Premier Income Trust Annual Report - Putnam Investments 2019-09-20آ  September 19, 2019 Dear Fellow

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  • Putnam Premier Income Trust

    IMPORTANT NOTICE: Beginning on January 1, 2021, reports like this one will no longer automatically be sent by mail. See inside for more information.



    Annual report 7 | 31 | 19

    Income funds invest in bonds and other securities with the goal of providing a steady stream of income over time.

  • Putnam Premier Income Trust Annual report 7 | 31 | 19

    Message from the Trustees 1

    About the fund 2

    Interview with your fund’s portfolio manager 5

    Your fund’s performance 11

    Consider these risks before investing 13

    Terms and definitions 14

    Other information for shareholders 15

    Important notice regarding Putnam’s privacy policy 16

    Summary of dividend reinvestment plans 17

    Trustee approval of management contract 19

    Audited financial statements 23

    Report of Independent Registered Public Accounting Firm 24

    Federal tax information 113

    Shareholder meeting results 113

    About the Trustees 114

    Officers 116

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

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

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

  • September 19, 2019

    Dear Fellow Shareholder:

    If there is any lesson to be learned from constantly changing financial markets, it is the importance of positioning your investment portfolio for your long-term goals. We believe that one strategy is to diversify across different asset classes and investment approaches.

    We also believe your mutual fund investment offers a number of advantages, including constant monitoring by experienced investment professionals who maintain a long- term perspective. Putnam’s portfolio managers and analysts take a research-intensive approach that includes risk management strategies designed to serve you through changing conditions.

    Another key strategy, in our view, is seeking the counsel of a financial advisor. For over 80 years, Putnam has recognized the importance of professional investment advice. Your financial advisor can help in many ways, including defining and planning for goals such as retirement, evaluating the level of risk appropriate for you, and reviewing your investments on a regular basis and making adjustments as necessary.

    As always, your fund’s Board of Trustees remains committed to protecting the interests of Putnam shareholders like you, and we thank you for investing with Putnam.

    Respectfully yours,

    Robert L. Reynolds President and Chief Executive Officer Putnam Investments

    Kenneth R. Leibler Chair, Board of Trustees

    Message from the Trustees

  • About the fund

    A multisector approach to fixed income When Putnam Premier Income Trust was launched in 1988, its three-pronged focus on U.S. investment-grade bonds, high-yield corporate bonds, and non-U.S. bonds was considered innovative.

    In the more than 25 years since then, the fixed-income landscape has undergone a dramatic transformation, but the spirit of ingenuity that helped launch the fund is still with it today.

    A veteran portfolio management team

    The fund’s managers strive to build a well-diversified portfolio that carefully balances risk and return, targeting opportunities in interest rates, credit, mortgages, and currencies from across the full spectrum of the global bond markets.

    D. William Kohli

    Chief Investment Officer, Fixed Income Industry since 1988 At Putnam since 1994

    Michael V. Salm

    Co-Head of Fixed Income Industry since 1989 At Putnam since 1997

    Paul D. Scanlon, CFA

    Co-Head of Fixed Income Industry since 1986 At Putnam since 1999

    Robert L. Davis, CFA

    Portfolio Manager Industry since 1999 At Putnam since 1999

    Brett S. Kozlowski, CFA

    Portfolio Manager Industry since 1997 At Putnam since 2008

    Michael J. Atkin

    Portfolio Manager Industry since 1988 At Putnam since 1997 (Photo not available.)

    Diversified holdings across a wide range of security types and market sectors

















    Cash and net other assets


    Agency pass-through

    Commercial MBS

    Agency collateralized mortgage obligations

    High-yield corporate bonds

    Non-agency residential MBS

    Emerging-market bonds

    Convertible securities

    International Treasuries/agency securities

    Bank loans

    Investment-grade corporate bonds

    Asset-backed securities

    Equity investments

    Cash and net other assets














    Allocations are shown as a percentage of the fund’s net assets as of 7/31/19. Cash and net other assets, if any, represent the market value weights of cash, derivatives, short-term securities, and other unclassified assets in the portfolio. Summary information may differ from the portfolio schedule included in the financial statements due to the inclusion of derivative securities, any interest accruals, the use of different classifications of securities for presentation purposes, and rounding.

    Allocations may not total 100% because the table includes the notional value of certain derivatives (the economic value for purposes of calculating periodic payment obligations), in addition to the market value of securities. Holdings and allocations may vary over time.

    Premier Income Trust 3 2 Premier Income Trust

  • Performance history as of 7/31/19

    Annualized total return (%) comparison

    LIFE OF FUND* (since 2/29/88)


    6.66 5.76

    7.34 6.83







    6.21 7.39





    7.53 6.79

    The fund — at NAV Putnam Premier Income Trust (NYSE ticker: PPT)

    Fund’s primary benchmark ICE BofAML U.S. Treasury Bill Index

    Fund’s secondary benchmark Bloomberg Barclays Government Bond Index

    Fund’s Lipper peer group average General Bond Funds (closed-end)

    Data are historical. Past performance does not guarantee future results. More recent returns may be less or more than those shown. Investment return and net asset value will fluctuate, and you may have a gain or a loss when you sell your shares. Performance assumes reinvestment of distributions and does not account for taxes. Fund returns in the bar chart are at NAV. See below and pages 11–12 for additional performance information, including fund returns at market price. Index and Lipper results should be compared with fund performance at NAV.

    Effective January 30, 2018, the ICE BofAML U.S. Treasury Bill Index replaced the Bloomberg Barclays Government Bond Index as the fund’s primary benchmark. In Putnam Management’s opinion, the new index is more appropriate to the fund’s flexible multisector investment approach.

    * The fund’s primary benchmark (ICE BofAML U.S. Treasury Bill Index) was introduced on 6/30/92, which post-dates the inception of the fund’s class A shares.

    Recent broad market index and fund performance






    U.S. bonds (Bloomberg Barclays U.S. Aggregate Bond Index)

    U.S. stocks (S&P 500 Index)

    Fund’s secondary benchmark (Bloomberg Barclays Government Bond Index)

    Putnam Premier Income Trust (at NAV)

    Fund’s primary benchmark (ICE BofAML U.S. Treasury Bill Index)

    This comparison shows your fund’s performance in the context of broad market indexes for the 12 months ended 7/31/19. See above and pages 11–12 for additional fund performance information. Index descriptions can be found on pages 14–15.

    4 Premier Income Trust

  • Interview with your fund’s portfolio manager

    D. William Kohli Portfolio Manager

    Bill is Chief Investment Officer, Fixed Income. He has an M.B.A. from the Haas School of Business, University of California, Berkeley, and a B.A. from the University of California, San Diego. Bill joined Putnam in 1994 and has been in the investment industry since 1988.

    Michael J. Atkin; Robert L. Davis, CFA; Brett S. Kozlowski, CFA; Michael V. Salm; and Paul D. Scanlon, CFA, are also Portfolio Managers of the fund.

    Bill, how would you summarize the fund’s investment environment during the reporting period