laws, rules and regulations based on the market in which the Assets are held and with which BNY or the Series are required to comply in the performance of the services set forth in this Agreement. The Parties acknowledge and agree that BNY's duties pursuant to such appointment will be limited solely to those duties expressly undertaken pursuant to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding the foregoing, BNY has no obligation:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) With respect to any Assets until they are actually received in an Account;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) To inquire into, make recommendations, supervise or determine the suitability of any transactions affecting any
Account or to question any Instructions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) To monitor the Securities in the Accounts to determine whether Customer complies with limitations on ownership
or any restrictions on investors provided for by local law, regulations or market practice, or provisions in the issuer's articles of incorporation or by-laws;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) To determine the adequacy of title to, or the validity or genuineness of, any Assets received by it or
delivered by it pursuant to this Agreement; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) With respect to any matters related to: the establishment, maintenance operation or termination of Customer; or
the offer, sale or distribution of the shares of, or interests in, Customer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Operational terms, procedures and processes supporting the services described herein are set out in a separate
service level description, a current version of which will be available upon request at any time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Cash held hereunder may be subject to additional deposit terms and conditions issued by BNY or the applicable
Subcustodian from time to time, including rates of interest and deposit account access.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) If Customer engages in securities lending activities, such activities will be subject to certain additional
and/or modified terms to be set forth in a separate written agreement between Customer and BNY or a BNY Affiliate.

**2.2** **Establishment of Accounts** 

BNY will establish and maintain a separate account for each Series in which BNY will hold Assets relating to the relevant Series as provided herein (each, an "**Account**," and collectively, the "**Accounts**"). The Account of each Series established under this Agreement shall be maintained separately from the Account of each other Series and shall be in the name of the applicable Series. An Account shall be deemed to consist of a "securities account" (within the meaning of Section 8-501(a) of the New York Uniform Commercial Code, as in effect from time to time (the "**UCC**") for purposes of the UCC with respect to securities and security entitlements and a "deposit account" (within the meaning of Section 9-102 of the UCC) for purposes of the UCC with respect to cash deposited in or credited to an Account. The Parties agree that with respect to the part of an Account

------

consisting of a "securities account," Custodian is acting as a "securities intermediary" within the meaning of Article 8 of the UCC and intend that all Securities and other assets (other than cash and those assets precluded by Section 8-501(d) of the UCC) held in the part of the Account consisting of a "securities account" shall be treated as "financial assets" as that term is used in the UCC.

**3.** **AUTHORIZED PERSONS AND INSTRUCTIONS; ELECTRONIC ACCESS** 

**3.1** **Authorized Persons** 

Promptly following the Effective Date, Customer and/or its designee (including any of Customer's investment managers) will furnish BNY with one or more written lists or other documentation acceptable to BNY specifying the names and titles of, or otherwise identifying, all Persons authorized to act on behalf of Customer (with respect to a particular Series, if applicable) with respect to this Agreement (each, an "**Authorized Person**"). Customer will be responsible for keeping such lists and/or other documentation current, and will update such lists and/or other documentation, as necessary from time to time, pursuant to Instructions.

**3.2** **Instructions** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Except as otherwise expressly provided in this Agreement, BNY will have no obligation to take any action
hereunder unless and until it receives Instructions issued in accordance with this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Customer will be responsible for ensuring that (i) only Authorized Persons issue Instructions to BNY and
(ii) all Authorized Persons safeguard and treat with extreme care any user and authorization codes, passwords and authentication keys used in connection with the issuance of Instructions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Where Customer may or is required to issue Instructions, such Instructions will be issued by an Authorized
Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) BNY will be entitled to deal with any Authorized Person until notified otherwise pursuant to Instructions, and
will be entitled to act and rely upon any Instruction received by BNY.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) All Instructions must include all information necessary and must be delivered using such methods as are
described or otherwise contemplated in the definition of "Instructions" and in such format as BNY may reasonably require and be received within BNY's established cut-off times and otherwise
in sufficient time, to enable BNY to act upon such Instructions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) BNY may in its reasonable sole discretion decline to act upon any Instructions that do not comply with
requirements set forth in Section 3.2(e) or that conflict with applicable law or regulations or BNY's operating policies and practices, in which event BNY will promptly notify Customer unless prevented from doing so by applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Customer acknowledges that while it is not part of BNY's normal practices and procedures to accept Oral
Instructions, BNY may in certain limited circumstances

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accept Oral Instructions. In such event, such Oral Instructions will be deemed to be Instructions for purposes of this Agreement. An Authorized Person issuing such an Oral Instruction will promptly confirm such Oral Instruction to BNY in writing. Notwithstanding the foregoing, Customer agrees that the fact that such written confirmation is not received by BNY, or that such written confirmation contradicts the Oral Instruction, will in no way affect (i) BNY's reliance on such Oral Instruction or (ii) the validity or enforceability of transactions authorized by such Oral Instruction and effected by BNY.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Customer acknowledges and agrees that it is fully informed of the protections and risks associated with the
various methods of transmitting Instructions to BNY and that there may be more secure methods of transmitting Instructions than the method selected by the sender. Customer agrees that the security procedures, if any, to be followed by Customer and
BNY with respect to the transmission and authentication of Instructions provide to Customer a commercially reasonable degree of protection in light of its particular needs and circumstances.

**3.3** **BNY Actions Without Instructions** 

Notwithstanding anything to the contrary set forth in this Agreement, Customer hereby authorizes BNY, without Instructions, to take any administrative or ministerial actions with respect to the Accounts that it deems in good faith reasonably necessary or appropriate to perform its obligations under this Agreement, including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Receive income and other payments due to the Accounts; provided, however, that BNY will have no duty to pursue
collection of any amount due to an Account, including for Securities in default, if such amount is not paid when due;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Carry out any exchanges of Securities or other corporate actions not requiring discretionary decisions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Facilitate access by Customer or its designee to ballots or online systems to assist it in the voting of
proxies received by BNY in its capacity as custodian for eligible positions of Securities held in the Accounts (excluding bankruptcy matters), all of which will be exercised by Customer or its designee and not by BNY;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Forward to Customer or its designee information (or summaries of information) that BNY receives in its capacity
as custodian from Depositories or Subcustodians concerning Securities in the Accounts (excluding bankruptcy matters);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Forward to Customer or its designee an initial notice of bankruptcy cases relating to Securities held in the
Accounts and a notice of any required action related to such bankruptcy cases as may be received by BNY in its capacity as custodian. BNY will take no further action nor provide further notification related to the bankruptcy case;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Unless otherwise elected by Customer, and in accordance with BNY's standard terms and conditions, provide
class action filing services for settled claims related to Securities with industry recognized identifiers;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Endorse for collection checks, drafts or other negotiable instruments received for the Accounts; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Execute and deliver, solely in its capacity as custodian, certificates, documents or instruments incidental to
BNY's performance under this Agreement.

**3.4** **Funds Transfers** 

With respect to each Instruction for a Cash transfer, when the Instruction is to credit or pay a party by both a name and a unique numeric or alpha-numeric identifier (e.g., IBAN or ABA or account number), BNY and any other bank participating in the Cash transfer will be entitled to rely solely on such numeric or alpha-numeric identifier, even if it identifies a party different from the party named. Such reliance on an identifier will apply to beneficiaries named in the Instruction, as well as any financial institution that is designated in the Instruction to act as an intermediary in such Cash transfer. To the extent permitted by applicable law, the Parties will be bound by the rules of any transfer system used to effect a Cash transfer under this Agreement.

**3.5** **Electronic Access** 

If Customer elects to use the Electronic Access Services in connection with this Agreement, the use thereof will be subject to any terms and conditions contained in a separate written agreement between the Parties or their Affiliates. However, if an Authorized Person elects, with BNY's prior consent, to transmit Instructions through a third-party electronic communications service, BNY will not be responsible or liable for the reliability or availability of any such service.

**4.** **SUBCUSTODIANS, DEPOSITORIES AND AGENTS** 

**4.1** **Use of Subcustodians and Depositories** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) BNY will be entitled to utilize Subcustodians and Depositories in connection with its performance hereunder;
provided that BNY will not utilize a Subcustodian that is an "Eligible Foreign Custodian" (as defined in Rule 17f-5 under the 1940 Act) to hold "Foreign Assets" (as defined in such Rule 17f-5) until after BNY is informed, pursuant to such means as determined by BNY, that Customer's board of directors or similar governing body or Customer's "Foreign Custody Manager" (as
defined in such Rule 17f-5) has determined that utilization of such Subcustodian satisfies the applicable requirements of such Rule 17f-5.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) BNY will only utilize Subcustodians that have entered into an agreement with BNY or a BNY Affiliate, and Assets
held through a Subcustodian will be held subject to the terms and conditions of such Subcustodian's respective agreement. If, at any time, a Series suffers or incurs any loss, damage, cost, expense, liability or claim as a result of any action
or omission on the part of any Subcustodian, then, to the extent that BNY has a claim in connection therewith against such Subcustodian, BNY shall use commercially reasonable efforts to pursue such claim on behalf of the applicable Series and shall
promptly remit to the account of such Series the amount of any recovery by BNY in connection therewith (less reasonable expenses incurred by BNY).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Assets deposited in a Depository will be held subject to the rules, procedures, terms and conditions of such
Depository. Subcustodians may hold Assets in Depositories in which such Subcustodians participate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) In connection with each Depository utilized by BNY that is a "securities depository" (as defined in
Rule 17f-4 under the 1940 Act), BNY (a) will exercise due care in accordance with reasonable commercial standards in discharging its duties as a securities intermediary to obtain and thereafter maintain
Securities or financial assets deposited or held in such Depository and (b) will provide, promptly upon request by Customer, such reports as are available concerning the internal accounting controls and financial strength of BNY.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) With respect to each Foreign Depository, BNY will exercise reasonable care, prudence and diligence (a) to
provide Customer with an analysis of the custody risks associated with maintaining Assets with the Foreign Depository and (b) to monitor such custody risks on a continuing basis and promptly notify Customer of any material change in such risks.
Customer acknowledges and agrees that such analysis and monitoring will be made on the basis of, and limited by, information gathered from certain Subcustodians or through publicly available information otherwise obtained by BNY, and will not
include any evaluation of the matters referenced in Section 14.2(b)(i).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Unless otherwise required by applicable local law or practice or a particular Subcustodian agreement, Assets
deposited with Subcustodians or Depositories may be held in a commingled account in the name of, as applicable, BNY, a BNY Affiliate or the applicable Subcustodian, for its clients. BNY shall identify on its books and records the Securities and Cash
belonging to each Series of the Customer, whether held directly, through Depositories, Foreign Depositories, or Subcustodians.

**4.2** **Liability for Subcustodians** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) BNY will exercise the Standard of Care in selecting, retaining and monitoring Subcustodians.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) With respect to Assets held by a Subcustodian, BNY will be liable to Customer for the activities of such
Subcustodian under this Agreement to the extent that BNY would have been liable to Customer under this Agreement if BNY had performed such activities itself in the relevant market in which such Subcustodian is located; provided, however, that with
respect to Securities held by a Subcustodian that is not a BNY Affiliate:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) BNY's liability will be limited solely to the extent resulting directly from BNY's failure to
exercise the Standard of Care in selecting, retaining, and monitoring such Subcustodian; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) To the extent that BNY is not liable pursuant to Section 4.2(b)(i), BNY's sole responsibility to
Customer will be to: (A) take reasonable and appropriate action to recover from such Subcustodian, and (B) forward to Customer any amounts so recovered (exclusive of costs and expenses incurred by BNY in connection therewith).

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**4.3** **Liability for Depositories** 

BNY will have no responsibility or liability for the activities of any Depository arising out of or relating to this Agreement or any cost or burden imposed on the transfer or holding of Assets held with such Depository.

**4.4** **Use of Agents** 

BNY may appoint agents, including BNY Affiliates, on such terms and conditions as it deems appropriate to perform its obligations hereunder. Except as otherwise specifically provided herein, no such appointment will discharge BNY from its obligations hereunder.

**5.** **CORPORATE ACTIONS** 

**5.1** **Notification** 

BNY will notify Customer or its designee of rights or discretionary corporate actions as promptly as practicable under the circumstances, provided that BNY has actually received, in its capacity as custodian, notice of such right or discretionary corporate action from the relevant issuer, or from a Subcustodian, Depository or third party vendor. Without actual receipt of such notice by BNY, BNY will have no responsibility or liability for failing to so notify Customer.

**5.2** **Exercise of Rights** 

Whenever there are voluntary rights that may be exercised or alternate courses of action that may be taken with respect to Securities in an Account, Customer or its designee will be responsible for making any decisions relating thereto and for instructing BNY to act. In order for BNY to act, Customer must issue Instructions using, or directly referencing, the BNY-issued corporate actions instruction form, and include all the required information fields therein. Such Instructions must be addressed as BNY may request, by the deadline specified by BNY in its sole discretion from time to time, together with any amount which is required to be paid in carrying out any such action. In the event BNY does not receive such Instructions together with any required amount prior to its specified deadlines, BNY will not be liable for failure to take any action relating to, or to exercise any rights conferred by, such Securities.

**5.3** **Partial Redemptions, Payments, Etc.** 

BNY will advise Customer or its designee upon its notification, in its capacity as custodian, of a partial redemption, partial payment or other action with respect to a Security affecting fewer than all such Securities held within an Account. If BNY or any Subcustodian or Depository holds any Securities affected by one of the events described, BNY or such Subcustodian or Depository may select the Securities to participate in such partial redemption, partial payment or other action in any non-discriminatory manner that it customarily uses to make such selection.

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**6.** **SETTLEMENT** 

**6.1** **Settlement Instructions** 

Promptly after the execution of each Securities transaction, Customer will issue to BNY Instructions to settle such transaction. Unless otherwise agreed by BNY and subject to Section 8.1, Assets will be credited to the relevant Account only when actually received by BNY.

**6.2** **Settlement Funds** 

For the purpose of settling a Securities transaction, Customer will provide BNY with sufficient immediately available funds or Securities, as applicable, in the relevant Account by such time and date as is required to enable BNY to settle such transaction in the country of settlement and in the currency to be used to settle such transaction.

**6.3** **Settlement Practices** 

Securities transactions will be settled using practices customary in the jurisdiction or market where the transaction occurs. Customer understands that when BNY is instructed to deliver Securities against payment, delivery of such Securities and receipt of payment related to such Securities may not be completed simultaneously and can also be made without payment. Customer assumes full responsibility for all risks involved in connection with BNY's delivery of Securities or Cash in accordance with such practices.

**7.** **TAX MATTERS** 

**7.1** **Tax Obligations** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) To the extent that BNY has received the Tax Information within the time stipulated, BNY will perform the
following services with respect to Tax Obligations:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Unless prohibited by law or regulation, at the reasonable request of Customer, BNY will provide to Customer
such information received by BNY in its capacity as custodian that could, in Customer's reasonable belief, assist Customer or its designee in the submission of any reports or returns with respect to Tax Obligations. An Authorized Person will
inform BNY in writing as to which party or parties will receive information from BNY;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) BNY will, upon receipt of sufficient Tax Information from Customer (as reasonably determined by BNY), file
claims for exemptions or refunds with respect to withheld taxes in those markets where it provides such services and subject to BNY's service level description (in each case as made available to Customer from time to time). Where Customer (for
whatever reason) fails or neglects to provide BNY with or to review and confirm the Tax Information within the time stipulated by BNY, then such failure or neglect may result in the disapplication of withholding tax relief or the obligation on
Customer to immediately return amounts already refunded by a tax authority. Customer may, however, elect to appoint its own tax agent to file claims for exemptions or refunds in any or all markets, with advance

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notice to BNY of such appointment and subject to such terms as separately agreed in writing between Customer and BNY; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) BNY or the applicable Subcustodian will withhold appropriate amounts, as required by applicable tax laws, with
respect to amounts received and is authorized to debit the relevant Account in the amount of a Tax Obligation and to pay such amount to the appropriate taxing authority.

Customer's receipt of the foregoing services is dependent upon its subscription to BNY's information reporting system, and Customer will be responsible for enrolling its designated Authorized Persons in such system. Customer acknowledges that BNY may, at any time, amend the scope of its tax service offering and notice of such changes will be made available to BNY's customers through its information reporting system. Such changes may require additional documentation, attestations or declarations to be entered into by Customer in order to continue receiving the relevant tax service in a particular market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Customer acknowledges that BNY is a service provider and not an economic beneficiary of any transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Customer will be responsible for understanding its Tax Obligations, and will be solely responsible and liable
for all Tax Obligations with respect to any Assets held on behalf of Customer and any transaction related thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Customer will provide BNY with Tax Information to enable BNY to comply with BNY's obligations under any
applicable tax laws or with any tax authority enquiry.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Customer acknowledges and agrees that none of BNY nor any BNY Affiliate is a tax adviser and none of BNY nor
any BNY Affiliate will, under any circumstances provide tax advice to Customer. Customer will obtain its own independent tax advice for any tax-related matters or Tax Obligations.

**7.2** **Payments** 

Where BNY receives Instructions to make distributions or transfers out of an Account in order to pay Customer's third party service providers, Customer acknowledges that in making such payments BNY is acting in an administrative or ministerial capacity, and not as the payor, for tax information reporting and withholding purposes.

**8.** **CREDITS AND ADVANCES** 

**8.1** **Contractual Settlement and Income** 

BNY may, in its sole discretion, as a matter of bookkeeping convenience, credit the relevant Account with the proceeds resulting from the purchase, sale, redemption or other delivery or receipt of Securities, or interest, dividends or other distributions payable on Securities prior to its actual receipt thereof. All such credits will be conditional until BNY's actual receipt of such proceeds and may be reversed by BNY to the extent that such proceeds are not received. Actual receipt of proceeds with respect to a transaction will not be deemed to have occurred, and the transaction will not be considered final, until BNY has received sufficient immediately available funds or Securities specifically

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applicable to such transaction that, under applicable local law, rule or practice, are irreversible.

**8.2** **Advances** 

If BNY receives an Instruction that, if processed, would result in an overdraft in an Account, BNY may, in its sole discretion, advance funds in any currency hereunder; however, BNY will have no obligation to advance its own funds.

**8.3** **Payment** 

If: (a) BNY has advanced funds to an Account; (b) an overdraft has occurred in an Account (including overdrafts incurred in connection with the settlement of securities transactions, funds transfers or foreign exchange transactions) or (c) Customer is for any other reason indebted to BNY, Customer agrees to pay BNY (on demand or upon becoming aware thereof) the amount of such advance, overdraft or indebtedness, plus accrued interest at a rate then charged by BNY to its institutional custody clients in the relevant currency.

**8.4** **Securing Payment** 

In order to secure payment of Customer's obligations and liabilities relating to a Series (whether or not matured) to BNY relating to or arising under this Agreement, and without limiting BNY's rights under applicable law or any other agreement, Customer hereby pledges and grants to BNY, and agrees BNY will have to the maximum extent permitted by law, a continuing first lien and security interest in: (a) all of Customer's and such Series' right, title and interest in and to the Account relating to such Series and the Assets now or hereafter held in such Account (including proceeds thereof) and (b) any other property at any time held by BNY relating to such Series; provided that Customer does not hereby grant a security interest in any Securities issued by an affiliate (as defined in Section 23A of the U.S. Federal Reserve Act and related implementing regulations (Regulation W, 12 C.F.R. part 223)) of BNY (such securities, "**Affiliate Securities**") with the exception of Affiliate Securities that (i) constitute "eligible affiliated mutual fund securities" as defined in Section 223.24(c) of Regulation W (12 C.F.R. 223.24(c)) and (ii) meet the requirements in Section 223.24(c) of Regulation W (12 C.F.R. 223.24(c)). Customer represents, warrants and covenants that it owns the Assets in the Accounts, and such other property at any time held by BNY relating to Customer, free and clear of all liens, claims and security interests (except for those granted in accordance with this Agreement or as otherwise acknowledged in writing by BNY), and that the first lien and security interest granted herein with respect to each Series will be subject to no setoffs, counterclaims or other liens prior to or on a parity with it in favor of any third party (other than specific liens granted preferred status by statute). Customer will take any additional steps required to assure BNY of such priority security interest, including notifying third parties or obtaining their consent. BNY will be entitled to collect from the relevant Account sufficient Cash for reimbursement, and if such Cash is insufficient, to sell Securities in such Account to the extent necessary to obtain reimbursement, provided, however, in each case BNY will use commercially reasonable efforts to notify the applicable Customer of such collection of cash or sale of Securities. In this regard, BNY will be entitled to all the rights and remedies of a pledgee, secured creditor and/or securities intermediary under applicable laws, rules and regulations as then in effect as if Customer or the relevant Series is in default.

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**8.5** **Setoff** 

BNY has the right to debit any Cash for any amount payable by Customer in connection with any and all obligations and liabilities (whether or not matured) of Customer relating to a particular Series to BNY relating to or arising under this Agreement. In addition to the rights of BNY or such BNY Affiliate under applicable law or any other agreement, at any time when Customer has not honored any of its obligations relating to a Series to BNY, BNY will have the right upon notice to Customer to retain or set-off against any obligations relating to such Series any Cash BNY may directly or indirectly hold with respect to such Series, and any obligations (whether or not matured) that BNY may have with respect to such Series in any currency. Any such Cash or obligation relating to a Series may be transferred to BNY in order to effect the above rights. Notwithstanding the foregoing, BNY shall not exercise its rights under this Section 8.5 with respect to any amounts owing to BNY pursuant to Section 12.1 and that are subject to a good faith dispute. The Accounts or Assets of any one particular Series may not be used to satisfy the obligations of any other Series of the Customer. No lien or security interest in, or right of setoff against, the Accounts or other Assets of one particular Series shall apply to another Series of the Customer.

**8.6** **Currency Conversion** 

BNY is hereby authorized to effect any necessary currency conversions in order to exercise its rights under this Section 8 at BNY's own rate of exchange then prevailing.

**9.** **STATEMENTS; BOOKS AND RECORDS; THIRD PARTY DATA** 

**9.1** **Statements** 

BNY shall make available to the Customer, on behalf of each Series, daily transactions as promptly as practicable in its ordinary course processing, after the close of business or each business day. BNY will make available to Customer, through the Electronic Access Services, a monthly statement (or report for such other time period as the Parties may agree upon from time to time) reflecting all transfers to or from the Accounts during such month and all holdings in the Accounts as of the last business day of such month (or as of such other date(s) as the Parties may agree upon from time to time). Customer will promptly review each such statement and, within ninety (90) days of when such statement is made available by BNY, notify BNY of any exception or objection thereto. Notwithstanding the foregoing, Customer may notify BNY of any such exceptions or objections at any time; provided, however, that BNY will not be responsible or liable for any losses that could have been mitigated had such notice been provided during such ninety (90) day period.

**9.2** **Books and Records/Compliance Matters** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The books and records, directly pertaining to the Accounts, which are in the possession of BNY will be the
property of Customer. Such books and records will be prepared and maintained as required by the 1940 Act and the rules thereunder and by the Commodity Exchange Act for any Series identified to BNY in writing as being a commodity pool operated by a
registered commodity pool operator. BNY will identify on its books and records the Assets belonging to Customer with respect to each Series whether held directly or indirectly through Subcustodians

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or Depositories. Securities held in the Accounts will be held in registered form in the name of BNY or one of its nominees and will be segregated on BNY's books and records from BNY's own property. Customer and its authorized representatives, including its auditors, will have the right, at Customer's own expense and with reasonable prior written notice to BNY, to have reasonable access to those books and records directly pertaining to the Accounts. Any such access will occur during BNY's normal business hours and will be subject to BNY's applicable security policies and procedures. Upon Customer's reasonable request, copies of those books and records directly pertaining to the Accounts will be provided by BNY to Customer or its authorized representative.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All such books and records shall be maintained in a form reasonably acceptable to the Customer, and shall be
reasonably arranged and indexed by BNY in a manner that permits reasonably prompt location, access and retrieval of any particular record, including, if requested by a Customer, within the time period specified by applicable regulators. BNY shall
not destroy any files, records or documents created or maintained by BNY pursuant to this Agreement except in accordance with its record retention policy as communicated to the Customer from time to time or if such destruction is authorized by the
Customer by means of written Instructions. Upon a Customer's request, BNY shall promptly surrender to such Customer all books and records of the Customer maintained by BNY pursuant to this Agreement in the format reasonably specified by the
Customer. Notwithstanding the above, if the format specified by the Customer is not a format BNY utilizes to maintain the books and records, the Customer shall pay the expenses reasonably incurred by BNY in converting such books and records to the
requested format.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) BNY will furnish to the Customer, no more than once in a 12 month period, (i) and upon request, a copy of
its most recent SSAE-18 or equivalent external audit report, which Customer may disclose solely to its internal or external auditors that are subject to written confidentiality obligations to use reasonable
care to safeguard the report and not to disclose the report to any third party or use the report for any purpose other than evaluating BNY's security controls and information relating to BNY's policies and procedures and its compliance
with such policies and procedures and with the laws applicable to the services, as the Parties may mutually agree upon.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) BNY shall provide such information and assistance, as the Customer may from time to time request, in connection
with the preparation of opinions by the Series' independent accountants with respect to BNY's activities hereunder and/or in connection with the preparation of the Series' Form N-1A, Form N-CSR, Form N-PORT and Form N-CEN, or other reports to the SEC and with respect to any other requirements thereof

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) BNY further agrees to provide such information and assistance from time to time as may be reasonably requested
by any of the Series in connection with BNY's compliance procedures as applicable to the Series and/or in connection with the Series' periodic compliance audits of BNY. Without limiting the preceding sentence, BNY agrees to provide or
make available: (i) in connection with the Series' compliance programs pursuant to Rule 38a-1 promulgated under the 1940 Act, such periodic reports and documentation produced or maintained by BNY in

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connection with its performance of the services or which BNY makes available to its customers and such certifications as any Series or its compliance officers may reasonably request in writing, and reasonably prompt notification of any confirmed material compliance matter impacting BNY's internal control framework applicable to its delivery of the services under this Agreement; (ii) reasonably prompt notification of any event that could materially adversely impact the services provided by BNY to the Series under this Agreement; (iii) information concerning its business continuity plan and disaster recovery plan enacted by BNY in accordance with Section 17.5(a) below; and (iv) sub-certificates in connection with the certification requirements of the Sarbanes-Oxley Act of 2002 applicable to services for the Series.

**9.3** **Third Party Data** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Customer acknowledges that BNY will be receiving, utilizing and relying on Market Data and other data provided
by Customer and/or by third parties in connection with its performance of the services hereunder (collectively, "**Third Party Data** "). BNY is entitled to rely without inquiry on all Third Party Data provided to BNY hereunder (and
all Instructions related to Third Party Data), and BNY makes no assurances or warranties in relation to the accuracy or completeness of Third Party Data and will not be responsible or liable for any losses or damages incurred as a result of any
Third Party Data that is inaccurate or incomplete. BNY may follow Instructions with respect to Third Party Data, even if such Instructions direct BNY to override its usual procedures and data sources or if BNY, in performing services for itself or
others (including services similar to those performed for Customer), receives different Third Party Data for the same or similar Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Although statements and reports provided by BNY hereunder with respect to the Accounts may contain values of,
and pricing information in relation to, Securities held pursuant to this Agreement, BNY does not undertake any duty or responsibility under this Agreement to report such values or pricing information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Certain Market Data may be the intellectual property of Market Data Providers, which impose additional terms
and conditions upon Customer's use of such Market Data. Such additional terms and conditions can be found on the Data Terms Website. Customer agrees to those terms and conditions as they are posted on the Data Terms Website from time to time.
BNY shall promptly make available to the Customer in writing, which may include the posting of updates of terms and conditions to the Data Terms Website, any new postings or changes to the terms of any conditions previously posted in the Data Terms
Website.

**10.** **DISCLOSURES** 

**10.1** **Required Disclosure** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) With respect to Securities that are registered under the U.S. Securities Exchange Act of 1934, as amended, or
that are issued by an issuer registered under the 1940 Act, the U.S. Shareholder Communications Act of 1985 (the "**Act**") requires BNY to disclose to issuers of such Securities, upon their request, the name, address and securities
position of BNY's clients who are "beneficial owners" (as defined in the Act) of the issuer's Securities, unless the beneficial owner objects to such

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disclosure. The Act defines a "beneficial owner" as any person who has or shares the power to vote a security (pursuant to an agreement or otherwise) or who directs the voting of a security. Customer has designated on the signature page hereof whether (i) as beneficial owner, it objects to the disclosure of its name, address and securities position to any U.S. issuer that requests such information pursuant to the Act for the specific purpose of direct communications between such issuer and Customer or (ii) it requires BNY to contact the relevant investment manager with respect to relevant Securities to make the decision as to whether it objects to the disclosure of the beneficial owner's name, address and securities position to any U.S. issuer that requests such information pursuant to the Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) With respect to certain Securities issued outside the United States, BNY may disclose information to issuers of
Securities as required by the organizational documents of the relevant issuer or in accordance with local market practice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) In connection with any disclosure contemplated by this Section 10, Customer agrees to supply BNY with any
required information.

**10.2** **Foreign Exchange Transactions** 

In connection with this Agreement, Customer may enter into foreign exchange transactions (including foreign exchange hedging transactions) with BNY or a BNY Affiliate acting as a principal through customary channels. Customer may issue standing Instructions with respect to any such foreign exchange transactions, subject to any terms, rules or limitations that apply to any foreign exchange facility made available to Customer. With respect to any such foreign exchange transactions, BNY or such BNY Affiliate is acting as a principal counterparty on its own behalf which may retain any profits from such foreign exchange transactions, and is not acting as a fiduciary or agent for, or on behalf of, Customer, a Series, an investment manager or any Account.

**10.3** **Investment of Cash** 

In connection with this Agreement, Customer may issue standing Instructions to invest Cash in one or more sweep investment vehicles. Such investment vehicles may be offered by a BNY Affiliate or by a client of BNY, and BNY may receive compensation therefrom. By making investment vehicles available, BNY and its Affiliates will not be deemed to have recommended, endorsed or guaranteed any such investment vehicle in any way or otherwise to have acted as a fiduciary or agent for, or on behalf of, Customer, its investment manager or any Account. BNY will have no liability for any loss incurred on any such investments. Customer understands that Cash may be uninvested if it is received or reconciled to an Account after the applicable deadline to be swept into Customer's selected investment vehicle.

**11.** **REGULATORY MATTERS** 

**11.1** **USA PATRIOT Act** 

Section 326 of the U.S. Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (including its implementing regulations) requires BNY to implement a customer identification program pursuant to which BNY must obtain certain information from Customer in order to verify Customer's

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identity prior to establishing an Account. Accordingly, prior to establishing an Account, Customer will be required to provide BNY with certain information, including Customer's name, physical address, tax identification number and other pertinent identifying information, to enable BNY to verify Customer's identity. Customer acknowledges that BNY cannot establish an Account unless and until BNY has successfully performed such verification.

**11.2** **Sanctions; Anti-Money Laundering** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Throughout the term of this Agreement, Customer: (i) will have in place and will implement policies and
procedures designed to prevent violations of Sanctions, including measures to accomplish effective and timely scanning of all relevant data with respect to its clients (to the extent the Assets are client assets) and with respect to incoming or
outgoing Assets or transactions relating to this Agreement; (ii) will ensure that neither Customer nor any of its Affiliates, directors, officers, employees or clients (to the extent the Assets are client assets) is an individual or entity that
is, or is owned or controlled by an individual or entity that is: (A) the target of Sanctions or (B) located, organized or resident in a country or territory that is, or whose government is, the target of Sanctions and (iii) will not,
directly or indirectly, use the Accounts in any manner that would result in a violation by Customer or BNY of Sanctions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Customer acknowledges and agrees that, in connection with the services provided by BNY under this Agreement,
each of Customer's authorized participants is not a customer or joint customer with BNY. Customer (and not BNY) has the responsibility to, and will, fulfill any compliance requirement or obligation with respect to each of its authorized
participants under all Anti-Money Laundering Laws. Without limiting any obligation imposed on Customer by Anti-Money Laundering Laws, throughout the term of this Agreement, to the extent required by applicable law. Customer will maintain a
compliance program with respect to its authorized participants that includes the following: (i) a know-your-customer program in order to understand and verify the identity of each authorized participant, in accordance with the requirements of
the Bank Secrecy Act and the relevant regulations thereunder, (ii) a transaction surveillance and monitoring program, and (iii) a policy for identifying and reporting any suspicious transactions and/or activities with respect to each
authorized participant to the appropriate law enforcement and regulatory authorities. In addition, Customer will use commercially reasonable efforts to notify BNY if it identifies suspicious transactions and/or activities related to the services
provided by BNY hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Customer will promptly provide to BNY such information as BNY reasonably requests in connection with the
matters referenced in this Section 11.2, including information regarding (i) the Accounts, (ii) the Assets and the source thereof, (iii) the identity of any individual or entity having or claiming an interest therein, and
(iv) Customer's anti-money laundering and Sanctions compliance programs and any related records and/or transaction information, including with respect to any authorized participant, regardless of whether such request is made under USA
PATRIOT Act Section 314(b) (where applicable). Customer will cooperate with BNY and provide assistance reasonably requested by BNY in connection with any anti-money laundering and terrorist financing or Sanctions inquiries. Prior to delivering
to BNY the assets of any authorized participant, Customer will obtain

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from each such authorized participant, and will continue to maintain in effect throughout the term of this Agreement, any consents or waivers that may be required under applicable law in order to comply with the foregoing obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) BNY may decline to act or provide services in respect of any Account, and take such other actions as it, in its
reasonable discretion, deems necessary or advisable, in connection with the matters referenced in this Section 11.2. If BNY declines to act or provide services as provided in the preceding sentence, except as otherwise prohibited by applicable
law or official request, BNY will inform Customer as soon as reasonably practicable.

**12.** **COMPENSATION** 

**12.1** **Fees and Expenses** 

In consideration of BNY's services provided hereunder, Customer will (a) pay to BNY the fees set forth in the agreed upon fee schedule (as such fee schedule may be amended by mutual agreement between BNY and Customer) and (b) reimburse BNY for any reasonable out-of-pocket and incidental expenses incurred by BNY in connection therewith. Unless otherwise agreed by the Parties, such amounts will be payable to BNY within thirty (30) days of Customer's receipt of the relevant invoice. The Parties agree that any new fees and/or expenses to be charged to the Customer that are related to any changes to the services required by any new applicable law, rule or regulation shall be agreed upon in advance. Without limiting BNY's other rights set forth in this Agreement, BNY may charge interest on overdue amounts at a rate then charged by BNY to its institutional custody clients in the relevant currency.

**12.2** **Other Compensation** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Customer acknowledges that, as part of BNY's compensation, BNY will earn interest on Cash balances held
by BNY (including disbursement balances, balances arising from purchase and sale transactions and when Cash otherwise remains uninvested) as provided in BNY's compensation disclosures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Where a processing error has occurred under this Agreement that results in an unintended gain, provided that
Customer is put in the same or equivalent position as it would have been in had such processing error not occurred, any such gain will be solely for the account of BNY without any duty to report such gain to Customer. Where a processing error has
occurred under this Agreement that results in a loss, the Customer will be put in the same or equivalent position as it would have been in had such processing error not occurred.

**13.** **REPRESENTATIONS, WARRANTIES AND COVENANTS** 

**13.1** **BNY** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) BNY represents and warrants that: (a) it is duly organized, validly existing and in good standing in its
jurisdiction of organization; (b) it has the requisite corporate power and authority to enter into and to carry out the transactions contemplated by this Agreement and (c) the individual executing this Agreement on its behalf has the
requisite authority to bind BNY to this Agreement including by Electronic

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Signature, and any such Electronic Signature represents an intent to enter into this Agreement and an agreement with its terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) BNY represents and warrants that it is conducting its business in material compliance with laws applicable to
the services hereunder, and has obtained regulatory licenses, approvals and consents necessary to provide the services contemplated herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) BNY represents and warrants that the Agreement has been duly authorized, executed and delivered by BNY and
constitutes a valid and legally binding obligation of BNY, enforceable in accordance with its terms, and there is no statute, regulation, rule, order or judgment binding on it, and no provision of its charter or by-laws, nor of any mortgage, indenture, credit agreement or other contract binding on it or affecting its property, which would prohibit its execution or performance of this Agreement.

**13.2** **Customer** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Customer represents and warrants that: (i) it is duly organized, validly existing and in good standing in
its jurisdiction of organization; (ii) it has the requisite corporate power and authority to enter into and to carry out the transactions contemplated by this Agreement; and (iii) the individual executing this Agreement on its behalf has
the requisite authority to bind Customer to this Agreement including by Electronic Signature, and any such Electronic Signature represents an intent to enter into this Agreement and an agreement with its terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Customer represents, warrants and covenants that (i) it or the relevant investment manager has determined
that the custody arrangements of each Depository maintaining "Foreign Assets" (as defined in Rule 17f-5 under the 1940 Act) provide reasonable safeguards against the custody risks associated with
maintaining assets with such Depository within the meaning of Rule 17f-7 under the 1940 Act and (ii) it shall manage its borrowings, including without limitation any advance or overdraft (including any
daylight overdraft) in an Account, so that the aggregate of its total borrowings for each Series do not exceed the amount such Series is permitted to borrow under the 1940 Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Customer represents and warrants that all actions taken, or to be taken, by or on behalf of Customer in
connection with establishing, maintaining, operating or terminating Customer (including, any offer, sale or distribution of the shares of, or interest in, Customer) shall be done in compliance with all applicable U.S. state and federal securities
laws and regulations and all other applicable laws and regulations of all applicable jurisdictions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Customer represents and warrants that this Agreement has been duly authorized, executed and delivered by the
Customer, constitutes a valid and legally binding obligation of the Customer, enforceable in accordance with its terms, and there is no statute, regulation, rule, order or judgment binding on it, and no provision of its charter or by-laws, nor of any mortgage, indenture, credit agreement or other contract binding on it or affecting its property, which would prohibit its execution or performance of this Agreement.

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**14.** **LIABILITY** 

**14.1** **Standard of Care** 

In performing its duties under this Agreement, BNY will exercise the reasonable care, prudence, and diligence that a professional custodian for exchange-traded funds would observe in these affairs taking into account the prevailing rules, practices, procedures and circumstances in the relevant market and shall perform its duties without negligence, fraud, bad faith, willful misconduct, reckless disregard of its duties, or breach of this Agreement ("**Standard of Care**").

**14.2** **Limitation of Liability** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) BNY's liability arising out of or relating to this Agreement will be limited solely to those direct
damages that are caused by BNY's performance of or failure to perform its obligations under this Agreement in accordance with the Standard of Care. In no event will BNY or Customer be liable for any indirect, incidental, consequential,
exemplary, punitive or special losses or damages, or for any loss of revenues, profits or business opportunity, arising out of or relating to this Agreement (whether or not foreseeable and even if BNY or Customer has been advised of the possibility
of such losses or damages).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding anything to the contrary set forth in this Agreement, in no event will BNY be liable for any
losses or damages arising out of any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Customer's or an Authorized Person's decision to invest in or hold Assets in any particular
country, including any losses or damages arising out of or relating to: (A) the financial infrastructure of a country; (B) a country's prevailing custody and settlement practices; (C) nationalization, expropriation or other
governmental actions; (D) a country's regulation of the banking or securities industry; (E) currency and exchange controls, restrictions, devaluations, redenominations, fluctuations or asset freezes; (F) laws, rules, regulations
or orders that at any time prohibit or impose burdens or costs on the transfer of Assets to, by or for the account of Customer or (G) market conditions which affect the orderly execution of securities transactions or affect the value of
securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) BNY's reliance on Instructions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) BNY's receipt or acceptance of fraudulent, forged or invalid Securities (or Securities which are
otherwise not freely transferable or deliverable without encumbrance in any relevant market);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) For any matter with respect to which BNY is required to act only upon the receipt of Instructions,
(A) BNY's failure to act in the absence of such Instructions or (B) Instructions that are late or incomplete or do not otherwise satisfy the requirements of Section 3.2(e), whether or not BNY acted upon such Instructions;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) BNY receiving or transmitting any data to or from Customer or any Authorized Person via any non-secure method of transmission or communication selected by Customer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) Customer's or an Authorized Person's decision to invest in Securities or to hold Cash in any
currency;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) The insolvency of any Person, including a Subcustodian that is not a BNY Affiliate, Depository, broker, bank or
a counterparty to the settlement of a transaction or to a foreign exchange transaction, except to the extent arising directly from BNY's failure to exercise the Standard of Care in selecting, retaining, and monitoring a Subcustodian that is
not a BNY Affiliate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) Any inability of BNY, a Subcustodian or any of their respective agents to file claims for exemptions or refunds
or otherwise obtain relief from Tax Obligations due to (A) Customer's failure to provide, or delay in providing, Tax Information to BNY, (B) any failure of Customer to comply with applicable tax laws, or (C) any failure or
refusal of any taxing authority to provide such relief; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) The use of any third party appointed or selected by Customer, or by BNY at the express request of Customer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If BNY is in doubt as to any action it should or should not take, either pursuant to, or in the absence of,
Instructions, BNY may obtain the advice of either reputable counsel of its own choosing at its expense or counsel to Customer, and BNY will not be liable for acting in accordance with such advice, so long as its actions or omissions are consistent
with the Standard of Care.

**14.3** **Force Majeure** 

Subject to BNY's obligations described in Section 17.5 below, BNY will not be responsible or liable for any failure or delay in the performance of its obligations under this Agreement to the extent caused, directly or indirectly, by any event beyond its reasonable control, including acts of God, strikes or other labor disputes, work stoppages, acts of war, terrorism, general civil unrest, actual or threatened epidemics, disease, act of any government, governmental authority or police or military authority, declared or threatened state of emergency, legal constraint or the interruption, loss or malfunction of utilities or communications or computer systems, provided that BNY shall be liable for any losses to a Series to the extent that BNY fails to maintain or keep updated the disaster recovery/business continuity plans contemplated in Section 17.5 of this Agreement and such failure is the sole and direct cause of a loss to a Series. BNY will promptly notify Customer upon the occurrence of any such event and will use commercially reasonable efforts to minimize its effect.

In the event that the Customer reasonably believes that the occurrence of any such event will substantially prevent, hinder or delay performance of the services contemplated by this Agreement for more than five (5) consecutive business days, the Customer may take commercially reasonable actions to mitigate the impact of such services not being provided, including, but not limited to, at the Customer's expense, contracting with another

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service provider to provide such services during such period; provided, that the Customer shall consult with BNY in good faith in connection with any such mitigation and BNY shall provide the Customer reasonable assistance in good faith in connection therewith; provided, further, that BNY shall resume providing, and the Customer shall pay for, such services when BNY resumes providing them, unless the Customer has terminated this Agreement pursuant to the terms of Section 16.2. Notwithstanding anything set forth in this Section 14.3, (a) in no event shall the Customer be obligated to pay any fees under this Agreement to BNY with respect to any services not actually provided during any event described in this Section 14.3, and (b) the Customer shall have no responsibility to pay BNY for services temporarily performed by a third party service provider.

