Putnam Voyager Fund - Putnam Investments

index of securities prices specified in the managementcontract. In the course of reviewinginvestment performance, the Trustees examinedthe operation of your fund’s performancefees and concluded that these fees wereoperating effectively to align further PutnamManagement’s economic interests with thoseof the fund’s shareholders.As in the past, the Trustees also focused on thecompetitiveness of each fund’s total expenseratio. In order to ensure that expenses of thePutnam funds continue to meet competitivestandards, the Trustees and Putnam Managementhave implemented certain expenselimitations. These expense limitations were:(i) a contractual expense limitation applicableto all retail open- end funds of 32 basis pointson investor servicing fees and expenses and(ii) a contractual expense limitation applicableto all open- end funds of 20 basis points onso- called “other expenses” (i.e., all expensesexclusive of management fees, investor servicingfees, distribution fees, investment- relatedexpenses, interest, taxes, brokerage commissions,extraordinary expenses and acquiredfund fees and expenses). These expenselimitations serve in particular to maintain competitiveexpense levels for funds with largenumbers of small shareholder accounts andfunds with relatively small net assets. Mostfunds, including your fund, had sufficientlylow expenses that these expense limitationsdid not apply. Putnam Management’s supportfor these expense limitation arrangementswas an important factor in the Trustees’ decisionto approve the continuance of your fund’smanagement and sub- management contracts.The Trustees reviewed comparative fee andexpense information for a custom group ofcompetitive funds selected by Lipper Inc.(“Lipper”). This comparative informationincluded your fund’s percentile ranking foreffective management fees and total expenses(excluding any applicable 12b- 1 fee), whichprovides a general indication of your fund’srelative standing. In the custom peer group,your fund ranked in the first quintile in effectivemanagement fees (determined for your fundand the other funds in the custom peer groupbased on fund asset size and the applicablecontractual management fee schedule) andin the first quintile in total expenses (excludingany applicable 12b- 1 fees) as of December 31,2013 (the first quintile representing the leastexpensive funds and the fifth quintile the mostexpensive funds). The fee and expense datareported by Lipper as of December 31, 2013reflected the most recent fiscal year- end dataavailable in Lipper’s database at that time.In connection with their review of the managementfees and total expenses of the Putnamfunds, the Trustees also reviewed the costs ofthe services provided and the profits realizedby Putnam Management and its affiliates fromtheir contractual relationships with the funds.This information included trends in revenues,expenses and profitability of Putnam Managementand its affiliates relating to the investmentmanagement, investor servicing and distributionservices provided to the funds. In thisregard, the Trustees also reviewed an analysisof Putnam Management’s revenues, expensesand profitability, allocated on a fund- by- fundbasis, with respect to the funds’ management,distribution, and investor servicing contracts.For each fund, the analysis presented informationabout revenues, expenses and profitabilityfor each of the agreements separately and forthe agreements taken together on a combinedbasis. The Trustees concluded that, at currentasset levels, the fee schedules in place representedreasonable compensation for theservices being provided and represented anappropriate sharing of such economies of scaleas may exist in the management of the Putnamfunds at that time.The information examined by the Trusteesas part of their annual contract review for the20 Voyager Fund