Putnam Variable Trust ... Putnam Variable Trust Putnam VT Global Equity Fund IMPORTANT NOTICE: Delivery

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  • Putnam Variable Trust Putnam VT Global Equity Fund

    IMPORTANT NOTICE: Delivery of paper fund reports In accordance with regulations adopted by the Securities and Exchange Commission, beginning on or after January 1, 2021, at the election of your insurance provider, you may not receive paper reports like this one in the mail from the insurance provider that offers your variable annuity contract or variable life insurance policy unless you specifically request it. Instead, they will be available on a website, and your insurance provider will notify you by mail whenever a new one is available, and provide you with a website link to access the report.

    If you wish to continue to receive paper reports free of charge after January 1, 2021, please contact your insurance provider.

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

    Annual report 12 | 31 | 19

  • February 13, 2020

    Dear Shareholder:

    Global financial markets overcame a number of uncertainties in 2019. Both stock and bond markets experienced bouts of volatility, but performance recovered despite macroeconomic headwinds and risks. Stock markets worldwide delivered solid returns for the calendar year, with all three major U.S. equity indexes reaching record highs in December. The year was also beneficial for bond investors, as global fixed-income markets posted strong returns, thanks in part to policy easing from central banks.

    Although no one can predict the direction of the markets in the months ahead, Putnam’s experienced investment professionals actively seek to position their fund portfolios for all types of conditions. They take a research-intensive approach to investing that includes risk management strategies designed to serve investors through changing markets. In all environments, we believe investors should remain focused on time-tested approaches, such as maintaining a well-diversified portfolio, thinking about long-term goals, and speaking regularly with a financial advisor.

    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

  • Putnam VT Global Equity Fund 1

    Portfolio composition

    Allocations are shown as a percentage of the fund’s net assets. 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 information in the portfolio schedule notes included in the financial statements due to the inclusion of derivative securi- ties, any interest accruals, the exclusion of as-of trades, if any, and rounding. Holdings and allocations may vary over time.

    67.3% United States 9.0% United Kingdom 7.9% Japan 3.5% Canada 2.5% Switzerland 2.2% France 1.4% Australia 1.3% Ireland 3.9% Other countries 1.0% Cash and net other assets

    Performance summary (as of 12/31/19)

    Investment objective Capital appreciation

    Net asset value December 31, 2019

    Class IA: $19.83 Class IB: $19.59

    Total return at net asset value

    (as of 12/31/19) Class IA shares* Class IB shares† MSCI World Index (ND)

    1 year 26.92% 26.60% 27.67%

    5 years 43.20 41.39 52.03

    Annualized 7.45 7.17 8.74

    10 years 143.90 137.56 147.12

    Annualized 9.33 9.04 9.47

    Life 576.61 535.03 662.81

    Annualized 6.66 6.43 7.11

    For a portion of the periods, the fund had expense limitations, without which returns would have been lower.

    * Class inception date: May 1, 1990.

    † Class inception date: April 30, 1998.

    Cumulative total returns of a $10,000 investment in class IA and class IB shares at net asset value — since 12/31/09

    12/31/09 2010 2011 2012 2013 2014 2015 2016 2017 2018 12/31/19 $10,000

    $15,000

    $20,000

    $25,000

    $30,000

    $23,756 (Putnam class IB shares) $24,390 (Putnam class IA shares) $24,712 (MSCI World Index (ND))

    Putnam VT Global Equity Fund class IA shares Putnam VT Global Equity Fund class IB shares MSCI World Index (ND)

    The MSCI World Index (ND) is an unmanaged index of equity securities from devel- oped countries. Calculated with net dividends (ND), this total return index reflects the reinvestment of dividends after the deduction of withholding taxes, using a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties.