**14.4** **Indemnification** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Customer, on behalf of a Series, shall indemnify and hold harmless BNY from all taxes, charges,
assessments, claims, damages and liabilities (including, without limitation, liabilities arising under the federal securities laws and any state or foreign securities and blue sky laws, and amendments thereto), and costs and expenses, including
without limitation reasonable attorneys' fees and reasonable disbursements (including, without limitation, those incurred in asserting any claim by BNY against the Customer, on behalf of a Series, arising from the obligations of the Series
hereunder), arising from any action which BNY takes in accordance with the terms of this Agreement or any omission by BNY to act or any other matter with respect to which BNY is otherwise relieved of liability or entitled to be held harmless as
provided elsewhere in the Agreement; provided that BNY shall not be indemnified against any liability (or any expenses incident to such liability) to the extent arising out of BNY's own, or its affiliate's or agent's (for whose
actions BNY is responsible under this Agreement) bad faith, fraud, negligence, willful misconduct, reckless disregard of its duties, or breach of this Agreement. Any obligations of Customer under this Section 14.4 with respect to a particular
Series will not be satisfied out of the Assets of another Series.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Subject to the limitations and exclusions of liability in this Section 14, BNY agrees to indemnify, defend
and hold harmless the Customer and each Series from and against any and all costs, expenses, damages, liabilities and claims, and reasonable attorneys' and accountants' fees relating thereto (including, without limitation, those incurred
in asserting any claim by Customer against BNY) the recovery of which is not excluded by another provision of this Agreement ()"**Losses** "), that may be imposed on, incurred by or asserted against any Customer and any applicable
Series, in each case, to the extent such Losses arise out of BNY's own, or BNY Affiliate's or agent's (for whose actions BNY is responsible under this Agreement) bad faith, fraud, negligence, willful misconduct, reckless disregard
of its duties, or breach of this Agreement, provided that the a Customer or a Series shall not be indemnified against any liability (or any expenses incident to such liability) to the extent arising out of a Customer's, a Series' or its
or their affiliates' own bad faith, fraud, negligence, willful misconduct, reckless disregard of its duties, or breach of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Upon the occurrence of any event relating to the services provided under this Agreement that causes or may
cause any loss, damage or expense to one or more Customers or Series, BNY (i) shall reasonably promptly notify each such Customer or Series of the occurrence of such event and (ii) shall use (and shall use its

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commercially reasonable efforts to cause any applicable agent or domestic or foreign Subcustodian to use) commercially reasonable efforts and take reasonable steps under the circumstances to attempt to mitigate the effects of such event and avoid continuing harm to each such Customer or Series. Upon the occurrence of any event that causes or may cause any loss, damage or expense to BNY, the applicable Customer or Series (i) shall reasonably promptly notify BNY of the occurrence of such event and (ii) shall use commercially reasonable efforts and take reasonable steps under the circumstances to attempt to mitigate the effects of such event and avoid continuing harm to BNY.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) In order that the indemnification provisions contained in this Section 14.4 shall apply, upon the
assertion of a claim for which either party may be required to indemnify the other, the party seeking indemnification shall promptly notify the other party of such assertion, and shall keep the other party advised with respect to all developments
concerning such claim. The party who may be required to indemnify shall have the right to control the defense of the claim, and the party seeking indemnification shall have the option to participate in the defense of such claim, at its own cost and
expense. The party seeking indemnification will cooperate reasonably, at the indemnifying party's expense, with the indemnifying party in the defense of such claim; provided, however, that the party seeking indemnification shall not be
required to take any action that would impair any claim it may have against the indemnifying party. The party seeking indemnification shall in no case confess any claim or make any compromise in any case in which the other party may be required to
indemnify it except with the other party's prior written consent. The indemnifying party shall not settle or compromise any claim or consent to the entry of any judgment with respect to which indemnification is being sought hereunder without
the prior written consent of the party seeking indemnification, which consent shall not be unreasonably withheld, delayed or conditioned.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) BNY will maintain, at all times during the term of this Agreement, errors and omissions insurance, fidelity
bonds and such other insurance as BNY may deem appropriate, in each case in a commercially reasonable amount deemed by BNY to be sufficient to cover its potential liabilities under this Agreement, including without limitation cyberliability
insurance coverage deemed by BNY to be appropriate to address damages arising from a Security Incident. BNY agrees to provide the Customer with summaries of its applicable insurance coverage, and agrees to provide an updated summary of such
coverages at the Customer's written request, but no more frequently than annually.

**15.** **CONFIDENTIALITY** 

**15.1** **Confidentiality Obligations.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each Party agrees to use the Confidential Information of the other Party solely to accomplish the purposes of
this Agreement and, except in connection with such purposes or as otherwise permitted herein, not to disclose such information to any other Person without the prior written consent of the other Party. Notwithstanding the foregoing, BNY may:
(a) use Customer's Confidential Information in connection with certain functions performed on a centralized basis by BNY, its Affiliates and joint ventures and their service providers (including audit, accounting,

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risk, legal, compliance, sales, administration, product communication, relationship management, compilation and analysis of customer-related data and storage); (b) disclose such information to its Affiliates and joint ventures and to its and their service providers who are subject to confidentiality obligations and need to know such information in connection with the performance of BNY's duties under this Agreement; and (c) store the names and business contact information of Customer's employees and representatives relating to this Agreement on the systems or in the records of its Affiliates and joint ventures and its and their service providers. In addition, BNY may aggregate information regarding Customer and the Accounts on an anonymized basis with other similar client data for BNY's and its Affiliates' reporting, research, product development and distribution, and marketing purposes; provided that such aggregated information is a sufficiently large sample that no Customer or Series data can be identified either directly or by inference or implication. A receiving Party shall protect Confidential Information of a disclosing Party at least to the same degree as the receiving Party protects its own Confidential Information. All Confidential Information provided by a disclosing Party shall remain the property of such disclosing Party. All Confidential Information, together with any copies thereof, in whatever form, shall, upon the disclosing Party's written request, be returned to the disclosing Party or destroyed, at the receiving Party's election; provided, that the receiving Party shall be permitted to retain all or any portion of the Confidential Information, in accordance with the confidentiality obligations specified in this Agreement, to the extent required by applicable law or regulatory authority or to the extent required by the receiving Party's internal policies and in accordance with its customary practices for backup and storage.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Upon learning of a Security Incident, BNY shall notify the Customer as promptly as reasonably possible (but no
later than 72 hours after becoming aware that a Security Incident has occurred) of the relevant facts related to such Security Incident then known to BNY, and of additional relevant facts promptly after they become known to BNY, in the manner
provided in Section 17.7 hereof and also by sending notice to NetworkOperationsSecurityCenter@franklintempleton.com and/or such other electronic mail address or addresses as the Customer may specify by written notice to BNY. BNY shall at its
sole cost: (i) promptly investigate such Security Incident; (ii) resolve or mitigate the vulnerability that facilitated the Security Incident to the extent possible; (iii) restore any lost or damaged data using generally accepted data
restoration techniques; and (iv) conduct a root cause analysis to provide the Customer with a summary of the findings and actions taken to prevent recurrence of such Security Incident. If a Security Incident occurs with respect to personal
information in the possession or under the control of BNY or any of its affiliates, subsidiaries, agents or employees BNY shall be responsible for each Series' reasonable costs associated with responding to such Security Incident, including,
but not limited to, the costs of notifying affected individuals and taking any remedial action required by applicable statutes, laws, rules and regulations and any such other remedial action that BNY reasonably deems necessary (with due regard for
industry standards, if any).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Without limiting the generality of Section 15.1 hereof, BNY acknowledges and agrees that the Series are
prohibited by law from making selective public disclosure of information regarding portfolio holdings, that disclosure of any and all such information to BNY hereunder is made strictly under the conditions of

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confidentiality set forth in Section 15.1 hereof and solely for the purposes of the performance of custodial services hereunder, that any unauthorized disclosure or misuse of such information (including by BNY or any of its employees or agents, or any trading on the basis of such information by anyone in receipt of such information) may constitute a criminal offense of trading on or tipping of material inside information regarding publicly traded securities, that access to any and all such information regarding portfolio holdings of the Series shall be restricted to those persons needing such information in the course of the performance of duties hereunder, and that BNY shall apprise all such persons having access of the obligation hereunder and under applicable law to prevent unauthorized disclosure of such Confidential Information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Parties acknowledge and agree that any breach of Section 15.1 hereof would cause not only financial
damage, but irreparable harm to the other party, for which money damages will not provide an adequate remedy. Accordingly, in the event of a breach of Section 15.1 hereof, the non-breaching party shall
(in addition to all other rights and remedies it may have pursuant to this Agreement, including without limitation Section 14.4(b) hereof, and at law and in equity) be entitled to an injunction, without the necessity of posting any bond or
surety, to restrain disclosure or misuse, in whole or in part, of any information in violation of Section 15.1 hereof.

**15.2** **Exceptions** 

The Parties' respective obligations under Section 15.1 will not apply to any such information: (a) that is, as of the time of its disclosure or thereafter becomes, part of the public domain through a source other than the receiving Party; (b) that was known to the receiving Party as of the time of its disclosure and was not otherwise subject to confidentiality obligations; (c) that is independently developed by the receiving Party without reference to such information; (d) that is subsequently learned from a third party not known to be under a confidentiality obligation to the disclosing Party or (e) that is required to be disclosed pursuant to applicable law, rule, regulation, requirement of any law enforcement agency, court order or other legal process or at the request of a regulatory authority provided, however, that the Party making disclosure pursuant to a court order, legal process or at the request of a regulatory authority shall first notify the other Party (to the extent permissible) and, upon the non-disclosing Party's request, the disclosing Party will use reasonable efforts to obtain assurances from the relevant authority that confidential treatment will be accorded to the information that is required to be disclosed. Notwithstanding Section 15.1, the Parties agree that Customer may, subject to prior review of BNY, include this Agreement as an exhibit to its registration statement and reference BNY and summarize the material terms of this Agreement in the registration statement for a series and any other offering memorandum, prospectus or marketing documents related to an offering of shares by Customer to potential investors.

**16.** **TERM AND TERMINATION** 

**16.1** **Term** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Agreement will commence on the Effective Date and, unless terminated pursuant to its terms, will continue
in effect until 11:59 PM (Eastern Time) on the date which is the fifth anniversary of the Effective Date (the "**Initial Term** "), at which

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time this Agreement shall terminate, unless renewed in accordance with the terms hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) This Agreement shall automatically renew for successive terms of one (1) year each (each, a
" **Renewal Term** "), unless Customer or BNY gives written notice to the other Party of its intent not to renew not less than ninety (90) days prior to the expiration of the Initial Term or the then-current Renewal Term (a
" **Non-Renewal Notice** "). In the event a Party provides a Non-Renewal Notice, this Agreement shall terminate with respect to Customer at 11:59 PM
(Eastern Time) on the last day of the Initial Term or Renewal Term, as applicable.

**16.2** **Termination** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Notwithstanding Section 16.1, in the event that the BNY or the Customer (as applicable, a
" **Defaulting Party**") shall fail in any material respect to perform its duties and obligations (in the case of BNY, in accordance with the Standard of Care) hereunder (including, in the case of BNY, through persistent non-material failures to perform its duties or obligations hereunder or the persistent failure to meet agreed upon KPIs), the other party (the "**Other Party**") shall have given written notice
thereof to the Defaulting Party, and such material failure shall not have been remedied to the reasonable satisfaction of the Other Party within thirty (30) days after such written notice is received, then, as applicable, the Customer may
terminate this Agreement by providing thirty (30) days' written notice of such termination to BNY, or BNY may terminate this Agreement by providing one hundred twenty (120) days' written notice of such termination to the
Customer. In addition, notwithstanding the preceding sentence, this Agreement may be terminated by the Customer (i) immediately in the event (a) BNY ceases to be qualified as a bank under the 1940 Act, or (b) provided the Customer
provides prompt advance notice thereof, the Customer or a Series liquidates, dissolves, merges or reorganizes with another investment company or, (ii) by providing thirty (30) days' written notice of such termination to BNY in the
event that BNY is indicted for a crime, commences any bankruptcy or insolvency proceeding or has such a proceeding initiated against it which is not dismissed within sixty (60) days, or suffers any other material adverse change in its
condition, operations or professional reputation that is determined by the Customer in its reasonable discretion to threaten the continuing performance of services hereunder or the reputation of the Customer. Upon termination of the Agreement
pursuant to this paragraph 16.2(a) with respect to any Customer or Series, the Customer, on behalf of the applicable Series, shall pay to BNY such compensation as shall have accrued to the effective date of such termination. In all cases,
termination by the Non-Defaulting Party shall not constitute a waiver by the non-Defaulting Party of any other rights it might have under this Agreement or otherwise
against the Defaulting Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) [Reserved.]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) [Reserved.]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Upon termination of the Agreement, BNY will, at Customer's request, offer assistance to the Customer in
converting, within a reasonable time frame agreed to by the Parties, the Customer's records from BNY's systems to the services or

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systems designated by the Customer for such transition, subject to the compensation of BNY for such assistance at its standard rates and fees in effect at that time.

**16.3** **Effect of Termination** 

Upon termination hereof, Customer will pay to BNY such compensation as may be due to BNY, and will reimburse BNY for other amounts payable or reimbursable to BNY hereunder, through the date of termination. As soon as practical following the service of a termination notice (and in any case not less than 30 days before the termination of this Agreement), Customer will give BNY the details of the successor custodian or other person or persons to whom the Assets are to be transferred. BNY will follow such reasonable Instructions as Customer issues concerning the transfer of custody of records, Assets and other items; provided that (a) BNY will have no responsibility or liability for shipping and insurance costs associated therewith and (b) full payment has been made to BNY of its compensation, costs, expenses and other amounts to which it is entitled hereunder. If any Assets remain in any Account after termination, BNY may deliver to Customer such Assets. The terms of this Agreement (including the terms relating to fees payable to BNY) will continue to apply from day to day until any transferable Asset is transferred in accordance with this Section, except that no additional Cash or Securities may be deposited with BNY or any Subcustodian after such date other than with BNY's express prior consent, and Customer will have a continuing obligation to provide BNY as soon as possible with the details of the Person or Persons to whom the remaining Assets are to be transferred. Upon termination, the Parties agree to cooperate in order to facilitate conversion to a new custodian.

Notwithstanding any provision of this Section 16 to the contrary, in the event that this Agreement is terminated, the Parties agree to continue operating under the terms of this Agreement, including any fees as may be then in effect, as if this Agreement remained in full force and effect for a conversion period not to exceed nine (9) months following the effective date of the termination or as the Parties may mutually agree is necessary to facilitate a conversion from BNY to a successor provider of custody services in an orderly manner.

**16.4** **Survival** 

Any and all provisions of this Agreement which by their nature or effect are required or intended to be observed, kept or performed after the expiration or termination of this Agreement will survive the expiration or any termination of this Agreement and remain binding upon and for the Parties' benefit, including Section 13 (Representations, Warranties and Covenants); Section 14 (Liability); Section 15 (Confidentiality); Section 16.3 (Effect of Termination); Section 16.4 (Survival) and Section 17.4 (Governing Law/Forum).

**17.** **GENERAL** 

**17.1** **Non-Custody Assets** 

At Customer's request pursuant to Instructions, subject to BNY's approval and as an accommodation to Customer, BNY will provide consolidated recordkeeping services reflecting on statements provided to Customer securities and other assets not held by

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BNY ("**Non-Custody Assets**"). Non-Custody Assets will be designated on BNY's books as "assets not held in custody" or by other similar designation and will not constitute Assets for purposes of this Agreement. Customer acknowledges and agrees that, notwithstanding anything contained elsewhere in this Agreement, (a) Customer will have no security entitlement against BNY with respect to Non-Custody Assets; (b) BNY will rely, without independent verification, on information provided by Customer or its designee regarding Non-Custody Assets (including positions and market valuations) and (c) BNY will have no responsibility whatsoever with respect to Non-Custody Assets or the accuracy of any information maintained on BNY's books or set forth on account statements concerning Non-Custody Assets.

**17.2** **Assignment** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Neither Party may, without the other Party's prior written consent, assign any of its rights or delegate
any of its duties under this Agreement (whether by change of control, operation of law or otherwise); provided, however that BNY may, without the prior written consent of Customer, assign this Agreement or any of its rights, or delegate any of its
duties hereunder: (a) to any BNY Affiliate; (b) to any successor to the business of BNY to which this Agreement relates, in which event BNY agrees to provide notice of such successor to Customer or (c) as otherwise permitted in this
Agreement; provided further that any entity to which this Agreement is assigned by BNY without the prior written consent of Customer pursuant to a foregoing item (a), (b) or (c) (i) will satisfy the requirements for serving as a custodian for a
registered investment company, (ii) BNY provides at least sixty (60) days' prior written notice to the Customer of such assignment or transfer, (iii) such assignment or transfer does not impair the provision of services under
this Agreement in any material respect in the reasonable discretion of the Customer, (iv) in the reasonable discretion of the Customer, the assignee or transferee has adequate financial strength and other resources, and (v) BNY Affiliate
or such successor to the business of BNY agrees to be bound by all terms of this Agreement. Any purported assignment or delegation by a Party in violation of this provision will be voidable at the option of the other Party. This Agreement will be
binding upon, and inure to the benefit of, the Parties and their respective permitted successors and assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If BNY assigns this Agreement pursuant to this Section 17.2 to a non-BNY Affiliate without the written consent of the Customer, the Customer shall have the option, exercisable for ninety (90) days after receiving written notice of such assignment or transfer (or for
such longer period as may be mutually agreed by the Parties), to terminate this Agreement with respect to the Customer; provided further that any entity to which this Agreement is assigned by BNY without the prior written consent of Customer
pursuant to this Section 17.2 will satisfy the requirements for serving as a custodian for registered investment companies. Any purported assignment or transfer by a Party in violation of this provision will be voidable at the option of the
other Party. This Agreement will be binding upon, and inure to the benefit of, the Parties and their respective permitted successors and assigns. BNY shall notify the Customer promptly following the execution of any agreement that would result in,
or would be expected to result in, a change of control of BNY, provided that such information is publicly available information and that BNY makes such information available to its clients generally.

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**17.3** **Amendment** 

This Agreement may be amended or modified only in a written agreement signed by an authorized representative of each Party. For purposes of the foregoing, email exchanges between the Parties will not be deemed to constitute a written agreement. Additional management investment companies (each a "**New Customer**") and additional series of existing management investment companies that are listed on Appendix I hereto or of New Customers (each a "**New Series**") may from time to time be added as Customers and Series serviced under this Agreement by (A) delivery to BNY of (i) an executed instrument of adherence by the New Customer, pursuant to which such New Customer agrees to become bound by and party to this Agreement, (ii) an amendment and restatement of Appendix I setting forth the appropriate information as to such New Customer and/ or New Series, and (iii) copies of the Documents of such New Customer and/or New Series and (B) BNY's receipt of the foregoing Documents, whereupon BNY, subject to the satisfactory completion of its customary due diligence, shall agree in writing, in accordance with this Section, to the addition of such New Customer and/or New Series which agreement shall not be unreasonably withheld, it being under stood that BNY shall not be deemed to be unreasonable in the event that (i) BNY's ability to provide services hereunder to the New Customer or New Series is otherwise restricted by regulatory requirements or (ii) BNY does not generally offer custodial services to institutional clients regarding the particular type of fund or assets.

**17.4** **Governing Law/Forum** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The substantive laws of the state of New York (without regard to its conflicts of law provisions) will govern
all matters arising out of or relating to this Agreement, including the establishment and maintenance of the Accounts and for purposes of the Uniform Commercial Code and all issues specified in Article 2(1) of the Hague Securities Convention except
to the extent such laws are inconsistent with the federal securities laws, including the 1940 Act, in which case such federal securities laws shall govern.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each Party irrevocably agrees that all legal actions or proceedings brought by it against the other Party
arising out of or relating to this Agreement will be brought solely and exclusively before the state or federal courts situated in New York City, New York. Each Party irrevocably submits to personal jurisdiction in such courts and waives any
objection which it may now or hereafter have based on improper venue or *forum non conveniens*. The Parties hereby unconditionally waive, to the fullest extent permitted by applicable law, any right to a jury trial with respect to any such
actions or proceedings.

**17.5** **Business Continuity/Disaster Recovery/Information Security** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) BNY will implement and agrees to maintain for the term of the Agreement business continuity and disaster
recovery plans designed to minimize interruptions of service and ensure recovery of systems and applications used to provide the services under this Agreement. BNY shall make reasonable provision for (i) periodic back-up of the computer files and data with respect to Customer; and (ii) emergency use of electronic data processing equipment to provide services under this Agreement. Such plans will cover the
facilities, systems, applications and employees that are critical to the provision of the services hereunder, and will

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be tested at least annually to validate whether the recovery strategies, requirements, and protocols are viable and sustainable. BNY shall, upon reasonable request, discuss with senior management of the Customer such disaster recovery plan and shall, upon reasonable request, provide a high-level presentation summarizing such plan. In the event of equipment failure, work stoppage, governmental action, communication disruption or other impossibility of performance beyond BNY's control, BNY shall, at no additional expense to the Customer, take reasonable steps to minimize service interruptions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) During the term of the Agreement, BNY will implement and maintain an information security program
(" **ISP**") with written policies and procedures reasonably designed to protect the confidentiality and integrity of Customer's Confidential Information provided to BNY in accordance with the Agreement and when in BNY's
possession or under BNY's control ()"**Customer Data** "). The ISP will include administrative, technical and physical safeguards, appropriate to the type of Customer Data concerned, reasonably designed to: (i) maintain the
integrity, confidentiality and availability of Customer Data; (ii) protect against anticipated threats or hazards to the security or integrity of Customer Data; (iii) protect against unauthorized access to or use of Customer Data that
could result in substantial harm or inconvenience to Customer or its clients, and (iv) provide for secure disposal of Customer Data. BNY shall develop, implement and maintain, at its sole expense, a system or methodology to audit for compliance
with the requirements of the preceding sentence that is consistent with the SOC controls framework. Such safeguards will include, but shall not be limited to, virus protection, password protection and encryption of data in transmission at a minimum
standard of AES 256. BNY will provide the Customer at least annually, with the most recent SOC reports of its systems and methodologies prepared by an independent third party ()"**SOC Reports** "), and will provide an attestation
letter (the "**Attestation Letter** "), which shall be in the form generally provided by BNY to other similarly situated customers of services similar to the services provided under this Agreement, prepared by the qualified,
independent third party engaged by BNY that performed its most recent penetration and ethical hack testing of its internet-facing environment relevant to the systems used to provide services under this Agreement. BNY shall maintain books and records
sufficient to demonstrate its compliance with the terms of this Section 17.5(b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Upon reasonable notice to BNY, BNY will arrange for its relevant subject matter experts to meet with the
relevant subject matter experts of the Customer once annually and at such other times as the Customer may reasonably request to review BNY's security controls and any deficiencies identified in the SSAE-18 audit reports. BNY acknowledges and agrees that, in addition to the Attestation Letter and SOC Reports, it shall discuss with and make available to the Customers the ability to view at BNY's
offices BNY's vulnerability management policy as part of BNY's participation in the Customers' periodic security review. At such meeting, the Customers may view BNY's security-related policies and procedures; however, no
documentation may be copied, shared, transmitted or removed from BNY's premises, except as mutually agreed. In the event that the Customer reasonably identifies a weakness in the information security measures adopted by BNY which has caused or
will cause a material breach of the information security measures described in Section 17.5(b), the Customer shall provide full details of such weakness in writing to BNY. If the Customer and BNY mutually agree in writing

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that a weakness identified by the Customer in writing to BNY will cause BNY to materially breach the information security measures described in Section 17.5(b), then BNY will seek to remediate such weakness by incorporating it into its vulnerability and remediation schedule. All nonpublic documentation and information disclosed to the Customer in accordance with this Section 17.5(c) shall be deemed proprietary and Confidential Information of BNY. The Customer shall not disclose such documentation or information to any third party (except to the extent permitted, necessary or required pursuant to Section 15 or use it for any purpose other than evaluating BNY's security controls, except that the Customer may disclose BNY's SSAE-18 summary to the Customer's external auditors provided that such external auditors are required to maintain the confidentiality of the summary and any related information.

**17.6** **Non-Fiduciary Status** 

Customer hereby acknowledges and agrees that BNY is not a fiduciary by virtue of accepting and carrying out its obligations under this Agreement and has not accepted any fiduciary duties, responsibilities or liabilities with respect to its services hereunder, including with respect to the management, investment advisory or sub-advisory functions of Customer.

**17.7** **Notices** 

Other than routine communications in the ordinary course of providing or receiving services hereunder (including Instructions), notices given hereunder will be: (a) addressed to BNY or Customer at the address set forth on the signature page (or such other address as either Party may designate in writing to the other Party) and (b) sent by hand delivery, by certified mail, return receipt requested, or by overnight delivery service, in each case with postage or charges prepaid or (ii) by email (as a signed attachment). All notices given in accordance with this Section will be effective upon receipt.

**17.8** **Entire Agreement** 

This Agreement constitutes the sole and entire agreement among the Parties with respect to the matters dealt with herein, and merges, integrates and supersedes all prior and contemporaneous discussions, agreements and understandings between the Parties, whether oral or written, with respect to such matters.

**17.9** **No Third Party Beneficiaries** 

This Agreement is entered into solely between, and may be enforced only by, the Parties. Each Party intends that this Agreement will not, and no provision of this Agreement will be interpreted to, benefit, or create any right or cause of action in or on behalf of, any party or entity other than the Parties.

**17.10** **Counterparts/Facsimile** 

This Agreement may be executed in any number of counterparts, either manually or by Electronic Signature, each of which will be deemed an original, and said counterparts

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when taken together will constitute one and the same instrument and may be sufficiently evidenced by one set of counterparts. This Agreement may also be executed and delivered by facsimile or email with confirmation of delivery and/or receipt.

**17.11** **Interpretation** 

The terms and conditions of this Agreement are the result of negotiations between the Parties. The Parties intend that this Agreement will not be construed in favor of or against a Party by reason of the extent to which such Party or its professional advisors participated in the preparation or drafting of this Agreement.

**17.12** **No Waiver** 

No failure or delay by a Party to exercise any right, remedy or power it has under this Agreement will impair or be construed as a waiver of such right, remedy or power. A waiver by a Party of any provision or any breach of any provision will not be construed to be a waiver by such Party of such provision in any other instance or any succeeding breach of such provision or a breach of any other provision. All waivers will be in writing and signed by an authorized representative of the waiving Party.

**17.13** **Headings** 

All section and subsection headings in this Agreement are included for convenience of reference only and will not be considered in the interpretation of the scope or intent of any provision of this Agreement.

**17.14** **Severability** 

If a court of competent jurisdiction determines that any provision of this Agreement is illegal or invalid for any reason, such illegality or invalidity will not affect the validity of the remainder of this Agreement. In such case, the Parties will negotiate in good faith to replace each illegal or invalid provision with a valid, legal and enforceable provision that fulfills as closely as possible the original intent of the Parties.

**17.15** **Key Performance Indicators** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) BNY and the Customer may from time to time agree to document the manner in which they expect to deliver and
receive the services contemplated by this Agreement. The Parties agree that any such key performance indicators (hereinafter referred to as "**KPIs**" or, individually as a "**KPI**") shall be agreed upon in writing by
the Parties and shall be reflected in one or more schedules to this Agreement. BNY and Customer acknowledge that any failure to perform in accordance with KPIs shall not in and of itself be considered a breach of contract that gives rise to
contractual or other remedies provided that such failure may be a breach giving rise to contractual or other remedies if it is persistent and not remedied after consultation. Nothing in this Section 17.15 shall modify any party's
applicable Standard Of Care under this Agreement; nor shall any meeting or discussion among the Parties regarding KPIs be construed to prevent a party from pursuing any remedy otherwise available to it pursuant to this Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Parties agree to periodically review BNY's performance against the KPIs. Where any such review
reveals that one specific KPI has measured at a "red" or "amber" status for three consecutive months (a "**Rectification Trigger** "), the Customer may, in its sole discretion, invoke the process set out in this
Section 17.15(b):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) BNY shall investigate, assemble and preserve (in accordance with its records management policy) all pertinent
information with respect to, and report the root causes of the problem that led to, the Rectification Trigger;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) BNY shall propose an appropriate written corrective action plan ()"**Rectification Plan**") with
respect to such failure and in any event within ten (10) business days, or as otherwise reasonably agreed by the Parties. The Rectification Plan shall set out the anticipated improvements ()"**Anticipated Improvements**") and the
timeline over which those improvements are expected to be realized ()"**Plan Period** "), which shall be no longer than sixty (60) days (without the Customer's prior written consent, not to be unreasonably withheld or
delayed). The Customer shall review the Rectification Plan within five (5) business days and shall (without liability or any resulting obligation or deemed acceptance of approach) comment on the Rectification Plan, suggest improvements and
challenge any assumptions and ideas embodied in the Rectification Plan. It is acknowledged that the Customer shall not be obligated or required to acknowledge the Rectification Plan will achieve the relevant KPIs. Upon approval of the Rectification
Plan, BNY shall, as soon as reasonably practicable, implement the Rectification Plan so as to deliver the anticipated improvements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) BNY shall provide the Customer with regular updates of the progress of the Rectification Plan and the Parties
shall periodically review the progress during the Plan Period;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) BNY shall as soon as reasonably practicable notify the Customer in writing of any material changes to the
Rectification Plan from time to time and the reasons for those changes; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) At the end of the Plan Period, BNY shall report on whether the Rectification Plan has delivered the Anticipated
Improvements in accordance with this Section 17.15.

**17.16** **Limitation of Customer Liabilities** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) BNY acknowledges and agrees that the obligations assumed by each Customer on behalf of its Series hereunder
shall be limited in all cases to the Assets of the Customer and the particular Series thereof, as applicable, and that BNY may not seek satisfaction of any such obligation from the officers, agents, employees, trustees, directors or shareholders of
a Customer or of any Series of the Customer, and to the extent such trustees or officers are regarded as entering into this Agreement, they do so only as trustees or officers and not individually and that the obligations of this Agreement are not
binding upon any such trustee, officer, employee or shareholder individually, but are binding only upon the Assets and

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property of said Customer (or Series thereof). BNY hereby agrees that such trustees, officers, employees or shareholders shall not be personally liable under this Agreement and that BNY shall look solely to the property of the Customer (or Series thereof) for the performance of the Agreement or payment of any claim under the Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) [Reserved.]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) This Agreement is an agreement entered into between BNY and each Customer with respect to each of such
Customer's Series, as applicable. With respect to any obligation of the Customer on behalf of any Series arising out of this Agreement, BNY shall look for payment or satisfaction of such obligation solely to the Assets of the Series to which
such obligation relates with the same effect as if BNY had separately contracted with the Series by separate written instrument with respect to each Series.

[Signature page follows]

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**IN WITNESS WHEREOF**, the Parties have executed this Agreement as of the Effective Date.

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| | | | |
|:---|:---|:---|:---|
| **THE BANK OF NEW YORK MELLON** | **THE BANK OF NEW YORK MELLON** | **PUTNAM ETF TRUST** | **PUTNAM ETF TRUST** |
|  |  | **ON BEHALF OF THEIR SERIES LISTED ON APPENDIX I** | **ON BEHALF OF THEIR SERIES LISTED ON APPENDIX I** |
| By: | /s/ Danielle Adamson | By: | /s/ Jonathan Horwitz |
| Name: Danielle Adamson | Name: Danielle Adamson | Name: Jonathan Horwitz | Name: Jonathan Horwitz |
| Title: Director | Title: Director | Title: Executive VP | Title: Executive VP |
| Date: June 06, 2025 | Date: June 06, 2025 | Date: 5/22/2025 | Date: 5/22/2025 |
| **Address for Notice:** | **Address for Notice:** | **Address for Notice:** | **Address for Notice:** |
| The Bank of New York Mellon | The Bank of New York Mellon | Putnam ETF Trust | Putnam ETF Trust |
| 240 Greenwich Street | 240 Greenwich Street | 100 Federal Street | 100 Federal Street |
| New York, New York 10286 | New York, New York 10286 | Boston, Massachusetts 02110 | Boston, Massachusetts 02110 |
| Attention: Asset Servicing Legal | Attention: Asset Servicing Legal | Attention:<u> </u> | Attention:<u> </u> |

---

Pursuant to Section 10.1(a):

[ ] as beneficial owner, Customer OBJECTS to disclosure

[ ] as beneficial owner, Customer DOES NOT OBJECT to disclosure

[ ] BNY will CONTACT THE RELEVANT INVESTMENT MANAGER with respect to relevant Securities to make the decision whether it objects to disclosure

IF NO BOX IS CHECKED, BNY <u>WILL RELEASE</u> SUCH INFORMATION UNTIL IT RECEIVES A CONTRARY INSTRUCTION FROM CUSTOMER.

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**APPENDIX I** 

**PUTNAM ETF TRUST** 

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| |
|:---|
|  Putnam Focused Large Cap Value ETF |
|  Putnam ESG Core Bond ETF |
|  Putnam Sustainable Leaders ETF |
|  Putnam Sustainable Future ETF |
|  Putnam PanAgora ESG International Equity ETF |
|  Putnam BDC Income ETF |
|  Putnam ESG High Yield ETF |
|  Putnam ESG Ultra Short ETF |
| Putnam Focused Large Cap Growth ETF |
| Putnam PanAgora ESG Emerging Markets Equity ETF |
| Putnam Emerging Markets ex-China ETF |
| Putnam BioRevolution ETF |

---

## Ex-99.(H)(1)

**<u>EXECUTION</u>**

![LOGO](g842776dsp270.jpg)

**TRANSFER AGENCY AND SERVICE AGREEMENT** 

THIS AGREEMENT is made as of the 16th day of July, 2025 ("Effective Date"), by and between each Trust (hereinafter each a "Trust", and collectively the "Trusts" as applicable) on behalf of its Funds (hereinafter, each a "Fund") listed on Appendix A hereto (as such Appendix may be amended from time to time) and THE BANK OF NEW YORK MELLON, a New York corporation authorized to engage in a banking business having its principal office and place of business at 240 Greenwich Street, New York, New York 10286 (the "Bank").

WHEREAS, each Trust, on behalf of a Fund, will ordinarily issue for purchase and redeem shares of beneficial interest of a Fund (the "Shares) only in aggregations of Shares known as "Creation Units" (each a "Creation Unit");

WHEREAS, The Depository Trust Company, a limited purpose trust company organized under the laws of the State of New York ("DTC"), or its nominee (Cede & Co.), will be the registered owner (the "Shareholder") of all Shares of a Fund; and

WHEREAS, each Trust, on behalf of a Fund, desires to appoint the Bank as its transfer agent, dividend disbursing agent, and agent in connection with certain other activities, and the Bank desires to accept such appointment;

NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto, intending to be legally bound hereby, agree as follows:

1. <u>Terms of Appointment; Duties of the Bank</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 Subject to the terms and conditions set forth in this Agreement, each Trust on behalf of its Funds, hereby employs and appoints the Bank to act as, and the Bank agrees to act as, its transfer agent for the authorized and issued Shares, and as a Trust's dividend disbursing agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2 Pursuant to such appointment, the Bank agrees that it will perform the following services:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) In accordance with the terms and conditions of this Agreement and the Authorized Participant Agreements prepared by a Trust's distributor ("Distributor") applicable to a Fund, a copy of which is attached hereto as Exhibit A and in accordance with a Fund's current prospectus and statement of additional information, and any effective amendments thereto actually provided to the Bank, the Bank shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Perform and facilitate the performance of purchases and redemptions of Creation Units for a Fund;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Prepare and transmit by means of DTC's book-entry system payments for dividends and distributions on or with respect to the Shares, if any, declared by a Trust on behalf of a Fund;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Maintain separate and distinct records for each Fund with respect to the record of the name and address of the Shareholder and the number of Shares issued by a Fund and held by the Shareholder in a Fund and maintain the record of the name and address of each Authorized Participant (as defined in the Authorized Participant Agreement);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Record the issuance of Shares of a Fund and maintain a record of the total number of Shares of a Fund which are outstanding. The Bank shall have no obligation, when recording the

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issuance of Shares, to monitor the issuance of such Shares or to take cognizance of any laws relating to the issue or sale of such Shares, which functions shall be the sole responsibility of a Trust.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) Prepare and transmit to a Trust and a Trust's administrator and to any applicable securities exchange (as specified to the Bank by a Trust or its administrator) information with respect to purchases and redemptions of Shares of a Fund;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) On days that a Trust, on behalf of a Fund, may accept orders for purchases or redemptions of a Fund's Shares, calculate and transmit to the Distributor and a Trust's administrator the number of outstanding Shares of a Fund;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) On days that a Trust, on behalf of a Fund, may accept orders for purchases or redemptions of a Fund's Shares (pursuant to the Authorized Participant Agreement), transmit to the Bank, a Trust, and DTC the amount of Shares of a Fund purchased on such day;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) Confirm to DTC the number of Shares of a Fund issued to the Shareholder, as DTC may reasonably request;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) Prepare and deliver other reports, information and documents to DTC as DTC may reasonably request;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) Extend the voting rights to the Shareholder for extension by DTC to DTC participants and the beneficial owners of Shares of a Fund in accordance with policies and procedures of DTC for book-entry only securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) Distribute or maintain, as directed by a Trust, amounts related to a Fund's purchases and redemptions of Creation Units, dividends and distributions, variation margin on derivative securities and collateral;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) Send to the National Securities Clearance Corporation ("NSCC") on the evening of each trade day each Fund's holdings or with respect to a semi-transparent Fund a create/redeem basket, as applicable, for the following trade day;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) Create and maintain separate and distinct books and records for a Fund of a Trust specified by a Trust in Schedule A attached hereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv) Prepare a monthly report of all purchases and redemptions of Shares of a Fund during such month on a gross transaction basis, and identify on a daily basis the net number of Shares of a Fund either redeemed or purchased on such Business Day and with respect to each Authorized Participant (as defined in the Authorized Participant Agreement) purchasing or redeeming Shares of a Fund, the amount of Shares of a Fund purchased or redeemed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xv) Receive from the Distributor or from its agent purchase orders from Authorized Participants for Creation Unit aggregations of Shares of a Fund received in good form and accepted by or on behalf of a Trust by the Distributor, generate or cause to be generated and transmitted confirmation of receipt of purchase orders to Authorized Participants; promptly transmit appropriate trade instructions to the NSCC or DTC, if applicable, and pursuant to such orders issue the appropriate number of Shares of a Fund and hold such Shares of a Fund in the account of the Shareholder of a Fund of a Trust;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvi) Receive from the Authorized Participants redemption requests, deliver the appropriate documentation thereof to the Bank as custodian for a Fund of a Trust and, generate and transmit

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or cause to be generated and transmitted confirmation of receipt of such redemption requests to the Authorized Participants submitting the same; transmit appropriate trade instructions to the NSCC or DTC, if applicable, and redeem the appropriate number of Creation Unit aggregations of Shares held in the account of the Shareholder and at the appropriate time as and when it receives monies paid to it by the Custodian with respect to any redemption, pay over or cause to be paid over in the appropriate manner, such monies, if any, to the redeeming Authorized Participant; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvii) Confirm the name, U.S taxpayer identification number and principal place of business of each Authorized Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xviii) The Bank may execute transactions directly with Authorized Participants to the extent necessary or appropriate to enable the Bank to carry out any of the duties set forth in items (i) through (xvii) above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xix) Maintain and manage, as agent for the Trust and each Fund, such bank accounts for the sole benefit of the Trust and a Fund as the Bank shall deem necessary for the performance of its duties under this Agreement, including but not limited to, the processing of Creation Unit purchases and redemptions and the payment of a Fund's dividends and distributions. The Bank may maintain, in accordance with applicable law, such accounts at the bank or banks deemed appropriate by the Bank;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xx) Process any request from an Authorized Participant to change its account registration (including, without limitation, the processing of changes to any Personal Identification Numbers (PINS) or other identification procedures used by the Bank in connection with transactions by Authorized Participants);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxi) (a) Except as otherwise instructed by a Trust, on behalf of a Fund, the Bank shall process all transactions for a Fund in accordance with the policies and procedures mutually agreed upon between a Trust and the Bank with respect to the proper net asset value to be applied to purchases received in good order by the Bank or from an Authorized Participant before any cut-offs established by a Trust, and such other matters set forth in items (i) through (xx) above as these policies and procedures are intended to address. The Bank shall report to a Trust any known exceptions to the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Bank may (1) maintain and manage, as agent for a Trust and its Funds, such accounts as the Bank shall deem necessary for the performance of its duties under this Agreement, including, but not limited to: the processing of Creation Unit purchases and redemptions; accepting and effectuating the registration and maintenance of accounts, and the purchase and redemption of Creation Units in such accounts, in accordance with instructions transmitted to and received by the Bank by transmission from DTC or NSCC on behalf of Authorized Participants; and (2) issue instructions to a Fund's banks for the settlement of transactions between the Fund and DTC or NSCC (acting on behalf of the applicable Authorized Participant); and paying dividends and distributions; The Bank may maintain such accounts at financial institutions deemed appropriate by the Bank in accordance with applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) In addition to the services set forth in the above sub-section 1.2(a), the Bank shall: perform the customary services of a transfer agent and dividend disbursing agent including, but not limited to, maintaining the accounts of a Shareholder, obtaining at the request of DTC participants holding interests in the Global Certificate maintaining the items set forth on Schedule A attached hereto, and performing such services identified in each Authorized Participant Agreement. The Bank shall provide the office facilities and the personnel required by it to perform the services contemplated herein at no additional cost to the Trust.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The following shall be delivered by the Bank to DTC participants as identified by DTC as the Shareholder for book-entry only securities:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Annual and semi-annual reports of a Trust and its Funds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Fund proxies, proxy statements and other proxy soliciting materials;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Fund prospectuses and amendments and supplements thereto, including stickers; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Other communications as a Trust may from time to time identify as required by law or as a Trust may reasonably request

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) The Bank shall provide additional services, if any, as may be agreed upon in writing by a Trust and the Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Bank shall keep records relating to the services to be performed hereunder, in the form and manner required by (i) applicable laws, rules, and regulations under the Investment Company Act of 1940, as amended (the "1940 Act") and to the extent required by Section 31 of the 1940 Act and the rules thereunder (the "Rules") and (ii) the Commodity Exchange Act ("CEA") in connection with the services provided hereunder for any Fund identified to the Bank in writing as being a commodity pool operated by a registered commodity pool operator. All such books and records shall be the property of a Trust, will be preserved, maintained and made available to a Trust in accordance with this Section, the Rules and the CEA and related regulations, and will be surrendered promptly to a Trust on and in accordance with its request or upon termination of this Agreement in the format reasonably specified by the Fund. The Trust and any of its authorized persons shall have access to such books and records in the possession or under control of the Bank at all times during the Bank's normal business hours. Upon the reasonable request of a Trust, copies of any such books and records in the possession or under the control of the Bank shall be provided by Bank to a Trust or any of its authorized persons.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Bank shall preserve for the period(s) required by (i) the 1940 Act and the CEA, as applicable, and (ii) any court order, regulatory action or subpoena communicated to the Bank by the Funds, the books and records required to be maintained thereunder. All such books and records shall be maintained in a form reasonably acceptable to the applicable Fund, and shall be reasonably arranged and indexed by the Bank in a manner that permits reasonably prompt location, access and retrieval of any particular record, including, if requested by a Fund, within the time period specified by applicable regulators. The Bank shall not destroy any files, records or documents created or maintained by the Bank pursuant to this Agreement except in accordance with its record retention policy as communicated to the Trusts from time to time or if such destruction is authorized by the Trust by means of written Instructions. Notwithstanding the above, if the format specified by the Fund is not a format the Bank utilizes to maintain the books and records, the Trust shall pay the expenses reasonably incurred by the Bank in converting such books and records to the requested format.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3 The Bank agrees to promptly notify the Trust in the event of any of the following:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Any of the representations and warranties of the Bank in Section 3 below cease to be true and correct;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Bank is for any reason unable to perform any of its obligations under this Agreement; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Except as may be prohibited by applicable law, any legal, regulatory or administrative proceedings that have been instituted against the Bank, which would materially impair the Bank's ability to perform its duties and obligations under this Agreement.

2. <u>Fees and Expenses</u>

The Bank shall receive from a Trust, such compensation for the Bank's services provided pursuant to this Agreement as may be agreed to from time to time in a written fee schedule approved by the parties. The fees are accrued daily and billed monthly and shall be due and payable upon receipt of the invoice. Upon the termination of this Agreement before the end of any month, the fee for the part of the month before such termination shall be prorated according to the proportion which such part bears to the full monthly period and shall be payable upon the date of termination of this Agreement. The parties agree that any new fees and/or expenses to be charged to a Fund that are related to any changes to the services required by any new applicable law, rule or regulation shall be agreed upon in advance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 In addition to the fee paid under Section 2.1 above, each Trust, on behalf of a Fund, agrees to reimburse the Bank for reasonable out-of-pocket expenses, including but not limited to confirmation production, postage, forms, telephone, microfilm, microfiche, tabulating proxies, records storage, or advances incurred by the Bank for the items set out in the fee schedule or relating to dividend distributions and reports (whereas all expenses related to creations and redemptions of a Fund's securities shall be borne by the relevant Authorized Participant in such creations and redemptions). In addition, any other expenses incurred by the Bank at the request or with the consent of a Trust will be reimbursed by a Trust on behalf of a Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 Each Trust, on behalf of its Funds, agrees to pay all fees and reimbursable expenses within twenty business days following the receipt of the respective billing notice accompanied by supporting documentation, as appropriate. Postage for mailing of dividends, proxies, Trust reports and other mailings to all shareholder accounts shall be advanced to the Bank by a Trust, on behalf of a Fund, at least seven (7) days prior to the mailing date of such materials.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 Each Trust, on behalf of its Funds, hereby represents and warrants to the Bank that (i) the terms of this Agreement, (ii) the fees and expenses associated with this Agreement, and (iii) any benefits accruing to the Bank or to the adviser to, or sponsor of, a Trust in connection with this Agreement, including, but not limited to, any fee waivers, reimbursements, or payments made, or to be made, by the Bank to such adviser or sponsor or to any affiliate of a Trust relating to this Agreement have been fully disclosed to the board of trustees of a Trust and that, if required by applicable law, such board of trustees of a Trust has approved or will approve the terms of this Agreement, and any such fees, expenses, and benefits.

3. <u>Representations and Warranties of the Bank</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Bank represents and warrants to a Trust that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) It is and will continue to be a banking company duly organized and existing and in good standing under the laws of the State of New York.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) It is and will continue to be duly qualified to carry on its business in the State of New York.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) It is and will continue to be empowered under applicable laws and by its Charter and By-Laws to act as transfer agent and dividend disbursing agent and to enter into, and perform its obligations under, this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) All requisite corporate proceedings have been taken to authorize it to enter into and perform this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) It has and will continue to have access to the necessary facilities, equipment and personnel to perform its duties and obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) It is and will continue to be duly registered as a transfer agent under Section 17A(c)(2) of the Securities Exchange Act of 1934, as amended, (the "1934 Act") and it will remain so registered for the duration of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) It is and will continue to be in full material compliance with federal and state laws applicable to its duties under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) This Agreement, when executed and delivered by the parties hereto, will constitute a legal, valid and binding obligation of the Bank enforceable against the Bank in accordance with its terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) The Agreement's execution and performance will not cause a material breach or be in material conflict with any other agreement or obligation of the Bank or any law or regulation applicable to it.

4. <u>Representations and Warranties of a Trust</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each Trust, on behalf of its Funds, represents and warrants to the Bank that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) It is duly organized and existing and in good standing under the laws of Delaware.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) It is empowered under applicable laws and by its Agreement and Declaration of Trust and By-Laws to enter into and perform this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) It is an open-end management investment company registered under the 1940 Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) A registration statement under the Securities Act of 1933, as amended, on behalf of each of the Trusts has become effective, will remain effective, and appropriate state securities law filings have been made and will continue to be made, with respect to all Shares of the Trust being offered for sale.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) This Agreement, when executed and delivered by the parties hereto, will constitute a legal, valid and binding obligation of each Trust enforceable against the Trust in accordance with its terms.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) The Agreement's execution and performance will not cause a material breach or be in material conflict with any other agreement or obligation of each Trust or any law or regulation applicable to it.

5. <u>Indemnification</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 Subject to its performance in good faith and in accordance with the Standard of Care, the Bank shall not be responsible for, and the Trust, on behalf of itself and each Fund, severally and not jointly, shall indemnify and hold the Bank harmless from and against, any and all losses, damages, costs, charges, reasonable counsel fees, payments, reasonable expenses and liabilities arising out of or attributable to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) all actions of the Bank required to be taken pursuant to this Agreement, provided that such actions are taken in accordance with the Standard of Care and without negligence, bad faith, fraud, reckless disregard of its duties, willful misconduct or breach of this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the Trust's material breach of any representation, warranty, or covenant of the Trust hereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the Bank's reliance upon any instructions of the Trust or any of its officers, employees, agents or subcontractors who have been designated by the Trust as authorized persons;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the offer or sale of Creation Units in violation of any requirement under the federal or state securities laws or regulations requiring that such Creation Units be registered, or in violation of any stop order or other determination or ruling by any federal or state agency having jurisdiction over the Trust with respect to the offer or sale of such Creation Units; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) any tax obligations under the tax laws of any country or of any state or political subdivision thereof, including taxes, withholding and reporting requirements, claims for exemption and refund, additions for late payment, interest, penalties and other expenses (including legal expenses) that may be assessed, imposed or charged against the Bank as transfer agent hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 At any time, the Bank may apply to any officer of the Trust for instructions with respect to any matter arising in connection with the services to be performed by the Bank under this Agreement. The Bank, its agents and subcontractors shall be protected and indemnified in acting upon any paper or document furnished by or on behalf of the Trust or the applicable Fund, reasonably believed to be genuine and signed by an authorized person and shall not be held to have notice of any change of authority of any person, until receipt of written notice thereof from the Trust or an authorized person. Nothing in this Section shall be construed as imposing upon the Bank any obligation to seek such instructions

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 In order that the indemnification provisions above shall apply, upon the assertion of a claim for which the Trust may be required to indemnify the Bank, the Bank shall promptly notify the Trust of such assertion, and shall keep the Trust advised with respect to all material developments concerning such claim. The Trust shall have the option to participate with the Bank in the defense of such claim or to defend against said claim in its own name. The Bank shall in no case confess any claim or make any compromise in any case in which the Trust may be required to indemnify the Bank except with the Trust's prior written consent, which shall not be unreasonably withheld.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4 Subject to the terms of this Agreement, including, without limitation, Section 6.1 below, the Bank shall indemnify and hold the Trust and each Fund, separately and not jointly, harmless from and against, any and all losses, damages, costs, charges, reasonable counsel fees, payments, reasonable expenses and liabilities, the recovery of which is not excluded by another provision of this Agreement, arising out of

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or attributable to the Bank's (i) breach of this Agreement (including without limitation a breach of the Standard of Care and any breach caused by an agent or subcontractor of the Bank for whose actions the Bank is responsible under this Agreement) and (ii) willful misconduct, bad faith, reckless disregard of its duties, fraud, or negligence.

In order that the indemnification provisions contained in this Section 5.4 shall apply, upon the assertion of a claim for which the Bank may be required to indemnify the Trust, or any Fund thereof, the Trust shall promptly notify the Bank of such assertion, and shall keep the Bank advised with respect to all material developments concerning such claim. The Bank shall have the option to participate with the Trust in the defense of such claim or to defend against said claim in its own name. The Trust shall in no case confess any claim or make any compromise in any case in which the Bank may be required to indemnify the Trust, or any Fund thereof, except with the Bank's prior written consent, which shall not be unreasonably withheld.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5 This indemnification provision shall apply to actions taken or omissions pursuant to this Agreement or an Authorized Participant Agreement.

6. <u>Standard of Care and Limitation of Liability</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 In performing its responsibilities under this Agreement, the Bank agrees to exercise reasonable care, prudence, expertise and diligence such as a person having responsibility for providing transfer agent services to investment companies registered under the 1940 Act would exercise (the "Standard of Care"), but assumes no responsibility and shall not be liable for any loss or damages arising out of the Bank's performance of or failure to perform its duties under this Agreement except to the extent such losses or damages arise out of the Bank's willful misconduct, bad faith, fraud, reckless disregard of its duties, negligence, or from a breach of this Agreement. The parties agree that any encoding or payment processing errors shall be governed by this Standard of Care, and that Section 4-209 of the Uniform Commercial Code is superseded by this Section. In no event shall either party be liable to the other party for any special, indirect, incidental, punitive or consequential damages of any kind whatsoever (including, without limitation, attorneys' fees relating thereto) under any provision of this Agreement or for any such damages arising out of any act or failure to act hereunder, whether or not such party has advance notice thereof.

7. <u>Concerning the Bank</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Bank may employ agents or attorneys-in-fact which are not affiliates of the Bank with the prior written consent of a Trust (which consent shall not be unreasonably withheld), and shall not be liable for any loss or expense arising out of, or in connection with, the actions or omissions to act of such agents or attorneys-in-fact, provided that the Bank acts in good faith and with reasonable care in the selection and retention of such agents or attorneys-in-fact.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Bank may, without the prior written consent of a Trust, enter into subcontracts, agreements and understandings with any Bank affiliate, whenever and on such terms and conditions as it deems necessary or appropriate to perform its services hereunder. No such subcontract, agreement or understanding shall discharge Bank from its obligations hereunder, and the Bank will be liable for the acts and omissions of any affiliate of the Bank as if the Bank provided such services directly.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 The Bank shall be entitled to conclusively rely upon any written or oral instruction actually received by the Bank and reasonably believed by the Bank to be duly authorized and delivered. Each Trust

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agrees to forward to the Bank written instructions confirming oral instructions by the close of business of the same day that such oral instructions are given to the Bank. Each Trust, on behalf of its Funds, agrees that the fact that such confirming written instructions are not received or that contrary written instructions are received by the Bank shall in no way affect the validity or enforceability of transactions authorized by such oral instructions and effected by the Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 The Bank shall establish and maintain a disaster recovery plan and back-up system at all times satisfying the requirements of its regulators (the "Disaster Recovery Plan and Back-Up System"). The Bank shall not be responsible or liable for any failure or delay in the performance of its obligations under this Agreement arising out of or caused, directly or indirectly, by circumstances beyond its control which are not a result of its negligence, including without limitation, acts of God; earthquakes; fires; floods; wars; civil or military disturbances; sabotage; epidemics; riots; interruption, loss or malfunctions of transportation, computer (hardware or software) or communication services; labor disputes; acts of civil or military authority; governmental actions; or inability to obtain labor, material, equipment or transportation, provided that the Bank has established and is maintaining the Disaster Recovery Plan and Back-Up System, or if not, that such delay or failure would have occurred even if the Bank had established and was maintaining the Disaster Recovery Plan and Back-Up System. Upon the occurrence of any such delay or failure, the Bank shall use commercially reasonable best efforts to resume performance as soon as practicable under the circumstances and shall notify the board of a Trust unless prohibited by law or regulation) about the nature of such delay or failure. The Bank will provide an executive summary of the Disaster Recovery Plan and Back-Up System upon reasonable request of a Trust. The Bank will endeavor to test the adequacy of its Disaster Recovery Plan and Back-Up System at least annually. Upon request by a Trust, the Bank will provide a Trust with a letter summarizing the most recent Disaster Recovery Plan and Back-Up System test results. In addition, the Bank shall, upon reasonable request, provide a high-level presentation summarizing the Disaster Recovery Plan and Back-Up System Plan and shall, upon reasonable request, discuss with senior management (including the board) of a Trust the Disaster Recovery Plan and Back-Up System.

In the event that the Trust reasonably believes that the occurrence of any such event described in the previous paragraph will substantially prevent, hinder or delay performance of the services contemplated by this Agreement for more than five (5) consecutive business days, the Trust may take commercially reasonable actions to mitigate the impact of such services not being provided, including, but not limited to, at the Trust's expense, contracting with another service provider to provide such services during such period; provided, that the Trust shall consult with the Bank in good faith in connection with any such mitigation and the Bank shall provide the Trust reasonable assistance in good faith in connection therewith; provided, further, that the Bank shall resume providing, and the Trust shall pay for, such services when the Bank resumes providing them, unless the Trust has terminated this Agreement pursuant to the terms of Section 11.2. Notwithstanding anything set forth in this Section 7.3, (a) in no event shall the Trust be obligated to pay any fees under this Agreement to the Bank with respect to any services not actually provided during any event described in this Section 7.3, and (b) the Trust shall have no responsibility to pay the Bank for services temporarily performed by a third party service provider.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4 The Bank shall have no duties or responsibilities whatsoever except such duties and responsibilities as are specifically set forth in this Agreement and the Authorized Participant Agreement, and no covenant or obligation shall be implied against the Bank in connection with this Agreement, except as set forth in this Agreement and the Authorized Participant Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5 At any time the Bank may apply to an officer of the Trust, but is not obligated to do so, for written instructions with respect to any matter arising in connection with the Bank's duties and obligations under this Agreement, and the Bank, its agents, and subcontractors shall not be liable for any action taken or omitted to be taken in good faith in accordance with such instructions. Such application by the Bank for

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instructions from an officer of the Trust may, at the option of the Bank, set forth in writing any action proposed to be taken or omitted to be taken by the Bank with respect to its duties or obligations under this Agreement and the date on and/or after which such action shall be taken, and the Bank shall not be liable for any action taken or omitted to be taken in good faith in accordance with a proposal included in any such application on or after the date specified therein unless, prior to taking or omitting to take any such action, the Bank has received written or oral instructions in response to such application specifying the action to be taken or omitted. In connection with the foregoing, the Bank may at its own expense consult with legal counsel of its own choosing, but is not obligated to do so, and advise a Trust if any instructions provided by a Trust at the request of the Bank pursuant to this Section or otherwise would, to the Bank's knowledge, cause the Bank to take any action or omit to take any action contrary to any law, rule, regulation or commercially reasonable practice for similarly situated service providers. In the event a situation or circumstance arises whereby the Bank adopts a course of conduct in reliance upon written legal advice it has received (which need not be a formal opinion of counsel) and the course of conduct is not identical to the course of conduct contained in the instructions received from a Trust, the Bank may rely upon and follow the written legal advice without liability hereunder provided it otherwise acts in compliance with this Agreement and notifies a Trust of its determination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.6 The Bank, its agents and subcontractors may act upon any paper or document, reasonably believed to be genuine and to have been signed by the proper person or persons, or upon any instruction, information, data, records or documents provided to the Bank or its agents or subcontractors by or on behalf of a Trust by machine readable input, telex, CRT data entry or other similar means authorized by a Trust, and shall not be held to have notice of any change of authority of any person, until receipt of written notice thereof from a Trust.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.7 The Bank shall retain title to and ownership of any and all data bases, computer programs, screen formats, report formats, interactive design techniques, derivative works, inventions, discoveries, patentable or copyrightable matters, concepts, expertise, patents, copyrights, trade secrets, and other related legal rights utilized by the Bank in connection with the services provided by the Bank hereunder. Notwithstanding the foregoing, the parties hereto acknowledge that a Trust shall retain all ownership rights in Trust data residing on the Bank's electronic system.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.8 Notwithstanding any provisions of this Agreement to the contrary, the Bank shall be under no duty or obligation to inquire into, and shall not be liable for:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The legality of the issue, sale or transfer of any Shares of a Fund, the sufficiency of the amount to be received in connection therewith, or the authority of a Trust, on behalf of a Fund, to request such issuance, sale or transfer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The legality of the purchase of any Shares of a Fund, the sufficiency of the amount to be paid in connection therewith, or the authority of a Trust, on behalf of a Fund, to request such purchase;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The legality of the declaration of any dividend by a Trust, on behalf of a Fund, or the legality of the issue of any Shares in payment of any stock dividend; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The legality of any recapitalization or readjustment of the Shares of a Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.9 The Bank will furnish to a Trust, no more than once annually, its System and Organization Controls Reports (SOC 1) as well as such other reports and information relating to the Bank's policies and procedures and its compliance with such policies and procedures and with the laws applicable to its business and its services, as the parties may mutually agree upon.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.10 The Bank shall cooperate with a Trust's independent public accountants and shall take reasonable actions to provide such information, as may be reasonably requested by a Trust from time to time, to such accountants for the expression of their opinion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.11 Nothing in this Agreement shall limit or restrict the Bank, any affiliate of the Bank or any officer or employee thereof from acting for or with any third parties, and providing services similar or identical to some or all of the services provided hereunder; provided, however, that notwithstanding this paragraph the Bank may not use a Fund's proprietary information received by the Bank hereunder in providing such services to such other third parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.12 During the term of the Agreement, the Bank will implement and maintain an information security program ("ISP") with written policies and procedures reasonably designed to protect the confidentiality and integrity of a Trust's and its Funds' confidential information provided to the Bank in accordance with the Agreement and when in the Bank's possession or under the Bank's control ("Customer Data"). The ISP will include administrative, technical and physical safeguards, appropriate to the type of Customer Data concerned, reasonably designed to: (i) maintain the integrity, confidentiality and availability of Customer Data; (ii) protect against anticipated threats or hazards to the security or integrity of Customer Data; (iii) protect against unauthorized access to or use of Customer Data that could result in substantial harm or inconvenience to a Trust or its shareholders, and (iv) provide for secure disposal of Customer Data. The Bank shall develop, implement and maintain, at its sole expense, a system or methodology to audit for compliance with the requirements of the preceding sentence that is consistent with the SOC controls framework. Such safeguards will include, but shall not be limited to, virus protection, password protection and encryption of data in transmission at a minimum standard of AES 256. The Bank will provide a Trust, at least annually, with the most recent SOC reports of its systems and methodologies prepared by an independent third party ("SOC Reports"), and will provide an attestation letter (the "Attestation Letter"), which shall be in the form generally provided by the Bank to other similarly situated customers of services similar to the services provided under this Agreement, prepared by the qualified, independent third party engaged by the Bank that performed its most recent penetration and ethical hack testing of its internet-facing environment relevant to the systems used to provide services under this Agreement. The Bank shall maintain books and records sufficient to demonstrate its compliance with the terms of this 7.12. Upon reasonable notice to the Bank, the Bank will arrange for its relevant subject matter experts to meet with the relevant subject matter experts of a Trust once annually and at such other times as a Trust may reasonably request to review the Bank's security controls and any deficiencies identified in the SSAE-18 audit reports. The Bank acknowledges and agrees that, in addition to the Attestation Letter and SOC Reports, it shall discuss with and make available to a Trust the ability to view at the Bank's offices the Bank's vulnerability management policy as part of the Bank's participation in ta Trust's periodic security review. At such meeting, a Trust may view the Bank's security-related policies and procedures; however, no documentation may be copied, shared, transmitted or removed from the Bank's premises, except as mutually agreed. In the event that a Trust reasonably identifies a weakness in the information security measures adopted by the Bank which has caused or will cause a material breach of the information security measures described in this Section 7.12, a Trust shall provide full details of such weakness in writing to the Bank. If a Trust and the Bank mutually agree in writing that a weakness identified by a Trust in writing to the Bank will cause the Bank to materially breach the information security measures described in this Section 7.12, then the Bank will seek to remediate such weakness by incorporating it into its vulnerability and remediation schedule. All nonpublic documentation and information disclosed to Trust in accordance with this Section 7.12 shall be deemed proprietary and Confidential Information of the Bank. The Funds shall not disclose such documentation or information to any third party (except to the extent permitted, necessary or required pursuant to Section 8.6 or use it for any purpose other than evaluating the Bank's security controls, except that a Trust may disclose the Bank's SSAE-18 summary to a Trust's external auditors provided that such external auditors are required to maintain the confidentiality of the summary and any related information.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.13 In the event of any actual or reasonably suspected, based on the Bank's experience, breach of security of its systems resulting in the actual or reasonably suspected, based on the Bank's experience, unauthorized access to or acquisition, use, loss, destruction, compromise or disclosure of any of the confidential records or information of a Fund (each, a "<u>Security Breach</u>"), upon learning of the Security Breach, the Bank shall notify such Fund as promptly as reasonably possible (but no later than 72 hours after becoming aware that a Security Breach has occurred) of the relevant facts related to such Security Breach then known to the Bank, and of additional relevant facts promptly after they become known to the Bank, in the manner provided in Section 18 of this Agreement and also by sending notice to <u>NetworkOperationsSecurityCenter@franklintempleton.com</u> and/or such other electronic mail address or addresses as a Trust, on behalf of a Fund, may specify by written notice to the Bank. The Bank shall at its sole cost: (i) promptly investigate such Security Breach; (ii) resolve or mitigate the vulnerability that facilitated the Security Breach to the extent possible; (iii) restore any lost or damaged data using generally accepted data restoration techniques; and (iv) conduct a root cause analysis to provide the Fund with a summary of the findings and actions taken to prevent recurrence of such Security Breach. If a Security Breach occurs with respect to personal information in the possession or under the control of the Bank or any of its affiliates, subsidiaries, agents or employees, the Bank shall be responsible for each Fund's reasonable costs associated with responding to such Security Breach, including, but not limited to, the costs of notifying affected individuals and taking any remedial action required by applicable statutes, laws, rules and regulations and any such other remedial action that the Bank reasonably deems necessary (with due regard for industry standards, if any).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.14 On a quarterly basis, the Bank will provide to a Trust a certification in connection with Rule 38a-1 under the 1940 Act, including an attestation as to whether there have been any material changes to the summaries of policies and procedures provided to a Trust, and sub-certifications related to the Sarbanes-Oxley Act of 2002. The Bank reserves the right to amend and update its compliance program and the measurement tools and certifications provided thereunder from time to time in order to address changing regulatory and industry developments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.15 The Bank will maintain, at all times during the term of this Agreement, insurance of the types and in the amounts as are commercially reasonable, taking into account the nature of its business, the associated risks and the cost and availability of insurance having commercially viable terms and conditions. The Bank agrees to provide a Trust with certificates of its applicable insurance coverage, and shall provide an update at a Trust's written request, but no more frequently than annually.

8. <u>Providing of Documents by a Trust and Transfers of Shares</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 Each Trust, on behalf of its Funds, shall promptly furnish to the Bank with a copy of its Agreement and Declaration of Trust and all amendments thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2 In the event that DTC ceases to be the Shareholder, the Bank shall re-register the Shares in the name of the successor to DTC as Shareholder upon receipt by the Bank of such documentation and assurances as it may reasonably require.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3 The Bank shall have no responsibility whatsoever with respect to of any beneficial interest in any of the Shares of a Fund owned by the Shareholder.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4 Each Trust, on behalf of its Funds, shall deliver to the Bank the following documents on or before the effective date of any increase, decrease or other change in the total number of Shares of a Fund authorized to be issued to the extent applicable:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) A certified copy of the amendment to a Trust's Agreement and Declaration of Trust with respect to such increase, decrease or change; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) An opinion of counsel for a Trust, in a form satisfactory to the Bank, with respect to (i) the validity of the Shares of a Fund, the obtaining of all necessary governmental consents, whether such Shares of a Fund are fully paid and non-assessable and the status of such Shares of a Fund under the Securities Act of 1933, as amended, and any other applicable federal law or regulations (<u>i.e.</u>, if subject to registration, that they have been registered and that the Registration Statement has become effective or, if exempt, the specific grounds therefore), (ii) the status of a Trust with regard to the 1940 Act, and (iii) the due and proper listing of the Shares of a Fund on all applicable securities exchanges.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.5 Prior to the issuance of any additional Shares pursuant to stock dividends, stock splits or otherwise, and prior to any reduction in the number of Shares outstanding, a Trust shall deliver to the Bank:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) A certified copy of the order or consent of each governmental or regulatory authority required by law as a prerequisite to the issuance or reduction of such Shares of a Fund, as the case may be, and an opinion of counsel for a Trust that no other order or consent is required; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) An opinion of counsel for a Trust, in a form satisfactory to the Bank, with respect to (i) the validity of the Shares of a Fund, the obtaining of all necessary governmental consents, whether such Shares of a Fund are fully paid and non-assessable and the status of such Shares of a Fund under the Securities Act of 1933, as amended, and any other applicable federal law or regulations (<u>i.e.</u>, if subject to registration, that they have been registered and that the Registration Statement has become effective or, if exempt, the specific grounds therefore), (ii) the status of a Trust with regard to the 1940 Act, and (iii) the due and proper listing of the Shares of a Fund on all applicable securities exchanges.

8.6 The Bank and each Trust agree that all books, records, confidential, non-public, or proprietary information and data pertaining to the business of the other party which are exchanged or received pursuant to the negotiation or the carrying out of this Agreement shall remain confidential, shall be used by the other party hereto solely for the purpose of rendering or receiving services pursuant to, or otherwise in accordance with, this Agreement; and shall not be voluntarily disclosed to any person other than its auditors, accountants, regulators, employees, agents, attorneys-in-fact or counsel, except (i) as may be required in carrying out this this Agreement and (ii) as may be, or may become required by law, by administrative or judicial order or by rule, provided that the disclosing party shall give prompt notice to the other party of any such disclosure to the extent practicable and permitted by applicable law and upon the non-disclosing party's request, the disclosing party will use reasonable efforts to obtain assurances from the relevant authority that confidential treatment will be accorded to the information that is required to be disclosed. To the extent required to be disclosed to third parties in carrying out this Agreement, the disclosing party shall require such third party to treat confidentially such information commensurate with this Section 8.6. Nothing in this Agreement shall be deemed to authorize the Bank to waive attorney-client, work product or other legal privilege by or on behalf of a Trust or its investment adviser. The Bank has established and maintains policies and measures reasonably designed to protect the confidentiality of customer information, and will subject information hereunder to such policies and measures. The foregoing confidentiality obligation shall not apply to any information to the extent: (i) it is already known to the receiving party at the time it is obtained; (ii) it is or becomes publicly known or available through no wrongful act of the receiving party: (iii) it is rightfully received from a third party who, to the receiving party's knowledge, is not under a duty of confidentiality; (iv) it is released by the protected party to a third

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party without restriction; or (v) it has been or is independently developed or obtained by the receiving party without reference to the information provided by the protected party. The parties acknowledge and agree that any breach or threatened breach of this Section would cause financial damage and irreparable harm to a Trust and the Funds for which money damages will not be an adequate remedy. Accordingly, in the event of a breach or threatened breach of this Section, a Trust, in addition to, and not in limitation of, all other rights and remedies it may have, shall be entitled to an injunction restraining disclosure or misuse, in whole or in part, of any confidential information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.7 In case of any requests or demands for the inspection of the Shareholder records of a Trust, the Bank will promptly employ reasonable commercial efforts to notify a Trust and secure instructions from an authorized officer of the Trust as to such inspection. The Bank reserves the right, however, to exhibit the Shareholder records to any person whenever it is advised by its counsel that it may be held liable for the failure to exhibit the Shareholder records to such person provided, however, that the Bank, unless prohibited from doing so by applicable law or regulatory authority, will notify the Trust of any such exhibition so that the Trust may seek a protective order or other appropriate remedy.

9. <u>Key Performance Indicators</u>*.* 

The Bank and a Trust may from time to time agree to document the manner in which they expect to deliver and receive, respectively, the services contemplated by this Agreement. The parties agree that such measures (hereinafter referred to as "KPIs") reflect performance goals and dependencies and any failure to perform in accordance with the provisions thereof shall not in and of itself be considered a breach of contract that gives rise to contractual or other remedies unless the parties mutually expressly agree otherwise. Nothing in this Section shall modify the Standard of Care under this Agreement or be construed to prevent a party from pursuing any remedy otherwise available to it pursuant to this Agreement. The Trust and the Bank agree to periodically review the Bank's performance against the KPIs. Where any such review reveals that one specific KPI has measured at a "red" or "amber" status for three consecutive months ("Rectification Trigger"), the Trust may, in its sole discretion, invoke the process set out in this Section:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Bank shall investigate, assemble and preserve (in accordance with its records management policy) all
pertinent information with respect to, and report the root causes of the problem that led to the Rectification Trigger and the Trust shall provide such assistance as the Bank may reasonably request;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Bank shall propose an appropriate written corrective action plan ("Rectification Plan") with
respect to such failure and in any event within ten (10) business days, or as otherwise reasonably agreed by the parties. The Rectification Plan shall set out the anticipated improvements ("Anticipated Improvements") and the
timeline over which those improvements are expected to be realized ("Plan Period"), which shall be no longer than ninety (90) days (without a Trust's prior written consent, not to be unreasonably withheld or delayed). The
Trust shall review the Rectification Plan within five (5) business days and shall (without any liability, waiver or resulting obligation or deemed acceptance of approach) comment on the Rectification Plan, suggest improvements and/or challenge
any assumptions and ideas embodied in the Rectification Plan. It is acknowledged that a Trust shall not be obligated or required to acknowledge the Rectification Plan will achieve the relevant KPIs. Upon the parties agreeing on the terms of the
Rectification Plan, the Bank shall, as soon as reasonably practicable, implement the Rectification Plan so as to deliver the Anticipated Improvements.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Bank shall provide the Trust with regular updates of the progress of the Rectification Plan and the parties
shall periodically review the progress during the Plan Period;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) The Bank shall, as soon as reasonably practicable, notify the Trust in writing of any material changes to the
Rectification Plan from time to time and the reasons for those changes; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) At the end of the Plan Period, the Bank shall report on whether the Rectification Plan has delivered the
Anticipated Improvements in accordance with this Section 9.

10. <u>Audit Rights.</u>

During the term of this Agreement, the Bank shall provide to the Trust and to its internal and external auditors, inspectors, regulators and other authorized representatives of the Trust access to the Bank's books and records for the purpose of conducting financial, operational or regulatory audits. Such audits shall be conducted at the Trust's expense (which shall include costs related to providing materials, copying, faxing, retrieving stored materials, and similar expenses) and shall occur during the Bank's regular business hours and upon advance notice to the Bank and, except as otherwise agreed to by the parties or for regulatory audits, no more frequently than once a year. Audits will be conducted with representatives of the Bank present at all times. The Trust's representatives will comply with all standard safety, confidentiality and security procedures of the Bank. In connection with such audits, the Trust's representatives shall not attempt to access, nor will they review, the records of any other clients of the Bank. In the event the parties mutually agree to permit an onsite visit/inspection at Bank's offices, such inspections shall be conducted in a manner that will not materially interfere with the Bank's normal and customary conduct of its business activities, including the provision of services to the Trust and to other clients. The Bank may require any persons seeking access to its facilities to provide reasonable evidence of their authority. The Bank may also reasonably require any of the Trust's representatives to execute a confidentiality agreement before granting such individuals access to its facilities. Nothing contained herein shall obligate the Bank to provide access to or otherwise disclose: (i) any information that is unrelated to the Bank or the Trust and the provision of the services hereunder; (ii) any information that is treated as confidential under the Bank's corporate policies, including, without limitation, internal audit reports, compliance or risk management plans or reports, work papers and other reports and information relating to management functions; or (iii) any other documents, reports or other information that the Bank is obligated to maintain in confidence by contract, by its regulators or otherwise as a matter of law, legal privilege or regulation.

11. <u>Termination of Agreement</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1 The term of this Agreement shall be five (5) years commencing upon the date hereof (the "Initial Term") and shall automatically renew for additional one-year terms (each a "Subsequent Term") unless any party provides written notice of termination at least ninety (90) days prior to the end of the Initial Term or any Subsequent Term or, unless earlier terminated as provided below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.2 Notwithstanding the preceding paragraph 11.1 of this Section 11, in the event that the Bank or a Trust (as applicable, a "Defaulting Party") shall fail in any material respect to perform its duties and obligations (in the case of the Bank, in accordance with the Standard of Care) hereunder (including, in the case of the Bank, through persistent non-material failures to perform its duties or obligations hereunder or the persistent failure to meet agreed upon KPIs), the other party (the "Other Party") shall have given written notice thereof to the Defaulting Party, and such material failure shall not have been remedied to the

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reasonable satisfaction of the Other Party within thirty (30) days after such written notice is received, then, as applicable, the Trust may terminate this Agreement by providing thirty (30) days' written notice of such termination to the Bank, or the Bank may terminate this Agreement by providing one hundred twenty (120) days' written notice of such termination to the Trust. In addition, notwithstanding the preceding sentence, this Agreement may be terminated by the Trust (i) immediately in the event (a) the Bank ceases to be qualified as a transfer agent under the 1934 Act, or (b) provided the Trust provides prompt advance notice thereof, the Trust or a Fund liquidates, dissolves, merges or reorganizes with another investment company or, (ii) by providing thirty (30) days' written notice of such termination to the Bank in the event that the Bank is indicted for a crime, commences any bankruptcy or insolvency proceeding or has such a proceeding initiated against it which is not dismissed within sixty (60) days, or suffers any other material adverse change in its condition, operations or professional reputation that is determined by the Trust in its reasonable discretion to threaten the continuing performance of services hereunder or the reputation of the Trust. Upon termination of the Agreement pursuant to this paragraph 11.2 with respect to any Trust or Fund, the Trust, on behalf of the applicable Fund, shall pay to the Bank such compensation as shall have accrued to the effective date of such termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.3 [Reserved.]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.4 [Reserved.]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.5 Termination of this Agreement with respect to the coverage of any one particular Trust or Fund shall in no way affect the rights and duties under this Agreement with respect to any other Trust or Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.6 Notwithstanding any provision of this Section 11 to the contrary, in the event that this Agreement is terminated in its entirety, the parties agree to continue operating under the terms of this Agreement as if this Agreement remained in full force and effect for one year or for such shorter period of time as the remaining Trust or Trusts may determine in their sole discretion is necessary for an orderly transition of transfer agency services to a new transfer agent. The Bank agrees to cooperate and work in good faith, including without limitation by transferring such records and performing such services as are reasonably necessary to substitute the successor transfer agent for the Bank; *provided* that the Bank shall be under no obligation to undertake any unduly burdensome action with respect to such transition and the Bank shall be compensated for such activities as mutually agreed upon by the parties hereto in advance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.7 Should a Trust exercise its right to terminate, all out-of-pocket expenses associated with the movement of records and material will be borne by a Trust.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.8 The terms of Article 2 (with respect to fees and expenses incurred prior to termination), Article 5 and Article 6 shall survive any termination of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.9 Upon termination of the Agreement, the Bank will (i) surrender all records maintained by the Bank in accordance with Section 1.2(e) above, and (ii) at a Trust's request, offer assistance in converting, within a reasonable time frame agreed to by the parties, the transition of a Trust's records from the Bank's systems to the services or systems designated by a Trust for such transition, subject to compensation of the Bank for such assistance at its standard rates and fees in effect at that time.

12. Additional Trusts or Funds

Additional management investment companies (each a "New Trust") and additional series of existing management investment companies that are listed on Appendix A hereto or of New Trusts (each a "New Fund") may from time to time be added as Trusts and Funds serviced under this Agreement by (A)

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delivery to the Bank of (i) an executed instrument of adherence by the New Trust, pursuant to which such New Trust agrees to become bound by and party to this Agreement, (ii) an amendment and restatement of Appendix A setting forth the appropriate information as to such New Trust and/ or New Fund, and (iii) copies of the Documents (as defined below) of such New Trust and/or New Fund and (B) the Bank's receipt of the foregoing Documents, whereupon the Bank, subject to the satisfactory completion of its customary due diligence, shall, in accordance with Section 15 below, agree in writing to the addition of such New Trust and/or New Fund which agreement shall not be unreasonably withheld, it being under stood that the Bank shall not be deemed to be unreasonable in the event that (i) the Bank's ability to provide services hereunder to the New Trust or New Fund is otherwise restricted by regulatory requirements or (ii) the Bank does not generally offer transfer agency services to institutional clients regarding the particular type of fund or assets. "Documents" shall mean such documents, including but not limited to, board of trustees' resolutions, including resolutions of the New Trust's or New Fund's board of trustees authorizing the execution, delivery and performance of this Agreement by the New Trust or New Fund, and opinions of outside counsel, as the Bank may reasonably request from time to time, in connection with its provision of services under this Agreement.

13. <u>Assignment</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.1 Neither this Agreement nor any rights or obligations hereunder may be assigned by any party without the written consent of the other party; provided, however, subject to the following sentence either party may assign this Agreement to a party controlling, controlled by or under common control with it. The Bank (i) may assign or delegate certain of its obligations hereunder to an affiliate or subsidiary of the Bank without the Trust's prior written consent, provided that the Bank shall remain responsible for the actions and omissions of such affiliate or subsidiary as if such actions or omissions were taken by the Bank; (ii) may assign or transfer this Agreement in connection with a sale of a majority or more of its assets, equity interests or voting control, provided that the Bank gives the Trust ninety (90) days prior written notice of such assignment or transfer, such assignment or transfer does not impair the provision of services under this Agreement in any material respect, and the assignee or transferee has all necessary licenses and registrations and ability to perform the Bank's duties hereunder and agrees to be bound by all terms of this Agreement in place of the Bank; and (iii) may subcontract with, hire, engage or otherwise outsource to an unaffiliated third party with respect to the performance of any one or more of the functions, services, duties or obligations of the Bank under this Agreement and Bank shall remain fully and absolutely liable to the Trust for any loss, cost or expense arising directly or indirectly from the actions or omissions of any such subcontractor as if such actions or omissions were taken by the Bank.. The Bank shall notify the Trust promptly following the execution of any agreement that would result in, or would be expected to result in, a change of control of the Bank or any parent of the Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.2 This Agreement shall inure to the benefit of and be binding upon the parties and their respective permitted successors and assigns.

14. <u>Severability and Beneficiaries</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.1 In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, the legality and enforceability of the remaining provisions shall not in any way be affected thereby provided obligation of a Trust to pay is conditioned upon provision of services to a Trust by the Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.2 This Agreement is solely for the benefit of the Bank and a Trust, on behalf of its Funds, and none of any Authorized Participants (as defined in the Authorized Participant Agreement), the Distributor, any Shareholder or beneficial owner of any Shares shall be or be deemed a third party beneficiary of this Agreement.

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15. <u>Amendment</u>

This Agreement may be amended or modified by a written agreement executed by both parties.

16. <u>New York Law to Apply</u>

This Agreement shall be construed in accordance with the substantive laws of the State of New York, without regard to conflicts of laws principles thereof. Each Trust and the Bank hereby consent to the jurisdiction of a state or federal court situated in New York City, New York in connection with any dispute arising hereunder. Each Trust, on behalf of its Funds, and the Bank hereby irrevocably waive, to the fullest extent permitted by applicable law, any objection which it may now or hereafter have to the laying of venue of any such proceeding brought in such a court and any claim that such proceeding brought in such a court has been brought in an inconvenient forum. Each Trust and the Bank each hereby irrevocably waives any and all rights to trial by jury in any legal proceeding arising out of or relating to this Agreement.

17. <u>Merger of Agreement</u>

This Agreement constitutes the entire agreement between the parties hereto and supersedes any prior agreement with respect to the subject matter hereof whether oral or written.

18. <u>Notices</u>

All notices and other communications as required or permitted hereunder shall be in writing and sent by first class mail, postage prepaid, addressed as follows or to such other address or addresses of which the respective party shall have notified the other.

If to the Bank:

The Bank of New York Mellon

240 Greenwich Street

New York, New York 10286

Attention: ETF Operations

with a copy to:

The Bank of New York Mellon

240 Greenwich Street

New York, New York 10286

Attention: Legal Dept. – Asset Servicing

If to a Trust:

Putnam ETF Trust

100 Federal Street

Boston, Massachusetts 02110

19. <u>Information Sharing</u>

The Bank of New York Mellon Corporation is a global financial organization that provides services to clients through its affiliates and subsidiaries in multiple jurisdictions (the "BNY Group"). The BNY Group

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may centralize functions including audit, accounting, risk, legal, compliance, sales, administration, product communication, relationship management, storage, compilation and analysis of customer-related data, and other functions (the "Centralized Functions") in one or more affiliates, subsidiaries and third-party service providers. Solely in connection with the Centralized Functions, (i) a Trust consents to the disclosure of and authorizes the Bank to disclose information regarding a Trust ("Customer-Related Data") to the BNY Group and to its third-party service providers who are subject to confidentiality obligations with respect to such information and (ii) the Bank may store the names and business contact information of a Trust's employees and representatives on the systems or in the records of the BNY Group or its service providers. The BNY Group may aggregate Customer-Related Data with other data collected and/or calculated by the BNY Group (so long as such aggregated data represents a sufficiently large sample that no Fund data can be identified either directly or by inference or implication), and notwithstanding anything in this Agreement to the contrary the BNY Group will own all such aggregated data and, provided that the BNY Group shall not distribute the aggregated data in a format that identifies Customer-Related Data with a particular customer or can be reverse engineered to identify Customer-Related Data with a particular customer. Each Trust, on behalf of its Funds, confirms that it is authorized to consent to the foregoing.

20. <u>Counterparts</u>

This Agreement may be executed by the parties hereto in any number of counterparts, each of which shall be deemed an original, and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

21. <u>Limitations and liabilities of the Trustees and Several Obligations of the Funds</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21.1 A copy of the Declaration of Trust of the Trust is on file with the Secretary of the State of Maryland or Delaware, as applicable, and notice is hereby given that this instrument is executed on behalf of the Trustees of a Trust as Trustees and not individually and that the obligations of this instrument are not binding upon any of the Trustees individually but are binding only upon the assets and property of the applicable Fund. The Bank acknowledges and agrees that any obligations and liabilities of a Trust or any Fund arising hereunder shall not be binding upon any of the shareholders, Trustees, officers or employees of a Trust, as provided in a Trust's charter documents, and that, to the extent the Trustees are regarded as entering into this Agreement, they do so only in their capacity as trustees and not individually. The Bank further acknowledges and agrees that it shall look solely to the property of the applicable Fund for the performance of any obligation or liability of a Trust hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21.2 *Obligations of Trusts and Funds Not Joint*. For the avoidance of doubt, each Trust listed on Appendix A hereto is acknowledged to have separately executed this Agreement on behalf of itself and its Funds and this Agreement shall be deemed to be a separate agreement with respect to each Trust. Under no circumstances, and notwithstanding anything in this Agreement to the contrary, shall any one Trust or its Funds be liable for the obligations, actions or omissions of any other Trust or its Funds under this Agreement.

[Signature page follows.]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in their names and on their behalf by and through their duly authorized officers, as of the latest date set forth below.