    Data represent past performance. Past performance does not guarantee future results. More recent returns may be less or more than those shown. Investment return and principal value will fluctuate, and you may have a gain or a loss when you sell your shares. Performance information does not reflect any deduction for taxes a shareholder may owe on fund distributions or on the redemption of fund shares. All total return figures are at net asset value and exclude contract charges and expenses, which are added to the variable annuity contracts to determine total return at unit value. Had these charges and expenses been reflected, performance would have been lower. Performance of class IB shares before their inception is derived from the historical performance of class IA shares, adjusted to reflect the higher operating expenses applicable to such shares. For more recent performance, contact your variable annuity provider who can provide you with performance that reflects the charges and expenses at your contract level.

  • 2 Putnam VT Global Equity Fund

    Report from your fund’s managers

    Can you describe the investing environment for the 12-month reporting period ended December 31, 2019? Equities reached new highs over the period. Despite bouts of market volatility, investors seemed more willing to shrug off geopolitical and macroeconomics risks. These risks included the ongoing U.S.–China trade dispute, a slowing global economy, Italy’s debt crisis, reces- sionary concerns in Germany, and uncertainty over a Brexit deal. In the United States, record-low unemployment, solid wage reports, and healthy consumer spending remained a bright spot for the period.

    Monetary policy grew more accommodative, which helped global stocks recover from losses sustained in May and August of 2019. In July, the U.S. Federal Reserve [the Fed] lowered its interest rate for the first time since 2008. The European Central Bank [ECB] moved its interest rate to an all-time low of -0.5% in September. By October, central banks in China and Japan introduced comprehensive stimulus packages.

    In the final quarter of 2019, investor optimism was bolstered by positive U.S.–China trade talks. In December, the United States and China reached a “phase one” trade deal. Global stock markets rallied and finished the year strong. For the 12-months ended December 31, 2019, the S&P 500 Index, a broad measure of stocks, posted a return of 31.49%. International stocks, as measured by the MSCI EAFE Index [ND], gained 22.01% over the reporting period.

    How did Putnam VT Global Equity Fund perform during the period? For the 12-month reporting period, the fund’s class IA shares returned 26.92%, compared with 27.67% for the fund’s benchmark, the MSCI World Index [ND].

    What were some specific stocks that contributed to fund performance during the reporting period? Summit Materials, a North American supplier of aggregates, cement, and asphalt, was the fund’s top contributor. The stock rose on improving fundamentals in the second half of 2019. The fund’s over- weight position relative to its benchmark in Ball Corp., a U.S.-based aluminum can manufacturer, also aided results. Ball’s sustainable packaging solutions continued to attract sales from global manufac- turers seeking to reduce their carbon footprint. Another highlight was our investment in Switzerland-based SIG Combibloc Group, which was not held in the benchmark. SIG Combibloc makes aseptic carton filling solutions that provide eco-friendly alternatives to plastic containers used in the dairy and beverage industries. Investors were impressed by the firm’s innovation, which includes recycling low-quality plastic waste into high-quality, food-grade materials.

    What about detractors from fund performance during the reporting period? Not owning technology giant Apple was our largest detractor rela- tive to the benchmark. Despite lower iPhone sales, Apple’s quarterly revenues and earnings growth exceeded analyst expectations. This contributed to a surprise upside in Apple’s stock. Bank of Ireland Group, a commercial bank operation in Ireland, was a disappoint- ment. Investors grew concerned over delays in a key IT infrastructure update, which stalled the company’s profit revitalization plan. We sold our position in Bank of Ireland during the period. Seven Generations Energy [7G], an energy producer based in Calgary, Canada, also

    dampened results. During the period, 7G had difficulties sustaining production growth at its large-scale property. We sold our position in 7G during the reporting period.

    As the fund begins a new fiscal year, what is your outlook? The phase-one trade deal between the United States and China cleared the path for riskier assets to rally late in 2019, but investor uncertainty remains. 2019 was a year of valuation expansion, and investors may fear stock markets have little room for appreciation in 2020. We believe a course of steady earnings and meaningful global economic growth could justify