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| | |
|:---|:---|
| **PUTNAM ETF TRUST** | **PUTNAM ETF TRUST** |
| **ON BEHALF OF EACH OF ITS SERIES LISTED ON APPENDIX A** | **ON BEHALF OF EACH OF ITS SERIES LISTED ON APPENDIX A** |
| By: | /s/ Jonathan Horwitz |
|  | Name: Jonathan Horwitz |
|  | Title: Executive VP |
|  | Date: 7/2/2025 |
| **THE BANK OF NEW YORK MELLON** | **THE BANK OF NEW YORK MELLON** |
| By: | /s/ Danielle Adamson |
|  | Name: Danielle Adamson |
|  | Title: Director |
|  | Date: 7/16/2025 |

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**<u>APPENDIX A</u>**

**<u>Trust and Funds</u>**

**PUTNAM ETF TRUST** 

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| |
|:---|
|  Putnam Focused Large Cap Value ETF |
| Putnam ESG Core Bond ETF |
| Putnam Sustainable Leaders ETF |
| Putnam Sustainable Future ETF |
| Putnam PanAgora ESG International Equity ETF |
| Putnam BDC Income ETF |
| Putnam ESG High Yield ETF |
| Putnam ESG Ultra Short ETF |
| Putnam Focused Large Cap Growth ETF |
| Putnam PanAgora ESG Emerging Markets Equity ETF |
| Putnam Emerging Markets ex-China ETF |
| Putnam BioRevolution ETF |

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**<u>SCHEDULE A</u>**

**<u>Books And Records To Be Maintained By The Bank</u>**

Source Documents requesting Creations and Redemptions

Correspondence/AP Inquiries

Reconciliations, bank statements, copies of canceled checks, cash proofs

Daily/Monthly reconciliation of outstanding Shares between a Trust and DTC

Dividend Records

Year-end Statements and Tax Forms

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**<u>EXHIBIT A</u>**

**AUTHORIZED PARTICIPANT AGREEMENT** 

This Authorized Participant Agreement (this "**Agreement**") is entered into by and between ________________ (the "**Participant**") and **Franklin Distributors, LLC** (the "**Distributor**"), principal underwriter of each trust listed on Annex A (the "**Trust**") and its separate series (each, a "**Fund**" and collectively, the "**Funds**"). Capitalized terms used herein and not otherwise defined have the meaning assigned to them in <u>Section</u> <u>14</u> of this Agreement.

WHEREAS, the Trust is registered with the Securities and Exchange Commission under the Investment Company Act of 1940, as amended (the "**1940 Act**"), as an open-end management investment company;

WHEREAS, the Trust offers shares of the Funds, each constituting individual investment portfolios that relate solely to the assets specifically allocated to such portfolios;

WHEREAS, each Fund is listed for trading on one or more U.S. national securities exchanges or associations and operates as an "**Exchange Traded Fund**" or "**ETF**";

WHEREAS, the Distributor serves as the principal underwriter of the Trust acting on an agency basis in connection with the sale and distribution of shares of each Fund of the Trust ("**Shares**");

WHEREAS, The Bank of New York Mellon acts as the transfer agent for the Trust (the "**Transfer Agent**");

WHEREAS, the Shares of each Fund offered by the Trust (now or in the future) may be directly purchased from or redeemed to the Trust at a price based on the NAV per Share (subject to applicable Law and the terms hereof) only by or through an entity that has entered into an Authorized Participant Agreement with the Distributor; and

WHEREAS the Distributor and the Participant intend that the Trust shall be a third party beneficiary of this Agreement and shall receive the benefits contemplated by this Agreement.

NOW THEREFORE, the parties hereto, intending to be legally bound and in consideration of the premises and of the mutual agreements contained herein, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, agree as follows:

**1.**  **<u>ORDERS FOR PURCHASE AND REDEMPTION GENERALLY</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.  ***<u>Participant Status</u>*** . In connection with each Order to purchase or redeem Shares directly
with the Trust at their NAV, the Participant shall be deemed to repeat and affirm each of the covenants, representations and warranties made by Participant made in <u>Section</u> <u>6</u> hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.  ***<u>Creation Units</u>*** . Shares of a Fund may only be purchased or redeemed by a Participant
directly from the Trust, through the Distributor, in aggregations constituting a Creation Unit **.** The number of Shares of a Fund constituting a Creation Unit will be stated in the Prospectus of the Trust relating to that Fund.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.  ***<u>Authority to Transact</u>*** . The Participant is authorized to purchase and redeem Creation Units
of the Funds, subject to applicable Law and the terms hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.  ***<u>Funds May Have Different APs</u>*** . The Participant acknowledges and agrees that one or more
other participants may be granted the right to purchase or redeem Shares of a particular Fund and that the Funds for which Participant serves as a participant may be different than the Funds for which other participants serve as participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.  ***<u>Procedures for Orders</u>*** . The procedures for placing and execution of Purchase Requests and
Redemption Orders are described in the Prospectus for each Fund and in the Participant Supplement. All Orders shall be placed and executed in accordance with the terms and procedures set forth in the Prospectus and the Participant Supplement. Orders
received in proper form in accordance with such terms and procedures shall be processed at the NAV per Share of the relevant Fund next determined after such Order is received in proper form, as determined by the Distributor in its sole discretion.
The Participant acknowledges and agrees that the Funds may determine their NAV per Share at different times and certain Funds may establish procedures regarding the time that Orders are placed by the Participant. The Participant agrees to comply
with any and all requirements stated in the Prospectus and in the Participant Supplement to the extent applicable to it. The Trust and the Distributor reserve the right to revise or augment the procedures relating to the manner of purchasing or
redeeming Creation Units at any time. The Distributor will make commercially reasonable efforts to provide notice to the Participant of any changes to the Participant Supplement with respect to the placement of Orders. The Participant agrees to
comply with such procedures as they may be revised or augmented from time to time. Revised or augmented procedures shall not apply retroactively to Orders submitted prior to such time the Distributor has sent notice of such change in procedure,
unless required by applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f.  ***<u>Consent to Recording</u>*** . It is contemplated that the phone lines, websites or other
electronic portals used by the Distributor, the Trust, the Transfer Agent, the Participant or their Affiliated Persons with respect to any Orders may be recorded, and the Parties hereby consent to the recording of all calls and electronic
transactions in respect of Orders with any of those Parties and by the Transfer Agent. The Parties agree that either Party and the Transfer Agent may use such recordings in connection with any dispute or proceeding relating to this Agreement. In the
event that the Distributor, the Trust, the Participant or their Affiliated Persons become legally compelled to disclose to any third party any such recordings, such disclosing Party agrees to provide each recorded Party with reasonable advance
written notice identifying the recordings to be so disclosed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g.  ***<u>Irrevocability</u>*** . All Orders are irrevocable and considered final when placed by a
Participant. Accordingly, the Participant acknowledges and agrees that it may not be possible to cancel or modify an Order once the Participant has placed it, and the Participant agrees to exercise caution before placing all Orders. Any attempt the
Participant makes to revise or cancel an Order may be deemed a request to place a new Order that may modify or cancel the previous Order, at the sole discretion of the Trust. The Participant shall be responsible for any and all reasonable expenses
and costs incurred by the Trust in connection with any modified or cancelled Order. It is acknowledged and agreed that the Trust, and the Distributor on behalf of the Trust, has the absolute right to reject any Purchase Request or Redemption Order
(to the extent permitted by Law and the Prospectus) transmitted to it by the Distributor. It is further acknowledged and agreed that the Transfer Agent may reject any Purchase Request or Redemption Order not received in

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the form designated by the Trust or the Distributor. The Distributor shall notify the Participant as soon as reasonably practicable of any such rejection of an Order. It is acknowledged and agreed that notice may not be reasonably practicable until after the time the Distributor stops accepting Orders for that day. The Distributor or the Transfer Agent, as applicable, will promptly return to the Participant upon rejection of an Order to purchase or redeem Shares all consideration, including Shares and any Cash Amount (in the case of a Redemption Order), Deposit Instruments and/or cash (if applicable) and the Cash Amount (in the case of a Purchase Request) tendered by the Participant in connection with such Order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h.  ***<u>Prospectus and Trade Confirmation Delivery</u>*** . The Participant consents to the delivery of
the Prospectus, trade confirmations, annual or semi-annual or other periodic reports regarding the Funds, shareholder information and notices and other information regarding the Funds ()"**Fund Information**") electronically. The
Participant agrees to maintain a valid email address, software applicable for reading such documents in "PDF" format (or other equivalent format that the Funds may use from time to time) and continuous internet access for purposes of
receiving the Fund Information and further agrees to promptly notify the Distributor if its email address for this purpose changes. The Participant may, at any time, request reasonable quantities of paper copies of the Fund Information and any
supplements or amendments thereto or recirculation thereof, and the Distributor agrees to provide them promptly to the Participant. Participant shall deliver, or cause to be delivered, a copy of the Prospectus to shareholders as required by
applicable Law.

**2.**  **<u>EXECUTION OF PURCHASE REQUESTS</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.  ***<u>Portfolio Deposit</u>*** . To effect the purchase of a Creation Unit of a Fund, the Participant
agrees to deliver to the Trust, on behalf of the Fund, the Deposit Instruments or cash, in circumstances where the Trust determines to require an all-cash creation process, plus any applicable Cash Amount. The
Participant understands that a Creation Unit will not be issued until the requisite number of Deposit Instruments and the Cash Component or, if applicable, cash in the amount required by the Trust for a cash creation, as well as applicable
transaction fees, are transferred to the Trust on or before the Contractual Settlement Date for the Order, in accordance with the terms of the Prospectus and the Participant Supplement. The Participant agrees that any Cash Component and any Cash
Amount payable to the Fund will be made available to the Trust, on behalf of the Fund, in immediately available same day funds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.  ***<u>Cash in Lieu</u>*** . The Trust may, in its sole discretion (as limited by its ETF Exemptive
Order), permit or require the substitution of an amount of cash to be added to any Cash Amount to replace any Deposit Instrument ("cash in lieu").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.  ***<u>Delivery of Collateral or Portfolio Deposit</u>*** . As described in the Prospectus and the
Participant Supplement from time to time, in the event that the basket of Deposit Instruments to be delivered by the Participant in connection with any Purchase Request are missing some of the required Deposit Instruments on the Contractual
Settlement Date for such Purchase Request, the Distributor, the Trust and the Transfer Agent may agree not to treat such Purchase Order as a failed trade or a failed settlement provided that the Participant, on or prior to the close of business on
the Contractual Settlement Date, in anticipation of delivery of all or a portion of the requisite Deposit Instruments, delivers to the Trust, in accordance with the delivery instructions provided by the Distributor, cash collateral, free of all
liens other than that in favor of the Trust, in an amount not less than

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105% of the market value of the missing Deposit Instruments. The Trust may, in its discretion, require additional cash collateral to be posted if, in the sole discretion of the Trust, the Deposit Instruments to be delivered warrant an increased collateral ratio or the existing collateral is insufficient to protect the Fund from market or other risks relating to the undelivered instrument. Such cash collateral shall be marked-to-the-market daily so that the amount posted is never less than 105% (or such higher percentage as determined by the Trust) of the market value of the missing Deposit Instruments until the earlier of the acquisition of such Deposit Instruments by the Trust (a "**buy-in**") or delivery of the missing Deposit Instruments by the Participant. The Fund may at anytime effect a buy-in with respect to the missing Deposit Instruments and use such cash collateral to purchase the missing Deposit Instruments without further consultation with the Participant, and the Participant shall be responsible for any shortfall experienced by the Trust in effecting such buy-in as well as related transaction expenses. The Participant shall be responsible for any and all expenses and costs incurred by the Trust, including all Cash Amounts and/or Cash Components, in connection with Purchase Requests by such Participant or any Participant Client or other person submitting a Purchase Request through Participant. The Participant understands and agrees that in the event collateral or the Portfolio Deposit are not fully transferred to the Trust by the time specified, a Purchase Request may be cancelled by the Trust and the Participant will be solely responsible for any and all expenses and costs incurred by the applicable Fund or the Distributor related to the cancelled Purchase Request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.  ***<u>Rejection of Purchase Requests</u>*** . The Trust or the Distributor may reject any order to
purchase Creation Units for any reason, including if an order to purchase Shares is not submitted in proper form, and the Transfer Agent may reject an order not received in the form designated by the Trust or the Distributor. In addition, a Fund
expects to reject a purchase request transmitted to it by the Distributor if: (a) the Participant or Participant Client or group of Participants or Participant Clients, upon obtaining the Creation Units of Shares of a Fund, would own eighty
percent (80%) or more of the outstanding Shares of such Fund; (b) the acceptance of the Deposit Instruments would have certain adverse tax consequences, such as causing the Fund to no longer to meet regulated investment company status under the
Code for federal tax purposes; (c) the acceptance of the Deposit Instruments would, in the opinion of the Fund, be unlawful, as in the case of a purchaser who was banned from trading in securities; (d) the acceptance of the Deposit
Instruments would otherwise, in the discretion of the Fund, or its investment adviser or sub-adviser, have an adverse effect on the Fund or on the rights of the Fund's beneficial owners; or
(e) there exist circumstances outside the control of the Fund that make it impossible to process purchases of Creation Units of Shares for all practical purposes. The Participant acknowledges that the Trust or the Distributor on behalf of the
Trust reserve the right to suspend sales of Shares in accordance with the terms of the Prospectus and applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.  ***<u>Title to Securities; Restricted Shares</u>*** . The Participant represents on behalf of itself and
any Participant Client and any other person for which it acts that upon delivery of a portfolio of Deposit Instruments to the Custodian and/or the relevant subcustodian for the benefit of the Trust in accordance with the terms of the Prospectus, the
Trust will acquire good, marketable and unencumbered title to such securities or instruments, free and clear of any and all liens, restrictions, hypothecations, charges, duties imposed on the transfer of assets and encumbrances and not subject to
any adverse claims, including, without limitation, any restriction upon the sale or transfer of such securities or instruments imposed by (a) any agreement or arrangement entered into by the Participant or any Participant Client, or
(b) any provision of the 1933 Act, and any regulations thereunder

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(except that (I) securities of issuers other than U.S. issuers shall not be required to have been registered under the 1933 Act if exempt from such registration and (II) securities of U.S. issuers shall not be required to have been registered under the 1933 Act if (1) exempt from such registration or (2) eligible for sale without registration pursuant to Rule 144A under the 1933 Act and such security is included by a Fund as a Deposit Instrument (a **"Rule 144A Security**")), or of the applicable laws or regulations of any other applicable jurisdiction and (c) any such securities being "restricted securities" as such term is used in Rule 144(a)(3)(i) promulgated under the 1933 Act, in the hands of the Participant immediately prior to any such delivery. This representation excludes restriction due to the status of the Trust, any of the Funds or the Funds' investment adviser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f.  ***<u>Corporate Actions</u>*** . With respect to any Purchase Request, the Trust, on behalf of each
applicable Fund, shall return to the Participant or the Participant Client any dividend, distribution, interest or other corporate action paid to the Trust in respect of any Deposit Instrument that is transferred to the Trust that, based on the
valuation of such Deposit Instrument on the Business Day on which the Trust receives and accepts the Purchase Request in proper form, should have been paid to the Participant or the Participant Client in accordance with the terms of the instrument
or corporate action. Likewise, the Participant acknowledges and agrees to return to the Trust any dividend, distribution, interest or other corporate action paid to the Participant or any Participant Client in respect of any Deposit Instrument that
is transferred to the Trust that, based on the valuation of such Deposit Instrument on the Business Day on which the Trust receives and accepts the Purchase Request in proper form, should have been paid to the Trust. The Trust is entitled to reduce
the amount of money or other proceeds due to the Participant or Participant Client that, based on the valuation of such Deposit Instrument at the time of transfer, should be paid to the Trust, in accordance with the terms of the instrument or
corporate action. If the Trust so reduces the amount of money or other proceeds due to the Participant or the Participant Client, the Participant is entitled, in turn, to retain such dividend, distribution, interest or other corporation action.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g.  ***<u>Ownership of Deposit Securities</u>*** . Notwithstanding anything to the contrary contained
herein, and subject to the provisions of paragraph c. of this <u>Section</u> <u>2</u>, for the purposes of the laws of the State of New York, the Participant agrees that this Agreement is a contract for the sale of the Deposit
Instruments *in praesenti*, and that ownership of, and all attendant rights to and benefits of, the Deposit Instruments shall be vested in the Trust as of the Business Day on which the Trust receives and accepts the related Purchase Request in
proper form and in accordance with the foregoing terms and procedures.

**3.**  **<u>EXECUTION OF REDEMPTION ORDERS</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.  ***<u>Creation Units</u>*** . To effect the redemption of a Creation Unit of a Fund, the Participant
agrees to deliver to the Trust, the requisite number of Shares comprising the number of Creation Units being redeemed plus any applicable Cash Amount and/or Cash Component. Proceeds of a redemption of a Creation Unit shall consist of Redemption
Instruments and/or any applicable Cash Amount, less any applicable Cash Component. As described in the Prospectus and the Participant Supplement, in the event that some or all of the Shares comprising a Creation Unit to be delivered by the
Participant in connection with any Redemption Order are missing on the Contractual Settlement date for such redemption Order, the Distributor, the Trust and the Transfer Agent may agree not to treat such redemption Order as a failed trade or a
failed settlement provided that the Participant, on or prior to the close of business on the Contractual Settlement Date, for the benefit of a

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Fund in anticipation of delivery of all or a portion of the Creation Unit, delivers to the Trust, in accordance with the delivery instructions provided by the Distributor, cash collateral, free of all liens other than that in favor of the Trust, in an amount not less than 105% (or such higher percentage as determined by the Trust in its sole discretion) of the market value of the missing Shares. The Trust may require additional cash collateral to be posted if, in the sole discretion of the Trust, the existing collateral is insufficient to protect the Fund from market or other risks relating to the undelivered Shares. Such cash collateral shall be marked-to-the-market daily so that the amount posted is never less than 105% (or such higher percentage as determined by the Trust in its sole discretion) of the market value of the missing Shares until the earlier of a buy-in by the Trust or delivery of the missing Shares by the Participant. The Fund may at anytime effect a buy-in with respect to the missing Shares and use such cash collateral to purchase Shares without further consultation with Participant, and the Participant shall be responsible for any shortfall experienced by the Trust in effecting such buy-in as well as related transaction expenses. The Participant shall be responsible for any and all expenses and costs incurred by the Trust, including all Cash Components, in connection with any Redemption Orders by such Participant or any Participant Client or other person submitting a Redemption Order through Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.  ***<u>Cash in Lieu</u>*** . The Trust may, in its sole discretion (as limited by its ETF Exemptive
Order), permit or require the substitution of an amount of cash to be added to any Cash Amount to replace any Redemption Instrument ("cash in lieu").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.  ***<u>Delivery of Shares</u>*** . The Participant understands and agrees that in the event Shares are
not transferred to the Trust (or the Custodian for the benefit of the Trust) by the time specified, a Redemption Order may be cancelled by the Trust and the Participant will be solely responsible for all expenses and costs incurred by the Trust
and/or the Distributor related to a cancelled Order submitted by the Participant for itself, a Participant Client or any other person. The Distributor will provide notice to the Participant, as soon as reasonably practicable, of any such
cancellation of a Redemption Order submitted by the Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.  ***<u>Legal and Beneficial Ownership</u>*** . The Participant represents and warrants that it will not
attempt to place a Redemption Order for the purpose of redeeming any Creation Unit of Shares of any Fund unless it or the Participant Client, as the case may be, owns outright (within the meaning of Rule 200 of Regulation SHO) or has full legal
authority and legal right to tender for redemption the requisite number of Shares of the relevant Fund to be redeemed as a Creation Unit and to the entire proceeds of the redemption and that such Shares have not been sold short, loaned or pledged to
another party and are not the subject of a repurchase agreement, securities lending agreement or any other arrangement affecting the Participant's ability to tender the Shares for redemption and the Fund's ability to settle the
Redemption Order on the Contractual Settlement Date and to take legal or beneficial ownership of such Shares pursuant to the redemption. In the event that the Distributor and/or the Trust have reason to believe that the Participant does not have the
requisite number of Shares of the relevant Fund to be redeemed as a Creation Unit, the Distributor and/or the Trust may require the Participant to deliver or execute supporting documentation in order for the Redemption Order to be in proper form.
Failure to deliver or execute the requested supporting documentation may result in a Participant's Redemption Order being rejected as not in proper form.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.  ***<u>Corporate Actions</u>*** . With respect to any Redemption Order, the Participant acknowledges and
agrees to return to the Trust any dividend, distribution, interest or other corporate

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action paid to it or a Participant Client in respect of any Redemption Instrument that is transferred to the Participant or any Participant Client that, based on the valuation of such Redemption Instrument at the time of transfer, should have been paid to the Fund. It is acknowledged and agreed that the Trust is entitled to reduce the amount of money or other proceeds due to the Participant or any Participant Client by an amount equal to any dividend, distribution, interest or other corporate action to be paid to the Participant or to the Participant Client in respect of any Redemption Instrument that is transferred to the Participant or any Participant Client that, based on the valuation of such Redemption Instrument at the time of transfer, should be paid to the Fund. Likewise, the Trust, on behalf of the applicable Fund, shall to return to the Participant or any Participant Client any dividend, distribution, interest or other corporate action paid to it in respect of any Share that is transferred to the Trust, on behalf of the applicable Fund, that, based on the valuation of such Share at the time of transfer, should have been paid to the Participant or the Participant Client.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f.  ***<u>Cash Amount and Cash Component</u>*** . In situations where a Cash Amount and/or a Cash Component
will be applied to a Redemption Order, the Participant hereby agrees that it will make available or transfer cash in an amount equal to the Cash Amount and/or Cash Component, as applicable. Computation of this amount shall exclude any stamp tax or
duty, sales or use tax, recording tax, value added tax and other similar governmental charges, fees and expenses payable upon the transfer of beneficial ownership of the Redemption Instruments or the Shares (regardless of whether such stamp tax or
similar fee is imposed by law on the Fund so that such deduction reflects a reimbursement of the Fund). Payment of stamp tax or duties, transfer tax, sales or use tax, recording tax, value added tax and similar governmental charges, taxes, fees and
expenses payable upon transfer of beneficial ownership of the Redemption Instruments or the Shares shall be the sole responsibility of the Participant and not of the Trust and, to the extent that the Trust, the Distributor or their agents are
required by Law to pay any such tax or charge, the Participant agrees promptly to indemnify the Trust or the Distributor, as applicable, for any such payment, together with any applicable penalties, additions to tax or interest thereon. This
Section 3(f) shall survive termination of this Agreement. The Participant hereby agrees to ensure that the Cash Amount and/or Cash Component will be received by the Trust in immediately available same day funds on or before the Contractual
Settlement Date or such earlier time as may be designated by the Trust.

**4.**  **<u>BENEFICIAL OWNERSHIP LIMITATION</u>** 

The Participant represents, warrants and covenants to the Distributor, the Transfer Agent and the Trust that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. immediately after each acquisition of Shares by the Participant pursuant to this Agreement (based upon the
number of outstanding Shares of such Fund made publicly available by the Trust) either: (i) it does not hold for its account or for the account of any Beneficial Owner of Shares of the relevant Fund, including, without limitation, the account
of any Participant Client for which the Participant is acting in respect to such Redemption Order, eighty percent (80%) or more of the outstanding Shares of such relevant Fund or (ii) if it does hold for its account or the account of any
Beneficial Owner, eighty percent (80%) or more of the outstanding Shares of the relevant Fund, that such a circumstance would not result in the Fund acquiring a basis in the portfolio of Deposit Instruments transferred to the Fund with respect to a
Purchase Request in such Fund different from the fair market value of such Deposit Instruments on the date of such Purchase Request. This

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representation and warranty shall be deemed repeated with respect to each Order for one or more Creation Units of Shares of any Fund. The Trust and the Transfer Agent and Distributor shall have the right to require information from the Participant regarding Share ownership of each Fund, and to rely thereon to the extent necessary to make a determination regarding ownership of eighty percent (80%) or more of the currently outstanding Shares of any Fund by a Beneficial Owner or the ownership by such Participant or Participant Client in a circumstance that would not result in the Fund acquiring a basis in the Deposit Instruments that is different from the fair market value of such Deposit Instruments on the date of such Purchase Request as a condition to the acceptance of a deposit of Deposit Instruments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. immediately after each acquisition of a Rule 144A Security by the Participant pursuant to this Agreement, it or
any Beneficial Owner of the Rule 144A Security will be a "qualified institutional buyer" as defined in Rule 144A under the 1933 Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. it has established an anti-money laundering program ("AML Program") that, at a minimum,
(i) designates a compliance officer to administer and oversee the AML Program, (ii) provides ongoing employee training, (iii) includes an independent audit function to test the effectiveness of the AML Program, (iv) establishes
internal policies, procedures, and controls that are tailored to its particular business, (v) includes a customer identification program consistent with the rules under Section 326 of the USA Patriot Act, (vi) provides for the filing
of all necessary anti-money laundering reports including, but not limited to, currency transaction reports and suspicious activity reports, (vii) provides for screening all new and existing customers against reports and suspicious activity
reports, (viii) provides for screening all new and existing customers against the U.S. trade and economic sanctions programs administered by the U.S. Department of the Treasury's Office of Foreign Asset Control and against any other
government list that is or becomes required under the USA Patriot Act, and (ix) allows for appropriate regulators to examine its anti-money laundering books and records. The Participant agrees that, throughout the term of this Agreement, it
will maintain the AML Program in substantial conformity with the foregoing provisions as may be amended or supplemented by applicable U.S. federal regulations. The Participant also agrees to provide any required information about itself (including
the Participant's beneficial ownership) that may be reasonably requested by Distributor to fulfill Distributor's know-your-customer and customer identification obligations, Any change in the foregoing shall result in the automatic
termination of this Agreement, and Participant shall give prompt notice to the Distributor, Transfer Agent and the Trusts of such change.

**5.**  **<u>AUTHORIZED PERSONS</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.  ***<u>Phone Orders and Website Orders</u>*** . Except as otherwise provided herein, Orders shall be
placed by the Participant in accordance with the Prospectus and the procedures set out in the Participant Supplement, each as provided to the Participant and currently in effect. It is acknowledged and agreed that these procedures may be revised,
supplemented and updated from time to time and made available in the Prospectus and/or the Participant Supplement and provided to the Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.  ***<u>Certification</u>*** . Concurrently with the execution of this Agreement and as requested from
time to time by the Trust and/or the Distributor but no less frequently than annually, the Participant shall deliver to the Distributor and the Trust, with copies to the Transfer Agent, a certificate (the form of which is set out in <u>Annex B</u>)
signed by the Participant's Secretary or other duly authorized official setting out the names, titles, signatures, e-mail addresses

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and telephone and facsimile numbers of all Authorized Persons. Such certificate may be accepted and relied upon by the Distributor, the Transfer Agent and the Trust as conclusive evidence of the facts set forth therein and shall be considered to be in full force and effect until delivery to the Distributor and the Trust of a superseding or amended certificate or other notice in a form approved by the Trust bearing a subsequent date. It shall be the responsibility of the Participant to ensure that the Distributor has a current list of all Authorized Persons. Upon the termination or revocation of authority of an Authorized Person by the Participant, the Participant shall give prompt written notice of such fact to the Distributor and the Transfer Agent and such notice shall be effective upon receipt by the Distributor and the Transfer Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.  ***<u>PIN Numbers.</u>*** The Transfer Agent shall issue to each Authorized Person a unique personal
identification number ()"**PIN Number**") by which such Authorized Person and the Participant shall be identified and instructions issued by the Participant hereunder shall be authenticated. The PIN Number shall be kept confidential
and provided to Authorized Persons only. The Participant represents and warrants that it has (or will establish), and will maintain, safeguards and controls against the unauthorized access to and use of PIN Numbers and that such safeguards and
controls are commercially reasonable and not less than equivalent to those used by the Participant to safeguard information about its own business. If for some reason an Authorized Person's PIN Number is compromised, the Participant or such
Authorized Person shall contact the Transfer Agent immediately in order for a new PIN Number to be issued. The Participant may revoke the PIN Number at any time upon written notice to the Transfer Agent. Upon receipt of such written request, the
Transfer Agent shall promptly deactivate the PIN Number. If a Participant's PIN Number is changed, the new PIN Number will become effective on a date and time mutually agreed upon by the Participant and the Transfer Agent. Upon receipt of
notice of termination of the authority of an Authorized Person from the Participant, the Transfer Agent shall deactivate the PIN Number of such Authorized Person. The Distributor and Transfer Agent shall be entitled to assume that all instructions
issued using the Participant's PIN Number have been properly placed by an Authorized Person. The Participant will immediately notify the Trust and the Distributor of any actual, probable or reasonably suspected breach of security of its
systems and/or of any actual, probable or reasonably suspected unauthorized access to a PIN Number (each, a "**Security Breach**") by sending notice to NetworkOperationsSecurityCenter@franklintempleton.com. The Participant, at its
sole cost, shall: (i) promptly investigate, remedy and take any other action it or the Trust or the Distributor reasonably deems necessary regarding any Security Breach and any dispute, inquiry or claim that concerns the Security Breach; and
(ii) shall provide reasonable assurance to the Trust and the Distributor that such Security Breach will not recur. The Participant agrees that the Distributor, the Transfer Agent and the Trust shall not be liable for losses incurred by the
Participant as a result of unauthorized use of the Participant's PIN Number, unless the Participant shall have notified the Transfer Agent in writing a reasonable time prior thereto that such person is not an Authorized Person as provided
above and such notification has been received by the Transfer Agent. This limitation of liability shall survive termination of this Agreement.

**6.**  **<u>CERTAIN REPRESENTATIONS AND WARRANTIES OF PARTICIPANT AND/OR DISTRIBUTOR</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.  ***<u>Ability to Enter Into Agreement</u>*** . The Participant and Distributor hereby represents and
warrants that it (i) is duly organized, validly existing and in good standing under the laws of its state of organization, (ii) has the power and authority, and the legal right, to own its

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assets and to transact the business in which it is engaged, and (iii) has the power and authority, and the legal right, to execute, deliver and perform its obligations under this Agreement and has taken all necessary action required by its governing documents or other applicable requirements of Law to authorize the execution, delivery and performance of this Agreement. Each of the Participant and Distributor hereby represents and warrants that this Agreement, when executed and delivered by the Participant or the Distributor, as applicable, will constitute a legal, valid and binding obligation of it and be enforceable against it in accordance with the terms of the Agreement, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.  ***<u>Clearing Status</u>*** . The Participant hereby represents and warrants that with respect to all
Orders for the creation or redemption of Creation Units of any Fund, (i) it is a DTC Participant, (ii) it has the ability to transact through the CNS Clearing Process, and (iv) it has the ability to transact outside the CNS Clearing
Process through such processes designated by such Fund. The Participant represents, covenants and warrants that with respect to Purchase Orders or Redemption Orders of Creation Units of Shares of any Fund it has the ability to transact through the
Federal Reserve System. Any change in the foregoing status of the Participant shall automatically terminate this Agreement, and Authorized Participant shall give prompt written notice to the Distributor and the Transfer Agent of such change.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.  ***<u>Broker Dealer Status</u>*** . The Participant hereby covenants, represents and warrants that it is
(i) registered with the SEC as a broker-dealer under the 1934 Act and a member of FINRA, or exempt from, or it is otherwise not required to be licensed as, a broker-dealer or a member of FINRA; and (ii) registered, licensed or otherwise
qualified to act as a broker or dealer in the states or other jurisdictions where it conducts its activities or its otherwise exempt. The Participant agrees that it will maintain such registrations, qualifications, and membership in good standing
and in full force and effect throughout the term of this Agreement. The Participant further agrees to comply with all applicable Federal laws, the laws of the states or other jurisdictions concerned, and the rules and regulations promulgated
thereunder and with the Constitution, By-Laws and NASD/FINRA Conduct Rules of FINRA, to the extent such laws, rules and regulations relate to Participant's Orders, offers and sales and related
transactions in, and activities with respect to, the Shares, and that it will not offer or sell Shares of any Fund of the Trust in any state or jurisdiction where they may not lawfully be offered and/or sold.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.  ***<u>Foreign Status</u>*** . If the Participant is offering and selling Shares of any Fund of the Trust
in jurisdictions outside the several states, territories and possessions of the United States and is not otherwise required to be registered, qualified, or a member of FINRA as set forth in the preceding paragraph, the Participant nevertheless
agrees to observe the applicable Law of the jurisdiction in which such offer and/or sale is made, to comply with the full disclosure requirements of the 1933 Act and the regulations promulgated thereunder and to conduct its business in accordance
with the NASD/FINRA Conduct Rules to the extent the foregoing relates to the Participant's transactions in, and activities with respect to, the Shares. Notwithstanding anything to the contrary herein, the Participant represents, warrants and
covenants to the Distributor that Participant is an entity organized in the United States and all Orders will be placed within the United States.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.  ***<u>Potential Distributor Status</u>*** . The Participant understands and acknowledges that the method
by which Shares will be created and traded may raise certain issues under applicable securities laws, rules and regulations. For example, because new Creation Units may be issued and sold by the Trust on an ongoing basis, at any point a
"distribution", as such term is used in the 1933 Act, may occur. The Distributor and the Trust hereby caution Participant that some activities on its part, depending on the circumstances, may result in its being deemed a
participant in a distribution in a manner which could render it a statutory underwriter and subject it to the prospectus delivery and liability provisions of the 1933 Act. The Participant also understands and acknowledges that dealers who are not
"underwriters" but are effecting transactions in Shares, whether or not participating in the distribution of Shares, are generally required to deliver a Prospectus. For the avoidance of doubt, the Participant does not admit to being an
underwriter of the Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f.  ***Third-Party Platforms*** . The Participant understands, acknowledges and agrees that Orders in Shares
may be effected through an electronic or other platform maintained by an affiliate of the Transfer Agent or another third-party. The Participant hereby covenants, represents and warrants that it shall abide by the terms and conditions for the use of
any such platforms, including, without limitation, any limitations placed on the Participant's use of such platforms and any confidentiality provision or security procedure associated with such platforms, in each case in accordance with the
terms of the agreement governing such platforms.

**7.**  **<u>ROLE OF PARTICIPANT</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.  ***<u>Independent Contractor</u>*** . The Participant each acknowledges and agrees that for all purposes
of this Agreement, the Participant will be deemed to be an independent contractor, and will have no authority to act as agent for the Trust or the Distributor in any matter or in any respect. Nothing in this Agreement shall obligate the Participant
to create or redeem one or more Creation Units of Shares or to offer or sell the Shares. The Participant agrees to make itself and its employees available upon request during normal business hours to consult with a Fund or the Distributor or their
designees concerning the performance of the Participant's responsibilities under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.  ***<u>Maintenance of Records</u>*** . The Participant agrees to maintain records of all Orders relating
to Shares made by or through it as required by applicable Law, and to furnish copies of such records to the Trust or the Distributor upon the reasonable request of the Trust or the Distributor.

**8.**  **<u>MARKETING MATERIALS AND REPRESENTATIONS</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. The Participant represents, warrants and agrees that it will not make any representations concerning Shares
other than those consistent with in the Trust's then current Prospectus or in any promotional materials or sales literature furnished to the Participant by the Trust or the Distributor. The Participant agrees not to furnish or cause to be
furnished to any person or display or publish any information or materials relating to Shares (including, without limitation, promotional materials and sales literature, advertisements, press releases, announcements, statements, posters, signs or
other similar materials), except such information and materials as may be furnished to the Participant by the Trust or the Distributor and such other information and materials as may be approved in writing by the Trust or the Distributor. The
Participant understands that the Trust and the Funds will not

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be advertised or marketed as open-end investment companies (i.e., as mutual funds) which offer redeemable securities, and that any advertising materials will prominently disclose that the individual Shares are not redeemable units of beneficial interest in the Trust. In addition, the Participant understands that any advertising material that addresses redemptions of Shares, including the Prospectus, will disclose that Shares are not individually redeemable and that the owners of Shares may acquire Shares and tender Shares for redemption to the Trust in Creation Unit aggregations only.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Notwithstanding anything to the contrary in this Agreement, the Participant and its affiliates may prepare and
circulate in the regular course of their businesses research reports, sales commentary, market color and other similar material that includes information, opinions or recommendations relating to the Shares, provided that such materials comply with
applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Participant agrees that, so long as this Agreement remains in effect, it may be identified or named as an
"Authorized Participant," or any similar designation, in any materials relating to any Fund, the Trust or as may be necessary to meet applicable legal requirements.

**9.**  **<u>IRREVOCABLE PROXY</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.  ***<u>Appointment of Irrevocable Proxy</u>*** . The Participant, from time to time, may be a beneficial
owner and/or an owner of record of Shares (within the meaning of Rule 200 of Regulation SHO). To the extent that it is a beneficial owner of Shares (within the meaning of Rule 200 of Regulation SHO), the Participant does hereby irrevocably appoint
the Distributor as its true and lawful attorney and proxy with full authorization and power to vote (or abstain from voting) the Participant's beneficially owned Shares of each Fund, which the Participant is or may be entitled to vote at any
meeting of a Fund held after the date this Agreement is executed, whether annual or special and whether or not a postponed or adjourned meeting, or, if applicable, to give written or electronic consent with respect thereto, and to otherwise
represent the Participant at the meeting with all powers possessed by the Participant if personally present at the meeting. The Participant hereby revokes all prior proxies for such meetings, affirms that this proxy is given in connection with the
Agreement and that this proxy is coupled with an interest and is valid and irrevocable during the term set forth in paragraph c of this Section 9, and ratifies and confirms all that the proxy may lawfully do or cause to be done by virtue
hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.  ***<u>Powers of Attorney and Proxy</u>*** . The Distributor, as attorney and proxy for the Participant
under this paragraph: (i) is hereby given full power of substitution and revocation, (ii) may act through such agents, nominees or substitute attorneys and proxies as it may from time to time appoint, and (iii) may provide voting
instructions to such agents, nominees or substitute attorneys and proxies in any lawful manner deemed appropriate by it, including in writing, by telephone, telex, facsimile, electronically (including through the Internet) or otherwise. The powers
of the Distributor as attorney and proxy under this paragraph shall include (without limiting its general powers hereunder) the power to receive and waive any notice of any meeting on behalf of the Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.  ***<u>Term of Power of Attorney and Proxy</u>*** . The appointment of the Distributor as attorney and
proxy shall be deemed renewed each time Participant acquires Shares as a beneficial owner. The Distributor shall serve as an irrevocable attorney and proxy for the Participant under this Section for so long (and only so long) as this Agreement
remains in effect. This irrevocable proxy automatically shall be assigned to any successor distributor for the Trust

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with respect to any Fund if the Distributor ceases to act as Distributor to that Fund. The Distributor may assign this irrevocable proxy to a successor distributor of the Trust with written notice to the Participant. In the event applicable law prevents the assignment of the irrevocable power of attorney and proxy, or deems such power of attorney and proxy to expire due to the passage of time, the Participant hereby agrees to execute and deliver such additional documentation as may be necessary to cause the Distributor, or a successor distributor (as applicable), to serve as its attorney and proxy for the purposes discussed in this Agreement.

**10.**  **<u>INDEMNIFICATION; LIMITATION OF LIABILITY</u>** 

This Section shall survive the termination of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. The Participant hereby agrees to indemnify and hold harmless the Distributor, the Trust, the Transfer Agent,
their respective subsidiaries, Affiliated Persons, directors, officers, employees and agents, and each person, if any, who controls such persons within the meaning of Section 15 of the 1933 Act (each a "**Participant-Indemnified Party**") from and against any loss, liability, cost and expense (including reasonable attorneys' fees, collectively "**Losses**") incurred by such Participant-Indemnified Party as a result of (i) any breach by the
Participant of any provision of this Agreement that relates to the Participant; (ii) any failure on the part of the Participant to perform any of its obligations set forth in this Agreement; (iii) any failure by the Participant to comply
with applicable Law; (iv) representations by the Participant, its employees or its agents or other representatives or any Participant Client about the Shares, any participant Indemnified Party or the Trust that is not included in the
Trust's then-current Prospectus; (v) any untrue statement or alleged untrue statement of a material fact contained in any research reports or marketing material prepared by Participant regarding the Funds or any of them or any alleged
omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading to the extent that such statement or omission relates to the Shares or any Participant Indemnified Party unless, in
either case, such representation, statements or omission was made or included by the Participant at the written direction of the Trust or the Distributor or taken verbatim (in context and without omission) from the Prospectus or marketing material
prepared by the Distributor or the Trust; and (vi) actions of such Participant-Indemnified Party in reliance upon any instructions issued to the Trust, the Distributor or the Transfer Agent reasonably believed by the Trust, the Distributor
and/or the Transfer Agent to be genuine and to have been given by the Participant or an Authorized Person. The foregoing shall not apply to any Losses incurred by such Participant-Indemnified Party arising out of the Participant-Indemnified
Party's own fraud, bad faith, willful misconduct, gross negligence or reckless disregard of its duties hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. The Distributor hereby agrees to indemnify and hold harmless the Participant, and each of its respective
subsidiaries, Affiliated Persons, directors, officers, employees and agents, and each person, if any, who controls such persons within the meaning of Section 15 of the 1933 Act (each a "Distributor-Indemnified Party") from and
against any Losses incurred by such Distributor-Indemnified Party as a result of (i) any breach by the Distributor of any provision of this Agreement that relates to the Distributor; (ii) any failure on the part of the Distributor to
perform any of its obligations set forth in this Agreement; (iii) any failure by the Distributor to comply with applicable Law; (iv) any untrue statement or alleged untrue statement of a material fact contained in the Prospectus or any
alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading other

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than any statement made in reliance upon information provided to the Distributor, the Trust or any other person on behalf of the Trust or the Fund by the Participant in writing and (v) actions of such Distributor-Indemnified Party in reliance upon any representations reasonably believed by the Participant to be genuine and to have been given by the Distributor. The foregoing shall not apply to any Losses incurred by such Distributor-Indemnified Party arising out of the Distributor-Indemnified Party's own fraud, bad faith, willful misconduct, gross negligence or reckless disregard of its duties hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Notwithstanding anything to the contrary in this Agreement, the Distributor, the Transfer Agent and the Fund
will not indemnify the Participant for any violations of the federal or state securities laws (or other applicable Law) committed by the Participant through its failure to deliver a Prospectus in connection with the offer or sale of Shares and for
any oral or written representation or warranty by Participant that is not contained in the Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Notwithstanding anything to the contrary in this Agreement, none of the Participant, the Distributor and the
Transfer Agent shall be liable to each other for any Losses under this Agreement arising out of (i) mistakes or errors in data provided in connection with Orders except for data provided by the other or (ii) mistakes or errors by or out of
interruptions or delays of communications with a service provider to the Trust.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. Each of the Participant, the Distributor and the Transfer Agent undertakes to perform such duties and only such
duties as are expressly set forth herein, or expressly incorporated herein by reference, and no implied covenants or obligations shall be read into this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. In the absence of fraud, bad faith, gross negligence, or reckless or willful misconduct on its part, neither
the Distributor nor the Transfer Agent, whether acting directly or through agents or attorneys, shall be liable for any action taken, suffered or omitted or for any error of judgment made by any of them in the performance of their duties hereunder.
Neither the Distributor, the Participant, nor the Transfer Agent shall be liable for any error of judgment made in good faith unless the party exercising such good faith shall have been grossly negligence in ascertaining the pertinent facts
necessary to make such judgment. In no event shall any Party be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if such Parties have been advised of the likelihood
of such loss or damage and regardless of the form of action. In no event shall any Party be liable for the acts or omission of the CNS Clearing Process, DTC, NSCC, the Federal Reserve System, the Custodian or any securities depository, clearing
corporation, exchange or communications service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. No party shall be responsible or liable for any failure or delay in the performance of its obligations or those
of its agents under this Agreement arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including without limitation: acts of God; earthquakes; extreme weather events, including blizzards, hurricanes,
tornados and thunder storms, fires; floods; wards; civil or military disturbances; blackouts; terrorism; breakdowns in communications systems; riots; loss or malfunction of utilities or computer or internet services; labor disputes; acts of civil or
military authority or governmental actions.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h. Neither the Transfer Agent nor the Distributor shall be required to advance, expend or risk its own funds or
otherwise incur or become exposed to financial liability in the performance of its duties hereunder.

**11.**  **<u>THIRD PARTY BENEFICIARIES</u>** 

The Distributor and the Participant acknowledge and agree that this Agreement is entered into for, among other things, the benefit of the Trust and intend that the Trust shall be a third-party beneficiary of this Agreement and be entitled to enforce all of the terms hereof, including, without limitation, the rights granted in its favor and in favor of the Distributor, the Transfer Agent or the Custodian under this Agreement.

**12.**  **<u>NOTICES</u>** 

All notices, communications, requests and demands to or upon the respective Parties hereto to be effective shall be in writing (and if sent by mail, sent via certified or registered mail, return receipt requested) or be by confirmed facsimile transmission or email with confirmed delivery status notification. All notices shall be deemed to have been duly given or made when delivered by hand, or three Business Days after being deposited in the mail, postage prepaid, or, in the case of facsimile transmission or email transmission, when sent, addressed as follows or at such other address as such party may designate in writing (a change in a party's contact information below in accordance with this Section shall not be deemed as an amendment to this Agreement). Notwithstanding the above, delivery of any amendment or supplement to the Prospectus or Participant Supplement shall be made via email to the Authorized Persons listed on <u>Annex B</u>.

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| | |
|:---|:---|
| DISTRIBUTOR: | PARTICIPANT: |
| **Attn: Intermediary Client Onboarding**<br> **100 First Stamford Place**<br> **5<sup>th</sup> Floor**<br> **Stamford, CT 06902**<br>**Telephone: (203) 703-6000**<br> **Facsimile: (877) 563-3019**<br> **Email: Contracts-us_ico@franklintempleton.com** | Attn:<br>Telephone:<br> Facsimile:<br> Email: |
| TRANSFER AGENT: | IF TO THE TRUST: |
| **Attn: ETF Services Group**<br> **101 Barclay Street**<br> **New York, NY 10286** | **Attn: Navid J. Tofigh**<br> **Senior Associate General Counsel**<br> **One Franklin Parkway**<br> **San Mateo, CA 94403-1906**<br>**Telephone: (650) 312-3492**<br> **Facsimile:** |

---

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**Email: navid.tofigh@franklintempleton.com**

**13.**  **<u>COMMENCEMENT OF TRADING</u>** 

The Participant may not submit an Order pursuant to this Agreement until five Business Days after effectiveness of this Agreement or a date agreed upon by the Distributor and the Participant; provided, however, that this Agreement shall be immediately effective if the execution of this Agreement supersedes another Authorized Participant Agreement among the Parties that is currently in effect.

**14.**  **<u>DEFINITIONS</u>** 

The capitalized terms used in this Agreement are defined as follows. Any capitalized terms used herein that are not defined shall have the meaning set forth in the Prospectus or in the Participant Supplement. The terms defined below shall include the plural or singular thereof as the context may require.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. "1933 Act" means the Securities Act of 1933, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. "1934 Act" means the Securities Exchange Act of 1934, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. "1940 Act" has the meaning provided in the recitals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. "Affiliated Person" shall have the meaning given to it by Section 2(a)(3) of the 1940 Act,
subject to such exemptions as may be granted by the Securities and Exchange Commission by any rule, regulation or order applicable to the Trust or its investment adviser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. "Agreement" has the meaning set forth in the preamble hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. "Authorized Person" means a person that is authorized to give instructions relating to any activity
contemplated by this Agreement or any other notice, request or instruction on behalf of the Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. "Beneficial Owner" shall have the meaning given to it by Rule 16a-1(a)(2) of the 1934 Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h. "Business Day" shall mean each day the exchange on which a Fund is listed is open for regular
trading.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. "Cash Amount" means, (1) in the case of a purchase of a Creation Unit, an amount of cash equal
to the difference between the total aggregate value of the Deposit Instruments and the NAV of the Creation Unit; and (2) in the case of a redemption of a Creation Unit, an amount of cash equal to the difference between the NAV of the Creation
Unit being redeemed and the total aggregate value of the Redemption Instruments delivered by the Fund in consideration for the Creation Unit, in such case including any cash in lieu amounts.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j. "Cash Component" means an amount of cash sufficient to pay any applicable transaction fee,
redemption fee and any additional fixed and/or variable charges applicable to purchase or redemption transactions effected fully or partially in cash (when, in the sole discretion of the Trust, cash transactions are available or specified), in each
case, as disclosed in the Prospectus for the applicable Fund. Without limiting the generality of the foregoing, the term "Cash Component" shall also include any fees, costs and expenses (including, without limitation, reasonable
attorneys fees) incurred by a Fund in taking possession of, liquidation of or other use of any collateral posted in lieu of delivery of Deposit Instruments or Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;k. "CNS Clearing Process" means the applicable clearing process specified for any Fund, including but
not limited to those effected through the facilities of DTC, the CNS System, Euroclear, the Custodian, local subcustodians and/or any subset or combination thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;l. "CNS System" means the Continuous Net Settlement clearing processes of NSCC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;m. "Code" means the Internal Revenue Code of 1986, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;n. "Contractual Settlement Date" means the date as specified in the Prospectus or in the Participant
Supplement upon which delivery of Deposit Instruments, Shares and/or any Cash Amount and/or Cash Component, as applicable, must be made by the Participant to the Trust.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o. "Creation Unit" means an aggregation of a specified number of Shares as stated in the Prospectus
for the applicable Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;p. "Custodian" means The Bank of New York Mellon or such other custodian as the Trust may specify from
time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;q. "Deposit Instruments" means an in-kind deposit of a
designated portfolio of equity or fixed-income securities or other financial instruments as determined from time to time in the sole discretion of the Trust in accordance with the terms of the Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;r. "Distributor" has the meaning set out in the preamble hereto and shall apply to any other
distributor as the Trust may specify from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;s. "DTC" means The Depository Trust Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;t. "DTC Participant" means a person that is eligible and authorized to participate in the DTC direct
registration system.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;u. "ETF Exemptive Order" means the exemptive order issued by the SEC to the Trust (Investment Company
Act Release No. 31920), as the same may be amended from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;v. "Federal Reserve System" means the central banking system of the United States.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;w. "FINRA" means the Financial Industry Regulatory Authority, Inc.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;x. "Fund" has the meaning set out in the recitals and may include Funds that are formed and offered
after the date of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;y. "Fund Information" has the meaning set out in <u>Section</u> <u>1(h)</u> hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;z. "Law" means any rule, regulation, statute, order, ordinance, guideline, pronouncement, code or
other legally enforceable requirement, including common law, state and federal laws or securities laws and laws of foreign jurisdictions and, with respect to a Party, the rules and regulations of any SRO of which such Party or, to the extent
relevant to the performance of a Party's obligations under this Agreement, such Party's Affiliated Person, is a member or securities market on which Shares are listed.

aa. "Losses" has the meaning set out in <u>Section</u> <u>10(a)</u> hereto.

bb. "NAV" means net asset value.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;cc. "NSCC" means the National Securities Clearing Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;dd. "Orders" means either Purchase Requests or Redemption Orders or both, as the context requires.

ee. "Participant" has the meaning set out in the preamble hereto.

ff. "Participant Client" means any party on whose behalf the Participant acts in connection with an Order (whether a customer or otherwise).

gg. "Participating Party" means a Participant who is a member of the NSCC and a participant in the CNS System of NSCC.

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| | |
|:---|:---|
| hh. | "Participant Supplement" means the handbook and other supplemental materials that accompany, or are made available in connection with, this Agreement that provide revised or additional procedures with respect to a Participant's transactions with the Distributor and the Trust, as they may be amended from time to time by the Distributor or the Trust and made available to the Participant. The Participant Supplement is incorporated by reference into this Agreement and hereby made a part hereof. It is acknowledged and agreed that the Participant Supplement may be made available solely in an electronic format accessible via the internet. Any changes to the Participant Supplement made available to the Participant subsequent to the date of this Agreement shall also be deemed incorporated by reference herein.  |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. "Party" means the Distributor, the Participant and the third-party beneficiaries named in <u>Section</u> <u>11</u> hereto.

jj. "Pin Number" has the meaning set out in <u>Section</u> <u>5(c)</u> hereto.

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| | |
|:---|:---|
| kk. | "Portfolio Deposit" means the requisite Deposit Instruments and, if applicable, a Cash Amount.  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ll. "Prospectus" means each Fund's current prospectus, any prospectus supplement and the
statement of additional information included in the Trust's effective registration statement,

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as supplemented and/or amended from time to time, the contents of which are hereby incorporated into this Agreement by reference.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;mm. "Purchase Request" means an irrevocable order to purchase Shares by a Participant.

nn. "Redemption Instruments" means in-kind redemption proceeds of a designated portfolio of securities or other financial instruments as determined from time to time in the sole discretion of the Trust.

oo. "Redemption Order" means a request to redeem Shares by a Participant.

pp. "Rule 144A Security" has the meaning set forth in <u>Section</u> <u>2(e)</u> hereof.

qq. "SEC" means the U.S. Securities and Exchange Commission.

rr. "Security Breach" has the meaning set out in <u>Section</u> <u>5(c)</u> hereof.

ss. "Shares" has the meaning set out in the recitals and shall refer to (i) shares of beneficial interest for a Trust organized as a business, statutory or similar trust or as a partnership and (ii) shares of common stock for a Trust organized as a corporation.

tt. "SRO" means any self-regulatory organization as such term is defined under the 1934 Act.

uu. "Transfer Agent" means The Bank of New York Mellon and shall apply to any other transfer agent as the Trust may specify from time to time upon notice to the Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vv. "Trust" means the registered investment company or companies listed on <u>Annex A</u>, as such <u>Annex A</u> may be revised or supplemented from time to time by the Distributor and provided to the Participant. To the extent more than one Trust is listed on <u>Annex A</u> hereto, this Agreement shall apply to each Trust individually
and all references to the "Trust" shall include each Trust as if such Trust was specifically named in the body of this Agreement.

**15.**  **<u>INCORPORATION BY REFERENCE AND PROSPECTUS CONTROLLING</u>** 

The Participant acknowledges receipt of the Participant Supplement, represents that it has reviewed such document and understands the terms thereof, and further acknowledges that the information and procedures contained therein are incorporated herein by reference. The Participant also acknowledges and agrees that the Prospectus for each Fund may contain, among other things, procedures relating to the creation and redemption of Shares. The Participant hereby acknowledges and agrees that it has the responsibility of reviewing and obtaining familiarity with the Prospectus for the Shares of each Fund in which it transacts. In the event that any information contained in the Participant Supplement is in conflict with the information disclosed in the Prospectus for a Fund, the information contained in the Prospectus shall be controlling.

**16.**  **<u>EFFECTIVENESS, TERMINATION, AMENDMENT AND ASSIGNMENT</u>** 

This Agreement shall become effective in this form upon delivery to and execution by the Distributor. This Agreement may be terminated immediately pursuant to any automatic

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termination provision included herein or at any time by any Party upon sixty days prior written notice to the other Parties and may be terminated earlier by a Party at any time in the event of a breach by the other Party of any provision of this Agreement or the procedures described or incorporated herein. This Agreement supersedes any prior such agreement of the same subject matter between or among the Parties, including without limitation all prior authorized participant agreements with respect to the Trust. This Agreement may not be amended except by a writing signed by all the Parties hereto. For the avoidance of doubt, it is acknowledged and agreed that changes in procedures stated in the Prospectus or Participant Supplement shall not be considered an amendment to this Agreement and shall be effective immediately. This Agreement may not be assigned by the Participant, except in connection with the sale of all or substantially all of the Participant's business to another party. In the event that another principal underwriter replaces the Distributor as the principal underwriter of the Trust, this Agreement will be deemed to be assigned by the Distributor to such replacement principal underwriter upon notice to, but without any further consent of, the Participant or the Distributor.

**17.**  **<u>ACKNOWLEDGEMENT</u>** 

The Participant acknowledges receipt of the Prospectus and the Participant Supplement, represents it has reviewed the Prospectus and the Participant Supplement, understands the terms thereof, and it further acknowledges that the procedures contained in the Prospectus and in the Participant Supplement pertaining to the creation and redemption of Shares are incorporated herein by reference.

**18.**  **<u>GOVERNING LAW</u>** 

This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York. THE PARTIES IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE OR UNITED STATES FEDERAL COURT SITTING IN NEW YORK CITY AND THE APPELATE COURTS THEREFROM OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.

**19.**  **<u>DELEGATION</u>** 

It is acknowledged and agreed by the Parties that any action contemplated to be taken by the Trust (including on behalf of itself or any Fund), in the sole discretion of the Trust, may be taken or accomplished by a designee of the Trust.

**20.**  **<u>COUNTERPARTS; SEVERANCE</u>** 

This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. If any provision of this Agreement is held by any court or any act, regulation, rule or decision of any other governmental or supranational body or authority or regulatory or self-regulatory organization to be invalid, illegal or unenforceable for any reason, it shall be invalid, illegal or unenforceable only to the extent so held and shall not affect the validity, legality or enforceability of the other provisions of this Agreement so long as this Agreement, as so

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modified, continues to express, without material change, the original intentional of the parties as to the subject matter of this Agreement and the deletion of such portion of this Agreement will not substantially impair the respect benefits, obligations or expectations of the Parties to this Agreement.

------

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered as of the day and year written below.

DATED: ____________________

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| |
|:---|
| **[Authorized Participant]** |
| By:________________________________ |
| Name: |
| Title: |

---

**FRANKLIN DISTRIBUTORS, LLC** 

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| |
|:---|
| By :__________________________________ |
| Name: |
| Title: |

---

---

| |
|:---|
| **Accepted by:** |
| **THE BANK OF NEW YORK MELLON, as Transfer Agent** |
| By :__________________________________ |
| Name: |
| Title: |

---

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**Annex A** 

**<u>LEGG MASON ETF INVESTMENT TRUST</u>**

ClearBridge Dividend Strategy ESG ETF

ClearBridge Large Cap Growth ESG ETF

Royce Quant Small-Cap Quality Value ETF

Western Asset Short Duration Income ETF

Western Asset Total Return ETF

Franklin International Low Volatility High Dividend Index ETF

Franklin U.S. Low Volatility High Dividend Index ETF

**<u>FRANKLIN ETF TRUST</u>**

Franklin Short Duration U.S. Government ETF

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| | |
|:---|:---|
| **FRANKLIN TEMPLETON ETF TRUST** | |
| **ETF Name** | <br>**BNYM**<br> **Transition Date** |
| ClearBridge Sustainable Infrastructure ETF | July 21, 2025 |
| Franklin Exponential Data ETF | July 21, 2025 |
| Franklin Focused Growth ETF | July 21, 2025 |
| Franklin Income Equity Focus ETF | July 21, 2025 |
| Franklin Income Focus ETF | July 21, 2025 |
| Franklin Intelligent Machines ETF | July 21, 2025 |
| Franklin International Aggregate Bond ETF | July 21, 2025 |
| Franklin Systematic Style Premia ETF | July 21, 2025 |
| Franklin U.S. Core Bond ETF | July 21, 2025 |
| Franklin U.S. Treasury Bond ETF | July 21, 2025 |
| BrandywineGLOBAL – Dynamic US Large Cap Value ETF | August 25, 2025 |
| BrandywineGLOBAL – US Fixed Income ETF | August 25, 2025 |
| Franklin Disruptive Commerce ETF | August 25, 2025 |
| Franklin Dynamic Municipal Bond ETF | August 25, 2025 |
| Franklin Emerging Market Core Dividend Tilt Index ETF | August 25, 2025 |
| Franklin FTSE Asia ex Japan ETF | August 25, 2025 |
| Franklin FTSE Australia ETF | August 25, 2025 |
| Franklin FTSE Brazil ETF | August 25, 2025 |
| Franklin FTSE Canada ETF | August 25, 2025 |
| Franklin FTSE China ETF | August 25, 2025 |
| Franklin FTSE Europe ETF | August 25, 2025 |
| Franklin FTSE Eurozone ETF | August 25, 2025 |
| Franklin FTSE Germany ETF | August 25, 2025 |
| Franklin FTSE India ETF | August 25, 2025 |
| Franklin FTSE Japan ETF | August 25, 2025 |
| Franklin FTSE Japan Hedged ETF | August 25, 2025 |
| Franklin FTSE Latin America ETF | August 25, 2025 |
| Franklin FTSE Mexico ETF | August 25, 2025 |

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| | |
|:---|:---|
| Franklin FTSE Russia ETF | August 25, 2025 |
| Franklin FTSE Saudi Arabia ETF | August 25, 2025 |
| Franklin FTSE South Korea ETF | August 25, 2025 |
| Franklin FTSE Switzerland ETF | August 25, 2025 |
| Franklin FTSE Taiwan ETF | August 25, 2025 |
| Franklin FTSE United Kingdom ETF | August 25, 2025 |
| Franklin Genomic Advancements ETF | August 25, 2025 |
| Franklin High Yield Corporate ETF | August 25, 2025 |
| Franklin International Core Dividend Tilt Index ETF | August 25, 2025 |
| Franklin International Dividend Multiplier Index ETF | August 25, 2025 |
| Franklin Investment Grade Corporate ETF | August 25, 2025 |
| Franklin Municipal Green Bond ETF | August 25, 2025 |
| Franklin Senior Loan ETF | August 25, 2025 |
| Franklin U.S. Core Dividend Tilt Index ETF | August 25, 2025 |
| Franklin U.S. Dividend Multiplier Index ETF | August 25, 2025 |
| Franklin U.S. Equity Index ETF | August 25, 2025 |
| Franklin U.S. Large Cap Multifactor Index ETF | August 25, 2025 |
| Franklin U.S. Mid Cap Multifactor Index ETF | August 25, 2025 |
| Franklin U.S. Small Cap Multifactor Index ETF | August 25, 2025 |
| Franklin Ultra Short Bond ETF | August 25, 2025 |
| Martin Currie Sustainable International Equity ETF | August 25, 2025 |
| Western Asset Bond ETF | August 25, 2025 |

---

**PUTNAM ETF TRUST** 

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| | |
|:---|:---|
| Putnam PanAgora ESG Emerging Markets Equity ETF | 7/21/2025 |
| Putnam PanAgora ESG International Equity ETF | 7/21/2025 |
| Putnam ESG High Yield ETF | 7/21/2025 |
| Putnam ESG Core Bond ETF | 7/21/2025 |
| Putnam ESG Ultra Short ETF | 7/21/2025 |
| Putnam BioRevolution<sup>TM</sup> ETF | 7/21/2025 |
| Putnam Emerging Markets ex-China ETF | 7/21/2025 |
| Putnam BDC Income ETF | 7/21/2025 |
| Putnam Focused Large Cap Growth ETF | 7/21/2025 |
| Putnam Focused Large Cap Value ETF | 7/21/2025 |
| Putnam Sustainable Leaders ETF | 7/21/2025 |
| Putnam Sustainable Future ETF | 7/21/2025 |

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------

**ANNEX B** 

**CERTIFICATE DESIGNATING AUTHORIZED PERSONS** 

The following employees of **__________** (each, an "Authorized Person") are authorized, in accordance with the Authorized Participant Agreement between **__________** and Franklin Distributors LLC, as such Agreement may be amended from time to time, to act as agent of **__________** to submit purchase request and redemption orders ("Orders") on behalf of **__________** and to give instructions or any other notice or request on behalf of **__________** with respect to such Orders or any other activity contemplated by the Authorized Participant Agreement.

**<u>SECTION A</u>** - List of Current Authorized Persons

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| | |
|:---|:---|
| Name: | Name: |
| Title: | Title: |
| E-mail: | E-mail: |
| Telephone: | Telephone: |
| Fax: | Fax: |
| Signature: | Signature: |
| Name: | Name: |
| Title: | Title: |
| E-mail: | E-mail: |
| Telephone: | Telephone: |
| Fax: | Fax: |
| Signature: | Signature: |
| Name: | Name: |
| Title: | Title: |
| E-mail: | E-mail: |
| Telephone: | Telephone: |
| Fax: | Fax: |
| Signature: | Signature: |
| Name: | Name: |
| Title: | Title: |
| E-mail: | E-mail: |
| Telephone: | Telephone: |

---

------

---

| | |
|:---|:---|
| Fax: | Fax: |
| Signature: | Signature: |
| Name: | Name: |
| Title: | Title: |
| E-mail: | E-mail: |
| Telephone: | Telephone: |
| Fax: | Fax: |
| Signature: | Signature: |

---

------

**<u>SECTION B</u>** - List of Changes to Authorized Persons

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| | |
|:---|:---|
| The following persons who were not designated as Authorized Persons on Participant's previous Certificate have been added as Authorized Persons: | The following persons who were included on the Participant's previous Certificate are no longer Authorized Persons: |
| 1. | 1. |
| 2. | 2. |
| 3. | 3. |
| 4. | 4. |

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The undersigned, does hereby certify that the persons listed in Section A above have been duly authorized to act as Authorized Persons pursuant to the Authorized Participant Agreement.

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| |
|:---|
| By: _________________________ |
| Name: |
| Title: |
| Date: |

---

## Ex-99.(H)(2)

![LOGO](g842776dsp320.jpg)

**<u>EXECUTION</u>**

**<u>SUB-ADMINISTRATION AND ACCOUNTING AGREEMENT</u>**

THIS AGREEMENT is made as of July 24, 2025 by and between Franklin Templeton Services, LLC ("<u>Customer</u>") and The Bank of New York Mellon, a New York corporation authorized to engage in a banking business ("<u>BNY</u>").

<u>W</u> <u>I</u> <u>T</u> <u>N</u> <u>E</u> <u>S</u> <u>S</u> <u>E</u> <u>T</u> <u>H</u> :

WHEREAS, the Customer has entered into a subcontract for fund administrative services with the Investment Advisor(s) (as defined below) to each Trust listed Exhibit A hereto (each a "Fund", and collectively the "Funds" as applicable) concerning the provision of administrative services with respect to each Fund and the portfolios identified on Exhibit A hereto (each, a "<u>Series</u>"; and

WHEREAS, to assist the Customer in providing services to the Funds, the Customer desires to retain BNY to provide the services described herein and BNY is willing to provide such services all as more fully set forth below.

NOW, THEREFORE, in consideration of the mutual promises and agreements contained herein, the parties intending to be legally bound hereby agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Definitions.</u>

Whenever used in this Agreement, unless the context otherwise requires, the following words shall have the meanings set forth below:

"<u>1933 Act</u>" means the Securities Act of 1933, as amended.

"<u>1934 Act</u>" means the Securities Exchange Act of 1934, as amended.

"<u>1940 Act</u>" means the Investment Company Act of 1940, as amended.

"<u>Applicable Authorities</u>" means all laws applicable to a Fund, its Series or BNY, including without limitation the Securities Laws and all other applicable rules, regulations, official interpretations and guidance of a regulatory entity or agency having jurisdiction over a Fund or BNY.

"<u>Authorized Person</u>" shall mean each person, whether or not an officer or an employee of a Fund, duly authorized by the Board to execute this Agreement and to give Instructions on behalf

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of such Fund as set forth in Exhibit B hereto and each Authorized Person's scope of authority may be limited by setting forth such limitation in a written document signed by both parties hereto. From time to time Customer may deliver a new Exhibit B to add or delete any person and BNY shall be entitled to rely on the last Exhibit B actually received by BNY.

"<u>BNY Affiliate</u>" shall mean any office, branch, or subsidiary of The Bank of New York Mellon Corporation.

"<u>Board</u>" shall mean a Fund's board of directors, board of trustees, general partner or manager, as applicable.

"<u>CEA</u>" shall mean Commodity Exchange Act.

"<u>Confidential Information</u>" shall have the meaning given in Section 21 of this Agreement.

"<u>Documents</u>" shall mean such other documents, including but not limited to, Board resolutions, including resolutions of the Fund's Board authorizing the execution, delivery and performance of this Agreement by the Fund, and opinions of outside counsel, as BNY may reasonably request from time to time, in connection with its provision of services under this Agreement.

"<u>Instructions</u>" shall mean Oral Instructions or written communications actually received by BNY by S.W.I.F.T., tested telex, letter, facsimile transmission, or other method or system specified by BNY as available for use in connection with the services hereunder, from an Authorized Person or person believed in good faith to be an Authorized Person.

"<u>Investment Advisor</u>" shall mean the entity identified by the Funds to BNY as the entity having investment responsibility with respect to the Funds.

"<u>Net Asset Value</u>" shall mean the per share value of a Series, calculated in the manner described in the Funds' Offering Materials.

"<u>Offering Materials</u>" shall mean the Series' currently effective prospectus, statement of additional information, and most recently filed registration statement with the SEC relating to shares of the Series.

"<u>Organizational Documents</u>" shall mean certified copies of a Fund's agreement and declaration of trust, articles of incorporation, certificate of incorporation, certificate of formation

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or organization, certificate of limited partnership, bylaws, limited partnership agreement, memorandum of association, limited liability company agreement, operating agreement, confidential offering memorandum, material contracts, Offering Materials, all SEC exemptive orders issued to a Fund, required filings or similar documents of formation or organization, as applicable, delivered to and received by BNY.

"<u>Oral Instructions</u>" shall mean oral instructions received by BNY under permissible circumstances specified by BNY, in its sole discretion, as being from an Authorized Person or person believed in good faith by BNY to be an Authorized Person.

"<u>SEC</u>" means the United States Securities and Exchange Commission.

"<u>Securities Laws</u>" means the 1933 Act, the 1934 Act and the 1940 Act.

"<u>Shares</u>" means the shares of beneficial interest of any series or class of the Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Appointment.</u>

Customer hereby appoints BNY to act as its sub-administrator for each Fund during the term of this Agreement and to perform the sub-administrative services described herein. BNY hereby accepts such appointment and agrees to perform the duties hereinafter set forth. BNY undertakes to comply with all applicable requirements of Applicable Authorities having jurisdiction over the services provided to the Fund and Series and over BNY with respect to the duties to be performed by BNY hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Representations and Warranties.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Customer hereby represents and warrants to BNY, which representations and warranties shall be deemed to be continuing, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I. It is duly organized and existing under the laws of the jurisdiction of its organization, with full power to carry on its business as now conducted, to enter into this Agreement and to perform its obligations hereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;II. This Agreement has been duly authorized, executed and delivered by Customer and constitutes a valid and legally binding obligation of the Customer, enforceable in accordance with its terms;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;III. The Fund's Investment Advisor is in good standing and qualified to do business in each jurisdiction in which the nature or conduct of its business requires such qualification.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IV. It is conducting its business in compliance with all applicable laws and regulations, both state and federal, has made and will continue to make all necessary filings including tax filings and has obtained all regulatory licenses, approvals and consents necessary to carry on its business as now conducted; there is no statute, regulation, rule, order or judgment binding on it and no provision of its Organizational Documents, nor of any mortgage, indenture, credit agreement or other contract binding on it or affecting its property which would prohibit its execution or performance of this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;V. The method of valuation of securities and the method of computing the Net Asset Value shall be as set forth in the Offering Materials of the Funds. To the extent the performance of any services described in Schedule I attached hereto by BNY in accordance with the then effective Offering Materials for the Fund would violate any applicable laws or regulations, the Customer shall reasonably promptly so notify BNY in writing and thereafter shall either furnish BNY with the appropriate values of securities, Net Asset Value or other computation, as the case may be, or, instruct BNY in writing to value securities and/or compute Net Asset Value or other computations in a manner the Customer specifies in writing, and either the furnishing of such values or the giving of such Instructions shall constitute a representation by the Customer that the same is consistent with all applicable laws and regulations and with the Fund's Offering Materials, all subject to confirmation by BNY as to its capacity to act in accordance with the foregoing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;VI. The terms of this Agreement, the fees and expenses associated with this Agreement and any benefits accruing to BNY or to the Investment Advisor to or sponsor of a Fund in connection with this Agreement, including but not limited to any fee waivers, conversion cost reimbursements, upfront payments, signing payments or periodic payments made or to be made by BNY to the Customer or such Investment Advisor or sponsor or any affiliate of the Customer relating to this Agreement have been fully disclosed to each Fund and its Board and that, if required by applicable law, such Board has approved or will approve the terms of this Agreement, any such fees and expenses and any such benefits;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;VII. Each person named on Exhibit B hereto is duly authorized by such Customer to be an Authorized Person hereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;VIII. It has implemented, and is acting in accordance with, procedures reasonably designed to ensure that it will disseminate to all market participants, other than Authorized Participants (as defined in its Prospectus and Statement of Additional Information), each calculation of Net Asset Value provided by BNY hereunder to Authorized Participants at the time BNY provides such calculation to Authorized Participants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IX. Without limiting the provisions of Section 21 herein, the Customer and each Fund shall treat as confidential the terms and conditions of this Agreement and shall not disclose nor authorize disclosure thereof to any other person, except (i) to its employees, regulators, examiners, internal and external accountants, auditors, and counsel, (ii) for a summary description of this Agreement in the Offering Materials with the prior written approval of BNY, (iii) to any other person when required by a court order or legal process, or (iv) whenever advised by its counsel that it would be liable for a failure to make such disclosure. The Customer and each Fund shall instruct its employees, regulators, examiners, internal and external accountants, auditors, and counsel who may be afforded access to such information of the Customer's and each Fund's obligations of confidentiality hereunder; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;X. The Customer shall promptly notify BNY in writing of any and all legal proceedings or securities investigations filed or commenced against the Customer, any Fund, the Investment Advisor or the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) BNY hereby represents and warrants to the Customer, which representations and warranties shall be deemed to be continuing, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I. It is duly organized and existing under the laws of the jurisdiction of its organization, with full power to carry on its business as now conducted, to enter into this Agreement and to perform its obligations hereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;II. This Agreement has been duly authorized, executed and delivered by BNY in accordance with all requisite action and constitutes a valid and legally binding obligation of BNY, enforceable with its terms;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;III. It is conducting its business in material compliance with laws and regulations applicable to the services provided hereunder, both state and federal, has made and will continue to make all necessary filings including tax filings and has obtained all regulatory licenses, approvals and consents necessary to carry on its business as now conducted; there is no statute, regulation, rule, order or judgment binding on it and no provision of its charter or by-laws, nor of any mortgage, indenture, credit agreement or other contract binding on it or affecting its property that would prohibit its execution or performance of this Agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IV. It has and will continue to have access to the necessary facilities, equipment and personnel to perform its duties and obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Delivery of Documents.</u>

The Customer shall promptly provide, deliver, or cause to be delivered from time to time, to BNY each Fund's Organizational Documents, a copy of any and all SEC exemptive orders issued to the Fund, and Documents and other materials used in the distribution of Shares and all amendments thereto as may be necessary for BNY to perform its duties hereunder. BNY shall not be deemed to have notice of any information (other than information supplied by BNY) contained in such Organizational Documents, Documents or other materials until they are actually received by BNY.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Duties and Obligations of BNY.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to the direction and control of the Customer and the provisions of this Agreement, BNY shall provide to Customer on behalf of each Fund the accounting and administrative services listed on Schedule I attached hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In performing hereunder, BNY shall provide, at its expense, office space, facilities, equipment and personnel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) BNY shall not provide any services relating to the management, investment advisory or sub-advisory functions of any Fund, distribution of Shares of any Fund, maintenance of any Fund's financial records, other than those records listed in Schedule I attached hereto, or other services normally performed by the Customer's or the Funds' respective counsel or independent auditors and the services provided by BNY do not constitute, nor shall they be construed as constituting, legal advice or the provision of legal services for or on behalf of the

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Customer, a Fund or any other person, and the Customer on behalf of each Fund acknowledges that BNY does not provide public accounting or auditing services or advice and will not be making any tax filings, or doing any tax reporting on its behalf, other than those specifically agreed to hereunder. The scope of services provided by BNY under this Agreement shall not be increased as a result of new or revised regulatory or other requirements that may become applicable with respect to Customer on behalf of the Fund, unless the parties hereto expressly agree in writing to any such increase in the scope of services. In the event that a new or revised regulatory requirement becomes applicable to a Fund that requires a substantial change to the services provided under this Agreement or a substantial increase in the scope of the services provided hereunder, and if BNY intends to offer such a service to the Customer or other similarly situated clients, then BNY shall provide a commercially reasonable proposal to the Customer in writing setting forth the terms applicable to such change or increase in scope and BNY and the Customer shall negotiate in good faith with respect to each such change or increase.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Customer shall cause each of its, and each Fund's, officers, advisors, sponsor, distributor, legal counsel, independent accountants, current administrator (if any), transfer agent, and any other service provider to cooperate with BNY and to provide BNY, upon reasonable request, with such information, Documents and advice relating to Customer or a Fund as is within the possession or knowledge of such persons, and which in the opinion of BNY, is necessary in order to enable BNY to perform its duties hereunder. In connection with its duties hereunder, BNY shall not be responsible for, under any duty to inquire into, or be deemed to make any assurances with respect to the accuracy, validity or propriety of any information, Documents or advice provided to BNY by any of the aforementioned persons. BNY shall not be liable for any loss, damage or expense resulting from or arising out of the failure of the Customer to cause any information, Documents or advice to be provided to BNY as provided herein and shall be held harmless by the Customer when acting in good faith reliance upon such information, Documents or advice relating to such Fund. All fees or costs charged by such persons shall be borne by the appropriate Fund. In the event that any services performed by BNY hereunder rely, in whole or in part, upon information obtained from a third party service utilized or subscribed to by BNY which BNY in its reasonable judgment deems reliable, BNY shall not have any responsibility or liability for, under any duty to inquire into, or deemed to make any assurances with respect to, the accuracy or completeness of such information.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Nothing in this Agreement shall limit or restrict BNY, any BNY Affiliate or any officer or employee thereof from acting for or with any third parties, and providing services similar or identical to some or all of the services provided hereunder; provided, however, that notwithstanding this paragraph BNY may not use the Customer's, the Funds' or any of their affiliates' proprietary information received by BNY hereunder in providing such services to such other third parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Customer shall furnish BNY with, and BNY will act in accordance with, any and all Instructions, explanations, information, specifications and documentation deemed necessary by BNY in the performance of its duties hereunder, including, without limitation, the amounts or written formula for calculating the amounts and times of accrual of Fund liabilities and expenses, and the value of any securities lending related collateral investment account(s). BNY shall not be required to include as Fund liabilities and expenses, nor as a reduction of Net Asset Value, any accrual for any federal, state, or foreign income taxes unless the Customer shall have specified to BNY in Instructions the precise amount of the same to be included in liabilities and expenses or used to reduce Net Asset Value. For purposes of calculating the market value of a Series investment, BNY shall utilize prices and/or bid, offer, mean or market values (collectively, "<u>Prices</u>") obtained from sources designated by the Series' Investment Advisor in a written Instruction, which such Instruction may be superseded by delivery of subsequent written Instructions from time to time (collectively, the "<u>Authorized Price Sources</u>"). If such Prices and/or bid, offer, mean or market values are not available from Authorized Price Sources, BNY shall notify the Series' Investment Advisor in a timely manner and shall follow procedures that may be established from time to time between the parties hereto for the purposes of establishing the value of such Series' investment. At any time and from time to time, the Customer on behalf of a Fund may also furnish BNY with Prices of securities or other assets and instruct BNY in Instructions to use such information in its calculations hereunder. BNY shall not override valuations or Prices received from an Authorized Price Source without written Instructions from an Authorized Person and such Instruction shall provide BNY with the necessary valuation or Price to be utilized. BNY shall perform tolerance checks in accordance with BNY's internal practices and procedures and shall provide such further valuation services, including without limitation back-testing and stale price reviews, as shall be reasonably requested by the Customer or the Series' Investment Advisor from time to time, and shall make available to the Series'

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Investment Advisor from time to time such information or data about any Authorized Price Sources as may be reasonably requested by the Customer on behalf of a Fund or the Series' Investment Advisor and that is otherwise available to BNY. Notwithstanding the foregoing, BNY shall not under any circumstances be under a duty to independently price or value any of the Series' investments, including securities lending related cash collateral investments, itself or to confirm or validate any information or valuation provided by the Investment Advisor, an Authorized Price Source or any other pricing source (subject to the performance by BNY of the obligations described in the immediately preceding sentence), nor shall BNY have any responsibility to identify, in performing services similar to the services provided pursuant to this Agreement for others, different valuations of the same or other securities of the same issuers. In addition, in the event that any services performed by BNY hereunder rely, in whole or in part, upon information obtained from a third party service utilized or subscribed to by BNY which it, in its reasonable judgment, deems reliable, BNY shall not have any responsibility or be under any duty to inquire into, or be deemed to make any assurances with respect to, the accuracy or completeness of such information, except to the extent of any initial tolerance checks that may be agreed upon between the Customer and BNY from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) BNY shall commence and maintain utilization of, and subscriptions to, all securities pricing or similar service requested by the Customer, unless BNY reasonably determines that it is unable or cannot reasonably be expected to do so with respect to any particular pricing or similar service. BNY shall provide the Customer with as much advance notice as is reasonably possible prior to terminating its utilization of or subscription to any securities pricing or similar service. In no event shall BNY be required to determine, or have any obligations with respect to, whether a market price represents any fair or true value, nor to adjust any price to reflect any events or announcements, including, without limitation, those with respect to the issuer thereof, it being agreed that all such determinations and considerations shall be solely the Customer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) BNY shall provide information from the books and records of the Series to their respective independent public accountants, along with such other analyses and summaries relating to information maintained and produced by BNY in relation to its performance of the services as may be reasonably requested by the Customer or the Series' Investment Advisor and as may be mutually agreed to by the Customer and BNY.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) BNY may apply to an Authorized Person of the Customer for Instructions with respect to any matter arising in connection with BNY's performance hereunder for the Customer on behalf the Funds, and BNY shall not be liable for any action taken or omitted to be taken by it in good faith without negligence, bad faith, fraud, willful misconduct or reckless disregard of its duties hereunder in accordance with such Instructions. Such application for Instructions may, at the option of BNY, set forth in writing any action proposed to be taken or omitted to be taken by BNY with respect to its duties or obligations under this Agreement and the date on and/or after which such action shall be taken. BNY shall not be liable for any action taken or omitted to be taken in accordance with a proposal included in any such application on or after the date specified therein unless, prior to taking or omitting to take any such action, BNY has received Instructions from an Authorized Person in response to such application specifying the action to be taken or omitted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) BNY may consult with its own counsel at its own expense or with counsel to the Customer or appropriate Fund, in each case, at the Customer's expense, and shall be fully protected with respect to anything done or omitted by it provided that BNY acts in good faith consistent with the standard of care set forth herein in accordance with the advice or opinion of such counsel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Notwithstanding any other provision contained in this Agreement or Schedule I attached hereto, BNY shall have no duty or obligation with respect to, including, without limitation, any duty or obligation to determine, or advise or notify the Customer of: (i) the taxable nature of any distribution or amount received or deemed received by, or payable to, a Fund, (ii) the taxable nature or effect on a Fund or its shareholders of any corporate actions, class actions, tax reclaims, tax refunds or similar events, (iii) the taxable nature or taxable amount of any distribution or dividend paid, payable or deemed paid, by a Fund to its shareholders; or (iv) the effect under any federal, state, or foreign income tax laws of a Fund making or not making any distribution or dividend payment, or any election with respect thereto. Further, BNY is not responsible for the identification of securities requiring U.S. tax treatment that differs from treatment under U.S. generally accepted accounting principles. BNY is solely responsible for processing such securities, as identified by the Customer or its Authorized Persons, in accordance with U.S. tax laws and regulations.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) BNY shall have no duties or responsibilities whatsoever except such duties and responsibilities as are specifically set forth in this Agreement and Schedule I attached hereto, and no covenant or obligation shall be implied against BNY in connection with this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) Subject to the standard of care set forth in Section 9 and notwithstanding any other provision in this Agreement to the contrary, BNY, in performing the services required of it under the terms of this Agreement, shall be entitled to rely fully on the accuracy and validity of any and all Instructions, explanations, information, specifications, Documents and documentation furnished to it by the Customer or a Fund and shall have no duty or obligation to review the accuracy, validity or propriety of such Instructions, explanations, information, specifications, Documents or documentation, including, without limitation, evaluations of securities; the amounts or formula for calculating the amounts and times of accrual of Funds' or Series' liabilities and expenses; the amounts receivable and the amounts payable on the sale or purchase of securities; and amounts receivable or amounts payable for the sale or redemption of Fund Shares effected by or on behalf of a Fund. In the event BNY's computations hereunder rely, in whole or in part, upon information, including, without limitation, bid, offer or market values of securities or other assets, or accruals of interest or earnings thereon, from a pricing or similar service utilized, or subscribed to, by BNY which the Customer directs BNY to utilize, and which BNY in good faith and using its reasonable judgment deems reliable, BNY shall not be responsible for, under any duty to inquire into, or deemed to make any assurances with respect to, the accuracy or completeness of such information. Without limiting the generality of the foregoing, BNY shall not be required to inquire into any valuation of securities or other assets by Customer, a Fund or any third party described in this sub-section (m) even though BNY in performing services similar to the services provided pursuant to this Agreement for others may receive different valuations of the same or different securities of the same issuers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) BNY, in performing the services required of it under the terms of this Agreement, shall not be responsible for determining whether any interest accruable to a Fund is or will be actually paid, but will accrue such interest until otherwise instructed by the Customer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) Subject to each party's obligation to maintain a commercially reasonable disaster recovery plan and back-up system, neither BNY nor the Customer shall be responsible for damages (including without limitation damages caused by delays, failure, errors, interruption or

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loss of data) which occurring directly or indirectly by reason of circumstances beyond its reasonable control in the performance of its duties under this Agreement, including, without limitation, labor difficulties without BNY, mechanical breakdowns, flood or catastrophe, acts of God, failures of transportation, interruptions, loss, or malfunctions of utilities, action or inaction of civil or military authority, national emergencies, public enemy, war, terrorism, riot, sabotage, non-performance by a third party, failure of the mails, communications, computer (hardware or software) services, or functions or malfunctions of the internet, firewalls, encryption systems or security devices caused by any of the above. Nor shall BNY be responsible for delays or failures to supply the information or services specified in this Agreement where such delays or failures are caused by the failure of any person(s) other than BNY to supply any Instructions, explanations, information, specifications or documentation deemed necessary by BNY in the performance of its duties under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) In performing the services hereunder, BNY shall comply with the applicable provisions of each Fund's Offering Materials, including effective amendments thereto, pursuant to Instructions from the Customer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) BNY will furnish to the Customer no more than once in a 12 months period, a report in accordance with Statements on Standards for Attestation Engagements No. 18, which the Customer may disclose solely to its or a Fund's internal or external auditors that are subject to written confidentiality obligations to use reasonable care to safeguard the report and not to disclose the report to any third party or use the report for any purpose other than evaluating BNY's security controls, and such other information relating to BNY's policies and procedures as the parties may mutually agree upon.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) BNY shall maintain levels and types of insurance coverage including, without limitation, errors and omissions, fidelity bond and electronic data processing coverages, and such other insurance as BNY may deem appropriate, in each case in a commercially reasonable amount deemed by BNY to be sufficient to cover its potential liabilities under this Agreement, including without limitation cyberliability insurance coverage deemed by BNY to be appropriate to address damages arising from a security breach. BNY agrees to provide the Customer with summaries of its applicable insurance coverage and an updated summary of such coverages at the Customer's written request, but no more frequently than annually.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) BNY shall cooperate with each of the Customer's and the Funds' independent public accountants and shall provide such information, as may be reasonably requested by Customer from time to time, to such accountants for the expression of their opinion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) Upon the occurrence of any event relating to the services provided under this Agreement that causes or may cause any loss, damage or expense to the Customer, a Fund or Series, BNY (i) shall reasonably promptly notify the Customer of the occurrence of such event and (ii) shall use commercially reasonable efforts and take reasonable steps under the circumstances to attempt to mitigate the effects of such event and to avoid continuing harm to each of the Customer, Fund or Series. Upon the occurrence of any event that causes or may cause any loss, damage or expense to BNY, the Customer shall, or Customer shall cause a Fund or Series to, (i) reasonably promptly notify BNY of the occurrence of such event and (ii) use commercially reasonable efforts and take reasonable steps under the circumstances to attempt to mitigate the effects of such event and to avoid continuing harm to BNY.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) If Customer and/or a Fund seeks to have BNY provide Loan Administration Services (as defined in Schedule II attached hereto), the delivery of such Loan Administration Services shall be subject to the terms and conditions set forth in this Agreement and those included in Schedule II.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Allocation of Expenses.</u>

Except as otherwise provided herein, all customary or reasonable costs and expenses arising or incurred in connection with the performance of this Agreement shall be paid by the Customer on behalf of the appropriate Fund, including but not limited to, organizational costs and costs of maintaining corporate existence, taxes, interest, brokerage fees and commissions, insurance premiums, compensation and expenses of such Fund's trustees, directors, officers or employees, legal, accounting and audit expenses, management, advisory, sub-advisory, administration and shareholder servicing fees, charges of custodians, transfer and dividend disbursing agents, expenses (including clerical expenses) incident to the issuance, redemption or repurchase of Fund Shares or membership interests, as applicable, fees and expenses incident to the registration or qualification under the Securities Laws, state or other applicable Securities Laws of the Fund or its Shares or membership interests, as applicable, costs (including printing and mailing costs) of preparing and distributing Offering Materials, reports, notices and proxy material

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to such Fund's shareholders or members, as applicable, all expenses incidental to holding meetings of such Fund's trustees, directors and shareholders, and extraordinary expenses as may arise, including litigation affecting such Fund and legal obligations relating thereto for which the Fund may have to indemnify its trustees, directors, officers, managers, and/or members, as may be applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Portfolio Compliance Services.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If Schedule I contains a requirement for BNY to provide Customer with portfolio compliance services, such services shall be provided pursuant to the terms of this Section 7 (the "<u>Portfolio Compliance Services</u>"). The precise compliance review and testing services to be provided shall be as directed by the Customer and as mutually agreed between BNY and Customer, and the results of BNY's Portfolio Compliance Services shall be detailed in a portfolio compliance summary report (the "<u>Compliance Summary Report</u>") prepared on a periodic basis as mutually agreed. Each Compliance Summary Report shall be subject to review and approval by the Customer. BNY shall have no responsibility or obligation to provide Portfolio Compliance Services other that those services specifically listed in Schedule I.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Customer will examine each Compliance Summary Report delivered to it by BNY and notify BNY of any error, omission or discrepancy within ten (10) days of its receipt. The Customer agrees to notify BNY promptly in writing if it fails to receive any such Compliance Summary Report. The Customer further acknowledges that unless it notifies BNY of any error, omission or discrepancy within 10 days, such Compliance Summary Report shall be deemed final and shall not be reissued. In addition, if the Customer learns of any out-of-compliance condition before receiving a Compliance Summary Report reflecting such condition, the Customer will notify BNY of such condition within five (5) business days after discovery thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) While BNY will endeavor to identify out-of-compliance conditions, BNY does not and could not for the fees charged, make any guarantees, representations or warranties with respect to its ability to identify all such conditions. In the event of any errors or omissions in the performance of Portfolio Compliance Services, the Customer's sole and exclusive remedy and BNY's sole liability shall be limited to re-performance by BNY of the Portfolio Compliance

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Services affected and in connection therewith the correction of any error or omission, if practicable and the preparation of a corrected report, at no cost to the Customer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Rule 38a-1 and Regulatory Administration Services.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If Schedule I contains a requirement for BNY to provide the Customer with compliance support services related to Rule 38a-1 promulgated under the 1940 Act and/or Regulatory Administration services, such services shall be provided pursuant to the terms of this Section 8 (such services, collectively hereinafter referred to as the "<u>Regulatory Support Services</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding anything in this Agreement to the contrary, the Regulatory Support Services provided by BNY under this Agreement are administrative in nature and do not constitute, nor shall they be construed as constituting, legal advice or the provision of legal services for or on behalf of the Customer, a Fund or any other person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) All work product produced by BNY in connection with its provision of Regulatory Support Services under this Agreement is subject to review and approval by the Customer and by the Customer's and Fund's legal counsel. The Regulatory Support Services performed by BNY under this Agreement will be at the request and direction of the Customer and/or the Fund's chief compliance officer (the "<u>Fund's CCO</u>"), as applicable. BNY disclaims liability to the Customer and to Funds, and the Fund is solely responsible, for the selection, qualifications and performance of the Fund's CCO and the adequacy and effectiveness of the Fund's compliance program.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Standard of Care; Indemnification.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) BNY shall be obligated to exercise in the performance of its duties hereunder reasonable care, prudence and diligence that a professional fund accountant and administrator to management investment companies registered under the 1940 Act would exercise, to act in good faith and to use commercially reasonable efforts in performing services provided for under this Agreement (the "<u>Standard of Care</u>"), and shall not be liable for any damages arising out of its performance of or failure to perform its duties under this Agreement except to the extent that such damages arise out of BNY's willful misconduct, bad faith, negligence, fraud, reckless disregard of its duties hereunder or otherwise from a breach of this Agreement (including, without limitation, a breach of the Standard of Care). Without limiting the foregoing, BNY shall not be

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liable for any damages arising out of any matter with respect to which BNY is otherwise relieved of liability or entitled to be held harmless as provided elsewhere in this Agreement. In no event shall a party to this Agreement be liable for any special, indirect or consequential damages, or lost profits or loss of business, arising under or in connection with this Agreement, even if previously informed of the possibility of such damages and regardless of the form of action. For the avoidance of doubt, Net Asset Value error losses under the terms of a Fund's Net Asset Value error correction policy (as provided to BNY by the Customer) shall be deemed direct damages for purposes of this Agreement and not consequential damages under this Section 9(a).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Customer agrees to indemnify and hold harmless BNY and BNY Affiliates from all taxes, charges, assessments, claims, damages and liabilities (including, without limitation, liabilities arising under the Securities Laws and any state or foreign securities and blue sky laws, and amendments thereto), and costs and expenses, including without limitation reasonable attorneys' fees and reasonable disbursements (including, without limitation, those incurred in asserting any claim by BNY against the Customer arising from the obligations of the Customer or a Fund hereunder), arising from any action which BNY or a BNY Affiliate takes in accordance with the terms of this Agreement or any omission by BNY to act or any other matter with respect to which BNY is otherwise relieved of liability or entitled to be held harmless as provided elsewhere in this Agreement; provided that BNY and a BNY Affiliate shall not be indemnified against any liability (or any expenses incident to such liability) to the extent arising out of BNY's own, or a BNY Affiliate's or agent's (for whose actions BNY is responsible under this Agreement) willful misconduct, bad faith, negligence, fraud, reckless disregard, or breach of this Agreement (including, without limitation, a breach of the Standard of Care). Notwithstanding the foregoing, in no event shall Customer incur liability to BNY or BNY Affiliates if the Customer or a Fund is prevented, forbidden from or delayed in performing, or omits to perform, any act or thing which this Agreement provides shall be performed or omitted to be performed by the Customer or a Fund, by reason of factors described in Section 5(o) above; provided, however, that for the avoidance of doubt, BNY's failure to perform its obligations under this Agreement shall be excused to the extent that such failure to perform is caused by or results from the Customer's or a Fund's aforementioned failure to perform.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Subject to Section 9(a) above, BNY agrees to indemnify, defend and hold harmless the Customer from and against any and all costs, expenses, damages, liabilities and

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claims, and reasonable attorneys' and accountants' fees relating thereto (including, without limitation, those incurred in asserting any claim by the Customer against BNY) the recovery of which is not excluded by another provision of this Agreement ("<u>Losses</u>"), that may be imposed on, incurred by or asserted against the Customer, in each case, to the extent such Losses arise out of BNY's own, or BNY Affiliate's or agent's (for whose actions BNY is responsible under this Agreement) willful misconduct, bad faith, negligence, fraud, reckless disregard, or breach of this Agreement (including, without limitation, a breach of the Standard of Care), provided that the Customer shall not be indemnified against any liability (or any expenses incident to such liability) to the extent arising out of the Customer's, a Fund's, a Series' or its or their affiliates' own willful misconduct, bad faith, fraud, negligence, reckless disregard or breach of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) In order that the indemnification provisions contained in this Section 9 shall apply, upon the assertion of a claim for which one party may be required to indemnify the other party, the indemnified party shall promptly notify the indemnifying party of such assertion, and shall keep the indemnifying party advised with respect to all developments concerning such claim. The indemnifying party shall have the option to participate with the indemnified party in the defense of such claim or to defend against said claim in its own name or in the name of the indemnified party. The party who may be required to indemnify shall have the right to control the defense of the claim, and the right to defend is at such party's own cost and expense. The indemnified party shall in no case confess any claim or make any compromise in any case in which the indemnifying party may be required to indemnify the indemnified party except with the indemnifying party's prior written consent. In no event will the Customer be liable for any settlement of any action or claim effected without their prior written consent. The party seeking indemnification will cooperate reasonably, at the indemnifying party's expense, with the indemnifying party in the defense of such claim; provided, however, that the party seeking indemnification shall not be required to take any action that would impair any claim it may have against the indemnifying party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>Compensation.</u>

For the services provided hereunder, the Customer agrees to pay BNY such compensation as is mutually agreed to in writing by the Customer and BNY from time to time and such reasonable ordinary out-of-pocket expenses (<u>e.g.</u>, telecommunication charges, postage and

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delivery charges, costs of independent compliance reviews, record retention costs, reproduction charges and transportation and lodging costs) as are incurred by BNY in performing its duties hereunder. The Customer agrees to pay BNY any compensation due it for extraordinary services as is mutually agreed to in writing by the Customer and BNY from time to time. Except as hereinafter set forth, compensation shall be calculated and accrued daily and paid monthly. BNY shall deliver to the Customer invoices for services rendered hereunder, and the Customer shall have a reasonable time period to review and approve the payment of such invoices. Upon termination of this Agreement before the end of any month, the compensation for such part of a month shall be prorated according to the proportion which such period bears to the full monthly period and shall be payable upon the effective date of termination of this Agreement. For the purpose of determining compensation payable to BNY, each Fund's Net Asset Value shall be computed at the times and in the manner specified in the Fund's Offering Materials. The parties agree that any new fees and/or expenses to be charged to the Customer that are related to any changes to the services required by any new applicable law, rule or regulation shall be agreed upon in advance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <u>Records; Visits.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) BNY will maintain accurate books and records associated with the services. The books and records pertaining to each Fund and such Fund's Series which are in the possession or under the control of BNY shall be the property of the Customer and shall be made available promptly to the Customer in accordance with a reasonable request. The Funds and the Customer's Authorized Persons shall have access to such books and records at all times during BNY's normal business hours. Upon the reasonable request of the Customer, copies of any such books and records shall be provided by BNY to the Customer on behalf of the Fund or to an Authorized Person, at the Customer's or the Fund's expense.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) BNY shall create, maintain and retain books and records for each Series in such a manner as will be materially consistent with the obligations applicable to the Fund under (i) the 1940 Act in connection with the services provided hereunder, including without limitation the requirements of Section 31 thereof and Rules 31a-1 and 31a-2 thereunder, and (ii) the CEA in connection with the services provided hereunder for any Series identified to BNY in writing as

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being a commodity pool operated by a registered commodity pool operator. All books and records created for or on behalf of Customer on behalf of any Fund and maintained hereunder shall be the property of the Customer and the applicable Fund and shall at all times during the regular business hours of BNY be open for inspection by duly authorized officers, employees or agents of Customer and the applicable Fund, the independent public accountants of the applicable Fund, and employees and agents of the SEC. BNY shall preserve for the period(s) required by (i) the 1940 Act and the CEA, as applicable, and (ii) any court order, regulatory action or subpoena communicated to BNY by the Customer, the books and records required to be maintained thereunder. All such books and records shall be maintained in a form reasonably acceptable to the applicable Customer, and shall be reasonably arranged and indexed by BNY in a manner that permits reasonably prompt location, access and retrieval of any particular record, including, if requested by the Customer on behalf of a Fund, within the time period specified by Applicable Authorities. BNY shall not destroy any files, records or Documents created or maintained by BNY pursuant to this Agreement except in accordance with its record retention policy as communicated to the Customer from time to time or if such destruction is authorized by the Customer by means of written Instructions. Upon Customer's request, BNY shall promptly surrender to the Customer all books and records of the Funds maintained by BNY pursuant to this Agreement in the format reasonably specified by the Customer. Notwithstanding the above, if the format specified by the Customer is not a format BNY utilizes to maintain the books and records, the Customer shall pay the expenses reasonably incurred by BNY in converting such books and records to the requested format.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. <u>Term of Agreement.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Agreement shall be effective on the date first written above and, unless terminated pursuant to its terms, shall continue until 11:59 PM on the date which is the fifth (5<sup>th</sup>) anniversary of such date (the "<u>Initial Term</u>"), at which time this Agreement shall terminate, unless renewed in accordance with the terms hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) This Agreement shall automatically renew for successive terms of one (1) year each (each, a "<u>Renewal Term</u>"), unless the Fund or BNY gives written notice to the other party of its intent not to renew and such notice is received by the other party not less than ninety (90) days prior to the expiration of the Initial Term or the then-current Renewal Term (a "<u>Non-</u>

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 <u>Renewal Notice</u>"). In the event a party provides a Non-Renewal Notice, this Agreement shall terminate at 11:59 PM on the last day of the Initial Term or Renewal Term, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Termination for Cause</u>. Notwithstanding the preceding paragraph (b) of this Section 12, in the event that BNY or the Customer (as applicable, a "<u>Defaulting Party</u>") shall fail in any material respect to perform its duties and obligations hereunder pursuant to the applicable Standard of Care set forth herein (including, in the case of BNY, through (I) persistent non-material failures to perform its duties or obligations hereunder or (II) the persistent failure to meet key performance indicators pursuant to Section 24 of this Agreement, including the failure, as determined by the Customer in its sole discretion, of BNY to deliver the Anticipated Improvements under a Rectification Plan (as defined below)), the other party (the "<u>Other Party</u>") shall have given written notice thereof to the Defaulting Party, and such material failure shall not have been remedied to the reasonable satisfaction of the Other Party within thirty (30) days after such written notice is received, then, as applicable, the Customer, on behalf of a Fund or the Funds, may terminate this Agreement by providing thirty (30) days' written notice of such termination to BNY, or BNY may terminate this Agreement by providing one hundred twenty (120) days' written notice of such termination to the Customer. In addition, notwithstanding the preceding sentence, this Agreement may be terminated by the Customer on behalf of one or more Funds (i) immediately in the event of an appointment of a conservator or receiver for BNY or any parent of BNY by a regulatory agency or court of competent jurisdiction or, (ii) by providing thirty (30) days' written notice of such termination to BNY in the event that BNY is indicted for a crime, commences any bankruptcy or insolvency proceeding or has such a proceeding initiated against it which is not dismissed within sixty (60) days, or suffers any other material adverse change in its condition, operations or professional reputation that is determined by the Customer in its reasonable discretion to threaten the continuing performance of services hereunder or the reputation of the Customer. Upon termination of the Agreement pursuant to this paragraph (b) with respect to any Fund or Series, the Customer shall pay to BNY such compensation as shall have accrued to the effective date of such termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) [Reserved.]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Upon termination of the Agreement, BNY will, at the Customer's request, offer assistance to the Customer in converting, within a reasonable time frame agreed to by the

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parties not to exceed six (6) months, the Customer's and the Fund's records from BNY's systems to the services or systems designated by the Customer for such transition, subject to the compensation of BNY for such assistance at its standard rates and fees in effect at that time. In addition, upon any termination of services hereunder (whether as to only certain Funds or Series or as to all services under this Agreement), BNY shall take commercially reasonable steps, without additional compensation (except as may be specifically agreed in writing by the Customer or the Investment Advisor in connection with any special or unduly burdensome transitional arrangements), to transfer the books and records and any other property of the applicable Fund held hereunder to a successor provider of accounting and administration services and to provide reasonable assistance in connection with the transition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) All reasonable out-of-pocket expenses associated with the transfer of books and records upon any termination of this Agreement shall be borne by BNY (except as may be specifically agreed in writing by the Customer in relation to special or unduly burdensome arrangements).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) [Reserved.]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. <u>Amendment.</u>

This Agreement may not be amended, changed or modified in any manner except by a written agreement executed by BNY and the Customer to be bound thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. <u>Assignment; Subcontracting.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Agreement shall extend to and shall be binding upon the parties hereto, and their respective successors and assigns; provided, however, that this Agreement shall not be assignable or delegable by Customer on behalf of any Fund without the written consent of BNY, or by BNY without the written consent of the Customer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding the foregoing: (i) BNY may assign or transfer this Agreement to any BNY Affiliate or transfer this Agreement in connection with a sale of a majority or more of its assets, equity interests or voting control, provided that BNY gives the Customer ninety (90) days' prior written notice of such assignment or transfer and such assignment or transfer does not impair the provision of services under this Agreement in any material respect, and the assignee or transferee agrees to be bound by all terms of this Agreement in place of BNY;

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(ii) BNY may subcontract with, hire, engage or otherwise outsource to any BNY Affiliate with respect to the performance of any one or more of the functions, services, duties or obligations of BNY under this Agreement but any such subcontracting, hiring, engaging or outsourcing shall not relieve BNY of any of its liabilities hereunder and BNY will be liable for the acts and omissions of any BNY Affiliate as if BNY provided such services directly; (iii) BNY may subcontract with, hire, engage or otherwise outsource to an unaffiliated third party with respect to the performance of any one or more of the functions, services, duties or obligations of BNY under this Agreement but with respect to any such subcontracting, hiring, engaging or outsourcing to or of an unaffiliated third party BNY shall remain fully and absolutely liable to the Customer for any loss, cost or expense arising directly or indirectly from the actions or omissions of any such unaffiliated third party as if such actions or omissions were taken by BNY; and (iv) BNY, in the course of providing certain additional services requested by the Customer, including but not limited to, Typesetting, Money Market Fund, or eBoard Book services ("<u>Vendor Eligible Services</u>") as further described in Schedule I, may in its sole discretion, enter into an agreement or agreements with a financial printer, or electronic services provider ("<u>Vendor</u>") to provide BNY with the ability to generate certain reports or provide certain functionality. BNY shall not be obligated to perform any of the Vendor Eligible Services unless an agreement between BNY and the Vendor for the provision of such services is then-currently in effect, and shall only be liable for the failure to reasonably select the Vendor. Upon request, BNY will disclose the identity of the Vendor and the status of the contractual relationship, and the Customer is free to attempt to contract directly with the Vendor for the provision of the Vendor Eligible Services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) As compensation for the Vendor Eligible Services rendered by BNY pursuant to this Agreement, the Customer will pay to BNY such fees as may be agreed to in writing by the Fund and BNY. In turn, BNY will be responsible for paying the Vendor's fees. For the avoidance of doubt, BNY anticipates that the fees it charges hereunder will be more than the fees charged to it by the Vendor, and BNY will retain the difference between the amount paid to BNY hereunder and the fees BNY pays to the Vendor as compensation for the additional services provided by BNY in the course of making the Vendor Eligible Services available to the Customer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. <u>Governing Law; Consent to Jurisdiction.</u>

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This Agreement shall be construed in accordance with the laws of the State of New York, without regard to conflict of laws principles thereof. The Customer and BNY hereby consent to the jurisdiction of a state or federal court situated in New York City, New York in connection with any dispute arising hereunder, and waives to the fullest extent permitted by law its right to a trial by jury. To the extent that in any jurisdiction Customer may now or hereafter be entitled to claim, for itself or its assets, immunity from suit, execution, attachment (before or after judgment) or other legal process, the Customer irrevocably agrees not to claim, and it hereby waives, such immunity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. <u>Severability.</u>

In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations shall not in any way be affected or impaired thereby, and if any provision is inapplicable to any person or circumstances, it shall nevertheless remain applicable to all other persons and circumstances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. <u>No Waiver.</u>

Each and every right granted to BNY and the Customer hereunder or under any other document delivered hereunder or in connection herewith, or allowed it by law or equity, shall be cumulative and may be exercised from time to time. No failure on the part of BNY or the Customer to exercise, and no delay in exercising, any right will operate as a waiver thereof, nor will any single or partial exercise by BNY or the Customer of any right preclude any other or future exercise thereof or the exercise of any other right.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. <u>Notices.</u>

All notices, requests, consents and other communications pursuant to this Agreement in writing shall be sent as follows:

if to the Customer, at

Franklin Templeton Services, LLC

One Franklin Parkway

San Mateo, California 94403

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if to BNY, at

The Bank of New York Mellon

240 Greenwich Street

New York, New York 10286

Attention: ETF Operations

with a copy to:

The Bank of New York Mellon

240 Greenwich Street

New York, New York 10286

Attention: Legal Dept. – Asset Servicing

or at such other place as may from time to time be designated in writing. Notices hereunder shall be effective upon receipt.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19. <u>Counterparts.</u>

This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original; but such counterparts together shall constitute only one instrument.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20. <u>[Reserved.]</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21. <u>Confidentiality.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each party shall keep confidential any information relating to the other party's business ("<u>Confidential Information</u>"). Confidential Information shall include (a) any data or information that is competitively sensitive material, and not generally known to the public, including, but not limited to, information about product plans, marketing strategies, finances, operations, customer relationships, customer profiles, customer lists, sales estimates, business plans, and internal performance results relating to the past, present or future business activities of the Customer or BNY and their respective subsidiaries and affiliated companies; (b) any scientific or technical information, design, process, procedure, formula, or improvement that is commercially valuable and secret in the sense that its confidentiality affords the Customer or BNY a competitive advantage over its competitors; (c) all confidential or proprietary concepts, documentation, reports, data, specifications, computer software, source code, object code, flow

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charts, databases, inventions, know-how, and trade secrets, whether or not patentable or copyrightable; and (d) anything designated as confidential. Notwithstanding the foregoing, information shall not be Confidential Information and shall not be subject to such confidentiality obligations if it: (a) is already known to the receiving party at the time it is obtained; (b) is or becomes publicly known or available through no wrongful act of the receiving party; (c) is rightfully received from a third party who, to the best of the receiving party's knowledge, is not under a duty of confidentiality; (d) is released by the protected party to a third party without restriction; (e) is requested or required to be disclosed by the receiving party pursuant to a court order, subpoena, governmental or regulatory agency request or law, provided that, where legally permitted to do so, the receiving party shall give reasonable and prompt advance notice to the protected party of any disclosure required by a court order, subpoena, governmental or regulatory agency request or law, and, upon the protected party's request, the receiving party will use reasonable efforts to obtain assurances from the relevant authority that confidential treatment will be accorded to the information that is required to be disclosed; (f) is relevant to the defense of any claim or cause of action asserted against the receiving party; (g) is Fund information provided by BNY in connection with an independent third party compliance or other review; (h) is released in connection with the provision of services under this Agreement; or (i) has been or is independently developed or obtained by the receiving party. The provisions of this Section 21 shall survive termination of this Agreement for a period of one (1) year after such termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Bank of New York Mellon Corporation is a global financial organization that provides services to clients through its affiliates and subsidiaries in multiple jurisdictions (the "<u>BNY Group</u>"). The BNY Group may centralize functions including audit, accounting, risk, legal, compliance, sales, administration, product communication, relationship management, storage, compilation and analysis of customer-related data, and other functions (the "<u>Centralized Functions</u>") in one or more affiliates, subsidiaries and third-party service providers. Solely in connection with the Centralized Functions, (i) the Customer on behalf of each Fund consents to the disclosure of and authorizes BNY to disclose information regarding the Customer and each Fund ("<u>Customer-Related Data</u>") to the BNY Group and to its third-party service providers who are subject to confidentiality obligations with respect to such information and (ii) BNY may store the names and business contact information of the Customer's and each Fund's employees and representatives on the systems or in the records of the BNY Group or its service

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providers. The BNY Group may aggregate Customer-Related Data with other data collected and/or calculated by the BNY Group (so long as such aggregated data represents a sufficiently large sample that no Customer, Fund or Series data can be identified either directly or by inference or implication), and notwithstanding anything in this Agreement to the contrary the BNY Group will own all such aggregated data, provided that the BNY Group shall not distribute the aggregated data in a format that identifies Customer-Related Data with a particular customer or can be reverse engineered to identify Customer-Related Data with a particular customer. The Customer confirms that it is authorized to consent to the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Without limiting the generality of the preceding paragraph (a) of this Section 21, BNY acknowledges and agrees that the Funds are prohibited by law from making selective public disclosure of information regarding Series holdings, that disclosure of any and all such information to BNY hereunder is made strictly under the conditions of confidentiality set forth in Section 21(a) hereof and solely for the purposes of the performance of fund accounting and administration services hereunder, that any unauthorized disclosure or misuse of such information (including by BNY or any of its employees or agents, or any trading on the basis of such information by anyone in receipt of such information) may constitute a criminal offense of trading on or tipping of material inside information regarding publicly traded securities, that access to any and all such information regarding Series holdings of the Funds shall be restricted to those persons needing such information in the course of the performance of duties hereunder, and that BNY shall apprise all such persons having access of the obligation hereunder and under applicable law to prevent unauthorized disclosure of such Confidential Information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The parties acknowledge and agree that any breach of Section 21 hereof would cause not only financial damage, but irreparable harm to the other party, for which money damages will not provide an adequate remedy. Accordingly, in the event of a breach of Section 21(a) hereof, the non-breaching party shall (in addition to all other rights and remedies they may have pursuant to this Agreement and at law or in equity) be entitled to an injunction, without the necessity of posting any bond or surety, to restrain disclosure or misuse, in whole or in part, of any information in violation of Section 21(a) hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22. <u>Non-Solicitation.</u>

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During the term of this Agreement and for one (1) year thereafter, neither the Customer nor any Fund shall (with the exceptions noted in the immediately succeeding sentence) knowingly solicit or recruit for employment or hire any of BNY's employees, and the Customer shall cause the Fund and each Fund's sponsor and any affiliates of the Customer or a Fund to not (with the exceptions noted in the immediately succeeding sentence) knowingly solicit or recruit for employment or hire any of BNY's employees. To "knowingly" solicit, recruit or hire within the meaning of this provision does not include, and therefore does not prohibit, solicitation, recruitment or hiring of a BNY employee by the Customer, a Fund, the Fund's sponsor or an affiliate of the Customer or a Fund if the BNY employee was identified by such entity solely as a result of the BNY employee's response to a general advertisement by such entity in a publication of trade or industry interest or other similar general solicitation by such entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23. <u>Business Continuity/Disaster Recovery and Information Security.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) BNY will implement and agrees to maintain business continuity and disaster recovery plans designed to minimize interruptions of service and ensure recovery of systems and applications used to provide the services under this Agreement. Such plans will cover the facilities, systems, applications and employees that are critical to the provisions of the services hereunder. BNY will provide an executive summary of the disaster recovery plan and back-up system upon reasonable request of the Customer. BNY will endeavor to test the adequacy of its disaster recovery plan and back-up system at least annually. Upon request by the Customer, BNY will also provide the Customer with a letter assessing the most recent disaster recovery plan and back-up system test results. BNY shall, upon reasonable request, discuss with senior management of the Customer such disaster recovery plan and back-up system and shall, upon reasonable request, provide a high-level presentation summarizing such plan. In the event of equipment failure, work stoppage, governmental action, communication disruption or other impossibility of performance beyond BNY's control, BNY shall, at no additional expense to the Customer, the Funds, Series or their Investment Advisors, take reasonable steps to minimize service interruptions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In the event that the Customer reasonably believes that the occurrence of any such event will substantially prevent, hinder or delay performance of the services contemplated by this Agreement for more than five (5) consecutive business days, the Customer

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may take commercially reasonable actions to mitigate the impact of such services not being provided, including, but not limited to, at the Customer's expense, contracting with another service provider to provide such services during such period; provided, that the Customer shall consult with BNY in good faith in connection with any such mitigation and BNY shall provide the Customer reasonable assistance in good faith in connection therewith; provided, further, that BNY shall resume providing, and the Customer shall pay for, such services when BNY resumes providing them, unless the Customer has terminated this Agreement pursuant to the terms of Section 12(c). Notwithstanding anything set forth in this Section 23(b), in no event shall the Customer be obligated to pay any fees under this Agreement to BNY with respect to any services not actually provided during any event described in this Section 23, and (b) the Customer shall have no responsibility to pay BNY for services temporarily performed by a third party service provider.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) (i) During the term of the Agreement, BNY will implement and maintain an information security program ("<u>ISP</u>") with written policies and procedures reasonably designed to protect the confidentiality and integrity of Customer's Confidential Information provided to BNY in accordance with the Agreement and when in BNY's possession or under BNY's control ("<u>Customer Data</u>"). The ISP will include administrative, technical and physical safeguards, appropriate to the type of Customer Data concerned, reasonably designed to: (i) maintain the integrity, confidentiality and availability of Customer Data; (ii) protect against anticipated threats or hazards to the security or integrity of Customer Data; (iii) protect against unauthorized access to or use of Customer Data that could result in substantial harm or inconvenience to Customer or its clients, and (iv) provide for secure disposal of Customer Data. BNY shall develop, implement and maintain, at its sole expense, a system or methodology to audit for compliance with the requirements of the preceding sentence that is consistent with the SOC controls framework. Such safeguards will include, but shall not be limited to, virus protection, password protection and encryption of data in transmission at a minimum standard of AES 256. BNY will provide the Customer, at least annually, with the most recent SOC reports of its systems and methodologies prepared by an independent third party ("<u>SOC Reports</u>"), and will provide an attestation letter (the "<u>Attestation Letter</u>"), which shall be in the form generally provided by BNY to other similarly situated customers of services similar to the services provided under this Agreement, prepared by the qualified, independent third party engaged by BNY that performed its most recent penetration

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and ethical hack testing of its internet-facing environment relevant to the systems used to provide services under this Agreement. BNY shall maintain books and records sufficient to demonstrate its compliance with the terms of this Section 23(c).

(ii) Upon reasonable notice to BNY, BNY will arrange for its relevant subject matter experts to meet with the relevant subject matter experts of the Customer once annually and at such other times as the Customer may reasonably request to review BNY's security controls and any deficiencies identified in the SSAE-18 audit reports. BNY acknowledges and agrees that, in addition to the Attestation Letter and SOC Reports, it shall discuss with and make available to the Customer the ability to view at BNY's offices BNY's vulnerability management policy as part of BNY's participation in the Customer's periodic security review. At such meeting, the Customer may view BNY's security-related policies and procedures; however, no documentation may be copied, shared, transmitted or removed from BNY's premises, except as mutually agreed. In the event that the Customer reasonably identify a weakness in the information security measures adopted by BNY which has caused or will cause a material breach of the information security measures described in this Section 23(c), the Customer shall provide full details of such weakness in writing to BNY. If the Customer and BNY mutually agree in writing that a weakness identified by the Customer in writing to BNY will cause BNY to materially breach the information security measures described in this Section 23(c), then BNY will seek to remediate such weakness by incorporating it into its vulnerability and remediation schedule. All nonpublic documentation and information disclosed to the Customer in accordance with this Section 23 shall be deemed proprietary and Confidential Information of BNY. The Customer shall not disclose such documentation or information to any third party (except to the extent permitted, necessary or required pursuant to Section 21 or use it for any purpose other than evaluating BNY's security controls, except that the Customer may disclose BNY's SSAE-18 summary to the Customer's external auditors provided that such external auditors are required to maintain the confidentiality of the summary and any related information.

(iii) In the event of any actual or reasonably suspected, based on BNY's experience, breach of security of its systems resulting in the actual or reasonably suspected, based on BNY's experience, unauthorized access to or acquisition, use, loss, destruction, compromise or disclosure of any of the confidential records or information of the Customer (each, a "<u>Security Breach</u>"), upon learning of the Security Breach, BNY shall notify the Customer as promptly as reasonably possible (but no

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later than 72 hours after becoming aware that a Security Breach has occurred) of the relevant facts related to such Security Breach then known to BNY, and of additional relevant facts promptly after they become known to BNY, in the manner provided in Section 18 of this Agreement and also by sending notice to <u>NetworkOperationsSecurityCenter@franklintempleton.com</u> and/or such other electronic mail address or addresses as the Customer may specify by written notice to BNY. BNY shall at its sole cost: (i) promptly investigate such Security Breach; (ii) resolve or mitigate the vulnerability that facilitated the Security Breach to the extent possible; (iii) restore any lost or damaged data using generally accepted data restoration techniques; and (iv) conduct a root cause analysis to provide the Customer with a summary of the findings and actions taken to prevent recurrence of such Security Breach. If a Security Breach occurs with respect to personal information in the possession or under the control of BNY or any of its affiliates, subsidiaries, agents or employees, BNY shall be responsible for Customer's reasonable costs associated with responding to such Security Breach, including, but not limited to, the costs of notifying affected individuals and taking any remedial action required by applicable statutes, laws, rules and regulations and any such other remedial action that BNY reasonably deems necessary (with due regard for industry standards, if any).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) If BNY uses a BNY Affiliate to perform the duties assigned to BNY by this Agreement, such BNY Affiliate shall have appropriate controls in place to meet the objectives of this Section 23, and BNY shall exercise oversight over each such BNY Affiliate to ensure ongoing compliance with the objectives of this Section 23.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24. <u>Key Performance Indicators.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) BNY and the Customer may from time to time agree to document the manner in which they expect to deliver and receive the services contemplated by this Agreement. The parties agree that any such key performance indicators (hereinafter referred to as "KPIs" or, individually as a "<u>KPI</u>") shall be agreed upon in writing by the parties and shall be reflected in one or more schedules to this Agreement. BNY and the Customer acknowledge that any failure to perform in accordance with KPIs shall not in and of itself be considered a breach of contract that gives rise to contractual or other remedies, provided that, such failure may be a breach giving rise to contractual or other remedies if it is persistent and not remedied after consultation. Nothing in this Section 24 shall modify any party's applicable Standard of Care under this Agreement; nor

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shall any meeting or discussion among the parties regarding KPIs be construed to prevent a party from pursuing any remedy otherwise available to it pursuant to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The parties agree to periodically review BNY's performance against the KPIs. Where any such review reveals that one specific KPI has measured at a "red" or "amber" status for three consecutive months (a "<u>Rectification Trigger</u>"), the Customer may, in its sole discretion, invoke the process set out in this Section 24(b):

(i) BNY shall investigate, assemble and preserve (in accordance with its records management policy) all pertinent information with respect to, and report the root causes of the problem that led to the Rectification Trigger;

(ii) BNY shall propose an appropriate written corrective action plan ("<u>Rectification Plan</u>") with respect to such failure and in any event within ten (10) business days, or as otherwise reasonably agreed by the parties. The Rectification Plan shall set out the anticipated improvements ("<u>Anticipated Improvements</u>") and the timeline over which those improvements are expected to be realized ("<u>Plan Period</u>"), which shall be no longer than sixty (60) days (without the Customer's prior written consent, not to be unreasonably withheld or delayed). The Customer shall review the Rectification Plan within five (5) business days and shall (without liability or any resulting obligation or deemed acceptance of approach) comment on the Rectification Plan, suggest improvements and challenge any assumptions and ideas embodied in the Rectification Plan. It is acknowledged that the Customer shall not be obligated or required to acknowledge the Rectification Plan will achieve the relevant KPIs. Upon approval of the Rectification Plan, BNY shall, as soon as reasonably practicable, implement the Rectification Plan so as to deliver the anticipated improvements;

(iii) BNY shall provide the Customer with regular updates of the progress of the Rectification Plan and the parties shall periodically review the progress during the Plan Period;

(iv) BNY shall as soon as reasonably practicable notify the Customer in writing of any material changes to the Rectification Plan from time to time and the reasons for those changes; and

(v) At the end of the Plan Period, BNY shall report on whether the Rectification Plan has delivered the Anticipated Improvements in accordance with this Section 24(b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25. <u>Funds As Parties; Limitation On Fund Liabilities.</u>

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) A person who is not a party to this Agreement shall have no rights to enforce any provision of this Agreement, and no Fund shall have a right to enforce any provision of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding that a Fund may not be not registered with the SEC as an investment company under the 1940 Act, unless instructed otherwise by the Customer, all services provided hereunder by BNY to or for the benefit of Customer on behalf of such Fund shall be performed as if such Fund were so registered.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Additional management investment companies (each a "New Fund") and additional series of existing management investment companies that are listed on Exhibit A hereto or of New Funds (each a "New Series") may from time to time be added as Funds and Series serviced under this Agreement by (A) delivery to BNY of (i) an amendment and restatement of Exhibit A setting forth the appropriate information as to such New Fund and/ or New Series, and (ii) copies of the Documents of such New Fund and/or New Series and (B) BNY's receipt of the foregoing Documents, whereupon BNY, subject to the satisfactory completion of its customary due diligence, shall agree in writing, in accordance with Section 13 above, to the addition of such New Fund and/or New Series which agreement shall not be unreasonably withheld, it being under stood that BNY shall not be deemed to be unreasonable in the event that (i) BNY's ability to provide services hereunder to the New Fund or New Series is otherwise restricted by regulatory requirements or (ii) BNY does not generally offer fund accounting and administration services to institutional clients regarding the particular type of fund or assets.

[Signature page follows.]

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IN WITNESS WHEREOF, the parties hereto have caused the foregoing instrument to be executed by their duly authorized officers and their seals to be hereunto affixed, all as of the latest date set forth below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**FRANKLIN TEMPLETON SERVICES, LLC** 

---

| | |
|:---|:---|
| By: | /s/ Matthew Hinkle |
| Name: | Matthew Hinkle |
| Title: | President |
| Date: | 7/8/25 |
| **THE BANK OF NEW YORK MELLON** | **THE BANK OF NEW YORK MELLON** |
| By: | /s/ Danielle Adamson |
| Name: | Danielle Adamson |
| Title: | Director |
| Date: | July 24, 2025 |

---

------

**<u>EXHIBIT A</u>**

<u>Funds and Series</u> 

**PUTNAM ETF TRUST** 

---

| |
|:---|
| Putnam Focused Large Cap Value ETF |
| Putnam ESG Core Bond ETF |
| Putnam Sustainable Leaders ETF |
| Putnam Sustainable Future ETF |
| Putnam PanAgora ESG International Equity ETF |
| Putnam BDC Income ETF |
| Putnam ESG High Yield ETF |
| Putnam ESG Ultra Short ETF |
| Putnam Focused Large Cap Growth ETF |
| Putnam PanAgora ESG Emerging Markets Equity ETF |
| Putnam Emerging Markets ex-China ETF |
| Putnam BioRevolution ETF |

---

------

**FRANKLIN TEMPLETON** 

**AUTHORIZED SIGNATURE MANDATE** 

I, Kelly Helton, in my capacity as an authorized signatory of Franklin Templeton Services, LLC, hereby confirm that this document, consisting of 4 pages is a certified true copy of the original. The following individuals are authorized to instruct, as per the specified transactions and limitations outlined below. This mandate supersedes all other FTI (Name of Department) mandates on file.

**Transactions – Initiation and Call-back confirmation of each instruction (payment instructions, debit authorizations, cancellations, reversals, and amendments) contained in this mandate (the "Instruction"):** Each Instruction must be approved in writing by any two authorized signers; if the amount of any instruction is equal to or greater than 50,000 USD (or USD equivalent) at least one approver must be from Profile A. Unless otherwise agreed, a Call-back confirmation of the details in the Instruction is required for all Instructions equal to or greater than 50,000 USD (or USD equivalent).

**Limitations** – Each Instruction must be submitted in writing (including but not limited to electronic communication, facsimile, telephone and/or electronic mail). Call-backs can be verbal or written (email), and cannot be confirmed by either person approving the Instruction. Verbal call-back confirmation must be made to a designated phone number and persons authorized within this mandate and cannot be confirmed by either person approving the Instruction. For written Call-back confirmation, an email detailing the instruction must be sent to the designated group e-mail IDs: <u>GCSStaffIntl@franklintempleton.com</u> and <u>MM&CREurope@franklintempleton.com</u>. In order for the Instruction to be considered valid an authorized person must verbally or in writing confirm the Instruction during the call-back. Please utilize those noted as secondary Call-backs only when primary contacts are not available.

**The following applies to Separately Managed Accounts**.

The instruction contained in this mandate (the "Instruction") does not give any authorized signer legal ownership of cash, securities or any assets ("Assets") contained in any account to which this Instruction relates (the "Account") and does not give any authorized signer access to the Assets for the use or benefit of that individual or any person other than the client for whom the Account was established. Authorized signers named in the Instruction do not have authority to withdraw or otherwise transfer Assets out of or into any Account unless such withdrawal or transfer is accompanied by a corresponding movement of Assets of counter value into or out of the Account.

---

| |
|:---|
| Kelly Helton, |
| Senior Vice President—Investment Operations |
| Franklin Templeton Services |

---

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Name and Title Profile Phone number Location Signature

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**<u>SCHEDULE I</u>**

<u>Schedule of Services</u> 

All services provided in this Schedule of Services are subject to the review and approval of the Customer and/or the appropriate Fund officers, Fund counsel and accountants of each Fund, as may be applicable. The services included on this Schedule of Services may be provided by BNY or a BNY Affiliate, collectively referred to herein as "BNY".

**<u>VALUATION AND COMPUTATION ACCOUNTING SERVICES</u>**

BNY shall provide the following valuation and computation accounting services to Customer on behalf of each Fund:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Journalize investment, capital share and income and expense activities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Maintain individual ledgers for investment securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Maintain historical tax lots for each security;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Reconcile cash and investment balances of each Fund with the Fund's custodian;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Calculate various contractual expenses (e.g. advisory and custody fees), monitor expense accruals and notify an
officer of the Fund of any recommended adjustments and implement such adjustments upon receipt of Instructions, and control all disbursements and authorize such disbursements upon Instructions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• For Series identified to BNY in writing as investing primarily in master limited partnerships (an " <u>MLP Fund</u> ") and requiring "dual basis" accounting records, maintain books that are prepared on both a GAAP (generally accepted accounting practices) basis and a tax basis;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Record changes in investment holdings resulting from stock splits, stock dividends, capital reorganizations and
other corporate actions affecting outstanding securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Calculate capital gains and losses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Calculate daily distribution rate per share;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Determine net income;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Obtain security market quotes and currency exchange rates from pricing services approved by the Customer or a
Fund's Investment Advisor, or if such quotes are unavailable, then obtain such Prices from the Fund's Investment Advisor, and in either case, calculate the market value of each Series' investments in accordance with the
Fund's valuation policies or guidelines daily, and transmit the same to the Series' Investment Advisor; provided, however, that BNY shall not under any circumstances be under a duty to independently price or value any of the
Series' investments itself or to confirm or validate any information or valuation provided by the Investment Advisor or any other pricing source, nor shall BNY have any liability relating to inaccuracies or otherwise with respect to such
information or valuations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Compute Net Asset Value;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Calculated daily, and more frequently as may be required by the Documents or requested by the applicable Fund or
its Investment Advisor, and promptly transmit to the Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Such Net Asset Value reports and statements shall be provided to the Fund and to Authorized Participants on days
when the exchange listing the Fund is operating, in each case by such means as BNY and the Fund may agree upon from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Transmit or make available a copy of the daily portfolio valuation to a Fund's Investment Advisor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Publish basket to NSCC on for each day on which trading occurs on the NYSE;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Calculate daily managed assets for each Series that charges advisory fees based on managed assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• As appropriate, calculate the allocations of income, expenses, realized and unrealized gains and losses to feeder
(spoke) funds in any master/feeder (hub/spoke) structures, in accordance with any special allocation procedure methodologies which may be in place and provided to the Fund Accounting Agent in advance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Provide year-end Investment Company Institute broker/dealer reporting
source data

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Process tax adjustments on securities identified by a Fund that require such treatment:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Coordinate U.S.C. Title 26 Internal Revenue Code (" <u>IRC</u> ") §855 and excise tax distribution
requirements posted to the fund

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Monitor dividends and interest that are accrued but not received by each Series and promptly report such
information to the Series and its Investment Advisor

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Compute yields and portfolio average dollar-weighted maturity as applicable; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Compute portfolio turnover rate for inclusion in the annual and semi-annual shareholder reports.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Promptly provide or otherwise make available such reports and statements to the applicable Series Investment
Advisor, on a daily basis or such other basis as shall be reasonably requested by the applicable Series or its Investment Advisor and as may be agreed to by BNY, such agreement not to be unreasonably withheld; and transmit a copy of the daily Series
valuation to the Series' Investment Advisor.

**<u>FINANCIAL REPORTING</u>**

BNY shall provide the following financial reporting services to the Customer on behalf of each Fund:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Financial Statement Preparation & Review* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Prepare the Fund's respective class level annual and semi-annual shareholder reports with respect to a fund
registered on Form N-1A for shareholder delivery, inclusion in Form N-CSR and webhosting, which requires the applicable typesetting services and terms as follows;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• BNY will create financial compositions for the applicable financial report and related EDGAR files.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• BNY will maintain a database of standard Notes to Financial Statements as defined by the Funds including tax
footnote disclosure and ROCSOP adjusting entries provided by the Funds' tax provider and ensure that annual and semi-annual reports conform to the standardizations

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• BNY will maintain country codes, industry class codes, security class codes, and state codes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• BNY will create components that will specify the proper grouping and sorting for display of portfolio
information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• BNY will create components that will specify the proper calculation and display of financial data required for
each applicable financial report (except for identified manual entries, which BNY will enter).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• BNY will process, convert, and load security and general ledger data.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• BNY will perform document publishing, including the output of print-ready PDF files and EDGAR html files (such
EDGAR html files will be limited to one per the applicable financial report and unless mutually agreed to in writing between BNY and a Fund, BNY will use the same layout for production data for every successive reporting period).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• BNY will generate financial reports (using the capabilities of a financial printer or other vendor) which include
the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Identifying information at the beginning of the shareholder report;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Class expense example;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Management Discussion of Fund Performance (semi-annual shareholder report at Customer's option);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Key fund statistics including total advisory fees paid by the fund, portfolio turnover rate, net assets, and
number of holdings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Graphical representation of holdings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Material fund changes (if applicable) (semi-annual shareholder report at a Fund's option);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Changes in and disagreements with accountants in summary form (if applicable);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Statement regarding the availability of certain additional information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Additional fund information as mutually agreed in writing between BNY and a Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Unless mutually agreed in writing between BNY and a Fund, BNY will use the same layout and format for every
successive reporting period for the typeset reports. At the request of Customer and upon the mutual written agreement of BNY and a Fund as to the scope of any changes and additional compensation of BNY, BNY will, or will cause the financial printer
or other applicable vendor to, change the format or layout of reports from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Prepare the Fund's quarterly schedule of portfolio holdings (requires "Typesetting Services" as
described herein) for inclusion in Form N-PORT;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Prepare, circulate and maintain the Fund's financial reporting production calendar; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Prepare and file (or coordinate the filing of) a Fund's Form 24f-2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Modernization Reporting Services* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• BNY shall provide the Modernization Reporting Services set forth in this section to the Funds following a full
service operating model. This operating model requires BNY to include the actual filing of the reports as part of the services noted in this section. Modernization Reporting Services are "Vendor Eligible Services" as contemplated in
Section 14(b)(iv) of the Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• FORM N-PORT. BNY, subject to the limitations described in this section
and its timely receipt of all necessary information related thereto, will, or will cause the Vendor to: (i) collect, aggregate and normalize the data required for the submission of Form N-PORT; (ii) prepare, on a monthly basis, Form N-PORT; and (iii) file Form N-PORT with the SEC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The timely receipt of necessary information referred to above will be determined by mutual agreement of BNY and
the Fund in advance of the preparation of the initial Form N-PORT to be filed under the Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Unless mutually agreed in writing between BNY and the Fund, BNY will use the same layout and format for every
successive reporting period for Form N-PORT.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• FORM N-CEN. BNY, subject to the limitations described in this section and
its timely receipt of all necessary information related thereto, will, or will cause the Vendor to: (i) collect, aggregate and normalize the data required for the submission of Form N-CEN; (ii) prepare, on an annual basis, Form N-CEN; and (iii) file Form N-CEN with the SEC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The timely receipt of necessary information referred to above will be determined by mutual agreement of BNY and
the Fund in advance of the preparation of the initial Form N-CEN to be filed under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Unless mutually agreed in writing between BNY and the Fund, BNY will use the same source for obtaining the
information and method for performing the required calculations for every successive Form N-CEN.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Fixed Income Risk Analytics. BNY shall calculate the portfolio and security-level risk metrics required within
Form N-PORT and Form N-CEN (referenced above).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Liquidity Rule Analysis. BNY shall perform a daily analysis for liquidity classifications and monitor liquidity
thresholds per the requirements for Form N-PORT and Form N-CEN (referenced above) and Rule 22e-4.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The analysis provided by BNY is subject to and dependent upon the Fund providing all necessary security
classifications and percentage thresholds necessary to perform such analysis. The parties hereto acknowledge that the Fund is solely responsible for the adoption, adequacy and effectiveness of the Fund's liquidity risk management program.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• BNY shall not be responsible for: (a) delays in the transmission to it by the Fund, the Fund's adviser
and entities unaffiliated with BNY (collectively, for this Modernization Reporting Services section, the " <u>Third Parties</u> ") of data required for the preparation of reports described herein, (b) inaccuracies of, errors in or
omissions of, such data provided to it by any Third Party, and (c) validation of such data provided to it by any Third Party. .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Fund, in a timely manner, shall review and comment on, and, as the Fund deems necessary, cause its counsel
and accountants to review and comment on, each report described in this section. The Fund shall provide to BNY timely sign-off of, and authorization and direction to file, each such report. Absent such timely sign-off, authorization and direction by the Fund, BNY shall be excused from its obligations to prepare and file the affected report. BNY is providing the services related to the filing of such reports based on the
acknowledgement of the Fund that such services, together with the activities of the Fund in accordance with its internal policies, procedures and controls, shall together satisfy the requirements of the applicable rules and regulations for each such
report.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• For such time as this Modernization Reporting Services section remains in effect, BNY shall be responsible for
the retention of the filed reports described in this section in accordance with any applicable rule or regulation.

<sup>◾</sup> *Typesetting Services*<sup>1</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Create financial compositions for the applicable financial report and related EDGAR files;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Maintain country codes, industry class codes, security class codes and state codes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Map individual general ledger accounts into master accounts to be displayed in the applicable financial reports;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Create components that will specify the proper grouping and sorting for display of portfolio information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Create components that will specify the proper calculation and display of financial data required for each
applicable financial report (except for identified manual entries, which BNY will enter);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Process, convert and load security and general ledger data;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Include data in financial reports provided from external parties to BNY which, includes, but is not limited to:
shareholder letters, "Management Discussion and Analysis" commentary, notes on performance, notes to financials, report of independent auditors, Fund management listing, service providers listing and Fund spectrums;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Document publishing, including the output of print-ready PDF files and EDGAR html files (such EDGAR html files
will be limited to one per the applicable financial report and unless mutually agreed to in writing between BNY and a Fund, BNY will use the same layout for production data for every successive reporting period);

<sup>1</sup> Separate fees will apply for the noted services.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Generate financial reports using the Vendor's capabilities which include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• front/back cover;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• table of contents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• shareholder letter;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Management Discussion and Analysis commentary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• sector weighting graphs/tables;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• disclosure of Fund expenses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• schedules of investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• statement of net assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• statements of assets and liabilities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• statements of operation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• statements of changes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• statements of cash flows;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• financial highlights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• notes to financial statements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• report of independent registered public accounting firm;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• tax information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• additional Fund information as mutually agreed in writing between BNY and a Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Unless mutually agreed in writing between BNY and a Fund, BNY will use the same layout and format for every
successive reporting period for the typeset reports. At the request of a Fund and upon the mutual written agreement of BNY and the Fund as to the scope of any changes and additional compensation of BNY, BNY will, or will cause the Vendor to change
format or layout of reports from time to time.

**<u>FUND ADMINISTRATION SERVICES</u>**

BNY shall provide the following fund administration services to the Customer on behalf of each Fund:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• In accordance with Instructions received from a Fund, and subject to portfolio limitations as provided by such
Fund to BNY in writing from time to time, monitor such Fund's compliance, on a post-trade basis, with such portfolio limitations, provided that BNY maintains in the normal course of its business all data necessary to measure the Fund's
compliance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Monitor the Fund's status as a regulated investment company under Subchapter M of the IRC and Subchapter L
of the IRC (if required), including the results of preliminary and final asset diversification tests and the results of qualifying income tests;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Establish appropriate expense accruals and compute expense ratios, maintain expense files and coordinate the
payment of Fund approved invoices;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Calculate Fund approved income and per share amounts required for periodic distributions to be made by the
applicable Fund;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Calculate total return information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Coordinate a Fund's annual audit;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Supply various normal and customary portfolio and Fund statistical data as requested on an ongoing basis; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Provide dividend/income/expense projections for excise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If the chief executive officer or chief financial officer of a Fund is required to provide a certification as
part of a Fund's Form N-CSR filing pursuant to regulations promulgated by the SEC under Section 302 of the Sarbanes-Oxley Act of 2002, provide a sub-certification in support of certain matters set forth in the aforementioned certification. Such sub-certification is to be in such form and relating to such matters
as agreed to by BNY in advance. BNY shall be required to provide the sub-certification only during the term of the Agreement and only if it receives such cooperation as it may request to perform its
investigations with respect to the sub-certification. For clarity, the sub-certification is not

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itself a certification under the Sarbanes-Oxley Act of 2002 or under any other law, rule or regulation.

**<u>REGULATORY ADMINISTRATION SERVICES</u>**

BNY shall provide the following regulatory administration services to the Customer on behalf of each Fund:

Maintain a regulatory calendar for each Fund listing various SEC filing and Board approval deadlines;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Assemble and distribute board materials for quarterly meetings of the Board, including the drafting of agendas
and resolutions for such quarterly meetings of the Board (with final selection of agenda items made by Fund counsel);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Attend (in-person or telephonically) quarterly Board meetings and draft
minutes thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Prepare and coordinate the filing of annual post-effective amendments to a Fund's registration statement
(not including the initial registration statement or related to the addition of one or more classes of Shares or series);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Prepare and coordinate the filing of Forms N-CSR and N-PX, as applicable (with the Fund supplying the voting records in the format required by BNY);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Assist the Fund in the handling of SEC examinations by providing requested Documents in the possession of BNY
that are on the SEC examination request list; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Assist in the preparation of notices of annual or special meetings of shareholders and proxy materials relating
to such meetings

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *eBoard Book Services*:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Permit persons or entities entering a valid password to have electronic access, via an Internet-based secure
website, to current quarterly board meeting materials and such other board meeting materials as may be agreed between BNY and a Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *38a-1 Compliance Support Services* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Provide compliance policies and procedures related to services provided by BNY and, if mutually agreed, certain
of the BNY Affiliates; summary procedures thereof; and periodic certification letters on a quarterly basis, including an attestation as to whether there have been any material changes to the policy and procedures summaries provided to the Trust, and sub-certifications related to the Sarbanes-Oxley Act of 2002.

------

**<u>SCHEDULE II</u>**

**LOAN ADMINISTRATION SERVICES ADDENDUM** 

**TO SUB-ADMINISTRATION AGREEMENT** 

This Loan Servicing Addendum ("**Addendum**") to the Sub-Accounting and Administration Agreement ("**Agreement**") contains additional provisions which apply whenever Customer, on behalf of a Fund, desires that BNY provide Loan Administration Services (as defined below) in respect of Loans (as defined below) made or acquired by a Fund. The provisions of this Addendum shall be considered part of the Agreement and shall be enforceable in accordance with the terms of such Agreement. In the event of any conflict between any of the provisions set forth in this Addendum and any of the provision set forth in the Agreement or in any exhibits, schedules or other attachments thereto, the provisions of this Addendum shall control with respect to the Loan Administration Services. All subsequent references in this Addendum to the Agreement shall mean the Agreement as modified by this Addendum.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. **Definitions**. Whenever used in this Addendum, the following words shall have the meanings set forth below. Capitalized terms not otherwise defined below shall have the meanings given to such terms in the Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. "**Loan Accounts**" shall mean those demand deposit accounts listed in Exhibit C established at BNY in the name of the BNY for the benefit of the applicable Fund as directed by the Customer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. "**Loan Administration Services**" shall mean with respect to each Loan, those services to be provided by BNY to a Fund as set forth on Exhibit A to this Addendum.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. "**Loan Documents**" shall mean, for each Loan acquired or made by a Fund, each of the assignment and acceptance agreement, funding memorandum, credit agreement, amendments to the credit agreement (if any), the current amortization schedule for each Loan (if any) and such other information with respect to the Loan as BNY may reasonably require in order to perform the Loan Administration Services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. "**Loans**" shall mean any direct, participation or subparticipation interest in or assignment or novation of a loan or other extension of credit including, but not limited to, bank loans, interests in bank loans, loan commitments or other commercial loans, whether the loans are bilateral or syndicated and whether any obligor is located in or outside of the United States, made or acquired by a Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **The Services**. BNY shall provide to the Customer on behalf of each Fund the Loan Administration Services in respect of loans. The Customer shall, or shall cause each Fund to, promptly after the date hereof, deliver or cause to be delivered to BNY copies of all Loan Documents in connection with the Loans being serviced by BNY pursuant to the terms of the Agreement and this Addendum.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. **Loan Accounts**.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. BNY shall, in connection with its provision of the Loan Administration Services, establish and maintain one or
more Loan Accounts. BNY will utilize one or more Loan Accounts (i) to accept funds received in respect of a Loan and (ii) forward such collected funds to BNY for deposit into the custody account of the applicable Fund established with the
BNY pursuant to the Global Custody Agreement between BNY and the applicable Fund (the "**Custody Account** "). Funds received into the Loan Accounts prior to 4:00pm Central Standard Time on any business day will be transferred to the
corresponding Custody Account on that business day and funds received after 4:00 pm Central Standard Time will be transferred by the following business day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. The parties acknowledge and agree that if BNY deposits any amount in a Loan Account not required to be
deposited therein, it may at any time withdraw such amount from the Loan Account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. **Representations and Warranties of a Fund.** The Customer, on behalf of itself and each Fund, represents and warrants to BNY that it has:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. independently and without reliance upon BNY, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other condition and creditworthiness of any borrower and its affiliates and made its own decision to make and/or purchase the Loans; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. independently and without reliance upon BNY, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action with respect to the Loans, and to make such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of any borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5. Exculpation of BNY.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. BNY will have no liability for any delay or failure by the Customer, a Fund or any third party (including, but
not limited to, the Customer or a Fund's investment manager) in providing Loan Documents to BNY or for any inaccuracy or incompleteness of any Loan Documents. BNY will have no obligation to verify, investigate, recalculate, update or otherwise
confirm the accuracy or completeness any Loan Documents or other information or notices received by BNY in respect of a Loan. BNY will be entitled to (i) rely upon the Loan Documents and any other instrument, writing, resolution, notice,
consent, certificate, affidavit, letter, telecopy, telex or teletype message, statement, order or other document reasonably believed by it to be genuine and correct and to have been signed, sent or made by the proper person or persons, including,
but not limited to, any syndication agent, lead or obligor, the investment manager or any similar party with respect to a Loan and/or upon advice and statements of legal counsel (including, without limitation, counsel to BNY, the Customer, any Fund,
the

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investment manager, any borrower or any lender), independent accountants and other experts selected by BNY and (ii) update its records on the basis of such information or notices as may from time to time be received by BNY.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Delivery of reports, information and documents to BNY is for informational purposes only and BNY's
receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the borrower's compliance with any of its covenants under the Loan Document. BNY shall
be fully justified in failing or refusing to take any action under this Agreement unless it shall first receive such advice or concurrence of the Customer or any Fund as it deems appropriate or it shall first be indemnified to its satisfaction by
the Customer against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. BNY will have no obligation to (i) determine whether any necessary steps have been taken or requirements
have been met for a Fund to have acquired good or record title to a Loan, (ii) ensure that a Fund's acquisition of a Loan has been authorized by such Fund, (iii) collect past due payments on the Loan, preserve any rights against
prior parties, exercise any right or perform any obligation in connection with the Loan (including taking any action in connection with any consent solicitation, notice of default or similar notice received from any syndication agent, lead or
obligor on a Loan) or otherwise take any other action to enforce the payment obligations of any obligor on a Loan, (iv) become itself the record title holder of the Loan or (v) make any advance of its own funds with respect to the Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. BNY shall not be deemed to have knowledge or notice of the occurrence of any default or event of default under
the Loans unless BNY has received notice from the Customer referring to this Agreement, describing such default or event of default and stating that such notice is a "notice of default." BNY shall take such action with respect to such
default or event of default as shall be reasonably directed by the Customer; <u>provided</u> that unless and until BNY shall have received such directions, BNY may (but shall not be obligated to) take such action, or refrain from taking such action,
with respect to such default or event of default.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. The Customer on behalf of itself and each Fund expressly acknowledges that neither BNY nor any of their
respective officers, directors, employees, agents, attorneys, attorneys-in-fact or affiliates have made any representations or warranties to it and that no act by BNY
hereafter taken, including, without limitation, any review of the affairs of any borrower or any affiliate of any borrower, shall be deemed to constitute any representation or warranty by BNY. Except for notices, reports and other documents
expressly required to be furnished to the Customer by BNY, BNY shall not have any duty or responsibility to provide the Customer or any Fund with any credit or other information concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any borrower that may come into the possession

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of the BNY or any of its officers, directors, employees, agents, attorneys, attorneys-in-fact or affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. BNY shall not be obligated to accept nor be responsible for holding or safekeeping any collateral including,
any securities, promissory notes, certificates of equity or debt ownership or obligations, deeds, mortgages, bonds, security agreements, any other type of negotiable instrument, or any other document related to the Loan Administration Services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. With respect to any Loan, BNY will have no duties or responsibilities whatsoever with respect to any Loan
except as are expressly set forth in this Addendum.

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**EXHIBIT A** 

<u>Schedule of Services</u> 

1. Fund: shall mean the entities listed on Exhibit C.

2. With respect to a Loan to be serviced hereunder, the parties agree that Service Provider shall perform the
following services for Customer on behalf of each Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Set-Up / File Maintenance</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Service Provider shall accept from each Fund or its designee the relevant information pertaining to the Loans
and thereafter maintain paper or electronic copies of same in Service Provider's system, including as available or appropriate, copies of all new assignment and acceptance agreements, funding memoranda, and current loan or credit agreements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Service Provider shall record daily interest accruals for each Loan held in any Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Service Provider shall record and process validated interest, principal and fee payments to such Fund's
designated account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Service Provider shall record and process rollovers, re-pricings, conversions and margin changes for Loans held in any Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) Service Provider shall maintain current records of account activity regarding payments remitted under the Loans
to Service Provider for the benefit of each Fund, and shall remit such payments as instructed by such Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) Notwithstanding the foregoing, Service Provider shall not be obligated to accept nor be responsible for holding
or safekeeping originals of any securities, promissory notes, certificates of equity or debt ownership or obligations, deeds, mortgages, bonds, security agreements, any other type of negotiable instrument, or any other document related to the Loans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Reporting / Communications</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) "Reports" shall mean those reports produced by Service Provider and transmitted daily to the
various parties as shall be designated by the Customer, containing the information indicated in and substantially in the form of the sample reports provided to the Customer before the execution of this Agreement and listed on Exhibit B hereto. The
Reports may be transmitted by electronic means, including but not limited to e-mail.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The parties agree that, whereas it is necessary hereunder for Service Provider to expeditiously obtain and
process information, including notices, derived from third-parties, including agents for the Loans (particularly in connection with providing any reports to the Customer), Service Provider shall be entitled to rely upon such third-party information
and shall not be required to verify or authenticate in any manner such information. Service Provider will be deemed to have acted reasonably in accepting, using and transmitting such information, as contemplated herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Assignments / Pay-Offs / Terminations</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Service Provider shall maintain records of information it receives regarding the transfer, pay-off, assignment, participation, sale, modification, termination or other changes in the Loans, and reflect such changes in its system, and in the Reports.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) As set forth in Section 3 "Loan Accounts" of this Addendum, Service Provider will coordinate
settlement of assignments and transfer of sale proceeds with the Custodian.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Inquiries/ Record Keeping</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Service Provider shall maintain electronic records of material notices it receives from the administrative
agents of the Loans regarding the Loans and transactions with respect to the Loans for a period of seven years from receipt.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Service Provider will provide initial response to e-mail or telephone
inquiries by the Customer about a Loan within 2 business days;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Service Provider will, to the extent requested by the Customer, liaise with the administrative agents of the
Loans regarding the Loans.

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**EXHIBIT B** 

**A. Standard Daily Reports as produced by Service Provider** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Daily Trial Balance

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Daily Accrued Interest Report

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Daily Activity Report

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Daily Repricing and Past Due Report

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Daily Margin Change Report

**B. Custom Reports (if requested by the Customer)** 

**C. Customized Extracts (if requested by the Customer)** 

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**<u>EXHIBIT C</u>**

**<u>List of Funds, Loan Accounts and the applicable Custody Account.</u>** 

---

| | | |
|:---|:---|:---|
| **Funds** | **Loan Account Number** | **Custodial Account Number** |
| Putnam ESG High Yield ETF | 1014066 | 1014066 |

---

## Ex-99.(J)(1)

**CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** 

We hereby consent to the incorporation by reference in this Registration Statement on Form N-1A of Putnam ETF Trust of our reports, dated and listed below, relating to the financial statements and financial highlights, which appear in each of the funds' Annual Reports on Form N-CSR for the year ended April 30, 2025. We also consent to the references to us under the headings "Financial highlights", "FINANCIAL STATEMENTS" and "Auditor" in such Registration Statement.

---

| | |
|:---|:---|
| **Fund** | **Report Date** |
|  Putnam BDC Income ETF | June 16, 2025 |
|  Putnam BioRevolution<sup>™</sup> ETF | June 16, 2025 |
|  Putnam Emerging Markets ex-China ETF | June 16, 2025 |
|  Putnam ESG Core Bond ETF | June 16, 2025 |
|  Putnam ESG High Yield ETF | June 16, 2025 |
|  Putnam PanAgora ESG Emerging Markets Equity ETF | June 16, 2025 |
|  Putnam PanAgora ESG International Equity ETF | June 16, 2025 |
|  Putnam ESG Ultra Short ETF | June 16, 2025 |

---

/s/ PricewaterhouseCoopers LLP

Boston, Massachusetts

August 20, 2025

## Ex-99.(P)(3)

**As of January 1, 2025** 

**PanAgora Asset Management, Inc.** 

**Code of Ethics** 

***Table of Contents***

---

| | |
|:---|:---|
|  Introduction | 2 |
|  Compliance with Ethical Standards and Applicable Law | 2 |
|  Conflicts of Interest | 3 |
|  Confidentiality | 4 |
|  Personal Trading | 4 |
|  Insider Trading | 4 |
|  Service on Boards Not Related to a PanAgora Investment | 5 |
|  Outside Business of PanAgora Individuals | 5 |
|  Business of Family of PanAgora Individuals | 5 |
|  Gifts & Entertainment | 5 |
|  Accommodation-Type Transactions | 5 |
|  Political Contribution Policy | 6 |
|  Questions | 6 |

---

**EXHIBITS:** 

Exhibit 1: Code of Ethics Acknowledgement

Exhibit 2: PanAgora Whistleblower Policy

Exhibit 3: PanAgora Personal Trading Policy

Exhibit 4: PanAgora Insider Trading Policy

Exhibit 5: PanAgora Gifts & Entertainment Policy

Exhibit 6: PanAgora Political Contribution Policy

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***Introduction***

PanAgora's Board of Directors and Audit and Compliance Committee has delegated responsibility for the implementation and oversight of the firm's Code of Ethics to the Code of Ethics Oversight Committee, which is chaired by PanAgora's CEO, Bryan Belton. Day-to-day responsibility for maintenance and oversight of this Code of Ethics rests with PanAgora's Chief Compliance Officer ("CCO"), Marc Volpe.

This Code of Ethics may be revised at any time in PanAgora's sole discretion to reflect developments in relevant laws, approaches to questions of interpretation, and the application of practical experience, as well as new policies of PanAgora. This Code is intended to provide guidance to employees and certain consultants of PanAgora (each a "<u>PanAgora Individual</u>") regarding PanAgora's practices, standards and applicable legal standards. This Code of Ethics is not intended to alter perceptions of the legal standards that would otherwise exist in the absence of this Code.

This Code is to be distributed to all PanAgora Individuals when they join PanAgora, and annually thereafter, and additionally upon any amendment to the Code. Each PanAgora Individual shall submit to the CCO promptly after receipt of this Code (or any amendments thereto) an executed copy of the Code of Ethics Acknowledgement attached hereto (or similar acknowledgement provided via PanAgora's Code of Ethics reporting system) as <u>Exhibit 1</u> indicating that the PanAgora Individual has read and understood the Code.

While PanAgora actively monitors the investment activity and personal trades of PanAgora Individuals, it is the responsibility of PanAgora Individuals to ensure that they are not in real or apparent conflict with any applicable laws, this Code or any PanAgora policy. The CCO, together with the Code of Ethics Oversight Committee, is responsible for dealing with alleged violations. Ignorance of this Code, other PanAgora policies and/or applicable laws is not a valid reason for violation of these standards and will not protect those governed by it from the negative consequences of any such violations. If a PanAgora Individual is unsure about any aspect of any conduct (including, for example, the execution of transactions) whether for PanAgora, its clients or for himself or herself, he or she should ask the CCO for advice. If a PanAgora Individual is still uncertain, he or she must refrain from acting. PanAgora will discipline those PanAgora Individuals who violate this Code, other company policies or applicable laws.

***Compliance with Ethical Standards and Applicable Law***

**Standards of Conduct** 

The operating principles of PanAgora require both personal and professional integrity. PanAgora Individuals are expected to professionally conduct all business activities in accordance with PanAgora policies and procedures, applicable law, and the highest ethical standards.

All PanAgora Individuals, however, not only must conform their conduct to applicable policies, laws and standards, but also must come forward when violations or irregularities that could jeopardize the integrity of PanAgora are observed.

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**Reporting, Review and Investigation** 

All PanAgora Individuals who have concerns about possible breaches of ethics or relevant laws, or of any PanAgora policy governing compliance with ethics or relevant laws (or who have suggestions for improving this Code), should bring the matter promptly to the attention of the COO, the CCO, the CEO, or the General Counsel ("GC"). This includes possible breaches learned through direct observation as well as those learned through the report of another PanAgora Individual.

PanAgora's Whistleblower Policy, attached as <u>Exhibit 2</u> hereto, is to encourage and provide a process for PanAgora Individuals to lawfully report without fear of retaliation any knowledge or concerns about misconduct under, or violations of, applicable securities or related laws by a PanAgora Individual that have occurred, are ongoing, or about to occur. All reports of breaches of ethics, applicable laws, or any PanAgora policy will be subjected to review, and where appropriate, investigations will be conducted by the PanAgora Code of Ethics Oversight Committee.

Upon completion of any such investigation, the Code of Ethics Oversight Committee or a member or members thereof, will meet individually with PanAgora Individuals making the reports, as well as the PanAgora Individuals against whom the reports are made, to review the results of the investigations, and where actions are determined to be appropriate, to inform the parties of the steps that will be taken to address the situation. PanAgora will generally release information arising out of reports made under this Code, and any resulting investigations, only on a need-to-know basis. All PanAgora Individuals should be aware, however, that information will likely be shared among the Code of Ethics Oversight Committee, the CCO and relevant personnel in order for effective investigations to be conducted.

It is a violation of this Code for any PanAgora Individual to be subject to retaliation for reporting, truthfully and in good faith, violations of ethics or relevant laws or breaches of any PanAgora policies regarding compliance with ethical standards or relevant laws, or for cooperating with investigations under this Code. All who engage in such retaliatory actions will be subject to disciplinary action, which may include termination of employment or association with PanAgora. In connection with the foregoing, all PanAgora employees are subject to the terms of PanAgora's Whistleblower Policy, attached hereto as <u>Exhibit 2</u>.

***Conflicts Of Interest***

As a condition of employment or any consulting arrangement, as applicable, PanAgora Individuals at all times shall act in a manner consistent with their fiduciary responsibilities to PanAgora and its clients and shall exercise care that no detriment results to PanAgora or any clients thereof from conflicts between PanAgora Individual interests and those of PanAgora or its clients. All PanAgora Individuals, at all times, shall also seek to avoid the appearance of conflicts of interest.

For purposes of this statement, PanAgora Individuals are considered to have conflicts of interest when they, or any of their Family or Associates (each as defined below), either:

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. have, to the knowledge of the PanAgora Individual, an existing or potential financial or other interest which
impairs their independence of judgment in the discharge of responsibilities to PanAgora or its clients; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. may, to the knowledge of the PanAgora Individual, receive a material financial or other benefit (other than the
official compensation and benefits afforded to PanAgora Individuals) from knowledge of confidential, proprietary, or material nonpublic information (please see PanAgora Insider Trading Policy, attached as <u>Exhibit 3</u>, for more information on
what constitutes material nonpublic information).

The "<u>Family</u>" of a PanAgora Individual includes spouses, parents, siblings, children, and, if living in the same household, other relatives. "<u>Associate(s)</u>" of a PanAgora Individual includes any person, trust, organization or enterprise of, in or with which such PanAgora Individual or any of their Family:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) is a director, officer, employee, member, partner or trustee; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) has a financial interest that represents five percent or more of their assets or any interest that enables
them, acting alone or in conjunction with others, to exercise control or to influence policy significantly; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) has any other association that could cause them to wish to benefit such person.

All PanAgora Individuals are responsible for promptly reporting any conflicts of interest, or potential conflicts of interest, to the CCO.

***Confidentiality***

All PanAgora Individuals must sign upon commencement of their employment or consulting arrangement with PanAgora a letter agreement confirming that they will not at any time disclose to any unauthorized person or otherwise use any Confidential Information for any reason other than the business of PanAgora and its affiliates or as required by law. "Confidential Information" means any and all information of PanAgora and its affiliates that is not generally available to the public, and as more particularly defined in each PanAgora Individual's Confidentiality Agreement.

***Personal Trading***

All PanAgora Individuals shall act in accordance with the PanAgora Personal Trading Policy attached hereto as <u>Exhibit 3</u>.

***Insider Trading***

All PanAgora Individuals shall act in accordance with the PanAgora Insider Trading Policy attached hereto as <u>Exhibit 4</u>.

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***Service On Boards Not Related To A PanAgora Investment***

PanAgora Individuals may serve on boards of directors, boards of trustees, investment committees or other similar decision-making bodies of entities that are not investments of PanAgora only where there is no real or apparent conflict with PanAgora or any of the clients or funds managed by PanAgora. PanAgora Individuals are encouraged to provide non-compensated service to charitable organizations. However, such service must not materially interfere with the PanAgora Individual's responsibilities to PanAgora and must comply with the provisions of this Code of Ethics, including, but not limited to, the PanAgora Political Contribution Policy (attached hereto as <u>Exhibit 6</u>).

Every PanAgora Individual must notify the CCO of his or her membership on any board of directors, board of trustees, investment committee or other similar decision-making body of an entity.

If at any time subsequent to accepting these roles, the possibility of a conflict develops, they should immediately be reported to the CCO. PanAgora may require that PanAgora Individuals resign from such positions if they are determined by the CCO to be in conflict, or to have the appearance of a conflict, with PanAgora's or its clients' interests. All compensation received from serving as board members or similar functions must be reported to the CCO.

***Outside Business of PanAgora Individuals***

PanAgora Individuals (with the exception of consultants) may not, without prior written approval of the CCO (or relevant department head), conduct any outside business or other remunerative activities during their employment or consultancy with PanAgora, other than investing for their own or related accounts.

All such outside business activity must be disclosed by PanAgora Individuals in the Initial Holdings Report and Annual Holdings Report submitted pursuant to the PanAgora Personal Trading Policy, and from time to time each time a PanAgora Individual proposes to engage in an outside business.

***Business of Family of PanAgora Individuals***

All PanAgora Individuals shall provide, upon request, information as to the employment of their Family.

***Gifts & Entertainment***

All PanAgora Individuals must act in accordance with the PanAgora Gifts & Entertainment Policy attached hereto as <u>Exhibit 5</u>.

***Accommodation-Type Transactions***

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As a condition of employment or consultancy, as applicable, PanAgora Individuals shall not engage, whether for their own accounts or on the account of PanAgora, in accommodation-type transactions designed to help third parties violate applicable laws, including tax regulations. PanAgora Individuals who suspect that they have received proposals for inappropriate accommodation-type transactions should report the situation to the CCO.

***Political Contributions***

All PanAgora Individuals to whom the PanAgora Political Contribution Policy (attached hereto as <u>Exhibit 6</u>) applies must act in accordance therewith.

***Questions***

Questions and reporting under this Code should be directed to the CCO.

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**Exhibit 1** 

**Acknowledgement** 

I, the undersigned employee of, or consultant to PanAgora Asset Management, Inc. ("<u>PanAgora</u>"), hereby certify that I have read and understood PanAgora's Code of Ethics dated as of January 1, 2025 and that I will conduct myself and my activities in accordance and compliance with the requirements and standards described therein.

I understand and acknowledge that PanAgora may take disciplinary action, including suspending or terminating me from PanAgora for failure to comply with the policies set forth in the above-referenced Code of Ethics.

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| |
|:---|
| Signature |
| Please print name |
| Date |

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**As of January 1, 2025** 

**PanAgora Asset Management, Inc.** 

**("PanAgora")** 

**Whistleblower Policy** 

PanAgora is committed to maintaining the highest business and personal ethical standards as well as to complying with all applicable securities laws, the Commodities Exchange Act (the "**CEA**"), and the regulations thereunder. Ethical business behavior is expected of every Person working at PanAgora whether an employee or independent contractor (each, a "PanAgora Person"). A "Whistleblower" is defined as a person who works at PanAgora and who submits to PanAgora or to the U.S. Securities Exchange Commission ("**SEC**") or Commodity Futures Trading Commission ("**CFTC**"), a lawful complaint or allegation of misconduct under, or a violation of, applicable securities laws or the CEA that has occurred, is ongoing, or is about to occur.

The objective of this Whistleblower Policy is to encourage and provide a process for PanAgora Persons to lawfully report without fear of retaliation any knowledge or concerns about misconduct under, or violations of, applicable securities laws or the CEA by a PanAgora Person that have occurred, are ongoing, or about to occur. PanAgora Persons may also report such matters directly to the CFTC or the SEC. <u>With respect to the subject matter hereof, in the event of any conflict between this Whistleblower Policy and the confidentiality agreements signed by all PanAgora Persons (the "</u>**<u>NDAs</u>**<u>"), the confidentiality provisions of PanAgora's fund investment documents, or any similar PanAgora documents, the terms of this Whistleblower Policy shall govern. For clarity, nothing in the NDAs prohibit PanAgora Persons from reporting possible violations of federal law or regulation to any governmental agency or entity, including but not limited to the U.S. Department of Justice, U.S. SEC, the CFTC, the U.S. Congress, or any agency Inspector General, or making other disclosures that are protected under the whistleblower provisions of federal law or regulation. PanAgora Persons do not need the prior authorization of PanAgora to make any such reports or disclosures and are not required to notify PanAgora that they have made such reports or disclosures.</u> 

The process for filing a formal complaint under this Policy at PanAgora is set forth below.

**<u>Reporting/Filing a Whistleblower Complaint at PanAgora</u>**

A PanAgora Person with concerns about misconduct or violations of the law at PanAgora shall report such matters to the Chief Compliance Officer (the "**CCO**") or to PanAgora's **Code of Ethics Oversight Committee**. They may be, but need not be, made anonymously. It may also be, but is not required to be, submitted on a confidential basis. In the case of confidential submissions, PanAgora will make commercially reasonable efforts to protect the complainant's identity, and all reports will be kept confidential, to the extent possible, consistent with the need to conduct a thorough and effective investigation to comply with applicable law and to participate in relevant investigative, administrative or judicial proceedings.

**<u>Ethics Line</u>**

PanAgora has access to a formal Ethics Line as an additional mechanism for a PanAgora Person to report an impropriety or conduct that is not in line with the company's value system. The Ethics Line is authorized to receive complaints or questions confidentially about alleged acts, omissions,

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improprieties, and broader systemic problems within the organization. The Ethics Line is available on an anonymous basis by calling 1-888-475-4210 or via the following url:

https://secure.ethicspoint.com/domain/media/en/gui/49934

**<u>Reporting/Filing a Whistleblower Complaint with the SEC or the CFTC</u>**

As noted above, a PanAgora Person with concerns about misconduct or violations of law at PanAgora may also report such matters directly to the SEC or the CFTC in accordance with applicable securities laws or the CEA.

**<u>Acting Lawfully</u>**

Whistleblowers shall act lawfully and shall not make false or misleading accusations when reporting any misconduct or violation pursuant to this Policy. Any PanAgora Person who knowingly and willfully makes any false, fictitious, or fraudulent statement or representation or uses any false writing or document knowing the writing or document contains any false, or fraudulent statement or entry, will not be protected by this Policy and may be subject to disciplinary action, up to and including termination of such PanAgora Person's position at PanAgora.

**<u>Review and Investigation</u>**

The CCO shall bring any matters reported under this policy to the immediate attention of the Code of Ethics Oversight Committee, who is responsible for the oversight, receipt, review, investigation, resolution and retention of all matters reported to PanAgora pursuant to this Policy. PanAgora may retain independent legal counsel, accountants, external auditors, and/or other professional advisors and may involve one or more PanAgora Persons, all in an effort to assist in and/or conduct the investigations and the analysis of the results of the investigations.

Upon receipt of a lawful complaint under this Policy, the Code of Ethics Oversight Committee will conduct an initial review and assessment of the complaint in a timely manner. Upon completion of the initial assessment, it will be determined what the scope of the investigation will be. Depending on the nature of the complaint made, the investigation will be monitored by the Code of Ethics Oversight Committee and such other PanAgora Persons and/or professional advisors as deemed necessary.

**<u>No Retaliation</u>**

PanAgora shall not retaliate or tolerate retaliation, whether direct or indirect, by any PanAgora Person against any PanAgora Person or group of PanAgora Persons who lawfully make(s) a Whistleblower complaint to, or provides assistance in connection with the investigation of, a Whistleblower complaint to PanAgora or the SEC or the CFTC.

No PanAgora Person shall suffer retaliatory consequences as a result of a lawful Whistleblower complaint. Retaliatory consequences are defined as discharge, demotion, suspension, threats,

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harassment, directly or indirectly, or discrimination in any other manner, as a result of a lawful act done by the Whistleblower.

Any PanAgora Person who retaliates against a PanAgora Person (or group of PanAgora Persons) who has lawfully submitted a Whistleblower complaint pursuant to this Policy, shall be subject to disciplinary action, up to and including termination of employment or association with PanAgora.

**\*\*\*** 

**This Policy is intended solely for the use of PanAgora in the management of its business and operations in compliance with applicable law. It is not intended to, and shall not under any circumstances, create any right or expectation in or on the part of any person, including without limitation any client or any interest holder in any client.** 

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**As of January 1, 2025** 

**PANAGORA ASSET MANAGEMENT, INC.** 

**("PANAGORA")** 

**PERSONAL TRADING POLICY** 

All PanAgora employees and certain other persons, included related persons (as set forth below) or consultants (each, an "Access Person"), whether working at PanAgora's premises or elsewhere, are subject to this Personal Trading Policy (the "Policy"). This Policy limits employees' personal securities transactions to guard against situations that could create an actual or apparent conflict of interest or facilitate the misuse of PanAgora's confidential information. As a result, the personal securities transactions of all PanAgora employees must comply with the Pre-Clearance Requirements and Reporting Requirements described below. The requirements of this Policy apply to the purchase or sale of securities within an Access Person's personal account or an account as to which the Access Person has a beneficial ownership.<sup>1</sup>

This Policy also applies to transactions by or on behalf of the employee's related persons, which include immediate family members (i.e., children, siblings, parents) residing in the same household and transactions executed in accounts over which the employee has sufficient influence to cause a transaction to be executed (i.e., trusts, investment clubs, etc.). Such individuals shall be included in the definition of Access Person as used in this Policy. While PanAgora will monitor the investment activity and personal trades of individual employees, it is ultimately the responsibility of each employee to ensure that he/she complies with this Policy.

**Policy Management Tool** 

In order to facilitate implementation of this Policy and streamline the collection of required information, PanAgora has implemented the FIS Employee Compliance Manager (formerly Protegent Personal Trading Assistant, referred to hereafter as "ECM"). ECM can be accessed via a browser at the following url: https://panagora.okta.com/

**Pre-Clearance Requirements** 

No PanAgora Access Person may purchase or sell a security in which he or she has Beneficial Ownership (as defined within this Policy) unless such transaction has been pre-cleared by the CCO or his or her designee. Personal trading requests of the CCO must be pre-cleared by a separate member of PanAgora's Code of Ethics Committee. All pre-clearance requests must be submitted to PanAgora using the ECM system. Requests will be approved or denied within 24 hours of receipt by the CCO or his or her designee. A pre-clearance is valid only for the day it is obtained; however, trades in securities listed on Asian or European stock exchanges, however, may be executed within one business day after pre-clearance is obtained. Pre-clearance is required for transactions involving all securities other than transactions involving the following (exceptions are identified with an asterisk\*):

• Money market instruments and open-end mutual funds (\*reporting is only
required for open-end mutual funds advised or sub-advised by PanAgora);

<sup>1</sup> "Beneficial ownership" includes ownership by any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares a direct or indirect financial interest in an account.

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• Broad-Based<sup>2</sup> exchange traded funds ("ETFs") or
exchange traded notes ("ETNs") (\*pre-clearance and reporting is required for ALL ETFs or ETNs advised or sub-advised by PanAgora as described in the
paragraph entitled "PanAgora Managed ETFs/ETNs" within the "Special Trading Rules" section);

• Transactions involving foreign currencies;

• Options contracts or futures contracts that reference a Broad-Based index;

• Direct obligations of the Government of the United States (i.e. U.S. Treasury bonds, notes and EE savings bonds);

• Bankers' acceptances, bank certificates of deposit, commercial paper and high-quality short-term debt
instruments, including repurchase agreements;

• Transactions in 529 Plan accounts;

• Transactions that are the result of an automatic dividend reinvestment plan;

• Cryptocurrencies (\*reporting may be required as stated in the "Cryptocurrencies" section); and

• Any security purchased in an account over which the Access Person does not have discretion, so long as the
conditions indicated in the "Discretionary Brokerage Arrangements" section\*.

All securities not specifically exempted in the section above require pre-clearance and reporting under this Policy. This includes, but is not limited to, the following:

• Any type or class of equity or debt security, including corporate bonds and municipal bonds;

• Any rights relating to a security, such as warrants and convertible securities;

• Closed-end mutual funds;

• ETFs or ETNs that are managed by PanAgora or that are not Broad-Based;

• Commodity derivatives, including commodity futures contracts; and

• Any security purchased through a private placement, including in a company, limited liability company,
partnership or limited partnership.

Throughout this Policy, securities that are designated above as either (i) subject to pre-clearance or (ii) not subject to pre-clearance but for which reporting is required shall be referred to as "Reportable Securities"

**PanAgora Pre-Clearance Approval Considerations** 

All requests for pre-clearance are reviewed by a member of PanAgora's compliance department. Requests will be reviewed to determine whether: (i) any orders to purchase or sell such security in a client account have been entered into PanAgora's order management system or is on PanAgora's Considered List<sup>3</sup>, and (ii) the security is on PanAgora's restricted list<sup>4</sup>. If any of the immediately preceding conditions is satisfied, or if the transaction would violate any of the Special Trading Rules specified below, the request will generally be denied, unless the Large/Mid-Cap Exemption is satisfied. Please note that the rules/exemptions spelled out below apply separately to PanAgora

<sup>2</sup> Broad-Based funds shall include those funds that contain exposure to no fewer than 10 underlying issuers. All other funds shall be subject to pre-clearance.

<sup>3</sup> The Considered List is a systematically generated list of securities that have a high near-term probability of being transacted in a PanAgora client portfolio.

<sup>4</sup> PanAgora's Code of Ethics restricted list shall include stock of Power Corporation of Canada and Great-West Lifeco Inc., as well as any other securities as determined by the CCO from time to time.

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Access Persons who are Investment Professionals and those that are not. The term "Investment Professional" shall refer to any PanAgora employee who serves in an analyst, portfolio manager, director, or Chief Investment Officer role and has a direct or indirect reporting relationship to a Chief Investment Officer.

<u>Large/Mid-Cap Exemption</u> 

If a Security seeking to be traded is in the process of being traded in a client account, or is on PanAgora's Considered List, and has a market capitalization (defined as outstanding shares multiplied by current price per share) of: (i) at least $2 billion if the Access Person seeking pre-clearance is not an Investment Professional, or (ii) at least $10 billion if the Access Person seeking pre-clearance is an Investment Professional, the Access Person will generally be approved to trade up to 1,000 shares of the security. For Investment Professionals, use of this exemption limits trading to a total of 1,000 shares of any single security over a 30-day period. In other words, while an Investment Professional may receive pre-clearance under this exemption for any given security many times over a 30-day period, the total number of shares traded during such period may not exceed 1,000 shares. For a fixed income security, the Large/Mid-Cap Exemption will generally allow the purchase of up to $100,000 principal amount over any consecutive 30-day period.

<u>Special Trading Rules</u> 

The following Special Trading Rules shall apply to all Access Person transactions subject to pre-clearance (rules that only apply to Investment Professionals are designated with an asterisk):

***60-Day Short Term Rule***—Access Persons may not sell a security at a profit within 60 days of purchase or buy a security at a price below that which the same security was sold within a period of 60 days.

***Excessive Trading Rule*** – In order to discourage excessive personal trading by PanAgora Access Persons, this Policy prohibits Access Persons from entering into more than 10 transactions in securities subject to pre-clearance in any given quarter. Excessive trading within PanAgora sub-advised open-end mutual funds is also prohibited. This rule applies to all trades in all accounts by an individual Access Person, in aggregate, including transactions made by any of the Access Person's family members that are subject to this Policy. For the purpose of calculating the number of trades in any quarter, trading the same security in the same direction (buy or sell) over a period of five business days will be counted as one transaction.

***7-Day Rule\****—Before any Investment Professional places an order to buy a Security for any PanAgora client portfolio that is managed by that Investment Professional's team, he or she must sell that security or related derivative security if he or she has purchased it in a personal account within the preceding seven calendar days. This rule does not apply to transactions that are eligible for the Large/Mid-Cap Exemption.

***Blackout Rule\****—No Investment Professional shall: (i) sell any security or related derivative security until seven calendar days have elapsed since the most recent purchase of that Security or related derivative Security by any PanAgora client portfolio managed by that Investment

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Professional's team; or (ii) purchase any security or related derivative security until seven calendar days have elapsed since the most recent sale of that security or related derivative security from any PanAgora Client portfolio managed by that Investment Professional's team. This rule does not apply to transactions that are eligible for the Large/Mid-Cap Exemption.

***Contra Trading Rule\****—Unless the transaction is eligible for the Large/Mid-Cap Exemption, no Investment Professional shall, without prior approval, sell a security held in any PanAgora client portfolio that is managed by that Investment Professional's team. Exceptions to this rule are available with the advanced written approval of the CIO of that Investment Professional's team as well as the CCO.

***PanAgora Managed ETFs/ETNs*** – All transactions by Access Persons involving ETFs or ETNs managed or subadvised by PanAgora require pre-clearance. In order to mitigate any apparent or actual conflicts of interest involving the timing of transactions, trading by PanAgora Access Persons will be limited to the first trading day of each month. In order to trade, Access Persons must seek pre-clearance at least five business days prior to the intended trading date which, as set forth above, must be the first trading day of the next month. Pre-clearance can be sought via ECM or by e-mailing a member of the Compliance department using the #PAM_PTA@panagora.com e-mail address.

**Reporting Requirements** 

In order to ensure that PanAgora can effectively monitor Access Person trading under this Policy, Access Persons must, within 10 days of commencing employment at PanAgora, provide via ECM, the following information (such information, the "Initial Holdings Report<sup>5</sup>"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A list of firms/brokerage accounts through which the Access Person holds, or has the ability to hold, securities,
including Reportable Securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A list of holdings of Reportable Securities contained within the accounts listed above; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A list of all securities governed by the policy not held in the brokerage accounts reported above (i.e.
investments in hedge funds, private equity funds, private placements, etc.).

At the time the Initial Holdings Report is submitted, the Access Person must also provide PanAgora with access to account information for all brokerage accounts included in the Initial Holdings Report via ECM electronic data feed<sup>6</sup>. The Initial Holdings Report must be current as of a date no more than 45 days prior to the date the person becomes subject to this Policy (i.e. the person becomes an "Access Person" as defined in Rule 204A-1). PanAgora reserves the right to require that any brokerage accounts opened by an Access Person after joining PanAgora be with a brokerage firm that has the ability to deliver information via electronic data feed to ECM.

<sup>5</sup> The Initial Holdings Report must contain the following information in order to comply with Rule 204A-1 of the Advisers Act: (i) The title and type of security, and as applicable the exchange ticker symbol or CUSIP number, number of shares, and principal amount of each reportable security in which the access person has any direct or indirect beneficial ownership; (ii) The name of any broker, dealer or bank with which the access person maintains an account in which any securities are held for the access person's direct or indirect benefit; and (iii) The date the access person submits the report. 

<sup>6</sup> For accounts held with brokers where a ECM electronic feed is not available, the Access Person must arrange to have duplicate copies of account statements sent directly to PanAgora.

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<u>Annual Reporting</u> 

Annually, within 15 days of the end of the calendar year, all Access Persons must complete a holdings certification through ECM. The information in the certification must contain the same information that is in the Initial Holdings Report (described above) and must be current as of no more than 45 days prior to the date of provision, generally as of December 31.

<u>Quarterly Reporting</u> 

Within 30 days of the end of each calendar quarter, all Access Persons must complete a certification through ECM which reports all transactions involving Reportable Securities<sup>7</sup>. Any private securities transactions (which may need to be manually entered into ECM) must also be included on the certification. If no securities transactions were conducted during the relevant quarter, a certification must be completed stating this fact.

**Discretionary Brokerage Arrangements** 

A transaction does not need to be pre-cleared if it takes place in an account over which the Access Person does not have discretion. Accounts that will be considered for this exclusion are only those for which the Access Person's broker or investment advisor has complete discretion (a "Discretionary Account") and the following conditions are met: (i) the Access Person certifies annually in writing that he or she has no direct or indirect influence over the transactions in the Discretionary Account and is not aware of the transactions in the Discretionary Account prior to their execution; and (ii) holdings and transactions in the Discretionary Account are included in the Access Person's quarterly and annual certifications described elsewhere in this Policy.

**Cryptocurrencies** 

Any PanAgora Access Person who holds or wishes to purchase, acquire or sell any asset that is issued and transferred using distributed ledger or blockchain technology, including, but not limited to, virtual currencies, cryptocurrencies, digital "coins" or "tokens" ("Digital Assets"), should consult with the CCO as to whether such Digital Asset would be considered a security for purposes of this policy. A Digital Asset is likely to be considered a security if it is offered and sold as an investment contract. The CCO utilizes the Framework for "Investment Contract" Analysis of Digital Assets published by the SEC's Strategic Hub for Innovation and Financial Technology in analyzing if a Digital Asset would be considered a security for purposes of this Policy. If the CCO determines that such Digital Asset should be considered a security, the Digital Asset will be subject to the reporting requirements of this Policy. However, since PanAgora does not trade Digital Assets for client accounts, Access Persons do not need to preclear Digital Assets prior to

<sup>7</sup> The quarterly transaction certification must contain the following in order to comply with Rule 204A-1 of the Advisers Act: (i) The date of the transaction, the title, and as applicable the exchange ticker symbol or CUSIP number, interest rate and maturity date, number of shares, and principal amount of each reportable security involved; (ii) The nature of the transaction (i.e., purchase, sale or any other type of acquisition or disposition); (iii) The price of the security at which the transaction was effected; (iv) The name of the broker, dealer or bank with or through which the transaction was effected; and (v) The date the report is submitted. 

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transacting, unless the transaction is part of an initial coin offering ("ICO"), participation in which is prohibited under this Policy.

**Prohibited Transactions** 

PanAgora Access Persons are prohibited from entering into the following transactions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Short Selling* – Access Persons are prohibited from entering into short sale transactions in their
personal accounts. This prohibition does not prevent access persons from using inverse ETFs in order to obtain short exposure to a Broad Based index.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *IPO Participation* – Access Persons are prohibited from participating in initial public offering
("IPO") transactions (including ICO transactions). Participation in other types of limited offerings (such as hedge funds, private equity funds, and similar private placements) is permitted subject to pre-clearance as indicated elsewhere in this Policy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Good until Cancelled Orders* – Access Persons are prohibited from entering into Good Until Cancelled
Orders because all pre-clearance approvals obtained under this Policy are contingent upon the execution of the transaction on the day of approval. Orders that are good until cancelled have a high probability
of violating this requirement.

**Required Reversals** 

PanAgora maintains the right to require any employee, consultant or related person of any of the foregoing to reverse, at such person's own expense, a transaction which is deemed by PanAgora to be in conflict with this Policy.

**All PanAgora Access Persons subject to this Policy will trade at their own risk, as this Policy may prevent an Access Person from disposing of an investment when desired. Violations of this Policy are subject to possible sanctions (including disgorgement of any gains), prohibitions on personal trading, and/or termination of employment or consulting arrangement. PanAgora expects all employees and consultants to comply with the spirit of this Policy as well as the specific rules contained in the Policy. All employees and consultants must report promptly to the CCO any violations of the PanAgora Personal Trading Policy of which they become aware.** 

**\*\*\*** 

**This Policy is intended solely for the use of PanAgora in the management of its business and operations in compliance with applicable law. It is not intended to, and shall not under any circumstances, create any right or expectation in or on the part of any person, including without limitation any client or any interest holder in any client.** 

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**As of January 1, 2025** 

**PANAGORA ASSET MANAGEMENT, INC.** 

**("PANAGORA")** 

**INSIDER TRADING POLICY** 

**Governing Law:** Section 10(b) of the Securities Exchange Act of 1934, as amended (the "**Exchange Act**"), Rule 10b-5 promulgated under the Exchange Act ("**SEC Rule 10b-5**"), Sections 204A and 206 of the Investment Advisers act of 1940, as amended (the "**Advisers Act**"), Rule 204A-1 of the Advisers Act, Section 21A of the Exchange Act, Section 20(a) of the Exchange Act, and Section 20(d) of the Exchange Act.

Other than a prohibition on trading ahead of customer orders, the Commodity Exchange Act (the "CEA"), Commodities Futures Trading Commission ("CFTC") regulations, and National Futures Association ("NFA") and exchange rules do not generally prohibit trading futures based on material, non-public information. Insider trading and other forms of trading based on material, non-public information that are violations of SEC Rule 10b-5 would also be violations of NFA Compliance Rule 2-37(a).The term "insider trading" is not defined in the federal securities law, but has developed in the case law and SEC enforcement decisions to refer to certain illegal trading while a person is in possession of material nonpublic information (referred to herein as "**MNPI**", and further described below). **General Rule.** PanAgora and PanAgora Employees (defined below) are forbidden from engaging in, or helping others engage in, insider trading, whether for the account of PanAgora, their own accounts or any other account. More specifically, PanAgora Employees are prohibited from:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Trading in, or participating in any investment decision making process with respect to, securities while in
possession of related MNPI;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Improperly communicating MNPI to others;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Recommending the purchase or sale of securities while in possession of related MNPI; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Providing substantial assistance to someone who is engaged in any of the above activities.

In general these restrictions shall last until the MNPI has been publicly disclosed to and absorbed by the relevant trading markets. This Policy applies to any employee of PanAgora (a "**PanAgora Employee**" or "**Employee**"). In addition, the General Counsel may determine, in his/her sole discretion, that any other person who provides investment advice on behalf of PanAgora and is subject to PanAgora's supervision or control is to be treated for purposes of this Policy no different than a PanAgora Employee, provided that such person: (i) has access to nonpublic information; or (ii) is involved in making securities recommendations to PanAgora Clients (defined as any separately managed account, pooled investment vehicle or other entity advised by PanAgora).

**What is Material Nonpublic Information?** Information must be both "material" and "nonpublic" for there to be insider trading liability.

"Material Information" is generally considered information for which there is a substantial likelihood that a reasonable investor would consider the information important, but not necessarily determinative, in making investment decisions, or information whose possession would be reasonably certain to have a material effect on the price of a "security" (see below).

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Information is considered "nonpublic" until it has been broadly disclosed to investors in the marketplace and absorbed by trading markets. Broad disclosure may include, for example, the inclusion of the information in a report filed with the SEC, or in a publication of general circulation such as, without limitation, Dow Jones, Reuters, Bloomberg, or The Wall Street Journal.

As noted above, MNPI can relate to any company issuing securities as well as to any other confidential information, including "market information" concerning securities trading by another person.

**Types of MNPI.** There are several different types of MNPI that may come into the possession of a PanAgora Employee. These prominently include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• PanAgora's own trading information, i.e., buy and sell recommendations, plans and open orders generated by
PanAgora's investment professionals and investment models. PanAgora's general policies on confidentiality require that this information be disclosed outside the firm only in connection with actual orders or otherwise on a need-to-know basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Information that comes to a PanAgora Employee through fiduciary relationships or relationships of trust and
confidence, such as directorships, consulting relationships and certain business relationships. In general, PanAgora does not use consultants which may provide or purport to provide MNPI. Also, PanAgora does not generally expect to receive
confidential information of any sort from the dealers and brokers with whom it trades. Notwithstanding the foregoing, there may be situations in which information communicated by a consultant or a dealer might be regarded as having been communicated
in trust and confidence under the particular circumstances of the communication, including claims of confidentiality made by the communicating party or circumstances under which the communication could be characterized as a "tip". If a
PanAgora Employee has any concern that information may have been received in a communication that might be regarded as MNPI, whether in knowing breach of a duty of trust or confidence or not, the Employee should immediately review the matter with
PanAgora's General Counsel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• In the context of a PanAgora Employee's trading for his or her own account, it is also possible that the
PanAgora Employee will encounter MNPI. Trading on the basis of this information is prohibited. <u>See also</u> PanAgora's Personal Trading Policy. The inappropriate disclosure of such information is also prohibited, both under applicable law
and, in the case of information of which you were aware as a result of your association with PanAgora, by the confidentiality agreements between PanAgora and each PanAgora Employee.

**Types of Insider Trading.** Insider trading law has developed well beyond imposing liability only on true corporate insiders. Because of this complicated development, it is necessary to understand the different types of insider trading.

*"Classic" Insider Trading*. In the classic case, true corporate insiders (officers, directors, controlling shareholders) who are in possession of MNPI commit insider trading when they breach

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their duty to either publicly disclose that information or refrain from trading. The classic case also reaches "temporary insiders" who are lawyers, investment bankers, accountants and other persons who enjoy a confidential relationship with an issuer. PanAgora would be considered a temporary insider of an entity it advises or for which it performs other services, because PanAgora Clients expect PanAgora to keep any information disclosed to it confidential.

*Liability for Tippers and Tippees*. Growing out of the classic theory is the concept of insider trading liability for "tippers"—insiders who communicate MNPI, directly or indirectly through a chain of tips, to others who trade (friends, relations, business associates, "ring" members, etc.)—and "tippees"—persons who know or should know that they have received an improper tip, directly or through a chain of tips.

*Misappropriation*. In addition to the classic theory, the other major theory of insider trading is misappropriation. Under this theory, trades by any person who breaches a duty of trust or confidence in obtaining MNPI or in trading, or who knows or should know that information constituting MNPI has been communicated to him or her directly or indirectly through a chain, as a result of a breach of someone else's duty of trust or confidence, constitute insider trading.

It is important to note that, under the misappropriation theory, the MNPI in question does not need to be from, or concern, an issuer of securities. The information can relate to steps taken or planned by a third party. Thus, confidential information about another person's trading plans for the issuer's security (often referred to as "market information") or plans to propose a merger transaction to the issuer can constitute MNPI even though the issuer itself is not aware of the information.

*The Special Case of Tender Offers*. Nonpublic information about a proposed or pending tender offer represents an especially sensitive category of market information. Trading while in possession of MNPI concerning a tender offer where the trader knows or has reason to know that the information is nonpublic and has come directly or indirectly from the target, bidder or their directors, officers or certain other agents, can be a violation of law even in the absence of a breach of duty. Such violations are commonly thought of as a form of insider trading but are in fact dealt with separately in another section of related law (Section 14(e) of the Exchange Act and Rule 14e-3 thereunder).

**What Instruments are Covered by the Prohibition on Insider Trading?** Traditionally, insider trading law applies to all transactions in "securities," including stocks, bonds and warrants issued by both public companies and private companies ("issuers"). The law has been extended to apply to any purchase or sale of a put, call, straddle, option, privilege or security-based swap agreement with respect to a security, regardless of whether the issuer is a party to such derivative position. At least one court has held that security-based swap agreements can include certain credit default swaps.

Certain types of derivatives, including futures and "swaps" (as opposed to "security-based swaps"), are regulated by the CFTC under the CEA. This would include, for example, futures and swaps referencing physical commodities, indices, interest rates, or foreign currencies. While the CEA contains specific prohibitions on willful deception, it has traditionally placed less emphasis on the prohibition of insider trading in favor of price discovery in the market. Importantly,

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however, the Dodd-Frank Act of 2010 calls for more coordinated regulation of the different financial instruments regulated by the SEC and the CFTC and establishes general anti-fraud principles which may come to be applied more broadly to all or a portion of the range of financial instruments in which PanAgora may invest.

PanAgora seeks to avoid association with insider trading under existing or potentially emerging law. For this reason, references to "security" in this policy are deemed to refer to all financial instruments in which PanAgora trades, including, for example, swaps, etc.

**What are the Potential Penalties for Insider Trading?** Penalties for trading on the basis of MNPI or communicating the same to another party in violation of applicable laws are severe, for both individuals and their employers (like PanAgora) involved in such unlawful conduct. Persons may be subject to some or all of the penalties below, even if they may not personally benefit from the violation. Such penalties are in addition to significant reputational damage to individuals and their employers that can arise from mere allegations of such violations. Penalties may include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• civil injunctions (such as a lifetime bar from the investment industry for individuals and their employers);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• disgorgement of profits;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• jail sentences;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• fines for persons who committed the violations of up to three times the profit gained or loss avoided; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• fines for the employer or other "controlling person" of up to the greater of $1,000,000 or three
times the amount of the profit gained or loss avoided.

**Procedures to Implement PanAgora's Insider Trading Policy.** The following procedures have been established to aid in detecting and preventing insider trading. All PanAgora Employees must follow these procedures or potentially risk serious sanctions, including dismissal, substantial personal liability and criminal penalties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Disclosure of All Relevant Fiduciary Relationships,* PanAgora Employees must disclose positions as
directors or trustees of any entities. The Chief Compliance Officer, consulting with the General Counsel, will consider whether any such service by a PanAgora Employee shall require the securities of any entity to be added to the "Restricted
List" (see below).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Report of Possible Receipt of MNPI*. PanAgora Employees who believe that they may have received MNPI shall,
in addition to refraining from trading in the related securities, immediately notify the Chief Compliance Officer and/or General Counsel of such receipt and otherwise refrain from disseminating such information within or outside the firm.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Requirement to " <u>Ask First</u>.*" As noted above, there can be difficult
judgment calls in the area of insider trading, including with respect to the questions of whether information is material and nonpublic, and whether it has been received, directly or indirectly, in breach of a duty of trust or confidence. **Given the complexity of the issues in this area, PanAgora has adopted a procedure of " <u>Ask First</u> ": if a PanAgora Employee has any question as to the propriety of any possible action that can be construed as a violation of the rules regarding insider trading, such question must first be discussed with** 

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 **PanAgora's General Counsel and/or Chief Compliance Officer and no one else except those persons expressly designated by the General Counsel before engaging in any conduct which may result in a violation of laws or PanAgora policies governing insider trading.** <br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Evaluation of Possible MNPI by the General Counsel.* The General Counsel shall consider whether potential
MNPI received by a PanAgora Employee is in fact material and nonpublic, in light of the standards described above, and may have been communicated in breach of a duty of trust or confidence or through a chain of communications involving such a
breach.

In the event that the General Counsel believes that a PanAgora Employee has received MNPI in breach of a duty of trust or confidence or through a chain of communications involving such a breach, the General Counsel and/or Chief Compliance Officer shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Restriction on Trading*. Immediately instruct the relevant PanAgora Employees not to purchase or sell
related securities on behalf of PanAgora, any client of PanAgora or any other person, including themselves, until the General Counsel instructs otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Restriction on Communication*. Immediately instruct the relevant PanAgora Employees not to communicate the
information to any person inside or outside PanAgora, until the General Counsel instructs otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Restricted List*. Place the related securities on the "**Restricted List** ". The Chief
Compliance Officer will establish and maintain an up-to-date restricted list of securities in which neither PanAgora transactions nor personal transactions of PanAgora
and Employees will be maintained (the "Restricted List"). In general, the Restricted List will include entities about which PanAgora possesses MNPI. Securities on the Restricted List shall be held in strict confidence by persons
within PanAgora knowing the contents of the Restricted List and shall not be disclosed under any circumstances to persons outside of PanAgora. The presence of a security on the Restricted List shall be disclosed within PanAgora only on a need-to-know basis in connection with placement of PanAgora trades through the trading desk or preclearance of personal trades.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Restricted Access to MNPI*. MNPI in a PanAgora Employee's possession other than information
originating within PanAgora may not be communicated to anyone, including persons within PanAgora (except as provided above). Additionally, care should be taken that such information is kept secure. For example, where appropriate, physical files
containing MNPI should be sealed, and access to computer files containing MNPI should be encrypted, password protected or otherwise protected, secured and restricted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *MNPI Not Sought*. PanAgora does not and PanAgora Employees shall not, seek to obtain MNPI. Information
should never be sought under circumstances which would result in breaches of a confidence or other fiduciary relationships or relationship of trust or confidence. Information obtained as a result of ordinary investment analysis, including direct
inquiry of persons authorized to speak to investors on behalf of a corporate or

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government issuer, generally is not presumed to involve a breach of trust or confidence. However, if PanAgora Employees have any doubt about the circumstances or substance of any communication, they should promptly discuss the matter with the General Counsel before taking action.

Further, PanAgora does not, and PanAgora Employees shall not, allocate brokerage with a view to receiving MNPI.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Consultant Use*. Any arrangement to obtain information from a third-party providing investment analysis
that is not generally available to market participants for a fee must first be approved by the General Counsel. The General Counsel will evaluate the proposed consultant's sources and methods for obtaining information in deciding whether to
approve the arrangement. Notwithstanding any such approval, PanAgora Employees shall continue to evaluate any information received from consultants and refer any questions concerning possible receipt of MNPI to the General Counsel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Alternative Data*. As a quantitative asset manager, the primary input to PanAgora's research process
is data procured from third parties. The risk of violation of this Policy stemming from the use of conventional data, such as security reference, pricing and fundamental data, is low. However, the emerging use of so-called "alternative data" by PanAgora and other investment advisers introduces additional risk. Notably, risk may be introduced where providers of alternative data do so without compliance
policies and procedures that are reasonably designed to ensure that data does not contain MNPI or violate contractual or other legal obligations. In response to this heightened risk, PanAgora has established a diligence process that shall be applied
to certain data providers that the firm may do business with. Any investment professional that wishes to subscribe to a new data service, must consult with PanAgora's legal and compliance department to ensure that any required diligence can be
performed prior to use of such data.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Professional Standards of Conduct*. PanAgora procedures for handling MNPI are rooted in PanAgora's
general standards for professional and ethical conduct. These standards dictate for example, that sensitive PanAgora business, of any type, should not be discussed in public places, such as elevators, trains and/or airplanes, where it might be
overheard.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Other Procedures*. From time to time, if appropriate, the General Counsel may designate specific procedures
to be followed in connection with the handling of certain information, including the use of code names for sensitive projects, special document controls, and procedures for outside contacts and third-party confidentiality.

**This Policy is intended solely for the use of PanAgora in the management of its business and operations in compliance with applicable law. It is not intended to, and shall not under any circumstances, create any right or expectation in or on the part of any person, including without limitation any client or any interest holder in any client.** 

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**As of January 1, 2025** 

**PanAgora Asset Management, Inc. ("PanAgora")** 

**Gifts and Entertainment Policy** 

**<u>Gifts Policy</u>**

Other than as permitted under this policy, no "**PanAgora Individual**" (defined as employees and certain consultants of PanAgora) shall accept anything of material value<sup>8</sup> from any broker-dealer, financial institution, corporation or other entity, any existing or prospective supplier of goods or services with a business relationship to PanAgora, any Client, prospective Client, investor or prospective investor in any PanAgora Client, or any company or other entity whose securities are held in or are being considered as investments for any other PanAgora Client accounts. The term "**Client**" refers to any separately managed account or investment fund for which PanAgora is the investment manager or investment adviser. Included are gifts, favors, preferential treatment, special arrangements, or access to special events. Also, gifts may not be so frequent that they could reasonably be regarded by others as improper or comprising a pattern of gifts.

This is intended to be a statement of general principle. While more specific guidelines are set out below, those guidelines should be read and applied in a manner consistent with this general principle.

**<u>Foreign Corrupt Practices Act</u>**

The Foreign Corrupt Practices Act ("FCPA") prohibits the direct or indirect giving of, or a promise to give, "things of value" in order to corruptly obtain a business benefit from an officer, employee, or other "instrumentality" of a foreign government. Companies that are owned, even partly, by a foreign government may be considered an "instrumentality" of that government. In particular, government investments in foreign financial institutions may make the FCPA applicable to those institutions. Individuals acting in an official capacity on behalf of a foreign government or a foreign political party may also be "instrumentalities" of a foreign government.

The FCPA includes provisions that may permit the giving of gifts and entertainment under certain circumstances, including certain gifts and entertainment that are lawful under the written laws and regulations of the recipient's country, as well as bona-fide travel costs for certain legitimate business purposes. However the availability of these exceptions is limited and is dependent on the relevant facts and circumstances.

Civil and criminal penalties for violating the FCPA can be severe. PanAgora Individuals must comply with the spirit and the letter of the FCPA at all times. The provisions of this Policy are designed to ensure compliance with the FCPA and similar laws.

**Gifts to a PanAgora Individual May Not Exceed $100.** A PanAgora Individual may not accept gifts exceeding $100 in value or with an aggregate value of more than $100 in any year from any one source, i.e., individual, entity or firm doing business or seeking to do business with PanAgora (a "**Service Provider**"). Any PanAgora Individual who is offered or receives an item exceeding $100 in value by a Service Provider is prohibited from accepting such gift and must report the details to the CCO, and, if necessary, return the gift. Please note: Any entertainment event where the host is not in attendance is treated as a gift and is subject to the $100 per year limit and per source limit.

<sup>8</sup> While this reference to anything "of material value" is broadly intended to refer to a tangible gift, it is intentionally broad in that this policy is intended to refer to anything of material value that may be conveyed to a PanAgora employee or to a third party. For example, this could refer to a loan granted on more favorable terms than available in the market or to access to preferable brokerage terms. When in doubt as to whether an arrangement could be construed as a gift under this policy, please consult PanAgora's CCO or a member of the compliance or legal team. 

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**Gifts Must be Reported.** Any PanAgora Individual who is offered or receives a gift exceeding $100 in value from a Service Provider must report the item to the CCO or his designee for return and record keeping. Any PanAgora Individual who receives a gift below the $100 threshold must report the item in the ECM system as soon as practicable, but no later than 20 business days following receipt; provided, however, that no reporting is required for *de minimis* gifts below $25 in value. Compliance will monitor to ensure that PanAgora Individuals are not in receipt of gifts that in total exceed the $100 threshold from a single source in a year. Failure to report a gift will be treated as a violation of the Code of Ethics.

**Gifts to a Department/Group May Not Exceed $250.** Gifts that are comprised of items such as cookies, candies, fruit or other items typically shared among a department/group may be accepted if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The value of such gift is reasonably thought to be $250 or less: and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Such gift is in fact put in a central location so that it may be shared by all personnel of PanAgora or a
department or group thereof (e.g., the trading group, operations group, the IT group, etc.).

**No Gifts May be Given to Clients, Potential Clients, Investors or Potential Investors in Clients without Pre-Approval.** To ensure that any PanAgora gifts given by a PanAgora Individual, in his or her capacity as such, are appropriate, and not in violation of the FCPA and other similar laws, all gifts to be given to any Client, potential client, investor or potential investor in any fund or other investment vehicle managed by PanAgora must receive prior written approval of the CCO or the designee thereof. Additionally, copies of all receipts for such gifts must be submitted to the CCO, who shall maintain a log and shall record such gifts in the books and records of PanAgora.

**Gifts to Service Providers.** With respect to the giving of gifts to any Service Provider, any PanAgora Individual who desires to offer or give a gift exceeding $100 in value must obtain prior written approval from the CCO. Any PanAgora Individual who desires to offer or give a gift below the $100 threshold must report the item in the ECM system as soon as practicable, but no later than 20 business days following the giving of such gift; provided, however, that no reporting is required for *de minimis* gifts below $25 in value.

Any entertainment event provided to or given by a PanAgora Individual where the host is not in attendance is treated as a gift and is subject to the $100 per year per source limit detailed above.

**<u>Entertainment Policy</u>**

Entertainment may not be accepted by a PanAgora Individual (or family member or friend thereof, in such capacity) from any Service Provider if such entertainment would cause, or reasonably could be viewed as having the likely effect of causing, the PanAgora Individual to act in a manner inconsistent with the best interests of PanAgora or any Client of PanAgora. PanAgora's Entertainment Policy is designed to permit reasonable, ordinary business entertainment, but prohibit any events which may be perceived as extravagant or involving lavish expenditures.

This is intended to be a statement of general principle. While more specific guidelines are set out below, those guidelines should be read and applied in a manner consistent with this general principle.

**Definition of Entertainment**. Typically, entertainment involves a PanAgora Individual's attendance (and/or the attendance of one or more of the PanAgora Individual's family members or friends) at a sporting, cultural, social or other event with a representative of a Service Provider. Thus, for example, attending a baseball game with an employee of a Service Provider or being taken out to dinner by an employee of a Service Provider would each constitute "entertainment".

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Please Note: tickets, dinners and other similar items will be considered a "gift" (and not "entertainment") if a representative of the Service Provider will not be accompanying the PanAgora Individual to the event. Please consult the Gifts Policy with respect to limitations on gifts.

**Permissible Entertainment.** In general, entertainment that is customary, reasonable occasional and appropriate will be permitted, provided that it is appropriate for the business relationship that is intended to be furthered by the entertainment. Any PanAgora Individual attending any gatherings or entertainment event must disclose a meal or entertainment to Compliance in the ECM system within 20 business days of the event. Failure to report entertainment will be treated as a violation of the Code of Ethics.

**Entertainment Requiring Reporting*.*** Occasional lunches, dinners, cocktail parties, or comparable gatherings conducted for business purposes are permitted without pre-clearance. For example, occasional attendance at group functions sponsored by sell-side firms or related Service Providers is permitted where the function relates to investments or other business activity. Attendance must be reported to Compliance, although it may be after the fact, and should be as soon as reasonably practicable with receipts, when possible, or good faith estimates, otherwise. Occasional attendance at these functions is not required to be counted against the limits described below. Meals and entertainment that are part of the regular program at an investment conference (i.e., open to all participants) are not subject to the limits. Meals that are part of a meeting and/or a conference do not require reporting. In the discretion of the CCO, the CCO may assign a value to seminar/conference-related meals equal to a reasonable estimate of their value, as it is generally impractical to obtain from the Service Provider a per-head breakdown of costs and expenses.

Other entertainment events, such as, sporting events, theater, movies, concerts, or other forms of entertainment <u>conducted for business purposes</u>, are permitted only under the following conditions:

a) The host must be present for the event.

b) The value of the entertainment event provided to the PanAgora Individual may not exceed $250 (per participating
individual), not including the value of any meals that may be provided to the PanAgora Individual before or after the event. If the value of the entertainment provided exceeds the $250 limit, the event must be pre-cleared by a member of PanAgora's compliance department in advance.

**Entertainment Source Limitations.** A PanAgora Individual may not accept entertainment events under this provision more than six times a year and not more than two times in any year from any single source.

**Exceptions**. All exceptions must be approved in advance by written request to the CCO.

**No Entertainment May be Provided to Clients, Potential Clients, Investors or Potential Investors in Clients without Pre-Approval.** Because the provision of entertainment would likely constitute "things of value" under FCPA and similar laws, all entertainment provided to any Client, potential client, investor or potential investor in any fund or other investment vehicle managed by PanAgora must receive prior written approval of the CCO or the designee thereof. Additionally, copies of all receipts from such events must be submitted to the CCO, who shall maintain a log and shall record such events in the books and records of PanAgora.

**Specific Prohibitions.** 

1. Any entertainment event attendance which would reflect badly on PanAgora as a firm of the highest fiduciary and ethical standards. For example, events involving adult entertainment or gambling must be avoided;

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2. PanAgora must pay directly (or reimburse the sponsor) for the cost of any travel or lodging, and, in some cases, reasonable out-of-pocket costs for meals when entertainment involves travel such as attendance at a seminar or conference, and a PanAgora Individual must get approval to attend from their supervisor in advance. Non-reimbursed payment by a third party of the cost of transportation to a location outside the PanAgora Individual's metropolitan area, lodging while in another location, and any meals not specifically approved by the CCO, are prohibited; and

3. No PanAgora Individual may solicit any gift or entertainment from any person, even if the gift or entertainment, if unsolicited, would be permitted.

**When in Doubt – Check with Compliance.** As with any of the provisions of PanAgora's Code of Ethics, a sincere belief by the PanAgora Individual that he/she was acting in accordance with the requirements of this Policy will not satisfy his/her obligations under the Policy. Therefore, a PanAgora Individual who is in doubt concerning the propriety of any gift or entertainment should seek a prior written determination from the CCO.

**\*\*\*** 

**This Policy is intended solely for the use of PanAgora in the management of its business and operations in compliance with applicable law. It is not intended to, and shall not under any circumstances, create any right or expectation in or on the part of any person, including without limitation any client or any interest holder in any client.** 

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**As of January 1, 2025** 

**PanAgora Asset Management, Inc. ("PanAgora")** 

**Political Contribution Policy** 

**<u>Overview</u>**

Rule 206(4)-5 of the Investment Advisers Act of 1940 (the "**Rule**") prohibits an investment adviser, among other things, from receiving compensation for providing advisory services to a Government Entity (as defined below) for two years after the adviser or its employees make a Contribution (as defined below) to certain elected officials or candidates of such entity. Contributions to certain elected officials or candidates for political office made by PanAgora or its employees may affect PanAgora's ability to provide investment advisory services for compensation to Government Entity clients, including pension plans and employees, in certain jurisdictions.

The Rule may also affect PanAgora's ability to provide investment advisory services for compensation if PanAgora or any of its Covered Associates (as defined below) coordinates or solicits any person or political action committee (PAC) to make any Contribution to an "**Official**" (defined as any person who is a holder of, or a candidate or successful candidate for, elective office of any Government Entity) to whom PanAgora is providing or seeking to provide investment advisory services, or to a political party.

Under the Rule, a "**Covered Associate**" of an investment adviser is defined as: (i) any general partner, managing member or executive officer, or other individual with a similar status or function; (ii) any employee who communicates, directly or indirectly, with a Government Entity on behalf of PanAgora for the purpose of obtaining or retaining advisory services , and any person who supervises, directly or indirectly, such employee; and (iii) any political action committee controlled by the investment adviser or by any of its Covered Associates. For purposes of this Policy, the Chief Compliance Officer may designate one or more individuals as "Covered Associates" if such individuals' current or contemplated activities on behalf of PanAgora are reasonably likely to cause him or her to become a "Covered Associate." PanAgora reserves the right to exclude from the definition of "Covered Associate" any individual it determines not to be a "covered association" within the meaning of the Rule.

Under the Rule, a "**Contribution**" is any gift, subscription, loan, advance or deposit of money or anything of value<sup>9</sup> made for (i) The purpose of influencing any election for Federal, State or local office; (ii) Payment of debt incurred in connection with any such election; or (iii) Transition or inaugural expenses of the successful candidate for State or local office.

Under the Rule, a "**Government Entity**" is any State or political subdivision of a State, including: (i) Any agency, authority, or instrumentality of the State or political subdivision; (ii) A pool of assets sponsored or established by the State or political subdivision or any agency, authority or instrumentality thereof, including, but not limited to a "defined benefit plan" as defined in section 414(j) of the Internal Revenue Code (26 U.S.C. 414(j)), or a State general fund; (iii) A plan or

<sup>9</sup> This shall include, for example, volunteer work or hosting an event for an Official of a Government Entity. For the avoidance of doubt, any paid or volunteer work to assist an Official or Government Entity shall constitute a contribution subject to preclearance under this Policy.

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program of a government entity; and (iv) Officers, agents, or employees of the State or political subdivision or any agency, authority or instrumentality thereof, acting in their official capacity.

The Rule does not apply to Contributions of $350 or less, per election, to any Government Entity for whom the contributor is allowed to vote, or to Contributions of $150 or less, per election to any other Government Entity. Such *de minimis* thresholds will generally be available to any PanAgora employee seeking pre-clearance under this Policy.

**<u>Policy</u>**

*<u>Corporate Contributions</u>*

PanAgora will not make corporate Contributions that are prohibited under applicable law. In addition to complying with applicable law, the Chief Compliance Officer must approve, in advance, any proposed Contribution by PanAgora.

To ensure that PanAgora is in compliance with these laws and as a matter of policy, all employees must comply with the following requirements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• No corporate assets (including the PanAgora name), funds, facilities, or personnel may be used to benefit any
candidate, campaign, political party, or political committee, including in connection with a fundraiser, without prior approval by the Chief Compliance Officer or his or her designee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If employees anticipate causing any corporate funds or assets (such as corporate facilities or personnel) to be
used in connection with their volunteer activity, they must obtain pre-approval, as described above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Employees should not seek or approve reimbursement from PanAgora for any Contribution expenses without fully
understanding these requirements. Any Contribution for which an employee seeks reimbursement from PanAgora is considered a Contribution by PanAgora and is subject to these requirements.

*<u>Employee Contributions</u>*

If an employee chooses to participate in the political process, he or she must do so as an individual, not as a representative of PanAgora.

Prior to making any Contribution to an elected official, a candidate for office, a political party or a PAC, all employees of PanAgora must obtain prior approval from PanAgora's Chief Compliance Officer. This policy and preclearance requirement also apply to contributions made by any immediate family member (i.e. spouse, child, sibling, parent) of a PanAgora employee who resides in the same household as the employee.

For any jurisdiction, in no case shall an employee of PanAgora direct a Contribution of a family member or use other means to indirectly make a Contribution requiring pre-clearance under this Policy if made directly by the employee. Furthermore, Covered Associates may not coordinate or solicit Contributions by other persons or PACs to Officials of Government Entities, and may not

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direct other individuals, including PanAgora employees, to make Contributions that would be prohibited under this Policy.

*<u>Other Provisions</u>*

In addition to the pre-clearance requirements noted above:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Prior to their retention, any person who is hired by PanAgora must disclose all political contributions made in
the past two years that fall under the purview of this Policy. All employees will be asked to regularly certify as to their compliance with this Policy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• In addition to the above disclosure, PanAgora shall require regular certifications to be made by all employees as
to their compliance with this Policy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• With respect to any political contributions made in violation of this Policy, PanAgora's Chief Compliance
Officer shall have the right to request that an employee request a refund of the amount contributed in order to allow PanAgora to rely on the Rule's so-called "Returned Contribution"
exemption.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The CCO shall maintain a log of all violations of this Policy, including any remedial actions taken. This and all
other recordkeeping requirements of the Rule are addressed in PanAgora's Record Retention Policy contained in the firm's Compliance Manual.

While the general topic of using third-party solicitors is covered by a separate compliance policy, the proposed use of a non-affiliated third-party solicitor or placement agent by PanAgora to solicit government business on behalf of PanAgora must be approved in advance by PanAgora's Chief Compliance Officer.

*<u>Gifts to Public Officials</u>*

Employees must obtain pre-approval from the Chief Compliance Officer prior to providing any gift, including meals, entertainment, transportation and lodging, to any Official or employee of a Government Entity. There are certain *de minimis exceptions* for business meals and entertainment provided to Officials or employees of a Government Entity in connection with PanAgora's business. These exceptions to the pre-clearance requirement do not apply to any gift that is intended, or that may be perceived to be intended, to influence any election for federal, state or local office, to defray the expenses or retire the debt of any election campaign, or to pay for inaugural expenses.

**\*\*\*** 

**This Policy is intended solely for the use of PanAgora in the management of its business and operations in compliance with applicable law. It is not intended to, and shall not under any circumstances, create any right or expectation in or on the part of any person, including without limitation any client or any interest holder in any client.**